Richard M. Riebeling...special events, Paradise Ridge Community Center, Sevier Park, reopening of Main Library on Mondays • Small business incentive program 18. FY2015 • Total

FY2016 Budget PresentationRichard M. RiebelingFinance DirectorApril 30, 2015

Metropolitan Government of Nashville and Davidson CountyMayor Karl Dean

Mayor Dean’s Priorities

N   IGHBORHOODS

NEW AMERIC    NSPUBLIC    AFETY

EALTHOLUNTEERISM

EDUCATIO

ECONOMIC DEVE    OPMENTSUSTAINABI    ITY

TRANS T

NASHVILLE

2

FY2015 – Current Year Status

• Departments are operating within budget

• Rebuilt reserves

• Small growth in property tax base 

• Significant sales tax growth

• Maintained strong bond rating

3

FY2016 Budget Instructions

• Continued need to reduce expenditures ‐ 3% scenario

• Very Limited opportunity for funding improvements

4

Fy2016 Recommended Budget

$ 1,968,285,900

4.05% increase over FY2015

5

The BudgetA Historical Perspective

6

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

1.80

1.90

2.00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

1.11

1.23

1.311.35 1.35

1.44

1.511.56

1.57

1.54 1.52

1.59

1.71

1.81

1.89

1.97

FY01 to FY08 = 40.4% growthFY09 to FY16 = 25.4% growth

Amounts taken from Substitute Budget Ordinances as approved by Metro Council

Total Budget GrowthAmounts in billions

7

Schools Budget Growth

350

450

550

650

750

850

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

404.5

443.1477.6

502.9 510.5

542.3 563.2

591.5

620.8 620.8

633.3674.0

720.4

746.4

790.1

810.0FY01 to FY08 = 46.2% growthFY09 to FY16 = 30.5% growth

Amounts taken from Substitute Budget Ordinances as approved by Metro Council

Amounts in millions

8

Property Tax

400

500

600

700

800

900

1,000

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15B

udget

FY16B

udget

470

598 601 601 608

719

762 757774

791 781 789

891 912933

939

Amounts in millions

FY01 to FY08 = 60.9% growthFY09 to FY16 = 21.3% growth

9

Sales Tax

0

100

200

300

400

500

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15B

udget

FY16B

udget

237 232 231 240 250271

285 285

265 256 258

281301 315

325361

Amounts in millions

FY01 to FY08 = 20.4% growthFY09 to FY16 = 36.4% growth

10

Pension Funds

Actuarial Value of Assets

UnfundedLiability

Percent Funded

FY2008 $1,921,193,000 $222,951,000 89.60%

FY2014 $2,220,622,000 $467,873,000 82.60%

FY2015(Preliminary/Unaudited)

$2,450,131,000 $290,299,000  89.70%

11

Other Post Employment Benefit (OPEB) Obligations

Unfunded LiabilityFY2008 $2,220,200,000

FY2014 $2,457,200,000 

12

FY2009

• Total budget grew less than 1% over FY2008 

* GSD/USD operating budgets dropped by $21 million

• Department reductions ranged from 0% to 12%

• 40% reduction in internal service fee budgets 

• Improvements for Fire/EMS, truancy program, 

homelessness services and launched Community 

Enhancement Fund

13

FY2010

• Total budget was 2.2% less than FY2009 ‐ $27 million 

• Department reductions ranged from 0% to 16%

• Travel savings

• Fleet reductions

• Minimal improvements – benefits, contractual, MTA  

and Schools

14

FY2011

• Total budget was 1.2% less than FY2010 ‐ $18 million

• Department reductions ranged from 0% to 7%

• Debt restructuring – no property tax increase

• Improvements for contractual commitments, MTA, 

Hospital Authority, Fulton Campus operating costs, and 

crime lab start up costs.

15

FY2012

• Total budget increased 3.8% over FY2011 ‐ $62 million

• Departmental reductions ranged from 0% to 3%

• Crime lab, Madison Precinct, MTA, Goodlettsville Library 

and expansion of Limitless Libraries

• McCabe and Riverfront Parks operating costs

• Courthouse security transferred to Sheriff and inspector 

consolidation

16

FY2013

• Total budget increased 7.85% over FY2012 ‐ $124 million

• Department reductions ranged from 0% to 4%

• 53 cent property tax increase – $100 million of new 

revenue

• Improvements included COPS funding, Limitless 

Libraries, MTA, Parks, Public Works, fuel, and contractual 

increases

17

FY2014• Total budget increased 5.86% over FY2013 ‐ $103 million 

‐ Reappraisal year

• Department reductions ranged from 0% to 2%

• Retirement incentive – approximately 500 employees 

• Improvements included Madison Precinct, crime lab, 

special events, Paradise Ridge Community Center, Sevier 

Park, reopening of Main Library on Mondays

• Small business incentive program18

FY2015

• Total budget increased 4.4% over FY2014 ‐ $79 million

• Department reductions ranged from 0% to 3%

• Domestic Violence Enhancements – Opened JCAC

• Office of Public Guardian 

• Barnes Fund for Affordable Housing

• Bellevue Library, Commons Crossings, Lentz, Midtown 

Hills, Sevier Park, Parks custodial and grass mowing

19

Departmental Budget Savings

More than $75 million has been saved through 

budget reductions or organizational efficiencies 

since FY2009.

Equates to at least a 35 cents tax increase if 

these savings were not implemented.

20

FY2016 Recommended Budget

$ 1,968,285,900

4.05% increase over FY2015

21

Where the Money Comes FromAll Other Revenues

11.6%

Grants & Contributions

18.6%

Local Option Sales Tax

18.3%

Property Taxes47.7%

Fund Balance3.8%

22

Total Revenue Growth $75.2 million

• Property Taxes ‐ $6.0 million

• Local Option Sales Tax ‐ $35.6 million

• Grants and Contributions ‐ $13.9 million

• All Other ‐ $19.7 million

23

Recommended Use of Fund Balance

Fund

Appropriatedfor use in FY16 

Budget

Estimated June 30, 2016 Balance as a 

Percent of FY16 Budget

Estimated June 30, 2015 Balance as a 

Percent of FY15 Budget

OPERATING FUNDS:

GSD* General Fund $40,000,000 6.1% 6.0%

USD** General Fund $8,070,700 5.7% 8.6%

Schools Fund $16,000,000 5.5% 5.8%

DEBT SERVICE FUNDS:

GSD* Debt Service Fund $5,000,000 5.2% 5.5%

USD** Debt Service Fund $1,500,000 9.4% 10.0%

Schools Debt Service Fund $3,300,000 5.2% 5.6%

*GSD ‐ General Services District **USD ‐ Urban Services District

24

Fund Balance Usage

FY11 and FY13 are not included because no fund balance was used.

Amounts in millions

0

20

40

60

80

100

120

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY12

FY14

FY15

FY16

19.2 18.6

68.7

105.2

52.6

14.818.6 15.7

31.4

36.0

24.6

45.0

72.573.9

25

Year-End Fund Balances Operating Funds*

0

40

80

120

160

200

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14 FY15(Projected)

126.1121.1

70.759.7

53.7

81.9

107.6

86.274.9 86.3 87.6

124.8

148.1

124.8

166.7

26* GSD/USD/MNPS

Amounts in millions

Where the Money Goes

Education41%

Debt Service10%

Health & Social Services

4%

Infrastructure &

Transportation5%

General Government

13%

Recreation & Culture

4% Public Safety21%

Other2%

27

Where the Money Goes$76.6 million

• Debt Service ‐ $4.1 million 

• Schools ‐ $36.1 million

• FY15 and FY16 Pay Plan needs ‐ $23.6 million

• General Government ‐ $12.8 million*

* Net change after improvements and reductions

28

Operating Budget Savings

• Health ‐ $2,953,000

• IOD ‐ $2,151,400

• Pension ‐ $8,128,000

• Other ‐ $2,040,800

Total $15,273,200

29

Status Quo Budgets

• Most departmental operating budgets are 

status quo and received no reductions

30

Schools

FY2015 FY2016 Percent Change

DollarChange

Operating Funds 773,920,300  810,000,000  4.66% 36,079,700 

Debt Service Transfer 16,147,200  ‐ ‐100.00% ‐16,147,200

Total Budget 790,067,500  810,000,000  2.52% 19,932,500 

31

Pay Plan Increase HistoryFY2008 • 2% COLA and increments for eligible employees

FY2009 • Increments for eligible employees

FY2010 • None

FY2011 • 2% lump sum for full‐time staff, $2,000 cap

FY2012 • 1.5% lump sum for full‐time staff, $1,500 cap

FY2013 • 2% for department heads, SR13‐equivalent and upper grades• 4% increase for all other employees

FY2014 • 1.5% COLA for all employees including part‐time staff (effective Jan 2014)• Increments for eligible employees

FY2015 • Full funding for raises given in FY2014• 1% COLA and 2% open range (effective Jan 2015)• Market adjustment for positions deemed significantly below market (effective 

Jan 2015)• Increments for eligible employees

32

FY2016 Pay Recommendations

• Full funding for raises given in FY2015

• 2.5% COLA (effective July 1)

• Increments for eligible employees (effective increment date)

• Compression for certain public safety positions

• 2% Open Range (effective July 1)

33

Recommended Subsidies

There is no operating subsidy budgeted for: 

• Farmers’ Market

• Municipal Auditorium 

• State Fair

• Contractually, the Farmers’ Market lease payment discontinues in FY2016• State Fair and Farmers’ Market project to be self-supporting in FY2016

34

Hospital Authority

20

25

30

35

40

45

50

55

60

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

49.8

47.3

41.743.2 43.2

47.5

43.9

35.0 35.0

FY10 does not include $31 million loan which was forgiven

Amounts in millions

FY13 includes $4,292,400 supplemental and FY14 includes $5,227,100 supplemental 35

Metro Transit Authority

$3,643,000

• Charlotte Pike and Nolensville Road BRT lite

• Employee and benefit costs

36

Metro Transit Authority

0

5

10

15

20

25

30

35

40

45

50

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

18.2 17.5

19.123.0

26.3

29.433.4

36.4

40.0

Amounts in millions

37

Other Transit Requirements

• Regional Transit Authority 

$164,500 improvement for a total FY2016 

allocation of $320,200

• Commuter Rail subsidy is flat at $1,500,000

38

• Beer Inspector ‐ $56,900• Elections Poll Worker Pay/Staff ‐ $292,400• Fire Hall maintenance ‐ $150,000

Stations 19 and 20• Health ‐ $319,800

Animal control and dental services• Human Resources ‐ $182,100

Veterans’ outreach, domestic partner services and Diversity Advisory Committee recommendations

• ITS ‐ $2,417,300  Contractual increases, open data, software support, etc.

• Parks ‐ $1,412,400 Maintenance, mowing, custodial, etc.

Miscellaneous Improvements

39

• Public Library ‐ $1,401,900  Friday openings, integrated services with MNPS, annualizes funding for libraries opening in FY2015

• Public Works ‐ $1,261,200 Utilities, contractual increases, south convenience 

center and downtown recycling operating costs• Special events ‐ $802,200 Police and ECC

Miscellaneous Improvements

40

Office of Family Safety

• Creates new office to coordinate domestic violence services

• Will manage Jean Crowe Advocacy Center• Funding transfers from existing allocations• Small operating budget enhancement to establish 

department (e.g. office supplies)

41

Other Recommendations

• Barnes Fund for Affordable Housing ‐ $1 million – partially 

funded by Air BnB revenues

• Community Foundation – Digital Inclusion Project ‐ $100K

• Nashville Ballet ‐ $200K

• Nashville Technology Council ‐ $75K

• National League of Cities ‐ $500K

42

Legislation to Track with Budget

• Operating Budget Ordinance 

• Tax Levy Ordinance

• Urban Council Resolution

• Pay Plan Resolutions

• Property Tax Relief

• Litigation Tax for General Sessions Judges Salaries

• Office of Family Safety Ordinance

43

Annual Debt Report

BL2014‐696

The annual debt report will be emailed to 

Metro Council members today.

44

Outstanding Debt

Type of Bond Principal OutstandingJun 30, 2014 Jun 30, 2015

General Obligation $2,227,730,000  $2,124,090,000 Convention Center Authority $623,215,000  $623,215,000 Sports Authority  $157,060,000  $149,115,000 Water and Sewer  $796,685,000  $765,185,000 

45

Annual Debt Service Requirement 2006 – 2016

General Obligation Debt

11.26% 10.94% 10.93%10.55%

10.53%

5.51%

6.74%

7.42%

10.52%

11.19% 10.50%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

 ‐

 50,000,000

 100,000,000

 150,000,000

 200,000,000

 250,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USDSchoolsGSD% of Budget

46(As proposed)

General Obligation DebtAmounts in millions

500

1,000

1,500

2,000

2,500

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

FY29

FY30

FY31

FY32

FY33

FY34

FY35

Principal Balance

63.58% Paid in 10 Years

47

GO Commercial Paper

General ObligationTotal Combined Commercial Paper Program (in millions)

Traditional Commercial Paper $500 

Extendable Commercial Paper  $200 

Total Combined Program $700 

48

Capital Investments

49

Capital Investments

50

Capital Spending Plans*Amounts in millions

*Amounts do not include revenue funded projects

100

200

300

400

500

600

700

FY01

FY02

FY03

FY05

FY06

FY07

FY08

FY10

FY11

FY13

FY14

FY15

179.5

211.7

263.3

183.0

305.7318.7

240.6

560.8

250.0

407.7

300.0 275.0

No capital plan in FY04, FY09, and FY12FY13 had two capital spending plans

51

Capital Spending Plan

$520 Million

52

Capital Spending Plan

Schools $131 millionPublic Safety $172 millionParks and Public Works $123 millionOther $94 million

53

Proposed Bond Issuance

• Bond resolution to be filed authorizing up to $400 

million in late July

• Low interest rates

• Financial flexibility reduces outstanding commercial 

paper loan to approximately $100 million

54

Capital Spending PlanLegislation to Track with Budget

• Capital Improvements Budget Ordinance ‐May 15th filing

• Initial bond resolution authorizing up to $520 million

• Bond resolution authorizing sale of $400 million

55

For More Information Visit the Citizens’ Guide to the Metro Budget

www.nashville.gov/citizens_budget