1. FY 2017 BudgetHearing September 8, 2016 Mike Loftin, Assistant City Manager - Finance 1

2. City Council Budget Schedule  June 23 – Budget and Capital Improvement Plan (CIP) Council Workshop #1  July – City Council members provided individual priorities to City Manager  July 28 – Proposed CIP distributed to City Council  July 28 – Budget and CIP Council Workshop #2  August 11 – Proposed Budget presented to City Council  August 25 – Proposed Budget and CIP Workshop #3 - Public Hearing on Tax Rate  September 8 - Council considers adoption of FY 2017 Budget and CIP - Public Hearings on Tax Rate and Budget  September 22 – Council considers adoption of Budget and CIP if necessary - Council adopts FY 2017 Tax Rate 2

3. Highlights – FY 2017 Overview  Operating Budget is $139.3 million including all operating funds -Up from $130.7 million in FY 2016 -$19.7 million in Special Revenue Funds carried over from FY 2016 -Capital Budget is $79.2 million for all programs and sources  Projected Balances -Operating funds have projected balances in FY 2017 of $37.1 million -Includes General Fund Balance contingency of $5.63 million; at request of Finance and Fiscal Affairs Committee, budget ordinance will require one public hearing before City Council can allocate these funds -General Fund also includes $2.29 million Pension Contingency and ninety day reserve of $12.8 million -Capital fund cash balances projected to be exhausted in FY 2017 -New bond sales required for continued progress in FY 2017 3

4. Revenue Highlights  No increase in water and sewer rates for FY 2017  Property tax rate going down from $0.529 to $0.526 due to GCAD increase in taxable value; Effective rate is $0.490728; Rollback rate is $0.526096 -7.7 percent revenue increase assumed over FY 2016  Sales tax revenue growth projected to be two percent over FY 2016  Hotel occupancy tax revenue assumed to show no growth over FY 2016  Other revenue is projected between no growth and 3 percent increase based on historical trends 4

5. Expenditure Highlights  Employee Compensation and Benefits -$1.38 million citywide for Police, Fire and civilian employees pay -$270,000 for potential health benefits increase -$1.2 million in General Fund for pay and health benefits -$2.3 million contingency for pensions  General Fund transfer to Infrastructure and Debt Service Fund increases $575,000 to $2.6 million: 5 percent of FY 2017 General Fund Budget  Bond sale proceeds -$12.3 million property tax supported bonds for Streets and Drainage requiring voter approval in November or May -$22.4 million in revenue supported Water and Sewer bonds requiring City Council approval 5

6. Program Highlights: Public Safety  Police: $749,000 operating budget increase -Seven new officers (COPS Ahead grant) -Two additional dispatchers -Realistic overtime budgets -Patrol car computers’ incremental replacement  Fire: $152,719 operating budget increase -Adequate funding for regular replacement of protective gear -Personnel cost including annualized cost of second Assistant Chief -Construction of new Fire Station #1 (with CDBG funds) 6

7. Program Highlights: Streets  Streets: $596,393 overall operating budget increase - 6.5 new positions and additional materials for crack seal crew and general street operations crew -CIP: $13.3 million for projects including streets milled and overlaid in-house  FY 2017 CIP: $14.6 million total (with Traffic) requiring $10.1 million in new bonds - 25 th Street from Broadway to Seawall -73 rd Street from Heards Lane to Avenue N ½, -Replacement of Strand pavers -45 th Street from Avenue O to Avenue S -26 th Street from Broadway to Church and Avenue N to Broadway -Updated streets assessment 7

8. Program Highlights: Traffic  Traffic: $349,301 operating budget increase -4 new positions for traffic operations and special events -25,000 feet of restriping through annual contract -$50,000 increase in Street Lighting electricity budget to $728,000 -CIP: $1.3 million -$1 million for Broadway Lighting Improvements, -Signal and intersection improvements at 61st and Seawall, and -Traffic signal synchronization at four intersections on 61 st and Stewart Road. 8

9. Program Highlights: Drainage  Drainage: $615,374 operating budget increase (net of improvements fund set aside) -Transfer of personnel from streets to drainage to focus more effort on drainage including ditch cutting and culvert setting -Storm sewer sediment and debris cleanout program through annual contract -Technology Improvement Fund project to bill runoff fee to all properties in the City -CIP: Inspection of storm sewer outfalls Avenue L at 62 nd Street and 63 rd Street -Investigation of retention/pumping strategy for Harborside drainage issues 9

10. Program Highlights: Water  Operating budget: $1.7 million increase -Gulf Coast Water Authority increase of $575,000 including balloon payment for contract revenue debt -New water valve testing, maintenance and replacement program including a new three person crew and annual contract ($1 million from CIP) -Fire hydrant program continues with repairs to 400 hydrants in FY 2017  CIP: $30.5 million in projects requiring $12 million in new bonds -Replace thirty inch 1890 water line from mainland with thirty six inch line ($7.8 million) -At 59 th Street pump station, rehab water tanks, construct new 7.5 million gallon storage tank, and design new twenty four inch water line to Airport with construction in FY 2018 ($14 million total) -Rehab wells at locations around city, rehab water tanks at 30 th Street Pump Station, build new lines on 30 th Street and Gulf Drive. 10

11. Program Highlights: Sewer  Operating Budget: $1.1 million increase -Additional sewer line cleanout crew -Net annual increase in cost for full year’s operation of new Wastewater Treatment Plant Operations including four operators, electricity and supplies ($850,000)  CIP: $20.6 million in projects requiring $10.4 million in new bonds -Lift station pump and electrical upgrades ($2 million) -Sewer rehab and repair ($1 million) -Pirates Beach WWTP reconstruction ($6.4 million) -Airport WWTP mitigation and recovery ($5.9 million) -Sludge removal from main WWTP ($1 million) -West End sanitary sewer improvements including design of Sunny Beach 8 Mile Road project ($2.9 million total) 11

12. Public Comment 12