City of Phoenix Council Members and District Boundaries Dave Siebert 602-262-7444 council.district.1 @phoenix.gov Mayor Phil Gordon 602-262-7111 phil.gordon@phoenix.gov Peggy Neely 602-262-7445 council.district.2 @phoenix.gov Tom Simplot 602-262-7447 council.district.4@phoenix.gov Peggy Bilsten 602-262-7441 peggy.bilsten @phoenix.gov Greg Stanton 602-262-7491 greg.stanton@phoenix.gov Claude Mattox 602-262-7446 council.district.5@phoenix.gov Michael Johnson 602-262-7493 michael.johnson@phoenix.gov Doug Lingner 602-262-7492 doug.lingner@phoenix.gov iii City of Phoenix Mayor and City Council Phil Gordon Mayor David Cavazos Deputy City Manager Dave Krietor Deputy City Manager Doug Lingner Vice Mayor District 7 Rick Naimark Deputy City Manager Dave Siebert District 1 Ruth Osuna Deputy City Manager Peggy Neely District 2 Cynthia Seelhammer Deputy City Manager Peggy A. Bilsten District 3 Tom Callow Senior Executive Assistant to the City Manager Tom Simplot District 4 Claude Mattox District 5 Greg Stanton District 6 Michael Johnson District 8 David E. Richert Senior Executive Assistant to the City Manager Lisa Takata Executive Assistant to the City Manager Karen Peters Intergovernmental Programs Director Mayor’s Office Deb A. Gullett Chief of Staff Ed Zuercher Senior Deputy Chief of Staff City Council Office P.J. Jasso Chief of Staff Department Heads Wylie Bearup City Engineer Ross Blakley Acting Street Transportation Director John Chan Acting Downtown Development Director Caroles Coles Henry Equal Opportunity Director Management Staff Frank Fairbanks City Manager Alton Washington Assistant City Manager Debbie Cotton Public Transit Director Kim Dorney Rodriguez Acting Housing Director Jay Green Phoenix Convention Center Director Jack F. Harris Police Chief Sara L. Hensley Parks and Recreation Director Gloria Hurtado Human Services Director Bob Khan Fire Chief Mark E. Leonard Public Works Director Lionel Lyons Development Services Director Toni Maccarone Public Information Director Jerome Miller Acting Neighborhood Services Director Danny Murphy Acting Aviation Director Mario Paniagua City Clerk Tammy J. Perkins Acting Water Services Director Cecile Pettle Budget and Research Director Lera Riley Personnel Director Kristine Sigfridson Acting Chief Information Officer Randy Spenla Acting City Auditor Debra Stark Planning Director Gary Verburg City Attorney Roberto Franco Acting Community and Economic Development Director Bob Wingenroth Interim Finance Director Toni Garvey City Librarian Chief Presiding Judge Roxanne K. Song Ong iv City of Phoenix Organizational Chart PUBLIC MAYOR AND CITY COUNCIL CITY MANAGER MUNICIPAL COURT City Auditor ASSISTANT CITY MANAGER Intergov Programs EXECUTIVE ASSISTANT TO THE CITY MANAGER TRANSPORTATION MANAGER City Clerk DEPUTY CITY MANAGER DEPUTY CITY MANAGER DEPUTY CITY MANAGER SPECIAL ASSISTANT TO THE CITY MANAGER Community Preparedness Human Services Arts & Culture Budget & Research Civic Plaza Downtown Development Office Criminal Justice Coordination Library Equal Opportunity Finance Hope VI Education Economic Development Environmental Programs Parks & Recreation Housing Historic Preservation State Land Programs Planning Personnel Committee Fire Personnel MWSBE Program Information Technology Court Liaison Water Public Information Law Rio Salado Neighborhood Services Public Works DEPUTY CITY MANAGER DEPUTY CITY MANAGER Engineering & Architecture Business Customer Service Aviation Family Advocacy Light Rail Project Development Services Sister Cities Public Transit Street Tramsportation Water Strategy Police v Budget Document Overview This overview outlines the 2006-07 Annual Budget. Copies of the document are available in the Phoenix Public Library or by contacting the city of Phoenix Budget and Research Department at 602-262-4805. Also, this document can be made available in alternate formats (large print, braille, audio cassette or computer diskette) upon request. For information, contact the Budget and Research Department or city TTY relay at 602-534-5500. The Summary Budget contains a narrative description of Phoenix programs and services planned for the upcoming fiscal year. Also included is a narrative description of all revenue sources and a description of major financial policies. The Detail Budget presents extensive statistical data (including multiyear comparisons) for each city department and fund. The statistical data includes staffing allocations and a detailed reporting of planned expenditures. Finally, the 2006-11 Capital Improvement Program provides Phoenix’s planned construction program by project and detailed sources of funds. A more detailed description of the 2006-07 Phoenix Summary Budget follows. CITY MANAGER’S BUDGET MESSAGE The City Manager’s Budget Message provides an in-depth look at the city manager’s priorities and outlook for the upcoming fiscal year. These priorities reflect many months of working with the Mayor and City Council, the community and city staff. OUR COMMITMENT TO EXCELLENCE DEPARTMENT PROGRAM SUMMARIES This section provides an overview of the city’s various programs that contribute to our overall pursuit of excellence. Included is a description of our commitment to a diverse workforce, results of the employee suggestion program and winners of employee excellence awards. The Department Program Summaries section provides total funding and positions, program goals, major performance measures and service trends, and any changes in service for each city department. Also included in this section is a discussion of the city’s debt management policies and the contingency fund. COMMUNITY PROFILE AND TRENDS This section includes key demographic, financial and infrastructure profile measures. Estimates or projections are provided for 2005-06 and 2006-07 as well as actual results for recent and historical periods. CAPITAL IMPROVEMENT PROGRAM This section provides a description of the capital improvement program process and an overview of the 2006-11 Capital Improvement Program. SCHEDULES 2006-07 BUDGET OVERVIEW The Budget Overview provides a description of the city’s budget process as well as the major assumptions included in the preparation of the 2006-07 budget. This section includes a broad overview of the resources and expenditures included in the budget. Also included is a historical look at Phoenix’s community services, an overview of significant budgetary and financial policies including general legal requirements and basis of accounting, and descriptions of city funds. The schedules provide a general statistical overview of the budget. Schedule 1 provides estimated beginning and ending balances for each major fund group. The remaining schedules summarize staffing complements and estimated resources and expenditures. For a more detailed understanding of the city’s budget, the Detail Budget should be used. As noted above, copies of the budget documents, including the Detail Budget, are available in the Phoenix Public Library or can be obtained by contacting the Budget and Research Department. 2006-07 REVENUE OVERVIEW This section provides an extensive narrative describing the city’s revenue estimates. The section is divided into three categories: general funds, special revenue funds and enterprise funds. GLOSSARY Definitions of the terms used throughout the budget document are presented in the glossary. If you have questions, need further clarification of a concept or term, or desire more detailed information about something in this document, please contact the Budget and Research Department at 602-262-4805. 1 Distinguished Budget Presentation Award The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the city of Phoenix, Arizona for its annual budget for the fiscal year beginning July 1, 2005. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a communications device. This award is valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award. 3 Proposed 2006-07 Annual Budget TO THE HONORABLE MAYOR AND CITY COUNCIL: This letter transmits our recommended balanced budget for the upcoming 2006-07 fiscal year. Unlike the $117 million in cuts we’ve had to endure over the past four years, this budget recommends that all current city services be continued next year. In addition, in putting together this proposed budget, the General Fund had a very small – only $2.4 million – balance remaining to fund improvements to community services. We recommend that these funds be used to leverage available grant funds and add 111 police patrol officers. In addition, we have used available public safety franchise fee revenues to provide for 24 additional police communications operators. We also have combined these earmarked public safety funds with funds already set aside to provide for the opening of new capital facilities to operate four new fire stations and a new driver training facility. This is a significant increase in our investment in public safety. These improvements are explained in much more detail in this budget along with our other recommendations for the upcoming year. I appreciate the City Council, the community and city staff working together to balance our budget each year. I also appreciate the hundreds of residents who take time each year to attend a budget hearing or send comments by e-mail and voice mail. Only with all of us working together are we able to identify the community’s highest priorities for our limited budget dollars. We regret that we are not yet financially able to begin adding back some of the services we’ve had to reduce the last few years. Among our highest priorities to restore in the future are swimming pool hours, library and community service hours; library material acquisitions; parks maintenance; and arts grants. Also, we would like to begin, once again, expanding the number of after-school recreation sites available throughout the city. While no sites were reduced over the past four years, we have been unable to provide new sites where they are needed. GENERAL FUND RESOURCES AVAILABLE NEXT YEAR Our revenue growth for next year is expected to remain positive but must be adjusted downward for the estimated impact of the 2005 census. Our “before census” revenue growth for next year is estimated to be 11 percent. This increase is largely due to the significantly increased state income taxes to be shared with Arizona cities and towns next year. Also, local and state sales taxes are expected to continue to show growth although at somewhat reduced rates. But, after adjusting for the estimated $19.1 million estimated General Fund impact of the census, our growth rate will be reduced to 8.8 percent. On the expenditure side, our costs are expected to grow at nearly the same rate. Cost increases include employee compensation including pension costs; continued fuel and utility cost increases; $8.1 million in costs to open facilities recently constructed with 2001 bonds, parks and preserve initiative funds and impact fees; and replacing expiring grants. Also, in this recommended budget, we have included funding to increase the contingency fund from 2.6 to 2.7 percent of operating expenditures. We also have included a return to more normal levels of equipment replacement, especially vehicles. We have restored $1 million in General Fund support to the transit system and to the street maintenance program. As I mentioned earlier, the General Fund costs to open newly constructed capital facilities is $8.1 million. While these new facilities bring new costs to the General Fund, the community will enjoy new fire stations, a new community and senior center, a new regional library, a new neighborhood police station and 17 new or improved parks facilities. In addition, franchise fees earmarked for public safety will be used to fund a new fire station and a new public safety driver training facility. With these two funding sources, a total of four new fire stations will open next year. As I stated earlier in this letter, the net effect is that we have a small balance of only $2.4 million remaining in the General Fund. We recommend this be used to leverage $8.3 million in Universal Hiring grant funds and add 111 police patrol officers. 5 Risks to the Proposed General Fund Budget Two significant risks to this proposed budget have been identified. First, we are still relying on preliminary census information. Based on this preliminary information, in this proposed budget we have assumed a $19.1 million loss in state-shared revenues. Final census figures could result in a greater loss. Next, during the course of this legislative session, several bills were introduced that would affect state-shared revenues. We continue to monitor these bills carefully as the legislative session comes to a close. RECOMMENDATIONS FOR THE POLICE DEPARTMENT The recommended budget adds 116 new police officer positions. Five of these are paid for with Aviation funds and will be stationed at the airport to provide a needed increase in airport security. The remaining 111 new police officers are recommended to provide a much-needed increase to citywide patrol strength. As mentioned earlier in this transmittal, $2.4 million in available General Funds are recommended to leverage an existing Universal Hiring grant that will provide 75 percent of the funding for these new positions. After analyzing current academy capacity, current attrition rates, the lead time necessary to acquire equipment and fund availability, these 111 positions can be filled over the next three years. The recommended budget includes the necessary support staff to open and operate the Sunnyslope Neighborhood Police Station. Funding will come from already allocated new capital facility operations and maintenance costs. Finally, we recommend that 24 communications operators be added to keep up with the growth in 911 calls. The communications operators are proposed to be funded with franchise fees earmarked for public safety. 6 In total, we recommend the police budget be increased by $3.3 million and that 144 positions be added. RECOMMENDATIONS FOR THE FIRE DEPARTMENT The recommended budget includes funds to open and operate four new fire stations and a new public safety driver training facility. Funding for these new facilities will come from a combination of franchise fees earmarked for public safety and the funds allocated early in the budget process to open and maintain new capital facilities. Public safety franchise funds also are recommended to retain five temporary training captains. These captains will help to provide for the department’s training needs over the next several years as experienced personnel retire and new station construction continues. Finally, additional resources for the Annual Facilities Program are recommended. These would be funded with permit fees. In total, we recommend the fire budget be increased by $3.7 million and that 83 positions be added. NEW FACILITY OPERATING COSTS – GENERAL FUNDS As mentioned earlier in this transmittal, the costs required to open and operate new capital facilities are a contributing factor to next year’s tight General Fund budget. However, with these costs come a wide variety of new facilities for the community to enjoy. Included are the new Pecos Community Center and the new Cesar Chavez Library. Also recommended is funding to open and operate 17 new or improved parks facilities including newly constructed soccer fields, a new community learning center, a new gymnasium and new amenities at Rio Salado. RECOMMENDATIONS FOR THE ENTERPRISE FUNDS AND FOR OTHER RESTRICTED FUNDS The city budget is made up of three separate pieces: the General Fund, enterprise funds and other restricted funds. Recommendations for the General Fund were discussed earlier in this transmittal. Our enterprise funds include Aviation, Water, Wastewater, Solid Waste, Phoenix Convention Center and Golf funds. These funds, with the exception of the Convention Center, are funded with user fees. No tax funds are used. The Phoenix Convention Center uses a combination of rental fees paid by those using the facility, the parking fees associated with convention center garages and certain earmarked sales tax categories. These funds can only be used for costs associated with delivering enterprise fund services. The recommended budget includes several items for the Aviation, Phoenix Convention Center, Solid Waste and Water funds. The restricted funds category includes federal and state grants, gas taxes, debt service, Development Services and voter-approved Transit 2000 funds. These funds can only be used in accordance with grant and other statutory rules. We have recommended a few items for the Transit 2000 and Development Services funds. Transit 2000 Funds We recommend that available Transit 2000 funds be used to restore weekday service from 10:30 a.m. to midnight on 12 of the 16 routes reduced last year. We also recommend that the Central Station once again be open on Saturdays and with extended hours. In addition, we recommend various route improvements and new neighborhood circulator service. We’ve also recommended additional RAPID trips to meet demand and reduce overcrowding. Finally, we recommend funding to improve the maintenance of bus stops and other transit facilities. Development Service Funds Recommendations for the Development Services Fund include the addition of critical administrative support. Over the past few years, Development Services service delivery staff has increased by 50 percent. Administrative staff support has not kept pace. Aviation Funds The Aviation Fund is expected to see modest revenue growth next year as landing weights and passenger levels continue to grow. Over the next several years, while we expect to see airport revenues continue to grow, the fund will be strained by the need to meet critical capital needs combined with continued pressure from the airlines to keep rates as low as possible. Therefore, we recommend only a few additions to the airport budget. Staffing and maintenance costs for the newly installed in-line explosive detection system are recommended. This new system will greatly reduce customer wait times at the airport. Support and maintenance for several technology improvements also are recommended. And, as mentioned earlier, we recommend the airport pay for five police officers that will be assigned to airport security. Phoenix Convention Center Funds As described in an earlier section, the convention center is financed with a combination of rental fees and earmarked sales taxes, most notably contracting sales taxes. This year, the convention center is enjoying a boom in contracting sales tax revenues. Next year, slower growth is expected as current construction levels begin to slow. On the expenditure side, next year the Convention Center Fund will begin to experience the first of the operating costs and increased debt service costs for the new expanded facility. We recommend the specialized customer service training program for convention center staff begin next year. We’ve also included increased facility coordination and warehouse staff as well as increased funding for advertising. Water Funds Our growth in water revenue comes from the annual growth in the number of accounts combined with annual water rate increases of 5-10 percent. This growth is then slightly offset by decreased water consumption per account. The water system faces critical capital needs to replace aging water infrastructure in older parts of the city and to deal with the infrastructure needs of the growing population in newer parts of Phoenix. Over the years, water capital costs also have increased due to the use of more environmentally sensitive treatment processes. We also continue to monitor the impact of electricity costs on the Water Fund. Our recommendations for the Water Fund include improved technology management and administrative oversight for the highly complex Lake Pleasant Treatment contract. Solid Waste Funds Solid waste revenues for next year are expected to grow by only about 2 percent to reflect the increase in the number of Phoenix households combined with estimated landfill tipping fees. Of greatest concern in the financial outlook for the Solid Waste Fund is the price of fuel. In this recommended budget we have only included increased landfill security. is the only opportunity to gain needed administrative help. We have continued this process this year and recommend several administrative reallocations throughout the budget. Included is increased support for e-commerce projects, increased investment management that will produce better investment returns in the future, staff for the Hope VI Community Training and Education Center, improved service to those requesting general plan amendments and other zoning services, and improved follow-up on vehicle warranties that will reduce repair costs. Also recommended are several administrative positions in our central service departments. These self-funded positions will help offset some of the significant administrative cuts these departments have endured over the past few years. CONCLUSION Over the past four years, Phoenix has faced some serious budget challenges and responded with cuts of $117 million. We regret that these cuts resulted in the loss of some important services to the community. I look forward to working with the Mayor and City Council, our employees and the community over the next few years to restore these services as the local economy continues to grow. I want to thank all city employees for their dedication to the Phoenix community. Everyday, they deliver the best in services. Sincerely, Other Recommended Budget Adjustments For many years, our budget process has included the opportunity for city departments to look for efficiencies that could be reallocated to community service improvements or needed administrative support. For many departments, with the budget cuts of the last four years, this Frank Fairbanks City Manager May 2, 2006 7 Phoenix received the 2005 3CMA “Savvy” Award of Excellence in the one-time special programming category for the Matthew Henson documentary. The award-winning documentary produced by PHX 11, the city’s cable television station, captured the essence of life at the Matthew Henson Projects through a series of interviews with current and former residents, footage from community events and coverage of the demolition and construction process. 8 Phoenix’s Commitment to Excellence We have faced some challenging budget times over the past several years, but all employees have continued to deliver quality services to our community and make Phoenix better in everything we do. Employees practice continuous improvement as part of their daily business. Customer service is a critical focus. As a large organization, our customers span across a wide spectrum of people in our community. Our customers are residents seeking information and assistance, companies looking to relocate to Phoenix, neighborhoods working to improve their areas, city departments receiving internal services and people who are visiting or driving through our city. Phoenix employees work as individuals and on teams to deliver better services with fewer dollars. They use numerous innovative ways to improve service delivery without increasing costs, while working with the community as a partner to make Phoenix a better place to live, work and play. Phoenix employees are proud to be among the very best in service delivery and they serve the community with pride. In addition to being recognized by the community for a job well done, the city and its employees continue to be recognized by professional organizations and external evaluators for their hard work and dedication to safety and customer service. The following is a summary of just a few of the awards and recognitions received by the city and its staff during the course of the fiscal year: ■ The National League of Cities selected Phoenix as a “Model City” for its commitment to improving the lives of low-to-moderate-income families by developing initiatives to foster asset building and financial literacy. ■ ■ ■ ■ ■ ■ The Neighborhood Services and Housing departments each received an Agency Award of Excellence from the National Association of Housing and Redevelopment Officials (NAHRO). Neighborhood Services was recognized for its South Mountain Area Revitalization Strategy, and Housing was recognized for a program designed to help seniors and people with disabilities combat feelings of isolation. The United Latino Business Coalition honored the Phoenix Community and Economic Development Department Small Business Division with the Service Provider of the Year Award for its small business assistance programs. The award recognized the city for several innovative programs including the Management Technical Assistance Program, the EXPAND equity gap lending program and the Mind Your Business educational seminar. For the sixth consecutive year, Phoenix was honored with the CIO-100 award, which recognizes companies and organizations around the world that exemplify the highest level of operational and strategic excellence in the use of technology. ■ The Office of Arts and Culture received the Partner 2005 Award from Arizona State University for their outstanding contributions to the arts, education and community. Phoenix received the 2005 3CMA Award of Excellence in the one-time special programming category for the Matthew Henson documentary. The award-winning documentary produced by PHX 11, the city’s cable television station, captured the essence of life at the Matthew Henson Projects through a series of interviews with current and former residents, footage from community events and coverage of the demolition and construction process. The Government Finance Officers Association (GFOA) presented the city with two awards, the Certificate of Achievement for Excellence in Financial Reporting and the Distinguished Budget Presentation Award. The Certificate of Achievement for Excellence in Financial Reporting was awarded in recognition of the work performed by the Accounts Division of the Finance Department in preparing the Comprehensive Annual Financial Report (CAFR). The Distinguished Budget Presentation Award was awarded for publishing a budget document that satisfied the program criteria as a policy document, as an operations guide, as a financial plan and as a communications device. The International City/County Management Association (ICMA) presented the city with a Certificate of Distinction for its exceptional commitment toward integrating performance measurement into management practices. 9 ■ ■ general awareness and external support. The purpose of the study was to inform the public on how prepared local governments are for emergency situations following the aftermath of Hurricanes Rita and Katrina. Entrepreneur magazine named Phoenix the best city in the country for starting a new business. According to the magazine, “Phoenix dominated on the strength of robust growth in new businesses.” The American Disaster Preparedness Foundation (ADPF) named Phoenix number one in the country when it comes to emergency preparedness. ADPF, a Chicago-based nonprofit public advocacy organization, studied the country’s 30 largest metropolitan areas and judged nine categories in emergency preparedness: technology, management, infrastructure, internal training, equity, public education, ■ The city of Phoenix received the National Community Recycling Leadership Award from the Rechargeable Battery Recycling Corporation (RBRC), a nonprofit public service organization dedicated to recycling rechargeable batteries and cell phones. The Office of Environmental Programs in conjunction with other city departments was recognized for maintaining an efficient rechargeable battery collection program, resulting in the collection of more than 8,200 pounds of rechargeable batteries and cell phones since 2003. ■ Phoenix was the only city in the country to receive three awards from Sister Cities International in recognition of its long-term and comprehensive Sister City programs. The Phoenix Sister Cities Commission earned the Best Overall Program Award for a city with a population greater than 500,000; the Innovation Award for Sustainable Development; and the National Organization for Disability Advocacy Award. ix Sk y om P h oe n w or ke rs fr to m a ke ce n 05 a n 20 te Se p te m be r d in g m a in il in bu a n d e R it a . n ia n a s d to L ou is g H u rr ic a el ec tr ic ia n t fo ll ow in or t tr a ve le p in th e or A te a m of ir s p A ir l ow A a d l a in te rn a ti on es R eg io n br ok en w rl d a ce h C la li gh ti n g. p H a rb or In d ke re a el s to th e L r sy st em , a ir ed a ir fi ir te p a a p re w re s d t’ r n a or jo ma e a ir p fe n ci n g li es a n d re p a ir ed th , re bu il t p er im et er vi ta l su p p T h e cr ew e to br in g w er bl a to e ol er tr w n co h ts a ir tr a ff ic s, re li ef fl ig th ei r ef fo rt . B ec a u se of a re a t in to th e eq u ip m en 10 We are Committed to Making Phoenix Better The city’s Vision and Values statements continue to serve as a common source of motivation for city of Phoenix employees to do all that they can to make Phoenix better. ■ The following are a few examples of how city employees have demonstrated their commitment to our Visions and Values statements by going above and beyond to improve the quality of life for Phoenix residents. ■ We are dedicated to serving our customers ■ We value and respect diversity ■ We work as a team ■ We each do all we can ■ ■ We learn, change and improve ■ We focus on results ■ We work with integrity ■ We make Phoenix better! City employees donated more than $1,388,600 to the Community Service Fund Drive. The Community Service Fund Drive provides resources to hundreds of agencies that provide health and social services to our community. In mid-January, Solid Waste Field Services and Disposal Management staff responded to a frantic call from a resident who had mistakenly tossed three red envelopes containing more than $1,000 in cash and checks into her blue recycling barrel. From the first notice to the call center, staff worked to isolate the envelopes. After rooting through mounds of trash, two of the envelopes were found containing all but about $50 of the lost money. ■ In February 2006, the city held its fourth annual diversity celebration for city employees. The diversity celebration helps create a vision where all people’s rights are respected and where every person can live and work as a valued member of the community. The event not only endorses and promotes the city’s Vision and Value statement “We value and respect diversity” by working together and serving our community; we show how we live it. T h e D es er t B ro om L ib ra ry P ro of th e n ew je ct Te a m br a n ch li br co or d in a te a ry th a t se la te st in en d th e d es ig rv es n or th er gy co n se n a n d co n P h oe n ix . rv a ti on , su ve n ti la ti on st ru ct io n T h is te a m st a in a bl e a n d co ol in ex p lo re d th m a te ri a ls g sy st em s. sa vi n gs fo e , a n d r th e ci ty T h is “g re en a lt er n a te – a n d th e h ea ti n g, ” bu il d in g ta xp a y er s. w il l re su lt in lo n g- te rm 11 Commitment to Humanity ■ In 2005, a record number of tropical storms and hurricanes hit the Southeast and Gulf Coast regions of the United States. The following are examples of how the city and its employees answered the call to assist and aid the displaced victims. ■ Phoenix sent recovery and technical teams to the Gulf Coast in September following hurricanes Rita and Katrina, garnering praise from officials and residents in the region. During this time, staff helped repair equipment at Lake Charles Regional Airport and members of the Urban Search and Rescue Team helped conduct more than 400 rescue missions. ■ Due to the extraordinary need created by the hurricanes, Public Works staff worked to identify three vehicles which could be donated to the town of Bay St. Louis, Mississippi. The city of Phoenix Human Services Department played a major role during Operation Good Neighbor at the Veteran’s Coliseum and at the Katrina Assistance Center which followed the closing of the coliseum. Caseworkers assisted hundreds of households through various stabilization efforts ranging from job search, transportation, utilities and housing. City of Phoenix Excellence Awards Every year, the city honors individual employees and employee teams who go beyond their normal duties to provide excellent customer service, assist the community or make Phoenix a better place for all its residents. The following teams and individuals were recognized with Excellence Awards this year: ■ The Desert Broom Library Project Team coordinated the design and construction of the new branch library that serves north Phoenix. Staff from Public Works, Engineering and Architectural Services, and Phoenix Library departments worked to create a model facility that would meet stringent environmental standards. In short, they wanted a “green” building. The team explored the latest th ei r gn iz ed fo r te to m w a s re co a ca Te lo ct re je to g fa ci li ty m u n it y P ro n vi om li C t t en en d ir em e in d ep en t C re st R et d en ts of th T h e D es er . g w it h re si ld n so ki s or a w ty w ef fo rt s in th e p ro p er si n g a ft er ot h er h ou 12 in energy conservation, sustainable materials, and alternate heating, ventilation and cooling systems. They knew that, in the short term, it would be less expensive and a lot easier to construct a standard facility with minimum requirements. The team showed, however, that a “green building” would result in long-term savings for the city – and the taxpayers. Dedicated last year, the building has won numerous environmental and architectural awards, including a prestigious Valley Forward Award. ■ The Desert Crest Retirement Community Project Team was recognized for their efforts while working with residents of the Desert Crest Retirement Community. Desert Crest was an independent living facility located on 16 acres next to the 24th Street Water Treatment Plant. Unfortunately for the residents, the owner of the complex filed for bankruptcy several years ago. The city eventually purchased the property, not for the sole benefit of the residents, but because it was necessary in case the water treatment plant was expanded. The city treated Desert Crest’s elderly residents with sensitivity and respect while they transitioned to other housing. City officials gave them ample time to relocate while offering rental and housekeeping assistance, meal delivery, transportation and case management. Residents who required a higher level of care were immediately placed in other facilities. The relocation of the residents was completed in 2005, and the site has been prepared for possible expansion of the water treatment plant. As for the neighborhood, residents are pleased because property values were not impacted. It was a “win-win” resolution for all the parties, thanks to the team’s efforts. ■ It is not uncommon for Phoenix firefighters to dig into their own pockets to assist families in emergency situations. Though glad to help, Fire Captain Paul Knobbe explored a more efficient way to aid families in the wake of a tragedy, such as a house fire. Captain Knobbe’s idea was an emergency assistance fund that received seed money from the Stardust Foundation. He also worked with J.P. Morgan Chase Bank to set up a secure Internet account for the fund. B et h Va n K ir k, a n ou tr ea ch li br gu id in g fo a ri a n w it h rc e be h in d th e P h oe n B oo k B la st of m or e th ix P u bl ic L , a re a d in a n 5, 00 0 P ib ra ry, is g p ro gr a m h oe n ix ch th e th a t p u ts il d re n ea ch bo ok s in th y ea r. e hands 13 His brainchild, the FireStar Emergency Assistance Fund, was launched in 2005. If a fire company determines there is an immediate need for emergency assistance, a call is placed to an on-duty program manager who can load up to $250 onto a debit card using the Internet. Emergency victims are issued the debit card, which can be used only for food, clothing, shelter or transportation. During the 2005 Community Service Fund Drive, Phoenix firefighters contributed generously to the FireStar fund. ■ Beth Van Kirk, an outreach librarian with the Phoenix Public Library, is the guiding force behind Book Blast, a reading program that puts books in the hands of more than 5,000 Phoenix children each year. Book Blast is a critical part of Phoenix Activity City, the city-sponsored after-school and summer recreation program offered at more than 100 sites in Phoenix. Book Blast targets students in grades 1 through 3, but older children also may take part. Beth makes sure that the PAC sites have plenty of books and that librarians visit the sites on a regular basis. The program’s budget is limited, but the resourceful librarian has a knack for turning $10 in funding into $100 in books. Book Blast has become more important in recent years because of stricter academic standards. Because of her work with PAC, many Phoenix children are better prepared for standardized testing. Even more important than test scores, Book Blast has instilled a passion for reading in young children. Employee Suggestions Streamline Operations and Cut Costs The Employee Suggestion Program, which began in the mid-1950s, provides the city of Phoenix and its employees with a way to highlight and inspire a focus of continuous improvement. The financial awards and attention given to the program demonstrate to employees that city management values their input. As a result, employee suggestions submitted over the year have saved millions of dollars P ro gr a m , A ss is ta n ce cy n ge er a ge d y, m ow in g a tr F ir eS ta r E ea te d th e m il ie s fo ll cr fa to be ob ce n n a ss is ta in P a u l K fi n a n ci a l F ir e C a p ta im m ed ia te es d vi ro p w h ic h . h ou se fi re su ch a s a 14 through direct cost savings and other productivity and cost-avoidance improvements. Employees can make improvement suggestions for any city operation, not just for their own department. Some examples of employee suggestions implemented in the 2005-06 fiscal year are described in the following: ■ Albert Barajas was recognized for his suggestion to reduce the amount of energy and lighting being used for area lighting at Margaret T. Hance Park. Mr. Barajas identified measures including reprogramming the time clock and converting high energy lights to more efficient flourescent lights. His suggestion not only saves the city money on energy costs, but also will extend the life of the lamps and ballasts. The annual cost savings is $16,000. ■ ■ John Deagle was recognized for his idea to refinish the damaged stainless steel panels along the exterior sides of the moving walkways in Terminal 4 of Sky Harbor International Airport. Prior to Mr. Deagle’s suggestion, these panels would have been replaced at a cost of approximately $163,000. His suggestion to refinish the panels created less waste and resulted in a cost savings of approximately $125,000. Jerald Templeton was recognized for improving the way Water Services staff change the bearings on a climber screen assembly. In the past, four staff were required to complete this operation. With Jerald’s suggestion implemented, the task which once took four staff to complete now takes one, saves the city money and improves productivity. ■ John Meacham of Neighborhood Services was recognized for his idea to equip staff members involved in direct customer contact such as client intake services with a portable copier. Prior to this suggestion, multiple appointments with customers could be required to gather and collect all of the documentation necessary for intake. Mr. Meacham’s suggestion improves staff productivity and provides an unprecedented level of customer service to clients and customers of city services. As you can see, Phoenix works hard to earn our reputation as a well-run city. Our employees are and will continue to be leaders in their professions with commitment, passion and a strong work ethic. Each day, the core values of our organization – what we call our “Vision and Values” – are at the root of everything we do. 15 PHOENIX GROWTH Population figures are from the Census and the area is from the City Clerk. 16 CITY OF PHOENIX PLANNING DEPARTMENT Community Profile and Trends P hoenix was founded in 1870 as an agricultural community and was incorporated as a city in 1881. The City Charter, under which it is presently governed, was adopted in 1913 and has been amended from time to time since then. The charter allows Phoenix to determine its governmental structure and levy revenue and sales taxes. A council-manager form of government also was adopted in 1913. Under this organizational structure, the Mayor and Council appoint a city manager to act as the chief operating officer. The City Council sets policy direction, and the city manager is responsible for implementing those policies in an efficient and effective manner. In 1982, a group of residents initiated an effort to move to a district system for electing council members. These residents were concerned that at-large elections resulted in an organization that was less responsive to neighborhoods. The initiative was passed by the voters of Phoenix, and the number of Council seats was increased from six to eight. The Mayor continued to be elected at-large. Geography Phoenix is the fifth most populous city in the United States, state capital of Arizona and center of the metropolitan area encompassed by Maricopa County. This metropolitan area also includes the cities of Mesa, Glendale, Tempe, Scottsdale, Chandler, Peoria, Goodyear, Tolleson, El Mirage and Avondale; the town of Gilbert; and all unincorporated areas of the county. It is situated 1,117 feet above sea level in the semi-arid Salt River Valley. The area is widely known for its mild, sunny winters and hot summers and receives an average rainfall of seven inches a year. Community Profile the city occupied 17 square miles with a population of almost 107,000, ranking it 99th among American cities. The 2000 census recorded Phoenix population at 1,321,045. As of July 1, 2006, the city is projected to encompass 516 square miles, with a projected population of 1,502,572. Major employers of the Phoenix metropolitan area include the state of Arizona, Wal-Mart Stores, Inc., Banner Health Systems, city of Phoenix, Maricopa County, Arizona State University, United States Postal Service, Honeywell International, Intel Corp., and US Airways. The top five percent of property taxes, based on secondary assessed valuation, are paid by Arizona Public Service Company and Qwest Communications. Demographics and Economic Statistics The following statistics are presented to provide an overview of Phoenix residents, the city’s financial condition and infrastructure. The city has grown steadily, especially since 1950. The 1900 census recorded Phoenix population at 5,544. In 1950, 1970-71 1980-81 1990-91 2000-01 Actual 2004-05 Estimated 2005-06 Projected 2006-07 Population 1 584,303 Percent of Population by Age Under 5 8.8 5-19 29.9 20-44 32.2 45-64 20.4 65+ 8.7 Percent of Population by Race 1 Not Hispanic or Latino (of Any Race) N/A Caucasian 93.3 4.8 Black/African American 1.0 American Indian/Alaska Native 0.5 Asian Native Hawaiian/ Other Pacific Islander 2 N/A 0.4 Other N/A Not Hispanic - Two or More Races Hispanic/Latino (of Any Race) 3 N/A 789,704 995,896 1,350,435 1,421,928 1,461,928 1,502,572 7.8 25.0 39.3 18.6 9.3 8.5 21.6 42.9 17.3 9.7 8.5 21.5 42.8 17.3 9.8 N/A 78.1 4.7 1.1 0.9 N/A 71.9 4.9 1.6 1.5 N/A 55.8 4.8 1.6 1.9 N/A 0.4 N/A 14.8 N/A 0.1 N/A 20.0 0.1 0.1 N/A 34.1 Demographic Profile 17 1970-71 1980-81 1990-91 2000-01 Actual 2004-05 Estimated 2005-06 Projected 2006-07 27,601 13.6% 29,706 14.8% 30,797 4.6% 40,856 6.7% 54,126 7.9% 58,819 8.8% 63,568 8.1% N/A N/A N/A N/A N/A N/A N/A N/A 5,700,825 (3.0)% 4.9% .42 7,573,211 3.7% 2.7% 1.16 10,489,92 3.9% 4.2% 2.92 11,419,619 6.2% 4.1% 2.84 12,261,134 5.8% 4.1% 2.64 N/A N/A .46 1.33 1.54 1.67 1.52 Total Budget (‘000s) $95,835 Total GF Budget (‘000s)7 $62,343 Total Employees 5,670 Total Employees per 1,000 population 9.7 Non-Enterprise Employees N/A per 1,000 population N/A Enterprise Employees8 per 1,000 population Property Tax Rate 1.75 G.O. Bond Rating (Moody’s/Standard and Poor’s) A/A Number of PLT Licenses N/A City Retail Sales Tax Rate9 1% $392,780 $221,106 9,435 11.1 N/A $1,026,545 $591,021 11,388 11.2 N/A $1,946,013 $953,324 14,352.0 10.6 8.6 $2,316,287 $876,165 15,620.3 10.99 8.92 $2,591,462 $932,856 15,928.0 10.90 8.78 $3,187,565 $1,093,012 16,318.1 10.86 8.79 N/A N/A 2.0 2.07 2.11 2.07 1.75 1.79 1.82 1.82 1.82 1.82 Aa/AA 37,943 1% Aa/AA+ 43,756 1.2% Aa1/AA+ 51,000 1.8% Aa1/AA+ 56,051 1.8% Aa1/AA+ 58,042 1.8% Aa1/AA+ 60,000 1.8% 247.9 329.1 427.1 483.5 514.8 516.0 516.0 Police Major Crimes 50,747 Dispatched Calls for Service 374,003 Authorized Sworn Police Officers 1,054 86,287 452,350 1,694 110,961 895,117 2,047 97,666 862,769 2,810 103,497 757,028 3,027 103,500 774,000 3,114 104,300 764,400 3,230 30 14,437 – 572 35 25,162 46,122 838 45 26,281 75,112 1,042 45 28,369 101,396 1,315 50 24,077 117,243 1,472 52 25,000 125,000 1,553 56 25,000 130,000 1,625 Building Inspections Total Number of Inspections11 236,000 196,356 176,909 261,184 337,973 342,500 342,500 Streets Total Miles Miles Resurfaced and Sealed Total Miles of Bikeway12 2,270 378 N/A 3,084 216 N/A 3,800 250 250 4,299 220 472 4,782 186 507 4,850 134 520 4,900 123 530 City Economic Profile Median Household Income5 Personal Income Growth (Metro Phoenix) Assessed Valuation (‘000s)6 Employment Growth Rate7 Unemployment Rate8 Value of Residential Construction (Billions) Value of Commercial Construction (Billions) City Financial Profile Infrastructure Profile Area (Square Miles) Fire Fire Stations Fire Calls and All Other Calls10 Emergency Medical Calls10 Authorized Sworn Firefighters 18 1970-71 1980-81 1990-91 2000-01 Actual 2004-05 Estimated 2005-06 Projected 2006-07 423 23,097 22,765 555 39,097 28,129 761 50,825 28,414 906 70,750 36,500 964 79,433 33,056 976 84,700 33,600 988 90,000 35,413 2,925,700 6,500,000 22,175,000 35,900,000 40,500,000 41,700,000 43,000,000 204,800 325,300 281,900 379,000 281,392 513,643 327,953 1,051,935 355,345 930,000 366,000 1,000,000 368,000 1,170,000 121 N/A 137 1,303 181 2,206 199 3,332 207 4,374 214 4,478 220 4,634 2,368,232 704,940 3,691,745 1,182,606 5,962,411 1,732,410 9,151,000 2,016,000 12,264,467 2,178,625 13,064,163 2,424,760 13,963,572 2,560,760 2,637 4,497 4,776 6,080 6,441 6,794 6,875 Water Connections 172,100 52.7 Production (billions of gallons)14 282,048 88.5 321,996 84.7 350,967 109.4 383,011 102.1 394,310 107.3 402,196 112.4 Wastewater Connections Miles of Line 250,199 3,040 311,980 3,661 327,051 4,174 353,099 4,584 363,692 4,707 370,966 4,834 Traffic Control and Lighting Signalized Intersections Street Lights Traffic Accidents Aviation Passengers Arriving and Departing Solid Waste Collection Residences Served Tons Disposed at City Landfills Municipal Parks Number of Municipal Parks13 Developed Park Acres Libraries Book Circulation Total Book Stock Equipment Management Number of Equipment Units in Fleet 1 2 3 4 5 6 7 8 9 10 11 12 13 14 169,255 2,090 Population by age and race is only available in census years. Also, racial categories were modified by the Census Bureau in the 2000 Census. Prior to the 2000 Census, Asian and Pacific Islander data were combined under the same category. Pre-2000 counts are included in the Asian category. Pre-1980 census questionnaires did not include “Hispanic” or “Spanish” race categories. Median Household Income is based on United States Census Bureau data for city of Phoenix geographic area and projected during non-census years using personal income growth percentages. The formula for assessing valuation was changed significantly in 1980 making comparisons to prior years not meaningful. Employment growth rate figures (total nonfarm employment) are calendar year and not fiscal year. Calendar 2004 is shown under FY 2004-05, and calendar 2005 is shown under FY 2005-06, and projected calendar 2006 is shown under FY 2006-07. Estimates are for the Phoenix metro area and are obtained from the Arizona Workforce Informer-Arizona Department of Economic Security. As of FY 1998-99, Arizona Highway User Revenue funds are no longer included in the General Fund total. Enterprise departments include Water, Aviation, Phoenix Convention Center, Golf and Solid Waste Management. Voters approved a 0.1 percent increase in most city sales tax categories effective December 1, 1993, for increased fire and police protection services. Voters approved a 0.1 percent increase in most city sales tax categories effective November 1, 1999, to provide funds for parks enhancements and improvements, and to acquire land for a Sonoran preserve. Voters also approved a 0.4 percent increase in most city sales tax categories effective June 1, 2000, to provide funding for public transit improvements and light rail. Prior to FY 1980-81, emergency medical, fire and all other calls were combined into one figure. Includes building, electrical, mechanical, plumbing and general inspections. The lower numbers for recent years, as compared to 1970-71, are the result of the implementation of the general inspection program that combined several residential inspections, performed by one inspector, into a single permit. The bikeway program was approved by the City Council in 1987. Figures include on-street bike lanes, bike routes, and paved and unpaved paths. This number includes parks and areas maintained by the Parks and Recreation Department. For example, retention basins, canal projects and trails. Includes water produced for city of Phoenix only. 19 2006-07 Resource and Expenditure Summary T his section provides a broad overview of the resources and expenditures included in the 2006-07 budget. Information is presented for general, special revenue and enterprise funds. General funds, which receive special attention by the community, are highlighted throughout this section. General funds are of particular importance to our residents as they provide for most basic services, such as police, fire, parks and streets. Enterprise funds are supported by fees charged for the services provided with the exception of the Convention Center which has earmarked sales taxes as its primary funding source. Special Revenue funds are restricted to statutory and/or voter-approved uses. The 2006-07 budget, financed by operating funds, totals $3,187,565,000. As shown in the pie chart on page 23, the General Fund portion of $1,093,012,000 is approximately 34 percent of the total. The Enterprise funds, which include Aviation, Water, Wastewater, Solid Waste, Convention Center and Golf, make up another 35 percent of the total. Special Revenue funds such as Arizona Highway User Revenues, Local Transportation Assistance, and grant funds such as Community Development Block Grants, Human Services grants and Housing grants represent the remaining 31 percent of the total budget. In addition to presenting the budget by funding source, the budget also is described in terms of the major types of activities or expenditures funded. Included in the operating budget are operating and maintenance expenses that provide for ongoing costs of delivering city services; capital expenditures for pay-as-you-go projects for major additions, improvements or renovations to city facilities; and debt service payments to retire outstanding debt. The pie chart on page 23 shows the distribution of the total operating budget into these three types of expenditures. Not included in the operating budget are bonds and other capital funds used for capital improvement projects. These are included in a separate capital improvement program. The 2006-07 General Fund budget includes only ongoing operating and maintenance and pay-as-you-go capital expenses. Debt service associated with most general-funded activities is paid for with earmarked property taxes or is shown in the City Improvement fund. Both are included in the Special Revenue funds portion of the budget. Finally, budgeted expenditures are most easily understood on a departmental basis. Detailed explanations of each department’s budget are provided in the Department Program Summary section of this document. The bar chart on page 23 presents the General Fund budget on a department-by-department basis. The table below provides a comparison of the 2006-07 budget to the 2005-06 adopted budget. Actual expenditures for the 2004-05 fiscal year also are included. 2006-07 Budget Compared to 2005-06 Adopted Budget (In Millions of Dollars) 2006-07 2004-05 Actual Expenditures 2005-06 Adopted Budget Budget Amount Change Percent Change $1,712.2 $2,004.1 $2,238.3 $234.2) 11.7)% Capital Expenditures 233.7 384.2 433.0 48.8) 12.7)% Debt Service 370.3 623.1 516.3 (106.8) (17.1)% $2,316.2 $3,011.4 $3,187.6 $176.2) 5.9)% Operating and Maintenance Expenditures Total 21 Citywide operating and maintenance expenditures increased from 2005-06 primarily for inflationary increases such as employee compensation including higher pension and health care costs, and added operating costs related to the opening of new capital facilities. Increases also reflect rising costs for commodities such as fuel and utilities and reflect the carry over of funds from the current year to 2006-07. Increases to operating and maintenance expenditures were partially offset by a decrease in debt service costs. Debt service costs were less than 2005-06 due to the inclusion of early redemption of bond funds in the 2005-06 budget. This early redemption is now scheduled for the first part of 2006-07. 2006-07 GENERAL FUND BUDGET OVERVIEW The 2006-07 General fund budget of $1,093,012,000 million provides for ongoing operating and maintenance and capital expenditures. The table below compares the 2006-07 General Fund budget with the adopted 2005-06 budget. The operating and maintenance expenditures increased compared to the 2005-06 adopted budget. The increase is primarily the result of inflationary growth, the planned transition of grant-funded public safety staff to the General Fund, reflecting full year costs for facilities opened in 2005-06 plus new operating costs associated with capital facilities that will open in 2006-07, inflationary increases in the costs of fuel and utilities, providing funding for rising employee health care, and pension costs and other negotiated compensation increases. The following pie charts show the 2006-07 General Fund budget summarized by major programs and major resources. RESOURCES Resources include beginning fund balances, fund transfers, revenues and recoveries. Generally, current revenues and fund transfers pay for current year expenses. In the enterprise funds, fund balances provide a financial cushion against unanticipated changes. The contingency allocation serves this same purpose for the General Fund. While minor changes in fund balances occur from year to year, maintaining proper fund balances over the long term and providing for a contingency fund in the General Fund are important components of sound financial management and a significant factor in bond ratings. 2006-07 Estimated Beginning Fund Balances In the General Fund, a fund balance may not be budgeted. However, a contingency fund, similar to a “rainy day fund”, may be planned to provide a means to address unexpected revenue decreases or expenditure increases that may occur throughout the year. Each year, most of the contingency allocation remains unused and, therefore, falls to the ending fund balance along with any changes in estimated revenues and expenditures. The estimated 2006-07 beginning fund balances of $781.9 million include $60.8 million in general funds, $358.5 million in special revenue funds and $362.6 million in enterprise funds. The estimated beginning fund balance for Special Revenue and Enterprise funds include: Transit 2000 - $154.7 million; Water $156.3 million; Aviation - $51.2 million; Wastewater - $64.1 million; Convention Center - $55.5 million; Parks and Preserves - $58.6 million; Solid Waste $36.4 million; Grant funds - $36.9 million; Arizona Highway User Revenue - $20.6 million; Development Services - $28.9 million; Sports Facilities - $15.9 million and $42.0 million in various other restricted funds. 2006-07 General Fund Budget Compared to 2005-06 Adopted Budget (In Millions of Dollars) 2006-07 Operating and Maintenance Expenditures Capital Total 22 2004-05 Actual Expenditures 2005-06 Adopted Budget Budget $874.9 $968.1 $1,083.3 $115.2 11.9% 1.3 5.1 9.7 4.6 90.2% $876.2 $973.2 $1,093.0 $119.8 12.3% Amount Change Percent Change ALL SOURCES OF FUNDS ALL SOURCES OF FUNDS Total Resources – $3.2 Billion Total Expenditures – $3.2 Billion Enterprise Funds 35% Operation & Maintenance 70% Debt Service 16% General Funds 34% Special Revenue Funds 31% Capital 14% GENERAL FUNDS GENERAL FUNDS Total Resources – $1,093 Million Total Expenditures – $1,093 Million Public Safety and Criminal Justice 62% Property Tax 9% Local Sales Tax 41% Other Resources 6% Environmental Services and Other 6% User Fees/ Other Revenue 10% Transportation 5% State-Shared Revenues 34% General Government 8% Community Development and Enrichment* 19% *Includes Parks, Library, Human Services, Neighborhood Services, Planning and Economic Development Expenditures by Department 2006-07 General Fund Budget Millions of Dollars $450 400 350 300 250 200 150 100 50 Parking Garages Engineering & Architectural Services City Auditor City Manager Public Information Economic Development Budget & Research Downtown Development Law Equal Opportnity Planning City Clerk Mayor & City Council Information Technology Personnel Functions* Neighborhood Services Public Works *Functions include several small offices such as the Office of Arts and Culture, Education Office and Environmental Programs. Prosecutor & Defender Streets Finance Public Transit Contingencies Human Services Library Municipal Court Fire Parks and Recreation Police 0 23 2005-06 General Fund Estimated Ending Balance As shown in the following table, the estimated 2005-06 ending General Fund balance is $60.8 million. The balance results primarily from a $38.5 million decrease in operating expenditures, a $16.2 million increase in current year revenues, and a $3.7 million higher beginning balance. The decrease in estimated 2005-06 General Fund expenditures is largely due to unused contingency funds, the carryover of some General Fund projects not completed in the current year, and a decrease in capital expenditures. The majority of the revenue increase is in city excise taxes and state-shared revenues. 2006-07 Estimated Revenues Revenues from taxes, fees, interest, grants and other sources provide resources to fund programs and services delivered by the city. Revenues for 2006-07 are estimated at $2,812,396,000. This is $182,850,000, or 7.0 percent above the 2005-06 estimate of $2,629,546,000. General fund revenues are estimated at $1,021,516,000, which is $83,164,000 or 8.9 percent more than the 2005-06 estimates. The following table provides a comparison of the 2006-07 estimated revenues to 2005-06 estimates and 2004-05 actual collections. Detailed explanations by category are provided in the 2006-07 Revenue Estimates section of this document. The state and local economy has experienced strong growth beginning late 2004-05 and continuing through 2005-06. The economy is being bolstered by increased retail spending, revived tourism spending and the continuation of the growth in contracting. For 2006-07, it is estimated that the growth will continue, but at a more moderate pace. Included in 2006-07 estimates for the enterprise funds are full-year impacts of rate increases for 24 Water and Wastewater services, effective March 2006. The 2006-07 estimate for special revenue funds includes an increase in federal funds of $1.5 million largely due to the carryover of incompleted federal expeditures and the associated revenue. 2006-07 Transfers to the General Fund Transfers are used to allocate resources between funds for purposes of matching costs with benefits received through a central service cost allocation or to assess in-lieu property taxes. Transfers to the General Fund for 2006-07 total $43.7 million. This amount reflects $43.3 million from enterprise and other funds to recoup central service costs and/or payments for in-lieu property taxes from the Aviation, Water and Wastewater, Solid Waste, Convention Center and Development Services funds. Central service provides a repayment to the General Fund for services provided by departments such as Personnel, Finance, Law and other administrative support areas that are general funded. This transfer is calculated by the Finance Department in accordance with generally accepted full-cost accounting principles and is in accordance with long-established City Council-approved policy. The enterprise transfers also include $351,000 from the Golf Course fund to recoup Parks, Recreation and Golf department direct administrative support costs. The Golf fund does not pay citywide central service costs or in-lieu property taxes. Approximately $0.1 million in miscellaneous transfers from other funds also is included. As a result, total transfers to the General Fund exclusive of excise tax-related items are $43.7 million. A transfer of $756 million from the excise tax fund represents the General Fund share of local and state-shared sales taxes and fees and state-shared income taxes. However, this amount is reflected in revenues, rather than a transfer, throughout this section. 2006-07 ESTIMATED ENDING BALANCES Arizona budget law requires a balanced General Fund budget. No General Fund balances may be accumulated in reserve for subsequent fiscal years. Arizona law does, however, provide for a contingency or “rainy day fund” each year. For 2006-07, $28.9 million is included for the General Fund contingency and is discussed in more detail in the Contingency section of this document. As a result, budgeted General Fund resources equal expenditures. However, any unused contingency amounts at year-end fall to a General Fund ending balance. Generally, about 95 percent of the General Fund contingency remains unused each year. Changes in special revenue and enterprise fund balances are primarily due to the carryover of large capital projects from one year to the next. Beginning and ending fund balances are shown in Schedule 1. Year-end balances are planned in the enterprise funds and other self-supporting funds primarily to provide for adequate funds at the beginning of the following fiscal year. Such funds are used to stabilize rate increases associated with fluctuations in service demand changes, insure bondholders of future debt service payment and to accumulate funds for annual pay-as-you-go capital improvements. Also, enterprise fund balances are intentionally permitted to grow over time in order to fund large capital projects. Therefore, in 2006-07, the enterprise funds in the aggregate are programmed to decline from $363 million at the beginning of 2006-07 to $181 million at year end. Capital projects contributing to this change in fund balance include the new rental car facility at Sky Harbor airport, the new Lake Pleasant Water Treatment Plant, a new solid waste landfill and the expansion of the Convention Center. Special Revenue fund balances in the aggregate are expected to decrease from $358 million to $243 million, primarily due to the decrease in the Parks and Preserves Fund, the Transit 2000 Fund and the Arizona Highway User Fund. The Parks and Preserves program, a voter-approved 0.4 percent sale tax, is nearing the end of its 10-year plan to improve existing parks, construct new neighborhood parks and The estimated 2006-07 ending balance of $424.2 million includes: Transit 2000 $121.3 million; Water - $98.4 million; Convention Center - $23.3 million; Wastewater - $34.4 million; Parks and Preserves - $23.1 million; Solid Waste $12.5 million; Aviation - $13.6 million; Development Services - $20.9 million; Sports Facilities - $20.5 million and $56.2 million in various other special revenue and enterprise funds. acquire preserve land. The Transit 2000 fund balance is decreasing as the capital improvement portion of the program reaches its peak years. The Arizona Highway User Fund balance is decreasing as street construction expenditures increase in accordance with the approved five-year major street program. Also, a revenue loss in 2006-07 is estimated as a result of the 2005 census. General Fund Balance Analysis (In Thousands of Dollars) 2004-05 2005-06 Actuals Budget Estimate Over (Under) Budget Estimate Amount Percent Resources Beginning Balances July 1 Revenue Recoveries Transfers $ 53,362 842,984 546 18,176 $ 35,189 922,161 1,500 14,320 $ 38,903 938,352 1,500 14,941 $ 3,714) 16,191) _) Total Resources $ 915,068 $ 973,170 $ 993,696 $ 20,526) 2.1)% 874,870 1,295 968,050 5,120 929,550 3,306 (38,500) (1,814) (4.0)% (35.4)% Total Expenditures $ 876,165 $ 973,170 $ 932,856 $ (40,314) (4.1)% Ending Fund Balance $ 38,903 $ $ $ 60,840 100.0+% 621 10.6)% 1.8)% _)% )))4.3)% Expenditures Operating Expenditures Capital _ 60,840 2006-07 Estimated Revenues Compared to 2005-06 Estimates (In Thousands of Dollars) 2006-07 Fund Types 2005-06 Actuals 2005-06 Estimate Estimate Amount Change Percent Change $ 842,984 $ 938,352 $ 1,021,516 $ 83,164) 8.9)% Special Revenue Funds 727,724 802,899 848,608 (45,709) (5.7)% Enterprise Funds 812,431 888,295 942,272 53,977) 6.1)% $2,383,139 $2,629,546 $2,812,396 $ 182,850) 7.0)% General Total 25 2006-07 OPERATING BUDGET $ 3,187,565,000 OPERATING EXPENDITURES $2,238,302,000 GENERAL FUND $1,083,304,000 26 SPECIAL SPECIAL REVENUE REVENUE FUNDS $1,083,304,000 $510,528,000 ENTERPRISE FUNDS $644,470,000 General Fund $932,395,000 Neighborhood Protection - Police $22,315,000 Neighborhood Protection - Fire $8,673,000 Aviation $206,869,000 Parks & Recreation $108,000,000 Neighborhood Protection - Block Watch $1,200,000 Public Safety Enhancement - Police $15,474,000 Water $185,365,000 Library $36,915,000 Public Safety Enhancement - Fire $9,116,000 Parks & Preserves $180,000 Wastewater $94,993,000 Cable $5,994,000 Transit 2000 $115,625,000 Court Awards $3,183,000 Solid Waste $108,048,000 Development Services $64,416,000 Capital Construction $100,000 Convention Center $41,146,000 Sports Facilities $1,767,000 Arizona Highway User Revenue $38,447,000 Local Transport Authority $6,966,000 Regional Transit $8,672,000 Community Reinvestment $70,,000 Impact Fee Program Admin $2,168,000 Other Restricted Funds $10,457,000 Grants $201,699,000 Golf $8,049,000 City of Phoenix Financial Organizational Chart DEBT SERVICE $516,330,000 PAY AS YOU GO CAPITAL $432,933,000 Secondary Property Tax $121,017,000 City Improvement $67,640,000 General Fund $9,708,000 Parks and Preserves $67,942,000 Arizona Highway User Revenue $31,242,000 Other Special Revenue Funds $12,316,000 Transit 2000 $40,889,000 Capital Construction $25,083,000 Aviation $77,172,000 Water $94,195,000 Development Services $75,000 Arizona Highway User Revenue $72,201,000 Wastewater $70,776,000 Solid Waste $22,533,000 Regional Transit $25,662,000 Community Reinvestment $1,469,000 Convention Center $18,590,000 Golf $849,000 Other Restricted Funds $3,873,000 Grants $9,721,000 Aviation $35,572,000 Water $58,481,000 Wastewater $34,901,000 Solid Waste $4,507,000 Convention Center $42,849,000 27 Services to the Community Phoenix has been a well-established economic growth area since the end of World War II. Historically, during periods of national economic expansion, the local Phoenix economy has grown much more rapidly than the rest of the United States. During periods of national recession, the local economy usually continues to grow at a slow pace. It normally takes a prolonged period of national economic stagnation for Phoenix to experience employment decline. The diversity of the Phoenix economy helps insulate it from the severe downturns experienced in many communities reliant on a narrower range of industries. In fact, employment growth in Phoenix has substantially exceeded national employment growth during recoveries. However, in the last few years the city has experienced the effects of a recession, both at the local and state level. Over the course of the past four years, General Fund cuts of $117 million have been necessary in order to balance the budget. This year, no cuts were necessary. In fact, there is $2,443,000 available for improving General Fund community services. We have combined these funds with available earmarked public safety franchise fee revenues to provide for an increase in public safety funding in the 2006-07 budget with the addition of 116 sworn positions, four new fire stations, five training captains, a new neighborhood police station and the addition of new police communications operators. In addition, 17 new or improved parks facilities and a new regional library will open. Also the Pecos Community Center will open. This facility will combine a senior center, a community center and a new citizen service center. In the non-General Fund areas of the budget, funding is available to improve community services. Transit 2000 funds will provide numerous improvements to transit services including the restoration of some service reductions of the past few years. Convention Center funds are included to open and operate the new Phoenix Convention Center West Building as well as improve customer service. Also, Development Services funds will pay for an expansion of the Development Services Annual Facilities Program. Aviation funds will be used for the operation and maintenance of the new in-line explosive detection baggage handling system to improve customer service at the airport. Our state-shared revenues will be reduced by an estimated $19.1 million due to the effects of the 2005 census. The 2005 census will show that, while Phoenix continues to grow, it does not grow as fast as other Arizona cities and towns. Our relative share of the state’s population will decline from 32.5 to 30.1 percent. However, city sales taxes continue to show growth. We are still hopeful that our local sales tax growth will be sufficient to offset our final census loss. Of equal concern is any legislative action that might affect city revenues. The chart that follows indicates how major services provided to Phoenix residents have been adjusted in response to local economic and financial conditions. Because benchmarking is an important measure of the efficiency and effectiveness of services provided, we also have included multi-city comparisons of performance in several areas. Much of the data for these comparisons is taken from the 2004 International City/County Management Association's Center for Performance Measurement report. 29 PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 In anticipation of the turnover resulting from the Deferred Retirement Options Plan (DROP) starting in June 2006, the 2005-06 budget included 54 sworn positions to continue hiring actions outlined in the Police Department’s DROP hiring plan, which initially included 70 sworn positions in 2004-05. The 2006-07 budget adds 116 new police officer positions. Five of these are paid for with Aviation funds and will be stationed at the airport to provide a needed increase in airport security. The remaining 111 new sworn positions are intended to increase citywide patrol strength. Continued use of the Universal Hiring Grant will provide up to $75,000 per officer to fund these new sworn positions over the next three years. PUBLIC SAFETY POLICE Personnel Resources: In 1995-96, the Police Department had 2,372 sworn officers and 709 civilian employees. In March 2005, Phoenix voters approved new franchise agreements between the city and Arizona Public Service and Southwest Gas. The new agreements will generate an additional $16 million annually and will be used to provide critical public safety improvements. The 2005-06 budget reflected the addition of 86 sworn and 41 civilian support positions which was funded with the revenue generated from franchise agreements. The budget also included funding to replace expiring Local Law Enforcement Block Grant funds with General funds to continue seven evidence technicians and a criminalist supervisor in the police crime lab. Response Time Average: Due to increased calls for service in 1995-96, response time for Priority 1 emergency calls increased to 5 minutes 18 seconds. In 1994-95, because of increased service demand, budgeted response times for Priority 1 emergency calls had gradually increased from 4 minutes 54 seconds to 5 minutes 36 seconds in 2005-06. During this same time period, however, the percentage of 911 calls answered within 10 seconds improved from 78 percent to 81 percent. Based on 2004 ICMA data, city of Phoenix actual response times compare favorably to those of the benchmark cities as noted below: Total Average Response Times to Top Priority Calls: San Antonio – 5 min 12 sec PHOENIX – 5 min 30 sec San Jose – 7 min 18 sec Oklahoma City – 7 min 30 sec Austin – 8 min 0 sec Tucson – no data available 30 The budget also includes funding for 24 communications operators to meet growth in 911 calls. In addition, the budget includes funding for support staff to open and operate the Sunnyslope Neighborhood Police Station. In 2006-07, the Police Department will have 3,230 sworn positions or 2.1 for every 1,000 residents, and 1,083 civilian employees. The 2006-07 budget provides for a continued 5 minutes 36 seconds average response time for Priority 1 calls. PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 Since 1994-95, response times have increased 24 percent to 5 minutes 4 seconds for all fire and emergency medical calls. This is a 4 second increase over the previous year primarily due to increased population growth and traffic congestion. The overall emergency call activity level increased 23 percent (since 1994-95) during this period. The 2006-07 budget adds 67 sworn and eight civilians to open and operate four new fire stations and the new Public Safety Driver Education facility. Also included is funding to retain five fire training captains to provide for the department’s training needs over the next several years. Finally, three fire prevention specialists are included for the Annual Facilities Program. These positions are funded with Development Services fees. PUBLIC SAFETY FIRE Response Time Average: In 1995-96, the Fire Department maintained an average response time of 4 minutes 15 seconds for all fire and emergency medical calls. Based on 2004 ICMA data, city of Phoenix response times compare favorably to those of other benchmark cities as noted below: Percentage of All Calls to Which Response Time is Under 8 Minutes: Oklahoma City – 90 percent PHOENIX – 84 percent San Jose – 82 percent San Antonio – 82 percent Austin – no data available Long Beach – no data available Emergency Transportation: In 1995-96, the city of Phoenix had a total of 19 full-time and nine part-time ambulances in service. The city initiated the Emergency Transportation System in 1985-86 with 10 full-time and six part-time ambulances. In 1987-88, the Emergency Transportation System was increased to 12 full-time and six part-time ambulances. The addition of four ambulances funded with revenue from Proposition 301 and the conversion of the department’s last medic units to ambulances resulted in 19 full-time and nine part-time ambulances in service during 1997-98. The 2000-01 budget included funding to add a full-time ambulance at Station 38 in Ahwatukee Foothills. Two part-time ambulances were added in mid-2002-03 to improve response times in fast growing, outlying areas of the city. The 2006-07 budget includes funding for four paramedic rescues and two additional ambulances to be located at Station 57 (15th Avenue and Dobbins Road), Station 60 (19th and Dunlap avenues); Station 61 (19th Street and Indian School Road); and Station 62 (99th Avenue and Lower Buckeye Road). The 2004-05 budget included funding for two additional full-time ambulances at stations located at 40th Street and Baseline Road and I-17 and Carefree Highway. These additions increased the Emergency Transportation System to 22 full-time and 11 part-time ambulances. The 2005-06 budget included funding for three heavy rescues, funded with the revenue from new franchise agreements, to respond to emergency medical calls at incidents with mass casualties. 31 PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 In the 2005-06 budget, funds improved service for Dial-a-Ride, with an estimated increase of 12,800 service hours to weekday service. The 2006-07 budget restores hours at the Central Station and implements Saturday hours at Metrocenter Transit Center from 8 a.m. to 5 p.m. TRANSPORTATION PUBLIC TRANSIT Service Miles/Hours: In 1995-96, 11,000,000 annual bus service miles were provided on weekdays and Saturdays in the city of Phoenix. The 2005-06 budget also funded additional trips to alleviate overcrowded conditions on popular local routes including bus service on Van Buren Street (Route 3) from 67th Avenue to the city limits at 83rd Avenue. The addition was jointly funded by the cities of Avondale and Phoenix. These increases in service are offset by the elimination of very low use evening weekday service on 12 of 16 routes between the hours of 10:30 p.m. and midnight due to General Fund expenditure reductions. As a result of the continued enhancements, as well as a full year of 2005-06 service improvements, annual 2005-06 bus miles are estimated at 17,336,200 and Dial-a-Ride service hours are estimated at 336,650. The 2006-07 budget will also restore weekday fixed route service between 10:30 p.m. and midnight on 12 of 16 routes that experienced elimination of this service in 2005-06. The 2006-07 budget also funds increased frequency on routes 0 (Central Avenue), 16 (16th Street), 24 (24th Street), 45 (Broadway Road), 50 (Camelback Road), 56 (Elliot Road and 48th Street), and service improvements on routes 24 (Sky Harbor), 27 (27th Avenue), 35 (35th Avenue) and 131 (START). The 2006-07 budget will fund additional neighborhood circulator services and additional weekday RAPID trips. With continued enhancements and improvements annual 2006-07 bus miles are estimated at 17,886,000 and Dial-a-Ride service hours are estimated at 336,650. Average Weekday Bus Ridership: In 1995-96, the average weekday bus ridership was 115,700. 32 Under the 2005-06 budget, weekday ridership is estimated to rise to 152,875. Under the 2006-07 budget, weekday ridership is estimated to rise to 157,000. PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 The 2000-01 budget increased frequency of service to every two weeks to improve air quality. The budget also added capital funding to improve maintenance, pave dirt alleys, and install additional sidewalks and curbs. In 2003-04, budget constraints reduced funding for making quick concrete repairs to infrastructure throughout the city. Funding for paving dirt alleys also was reduced as was funding for retrofitting sidewalk ramps. An asphalt crew responsible for repairing asphalt pavement on major, collector and local streets was eliminated. No changes are included in the 2006-07 budget. TRANSPORTATION STREET TRANSPORTATION Major and Collector Street Sweeping and Maintenance: In 1995-96, sweeping major and collector streets was scheduled for every three weeks. Continued budget constraints in 2004-05 reduced funding for retrofitting sidewalk ramps and neighborhood concrete repairs. Paving of dirt alleys continued to see reduced funding in both 2004-05 and 2005-06. Residential Street Sweeping: In 1995-96, the city of Phoenix provided street sweeping service three times a year. In 1997-98, street sweeping frequency returned to four times a year to better coordinate with quarterly trash collection and improve the aesthetics of neighborhoods. No changes are included in the 2006-07 budget. No changes were included in the 2005-06 budget. 33 PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 In 1997-98, sealcoat miles increased to approximately 100 miles annually. The 2006-07 budget provides for 55 miles of city streets to be sealcoated annually. TRANSPORTATION STREET TRANSPORTATION Sealcoat: In 1995-96, the city of Phoenix provided 95 miles of sealcoat. In 2004-05, due to budget constraints and increased cost of materials, the number of sealcoat miles was reduced to 81 miles annually. Increased material costs and continued budget reductions in fiscal year 2005-06 further reduced the number of annual miles to be sealcoated to 49. Based on 2004 ICMA data, city of Phoenix paved road rehabilitation expenditures per capita compare very favorably to those of other benchmark cities as noted below: Paved Road Rehabilitation Expenditures per Capita: Kansas City – no data available Tucson – $6.31 San Jose – $11.95 Oklahoma City – $15.46 Austin – $15.68 San Antonio – $15.75 PHOENIX – $16.96 34 PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 This program funded 95 miles in fiscal year 1997-98. Between fiscal years 1998-99 and 2003-04 an average of 131 miles of overlay were performed annually. No changes are included in the 2006-07 budget. TRANSPORTATION STREET TRANSPORTATION Asphalt Overlay: In 1995-96, 82 miles of overlay were performed in addition to 18 miles of microseal. In 2004-05, 105 miles were overlaid. This decrease in miles was due to increased cost of materials and bad weather. In 2005-06, it is estimated that 85 miles will be overlaid. This decrease in miles is primarily due to increased cost of materials. COMMUNITY DEVELOPMENT HOUSING Scattered Sites Housing Program: In 1995-96, the Housing Department had 460 units. Affordable Housing Program: In 1995-96, this program had 770 units for families and individuals. This homeownership program allows eligible tenants the opportunity to purchase their home. The program expanded to a total of 470 homes in 1998-99. The 2005-06 inventory of 433 units reflects the sale of 37 homes to eligible tenants over the last few years. Under the 2006-07 budget, the program is expected to sell 10 Scattered Site homes, bringing the inventory down to 423 homes. This program began in 1990-91 and has expanded to a total of 1,359 city-owned units for families and individuals with 325 units added with 2001 bond funds, and 339 units added with other funding sources. Under the 2006-07 budget, the program is expected to maintain an inventory of 1,359 units. 35 PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 This program’s beginning inventory remained at 1,776 units located at various sites. Due to the reconstruction activities resulting from the HOPE VI grant, 280 units became unavailable at the Matthew Henson housing site. One additional unit was transferred to the St. Vincent de Paul organization. Under the 2006-07 budget, the program expects 100 units from Phase 2 of HOPE VI to be leased up. The total inventory is expected to increase to 1,616 units. COMMUNITY DEVELOPMENT HOUSING Conventional Housing Program: This program has been in effect since 1951-52. In 1995-96, there were 1,776 units. The inventory at the end of 2004-05 was 1,495 units. In 2005-06, the department demolished the remaining 78 HOPE VI units and leased up 99 units from Phase I. The inventory in 2005-06 was 1,516 and reflects the addition of 21 units. NEIGHBORHOOD SERVICES Neighborhood Preservation Case Cycle Time (Days) In 1995-96, 98 days were needed to complete a neighborhood preservation case. Over time, positions have been added to improve cycle times and implement a Landlord/ Tenant Education Slum Prevention program. Case cycle times improved from 83 days in 2001-02 to 55 in 2004-05 as staff added in previous years was fully trained and gained expertise in performing their duties. Case cycle times increased to 64 days in 2005-06 due to the complexity of dealing with different multi-unit properties. Based on 2004 ICMA data, city of Phoenix code enforcement expenditures per capita compares very favorably to those of other benchmark cities as noted below: Code Enforcement Expenditures per Capita: Austin – $3.96 PHOENIX – $4.71 Oklahoma City - not available Long Beach - not available 36 The 2006-07 budget is expected to maintain the case cycle time at 64 days. PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 In 2005, Phoenix’s employment growth rate was better than that of all of the following benchmark cities: It is anticipated employment will continue to grow in 2006-07, although growth will be at a modest rate. COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT Employment Growth Rate Compared to Other Cities This is a new measure. PHOENIX - 6.0% Austin - 3.7% Dallas - 3.2% San Antonio - 3.1% Ft. Worth-Arlington - 2.1% San Diego - 1.3% Los Angeles-Long Beach - 1.0% Kansas City - 0.8% San Jose - 0.4% COMMUNITY ENRICHMENT HUMAN SERVICES Head Start Program: In 1995-96, the Human Services Department served 2,501 children. School Based/School Linked Program: In 1995-96, this program provided services at 20 school sites. Senior Nutrition Program: In 1995-96, the Human Services Department served 500,000 congregate and home-delivered meals. The program is expected to serve 3,863 children during 2005-06. The program is expected to serve 3,979 children during 2006-07. The program began in 1990 with five school sites. In 1996-97, the program operated from 20 school sites and served 3,312 youth. By 1997-98, the program operated from 25 school sites through additional grant funding and various partnerships and served 3,360 youth. In 2005-06, the program is expected to serve 2,500 youth at 11 sites. The program is expected to serve 2,500 youth at 13 sites in the 2006-07 budget. The program will begin a new model in 11 area high schools. The program will provide services to at-risk ninth graders to ensure their success in high school. By 1998-99, the program served 499,000 congregate and home-delivered meals. In 2000-01, the program added a cook position and served 544,000 meals. For 2005-06 the program is expected to serve 595,332 congregate and home-delivered meals having expanded space at the Devonshire (formerly Squaw Peak) Senior Center. In the 2006-07 budget, the Westside, Shadow Mountain and Ahwatukee senior centers will relocate to new expanded space in the winter of 2006. With the expansion, the program is expected to serve 600,000 congregate and home-delivered meals. 37 PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 In 1996-97, the Paradise Valley pool was added, resulting in 28 total swimming pools. In 2000-01, staffing was added to provide year-round operation for the Paradise Valley Diving Well. In 2003-04, Pecos Pool was opened, increasing the number of pools to 29. No changes are included in the 2006-07 budget. COMMUNITY ENRICHMENT PARKS AND RECREATION Swimming Pools: In 1995-96, the city of Phoenix had 27 public swimming pools. No changes were included in the 2005-06 budget. Swimming Pool Season: In 1995-96, swimming pools were open for 12 weeks during the summer months. In 1996-97, eight lifeguards were added to maintain health and safety standards. In 2003-04, budget considerations forced the city to reduce the swim season to 10 weeks. All pools closed in mid-August to coincide with the beginning of the school year. No changes are included in the 2006-07 budget. The 2005-06 budget reduced the swim season by closing pools one week earlier, resulting in a nine-week season. Children’s Summer Recreation Programs: In 1995-96, the city of Phoenix provided recreation programs at 121 schools for 24-30 hours of programming for 6-8 weeks during the summer months. 38 Six sites were added in 1999-00 for a total of 127 program sites. No changes are included in the 2005-06 budget. No changes are included in the 2006-07 budget. PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 In 1996-97, 11 new sites were added citywide for a total of 72 sites. In 1998-99, four new sites were added for a total of 76 sites. Also at these four sites, Saturday programming was provided from 10 a.m. to 4 p.m. In 1999-00, 25 new sites were added for a total of 101. The 2000-01 budget added 32 new sites, for a total of 133. The 2001-02 budget added another 33 sites, raising the total to 166. No changes are included in the 2006-07 budget. COMMUNITY ENRICHMENT PARKS AND RECREATION School Recreation Program During School Year: In 1995-96, three hours of after-school recreation programming were approved on weekdays for nine months each year at 36 sites citywide. In addition, the Mayor and Council expanded the program with one-time funding to provide an additional 25 sites for a total of 61 sites for the 1995-96 fiscal year. No changes were included in the 2005-06 budget. LIBRARY Central Library: The new Burton Barr Central Library opened in May 1995, for 67 hours of operation per week. The 1998-99 budget added Thursday evening hours increasing total weekly hours back to 70. The 2000-01 budget extended service hours to 9 p.m. on school nights. As a result, the Central Library provided service 75 hours per week. In April 2003, Central Library hours were reduced to 66 hours per week as a result of citywide budget reductions. No changes included in the 2005-06 budget. No service changes are included in the 2006-07 budget. 39 PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 Desert Sage Library opened in July 1997 for 70 service hours per week, increasing the number of branch libraries to 12 and the total hours of service to 751 during the school year. Beginning in 1998-99, five branches increased hours to 9 a.m. to 9 p.m. Monday through Thursday and 9 a.m. to 6 p.m. Fridays. Beginning in 1999-00, seven branches that were only open on Sundays during the school year received funding to open on Sundays all year. In 2000-01 all branch library hours were extended to 9 p.m. on school nights. As a result, every branch library was open 75 hours per week or 900 hours per week total for 12 branches. In April 2003, branch library hours were reduced to 66 hours per week (792 total) as a result of budget reductions. The new Cesar Chavez Library is planned to open in summer 2006. This 25,000-square-foot regional branch library will serve western South Mountain Village 66 hours per week, increasing total branch library service hours to 924 per week. COMMUNITY ENRICHMENT LIBRARY Branch Libraries: In 1995-96, the city had 11 branch libraries with a total of 681 hours of weekly library service. The new 15,000-square-foot Desert Broom Library serving the Desert View Village area opened in February 2005 for 66 hours per week, increasing total branch library service hours to 858 per week. The new Palo Verde Library opened in January 2006. This 16,000-square-foot branch library replaced the existing 10,000-square-foot Palo Verde Library, which opened in 1966. Comparisons with Other Library Systems: This is a new measure. Based on 2004 ICMA data, the Phoenix library system compared very favorably to other benchmark cities as noted below: Cost per Item Circulated: PHOENIX – $2.11 San Antonio – $2.83 Tucson – $3.06 Austin – $3.87 40 This trend is expected to continue during the 2006-07 budget. PROGRAM SERVICE LEVEL IN 1995-96 SERVICE CHANGES THROUGH 2005-06 SERVICE CHANGES FOR 2006-07 In a March 2006 survey, Phoenix’s average monthly water bill compared favorably to the following benchmark cities: It is anticipated Phoenix water rates will continue this trend during 2006-07. ENVIRONMENTAL SERVICES WATER SERVICES Water Bill Comparison for Single-Family Homes This is a new measure. San Jose – $43.85 Kansas City – $32.96 Austin – $32.40 Dallas – $30.79 Albuquerque – $28.41 Tucson – $27.15 PHOENIX – $23.34 San Antonio – $19.16 Wastewater Bill Comparison for Single-Family Homes This is a new measure. In a March 2006 survey, Phoenix’s average monthly wastewater bill compared favorably to the following benchmark cities: It is anticipated Phoenix wastewater rates will continue this trend during 2006-07. San Jose – $43.85 Kansas City – $32.96 Austin – $32.40 Dallas – $30.79 Albuquerque – $28.41 Tucson – $27.15 PHOENIX – $23.34 San Antonio – $19.16 41 Budget Process, Council Review and Input, Public Hearings and Budget Adoption E ach year, the city of Phoenix budget is developed in conjunction with the Mayor and City Council, residents, city employees, the City Manager’s Office and all city departments. Modified Zero-Base Budgeting Process The city of Phoenix uses a modified zero-base budgeting process. Each fall, departments submit an estimate (called the “base budget”) of the costs associated with providing their current levels of service for the following year. Budget and Research staff review these base budget estimates to ensure that only the funding needed to continue current service levels is included in the department’s base budget for the following year. This Budget and Research review is called a technical review because of its non-programmatic, line item by line item review. A department’s base budget funding may differ from its current year funding for a variety of reasons. For example, an increase or decrease in electricity or postage rates would be reflected in the base budget. After these base budget requests are reviewed, departments are asked to identify 5 to 10 percent of their budget for potential elimination. These proposals are called base reductions and represent the department’s lowest-priority activities. Departments are also asked to provide any requests for new or expanded programs. These are called supplemental budget requests. Base reductions and supplemental requests include all costs associated with a specific program or service. For example, costs for a swimming pool would include personnel costs for a lifeguard and other staff, chemicals for the pool, building maintenance and utilities. When base reductions and supplemental requests are proposed, they are ranked together according to the department’s priorities. The department’s ranking indicates whether making a base reduction to add a new program would be possible, and also indicates which supplemental programs and base reductions are most critical to the department. City Council members also are asked to submit their own ideas for budget changes. The City Council then provides input to the city manager for the preparation of the Trial Budget, which is submitted to City Council early each spring. The purpose of the Trial Budget is to enable the community and the City Council to comment on a balanced budget well before the city manager is required to submit his recommended budget to the City Council in mid-May. Public hearings are conducted throughout the community during day and evening hours. The City Council makes final budget recommendations after the city manager’s preliminary budget is submitted. 2006-07 Budget Process In February 2006, Budget and Research staff presented an initial budget status report to the City Council. The Mayor and Council were advised that estimated General Fund revenue growth was positive but balancing the 2006-07 budget would be challenging. Several factors impacting next year's budget included: 1) the shift of state-shared revenues to other faster growing Arizona cities as a result of the 2005 census, 2) new operating costs for capital facilities coming on line next fiscal year in addition to the full-year's impact of facilities opened throughout the current fiscal year, 3) employee compensation, and 4) fuel and utility cost increases. The report concluded that a breakeven 2006-07 General Fund budget would be likely. The report also provided an update on the city’s enterprise funds: Water, Wastewater, Solid Waste, Civic Plaza and Golf. With the exception of the Golf Fund, all of these funds remain in sound financial condition. However, they all also face future cost pressures. Trial Budget On April 4, a Trial Budget was presented to the Mayor and City Council. At that time, the Mayor and Council were advised that increased revenue projections and additional cost savings had resulted in the availability of $2,443,000 for improving General Fund community services next year. These funds were combined with available earmarked public safety franchise fee revenues to provide for an increased public safety investment. The proposed 2006-07 budget included the addition of 116 sworn positions, four new fire stations, five training captains, a new neighborhood police station and the addition of new police communications operators. In addition, the Trial Budget included $5.6 million to fund the opening costs of several new capital facilities, including 17 new or improved parks facilities such as the new Pecos Community Center. 43 This facility will combine a senior center, a community center and a new citizen service center. Other new or expanded parks facilities include Desert West Park, 35th Avenue Community Learning Center, Phoenix Center North Building, Winship House, Tovrea Castle and Carraro Cactus Garden, Reach 11 Recreation Area, Dove Valley Park, an unnamed park at Cave Creek and Tatum roads, Tramonto Park, Deem Hills Park, Stetson Valley Neighborhood Park, Washington Adult Center, an unnamed park at 31st Avenue and Roeser Road, Laveen Basin, Laveen Farms Park and Rio Salado Habitat. Also included were funds for the new Cesar Chavez regional library scheduled to open in July 2006. The proposed budget also provided staff and other operating costs for street landscaping maintenance of new streets citywide. In the non-General Fund areas of the proposed budget, additional funding was recommended to improve community services. Transit 2000 funds were proposed to provide numerous improvements to transit services including the restoration of some service reductions of the past few years. Late night hours eliminated on 12 routes in 2005-06 were restored, as were Saturday hours at the Central Transit Station and Metrocenter Transit Center. Funds to implement new neighborhood circulator bus routes also were proposed. These routes will be identified through a community input process. Improvements on a number of routes were proposed, including adding RAPID trips to meet demand and reduce overcrowding. Convention Center funds were included to open and operate the new Phoenix Convention Center West Building as well as improve customer service. A facility coordinator was added to manage the new state-of-the-art conference center designed for corporate clients. Funds also were included to implement a new Guest Experience Program. Development Services funds were recommended to fund an expansion of the Development Services Annual Facilities Program and provide needed administrative support. Additional Aviation funds were included for the operation and maintenance of the new in-line explosive detection baggage handling system to improve customer service at the airport. Additional staff also was recommended to maintain complex equipment at several new facilities and provide technical support. Water funds were included to open the new Lake Pleasant Water Treatment Plant, including a position to administer and monitor the highly complex contract for operation of the facility. Water funds also were proposed to improve technology management and support. Community Input The proposed budget was presented at 13 budget hearings conducted throughout the community from April 5 through April 18 including special hearings for youth and seniors. Following a presentation describing the proposed budget, residents were invited to comment. In addition ce d on a ba la n co m m en t se rt to in y it er n p a tu l. A n ew sp n th e op p or ci ve n gi A ri zo n a ou C d re a n y m em be rs h oe n ix C it R ep u bl ic a y P a it e n n th u zo m ri by A C om op te d d in T h e re it is a d s d is tr ib u te L a Vo z. bu d ge t be fo bu d ge t w a cl u d ed in ed in os s p a ro w p n e io th rs t u ve a bo a n is h t, a n d a Sp In fo rm a n 44 to the budget hearings, the city communicated the budget to the community through the “Phoenix Budget for Community Review” that outlined the proposed service enhancements as well as a calendar of budget hearing dates. This publication was inserted in the April 9 edition of The Arizona Republic and the April 12 edition of the Arizona Informant. A Spanish version of this publication was included in La Voz. Copies of the inserts also were available at various locations throughout the city, including all budget hearings. In total, nearly 200,000 of the inserts were made available to residents throughout the city. Residents also were invited to send comments and questions through the city’s Web site. This publicity of the Trial Budget allowed the City Council and the community to comment on a balanced budget. 2006-07 Budget Calendar February 28 General Fund Budget Status Report April 4 2006-07 Proposed Balanced Budget Week of April 9 Budget Inserts in Local Newspapers April 5 - 18 Community Budget Hearings May 2 2006-07 Proposed Budget and 2006-11 Preliminary Capital Improvement Program presented to the City Council April 20 2001 Bond Committee Meeting May 2 City Manager’s Recommended 2006-07 Budget distributed to City Council May 9 Final City Council Budget Review May 31 Tentative Adoption of 2006-07 Budget and 2006-11 Capital Improvement Program June 14 Final Budget Adoption July 5 Property Tax Adoption Tentative Budget Adoption – May 31 A public hearing and tentative budget adoption were held on May 31 in compliance with the City Charter requirement that the budget be adopted no later than June 30. Upon tentative adoption, the budget becomes the City Council’s program of services for the ensuing fiscal year. At this point, the City Council may later decrease the budget, but only in certain instances may the budget be increased. Generally, the ability to increase the budget applies to expenditures exempted from the state expenditure limitation. Transfers between department appropriations are still permissible before the final budget is adopted. Final Budget Adoption - June 14 A public hearing and final adoption were conducted on June 14. Adoption of the property tax levy was scheduled no less than 14 days later on July 5 in accordance with state law. The following chart is an overview of the 2006-07 budget calendar. 45 General Budget and Financial Policies C ity of Phoenix budget and financial policies are governed by Arizona state law, the City Charter and generally accepted accounting standards. These laws and standards set budget calendar dates, provide for budget control, describe ways to amend the budget after adoption, and identify appropriate methods for budgeting, accounting and reporting. The Arizona Constitution establishes the property tax system and sets tax levy and assessed valuation limits. The constitution also provides annual expenditure limits and sets total bonded debt limits. The city’s budget policies are extensions of these basic laws and follow generally accepted governmental budgeting and accounting practices and standards. A BALANCED BUDGET IS REQUIRED Arizona law (Title 42 Arizona Revised Statutes) requires the City Council to annually adopt a balanced budget by purpose of public expense. State law defines this balanced budget as “the primary property tax levy, when added together with all other available resources, must equal these expenditures.” Therefore, no General Fund balances can be budgeted in reserve for subsequent fiscal years. Instead, an amount for contingencies (also commonly referred to as a “rainy day fund”) can be included in the budget each year. The City Charter also requires an annual balanced budget. The Charter further requires that “the total of proposed expenditures shall not exceed the total of estimated income and fund balances.” Annual Budget Adoption Requirements The City Charter and state statutes contain legal deadlines and actions that must be followed in adopting the budget. In cases where the deadlines conflict, the city meets the earlier of the two dates. The deadlines and formal actions prescribed by both, as well as the actual or planned dates for the 2006-07 budget development process are as follows. 2006-07 Budget Dates Action Required City Charter Prescribed Deadline Arizona State Statute Prescribed Deadline City manager’s recommended five-year Capital Improvement Program submitted to the City Council At least 3 months prior to final date for submitting the budget or a date designated by the City Council. Capital Improvement Program not required. April 4 City manager’s proposed budget for ensuing year presented to the Mayor and City Council. On or before the first Tuesday in June or a date designated by the City Council. City manager budget not required. May 2 Publish general summary of budget and notice of public hearing that must be held prior to tentative budget adoption. Publish in newspaper of general circulation at least two weeks prior to first public hearing. No requirement. Publish week of May 15 Publish notice of public hearing which must be held prior to adoption of five-year Capital Improvement Program by resolution. Publish in newspaper of general circulation at least two weeks prior to first public hearing. No requirement. Publish week of May 15 47 Action Required City Charter Prescribed Deadline Public hearing immediately followed by tentative budget adoption with or without amendment. On or before the last day of June. On or before the third Monday of July. May 31 Publish summary of tentatively adopted budget and notice of public hearing which must precede final adoption. No requirement. Once a week for two consecutive weeks following tentative adoption. Publish weeks of June 5 and 12 Publish truth-intaxation notice twice in a newspaper of general circulation. No requirement. First, at least 14 but no more than 20 days before required public hearing; then at least seven days but not more than 10 days before required hearing. Publish on May 26 and June 5 Public hearing No requirement. including truth-intaxation hearing immediately followed by final budget adoption. No later than second Monday in August. June 14 Property tax levy adoption. No sooner than 14 days following final budget adoption and no later than the third Monday in August. No later than the last regularly scheduled Council meeting in July. Amendments to the Budget After Final Adoption Generally, by Arizona state statute, no expenditure may be made nor liability incurred for a purpose not included in the budget even if additional funds become available. Phoenix’s level of legal budgetary control is by fund except for the General Fund for which control is by program. 48 2006-07 Arizona State Statute Budget Prescribed Deadline Dates the General Fund and in many other restricted funds. Informal reservations of contingencies are made throughout the fiscal year as approved by the City Council. Actual expenditures are recorded in the appropriate departmental budget. Then, at the end of the fiscal year, contingency amounts actually needed are transferred by City Council formal action to the appropriate departmental budget. If funds are available, appropriations may be increased for certain funds specifically excluded from the limitations in the Arizona Constitution. These funds are bond proceeds, Arizona Highway User Revenue, debt service and grants. At the end of each fiscal year, the City Council adopts an amendment to the budget ordinance for any necessary increases in these funds. These increases are largely caused by federal grants that become available throughout the fiscal year and by timing changes in capital projects funded by bond proceeds. Finally, transfers of amounts within any specific fund or within General Fund programs can be made upon approval of the city manager. PROPERTY TAXES AND BONDED DEBT LIMIT July 5 In certain instances, however, the budget may be amended after adoption. All budget amendments require City Council approval. These are (1) transfers from any contingency appropriation, (2) increases in funds exempt from the Arizona State Constitution expenditure limit and (3) reallocations of amounts included in the original budget. An amount for contingencies is included in Arizona’s property tax system provides for two separate tax systems. A primary property tax is levied to pay current operation and maintenance expenses. Therefore, primary property tax revenue is budgeted and accounted for in the General Fund. A secondary property tax levy is restricted to the payment of debt service on long-term debt obligations. Therefore, secondary property tax revenue is budgeted and accounted for as a special revenue fund. Primary Property Tax Restrictions Primary property tax levies are restricted to an annual 2 percent increase plus an allowance for growth attributable to previously unassessed properties (primarily new construction). Growth in primary assessed valuation is restricted annually to the greater of 10 percent, or 25 percent of the difference between primary and secondary values, plus an allowance for previously unassessed properties. The City Charter requires that 8 cents of the primary property tax levy be allocated to the Parks and Playground Fund. Secondary Property Tax Restrictions Secondary property tax levies are restricted in their use to the payment of annual debt service on long-term debt obligations. Any over-collection of the secondary levy or any interest earned by invested secondary property tax funds must be used to reduce the following year’s levy. No restrictions limit the annual growth in secondary assessed valuations. Secondary assessed valuations are intended, therefore, to follow general market conditions. Generally, Arizona counties assess property and collect all property taxes. Proceeds are distributed monthly to the appropriate jurisdictions. Bonded Debt Limit Arizona cities can issue general obligation bonds for purposes of water, sewer, artificial light, open space, preserves, parks, playgrounds and recreational facilities up to an amount not exceeding 20 percent of the secondary assessed valuation. General obligation bonds can be issued for all purposes other than those previously listed up to an amount not exceeding 6 percent of the secondary assessed valuation. An analysis of bonded debt limits is provided in the Debt Service chapter. ANNUAL EXPENDITURE LIMITATION Since fiscal year 1982-83, the city of Phoenix has been subject to an annual expenditure limitation imposed by the Arizona Constitution. This limitation is based upon the city’s actual 1979-80 expenditures adjusted for interim growth in population and inflation as measured by the gross domestic product implicit price deflator. The constitution exempts certain expenditures from the limitation. The principal exemptions for the city of Phoenix are debt-service payments, expenditures of federal funds, certain state-shared revenues and other long-term debt obligations. Exemptions associated with revenues not expended in the year of receipt may be carried forward and used in later years. The 1979-80 expenditure base may be adjusted for the transfer of functions between governmental jurisdictions. The constitution provides for four processes to exceed the expenditure limitation: (1) a local four-year home rule option, (2) a permanent adjustment to the 1979-80 base, (3) a one-time override for the following fiscal year, and (4) an accumulation for pay-as-you-go capital. All require voter approval. City of Phoenix voters have approved six local home rule options in 1981, 1985, 1991, 1995, 1999 and 2003. Before 1999, the home rule options generally excluded enterprise operations such as Aviation, Water, Wastewater and Solid Waste from the expenditure limitation. In 1999, and again in 2003, the voters approved establishing the city’s annual budget as the spending limit. The current home rule option is in effect through fiscal year 2007-08. Finally, in 1981, the voters approved the permanent annual exclusion of the following amounts for pay-as-you-go capital: $5 million for Aviation, $6 million for Water, $6 million for Wastewater and $2 million for General Fund street improvements. Each year, the city uses only those exemptions needed to comply with the expenditure limitation. Exemptions not needed are carried forward to future years and used for future spending capacity. BUDGET BASIS OF ACCOUNTING The city’s budget basis of accounting differs from generally accepted accounting principles (GAAP) used for preparing the city’s comprehensive annual financial report. The major differences between the budget basis and GAAP basis are listed below. A reconciliation of budgetary and GAAP fund balances is provided each year in the comprehensive annual financial report. 1. For budgetary purposes, encumbrances (contractual commitments to be performed) are considered the equivalent of expenditures rather than as a reservation of fund balance. 2. Grant revenues are budgeted on a modified cash basis. GAAP recognizes grant revenues on an accrual basis. 3. Fund balances reserved for inventories, bonded debt and unrealized gains or losses on investments are not recognized in the budget. 4. In-lieu property taxes and central service cost allocations (levied against certain enterprise and special revenue funds) are budgeted as interfund transfers rather than revenues and expenses. 5. For budgetary purposes, all fixed assets are fully expensed in the year acquired. The differences between budgetary and GAAP accounting listed above are similar to those of many other local governments. These differences exist largely because they provide a more conservative view of revenues and expenditures and because they provide greater administrative controls. 49 GENERAL FINANCIAL POLICIES In addition to the legal constraints outlined in the previous section, a number of administrative and City Council-approved policies provide guidance and direction to the budget development process. Form of Budget Adoption 1. Ordinances - Three budget ordinances are adopted each fiscal year: (1) the operating funds ordinance, (2) the capital funds ordinance and (3) the re-appropriated funds ordinance. The last ordinance is required because unexpended amounts, including those encumbered, lapse at the end of the fiscal year. Since all expended amounts must be included in the budget adoption ordinance, the city re-budgets all encumbrances outstanding at year’s end. 2. Allocation of Appropriations Funds appropriated by the City Council are allocated to programs, offices, departments, divisions, sections, projects and type of expenditure by the city manager or as delegated to the Budget and Research director to provide managerial control and reporting of budgetary operations. 50 3. Contingency Amounts A contingency allowance (also known as a “rainy day fund”) is appropriated to provide for emergencies, mid-year community service requests, unanticipated expenditures and revenue shortfalls. Expenditures may be made from contingencies only upon approval by the City Council with recommendation by the city manager. In 1995-96, the City Council adopted a policy to provide a contingency equal to 3 percent of operating expenditures in the General Fund. However, in 2003-04, the City Council reduced the General Fund contingency to 2.5 percent of operating expenditures in order to close a budget deficit. The 2004-05 and 2005-06 budgets maintained the General Fund contingency at 2.6 percent of operating expenditures, while the 2006-07 contingency will be at 2.7 percent. Enterprise and special revenue funds have varying levels of contingency funding consistent with the variability in revenues and expenditures associated with the services provided. 4. Budget Controls - At the department level, control of expenditures is governed by Administrative Regulation. City departments prepare revised expenditure estimates twice a year. The Budget and Research Department keeps the city manager and the City Council advised on the status of the budget through periodic budget status reports. Mid-year revenue shortfalls and/or expenditure increases can result in the adoption of mid-year expenditure reductions. Cost Allocation and Expenditure Policies 1. Central Services Cost Allocation The Finance Department annually calculates the full cost of central services provided to enterprise funds. Except for the Golf Fund, these allocated costs are recouped from the enterprise funds through fund transfers to the General Fund. 2. Administrative Cost Recovery The Finance Department prepares an indirect cost allocation plan that conforms to federal guidelines for grant reimbursement of appropriate administrative costs. The allocated costs are charged to eligible federal grant funds through a fund transfer to the General Fund. 3. Internal Cost Accounting Allocation - Interdepartmental services performed by one department for another are credited to the performing department and charged to the receiving department to reflect the accurate costs of programs. The rates used are intended to reflect full costs including appropriate overhead. 4. Enterprise Cost Recovery Aviation, Water, Wastewater and Solid Waste are fully self-supporting from rates, fees and charges and, as such, are budgeted and accounted for as enterprise funds. Cost recovery includes direct operation and maintenance expenses, capital expenditures, debt service, indirect cost allocation, and in-lieu property taxes, where allowable. The Convention Center, while accounted for using enterprise accounting principles, is partially financed from rental and parking fees with the remainder coming from earmarked sales taxes. The Golf Fund, also accounted for using enterprise accounting principles, does not reimburse the General Fund for citywide indirect cost allocations. Finally, federal regulations preclude the Aviation Fund from paying in-lieu property taxes. By City Council policy, the Convention Center Fund does not pay in-lieu property taxes. 5. Employee Compensation Costs Costs for employee compensation including all wages, social security, industrial, health, life, unemployment, dental insurance and other personal allowances are allocated to each department. Annual amounts for cash conversion of vacation, compensatory time and sick leave are included in the budget. However, future values of compensated absences are not included in the budget but are disclosed in the notes to the comprehensive annual financial report at year’s end. 6. Pension Funding - In addition to other employee compensation amounts, pension amounts are allocated to each department. The required employer contribution is determined actuarially to fund full benefits for active members and to amortize any unfunded actuarial liability as a level percent of projected member payroll over 20 years from the end of the current fiscal year. 7. Self-Insurance Costs - With a few exceptions, the city is fully self-insured for general and automotive liability exposures. The major exceptions to self-insurance include airport operations, police aircraft operations and excess general and automotive liability for losses in excess of $5 million. An independent actuary determines the self-insurance costs, which are combined with purchased policy costs and allocated to department budgets based on the previous five years’ loss experience of each department. 8. Maintenance and Replacement of Rolling Stock and Major Facilities A multiyear plan is used to project the need for, and costs of, significant street pavement, facility and equipment repair and replacement. The planning horizon for each asset category is matched to the life of the asset. Annually, that plan, combined with periodic physical inspections of streets, facilities, vehicles and other equipment, is used to develop funding levels for inclusion in the budget. During economic downturns, these amounts are debt-financed with a repayment schedule shorter than the expected life of the asset. Revenue Management All local governments struggle to generate the funds necessary to provide, maintain and enhance the service demands of their community. Due to the legal limitations on property taxes in Arizona, and due to the pre-emption of city-imposed income, luxury and gas taxes, Arizona cities and towns largely rely on local sales taxes and state-shared sales, income and vehicle license taxes. In Phoenix, 43 percent of the General Fund comes from the local sales tax. This reliance on sales tax collections results in a highly cyclical revenue base. Given our reliance on sales taxes, developing personal income is an important step in managing our revenue base. In recent years, considerable effort has been devoted to attracting employers that will provide our residents with quality jobs and to developing a local workforce that will support the needs of quality employers. We also have worked to develop an employment base that is not as heavily concentrated in the highly cyclical construction industry. Also important to managing our revenue base is the future growth expected in catalog and Internet sales. Our use tax is an important tool in reducing this potential future threat. The development of our tourism-related sales tax base (hotels, restaurants and short-term car rentals) is another important hedge against future revenue loss due to growth in Internet and catalog sales. Finally, utility taxes that are levied against the sales of electricity, natural gas, telecommunications, water and sewer make up about 20 percent of our local sales tax base. Generally, utility taxes are not responsive to economic conditions and provide us with a fairly significant revenue source that remains stable during periods of economic downturn. 51 In addition, several detailed revenue policies are listed below. 1. City Sales and Use Taxes (Privilege License Taxes) The City Council may set the city sales tax rate by ordinance. The city sales tax rate on retail sales and most other categories is 1.8 percent. The rate varies for certain other specialized taxing categories as outlined in the Operating Fund Revenues section of this document. 2. Property Taxes - By City Council policy, the combined city property tax rate is $1.82 per $100 of assessed valuation. The primary property tax levy is annually set at the previous year’s levy amount plus an amount associated with new construction and an amount to partially provide for the operating costs of new capital facilities. The secondary levy is then set at an amount necessary to achieve a total $1.82 tax rate. 3. In-Lieu Property Taxes In-lieu property taxes are charged to the Water, Wastewater, Solid Waste and Public Housing funds based upon acquisition or construction cost with the appropriate assessment ratio and current property tax rate applied. These amounts are calculated annually by the Finance Department. 4. Annual User Fee Review The city auditor conducts a comprehensive user fee review to project cost recovery rates, and then compares the projections to the established cost recovery policy. The rates are based upon generally accepted full-cost accounting standards. The city manager recommends expenditure reductions or fee adjustments to the City Council to maintain the established cost recovery policy. 52 5. Fines and Forfeitures The Municipal Court has jurisdiction over establishing many of the fine and forfeiture fee schedules. 6. Parks and Recreation Fees and Charges - The Parks and Recreation Board has jurisdiction over establishing charges for miscellaneous recreational facilities and advising the City Council on fees to be set for golf courses, tennis centers and swimming pools. Library – State law requires that funds received for library purposes are segregated in a separate library fund. Revenues include library fines and fees, which are used to help offset library expenditures. Cable Communications – Included in this fund are the revenues and expenditures associated with administering cable television licensing and programming the government and education access channels. 7. Interest Earnings - Interest earnings from the investment of temporarily idle funds are credited to the fund generating the earnings. FUND STRUCTURE Special Revenue Funds Excise Tax – The excise tax fund is used to account for tax revenues ultimately pledged to pay principal and interest on various debt obligations. The budget presented here is made up of three distinct fund groups: general, special revenue and enterprise funds. All planned uses of these fund types are included in the annual budget. Fiduciary funds, which are described later in this section, are not included in the annual budget. Police and Fire Neighborhood Protection – These funds are used to General Funds Police and Fire Public Safety Enhancement – These funds are used to General – These revenues come from four major sources: local sales (privilege license) taxes, local primary property taxes, state-shared revenues, and user fees and other revenues. State-shared taxes include state-shared sales, vehicle license and income taxes. User fees and other revenues include cable and ambulance fees as well as interest earnings and fines. General funds are used to provide the most basic of city services: police, fire, parks, library, municipal court and neighborhood services. Parks – The City Charter requires that a portion of the primary property tax levy be used to support parks programs. To demonstrate compliance with this requirement, all parks revenues and expenditures are segregated in a separate fund. account for the revenues and expenditures associated with a voter-approved 0.1 percent increase in the sales tax in 1993. Revenue from the tax increase is earmarked for police and fire neighborhood protection programs, and police Block Watch programs. account for the revenues and expenditures associated with a voter-approved 2.0 percent increment of the 2.7 percent privilege license (sales) tax on utilities with franchise agreements in March 2005. The Police Department, including the Office of Emergency Management will be allocated 62 percent and the Fire Department 38 percent of revenues with the interest earnings going to the General Fund. Parks and Preserves – This fund is used to account for the funds generated by the 0.1 percent increase in the sales tax approved by voters in 1999. The funds are to be used for the purchase of state trust lands for the Sonoran Desert Preserve Open Space, and the development and improvement of regional and neighborhood parks to enhance community safety and recreation. City Improvement – This fund is used to account for lease/purchase payments incurred as a result of facilities built by the Civic Improvement Corporation. Capital Construction – This fund is used to account for the utility taxes (2 percent) on telecommunication services that are to be used for pay-as-you-go capital projects. Transit 2000 – This fund is used to account for the 0.4 percent sales tax dedicated to transit approved by voters on March 14, 2000. Also included in this fund are fare box collections and DASH (Downtown Area SHuttle) revenues. Development Services – Fee revenues and expenditures associated with permitting and inspection services provided by the Development Services Department are maintained in this fund. Court Awards – This fund includes revenue resulting from court awards of confiscated property under both the federal and state Organized Crime Acts. Expenditures are restricted to additional law enforcement programs in the Police and Law departments. Secondary Property Tax and General Obligation Bond Redemption – In Arizona, property taxes are divided into two separate levies: primary and secondary. The primary levy can be used for general operating and maintenance expense. The secondary levy can only be used for payment of general obligation bond interest and redemption. Because of this restriction, secondary property tax funds are segregated in a special revenue fund. Local Transportation Assistance (LTA) – This fund includes the Phoenix share of Arizona State Lottery proceeds distributed to cities and towns. These funds are to be used for mass transit operating and capital expenses. In addition, if $23 million is distributed, then up to 10 percent may be used for cultural, educational, historical, recreational, or scientific facilities or programs. LTA funds used for non-transit purposes must be matched on a 50/50 basis with non-public cash. Sports Facilities – This fund accounts for revenues generated from a 1 percent hotel/motel tax and a 2 percent tax on short-term vehicle rentals. These funds are designated for payment of debt service and other expenditures related to the downtown sports arena. Public Transit – This fund is used to account for transit services that are paid by and provided for other cities or funded by the Regional Public Transportation Authority. Community Reinvestment – Revenues and expenditures associated with economic redevelopment agreements are maintained in this fund. state-collected gas taxes and a portion of other state-collected fees and charges such as registration fees, driver’s licenses and motor carrier taxes. These funds can only be used for street maintenance and construction, and street-related debt service. Enterprise funds include Water, Wastewater, Aviation, Solid Waste, Golf and Convention Center funds. With the exception of Convention Center funds, these funds come entirely from the fees and rents paid by those who use the services and facilities provided. Enterprise funds are “self-contained” and can only be used to pay for the costs associated with enterprise fund-related services and programs. Therefore, fees are set to recover all costs associated with providing these services. These costs include day-to-day operations and maintenance, in-lieu property taxes, pay-as-you-go capital improvements and debt service. Convention Center funds come from a combination of rental and parking income and earmarked sales taxes. These earmarked taxes include a portion of the hotel, restaurant and bar, construction contracting and advertising taxes levied by the city. This tax stream has been earmarked to repay the debt issue for the Convention Center facility and to provide for operations and maintenance costs. Other Restricted Funds – This is a Fiduciary Funds combination of funds used to segregate restricted revenues and related expenses. Included are Court Technology Enhancement Fees, Parks revenues such as Heritage Square and Tennis Center, and various other receipts and contributions received in small amounts and earmarked for restricted purposes. Fiduciary funds, including trust and agency funds, represent funds held for others. As such, these funds are not included in the annual budget. Also, reserves and expenditures for fiduciary funds are not presented in the comprehensive annual financial report (CAFR). However, the year-end balances held in fiduciary funds are provided in the CAFR. Grant Funds Arizona Highway User Revenue (AHUR) – AHUR funds are made up of Enterprise Funds Grant funds include Community Development Block Grant funds, Public Housing funds, Human Services funds and various other smaller grant allocations. Grant funds can be applied only to grant-eligible expenditures. 53 Revenue Estimates R include portions of court fines and fees, and ambulance fees. Finally, the revenue estimates reflect an approved adjustment to property tax revenues. Consistent with recommendations of the 2006 Bond Committee, the primary property tax levy has been increased to the maximum allowable amount. The current $1.82 combined primary and secondary property tax rate will remain the same. The state and local economy achieved strong growth in 2004-05, bolstered by strong growth in construction, retail sales and business and personal income taxes. evenue estimates for 2006-07 are based on assumptions about the local economy and population changes, on underlying cost estimates for cost-recovery rates and fees, and on the continuation of current state revenue collection and sharing practices. Adjustments to fees, such as those for water and sewer service, are established in separate planning processes and are incorporated in these estimates. In addition, other revenue estimates are developed using the most current information from outside entities that establish such fees. Examples of revenues derived from fees set by outside entities This trend has continued into 2005-06. It is assumed that growth will stabilize for the balance of the year. Personal income is a major driver for estimating state and local sales taxes and state-shared income taxes. Consistent with projections by local economists, the chart below shows that personal income is expected to grow by 8.1 percent in 2006-07, down from the 8.8 percent estimated for 2005-06. In non-General Fund revenues, the 2006-07 estimates for Water, Wastewater and Solid Waste systems reflect full year impacts of 2005-06 fee increases. Personal Income Growth 12% 10.4% 10% 8% $ $ $ 6% 8.8% 8.0% 7.9% 6.7% 6.5% $ $ 4% 5.8% 4.6% 4.3% $ $ $ $ 8.1% $ $ 2% 0% 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Fiscal Year 55 GENERAL REVENUES BY MAJOR SOURCE (In Thousands of Dollars) Revenue Source 2004-05 Actuals % of Total 2005-06 Estimate % of Total 2006-07 Budget % of Total Increase/(Decrease) from 2005-06 Est. Amount Percent $356,702 2,263 42.3% 0.3 $402,800 2,350 42.9% 0.3 $440,536 2,350 43.1% 0.2 $37,736) _) 9.4% 0.0 $358,965 42.6% $405,150 43.2% $442,886 43.4% $37,736) 9.3% Local Taxes Sales Tax Privilege License Fees Subtotal State-Shared Revenues Sales Tax State Income Tax Vehicle License Tax Subtotal Primary Property Tax 123,788 121,440 56,552 $301,780 14.7 14.4 6.7 35.8% 140,520 138,313 60,765 $339,598 15.0 14.7 6.5 36.2% 144,557 166,390 60,584 $371,531 14.2 16.3 5.9 36.4% 4,037) 28,077) (181) $31,933) 2.9 20.3 -0.3 9.4% 82,547 9.8 90,396 9.6 95,660 9.4 5,264) 5.8 2,459 7,968 19,301 820 2,930 28,716 1,346 1,048 3,165 21,803 11,111 3,223 14,035 1,767 0.3 0.9 2.3 0.1 0.3 3.4 0.2 0.1 0.4 0.2 1.3 0.4 1.7 0.2 2,507 8,464 21,485 1,040 1,122 28,623 1,325 1,583 5,320 1,515 11,700 2,240 14,988 1,296 0.3 0.9 2.3 0.1 0.1 3.1 0.1 0.2 0.6 0.2 1.2 0.2 1.6 0.1 2,533 8,475 23,110 1,121 2,514 31,035 1,325 1,718 5,151 1,558 11,822 2,247 17,117 1,713 0.2 0.8 2.3 0.1 0.2 3.0 0.1 0.2 0.5 0.2 1.2 0.2 1.7 0.2 26) 11) 1,625) 81) 1,392) 2,412) _) 135) (169) 43) 122) 7) 2,129) 417) 1.0 0.1 7.6 7.8 +100.0 8.4 0.0 8.5 -3.2) 2.9 1.0 0.3 14.2 32.2 Subtotal $99,692 11.8% $103,208 11.0% $111,439 10.9% $8,231) 8.0% TOTAL GENERAL FUND $842,984 100.0% $938,352 100.0% $1,021162 100.0% $83,164) 8.9% User Fees/Other Revenues Licenses & Permits Cable Communications Fines & Forfeitures Court Default Fee Engineering & Architectural Services Fire Hazardous Materials Inspection Fees Library Fees Parks & Recreation Planning Police Street Transportation Other Service Charges All Others 56 GENERAL FUNDS Total 2006-07 General Fund revenues are estimated to be $1,021.5 million or 8.9 percent more than 2005-06 estimates of $938.4 million. General Fund revenues consist of four major categories: local taxes, state-shared revenues, primary property taxes and user fees. Following are descriptions of the revenue sources within these four categories and explanations of 2006-07 revenue estimates. impact of the 2005 census. As other cities experience faster population growth rates, Phoenix will receive a smaller percentage of state-shared revenue beginning in 2006-07. The table on the opposite page details estimated General Fund revenues by major category. Local and state sales tax collections represent approximately 58 percent of General Fund revenues. Local and state sales taxes for 2006-07 are expected to grow by 7.7 percent over the 2005-06 estimates. This is a decrease from the 13.0 percent growth rate anticipated in 2005-06. The most significant contributor to the decreased growth in 2006-07 is the 14% 13.0% Local and State Sales Tax Revenue Growth 12% 10% 8.1% 8.0% 7.7% 8% 6.2% 6% 3.3% 4% 2% 0.3% 0% -0.5% -2% 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Fiscal Year 57 LOCAL SALES TAXES AND FEES This major revenue category consists of various local sales taxes, privilege license fees, use tax, and franchise taxes and fees. The 2006-07 estimate is $442.9 million, which is $37.7 million or 9.3 percent greater than the 2005-06 estimate of $405.2 million. The assumptions used to estimate local sales taxes follow. GENERAL FUNDS Total Revenues – $1,021.5 Million Local Sales Tax 43.4% Local Sales Tax The city of Phoenix’s local sales tax consists of 15 general categories that are collected based on a percentage of business income accruing in each category. To protect local businesses, Phoenix also levies a use tax on purchases where no sales taxes were paid. Finally, two additional local taxes are collected based on water service accounts. Of the 15 categories collected as a percentage of income, all except advertising provide General Fund resources. All but advertising contribute voter-approved resources for police and fire, parks and preserves, and transit programs. Portions of several categories and the entire advertising category are restricted to the Convention Center fund and/or the Sports Facilities fund. Beginning in May 2005, utilities sales tax collections were directed to the newly established Public Safety Enhancement fund. Finally, an additional 2 percent tax on the telecommunications category provides resources for the Capital Construction fund. The table below provides a listing of the local sales tax categories, indicating the specific tax rates for each fund and the total tax rate for each category. The General Fund portion of the local sales tax estimate is $442,886,000 for 2006-07. This is an increase of $37,736,000 or 9.3 percent from the 2005-06 estimate of $405,150,000. The increase in local sales tax revenue is based on estimated growth of 9.1 percent in the retail sales category, and reflects continued consumer confidence spurring spending. Projected increases in other categories include 12.7 percent for utility and franchise which CURRENT LOCAL SALES TAX RATES BY CATEGORY General Fund Advertising Contracting Job Printing Publishing Transportation/Towing Restaurants /Bars Leases/Rentals/Personal Property Short-Term Motor Vehicle Rental Commercial Rentals Lodging Rentals Under 30 Days Lodging Rentals 30 Days and Over Retail Amusements Utilities Telecommunications Neighborhood Public Safety Protection Enhancement _ _ 0.7% 0.7% 0.7% 0.7% 0.7% 1.2% 1.2% 1.3% 1.2% 1.2% 1.2% 1.2% 2.7% * 2.7% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 2.0%** _ Parks & Preserves Transit 2000 Convention Center Sports Facilities Capital Construction _ _ 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% _ _ 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% _ _ 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% _ _ _ _ _ _ _ _ _ _ 2.0% _ 2.0% _ _ _ _ _ 1.0% _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ * The General fund portion of the utilities category includes the 2.0% franchise fee paid by utilities with a franchise agreement. ** The Public Safety Enhancement designated 2.0% sales tax applies only to those utilities with a franchise agreement. 58 2.0% Total 0.5% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 3.8% 1.9% 4.8% 1.8% 1.8% 1.8% 4.7% 4.7% takes into account moderate rate increases for APS; 9.5 percent for commercial rentals; 9.3 percent for restaurants and bars; and 9.2 percent for hotel/motel room rentals. As shown in the pie chart to the right, the retail category represents approximately 43 percent of the General Fund sales tax. Personal income growth, which is used as a trend indicator for retail sales activity, is projected at 8.1 percent for 2006-07. Overall, sales tax growth tends to follow a growth pattern similar to personal income growth. General Fund sales tax revenue is collected on three rental categories: leases and rentals of personal property, commercial real property rentals and apartment rentals. For 2006-07, these categories are expected to increase 6.9 percent, 9.5 percent and 8.9 percent respectively. These three categories combined are approximately 17 percent of General Fund sales tax revenue. The contracting category is expected to increase by 16.3 percent. The city has experienced tremendous growth rates in this category over the past several years, led by booming residential and commercial construction. The expected 2005-06 growth is 30.9 percent. For 2006-07, indicators for job creation and population growth predict that residential construction activity will continue, but at a slightly slower rate. This slowing, however, will be offset by significant commercial construction projects such as the Convention Center expansion, the downtown hotel and light rail. This category represents approximately 9 percent of the General Fund sales tax revenue. The restaurants and bars category is expected to increase 9.3 percent and the hotel/motel category is expected to increase 9.2 percent in 2006-07. These two categories, combined with revenue from short-term motor vehicle rentals, are closely related to tourism activity and continue to benefit from the rebounding tourism industry. The expected growth rate for these categories for 2005-06 are GENERAL FUNDS Local Sales Taxes Various Leases and Rentals 17% Retail 43% Tourism-related 7% Contracting 9% 10.2 percent and 11.9 percent respectively. Revenues from these tourism-related activities represent approximately 7 percent of General Fund sales tax revenue. The utility tax category is approximately 20 percent of General Fund sales tax revenue. The category includes electricity, natural and artificial gas, water consumption, sewer service and communications activities. The 2006-07 estimate for utility sales and franchise tax revenue is $84,679,000, which is an increase of 10.1 percent over the 2005-06 estimate. The increase is largely due to recent and expected future rate increases for APS, water and wastewater. A use tax is assessed on the purchase of tangible personal property, which is stored, used or consumed within the city, and for which a local sales tax has not been paid at an equivalent rate to the city of Phoenix rate. The tax also applies to items purchased for resale and subsequently used or consumed in the business. The 2006-07 estimate of $14,904,000 for use tax is 5.2 percent or $737,000 more than the 2005-06 estimate. This category is subject to variation in purchasing practices, as well as economic drivers. The use tax category is approximately 4 percent of General Fund sales tax revenue. The following table shows General Fund sales tax collections since 2001-03. The amounts shown exclude the two utility Other 4% Utility & Franchise 20% tax items that are collected based on water service accounts. A portion of the utility sales tax is based on water service accounts. The first was implemented on Oct. 1, 1990. The 2006-07 estimate of $6,493,000 for this category is 2.5 percent higher than the 2005-06 estimate of $6,335,000. The second provides funding for storm water management programs required by the Environmental Protection Agency. The 2006-07 estimate of $1,295,000 for this tax is 2.2 percent greater than the 2005-06 estimate of $1,264,000. This increase provides for modest growth in accounts. GENERAL FUND SALES TAXES (In Thousands of Dollars) Fiscal Year Revenues % Change From Previous Year 2001-03 $307,699 2002-04 325,547 5.8 2003-05 349,120 7.2 2004-06 (Est.) 395,028 13.1 2005-07 (Est.) 432,571 9.5 0.0% 59 Privilege License Fees The city charges a $16 fee to process an application for a privilege tax license and assesses a $50 annual fee for existing licenses. These fees are intended to recover the costs associated with administering a fair and efficient sales tax system. This category also includes a $50 annual fee on each apartment complex for non-transient lodging. The 2006-07 estimate for privilege license fee revenue of $2,350,000 represents no change from the 2005-06 estimate. Historically, the net change in the number of licensed businesses is small. GENERAL FUNDS Total Revenues – $1,021.5 Million State-Shared Revenue 36.4% STATE-SHARED REVENUES State Sales Tax This major revenue category consists of the city’s share of the state sales tax, the state income tax and vehicle license tax. The 2006-07 estimate for this category is $371.5 million, which is $31.9 million or 9.4 percent more than the 2005-06 estimate of $339.6 million. State-shared revenue in 2006-07 is greatly impacted by the 2005 census. The state shares a portion of its revenue with cities based on their population’s proportion to the rest of the state. As other cities statewide grow at a faster pace, Phoenix will lose a portion of its state-shared revenue. The overall loss is estimated to be $19.1 million. State sales tax is expected to grow at 10.3 percent in 2006-07; however, after considering the impact of the census, the city’s share will grow at just 2.9 percent. The increase in the income tax collections reflects personal and corporate income growth in 2004-05. Income tax collections grew at 29.6 percent, however, after considering the impact of the census, the city’s share will grow at 20.3 percent. State-shared vehicle license tax revenue for 2006-07 is estimated to decline 0.3 percent below the 2005-06 estimate. The state sales tax rate on most taxable activities is 5.6 percent with several relatively minor categories having tax rates ranging from 2.5 percent to 5.5 percent. The revenues are split between a “distribution base,” of which Phoenix receives a share, and a “combined non-shared” category, which is allocated entirely to the state. With exceptions for some categories, the distribution base consists of 40 percent of collections. The 0.6 percent education tax included in the total tax rate is not included in any distribution base. Under the current formula, incorporated cities receive 25 percent of the distribution base. These funds are distributed to individual cities on the basis of relative population percentages. Using the 2005 preliminary census, Phoenix’s share of the distribution to cities for 2006-07 is estimated at 30.2 percent, a decrease from the current 32.5 percent based on the 2000 census. The city’s share of the state sales tax for 2006-07 is expected to be $144,557,000, which is $4,037,000 or 2.9 percent more than the 2005-06 estimate of $140,520,000. The actual growth rate estimated for state sales tax, exclusive of the census impact, ________________________________________________________________________ STATE SALES TAXES (In Thousands of Dollars) ________________________________________________________________________ Cities’ Share of State Collections Phoenix’s Share __________________ ______________________________ Fiscal Year Total % Change Percent Amount % Change ________________________________________________________________________ 2002-03 2003-04 2004-05 2005-06 (Est.) 2006-07 (Est.) 316,406 340,536 376,213 430,832 475,038 1.3 7.6 10.5 14.5 10.3 32.7 32.6* 32.5* 32.5 30.2** 103,409 111,594 123,788 140,520 144,557 1.2) 7.9 10.9 3.5 2.9 *The adjustment to the percentage is due to a correction made to the 2000 Census population amount of another Arizona city. **Impact of 2000 census population changes. ________________________________________________________________________ 60 is 10.3 percent. This estimate is based on the assumption that, similar to the local economy, the state economy will continue to show strong growth but at a moderated pace. At the state level, retail sales are anticipated to increase about 9.5 percent over the current fiscal year. The table to the left shows the cities’ share of state sales taxes, Phoenix’s allocation and annual increases since 2002-03. The population factor changes with decade or mid-decade census counts and periodic adjustments made throughout the year. State Income Tax Beginning in 1973, cities in Arizona shared 15 percent of the actual state personal and corporate income tax collected two years earlier. Individual cities received their portion based on the cities’ share of the state population. In 1990, legislation lowered the cities’ share of the state income tax to 12.8 percent beginning in the 1992-93 fiscal year. Then in 1994, legislation raised the percentage to 13.6 percent beginning in 1996-97, and 1996 legislation raised the percentage back to 15 percent for the 1997-98 and 1998-99 fiscal years. Legislation in 1997 provided for a 15.8 percent share for the 1999-2000 fiscal year. In the 1999 legislative session, the formula was again reduced to a 15 percent share beginning in 2000-01. Until the 1999 legislative action, these changes were enacted by the state in conjunction with revisions to the individual and corporate state income tax in order to keep the cities’ share of rate and other changes revenue-neutral. The 1999 change did not hold cities harmless. Legislation in 2002 reduced the formula to a 14.8 percent share for 2002-03 and 2003-04 only, as part of the effort to reduce the anticipated shortfall in the state budget. The formula reverted to a 15 percent share in 2004-05. The 2006-07 estimate is based on a 15 percent share. The portion of the state income tax, which will be distributed to cities and towns in 2006-07, is expected to be $551.3 million. The distribution represents actual individual and corporate income tax collections by the state in the 2004-05 fiscal year. The anticipated $551.3 million is a 29.6 percent increase from the previous fiscal year. The large increase is a result of rapid growth in personal income and corporate profits. Personal income tax payments grew by 28.9 percent and corporate income tax payments grew by 42.1 percent. The city of Phoenix’s portion of the state income tax is estimated to be approximately 30.2 percent of the 15 percent share distributed to cities. This equates to $166,390,000 for 2006-07 and is an increase of $28,077,000 or 20.3 percent from the 2005-06 estimate of $138,313,000. The table below shows the total cities’ share of state income tax, Phoenix’s share, percentage allocation and annual increase since 2002-03. Similar to sales tax sharing, population is changed only on the basis of a census count with periodic corrections made throughout the year. Vehicle License Tax Vehicle license taxes have been shared with Arizona cities and towns since 1941. The tax is assessed on the basis of an ad valorem rate on each $100 in value. The value is equal to a percent of the manufacturer‘s base retail price at the STATE INCOME TAX (In Thousands of Dollars) % Shared w/Cities Fiscal Year 2002-06 2003-04 2004-05 2005-06 (Est.) 2006-07 (Est.) 14.8% 14.8 15.0 15.0 15.0 Cities’ Share of State Collections Phoenix’s Share Total % Change Percent Amount % Change $429,988 365,842 372,973 425,395 551,325 2.0% (14.9) 1.9 14.1 29.6 32.7% 32.6* 32.5** 32.5 30.2** $140,600 119,118 121,440 138,313 166,390 2.0% (15.3) 1.9 14.0 20.3 *The adjustment to the percentage is due to a correction made to the 2000 Census population amount of another Arizona city. **Impact of 2000 census population changes. ________________________________________________________________________ VEHICLE LICENSE TAX (In Thousands of Dollars) ________________________________________________________________________ Amount Distributed by Phoenix’s Share Increase/(Decrease) Maricopa County Percent Amount Amount Percent Fiscal Year ________________________________________________________________________ 2002-03 2003-04 2004-05 2005-06(Est.) 2006-07 (Est.) $103,596 116,050 122,619 131,754 139,395 46.1% 46.1 46.1 46.1 43.0 $47,758 53,522 56,552 60,765 60,584 $1,915) 5,764) 3,030) 4,213) (181) 4.2% 12.1 5.7 7.4 (0.3) 61 time of initial registration. During each succeeding year, this value is decreased until the established minimum amount is reached. The Arizona Department of Transportation collects and distributes the tax. Currently, 37.61 percent of collections are allocated to the Arizona Highway Users Revenue fund. The remainder is allocated by percentage to various state funds as well as to the counties and cities. The state is responsible for distributing funds to cities according to their relative population within the county. Based on the preliminary 2005 census, Phoenix’s percentage of population within Maricopa County is approximately 43.0 percent, down from 46.1 percent based on the 2000 census. Phoenix’s share of the vehicle license tax for 2006-07 is anticipated to be $60,584,000, which is $181,000 or 0.3 percent below the 2005-06 estimate of $60,765,000. The loss in 2006-07 is due to the impact of the census. Exclusive of the census, vehicle license tax collections are expected to produce moderate growth. The table on page 61 shows the cities’ share of the vehicle license tax, Phoenix’s share, allocation percentage and annual percentage change since 2002-03. PRIMARY PROPERTY TAX Arizona property taxes are divided into two levies. The primary levy is used for general operation and maintenance expense. The secondary levy can only be used for general obligation debt service. The annual increase in the primary property tax levy is limited by the Arizona Constitution to a 2 percent increase over the calculated levy associated with previously assessed property plus an estimated levy for previously unassessed property (primarily new construction). Before 1996-97, the maximum levy allowed by the Arizona Constitution had been levied each year. Leading up 62 GENERAL FUNDS Total Revenues – $1,021.5 Million Primary Property Tax 9.3% ________________________________________________________________________ PRIMARY PROPERTY TAX ________________________________________________________________________ Primary Assessed Rate per Valuation % Primary Levy % $100 Assessed Fiscal Year (in Billions) Change (in Thousands) Change Valuation ________________________________________________________________________ 2002-03 2003-04 2004-05 2005-06 (Est.) 2006-07 (Est.) $ 8,269 9,049 9,800 10,637 11,431 7.5% 9.4) 8.3) 8.5) 7.5) $ 65,107 76,392 83,304 91,311* 96,622* 5.3% 17.3 9.0 9.6 5.8 $.80 .85 .85 .86 .85 *In 2005-06 the maximum primary property tax amount allowed by the Arizona constitution was levied. ________________________________________________________________________ Primary Property Tax Rate (combined rate each year is $1.82) $1.00 0.91 0.87 0.86 0.82 0.80 0.85 0.85 0.86 0.85 2004-05 2005-06 2006-07 $0.75 $0.50 $0.25 $0.00 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 Fiscal Year to 1996-97, due to a number of years of declining assessed valuations, deferral of the property tax-supported Capital Improvement Program was necessary. A new revenue policy also was established. This policy called for a maximum and minimum allowable combined primary and secondary property tax rate. By 1996-97, the application of this revenue policy had driven the combined rate down to the adopted minimum of $1.82. In 1997-98, a new policy was adopted that provided for the primary levy to be set at the previous year’s levy plus an amount for new construction. Market updates in property values were only to be reflected in the secondary portion, which is discussed in a later section. As shown in the above chart, this policy caused the primary rate to decline over time. Then, the 2001 Bond Committee recommended that a total of $10,000,000 be “shifted” to the primary property tax levy from the secondary property tax levy over a two-year period. This was accomplished as planned and in 2005-06 the maximum amount allowed by the Arizona Constitution was levied. The estimated 2006-07 primary property tax levy is $96,622,000, which is the maximum allowed by the Arizona Constitution. This is a 5.8 percent increase over the 2005-06 levy of $91,311,000. The change in the primary levy reflects an estimated $3,485,000 increase for collections associated with new properties entering the rolls, plus $1,826,000 for the state Constitution allowed 2 percent increase associated with previously assessed property. The primary assessed valuation of $11.43 billion is approximately 7.5 percent above the 2005-06 primary assessed valuation of $10.64 billion. Historically, actual property tax collections are slightly lower than the amount levied. For 2006-07, actual collections for primary property tax are estimated to be $95,660,000 or 99 percent of the levy amount. The 2006-07 levy results in an estimated primary property tax rate of $0.8453 per $100 of assessed valuation. This would result in a secondary property tax rate of $0.9747 to maintain a total property tax rate of $1.82 per $100 of assessed valuation. The table on page 62 shows primary assessed valuation, primary property tax revenues and primary rates since 2002-03. 63 USER FEES/OTHER REVENUES This major revenue category consists of licenses and permits, fines and forfeitures, cable television fees, parks and libraries fees, various user fees designed to recover the costs of providing specific city services, and other miscellaneous General Fund revenue sources. The 2006-07 estimate for this category is $111.4 million, which is $8.2 million or 7.9 percent higher than the 2005-06 estimate of $103.2 million. Following are descriptions of the various categories and explanations of the revenue estimates. GENERAL FUNDS Total Revenues – $1,021.1 Million User Fees and Other Revenues 10.9% Licenses and Permits This category consists of various business permit application fees and annual permit fees including liquor license applications, amusement machines, annual liquor licenses and other business license applications and fees. The 2006-07 estimate of $2,533,000 is 1 percent higher than the 2005-06 estimate, given the historically slow growth in this category. Cable Communications The city imposes a 5 percent fee on the gross receipts of cable television licensees in return for the use of streets and public rights of way by cable companies in the provision of cable television service. The 2006-07 estimate of $8,475,000 is $256,000 or 0.1 percent greater than the 2005-06 estimate of $8,464,000. The increase assumes conservative growth in the customer base and no cable rate increases. The increase also accounts for deductions for credits due to cable providers. 64 Fines and Forfeitures Court Default Fee This category is comprised of various sanctions including traffic moving violations, criminal offense fines, parking violations, driving under the influence and defensive driving program revenues. The 2006-07 estimate of $23,110,000 is $1,624,000 or 7.6 percent more than the 2005-06 estimate of $21,486,000. The estimate reflects increases in moving violations and criminal offense fines. The city’s recent participation in the Arizona State Court enhanced collection efforts, including withholding vehicle registrations until delinquent fines are paid and the mid-year addition of collections staff, is also expected to contribute to increased revenues. A $25 default fee was implemented in 1993-94 in order to recover court costs associated with defendants who fail to appear for court appearances or fail to pay previously imposed sanctions on civil traffic violations. The 2006-07 estimate for this revenue category is $1,121,000, which is 7.8 percent higher than the 2005-06 estimate. The estimate is based on year-to-date actuals and historical growth patterns. Engineering and Architectural Services This user fee category includes permits for utility construction and fiber optic construction in the public rights of way. It also includes revenues from fees for pavement cut activity. The 2006-07 estimate of $2,514,000 is $1,392,000 or 124.1 percent more than the 2005-06 estimate of $1,122,000. A majority of the 2006-07 increase is due to the effects of a large write-off of bad debts in 2005-06. Fire Library Fees Street Transportation The Fire Department receives fees from various services. The majority of the revenue comes from emergency transportation service (ETS). This user fee includes basic life support and advanced life support services and related charges for mileage and supplies for the provision of ambulance service. The 2006-07 estimate for ETS is $25,032,000, which is $899,000 or 3.7 percent greater than the 2005-06 estimate of $24,133,000. The moderate increase includes rate increases approved by the Arizona Department of Health Services. Other Fire revenue sources include fire prevention inspection fees, computer-aided dispatch (CAD) and various other services provided to the community. The 2006-07 estimate for other fire services is $6,003,000 which is 33.7 percent above 2005-06. Library fee and fine revenue for 2006-07 is expected to be $1,718,000, which is $135,000 or 8.5 percent above the 2005-06 estimate. The increase is due to increased library fine collections. Collection fine trends indicate consistent growth with additional fine revenue coming from the new Cesar Chavez library opening in July 2006. This user fee category includes permit fees for utility construction in the public rights-of-way as well as utility ordinance inspections. The 2006-07 estimate of $2,247,000 is just slightly more than the 2005-06 estimate of $2,240,000. Hazardous Materials Permit and Inspection Fee Because incidents involving hazardous materials have increased in recent years, a hazardous materials permit and inspection fee was established in October 2001. Revenues from this category are used to recover direct costs incurred for inspecting businesses that use hazardous materials. Upon review in 2003-04, the annual permit fee amount was raised. This annual permit now varies from $400 to $1,650 and depends on the volume of hazardous materials stored on site. The 2006-07 estimate is $1,325,000, which is the same as 2005-06 estimate. Revenues in this category have been historically consistent. Parks and Recreation Fees This category includes parks concession revenues, swimming pool revenues, fees for the use of various park facilities such as ball fields and recreation programs, activities at Municipal Stadium, Maryvale Stadium and the Papago Baseball Facility, and other miscellaneous park fees. The 2006-07 estimate of $5,151,000 is $169,000 or 3.2 percent below the 2005-06 estimate. The decrease in 2006-07 is due to a change in accounting methods used for the Municipal Stadium concessions. Planning User fees in this category include rezoning fees and zoning adjustment fees for use permits and variances. The 2006-07 estimate of $1,558,000 is $43,000 or 2.8 percent more than the 2005-06 estimate of $1,515,000, reflecting growth in rezoning fees. Other Service Charges Revenue in this category is composed of several non-tax sources including interest income, parking meter revenue, the Downtown Enhancement District, in-lieu property taxes, sales of surplus and abandoned property, various rental, parking and concession categories. The 2006-07 estimate of $17,116,000 is $2,128,000 or 14.2 percent more than the 2005-06 estimate of $14,988,000. This is primarily due to increased interest earnings. All Other Fees This fee category consists of miscellaneous service charges in the Finance, Housing, Human Services and Neighborhood Services departments and miscellaneous categories. The 2006-07 estimate of $1,713,000 is $417,000 or 32.2 percent greater than the 2005-06 estimate of $1,296,000. Police The Police Department receives revenues for various services and programs. Police services are provided on a fee-per-hour basis for school and athletic events as well as other activities where a law enforcement presence is desired. In addition, a false alarm program includes both permit fees and assessments for false alarm responses. For 2006-07, the estimate of $11,822,000 is 0.1 percent more than the 2005-06 estimate of $11,700,000. 65 NON-GENERAL FUNDS Non-General Fund revenues consist of two major categories: special revenue and enterprise funds. The following sections provide descriptions of the various revenue sources in each category and explanations of 2006-07 revenue estimates. The table on the next page provides the 2005-06 and 2006-07 estimates and 2004-05 actual revenue amounts for revenues within these two categories. SPECIAL REVENUE FUNDS This category consists of several revenue sources that are earmarked for specific purposes. Included in this category are voter-approved sales taxes for Neighborhood Protection, Parks and Preserves, Transit 2000 and Public Safety Enhancement. Also included in this category are revenue from Court Awards, Development Services, Capital Construction, Sports Facilities, Arizona Highway User Revenue funds, Local Transportation Assistance funds, Public Transit, Community Reinvestment, Secondary Property Tax, grant funds and other revenues. Neighborhood Protection Sales Tax This 0.1 percent sales tax rate was approved by the voters in October 1993 and implemented in December 1993. As presented to the voters, the 0.1 percent increase is specifically earmarked for Police Neighborhood Protection programs (70 percent), Police Block Watch programs (5 percent) and Fire Neighborhood Protection programs (25 percent). The 2006-07 estimate of $32,294,000 is $2,921,000 or 9.9 percent greater than the 2005-06 estimate of $29,373,000. These estimates are consistent with those for the same categories in the local sales tax discussion. Also, $181,000 is estimated in each year for interest revenue. 66 Public Safety Enhancement Sales Tax The Public Safety Enhancement sales tax was implemented on May 1, 2005, and is made up of the 2.0 percent increment of the 2.7 percent sales tax on utilities with franchise agreements. The fund is allocated between Police and Fire needs. The Police Public Safety Enhancement fund is allocated 62 percent of revenues and is dedicated to Police and Emergency Management needs. The Fire Public Safety Enhancement fund is allocated 38 percent of the revenues collected and is dedicated to Fire needs. The 2006-07 estimate of $21,679,000 is $2,099 or 10.7 percent greater than the 2005-06 estimate of $19,580,000. These estimates are consistent with the utilities sales tax forecast for the General Fund and include estimated rate increases for APS. Parks and Preserves Sales Tax The Parks and Preserves sales tax is a 0.1 percent sales tax rate increase approved by voters in September 1999 and implemented in November 1999. Revenues from the 0.1 percent tax are allocated to park improvements and acquisition of desert preserves. Sixty percent of the revenues are to be used for preservation, 30 percent for regional parks, and 10 percent for neighborhood and community parks. The 2006-07 estimate of $32,295,000 is $2,919,000 or 9.9 percent more than the 2005-06 estimate of $29,376,000. These estimates are consistent with the estimates for the same categories in the local sales tax discussion. Also, $600,000 is estimated for interest earnings in 2006-07. Transit 2000 Funds The Transit 2000 tax is a 0.4 percent sales tax approved by the voters in March 2000 and implemented in June 2000. The 0.4 percent tax is specifically earmarked for transit programs and improvements. The 2006-07 estimate of $129,179,000 is $11,676,000 or 9.9 percent greater than the 2005-06 estimate of $117,503,000. These estimates are consistent with the estimates for the same categories in the local sales tax discussion. Also included in this fund are fare box and other miscellaneous transit system revenues. Fare box revenues are the revenues collected by the transit service for bus ridership. The 2006-07 fare box revenue estimate of $24,891,000 is 1.2 percent greater than the 2005-06 estimate. The 2006-07 estimate also includes interest earnings of $5,911,000 which is a 15.0 percent increase above 2005-06. The increase in interest earnings is due to a larger than expected fund balance in the light rail fund in 2006-07. Court Awards Funds The city of Phoenix receives funds as a result of participation in the arrest and/or prosecution of certain criminal cases. These funds, referred to as Court Awards funds, represent court-ordered forfeitures of seized assets. Their use is limited to the police and prosecutor functions. Revenue estimates are based on cases in progress. The estimate for 2006-07 is $3,182,000. Development Services Revenues in this user fee category include building permits and plans review, subdivision and site plan fees, sign permit fees and engineering permits and plan review fees. These fees are used to fully support the activities of the Development Services Department. The 2006-07 estimate is $60,241,000, which is $2,980,000 or 5.2 percent more than the 2005-06 estimate of $57,261,000. The growth in the residential and commercial sector is driving increases in the revenue for 2006-07. The increased revenue is primarily associated with increases in permits and plan review associated with this growth. NON-GENERAL FUND REVENUES BY MAJOR SOURCE (In Thousands of Dollars) Revenue Source 2004-05 Actual 2005-06 Estimate Increase/(Decrease) from 2005-06 Est. Amount Percent 2006-07 Budget Special Revenue Funds Neighborhood Protection Public Safety Enhancement Parks and Preserves Transit 2000 Court Awards Development Services Capital Construction Sports Facilities Arizona Highway User Revenue Local Transportation Assistance Regional Transit Revenues Community Reinvestment Secondary Property Tax Impact Fee Program Administration Court Special Fees Monopole Rental Tennis Center Heritage Square Affordable Housing Program Other Restricted (gifts/trusts) Grants Public Housing Grants Human Services Grants Community Development Criminal Justice Public Transit Grants HOPE VI Grant Other Grants $ 25,481 3,136 26,703 136,211 3,318 52,450 18,437 13,993 120,038 7,136 8,348 2,036 101,466 3,383 1,663 138 22 17 1,523 )5115,626 $ 29,554 19,580 30,976 149,847 3,622 57,261 20,435 15,457 123,275 7,035 22,432 2,151 110,461 2,860 1,747 133 16 20 1,576 9,575 $ 32,475 21,679 32,895 162,407 3,182 60,241 21,561 16,664 120,373 6,966 35,792 2,156 120,209 2,460 1,811 133 16 20 1,559 9,580 $ 2,921 2,099 1,919 12,560 (440) 2,980 1,126 1,207 (2,902) (69) 13,360 5 9,748 (400) 64 _ _ _ (17) 5 9.9% 10.7 6.2 8.4 -12.1 5.2 5.5 7.8 -2.4 -1.0 59.6 0.2 8.8 -14.0 3.7 0.0 0.0 0.0 -1.1 0.1 69,947 47,884 21,284 17,363 6,704 8,123 15,292 75,833 44,527 18,564 15,217 7,117 14,345 19,283 74,068 32,839 34,529 17,949 6,982 5,956 24,106 (1,765) (11,688) 15,965 2,732 (135) (8,389) 4,823 -2.3 -26.2 86.0 18.0) -1.9 -58.5 25.0 $ 186,597 $ 194,886 $ 196,429 $1,543) 0.8% $ 727,722 $ 802,899 $ 848,608 45,709) 5.7% Aviation Water System Wastewater System Solid Waste Convention Center Golf Courses 228,947 252,643 159,069 108,525 57,415 5,833 244,372 285,265 170,791 114,307 65,993 7,567 266,987 296,518 180,099 116,461 73,126 9,081 22,615) 11,253) 9,308) 2,154) 7,133) 1,514) Total Enterprise Funds $ 812,432 $ 888,295 $ 942,272 $ 53,977) 6.1% TOTAL NON-GENERAL FUND REVENUE $1,540,154 $1,691,194 $1,790,880 $ 99,686) 5.9% Subtotal - Grants Total Special Revenue Funds $ Enterprise Funds 9.3 3.9 5.4 1.9 10.8 20.0 67 Capital Construction This category includes revenue from a 2 percent increase in the sales tax on telecommunications implemented in February 1998. This tax is intended to reimburse Phoenix residents for the use of their public rights-of-way by the telecommunications industry. The 2006-07 estimate is $20,811,000, or a 5.5 percent increase over the 2005-06 estimate. These funds are used primarily for right-of-way improvements in the Street Transportation Capital Improvement Program. The 2006-07 estimate also includes interest earnings, for which, $700,000 is estimated in 2005-06 and $750,000 is estimated in 2006-07. Sports Facilities Sports facilities revenues consist of a 1 percent portion of the 4.8 percent hotel/motel tax category, a 2 percent tax on short-term motor vehicle rentals, and interest revenue generated by the fund. The 2006-07 estimate is $16,164,000, which is $1,232,000 or 8.3 percent more than the 2005-06 estimate of $14,932,000. The revenue estimates are consistent with the General Fund sales tax estimates in the hotel/motel and short-term vehicle rental categories. The 2006-07 estimate includes $7.4 million for the hotel/motel portion and $8.2 million for the short-term car rental portion. Also, $500,000 is estimated in 2006-07 for interest revenue. Arizona Highway User Revenue The State Transportation Financing Plan adopted by the Legislature in 1981 and amended in 1982 and 1985 includes a 13 cent per gallon gas tax plus other user fees and charges such as registrations, driver’s licenses, motor carrier taxes, other miscellaneous fees and an increased share of the motor vehicle license taxes. Additional gasoline taxes were added in 1986 (3 cents per gallon), in 1988 (1 cent per gallon), and in 1990 (1 cent 68 ARIZONA HIGHWAY USER REVENUES (In Thousands of Dollars) Increase/(Decrease) Amount Percent Fiscal Year AHUR Distribution 2002-03 $104,596 $4,190) 2003-04 111,757 7,161 2004-05 117,464 5,707 5.1 2005-06 (Est.) 121,775 4,311) 3.7 2006-07 (Est.) 119,623 * (2,152)) (1.8) 4.2% 6.9 *2000 Census adjustment to population is reflected. per gallon) for a total local gas tax rate of 18 cents per gallon. A new distribution formula for Arizona Highway User Revenue (AHUR) was passed by the Legislature and signed by the governor in May 1996 (effective July 1, 1996). It was intended to be revenue neutral to cities. This distribution formula provides 27.5 percent to incorporated cities and towns (distributed one-half on the relative population of the cities and towns and one-half on the county origin of sales/relative population of the counties) and 3 percent to cities over 300,000 population (Phoenix, Tucson and Mesa). For 2006-07, it is anticipated that Phoenix will receive $98.5 million from the 27.5 percent share and $23.2 million from the 3 percent share. The total 2006-07 AHUR estimate of $120,373,000 is $2,902,000 or 2.4 percent below the 2005-06 estimate of $123,275,000. Included in the estimate is interest earnings of $1,500,000 in 2005-06 and $750,000 in 2006-07. The state-shared increase is based on anticipated increases at the state level of 3.9 percent in gasoline tax collections, 4.1 percent in motor carrier tax collections (trucking), 4.0 percent in vehicle license tax collections and 4.1 percent in vehicle registrations offset by an adjustment to Phoenix’s share for anticipated census reductions. The table above shows the state-shared Arizona Highway Users allocations to the city of Phoenix since 2002-03. Local Transportation Assistance (LTA) Funds In July 1981, the Legislature passed a transportation bill that provided for a Local Transportation Assistance fund. Beginning July 1, 1983, $20.5 million (minimum) to $23 million (maximum) annually from the sale of state lottery tickets is allocated to the Local Transportation Assistance (LTA) fund. LTA funds are distributed to incorporated cities in proportion to annual population estimates developed by the Department of Economic Security. For cities that exceed 300,000 in population, LTA funds are to be used for mass transit operating expenses. The law also provides for up to 10 percent of the city’s LTA funds to be used for cultural, educational, historical, recreational or scientific projects and outpatient developmental disability programs. LTA funds used for these non-transit purposes must be matched on a 50/50 basis with non-public funds and the total LTA funds must reach the $23 million maximum for this type of expenditure to be made. The 2006-07 estimate for LTA revenue is $7.0 million which assumes the $23 million maximum is reached. Using the 2005 preliminary census, the city is expected to receive 30 percent of the total LTA funds distributed statewide. The allocation is primarily used for funding the transit system consistent with LTA fund provisions and past practices, $106,000 is estimated for arts grants. ________________________________________________________________________ SECONDARY PROPERTY TAX ________________________________________________________________________ Regional Transit Revenues Secondary Assessed Rate per Valuation Secondary Levy $100 Assessed Fiscal Year (in Billions) % Change (in Thousands) % Change Valuation ________________________________________________________________________ This category includes revenue from the Regional Public Transportation Authority (RPTA) for the regional transportation plan, other state funding agencies, and the sale of bus service provided to other jurisdictions. The 2006-07 estimate of $35,792,000 is $13,360,000 or 59.6 percent above the 2005-06 estimate of $22,432,000. The increase is due to funds received from RPTA for the Regional Transportation Plan. The plan is funded by the Maricopa County transportation tax that was extended for 20 more years by Proposition 200. The funds in 2006-07 will be used for new bus purchases. Community Reinvestment The 2006-07 estimate of $2,156,000 represents estimated redevelopment revenues to be received through various economic redevelopment agreements. Redevelopment areas include Sky Harbor Center and the downtown area. Secondary Property Tax By law, the secondary property tax is earmarked for servicing general obligation bond principal and interest costs. There is no statutory limitation on the property taxes levied for debt service purposes. As discussed in the General Fund revenues section, the estimated primary property tax rate is $0.8453. To maintain our current $1.82 total rate, the resulting secondary rate is $0.9747 per $100 of assessed value for 2006-07. The 2006-07 secondary property tax levy of $119,509,000 is based on this projected rate and secondary assessed valuation of $12.26 billion. This levy is $9,698,000 or 8.8 percent greater than the 2005-06 levy of $109,811,000. The increase is primarily because of a 7.4 percent increase in net assessed property values for Phoenix plus a slight increase in the secondary rate. Also included in the 2006-07 estimate is 2002-03 2003-04 2004-05 2005-06 (Est.) 2006-07 (Est.) $ 8,803 9,792 10,490 11,420 12,261 6.9% 11.2% 7.1% 8.9% 7.4% $700,000 in interest earnings, a 7.7 percent increase above 2005-06. The total property tax rate of $1.82 for 2006-07 has remained unchanged since 1995-96. The table above shows secondary assessed valuation, secondary property tax levies and secondary property tax rates since 2002-03. Impact Fee Program Administration In 1987, the City Council established an Impact Fee Program. Impact fees are charged in addition to building permit fees to new development in the city’s peripheral planning areas. Impact fees assess new development for its proportionate costs of public infrastructure that will be required due to the development. In conjunction with the impact fee program, an administrative fee of three percent of the impact fee amount is also charged. This administrative fee pays for the costs of administering the overall impact fee program. Beginning in 2004-05, the revenue from the administrative fee and the related costs were significant enough to require separate accounting. The 2005-06 and 2006-07 revenue estimates are $2,860,000 and $2,460,000 respectively. Since administrative fee revenue is related to development activity, this revenue source can be volatile. With a slight decline projected in growth for the new development areas, administrative fee $ 89,948 94,984 101,756 109,811 119,509 8.8% 5.6% 7.1% 7.9% 8.8% $1.00 0.97 0.97 0.96 0.97 revenue is expected to decrease by $400,000 in 2006-07. Other Restricted Fees Included in this category are revenues associated with the Court Technology Enhancement fee and the Judicial Collection Enhancement fund, Heritage Square, the Tennis Center at Washington Park, Affordable Housing Program revenues and monopole rentals from several city parks. Also included is revenue from restricted fees for recreation and other programs, and donations specified for various city programs. The 2006-07 estimate of $13,119,000 is $53,000 above the 2005-06 estimate of $13,066,000. The 2006-07 estimate includes expected donations of $3.5 million for the Children’s Museum. Public Housing Grants The 2006-07 Assisted Housing grants revenue included in the annual operating budget is $74,068,000, which is a 2.3 percent decrease from 2005-06. This category includes the HOME program that is aimed at increasing the availability of affordable rental housing and expanding home ownership opportunities for first-time homebuyers. Other items in this category include housing subsidies, interest income and housing assistance payments. 69 Human Services Grants HOPE VI Grant Aviation The 2006-07 revenue estimate of $32,839,000 is $11,688,000 less than the 2005-06 estimate of $44,527,000. This category includes funds from the Department of Health and Human Services, Workforce Investment Act, Aging Program Grants and Head Start funds. In October 2001, the U.S. Department of Housing and Urban Development awarded $34 million in HOPE VI funding to the city for the revitalization of the Matthew Henson public housing development. The revenue estimate assumes that $5,956,000 of that grant will be earned and expended in 2006-07. Aviation revenue estimates include landing fees, concession revenues and interest income at Sky Harbor International, Deer Valley and Goodyear airports. Total Aviation revenue for 2006-07 is anticipated to be $266,987,000, which is $22,615,000 or 9.3 percent greater than the 2005-06 estimate of $244,372,000. The 2006-07 estimate anticipates conservative growth in airline fees, landing fees and concessions. The largest contributors to the growth in 2006-07 are increased parking revenues resulting from rate increases, increased concessions from the new rental car facility and a federal grant of $8.0 million for an explosive detection system. The first table on page 71 shows Aviation revenue by major category and annual percent change since 2002-03. Community Development Block Grant Each year since 1974, the city has received Community Development Block Grant funds from the U.S. Department of Housing and Urban Development. These funds are used to support a variety of projects and programs that must meet the following national objectives: benefit low- and moderate-income persons; aid in the prevention or elimination of slums and blight; or meet other urgent community development needs. The 2006-07 CDBG entitlement plus carryover amounts is $34,529,000. Criminal Justice Grants The 2006-07 grant revenue for criminal justice programs is estimated to be $17,949,000. This includes Police, Court and Law department grants. Grants include Universal Hiring grants totaling $3.7 million, $8.9 million in Police Department grants, and renewals of ongoing state grants. Public Transit Grants The 2006-07 Federal Transit Administration Grant estimate is $6,982,000 reflecting a decrease of $135,000 below the 2005-06 estimate of $7,117,000. 70 Other Grants The 2006-07 budget also includes $24,106,000 for federal, state and other grants that provide funding for some parks and recreation and library activities as well as unique programs such as urban area security. ENTERPRISE FUNDS This category includes revenues from the city’s six enterprise funds including Aviation, Water, Wastewater, Solid Waste, Convention Center and Golf. These enterprise funds fully recover their costs through user fees associated with the provision of their services. This category also includes the Convention Center that, in addition to the user fees associated with the operation of the Convention Center, is supported by earmarked sales taxes. Following are descriptions of each enterprise fund category and explanations of the revenue estimates. Water System Water system revenues include water sales, development fees, various water service fees, resource acquisition fees, fees paid by other jurisdictions for the operation of the Val Vista Water Treatment Plant and other miscellaneous fees. Total water system revenue for 2006-07 is projected to be $296,518,000, which is $11,253,000 or 3.9 percent more than the $285,265,000 estimate for 2005-06. The 2006-07 estimate reflects increases in metered water sales from modest account growth coupled with a drop in overall consumption per account. The estimate also takes into account rate increases for water sales and user fees. The second table on page 71 shows water system revenues by major category since 2002-03. Human Services Grants HOPE VI Grant Aviation The 2006-07 revenue estimate of $32,839,000 is $11,688,000 less than the 2005-06 estimate of $44,527,000. This category includes funds from the Department of Health and Human Services, Workforce Investment Act, Aging Program Grants and Head Start funds. In October 2001, the U.S. Department of Housing and Urban Development awarded $34 million in HOPE VI funding to the city for the revitalization of the Matthew Henson public housing development. The revenue estimate assumes that $5,956,000 of that grant will be earned and expended in 2006-07. Aviation revenue estimates include landing fees, concession revenues and interest income at Sky Harbor International, Deer Valley and Goodyear airports. Total Aviation revenue for 2006-07 is anticipated to be $266,987,000, which is $22,615,000 or 9.3 percent greater than the 2005-06 estimate of $244,372,000. The 2006-07 estimate anticipates conservative growth in airline fees, landing fees and concessions. The largest contributors to the growth in 2006-07 are increased parking revenues resulting from rate increases, increased concessions from the new rental car facility and a federal grant of $8.0 million for an explosive detection system. The first table on page 71 shows Aviation revenue by major category and annual percent change since 2002-03. Community Development Block Grant Each year since 1974, the city has received Community Development Block Grant funds from the U.S. Department of Housing and Urban Development. These funds are used to support a variety of projects and programs that must meet the following national objectives: benefit low- and moderate-income persons; aid in the prevention or elimination of slums and blight; or meet other urgent community development needs. The 2006-07 CDBG entitlement plus carryover amounts is $34,529,000. Criminal Justice Grants The 2006-07 grant revenue for criminal justice programs is estimated to be $17,949,000. This includes Police, Court and Law department grants. Grants include Universal Hiring grants totaling $3.7 million, $8.9 million in Police Department grants, and renewals of ongoing state grants. Public Transit Grants The 2006-07 Federal Transit Administration Grant estimate is $6,982,000 reflecting a decrease of $135,000 below the 2005-06 estimate of $7,117,000. 70 Other Grants The 2006-07 budget also includes $24,106,000 for federal, state and other grants that provide funding for some parks and recreation and library activities as well as unique programs such as urban area security. ENTERPRISE FUNDS This category includes revenues from the city’s six enterprise funds including Aviation, Water, Wastewater, Solid Waste, Convention Center and Golf. These enterprise funds fully recover their costs through user fees associated with the provision of their services. This category also includes the Convention Center that, in addition to the user fees associated with the operation of the Convention Center, is supported by earmarked sales taxes. Following are descriptions of each enterprise fund category and explanations of the revenue estimates. Water System Water system revenues include water sales, development fees, various water service fees, resource acquisition fees, fees paid by other jurisdictions for the operation of the Val Vista Water Treatment Plant and other miscellaneous fees. Total water system revenue for 2006-07 is projected to be $296,518,000, which is $11,253,000 or 3.9 percent more than the $285,265,000 estimate for 2005-06. The 2006-07 estimate reflects increases in metered water sales from modest account growth coupled with a drop in overall consumption per account. The estimate also takes into account rate increases for water sales and user fees. The second table on page 71 shows water system revenues by major category since 2002-03. SUMMARY OF AVIATION REVENUES (In Thousands of Dollars) 2002-03 2003-04 2004-05 2005-06 (Est.) 2006-07 (Est.) Airline Operation Concessions and Rentals Interest Other/Federal Grants Goodyear Deer Valley $ 76,223% 113,296% 5,854% 13,754% 1,813% 2,419% $ 78,910%) 120,032 % 6,758 9,668%) 1,773% 2,445% $ 84,039% 126,490%) 6,644%) 7,304 % 1,820%) 2,650%) $ 90,591 140,445% 6,125% 2,435 2,098% 2,678% $ 92,400 153,498% 6,225% 10,007 2,123% 2,734% Total Aviation Revenue $213,359% $219,586% $228,947%) $244,372% $266,987% Change From Prior Year 8.5% 2.9% 4.3%% 6.7% 9.3% SUMMARY OF WATER SYSTEM REVENUES (In Thousands of Dollars) 2002-03 2003-04 2004-05 2005-06 (Est.) Water Sales Environmental Consumption Charge Raw Water Charge Interest Development Fees Combined Service Fees Val Vista All Other $171,472% 11,658% 15,879% 10,316% 7,625% 1,542% 4,104% 27,725% $179,639% 15,956% 16,514% 8,571% 9,038% 1,740% 4,690% 13,898% $177,569% 19,350% 15,150% 6,074% 10,655% 2,108% 5,047% 16,690% $199,048% 26,452% 16,646% 10,790% 9,000% 3,829% 5,195% 14,305% $208,747% 31,227% 16,642% 9,205% 6,500% 4,479% 6,516% 13,202% Total Water Revenue $250,321% $250,046% $252,643 $285,265% $296,518% Change From Prior Year 6.0% (0.1%) 1.0% 12.9% 2006-07 (Est.) 3.9% 71 Wastewater System Solid Waste Wastewater system revenues include monthly sewer service charge revenues, which are based on water consumption rates, development fees, the sale of wastewater treatment services to other jurisdictions, the sale of effluent and other miscellaneous fees. The wastewater system is expected to generate revenue of $180,099,000 in 2006-07, which is $9,308,000 or 5.4 percent greater than the 2005-06 estimate of $170,791,000. The 2006-07 estimate is based on moderate account growth of 2 percent and the full year’s realization of the March 2006 rate increase on sewer services. The table below shows Wastewater revenue by major category and annual percent change since 2002-03. This category includes revenues from the monthly residential collection and landfill tipping fees. The 2006-07 estimate of $116,461,000 is an increase of $2,154,000 or 1.9 percent greater than the 2005-06 estimate of $114,307,000. The increase assumes a conservative growth in housing units of 1.6 percent. Convention Center The majority of Convention Center revenues are from earmarked sales taxes including a 0.5 percent tax on advertising, a 0.5 percent portion of the 1.8 percent tax on restaurant and bar sales, construction, publishing, printing, and transportation and towing, plus a 2 percent portion of the 4.8 percent hotel/motel tax on rooms rented for 30 days or less. Earmarked sales taxes are expected to produce $62,553,000 in 2006-07, an increase of 11.1 percent above 2005-06. Convention Center operating revenues are expected to be $5,465,000, parking revenue is expected to be $3,880,000, and interest revenue is expected to be $1,229,000, for total revenue estimates of $73,126,000. This is $7,133,000 or 10.8 percent more than the 2005-06 total estimated revenue of $65,993,000. The increase is primarily from increases in the earmarked sales tax categories. Tax estimates are consistent with General Fund sales tax estimates for the categories included in Convention Center. The table on page 73 shows the Convention Center excise tax collections since 2002-03. ____________________________________________________________________________________________________________ SUMMARY OF WASTEWATER SYSTEM REVENUES (In Thousands of Dollars) ____________________________________________________________________________________________________________ 2005-06 2006-07 2002-03 2003-04 2004-05 (Est.) (Est.) ____________________________________________________________________________________________________________ Sewer Service Charge $ 79,157% $ 88,461% $ 99,121% $109,730% $115,689% Environmental Charges 22,361% 22,862% 21,820% 24,255% 28,598% Development Fees 7,260% 8,487% 10,168% 8,500% 6,500% Interest 4,258% 3,909% 3,285% 6,955% 7,347% Multi-City 14,689% 17,118% 16,705% 16,629% 17,245% Other 5,009% 5,968% 7,971% 4,722% 4,720% Total Wastewater Revenue Change From Prior Year 72 $132,734% 5.3% $146,805% 10.6% $159,069% 8.4% $170,791% 7.4% $180,099% 5.4% Overall growth rates differ from General Fund sales taxes due to the smaller number of categories, differing proportions of the total and their more volatile nature. As shown in the pie chart on the right, contracting and tourism represent 91 percent of the sales tax revenue to this fund. Both industries are considered volatile; the tourism industry in particular has experienced dramatic changes in the last several years. In the General Fund, however, contracting and tourism represent only 16 percent of the sales tax revenue. Because of this, any changes to these more volatile industries have a greater impact in this fund’s sales tax revenue than in the General Fund’s sales tax revenue. The growth rates anticipated for 2005-06 and 2006-07 reflect the continued improvement in the tourism industry. They also assume continued growth in contracting, however, at a less strenuous pace than that experienced over the past few years. While growth in the housing market is expected to slow, additional revenue is anticipated from significant commercial construction projects such as the Convention Center expansion and light rail. CONVENTION CENTER SALES TAXES (In Thousands of Dollars) Increase/(Decrease) Amount Percent Fiscal Year Amount Collected 2002-03 $36,849 $ (432) 2003-04 40,322 3,473) (1.2)% 9.4 2004-05 48,003 7,681) 19.0) 2005-06 (Est.) 56,328 8,325) 17.3 2006-07 (Est.) 62,553 6,225) 11.1 2006-07 CONVENTION CENTER Earmarked Sales Taxes Tourism-related 47% Contracting 44% Other 9% Golf Courses Revenue sources in the Golf Course category are greens fees and concession sales at city golf courses which include Aguila, Cave Creek, Encanto, Maryvale, Palo Verde and Papago courses. The 2006-07 estimate of $9,081,000 is $1,514,000 or 20.0 percent above the 2005-06 estimate. This is due to an expected increase in total rounds of golf and the city’s assuming operations of three pro shops previously run by concessionaires. 73 n to n , ) G re g St a a y or d fr om le ft te ft ) V ic e M ea le (s es om d fr u g cl in in d l n so n ci n ta n h (s ic h a el Jo ix C it y C ou P eg gy B il st en , a n d M a tt ox , M e T h e P h oe n d d u n a la C on t, il G or d Si m p lo M a y or P h N ee ly, To m er, P eg gy gn in L g ou D Si eb er t. a n d D a ve 74 General Government MAYOR CITY COUNCIL CITY MANAGER Program Goal Program Goal Program Goal The Mayor is elected on a nonpartisan ballot to represent the entire city for a four-year term that expires in January 2008. The Mayor represents the city in all official capacities and provides leadership to the City Council, administrative staff and the community at large. The Mayor recommends policy direction for the city and chairs all City Council meetings. The City Council is composed of eight council members elected by districts on a nonpartisan ballot. Four-year terms for council members from odd-numbered districts expire in January 2008. Terms for council members from even-numbered districts expire in January 2010. The City Council serves as the legislative and policy-making body of the municipal government and has responsibilities for enacting city ordinances, appropriating funds to conduct city business and providing policy direction to the administrative staff. Under the provisions of the City Charter, the City Council appoints a city manager, who is responsible for carrying out its established policies and administering operations. The city manager provides professional administration of the policies and objectives established by the Mayor and City Council, develops alternative solutions to community problems for Mayor and City Council consideration and plans programs that meet the future public needs of the city. Budget Allowance Explanation The Mayor’s operating budget allowance of $2,579,000 is $150,000 or 6.2 percent more than 2005-06 estimated expenditures and reflects normal inflationary increases. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 21.0 21.0 Source of Funds: General Grants Other Restricted The City Manager’s operating budget allowance of $1,174,000 is $46,000 or 4.1 percent higher than the 2005-06 estimated expenditures. This increase reflects normal inflationary adjustments. Expenditure and Position Summary 2004-05 2006-07 $2,344,000 $2,429,000 $2,579,000 20.0 Budget Allowance Explanation $2,157,000 $2,252,000 $2,393,000 119,000 122,000 130,000 68,000 55,000 56,000 Budget Allowance Explanation Operating Expense The 2006-07 City Council operating budget allowance of $4,625,000 is $309,000 or 7.2 percent more than 2005-06 estimated expenditures. This increase reflects normal inflationary increases. Total Positions 2005-06 2006-07 $1,236,000 $1,128,000 $1,174,000 8.0 6.0 6.0 Source of Funds: General $1,236,000 $1,128,000 $1,174,000 Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $3,807,000 $4,316,000 $4,625,000 55.0 55.0 55.0 Source of Funds: General $3,807,000 $4,316,000 $4,625,000 75 DEPUTY CITY MANAGERS INTERGOVERNMENTAL PROGRAMS PUBLIC INFORMATION Program Goal Program Goal Program Goal The deputy city managers oversee and provide assistance to city departments to ensure achievement of their departmental objectives and the objectives of the city government as a whole. Intergovernmental Programs represents the city, as appropriate, in contacts with federal, state, regional, county and other city governments. Intergovernmental Programs also is charged with citywide grants coordination. The Public Information Office disseminates information on city governmental services to residents, and assists them in using and understanding the information. The office also encourages participation in city government, and develops programming for the government access cable television channel. Budget Allowance Explanation Budget Allowance Explanation The Deputy City Managers 2006-07 operating budget allowance of $2,020,000 is $252,000 or 14.3 percent more than 2005-06 estimated expenditures. The increase is the result of normal inflationary adjustments and a return to full staffing levels. The Intergovernmental Programs 2006-07 operating budget allowance of $1,398,000 is $176,000 or 14.4 percent more than 2005-06 estimated expenditures. This increase reflects funding for consulting services to meet increased workloads and normal inflationary increases. Budget Allowance Explanation The Public Information operating budget allowance of $3,688,000 is $496,000 or 15.5 percent more than 2005-06 estimated expenditures. The increase reflects the replacement of camera equipment for the Phoenix 11 government access cable Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 Water 2004-05 $1,608,000 $1,768,000 $2,020,000 21.0 22.0 22.0 Operating Expense Total Positions Source of Funds: General Expenditure and Position Summary $1,438,000 $1,500,000 $1,687,000 170,000 268,000 333,000 2006-07 $1,277,000 $1,222,000 $1,398,000 6.3 6.3 6.3 Source of Funds: General Other Restricted 76 2005-06 $1,268,000 $1,211,000 $1,387,000 9,000 11,000 11,000 CITY AUDITOR City Auditor Impact of Recommendations Program Goal The City Auditor Department supports the city manager and elected officials in meeting residents’ needs for quality government, products and services by providing independent and objective feedback on the city’s programs, activities and functions. The city auditor’s work is vital in maintaining trust and confidence that city resources are used effectively and honestly. The City Auditor budget also funds an annual independent audit conducted by outside auditors in accordance with the City Charter. This includes an audit of city accounting and financial records, the federal single audit, review of the City of Phoenix Employees’ Retirement System, external audits of specific activities and review of business systems for possible improvements. Millions $4 $3 3.0 2.8 2.8 2.5 $2 1.5 $1 $0 2002-03 2003-04 2005-06 2004-05 2006-07 Fiscal Year City Auditor Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: Budget Allowance Explanation The City Auditor 2006-07 operating budget allowance of $3,239,000 is $182,000 or 6.0 percent more than 2005-06 estimated expenditures. This increase is primarily due to normal inflationary adjustments and a return to full staffing levels. The budget also converts a temporary auditor II to a regular position. 2005-06 135 150 Percentage of commitment dates met 87% 85% 90% 100% 100% 100% 121 140 125 $19,000 $20,000 $20,000 8.4 8.4 8.5 Percentage of rulings issued timely Audit cycle time (calendar days) Cost per audit 2006-07 Total Positions $2,462,000 $3,057,000 $3,239,000 37.5 38.5 38.5 Source of Funds: General 78 $2,462,000 $3,057,000 $3,239,000 2006-07 145 *Based on 10 months actual experience. Operating Expense 2005-06* Performance audit and management reports issued Customer Satisfaction (Scale 1 to 10, 10 being highest) Expenditure and Position Summary 2004-05 2004-05 EQUAL OPPORTUNITY Equal Opportunity Major Performance Measures and Service Trends Program Goal The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: The Equal Opportunity Department promotes and enforces equal opportunities for both city employees and the general public through a wide range of voluntary affirmative action, education, community involvement and enforcement programs. These programs are carried out by a combination of staff and volunteer panels appointed by the Mayor and City Council. Budget Allowance Explanation The Equal Opportunity operating budget allowance of $4,257,000 is $444,000 or 11.7 percent more than 2005-06 estimated expenditures. This increase reflects a carry over of funds for a new Minority/Woman/Small Business Enterprise database and normal inflationary increases. The budget also converts a temporary equal opportunity specialist to regular status. 2004-05 Discrimination complaints in employment, public accommodations, housing and Americans with Disabilities Act (ADA) accessibility, investigated and closed** 2005-06* 2006-07 145 241 240 37 37 37 103% 100% 100% SBEs certified or recertified as percent of goal 83% 108% 108% Contracts monitored for use of M/W/D/SBE subcontractors 545 545 545 Minority-owned, woman-owned and disadvantaged and small business enterprise (M/W/D/SBE) outreach presentations to area businesses and M/W/D/SBE organizations M/W/D/SBEs certified or recertified as percent of goal *Based on 10 months actual experience. **The number of discrimination complaints received reflects many varied circumstances and can fluctuate significantly. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $3,430,000 $3,807,000 $4,251,000 38.0 40.0 40.0 Source of Funds: General $3,033,000 $3,402,000 $3,878,000 Community Development Block Grant 177,000 179,000 184,000 Grant 167,000 194,000 157,000 53,000 32,000 32,000 Other Restricted 79 PERSONNEL Personnel – Program Goal The Personnel Department partners with departments and employees to hire, compensate, support and develop a diverse workforce that is dedicated to delivering high-quality services to the community. Percent of city employees who agree the city of Phoenix is a good place to work* 100% 97 97 97 96 1999 2001 2003 2005 75% Budget Allowance Explanation The Personnel Department 2006-07 operating budget allowance of $16,664,000 is $1,022,000 or 6.5 percent more than 2005-06 estimated expenditures. This increase is primarily due to the costs associated with the recruitment of several executive and middle manager positions throughout the city and normal inflationary cost increases. The 2006-07 budget also includes the conversion of a temporary personnel analyst to regular status. 50% 25% 0% Fiscal Year *Results from the biennial Employee Opinion Survey. The next survey is scheduled for Fall 2007. Personnel Department Major Performance Measures and Service Trends Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: $14,438,000 $15,622,000 $16,644,000 112.4 113.4 2004-05 2005-06* 2006-07 5.14% 5.70% 5.15% 89 83 84 626 900 750 24 22 24 11,144 10,000 10,000 12 13 13 113.4 Annualized employee turnover rate Source of Funds: General $13,181,000 $14,270,000 $15,270,000 City Improvement 915,000 1,074,000 1,076,000 Other Restricted 342,000 278,000 298,000 Average work days from vacancy-to-fill date Number of recruitment processes** Average work days for recruitment from opening to creation of eligibility list Employees participating in city-sponsored and language classes Number of industrial claims filed per each 125 full-time equivalent employees *Based on 10 months actual experience. **Higher than normal vacancy levels in 2005-06. 80 PHOENIX EMPLOYMENT RELATIONS BOARD RETIREMENT SYSTEMS Program Goal Program Goal Retirement Systems provides staff support to the general, police and fire retirement boards and administers retirement programs for all city employees. The Phoenix Employment Relations Board oversees administration of the city’s Meet and Confer ordinance. Primary responsibilities of the board include conducting representation elections, and selecting mediators and fact finders to resolve impasses. The board consists of five members appointed by the City Council and has its own staff consisting of a director and a secretary. Budget Allowance Explanation The Retirement Systems gross operating budget allowance of $1,836,000 is $128,000 or 7.5 percent more than 2005-06 estimated expenditures. This increase is due primarily to increased software maintenance and audit costs and normal inflationary adjustments. Budget Allowance Explanation The Phoenix Employment Relations Board 2006-07 operating budget allowance of $229,000 is $9,000 or 4.1 percent more than 2005-06 estimated expenditures. This increase is primarily due to normal inflationary adjustments. Expenditure and Position Summary 2004-05 Operating Expense (Gross*) Total Positions Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2005-06 2006-07 $1,585,000 $1,708,000 $1,836,000 15.0 15.0 15.0 Source of Funds: 2006-07 $194,000 $220,000 $229,000 2.0 2.0 2.0 $194,000 $220,000 $229,000 General (Gross*) $1,585,000 $1,708,000 $1,836,000 *Gross costs are recovered through contributions to the pension fund. Source of Funds: General 81 LAW Program Goal The Law Department provides effective legal services to the Mayor and City Council, city manager, departments and advisory boards; interprets and enforces city, state and federal laws as they pertain to city services and activities; and effectively administers and prosecutes criminal cases filed in Phoenix Municipal Court using the prosecutorial function and discretion in a fair, impartial and efficient manner. Budget Allowance Explanation The Law Department 2006-07 operating budget allowance of $21,908,000 is $1,292,000 or 6.3 percent more than 2005-06 estimated expenditures. The increase is primarily due to the full-year costs of an attorney and court clerk added in May 2006 to staff an additional arraignment courtroom. The increase also reflects a return to full staffing levels, normal inflationary costs and carry over funds for the case and document management system. These increases are offset by a significant reduction in Local Law Enforcement Block Grant funding. Finally, a temporary administrative position was converted to a regular position in the budget. 2004-05 Operating Expense Total Positions 2005-06 2006-07 $19,473,000 $20,616,000 $21,908,000 242.0 246.0 246.0 Source of Funds: General $18,366,000 $19,629,000 $21,390,000 Court Awards 150,000 157,000 166,000 Grants 885,000 682,000 200,000 72,000 148,000 152,000 Other Restricted ______________________________________________________________________ Law Department Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Criminal cases sent to diversion 2005-06* 2006-07 3,314 3,300 3,500 65,773 70,000 70,000 754 787 785 38,752 45,000 45,000 Number of civil cases closed, including those assigned to outside counsel and handled through the alternative dispute resolution process 902 905 900 Ordinances and resolutions for City Council adoption drafted and reviewed 1,348 1,088 1,100 392 350 350 Pre-trial disposition conferences set New civil cases opened in the fields of condemnation, collection, taxes and civil litigation, excluding liability and other cases assigned to outside counsel Number of defendents submitted for charging review Number of jury trials prosecuted *Based on 10 months actual experience. 82 Expenditure and Position Summary INFORMATION TECHNOLOGY Program Goal The Information Technology Department coordinates the use of information technology across the various departments and agencies of city government to ensure that accurate and timely information is provided to residents, elected officials, city management and staff in the most cost-effective manner possible. The department provides operating departments with information processing through the application and coordination of computer technology and procures, manages and maintains the city’s radio, telephone and computer network systems. Budget Allowance Explanation The Information Technology operating budget allowance of $9,954,000 is $6,527,000 more than 2005-06 estimated expenditures. This increase reflects costs necessary to upgrade critical network infrastructure and business systems, the carry over of costs associated with a voice mail replacement system and the upgrade of the personnel and payroll system, normal inflationary increases and budget additions described below. Budget additions include a new deputy chief information officer to oversee all Water Services Department-related technology issues and maintenance costs for the e-commerce software purchased with 2001 bonds. The budget reflects the conversion of a temporary project manager and a temporary security guard to regular status. Expenditure and Position Summary 2004-05 2005-06 2006-07 Operating Expense* $4,379,000 $3,427,000 $9,954,000 Total Positions 210.0 213.0 214.0 Source of Funds: General $2,929,000 $1,646,000 $7,999,000 City Improvement 928,000 1,010,000 Other Restricted 400,000 555,000 562,000 Aviation 122,000 _ 216,000 _ 219,000 Water 1,012,000 162,000 *Reflects net costs; most costs are charged to other departments for services provided. Information Technology Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 Percentage of on-time operations center services 99.0% 99.2% 99.0% Number of ITD-supported network devices 16,706 18,000 18,000 99.0% 99.2% 99.0% 99.9% 99.9% 99.0% 99.2% 99.0% 99.9% 99.9% 99.0% 99.0% 99.0% 99.9% 99.9% Number of visits to phoenix.gov 10,522,991 11,890,979 12,000,000 Average cycle time of telephone service requests 2 weeks 2 weeks 2 weeks Average number of CityCom phone calls processed daily 107,269 102,249 103,287 1.2 hours 1.2 hours 1.2 hours 21,441 21,607 22,000 Critical Systems Availability Percentage: Enterprise Network Business Systems Internet Services Telephone Network Microwave Network Average cycle time of wireless communication repairs Units of portable and mobile radio equipment *Based on 10 months actual experience. Increased visits to phoenix.gov are due to the expansion of e-commerce, the increase in the amount of information provided to citizens by city departments, and the increase in Internet users. 83 CITY CLERK AND ELECTIONS Budget Allowance Explanation Program Goal The City Clerk operating budget allowance of $6,640,000 is $1,084,000 or 14.0 percent less than 2005-06 estimated expenditures. The decrease primarily reflects the non-recurring costs of a regularly scheduled citywide election and a special bond election in 2005-06. This decrease is partially offset by the carry forward of unspent funds for ballot tabulation software and normal inflationary increases. The City Clerk Department maintains orderly and accessible records of all city activities and transactions including posting all public meeting notifications; prepares agendas and minutes for City Council formal meetings; provides for effective administration of city elections and annexations; administers liquor, bingo and regulatory license services; and provides printing, typesetting, microfilming, document imaging, office automation and mail delivery services to all city departments. 2004-05 Operating Expense Total Positions 2005-06 34 33 129.2 129.2 $6,576,000 $7,558,000 $6,477,000 General City Improvement 163,000 166,000 34 29 29 2004-05 2005-06 0 2002-03 2003-04 Fiscal Year The decrease in 2005-06 is a result of the state of Arizona licensing massage practitioners. 84 129.2 Source of Funds: 20 2001-02 2006-07 $6,739,000 $7,724,000 $6,640,000 City Clerk _ Business License Activity Thousands 60 40 Expenditure and Position Summary 163,000 City Clerk Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Council formal meetings for which agendas and minutes are prepared Minutes prepared on-time without errors 2005-06* 2006-07 47 45 45 100% 100% 100% 3,241 3,200 3,100 100% 100% 100% 7.1 mil. 7.1 mil. 7.1 mil. 24 24 24 100% 100% 100% 2.4 10.6 2.8 12.0 2.8 12.0 1 1 1 1.6 hours 2.0 hours N/A Percent of Enterprise Call Center questions answered without referral 98% 93% 93% Customer satisfaction with department 96% 94% 94% Notices posted in compliance with open meeting law Rate of compliance Water bills and other items presorted for mailing Average number of days to process a business license Property ownership updates completed within five working days of receipt from county Turnaround times for printing jobs (number of days): Rush jobs Routine jobs City Council regular and special elections held Election time from poll closing to final results for citywide election *Based on 10 months actual experience. The number of Council formal meetings varies each year depending on the need for special meetings. The budget assumes two special meetings annually. There is no citywide election scheduled in FY2006-07. 85 FINANCE Budget Allowance Explanation Program Goal The 2006-07 Finance operating budget allowance of $26,320,000 is $2,582,000 or 10.9 percent more than 2005-06 estimated expenditures. This reflects a return to full staffing and normal inflationary increases. The budget also converts a temporary inventory management coordinator and a temporary accountant to regular status. The Finance Department strives to maintain a fiscally sound governmental organization that conforms to legal requirements and to generally accepted financial management principles; maintains effective procurement procedures for commodities and services; provides for effective treasury management and a citywide risk management program; acquires, manages and disposes of property for public facilities; provides an effective debt management program; and provides financial advisory services for all city departments. 86 Expenditure and Position Summary 2004-05 2005-06 2006-07) Operating Expense $22,061,000)$23,738,000) $26,320,000) Total Positions 310.5) 313.5) 313.5) Source of Funds: General $20,612,000)$22,031,000) $24,464,000) Water 751,000) 811,000) 928,000) Wastewater 628,000) 782,000) 782,000) 67,000) _) 123,000) 128,000) 18,000) _) _) Sports Facilities Public Housing City Improvement 1,000) (9,000) _) Grants 2,000) _) Finance Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Investments by Portfolio: Treasurer’s Group Portfolio Dollars Invested Average Yield Average Life (years) 2005-06* 2006-07 $1,248 mil. 3.53% 1.8 $1,442 mil. 3.82% 1.3 N/A N/A N/A $233 mil. 2.09% .42 $265 mil. 3.35% .07 N/A N/A N/A $1,073 mil. 2.36% .27 $1,611 mil. 3.85% .15 N/A N/A N/A Dollar value of accounts payable warrants processed $3.0 bil. $2.5 bil. $2.5 bil. Privilege license tax gross dollars reviewed $8.0 bil. $5.0 bil. $3.0 bil. AA+ Aa1 AA+ Aa1 AA+ Aa1 Water Revenue - Standard & Poor’s Water Revenue - Moody’s AA Aa3 AA Aa3 AA Aa3 Airport Revenue - Standard & Poor’s Airport Revenue - Moody’s AAA1 AAA1 AAA1 Senior Lien Street Revenue - Standard & Poor’s Senior Lien Street Revenue - Moody’s AA Aa3 AA Aa3 AA Aa3 Senior Lien Excise Tax - Standard & Poor’s Senior Lien Excise Tax - Moody’s AAA Aa2 AAA Aa2 AAA Aa2 Risk management claims received and closed 3,383 3,450 3,525 Receivables: Dollar value of receivables billed Percentage outstanding (as of June 30) $493 mil. 3.8% $495 mil. 3.5% $475 mil. 3.8% City sales (excise) tax collected $587 mil. $667 mil. $720 mil. Yield Restricted Portfolio Dollars Invested Average Yield Average Life (years) Other Non-Yield Restricted Portfolio Dollars Invested Average Yield Average Life (years) Bond Ratings: General Obligation - Standard & Poor’s General Obligation - Moody’s *Based on 10 months actual experience. The amounts to be invested for 2006-07 are based on cash available during the fiscal year. The decrease in privilege license tax dollars reviewed from 2004-05 is due to closing assessments on some very large taxpayers in 2004-05. in 2004- 87 BUDGET AND RESEARCH Budget and Research Major Performance Measures and Service Trends Program Goal The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: The Budget and Research Department ensures effective, efficient allocation of city resources to enable the City Council, city manager and city departments to provide quality services to our residents. 2004-05 Budget Allowance Explanation The Budget and Research Department’s 2006-07 operating budget allowance of $4,307,000 is $400,000 or 10.2 percent more than 2005-06 estimated expenditures. This increase is due primarily to increased charges to impact fee funds and normal inflationary increases. These are partially offset by the elimination of several one-time costs associated with the 2006 bond election. The budget also converts a temporary budget analyst to regular status. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $3,612,000 $3,907,000 $4,307,000 32.0 33.0 33.0 Source of Funds: General Other Restricted 88 $3,302,000 $3,501,000 $3,851,000 310,000 406,000 456,000 2005-06* 2006-07 Percent variance of actual expenditures to estimated expenditures (GF) (0.9)% 0% 0% Percent variance of actual resources to estimated resources (GF) (0.5)% 0% 0% Costs savings and/or operational improvements identified (millions) $7.2 $5.5 $5.5 Percent of requested research completed by due date 85% 88% 100% 8.5 8.9 10.0 92% 85% 85% Customer satisfaction with services (scale of 1-10) Percent of Capital Improvement Program awarded *Based on 10 months actual experience. ENGINEERING AND ARCHITECTURAL SERVICES Program Goal Number of Projects The Engineering and Architectural Services Department provides for the economical, safe and aesthetic design and construction of facilities on city property; coordinates the bid specification process, including setting minority and woman-owned subcontractor goals for all capital improvement construction projects; and serves as the central depository for all official records relating to capital projects. Engineering and Architectural Services – Construction Projects Awarded 225 150 100 120 114 110 90 75 0 2002-03 2003-04 Budget Allowance Explanation 2004-05 2005-06 2006-07 Fiscal Year The Engineering and Architectural Services gross operating budget allowance of $13,571,000 is $1,087,000 or 8.7 percent higher than 2005-06 estimated expenditures. This increase is primarily the result of normal inflationary increases. The budget also converts a temporary plans review coordinator for the downtown area and three temporary positions in the Utility Section to regular status. Engineering and Architectural Services Major Performance Measures and Service Trends Expenditure and Position Summary Percentage of utility permits reviewed and approved by target date** 87% 77% 77% Number of construction contract bids awarded 114 120 110 Number of engineering and architectural consultant contracts awarded 298 280 300 4.4% 3.3% 1.9% 4.0% 3.0% 2.0% 3.0% 3.0% 3.0% 2004-05 2005-06 2006-07 Operating Expense $11,194,000 $12,484,000 $13,571,000 (Gross*) Total Positions 110.1 112.1 112.1 Source of Funds: General (Gross*) Other Restricted $11,194,000 $12,401,000 $13,553,000 _ 18,000 83,000 *The majority of Engineering and Architectural Services’ costs are charged to the appropriate capital improvement projects. The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Construction dollars as a percentage of total dollars awarded: Minority-owned business enterprises Woman-owned business enterprises Small business enterprised 2005-06* 2006-07 *Based on 10 months actual experience. **Projected decrease in 2005-06 is due to impacts of anticipated increase in CIP projects workload. 89 ip be tw ee n p a rt n er sh t in jo d fi re e u is a u n iq r p ol ic e a n h el ic op te r sk s d es ig n ed fo y ta 9E ll e 10 ia th a ec of st m en ts . Sp fo r m a n y n gi n e A gu rt e -e a bl in ep ra d tw u e e d h ir e T nd F n d m or es a n d ix P ol ic e a s it sa fe r a ta in re sc u th e P h oe n re s, m ou n op te r m a ke fi ic g el n h ti is gh th s fi m is si on s, rm su ch a on to p er fo s. on ti it ’s ca ll ed a er d -r es cu e op se a rc h -a n 90 Public Safety The Public Safety Program Represents 31.4% of the Total Budget. Police Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 Average Response Time (Minutes) Priority 1 - Emergency Calls Priority 2 - Non-Emergency Calls Priority 3 - All Other Calls Telephone Callbacks The Public Safety program budget includes the Police Department, Fire Department, Emergency Management and Family Advocacy Center. 5.7 19.7 63.5 49.5 5.6 20.5 63.8 53.7 5.6 20.1 63.1 55.2 Percentage of phone calls to 911 and Crime Stop answered within 10 seconds 81.5% 81.3% 82.1% Cases accepted by the county attorney for issuance of complaint 22,277 20,041 22,000 230,284 524,458 528,000 33,103 33,811 33,000 41% 16% 17% 39% 6% 15% 9% 8% 41% 26% 19% 39% 5% 14% 10% 9% 41% 22% 19% 39% 5% 15% 10% 8% POLICE Moving violation citations issued Program Goal The Police Department provides the community with a law enforcement system that integrates and uses all departmental, civic and community resources for police services and protection of the lives and property of our residents. Budget Allowance Explanation The 2006-07 Police operating budget allowance of $473,744,000 is $52,114,000 or 12.4 percent more than 2005-06 estimated expenditures. This increase is primarily due to costs associated with adding 116 sworn and 28 civilian positions and a Maricopa County jail fee increase. The city is utilizing remaining Universal Hiring Grant authority to leverage the hiring of 111 new police officer patrol positions over the next three years. The Aviation Traffic accidents Percentage of cases cleared: Murder Rape Robbery Aggravated Assault Burglary Theft Auto Theft Arson *Based on 10 months actual experience. 91 Department is funding the remaining five police officer positions for increased security at Sky Harbor Airport. In addition, 24 police communications operators are being added to address increased workload. Finally, four police support positions are being added to staff the new Sunnyslope neighborhood police station scheduled to open in March 2007. Expenditure and Position Summary 2004-05 Operating Expense 2005-06 2006-07 $393,029,000 $421,630,000 $473,744,000 Total Positions 4,161.7 4,168.7 4,312 .7 Source of Funds: General $350,091,000 $366,263,000 $408,754,000 Neighborhood Protection 18,265,000 21,429,000 23,515,000 Public Safety Enhancement 2,213,000 9,353,000 14,690,000 16,453,000 14,537,000 17,749,000 Federal and State Grants Court Awards City Improvement 3,144,000 3,464,000 3,017,000 916,000 1,636,000 3,956,000 Sports Facilities 964,000 993,000 993,000 Convention Center 782,000 Human Services Grant 759,000 _ 18,000 782,000 _ Other Restricted 224,000 3,155,000 288,000 Police — Violent Crimes per 1,000 Residents 8 7.2 6.6 6.5 6.9 6.5 6 4 2 0 2002-03 2003-04 2004-05 Fiscal Year 92 2005-06 2006-07 Police — Property Crimes per 1,000 Residents 80 71 66 61 60 59 2004-05 2005-06 2006-07 60 40 20 0 2002-03 2003-04 Fiscal Year T h e 20 06 -0 7 bu d ge t in cl u d es fu n p os it io n s d in g fo r th to th e P ol ic e a d d it io n e D ep a rt m of 11 6 sw or en t. n a n d 28 ci vi li a n 93 FIRE Program Goal The Fire Department provides the highest level of life and property safety through fire prevention, fire control, emergency medical and public education services. Budget Allowance Explanation The 2006-07 Fire operating budget allowance of $247,297,000 is $28,519,000 or 13.0 percent more than 2005-06 estimated expenditures. This increase reflects several budget additions and normal inflationary adjustments. Budget additions include 64 firefighters and eight civilian support positions for four new bond-funded fire stations located Fire — First Unit Average Response Time Minutes 6 4:52 4:53 5:00 5:04 5:06 2002-03 2003-04 2004-05 2005-06 2006-07 4 2 0 Fiscal Year a d d it io n of in g fo r th e d n fu es d cl u os it io n s. 7 bu d ge t in su p p or t p T h e 20 06 -0 11 ci vi li a n d n a rs te 72 fi re fi gh 94 at 15th Avenue and Dobbins Road, 19th and Dunlap avenues, 19th Street and Indian School Road, and 99th Avenue and Lower Buckeye Road. The budget also adds three sworn positions to open the new Public Safety Driver Education Facility and provide training to all sworn staff who operate vehicles. In addition, the budget reflects retaining five fire training captains to provide for the department’s training needs over the next several years as experienced personnel retire and as new station construction continues. Finally, the budget includes three fire prevention specialists needed to assist with the Annual Facilities Program. These three positions will be funded with Development Services fees. In total, the 2006-07 budget adds 72 sworn and 11 civilian positions to the Fire Department. Operating Expense Total Positions 2005-06 1,886.2 1,969.2 Source of Funds: General 35.6 32.2 31.3 30.0 30.0 2003-04 2004-05 2005-06 2006-07 30% 20% 10% 0% 2002-03 Fiscal Year Fire Department Major Performance Measures and Service Trends 2004-05 2006-07 $188,573,000 $218,778,000 $247,297,000 1,873.2 40% The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: Expenditure and Position Summary 2004-05 Fire — Percentage of Time First Unit Arrives on Scene in Four Minutes or Less $172,462,000 $194,330,000 $219,704,000 Public Safety Enhancement 1,167,000 6,137,000 8,846,000 Fire Neighborhood Protection 6,388,000 6,467,000 8,673,000 Development Services 1,944,000 2,409,000 2,638,000 Grants 5,573,000 7,114,000 3,816,000 Other Restricted 125,000 121,000 68,000 City Improvement 914,000 2,200,000 3,552,000 Percent of fire and emergency medical call responses within four minutes 2005-06* 2006-07 31.3% 30% 30% Patient transports to Valley hospitals via emergency medical vehicles 55,574 57,201 54,800 Percentage of time Advanced Life Support (ALS) medical calls are responded to with paramedic units within five minutes 49.8% 47.4% 47% Number of fire investigations to determine cause only 761 797 840 117,243 15,488 125,000 17,000 130,000 17,000 8,589 8,000 8,000 Number of calls by type: Emergency Medical Fire Other (mountain/swift water/ trench/tree rescues/other) *Based on 10 months actual experience. 95 EMERGENCY MANAGEMENT Program Goal The Emergency Management Program provides the city with the capability to mitigate, plan for, respond to and recover from large-scale community emergencies and disasters as a result of man-made, technological or natural hazards. Program Goal Expenditure and Position Summary Operating Expense Budget Allowance Explanation Total Positions The Emergency Management 2006-07 operating budget allowance of $787,000 Source of Funds: General Public Safety Enhancement Grants 96 FAMILY ADVOCACY CENTER is $56,000 or 6.6 percent less than 2005-06 estimated expenditures. This decrease reflects a 2005-06 consulting contract to develop an emergency evacuation plan. 2004-05 2005-06 2006-07 $349,000 $843,000 $787,000 6.5 6.5 6.5 The Family Advocacy Center provides comprehensive, seamless service to victims of domestic and family violence and sexual assault through enhanced coordination, collaboration and communication among city, county and community service providers. Budget Allowance Explanation $265,000 _ $401,000 $313,000 295,000 321,000 84,000 147,000 153,000 The Family Advocacy Center operating budget allowance of $1,173,000 is $80,000 or 7.3 percent more than 2005-06 estimated expenditures. This increase is due to a full year’s cost for maintaining property acquired for the planned construction of a new family advocacy center, and normal inflationary cost adjustments. Family Advocacy Center Major Performance Measures and Service Trends Expenditure and Position Summary Phone calls received 4,122 4,620 4,759 Victim contacts 7,433 7,260 7,478 Services provided 1 3,284 3,276 3,409 Presentation participants 1,100 1,953 2,012 2004-05 Operating Expense Total Positions 2005-06 The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2006-07 $969,000 $1,093,000 $1,173,000 5.0 7.0 7.0 Source of Funds: General Other Restricted 2005-06* 2006-07 *Based on 10 months actual experience. $931,000 $1,050,000 $1,130,000 38,000 43,000 43,000 Includes shelter placements, orders of protection, financial assistance, counseling services and medical examinations. 1 T h e F a m il y A d vo ca cy C en te r p ro va ri et y of vi d es vi ct im se rv ic es w it h ou t h a vi s th e op p or in d iv id u a n g to tr a ve tu n it y to ob ls a re a bl e l to m u lt ip ta in a to m ee t w p ol ic e a n d le lo ca ti on it h co m m u p ro se cu to s. A t th e ce n it y a n d h r st a ff , in cl a n sw er qu n te r, u m a u n d es ti on s a n in g vi ct im se rv ic es w d p ro vi d e or ke rs , a n a d vo ca te s em ot io n a l d w h o a re a va il a bl e su p p or t. to 97 ff ic m in or tr a s gi n g fr om si x m on th n ra of s y se lt a ca h a n d le s m u m p en xi rt a ou m C a l a y s th a t ca rr ix M u n ic ip d em ea n or T h e P h oe n la ss 1 m is C to s on ti vi ol a 00 fi n e. d /o r a $2 ,5 in ja il a n 98 Criminal Justice The Criminal Justice Program Represents 2.8% of the Total Budget. Municipal Court Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 72,278 78,000 78,000 277,903 260,550 270,000 32.7 33.0 33.0 Number of criminal cases with a pending trial date at year end 1,751 2,000 1,800 Percent of trials/hearings appealed 2.8% 3.6% 3.6% 94.4% 92.7% 92.5% 1.4 days 1.4 days 1.8 days Criminal filings Civil filings Average number of days from arraignment to hearing for minor traffic cases The Criminal Justice program budget includes the Municipal Court and Public Defender. Percent of appeals affirmed MUNICIPAL COURT Program Goal The Municipal Court provides with integrity, to all individuals who come before this court: equal access, professional and impartial treatment, and just resolution of all court matters. Average cycle time for sending out restitution and bail refund checks Average hold time for incoming information calls to the Customer Call Center 7.4 minutes 8.0 minutes**8.0 minutes** *Based on 10 months actual experience. **Calls relating to the FARE and TIP programs have contributed to longer holding times for other callers. In addition, this unit has had several staff vacancies. Budget Allowance Explanation The Municipal Court 2006-07 operating budget allowance of $41,885,000 is $4,499,000 or 12.0 percent more than 2005-06 estimated expenditures. The increase is due to the full-year costs of positions added mid-year in 2005-06 and normal inflationary increases. These mid-year additions include two treasury collections representatives to expand the Delinquent Accounts Unit, which will result in additional revenue. A court clerk and a bailiff were added to staff another criminal arraignment court, which will provide expedited service to 99 the public. Finally, six information technology positions were added to expand the Municipal Court’s Computer Applications Development and Support Section and will be funded by the Court Technology Enhancement Fund (CTEF). These technology positions will allow the Municipal Court to continue implementation of mandated internal and external projects required for court operations. Days Municipal Court - Average Days from Arraignment to Adjudication (criminal cases) 100 80 75 76 71 75 75 50 25 Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $34,885,000 $37,386,000 $41,885,000 374.9 384.9 0 2002-03 2003-04 2004-05 2005-06 2006-07 Fiscal Year 384.9 Source of Funds: General Other Restricted City Improvement $28,859,000 $30,806,000 $34,130,000 222,000 776,000 1,949,000 5,804,000 5,804,000 5,806,000 ic es a ti n g se rv a n d tr a n sl g n ti re . rp d es in te la n gu a ge ou rt p ro vi qu ir e si gn u n ic ip a l C ki n g or re M ea ix sp n h oe is h The P n on -E n gl ls w h o a re in d iv id u a 100 to PUBLIC DEFENDER Public Defender Major Performance Measures and Service Trends Program Goal The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: The Public Defender Program provides legal representation for indigent defendants in Phoenix Municipal Court. Budget Allowance Explanation The 2006-07 operating budget allowance for the Public Defender Contract Administrator’s Office of $4,346,000 is $416,000 or 10.6 percent more than the 2005-06 estimated expenditures. This increase is primarily due to normal inflationary adjustments. Funding for contractual expert witness services was converted to a full-time forensic technology expert position which will create efficiencies for the Municipal Court in trial scheduling. 2004-05 2005-06* 2006-07 Defendents charged with misdemeanor crimes represented in Phoenix Municipal Court 13,560 13,840 13,900 Defendants represented at Jail Court (first appearance after arrest), and K-Court (second appearance after arrest for those not bonding out after their first appearance) 23,085 25,761 26,000 *Based on 10 months actual experience. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $3,714,000 $3,930,000 $4,346,000 7.6 9.0 9.0 Source of Funds: General $3,714,000 $3,930,000 $4,346,000 101 y H a rb or h oe n ix Sk th ro u gh P d le ve a tr p a ss en ge rs 6. 41 m il li on ea r 20 05 -0 M or e th a n in fi sc a l y t or p ir A l a on ti In te rn a 102 Transportation The Transportation Program Represents 19.4% of the Total Budget. Street Transportation Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 169,000 164,000 190,000 Miles of streets per street maintenance field employee 14.9 15.2 15.3 Percent of scheduled requests for street maintenance service completed within target 86% 85% 85% Percent of major/collector street miles with satisfactory rideability 97% 98% 98% 8,861 8,000 9,500 Customer satisfaction on traffic operations requests for service (scale 1 to 10) 9.0 9.0 9.0 Number of neighborhoods actively working with the Neighborhood Traffic Management Team*** 325 220 250 Miles of major streets constructed**** 14.5 11.0 8.0 Customer satisfaction on mid-block streetlight requests 93% 95% 95% Street miles swept** The Transportation program budget includes the Street Transportation Department, the Aviation Department and Public Transit. Requests for services completed by the Operations Division STREET TRANSPORTATION Program Goal The Street Transportation Department plans for the safe and convenient movement of people and vehicles on city streets, effectively maintains the city’s streets, designs and inspects the construction of streets to assure they meet specifications and minimizes street damage through the control of irrigation and storm water. Budget Allowance Explanation The Street Transportation 2006-07 operating budget allowance of $64,571,000 is $5,947,000 or 10.1 percent more than 2005-06 estimated expenditures. This increase is primarily due to equipment replacements, a return to normal staffing levels, increased technology support, increased commodity and materials costs, increased costs for landscape maintenance and normal inflationary adjustments. This increase also is due to the carry forward of unspent funds to complete remodeling projects started in 2005-06 and for updating the Traffic and Barricade manual. The budget also reflects the first phase of the planned restoration of *Based on 10 months actual experience. **The decrease in 2003-04 is due to vacant positions. **The sweeping cycle in 2004-05 doubled in non-attainment areas (Broadway to Baseline roads, 16th Street to 51st Avenue), decrease in 2005-06 is due to unusually high rainfall, and increase in 2006-07 is result of two additional sweepers purchased through cost sharing with MAG. ***The decrease in 2005-06 is due to vacancies and a position transfer. ****Decrease in 2005-06 and 2006-07 is due to the rise of material costs. 103 General Fund support to the department. Restoring General Fund support will free up gas tax funds for street construction. The budget includes adding a 1.0 FTE engineering technician position to provide full customer service to the Floodplain Section. Costs for this position will be offset by elimination a 0.7 FTE part-time secretary II and other cost savings. The budget also converts contract environmental services to two full-time environmental quality specialists for technical support with environmental compliance and regulation issues. Finally, the budget adds two temporary summer intern positions to assist with the street inspection areas and a civil engineer for the materials lab to work with downtown projects. Costs for these positions will be charged to the appropriate Capital Improvement Program. Expenditure and Position Summary 2004-05 Operating Expense 2005-06 $56,398,000 $58,624,000 $64,571,000 Total Positions 764.7 776.7 General $19,575,000 $19,669,000 $25,638,000 Arizona Highway User Revenue 36,332,000 38,465,000 38,447,000 City Improvement 400,000 399,000 398,000 Grant 31,000 29,000 25,000 Other Restricted 60,000 62,000 63,000 (includes total miles of sealcoat and asphalt overlay) 300 250 220 224 186 200 134 150 123 100 0 2002-03 2003-04 2004-05 2005-06* 2006-07** Fiscal Year *Decrease in 2004-05 due to bad weather conditions and price increases **Decrease in 2005-06 and 2006-07 primarily due to budget reductions in the sealcoat program and a 25 percent increase in material costs. 104 782.0 Source of Funds: Street Transportation – Miles Resurfaced and Sealed Number of miles 2006-07 AVIATION Sky Harbor Airport– Passengers Arriving and Departing Program Goal The Aviation Department provides the Phoenix metropolitan area with a self-supporting system of airports and aviation facilities that accommodate general and commercial aviation in a safe, efficient and convenient manner. Passengers (Millions) 50 48 46 41.7 44 40.5 42 Budget Allowance Explanation 40 The Aviation operating budget allowance of $196,582,000 is $34,070,000 or 21.0 percent more than 2005-06 estimated expenditures. This increase is largely due to budget additions, the full year’s costs associated with opening the new car rental facility and normal inflationary increases. The 2006-07 budget adds staff and other expenses for operating new capital projects schedule to open in 2006-07. Those projects include the new in-line explosive detection baggage handling 38 43.2 38.2 36.6 36 34 32 30 2002-03 2003-04 2004-05 2005-06 2006-07 Fiscal Year T h e n ew R en ta l C a r C en te r a t a ll of th e P h oe a ir p or t’ s re n ta l ca r op n ix Sk y H a rb or In te T h e re n ta rn a ti on a l er a ti on s, a l ca r co u n A ir p or t h ou to ta l of 13 te rs a re lo se rv ic e bu se s ca te d in si co m p a n ie s, il d in g w h d e of a 12 u n d er on e ic h si ts on 5, 00 0- sq u a ro of . to p of a th re -f oo t cu st re e- le ve l p om er a rk in g ga ra ge . 105 system for all terminals at Phoenix Sky Harbor International Airport and for new fire alarm, access control and digitally controlled equipment at the east economy parking garage, rental car center and bus maintenance facility. Also included is staff and maintenance contract for a new Aviation Department Geographic Information System (GIS). In addition, the budget allowance adds one project manager to provide environmental, technical and regulatory oversight for numerous capital improvement projects, funds five sworn police officers to increase patrol of roadways and airfields (positions shown in Police Department) and converts one part-time communications dispatcher position to a regular full-time position. Operating Expense Total Positions 2005-06 2006-07 $144,143,000 $162,512,000 $196,582,000 769.7 803.7 824.7 Source of Funds: Aviation 106 The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2005-06* 2006-07 40.5 mil. 41.7 mil. 43.0 mil. $48.36 $53.88 $64.08 $50.76 $56.76 $62.28 $52.28 $58.46 $64.14 $6.87 $9.00 $6.65 $6.60 $8.76 $7.00 $6.72 $8.93 $7.27 Aircraft takeoffs and landings (Sky Harbor Airport only) 546,562 554,000 560,000 Total international passengers 1,648,361 1,770,000 1,900,000 333,828 334,000 338,000 2004-05 Sky Harbor passengers arriving and departing Airline rental rates (cost per square foot): Terminal 2 Terminal 3 Terminal 4 Gross sales per departing passenger: Terminal 2 Terminal 3 Terminal 4 Air cargo processed (in tons) Expenditure and Position Summary 2004-05 Aviation Major Performance Measures and Service Trends $144,143,000 $162,512,000 $196,582,000 *Based on 10 months actual experience. PUBLIC TRANSIT Transit– Average Weekday Bus Ridership Program Goal The Public Transit Department provides improved public transit services and increased ridership in the Phoenix urbanized area through the operation of a coordinated regional fixed route and paratransit bus transportation system. Thousands 150 139 149 153 157 129 125 100 Budget Allowance Explanation 75 The Public Transit operating budget allowance of $186,163,000 is $21,579,000 or 13.1 percent more than 2005-06 estimated expenditures. This increase is primarily due to full-year costs of service added in 2005-06, service restoration and enhancements and normal inflationary increases. The Transit 2000 budget provides for the restoration of 10:30 p.m. to midnight service on 12 local fixed routes and the 50 25 0 2002-03 2003-04 2004-05 2005-06 2006-07 Fiscal Year T h e R A P ID se rv ic e ta ke co m m u te rs th ro u gh F ri d a y m or to a n d fr om n in gs a n d to a d d m or d ow n to a ft er n oo n e R A P ID tr s. T h e 20 06 w n P h oe n ix M on d a ip s to th is y -0 7 bu d ge t ve ry p op u in cl u d es fu la r tr a n si nds t se rv ic e. 107 restoration of Saturday service at Central Station. In addition, the budget includes funds to add Saturday service hours at Metrocenter Transit Center, extend weekday afternoon peak hours to alleviate overcrowding on six popular local routes, extend service on 35th Avenue to serve the Adobe Mountain Juvenile Institute, implement additional neighborhood circulator bus routes, increase Sunday frequency from 60 minutes to 30 minutes on Route 56 and Route 45, improve Route 24 to better serve major employers in the Sky Harbor Center area, add RAPID trips to reduce overcrowding and provide for the Phoenix portion of Route 131. The budget also would add staff and resources to enhance maintenance of bus stops and transit facilities and provide support for new alarm systems. Also included is the addition of staff to enhance transit service planning, offset by contract savings. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 108 2006-07 $141,311,000 $164,584,000 $186,163,000 86.0 92.0 97.0 Source of Funds: General $25,646,000 $25,146,000 $26,146,000 Transit 2000 79,780,000 90,658,000 100,969,000 City Improvement 14,811,000 27,355,000 38,126,000 Local Transportation Assistance 7,030,000 6,929,000 6,860,000 Other Agency 8,949,000 8,953,000 8,672,000 FTA Grant 5,095,000 5,522,000 5,390,000 _ 21,000 _ Federal & State Grant Trust er sh ip ee kd a y ri d a ve ra ge w 6, -0 05 20 ea r 0. In fi sc a l y th a n 15 2, 00 w a s m or e ci ty bu se s 2005-06 on Public Transit Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Cost recovery from fares 2005-06* 2006-07 22.1% 20.7% 19.9% $26,276 $26,713 $27,145 On-time performance for bus service 90% 89% 88% On-time performance for Dial-a-Ride prescheduled service 95% 94% 94% On-time performance for Dial-a-Ride on-demand service 61% 62% 59% Average weekday ridership for bus service 148,508 152,875 157,000 Average weekday ridership for Dial-a-Ride service 1,256 1,291 1,300 Passengers per revenue mile for bus service 2.42 2.48 2.53 Passengers per revenue mile for Dial-a-Ride service 0.10 0.10 0.10 Operating revenue (thousands) *Based on 10 months actual experience. Cost recovery from fares is decreasing due to the time it takes for newly added service to develop ridership. On-time performance for bus service is expected to decline due to ongoing construction in the Valley area. On-time performance for Dial-a-Ride is expected to decline due to increasing demand. 109 th e on a bo u t in fo rm a ti c si ba s h ce it n /o rd in a om er s w la te d co d es a ss is ts cu st op m en t- re en te r st a ff el C ev t d en , ls m ta op it T h e D ev el p la n su bm t p ro ce ss , d ev el op m en it s. a n d p er m 110 Community Development The Community Development Program Represents 10.0% of the Total Budget. Development Services Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 The Community Development program budget includes Development Services, Planning, Business Customer Service Center, Housing, Community and Economic Development, Downtown Development Office, Neighborhood Services and the HOPE VI Project. 2005-06* 2006-07 Total construction permits issued 41,269 44,950 44,950 Single-family permits issued 11,924 10,000 10,000 Multi-family units permitted 6,429 3,500 3,500 Commercial square footage permitted 20.4 million 15 million 20 million Building permit valuation $4.4 billion $4.2 billion $4.3 billion 337,973 342,50 342,500 78% 96% 93% 97% 93% 97% 13,698 12,000 12,000 118,801 130,000 130,000 10 minutes 15 minutes 10 minutes Number of inspections Percent of building safety inspections performed on scheduled day: Residential Commercial DEVELOPMENT SERVICES Residential lots submitted for preliminary review Program Goal Counter customers served The Development Services Department manages the development approval process to ensure the construction of safe buildings and compatible site improvements that enhance the urban environment and promote economic vitality. Average wait time *Based on 10 months actual experience. Changes in single-family permits, multi-family permits and commercial square footage permitted, and number of inspections are primarily due to market forces. The average wait time is reported on all counters excluding the residential counter. Budget Allowance Explanation The Development Services operating budget allowance of $56,318,000 is $7,353,000 or 15.0 percent more than 2005-06 estimated expenditures. This increase results primarily from budget additions, the full year’s cost for mid-year additions and normal inflationary increases. 111 The mid-year budget additions in 2005-06 included increased staff for commercial inspections, residential and commercial plan review, and other resources including overtime and contracted plans review services to address the increasing demands for development services. The 2006-07 budget includes the addition of staff to expand the Annual Facilities Review Program. In addition, the budget adds three administrative support positions to improve public information services, assist with customer issues and problem resolution in the residential services area, and meet technical support workloads. 2004-05 Operating Expense 2005-06 2006-07 $42,140,000 $48,965,000 $56,318,000 459.0 523.0 532.0 Source of Funds: Development Services $41,840,000 $48,637,000 $55,778,000 Other Restricted 300,000 $5 $3 328,000 Development Services – Value of Permits Issued $4 $4.2 $4.2 $4.3 2004-05 2005-06 2006-07 $3.2 $2.6 $2 $1 $0 2002-03 2003-04 Fiscal Year 112 Program Goal The Planning Department coordinates the orderly growth of the city and creates a quality living environment through effective comprehensive planning. Expenditure and Position Summary Total Positions Billions PLANNING 540,000 Budget Allowance Explanation The Planning Department’s 2006-07 budget allowance of $7,591,000 is $346,000 or 4.8 percent more than 2005-06 estimated expenditures. The increase is The mid-year budget additions in 2005-06 included increased staff for commercial inspections, residential and commercial plan review, and other resources including overtime and contracted plans review services to address the increasing demands for development services. The 2006-07 budget includes the addition of staff to expand the Annual Facilities Review Program. In addition, the budget adds three administrative support positions to improve public information services, assist with customer issues and problem resolution in the residential services area, and meet technical support workloads. 2004-05 Operating Expense 2005-06 2006-07 $42,140,000 $48,965,000 $56,318,000 459.0 523.0 532.0 Source of Funds: Development Services $41,840,000 $48,637,000 $55,778,000 Other Restricted 300,000 $5 $3 328,000 Development Services – Value of Permits Issued $4 $4.2 $4.2 $4.3 2004-05 2005-06 2006-07 $3.2 $2.6 $2 $1 $0 2002-03 2003-04 Fiscal Year 112 Program Goal The Planning Department coordinates the orderly growth of the city and creates a quality living environment through effective comprehensive planning. Expenditure and Position Summary Total Positions Billions PLANNING 540,000 Budget Allowance Explanation The Planning Department’s 2006-07 budget allowance of $7,591,000 is $346,000 or 4.8 percent more than 2005-06 estimated expenditures. The increase is primarily due to the addition of a planner to provide assistance with General Plan amendments and zoning services to be funded through a fee increase. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $7,525,000 $7,245,000 $7,591,000 75.9 74.9 75.9 Source of Funds: $6,734,000 $6,368,000 $6,795,000 General Community Development 62,000 Block Grant Other Restricted 729,000 63,000 65,000 814,000 731,000 BUSINESS CUSTOMER SERVICE CENTER Program Goal The Business Customer Service Center provides technical assistance to customers in the development process, evaluates and promotes changes to the development process for efficient operations, and administers the Phoenix infill housing program. Budget Allowance Explanation Planning Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 Village planning committees supported 15 15 15 Zoning adjustment hearings scheduled within 25 working days of request 41% 35% 50% Formal rezoning pre-application meetings scheduled within 15 working days of request 54% 30% 50% Annual cycle General Plan amendments completed by target date 84% 71% _ Expenditure and Position Summary Operating Expense Total Positions _ 80% Zoning verification letters completed within 10 days 53% 60% 70% Zoning case recommendations by staff that were upheld by City Council 96% 95% 95% Zoning adjustment hearing officer actions upheld by Board of Adjustment 81% 80% 80% 2004-05 2005-06 2006-07 $819,000 $722,000 $728,000 4.0 4.0 4.0 $338,000 Source of Funds: General _ General Plan amendment recommendations by staff upheld by City Council The Business Customer Service Center operating budget allowance of $728,000 is $6,000 or 0.8 percent more than 2005-06 estimated expenditures. $491,000 $332,000 Water 164,000 195,000 195,000 Wastewater 164,000 195,000 195,000 1 *Based on 10 months actual experience. 1 “Annual cycle General Plan amendments completed by target date” performance measure replaced by “General Plan Amendment recommendations by staff upheld by City Council” measure. 113 primarily due to the addition of a planner to provide assistance with General Plan amendments and zoning services to be funded through a fee increase. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $7,525,000 $7,245,000 $7,591,000 75.9 74.9 75.9 Source of Funds: $6,734,000 $6,368,000 $6,795,000 General Community Development 62,000 Block Grant Other Restricted 729,000 63,000 65,000 814,000 731,000 BUSINESS CUSTOMER SERVICE CENTER Program Goal The Business Customer Service Center provides technical assistance to customers in the development process, evaluates and promotes changes to the development process for efficient operations, and administers the Phoenix infill housing program. Budget Allowance Explanation Planning Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 Village planning committees supported 15 15 15 Zoning adjustment hearings scheduled within 25 working days of request 41% 35% 50% Formal rezoning pre-application meetings scheduled within 15 working days of request 54% 30% 50% Annual cycle General Plan amendments completed by target date 84% 71% _ Expenditure and Position Summary Operating Expense Total Positions _ 80% Zoning verification letters completed within 10 days 53% 60% 70% Zoning case recommendations by staff that were upheld by City Council 96% 95% 95% Zoning adjustment hearing officer actions upheld by Board of Adjustment 81% 80% 80% 2004-05 2005-06 2006-07 $819,000 $722,000 $728,000 4.0 4.0 4.0 $338,000 Source of Funds: General _ General Plan amendment recommendations by staff upheld by City Council The Business Customer Service Center operating budget allowance of $728,000 is $6,000 or 0.8 percent more than 2005-06 estimated expenditures. $491,000 $332,000 Water 164,000 195,000 195,000 Wastewater 164,000 195,000 195,000 1 *Based on 10 months actual experience. 1 “Annual cycle General Plan amendments completed by target date” performance measure replaced by “General Plan Amendment recommendations by staff upheld by City Council” measure. 113 HOUSING Budget Allowance Explanation Program Goal The Housing 2006-07 operating budget allowance of $88,929,000 is $21,248,000 or 31.4 percent more than 2005-06 estimated expenditures. The increase primarily reflects additional HOME Investment program funds and the carry forward of unspent allocations from prior years. Also reflected is the carry over of Community Development Block Grant (CDBG) and Housing Opportunities for Persons with AIDS (HOPWA) funds. The Housing Department provides and promotes diversified living environments for low-income families, seniors and persons with disabilities through the operation and leasing of assisted and affordable housing. Expenditure and Position Summary 2004-05 Operating Expense Total Positions Source of Funds: Public Housing HOME Grant Community Development Block Grant General Other Restricted City Improvement 2005-06 2006-07 $69,932,000 $67,681,000 $88,929,000 137.7 145.7 145.7 $59,572,000 $56,462,000 $60,638,000 7,388,000 7,749,000 24,095,000 969,000 172,000 1,768,000 63,000 2,450,000 177,000 771,000 72,000 3,329,000 181,000 615,000 71,000 Housing Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 Affordable housing units for families and individuals 1,359 1,359 1,359 Rental assistance provided for low-income residents in the private housing market 5,320 5,320 5,320 City-owned and operated public housing units for families and seniors 2,564 2,585 2,675 99% 100% 100% 98.4% 97.0% 98.0% Percent of Section 8 vouchers under lease Occupancy rate for public housing units *Based on 10 months actual experience. It is anticipated that in 2005-06 the number of conventional housing units will decrease by 78 units. These are the last remaining units in the HOPE VI project that will be demolished. However, the number of conventional units will increase by 99 units as units from Phase 1 of HOPE VI are leased. The total number of conventional units will be 1,516 at the end of 2005-06. In 2006-07, the number of city-owned and operated public housing units is expected to be 2,675 and reflects the sale of 10 scattered site units and the addition of 100 units from Phase 2 of HOPE VI being leased. 114 COMMUNITY AND ECONOMIC DEVELOPMENT Program Goal The Community and Economic Development Department creates or facilitates development activities that add or retain jobs, enhances city revenues and enhances the quality of life including business development in Sky Harbor Center and other non-redevelopment areas. Budget Allowance Explanation The Community and Economic Development operating budget allowance of $22,222,000 is $479,000 or 2.2 percent more than 2005-06 estimated expenditures. This increase is primarily due to the full year costs of moving the Phoenix Film Office from the Public Information Office, and normal inflationary increases. Also reflected in the budget is the move of the Workforce Investment Program to the department from the Human Services Department in 2005-06. These increases are partially offset by a reduction in Community Block Grant funding. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $7,868,000 $21,743,000 $22,222,000 36.0 114.0 114.0 $2,434,000 $2,827,000 $3,660,000 Source of Funds: General Community Development Block Grant 1,432,000 1,058,000 889,000 City Improvement 2,330,000 2,808,000 2,764,000 Sports Facilities 105,000 40,000 40,000 Aviation 349,000 250,000 68,000 Water 500,000 518,000 525,000 Convention Center 132,000 133,000 135,000 Federal & State Grant Trust 398,000 6,427,000 14,051,000 Community Reinvestment 165,000 111,000 70,000 23,000 _ 20,000 20,000 _ Other Restricted HSD Grant 7,551,000 Economic Development Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Projected jobs created/retained within the city of Phoenix as a result of department efforts 2005-06* 2006-07 7,509 5,080 6,314 12 10 12 N/A 11 4 Estimated sales tax generated from projects $21,627,088 $27,464,475 $26,761,266 Projected average annual salary for new jobs with companies newly located in Phoenix $39,618 $39,000 $41,000 2,612 1,048 2,500 1,855 2,300 1,850 Loan applications approved for the Expand Collateral Loan Assistance Program Loans approved for the New Markets Tax Credit Loan Program Individuals serviced in employment and training programs Adult Youth *Based on 10 months actual experience. 115 DOWNTOWN DEVELOPMENT OFFICE Budget Allowance Explanation Program Goal The Downtown Development Office operating budget allowance of $4,338,000 is $445,000 or 11.4 percent greater than 2005-06 estimated expenditures. The increase primarily results from increased payments to the Enhanced Municipal Services District, the completion of the Translational Genomics Research Institute (T-GEN) project and the transition of assigned staff to operating funds, a return to full staffing levels and normal inflationary increases. The Downtown Development Office creates or facilitates development activities that add or retain jobs, enhances city revenues and enhances the quality of life in the downtown redevelopment area. Expenditure and Position Summary Downtown Development Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Number of development/redevelopment projects in process Estimated construction value of projects (in millions) Number of residential units created Projected jobs created downtown as a result of department efforts 2005-06* 2006-07 32 35 39 $1,102,152 $1,461,400 $1,800,000 68 159 212 170 239 380 *Based on 10 months actual experience. The increase in number of jobs projected in 2006-07 will be due to the opening of the Arizona State University Downtown Phoenix Campus as well as the Arizona Biomedical Callaborative facility. 116 2004-05 Operating Expense Total Positions 2005-06 2006-07 $3,776,000 $3,893,000 $4,338,000 16.0 16.0 16.0 Source of Funds: General $3,273,000 $3,370,000 $3,815,000 Sports Facilities 102,000 106,000 106,000 Convention Center 401,000 417,000 417,000 NEIGHBORHOOD SERVICES Neighborhood Services _ Neighborhood Preservation Case Cycle Time Program Goal To preserve and improve the physical, social and economic health of Phoenix neighborhoods, support neighborhood self-reliance and enhance the quality of life of residents through community-based problem solving, neighborhood-oriented services and public/private cooperation. Budget Allowance Explanation The Neighborhood Services operating budget allowance of $49,949,000 is $21,360,000 or 74.7 percent more than 2005-06 estimated expenditures. The General Fund budget of $15,926,000 is $2,322,000 or 17.1 percent more than the 2005-06 estimated expenditures. The General Fund increase primarily reflects Calendar Days 100 75 67 64 64 64 2005-06 2006-07 55 50 25 0 2002-03 2003-04 2004-05 Fiscal Year T h e G ra ff it i B u st er s P ro gr a m re re p or t fr om m ov es gr a a n y ci ty re ff it i w it h in si d en t. 48 h ou rs of re ce iv in g a 117 the full year’s cost of the Graffiti Busters Program expansion approved in 2005-06, the carry forward of prior years’ unspent but committed Fight Back funds and normal inflationary increases. The increase in grant programs, including federal/state grants, HOME Investment Program and CDBG results from the carry forward of unspent grant funds, and a new allocation of HOME funds, partially offset by a reduction in the CDBG allocation for 2006-07. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $30,162,000 $28,589,000 $49,949,000 232.0 237.0 237.0 Source of Funds: General Community Development Block Grant $12,837,000 $13,604,000 $15,926,000 13,870,000 11,277,000 26,413,000 Federal & State Grant Trust 1,839,000 2,040,000 2,137,000 HOME Program Grant 1,563,000 1,586,000 5,023,000 53,000 82,000 100,000 _ _ 350,000 Other Restricted City Improvement Funds Neighborhood Services Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Residents who receive landlord/tenant counseling 2006-07 9,301 7,850 7,850 646 650 660 $24,212,193 $27,599,001 $32,027,223 43,960 53,500 60,000 Homeowner-occupied housing rehabilitation projects completed 677 577 519 Percent of neighborhood preservation cases resolved voluntarily 86% 86% 86% Neighborhood preservation average response time from first call to initial inspection for occupied/non-hazard cases (in calendar days) 11 11 11 Neighborhood preservation average response time from first call to initial inspection for vacant/non-hazard/other non-pre-notification cases (in calendar days) 6 6 6 Properties acquired/demolished/redeveloped for neighborhood revitalization purposes 72 171 196 Neighborhood cleanup/resident meetings facilitated Dollar value of infrastructure and development projects completed Sites where graffiti was removed through the Graffiti Busters Program *Based on 10 months actual experience. 118 2005-06* HOPE VI PROJECT Budget Allowance Explanation Program Goal The Hope VI Project 2006-07 gross operating budget allowance of $965,000 is $90,000 or 10.3 percent more than 2005-06 estimated expenditures. This increase reflects normal inflationary adjustments as well as costs associated with adding a 0.5 caseworker II and 0.5 clerk II to assist with the recently opened Community Training and Education Center. The operating budget also includes the conversion of a temporary accountant II position to regular status. The Hope VI Project will reconstruct the obsolete Matthew Henson public housing site and provide mixed-income home ownership and rental opportunities to residents, while providing supportive services to enhance self-sufficiency, and to encourage business development in the central city south area. Expenditure and Position Summary Operating Expense Total Positions 2004-05 2005-06 2006-07 $797,000 $875,000 $965,000 9.5 10.5 11.5 $797,000 $875,000 $965,000 Source of Funds: General (Gross*) *Gross costs are charged to the Hope VI federal grant and Conventional Housing funds. T h e H en so n V il la ge re d ev el op m en G ra n t a n d t a re a is be P im a st re et s. So fa r, tw ee n Se ve 60 fo rm er m or e th a n n re si d en ts . 11 0 fa m il ie th a n d 15 th a ve n u es T h is co m m m il li on , is s h a ve m ov and u n it y re vi a re su lt of ed in , in cl ta li za ti on a fe d er a l p a rt n er sh u d in g p ro je ct , va gr a n t a n d ip s. lu ed a t $1 p u bl ic , p ri 00 va te a n d n on p ro fi t 119 C en te r om m u n it y a ry va le C M t d te oo a -f ev re a n d a n el ,0 00 -s qu a gh t ro om T h e n ew 27 si u m , w ei a n m gy a bo a st s ck . n n in g tr a in d oo r ru 120 Community Enrichment The Community Enrichment Program Represents 11.6% of the Total Budget. PARKS AND RECREATION Program Goal The Parks and Recreation Department provides and maintains a diverse parks and recreation system available and accessible to all, which contributes to the physical, mental, social and cultural needs of the community and permits outlets that cultivate a wholesome sense of civic pride and social responsibility. The Community Enrichment program budget includes Parks and Recreation; Library; Golf; Phoenix Convention Center; Human Services; Education and Youth Programs; International and Sister Cities Programs; Rio Salado; Historic Preservation Office; and the Phoenix Office of Arts and Culture. Budget Allowance Explanation The 2006-07 Parks and Recreation operating budget allowance of $115,887,000 is $15,563,000 or 15.5 percent more than 2005-06 estimated expenditures. This increase is due the full year’s operating costs for facilities opened in 2005-06, operating costs for new or expanded facilities opening in Summer Recreation and After-School Programs _ Number of Participants Millions 8 2006-07 and normal inflationary adjustments. This increase also is due to the carry forward of funds for continued implementation of the city’s Rio Salado Dust Control Program. The budget provides for additional staff and operating costs to open and maintain new or improved park facilities ($4,359,000) constructed with Parks and Preserve Initiative funds, 2001 bond funds and other funds. These facilities include Desert West Park, 35th Avenue Community Learning Center, Phoenix Center North Building, Winship House, Tovrea Castle and Carraro Cactus Garden, Reach 11 Recreation Area, Dove Valley Park, park at Cave Creek and Tatum Road, Tramonto Park, Deem Hills Park, Stetson Valley Neighborhood Park, Washington Adult Center, Pecos Park Community Center, park at 31st Avenue and Roeser Road, Laveen Basin, Laveen Farms Park, 7.1 7.1 7.2 7.2 7.3 2002-03 2003-04 2004-05 2005-06 2006-07 6 4 2 0 Fiscal Year 121 and Rio Salado Habitat. The budget also provides staff and other operating costs for street landscaping maintenance of new streets citywide. The budget also includes the addition of a management assistant position to perform department and citywide program and project planning for the Parks and Open Space Impact Fee program. The costs of this position will be charged to the Impact Fee Program administrative fee revenue. Also included in the budget is the conversion of two temporary account clerks to regular status. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $92,207,000 $100,324,000 $115,887,000 1,513.2 1,530.4 1,611.9 Source of Funds: General $86,369,000 $93,379,000 $108,000,000 Other Restricted 2,233,000 3,362,000 3,573,000 City Improvement 1,398,000 1,494,000 1,959,000 Grant 1,621,000 1,501,000 1,746,000 Convention Center 317,000 311,000 319,000 Parks and Preserves 162,000 167,000 180,000 Golf 107,000 110,000 110,000 Parks and Recreation Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 Acres maintained:** Developed parks Undeveloped park land Parkways and medians Preserves/desert parks 4,374 3,871 885 29,353 4,478 3,975 896 29,353 4,634 3,975 1,015 29,353 Cost per acre for annual maintenance: Developed parks Undeveloped park land Preserves/desert parks $6,551 $1,798 $181 $6,919 $1,893 $196 $7,333 $2,189 $227 2.88 3.01 3.03 Number of volunteer hours 195,000 250,000 250,000 At-Risk-Youth participants 225,000 225,000 225,000 Aquatic participants 878,000 800,000 800,000 29,202,000 31,177,000 33,031,000 Acres of developed parks per 1,000 population All other recreation services participants*** *Based on 10 months actual experience. **Figures include newly acquired parcels, changes in undeveloped park sites to developed facilities and other adjustments necessary to accurately reflect the total acreage under the department’s control. ***Excludes summer and after-school, at-risk-youth, aquatics and golf participants. 122 LIBRARY Library _ Annual Circulation per Capita Program Goal The Library provides information and resources that are relevant, accessible and responsive to the intellectual needs and interests of the community. Items Circulated 10 8.6 8.3 8.4 2003-04 2004-05 8.7 9.1 8 6 Budget Allowance Explanation The Library 2006-07 budget allowance of $38,090,000 is $4,045,000 or 11.9 percent more than 2005-06 estimated expenditures. The increase is largely due to the addition of operating costs for the new Cesar 4 2 0 2002-03 2005-06 2006-07 Fiscal Year T h e P h oe n ix P u bl ic L ib ra ry te en fo r te en s w ce n te rs a re h er e th ey ca n re a d , a u n iq u e fu n le a rn sp a ce , d es d o h om ew in g en vi ro ig n ed by te or k or ca tc n m en t. en s, h u p w it h ea ch ot h er in a 123 Chavez regional library scheduled to open in July 2006 as well as normal inflationary increases. Library Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: Expenditure and Position Summary 2004-05 2004-05 2005-06 Number of library visitors served Operating Expense Total Positions 4,276,266 4,366,665 4,758,665 420.0 420.0 436.5 Number of electronic visits 10,869,369 12,911,000 14,848,000 $30,105,000 $33,071,000 $36,915,000 Annual budget for purchase of library materials $5,390,795 $5,883,613 $6,197,088 Grant 159,000 373,000 404,000 Other Restricted 429,000 601,000 771,000 Cost per library visitor served $7.18 $7.80 $8.00 2,456,990 9,807,477 2,493,907 10,570,256 2,531,316 11,432,256 $2.50 $2.61 $2.73 Circulation per library visit 2.87 2.99 2.93 Collection turnover rate 5.63 5.39 5.45 68.7% 70.0% 72.0% 2,178,625 2,424,760 2,560,760 114,260 111,054 113,275 Annual circulation per capita 8.63 8.94 9.29 Number of hours open for public service per week 886 924 979 Number of items circulated: Central 13 Branches Cost per item circulated Library card registration as a percentage of population Number of books in stock Number of telephone reference requests answered *Based on 10 months actual experience. 124 2006-07 $30,693,000 $34,045,000 $38,090,000 Source of Funds: General 2005-06* 2006-07 GOLF City Golf Courses _ Rounds of Golf Played Program Goal The Golf Program provides quality golf services 365 days a year on a self-sustaining basis to residents and visitors. Thousands 600 500 400 Budget Allowance Explanation 395 347 326 2003-04 2004-05 350 354 2005-06 2006-07 300 The Golf Program 2006-07 operating budget allowance of $7,889,000 is $1,339,000 or 20.4 percent more than the 2005-06 estimated expenditures. This is due primarily to full year costs related to the transitioning of the Maryvale, Papago and Encanto 9- and 18-hole pro shops from contract to city operations. Additional revenues from golf cart rentals, merchandise sales, increased rounds and member card sales are anticipated to offset these costs. Golf Major Performance Measures and Service Levels Expenditure and Position Summary The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Operating Expense Total Positions 2005-06 Grant 100 0 2002-03 Fiscal Year 2006-07 2004-05 $5,825,000 $6,550,000 $7,889,000 115.5 140.0 140.0 Source of Funds: Golf 200 $5,820,000 $6,550,000 $7,889,000 _ _ 5,000 Acres of golf courses maintained 2005-06* 2006-07 922 922 922 Annual cost of maintenance per acre $5,216 $5,721 $6,397 Cost per participant $17.84 $18.72 $22.29 *Based on 10 months actual experience. 125 PHOENIX CONVENTION CENTER Program Goal The Phoenix Convention Center Department encourages organizations to hold conventions and trade shows in Phoenix, and facilitates activities that expand the leisure time activities for the general public by providing diversified entertainment and cultural programs in downtown Phoenix. Budget Allowance Explanation The Phoenix Convention Center operating budget allowance of $38,554,000 is $2,877,000 or 8.1 percent more than 2005-06 estimated expenditures. The increase is primarily the result of new capital facility operating costs, service enhancements and normal inflationary cost increases. The budget also includes the carry forward of 2005-06 funds for renovations at Symphony Hall and the south building of the convention center. The budget provides for staff and other resources to manage the state-of-the-art conference center in the new west building, implement a new Guest Experience Program, and expand advertising to the non-convention market. Also included is funding for staff to provide improved contract management, technical support and expanded warehouse operations. The budget also includes $562,000 for contractual and commodity costs associated with the new west building. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2006-07 $32,299,000 $35,677,000 $38,554,000 205.4 209.4 214.4 Source of Funds: Convention Center $24,557,000 $31,630,000 $34,493,000 General 1,863,000 1,990,000 1,995,000 City Improvement 1,679,000 1,557,000 1,556,000 Sports Facilities 4,200,000 500,000 500,000 a ge th e es to m a n er re so u rc h ot P h oe n ix d e n th a il d in g of es fo r st a ff bu d t vi es ro w p t 7 bu d ge in th e n ew T h e 20 06 -0 n ce ce n te r rt co n fe re a eth f-o st a te C en te r. C on ve n ti on 126 2005-06 Phoenix Convention Center Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* $170.3 $157.3 $174.2 Number of conventions 49 41 57 Number of local public shows 39 48 34 Percent square feet occupancy (all events) 71% 70% 53% Number of theatrical performances 235 381 385 200,372 294,579 314,350 Total parking revenue (millions) $6.9 $6.9 $8.9 Revenue per parking space $920 $920 $1,186 Operating expense per parking space $674 $661 $683 Estimated direct spending impact from conventions (millions) Total theater attendance 2006-07 *Based on 10 months actual experience. Economic benefit of events may vary with the size, duration, type and length of event. Estimated direct spending impact is reported by the Greater Phoenix Convention and Visitors Bureau. Estimated direct spending impact and the number of conventions is increasing in 2006-07 due to industry interest in the new West Building. Percent square feet occupancy is decreasing due to the demolition of the North Building and the resulting inability to host large conventions and trade shows in a single continuous space. Total parking revenue and revenue per parking space is increasing in 2006-07 due to increased rates. 127 HUMAN SERVICES Human Services _ Meals Served by Senior Nutrition Program Thousands 600 583 584 598 595 Program Goal 600 500 The Human Services Department promotes self-sufficiency by providing a wide array of services that foster the economic, physical and social well-being of residents. 400 300 Budget Allowance Explanation 200 The Human Services operating budget allowance of $62,336,000 is $1,896,000 or 3.0 percent less than 2005-06 estimated expenditures. This reduction is primarily due to an accounting change related to Continuum of Care grant funds. These federal funds will now be paid directly to service providers. This decrease also 100 0 2002-03 2003-04 2004-05 Fiscal Year 2005-06 2006-07 r n se li n g fo cy a n d C ou si d en ts ca vo d A h oe n ix n ix re t’ s PA C E (P ic es to P h oe w or k se rv D ep a rt m en se es ca ic d rv n Se a n li n g The Huma fe rs co u n se ro gr a m of E ld er ly ) p ge of 60 . ov er th e a 128 reflects the carry forward of prior years’ unspent CDBG funds in 2005-06. The reduction in grants is partially offset by additional grant funding from the Department of Economic Security for utilities assistance, normal inflationary adjustments and budget additions. The budget includes funding to open the senior center at the Pecos Community Center in Ahwatukee. This relocation and expansion of the Ahwatukee Senior Center, funded in the 2001 Bond Program, will enable the center to become fully functional as a multigenerational senior center. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $72,587,000 $64,232,000 $62,336,000 566.4 493.0 Human Services Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 Number of children in Head Start 3,764 3,863 3,979 Number of students receiving school-based services 2,581 2,500 2,500 Community Services Division unduplicated households served 12,921 13,000 17,000 174,146 157,195 144,600 514 67 645 82 645 82 Persons served at the winter overflow shelter 3,171 4,723 4,700 Senior clients receiving daily meals 2,470 2,620 2,640 603 650 650 Small Business 73 75 75 Summer Youth 1,072 1,050 900 41 32 32 Number of community volunteer hours managed by Human Services staff Average monthly downtown homeless population: Sheltered Unsheltered 500.8 Source of Funds: General Human Services Grants $22,257,000 $24,582,000 $27,111,000 47,903,000 36,958,000 Community Development Block Grant 1,116,000 32,839,000 Daily average number of Reserve-a-Ride passengers 1,521,000 1,173,000 Federal Grants 457,000 315,000 260,000 City Improvement 226,000 266,000 466,000 Youthbuild *Based on 10 months actual experience. Water 250,000 250,000 250,000 Transit 2000 156,000 156,000 Public Housing 124,000 103,000 156,000 _ Other Restricted 98,000 81,000 81,000 Unduplicated households assisted by the Community Services Division is projected to increase due to additional grant funding from the Department of Economic Security. Decrease in number of community volunteer hours managed by staff continues to decrease due to reduced Local Law Enforcement Block Grant (LLEBG) funding for youth programs and lower volunteer participation at senior centers. Increase in number of persons served at winter shelter is a result of increased funding from Federal Emergency Management Agency (FEMA) and Emergency Shelter Grants (ESG) as well as increased demand. Number of senior clients receiving daily meals has increased over 2004-05 levels due to expanded space at Devonshire, Westside and Shadow Mountain senior centers. Summer youth activities has been lowered due to reduced CDBG funding and uncertain state funding. Youthbuild projections reflect the difficulty in recruiting and retaining participants. 129 EDUCATION AND YOUTH PROGRAMS INTERNATIONAL AND SISTER CITIES PROGRAMS Program Goal RIO SALADO Program Goal Program Goal The Education and Youth Programs function facilitates communication, information and coordination between city departments and schools to better serve the youth of our community. International and Sister Cities Programs create exceptional people-to-people opportunities for Phoenix residents, businesses and organizations to experience and understand other cultures through international partnerships. Budget Allowance Explanation The Education and Youth Programs operating budget allowance of $1,135,000 is $85,000 or 8.1 percent more than 2005-06 estimated expenditures. The budget reflects normal inflationary increases, and a carry over of unspent funds for the Focus on Results program. Budget Allowance Explanation The Rio Salado 2006-07 operating budget allowance of $150,000 is $8,000 or 5.6 percent more than the 2005-06 estimated expenditures. This increase reflects normal inflationary adjustments. Budget Allowance Explanation The International and Sister Cities Programs 2006-07 operating budget allowance of $608,000 is $59,000 or 10.7 percent more than 2005-06 estimated expenditures. This increase is the result of normal inflationary increases and a return to full staffing levels. Expenditure and Position Summary The Rio Salado Office coordinates the Phoenix Rio Salado Habitat Restoration Project and directs the city’s efforts in restoring the native wetland and riparian habitats along the banks of the Salt River. Expenditure and Position Summary Operating Expense 2004-05 2005-06 2006-07 Total Positions Expenditure and Position Summary Operating Expense Total Positions $980,000 $1,050,000 $1,135,000 5.8 5.8 5.8 General Other Restricted $662,000 $797,000 $897,000 318,000 253,000 238,000 Total Positions 2006-07 $517,000 $549,000 $608,000 5.0 5.0 5.0 $517,000 $549,000 $608,000 Source of Funds: General 130 2005-06 2005-06 2006-07 $126,000 $142,000 $150,000 1.0 1.0 1.0 $126,000 $142,000 $150,000 Source of Funds: General Operating Expense Source of Funds: 2004-05 2004-05 HISTORIC PRESERVATION OFFICE Historic Preservation Office Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: The Historic Preservation Office works to support the protection, preservation and designation of historic resources throughout the city. The office also works with other city departments to encourage projects that are sensitive to historic building and district character. 2004-05 Number of design reviews performed on building permits in historic districts Number of city grants awarded for historic rehabilitation projects 2005-06* 2006-07 417 422 430 32 36 38 *Based on 10 months actual experience. Budget Allowance Explanation The Historic Preservation Office operating budget allowance of $572,000 is $60,000 or 11.7 percent more than 2005-06 estimated expenditures. This increase is primarily due to the transfer to the general fund of staff time previously charged to declining 1988 bond funds, and normal inflationary increases. Expenditure and Position Summary Operating Expense Total Positions 2004-05 2005-06 2006-07 $475,000 $512,000 $572,000 6.0 6.0 6.0 $475,000 $512,000 $572,000 Source of Funds: General T h e ci ty 's H is to ri c P re se rv a ti on a n d en h a n O ff ic e w or ce h is to ri c ks to p ro te n ei gh bo rh in P h oe n ix ct oo d s, bu il . d in gs a n d si te s 131 PHOENIX OFFICE OF ARTS AND CULTURE Program Goal The Office of Arts and Culture supports the development of the arts and cultural community in Phoenix, and seeks to raise the level of awareness and participation of city residents in the preservation, expansion and enjoyment of arts and culture. Budget Allowance Explanation The Office of Arts and Culture operating budget allowance of $2,376,000 is $141,000 or 6.3 percent more than 2005-06 estimated expenditures. This reflects normal inflationary increases. The budget includes $721,000 dedicated to the matching grant program. The remaining funding represents support staff and operating expenses. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2006-07 $2,773,000 $2,235,000 $2,376,000 12.5 12.5 12.5 Source of Funds: General Local Transportation Assistance Grant Other Restricted re et sc a p e, de n e R oa d St li se a B g to a d d sh a -w in n in a s d es ig n ed a rt of a w , 05 T h e a w a rd 20 d er s a s p in su m m er a n d bu s ri co m p le te d d fr om r w a lk er s fo se li n e R oa a rt B fo g m n lo a t a n d co en m et im p ro ve la rg er st re s. 40 th st re et to Se ve n th 132 2005-06 $1,174,000 $1,195,000 $1,305,000 106,000 106,000 106,000 1,243,000 684,000 715,000 250,000 250,000 250,000 Phoenix Office of Arts and Culture Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance. 2004-05 2005-06* 2006-07 Grant applications processed to support arts activities through schools and nonprofit organizations 141 126 147 Grant awards administered to support arts activities through schools and nonprofit organizations 112 116 115 Percent-for-art projects to enhance city capital improvement projects with artwork 58 64 60 Local artists/arts organizations training workshops 23 20 20 Arts management consulting projects coordinated by Business Volunteers for the Arts 43 50 50 *Based on 10 months actual experience. The number of grants applications processed and administered will vary with the number of applicants and the size of the grants awarded. The number of percent-for-art projects administered varies with capital improvement project activity and the scope of the individual projects undertaken. 133 fr om a u en t fl ow u se th e ef fl ds re n d la n a et w to re cl a im n st ru ct ed is d es ig n ed se ri es of co ct a je g n ro si P u s io la n t T h e Tr es R ea tm en t p . st ew a te r tr e Sa lt R iv er th of h n ea rb y w a tc re st e il -m n ve a lo n g a se 134 Environmental Services The Environmental Services Program Represents 15.9% of the Total Budget. The Environmental Services program budget includes Water Services, Solid Waste Management, Public Works and Environmental Programs. WATER SERVICES Budget Allowance Explanation Program Goal The Water Services operating budget allowance of $232,037,000 is $23,188,000 or 11.1 percent more than 2005-06 estimated expenditures. The increase is primarily due to contract operating costs for the new Lake Pleasant Water Treatment Plant, increases in chemical prices, normal inflationary increases and budget additions. The budget also includes the carry forward of 2005-06 funds for the Enhanced Water Conservation Program, an energy The Water Services Department is responsible for the Water and Wastewater Programs. The Water Program provides a safe and adequate domestic water supply to all residents in the Phoenix water service area. The Wastewater Program assists in providing a clean, healthy environment through the effective management of all water borne wastes generated within the Phoenix drainage area. Water _ Total Water Production Billions of Gallons 137.0 140 135 126.8 130 125 121.4 124.3 118.4 120 115 110 105 100 2002-03 2003-04 2004-05 2005-06 2006-07 Fiscal Year Increase due to normal population growth and an increase in production for the City of Mesa. 135 management system for the laboratory, and information technology improvements. The budget adds staff to monitor the highly complex Lake Pleasant Water Treatment Plant contract and provides funds for increased technical support for water technology applications. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $190,524,000 $208,849,000 $232,037,000 1,355.1 1,416.1 1,417.1 Source of Funds: Water Wastewater $121,874,000 $135,462,000 $152,735,000 68,536,000 73,200,000 79,195,000 City Improvement 19,000 85,000 _ Other Restricted 95,000 102,000 107,000 a te r d ri n ki n g w th a n e su p p ly of er bl a w li lo re st a fe ty a t a co y p ro vi d es sa tl d en n st a si h n r h ea lt P h oe n ix co a n d a rd s fo T h e ci ty of a ss es a ll st rp su or ts th a t m ee th w es t. in th e So u m os t ci ti es 136 Water Services Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Gallons of water produced systemwide (in billions) 2005-06* 2006-07 118.4 126.8 137.0 Gallons of wastewater treated (in billions) 70.0 71.4 70.0 Gallons of water supplied to consumers per $.01 4.54 4.27 4.00 Miles of wastewater collection lines cleaned 1,294 1,484 1,488 Laboratory analyses and analytic screenings conducted in-house 84,116 90,381 90,381 Telephone calls: Received Percent answered 981,967 94% 996,697 96% 1,001,606 96% Customer payments processed by customer services staff (excludes mailed payments) 985,419 1,000,200 1,005,127 6,265 5,850 5,850 Percent of water leaks repaired within the 5-day standard 94% 96% 98% Average gallons of water used per capita per day 192 198 198 Emergency repairs to water distribution system *Based on 10 months actual experience. Gallons of water produced systemwide (in billions) increased due to population increases and increased demand from the city of Mesa. Gallons of water supplied per $.01 decreased as a result of water rate increases needed to support debt service for new treatment facilities and replacement of existing infrastructure. 137 SOLID WASTE MANAGEMENT Program Goal The Solid Waste Management Program assists in providing a safe and aesthetically acceptable environment through effective, integrated management of the solid waste stream, including collection, disposal, source reduction and recycling activities. Budget Allowance Explanation distances, increased costs for procuring solid waste containers and refuse barrels, fuel price increases and other normal inflationary cost increases. Also contributing to the increase is the carry forward of unspent 2005-06 funds for vehicles, software upgrades and furniture to be purchased in 2006-07. The budget also includes funding for a security guard at the 27th Avenue Transfer Station to improve site security. Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2006-07 $78,008,000 $84,143,000 $103,074,000 498.0 519.0 520.0 Source of Funds: Solid Waste General The 2006-07 Solid Waste Management operating budget allowance of $103,074,000 is $18,931,000 or 22.5 percent more than 2005-06 estimated expenditures. This increase is due to a new long haul contract that reflects increased hauling n si d en ts ca er s a n d re om st cu , ll er fi sf ek L a n d a y Tr a n Sk u n k C re or th G a te w u re of th e th e n ew N os t a cl e es th bl a g F ol lo w in a n d re cy cl of f ga rb a ge 06 . n ow d ro p Ja n . 2, 20 ed en h ic h op St a ti on w 138 2005-06 $77,124,000 $83,380,000 $102,048,000 884,000 763,000 1,026,000 Solid Waste — Recyclable Material Processed Thousands of Tons 150 125 117.0 118.0 2002-03 2003-04 124.0 125.0 127.0 2004-05 2005-06 2006-07 100 75 50 25 0 Fiscal Year _______________________________________________________________________ Solid Waste Management Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 Residential households served with twice per week contained solid waste and recyclable material collections 355,345 366,000 368,000 Tons of residential recyclable materials collected 124,121 125,000 126,500 Tons of total solid waste disposed at city landfills** 930,000 1,000,000 1,170,000 Tons of solid waste from city residences disposed** 650,000 675,000 800,000 *Based on 10 months actual experience. **FY 2004-05 tonnages were lower due to reciprocal agreements with private landfill operators that will end in FY 2005-06. 139 PUBLIC WORKS Program Goal The Public Works Department provides mechanical and electrical maintenance and energy conservation services for city facilities, and procures, manages and maintains the city’s fleet of vehicular equipment. Budget Allowance Explanation The 2006-07 Public Works operating budget allowance of $29,192,000 is $5,252,000 or 21.9 percent more than 2005-06 estimated expenditures. The increase is primarily due to normal inflationary adjustments and reduced staff vacancies. In addition, purchases of fleet vehicles and various facility repair and improvement projects were not completed in 2005-06 and were carried forward to 2006-07. Other supplemental increases included in the 2006-07 operating budget reflect funding for staff and other operating costs for the citizen service center located at the Pecos Community Center scheduled to open in December 2006, a mechanic to support the maintenance of additional fire apparatus, and staff additions to the alarm services team to support new alarm systems in Public Transit and Water Services departments. Public Works Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 Square feet of building space maintained Facility service requests completed Fleet vehicles per mechanic Units of equipment for which fleet management is provided Annual miles of fleet vehicle utilization (in millions) *Based on 10 months actual experience. 140 2005-06* 2006-07 7,342,987 8,035,000 8,101,000 19,292 21,174 21,400 38.5 38.3 38.5 6,441 6,794 6,875 50.0 52.0 52.0 Expenditure and Position Summary 2004-05 Operating Expense Total Positions 2005-06 2006-07 $23,746,000 $23,940,000 $29,192,000 501.0 498.0 505.0 Source of Funds: General City Improvement Other Restricted $17,907,000 $17,062,000 $21,222,000 5,326,000 5,371,000 6,375,000 513,000 1,507,000 1,595,000 ENVIRONMENTAL PROGRAMS Environmental Programs Number of Days Exceeding Air Quality Standards Program Goal The Office of Environmental Programs provides coordination and monitoring for the city’s environmental programs and activities, and develops and implements regulatory policies and programs. Days 40 32 30 Budget Allowance Explanation 20 The 2006-07 Office of Environmental Programs operating budget allowance of $1,911,000 is $37,000 or 2 percent more than the 2005-06 estimated expenditures. This increase is the result of normal inflationary increases partially offset by a reduction in grant funds. Operating Expense 2005-06 N/A 2001 2002 N/A N/A 2003 2004 2005* Calendar Year 2006-07 $1,445,000 $1,874,000 $1,911,000 Total Positions 15.0 15.0 15.0 Source of Funds: General 0 N/A The number of days exceeding standards in 2005 reflects a federally required change from a one hour to an eight hour standard. Comparable data is not available for prior years. Expenditure and Position Summary 2004-05 10 Environmental Programs Major Performance Measures and Service Levels $1,216,000 $1,278,000 $1,474,000 199,000 210,000 237,000 Capital Construction Water 15,000 101,000 100,000 Federal & State Grant 15,000 285,000 100,000 The following significant performance measures and service trends will be achieved with the 2006-07 budget allowance: 2004-05 2005-06* 2006-07 1,102 1,800 1,000 Number of facility assessments and technical assistance visits conducted** 89 75 65 Number of brownfield projects implemented 19 19 21 97% 96% 96% 42 65 65 Employees receiving training on environmental issues Overall customer satisfaction with technical and regulatory assistance Pollution prevention and hazardous materials/hazardous waste compliance assistance provided*** *Based on 10 months actual experience. **Departments are assessed on a cyclical basis. The annual variance reflects different departments which have a varying number of facilities. ***Assistance is generally provided on a customer driven basis and can vary based on department staff turnover and specific situations. 141 Contingencies The Contingency Fund (also commonly referred to as a “rainy day fund”) provides for revenue shortfalls and unanticipated costs that may occur after the budget is adopted. The possibility of natural disasters, public or employee safety emergencies or up-front costs for productivity opportunities necessitates the need for adequate contingency funds. Use of these contingency funds requires the recommendation of the city manager and City Council approval. Then, as part of a five-year forecast review in May 2005, the City Council expressed interest in increasing the contingency fund to 3.5 percent if the local economy performed better than staff estimates. The 2006-07 budget increases the contingency amount by $4,120,000 and also increases the percentage to 2.7 percent of the General Fund. The following table also shows set-aside amounts. Set-asides have been used in the past to prepare for known future costs such as declining grant funding and new capital project operating costs. No set-asides are proposed for 2006-07. Comparison of Annual Budget for General Fund Contingency Amount to Operating Expenditures (000’s) GENERAL FUND CONTINGENCY The budget reflects an increase in the General Fund contingency from the 2005-06 budgeted level of $24,740,000 to $28,860,000. This increases the General Fund contingency to 2.7 percent of operating expenditures. In 1995-96, the City Council adopted a policy to, over time, as funding allowed, increase the contingency amount to 3 percent of operating expenditures. The following table shows the progression from the 2.5 percent level in 1995-96 to 3 percent in 2000-01. In 2003-04, a budget reduction returned the base funding level to 2.5 percent. Beginning in 2004-05 the City Council once again began increasing the Contingency Fund, over time, back to a 3 percent level. Fiscal Year General Fund Operating Expenditures* Contingency and Set-Aside Amounts Percent of Operating Expenditures 1995-96 $633,964 $15,625 3,000 2.5% 1996-97 674,619 17,318 1,320 2.6% 1997-98 711,266 19,000 _ 2.7% 1998-99 748,937 21,000 1,150 2.8 1999-00 797,633 23,408 1,800 2.9 2000-01 883,196 26,780 4,600 3.0 2001-02 887,644 26,550 7,600 3.0 2002-03 912,192 27,190 3,652 3.0 2003-04 912,583 22,700 _ 2.5 2004-05 925,603 23,800 _ 2.6 2005-06 965,936 24,740 _ 2.6 2006-07 1,083,000 28,860 2.7 *Prior to 2001-02, Development Services operating expenditures were included in the General Fund contingency calculation. A separate contingency has been established in that fund. 143 OTHER FUND CONTINGENCIES Similar to the General Fund, other funds also include contingency amounts. The contingency amounts and percentages of total operating expenditures vary to accommodate differences in the volatility of operations and revenues. Use of these amounts requires City Council approval. The following table shows the contingency amount for each of the other funds. 2006-07 Other Fund Operating Expenditure and Contingency Amount (000’s) Fund Transit 2000 Contingency Amount Percent of Operating Expenditures $115,625 $ 14,500 64,416 6,000 9.3 Aviation 206,869 10,000 4.8 Water 185,365 30,000 16.2 Wastewater 94,993 14,821 15.6 Solid Waste 108,048 6,000 5.6 41,146 5,000 12.2 8,049 50 0.6 24,590 733 Development Services Convention Center Golf Public Safety Enhancement 144 Operating Expenditures 12.5% 3.0% Debt Service Debt service expenditures include payments of principal, interest, sinking fund contributions, costs of issuance and bond reserve requirements for bonds issued. The debt service allowance in 2006-07 for existing debt and future bond sales is $705,485,000. As shown in the following chart, debt service payments including bond issuance costs are funded by Secondary Property Tax, Water, Aviation, Wastewater, City Improvement, Arizona Highway User Revenue, Convention Center and Solid Waste funds. Other funding sources include Sports Facilities, Golf and Grant funds. City Improvement includes $67.6 million in nonprofit corporation bonds debt service payments funded by general and Transit 2000 sales tax funds. Secondary property tax shown in the pie chart above represents the annual tax levy for debt service and related interest earnings. Types of Bonds Issued and Security Under Arizona law, cities are authorized to issue voter-approved general obligation, highway user revenue and utility revenue bonds. For the city of Phoenix, this includes property tax-supported bonds and revenue bonds (such as water revenue and airport revenue bonds). The city’s general obligation bonds are “full faith and credit” bonds. This means they are secured by a legally binding pledge to levy property taxes without limit to make annual bond principal and interest payments. Water and airport revenue bonds are secured by a pledge of these enterprises’ net revenues (revenues net of operation and maintenance expenses) and do not constitute a general obligation of the city backed by general taxing power. Highway user revenue bonds are secured 2006-07 Debt Service Others 2.2% Solid Waste 3.2% Aviation 35.5% Wastewater 10.8% Secondary Property Tax 17.2% Convention Center 2.6% Water 14.4% by state-shared gas taxes and other highway user fees and charges and also are not general obligations of the city. Debt Management In general, the city has used general obligation bonds to finance capital programs of general government (non-enterprise) departments. These include programs such as fire protection, police protection, libraries, parks and recreation, mountain preserves and storm sewers. The debt service on these bonds is paid from the secondary property tax levy. By state law, the city can only use its secondary property tax levy to pay principal and interest on long-term debt. To finance the capital programs of enterprise departments, the city has made substantial use of revenue bonds secured by and repaid from the revenues of these enterprises. In the past, the city also has used general obligation bonds for water, airport, sanitary sewer and solid waste purposes when deemed appropriate. However, these bonds are repaid from the revenues of these enterprises, not from property taxes or other general revenues. AHUR 4.4% City Improvement 9.7% The city’s policy of servicing bonds issued for enterprise purposes with enterprise revenues (for both revenue and general obligation bonds) is viewed favorably by municipal bond analysts. This practice permits the city to maintain a low-to-moderate debt burden on the property tax base. This debt burden is a key measure evaluated by analysts to assess the city’s financial strength. Since the 1950s, the city has used a community review process to develop and acquire voter approval for general obligation bond programs. To prepare for the special bond election held on March 14, 2006, the Mayor and the City Council appointed the 2006 Citizens’ Bond Committee composed of nearly 700 members to review the city’s fiscal capacity, capital facility needs and operating and maintenance costs of needed facilities. This committee recommended an $878.5 million bond program to the voters which assumed a continuation of the city’s current property tax rate of $1.82 per $100 of assessed valuation. 145 As a result of the efforts of this committee, the voters approved all $878.5 million of recommended bond authorizations in the March 14, 2006 special election. These authorizations provided funding to construct capital improvements in the following areas: ■ Police and Fire Protection ■ Police, Fire and Computer Technology ■ ■ Education Facilities Bond Ratings ■ Library Facilities ■ Street Improvements ■ Storm Sewers ■ Senior Facilities ■ Cultural Facilities The city’s bonds are rated favorably by the major bond rating agencies, Moody’s Investors Service and Standard and Poor’s. The city’s general obligation bonds are rated Aa1 and AA+ respectively. These ratings are half of a rating category below each agency’s highest rating. Maintaining high bond ratings has resulted in a broader market for the city’s bonds and lower interest costs to the city. The following table is a statement of the city’s bonded indebtedness as of April 1, 2006. ■ Affordable Housing Neighborhood Revitalization Parks, Recreation and Mountain Preserves Statement of Bonded Indebtedness General Obligation Bonds (In Thousands of Dollars) (1) Purpose Non-Enterprise Revenue General Supported General Obligation Obligation Bonds Bonds Various Airport Sanitary Sewer Solid Waste Water Public Housing Street and Highway $1,111,027 _ _ _ _ _ _ $ Subtotal Less: Restricted Funds Direct Debt Less: Revenue Supported Net Debt _ Total General Obligation Bonds Revenue Bonds _ Total Bonds $ 24,375 66,499 39,910 121,296 _ _ $1,111,027 24,375 66,499 39,910 121,296 _ _ 1,725 170,771 $1,111,027 61,690 66,499 39,910 121,296 1,725 170,771 $1,111,027 (265,974) ) $252,080 _ $1,363,107 (265,974) $209,811 _ $1,572,918 (265,974) $845,053 _ $252,080 (252,080) $1,097,133 (252,080) $209,811 (209,811) $1,306,944 (461,891) $ 845,053 $ $ 845,053 $ _ 37,315 _ _ _ _ $ 845,053 (1) These figures do not include the outstanding principal amounts of certain general obligation bonds, water revenue bonds, and street and highway user revenue bonds that have been refunded or the payment of which has been provided in advance of maturity. The payment of the debt service requirements on such bonds (including redemption premiums where applicable) is secured by federal securities that were purchased with proceeds of the refunding issues and other available monies that are held in irrevocable trusts and special investment funds held by the city. 146 Debt Limitation Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt for combined water, sewer, lighting, park, open space and recreational purposes may not exceed 20 percent of a city’s net secondary assessed valuation. Outstanding general obligation bonded debt for all other purposes may not exceed 6 percent of a city’s net secondary assessed valuation. Unused borrowing capacity as of April 1, 2006 based upon 2005-06 assessed valuation is shown in the following tables. Debt Burden Debt burden is a measurement of the relationship between the debt of the city supported by its property tax base (net direct debt) to the broadest and most generally available measure of wealth in the community: the assessed valuation of all taxable property and the assessed valuation adjusted to reflect market value. In addition, net debt can be compared to population to determine net debt per capita. The city makes these comparisons each time it offers bonds for sale. They are included in the official statements (bond prospectuses) that are distributed to prospective investors. The following table provides debt burden ratios as of April 1, 2006. The city’s debt burden remains in the low-to-moderate range. This means the amount of net debt supported by the city’s property tax base is moderate relative to the value of that tax base. The city has considerable bonded debt outstanding. However, the use of revenue bonds for enterprise activities and enterprise-supported general obligation bonds, in combination with a well-managed, property tax-supported bond program, has permitted the maintenance of a low-to-moderate debt burden. Water, Sewer, Lighting, Parks, Open Space and Recreational Purpose Bonds 20% Constitutional Limitation Direct General Obligation Bonds Outstanding $2,283,923,814 (817,086,934) Unused 20% Limitation Borrowing Capacity $1,466,836,880 All Other General Obligation Bonds 6% Constitutional Limitation Direct General Obligation Bonds Outstanding Less: Principal Redemption Funds held in Restricted Fund as of April 1, 2005 $685,177,144 $546,020,000 (265,973,680) Direct General Obligation Bonds Outstanding (280,046,320) Unused 6% Limitation Borrowing Capacity $405,130,824 Net Direct General Obligation Bonded Debt Ratios Per Capita Debt Secondary Pop. Est. as of Assessed April 1, 2006 Valuation (1,513,740) ($10,489,921,645) Full Cash Valuation ($83,439,807,440) Direct General Obligation Bonded Debt Outstanding as of April 1, 2006 $708.41 9.61% 1.19% Net Direct General Obligation Bonded Debt Outstanding as of April 1, 2006 %545.65 7.40% 0.92% 147 General Government Nonprofit Corporation Bonds In addition to bonded debt, the city uses nonprofit corporation bonds as a financing tool. This form of financing involves the issuance of bonds by a nonprofit corporation for city-approved projects. The city makes annual payments equal to the bond debt service requirements to the corporation. The city’s payments to the corporation are guaranteed by a pledge of excise taxes or utility revenues generated by the city’s airport, water system or wastewater system. Pledged excise taxes may include city sales, use, utility and franchise taxes; license and permit fees; and state-shared sales and income taxes. The city has used nonprofit corporation financing selectively. In general, it has financed only those projects that will generate revenues adequate to support the annual debt service requirements or that generate economic benefits that more than offset the cost of financing. Similar to bonded debt, these financings are rated by bond rating agencies. The most recent ratings for excise tax revenue bonds by Standard and Poor’s and Moody’s Investors Service were AAA and Aa2 respectively. Debt Service and Lease Purchase Expenditures by Source of Funds (In Thousands of Dollars) 2004-05 Actual 2005-06 Estimate 2006-07 Budget $101,466 $109,653 $121,017 Aviation 63,468 62,272 77,172 Arizona Highway User Revenue 29,206 31,247 31,242 9,638 20,424 18,590 20,999 23,856 29,514 Fund Secondary Property Tax Convention Center General Golf Grant Funds - Transit and Housing Public Housing Solid Waste 579 849 2,139 2,148 63 0 0 17,226 17,797 22,533 9,136 7,020 9,842 Transit 2000 15,137 27,683 38,452 Wastewater 47,204 58,950 70,776 Water 54,249 83,202 94,195 Capital Funds - Various Sources 14,905 16,971 189,155 $385,233 $461,793 $705,485 Sports Facilities Total 148 394 2,142 Overview of Capital Improvement Program Process The Capital Improvement Program is a multiyear plan for capital expenditures needed to replace, expand, and improve infrastructure and systems. Other planning processes identify the need and provide funding for capital projects. On April 4, 2006, the City Council reviewed the Preliminary 2006-11 Capital Improvement Program and forwarded the 2006 bond-funded portion to the 2006 Bond Committee for their review and consideration. The Bond Committee approved the plan presented here for 2006 bonds. The Capital Improvement Program reflected here includes the preliminary plan presented to City Council updated for project timing and cost changes. 2006-11 Capital Improvement Program Development The annual Capital Improvement Program update process began in January when departments prepared revised 2005-06 estimates and their updated five-year capital improvement programs. The 2005-06 estimates reflect updated construction estimates, project delays, awarded contract amounts, project carry-overs and any other program changes. The updated five-year program includes projects planned for authorized bond funding and the latest estimates for pay-as-you-go projects funded with operating funds, federal funds, impact fees and other funding sources. Budget and Research staff reviewed the departments’ revised programs for funding availability, reasonableness and technical accuracy. Presented in this program are projects reviewed and adopted through several planning processes. These include capital projects from the most recently adopted multi-year rate plans for enterprise funds such as Water and Wastewater and from other planning process including the five-year Arterial Streets Plan, peripheral area infrastructure financing plans for impact fees and various multi-year facility maintenance plans. Also reflected are capital projects from voter-approved sales tax and bond programs including the $878.5 million 2006 Bond Program approved in March 2006. In conjunction with the CIP process, the Engineering and Architectural Services Department works with departments to level design and construction bid award dates evenly throughout the fiscal year. By avoiding bidding capital projects during the last quarter of the fiscal year, the city has reduced construction costs and increased project quality by making better use of construction resources. The city also has achieved lower bid prices and increased competition for city projects by avoiding busy periods for the construction industry. multi-year forecasts for assessed valuation and property tax levies and for General Fund revenues and expenses. They recommended bond and operating cost capacities before 14 service-related committees began their work to evaluate five-year capital facility needs identified by city departments as well as capital project funding requests by community nonprofit organizations. Through the work of these subcommittees, the Citizens’ Bond Committee recommended nearly 200 capital projects to the City Council that would not require an increase in the city’s combined property tax rate of $1.82 per $100 of assessed valuation. City Council formed the $878.5 million in projects into the following seven propositions which were all approved by the voters in March 2006. The 2006 Bond Program projects are reflected in the 2006-11 Capital Improvement Program and are consistent with the recommendations of the Citizens’ Bond Committee. ■ ■ 2006 Citizens’ Bond Committee Program Voter-approved bond authorizations are the major funding source for the general government portion of the Capital Improvement Program. The city generally seeks new voter-approved programs on five-year cycles. Consistent with that planning cycle, a Citizens’ Bond Committee process was initiated by the City Council in June 2005. More than 700 community volunteers were appointed by the City Council to serve on 17 bond subcommittees to help shape the program. Two of the committees evaluated the city’s capacity to service new debt and to fund the operating costs of new capital facilities. These committees reviewed ■ ■ ■ ■ ■ Strengthening Police, Fire and Homeland Security ($177 million) Using Technology to Improve Police and Fire Protection, Government Efficiency, Customer Service and Access to Voting ($16.1 million) Building Small High Schools, Higher Education and Health Science Facilities ($198.7 million) Increasing Recreational Opportunities with New Parks and Open Spaces ($120.5 million) Serving Our Community with Libraries and Youth, Senior and Cultural Centers ($133.8 million) Providing Housing that is Affordable to Families and Seniors and Revitalizing Neighborhoods ($85 million) Constructing Streets and Storm Sewers for Better Infrastructure ($147.4 million) 149 It has been the city’s practice to require ongoing citizen oversight of property tax-funded bond programs. The 2006 Bond Committee met April 20, 2006, to review and recommend approval of the 2006 bond-funded portion of the Preliminary 2006-11 Capital Improvement Program. Minor changes to project timing were recommended and are reflected in this 2006-11 Capital Improvement Program. Capital Construction Funds The Capital Construction fund was established in 1998-99 and provides about $23 million each year for critical infrastructure improvements in the right-of-way. Citizen input from a series of public meetings supported using these funds for neighborhood street rehabilitation, sidewalks and wheelchair ramps, traffic safety and traffic calming projects and neighborhood traffic mitigation projects. Funds will be programmed in these project categories for each year of the Capital Improvement Program. Individual projects will be determined during the first year of the program based on traffic engineering data and neighborhood input. Parks and Preserves Funds Programming of Impact Fees In September 1999, the voters approved a ten-year, one-tenth of one percent sales tax to purchase state trust lands for the Sonoran Desert Preserve and for the development and improvement of regional and neighborhood parks. The 2006-11 Capital Improvement Program includes $134.8 million of these funds, which are programmed for regional, community and neighborhood parks, and Sonoran Preserve land acquisition. Land acquisitions are planned and timed to take advantage of state grant funding opportunities. These funds are programmed though 2009-10 reflecting the expiration of the ten-year sales tax. In 1987, the City Council adopted an ordinance requiring new development in the city’s peripheral planning areas to pay its proportionate share of the costs associated with providing public infrastructure. An impact fee program was developed that is based on projected infrastructure requirements within several planning areas. Impact fees collected for a specific planning area must be expended for capital infrastructure in the plan for that area and may not be used for any other purpose. In addition, impact fee-funded projects must directly benefit the parties that paid the fees. Impact fee collections initially progressed slowly because of a slowdown in construction in the late 1980s and early 1990s. In recent years, impact fee collections have become more significant. However, because the revenue streams are dependent on what can be volatile development activity, only impact fee revenues that have been collected are programmed in the Capital Improvement Program. Budget and Research staff have worked with Planning and operating department staff to appropriately program $145.7 million in available impact fees in the 2006-11 Capital Improvement Program. Additional impact fees will be programmed in future capital improvement programs as these fees are collected. Transit 2000 Funds The voters approved Proposition 2000 on March 14, 2000. This initiative authorized a four-tenths of one percent sales tax to implement the Transit 2000 plan. The 2006-11 Capital Improvement Program includes $206.8 million of these funds, which are programmed for: ■ ■ ■ ■ ■ ■ 150 Additional buses for expanded regular, express and Dial-a-Ride service ($700,000) New and expanded passenger and maintenance facilities ($25.8 million) Bus pullouts, left-turn arrows and bicycle lanes ($9.5 million) Technology upgrades ($6.3 million) Light rail, bus rapid transit and other facilities ($150.5 million) Contingencies ($14 million) SUMMARY OF 2006-11 CAPITAL IMPROVEMENT PROGRAM (In Thousands of Dollars) Program 2007-08 2008-09 17,471 52,435 61,100 1,250 8,895 12,500 914 2,603 $ 10,327 7,165 50,640 1,250 11,449 14,800 _ 3,085 8,284 14,936 17,135 1,200 8,925 3,900 1,178 8,281 5,400 18,024 21,301 8,681 2,184 9,885 6,500 Parks, Recreation and Mountain Preserves Phoenix Convention Center Police Protection 182,480 48,336 23,397 Public Transit Solid Waste Disposal Arts and Cultural Facilities Aviation Economic Development Energy Conservation Facilities Management Fire Protection Freeway Mitigation Historic Preservation HOPE Housing Human Services Information Technology Libraries Neighborhood Services Storm Sewers Streets - Major Streets Streets - Other Streets Streets - Traffic Improvements Wastewater Water Total 2006-07 $ 16,386 581,048 105,487 1,500 15,832 27,128 4,220 4,272 $ 2009-10 $ 28 1,236 11,730 1,388 7,852 20,103 _ 1,730 2010-11 $ 238 _ 5-Year Total $ 8,912 1,450 10,004 19,197 _ 3,055 44,450 641,884 237,869 6,838 54,032 93,728 5,134 14,745 3,329 11,909 6,000 850 12,330 5,900 14,841 56,381 38,335 8,283 5,267 7,850 9,135 3,487 7,850 6,233 8,931 8,120 43,859 48,871 39,001 61,654 3,100 _ 43,424 9,508 26,487 36,609 12,067 44,120 20,145 8,894 18,619 344,312 81,905 112,623 338,033 44,802 192,796 21,980 79,224 4,777 103,720 4,500 111,034 4,853 824,807 80,912 49,373 93,050 36,314 16,435 52,076 23,804 16,234 63,733 36,801 17,505 44,665 42,497 22,738 56,666 34,531 122,285 310,190 173,947 17,119 393,653 255,873 8,440 321,295 293,343 15,286 132,270 265,787 19,921 124,130 211,245 14,531 51,488 110,542 75,297 1,022,836 1,136,790 $2,326,664 $1,184,685 $828,506 $746,756 $539,261 $5,625,872 151 SUMMARY OF 2006-11 CAPITAL IMPROVEMENT PROGRAM BY SOURCE OF FUNDS (In Thousands of Dollars) Source of Funds General Funds Parks and Preserves Transit 2000 Development Services Capital Construction Arizona Highway Users Public Transit Community Reinvestment Community Development Block Grants (CDBG) HOPE Grant Other Restricted Grant Funds Enterprise Funds: Aviation 2007-08 2008-09 2009-10 2010-11 5-Year Total $ 9,708 67,942 40,889 75 25,083 72,201 25,662 1,469 2,476 5,956 3,873 1,289 $ 9,345 29,735 31,733 _ 20,597 57,177 38,418 1,100 400 1,200 _ _ $ 7,905 22,500 27,515 89 25,346 59,153 36,491 900 600 515 _ _ $ 3,760 14,700 44,519 250 22,924 62,151 36,245 900 600 _ _ _ $ 2,360 _ 62,183 134 23,577 61,074 29,482 682 600 _ _ _ $ 33,078 134,877 206,839 548 117,527 311,756 166,298 5,051 4,676 7,671 3,873 1,289 35,572 16,735 7,005 1,689 511 61,512 Water 58,481 65,775 94,477 73,498 107,501 399,732 Wastewater Solid Waste 34,901 4,507 39,733 2,250 37,601 3,340 39,552 3,553 33,060 3,758 184,847 17,408 Convention Center 42,849 3,100 3,000 3,138 3,200 55,287 $432,933 $317,298 $326,437 $307,479 $328,122 $1,712,269 176,198 145,556 160,598 _ 205,792 _ 177,183 _ 158,729 _ 145,556 16 8 1,655 914 _ _ _ _ _ _ 24 2,569 2,366 120 _ _ _ _ _ _ _ _ 2,366 120 213,860 5,428 500 _ 500 _ 500 _ _ _ 215,360 5,428 208,309 175,152 185,457 207,954 62,659 160,162 49,569 136,598 9,759 2,078 515,753 681,944 $928,660 $555,431 $429,113 $363,850 $170,566 $2,447,620 Total Operating Funds Property Tax Supported: 2006 Various Purpose 2001 Various Purpose 1989 Historic Preservation 1988 Various Purpose Revenue Supported: 1981 Various Purpose 1988 Various Purpose Nonprofit Corporation Bonds: Aviation Convention Center Wastewater Water Total Bond Funds 152 2006-07 878,500 SUMMARY OF 2006-11 CAPITAL IMPROVEMENT PROGRAM (continued) BY SOURCE OF FUNDS (In Thousands of Dollars) Source of Funds Impact Fees Nonprofit Corporation: Transit 2000 Other Passenger Facility Charge Other Cities’ Share SROG and Val Vista Solid Waste Remediation 2006-07 2009-10 $ 500 2010-11 5-Year Total _ $ 145,693 _ _ _ 295,714 62,399 106,206 $ 8,776 218,794 42,389 99,881 76,920 19,750 6,325 _ 260 _ _ _ _ 142,556 2,892 115,319 980 40,998 1,217 37,612 1,061 10,643 1,156 347,128 7,306 292,669 28,574 1,026 16,200 5,505 _ _ _ _ 26,317 9,061 _ _ 2,433 76,924 9,728 _ _ _ _ 876 _ 22,526 6,248 _ _ _ _ 434,636 59,116 1,026 3,450 876 2,433 Total Other Capital Sources $ 965,071 $ 311,956 $ 72,956 $ 75,427 $ 40,573 $1,465,983 TOTAL $2,326,664 $1,184,685 $828,506 $746,756 $539,261 $5,625,872 3,450 _ $ 2008-09 6,010 Capital Grants Federal, State and Other Participation Parks Capital Gifts Private Participation Capital Reserves Other Capital $ 130,407 2007-08 $ 153 2006-11 Capital Improvement Program Highlights The Capital Improvement Program (CIP) totals $5.6 billion over the next five years. As shown in the pie chart, funding for the 2006-11 program comes from five main sources: $1.0 billion in 1988, 1989, 2001 and 2006 voter-approved bond funds, $1.4 billion in pay-as-you-go operating funds, $1.4 billion in various enterprise bonds, $341.7 million in Transit 2000 and Parks and Preserve Initiative funds, and $1.5 billion in other funds. The $1.5 billion in other funds includes $358.1 million in nonprofit corporation financing, $434.6 million in capital grants, $410.7 million from private and other cities and agencies for participating in programs such as Water and Wastewater, $145.7 million in impact fees, $106.2 million in passenger facility charges, $7.3 million in solid waste remediation funding and $3.3 million from other miscellaneous capital sources. Projects included in the first year total $2.3 billion and are funded from pay-as-you-go operating funds ($432.9 million), bond funds ($928.7 million) and other capital financing ($965.1 million). A financial organization chart at the end of this section presents a visual overview of the first year by source of funds. Two additional schedules summarize the first year by source of funds and the 2006-07 Capital Budget by fund. A brief overview of the five-year plan for each program follows. 2006-11 Capital Improvement Program Sources of Funds Property Tax Bonds $1.0 Billion Pay-As-You-Go $1.4 Billion Enterprise Bonds $1.4 Billion Transit 2000 and Parks and Preserves $0.3 Billion Other $1.5 Billion Arts and Cultural Facilities Aviation The $44.5 million Arts and Cultural Facilities program is funded with 2001 and 2006 bonds and includes the following projects: The Aviation program totals $641.9 million. This program includes improvements at Phoenix Sky Harbor International Airport and the two satellite airports, Phoenix Goodyear and Phoenix Deer Valley. The Aviation program is funded with aviation operating revenue, federal grant funds, aviation nonprofit corporation bonds and passenger facility charge funds. Major improvements planned for Phoenix Sky Harbor International Airport include the following: ■ ■ ■ ■ ■ ■ ■ ■ Complete an expansion of the Phoenix Museum of History Construct an expansion of the Museo Chicano Complete renovation of the Phoenix Family Museum Complete renovation of the Phoenix Theatre ■ Construct a new facility to house Arizona Opera and Ballet Arizona ■ Renovate existing Black Theatre Troupe facility at 333 E. Portland St. ■ Renovate Carver Museum at 415 E. Grant St. ■ Address major maintenance, ADA and safety issues at city-owned cultural facilities ■ ■ ■ Reconstruct existing asphalt taxiways in concrete Acquire land around the airport and other noise mitigation projects Construct prepay machines for parking garages Complete a terminal blast analysis and other required security improvements Develop landscape plan Upgrade North security checkpoint at Terminal 3 Upgrade electrical system at Terminal 3 155 ■ ■ Rehabilitate Terminal 4 sidewalk expansion joints Complete an in-line baggage explosion detection system The Aviation program also includes early redemption of passenger facility charge revenue bonds, development of a master plan for the Phoenix Deer Valley Airport and environmental assessments at both satellite airports. Finally, the program includes a $5.0 million capital investment in the Williams Gateway Airport Authority. Economic Development The $237.9 million Economic Development program is funded with 2006 bonds, community reinvestment funds, and nonprofit corporation bond financing. Included in this program are downtown and citywide economic development projects. Downtown projects include acquisition of land, renovation of three existing buildings and design and construction of new facilities in a 20-acre downtown site for ASU Downtown, design the new University of Arizona College of Pharmacy and infrastructure improvements to the Phoenix Biomedical Campus. Land acquisition and site preparation near the downtown area for the expansion of the Life Sciences Research Park also is planned. Other projects include land acquisition for the Fillmore Property, equipment acquisition for the Translational Genomics Institute (TGEN)/ International Genomics Consortium (IGC) project and downtown infrastructure improvements to sidewalks, landscaping and lighting, business redevelopment and art enhancements. The citywide Economic Development program is funded with 2006 bonds. Planned projects include revitalization of public infrastructure on the west side of the city, assistance to small high schools targeted to specific career development programs and acquisition of property for the relocation of the state fairgrounds. 28 -a cr e u a re is a d C op p er Sq t a ic a l- re la te s u ed p m om fe et of bi ed ic a l C a m re a io u B sq ix n on o m il li w n ed P h oe n n ed fo r tw T h e ci ty -o ci li ti es . h p a rk p la fa rc a ic se re em d n u rb a ry a n d a ca to ra bo la re se a rc h , 156 Energy Conservation Facilities Management The $6.8 million Energy Conservation program is funded with general, convention center, wastewater and water operating funds. This program includes projects to continue the city’s energy conservation and cost reduction efforts at various city facilities. The city’s Energy Conservation program has been in place for more than 20 years. Through the program’s efforts in addressing energy efficient retrofits, energy efficient design and management, metering for efficient operations and implementation of new technology, the annual cost savings average $250,000. The Facilities Management program totals $54.0 million and is funded with 2001 and 2006 bonds and general funds. The following projects are planned for 2001 and 2006 bond funding: ■ ■ ■ ■ ■ ■ Renovation of the Glenrosa Service Center Design and construct accessibility improvements at existing service centers and buildings Complete the Pecos Community Center Conceptual design of customer service centers Projects planned for general funding include remediation of contaminated soil from leaking underground storage tanks; upgrade of the air distribution system, secondary electric and lighting systems and refurbish the flooring at the Calvin C. Goode Building; repair the life-safety systems and replace sprinkler piping at Phoenix City Hall; design and construct facilities improvements at the Union Hills, Salt River, Central, Glenrosa and Okemah service centers; design and construct a fuel dispensing station at the Glenrosa Service Center and construct equipment repair canopies at the Okemah Service Center. Infrastructure for the future Estrella maintenance and customer service center Replacement of critical facility and support systems in Phoenix City Hall and the Calvin C. Goode buildings 157 Fire Protection New Infill Fire Station Construction The $93.7 million Fire Protection program is funded with 2001 and 2006 bonds and impact fees. The following fire stations are planned for bond funding: New Fire Station Construction ■ ■ ■ ■ ■ Station 55 at I-17 Freeway and Jomax Road Station 57 at 15th Avenue and Dobbins Road (opens April 2007) Station 59 in Estrella Village ■ Station 72 in Desert View Village ■ Station 74 in West Ahwatukee Foothills Station 61 at 16th Street and Indian School Road (opens May 2007) ■ Station 62 at 99th Avenue and Lower Buckeye Road (opens May 2007) ■ Land Acquisition for Future New Fire Stations ■ ■ Station 60 at 19th and Dunlap avenues (opens May 2007) ■ ■ The following firefighter training and technology projects also are programmed for bond funding: ■ ■ Acquisition of firefighter training technology Expansion of Fire Training Academy Construction of a Command Training Center Construction of a Dispatch and Emergency Operations Center Installation of traffic preemption equipment Station 64 at 51st Avenue and Osborn Road ■ Station 63 at Seventh Street and Thunderbird Road ■ Stations 57 and 62 also are partially funded by impact fees. Revenue from participating entities will fund their portion of the multi-agency computer-aided dispatch equipment project. Upgrade of the computer-aided dispatch system p a rt of fa r n or th en ts in th e d e ci ty si th re s es os a n d se rv op en a cr A p ri l 20 06 h ed u le d to sc in re ed a s en op a ti on St a ti on 56 n a l fi re st ou r a d d it io th e ci ty. F in 20 06 -0 7. 158 Freeway Mitigation Historic Preservation HOPE The Freeway Mitigation program totals $5.1 million. This program is funded with 1988 and 2001 bonds. The Freeway Mitigation program provides for the development of freeway corridor improvements to buffer the impact of existing and new limited-access roadways in the city's neighborhoods. Improvements are programmed for the Piestewa Peak Parkway, Outer Loop, South Mountain Loop and Black Canyon/Maricopa Freeway corridors. The Historic Preservation program totals $14.7 million and is funded with 1989, 2001 and 2006 bonds. The following projects are planned for 2001 and 2006 bond funding: The HOPE VI project is programmed for $14.8 million and is funded with federal grants and 2001 bonds. The HOPE VI project will reconstruct the public housing units at Matthew Henson and revitalize the surrounding neighborhood. The project will establish a mixed-use, mixed-income development and will create incentives to attract additional investment to the area through public and private partnership. ■ ■ ■ ■ Construction of historic preservation demonstration projects Acquire and rehabilitate threatened historic buildings citywide Identify post World War II neighborhoods citywide eligible for city historic designation Matching grants for residential and commercial historic-property owners to rehabilitate historic properties in exchange for conservation easements 159 Housing Human Services Information Technology The Housing program totals $56.4 million and is funded with Community Development Block Grant (CDBG) funds, 2001 and 2006 bonds, and federal grant funds. Housing projects using 2006 bonds include: Acquire and expand city-owned properties by 200 annually for affordable housing The $43.9 million Information Technology program is funded with 2001 and 2006 bonds, and with water, wastewater, solid waste disposal, aviation, Arizona highway users and convention center revenues. Projects planned for 2001 and 2006 bond funding include the following: Increase affordable housing new loan program The $38.3 million Human Services program is funded with 2001 and 2006 bonds. This program provides for design and construction of the La Pradera and 51st Avenue senior centers, purchase of land for the 16th Street Senior Center and completion of the South Family Services Center. It also provides for renovation and expansion of the Watkins Homeless Shelter to serve as an emergency shelter and the use of 2001 bonds that remain for a family transitional living center. Install air conditioning units in public housing to replace obsolete evaporative coolers Nonprofit projects in the 2006 Bond Program include: ■ ■ ■ ■ Nonprofit projects in the 2006 Bond Program include: ■ Provide funding for construction of the United Methodist Outreach Ministries New Day Center homeless shelter for families Remaining 2001 bonds are programmed to acquire housing for low-income families and seniors. Modernization projects also are planned based on the availability of grant funds. City Council approved allocations of Community Development Block Grant funds also are programmed. ■ Expansion of the Boys and Girls Club Dave Pratt Dental Clinic Renovation of the Native American Connections’ Guiding Star Treatment Center ■ ■ ■ ■ ■ ■ ■ Acquire land for the Native American Connections’ Business and Cultural Center ■ ■ Partial funding to acquire a facility for the Valle Del Sol Combined Service Center ■ ■ Acquire land for the Body Positive Community Service Center ■ ■ ■ 160 Replace the public safety and public service radio system with the Phoenix Regional Wireless Network project Acquire information system management and security software and hardware Improve data communications infrastructure Complete stabilization of the telephone system Acquire electronic equipment to provide improved customer service Acquire information system management software tools and hardware Acquire land, design, construct and equip an alternate information technology operations center Deploy voice/data convergence-ready equipment to upgrade and enhance staff connectivity Acquire wide-area network equipment to enhance employee productivity Improve the city’s Geographic Information System Purchase equipment to expand availability of accessible voting in city elections as required by the federal Help America Vote Act (HAVA) Libraries ■ The Libraries program totals $48.9 million and is funded with 2001 and 2006 bonds, general funds and impact fees. Projects for 2001 and 2006 bond funding include the following: ■ ■ ■ ■ ■ ■ Acquire land for a North Gateway Branch Library ■ Acquire land for a Desert View Branch Library ■ Demolish, design and construct a new branch library to replace the existing Harmon Library Acquisition of land for a West Ahwatukee Branch Library Construct a 15,000-square-foot branch library in partnership with South Mountain Community College Remodel the Saguaro Library and add additional public computers and an enhanced collection Expand patron self-service capabilities, including wireless Internet access at all facilities, self-checkout equipment at all libraries, RFID (Radio Frequency Identification) technology at all libraries and additional public computers at libraries with the greatest need Neighborhood Services Complete the Cesar Chavez Regional Branch Library ■ Design and construct Agave Regional Branch Library ■ General funds are planned to construct minor improvements to the Cholla Branch Library and improve branch libraries in older neighborhoods to meet current standards. Impact fees are planned to acquire sites for new libraries in North Gateway, West Ahwatukee, Desert View areas and they are also for the design of the Estrella Branch Library. The Neighborhood Services program totals $39.0 million and is funded with 2001 and 2006 bonds and Community Development Block Grant (CDBG) funds. Projects utilizing 2001 and 2006 bonds include the following: ■ Acquire land for a future Graffiti Buster Service Center Partner with the community and other city departments to address critical neighborhood projects Construct sidewalks, lighting, alley improvements and landscaping to enhance aging neighborhoods T h e 13 ,5 00 -s qu a re -f oo t N ei gh bo rh B ro a d w a y oo d R es ou R oa d fe a tu rc e C en te r re s n ei gh bo D ep a rt m en lo ca te d a t rh oo d m ee t of fi ce s a 24 th St re et ti n d a p ol ic and e su bs ta ti on n g ro om s, N ei gh bo rh oo d Se rv ic . es 161 Parks, Recreation and Mountain Preserves ■ The Parks and Recreation program totals $344.3 million and is funded with 2001 and 2006 bonds, Parks Monopole Sites revenue, impact fees and Parks and Preserves Initiative funds. The program provides for acquisition and development of new park sites and specialty areas and improvements to existing parks. The following major projects are included in 2001 and 2006 bond-funded improvements: ■ ■ Acquire land in the Ahwatukee Foothills area Acquire Pioneer Living History Museum property and renovate the Ben Avery Shooting Range Nonprofit projects in the program include: ■ ■ Acquire land for neighborhood mini-park sites ■ Develop a downtown civic space park ■ Renovate and construct trails citywide ■ Renovate aquatics facilities citywide ■ Renovate and construct park upgrades to comply with the Americans with Disabilities Act ■ ■ ■ ■ Improve and renovate parks citywide ■ Construct sport fields and install sports lighting upgrades citywide Acquire land for the Rio Salado Oeste habitat restoration ■ ■ Provide funding for construction of a sports and recreation center for A Bridge to Independent Living (ABIL) Provide funding toward construction of an Audubon Center at Rio Salado Provide partial funding for construction of a Boys and Girls Club Provide partial funding for offsite improvements for construction of a Salvation Army South Mountain Center Provide partial funding for construction of a gymnasium at a new Maryvale branch of the YMCA Design and construct a soccer stadium at the Reach 11 sports complex r, h ik in g tr ia n ce n te es u eq n ra m a d a a a re a w it h s in cl u d e a a m en it ie s, a p ic n ic re om a ro on st ti re re a s. in g lo t, 11 re cr ea re d es er t a T h e R ea ch il h ea d p a rk il d li fe /n a tu a il s, a tr a w tr d g n a in d in ri and g fo u n ta , a d ri n ki n a n d gr il ls 162 Parks and Preserves Initiative-funded projects include improvements to community and neighborhood parks and land for the Sonoran Preserve. Impact fees are planned to acquire and develop park sites in the Ahwatukee, Deer Valley, Desert View, Estrella, Laveen and North Gateway areas and to acquire open space preserve land in the northern areas. Parks monopole sites revenue is planned to add amenities to parks with monopole sites. Phoenix Convention Center The $81.9 million Phoenix Convention Center program is funded with convention center operating revenue, nonprofit corporation bonds, 2006 bonds and general funds. In addition to the convention center, this program includes the Herberger and Orpheum theaters, Symphony Hall plus the Patriot’s, Hyatt Regency, Heritage and Convention Center parking garages. The multi-year convention center expansion is the primary project funded in this program. Other convention center projects include only internal repairs. Miscellaneous improvements and studies are planned for garages and theaters. 2006 bonds are planned for the Herberger Theater Center for renovations and enhancements as well as Patriot’s Garage structural repairs. T h e $6 00 m il li on ex p a n si on of of fe ri n g n th e P h oe n ea rl y 90 0, ix C on ve n 00 0 sq u a re sq u a re fe et ti on C en te fe et of re n to ta l. P h a r w il l tr ip ta bl e sp a ce se on e w il le in si ze , co m p le ti on a n d m or e l be re a d y of th e en ti th a n tw o fo r gr ou p s re co n ve n m il li on in Ju ly 20 ti on ce n te 06 , a n d th r is sc h ed u e le d fo r ea rl y 20 09 . 163 Police Protection The Police Protection program totals $112.6 million. This program is funded with 2001 and 2006 bonds. The following projects are planned for 2001 and 2006 bond funding: ■ ■ ■ ■ Complete construction and equip a new forensics crime lab ■ ■ Construct the Sunnyslope neighborhood police station at Seventh and Peoria avenues ■ ■ ■ ■ ■ ■ ■ ■ 164 Purchase eight single-engine, medium-duty helicopters to replace the current fleet Design and construct aircraft hangar facilities at the Deer Valley Airport Purchase additional equipment to provide server redundancy for police computer systems Upgrade and install Computer Aided Dispatch (CAD) system Improve radio coverage in various areas and in buildings through the Phoenix Regional Wireless Network (PRWN) project Acquire equipment for Automated Fingerprint Identification (AFIS) upgrade Acquire land for a new Northwest Precinct ■ ■ ■ ■ Acquire Police Automated Computer Entry (PACE) upgrade and replacement Design, rebuild and equip the Squaw Peak Precinct Design new precinct in the Northeast/Cave Creek and Smokehouse Trail area Acquire land, design and construct a new precinct in the northwest area of I-17 and Happy Valley Road Design the Southwest Phoenix Facility Design Communications Center expansion Construct neighborhood police stations Renovate police headquarters and facilities Complete the range design and driving track improvements Public Transit The $824.8 million Public Transit program is funded with Transit 2000 revenue, Regional Transportation revenue including the half-cent countywide sales tax, Transit nonprofit corporation bonds, and federal and state grants. Phoenix voters approved Transit 2000, a 0.4 percent sales tax, on March 14, 2000, to fund extensive improvements to the city’s public transit system. Projects planned in the Public Transit program with these revenues and regional transportation revenue include bus acquisition, new passenger facilities, technology enhancements, improvements to bus stops and shelters, upgrades to maintenance facilities, bus pullouts and rapid transit and light rail planning and construction. Federal and state grant funds are planned to purchase buses, construct passenger facility improvements, construct light rail, upgrade maintenance facilities and enhance technologies. Solid Waste Disposal Storm Sewers The $80.9 million Solid Waste Disposal program includes projects at the city’s landfills and is funded with solid waste disposal revenue, solid waste remediation funds and nonprofit bond funds. Projects at the Skunk Creek Landfill include the methane gas extraction systems and cell lining, capping and landscaping. Improvements to the 19th Avenue Landfill include maintaining soil capping and the methane gas collection system. Projects at the 27th Avenue Landfill include painting all exterior structural steel, landscaping, monitoring groundwater and methane gas. In addition, the Solid Waste Disposal program includes cell excavation and construction of a drainage system and methane gas system for the new State Route 85 landfill. The Storm Sewers program totals $122.3 million and is funded with 2001 and 2006 bonds, capital construction funds, impact fees and participation by other agencies. This program is scheduled to coordinate with the Major Street construction program and provides for construction of storm sewer lines, detention basins and other facilities to control flooding. Storm drainage construction for 2001 and 2006 bond funding includes the following projects: ■ ■ ■ ■ ■ ■ ■ ■ 10th Street Wash improvement project ■ ■ ■ ■ ■ ■ ■ ■ ■ 28th Street, Red Mountain Freeway to Thomas Road storm drain 24th Avenue and Camelback Road detention basin 26th Avenue and Verde Lane detention basin 23rd Avenue and Roeser Road Seventh Street, Pima to Deer Valley roads ■ ■ Camelback Road, Agua Fria Freeway to 99th Avenue storm drain 19th Avenue, Deer Valley to Pinnacle Peak roads 20th Avenue and Turney Detention Basin 30th Avenue and Madison storm drain 75th Avenue, Buckeye to Van Buren storm drain 75th Avenue, Salt River to Papago Freeway Ninth Avenue, Arizona Canal to Peoria Avenue storm drain Deer Valley Road, 16th to 20th streets Fillmore, Ninth to Third avenues storm drain Pinnacle Peak Road and Tatum Boulevard Intersection improvements In addition, 2001 and 2006 bond funds are planned to construct local drainage improvements, provide floodplain survey assistance and rehabilitate existing storm drains. Bethany Home Road Outfall Channel 51st Avenue, Dobbins Road to Southern Avenue storm drain 51st Avenue, Southern Avenue to Salt River storm drain 165 Major Streets The $310.2 million Major Street program is funded with Arizona Highway User Revenue, capital construction funds, 2001 and 2006 bonds, impact fees and participation by other agencies. This program provides for the construction of major arterial streets over the next five years. This program agrees with the approved five-year Major Street program. Major street construction for 2001 and 2006 bond funding includes the following projects: ■ ■ 20th Street, Highland to Camelback Road Also funded with 2006 bonds is the purchase of office space for traffic counting, parking meter and right-of-way management functions. Major street construction for Arizona Highway User Revenue funding includes the following projects: ■ ■ Camelback Road, 107th to 99th avenues ■ 52nd Street, McDowell to Thomas roads ■ 75th Avenue, Buckeye to Van Buren ■ ■ ■ ■ ■ ■ 166 Acquire right-of-way for east-west parkway in the Sonoran Desert Preserve 67th Avenue, Buckeye Road to Van Buren Avenue ■ ■ ■ 19th Avenue, Baseline Road to Southern Avenue ■ Pinnacle Peak Road, 43rd to 35th avenues Van Buren Avenue, 67th to 59th avenues Seventh Avenue, Southern Avenue to Salt River Pinnacle Peak Road and Tatum Boulevard intersection improvements ■ 32nd Street, Washington Street to McDowell Road ■ Westside streetscape and retrofit programs ■ Rio Salado Beyond the Banks land and roadway ■ Scottsdale Road, Loop 101 to Bell Road ■ McDowell Road, 83rd to 75th avenues ■ Retrofit Program 19th Avenue, Jomax to Central Arizona Project canal Historic districts streetscape improvements Lower Buckeye Road, 43rd Avenue to 35th Avenue Van Buren Avenue, 75th to 67th avenues 32nd Street, Southern Avenue to Broadway Road Impact fees are planned for street improvements in the Laveen area. Other Street Improvements The Other Streets program totals $173.9 million and is funded with Arizona Highway User Revenue, 2001 and 2006 bonds, capital construction funds and participation by other agencies. The Other Streets program includes local paving projects, mid-block streetlights, bikeways, tunnels, pathways, residential street resurfacing, major street overlay, major street micro seal, and sidewalk and ramp improvements. The program also includes the annual Portland Cement Concrete Repair program and Slurry Seal program. Capital Construction funds are included for dust control to stabilize dirt shoulders and alleys. Traffic Improvements The Traffic Improvements program totals $75.3 million and is funded with 2006 bonds, Arizona Highway User Revenue, capital construction funds and participation by other agencies. This program includes traffic congestion, screen wall, speed hump, painting, bottleneck removal, traffic signal system upgrade, new warranted traffic signal and left turn arrow projects. Arizona Highway User Revenue is funding the construction of a pedestrian underpass at 25th Street and Camelback Road. Capital Construction funds are included in the program for traffic safety, traffic calming, screen walls, and school safety storage (securing children using crosswalks via a median) and sidewalks. Funds will be allocated to specific traffic improvement projects as needs are identified. Wastewater The Wastewater program totals $1.0 billion and is funded with wastewater operating revenue, nonprofit corporation bonds, impact fees and other cities' participation in the 91st Avenue Wastewater Treatment Plant Subregional Operating Group (SROG) joint venture. Major projects programmed at the 91st Avenue Wastewater Treatment Plant include unified plant expansion, support system upgrades, odor control facilities, instrumentation and control improvements, metering station upgrades, and repair and replacement of equipment. Other major Wastewater projects include the following: ■ ■ ■ ■ ■ ■ ■ ■ Construction of a reuse and river restoration project at Tres Rios ■ ■ ■ Design and construction of Salt River Outfall and Southern Avenue Interceptor Parallel sewers to meet wastewater system flow demands Construction of relief sewers citywide Water Conversion to multi-phase sludge digestion at the 23rd Avenue Wastewater Treatment Plant The $1.1 billion Water program is funded with water operating revenue, nonprofit corporation bonds, capital reserve funds and city of Mesa participation in the Val Vista Water Treatment Plant joint venture. Major projects programmed include the following: Repair and replacement of equipment at the 23rd Avenue Wastewater Treatment Plant Security improvements at remote facilities Sewer lift station improvements and construction of a sewer lift station at 107th Avenue and Roeser Road Construction of parallel sections of the Broadway Sewer from 32nd Street to 51st Avenue to provide needed additional capacity Rehabilitation of selected sewers of various sizes and materials located throughout the city ■ ■ ■ ■ ■ Sewer relocations for light rail ■ ■ Replacement and upgrade of the billing system Acquisition and construction of new wells and rehabilitation of existing wells Construction of new reservoirs and rehabilitation of existing reservoirs Construction of new booster stations and rehabilitation of existing booster stations Rehabilitation of steel tanks Construction of arsenic treatment facilities at various well sites Rehabilitation and security upgrades at Cave Creek Water Reclamation Plant Construction of odor control facilities for the Salt River Outfall and Southern Avenue Interceptor sewers 167 ■ ■ ■ ■ ■ ■ 168 Design of a new water treatment plant at 15th Avenue and Dobbins Road Design and construction of east and west basins at Deer Valley Water Treatment Plant Conversion of plant filtration to granular activated carbon at Val Vista, Deer Valley, 24th Street and Union Hills water treatment plants Rehabilitation and process optimization at the Val Vista, Deer Valley, 24th Street and Union Hills water treatment plants Replacement and rehabilitation of the Val Vista Transmission Main from the Val Vista Water Treatment Plant to 48th Street Construction of water main improvements recommended in the integrity study and rehabilitation of existing mains citywide ■ ■ ■ ■ ■ ■ Increase capacity of water distribution system in the Camelback East residential corridor Construction of new mains in growth areas Replacement and upgrade of the billing system Acquisition of additional water resources Relocation of water lines for light rail Install new service meters and construction of plumbing connections for alley service relocations 2006-07 CAPITAL IMPROVEMENT PROGRAM BY SOURCE OF FUNDS (In Thousands of Dollars) Arts and Cultural Facilities Aviation Economic Development Energy Conservation Facilities Management Fire Protection Freeway Mitigation Historic Preservation HOPE VI Housing Human Services Information Technology Libraries Neighborhood Services Parks, Recreation and Mountain Preserves Phoenix Convention Center Police Protection Public Transit Solid Waste Disposal Storm Sewers Streets - Major Streets Streets - Other Streets Streets - Traffic Improvements Wastewater Water Total Total Program Pay-AsYou-Go Operating $16,386 581,048 105,487 1,500 15,832 27,128 4,220 4,272 8,284 14,936 17,135 18,024 21,301 8,681 182,480 48,336 23,397 338,033 44,802 49,373 93,050 36,314 17,119 393,653 255,873 $3,545 35,663 1,170 1,500 9,534 _ _ 139 6,956 _ _ 2,860 299 1,698 68,289 42,080 _ 66,200 3,836 2,216 52,269 30,622 12,329 34,208 57,520 $2,326,664 $432,933 2006 Bonds Nonprofit Corporation Bonds Other Capital Sources 1,498 141 3,484 14,635 8,647 13,423 3,486 22,816 98 14,814 _ 328 22,880 10,076 _ _ _ 349 $6,501 _ 101,560 _ 500 6,905 _ 2,634 23 3,450 2,500 6,330 3,500 3,437 25,569 _ 3,000 _ _ 9,805 _ _ _ 44 440 _ $ 213,860 _ _ _ _ _ _ 1,164 _ _ _ _ _ 150 6,158 _ 950 _ _ 160 _ _ 206,169 174,138 _ $ 329,159 2,686 _ 966 5,014 _ _ _ 8,002 _ 187 4,079 60 65,656 _ 5,583 270,883 40,638 14,473 30,545 5,692 4,790 153,232 23,426 $149,713 $176,198 $602,749 $965,071 Misc. Bonds * $ 6,340 2,366 71 _ 4,832 15,209 4,220 *Remaining 1981, 1988, 1989 and 2001 bond funds. Of this amount, $145,556,000 is 2001 bond funds. 169 RESOURCES AND EXPENDITURES BY CAPITAL FUND 2006-07 CAPITAL IMPROVEMENT PROGRAM RESOURCES Capital Fund Beginning Balance Bond and Related Funds 2006 Downtown Education & Historic Preservation $ _) 2006 Art & Culture, Human Services, _) Libraries & Facilities _) 2006 Parks and Recreation _) 2006 Police & Fire Protection _) 2006 Police & Fire Technology 2006 Housing, Neighborhood Services _) & Economic Development _ 2006 Streets and Storm Sewers ) 2001 Affordable Housing & Homeless Shelter 9,646,042) 2001 Educational, Youth & Cultural Facilities 4,530,727) 2001 Environmental Improvement & Cleanup (3,709,165) 2001 Fire Protection Facilities & Equipment (6,567,093) 2001 New & Improved Libraries 417,781) 2001 Neighborhood Protection & Senior Centers 2,548,534) 2001 Parks, Open Space & Recreation 7,115,384) 2001 Police Protection Facilities & Equipment (17,662,402) 2001 Police, Fire & Computer Technology 6,144,372) 2001 Preserving Phoenix Heritage (1,157,022) 2001 Storm Sewers 8,703,697) 2001 Street Improvements (18,575,508) 1989 Historic Preservation 297,749) 1988 Freeway Mitigation, Neighborhood Stabilization & Slum & Blight Elimination (170,588) 178,438) 1988 Parks, Recreation & Mountain Preserve 1988 Police Protection (44,016) 1988 Storm Sewers 37,260) Various Aviation Bonds (214,891,403) Various Phoenix Convention Center Bonds 8,757,856) (96,605,710) Various Wastewater Bonds Various Water Bonds 7,611,936) Various Purpose Bonds 474,347) Other Financing General Government Non-Profit Corp. Bonds (123,815,380) (27,060,672) Solid Waste Non-Profit Corp. Bonds Transit Light Rail Bonds 309,768,650) Capital Grants 54,879,466) 151,687,758) Impact Fees 22,923,274) Other Capital 60,589,000) Other Cities’ Participation in Joint Ventures Passenger Facility Charge and Related Bonds 320,916,076) Responsible Party Remediation Funds 9,201,070) TOTAL 170 $476,170,458) EXPENDITURES FUND BALANCES Available For Sale Funds Available Beyond 6/07 Projected Revenue Total Estimated Expenditures Ending Fund Balances $ _ $ _) $100,500,000 $(100,500,000) $198,700,000 $98,200,000 _ _ _ _ _) _) _) _) 15,194,000 24,620,000 14,035,000 2,200,000 (15,194,000) (24,620,000) (14,035,000) (2,200,000) 133,800,000 120,500,000 177,000,000 16,100,000 118,606,000 95,880,000 162,965,000 13,900,000 _ _ _ _ _ _ _ _) _) 9,646,042) 4,530,727) (3,709,165) (6,567,093) 417,781) 8,345,000 11,305,000 9,598,441 8,878,850 1,497,267 11,019,590 13,423,647 (8,345,000) (11,305,000) 47,601) (4,348,123) (5,206,432) (17,586,683) (13,005,866) 85,000,000 147,400,000 _ 5,000,000 5,500,000 18,500,000 13,300,000 76,655,000 136,095,000 47,601 651,877 293,568 913,317 294,134 _ _ 2,548,534) 7,115,384) 16,688,182 19,921,859 (14,139,648) (12,806,475) 14,860,000 14,500,000 720,352 1,693,525 _ _ _ _ _ _ (17,662,402) 6,144,372) (1,157,022) 8,703,697) (18,575,508) 297,749) 11,416,386 16,528,667 783,248 23,121,180 12,678,134 16,364 (29,078,788) (10,384,295) (1,940,270) (14,417,483) (31,253,642) 281,385) 30,300,000 10,800,000 2,300,000 15,470,000 31,500,000 _ 1,221,212 415,705 359,730 1,052,517 246,358 281,385 _ _ _ _ (170,588) 178,438) (44,016) 37,260) (213,671,403) 8,757,856) (96,605,710) 7,611,936) 474,347) 1,215,412 146,631 255,984 37,260 216,346,000 5,427,532 208,308,794 175,152,303 _ (1,386,000) 31,807) (300,000) _) (430,017,403) 3,330,324) (304,914,504) (167,540,367) 474,347) 2,300,000 _ 914,000 31,807 _ _ (123,815,380) (27,060,672) 309,768,650) 379,572,466) 151,687,758) 22,923,274) 203,145,000) 409,342,076) 9,201,070) 5,063,396 37,325,108 218,793,799 325,718,924 130,406,814 2,433,000 142,556,000 99,881,015 2,891,736 (128,878,776) (64,385,780) 90,974,851) 53,853,542) 21,280,944) 20,490,274) 60,589,000) 309,461,061) 6,309,334) 461,700,000 84,268,000 _ N/A N/A N/A N/A N/A N/A 332,821,224 19,882,220 90,974,851 53,853,542 21,280,944 20,490,274 60,589,000 309,461,061 6,309,334 $556,895,000 $1,033,065,458) $1,893,730,523 $(860,665,065) $3,342,143,000 $2,481,477,935 1,220,000 _ _ _ _ _ _ _ 324,693,000 _ _ 142,556,000 88,426,000 _ 300,000 _ 436,045,000 _ 602,000,000 715,000,000 _ 6,027,597 3,330,324 297,085,496 547,459,633 474,347 2006-07 Capital Improvement Program Organizational Chart 2006-07 CAPITAL IMPROVEMENT PROGRAM $ 2,326,664,000 BOND FUNDS $928,660,000 OTHER CAPITAL $965,071,000 OPERATING FUNDS $432,933,000 2006 G.O. Various Purpose $176,198,000 Aviation $216,346,000 Non-Profit Corp. Financing $261,183,000 Other Cities’ Participation $142,556,000 General Fund $9,708,000 Parks and Preserves $67,942,000 2001 G.O. Various Purpose $145,556,000 Convention Center $5,428,000 Impact Fees $130,407,000 Capital Grants $292,669,000 Transit 2000 $40,889,000 Capital Construction $25,083,000 1989 G.O. Historic Preservation $16,000 Wastewater $208,309,000 Passenger Facility Charge $99,881,000 Other Agency and Private Participation $33,050,000 Arizona Highway User Revenue $72,201,000 Public Transit $25,662,000 1988 G.O. Various Purpose $1,655,000 Water $175,152,000 Solid Waste Remediation $2,892,000 Other Capital $2,433,000 Development Services $75,000 Other Restricted $3,873,000 Community Reinvestment $1,469,000 Grant Funds $9,721,000 Aviation $35,572,000 Water $58,481,000 Wastewater $34,901,000 Convention Center $42,849,000 Solid Waste $4,507,000 171 Operating Costs for New Capital Facilities C apital improvements are the police and fire stations, senior centers, parks, swimming pools, libraries, cultural facilities and customer service centers that are needed to deliver services to our residents. Capital improvements also include investment in commercial and neighborhood development, redevelopment and revitalization. Since these types of capital projects are assets with a multi-year life, issuing bonded debt is an appropriate way to pay for these expenses. It will allow the initial costs to be repaid over the years the investment is used. The service delivery costs and day-to-day operating expenses such as staff salaries or supplies are not capital improvements. These costs cannot be funded with bonded debt and must be paid from the city's annual operating funds. On March 13, 2001, Phoenix voters approved a $753.9 million bond program. Based on the 2001 Citizen’s Bond Committee’s latest schedule, the full year’s impact of facilities operated with general funds and opening in 2006-07 is $11.3 million. Projects funded with 2001 bond funds and opening beyond 2006-07 are estimated to result in $1.6 million in new General Fund operating costs. On March 14, 2006, Phoenix voters approved an $878.5 million bond program. Projects funded with these bond funds are estimated to result in $14 million in new General Fund operating costs beginning in the 2008-09 fiscal year. Multi-year rate planning processes are used by enterprise operations to provide the City Council with the effects new capital facilities will have on future rate-payers. That is, each year, the City Council considers the impact of future capital facilities as it sets annual utility rates. Rates are increased today to pay for tomorrow’s facilities. Finally, for more than 20 years the energy conservation program has generated annual cost savings in excess of $250,000. This program provides for energy efficient retrofits, energy efficient design and metering for efficient operations. Each fall, departments are asked to review all capital projects, their estimated completion dates and any costs associated with operating new facilities and systems. The 2006-07 budget includes $22.6 million in new operating and maintenance costs for new facilities and systems. The schedule on the next page provides operating and maintenance costs for the 2006-07 budget, along with the full-year operating and maintenance costs for the 2007-08 fiscal year and the source of funds that would be used for these costs. 173 OPERATING COSTS FOR NEW CAPITAL FACILITIES 2006-07 2007-08 $8,973,000 287,000 280,000 $8,973,000 287,000 280,000 1,207,000 659,000 612,000 439,000 499,000 1,814,000 1,262,000 1,277,000 1,223,000 499,000 35,000 35,000 231,000 407,000 23,000 23,000 880,000 880,000 111,000 43,000 108,000 49,000 126,000 898,000 45,000 109,000 50,000 68,000 71,000 96,000 582,000 268,000 163,000 103,000 391,000 1,078,000 190,000 130,000 325,000 59,000 189,000 898,000 99,000 145,000 67,000 272,000 75,000 115,000 872,000 276,000 122,000 77,000 515,000 904,000 647,000 484,000 Aviation Explosive Detection System baggage handling system Fire Alarm and Access control hardware Geographic Information Systems capital project Fire Fire Station 57 - 15th Avenue and Dobbins Road Fire Station 60 - 19th Avenue and Dunlap Fire Station 61 - 19th Street and Indian School Fire Station 62 - 99th Avenue and Lower Buckeye Public Safety Driver Education Facility HOPE VI Community Training and Education Center Human Services Pecos Community Senior Center Information Technology E-commerce software products Library Cesar Chavez Library Parks and Recreation Desert West Park soccer fields Community Learning Center Phoenix Center North Building Renovation Winship House Renovation Tovrea Castle and Carraro Cactus Garden Restoration Reach 11 Recreation Area Sports Complex Dove Valley Park Cave Creek and Tatum Road Park Tramonto Park Deem Hills Park Stetson Valley Neighborhood Park Washington Adult Center Gymnasium Pecos Park Community Center 31st Avenue and Roeser Road Park Laveen Basin Laveen Farms Park Rio Salado Habitat Restoration Project New Amenities New Street Landscaping Maintenance Phoenix Convention Center West Building (Phase One of expansion) 174 OPERATING COSTS FOR NEW CAPITAL FACILITIES (continued) 2006-07 2007-08 99,000 $ 165,000 155,000 187,000 3,227,000 7,318,000 $22,612,000 $30,444,000 8,052,000 9,540,000 647,000 35,000 1,111,000 3,227,000 11,291,000 9,540,000 484,000 35,000 1,776,000 7,318,000 $22,612,000 $30,444,000 Police Sunnyslope Neighborhood Police Station $ Public Works Citizen Service Center at the Pecos Community Center Water Services Lake Pleasant Water Treatment Plant Net Total Costs Source of Funds General Aviation Convention Center Federal Grants Public Safety Enhancement Water Total Source of Funds * 175 SCHEDULE 1: RESOURCES AND EXPENDITURES BY FUND (In Thousands of Dollars) Resources Expenditures Beginning Fund Balances Revenue Recovery General Parks and Recreation Library Cable Communications $60,840 _ _ _ $240,753 14,204 1,718 8,475 $1,500 _ _ _ $802,569 93,796 35,496 _ $163,858 _ _ Total General Funds $60,840 $265,150 * $1,500 $931,861 _ _ 1,071,341 (20) 1 _ _ _ 1,071,341 270 100 _ _ 22,605 8,074 22,315 8,740 22,315 8,673 Fund Transfer To From Total Operating Capital $941,804 108,000 37,214 5,994 $932,395 108,000 36,915 5,994 $9,409 _ $166,339 $1,093,012 $1,083,304 $9,708 General Funds: Special Revenue Funds: Excise Tax Neighborhood Protection - Police Neighborhood Protection - Fire Neighborhood Protection Block Watch Public Safety Enhancement - Police Public Safety Enhancement -Fire Parks and Preserves Transit 2000 Court Awards Development Services Capital Construction Sports Facilities Arizona Highway User Revenue Local Transportation Assistance Regional Transit Community Reinvestment Secondary Property Tax and GO Bond Redemption Impact Fee Program Administration City Improvement Other Restricted Funds Grant Funds Total Special Revenue Funds 765 $941,804 108,000 37,214 5,994 _ _ _ _ _ $1,093,012 _ _ _ _ _ _ _ 22,315 8,673 _ _ 67 299 _ _ _ _ _ Restricted Fund Total Balances _ 1,115 200 _ 1,615 19 2,911 1,200 _ _ 1,200 1,711 2,316 _ _ 13,555 _ 15,871 15,474 _ _ 15,474 397 8,124 32,295 129,179 _ _ 5 325 39,408 _ 9,116 180 115,625 3,183 64,416 100 1,767 38,447 6,966 8,672 70 _ _ _ 238 23,103 121,334 _ 25,662 1,469 9,842 31,242 _ _ _ 9,116 68,122 156,840 3,183 64,491 25,183 11,609 141,890 6,966 34,334 1,539 121,017 121,017 100 _ 2,168 67,640 14,330 213,568 2,992 _ _ _ 100 500 _ _ _ _ 2,482 5,209 600 33,228 3,182 60,241 750 500 120,373 6,966 35,792 2,156 908 1,235 58,555 154,675 1 28,926 7,619 15,901 20,628 _ 2,200 _ _ _ 20,811 16,164 _ _ _ _ 3,793 5 461 _ _ _ _ 9,354 91,225 278,174 3,183 85,374 29,175 32,104 143,201 6,966 38,274 7,365 120,209 _ _ _ 121,117 _ _ 2,700 _ 2,460 _ _ _ _ _ 5,160 67,640 31,658 233,011 _ _ 13,119 196,429 67,640 _ _ 2,168 _ 18,539 36,919 _ _ _ _ 10,457 201,699 3,873 9,721 $358,493 $1,667,527 $2,800 Enterprise Funds: Aviation Water Wastewater Solid Waste Convention Center Golf Course _ 2,481 Debt Service 51,234 156,271 64,146 36,388 55,480 (931) 266,987 296,518 180,099 116,461 10,573 9,081 Total Enterprise Funds $362,588 GRAND TOTAL $781,921 $2,812,396 $879,719 $ 337 $320,062 $1,116,064 $1,232,818 _ _ _ _ _ _ 62,553 _ _ $83,831 21,278 _ _ _ 6,334 16,317 9,208 5,274 2,736 357 333,165 436,472 235,037 147,575 125,870 7,793 $40,226 $1,285,912 67,942 40,889 _ 75 25,083 _ 72,201 _ $510,528 $246,915 206,869 185,365 94,993 108,048 41,146 8,049 35,572 58,481 34,901 4,507 42,849 _ 326 _ _ _ 67,640 _ 2,148 $232,215 77,172 94,195 70,776 22,533 18,590 849 20,883 3,992 20,495 1,311 _ 3,940 5,826 17,328 19,443 $989,658 $243,160 319,613 338,041 200,670 135,088 102,585 8,898 13,552 98,431 34,367 12,487 23,285 (1,105) $644,470 $176,310 $284,115 $1,104,895 $181,017 $4,300 $1,335,754 $1,322,629 $3,611,742 $2,238,302 $432,933 $516,330 $3,187,565 $424,177 *General fund sales tax revenue is reflected as a transfer from the excise tax fund. Total transfer equates to $756.4 million, and is included in the General Funds total of $1,021.5 million shown on Schedule 2. 179 SCHEDULE 2: REVENUES BY MAJOR SOURCE (In Thousands of Dollars) Revenue Source 2004-05 Actuals 2005-06 Estimate 2006-07 Budget $358,965 $405,150 $442,886 Increase/(Decrease) From 2005-06 Estimate Amount Percent $37,736) 9.3% GENERAL FUNDS Local Sales Taxes and Related Fees State-Shared Revenues State Sales Tax 123,788 140,520 144,557 4,037) 2.9 State Income Tax 121,440 138,313 166,390 28,077) 20.3 56,552 60,765 60,584 (181)) -0.3 $301,780 $339,598 $371,531 $31,933) 82,547 90,396 95,660 5,264) Vehicle License Tax Subtotal Primary Property Tax 9.4% 5.8 User Fees/Other Revenue Licenses & Permits 2,459 2,507 2,533 26) 1.0 Cable Communications 7,968 8,464 8,475 11) 0.1 19,301 21,485 23,110 1,625) 7.6 820 1,040 1,121 81) 7.8 +100 Fines & Forfeitures Court Default Fee Engineering & Architectural Services Fire Hazardous Materials Inspection Fees 1,122 2,514 1,392) 28,623 31,035 2,412) 8.4 1,346 1,325 1,325 0) 0.0 Library Fees 1,048 1,583 1,718 135) 8.5 Parks & Recreation 3,165 5,320 5,151 (169) ) -3.2 Planning Police 1,803 1,515 1,558 43) 2.8 11,111 11,700 11,822 1.0 Street Transportation 3,223 2,240 2,247 122) 7 Other Service Charges 14,035 14,988 17,117 2,129) 14.2 1,767 1,296 1,713 417 32.2 $99,692 $103,208 $111,439 $8,231) 8.0% $842,984 $938,352 $1,021,516 $83,164 8.9% Others Subtotal Total General Funds 180 2,930 28,716 0.3 SCHEDULE 2: REVENUES BY MAJOR SOURCE (Continued) (In Thousands of Dollars) Revenue Source Increase/(Decrease) From 2005-06 Estimate 2004-05 Actuals 2005-06 Estimate 2006-07 Budget $25,481 $29,554 $32,475 $2,921) 3,136 19,580 21,679 2,099) 10.7 6.2 Amount Percent SPECIAL REVENUE FUNDS Neighborhood Protection Public Safety Enhancement Parks and Preserves Transit 2000 Court Awards 9.9% 26,703 30,976 32,895 1,919) 136,211 149,847 162,407 12,560) 8.4 3,318 3,622 3,182 (440) -12.1 Development Services 52,450 57,261 60,241 2,980) 5.2 Capital Construction 18,437 20,435 21,561 1,126) 5.5 Sports Facilities 13,993 15,457 16,664 1,207) 7.8 Arizona Highway User Revenue 120,038 123,275 120,373 (2,902) -2.4 Local Transportation Assistance 7,136 7,035 6,966 (69) -1.0 Regional Transit Revenues 8,348 22,432 35,792 13,360) 59.6 0.2 Community Reinvestment Secondary Property Tax Impact Fee Program Administration Other Restricted Revenues 2,036 2,151 2,156 5) 101,466 110,461 120,209 9,748) 8.8 3,383 2,860 2,460 (400) -14.0 18,989 13,067 13,119 52) 0.4 Grants Public Housing Grants 69,947 75,833 74,068 (1,765) -2.3 Human Services Grants 47,884 44,527 32,839 (11,688) -26.2 Community Development 21,284 18,564 34,529 15,965) 86.0 Criminal Justice Grants 17,363 15,217 17,949 2,732) 18.0 Public Transit Grants 6,704 7,117 6,982 (135) -1.9 HOPE VI Grant 8,123 14,345 5,956 (8,389) -58.5 15,292 19,283 24,106 4,823) -25.0 $186,597 $194,886 $196,429 $1,543) 0.8 $727,722 $802,899 $848,608 $45,709) Aviation 228,947 244,372 266,987 22,615) 9.3 Water System 252,643 285,265 296,518 11,253) 3.9 Wastewater System 159,069 170,791 180,099 9,308) 5.4 Solid Waste 108,525 114,307 116,461 2,154) 1.9 57,415 65,993 73,126 7,133) 10.8 5,833 7,567 9,081 1,514) 20.0 $812,432 $888,295 $942,272 $53,977) 6.1% $2,383,138 $2,629,546 $2,812,396 $182,850) 7.0% Other Grants Subtotal - Grants Subtotal Special Revenue Funds 5.7% ENTERPRISE FUNDS Convention Center Golf Courses Subtotal Enterprise Funds GRAND TOTAL 181 SCHEDULE 3: EXPENDITURES BY DEPARTMENT (In Thousands of Dollars) Program 2004-05 Actual 2005-06 Estimate Percent Change from 2004-05 Actual General Government Mayor City Council City Manager Deputy City Managers Intergovernmental Programs Public Information City Auditor Equal Opportunity Personnel Phoenix Employment Relations Board Retirement Systems Law Information Technology City Clerk and Elections Finance Budget and Research Engineering and Architectural Services $2,344) 3,807) 1,236) 1,608) 1,277) 3,390) 2,462) 3,430) 14,438) 194) _) 3,898) 4,379) 6,739) 22,061) 3,612) (118)) $2,429) 4,316) 1,128) 1,768) 1,222) 3,192) 3,057) 3,807) 15,622) 220) ) 1) 4,230) 3,427) ) 7,724) 23,738) ) 3,907) (132) 3.6 13.4 (8.7) 10.0 (4.3) (5.8) 24.2 11.0 8.2 13.4 N/A) 8.5 (21.7) 14.6 7.6 8.2 11.9 4,568 9,954 6,640 26,320 4,307 568 6.2% 7.2 4.1 14.3 14.4 15.5 6.0 11.7 6.5 4.1 (100.0) 8.0 190.5 (14.0) 10.9 10.2 100.0 + Total General Government $74,757) 79,656) 6.6 $92,204 15.8 Public Safety Police Fire Emergency Management Family Advocacy Center 393,029) 188,573) 349) 969) 421,630) 218,778) 843) 1,093) 7.3 16.0 141.5 12.8 473,744 247,297 787 1,173 12.4 13.0 (6.6) 7.3 Total Public Safety 582,920) 642,344) 10.2 $723,001 12.6 Criminal Justice Municipal Court City Prosecutor Public Defender 34,885) 15,575) 3,714) 37,386) 16,386) 3,930) 7.2 5.2 5.8 41,885 17,340 4,346 12.0 5.8 10.6 Total Criminal Justice 54,174) 57,702) 6.5 $63,571 10.2 Transportation Street Transportation Aviation Public Transit 56,398) 144,143) 141,311) 58,624) 162,512) 164,584) 3.9 12.7 16.5 64,571 196,582 186,163 10.1 21.0 13.1 Total Transportation 341,852) 385,720) 12.8 $447,316 16.0 ) 182 2006-07 Budget $2,579 4,625 1,174 2,020 1,398 3,688 3,239 4,251 16,644 229 _ Percent Change from 2005-06 Estimate SCHEDULE 3: EXPENDITURES BY DEPARTMENT (Continued) (In Thousands of Dollars) Program 2004-05 Actual 2005-06 Estimate Community Development Development Services Planning Business Customer Service Center Housing Community and Economic Development Neighborhood Services HOPE VI Project Downtown Development $42,140 7,525 819 69,932 7,868 30,162 1 3,776 $48,965 7,245 722 67,681 21,743 28,589 ) _ $162,223 Percent Change from 2004-05 Actual 2006-07 Budget Percent Change from 2005-06 Estimate 15.0 4.8 0.8 31.4 2.2 74.7 N/A) 11.4 16.2 (3.7) (11.8) (3.2) 176.3 (5.2) (100.0) 3.1 $56,318 7,591 728 88,929 22,222 49,949 _ $178,838 10.2 $230,075 28.6 92,207 30,693 5,825 32,299 72,587 980 126 475 2,773 517 100,324 34,045 6,550 35,677 64,232 1,050 142 512 2,235 549 8.8 10.9 12.4 10.5 (11.5) 7.1 12.7 7.8 (19.4) 6.2 115,887 38,090 7,889 38,554 62,336 1,135 150 572 2,376 608 15.5 11.8 20.4 8.1 (3.0) 8.1 5.6 11.7 6.3 10.7 Total Community Enrichment 238,482 $245,316 2.9 $267,597 9.1 Environmental Services Water Services Solid Waste Management Public Works Environmental Programs 190,524 78,008 23,746 1,445 208,849 84,143 23,940 1,874 9.6 7.9 0.8 29.7 232,037 103,074 29,192 1,911 11.1 22.5 21.9 2.0 $293,723 $318,806 8.5 $366,214 14.9 _ _ N/A) $115,964 N/A) $1,748,131 $1,908,382 Total Community Development Community Enrichment Parks and Recreation Library Golf Phoenix Convention Center Human Services Education and Youth Programs Rio Salado Historic Preservation Office of Arts and Culture International and Sister Cities Programs Total Environmental Services Contingencies GRAND TOTAL* 3,893 9.2 4,338 $2,305,942 20.8 *Totals include City Improvement debt purchase payments included in department budget allocations for purposes of this schedule. 183 SCHEDULE 4: EXPENDITURES BY DEPARTMENT BY SOURCE OF FUNDS INCLUDING BUDGET CHANGES (In Thousands of Dollars) Program General Government Mayor City Council City Manager Deputy City Managers Intergovernmental Programs Public Information City Auditor Equal Opportunity Personnel Phoenix Employment Relations Board Retirement Systems Law Information Technology City Clerk and Elections Finance Budget and Research Engineering and Architectural Services $2,579 4,625 1,174 2,020 1,398 3,688 3,239 4,251 16,644 229 _ 4,568 9,774 6,640 26,320 4,307 568 Total Enterprise Funds $2,579 4,625 1,174 2,020 1,398 3,688 3,239 4,251 16,644 229 _ $2,393 4,625 1,174 1,687 1,387 3,680 3,239 3,878 15,270 229 _ _ _ _ 180 _ _ _ 4,568 9,954 6,640 26,320 4,307 568 4,519 7,999 6,477 24,464 3,851 550 1,710 _ _ 49 1,574 163 146 456 18 _ _ _ _ _ _ _ _ _ _ _ _ 333 _ _ _ _ _ _ _ _ 381 _ $186 _ _ _ 11 8 _ 373 1,374 _ _ Total General Government $92,024 180 $92,204 $85,422 $2,424 $4,358 Public Safety Police Fire Emergency Management Family Advocacy Center 469,035 243,624 787 1,173 4,709 3,673 _ _ 473,744 247,297 787 1,173 408,754 219,704 313 1,130 782 _ _ _ 64,208 27,593 474 43 $714,619 8,382 $723,001 $629,901 $782 $92,318 41,885 17,340 4,346 _ _ _ 41,885 17,340 4,346 34,130 16,871 4,346 _ _ _ 7,755 469 _ Total Criminal Justice $63,571 _ $63,571 $55,347 _ $8,224 Transportation Street Transportation Aviation Public Transit 64,571 186,469 182,705 _ 25,638 _ 26,146 _ 10,113 3,458 64,571 196,582 186,163 196,582 _ 38,933 _ 160,017 Total Transportation $433,745 $13,571 $447,316 $51,784 $196,582 $198,950 Total Public Safety Criminal Justice Municipal Court City Prosecutor Public Defender 184 Base Special Revenue Funds * General Funds Budget Changes SCHEDULE 4: EXPENDITURES BY DEPARTMENT BY SOURCE OF FUNDS INCLUDING BUDGET CHANGES (Continued) (In Thousands of Dollars) Enterprise Funds _ _ _ Base Total $54,974 7,591 728 88,929 22,222 49,949 _ $1,344 _ _ _ _ _ _ _ $56,318 7,591 728 88,929 22,222 49,949 _ 6,795 338 181 3,660 15,926 _ 4,338 Program Community Development Development Services Planning Business Customer Service Center Housing Community and Economic Development Neighborhood Services HOPE VI Project Downtown Development General Funds Budget Changes 4,338 390 _ Special Revenue Funds * $56,318 796 _ 728 _ _ 88,748 17,834 34,023 _ 3,815 417 106 $230,075 $30,715 $1,535 $197,825 115,887 38,090 7,889 38,554 62,336 1,135 150 572 2,376 608 108,000 36,915 _ 7,458 1,175 _ 1,995 27,111 897 150 572 1,305 608 429 _ 7,889 34,493 250 _ _ _ _ _ $267,597 $177,553 $43,061 $46,983 232,037 103,074 29,192 1,911 _ 1,026 21,222 1,474 231,930 102,048 _ 107 _ $366,214 $1,344 Total Community Development Community Enrichment Parks and Recreation Library Golf Phoenix Convention Center Human Services Education and Youth Programs Rio Salado Historic Preservation Office of Arts and Culture International and Sister Cities Program $228,731 111,528 37,098 7,889 37,938 62,105 1,135 150 572 2,376 608 4,359 992 _ 616 231 _ _ _ _ _ 2,066 34,975 238 _ _ 1,071 _ $6,198 Total Community Enrichment Environmental Services Water Services Solid Waste Management Public Works Environmental Programs $261,399 231,762 103,025 29,037 1,911 275 49 155 _ 237 7,970 200 $23,722 $334,215 $8,277 $115,964 $28,860 $65,871 $21,233 $2,305,942 $1,083,304 $644,470 $578,168 $479 Total Environmental Services $365,735 Contingencies $115,964 _ $30,154 GRAND TOTAL* $2,275,788 *Includes Grants and City Improvement debt service funds. 185 SCHEDULE 5: DEBT SERVICE EXPENDITURES BY PROGRAM AND SOURCE OF FUNDS (In Thousands of Dollars) Program 2004-05 Actual 2005-06 Estimate 2006-07 Budget Aviation Cultural Facilities Downtown Development Environmental Programs Fire Protection Freeway Mitigation Golf Historic Preservation Information Systems Libraries Local Streets/Street Improvements/Lighting Maintenance Service Centers Major Streets and Freeways Municipal Administration Building Neighborhood Preservation & Senior Services Centers Parks & Recreation/Open Space Phoenix Convention Center Police, Fire, and Computer Tech Police Protection Public Housing Public Transit Solid Waste Disposal Storm Sewer Street Lighting Refinancing Wastewater Water Early Redemption General Government Non-Profit Corporation Bonds Bond Issuance Costs $75,441 4,897 9,136 23 3,742 1,506 394 1,599 1,450 4,106 1,192 597 29,206 2,413 1,486 16,243 9,638 4,053 3,136 5,580 16,729 17,226 21,956 68 47,186 54,251 28,027 20,828 3,124 $74,574 6,626 7,020 146 3,918 1,093 579 2,316 1,322 5,077 2,750 864 31,247 2,379 5,242 18,023 20,424 5,320 3,728 12,235 29,276 17,797 24,202 68 58,899 83,168 14,888 23,809 4,803 $250,627 7,115 9,842 333 5,330 1,235 849 2,769 1,900 6,316 3,830 905 31,242 3,353 5,793 17,282 18,590 5,686 4,871 13,461 40,045 22,533 22,773 68 70,776 94,195 18,554 29,514 15,698 $385,233 $461,793 $705,485 Total Program 186 SCHEDULE 5: DEBT SERVICE EXPENDITURES BY PROGRAM AND SOURCE OF FUNDS (Continued) (In Thousands of Dollars) 2004-05 Actual 2005-06 Estimate 2006-07 Budget Secondary Property Tax Transit 2000 Sports Facilities Arizona Highway User Revenue City Improvement General Housing Transit 2000 Water Wastewater Grant Funds Aviation Water Wastewater Solid Waste Convention Center Golf $101,466 326 9,136 29,206 $109,653 327 7,020 31,247 $121,017 326 9,842 31,242 20,999 63 14,811 _ 23,856 _ 29,514 _ 19 2,142 63,468 54,249 47,185 17,226 9,638 394 27,356 34 51 2,139 62,272 83,168 58,899 17,797 20,424 579 38,126 _ _ 2,148 77,172 94,195 70,776 22,533 18,590 849 Subtotal Operating Funds $370,328 $444,822 $516,330 12,816 _ 439 11,860 1,031 3,143 _ 11,940 161,515 _ Program SOURCE OF FUNDS Operating Funds: Capital Funds: Aviation Bonds Passenger Facility Charge Convention Center Bonds Non-Profit Corporation Bonds 2001 Bonds Public Transit Bonds Wastewater CIC Bonds Water CIC Bonds 45 263 59 395 925 402 108 113 277 745 2,075 _ 5,626 7,254 Subtotal Capital Funds $14,905 $16,971 $189,155 Total Source of Funds $385,233 $461,793 $705,485 187 SCHEDULE 6: CAPITAL IMPROVEMENT PROGRAM FINANCED FROM OPERATING FUNDS (In Thousands of Dollars) Program 2004-05 Actual 2005-06 Estimate 2006-07 Budget Arts and Cultural Facilities Aviation Economic Development Energy Conservation Facilities Management Finance Fire Protection Historic Preservation HOPE VI Housing Information Technology Libraries Neighborhood Services Parks, Recreation and Mountain Preserves Phoenix Convention Center Public Transit Solid Waste Disposal Storm Sewers Streets - Major Streets Streets - Other Streets Streets - Traffic Improvements Wastewater Water $8,521) 15,581) 949) 946) 936) 1) 355) _) 7,958) 342) 5,172) (2) 1,728) 8,765) 1,058) 30,367) 2,975) 2,013) 31,693) 31,041) 9,256) 22,891) 51,177) $419 32,558 3,548 2,533 2,483 _ _ $3,545 35,663 1,170 1,500 9,534 _ _ 10 14,707 139 4,466 101 1,395 24,035 14,250 51,487 2,225 2,668 36,282 26,234 13,355 25,090 34,304 139 6,956 _ 2,860 299 1,698 68,289 42,080 66,200 3,836 2,216 52,269 30,622 12,329 34,208 57,520 $233,723) $292,289 $432,933 Total 188 SCHEDULE 6: CAPITAL IMPROVEMENT PROGRAM FINANCED FROM OPERATING FUNDS (Continued) (In Thousands of Dollars) 2004-05 Actual 2005-06 Estimate 2006-07 Budget General Funds: General Library $1,297) (2) $3,205 101 $9,409 299 Total General Funds $1,295) $3,306 $9,708 Special Revenue Funds: Parks and Preserves Transit 2000 Court Awards Development Services Capital Construction Arizona Highway Users Public Transit Community Reinvestment Community Development Block Grants (CDBG) HOPE Grant Other Restricted Grant Funds 7,916) 21,734) 50) _) 25,166) 55,089) _) 1,879) 3,719) 7,547) 9,191) 3,987) 21,486 35,642 _ _ 67,942 40,889 _ 19,736 65,153 13,402 3,030 2,016 14,345 386 846 75 25,083 72,201 25,662 1,469 2,476 5,956 3,873 1,289 $136,278) $176,042 $246,915 Enterprise Funds: Aviation Water Wastewater Solid Waste Convention Center 16,473) 51,439) 23,115) 4,209) 914) 32,385 36,139 26,368 2,350 15,699 35,572 58,481 34,901 4,507 42,849 Total Enterprise Funds $96,150) $112,941 $176,310 $233,723) $292,289 $432,933 Program SOURCE OF FUNDS Total Special Revenue Funds Total 189 SCHEDULE 7: NET INTERFUND TRANSFERS TO THE GENERAL FUND (In Thousands of Dollars) 2006-07 2004-05 Actual 2005-06 Estimate Budget Increase/ (Decrease) Aviation Central Service Cost Allocation $5,233 $6,121 $6,274 $153 Water Funds Central Service Cost Allocation In-Lieu Property Taxes Total 7,017 8,110 15,127 7,069 8,689 15,758 7,246 8,993 16,239 177 304 481 Wastewater Funds Central Service Cost Allocation In-Lieu Property Taxes Total 2,242 6,321 8,563 2,238 6,655 8,893 2,294 6,888 9,182 56 233 289 Solid Waste Central Service Cost Allocation In-Lieu Property Taxes Total 3,946 719 4,665 4,136 961 5,097 4,240 995 5,235 104 34 138 Convention Center Central Service Cost Allocation 2,000 2,095 2,147 52 337 342 351 9 $35,925 $38,306 $39,428 $1,122 TRANSFERS TO THE GENERAL FUND Enterprise Funds Golf Courses Parks Administration Total from Enterprise Funds 190 SCHEDULE 7: NET INTERFUND TRANSFERS TO THE GENERAL FUND (Continued) (In Thousands of Dollars) 2006-07 2004-05 Actual 2005-06 Estimate Budget Increase/ (Decrease) $606,652 $686,490 $756,366 $69,876 3,566 3,664 3,756 92 Sports Facilities - Central Service Costs Central Service Cost Allocation Phoenix Union Parking Maintenance Total 116 75 191 155 75 230 159 77 236 4 2 6 Public Housing In-Lieu Property Taxes 260 293 303 10 Total from Special Revenue Funds )$610,669 $690,677 $760,661 $69,984 Total Transfers to the General Fund )$646,594 $728,983 $800,089 $71,106 Transfer to Parking Trust Fund _ 121 121 _ Transfer to Special Risk Fund _ _ 781 781 1,000 3,575 4,150 575 20,766 23,856 29,514 5,658 $21,766 $27,552 $34,566 $7,014 $624,828 $701,431 $765,523 $64,092 Special Revenue Funds Excise Transfer to General Fund Development Services Central Service Cost Allocation Transfers from the General Fund Transfer to Capital Projects Fund Transfer to City Improvement Total Transfers from the General Fund Net Transfers to the General Fund 191 SCHEDULE 8: PERSONNEL SCHEDULE BY DEPARTMENT Number of Full-Time Equivalent Positions July 1, 2006 Authorized 20.0 55.0 8.0 21.0 6.3 32.0 37.5 38.0 112.4 2.0 15.0 242.0 210.0 129.2 310.5 32.0 110.1 21.0 55.0 6.0 22.0 6.3 31.0 38.5 40.0 113.4 2.0 15.0 246.0 213.0 129.2 313.5 33.0 112.1 1.0) _) _) _) _) 21.0 55.0 6.0 22.0 6.3 31.0 38.5 40.0 113.4 2.0 15.0 246.0 214.0 129.2 313.5 33.0 112.1 Total General Government 1,381.0 1,397.0 1.0) 1,398.0 Public Safety Police Fire Emergency Management Family Advocacy Center 4,161.7 1,873.2 6.5 5.0 4,168.7 1,886.2 6.5 7.0 144.0) 83.0) _) _) 4,312.7 1,969.2 6.5 7.0 Total Public Safety 6,046.4 6,068.4 227.0) 6,295.4 Criminal Justice Municipal Court Public Defender 374.9 7.6 384.9 9.0 _) _) 384.9 9.0 Total Criminal Justice 382.5 393.9 _) 393.9 Transportation Street Transportation Aviation Public Transit 764.7 769.7 86.0 776.7 803.7 92.0 5.3) 21.0) 5.0) 782.0 824.7 97.0 Total Transportation 1,620.4 1,672.4 31.3) 1,703.7 General Government Mayor City Council City Manager Deputy City Managers Intergovernmental Programs Public Information City Auditor Equal Opportunity Personnel Phoenix Employment Relations Board Retirement Systems Law Information Technology City Clerk and Elections Finance Budget and Research Engineering and Architectural Services 192 June 30, 2007 Authorized June 30, 2005 Authorized Program Changes _) _) _) _) _) _) _) _) _) _) _) _) SCHEDULE 8: PERSONNEL SCHEDULE BY DEPARTMENT Number of Full-Time Equivalent Positions (Continued) June 30, 2007 Authorized June 30, 2005 Authorized July 1, 2006 Authorized Community Development Development Services Planning Business Customer Service Center Housing Community and Economic Development Downtown Development Office Neighborhood Services HOPE VI Project 459.0 75.9 4.0 137.7 36.0 16.0 232.0 9.5 523.0 74.9 4.0 145.7 114.0 16.0 237.0 10.5 9.0 1.0 _ _ _ _ _ 1.0 532.0 75.9 4.0 145.7 114.0 16.0 237.0 11.5 Total Community Development 970.1 1,125.1 11.0 1,136.1 Community Enrichment Parks and Recreation Library Golf Phoenix Convention Center Human Services Education and Youth Rio Salado Historic Preservation Office of Arts and Culture International and Sister Cities Program 1,513.2 420.0 115.5 205.4 566.4 5.8 1.0 6.0 12.5 5.0 1,530.4 420.0 140.0 209.4 493.0 5.8 1.0 6.0 12.5 5.0 81.5 16.5 _ 5.0 7.8 _ _ _ _ _ 1,611.9 436.5 140.0 214.4 500.8 5.8 1.0 6.0 12.5 5.0 Total Community Enrichment 2,850.8 2,823.1 110.8 2,933.9 Environmental Services Water Services Solid Waste Management Public Works Environmental Programs 1,355.1 498.0 501.0 15.0 1,416.1 519.0 498.0 15.0 1.0 1.0 7.0 _ 1,417.1 520.0 505.0 15.0 Total Environmental Services 2,369.1 2,448.1 9.0 2,457.1 15,620.3 15,928.0 390.1 16,318.1 Program GRAND TOTAL Changes 193 Glossary Accrual Basis Accounting – The most commonly used accounting method, which reports income when earned and expenses when incurred, as opposed to cash basis accounting, which reports income when received and expenses when paid. For the city's Comprehensive Annual Financial Report (CAFR), Phoenix recognizes grant revenues on a modified cash basis. Generally Accepted Accounting Principles (GAAP) recognizes grant revenues on an accrual basis. Base Budget Allowances – Funding for ongoing expenditures for personnel, commodities, contractual services and replacement of existing equipment previously authorized. The base budget allowance provides funding to continue previously authorized services and programs. Bonds – Debt instruments that require Appropriation – An authorization granted by repayment of a specified principal amount on a certain date (maturity date), along with interest at a stated rate or according to a formula for determining the interest rate. the City Council to make expenditures and to incur obligations for purposes specified in the Appropriation Ordinances. Three appropriation ordinances are adopted each year: 1) the operating funds ordinance, 2) the capital funds ordinance, and 3) the re-appropriated funds ordinance. Bond Rating – An evaluation of a bond issuer's credit quality and perceived ability to pay the principal and interest on time and in full. Two agencies regularly review city bonds and generate bond ratings - Moody's Investors Service and Standard and Poor's Ratings Group. Arizona Highway User Revenue (AHUR) – Various gas tax and vehicle licensing fees imposed and collected by the state and shared with cities and towns. This revenue must be used for street or highway purposes. Balanced Budget – Arizona law (Title 42 Arizona Revised Statutes) requires the City Council to annually adopt a balanced budget by purpose of public expense. State law defines this balanced budget as “the primary property tax levy, when added together with all other available resources, must equal these expenditures.” Therefore, no General Fund balances can be budgeted in reserve for subsequent fiscal years. Instead, an amount for contingencies (also commonly referred to as a “rainy day fund”) is included in the budget each year. The City Charter also requires an annual balanced budget. The Charter further requires that “the total of proposed expenditures shall not exceed the total of estimated income and fund balances.” Budget – A plan of financial operation for a specific time period (the city of Phoenix's adopted budget is for a fiscal year July 1 June 30). The budget contains the estimated expenditures needed to continue the city's operations for the fiscal year and revenues anticipated to finance them. Capital Budget – See Capital Improvement Capital Outlay – Items that cost more than $5,000 and have a useful life of more than two years. Capital Project – New facility, technology system, land acquisition or equipment acquisition, or improvements to existing facilities beyond routine maintenance. Capital projects are included in the Capital Improvement Program and become fixed assets. Carryover – Expenditure originally planned for in the current fiscal year, but because of delays, is postponed to the following fiscal year. CDBG – See Community Development Block Grant. Central Service Cost Allocation – The method of distributing expenses for general staff and administrative overhead to the benefiting activity. CIP – See Capital Improvement Program. City Connection – Weekly employee newsletter provided in print and e-mail containing information about the organization, news about employees, and personnel and benefits updates. Program. City Manager’s Budget – See Preliminary Capital Funds – Resources derived from issuance of bonds for specific purposes, related federal project grants and participation from other agencies used to finance capital expenditures. Capital Improvement Program (CIP) – A plan for capital expenditures needed to maintain and expand the public infrastructure (for example, roads, sewers, water lines or parks). It projects these infrastructure needs for a set number of years and is updated annually to reflect the latest priorities, cost estimates or changing financial strategies. The first year of the adopted Capital Improvement Program becomes the Annual Capital Budget. Budget. Commodities – Consumable goods such as office supplies, repair and replacement parts, small tools and fuel, which are not of a capital nature. Community Development Block Grant (CDBG) – Grant funds allocated by the federal government to the city of Phoenix to use for the prevention and removal of slum and blight, and to benefit low- and moderate-income persons. The city disburses these funds through an annual application process open to all nonprofit organizations and city departments. 195 Contingency – An appropriation of funds to cover unforeseen events that occur during the fiscal year, such as flood emergencies, federal mandates shortfalls in revenue and similar eventualities. Contractual Services – Expenditures for services performed by firms, individuals or other city departments. Council-Manager Form of Government – An organizational structure in which the Mayor and City Council appoint an independent city manager to be the chief operating officer of a local government. In practice, a City Council sets policies and the city manager is responsible for implementing those policies effectively and efficiently. Court Awards Fund – Revenues provided Enterprise Funds – Funds that are accounted for in a manner similar to a private business. Enterprise funds usually recover their costs (including depreciation) through user fees. The city has five such self-supporting funds: Aviation, Water, Wastewater, Golf and Solid Waste. In addition, the Phoenix Convention Center fund, which is primarily supported by earmarked excise taxes, uses enterprise fund accounting to provide for the periodic determination of net income. Estimate – The most recent prediction of current year revenue and expenditures. Estimates are based upon several months of actual expenditure and revenue information and are prepared to consider the impact of unanticipated costs or other economic changes. by court awards of confiscated property under both the federal and state organized crime acts. These funds are used for additional law enforcement activities in the Police and Law departments. Excise Tax Fund – This fund is used to account for tax revenues ultimately pledged to pay principal and interest on various debt obligations. This fund includes local sales taxes, state-shared sales taxes, state-shared income taxes and sales tax license fees. Cycle Time – The amount of time, from the Expenditures – Refers to current cash customer’s perspective, it takes to complete a defined task, process or service. operating expenses and encumbrances. Debt Service – Payment of principal and Limit interest on an obligation resulting from the issuance of bonds. Fire Neighborhood Protection Fund – an asset due to general wear and tear or obsolescence. Encumbrance – A reservation of funds to cover purchase orders, contracts or other funding commitments that are yet to be fulfilled. The budget basis of accounting considers an encumbrance to be the equivalent of expenditure. This fund is the Fire portion of a voter-approved 0.1 percent sales tax increase approved by the voters in October 1993. Fiscal Year – The city’s charter designates July 1 to June 30 as the fiscal year. FTE – See Full-Time Equivalent Position. Full-Time Equivalent Position (FTE) – A position converted to the decimal equivalent of a full-time position based on 2,080 hours per year. For example, a part-time clerk working for 20 hours per week would be equivalent to one-half of a full-time position or 0.5 FTE. Fund – An independent governmental accounting entity with a self-balancing group of accounts including assets, liabilities and fund balance, which record all financial transactions for specific activities of government functions. 196 GAAP – See Generally Accepted Accounting Principles. General Obligation Bonds (G.O. Bonds) – Bonds that require voter approval and finance a variety of public capital projects such as streets, buildings, parks and improvements The bonds are backed by the “full faith and credit” of the issuing government. General Funds – Resources derived from taxes and fees that have unrestricted use, meaning they are not earmarked for specific purposes. Generally Accepted Accounting Principles (GAAP) – Uniform minimum standards of financial accounting and reporting that govern the form and content of basic financial statements. The city's Comprehensive Annual Financial Report (CAFR) outlines adjustments needed to convert Phoenix's budget basis of accounting to a GAAP basis. GFOA – Government Finance Officers Expenditure Limit – See State Expenditure Depreciation – The decline in the value of Fund Balance – As used in the budget, the excess of resources over expenditures. The beginning fund balance is the residual funds brought forward from the previous fiscal year. Association Goal – A statement of broad direction, purpose or intent based on the needs of the community. A goal is general and timeless; that is, it is not concerned with a specific achievement in a given time period. G. O. Bonds – See General Obligation Bonds. Grant – A contribution by one government unit or funding source to another. The contribution is usually made to aid in the support of a specified function (e.g., library materials or drug enforcement, but it is sometimes for general purposes). HUD – U.S. Department of Housing and Urban Development Infrastructure – Facilities that support the daily life and growth of the city, for example, roads, water lines, sewers, public buildings, parks and airports. Impact Fees – Fees adopted by the City Ordinance – A formal legislative enactment by Preliminary Budget – A balanced budget Council in 1987 requiring new development in the city's outlying planning areas to pay its proportional share of the costs associated with providing necessary public infrastructure. the City Council. If it is not in conflict with any higher form of law, such as a state statute or constitutional provision, it has the full force and effect of law within the boundaries of the city. Improvement Districts – Special assessment Outstanding Bonds – Bonds not yet retired through principal and interest payments. presented to the City Council by the city manager (sometimes referred to as the City Manager's Budget) based upon an earlier Trial Budget, City Council and community feedback and/or changing economic forecasts. Any City Council changes to the Preliminary Budget are incorporated into the final adopted budget. districts formed by property owners who desire and are willing to pay for mutually enjoyed improvements such as streets, sidewalks, sewers and lighting. In-Lieu Property Taxes – An amount charged to certain city enterprise and federally funded operations that equal the city property taxes that would be due on plant and equipment if these operations were for-profit companies. This includes the Water, Wastewater, Solid Waste and Public Housing funds. Parks and Preserves Fund – This fund is used to account for the funds generated by the 0.1 percent increase in the sales tax approved by voters in 1999. The funds are to be used for the purchase of state trust lands for the Sonoran Desert Preserve Open Space, and the development of regional and neighborhood parks to enhance community safety and recreation. Pay-As-You-Go Capital Projects – Capital Levy – See Tax Levy. Mandate – Legislation passed by the state or federal government requiring action or provision of services and/or programs. Examples include the Americans with Disabilities Act, which requires actions such as physical facility improvements and provision of specialized transportation services. MBE/WBE – Minority- and Women-Owned Business Enterprise Net Direct Debt Ratio – The ratio between property tax-supported debt service and secondary assessed valuation. The Net Direct Debt Ratio is one way to gauge the ability of a local property tax base to support general obligation debt service. projects whose funding comes from day-to-day city operating revenue sources. Percent for Art – An ordinance that allocates up to 1 percent of the city's capital improvement budget to fund public art projects. Privilege License Tax (PLT) – The city of Phoenix's local sales tax, made up of more than 14 general categories. Privilege License Tax Fees – Includes fees charged for Privilege License Tax (PLT) Licenses and the annual fee per apartment unit on the rental of non-transient lodging. Fees recover the costs associated with administering an efficient and equitable system. A PLT license allows the licensee the privilege to conduct taxable business activities and to collect and remit those taxes. Personal Services – All costs related to Program – A group of related activities performed by one or more organizational units. compensating city employees including employee benefits costs such as contributions for retirement, social security, and health and industrial insurance. It also includes fees paid to elected officials, jurors, and election judges and clerks. It does not include fees for professional or other services. Property Tax – A levy upon each $100 of assessed valuation of property within the city of Phoenix. Arizona has two types of property taxes. Primary property taxes support the city's General Fund and secondary property taxes pay general obligation debt. accomplishments that can be measured and achieved within a given time frame, and advances the activity and organization toward a corresponding goal. Plan Six Agreements – Agreements to provide funding to accelerate the construction of the Waddell and Cliff dams, and modification of the Roosevelt and Stewart dams, for the benefit of the city of Phoenix. These benefits include the use of additional unappropriated water, controlling floods, improving the safety of existing dams, and providing new and improved recreational facilities. Operating Funds – Resources derived from PLT – See Privilege License Tax. continuing revenue sources used to finance ongoing operating expenditures and “pay-as-you-go” capital projects. Police Neighborhood Protection Fund – Objective – Desired output-oriented Primary Property Tax – A tax levy that can be used to support any public expense. Public Safety Enhancement Funds – The Public Safety Enhancement Funds are used to account for a 2.0 percent increment of the 2.7 percent sales tax on utilities with franchise agreements. The Police Public Safety Enhancement Fund is dedicated to Police and Emergency Management needs and receives 62 percent of the revenues generated. The Fire Public Safety Enhancement Fund is dedicated to Fire needs and receives 38 percent of the revenues generated. This fund is the Police portion of a voterapproved 0.1 percent sales tax increase approved by the voters in October 1993. 197 Reappropriated Funds – Funds for contracts entered in a previous fiscal year but which are still in progress. Recoveries – Canceled prior year encumbrances. Sports Facilities Fund – A special revenue fund established to account for revenue raised from a designated portion of the hotel/motel tax and tax on short-term motor vehicle rentals. These funds pay the city's portion of the debt service and other expenditures related to the downtown sports arena. RPTA – Regional Public Transportation Authority Resources – Total amounts available for appropriation including estimated revenues, fund transfers and beginning fund balances. Restricted Funds – See Special Revenue Fund. State Expenditure Limit – A limitation on annual expenditures imposed by the Arizona Constitution as approved by the voters in 1980. The limitation is based upon a city's actual 1979-80 expenditures adjusted for interim growth in population and inflation. Certain expenditures may be exempt by the state Constitution or by voter action. Transit 2000 Fund – This fund is used to account for the 0.4 percent sales tax dedicated to transit approved by voters on March 14, 2000. Also included in this fund are fare box collections and DASH revenues. Trial Budget – A budget developed in early spring that presents a proposed balanced budget for discussion by the City Council and the community before the city manager submits his or her Preliminary Budget in late spring. User Fees or User Charges – A fee paid for a public service or use of a public facility by the individual or organization benefiting from the service. Salary Savings – Budget savings realized through employee turnover. Secondary Property Tax – A tax levy restricted to the payment of debt service on bonded debt. The secondary property tax when combined with the primary property tax levy produces a total rate of $1.82 per $100 of assessed valuation. Self-Insurance – Self-funding of insurance losses. With the exception of airport operations, police aircraft operations, and excess general and automobile liability for losses in excess of $2 million, the city is self-insured for general and automobile liability exposures. 198 State-Shared Revenues – Revenues levied and collected by the state but shared with local governments as determined by state government each year. In Arizona, a portion of the state's sales, income and vehicle license tax revenues are distributed on the basis of a city's relative population percentage. Supplemental – Resources to provide new or enhanced programs or services over the base budget allocation. Tax Levy – The total amount to be raised by general property taxes for purposes specified in the Tax Levy Ordinance. Special Revenue Fund – A fund used to Technical Review – A detailed line-item review account for receipts from revenue sources that have been earmarked for specific activities and related expenditures. Examples include Arizona Highway User Revenue (AHUR) funds, which must be used for street and highway purposes, and secondary property tax, which is restricted to general-bonded debt obligations. of each city department's budget conducted by the Budget and Research Department. Zero Base Budgeting – A process for allocating financial resources that provides for the comparison and prioritization of existing and proposed programs and services. The process includes organizing expenditures in individual decision packages and priority ranking all decision packages.