1. The Rocky Road to Financial Stability
The Rocky Road to Financial Stability! Tom Duensing, Assistant City Manager Vicki Rios, Budget and Finance Director Lisette Camacho, Assistant Budget and Finance Director
GFOAZ Winter Conference
February 17, 2017

2. Where are we?

3. Where are we?

4. Where are we?

5. Where are we?

6. Where are we?
On borrowing $50,000,000 over 20 years, saving .5% gives you 250,000 in the first year. Last year, the city was able to refinance a large portion of its debt and realized $24 million in savings over the life of the bonds that were refinanced.

8. Where are we? Over 20% Citywide Staff Turnover External Audit Findings
Attorney General Investigation
Liquidity Issues

9. General Fund Forecast – Dec. 17, 2013
FY14-15
FY15-16
FY16-17
FY17-18
FY18-19
Beginning Fund Balance
$ 17,003,850
($ 241,058)
($12,707,661)
($27,026,856)
(58,769,992)
Operating Revenue
172,453,862
178,838,480
185,769,581
168,163,763
172,766,038
Operating Expenditures
(181,076,077)
(182,363,159)
(190,800,298)
(191,498,710)
(193,806,382)
Contingency
(8,622,693)
(8,941,924)
(9,288,479)
(8,408,188)
(8,638,302)
Total Surplus/(Deficit)
(17,244,908)
(12,466,603)
(14,319,195)
(31,743,135)
(29,678,646)
Ending Fund Balance
($241,058)
($58,769,992)
(88,448,638)
The Total Surplus/(Deficit) shows structural balance
Average surplus $1.1m/year
FY increased debt costs

10. How did we get here? Arena Deal $50 million in payments to the NHL
Interest bearing inter-fund loans
Temporary Sales Tax
Due to Expire
No designated “Controller” position to be responsible for internal controls and audit issues

11. How do we get out of here? Council options
Bankruptcy
Extend sales tax indefinitely
Big cuts
Refund debt
Reclassify loan
New arena agreement
Compensation study
Police and Fire Department service level studies
Recommend and discuss financial policies
Investment policy
Debt policy
Fund balance policy

12. How do we get out of here? Staff decisions New processes
Hire the best people
New financial advisors
New investment advisors
Controller
Contract Manager
New processes
Five-year forecast
Prepared in advance of the budget
Adopt a balanced budget

13. How do we get out of here? Arena management agreement
Typical arena structure – prime tenant
July 2013 agreement cited in bond rating reports
In June 2015, management agreement was terminated
38-511
Strictly a financial decision
Misconceptions
Current arena agreement
We want the team to stay and play in the publicly funded facility

14. Where are we now?

15. Where are we now?
On borrowing $50,000,000 over 20 years, saving .5% gives you 250,000 in the first year. Last year, the city was able to refinance a large portion of its debt and realized $24 million in savings over the life of the bonds that were refinanced.

16. Where are we now?
On borrowing $50,000,000 over 20 years, saving .5% gives you 250,000 in the first year. Last year, the city was able to refinance a large portion of its debt and realized $24 million in savings over the life of the bonds that were refinanced.

17. Where are we now? Employee TURNOVER

18. General Fund Forecast FY17-18 FY18-19 FY19-20 FY20-21 FY21-22
Beginning Fund Balance
$ 41,265,832
$ 42,633,907
$ 43,636,827
$ 45,643,582
$ 46,118,297
Operating Revenue
215,832,322
221,979,801
228,331,146
232,380,682
235,350,410
Operating Expenditures
(209,490,807)
(210,380,433)
(215,376,615)
(219,395,352)
(218,587,050)
Net Transfers
(2,973,440)
(8,596,448)
(8,947,776)
(10,310,615)
(11,127,427)
Contingency
(2,000,000)
(2,200,000)
(5,000,000)
Total Surplus/(Deficit)
1,368,075
1,002,920
2,006,755
474,715
635,933
Ending Fund Balance
$ 46,754,230
The Total Surplus/(Deficit) shows structural balance
Average surplus $1.1m/year
FY increased debt costs

19. Where are we now?

20. Where are we now? Lowered Citywide Staff Turnover
Compensation study
Employee raises
No External Audit Findings
Attorney General Investigation ended
No findings
No more talk of bankruptcy
Parks and libraries
Chickens
Rattlesnakes

21. Use the map! Look at it like a engineering problem!
Focus on the goals!
Remember we didn’t get here overnight!
Be open! Be transparent!
No sugar coating!
There are more challenges to come!

22. Questions?
Contact information:
Tom Duensing, ,
Vicki Rios, ,
Lisette Camacho, ,