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Home My WebLink AboutAgenda Packet 03/16/2013 n �F.i�"``, .nits a.�,e✓. ,� .�'us '.* -as, ....,�. � pus„rsa °?aka' s. �t. .� 5 `=. 'r� .a^,?; �rs.z�:-_�:.. �5`° v. umz�`rw TM�t�,,.,.z City of Port Angeles March 16, 2013 ve PresepxtatioprL Overview • Project Schedule • Agenda for Today Financial Planning Process Long-Term Financial Plan Issues & Objectives itk Fa m ity Ckatlevige or Opportunity ? Smith Family Facts: Mr. Smith is 38& Mrs.Smith is 35 Two-income family @ $60,000/year 5-yr. old child'+, another"on the way" Own a 2-bedroom house with 13 yrs. remaining,on mortgage-$1,400/month t4 Smith Family Wants: - Bigger;house for growing family - Help with college tuition--2026& 2032 - House paid-off before retirement Retire @ 62 --24 years for Mr. Smith & 27 ars for Mrs. Smith Smith Family Decision Point: Remodel/add-on to existing house; OR Buy a bigger house VIA61t I's tkC SeSt Ckoloce ? Buy New House Remodel Pro: Pro: • Better neighborhood Home equity loan • Big enough for future ($15,000) for remodel needs paid-off in 13 yrs. • They love their home Con: • 30-yr mortgage vs. Con.- remaining on.remaining 13 years Loan costs additional • Impact on helping with $123/month.for 13 years college tuition • Proposed loan may not • New mortgage paid-off resolve all issues in 2046 — after retirement Project Sckedule • March 16th — Saturday Retreat — Introduction & Background • April 13th — Saturday Retreat — Financial Projections • May 28th — Tuesday Workshop Presentation Preliminary Draft Plan (potential to take public comment) • 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 Agevida for Today • What is a Long-Range Financial Plan (LRFP)? (8:30 am — 9:15 am) • Need to define it for Port Angeles— includes utilities, capital funds — "must include it all" • Issues & Objectives • Other Considerations • Outcomes Desired by Council: (9:15 am — 9:45 am) • What is expected? • When is it due? i • Communication & Involvement Strategy? (9:45 am — 10:00 am) • How to facilitate input? • When to include in the process? i • Tie-in With Other City Plans (10:00 am — 10:30 am) • BREAK (10:30 am — 10:45 am) • Financial Planning Process (10:45 am — 12:15 PM) • Summary &Adjourn (12:15 PM — 12:30 PM) Lovig -Ravige Finavict 9 of Plan Workplan Definition: The process to address issues impacting the City's ability to provide services in a financially sustainable manner. Year 1 will focus on economic factors affecting revenues & expenditures based on the current service delivery plan Year 2 will focus on re-alignment of service delivery options to better reflect long-term finances for the City Annual update proceeding budget process to revise for current conditions e Consensus Point ®- is the definition Range Financial iCouncil? Lo viq Ra vxg e Fivia Yxc 1 9 at Plavx (LRFP) Establish Service Levels (Year 2) - Seek Public Input - Specify Objectives Monitor Budget Develop Long-Range Plan - Provide Financial Reports (Year 1) - Develop public communication Financial Forecast tools - Review Fiscal Policies Reserve Analysis - Debt Planni Developed Balanced Budget - Fiscal Sustainability - All Funds - Capital Improvement Program Issues & Objectives • Financial recast: Provide five-year forecast for all funds (General Fund + Utilities + Capital Funds + Others) • Revenue trends • Expenditure trends • Other identified financial factors • Reserve Analysis: Analyze and recommend appropriate levels of reserve • Adequate to provide for the needs of the program • Doesn't unnecessarily obligate scarce resources • Complies with fiscal policies & legal requirements Issues & Objectives FiscalPolicies: Review each adopted fiscal policy Determine if changes are needed Are any new policies needed? Review Economic Development Fund: Assess history of fund and how the resources were used • Determine future uses of funds • Assess potential for dedicated funding source Self-insurance Fund Analysis. Review current operating practices & reserve requirements Analyze methodology that determines contributions to all various segments of the fund Issues & Objectives • Criminal Justice CostAnalysis: Review and analyze criminal justice costs o Determine options for cost reduction • Utility Cost of Services: Analyze cost of providing utility services Cost of Service Study needs to be timed to be incorporated into the Long-Range Financial Planning Process and the annual budget development Must develop a balance of maintaining infrastructure and use of long-term debt with community's ability to pay Objective of providing a fair and equitable rate structure Issues & ob��ectives • DebtAnalysis: Conduct a review of existing debt and planned use of future debt Determine revenue sources for debt service and repayment • Single SourceRevenues: Analyze the impact of operating revenues from Nippon to determine the extent of financial reliance on a single business LRFP should include gap analysis to assess potential impact for any single business loss/decline Issues & Object[-Ves • Capital Project Funding: Determine funding options, long-term cost obligations and project costs Assess identified (and realistic) project funding sources in relation to project costs Develop potential options for consideration to close funding gap Project selection must consider on-going M&O costs, debt service obligations & overall community ability to pay • General Fund Services: Analyze the revenues and expenditures to identify funding gaps and potential strategies to close the gap • Identify options for short-term gap closing strategies • Identify options for long-term gap closing strategies 2nd Phase of LRFP (planning will begin in 2014 for implementation in 2015) will focus on program/service delivery options Otke, r CoPrLsideratl 9 OVIS Elected officials must lead efforts to maintain fiscal discipline and stick to financial strategies The link between the financial plan and the budget is crucial Elected officials must demand the budget reflect the strategies developed via financial planning Outcomes Desired by Coupeicif What are you expecting the plan to be? Are there specific questions you want answered? What are you expecting the plan to do? • Should the plan "pre-authorize" future rate/tax increases? • Should the plan schedule future bond issues for voter approval? Should the plan provide "pre-authorization" on potential service delivery changes? How will we know if we have met your expectations? Consensus Point #2 - have we factored in Council's expectations?outcomes and COMMUVII"Catio Vx & Ipwolvemevxt Strategy How should we communicate with / involve: General public During the development of the Long-Range Financial Plan After the LRFP has been adopted Employees & bargaining units (unions) Seeking input vs. informing During development & after adoption Partner agencies Seeking input vs. informing During development & after adoption Business community Seeking input vs. informing During development & after adoption Tt 0 e -t 0 vi witk Otker Plaiqs & 0 K -g 0 I'VLg E Ffo rts • Utility rate setting review: LRFP must include consideration of rates for utility operating expense, debt service and impact on overall ability to pay • Capital Facilities Plan: CIP must consider capital funding needs + future operating costs + overall ability to pay in setting capital facility priorities • Comprehensive Plan: • Consideration must be given in Comp Plan to fostering economic development to help lessen the burden on existing citizens & businesses • Must re-consider requirements to dedicate new park/open space to the City it may not be able to afford to operate/maintain • Policies: City policies must be more reflective the unique needs of Port Angeles combined with the ability to pay Fiviavict 0 at PlaKKI'Ag Process • Basic equation: Revenues > Expenditures • Revenues: Types of revenue: Taxes Fees & charges Interest earnings Grants, gifts & donations Loans & bonds • Expenditures: Types of expenditures: Personnel (salaries & benefits) Supplies & services Capital outlay Debt service (principal & interest payments) WAot I'S a cc SaInviced SudgetP" Recurring (on-going) revenues = recurring (on-going) expenditures Use of Reserves or One-time Revenues: Reserves or one-time revenues once spent are gone and cannot be reused next year Reserves or one-time revenues should not be used for recurring expenses If used, use should be limited to: One-time capital expense One-time "seed" money for new programs for start-up — not for continuing support "Emergency" funding to cover short-term opportunities / challenges or to allow for transition to alternate funding source Must include a plan to re-build reserves following use How Close, i's "" Close, Eviougk? ) What is the impact of a 1 .0% "miss" in the General Fund budget: Revenue: 1 .0% "miss" = un-collected revenue of 1 .0% Expend.: 1 .0% "miss" = over-spent by 1 .0% Net Effect: • Revenue: $18,766,000 Value of 1 .0% "Miss:" $187,660 • Expend.: $18,724,000 Value of 1 .0% "Miss:" $187,240 • Total Impact of a 1 .0% "Miss:" $374,900 Key Factors to Covisider • Revenue: • Tax — increases or new taxes: Levying 1 .0% Property Tax increase — YES or NO? Potential for increase in utility tax rates —YES or NO? Potential consideration of new service delivery options: Transportation Benefit District Other new districts or realignments • Fees & charges: Cost recovery: Full: direct cost + indirect cost + overhead Partial: requires subsidy Utility rates: M&O cost coverage Debt service cost coverage a Capital repair, replacement or new • Consensus Point #3 — are there ether key revenue factors � r Key Factors to Covisider • Expenditures: • COLA: If yes, how much & when? • Benefits: Premium cost sharing split: 87.5% employer + 12.5% employee Retirement costs • Operating costs: Inflation factor(s) • Capital Outlay: Needs, wants & demands Maintain what we have — how do we afford? Build new to meet future, changing demands — how do we afford? Schedule & costs • Debt service: How to pay — rates or taxes Future debt issuance • Consensus Point #4 — are there other key expenditurefactors e should consider? Fuvid Covicem Matri 0 X Normal Concern l.lrrtt ted on ern 001 —General Fund - 103— Econ. Develop. Fund - 101 — Lodging Tax 102 - Street Fund - 105— REET-1 Fund - 107— PenCom Fund - 215—2006 LTGO Bond Fund - 160— REET-2 Fund - 172— Housing Fund 403—Wastewater Util. Fund - 401 — Electric Utility Fund - 205—2005 G.O. Bond Fund 404—Solid Waste-Coll. Fund - 402—Water Utility Fund - 214—2005 LTGO Bond Fund 405—Solid Waste—T.S. Fund -406—Stormwater Fund - 310— Capital Projects Fund 501 — Equip. Services Fund 409— Medic 1 Fund - 316— Cap. Proj.-Parks Fund - 412—Wastewater Trt. Fund - 421 —Conservation Fund - 502— Info. Technology Fund - 601 —Cemetery Fund - 503-Self-insurance Fund - 504- Cultural Resources Fund - 602 - Firemen's Pension Fund - 652— Fine Arts Center Reveviue & Expevise Sceviarios • Will build multiple, interactive scenarios • At April 13th meeting, we will demonstrate / explore options & changing factors Scenario#ABC 20142015 2016 2017 2018 Forecast Forecast Forecast Forecast Forcast REVENUE: Property Tax 1.00% 1.00% 1.00%I 1.00% 1.00% Sales Tax 1.00% 1.50%i 2.00%' 3.00% 4.00% Utility Tax 2.00% 2.00%i 3.00%' 3.00% 3.00% Licenses&Permits 2.00% 2.00% 3.00% 3.00% 3.00%' Liquor Excise &Profits -100.00%' -100.00% -50.00% -50.00% -50.00% Miscellaneous Revenue 1.00% 2.00% 3.00% 3.00% 4.00% EXPENDITURES: COLA 2.00% 0.00% 1.00% 2.00% 3.00% Health Insurance 4.00% 6.00% 6.00% 6.00% 8.00% FICA/Medicare 1.00% 1.00% 0.00% 0.00% 1.00% Utilities 3.00% 4.00% 5.00% 4.00% 4.00% Gas&Diesel 5.00% 5.00% 7.00% 7.00% 7.00% Other Expenditures 2.00% 3.00% 3.00% 4.00% 4.00% ��ewx. Fuvid Reweviue, History 2007 2008 2009 2010 2011 2012 Actual Actual Actual Actual Actual Estimate REVENUE Taxes 10,729,382 10,879,226 10,454,971 10,976,487 11,400,476 ; 11,088,049 Licenses&Permits 535,939 401,721 481,052 413,115 662,298 335,552 Intergov. Rev. 455,844 655,493 567,439 835,895 718,900 807,452 Chgs.For Service 4,283,253 4,646,318 4,698,012 4,474,468 5,009,315 5,055,313 Fines&Penalties301,502 295,202 315,921 282,154 256,663 225,241 Misc. Revenues 535,968 535,097 247,973 213,486 278,145 247,200 Proprietary 0 0 0 0 0 0 Non-Revenues 0 0 0 0 0 0 Other Financing 286,036 294,200 349,200 1,112,123 164,028 121,200 Total Revenue 171127,924 17,707,257 17,114,568 18,307,728 18,489,825 17,880,007 $Change from Prior Yr. 1,274,009 579,333 (592,689) 1,193,160 182,097 (609,818) %Change from Prior Yr, 8.04% 3.38% -3.35% 6.97% 0.99% -3.30% i!�evx. Fuvid Revewtue, Forecast 2013 2014 2015 2016 2017 2018 Budget Forecast Forecast Forecast Forecast Forecast REVENUE Taxes 12,083,100 12,246,500 12,437,600 12,692,300 12,985,900 13,321,300 Licenses&Permits 382,875 , 390,500 398,400 410,300 422,600 435,300 Intergov.Rev. 547,350 376,400 216,400 301,900 301,900 301,900 Chgs. For Service 5,226,925 5,279,200 5,384,800 5,546,300 5,712,700 5,884,100 Fines& Penalties 258,000 232,200 209,000 188,100 159,900 135,900 Misc. Revenues146,550 148,000 151,000 155,500 160,200 166,600 Proprietary 0 0 0 0 0 0 Non-Revenues ' 0 0 0 0 0 0 Other Financing 121,200 121,200 121,200 121,200 121,200 121,200 Total Revenue 18,766,000 18,794,000 18,918,400 19,415,600 19,864,400 20,366,300 $Change from Prior Yr, 885,993 28,000 124,400 497,200 448,800 501,900 %Change from Prior Yr 4.96% 0.15% 0.66%' 2.63% 2.31% 2.53% Fuvid Expenditure, History 2007 2008 2009 2010 2011 2012 Actual Actual Actual Actual Actual Actual EXPENDITURES Salaries& Wages 8,375,020 8,570,623 8,885,674 8,987,382 9,225,207 9,230,227 Benefits 1,804,339 2,976,666 3,059,216 3,144,935 3,514,732 3,451,832 Supplies 526,773 490,175 488,455 574,019 627,798 608,077 Services2,635,422 2,578,489 2,404,581 2,466,627 2,478,482 2,593,051 Intergovernmental 1,556,313 3,303,313 2,373,303 1,848,557 2,493,549 2,479,071 Capital 11,012 244,849 10,6510 20,214 75,491 Debt Serv.-Principal 0 0 0 _ 0 0 0 Debt Serve. Interest 0 0 0 0 0 0 Interfund Pmts. 0 0 17,560 1,124 10,421 13,586 Total Expend. 15,908,879 18,164,115 171239,440 17,022,644 18,370,403 18,451,335 $Change from Prior Yr, (124,336) 2,255,236 (924,675) (216,796) 1,347,759 80,932 %Change from Prior Yr. 0.35% 14.18% -5.09%' -1.26% 7.92% 0.44% 6jeyi. Fuvid Expevidt OR ture Forecast 2013 2014 2015 2016 2017 2018 Budget Forecast Forecast Forecast Forecast Forecast EXPENDITURES Salaries& Wages 9,335,000 9,521,700 9,521,700 9,616,900 9,809,300 10,103,500 Benefits 3,541,850 3,641,000 3,783,600 3,908,200 4,043,300 4,234,500 Supplies765,380 780,700 804,100 828,200 861,400 895,800 Services 2,781,170 2,836,800 2,921,900 3,009,600 3,129,900 3,255,100 Intergovernmental 2,290,650 2,313,600 2,348,300 2,395,200 2,455,100 2,528,800 Capital 10,000 10,000 10,000 10,000 10,000 10,000 Debt Serv.-Principal 0 0 _ _ 0 00 0 Debt Serve. Interest 0 0 0 _0 _ 0 __ 0 Interfund Pmts. 0 0 0 0 _ 0 0 Total Expend. 18,724,050 19,103,800 19,389,600 19,768,100 20,309,000 21,027,700 $Change from Prior Yr. 272,715 379,750 285,800 378,500 540,900 718,700 %Change from Prior Yr. 1.48% 2.03% 1.50% 1.95% 2.74% 3.54% 6;op Forecast $23,000,000 I $22,000,000 $21,000,000 -----_-------------__.__-_-__. $20,000,000 -- ---- -- $19,000,000 – -- ----- $18,000,000 2014 < $ 309,800> $17,000,000 �— 2015 <$ 471,200> 2016 <$ 352,500> $16,000,000 2017 <$ 444,600> 2018 <$ 661,400> $15,000,000 G�°�� 4- a4- ayg �1� ay. Q'G Q'G Q�Ja OA4 OApAP pP'G P' S A pAP °N o� o►. ti ti ti ti I Revenue Expenditures 6iap Strategy • Short-Term (2014 Budget): Long-Term (2015+ Budget): • Strategic replacement Service delivery review review for personnel vacancies • Evaluate cost recovery • Program expenditure review • Consensus Point strategiesare there other short 6ievi- Futqd- Uvxassi'ajvxed- Fuvid Salavice $6,000,000 - ---------___ __-----__--� 35.00% i r $5,000,000 -- �- 30.00% i 25.00% $4,000,000 - - -- 20.00% $3,000,000 ---- --- - - 15.00% $2,000,000 - --- -- -- 10.00% t � $1,000,000 - - 5.00% $0 ---- —- 0.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Fund Balance Amt. (Left Axis) % of Gen. Fund Expenditures (Right Axis) F I'm,61 Pl C 1 0 611 Policies Current policy has minimum un-assigned fund balance of 10.0% of General Fund Need to update policies in light of: Need to incorporate policy direction for Long-Range Financial Planning process Re-alignment of the budget process to flow from the Long- Range Financial Plan City of Port Angeles "ability to pay" analysis Changing economic conditions Revisions to state law that significantly alter the "playing field" for cities — revenues & expenditures Electric UtilityTax estimate $2,500,000 i $2,000,000 — $1,500,000 $1,000,000 - $500,000 - $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 est. est. est. est. est. est. ■Electric Utility Tax excluding NPI NPI Electric Utility Tax ■Test Phase "Lost" Electric Utility Tax Est. i A Few Words oin Use of Pebt • Debt can be a good thing when used to: • Pay for projects that last a long time — 20+ years • You want future users to help pay for the improvements they are using Saving money to "cash-out" a project would create a hardship on the community Project is needed now to resolve problems Potential to receive matching grants /outside funding would be lost • Debt can be a bad thing when: • Little consideration is given to total debt burden — individual issues • Debt structure does not benefit the City • Debt re-payment exceeds community's ability to pay or adversely impacts other vital services Vote, r -Alop roved SotAds $8,000,000 $7,000,000 — Includes: •1991 UTGO Bond(Senior Center) $6,000,000 -- _ •1992 UTGO Bond(Fire Station) •1995 UTGO Bond(Library) •2001 UTGO Refunding Bond(Sr. Ctr. &Fire $5,000,000 Station) •2005 UTGO Refunding Bond(Library) $4,000,000 $3,000,000 --2015-- $2,000,000 $1,000,000 --- hh- $0 — — r to O ti CO O O �- N M r}' O n 00 O O N M d' u� CO n co 01 O r N M fD ti 0p O O O O O O O O O r r r O O O O O O CO O O O O O O O O O O O O O O O CO O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N Voter-Approved Debt Add : Couiacil -Av roved Sovids $8,000,000 - - -- ------ --- $7,000,000 --- ------ ----- Balloon payment of$1,000,000 due 03/01/2021. $6,000,000 Ir • Value of reserve fund on: $5,000,000 - _ __ 12/31/12 = $696,513 02/28/21 = $530,600 $4,000,000 • Need to identify dedicated $3,000,000 - i $2,000,000 -------..___.___ -- $1,000,000 CO O O r N M !' LOfD I- OJ O O N M V' O N CO O O N M d' CO n W O O O O O O O O O r r r N N N N N N N N N N M M M M M M M M M O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N Voter-Approved Debt Councilmanic Bonds Add : Elec. Utility Reweviue Sovids $8,000,000 - $7,000,000 —------ $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 ------ $1,000,000 .........."I'll, $0 M V LO Q0 r- M 0 to (D n 00 OC, OOOOC> O (D O O0 0 0 0 OCD 0 0 C> 0 0 0 CD 0 Q 0 "0 0 0 0 0 0 0 n O CD Voter-Approved Debt n Councilmanic Bonds Electric Revenue Bonds Add . lolater — Wastewater Stormwater Reveviue Sovids $8,000,000 - - ---- ..-__....._.._._._..--- _......--------- -- -- ------ $7,000,000 !, $6,000,000 i I $5,000,000 I I $4,000,000 $3,000,000 — JL — - i $2,000,000 ------ $1,000,000 # � v N M V O t0 r- CO O O r N M O CO h W O O OON ON O O O O O O O O O O O O O O NO NO MO [OY OO fO0 I� COO OC) O O NO M a O W h O O O O O O O O O O r r NN N N N M M M M M M M M M N N O O O O O OOO O N N N N N N N N N N N Voter-Approved Debt Councilmanic Bonds Electric Revenue Bonds 0,Water+Wastewater+Stormwater Revenue Bonds Add .- Water PWTF + SRF Loavis $8,000,000 ---- ------- -------. $7,000,000 _.�-- — -- -- ---. $6,000,000 '', — --- -- — $5,000,000 $4,000,000 .... ------ $3,000,000 ---$3,000,000 -- $2,000,000 $1,000,000 Ell — ? s N M a LO f0 n W p 0 r N _M t� Op 00 N M V N m ti O O O N M 7 CO I� O O O O O O O O O O r r r r N N N N N N N N N N M M M M M M M M M O O O O O O O O O O O O O O O O O O O O O O O0 O O O O O O O O O O0 O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N •Voter-Approved Debt Councilmanic Bonds ®Electric Revenue Bonds Water+Wastewater+Stormwater Revenue Bonds •Water--PWTF+SRF Loans Add .- Wastewater PWTF + SRF Loavis $8,000,000 Wastewater PWTF + SRF current $7,000,000 ! --- -- ------- _-_______ ______ debt does NOT include: • $3,000,000 of remaining capacity $6,000,000 ----__________________________ on PWTF loan @ 0.5% yet to be drawn $5,000,000 • $10,000,000 of SRF loan @2.6% $4,000,000 --yeUto beawn I $3,000,000 i $2,000,000 $1,000,000 � ::, O O O O O O O O O < r r r N N N N N N N N N N M M M M M M M M M O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N 0 O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N •Voter-Approved Debt Councilmanic Bonds •Electric Revenue Bonds Water+Wastewater+Stormwater Revenue Bonds n Water--PWTF+SRF Loans a Wastewater--PWTF+SRF Loans Add. REET-I REET-2 P\A/TF Loavis $8,000,000 ----- i Need to revise financial policies $7,000,000 ��— on use of REET funding for long-term debt payment $6,000,000 — --- -- $s,000,000 —--- —--- $4,000,000 $3,000,000 + $2,000,000 $1,000,000 N M OON O O O O O tiO 00 W M .r N W h co O O N NN MN N Nto to NN 00 ON OM M NM MM VM Ln OM O OwO OOOO O O O — r O O O O O N N NN O O O O O O O O OOOOOOO M M N N N N N N N N N N •Voter-Approved Debt Councilmanic Bonds •Electric Revenue Bonds a Water+Wastewater+Stormwater Revenue Bonds ®Water--PWTF+SRF Loans Wastewater--PWTF+SRF Loans •REET-1 + REET-2 PWTF Loans Add.- Covitracts Payable to Mum"cipal Waste for Service $8,000,000 $7,000,000 ------ -- -- ---- -- $6,000,000 1 i $5,000,000 I - - ---- -- - $4,000,000 - _ $3,000,000 $2,000,000 $1,000,000 .v..��esH.i'e, 6'w'..�^a✓�rYei '� r $0 r N M 't O 0 h W M O_ r_ N M [Y O tp h 00 07 O N M V O 0 h w T O N M O [O h w O O O O O O O O O r r r N N N N N N N N N N CO M M M M M M M M OO O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N is Voter-Approved Debt Councilmanic Bonds ®Electric Revenue Bonds Water+Wastewater+Stormwater Revenue Bonds n Water--PWTF+SRF Loans a Wastewater--PWTF+SRF Loans REET-1 + REET-2 PWTF Loans Waste Connections(Transfer Station)Contract Add : Estimated Pebt Service for CSO Looins Pending $8,000,000 -- -- $7,000,000 ----- $6,000,000 f -- -- --- ----- $5,000,000 3 $4,000,000 $3,000,000 ---- - $2,000,000 $1,000,000 $0 - - " r N M d' 47 t0 t� 00 O O r N M V O O ti O O O N�M er O CO r W 61 O r N M � In CO I� W O O O O O O O O Or r r r r N N N N N N N N N N M M M M M M M M M O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N NN N N N N N N N N N N N N N N N N N •Voter-Approved Debt Councilmanic Bonds ®Electric Revenue Bonds m Water+Wastewater+Stormwater Revenue Bonds n Water--PWTF+SRF Loans m Wastewater--PWTF+SRF Loans REET-1 + REET-2 PWTF Loans is Waste Connections(Transfer Station) Contract ■Est. PWTF-$3,000,000 Est.SRF-$10,000,000 Add : Estimated Pebt Servi 0 cc 13tuff StabiliZatiovi Rev. 13orLds $8,000,000 • Est. project costs of $7,000,000 — - $19,500,000 = $4,000,000(DoE) + $6,000,000 L-- $15,500,000 revenue bond $5,000,000 -- -- ---_____________________ -Does NOT include CSO Phase II construction $4,000,000 i $3,000,000 ---- - -- $2,000,000 I $1,000,000 W r $0 r s.-.: 0 N M 0 (C) t0 h 00 O O r N M V N O ti CD 61 O r N M V NON ON ON NO O O O O O O O O O O O O O O N 474 04 [O Nt� N00 NO MO Mr MN MM Mcl' M N O O O O O O O O O O O N N N N N N N N N O In MOf0 OhM ON N N N N N N WM •Voter-Approved Debt Councilmanic Bonds •Electric Revenue Bonds a Water+Wastewater+Stormwater Revenue Bonds m Water--PWTF+SRF Loans m Wastewater--PWTF+SRF Loans •REET-1 +REET-2 PWTF Loans a Waste Connections(Transfer Station)Contract ■Est.PWTF-$3,000,000 m Est.SRF-$10,000,000 •Est.Bluff Stabilization Rev.Bonds Add : Estimated Pebt Service CSO Pkase It PWTF LoatA $8,000,000 j CSO Phase II PWTF $7,000,000 Loan of$11,000,000 @ $6,000,000 ----- ---- $5,000,000 $4,000,000 $3,000,000 .t $2,000,000 — - $1,000,000 $ - N M V' O CO t-- CO M O N M d' O O r CO CA O N M V O SCO t` C'O W O N M O O t` W O O O O O O O O O — r N N N N N N N N N N MM M M M M M M M O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N •Voter-Approved Debt n Councilmanic Bonds m Electric Revenue Bonds a Water+Wastewater+Stormwater Revenue Bonds •Water--PWTF+SRF Loans 0 Wastewater--PWTF+SRF Loans •REET-1 +REET-2 PWTF Loans N Waste Connections(Transfer Station)Contract �s� WTF-$3,000,000 Est.SRF-$10,000,000 uff Stabilization Rev.Bonds CSO Phase II Est. Solid Waste -Travisfer Statiort Fu vid :9404 2012 2013 2014 20152016 2017 2018 Actual Budget Estimate Estimate Estimate Estimate Estimate Operating Revenue 5,137,737 5,296,500 5,296,500 5,296,500 5,296,500 5,296,5005,296,500 Operating Expense 4,496,728 4,616,500 4,616,500 4,616,500 4,616,500 4,616,500 4,616,500 Net Operating Revenues 641,009 680,000 680,000 680,000 ! 680,000 680,000 680,000 Non-Operating Exp.NOT Included Waste Connections Contract 753,345 753,345 753,345 753,345 753,345 753,345 . 753,345 2014 Revenue Bond Est. n/a n/a n/a 1,140,517 1,140,517 1,140,517 1,140,517 Total Debt Service 753,345 753,345 753,345 1,893,862 1,893,862 1,893,862 1,893,862 Revenue Needed to"Break Even"' 112,336 73,345 ! 73,345 1,213,862 1,213,862 1,213,862 1,213,862 Bond Coverage Ratio(1.5x)Rev. n/a n/a n/a 570,259 570,259 570,259 570,259 Additional Revenue Increase 112,336 73,345 73,345 1,784,120 1,784,120 1,784,120 1,784,120 Added Rev.as%of Current Rev. 2.19% 1.38% 1.38% 33,68 „ 6Sf 33"W8% 33 Options to address debt needs will be ready for Council review/consideration at April 13th i Soiled Waste - collectiovis i Fund -*4057 2012 2013 2014 2015 2016 2017 2018 Actual Budget Estimate Estimate Estimate Estimate Estimate Operating Revenue 3,285,000 3,380,600 3,380,600 3,380,600 3,380,600 3,380,600 3,380,600 Operating Expense 3,280,000 3,230,400 3,230,400 3,230,400 3,230,400 3,230,400 3,230,400 Net Operating Revenues 5,000 150,200 150,200 150,200 150,200 150,200 150,200 Non-Operating Exp.NOT Included Transfer to Street Fund 150,000 150,000 150,000 150,000 150,000 150,000 150,000 Transfer to Capital 0 128,536 125,000 125,000 125,000 125,000 125,000 Total Transfers Out 150,000 278,536 275,000 275,000 275,000 275,000 275,000 Revenue Needed to"Break Even 145,000 128,336 124,800 124,800 124,800 124,800 124,800 Added Rev.as%of Current Rev. 4.41% 3.80% 3.69% 3.69% 3.69% 3.69% 3.69% Utility F,)ebt semice 2007 2008 2009 2010 2011 2012 2013 Actual Actual Actual Actual Actual Actual Budget ELECTRIC Utility--Fund#401 Chgs.for Svcs.w/o Nippon 16,789,089 11 17,314,162 17,230,771 17,007,960 17,899,078 18,298,146 18,932,503 Debt Service 426,833 424,933 427,633 429,933 641,676 745,862 749,643 Debt Service as%of Revenue 2.54% 2.45% 2.48% 2.53% 3.58% 4.08% 3.96% WATER Utility--Fund#402 Charges for Services 4,464,313 4,614,795 4,949,671 5,314,437 5,164,477 5,085,857 5,276,000 Debt Service 330,424 331,561 363,919 351,424 464,608 465,659 465,323 Debt Service as%of Revenue 7.40% 7.18% 7.35% 6.61% 9.00% 9.16% 8.82% WASTEWATER Utility--Fund#403 Charges for Services 5,174,164 5,974,532 5,915,523 6,292,941 6,538,209 6,797,703 6,720,800 Debt Service 840,261 872,807 1,205,417 1,226,794 1,285,993 1,151,867 1,297,271 Debt Service as%of Revenue 16.24% 14.61% 20.38% 19.49% 19.67% 16.94% 19.30% SOLID WASTE-Collections Utility--Fund#404 j Charges for Services 3,340,088 3,150,667 3,201,539 3,208,899 3,212,778 3,253,548 3,337,000 Debt Service 0 0 0 0 O 0 0 Debt Service as%of Revenue 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% SOLID WASTE-Transfer Station Utility--Fund#405 Charges for Services 4,863,391 4,736,395 ! 4,677,958 4,920,044 5,014,430 5,093,566 5,128,000 Debt Service 817,752 817,752 817,752 817,752 817,752 817,752 817,752 Debt Service as%of Revenue 16.81% 17.27% 17.48% 16.62% 16.31% 16.05% 15.95% Suildivig Our Tax Base, Short term decisions impact long term tax base. • Individual properties removed from the tax role make a difference • Prioritize City interest in long term negotiations and decisions • Consider challenging decisions that diminish the tax base Tax base decisions have a cumulative and sometimes exponential impact on long term finances Ability tO P6ty COMparison • Objective: Demonstrate City of Port Angeles tax/rate payer "ability to pay" compared to other communities - 'benchmarking" Property Tax Utility Rates Utility Taxes Overall Debt Assessed Value Family / Household Income Other Factors • Consensus Point #6 - are there other factors we should consider for benchmarking? Summary • There is a lot of work & decisions needing to be done in a limited amount of time — need for commitment at all levels • Need to assess 96abilitypay aY 51as it applies to: • Revenues —taxes, fees & charges, utility rates, etc. ® Expenditures — programs/services, salaries & wages, employee benefits, debt service, capital projects, etc. • On-going and future capital projects must considerexisting debt service requirements and ability to pay any new debt service costs • Need for economic development to broaden the tax base is critical to the long-term future of Port Angeles