2016 Budget

Estimated Beginning Balance$30,687,997
Estimated Revenues$19,333,843
Requested Appropriations$20,555,700
Estimated Ending Balance$29,466,140

Total 2016 Appropriations represent a decrease of $1,209,425 or 5.6% under 2015 total appropriations of $21,765,125.

Total Revenues and Expenditures

2015 ESTIMATED BUDGET COMPARED TO 2016 PROPOSED BUDGET

 2016 Budget2015 Estimate 
Total Revenues$19,333,843$18,060,601$1,273,242
Total Expenditures$20,555,700$21,765,125$(1,209,425)

The increase in total revenues can be attributed primarily to anticipated grant proceeds of $1.3M for traffic signal upgrades and sidewalk improvements.

The decrease in the total expenditures is partially a result of paying off the $2.8M in notes during 2015, which were issued for land acquisition at the Gateway Redevelopment Area.

Revenue Assumptions

  • Income Taxes are estimated at $8.26M, 1% over the amount estimated for 2015 collections.
  • Real Estate Property tax are estimated to be 1% more than 2015.
  • Total Local Government Fund (LGF) revenues are estimated at $121,000.
  • All other revenue sources including Investment Income, the Gasoline Tax and Motor Vehicle Registration Fees are estimated to remain flat.

Property Tax Collections

Assessed Valuation

Income Taxes

General Fund

Targeted Fund Balances

  • General Fund – established as 6-12 months of operating expenditures.
  • Fire/EMS Levy Fund – established as 6-12 months of operating expenditures.
  • Arts and Amenities Fund – established at $376,237, the corpus of original donation.
  • General Bond Retirement Fund – established as the subsequent year’s debt service payments for principal and interest.
  • Capital Improvement Fund – established as $1 million.

General Fund for 2016

Estimated Beginning Balance$14,370,252
Budgeted Revenues$9,775,890
Budgeted Expenditures$10,012,171
Estimated End Balance$14,133,971
Reserve Balance - 12 months$10,012,171
Net Reserve Variance$4,121,800

General Fund Appropriations represent an increase of $225,206 or 2.3% over 2015 Appropriations of $9,786,965 and $777,897 or 8.4% over the 2015 estimate of $9,234,274.

Estimated revenues represent an increase of $160,251, or 1.7% over 2015 estimate of $9,615,639.

Charter Levy

  • Article IX, Sections 9.01 “Taxes” and 9.02 “Extra Levy” provide that Council by Resolution may increase the Charter Levy up to 5 mills.
  • The current millage authorized under the Charter is 4.5 mills; City Council can authorize an additional .5 mills.
  • An additional .5 mill would generate approximately $250,000 for the General Fund.

Funds Requiring Transfers from the General Fund

  • For the years 2016-20 approximately $3.45M from the 101-General Fund will be transferred.
  • $2.98M to 261-Street Construction Maintenance and Repair Fund to support Public Works, and
  • $75,000 to 275-Municipal Pool Fund for Municipal Pool operations.

Personnel Costs

  • The Fraternal Order of Police (Police) labor agreement expires in June 30, 2016; 1% in January 2016.
  • The American Federation of State, County and Municipal Employees (Public Works) agreement expires August 31, 2017; 1% in January 2016 and 2.5% in September 2016.
  • International Association of Firefighters (Fire) agreement expired March 31, 2015 and is currently in negotiations.
  • Non-bargaining unit employees – 1% in January 2016.

Health Care Costs

  • Total medical insurance premiums decreased an average of 5.0% from the previous plan. The benefit of the decrease is shared by the City and employees through the “caps” established for health insurance costs.
  • City’s total contributions to fund medical  and dental insurance premiums is budgeted at $893,000 in 2016, increasing to $1.2M in 2020. Future increases are based on annual increases of 10% for medical and 3% for dental insurance.

Solid Waste and Recycling Cost

  • City entered into multi-year waste/recycling contract with Rumpke for 2011 through 2013 with options to extend the contract through 2017. The current cost of services is approximately $598,650/year.
  • $3.2M has been programmed over 5 years, $611,587 in 2016 and 2017, $642,166 in 2018 and 2019 and $674,274 in 2020 to fund this service.
  • The current contract with Rumpke will need to be re-bid for 2018.

Fund 223 – Fire Levy Fund

Estimated Beginning Balance$3,715,244
Estimated Revenues$2,373,074
Total Available$6,088,318
Estimated Expenditures$2,762,110
Estimated End Balance$3,356,208
Months in Expenditures14

  • Included in Targeted Cash Balance Fund Policy with 6-12 months of operating expenses in reserve.
  • Revenues generated primarily from Property Taxes.
  • Consideration may need to be given for placing on the ballot a “replacement” fire levy in 2017.

Fund 261 –Street Construction, Maintenance and Repair Fund

Estimated Beginning Balance$656,495
Estimated Revenues$862,584
Total Available$1,519,079
Estimated Expenditures$982,458
Estimated End Balance$536,621
Months in Expenditures6.5

  • Not a Targeted Cash Balance Fund but requires review to determine the need for adequate sources to maintain City roads and highways.
  • Revenues generated from Gasoline Tax , Vehicle Registration Fees and transfers from General Fund.
  • Consideration in the future should be given to implementing the additional $5 Motor Vehicle Fee ($50K annually) to support operations.

Fund 324 – General Bond Retirement

Estimated Beginning Balance$298,315
Estimated Revenues$333,472
Total Available$631,787
Debt Expenditures$11,900
Estimated End Balance$619,887
Reserve Balance$0
Variance$619,887

  • In 2016, 4% of income taxes are allocated to debt retirement.
  • Debt Service in 2016 has been reduced to $0.
  • General Obligation Debt Outstanding 12/2016 – $0.

Fund 410 – Capital Improvement Fund

Estimated Beginning Balance$3,856,591
Estimated Revenues$3,084,562
Total Available$6,941,153
Capital Expenditures$3,790,556
Estimated End Balance$3,150,597
Reserve Balance$1,000,000
Variance$2,150,597

  • In 2016, 20% of income tax revenues are allocated for capital improvements.
  • See Capital Improvement Program for complete list of projects budgeted in 2016.

Fund 485 – Arts & Amenities Fund

Estimated Beginning Balance$622,783
Estimated Revenues$24,300
Total Available$647,083
Estimated Expenditures$75,950
Estimated End Balance$571,133
Reserve Balance$376,237
Variance$194,896

  • Revenues generated from Sister City Sales and Investment Income.

Road Improvements

Annual Resurfacing (includes $100,000 hydrants)$900,000
Crack Sealing & Surface Treatment$200,000
Curb & Sidewalk Repairs$87,500
Guard Rail Repairs & Replacement$25,000
Drainage Projects$80,000
Traffic Signal System Fiber Optic Upgrades- Cooper & Delray$1,062,436
Ross Ave Sidewalk$200,000
Sidewalk Installation - Montgomery Rd.$622,200
Engineering-2017 Sidewalk Installation Project$50,000
Renovation of Public Works Facility$75,000
Contingency$30,000
Total$3,332,136

Park Improvements

Asphalt Path Repairs$10,000
Parking Lot Repairs and Striping$10,000
Resurface Basketball Courts$15,000
Installation and Relocation of Playground Equipment$12,000
Replace Annex Roof$9,000
Total$56,000

Technology Improvements

Replace network cabling$15,000

Vintage Club Debt Service

  • Programmed in the 2016 budget is the debt service associated with the $13,265,000 in special obligation bonds issued for the construction of a public road and public garage.
  • Annual debt service programmed in 2016 is $521,353 for interest expense and payment of principal in the amount of $200,000.
  • Debt service is paid from the PILOTS (payments in lieu of taxes) from the residential properties and the commercial properties south of Vintage Club Boulevard.

Downtown Improvement Fund

  • In 2009 $1M and in 2012 $1.75M was transferred into this fund from the General Fund in anticipation of earmarking monies for the redevelopment of the City’s Gateway or Heritage District.
  • The City has expended a total of $5.6M from this fund for the purchase of real estate associated with the Gateway Redevelopment Area.
  • Current cash balance in this fund is $1.9M. At this time there are no line items programmed in this fund for the Gateway Redevelopment Area for 2016

Discussion Topics

  • Proposed uses for cash balance in the Downtown Improvement Fund.
  • Vintage Club North and Gateway Redevelopment Area and their impact on forecasted budgets.
  • Consideration  given to a replacement levy for fire operations in 2017 or 2018.
  • When finalized, 2016-2021 Strategic Plan financials will need incorporated into future budgets.
  • $5 motor vehicle registration fee.

2016 Annual Budget Timeline

  • October 7 – 1st Reading
  • November 4 – 2nd Reading
  • December 2 – 3rd Reading
  • December 16 – Appropriations to amend 2015 Budget.

Montgomery Open Checkbook