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FY 2017 Budget Kickoff
June 23, 2015
Mike Loftin, Finance Director
Debbi Pierce, Budget Manager
Carrie Latimer, Senior Bud...
City Council Work Session Goals
 Review City Council Schedule for FY 2017 Budget and CIP
 Review administration budget p...
City Council Budget Schedule
 June 23 – Budget and Capital Improvement Plan (CIP) Council Workshop #1
 July 7 – City Cou...
FY 2017 Administrative Budget
Preparation Process
 Establish FY 2016 projected revenues and expenditures through Quarterl...
Highlights – FY 2017 Outlook
 Capital funds balance virtually exhausted
– New bond sales required for continued progress ...
Long Range Financial Forecast
 A forecast, not a prediction: FY 2017-2021
 First year, 2017, used to frame choices for F...
Water and Sewer CIP and Rates7
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• $96.5 million in priority projects - $39.6 million for optional projets
• $53.6 million in revenue bonds needed
• $8....
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• $27.7 million in priority projects - $43.3 million in optional projects
• $15.5 million in revenue bonds needed
• $6....
General Fund Overview12
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Debt Service Fund and CIP16
Tax Supported Bonds
 Require voter approval through bond election
 Current bonds paid off in FY 2024
 Infrastructure an...
Normal Growth of Tax Base Provides
Funding for Bond Election
18
Hotel Occupancy Taxes, “Trickle
Down” and Island Transit19
Hotel Occupancy Tax Funds: Dollars not Pennies
 Hotel Occupancy Tax – $19 million annually
- Parks Board gets $12 million...
LONG RANGE FINANCIAL FORECAST
HOTEL OCCUPANCY TAX PROJECTIONS
FY 2016 - 2021, ($000'S)
Category
FY 2016
Estimate
FY 2017
F...
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LONG RANGE FINANCIAL FORECAST
CONVENTION CENTER SURPLUS FUND FORECAST
FY 2017 - 2021, ($000'S)
Category
FY 2016
Estimat...
ISLAND TRANSIT SPECIAL REVENUE FUND
OPERATING FORECAST
FY 2017-2021 ($000'S)
CATEGORIES
FY 2016
Estimate
FY 2017
Forecast
...
ISLAND TRANSIT CAPITAL RESERVE FUND
LONG RANGE FINANCIAL FORECAST
FY 2017-2021 ($000'S)
CATEGORIES
FY 2016
Estimate
FY 201...
Questions and Discussion25
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40 CITYOFGALVESTONPROPERTYTAXROLLS
PRE-PROTESTANDFINALTAXABLEVALUE
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Wkshp Item 3.C. Discussion of FY 17-21

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FY17 Budget Financial Forecast

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Wkshp Item 3.C. Discussion of FY 17-21

  1. 1. FY 2017 Budget Kickoff June 23, 2015 Mike Loftin, Finance Director Debbi Pierce, Budget Manager Carrie Latimer, Senior Budget Analyst 1
  2. 2. City Council Work Session Goals  Review City Council Schedule for FY 2017 Budget and CIP  Review administration budget preparation process and schedule  Highlights of FY 2017 – 2021 Long Range Financial Forecast  Request priorities from individual City Council Members 2
  3. 3. City Council Budget Schedule  June 23 – Budget and Capital Improvement Plan (CIP) Council Workshop #1  July 7 – City Council members provide individual priorities to City Manager  July 15 – Proposed CIP distributed to City Council  July 28 – Budget and CIP Council Workshop #2  August 11 – Proposed Budget presented to City Council  August 25 – Proposed Budget and CIP Workshop #3 - Public Hearings on Budget and Tax Rate  September 8 - Council considers adoption of FY 2017 Budget and CIP  September 22 – Council considers adoption of Budget and CIP if necessary - Council adopts FY 2017 Tax Rate 3
  4. 4. FY 2017 Administrative Budget Preparation Process  Establish FY 2016 projected revenues and expenditures through Quarterly Reports and monitoring process  Project FY 2017 baseline revenues and expenditures through Long Range Financial Forecast  Departments receive adjusted budget spending estimate for FY 2016 and adjusted baseline budget for FY 2017  Departments provide alternate projections for FY 2016 and 2017  Departments submit FY 2016 Estimate (June 17)  Departments submit FY 2017 Budget (July 1) including narratives  City Manager’s Office and Budget Office meet with department heads  Funding priorities reviewed and direction provided by City Manager  Policy direction set by Mayor and City Council through regular City Council Workshops  City Manager proposes FY 2017-2021 CIP on July 15  City Manager proposes FY 2017 Budget on August 11 4
  5. 5. Highlights – FY 2017 Outlook  Capital funds balance virtually exhausted – New bond sales required for continued progress in FY 2017  No increase in water and sewer rates for FY 2017  Property tax rate likely will go down due to increase in taxable value - Eight percent revenue increase assumed over FY 2016  Sales tax revenue growth projected to be two percent  Compensation – Baseline projections include no allocations for pay increases yet - No allocations for increases in pension funds in baseline - One percent of payroll in General Fund is $340,000 - Five percent increase in health benefits included in baseline  Program cost increases – Main Wastewater Treatment Plant operations, increased preventive maintenance of streets, drainage, water and sewer lines, police and fire  Healthy operating fund balances projected for FY 2016 into FY 2017  Island Transit operating budget faces funding challenges in FY 2017 and beyond - Convention Center Surplus Fund becomes focus for Island Transit 5
  6. 6. Long Range Financial Forecast  A forecast, not a prediction: FY 2017-2021  First year, 2017, used to frame choices for FY 2017 Budget process – Impact for out years of trends underway is important factor to policy makers  Projection of cost of existing commitments and likely revenues given current economic climate  Scope: General, Debt Service, Waterworks, Sewer, Hotel Occupancy Tax, Convention Center Surplus and Island Transit Operating and Capial Rreserve Funds  Starts with baseline for FY 2017 using FY 2016 Budget  Adjusts for one-time costs and 2 percent inflation allowance 6
  7. 7. Water and Sewer CIP and Rates7
  8. 8. 8
  9. 9. 9
  10. 10. 10 • $96.5 million in priority projects - $39.6 million for optional projets • $53.6 million in revenue bonds needed • $8.5 million pay-as-you-go cost including design and smaller projects
  11. 11. 11 • $27.7 million in priority projects - $43.3 million in optional projects • $15.5 million in revenue bonds needed • $6.2 million for pay-as-you-go projects (design and smaller projects)
  12. 12. General Fund Overview12
  13. 13. 13
  14. 14. 14
  15. 15. 15
  16. 16. Debt Service Fund and CIP16
  17. 17. Tax Supported Bonds  Require voter approval through bond election  Current bonds paid off in FY 2024  Infrastructure and Debt Service monies – Allocate 50-50 to new debt and projects - I&DS monies phased into Debt Service Fund as new bonds are sold  $45 million in bonds and $10.6 pay-as-you-go projects illustrated in graph  Streets are primary program targeted for bond funding – Drainage and municipal facilities are secondary needs for bond funding  Annual or biannual sales tie bond sales to actual funding need as demonstrated through annual CIP planning and quarterly project monitoring  Structure provides slight decline in debt service so City has options as it goes forward depending on the economy and major forces beyond our control 17
  18. 18. Normal Growth of Tax Base Provides Funding for Bond Election 18
  19. 19. Hotel Occupancy Taxes, “Trickle Down” and Island Transit19
  20. 20. Hotel Occupancy Tax Funds: Dollars not Pennies  Hotel Occupancy Tax – $19 million annually - Parks Board gets $12 million - Convention Center gets $5 million for debt service and operations - City gets $2 million, mostly in “Trickle Down” fund  Convention Center Surplus Fund – “Trickle Down” - Rapid recent growth: Doubled in last five years - Used for special events and HOT eligible programs and activities - Parks Board get approximately $500,000 from City - “Trickle Down” identified as funding for trolley system project matches and operating subsidy  Island Transit – Operating and capital reserve funds facing challenges 20
  21. 21. LONG RANGE FINANCIAL FORECAST HOTEL OCCUPANCY TAX PROJECTIONS FY 2016 - 2021, ($000'S) Category FY 2016 Estimate FY 2017 Forecast FY 2018 Forecast FY 2019 Forecast FY 2020 Forecast FY 2021 Forecast SOURCES Local Hotel Occupancy Taxes $15,783 $16,099 $16,421 $16,749 $17,084 $17,426 State Hotel Occupancy Taxes (City Share) $3,449 $3,518 $3,588 $3,660 $3,733 $3,808 TOTAL SOURCES $19,232 $19,617 $20,009 $20,409 $20,817 $21,234 USES Parks Board $11,779 $12,015 $12,255 $12,500 $12,750 $13,005 Convention Center Operations and Debt $4,949 $5,038 $5,124 $5,213 $5,305 $5,386 City Historic Buildings Fund $219 $224 $228 $233 $237 $242 City "Trickle Down" Convention Center Surplus Fund $2,285 $2,341 $2,403 $2,464 $2,526 $2,602 TOTAL USES $19,232 $19,618 $20,010 $20,410 $20,818 $21,235 21
  22. 22. 22 LONG RANGE FINANCIAL FORECAST CONVENTION CENTER SURPLUS FUND FORECAST FY 2017 - 2021, ($000'S) Category FY 2016 Estimate FY 2017 Forecast FY 2018 Forecast FY 2019 Forecast FY 2020 Forecast FY 2021 Forecast REVENUE Convention Center Surplus (Hotel Occupancy Taxes) $2,285 $2,341 $2,403 $2,464 $2,526 $2,602 SUBTOTAL - HOT REVENUE $2,285 $2,341 $2,403 $2,464 $2,526 $2,602 EXPENDITURES Special Events (City) $215 $215 $215 $215 $215 $215 Seawall Activities (City) $250 $255 $260 $265 $271 $276 Parks Board Contract Activities $475 $485 $495 $505 $515 $525 Historic Preservation Island Transit FTC Project Matching Funds 466 0 0 0 0 0 Island Transit Seawall Routes 0 360 370 380 391 402 Historic Broadway Median Replanting Project 2,000 0 0 0 0 0 Subtotal - Historic Preservation $2,466 $360 $370 $380 $391 $402 Trolley System Trolley System Operations 0 0 488 975 1,000 1,026 Trolley System Repair Grant Project Match 218 686 0 0 0 0 Subtotal - Trolley System $218 $686 $488 $975 $1,000 $1,026 Capital Reserves (As Designated by City Council through the Budget) $2,227 $340 $575 $124 $135 $158 SUBTOTAL - EXPENDITURES $5,851 $2,341 $2,403 $2,464 $2,526 $2,602 REVENUE OVER/ (UNDER) EXPENDITURES ($3,566) $0 $0 $0 $0 $0 BEGINNING FUND BALANCE $3,566 $0 $0 $0 $0 $0 ENDING FUND BALANCE $0 $0 $0 $0 $0 $0
  23. 23. ISLAND TRANSIT SPECIAL REVENUE FUND OPERATING FORECAST FY 2017-2021 ($000'S) CATEGORIES FY 2016 Estimate FY 2017 Forecast FY 2018 Forecast FY 2019 Forecast FY 2020 Forecast FY 2021 Forecast BEGINNING BALANCE $40 $0 $0 $0 $0 $0 REVENUE Federal/State Operating Grants Current Grants $1,418 $1,250 $1,250 $1,250 $1,250 $1,250 HGAC Preventive Maintenance Grant 500 500 0 0 0 0 Subtotal Grants $1,918 $1,750 $1,250 $1,250 $1,250 $1,250 Local Fares/Contract Revenue Current Service/Contracts $1,453 $1,489 $1,526 $1,564 $1,603 $1,643 Seawall Bus Fares 0 40 40 40 40 40 Trolley Fares 0 0 12 25 25 25 Subtotal Local Fares/Contract Revenue $1,453 $1,529 $1,578 $1,629 $1,668 $1,708 Hotel Occupancy Tax (Convention Center Surplus Fund Transfer) Seawall Bus Service $0 $360 $370 $380 $391 $402 Trolley Operations 0 0 488 975 1,000 1,026 Subtotal CC Surplus Fund Transfer $0 $360 $858 $1,355 $1,391 $1,428 General Fund 800 800 800 800 800 800 Additional Revenue To Be Identified 19 276 825 875 926 978 TOTAL REVENUE $4,190 $4,715 $5,311 $5,909 $6,035 $6,164 EXPENSES Baseline Expenses $4,230 $4,315 $4,401 $4,489 $4,579 $4,671 Seawall Bus Routes 0 400 410 420 431 442 Trolley Operations 0 0 500 1,000 1,025 1,051 TOTAL EXPENSES $4,230 $4,715 $5,311 $5,909 $6,035 $6,164 REVENUE OVER/(UNDER) EXPENSE ($40) $0 $0 $0 $0 $0 ENDING BALANCE $0 $0 $0 $0 $0 $0 23
  24. 24. ISLAND TRANSIT CAPITAL RESERVE FUND LONG RANGE FINANCIAL FORECAST FY 2017-2021 ($000'S) CATEGORIES FY 2016 Estimate FY 2017 Forecast FY 2018 Forecast FY 2019 Forecast FY 2020 Forecast FY 2021 Forecast BEGINNING BALANCE $722 $558 $324 $223 $127 $37 REVENUE Victory Lakes Service (25% of Income) $263 $268 $274 $279 $285 $290 General Fund IT Capital Setaside 100 100 100 100 100 100 Insurance Proceeds Trolley Car and Barn Match (Insurance) 232 0 0 0 0 0 Subtotal Insurance Proceeds 232 0 0 0 0 0 Hotel Occupancy Tax (Convention Center Surplus) Seawall Improvement Ph II Match (HOT) 466 0 0 0 0 0 Trolley Track Rehab 218 0 0 0 0 0 Trolley Car Repair Project Match (HOT) 0 628 0 0 0 0 Trolley Barn Project Match (HOT) 0 58 0 0 0 0 Subtotal HOT Revenue 684 686 0 0 0 0 TOTAL REVENUE $1,279 $1,054 $374 $379 $385 $390 LOCAL MATCH FOR FEDERAL GRANT FUNDED PROJECTS Seawall Improvement Phase II $466 $0 $0 $0 $0 $0 Island Transit Technology Upgrade 0 100 0 0 0 0 Trolley Track Rehab 218 0 0 0 0 0 Trolleys Rehab 0 655 0 0 0 0 Trolley Barn 0 58 0 0 0 0 Bus Wash 196 0 0 0 0 0 Downtown Pedestrian Facilities and Safety 413 0 0 0 0 0 ADA Compliant Sidewalk and Curb Project 60 0 0 0 0 0 Bike lane Project 90 0 0 0 0 0 Future Capital Grant Projects Match 0 0 0 0 0 0 SUBTOTAL LOCAL MATCH $1,443 $813 $0 $0 $0 $0 FLEET REPLACEMENT $0 $475 $475 $475 $475 $475 TOTAL MATCH AND FLEET REPLACEMENT $1,443 $1,288 $475 $475 $475 $475 REVENUE OVER/(UNDER) EXPENSE ($164) ($234) ($101) ($96) ($90) ($85) ENDING BALANCE $558 $324 $223 $127 $37 ($48) 24
  25. 25. Questions and Discussion25
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