August 2 workshop ppt - Sugar Land, Texas

General Fund, Compensation & Benefits

1) Engaging the Public

2) Follow-ups from prior meetings

3) Update on Certified Tax Roll

4) General Fund Overview

5) Base Budget

6) Infrastructure Rehabilitation

7) Community Events & Parks Fees (Non-Resident)

8) Summary – FY19 Recurring & One-Time Additions

9) Compensation & Benefits

10) Next Steps

Ensuring Sugar Land still feels like “home sweet home” is a

shared responsibility of the City and residents

◦ Actively implementing innovative public engagement

methods to encourage “two-way” as part of budget process

Multiple avenues for public to engage and gather information

Public Budget Workshops

Posts & videos

◦ City website

◦ Facebook page

Follow-up Items from Prior Meetings

Staff is currently evaluating requests from Council

◦ Staff continues to track questions

Council website contains

Running list of questions

Staff’s response to questions

Parking Lot Items

◦ Will provide Council an update on outstanding items at the

August 7th or August 9th meeting

Flat tax rate equivalent to Effective Tax Rate + 2.63%

◦ Residential revaluation of 3.6%

◦ Commercial revaluation of 0.8%

Staff recommendation to maintain flat tax rate

◦ Generates ~$300K less revenue in General Fund

Ready to discuss this morning – see strikethroughs

◦ Generates ~$225K less revenue in Debt Service (i.e. CIP)

Will complete evaluation and prepare information for

discussion on August 7

General Fund Overview – As Filed

Primary operating fund of the City

◦ Accounts for everything not required to be accounted for in

another fund type (Special Revenue, Internal Service, Debt

Service, Capital Projects, etc.)

Includes traditional governmental services

Police

Fire

Public Works

Parks, etc.

Emphasizes Strengthened Resilience & Innovative Constraint

Revenues & Expenditures are divided into two categories

◦ Operating & Non-Operating

Operating Revenues

Traditional Revenue Sources

Taxes

Charges for Services, etc.

Operating Expenditures

Expenditures tied to a department

Salaries

Contractual services, etc.

Non-Operating/Non-Departmental

◦ Non-Operating Revenues

Transfers In

Enterprise Funds overhead reimbursement

◦ Non-Departmental

Transfers out

Expenses not tied directly to a department

Insurance & deductibles

Rebates & assignments, etc.

General Fund is one of the simplest ever presented

◦ Focus is on the basics

Maintaining service levels

Base adjustments (Primarily contractual increases)

Continued reinvestment in infrastructure

Compensation to support a champion workforce

◦ No new positions

◦ No new programs

Much of the information in this presentation may seem

familiar as it has been presented in some form previously to

Council

◦ June 19th Workshops

Base Budget & Budget Cuts

Special Events Project & Policy Framework

◦ July 17th Budget Filing

Base adjustments, replacement of cuts, one-time

additions, compensation

◦ Multiple FYIs on Budget-Related Topics

Council’s opportunity to ask additional follow-up questions

General Fund36%

Debt Service13%

Enterprise Utility17%

Airport6% Solid Waste

3%

Corporations6%

Other Funds8%

Capital Projects11%

Description In Millions ($)

Revenues $ 90.35

Expenditures 92.37

Net Change 2.02

Ending Fund Balance 22.22

FB Policy Requirement 20.18

Over Policy $ 2.04

Property Tax

32%

Sales Tax

41%

Franchise Taxes

7%

Permits

4%

User Fees

4%

MC Fines

2%Other

2%

Transfers In

8%

General

Government

14%

Finance

5%

Public Works

13%

Parks

5%

Planning, Permits,

Engineering

6%ENS

6%

Police & Dispatch

26%

Fire/EMS

18%

Non-Operating *

7%

*Includes transfers to other funds

Personnel

75.5%

Supplies

5.5%

Prof. Services

8.7%

Repairs & Maint

7.6%

Purchased Services

2.5%

Capital / Other

0.2%

Millions ($) FY19 FY20 FY21 FY22 FY23

Revenues $90.34 $92.91 $95.37 $97.90 $100.29

Expenditures 92.36 93.36 95.35 97.56 99.66

Net Income -2.02 -0.45 0.01 0.34 0.63

Ending FB % 28% 26% 26% 26% 26%

Over Policy $2.04 $0.92 $0.53 $0.45 $0.67

General Fund Base Budget

Base Budget is the budget that supports the same level of

service as the prior year

Base adjustments are adjustments to the base that are

required to deliver the same level of service

◦ Primarily contractual increases

Large increase this year:

Software & technology maintenance costs

Landscaping

Janitorial

Employee Compensation

◦ Expenditures in the General Fund are largely driven by

personnel expenses, at 75.5% of expenditures

Merit Pool included at 3% of budgeted salaries

◦ City does not give cost of living adjustments

◦ Designed to reward employees for performance

Human Resources to cover compensation and benefits later

in the presentation

Base Budget Adjustments review with Council

◦ July 17th Budget Filing

◦ July 27th Detailed FYI provided

Listed all departmental base adjusted and descriptions

Budget Amount

Beginning Base Budget $88,284,019

Base Adjustments 1,144,148

3% Merit Pool 1,162,857

FY19 Base Budget $90,591,024

% Increase 2.6%

General Fund Rehabilitation Funding

Infrastructure Rehabilitation Funding◦ Funded with more reliable revenue streams◦ Rehab funding transitioned to the General Fund

Rehabilitation builds over 5 years◦ Rehabilitation (Rehab) vs. Reconstruction (Recon)

Rehab (cash): Maintains services levels

Recon (debt): Extend useful life

Maintained debt qualified reconstruction work increases in CIP to reduce impact during transition

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

2019 2020 2021 2022 2023

Millions

Infrastructure Rehabilitation

Traffic

Sidewalk & Trail

Pavement

Drainage

ROW

Street Lights

Parks

Facilities

0.0

1.0

2.0

3.0

4.0

5.0

6.0

FY17Planned

FY17Revised

FY18 FY19 FY20 FY21 FY22

Millions

Original Transition Plan with 1x Sales Tax in FY19

GF Rehab Major CIP Rehab 1x ST

Recurring funding is included in Base Budget

Infrastructure rehabilitation

◦ Plan is to grow rehabilitation funding in operating budgets

Reinvestment & maintenance of existing assets

Planned increase of ~$300,000 per year

¼ cent tax rate shift from debt service to operations

Additional one-time funding per FMPS direction

$600,000 from one-time sales tax received in FY18

Current funding allows investment in highest priorities

◦ Asset management key in defining future funding priorities

Facilities projects

◦ Often identified throughout the year

FY19 Examples:

Automation & temperature control systems

Replacement of exterior ground lights at City Hall

Replacement of insulation to HVAC chill water supply

One-time funding included for facilities assessment

Parks Projects

◦ Often identified throughout the year

◦ FY19 Examples:

City Park Sports Field Light Replacement (1 Field)

Street Light Replacement

◦ Replaces cobra-head lights with decorative lighting

Centerpoint changing out to LED

Saves General Fund dollars in the future

Improves lighting on roadways for traffic safety

Current lighting is blocked by the large trees

FY19 Examples:

Lexington from Oyster Creek to Dulles

ROW Plant And Irrigation Projects

◦ Replacement of damaged plant or irrigation materials

FY19 Examples:

Replacement of the rose bushes and older plant

material on HWY90A from SH6 to University

Localized Drainage Improvement Projects

◦ Replacement and repair of drainage system

FY19 Examples:

Lining of multiple outfalls within LID 2 ditches

LID 2 construction projects identified numerous

outfalls the City needing to be lined

Pavement Rehabilitation

◦ Removal and replacement small sections of pavement

FY19 Examples:

Replacement based on pavement assessment &

requests from residents

Sidewalk and Trail Rehabilitation

◦ Replacement and grinding of sidewalks

FY19 Examples:

Continue repairs based on annual assessment of the

850 miles of sidewalks

Repairs are prioritized

1) High pedestrian traffic (schools & trails)

2) Resident requests

Traffic Evaluation and Safety Improvements

◦ Improvements typically at intersections identified through

traffic analysis, reported concerns, or studies

FY19 Examples:

Continue with repairs and upgrades to the system

One-time funding for the ITS Master Plan Update

Type Recurring One Time

Facilities $ 288,423 $ 300,000

Parks 102,500

Street Lights 50,000

ROW Planting 75,000

Drainage 153,750

Pavement 678,038 100,000

Sidewalks & Trails 284,855 100,000

Traffic 134,500 100,000

Total Funding $ 1,767,066 $ 600,000

Parks Fees & Events

Fees set by Ordinance

Standard CPI adjustment for majority of fees

Increase non-resident membership fees from $58 to $155

◦ Recognizes direct costs associated with operating the

facilities

◦ Recommend $155 for each center for consistency and

sensitivity for seniors who may be on a fixed income

◦ Will be reviewed with Finance Audit Committee

Fees set by Ordinance

Add a new fee for non-resident league participants

◦ Fee per season per player

◦ Recognizes direct costs associated with operating the

park/sport facilities

◦ Recommend phased approach to fees

Developing recommendation - Mid-year adjustment

◦ Reviews with PARCS Board and Finance Audit Committee

◦ Discussions with Leagues

Fees set by Department

Non-Resident participants will pay direct costs for recreation

and senior center events (Senior Gala, Sugar Gala, Trips)

Non-Resident participants will pay direct costs for attendance

to community special events primarily funded through

general fund with the exception of Memorial Day

General Fund Summary – FY19 Recurring &

One-Time Additions

Recommended for Funding Amount

Fort Bend Transit (TREK) $70,000

City calendar 50,000

State of the City event 25,000

Street sweeping 85,000

Mulch/fertilizer in beds 69,000

Recurring funding for FY19

$ 70,000

$ 299,000

Description Amount

Special Events (from FY18 reductions) 50,000

Asset Management Training 5,000

Redistricting & Election 22,800

Hazard Mitigation Plan 100,000

Organizational Assessment- PS Dispatch 60,000

Fire Physical Ability Test Validation 90,000

Total Departmental Funding- One Time $ 327,800

Compensation & Benefits

As adopted by Council, May 2013

Recognize the value of our employees

Pay on a competitive basis

Fair and equitable compensation systems

Recognize performance with merit pay

Provide competitive benefits programs

Evaluate total compensation by applying “benefits burden” test

Salary Structures

Pay For Performance (Merit Pool)

Texas Municipal Retirement System

Group Health Benefits

Benefits Burden

Police & Fire

The City’s compensation philosophy states starting salaries for

Police / Fire should be 75th percentile of the benchmark cities

◦ 3.85% increase to the starting salary for Police; and

◦ 0.32% increase to the starting salary for Fire

Salary structures will move accordingly; no “across-the-board”

adjustments to salaries

Only salaries falling below the minimum of new range adjusted

Effective October 1 January 1

Non-Exempt, Exempt & Management/Elected Officials

The general salary structures are moved annually based on CPI

CPI for February was 2.6%

Salary structures will move accordingly

There are no “across-the-board” adjustments to salaries

Only salaries falling below the minimum of the new salary range

will be adjusted to the minimum

Effective October 1 January 1

-1%

0%

1%

2%

3%

4%

5%

6%

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

Recurring Merit One Time Merit Feb CPI- Houston June CPI- Houston

Contribution Rate for 2019: 14.93% ( from 15.27%)

Funded Ratio: 87.3% ( from 86.0%)

Opted out of Social Security System for all pension-eligible

employees in 1980

Other than TMRS, the only retirement savings option available

by pre-tax deduction is participation in the 457 Deferred

Compensation program (no matching contribution from the City)

City Provided

Medical*

◦ KelseyCare HMO

◦ High-Deductible Health Plan

w/HSA

Dental*

◦ DHMO

◦ DPPO

Flexible Spending Account (FSA)

Administration

Employee Assistance Program

(EAP)

CariLoop (Caregiver Assistance)

Basic Life & Accidental

Death/Dismemberment (AD&D)

Long-Term Disability (LTD)

Optional Benefits**

• Vision

• Cancer Indemnity

• Accident Indemnity

• Short-Term Disability

• Supplemental and

Dependent Life & AD&D

• Legal Shield

• Flexible Spending Account

Medical:

City will remain self-funded for medical claims

Year 3 of a 5 year contract with Cigna - TPA services for medical plan

Anticipating increases in Medical, Pharmacy & Stop Loss

Dental & Voluntary Vision:

2018 was Year 2 of 2-Year Rate Guarantee with Cigna Healthcare

Cigna has confirmed that we will have no rate changes for 2019 dental plans

Vision plan costs will increase 12.6% (or $0.73 to $2.31 per month, depending on tier)

Life & Disability:

RFP in process – received 6 responses and they are under

review

Stop Loss:

Contract will come to Council in November for Plan Year 2019;

however, with our experience thus far, we are anticipating

change in this area

$7.5$8.2

$9.9 $9.9 $10.0$10.8

$13.2

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

2012 2013 2014 2015 2016 2017 2018 ANN

Th

ou

sa

nd

s

Note: 2018 ANN = 1/1/18 to 5/31/18

National Average = Segal Health Care Cost Survey – Combined Medical and Pharmacy Trends

Plan Year Total Claims %Δ

5 Year

Average

5 Year

National

Average

2012 $7,527 n/a

2013 $8,217 9.2%

7.8%

Trend

Average

8.3%

Trend

Average

2014 $9,928 20.8%

2015 $9,912 -0.2%

2016 $10,028 1.2%

2017 $10,813 7.8%

2018 ANN $13,249 22.5%

Savings Compared to FI

2012 $915,760

2013 $900,191

2014 $150,954

2015 $311,474

2016 $270,352

2017 $312,399

2018 YTD $153,256

Savings estimates

projected based on an

annual Fully Insured

Premium amount

2018 YTD utilizes a

monthly premium

amount accrued over

the last 6 months, then

compared to the last 6

months of cost.

7% increase to Benefits Fund to accommodate raising claims

costs

◦ Employee & City Increase

Anticipate contributions and plan design changes

◦ Working with Employee Benefits Committee now

30.68%

37.4%

33.0%34.9%

22%

24%

26%

28%

30%

32%

34%

36%

38%

40%

Sugar Land FY19

Estimate

State & Local Govt Private Sector

100+

Private Sector

500+

Next Steps

Are there follow-up questions that Council needs answered?

Review of questions requiring follow-up

Date Topic

August 7Regular Meeting

Follow up on outstanding questions

August 9Budget Workshop

Property Tax & Debt Service FundRecord vote to publish Proposed Tax Rate Notice and set public hearing dates

August 16Budget Workshop

Enterprise and Other Funds