Proposed FY 2021 Budget PresentationGeneral Fund

Trust & Agency Fund

Matt McQuillen, City Manager

Joyce Cortum, Director of Administrative Services

Trust & Agency Fund – Key IssuesRevenues1) Same property tax impacts as General Fund2) Revenues from State Property Tax Backfill3) Levy went from $1.34 to $1.59 in FY 2016-17, has been $1.59 ever since.Expenditures1) Budgeting 10% annual increase in health insurance costs, conservative

estimate as health insurance claims are trending positively versus premiums.2) Retiree insurance increase w/ projected retirements3) 80% for insurance programs, 20% for Police pensions

Fund is stable, tax rate to stay at $1.59, need to closely monitor future trends.

General Fund – FY 2018-19 Actual1) Revenues – Increased $300,000 (1.6%)

Increases in aquatic center & recreation fees, building permit fees, and interest income.

2) Expenditures – Decreased 718,000 (-3.8%) Spent 96.2% of what was budgeted, less salary/wage costs

Less Westcom expenses and parks/rec expenses

Less Hotel/Motel allocations and other General Fund related expenses

3) Financial Position/Cash Balance Original Budget = $122,500 deficit

Actual/Audited = $318,500 surplus

Cash balance as % of Expenditures = 30.1% Approved Budget, 35% Actual

General Fund – FY 2019-20 Revised1) Revenues – Increased $735,000 (+3.9%)

Increases in development (building permits) activity, transfers in and outside agreements (WDM-Westside Station Buyout, Mercy Water Tower Advertising)

2) Expenditures – Increased $1,200,000 (+6.5%) Higher than anticipated Westcom expenses and expenses associated with Westside Station

and Urbandale Station #43 start up Higher IT and Facility costs (Cybersecurity ramp up) and timing of administrative costs Large transfer out ($600K million) for Flood Prone Property Buyout Program – Second Phase

3) Financial Position/Cash Balance Original Budget = $1,000 surplus Revised Budget = $493,000 use of cash reserves (due to Flood Buyout Phase 2 transfer out)

Cash balance as % of Expenditures = 28.8% Approved Budget, 29.6% Revised

General Fund – Overview Main Operating Fund of the City of Clive

Provides for primary governmental activities Public Safety, Public Works, Health & Social Services, Culture & Recreation, Community

& Economic Development and General Government

Current FTE count: 129.2+11.2% in past 5 years, nearly 15% growth in population

Addition of 3 police officers in patrol division requested

Addition of building inspector position in Community Development

Total City of Clive Property Tax Levy = $10.14General Fund Tax Levy = $7.07 (70% of total)

Administrative Services Provides official municipal services and records management for Clive

9 full-time positions (transfer of HR Manager to Admin resulted in growth to 9 positions)

Current Trends and Issues (Budget Memo)

Re-Organization of Department

Multiple continuous improvement opportunities through technology

Significant Budget Requests for FY 2020-21

Phase 2 of Reorganization – Accounting Specialist to Finance Manager

Acquisition of additional financial software tools for process improvements

Police Primary law enforcement agency for Clive 28 full-time and one part-time positions

Current Trends and Issues (Budget Memo) Staffing History and Pressures – Past and current efforts to delay additions, retirements Patrol schedule pressures and desire to obtain 4 day/10 hour patrol schedule Technological Advancements and Administrative Improvement

Significant Budget Requests for FY 2020-21 Addition of three officers in the patrol division = Ongoing cost of $185,000 in General Fund and

$100,000 in the Trust and Agency Fund (pension and benefits) Patrol vehicle replacements (2) = $87,700 Unmarked vehicle replacements (2) = $59,400 total New Patrol vehicles to support patrol staffing addition request (2) = $172,200 (Hybrid SUVs)

Fire Provides Fire and EMS services for Clive 20 full-time and approximately 30 part-time positions

Current Trends and Issues (Budget Memo) Service Delivery Collaborations (Urbandale and Westside) Facility Needs – New Public Safety Facility Paramedic Training and Equipment Update

Significant Budget Requests for FY 2020-21 Replacement of Thermal Imagining Cameras (2) = $19,400 Addition of 2nd Power Loading Cot for Ambulance = $30,000 Addition of new apparatus exhaust system (5) = $45,000 Paramedic training reimbursement = minimum $8,000/year, varies depending on recruits

Leisure Services Provides Quality of Life services for Clive (Parks/Rec/Library) 22 full-time, 5 part-time and 100+ seasonal positions

Current Trends and Issues (Budget Memo) Last Budget Memo by Todd Seaman, reflections on Leisure Services since it was created Landscaping maintenance approach changes Aquatic center daily admission fee increase request and operating hours adjustment

Significant Budget Requests for FY 2020-21 Replacement of Boom Truck = No Cost, Public Works Boom Truck Transfer Replacement of mowing equipment (Zero Turn and Wide Area Mower) = $84,300 total Replacement of 1-ton dump truck w/ plow and sander = $68,500 Replacement of sideline fencing at Campbell Park ballfields = $50,300 Replacement of shade structures at Aquatic Center = $30,000 Park signage multi-year signage replacement program = $24,000/year for three more years Walnut Ridge Park and Campbell Park tennis court resurfacing = $30,000 total Addition of shade structure for Campbell Park Concession Stand = $8,300

Landscape Maintenance Plan Implementation

Library Before

Library After

Plan for 156th Street Roundabout

Community Development Provides development activity oversight for Clive 7 full-time positions, one part-time position

Current Trends and Issues (Budget Memo) Zoning Ordinance Update University Avenue Corridor Study District 1 (The Falls) Neighborhood Plan and Flood Prone Property Buyout Plan Capital Improvements Plan Support for Citywide Efforts: Public Safety Facility Development, Stormwater Management,

Greenbelt and Parks Planning

Significant Budget Requests for FY 2020-21 Addition of a Building Inspector = Ongoing costs of $70,000/year in the General Fund and

$15,000/year in the Trust & Agency Fund One-time cost of $50,000 to support West Des Moines/Clive University Avenue Corridor Plan

City Manager’s Office General Management and Oversight of City of Clive operations

Technology Services Division and Human Resources Division (proposed to move to City Clerk’s Office)

5 full-time positions, 2 in CMO and 3 in Technology Services Was reduced to 5 full-time in current budget year with transfer of HR Manager to Admin Services

Current Technology Services Trends and Issues (Budget Memo) Disaster Recovery/Business Continuity Best Practices Security General Fund and Capital Equipment Expenditures Future of Technology Services

Significant Budget Requests for FY 2020-21 Annual network infrastructure replacements = $43,000 Annual computer replacements = $38,000

General Fund – RevenuesSignificant Revenue Increases

1) Property Tax (+$820,000)a. Assessed Valuation Increased by 7.18%, Taxable Valuation increasing by 7.96%

b. Non TIF-related taxable valuation increased by 3.25%a. Residential Rollback decreased from 56.92 to 55.07%

b. Multi-Family Residential Rollback decreased from 75% to 71.25%

c. Tax Increment Financing – Taxable Value Release of over $41 Million, 4.7% increasea. Represents the majority of the City’s property tax growth, release to County and Schools

2) Dallas County LOST Property Tax Relief (+110,000)a. Total of $500,000 for tax relief to offset additional expenses associated with Urbandale

Fire Station #43 collaboration (over $500,000 of increased cost).

General Fund – Revenues

Significant Revenue Decreases

1) Decrease in building permit revenue, only as a result of new hospitals.

2) State Commercial Property Tax Backfill (discussed in upcoming slide)

a. Program is capped statewide, little change to revenues

Overall revenues increase of 5.3% from FY 2019-20 to FY 2020-21, $957,000 in additional revenue.

* - Increase in “Transfers In” due to continuation of salary/expense reallocations and the Dallas County LOST property tax relief funds.

General Fund – ExpendituresSignificant Expenditure Changes1) Salaries and Wages (+$711,000)

a. Annual wage increase estimate of 4% (Based on October 2018 CPI of 1.5%) b. Net addition of 4 FTE, 3 Patrol Officers and 1 Building Inspector, +$255,000

a. $100,000 in Trust & Agency Fund to support health insurance costs of positions and pension costs for new Patrol Officers.

c. Additional transfers in from Road Use and Utility Funds for shared positions/expenses, +$100,000

2) Collaborative Public Safety Programs (+$212,000)a. Westcom Dispatch Costs: +$7,000b. Fire/EMS Collaborations: +$205,000 (Westside Station up $55K, Urbandale Station #43 up $150K)

Overall expenditure increase of 6.1% from FY 2019-20 to FY 2020-21, $1.1 million in new expenditures.

General Fund Financial Position1) Financial Position/Cash Balance

Last Year’s Projection = $96,000 surplus

Proposed Budget = $176,000 surplus

2) 99% Expenditure Assumption

$380,000 surplus in FY 2020-21

Cash balance as % of Expenditures = 28.8% Projected, now projected at 29.7% in Proposed Budget

Future projections show stability for the short-term, new projections.

State Property Tax Backfill Results of 2013 Commercial Property Tax Legislation $534,000 received from State for Backfill

Prorated based on levy: $373,000 General, $78,000 Debt, $83,000 T&A Stable when compared to previous and current fiscal years

What is the potential result of losing the backfill? Debt Service and Trust & Agency can withstand loss, although limits future

General Fund Options for $370,000 Backfill Revenue Loss1) Status Quo – If lost, fund balance drops to 27.9%2) Expenditure Reductions – One-time, phased3) Revenue Enhancement – One-time, phased = $0.23 levy4) Hybrid – Combination of Option #2 and #3

State 2% Transparency Threshold 2019 Property Tax Legislation - 2% Transparency Threshold Requires supermajority vote on resolution to exceed 2% property tax revenue growth

threshold for a proposed City budget (7.9% growth included in FY 2020-21) 3.25% growth from new construction and re-valuations and balance from TIF value release

If limited to 2% property tax revenue growth, loss of $1 million in revenue Prorated based on levy: $820,000 General and $180,000 Trust & Agency

What would happen to the tax rate if 2% threshold was observed? Drop in Clive tax rate by $0.64. $0.53 reduction in General Fund levy and $0.11 reduction in Trust & Agency Levy

Expenditure Reductions to Compensate for Revenue Loss1) $820,000 in General Fund = Eliminate new positions (-$255K), renegotiate Urbandale

Station #43 agreement (-$205K), other reductions totaling $360K.2) $180,000 in Trust & Agency Fund = Eliminate new position benefits ($115K) and other

reductions totaling $65K.

City Manager’s Recommendation

Maintain the existing Clive tax levy rate of $10.14 (GF $7.07, Debt $1.48, T&A $1.59)

City Total City Tax Levy

Altoona 9.94$

Clive 10.14$

Ankeny 10.35$

Urbandale* 10.52$

West Des Moines 10.99$

Johnston 11.65$

Pleasant Hill 11.65$

Grimes 12.81$

Waukee 13.40$

Norwalk 15.40$

Windsor Heights* 16.52$

Des Moines 16.64$

* Does NOT include $0.40 Sewer District Levy

Metro Area City Tax Levies by Levy

City Manager’s Recommendation

Recommendation based on the following factors:

1) Directions Outlined in Strategic Plan

a. Cost Effective Delivery, Forward Thinking, Continuous Improvement

b. High quality services at a very competitive tax rate = the “Best Deal in the Metro Area” for Clive residents/businesses

2) Meeting the Needs of a Growing Community

a. Population growth of 12% over past five years

b. Staffing growth of 8.3%, 12.3% w/ proposed Fire positions upgrade

c. Inclusion of operational support of Urbandale Fire/EMS collaboration

Cost to the Clive Taxpayer

City Council Direction & Next StepsDirection1) Do you concur with the City Manager’s Recommendation for the proposed FY 2020-21 General Fund

Budget? Police request of three additional patrol officer positions? Community Development request for an additional building inspector position?

2) Does the City Council have any additional thoughts or staff direction regarding optional budget programs/items?

Next Steps1) Further discussion at February 6 Council work session (if needed)2) General Fund and Trust & Agency Fund budgets incorporated into overall budget proposal3) February 13 – Public hearing and resolution on exceeding 2% property tax revenue growth (super

vote). Budget Publication and setting the budget public hearing, sets maximum property tax rate.4) March 12 - Budget public hearing and vote on proposed FY 20-21 Budget5) March 31 – State mandated deadline for City budget certification