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Home My WebLink AboutReg 2024-07-15 Item 7B - Budget - 2025-2026 Biennial Budget: Capital Improvement ProgramCOUNCIL AGENDA SYNOPSIS rnitiars Meeting Date Prepared by Mayor's review Council review 7/15/24 GL ITEM INFORMATION ITEM No. 7.B. STAFF SPONSOR: PETE MAYER ORIGINAL AGENDA DALE: AGENDA ITEM TITLE 2025-2026 Biennial Budget Update CATEGORY ® Discussion Mfg Date 07/15/24 ❑ Motion Mtg Date ❑ Resolution Mfg Date ❑ Ordinance Mtg Date ❑ Bid Award Altg Date ❑ Public Hearing Mtg Date ❑ Other Mtg Date SPONSOR ❑ Council ❑ Mayor ❑ Admin Svcs ❑ DCD ❑ Finance ❑ Fire ❑ P&R ❑ Police ®Plf' SPONSOR'S SUMMARY Presentation updating Council on the 2025-2026 Biennial Budget Process, focusing on the Capital Improvement Program REVIEWED BY ❑ Trans&Infrastructure Svcs ❑ Community Svcs/Safety ❑ Finance & Governance ❑ Planning & Community Dev. ❑ LTAC ❑ Arts Comm. ❑ Parks Comm. DATE: COMMITTEE CHAIR: ❑ Planning Comm. RECOMMENDATIONS: SPONSOR ADMIN. COMMITTEE COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 07/15/24 MTG. DATE ATTACHMENTS 07/15/24 July 15 PPT 77 78 Budget Overview and Capital Planning City Council Regular Meeting July 15, 2024 CITY OF TUKWILA 2025-26 B GEM!r4' DEVELOPMENT PROCESS jat gmlikipm Isit3r1 I ) J i fl_7\ The City of opportunity, the community of choice. 03 0 AGENDA Marty Wine Interim City Administrator Tony Cullerton Interim Finance Director Pete Mayer, Deputy City Administrator I Interim Public Works Director Griffin Lerner Fiscal Analyst Budget Overview & Capital Planning • Fiscal and Budget Policies • Mayor's Priorities • Key Assumptions for 2025-26 Budget • Budget Process Update • Capital Planning and Funding • 2025-26 Capital Project Overview • Key Policy Questions City of Tukwila 2025-26 Budget Development 2 Mayor's Priorities Available resources for investments will focus on: • Budget - Financial Sustainability • Increase Public Safety in places we work, play and live • Enhance our Customer Experience • Serving our residents, business community and visitors • Serving Council and Staff • City Services More Flexible and Available • Celebrate Community with more community engagement • Economic Development • Housing (Affordable —Market Rate —Asylum Encampment) 00 City of Tukwila 2025-26 Budget Development 3 Budget Process per State Law The City of Tukwila's budget procedures are mandated by RCW 35A.33 • October 2-Mayor submits a proposed budget to the City Council. • November- City Council conducts public hearings on the proposed budget • By December 31- Council makes any adjustments and adopts by ordinance • January- Final adopted budget published & distributed Source: City of Tukwila, WA 2023-2024 Biennial Budget, k. 1 E City of Tukwila 2025-26 Budget Development 4 00 w Budget Overview Multiple Budget Inputs • City Strategic Plan • Comp Plan • Community Input Critical Milestones • Budget Kick-off • Community Engagement & Feedback • Policy Review • Capital Improvement Plan Budget in Brief • 4 — 5-page summary of 480-page budget document Budget Development Roles • Mayor sets priorities • Council reflects values and priorities of the community • Community Input (Boards/Commission, Community Members, Financial Sustainability Committee) Outreach & Engagement • Statistical Study • Community Liaisons • Go to where the people are (Farmers Market, P&R summer events. City of Tukwila 2025-26 Budget Development 5 Budget Building Blocks Preliminary Budget Proposal Debt Service Estimate Strategic Plan Financial Forecast Department and Program Budget Proposals and Prioritization City Comp Plan System Plans & Capital Improvement Plan Mayor and Council Priorities Community Outreach, Input and Feedback State & Local Requirements & Policies City of Tukwila 2025-26 Budget Development 6 Budget Building Blocks • 6-Year Financial Forecast Update • Revenue & Expenditure Assumptions • Fiscal & Budget Policies (Financial Overview Document p. 11) • Financial policies — Resolution 2014 • Debt policy — Resolution 1840 • Purchasing policy — Resolution 2015 • Bond Rating AA+ (p.51) 00 01 City of Tukwila 2025-26 Budget Development 7 00 0) Recap: 2023-24 was a "Bridge" Budget • The City faced unprecedented times: COVID-19 revenue losses • The City balanced the budget using three strategies: 1. Use of one-time funds/reserve balances 2. New revenue via B&O tax 3. Budget reductions through attrition and vacancies and City of Tukwila 2025-26 Budget Development 8 Key Assumptions for 2025-26 • Programs and Operations • Start with '23-24 level of service • Retain $6 million in property tax capacity (RFA Annexation) for long-term sustainability • Workforce investments: ongoing labor negotiations, salary study implementation • Consumer Price Index • Continued implementation of City minimum wage policy • ARPA and Streamlined Sales Tax mitigation funding expires 00 • B&O Tax supporting public safety investments • Maintain PD staffing • Maintain 4-day City Hall days/hours of operation • Capital Planning & Improvements • ARPA funding expires - impacts to traffic calming program • PW Shops Phase 2 decision point(s) • Other facility needs • Utility Rate Study recommendations • Impact Fees (Parks & Fire) City of Tukwila 2025-26 Budget Development 9 CO 00 Proposed Budget Update • Combined Operating & Budget document • Presented by Department, Fund & Program -based budgeting • Incorporates Community Outreach • Community Liaison conversations (June) • Community Survey results (June) • Conversations at events (July) • Town Hall (tentative—July/August) City of Tukwila 2025-26 Budget Development 10 Key Milestones OD MARCH BUDGET KICK-OFF Capital Improvement Program Briefing; City Comp Plan Briefings NOVEMBER Public Hearings & Final Budget Adoption APRIL-MAY Financial Sustainability Plan Recommendations; Community outreach AUGUST 6 Yr Financial Forecast; Budget Prep; Rate Study Recommendations; City Comp Plan Briefings DECEMBER Final Adopted Budget Distributed M APRIL-MAY Policy Reviews; Utility cost of service; Council Guidance SEPTEMBER Preliminary Budget Proposal Program Presentations; City Comp Plan Briefings M MAY-JUNE City Comp Plan Briefings; Community Outreach Update OCTOBER Program Presentations Revised Proposed Budget City of Tukwila 2025-26 Budget Development 11 co 0 Pete Mayer, Deputy City Administrator I Interim Public Works Director Griffin Lerner Fiscal Analyst CAPITAL PLANNING & PROJECT OVERVIEW City of Tukwila 2025-26 Budget Development 12 Capital Improvement Program Overview • Six (6) Year Capital Improvement Program (CIP) • priority investments in infrastructure and facilities • Reviewed and updated every 2 years • The CIP is fiscally constrained: projects must have funding identified to be included in the CIP • Capital Budget = Reflects the first 2 years of the CIP • Revenue sources include grants, impact fees, taxes restricted to capital projects (e.g. Real Estate Excise Tax), and bond proceeds. Very little General Fund revenues (except for debt service repayment) are used to fund capital projects. z023_ FrHANCr,�L p 2O ""`. �aprra+ rMPR AnrrvrnrG MODEL AND '-aft- Ir m.lr�gOVEAIEiViPRQGR/4H1 City of Tukwila 2025-26 Budget Development 13 CO N CIP Planning Process 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2021-2026 CIP 21-22 Budget 2023-2028 CIP 23-24 Budget 2025-2030 CIP 25-26 Budget 2027-2032 CIP City of Tukwila 2025-26 Budget Development 14 What's in a CIP? CRY OF TUKWILA CAPFUL PROJECT SUMMARY 2023 to 2023 PROJECT: Annual Bridge Inspections and Repairs Project No_ 7061432 Cngoim program of ons. repairs painting rehabilation of Ore 24 Cily vehicle and al DESCRIPTION, Federally proaamnleentires�safety or repair names m trine early Mapes to minimum hazards end JUSTIFICATION, oasts_ The number ofMidge inspemons necessary each year can vary year m year .Inspection frequeneres STATUS. Conawchon pmlec6 wObe determined from mspechon report and noted denoercies/polo.is. MAINT. IMPACT: Reduces maintenance coo-lo. COMMENT. Q,6mm6 pryat only one Tear Smoak are shmm In are first oakum. FINANCIAL lip SNOOP) EXPENSES Inspections Land ORM) Canal_ Mgml ConsMuation TOTAL EXPENSES FUND SOURCES Awarded Grant Proposed A�:I PoAL;oR Emanated SIMIldted 2021 Through E 2022 2023 20v 2025 2026 202T 2023 6STOND TOTAL 35 43 10 113 15 75 200 115 15 75 205 120 15 20 215 135 15 35 235 140 15 240 053 135 1.620 35 40 200 205 205 215 215 220 220 230 230 235 235 240 1.623 1.620 13 2622 028Car. Ineprommen1Program Project design, land acquisition, construction costs and the projected means of financing are integral components of this plan. • Estimated overall cost of each project • Estimated operational and maintenance cost for each project • Estimated project timelines • Funding sources • Project prioritization CITY OF TLJKWILA CAPITAL PROJECT SUMMARY 2023 to 2020 PROJECT: Annual Bridge Inspections and Repairs Project No. 7001401 Origami) program al brannUal inspections, repairs, painting and rehabiarlahart of the 24 City vehicle and DESCRIRTLDN: pedestrian bri'iipts. Federally required progronn idtpDiies safety or IT pile' needs in the ear2y stapes to minimize hazards and J LISTIF !CATION costs. The numhipt d lbeid9e nspi-r1ion s necessary each year can vary year to year. In sp eclion frequencies wary from hndit M bndge and King County has provided sane insperahon s.eree-es. STATUS. HAIRY IMPACT • COMMENT. Construoban protects will b.e dedrnnine-d from inspection repDrts and noted dcioencrss+prohlems R11.1:11K3124 rnairlItrlaniN. 4:4511f Cope rig protect. cn one year aolu1Is are shown in the ivr51 t . mom. FINANCIAL in 60.00's� Through Eitimattd 202'1 2022 2023 2024 2025 2026 2027 202 UEVOINO TOTAL EXPENSES Inspecbans 110 115 1 n 1 $30 135 140 950 Land MAN) 0 Co*sI. Mpmt. 16 16 1' I 15 15 1. 105 Conslruct,on 711. 75 80 80 35 35 135 505 TOTAL EXPENSES 35 40 200 205 215 220 230 235 240 1,624 FUND SOURCES Awarded Crane Proposed Grans C IribQatian. Actual 0 Nilegrigein Expected 0 Rirkinp Tim SS 40 200 205 215 220 2 235 240 1.520 TOTAL SOURCES 35 40 20u 205 215 220 730 235 240 1,624 Consideration Factors 10 0 01 Financial factors Grant availability; Fund balance; Cost versus benefit; Sunk costs; Avoided costs; Stewardship CO o, Maintenance feedback Subject matter experts in the field everyday Continue Existing CIP Existing projects carry over year-to-year Public Effectiveness feedback Part of planning and design process Alignment with City mission and values AIA isti Mandates Timing/ Scaling Urgency Meet new requirements or law (comp plans, etc.) Project Level of readiness; Service (LOS); linkage to Engineer other high availability; priority Right project projects at this time City of Tukwila 2025-26 Budget Development 17 General Fund vs Enterprise Fund Projects • Residential Streets (103 Fund) • Bridges & Arterial Streets (104 Fund) • Parks & Recreation (301 Fund) • Facility Improvements (303 Fund) • Public Safety Plan (305 & 306 Fund) • Water (401 Fund) • Sewer (402 Fund) • Foster Golf Improvements (411 Fund) • Surface Water (412 Fund) Funding of Capital Projects Impact Fees Franchise fees CO Real Estate Excise Tax Land Sales Concurrency fees Grants Solid Waste Utility Tax Bonds (dedicated revenues) City of Tukwila 2025-26 Budget Development 19 Funding of Capital Projects- Grants Grants Bonds • Grant •Voter -approved bonds • Federal vs. non-federal grants • Councilmanic bonds • Grant eligibility and restrictions • General Fund • Grant match requirements • Grants • Example grant funded projects City of Tukwila 2025-26 Budget Development 20 6 YEAR CAPITAL IMPROVEMENT PLAN City of Tukwila 2025-26 Budget Development 0 Capital Improvement Program Select Financial Policies • Leverage grants, loans or other external financing options • Avoid relying on General Fund support • Non -transportation capital projects and improvements should be funded by operating revenues, grants or bonds • Residential streets with safety issues, high traffic volumes, high pedestrian activity and poor roadway conditions prioritized higher • REET dedicated to park and open space land acquisition & arterial streets; Facilities • Transportation Impact Fees (TIF) to support growth City of Tukwila 2025-26 Budget Development 22 Principles Informing 6 Year CIP • Pay-as-you-go capital improvement program • Maintain what we have approach • "Growth pays for growth" • Prioritize deferred maintenance and safety needs • Complete Public Safety Plan - Address PW Shop facility needs • Update & pursue ADA Transition Plan improvements City of Tukwila 2025-26 Budget Development 23 N 6 Year CIP Project Type Summary Arterial Streets (104) ■ City Facilities (303) ■ General Fund (000) ■ Golf Course (411) ■ Parks & Trails (301) ■ Public Safety Plan (306) ■ Residential Streets (103) ■ Sewer (402) ■ Surface Water (412) ■ Technology (307) ■ Water (401) Project Type 133 Projects 3% 2% 17% Gilliam Creek Fish Barrier Removal Project aaulevard Non -Motorized Improvements City of Tukwila 2025-26 Budget Development 24 CD w Project Type Summary Annual Program k 16% Not Asset -Producing 13% New Construction/New Equipment 15% Major Improvement of Existing Asset 55% DUWAMISH PARK I Site Analysis & Context LEGE IC GGLO City of Tukwila 2025-26 Budget Development 25 O Project Information & New Features • Capital Projects Web Pages • Public Works • Parks and Recreation • StoryMaps • New Mapping tools City of Tukwila 2025-26 Budget Development 26 2Gt'Ave $y,' iGkiiAve SW• S 4 1' H-. St S14' Sth SI -inrev:ocd - B:Jr•en. k1ouO r �i iety leach I ngi es ea eanw'a1 Park Seahurst Burien Gregory Heights O 01 fFrh,_- 6:11 Ave S'A Glendale Boulevard Park lNhite 4} EvarsvIle lS int- 41 5u•nr'j0ale F ve Co•r:ers Southern Heights '22 t17.St 3ea7ec Park Latona - SeaT:�'. Rivert. r Heights Seattle -Tacoma IriternZtEonal Aimort Ra'iier Beach P. 11 tView BIyit Mawr meflry aake • Lake Washington Clover Creek Lakeview- Earl=-lgton Hill 3Pi 7117.S1 Sol' erir 4i 3 � a 5-26 B dget-Do Talbot Hi'.. vk''alley Vue inay x.�.en rain - County r.E 2srr, Sr Ahtrdeen .Aue ',E • !2 Sunset E Err, r! HIg 7bu y P Monterrey Terrace Falon R:cge Steeps Cn- se Hilts Victoria Hilts '•licto•la Faris LaRosa ^.irspe Valley Tel.ra_'e 169 s hac Tif )E SLbI ' 5r Cascade Latona - SeaTac _o 0 Riverton Heights Riverton \` ra Fu3teI it • ",rO rn 1 4L I �ry / IIc 4 t"GtIllth St r. I'C 1AA+h C+ •h Ct I/ ._.� �..i4+h�Gh+ar r!. )1/4 � �~ c3th 1 Pester Golf _inks CIP projects Capital Fund Arterial Streets (104) City Facilities (303) • General Fund (000) Parks & Trails (301) i Public Safety Plan (306) • Residential Streets (103) Sewer (4[17) ti1_1 McVan-McMicken _117-1 Heights c S 173rd St Tukwila a, S 132nd Si Black River Forest Earlington Hill SW 7th St SW 27th St Talbot Preliminary Profile _. O 2025-26 Capital Improvement Program City of Tukwila 2025-26 Budget Development 29 Factors Impacting 2025-26 CIP • Significant planning efforts completed in 2023-24- well positioned for local, state and federal grants • Costing and Sourcing Challenges • Cost escalation/inflation • Sourcing lead times for equipment and materials • World Cup 2026- preparations & mitigating construction impacts on visitors • No dedicated funding source for Facilities, Streets, Technology, or Planning • Minimizing impacts on the GF- less reliance on the GF for capital and O&M • Increased cross -departmental alignment in managing green infrastructure- integrating programs and services City of Tukwila 2025-26 Budget Development 30 Funding Characterization ■ Grants ■ Utilities Dedicated Revenues/Fund Balance ■ Bonds General Fund Transfer 6.032M, 6% 3.4M, 4% 27.1 M, 29% 42.6M, 46% City of Tukwila 2025-26 Budget Development 31 c) Project Type Summary Arterial Streets (104) ■ City Facilities (303) ■ General Fund (000) ■ Golf Course (411) Parks & Trails (301) Public Safety Plan (306) ■ Residential Streets (103) ■ Sewer (402) Surface Water (412) ■ Water (401) 22% 10% 18% 72 Projects 9% 3% 21% 3% 4% 7% City of Tukwila 2025-26 Budget Development 32 Grant Administration :• • • 1 $51 M in potential grants identified in the next biennium 47% of project costs City of Tukwila 2025-26 Budget Development 33 Project Highlights 2025-26 Capital Improvement Program • Water Reservoir • 42nd Avenue Bridge Replacement • Public Works Shop Phase II • Allentown Truck Re-routing • 152nd Avenue improvements • Boeing Access Road Bridge Deck • Strander Boulevard Extension • City Hall I 6300 Building I TCC • Park & Trail Master Plans • FGL Irrigation System Replacement • Tukwila Pond Improvements City of Tukwila 2025-26 Budget Development 34 2025-26 CIP Preview- Key Issues & Projects Issues/Challenges Addressing Deficiencies & Deferred Maintenance/Backlog Less reliance on General Fund support for Capital Improved Accounting for O&M costs Conducting Facility Condition Assessments Advancing ADA Projects & Transition Plan Mitigating Cost Escalation & Inflation Lack of Dedicated funding For Capital Facilities Insufficient funding for Annual Overlay Program ARPA Funds Expiring at Year -End City of Tukwila 2025-26 Budget Development 35 Next Steps July -November • Overview of Proposed 2025-26 CIP • City Comp Plan Updates • Overview of Funds • Preliminary 2025-26 Budget • Utility Rate Study Results & Recommendations • PW Shops Phase II direction .11114Ffe) City of Tukwila 2025-26 Budget Development 36 Discussion & Questions 01 What do you see as the greatest capital need facing the City of Tukwila? How aggressive should the City be in addressing unfunded deficiencies? What are the preferred sustainable funding sources to support the City's capital program beyond the current mix of resources? City of Tukwila 2025-26 Budget Development 37 yve ;"111 CITY OF TUKWILA 2025-26 B GE DEVELOPMENT PROCESS Qiio sm.! 3r1 The City of opportunity, the community of choice. �J