FY 2022 PROPOSED ANNUAL OPERATING & CAPITAL BUDGET

FY 2022 PROPOSED ANNUAL OPERATING &

CAPITAL BUDGET

Presented by:City Manager Peter Zanoni

July 27, 2021

FY 2022PROPOSED

BUDGETSUMMARY

(October 1st, 2021 thru September 30th, 2022)

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Budget Transparency

• 5 Budget Community Input Sessions Scheduled

• 1 Public Hearing on the Tax Rate, 1 Public Hearing on the Stormwater Fee & 1 Public Hearing on the Budget

Budget Community Input SessionsMeetings beginning at 6pm

1) Community Input Council District 1 –Monday, August 9, Hopkins Library

2) Community Input Council District 2 – Wednesday, August 11, Lindale Senior Center

3) Community Input Council District 3 – Thursday, August 12, Choke Canyon Room – Water Utilities

4) Community Input Council District 4 – Monday, August 16, Ethyl Eyerly Senior Center

5) Community Input Council District 5 – Wednesday, August 18, Veterans Memorial High School – Teaching Theater

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Budget Development

Budget Development Process

Office of Management and Budget in coordination with city departments establish base operating budget requirements and capital needs for the new fiscal year

Once the base operating and capital budgets are established, the City Manager meets with all department directors and their teams to review, refine and finalize the operating budgets and capital projects based on department’s professional recommendations and City Council priorities

Based on City Manager’s review and final recommendation, the Office of Management and Budget prepares the Proposed Operating and Capital Budget for City Council review and consideration

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FY 2022 Total City Budget $1.2 BillionGeneral Fund $258.3 Million

Enterprise Funds $238.3 Million

Special Revenue Funds $133.1 Million

Debt Funds $118.2 Million

Capital Budget $420.1 Million

$1.2 Billion

5

FY 2022 Proposed BudgetGeneral Fund (with transfers)

FY 2021 Adopted Budget$265.4 Million

FY 2022 Proposed Budget$298.4 Million

11.1%Increase

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FY 2022 General Fund Budget: $298.4 Million

24.4%Other

Departments$57.8M

Police & Fire

$144.8 M

Services, Fines & Fees, $82.9 M 28%

Fund Balance$13.2 M

4%

Other Resources

$47.6 M16%

Sales Tax$63.0 M

21%

Property Tax$91.7 M

31%Mayor & City Council

City Secretary

City Auditor

City Manager's Office

Intergovernmental Relations

Communication/Call Center

Legal

Finance

Office of Management & Budget

Strategic Planning & Innovation

Human Resources

Municipal Court

Neighborhood Services

Health

Library

Comprehensive Planning

Outside Agencies

Transfers

Reserve

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Revenue Sources

Growth over FY 2021Adopted Budget% Amount

Property Tax 6.0% $5.2M

Sales Tax 9.4% $5.4M

All Other Revenues 8.7% $10.5M

General Fund Revenue Growth

over FY 2021 Adopted Budget

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FY 2021 FY 2022

Property Values Growth 2.09% 6.97%

Tax Rate 0.646264 0.646264

Property Taxable Value

Growth & Rate

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• No change to FY 2022 Property Tax Rate

• Final 2 cent voter approved Residential Street Property Tax increase (M&O) - Not Recommended at this time

• Truth in Taxation calculation being finalized by Appraisal District and Tax Assessor/Collector – tax rate and revenues subject to change

Street Maintenance$42,857,995

Street Maintenance Fee (SMF)

$11,701,744

General Fund Revenue –

6%$14,926,344

Inter-Dept. Transfer

$4,205,553

Other: Interest,

Street Cut Fees, etc.

$ 7,887,982

Industrial District

$1,344,627

Regional Transportation

Authority (RTA)

$2,791,745

Arterials & Collectors

Reconstruction $60,188,554

General Obligation

Bonds $57,338,554

Type B Funds

$1,200,000Grants

$1,650,000

Residential Streets

Reconstruction$18,454,211

Industrial District

$1,344,627

Other: Interest, etc.

$845,625

2+2 cents Incremental Property Tax$8,495,705

One-Time General Fund

Transfer$6,116,254

General Fund Revenue -2/3 of 1%

$1,652,000

$121,500,760FY 2021-2022 Proposed Budget

Street Maintenance & ReconstructionFunding from 10 different sources

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Street Maintenance$32,545,000

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Arterials & Collectors

Reconstruction $65,130,474

Fiscal Year 2020

Arterials & Collectors

$70,700,000

Fiscal Year 2021Street

Maintenance$33,034,40

Fiscal Year 2022

Total: $128,365,000 Total: $ 121,500,760Total: $78,023,875

Arterials & Collectors

$70,700,000

Residential Streets

$25,120,000

Street Maintenance$33,034,480

Arterials & Collectors

$34,200,000

Residential Streets

$10,789,395

Street Maintenance $ 42,857,995

Arterials & Collectors

$60,188,554

Residential Streets

$18,454,211

56% increase in Streets for FY 2022

Nearly $328M in three years

Streets FY 2022Additional funding from the General Fund for

Residential Streets ($6.1M)

Street rehabilitation paving crew composed of 12 positions and new equipment ($2M)

Safe Route to School Program will rehabilitate citywide sidewalk infrastructure near education

centers ($750K)

Vision Zero enhancements and Internally Illuminated LED Street Name Signs ($880K)

Infrastructure improvements along Northwest Blvd (FM 624)-median, ditches, etc. ($150K)

Funding for a comprehensive pavement evaluation survey of the City’s streets and roadways ($1M)

Purchase of 11 vehicles to modernize and expand Street fleet ($2.4M)

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Police FY 2022Funding for ten new Police Officer positions ($1M)

New Police Academy scheduled for July 2022 ($1.1M)

Replace 250 in-car mobile data computers for Police, Fire, Animal Control and Airport Police ($2M over two years)

Upgrade to Public Safety Computer Aided Dispatch (CAD) and Record Management System (RMS) for Police, Fire, EMS, Code Enforcement,

Animal Control, Airport Police ($840K)

Storage and servers for the public safety body camera and in-car video systems ($215K)

Phase 3 Radio payment for 854 radios at 0% interest final year ($1.2M)

Outright purchase of five additional Police marked vehicles ($250K)

Crime Scene mapping drone package ($25K)

Design and Construction of a new Police Academy Complex at Del Mar South campus ($21.3M over three years)

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Fire FY 2022Funding for eight new fire fighter positions to create

additional Medic Unit placed at Station 17 (Yorktown) ($500K)

New Fire Academy scheduled for January 2022 ($1.5M)

Truck Replacements of: Three Medic Units and one Fire Pumper Truck– Lease Purchase

Outright purchase of an additional Medic Unit, Potable Water Tanker Truck and Hazmat Material Response Unit

($2.3M)

$400K increase in the City’s financial contribution to the Firefighter retirement system

Design and Construction of a replacement Fire Station # 3 located on Morgan Ave ($9M over three years) 14

Parks & Rec FY 2022Funding for park amenities at Labonte, Lindale, Billish, Parker, Salinas, Bill Witt

and Lakeview Parks ($1.5M)

New Dog Parks at Sherwood and West Guth Parks ($900K)

New splash pad in Cole Park ($500K)

Funding for Cole Park Pier Maintenance ($150K)

Veterans Memorial Park monuments design in Sherrill Park ($100K)

Addition of a Landscape Architect in lieu of outside contracts ($100K)

Addition of eight swim instructors to expand the summer swim instruction program ($26K)

Purchase of 16 vehicles to modernize the Park & Beach operations fleet utilizing SHOT funds ($1.6M)

Funding for additional 230 shade trees throughout City Parks ($225K)

Demolition of old Cunningham WTP last used in the 1980’s and a Master Plan for Labonte Park that incorporates the land into a new City gateway park

($5.3M)15

Type B Fund

Will be working with Type B Board of Directors to request funding in August workshop for economic development initiatives and ecotourism park improvements

Type B is forecasted to have $10M in fund balance in FY 2022

Proposed initiatives and improvements are as follows:

Gateway signage on IH37Monument signage at Labonte ParkKayak launch pad at Labonte ParkNight-time Lighting at new Executive 9-hole golf

course at Lozano Golf CourseAmenities at Ocean Drive chain of parks (Cole,

Ropes, Oleander, Doddridge, Swantner, Palmetto and Poenisch) 16

Marina FY 2022Marina Breakwater assessment ($560K)

Funding for the reconstruction of Peoples Boardwalk ($3.1M)

Funding from the General Fund and Insurance Proceeds for Marina Dreading ($5M) as part of the

pier replacement project

Replacement of fencing and gates at the dry storage area, replacement of large roll up door on the Haul

Out Facility ($130K)

Replacement and additions of signs throughout the Marina ($82K)

Two dockhand positions to support the 24/7 Marina operations ($123K)

Marina Master Plan ($100K)17

Bayfront FY 2022Upgrades to Seawall and Miradors lighting

($1M)

Seawall event programing ($100K)

Facility Improvements to the Art Center and Art Museum ($3.5M)

Phase 1 design for Art Center Revitalization being developed by the Board of Governors

($50K)

Repairs and restoration of the Water Garden water feature ($4.5M)

Downtown investment total $2.3M in FY 2022 Budget with Tax Increment

Reinvestment Zone # 318

Neighborhood Services FY 2022Two additional live release coordinators ($90K)

Four full time Animal Care Kennel Techs and addition of two new vehicles ($92K)

Additional Veterinarian position to increase treatment and live release rate ($100K)

Space/Programming design study at Animal Care campus to modernize for live release and overall better customer service ($50K)

Five additional neighborhood Code Enforcement Officers, three funded by General Fund and two by CDBG grant brings strength to 28 officers

($430K)

Additional funding for demolitions of dangerous structures for the proposed sudden acts policy ($250K)

Tablet replacement for Code Enforcement Officers ($93K)

Funding for fee waiver for non-qualifying infill housing properties ($100K)

Legal fees for City Council Redistricting ($50K) 19

Library FY 2022

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Assessment and initial improvements to exterior

at La Retama Central Library ($250K)

Increase to building maintenance to all six

libraries ($120K)

Communication FY 2022

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Citywide website and portal upgrade to enhance the experience of the viewing

public ($500K)

Four additional call center representatives for the new 311 call center to address

increased call volume ($170K)

Additional Social Media Public Information Officer to assist all

departments with Social Media posts and graphics as well as a City Photographer

position to be available for all City events ($136K)

Auditor FY 2022

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Addition of one Senior Auditor Position and one

Audit intern ($127K)

Solid Waste FY 2022No Residential Rate increase for FY 2022

Addition of two positions for Litter Crew to collect litter along major corridors ($145K)

Addition of four positions and garbage trucks to create two new garbage and one recycle route to better

serve our growing community ($99K two months of funding)

Addition of four positions and equipment to create an additional Brush and Bulky Crew ($155K four months of funding)

Purchase and install of eight Onboard Truck/Trailer Mounted Scale Systems in order to control gross

vehicle weight ($128K)23

Hotel Occupancy Tax (HOT)

HOT Revenues BudgetFY 2021 FY 2022 Variance$15.5M $16.4M $0.9M

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FY 2022 HOT budget includes the following initiatives:

Citywide Wayfinding Signage ($500K)

Fully funded support for the Science & History Museum ($550K)

North Beach Plaza Historical Signs ($100K)

Convention and Visitors Bureau funding for FY 2022 is $5.6M

Arena & Convention

Center

Key focus area for FY 2022

New leadership at ASM Global

Operating and Capital costs (including debt) supported by Sales Tax and HOT funds total $18.9M

Revenues from events total $4.5M25

Development Services FY 2022

Development Services building 1st & 2nd floor remodeling ($4.75M)

Addition of two Building Inspector positions to perform trade inspections

($218K)

Addition of three Compliance Inspectors to perform non-scheduled

building code technical compliant inspections ($327K)

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Development Services

Fees

Based on the current construction cost index, Development Services fees are approximately 40% behind where they should be. Fees have not been adjusted in over a decade. Proposed fee adjustments are as follows:

Adjustment to 46 existing feesAddition of 36 new feesElimination of 12 feesIncrease all other fees by 20%

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Airport FY 2022Capital Improvements to the CCIA

Terminal Building to Replace Passenger Boarding Bridges, construct new Service

Animal Relief Area, Renovation of all bathrooms and an addition of a Nursing Room ($11.7M over the next three years)

Expansion of Public Cell Phone Lot to ease traffic congestion along terminal curb

($700K)

Four Parking Operations positions to support in-house paid parking lot operations

($207K) 28

Water FY 2022Addition of two positions to take over the backflow prevention

program from Development Services ($150K)

Addition of two positions to improve customer service and strategic planning ($560K)

Additional two positions for the Mary Rhodes Pipeline for maintenance, repairs and line locating ($95K)

Funding for water storage tanks exterior maintenance and to meet regulatory requirements ($1M)

Capital Improvements investment of $145M over the next three years with $25M in FY 2022 to rehabilitate and upgrade

O.N. Stevens Water Treatment Plant

Capital Improvements investment of $112.5M over the next three years with $39M in FY 2022 to replace and repair water

lines citywide 29

Wastewater FY 2022Addition of eight position for Wastewater

Treatment Plant preventative maintenance activities ($760K)

Purchase of eight vehicles & machinery to modernize the Wastewater fleet ($620K)

Capital Improvements investment of $118.1M over the next three years to repair, rehabilitate and upgrade all six Wastewater Treatment Plants with $34.8M in FY 2022

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StormwaterObjectives of a New Stormwater Fee• Stable revenue stream to properly maintain and increase services

to the system to include capital improvement projects• Remove stormwater from the water rate to create financial

transparency • Create a fair fee structure for stormwater management that is tied

to drainage runoff

Basis of Fee Structure• Residential:

• Tier 1 = < 3,000 Square Feet of Impervious Area• Tier 2 = 3,000 - 4,500 Square Feet of Impervious Area• Tier 3 = > 4,500 Square Feet of Impervious Area

• Non-Residential: No tiers; fee based on lot size, intensity of use and amount of impervious area

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Stormwater 5-Year Program

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FY 2022 FY 2023 FY 2024 FY 2025 FY 2026

Base Program $ 15,748,563 $ 17,765,684 $ 22,276,842 $ 26,387,575 $ 29,393,203

Improvements $ 2,007,882 $ 4,511,158 $ 4,110,733 $ 3,005,628 $ 2,611,250

Total $ 17,765,684 $ 22,276,842 $ 26,387,575 $ 29,393,203 $ 32,004,453

Monthly FeeResidential Rate

Tier 1 $4.59 $5.61 $6.61 $7.33 $7.94

Residential RateTier 2 $6.12 $7.48 $8.81 $9.77 $10.58

Residential RateTier 3 $10.71 $13.09 $15.42 $17.10 $18.52

Non-ResidentialRate

$6.12/per each ERU*

$7.48/per each ERU

$8.81/per each ERU

$9.77/per each ERU

$10.58/per each ERU

*Equivalent Residential Unit (ERU)

Stormwater ImprovementsFY 2022• Street Sweeping- Increase Arterials from 4 to 8 times a year• Additional Channel and Ditch Maintenance Crew – Increases to 2 Crews• Stormwater Utility Fee Team – Resolution and Utility Assistance Program• ID/IQ Construction Contract- William Ditch and Glenoak Dr.• Stormwater System Televising and Inspections ProgramFY 2023-2026• Street Sweeping- Transitioning Total Program to In-House and increasing

residential from 2 to 4 times a year• Additional Inlet Cleaning and Inspection Crew – Increased Cleaning Cycles

from 3 to 2 years• Additional Channel and Ditch Maintenance Crew – Increases to 3 Crews• Vegetation Maintenance – Herbicide and Mowing Improvements• ID/IQ Construction Contract – Bridge, Channel and Infrastructure

Rehabilitation• Creek Monitoring and High Water Detection System• Continued Bay Water Quality Improvements

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Gas FY 2022Seven positions to support the meter replacement program

($650K)

Eight positions to support infrastructure replacement

program ($760K)

Purchase of 17 vehicles & machinery to modernize the

Gas fleet ($970K) 34

Utility

Rates

Wastewater – Proposed monthly rate increase to go into effect in January 2022 of $1.97 for a typical residential customer with a 5000-gallon winter quarter average

Water – Proposed monthly rate decrease by $6.12 to go into effect in January 2022 offsetting Stormwater Fee for typical residential customer using 6000-gallons of Water a month

Stormwater – New monthly Stormwater fee proposed to go into effect in January 2022, typical residential customer is $6.12

Gas – No proposed rate change 35

Net Impact - $0 (Zero Dollars)Gallon of Water

per MonthNumber of Customers

Percentage of Customers

Bill in 2021

Bill in 2022 Change

Average Residential Water Customer 6,000 47,214 54% $45.18 $39.06 - $6.12

Average Residential Stormwater Customer $0 $6.12 $6.12

Total $0

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Senior, Disabled & Low Income

Utility Assistance Program

For FY 2022 program to provide rate increase relief for customers that use 2000-gallons or less of water per month that will consider:

Low income

Seniors 65 and older who are low income

Disabled customers

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Employee Health Benefits in FY2022

Fire’s medical insurance premiums projected to decrease by 8.6% on both Fire PPO and Fire CDHP plans (Savings of $600K)

Police’s city funded medical insurance premiums projected to decrease on average 25.6% (Savings of $1M)

Civilians’ medical insurance premiums projected to have a small increase of 3% forCiticare Value PPO Plan and no increase for Citicare CDHP plan

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FY 2022 Capital Budget $448.9 Million

Funding Uses by Program Amount% of Total

Water $111.9M 24.9%

Streets (Less Utility Support) $84.2M 18.8%

Wastewater $80.1M 17.8%

Stormwater $58.1M 12.9%

Parks & Recreation $45.8M 10.2%

Public Health & Safety $39.5M 8.8%

Airport $11.2M 2.5%

Gas $10.3M 2.3%

Public Facilities $7.8M 1.8%Total FY 2022 Capital Uses $ 448.9M 100%

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FY 2022 Budgeted Positions

0

500

1000

1500

2000

2500

3000

3500

4000

FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

2,316 2,298 2,456 2,534 2,676

414 414414 414

422446 446451 456

466

Civilian Employees Firefighters Police Officers

• Addition of 12 positions in Streets for Street rehabilitation paving crew

• Addition of 10 Police Officers• Addition of 8 Fire Fighters• Addition of 4 Kennel Technicians, 2 Live Release

Coordinators and 1 Veterinarian• Addition of 5 Code Enforcement Officers• Addition of 1 Grant Writer in Finance• Addition of 8 positions in Wastewater for

Treatment Plants maintenance• Addition of 14 positions to create a Ditch &

Channel Maintenance Crew and 2 positions for the In-House street sweeping in Stormwater

• Addition of 15 positions in Gas to support the meter replacement and infrastructure replacement programs

3,176

3,404 3,5643,3213,158

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NextSteps

City Council Budget Workshops

(August 5th, 12th, 19th, 26th)

Budget and Tax Rate Adoption(1st reading August 31st

2nd reading September 7th)

Budget CommunityInput Sessions

(August 9th, 11th, 12th, 16th, 18th)

Public Hearings(Tax Rate - August 31st)

(Stormwater Fee - August 31st)(Budget – August 31st)

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FY 2022 PROPOSED ANNUAL OPERATING &

CAPITAL BUDGET

Presented by:City Manager Peter Zanoni

July 27, 2021