HomeMy WebLinkAboutReg 2004-06-21 Item 2D - Budget - Financial Update and 2005-2010 Planning Model DraftCO UNCIL ../I GENDA SYNOPSIS
O ......................... Initials ......................... ITEM~
Meeting Date Prepared by Ma?or.'s rffv!ew Council review
CAS Number: 04-088 I Original Agenda Date: 6/21/04
Agenda Item Title: Financial Update
Original Sponsor: Council X Admin. X
Timeline: Present Financial Update on June 21, 2004
Sponsor's Summary: The Financial Update is a preliminary look at 2004 year to date activity and first draft of
2005-2010 Planning Model. Also, items for July presentation will be outlined.
Recommendations:
SPonsor: Information only
Committee; Presented at Finance & Safety concurrent with June 21, 2004 meeting
Administration: Information only
Cost Impact (if known): N/A
Fund Source (if known): N/A
Meeting Date Action
6/21/04
Meeting Date Attachments
6/21/04 Memo.from Alan Doerschel dated June 16, 2004
To: Mayor & City Council
From: Alan lq. Doerschel (~J/~ ~)
Date: June 16, 2004
Subject: Financial Update
Attached is the first draft of the 2005-2010 Financial Planning Model. It
reflects the actual carryover amount from 2003 as well as the estimated
carryover from 2004.
Generally, we are in better shape than the previous Planning Model for
comparable periods. The adopted Planning Model had a $4,401,000
balance at the end of 2009 (corrected) and the draft model has a
$6,307,000 balance in 2009.
The reasons are:
· Utility Taxes and City Franchise agreement revenues were
understated, but were partially offset by a flat sales tax
growth through the June reporting month.
· Beginning Balances for 2004 were higher than budgeted
because of revenues being higher and expenditures lower
than projected for 2003.
· The 2004 combined Excise Tax revenues for both the
Arterial Street and Land Acq. & Building Funds will be
$550,000 higher than budgeted due to a major property
sale.
· All other revenues and expendi~ares are expected to be at -
or near projections at this time.
Some of the positive possible impacts not currently factored in the
Planning Model include:
~ Westfield Mall Expansion could generate between $1 to 1.5 million
net revenue per year if projections are accurate. However, more
pressure would be put on our transportation infrastructure.
~ Other proposed economic growth propositions such as Tukwila
South Development and Tukwila Village could provide positive
revenue flows depending on City contribution requirements.
In early July we will have a later version of the Planning Model as well a
discussion on the following issues affecting the long-term ability of the
City to fund basic services and capital needs. These include:
* Debt Capacity
· Initiatives and other Legislative changes
o Eyman Initiative 864 et al
o Streamlined Sales Tax
o Other
· Long Term Capital needs not budgeted
o Klickitat
o Strander Extension et al
· Labor Costs
· Facilities
· Potential significant revenue sources the City may desire to
avail itself.
o Add Utility Tax on Garbage and Surface Water. Also,
consider Water and Sewer.
o Various elements of a B&O Tax (i.e. head tax).
o Voted Property Tax Levy Lid Lifts. Temporary or
permanent.
o Raising the Gambling Tax rate.
ATTACHMENT A
CiTY OF TUKWILA
TOTAL REVENUES & EXPENDITURES
2005-2010 Analysis in'000's
REVENUES (see A-I) 2005 2006 2007 2008 2009 2010 Totals
General Revenues
Sales Tax 15,600 16,068 16,550 17,046 17,557 18,084 100,905
Property Tax 10,406 10,668 10,937 11,123 11,553 11,784 66,471
Utility Taxes 2,940 3,033 3,637 3,758 3,884 4,000 21,252
Gambling Taxes 2,300 2,300 2,300 2,400 2,400 2,500 14,200
Franchise Contract-SCL 1,452 1,505 1,839 1,907 1,977 2,036 10,716
Charges/Fees for Service 2,850 2,966 3,084 3,208 3,336 3,470 18,914
Trans. In-Other Funds 1,970 2,049 2,131 2,216 2,305 2,397 13,068
Intergovernmental Revenue 569 592 615 640 665 675 3,756
Other Taxes/Misc. 1,227 1,276 1,327 1,380 1,436 1,493 8,139
Cash Carryover 0 300 300 300 300 300 1,506
Subtotal 39,314 40,757 42,720 43,978 45,413 46,739 258,921
Dedicated Revenues (Capital)
Real Estate Taxes 650 650 700 700 700 700 4,100
Motor Vehicle Taxes 450 450 450 450 450 450 2,700
Interest Income 150 150 100 100 100 150 750
Property Tax 130 130 130 130 130 130 78C
Parking Tax 160 160 160 160 170 170 98(3
Subtotal 1,540 1,540 1,540 1,540 1,550 1,600 9,31(3
tOTAL REVENUE
AVAILABLE 40,854 42,297 44,260 45,518 46,963 48,339 268,231
EXPENDITURES (see A-2)
Operations & Maintenance: 35,001 36,349 37,800 39,309 40,899 42,550 231,908
(See Attachment B)
Debt Service - 1994 490 490 490 490 490 490 2,940
Debt Service - 1999 & 2000 835 1,085 1,085 1,085 1,085 1,085 6,260
New Bond Issue - 2003 492 492 492 492 492 492 2,952
Leased Space - Tukwi!a Village 110 t20 130 150 160 160 .... 830
Admin/Engineering Overhead 998 1,038 1,080 1,123 1,168 1,214 8,621
Subtotal Available 2,928 2,723 3,183 2,869 2,669 2,348 16,720
Capital - Attachment C
Neighborhood Revitalization
Residential Streets 485 570 70 70 70 70 1,335
Parks & Trails 208 338 208 188 148 200 1,290
General Government
Facilities 0 0 0 0 0 0 0
General Government 860 860 960 1,060 1,060 1,160 5,960
Economic Development
Bridges 100 100 100 100 100 100 600
Artedal Streets 2,914 2,565 2,075 2,075 2,370 2,400 14,399
Subtotal Capital 4,567 4,433 3,413 3,493 3,748 3,930 23,584
Balance by Year (1,639) (1,710) (230) (624) (1,079) (1,582) (6,864)
Carryover from 2004 11,589 0 0 0 0 0 11,589
Accumulated Totals 9,950 8,246 8,010 7,386 6,307 4,725
IV 06/17/04
ATTACHMENT A-1
NOTES TO REVENUES
GENERAL REVENUES
Sales Tax
The Sales Tax estimate for 2004 is $15,600,000. We are using a 3.0% growth rate for
the years 2006 through 2010. This assumes the economy will continue to improve.
Property Tax
Due to the passage of Initiative 747, tax collections are projected to grow at a rate of 2%
for the year 2005 with an expected rate of growth at 2.5% for the period of 2006 through
2008, a 3.1% growth in 2009, and 2% for the year 2010.
Utility Taxes
A Utility Tax has been approved beginning in 2003 at a 4% rate. This includes Puget
Sound Energy electric and natural gas sales and all communications sales. The tax rate
will increase to 5% in 2005 and increase again in 2007 to a 6% rate. The rate changes
are subject to review by the City Council. Actuals for 2004 indicate that an increase in
projections for 2005 through 2010 should be increased by approximately $600,000 per
year.
Gambling Taxes
Assuming all existing casinos continue operations, the estimates for City revenues is
conservative.
Franchise Contract - SCL
A revised contract with Seattle City Light will provide additional revenues beginning in
2003. The new agreement based on sales in Tukwila will be at a rate of 4% during
2003-2004, a rate of 5% in 2005-2006, and a 6% rate beginning in 2007. The actuals-
to-date indicate a larger than estimated actual.
Charges, Services & Fees
Includes DCD revenues; all permits, licenses, fees, and charges; and fines & forfeitures.
A 4% growth rate is projected for the period of 2006 through 2010.
Transfers-In
Reflects the General fund support for Tukwila's other Capital and Enterprise funds;
Residential Streets, Arterial Street, Water, Sewer, Surface Water, Foster Golf Course,
Land Acq. Parks & Recreation and Equipment Rental funds. This is expected to have a
growth rate of 4%.
Intergovernmental
Includes regular on-going revenues such as Motor Vehicle excise taxes, liquor taxes,
emergency services (EMS) allocation and special non-recurring grants. The recurring
on-going amount is expected to grow at 4% per year.
V
Other Taxes/Miscellaneous
Includes admission taxes, interest income, natural gas use tax, developer contributions,
etc. The estimates for years 2006 through 2010 are projected at a growth rate of 4%.
Beginning Fund Balance
Includes the General Fund $6,805,000 and the Capital funds: Street $355,000, Arterial
Street $1,900,000, Land Acquisition and Parks $804,000, Facilities $1,558,000, and
General Government Improvements Funds $167,000 for a total of $11,589,000 for
2005. Amounts after 2005 are only General Fund expenditure saving carryovers. Not
included is the $1.1 million "Rainy Day" amount. Also, there is $784,000 in the
Contingency Fund (105) for a total of $1,884,000 in Designated Reserves.
CAPITAL REVENUES
Real Estate Transfer Tax
Revenue has been uneven dudng the last four years. Estimates for 2005~2010 have
been adjusted to reflect current revenue averages.
Motor Vehicle/License Taxes
Revenue estimates for 2006-2010 are flat based on historical collections.
Investment Interest/Miscellaneous
The pedod between 2005-2010 reflects only modest cash amounts being available.
Property Tax
Revenue source for debt service payments on capital facility replacements.
Parking Tax
The parking tax which began in 1999 is being used for the Arterial Street program. The
growth rate is projected to be flat a,~'the present time. An adjustment was made to reflect
actuals through year 2004.
Grants
Only the grants that have been approved or are given a very high probability of being
approved are shown as revenues.
Developers
Reflects both contractual developer agreements and non-committed amounts. Projects
that do not receive the developer funding will be put on hold.
VI
ATTACHMENT A-2
NOTES TO EXPENDITURES
Operations & Maintenance - See Attachment B
Debt Service - Includes all of the debt currently issued by the City for general government
activities. There is approximately a cost of $75,000 per million borrowed in today's current
market place for new bond issues.
Administrat on/En.qineering Overhead - Cost of internal engineering and management of the
capital program - general government only.
Capital - The amounts on Attachment A show only the City's share of each program. The
total cost and other revenue sources (grants, developers, contributions, etc.) are fully
disclosed in Attachment C and the detailed project sheets in the Adopted Planning Model.
Most of the Capital Expenditures (City money) by 2007 are for maintenance and small
improvements in the Arterial Street section. Also, the General Government allocations are for
significant maintenance or upgrades in the City's facilities. These allocations account for the
majority of Capital Planning.
In Summary, there are a few projects in our six-year plans that are truly discretionary. This is
now a basic maintenance plan.
ATTACHMENT B
CITY OF TUKWILA
Notes to Operations & Maintenance Expenditures
2005-2010 Analysis in 000's
EXPENDITURES 2005 2006 2007 2008 2009 2010 Totals
City Council 229 238 247 257 268 279 1,518
Mayor, Boards 1,270 1,321 1,374 1,429 1,486 1,545 8,425
Administrative Services 1,485 1,544 1,606 1,670 1,737 1,806 9,848
Finance 1,433 1,427 1,485 1,544 1,605 1,669 9,163
City Attorney 416 433 450 468 487 506 2,760
Recreation/Parks 3,318 3,454 3,592 3,736 3,885 4,040 22,025
Community Development 2,168 2,251 2,337 2,426 2,520 2,621 14,323
Municipal Court 929 964 1,004 1,048 1,080 1,123 6,148
Police 10,570 10,991 11,429 11,884 12,367 12,861 70,102
Fire 8,212 8,541 8,883 9,238 9,607 9,991 54,472
Public Works 2,977 3,096 3.220 3,349 3,483 3,622 19,747
Street Maintenance 1.769 1,839 1,913 1,990 2,079 2,162 11,752
Dept. 20 Misc. 225 250 260 270 295 325 1,625
TOTAL EXPENDITURES 35,001 36,349 37,800 39,309 40,899 42,550 231,908
Notes:
The estimates presented are preliminary, based on the 2004 Budget and actuals.
All departments are limited to an increase at a 4.0% rate per year after 2004. Most of the increases will
be--related to salaries and benefits. Moderate COLAS are projected, along with the normal a~m~,al-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.
06/16/04