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FY 2021-22 Budget Workshop #2 City Council Conference Room Thursday, March 25, 2021 | 4:30 p.m. FY 2021-22 Budget theme “Moving Forward Together” Our Vision We are a world-class City that provides an exceptional quality of life Agenda • Public Safety • Personnel • Retirement System • (PSPRS Discussion) • Assessed Valuations • Property 01. Assessed Valuation and Property Tax Update 03. FY 2021-22 General Fund Operating Budget Update 02. Public Safety Personnel Retirement System (PSPRS) Pay-Down Commitment 04. Proposed 5-Year One-time General Fund Balance Forecast 05. Proposed 10-Year Capital Improvement Program (CIP) Assessed Valuation and Property Tax Update $1.00 $1.05 $1.10 $1.15 $1.20 $1.25 $1.30 0 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 3,500,000,000 4,000,000,000 Primary Secondary Limited Combined Rate 5 Property Valuation and Tax Rate History Tax rate was increased during declining values, and decreased during periods of increasing values Property Tax Rate Comparison FY 2020-21 (per $100 of Assessed Valuation) 0.9896 1.0415 1.1171 1.1201 1.4400 1.8012 2.1296 2.3959 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Gilbert* Scottsdale Mesa* Chandler Peoria Glendale Phoenix Tempe Dollars * Do not have a primary property tax rate, only secondary rate Breakdown of $1 of Typical Chandler Property Tax Bill Typical Tax Bill Cents from Every Dollar Taxed City of Chandler 9.8 cents Public Schools and Community College Districts 67.5 cents Maricopa County & Special Districts 22.7 cents Based on 2020 Tax Bill information. Exact split will vary depending on the school district and any other special taxing districts on the bill. Assessed Valuation Impacts with Rates Unchanged Assessed Valuation Impacts with Reduced Primary Rate Lowering the Primary Rate from .2501 to .2426 to eliminate tax increase from appreciation would result in a $259,834 reduction in ongoing property tax levy Impact of Increase to Median Value Homeowner $0.01 increase to Property Tax Rate brings $346K additional levy to the City Note: Last time Truth-in-Taxation process was required was FY 2009-10 Should primary tax rate remain flat or be reduced, lowering ongoing revenue and eliminating need for Truth-in-Taxation process? Public Safety Personnel Retirement System (PSPRS) Pay-Down Commitment PSPRS Actuarial Report Results 6/30/20 Normal portion of contribution 31% Unfunded portion of contribution 69% Unfunded Liability decreased $9.4M from Prior Year’s total of $180.5M Police $114.4M Fire $ 56.7M $171.1M Employer Contribution decreased $340K from Prior Year’s total of $19.4M Police $ 12.8M Fire $ 6.3M $ 19.1M PSPRS Net Unfunded Liability Balances Update Jun-19 Jun-20 Difference % Change Chandler $180M $171M -$9M -5.0% Gilbert $61M $42M -$19M -31.1% Glendale $272M $290M $18M 6.6% Mesa $654M $691M $37M 5.6% Peoria $103M $109M $6M 5.8% Phoenix $3,154M $3,381M $227M 7.1% Scottsdale $190M $216M $26M 13.6% Tempe $319M $343M $24M 7.5% PSPRS Employee/Employer Rates Comparison Fire PSPRS Employee/Employer Rates Comparison Police PSPRS One-Time Funding Forecast Chandler’s Pension Commitment: Make additional annual one-time payments to reduce PSPRS pension liability Increase projection when possible to offset investment losses & lower payroll growth • Increased forecast by $12M FY 2021-22 PSPRS Unfunded Liability Pay-Down Benefits Updated Actuarial Assumptions in new PSPRS Modeler Started with 20 year amortization, and now have 16 years remaining Continuing additional payments Unfunded Liability pay-down is accelerated and fully funded within timeline Achieve annual Employer Contribution reductions of almost $100M through 2036 FY 2021-22 General Fund Operating Budget Update FY 2021-22 Ongoing Decision Package Recommendations (All Funds) All Funds $7.3M in requests $5.5M recommended *$5.1M net of revenue offsets General Fund (GF) $6.1M in requests $3.8M recommended *$3.4M net of revenue offsets 9 FTE GF additions *4 Fire (3 ambulance & 1 rover Fire Fighters) *2 Police (SRO Police Officer & Mental Health Coordinator) *1 City Magistrate (Mental Health Court) *1 Neighborhood Resources (Homeless Navigator) *1 Devl Services (Fiber) FY 2021-22 One-Time Decision Package Recommendations (All Funds) All Funds $9.5M in requests $7.5M recommended *$7M net of revenue offsets General Fund $8.1M in requests $6.2M recommended *$5.7M net of revenue offsets Significant Enhancements • Court Technology Projects • City-wide Technology Projects • Enhanced Street Maintenance • Police Investigative and Technology Equipment Proposed 5 -Year One -Time General Fund Balance Forecast 5-Year One-Time General Fund Balance Forecast Page 1 5-Year One-Time General Fund Balance Forecast Page 2 5-Year One-Time General Fund Balance Forecast Page 3 General Fund Balance Reserves/Contingencies $39.2M 15% General Fund Contingency ($38.9M) and Council Contingency ($325K) Unassigned $97.2M Budget Stabilization Reserve ($10M) Capital and Econ Devl Reserves Personnel Reserves Public Safety Reserves Fuel/Utility Reserves Domestic Violence and Photo Red Light designations Assigned Minimum Reserve Target Represents 4 months of budgeted operating revenues $86,433,000 (63%) $1.3M Court Enhancement Funds (CEF) Restricted Total FY 2021-22 Estimated Year End General Fund Balance $137,684,594 Proposed 5-Year One-Time General Fund Balance Forecast Proposed 5-Year Enterprise Fund Balance Projections Cost of Service Study in process to ensure each customer class is paying based on usage characteristics Proposed 10-Year Capital Improvement Program (CIP) Capital Improvement Program (CIP) Guidelines • Maintain existing infrastructure • Finish planned construction of streets and parks • Limit new projects that add ongoing operations and maintenance • Address public needs CIP guidelines support Financially sustainable goal 10-Year CIP Overview • 2022-2031 CIP total is $1,297,063,520 ($132.8M more than the 2021-2030 CIP) • Bond sales are planned in FY 2021-22 to fund projects • 75% of increase is maintenance of existing infrastructure • Additional bond authorization needed to complete the 10-year plan Summary of Proposed Key Capital Projects in the 1st 5 Years Community/Regional Park Improvements • Regional Park Development • Winn Park site • Library Facility Improvements • Existing Community and Neighborhood Park Imp’ • Lantana Ranch Park Site Technology • Microsoft Office 365 Platform • Police Virtual Private Network • Wi-Fi Access Points Development Services • Citywide Fiber Upgrades Buildings & Facilities • Significant additions to maintenance Police • Forensic Facility Remaining Arterial Street Projects • Cooper Road/Insight Loop Extension • Lindsay Rd (Ocotillo Rd to Hunt Hwy) • Chandler Heights Rd (McQueen Rd to Val Vista Dr) Other Street Projects • Boston St • Alma School Rd • LED Upgrade Streetlight Conversion • Frye Rd Protected Bike Lanes • Highline Canal Shared Use Path • Kyrene Canal Branch Shared Use Path Airport • Santan Apron Construction • Tower Transceiver Radios • Airfield Lighting Improvements Proposed 10-Year CIP Debt Service Year-End Fund Balance Projection Refer to Proposed 10-year Capital Improvement Program (CIP) List Key Budget Dates Questions?