HomeMy WebLinkAboutCouncil Presentation 04/25/2018 - 2018 Manager Recommended Operating Budgets FinalFiscal Year 2017-2018 Recommended Operating BudgetsCouncil Study Session April 25, 20171
OVERVIEWAccomplishmentsFY2018 Revenue OutlookSelected Operating Budget SummariesNew Investment SummaryNext Steps2
CORE VALUES3
ACCOMPLISHMENTSCelebrating our 40th yearApproved a new Town logoRecognized as a top 10 digital cityMarana continues to lead the region in home buildingArizona Pavilions in Marana added approximately 91,000 ft² in retailAll-America City Finalist, 2nd year in a rowTangerine Road corridor Phase ITangerine Sky Park design and construction in early FY 2018Completed Public Safety facility designInaugural 28 mile segment of El Tour de Tucson4
ACCOMPLISHMENTSDeveloped Ina business program including a Project Ina appAssisted in Coalition Against Retail Theft (CART) initiatives and strategies. Land development code update (complete in FY 2018)Completed 2016 update of Marana’s Parks Master Plan with help from UofAUpdated Airport Master Plan and Business PlanCompleted the Economic Development Strategic plan5
RESIDENTIAL GROWTH66887472017 Calendar Year-to-date SFRs: 202
7FY 2017-2018 Revenue Outlook
ARIZONA ECONOMY83.1%8.6%3.5%3.4%4.3%3.5%4.4%0%1%2%3%4%5%6%7%8%9%10%2014 2015 2016 2017 2018 2019 2020Arizona Revenue Growth*Current Year Estimate* Data provided by JLBC Revenue Update 4/12/17Year Over Year Revenue GrowthActuals '14-'16 Forecast '17-'20
PROJECTED STATE BUDGETS AND INDICATORS9•Projected Baseline State Budget Structural Balances– FY2017 - $1.6M Surplus– FY2018 - $76.0M Surplus– FY2019 - $156.8M Surplus– FY2020 - $240.2M Surplus•U.S. Consumer Confidence 8.2% (YoY March 2017)•U.S. Consumer Price Index (CPI) 2.7% (YoY February 2017)•Unemployment– Rate (laborstats.az.gov for March 2017)• Arizona 4.6 % (-0.7% YoY )• Tucson MSA 4.4% (-0.3% YoY )• Marana 3.5% (-0.4% YoY )•Single Family Housing Prices– Tucson MSA median= $193,000 (9.0% YoY )0%2%4%6%8%10%15,00016,00017,00018,00019,00020,0002010 2011 2012 2013 2014 2015Unemployment RateLabor ForceMarana Employment DataLabor ForceUnemployment Rate
SALES TAXES•Change from FY2017 budget –6.9% or $1.7M1– Retail -8.7% or $1.1M– Restaurants -6.7% or $0.2M– Contracting-18.3% or $0.3M– Hotels-8.4% or $0.1M• Incorporates projected revenue from approximately 91,000 ft² in retail in Arizona Pavilions in Marana (full year) and TopGolf (half year)1020.3 21.8 24.2 24.6 25.8 $- $10 $20 $302013-14 2014-152015-16 2016-17Estimated2017-18BudgetedMillionsNote 1 – Sales tax budget includes projected additional, one-time contracting tax revenue from major projects.
STATE SHAREDREVENUES•Change from FY2017 budget –2.9% or $315K– Shared sales tax -0.9% or $35K– Urban revenue -2.5% or $128K– Auto lieu -8.6% or $152K•Shared Revenue Estimates and Census– HB2483 - Allows for an annual update of population by using the U.S. CensusBureau’s estimate.– Shared revenues presented here may change once final Census numbers areavailable by mid-May.118.3 8.8 9.0 10.7 11.0 $- $5 $10 $152013-14 2014-152015-16 2016-17Estimated2017-18BudgetedMillions
LICENSES, FEES AND PERMITS•Change from FY2017 budget –10.2% or $0.4M •Single family: – FY2017 – 550 budgeted– FY2018 – 625 budgeted •FY2018 –Increases largely due to increased single family permits123.8 4.6 4.3 4.1 4.5 $- $1 $2 $3 $4 $52013-14 2014-152015-16 2016-17Estimated2017-18BudgetedMillions59766855948655062501002003004005006007008002014 2015 2016 2017(QTR 3)2017Budget2018BudgetSingle Family Residence Building Permits By Fiscal Year
GENERAL FUNDOPERATING BUDGET SUMMARY•REVENUE– SALES TAX (6.9% or $1.7M) – New retail at Arizona Pavilions and TopGolf. Also one-time contracting increase due to major projects.– INTERGOVERNMENTAL (2.1% or $230K) – May change with final Census estimate.– LICENSES, PERMITS AND FEES (10.2% or $0.4M) – Increase in budgeted single family permits.•EXPENDITURES– PERSONNEL AND BENEFITS (7.0% or $1.9M) – Strategic positions, other benefit costs and movement of second ½ of HURF salaries back to General Fund.– TRANSFERS OUT (9.7% or $0.5M) – Primarily associated with the up to $3.0M in General Fund transfer related to drainage and other site improvements related to the new police headquarters.13Category FY2017 BudgetFY2018 Recommended¹ $ Change % ChangeRevenue $ 41,218,185 $ 43,558,148 $ 2,339,963 5.7%Expenditures & Net Transfers 43,702,329 46,132,138 2,429,809 5.6%Change in fund balance $ (2,484,144) $ (2,573,990) $ (89,846) 3.6%Note 1 – Recommended budget includes Marana Animal Services
CAPITAL BUDGET IMPACT ON RESERVES14Under ConsiderationProject Name FY2018 FY2019Splash Pad, Crossroads at Silverbell Park 335,000 500,000 Honea Heights Pocket Park 235,000 -Ora Mae Pool Renovation - 220,000 Master Drainage Study, NW Marana 230,000 -Marana Main Street Electrical Upgrades- 240,000Total$800,000 $960,000 Project Carry Over, 3,365,000 , 15%Current Year Projects, 800,000 , 4%Future Year Projects, 960,000 , 4%Due from Airport, 2,283,216 , 10%Target Reserve, 9,851,514 , 43%Unassigned, $5,583,053 , 24%General Fund BalanceFund Balance @6/30/16 $ 22,842,783 Less:Project Carry Over 3,365,000 Current Year Projects 800,000 Future Year Projects 960,000 Due from Airport 2,283,216 Target Reserve 9,851,514 Unassigned $ 5,583,053 Possible Reserve Impact
OPERATING BUDGET IMPACT ON RESERVES•Established reserve policy target– 25% of expenditures•Reserves are a one-time resource•Healthy reserves are required to:– Provide for overall cash needs (liquidity)– Provide capacity for major, unanticipated events– Maintain overall credit rating1523.7 24.6 22.8 22.6 20.0 $0$5$10$15$20$25$302013-14 2014-15 2015-16 2016-17Estimated2017-18BudgetedMillionsGeneral Fund Reserve BalancesFund Balance25% Coverage
BED TAX FUND OPERATING BUDGET SUMMARY•REVENUE– SALES TAX (5.5% or $52K) – Trend on based upon increased occupancy and/or average rates.•EXPENDITURES– PERSONNEL AND BENEFITS (28.1% or $27K) – Partial allocation of new Customer Service Clerk position which will assist with Tourism and the Discover Marana website.16Category FY2017 BudgetFY2018 Recommended $ Change % ChangeRevenue $ 937,884 $ 989,558 $ 51,674 5.5%Expenditures & Net Transfers 940,649 989,558 48,909 5.2%Change in fund balance $ (2,765) $ - $ 2,765 -100.0%
HIGHWAY USER REVENUE FUND OPERATING BUDGET SUMMARY•REVENUE– Intergovernmental Revenues (3.1% or $97K) – Based on Census preliminary estimate. May change once final in mid-May.•EXPENDITURES– PERSONNEL AND BENEFITS (100.0% or $355K) – Moved remaining ½ of salaries back to the General Fund.– CAPITAL OUTLAY(66.9% or $562K) – Primarily due to the replacement of a semi-tractor trailer truck used to move large equipment as well as the purchase of a asphalt patch truck.17Category FY2017 BudgetFY2018 Recommended $ Change % ChangeRevenue $ 3,100,763 $ 3,197,363 $ 96,600 3.1%Expenditures & Net Transfers 3,867,177 3,197,363 (669,814) -17.3%Change in fund balance $ (766,414) $ - $ 766,414 -100.0%
WATER FUND OPERATING BUDGET SUMMARY•REVENUE– CHARGES FOR SERVICES (15.0% or $648K) – Combination of new customer account growth as well as a full year of the most recent rates and fee changes.•EXPENDITURES – CONTRACTES SERVICES (35.7% or $362K) – Primarily due to the continuation of a water tank and reservoir preventative program. This area also includes a major, one-time electrical upgrade at an existing well site– OPERATING SUPPLIES AND EQUIPMENT (23.8% or $286K) – Due to increased water costs as well as an increase in the administrative charge the utility pays the General Fund for central services18Category FY2017 BudgetFY2018 Recommended $ Change % ChangeRevenue $ 4,341,258 $ 5,076,829 $ 735,571 16.9%Expenses & Net Transfers 4,341,258 5,076,829 735,571 16.9%Change in fund balance $ - $ - $ - 0.0%
WASTEWATER FUND OPERATING BUDGET SUMMARY•REVENUE– CHARGES FOR SERVICES (12.7% or $147K) – Combination of new customer account growth within existing service areas as well as projected new customers in Saguaro Bloom.•EXPENDITURES– OPERATING SUPPLIES AND EQUIPMENT (40.7% or $53K) – Primarily due to anticipated increases in electrical usage during the year relating to, in part, the commissioning of the plant upgrade.– DEBT SERVICE – The budgeted debt service will include the 2013 Series which purchased the plant, reimbursed the General Fund and required initial improvements. It will also include the 2017 Series debt service which will pay for significant portions of the WRF expansion to 1.5MGD.19Category FY2017 BudgetFY2018 Recommended $ Change % ChangeRevenue $ 1,159,696 $ 1,306,764 $ 147,068 12.7%Expenses & Net Transfers 1,159,696 1,306,764 147,068 12.7%Change in fund balance $ - $ - $ - 0.0%
AIRPORT FUND OPERATING BUDGET SUMMARY•REVENUE– ALL REVENUE(3.5% or $9K) – Overall minor increases in expected lease and miscellaneous revenue.•EXPENDITURES– CONTRACTES SERVICES (16.2% or $21K) – Primarily due to anticipated airport maintenance projects including security gate motor replacements, generators and a required fire pump rebuild.– TRANSFERS IN (6.9% or $15K) – Represents what may likely be an ongoing, operating subsidy from the General Fund. In fact, over the years, these operating deficiencies have accumulated to balance of approximately $2.3M which the airport owes the General Fund.20Category FY2017 BudgetFY2018 Recommended $ Change % ChangeRevenue $ 258,000 $ 267,000 $ 9,000 3.5%Expenses & Net Transfers 258,000 267,000 9,000 3.5%Change in fund balance $ - $ - $ - 0.0%
21FY 2017-2018 INVESTMENT PLAN
INVESTMENT PLAN22Combination of tools to retain and reward Marana’s talentKey positions to complement strategic objectives (phased/Strategic Plan)Facilities, tools, and vehicles used to complete work assignments
FY2018 NEW EMPLOYEE INVESTMENTSCompensation adjustments- $792,075 ($701,110 GF)─Employee performance pay adjustments─3.0% compensation adjustment based on performance─Subject to eligibility criteriaOther pay and benefits- $809,979 ($783,370 GF) ─Other pay and benefits (health, retirement, disability insurance, etc.)─Employee Retirement - $451,680 (GF)─Health Insurance - $103,545 ($82,840 GF)─Worker’s Compensation - $184,688 ($168,145 GF)23
FY2018 NEW EMPLOYEE INVESTMENTSTraining and development─$21,026 ($19,326 GF) employee training Total investment = $1,623,080($1,503,806 GF)24
FY2018 RESOURCES AND TOOLS INVESTMENTSVehicle Replacements─$1,235,100 ($1,003,300 GF)Technology─Council chambers and Conference Center enhancements $20,000 (GF)─Server and network upgrades $20,000 (GF)─Police video support and storage $80,000 (GF)Facilities ─Building maintenance projects $334,920 (GF)─Parks maintenance projects $259,500 (GF)Supplies and Equipment─Pool equipment, tables and shade $17,000 (GF)─Fleet lift, compressor, tire machine, pressure washer $41,000 (GF)Total investment = $1,985,195 ($1,661,949 GF)25
FY2018 STRATEGIC POSITION INVESTMENT26Position FTE DepartmentFunding SourceCustomer Service Clerk 1.00 Communications & MarketingGeneral Fund/ Bed Tax FundDocument Clerk 1.00 Engineering General FundPolice Officer 2.00 Police General FundSenior Maintenance Associate 1.00 Public Works General FundFleet Tech I 1.00 Public Works General FundWater Operator III 1.00 Water Water FundWastewater Reclamation Operator II 1.00 Wastewater Water FundTotal 8.00Total investment = $844,964 ($567,140 GF)
NEXT STEPS27Date AreaMay 16, 2017 Consider the approval of the tentative budgetJune 20, 2017 Consider the adoption of the final budget
28DISCUSSION AND DIRECTIONFind more at:MaranaAZ.govfacebook.com/townofmaranaaztwitter.com/townofmaranainstagram.com/townofmarana