HomeMy WebLinkAboutCouncil Handout 04/20/2017-2018 Recommended Final Budget Transmittal
April
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Page 2 of 22
Operating revenues in the Bed Tax Fund, Highway User Revenue Fund, Water,
Wastewater and Airport Enterprise Funds are expected to increase by 5.5%, 3.1%, 16.9%,
12.7% and 3.5%, respectively. Revenue increases are largely due to a combination of
account growth (new customers) and adjustments to fees and rates previously approved
by Council, where applicable.
The proposed fiscal year 2017-2018 budget is structurally balanced and meets Council’s
policy direction as it relates to providing exemplary service in core community services
and programs.
Accomplishments and Goals
This year, the Town of Marana invested in strategic advancements for the community,
focusing on key areas of need as identified in Strategic Plan III. These diverse
achievements reflect efforts on the part of Town Council, staff, and the community to
foster prosperity throughout Marana.
Commerce
The Town has worked to secure important economic assets, and the results are showing.
The Arizona Pavilions in Marana added approximately 91,000 square feet of new retail
space this fiscal year with the opening of Petco, Ross, TJ Maxx, Home Goods and Dollar
Tree. Additionally, a new 44,000 square foot Topgolf entertainment center is currently
under construction and is anticipated to open in December 2017.
Last year’s extension of the sewer system south to Saguaro Bloom has opened a new
corridor of potential growth. We are continuing to develop Town infrastructure to
facilitate the growth of our community’s economy. With increased investment in needed
areas, our commercial environment is primed for development.
The Town’s Land Development Code (LDC) plays a key role in determining what types
of development activities occur and where they locate within our community. An update
to the LDC kicked off in November 2016 and will be completed next fiscal year. The
LDC update goals include looking for process enhancements and creating zone districts
that respond to dynamic housing and commercial markets.
In March, the Department of Economic Development and Tourism completed an
Economic Development Strategic Plan. This plan will act as a 3-5 year plan for
Economic Development in the Town of Marana, of which the goal is to provide
actionable items to be carried out by the Department of Economic Development and
Tourism that will lead to industry diversification within the Town to support long term
and sustainable economic health.
Page 3 of 22
The airport recently completed an update to the Master Plan and created the airport’s first
Strategic Business Plan using grant funding from the Arizona Department of
Transportation. An airport Master Plan describes and depicts the overall concept for the
long-term development of an airport. The goal of the plan is to provide direction for
future airport development that will satisfy aviation demand in a financially feasible
manner and meet the Town’s needs with respect to the airport. This airport Master Plan
updates and replaces the September 2007 airport Master Plan.
Community
Marana continues to lead the region in home building. A number of factors go into home
buyer purchasing decisions. Those include access to employment centers, quality of
school systems, shopping and entertainment centers, access to community services, etc.
The public’s safety is a key component of people’s sense of community. Design
Marana’s new police headquarters is substantially complete and construction is
anticipated to begin close to the end of the current fiscal year. With an estimated 18
month construction schedule, the facility will open fall/winter of 2018.
Looking ahead, the Town’s Pavement Preservation program will continue to successfully
treat roads throughout our community, extending their life and lowering long-term costs
to the taxpayer. In fact, the Town formally adopted amendments to the subdivision street
standards, which among other things, will work to ensure that infrastructure is
constructed to live their normal useful lives.
Capital improvement projects like the Tangerine Corridor project and the Ina I-10
Interchange project will eventually provide for additional capacity and safety within our
community. The Town developed an Ina business program and Project Ina app in an
effort to offset some of the construction impacts. This effort included new signage,
advertising within the Project Ina app and a business walk to get a greater sense of
business needs during construction.
Lastly, we completed the design of the 1.5MGD Marana Water Reclamation Facility
(WRF). Construction is currently under way, with the commissioning process for the
WRF starting sometime late spring or early summer of calendar year 2018.
Innovation
We continue to work at identifying was to integrate new technologies into processes to
improve effectiveness and efficiency. The Project Ina app mentioned previously, which
provides traffic alerts and deals from local businesses, is yet another example of where
we deployed new technology in an effort to assist the business community.
Page 4 of 22
The Town also actively participated in and assisted with the regional roll-out of Coalition
Against Retail Theft (CART) initiatives and strategies. The CART program provides
education and resources to the business community in an effort to curb shoplifting.
The Town also successfully rolled out an electronic plan review solution which allows
for the efficient distribution, review, commenting and changing of plans and other
documents. Over time, this will dramatically reduce time lost with the movement of
paper documents.
Heritage
Showcasing our Marana heritage reached a new height this year with a special event
dedicated to the pride we have in Our Town. October’s Cotton Festival put our history
and culture on display, honoring our past and celebrating our common future. With over
3,000 attendees, the event was a clear success – evidence of the community’s
commitment to heritage.
For several years, we have prioritized revitalizing Marana Main Street, and those efforts
will continue as we work to invest in this historic part of Marana. The architectural
standards of Marana Main Street, which include adobe brick and red Spanish tile, ensure
a consistent look and feel in this growing district. Eventually, we envision Marana Main
Street as a hub of retail, dining, arts, and residential activity, a hub that will attract
visitors and residents of all ages and backgrounds.
Recreation
Living in Marana has never been more fun. Last year we hosted four Signature Events, as
well as various movies and concerts in the park, 5Ks, and more. These events give
Marana residents the chance to get out and have fun, ensuring that our community enjoys
a high quality of life.
We successfully hosted our inaugural segment of El Tour de Tucson. This world-class
cycling event will showcase Marana’s stunning landscapes and well-maintained
roadways. Our partnership with Perimeter Cycling, the parent organization of El Tour,
means that Marana residents will be able to enjoy a family-oriented bike ride that is part
of this larger regional event.
Parks completed an update of Marana’s Parks, Recreation, Trails and Open Space Master
Plan update through Partner with University of Arizona College of Architecture, Planning
and Landscape Architecture (CAPLA). This document will frame future parks and
related projects in the future.
Page 5 of 22
Design for the Tangerine Sky Community Park is complete and construction is expected
to be completed early into the new fiscal year. The Santa Cruz Shared-Use Path
extension from El Rio Park to Avra Valley Road will also be completed this fiscal year.
In Summary
Providing Marana residents and businesses with high quality, dedicated service does not
come free. By investing wisely, though, we can simultaneously satisfy the demands of
residents today while ensuring the long-term financial stability of Marana for many years
to come. Marana is an exceptional place to live and work, and this budget reflects our
commitment to meeting the high expectations of our community.
Investment Planning
As the economy and region continue to improve, it is critical to maintain a framework to
guide future decisions. The investment plan will provide a basis to allocate resources to
those areas that are critical in providing and maintaining core services.
Plan Investments
The following tables describe the Town’s investments into the priority areas for the total
town-wide investment and the portions incorporated within the General Fund (GF).
These investments represent the additional costs which are included within the
recommended budget summaries presented later.
I. Employee Compensation and Benefits Investment = $1,623,080 ($1,503,806
GF)
a. Performance pay adjustments - $792,075 ($701,110 General Fund (GF))
Page 6 of 22
Up to 3.0% team performance pay adjustment added to base pay or
lump sum for those at the top of their pay range
Eligibility and other conditions apply
b. Other pay and benefits $809,979 ($783,370 GF) on other pay and benefits
(health, retirement, disability insurance, etc.)
Employee Retirement - $451,680 (GF)
Health Insurance - $103,575 ($82,840 GF)
Worker’s Compensation - $184,688 ($168,145 GF)
Training and development $21,026 ($11,425 GF)
II. Resources and Tools Investment - $1,887,640 ($1,775,720 GF)
a. Vehicle Replacements $1,235,100 ($1,003,300 GF)
b. Technology
Council chambers podium enhancements $20,000 (GF)
Server and network upgrades $20,000 (GF)
Police property and evidence software $80,000 (GF)
c. Facilities
Maintenance projects $334,920 (GF)
Parks maintenance projects $259,500 (GF)
d. Supplies and Equipment
Pool equipment, tables and shade $17,000 (GF)
Fleet lift, compressor, tire machine, pressure washer and other
items $41,000 (GF)
Page 7 of 22
III. Strategic Positions
Marana continues to be a regional leader in development growth. The addition of key
positions is critical in maintaining service levels. For example, the addition of new
officers will assist in maintaining service call response times in key portions of our town.
A new park, the first in the north-east portion of our community, is expected to open in
the spring of 2017 and additional maintenance workers and laborers will be needed to
take care of the grounds.
The following table lists the new full time equivalent (FTE) positon added:
Position FTE Department Funding Source
Customer Service Clerk 1.00 Communications &
Marketing
General Fund/
Bed Tax Fund
Document Clerk 1.00 Engineering General Fund
Police Officer 2.00 Police General Fund
Senior Maintenance Associate 1.00 Public Works General Fund
Fleet Tech I 1.00 Public Works General Fund
Water Operator III 1.00 Water Water Fund
Wastewater Reclamation Operator II 1.00 Wastewater Water Fund
Total FTE Changes 8.00
Page 8 of 22
Governmental Funds Budget Summary
General Fund
The following General Fund summary is structurally balanced with ongoing revenues
supporting ongoing services and programs. One-time resources support one-time
projects and programs. Of the amounts included below, $40.3 million represents ongoing
costs and $5.8 million represents one-time costs.
Summary of General Fund
Recommended Budget
Fiscal Year 2018²
Note 2: Both the FY2017 and FY2018 budgets shown here exclude contingency which may only be utilized when
approved by Council. The FY2018 budget will include a contingency appropriation.
Revenues FY2017
FY2018
Recommended $ Change % Change
Sales tax revenues 24,156,385$ 25,817,378$ 1,660,993 6.9%
Intergovernmental revenues 10,805,072 11,035,916 230,844 2.1%
Licenses, fees & permits 4,040,385 4,454,185 413,800 10.2%
Charges for services 489,160 534,650 45,490 9.3%
Fines and forfeiture 640,000 625,000 (15,000) -2.3%
Grants and contributions 231,264 224,300 (6,964) -3.0%
Investment income 200,000 200,000 - 0.0%
Miscellaneous revenues 655,919 666,719 10,800 1.6%
Total Revenue 41,218,185 43,558,148 2,339,963 5.7%
Expenditures
Personnel & benefits 26,675,415 28,536,333 1,860,918 7.0%
Contracted services 5,756,924 6,157,798 400,874 7.0%
Operating supplies & equip 4,471,649 4,202,797 (268,852) -6.0%
Capital outlay 1,230,392 1,127,340 (103,052) -8.4%
Total Expenditures 38,134,380$ 40,024,268$ 1,889,888 4.7%
Over/(Under) 3,083,805$ 3,533,880$ 450,075 14.6%
Other Sources and (Uses)
Transfers out (5,567,949) (6,107,870) (539,921) 9.7%
Total Sources and (Uses) (5,567,949) (6,107,870) (539,921) 9.7%
Change in fund balance (2,484,144) (2,573,990) (89,846) 3.6%
Page 9 of 22
The following describes major changes between fiscal years:
Sales tax revenues – Anticipated tax revenue growth of 6.9% includes a full year
projection for activity at the Premium Outlets in Marana. Tax estimates anticipate
the addition of approximately 91,000 square feet of retail space. Additionally, the
contracting portion of tax revenues includes an estimated infusion of additional
one-item taxes associated with major construction projects within Marana.
Intergovernmental revenues – The shared revenue estimate is based on HB2483 –
Municipal population estimates bill which passed in the 2016 legislative session.
This bill utilizes the annual Federal Census population estimate as the basis for
allocating state shared revenues to the various cities and towns. The
intergovernmental revenue estimate shown here is based upon a preliminary
Federal Census population estimate provided to the League of Arizona Cities and
Towns. The final Federal population estimate and shared revenue numbers will
be provided to cities and towns by mid-May. Therefore, the revenue estimate
presented in the summary above could change significantly if the Federal Census
estimates used for the final shared revenue allocation are materially different
than the population estimates used in the above estimate.
Charges for services revenue – The majority of this revenue variance is
attributable to the estimated increase in single family residential permits (SFR’s)
budgeted from 550 to 625 in fiscal years 2017 and 2018, respectively.
Personnel and benefits – The changes in personnel costs include the addition of
the new strategic positions listed earlier as well as the costs for all other
compensation and benefit changes. Additionally, the change for fiscal year 2017-
2018 also includes the second half of personnel and benefit costs of
approximately $355K which were shifted back to the General Fund from HURF
in an effort to increase the availability of road maintenance dollars.
Transfers out – In addition to required debt service transfers, the General Fund
budget also anticipates contributions of up to $3M for drainage and other site
improvements related to the new police headquarters.
The charts on the following page present the overall General Fund sources and uses of
projected resources.
Sales T
Revenu
$20.0 , 6
F
Personn
benefits ,
61%
Tax
ues,
64%
Y2017-2
nel &
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%
FY2017
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2018 Ge
7-2018 G
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Miscellan
revenues,
2%
eneral F
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$6.1
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Revenue
22%
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neous
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, 13%
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Agency
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%
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In
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ources
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%
rges for
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rana
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Page 13 of 22
Bed Tax Fund
The Bed Tax Fund accounts for the discriminatory portion of the transient lodging (bed tax) rate
which exceeds the Town’s regular tax rate on other businesses. This portion must be used
exclusively for the promotion of tourism as required by A.R.S. § 9-500.06(C).
Summary of Bed Tax Fund
Recommended Budget
Fiscal Year 2018
The following describes major changes between fiscal years:
Sales tax revenues – The anticipated bed tax revenue increase of 5.5% is
consistent with the continued increased trend in average occupancy and overage
rates. Revenues will continue to advance the Town’s tourism initiatives including
the new Discover Marana website.
Personnel and benefits – The changes in personnel costs include the addition of
approximately 0.5 FTE to assist the Tourism and Discover Marana web and other
outreach efforts.
Revenues FY2017 Budget
FY2018
Recommended $ Change % Change
Sales tax revenues 937,884$ 989,558$ 51,674 5.5%
Total Revenue 937,884 989,558 51,674 5.5%
Expenditures
Personnel & benefits 94,327 120,835 26,508 28.1%
Contracted services 739,322 761,723 22,401 3.0%
Operating supplies & equip 107,000 107,000 - 0.0%
Capital outlay 0 0 - 0.0%
Total Expenditures 940,649$ 989,558$ 48,909 4.9%
Over/(Under) (2,765)$ -$ 2,765 -100.0%
Change in fund balance (2,765) - 2,765 -100.0%
Page 14 of 22
Highway User Revenue Fund
The Highway User Revenue Fund (HURF) accounts for our portion of state shared taxes
on the sale of gasoline, sale of diesel fuels and other transportation related fees. A state
constitutional restriction on the use of the highway user revenues requires that these
funds be used solely for street and highway purposes within the public right-of-way. This
shared gas tax is the primary source of revenue used for the maintenance of our
transportation system.
Summary of Highway User Revenue Fund
Recommended Budget
Fiscal Year 2018
The following describes major changes between fiscal years:
Intergovernmental revenues –The HURF shared revenue estimate
(intergovernmental revenues) is based on HB2483 – Municipal population
estimates bill which passed in the 2016 legislative session. This bill utilizes the
annual Federal Census population estimate as the basis for allocating state shared
revenues to the various cities and towns. The intergovernmental revenue estimate
shown here is based upon a preliminary Federal Census population estimate
provided to the League of Arizona Cities and Towns. The final Federal
Revenues FY2017 Budget
FY2018
Recommended $ Change % Change
Intergovernmental revenues 3,093,263$ 3,189,863$ 96,600 3.1%
Investment income 7,500 7,500 - 0.0%
Total Revenue 3,100,763 3,197,363 96,600 3.1%
Expenditures
Personnel & benefits 355,308 - (355,308) -100.0%
Contracted services 2,479,582 2,706,628 227,046 9.2%
Operating supplies & equip 192,430 212,635 20,205 10.5%
Capital outlay 839,857 278,100 (561,757) -66.9%
Total Expenditures 3,867,177$ 3,197,363$ (669,814) -20.9%
Over/(Under) (766,414)$ -$ 766,414 -100.0%
Other Sources and (Uses)
Transfers out - - - 0.0%
Total Sources and (Uses) - - - 0.0%
Change in fund balance (766,414) - 766,414 -100.0%
Page 15 of 22
population estimate and shared revenue numbers will be provided to cities and
towns by mid-May. Therefore, the revenue estimate presented in the summary
above could change significantly if the Federal Census estimates used for the
final shared revenue allocation are materially different than the population
estimates used in the above estimate.
Personnel and benefits – The variance of 100% or approximately $355K in costs
reflects the second half of salaries which were shifted back to the General Fund in
an effort to increase the availability of maintenance dollars.
Capital outlay – The majority of the change is due to the replacement purchase of
a semi-tractor trailer truck used to move large equipment like the road grader and
front loader around portions of our community which in fiscal year 2016-2017.
Page 16 of 22
Enterprise Funds
Water Operating Fund
The primary revenues for the Water Operating Fund are for charges for water delivered
and sold to customers outside of the organization. As such, it is set up and operates as a
stand-alone enterprise fund.
Summary of Water Operating Fund
Recommended Budget
Fiscal Year 2018
The following describes major changes between fiscal years:
Charges for services – Water revenues are anticipated to increase by
approximately 15.0% in fiscal year 2017-2018. This is primarily due to a
combination of account growth (new customers) and water rate and fee increases
Revenues FY2017 Budget
FY2018
Recommended $ Change % Change
Intergovernmental -$ 60,000$ 60,000 0.0%
Licenses, fees and permits 25,000 25,000 - 0.0%
Charges for services 4,311,258 4,958,829 647,571 15.0%
Investment income 5,000 5,000 - 0.0%
Miscellaneous - 28,000 28,000 0.0%
Total Revenue 4,341,258 5,076,829 735,571 16.9%
Expenditures
Personnel & benefits 1,821,711 1,917,654 95,943 5.3%
Contracted services 1,015,213 1,377,152 361,939 35.7%
Operating supplies & equip 1,201,181 1,486,694 285,513 23.8%
Capital outlay 99,000 144,000 45,000 45.5%
Debt service 426,654 373,830 (52,824) -12.4%
Total Expenditures 4,563,759$ 5,299,330$ 735,571 13.9%
Over/(Under) (222,501)$ (222,501)$ - 0.0%
Other Sources and (Uses)
Transfers in 222,501 222,501 - 0.0%
Total Sources and (Uses) 222,501 222,501 - 0.0%
Change in fund balance - - - 0.0%
Page 17 of 22
previously approved by Council which have or will be implemented in the new
fiscal year.
Contracted services – The major change between fiscal years is primarily due to
the addition of a water tank and reservoir preventative maintenance program.
This is new program is intended to take a proactive stance in the inspection and
maintenance of the tanks and reservoirs. It also includes a major electrical update
at an existing well site.
Operating supplies and equipment – The majority of the budget change between
fiscal years is attributable to increased water purchase costs and an increase in the
administrative charge that the water utility pays the General Fund for central
services (human resources, legal, finance, etc.).
Page 18 of 22
Wastewater Operating
The primary revenues for the Wastewater Operating Fund are for customer charges to
treat sewer flows to the north Marana Water Reclamation Facility. The primary
customers are outside of the organization. As such, it is set up and operates as a stand-
alone enterprise fund.
Summary of Wastewater Operating Fund
Recommended Budget
Fiscal Year 2018
The following describes major changes between fiscal years:
Charges for services – Wastewater revenues are anticipated to increase by
approximately 12.7% in fiscal year 2017-2018. This is primarily due to a
combination of account growth (new customers) within existing areas and
projected new customers in Saguaro Bloom once both the gravity and force main
sewer lines are connected to the development.
Revenues
FY2017
Budget
FY2018
Recommended $ Change % Change
Licenses, fees and permits 3,000$ 3,000$ - 0.0%
Charges for services 1,156,696 1,303,764 147,068 12.7%
Total Revenue 1,159,696 1,306,764 147,068 12.7%
Expenditures
Personnel & benefits 369,422 381,182 11,760 3.2%
Contracted services 659,864 685,532 25,668 3.9%
Operating supplies & equip 130,410 183,550 53,140 40.7%
Capital outlay - 56,500 56,500 0.0%
Debt service 1,807,725 1,809,525 1,800 0.0%
Total Expenditures 2,967,421$ 3,116,289$ 148,868 4.8%
Over/(Under) (1,807,725)$ (1,809,525)$ (1,800) 0.0%
Other Sources and (Uses)
Transfers in 1,807,725 1,809,525 1,800 0.0%
Transfers out - - - 0.0%
Total Sources and (Uses) 1,807,725 1,809,525 1,800 0.0%
Change in fund balance - - - 0.0%
Page 19 of 22
Operating supplies and equipment – The major change between fiscal years is
primarily due to the anticipated increases in electrical usage during the fiscal year.
Debt service – The fiscal year budget included projected debt service on the
portions of the 2013 Series bonds issued to acquire the plant, complete required
initial improvements and reimburse the General Fund. The debt repayment has
been structured to be paid from current and future impact fees, as included within
the respective plans. The debt service for the 2017 Series bonds attributable to the
WRF expansion to 1.5MGD will be as soon as the final debt services schedules
become available.
Page 20 of 22
Airport Operating Fund
The primary revenues for the Airport Operating Fund are for customer charges for
facility or ground lease revenues, open tie-down permits and fueling fees for planes at the
airport. The primary services are to customers outside of the organization. As such, it is
set up and operates as a stand-alone enterprise fund.
Summary of Airport Operating Fund
Recommended Budget
Fiscal Year 2018
The following describes major changes between fiscal years:
Contracted services – The major change between fiscal years is primarily due to
the anticipated need for airport facility maintenance projects including security
gate motor replacements, generators and a required fire pump rebuild.
U – The budgeted transfer for fiscal year 2017-2018 represents what may likely
be an ongoing, operating subsidy from the General Fund. In fact, over the years,
Revenues FY2017 Budget
FY2018
Recommended $ Change % Change
Licenses, fees and permits 244,000$ 249,000$ 5,000 2.0%
Miscellaneous 14,000 18,000 4,000 28.6%
Total Revenue 258,000 267,000 9,000 3.5%
Expenditures
Personnel & benefits 252,932 278,796 25,864 10.2%
Contracted services 129,401 150,394 20,993 16.2%
Operating supplies & equip 73,200 76,400 3,200 4.4%
Capital outlay 25,568 - (25,568) -100.0%
Total Expenditures 481,101$ 505,590$ 24,489 4.8%
Over/(Under) (223,101)$ (238,590)$ (15,489) 6.9%
Other Sources and (Uses)
Transfers in 223,101 238,590 15,489 6.9%
Transfers out - - - 0.0%
Total Sources and (Uses) 223,101 238,590 15,489 6.9%
Change in fund balance - - - 0.0%
Page 21 of 22
these operating deficiencies have accumulated to balance of approximately $2.3M
which the airport owes the General Fund. In The airport does not generate
revenues adequate to support the needs of an airport with significantly aged
infrastructure. Additional airport planning is underway in an effort to improve its
ability to generate adequate revenues.
Summary of Positions
The largest portion of the Town’s operating budget reflects its investment in personnel
and related benefits. Our employees provide the core services that the citizens require
and those costs comprise the largest operating cost within the General Fund at
approximately 61% of the operating budget. The strategic plan along with the economic
recovery plan will continue to guide the allocation of resources in future years. This
fiscal year 2018 budget recommends the addition of 8.0 full time equivalent (FTE)
positions. The following tables present an overall, multi-year summary of FTE and a
detailed listing of recommended changes for fiscal year 2018.
Multi-year FTE Position Change Summary
Detailed Listing of Recommended Full Time Equivalent (FTE)
Position Changes for FY2018
Position FTE Department Funding Source
Customer Service Clerk 1.00 Communications &
Marketing
General Fund/
Bed Tax Fund
Document Clerk 1.00 Engineering General Fund
Police Officer 2.00 Police General Fund
Senior Maintenance Associate 1.00 Public Works General Fund
Fleet Tech I 1.00 Public Works General Fund
Water Operator III 1.00 Water Water Fund
Wastewater Reclamation Operator II 1.00 Wastewater Water Fund
Total FTE Changes 8.00
FY2015 FY2016 FY2017 FY2018
Budgeted FTE 328.58 338.73 348.63 356.63
Position change from previous year 9.25 10.15 9.90 8.00
Percentage change from previous year 3% 3% 3% 2%
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