Baltimore’s Budget OCTOBER 2, 2019 1
Agenda Budget Overview Baltimore’s Budget Processes Fiscal 2020 Budget Questions Balancing Act Equity in Budgeting Discussion 2
Budget Overview Baltimore has two budgets: Operating and Capital o Operating funds the daily business of the City, specifically covering programs, services, staff, and supplies. o Capital funds physical infrastructure projects for the City, specifically major renovations and replacements that are long-term investments Total 2020 budget is $3.5 billion 3
Capital v. Operating Budget CAPITAL OPERATING 4
Capital v. Operating Budget CAPITAL OPERATING 5
Types of Capital Projects • Roads • Senior Centers • Demolition of Vacant/Abandoned Buildings • Bridges • Health Clinics • Housing Redevelopment • Bike Lanes • Convention Center Projects • Sidewalks • Parks • Public Markets • Major Software Systems • Recreation Centers • Economic Development Projects • Cultural Attractions • Water/Sewer Pipes • Schools • Sewage Treatment Plants • Libraries • Water Treatment Plants • Municipal Buildings • Pumping Stations • Police & Fire Stations • Stormwater Infrastructure 6
Budget Preparation Department of Finance Tax Rates, Debt Levels, Big-Picture Financial Planning Dept. of Finance/ Bureau of Dept. of Planning Budget & Management Research Capital Budget Preparation Operating Budget Preparation 7
Private Investment Operating Budget Federal & State Programs Capital Budget Philanthropy 8
Where the Money Comes From - Operating Operating Budget by Revenue Source General Fund: is the City’s largest fund. It includes all local taxes paid by residents, businesses and visitors. Policy-makers have the most management flexibility over how dollars are spent. Grant Funds: are legally required to support specific programs and initiatives. The City receives funding from Federal, State and other special or private grantors. Enterprise Funds: are used for operations in which the cost of services is covered primarily through user charges, which are determined based on consumption. 9
General Fund by Revenue Source 2020 Total = $1.97 billion 10
Property Tax Growth 11
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Stronger Income Tax Base 13
Where the Money Comes From - Capital Revenue vs. Debt Sources 14
Where the Money Comes From - Capital State Funds County Local, non-utility / 4% Grants City Bond Funds Other 9% 13% 9% general fund backed sources = $145,000,000 City General Federal Funds Funds 12% 6% Utility Funds 6% General Funds (HUR Eligible) 2% County Revenue Loans Transportation 37% Revenue Bonds 2% 15
Where the Money Comes From - Capital General obligation bonds = State Funds County Grants 4% 9% Other City Bond Funds $80,000,000 9% 13% Federal Funds 12% City General Funds 6% Utility Funds 6% General Funds (HUR Eligible) 2% County Revenue Loans Transportation 37% Revenue Bonds 2% 16
2018 Loan Authorization Question A: Affordable Housing $10,000,000 over 2 years Eligible uses of this new loan include acquisition, preservation, production of new housing, demolition, rental assistance, housing counseling and project finance comprised of loans or grants as well as other related activities. Question B: Schools $38,000,000 over 2 years Provides funding for dozens of systemic improvements to City school buildings (roofs, HVAC, windows, etc.) along with a few major renovations, replacements and additions. Question C: Community and Economic Development $47,000,000 over 2 years Provides funding for a range of community and economic development uses from renovation of cultural institutions and other community assets to acquisition and demolition of vacant homes. Question D: Parks and Public Facilities $65,000,000 over 2 years Provides funding to improve public buildings and land, including libraries, parks, recreation centers, court buildings, fire stations, municipal buildings, information technology infrastructure, and other city-owned properties Total: $160,000,000 over 2 years 17
Where the Money Goes - Operating Allocation by Function 2020 Operating Budget = $2.93 billion 18
Where the Money Goes – Capital Allocation by Rec & Parks, 5% Transportation School System, 17% 3% Agency HCD, 9% Information Technology, 2% 2020 Capital Budget = General $627,464,000 Services, 2% Public Works BDC, 2% 56% Police, 2% Mayoralty & Enoch Pratt Planning Free Library 1% 1% 19
Where the Money Goes- Capital FY20 Local, Non-Utility Fund Sources BDC, $6,350 , Schools, 4% $19,000 , 13% ($145 million total) Recreation & HCD, $31,230 , Parks, 22% $10,900 , 7% Mayoralty, BCIT, $15,700 , $6,708 , 5% 11% Police , DPW: Solid $9,800 , 7% Waste, $4,562 , 3% Transportation, DGS, $14,000 , $26,750 , 18% 10% 20
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Baltimore’s Budget Processes 22
Operating June May January- April March December November March Department City agencies Department Department of Board of Board of City Council of Finance submit of Finance Finance sends Estimates Estimates votes on determines budget evaluates recommended holds approves budget and CLS funding request proposals budget to the hearings total budget sends to levels proposals and Board of with agency and sends to Mayor for next recommends Estimates heads City Council Mayor’s Fiscal Year actions to the Mayor may Office Mayor Board of City Council approve the identifies City Estimates holds total budget objectives holds hearings or and key “Taxpayers’ and disapprove strategies Night” for “Taxpayers’ some items resident Night” and approve input prior the rest to voting 23
Operating June May January- April March December November March Department City agencies Department Department of Board of Board of City Council of Finance submit of Finance Finance sends Estimates Estimates votes on determines budget evaluates recommended holds approves budget and CLS funding request proposals budget to the hearings total budget sends to levels proposals and Board of with agency and sends to Mayor for next recommends Estimates heads City Council Mayor’s Fiscal Year actions to the Mayor may Office Mayor Board of City Council approve the identifies City Estimates holds total budget objectives holds hearings or and key “Taxpayers’ and disapprove strategies Night” for “Taxpayers’ some items resident Night” and approve Currently, residents are input prior the rest able to engage in the to voting budget process at these two events. 24
Our Financial Principles o Charter-mandate to have a balanced budget o Establish a budget that gets the best value for the investment (Priority Outcomes) o Ensure that the City is fiscally responsible and healthy o Bond rating o Rainy day fund o Debt ratio o Keep the City on a sustainable fiscal path 25
EDUCATION & YOUTH ACCOUNTABILITY & QUALITY OF LIFE ENGAGEMENT TRANSPARENCY Recycling Rate Citywide Energy Use Academic Achievement Prompt Vendor Payment Water Cleanliness College & Career Readiness 311 Responsiveness Recreational Opportunities Infant Mortality Blight Elimination Childhood Asthma ECONOMIC PUBLIC SAFETY DEVELOPMENT & JOBS Shootings Number of Jobs Property Crime Employment Rate Heroin-related Deaths Visitors to Baltimore Baltimore’s Priority Outcomes & Indicators 26
Capital Improvement Program Process By City Charter, the Planning Commission • must submit a recommendation for the six-year Capital Improvement Program (CIP) to the Board of Estimates The first year of the CIP becomes the basis • for the capital component of the Ordinance of Estimates (budget), adopted by City Council The six-year CIP begins again each year. • 27
Capital Planning Provides Agencies Submit Planning Staff Agencies with Projects for Conducts Detailed Fund Targets Consideration Review of Projects Planning Agencies Present Planning Commission Priorities to Commission Vote Formulates Planning Recommendations Commission Board of Finance Board of City Council Votes Votes Estimates Votes (First Year Only) 28
Capital Planning Provides Agencies Submit Planning Staff Agencies with Projects for Conducts Detailed Fund Targets Consideration Review of Projects Planning Agencies Present Planning Commission Priorities to Commission Vote Formulates Planning Agency plans and Recommendations Commission stakeholder engagement Condition and needs assessments Neighborhood and Board of Finance Board of City Council Votes Votes Estimates Votes (First Year Only) citywide plans 29
Capital Planning Provides Agencies Submit Planning Staff Agencies with Projects for Conducts Detailed Fund Targets Consideration Review of Projects Planning Agencies Present Planning Commission Priorities to Commission Vote Formulates Planning Recommendations Commission Attend hearings and provide feedback/comment Board of Finance Board of City Council Votes Votes Estimates Votes (First Year Only) 30
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