2018 2019 Preliminary Budget May 22 2018 Timeline

2018 -2019 Preliminary Budget May 22, 2018

Timeline n n Council budget work sessions in April - June Adopt preliminary budget on June 26 th - State law requires adoption of Preliminary Budget on or before 3 rd Monday in July). The Preliminary Budget sets the maximum limits for expenditures. Adoption of the Final Budget on July 24 th – required by the first Monday in August. Adoption of the Property Tax Levy on August 14 th - deadline for the adoption of the property tax levy is the third Monday in August.

Preliminary Budget Assumptions n n n n 2% COLA included for employees ($38, 866) 1% Merit included for employees ($19, 433) ASRS retirement contribution rates increased to 11. 80% from 11. 50%. 3% health insurance premium increase. Workers Compensation Experience Modification decreased to 1. 02 from 1. 03. Property Tax Levy set at Arizona approved maximum level 52% Vehicle License Tax split to Streets (HURF) = $153, 700

Preliminary Budget Assumptions n n Budget to Budget State Shared Income Tax 1. 45% Decrease n n n FY 18 Projected to Budget 1. 45% Decrease (Due to State legislation decreasing Corporate income tax) Vehicle License Tax State Sales Tax HURF Tax Local Sales Tax Construction Tax 10. 12% Increase 7. 34% Increase 2. 52% Decrease 28. 26% Increase 55. 34% Increase 6. 91% Increase 2. 23% Increase 5. 00% Decrease 11. 40% Increase 27. 00% Increase

Preliminary Budget Assumptions n Public Safety Personnel Retirement System (PSPRS) contribution rate of 34. 36%, an increase of 14. 69%. n Reflected Legacy amortization to 30 years n Tier One: Officer Liability = 7. 65% Tier Two: Officer Liability = 11. 65% Tier Three: Officer Liability = 9. 94% n n Employer Liability = 12. 22% Employer Liability = 9. 94% n All Tiers require additional Legacy payment of 22. 14% n Policy to invest 40% of available Fund Balance in the General Fund to pay down PSPRS Unfunded Liability each year

Preliminary Budget Assumptions n Upcoming Transitions and Impacts of Staff Reorganization Approved During FY 2018 Budget Process n Upcoming Retirements n Utilities & Public Works Director - 6/1/18 n n n Administrative Services Director - 6/1/19 Town Manager-7 -1 -19 n n New Town Manager Hire Date – 6/1/19 New Positions Funded in FY 2018 and Fully Incorporated in FY 2019 Budget n n n New Utilities & Public Works Director Hire Date - 4/23/18 Accounting Technician Project Manager Funds reserved in Utilities funds to accomplish remainder of staff reorganization for Enterprise Funds in FY 2019

Preliminary Budget Assumptions n New Positions Included in FY 2019 Budget n n n Court Clerk (25 -hour Per Week Position, beginning July 1, 2018) $10, 000 in funding for Reserve Police Officers Police Officer (Half-Year Position with January 1, 2019 hire date) n Co-Location of Clarkdale Magistrate Court with Verde Valley Justice Court n Funding for both a Primary and General Election n Increased levels of funding for professional development to support training of new staff and to reinstate levels cut from previous budgets

General Fund Department Expenditures

General Fund Department Percentages Administration 8% Finance 5% Public Works 14% Town Clerk 3% Human Resources 3% Town Wide 8% Community Services 4% Police 35% Community Development 13% Court 7%

General Fund Revenues

Local Sales Tax Comparison $180, 000 $160, 000 $140, 000 $120, 000 $100, 000 $80, 000 $60, 000 $40, 000 $20, 000 $0 2017 2016 2015 2018 July $9, 274 $39, 490 108, 281 53, 092 August $106, 949 $70, 884 45, 525 55, 742 September $58, 544 $60, 234 64, 646 87, 163 October $59, 562 $67, 303 69, 848 140, 383 November December $91, 288 $78, 863 $75, 585 $108, 894 65, 512 99, 217 79, 434 91, 176 January $127, 654 $39, 718 59, 918 121, 486 February $61, 494 $71, 543 49, 378 76, 559 March $75, 737 $65, 007 71, 232 86, 694 April $81, 653 $80, 939 59, 831 124, 455 May $113, 829 $101, 132 84, 603 100, 000 June $132, 448 $167, 730 96, 957 100, 000

Verde River Raps

HURF – STREETS

Capital Projects

WASTEWATER O&M

WW PLANT EXPANSION & SYSTEM & EQUIPMENT

WATER OPERATION & MAINTENANCE

WATER CAPITAL IMPROVEMENT

SANITATION FUND

CEMETERY FUND

Fund Comparisons 4, 500, 000. 00 4, 000. 00 3, 500, 000. 00 3, 000. 00 2, 500, 000. 00 2, 000. 00 2017 -2018 -2019 1, 500, 000. 00 1, 000. 00 500, 000. 00 General Fund HURF Streets 2017 -2018 3, 806, 139. 20 706, 576. 69 2018 -2019 4, 263, 706. 43 814, 366. 75 Sanitation Operation 315, 000. 00 325, 000. 00 WW Water Capital Operation Improve (Includes DS) 244, 649. 99 721, 954. 52 859, 580. 06 1, 380, 890. 01 249, 917. 96 801, 533. 00 859, 127. 06 1, 453, 967. 35 Cemetery Fund

Fund Percentages Water O&M 16. 58% Capital Improve 9. 80% General Fund 48. 63% WW O&M 9. 14% Cemetery 2. 85% Sanitation 3. 71% Streets 9. 29%%

Non Operational Funds

DEVELOPER REIMBURSEMENT

GRANTS

DONATIONS

COURT ENHANCEMENT FUND

Summary n n n The Preliminary Budget will be brought back to the Council for adoption on June 26 th. Designated Funds represent $4, 495, 667 of the 2018 -2019 budget. Currently, the total 2018 -2019 budget is $16, 929, 785 which is a 5. 28% increase from the 2017 -2018 budget.

QUESTIONS ?