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CITY OF CHANDLER

COUNCILBUDGET

WORKSHOP#1

February 8, 20186:00 p.m. –7:00 p.m.

CouncilConference

Room

FY 2018-19 PRELIMINARY BUDGET UPDATE

Financial Outlook

Citizen Budget Survey Overview

Preliminary General Fund Forecast

Assessed Valuation Update

Capital Improvement Program Update

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AGENDA

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FINANCIAL OUTLOOK

The Local and National Economy is Strong Longest Period of Economic Growth Experienced

Development Revenues Continue, and Growth of Sustainable Revenue Remains Slow and Steady

Potential Unknown State Legislative Actions Keep Chandler Cautious

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FINANCIAL OUTLOOK

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Where We Have BeenEffectively Weathered Economic Fluctuations Due to Council’s Ability to Maintain Vision, Goals and Policies

From Building Boom and Growth The Great Recession Implemented Reductions With No Layoffs Maintained Infrastructure Through Use of Reserve

Where We Are TodayA Financially Stable, Well Run City, Providing Great Value to Citizens Working Mayor and Council’s Planned Vision

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FINANCIAL OUTLOOK

Continue Adherence to All Fiscal Policies Expanded and Updated in 2016

Structurally Balanced Recurring Revenues Support

Recurring Expenditures Non-Recurring Revenues Support

Non-Recurring Expenditures

Maintain Strong Reserves 15% General Fund Contingency Reserve Budget Stabilization Reserve

Manage Expenditure Growth Maintain Existing Services

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SOUND BUDGETING PRACTICES SUPPORTFINANCIALLY SUSTAINABLE GOAL

Maintaining Strong Fiscal Policies Contributes to High Bond Ratings

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FY 2018-19 CITIZEN BUDGET SURVEY

OVERVIEW

Conducted Nov 1, 2017 – Dec 31, 2017 1,134 Responses (140 fewer than Prior Fiscal Year)

Overall, High Scores for City Operations: “Satisfaction with Overall City Services”

97% Very Satisfied, Satisfied, or Neutral

“Quality of Life”96% Excellent or Good

“Good Return on My Tax Dollars” 96% Strongly Agree , Agree, or Neutral 8

CITIZEN BUDGET SURVEY

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Priority Based Budgeting Sets Desired Results Based on

Council Goals

Desired Results A Safe Community A Community with Leisure, Culture,

and Education A Community with Effective

Transportation A Healthy and Attractive Community A Community with Sustainable

Economic Health9

CITIZEN BUDGET SURVEY

Areas of Interest

Public Safety

Leisure/Cultural/ Education

Transportation

City Utilities

General Services

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PRELIMINARY 5-YEAR ONGOING GENERAL FUND FORECAST

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PRELIMINARY GENERAL FUND FORECAST

The Forecast Reflects Slow, Sustainable Revenue Growth and Managing Expenditure Growth

Stable, Slow and Steady Growth of Ongoing Revenues

No Significant Deviations from Prior Year Forecast 89% of Total Revenues are Considered Ongoing Ongoing FY 2018-19 PY $204.7 vs. Preliminary $205.9M Local Sales Tax Support 52% State Shared Revenue Support 29%

Monitor Potential Legislative Actions that MayThreaten City Revenues

Monitor Potential Impact of New Federal Income Tax Law on City Revenues

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PRELIMINARY GENERAL FUND FORECAST>REVENUES<

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ONGOING AND ONE-TIME SALES TAX REVENUES

Approximately 79% of Operating Budget is Personnel Includes Major Benefit Increases of Retirement, Health and Workers

Compensation Over the 5 Year Forecast Estimates Salary Adjustments are Not Included in Forecast (Except ACE

Contract Since it was for 2 Years) All Three Public Safety Agreements are Open

Retirement is the Fastest Growing Employee Benefit Grown from $15.5M in FY 14-15 to $27.9M in FY 18-19 (up 80% in 4 yrs) ASRS Rate Increase is Minimal for FY 2018-19 (+0.3%) PSPRS Rate Increases are Significant for FY 2018-19 Fire (+3.94%) & Police (+3.75%)

Additional $5M One-Time Planned Towards Unfunded Liability14

PRELIMINARY GENERAL FUND FORECAST>PERSONNEL EXPENDITURES<

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Managing Expenditure Growth is Vital Goal: Maintain Existing Services

Department Ongoing Decision Packages $8.3M Total (Includes 13.5 Positions)

Prioritize Known Ongoing Demands First Employee Benefits, Utility Costs, Contract

Increases 15

PRELIMINARY GENERAL FUND FORECAST>O&M EXPENDITURES<

$2.35M Ongoing Surplus Available in Preliminary ForecastIncorporates ACE MOU Commitments & Employee Benefits Increases(Does Not Include Contracts Yet to Be Negotiated or General Employees)

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ASSESSED VALUATION AND PROPERTY TAXES

UPDATE

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Full Cash Value 209,000$                              221,000$                              5.74%

Limited Property Value 165,541$                              173,818$                              5.00%

Assessed Limited Cash Value (10%) 16,554$                                 17,382$                                 5.00%

Primary      (.27/$100 Assessed) 44.70$                                   46.93$                                   5.00%

Secondary (.87/$100 Assessed) 144.02$                                 151.22$                                 5.00%

TOTAL CITY PROPERTY TAX BILL 188.72$                                 198.15$                                 5.00%

INCREASE FROM CURRENT YEAR 9.44$                                    

2017 2018 % Increase

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IMPACT OF 5% INCREASE TO LIMITED PROPERTY VALUES

5% increase in Limited Property Valuation, with Property Tax Rates unchanged, would increase the typical residential bill by $9.44 annually or $0.79 monthly.

BREAKDOWN OF $1 OF TYPICAL CHANDLER PROPERTY TAX BILL

Maricopa County, MaricopaCounty Flood Control District,

Central Arizona Water Conservation, etc.

Chandler Unified School District & Maricopa Community College District

City of Chandler

22.4 cents 67.8 cents 9.8 cents

Note: Based on 2017 Tax Bill information. Exact split will vary depending on the school district and any other special taxing districts on the bill.

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PRELIMINARY CAPITAL IMPROVEMENT PLAN

(CIP) UPDATE

Maintain Existing Infrastructure

Finish Planned Construction of Southeast Arterial Streets… and Neighborhood Parks (almost done)

Limit New Projects that Add Ongoing O&M

Address Public Needs (i.e. Streets, Multi-Use Fields)

MINIMIZE ANY INCREASE IN AMOUNT OF

PROPERTY TAX PAID BY HOMEOWNERS and BUSINESSES

CIP PRACTICES SUPPORT FINANCIALLY SUSTAINABLE GOAL

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FINAL PLANNED NEIGHBORHOOD PARKS

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PLANNED COMMUNITY & REGIONAL PARKS (PRELIMINARY)

*4 lighted fields at Tumbleweed and 2 lighted fields at Chuparosa can be supported in the updated plan as a result of higherFY 2016-17 tax levy receipts and planned repayments of loans from Impact Fee funds to the Debt Service fund

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PLANNED ARTERIAL STREETS PROJECTS (PRELIMINARY)

In process: Southeast Fire Station

Public Safety Training Facility Phase I

Downtown Improvements (Dakota St, Commonwealth Ave)

Arizona Avenue (Frye Rd to Pecos Rd)

Numerous Arterial Street Projects in Design or Construction (Ocotillo Rd, Queen Creek Rd, Chandler Heights Rd)

Museum

Water Reclamation Facility

CAPITAL PROJECTS IN PROCESS

CONTINUED FUNDING FOR STREET REPAVING AND PARKS CAPITAL MAINTENANCE

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Planning: Public Safety Training Facility Phase II*

Various Community/Regional Park Improvements

Remaining Arterial Street Projects

Water & Wastewater Facility Improvements

Downtown Parking Garage

CAPITAL PROJECTS UNDER REVIEW IN 10 YEAR PLAN

CONTINUED PLANNED FUNDING FOR STREET REPAVING, PARKS, and UTILITY CAPITAL MAINTENANCE

*This Project Utilizes all Public Safety Bond Authorization. A Bond Election will be Needed to Support Future Public Safety Projects.

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REMAINING BUDGET CALENDAR

BUDGET EVENT DATE

“Budget Connect” Web and Social Media Public Meeting (Prior to Council Meeting)

Thursday, February 22, 2018

Council Workshop #2 (Prior to Study Session) Monday, March 19, 2018

Proposed Budget Books Delivered to Mayor & Council Thursday, April 12, 2018

Council Action on Proposed and Revised Fees (Post 2/21) Thursday, April 26, 2018

All Day Budget Briefing with Mayor & Council (8 a.m. Start) Friday, April 27, 2018

Council Proposed Budget Amendments Due to Budget Monday, May 7, 2018

Council Discussion on Proposed Budget Amendments (Special Meeting after Regular Council Meeting)

Thursday, May 10, 2018

Tentative Budget Adoption Thursday, May 24, 2018

Public Hearing on Budget, CIP, and Tax Levy;Final Adoption of Budget and CIP

Thursday, June 14, 2018

Adopt Tax Levy Thursday, June 28, 2018

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CLOSING COMMENTS