2019_FY_Budget_Presentation_8/14/2018

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City of El Paso FY 2019

Public Hearing


Agenda • • • • • • • •

Budget process/fiscal management Cost savings and continuous improvement Regional economic development Leveraging city funds/identifying new sources Community/Council priorities Property tax discounts Additional benefits/discounts for seniors Budget Overview

2


FY 2019 Property Tax Rate • Staff recommendation

• Reduce the property tax rate introduced on July 30 • Accept staff recommended tax rate of $0.843332/$100 valuation

• Tax rate ordinance and budget will be adopted on August 21 3


Investing in priorities (core competencies)

Fiscal Management

Economic Development Efforts

Continuous Improvement Leveraging City Funds & New Sources

“Without strategy, execution is aimless. Without execution, strategy is useless.� -Morris Chang

4


OUR MISSION Deliver outstanding services to support a high quality life for

residents, businesses and visitors.

OUR VISION

O U R VA L U E S

beautiful neighborhoods, a

Respect

El Paso will have safe and

vibrant regional economy and

exceptional recreational, cultural and educational opportunities

Integrity

Excellence

Accountability People


Budget Process

• Since 2015, budget developed/presented by strategic goal • Year-round budget updates focusing on various topics

• Strategic Goal Team presentations to update performance results (prior to budget process) • Improving community engagement (1,240 Chime-In responses) • City Council one-on-one budget briefings

6


Fiscal Management

• Realistic budget • Improved revenue forecasting • Departmental budget discipline • Aligned to strategic plan and addressing core services and priorities • Reserves • Increased reserves by $12.7 million over the last four years • Reserves had decreased by $8.9 million from 2012 – 2014 7


Fiscal Management

• Long-term financial plan • Presented as a part of the budget process • Stimulates long-term and strategic thinking • Staff recommendations and Council action to improve longterm outlook • Financial reporting • No audit findings in the last two years • Centralized grant division resulting in proactive monitoring/reporting 8


Cost Savings/Efficiencies Since 2014 • $8 million deficit eliminated in 2014 • $11.4 million increase in fund balance (an additional $1.3 million projected in current year) • $3.4 million saved from organizational alignments • $3.3 million saved from healthcare plan redesign • $16.9 million saved from City debt refinancing • $11.0 million saved from Ballpark debt refinancing • $5.4 million in costs saved or avoided through Lean Six Sigma process improvements

9


Performance Excellence – Lean Six Sigma

10


Long-term Vision

Regional Economic Development Strategy • Job Growth – Jobs, Jobs, Jobs • Wage Growth – Higher paying jobs

• Best Practices of communities such as Oklahoma City and Nashville • Quality of Place • 2nd Factor in BRAC • How Chicago won Boeing Headquarters over Dallas 11


Benefit to Taxing Entities (Over 20 Years) ECONOMIC DEVELOPMENT AGREEMENTS El Paso County

EPISD

YISD

UMC

$45,184,466A

$59,977,208

$17,918,990

$25,147,031 Total $213,977,295

CISD

SISD

EPCC

DMD

$40,144,576

$9,955,460

$14,137,226

$1,512,338

*A:

P r oje c te d num be r m a y be l ow e r due to e c onom i c i nc e nti ve s pr ovi de d by E l P a s o Count y.

* Am ou n ts l i s te d a bove a r e pr oje c ti o ns pr ovi de d by E c onom i c a nd I nte r na ti ona l De ve l opm e nt a nd a r e s ubje c t to c ha nge . 12


Long-term Vision Results No longer listed as an Economically Distressed Community by the Texas Workforce Commission Wage rates (Bureau of Labor Statistics) • Median 2015: $12.70 • Median 2016: $13.11 • Mean 2015: $17.78 • Mean 2016:$18.00 13


Leveraging City Funds/New Sources • • • • •

• •

State Hotel Convention Center Program

$32 million in State funding for Bridges Intelligent Transportation Projects

MPO funding – 20% City, 80% State

$97 million in State funding for the Streetcar project

$2.0 million State Defense Economic Adjustment Assistance Grant (partnership with Enviro Water Minerals Company to convert waste generated from the desalination process into drinkable water) $1.7 million in delinquent Hotel Occupancy Taxes collected through new audits Creation of dedicated revenue for street maintenance and economic development projects

14


Budget Overview • Starting point for tax rate increase was 12 cents

• Unfunded departments supplemental requests of $17.6 million (a reduction of 5.1 cents) • Recommended 3.99 cent increase after:

• Identifying budget reductions (ex. Reducing pay increases from 2% to 1.5%, reducing Police vehicle maintenance by $500K)

• Realigning budgets to actual expenditures

• Natural revenue growth in sales tax and other miscellaneous sources 15


FY 2019 Budget - We are listening • 1,240 community responses to Chime-In survey

• Top 3 priorities identified were: 1. Streets

2. Public Safety 3. Parks

• 138 Council Budget Requests closely align to citizens priorities – streets, public safety, and parks

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We are listening... (Examples of Chime-In Feedback) “Street repair funds need to be increased. Some roads in town are in horrendous repair.” “I have lived in El Paso since 1970. The street conditions are the worst I have ever seen.” “Ramp up the reconstruction/repair of city streets. We should be ashamed of our shoddy streets.” “Street improvements that are properly targeted with recent data”

“More street repairs in residential areas.”

“There are too many pot holes, streets need to be redone and not just for potholes.” “I believe that street repairs are imperative.”

“Street maintenance. POTHOLES! New pavement of roads!”

“Our streets need a little bit more TLC, but in all areas” “Streets should be fixed”

“more money for infrastructure maintenance (street repair, lights, etc)”

“Street repairs are dire.”

“Increase funding for roads”

17


We are listening.....and Responding

• Streets • Last year Council approved accelerating Street CIP resurfacing projects • Recently approved Capital Plans projects include reconstruction, lighting, and median improvements on most travelled streets • Pavement condition index study in progress • $500,000 annually to address ADA on-demand requests • Completing over 45,000 pothole repairs annually 18


We are listening.....and Responding

• Streets • The Street CIP approved in 2012 included resurfacing projects that will only address 7% of street inventory • To meet a pavement replacement cycle of 25 years, at present dollars the City would need to invest over $39 million annually • Increasing Environmental Services Franchise Fee to create annual funding source to address over 50 residential streets annually 19


We are listening.....and Responding

• Public Safety • Entering year four of a ten year plan to add 300 new Officers • Net increase of 87 new Officers since plan implemented • Crisis Intervention Team to assist with mental health responses • Police, Fire and 911 Communicator academies • Replacement of Fire Station #12 • 150 new police vehicles on the street by the end of August • 150 more new police vehicles on the street by August 2019 • 3 Fire trucks and 2 ambulances replaced 20


We are listening.....and Responding • Parks/Quality of Life Projects • Park maintenance costs

• Turf renovation program • Recent grand openings

• Eastside sports complex

• Asia Gateway and Endangered Species Carousel at the Zoo

• Upcoming projects

• Groundbreaking for Eastside Regional Park August 23rd • 3 new recreation centers

• Chihuahuan Desert at the Zoo

21


Where do your tax dollars go?

SCHOOL DISTRICT 46%

CITY 26%

COUNTY/ UMC 23%

EPCC 5% 22


City Tax Relief (Homestead Exemptions) Local Exemption

Homestead Exemption ($5,000 value)

# Exemptions

126,689

Property Tax Discounts

$5.0 million

Over 65 Exemption ($40,000 value)

40,124

$12.0 million

Disabled Exemption ($40,000 value)

7,648

$2.2 million

Total

$19.2 million 23


Examples of Benefits or Discounts for Seniors Over 65 can qualify to pay current year taxes in 4 equal payments Garbage collection - 20% discount Discounts at Zoos, Museums, and Parks Sun Metro - discounted single or multiple ride passes Community Development - Foster Grandparent and Retired Senior Volunteer Program • Fire - Flu shots and health screenings

• • • • •

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FY 2019 Proposed General Fund Budget Goal 3 Visual Image $7,857,127

Goal 4 Quality of Life $45,396,094

Goal 5 Communication $12,106,792

Goal 2 Public Safety $254,595,669 60%

General Fund Budget $425,533,799

Goal 6 Sound Governance $53,602,906

Goal 7 Infrastructure $42,802,126 Goal 8 Healthy, Sustainable Community $7,209,521 Goal 1 Economic Development $1,963,563

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General Fund Budget Breakdown Other $109,516,109 26%

Personal Services $316,017,690 74%

"Other" Categories Outside Contracts Operating Transfers Out Utilities Materials & Supplies Professional Services Interfund Services Other Operating Expenditures Maintenance & Repairs Fuel & Lubricants Communications Building Leases Grant Match Other Non-Operating Contractual Services Minor Equipment & Furniture Travel Community Service Projects Capital Expenditures Subtotal

FY 2018 - 2019 Budget $22,818,319 $26,057,647 $16,327,118 $10,034,870 $6,657,120 $4,566,225 $4,368,854 $4,325,331 $3,216,967 $2,652,969 $2,071,174 $1,786,625 $1,638,292 $1,030,625 $953,979 $482,224 $417,000 $110,770 $109,516,109 26


Major Cost Drivers Description

Police (Academies, Officers, CIT, Collective Bargaining)

FY 2019 Impact $9.7M

Fire (Academies, Collective Bargaining, Overtime)

$5.4M

Appraisal Services (Central Appraisal District)

$0.2M

Pay increases (1.5% effective March 2019)

$1.4M

Water (Parks Dept.)

$1.0M

November Election

$0.4M

Quality of Life Projects Operating Costs Dedicated Street Funding (Transfer) Grand Total

$2.0M $7.0M

$27.1M

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FY 2019 General Fund Cost Increases Public Safety $15.1

Dedicated Street Maint. $7.0 Quality of Life $3.0 Other $2.4 $0

$4

$8

$12

$16 Millions28


General Fund Cost Increases (FY 2017 to FY 2019) Public Safety $34.7 Quality of Life $9.8 Dedicated Street Maint. $7.0 Other $5.3 $0

$5

$10

$15

$20

$25

$30

$35

Millions

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FY 2019 Certified Values FY 2019 Estimated Values

$34,811,772,659

FY 2019 Certified Values

$35,248,872,678

Net General Fund Impact * Proposed Budget assumed 2.8% increase in valuations

$3,220,070 30


FY 2019 Changes to Proposed Budget • Community Development final federal funding allocation

• Utility Sales Tax for Fire Department equipment and vehicle replacement • Approved Council requests of $1.7M

• $1.0M for Fire Department vehicle replacement • $0.7M for reserves (fund balance)

• Additional Council requests

• Funding to increase Council staff

• Additional amount to reserves (fund balance)

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FY 2019 General Fund Budget

FY 2019 Preliminary Budget Fire Vehicle Replacement Council Requests: Fund Balance

Pending (Fund Balance, Council Staff):

TIRZ/TRZ Adjustments (certified values)

FY 2019 Revised Budget

$425,533,799 $3,000,000 $700,000

$1,520,072

($156,071)

$430,597,800 32


FY 2019 Property Tax Rate FY 2018 Adopted

FY 2019 Proposed

0.280451

0.289257

M&O

0.522982

Total Rate

0.803433

Debt Service

FY 2019 Revised

0.554075

0.557239

0.843332

0.843332

0.286093

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FY 2019 Property Tax Rate Proposed Rate

$0.843332/$100

Effective Rate

$0.799259 /$100

Rollback Rate

$0.847470 /$100 34


Tax Rate Impact – Over 65/Disabled PROPERTY TAXES (CITY PORTION) $100,000 HOMESTEAD

FY 2019

$464

$442

FY 2018

$418

FY 2017

$401

FY 2016

• $455

FY 2015 $200

$250

$300

$350

$400

$450

• $500

47,772 homesteads benefitting from Over 65/Disabled exemption tax relief FY 2016 Over 65/Disabled exemption increased by $10K (from $30K to $40K)

Exemption increase resulted in three consecutive years of savings (compared to amount prior to exemption increase)

Overall net benefit (savings) of $95 since exemption increase Exemption increase resulted in a loss of $3.2 million in property tax revenue 35


Preliminary Tax Rate Impact $37.91 annual impact

$100,000

w/ Homestead Exemption

$21.95 annual impact w/ Over 65/Disabled Exemption

36


FY 2019 Non-General Budget FY 2019 Preliminary Budget Fire Vehicle Replacement

TIRZ/TRZ Adjustments (certified values) CDBG Allocation Adjustment

FY 2019 Revised Budget

$557,132,074 $3,000,000 $279,780

$152,104

$560,563,958

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FY 2019 All Funds FY 2019 Preliminary Budget

$982,665,872

FY 2019 Revised Budget

$991,161,758

38


FY 2019 Property Tax Rate • Staff recommendation

• Reduce the property tax rate introduced on July 30 • Accept staff recommended tax rate of $0.843332/$100 valuation

• Tax rate ordinance and budget will be adopted on August 21 39


QUESTIONS

40


Reserves (Fund Balance) General Fund Reserves

FY 2018

FY2017

$46.2

$44.8

FY2016

$44.6

FY2015 FY2014

$33.4

FY2013

$42.9

$42.3

$0

$20

$40

42

FY2017

43

FY2016

44

FY2015 FY2014

$37.3

FY2012

FY 2018

# of Operating Days

$60 Millions

35

FY2013 FY2012 -

20

44 41

48

40

60 41


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