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Acting City Manager Overview City Council Work Session March 28, 2017
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Forming the FY 2018 Operating Budget Impacts: Revenue and Expenses
Major Revenue Impacts INCREASE in Real Estate Assessments for the third consecutive year; primarily driven by changes in the commercial and apartments & condominium markets Continued signs of economic recovery No new taxes, no changes in tax rates
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Forming the FY 2018 Operating Budget Impacts: Revenue and Expenses
Major Expense Considerations Increased Pension and Healthcare costs Salary adjustments, employee investment Contribution to Schools for salary adjustment Maintenance of programs and services, fuel increases
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City of Newport News FY 2018 Financial Plan Total Operating Budget
$1,005,803,187 Total Operating Budget $866,865,256 Capital Improvements Plan $138,937,931 General Fund General Fund Supported Projects Cash Capital Debt Service FY2014 FY 2014 FY2013 Operating Budget TOTAL $834.4m General Fund 414,521,000 Special Revenue Funds 235,632,712 Separate Funds 95,729,518 Waterworks 81,400,000 Vehicle and Equipment Services 12,951,600 CDBG 1,377,918 School Fund 281,041,170 Payments from other Funds -279,684,350 VES -138,956,087 Special Revenue Funds -140,728,263 Total 747,240,050 Capital Improvement Plan General Fund 49,782,000 User-Fee Funds 37,378,000 Total 87,160,000 Total Financial Plan 834,400,050 Add Back Payments from Other Funds 279,684,350 1,114,084,400 Separate Funds Waterworks Vehicle Services CDBG Funds Special Revenue Funds 24 Funds User-fee Supported Projects School Operating Fund
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Total Operating Budget OVERVIEW
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FY 2018 Operating Budget Composition
Increases in All Other Special Rev and Trust Animal Shelter $1.6m Debt Service $3.0m EIDA $5.6m Pension $2.7m Total $12.9m
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Real Estate Assessed Values
down ($1.6 billion) between FY 2010 and FY 2015 Budget Estimate
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State Reimbursement for Mandated Programs
State Revenue General Fund State Reimbursement for Mandated Programs State Revenue down ($8.4 m) between FY 2008 and FY 2015 -does not include State Grants funds beginning in FY 2016 Manager Rec Budget
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General Fund Support to Schools
$2.380 m in NEW Operating Dollars for Schools in FY 2018 Bottom line total City Funding remains level
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Newport News Public Schools
State Support for Newport News Public Schools Since FY Includes $9.7 m more in new City funding – 10% growth State support for NNPS down ($13m) between FY FY 2015 City Support Manager Rec Budget
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General Fund Revenue
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Change in General Fund Revenues
Increases in All Other Special Rev and Trust Animal Shelter $1.6m Debt Service $3.0m EIDA $5.6m Pension $2.7m Total $12.9m
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General Fund Revenues Increases in All Other Special Rev and Trust
Animal Shelter $1.6m Debt Service $3.0m EIDA $5.6m Pension $2.7m Total $12.9m
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FY 2018 Recommended Budget - $485.9 million
General Fund Revenue FY 2018 Recommended Budget - $485.9 million Impact of recession on the City’s revenue State revenue mainly is for DHS and correctional facilities, not Schools which is shown as revenue on Schools income statement.
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77% or $374m comes from 2 revenue streams
Impact of recession on the City’s revenue State revenue mainly is for DHS and correctional facilities, not Schools which is shown as revenue on Schools income statement.
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Real Estate Tax Rate 17
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Real Estate Tax Revenue
1.07% increase in overall Levy – Growth in Commercial, Apartments, Condos 80% of Homeowners will not see change Tax Rate to $1.22 * Includes PSC/Tax Relief/Delinquencies * Includes proposed Real Estate Tax Increase Budget Manager Rec
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General Fund Operating Budget Federal/State Grants – $4.15m
Tax Rate to $1.22 Federal/State Grants – $4.15m Fed/St Grants – $3.4m When we add a column for FY 2014 equal to $434m, will need to be able to explain components driving the $20m increase. Manager Rec Budget 19
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General Fund Expenses
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Health Insurance Premium increase Salary Adjustment, Merit-based
General Fund Expenditure Changes Pension increase Health Insurance Premium increase Salary Adjustment, Merit-based Local Support for Schools Fuel Increase Contractual Obligations Limited Program Changes, Corrective Actions
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General Fund Expenditures
Increases in All Other Special Rev and Trust Animal Shelter $1.6m Debt Service $3.0m EIDA $5.6m Pension $2.7m Total $12.9m
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FY 2018 Recommended Budget - $485.9 m
General Fund Expenditures FY 2018 Recommended Budget - $485.9 m Includes $2.380 m of new dollars for salary increase Community, Regional Support $11.2m Utilities, Vehicle Fuel $8.1m Contractual Services $20.6m Vehicle and IT Replacement $4.0m
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General Fund Expenditures FY 2018 Recommended Budget - $485.9 m
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Pension Costs – All Funds
$18.9m increase from FY 2011 $39.7 What is the plan to fully fund the ARC? What is the unfunded liability? Pension Reform Revised pension benefit New employees to VRS Manager Rec Budget
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Healthcare Costs – General Fund
Manager Rec Budget
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General Fund Positions
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FY 2018 Position Changes General Fund Other Funds Schools
New 6 positions No positions were eliminated Other Funds New 2 positions – one in Stormwater and one Wastewater Schools - Eliminate 36 positions through Attrition
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FY 2018 Major Adjustments $3.8 million $3.3 million
These two items equal all new General Fund Revenue ($7.1 m) for FY 2018 Average 3% Salary Adjustment $3.8 million Health Care Cost Increase $3.3 million Retirement Increases – NNERF and VRS $956,000 and $479,000 Homeless Day Service Center $320,000 Vehicle Fuel Increase $302,000 Increased HRT Costs – Operations & Route Changes $92,000 Recruitment Incentive – Police New Hires $50,000 Adjustment to Reclassification Pool Funding ($500,000) Decrease in Local and Federal Grant Matching ($700,000) Reduced One-Time Reserve for Fiber Purchase ($1.0 million) Debt Service Decrease ($1.8 million)
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FY 2018 Support for Strategic Priorities
Community Maintenance and Renewal Continued funding for demolition, neighborhood cleanup investments Economic Development and Redevelopment Support Cultural Attractions Fund, CNI Grant Support, New Planning Position Maximum Emphasis on Public Safety Funding for Youth and Gang Violence Initiative Create new EMS District for improved response time Additional Juvenile Services Positions Sustainable Local Governmental Policies Fleet Replacement Fiscal Management and Efficient Operations Met Pension Obligations and Cash Contribution in CIP Reorganization – Central Warehouse Inclusion of Federal and State Grant Funds
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Other Funds
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Local Funding for Schools
$118,300,000 Increased Operations funding - $2.380 million State revenue is estimated to increase by $917,635
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Waterworks $90,750,000 Operating increase of $2.0 m or 2.3% from the current fiscal year Increased Retirement and Health Insurance costs, Salary Adjustment, Payment in Lieu of Taxes, and support for the Department’s implementation of monthly billing for residential customers Demand for water becoming more stable No change in Water Rates Change to monthly service fee based on meter size - $17.40/$832 (Monthly) - $26.00/$1,657 (Bi-Monthly)
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Solid Waste $14,962,000 Operating increase of $19,000 or 0.13% from the current fiscal year Increased Retirement and Health Insurance costs, Salary Adjustment No change to the Solid Waste Fee is proposed in FY 2018
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Solid Waste $14,962,000
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Wastewater $22,599,000 Operating increase of $802,000 or 3.7% from the current fiscal year Increased Retirement and Health Insurance costs, Salary Adjustment Federally-mandated Regional Consent order continues to drive costs Addition of a Senior Construction Inspector to address the increased number of wastewater projects as a result of HRSD regionalization efforts Proposed change to the fixed monthly Wastewater Service Fee from a flat rate per month to a flat rate per meter size No change to the volume based Sewer User Fee
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Wastewater $22,599,000 Current Rate is $4.00 per month for all meters, regardless of size Proposed increase to the fixed monthly fee will increase the typical household annual cost for wastewater service by $6.00 Meter Size Wastewater Service Fee (month) 5/8” $4.50 3” $32.05 3/4" $6.12 4” $40.62 1” $10.07 6” $49.43 1.5” $16.40 8” $58.32 2” $23.80 10” $67.25
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Stormwater $21,783,000 Operating increase of $352,000 or 1.6% from the current fiscal year Impact of Federal and State Stormwater Regulation 2 major components MS4 – Municipal Separate Storm Sewer System TMDL – Total Maximum Daily Load; Chesapeake Bay Preservation Act One additional Crew Supervisor B position for the management and coordination of grass cutting at major outfalls Increased Retirement and Health Insurance costs, Salary Adjustment
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Stormwater $22,135,000 Stormwater Management Fee
Increase of $0.35 per Equivalent Residential Unit (ERU) per month; $4.20 per year
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Impact on Typical Household
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Next Steps
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City Council adopts Public Hearing Schedule
Topic-specific presentations during April Work Sessions Position Papers distributed by April 4th Budget available on City’s webpage at Print copies available at each public library and in the Budget & Evaluation Department FY 2018 Budget Advertisement for Public Hearings will be in the Daily Press on April 2nd and April 3rd Contact Department of Budget and Evaluation at
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Questions
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Thank You!
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Appendix
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Personal Property Taxes
Rate increase from $4.25 to $4.50 for FY 2013 Manager Rec Budget
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Machinery and Tools Taxes
Manager Rec Budget
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Sales Tax Manager Rec Budget
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Meal Tax Rate increase from 6.5% to 7.5% for FY 2013 Manager Rec
Budget
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Business, Professional and Occupational License Taxes
Manager Rec Budget
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