PowerPoint Presentation (Added on 1/7/22)

Council Workshop
FY22-23 Budget Discussion
January 11, 2022

Agenda
2
1) FY22-23 Budget Overview
a) Property Tax Levy
2) Five-Year Financial Forecasts
a) General Fund
b) Special Revenue Funds
c) Enterprise Funds
3) City Sales Tax

Budget Calendar
3
Item
Date
Workshop #1 – Budget Overview / Revenues / Five-Year Financial Forecasts 
January 11, 2022
Workshop #2 – FY23-32 Capital Improvement Plan
February 1, 2022
Workshop #3 – FY23-32 Capital Improvement Plan 
March 1, 2022
Workshop #4 – (All Day) FY23 Operating Budget Department Presentations
April 5, 2022
Workshop #5 – (All Day) FY23 Operating Budget Department Presentations
April 7, 2022
Workshop #6 – FY23 Final Budget Workshop
April 19, 2022
Voting Meeting – Tentative Budget Adoption
May 10, 2022
Voting Meeting – Final Budget Adoption / Property Tax Levy
June 14, 2022
Voting Meeting – Property Tax Adoption
June 28, 2022

Budget Process
4
Staff 
Prepares 
5-Year 
Financial 
Forecast
Develop 
Base 
Operating 
Budget 
Requests
Develop 
and 
Balance 
CIP
Present 
Draft 
Budget 
Council 
Adopts 
Final 
Budget
Staff 
Prepares 
Budget 
Book

Budget Components
5
Revenues
Capital Improvement 
Plan
Debt Service
Contingency
Operating
Expenditures

Balanced Budget
6
Revenues/Fund 
Balance
Expenditures

Financial Policies – Property Tax
7
“To ensure ongoing General Fund stability, the 
primary property tax levy will be evaluated each year 
to determine where it should be set.”

Property Tax
8
Schools
~62%
City of 
Glendale 
(Prim.)
~4%
City of 
Glendale 
(Voter 
Approved)
~13%
County
~14%
Special 
Districts
~7%
Total Tax 
Bill 100%

Property Tax Bill Example ($353k Home)
9
2020
2021
Changes
Assessed Value
$325,189 
$341,448 
$16,259 
Full Cash Value
$338,800 
$353,200 
$14,400 
Property Tax Levy Calculation
2020
2021
Rate
Levy
Rate
Levy
$ Change
Schools/Education (62%)
$2,095.24 
$2,116.39 
$21.15 
Glendale Primary (4%)
$0.40 
$130.60 
$0.38 
$131.39 
$0.79 
Glendale Secondary (13%)
$1.40 
$455.14 
$1.34 
$457.85 
$2.71 
County (14%)
$455.56 
$459.56 
$4.00 
Special Districts (7%)
$223.84 
$232.31 
$8.47 
Total
$3,360.38 
$3,397.50 
$37.12

Property Taxes
10
•
Primary – Levy increased by 2%
•
Secondary (Voter Approved) – No levy increase
•
Simple example, assumes no new construction & no increase in assessed valuation
•
Estimated 1% growth for new properties in financing models
FY21-22
FY22-23
Budget
Projected
Rate
Levy
Rate
Levy
Increase
Primary
$0.3848 
$6,088,457 
$0.3925 
$6,210,226 
$121,769 
Secondary
1.3409
21,216,248
1.3409
21,216,248
0
Total
$1.7257 
$27,304,705 
$1.7334 
$27,426,474 
$121,769

Cumulative effect of flat primary levy
11
5000
5500
6000
6500
7000
$5,364 
$5,530 
$5,530 
$5,641 
$5,753 
$5,868 
$5,986 
$6,106 
$6,228 
$111 
$111 
$111 
$111 
$111 
$111 
$111 
$113 
$113 
$113 
$113 
$113 
$113 
$115 
$115 
$115 
$115 
$115 
$117 
$117 
$117 
$117 
$120 
$120 
$120 
$122 
$122 
$125 
FY22-23
FY21-22
FY20-21
FY19-20
FY18-19
FY17-18
FY16-17
Base

Property Tax Discussion
12
• Primary Levy Limit
– Any general fund expense
– Allowable 2% increase per year
– Cumulative increase is approximately $823k
• Council Consensus
– Primary tax levy

Secondary Property Tax History
13
$19,065 
$19,269 
$19,588 
$19,807 
$20,071 
$20,409 
$20,690 
$21,217 
$0
$5,000
$10,000
$15,000
$20,000
$25,000
FY15
FY16
FY17
FY18
FY19
FY20
 FY21
FY22
Secondary Property Tax History (In Thousands)
Secondary Property Tax

Property Tax Discussion
14
• Secondary Levy Limit
– Debt service on General Obligation (G.O.) bonds only
– Currently flat levy 
• Assumes slight growth from new construction
• Council Consensus
– Secondary tax levy

15
Questions?

Five-Year Financial Forecasts
16

Five-Year Financial Forecasts
17
•
First step in the FY22-23 budget process
•
Forecasts are high level overviews
•
Government Finance Officers Association (GFOA) Best Practice
•
Developed with data collected from several sources:
–
Arizona Department of Revenue (ADOR)
–
Arizona League of Cities and Towns 
–
Arizona Joint Legislative Budget Committee (JLBC)
–
Arizona Department of Transportation (ADOT)
–
City of Glendale Historical Data (5 years)
–
Other Comparable Cities
•
Shows longer-term impacts of current year budget decisions
•
Highlights financial trends
–
General Fund
–
Special Revenue Funds (PSST, HURF, Transportation)
–
Enterprise Funds (Water Services, Solid Waste, Landfill)

General Fund Revenue Assumptions
18
• City Sales Tax
– Revised estimates for FY22 by 22% from $130M original budget to $158M
•
Very conservative forecast for FY22
•
Based on year-to-date actuals 
– Conservative growth for FY23 through FY27
•
Assumed no additional growth in construction sales tax in FY23 and lower revenues in FY24-27
•
2.8% average growth for all other categories 
• State-Shared Sales Tax
– Consistent with Department of Revenue report
• State-Shared Income Tax
– Based on state income tax collected 2 years ago
• One-time Sales Tax Revenues for Mega Events
• Updated AZSTA Repayment Schedule for Camelback Ranch

General Fund Expenditure Assumptions
19
•
Operating Expenses
– 5% increase for FY23 and FY24; 4% increase for FY25-27
• Benefits 6.8% increase for FY23
– MOU impact of $4.4M for FY23, 5% increase for FY24-27
– Ongoing funding for 2nd Medical Response Unit
– Ongoing funding of $1.5M for presumptive cancer
– Local match for 4 police FTEs - COPS grant
– MCSO academy
•
Increases in Risk Management, Worker’s Comp, and Shop Charges
•
Continued funding for Police mobile data computers
•
Fire thermal imaging cameras
•
Certificates of Participation (PSPRS Pension Obligations)
– Reduction in PSPRS contribution rates
– $5.7M in debt service for FY23 and increases to an average of $19.7M for FY24-27
– Pension reserve fund

General Fund Expenditure Assumptions
20
• Focus on Deferred Maintenance
– Building Maintenance Reserve increased from $1.5M to $2.5M 
– Additional ongoing funding for Parks maintenance increased from $500k to $1M
– Arena Capital Repair and Maintenance ($877k for FY23; $1.4M for FY24; $500k for 
FY25-27) 
• Partially offset by ARPA
– Camelback Ranch Capital Repair and Maintenance ($1.7M each year)
• Partially offset by ARPA
• Vehicle Replacement Fund Increased From $2M to $3M
– 8% annual increase 
• Funding for Scallop Streets, $4M in each year for FY23 and FY24
• Mega Events $3M for FY23 and $1M for FY24

General Fund Expenditure Assumptions
21
• Funding for Downtown Campus Reinvestment Project
– City Hall $20M
• $4.3M in FY23, $13.1M in FY24, and $2.6M in FY25
– Continuity of Operations $3.9M
• $1M in FY22 and $2.9M in FY23
– Council Chambers $4.1M
• $500k in FY22 and FY23, $2.1M in FY24, and $1M in FY25
• Council Contingency increased from $3M to $5M
– Use of contingency requires Council approval

General Fund Forecast
22
FY21-22 
Revised Budget
FY22-23 
Budget
FY23-24  
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
Beginning Fund Balance
118,619,997 
147,763,131 
165,710,564 
147,356,101 
133,654,551 
112,592,255 
Operating Revenue
536,651,737 
297,489,503 
296,316,042 
297,312,514 
299,751,901 
307,640,668 
Operating Expenditures
(482,204,342) (247,656,041) (258,937,242) (270,263,765) (283,160,469) (294,622,856)
Net Transfers
(22,304,260)
(26,886,029)
(50,733,265)
(35,750,296)
(32,653,729)
(32,571,307)
Contingency
(3,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
Total Surplus/(Deficit)
29,143,134 
17,947,433 
(18,354,465)
(13,701,548)
(21,062,296)
(24,553,495)
Ending Fund Balance
147,763,131 
165,710,564 
147,356,101 
133,654,551 
112,592,255 
88,038,761 
Assigned Fund Balance - TPT Revenue Stablization
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
Assigned Fund Balance - HURF/Pavement Mgmt.
(3,000,000)
(3,000,000)
(3,000,000)
(3,000,000)
(3,000,000)
(3,000,000)
Assigned Fund Balance - Offset Inflation Risk
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
Assigned Fund Balance - Fire Apparatus
(12,500,000)
(8,125,961)
(5,831,563)
(3,514,683)
(1,128,297)
Assigned Fund Balance - Arena Capital
(5,000,000)
Assigned Fund Balance - Mega Events
(3,000,000)
(1,000,000)
Assigned Fund Balance - General Govt CIP
(14,027,913)
(14,561,797)
(22,001,288)
(6,358,882)
(2,800,000)
(2,800,000)
Pension Reserves (Committed)
(6,666,667)
(13,333,333)
(20,000,000)
(20,000,000)
(20,000,000)
(20,000,000)
Unassigned Fund Balance
93,568,551 
115,689,473 
86,523,249 
90,780,987 
75,663,959 
52,238,760

General Fund Summary
23
• Increase in general fund reserves
– Robust city sales tax revenues
– Includes $91.8M investment in capital improvement
• Council approved projects
• Deferred maintenance
• Monitor revenues and economy closely
– Conservative forecast
– Adjust for inflation risk or recession in future years

Special Revenue Funds
24
Funds are legally restricted
Transportation & HURF Funds are capital intensive
•
Capital plans will be updated during the budget process
Revenue Assumptions
Highway User Revenue Fund (HURF)
•
Conservative growth
Transportation Sales Tax
Public Safety Sales Tax – Police
Public Safety Sales Tax – Fire
•
Same assumptions as General Fund

Highway User Revenue Fund  (HURF)
25
FY21-22 
Revised Budget
FY22-23 
Budget
FY23-24  
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
Beginning Fund Balance
13,981,231 
12,700,098 
10,910,112 
9,367,745 
7,675,303 
5,726,470 
Operating Revenue
18,781,790 
19,227,998 
19,797,034 
20,285,893 
20,786,930 
21,198,338 
Operating Expenditures
(12,149,658)
(14,090,484)
(14,249,075)
(14,788,001)
(15,372,690)
(15,981,193)
Capital Outlay
(6,913,265)
(5,427,500)
(5,590,326)
(5,690,334)
(5,863,073)
(6,040,998)
Contingency
(1,000,000)
(1,500,000)
(1,500,000)
(1,500,000)
(1,500,000)
(1,500,000)
Total Surplus/(Deficit)
(1,281,133)
(1,789,986)
(1,542,367)
(1,692,442)
(1,948,833)
(2,323,853)
Ending Fund Balance
12,700,098 
10,910,112 
9,367,745 
7,675,303 
5,726,470 
3,402,618 
Fund Balance Policy     
15% Operating Revenue
2,817,269 
2,884,200 
2,969,555 
3,042,884 
3,118,039 
3,179,751

Transportation Sales Tax
26
FY21-22 
Revised Budget
FY22-23  
Budget
FY23-24  
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
FY28-32 
Budget
Beginning Fund Balance
70,960,313 
74,337,672 
72,061,313 
70,336,396 
66,208,904 
62,367,651 
57,755,836 
Operating Revenue
41,206,086 
42,408,186 
42,500,169 
42,631,723 
43,106,935 
43,815,535 
219,780,448 
Operating Expenditures
(14,606,120)
(15,956,147)
(16,946,952)
(17,916,336)
(18,952,623)
(20,061,000) (121,607,889)
Debt Service
(6,709,183)
(6,704,040)
(6,708,897)
(6,712,754)
(6,710,230)
(6,710,956)
(34,057,520)
Capital Outlay
(15,513,424)
(19,024,358)
(17,569,237)
(19,130,125)
(18,285,334)
(18,655,395)
(95,751,890)
Contingency
(1,000,000)
(3,000,000)
(3,000,000)
(3,000,000)
(3,000,000)
(3,000,000)
(20,000,000)
Total Surplus/(Deficit)
3,377,359 
(2,276,359)
(1,724,917)
(4,127,493)
(3,841,252)
(4,611,817)
(51,636,852)
Ending Fund Balance
74,337,672 
72,061,313 
70,336,396 
66,208,904 
62,367,651 
57,755,836 
6,118,985 
Fund Balance Policy     
10% Operating Revenue
4,092,619 
4,212,829 
4,222,028 
4,235,183 
4,282,704 
4,353,564 
4,432,370

Public Safety Sales Tax – Police
27
FY21-22 
Revised Budget
FY22-23 
Budget
FY23-24  
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
Beginning Fund Balance
6,694,100 
10,791,411 
8,791,411 
6,791,411 
4,791,411 
2,791,411 
Operating Revenue
24,453,646 
25,210,017 
25,312,412 
25,433,471 
25,750,885 
26,201,328 
Operating Expenditures 
(Transfer Out)
(20,356,335)
(27,210,017)
(27,312,412)
(27,433,471)
(27,750,885)
(27,201,328)
Total Surplus/(Deficit)
4,097,311 
(2,000,000)
(2,000,000)
(2,000,000)
(2,000,000)
(1,000,000)
Ending Fund Balance
10,791,411 
8,791,411 
6,791,411 
4,791,411 
2,791,411 
1,791,411 
Fund Balance Policy 
5% Operating Revenue
1,222,682 
1,260,501 
1,265,621 
1,271,674 
1,287,544 
1,310,066

Public Safety Sales Tax – Fire
28
FY21-22 
Revised Budget
FY22-23 
Budget
FY23-24  
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
Beginning Fund Balance
3,244,786 
5,829,250 
4,829,250 
3,829,250 
2,829,250 
1,829,250 
Operating Revenue
12,256,599 
12,634,548 
12,678,233 
12,732,739 
12,887,756 
13,110,802 
Operating Expenditures 
(Transfer Out)
(9,672,135)
(13,634,548)
(13,678,233)
(13,732,739)
(13,887,756)
(14,110,802)
Total Surplus/(Deficit)
2,584,464 
(1,000,000)
(1,000,000)
(1,000,000)
(1,000,000)
(1,000,000)
Ending Fund Balance
5,829,250 
4,829,250 
3,829,250 
2,829,250 
1,829,250 
829,250 
Fund Balance Policy 
5% Operating Revenue
612,830 
631,727 
633,912 
636,637 
644,388 
655,540

Special Revenue Fund Summary
29
• Watch revenues/economy closely
• Manage Capital Outlay to stay within fund 
balance policies

Enterprise Funds
30
• Water Sewer, Solid Waste and Landfill
• Supported primarily from user fees or charges
• Funds operate much like a not-for-profit business
• Revenue Assumptions
– Assumes Council approved rate increases only
– Nominal enterprise fund revenue growth
• More capital-intensive operations
• Financial Policies
– Recommendation to use fund balance for financial targets
• Current policy is working capital
– One of the important metrics used by rating agencies
– Council consensus

Water & Sewer
31
FY21-22 
Revised Budget
FY22-23 
Budget
FY23-24  
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
Beginning Fund Balance
69,600,000 
49,033,524 
40,511,109 
37,509,064 
34,000,799 
32,785,544 
Operating Revenue
107,648,527 
111,839,663 
115,815,096 
120,106,446 
124,569,344 
129,203,031 
Revenue- CIP Reimb
15,960,250 
1,415,200 
1,508,700 
1,594,900 
1,685,500 
995,000 
Bond Proceeds
26,000,000 
26,000,000 
25,000,000 
20,000,000 
20,000,000 
Operating Expenditures
(60,666,683)
(63,983,652)
(66,908,302)
(69,380,034)
(71,951,387)
(74,626,383)
Debt Service
(24,861,748)
(27,582,450)
(29,330,434)
(31,088,361)
(32,699,812)
(31,485,205)
Capital Outlay
(81,646,823)
(51,211,175)
(45,087,105)
(40,741,215)
(38,818,900)
(44,518,000)
Contingency
(3,000,000)
(5,000,000)
(4,000,000)
(4,000,000)
(4,000,000)
(4,000,000)
Total Surplus/(Deficit)
(20,566,476)
(8,522,414)
(3,002,045)
(3,508,264)
(1,215,255)
(24,431,558)
Ending Fund Balance
49,033,524 
40,511,109 
37,509,064 
34,000,799 
32,785,544 
8,353,986 
Fund Balance Policy   
50% Operating Expenses
30,333,341 
31,991,826 
33,454,151 
34,690,017 
35,975,694 
37,313,192

Solid Waste
32
FY21-22 
Revised Budget
FY22-23 
Budget
FY23-24  
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
Beginning Fund Balance
1,375,000 
(71,675)
(66,383)
1,014,958 
1,141,008 
2,005,396 
Operating Revenue
21,695,200 
23,473,214 
24,769,986 
26,119,315 
27,253,114 
28,336,513 
Operating Expenditures
(17,928,212)
(18,707,386)
(19,578,293)
(20,321,312)
(21,094,626)
(21,899,473)
Capital Outlay
(5,013,663)
(4,560,536)
(3,910,351)
(5,471,953)
(5,094,099)
(3,628,537)
Contingency
(200,000)
(200,000)
(200,000)
(200,000)
(200,000)
(200,000)
Total Surplus/(Deficit)
(1,446,675)
5,292 
1,081,341 
126,049 
864,388 
2,608,503 
Ending Fund Balance
(71,675)
(66,383)
1,014,958 
1,141,008 
2,005,396 
4,613,899 
Fund Balance Policy     
10% Operating Revenue
2,149,095 
2,326,339 
2,455,464 
2,589,852 
2,702,694 
2,810,423

Landfill
33
FY21-22 
Revised Budget
FY22-23 
Budget
FY23-24  
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
Beginning Fund Balance
6,622,467 
8,028,722 
3,294,584 
3,744,749 
(168,740)
(1,092,554)
Operating Revenue
13,963,635 
14,673,676 
15,253,718 
15,782,238 
16,322,893 
16,880,194 
Bond Proceeds
10,900,000 
4,175,000 
Operating Expenditures
(10,382,964)
(10,641,642)
(11,123,701)
(11,532,350)
(11,957,530)
(12,399,912)
Debt Service
(732,651)
(732,651)
(1,013,277)
(1,013,277)
(1,013,277)
Capital Outlay
(12,574,417)
(7,533,520)
(6,622,200)
(6,650,100)
(3,775,900)
(10,947,000)
Contingency
(500,000)
(500,000)
(500,000)
(500,000)
(500,000)
(500,000)
Total Surplus/(Deficit)
1,406,255 
(4,734,138)
450,165 
(3,913,489)
(923,814)
(7,979,996)
Ending Fund Balance
8,028,722 
3,294,584 
3,744,749 
(168,740)
(1,092,554)
(9,072,550)
Fund Balance Policy               
15% Op Revenue
1,933,702 
2,035,811 
2,118,474 
2,193,462 
2,770,323 
2,349,105

Enterprise Fund Summary
34
• Hold the line on costs
• Watch revenues/economy closely
• Manage Capital Outlay to minimize debt service 
costs
• Plan for future debt issuance, if necessary
• Ensure responsible timing of rate adjustments
– Solid Waste
– Landfill

35
Questions?

City Sales Tax
36

City Sales Tax
37
• 0.7% increase in August 2012
– Does not apply to retail over $5k and residential rental
• Discuss sales tax rate annually during the budget process
Business Category
Tax Rate
0.1% Revenue
FY21 Actuals
0.1% Revenue 
5-Year Total (Est.) 
Retail Sales 
2.9%
2,986,864
            
16,313,621
                
Food Tax*
2.5%
693,210
               
3,786,167
                   
Restaurant & Bars
3.9%
574,440
               
3,137,471
                   
Construction
2.9%
531,816
               
1,847,316
                   
Retails Sales > 5,000
2.2%
441,685
               
2,412,390
                   
Amusement
2.9%
51,927
                 
283,615
                      
Hotel/Motel**
7.9%
97,601
                 
533,078
                      
*Food purchased with food stamp or EBT are exempt from tax
**Includes bed tax (5%)

38
Questions?

Budget Calendar
39
Item
Date
Workshop #1 – Budget Overview / Revenues / Five-Year Financial Forecasts 
January 11, 2022
Workshop #2 – FY23-32 Capital Improvement Plan
February 1, 2022
Workshop #3 – FY23-32 Capital Improvement Plan 
March 1, 2022
Workshop #4 – (All Day) FY23 Operating Budget Department Presentations
April 5, 2022
Workshop #5 – (All Day) FY23 Operating Budget Department Presentations
April 7, 2022
Workshop #6 – FY23 Final Budget Workshop
April 19, 2022
Voting Meeting – Tentative Budget Adoption
May 10, 2022
Voting Meeting – Final Budget Adoption / Property Tax Levy
June 14, 2022
Voting Meeting – Property Tax Adoption
June 28, 2022