City of Kyle, Texas

City Manager’s Presentation of Fiscal Year 2012-13 Proposed Budget August 1, 2012

Presentation Outline Proposed FY 2012-13 Budget • • • • • • • • • • Guiding Principles & Objectives for Budget Development All City Funds Budget Summary Overview & Budget Highlights – All City Funds General Fund Summary & Highlights – – – – – Sources & Uses of Funds Property Tax Sales Tax General Fund Transfer Significant Changes Water & Wastewater Utility Fund Summary & Highlights – – Sources & Uses of Funds Significant Changes Affecting Rates Other City Funds Capital Improvements Program (CIP) Overview of City’s Debt Position Funding For RM 150 Realignment Project Next Steps 2

Guiding Principles & Objectives For Development of Proposed FY 2012-13 Budget 1.

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City Council’s Budget Policy Directives Provisions for Delivery of All Basic Municipal Services Priority for Public Safety & Quality of Life Initiatives/Services Minimize Financial Impact on the Community Investment in City Workforce Prevent Employee Layoffs Improve Financial Integrity of Operating Funds & Fund Balances Compliance With General Fund Balance Requirements Development of Reasonable & Documented Revenue Estimates Full Disclosure, Transparency, & Public Involvement in the Budget Process 3

All City Funds Budget Summary: Total $41.6 Million Proposed FY 2012-13 Budget All Other, $220,809, 1% Bond/CIP, $11,632,207, 28% General Fund, $13,146,287, 31% Debt Service, $5,259,406, 13% Utility Fund, $11,302,205 , 27% 4

Overview & Budget Highlights – All City Funds Proposed FY 2012-13 Budget 1.

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Provisions for the Delivery of All Basic Municipal Services Increased Funding for Public Safety (Police, EMS & Fire) Pay Increases for Police Officers Under Meet & Confer Agreement Relocation of Police Headquarters to the Former Bank Building Continued Operations and Maintenance of All City Facilities Funding for Library Services Delivered From New Facility Reduction in Utility Transfer to General Fund No New Positions For City Departments No Layoff of City Employees Cost of Living Adjustment for Permanent City Positions 5

Proposed FY 2012-13 Budget Budget Summary & Highlights GENERAL FUND 6

General Fund Sources of Funds: Total $13.15 Million Proposed FY 2012-13 Budget Court Fines, $540,000, 4% Rec Fees, $276,550, 2% Franchise Fee, $829,574, 6% Other, $137,750 , 1% Solid Waste, $2,034,683, 15% Property Tax, $3,788,541 , 30% Dev Fees, $525,334, 4% Utility Transfer, $1,335,000 , 10% Sales Tax, $3,678,855, 28% 7

Property Tax Proposed FY 2012-13 Budget • • • • 2.26% Net Increase in 2012 Certified Taxable Property Valuation 2012 Certified Taxable Property Valuation = $1,460,041,460 (7/24/2012) 2011 Certified Taxable Property Valuation = $1,427,789,816 (7/25/2011) Proposed 2012 and Current 2011 Property Tax Rates: – Maintenance & Operations – Interest & Sinking Fund – Total Tax Rate Per $100/AV: 2011 $0.2361

$0.2484

$0.4845

2012 $0.2700

$0.2544

$0.5244

• • Proposed 2012 Tax Rate Increase: $0.0399 Per $100 AV Impact on Average Home in Kyle: $49.91 or $4.16 Per Month Average Homestead Value: $125,097 8

Property Tax Rate History From FY 1998 to FY 2012

City of Kyle Property Tax Rate History Fiscal Years 1988 - 2012

$0.700000

$0.600000

$0.500000

$0.400000

$0.300000

$0.200000

$0.100000

$0.000000

DEBT RATE 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Fiscal Year

M&O Rate 9

Comparison of Current Property Tax Rates Fiscal Year 2011-12

Comparison of Current Property Tax Rates (FY 2011-12) Per $100 Assessed Valuation

$0.800000

$0.700000

$0.600000

$0.500000

$0.400000

$0.300000

$0.200000

$0.100000

$0.000000

B ud a C ed ar P ar k G eo rg et ow n K yl e Le an de r Lo ck ha rt N ew B ra un fe ls P flu ge rv ille S an M ar co s S ch er tz S eg ui n U ni ve rs al C ity 10

Sales Tax Proposed FY 2012-13 Budget • • • 6.50% Growth Rate Assumed Based on Actual Collections in FY 2012 $3,678,855 Projected Sales Tax Revenue for FY 2013 $372,455 or 11.26% Increase From Approved FY 2012 Budget 4-Year Sales Tax Collection Trend

City Sales & Use Tax Collection - Monthly Actual 2010-11

$400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ October November December January February

2008-09 Actual

March

2009-10 Actual

April May

'2010-11 Actual

June July August September 11

Solid Waste Revenue Proposed FY 2012-13 Budget • • • • $2,034,683 Total Projected for Solid Waste Charges for FY 2013 $127,233 or 6.67% Increase Compared to Approved FY 2012 Budget 4.82% Increase in TDS Rates Effective April 1, 2013.

$0.50 Increase in Solid Waste Administrative Fee to $2.50 Per Month 12

Other Revenue Proposed FY 2012-13 Budget • • • • $2,295,708 Total Projected for All Other Revenue for FY 2013 $96,805 or 4.05% Decrease Compared to Approved FY 2012 Budget 5% Increase in Various Fees & Charges (Details in Fee Schedule) Breakdown of Other Revenue:  Franchise Fees $829,574     Court Fines Library Revenue Recreation Fees $540,000 $ 45,500 Development Fees $525,334 $276,550    License Fees Other Taxes Interest & Misc.

$ 1,950 $ 11,000 $ 65,800 $25,774 or 3.21% Increase $11,345 or 2.06% Decrease $4,750 or 9.45% Decrease $3,644 or 0.69% Decrease $1,750 or 0.64% Increase $110 or 5.98% Increase $2,000 or 22.22% Increase $106,700 or 61.86% Decrease 13

General Fund Transfer Proposed FY 2012-13 Budget • • • • $1,335,000 Transfer From the Utility Fund for FY 2013 - Compared to $1,635,000 Approved in Current Budget $300,000 or 18.35% Reduction in General Transfer $400,000 Reduction in General Fund Transfer Since FY 2010-11 5 to 7 Year Original Transition Plan to Set General Fund Transfer at 10% of Gross Utility Revenue; Will Be Earlier Proposed General Fund Transfer Amount is 12.39% of Gross Utility Revenue 14

General Fund Uses of Funds: Total $13.15 Million Proposed FY 2012-13 Budget Parks & Rec, $1,863,586, Street Maint., $555,999, 4% Incentives, $505,000, 4% 14% Library, $407,518, 3% Other, $377,673, 3% Administration, $1,362,871, 10% Community Dev, $943,212, 7% Solid Waste, $1,737,879, 13% Financial Svcs, $880,066, 7% Public Safety, $4,512,482, 35% 15

General Fund - Significant Changes Proposed FY 2012-13 Budget • • • • • • • • $87,581 For Police Officers’ Pay Increase $505,000 For Incentive Payments For 380 Agreements ~ $48,500 or 10.62% Increase From $456,500 Approved in Current Budget $1,335,000 For General Fund Transfer ~ $300,000 or 18.35% Reduction From $1,635,000 Approved in Current Budget $318,064 For EMS ~ $44,164 or 16.12% Increase From $273,900 Approved in Current Budget $28,594 For Kyle Fire Department $709,465 For TIRZ Debt Service ~ $104,492 or 17.27% Increase From $604,973 Approved in Current Budget $156,826 For Fuel Costs ~ $26,696 or 20.50% Increase From $130,250 Approved in Current Budget CONTINUED 16

General Fund - Significant Changes (Continued) Proposed FY 2012-13 Budget • • • • • • $191,604 For Overtime Compensation ~ $39,664 or 26.08% Increase From $152,100 Approved in Current Budget $144,000 For Legal Services ~ $12,100 or 9.17% Increase From $131,900 Approved in Current Budget $101,355 For Training ~ $18,744 or 22.69% Increase From $82,611 Approved in Current Budget $161,061 For Cost of Living Adjustment $477,675 For Retirement System ~ $28,776 or 6.41% Increase From 448,899 Approved in Current Budget $589,751 For Health Insurance ~ $46,207 or 8.50% Increase From $543,544 Approved in Current Budget 17

General Fund Reserves Proposed FY 2012-13 Budget • • • • • • City Charter Requires 25% of Annual Operating Budget – $3,259,399 Based on Proposed Budget Debt Management Policy Requires Equivalent of 90 Days Expenditures for General Fund Set Aside in a Separate “Emergency Reserve Fund” within 10 Years – $3,214,750 Based on Proposed Budget $350,000 Planned Transfer From General Fund Balance to the Emergency Reserve Fund (1 st Year) Proposed Budget Improves Fund Balance for the General Fund Compliance With City Charter and Debt Management Policy Requirements Projected Ending General Fund Balance for FY 2013 = $3,383,058 18

Proposed FY 2012-13 Budget Budget Summary & Highlights WATER & WASTEWATER UTILITY FUND 19

Water & Wastewater Utility Fund Sources of Funds: Total $10.77 Million Proposed FY 2012-13 Budget Interest/Other, $68,500, 1% Wastew ater Service, $4,256,213, 40% Water Service, $6,447,448, 59% 20

Water & Wastewater Utility Fund Uses of Funds: Total $11.30 Million Proposed FY 2012-13 Budget Gen Fund Trf, $1,335,000, 12% Debt Service, $923,793, 8% Administration, $850,810, Other, $127,645, 1% 8% Utility Billing, $570,331, 5% Water Opns, $1,256,296, 11% Wastew ater Opns, $2,394,473, 21% Water Supply, $3,835,593, 34% 21

Water & Wastewater Utility Fund Budget Summary & Highlights Proposed FY 2012-13 Budget • • • • • • • • Current Water & Wastewater Rates Are Inadequate to Cover All Required Utility Expenditures Funding Gap Analysis Results: Water $1.8 Million & Wastewater $0.45 Million For Next Year Only Year 2 of the 3-Year Rate Plan For Water & Wastewater Rates Fiscal Year 2011-12: 2012-13: 2013-14: Water 30% 20% 20% Wastewater 25% 20% 10% 20% Water System-Wide Rate Increase in FY 2013 (Year 2 of 3) 20% Wastewater System-Wide Rate Increase in FY 2013 (Year 2 of 3) $530,043 Funding Gap Even After 2nd Year Rate Increase Rate Increase Applied to Monthly Charge & Volumetric Rates For All Inside & Outside City Customer Classes Rate Change Will Be Effective With First Bill Mailed After October 1, 2012 22

Water & Wastewater Utility Fund Comparison of Average Monthly Residential Bill Proposed FY 2012-13 Budget

Comparison of Current Average Monthly Residential Bill Water and Wastewater Service For FY 2011-12

$120.00

$100.00

$80.00

$60.00

$40.00

$20.00

$0.00

Bu da C ed ar P ar k G eo rg et ow n Kyl e Le an de r Lo ckh ar t N ew B ra un fe ls Pf lu ge rvi lle Sa n M ar co s Sch er tz Se gu in U ni ve rsa l C ity 23

Water & Wastewater Utility Fund Significant Changes Affecting Rates Proposed FY 2012-13 Budget • • • • • • • • $341,382 or 3.94% Increase in Total Operating Costs $239,739 or 9.24% Increase For GBRA’s O&M Costs GBRA Contract Amendment in 2011 Increased Capacity: – Water Supply Increased From 2,957 Ac. Ft. to 5,443 Ac. Ft.

– Treatment/Pipeline Capacity Increased From 2.64 MGD to 4.94 MGD $1,335,000 For General Fund Transfer ~ $300,000 or 18.35% Reduction From $1,635,000 Approved in Current Budget $79,595 For Fuel Costs ~ $20,595 or 34.91% Increase From $59,000 Approved in Current Budget $71,400 For Overtime Compensation ~ $19,900 or 38.64% Increase From $51,500 Approved in Current Budget $60,003 Included For Cost of Living Adjustment CONTINUED 24

Water & Wastewater Utility Fund Significant Changes Affecting Rates (Continued) Proposed FY 2012-13 Budget • • • $140,280 For Retirements System (TMRS) ~ $15,934 or 12.81% From $124,346 Approved in Current Budget $171,053 For Health Insurance ~ $14,916 or 9.55% From $156,137 Approved in Current Budget Funding Not Included For Next Capacity Expansion at the City’s Wastewater Treatment Plant 25

Other City Funds Proposed FY 2012-13 Budget Budget Summary & Highlights OTHER CITY FUNDS 26

Other City Funds: Total $17.11 Million Proposed FY 2012-13 Budget Proposed Budget For All Other City Funds Totals $17.11 Million. Expenditure Details Provided in the Budget Document.

– Emergency Reserve Fund – Transportation Fund – Court Special Revenue Fund – Economic Development Fund – Debt Service Fund – Park Development Fund – 2008 Contractual Obligation Fund – 2010 Contractual Obligation Fund – Water Impact Fee Fund – Wastewater Impact Fee Fund – Water Reuse Study Fund – Public Educational & Govt. Fund – Other Post Employee Benefit Fund (OPEB) - Police Forfeiture Fund - Police Special Revenue Fund - Hotel Occupancy Fund - Library Building Fund - TIRZ Debt Service Fund - 2007 Contractual Obligation Fund - 2009 Tax Notes Fund - Water CIP Fund - Wastewater CIP Fund - Grant Fund - Train Depot Donation Fund - Structural Demolition Fund 27

Capital Improvements Program (CIP) Proposed FY 2012-13 Budget Total: $9.50 Million • • • Following Capital Projects Are Included In The Proposed FY 2012-13 Budget: $5,000,000 For Southside Wastewater Collection System $4,500,000 For RM 150 Realignment No Funding Included For Envision Kyle Or Other Capital Projects 28

Capital Outlay (Non CIP): Total $0 Proposed FY 2012-13 Budget • No Non CIP Capital Outlay Items Are Included In The Proposed FY 2012-13 Budget For Replace or New Trucks, Heavy Equipment, Police Vehicles, Etc.

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Overview of City’s Debt Position Proposed FY 2012-13 Budget Overview of City’s Debt Position and Payments Due: • $68.21 Million Total Debt Outstanding (Principal Only) on October 1, 2012 • $5,259,406 Due in FY 2013 For Principal & Interest Payments • $190,146 or 3.75% Increase From Current Year • $425,000 Offset Applied For Debt Service As Authorized by City Council Note: This is Year 3 of the 4-Year Debt Management Plan • $1.0 Million Increase in Debt Service Payments in FY 2014 • Plans for Refunding $12.5 Million SIB II Loan (TIRZ) Plus Accrued Interest in Late 2013 to Stabilize Debt Service Increase - Refunding Subject to Financial Market Conditions At the Time 30

Debt Service Requirements Proposed FY 2012-13 Budget

City of Kyle, Texas Aggregate Debt Service by Fiscal Year

$7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $ 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Principal Interest 31

Funding for RM 150 Realignment Project Proposed FY 2012-13 Budget • • $4,500,000 Included in the Proposed FY 2012 13 Budget to Fund City’s Share of RM 150 Realignment Project As Authorized By City Council, Reprogrammed Bond & Developer Funds Provided Total Funding: – $3,000,000 Available and Budgeted in the 2008 Contractual Obligation Fund – $268,268 From Balance in RM 150 Lot Fee Accounts (Waterleaf Falls, Woodland Park, Post Oak, and Four Seasons) – $656,471 From 2008 Contractual Obligation Fund by Reclassifying IT Costs to 2009 Tax Notes Fund – $575,261 From 2008 Contractual Obligation Fund by Reclassifying HCPUA O&M Costs to Water and Wastewater Utility Fund 32

Next Steps – Budget Process Proposed FY 2012-13 Budget August 1: August 1: Resolution For Consideration of Tax Rate Increase August 2 – 23: Council Budget Work Sessions & Public Hearings August 15: August 23: Proposed Budget Presented to City Council Required Public Hearing on Property Tax Rate September 4: September 5: Required Public Hearing on Property Tax Rate 1 st Reading For Budget Adoption 1 st Reading For Property Tax Rate Adoption 2 nd Reading For Budget Adoption 2 nd Reading For Property Tax Rate Adoption 33

Proposed FY 2012-13 Budget Detailed Budget Information Available • Complete Copies of the Proposed Budget Available For Review – City Hall – Public Library • PDF Version of the Proposed Budget Available on the City’s Website – www.cityofkyle.com

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