City of Des Moines Budget Workshop November 23, 2015
Today s Agenda Budget Calendar Financial Policies Solid Waste Enterprise Fund 2
Budget Calendar 3
Debt Management Program 4
Continuing Disclosure Ensure that the City efficiently carries out its continuing disclosure obligations with respect to securities it issues pursuant Securities and Exchange Commission Rule 15c2-12 GFOA recommends adoption of a thorough continuing disclosure policy and adherence to best practices 5
Continuing Disclosure Incorporating robust disclosure practices and demonstrating a solid disclosure track record will benefit an issuer by improving compliance and enhancing credibility among investors, credit agencies and the public resulting in optimal bond issuance results 6
Continuing Disclosure Appoints the Treasurer to act as Disclosure Coordinator for the City Provides structure and clarity to the process Includes and education and training component The Disclosure Coordinator shall submit all Official Statements to the City Council for review and approval. The City Council shall undertake such review as deemed necessary by the City Council to fulfill the City Council's responsibilities under applicable federal and state securities laws. 7
Fund Balance Policy 8
Fund Balance Importance to Bond Ratings The fund balance communicates valuable information about both the past and the future. The existing balance depicts the cumulative effects of the local government s financial history A local government s fiscal position determines its cushion against the unexpected, its ability to meet existing financial obligations, and its flexibility to adjust to new ones. Fund balance describes the net financial resources available to an entity in the short term. 9
General Obligation Moody's Ratings Criteria A Aa Aaa Fund Balance as % of Revenues Between 5% and 15% Between 15% and 30% Greater Than 30% Current Policy unassigned balance to be no less than 10 percent of annual expenditures every June 30 th Proposed Policy unassigned balance to be no less than 15 percent of annual expenditures every June 30 th 10
Enterprise Revenue Debt Moody's Ratings Criteria A Aa Aaa Days Cash on Hand Between 35 and 150 Days Between 150 and 250 Days Greater Than 250 Days Current Policy working capital balance to be no less than 15 percent of annual expenditures Proposed Policy working capital balance to be no less than 20 percent of annual expenditures 11
Investment Policy Invest public funds not currently needed in a manner which will provide protection of principal, meet daily cash flow demands of the City and provide market returns Primary objectives: safety of principal, liquidity, return on investments Quarterly statements prepared to monitor compliance FY2015 Earnings = $258,000 12
CY2015 Pooled Cash Portfolio Yield 2.0000 1.5000 1.0000 0.5000 0.0000 1/15 2/15 3/15 4/15 5/15 6/15 7/15 8/15 9/15 10/15 11/15 12/15 Pooled Cash 180 Day T-Bill 1 Yr. Treasury Note 13
CY2015 Non-Pooled Cash Portfolio Yield 2.0000 1.5000 1.0000 0.5000 0.0000 1/15 2/15 3/15 4/15 5/15 6/15 7/15 8/15 9/15 10/15 11/15 12/15 Non-Pooled Cash 2 Yr. Treasury Note 3 Yr. Treasury Note 14
Solid Waste Fund 15
FY2016 City of Des Moines Budget Special Revenue $86,490,170 14% Internal Service $42,843,897 7% General Operations $181,550,779 30% Solid Waste Stormwater Sanitary Parking Debt $92,957,987 15% Capital $94,632,697 16% Enterprise $109,046,748 18% Housing Golf 16
Comparison of Annual Budget Parking $10,708,190 10% Golf $194,406 <1% Sanitary $38,908,430 36% Solid Waste $12,731,741 12% Housing $21,956,181 20% Stormwater $24,547,800 22% 17
Solid Waste Public Works Sanitation Division provides trash, yard waste, and recyclables collection to approximately 65,000 homes The Fund also supports SCRUB, Property Cleanups and the Clean Team Municipal collections are provided to City parks, municipal buildings, the Airport and WRA, and 4-plex locations. Staffing at 50 full-time positions 23 side-loaders, 14 front/rear loaders and 16 other pieces of equipment 18
FY2016 Adopted Budget Source of Funds Use of Funds Fines and Forfeitures 4% Use of Money and Property 2% Customer Payments 91% Other 3% Fuel & Equipment Maintenance 17% Capital Outlay 13% Landfill 18% Other 13% Personal Services 39% 19
Operating Budget Recommendation FY16 Amended FY17 Recommended FY18 Projection FY19 Projection FY20 Projection Projected Revenues $ 12,113,251 $ 12,131,037 $ 12,203,051 $ 12,209,234 $ 12,076,072 Projected Expenditures 14,229,848 13,828,875 11,957,203 12,600,755 13,209,222 Ending Fund Balance $ 5,512,100 $ 3,814,261 $ 4,060,109 $ 3,668,588 $ 2,535,438 Reserve for Storm Cleanup $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 No recommended rate increase at this time 20
Five Year Equipment Replacement Plan $3,000,000 $2,732,162 $2,500,000 $2,000,000 $2,028,650 $1,915,160 $1,812,420 $1,500,000 $1,000,000 $500,000 $- $101,500 FY2016 FY2017 FY2018 FY2019 FY2020 21
Garbage and Recycling Fees by City Comparison $15.00 $12.50 $13.93 $10.00 $11.00 $11.04 $11.45 $10.62 $12.00 $11.63 $12.00 $11.29 $7.50 $5.00 $2.50 $- Altoona Bondurant Clive Johnston Norwalk Pleasant Hill Surrounding Metro Cities Des Moines $12.00 Urbandale West Des Moines Windsor Heights 22
Solid Waste Fund Staff will continue to review MWA proposed changes and develop recommendations on the yard waste program 23