City Council

Exhibit "A" FY22 Budget Workshop June 8, 2021 Overview Comments by: Sam A. Listi City Manager 1 Overview Comments • Today is the first session on the FY ‘22 Annual Operating Budget, following meetings with Department Heads and Strategic Plan session in May. • Budget uncertainties from COVID-19 not as dramatic in FY ‘22, given positive growth signs; possible lingering effects. • Revenue sources for FY ‘22 appear to be stabilizing, aiding budget development. • Personnel services cost are increasing due to salary, health insurance, and retirement expenses. 2 2 1  Overview Comments • Revenue projections for property taxes reflect a 7.2% increase in value based on a stable $0.63 tax rate (preliminary). • Projections for sales tax reflect a 6% increase over the year-end estimate for FY ‘21. • Favorable Council input this Spring on FD and PD personnel changes, 15% increased health insurance cost, civil service and merit adjustments, and TMRS for a full year, add $977,000 to GF personnel costs. 3 3 Overview Comments • Other key objectives included in the proposed budget: – Resiliency measures from the winter storm after-action report – Additional part-time support in Parks – An external comprehensive personnel study – Street maintenance funding at a base amount of $500,000 – Continued funding of capital equipment replacement fund 4 4 2  Overview Comments • With Department Goals presented at the May 26 Strategic Plan Session, Department Heads will be available for Q&A on their budgets. • An analysis of Belton’s Fund Balance Policy is in development for presentation soon. • American Rescue Plan Funding (ARP) opportunities will be presented when final guidance emerges from the State. 5 5 FY22 Budget Workshop June 8, 2021 Presented by: Michael Rodgers, CPA Director of Finance 6 3  Funds To Be Discussed • General Fund • Debt Service Fund • Information Technology Fund • Building Maintenance Fund • Hotel / Motel Fund 7 7 General Fund Forecast for FY 2021 FY 2021 FY 2021 Amended Year-End Budget Estimate Revenue $ 15,879,702 $ 16,093,353 * Expenditures (16,759,269) (16,259,126) Incr/(Decr) to Reserve $ (879,567) $ (165,773) * The originally adopted expenditure budget for FY 2021 was $15,381,769 8 8 4  Forecast for FY 2021 • Total revenue is over budget due to – Permitting receipts – Sales tax – Property tax payments • Expenditures are under budget due to – Fewer public safety retirements – Contingencies / pay plan changes 9 9 General Fund FY22 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2021 $ 6,962,824 Increases/(Decreases) to Fund Balance: FY22 Revenue 16,886,840 FY22 Expenditures (16,750,480) Net Increase/(Decrease) to Fund Balance 136,360 Spendable Fund Balance, Sept 30, 2022 $ 7,099,184 10 10 5  Status of General Fund Reserves FY15 to FY22 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2015 2016 2017 2018 2019 2020 2021 2022 Unassigned Reserve Balance Minimum Reserve Requirement 11 11 Budget to Budget Comparison by Revenue Category General Fund FY21 FY21 FY22 Budget Revenue Category Budget Estimate Budget Inc / (Dec) Property Tax $ 6,313,269 $ 6,404,957 $ 6,822,850 $ 509,581 Sales Tax 4,511,000 4,563,811 4,837,640 326,640 Franchise & Other Tax 1,276,149 1,223,624 1,215,210 (60,939) Permit Fees 246,628 350,346 294,480 47,852 Court Fines & Fees 302,550 278,104 306,730 4,180 Charges for Service 2,447,738 2,557,156 2,713,350 265,612 Miscellaneous 180,165 127,024 138,450 (41,715) Transfers 602,203 588,331 558,130 (44,073) Total Revenue $15,879,702 $16,093,353 $16,886,840 $1,007,138 12 12 6  FY22 General Fund Revenue Property tax $ 6,822,850 Sales tax 4,837,640 Franchise fees, 9% Service charges 2,713,350 Property tax, 44% Franchise fees 1,215,210 Service charges, Transfers 558,130 13% Court fines & fees 306,730 Sales tax, 22% Permits 294,480 Property tax Sales tax Service charges Miscellaneous 138,450 Franchise fees Miscellaneous Transfers Total $16,886,840 Court fines Permits 13 13 FY22 Property Tax Revenue • Preliminary adjusted taxable value increases by 7.2% to $1,529,948,477 • Preliminary proposed property tax rate is 63 cents • Revenue may increase by $509,000 with about $200,000 coming from new properties that were added to the tax roll 14 14 7  Property Tax History FY15 to FY22 FY O&M TIRZ Debt $10,000,000 $9,000,000 2015 $4,396,492 $ 582,394 $ 947,536 $8,000,000 $7,000,000 2016 $4,613,688 $ 670,769 $1,090,922 $6,000,000 2017 $4,816,716 $ 728,568 $1,074,343 $5,000,000 $4,000,000 2018 $5,212,685 $ 806,821 $ 990,961 $3,000,000 $2,000,000 2019 $5,568,951 $ 901,067 $ 934,987 $1,000,000 2020 $6,214,755 $1,155,204 $ 964,758 $0 2021Projected $6,404,957 $1,421,888 $1,217,744 2022Budget $6,822,850 $1,757,200 $1,213,020 O&M TIRZ Debt 15 15 Sales Tax History FY15 to FY22 $5,000,000 FY Revenue 2015 $3,205,410 $4,500,000 2016 $3,155,659 $4,000,000 2017 $3,276,982 $3,500,000 2018 $3,510,104 2019 $3,573,712 $3,000,000 2020 $4,085,122 $2,500,000 2021Projected $4,563,811 $2,000,000 2022Budget $4,837,640 2015 2016 2017 2018 2019 2020 2021 2022 16 16 8  FY22 Other General Fund Revenue • Refuse collection and contract fees increase by $215,000 as the number of customers continues to grow • Franchise fee revenue is reduced to reflect recent averages and the loss of certain telecom fees • Interest income falls by $35,000 as yields remain low 17 17 FY22 General Fund Expenditures by Function Solid General Waste, Govt, Function FY22 Budget 11% 11% General government $ 1,878,930 Culture & Public safety $ 8,251,550 Rec, 12% Streets $ 1,629,610 Planning $ 605,640 Public Culture & recreation $ 2,062,740 Streets, Safety, 49% 10% Solid waste $ 1,799,210 Maintenance services $ 522,800 General Govt Public Safety Streets Total $ 16,750,480 Planning Culture & Rec Solid Waste Maintenance 18 18 9  Budget to Budget Comparison by General Fund Division FY21 General Fund FY21 FY22 Budget Amended Division Estimate Budget Inc / (Dec) Budget City Council $ 82,250 $ 75,738 $ 235,950 $153,700 City Management 505,472 509,064 629,570 124,098 Public Information 55,292 57,839 60,450 5,158 Retail Development 42,457 39,057 44,570 2,113 Finance 399,944 387,313 378,210 (21,734) Human Resources 230,665 210,605 291,530 60,865 Municipal Court 237,874 232,902 238,650 776 PD Administration 360,050 339,824 371,830 11,780 PD Patrol 3,118,742 3,005,767 3,315,850 197,108 PD Support Services/CID 1,179,994 1,090,525 1,383,010 203,016 19 19 Budget to Budget Comparison by General Fund Division FY21 General Fund FY21 FY22 Budget Amended Division Estimate Budget Inc / (Dec) Budget PD Animal Control $ 102,747 $ 97,827 $ 103,230 $ 483 PD Code Enforcement 78,290 78,268 80,790 2,500 FD Suppression 2,920,255 2,872,655 2,996,840 76,585 Streets 2,085,626 2,410,020 1,490,530 (595,096) Rec Maintenance 1,103,306 1,104,100 1,129,210 25,904 Rec Community Center 219,585 211,486 216,540 (3,045) Rec Recreation 196,696 182,313 217,950 21,254 Planning 193,390 140,365 239,890 46,500 Inspections 324,058 304,865 337,980 13,922 GIS 27,511 20,164 27,770 259 20 20 10  Budget to Budget Comparison by General Fund Division FY21 General Fund FY21 FY22 Budget Amended Division Estimate Budget Inc / (Dec) Budget Library $ 495,836 $ 481,758 $ 499,040 $ 3,204 Other Costs 575,651 197,901 0 (575,651) Solid Waste Collection 1,433,262 1,501,889 1,657,710 224,448 Solid Waste Brush 119,485 107,630 141,500 22,015 Fleet Maintenance 497,198 468,337 522,800 25,602 Engineering 173,633 130,914 139,080 (34,553) Total Expenditures $16,759,269 $16,259,126 $16,750,480 $ (8,789) The originally adopted budget for FY 2021 was $15,381,769 21 21 FY22 General Fund Expenditures by Category Personnel $ 9,931,740 Supplies 535,860 Services, 27% Maintenance 865,100 Services 4,444,040 Personnel, 59% Other Costs 240,650 Capital Outlay 0 Transfers 733,090 Personnel Supplies Maintenance Services Other Costs Capital Outlay Total $16,750,480 Transfers 22 22 11  Budget to Budget Comparison by Expenditure Category General Fund FY21 FY21 FY22 Budget Expenditure Amended Category Estimate Budget Inc / (Dec) Budget Personnel $ 9,279,802 $ 9,009,674 $ 9,931,740 $ 651,938 Supplies 583,969 518,659 535,860 (48,109) Maintenance 1,088,917 1,054,015 865,100 (223,817) Services 4,065,766 3,952,418 4,444,040 378,274 Other Costs 575,651 197,901 240,650 (335,001) Capital Outlay 80,495 85,790 0 (80,495) Transfers 1,084,669 1,440,669 733,090 (351,579) Totals $ 16,759,269 $ 16,259,126 $ 16,750,480 $ (8,789) The originally adopted budget for FY 2021 was $15,381,769 23 23 Significant Changes • Personnel costs increase by $977,000 with the following – PD and FD rank structure changes $281,000 – Civil service step increases $159,000 – Non-civil service merit up to 3% $196,000 – Health insurance premiums up 15% $164,000 – Payroll taxes and retirement $177,000 24 24 12  Significant Changes • Clothing expenditures in Fire Suppression decrease by $105,840 after the purchase of bunker gear in FY 2021 • Appropriations for the annual street maintenance program stabilizes at $500,000 compared to the $750,000 supplemental appropriation in FY 2021 • Refuse collection costs increase by $210,957 due to a growing customer base 25 25 Significant Changes • Consulting fees increase by $59,000 to perform a compensation study and to update the ten-year historic district study • Appropriations for contingencies/pay plan changes are reclassified into division budgets • Capital expenditures decrease by $80,000 after the acquisition of assets during FY 2021 • Capital project and equipment transfers decline $426,500 from the amended amount in 2021 26 26 13  Debt Service Fund FY22 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2021 $ 73,237 Increases/(Decreases) to Fund Balance: FY22 Revenue 1,213,020 FY22 Expenditures (1,180,870) Net Increase/(Decrease) to Fund Balance 32,150 Spendable Fund Balance, Sept 30, 2022 $ 105,387 27 27 Outstanding Debt as of October 1, 2021 Outstanding Bond Issuance Description Amount General Obligation Bonds, Series 2003 $ 390,000 General Obligation Bonds, Series 2005 $ 830,000 Certificates of Obligation, Series 2008 $ 653,400 Certificates of Obligation, Series 2015 $ 795,000 G.O. Refunding Bonds, Series 2017 $ 1,015,000 Certificates of Obligation, Series 2018 $ 2,100,000 G.O. Refunding Bonds, Series 2019 $ 4,450,000 Tax-Supported Debt Outstanding $ 10,233,400 28 28 14  Annual Debt Service Payments on Tax-Supported Debt $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Interest Principal 29 29 Information Technology Fund FY22 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2021 $ 47,648 Increases/(Decreases) to Fund Balance: FY22 Revenue 893,300 FY22 Expenditures (838,200) Net Increase/(Decrease) to Fund Balance 55,100 Spendable Fund Balance, Sept 30, 2022 $ 102,748 30 30 15  Information Technology Fund Expenses by Category Personnel $203,130 Personnel 24% Supplies 127,140 Maintenance 411,490 Services 96,440 Capital Outlay 0 Maintenance 49% Total $838,200 Personnel Supplies Maintenance Services Capital Outlay 31 31 Significant Changes • Small equipment expenses increase by $56,000 to purchase several computers for police in accordance with the computer replacement plan • Computer system maintenance costs increase by $60,000 due to new software purchases and licensing • Capital outlay falls by $182,500 after the purchase of several copiers and servers in FY21 as well as the completion of a fiber installation project 32 32 16  Building Maintenance Fund FY22 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2021 $ 59,636 Increases/(Decreases) to Fund Balance: FY22 Revenue 458,150 FY22 Expenditures (418,890) Net Increase/(Decrease) to Fund Balance 39,260 Spendable Fund Balance, Sept 30, 2022 $ 98,896 33 33 Building Maintenance Fund Expenses by Category Personnel $289,600 Maintenance 17% Supplies 31,710 Maintenance 69,610 Services 13,690 Transfers 14,280 Total $418,890 Personnel 69% Personnel Supplies Maintenance Services Transfers 34 34 17  Significant Changes • Personnel costs increase by $44,730 due to position changes and modifications to the salary allocation schedule • HVAC expenses decrease by $66,380 after replacing several units in FY 2021 35 35 Hotel / Motel Fund FY22 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2021 $ 386,772 Increases/(Decreases) to Fund Balance: FY22 Revenue 183,100 FY22 Expenditures (180,070) Net Increase/(Decrease) to Fund Balance 3,030 Spendable Fund Balance, Sept 30, 2022 $ 389,802 36 36 18  Hotel / Motel Fund Expenditures by Category Personnel $ 32,530 Supplies 100 Services Services 43,940 Sponsorship, 24% SSP 78,500 Support & Preservation 44% Transfers 25,000 Total $180,070 Personnel Supplies Services Sponsorship, Support & Preservation Transfers 37 37 Significant Changes • Tax revenue reaches pre-COVID levels at $181,580 • Marketing expenditures increase by $16,700 to purchase signage and advertising • Tourism sponsorship grows by $12,500 to $62,500 • Visitor Center support remains at $12,500 • Hotel/Motel funding for historical preservation efforts (Standpipe) deferred until FY23 38 38 19  In Summary • A growing property tax base provides sufficient resources to sustain current service levels • Sales tax revenue continues to rise • General Fund budget includes – Public safety operational enhancements – Merit adjustments up to 3% for employees – Annual street maintenance funding of $500,000 – Contributions to other agencies totaling $140,650, including $25,000 to Belton Area Citizens for Seniors and $30,000 to Hill Country Transit District 39 39 In Summary • Debt service remains stable at $1.2 million • The internal service funds provide services for FY 2022 with limited cost increases • Hotel/Motel Fund revenue has reached pre- pandemic levels 40 40 20  Upcoming Budget Related Items • Water/Sewer Fund • Drainage Fund • BEDC • TIRZ Fund • Five-Year Capital Improvements Program • Strategic Plan • Budget Calendar 41 41 Questions/Comments? 42 42 21