FY 2020 Budget Engagement

Madisonville Recreation Center, February 20th, 2019

Introductions

• Patrick A. Duhaney, City Manager

• Christopher Bigham, Budget Director

• Purpose of Meeting:

• Provide an update on the FY 2020 Budget

• Provide an overview on the budget process

• Budget Strategy and ‘Budget Basics’ brief

discussion

• Receive feedback from employees via online,

printed form and through discussion2

Fiscal Year 2020 Budget:

• FY 2020 Budget is a continuation budget of FY 2019

• Estimated Revenues: $406.2 million

• Estimated Expenditures based on a continuation budget:

$425 million

• Projected Deficit: $18.8 million

• Expenditures have outpaced revenues due to increased labor cost and a relatively flat income tax growth.

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Fiscal Year 2020 Budget:

• Administration has implemented fee increases the past two

years and are not recommending any substantial fee

increases for FY 2020.

• Shifting expenditures to other eligible restricted funds

(debt service payments, CPS payment) is already included

in the estimates.

• Without a new revenue source, balancing the budget will

fall on department reductions.

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Fiscal Year 2020 Budget:

• Exempting police and fire sworn strength, departments will

face an average 14% reduction.

• The FY 2020 base budget includes 2% COLAs for Public

Safety employees and 1% COLAs for all other staff.

• All union contracts are being renegotiated for FY 2020 and

the Administration will propose various contractual

changes to reduce costs to the City.

• The Administration will propose a structurally balanced FY

2020 Budget for approval prior to July 1, 2019.

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Budget Process

• Community Engagement

• Establish Revenue Estimates

• Establish Budget Targets by Department

• Departments Request Capital and Operating Budgets

• Reviewed by Budget Department and Ultimately

Recommended by the City Manager to the Mayor

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Budget Process

• Mayor has 15 days to Make Changes

• Transmits the Budget to Council

• Council Votes on Budget with any Proposed

Changes

• Budget Approved!

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Overall Budget Strategy

• Pass a structurally balanced

budget

• Revenues ≥ Expenditures

• Expand the tax base

• Economic Development &

Neighborhood Investment are focal

points

• Recruit and retain jobs

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Approved FY 2019 All Funds Budget Update

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2018-2019 Biennial From 2018 Approved From 2019 Biennial Approved

($ in Millions)

2018

Approved

2019

Approved

$

Change

%

Change

$

Change

%

Change

Operating Budget

General Fund $395.7 $393.2 $403.7 $8.0 2.0% $10.5 2.6%

Restricted Funds $674.4 $682.6 $692.1 $17.7 2.6% $9.5 1.4%

Subtotal Operating Budget $1,070.1 $1,075.8 $1,095.8 $25.7 2.4% $20.0 1.8%

Capital Budget

General Capital Budget $76.7 $64.1 $85.4 $21.3 33.2% $21.3 24.9%

Restricted Funds Capital $394.0 $200.3 $219.3 $19.0 9.5% $19.0 8.7%

Special Revenue/Matching Capital $34.1 $6.8 $16.0 $9.2 135.3% $9.2 57.5%

Subtotal Capital Budget $504.8 $271.2 $320.7 $49.5 18.3% $49.5 15.4%

Total All Funds Budget $1,574.9 $1,347.0 $1,416.5 $75.2 5.6% $69.5 4.9%

Table I - Approved FY 2019 All Funds Budget Update

Approved FY

2019 Update

General Fund Revenues of $404.7 million in FY19

So where does the money come from?

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General Fund Revenue

• Earnings Tax = 69.4% of Revenue

• 2.1% of gross salaries, wages, other personal services

compensation and business net profits

• All earnings derived in City regardless of residency. Rule is

first where you work, then where you live

• By Charter, split as follows:• 1.55% General Operating

• 0.30% Transit

• 0.15% Capital

• 0.10% Infrastructure

• General Fund Earnings Tax: $280.7 million

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Current Ohio Major City Income Tax Rates

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• City of Cleveland 2.50% -- Passed .5% increase 2016, effective 2017

• City of Dayton 2.50% -- Passed .25% increase 2016, effective 2017

• City of Columbus 2.50% -- Passed .5% increase 2009, effective 10/1/09

• City of Toledo 2.25% -- Renewed temporary levy of .75% effective 2017

• City of Cincinnati 2.10% -- Last increase 1988 for .1%

Current City Real Estate Tax Breakdown(Will be revised upon Hamilton County Auditor Updated Information)

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2018 Real Estate Tax Breakdown (Paid in CY2019)

$100,000 House Example

Tax DescriptionCurrent Dollars

Precentage of R/E Bill

School District $1,627.62 66.41%

Township $0.00 0.00%

City/Village

Debt Service 7.26 Mills $197.63 8.06%

General Operating 5.16 Mills $168.33 6.87%

Joint Vocational School $0.00 0.00%

County General Fund $68.70 2.80%

Public Library $29.04 1.18%

Family Service/Treatment $9.88 0.40%

HLTH/Hospital Care-Indigent $49.58 2.02%

Mental Health Levy $47.84 1.95%

Developmental Disabilities $114.68 4.68%

Park District $29.96 1.22%

Crime Information Center $4.84 0.20%

Children Services $54.64 2.23%

Senior Services $38.00 1.55%

Zoological Park $10.26 0.42%

Annual Real Estate Tax Bill $2,451.00 100.00%

*Other Departments includes: City Planning, Citizen Complaint Authority, Economic

Inclusion, Human Resources, and Transfers Out.14

Police 35.4%

Fire 26.3%

Police 35.4%

Fire 26.3%

FY 2019 OPERATING BUDGET

General Fund Expenditures – $406.3 million

Police36.1%

Fire28.9%

City Manager's Office4.8%

Health4.2%

Recreation4.0%

Public Services3.7%

Non-Departmental3.0%

Buildings & Inspections2.6%

Parks2.2%

Community & Economic Development

2.0%

Law1.9%

Finance1.8%

Other Departments*1.6%

Enterprise Technology Solutions

1.6%

Mayor, Council and Clerk0.9%

Transportation & Engineering0.8%

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OPERATING BUDGET

General Fund Expenditures

Public Safety67.9%

Non-Public Safety32.1%

General Fund ExpendituresWhere does the money go?

Personnel and Non-Personnel

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Personnel and Benefits84.0%

Non-Personnel16.0%

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OPERATING BUDGET

General Fund ExpendituresPersonnel Expenses represent 84.0% of the General Fund Budget

with 83.8% of employees represented by labor contracts.

FOP30.1%

IAFF24.1%

CODE9.8%

Building Trades0.2%

AFSCME19.6%

Non-Represented

10.0%

Part-Time6.3%

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General Capital Budget, FY 2019 $85.4 million

Transportation & Engineering

41.9%

Public Services26.6%

Community & Economic

Development17.1%

Recreation4.5%

Parks3.0%

Enterprise Technology Solutions

2.4%

Stormwater Management

Utility1.4%

Fire0.7%

Enterprise Services0.6%

Buildings & Inspections

0.6%

Police0.5%

All Other Departments

0.6%

Operating and Capital

Budget Comparison

Operating

• Day-to-day delivery of City Services

• Paying employees

• Covering the cost of supplies needed to offer services

• Cannot be financed with resources from the sale of permanent improvements

Capital

• Improvement, construction, or purchase of City assets

• Minimum $5,000 cost and 5 year useful life

• Financed with combination of cash and debt resources

Restricted Funds

• Not self supported (user fees

do not pay for 100% cost)

but restricted purpose

• General Fund may be used to

supplement

• Revenues generated stay

within the fund as mandated

by State law

• Parks and recreation special

activities funds, grant funds,

health center funds20

Restricted Funds Revenue

• Dedicated to a specific purpose by State Law or City

Charter

• Income Tax Distribution

• Transit

• Income Tax – Infrastructure

• Revenues generated stay within the fund as maintained

by State law

• Street construction & maintenance fund, Motor Vehicle

Tax, etc.

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Enterprise Fund Revenue

• Operates like a business, user

fees support 100% of operation

• No tax dollars associated with

operation

• Revenues generated stay within

the fund as mandated by State

law

• Water Works, Sewers,

Stormwater, Convention

Center, Golf and Lunken

Airport

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Fiscal Year 2020 Budget:

• Next Steps:

• Employee Engagement- The Administration is looking for

ideas from employees on efficiency and effectiveness

measures that could generate additional revenues or

expenditure savings

• Employee Suggestion form – online form and included in

this session for you to fill out

• After a short break, you can stay and participate in a

question and answer session as well as discuss any topics

related to the budget including your ideas

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QUESTIONS? COMMENTS?

Please visit our website:

http://www.cincinnati-oh.gov/finance/cincinnati-budget-engagement/

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