2012-11-27_PWETC_AgendaPacket - Laserfiche WebLink

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Page 2 of 4 35 36 The Partial Recommendation 37 38 Tax-Supported Capital Needs. The tax - supported capital areas (other than Fire Station or Parks 39 and Pathways needs) are Vehicles, Equipment, and Facilities. Vehicles represent City "rolling 40 stock," from police squad cars to fire trucks to snow plows to utility pick -up trucks. Equipment 41 represents such things as firefighter turn-out gear, police firearms, office furnishings, and the 42 like. Facilities capital needs generally do not include whole buildings, but rather major building 43 systems, such as roof replacements or heating and air conditioning systems. These capital items 44 are the "nuts and bolts" of doing City business on the tax- supported side of the ledger. 45 46 Over $16 million (57 %) of the $28 million in general Vehicle, Equipment, and Facility needs is 47 un- funded using current funding levels and projected costs over the next 20 years. 48 49 The subcommittee recommends a long -term solution for Vehicles, Equipment, and Facilities that 50 is a combination of shifting funding from operational costs to capital costs, adding revenues, and 51 transferring existing funds. This recommended solution addresses 100% of the $16 million 52 shortfall over the next 20 years, and leaves the associated fund balances and annual funding at 53 sustainable levels beyond that time. 54 55 The first part of the recommendation is to shift approximately $300,000 (about 2.0% of the 56 current $14.7 million levy) from current operating budget funding to capital funding in 2012, and 57 to maintain that shift permanently going forward. Approximately $115,000 of that amount 58 would annually be dedicated to Vehicle funding, approximately $115,000 to Equipment funding, 59 and the remaining approximately $70,000 would be dedicated to Facility funding. 60 61 The second part of the recommendation is to increase the annual property tax levy by $500,000 62 (3.4% of the current $14.7 million levy) in 2012, and to maintain that increase permanently 63 going forward. Approximately $192,000 of that amount would annually be dedicated to Vehicle 64 funding, approximately $192,000 to Equipment funding, and the remaining approximately 65 $116,000 would be dedicated to Facility funding. 66 67 The third part of the recommendation is to transfer $750,000 from the General Fund to the 68 Equipment Replacement Fund (which currently has a $0 balance) in 2012, creating a sustainable 69 fund balance in that fund. 70 71 These recommended actions would total an ongoing annual increase in capital funding for 72 Vehicles, Equipment, and Facilities of $800,000, creating a sustainable funding mechanism for at 73 least the next 20 years. Approximately 40% of the increased funding comes from operating 74 spending cuts and 60% from increased property taxes. 75 76 The subcommittee notes that, when anticipated inflationary type cost increases of approximately 77 $140,000 for 2012 are factored into the equation, assuming no increase in the levy to cover those 78 cost increases, the operational budget cut totals $440,000, or about 3.0% of the current $14.7 79 million levy, bringing the ratio of cuts to new revenues closer to one-to -one ($440,000 and 80 $500,000 respectively).