FY 2022-23 Proposed Budget Study Session Presentation May 25, 2022
FY 2022-23 Proposed Budget • • •
Total Proposed Budget: $338,086,187, 0.21% increase over last year FY 2021-22 budget was $337,354,353 1,176 full-time equivalent employees
FY 2022-23 Budget Pressures • ARPA funds were used last year to balance GF budget • Significant decrease in Municipal Court Revenues due to Senate Bill 5 (-$1.5M annually) • 1% LAGERS Increase • Contractually obligated public safety pay adjustments • Ever-increasing costs to city: health insurance, workers’ comp, labor • Inflation and cost of materials and fuel • Result: $5.3 million General Fund deficit just to fund status quo.
Budgetary Options To address the priorities of Independence for All, this budget must: ∙ Makes strategic changes to legacy expenditures that are growing at unsustainable rates, such as health benefits, overtime policies, and other personnel costs; ∙ Attract and retain industry that meets market demand and provides employment opportunities for Independence residents; ∙ Pursue other revenue growth opportunities through ballot initiatives; ∙ Strategically address service-level deployment models to match citizen/service level demand, emerging technologies, regional capacity, and industry best practices; ∙ Make strategic use of one-time resources; AND/OR ∙ Make across-the-board reductions to an already-meager workforce and further reduce our ability to meet citizen demand for basic service delivery in high-priority areas.
General Fund Overview Revenue
• Change to use tax revenues (prop P) • Gas tax increase • 4.5% increase in sales tax revenue • Decreases in cable & telephone franchise fees, Court revenues & fines • No ARPA supplement
Expenditures
• Total General Fund is $74,303,137 • 3.7M less than LY budget • Supported due to one-time savings
Reductions
∙ Fire overtime reduction due to headcount increase supported by fire sales tax fund ($1.2M) ∙ FLSA savings ($315k) ∙ Vacancy Savings ($1.7M) ∙ Health insurance changes ($1M)
General Fund Forecast Update for FY 2022-23 • Top 3 revenue categories represent 67% of general fund revenue • Sales tax susceptible to economic cycles • Franchise fees • Uncertain long-term outlook • Energy efficiency (gas, electric) • Technological change and customer trends (telephone and cable) • Total General Fund projected revenues for FY 2022-23 are $74.3M • Last year included one-time APRA revenues of $3.1M
Major Sources of General Fund Revenues
Use Tax Adjustment – Prop P Vote • On track to trigger the waterfall provision this fiscal year • General Fund will receive less revenue due to recent Prop P changes approved by voters
Sales Tax Summary
FY 2022-23 General Fund Expenditures
General Fund Expenditure and Revenue Growth Comparison
General Fund Five Year Forecast – Fund Balance • Projected year end unassigned fund balance is $9.2M • The City’s reserve balance policy is 16% of annual revenues
Finance and Administration Internal Service Fund Transferred to F&A
F&A Budget: personnel and operating expenses
Charged to Departments
Allocated based on overhead factors
Enterprise Funds • Strategic drawdown from fund balance for CIP in Sewer and Water Funds • Careful financial management in IPL to determine if capital projects can be supported • Notable changes: – Adding 4.0 FTE in Sewer, Equipment Operators, $254k for repairs to sanitary collection system – Adding 2.0 FTE in Storm, Equipment Operators, $122k for additional repairs to storm water system – Adding 1.0 in IPL – Meter Reading Supervisor, $80k – Multi-year planned drawdown of fund balance in the Water Fund for Water Main Replacement Program – $830k in Sewer Fund for Little Blue Valley Sewer District rate increase
Other Funds – Notable Changes •
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Parks, Recreation, and Tourism (1.0 each): - Fiscal Administrator, $74k - PRT Maintenance Worker II, $51k - Multimedia Communications Coordinator, $58k - Right of Way Supervisor / Maintenance Supervisor, $108k Fire PST Changes: - Battalion Chiefs, 3.0, $450k - Fire Captains, 3.0, $335k - Fire Equipment Operators, 3.0, $300k - Fire Inspector – Communications, 1.0, $84k - Firefighter Engineers, 6.0, $540k - Firefighters, 6.0, $540k - Total of 22.00 FTE added
Summary This budget: ∙ Is balanced in accordance with the MO Constitution and City Charter. ∙ Strategically addresses service-level deployment models to match citizen/service level demand, emerging technologies, regional capacity, and industry best practices. ∙ Makes strategic use of one-time resources. ∙ Makes strategic changes to legacy expenditures that are growing at unsustainable rates, such as health benefits and overtime policies. ∙ Positions City to attract and retain development that meets market demand and provides employment opportunities for Independence residents; ∙ Avoids across-the-board reductions to an already-meager workforce and avoids further reducing our ability to meet citizen demand for basic service delivery in high-priority areas.
QUESTIONS/DISCUSSION