FY 2020-21 Budget Workshop (July 27)

1. BUDGET WORKSHOPS – DAY 1 General Fund O&M July 27, 2020 City of College Station

2.  Budget Process Overview  Revenue Overview  Expenditure –FTE Reductions  Expenditure Reductions  Summary / Review and Future Years  Proposed Property Tax Rate Discussion AGENDA – BUDGET WORKSHOPS – DAY 1 THE GENERAL FUND

3. BUDGET PROCESS OVERVIEW City of College Station

4. Covid 19 overshadowed Council’s strategic objectives from January However, we were able to include several: Assess opportunities to review local options for property tax levy Plan for a future bond election Seek grants and other outside funding Update the Capital Improvements Program Examine ways to enhance neighborhood parks for residents and visitors 4 STRATEGIC PLAN OBJECTIVES

5. 5 STRATEGIC PLAN OBJECTIVES We focused on the City’s Core Value of Financial Sustainability O&M Objectives Achieved • Balanced budget with a diversity of revenue sources • Seek grants and other outside funding • TDEM, Cares, Families First, HUD etc. not reflected until awarded • Developed off of current worst case sales tax scenario • Reflects reduction of compensation expense of ($2,881,000) • Reflects reduction of services and other expenses ($2,492,000) Capital Objectives Achieved • The city will endeavor to maintain or improve its current bond ratings • Outlook upgraded to Stable outlook • 1.85% new money and .95% refunding interest rates

6. Special Council Meetings Council Strategic Planning Meeting Budget & Finance Committee Meetings Tax Office No New Revenue and Voter Approval Rate Provided to City Council Meeting Proposed Ad Valorem Tax Rate and Budget Public Hearings Council Meeting FY21 Budget Adoption FY21 Tax Rate Adoption FY21 Fee Ordinance Adoption 6 August 27th August 13th July 29th (earliest date) July 27th thru July 29th February / March / April / May BUDGET DEVELOPMENT CALENDAR Budget Workshops Call Tax Rate Public Hearings

7. PROPOSED NET BUDGET SUMMARY 7 FY21 Proposed Net Budget Summary Fund Type FY 21 Proposed Net Budget % Change from FY20 Governmental Funds $ 100,582,186 -4.32% Enterprise Funds 145,679,212 -0.19% Special Revenue Funds 19,618,837 3.75% Subtotal O&M $ 265,880,235 -1.52% Cash used for Capital Projects 16,870,000 26.78% Capital Projects 29,871,652 -48.38% Subtotal Capital $ 46,741,652 -34.32% Total Net Budget $ 312,621,887 -8.37%

8. GENERAL FUND REVENUES City of College Station • Executive Summary

9. 9 POPULATION - CITY AND STUDENT - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 2015 2016 2017 2018 2019 Spring 2020* Population CITY STUDENT Planning estimates City population from new development permits • 2020 City Growth 0.83% • Future Growth expected to slow Texas A&M Data Services publishes enrollment information for all campus • Fall enrollment growth 0.27% • Average of 88.0% of students are off campus

10. 37.4% 31.3% 18.7% 2.7% 8.1% 1.7% Ad Valorem Taxes Sales Tax Utility Transfer Other Taxes Licenses, Permits, Fines, Charges & Permits Other PERCENTAGE OF REVENUE 10

11. 11 The highest estimate dollar value of permits was in 2016 • ~2 year lag in permit value year and actual value on the tax rolls • Largest tax roll increases are in FY18 and FY19 Increase in 2018 permits is current year new value • $156 million in new taxable value • Increase is in residential BUILDING PERMITS AND FUTURE GROWTH $- $100 $200 $300 $400 $500 $600 - 500 1,000 1,500 2,000 2,500 3,000 2015 2016 2017 2018 2019 2020* Millions Number of Construction Permits Commercial Residential Other Value 0 50 100 150 200 250 300 350 400 450 2018 2019 2020 prelim 2021 est 2022 est MILLIONS$ New Ad Valorem Valuations

12. 12 2.05% overall increase in taxable value over last year • Existing value increase is 0.47% • New Value increase 1.58% $1.04 billion still under review $156 million in new taxable value PROPERTY TAX ASSUMPTIONS 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 0 2,000 4,000 6,000 8,000 10,000 12,000 2015 2016 2017 2018 2019 2020 prelim MILLIONS$ City of College Station Ad Valorem Valuations Total Taxable Value % Change in Total Value

13. PROPOSED TAX RATES Rates above are stated cents per $100 assessed valuation Property Values 1 cent = approx. $800,000 Current Rate Change Proposed FY21 Debt Service Fund 22.1444 (0.5000) 21.6444 General Fund 31.3174 0.5000 31.8174 53.4618 0.0000 53.4618 No New Revenue Rate TBD Voter Approval Rate TBD 13

14. 14 FY20 YEE is projected under budget by ($1.3M) or (4.3%) FY21 is Projected ($1.7 to $4.6M) or (6%-16%) below FY20 • FY21 Budget is based off worst case of three scenarios • Scenarios developed with help of data analytics firm SALES TAX ASSUMPTIONS 8.59% 1.87% 5.01% 1.12% 4.05% -5.79% -11.51% -13.0% -8.0% -3.0% 2.0% 7.0% 12.0% FY15 FY16 FY17 FY18 FY19 FY20* FY21* Year over Year Sales Tax Change $29.5 $30.7 $29.0 $25.6 $27.7 $28.8 $29.7 $30.3 15.0 20.0 25.0 30.0 35.0 FY18 FY19 FY20* FY21* FY22* FY23* FY24* FY25* Millionsof$ Sales Tax Revenue

15. 15 UTILITY TRANSFER Utility Transfer • Increase Electric from 8% to 9% • Increase collection on other utilities to policy of 10% • Total dollar increase of $1.5M

16. OTHER REVENUES 0 2,000 4,000 6,000 8,000 Other Taxes Licenses, Permits, Fines, Charges & Permits Other Thousands FY20 Year-End Expectation FY21 Proposed Budget • Other taxes is franchise fees for the use of right of ways • Building permits and Court fines are adjusted for decreased activity and COVID-19 • Other in FY20 includes sale of land of $1.4M 16

17. QUESTIONS / DISCUSSION / DIRECTION City of College Station

18. GENERAL FUND EXPENDITURES City of College Station • Department Summaries

19. EXPENDITURES BY DEPARTMENT Police Dept 28% Fire Dept 24% Public Works Dept 9% Parks & Recreation Dept 12% Planning & Development Sv Dept 5% Information Technology Dept 7% Fiscal Services Dept 5% General Government Dept 10% 19

20. HEADCOUNT REDUCTIONS 9.68 9.36 8.97 8.88 8.77 8.71 8.33 8.45 8.32 8.38 7.88 7.50 8.00 8.50 9.00 9.50 10.00 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Proposed 2021 * Total FTEs per 1,000 Population 20

21. HIRING FREEZE PROCESS .. Position becomes Vacant Supervisor reviews impact and need for Position Supervisor submits Critical Hire Staffing Form to Director Director submits signed form and position justification to CMO for Approval Copy HR on Email CMO reviews and Approves or Denies Request CMO submits signed form to Fiscal Services Director to verify Funding 1 2 3 4 5 6 7 HR receives completed form indicating denial, delay, or approval If approved HR will initiate Recruiting Process Critical Hire Staffing Request 21

22. 22 EXPENSE REDUCTIONS Function Police Fire Public Works Parks Supplies $ 80,000 $ 9,000 $ 6,000 $ 101,000 Maintenance 11,000 (21,000) 189,000 43,000 Professional Services 23,000 48,000 - 67,000 Other Purchased Services 122,000 19,000 2,000 88,000 Travel/Training 18,000 90,000 28,000 - Misc (5,000) 5,000 - 12,000 Grand Total $ 249,000 $ 150,000 $ 225,000 $ 311,000

23. 23 EXPENSE REDUCTIONS Function Planning IT Finance Courts Supplies $ 24,000 $ 32,000 $ 3,000 $ 2,000 Maintenance (3,000) 142,000 - - Professional Services 89,000 10,000 4,000 1,000 Other Purchased Services 61,000 (51,000) 1,000 1,000 Travel/Training 18,000 - 1,000 1,000 Misc 9,000 7,000 1,000 1,000 Grand Total $ 198,000 $ 140,000 $ 10,000 $ 6,000

24. 24 EXPENSE REDUCTIONS – GENERAL GOVERNMENT Function CIP City Manager City Secretary Community Services Economic Development Supplies $ 3,000 $ 13,000 $ 1,000 $ 2,000 $ 2,000 Maintenance - - - - - Professional Services - 4,000 - - 25,000 Other Purchased Services - - - 5,000 2,000 Travel/Training 13,000 11,000 8,000 6,000 - Misc 1,000 - - 6,000 - Grand Total $ 17,000 $ 28,000 $ 9,000 $ 19,000 $ 29,000

25. 25 EXPENSE REDUCTIONS – GENERAL GOVERNMENT Function HR Internal Audit Legal Mayor & Council Public Communications Supplies $ (1,000) $ - $ 1,000 $ - $ 10,000 Maintenance - - - - - Professional Services - 18,000 - - - Other Purchased Services - - - - 7,000 Travel/Training 4,000 - 9,000 9,000 - Misc - - 36,000 - 1,000 Grand Total $ 3,000 $ 18,000 $ 46,000 $ 9,000 $ 18,000

26. 26 Departmental Travel, Training, Supplies and Other Reductions EXPENSE REDUCTIONS Supplies 682,000 Maintenance 280,000 Professional Services 638,000 Travel/Training 447,000 Transportation 78,000 Other Purchased Services 248,000 Direct Capital Contribution 42,000 Misc. 77,000 GRAND TOTAL (2,492,000)

28. 28 FIVE YEAR FORECAST (000's) FY20 YEE FY21 FY22 FY23 FY24 FY25 Beginning Fund Balance Assigned & Unassigned $ 24,329 $ 24,440 $ 25,269 $ 26,183 $ 26,218 $ 26,984 Revenues 83,802 82,616 83,934 85,938 88,415 90,814 Operating Expenses 86,033 85,993 87,048 88,808 90,627 90,647 Transfers In/Out (9,010) (9,434) (6,869) (7,068) (7,274) (7,485) Other Uses/(Sources) 5,043 5,228 2,840 4,163 4,295 4,521 Total Expenditures 82,066 81,788 83,020 85,903 87,648 87,683 Measurement Focus Inc (Dec) (1,626) - - - - - Surplus/(Deficit) $ 112 $ 829 $ 914 $ 35 $ 767 $ 3,131 Assigned Fund Balance 5,174 7,637 7,721 7,837 8,157 8,644 Ending Unassigned Fund Balance $ 19,267 $ 17,632 $ 18,463 $ 18,382 $ 18,828 $ 21,472 Unassigned Reserve % 23.48% 21.59% 21.36% 20.70% 20.79% 23.80%

29. 29 ENDING UNASSIGNED FUND BALANCE PERCENTAGE 33.7% 25.8% 30.7% 30.2% 23.5% 21.6% 21.4% 20.7% 20.8% 23.8% 15.0% 20.0% 25.0% 30.0% 35.0% FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

30. 30 Currently able to project a balanced budget in FY22 in spite of anticipated revenue declines • Ad Valorem = projecting a (2.00%) decrease in valuations for COVID effect • Sales Tax estimate projecting recovery – still below FY20’s projected year end estimate Strategies to offset include continuing mitigation strategies from FY21: • Utility Transfer increase continues • Continuation of hiring freeze at some level • Continuation of departmental expense reductions at some level Should these decreases continue beyond FY21, there will be significant service level reductions that will be implemented that could possibly include public safety, public works, parks programming, utility services, and other City services. FY22 BUDGET OUTLOOK

32. PROPOSED TAX RATES Rates above are stated cents per $100 assessed valuation Property Values 1 cent = approx. $800,000 Current Rate Change Proposed FY21 Debt Service Fund 22.1444 (0.5000) 21.6444 General Fund 31.3174 0.5000 31.8174 53.4618 0.0000 53.4618 No New Revenue Rate TBD Voter Approval Rate TBD 32

33. AGENDA FOR TOMORROW  Enterprise Funds • Electric • Water / Wastewater • Solid Waste • Northgate Parking  Capital Projects • General Government Funded • Utility Funded • Debt Service Fund  Special Revenue Funds  Internal Service Funds 33

FY 2020-21 Budget Workshop (July 27)

FY 2020-21 Budget Workshop (July 27)

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FY 2020-21 Budget Workshop (July 27)