TOWN OF BROWNSBURG 2016 BUDGET TRANSMITTAL MEMORANDUM

To: Brownsburg Town Council President and Council Members From: Grant A. Kleinhenz, ICMA-CM, Town Manager Subject: Proposed 2016 Budget Date: Thursday, August 13, 2015 ________________________________________________________________________ I am pleased to present the proposed 2016 Budget for your review and consideration. This transmittal letter contains the following sections:

Introduction

Status of Funds for Jan 1 through Jun 30, 2015

Comparison of FY2015 Adopted Budget & FY2016 Proposed Budget

Budget Overview & Summary of Significant Changes for FY2016

Cash Flow and Financial Management Plan as prepared by our Financial Advisor H.J. Umbaugh & Associates (included in the budget binder under Tab 2)

Explanation of Budget Detail Forms

Items to Consider for 2017

FY2016 Budget Notebook Contents

Conclusion INTRODUCTION As a part of our preparation of the 2016 budget, staff reviews and compares our expenditures through June 30th for the previous budget year in order to gauge where we stand and how correct our budget estimates have been. The chart below shows that we have only spent 44.5% of our 2015 General Fund budget through June 30th. The other three major funds (Water, Sewer and Stormwater) are provided below for your review. Overall, we have only spent 41% of the four major funds through the first six months of the year. At this rate, we could expect our expenditures to be between 8-10% lower than expected and budgeted. This trend has held true through the end of July 2015. This simple accounting demonstrates that a budget is nothing more than a plan or outline of Town spending priorities and gives staff the authority to spend a set amount of dollars. A budget in no way means that the set amount (approved budget) will be spent but is a plan that will change as conditions, needs and priorities change throughout the fiscal year.

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STATUS OF 2015 EXPENDITURES THROUGH JUNE 30, 2015

1/1/2015 thru 6/30/2015

General Funds

Budget Categories 2015

Budget Expenditures %

Expended Funds Remaining

Personal Services $6,399,265 $2,962,171 46% $3,437,094

Supplies $872,760 $418,944 48% $453,816

Other Services & Charges $1,569,873 $550,546 35% $1,019,327

Capital/Transfer $500 $0 0% $500

Net Budget $8,842,398 $3,931,661 44.5% $4,910,737

Water Funds

Budget Categories 2015

Budget Expenditures %

Expended Funds Remaining

Personal Services $1,204,836 $534,604 44% $670,232

Supplies $343,835 $179,451 52% $164,384

Other Services & Charges $2,096,410 $1,108,270 53% $988,140

Capital/Transfer $240,000 $25,000 10% $215,000

Net Budget $3,885,081 $1,847,325 47.5% $2,037,756

Stormwater Funds

Budget Categories 2015

Budget Expenditures %

Expended Funds Remaining

Personal Services $613,874 $250,203 41% $363,671

Supplies $89,310 $31,288 35% $58,022

Other Services & Charges $786,455 $358,462 46% $427,993

Capital/Transfer $0 $0 0% $0

Net Budget $1,489,639 $639,953 43.0% $849,686

Sewer Funds

Budget Categories 2015

Budget Expenditures %

Expended Funds Remaining

Personal Services $1,642,316 $718,542 44% $923,774

Supplies $293,275 $108,312 37% $184,963

Other Services & Charges $2,729,382 $1,118,573 41% $1,610,809

Capital/Transfer $89,300 $9,600 11% $79,700

Net Budget $4,754,273 $1,955,027 41.1% $2,799,246

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I am appreciative of the efforts of Department Heads and employees who have effectively managed Town funds to ensure that the Town adheres to our adopted budget and spends less than we receive in revenues. One of our focuses has been to strive to find new ways to save tax payer dollars while continuing to provide quality services and achieve progress in our many areas of focus. COMPARISON OF FY2015 ADOPTED BUDGET & FY2016 PROPOSED BUDGET

BUDGET OVERVIEW & SUMMARY OF SIGNIFICANT CHANGES FOR FY2016 As a general statement, the proposed 2016 General Fund Budget is a balanced budget with projected expenditures ($9,180,625) equal to our estimated revenues ($9,180,625). Included in this budget is a 2% merit based pay pool for all Civil Town

Fund Budget Description

Adopted

2015

Proposed

2016

%

Change

Amount

Change

101 General Fund Budget 8,841,552$ 9,180,625$ 3.83% 339,073$

601 Water Fund Budget 3,887,900$ 4,018,924$ 3.37% 131,024$

606 Wastewater Fund Budget 4,757,092$ 6,823,331$ 43.43% 2,066,239$

605 Storm Water Fund Budget 1,492,458$ 2,859,476$ 91.60% 1,367,018$

201 MVH Fund Budget 1,523,186$ 2,230,213$ 46.42% 707,027$

402 CCD Fund Budget 697,510$ 452,906$ -35.07% (244,604)$

401 CCI Fund Budget 35,000$ 35,000$ 0.00% -$

444 EDIT Fund Budget 2,092,671$ 4,046,713$ 93.38% 1,954,042$

242 RDC Fund Budget 5,281,124$ 5,716,315$ 8.24% 435,191$

318 Building Debt Fund Budget 1,883,500$ 1,507,579$ -19.96% (375,921)$

803 Riverboat Fund Budget 200,000$ 200,000$ 0.00% -$

804 Rainy Day Fund Budget 1,277,000$ 303,000$ -76.27% (974,000)$

236 Clerks Perp 4,040$ 4,040$ 0.00% -$

202 Street LR&S 400,000$ 300,000$ -25.00% (100,000)$

609 WW Construction 950,000$ 0$ -100.00% (950,000)$

211 Parks Non-Reverting 974,073$ 1,154,015$ 18.47% 179,941$

212 Park Impact Fee 575,000$ 325,000$ -43.48% (250,000)$

204 Parks Capital Improvement -$ 8,720$ N/A 8,720$

280 Food & Beverage 1,050,032$ 1,349,922$ 28.56% 299,890$

213 Police Investigations 10,000$ 10,000$ 0.00% -$

233 Police LECF 10,000$ 30,000$ 200.00% 20,000$

703 Police Pension 414,539$ 314,539$ -24.12% (100,000)$

177 Fire Territory Budget 8,676,932$ 9,100,000$ 4.88% 423,068$

377 BFT Equipment Replacement 1,235,240$ 492,850$ -60.10% (742,390)$

277 Fire Service Fee Fund 10,000$ 10,000$ 0.00% -$

777 Fire Territory Gift Fund 13,600$ 13,600$ 0.00% -$

477 Fire Territory Grant Fund -$ 1,500$ N/A 1,500$

Special Fire Services General -$ -$ N/A -$

TOTALS 46,292,450$ 50,488,268$ 9.06% 4,195,819$

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employees and a 3% across the board pay increase for Police employees (see below Proposed Pay Increase section on page 6). The budget also continues to focus on the implementation of many recommendations from the Comprehensive Plan update completed in 2012. In this budget transmittal memo I have highlighted some of the major changes in the budget. Rather than provide a summary by fund, I am providing a more comprehensive summary since many of my comments are related to multiple funds. Staff will prepare a detailed presentation that will be shown to the Town Council at the Special Budget Meeting scheduled for August 19th.

Review of Total Budget Change from 2015-2016 – As depicted on the table above, the overall Town budget has increased by $4,195,819 from $46,292,450 in 2015, to $50,488,268 in 2016, which represents an overall increase of 9.06%. As you will notice from the cash flows, the General Fund is a balanced budget with expenditures matching revenues and other funds that are not balanced, such as the Water, Wastewater, Stormwater, and RDC funds, are conscious choices to spend down intentionally accumulated fund balances for capital project development/design or construction. In fact, a majority of the $4,195,819 overall budget increase is found in 3 funds (Wastewater, Storm Water and EDIT) and is specifically for major capital improvement projects such as design engineering fees for a regional storm water detention pond near the Ronald Reagan Parkway, Wastewater Treatment Plant design engineering and design engineering for the proposed Community Recreation Center located at Arbuckle Acres Park. One complaint that I have heard over the past few years is that while we have made a conscious effort to reduce our Town tax rate that our spending has in fact increased. Our spending has increased in a proportionate amount to the growth that we have experienced (see below table). Since 2012, our General Fund has increased 17.1% from $7,840,139 in 2012 to the proposed FY2016 amount of $9,180,625. This very closely mirrors the growth in our population of 17.5% since the 2010 Census (2010 – 21,285 to 2015 projection of 25,000+) as well as accounts for significant increases in square miles of the Town borders through annexations like the Brownsburg East Annexation (completed in 2011), Northfield at Wynne Farms Annexation (completed in 2013) and the Ward Annexation (completed in 2014).

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Growth equates to the need for the Town to add employees as shown in budgets over the past few years (1 Wastewater Plant Operator in 2013 Budget, 2 Police officers in 2015 Budget, 3 Police Officers in 2016 Budget, 1 Planner in 2015 Budget and 1 Assistant Building Commissioner in 2015 Budget) to plan and execute capital projects and utilize more services. Some of these capital projects tied directly to growth that are included in the 2016 Budget are as follows (more detail on Capital Projects on page 10):

o A new water main on CR900E extending from Motorsports Way south to an existing water main on the west side of CR900E near Creekside Commons Subdivision. This is Phase III of a 3 phase project designed to increase flow and pressure to our growing northeast side of Town. This project is a follow up to this year’s Phase II Water Main Loop project on CR901E extending north and crossing under 56th Street to connect to existing mains for Hession Farms Subdivision. Phase III is estimated to cost $225,000.

o Design Engineering for the proposed Wastewater Treatment Plant Expansion Project in the amount of $1,500,000 (nearly $700,000 will be expended from the 2015 Budget). This expense is budgeted for in the Wastewater Operating Fund.

Property Tax Rate Review – The proposed 2016 Budget allows the Town to lower the overall corporate tax rate from 0.9735 to a projected 0.9683, which represents a decrease of $0.0052 or 0.53%. This means that the Town has reduced the tax rate each year for the past 4 years. Once the Assessed Value is certified by the County in September/October 2016, the tax rate may adjust slightly as we have used conservative growth in our Assessed Value figures for 2016 of $44,232,541. The first table below compares the total Town tax rate from 2012-2016. The second table below shows the relationship between the tax rate and the Town’s overall Assessed Value growth. The projected, or pre-certified 2016 assessed value is $1,160,536,430.

Summary of Growth Trends & Impact of Growth on the General Fund

Budget Impact 2012 2013 2014 2015 Projected 2016

Average %

Change

Total %

Impact Since

2012

Adopted General Fund Budget 7,840,139$ 7,690,918$ 8,237,362$ 8,841,552$ 9,180,625$

General Fund Change % -1.9% 7.1% 7.3% 3.8% 4.1% 17.1%

Assessed Value/Development Impact

Average %

Change

Total %

Impact Since

2012

Town Assessed Value (AV) 904,394,354$ 1,006,255,220$ 1,054,976,670$ 1,116,303,889$ 1,160,536,430$

AV Change % 11.3% 4.8% 5.8% 4.0% 6.5% 28.3%

Population Impact

Population

Change Since

2010

The Town population according to the 2010 Census was 21,285, in 2013 the Census estimated 23,160. With development 17.5%

and annexations, the Town estimates 25,000 in 2015.

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Proposed Pay Increases – The proposed budget includes a 2% merit based pay pool for all Civil Town employees. For Civil Town employees, employees are evaluated based upon their work performance and accomplishment of major goals established at the beginning of the year with their supervisor. They may potentially earn up to a 2.5% raise, but also have the potential to not earn a raise. The total proposed merit pool is $71,985 for Civil Town employees. This pool consists of $18,830 in the General Fund, $20,675 in the Sewer Fund, $15,073 in the Water Fund and $8,216 in the Stormwater Fund. The balance comes from the Parks Non-Reverting and Food & Beverage Fund. Merit pay is applied in January of the fiscal year for performance in the prior year. The Police Department & Fire Territory have budgeted for an across the board 3% pay increase. For Police, that amount is just over $86,481. I do have a concern

Relationship of Tax Rate & Assessed Value

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about giving a higher percentage raise to the Police Department. We had this discussion during the 2013 Budget as well. If a different percentage raise is given to only one Town department, it creates a morale problem and sends a clear message to the other departments about their perceived value by the Town. I was also told that there was concern about the Fire Territory giving a 3% raise to their employees. I would point out that prior to 2014, the Fire Territory had not been able to give raises to their employees for 7 years. During that same time, the Town was giving raises to employees. I would recommend that the change be made in the budgets to allow for an across the board 2% pay raise for the Police Department rather than their requested 3%. The difference between the 2% and 3% figure is approximately $28,827.

Proposed Sewer Rate Increase – Staff has been in the process of reviewing rates with planned improvements to the Wastewater Treatment Plant and collection system of approximately $26 million over the next 2-5 years. Currently, the Wastewater Plant is operating at/near 88% of its design capacity, which should last for approximately 4-5 years at current growth rates. A rate increase will need to be installed as those projects are planned, designed, permitted and eventually constructed. Staff is working diligently to put together a plan for improvements that is staged for expected demand through growth and development while not placing a large burden on our current users to pay those costs. The Town Council has approved a design engineering agreement with Arcadis and we are moving through the process of that design with 30% plan completion expected this fall. At the 30% plan stage, we have retained Wessler Engineering to perform a peer review of the proposed plans in order to find value added engineering changes to minimize the cost of the proposed project. My hope would be that we can find $3-4,000,000 in savings and only require $22-23 million for the project. The last increase to the Sewer rate was in November 2010. The proposed 2016 Budget does not include any increase in revenues due to a rate increase at this time. Once analysis has been completed and the final design costs and plan of improvements is known for the expansion, we would recommend that the Town implement a staged approach to a rate increase over the next 4 years. This is an issue that I would like to address with the Town Council (as well as Council Elect) in a work session after the completion of the 30% plan stage which should be in November. *Note – in an effort to provide as much Sewer revenue as is possible to fund the future capital needs, we made a conscious effort this year to shift some of the burden of the cost of salaries and benefits from the utility funds, including the Sewer, Water and Stormwater Funds, back to the General Fund. In the past, we have budgeted for salaries in other departments based upon a 25% split between the four major funds (General, Sewer, Water and Stormwater). This year we were able to move $93,971 in salaries and benefits back to the General Fund to lessen the strain on the utility funds. This change makes the split now 30% General Fund,

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and 23.3% from the three utility funds. This is a small step in a greater effort to “wean” us from reliance on the utility funds.

Street Resurfacing and Sidewalk Replacement – We have budgeted the following funds for Street resurfacing in the 2016 budget: o $450,000 Motor Vehicle Highway (MVH) o $200,000 Riverboat o $200,000 Rainy Day o $300,000 Local Roads and Streets (LR&S) o $1,150,000 Total Street Resurfacing Budget (Same amount as the 2015

Budget) We have made a concerted effort to increase the annual dollars available for street repair and maintenance as well as sidewalk replacement and have been successful in increasing that amount in the 2013 and 2014 Budgets. In 2016, we will budget the same amount as the 2015 Budget. One item that will have to be considered in future budgets is less reliance on the Riverboat and Rainy Day Funds as they are dwindling due to use. We will most likely need to look at the use of Motor Vehicle Highway (MVH) and Local, Roads & Streets (LR&S) to a greater extent.

Vehicle Purchases & the CCD Fund – We have budgeted $210,000 in the CCD Fund for 7 police vehicles and $45,000 for a replacement truck for the Maintenance Technician with a snow plow package for a total expense for vehicles of $255,000. We have also budgeted for PC replacements ($22,500), 2 specialized laptops for police investigations ($16,500), Microsoft Exchange Server Upgrade from 2007 to 2013 ($26,500), a card reader access system upgrade for Town Hall and the Police Department ($14,000) and for the resealing of the Town Hall Complex parking lots ($20,000). We have also budgeted for the replacement of Truck #49 (2006 with 150,000 miles) in the Water budget in the amount of $40,000, and from the Motor Vehicle Highway Fund the purchase of a used mail/post office truck at a cost of $30,000 for our mosquito crew to more effectively treat catch basins and water ways, a used trailer for utility work in the amount of $5,000, a replacement salt spreader bed in the amount of $17,000 and a Bobcat vehicle for use in road maintenance and drainage projects in the amount of $75,000. The Parks Department also has budgeted for a new John Deer Tractor and mower in the amount of $57,250 from the Food & Beverage Fund.

Summary of Position Changes

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o Town Engineer – As the Town continues to grow and expand our need for new capital improvements and infrastructure projects, this position will provide project management expertise and oversight for all phases of capital projects—from design, contract/bidding, construction, inspection, and scheduling. The engineer can also perform basic in-house design functions for simple projects that currently must be outsourced, such as drainage, sidewalk, and other minor roadway and property improvements. This position will also be a critical part of succession planning for the eventual retirement of long-time employee and current Street Superintendent Jim Waggoner. Similar to the new Building Coordinator hired to support the Building Commissioner Jack Swalley, this position will help insure the institutional knowledge of the Town’s infrastructure is not lost with upcoming retirements. We also believe that this position can find savings for projects through value added engineering and review of plans prior to bidding. Depending on their qualifications, the position could also do inspections and oversight for construction projects, saving dollars that the Town must now pay to Engineering firms. The budgeted salary for this position is from $60,000 to $90,000 and is contained in the Motor Vehicle Highway (MVH), Sewer, Water and Stormwater Funds.

o 3 Additional Police Officers – These positions are budgeted to be hired after July 1st in order to have them trained and prepared to start serving in January/February 2016. These positions are funded by the General Fund and are being included to provide additional support for our growing community and the increase in calls for service. The positions are budgeted from the General Fund.

o New Water Laborer – As the Town has grown in the number of customers,

the Water Department has found the need for additional staff hours to cover customer service requests and work orders. In fact, through June 2015, the Water Department has responded to over 3,500 locate requests, which is the most they have ever had through the first six months of the year. The proposed Laborer position will assist in these activities. The position is budgeted for from the Water Fund.

Health Insurance – We have budgeted $18,533 for each employee with family coverage and $6,398 for single employees. This constitutes a 3% increase over FY2015 amounts. As a self-insured entity, these funds cover a variety of items for the Town to include claims, premiums, health clinic expenses and HSA contributions. The FY2014 increase of 5%, 2% for FY2015, and 3% increase for FY 2016 follow three fiscal years of no increase. These increases are very modest in comparison to national and regional trends.

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Cost savings due to the implementation of the Town Wellness Clinic and the High Deductible Health Plan continue to help keep the Town from the sharp increases many organizations are experiencing all over the country. However, the Town has seen a slight uptick (about $177,000) in claims costs for the period June 2014 through May 2015 as compared to this same period during 2013-2014. Part of this uptick is expected as the Town hires additional employees, but rising healthcare costs also contribute. As a self-insured entity, the Town should continue efforts to build up a reserve to cover the Town’s liability sufficiently to 1) cover our plan’s maximum cost compared to the expected cost (the amount we budget for) and 2) the cost of claims that are incurred but in the pipeline so not yet reported--this is typically 1/5 of the annual expected claims cost. I am not proposing any change to the amount that the Town pays into each employee’s individual Health Savings Account (HSA) fund, which currently stands at $2,000 for Family coverage and $600 for Single coverage. The below table summarizes, by fund, the health insurance cost increases—both from the 3% increase, as well as the addition of new positions or changes from single to family coverage status by some employees.

Summary of Major Capital Projects – The below capital projects are expected to be continued or be initiated in 2016:

o Southside Drainage Phase I, II, and III (Tilden) – which includes

improvements to Tilden Road from the western Town limits to Jefferson Street including road reconstruction, sewer separation, curb & gutter replacement and sidewalk replacement. The project also includes work to

Account 2015 Budget 2016 Proposed $ Change % Change

General 101.xx131 1,138,217$ 1,148,668$ 10,451$ 1%

MVH 201.xx.131 96,495$ 90,119$ (6,376)$ -7%

Water 601.xx.131 202,602$ 247,643$ 45,041$ 22%

Stormwater 605.xx.131 83,014$ 86,307$ 3,293$ 4%

Wastewater 606.xx.131 305,318$ 333,742$ 28,424$ 9%

EDIT 444.xx.131 17,933$ 23,252$ 5,319$ 30%

Parks Non Rev 211.xx.131 36,890$ 49,862$ 12,972$ 35%

Food&Bev 280.xx.131 3,157$ 3,233$ 76$ 2%

Town Total 1,883,626$ 1,982,826$ 99,200$ 5%

Fire 177.xx.131 1,267,008$ 1,360,629$ 93,621$ 7.39%

Fire Total 1,267,008$ 1,360,629$ 93,621$ 7.39%

Grand Total 3,150,634$ 3,343,455$ 192,821$ 6.12%

Note: Of the increase, 3%, or $94K, is the result of single/family rate increases.

The balance ($98K) of the $192K increase is related to new positions or changes from

single to family coverage.

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several of the major side streets including Maxine Manor, Alpha Avenue, Locust Lane, Saratoga Drive, Sunnybrook Drive, etc. The bid was approved by the Council in April and awarded to Brackney, Inc. in the amount of $5,200,872. Construction has started and is planned for a May 2016 completion date.

o N. Green Street Improvement Project from US 136 north to 56th Street – This project will include a total reconstruction of this two lane section which is outdated and doesn’t have enough capacity as of today for the estimated 28,000 cars per day. The Town hired VS Engineering in the fall of 2014 and they have designed the cross section including public input as well as meetings with various stakeholders along Green Street. The project is estimated to cost $5.5 million and we have received a Highway Safety Improvement Program (HSIP) Grant from INDOT in the amount of $3 million. At this point, the Environmental Impact Statement (EIS) is being reviewed by INDOT for compliance with Federal Highway standard. Right of way negotiations and acquisition cannot start until after the EIS is approved. We have started the right of way appraisal process and must have all right of way purchased prior to a final review by INDOT in October 2016. If this deadline is met, we will plan for a bid opening in March 2017 and construction occurring over the summer of 2017 with a completion date of December 31, 2017. In the 2016 Budget, we have planned for $150,000 for design engineering with VS Engineering and $280,000 for right of way acquisition. *Note - You may notice that in last year’s memo, this project was scheduled to be under construction in the spring of 2016 but since that budget adoption in October 2014, the Town has been notified that we were “bumped” from State FY2016 to FY2017 (which begins on July 1, 2016).

o Final Design Engineering for Northfield Drive from Beacon Pointe south to

CR 300N – We have engaged CrossRoad Engineers to do the design for this segment of Northfield Drive. The contract was approved in July 2014 and we have held preliminary design meeting and have submitted the Environmental Documents to INDOT for their review. CrossRoad is now working on identifying right of way and preparing exhibits to allow for appraisal work to start once INDOT approves the Environmental. The tentative schedule is as follows:

o Survey – Completed o Stage 2 Design – Completed o Environmental Document – Completed o Public Involvement/Public Hearing – February 2016 o Right of Way Acquisition – Late 2016/early 2017 o Bid Letting – July 2018 o Construction – July 2018

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o Thornburg Parkway Extension through Cardinal Park to Hornaday Road –

This project was budgeted for completion initially from the 2014 Budget but due to design issues with utilities, was not completed that year. Our plan is to bid the project in November 2015 and have the Council consider for approval at the December meeting with construction occurring during the spring of 2016. This project is estimated to cost $450,000 and will allow for the development of the Cardinal Park Property located on Hornaday Road. This project also accomplishes a priority of the Thoroughfare Plan by connecting through to Hornaday Road, and eventually onto CR900E toward the east. This project is being funded out of the Motor Vehicle Highway Fund.

o Phase III Water Main Loop on CR900E – A new water main on CR900E extending from Motorsports Way south to an existing water main on the west side of CR900E near the Creekside Commons Subdivision. This is Phase III of a 3 phase project designed to increase flow and pressure to our growing northeast side of Town. This project is a follow up to this year’s Phase II Water Main Loop project on CR901E extending north and crossing under 56th Street to connect to existing mains for Hession Farms Subdivision. Phase III is estimated to cost $225,000. We have retained Curry & Associates to perform the engineering and hope to have it completed and ready for bid in summer 2016 with construction being completed by year’s end.

o Proposed Roundabout at CR300N and S. Green Street – Due to the wet weather this summer and also due to our numerous other capital projects which have been delayed due to that wet weather, staff has decided that this project that was originally planned for construction in the fall of 2015 should be delayed to the summer of 2016. We have budgeted $1,500,000 for construction in the TIF/RDC Budget as well as $100,000 for construction inspection services. Currently, the goal would be to acquire all right of way this fall with a proposed bid date during the month of November.

o Phase III N. Green Street Gateway Improvement Project – Phase III of the N. Green Street Gateway Improvement Project will include landscaping improvements on the area north of the I-74 overpass as well as the development of a trail/sidewalk connection along the east side of N. Green Street crossing under the overpass and connecting into the sidewalk located near the CITGO gas station and the new site of Crew Car Wash. The plan also includes a potential recreational trail that will connect to the east to the existing trail in the Whittington Estates neighborhood allowing for a connection to the new trailhead on N. Green Street in front of St. Vincent’s and Bob Evans. This project is estimated to cost $500,000 and is budgeted

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for in the TIF/RDC Fund. If approved by the Council, staff will plan to work with a design firm to get the project designed over the winter for a spring bid for completion prior to the end of the year.

o Engineering for a Regional Stormwater Detention Facility for the Ronald

Reagan Parkway Area – After the completion of our East Annexation Stormwater Assessment performed by Wessler Engineering in 2014, we have identified a major drainage project that we need to begin discussing and doing engineering on during the 2016 Budget. We are investigating a plan to create a Regional Stormwater Detention Facility located on the west side of the newly constructed Ronald Reagan Parkway extension from US136 to CR300N. This facility will be constructed in the form of an approximately 60 acre lake with an average depth of +5’ and is designed to be able to accept all of the stormwater runoff from the acreage just north of the I-74 interchange (not all the way to 56th Street) and all of the property on the south side in the event of a 100 year flood/rain event. The plan would create a per acre assessment fee that will be charged to developers at the time of building permits which can be used to pay back a bond (if that is the method that we eventually choose to fund this project) and will ultimately save developable acreage and costs for the developers as they will not have to construct individual ponds for each project. We have budgeted $858,000 for design engineering fees as well as $21,600 for property identification and preparation. The engineering will be completed in 2016 with construction being in either 2017 or 2018. Construction is estimated at $5-6,000,000.

o Seumin Street/White Lick Creek Bank Stabilization Project – this spring, we

had a collapse of the bank on the White Lick Creek just north of the bridge on US136. This collapse has caused a serious issue for the private property located on top of the bank adjacent to Seumin Street and is threatening to further collapse taking Seumin Street with it. We have worked with Earth Exploration and Wessler Engineering to design various fixes including rip-rap, retention walls, etc. and plan to construct these measures in 2016. The budgeted cost for this project is $300,000 and is found in the Stormwater Fund budget 605.02 Development Services.

o Design Engineering for Wastewater Treatment Plant Expansion Project –

As directed by the Town Council during a work session in May, we have budgeted for $1,500,000 (nearly $700,000 will be expended from the 2015 Budget) for design engineering fees with Arcadis. This expense is budgeted for in the Wastewater Operating Fund.

o Repairs to East Sewer Treatment Plant – Replace Rake – the East Sewer

Treatment Plant is in need of attention this year and we plan to replace the

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Rake which removes debris from the intake screen. The rake currently is the original unit and is not operating at peak efficiency. If not replaced, we run the risk of failure which will lead to damage to pumps and sewer surcharge and overflows. The Rake is budgeted in the Wastewater Treatment Plant Budget 606.16 in the amount of $292,300.

o Connecting Recreational Trail with the Town of Avon near CR900E – As

approved in 2015, the Town has partnered with the Town of Avon for the design of a connecting recreational trail located west of CR900E from CR300N to CR200N in Avon. The Town is currently in the process of designing that project and has planned for our share of the project of $300,000 to be budgeted for in the EDIT fund. Design should be completed by the end of 2015 with bidding occurring in spring 2016 with construction during the summer of 2016.

EDIT Budget – The proposed budget for the Economic Development Income Tax Fund (EDIT) has increased by approximately 93% from the 2015 Approved Budget. In 2015, the Budget was $2,092,671 vs. the 2016 Proposed Budget of $4,046,713. This increase is due to several large projects that are detailed in the summary below. We have budgeted the following major expenditures in the 2016 Budget: o $700,000 for unspecified economic development project incentives (such as

loans) as well as $60,000 for the BEDC Lease Assistance Program and $30,000 for the Utility Relief Program. The only change in this category over the 2015 Budget was an increase of $15,000 for the Utility Relief Program as it has been requested more with our latest large construction projects (such as TMC Transportation). We also added in $300,000 for the proposed Entrepreneurial/Maker Space concept to attract and develop more entrepreneurs and technology jobs. These dollars are envisioned to be used as “seed money” to be able to apply for grants and do fundraising for securing a location, purchase equipment, renovation of space and marketing.

o $35,400 for Innovation Zone/Technology Corridor Marketing efforts with the Hendricks County Economic Development Partnership using Brand Acceleration

o $175,000 for small drainage projects around the Town. o $100,000 for miscellaneous legal fees o $10,000 for signage at Lucas Oil Raceway (Third year of program) o $50,000 for market retail analytics program such as the previously proposed

Buxton Retail Services agreement. With this project not being approved by the Town Council at this point, this budgeted expense is simply a placeholder, meaning if there is no Council approval to proceed, it will not be spent.

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o $60,000 for the Indiana Shovel Ready Site Certification Program which includes consulting fees, staff travel and fees.

o $95,000 for annual membership fee to Hendricks County Economic Development Partnership (HCEDP). No reduction in fee proposed.

o $27,000 for community events like Farmers Market/Pumpkin Smash Bash and US Nationals Fan Fest (Big GO Block Party). This represents a $7,000 increase over the 2015 Budgeted amount for this category.

o $300,000 for a proposed Special Census in 2016 (cost estimated has yet to be received).

o $1,860,000 in Miscellaneous Capital which includes $1,500,000 for design engineering for the proposed Community Recreation Center at Arbuckle Acres Park, $60,000 to start a Public Art Project and $300,000 to assist the Parks Department with the construction of the trail connecting to the Town of Avon on CR900E.

TIF/RDC Budget – The proposed budget for the TIF/RDC Fund has increased by approximately 8% from the 2015 Approved Budget. In 2015, the Budget was $5,281,124 vs. the 2016 Proposed Budget of $5,716,315. This increase is due to several large projects that are detailed in the summary below. We have budgeted the following major expenditures in the 2016 Budget:

o $150,000 for design engineering for the N. Green Street Improvement

Project from US136 to 56th St. o $100,000 for construction inspection for the Roundabout at CR300N and S.

Green Street – this project was delayed from 2015 to 2016 due to weather and issues with the bidding environment due to that weather.

o $375,000 for right of way acquisition for the N. Green Street Improvement Project and Roundabout at CR300N and SR267.

o $125,000 for community redevelopment/façade improvement grants as approved by the Brownsburg Improvement Committee.

o $80,000 for design engineering for the Phase III N. Green Street Gateway Landscaping and Pedestrian Improvement Project.

o $300,000 for miscellaneous unidentified property purchases o $32,611 for a portion of the bond payment for CR 600/56th Street to

Hendricks County due to the East Annexation o $1,500,000 for construction of Roundabout at CR300N and S. Green Street –

This project has been moved from 2015 to 2016 due to weather issues. o $75,000 for participation in the installation of a traffic signal on intersection

of Pennwood Avenue and East Northfield Drive per Plan Commission commitment with Lauth – moved forward to 2016 from 2015 Budget.

o $65,000 for landscaping installation at 3 Gateway entry signs located on US136 East near Lucas Oil Raceway, US136 West at the Town limits and N. Green Street/SR267 North. Please see enclosed drawings as provided by

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Frazee Gardens for those three signs. Staff prefers Option #2 but is looking for feedback.

o $500,000 for Phase III of the N. Green Street Gateway Improvement Project will include landscaping improvements on the area north of the I-74 overpass as well as the development of a trail/sidewalk connection along the east side of N. Green Street crossing under the overpass and connecting into the sidewalk located near the CITGO gas station and the new site of Crew Car Wash.

o $68,500 for design engineering and construction for 4 Highway Safety Improvement Program (HSIP) grans for Pedestrian Crossing Improvements at various intersections, Regulatory Sign Replacement, Traffic Signal Installation at 56th Street and Wild Ridge Boulevard (design only) and Traffic Signal Backplating. The Town is working with VS Engineering and Shrewsberry on the engineering for these projects which were awarded HSIP funding in 2015.

As you know, the Town has been working with several developers (Flaherty & Collins, Paragon Development, Envoy, LOR Corp. and Bolt Redevelopment) on proposed mixed use developments located in the downtown area and near the former St. Malachy Church and School site on N. Green Street. As these projects progress, it may be necessary for the Town to consider funding various improvements such as internal street and road improvements, property demolition and acquisition as well as the construction of parking structures from the TIF funds generated from these proposed developments. No dollars have been budgeted at this time in the 2016 Budget but may need to be via a Special Appropriation in 2016 once negotiations are completed.

Park Improvements – Funds have been budgeted for various park improvements as follows:

o $135,616 for a payment on the Splash Pad debt from the Food & Beverage

Fund o 150,000 for design engineering services for the development of a trail or park

design from the Food & Beverage Fund o $505,900 from the Food and Beverage Fund for improvements to the Bundy

Lodge located in Arbuckle Acres Park, a portion of the development of a Dog Park at the Cardinal Park property and to fund the connecting recreational trail with the Town of Avon

o $561,000 from the Park Impact Fee Fund to match the Recreation Trail Program (RTP) grants in the development of trails and the development of a playground at the Cardinal Park property.

o $423,724 from the Non-Reverting Fund for a growing B.A.S.E. (Before and After School Enrichment) program and its staff, supplies and service expenses.

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o $52,780 from the Non-Reverting Fund for shelter enhancements, the establishment of an outdoor classroom and the development of a Dog Park at the Cardinal Park property.

Contingency – For contingency expenses, we have budgeted $51,628 in the General Fund, $50,000 in Rainy Day, $61,500 in Sewer, $31,500 in Water, $26,500 in Stormwater, $50,000 in the Motor Vehicle Highway (MVH), $100,000 in Food & Beverage, $21,250 in Cumulative Capital Development, $10,000 in Cumulative Capital Improvement (CCI) for unexpected projects or items that may develop in 2016.

Operations Funded by Property Tax – The portion of the budget derived from property tax revenue includes the General Fund, Motor Vehicle Highway (MVH) Fund, Building Debt Fund, and the Cumulative Capital Development (CCD) Fund. Approximately 22% of the annual property tax paid by a homeowner goes to the Town of Brownsburg to fund these four operating funds. The remaining 78% is a revenue stream for other agencies such as Hendricks County, Townships, Library, Fire Territory and Brownsburg Community School Corporation. The below table summarizes the 2016 proposed Town Operating Budget funded by the aforementioned collection of property tax revenue. The below pie chart summarizes the specific use of these revenues as a percentage of the overall Town property tax revenue. In other words, the pie chart shows the approximate percentage distribution of the proposed $13,371,323 to the various Town functions.

2016 Town Operating Budget Funded by Property Tax

Fund Budget Description Proposed 2016

Difference

from 2015

101 General Fund Budget $9,180,625 3.83%

201 MVH Fund Budget $2,230,213 46.42%

318 Building Debt Fund Budget $1,507,579 -19.96%

402 CCD Fund Budget $452,906 -35.07%

TOTAL $13,371,323

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CASH FLOW The Cash Flow/Financial Management Plan section of this notebook shows actual expenses for the past four budget years (going back to 2012), the 2016 proposed Budget as well as projected expenses through 2017. We have not spent a lot of time on projecting or accurately estimating revenues/expenses in 2018 and beyond, but wanted to make some assumptions and show ending cash balances so we are looking out into the future. Most operating budgets in out years assume a 2.9% increase in expenses year over year but a more modest increase of only 1.3% in revenues. This doesn’t commit us to these increases, but are used only to show the fund balance impact should this take place. As a general rule, I prefer to be conservative on our revenue estimates. EXPLANATION OF BUDGET DETAIL FORMS As in the past, these forms show line item expenses with comparisons to the previous budget years back to 2012. One new addition to this year’s forms is the inclusion of various items that were cut from the budget requests of staff during the formulation of the budget. These item’s dollar amounts have been removed from the Line Item Justification sheets and the budget totals but the description was retained and has been highlighted in yellow. We wanted to include this so that the Council knows that we have trimmed items from requests as they either cannot be funded at this time with our revenue constraints or were decided to be unnecessary or unfeasible for inclusion into the 2016 Budget.

Specific Use of Property Tax Revenue as a Percentage of Overall Budget

That’s Funded by Property Tax Revenue

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Here is an example of what I am trying to describe:

In my budget presentation I do not plan to spend much time going over the budget detail forms in great detail but will utilize a Power Point presentation to highlight the major changes, increased amounts and percentages as well as projection of fund balances. If you have questions about the detail, please free to call me prior to the meeting or you can ask them at the time of the presentation. We have continued to provide Line Item Justification Sheets to give the Town Council, as well as our residents, a clearer understanding of where the proposed budget dollars are being spent and for what intended purpose. ITEMS TO CONSIDER FOR 2017 Proposed Storm Water Fee Increase – Since instituting the Town Stormwater Utility in 2008, the Town has not increased the stormwater fee, which is used to fund our Stormwater Department as well as major capital drainage improvement projects. As you can see from the decreasing fund balance in the Stormwater Fund ($3,026,266 in 2012 vs a projected $1,052,489 at EOY 2016), our needs have continued to increase and our funding source has remained constant. Staff would like to open discussions with the Town Council about a proposed increase to that fee in late 2016 to take effect in 2017. I would also recommend that we institute a small escalator of 1-2% each year over the following years. When the fee was instituted, the Town was smaller (since have added the East Annexation, Northfield at Wynne Farms, Hart-Anderson and Magee Annexations) and costs have steadily increased on materials used in stormwater projects such as pipe, rock, fill, labor, etc. CCD Fund Rate – The Cumulative Capital Development Fund (CCD) has slowly lost fractions of dollars in the tax rate since 2011 through a process called trending. The rate in 2016 is projected to be 0.0423, which is 0.0077 lower than the maximum allowable rate of 0.05. In order for us to maximize this important levy, we will need to go through a Public Hearing process sometime during 2016 for the increase to become effective in the 2017 Budget. The Fire Territory also goes through this process annually with their Fire Equipment Replacement Fund. The CCD Fund is a very important source for the purchase of capital equipment such as Police vehicles, trucks, lawn mowers and other specialty equipment such as brush hogs, dump trucks, landscape chippers, etc. As our Town continues to grow, we will add the need for additional equipment to continue providing our services at a quality level.

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FY2016 BUDGET NOTEBOOK CONTENTS This budget notebook includes the following documents:

This Budget transmittal memo

Cash Flows/Financial Management Plan for all funds, looking at trends over a 6 year period form 2012-2017

Budget Summaries and detailed budget justifications—broken down by Department—for the General Fund, Water Fund, Wastewater Fund, Stormwater Fund, Cumulative Capital Development (CCD) Fund, and the Motor Vehicle Highway (MVH) Fund

Budget summaries and justifications for all remaining Town funds

Fire Territory budget as adopted by the Governing Board CONCLUSION The Proposed 2016 Budget is respectfully submitted for your consideration. I am pleased to be able to report that it is again a balanced budget. In some cases we have consciously drawn down on fund balances to pay for major capital infrastructure projects (such as the proposed construction of a Roundabout at S. Green Street & CR300N from the TIF Fund in the amount of $1,500,000 or the engineering for the proposed Community Recreation Center in the amount of $1,500,000 from the EDIT Fund). A healthy fund balance in a given fund is a result of deliberate planning, careful spending or better-than-expected revenues and allows expenditures to exceed revenues in a given year for a specific purpose or project. It has been our philosophy to fund operational costs, such as salaries, benefits and supplies, within the bounds of the revenues as forecasted for the various funds. In all cases, the Town continues to strive to find new ways to be efficient with tax payer dollars while providing quality service and achieving progress in our many areas of focus. I want to also call attention to the support and work that has been given to me in the creation and review of this budget by my Executive Assistant Wendi Hudson and the Assistant Town Manager Brian Hartsell. Without their assistance, this effort would be too monumental and I appreciate their aid which makes the process as painless as it can possibly be. Also, the Department Heads who also work very hard in carefully crafting their budgets and work with me very patiently to make sure that their levels of services are sufficient. I look forward to discussing the budget in more detail at our meeting at 5:00 p.m. on Wednesday, August 19, 2015. Respectfully Submitted,

Grant A. Kleinhenz, ICMA-CM Town Manager