Fiscal Sustainability – Revenue & Expense Projection April 10, 2018 Kim Weber, Finance Director

Where we have been 2016 Information gathering – Council overview (TPAB, EDP) Asset management “The Revenue Pie” 2017 Tax initiatives User Fee Study, policies, and implementation Alternative Budget Scenarios 2018 Tax Policy Community tax structure Parks & Rec User Fees 6-Year Revenue & Expense Projection

Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 2019 2020 2021 2022 2023 2024 Revenue Sales Tax Escalation 2% Charges for services 10% 3% Other Revenue 1% Retail Marijuana 5% 4% Grant Revenue -2.5% -1.0% Fire/EMS Fees Expenditures Personnel Escalation Operating Escalation Equipment Escalation

Sales Tax Historically Year YOY Change 1988 13.15% 30-Year Avg 1989 15.54% 5.83% 1990 18.98%   1991 2.28% 1992 8.42% 1993 8.72% 1994 5.18% 1995 2.88% 1996 4.28% 1997 8.98% 1998 9.46% 20-Year Avg 1999 5.19% 4.32% 2000 8.65% 2001 2002 0.91% 2003 0.85% 2004 7.47% 2005 7.48% 2006 8.92% 2007 7.71% 2008 2.56% 10-Year Avg 2009 -14.14% 2.46% 2010 -0.99% 2011 4.48% 2012 1.10% 2013 7.35% 5-Year Avg 2014 7.92% 6.32% 2015 5.16% 2016 5.56% 2017 5.58% Sales Tax Historically

6-Year Projections Personnel Operating Equipment Building Infrastructure Maintenance Community Support

Personnel Additions by Function General Government = 7.6 FTEs Public Works(Including Transit) = 5.1 FTEs Police Department = 8 FTEs Fire/EMS Department = 15 FTEs Parks & Community Services = 3.14 FTEs Planning & Community Development = 1 FTE Total over 6 years = 39.84

Personnel Additions by Year 2019 – 15.6 FTEs 2020 – 6.48 FTEs 2021 – 13 FTEs 2022 – 2.38 FTEs 2023 – 0 FTEs 2024 – 2.38 FTEs Total = 39.84

Operating Additions (examples) General Services IT annual software maintenance contracts Facilities - CLEF Public Works Reduce contract services with additional Engineering staff Police Expenses related to Digital Forensic Analyst Fire Expenses related to new station and new personnel P&R Expenses related to new multi-sports facility (revenue offset included)

Equipment (examples) Public Works Police Fire P&R Streets – loader Transit – 20% grant match bus shelter upgrades and automatic voice announcement system in busses Police 2 patrol vehicles Fingerprinting machine, Taser replacement, laptop replacement Fire Convert pickup to Type IV Wildland Truck 3 new staff vehicles (Deputy Fire Marshall, General Staff, Battalion Chief) Ambulances & Fire Trucks not included (In Capital Projects Fund) P&R Mowers Snowmobile & 4-Wheeler Magic Carpet Belt

Building Infrastructure Maintenance Current level of maintenance included Plus…… Additional maintenance & repair 2019 = $1.1M 2020 = $1.4M 2021 = $725K 2022 = $1.86M 2023 = $700K 2024 = $1.4M

Scenario 1 – Includes Additional Personnel, Operating, Equipment, & Building Maintenance ASSUMPTIONS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 2019 2020 2021 2022 2023 2024 Revenue Sales Tax Escalation 2% Charges for services 10% 3% Other Revenue 1% Retail Marijuana 5% 4% Grant Revenue -2.5% -1.0% Fire/EMS Fees Expenditures Personnel Escalation Operating Escalation Equipment Escalation REVENUE LESS EXPENSE $ (3,367,279) $ (5,025,542) $ (6,180,844) $ (8,340,808) $ (8,473,031) $ (10,163,007)

Scenario 2 – Does Not Include Additional Personnel, Operating, Equipment, or Building Maintenance. (Would require reduction of services) ASSUMPTIONS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 2019 2020 2021 2022 2023 2024 Revenue Sales Tax Escalation 2% Charges for services 10% 3% Other Revenue 1% Retail Marijuana 5% 4% Grant Revenue -2.5% -1.0% Fire/EMS Fees Expenditures Personnel Escalation Operating Escalation Equipment Escalation REVENUE LESS EXPENSE $ (552,967) $ (1,133,209) $ (1,885,992) $ (2,229,031) $ (3,087,480) $ (3,958,254)

Other Scenarios Different revenue assumptions Different escalation factors Look at departments individually Etc.

How big is the problem & how do we remedy it? Alternative budget scenarios Service level reductions New revenue source Property Tax – 1 mill = $650K Sales Tax - .25% = $1.5M Others……