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Home My WebLink AboutAgenda Packet 04/20/2013Presentation Overview c Project Schedule o Agenda for Today o Financial Planning Process • Long -Term Financial Plan Issues & Objectives 4/19/2013 1 cog.- ° ange n@ia0 ° lan \' I i 1 H , City of Port Angeles i'1 i April 40; 2013 (v3.1) I j , I I I l it 1 I , i I i i I I j I , 1 �„ j ! Presentation Overview c Project Schedule o Agenda for Today o Financial Planning Process • Long -Term Financial Plan Issues & Objectives 4/19/2013 1 Project "TO DO" Schedule • April 20th — Saturday Retreat — Financial Projections • May 28th — Tuesday Workshop Presentation • Preliminary Draft Plan • June 11th — Utility Advisory Committee presentation • June 18th — Tuesday Regular Meeting • Presentation of Draft for Council Review & Public Comment • July 2nd — Tuesday Regular Meeting • Adoption of Long -Range Strategic Financial Plan by Resolution — Public Comment Accepted Agenda for Today What We Have Done So Far (830 am – 900 am) • Overview, Schedule & Today's Agenda • Issues & Objectives Cost & Revenue Drivers (910 am – 910 am) • General Fund • Utilities 8 Other Funds Baseline Forecast (9:30 am – 10:15 am) • Forecast Factors • History 8 Baseline Forecast BREAK (10 15 am – 10 30 am) What -If Considerations (10 30 am – 11:15 am) • Revenue Considerations • Expenditure Considerations City Council Consensus Direction (11.15 am – 12 15 PM) • Summary &Adjourn (12 15 PM – 12 30 PM) 4/19/2013 2 Plan Elements • Financial Plan (2013): • Financial Forecast • Reserve Analysis • Fiscal Policies • Criminal Justice Cost Analysis • Debt Analysis • Utility Cost of Service (follow -on in late 2013) • Program & Services Plan (2014): • General Fund Services • Capital Project Funding • Economic Development Fund Review • Self- Insurance Fund Review Revenue Drivers • General Fund: (shorter term solution components) • Utility Tax — increase in utility rates generates additional revenue (unless consumption decrease off -sets added revenue) • Sales Tax — disposable family income — what is left after paying for housing, food, utilities, insurance, etc. • Property Tax — potential to take the 1.0% increase o Potential for voter - approved levy lid lift • Fees & Charges — cost recovery rates — full cost recovery or partial cost recovery • If partial cost recovery, what is the source of the subsidy? Long -range solution will focus on growing of the tax base. 4/19/2013 3 Other Revenue Drivers • Street Fund • Motor Vehicle Fuel Tax — fixed rate per gallon of gas & diesel (State rate $0.375 per gallon) • Potential for Transportation Benefit District — Council approved or voter approved • Real Estate Excise Tax (REET 1 & REET 2) • Sales of real estate • Utility Revenue • Rates • Consumption is What Drives Our Costs? • General Fund: • Salaries & Wages + Employee Benefits = $12,876,850 (68.78% of 2013 General Fund) Note Salaries & Wages includes full -time, part- time /seasonal, overtime & employee awards) Salaries & Wages • 1.0% COLA = $88,000 avg. cost to 2013 General Fund for salaries + roll -up costs (FICA, Medicare, PERS /LEOFF) • Employee Benefits: • $1,761,525 employer cost for 2013 health insurance (9.41% of General Fund) • $888,700 employer cost for 2013 retirement (PERS /LEOFF) (4.75% of General Fund) • $453,850 employer cost for 2013 (2.43% of General Fund) Note. Police & Are are not covered by Social Secunty (FICA) • Court, Jail & Public Defender Costs • 2004 — 2012 Compound Growth Rate = 15.02% J 4/19/2013 4 i Other Cost Drivers G Gas /Diesel Purchases • $503,200 budgeted for 2013 — increase of 8.0% from 2012 actual G Utilities • $910,920 budgeted for City -paid utilities in 2013; increase of 2.76% from 2012 actual u State & Federal regulations • Difficult to calculate direct + indirect costs of state and federal regulations G Other factors that drive costs i Revenue Court, Jail & Public Defender 2004 2005 1036 2002 2008 2009 2010 2011 20112013 Bud Caurt,lad, Pub Defend (0001 60005 235,255 213,395 265,766 2704565 256,704 289 ,223 258,796 241 ,251 209,946 245,000 Srafecmnts 0 0 6,501 7,440 0 0 0 0 0 0 Intgvt'1 Serv. Rev 0 0 0 0 8,404 916 0 0 0 0 Total Revenue 136,755 113,395 273,267 278,005 265348 290,139 250,296 241,252 209,946 245,000 Change from Pror Yr -$ (23,568) 59,872 29069 4 738 123% (12,857) 461% 24 991 9439 7 7,3443 -10804 (12339) 578% (31,3113 1293% 35050 16766 Change from 546w Yr -% -9879 Compound G owth Rate' 2000 - 2012: -1.45% $300,000 $250,000 $200,000 $150,000 - $100,000 $50,000 - -' a . r 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Bud. • Court Fines O State Grants • Intgv4'I Serv. Rev 4/19/2013 5 Expenditures . • Court, Jail & Public Defender 2054 2005 2006 2007 219 2309 2010 201 2012 2013 Bud. court lad Pub. Defend 2001 2008 2009 2010 2011 201212013 Bud ReVellIM 236,755 213,395 273,267 230,005 265,148 290,139 Adult Detention 215,321 224 168 346,138 411,092 338,322 33 542 436,084 80,594 593495 104,100 599318 122,467 796,311 104 438 700,000 107400 Public Defender 49134 41 168 39,665 35,694 District (0606 68,160 65,438 74,139 72,566 108306 112 ,765 112,928 115,759 117 704 134,000 Total Expe5840re5 332,615 334,314 461,143 4E9,551 480,269 629,443 810,413 537 745 1416,453 941,500 (0,99 from Amr 524 1 ,759 126,170 (31,592) 50718 149,174 180,980 17,911 180,709 (76953) Chong! from Pro, 5, •9 053% 31.91% -695% 1181% 31 06% 2875% 337% 2157% 756% $1,200,000 51,000.000 $800,000 $600,000 $400,000 $200.000 0 -- Compound Growth Rate 2004 -2012. 15.02% _ t _ ..v -- •-• ••� y J ✓ i , i r 2004 2005 2006 2007 2000 2009 2010 2011 2012 2013 Bud. • Adult Detention a Public Defender • District Court General Fund Subsidy Court, Jail & Public Defender 2034 2005 2006 2001 2008 2009 2010 2011 201212013 Bud ReVellIM 236,755 213,395 273,267 230,005 265,148 290,139 254736 201,257 209 946 245000 5epend5u.es 332,615 334,374 461,143 429,551 480 269 623,443 810,423 837,745 1018 ,453 941 500 Net Gen fund Subsidy (955601 (110,978) 25,190 (287576) 66,897 (151 540 (36 ,330) (215 121) 63,575 (339 303( 124,182 (551 6270 212,324 (596 439) 44,861 (000son 212,019 (696 504) (112,007) C69 from Pro, r.5 (69 from Prier Yr.% 20769 35 618 -2397% 2955% 3660% 3849% 7.5T% 2622% .1608% $0 ($100.000) - 0200,000) - 0300,0001 -1$460,600) - (5500,000) - (5600,000) - (5700,000) - 15000,000) - 15900,0001 'i r-� 2 - r2 -r2 -r -- r nTd 2 2 2 L1 2r'j 2r3_ L'A - 201 =d1 Compound Growth Rate 2004 - -2012: 3050% '� 4/19/2013 6 i Gen. Fund Unassigned Fund Balance $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 50 Cl J 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.008/0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 =Fund Balance Amt. (Left Ax s) .11-% of Gen. Fund Expenditures (Right Ax s) Revenues & Expenditures General Fund History 2009l!�9ff��!! Mat 2006�!�f�!20!09�7 2008 2009!!R9�!�9,�200R11�00�l��R 41 2013 Bud Revenue 15'99782 R 9� vpy5yy��!9y9,9�f,!� 18990405 ff 17596.868 Y.�i��i'/.ITEEI 18 766,000 Fepend,lurcs 14,43 15.990163 , C 4eaau W0flJ�s'4� �90w 1177221�733w9e111I 5`C 943 34457,102 =3w�18,724000 8 01 M 3�lE]ISLISE13111 1200'94 1194214 4xy.2 I 42000 Net 604353 Iu ". °,a9nee Fund Raanee 3,212d' 9 09,23 3,730.20z 4 9yasss 423949231 4,27314.1_21,242 794 4,42.�as 31249951 357oyJ 520,000,000 $19,000,000 $18,000,000 $12,000,00 516,000,000 $15,000,000 $19,000,000 i ♦� l ♦ 5132300,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 201389d. 2 4/19/2013 7 Revenues General Fund History 2004 2005 2006 2007 2008 209 2010 2011 2012 2013 Bud General Fund Fla venue 15499182 15,981,731 16,233659 17,600,725 18,090/409 15596868 18,790,027 18,922,124 18,232.965 18,766,000 Mange from Prwr 5r. $ 3426 ,335 481,949 251928 1,367,062 489684 (493532) 1,193,159 182,097 (739 ,159) 533,035 Sefom %wr 5e.% (3253) 0175, 5.1196 158% 54274 21396 -22396 678% 097% 39096 2.93% $4,500,000 -et $4,000,000 $35113,000 $3,000.000 $2,500,000 $2,000,000 14500.000 14,000,000 - 53,500,000 - $3,000,000 $2,500,000 „ Compound Growth Rate 2004- 2013: 2.14% .- — _ — 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Bud. / $2.000.000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Bud. Ive Property Tax - History 20041 2005 2006 2007 2038 20091 2010 20111 20121 2013 Bud P,nttrty tee 3283,728 3433120 3426 ,335 3,790,294 3875336 3959,074 4,035980 4,067,613 4,112,937 4220000 Change from Prior 5r $ 148,400 452% (3253) 0175, 363,919 1062,6 85042 224% 84,538 l 18% 76,014 192% 31,725 0.79% 45,364 112% 115,073 28096 Change from Prier Y•% $4,500,000 -et $4,000,000 $35113,000 $3,000.000 $2,500,000 $2,000,000 Compound Growth Rate 2003- 2013: 2.84% .- Li, ' 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Bud. 4/19/2013 8 . Utility Excise Tax - History 2004 2005 2006 2007 1008, 2009 2010 2011 2012, 2013 Bud UArty T., Combined 2,684,405 2,455,291 2,884.604 3,157,780 3,353,323 3,506,126 3,743,657 3,800,137 3,381,129 4,048,000 Change from 4,443 YY 55 (29,314) 229,373 373,176 95,543 352,803 237,533 56460 (3w03) -050% 266,711 3.06% Chan !from At Yr.K .108% 5.64% 1294% 2.93% 456% 677% 151% Compound Growth Rate 2003– 2013: 0.52% 54,500,000 54,000,000 53,500,000 - ::, 2004 2005 2006 2002 2008 2009 2010 2011 2012 2013 Bud Compound Growth Rate 2003 -2013. 4.62% I- 52000,000 , 2004 2005 2006 2001 2008 2009 2010 2011 2012 2013 Bud. ►71 Sales Tax - History 2004 2005 2006 2003 2008 2009 2010 2011 2012 2013 Bud Saki ion 2633330 822 760 3,254674 3,357780 3209 ,825 2782,082 2877,100 876 603 2 783 743 2 759 000 C39449e from 77147 Ya $ Ig 9430 431,914 1520% 103,106 317% (142 ,8 55) -441% (417243) 7333% 75,018 342% (497) -0 0774 (92260) .323% (24 243 -0 99% � A mr Yr.% 739% $3,400,000 53,200,000 - 53,000,000 - $2,800,000 Compound Growth Rate 2003– 2013: 0.52% —_ I_--_itiii 2004 2005 2006 2002 2008 2009 2010 2011 2012 2013 Bud 2 4/19/2013 9 i Expenditures General Fund History 2004 2005 20041 2005 2006 2007 2008 2009 2010 2011 2012 2013 Bed. General fund Expend 14,895,430 15,950 162 16501334 511111 X16,,3816828 �9IIMI 18,641,639 2 59'57 1380, 17721139 rrillrill rifSENfEM 12504,943 18,852,702 47,759 770% 18.943p99 90 9/ 048% 1812. Q,_W0 219X99 -116% e(ram%br Yr.5 6,949 855 1094131 Change 9m96b, Y, % 8375,020 1354 MEECEMIIICE03 8,98 7,381 9225 ,207 519,000,000 $18,000,000 $12,010,000 S31,000,000 $10,000,000 9,335 000 3,541 850 Compound Growth Rate 2,231,251 2114316 2004— 2013: 2.57% • -- _ 3059,216 - 111 2004 2005 2006 2002 2008 2009 2010 2011 2012 2013 Bud. \ \ Salaries, Wages & Benefits General Fund History 2004 2005 20061 2007 2008 2009 2010 20111 2012 2013 Bud 0.lary, Wa6, & BeneltteG 7 Solaria& Wages 6,949 855 7,110 580 7540653 8375,020 8,570,623 8,885,674 8,98 7,381 9225 ,207 9 230 227 3,451 832 9,335 000 3,541 850 Benefits 2,231,251 2114316 2,351458 2904,339 2976666 3059,216 3 144 935 3,514 732 Total Revenue 9,181,112 9,284,956 9,892,111 11,179,359 11,547,189 11,944,890 11,131,311 12,139,939 607,622 501% 12,682,059 /57980) 045% 12,876,850 194 791 l 545 Change rani Pm' Y, 4 303644 113% 607155 654% 1287248 13.01% 367,930 329% 391,603 344% 287427 157% Change from 750, YS -% " Compound Growth Rate. 2004 — 2013. 3,87% 514,000,000 $12,000,000 $10,000,000 $L000,BOo $6,000,000 54,000,000 $2,000,000 $o 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Bud. • Salaries& Wages • Benefits \ 4/19/2013 10 Baseline Forecast — General Fund Revenues Property Tax' • 1.0% increase NOT taken • Only growth from value of new construction & improvements Sales Tax: • No Increase 2014 - 2018 • 1.16% annual increase for 2019 - 2023 Utility Tax. • ''A of 2004 - 2013 compound growth rate (4 67% / 2 = 2 34 %) for 2014 - 2018 • 4.67% annual increase for 2019 - 2023 Revenue Losses: • % of Liquor Excise Tax + Liquor Profits • $200,000 expiration of COPS Grant on 08/31/2014 Other Revenues: • No increase 2014 - 2018 • 1 0% annual increase for 2019 - 2023 2 Baseline Forecast — General Fund Expenditures Salaries & Wages: • 2014 @ 2 0% COLA + 1.1% for merit step /longevity • 2015 - 2023 @ 90% of CPI + 1.1% for merit step /longevity Benefits: • Retirement • 2009 -2012 average annual change • PERS -1156% • LEOFF- 265% • Health Insurance • 2009 - 2012 average annual change - 7 0% • Medic 1 Subsidy: • 2007 - 2012 average annual subsidy increase - 5 3% Court, Jail, Public Defender: • 2007 - 2012 average annual increase - 14.6% • All other costs same as "Best Case" 4/19/2013 11 Rev. & Expend. — Baseline ;. General Fund Forecast 2014 Est. 2015 Est 2016 Ert. 2017 Est. 2018 E0t1 2019 ESt. 2020 Est. 2021 Ert. 2022 Ert 2023 Ert.. Revenue 18925,000 19,069,000 19,309,000 19,712,000 20,053,000 20 560 000 21 086,000 21,633,000 22 220 000 22,001,000 E8Eend'Ures' 19,536,000 20 127,000 (I 058 000) 10,962,000 (1,079000) 21,640,000 (1,928 000) 2346/847 12409,9471 23,323.000 12762,000) 24 200 000 25,061,000 26 025 000 27,074,000 Net Gen Fund Subsidy 1 1611,0001 13114005) 13,428,000) (3,000,000) [4 273,000 LV7- 96094ed Fund o7#c 59.9x51 ,931,995 422.995 1,45050051LD913A5211 06 675)1_19 �JL113217A52.1 130.2 11 $29,000,000 $27,000,000 $25,000,000 623,000,000 $21,000,000 $19„000 $17,000,000 $15,000,000 —� 513,000,000 2014 Est. 2015 Est. 2016 Est. 2017 Est 2018 Est. 2019 Est. 2020 Est. 2021 Est. 2022 Est 2023 Est. \ / 5. Revenue Assumptions Best Case Forecast for Gen. Fund • Property Tax: • 1.5% -- includes 1 0% approved by Council • Sales Tax. • No change 2014 — 2016; V. of CPI for next 7 years • Utility Tax: • % of the 7 -year average annual change for years 2014 -2018; average annual change years 2019 - 2023 • Building Permits & Fees' • CPI estimate — 2014 @ 2 50% -- 2023@ 4.00% • Liquor Excise Tax/Profits: • 1/2 of current estimate (est. loss of $85,000 /yr.) • Courts, Jail & Public Defender: • % of the 2007 — 2012 average annual increase = 7 3% • COPS Grant: • $200,000 grant expires 08/31 /2014 4/19/2013 12 Expenditure Assumptions Best Case Forecast for Gen. Fund. • Salaries & Wages: • 2.0% COLA (plus step increase, longevity totals 3.1 %) Retirement. • 7 -year average annual change • PERS @ 5.8% • LEOFF @ 5.2% • Insurance— Medical, Dental & Vision: • 7 -year average annual change @ 6.5% • Gas /Diesel' • 10% per year increase • Other Goods & Services: • CPI estimate — 2014 @ 2.50% -- 2023@ 4 00% • Equipment Replacement & Services. • Years 2014 — 2018 @ CPI +2 0 %; years 2019 — 2023 @ CPI Rev. & Expend. — Best Case General Fund Forecast 2014 Est 1 2015 Est. 2016 Est. 2017 Est 2018 Est. 2019 Est. 2020 Ertl 2021 Est 2022 Est i 2023 Ert. Revenue /89717200 19,161,000 19 522,000 19,921,000 20,337,000 20,694,000 21 473 000 22033000 22,696000 21361000 Expenditures 19,432 ,000 20/27000 20062,000 11,3400001 21,640,000 11 718,0000 22,462 000 02,125 0000 23,321,000 02 428,0000 24,200,000 11323.0001 10,061 000 12$000001 26,025 000 27,274,000 13,319000, 137130001 Net Gen Fund Subsidy 1461,0001 966000 I Vnos+ ed fun 6ubnee 3109995 ;303995 003995 913005 5 39 .5 9462 tl,s BU9005 1001 ''5 14511 5 1e •Cps $29,000,000 527 ,00 525„0 523,000,000 521,000,000 $17,000,000 $15, , 513,000,000 2014 Est 2015 Est. 2016 Est. 2017 Est. 2018 Est 2019Est. 2020 Est. 2021 Est. 2022 Est. 2023 Est. 1 / 4/19/2013 13 Revenues General Fund Forecast 2014 Est 2015 Est 2016 Est. 2017 Est 2018 Est. 2019 Est 2020 Est 2021 Est. 2022 Est 2023 Est. Gen Fund-Base Est 18.915.000 19,069.000 19,383.000 19,312,000 20.053.000 20.560.000 21,086,000 21.633.000 22.200.000 23,801,000 Gen Fund -8est Case Est 18931000 19,11000 19,522 000 19,922,000 20,357 000 20894,800 21,433.000 22,033,000 12696,000 10,361,00 Chg from Pe tor Yt -5 0194 2023 Est. 144,000 314,000 329,000 341,000 503000 526,000 543,000 563000 601,000 ChgJ,om Prior Y0-% pow) 4,444,000 0.26% 165% 130% 133% 253% 256% 159% 262% 231% Ch from Poor 5,5)05) 4.903000 190,000 361000 100 ,000 415000 533,000 529000 600,000 623,000 665,000 Chg[rnm Prior Yr. %(HI) 22000 100% 188% 205% 20H% 234% 232% 239% 282% 293% 53,000,000 52,900,000 - 52,800,000 — 52,200,000 - 52,600,000 52,500,000 52,400,000 - 52,300,000 - 52,200,000 - 52,100,000 52,000,000 20 3 Bud. 2014 Est 2015 Ert. 2016 Est. 2012 Ert. 2018 Est. 2019 Ert. 2020 Ert. 2021 Es 4/19/2013 14 Property Tax - Forecast 2014 Est 2015 Est 2016 Est. 2017 Est. 2018 Est 2019 Est. 2020 Est 2021 ESL 2022 Sot 2023 Est. Pre 0y 38n Paso Est 4,249,000 4,220,000 4,192,000 4,313,000 4,335,000 4,356,000 4,324000 4,400000 4,422,000 4,444,000 Property Ts, -0e0t Ca. Est. 4,191,000 4,456,000 4,421,000 4,482000 45 4423,000 4,692,000 4,363,000 4,834.000 4.903000 Cho from Prior Yr -5 (191) 21,000 22,000 21,000 22009 21,000 22,000 22,000 22,000 22000 Chg, from ;WO/ Yr. %(f_) 049% 052% 051% 048% 0514 050% 050% Chg from 7n0, Yr -$ NI 65,000 15396 65000 149% 6600 349% 68 000 152% 6 119% 69000 149% 21,000 153% 21000 1494 23000 351% Chg ft Pr Yr. %JH, ) $5,000,000 $4,500,000 - $4,000,000 - $3,500,000 — $3,000,000 $2,500,000 $2,000,000 ✓ 2013 Bud. 2014 Est 2015 Est. 2016 Est. 2017 Est. 2018 Est. 2019 Est. 2020 Est. 2021 Est. 2022 Est. 4/19/2013 14 Utility Excise Tax - Forecast NIIfto Tax-Base E9 4,149,000 4,240,000 4,339.000 4,444,000 4,544.000 4753,000 9,000 21,000 5,455,000 5,309,000 81A4y Tax-Best UYfst 4,145,000 4,245,000 4,347,000 4,451.000 4,558,000 4,736,000 5,006,000 5,246,000 5499,000 5,762,000 019 from Roar Y. 4 (0ow) 2023 Est, 97000 99000 101,000 104,000 213,000 222,000 232,000 244,000 254000 [hg from %ms Yr.% (Low 1 22.000 234% 233% 2,33% 234% 469% 467% 466% 46896 466% C5, . romanor 54 W+ 2.9601300 100,000 101000 103,000 107 000 218,000 230 000 240 000 152,0000 264,000 (F9 from Rbr Yt -%000 33.000 241% 240% 239% 240% 4799 482% 439% 480% 480% $6,000,000 $5,500,000 55,000,000 - 54,500,000 54,000,000 53,500,000 53,000,000 52,500,000 - r 52,000,000 20 4 Est. 2015 Est. 2016 Est. 2017 Est 2018 Est. 2019 Est. 2020 Est. 2021 Est. 2022 Est. 2023 Est. Iva Sales Tax - Forecast 2014 Est. 2015 Est 2016 Est. 2017 Est 2016 &t 2019 Est. 2020 Est 2021 Est 2022 Est. 2023 Est, Sales T10'919e Est 2.759,000 2.759.000 1,759,000 2,759,000 2.359000 2,391.00 243E3.0m 1,356,000 22.000 Sales TanHest Case ESt 2.359,000 2,759,000 1,75 2,7133,680 2909.000 2.837.000 2366.000 2 .999000 2,923,000 2.9601300 Ch from 7,80, YS.$ (low) 0 0 32,000 32,000 33p8o 33saa 33.000 ma from Prior 1% .z%owl 009 0 0 0009 009 0 0 0009 0004 24000 032% 0070 0939 169 2009 2,002 22019 28000 098% 149 29.000 100% 149 31000 127% 809 fmm Bd., Yr.51 "'I Chgfra^Rmr Yr -9(004 53,000,000 $2,900,000 $2,000,000 52700,000 52600,000 52500,000 52400,000 52300,000 52,100,000 52,100000 52,000,000 — _ 1111111 _ 2013 Bud 2014 Est 2015 Est. 2016 E4 2012 ESt 2018 Est 2019000 2020 Est. 2021 Est 2022 Est 4/19/2013 15 Expenditures General Fund Forecast 2214 Est. 2014E07 20151St. 2016 Est] 20221505 2038 ESt 2039151. 2020 f,0. 2021 Ert. 2022 ESLC 2023 Gen 59n6 Base Ert 19,536,000 30.902,000 21357.00 23,409,000 23,560,000 24.35,000 26,132000 27,550,000 29,098,000 30,933,000 Gen Fund -Bert Case Est 19932,000 20,223,100 20,862,000 21,640,090 22,461,000 23,322,000 24 290 000 25,061 000 6,025 000 22,074,000 C6g. from Prior 0:5 6ow) Chg. from Poor Yr - %low) 166000 443% 955 ,000 468% 3,052,000 493% 3459,000 5.17% 1 ,267,000 538% 1,332,000 538% ])78,0000 527% 1,548,000 562% 1,835,000 631% CFg from Prior Er . %/low) C80 from Anon 5r4 (96) 695,000 735 ,000 778,000 822 ,000 860,000 078,000 861 ,000 964,000 1 049000 CM19.from an., 15.96(X3) 358% 3.65% 333% 380% 343% 376% 3S6% 385% 103% 535,000,000 530,000,000 525,000,000 $20.000,000 $15,000,000 $10,000,000 $5,000,000 _— — 2014 Ert. -2015 Est. 2016 Est. -2012 Est-2018 Est:-2019 Est. -2020 Est -2021 5t: 202 —202 ($5,000.000) 2 ■ K Salaries, Wages & Benefits General Fund Forecast 2214 Est. 2015 Est 2016 Est 2013 Est 2018 Est 2019 Est 2020 Est 2021 Est 2022 Est. 2223 ESt. Gen Fund -Base 590. 12 ,808,000 13 375,000 11,992,000 14,666000 15401,000 16,201,000 17 047 000 17,942,000 16,616,000 895000 16,089,000 13,160000 947 000 19973(00 17931000 1 084 000 Gen Fond -Sett Case Ert 12 ,805,000 13,033000 567,000 13,774,000 617000 14,296,000 674,000 14,840,000 735,000 15,407,000 800.000 15 998 000 846 000 C6gfrom Prior 2,4 (16•) Chg. from Poor Yr - %low) 443% 461% 482% 501% 519% 521% 5.15% 528% 5.34% 569 from P,,0r Er -55 ) 4611 OW 501,000 522,000 544,000 381% 56382% 591 000 384E 618000 386% 4388% 671,000 389% Chg. from Prior Yr. %( 365% 377% 373% 520,000,000 $15,000,000 $10,000,000 $5,000,000 - 0,000,000) ()) ` 2014 Est 2015 Est. 20161St. 2017 Est. 2018 Est. 2019 Est. 2020 Est. 2021 Est. 2022 50. 202 . J 4/19/2013 16 Revenues Street Fund History 2004 2005 1006 2007 2008 2009 2010 20111 20122013 Bud. Heel Fund 07 Subsidy/ Prep iue 819,10 330,368 933 480 336,108 993,115 434,257 1,062 196 959 652 868,324 435 ,257 681,099 417,03S 627,299 416,161 643 ,299 400,531 732,299 389,891 112,000 394,000 Motor Vehicle Fuel 846 Other Revenue 176,683 183 ,245 232283 176 212 225,106 301,520 2,002, 654 679 750 1, 123,216 638 ,331 1,681,121 640119 1,162,309 543,100 1,715,000 Total Revenue 1,374271 2,512,833 1,659,655 1,698,660 1,528,881 Change from Prior 136 562 146,822 39,005 2258 069 773 -999% (116233) 8269 320,562 2285% 135 795) -2 09115 11,888 4448 (16 .909) 3668 9219910.191 Yr % 992% 9718 $1.800,000 / $1,600,000 " $1,400,000 - $1,200,000 - $1.n00,000 $800,000 $600,000 - 5400,000 - $200,000 - -- - — .. - ' L. — — — 1/2004 '. 2005 2006 2007 2008 2009 2010 2011 2012 2013 Bud.5 • G.F. Subsidy / Prop. Tax O Motor Vehicle Fuel Tax • Other Revenue Capital Projects Balancing Needs — New vs. Existing Competing demands: • Need to "take care of what we've got" • Need to build our economic base How to fund? • Bonds: • Council Approved • How to pay debt service? • Voter Approved • Operating budget • Should we save to "cash out' a project'? • What's eliminated /reduced to pay for new costs' • Do we impose new or Increase existing taxes to fund payment? • Existing facilities needing preservation to protect the asset: • Vern Burton • Roof • Gym Floor • City Pier • Floats • Civic Field • Boller & lighting system New projects /demands: • Waterfront Development • Westend Park • NOAA/ Feiro Project • Potential facility sharing /Joint use • Police Station • New police station to accommodate evolving needs 4/19/2013 17 Landfill Bluff Stabilization Solid Waste Debt G Currently developing options for consideration to lessen immediate rate increases: Y Potential for interest only for a limited period of time to lessen rate increase o Potential for alternate structure for debt issuance 9 Options to be factored into the Cost of Service Study (COSA) What If #1 Consensus Point Discussion G Property Tax: Y Consideration of levy lid lift for operating and /or capital expenditures • PROS: • Property tax less regressive than sales tax • Business & industrial property owners contribute • CONS: • Additional cost to citizens & businesses • May discourage business development/expansion • RECOMMENDATION: • • Property tax levy lid lift should not be considered until after program & services plan adopted 4/19/2013 18 What If #2 Consensus Point Discussion O Property Tax: • Consideration of taking 1.0% property tax increase allowed under existing state law • PROS: • Generates additional revenue • Compounding effect can be significant in out years • CONS: • Additional cost to citizens & businesses • May discourage business development/expansion • RECOMMENDATION: • Include taking 1.0% property tax increase in all scenarios and plans for the long -range financial plan What If #3 Consensus Point Discussion • Utility Tax: • Consideration of increasing utility tax rates for water, wastewater, stormwater, solid waste - collection and solid waste- transfer station — electric utility tax rate already at statutory maximum • PROS: • Generate additional revenue • Business & industry helps generate revenue for General Fund • CONS: • Additional cost to citizens & businesses • May discourage business development/expansion • RECOMMENDATION: • Do not increase utility tax rates through 2018. • Only consider future utility tax rate increases if there is a demonstrated ability to pay 4/19/2013 19 What If #4 Consensus Point Discussion • Fees & Charges: • Consideration of increasing all fees & charges in our system . PROS: • Generate additional revenue • Those who consume the service (building permits, recreation program fees, etc.) pay for the cost of providing that service CONS' • May discourage participation in parks & recreation programs due to inability to pay • May discourage business development/expansion RECOMMENDATION: • Fees & charges should be developed with a focus on cost recovery • Establish a schedule for periodic review of fees on an annual basis to encourage incremental increase methodology rather than staggered approach (periods of no increase followed by large increase) What If #5 Consensus Point Discussion • Salaries, Wages & Benefits: • Consideration of when and how cost of living adjustments and /or market rate adjustments and changes to employee benefits will be made in future years • PROS: • Allows the City to ATTRACT and RETAIN qualified employees with the necessary skills to do the job • CONS: • Increases costs to all funds • May require additional revenue either from taxes, fees or utility rates • RECOMMENDATION' The City should adopt a total cost of compensation approach to valuing the compensation (salary and employer paid benefits) to be granted to employees Salaries & wages should be examined on a regular, on -going basis to assess how competitive City of Port Angeles wages are in comparison to the labor market for selected jobs. AM employees should contribute to the cost of their health insurance benefits for the employee and dependents. 2 4/19/2013 20 What If #6 Consensus Point Discussion o Reducing General Fund Subsidy to Street Fund & Medic 1: • Consideration of reducing /eliminating General Fund Subsidy to Street Fund (2013 @ $482,000) and Medic 1 (2013 @ $435,500) • PROS: • Retains funding within the General Fund to support existing /new General Fund programs & services • CONS: • Reduces /eliminates major source of funding for Streets & Medic 1 • Medic 1 may be able to raise utility rate to cover loss. • Street Fund has limited option to recapture lost revenue without creation of a voter - approved Transportation Benefit District • RECOMMENDATION: • The City adopt a plan that would either eliminate or significantly reduce General Fund subsidy to the Street Fund and Medic 1 over a period not to exceed five (5) years. • Explore alternative means to generate replacement funding. 2 What If #7 Consensus Point Discussion • General Fund Un- assigned Fund Balance (Reserve): • Consideration of increasing policy minimum for un- assigned fund balance (reserve) from 10% of General Fund expenditures to 25% • PROS: • Increases funding available for Council direction in case of emergencies and /or unanticipated opportunities Provides potential cushion to aid in transitions /re- alignment • Enhances City's financial strength for bond ratings • CONS • Will require additional funding to reach threshold • May require enhanced discipline by Council and staff to maintain reserves in times of program reduction • RECOMMENDATION: • Policy statement on General Fund Un- assigned Fund should be amended to. o Provide for 25% of General Fund expenditures as a minimum o Designate use of reserves to be limited to one -time capital or program expense — not on -going / recurring costs o Any year -end savings in General Fund will first go to funding the reserve until minimum threshold is achieved 2 4/19/2013 21 What If #8 Consensus Point Discussion • Street Fund: • Consideration of implementing a Transportation Benefit District (TBD) to assist in funding of street repairs • PROS: • Will provide dedicated source of funding that can only be used for transportation- related projects • Could replace all /portion of General Fund subsidy restoring funds to General Fund • CONS: • Additional expense for Port Angeles residents & businesses • RECOMMENDATION: Council to undertake formal review of the potential for formation of a Transportation Benefit District o Consideration should be given for Council- approved $20 "car tab" funding OR voter - approved TBD with enhanced funding o Council should target potential implementation for 2014 o If approved, consideration should be given for reduction /elimination of General Fund subsidy 2 What If #9 Consensus Point Discussion o Medic 1 General Fund Subsidy: • Consideration of reducing /eliminating General Fund subsidy for Medic 1 • PROS: • Would return needed resources to the General Fund for Council re- appropriation • CONS: • Increase in Medic 1 utility charge could impose burden on high demand user groups • RECOMMENDATION: • Council to authorize a 5 -year Cost of Service Analysis (COSA) to evaluate potential for utility rate increases to replace /reduce General Fund subsidy beginning no earlier than 2015 2 4/19/2013 22 What If #10 Consensus Point Discussion • Use of Debt: • Consideration of imposing policy limits on pledging volatile revenue sources such as real estate excise tax (REET) or lodging tax for debt payment on bonds or loans. • PROS: • Would require that the City identify realistic and reliable sources to fund debt service • CONS: • May put added pressure on General Fund or other funds to pay for debt service • RECOMMENDATION: Council to adopt a financial policy restricting the use of volatile revenue sources such as real estate excise tax (REET) or lodging tax for debt payment on bonds or loans 2 What If #11 Consensus Point Discussion • Development of the Tax Base: • Consideration of development of policies that are conducive to attracting and retaining businesses; including potential for annexation • PROS: • Larger tax base may reduce the burden on existing tax payers • CONS: • Additional City support, including staff support and infrastructure development, may be required • RECOMMENDATION: • Council to direct the development of potential implementation strategies that would foster economic development, increase the tax base and promote expansion of business opportunities in Port Angeles 2 4/19/2013 23 • 4/19/2013 Summary • Lots of work and hard choices yet to be made • Very limited economic recovery anticipated in the near -term • Balancing the 2014 budget will be challenging due to revenue limitations combined with loss of revenue previously provided by the State • Program and Services Plan review scheduled for 2014 will be critical to long -term future for the City • Economic Development and building of the tax base is an "absolute necessity" to help secure the City's future • Time spent on financial planning now will be well re -paid in the near -term and long -term future of the City. 24 2007 2008 2009 2010 2011 2012