Loading...
07-22-1992 (City Council) Agenda Packet eil0A/LaVIL) Of2(a< ..% CCU ,/, WYLIE WATER SYSTEM NEEDS PRIORITY LIST OF IMPROVEMENTS FISCAL YEAR 1991 - 1992 1 . Upgrade pump controls "Telemetry" $- lO 000 under construction 2. Paint Steel Road Storage Tank and remove dirt from base of tank to prevent corrosion. $ 23, 000 I , 4 3. Paint Nortex Storage Tank �,�� t1)( tit Ut2 `Vag- $ 34, 00 ----� � 4. Replace 25 fire hydrants around old section $ 45, 000 of town. 5. Install 3, 300 l . f . of 8" water lines to fill existing gaps in system. $ 80, 000 6. Install 7, 500 I . f . of 12" water lines to fill ** existing gaps in system. $225, 000 7. Set up maintenance schedule for all valves. (No cost) 8. Set up maintenance schedule for all fire hydrants. (No cost) TOTAL $417, 000 * Example streets: JACKSON, FIRST, OAK, SECOND, & MASTERS ** Example streets: BROWN, ALANIS, STONE, McMILLAN (Southfork M.H.P.) FM 544 (Steel Rd. System) Wattt bos5 J1 Hice P/L6,61-16,1,(tez,f , / U4 -1 f f/J i" / t4/ NEWPORT HARBOR WATER PRESSURE SOLUTIONS Existing System Upgrade Option 1 : Booster Pump Station (F. M. 1378) $ 43, 375 Option 2: Ground Storage Reservoir and Pump Station (Newport Harbor ) $176, 760 Option 3: Nortex Pump Station - Back Pressure Sustaining Valve & Pump Controls $ 37, 812 * Option 4: 8" Loop Line ( 11 , 500 l . f . ) $207, 625 Wylie Northeast WSC Agreement Option 1 : 8" Tie-in ( 1 , 900 1 . f. ) $ 43, 080 Option 2: 12" Tie- in ( 1 , 900 1 . f . ) $ 71 , 760 LEGAL DESCRIPTION APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ CURRENT APPRAISED ANNUAL DOLLAR AT.5125 TAX RATE AT.555 TAX RATE AT.6150 TAX RATE AT.6150 TAX RATE VALUE DIFFERENCE 1988-89 1989-90 1990-91 1991-92 W/615.,.635,.655 1 Quail Hollow#1 22,000.00 13,500.00 10,000.00 10,000.00 10,000.00 1 Blk. F.,Lot 13 122.10 83.03 61.50 61.50 .615-61.50 - .635-63.50 2.00 .655=65.50 4.00 Pointe North#2 18,000.00 91,970.00 87,498.00 87,498.00 92,398.00 Blk. C., Lot 13 92.25 510.43 538.11 538.11 .615=568.25 - .635-586.73 18.48 .655-605.21 36.96 Point North#1 99,314.00 96,815.00 82,706.00 82,706.00 82,018.00 Blk. L.,Lot 13 508.98 537.32 508.64 508.64 .615-504.41 - .635-520.81 16.40 .655-537.22 32.80 Wyndham Est. #1 71,307.00 69,858.00 66,133.00 66,133.00 66,250.00 Blk.C.,Lot 2 365.45 387.71 406.72 406.72 .615-407.44 - .635-420.69 13.25 .655-433.94 26.50 Meadows of Wylie 63,335.00 63,534.00 56,991.00 56,991.00 56,533.00 BIk. 1,Lot 19 324.59 352.61 350.49 350.49 .615-347.68 - .635-358.98 11.30 .655-370.29 22.60 • Trailsplace Addn. 20,000.00 20,000.00 20,000.00 18,000.00 18,000.00 BIk.A., Lot 13 102.50 111.00 123.00 110.70 .615- 110.70 - .635- 114.30 3.60 .655- 117.90 7.20 Rush Creek#2 20,000.00 9,500.00 9,500.00 9,500.00 9,500.00 Blk. C.,Lot 13 102.50 58.43 58.43 58.43 .615-58.43 - .635-60.33 1.90 .655=62.23 3.80 LEGAL DESCRIPTION APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ CURRENT APPRAISED ANNUAL DOLLAR AT.5125 TAX RATE AT.555 TAX RATE AT.6150 TAX RATE AT.6150 TAX RATE VALUE DIFFERENCE 1988-89 1989-90 1990-91 1991-92 W/615.,.635,.655 Rustic Oaks#3 100,031.00 106,283.00 94,742.00 91,925.00 90,523.00 BIk. B.,Lot 13 512.66 589.87 582.66 565.34 .615-556.72 - .635-574.82 18.10 .655-592.93 36.20 9 Oaks#4 74,683.00 73,106.00 66,522.00 66,522.00 68,644.00 Blk. B Lot 13 382.75 405.74 409.11 409.11 .615-422.16 - .635-435.89 13.73 .655=449.62 27.46 Kinsington Manor#5 83,867.00 70,067.00 68,124.00 68,124.00 67,559.00 BIk A., Lot 1 429.82 388.87 418.96 418.96 .615-415.49 - .635=429.00 13.51 .655-442.51 27.02 Westwind Meadows#2 93,180.00 85,427.00 82,949.00 82,949.00 82,229.00 BIk. I,Lot 25 477.55 474.12 510.14 510.14 .615-505.71 - .635-522.15 16.44 I .655-583.60 32.88 Oak#2 65,864.00 64,833.00 58,988.00 58,988.00 58,515.00 BIk. B.,Lot 13 337.55 359.82 362.78 362.78 .615-359.87 - .635-371.57 11.70 .655=383.27 23.40 Rush Creek Est. 96,086.00 93,868.00 89,213.00 89,213.00 88,837.00 Blk. B, Lot 13 492.44 520.97 548.66 548.66 .615-546.35 - .635-564.11 17.76 .655-581.88 35.52 Oaks#1 80,807.00 80,916.00 73,658.00 73,632.00 79,820.00 Blk. A,Lot 1 414.14 449.08 453.00 452.84 .615=490.89 - .635-506.86 15.97 .655=522.82 31.94 i I LEGAL DESCRIPTION APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ CURRENT APPRAISED ANNUAL DOLLAR AT.5125 TAX RATE AT.555 TAX RATE AT.6150 TAX RATE AT.6150 TAX RATE VALUE DIFFERENCE 1988-89 1989-90 1990-91 1991-92 W/615.,.635,.655 Wylwood Est.#3 78,007.00 76,178.00 74,006.00 71,057.00 67,753.00 Blk. 6,Lot 13 399.79 422.79 455.14 437.00 .615=416.68 - .635=430.23 13.55 .655=443.78 27.10 Russell Addn. 25,527.00 23,906.00 23,503.00 23,495.00 23,302.00 Blk. 1,Lot 5 130.83 132.68 144.54 144.49 .615= 143.31 - .635= 147.97 4.66 .655= 152.63 9.32 Railroad 52,379.00 48,849.00 47,513.00 51,264.00 50,825.00 Blk. 30,Lot 15 268.44 271.11 292.20 315.27 .615=312.57 - .635=322.74 10.17 .655=332.90 20.34 Abstract 267,Lot 10 616,068.00 609,568.00 609,568.00 547,200.00 547,200.00 Davidson E. Survey 3,157.35 3,383.10 3,748.84 3,365.28 .615=3,365.28 - .635-3,474.72 109.44 .655-3,584.16 218.88 COMMERICAL AND RESIDENTIAL,WATER RATES EFFECTIVE EFFECTIVE EFFECTIVE CURRENT PROPOSED CURRENT / PROPOSED 10/01/88 11/01/90 03/01/91 07/01/92 NEW RATE MONTHLY AVERAGE # Of Customers 2,666 2,739 3,363 3,479 3,479 Base Rate 6.50 7.15 4. 84 4.84 7.15 0 - 1,000 gal. - - 1,001 - 2,000 1.82 1.82 1. 82 1.82 1.82 2, 001 and up 2.40 2.55 2.55 2.55 2.55 Residential/Monthly - 57 718.91 (2921 Customers) 64,466.47 19.76 22.07 Commerical/Monthly - 3,716.20 (558 Customers) 3,716.20 6. 66 6.66 TOTAL MONTHLY 61,435.11 68,182.67 26.42 28.73 ANNUAL 737,221.32 818,192.04 317.04 344.76 1 1 3 **Residential was figured on an average water consumption of 7, 140 gallons figured on an average of 1, 525 gallons of water. Theof water;sameommeountl sewer was also figured consumption of water. on the amount z SEWER RATE EFFECTIVE EFFECTIVE EFFECTIVE CURRENT PROPOSED CURRENT / PROPOSED 10/01/88 11/01/90 03/01/91 07/01/92 RATES MONTHLY AVERAGE *Residential # of residential 2,921 Base Rate 7.00 10.00 10.00 10.00 8.50 0 - 1,000 gal. - 1,001 and up 1.20 1.45 1.45 1.45 1.45 Sewer Pass Thru 2.00 2.00 Up to 2,000 - - Sewer Pass Thru 5.00 5.00 2,001 - 15,000 2.31 2.31 5.00 *Commerical # of Commercial is 558 Base Rate 14.00 14.00 14.00 14.00 14.00 0 - 1,000 gal. - 1,001 and up 1.20 1.45 1.45 1.45 1.35 Sewer Pass Thru 7.50 7.50 4. 81 4.81 7.50 Residential Sewer/Monthl 55,206.90 50, 825.40 (2921 Customers) 18.90 17.40 Sewer Pass-Thru/Monthly 6,747.51 14, 605.00 2.31 5.00 ' Commercial 6,004.08 6,004.08 (558 Customers) 10.76 10.76 Sewer/Monthly Sewer Pass Thru 2,683.98 4, 185.00 4.81 7.50 TOTAL MONTLY 70,642.47 75,619.48 36.78 40.66 ANNUAL 847,709.64 907,433.76 441.36 487.92 INCREASE IN COMBINED SERVICES - GENERAL FUND $2,500 Tuition Reimbursement Consolidation of postage Ambulance contract Telephone/911 - System Dues -- TML, COG, etc DRMC All General Fund Insurance/liability/property, etc. All Electricity, Water, Gas Sanitation contract Animal Control contract Conference Room Remodel INCREASE IN COMBINES SERVICES -- UTILITY FUND Consolidation of postage Water purchases Sewer services - Right-of-Way/Utility relocations Transfer to General Fund MEMORANDUM DATE: July 13 , 1992 TO: Mayor and City Council /111 ;, FROM: Steve Norwood, City Manager ,0� RE: Financial Overview INTRODUCTION This brief financial overview of the City of Wylie will comprise of the following areas: General Fund Recap (Tax Rate, Fund Balance, Revenue and Expenditures, Staffing, Service Levels, Transfers, Debt) . I will address both General Fund and Utility Fund and discuss both areas in limited detail. I will also attempt to outline the major policy issues facing both the General Fund and Utility Fund over the next several years. By no means are the policy issues all inclusive but I do hope that it will adequately address some of the major issues facing this community. I have put considerable thought in formulating this financial overview. I hope the Council, as the primary policy makers of the City, spend some time going through this and I hope it raises other questions for staff to address. FY91/92 BUDGET -- BRIEFING At this point of the FY91/92 budget year I think the City is in "fair" condition. As I communicated to Council at a previous worksession, I feel that with a little luck that we will see a slight increase in our fund balance. Had some significant changes not been made, i.e. mid-year layoffs, budget freezes and close financial scrutiny, it would have been very possible to see our fund balance drop from a $189,000 to roughly $50,000. I am predicting that our fund balance will come in around $200,000 to $250,000. As I said hopefully we will get a little luck for the remainder of the year. In the Utility Fund we are not as fortunate. The heavy rainfalls have not helped our water sales. There again with the high watering months just ahead and with some dry weather we could possibly "break even" in our fund balance (working capital) for this fund. Also in the Utility fund a reorganization and mid-year budget freezes and layoffs helped offset our dwindling revenues. For the remainder of this fiscal year, any capital, i.e. , water/sewer line replacement has been deferred due to a poor cash flow in our 1 Utility fund. I do not feel that the Utility fund is in as bad as shape as some of you may think. My real concern in the Utility fund is the condition of the City's water and sewer lines that are in dire need of replacement. However this can be addressed with some bond money that is available and staff will be coming to Council on a prioritization of those dollars and projects. FY92/93 BUDGET -- PREVIEW As staff is in the midst of finalizing the 92/93 budget for City Council's consideration one thing is definitely apparent. There is not enough dollars to meet the City's needs. The revenues are obviously remaining flat with a slight increase in some areas but for the most part overall revenues will be flat. As far as expenditures there will always be a slight increase due to pay and benefits, insurance increases, also inflation factors in the purchase of goods and supplies. The revenues for 1993 budget are approximately $2.9M. During the budget process the staff requested expenditures totaling $3.7M. Obviously we cannot afford a $800,000 increase in expenditures over revenues. I honestly feel that the requests made by department directors were not unreasonable. Some of their requests are very critical needs while others are "would like to". It is my opinion that staff is very much aware of the City's financial condition and has done a good job in trying to keep that in mind when addressing their budget needs. After going through a series of budget cutting with directors it looks as though the City of Wylie will have a true shortfall of approximately $300,000 - $400,000 in revenues. Without doubt there will be some very tough choices ahead of us during the month of July in order to get a budget that we can support. The Utility fund I do not feel is in as bad shape as the General fund. The recent reorganizations will have a definite help for next year. We are also projecting revenues to be basically flat and the expenditures will also be in line. There will be some budget cuts needed in the Utility fund but I do feel that the cuts will not have to be near as significant as those in the General fund. 2 A) GENERAL FUND RECAP 1) Tax Rates 1989 - .555 1990 - .615 1991 - .615 1992 - ? For the past two years Wylie's tax rate has stayed the same. From 1989 to 1990 the City saw a six cent increase in the tax rate. Five of the cents were to offset the cost of debt. A point to consider on our tax rate is that a slow incremental tax rate increase to our citizens maybe more palatable than keeping the tax rate the same for several years then having a large tax rate increase in the future. Obviously the City's tax rate during the early to mid eighties did not increase but by two or three cents over a period of years but please remember that was during a period of extremely high growth. 2) Fund Balance 1989 - $226,803 1990 - $406,054 1991 - $189,656 1992 - $200,000 (Estimated) The above fund balance totals are ending fund balances and are audited figures except for the 1992 estimate. This fund balance is extremely important to the City of Wylie. It should be roughly $400,000 to $500,000 at all times. This is a minimum. The bond raters in New York and also our financial advisors look at this figure very closely. In fact we were asked and closely scrutinized by the bond raters earlier this year as to why our fund balance dropped so significantly over the past year. The primary reason for the drop in fund balance was expenditures of capital items that were not budgeted. This fund balance is something that the Council needs to address from a general policy standpoint that we will try to increase our fund balance to $400,000 over the next two to three years. 3 3) Revenues 1989 - $2 ,315,048 1990 - $2 ,468,977 1991 - $2,490,796 1992 - $2 ,400,000 (Projected) The above figures do not reflect utility fund transfers. As I have stated numerous times to the City Council our revenues have remained flat over the past several years and I do not see this trend changing in the next couple of years. 4) Expenditures 1989 - $1,996,744 1990 - $2,540, 264 1991 - $3 ,085,987 1992 - $3,083,659 (Budgeted) As you can see expenditures have increased $1.1M over these three years. These increases can be pointed to the fact that we are providing a much higher level of service and in some cases additional services that were not being provided in 1989. To mention a few, City Attorney, Fire, Parks and Recreation. During that three year period an increase of $365,000 for streets and $210,000 for police. So you take out police and streets the increases over a three year period are not as alarming. 5) Staffing 1989 - 43 .3 1990 - 47.8 1991 - 56. 3 1992 - 61.6 Keep in mind these staffing figures are for General Fund only and also are based on full time equivalents, meaning that school crossing guards, part time librarians, etc. are included in these staffing totals. As we get into next year's budget I will be breaking these out separately to show City Council full time 4 staffing and also part time staffing and not combine the two. The staffing totals for 1992 do not include the positions eliminated in June. 6) Service Levels Although I have no yearly data for service delivery to our citizens as this will correspond with staffing totals for the previous years. I can say that we are providing a good basic level of service. The City has moved forward by adding a Parks and Recreation staff that has shown improvements to the maintaining and development of Community park as well as other City facilities. Also the implementation of a full time paid Fire Department, in-house City Attorney, also by the recruitment of a professional staff in engineering and code enforcement, etc. As our economy continues to be depressed and no major relief in sight I think you will see our citizens continue to demand a higher level of service. They will also demand this higher level of service without an increase in cost. Obviously it cannot be done without increases, be it in taxes, user fees, or downsizing. Also I have noticed in other cities that the residents are using the parks, recreation and library facilities even more during these recession times. As some other cities have said the parks and recreation is their "hometown retreat" . This is basically due to the fact that citizen's disposal incomes are decreasing and they are spending more time with their families and obtaining entertainment through their local parks and recreation programming. I do not envy the Council in trying to balance the service delivery needs and desires with the available funds. 7) Transfers 1989 - $185,750 1990 - $309,500 1991 - $305,000 1992 - $300,000 (estimated) These transfers listed are strictly for transfers received by the General fund from the Utility fund. These transfers are legal and ethical and bond raters and advisors expect to see these transfers. They do 5 like to see cities address these transfers through some sort of "policy" and that it is not done on a random basis to address General fund needs solely. In other words the bond raters do not like to see the cities continue to increase their utility fund transfers to the general fund because it indicates a City Council's unwillingness to raise taxes to support that fund. Also, the transfers are not meant to subsidize the fund, either. Currently the city is transferring 15%, this is not excessive or out of the ordinary. I would say that we do not need to go any higher. At this point I would recommend to the Council that we keep our transfers at 15% and address any reductions in transfers during the next budget year. 8) Debt 1989 - $486,386 1990 - $665,517 1991 - $605,260 1992 - $589,590 The City's debt rate is not excessively high but it must definitely be monitored in the future, especially with our property valuations being so low. Fortunately, the debt the City issued has gone to eliminate some state mandated problems. 9) Major Policy Issues -- General Fund **Maintaining and Improving the Level of Service **Ongoing Street Reconstruction and Improvement Program **Fleet Replacement Program **Computer Technology Upgrades **Future Bond Election **Highways 78 and 544 **Comprehensive Plan 6 B) UTILITY FUND BRIEFING The Utility fund has been hard hit the past couple of years. Obviously due to the heavy rains. The past two years have been the wettest in the area's history and due to the agreement we have with North Texas it makes it extremely difficult on the City to absorb these losses. As most of you know we have we have what is commonly called "take or pay" agreement with North Texas as do the cities of Plano, Garland, Mesquite, Richardson. Basically, even if you don't use it, you are still obligated to pay. . Also during the last couple of years the City has issued debt, therefore the City's debt service has increased. 1) Utility Fund -- FY91/92 The Utility fund this past year, as I stated earlier, suffered tremendously from a cash flow standpoint due to the rains. However in responding to this reduction in cash the City's reorganization at mid-year has helped offset the decline in revenues. Freezing of expenditures has also helped the Utility fund and deferring capital expenditures, i.e. water and sewer line replacements. With a little luck and some continued dry weather I am expecting that the Utility fund will break even or possibly only drop the fund balance (or working capital) $50,000. Initially the picture for the Utility fund was much worse. I do think that the City can end the year in relative good fashion considering the rainy weather. 2) Utility Fund -- FY92/93 For the most part I do not expect major changes in the Utility fund for '92/93. We are going to be budgeting the revenues flat and then hopefully we will have a dry year and even exceed our revenue projections. Statistically we cannot keep having one wet year after another. On the expenditure side I expect to see our expenditures decrease with some moves in personnel and other areas. Also there should be a slight drop in our debt service payments but probably the brightest part of the Utility fund for next year is the fact that we will have some left over bond funds available that we can use to correct any water or wastewater projects. Paul Beaver has been working aggressively to secure a state grant which would also give the City substantial dollars in correcting our wastewater problems. 7 3) Water Rates The following water rates are based on the last three changes to our rate structure: 10/01/88 Base Rate $6.50 1,001 - 2,000 $1.82 per 1,000 gallons 2 ,000 and up $2.40 per 1,000 gallons 11/01/90 Base Rate $7.15 1,001 - 2,000 $1.82 per 1,000 gallons 2,000 and up $2.55 per 1,000 gallons 03/01/91 Base Rate $4.84 1,001 - 2,000 $1.82 per 1,000 gallons 2,000 and up $2.55 per 1,000 gallons The water rates have increased very nominally over the past four years with the primary increase being in the base rate. However, the lowering of the base rate to $4.84 has definitely had an impact on the Utility fund. This lowering of the base rate even lower than the rate was in 1988 and also during that same time issuing additional debt has caused the Utility fund to suffer. The base rate of $4.84, as it is currently, generates to the City approximately $195,000. Had the base rate been lowered back to the 1988 rate of $6.50 it would have generated in excess of $260,000. In other words it is costing the City approximately $67,000 per year on the base rate. Obviously I am not aware of the politics and the community concerns with the water rates in 1990 and 1991. 8 4) Sewer Rates 10/01/88 Base Rate $7.00 1,000 and up $1.20 per 1,000 gallons Sewer Pass Thru $2.00 up to 2,000 gallons Sewer Pass Thru $5.00 2,001 - 15,000 gallons 11/01/90 Base Rate $10.00 1,000 and up $ 1.45 per 1,000 gallons Sewer Pass Thru $ 2.00 up to 2,000 gallons Sewer Pass Thru $ 5.00 2,001 - 15,000 gallons 03/01/91 Base Rate $10.84 1,000 and up $ 1.45 per 1,000 gallons Sewer Pass Thru $ 0.00 up to 2,000 gallons Sewer Pass Thru $ 2.31 2,001 - 15,000 gallons Here again the City reduced the sewer pass thru rates which is a guaranteed revenue amount and also during that time additional debt being issued. Once again the Utility fund suffered. I realize that our water and sewer rates are on the "high side" but there again sewer pass thru rates are guaranteed incomes and are not subject to inclement weather. Next year I think all of us will have to take a very close look at our water and wastewater rates in order to help address some of the capital needs. 9 5) Debt 1989 - $342 ,770 1990 - $427,716 1991 - $484, 200 1992 - $497,460 This increase in debt has obviously been to correct some of the state mandated problems and others to the issuance of debt. Fortunately the City is solving those problems and hopefully we can see our debt start leveling off or get back into an upgrading of our infrastructure and not correcting state mandated problems. 6) Staffing 1989 - 14 1990 - 14 1991 - 15 1992 - 16 These staffing levels have remained fairly constant over the past four years. The 1992 staffing of sixteen does not reflect the two positions that were eliminated in the mid-year budget reorganization. So our Utility fund has the same staffing as four years ago. Although our staffing level is the same today as it was in 1989 we have the seen the number of our water customers increase from 2,666 to more than 3,400 so we are having additional lines, customers and areas to serve and maintain. 7) Revenues 1989 - $1,696,413 1990 - $1,887,905 1991 - $2,069,812 1992 - $1,800,000 (estimated) 10 8) Expenditures 1989 - $1,530 ,652 1990 - $1,890,881 1991 - $1,708,867 1992 - $1,850,000 (estimated) 9) Major Policy Issues -- Utility Fund **Continued Infrastructure Improvements on Water and Wastewater lines **Elevated Tank in Newport Harbor Area - Looping System **Wastewater -- Lift Stations **Wylie Northeast Water Supply Corporation and East Fork Water Supply Corporation **Regional Wastewater Plant -- Sachse, Murphy, Rowlett **Downtown Area Water/Sewer Line Replacement **Water and Wastewater Rate Structure Fortunately the City has available resources with bond money and possible grant money to correct a lot of these problem areas. If the City does receive the grant money we will have nearly $400,000 in which to spend on water and wastewater system improvements. The City is very fortunate to have these dollars and I think we can correct a lot of problems that currently effect us, i.e. water loss, infiltration, pressure, etc. However, as you are well aware infrastructure replacement and improvement is an on going process. We can, however, solve a lot of these problems by using these dollars. The Council is to be commended for issuing that debt two years ago to correct a lot of the wastewater, landfill and other problems in the City and having enough left over to fund additional capital projects. Furthermore by the issuance of that additional debt our rates did not increase substantially so therefore the citizens did not feel as great an impact as they could have. 11 Financial Concerns Sales Tax This is an extremely critical area to the City of Wylie in that sales taxes are the second largest revenue generator and they fluctuate with the economy. With the City's one-half cent sales tax for economic development it makes it doubly important that the City look for business expansions and additions that are sales tax driven. There again shifting the burden from the residents to the businesses. Property Taxes Obviously this is the most critical area that faces each City. Declining valuations and very modest growth have left most cities financially strapped. Expansion of the tax base is obviously very important and hopefully that expansion can come from commercial and industrial uses. The taxes generated off industrial companies are far greater than that of residents and typical require less service. Areas to Watch Parks and Recreation - I feel this is probably the one area in the City that will be the most exciting to watch over the next two to three years. I am expecting great things to come in this area as we start expanding into recreational opportunities and appealing to a much larger percentage of our population than those that strictly play sports. Also with the opening of the Armory in August or September will give the City the space to provide this programming. In the next couple of months I will have Bill Nelson present to you some of the plans of recreation programming that will be starting in the first of '93 with a very expanded program in the summer for the kids. This will be a very exciting time and I think the Council will be pleased with what will be taking place in '93. Police and Fire - The exciting part about police and fire will be the involvement in the community. This involvement in the community does not require additional staff or large capital expenditures. This involvement will be through crime watch programs, fire prevention, LETS program and a citizens police academy. This City will be making strides to garner citizen support of these two key areas. 12 Finance - With the City Council approving a new financial hardware/software system for the City the benefits will be incredible. Financial reporting and management reports that I will be receiving will aid Council in making better informed policy decisions. We will also improve staff productivity and efficiency. The above departments and areas that I have mentioned are the ones I feel are to be watched are the next two to three years. This is centered on the fact of providing a higher level of service and for the most part not requiring additional staffing unless the City's population grows substantially over the next couple of years. Obviously with reductions in staff comes reduction in service delivery but I strongly feel that in the areas of parks and recreation and also police and fire that a higher level of service can be provided without that additional cost. Alternatives to Taxes With property taxes being the City's primary revenue generator and with the citizen sensitivity to increased taxes leaves very few areas in which to expand. The main area will be to expand in the commercial and industrial area that will generate additional sales taxes and property taxes. Increase in Fees It is very typical in local government for cities to increase fees to help off set no tax rate increases. With the majority of cities getting very nominal tax rate increases cities are shifting to increase in fees to help generate revenues. The City of Dallas recently increased their traffic fines and other user fees to help fund services. The City of Wylie is no different, we will be looking at increasing our 911 fees and other user fees to help generate additional dollars rather than through major increases in our tax rate. However, there is concern about user fees especially from many citizen groups. 13 SUMMARY I hope this financial overview is of some help to you and give you a flavor of where the City has been is going and also outline some of the major policy issues facing this community. By no means is this list all inclusive but it does highlight some of the areas of Council concern and also addresses both funds with a historical perspective. We are all very confident that the City's future is bright but by the same token we all realize there will be some bumps and bruises along the way. The main point for all of us to consider is to not sacrifice key future items due to temporary budget problems. We must continue to look in the future and move forward and try to provide a quality level of service regardless of our tax rate and revenues. Citizens will demand a higher level of service. Our purpose for being in public service is to provide quality service to our citizens. That delivery of service should be staff's foremost goal and to do that by providing the highest level of service at the lowest possible cost. If you have any questions feel free to contact me. Also we are still planning for our budget worksession to be on Tuesday, July 21st and Wednesday, July 22nd. Most likely we will cover the Utility fund on Tuesday as well as Sanitation, Impact Fees, etc. and then on Wednesday night cover the General Fund. 14 - Aodo ro- /e CITY OF' WYLIE 2000 HWY.78N.-P.O. BOX 428 WYLIE,TEXAS 75098 (214)442-2236 • FAX 442-4302 BUDGET MESSAGE JULY 17 , 1992 TO: MAYOR AND CITY COUNCIL Here is the Council's draft version of the 1992/93 budget for the City of Wylie. The budget is strictly in a working document and draft form. There are still some areas left for minor "clean up" . However, this budget is pretty reflective of what I am recommending for the 92/93 fiscal year. This budget is based on a two cent tax increase which I will be recommending. This nominal tax rate increase is reflective of our lost valuation in May of nearly $10 ,000,000. In essence this tax rate increase effectively will not generate any more tax revenues for the City. Basically "get the City even" . Even more distressing is on Thursday we learned that the final tax rolls were released and our property tax valuations dropped another $10,000,000. The tax rate increase of two cents will be sorely needed even more so. However, should the Council choose not to adjust the tax rate then staff will respond accordingly. GENERAL FUND The proposed general fund budget for next year is based on revenues of approximately $3 ,000,000. As you will see these revenue estimates are extremely conservative and hopefully with a little good luck next year we can exceed these revenues instead of lowering them as we did this year. The expenditures in this budget are based on conservative revenue estimates. I feel that the expenditures are extremely tight and there is very little "pad" in this budget. The primary items that are in the general fund budget are a 3% percent pay increase and a tuition reimbursement program for employees, as well as an employee incentive and safety program and additional dollars for training for all levels of employees. I have said repeatedly, that my commitment is very strong for the employees and that we need to make sure that the group of employees we have representing the City feel that they are operating safe equipment and are being trained effectively to carry out their jobs more efficiently. Other items of interest in the budget is a comprehensive plan for the City, a Repair and Demolition fund, approximately $130,000 for new street reconstruction, and a significant increase in general maintenance of City streets, a new computer hardware/software system for finance, citizen newsletter, Citizens Police Academy, recreation programs and other items that will be visible to citizens. This budget is a very realistic and workable document. Obviously there are items that I feel that the City needs to fund but we are all aware of the economic times and must adjust accordingly. Another good feature of this budget is the implementation of a fleet replacement program to insure quality equipment for employees in the future. The general fund budget that is before you has a deficit of which I will explain in our work session meetings, Tuesday and Wednesday. UTILITY FUND The utility fund revenue is budgeted also extremely conservative, however, with the last couple of years being extremely wet it is very difficult to budget in these conditions. The expenditures are also budgeted very conservatively and I feel that as we have in the general fund, need to be cognizant of the fund balance (working capital) . There is no rate increase of any type included in the utility fund. We recently received word from North Texas Municipal Water District that our sewer cost for next year is going to increase $8,000 and we are still waiting on word regarding our water rates. Staff will closely review these cost increase(s) from NTMWD and probably in August we will have solid data regarding our rates. If the water rate increases Council may want to consider our options prior to adopting the budget in September. A major component of the utility fund budget will be the fact that the City will have significant dollars remaining from the closure of the landfill and also a possibility of receiving $250,000 in grant revenues. These funds will allow the City to do major water and wastewater improvements to our system. Also I have put in the utility fund budget approximately $100,000 for right-of-way/utility relocations for Highway 78. This is extremely important as we pursue the highway department and others that the City of Wylie is serious and committed to the necessary funding for this project. OTHER Also in this budget we will be collapsing the sanitation fund into the general fund and show sanitation as a franchise like we do the electricity and telephone. Another point to mention is that I hope the Council is pleased with the financial reporting and documentation that you are now receiving. I can assure you that I believe in full disclosure and that the information will be presented very accurately and honestly. However, I will make my recommendations in certain areas but as I said this is our budget that we will be presenting to our citizens. So it is very important that Council knows not only my reasons for recommending but also what is in the budget for the employees as well as the citizens. After going through our budget work sessions we will then formulate a final budget document to present to Council for adoption and at that time I will submit a more detailed budget memo with that document.