To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Title
Discussion/Direction: 2018 Budget and Strategic Priority Planning
Body
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Executive Summary
As staff works to present the 2018 Budget and the 2018-2020 Balanced Financial Plan to Council for consideration this fall, it is helpful to obtain Council feedback regarding strategic priorities, as well as regarding the desired timing and content of budget-related information. The purpose of this item is to provide for discussion about strategic priorities moving forward, as well as to outline for Council the steps planned to date in the 2018 budget process.
Discussion
2018 Strategic Priorities
Overarching goals of the annual financial planning process are to 1) address top-priority, though not all, level-of-service issues identified by staff; and 2) incorporate additional major priorities and projects in a responsible and conservative manner.
Based upon Council-adopted policies, including the 2013 Strategic Plan; Council actions and direction regarding strategic priorities; and 2017 Community Survey results, current Town strategic priorities are summarized as follows, with a high-level look at how they are planned to be furthered in 2018 and beyond:
• Enhancing our transportation: Nearer-term enhancements include improving the intersections of Founders Parkway and Allen Way and Founders Parkway and Crowfoot Valley Road and installing a roundabout at Wolfensberger Road and Plum Creek Parkway. Also, an addition to the Service Center is planned to be constructed in 2018 to accommodate growing space needs.
• Ensuring our public safety: Plans include constructing and staffing Fire Station 152 in Crystal Valley and authorizing the staff and supply resources necessary to provide established levels of Police services. This includes maintaining competitive public safety compensation and benefits as necessary to retain qualified employees. (Within the three-year financial plan, Public Safety Training Facility needs are contemplated to be met using 2017 financial resources/fund balances as has been proposed.)
• Ensuring our water future: The overarching goal in this area is to continually and systematically work to achieve the 75% renewable water goal, paid for through water user rates and development-driven water resource fees, without reliance on tax revenues. Current major long-term water priorities include utilization of WISE starting in 2018; improvements to raw water systems and to the Plum Creek Water Purification Facility, to enable recovery and use of our reusable water supplies; and continued Box Elder asset acquisition.
• Maintaining strong Parks and Recreation: Providing and maintaining an outstanding neighborhood park system, consistent with level-of-service goals, is the overall goal in this area. Additional projects include extending the East Plum Creek Trail to Crystal Valley Parkway; investing in capital improvements at Rueter-Hess Reservoir; and opening a new facility in 2018 that meets park and facility maintenance needs.
• Enhancing our historic Downtown: Supporting local businesses and providing for events that enhance community character are critical aspects in this area. Also on the list are implementing action items from the Downtown parking study and completing a Downtown mobility study to aid in longer-range transportation system planning for the area.
• Managing growth: This priority involves effectively planning and managing for balanced community growth, which adds value to the community and maintains and enhances community character.
• Pursuing economic development: The primary tactic here is to utilize public/private partnerships to achieve a vibrant local economy in order to provide for core priorities. This includes maintaining capacity in the Economic Development Fund for the pursuit of economic development opportunities consistent with goals, as well as use of the Downtown Special Fund and tax increment financing to facilitate Downtown redevelopment projects, with a focus on mixed-use projects in the Downtown core. For 2018, this will include presenting a budget plan for participation in the Arapahoe Community College collaborative campus project.
• Managing Town fiscal obligations: Direction here is to continue applying a conservative and informed financial approach to ensure the Town maintains the financial capacity necessary to provide established levels of service and complete planned major projects.
Results of the 2017 Community Survey indicate above average agreement (6 or higher on a scale of 0-10) that each of these priorities is leading the community in the right direction, as shown below.
As part of the annual budget process, staff will be asking Council to reconfirm the Town’s strategic priorities. A decision is not requested this evening, though any direction Council wishes to provide in this regard would be appreciated.
Budget Development Process
The following discussion items are planned as part of Council’s consideration of the 2018 Budget:
• Staff presented the 2016 year-end financial review at the April 4 Town Council meeting and the results of the 2017 Community Survey at the May 2 meeting
• Council tonight (June 6) will provide any initial thoughts about strategic priorities moving forward, as well as on the planned steps in the 2018 budget development process
• Town budget open houses will be held in June-August; the Police, Fire, Public Works and Parks and Recreation departments throughout this same period will discuss with Council information related to their budget requests
• Presentation of the annual water rates and fees study and of the Preliminary 2018 Budget is anticipated to occur at the August 15 Town Council meeting
• First reading of the budget ordinance is planned for September 5, and second and final reading is planned for September 19
• First reading of the property tax mill levy ordinance also is planned for September 19, along with adoption of the 2018-2020 Balanced Financial Plan and the 2018-2022 Capital Improvement resolutions
• Second and final reading of the property tax mill levy ordinance is planned for December 5
The planned schedule leaves time for addressing any new issues that might arise during the course of the financial planning process.
Current Financial Assumptions
The Proposed 2018 Budget and Draft 2018-2020 Balanced Financial Plan are being developed using conservative and informed financial modeling and forecasting. Annual growth in sales tax revenue is being projected at 6.2% in 2018, 5.4% in 2019 and 5.2% in 2020. Residential growth is expected to continue to be strong over the three-year planning period and is anticipated at 700 single-family units and 634 multifamily units in 2018; 600 single-family units and 210 multifamily units in 2019; and 600 single-family units and 0 multifamily units in 2020. Nonresidential growth, meanwhile, is projected at 397,300 square feet in 2018, 165,000 square feet in 2019 and 550,000 square feet in 2020.
Departments have been evaluating their service levels as part of the annual financial planning process. The framework for this initiative ties back to the Town’s numerous Council-adopted long-range plans, which define levels of service and provide clear direction on priorities and projects. Several service level needs have been identified, and provisions for some of the forecasted additional needs will be presented within the Proposed 2018 Budget. Annual market evaluation of Town compensation and benefits will be conducted to ensure appropriate competitiveness. For three-year planning purposes, this is planned to include 8% Town and employee medical and dental insurance premium increases each year, as well as performance-based compensation increases averaging 4.5% in 2018 and 4% in both 2019 and 2020 for general employees and 5% all three years for public safety employees.
Budget development to date does not include any tax increases, nor any adjustments in fees beyond the impact fee changes for 2018 already approved by Council. (Water rates and fees for 2018 and beyond are still under development, as previously noted.)
Conclusion and Future Work Items
Within this memo, staff has attempted to provide Council an overview of the 2018 budget development process and a basis for starting a discussion regarding Town strategic priorities moving forward. Staff welcomes Council’s discussion of these and any other items, and any resulting direction, which could be used as staff continues work on the Proposed 2018 Budget and Draft 2018-2020 Balanced Financial Plan.
Additionally, staff wishes to engage Council with regard to 2017 Community Survey results, particularly related to continuing concerns over growth and the direction the Town is headed. Staff plans to meet one-on-one with Councilmembers in June to discuss budget priorities and other strategic priorities.
Following is a breakdown of answers to the resident survey question “What would you say is the single most important issue facing Castle Rock in the next five years?" Most of the top issues mentioned relate to growth. Additional information on 2017 Community Survey results is available in the attachment to this memo.
Does the Council believe that the Town’s current strategic priorities reflect adequate response to this question?
Attachment
Attachment A: 2017 Community Survey Results Brief