PowerPoint Presentation (Updated 2/14/23)

Council Workshop
FY23-24 Budget Discussion
February 14, 2023

Agenda
2
1) FY23-24 Budget Overview
a) Property Tax Levy
2) Five-Year Financial Forecasts
a) General Fund
b) Special Revenue Funds
c) Enterprise Funds

Budget Calendar
3
Item
Date
Workshop #1 – Budget Overview / Revenues / Five-Year Financial Forecasts 
February 14, 2023
Workshop #2 – FY24-33 Capital Improvement Plan 
March 7, 2023
Workshop #3 – (All Day) FY24 Operating Budget Department Presentations
April 4, 2023
Workshop #4 – (All Day) FY24 Operating Budget Department Presentations
April 6, 2023
Workshop #5 – FY24 Final Budget Workshop
April 18, 2023
Voting Meeting – Tentative Budget Adoption
May 9, 2023
Voting Meeting – Final Budget Adoption / Property Tax Levy
June 13, 2023
Voting Meeting – Property Tax Adoption
June 27, 2023

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
~61%
City of 
Glendale 
(Prim.)
~4%
City of 
Glendale 
(Voter 
Approved)
~14%
County
~14%
Special 
Districts
~7%
Total Tax 
Bill 100%

Property Tax Bill Example ($378k Home)
9
2021
2022
Changes
Assessed Value
$341,448 
$358,520 
$17,072 
Full Cash Value
$353,200 
$377,500 
$24,300 
Property Tax Levy Calculation
2021
2022
Rate
Levy
Rate
Levy
$ Change
Schools/Education (61%)
$2,116.39 
$1,973.65 
($142.74)
Glendale Primary (4%)
$0.38 
$131.39 
$0.37 
$133.51 
$2.12 
Glendale Secondary (14%)
$1.34 
$457.85 
$1.30 
$465.25 
$7.40 
County (14%)
$459.56 
$447.18 
($12.38)
Special Districts (7%)
$232.31 
$217.51 
($14.80)
Total
$3,397.50 
$3,237.10 
($160.40)

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
FY22-23
FY23-24
Budget
Projected
Rate
Levy
Rate
Levy
Increase
Primary
0.3724
$6,266,777 
0.3798
$6,392,113 $125,336 
Secondary
1.2977
21,837,801
1.2977
21,837,801
0
Total
1.6701
$28,104,578 
1.6775
$28,229,914 $125,336

Cumulative effect of flat primary levy
11
5000
5500
6000
6500
7000
7500
$5,530 
$5,530 
$5,641 
$5,753 
$5,868 
$5,986 
$6,106 
$6,228 
$6,352
$111 
$111 
$111 
$111 
$111 
$111 
$111 
$111 
$113 
$113 
$113 
$113 
$113 
$113 
$113 
$115 
$115 
$115 
$115 
$115 
$115 
$117 
$117 
$117 
$117 
$117 
$120 
$120 
$120 
$120 
$122 
$122 
$122 
$125 
$125 
$127 
FY23-24
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 $950k
• Council Consensus
– Primary tax levy

Secondary Property Tax History
13
$19,269 
$19,588 
$19,807 
$20,071 
$20,409 
$20,690 
$21,216 
21,838.00 
$0
$5,000
$10,000
$15,000
$20,000
$25,000
FY16
FY17
FY18
FY19
FY20
 FY21
FY22
FY23
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 FY23-24 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 FY23 by 8% from $160M original budget to $173M
•
Very conservative forecast for FY23
•
Based on year-to-date actuals 
– Conservative growth for FY24 through FY28
•
Assumed reductions in construction sales tax beginning in FY24, reaching average trend in FY28
•
2% 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

City Sales Tax
19
City Sales Tax by Category
FY17-18
FY18-19
FY19-20
FY20-21
FY21-22
FY22-23 
(6 Months)
Amusement
4,916,662 
4,893,334 
4,363,114 
1,452,357 
5,793,186 
3,645,155 
Construction*
6,656,873 
6,807,300 
12,296,520 
16,922,150 
25,105,835 
13,573,604 
Hotel/Motel
3,825,521 
3,970,644 
3,761,665 
3,820,245 
6,380,550 
3,085,217 
License Fee
847,704 
956,862 
772,700 
916,541 
1,091,323 
545,433 
Other
4,685,870 
5,301,519 
5,483,839 
5,540,221 
5,864,244 
3,600,489 
Rentals
18,105,380 
19,690,599 
20,702,089 
21,551,335 
25,463,366 
14,078,620 
Restaurant/Bar
20,450,972 
22,051,165 
20,707,683 
22,302,348 
29,081,057 
14,716,161 
Retail Sales*
81,554,645 
78,916,500 
89,874,691 
104,355,209 
118,479,372 
61,415,091 
Retail Sales >$5,000
7,888,299 
9,016,095 
9,728,090 
11,687,464 
14,498,344 
7,405,574 
Telecom/Cable TV
3,485,608 
3,031,501 
3,019,581 
2,437,948 
2,118,910 
959,591 
Utilities
8,994,685 
9,000,071 
8,583,441 
9,111,433 
9,422,143 
6,032,490 
TOTAL
161,412,219 
163,635,591 
179,293,413 
200,097,252 
243,298,330 
129,057,424 
*One-Time Revenues

General Fund Expenditure Assumptions
20
•
Operating Expenses
– 9.2% average increase for FY24, 5% for FY25, and 4% for FY26-28
• Salaries - $10.8M increase for FY24
• Benefits and Retirement - $4.6M increase for FY24
– Local match for 3 police FTEs - COPS grant
– Addition of 3 Park Rangers for new Park Ranger Program
– Addition of 1 Sergeant, 4 Officers, and 2 Civilian Personnel for MROP Program
•
Increases in Risk Management, Worker’s Comp, and Shop Charges
•
Police Radio Replacement (4-year replacement plan)
•
Fire Heart Monitor Replacement
•
Right of Way Landscaping Program
•
Certificates of Participation (PSPRS Pension Obligations)
– PSPRS contribution rates 
– $18.8M in debt service for FY24 and increases to an average of $20.4M for FY25-28
– Pension reserve fund - $20M funded in FY24

General Fund Expenditure Assumptions
21
• Focus on Deferred Maintenance
– Building Maintenance Reserve $1.8M per year 
– Additional ongoing funding for Parks Maintenance increased from $1M to $1.5M
– Camelback Ranch Capital Repair and Maintenance (average of $1.5M per year)
– Exterior Building Repair and Maintenance $1.3M per year
• Vehicle Replacement Fund increased from $3M to $3.2M
– 8% annual increase 
• Funding for Scallop Streets, $4M in FY24
• Mega Events $3M for FY23 and $1M for FY24

General Fund Expenditure Assumptions
22
• Funding for Downtown Campus Reinvestment Project
– $85.7M Total Project Budget per Council Consensus on January 24, 2023
General Government Bonds
$14.0M
Cultural Facility Bonds
$10.5M
Park Bonds
$  4.5M
ARPA
$  7.5M
Fund Balance – General Fund
$49.2M
Total DCRP Project Budget
$85.7M
• Council Contingency $5M each year
– Use of contingency requires Council approval

General Fund Forecast
23
FY22-23 
Revised Budget
FY23-24 
Budget
FY24-25  
Budget
FY25-26 
Budget
FY26-27 
Budget
FY27-28 
Budget
Beginning Fund Balance
173,086,283 
213,417,082 
166,247,073 
153,056,927 
134,007,877 
108,070,807 
Operating Revenue
338,414,114 
336,650,065 
337,191,983 
340,025,366 
346,813,648 
352,021,692 
Operating Expenditures
(256,622,278)
(300,417,383)
(313,147,417)
(323,767,394)
(338,130,973)
(350,511,142)
Net Transfers
(36,461,037)
(78,402,691)
(32,234,711)
(30,307,022)
(29,619,744)
(30,611,145)
Contingency
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
(5,000,000)
Total Surplus/(Deficit)
40,330,799 
(47,170,009)
(13,190,145)
(19,049,050)
(25,937,070)
(34,100,595)
Ending Fund Balance
213,417,082 
166,247,073 
153,056,927 
134,007,877 
108,070,807 
73,970,212 
Assigned Fund Balance - Revenue Stability
(5,000,000)
(5,000,000)
Assigned Fund Balance - Offset Inflation Risk
(5,000,000)
(5,000,000)
Assigned Fund Balance - Fire Apparatus
(12,988,391)
(10,693,993)
(8,377,113)
(5,990,727)
(4,374,039)
(2,223,028)
Assigned Fund Balance - Mega Events
(3,000,000)
(1,000,000)
Assigned Fund Balance - CIP
(81,901,697)
(62,786,755)
(14,702,384)
(10,963,945)
(9,246,219)
(9,531,394)
Assigned Fund Balance - DCRP
(30,000,000)
Pension Reserves (Committed)
(13,333,333)
(20,000,000)
(20,000,000)
(20,000,000)
(20,000,000)
(20,000,000)
Unassigned Fund Balance
72,193,662 
61,766,326 
99,977,431 
97,053,206 
74,450,550 
42,215,791

General Fund Summary
24
• Increase in general fund reserves in FY23
– Robust city sales tax revenues
– Includes $107.3M 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
25
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)
26
FY22-23 
Revised Budget
FY23-24 
Budget
FY24-25  
Budget
FY25-26 
Budget
FY26-27 
Budget
FY27-28
Budget
Beginning Fund Balance
20,807,203 
14,497,957 
12,523,972 
10,280,827 
7,821,355 
5,094,267 
Operating Revenue
18,009,266 
18,462,709 
19,009,320 
19,478,858 
19,960,099 
20,355,181 
Operating Expenditures
(13,139,718)
(14,389,671)
(15,109,096)
(15,696,470)
(16,344,642)
(17,019,688)
Capital Outlay
(9,678,795)
(4,547,022)
(4,643,369)
(4,741,860)
(4,842,545)
(5,160,726)
Contingency
(1,500,000)
(1,500,000)
(1,500,000)
(1,500,000)
(1,500,000)
(1,500,000)
Total Surplus/(Deficit)
(6,309,247)
(1,973,984)
(2,243,146)
(2,459,472)
(2,727,088)
(3,325,233)
Ending Fund Balance
14,497,957 
12,523,972 
10,280,827 
7,821,355 
5,094,267 
1,769,034 
Fund Balance Policy     
15% Operating Revenue
2,701,390 
2,769,406 
2,851,398 
2,921,829 
2,994,015 
3,053,277

Transportation Sales Tax
27
FY22-23 
Revised Budget
FY23-24 
Budget
FY24-25  
Budget
FY25-26 
Budget
FY26-27
Budget
FY27-28 
Budget
Beginning Fund Balance
89,766,252 
78,439,498 
73,622,825 
75,097,609 
74,370,079 
75,886,328 
Operating Revenue
45,828,934 
46,083,494 
46,356,390 
46,949,757 
47,764,529 
48,635,375 
Operating Expenditures
(16,451,263)
(17,957,252)
(19,100,454)
(20,198,748)
(21,371,058)
(22,623,054)
Debt Service
(6,704,040)
(6,698,897)
(6,702,754)
(6,700,230)
(6,700,956)
(6,699,182)
Capital Outlay
(31,171,319)
(23,244,018)
(16,078,398)
(17,778,309)
(15,176,265)
(13,883,006)
Contingency
(2,829,066)
(3,000,000)
(3,000,000)
(3,000,000)
(3,000,000)
(3,000,000)
Total Surplus/(Deficit)
(11,326,754)
(4,816,673)
1,474,784 
(727,531)
1,516,249 
2,430,132 
Ending Fund Balance
78,439,498 
73,622,825 
75,097,609 
74,370,079 
75,886,328 
78,316,461 
Fund Balance Policy     
10% Operating Revenue
4,432,678 
4,458,134 
4,485,424 
4,544,760 
4,626,238 
4,713,322

Public Safety Sales Tax – Police
28
FY22-23 
Revised Budget
FY23-24 
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
FY27-28 
Budget
Beginning Fund Balance
12,860,586 
13,341,265 
9,341,265 
6,341,265 
4,341,265 
2,841,265 
Operating Revenue
27,690,696 
27,814,519 
27,962,380 
28,320,772 
28,821,958 
29,356,356 
Operating Expenditures (Transfer Out)
(27,210,017)
(31,814,519)
(30,962,380)
(30,320,772)
(30,321,958)
(30,356,356)
Total Surplus/(Deficit)
480,679 
(4,000,000)
(3,000,000)
(2,000,000)
(1,500,000)
(1,000,000)
Ending Fund Balance
13,341,265 
9,341,265 
6,341,265 
4,341,265 
2,841,265 
1,841,265 
Fund Balance Policy 
5% Operating Revenue
1,384,180 
1,390,726 
1,398,119 
1,416,039 
1,441,098 
1,467,818

Public Safety Sales Tax – Fire
29
FY22-23 
Revised Budget
FY23-24 
Budget
FY24-25  
Budget
FY25-26 
Budget
FY26-27 
Budget
FY27-28 
Budget
Beginning Fund Balance
6,825,891 
7,024,600 
5,524,600 
4,024,600 
2,774,600 
1,774,600 
Operating Revenue
13,833,256 
13,898,671 
13,972,551 
14,151,634 
14,402,070 
14,669,102 
Operating Expenditures (Transfer Out)
(13,634,548)
(15,398,671)
(15,472,551)
(15,401,634)
(15,402,070)
(15,669,102)
Total Surplus/(Deficit)
198,708 
(1,500,000)
(1,500,000)
(1,250,000)
(1,000,000)
(1,000,000)
Ending Fund Balance
7,024,600 
5,524,600 
4,024,600 
2,774,600 
1,774,600 
774,600 
Fund Balance Policy                           
5% Operating Revenue
691,663 
694,934 
698,628 
707,582 
720,103 
733,455

Special Revenue Fund Summary
30
• Watch revenues/economy closely
• Manage Capital Outlay to stay within fund 
balance policies

Enterprise Funds
31
• 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

Water & Sewer
32
FY22-23 
Revised Budget
FY23-24
Budget
FY24-25 
Budget
FY25-26
Budget
FY26-27 
Budget
FY27-28 
Budget
Beginning Fund Balance
62,862,608 
44,191,790 
36,399,071 
43,902,526 
38,426,755 
24,002,142 
Operating Revenue
116,934,701 
130,626,195 
122,805,066 
124,784,915 
126,714,311 
126,913,101 
Revenue- CIP Reimb
2,000,000 
1,547,000 
1,547,000 
1,547,000 
1,547,000 
1,547,000 
Bond Proceeds
0 
30,000,000 
30,000,000 
20,000,000 
16,000,000 
0 
Operating Expenditures
(64,335,155)
(72,841,170)
(76,483,228)
(79,569,117)
(82,779,769)
(86,120,242)
Debt Service
(26,109,625)
(26,115,250)
(28,127,121)
(30,242,554)
(29,388,155)
(27,528,578)
Capital Outlay
(45,233,996)
(69,009,494)
(40,238,262)
(39,996,015)
(44,518,000)
(31,099,000)
Contingency
(1,926,743)
(2,000,000)
(2,000,000)
(2,000,000)
(2,000,000)
(2,000,000)
Total Surplus/(Deficit)
(18,670,818)
(7,792,719)
7,503,455 
(5,475,771)
(14,424,613)
(18,287,719)
Ending Fund Balance
44,191,790 
36,399,071 
43,902,526 
38,426,755 
24,002,142 
5,714,422 
Fund Balance Policy   
50% Operating Expenses
32,167,577 
36,420,585 
38,241,614 
39,784,559 
41,389,885 
43,060,121

Solid Waste
33
FY22-23 
Revised Budget
FY23-24 
Budget
FY24-25
Budget
FY25-26
Budget
FY26-27 
Budget
FY27-28 
Budget
Beginning Fund Balance
739,453 
1,117,219 
1,511,999 
989,207 
837,047 
346,169 
Operating Revenue
25,249,090 
26,462,262 
27,689,723 
28,717,246 
29,367,254 
30,014,429 
Operating Expenditures
(20,110,788)
(21,998,512)
(23,098,437)
(24,022,375)
(24,983,271)
(25,982,602)
Capital Outlay
(4,560,536)
(3,868,971)
(4,914,077)
(4,647,031)
(4,674,861)
(4,096,958)
Contingency
(200,000)
(200,000)
(200,000)
(200,000)
(200,000)
(200,000)
Total Surplus/(Deficit)
377,766 
394,780 
(522,791)
(152,160)
(490,878)
(265,131)
Ending Fund Balance
1,117,219 
1,511,999 
989,207 
837,047 
346,169 
81,039 
Fund Balance Policy     
10% Operating Revenue
2,400,628 
2,607,226 
2,748,347 
2,851,100 
2,916,100 
2,980,818

Landfill
34
FY22-23 
Revised Budget
FY23-24 
Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
FY27-28 
Budget
Beginning Fund Balance
13,045,812 
4,852,505 
1,116,806 
69,625 
1,036,482 
2,435,702 
Operating Revenue
16,458,171 
15,918,289 
16,993,931 
17,576,509 
18,174,254 
18,784,484 
Bond Proceeds
Operating Expenditures
(10,518,618)
(11,495,151)
(12,069,908)
(12,552,704)
(13,054,812)
(13,577,006)
Debt Service
(715,750)
(717,250)
(713,000)
(713,250)
(712,750)
(716,500)
Capital Outlay
(12,917,110)
(6,941,587)
(4,758,205)
(2,843,697)
(2,507,473)
(7,065,799)
Contingency
(500,000)
(500,000)
(500,000)
(500,000)
(500,000)
(500,000)
Total Surplus/(Deficit)
(8,193,307)
(3,735,699)
(1,047,182)
966,858 
1,399,220 
(3,074,820)
Ending Fund Balance
4,852,505 
1,116,806 
69,625 
1,036,482 
2,435,702 
(639,118)
Fund Balance Policy     
15% Op Revenue
2,003,485 
2,062,901 
2,136,672 
2,212,287 
2,289,792 
2,369,234

Enterprise Fund Summary
35
• 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

36
Questions?

Budget Calendar
37
Item
Date
Workshop #1 – Budget Overview / Revenues / Five-Year Financial Forecasts 
February 14, 2023
Workshop #2 – FY24-33 Capital Improvement Plan 
March 7, 2023
Workshop #3 – (All Day) FY24 Operating Budget Department Presentations
April 4, 2023
Workshop #4 – (All Day) FY24 Operating Budget Department Presentations
April 6, 2023
Workshop #5 – FY24 Final Budget Workshop
April 18, 2023
Voting Meeting – Tentative Budget Adoption
May 9, 2023
Voting Meeting – Final Budget Adoption / Property Tax Levy
June 13, 2023
Voting Meeting – Property Tax Adoption
June 27, 2023