1. Presented By: Budget & Research Department Karen Rhodes-Whitley FY 2015-16 STATUS REPORT & THREE-YEAR FINANCIAL FORECAST SUMMARY FISCAL YEARS 2016-2019

2. THREE-YEAR FINANCIAL FORECAST  Presented to provide the City with the opportunity to take A Look Ahead into the future, identifying the challenges and opportunities facing the City over the next three years.  This forecast becomes the foundation for the development of the 2016-17 Budget.  Every annual budget adopted by City Council is statutorily required to be balanced.  Fund deficits will be rectified in the year projected through the budget process.

3. FY 2016-17 Budget & CIP Focus Maintaining and improving our $2.0 billion growing infrastructure. Ensuring Economic Development Incentive Fund and Capital Reserve Fund are adequately funded. Preserving exceptional, quality services for residents, businesses and the Plano community. Concentrate on initiatives that help the City of Plano better engage with the community to deliver services that address needs and concerns across Plano neighborhoods and improve the quality of life across the city.

4. THREE-YEAR FINANCIAL FORECAST General Fund

5. THREE-YEAR FORECAST GENERAL FUND SUMMARY 2016-2019

6. ASSESSED PROPERTY VALUATIONS  Existing Property Value Growth Projections: –2017 = Increase 5.0% –2018 = Increase 4.0% –2019 = Increase 4.0%  New Property Value Growth Projections: –2017 = $700.0 million –2018 = $700.0 million –2019 = $700.0 million Tax Rate 48.86 cents per $100 of Assessed Property Value * Projected

7. ANNUAL SALES TAX COLLECTIONS In Millions * Projected

8. Sales Tax Assumptions Based on 3-year average per City Council policy-net audit adjustments –FY 15-16 is $72,673,623 –Estimated for FY 16-17 thru 18-19 is $72,781,478 –Budget Office projection - $74.5M Actual FY 2014-15 was $76,829,245 –Net sales tax agreements of $895,372 First five-month collections for 2015-16 sales tax are down approximately $1.1M as compared to last year net audit adjustments. FY 2015-16 Liquor Sales are projected at $1.5M

9. Retail & Business to Business Collections Comparison

10. BUILDING AND DEVELOPMENT REVENUE In Millions *Projected

11. BUDGET EXPENDITURE ASSUMPTIONS FY 2016-19  A 3% salary increase has been included in the three forecast periods for Civil Service and Non-Civil Service employees.  Social Services funding has been increased from a $1 per person population ($271,140) to $2 per person population ($552,600).  Supplies and services costs and postage are projected to increase 2.0% in each year of the forecast for inflation. Municipal garage charges are projected to remain flat in 16-17 then increase 2.0% through the forecast. Electricity charges remain constant and natural gas includes 2.0% in 16-17, 4.0% in 2017-18 and 6.0% in 2018-19.  Health Insurance is projected to remain constant.  TMRS is funded at the full rate of 18.11%.  Funding for the Economic Development Incentive Program is projected at the two (2) cents on the tax rate at $6.6 M for 2016-17, $7.0 M for 2017-18 and $7.5 M for 2018-19. Funding will be reviewed during the budget process.  Funding totaling $1M is included for Library Books.

12.  The transfer to the Capital Reserve Fund is projected to increase from $24.6M in FY 2016-17 to $25.6 M in FY 2017-18 and to $26.6 M in 2018-19 based on the Capital Reserve Policy goal. Have achieved 75% Council Goal!!  Community Investment Projects (CIP) proposed to come on-line are projected to be absorbed within the existing tax rate and include the expansion of the Oak Point and Liberty Recreation Centers, the addition of a pool at Carpenter Park Rec Center, the Senior Center expansion, and other facility additions and expansions and parks and rec projects.  Total CIP O & M coming on-line during the forecast totals $2.9 million.  The forecast includes issuing $40.0 M in new debt in each year of the forecast with an additional $10.0 million tax note sale in early 2016-17 in order to implement the recently completed Technology Service Assessment.  Not included in the fund projections are program enhancements relating to increases for mandates, growth, increased services, technology requests, and other causes for the three-year period. All discretionary items will be examined on their individual merit during the budget development process in each year. BUDGET EXPENDITURE ASSUMPTIONS FY 2016-19

13. Capital Reserve Update *Projected

14. Projects to be Discussed during 2016-17 Budget Fire Station #8 –Needs to be returned to a double company station to maintain the City’s ISO I rating. –In 2011, an engine company was moved to Fire Station #13 in order to avoid adding staff during economic downturn. –Preliminary estimates totals $5.2M $3.5M recurring staff and O&M $1.7M equipment - one-time Technology Service Assessment –Additional funding will be needed from the General Fund and Water & Sewer Fund for support of Technology Services - TBD

15. Preliminary Personnel Requests FY 2016-17 83 positions totaling $7,180,911 including benefits: 81 General Fund $7,064,984 70 Public Safety - $6,373,993 6 CIP coming on-line - $336,185 1 Equipment Services Fund$ 62,253 1 Property Loss Fund$ 53,674

16. THREE-YEAR FINANCIAL FORECAST Other Funds

17. THREE-YEAR FORECAST WATER & SEWER FUND SUMMARY 2016-2019

18. Water & Sewer Fund Assumptions Working under the take or pay contract, the Water and Sewer Fund is always an issue!! Rate study planned for Fall of 2016 Fifty-seven (57) days of working capital is projected for 16-17 to (0) days in 18-19. Financial policies – 45 days of working capital. Three-Year Forecast includes all of the NTMWD increases passed thru to customers: –Water – 10% per year - Approximately $6M a year –Sewer – 15%, 1.8% and 1.8% –Upper East Fork Interceptor – 21%, 3%, 3.5% Remaining amount of W&S reserve fund - $5.75 million. Projected use of $1.0 million in 2017-18 and 2018-19. First time since 1993, revenue bond sale planned for June totaling $28.0 million for sewer projects. $10.0M is included for CIP Projects each year and $1.5M for Capital Reserve transfer.

19. THREE-YEAR FORECAST SUSTAINABILITY FUND SUMMARY 2016-2019

20. Sustainability Fund Assumptions Five (5) days of working capital is projected for 16-17. –2017-18 and 2018-19 are both projected to have deficit working days of capital in this forecast. Three-Year Forecast includes no rate increases. Last rate increase occurred in October 2008. –$11.25 per month for 68-gallon trash cart –$15.10 per month for 95-gallon trash cart (most common) Transfers remain at approximately $1.5 million per year. NTMWD landfill costs have increased 25% from $30.59 per ton in 2008 to $38.25 per ton in 15-16.

21. THREE-YEAR FORECAST CONVENTION & TOURISM FUND 2016-2019

23. OTHER FUNDS THREE-YEAR FORECAST SUMMARY Municipal Drainage Fund Recreation Revolving Fund Municipal Golf Course Fund

24. CONCLUSION – NEXT STEPS Budget Calendar

25. KEY DATES ON THE BUDGET CALENDAR FISCAL YEAR 2016-17 March 21 Budget & Research Department meets with City Manager and Deputy City Managers to present mid-year revenue and expenditure forecast, including the Three-Year Financial Forecast (FY 2016-19). Status of CIP discussed. March 28Budget presents 2015-16 Status Report and Three-Year Forecast to City Council for review and input. Made available on the City’s web site. March 29At Management Team meeting, Budget gives overview and distributes instructions, forms and department targets. June 14, 15City Manager reviews operating budget and CIP with department & 16heads. July 27 City Manager submits Recommended Budget and CIP Program to City Council. Copies available on the City’s web site and libraries.

26. August 3Grant Funding – City Council Budget Worksession. August 8Presentation of the Proposed CIP to the City Council Public Hearing on Operating Budget and Community Investment Program Approval of Appraisal Roll Vote on proposed tax rate increase August 13Council Work Session on the budget. August 221 st Public Hearing on tax rate. August 312 nd Public Hearing on tax rate. September 12Council adopts operating budget and CIP, and sets tax rate. October 1New fiscal year begins. KEY DATES ON THE BUDGET CALENDAR FISCAL YEAR 2016-17

27. QUESTIONS Director of Budget & Research - Karen Rhodes-Whitley 972-941-7472 karenr@plano.gov Budget Manager – Casey Srader 972-941-5152 caseys@plano.gov