CITY OF COTTONWOOD FY 2014 Proposed Budget Overview

1. CITY OF COTTONWOODFY 2014 Proposed Budget Overview City Council Chambers June 17, 2013 @ 6:00 P.M.

2. Topics of discussion Glossary of Acronyms FY 2014 Budget Summary Personnel Programs <$35K Capital Major Revenues Update Funding Outside Agencies Water & Wastewater Rates Financing Needs Reserve Funds Status Future Meetings & Questions 2

3. Glossary of Acronyms

4. Glossary of Acronyms • ADOT – Arizona Department of Transportation • ADEQ – Arizona Department of Environmental Quality • ASRS – Arizona State Retirement System • ADWR – Arizona Department of Water Resources • AZ - Arizona • CAF – Capital Accumulation Fund • CATS – Cottonwood Area Transit System • CDBG – Community Development Block Grant • CIP – Capital Improvements Plan/Program • COLA – Cost Of Living Adjustment • DOJ – Department of Justice • DPS – Department of Public Safety • DS – Debt Service • DUI – Driving Under the Influence

5. Glossary of Acronyms • E-MOD – Experience Modifier • EMS – Emergency Medical Services • FAA – Federal Aviation Administration • FmHA – Farmers Home Administration • FY – Fiscal Year • GADA – Greater Arizona Development Authority • GF - General Fund • GOHS – Governor’s Office of Highway Safety • HURF – Highway User Revenue Fund • IGA – Inter-Governmental Agreement • IT – Information Technology • LP – Lease Purchase • LTAF – Local Transportation Assistance Fund • MPC – Municipal Property Corporation

6. Glossary of Acronyms • MP Room – Multi Purpose Room • O&M – Operation & Maintenance • P&Z – Planning & Zoning • PANT – Prescott Area Narcotics Taskforce • PSPRS – Public Safety Personnel Retirement System • SAFER – Staffing for Adequate Fire and Emergency Response • SCBA – Self Contained Breathing Apparatus • Sp Ops – Special Operations • SRO – School Resource Officer • VLT – Vehicle License Tax • WIFA – Water Infrastructure Finance Authority • WWTP – Wastewater Treatment Plant • YC – Yavapai County

7. FY 2014 Budget Summary 7

8. 2014 Budget SummaryPersonnel • Currently no additional staffing is in the budget 8

9. 2014 Budget SummaryPersonnel Items currently included: Cost Of Living Adjustment (COLA) – 1.7% Longevity - $45,000 Merit program fully funded this fiscal year 9

10. 2014 Budget SummaryPersonnel Health insurance premiums increased by 6.5% City continues to fund a portion of dependent coverage No health insurance cost shift to employees Reserve the right to adjust during the year 10

11. 2014 Budget SummaryPersonnel 11

12. 2014 Budget SummaryPersonnel Arizona State Retirement – 0.40% increase FY 2014 – 11.14% to 11.54% PSPRS Fire – 2.18% increase FY 2014 – 14.63% to 16.81% PSPRS Police – 4.98% increase FY 2014 – 24.90% to 29.88% 12

13. 2014 Budget SummaryPrograms New Programs for FY 2014 Shared Safety Consultant 13

14. 2014 Budget Summary <$35K Capital Outlay FY 2013 Lease Purchase Funding 14

15. 2014 Budget Summary <$35K Capital Outlay 15

16. 2014 Budget Summary <$35K Capital Outlay There is $147,340 reserved for capital, programs, and operations. Concern that departments cut too deep 16

17. Major revenues update 17

18. 2014 Budget Summary 18

19. 2014 Budget Summary The Good Current GF reserve policies are being maintained Local economy showing signs of improvement Local sales tax is budgeted for small increase 3.7% The Bad Fund Balance Policy not being followed in other funds Costs growing faster than revenues Too many demands on the City for support Outside agencies Schools County State still holding HURF hostage LTAF has not returned Loss of current Dispatch partners 19

20. Funding Outside Agencies 20

21. Funding Outside Agencies Core Services – organizations providing a core or mandatory service on behalf of the City, that the City would otherwise have to provide. Value Added Benefit Service – organizations providing an ongoing service that provides a value added benefit to the community, though not mandatory, would probably be provided by the City in some manner. Program Funding – organizations, not considered providing the services described above, seeking funding for a specific program, or event. Building Better Community Grants - $15,000 is budgeted 21

22. Funding Outside Agencies These organizations will be presenting on Thursday prior to wrap-up. 22

23. Water & Wastewater Rates 23

24. Water & Wastewater Rates There is a strong need for rate adjustments Water - Lack of Debt Service Coverage – Should be 1.35X Continue to look for efficiencies in both systems Moody’s & S&P statements are on-line Moody’s downgraded Cottonwood May 11, 2011 S&P downgraded Cottonwood June 12, 2013 Syncora issued a Notice of Noncompliance to our Water Bonds Trustee - Bank of New York Trust Co. Rate Study presentation was on June 11th Notice of Intent to Increase Water & Sewer Rates will be presented tomorrow Any implementation is anticipated by October 1st 24

25. Financing Needs 25

26. Financing Needs • Currently this is the only anticipated borrowing • Refunding of the Water Bonds are not in the budget since the decision was made to wait until the City got closer to the call dates of the bonds, and improved bond coverage. That being November 2014 and January 2016 • We are contemplating bonding for: • Communication Center • City Hall Complex 26

27. Reserve Funds Status 27

28. GF Reserve Funds Status 60 Days Coverage $2,268,830 Capital Accumulation Fund $1,000,000 Undesignated Reserves $100,000 1% Sales Tax GF Capital $324,750 0.2% Sales Tax PS Capital Fund $0 Reserve for Capital / Programs $147,340 Longevity Plan $45,000 28

29. Future Meetings Wednesday, June 19th at 6 p.m. Thursday, June 20th at 4:00 p.m. Questions???? 29