Proposed FY 2017-2018 Operating & Capital Budget Presentation

Budget Goals:  No Real Estate Tax Increase  Support for Suffolk Public Schools  Employee Compensation and Critical Personnel Resources  Investment in Quality of Life  Compliance with Financial Policies

 No Tax Increase • Real Estate Tax Rate: $1.07 Citywide $.105 Downtown Business Overlay Taxing District $.24 RT. 17 Taxing District • 3rd lowest rate in region behind Va. Beach ($.99) and Chesapeake ($1.05)

 Support for Suffolk Public Schools • $2.1M in additional funding from State, Federal, Other sources • City proposed budget includes $1M in additional Local Funding • Total Local Funding Support for Schools Operating Admin. Office Lease Debt Service

$54,832,201 551,517 10,605,488 $65,989,206

*Local Funding for School Operations only not including debt service or lease payments.

Suffolk Local Funds Support of Schools 14,000

$80,000,000 $70,000,000 $60,000,000

$60.1M

$61.0M

$62.2M

$65.0M

$65.5M

$65.9M

$69.4M

13,960 13,920

$55.2M 13,880

$50,000,000 13,840 $40,000,000 13,800 $30,000,000 13,760 $20,000,000

13,720

$10,000,000

13,680

$‐

13,640 FY 12

FY 13

Local Funds Operating Support of Schools

FY 14

FY 15

FY 16

Lease/Rent of Building

FY 17

FY 18 Proposed FY 19 Projected

City Debt Service Related to Schools

Avg Daily Population

• $10.3M increase in total funding over last 5 years (FY 12 – FY 17) despite flat enrollment.

• $3.5M projected increase in Local Funding required in FY 19 for new middle school operational expenses and additional debt service.

 Support for Suffolk Public Schools •

Future Obligations – FY 19: - $3.5M additional operating expenses projected for operation of the New Middle School and additional debt service in FY 19 - New revenue growth needed ---- equivalent to 3.8 cents on Real Estate tax rate

 Employee Compensation and Critical Personnel Resources • 1.2% Cost-of-Living Adjustment effective July 1, 2017 • 9 new positions proposed for General Fund departments out of 29 requested Police Officer Accreditation Manager PSAP Manager Firefighter I Appraiser I Asst. Commonwealth Attorney II Deputy Treasurer I

1 1 1 3 1 1 1 9

Redeploys 2 Police Officers currently performing Accreditation/PSAP duties

 Employee Compensation & Critical Personnel Resources •

3 new positions recommended in enterprise and special revenue funds to address service level needs  Road Maintenance Fund - Construction Inspector I

1

 Transit Fund - Transit Manager

1

 Stormwater Fund - Civil Engineer III

1

 Investment in Quality of Life • FY 18 Capital Budget includes Year 1 projects per adopted CIP General Gov’t Public Utilities Stormwater

$59,676,582 8,360,000 350,000 $68,386,582

New Middle/Elementary $14.25 M Operations Facility 4.00 M HVAC/Chiller 1.00 M Hazardous Materials Mgmt. .75 K $19.3 M

• $24.1M or 35% of Capital Funding provided by State/Federal Grants • $4.5M needed for compliance with Capital Pay-Go • $2M restored in General Fund • $2.5M proposed from projected FY 17 excess General Fund revenue via Unassigned Fund Balance

ďƒ˜ Compliance with Financial Policies Policy Requirement

FY 17

FY 18 Projected

Capital Pay Go

3.0%

3.0%

3.1%

Debt as Percentage of Assessed Value

4.0%

2.2%

2.1%

Debt as Percentage of General Gov't Exp.

10.0%

9.5%

8.8%

Unassigned Fund Balance

12.0%

15.8%

16.1%



Budget Document Structure: • • • • •

Covers 17 Operating & Capital Funds of the City Total of all funds - $601,766,129 Includes “Executive Summary” of major points for funds Includes detailed line item financial plans for all funds Includes an Appendix to address:  Personnel Summary by department  City statistical information, graphs, and trends  Summary of reserve balances  Financial policy compliance report  Proposed ordinances to support budget proposal

General Fund - Executive Summary Current R.E. Tax Rate:

$

1.07

Proposed R.E. Tax Rate:

$

1.07

Recommended Tax Increase:

$

0

Reassessment Tax Rate Adjustment:

$

.02

% General Fund

Change

Proposed Revenues:

$

202,010,846

3.2%

Proposed Expenditures:

$

202,010,846

3.2%

$

0

$

6,169,558

Unfunded Gap:

Change in Spending from Prior Year:



Real Estate – 2% increase ($2.1M) • Reassessment value increase (1.56% incr.)

• New Construction increase (.50% incr.)



Personal Property – 5% increase ($900K)



Public Service Corporations – 18% increase ($600K)



Other Local Taxes – 6% increase ($2.4M) o Admissions (20%) o Lodging (18%) o Sales & Use (11%)

o Business License (9%) o Motor Vehicle License (4%) o Meals (3%)



Fees and Charges – 2% decrease ($-164K)



State Revenue – 0.4% decrease ($-82K)



Federal Revenue – 2% increase ($123K)



Fund Transfers – 8% increase ($356K) Includes $2.5M from Unassigned Capital Pay-Go financial policy.

Fund Balance for compliance with

GENERAL FUND REVENUE FY 17 Budget General Property Taxes

$

Other Local Taxes

117,792,437

FY 18 Recommended $

40,450,000

Fees & Charges

Incr./ Decr.

Percent Change

121,302,997

$ 3,510,560

3%

42,875,000

2,425,000

6%

7,133,895

6,970,290

(163,605)

20,893,615

20,811,986

(81,629)

Federal Revenue

5,077,656

5,200,507

122,851

2%

Fund Transfers

4,493,685

4,850,066

356,381

8%

202,010,846

$ 6,169,558

State Revenue

$

195,841,288

$

-2% -0.4%

3.2%

Revenue includes $2.5M from Fund Balance for Pay-Go requirements.

__________ __________ __________ __________ __________ __________ __________ __________

Local & Regional Org. Non Departmental Community Development Capital Pay Go Public Works Judicial Parks, Rec., & Cultural General Government

.005 .005 .02 .02 .03 .04 .05 .06

__________

Health and Welfare

.07

__________

Debt Service

.07

__________

Public Safety

.30

__________

Education & Related Debt .33

Total________________________________$1.00

Primary Drivers: 

Capital Pay-Go ($2.5M) ◦ Partially restores recurring revenue to cash fund capital projects ◦ Additional cash funding for capital projects required to meet financial policy due to increase in General Fund budget



Personnel & Benefits ($2.1M) ◦ Full Yr. of Compensation Study (Oct. 1st implementation in FY 17) ◦ 1.2% COLA for employees ◦ 9 new positions to address City growth and workload increases



Schools Funding ($1M) ◦ $1M increase for school operations ◦ $16K increase for school administration and print shop leases

Primary Drivers: 

Information Technology ($827K) ◦ Maintenance Service Contracts (Motorola E-911/Towers and overall cost increases) ◦ Software/Program support



Fleet ($767K) ◦ Budgeted for fleet operating expenses without utilization of Fleet fund balance



Risk Management ($424K) ◦ Increasing health insurance liability ◦ Projected increase in property/liability premiums due to Hurricane Matthew claims

Proposed Budget:

$68,386,582

• All Year 1 CIP projects included in FY 18 Capital Budget General Gov’t $59,676,582 Public Utilities 8,360,000 Stormwater 350,000 $68,386,582

$19.3M provided for Schools capital projects. $24.1M or 35% provided from State/Federal grants

• G.O. Bond Issuance of $27.7M • Public Utility bond funding of $5M for water & sewer projects • Utilize $2.5M in anticipated FY 17 excess revenues from Fund Balance for compliance with Capital Pay-Go financial policy requirement

Downtown Business Overlay District

$176,222

 No change to tax rate of $.105  Continued enhanced street sweeping, refuse collection, and landscaping services to Downtown

Rt. 17 District

$1,855,432

 No change to tax rate of $.24  Funding for the Point Place Roadway, Point at Harbour View project  Funding for debt payments associated with transportation improvements

 Road

• •

Maintenance Fund

$26,186,245

State Maintenance funds based on 1,634 lane miles Addition of Construction Inspector I position to address work load increases

 Grants

Fund

$424,594

•

$350K in local match funds to leverage State/Federal grants

•

Section 108 loan payment with CDBG funds

 Aviation

Fund

$1,028,142

 Includes transfer from the General Fund of $76,970

 Law

Library Fund

$41,561

 Operation of the public City Law Library located in the Godwin Courts Building  Transit

Fund

$1,624,571

 Provides operational cost for City bus service  Additional $485,000 in Federal funding anticipated for additional service hours and new Saturday service  Addition of Transit Manager contingent upon Federal funding  Purchase of a passenger bus, paratransit vehicle, two new shelters, and signage at all official bus stops

 Fleet

Fund

$15,559,912

• Replacement of critical Fleet equipment exceeding useful life and safety standards using cash from Fleet Fund Balance  Information

Technology Fund

$8,931,702

• Provides for technology services citywide • Maintenance contracts for critical equipment and software • Replacement of aging equipment required for special revenue and enterprise fund departments only

 Risk

Management Fund

$21,429,655

• Funds workers compensation, public safety line of duty act, health insurance, retiree OPEB health benefit obligation and property/casualty insurance  Continued 80% employer contribution to Health Insurance premium  Compliance with 20% risk stabilization reserve policy requirement

• Full funding for OPEB obligations • Anticipated increase in Health Insurance claims expenses

Proposed Budget:

$27,179,729

• Annual debt service for General Government, Schools, & Rt. 17 Taxing District • Includes an estimate for Debt Service on $27.7M in new GO Bonds to support Year 1 CIP projects Policy Compliance: • Debt /AV 4% max: 2.1% • Debt to GF exp 10% max: 8.8%

Proposed Budget:

$160,536,936

• $2.1M increase in State, Federal, Other funding • Local contribution: $54,832,201 Operations 551,517 Bldg. Leases $55,383,718  $1M increase for operating expenses  $16K increase for school administration and print shop leases

• Level student enrollment – 13,800

Excludes: • $10.6M in School Debt Service funding projected for FY18 to be provided by the General Fund • $19.3M in Capital Project funding for New Elementary and Middle Schools, Operations Facility, HVAC/Chiller Replacement, and Hazardous Materials Management

 Storm

Water Fund

$6,114,296

• No increase in rate of $6.00 p/month • Mandated Stormwater management services to include mosquito control • Addition of Civil Engineer III to address increasing workload

 Public

Utility Fund

$52,684,425

• New customer projection of 400 ERUs • Usage rate adjustments of $.17 (Water) & $.24 (Sewer) per CCF • Average combined Water/Sewer bill increase for 5 CCF user of $2.05 per month not including HRSD adjustments • No net FTEs – Adds Safety Officer II and eliminates Office Asst.

• Policy Compliance projected in all areas required



Refuse Fund

$7,595,278

• Provides for household refuse, bulk collection, citywide recycling service, and landfill closure costs to 29,500 households • $3 per month fee increase to $19.50 per month to address cost requirements of trash disposal at the regional landfill per the new SPSA agreement

90 gallon Refuse Container and bi-weekly Recycling.



Refuse Fund established with the adoption of the FY 12 Budget



History of Monthly Refuse Collection Fee: FY 12 - $17.50 FY 13 - $17.50 FY 14 - $17.50 FY 15 - $16.50 FY 16 - $16.50 FY 17 - $16.50 FY 18 - $19.50 (Proposed)



No Increase to the Real Estate Tax Rate



$1M in additional Local Funding for Suffolk Public Schools



1.2% COLA for City employees



Modest increase in FTEs to address workload demand due to City growth



Significant investment in quality of life through capital improvements



$3 per month increase in Refuse fee due to cost requirements

of new SPSA agreement  Compliance with all Financial Policies



April 5, 2017

Work Session: - Presentation of Proposed Budget Regular Meeting - Council Motion: - Authorize May 3rd Public Hearing on Budget - Authorize May 17th Public Hearing on “Effective Rate Increase”



May 3, 2017

Public Hearing on Proposed Budget & Related Ordinances



May 17, 2017

Public Hearing on “Effective Rate Increase” Adoption of City Budget & Related Ordinances

Proposed Budget is Posted to City Website  Presentation is Posted to City Website  Full Budget Document Available for Review: 

 City Website  Municipal Building:  City Clerk’s Office  Finance Department/Budget Office

 City Libraries  Recreation Centers (East Suffolk and Whaleyville) 

Citizens can contact the Budget Office for assistance or questions at BudgetOfficer@suffolkva.us or 514-4006