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Home My WebLink About08/26/2009 AGENDA I FILE CITY COUNCIL 345 6th Street, Suite 600, Bremerton, WA 98337 D Phone (360) 473-5280 AUGUST 26, 2009 CITY COUNCIL STUDY SESSION 5:00 PM - STUDY SESSION in COUNCIL CONFERENCE ROOM 603 The Study Session is open to the public but there will be no opportunities for input or participation; no action will be taken, and the content of these items is subject to change... 1. Lease Agreement between EMERALD BAY YACHTS and CITY OF BREMERTON - Gary Sexton, Redevelopment Projects Administrator 2. HUD - BED I Grant Acceptance for Bremerton Boardwalk Project - Phil Williams, Public Works & Utilities Director; and Tom Knuckey, Utilities Managing Engineer, Public Works Department 3. Briefing on Regional Fire Authority (RFA) - Fire Chief AI Duke (Information Only) 4. Briefing on AWC Municipal Budgeting Workshop - Council Members Nick Wofford and Dianne Robinson (Information Only) 5. Council Committee Chair Reports 6. Other General Council Business (as necessary and as time allows) II Americans with Disabilities Act (ADA) accommodations provided upon request. Those requiring special accommodations should contact the City Clerk's Office at (360) 473-5323 by noon on the Monday preceding the Council meeting. 1: te'" -# tf BUDGET SUGGESTIONS For 2010 Information Bulletin No. 533 ~R.S~ August 2009 ~ J~ WwW. Mrsc. or, IPeal>>l'w.ti~~/bs1~. p4f Budpt .ncI FIsaII M.........nt Workshop AWC/ WFOA Association of Washington Cities Washington Finance' Officers Associatlon~ . < < ~~P;@lft~l11J~ ~y~ C@~[ilJ~~~~@m1lJa\[ilJ R@bii[ilJS;~lf1J ~ ,.., _ ~ ""~ ___ :/". ~ ___ ~ _ ~ ~. ~ ~ ....,_ .- """'" ~y =. -.. ~ ~ .,,-- ~ . ~. _ . ~ ~ _ - ~ "'_ ,.. ~ _ _ ,.,,- ""' . ~~"'" ~T _. Pre- Workshop- Working with Stakeholders to identify Spending P - _. - - U - I: - 1- 'l!Iontl'es In ',n.ce'rta In~ ~conomliC' Imes · Re-exa mine Spend i ng Priorities. (because of the National recession, and the impact that it is having on local government revenues) Even if you are not having a budget shortfalls, you need to reviewing Finance for the future of your community. · One of the key elements to identify spending priorities are to know what directions your city is headed in. (Everyone needs to be on board about the direction, this includes City Officials, Employees, Staffs and your Citizens. A good budget process starts with the public, and the policymakers keep the proposed budget consistent with the directions provided by them. This will help you to develop a preliminary budget for your city. · Initiated an interaction session with citizens for setting community prioritiesJ it is a mustJ (This isa element that may get overlooked, but it is the budget plan for spending a citizen's money on services for the citizens) The budget process should be open and interactive from beginning to end. · Engage all stakeholders in making difficult choices about where to allocate limited resources. Thursday- Fiscal Accountability · Each of us have important roles as policy makers, department director, finance/clerk/treasurer. These are skilled required positions, which have fi s ca I pol i c i e S. (The framework is 1. Budgetin~, 2. Monitoring, and 3. Program evaluation.) · We review what has been found as an audit pro b I e m (but we do not have a mechanism in place to see if you are really meeting your goals and having accountability for what is required by the policy.) · Another way of checking budget format is with performa nce measu rement criteria. ( and being able to be consistent from one department to another is important. We need to have a Program Evaluation for measuring and checking the results for efficiency "Budget 101" Nuts & Bolts · The Basic Budget terminology: which should be a Glossary in your Budget. (We have a Glossary of terms in our budget) Municipal Revenue Structure(Wehavearevenue structure in place) and the general Know-how for Budgeting.( The general know-how is knowing what your estimate is for the ((beginning fund balance" for ((Each funds" and to know how much you are anticipated will be coming in for the year.) · Learn roles and responsibilities for elected and non-elected officials in tying a budget to co m m unity goa Is ( One of the Key elements for meeting your goals for the budget.) · Always look at the basic services level.( Makesurethat you are meeting those levels, these are requirements that can not be over looked. Notes on Budgeting for Cities · Remember to always discuss legislative issues and initiatives that may impact your cityJs budget · Learn how to develop sound budget framework that will build a stronger financial Plan for good and bad time. · Look at a Long-term plans "Strategic BudgetsJJ for the futu re · Information on Budget Amendments- See Attach · A Fiscal Impact Statement for Initiative l033-seeAttach These are some of the budget suggestions for 2010 · Please read the purple book copy, it has a lot of good information, with examples to follow. · It also have the changes that's being made in the "Annexation Laws" · Also it includes the Funding for Public Improvement in the Local Revitalization area, that Bremerton is in a submittal mode with an "Intent letter for the 330,000." (Under SSB . 5045) Please read. · Property Tax Issues BUDGETAMENDMENT-MAT~X You asked our office when hearings are required for city and county budget amendments. Generally, a hearing is only required for budget amendments calling for increase expenditures resulting from "emergency" situations that do not fall within the "nondebatable emergency" definitions of the statutes. There are distinct budget statutes for I st, 2nd, and 3rd class cities and towns under 300,000 (RCW 35.33); cities and towns under 300,000 with biennial budgets (RCW 35.34); code cities (RCW 35A.33); code cities with biennial budgets (RCW 35A.34); cities over 300,000 (RCW 35.32A); and counties (RCW 36.40). These various statutes have largely identical requirements for amending budgets. A hearing is generally not required if the budget amendment is related to I) "nondebatable" emergencies as defined by statute; 2) unanticipated revenue; or 3) budget reductions. These categories of amendments must be made by ordinance, but do not require a hearing. However, a hearing must be held for amendments increasing expenditures for emergencies that are not considered "nondebatable" under the statute. The chart below attempts to outline when the applicable state statutes require a hearing. However, any city or county may have ordinances requiring a hearing or other procedure beyond what is required by the RCWs. Is a hearing required for budget amendments? Code City Code City with All other All other cities Cities over County Biennial Budget cities and and towns under 300,000 towns under 300,000 with 300,000 biennial budget "Nondebatable" NO NO NO NO NO NO Emergency RCW RCW 35A.34.140 RCW RCW 35.34.140 RCW RCW 35A.33.080 35.33.081 35.32A.060 36.40.180 Other Emergency YES YES YES Yes Not YES RCW RCW 35A.34.150 RCW RCW 35.34.150 addressed RCW 35A.33.090 35A.33.091 by statute. 36.40.140 Reduction of NO NO NO NO NO NO budgeted amount RCW RCW RCW RCW RCW RCW 35A.33.120 35A.33.200(3) 35.33.121 35.34.200(3) 35.32A.050 36.40. Spending NO NO NO NO Not NO unanticipated RCW RCW RCW RCW addressed RCW revenue 35A.33.120 35A.33.200(1)(d) 35.33.121 35.33.200(1)(d) by statute. 36.40.100, 140, 195 Transfers within a NO NO NO NO NO NO single fund RCW RCW RCW RCW RCW Miller v. 35A.33.120 35A.33.200(2) 35.33.121 35.33.200(2) 35.32A.050 Pacific County, 9 Wn. App. 177 (1973) STATE OF WASHINGTON OFFICE OF FINANCIAL MANAGEMENT Insurance Building, P.O. Box 43113. Olympia, Washington 9B504- 3113.. (360) 902- 0555 Fiscal Impact Statement for Initiative 1033 As sent to the Office of the Secretary of State, August 10, 2009 Fiscal Impact througb Calendar Year 2015 Initiative 1033 limits annual growth of state, city and county general fund revenue to the rate of inflation and population growth. General fund revenues exceeding this limit must be usedto reduce the following year's state, city or county general fund property tax levy. The initiative reduces state general fund revenues that support education; social, health and environmental services; and general government activities by an estimated $5.9 billion by 2015. The initiative also reduces general fund revenues that support pu~lic safety, infrastructure and general government activities by an estimated $694 million for counties and $2.1 billion for cities by 2015. General Assumptions . The initiative is set on a calendar year (CY) basis. . CY 2010 revenue limit is calculated as follows: CY 2009 General Fund Revenue X (1 + 2009 % Change Population) x (1 + 2009 % Change Inflation) . CY 2010 general fund revenues that exceed the CY 2010 revenue limit will be transferred into new "Lower Property Tax Accounts" for the state, counties and cities. The first transfer(s) into the new accounts will occur in CY 2011. . The first property tax levy to be reduced by the initiative is the 2011 levy, which is collected in CY 2012. Thus, funds will be transferred from the new "Lower Property Tax Accounts" into state, county and city general funds in CY 2012 to account for any reduction in 2011 levies. State Hevcnue Estimate - Assumptions · The initiative defines state general fund revenue as the aggregate of revenue from taxes, fees and other governmental charges received by state government that are deposited into any fund subject to the state's expenditure limit under RCW 43.135.025. For CY 2009 and CY 2010, state general fund revenues are General Fund - State revenue estimates from the June 2009 Washington State Economic and Revenue Forecast Council converted from a fiscal-year basis to a calendar-year basis. . The following state revenue sources, totaling less than $30 million annually, have been excluded from these estimates: . . o Sales and income from property. o Contributions and grants. o Grant and loan repayments. o Indirect and prior cost recoveries. o Unclaimed property. o Charges for publications and documents. o Interest and investment earnings. . State general fund revenues for CYs 2011-15 are estimated to grow, on average, by the change in real per capita personal income plus change in inflation phis change in population, adjusted for revenue elasticity. This methodology is consistent with prior long-term revenue forecasts produced by the Office of Financial Management (OFM), and results in an average annual growth rate of 4.8 percent. . State general fund revenues are reduced by, the amount required to be transferred into. the Budget Stabilization Account created under Article 7, Section 12, of the Washington State Constitution. ' . The initiative defines inflation as the annual percentage change in the Implicit Price Deflator for Personal Consumption for the United States as published on or about March 27 each calendar year by the Bureau of Economic Analysis and reported by OFM. Inflation estimates for.cy 2009 and CY 2011 are from the June 2009 Washington State Economic and Revenue Forecast. Inflation estimates for CYs 2012-15 are from the June 2009 IHS Global Insight forecast of the Implicit Price Deflator for the United States. The Washington State Economic and Revenue Forecast Council relies on IHS Global Insight models and data for the U.S. portion of the official state economic forecast. . The illitiative defines population growth' as the percentage change in the statewide population based on the annual statewide population determinations'reported by OFM during the prior. calendar year and the current calendar year. Statewide population growth estimates are from OFM's 30- Year Forecast of the State Population. E dSTATEC hR stllnate as ecelpts: , FUND CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($676,000,000) ($875,000,000) ($1,125,000,000) ($1,447,000,000) ($1,803,000,000) Fund - State . ~" . Lower State 0 , $676,000,000 $875,000,000 $1,125,000,000 $1,447,000,000 $1,803,000,000 Property Tax Account State Costs to Implement - Assumptions Less than $50,000 will be incurred by OFM in CY 2009 and CY 2010 to set up, test and verify computer systems, and establish policies and practices to implement a state general fund revenue limit. County and City l~evenue Estimate - Assumptions . The initiative applies to counties, first class cities, second class cities, code cities, towns and unclassified cities. 2 . To account for possible different patterns in population and revenue growth, counties and cities were analyzed using four groupings: 1. Urban COUlity - 7 counties 2. Rural County - 32 counties 3. Cities in Urban Counties - 109 cities and towns 4. Cities in Rural Counties - 172 cities and towns Urban counties are Clark, King, Kitsap, Pierce, Snohomish, Spokane and Thurston; all others are rural counties. Under RCW 82.14.370, rural counties are defIned as a county with a population density of less than 100 persons per square mile or a county smaller than 225 square miles as determined and published each year by OFM for the period July 1 to June 30. County and city general fund revenues are defIned as the aggregate of revenue from taxes, fees and other governmental charges received by the county or city and deposited into the county current expense fund or city general fund, respectively. County and city revenues are estimated from 2007 fInancial information contained in the Local Government Financial Reporting System (LGFRS) of the Washington State Auditor's OffIce. Only funds reported within LGFRS as general fund revenues are assumed to be deposited into the county current expense fund or city general fund, and therefore, are included in these estimates. . The following county and city revenue sources have been excluded from these estimates: o Federal and state direct and indirect grants. o State shared taxes or revenues. o Charges for contracted services performed by counties or cities. o Charges for enterprise activities or charges that are not governmental in nature. o Inter-fund and inter-department charges. o Interest and investment earnings. . County and city general fund revenue growth rates for CYs 2009-15 are related to the state's revenue growth rate by estimating each grouping's fIve-year historical rate of revenue growth in proportion to the state's revenue growth rate of 4.8 percent. . Inflation estimates for counties and cities are the same as used for the state. . Population growth is defIned as the percentage change in the countywide population for counties and the percentage change in citywide population in cities, as reported annually by OFM. County and city population growth is estimated from OFM's 30-Year Forecast of the State Population, adjusted using OFM's Washington State County Growth Management Population Projections: 2000-2030 and each grouping's historic population growth rates. E d URBAN COUNTY C h R stunate as ecelpts: FUND CY 2010 CY2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($55,000,000) ($70,000,000) ($87,000,000) ($111,000,000) ($137,000,000) Fund - Urban Counties Lower 0 $55,000,000 $70,000,000 $87,000,000 $111,000,000 $137,000,000 County Property Tax Accounts 3 .f~ . ~' E' d RURAL COUNTY C h R stllnate as ecelpts: FUND CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($24,000,000) ($35,000,000) ($46,000,000) ($58,000,000) ($72,000,000) Fund - Rural Counties Lower 0 $24,000,000 $35,000,000 $46,000,000 $58,000,000 $72,000,000 County Property Tax Accounts E' d CITIES IN URBAN COUNTIES C h R stlmate as ecelpts: FUND CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($176,000,000) ($257,000,000) . ($350,000,000) ($463,000,000) ($588,000,000) Fund - Cities in Urban Counties Lower City 0 $176,000,000 $257,000,000 $350,000,000 $463,000,000 $588,000,000 Property Tax Accounts ; E' d CITIES IN RURAL COUNTIES C hR' s tllna te as ecelpts: FUND CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($30,000,000) ($42,000,000) ($55,000,000) ($72,000,000) ($91,000,000) Fund - Cities in Rural Counties Lower City 0 $30,000,000 $42,000,000 $55,000,000 $72,000,000 $91,000,000 Property Tax Accounts County and City Costs to Implement - Assumptions County and.cities will incur indeterminate costs to implement the initiative during CY 2009 and CY 2010 to modify computer systems, establish policie~ and practices, train employees and respond to requests for public information. Costs will vary by jurisdiction and depend, in large part, on the jurisdiction's ability to modify accounting systems to identify and track revenues subject to the general fund revenue limit. 4