CITY OF COTTONWOOD FY 2015 Proposed Budget Overview City Council Chambers May 27, 6:00 P.M.

2 Topics of discussion Glossary of Acronyms FY 2015 Budget Summary Personnel Capital Outlay <$35K Capital Outlay $35K+ Major Revenues Update Funding Outside Agencies Water & Wastewater Rates Financing Needs Reserve Funds Status Future Meetings & Questions

3 Glossary of Acronyms

4 ADOT – Arizona Department of Transportation ASRS – Arizona State Retirement System ADWR – Arizona Department of Water Resources AZ - Arizona CAF – Capital Accumulation Fund CATS – Cottonwood Area Transit System CDBG – Community Development Block Grant CIP – Capital Improvements Plan/Program COLA – Cost Of Living Adjustment DOJ – Department of Justice DPS – Department of Public Safety DS – Debt Service DUI – Driving Under the Influence

5 Glossary of Acronyms E-MOD – Experience Modifier EMS – Emergency Medical Services FAA – Federal Aviation Administration FmHA – Farmers Home Administration FY – Fiscal Year GADA – Greater Arizona Development Authority GF - General Fund GOHS – Governor’s Office of Highway Safety HURF – Highway User Revenue Fund IGA – Inter-Governmental Agreement IT – Information Technology LP – Lease Purchase LTAF – Local Transportation Assistance Fund MPC – Municipal Property Corporation

6 Glossary of Acronyms NACOG – Northern AZ Council of Governments O&M – Operation & Maintenance P&Z – Planning & Zoning PANT – Prescott Area Narcotics Taskforce PSPRS – Public Safety Personnel Retirement System SAFER – Staffing for Adequate Fire and Emergency Response SCBA – Self Contained Breathing Apparatus SRO – School Resource Officer VLT – Vehicle License Tax WIFA – Water Infrastructure Finance Authority WWTP – Wastewater Treatment Plant YC – Yavapai County

7 FY 2015 Budget Summary

Budget Summary The budget process Base budget submission - $???? Meet with GMs and Department Managers Trim down the base budget 1 st Round of budget meetings- $109,000 Before Capital and Personnel Operating & Maintenance only After meeting with City Manager – ($1,000,000) Added personnel, reclassification, & capital Still operational base budget Asked all departments to cut up to 6% off their budgets Staffing Capital outlay Maintenance & operations Current budget - Balanced

Budget Summary New Personnel Requests

Budget Summary New Personnel Budgeted Safety Training Specialist – only if we get other communities to help fund Electrician – reduce the high amount of overtime currently being used by Charlie Transit Driver – ADOT grant funded, eliminated $13K from part-time drivers Administrative Assistant – requested by auditors to improve internal controls

Budget Summary Personnel Reclassifications The Drafter/Designer takes on much of the engineering design, drafting and review work for the entire City saving the city the substantial cost of having a consultant perform these services

Budget Summary Part-time Personnel Budgeted This positions to be available if grant funding is obtained through NACOG or other source

Budget Summary Personnel Status of Employee Benefits: Cost Of Living Adjustment (COLA) – 1.5% Merit program fully funded this fiscal year Longevity is not funded but will review in November 2014

Budget Summary Personnel Health insurance premiums increased by 9.0% City continues to fund a portion of dependent coverage No health insurance cost shift to employees Reserve the right to adjust during the year

Budget Summary Personnel - City no longer provides Core Plus Plan - All plans include basic life insurance coverage - City contributes $168 and $215 to the $1500 & $2500 HDHP, respectively

Budget Summary Personnel ASRS – 11.54% to 11.60% PSPRS Fire – 16.81% to 16.20% PSPRS Police – 29.88% to 29.83%

17 FY 2015 Capital Outlay <$35K

Budget Summary <$35K Capital Outlay

Budget Summary <$35K Capital Outlay

Budget Summary <$35K Capital Outlay

Budget Summary <$35K Capital Outlay

Budget Summary <$35K Capital Outlay

23 FY 2015 Capital Outlay $35K+

Budget Summary $35K+ Capital Outlay

Budget Summary $35K+ Capital Outlay

Budget Summary $35K+ Capital Outlay

Budget Summary $35K+ Capital Outlay

28 Major revenues update

Budget Summary

Budget Summary The Good Current GF reserve policies are being maintained Local economy showing continued signs of improvement Local sales tax is budgeted for an increase of 4.5% The Bad Two budget rounds with GMs and Department Managers ($1M+ deficit) Fund Balance Policy not being followed in other funds Costs growing faster than revenues Many expensive projects in the works Lack of additional revenue sources Too many demands on the City for support Outside agencies Schools County

31 Funding Outside Agencies

32 Funding Outside Agencies Core Services – organizations providing a core or mandatory service on behalf of the City, that the City would otherwise have to provide. Value Added Benefit Service – organizations providing an ongoing service that provides a value added benefit to the community, though not mandatory, would probably be provided by the City in some manner. Program Funding – organizations, not considered providing the services described above, seeking funding for a specific program, or event. Building Better Community Grants - $15,000 is budgeted

33 Funding Outside Agencies OrganizationFY 2014FY 2015 Old Town Association$15,000$10,000 Senior Center$55,000 Humane Society$44,320$43,880 Catholic Charities$15,000 Chamber of CommerceEstimate $108,000Proposed $110,000 Old Town Center for Arts$20,000 Boys & Girls Club$0 These organizations will be presenting on Tuesday June 10 th prior to wrap-up.

34 Water & Wastewater Rates

35 Water & Wastewater Rates There is still a strong need for rate adjustments Water needs to maintain Debt Service Coverage – Should be 1.35X Continue to look for efficiencies in both systems Moody’s & S&P statements are on-line Moody’s downgraded Cottonwood May 11, 2011 S&P downgraded Cottonwood June 12, 2013 Rate Study presentation is planned on July 1 st Notice of Intent to Increase will be presented at that time Any implementation is anticipated by October 1 st

36 Financing Needs

37 Financing Needs We are moving forward with financing in FY 2015 Refunding of the 2004 Water Bonds is planned for the November 2014 when they become callable

38 Reserve Funds Status

39 GF Reserve Funds Status 60 Days Coverage$2,539,900 Capital Accumulation Fund$1,000,000 Undesignated Reserves (this is our only cushion) $100,000 1% Sales Tax GF Capital $0 0.2% Sales Tax PS Capital Fund $0 Longevity Plan $0

40 Future Meetings Thursday, May 29 th at 6 p.m. Thursday, June 5 th at 6:00 p.m. Tuesday, June 10 th at 6:00 p.m. (backup date) Questions????