HomeMy WebLinkAboutSpecial 2011-11-21 Item 2 - Attachment AAgenda Item II
Attachment A
Memo from Peggy McCarthy: Proposed 2012 -2017 Financial Planning Model CIP
Attachment A
Attachment A: Footnotes
Attachment B
Attachment G
Attachment G: Footnotes
Page 24 of 49
Page 25 of 49
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
Councilmembers
FROM: Peggy McCarthy, Interim Finance Director
DATE: November 18, 2011
SUBJECT: Proposed 2012 -2017 Financial Planning Model and Capital
Improvement Program
ISSUE
Consider for approval the Proposed 2012 -2017 Financial Planning Model and Capital Improvement
Program.
1 20] :0]L110111]
Each year the Financial Planning Model and Capital Improvement Program is updated. A draft of
the model was distributed at the October 3 rd Regular meeting and the CIP projects were reviewed at
an October 25 Budget /CIP Workshop. The November 21 workshop will provide Council an
opportunity to further review the CIP projects and to review the Financial Planning Model.
DISCUSSION
Certain comments on the model follow.
Attachment A:
1. Gambliu tax revenue has been extended through 2017. The voters indicated through the
November 8 advisory vote their desire to retain gambling in the City. In anticipation of possible
Council action repealing Ordinance 2323, gambling tax is shown as a revenue source in 2016 and
2017.
2. The one -time sale of property was reduced to $1M and moved to 2013. It represents one
property the City currently is considering for sale during this period.
4. The model excludes the loan to the Park District with disbursements in 2012 and 2013 the
subsequent payback starting in 2013 since the financial effect on the six -year period will be less than
$500K.
5. The estimated unfunded PERS remains as a line item in the model but funds for this contingency
are not currently being set aside. An option for funding this contingency would be to include it as an
element of the Reserve Fund and increase the Reserve Fund funding requirements.
6. Various line items were revised to reflect the November 14 Council decisions regarding the Golf
Course Fund financial protocols.
Page 26 of 49
INFORMATIONAL MEMO
Page 2
7. Based on the model, at the end of the six -year period the ending fund balance of the
governmental funds totals $2.725M and of the Reserve Fund totals $8.2M.
Attachment B:
1. The projections for the Parks Recreation operations and maintenance expenditures were
increased to reflect the effect of the Council decisions on the Golf Course Fund financial protocols.
2. The schedule includes a transfer to the Golf Course Fund of $575K comprised of existing
budget of $225K and proposed budget of $350K. This amount is a place holder in case such
transfers are needed to provide working capital for the golf course. The amount will revert back to
fund balance if not needed and not used.
Attachment G:
1. The 2011 estimate reflects a reduction in greens fees and concession proceeds stemming from a
closer analysis of year to date actual results. The green fees are considerably lower than the actual
fees earned in 2010 and 2009 due to the unusually wet and cold weather experienced in several
months in 2011.
2. The greens fee estimate for 2012 is conservative and is based on 2011 estimated results and the
fee increase that will go into effect January 1, 2012. The conservative estimate assumes the 2012
weather will be similar to 2011. Hopefully this will not be the case and the weather will be much
warmer and drier in 2012 than it was in 2011.
3. The reduction in revenue estimates negatively impacts the model's net cash flow for the six -year
period. The $575K transfer -in place holder is reflected in the model, consistent with its inclusion in
Attachment B, in case funds are needed to provide working capital.
4. Carryover from 2011 currently modeled at $328K, represents working capital comprised of course
maintenance and pro shop inventories of $270K and refundable deposits of $50K. The golf course
unrestricted cash and investment balance at the end of 2011 is estimated to be approximately $20K.
Both the operational and financial policies regarding the inventory levels will be reviewed during
2012.
RECOMMENDATION
The Council will be asked to consider the Proposed 2012 -2017 Financial Planning Model and
Capital Improvement Program at the November 28 Committee of the Whole meeting and to forward
this item to the December 5 th Regular meeting for approval.
ATTACHMENTS
Attachment A with notes
Attachment B
Attachment G with notes
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VV FIN Projects\Council Agenda Items \Workshop 11- 21- 11VnfoMemo_Financial Planning Model.doc
ATTACHMENT A
CITY OF TUKWILA
TOTAL REVENUES EXPENDITURES
2012 2017 Analysis in 000's
2013 2014
16,492 16,739
14,215 14,570
4,985 5,135
1,512 1,550
1,000 0
1,545 1,628
2,577 2,654
2,112 2,175
4,294 4,423
1,706 1,757
836 861
1,657 1,707
52,930 53,199
206 212
355 366
133 137
67 68
114 118
875 901
53,806 54,100
47,010 49,125
6,037 3,130
2,100 2,100
835 868
318 328
(2,494) (1,450)
0 200
2,550 1,935
338 142
(4,355) 0
500 500
0 0
(967) 2,777
(1,527) (4,227)
0 0
18,860 14,632
6,100 8,200
2015
17,241
14,934
5,289
1,588
0
1,741
2,734
2,240
4,556
1,810
887
1,758
54,779
219
377
141
70
121
928
55,706
51,336
2,643
0
903
338
487
500
2,865
142
0
500
0
4,007
(3,520)
0
11,112
2012 2017 Financial Planning Model Vi l
2016
17,759
15,308
5,447
1,628
0
1,820
2,816
2,307
4,692
1,864
914
1,811
56,366
219
377
141
72
125
933
57,299
53,646
2,414
0
939
338
(37)
2,800
1,945
(58)
0
500
(50)
5,137
(5,174)
0
5,938
2017 Totals
18,291 102,770
15,690 88,585
5,611 31,307
1,669 9,422
0 1,000
1,907 10,165
2,901 16,184
2,377 13,260
4,833 26,967
1,920 10,712
941 5,252
1,865 10,408
58,005 326,032
225 1,280
388 2,209
145 826
74 415
129 718
961 5,448
58,966 331,480
56,060 302,736
2,406 19,909
0 6,700
939 5,287
348 1,978
(787) (5,130)
0 4,150
2,035 7,561
(54) 1,629
0 (4,255)
500 5,215
(55) (155)
2,426 14,145
(3,213) (19,275)
0 22,000
2,725
8,200
Page 28 of 49
1111812011
2009
2010
2011
2011
REVENUES (see A -1)
Actual
Actual
Budget
Estimate
2012
General Revenues
Sales Tax
14,739
16,060
15,400
16,200
16,248
Property Taxes
12,190
13,189
13,530
13,800
13,868
Utility Taxes
4,942
4,064
4,723
4,800
4,840
RGRL
1,900
1,465
1,475
One -time sale of property
700
10
0
Interfund Utility Taxes
1,813
1,498
1,426
1,500
1,524
Gambling Taxes
2,568
2,110
2,586
2,400
2,502
Contract Agreement SCL
1,967
2,071
2,000
2,000
2,050
Charges /Fees for Services
2,727
3,985
4,338
4,345
4,169
Transfers In -Other Funds
1,857
1,696
1,475
1,837
1,656
Intergovernmental Revenue
3,572
1,189
872
949
812
Other Taxes /Miscellaneous
2,793
2,386
2,432
2,400
1,609
Subtotal
49,168
48,248
51,382
51,706
50,753
Dedicated Revenues (Capital)
Real Estate Taxes
257
379
201
250
200
Motor Vehicle Taxes
393
394
339
360
345
Investment Interest /Misc.
136
62
18
100
129
Property Taxes
12
0
64
99
65
Parking Taxes
156
144
108
133
111
Subtotal
954
979
730
942
850
TOTAL REVENUE AVAILABLE
50,122
49,227
52,112
52,648
51,603
EXPENDITURES
Operations Maintenance:
44,641
43,640
45,335
44,100
45,560
(See Attachment B)
Debt Service
2,094
2,331
2,925
2,750
3,279
Transfer to Reserve Fund
0
0
400
1,500
2,500
Estimated Unfunded PERS
0
0
0
0
803
Admin /Engineering Overhead
497
552
384
515
309
Subtotal Available
2,890
2,704
3,068
3,783
(848)
Capital Attachment C
Residential Streets
0
32
(80)
20
650
Arterial Streets /Bridges
5,560
1,202
2,705
2,000
(3,769)
Parks Trails
0
315
590
(43)
1,119
General Government
Facilities
193
16
101
10
100
General Imp /HHD Response
2,612
1,740
2,144
326
2,715
Fire Improvements
0
0
0
(50)
(50)
Subtotal Capital
8,365
3,305
5,460
2,263
765
Balance by Year
(5,475)
(601)
(2,392)
1,520
(1,613)
Carryover from 2011
26,556
21,082
18,640
20,480
22,000
Accumulated Totals
21,081
20,481
16,248
22,000
20,387
Reserve fund balance
1,500
4,000
2013 2014
16,492 16,739
14,215 14,570
4,985 5,135
1,512 1,550
1,000 0
1,545 1,628
2,577 2,654
2,112 2,175
4,294 4,423
1,706 1,757
836 861
1,657 1,707
52,930 53,199
206 212
355 366
133 137
67 68
114 118
875 901
53,806 54,100
47,010 49,125
6,037 3,130
2,100 2,100
835 868
318 328
(2,494) (1,450)
0 200
2,550 1,935
338 142
(4,355) 0
500 500
0 0
(967) 2,777
(1,527) (4,227)
0 0
18,860 14,632
6,100 8,200
2015
17,241
14,934
5,289
1,588
0
1,741
2,734
2,240
4,556
1,810
887
1,758
54,779
219
377
141
70
121
928
55,706
51,336
2,643
0
903
338
487
500
2,865
142
0
500
0
4,007
(3,520)
0
11,112
2012 2017 Financial Planning Model Vi l
2016
17,759
15,308
5,447
1,628
0
1,820
2,816
2,307
4,692
1,864
914
1,811
56,366
219
377
141
72
125
933
57,299
53,646
2,414
0
939
338
(37)
2,800
1,945
(58)
0
500
(50)
5,137
(5,174)
0
5,938
2017 Totals
18,291 102,770
15,690 88,585
5,611 31,307
1,669 9,422
0 1,000
1,907 10,165
2,901 16,184
2,377 13,260
4,833 26,967
1,920 10,712
941 5,252
1,865 10,408
58,005 326,032
225 1,280
388 2,209
145 826
74 415
129 718
961 5,448
58,966 331,480
56,060 302,736
2,406 19,909
0 6,700
939 5,287
348 1,978
(787) (5,130)
0 4,150
2,035 7,561
(54) 1,629
0 (4,255)
500 5,215
(55) (155)
2,426 14,145
(3,213) (19,275)
0 22,000
2,725
8,200
Page 28 of 49
1111812011
Page 29 of 49
ATTACHMENT A -1
NOTES TO REVENUES
GENERALREVENUES
Sales Tax
The sales tax estimate for 2012 reflects a 1.5% increase from 2010 actual receipts,
plus approximately $1.2 million in mitigation money from the Department of Revenue.
The expected increase for 2013 -2015 is 1.5% annually, and 3.0% for 2016 -2017.
Property Taxes
Tax collections are projected to grow at a rate of 2.5% for 2012 -2017. The estimate is
based on increases in assessed values, as determined by the King County Assessor's
Office, and new construction and tenant improvements.
Utility Taxes
A utility tax was approved beginning in 2003 at an initial rate of 4 increased to 5
and to 6% in 2007. The tax applies to electric, natural gas, and communications sales.
In 2009, Council adopted a 6% utility tax on solid waste collection in the City and also
adopted an interfund utility tax on the water, sewer and surface water funds.
Gambling Taxes
Estimated revenue for 2012 reflects the projected impact of new gambling activities at
the Denny's location. Assuming all other casinos continue operations, the estimates
for City revenues are conservative.
Contract Agreement Seattle City Light (SCL)
The City entered into a contract agreement with SCL in 2003 with a 4% contract
payment. The rate was increased to 5% in 2006 and to 6% in 2007. The rate currently
remains at 6
Charges /Fees for Services
The amount includes Department of Community Development (DCD) revenues
consisting of permits, licenses, fees, fines and forfeitures. The 2012 estimate includes
$1,909 for licenses and permits and $2,260 for charges for services.
Transfers In Other Funds
Reflects the General fund support for Tukwila's Hotel /Motel Tax fund, the Internal
Service funds and the Enterprise funds. This is expected to have a growth rate of 3%
annually.
Page 30 of 49
2012 2017 Financial Planning Model VIII
ATTACHMENT A -1 continued
Intergovernmental Revenue
Includes regular on -going revenues such as liquor taxes and profits, emergency
services (EMS) allocation and special non recurring grants.
Other Taxes /Miscellaneous
Includes admission taxes, and developer contributions. Annual growth is projected at
3% for 2012 -2017.
DEDICATED REVENUES CAPITAL
Real Estate Taxes
This revenue source fluctuates as it is driven by property sale transactions.
Motor Vehicle Taxes
Revenue estimates for 2012 -2017 are based on historical collections.
Investment Interest
Interest earnings have stabilized and we are projecting very little growth given the
current economic outlook.
Property Taxes
Provides a revenue source for debt service on capital facility replacements.
Parking Taxes
The parking tax, which began in 1999, is being used for the arterial street program.
The growth rate is projected to be flat at the present time.
Cash Carryover from 2011
Consists of the General Fund $6,000,000 and the Capital Funds: Streets $700,000,
Arterial Streets $7,400,000, Land Acquisition and Parks $5,000,000, Facilities
$2,000,000 and General Improvements $900,000 for a total of $22,000,000.
Amounts do not include the $2,000,000 balance in the Contingency Fund 105 at
2011 and the total in this fund at 2017 of $8,075,000.
Page 31 of 49
2012 2017 Financial Planning Model IX
ATTACHMENT B
City of Tukwila
General Fund Operations Maintenance Expenditures
2012 2017 Analysis in 000's
TOTAL EXPENDITURES 43,640
Notes:
2012
2010
EXPENDITURES
Actuals
City Council
243
Mayor, Boards
2,229
Human Resources
464
Finance
2,183
City Attorney
579
Parks Recreation
4,123
Community Development
2,635
Municipal Court
1,209
Police
13,166
Fire
9,914
Information Technology
953
Public Works /Streets
5,689
Dept. 20 Miscellaneous
253
Transfers to Golf Course
1,829
TOTAL EXPENDITURES 43,640
Notes:
2012
2013
2014
2015
2016
2017
Totals
270
282
295
308
322
336
1,814
2,523
2,637
2,755
2,879
3,009
3,144
16,947
573
599
626
654
683
714
3,849
1,603
1,675
1,751
1,829
1,912
1,998
10,767
543
567
593
620
648
677
3,647
3,509
3,667
3,832
4,005
4,185
4,373
23,571
2,684
2,805
2,931
3,063
3,201
3,345
18,028
994
1,039
1,085
1,134
1,185
1,239
6,677
14,063
14,696
15,357
16,048
16,770
17,525
94,460
10,226
10,686
11,167
11,670
12,195
12,743
68,687
1,154
1,206
1,260
1,317
1,376
1,438
7,751
6,290
6,573
6,869
7,178
7,501
7,838
42,249
553
578
604
631
659
689
3,714
575
575
45,560
47,010
49,125
51,336
53,646
56,060
302,736
A 4.5% increase is anticipated for the years 2013 -2016 due to the expected increases in healthcare, retirement rates,
and general inflationary pressures. Most of the increases will be related to salaries and benefits. Moderate cost -of- living
allowances (COLAS) are projected along with the normal annual step increases.
The Rainy Day contingency and the estimated ending fund balances are not shown here as budgeted amounts because
they are considered reserves to be used in emergencies.
Page 32 of 49
2012 2017 Financial Planning Model X 1 11/18/2011
Page 33 of 49
REVENUES
Green Fees''
Sales Tax (z)
Merchandise Sales
Power Cart Rentals
Concession Proceeds
Other Revenue (s)
Total Revenues
EXPENDITURES
Operations Maintenance
Indirect Cost Allocation
Debt Service j6
Subtotal
Golf Capital CIP Program
Total Expenditures
Cash Flow Year by Year
Carryover from 2011
Accumulated Totals
2009
Actual
1,034
328
158
186
19
31
1.756
ATTACHMENT G
1,600
1,701
1,581
13
13
City of Tukwila
222
378
335
339
339
GOLF ENTERPRISE FUND
1,948
2,262
2,142
0
0
2012 2017 Analysis in 000's
67
2,063
1,948
2,337
2,209
2010 2011 2011
(192)
(425)
(97)
610
220
425
Actual Bud Estimate
2012 2013
2014
2015
2016
2017
Total
1,018 1,200 920
970 970
1,019
1,019
1,068
1,068
6,114
330 225 775
575
575
132 148 130
130 130
1
136
136
142
142
816
172 195 173
175 175
183
183
191
191
1,098
80 120 90
95 98
101
104
107
110
614
24 24 24
24 24
25
25
26
26
150
1,756 1,912 2,112
1,969 1,397
1,464
1,467
1,534
1,537
9,367
1,672
1,600
1,701
1,581
13
13
222
222
378
335
339
339
2,063
1,948
2,262
2,142
0
0
75
67
2,063
1,948
2,337
2,209
(307)
(192)
(425)
(97)
610
220
425
425
303 28 328
2012 -2017 Financial Planning Model XXI I
1,458 1,448 1,486 1,521 1,562 1,601 9,076
15 15 16 16 17 17 97
1,473
1,463
1,502
1,537
1,579
1,618
9,173
66
80
80
80
82
82
470
1,539
1,543
1,582
1,617
1,661
1,700
9,643
430
(147)
(118)
(151)
(127)
(163)
(276)
328
328
758
611
493
343
216
52
Page 34 of 49
11/18/2011
Page 35 of 49
ATTACHMENT G -1
NOTES TO GOLF ENTERPRISE FUND
1) The Green Fees are expected to increase modestly as a function of both
increased players' participation and periodic greens fee increases. This model is
at zero growth for golf rounds and includes only a $1.00 increase in green fees
every two years.
2) A portion of the City's total sales tax revenue was allocated to pay the Golf
Course's share of the 2003 Bond. See also note (4). The 2012 amount
represents a place holder in case funds are needed. For 2012 and beyond,
these funds will be provided only on a discretionary basis.
3) Other revenue includes golf instruction, equipment rental, and interest.
4) Assumptions for Operations and Maintenance include; removal of the Parks and
Recreation's Director's 25% of salary and benefits and 50% of the Golf
Maintenance building will be covered by the Parks Department.
5) Indirect Cost Allocation will be calculated on an annual basis.
6) The debt service on the 2003 Bond Issue, see note (2). The 2003 bond balance
will be transferred to a governmental debt service fund and debt service in 2012
and beyond will be paid through this fund.
Golf Enterprise Fund
The City's Enterprise Funds account for operations that are self
supported through user charges. The funds are financed and operated
like a private business enterprise which requires periodic
determination of revenues earned, expenses incurred, and net income
for capital maintenance, public policy, management control and
accountability. The Golf Enterprise Fund accounts for operation,
maintenance, debt service and improvements of the municipal golf
facility. The difference between the other utility enterprise funds is that
Golf has voluntary users as opposed to involuntary users of the water,
sewer, and surface water funds.
Page 36 of 49
2012 2017 Financial Planning Model XXI I I