Proposed Budget Fiscal Year 2017 Presentation to the County Commission May 4, 2016 FY16 Proposed Budget Presentation

FY17 Proposed Budget Presentation BUDGET OBJECTIVES  To balance the budget by limiting recurring expenses to projected recurring revenue  To maintain a stable property tax rate  To maintain an appropriate fund bal ance  To adhere to the Debt Reduction Plan  To provide compensation that will attract and retain a productive workforce  To fully fund Pension and OPEB benefits 2

FY17 Proposed Budget Presentation ARE WE MEETING OUR OBJECTIVES? Financial Indicators since 2010:  Held annual expenditure increase to less than 1% per year, including compensation, benefits and O&M costs  Increased Fund Balance from 21% to 29% of revenue  Reduced Debt by about $600 mi llion  Maintained strong bond ratings of AA+/AA1  Funded 100% of Pension and OPEB annual required contribution (ARC)  Reduced authorized General Fund positions by 112 3

FY17 Proposed Budget Presentation FUND BALANCE 4 A healthy General Fund balance is important for several reasons:  To ensure sufficient cash flow to meet current obligations  To provide funds for unforeseen expenses or emergencies  To demonstrate financial stability for higher bond ratings and lower cost of debt issuance

FY17 Proposed Budget Presentation FY17 BUDGET HIGHLIGHTS 5 The Proposed Budget includes additional funding for:  Education Fund: + $8.7 available for total of $400 million  Roads & Bridges Fund: +$3.0 million for road repaving  General Fund: Blight abatement efforts +$1.3million Inmate Medical Contract +$400,000 Assessor reappraisal costs +$265,000 Facility Maintenance for Juvenile Court building +$250,000 Expanded Contract Security by Sheriff +$200,000 2% salary increase for employees, offset by other Position Control reductions +$2.5 million

FY17 Proposed Budget Presentation GENERAL FUND 6 Budget is Balanced Any increases will require other budget adjustments

FY17 Proposed Budget Presentation INCREASE REQUESTS Requests for new positions or programs or additional funding for existing programs must be submitted for consideration separately from the base budget as an “Increase Request” Increase Requests for the General Fund for FY17 = $8.4 million Increase Request for Education = ??? 7

FY17 Proposed Budget Presentation INCREASE REQUESTS Increase Requests submitted by Elected officials for FY17 include:  $ 4.5M – Sheriff vehicles and 30 FTE  $2.2M – Attorney General 28 FTE*  $.9M – Juvenile Court Judge and Clerk  $.7M – General Sessions Criminal Judges  $.1M – Election Commission/Other  $8.4M – Total Requests *Will also require funding of $1.7 million to Public Defender 8

FY17 Proposed Budget Presentation FUND TYPES 9 Fund TypesPurpose FY17 Revenue (millions) Education FundFunding for public schools within Shelby County$ 400 General FundGeneral County operations 386 Debt Service FundPayment of Debt Service obligations 153 Special Revenue FundsRevenue designated for a specific purpose (Grants, Hotel-Motel, Roads & Bridges, Other) 137 Enterprise FundsBusiness type operations (Corrections, Fire, Codes) 79 Internal Service FundsProvides services for other departments (Fleet, Info Tech) 9 TOTAL ALL FUND TYPES $ 1.164

Total FY17 Revenue = $1.164 Billion FY17 Proposed Budget Presentation REVENUE – ALL FUNDS Property Taxes State and Federal Other Local Sources Other Local Taxes 66% 16% 10% 8% 10

FY17 Proposed Budget Presentation PROPERTY TAX USES 11 One cent on tax rate = $1,702,000

FY17 Proposed Budget Presentation PROPERTY TAX USES 12 Property tax growth or increased collections are allocated per the annual tax ordinance rates

FY17 Proposed Budget Presentation EDUCATION 13 Total FY17 Funding Available for Education = $400 million Note: $3 million for Pre-Kindergarten programs has also been included in the General Fund

FY17 Proposed Budget Presentation EDUCATION 14 Wheel Tax was previously allocated between School Debt and Operations. Reduction of Debt Service obligations allows us to make these funds available for School CIP to reduce reliance on future bond issues.

FY17 Proposed Budget Presentation GENERAL FUND EXPENDITURES FY17 General Fund Expenditures = $386.3 million Criminal Justice and Judicial operations account for 75% of all GENERAL FUND operations. 15 Criminal Justice 63% Health 13% Judicial 12% Other 12%

FY17 Proposed Budget Presentation GENERAL FUND EXPENDITURES 16 Note: Personnel budget includes 6.6% estimated vacancy savings

FY17 Proposed Budget Presentation CAPITAL IMPROVEMENTS PLAN 17 Maximum Annual County CIP Allocation = $75 Million Per Debt Reduction Plan Criteria required for CIP funding:  Purchase or construction of depreciable assets that are owned by the County or a related entity  Cost of at least $100,000, including at least one component that costs $25,000 or more  Useful life of at least 10 years

FY17 Proposed Budget Presentation CAPITAL IMPROVEMENTS PLAN 18 FY17-21 CIP Plan Highlights:  $40M budgeted for FY17, including building renovations for 1060 Madison ($3.2M), 814 Jefferson ($2.2M), and Agricenter ($2.3); Body/Vehicle Cameras ($2.5M)  $16M allocated for Schools, with projects to be determined upon receipt of long term facility plan  Subsequent years (FY18-21) include an increasing level of support to maintain aging county infrastructure.  Major projects beyond FY17 include:  $20M to replace Sheriff communications system  $20M to renovate or relocate the Health Department  $15M for renovations to the Criminal Justice Center

FY17 Proposed Budget Presentation COST OF DEBT FOR CIP  Annual Debt service at current rates is $75,000 per million of debt for 20 years  Example: $60 million of debt has an annual debt service cost of $4.5 million for 20 years  Effect on tax rate = almost 3 cents 19

FY17 Proposed Budget Presentation LONG TERM DEBT Long term debt projected to be less than $1 billion by 6/30/18 Declining debt service obligation provides funding options:  Shift 50% of Wheel Tax from Debt service to CIP Fund for Schools  Move a portion of Local Option Sales Tax ($3M) from Debt Service to Roads & Bridges Fund to improve road repaving cycle.  Debt Service payments = $149 million for FY17 20

FY17 Proposed Budget Presentation LONG TERM DEBT 21

FY17 Proposed Budget Presentation DEBT SERVICE BY YEAR 22

FY17 Proposed Budget Presentation FY17 BUDGET OVERVIEW Questions and Discussion 23 All budget information available on the Finance page at