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Home My WebLink AboutCouncil Presentation 01/09/2018 - FY2019 Council Budget Study SessionFISCAL YEAR 2018-2019 BUDGET PLANNINGJamsheed Mehta, Interim Town Manager Erik Montague, Finance DirectorStudy Session - Marana Board RoomJanuary 9, 20181 Strategic Plan, Vision and Focus Areas Current Year AccomplishmentsGeneral Fund FY2019 Preliminary OutlookCouncil Discussion ItemsITEMS2 STRATEGIC PLANVISION: Committed to providing exceptional publicservice, a climate for economic sustainabilityand a welcoming environment that makesMarana Your Town for life.OVERRIDING PRINCIPLES:– Financial Sustainability– Quality Public Service– Strategic Partnerships– Local Resource Investment3 ACCOMPLISHMENTSSelected Capital ProjectsTangerine Road Corridor - Town PortionMarana Road Realignment & RoundaboutTangerine Sky Community ParkHonea Heights Pocket ParkSplash Pad at Crossroads Silverbell ParkOtherTangerine Public Art unveilingCouncil adoption of Strategic Plan IVAdoption of Economic Development Strategic PlanCompletion of Land Development Code rewrite4 BUDGET OUTLOOKErik Montague5 Continued growth in regional economy and improvement of key revenues ohttps://ebr.eller.arizona.edu/economic-forecasts/forecast-dataohttps://www.azleg.gov/jlbc/ATRA111417.pdfSales tax –oModest increases to consumer spending and local business growthIntergovernmental –oPopulation growth of 1,626 or ~ 4%License, Permits & Feeso650 new homes and some commercial activityInflation rate ~2.2% (YoY November 2017)FY2019 PRELIMINARY OUTLOOK KEY ASSUMPTIONS6 FY2019 PRELIMINARY OUTLOOK7SALES TAXESModest improvement in key taxes (YoY)Retail -↑3%Restaurants-↑10%Hotels -↑17%Projection classifications based on new business codesPreliminary General Fund numbers excludes dedicated ½% tax for PD facility2018 Budget 2019 Prelim Budget $ Change % Change25,817,378 26,284,560 467,182 1.8% $- $0.5 $1.0 $1.5 $2.0Jul-06Jan-07Jul-07Jan-08Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17MillionsTown of Marana, ArizonaMonthly Tax Collects by Major Type (Jul 2006 - Nov 2017) 3m lagConstructionTransportation, Communications, UtilitiesRetail TradeRestaurant & BarsFire, Insurance & Real EstateHotels & Other Lodging½% Tax½% Tax FY2019 PRELIMINARY OUTLOOK8SHARED REVENUESModest improvement –census (YoY)Shared sales tax -↑3%Shared income tax-↑3%Auto lieu tax -↑2%Will change based on ADOR estimates due by March and US Census population estimates State budget structural challenges (JLBC)2018 Budget 2019 Prelim Budget $ Change % Change11,479,759 11,824,152 344,393 3.0%4.1%3.9%4.5%4.6%2018 2019 2020 2021Arizona Revenue Growth4 – Sector Consensus ForecastCurrent Year Estimate* Data provided by JLBC Revenue Update 11/14/17 FY2019 PRELIMINARY OUTLOOK9PERMITS & FEESSingle family residential (SFR) permitsSFR’s - FY2018625 – Budgeted370 – YTD (59% of Budget)SFR’s – FY2019650 – PreliminaryRevenue change due to permit valuation changesFinal 2019 numbers based on department projections2018 Budget 2019 Prelim Budget $ Change % Change4,454,185 4,816,090 361,905 8.1%59766855968737062501002003004005006007008002014 2015 2016 2017 2018(QTR 2)2018BudgetSingle Family Residence Building Permits By Fiscal Year FY2019 PRELIMINARY GENERAL FUND SUMMARY10Note 1: Sales tax revenue projections for FY2019 could change significantly based upon additional sales tax data received from ADOR. Additionally, by development agreement, 45% of monies collected from the mall will be reimbursed back to the developer for public infrastructure.Note 2: Intergovernmental (State shared) revenue projection may change. Final budget will be based upon ADOR projections and US Census population estimates (March 2018).Revenues FY2018 Budget FY2019 Prelim $ Change % ChangeSales tax revenues¹ $ 25,817,378 $ 26,284,560 $ 467,182 1.8%Shared revenue² 11,479,759 11,824,152 344,393 3.0%Licenses, fees & permits 4,454,185 4,816,090 361,905 8.1%Other 2,250,669 2,150,163 (100,506) -4.5%Total Revenue 44,001,991 45,074,965 1,072,974 2.4%Summary FY2018 Budget FY2019 Prelim $ Change % ChangeOngoing 41,163,710 42,501,910 1,338,200 3.3%One-time 2,838,281 2,573,055 (265,226) -9.3%Total Revenue $ 44,001,991 $ 45,074,965 $ 1,072,974 2.4% GENERAL FUND –PRELIMINARY FISCAL IMPACTSPreliminary new ongoing revenue $1,338,200 Preliminary impactsHealth insurance costs (7%) 252,500 Worker's comp 44,000 Increased PSPRS retirement contributions¹ 142,000Total impacts before other costs 438,500Preliminarily revenue available for other costs $899,70011Note 1 - PSPRS adjustment based on actuarial report for 2017 FUND BALANCES – GENERAL FUND• FY2018 Estimated Fund Balance $21.9M• One-time resources which provide for:LiquidityCapacityFlexibility1223.7 24.6 22.8 25.0 21.9 $0$5$10$15$20$25$302013-14 2014-15 2015-16 2016-17 2017-18EstimatedMillionsGeneral Fund Reserve BalancesFund Balance25% Coverage PREPARING FOR FY2019 COUNCIL DISCUSSIONJamsheed Mehta13 COUNCIL DISCUSSION ITEMSCommunity needsCouncil strategic initiativesKey opportunitiesOther areas or items to consider14 YOUR TOWN, YOUR BUDGET15 FY 2019 KEY DATES16Date Stage in Process Task DescriptionJanuary 9, 2018PlanningCouncil Study Session – Council goals and objectives February 2, 2018PreparingBase department budgets and preliminary carryover request all due to FinanceFebruary 7, 2018PreparingProposed changes to the Comprehensive Fee ScheduleMarch 7 – 15, 2018PreparingDepartmental BudgetsApril 10, 2018ReviewingManager’s Recommended Operating BudgetMay 15, 2018Approving Council Adoption of Tentative BudgetJune 19, 2018ApprovingCouncil Adoption of Final Budget 17DISCUSSION