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Budget WORK SESSION fiscal year 2019

This budget session for the City of Mustang's fiscal year 2019 focuses on projected sales tax revenue growth and expenditure changes in various funds. The General Fund, Impound Fee Fund, Park Improvement Fund, Alcohol Enforcement Fund, and Library Fund are discussed, along with their projected revenues, expenditures, and ending fund balances. Key areas of focus include sales tax revenue growth, expenditure changes for staff, pension funds, health insurance, and park improvements.

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Budget WORK SESSION fiscal year 2019

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  1. Budget WORK SESSIONfiscal year 2019 City of Mustang “The only thing worse than being blind is having sight but no vision.” Helen Keller

  2. General Fund • Projected Beginning Balance $ 2,150,000 • Projected Revenues $23,458,380 • Projected Expenditures ($23,532,977) • Projected Ending Fund Balance $ 2,075,403

  3. General Fund – Revenue The General Fund is the City’s primary operating fund and the source of day-to-day operations. The General Fund is significantly reliant on sales tax revenues for operations. It is used to account for all activities except those legally required to be accounted for in other funds. • Staff has projected sales tax revenue to increase by 2.5%. Sales and use tax are both running alongside with last year’s receipts and trending upwards. • The City is projected to experience steady sales tax growth primarily due to online groceries, restaurants, commercial development and new housing starts. • Starbucks opened April 30, 2018. Hampton Inn and Suites by Hilton is also nearing completion.

  4. Projected Sales Tax Revenue • FY 13 $ 8,340,520 • FY 14 $ 9,160,774 • FY 15 $ 9,708,037 • FY 16 $ 9,926,248 • FY 17 $10,149,750 • FY 18 $10,600,000 (projected year to date as of 5/7/2018) • FY 19 $10,854,000 (proposed FY19 budget)

  5. General Fund – Expenditures

  6. General Fund – Expenditure Changes Financing the City’s operations. • FY 2018-19 budget includes a summer intern for City Management, new police recruit and new firefighter. • Pension Funds (No Change) - Oklahoma Municipal Retirement Fund (11.79%), Police (13%), and Fire (14%). • The FY 19 Budget includes step increases for all eligible employees. A 2% stipend will be given at mid-year for civilian employees (if actual revenues exceed projected revenues). • Included in the budget is a 1.5% COLA (in October & March) for police union employees (per Collective Bargaining Agreement). A 2% COLA in July plus wage schedule changes for lieutenant and captain positions for fire union employees (per IAFF Agreement).

  7. General Fund – Expenditure Changes • Budget includes a plan rate increase for premiums that include employees plus children (of 2.5%) and spouse (of 12.1%). • The national average is between 9-19%. Once again, this is the beneficial result of joining the Oklahoma Public Employees Health and Welfare Consortium. • Total health insurance cost increase is $108k. The City is NOT passing this increase on to City employees.

  8. General Fund Reserve The General Reserve Fund was established by Resolution 06-017. Original funding was deposited from other funds for maintenance of city facilities, infrastructure, and other capital purchases. Ordinance No. 1105 was approved on July 15, 2015 to levy a tax of (5%) on the rental of hotel and motel rooms within the City limits. All taxes collected shall be deposited into the City’s General Fund. The City Council shall determine on a yearly basis the use of the room tax funds. Hampton Inn & Suites by Hilton is nearing completion of a 4-story hotel with approximately sixty-five rooms. • Projected Beginning Balance $ 20,000 • Projected Revenues $ 40,060 • Projected Expenditures $( 0) • Projected Ending Fund Balance $ 60,060

  9. Impound Fee Fund Impound fee of $100 was established on May 8, 2014 (Ordinance No. 1102). Funds are restricted for dispatch, jail, records clerks, training, and enforcement of traffic safety. Reference budget pg. 98 for expenditure detail. • Projected Beginning Balance $ 15,000 • Projected Revenues $ 30,110 • Projected Expenditures $( 14,500) • Projected Ending Fund Balance $ 30,610

  10. Park Improvement Fund The Park Improvement Fund is used to account for the revenue received from business licenses ($15 per license) required by Ordinance; $20 fines/bonds collected; and park fees from subdivisions. Funds are restricted for improvements to and development of the park system. • Projected Beginning Balance $ 15,000 • Projected Revenues $ 63,055 • Projected Expenditures $( 49,000) • Projected Ending Fund Balance $ 29,055

  11. Park Improvement Fund • New Playground Equipment at Meadows Park $ 30,000 • Playground Maintenance & Repairs 6,000 • Park Signage at Wild Horse Park 7,000 • Irrigation and Signage at Brittany’s Park 6,000 TOTAL PROJECTS - $ 49,000

  12. Alcohol Enforcement Fund On June 4, 2013, Ordinance No. 1087 established the Alcohol Enforcement Fund to account for $50 of each alcohol-related fine. Funds are used to enforce laws relating to juvenile access to alcohol and other intoxicating substances. Reference budget pg. 111 for expenditure detail. • Projected Beginning Balance $ 4,000 • Projected Revenues $ 3,015 • Projected Expenditures $( 0) • Projected Ending Fund Balance $ 7,015

  13. Library Fund The Library Fund is used to account for restricted state grant agreements and fines generated as a result of overdue library materials. Funds are used for library operations, local programs, and capital purchases. • Projected Beginning Balance $ 6,000 • Projected Revenues $ 13,260 • Projected Expenditures $( 13,260) • Projected Ending Fund Balance $ 6,000

  14. Traffic Enforcement Fund In 2006, Ordinance No. 920 established the Traffic Fund, amended by Ordinance No. 1146, April 18, 2017. Any person convicted in a traffic offense shall pay the court $20 as a separate fee. Funds are for the sole purpose of the purchase of police equipment, specialized training of law enforcement officers and programs to enforce state and local traffic laws. Reference budget pg. 122 for expenditure detail. • Projected Beginning Balance $ 30,000 • Projected Revenues $ 50,055 • Projected Expenditures $(24,000) • Projected Ending Fund Balance $ 56,055

  15. Employee Flex Spending Fund The City offers its employees a Flexible Spending Program, which is allowable under Internal Revenue Code, Section 125. The program allows employees to deposit a portion of their pre-tax income into the account maintained for health care expenditures. • Projected Beginning Balance $ 3,800 • Projected Revenues $ 4,000 • Projected Expenditures $( 4,000) • Projected Ending Fund Balance $ 3,800

  16. Park & Recreation Donation Fund The Parks & Recreation Donation Fund is used to account for specified donations that are restricted for the use of park and recreational events/projects. • Projected Beginning Balance $ 8,000 • Projected Revenues $ 30,030 • Projected Expenditures $( 30,000) • Projected Ending Fund Balance $ 8,030

  17. Police Technology Fee The Police Technology Fee of $25 per citation is used to account for electronic fingerprinting, E-ticketing solutions, computers and wireless connection costs for police vehicles and ongoing technology maintenance. Ordinance No. 1146 was established on April 18, 2017 (legislative restriction). • Projected Beginning Balance $ 38,000 • Projected Revenues $ 72,030 • Projected Expenditures $( 60,120) • Projected Ending Fund Balance $ 49,910

  18. Street/Drainage Fund The Street/Drainage Improvement Fund is a special revenue fund used to account for the proceeds of specified revenue sources that are restricted or committed to expenditures for street projects and repair. FY 2019 projects: Engineering $10,000 Silver Star – Maintenance Caps $60,000 Signalization (E. Plantation Terrace & Mustang Rd) $116,000 TOTAL: $186,000 • Projected Beginning Balance $ 825,000 • Projected Revenues $ 153,100 • Projected Expenditures $( 186,000) • Projected Ending Fund Balance $ 792,100

  19. Personal service (10% public safety personnel) Mustang citizens voted on August 23, 2016 to extend the 4th penny sales tax for a 13-year period. The Personal Service Fund collects 10% of the 4th penny sales tax which is restricted for personnel costs associated to public safety. • Projected Revenues $ 40,000 • Projected Beginning Balance $ 272,000 • Projected Expenditures $(272,050) • Projected Ending Fund Balance $ 39,950

  20. Police narcotics enforcement The Police Narcotics Enforcement Fund is used to account for fines and fees restricted for the sole purpose of funding equipment and drug testing kits, education, training and scientific development of police personnel and canine development. Ordinance No. 1161 was established on April 3, 2018 to remit monies collected ($100 drug analysis fee for possession of controlled dangerous substance) to the Police Narcotics Enforcement Fund. • Projected Revenues $ 1,000 • Projected Beginning Balance $ 5,020 • Projected Expenditures $ (5,000) • Projected Ending Fund Balance $ 1,020

  21. Debt Service Fund The City Debt Service Fund is used to account for ad valorem taxes levied for use in retiring general obligation bonds, court-assessed judgments, and their related interest and fiscal agent fees. In State law, this fund is referred to as the Sinking Fund. The 2012 General Obligation Bonds funded the Ball Field $1.550M and Town Center Expansion $2,050M projects. • Projected Revenues $ 200,000 • Projected Beginning Balance $ 316,020 • Projected Expenditures $(301,400) • Projected Ending Fund Balance $ 214,620

  22. Limited Purpose Fund The Limited Purpose Fund is a capital project fund used to purchase capital outlay, including the acquisition or construction of capital facilities, or other capital assets. The restricted 3rd penny sales tax collected in excess of debt payments are restricted for sanitary sewer facility, water systems, and capital projects (Ordinance No. 532). Resolution 15-058 amended 05-027 to read ‘10% of sales tax revenue received in excess of $800,000 per month’. • Projected Beginning Balance $ 1,148,000 • Projected Revenues $ 1,389,100 • Projected Expenditures $(1,012,724) • Projected Ending Fund Balance $ 1,524,376

  23. Limited Purpose Fund - Capital Outlay Spending • City Management – desktop standing desk ($300), (8) cameras for City Hall ($5,000), Legislative Management Software ($4,608); • Library – Dual Book Return with card ($8,500); • Parks and Recreation – Cardio equipment for TC expansion($67,879), weight room equipment ($11,943), sound system in aerobic fitness room ($5,100), installation of data lines & drops for fitness equipment, TV, computer & Wi-Fi ($7,680); furniture & equipment for new rooms, concessions, babysitting area, fitness room & cashier station ($24,000), replacement of vinyl section of current gymnasium divider ($5,500), bleachers for rodeo grounds ($85,000); • Town Center – new HVAC units/parts ($40,000), auto scrub for floors ($7,000); • Ball Complex – (7) new toilets @ softball restroom ($3,500), dugout cover for baseball ($66,000); • Finance – Epson receipt printer ($300); • Community Development – HP desktop computer ($1,359), (2) Samsung Galaxy tablets ($681);

  24. Limited Purpose Fund - Capital Outlay Spending CONT’D • Police – replace slider motors in jail ($16,398), replace back-up system battery ($38,785), boiler replacement ($38,000), 2017 lease-purchase agreement ($46,693), 2018 lease-purchase agreement ($77,290), NEW 2019 lease-purchase agreement ($37,670); • Animal Welfare – truck with up fit & box ($36,100), (2) tablets ($7,000); • Fire – new aerial ladder/platform lease-purchase agreement ($129,145), airvac-911 exhaust removal ($50,000), PPE/hose drying cabinet ($9,000), Ge Tac overage ($13,516), MFD server ($6,777); • Street Division – concrete repair on Highland Drive ($16,000), repairs to ditch area on SW 89th Street ($6,000), additions to Street Maintenance building ($25,000), additional sidewalks ($20,000), concrete panel replacement, as needed ($30,000); • Water Division – Resolution 05-027 infrastructure ($65,000) – regular & flow water meters; • Sub-total of Capital Requests ($1,012,724) • Reserves for fund balance ($1,524,376) • Fund Total - $2,537,100

  25. 2017 Note July 11, 2017, the City issued the Utility System and Sales Tax Revenue Note, Series 2017 in the amount of $11,615,000. Projects funded by the 2017 construction note: Public Safety – Emergency Operation Center (construction), upgrade dispatch system, public safety vehicles & equipment, and Animal Shelter Road & Streets – SW 89th Street widening (partial funding), Sara Road widening, and overlay residential streets Quality of Life – Town Center Expansion (partial funding), splash pad, (2) soccer field lighting, and Mustang Market Place • Projected Beginning Balance $ 316,000 • Projected Revenues $ 948,000 • Projected Expenditures $(943,700) • Projected Ending Fund Balance $ 320,300

  26. 90% Capital Excess (4th penny) Mustang citizens voted on August 23, 2016 to extend the 4th penny sales tax for a 13-year period. The 90% Capital Excess Fund collects the 90% allocation of revenues after the 2016 & 2017 debt service payments. The 4th penny excess is restricted to the below categories: º Public Safety º Infrastructure º Road & Streets º Quality of Life • Projected Beginning Balance $ 330,000 • Projected Revenues $ 319,000 • Projected Expenditures $( 120) • Projected Ending Fund Balance $ 648,880

  27. 2016 Series Revenue Note In October 2016, the City issued the Utility System and Sales Tax Revenue Note, Series 2016 in the amount of $13.385m. The following projects are funded with the 2016 Notes: Public Safety – Design of the Emergency Operation Center Infrastructure – WWTP Phases C&D Road & Streets – SW 89th Street Widening (partial) Quality of Life – All Inclusive Playground & Town Center Expansion (partial) • Projected Beginning Balance $ 400,000 • Projected Revenues $ 1,183,000 • Projected Expenditures $( 1,181,400) • Projected Ending Fund Balance $ 401,600

  28. 2014B Series Revenue Note In December 2014, the City issued the Series 2014B and pledged the net utility revenues and four cents of sales tax. The 2014B Note of $7,985,000, with Branch Banking and Trust Company (BB&T). Projects Included: S. Mustang Road – widening WWTP – Phase A&B Water Quality • Projected Beginning Balance $ 40,000 • Projected Revenues $ 851,500 • Projected Expenditures $ (785,710) • Projected Ending Fund Balance $ 105,790

  29. Mustang Improvement Authority The Mustang Improvement Authority (MIA) was created June 4, 1963 to finance, develop and operate the water, sewer and solid waste activities. These activities are financed primarily by user charges and similar to the private sector. This fund accounts for activities of the public trust in providing water, wastewater, sanitation, and recycling to the public. • Projected Beginning Balance $ 2,700,000 • 2014B Restricted Carryover $ 3,492,000 • 2016 Restricted Carryover $ 10,513,000 • 2017 Restricted Carryover $ 10,676,450 • Projected Revenues $ 19,770,750 • Projected Expenditures $(19,770,750) • 2014B Construction Loan Projects $( 3,492,000) • 2016 Construction Loan Projects $(10,513,000) • 2017 Construction Loan Projects $(10,676,450) • Projected Ending Fund Balance $ 2,700,000

  30. Mustang Improvement Authority - Revenues

  31. Mustang Improvement Authority - Expenditures

  32. Risk Management Fund The Internal Service Fund (Worker’s Compensation Fund) is used to account for self-insured worker’s compensation claims. • Projected Beginning Balance $ 515,000 • Projected Revenues $ 129,500 • Projected Expenditures $(222,000) • Projected Ending Fund Balance $ 422,500

  33. MIA Reserve Fund The MIA Reserve Fund is used for maintenance, infrastructure, and capital purchases for the enterprise funds. On an annual basis 33 1/3% of the connection fees will be appropriated for operating and maintaining utility systems, and 66 2/3% of connection fees for expanding and upgrading water and sewer utilities. Ordinance No. 1106 added $4.50 per month for each utility account for capital improvements to water and wastewater facility and line maintenance and construction. FY2019 Capital Projects: Engineering $20,000, Infra-mark Capital $50,000, sewer line root control $20,000, camera work for sanitary sewer $20,000, new sewer line (N. of Wal-Mart) $150,000 • Projected Beginning Balance $ 224,000 • Projected Revenues $ 396,000 • Projected Expenditures $(260,000) • Projected Ending Fund Balance $ 360,000

  34. MIA Reserve Fund - CONT’D • Since October 1, 2015, $4.50 Capital Improvement Fee has collected $1.289M. • Funded Projects of $1.237M: • 59th Street Water Line Relocation (partial) • County Line (Chlorine Room) • Meadow Lane Sewer Line Rehabilitation • WWTP – Repairs & Maintenance • Repairs, Maintenance & Restore Wells #1-13 • Mustang Water Tower Rehabilitation, Rebuilding, Discharge & Repair Water Pumps • SCADA Improvements – Water & Wastewater • Magnetic Flow Meter & Meter Replacements, & Water Level Monitoring • Repairs to 74th Booster Station, Rockwell Booster Station, Lift Stations 4 & 5 • Root Control, Clean & Camera Work (Sewer Lines) • Diesel Generator & Electrical Switch

  35. Sewer Impact Fund The Sewer Infrastructure Impact Fund is used to account for fees established per house top to developers. Funds are used to pay the Series 2009 Clean Water SRF Note to OWRB dated June 8, 2009, maturity date May 15, 2030 and future indebtedness. • Projected Beginning Balance $845,000 • Projected Revenues $444,000 • Projected Expenditures $(363,280) • Projected Ending Fund Balance $ 925,720

  36. 2013 Refinancing (1998A|B) Fund The City pledged future net water and sewer revenues and (3rd penny) one-cent sales tax to repay the 1998 Revenue Bonds Payable. Proceeds from the bonds provided financing for utility system capital assets. The bonds were defeased in April 2013, funded by the issuance of a refunding private placement note, with the pledged revenues assumed by note holder. The 2013 note will be paid off December 2018. • Projected Beginning Balance $ 70,000 • Projected Revenues $ 297,000 • Projected Expenditures $ ( 355,105) • Projected Ending Fund Balance $ 11,895

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