PowerPoint Presentation (added 12/08/2023)

Council Workshop
FY24-25 Budget Discussion
December 12, 2023

Agenda
2
1) FY24-25 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 
December 12, 2023
Workshop #2 – FY25-34 Capital Improvement Plan
February 6, 2024
Workshop #3 – FY25-34 Capital Improvement Plan 
March 5, 2024
Workshop #4 – (All Day) FY25 Operating Budget Department Presentations
April 2, 2024
Workshop #5 – (All Day) FY25 Operating Budget Department Presentations
April 4, 2024
Workshop #6 – FY25 Final Budget Workshop
April 16, 2024
Voting Meeting – Tentative Budget Adoption
May 14, 2024
Voting Meeting – Final Budget Adoption / Property Tax Levy
June 11, 2024
Voting Meeting – Property Tax Adoption
June 25, 2024

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)
~14%
County
~13%
Special 
Districts
~7%
Total Tax 
Bill 100%

Property Tax Bill Example ($499k Home)
9
2022
2023
Changes
Assessed Value
$358,520 
$376,446 
$17,926 
Full Cash Value
$377,500 
$498,500 
$121,000 
Property Tax Levy Calculation
2022
2023
Rate
Levy
Rate
Levy
$ Change
Schools/Education (62%)
$1,973.65 
$2,057.23 
$83.58 
Glendale Primary (4%)
0.3724
$133.51 
0.3484
$131.16 
($2.35)
Glendale Secondary (14%)
1.2977
$465.25 
1.2142
$457.09 
($8.16)
County (13%)
$447.18 
$453.40 
$6.22 
Special Districts (7%)
$217.51 
$234.18 
$16.67 
Total
$3,237.10 
$3,333.06 
$95.96

Property Tax Levy with 2% Increase
10
•
Primary – Levy increased by 2%
•
Secondary (Voter Approved) – No levy increase
•
Simple example, assumes no new construction & no increase in assessed valuation
FY23-24
FY24-25
Budget
Projected
Rate
Levy
Rate
Levy
Increase
Primary
0.3484
$6,553,047 
0.3554
$6,684,108 $131,061 
Secondary
1.2142
22,837,857
1.2142
22,837,857
0
Total
1.5626
$29,390,904 
1.5696
$29,521,965 $131,061

Cumulative Effect of Flat Primary Levy
11
 $5,000
 $5,500
 $6,000
 $6,500
 $7,000
 $7,500
 $8,000
$5,530 
$5,621 
$5,684 
$5,760 
$5,857 
$5,937 
$6,088 
$6,267 
$6,352
$6,684 
$111 
$111 
$111 
$111 
$111 
$111 
$111 
$111 
$111 
$112 
$112 
$112 
$112 
$112 
$112 
$112 
$112 
$114 
$114 
$114 
$114 
$114 
$114 
$114 
$115 
$115 
$115 
$115 
$115 
$115 
$117 
$117 
$117 
$117 
$117 
$119 
$119 
$119 
$119 
$122 
$122 
$122 
$125 
$125 
$131 
FY24-25
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 $1.1M
• Council Consensus
– Primary tax levy

Secondary Property Tax History
13
19,269
19,588
19,807
20,071
20,409
20,690
21,216
21,837
22,838
$0
$5,000
$10,000
$15,000
$20,000
$25,000
FY16
FY17
FY18
FY19
FY20
 FY21
FY22
FY23
FY24
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 FY24-25 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
– Residential Rental Tax
• $13M collected in residential rental tax in FY23 across all funds
– $7M General Fund
– $3M Transportation Sales Tax
– $2M Public Safety Sales Tax – Police
– $1M Public Safety Sales Tax – Fire
• Reduction in Residential Rental Tax beginning January 1, 2025
– Conservative growth for FY25 through FY29
• Assumed reductions in construction sales tax beginning in FY25, reaching 
average trend in FY29
• 2% average growth for all other categories 
– Addition of revenue for VAI Resort beginning in FY25

General Fund Revenue Assumptions
19
• State-Shared Sales Tax
– Consistent with Department of Revenue report
• State-Shared Income Tax
– Based on state income tax collected 2 years ago
• Reduction in FY26, conservative growth for FY27-29
• One-Time Sales Tax Revenues for Mega Events
– Expenditure Offset Equal to Revenue
• Updated AZSTA Repayment Schedule for Camelback 
Ranch

City Sales Tax
20
City Sales Tax by Category
FY17-18
FY18-19
FY19-20
FY20-21
FY21-22
FY22-23
FY23-24 July 
thru Oct
Amusement
4,920,483
4,925,211
4,417,597
1,514,058
5,943,710
12,910,184
3,489,072
Construction
6,683,790
7,047,739
12,958,146
17,341,703
26,743,518
31,627,274
12,121,170
Hotel/Motel
3,827,337
4,190,143
3,766,143
3,823,133
6,387,003
8,313,564
2,054,049
License Fee
847,739
957,008
772,862
916,825
1,091,751
1,037,323
134,499
Other
4,746,683
5,374,609
5,629,885
5,891,962
6,019,737
7,220,431
916,835
Rentals
18,628,758
20,588,254
21,120,616
21,986,704
26,231,371
31,698,010
10,500,667
Restaurant/Bar
20,497,585
22,214,252
21,126,474
22,488,718
29,300,707
32,010,253
10,801,968
Retail Sales
81,857,671
85,409,952
90,574,335
104,958,513
119,778,208
128,092,193
40,037,666
Retail Sales >$5,000
7,904,468
9,039,007
9,757,565
11,776,541
14,524,311
15,908,868
5,246,329
Telecom/Cable TV
3,485,822
3,032,115
3,020,102
2,438,399
2,123,719
2,048,167
782,638
Utilities
8,994,933
9,000,104
8,583,505
9,114,217
9,421,026
10,251,277
4,736,997
TOTAL
162,395,269
171,778,394
181,727,230
202,250,773
247,565,061
281,117,544
90,821,890

General Fund Expenditure Assumptions
21
•
Operating Expenses
– 8% average increase for FY25, 5% for FY26, and 4% for FY27-29
• Salaries (including Temp Pay and Overtime) - $9.5M increase for FY25
• Benefits and Retirement - $4.3M increase for FY25
•
Increases in Risk Management, Worker’s Comp, and Shop Charges
•
Placeholder for addition of COPS Grant Police Officers (13)
•
Increases to Public Safety per preliminary Memorandums of Understanding
•
Replacement of Fire Apparatus
•
Replacement of Police Radios
•
Right of Way Landscape Program
•
Certificates of Participation (PSPRS Pension Obligations)
– PSPRS contribution rates 
– $19.5M in debt service for FY25 and increases to an average of $20.9M for FY26-29
– Pension reserve fund - $20M funded in FY25

General Fund Expenditure Assumptions
22
• Focus on Deferred Maintenance
– Building Maintenance Reserve $1.8M per year 
– Addition of $1M ongoing for Parks Maintenance
• Vehicle Replacement Fund increased from $3.2M to $3.5M
– 8% annual increase 
• VAI Parking Garage Project
– $16M in FY24, $54.7M in FY25
• City’s investment after revenue offset is $12.7M
• Council Contingency $5M in FY25
– Removed contingency in future fiscal years. Amount can be evaluated annually
– Use of contingency requires Council approval

General Fund Forecast
23
FY23-24     
Revised Budget
FY24-25 
Budget
FY25-26  
Budget
FY26-27 
Budget
FY27-28 
Budget
FY28-29 
Budget
Beginning Fund Balance
232,447,014 
234,656,979 
183,701,763 
218,469,380 
184,390,548 
153,859,904 
Operating Revenue
359,504,440 
363,988,068 
400,048,672 
348,491,888 
353,748,145 
359,824,359 
Ongoing Operating Expenditures
(275,356,324) (302,736,783) (316,484,171) (329,687,025) (346,078,851) (360,575,887)
One-Time Operating Expenditures
(7,098,923)
(2,500,000)
(2,500,000)
(2,500,000)
(2,500,000)
(2,500,000)
Net Transfers
(69,839,227) (104,706,501)
(46,296,883)
(50,383,695)
(35,699,937)
(37,527,874)
Contingency
(5,000,000)
(5,000,000)
Total Surplus/(Deficit)
2,209,965 
(50,955,217)
34,767,617 
(34,078,832)
(30,530,643)
(40,779,402)
Ending Fund Balance
234,656,979 
183,701,763 
218,469,380 
184,390,548 
153,859,904 
113,080,502 
Assigned FB - TPT Revenue Stabilization
(5,000,000)
Assigned FB - Offset Inflation Risk
(5,000,000)
Assigned FB - Mega Events
(3,000,000)
(3,000,000)
Assigned FB - General Govt CIP
(88,870,614)
(28,569,124)
(27,171,963)
(10,773,467)
(11,401,177)
(11,101,177)
Pension Reserves (Committed)
(20,000,000)
(20,000,000)
(20,000,000)
(20,000,000)
(20,000,000)
(20,000,000)
Unassigned Fund Balance
112,786,365 
132,132,639 
171,297,417 
153,617,081 
122,458,727 
81,979,325 
Fund Balance Policy 
25% Ongoing Operating Expenses
68,839,081 
75,684,196 
79,121,043 
82,421,756 
86,519,713 
90,143,972

General Fund Summary
24
• Changes in City Sales Tax
• Reduction in Residential Rental Tax
• Slow down of Construction Sales Tax
• Increase in City Sales Tax from VAI/Mattel
• Includes $116M investment in capital improvement in FY25
– 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
FY23-24 
Revised Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
FY27-28 
Budget
FY28-29 
Budget
Beginning Fund Balance
19,286,881 
13,698,984 
11,731,883 
10,660,414 
9,086,092 
6,976,945 
Operating Revenue
19,701,862 
20,091,852 
20,489,618 
20,895,316 
21,309,103 
21,731,140 
Operating Expenditures
(14,668,040)
(15,630,900)
(16,412,447)
(17,091,022)
(17,797,846)
(18,534,099)
Capital Outlay
(9,121,719)
(4,928,053)
(5,148,641)
(5,378,616)
(5,620,404)
(6,426,979)
Contingency
(1,500,000)
(1,500,000)
Total Surplus/(Deficit)
(5,587,897)
(1,967,101)
(1,071,469)
(1,574,322)
(2,109,147)
(3,229,938)
Ending Fund Balance
13,698,984 
11,731,883 
10,660,414 
9,086,092 
6,976,945 
3,747,007 
Fund Balance Policy     
15% Operating Revenue
2,955,279 
3,013,778 
3,073,443 
3,134,297 
3,196,365 
3,259,671

Transportation Sales Tax
27
FY23-24 
Revised Budget
FY24-25 
Budget
FY25-26  
Budget
FY26-27 
Budget
FY27-28 
Budget
FY28-29 
Budget
Beginning Fund Balance
101,080,411 
85,658,425 
84,591,930 
79,701,385 
74,998,965 
70,830,604 
Operating Revenue
44,581,340 
44,400,120 
43,507,220 
44,136,841 
44,948,249 
45,809,062 
Other Revenue
1,502,153 
1,502,153 
1,502,153 
1,502,153 
1,502,153 
1,502,153 
Operating Expenditures
(18,679,588)
(20,148,827)
(21,439,392)
(22,675,762)
(23,995,677)
(25,405,548)
Debt Service
(6,704,040)
(6,702,754)
(6,700,230)
(6,700,956)
(6,699,182)
(6,699,408)
Capital Outlay
(36,121,852)
(19,817,186)
(21,760,296)
(20,964,697)
(19,923,904)
(22,320,466)
Contingency
(300,000)
Total Surplus/(Deficit)
(15,421,986)
(1,066,494)
(4,890,545)
(4,702,421)
(4,168,361)
(7,114,207)
Ending Fund Balance
85,658,425 
84,591,930 
79,701,385 
74,998,965 
70,830,604 
63,716,397 
Fund Balance Policy 
10% Operating Revenue
4,458,134 
4,440,012 
4,350,722 
4,413,684 
4,494,825 
4,580,906

Public Safety Sales Tax – Police
28
FY23-24 
Revised Budget
FY24-25 
Budget
FY25-26  
Budget
FY26-27 
Budget
FY27-28 
Budget
FY28-29 
Budget
Beginning Fund Balance
15,331,936 
11,331,935 
8,331,935 
5,331,935 
3,331,935 
2,331,935 
Operating Revenue
27,814,519 
27,774,047 
27,327,581 
27,601,963 
28,035,068 
28,502,285 
Operating Expenditures (Transfer Out)
(31,814,519)
(30,774,047)
(30,327,581)
(29,601,963)
(29,035,068)
(29,252,285)
Total Surplus/(Deficit)
(4,000,000)
(3,000,000)
(3,000,000)
(2,000,000)
(1,000,000)
(750,000)
Ending Fund Balance
11,331,935 
8,331,935 
5,331,935 
3,331,935 
2,331,935 
1,581,935 
Fund Balance Policy 
5% Operating Revenue
1,390,726 
1,388,702 
1,366,379 
1,380,098 
1,401,753 
1,425,114

Public Safety Sales Tax – Fire
29
FY23-24 
Revised Budget
FY24-25 
Budget
FY25-26  
Budget
FY26-27 
Budget
FY27-28 
Budget
FY28-29 
Budget
Beginning Fund Balance
8,026,397 
6,526,397 
4,526,397 
2,526,397 
1,526,397 
776,397 
Operating Revenue
13,898,671 
13,878,741 
13,655,944 
13,793,062 
14,009,494 
14,242,971 
Operating Expenditures (Transfer Out)
(15,398,671)
(15,878,741)
(15,655,944)
(14,793,062)
(14,759,494)
(14,242,971)
Total Surplus/(Deficit)
(1,500,000)
(2,000,000)
(2,000,000)
(1,000,000)
(750,000)
Ending Fund Balance
6,526,397 
4,526,397 
2,526,397 
1,526,397 
776,397 
776,397 
Fund Balance Policy 
5% Operating Revenue
694,934 
693,937 
682,797 
689,653 
700,475 
712,149

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

Solid Waste
32
FY23-24 
Revised Budget
FY24-25 
Budget
FY25-26  
Budget
FY26-27 
Budget
FY27-28 
Budget
FY28-29 
Budget
Beginning Fund Balance
4,147,549 
3,745,247 
3,736,930 
3,008,337 
2,097,442 
1,087,501 
Operating Revenue
26,072,263 
26,939,305 
28,305,523 
28,955,056 
29,598,915 
30,276,511 
Other Revenue
390,000 
206,250 
206,250 
206,250 
206,250 
Operating Expenditures
(22,404,334)
(23,852,106)
(25,044,711)
(26,046,498)
(27,088,359)
(28,171,892)
Capital Outlay
(4,260,231)
(3,101,766)
(4,195,655)
(4,025,703)
(3,726,747)
(5,148,779)
Contingency
(200,000)
(200,000)
Total Surplus/(Deficit)
(402,302)
(8,317)
(728,593)
(910,895)
(1,009,941)
(3,044,160)
Ending Fund Balance
3,745,247 
3,736,930 
3,008,337 
2,097,442 
1,087,501 
(1,956,659)
Fund Balance Policy     
10% Operating Revenue
2,607,226 
2,693,931 
2,830,552 
2,895,506 
2,959,892 
3,027,651

Landfill
33
FY23-24 
Revised Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27 
Budget
FY27-28 
Budget
FY28-29 
Budget
Beginning Fund Balance
10,397,893 
3,356,426 
3,064,076 
4,143,841 
5,637,047 
2,633,101 
Operating Revenue
16,787,730 
17,203,356 
16,767,149 
17,344,489 
17,931,739 
18,535,668 
Other Revenue
1,130,559 
1,159,160 
1,187,406 
1,219,496 
1,251,192 
1,286,693 
Operating Expenditures
(11,920,489)
(12,683,660)
(13,317,843)
(13,850,556)
(14,404,578)
(14,980,761)
Debt Service
(717,250)
(713,000)
(713,250)
(712,750)
(716,500)
(714,250)
Capital Outlay
(11,822,018)
(4,758,205)
(2,843,697)
(2,507,473)
(7,065,799)
(2,262,192)
Contingency
(500,000)
(500,000)
Total Surplus/(Deficit)
(7,041,468)
(292,350)
1,079,765 
1,493,206 
(3,003,946)
1,865,158 
Ending Fund Balance
3,356,426 
3,064,076 
4,143,841 
5,637,047 
2,633,101 
4,498,259 
Fund Balance Policy 
15% Op Revenue
2,518,160 
2,580,503 
2,515,072 
2,601,673 
2,689,761 
2,780,350

Water & Sewer
34
FY23-24 
Revised Budget
FY24-25 
Budget
FY25-26 
Budget
FY26-27
Budget
FY27-28
Budget
FY28-29 
Budget
Beginning Fund Balance
45,931,144 
46,782,666 
37,209,225 
39,455,097 
13,210,810 
(10,027,704)
Operating Revenue
129,214,978 
124,809,066 
129,609,112 
133,417,444 
134,930,506 
136,541,433 
Other Revenue
2,958,217 
2,768,907 
2,874,607 
2,987,706 
3,108,722 
3,238,210 
Bond Proceeds
30,000,000 
36,000,000 
55,000,000 
30,000,000 
25,000,000 
25,000,000 
Operating Expenditures
(77,723,998)
(83,425,333)
(87,596,599)
(91,133,729)
(94,814,008)
(98,643,244)
Debt Service
(26,140,250)
(28,226,082)
(30,641,248)
(34,515,707)
(34,463,735)
(33,331,767)
Capital Outlay
(55,457,424)
(59,500,000)
(67,000,000)
(67,000,000)
(57,000,000)
(55,000,000)
Contingency
(2,000,000)
(2,000,000)
Total Surplus/(Deficit)
851,522 
(9,573,442)
2,245,872 
(26,244,286)
(23,238,515)
(22,195,368)
Ending Fund Balance
46,782,666 
37,209,225 
39,455,097 
13,210,810 
(10,027,704)
(32,223,072)
Fund Balance Policy   
50% Operating Expenses
38,861,999 
41,712,666 
43,798,300 
45,566,864 
47,407,004 
49,321,622

Enterprise Fund Summary
35
• Watch revenues/economy closely
• Manage capital outlay to minimize debt service costs
• Ensure responsible timing of rate adjustments
• Plan for future debt issuance, if necessary

36
Questions?

Budget Calendar
37
Item
Date
Workshop #1 – Budget Overview / Revenues / Five-Year Financial Forecasts 
December 12, 2023
Workshop #2 – FY25-34 Capital Improvement Plan
February 6, 2024
Workshop #3 – FY25-34 Capital Improvement Plan 
March 5, 2024
Workshop #4 – (All Day) FY25 Operating Budget Department Presentations
April 2, 2024
Workshop #5 – (All Day) FY25 Operating Budget Department Presentations
April 4, 2024
Workshop #6 – FY25 Final Budget Workshop
April 16, 2024
Voting Meeting – Tentative Budget Adoption
May 14, 2024
Voting Meeting – Final Budget Adoption / Property Tax Levy
June 11, 2024
Voting Meeting – Property Tax Adoption
June 25, 2024