HomeMy WebLinkAbout175-01 RESOLUTION•
NAME OF FILE:
CROSS REFERENCE:
Resolution No. 175-01
4
12/18/01
Resolution No. 175-01
12/20/01
Memo to Stephen Davis, Budget & Research
NOTES:
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MICROFILMED
City of Fayetteville, Arkansas (i2as. /Z5 o,)
Proposed
2002 Annual Budget
and
Work Program
City Council and Other Elected Officials
Robert Reynolds, Ward 1 - Position 1
Brenda Thiel, Ward 1 - Position 2
Cyrus Young, Ward 2 - Position 1
Randy Zurcher, Ward 2 - Position 2
Trent Trumbo, Ward 3 - Position 1
Bob Davis, Ward 3 - Position 2
Kevin Santos, Ward 4 - Position 1
Lioneld Jordan, Ward 4 - Position 2
Kit Williams, City Attorney
Heather Woodruff, City Clerk/Treasurer
Rudy Moore, Municipal Judge
Submitted by
Dan Coody, Mayor
Hugh Earnest, Urban Development Director
Gary Dumas, Environmental Services Director
Ted H. Webber, Administrative Services Director
Richard Watson, Police Chief
Chris Bosch, Fire Chief
Greg Boettcher, Public Works Director
Prepared by
Stephen Davis, Budget Manager
Kevin Springer, Senior Financial Analyst
Barbara Fell, Research Analyst
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Table of Contents
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Budget Message
Budget Process & Policies
Fund Summaries
General Government
Urban Development
Environmental Services
Administrative Services
Police
Fire
Public Works
Capital and Debt
Appendix
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FAYETTEVILLE
KE CITY OF FAYETTEVILLE, ARKANSAS
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November 30, 2001
Members of the City Council and
Citizens of Fayetteville:
I hereby present the 2002 Proposed Budget for the City of Fayetteville, Arkansas. It has been
prepared and submitted in accordance with Arkansas statutes and City ordinances, which require that
the Mayor, under the aldennanic form of government, submit to the City Council the annual budget
for approval. This budget contains funding for all operating funds and incorporates the 2002 capital
projects from the proposed 2002-2006 Capital Improvements Program, as amended.
2001 - A YEAR IN TRANSITION
This year has been a year of transition. In January, I and three new aldermen entered office. In
February, a new City Attorney was selected when the former City Attorney retired. In addition to
the newly elected officials, new senior management was hired to manage each department with the
exception of the Police Department.
Economics have played a very large role during this past year. The City and region had experienced
continued growth in the local and regional economy, as measured by sales tax collection growth, for
most of the past ten years. In the last quarter of 2000, the City and region experienced a slowdown
in the growth of sales and use taxes. The trend established in late 2000 has continued throughout
most of 2001. This slowdown in revenue growth has necessitated the use of reserves to fund
ongoing operations for the City's General Fund, Street Fund and Parks Development Fund.
Perhaps the single most important issue facing the City during 2001, has been finding a method to
finance the Wastewater System Improvements Project (WSIP). (The WSIP will be discussed in
more detail later in this letter.) On November 6, Fayetteville citizens overwhelmingly approved a
dedicated % % sales and use tax to fund the debt service of a low interest loan from the Arkansas
Soil & Water Conservation Commission. The % % sales and use tax will commence after the
special 1 % city sales and use tax for the New Central Library expires on March 31, 2002.
In January, the City established a Community Affairs Office whose purpose is to assist neighborhood
organizations in developing and identifying solutions through outreach and services. Currently there
are 12 registered neighborhood associations. Other responsibilities of this office include the
following: information and public concern follow through to ensure citizen concems are addressed;
City representation on various committees, boards, and functions; acting as a liaison between the
community and the City; federal and state grant research and writing; volunteer coordination for
special projects; and public notification services including public forum organization.
113 WEST MOUNTAIN 72701 501521-7700
FAX 501 575 8257
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In January the Serafini, et al vs City of Fayetteville, et. al. lawsuit was settled. The settlement, in
part, called for the City to establish a Conservation Fund to preserve wooded spaces within the City
of Fayetteville and was to be funded at $225,000 per year for two years. This budget contains
funding for the final payment.
The City accepted a grant that provided the majority of the funding for three police officers. The
three new police officers were approved by City Council as community policing task force officers.
The new team will focus on crime problems in individual neighborhoods and develop strategies, in
conjunction with other public service agencies or community groups, to assist the neighborhood in
resolving the underlying issues. Additionally, City Council approved nine new positions for the
Urban Development, Environmental Services, and Public Works departments and the Office of the
Mayor and City Clerk divisions.
During 2001, public transit issues for the four county region (Benton, Carroll, Madison and
Washington) resulted in the city and county governments forming a public nonprofit organization
to provide public transit services for the region. The public transit nonprofit is still forming. The
new organization, Ozark Regional Transit, Inc. began operations October 1, 2001 and initially is
being funded by an operational grant from the Arkansas Highway and Transportation Department
(AHTD). City funding for public transit operations for 2002 is included in this budget. This new
public transit organization grew out of study funded by a grant from the AHTD with local matching
funding from the cities of Fayetteville, Springdale, Rogers, and Bentonville The study concluded
that the best method to provide public transit in the region was through a public nonprofit
organization or transit authority which the cities and counties opted to form.
Additionally, this budget continues sufficient funding for trolley services through the first six months
of 2002. This will enable the City, Razorback Transit and/or Ozark Regional Transit sufficient time
to develop a more sustainable public transit system to serve the needs of the community. This
budget continues funding for Razorback Transit.
The City conducted a citizen survey to measure the level and quality of service currently provided.
The survey was conducted in August and was mailed to 1,200 randomly selected residents. The
survey asked seventy-six questions about a variety of city services. 471 responses were received
which translates into a confidence level of 95% with a 4.5% error factor. The results of the survey
were used to assist City staff in determining which programs/funding would be reduced for this
budget. Two tables from the survey report are included in the Appendix of this budget. The tables
are labeled "Overall Quality of Service" and "Service Levels & Funding."
Status of Projects Budgeted for 2001
The City has approximately $47.8 million in capital projects budgeted for 2001. The current status
of the major projects budgeted for 2001 are listed below:
Street, Drainage, and Transportation Improvements $ 12.6 million
• Dickson Street Enhancements ($2.2 Million). The project has acquired the last few parcels of
nghts-of-way and is awaiting AHTD final approval to let the project for bid. The project
estimate is currently $3.1 million. The budget shortfall is proposed to be made up from project
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savings in the 6th Street Extension project ($.3 million), utilizing a portion of the In -House
Sidewalk project ($.3 million), and project savings from various other completed street projects
($.3 million).
• Old Missouri Road Improvements ($1.5 Million). The Street Committee has selected a design
option for the street improvement. The project is currently in design development.
• Cleveland Street Improvements ($ .8 Million). The project is essentially designed and must
follow improvements along Garland Street. The Garland Street improvements are being
designed and constructed by the AHTD.
• In -House Pavement Improvements ($1.1 Million). Approximately 79,764 square yards of
asphalt has been laid so far this season.
• In -House Sidewalk Improvements ($0.8 Million). The project focus for 2001 is to complete the
sidewalk segments nearest schools and then begin to fill-in segments around City parks.
Additionally, the project budget is being used to fund two other projects that are currently in
progress and in need of additional funding: Dickson Street Enhancement Project ($285,000) and
Fayetteville Multi -Use Trails ($175,000). Finally, an enhancement grant is being applied for
that, if approved, will require a local match of 20% or approximately $90,000. The grant will
address up to three significant sidewalk segments within the City.
• Steele Property - Street Improvements ($.6 million). The project is complete.
• Fayetteville Multi -Use Trails ($0.8 Million). Two trail segments have been bid and both
construction contracts have been awarded. The total project is estimated to cost approximately
$1.4 million. The City intends to apply for an additional enhancement grant that, if approved,
should provide the additional funding needed to complete the original project scope. The grant
will require a 20% local match that is expected to be funded from the project savings from
completed sidewalk projects and a portion of the In -House Sidewalk project.
• Hollywood Street - 6th Street & Sang Avenue Intersection ($.4 million). The project is
essentially designed and is expected to be advertised for bid early in the first quarter of 2002.
Water & Sewer Improvements $10.8 million
• Wastewater System Improvements Project ($.4 Million). The preliminary engineering contracts
have been essentially completed and a project funding referendum was approved on November
6, 2001.
• Sanitary Sewer Rehabilitation ($2.6 Million). The engineering and construction contracts for
the sanitary sewer system rehabilitation planned for 2001 have been awarded.
• Water & Sewer Operations Building ($2.0 million). This project is currently in design and is
anticipated to be ready for bid in the first quarter of 2002.
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Other significant projects:
• Town Center/Parking Garage ($3.3 Million). The project is complete.
• Drake Field Pavement Maintenance & Rehabilitation ($2.8 Million). McClinton -Anchor was
awarded the construction contract at the September 4, 2001 City Council meeting. Construction
is underway with an estimated completion in the first quarter of 2002.
• New Central Library Building ($1.5 Million) The project is in design and is expected to be bid
in April 2002. Land acquisition is expected to be completed in the fourth quarter of 2001.
• Research & Technology Park ($1.5 million). The City, the Chamber of Commerce, and the
University of Arkansas are currently evaluating partial development options for the property
fronting I-540 and expansion of the Genesis site fronting South School Avenue.
• Walker Park Senior Center ($2 0 million). The project is under construction and is expected to
be complete in the second quarter of 2002.
• Radio System Upgrade ($2.0 million). The project is essentially complete. The City is in the
thirty day acceptance period.
2002 - THE YEAR AHEAD
The 2002 Proposed Budget for the City of Fayetteville continues to build on philosophies of
enhanced customer service, cost-effective government, and responsive government. With the
assistance of the City Council and continued input from the citizens of Fayetteville, there are a
number of projects, programs, and initiatives that can be accomplished. Together, we must face the
challenges to be met in 2002 to improve the quality of life in Fayetteville. The following is a
discussion of some of the issues, challenges, and highlights contained in the 2002 Proposed Budget.
Issues and Challenges
Issue: Use of Reserves to Fund Ongoing Operations for General Fund and Street Fund
The 2001 Adopted Budget utilized reserves to fund ongoing operations for General Fund and Street
Fund. In 2002, the City's General Fund revenue growth is projected to be approximately 1% more
than actual 2000 revenues. Projections made for General Fund in as early as 1998, indicated that
reserves would be needed to fund ongoing operations beginning with the 2001 budget. Projections
of revenue and expenditures for General Fund presented in late May, 2001 indicated the continued
need for additional revenue to fund ongoing operations. The need for additional revenue is projected
to grow from approximately two ($2.0) million in 2002 to approximately seven ($7.0) million in
2005. Use of reserves can be used for one or two years before the City exhausts its reserve balance
in General Fund. A solution to provide additional revenue for ongoing operations and preserve the
reserve balance in General Fund would be to reallocate the distribution of city sales tax to fund more
operational expenses and Less capital funding. The city sales tax is required to be re -authorized by
voters prior to June 30, 2003.
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The largest cost element in General Fund is personnel services. Personnel services currently make
up approximately 79% of the expenditures in General Fund. The City has a biennial pay plan that
is reviewed and then adjusted, if needed. The cost to implement the full pay plan update and
maintain routine salary increases for General Fund for 2002 is approximately $1.4 million. The
City's group medical plan renewal contains a cost increase for General Fund of approximately
$329,000. These two items comprise the majority of the projected use of General Fund reserves for
2002. City staff identified approximately $1.0 million in cost reductions and an additional $300,000
in cost shifts from General Fund to either Street Fund, Parks Development Fund, or Replacement
Fund. These expense reductions or cost shifts reduce the ability to provide the services Fayetteville
citizens have come to expect and staff is capable of providing. A listing of the budget reductions
by division is included following this letter. Additionally, the proposed funding restoration
methodology is included below in the 2002 Financial Activity Summary section of this letter.
The City is expected to have approximately $6.0 million in reserves at the end of 2002. A minimum
reserve level of $4.5 million or 15% of annual expenditures is proposed.
Street Fund's revenue is primarily based on two revenue sources; State Turnback and a proportional
share of the Washington County Road millage. For 2002, State Tumback is projected to remain at
$46 per capita. Washington County is expected to request reimbursement for the City's share of the
Hicks vs. City of Fayetteville, et al (Millage Rollback) lawsuit. The City's cost is expected to be
less than $214,000. The City's portion of the lawsuit cost is based on the value of refunds and the
administration cost of the refunding process as well as a proportional share of the legal fees paid by
Washington County to the plaintiffs attorneys.
Issue: Uncontrollable Costs in General Fund
Beginning in 2000 and continuing through 2002, the City's operating budgets have been and will be
impacted by utility expenses and property and casualty insurance premiums. Insurance premiums
increased city-wide by approximately $104,000 above actual 2001 level for 2002 and utility expenses
are budgeted to increase $237,000 above 2001 utility expense. The majority of the increase in
insurance is in General Fund.
Issue: Unfunded mandates
Unfunded federal and state mandates continue to place a burden on local governments nationwide
and Fayetteville is no exception. In addition to allocating resources to meet the requirements of the
Clean Water Act and the American with Disabilities Act (ADA), the City must allocate funds to
comply with the regulations for commercial driver license holders, licensing requirements for solid
waste transfer station workers, and licensing requirements in the water and wastewater areas.
The United States Environmental Protection Agency posted regulations governing storm water
management requirements for smaller cities in November 1999. Based on population, the City has
to comply with the regulations. These regulations are commonly referred to as the Phase II Storm
Water Management regulations. Within three years and three months from the date of publication
of the final rule, the City will be required to obtain permit coverage. In order to comply with the
regulations, the City must either add staff or contract with a consultant.
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During 2001, City staff continued developing implementation plans to insure compliance with the
Governmental Accounting Standards Board (GASB) Statement No. 34. For more than a decade and
a half, GASB has been working on a project designed to change the framework of financial reporting
for state and local governments. In June 1999, the GASB marked the completion of this project with
the issuance of GASB Statement No. 34, Basic Financial Statements -and Management's Discussion
and Analysis -for State and Local Governments. Without a doubt, GASB Statement No. 34
represents the most important single change in the history of accounting and financial reporting for
state and local governments. The Statement was developed to make annual reports easier to
understand and more useful to the people who use governmental financial information to make
decisions (or who may do so in the future): legislators, their staff, and members of oversight bodies;
investors, creditors, and others who provide resources to governments; and citizen groups and the
public in general. Since the City of Fayetteville is a government with total revenues of $10 million
or more, but less than $100 million, implementation of the new pronouncement will be required for
the fiscal years beginning after June 15, 2002 (i.e. Fiscal Year 2003).
Challenge. Implementation of the Wastewater System Improvements Project
As stated above, the citizens approved a' % sale and use tax to fund the debt service for the
Wastewater System Improvement Project (WSIP). The WSIP is a project valued at $120 million that
will provide the City with a second wastewater treatment plant, improvements to the existing
wastewater treatment plant, improvements to the sewer collection system, and the elimination of
several lift stations. Additional engineering contracts will have to be approved by City Council
before the consulting engineers can proceed with design development. These contracts are expected
to be submitted for City Council review and approval in the first quarter of 2002. Additionally, the
financing documents must be approved by City Council and are expected to be ready in the first
quarter of 2002. The project is anticipated to be ready for construction by mid -year 2003.
Challenge: Revive Drake Field
The City continues to search for means of keeping Drake Field viable and active. The marketing
focus will continue on increasing corporate and general aviation activity. The successful outcome
of this effort must involve all of the stakeholders in creating a viable and self sustaining airport. To
that end, the City has recruited a new Aviation and Economic Development Director that has
extensive experience in re-establishing airfields to economic vitality.
Challenge: Continued Waste Stream Diversion, Revenue Enhancements and Cost Savings in
Solid Waste
The Solid Waste Division is proposing to move to a cart based collection system for residential
customers during 2002. City Council will be asked to amend the solid waste ordinances, fees, and
collection methodology prior to changing to a cart system. This budget contains $880,000 to
purchase residential carts for the new program. Additionally, the current residential collection
vehicles, already scheduled for replacement in 2002, will be replaced with the vehicles needed to
implement the cart system. The units required for the cart system are approximately $35,000 more
than the traditional rear loader unit currently in use. The move to the cart system is expected to save
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labor cost by reducing the number of employees required for each route as well as save cost related
. to on the job injuries.
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Goals and Objectives
Below is a brief review of some of the City-wide goals and objectives.
Emphasis on Youth and Families
The City has an established history of encouraging strong families and providing quality programs
for our youth and families This budget continues this effort with on-going funding and City support
for the Fayetteville Boys & Girls Club and the Yvonne Richardson Community Center. Additional
activities that support our emphasis on youth and families are listed below:
• Summer Concert Series - The summer concert series is produced and managed by the Parks &
Recreation Division and provides the opportunity for families to enjoy a variety of music in our
parks. During 2001, there were eight performances with approximately 18,000 citizens
participating. This year the City is planning another eight concerts to be held in Gulley Park.
In addition to the City funded concert series, the Northwest Arkansas Symphony annually offers
a free performance at Wilson Park.
• Campus/Community Coalition on Alcohol - The Campus/Community Coalition is a joint effort
between the City and the University of Arkansas. Its purpose is to alleviate the abuse of alcohol
by underage citizens, with the primary focus on the university student population and the safety
of all Fayetteville citizens.
• City funding for non-profit agencies contributes to their ability to provide programming for youth
and families. For example; approximately 6,400 adults and children visited the Arkansas Air
Museum during the first six months of 2001; the Fayetteville Boys & Girls Club offered youth
programming to over 8,700 participants in their arts & crafts program and another 9,450
participants on a drop-in basis during the year; Arkansas Athletes Outreach provided assemblies
for approximately 4,800 middle school students in three communities; and First Night
Fayetteville involves youth and family all year long in preparation for the new years eve
celebration.
• City divisions offering youth and family services range from the Police Department with School
Resource Officers and the D.A.R.E. program to the Fayetteville Public Library's youth lock -in
Through September 2001, the D.A.R.E. program had over 11,000 contacts with children. The
Fire Prevention Bureau has used the fire safety house to provide information on house fires and
fire danger to over 2,000 youth and 200 adults. The Fire Department also has a fire safety school
with over 2,900 participants. Over 250 students participated in a program offered by Public
Lands maintenance on growing trees from seeds. Parks & Recreation Division provides
recreational opportunities to over 49,000 participants. Library services contnbutes to the
program offerings by providing numerous services, two of which are the summer reading
program with over 1,000 participants in an eight week period and the lock -ins which are limited
to 35 participants at each event.
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This budget will provide funding to assist in the construction of new facilities for the new
Fayetteville Boys & Girls Club and provide funding to construct a new library.
Cooperative Agreements with Other Governmental Entities and Non -Profit Organizations
The City encourages cooperation between our neighboring cities, Washington County, and non-profit
agencies in providing services for citizens. Some examples of the cooperative efforts include: the
City and the Fayetteville School District jointly providing resources for School Resource Officers;
the D.A R.E. program is made available to all fifth grade students in the Fayetteville Public School
System and private schools in Fayetteville, with the West Fork Public School System contracting
with the City to provide D.A.R.E. programs for their fifth grade students; the City is the lead agency
for the 4th Judicial Drug Task Force; the City provides training for the Bicycle Patrol Programs for
Northwest Arkansas and personnel for officer training; Animal Sheltering agreements with
Washington County and nine other cities in the county; and City participation in funding for
Razorback Transit, Central Emergency Medical Services, and Ozark Regional Transit. Economic
development initiatives are pursued in conjunction with the University of Arkansas Genesis
Incubator and Fayetteville Chamber of Commerce.
Downtown/Dickson Revitalization
The City is actively involved in promoting the revitalization of the Downtown/Dickson Street area.
This budget contains continued funding for the Square Gardens, the downtown trolley operations,
and the Downtown/Dickson Enhancement Project.
Personnel Changes
The 2002 Budget does not add any 2002 Personnel Summary
new positions This budget does
recognize the transfer of one
position from Building
Maintenance to Parks
Development to perform the 153.63 Admin. Services
duties associated with Lights of the 75.75
Ozarks festival held during Fire General Govt.
December on the Fayetteville 89.00 34.50
Square; the transfer of a 0.5 FTE
from the Parks & Recreation Environ. Ser.
Division to the Public Lands 76.05
Public Works Urban Dev.
Maintenance Division to perform 132.75
duties related to maintaining the 82'6
Town Center Gardens. The
Advertising & Promotion
Commission is contracting with
the City to perform this work. This budget also recognizes the elimination of two FTE's: the
Assistant Public Works Director position and the WWTP Project Manager position. In addition to
644.28 Total Employees (Full Time Equivalent Basis)
Police
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the position changes in this budget, during 2001 City Council approved 12.5 positions: Police
Department staffing increased by three Police Officers; Engineering Division staffing increased with
the addition of an Engineer and a Project Inspector; Inspections Division increased by a 0.5 FTE for
a Property and Sign Inspector (Code Enforcement); a Environmental Services Director position was
added; a secretary was added in the Urban Development Division; a Trail Coordinator was added
to the Parks & Recreation Division; the Office of the Mayor Division added a Public Information
Clerk; the City Clerk Division added a codifier; and the Airport Division added two Field Based
Operator (FBO) Technicians.
The City began a systematic program to increase staffing for the Police and Fire departments
beginning with the 1992 Budget. From 1991 through the end of 2001, the City has added 46 police
officers, 34 firefighters, six civilian jailers, seven dispatchers, and ten and a half other non -civil
service employees to our public safety work force. As the City continues to grow, additional police
and fire personnel will be needed.
As decisions are made by City Council during 2002 concerning the method of collecting residential
solid waste and the equipment to be used, additional staff positions may be requested for the Solid
Waste Division and Fleet Division.
Program Initiatives
This budget contains funding to continue the motorcycle patrol program, the bicycle patrol program,
and the school resource officer program.
The City continues to improve solid waste collection and divert material from the landfill.
Residential curbside and apartment complex recycling and commercial cardboard programs have all
been expanded this year. During 2002, the City will continue to refine the recycling and solid waste
collection programs. Staff is proposing to eliminate the bag program by mid -year 2002 and
implement a cart based program for the residential collection program. Each household in the city
will receive a cart based on their choice of size. The cost to the citizen will be based on the size of
cart selected. This change is being proposed to increase efficiencies, reduce on the job injury, and
improve services.
This budget continues funding of City beautification projects through the Advertising & Promotion
Fund, General Fund, and the Sales Tax Capital Improvement Fund. The projects involve the Square
Gardens, entryways into the City, and the Forestry Program.
City staffis involved in a number of initiatives that will be brought to City Council for consideration,
discussion, and implementation. The initiatives listed below are highlights of the efforts being
planned for 2002:
• improvements in services to citizens and other customers,
• development of an impact fee policy and implementation options,
• development of a mission statement for economic development,
• discussion of an annexation policy, and
• discussion of smart growth and what smart growth means for Fayetteville
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Capital Improvements
The budget contains approximately $17.7 million in capital improvements for 2002. The capital
projects contained in the 2002 budget reflect primarily a pay-as-you-go philosophy and were
included in the 2002-2006 Capital Improvement Program (CIP). All the projects have been included
in the Proposed Budget at the same funding level as stated in the 2002-2006 CIP that are noted in
the Capital and Debt section of this document.
The major benefit of a pay-as-you-go approach is savings in interest expense. However, difficult
decisions must be made as to when projects will be scheduled. Some projects will simply have to
wait until future years.
Operations Cost Impact of Capital Projects
The majority of projects planned in the CIP will have a minor impact on operational budgets. Most
of the projects planned for next year replace high maintenance equipment, waterlines, sewer lines
or street segments. Replacing the high maintenance cost equipment, water lines, sewer lines, and
reconstructing street segments will free up maintenance budgets to address areas that currently have
a lesser priority. There are a few projects that will have a significant impact on operational budgets.
The most significant of these projects are listed below:
• Vehicles and Equipment: The vehicles and equipment purchases planned in the Shop Fund for
2002 will reduce annual maintenance expenses.
• The In -House Pavement Improvement Project will reduce maintenance costs for each street that
is overlaid. In addition, this project is projected to save the City more than $100,000 annually
over contracting for the same work.
• LED Traffic Signal Lens Replacement Project is expected to save approximately $45,000
annually in energy savings as well as provide the opportunity for future maintenance savings.
The LED traffic signal Lens will provide the opportunity for safer travel in storm conditions
because the traffic signals will be able to operate on battery packs in times of power outages.
2002 FINANCIAL ACTIVITY SUMMARY
During 2001, staff developed budget briefing materials for the City's operating funds. The briefing
materials included current year information as well as a projection for the next five years. While
multi-year budgeting is not a viable option for cities under Arkansas code, viewing current year
expenditure plans in the context of a multi-year impact is appropriate. In past budget years, the
City's administration included information in the proposed budget that projected revenue and
expenses for General Fund and Street Fund for up to three years in advance. This budget document
contains summary projections for these funds through 2006 as reflected in the graphs below.
Because of the reduction in revenue growth, staff identified approximately $1.3 million in budget
cuts or cost transfers for General Fund. City staff presented a budget briefing to City Council that
proposed to balance the General Fund budget for 2002. The reductions proposed at that time would
have eliminated some positions and reduced city services. City Council was clear that they did not
want to eliminate positions and they wanted the 2002 budget to impact City services the least amount
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possible. Staff then reviewed their operations budgets and made budget reductions to meet the goal
established by City Council. City Council will be requested to re -budget unexpended funds from
2001 to 2002 to supplement the 2002 appropriations. This request will be presented to City Council
in January for consideration and approval
After the City's revenues have stabilized and begin to grow, a plan needs to be in place to implement
the funding in a manageable format. The proposed plan to restore funding to operational programs
is listed below.
Basic Premise:
1. That funding for employee raises/benefits is applied evenly across all funds and employee
groups.
2. That funding is restored first to division(s)/program(s) that gave up basic required (mission
critical) items such as:
Restoration of reduced hours of operations.
Restoration of vacant/downgraded staff positions.
Restoration of materials necessary to perform fob function.
Restoration of tools necessary to perform job function. minor equipment,
software, contracted maintenance, etc.
Restoration of fleet equipment necessary to perform fob function.
3. That funding is next restored to division(s)/program(s) that gave up needed (but not mission
critical) items.
4. That funding is next restored to division(s)/program(s) that gave up resources for services that
are a benefit to the general public but not required to be provided.
Review Criteria
1. Analysis of restoring funding can begin after sales tax revenues (city and county) are above
budgeted revenues for three consecutive months and the trend line is increasing.
2. That all funding restoration, city-wide, can begin after the sales tax trend lines increase as stated
above and all other revenue for General Fund is above the current year's budget and last year's
actual and the trend lines are increasing.
Methodology
1. Uncontrollable expenses (insurance, utilities, fuel, etc) are restored first
2. Training required to retain State or regulatory agency licenses and certificates and skill set
retention is next restored.
3. Employees and employee related cost is restored.
4. Funding for contracted services is restored.
5. Other operating expenses are restored.
General Fund includes all activities of the City not accounted for in other funds. These activities are
funded primanly by the City's share of the county sales tax - $8.6 million; a portion of the City's
sales and use tax - $3.0 million; franchise fees - $3.2 million; charges for services - $1.2 million; and
intergovernmental - $1.6 million. The functions financed by the General Fund include general
government, administrative services, animal services, utility management services, fire and police,
parks & recreation, cable, public lands maintenance, traffic, engineering, planning, and inspections.
The property tax millage collected for General Fund operations was previously rescinded by the City
Council. This revenue loss is being replaced by a portion of the City Sales and Use Tax in the
amount of $3 million. During the past year, the City's portion of the County sales tax revenue has
reduced approximately 5% and is projected to grow approximately 1.2% in 2002 over estimated
2001 revenues. General Fund expenditures for 2002 include the cost of the pay range adjustment
and the increased premium for the group health care plan.
The 2002 Budget is submitted to City Council for their review and input with a planned use of fund
balance of $1.9 million. This budget preserves city staffing and impacts service delivery the least.
Budget reductions and cost shifts have occurred to enable this budget to be submitted. Below is a
listing of costs reduced/eliminated and/or costs shifted.
Description
Arkansas Air Museum
First Night Fayetteville
Arkansas Athletes Outreach
Downtown/Dickson
Enhancement Project, Inc.
Community Access Television
Razorback Transit
Ozark Regional Transit
Trolley
Vehicle Replacement Charges -
Police, Fire, & Animal Services.
Amount
reduced/ Funding
transferred remaining
7,000
12,000
10,000
22,500
34,500
20,000
38,318
65,000
171,811
Maintenance Worker III from
Building Maintenance 27,909
Fayetteville Boys & Girls Club
Transfer 46,590
Council on Aging Transfer 23,250
Replacement & Motor Pool Cost
- Fayetteville Boys & Girls Club 62,446
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0
0
Fund transferred to:
Funding eliminated
Funding eliminated
Funding eliminated
12,500 Funding reduced
34,500 Funding reduced
Street Fund
Street Fund
Street Fund
Replacement Fund
Parks Development Fund
Parks Development Fund
7,750 Parks Development Fund
46,590
Cost is absorbed as unrecovered
cost in Shop Fund.
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City divisions funded in General Fund also requested an additional $773,000 that could not be
considered due to funding constraints.
The chart below compares actual revenues and expenditures from 1998 through 2000, estimated
revenues and expenditures for 2001, budgeted revenues and expenditures for 2002, and projected
revenues and expenditures through 2006 with the current split of city sales tax collections. If the
current trends continue, City Council is faced with reallocating existing funding to more basic city
services or increasing revenue options.
23,500,000
21 ,000,000
18,500,000
16,000,000
13,500,000
11,000,000
General Fund
1998 1999
2000 2001 2002 2003 2004 2005 2006
Revenues Expenditures
The Street Fund is primarily financed by tumback revenues received from the State of Arkansas and
turnback monies received from the County Road Millage Tax. These monies are utilized to maintain
and repair City streets, rights-of-way, drainage, and City owned sidewalks
Currently, the Street Fund has use of reserves in 2002. The turnback from the State of Arkansas is
apportioned on a per capita basis. The projection for 2002 is that cities throughout Arkansas will
receive $46.00 per person. The Street Fund budget for County Road Millage Tax is based on a 1.16
mil levy with a maximum 3.0 mil levy for property located within the City limits.
New expenditures for 2002 can be attributed to adding public transit expenses and increases in
utility and insurance costs.
The chart below tracks actual Street Fund revenue and expenditures from 1998 through 2000 and
projects both revenue and expenditures through 2006 based on trends established from 1998 through
2000. Beginning in 2001, Street Fund operational expenditures are projected to be in excess of
revenues. Revenues for Street Fund are primarily motor fuel taxes collected by the State (state
tumback) and returned to the City on a per capita basis. The long term trend for state turnback is
relatively flat. The per capita rate for Street Fund in 1995 was $41.00 and in 2002 will be $46.00
or an increase of 12.2% over eight years. As the City continues to grow, additional revenue sources
will need to be identified to fund Street Fund activities.
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4,000,000
3,000,000
2,000,000
1,000,000
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Street Fund
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1998 1999 2000 2001 2002 2003 2004 2005 2006
Revenues Expenditures
The Advertising & Promotion Fund accounts for the revenue sources and uses of the Advertising
& Promotion Hotel, Motel, & Restaurant (HMR) tax. The funds are under the total control of the
Advertising & Promotion Commission (A&P).
The Parks Development Fund accounts for the revenue and expenditures of the Parks HMR tax
approved by the voters in 1995. The $1.4 million in planned expenditures for 2002 includes
approximately $549,000 in capital improvements. The fund is budgeted to utilize approximately
$91,000 of fund balance for 2002.
The Sales Tax Capital Improvements Fund accounts for the revenue and expenditures of the City
Sales and Use Tax which is used for acquisition and improvement projects as well as equipment
additions and replacements that are included in the City's five-year capital improvements program.
The fund also includes a $2,996,000 transfer to General Fund in 2002. The 2002 planned
expenditures include $10,108,000 in capital improvements The fund has a surplus of $1,074,000
for 2002. The majonty of the surplus in this fund is from grants received during 2001 for the
Arkansas Business Technology Park. A budget adjustment is proposed to recognize the grant
revenue and increase the project budget.
The Water & Sewer Fund accounts for the revenue sources as well as the operation and
maintenance expenses of the City's water and sewer system. This includes water purchases from
Beaver Water District, all water and sewer functions, the operation of the wastewater treatment plant,
and meter and backflow operations.
For 2002, the Water & Sewer Fund is projected to have a surplus of revenues over expenses prior
to depreciation expense. The last rate increase was approved by City Council in October 1997. The
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water purchases budgeted for 2002 represent the largest expenditure for operations in the fund at
$4.9 million. This represents approximately 31% of total operating expenditures. The wastewater
treatment plant operations are budgeted at $4.4 million, which represents approximately 26% of the
total operating expenses.
The Solid Waste Fund is responsible for the operation of the City's solid waste collection and
disposal, recycling program, and composting program. Revenues for the fund are obtained from fees
levied for trash collection, recycling revenue, and container sales or leases.
The 2002 budget incorporates operational cost increases attributed to changes in the residential trash
collection and residential curbside recycling program
The Airport Fund provides for the operation and maintenance of the City's municipal airport. The
Airport Fund's revenue is generated from rents and leases. For 2002, the fund has a deficit of
revenue over expenses prior to depreciation expense of $965,888.
The 2002 budget reflects the increased cost to operate a FBO and the City's cost of maintaining the
tower at Drake Field. The increased cost for the FBO is offset by fuel sales. The City's increased
cost for the tower is $175,000.
The Shop Fund is an internal service fund that provides for all the acquisition and maintenance of
equipment and vehicles utilized by the City's operating divisions. The Shop Fund's source of
revenue is from charges to other City operating funds based on equipment and vehicle usage.
Increases in 2002 operational costs can be attributed to additional parts and supply purchases, fuel
expense, insurance, and contract services for repairs that cannot be performed by staff. These
operational increases are a result of fleet expansions and increased equipment usage.
CLOSING
This budget is the financial and operational plan for the City of Fayetteville for 2002. The
appropriations contained in this budget will provide for quality mumcipal services that meet the
needs of the citizens of Fayetteville. We have made good progress in the City over the past year and
I anticipate continued progress in the future as the City Council and City staff work for the good of
all our citizens.
Respectfully submitted,
Dan Coody
Mayor
XV
RESOLUTION NO.
A RESOLUTION ADOPTING THE 2002 CITY OF
FAYETTEVILLE ANNUAL BUDGET AND WORK PROGRAM.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
Section 1. That the City Council hereby adopts the 2002 City ofFayetteville Annual Budget and
Work Program. A copy of the budget/work program is attached hereto marked Exhibit "A" and
made a part hereof.
PASSED AND APPROVED this 18th day of December , 2001.
APPROVED:
By: _Draft
Dan Coody, Mayor
ATTEST:
By:
Heather Woodruff, City Clerk
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