To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Trish Muller, CPA, Finance Director
Title
Resolution Approving the 2023-2027 Balanced Financial Plan for the Town of Castle Rock
Body
________________________________________________________________________________
Executive Summary
Long-term planning is an essential part of the annual budget development process. In the past, a three-year balanced financial plan has been prepared along with the annual budget. Beginning in 2020, with the 2020-2024 Balanced Financial Plan, planning increased to five years to provide a longer term perspective that demonstrates the sustainability of Town funds. 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 while maintaining conservative financial management. This effort continues in 2023 with the development of the 2023-2027 Balanced Financial Plan.
The 2023-2027 Balanced Financial Plan demonstrates that the Town is in good financial condition and although not all departmental budget requests were able to be accommodated, several requests to support Town priorities and level of service needs are included. All funds are balanced in each of the five years of the plan, meaning that funds available plus annual revenues exceed the total planned expenditures in all funds. This does include the planned use of $42.8 million of capital reserves for one-time capital projects, which is a common and sound financial practice.
The Balanced Financial Plan does not include any tax rate increases, although a new lodging tax was approved for 2022 and forward. The Town’s sales tax rate remains consistent at four percent. The 2022 property tax mill levy remained flat at 1.139 mills based on the preliminary property valuation for the Town that reflects a less than 1.0 percent increase over the prior year. An increase to water rates and fees for existing customers is proposed in 2023, along with an increase to the maximum allowed amount for growth-related water system development fees. Inflationary increases are proposed for all other development impact fees, as previously approved by Council.
The Balanced Financial Plan includes 17 additional FTEs in 2023 including:
• Five Castle Rock Water positions
• One Public Works position
• One DOIT position
• Eight Public Safety positions in Police and Fire
• One new position in Parks (TBD on Need)
• One position in Legal
Personnel projections also shows a zero percent increase in healthcare cost for Town employees and zero percent for the Town.
Overarching goals of the 2023-2027 Balanced Financial Plan include 1) providing healthy operating resources and capital projects in Town priority areas of transportation, water, parks, and public safety and 2) maintaining current levels of service in a responsible and conservative manner.
Discussion
2023 Budget Priorities
The 2023 Budget priorities used as the basis for development of the 2023-2027 Balanced Financial Plan can be summarized as follows:
• Ensure outstanding public safety
• Enhance our roads
• Secure our water future
• Maintain strong parks and recreation
• Support economic development
• Manage Town finances conservatively
• Preserve our community character
Council has affirmed the above priorities and approach throughout the 2023 Budget process. These priorities are also supported in the 2021 community survey results as previously presented to Town Council.
Financial Overview
The 2023-2027 Balanced Financial Plan was developed using conservative and informed financial modeling and forecasting. Annual growth in sales tax revenue is included at six percent for 2023. Residential growth is expected to continue to be strong over the five-year planning period and is budgeted at 900 single-family units and 415 multi-family units in 2023.
Based on these revenue assumptions, the General Fund operating budget is balanced in each year from 2023-2027. This includes a zero increase for Town and employees medical and dental insurance premium costs along with some departmental budget requests related to level of service needs. Minimal department requests were unable to be included into financial planning based on fiscal constraints in the projections. This includes numerous public safety personnel requests that are unable to be funded.
Financial Details
The 2023-2027 Balanced Financial Plan (Exhibit 1) shows the estimated costs of addressing high priority area level-of-service needs and of implementing additional major priorities and projects in all operating funds using projected resources. Included within the plan are 17 additional FTEs for 2023 needed to address top-priority level-of-service needs, along with needed increases in expenditures for equipment, technology, services, and capital projects. The following is a summary of the most significant items (generally, totaling $100,000 or more) in the plan for 2023, by fund and by department.
GENERAL FUND
Public Safety:
• Increased sales tax allocation to General Fund to 74.75% and reduced the allocation to the Transpiration Fund to 20%. This move will provide approximately $3 million in additional resources annually to help fund the Town’s public safety needs.
Police Department:
• Add four Police positions - one sergeant, two officers and a felony filing technician - along with two part-time civilian community service officers
• Address additional needs of CRPD including $349,987 for continued use of body-worn cameras, upgraded in-car cameras, Tasers and related services; and $230,000 annually for implementation of a Master Patrol Officer program and for differential pay for those working the graveyard shift, both intended to increase employee retention rates
Fire Department:
• Add four Fire and Rescue positions: three firefighter/EMTs and a training officer -
these positions eventually would serve the future Fire Station 156
• Address additional needs of CRFD including $134,200 annually for stipends for those with specialty certifications that have not been recognized to date and $90,000 in 2023 for the HAAS alerting system that lets drivers know an emergency vehicle is approaching
Parks & Recreation Department:
• Continue renovations at Butterfield and Mitchell Gulch parks; and construct Plum Creek North Park
• Complete the Colorado Front Range Trail within Castle Rock
• Add a bike zone at Ridgeline Open Space with technical features, ramps and jumps
• Replace cardio equipment at the Recreation Center
• Replace the synthetic turf at Matney Park and improve the dugouts and field fencing at Paintbrush Park
• Using revenue from the new lodging tax, add a position in Parks Planning
• Add a putting green at Red Hawk Ridge Golf Course
TABOR FUND:
• The Town exceeded its TABOR revenue cap for 2021 by $14.6 million
o Town Council approved transferring funds from three tax- and impact-fee receiving funds into the TABOR Fund to spend as voters approved:
• Funds toward Fire Station 156: $6 million
• Funds toward Police basement buildout: $2 million
• Funds for wildfire mitigation: $1 million
• Funds for roads/transportation: $5.6 million
• TOTAL: $14.6 million
TRANSPORTATION & TRANSPORTATION CAPITAL FUND:
• Begin construction on the Town’s top infrastructure priority, a new interchange on Interstate 25 at Crystal Valley Parkway, including accommodating any additional funds needed to contract up to $118 million
• Because funding is still coming together on this project, the Proposed 2023 Budget does not reflect related revenues nor expenditures; staff’s intention is to present a budget amendment for Council consideration once the funding is fully set
• Complete an aggressive Pavement Maintenance Program, focused in 2023 on eastern Castle Rock, at an estimated 2023 cost of $18.5 million
• Invest $18.5 million to widen Fifth Street from Gilbert Street to the “Four Corners” intersection
• Complete construction of the following projects, for which contracts were awarded in 2022:
o Widen Plum Creek Parkway from Eaton Street to Ridge Road
o Widen Ridge Road from Plum Creek Parkway to the “Four Corners” intersection
o Improve “Four Corners” intersection
o Improve the intersection of Crystal Valley Parkway and Plum Creek Boulevard
o With Douglas County, Improve Crowfoot Valley Road
• Update the Town’s Transportation Master Plan
• Add one new position within the Signs and Markings Division to oversee fieldwork
CASTLE ROCK WATER FUNDS (Combined):
Continue projects, program and policies to advance the goal of securing 75% renewable water by 2050; reducing per-capita consumption to 100 gallons per day; and maintaining affordable rates and fees, including:
• Continue advancing long-term water renewable efforts including the WISE imported
water project
• Continue advancing advanced metering infrastructure
• Continue water and sewer line rehabilitation projects and upgrades to security, controls and network
• Add five new positions: a stormwater inspector, a water conservation technician,
a SCADA instrumentation technician, a collections operator and an office assistant
CONCLUSION
The overarching goals of the 2023-2027 Balanced Financial Plan are providing healthy operating resources and capital projects in Town priority areas of transportation, water, parks, and public safety and maintaining current levels of service in a responsible and conservative manner. Based on projected revenues, not all departmental requests were able to be accommodated; however, the included items align with Council priorities and endeavor to maintain levels of service in the community. The 2023-2027 Balanced Financial Plan demonstrates that the ongoing initiatives set forth within the 2023 Budget are sustainable and the one-time requests are able to be accommodated.
Staff Recommendation
Staff recommends approval of the resolution as presented.
Proposed Motion
“I move to approve the resolution as introduced by title.”
Alternative Motions
I move to approve the resolution as introduced by title, with the following conditions: (list conditions).
I move to continue this item to the Town Council meeting on _____ date to allow additional time to (list information needed).
Attachments
Attachment A: Resolution
Attachment B: 2023-2027 Balanced Financial Plan