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CITY OF MIDDLETON 2017 Recommended Budget Overview Special Council Meeting November 9, 2016 ---PAGE BREAK--- Budget Highlights 2 Decrease of 3.8% in the City tax rate Includes $220,946 in personnel decision items including a new full-time Public Works Operations Manager and several part-time/LTE positions Additional funds to support a 1.5% cost-of-living adjustment and $30,000 for additional compensation plan adjustments Capital borrowing plan includes $1.5 million for University Avenue reconstruction and $884,445 for the vehicle replacement plan Qualifies for the Expenditure Restraint Program ---PAGE BREAK--- Recommended Budget Summary 3 ---PAGE BREAK--- Fund Revenues Expenditures Tax Levy General Fund $20,616,617 $20,616,617 $12,154,704 Special Revenue Funds $4,272,898 $4,158,680 $0 Risk Management Fund $427,708 $427,708 $0 Community Development Authority $25,100 $78,500 $0 Capital Projects Funds (Non-TIF) $4,014,930 $4,014,930 $0 TIF Districts $9,052,531 $12,068,699 $0 Debt Service Fund $4,720,666 $4,720,666 $4,437,499 Water Utility $3,014,756 $3,149,337 $0 Sewer Utility $2,553,508 $2,771,830 $0 Golf Course $2,338,383 $2,464,207 $0 Other Enterprise Funds $395,174 $334,556 $0 TOTAL $51,432,271 $54,805,730 $16,592,203 2017 Proposed Budget: All Funds 4 ---PAGE BREAK--- 2017 General Fund Summary 5 59.0% 6.2% 9.1% 11.9% 10.0% 3.8% General Fund Revenues Property Taxes Other Taxes & Assessments Intergovernmental Local Revenues Special & Miscellaneous Other / Use of Fund Balnce 9.2% 43.8% 16.7% 7.5% 8.6% 14.3% General Fund Expenditures General Government Public Safety Public Works Culture/Rec/Leisure Conservation & Development Other / Contingency ---PAGE BREAK--- Revenues 6 ---PAGE BREAK--- $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 Tax Rate Comparison 7 2015 Tax Year / 2016 Budget Year Equalized Tax Rates Middleton $6.61 ---PAGE BREAK--- Property Tax Levy Limit Levy Limit Formula Levy growth limited to increase in net new construction Various exclusions for debt service, transfers of services, annexations, emergency expenses 2016/2017 total net allowable increase over prior year: $206,069 Prior Year Total Levy $16,386,134 Less Adjustment for 2016 GO Debt Service ($4,671,940) Prior Year Adjusted Levy $11,714,194 Allowable % Change 2.48% Allowable $ Change $290,512 Plus Adjustment for 2017 GO Debt Service $4,587,497 2016/2017 Total Allowable Levy $16,592,203 8 ---PAGE BREAK--- 2016/2017 Property Tax Projections 9 2016 / 2017 Tax Year Change from Prior Year General Fund Levy (Non-Debt Service) $12,154,704 2.45% Debt Service Levy $4,437,499 - 1.90% Total Property Tax Levy $16,592,203 1.26% Tax Rate $6.35 per $1,000 -3.77% Estimated City Tax on a $347,100 Home $2,203 -$86.23 ---PAGE BREAK--- Non-Property Tax Revenues Intergovernmental Aids Shared Revenue: Increase of $6,283 Expenditure Restraint: No aid in 2017, plan to re-qualify for an aid payment in 2018 and future years Highway Aids: Decrease of $17,164 Exempt Computer Aid: Projected decrease of $100,000 Other Major Revenues Utility PILOT: $125,000 increase over 2016 budget Room Tax (GF): $53,000 increase over 2016 budget TID 3 Administration (Cost Recovery): $100,000 decrease from 2016 budget 10 ---PAGE BREAK--- Expenditures 11 ---PAGE BREAK--- Expenditure Restraint Program (ERP) ERP Guidelines Voluntary program Qualify if General Fund Expenditures less than allowable growth factor Growth Factor = 60% Net New Construction + Inflation (CPI) 2017 Growth Factor = 2.4% 2016 Adopted General Fund Budget $24,789,559 Adjustments for Debt Service & Recycling Fee ($4,577,189) 2016 Net General Fund Expenditures $20,212,370 2017 Proposed General Fund Expenditures $20,616,617 Additional Adjustments Recommended $63,718 2017 Total General Fund Expenditures $20,680,335 Percent Increase 2.32% Allowable Growth Factor 2.4% 12 ---PAGE BREAK--- 2017 Expenditure Adjustments General Fund Items Funded by Surplus or Use of Fund Balance EMS Vehicle Replacement Reserve $48,000 Fire Equipment Replacement Reserve* $190,650 Compensated Absences (Sick Accrual) $210,000 Emergency Contingency $400,000 TOTAL $848,650 * Recommended to increase by $63,718 to the full amount of $190,650 based on final allowable ERP increase. 13 ---PAGE BREAK--- Personnel Decision Items 14 Position / Item Department Cost FTE Increase Staff to Pay Grade Minimums Youth Center $12,092 - Increase Recreation Coordinator to Full-Time Recreation $12,837 0.25 Increase Part-Time Records Clerks to 1.0 FTE Police $10,798 0.25 Part-Time Facilities Maintenance Position Bldg. Inspection $22,607 0.50 Additional Limited-Term-Employee Staffing Public Lands $12,589 0.75 Full-Time Operations Manager Public Works $99,916 1.00 Reclassify Library Assistant III to Librarian I Library $1,174 - On-call Pay for IT Staff IT $26,800 - Additional Planning Intern Hours Planning $7,276 0.14 Part-Time Evening Attendant Senior Center $3,230 0.15 Part-Time Limited-Term Mechanic Public Works $11,627 0.38 TOTAL $220,946 3.42 ---PAGE BREAK--- Other Personnel/Benefit Changes Health Insurance: New deductibles for employee of $250 single/$500 family & drug copay increases to limit City cost increase to 1.85% Dental Insurance: No change in rates for 2017 Income Continuation Insurance: Premium holiday extended to 2017 = savings of $15,000 Cost-of-Living Adjustments: Personnel contingency budgeted to allow for 1.5% adjustments in 2017 Compensation Plan Adjustments: Personnel contingency includes $30,000 for adjustments 15 ---PAGE BREAK--- Other Operating Budget Highlights Risk Management Fund: Establishes a new Risk Management Fund with allocations to the General Fund, Tourism, Water, Sewer, and Golf Course Debt Service Levy: Levy directly to debt service fund rather than the General Fund TIF District Debt Service: Include TIF debt service in TIF Funds rather than in general Debt Service Fund 16 ---PAGE BREAK--- 2017 General Capital Borrowing 17 Project Amount Bldg. Insp. – Plan Scanning & City Hall Fire/Access Panel $37,350 Conservancy Lands – Master Plan, Bock Forest Restoration, City Trail & Network Enhancements $244,175 EMS – Storage Cabinets & Training Room Enhancements $20,000 IT – Fiber Network, City Hall Video Equipment, SIRE Replacement $205,000 Parks, Rec., & Forestry – EAB, Equipment Upgrades, Lakeview Path $351,225 Police – Squad Lighting, Siren, & Controller Replacement $82,950 Public Works – University Avenue Reconstruction (Phase 1) $1,500,000 Public Works – Other Projects Items #3,4,5,6,8,9,10,13,14,15,18 $612,485 Vehicle Replacement Plan – Funding of Items #1-20 $884,445 Water Resources – Adaptive Management $62,300 TOTAL $3,999,930 ---PAGE BREAK--- Debt Service Budget Sources of Funds: Debt Service Tax Levy $4,512,499 Build America Bond Subsidies $133,167 Impact Fees Applied $150,000 $4,720,666 Uses of Funds: Principal : $3,720,000 Interest: $1,000,666 $4,720,666 18 ---PAGE BREAK--- Multi-Year Projections 19 ---PAGE BREAK--- Multi-Year Financial Forecast Multi-Year Forecast Model 5-Year forecast of revenues and expenditures Key assumptions: 2.0% Non-TID EQV growth 2.5% Net New Construction 2.0% Exp. Rest. Pgm. Limit Revenues 0-5% growth Expenditures 1-3% growth Includes Levy Limit and Expenditure Restraint Program projections 20 ---PAGE BREAK--- General Fund Forecast 21 2017 Budget 2018 Forecast 2019 Forecast 2020 Forecast 2021 Forecast General Fund Revenues Property Tax $13,356 $13,691 $14,034 $14,386 $14,747 Other Revenues 6,476 6,826 6,865 6,911 6,962 Total Base Revenues 19,832 20,517 20,899 21,296 21,709 Change 685 382 398 412 Percent Change 3.5% 1.9% 1.9% 1.9% General Fund Expenditures Base Expenditures $19,581 $20,258 $20,899 $21,296 $21,709 New Expenditures 251 259 - - - Total Base & New Expenditures 19,832 20,517 20,899 21,296 21,709 Change 685 382 398 412 Percent Change 3.5% 1.9% 1.9% 1.9% (Numbers shown in $1,000s; Excludes budgeted use of surplus/fund balance) ---PAGE BREAK--- General Fund Forecast 22 $18.0 $18.5 $19.0 $19.5 $20.0 $20.5 $21.0 $21.5 $22.0 $18.0 $18.5 $19.0 $19.5 $20.0 $20.5 $21.0 $21.5 $22.0 2017 Budget 2018 Forecast 2019 Forecast 2020 Forecast 2021 Forecast Revenues (Millions) Expenditures (Millions) General Fund Revenue and Expenditure Forecast: 2017 - 2021 Base Expenditures New Expenditures Base Revenues ---PAGE BREAK--- Capital Borrowing Plan Summary 23 2017 Budget 2018 Projected 2019 Projected 2020 Projected 2021 Projected Streets: University Avenue $1,500,000 $0 $0 $0 Streets: Crack Filling & Chip Seal $165,000 $300,000 $300,000 $300,000 $300,000 Streets: Other Projects $387,700 $901,800 $815,000 $850,000 $850,000 Vehicle Replacement Plan $884,445 $750,000 $500,000 $500,000 $500,000 Other Projects $1,062,785 $548,200 $885,000 $850,000 $850,000 Total Borrowing $3,999,930 $2,500,000 $2,500,000 $2,500,000 $2,500,000 * Assumes the projected $ 1 million cost for University Avenue Phase II is funded by TIF ---PAGE BREAK--- $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Equalized Mill Rate Debt Service Levy Projected Debt Service Levy & Equalized Mill Rate: Capital Borrowing of $4.0 Million in 2017 and $2.5 million in Future Years Capital MOC Police Fire & EMS Future Capital Future Library Debt Service Projection 24 Projected flat equalized mill rate through 2026 ---PAGE BREAK--- Next Steps / Process 25 ---PAGE BREAK--- Next Steps / Budget Process Public Hearing Council Deliberations Potential Budget Amendments Final Expenditure Restraint Program Adjustments Council Action to Approve the Budget – November 15 Budget Approval Resolution (All Funds) Property Tax Levy Resolution Salary Resolution Other Supporting Resolutions – EMS Fee Schedule, Risk Management Fund 26