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FY 2024-25
Budget Kickoff
with Mayor and Council
Council Conference Room
Thursday, October 19, 2023 | 4:00 p.m.
I.
FY 2023-24 Budget Actions
II.
Budget Process
III. Strategic Framework Focus Areas
IV. FY 2024-25 Budgetary Impacts
V.
Capital Guidelines
VI. Financial Policies and Budget Practices
VII. Key Dates
Agenda
- Council Discussion Point
FY 2023-24 Budget Actions
•
Sales tax rates unchanged - one of the lowest in AZ
•
Reduced property tax rate from $1.1026 to $1.0926 per $100 of assessed value – 8th year of
reduction
•
Water/Wastewater/Reclaimed & Solid Waste Rate changes proposed to go into effect Jan. 1, 2024
•
Added increases to capital budgets to compensate for inflation affected projects, maintain aging
infrastructure, as well as finishing planned parks and arterial streets
•
Continued to address pension debt through additional one-time funding to pay off the Public
Safety Personnel Retirement System (PSPRS) unfunded liability (+73M / $198.3M to date)
•
Adds funding for labor association commitments and general employee pay increases
•
Added positions in critical areas such as Public Safety, Clerk, IT, ED, HR, Parks, Neighborhoods,
and Public Works
•
Increased Budget Stabilization Reserve to $20M and updated Financial policy so that only
ongoing revenues are used to calculate minimum reserve balance
Where We Are in the Budget Process
Kickoff allows for
Council direction on
Strategic Focus
Areas, policies &
guidelines before
budget process
begins & Resident
Budget Survey
initiated
Decision Package
and CIP
recommendations
submitted by
departments in
December
Financial forecast,
funding decisions
brought to Council
during workshops 1
(February) and 2
(March)
Proposed budget
brought to Council
for discussion at all-
day briefing (April)
FY 2024-25
Budget Theme
Chandler:
Making it Happen
Strategic
Framework
Guides
Our Decision
Making
Focus Areas
•Economic Vitality
•Sustainability and Technology
•Connectivity
•Neighborhoods
•Quality of Life
•Community Safety
•All CIP and Decision Package adds are now able
to be tied to the Focus Area they relate to
FY 2024-25 Budgetary Impacts
Personnel/Staffing
•
PSPRS unfunded liability should in
essence be paid off, which allows for freed
up ongoing funding (full effects not seen
until FY 2025-26)
•
Making progress on the number of
vacancies
•
Added 53 FTE (45% public safety) over
last 2 years to reduce pressure in high
need areas
Local Economic Impacts
•
Local revenues continue to come in strong
•
Industrial construction impacts are still being seen
in our monthly revenues
•
New retail that brought a destination-based
shopping experience to Chandler now open
•
State shared income tax continues at 18% to offset
flat tax implications, and will level out
•
Inflation continues to drive revenues higher
•
Long tradition of strong financial management
The
Brightside
FY 2024-25 Budgetary Impacts
Personnel/Staffing
•
Retirement and vacancy impacts are still an issue
•
Attracting talent to fill vacancies
•
ERP system will require significant citywide staff
effort
•
Developing new labor association contracts
•
Reliant on temp labor for critical services
Economy & Inflation
•
Persistent effects still being felt in
utilities, chemicals, construction
materials and labor, vehicles, and
equipment; potential recession
•
Bond passed two years ago will not go
as far
Technology
•
Multi-year citywide Enterprise
Resource Planning (ERP) system
replacement
•
Cybersecurity posture / Infrastructure
•
Governance / speed to delivery
•
Mobility and flexibility / more to do
Legislative Impacts
•
Legislative Impacts to local tax base and Model City
Tax Code continue to be an issue (e.g., grocery tax)
•
Residential rental tax removal bill passed (est.
impact $11M ongoing or about 6% of TPT revenue)
•
Prop 400 extension will go to voters but future
unknown
The
Challenges
FY 2024-25 Budgetary Impacts
Services & Position Needs Citywide
• Analysis is underway with each Department to
evaluate current services and staffing levels
• Framework will provide details into what would
be accomplished with additional staff
• There may be additional ongoing requests this
year as we evaluate needs city-wide
• Need to align one-time needs to one-time
positions and services and ongoing needs to
ongoing positions and services
• Decisions will be contingent on financing
The
Challenges
Chemicals and Contract Increases
Managed Services and Various Contracts, IT
Homeless Services
Crime and Intelligence Analyst, Police
Example One-time Funded Services in FY 2023-24
Contigo Special Event, DEI
Marketing & Promotional Campaigns, CAPA
Translation Services, CAPA
Court Security Officer Contract, City Magistrate
Example One-time Funded Positions in FY 2023-24
Digital Media Producer, CAPA
Management Assistant, Community Services
Downtown Operations Coordinator, Cultural Dev.
IT Service Desk Technician, IT
FY 2024-25 Budgetary Impacts
Delineating Ongoing vs. One-Time
The
Challenges
This year 77%
ongoing and 23%
one-time was
budgeted
FY 2024-25 Budgetary Impacts
Delineating Ongoing vs. One-Time
The
Challenges
Evaluation is done for each TPT
category and their ongoing
versus one-time components
Council Priorities for One-Time Dollars
1. Reinvest in aging
infrastructure, neighborhoods
& systems
3. Maintain Reserves sufficient
to meet financial policies
2. Operating & Capital
spending to move strategic
focus area action items
4. New initiatives and Capital
including sustainability
• Minimize increase in secondary property taxes
• Maintain, enhance or re-imagine existing infrastructure
• Re-imagine resident amenities scheduled for replacement
• Prioritize aging infrastructure
• Finish planned construction of streets, parks, fiber and
utility systems
• Prior to adding capital, ensure related ongoing O&M can be
supported
• Utilize master plans to guide long-term capital investment
• Deliver on commitments made to residents through 2021
bond election
• Balance inflation, workload, and timely completion of high
visibility and grant funded projects
Capital
Guidelines
Maintain similar
Budget Survey
process to generate
more community
involvement
(214 for FY 2022-23 |1,310 for FY 2023-24)
• Run from Nov. – Jan., with Council
outreach videos
• Run ad campaign to encourage
participation
• Expand the outreach on social media
• Weekly poll questions
• 5 total polls- one for each focus area
• Offer in English, Spanish, and Mandarin
• 15 questions, 1-2 in each focus area with
comment box
Resident Budget Survey
• Operating Management
• Capital Management
• Reserves (updated Apr. 27, 2023)
• Debt Management
• Long-Range Financial Planning
• Grant Management
• Investment
• Accounting, Auditing, and Financial Reporting
• Pension Funding (annual update; Apr. 27, 2023)
Financial
Policies
Will review and bring to Council any recommended updates
along with the required update for the pension policy
Council Approved
Budgeting Practices
Support Financial
Sustainability
Maintain AAA bond ratings from Moody’s, Fitch
and S&P
•
Continue adherence to all fiscal policies
Remain Structurally balanced
•
Ongoing revenues support ongoing
expenditures
•
One-time revenues support one-time
expenditures
Maintain strong reserves
•
15% General Fund contingency reserve
•
Budget Stabilization reserve
Balanced expenditure growth
•
Focus on maintaining and/or modernizing
existing services
Control Primary Property Tax
•
Provide options should the forecast allow
reduction
FY 2024-25 Budget
Process Changes
Implemented new budget software
•
Paperless process with automated approvals
•
System links budget data to book creation
software
Began Modified Zero Based Budget (MZBB)
•
Helps ensure current budgets are right-
sized based on services provided
•
Analysis will include review of services,
related expenditure category spending
trends, and line-item reviews
•
Starting with 2 departments/divisions in
first year
•
Results to be reported at All Day Budget
Briefing
Feedback
Received Last
Budget Process
Additional
Thoughts?
Council Process Feedback from FY 2023-24 Budget
•
List department accomplishments without
making them the focus of the presentation
•
List all capital projects and decision packages, but
focus presentations on the highlights
•
Additional discussion of timing of projects where
policy direction may be needed
•
Provide Council a “Review Guide” to help with
budget book review process
•
Hold All-Day Budget Briefing on non-Council
meeting week
Tentative Key Budget Dates
Budget Event
Date
Council Budget Kickoff
Tonight
Resident Budget Survey with Council Outreach Videos
Nov 2023-Jan 2024
Council Workshop 1
February 8, 2024
Council Workshop 2
March 23, 2024
All-Day Budget Brief
April 26, 2024
Council Meetings:
Amendment Discussion
May 23, 2024
Tentative Adoption
May 23, 2024
Public Hearing & Final Adoption
June 13, 2024
Adoption of Tax Levy
June 27, 2024
Questions?