Fiscal Year 2013: Overview of City Manager's Recommended Budget ...
Fiscal Year 2013: Overview of City Manager’s Recommended Budget, including Capital Improvement Program Mayor and Council Study Session April 24, 2012
Budget and Internal Audit/Finance
• Legally balanced: revenues = expenditures • Assumes moderate economic and revenue growth • No cuts to City services or employees’ pay
• Provides for gradual restoration of City services
2
Recovery Objectives Incrementally Restore Core Services Address Critical Safety and Security Infrastructure Needs Invest in Employees and Customer Service Enhance Service Delivery: efficiencies, reorganization, new funding solutions, and insourcing/outsourcing 3
Activities to Date February – Preliminary FY 2013 budget information to Mayor and Council on 2/7 – Department heads reviewed line-item requests with City Manager
March: Mayor and Council Study Session updates – FY 2013 budget update on 3/6 – Streets and traffic maintenance on 3/27 – Transit on 3/27 and 4/3
March 30: – draft departmental working papers provided to Mayor and Council
April: Mayor and Council Study Session updates – Police Department on 4/3 – Fire and Parks and Recreation Departments on 4/10
4
Recommended FY 2013 Citywide Budget: $1.296 billion
5
Recommended FY 2013 Citywide Budget: $1.296 billion
6
Fiscal Year 2013 Expenditures $1.296 billion
¹Tucson Water, 18%, Environmental Services, 4%, and Tucson City Golf, 1% ²Mayor and Council, City Clerk, City Manager’s Office, City Attorney, City Court, Equal Opportunity Programs and Independent Police Review, Public Defender, Planning and Development Services and Tucson Convention Center
7
Capital Improvement Program (CIP) Five-Year Total - $826.3 million FY 2013 Total - $293.3 Million • Carryforward from FY 2012 - $87.3 Million • New FY 2013 Funding - $206.0 Million
8
CIP Fiscal Year 2013 Highlights • Communications Center Expansion - $8.7 million public safety impact fees, Pima County bonds, and miscellaneous federal grants; $9.6 million total project • Modern Streetcar/SunLink: $87.6 million; federal TIGER, RTA, and PAG funds; $144 million total project • Southeast Community Park - $4 million Pima County bonds; $5.8 million total project • $1.3 billion in capital unmet needs identified for planning purposes
9
Programmed Use of Police and Fire Impact Fees in CIP • $4.4 million in FY 2013 for Communications Center Expansion; $300,000 in FY 2014; total $4.7 million • $4.4 million in revenues projected to be collected by end of Fiscal Year 2012 • Recommended budget public hearing on 5/8 provides opportunity for comment on use of impact fees • Adoption of budget will result in project being eligible for inclusion in Impact Fee Projects Plan
10
Stabilized Citywide Staffing Levels 6500 5897 5682
5848
6033 6028 5628 5419
5500 5003 5000
4944 4939
20 13
20 12
20 11
20 10
20 09
20 08
20 07
20 06
20 05
20 00
95
4500 19
FTEs
6000
6042
Fiscal Year 11
Enterprise Operations • Environmental Services – No proposed fee increases – Decreased operating budget by $1.6 million due to reduction in “rolling stock” (bulldozers, trucks) purchases • Tucson Water proposed rate increase - $11.8 million – Additional 8.3% in revenue; two alternatives – Scheduled for public hearing and Mayor and Council approval on May 22
12
Enterprise Operations • Tucson City Golf – Update for Independent Audit and Performance Commission, May 2, 2012 – Will proceed with an analysis of both short- and longterm strategies and action plan to enhance financial position
13
Housing, Community Development, and Social Services (federally-funded programs) • Lower funding levels (e.g., CDBG and miscellaneous housing grants) due to end of economic stimulus grant funding • Adjustments being made to continue services at or near current levels • Lead Hazard Control Program federal grant ($2.4M) will help reduce or eliminate lead exposure in more than 210 households 14
FY 2013 General Fund Focus 34% of citywide budget; 66% of FTEs Maintaining core services; platform for ongoing service restoration (e.g. pool openings) Critical infrastructure needs affecting safety and security: • e.g., electrical upgrades (parks, athletic fields), election equipment, radio narrow banding
Investment in employees and customer service • Revenue-generating positions • Reinstatement of employee pay cuts and funding of pension/health increases • Recommended 1% COLA for all employees 15
debt restructuring and fund balance
16
e.g., fines and forfeitures, charges for services, licenses and permits, other (e.g., Pima Animal Care Center, University of Arizona)
17
General Fund: Recommended Tax Revenue Highlights Sales (Business Privilege) Tax - $178.4 million – 40% of budgeted revenue – projected at 3.1% more than FY 2012 estimated
State-Shared (sales, income, and auto lieu) - $114 million – 26% of budgeted revenue – 10.5% increase from FY 2012 estimated due to increase in income tax
Primary Property Tax - $12.5 million – 3% of budgeted revenue – reflects 2% allowable increase over FY 2012 $12.2 million – an additional $1.0 million is included as revenue in the Internal Service Fund to reflect the tort claim reimbursement included in the tax levy as allowable under State law 18
Local Sales Tax: Increasing Slowly • FY 2012 estimate is $5 million more than 2011 actual collections (3%). • FY 2012 YTD collections are up 4.87% (through March). • FY 2013 recommendation will be based on an additional 3.1% over FY 2012 estimate ($5.4 million). • The 2013 sales tax budget is still 14%, or $24 million, less than 2007 levels. $169 $173
$178
2013 Budget*
2012 Budget
$167 $168
2011
2009
2008
$170
2012 Estimate
$196
2010
$202
2007
$220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $-
19
$114M, 26% of GF revenues
$8M less than 2007 $24M less than 2009
20
Primary rate includes $0.0317 for tort reimbursement vs. $0.0728 in FY 2012. Secondary rate corresponds with general obligation debt service schedules. Rate change equates to annual increase of $10.18 from $116.21 to $126.39 for a home with an actual valuation of $100,000. 21
.
General Fund Revenue: Other Highlights • Cable television license reduction of $2 million • Alarm Fee implemented April 1st - $1 million • Zoo Admission revenues projected at $2.2 million, $433,000 more than FY 2012 estimated; assumes fee increase on July 1st • Public utility tax projected at $24.6 million, a 4.2% increase from FY 2012 estimated
22
General Fund Expenditures by Department $444.5 million
Core Services (70%) = $308.8 million, not including core services
1Mass
Transit 9%, Tucson Convention Center 2%. and Council, City Clerk, City Manager's Office, City Attorney, Equal Opportunity Programs and Independent Police Review, General Services, Housing and Community Development, Public Defender, Planning and Development Services, and Transportation. 3Budget and Internal Audit, Finance, Human Resources, Information Technology, and Procurement. 2Mayor
23
Employees = Services and Programs Approximately 67% of the General Fund operating budget will be programmed toward staffing costs (salary, wages, pension, medical, etc.)
24
City of Tucson: Core Services
• Tucson Police • Tucson Fire • Parks and Recreation
• Streets and Traffic Maintenance • Mass Transit System 25
Tucson Police • COPS hiring grants: funding for 75 additional officers; back-to-back academy classes • Reassigned motor officers to traffic enforcement
• State-of-the-art crime lab • Executive development training in anticipation of command attrition 26
Tucson Fire • Service delivery efficiencies implemented to adapt to lower workforce levels • SAFER grant to fund 33 firefighters for two years; pending award • Assumed 911 communications center operations responsibility; reduced call processing times, yet staffing level challenges 27
Parks and Recreation • Maintaining majority of programs at existing service levels • Public-private partnerships (e.g., pool openings) • UA baseball team use of Hi Corbett Stadium • Expedition Tanzania elephant habitat expansion supported by increased fees • Safety (electrical) and security upgrades in facilities and athletic fields 28
Streets and Traffic Maintenance • Four month clean-up of citywide medians and roadsides initiated in early April
• Comprehensive median island maintenance with increased watering intervals • Graffiti contract supplemented with work by city crews • Copper wire replacement and increased traffic striping to address safety issues 29
Streets and Traffic Maintenance • $2 million budgeted for residential street paving (chip sealing) will continue efforts to remediate priority areas citywide • 5/8 Study Session discussion: additional funding options for residential and major streets and roads
30
Mass Transit System • Community investment • Increased costs (i.e., fuel and bus replacements) offset by increasing passenger ridership revenues • Smart Cards program: flexibility, lower maintenance costs, easier route performance tracking, and improved boarding efficiencies 31
Mass Transit System • April 3rd Mayor and Council direction to more closely examine projected revenues and expenditures; adjustments are reflected in submitted budget • $40.4 million General Fund investment in $192.6 million transit system budget • Increase of $0.9 million over $39.5 million estimated Fiscal Year 2012 32
Outside Agencies • Arts and cultural enrichment, civic/special community events, payments to other governments, human services RFP, economic and workforce development • $9.4 million General Fund recommended – In alignment with Fiscal Year 2012 allocations – Detailed listing on page D-214 of budget document
33
Adopted Fiscal Year 2013 General Fund Update Study Session - Second Quarter of Fiscal Year 2013: • Preliminary Fiscal Year End 2012 Results • Fiscal Year 2013 1st Quarter Revenue Update
34
Future Challenges • Continued annual employee benefit cost increases • Unforeseen impact of State temporary sales tax expiration • Public safety federal grants expiring • Continued annual transit operating cost increases • Operating and maintenance associated with capital projects coming online in future years • Adequate funding to address aging infrastructure, replace old vehicles and equipment • Fund balance deficits • Funding to invest in technology • Building and maintaining adequate financial reserves 35
Future Opportunities • Renewed focus on economic development • Annexation: economic and municipal service perspective • Transportation corridor improvements will incentivize property revitalization • Strategic planning for future years (e.g., transit system, golf enterprise)
36
Fiscal Year 2013 Budget Calendar • May 8 – Mayor and Council Study Session discussion – Public Hearing (newspaper notice to be published on 4/30)
• May 15 – Mayor and Council Study Session discussion – Regular agenda adoption of tentative budget (i.e., ceiling)
• June 5 – Public hearing (truth in taxation) on primary property tax rate – Public hearing on budget as tentatively adopted – Special meeting to adopt final budget
• June 19 – Regular agenda adoption of FY 2013 property tax levies
37
Arizona State Budget Law ARS §42-17105.C. requires that after tentative adoption of the Fiscal Year 2013 budget (i.e., May 15 per current budget calendar), total appropriations cannot be increased.
38
Budget Document Online City of Tucson “Hot Topics” and “Budget and Internal Audit Office” websites: http://cms3.tucsonaz.gov/sites/default/files/budget/13bookop.pdf
39
Staff is available to meet with you and your aides over the next weeks to clarify and answer your questions, as necessary.
Questions and Discussion Today What does Mayor and Council want staff to explore or explain further at the May 8 meeting?
40
Budget and Internal Audit/Finance
• Legally balanced: revenues = expenditures • Assumes moderate economic and revenue growth • No cuts to City services or employees’ pay
• Provides for gradual restoration of City services
2
Recovery Objectives Incrementally Restore Core Services Address Critical Safety and Security Infrastructure Needs Invest in Employees and Customer Service Enhance Service Delivery: efficiencies, reorganization, new funding solutions, and insourcing/outsourcing 3
Activities to Date February – Preliminary FY 2013 budget information to Mayor and Council on 2/7 – Department heads reviewed line-item requests with City Manager
March: Mayor and Council Study Session updates – FY 2013 budget update on 3/6 – Streets and traffic maintenance on 3/27 – Transit on 3/27 and 4/3
March 30: – draft departmental working papers provided to Mayor and Council
April: Mayor and Council Study Session updates – Police Department on 4/3 – Fire and Parks and Recreation Departments on 4/10
4
Recommended FY 2013 Citywide Budget: $1.296 billion
5
Recommended FY 2013 Citywide Budget: $1.296 billion
6
Fiscal Year 2013 Expenditures $1.296 billion
¹Tucson Water, 18%, Environmental Services, 4%, and Tucson City Golf, 1% ²Mayor and Council, City Clerk, City Manager’s Office, City Attorney, City Court, Equal Opportunity Programs and Independent Police Review, Public Defender, Planning and Development Services and Tucson Convention Center
7
Capital Improvement Program (CIP) Five-Year Total - $826.3 million FY 2013 Total - $293.3 Million • Carryforward from FY 2012 - $87.3 Million • New FY 2013 Funding - $206.0 Million
8
CIP Fiscal Year 2013 Highlights • Communications Center Expansion - $8.7 million public safety impact fees, Pima County bonds, and miscellaneous federal grants; $9.6 million total project • Modern Streetcar/SunLink: $87.6 million; federal TIGER, RTA, and PAG funds; $144 million total project • Southeast Community Park - $4 million Pima County bonds; $5.8 million total project • $1.3 billion in capital unmet needs identified for planning purposes
9
Programmed Use of Police and Fire Impact Fees in CIP • $4.4 million in FY 2013 for Communications Center Expansion; $300,000 in FY 2014; total $4.7 million • $4.4 million in revenues projected to be collected by end of Fiscal Year 2012 • Recommended budget public hearing on 5/8 provides opportunity for comment on use of impact fees • Adoption of budget will result in project being eligible for inclusion in Impact Fee Projects Plan
10
Stabilized Citywide Staffing Levels 6500 5897 5682
5848
6033 6028 5628 5419
5500 5003 5000
4944 4939
20 13
20 12
20 11
20 10
20 09
20 08
20 07
20 06
20 05
20 00
95
4500 19
FTEs
6000
6042
Fiscal Year 11
Enterprise Operations • Environmental Services – No proposed fee increases – Decreased operating budget by $1.6 million due to reduction in “rolling stock” (bulldozers, trucks) purchases • Tucson Water proposed rate increase - $11.8 million – Additional 8.3% in revenue; two alternatives – Scheduled for public hearing and Mayor and Council approval on May 22
12
Enterprise Operations • Tucson City Golf – Update for Independent Audit and Performance Commission, May 2, 2012 – Will proceed with an analysis of both short- and longterm strategies and action plan to enhance financial position
13
Housing, Community Development, and Social Services (federally-funded programs) • Lower funding levels (e.g., CDBG and miscellaneous housing grants) due to end of economic stimulus grant funding • Adjustments being made to continue services at or near current levels • Lead Hazard Control Program federal grant ($2.4M) will help reduce or eliminate lead exposure in more than 210 households 14
FY 2013 General Fund Focus 34% of citywide budget; 66% of FTEs Maintaining core services; platform for ongoing service restoration (e.g. pool openings) Critical infrastructure needs affecting safety and security: • e.g., electrical upgrades (parks, athletic fields), election equipment, radio narrow banding
Investment in employees and customer service • Revenue-generating positions • Reinstatement of employee pay cuts and funding of pension/health increases • Recommended 1% COLA for all employees 15
debt restructuring and fund balance
16
e.g., fines and forfeitures, charges for services, licenses and permits, other (e.g., Pima Animal Care Center, University of Arizona)
17
General Fund: Recommended Tax Revenue Highlights Sales (Business Privilege) Tax - $178.4 million – 40% of budgeted revenue – projected at 3.1% more than FY 2012 estimated
State-Shared (sales, income, and auto lieu) - $114 million – 26% of budgeted revenue – 10.5% increase from FY 2012 estimated due to increase in income tax
Primary Property Tax - $12.5 million – 3% of budgeted revenue – reflects 2% allowable increase over FY 2012 $12.2 million – an additional $1.0 million is included as revenue in the Internal Service Fund to reflect the tort claim reimbursement included in the tax levy as allowable under State law 18
Local Sales Tax: Increasing Slowly • FY 2012 estimate is $5 million more than 2011 actual collections (3%). • FY 2012 YTD collections are up 4.87% (through March). • FY 2013 recommendation will be based on an additional 3.1% over FY 2012 estimate ($5.4 million). • The 2013 sales tax budget is still 14%, or $24 million, less than 2007 levels. $169 $173
$178
2013 Budget*
2012 Budget
$167 $168
2011
2009
2008
$170
2012 Estimate
$196
2010
$202
2007
$220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $-
19
$114M, 26% of GF revenues
$8M less than 2007 $24M less than 2009
20
Primary rate includes $0.0317 for tort reimbursement vs. $0.0728 in FY 2012. Secondary rate corresponds with general obligation debt service schedules. Rate change equates to annual increase of $10.18 from $116.21 to $126.39 for a home with an actual valuation of $100,000. 21
.
General Fund Revenue: Other Highlights • Cable television license reduction of $2 million • Alarm Fee implemented April 1st - $1 million • Zoo Admission revenues projected at $2.2 million, $433,000 more than FY 2012 estimated; assumes fee increase on July 1st • Public utility tax projected at $24.6 million, a 4.2% increase from FY 2012 estimated
22
General Fund Expenditures by Department $444.5 million
Core Services (70%) = $308.8 million, not including core services
1Mass
Transit 9%, Tucson Convention Center 2%. and Council, City Clerk, City Manager's Office, City Attorney, Equal Opportunity Programs and Independent Police Review, General Services, Housing and Community Development, Public Defender, Planning and Development Services, and Transportation. 3Budget and Internal Audit, Finance, Human Resources, Information Technology, and Procurement. 2Mayor
23
Employees = Services and Programs Approximately 67% of the General Fund operating budget will be programmed toward staffing costs (salary, wages, pension, medical, etc.)
24
City of Tucson: Core Services
• Tucson Police • Tucson Fire • Parks and Recreation
• Streets and Traffic Maintenance • Mass Transit System 25
Tucson Police • COPS hiring grants: funding for 75 additional officers; back-to-back academy classes • Reassigned motor officers to traffic enforcement
• State-of-the-art crime lab • Executive development training in anticipation of command attrition 26
Tucson Fire • Service delivery efficiencies implemented to adapt to lower workforce levels • SAFER grant to fund 33 firefighters for two years; pending award • Assumed 911 communications center operations responsibility; reduced call processing times, yet staffing level challenges 27
Parks and Recreation • Maintaining majority of programs at existing service levels • Public-private partnerships (e.g., pool openings) • UA baseball team use of Hi Corbett Stadium • Expedition Tanzania elephant habitat expansion supported by increased fees • Safety (electrical) and security upgrades in facilities and athletic fields 28
Streets and Traffic Maintenance • Four month clean-up of citywide medians and roadsides initiated in early April
• Comprehensive median island maintenance with increased watering intervals • Graffiti contract supplemented with work by city crews • Copper wire replacement and increased traffic striping to address safety issues 29
Streets and Traffic Maintenance • $2 million budgeted for residential street paving (chip sealing) will continue efforts to remediate priority areas citywide • 5/8 Study Session discussion: additional funding options for residential and major streets and roads
30
Mass Transit System • Community investment • Increased costs (i.e., fuel and bus replacements) offset by increasing passenger ridership revenues • Smart Cards program: flexibility, lower maintenance costs, easier route performance tracking, and improved boarding efficiencies 31
Mass Transit System • April 3rd Mayor and Council direction to more closely examine projected revenues and expenditures; adjustments are reflected in submitted budget • $40.4 million General Fund investment in $192.6 million transit system budget • Increase of $0.9 million over $39.5 million estimated Fiscal Year 2012 32
Outside Agencies • Arts and cultural enrichment, civic/special community events, payments to other governments, human services RFP, economic and workforce development • $9.4 million General Fund recommended – In alignment with Fiscal Year 2012 allocations – Detailed listing on page D-214 of budget document
33
Adopted Fiscal Year 2013 General Fund Update Study Session - Second Quarter of Fiscal Year 2013: • Preliminary Fiscal Year End 2012 Results • Fiscal Year 2013 1st Quarter Revenue Update
34
Future Challenges • Continued annual employee benefit cost increases • Unforeseen impact of State temporary sales tax expiration • Public safety federal grants expiring • Continued annual transit operating cost increases • Operating and maintenance associated with capital projects coming online in future years • Adequate funding to address aging infrastructure, replace old vehicles and equipment • Fund balance deficits • Funding to invest in technology • Building and maintaining adequate financial reserves 35
Future Opportunities • Renewed focus on economic development • Annexation: economic and municipal service perspective • Transportation corridor improvements will incentivize property revitalization • Strategic planning for future years (e.g., transit system, golf enterprise)
36
Fiscal Year 2013 Budget Calendar • May 8 – Mayor and Council Study Session discussion – Public Hearing (newspaper notice to be published on 4/30)
• May 15 – Mayor and Council Study Session discussion – Regular agenda adoption of tentative budget (i.e., ceiling)
• June 5 – Public hearing (truth in taxation) on primary property tax rate – Public hearing on budget as tentatively adopted – Special meeting to adopt final budget
• June 19 – Regular agenda adoption of FY 2013 property tax levies
37
Arizona State Budget Law ARS §42-17105.C. requires that after tentative adoption of the Fiscal Year 2013 budget (i.e., May 15 per current budget calendar), total appropriations cannot be increased.
38
Budget Document Online City of Tucson “Hot Topics” and “Budget and Internal Audit Office” websites: http://cms3.tucsonaz.gov/sites/default/files/budget/13bookop.pdf
39
Staff is available to meet with you and your aides over the next weeks to clarify and answer your questions, as necessary.
Questions and Discussion Today What does Mayor and Council want staff to explore or explain further at the May 8 meeting?
40
