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Home My WebLink AboutMunicipal Budget Workshop PresentationAn oasis of natural beauty that maintains our open spaces in balance with distinctive development, trails, and quality of life amenities amidst an ever expanding urban landscape. 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 2 •Integrity-Driven Government •Family Friendly & Welcoming •Informed & Engaged Citizens •Sense of Community •Educational Leaders •Transparent & Innovative •Fiscal Responsibility •Strong Aesthetic Standards •Preservation of our Natural Beauty •Planned Responsible Development 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 3 Westlake is a unique community blending preservation of our natural environment and viewscapes, while serving out residents and businesses with superior municipal and academic services that are accessible, efficient, cost-effective, and transparent. 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 4 1.Understanding our Financial Health 2.Budget Presentation 3.Review Budget by Fund Types 4.Strategies Going Forward 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 5 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 6 Financial Structure of the Town Forecast & Trends Concerns & Assumptions Guidance / Recommendations Strategic Direction Going Forward SECTION I Understanding Our Financial Health 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 7 Debt Service Fund Cemetery Fund Westlake Academy E c o D e v o Fund Vehicle M&R Fund Utility M&R Fund General M&R Fund Visitor Fund Utility Fund Capital Project Fund 4 B Fund 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 8 FINANCIAL STRUCTURE GENERAL FUND IS THE FOUNDATION 1.What does the General Fund support? 2.Where does the money comes from that supports it? 3.Understanding the challenges of the money that supports it. 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 9 Capital Project $1M M&R Funds $300K From VF & UF $1.1M Debt Service $980K Transfers In Transfers Out $2.296M The fiscal health of the General Fund is critical to the ability of the Town government to deliver it’s current levels of service. Each $25K we add to expenditures will decrease fund balance by one operating day Academy $1.242M General F u n d is the Foundation Shared Services $727K Reserve Transfer $315K GMR Expenses $200K 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 10 What revenue sources does the General Fund rely on? Sales Tax 3,510,500 39% P ro p e r t y Ta x 1,205,205 13% Bldg Permits 2,137,121 24% Other Income 2,182,015 24% 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 11 87% of the cost of General Fund services a re b e i n g p a i d mostly b y non-Westlake residents 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 12 Variance Is $150 $1.5M home in Highland Park including homestead exemption Tax bill is $2,640 $350K home in Hidden Lakes, Keller including homestead exemption Tax bill is $1,484 $1.5M home in Westlake including homestead exemption Tax bill is $1,634 Variance Is $1,006 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 13 •Educational services at Westlake Academy •Nationally accredited police •Fire and emergency services •Public works and engineering •Parks and recreation facilities •Extensive trail system •Regional animal services and adoption center •Community planning and building inspection •Economic development •Water, wastewater and drainage utility services •Contracts for solid waste collection and disposal •Street maintenance 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 14 City`Policy Currently Explanation Westlake 90 operating days 386 days 95% Estimated FY 16-17 (including transfers) Watauga 25% of operating expenditures 43%Council nervous when get closer to requirement since city is limited on new development Roanoke 16.67% of operating expenditures 32%Less than 8.34% is cause for concern, barring unusual/deliberate circumstances. Try to stay close to 20%. Keller Min 19.2% of operating expenditures/70 days Max 50% of operating expenditures/182 days 35%When amount is exceeded, City identifies one-time exp. Or consider rate changes for which to use the funds for and review revenue rates to ensure no unnecessary over collection of revenues. Saginaw Min 15% -Max 20% of operating expenditures 38%Typically higher than the 20% Haltom City 20% of operating expenditures 23% Cedar Hill 25% of operating expenditures 33%Any balance below 20% is cause for concern and possible mitigation. Hurst 90 operating days 92 days Transfer amounts in excess of 90 days into our Special Projects Fund and into our Loss Reserve Fund (for health care expenses) Bedford 20% of operating expenditures 22.80% 82 days Ennis 30% of operating expenditures 110 days Prefer to stay above the minimum because of unknowns Trophy Club 30% of operating expenditures 35%Try to maintain 35% Southlake Min 15% -Optimum 25% of operating expenditures Any balance above 25% is transferred to the Strategic Initiative Fund that is used for one-time high impact expenditures for Community Enhancement; Technology & Capital Grapevine 20% of operating expenditures 26%City does attempt to keep more than the minimum requirement, although there is no defined amount established as to what that excess should be. Highland Park 17% of operating expenditures 23%$20M Budget $11M Property Tax Revenue $.22 per $100 valuation 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 15 What level should the Fund Balance be for our Municipal General Fund? 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 16 •Resident Survey 2017 •Residential Population Trends •Westlake Academy Trends •Staffing Trends •What is our commitment to the future residents of Westlake? •Do we have the current resources/finances to maintain the current levels of service over the next few years? •Are we building a sustainable tax base? •Can we adequately invest in our infrastructure and buildings? •Resource commitment to the Academy (and the municipal ability to fund it?) •Westlake’s Permanent Population Growth •Traffic Demands •Balanced Growth to Impact Cost of Municipal Services •Housing Start Increases and Maintaining Westlake’s High Quality Residential Housing •Utility Fund current debt situation LOCAL CHALLENGES RESIDENTIAL GROWTH 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 17 •Residential growth impact on the Academy •Public Education Funding Shortfall •Implementation of the Comprehensive Plan •Pursuit of Infrastructure and Services Reinvestment •Staffing Levels, Insurance Costs, and Retention •Continued Emphasis on Long-range Financial and Strategic Planning STRATEGIC PLANNING, RESIDENT FEEDBACK & WESTLAKE ACADEMY •DFW Metro Area Employment and Population Growth •Water Demand •Area Transportation, Mobility, and Traffic Congestion •Area commercial growth REGIONAL COMMERCIAL GROWTH 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 18 •Commercial Development, Economic Development, and Daytime Population Growth •New Charles Schwab Corporate Campus •Commercial Development in Entrada •Solana Redevelopment/Reinvestment •Economic Development LOCAL COMMERCIAL GROWTH General Fund Five Year Forecast FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 3 8 6 3 3 0 2 7 9 2 2 0 19 5 17 7 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 19 FY17/18 AND FORWARD, WE ARE STARTING TO USE FUND BALANCE 349 277 226 169 128 103# o f d a y s forecasted at Council Retreat Forecasted d a y s a s o f 08/09/17 1.Sales Tax –last two fiscal years, rate of growth slowed 2.Property Tax Base •Residential increasing, a “mixed” blessing •Commercial –not increasing appreciably 3.Westlake Academy –state revenue flat, puts pressure on municipal support 4.M&R Funds –transfers have been reduced 5.Debt Service –has increased due to Fire Station and A&S debt service formerly charged to Visitors Fund 6.General Operating Expenditures –salaries and wages and associated benefits cost more, some new positions 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 20 1.Ability to fund M&R Funds is reduced 2.Future CIP debt issue = increase to I&S portion of Ad Valorem property tax rate 3.Ability to fund infrastructure maintenance is challenged 4.Could impair quality of service delivery 5.Westlake Academy revenue inelasticity = pressure on existing municipal spending for WA 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 21 Growth, both locally and regionally = demand for service Demand for service = resource demand increases Other cost increases = resource demand increases General Fund resources are “stretched” 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 22 SECTION II Budget Presentation 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 23 1. As a Policy Document •budget policies, goals and objectives 2. As a Financial Plan •financial structure, stewardship and setting service levels 3. As an Operations Guide •direction through the use of goals and objectives 4. As a Strategic Communications Device •for readers with a non-financial background 5. Vision, Values & Mission •aligns resources and strategic plan to V V M 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 24 THE IMPORTANCE OF MAINTAING OUR VISION 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 25 The question does not appear to be if we will grow, but rather how we will grow. This vison permeates our Comprehensive Plan (Forging Westlake) and likewise, must be reflected in this budget as well. 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 26 1.Budget prepared with minimum expenditures and staffing. 2.Removed requests that were not mandated, life/safety or maintenance of current facilities. 3.First year that a budget is proposed to utilize the fund balance in the General Fund (approx. $1.0M) •Preserves transfer out of one-t i m e m o n e y fo r u s e t o w a rd one-time expenditures •Reduced GMR expenditures by $615K o Resulted in reduction of transfers out to GMR of $350K o Remaining transfers out to GMR this FY of $300K 1. Municipal General Fund 2. Enterprise Funds (Utility Fund; Cemetery Fund) 3. Internal Service Funds (M&R Funds; General–Utility-Vehicle) 4. Special Revenue Funds (Visitor Fund; 4B; ED; LS; PID) 5. Debt Service Funds (DS Fund 300; DS Fund 301) 6. Capital Projects Fund Includes 6 Fund Types 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 27 Estimated FY16/17 Budget vs Proposed FY17/18 Budget $16.3M Revenues $14.8M Operating Expenditures $10.8M Capital and M&R Projects $-0-Net Transfers In and Out $-9.3M Net Change to Fund Balance $16.6M Ending Fund Balance (All Funds) 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 28 SECTION III “Budget Overview By Fund Type” will detail these changes I F O NLY M UNICIPAL O PERATING E XPENDITURES were taken into consideration (removal of all expenditures related to Capital Projects and Transfers Out) the FY 17/18 proposed budget would show A DECREASE OF 1% = $205,721 compared to the FY 16/17 estimated budget Estimated Budget F Y 16 / 17 Proposed Budget F Y 17 / 18 Change Amount Change Percent Total Payroll & Related $ 3,694,332 $ 4,123,184 $ 428,852 11.6% Operating Expenditures 11,387,954 10,753,381 (634,573)-5.6% T O TA L $ 15,082,286 $ 14,876,565 $ (250,721)-1.4% 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 29 SERVICE LEVEL ADJUSTMENTS by Account Type 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 30 The Town utilizes “service level adjustments” to NORMALIZE tracking of our budget cost increases or decreases. A service level adjustment (SLA) is a request for any fluctuation in revenues or expenditures from the “Base Budget”. ---------------------------------------------------------------------------------------------- (FY 2016-17 budget, adjusted for year-end estimates, less one-time revenues & expenses). 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 31 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 32 One-Time On-Going REVENUES $1,685,480 TOTAL $1,422,299 $263,181 percentage 84%16% EXPENDITURES $7,773,160 TOTAL $7,964,365 $671,139 percentage 92%8% Base Budget vs Proposed FY17/18 Budget 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 33 Payroll and Related expenditures have a 4% increase of $167K (general fund impact) 1.Market Band Adjustments of $167K (includes benefits) •Based on salary survey of benchmark cities 2. One Additional Employee •Project Manager for Public Works Dept •Total cost $90,950 offset 100% by •Transfer in from Utility Fund $36,380 •Transfer in from Capital Fund $54,570 Base Budget vs Proposed FY17/18 Budget PROPERTY TAX 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 34 is the total tax rate calculated to raise the same amount of property tax revenue from the same properties. 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 35 a decrease of $0.00080 The FY2017-18 calculated effective rate is 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 36 Current Tax Rate is $0.13695 $0.13615 Effective Tax Rate F Y 16 / 17 Adopted FY 17/18 Proposed Change Amount M&O $ 0.12882 $ 0.11133 $ (0.01749) I&S 0.00813 0.02482 0.01669* $ 0.13695 $ 0.13615 $ (0.00080) 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 37 *Bond payment for A&S Center was moved from Visitor Fund to Debt Service Fund 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 38 FY10/11 Actual FY11/12 Actual FY12/13 Actual FY13/14 Actual FY14/15 Actual FY15/16 Actual FY16/17 Estimated FY17/18 Proposed $0.16010 $0.15684 $0.15684 $0.15684 $0.15634 $0.15634 $0.13695 $0.13615 Property Tax Rate per $100 Assessed Valuation (shown in millions) Source: www.tad.org/2016taxrates 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 39 0.47300 0.46200 0.43000 0.37512 0.29025 0.28927 0.22000 0.13615 Trophy ClubSouthlakeKellerRoanokeHasletGrapevineHighlandPark 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 40 Fiscal Year M&O Rate I&S Rate Actual Rate Total Effective Ta x R at e variance F Y 1 0 -11 0.15620 0.00390 0.16010 -- F Y 11 -12 0.13835 0.01849 0.15684 0.17944 (0.02260) F Y 12 -13 0.14197 0.01487 0.15684 0.19326 (0.03642) F Y 13 -14 0.13888 0.01796 0.15684 0.16070 (0.00386) F Y 14 -15 0.13710 0.01924 0.15634 0.15634 - F Y 15 -16 0.13947 0.01687 0.15634 0.15677 (0.00043) F Y 16 -17 0.12882 0.00813 0.13695 0.13695 - F Y 17 -18 0.11133 0.02482 0.13615 0.13615 - 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 41 FY 10/11 Actual F Y 11 / 12 Actual F Y 12 / 13 Actual F Y 13 / 14 Actual F Y 14 / 15 Actual F Y 15 / 16 Actual F Y 16 / 17 Estimated F Y 17 / 18 Proposed General Fund $ 0.15620 $ 0.13835 $0.14197 $0.13907 $0.13710 $0.13947 $0.12882 $0.11133 Debt Service 0.00390 0.01849 0.01487 0.01777 0.01924 0.01687 0.00813 0.02482 TOTAL $0.16010 $0.15684 $0.15684 $0.15684 $0.15634 $0.15634 $0.13695 $0.13615 amount change (0.00326)--(0.00050)-(0.01939)(0.00080) percent change -2.04%0.00%0.00%-0.32%0.00%-12.40%-0.58% 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 42 FY 10/11 Actual FY 11/12 Actual FY 12/13 Actual FY 13/14 Actual FY 14/15 Actual FY 15/16 Actual FY 16/17 Estimated FY 17/18 Proposed $1.026 $1.091 $1.210 $1.228 $1.248 $1.274 $1.431 $1.500 Total Appraised Value (shown in billions) 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 43 FY10/11 Actual FY11/12 Actual FY12/13 Actual FY13/14 Actual FY14/15 Actual FY15/16 Actual FY16/17 Estimated FY17/18 Proposed $0.80 $0.94 $0.86 $0.89 $0.92 $0.94 $1.12 $1.17 Net Taxable Value (shown in billions) Note: numbers includes exemptions (next slide) How much of Assessed Value is tax exempt because of Amount Exemption /Deferral $102.0M Homestead Exemption (20%) $595 K Over 65 Exemption ($10K per acct) $88.1M Deloitte (65%) ends 2022 $70.0M Fidelity (90%) ends 2022 $21.9M Absolute –Public & Charitable $12.7M Grandfathered in $128.0M Deferred -Agriculture 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 44 TYPE AMOUNT Existing $321.6M New $12.7M TOTAL $334.4M Commercial Taxable Value 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 45 Residential Taxable Value TYPE AMOUNT Existing $739.6M New $29.5M TOTAL $769.2M Note: numbers do not includes empty land $5 x 365 days = $1,825 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 46 Average Starbucks Drink $1.508M Home Equals Average Property Tax Bill o f $1,643 That’s $4.50 a d a y ! Sales Tax 3,510,500 39% Property Tax 1,205,205 13% Bldg Permits 2,137,121 24% Other Income 2,182,015 24% SALES & USE TAX REVENUES 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 47 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 48 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 $2.59 $2.27 $2.37 $2.74 $2.78 $3.58 $3.70 $3.86 $4.25 $4.42 $0.91 $0.40 $0.60 $1.34 $0.44 $0.44 $0.17 $0.22 $0.25 $0.20 $0.89 $0.34 $0.18 $0.75 $0.38 $0.30 $0.33 $0.52 $0.67 MillionsBase Sales Tax Economic Development Agreements Audit Payments Presumed One-time Payments Shown in millions 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 49 FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 $3.66 $3.79 $4.61 $3.66 $4.38 $4.73 $4.93 $4.61 $4.55 $4.95 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 50 VEHICLES •Fire Engine Pumper •Ambulance MAJOR DECISIONS/EVENTS OVER THE LAST 10 YEARS THAT HAVE IMPACTED US STAFFING •Market Adjustments •Staffing for development •Fire Dept 4 persons per shift CAPITAL PROJECTS •Fire Station Complex •Westlake Academy Expansion •Arts and Science Building •FM1938 Enhancements •Ground Storage Tank •Roads Projects OTHER •Lease for Town Hall building •Reinvestment in Stagecoach Hills •Phase I and II Waterline 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 51 1.Residential demands from staffing 2.Commercial demands from Public Safety services 3.Daytime and night time population = increase to service demand 4.General Fund revenues are “stretched” Why? No Elasticity •Sales tax over the last two fiscal years has not had the rate of growth seen previously •Property tax residential is increasing -commercial is not or is abated •WA operating budget is supported by Blacksmith and municipal income since FSP is flat. •Transfers out have continued at same pace or have increased. •Market adjustments and associated benefits are increasing. SECTION III Budget Overview By Fund Type 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 52 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 53 $9.0M Revenues 3% decrease of $324K $7.7M Operating Expenditures 7% increase of $499K $-2.2M N e t Tra n s f e rs I n & O u t 103% increase of $1.1M $-918K Net Change to Fund Balance 188% decrease of $1.9M $8.6M Ending Fund Balance •Sales Tax increased $200K •Property Tax decreased $265K •Bldg Permit Fees decreased $219K •Payroll increased 28K •Other Operating increased $70K •Transfers Out increased $956K 330 Operating Days 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 54 $11K Revenues 92% decrease of $140K $532K Maint/Replacement Projects 66% decrease of $1.0M $406K Transfers In 39% decrease of $260K $-113K Net Change to Fund Balance 84% increase of $620K $280K Ending Fund Balance •Contributions decreased $118K •Misc Income decreased $22K •Projects decreased $1.0M •Transfers In decreased $260K 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 55 $3.0M Revenues .3% decrease of $8K $1.1M Operating Expenditures 19% decrease of $261K $-1.9M Transfers Out 10% decrease of $231K $-84K Net Change to Fund Balance 85% decrease of $484K $1.0M Ending Fund Balance •Sales Tax increased $200K •Contributions decreased $120K •Misc Income decreased $86K •Eco Devo increased $100K •Services decreased $427K •A&S debt pymt $162K moved to DS •Transfers Out decreased $231K •Watching fund balance Debt payment for A&S Center was moved from Visitor Fund to Debt Fund $271K Revenues 188% decrease of $177K $2.4M Debt Service Payments 14% increase of $299K $2.2M Transfers In 17% increase of $141K $-5K Net Change to Fund Balance 77% increase of $18K $-0-Ending Fund Balance •Property Tax Revenues increased $177K •Debt Payment Increased due to Fire Station •Transfers In increased due to Fire Station 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 56 Revenue and Tax Supported Debt 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 57 $215K Revenues 88% decrease of $1.5M $10.3M Capital Projects 179% increase of $6.5M $1.7M N e t Tra n s f e rs I n & O u t 87% decrease of $11M $-8.3M Net Change to Fund Balance 172% decrease of $20M $5.8M Ending Fund Balance •Contributions decreased $1.5M •Projects increased $6.5M due to Fire Station project •Transfers In increased $895K •Other Sources decreased $12M From Capital Improvement Plan 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 58 $3.8M Revenues .3% decrease of $11K $3.4M Operating Expenditures 19% decrease of $798K $-156K Transfers Out 44% decrease of $122K $177K Net Change to Fund Balance 124% increase of $909K $726K Ending Fund Balance •Charge for Services increased $38K •Contributions decreased $50K •FW Water Waterline decreased $888K •PR Transfer Out increased $45K •Transfers Out decreased $122K •Water Rates •Hillwood •Fort Worth Water Line SECTION IV Financial Strategy Going Forward 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 59 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 60 1.Continue “as is” 2.Possible increase in Sales tax (is this likely?) 3.Possible growth in Property Tax base •Residential & Commercial –what’s going on here? 4.Decrease spending •Reduce transfers •Reduce staffing and service levels 5.Set GMR targets and CIP targets; establish, over time, an Ad Valorem tax rate that can support them 6.Some combination of the above 08/09/2017 Town of Westlake Municipal Budget Workshop Slide 61 COUNCIL DIRECTION