1.
Council Work Session
- Meeting Date:
- 06/17/2019
- TITLE
- FY20 Budget Wrap Up Presentation
- Department:
- City Hall Administration
Presentation:
Yes
PROBLEM/ISSUE STATEMENT
City Council will be presented with information on the FY20 budget including the below listed information. Staff will also be available to answer any additional questions in regards to the FY20 budget.
Financing Special Districts
The purpose of this information is to provide a brief overview of the methods allowed to be used to finance special districts within Montana. The methods examined here are to divide the costs using taxable value (currently how Park District 1 is assessed), using square footage, and equally per parcel.
Taxable Value
Taxable value of a property is determined the State of Montana Department of Revenue. Using this method to assess costs spreads costs to all parcels in the city that have a taxable value. Properties that do not have a taxable value are mostly owned by governments (State, County, and School District), churches, and other charitable organizations. The majority of properties paying this assessment are residential properties followed by commercial properties.
Square Foot
Assessing the costs of a district using the square foot method captures all real properties within the city, regardless of tax status. Using this method the city would assess costs to tax-exempt properties, which make up approximately 3% of the city when excluding all City of Billings owned properties. The major class under this method is Residential followed by Commercial. Using square foot instead of taxable value provides significant relief to centrally assessed properties (utility, telecommunications, railroads, and airlines) as they do not have a significant amount of land ownership within the city.
Equally per Parcel
Assessing an amount equally per parcel shifts the majority of the cost to residential properties, as they make up approximately 90% of all parcels in the City.
General Fund & Public Safety
We’ve examined three scenarios relating to budget modifications within the General and Public Safety funds. The three graphs depict the impact of budget changes on revenues, expenses, and fund balance in the General Fund. The first scenario shows the impact of the direction provided by council on June 10th, 2019 to incorporate the ‘minimal’ and ‘moderate’ cuts, without any movement of the Parks Department into the Park District 1 fund. The second scenario shows what the impact to the General fund would be if the Parks and Rec department were moved over the next two fiscal years ($2.5 million each year). The final scenario shows what the impact would be to the General Fund if the entire Parks and Rec Department was moved to PD1 in fiscal year 2020, and the General Fund Mill Levy was reduced for FY20 by 6 mills to offset the increase in PD1 assessment.
Other Budget Modifications
City staff is recommending changes in the proposed budget to include an additional $140,000 in the General Fund – City Administration budget. This increase would allow administration to begin initial implementation of the assessment stage of Lean Six Sigma, perform the National Citizen Survey, and provide resources to address community safety and addition problems as they relate to the public safety concerns and problems that need to be addressed.
Staff would like to receive input related to any other budgetary item that Council would like to see in the FY20 budget.
Financing Special Districts
The purpose of this information is to provide a brief overview of the methods allowed to be used to finance special districts within Montana. The methods examined here are to divide the costs using taxable value (currently how Park District 1 is assessed), using square footage, and equally per parcel.
Taxable Value
Taxable value of a property is determined the State of Montana Department of Revenue. Using this method to assess costs spreads costs to all parcels in the city that have a taxable value. Properties that do not have a taxable value are mostly owned by governments (State, County, and School District), churches, and other charitable organizations. The majority of properties paying this assessment are residential properties followed by commercial properties.
Square Foot
Assessing the costs of a district using the square foot method captures all real properties within the city, regardless of tax status. Using this method the city would assess costs to tax-exempt properties, which make up approximately 3% of the city when excluding all City of Billings owned properties. The major class under this method is Residential followed by Commercial. Using square foot instead of taxable value provides significant relief to centrally assessed properties (utility, telecommunications, railroads, and airlines) as they do not have a significant amount of land ownership within the city.
Equally per Parcel
Assessing an amount equally per parcel shifts the majority of the cost to residential properties, as they make up approximately 90% of all parcels in the City.
General Fund & Public Safety
We’ve examined three scenarios relating to budget modifications within the General and Public Safety funds. The three graphs depict the impact of budget changes on revenues, expenses, and fund balance in the General Fund. The first scenario shows the impact of the direction provided by council on June 10th, 2019 to incorporate the ‘minimal’ and ‘moderate’ cuts, without any movement of the Parks Department into the Park District 1 fund. The second scenario shows what the impact to the General fund would be if the Parks and Rec department were moved over the next two fiscal years ($2.5 million each year). The final scenario shows what the impact would be to the General Fund if the entire Parks and Rec Department was moved to PD1 in fiscal year 2020, and the General Fund Mill Levy was reduced for FY20 by 6 mills to offset the increase in PD1 assessment.
Other Budget Modifications
City staff is recommending changes in the proposed budget to include an additional $140,000 in the General Fund – City Administration budget. This increase would allow administration to begin initial implementation of the assessment stage of Lean Six Sigma, perform the National Citizen Survey, and provide resources to address community safety and addition problems as they relate to the public safety concerns and problems that need to be addressed.
Staff would like to receive input related to any other budgetary item that Council would like to see in the FY20 budget.
RECOMMENDATION
City Council should provide direction to staff on any additional FY20 budget changes from proposed for final budget adoption on June 24, 2019.