FY2013 City of Memphis, TN, Budget Overview

8/2/2019 FY2013 City of Memphis, TN, Budget Overview

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Apr i l 28,2012

City of Memphis. FY 2013 Budget Overview


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Table of Contents

o Historical Financial Performanceo Managements Challenges:o Actions to Obtain Positive Financial Resultso Funding Memphis City Schoolso FY 2013 Administration's Proposed Budgeto History of Property Tax Rateo Structural Changes for FY2013

o Reformso Capital Improvement Program

P g s 2 - - 6P g s 7 - - 1 1

P g s 1 2 - - 2 2Pgs 2 3 - - 2 7

Appendix IAppendix IIAppendix III


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Historical Financial Performance


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H istorica l F ive Year F inanc ia l T rendsAud[ted

General Fund Revenues ($000) 2007 2008 2009 2010 2011Local Taxes 366,383 368,754 415,924 420,879 434,648State Taxes 64,545 67,384 59,036 54,714 57,043Charges for Services, F ines, Forfeitures 44,400 50,369 48,944 55,096 54,148Use of Money and Proper ty 5,149 4,638 3,395 980 519Other 16,001 19,648 16,522 16,315 17,033

496,478 510,793 543,82.1 547,984 563,391O~eratin~ Trans fers - In 56,068 54,765 61,623 58,537 105,375Total $ 552,546 $ 565,558 $ 605,444 $ 606,521 $ 668,766

Growth in Revenues 1.0% 2.4% 7.1% 9.2% 10.3%- - - - -General Fund Ex!=,enditures ($000) 2007 2008 2009 2010 2011-General Government $ 116,933 $ 133,241 $ 154,320 $ 142,349 $ 141,920Public Safety 320,632 343,151 363,372 368,995 384,739Community Services 53,812 61,011 63,903 63,484 64,216.~i ~~~1il~ lilig~ 61060 61893 BI188 6 1664 61417497,437 544,296 589,783 581,492 597,292Operating Transfers - Out 13,177 3,448 8,383 45,662 66,722Total $ 510,614 $ 547,744 $ 598,166 $ 627,154 $ 664,014

Unass igned Fund Balance $ 8U25FB % Exeenditures 12.2% 12.2%5.0% 16.4% 16.24%


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City of Memphis Expenditure TrendFY 2007~FY 2011

Growth in Cost of Government600,000 In (OOO's )

Year00,000

400,000

300,000

200,000

100,000

2007 2008 2009 2010 2011

l__ .

* Data extracted from City of Memphis CAFR

20072008200920102011

174,882 319,906199,621 14% 10%

918 14% 9%213,337 -6% -1%211,313 -1% 384,240 4% 595,553 2%


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Positiv e F isc al T re nd sCash Position Unassigned Fund Balance % of GF Expenditures

1$000) 195.0ml 1 6 . ( 1 - : ' 1S~, I jOO 15.Cfl .t

5i54l~ '~3,:J3~ S l j { J . , O O O$5~.1:!-


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General Fund Balance AnalysisIn O OO 'sGeneral Fund Balance

120,000oRestricted Funds Includes amountsthat can only be spent for the specificpurposes stipulated by constitution,external resource providers, or throughenabling legislation.

100,000

60,000

60,000

40,000

20,000

oAssigned Fund Balance Fundsintended for specific government uses butdo not meet the restricted or committedcriteria.

Estimated Projected- Unreserved - Reserved - Unassigned - Ass igned - Rest ri cted

" - H istorica l Genera l F und S.IO h e e (in ODDs )2012 - 2013

. _ 2007 2008 20D9 WiD 2Dll Projected PrOjected Unassigned Fund Balance - The residualfund balance that includes all spendablefunds not contained ill the otherclassifications.

Hestrlcted 1,684 1,584 1,684As>lgned 8,252 8,252 8,252Unassigned 81,125 81,125 81,125Resomted 6,747 8,945 9,691 8,2~~Unreserved 76,571 89,613 95}912 76,271Total 83,718 96,558 106,603 84,570 91,061 91,061 91,061Gen er a l F u n d Ex pend i tu r e s 4gS514 546,296 5B9}763 581.492 597,292 597,29< 597,29210% of Expenditures 49,551 54,630 58,918 58,149 59,7


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Management's Challenge(School Funding)


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Historical MCS Contribution

100,000,00090,000,00080,000,00070,000,00060,000,00050,000,00040,000,00030,000,00020,000,00010,000,000o

History of City Payments to MCS

2007 2012 Budget008 2009 2010 2011- Property Tax Apportionment- Property Tax Rate Allocationt;l Co u rt Co sts

- General Revenues Transferf rom Debt Service Fund-Reserves Moving Violations Literacy Program


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How the City of Memphis Funded the Memphis City Schools

FY 2010 FY 2011 FY 2012(Budgeted)$22.0M General Fund Reserve $45.0 M Debt Service Reserve $20.0 MDebt Service Reserve

$23.0 M Direct tax Rate $22.0 M Direct tax Rate $20.0 M One Time Assessment$18.0 M Budget Cuts $15.0 M Budget Cuts $17.0 M Salary Reductions

$ 4.0 M Layoffs$13.0 M Budget Cuts

$1.5 M TVB Revenues $ 1.0 M TVB Revenues

$ 1..5 M TVB Revenues

$75.0M Total Funding$83.0 M Total Funding$64.5 M Total Funding = = = = = = = = = = = = = = = = = = = = = = = == = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

Non-Sustainable A.ctions Sustainable Actions


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FY 2013 Net Impact of Transitioning School FundingGeneral Fund

Revenue Decreases(as compared to FY 2012) Expense Increases Net Impactchool Funding

$74.0 Million$ 6.0 M Fines and Fees Initiatives $13.0 M Transfer DebtService ($23.2 Million)20.0 M One time school tax$11.0 M Property Tax Revenue $ 3.0 M Fuel Cost$20.0 M Debt Service Reserve $ 2.3 M Health care$ 3.0 State Sales Tax $ 1.0 M Convention Center

$ 2.6 M MATA$60.0 M Total Revenue Loss

$15.3 M Public Safety

37.2 M Total Expense Inc.


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F Y 2013 Net Im pact o f T ran sition ing Schoo l F un ding

EDUCATION FUND

$19.5 M Tax Rate Apportionment$ 1.5 M TVa Revenues

$21.0 M Total Revenue

$68.0 M Expenditures

$47.0 M U nfunded Request


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Overview of 2013 Proposed Budget


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Guiding Principlesfor the FY 2013 Operating Budget

Budget Parameters- Eliminate structural imbalance- Avoid one-time revenue measures for recurring expenditures- Fully fund core services and Memphis City Schools- Match recurring expenses with recurring revenues- All divisions will be subject to cost cutting and efficiency measures

Separate school funding from core government operations


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Strategic Prioritiesfor the FY 2013 Operating Budget

1. arotlte safe and vibrant neighborhoods2. grow prosperity and opportunity for all3. 3,.IIost in our young people~ . A d" tlH eO a culture of excellence in government


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FY 2013 Budget Proposal

REVENUESGeneral FundTransfers 553,081,07576,305,897Total Revenues 628,386,972ExpendituresTotal Expenditures 628,352,900

Cont. to Fund Balance 34,072------------ - - - - - - - - - -


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%

Rewenue Budget (;olDparuonFY2012 FY2013 Change

Amountources of Revenue Budget Proposed

Local Taxes $456,659,583 426,200,364 ($30,459,219) -7.15%State Taxes 56,548,505 55,660,114 ($888,391) -1.60%Licenses and Permits 10,221,821 10,482,191 $260,370 2.48%Fines a nd Forfeitures 21,117,500 14,680,100 ($6,437,400) -43.85%Charges for Services 32,431,225 31,792,053 ($639,172) -2.01%Use of Money andProperty 673,151 467,151 ($206,000) -44.10%Grants 1,793,067 1,765,428 ($27,639) -1.57%Other Reven ues 10,651,847 11,033,674 $381,827 3.46%TransfersIn 98,486,897 76,305,897 ($22,181,'000) -29,07%TotalRevenues\ Transfers $688,583,596 $628,386,972 ($60,196,524) -9,58%


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,--_II

2012 Adopted

1%

fntergovemmeRevenue1%

l__ 4%$688]583,596

2 01 3 P ro posed

Summary of General Fund ~Revenues

I iI_ j l

Ch.rges for Services6% 2%3%


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REVENUE HIGHLIGHTS(Down by $60.0 Million)

Transfer-in revenue are down by $20.0 million as a result oflower transfers from the Debt Service Fund. FY 2012concludes two years of transfers totaling $65.0 million fromDebt refinancing.o Ad-Valorem tax revenue is budgeted at $31.0 million less thanFY2012.o Twenty million is applicable to the one-time schoolassessment of 18 that is directed to the education fund.Memphis City Schools will be funded through theeducation fund.o Eleven million is the impact of lower appraised property.

D Fines and Forfeitures are budgeted at $6.4 million below theFY12 budget level.o Divisional revenue includes two new permanent revenuestrategieso Motor vehicle inspection fee revenue is budgeted at $1.0million. Once fully implemented this revenue strategy isanticipated to produce $2.0 million per year.o Speed enforcement camera net revenue is budgeted at$700K


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Personnel

FY2012

o 55,237,285 -0.00%

$606,163,483 $628,352,900

ChangeBudget Proposed Amount %

FY2013

225,300 58,350 ($166,950) -286.12%

Expenditures

EIpendi'ure Budge' (;olDpariso

Transfer Out

Other

Total Expenditures

62,074,7241 19,587,710 ($42,487,014) -216.91%

Material and Supplies

Capital Outlay

Grants and Subsidies

Inventory

$413,868,243 424,668,699 $10,800,456 2.54%

108,189,401 114,282,648 $6,093,247 5.33%

959,952 0 ($959,952) 0.00%

76,083,148 69,755,493 ($6,327,655) -9.07%

22,189,417 3.6%

(55,237,285)


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Summary of General Fund ~Expenditures

J

$661,400,768

2013 Proposed

Grants & Subsidies11%

Transfer Out3%

2012 Adopted

.nventorv Transfer Out9%

Capital Outlay0%

$628,352,900


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F Y2013 P ro po sed Exp en ditu res by D iv isio nCity Attorney $ 10,048,357City Council $ 1,596,326City Court Clerk $ 4,846,848City Engineer $ 8,517,460Community Enhancement $Executive $ 5,132,613Finance $ 4,890,341Fire $ 154,966,115General Services $ 22,992,787Grants and Agencies $ 78,813,397HCD $ 5,000,550Human Resources $ 7,342,439Information Services $ 15,901,093Judges $ 601,722Parks $ 42,594,087Police $ 238,992,.383Public Services $Public Works $ 26,116,382Total Expenditures $ 628,352,900


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EXPENDITURE HIGHLIGHTS

o Increaseso Expenditures for transfer-out to the debt fund increased by $13.0 mill ion. This is requiredto cover the restructured debt resulting from the bond refinancing.o Fuel cost increased by $3.0 mill ion.o Health Cost increased by $2.3 mill ion.o As a result of purchasing the Convention Center, a $1.0 million dollar increase is includedin the FY13 budget for a total of $2.0 million. The county formerly paid one half of thiscosts.o MATA funding increased by $2.6 mill ion. Capital spending is proposed to be reducedaccordingly ..

o Reductionso EMA moves to the county $516Ko Service level reductions from request were $24.4 mill ion. Highlights include:

Fire Services - $4.5 million -5 companies will be put out of service. Park and Neighborhoods - $2.6 million -6 libraries will be closed at 1.5 million,Whitehaven Golf Course to be repurposed, historic homes will be closed, medianmaintenance contract for Hickory Hill will be eliminated. OPEB planned funding reduced by $3.8 million Capital Outlay of $1.1 million removed for all divisions. Economic Development funding eliminated - $3.0 million.

L


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HISTORY OF PROPERTY TAX RATE


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Historical Property Tax RatesH is to ric al P ro p e r ty T a x R ate s

4.504.003.503.002.502.001.501.000.500.00

0.0032 0.0031CapitalPayGo 0.00320.7141

0.0032 0.0031 0.0031IIDebtService 0.6941 0.6941 0.7141 0.7141 0..7141

0.8271 0.1900 0.1868 0.1868 0.00001.9088 2.3427 2.2917 2.2917 2.4717

Schools 0.8271 General Fund 1.9088


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Per Capita Tax Burden1,4001,2001,000800600400200

o

FY2011 Property Taxes 401,796 2,017,752 759,184,841 103,350,000 111,034,964 2.1,335,375 380,186,210Populations (2010) Census) 3,094 9,038 626,681 178,874 167,674 38,844 646,889Per Capita TaxBurden 130 223 1,211 578 662 549 588


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History of Assessed ValuesHistory of Assessed Property Values

14,000,000,000

12,000,000,000

10,000,000,000

8,000,000,000

6,000,000,000

4,000,000,000

2,000,000,000

12,341,760,825

0 2007 2008 2009 2010 2011 Utili ties & Carriers 911,976,305 835,038,281 775,027,935 816,425,195 877,932,058 Personal Property (Commercial & Industrial) 1,031,524,225 1,037,557,855 1,196,861,700 1,133,365,185 1,128,790,635 RealProperty (Commercial & Industrial) 4,291,102,795 4,320,668,495 4,893,771,265 4,743,781,550 4,507,983,385 Real Property (Farm & Residential) 5,135,189,100 5,199,303,925 5,476,099,925 5,359,781,600 5,301,771,500


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Value Of A PennyIn ThoWilanu (0008)

FY2011 FY2012 FY2013Actual Forecast Projected

Tax Rate(General Fund only) 2.2917 2.4717 2.2917

Property Tax 266,335 270,106 246,430

Value of Penny 1,162 1,117 1,075


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r

Appendix I Structural Changes


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S truc tu r a l Reo rgan iz at ionCommun ity Enha n cemen tResolution Approved 02/23/2012

Community EnhancementSvcsAdmin2201 LL

(-4 ACs) -$545,740

Public WorksNeighborhood Improv

1717 LL(+4 ACs) +$545,740

Community EnhancementGround Maint

2202 LL(-40 ACs) -$5,042,772

Fund 0111

Public WorksCollections/ 1708 L L(+9 ACs) +$1,785,907Public Works

;.- Neighborhood Improv

\1717 LL

(+14 ACs) +$1,851,457Public WorksStreet Maint1702 LL

(+17 ACs) +$1,405,408

Community EnhancementCity Beautiful

2202 LL(-4 ACs) -$284,202


1717 LL(+4 ACs) +$284,202


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Community Enhancement Continued

Fund 0111 Continue

Fund 0671

Community EnhancementCode Enforcement

2202 LL(-63 ACs) -$3,426,996


1717 LL(+63 ACs) +$3,426,996

Public Works Heavy EquipStorm Water

/

1715LL(+24 ACs) +$2,416,464

..----------, ......__________Community EnhancementStreet Sweeping

2203 LL(-27 ACs) -$2,619,460

Public WorksSW Collections

1708 LL(+3 ACs) +$202,996

r


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Public ServicesAdministration

1901 LL(-5 ACs) -$591,592

S tr uc tu ra l Reo rgan iz at io nPubl ic Ser vi ces

Resolution Approved 02/23/2012

Fund 0111~ - - - - - - - - - - - - - - - - - - - - - - - - ~

Public ServicesSpecial Services

1902LL(-11ACs) -$1,623,290

Public ServicesAnimal Services

1905LL{-45 ACs) -$2,596,509

Parksand NeighborhoodsAdministration

1501 LL(+5ACs) +$591,592

-~

Parkand NeighborhoodsSpecial Services

V 1517LL(+9ACs) +$1,471,748/ City AttorneyCLERB- ~ 2401 LL\ (+1ACs) +$61,399Parkand Neighborhoods\ Administration1501 L L(+1ACs) +$90,143

Park and NeighborhoodsAnimal Shelter

1518LL(+45ACs) +$2,596,509

-4


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P ub lic S erv ic es C on tin ue d

Pub l i c S e r vi ce sM ot or V eh ic le In sp ec tio ns

1 907 L L(-47 AC s) -$2,033,362

-pGe ne ra l S e rv ic e s

M ot or V eh ic le In sp ec ti on s2 01 2 L L

(+47 AC s) +$2,033,362

F und 0 11 1 Co nt in u e

F und 0 63 1~ - - - - - - - - - - - - - - - - - - - - - - - - ~

Pub li c S e r vi ce sM em ph is /S he lby C ounty M us ic C om m1 91 2 L L

(-2AC s) -$1 73,083

P a rk s a n d N e ig h bo rh oo d sSpe ci a l S e r vi ce s1 51 7 L L

(+2 A Cs) +$1 73,083

P u bl ic S e rv ic e sL i brar ies1 92 0 L L

(-267 A Cs ) -$1 4,7 31 ,1 16-~

P a rk s a n d N e ig h bo rh o od sL i brar les1 51 9 L L

(+2 67 A Cs ) + $1 4,731 ,1 16

P ub li c W o rk sP o rt C omm is s io n

1 71 9 L L( +7 A C s)

P ub li c S e rv ic esP o rt C omm is s io n

1 91 0 L L(-7 ACs )


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Fund 0111Resolution approved 02/23/2012Park ServicesPark Operations

1504 LL(-62 ACs) -$5,358,495

Structura l Reo rgan iza tionO ther D iv is io ns

Police ServicesPrecincts1403 LL

(-103 ACs) -$5,300,000

Fund 0111 Resolution approved 09/20/2011City Attorney

Health Service Center2401 LL

(-3ACs) -$950,282

Fund 0219 Resolution approved 02/23/2012Park Services

MLK Improvements1514 LL

(-3ACs) -$119,582

General ServicesPark Operations

2011 LL(+62 ACs) +$5,358,495

Police ServicesCrime Prevention

1405LL(+103 ACs) +$5,300,000

Human ResourcesHRCompliance

1809 LL(+4ACs) +$950,282

Gene ral ServicesM1K Park Improvements

2013 LL(+3ACsj +$119,582


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Other Divisions Continue

E x e c u t i v eC o n t ra c t C o m p l i an c e

/

1 0 X X L L( + 3 A C s ) + $2 87 ,8 65,...------- ~

\F u nd 0 1 11 R e so lu ti o n A p p r o v ed 1 2 /6 /2 0 11

C i t y A t to r n eyC o n tr ac t C o m p ll an c e/ ln te rg R e la ti on s

2 40 1 L L( - 5 A C s ) - $ 54 2, 7 55

E x e c u t i v eI nt er go v e r nm e n ta l A f fa ir s

1 0X X L L( + 2A C s) + $ 2 54 ,8 9 0


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Appendix I I Reforms


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Other Management Actions and Reform Measures Implemented a new pension strategy for new hires of city government Awarded a new contract for Healthcare Administration. This contract leveraged thecombined employees of MLGW and the City of Memphis to reduce Health careinflation. Implemented a "Medicare Buy back" strategy which will reduce further retiree healthcare liabilities. Implemented a Zero Based Budgeting process for all divisions of city government. Implemented a redeployment of staff strategy to reduce personnel cost of the FireDivision.

Implemented a new debt strategy that will incorporate the 10 year principal payoutas new debt is issued.


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Appendix I I I Capital Improvement Program


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CIP Program FY 2013

FY 2012$ 180,741,535$ 85,273,471

FY 2013$ 187,933,684$ 73,932,000

Total Expenditure RequestTotal G 0Bond Request


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CIP HighlightsG.O. Funded Projects

o Traffic Calming Deviceso City Wide Fleet Acquisitiono 311 CRM / Business Intelligenceo Cleaborn (Triangle Noir)o Traffic Precincto Elvis Presley Blvdo Anti-Blight

$1,500,0006,568,8001,250,0002,250,0007,500,0008,000,0003,000,000

FY2013 City of Memphis, TN, Budget Overview

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