1. FY 2016 Budget and Capital Improvement Plan

2. FY 2016 Budget and CIP Overview  Today is third of four City Council Workshops with Budget and CIP discussion General Fund status report and recommendations Enterprise Funds overview with focus on water, sewer, and recycling rates July 23 rd workshop to address remaining questions and concerns including more information on water and sewer rates  Proposed Budget to be submitted to City Council August 11 th and covered in City Council workshop on Thursday, August 13 th

3. FY 2016: General Fund Operating Budget Status  Reduced from forecasted amount of $49.1M to $48.4M  Cost increases/revenue losses include: 2% raise - $977K Adjusting employees to minimum General Fund - $92K Street light costs caused by change in rate tariff - $400K County Services (Inmate housing and animal control) increasing $246K Infrastructure and debt service transfer - $543K (increase in set aside) Loss of salary reimbursements - $600K (Police, CDBG, & other) Island Transit subsidy up $50K  Strategies/revenues Applied vacancy rates to salaries and benefits Adjusted non-personnel accounts based on spending history and current need  Current services with emphasis on Council goals

4. FY 2016: General and Special Fund Capital  General Fund Operating Budget: $1M for replacement vehicles  General Fund Balance Recommendations: FY15 ending balance projected to be $17.4M; $6.2M over 90 day minimum Fund $1.5M Fire ladder truck: raise ISO rating from 2 to 1 Fund planning and building inspection software packages to fund electronic building plan review, automate business licensing, and enable work station in-the-field capability - $318K  Fund ARCGIS and related Police Department technology costs from FY 2016 DEA Forfeiture Special Revenue Fund Budget

5. FY 2016: City Manager’s Recommendations Potential Sources:  Annual property tax increment from TIRZ 11 (starting in FY17) - $900K  TIRZ 11 cash balance, City share - approximately $2M  One cent on property tax rate - $414K *Ladder truck personnel cost not included in recurring cost in FY16 projection ($500K recurring annually) *

6. FY 2016: City Council Direct Reports  Recommended for Council consideration: City Secretary: iPads for Council and staff - $7,000 City Attorney: Deputy City Attorney - $149,672 City Auditor: Additional consulting support for audits - $30,000

7. FY 2016: Galveston Police Department A.City Manager Recommended: I.Civilianization of existing personnel i.Communications Specialist (1) ii.Budget Analyst (1) iii.Mechanic (1) iv.Brady Records Specialists (2) v.Records Manager (1) II.Additional Police personnel i.Commercial Vehicle Enforcement Patrol Officers (2) a.Revenue Neutral: write into ordinance ii.Operations Bureau Motor Officer (1)

8. FY 2016: Galveston Police Department DescriptionImpact Council Priority Recurring Cost One-Time Cost Total Civilianization of Existing Personnel for Force Multiplication Communications Specialist (1) Will perform work currently performed by GPD Sergeant (20-30 hours per week) Public Safety$70,680$0$70,680 Budget Analyst (1) Will perform work currently performed by GPD Captain (20-30 hours per week) Public Safety $72,620$0$72,620 Mechanic (1) Will be funded through Central Garage and devoted to public safety vehicle maintenance Public Safety$40,856$0$40,856 Brady Records Specialist (2) Completes work otherwise performed by Detectives (equivalent of 2.12 FTE's) Public Safety$100,397$2,400$102,797 Records Manager (1) Replaces 1 sworn officer to Operations who is currently performing these duties Public Safety$55,465$1,200$56,665 SUBTOTAL$340,018$3,600$343,618

9. FY 2016: Galveston Police Department DescriptionImpact Council Priority Recurring Cost One-Time Cost Total Additional Police Personnel Commercial Vehicle Enforcement Patrol Officer (2) Increase traffic safety and compliance with commercial motor vehicles; creates self- sufficient unit offsetting personnel, fleet, & equipment costs due to the City being allowed to recover 110% of enforcement costs from fines and fees Public Safety$176,618$42,400$219.018 Operations Bureau Motor Officer (1) Increased traffic safety and enforcementPublic Safety$82,889$21,200$104,089 SUBTOTAL$259,507$63,600$323,107 POLICE TOTAL$599,525$67,200$666,725

10. FY 2016: Galveston Fire Department A.City Manager Recommended: I.Additional Personnel i.Assistant Fire Chief – Training & Support Services (1) II.Additional Equipment i.Ladder Truck (1)

11. FY 2016: Galveston Fire Department DescriptionImpact Council Priority Recurring Cost One-Time Cost Total Additional Fire Personnel Assistant Fire Chief – Training & Support Services (1) Position will manage all training, compliance, and equipment management Public Safety$89,800$0$89,800 Additional Fire Equipment Ladder Truck (1) Better protect the far West End and improve City’s ISO rating (Recommendation: fund with General Fund Balance or potentially TIRZ 11 balance as one-time purchase) Public Safety/ Insurance Rates $0$1,500,000 TOTAL$89,800$1,500,000$1,589,800

12. FY 2016: Parks & Recreation Department A.City Manager Recommended: I.Additional Personnel i.Beautification Crew (3) II.Additional Equipment i.72” Deck Mower (1)

13. FY 2016: Parks & Recreation Department DescriptionImpact Council Priority Recurring Cost One-Time Cost Total Additional Parks & Rec Personnel Beautification Crew (3) To enhance appearance of public spaces for residents and visitors Beautification Initiative $102,903$0$102,903 Additional Parks & Rec Equipment 72” Deck Mower (1) Mowing Gateways (entrances/exits to/from Galveston) Beautification Initiative $0$30,000 TOTAL$102,903$30,000$132,903

14. FY 2016: Streets Department A.City Manager Recommended: I.Additional Equipment for Street Maintenance i.Construction Broom (1) ii.Skid Steer (1) iii.Backhoe (1)

15. FY 2016: Public Works Department DescriptionImpact Council Priority Recurring Cost One-Time Cost Total Additional Streets Division Equipment Construction Broom (1) Clear roadway prior to laying asphalt Infrastructure$0$75,000 Skid Steer (1)Street and roadway maintenanceInfrastructure$0$60,000 Backhoe (1)Street and roadway maintenanceInfrastructure$0$100,000 TOTAL$0$235,000

16. FY 2016: City Manager’s Recommendations Potential Sources:  Annual property tax increment from TIRZ 11 (starting in FY17) - $900K  TIRZ 11 cash balance, City share - approximately $2M  One cent on property tax rate - $414K *Ladder truck personnel cost not included in recurring cost in FY16 projection ($500K recurring annually) *

17. Waterworks and Sewer Fund Cost Drivers  Gulf Coast Water Authority Board has approved FY 2016 GCWA Budget with $2.2M in added costs to City of Galveston effective October 1  Added water supply - $774K  Capital renewal (some deferred) in Thomas Mackey plant - $445K  Plant M&O costs funded last year with cash balance - $495K  COG water line study and capital investment - $494K  Excessive rainfall: Water sales down reducing water ($1.1M) and sewer ($547K) fund revenue  Rain January-June is 15 inches ahead of normal (38” versus 23”)  Debt Service and pay as you go capital projects (CIP presented previously)  Measured effect of 2% core inflation, 1% growth and reserve starting at 60 days and growing to 120 days by FY21

18. FY 2016: Components of Waterworks Rate Adjustments

19. FY 2016: Components of Sewer Rate Adjustments

20. FY 2016: Preliminary Residential Bill Impacts

21. FY 2016: Recommendations  Mitigate water and sewer increase impact with inclining rate design at lower consumption levels to promote conservation and protect low volume users from near term rate increase  Scale base fees by meter size bringing system capacity into the rate calculation  Recalibrate the current block rate structure for larger residential users and commercial users  Move recycling center budget from Drainage Fund to free up $554K in revenue for use on drainage CIP - $1.96/month on bill

22. FY 2016: City Manager’s Recommendations Potential Sources:  Annual property tax increment from TIRZ 11 (starting in FY17) - $900K  TIRZ 11 cash balance, City share - approximately $2M  One cent on property tax rate - $414K *Ladder truck personnel cost not included in recurring cost in FY16 projection ($500K recurring annually) *