To: Honorable Mayor and Members of Town Council
From: Trish Muller, Finance Director
Title
Resolution: Approving the 2016-2018 Balanced Financial Plan
Body
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Executive Summary
Town staff is pleased to present to the Town Council and the community the 2016-2018 Balanced Financial Plan. The value in long-term financial and major project planning is that it provides a process to look forward and balance organizational and community needs within projected financial resources in a responsible and fiscally prudent manner.
As further discussed below, the 2016-2018 Balanced Financial Plan accomplishes the goals, priorities and policies set forth to date by the Town Council. The full 2016-2018 Balanced Financial Plan can be found on the Town website within the financial section of the Transparency portal.
The 2016-2018 Balanced Financial Plan includes accommodations to address immediate growth related needs while maintaining current levels of service for residents. As growth continues, additional needs and priorities will become apparent. Also included in this discussion are items that will require longer term planning and direction to ensure that Castle Rock continues to provide the safety, security, opportunity and lifestyle that residents expect.
Discussion
A key part of the Town’s financial and major projects program rests with the development of the Town’s long-range financial planning process. The Town’s Strategic Plan, which is tied to established levels of service that provide clear direction on priorities and projects, defines the framework for this initiative.
In accordance with the Town’s Strategic Plan, the proposed 2016-2018 Balanced Financial Plan has been updated for Council consideration. The goal of this process is to continue a three-year financial planning roadmap that addresses top-priority level-of-service issues and incorporates additional major projects and Council priorities in a responsible and conservative manner.
The Three-Year Balanced Financial Plan (Attachment B) shows that approved level-of-service and project needs can be accommodated using projected revenues and available fund balances in all funds. These projections are integrated with cost estimates for all current Town services and projects to reflect the forecasted three-year financial condition. However, a number of items, including a variety transportation projects, are currently not addressed in the 2016-2018 Balanced Financial Plan. These items are discussed later in this memo and will require additional consideration and direction from Town Council.
A number of added positions are included in the 2016-2018 Balanced Financial Plan. As development has increased, departments have evaluated their levels of service and current ability to meet established service levels. Within this process, several departments identified pressure points and needed resources to address them.
Also within the forecast are increases in General Fund expenditures for equipment, technology and capital projects that might be considered “one-time” expenditures, as opposed to annual operating expenditures. Therefore, these expenditures might be considered as a draw down of unobligated reserves as opposed to balancing within the annual operating budget.
The 2016-2018 Balanced Financial Plan is subject to an ongoing process of refinement and revision. Adjustments to the plan are reviewed annually are based on changing circumstances and Council direction.
Proposed 2016-2018 Balanced Financial Plan Core Principles
The Proposed 2016-2018 Balanced Financial Plan accomplishes several core principles:
• The plan is balanced for all three years, with no tax increases and with retention of adequate reserves
• The plan accomplishes core Town Council priorities for public safety, renewable water, economic development, the Town transportation system, maintaining outstanding parks and recreation, and maintaining community character
• The plan maintains high-quality operating services, infrastructure, and maintenance of and advances in technology
• The plan continues to implement the Town’s Mission, Values and the updated Vision 2030
• The plan is sustainable and continues commitments into the future while taking future issues into consideration
Proposed 2016-2018 Balanced Financial Plan Key Assumptions
The Proposed 2016-2018 Balanced Financial Plan is driven by a number of key assumptions including:
• Sales tax revenue for 2016 reflects a 3.6% increase over 2015 year-end estimated projections, a 10% increase is projected for 2017 and 6.4% increase is projected for 2018
• New single family residential building permit projection of 700 for each year of the 2016 - 2018 plan and multi-family building permit projections including an estimated 316 multi-family units in 2016, 100 units in 2017 and 192 units in 2018
• Assumption of increased commercial development, with projections for anticipated commercial permits included by year
• Employee compensation of 3% for general, performance-based increases and 1% for compensation equity adjustments in 2016 - 2018, with the approved Public Safety Market compensation incorporated as directed by year
• Health insurance premium increase for the Town and employees of 8% in 2015, and 5% increases for both in 2016 and 2017
Core Priority Implementation
The updated 2016-2018 Balanced Financial Plan implements Council’s core priorities and other major initiatives as discussed below:
Outstanding Public Health & Safety
• Addition of four new patrol officers (Police), one animal control officer (Police), one Asst. Training Officer (Fire) and one Support Services/Emergency Technician (Fire) in 2016, a total of four new positions in 2017 and 15 new positions in 2018 (incorporating 12 new personnel for a new fire station)
• Continuation of Police and Fire radio replacement program, building improvements at Fire Stations 154 and 155
• Design, construction and equipping of the Crystal Valley Fire Station - anticipated to open in 2018
• Acquisition and implementation of body-worn cameras in 2016
• A public safety technical coordinator to manage public safety technology in 2016
Long-Term Renewable Water
• Continued participation in the WISE partnership to bring long-term water supply to Castle Rock
• Construction of a diversion structure on East Plum Creek
• Advanced water treatment technology at Plum Creek Water Purification Facility
• Alternative Source of Supply project progress
• Water system improvements
• Stormwater drainageway stabilization projects
• Addition of a GIS technician, stormwater project manager, two maintenance technicians and a water quality technician in 2016
Economic Development
• Allocation of 100% of the DDA sales tax increment for all future years
• Capacity to accomplish additional projects as they arise, while maintaining all current obligations
• Loan for the Move, a downtown technology space project
• Development Services continues to adjust to market conditions by making budget and staffing adjustments to ensure core service levels are met
Safe Transportation System
• Completion of the North Meadows Extension project in 2016
• Improvements to Plum Creek intersections with Perry and Wilcox streets
• Reconstruction of Meadows Parkway in 2017
• Annual pavement maintenance program for all years in the 2016 - 2018 planning period
• Initial design and planning for the future Interstate 25/Chrystal Valley Parkway interchange
• Addition of two traffic signals in 2016 and other improvements planned for 2017/2018
Outstanding Parks & Recreation
• Festival Park improvements in 2016 with associated maintenance and operational costs included in outgoing years
• Numerous park improvements are reflected in the three year plan including Metzler and Butterfield Parks in 2016, Paintbrush Park in 2017 and Mitchell Gulch in 2018
• Improvements to the course and clubhouse at Red Hawk Ridge Golf Course in 2016 and 2017
• Restructuring of Parks Maintenance Staff with additional part time support beginning in 2016
Community Character & Identity
• Continuation of enhanced Starlighting decorations
• Increased funding for video production and community marketing efforts
• Addition of a special events specialist position
• Various projects - investment in public facilities, buildings, streets and parks and trails, as well as funding for historic preservation - are included throughout the budget to ensure that updated Vision and Master Plan policies and goals are implemented for the built environment
Other Major Initiatives
• Purchase of new and replacement vehicles/equipment for all years during the planning period including 40 in 2016, 51 in 2017 and 36 in 2018
• Construction of the next neighborhood park in 2018
• Opportunity for downtown office space for the Development Services Department
• Transition from contracted to in-house custodial service to ensure appropriate service levels
• Fleet management software upgrade
• Security related technology improvements
Additional Comments and Future Planning
It is important to emphasize that the financial information in the proposed plan represents the best information and analysis available at this point and is subject to change. To name a few, the financial plan will be impacted by Council decisions, actual revenue performance, health plan costs and new issues that may emerge.
The plan provides a foundation for planning, decision making and sets a direction while establishing priorities, but it will need to be regularly updated and refined. Items not addressed in the proposed plan include:
• Future Surface Transportation Needs - Improvements to Founders and Plum Creek Parkway intersections
• Town Operation/Maintenance Space Needs - As staffing levels increase due to Town growth, additional space will be required to accommodate the new personnel. Next-level priorities include space for Parks Maintenance personnel, who work at the Service Center; new space for Facilities personnel, who work out of a former fire station in a residential area; and, consideration to purchase or construct a permanent Public Safety Training Facility
• Additional Future Fire Stations - Current trends and forecasts suggest the possibility that additional fire station(s) may be needed within the next 10 years
• Additional Town and Strategic Priorities - As the community continues to experience the many positive aspects of strong population growth, the Town will also have additional demands for services, including requests for services not currently provided by either the Town or other agencies or service providers. Continued dialogue with Town residents and prioritization of resources will be essential to ensure we maintain a high-quality community.
Staff Recommendation
Staff recommends that Council approve the 2016-2018 Balanced Financial Plan as presented.
Proposed Motion
I move to approve a Resolution approving the 2016-2018 Balanced Financial Plan.
Attachments
Attachment A: Resolution
Attachment B: Three-Year Balanced Financial Plan