Budget WORK SESSION fiscal year 2018 “The only thing worse than being blind is having sight but no vision.” Helen Keller City of Mustang

General Fund Projected Beginning Balance $ 2,050,000 Projected Revenues $21,988,735 Projected Expenditures ($21,988,735) Projected Ending Fund Balance $ 2,050,000

General Fund – Revenue The General Fund is the City’s primary operating fund and the source of day-to- day operations. The General Fund is significantly reliant on sales tax revenues for operations. Staff has projected sales tax revenue to increase by .5% as a result that Oklahoma has joined a growing list of states that collect sales tax in purchases made through online retail giant Amazon. The City is projected to experience minimal sales tax growth primarily due to Wal-Mart's online groceries, restaurants, and housing growth. As of May 8, 2017, sales and use tax are both running slightly higher than last year’s receipts.

Projected Sales Tax Revenue FY 13: $ 8,340,520 FY 14: $ 9,160,774 FY 15: $ 9,708,037 FY 16: $ 9,926,248 FY 17: $10,066,265 (projected year to date as of 5/8/2017) FY 18: $10,100,000 (proposed FY18 budget) ACTUAL AMOUNT $ 587,485

General Fund – Expenditures

General Fund – Expenditure Changes Financing the City’s operations. FY 2017-18 budget includes a new police officer and firefighter funded by the 4th penny sales tax extension. No change - Oklahoma Municipal Retirement Fund (11.79%), Police (13%), and Fire (14%). Recommended transfer to Risk Management Fund from $100,000 to $125,000 to cover annual excess workers compensation coverage . Shared costs with the MIA. The budget includes a 3% merit increases for ALL City employees. The FY 2017-18 budget includes a job reclassification for the City Attorney as advised by the Internal Revenue Services.

General Fund – Expenditure Changes Premium Healthcare Rate Increase of 7.4% Budget includes a plan premium rate increase of 7.4% in costs associated with employee health care. The national average is between 9-19%. Once again, this is the beneficial result of joining the Oklahoma Public Employees Health and Welfare Consortium. When it comes to dental health, staff has chosen OPEH&W for its plan. This package has the best balance of value and coverage. Total health insurance cost increase is $63,430. The City is NOT passing this increase on to City employees.

General Fund Reserve Projected Beginning Balance $ 16,000 The General Reserve Fund was established by Resolution 06-017. Original funding was deposited from other funds for maintenance of city facilities, infrastructure, and other capital purchases. Ordinance No. 1105 was approved on July 15, 2015 to levy a tax of (5%) on the rental of hotel and motel rooms within the city limits. All taxes collected shall be deposited into the City’s General Fund. The City Council shall determine on a yearly basis the use of the room tax funds. Hampton Inn & Suites by Hilton is projected to open a 4-story hotel with approximately 70 rooms by November 2017. Projected Beginning Balance $ 16,000 Projected Revenues $ 68,030 Projected Expenditures $( 0) Projected Ending Fund Balance $ 84,030

Impound Fee Fund Projected Beginning Balance $ 12,000 Ordinance No. 1102 on May 8, 2014 established a $100 fee to release an impound vehicle. The purpose of the fee is to defray costs of towing service and storage. Funds are restricted for the Police Department. Reference budget pg. 86 for expenditure detail. Projected Beginning Balance $ 12,000 Projected Revenues $ 26,065 Projected Expenditures $( 32,500) Projected Ending Fund Balance $ 5,565

Park Improvement Fund Projected Beginning Balance $ 0 The Park Improvement Fund is used to account for the revenue received from business licenses ($15 per $40 license) required by ordinance; $20 fines/bonds collected; and park fees from subdivisions. Funds are restricted for improvements to and development of the park system. Projected Beginning Balance $ 0 Projected Revenues $ 57,735 Projected Expenditures $( 40,000) Projected Ending Fund Balance $ 17,735

Park Improvement Fund Park Signage (Elliot, Dowden, and WH Parks) $ 15,000 Improvements - Mulch & Repairs 10,000 Nature Trails at Curtis Park 15,000 TOTAL PROJECTS - $ 40,000

Alcohol Enforcement Fund Ordinance No. 1087 on June 4, 2013 established the Alcohol Enforcement Fund to account for $50 of each alcohol- related fine. Funds are used to enforce laws relating to juvenile access to alcohol and other intoxicating substances. Reference budget pg. 98 for expenditure detail.   Projected Beginning Balance $ 3,200 Projected Revenues $ 5,130 Projected Expenditures $( 6,230) Projected Ending Fund Balance $ 2,100

Library Fund Projected Beginning Balance $ 10,000 Projected Revenues $ 10,250 Projected Expenditures $(10,025) Projected Ending Fund Balance $ 10,225 The Library Fund is used to account for restricted state grant agreements and fines generated as a result of overdue library materials. Funds are used for library operations, local programs, and capital purchases.  

Traffic Enforcement Fund Ordinance No. 920 established the Traffic Fund in 2006, amended by Ordinance No. 1146, April 18, 2017. Any person convicted in a traffic offense shall pay the court $20 as a separate fee. Funds are for the sole purpose of the purchase of police equipment, specialized training of law enforcement officers and programs to enforce state and local traffic laws. Reference budget pg. 109 for expenditure detail.   Projected Beginning Balance $ 14,000 Projected Revenues $ 40,055 Projected Expenditures $(54,000) Projected Ending Fund Balance $ 55

Employee Flex Spending Fund The City offers its employees a Flexible Spending Program, which is allowable under Internal Revenue Code, Section 125. The program allows employees to deposit a portion of their pre-tax income into the account maintained for health care expenditures.   Projected Beginning Balance $ 3,800 Projected Revenues $ 4,000 Projected Expenditures $( 4,000) Projected Ending Fund Balance $ 3,800

Park & Recreation Donation Fund The Parks & Recreation Donation Fund is used to account for specified donations that are restricted for the use of park and recreational events/projects.   Projected Beginning Balance $ 7,000 Projected Revenues $ 5,030 Projected Expenditures $( 7,000) Projected Ending Fund Balance $ 5,030

Police Technology Fee Projected Beginning Balance $ 0 Projected Revenues $ 54,055 Projected Expenditures $( 54,000) Projected Ending Fund Balance $ 55 The Police Technology Fee of $25 per citation is used to account for electronic fingerprinting, E-ticketing solutions, computers and wireless connection costs for police vehicles and ongoing technology maintenance. Ordinance #1146 was established on April 18, 2017 (legislative restriction).  

Street/Drainage Fund Projected Beginning Balance $ 580,000 The Street/Drainage Improvement Fund is a special revenue fund used to account for the proceeds of specified revenue sources that are restricted or committed to expenditures for street projects and repair. FY 2018 projects: Engineering $10,000 Street Repairs $384,000 Morrell Way Lighting $16,000 Sidewalk Projects $13,000 Signalization (E. Plantation Terrace & Mustang Rd) $116,000 TOTAL: $539,000   Projected Beginning Balance $ 580,000 Projected Revenues $ 151,620 Projected Expenditures $( 539,000) Projected Ending Fund Balance $ 192,620

2016 Penny Extension – 10% Public Safety Personnel Fund Mustang citizens voted on August 23, 2016 to extend the 4th penny sales tax for a 13-year period. 2016 Penny Extension (10%) Fund collects 10% of the 4th penny sales tax which is restricted for personnel costs associated to public safety.   Projected Revenues $ 50,000 Projected Beginning Balance $ 210,110 Projected Expenditures $(210,000) Projected Ending Fund Balance $ 50,110

Debt Service Fund Projected Revenues $ 200,000 The City Debt Service Fund is used to account for ad valorem taxes levied by the City for use in retiring general obligation bonds, court- assessed judgments, and their related interest and fiscal agent fees. In State law, this fund is referred to as the Sinking Fund. The 2012 General Obligation Bonds funded the Ball Field and Town Center Expansion projects.   Projected Revenues $ 200,000 Projected Beginning Balance $ 320,450 Projected Expenditures $(303,950) Projected Ending Fund Balance $ 216,500

Limited Purpose Fund Projected Beginning Balance $1,012,500 The Limited Purpose Fund is a capital project fund used to purchase capital outlay, including the acquisition or construction of capital facilities, or other capital assets. The restricted 3rd penny sales tax collected (MIA) in excess of debt payments are set aside to the Limited Purpose Fund. Resolution 15-058 amended 05-027 to read ‘10% of sales tax revenue received in excess of $800,000 per month’.   Projected Beginning Balance $1,012,500 Projected Revenues $1,067,000 Projected Expenditures $( 870,813) Projected Ending Fund Balance $1,208,687

Limited Purpose Fund - Capital Outlay Spending City Management – camera system for City Hall ($12,000), voting system for Council Chamber ($10,000); Library – (10) conference chairs for meeting table ($4,350); Parks and Recreation – painting of gazebo ($9,335), recreation management software integration and set up ($4,000), 12-passenger ADA van for Seniors ($9,500) – 15% matching grant, park cameras ($14,200), trail replacement & rock border around Elliott Park pond ($30,000), park sidewalks & pathways ($12,000), outdoor lit Christmas tree ($4,500), permanent public address system for Town Center ($25,000), audio and visual equipment ($5,990); Town Center – new carpet in hallway, meeting room & offices ($14,900), painting ($5,800), HVAC replacement of units ($40,000), replace foyer lighting in Town Center ($8,000), new equipment & repairs to basketball goal ($2,900), dining room window tinting for Senior Center ($5,534); Ball Complex – outdoor sound system for baseball ($13,280) & softball ($11,333) complexes, (1) electronic menu boards for baseball & (2) for softball ($9,000), utility cart ($7,000), (10) dug out covers for softball complex($70,000);

Limited Purpose Fund - Capital Outlay Spending CONT’D Police – (5) New Vehicles ($76,500), Prior Year Leases – Vehicles ($89,100), (22) patrol rifles ($22,341), replace back-up system batteries ($8,800), access control & security system upgrades ($50,000), bullet-resistant glass in records lobby ($6,000), squad room remodel ($25,000), parking lot light replacement ($7,650), change light switches to motion sensor switches ($1,800), replace carpet in admin & detective area ($7,500); Fire – training room remodel ($15,000), carpet replacement ($26,300), mechanical hose roller ($8,200); Street Division – asphalt roller ($20,000), asphalt paver ($35,000), building for Street Department ($70,000), entry signs for City limits ($30,000), wayfinding signs ($18,000); Water Division – Resolution 05-027 infrastructure ($25,000) – flow & regular water meters; Sub-total of Capital Requests ($870,813) Reserves for fund balance ($1,208,687) Total - $2,079,500

2016 Penny Extension – 90% Capital Mustang citizens voted on August 23, 2016 to extend the 4th penny sales tax for a 13-year period. 2016 Penny Extension (90% Capital) Fund collects the 90% allocation of revenues after the 2016 note payments used for capital expenditures in (4) four specified areas: º Public Safety º Infrastructure º Road & Streets º Quality of Life   Projected Beginning Balance $ 200,000 Projected Revenues $ 901,000 Projected Expenditures $( 0) Projected Ending Fund Balance $1,101,000

2016 Series Revenue Note Projected Beginning Balance $ 144,200 In October 2016, the City issued the Utility System and Sales Tax Revenue Note, Series 2016 in the amount of $13.385m. The following projects are funded with the 2016 Notes: Public Safety – Design of the Emergency Operation Center Infrastructure – WWTP Phases C&D Road & Streets – SW 89th Street Widening Quality of Life – All Inclusive Playground & Town Center Expansion   Projected Beginning Balance $ 144,200 Projected Revenues $ 885,000 Projected Expenditures $( 589,900) Projected Ending Fund Balance $ 439,300

2014A Series Revenue Note Projected Beginning Balance $ 946,000 The City pledged the 4th penny of future sales tax to repay of Series 2006 Revenue Note. The sales tax is legally restricted by a vote of the citizens and cannot be spent on any other items. Proceeds from the notes provided financing for community facilities in 1999. Debt service payments are received and paid within this fund. Taxes collected in excess of the debt service payments are set aside for the early retirement of debt as notes become due. On May 13, 2014 the 2014A Notes refinanced the Series 2006 Revenue Bonds for the purpose of reducing maturity years by 3.33 years, note amount of $7,740,000, interest rate reduced from 5.0% to 2.1%.   Projected Beginning Balance $ 946,000 Projected Revenues $ 434,100 Projected Expenditures $(1,325,100) Projected Ending Fund Balance $ 55,000

2014B Series Revenue Note Projected Beginning Balance $ 20,000 In December 2014, the City issued the Series 2014B and pledged the net utility revenues and four cents of sales tax. Interest payments started June 1, 2015 within the MIA fund. Payments will be received and paid within the 2014B Series Notes Fund for fiscal year 2017. Principal payments do not begin until June 2018 and the note is payable through June 2026. The 2014B Note of $7,985,000, with an interest rate of 2.7% with Branch Banking and Trust Company (BB&T). Current projects funded: S. Mustang Road WWTP – Phase A&B Water Quality   Projected Beginning Balance $ 20,000 Projected Revenues $ 345,100 Projected Expenditures $( 325,165) Projected Ending Fund Balance $ 39,935

Mustang Improvement Authority  The Mustang Improvement Authority (MIA) was created June 4, 1963 to finance, develop and operate the water, sewer and solid waste activities. These activities are financed primarily by user charges and similar to the private sector. This fund accounts for activities of the public trust in providing water, wastewater, sanitation, and recycling to the public.   Projected Beginning Balance $ 2,400,000 2014B Restricted Carryover $ 4,662,400 2016 Restricted Carryover $ 11,871,000 2016 Restricted Capitalized Interest $ 144,000 Projected Revenues $ 18,289,050 Projected Expenditures $(18,289,050) 2014B Construction Loan Projects $( 4,662,400) 2016 Construction Loan Projects $(11,871,000) 2016 Construction Loan Interest $( 144,000) Projected Ending Fund Balance $ 2,400,000

Mustang Improvement Authority - Revenues

Mustang Improvement Authority - Expenditures

Risk Management Fund Projected Beginning Balance $ 475,000   The Internal Service Fund (Worker’s Compensation Fund) is used to account for self- insured worker’s compensation claims.   Projected Beginning Balance $ 475,000 Projected Revenues $ 129,700 Projected Expenditures $( 174,000) Projected Ending Fund Balance $ 430,700

MIA Reserve Fund Projected Beginning Balance $ 600,000 The MIA Reserve Fund is used for maintenance, infrastructure, and capital purchases for the enterprise funds. On an annual basis 33 1/3% of the connection fees will be appropriated for operating and maintaining utility systems, and 66 2/3% of connection fees for expanding and upgrading water and sewer utilities. Ordinance 1106 added $4.50 per month for each utility account for capital improvements to water and wastewater facility and line maintenance and construction. FY2018 Projects: Estimated costs TBD Lift Station #4 County Line Tower Rockwell Booster Station (pending WWTP C&D savings)   Projected Beginning Balance $ 600,000 Projected Revenues $ 398,600 Projected Expenditures $( 200,000) Projected Ending Fund Balance $ 798,600

MIA Reserve Fund - CONT’D $4.50 Capital Improvement Fee has Funded the Below Projects Since 2015: Total Costs: $612,165 59th Street Water Line Relocation – final bill Meadow Lane Sewer Line Rehabilitation WWTP – repairs & maintenance Repairs, Maintenance & Restore Wells #1-5, 7-8 & 12 Rebuilding, Discharge & Repair Pumps Rockwell Booster Station – Variable Frequency Drive SCADA Improvements Root Control Magnetic Flow Meter & Regular Meters

Sewer Impact Fund Projected Beginning Balance $590,000 The Sewer Infrastructure Impact Fund is used to account for fees established per house top to developers. Funds are used to pay the Series 2009 Clean Water SRF Note to OWRB dated June 8, 2009, maturity date May 15, 2030 and future indebtedness.   Projected Beginning Balance $590,000 Projected Revenues $347,700 Projected Expenditures $(363,400) Projected Ending Fund Balance $574,300

2013 Refinancing (1998A|B) Fund  The City has pledged future net water and sewer revenues and one cent sales tax to repay the 1998 Revenue Bonds Payable. Proceeds from the bonds provided financing for utility system capital assets. The bonds were defeased in April 2013, funded by the issuance of a refunding private placement note, with the pledged revenues assumed by note holder.   Projected Beginning Balance $ 100,000 Projected Revenues $ 885,100 Projected Expenditures $( 918,000) Projected Ending Fund Balance $ 67,100

Depository Fund Projected Beginning Balance $ 4,000  Title 11 O.S., 35- 107 & 17-101 deposits for utility service shall be refunded or credited to the customer upon termination of service. Refund checks to be issued within 30 days following termination of service. No interest is required to be paid to customer. Interest earnings transferred to the Mustang Improvement Authority at year- end.   Projected Beginning Balance $ 4,000 Projected Revenues $ 300 Projected Expenditures $( 4,000) Projected Ending Fund Balance $ 300