but another long way is bill aren't here somewhere we're on for 10:30 on Thursday week from Thursday great all right good morning everyone the May 20th 2019 special joint City Council and Redevelopment Agency budget meeting is called to order this meeting has been properly noticed and posted in compliance with the Open Meeting Law these proceedings are being video recorded as well as presented live on K Co V cable channel 2 and are closed captioned for hearing impaired viewers please note customers CenturyLink Cox communication may view this program in high definition on channel 100 - and in standard definition on channel 2 you may also watch this meeting live on Apple TV Roku Amazon fire TV on the Go Vegas app this meeting as well as all other KC LV programming may be viewed on the internet at wwlp.com evil - on the web that what Tuesday of the meeting and the meeting week at 3:00 p.m. Thursday at 9:00 a.m. 7:00 p.m. and Friday at 4:00 p.m. Saturday at 6 a.m. and Sunday at 9:00 p.m. this building is protected by state-of-the-art fire detection since pression sprinkler systems the alarm should activate during today's meeting please evacuate using the exit the back of the chambers going out to the mezzanine proceed out the double doors through the terrace and go back down the stairs case for anyone who is difficulty with stairs please check with the marshal or the fire official for assistance once outside assemble on northeast corner cross the street from City Hall Lewis vers streets employees wearing safety vests or city marshals will inform you when safe to re-enter the building for public comment related items on the agenda citizen participation public hearing items we have available speaker card which you may complete the submit to our city clerk upfront cards are available online the clerk's office or the rear of these chambers if you do not submit a card does not prevent you from speaking under public comment citizen participation or specified public airing items if anyone's present today was need for hearing-impaired equipment please see our city clerk staff upfront please note if he parked in the parking garage across the street in new flash parking self-validation machine is located in the foyer between council chambers and the security desk you walk through to enter these chambers you must have your ticket when you use the machine if you do not have your ticket see security personnel and exiting for validation coupon before we proceed with the agenda would everyone please rise for the Pledge of Allegiance getting there for public comment during this portion of the agenda must be limited to matters on the agenda for action the amount of time any single speakers allowed may be limited all comments made will be cross-referenced to those specific items if anyone submitted a speaker card who wishes to speak under this portion they did agenda please come to the podium state your name for the record this is your opportunity to address the council but the council is not able to respond or engage in dialogue we'll set the time at one minute anyone wishing to come forward well is public comment and next we're going to hear items number five through nine although we are hearing these items together after the presentation and discussion we will take separate motions I'll read them before we begin agenda item five public hearing discussion for possible action regarding fiscal year 20 20 city of Las Vegas Canada budget and fiscal year 2020 city of Las Vegas final budget including five-year capital improvement plan agenda item six public hearing discussion for possible action regarding fiscal year 2020 city of Las Vegas Redevelopment Agency tentative budget and fiscal year 2020 city of Las Vegas Redevelopment Agency final budget number seven r18 - two one nine discussion for possible action to adopt by resolution the budget policies upon which the city budgets are based number eight are a three to one nine discussion for possible action to Rio da pie resolution the budget policies upon which the Redevelopment Agency budgets are based number nine are nineteen to a one nine discussion for possible action to approve a resolution to terminate the fiscal stabilization special revenue fund awards okay mister Adams Scott Adams city manager good morning mayor and city council members it is my pleasure this morning to present to you the proposed final FY 2020 budget this budget continues to respond to your priorities as you've identified those over the last couple of years we also continue to look at our citizens and what they've expressed through the citizen surveys in terms of things that should be placed in the budget as well as internally uncertainty issues we've looked at our employee engagement survey the emphasis in this budget has been placed on the expansion in certain quality areas and revenue develop in those priority areas those key priorities that you stated to us primarily which are public safety and then also homelessness and of course you have defined homelessness as a public safety priority and we had this was a difficult budget because I think we identified going in and very early to you probably over a year ago that we were looking at a projection of a structural deficit and so we were able to overcome that structural deficit at least for 2020 through a an early adoption of a vacancy management program we've been exploring new revenues that would be durable and sustainable over time that we could use to close the gap and then I think if you remember I put in place team 2020 which is an internal effort that involve a lot of employees throughout the city that developed a lot of ideas for how we could save money in the budget so all those things put together it really got us over the finish line so at this point I would like to turn the presentation over to Gary hailing our chief financial officer who will give us greater details Gary thank you good morning mayor members of City Council as the city manager said I'm Gary a mewling chief financial officer and feel free to stop me at any point during the presentation if you have any questions I'm going to start with a little high level overview of the overall city budget and then get into more detail about various aspects of it but focusing primarily as we have in the past on the city's general fund but before I do that I'd just like to make sure that we give good recognition to the folks that worked really hard on the budget this year so thanks to finance director of an Apple Yard and her staff and the finance department who helped put together all of the budgets with respect to this fiscal year as well as the five-year forecast and as well as to all the department heads and their staff who worked tirelessly in putting the budget together to the city manager reviewed and is recommending for the final budget today looking at the budget in terms of its highest level this is the overall city budget that's being proposed there's three columns on this slide and this is in the states required format so for fiscal year 18 the first column is the actuals for that fiscal year for fiscal year 19 the estimated year-end expenditures for each of the city's fund categories and then for fiscal year 20 the budget that we're proposing which as you see if you follow those lines the numbers down in the column they're 1.8 billion dollar budget for fiscal year 20 is the proposed budget that we're asking you to make a motion on and approve and send to the state today we added this slide with respect to one of your council priorities to the budget presentation today because it helps I think define what our current spend is and propose spend is for fiscal year 24 estimated homelessness costs this is our best estimate of what the city is projected to spend for fiscal year 20 it's 35 point 1 million dollars out of all city funds about twenty nine point five million of that money is coming from the city's general fund and then CDBG sanitation fund and our DA make up the other five million dollars or so and you can see how it plays out in terms of which departments the money is budgeted in and as the city manager mentioned in considering this to be a public safety cost although that's not the way the state requires us to categorize that it's an additional 35 million dollars that we're spending on homelessness cause that really is a public safety cost that if we could figure out a solution to that money could be repurposed or at least part that money could be repurposed for other things in our budget before you I'm sorry just stopped you out the first page it won't be happening off and homelessness well they didn't listen to us in Carson City they gave us the cold shoulder chairman Neill from the taxation who grabbed the bill hijacked it and put in her own essay on the wonderful things that she'd like to do and killed all the money we had come in and unfortunately we lost a vote in the Senate so it's gonna go there to the floor and I assume passed so they didn't hear us even though we've made a wonderful presentation and I went back and I read Scott's presentation to the first committee in way government affairs that it was eloquent and it just did we got rolled really bad and you know we can't forget what's happened here and this should be a good illustration I don't know if any press or watching this but they're not they're not very responsible because they haven't reported this they just haven't talked about the nuts and bolts and how much homelessness takes away from the rest of our budget and why we needed all that new money small amount it was to cope with this and you know because that would have reduced a lot of that not just 30 you know it would have been six or seven million but it would have had a much greater impact than that because of all this spreading around of the money thirty five million so I guess I ought to thank staff for trying and I'm sorry that it couldn't be pushed over I can't believe none of our city legislators voted for us not one although there was one no vote somewhere on the floor in the assembly April 23rd I think but I can't tell you how disappointed I am and what's happened up there we needed to help and we didn't get it thanks very much thank you please continue so turning our attention now to the city's general fund budget this first slide gives you an overview of where we think we're gonna end for this current fiscal year we are estimating to be about seventeen point seven million dollars ahead of budget on the revenue side and about 2.9 million dollars under budget on the expenditure side in total a little bit over twenty million dollars and and that is recommended to be spent some of it towards one-time cost associated with fiscal year 2020 requests most of it going towards capital improvement projects that otherwise would have to wait and be competing for monies in later years and then also in mind with our reserve policies that we're recommending and going to have a discussion on later in this presentation for fiscal year 20 our overall revenue assumptions are that the economy is going to continue to be pretty good continue to be performing pretty well for fiscal year 2000 we will talk in our five-year forecast about what we're projecting for the future years which includes a slowdown just as a reminder we've now gone almost as long in this recovery period as the recovery period from fiscal years I'm sorry from March of 1991 through March of 2001 expansion come June will actually be the longest economic expansion since World War two and most economists are predicting that at some point in the next couple of years the economy will slow and possibly slip into a recession but we have not forecasted a recession in our numbers for fiscal year 20 we are forecasting is slowdown in fiscal year 21 overall for C tax we're recommending a 5% increase for next fiscal year's budget for property tax we have revised estimates from the state and the county of 5.8% increase and that breaks out into a nine percent increase in overall assessed valuation the tax caps the 3 percent and 8 percent caps that are in place are again somewhat constrained by the secondary tax caps and the one that's in play for this coming fiscal year is two times the CPI and since CPI is 2.4 percent for this last calendar year the cap on the commercial activity for property taxes 4.8% there's still a higher number than what we see in the last several years but but well below the 8 percent a primary cap on property tax the amount of abatement continues to grow as the assessed value is growing faster than the tax increase and so R estimating a 30 point thirty nine point two million dollars a total abatement for next fiscal year in licenses and franchises we're expecting a slight decrease that's primarily because the fiscal year 19 not and finds in charges for services and other revenues an increase of eleven point two percent that's primarily due to the Medicaid money which wasn't budgeted in the previous fiscal year and then the contribution for the Redevelopment Agency which the readable Meijin C board acted on and approved a couple of months ago overall looking at the city's general fund revenues and how they categorize in this pie chart along the bottom and right side of this pie chart our consolidated tax on the right in the blue color and then the orange color on the bottom left property taxes together those two primary revenue sources total about 70 over 70 percent of our general fund resources they are however the two most economically sensitive revenue sources so as the economy goes and comes around with its economic cycles those are the categories that can really help us or the categories that can really hurt us during a downturn looking at the expenditure side of the proposed budget our goal was to sustain programs and expand in priority areas of the City Council we are currently still in collective bargaining with three of our four major bargaining units the I AFF the POA and the PPA and we've been giving you updates on the status of those negotiations as they've gone along we haven't we are having to increase our O&M costs for several assets which are being turned back to the city Cashman Center to Central Library as well as the Woodlawn Cemetery late next fiscal year we have aligned the realign the employee benefit fund we talked about that we've tried to move more the actual costs into the funds where the people actually are housed we have included in the budget full funding for the third group of marshals so the three-year plan to add marshals to our Department of Public Safety will be fully implemented in the full year costs reflected in the fiscal year 2020 budget and then we have included the full staffing for fire station 103 as station 3 completes next fiscal year the people that have been temporarily temporarily relocated to station 103 will move back to station 3 and a new cadre of fire staff will go in and staff fire station 103 we have included significant contributions to our capital program in fiscal year twenty as well as I mentioned earlier in fiscal year nineteen that'll really help with the backlog of capital projects and in this final budget as compared to the tentative budget there's an additional 3.7 million dollar contribution which Jorge will talk about when he comes up and talks about some of the CIP slides overall we continue to budget a vacancy rate for all city departments of 3% for all departments and 6% in the fire department we did have some good news between the tentative and budget the metro budget requests decreased by 2.7 million dollars which from what we had included in the tentative budget and that's the primary reason why we were able to contribute more monies towards the capital projects for next fiscal year the primary reason why that decreased they asked for ended up asking for less in terms of civilian position ads and their overall more cops budget increased allowing for more of the extra cops that they wanted to add to go into that funding source instead of into the county and our contributions and then 12 transfers positions from the general fund to the Sanitation fund primarily related to downtown sidewalks storm drain and cleaning and sanitation programs and then we have implemented the recommendations of the ICMA studies for both Department of Public Safety and Fire and Rescue and we'll see that in the position counts in just a few minutes between the tentative in the final budget we went back and we reviewed all of the salary and benefit costs associated with positions that are here currently as opposed to the ones when we ran the budget numbers back in December that resulted in a reduction in our salary and benefit costs of about 2.1 million dollars we did add about two million dollars to the budget for one-time costs associated with the city having to take back the operation of the Woodlawn Cemetery we are hoping to put that out to bid and see if we can find another operator but by the current contracts requirements we are required to buy out their inventory and their accounts receivable once we take back the operation of that cemetery I mentioned the the Metro Police Department budget going down by 2.7 million dollars and then the additional transfer of capital monies of 3.7 million dollars that we're able to add to the final budget in terms of positions there are 30 new positions in the general fund one in the city's clerk's office the records analysts 8 in the Department of Public Safety primarily an administrative support but again as we mentioned previously that frees up the marshals who no longer have to do that administrative work and so they can spend more of their time in the field which should really help with patrols and building safety in the Fire and Rescue Department there's 18 additional positions majority of those going towards the fire station 103 staffing and then an additional five going towards responses to the ICMA studies and then in operations in maintenance department two additional positions and one in planning the historic preservation officer which is supported by the Centennial Commission funding any other funds there's 12.5 positions recommended for addition seven of those are recommended in the sanitation fund - and Public Works - in operations and maintenance I'm sorry five in operations and maintenance and then in the parking enterprise fund one-half position supported by fees and in development funds building safety fund for positions to address the increase in development activity and then one in an internal service funds partially fee supported in fire communications area overall as a city manager mentioned our vacancy management program there currently is 82 positions that have been frozen in non-critical areas totaling about eight million dollars in the general fund that helps offset the new positions there's forty two point five new positions and restore positions and they play out as shown in this chart 30 of those in the general fund 12.5 of those and other funds and when you break it out between public safety and non public safety 26 additional public safety positions in line with your council priority and 16.5 non-public safety positions however on the right side of the chart you can see that we include the effect of the frozen positions the actual number of available staff will be lower by thirty nine point five positions than what we have this current fiscal year looking at how the city's expenditures break out in a pie chart first by category you can see that salaries and benefits are in benefit costs are by far the biggest component of our overall general fund expenditure budget and when you consider the light gray slice along the left side of the chart which is metros budget to be primarily salary and benefit costs as well a total about 78 percent of our budget goes towards staffing and then you can see that non labor is about sixteen point eight percent and other which is where the CIP contribution shows up is about 1.8 percent looking at it by expenditure function Public Safety of course continues to be the largest share of our overall expenditure budget right about two thirds goes towards Public Safety and that doesn't include about 12 million dollars or so as shown in the box on the bottom left that's in other budgets but it was related to the homelessness costs of which about twenty nine point five million dollars is our total general fund budget for homeless costs for fiscal year 2020 this table shows you the overall city budget for next fiscal year compared to the actual and estimated year M spends for fiscal years eighteen and nineteen the budget for next fiscal year is estimated to be in the right-hand column about six hundred and twenty point eight million dollars of revenues about six hundred and fifteen point eight million dollars of expenditures leaving an excess of five million dollars and that five million dollars gets us right to our overall general fund reserve target which it's probably a little small on this chart puts 20.2% is our reserve amount for fiscal year twenty on these estimated revenues and expenditures as part of our effort every year we put together a five-year forecast that takes the budget year and basically projects it forward five additional years that effort includes a very extensive effort to look at each of our individual revenue sources and each of our expenditure categories and project those forward based on best information that we have both in terms of the economy and what we think was going to happen on our expenditure trends looking at this coming fiscal year and the five years beyond we are projecting a slowdown in economic activity to begin in fiscal year 21 and based on that slowdown we've estimated that our see tax growth will slow from 5% in fiscal year twenty down to 1.5% in fiscal year 21 and then our property tax growth which lags a little bit based on the economic activity will slow from 4.5 percent down to 2% and then grow by a slower 4% per year in the out years what that results in is that we continue to see that there is a slight discrepancy between the average growth rate in revenues and the average growth rate and expenditures the average growth rate in revenues is about three point five percent per year versus an average expenditure growth rate of about four point one percent per year that's a difference of about 0.6% per year which results in about four million dollars per year gap and so when you look at the numbers over time we think that will be okay for fiscal year twenty and twenty one in fiscal year twenty one that number was slightly red when we saw you and we saw the version and the tentative budget but based on the Metro budget going down and some additional property taxes and that number has become slightly green although probably within the margin of error if I might just question you knowing that most of the hotels looking at world resorts and circa all these new hotel rooms of affecting the sea tax that's a huge number of rooms coming in which might affect that rather than down in 2021 as you slip into 2022 I mean you're talking six thousand room sanded most definitely and so that that's one of the reasons why we're not building in a full-on recession into our projections but rather a slowdown there is projections from various economists that we will slip into a recession but the Federal Reserve through their efforts is trying to manage what's commonly called a soft landing so that we actually have a slowdown as opposed to a full-on recession we don't know the actual outcome but you're certainly right that the Las Vegas economy is doing very well right now and those additional hotel units that are under construction if they don't just rob from the other existing hotels will bring new visitors into town and generate a lot of excitement at least for a year or two and so if that coincides with a national recession or a worldwide recession that could be softened somewhat that economic benefit but certainly we're seeing the benefits right now with in terms of construction activity additional workers that are helping to build all those buildings generating additional income in our economy and spending that money that's what's helping drive up our consolidated tax and in a couple of years our property tax revenues so it's a very exciting time but we're keeping an eye on it because we're not quite sure how it's going to play out but certainly for the long-term future it's a very healthy thing so this chart just to conclude does include the effect of the frozen position so the frozen positions are targeted to increase to ten million dollars in fiscal year twenty so by the time we get into fiscal year 21 through 25 there's an assumed 10 million dollars of ongoing savings associated with those frozen positions and that does help a lot and so if you looked at it without those frozen positions on this following chart you would see that we would be in a deficit position every year including the budget year of fiscal year 20 and the projected year for fiscal year 21 both of those would be red instead of green as shown on the prior chart so it really is important that we continue to manage those those positions in a smart way we put this slide in to just kind of conclude about what some of our risks and uncertainties are with associated with the budget as we mentioned we currently have a been funding for homeless funding we're looking at various revenue alternatives but that's still something that we're working on the legislature is still in session there's several bills out there that you've been getting updates on and have significant fiscal impact for us a couple of them are positive but most of them tend to be negative fiscal impact so we're keeping a close eye on those we are still open with respect to three of our collective bargaining agreements and we don't have the outcomes for those we have in fact reach impasse with two of the three units still hopeful that there might be some settlement but that is still an uncertainty in our budget we do not know the timing and severity of the economic slowdown we're hopeful that it'll be a soft landing as opposed to recession but as we just discussed there's various opinions about that and what's happening nationally in dent and internationally outside of our region can certainly impact that the impact on consolidated tax with respect to construction activity it certainly is boosting it because of the development activity right now there's lots of expenditures going on to build those big towers that is helping with our sea tax revenues we did assume in our budget that the Medicaid monies that we started receiving last fiscal year will continue through the forecast period so if there is a difference in how that actually plays out that would be a major impact to our budget position we do have some outstanding litigation issues and although we are doing our best to try to mitigate the impact of our frozen positions there is some impact that we're having to try to manage our way through and do the best that we can and with that I'm going to turn over the next several slides to Jorge Cervantes good morning mayor and council Jorge Cervantes chief executive chief chief operation Development Officer thank you now to think about that one for a while so in putting together your capital program we use a variety of a funding source to do that and some of these funding sources have certain restrictions and they're listed here those that are do have restrictions but there's also other funding sources that are a little more flexible and don't have those restrictions you can see some here some of this reallocation of funds as we close out projects from previous years were able to roll that money forward and use them for new projects sums the general fund transfer that Gary alluded to earlier from fiscal year nineteen as we close out the year whatever from balance leftover we moved forward to see looking fun for the following year as well as some money that was allocated in fiscal year twenty budget which was the five million dollars for capital as well as the 3.7 that was realized because the savings in the Metro budget and other in other savings and then the Medicare reimbursement that can refer to this is from a previous year from fiscal year 18 that we barely received this year there were rail allocated and were allocated michurina store at the public safety side and you'll see that in the listing of projects some of the major projects that were proposing to fund this year include about nine million dollars worth of fire service apparatus and equipment as you know fire trucks need to be replaced every year as they get older in the life cycle and so we replace some of those as well some of the life safety equipment they need to be able to respond to emergency calls there's about four point five million dollars is going toward the courtyard project to continue and finish off that projects we can complete it all in one single face instead of multiple faces and then last year you all approve the funding for bond issuance for the downtown courthouse and that courthouse got to start construction in a couple of months here but we need to set the money aside for the furnishing fixture and equipment as well as the technology that goes in there some of the security components with it and then some money were putting aside for a strategic land acquisition or social purchase may arise throughout the year we want our Reserve to be able to move quickly on most it also opportunities do arise so fiscal year 20 there's a total about 45 million dollars in general fund money that's available for programming now this doesn't include some of the funding sources that comes from other funding sources regional funding sources such as the Regional Transportation Commission Regional Flood Control District and Don and some of you sit on these regional boards that allocate the money the real the majority or a capital program is really funded by these regional agencies and you through those ports allocated give directions to where that money's allocated but if we look at the allocation and the capital program by funding category on the count on the fund on the general fund side you see that 16.4 going to work Public Safety about 14.5 goes to city facilities and that's just trying to maintain our current assets at our current facilities to make sure they're in good operational shape again as they reach the end of the lifecycle make sure that we're able to keep those going for a longer period of time about 6.8 million goes to recreational facilities and this includes the residential construction tax that's allocated by Ward that you throughout the year you all give direction on what you want to spend that money on as well as technology keeping up to date with some of our software to make sure that there's no threats our systems and then some into Road and flooding others for a total of 69 projects that were recommending for fiscal year 2000 program so when we're all these 69 projects with the projects that carrier from previous years as well as the regional projects our capital program for the next five years about 1.1 billion dollars and again the bulk of that funding comes from most regional agencies that provide that money for that program and with that alternate area for the Redevelopment Agency thank you alright so the next couple of slides look at our Redevelopment Agency budget in terms of fiscal trends I'm sorry Gary can I interrupt you for sure Thank You Muir I didn't see I know that didn't the printed budget we have a note and this is a minor thing but it's on Parks and Recreation we've got like a declining revenue from the Municipal Golf Course and I don't know if that can be related to anything in particular from year-to-year but I'm just curious where the revenue or lack of would be from our operations over at Desert Pines so we have a contractor there too don't we is same sort of set up or is it completely different because I don't see a number related to results at Desert Pines I want to make sure that golf courses are doing something the fact that we only lost a half a million or something like that is good no I guess we're estimating to lose eight hundred and seventy thousand this year on page ninety of the handout that I got so if that's in schedule left one question I guess is just where is desert prime so that's that's all if you can't get me the answer now I appreciate it later we will get back to you on that one okay thank you and could I ask also on this Redevelopment Agency list is there any financial obligation or anything with the opportunity zones that's not listed here I didn't know if there's any impact at all as we go forward into opportunity's own development I'm gonna ask mr. Arnett to come up and speak to Opportunity Zones okay thank you and I just was curious that it isn't listed and there may well be a reason and he'll know it good morning mayor members of City Council bee Lawrence director economic and urban development the opportunity zones is a federal income tax benefit to actually I let me back up I'm sorry the opportunity zone is a benefit for investors who might have a capital gains tax liability at the federal level to shield that and have a deferral that capital gains tax for up to seven years and then also have a permanent exclusion of future capital gains tax after ten years if they make an investment in a qualified opportunity zone so there's no direct fiscal impact to the city's budget or the Redevelopment Agency budget there we believe there will be a benefit if as investment is made in these zones it will generate new development new property tax so that could be a revenue benefit to the agency or potentially to the city but it's not money flowing through the city it's really money flowing private to private and then there's a benefit at the federal tax level when investors follow their taxes that can shield some of their invest from capital gains but mr. art isn't there somebody for the city either in finance or in the RDA there is monitoring that is a full-time employee that is the go-to person therefore will be impacting somehow our budget absolutely so we are monitoring that in our office I myself am monitoring it as long as as well as our deputy director Jason Thompson and our redevelopment manager Tara Anderson the three of us for instance we're at a all-day conference at Mandalay Bay Expo Center just a week ago Friday we are tracking investments in the city we're working on an online portal that should be launched soon we do we are aware that one investment in Opportunity Zones has closed in City Park the Aspen Heights project that's one of our two new housing projects in City Park closed on a twenty six million dollar Opportunity Fund investment so that's capital coming into that project so we're going to be tracking this and track the impact that it has on the city as well as on a budget perspective and we'll certainly keep mr. rambling and then a play yard our finance director informed as well as we made progress I just figured there might be an economic impact on the city as we monitor get involved in it I mean somebody's got to be inspecting what this whole opportunity zone is which then takes you away from other work that you're doing or you have to hire somebody else who does nothing but monitor this was just a question knowing it wasn't listed here I think the way to again for the record bill aren't mayor I think the way to think of it and this is maybe oversimplifying it but the way to think of it is is this is another source of capital source of money to come in to projects in the city in these targeted areas that city sent we're successful in getting the money into these areas that'll have a beneficial impact particularly on the property tax side thank you thank you sorry so look looking at the the revenues that support the RDA primarily the tax increment financing based on property taxes the assessed value continues to increase and a fairly healthy clip projected for fiscal year twenty is a six point one percent increase in tax increment I'm sorry an in assessed valuation which results in a seven point five percent increase in tax increment we continue to see the Smith Center pay back to the twenty million dollar note and there's five million dollars that's projected to come in June thirtieth twenty twenty we're continuing to market the medical district Symphony park development continues there's a couple exciting projects breaking ground shortly on the office tenant that Center program continues to be a positive program for us we're still hopeful that there will be additional allocations for new market tax credits we continue to see the RDA support the general fund for maintenance and RDA areas on the council previously approved that 1.9 million dollar budget for next fiscal year that's shown on this slide we continue to see the contributions towards fremont street experience both in terms of debt issuance and cash contribution from the lv CVA the canopy project is is slated to open the end of this calendar year in time for New Year's Eve City Hall development the RDA is contributing four million dollars towards the acquisition of land and then the Innovation Center smart city innovation and the Bank of America building and the Fifth Street School in terms of the numbers in the budget for the RDA the RDAs revenue is estimated to be twenty eight point six million dollars next fiscal year that does include contributions from the lvc VA and FSC towards the debt service payments for the bonds that we issued for the canopy project an expenditure side the budget is estimated to be forty four point seven million dollars a large component of that is the actual expenditure towards that canopy project which is shown in the program expense line of twenty two point six million dollars the last section of my presentation has to do with the budget policies and as we mentioned in the tentative and again in your council briefings as part of our due diligence on the budget we reviewed a copy of our council approved budget policies which were last approved by resolution in fiscal year 2014 the government finances officer Association does provide us some good guidance with respect to appropriate reserve targets their suggestions are that the reserve target should take into account the unique nature of each governmental entity as well as the local economy how vulnerable it is to natural disasters and economic volatility in setting those reserve targets and so when looking at that guidance and looking at our previously approved reserve targets we actually came up with several recommendations that we think will bring our reserve targets in line with best practices excuse me could I ask a question sure we had a problem in the past when the legislature looked at our reserve fund and then decided monies that we requested to safer homeless for anything they felt we could take out of a reserve fund because it was larger I'm not sure how long ago you're asking about but currently in the legislature there's a bill that actually restricts the amount of general fund reserves that can be protected with respect to negotiations so that's one of the bills that we're keeping a close eye on because I believe it has 16 point something percent in terms of a cap on what can be protected and the general fund reserves with respect to someplace between what we have now and what our goal is it was sixteen point six yes I just know there were several times over the past few years that we the legislature knocked us out in providing money for us because they said our reserve let's thank the phone Scott Adams City Manor see the mayor back in the recession there was some concern about the legislature rating or fund balances and and actually capturing some of those fund balances for State he used but there was a header has been a subsequent Supreme Court decision that gave us some protection over that issue so I think our bigger concern is what Gary is referenced which is what portion of the fund balance could be technically used in collective bargaining discussions for calculating our ability to pay so with respect to the general funds reserve our previous target had been a 12% fund balance reserve target with a 20% aspirational goal and then in addition to that the city had put aside a separate fund the fiscal Stabilization Fund with its own separate ten percent goal and you'll hear in a moment our recommendation to dissolve that fiscal Stabilization Fund a recommendation on the general fund is that based on the type of economy that we have here locally that it makes sense for the city to have a 20 percent general fund reserve policy and so we're recommending that you change the reserve policy from 12 percent plus a 20 percent aspirational goal to a straight 20 percent reserve target for each of these sections we've included the current status related to the current general fund reserve language and then how we would stand related to the new language and in each case we're actually projected to be at or above the reserve target based on this new reserve language that we're proposing the second fund that we're recommending a change to is the reimbursable expenses fund and this is the fund that basically the RDA reimburses the city's general fund for its services a minor change here if the previous policy was 10% of operating expenses plus 25 percent of capital we're recommending that that be changed to one month of expenditures which each month is roughly about eight point six percent or so and we are again already at that target the automotive internal services fund has basically two major components one is the operations and maintenance of our vehicle fleet and the other is the replacement of our fleet for the operation side we're recommending a 10% reserve target and on the on the replacement side were recommending that we have two years and reserve to handle the spikes and dips in the replacement schedules for our city's fleet of vehicles an employee benefits internal service fund the previous target had been a 25% of operating expenditures policy which I think was probably a little bit more than we needed our recommendation is that we reduce that to 10% of expenditures plus one of the components of that fund is our workers compensation program and for that component we're recommending that the reserve be equal to two times the average of the last five years of workers compensation claim payments for the liability insurance and property damage internal service fund our previous target was 10% of operating expenditures plus 25% of capital expenditures and a recommendation as we change it similarly to the benefits fund to be 10% of expenditures plus two times the average of the last five years of claims paid I mentioned the fiscal Stabilization Fund that fund was created during the Great Recession with a target of 10% and several of the monies that were input into that fund had been used previously but that fund balance has been maintained since 2013 the last six years I'm at a thirteen million dollar fund balance we are recommending that since the general fund is now at the 20 percent target and that we close that fund and repurpose the balance to put towards capital needs and to create a sinking fund that can help pre-fund certain types of services and years that were projecting deficits is there any questions about the reserve target changes okay so our next step for the budget after you approve the budget that we're recommending today with any changes that you see fit we required by state law to file the final budget by June 1st and to file the CIP budget by August 1st and with that I'll turn it back to the city manager scott adams city manager i to summarize we have a list here of key budget takeaways we continue to experience a revenue growth not keeping pace with our expenditure growth causing a structural deficit in a five-year forecast as Gary had previously mentioned our average revenue growth rate is three and a half percent but our expenditure growth rate is projected to be about 4.1 percent so that's something we're going to be constantly working on and you know collective bargaining agreements and allow all of our cost structures to bring those in line and look for new revenue opportunities to bring the revenues up as well we've expanded in priority areas of Public Safety metro marshals for parks security and mobile integrated healthcare and as we've previously stated while homelessness represents a significant part of our budget we still have the growth in terms of the need for almost funding unfunded and so we are continuing to explore revenue alternatives to meet that growth rate in in terms of what we're actually experiencing on the street and homelessness our team 2020 effort addressed our structural deficit and we've closed the gap not only for this year but as we look forward to next fiscal year we think we're probably in pretty decent shape there as well and we did that through vacancy management vacancy management has been the one area where we got onto that probably a year ago we've been managing the outflow employs the attrition through primarily retirement and I think I've indicated to you previously as we go forward now we're gonna be able to start swapping vacancy in the pool in two areas so we can start filling positions in those areas that you've told us are your critical needs so as we move forward and experience more vacancies we're going to be able to fill in the areas of public safety operations and maintenance and some of those areas if you've expressed concern about service levels in and then when we've had surpluses we've been using those one-time monies for meeting our capital needs and Jorge went over a summary of our capital needs so with that that is a the proposed final FY 2020 budget any comments questions from Council so we would like to do this one at a time please okay we start with gender item five okay item agenda item five and six or both public hearing items so anybody who wishes to comment on agenda item five please come forward state your name for the record hearing and seeing none I'm going to close the public hearing and I'm going to ask Mayor Pro Tem to make a motion to approve agenda item number five madam mayor I move to approve agenda item number five thank you very much this emotionally it's emotion here we go please followed him please post and counseling career there he is please post you see that little warmup they're going round it's not alright well that that passed unanimously although it didn't post on the video I apologize okay thank you and we'll move on to agenda item six public hearing anyone wishing to be heard on agenda item six please come forward hearing and seeing none Oh close public hearing on agenda item six and turn to me or pro-temp for emotion please madam mayor I move to approve item six thank you very much let's try this again okay please vote okay and please there it is miracle of miracles it worked there we go thank you and now we'll move on to agenda item seven Mayor Pro Tem please emotion mere I move that we adopt by resolution the budget policies upon which the city budgets are based thank you very much is a motion to approve agenda item seven please vote and please post that motion carries unanimously we'll move on to agenda item 8 Mayor Pro Tem I move that we approve the read option by resolution of the budget policies upon which the Redevelopment Agency budgets are based wonderful there's motion to approve on agenda item a please vote and please post and motion carries and let's go then on to agenda item 9 which is our final item to approve the resolution to terminate the fiscal stabilization special revenue fund thank you there's motion on agenda item 9 please vote and please post and that motion carries thank you okay citizen participation public comment during this portion of the agenda must be limited the matters within the capital SEO jurisdiction of the City Council no subject may be acted upon by the City Council unless subject is on the agenda scheduled for action if you wish to be heard come to the podium please give your name for the record the amount of discussion and a single subject as well as the amount of time any single speakers allowed may be limited this is your opportunity to address the council but the council is not able to respond or engage in dialogue are there any members of the public who wish to speak under this portion of the agenda hearing and seeing none I shall close that and thank you all this meeting is now adjourned