2015 Budget

Estimated Beginning Balance$30,563,741
Estimated Revenues$18,123,463
Requested Appropriations$19,288,343
Estimated Ending Balance$29,398,861

Total 2015 Appropriations represent a decrease of $11,017,650 or  36.4% under 2014 total appropriations of $30,305,993, the result of appropriations for the Vintage Club development and Gateway Redevelopment Area.

Total Revenues and Expenditures

2014 ESTIMATED BUDGET COMPARED TO 2015 PROPOSED BUDGET

 2015 Budget2014 Estimate 
Total Revenues$18,123,463$20,486,907$(2,363,444)
Total Expenditures$19,288,343
$30,305,993 $(11,017,650)

A majority of decrease in total revenues can be attributed to the issuance of $2.8M in notes for the Gateway Redevelopment Area and a lesser degree to reductions in estate tax, Local Government Fund and reduced property tax collections.

The decrease in the total expenditures are mostly attributed to construction of  the road Improvements and the garage at the Vintage Club which was programmed in the 2014 budget

 

 2015 Budget2014 Estimate 
Total Revenues$18,123,463$17,686,907$436,556
Total Expenditures$19,288,343$18,733,993$554,350

The differences between this table and the previous are attributed to the $2.8M note for the purchase of the Gateway Redevelopment Area and the 2014 expenditure estimate has been reduced by the $5.9M in the Vintage Club Capital Construction Fund and $5.7M in the Downtown Improvement Fund.

 

2014 ANNUAL BUDGET COMPARED TO 2015 PROPOSED BUDGET

 2015 Budget2014 Estimate 
Total Revenues$18,123,463$17,349,942$773,521
Total Expenditures$19,288,343$18,614,752$673,591

The increase in total revenues can be attributed to increases in income tax, pool revenue, TIF and property tax revenues.

The increase in the total expenditures are attributed to increases in personnel related costs, which consists of increases in health, dental and life insurance premiums and pay increases.

Revenue Assumptions

  • Income Taxes are estimated at $7.97M, 2% over the amount estimated for 2014 collections.
  • Real Estate Property tax are estimated to  be 3% or $60,000 more than 2014.
  • Total Local Government Fund (LGF) revenues are estimated at $142,000.
  • Estate Taxes budgeted at $0.
  • 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.
  • Capital Improvement Fund – established as $1 million.
  • General Bond Retirement Fund – established as one year of debt service payments for principal and interest.
  • Arts & Amenities Fund – established at $376,237, the corpus of original donation.

General Fund for 2015

Estimated Beginning Balance$14,993,905
Budgeted Revenues$9,460,492
Budgeted Expenditures$9,786,965
Estimated End Balance$14,667,432
Reserve Balance - 12 months$9,786,965
Net Reserve Variance$4,880,467

Months in Reserve Fund Balance: about 18

General Fund appropriations represent an increase of $346,896 or 3.7% over 2014 appropriations of $9,440,069 and $684,493 or 7.5% over the 2014 estimate of $9,102,472.

Estimated revenues represent an increase of $106,891, or 1.1% under 2014 estimate of $9,353,601.

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, Council can authorize an additional .5 mills.
  • An additional .5 mill would generate approximately $250,000 for the General Fund.

Departments Requiring Transfers from the General Fund

  • For the years 2015-19 approximately $2.8M from the 101-General Fund will be transferred
  • $2.58M to 261-Street Construction Maintenance and Repair Fund to support the Public Works
  • $95,000 to 275-Municipal Pool Fund for Municipal Pool Operations

Personnel Costs

  • Fraternal Order of Police (Police) labor agreement expires in June 30, 2016, 2%  in July 2015 and 1% in January 2016.
  • American Federation of State, County and Municipal Employees (Public Works) agreement expired  August 31, 2014 and is currently in negotiations for a new agreement, which would expire in August 2017.
  • International Association of Firefighters (Fire) agreement expires March 31, 2015.
  • Exempt employees – 1% in 2014.

Health Care Costs

  • Total medical insurance premiums decreased an average of 6.9% 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 $1M in 2015, increasing to $1.4M in 2019.  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.  The current cost of services is approximately $572,953/year.
  • $3.0M has been programmed over 5 years, $572,953 in 2015 increasing to $593,587 in 2016 and 2017 and $623,266 in 2018 and 2019, to fund cost of this service.
  • The current contract with Rumpke expires in 2017 and will need to be re-bid.

Fund 324 – General Bond Retirement

Estimated Beginning Balance$291,931
Estimated Revenues$316,845
Total Available$608,776
Debt Expenditures$42,000
Estimated End Balance$566,776
Reserve Balance$42,000
Variance$524,776

  • In 2015, 4% of income taxes  is allocated to debt retirement.
  • Debt Service in 2015 has been reduced to $42,000, which is primarily the cost of interest on the 2014 issue of $2.8M in notes for the Gateway Redevelopment Area.
  • General Obligation Debt Outstanding 12/2015 – $2.8M.

Fund 410 – Capital Improvement Fund

Estimated Beginning Balance$3,700,111
Estimated Revenues$2,441,167
Total Available$6,141,278
Capital Expenditures$2,996,902
Estimated End Balance$3,144,376
Reserve Balance$1,000,000
Variance$2,144,376

  • In 2015,  20% of income tax revenues are allocated for  capital improvements.
  • See CIP for complete list of projects  budgeted in 2015.

Fund 485 – Arts & Amenities Fund

Estimated Beginning Balance$605,466
Estimated Revenues$33,000
Total Available$635,766
Estimated Expenditures$84,000
Estimated End Balance$554,466
Reserve Balance$376,237
Variance$178,229

  • Revenues generated from Sister City Sales and Investment Income.
  • A public art project at the Corner of Montgomery and Hopewell Roads planned for 2015.

Fund 223 – Fire Levy Fund

Estimated Beginning Balance$4,070,115
Estimated Revenues$2,129,272
Total Available$6,199,387
Estimated Expenditures$2,445,725
Estimated End Balance$3,753,662
Months in Expenditures18

  • Included in Targeted Cash Balance Fund Policy with 6-12 months of operating expenses in reserve.
  • Revenues generated 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$771,604
Estimated Revenues$957,064
Total Available$1,728,668
Estimated Expenditures$1,062,028
Estimated End Balance$666,640
Months in Expenditures7.5

  • 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.

Road Improvements

Annual Resurfacing (includes $100,000 hydrants)$850,000
Crack Sealing & Surface Treatment$200,000
Curb & Sidewalk Repairs$83,000
Guard Rail Repairs & Replacement$25,000
Drainage Projects$75,000
Traffic Signal System Fiber Optic Upgrades- Cooper & Delray$1,061,802
Ross Ave Sidewalk$152,000
Cornell Rd Sidewalk Phase II$70,000
Engineering-2016 Traffic Signal Project$35,000
Contingency$30,000
Total$2,581,802

Park Improvements

Asphalt Path Repairs$10,000
Parking Lot Repairs and Striping$10,000
Resurface Basketball Courts$8,000
Replace Annex Roof$20,000
Total$48,000

Technology Improvements

Telephone System$45,000
Safety Center Network Cabling$15,000
Total$60,000

Vintage Club Debt Service

  • Programmed in the 2015 budget is the debt service associated with the $13,265,000 in special obligation bonds issued for the construction of a road and public garage.
  • Annual debt service programmed in 2015 is $522,103 for interest expense and payment of principal in the amount of $100,000.
  • Debt service is paid from the PILOTS (payments in lieu of taxes) from the residential  and the south of the road commercial properties.

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.
  • In 2014, the City issued $2.8M in notes and has expended total to date of $5.6M from this fund for purchase of real estate associated with the Gateway Redevelopment Area.
  • Current cash balance in this fund exceeds $2M, however, there are no line items programmed in this fund for the Gateway Redevelopment Area for 2015.

Strategic Plan Goal 6 Facilities Preliminary Discussion

Pool and Safety Center Parking Lot Expansion

  • Forecasted Budgetary Impact: $66,000
  • Potential Funding Sources: Capital Improvement Fund
  • Projected Date for Implementation: 2015 or 2016

Proposed Safety Center parking lot expansion

 

Public Works Facility Expansion

  • Forecasted Budgetary Impact: $500,000
  • Potential Funding Sources: Capital Improvement Fund
  • Projected Date for Implementation: 2018 or 2019

Public Works Improvements

 

City Council Chambers Remodeling

  • Forecasted Budgetary Impact: $80,000
  • Potential Funding Sources: Capital Improvement Fund
  • Projected Date for Implementation: 2016 or 2017

Old Council Chambers

 

Goal 6 Impact on City’s Five Year Cash Flow in the Capital Improvements Budget

 2015 Request2016 Forecast2017 Forecast2018 Forecast2019 Forecast
Proposed Beginning Balance$3,700,111$3,144,376$2,876,258$2,940,280$2,933,758
Proposed Total Revenues$2,441,167$2,105,202$1,623,316$1,639,349$1,655,542
5250 - Refunds and Reimbursements$30,000$30,000$30,000$30,000$30,000
Proposed Subtotal 5405 Capital Equipment$227,000$173,120$70,994$140,871$70,002
Proposed Subtotal 5470 Capital Projects$2,739,402$2,170,200$1,458,300$1,475,000$1,459,300
Pool/Safety Center Parking Expansion$66,000$66,000$66,000$66,000$66,000
Public Works Facility Expansion$500,000$500,000
City Hall Council Chambers Remodeling$80,000$80,000$80,000$80,000
Cumulative Impact of Goal 6$66,000$146,000$146,000$646,000$646,000
Subtotal 5470 Capital Projects$2,805,402$2,316,200$1,604,300$2,121,000$2,105,300
Total Capital Projects$3,602,902$2,519,320$1,705,294$2,291,871$2,205,302
Ending Balance$3,078,376$2,730,258$2,794,280$2,287,758$2,383,998
Reserve Fund Balance$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000
Unreserved Fund Balance$2,078,376$1,730,258$1,794,280$1,287,758$1,383,998

Discussion Topics

  • Proposed uses for cash balance in the Downtown Improvement Fund.
  • Discussion of potential facilities related issues as drafted by the Strategic Plan Goal 6 team.
  • Consideration  given to a replacement levy for fire operations in 2017.
  • Rebid Garbage Contract in 2017.
  • .5 mills of charter millage & $5 vehicle license fee.

2015 Annual Budget Timeline

  • 1st Reading, October 1, 2014
  • 2nd Reading, November 5, 2014
  • 3rd Reading, December 3, 2014
  • December 17, 2014-Appropriations to amend 2014 Budget.

Montgomery Open Checkbook