City of West Richland Town Hall Police Facility Proposed Bond Levy - PowerPoint PPT Presentation

City of West Richland Town Hall Police Facility Proposed Bond Levy Financial Presentation SEPTEMBER 26, 2018 PRESENTED BY JESSICA PLATT, FINANCE DIRECTOR

Presentation Outline  City Budget Basics  Funding Challenges  Funding Large Capital Projects  Financing the Proposed Police Facility

West Richland 17/18 Amended Budget Resources $57.8 Million Other Increases Licenses & Permits Interest/Misc Fines & in Revenues 2% 1% Penalties 6% 1% Fund Balance 9% Charges for Services 28% Intergovernmental Revenues/Grants 12% Other Financing Taxes Resources 22% 19%

West Richland 17/18 Budget Appropriation $57.8 Million General Fund 29% Utility Funds 51% Special Revenue Funds 8% Capital Project Funds 12% Utility Funds: Water, Sewer, Irrigation, Stormwater, & Solid Waste

West Richland 17/18 Amended Budget By Fund Type ‐ Operations Total 2017/2018 Amended Budget Appropriation = $32.8 Million General Fund 37% Enterprise Fund 51% Special Revenue Capital Fund Funds 8% 4% Park Impact Library 0% Water/Sewer Operations Tourism 78% 36% 0% Irrigation Criminal Street 1% Justice Maintenance Stormwater 27% 37% 5% Solid Waste 16%

2017/2018 General Fund Revenue Budget Where does the money come from? $14.9 Million Charges For Other Licenses Services Other Taxes & Permits Fines and 3% Building Permits 2% 0% Forfeiture 5% 3% Intergovernmental Revenue 5% Utility Taxes Transfer In 27% 6% Miscellaneous & Other Revenues Property Tax 13% 23% Sales Tax 13%

2017/2018 General Fund Expenditure Budget ‐ Operations Where does the money go? $12.6 Million Mayor/Council 2% Facilities & Grounds City Clerk 3% 2% Non-Departmental 4% Public Works 6% Parks Maintenance 7% Public Safety Finance & 56% Administration 8% Community Development 12%

2017/2018 General Fund Expenditure Budget Expenditures by Category Office & Operating Services Supplies 5% 2% Intergovernmental 6% Transfers 13% Personnel Capital 60% 14%

Funding Challenges State and Federal Legislative Actions: ◦ Reduction of state shared revenues (i.e. Liquor related revenues) ◦ Mandate for increased education funding – McCleary decision Revenue growth limitations & unpredictability: ◦ Property Taxes I-747 – limited to lessor of 1% growth or IPD, excluding new construction ◦ Unpredictable building revenues ◦ Limited & unpredictable sales tax revenues Retail Sales Tax Economic Influences ◦ National and State economy ◦ Hanford cleanup activities

Funding Challenges Property Taxes – Where do these tax dollars go? City of WR State Fire Benton West Library Richland School Schools District #4 Richland County Levy Port District 39% 22% 14% 2% 11% 9% 3%

Funding Challenges 2016 Sales Tax Per Capita - Similar Population Statewide (13k - 17k) $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $-

Funding Challenges 2016 Sales Tax Per Capita - Regional Comparison $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- Prosser Kennewick Richland Pasco Benton City West Connell Richland

What has the City done to control costs? Cost Control Measures Include: 1. Increase employee cost sharing on medical premiums 2. Development of an employee Pay for Performance Plan for non-bargaining employees 3. Elimination of positions including City Administrator 4. Grants and low interest loans 5. Deferring preventative maintenance 6. Delaying capital expenditures and/or using one-time unanticipated carryover to fund some capital

Funding Large Capital Projects  Cities have very limited options when financing large capital projects.  Most cities will seek bond financing to fund large capital projects (either voted or non‐voted).  Some cities may also use general fund reserves and/or real estate excise tax revenues to pay for a portion of the project depending on their financial means and project amount.

How was the Municipal Services and Maintenance Shop Facilities Paid For? Total Anticipated Project Cost: $8 Million Anticipated % Split General Fund 30% Real Estate Excise Tax I Fund 7% Utilities 63% Note: General Fund portion paid through unanticipated carryover due to increase in one-time building revenues, staff vacancies, and prudent financial management.

How will the proposed police facility be funded? The City can place a general obligation bond on the ballot (voted bonds). Requires voter approval of 60% or more .  Special excess bond levy for the term of the financing.  Requires voter validation with a turnout of at least 40% of the voters from the  previous year’s November election. Only registered voters within the city limits of West Richland can vote. 

What is the amount being proposed for a new police facility and how much will this cost me?  $12,465,000 is the proposed amount for a new police facility including the building, land and equipment  The proposed bond is estimated at $0.42 per $1,000 of assessed value on 29-year financing.  For a home with an assessed value of $300,000, the monthly cost is estimated at $10.50 ($126 per year). Note: Staff is working on an online calculator for residents to use to determine the impact of the bond on their household. Residents will have access to the online calculator via the City’s website. This feature will be available soon.

How would this bond impact the City’s existing debt capacity?  The City of West Richland has a very small amount of existing general obligation debt.  Over the past several years, the City has paid off approximately $2 million in bonds and loans early saving $200,000 in interest costs.  The City has a very small amount of general obligation debt in relation to the City’s overall debt capacity.  West Richland achieved a AA bond rating in 2014 due to the City’s excellent financial management practices, strong ending fund balances, small amount of debt, and experienced management in operating the city in an efficient manner.

How would this bond impact the City’s existing debt capacity?  Currently, the City’s General Fund does not pay for any debt service.  Debt service is paid through dedicated funding sources outside of the General Fund.

How would this bond impact the City’s existing debt capacity? Est. Remaining Amount Available All GO Debt Categories (General Purpose, Parks, & Utility Purposes) Est. % Used Est. Remaining Existing Remaining General Obligation Debt Capacity $ 93,927,231 3% 97% Remaining Debt Capacity with Proposed Police Facility Bond $ 81,462,231 16% 84% Est. GO Debt w/ Proposed Police Debt Est. Existing GO Debt Facility Capacity Debt Used Capacity 3% Used 16% Remaining Remaining Debt Debt Capacity Capacity 97% 84% Note: The remaining combined voted and non-voted general purpose debt would be $16.7 million. Of this figure, $16.2 million could be designated as non-voted (subject to an affordability analysis).

When would the bond levy be put on the ballot and when would it take effect if approved by voters?  The bond levy for a new police facility is proposed to go on the April 23, 2019 special election ballot.  If approved by voters, residents would see the bond levy starting on their 2020 tax statements provided by Benton County.  Property taxes collected for the bond levy are restricted by state law and can only be used for bond payments.

Who can I contact for questions and/or more information? For financial related questions, contact Jessica Platt, Finance Director at (509) 967-7134 or jplatt@westrichland.org. For all other questions, contact Ben Majetich, Chief of Police at (509) 967-7121 or bmajetich@westrichland.org.