HomeMy WebLinkAboutItem 02 - Major Issues ReportMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGEtf___-
MEETING DATE: JULY 22, 2013
SUBJECT: MAJOR ISSUES REPORT
The objective of the Major Issues report is designed to give City Council an
opportunity to see a snapshot of each major fund, hear staff recommendations and to
give input on proposed recommendations prior to the preparation and presentation of
the complete budget packet. Staff will present an overview of each fund and budget
related issues facing each fund. The FY2014 Major Issues Report is attached.
7/19/2013 (10:17:17 AM)
2013 -2014
Proposed Budget
Major Issues Budget Report
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July 22, 2013
2014 Proposed Budget — Maior Issues
The State of Texas and the City of Grapevine have been able to weather the economic recession
better than most. However, the downturn coupled with major highway construction projects
has put a fair amount of stress on both the City's revenues and expenditures. Some revenues
sources have begun to bounce back and show some improvement but the light at the end of
the tunnel is still not as bright as we would like it to be.
The City Manager's Proposed Budget for next year was developed taking into consideration
that some improvement exists but the future still may be a little uncertain. A foundation for
the budget was developed using core building blocks which set the ground rules for budget
development. The basic assumptions incorporated are as follows:
- Maintain the fund balances as defined in the adopted fiscal policies. The General
Fund requirement is 20 %.
- Fund the Permanent Capital and Permanent Street Maintenance Funds with cash
and at prior year funding levels.
- Continue with the funding of the eight year TMRS payoff phased program in
order to bring the funded liability to 80 %.
- Keep the annual transfer to the Quality of Life Fund at $3,000,000.
- Maintain operating line items at current levels except where increase in service
levels or price increases requires additional funding.
- Fund reasonable fleet and technology purchases with cash.
- Keep salary increases in line with the surveyed surrounding cities and national
average recommendation.
- Transfer to the CCPD Fund from the General Fund an amount to balance the
Fund. (Approximately $1,100,000)
Once the foundation for the budget was established departments presented to the City
Manager and the Budget staff essential needs and justification for any increases in operating
line items and Increased Service Level (ISL) requests. Total initial ISL requests totaled
$2,948,037.
The next level of review for funding was prioritized as:
- The amount needed for salary adjustments.
- New capital and technology funding.
- Increased Service Level requests.
In addition, Department Directors were asked to prioritize their requests.
After reviewing all of the requests and departmental presentations staff prepared the draft
2014 Proposed Budget. The budget will be presented to City Council at a workshop on August
19th. Prior to the workshop a review of the major budget issues included in the draft budget
will be presented at the July 22 t workshop. The review will consist of a discussion of issues by
fund and will solicit input in order to finalize the proposed budget.
A Fund Summary sheet for all funds is included as Exhibit A.
General Fund
Ad Valorem Tax Rate —The proposed budget keeps the tax rate at $345695 per
$100 valuation or will adjust to keep the same level of revenue as in the current
year. The effective tax rate is the rate required to produce the same amount of tax
revenue as the current year. This rate could be higher if overall assessed valuations
decrease. Based on the preliminary tax roll values the effective rate would need to
be $387946 in order to provide the same level of revenue. However the
preliminary roll still has contested values that have not been reviewed by the
appraisal board and only the minimal value has been included to date. The
increase in debt service for the sale of the CAC and Public Safety Building has not
increased the debt portion of the tax rate (See Exhibit H).
2. Sales Tax -The recovery from the recession has been sporadic and has caused
monthly Sales Tax collections to fluctuate between positive and negative growth
compared to prior years. In addition the highway construction projects have
impacted local businesses and makes it difficult to project future collections.
Currently year to date collections as compared to the same period last year are up a
total of 3.29 %. Projecting flat growth for the rest of the fiscal year the projected
total amount of collections is $25,904,068. Using this number as the based we
included a 3.86% increase in Sales Tax for the proposed budget based on current Y-
T -D collections and flat growth for the rest of the current fiscal year.
2
3. New Positions —The staffing study that was conducted last year summarized the
city's staffing levels were on target except in a few areas. The current budget
attempted to address some of the needs certain areas. The proposed budget
attempts to address some more of the needs as outlined in the study. The General
Fund has includes 3.49 positions. (See Exhibit E) These positions were part of the
staffing study and are necessitated by the change in state legislative requirements
or new facilities /improvements. The CVB fund adds 3.50 positions. The Utility Fund
added .40 position by increasing a part time position to a full time one which is
currently funded .60 in the General Fund. Department Directors looked for ways to
supplement funding with increases in revenue and the use of creative alternatives
in order to assist in the increased funding of the positions.
4. TMRS— The Texas Municipal Retirement System administration has changed the
actuarial calculation methodology for funding the plan. The result was a drop in the
amount of coverage for funded liability. The administration has developed an eight
year payback period that would allow cities to bring their funded liability to an 80%
level. This budget will incorporate the sixth year of the eight year period. The new
rate increases from 18.67% to 18.96 %. This is an increase to the General Fund of
$107,620.
5. Merit and Step Pay Increases —The budget includes a 3% merit increase and a
5% public safety step increase. Employees at the top of their salary range will also
receive a 3% merit increase as a lump sum which will not be included in the
employees base salary. The increases appear to be in line with the average
amounts being recommended by our comparison cities. (See Exhibit D) Not all of
the cities have responded but a majority has and, in some cases, indicated that they
actually gave more of an increase for the current year than what they reported to
us last year.
6. Health costs — Health care costs have been reduced over the past two years
primarily because of the change in our Third Party Administration contract. In
addition continued emphasis on wellness and preventative care has allowed the
city to reduce total medical costs. There will be no changes to current employees
cost however the number of future plan types that are offered will be reduced from
four to three. This reduction will not affect any current or retired employee's plan
that they are currently enrolled on. With the continuation of the current program
3
we have limited any increase to projected industry cost increase in the proposed
budget.
Quality of life Fund
The Quality of Life Fund is projected to have an ending fund balance of $3,406,465 at the end of
this fiscal year providing the current year General Fund transfer of $3,000,000. The Proposed
Budget also includes a transfer of $3,000,000 from the General Fund. Proposed projects for the
QOL Fund total $2,854,057. (See Exhibit F). The ending fund balance for fiscal year 2014
becomes $6,406,465.
Conventions and Visitors Bureau Fund
The Hotel /Motel Tax receipts have fluctuated similar to the Sales Tax over the past year.
However, the receipts have recently started on a positive upside trend. Staff has taken a
minimalist approach towards the funding of new positions and Increased Service Levels. A
conservative approach to average daily rates was used in the revenue projections. Industry
growth is showing a slight increase in ADR and the projection for an additional 300 rooms
should help towards the revenue projections.
The budget maintains current levels except for capital items that are needed to fulfill current
programs that are already committed or are now in place. Staffing requirement
recommendations (See Exhibit E) are included to meet needs of additional programs and
projects that are current in place or needed increases in expanded services. The Proposed
Budget does not reduce the estimated ending fund balance and does increase it by $183,911
(See Exhibit A) the balance is within the 60 day reserve policy.
Equipment and Technology Fund
The Equipment Replacement Fund has included $1,224,000 in replacement vehicle funding (See
Exhibit C). This represents the total of replacing vehicles and equipment that meet the
established replacement criteria of life cycle, unit integrity, and any special circumstances. All
25 replacement units will be funded with cash.
The Information Technology replacement /upgrade program is funded by cash and is at the
same level as the 2013 program (See Exhibit E). The total of $553,650 includes initiatives to
4
replace 100 personal desktop computers with virtual PCs: a Canopy Radio Network upgrade and
the purchase of equipment to set up a second location for emergency operations.
Crime Control and Prevention Fund
The fund has expenditures of $13,571,925 which are funded thru the Y2% Crime Control District
Sales Tax and a projected General Fund transfer of $1,060,000. No new positions are included
in the Proposed Budget.
Utility Enterprise Fund
The Utility fund anticipates an addition to working capital of $1,049,502. Total revenues are
projected at $23,812,500 and include rate increases for both water and sewer. Expenditures
total $22,762,998. The budget includes $1,000,000 for Water and Wastewater Permanent
Capital Maintenance projects.
Lake Park Special Revenue Fund
Total revenues for the fund are projected at $2,225,000 with expenditures totaling $1,951,461.
Lake Enterprise Fund
The Lake Enterprise Fund has no additional ISL and equipment is on a replacement basis.
Equipment replacement will be funded by cash.
PCMF & PSMF
All of the projects are funded with cash.
- Facilities Permanent Capital Maintenance Plan - $550,000.
- Parks Permanent Capital Maintenance Plan - $701,000.
- Annual Street Maintenance and Overlay Plan - $1,255,000.
- Traffic, Signal & Signage maintenance Plan- $303,000.
Stormwater Drainage Utility Fund
Total expenditures in the fund are $2,362,410 with revenues of $1, 3890,729. Ending projected
fund balance is $1,457,338. All of the improvements will be funded with cash.
Budget Calendar
The Budget Calendar is included as Attachment G. The Proposed budget will be submitted to
City Council by August 1 with a workshop review on August 19.
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FY 2013 -14 INCREASED SERVICE LEVEL PROPOSALS
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Other
Total
Additional
Personnel
Operating
Capital
Proposed
FTE
Dept Division Title
Costs
Costs
Costs
Cost
- - -.
-Requested
Citywide
Non - Departmental Internship
-- - -- -- Program
25,000
25,000
Non - Departmental My Waste App
3,000
3,000
Volunteer 2
Non - Departmental Software &
Maintenance
— — .....__ _..- ... -. -- - -- - - -
8,000
8,000
Christmas
Non - Departmental Decorations -
QOL Fund
150,000
150,000
CVB Admin Sales Manager I
73,007
73,007
1.000
CVB Admin Accountant 1II
----- - - - - -- - -- ------ - - - - -- - - ....._ - --
86,457
86,457
1.000
CVB Admin Communications
- - -- ------ - - - - -- Coordinator
67,158
67,158
1.000
Additional
CVB Admin Registration
Assistant hours
13,584
13,584
0.500
Fire Inspector/
Fire Prevention
In_vesti ator --
77,999
21,015
50,000
149,014
1.000
-
Aquatics Staff
Parks Aquatics @ Dove
Waterpark
54,465
9,400
63,865
2.490
GIS
Public Works Utilities Engineering
Coordinator
39,521
39,521
0.400
TOTAL FY 2014
ISL PROPOSALS
462,191
191,415
50,000
678,606
7.390
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NEW POSITIONS PROPOSED FOR FY 2014
Fire Inspector /Investigator
FY 2014 Cost: $128,748
This position addresses critical impacts to prevention capabilities that have occurred and continue still
since temporarily addressing inspection staff in 2007 with part time positions: New construction in the
last 10 years has added over 11,800,000 sq. and is climbing; state law interpretation has stopped field
firefighters from doing business inspections (this equals about 1000 more inspections for Div.); and,
limits by ISO for the number of annual inspections allowed by one inspector. An additional person to
meet service demands resulting from these impacts would allow us to sustain only minimum elements for
fire and life safety. The GFD cannot sustain its current level of fire prevention service within established
criteria if staffing is not modified. The impact through ISO could impact our fire insurance rates to our
citizens and businesses. Also, the demand can no longer be met purely by PT positions.
Additional Seasonal Staffing at Dove Waterpark FY 2014 Cost: $54,447
The renovation and transformation of Dove Pool to Dove Waterpark requires additional seasonal staffing
of lifeguard and cashier positions. The FY 2014 budget contains funding for an additional 1.66 FTE in
lifeguards and an additional 0.83 FTE in cashier positions.
CVB Sales Manager I FY 2014 Cost: $73,007
This request will replace an existing Sales Manager I position which was reclassified earlier this year to
create the On Line Ticket Manager position, a recommendation from the staffing study.
CVB Accountant III FY 2014 Cost: $86,457
This position would be a supervisory position over the many facets of the CVB accounting function.
With 10 divisions, 5 checkbook accounts, TABC activities and on -line ticket sales we are in need of a
position to manage these extensive accounting activities. In conjunction with this position we would free
up the part -time accounting position and the part-time membership position.
CVB Communications Coordinator FY 2014 Cost: $67,158
This position, under the direction of the communications manager, coordinates the public relations
program assisting with media contacts, releases, media drops and FAMs. This will enable the program to
grow and to reach additional markets. This position was recommended in the staffing study.
CVB Registration Assistants FY 2014 Cost: $43,310
This request increases the authorized hours for part-time registration assistants by 1,040 (0.5 FTE). The
additional hours will be used to assist with coverage for Visitor Center and Depot.
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GIS Engineering Coordinator - Reclass to Full Time FY 2014 Cost: $39,521
This request is to reclassify the part-time GIS Engineering Coordinator position from me 24 hours per
week to full -time 40 hours per week. This will increase our ability to incorporate additional software
uses in our operations. The position will oversee purchasing of technical system hardware & software,
coordinate with IT for data integrity, backup, maintenance and support strategies. The added hours will
also enable the individual to provide technical support for department's remote servers, mobile devices,
work order and asset management system, GIS and WIN access devices. Areas of interest include
Pavement Management, Traffic Sign Maintenance, Asset Management, Record Management, Mobile
Device Utilization, Maintenance of Existing Integration Procedures, Maintenance of GIS Datasets,
Reporting Tools and User Interfaces. Will serve as Public Works Department's Technical Liaison with
the IT Dept.
FY 2014 PROPOSED QUALITY OF LIFE FUND
BEGINNING FUND BALANCE
2013 -14
Proposed
6,426,465
FINANCING SOURCES:
Transfer from General Fund 3,000,000
Interest Income 20,000
Total Funding Sources 3,020,000
FINANCING USES:
Main Street Holiday Decorations
150,000
CAC Entrance / Roundabout
687,233
Oak Grove Softball Lights
250,000
Oak Grove Soccer Lights
270,000
Meadowmere Soccer Restroom
200,000
Meadowmere Soccer Paved Parking
250,000
Lakeview Playground
75,000
GRACE Playground
50,000
Median Landscaping
200,000
Parr Park Parking and Road Improvements
120,000
Meadowmere Park Pond and Irrigation System
280,000
Parr Park Trail Widening
100,000
Pleasant Glade Pool Lightning Prediction System
11,000
Golf Course Restrooms
120,000
Library Remodeling for Study Rooms
90,824
Total Funding Uses 2,854,057
ENDING FUND BALANCE 6,592,408
FY 2013 -2014 CITY OF GRAPEVINE BUDGET CALENDAR
May 06
Monday
Budget Kickoff
May 31
Friday
Submission Deadline
June 3 - June 21
Budget Office Review
June 24 — June 26
Mon -Wed
Departmental Budget Hearings
July 19
Friday
Major Issues Report distributed to City Council
July 22
Monday
Major Issues Report Review to City Council
July 25
Thursday
Receive Certified Tax Roll from taxing entities
August 1
Thursday
Operating Budget Submitted to City Council
August 6
Tuesday
City Council Resolution to Accept Certified Tax Roll
August 19
Monday
City Council Budget Workshop
August 26
Monday
Notice to Adopt Tax Rate and Budget posted to City's Website
September 3
Tuesday
Crime Control & Prevention District Public Hearing on FY14 Budget
September 3
Tuesday
City Council Public Hearing on FY14 Operating Budget
September 10
Tuesday
4B Economic Development Board FY14 Budget Adoption
September 10
Tuesday
Crime Control & Prevention District Board FY14 Budget Adoption
September 10
Tuesday
City Council Adoption of FY14 Operating Budget and Tax Rate
October 1
Tuesday
Fiscal Year 2013 -14 begins
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