City of South Burlington City Council Adopted January 12, 2013

FY 2014 Budget - Keys to Financial Success

Prepared by

Sandy Miller, City Manager and

Bob Rusten, Deputy City Manager

Issues Facing the General Fund in FY 2014

Revenue Reduced from FY 2013 to FY 2014:

Market Street Grant $ 14,690

Fire Impact Fees $ 86,000

Ambulance Fees $146,000

Road Opening Fees $ 22,600

Class Two Paving Grant $134,520

Total Reduction in Revenue $403,810

Issues Facing the General Fund in FY 2014 (continued)

Increased Spending from FY 2013 to FY 2014:

Interim Zoning $95,320

Health Insurance $176,300

Pension $224,245

Health Sick Bank $ 31,250

Fire Truck $100,000

Police Department Vehicles $ 38,500

PACIF $179,502

Total Increased Spending $845,117

Issues Facing the General Fund in FY 2014 (continued)

Total Reduction in Revenue $403,810

Total Increased Spending $845,117

Grand Total $1,248,927

FY 2014 - Summary, All Funds Expenses and RevenuesGENERAL FUND

FY 10 Actual FY 11 Budget Actual Unaudited FY 2012 Proposed

FY 2012 Actual Non-Audited FY 2013 Proposed

FY 2013 Estimated

FY 2014 Proposed

FY 13-14 $

Change

FY 13-14 %

Change

General Fund Expenditures 14,928,182 15,408,186 17,669,552 17,842,413 18,970,660 19,507,339 21,569,305 2,598,645 13.70%General Fund Non-Property Tax Revenues 5,025,710 5,593,095 6,919,284 7,680,098 7,760,177 8,261,633 9,693,586 1,933,409 24.91%Mgt/Staff Challenge - reduce costs /increase $ 250,000 0 0

net to be raised by property tax 9,902,472 9,815,091 10,500,268 10,162,315 11,210,483 11,245,706 11,875,719 665,236 5.93%estimated tax rate 0.4036 0.4235 0.0199 4.93%

SPECIAL FUNDS

FY 10 Actual FY 11 Budget Actual Unaudited FY 2012 Proposed

FY 2012 Actual Non-Audited FY 2013 Proposed

FY 2013 Estimated

FY 2014 Proposed

FY 13-14 $

Change

FY 13-14 %

Change

Budget Expenditures 2,140,017 959,878 959,878 790,284 790,284 719,789 -70,495 -8.92%Revenues 2,387,691 1,078,587 1,078,587 1,008,294 1,008,294 810,529 -197,765 -19.61%

net 247,674 118,709 118,709 218,010 218,010 90,740 -127,270 -58.38%

ENTERPRISE FUNDS

FY 10 Actual FY 11 Budget Actual Unaudited FY 2012 Proposed

FY 2012 Actual Non-Audited FY 2013 Proposed

FY 2013 Estimated

FY 2014 Proposed

FY 13-14 $

Change

FY 13-14 %

Change

Sewer Expenditures 2,579,820 2,851,553 2,707,410 2,855,148 2,668,971 2,668,971 4,180,822 1,511,851 56.65%Revenues 2,578,707 2,845,665 3,259,908 3,594,416 3,322,532 3,322,532 4,196,521 873,989 26.30%

net -1,113 -5,888 552,498 739,268 653,561 653,561 15,699 -637,862 -97.60%

Water Expenditures 1,981,020 2,053,554 2,337,435 2,270,812 2,370,308 2,370,308 2,454,815 84,507 3.57%Revenues 1,931,613 2,142,881 2,337,435 2,312,149 2,370,308 2,370,308 2,454,815 84,507 3.57%

net -49,407 89,327 0 41,337 0 0 0 0

Stormwater Expenditures 1,309,994 851,241 1,737,618 1,205,559 3,621,856 3,236,856 1,933,146 -1,688,710 -46.63%Revenues 1,310,908 1,563,953 1,836,000 1,887,497 3,622,114 3,451,922 2,065,621 -1,556,493 -42.97%

net 914 712,712 98,382 681,938 258 215,066 132,475 132,217 51246.90%

TOTAL OF ALL FUNDSTotal EXPENSES 22,939,033 21,164,534 25,411,893 25,133,810 28,422,079 28,573,758 30,857,877 2,435,798 8.57%Total Non Property Tax Revenue 13,234,629 12,145,594 15,431,214 16,552,747 18,083,425 18,414,689 19,221,072 1,137,647 6.29%

Net 9,704,404 9,018,940 9,980,679 8,581,063 10,338,654 10,159,069 11,636,805 1,298,151 12.56%

all surpluses 198,068 796,151 769,589 1,581,252 871,829 1,086,637 238,914 -632,915 -72.60%net 9,902,472 9,815,091 10,750,268 10,162,315 11,210,483 11,245,706 11,875,719 665,236 5.93%challenge -250,000 0 0 0 0 0Money to be raised via property tax 9,902,472 9,815,091 10,500,268 10,162,315 11,210,483 11,245,706 11,875,719 665,236 5.93%

Key Elements of FY 2014 Budgets

General Fund expenditures are $21,569,305, an increase of $2,598,645, or 13.7%.

General Fund non-property tax revenues to increase by $1,933,409, or 24.91%.

Property tax rate estimated to be $0.4235, an increase (1.99 cents), or 4.93%.

Special Funds budget expenditure is $719,789, a $70,495 decrease from FY 2013.

Increases In FY 2014 General Fund Non-Property Tax Revenue The City continues to increase ways to raise

money other than through property taxes:

$ 10,000 – Building and Sign Permits. $ 29,000 – Recreation Program Fees. $125,000 – Local Option Tax. $ 75,000 – Police Impact Fees. $ 47,000 – Hinesburg Road Grant. $ 27,197 – Reparative Board Grant. _________ $313,197 - Total

FY’14 Water1. In FY'14 our resident’s water rates are

the 4th lowest of the 15 member communities served by Champlain Water District.

2. The rate increases are due to higher operating costs to manage the water system.

3. We are beginning a 7-year water meter replacement program in FY’14 and do so within the confines of this department’s historical spending levels.

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FY’14 Stormwater1. The FY’14 budget initiates the budget process for future

MS4 permit expenses expected to cost SB over $40 million dollars. The new permit was recently passed into law in Vermont by ANR.

2. To comply with the permit, the City must develop Flow Restoration Plans (FRPs). The FY’14 budget includes a one-time expense of $256k for this work. The FRPs will identify projects required to meet the TMDL targets, establish a schedule, and create a budget so that all work is completed by 2033, as required by MS4.

3. We analyzed the ERU rate for the duration of MS4’s 20-year compliance schedule and propose to gradually raise the money needed to implement the FRPs. The next 10 years we project an annual 2.5% ERU increase.

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FY’14 Sewer1. FY’14 and future rate increases (projected to be 2%

annually) result in necessary cash reserves to help pay for projected ~2022 upgrades/improvements to the Bartlett Bay Sewer Treatment Plant.

2. The FY’14 budget includes the first of 20 annual repayments ($1.27M) to the State Revolving Loan Fund for the recently completed Airport Parkway Sewer Treatment Plant project. This will be partially offset annually by Colchester’s contributing payment to us of $742k.

3. An increase of $109,532 of the annual charge to SB for our discharges to BTV’s sewer system (Proctor-Hadley neighborhood). Given this increase, we included $15k in the FY’14 budget to scope the feasibility and cost of an expansion of our sewer system to serve and treat the sewage from this area.

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Key Elements Of FY 2014 Budgets

The Water Fund budget is $2,454,815, an increase of $84,507. Water user fees are proposed to increase 3.9%.

The Sewer budget is $4,180,822. This is a increase of $1,511,851 or 56.65% from the current year’s budget. A rate increase of 2.0% is proposed.

The Stormwater Fund budget is $1,933,146, a decrease of $1,688,710 or 46.63%. To meet MS4 requirements, a rate increase of 2.5% is proposed for FY 2014.

Estimated City Taxes and Utilities Based on Fiscal Year 2014 Budgets

City Tax rate estimated as 1.99 cent increase, from $0.4036 to $0.4235 For condo at $224,000 is an increase of $44.58 annually. For primary residence at $323,000 is a $64.28 annual increase. Each $100,000 in assessed valuation yields a $19.90 increase.

For Average Home Owner:

Water rate proposed increase = $9.20 annually. Stormwater proposed increase = $1.80 annually. Wastewater proposed increase = $7.26 annually. Total Estimated City Tax and Utility Increase

Condo, $224,000 = $62.84 annually, $5.24 monthly. Single Family Detached, $323,000 = $82.54, $6.88 monthly.

Goals, Objectives & Other Considerations for FY 2014

Budget designed to achieve the following:Council Established PrioritiesTax Incremental Financing & City CenterInterim Zoning“Path to Sustainability”Workers’ Compensation improved ratingFacilities Issues identifiedIntergovernmental and Interagency Cooperation and Collaboration