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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
Public WorksNeighborhood Improv
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
Public WorksNeighborhood Improv
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
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