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HomeMy WebLinkAboutCouncil Presentation - FY2024 Mgrs Recommended BudgetMANAGER’S RECOMMENDED BUDGET Overview •Accomplishments •Economic Outlook •Revenue Outlook •Budget Overview •Investment Summary •Selected Budget Summaries •Next Steps 2 CORE VALUES 3 Strategic Plan V 4 Mission Five-Star service for a thriving community Vision Marana is a trailblazing community that raises the bar for the best quality of life ACCOMPLISHMENTS 5 FY2024 Manager’s Recommended Budget Manager’s Recommended Budget –Complete Budget General Fund Special Revenue Funds Capital Projects Funds (including impact fees) Debt Service Funds Internal Service Funds Enterprise Funds Special Taxing Districts 6 ECONOMIC OUTLOOK 7 F/Y 2024 Economic Outlook •Revenue growth still strong •Corporate and Income taxes higher than expected •Supply disruptions continue •Cautious outlook for F/Y 2024 and F/Y 2025 8 FAC Forecast –April 2023 *Finance Advisory Committee (FAC), April 2023 meeting book Forecaster’s Assessment of Recession Risk •National Association of Business Economics (NABE) •Comparable to the December survey, 58% of respondents believe probability of a recession starting in CY 2023 is greater than 50% •Bloomberg’s monthly survey of Economists •Survey respondents see a 65% risk of recession in CY 2023 –down from 70% in December •IHS Markit Forecasting •In CY 2023, the risk of a mild recession is 55% and a severe recession is 25% 9 *Finance Advisory Committee, April 2023 meeting book F/Y 2024 Economic Outlook •National Unemployment Rate –3.5% •Unexpected continued growth –tight labor market continues •Layoffs in tech sector •Government still lagging (11.1 thousand vacancies, Feb. 2020 to Feb 2023) •National Inflation –5.0% (from 9.1% peak in June, 2022) •Retail sales reduced growth and first signs of contraction •Interest rates stabilizing •Fed –continues to keep a close eye on indicators •Housing affordability remains low 10 *George Hammond, Director, U of A Eller School, Economic and Business Research Center presentation to FAC, April 2023 REVENUES OUTLOOK 11 Sales Taxes 12 Change from F/Y 2023 Budget: 3.0% or $1.1M Retail: 0.2% Utilities: 2.0% Contracting: 40.0% Hotels: 8.4% * Actuals Estimated $30.5 $34.0 $37.8 $41.6 $26.9 $24.4 $31.0 $36.2 $35.1 $- $5 $10 $15 $20 $25 $30 $35 $40 $45 F/Y 2019-20 F/Y 2020-21 F/Y 2021-22 F/Y 2022-23*F/Y 2023-24 BudgetedMillions Actual Revenue Budgeted Revenue State Shared Revenues 13 Change from F/Y 2023 Budget: 28.8% or $5.8M Shared Sales Tax: 11.2% Urban Revenue: 46.9% Auto Lieu: 9.7% * Actuals Estimated **Excludes one-time ARPA funding $13.1 $15.4 $16.5 $21.1 $12.8 $13.0 $14.6 $20.1 $25.9 $- $5 $10 $15 $20 $25 $30 F/Y 2019-20 F/Y 2020-21 F/Y 2021-22 F/Y 2022-23*F/Y 2023-24 BudgetedMillions Actual Revenue Budgeted Revenue Licenses, Fees & Permits 14 Single Family Residence Building Permits by Fiscal Year (F/Y 2023 Budget: 1,250) *Fiscal Year 2023 actual is estimated 687 794 802 855 1,067 1,303 500 0 200 400 600 800 1,000 1,200 1,400 F/Y 2017 F/Y 2018 F/Y 2019 F/Y 2020 F/Y 2021 F/Y 2022 F/Y 2023* Licenses, Fees & Permits 15 Change from F/Y 2023 Budget: 46.5% or $4.0M SFR F/Y 2024 Budget: 600 * Actuals Estimated $6.0 $7.2 $11.1 $7.1 $4.9 $4.4 $5.8 $8.6 $4.6 $- $2 $4 $6 $8 $10 $12 F/Y 2019-20 F/Y 2020-21 F/Y 2021-2022 F/Y 2022-23*F/Y 2023-24 BudgetedMillions Actual Revenue Budgeted Revenue BUDGET OVERVIEW 16 Manager’s Recommended Budget Fiscal year 2023-2024 Overview 17 Operating, 31% Capital Outlay, 64% Debt Service, 5% Expenditure by Category $320.1 Million Sales Tax, $47.7M, 19% Intergovernmental, $81.8M, 33% Licenses, Permits & Fees, $14.6M, 6% Charges for Services, $12.9M, 5% Other, $14.8M, 6% Bonds/loan, $76.1M, 31% Revenues $247.9 Million Manager’s Recommended Budget Fiscal year 2023-2024 Overview 18 •Structurally balanced budget •Budget consistent with growth expectations •Contingency = $5 million Personnel and Benefits, $49.7M, 51% Contracted Services, $20.8M, 21% Operating Supplies & Equipment, $27.1M, 28% Operating Budget by Line Item $97.6 Million F/Y 2024 Recommended Budget Summary 19 Primary Entity F/Y 2023 Adopted F/Y 2024 Recommended $ Change % Change General Fund $ 73,268,176 $ 75,340,712 $ 2,072,536 2.8% Special Revenue Funds 10,487,968 11,275,959 787,991 7.5% Capital Projects Funds 69,992,530 143,829,139 73,836,609 105.5% Debt Service Funds 6,405,137 6,247,451 (157,686)-2.5% Enterprise Funds 56,594,941 66,961,216 10,366,275 18.3% Internal Service Funds 5,289,950 5,696,168 406,218 7.7% Primary entity 222,038,702 309,350,645 87,311,943 39.3% Component Units Special Districts 11,454,435 10,755,253 (699,182)-6.1% Total $ 233,493,137 $ 320,105,898 $ 86,612,761 37.1% Included in the Budget •Compensation adjustments and 14.5 new FTEs •Unfunded liability pay off, Dispatcher’s -$1.2 million •Town -new debt issuances –first time since 2017 •CFD –new debt issuance request •Capital projects -$195.9 million 20 Investment & Initiatives 21 Current Employees Compensation & Benefits adjustments -$4.3m •4% merit based adjustment (2% pay range increase) •Pension rate contributions –slight decreases •7.4% increase for health care premiums (3.5% for employees) •Tuition reimbursement maintained at $25,000 •Increased benefits –Vacation accruals and MTO payout 22 Strategic Positions Working Position Title FTE •Heritage Specialist 0.5 •Police Officer 5 •Asset Management Specialist 1 •Organizational Development Mgr. 1 •Superintendent 1 •Maintenance Assoc II 1 23 Working Position Title FTE •Recreation Programmer – Special Events 1 •Tech Support Specialist II 1 •Business Process Analyst 1 •Custodian 1 •Construction Inspector 1 14.5 New FTEs -$2.3M ($2.1M in Gen. Fund) Resources & Tools Budgeted Expenditures $10.0M ($8.4M in Gen. Fund) •Vehicles & Equipment •New & replacement vehicles including delayed purchases •Projects •Technology projects (Permitting/Licensing software, radios) •Various master plan updates •MMC & MOC facilities updates & repairs •Basketball and tennis court resurfacing •EL Rio Preserve area projects 24 BUDGET SUMMARIES 25 General Fund Budget Summary •Personnel: -2.4% •Contracted Services: 10.9% 26 Category F/Y 2023 Budget F/Y 2024 Recommended $ Change % Change Revenue*$ 75,313,782 $ 69,786,496 $ (5,527,286) -7.3% Expenditures 68,268,176 70,340,712 2,072,536 3.0% Transfers Out 20,746,340 4,516,981 (16,229,359) -78.2% Change in fund balance $ (13,700,734)$ (5,071,197)$ 8,629,537 -63.0% •Operating Supp & Equip: 9.6% •Capital Outlay: 20.4% Expenditures *F/Y 2023 revenue includes $8.2 million of ARPA contribution General Fund Reserves 27 *Estimated based on projections $10.3 $11.0 $11.2 $12.2 $11.2 $13.4 $18.8 $17.4 $7.9 $8.6 $14.6 $23.9 $42.7 $60.1 $61.6 $58.0 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 F/Y 2017 F/Y 2018 F/Y 2019 F/Y 2020 F/Y 2021 F/Y 2022 F/Y 2023*F/Y 2024*MILLIONSTarget Reserve Available Bed Tax Fund Budget Summary 28 Category F/Y 2023 Budget F/Y 2024 Recommended $ Change % Change Revenue $ 1,338,158 $ 1,450,000 $ 111,842 8.4% Expenditures 1,338,158 1,450,000 111,842 8.4% Change in fund balance $ -$ -$ -0.0% Revenue •Sales: 8.4% Expenditures •Personnel: 5.9% •Contracted Services: 1.8% •Operating Supp & Equip: 44.8% HURF Fund Budget Summary 29 Category F/Y 2023 Budget F/Y 2024 Recommended $ Change % Change Revenue $ 4,807,629 $ 5,079,784 $ 272,155 5.7% Expenditures 5,358,694 5,498,818 140,124 2.6% Change in fund balance $ (551,065)$ (419,034)$ 132,031 -24.0% Revenue •Intergovernmental: 3.5% Expenditures •Contracted Services: 5.6% •Operating Supp. & Equip: 0.8% •Capital Outlay: 9.1% Water Operating Fund Budget Summary 30 Category F/Y 2023 Budget F/Y 2024 Recommended $ Change % Change Revenue $ 8,305,134 $ 9,433,000 $ 1,127,866 13.6% Expenditures 9,285,022 10,084,638 799,616 8.6% Transfers In 1,221,578 1,253,919 32,341 2.6% Transfers Out 2,827,893 3,153,585 325,692 11.5% Change in fund balance $ (2,586,203)$ (2,551,304)$ 34,899 -1.3%Revenue •Charges for Services: 9.7% Expenditures •Personnel: 10.7% •Contracted Services: 9.0% •Oper. Supp. & Equip: 4.8% •Capital Outlay: 492.0% Wastewater Operating Fund Budget Summary 31 Category F/Y 2023 Budget F/Y 2024 Recommended $ Change % Change Revenue $ 3,053,875 $ 3,225,105 $ 171,230 5.6% Expenditures 3,531,393 3,433,415 (97,978) -2.9% Transfers In 809,070 809,070 -0.0% Transfers Out 2,087,970 2,137,575 (49,605) 2.4% Change in fund balance $ (1,756,418)$ (1,536,815)$ 219,603 -12.5%Revenue •Charges for Services: 5.0% Expenditures •Personnel: 1.3% •Contracted Services: 12.7% •Oper. Supp. & Equip: 14.8% Airport Operating Fund Budget Summary 32 Category F/Y 2023 Budget F/Y 2024 Recommended $ Change % Change Revenue $ 349,672 $ 349,672 $ -0.0% Expenditures 629,423 647,162 17,739 -6.1% Transfers In 279,751 297,490 17,739 -15.0% Change in fund balance $ -$ -$ -0.0% Revenue •Charges for Services: No change Expenditures •Personnel: 7.0% •Contracted Services: 4.8% Key Dates 33 Dates:Stage in Budget Process Task Description May 16, 2023 Approving Council Adoption of Tentative Budget June 20, 2023 Approving Council Adoption of Final Budget DISCUSSION 34