Item 6F-6GFY 2016 Proposed Budget Items 6F – 6G
September 15, 2015
Sharen:
Thank Council for opportunity to present
Taking the final step required for the formal adoption of the FY 2016 proposed budget
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Council Action Requested
Sharen:
Council consideration on several items tonight, including the second reading of the budget and the tax levy ordinance.
L:Budget/FY2011/Presentations/Overview FY2011 Budget Presentation.pptx
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Service Delivery Goals
Sharen
The FY 2016 budget has been built around strategic investments designed to provide great services to our residents and businesses.
The framework around which we build our budget
is well-established
We work hard to understand our customer preferences and needs, using survey data (note, we are updating)
We align our budget requests with the strategic priorities
set by Council
And the Southlake 2030 elements provide us with our implementation recommendations.
Finally, we use performance measures as a way to measure the quality and quantity of
our work.
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Service Delivery & Quality of Life
Sharen:
In the last citizen survey, we noted that people in Southlake reported being satisfied with City services.
Our goal, of course, is to ensure that satisfaction with our services
continues or improves.
This budget has been designed to support the departments in their efforts to continue to provide outstanding services, to make Southlake a special place, and
to do our part to ensure that our residents and businesses have the quality of life they are looking for in a home.
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Service Delivery Excellence
STRONG
Financial Management Assessment
Sharen:
The City is regularly recognized for its work
Two AAA bond ratings
“Strong” rating through S&P’s financial management assessment
Accredited police & fire departments
For 15
years, the Police Department is accredited through the Commission on Accreditation for Law Enforcement Agencies, which has established best practices for law enforcement. Departments
are reviewed based on 487 standards.
The Fire Department has been accredited since 1999 through the Commission on Fire Accreditation International, demonstrating compliance with 296
performance indicators.
Achieved ISO rating of 1, effective September 1, 2014. Highest rating possible – highest grade since 1926 (1971-new system).
Numerous awards for strong management,
planning, parks and recreation facilities, budgeting and financial reporting.
The strategic objective set by the Council is to be “best in class” in all City disciplines.
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The Southlake Difference
Sharen:
We are building a community we can all be proud of, with places that will only get better with time.
Whether it is a <click> beautiful park, <click> public art, or <click>
quality development, Southlake’s Councils and staff have invested in the community so that growth has been well-managed. The result is a beautiful community that honors Southlake’s
past <click> with strong planning for a great future. <click>, <click>
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FY 2016
Planned Expenses
$86,972,982
Sharen:
As we have previously discussed, the total budget for FY 2016 is about $86.9 million
Comparing the FY 2015 Adopted Budget to the FY 2016 Proposed Budget, expenses are increasing
0.3%
All of the budget funds work together to provide the service and build capital projects.
I want to note that the “other” category depicted on the slide includes the following
funds:
Reforestation: $70,000
Park Dedication: $80,000
Parks/Rec (Sponsorship Fund): $81,000
Library Donation Fund: $10,000
Vehicle Replacement Fund: $538,000
Court Security: $85,504
Court
Technology: $81,500
Red Light Camera: $380,160
Public Art: $135,500
Commercial Vehicle Enforcement: $123,201
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Southlake Taxes
$189
per month
Sharen:
The General Fund is the largest fund in the City budget, paying for police, fire, municipal court, planning, parks, library, engineering, accounting, information technology,
communication, economic development, inspections, records management and other important City services. The General Fund is also the source of dollars for capital projects like, roads,
sidewalks, etc.
The primary source of funding for the general fund is the property tax.
A resident living in an average-valued home pays about $189 a month in property taxes for General
Fund services.
About 17% of the total property tax bill for our community is attributable to the City – the rest funds Tarrant County and CISD
_______% of the total property tax revenue
collected for the General Fund comes from commercial property.
Note that more than $277 million in new construction value was added to the tax roll this year.
Sales tax collections
are also a primary source of revenue for the General Fund.
For FY 2016, sales tax collections are expected to increase 4.5%
About 75%, or $9.4 million of this sales tax is paid by visitors.
Sales
tax comprises about 31% of General Fund revenue
As a side note, voter-approved special sales tax levies are in place
Fund parks, SROs, The Marq, and economic development
Total $13.3
million, with visitors paying about $10 million of the total
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Homestead Exemption
$66,900
(average priced home)
Residential Property Owner Tax Relief
Sharen:
CC has approved an increased exemption. For an average priced home ($557,693) in Southlake, this equates to about a $66,900 exemption or a FIVE AND ONE-HALF cent tax rate reduction.
This
exemption will save the homeowner OF AN AVERAGE VALUED HOME $309 a year IN TAXES. The impact to the City’s budget is a revenue reduction of over $3 MILLION, which is inclusive of both
the general fund operation portion of the tax rate, as well as the debt service portion.
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Residential Property Owner Tax Relief
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Debt Profile
by
Funding
Source
Sharen:
Chart shows the City’s debt trend since 2009, by funding source
Dark green is property-tax supported debt
Beige is voter-approved sales tax district debt
Gold is other debt,
such as that required by the Utility Fund or TIF
Property tax-supported debt comprises 34% of the City’s overall annual debt service payment
Sixty six percent is self-supported by non-property
tax revenue sources
Of this amount, 38% is supported by voter approved sales tax levies (SPDC, CCPD, and The Marq
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FY 2016 Debt Service Highlights Property Tax Supported Debt
Sharen:
A portion of the FY 2016 debt tax rate has been reallocated to provide cash funding for capital projects
Transferring dollars over the City’s optimum fund balance to the Strategic
Initiative Fund provides cash funding for capital projects addressing the City’s master plans.
For FY 2016, $6.5 million dollars in cash will be available for use in funding the General
Fund CIP.
That is sufficient to cover the cost of ALL OF the FY 2016 general fund capital budget and provides that no bonds will need to be issued for this purpose.
Note: Also – We
are cash funding all CIP projects this year… The only bonds we plan to issue are those required for the voter-approved Marq.
Note: Since 2006, about $74.4 million in cash has been
used for capital projects, to avoid borrowing money to fund these needs. An additional $17.7 million is programmed for FY 2016 projects
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FY 2016 Debt Service Highlights Property Tax Supported Debt
85%
10 years
Retired
Sharen:
The City has over the years issued certificates of obligation to fund many of its capital improvement programs.
It is important to note that about 85% of the City’s overall
existing property tax supported debt will be retired within the next ten years. This reflects aggressive amortization schedules and the City’s efforts over the past decade to use cash
funding for certain projects.
No debt for this year’s capital budget means that we will not be adding to the debt load that is supported by property taxes.
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Debt Reduction Trend Property Tax Supported Debt
Sharen:
Chart shows two things:
First, overall property-tax supported debt is declining
Second, debt as a percent of assessed value has declined significantly
This is a measure used
by bond rating agencies, financial advisors
Balance: debt to build infrastructure versus underinvestment OR intergenerational equity issues
Industry warning signals for this measure
– overall PTS debt exceeding 10 percent of assessed value (we are at 0.92%)
Since 2002, the City’s has reduced its property tax supported debt as a percentage of assessed value by almost
75%
Since 2003, the City’s has reduced its total outstanding property tax supported debt by 38%. (or over 1/3)
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Capital Improvement Program
Sharen:
The CIP was previously reviewed with Council
Strategically linked to provide funds for meeting Council’s priorities
A variety of funding sources used
As mentioned previously,
cash funding this year, except The Marq
In FY 2016, about 70% of capital projects come from 2030 recommendations
Also consider companion projects, operating costs, and other timing issues
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FY 2016 Bond Program The Marq Southlake
Sharen:
Phase I – cash
Phase II – approved by the voters, with 72% of voters saying “yes”
Election also created a special levy tax district – collections will fund construction as
well as operations, supplemented by fees
Will sell bonds in the Spring in the amount of $_______
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Guiding Principles
Sharen:
The guiding principles that were put into place several years ago continue to provide the framework for the preparation of the budget.
Establishing a set of budget goals
and abiding by them has been developed as a part of the city’s budget culture – and will continue to be priorities for the coming fiscal year.
As mentioned, budget supports strategic
goals and the implementation of Southlake 2030 recommendations
Always look for ways to reduce the cost to the taxpayer
Unlike the federal governments budget, ours is balanced! Also,
no reliance on our savings acct to balance the budget
We consider the impact of today’s budget decisions on future budgets…also plan for future needs based on City growth
Finally, understand
that we have to have great people to get the job done – Want to be an employer of choice
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Budget Information
cityofsouthlake.com/FY2016
Sharen:
As a reminder – there is quite a bit of information related to the budget
We’ve put the budget materials on our website for ease of review
Encourage people to visit and take
a look at it
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www.cityofsouthlake.com/FY2016
Questions?
Sharen:
I’ll be happy to entertain any questions you may have at this time.
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4.5 cent tax reduction
Taxpayer tax relief
5.5 cent tax reduction
The homestead exemption will complement the current over-65 exemption ($75,000) and the disabled exemption ($75,000) as well as the over-65 tax freeze.
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