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 David Krietor Deputy City Manager Gloria Hurtado Human Services Director Rick Naimark Deputy City Manager Robert Khan Fire Chief Dave Siebert Vice Mayor District 1 Ruth Osuna Deputy City Manager Mark E. Leonard Public Works Director Peggy Neely District 2 Cynthia Seelhammer Deputy City Manager Lionel Lyons Development Services Director Peggy A. Bilsten District 3 Tom Callow Transportation Manager Toni Maccarone Public Information Director Tom Simplot District 4 David E. Richert Special Assistant to the City Manager Donald Maxwell Community and Economic Development Director Karen Peters Intergovernmental Programs Director Jerome S. Miller Neighborhood Services Director Jack F. Harris Public Safety Manager Danny Murphy Acting Aviation Director Department Heads Mario Paniagua City Clerk Wylie Bearup City Engineer Tammy J. Perkins Acting Water Services Director Ross Blakley Acting Street Transportation Director Cecile Pettle Budget and Research Director John Chan Downtown Development Director Janet Smith Personnel Director Carole Coles Henry Equal Opportunity Director Randy Spenla City Auditor Debbie Cotton Public Transit Director Debra Stark Planning Director Kim Dorney Housing Director Charles Thompson Sr. Chief Information Officer Toni Garvey City Librarian Gary Verburg City Attorney Jay Green Convention Center Director Bob Wingenroth Finance Director Sara L. Hensley Parks and Recreation Director Chief Presiding Judge Phil Gordon Mayor Claude Mattox District 5 Greg Stanton District 6 Doug Lingner District 7 Michael Johnson District 8 Mayor’s Office Ed Zuercher Chief of Staff City Council Office P.J. Jasso Chief of Staff Management Staff Frank Fairbanks City Manager Alton Washington Assistant City Manager David Cavazos Deputy City Manager 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 PUBLIC SAFETY MANAGER DEPUTY CITY MANAGER DEPUTY CITY MANAGER DEPUTY CITY MANAGER SPECIAL ASSISTANT TO THE CITY MANAGER Criminal Justice Coordination Community Preparedness Human Services Arts & Culture Budget & Research Phoenix Convention Center Downtown Development Office Environmental Programs Police Library Equal Opportunity Finance Hope VI Education Economic Development Fire Parks & Recreation Housing Historic Preservation State Land Programs Planning Personnel Committee Law Personnel MWSBE Program Information Technology Court Liaison Water Public Information 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 v Budget Document Overview This overview outlines the 2007-08 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 2007-12 Capital Improvement Program provides Phoenix’s planned construction program by project and detailed sources of funds. A more detailed description of the 2007-08 Phoenix Summary Budget follows. CITY MANAGER’S BUDGET MESSAGE The City Manager’s Budget Message provides 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 a few of the awards and recognitions received by employees this year, 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 demographic, financial and infrastructure profile measures. Estimates or projections are provided for 2006-07 and 2007-08 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 2007-12 Capital Improvement Program. SCHEDULES 2007-08 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 2007-08 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 I 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 numerical 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. 2007-08 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, 2006. 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 2007-08 Annual Budget I want to thank the Mayor and City Council, the community and city staff for working together to balance our budget. Also, I want to say thank you to the hundreds of residents who took the time to attend a budget hearing or send comments by e-mail and voice mail. For years, even when reductions were necessary, Phoenix has produced a balanced budget using collaboration and team work. I look forward to working with the Mayor and City Council in making final budget decisions. needed to replace an expiring victim’s services grant. In addition, the following costs are recommended in this budget: ■ ■ OUR OUTLOOK FOR THE UPCOMING 2007-08 FISCAL YEAR Estimated General Fund Revenues TO THE HONORABLE MAYOR AND CITY COUNCIL: This letter transmits our recommended balanced budget for the upcoming 2007-08 fiscal year. No service reductions were necessary in this budget. For the first time in several years, we are able to recommend restoring some of the service cuts necessary in recent years as well as propose some new services. We continued our process of rigorous budget reviews and reduced spending where it had no impact on service delivery. We are recommending a variety of community service improvements including opening the new police crime lab and the new Pecos Park Police Station; significantly increasing summer shelter capacity for homeless women and children; operating and maintaining new parks; improving maintenance at existing parks; increasing swimming pool and community center hours; preparing for the opening of a new library and restoring cut hours to existing libraries; increasing senior programming and food services; improving the abatement and enforcement of graffiti; restoring street maintenance funding; establishing a wash maintenance program and adding transit services. Our General Fund revenue growth is expected to be moderate next year, but still reflect a solid local economy. Local economists are now saying that peak growth in the local economy occurred last summer. Overall, we estimate that General Fund revenues will grow by 9.2 percent. This is decreased three percentage points from the growth rate achieved in 2005-06, and is decreased one percentage point from the pre-census revenue growth estimated for this year. This overall growth assumes that local sales tax revenues will grow by 6.9 percent and state-shared sales taxes will grow by 6.8 percent. State-shared income taxes, however, will grow by 24 percent as cities begin to share in peak state income taxes collected by the state last year. ■ ■ ■ Estimated General Fund Costs There are several critical public safety issues that we recommend be dealt with in this budget. As the job market becomes increasingly competitive, finding candidates for police and firefighter positions will be challenging. This budget recommends $1.5 million to improve public safety starting salaries to help us attract the best candidates to our city. Also, $1.6 million is required to begin a three-year program to replace police patrol mobile computer terminals. And, $350,000 is ■ The budget includes the costs of the second year of a two-year agreement with our employee groups as well as increased pension and other related benefit costs. The annual required contribution necessary to fully fund and comply with GASB 45 is included in this budget. Our employees worked hard to restructure their post employment health benefits in order to reduce the impact of GASB 45 while still adequately and fairly providing for health care for our current and future retirees. Our program is a model for other cities. The budget includes $5.7 million required to transition 80 police officers from grants to the General Fund. We are recommending a catch-up level of vehicle replacements. This catch-up will avoid future repair costs and the future potential for mid-year disruptions in city operations. We also have included an increased level of funding for technology replacements and requirements. We are recommending $2.2 million to partially restore Transit and Streets General Fund support. We also have proposed $2.4 million to increase the contingency fund from 2.7 to 2.9 percent. Also, an additional $700,000 is needed to pay Maricopa County’s jail rate for 2007-08. We recommend stepping up the payment schedule to more quickly retire the debt financing used to acquire major equipment and repairs over the last several years. This will reduce interest costs in the long run. 5 The net effect is that a small balance is available in the General Fund to make some improvements to community services next year. Our recommendations are briefly described below. More detailed descriptions are provided later in this document. RECOMMENDATIONS FOR THE GENERAL FUND Police Department Recommendations for the Police Department include funding for the critical issues described above and opening and operating the new crime lab and the new Pecos Park Police Station. Funding is proposed to implement the 800Mhz biannual radio maintenance program and additional communications operators are recommended to keep pace with call volumes and to provide trained operators in advance of two new precinct stations. Police officers assigned to expiring JAIBG, GREAT and COPS are proposed for General funding and a police sergeant will be added to the Airport and paid for with Airport fees. Finally, we recommend that eight police officers and a sergeant along with civilian security guards be added with Transit 2000 funds to provide security for bus routes and park-and-ride facilities. The plan approved by the voters included increased security on our bus lines and in and near transit facilities. Fire Department The budget recommended for the Fire Department includes additional communications operators and matching funds required to continue Fire Crisis Response Units. Additional staff is proposed for fire inspections of child and elderly care facilities, hospitals and group homes. Further enhancements to the recruitment of minorities and women also are recommended. We recommend adding technical staff to maintain the regional dispatch system. This staff will be paid for by the fees paid by the other cities. Eight sworn fire positions are necessary to comply with the fourth mandatory paid leave day called for in our two-year agreement with the firefighters. 6 Finally, we recommend several fire prevention positions be added to keep pace with reviewing plans for new construction. These positions will be funded will new construction permit fees. Other Public Safety and Criminal Justice We recommend the addition of case work staff to the Family Advocacy Center to ensure continued compliance with Board of Behavioral Health rules and the addition of technology help to the Prosecutor’s Office to keep the case management system operational. Also, the Prosecutor’s Initial Arraignment pilot program has proven to reduce jail days. We recommend continued funding for this program that saves jail costs in the long run. Finally, we recommend the courtroom dedicated to hearing complex property maintenance cases be restored. Also recommended for the Municipal Court is a technology position to complete improvements to court technology systems. Parks Department The recommended budget for the Parks Department includes the costs necessary to operate and maintain several new parks facilities and funding to begin restoring the parks and street landscape maintenance cuts necessary over the last few years. Also recommended is the restoration of the swimming pool season with pools staying open on the weekend after school starts until Labor Day. Funding also is recommended to improve after-school recreation. Finally, due to the comments we heard during our budget hearings, we recommend that some community center hours be restored and that a small amount of funding be provided to begin making improvements to the historic cemetery at 15th Avenue and Durango Street. Library Department Recommendations for the Library Department include the costs for the staff necessary to prepare for the opening of the new Agave Library. Also recommended is the restoration of morning service. The libraries are recommended to open Monday through Saturday at 9 a.m. rather than the current 10 a.m. Housing and Human Services The recommended budget for the Housing Department includes the reuse of in lieu property taxes currently paid by federal housing funds. This will allow these federal dollars to be directed to public housing needs and help offset federal funding cuts. Also proposed is providing General funds to complete the HOPE VI project rather than using already scarce Housing funds. In Human Services, increases in senior programming and food services are recommended. Funding to begin restoring summer youth jobs is recommended. Finally, funding to operate the Watkins Homeless Shelter for women and children during the summer months is recommended. Due to our very hot summers, the availability of shelter in the summer is as crucial as shelter during the winter months. Other Community Service Increases Increases also are recommended to respond to workload increases that accumulated during those years when funding was not available to keep pace with workload demands. Additions are proposed to improve code enforcement, especially the more difficult cases, to improve graffiti removal and enforcement, and to maintain code enforcement case management technology. Funding is recommended to enhance management and coordination of dust control efforts and to improve historic preservation customer service. We also recommend staff be added to help manage the historic preservation bond program and the percent-for-art program. The restoration of some arts grants and sister cities funding is proposed as well as additional Planning and M//W/SBE staff to respond to current workloads. Finally, we recommend establishing an ongoing wash maintenance program and increasing the rate of restoring street maintenance funding. staff to maintain service levels at the customer service call center. The pilot odor control program along Southern Avenue is proposed for ongoing funding. RECOMMENDATIONS FOR TRANSIT 2000 FUNDS RECOMMENDATIONS FOR SOLID WASTE FUNDS The budget recommends numerous fixed-route bus improvements; the implementation of five new neighborhood circulator bus routes and several improvements to Dial-a-Ride services. Also recommended are the costs necessary to operate and maintain the new West Maintenance Facility; warranty maintenance to keep costs as low as possible and the necessary internal control oversight to keep pace with the growing services being provided. Finally, as described earlier, Transit 2000 funds also are proposed to pay for police officers and other security staff necessary to keep our routes and transit facilities safe. All of these recommendations follow the transit plan approved by the voters in 2000. Recommendations for Solid Waste funds include staff and costs necessary to keep pace with growth in residential units and staff necessary to clean up illegally dumped waste. RECOMMENDATIONS FOR THE DEVELOPMENT SERVICES FUND Our recommendations for the Development Service Fund include several initiatives recommended by a recent organizational analysis and additions to the customer counter to reduce wait times. RECOMMENDATIONS FOR THE CONVENTION CENTER FUND Recommended additions for the Phoenix Convention Center include the staff and costs necessary to operate and maintain the new West Building; staff and costs necessary to provide for the expanded service needs of those attending events; and additional fiscal staff necessary to provide proper fiscal oversight to the Convention Center’s expanded operations. RECOMMENDATIONS FOR WATER AND WASTEWATER FUNDS The recommended Water and Wastewater budget includes a meter replacement program focused on aging and inaccurate meters; the addition of a rapid-response crew to perform emergency repairs and PRODUCTIVITY IMPROVEMENTS FUND NEEDED ADMINISTRATIVE SUPPORT For many years we have given city departments the opportunity to use cost reductions within their budgets to fund needed administrative support. After several years of cuts concentrated in the administrative areas of the budget, administrative help is needed in most city departments. This budget recommends reallocation of already budgeted funds to accomplish important goals including improved boards and commissions support services; better compliance with environmental construction standards; and greater ability to keep up with workloads in recruiting, testing and labor relations. Also recommended is an ongoing vehicle impound program; better support of the GIS system and improved response to requests for utility inspections. These self-funded positions will begin to deal with some of the significant administrative cuts these departments have endured over the past few years. An important step is the five-year Phoenix Economic Development Plan that will be presented to the Mayor and City Council for their discussion and review on May 22. The plan, which results from months of work, addresses all aspects of economic development and all areas of the city. The plan is built around eight goals: ■ ■ Create and retain high-quality jobs focusing on key business sectors. Foster an environment for entrepreneurial growth. ■ Revitalize the urban areas of Phoenix. ■ Expand the city’s revenue base. ■ ■ ■ ■ Develop and train qualified talent to meet the needs of business. Enhance and improve the quality of life for Phoenix residents. Pursue improvements in the foundations of economic vitality. Plan and strategize for the future. CONCLUSION Over the past few years it was necessary to reduce the employee resources available to deliver services to the community. Citizen surveys show that despite these reductions, city employees found ways to deliver the best in community services. I want to thank them for their hard work and dedication. LOOKING AHEAD Looking ahead, we have to continue our focus on protecting and expanding our revenue base. Like all Arizona cities, we rely on our local sales tax – especially local retail sales tax - to provide the revenues necessary to meet our resident’s service demands. We have to continue to work to keep tax generators in Phoenix and to provide economic development to all areas of the community. We can’t focus on just one geographic area of the city. Frank Fairbanks City Manager May 1, 2007 7 bl ic h oe n ix P u a to r fo r P in d m on g 25 a or co is . F in ch se rv ic es rd a en w te A d ic e a n d n n a a n L ib ra ri p u bl ic se rv ch , ch il d re Yo rk T im es ts ta n d in g ew ou C a ro l F in N r fo 06 ed 20 iz on th e re co gn L ib ra ry, w w h o w er e a to rs . a ti on w id e n ei r n om in s th n a on ri a d a h li br ey th ct a e im p th e p os it iv 8 0 Our Commitment To Excellence We continue to provide our community with innovative public services: completing the light rail project, welcoming students to ASU’s new downtown campus, and opening the Phoenix Convention Center’s new West Building to name a few. Customer service is a critical focus for us. Our customers are residents seeking information and assistance, companies looking to relocate to Phoenix, neighborhoods working to improve, city departments receiving internal services, and people who are visiting or driving through our city. Our employees practice continuous improvement as part of their daily business. Phoenix employees work as individuals and on teams to deliver better services with fewer resources. They look for innovative ways to deliver services at the lowest cost. We partner with the community to make Phoenix a better place to live, work and play. We are proud to be among the very best and we 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 for their commitment to excellence. Following is a list of just a few of the awards and recognitions received by the city and its staff during the course of the fiscal year: ■ ■ ■ Carol Finch, children and teen services coordinator for Phoenix Public Library, is a winner of the 2006 New York Times Librarian Award. Finch is among 25 librarians nationwide who are being recognized for outstanding public service and the positive impact they had on their nominators. The Times, which received more than 1,300 nominations from 45 states, will honor the winners Dec. 13 at a ceremony and reception in New York. Each will receive $2,500 and a commemorative plaque. Phoenix Sky Harbor International Airport received the 2006 Air Carrier Airport Safety Award from the Federal Aviation Administration Western Pacific Airports District Office. Sky Harbor received the honor for its innovative solutions and partnerships that have resulted in enhanced airport safety. The Parks and Recreation Department won the ASA (Amateur Softball Association) Award of Excellence for conducting two of the highest-rated national championships in 2006. Parks and Recreation was presented the award at the group’s annual business meeting in Colorado Springs. The city hosted the 2006 ASA Coed Major National Championship and the 18 and under 2006 Girls Western National Championship. ■ ■ ■ Neighborhood Services Department was recognized by the National Association of State Chief Information Officers and the Public Technology Institute as one of 23 programs nationwide with a “Best in Tech” annual award for enhancing government services through innovative adaptations of technology. The Rio Salado Environmental Restoration Project won top honors – the President’s Award – in the 26th Annual Valley Forward Environmental Excellence Awards program. Rio Salado, a five-mile urban wildlife and habitat project, was recognized for restoring life back to a once dry and barren Salt River and serving as a catalyst for revitalizing areas well beyond its banks. Phoenix City Librarian Toni Garvey received the Rosenzweig Distinguished Service Award from the Arizona State Library Association. The award is given to a library professional who has, over the past 10 years, exhibited effectiveness regionally and statewide in the promotion of libraries and library services. Garvey was recognized for her work with community partnerships such as the Phoenix Public Library Foundation, Friends of the Phoenix Public Library, the Arizona Republic, the Arizona Diamondbacks and other groups. 9 ■ ■ United Blood Services presented the city with six “Valentines for Life” awards for donating 1,387 units of blood in 2006. The specific areas of the organization that were recognized for going above and beyond include: the Police Academy, Police Headquarters, Phoenix City Hall, the Aviation Department, Fire Department Administration and the Phoenix Convention Center. SustainLane, a group that compiles information on sustainability, has ranked Phoenix seventh in its listing of the top 10 large U.S. cities who are running the highest percentage of their municipal vehicle fleets on alternative fuels. The report found that Phoenix runs 28 percent of its fleet with compressed or liquid natural gas or biodiesel. ■ ■ Carole Coles Henry, Equal Opportunity Department director, was honored by the ASU West Black History Month Committee with the Pioneer Award. The annual award recognizes African-Americans who have made significant contributions to the life and culture of the Phoenix metropolitan area. The National Parks and Recreation Association awarded its “Excellence in Aquatics Award,” to the Phoenix Parks and Recreation Department at its annual National Aquatics Conference in Atlanta. The Phoenix Parks and Recreation Department earned the award for cities with more than 500,000 residents. This is the third time the department has won the award. The National Excellence in Aquatics Award honors agencies that demonstrate excellence in planning and managing diversified aquatic services. It is given to only one city in each size category and is recognition of the best-run aquatics system in the country. ■ Aviation Department employee Johnnie Funderburg was recognized and honored by the Greater Phoenix Black Chamber of Commerce as Community Advocate of the Year. Johnnie is the outreach project manager for the Business and Properties area of the airport. She works in the community partnering with citizens and businesses that do business with the city. ow ca se ge th er to sh p lo y ee s to em . ty ty si ci er gs id u a l d iv ti on br in th ei r in d iv ty C el eb ra a l D iv er si a s w el l a s u es n n ic a ct e h ra T st p rt m en t’ s be th ei r d ep a 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! The Valley of the Sun United Way recognized the city with an Innovative Campaign Partnership Award in 2006 when employees donated more than $1,426,576 to the Community Service Fund Drive. The fund drive provides resources to hundreds of agencies that provide health and social services to our community. ■ Matthew Bertram with Parks and Recreation personifies the Vision and Values statement, “We each do all we can” – even under the most tragic circumstances. Bertram works at the Longview Recreation Center. One of the center’s participants, a young boy active in the center’s youth basketball program, was diagnosed with a malignant brain tumor. When it came time to award team trophies, Bertram arranged to have the presentation at Phoenix Children’s Hospital. He felt it was important that the youngster celebrate a successful season with his teammates. N a th a n F in d en , a P a rk s a n d R ec re fo r d ev el op a ti on D ep in g “T h e P a rt m en t p h oe n ix C h a ge s a n d a rk ra n ge a ll en ge ,” a fi tn es s le ve r, w a s re co n on -c om p ls , ev en h ik gn iz ed et it iv e h ik er s w it h d in g ev en t is a bi li ti es fo r a ll . 11 ■ In February 2007, the city held its fifth 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. It also lets departments showcase practical ways to support, promote and utilize diversity to better serve the community. The event endorses and promotes the city’s Vision and Value statement, “We value and respect diversity.” City of Phoenix Excellence Awards Every year, the city of Phoenix recognizes individual employees and employee groups for excellence. The 2006 Employee Excellence Awards, which were presented May 30 at the Herberger Theater Center, honored eight individuals and 17 teams for their hard work and dedication. The individual winners included Traffic Engineer Kerry Wilcoxon, Park Ranger Nathan Finden and Police Officer Santos Robles. ■ ■ Phoenix also has provided free wireless Internet service in several locations including Burton Barr Central Library, City Hall and the Municipal Court jury assembly room. Residents can use their laptop, personal digital assistant (PDA) or other wireless-ready devices to access filtered wireless Internet while they conduct business with the city, visit city facilities or to enhance their jury experience. Wilcoxon was recognized for his efforts to improve traffic safety. Wilcoxon, part of the “85009 Zip Code Child Seat Safety Campaign,” received a $25,000 grant to develop a public education campaign and the “Children Are Priceless Passengers” program that targets the area. In addition, he played a key role in identifying and selecting locations for the city’s expanded photo enforcement program and successfully applied for federal grants to improve safety in several high-crash locations. ■ Finden was honored for developing and implementing “The Phoenix Summit Challenge,” a non-competitive hiking event for all ages and fitness levels. Challenge participants have to scale a combination of all or some of the seven summits within the Phoenix desert preserve system in one to two days. Paid registration for the second annual challenge in 2006 filled up in just two hours. It was one of Arizona’s most successful hiking events. a p la n co n ce iv ed or ks te a m W ty ic ci bl u in P in g th em am and of d is ca rd fu l to th e en ta l P ro gr d m ea rm n a st h ro in vi s re n a of E ec tr on ic a ls th a t e T h is O ff ic e te rs a n d el h ea vy m et on ic s to th ol d co m p u rs co n ta in a n d el ec tr r te u te p u p m m co to re cy cl e at a d d in g co K n ow in g th m m en d ed la n d fi ll s. te a m re co e th t, en s. am en vi ro n m in g p ro gr ti n g re cy cl ci ty ’s ex is 12 ■ Robles, a community action officer, was honored for his service to the Palomino Neighborhood. He has worked with the community and other city departments to fight crime and blight in the Palomino area and ensure the safety of children in the neighborhood. In one child neglect case, he insisted that the state take immediate action to protect two children who were left to care for themselves in an unsafe home. Paradise Valley Unified School District officials also praise Robles for his work with students in the district’s alternative programs. The winning employee teams included three groups that strived to make Phoenix a better place for its residents. ■ The Tampico Apartments Task Force, consisting of representatives from the Law, Neighborhood Services and Police departments, was recognized for coming up with a plan to reduce the number of sex offenders who clustered in a single Phoenix apartment complex. The owner of the complex routinely catered to felons because he didn’t think anyone else would rent from him. Responding to neighborhood concerns, the task force educated the owner about good management practices that would reduce vacancies and provided him with information and resources. Because of their efforts, the owner has attracted new residents. ■ The Household E-Waste Recycling Team, which included Public Works and Office of Environmental Programs staff, created a program to recycle thousands of obsolete computers and other electronic equipment that were destined for city landfills. The team recommended that the city incorporate electronics recycling into the monthly Household Hazardous Waste and Appliance/Electronic Collection programs. The team found an international vendor that agreed to pay the city five cents a pound for recycling computer wastes. Most computers are taken apart for their usable parts or recyclable raw material. Older technology computers are shipped to Malaysia, where they are stripped of operating programs and files then reconditioned. Those computers are sold to individuals in Third World countries who would not otherwise have access to technology. O ff ic er Sa n to s R ob le s is d ev ot ed a ct io n of fi to th e P a lo ce r a n d vo m in o N ei gh lu n te er, h in th e n or e h a s w or th P h oe n ix ke d w it h re bo rh oo d . A s a co m m n ei gh bo rh h im p ra is u n it y si d en ts to oo d . H is w e fr om P a fi gh t cr im or k w it h y ra d is e Va ll e a n d bl ig ou n g p eo p ey Sc h oo l ht le a ls o h a D is tr ic t of s ea rn ed fi ci a ls . 13 ■ “Closer-To-Home,” the Fire Department’s 200 Compression Protocol CPR Project implemented a pilot program based on advances in cardiopulmonary resuscitation. Continuous chest compression CPR, or CCR, emphasizes chest compression and eliminates the need for mouth-to-mouth breathing. In early 2006, the department’s Emergency Medical Services battalion units began using CCR after undergoing training. The project’s preliminary results showed a dramatic increase in the survival rate of cardiac patients who were treated with CCR, which was developed by the University of Arizona. The Fire Department plans to expand the use of this innovative life-saving measure. Employee Suggestions Streamline Operations and Cut Costs The Employee Suggestion Program, which began in the mid-1950s, has saved millions of dollars 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 2006-07 fiscal year; ■ Billy Moreno and Larry Bee reduced the amount of maintenance expense to manage the Salt River Outfall (SRO) station. In the past, the pumps at the SRO station would routinely get clogged and require significant personnel and material costs to repair. These Water Services employees suggested the use of a chopper pump which has reduced the number of times the pumps must be pulled from almost weekly to only a few times a year saving the city $33,000 annually. ■ Orelio Moreno found a specialized tool to maintain the Ford Crown Victoria police vehicles. Moreno’s suggestion resulted in repairing stripped cylinder heads without removing the engine. Prior to utilizing the tool, Equipment Management mechanics had to pull the engines to repair cylinder heads which is labor intensive and increases down time for police vehicles. The implementation of his suggestion will result in an annual cost savings of $28,000 and faster vehicle maintenance turnaround time. rv ic es a n d bo rh oo d Se gh ei N , w u m be r of a om th e L d u ce th e n p lo y ee s fr p la n to re em a g of in p u op e fo r d ev el rc e m a d p le x. m en t co m re co gn iz ed T h is ta sk fo n ix a p a rt oe m en ts w a s h rt P a e ep gl d n e P ol ic ed in a si er s cl u st er se x of fe n d 14 ■ ■ Sergeant Craig Church suggested the use of bilingual crime scene tape. The use of the English and Spanish crime scene tape presents an opportunity to provide a vital service to the community and reduce the risk of citizens breaching crime scenes or interfering with police investigations due to language barriers. We work hard to earn our reputation as a well-run city. We are leaders in our professions. Each day, the core values of our organization – what we call our “Vision and Values” – are at the root of everything we do. Michael Martinez suggested replacing reflective glass beads along the runways of Sky Harbor International Airport with a less expensive and more reflective product. Prior to Martinez’s suggestion, these glass beads would have been replaced at a cost of approximately $269,000. His suggestion to replace the glass beads with the new design resulted in an annual cost savings of approximately $156,000. 15 PHOENIX GROWTH 16 Community Profile and Trends Phoenix 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 privilege license 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. Economic Diversity Phoenix has grown steadily, especially since 1950. The 1900 census recorded Phoenix population at 5,544. In 1950, the city occupied 17 square miles with a population of almost 107,000, ranking it 99th among American cities. The 2005 census recorded Phoenix population at 1,475,834. Over the next fiscal year, the city is projected to encompass 516.8 square miles, with a projected population of 1,550,211. Today, 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; and the town of Gilbert. 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. The Phoenix metropolitan area employment mix is well diversified and fairly similar to that of the U.S. as a whole. One exception is construction employment which is over-represented due to rapid population growth and the demand for new housing. Another exception is under-representation in manufacturing employment. However, the Phoenix area’s manufacturing mix is much more concentrated in high-technology than the U.S. The high-technology manufacturing sectors are more likely to grow at higher rates than other manufacturing sectors. The primary employment sectors and their share of total employment in the Phoenix metropolitan area consist of trade (20%); professional and business services (17%); government (12%); education and health services (10%); construction (10%); leisure and hospitality (10%); financial activities (8%); and manufacturing (7%). 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, Honeywell, US Airways, Wells Fargo and Company, Basha’s, Intel Corporation and the U.S. Postal Service. The top two property taxpayers, based on secondary assessed valuation - Arizona Public Service Company and Qwest Communications make up only 5% of total assessed valuation. Demographics and Economic Statistics The following statistics are presented to provide an overview of Phoenix residents, the city’s financial condition and infrastructure. 17 1970-71 1980-81 1990-91 2000-01 Actual 2005-06 Estimated 2006-07 Projected 2007-08 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 Black/African American 4.8 American Indian/Alaska Native 1.0 Asian 0.5 Native Hawaiian/ Other Pacific Islander 2 N/A Other 0.4 Not Hispanic - Two or More Races N/A Hispanic/Latino (of Any Race) 3 N/A 789,704 995,896 1,350,435 1,479,356 1,514,369 1,550,211 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 18 1970-71 1980-81 1990-91 2000-01 Actual 2005-06 Estimated 2006-07 Projected 2007-08 $27,601 13.6% $29,706 14.8% $30,797 4.6% $40,856 6.7% $59,809 10.5% $65,491 9.5% $69,879 6.7% N/A N/A N/A N/A N/A N/A N/A N/A $5,700,825 (3.0)% 4.9% $0.42 $7,573,211 3.7% 2.7% $1.16 $11,419,619 6.2% 3.9% $2.69 $12,261,134 5.1% 3.5% $2.54 $16,068,817 4.1% 3.5% $2.63 N/A N/A $0.46 $1.33 $1.84 $2.26 $2.37 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 $2,548,084 $932,228 15,928 10.8 8.7 $2,824,114 $1,032,414 16,517.5 10.9 8.8 $563,759 $1,199,298 16,890.5 10.9 8.8 N/A N/A 2.0 2.1 2.1 2.1 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+ 58,254 1.8% Aa1/AAA 55,785 1.8% Aa1/AAA 57,000 1.8% 247.9 329.1 427.1 483.5 516.0 516.8 516.8 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 2,810 102,005 778,853 3,114 103,100 782,000 3,223 102,800 776,700 3,234 City Economic Profile Median Household Income4 Personal Income Growth (Metro Phoenix) Assessed Valuation (‘000s)5 Employment Growth Rate6 Unemployment Rate 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 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 23,829 129,208 1,553 52 21,700 136,000 1,625 55 23,600 139,000 1,651 Building Inspections Total Number of Inspections11 236,000 196,356 176,909 261,184 346,409 316,460 345,600 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 4,782 143 525 4,850 116 555 4,900 132 565 19 1970-71 1980-81 1990-91 2000-01 Actual 2005-06 Estimated 2006-07 Projected 2007-08 423 23,097 22,765 555 39,097 28,129 761 50,825 28,414 906 70,750 36,500 976 82,971 33,600 1,000 90,000 34,431 1,000 92,500 35,464 2,925,700 6,500,000 22,175,000 35,900,000 41,700,000 43,000,000 44,000,000 204,800 325,300 281,900 379,000 281,392 513,643 327,953 1,051,935 366,903 1,029,700 379,276 1,170,000 386,100 1,190,000 121 N/A 137 1,303 181 2,206 199 3,332 214 4,395 216 4,506 222 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 12,991,600 1,963,228 15,236,302 1,970,827 15,726,337 2,011,627 2,637 4,497 4,776 6,080 6,883 7,000 7,175 Water Connections 172,100 52.7 Production (billions of gallons)14 282,048 88.5 321,996 84.7 350,967 109.4 394,155 111.4 402,047 114.2 409,293 116.9 Wastewater Connections Miles of Line 250,199 3,040 311,980 3,661 327,051 4,174 364,555 4,685 371,846 4,786 378,353 4,887 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 20 169,255 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 years prior to 1980 not meaningful. Employment growth rate figures (total non-farm employment) are calendar year and not fiscal year. Calendar 2005 is shown under FY 2005-06, and calendar 2006 is shown under FY 2006-07, and projected calendar 2007 is shown under FY 2007-08. 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 Dec. 1, 1993, for increased fire and police protection services. Voters approved a 0.1 percent increase in most city sales tax categories effective Nov. 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. 2007-08 Resource and Expenditure Summary T his section provides a broad overview of the resources and expenditures included in the 2007-08 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 voterapproved uses. The 2007-08 budget, financed by operating funds, totals $3,563,759,000. As shown in the accompanying pie chart, the General Fund portion of $1,199,298,000 is approximately 34 percent of the total. The Enterprise funds, which include Aviation, Water, Wastewater, Solid Waste, Convention Center and Golf, make up another 34 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 32 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 the following page 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 2007-08 General Fund budget includes ongoing operating and maintenance and pay-as-you-go capital expenses. No debt service is paid from the General Fund. Instead, debt service associated with General-funded activities is paid for with earmarked property taxes or with City Improvement Fund. Due to the restrictions on using these funds both are appropriately 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 following bar chart presents the General Fund budget on a department-by-department basis. The table below provides a comparison of the 2007-08 budget to the 2006-07 adopted budget. Actual expenditures for the 2005-06 fiscal year also are included. Citywide operating and maintenance expenditures increased from 2006-07 primarily due to the costs of the second year of a two-year agreement with our employee groups as well as increased pension and other benefit costs, the annual required contribution to fully fund GASB 45 (Statement 45 of the Governmental Accounting Standards Board addresses appropriate funding and 2007-08 Budget Compared to 2006-07 Adopted Budget (In Millions of Dollars) 2007-08 2005-06 Actual Expenditures 2006-07 Adopted Budget Budget Amount Change Percent Change $1,830.6 $2,238.3 $2,423.7 $185.4 8.3% Capital Expenditures 282.0 433.0 540.9 107.9 24.9 Debt Service 435.5 516.3 599.1 82.8 16.1 $2,548.1 $3,187.6 $3,563.7 $376.1 Operating and Maintenance Expenditures Total 11.8% 21 accounting for other post employment benefits) costs, operating costs related to operating and maintaining new capital facilities, and several budget additions. Increases also reflect rising costs for commodities such as fuel and utilities. The increase in debt service from 2006-07 is associated with the voter-approved 2001 and 2006 bond programs and the planned sale of Aviation revenue bonds. 2007-08 GENERAL FUND BUDGET OVERVIEW The 2007-08 General Fund budget of $1,199,298,000 provides for ongoing operating and maintenance and a modest level of pay-as-you-go capital expenditures. The table below compares the 2007-08 General Fund budget with the adopted 2006-07 budget. Operating and maintenance expenditures are increased 9.3 percent compared to the 2006-07 adopted budget. The increase is primarily the result of employee compensation increases as described above; the General Fund portion of GASB 45; the planned transition of grant-funded public safety staff to the General Fund; reflecting full-year costs for facilities opened in 2006-07 plus new operating costs associated with capital facilities that will open in 2007-08; inflationary increases in the costs of fuel and utilities; an increased level of vehicle requirements; the continued restoration of General Fund support to Streets and Transit; an increase in the contingency fund and several budget additions. Budget additions are described in detail in the Department Program Summary section of this document. The following pie charts show the 2007-08 General Fund budget summarized by major programs and major resources. RESOURCES Resources include beginning fund balances, fund transfers, revenues and recoveries. 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. 2007-08 Estimated Beginning Fund Balances As explained in a later section, a General Fund balance may not be budgeted. However, a contingency fund, also known as 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 2007-08 beginning fund balances of $938.7 million include $70.9 million in General funds, $438.7 million in Special Revenue funds and $429.1 million in Enterprise funds. The estimated beginning fund balance for Special Revenue and Enterprise funds include: Transit 2000 - $188.9 million; Water $158.0 million; Aviation - $114.3 million; Wastewater - $86.0 million; Convention Center - $39.6 million; Parks and Preserves - $87.8 million; Solid Waste - $33.7 million; Grant funds - $40.2 million; Arizona Highway User Revenue - $29.9 million; Development Services - $28.2 million; Sports Facilities - $22.0 million and $39.2 million in various other restricted funds. 2006-07 General Fund Estimated Ending Balance As shown in the following table, the estimated 2006-07 ending General Fund balance is $70.9 million. The balance results primarily from a $55.1 million decrease in operating expenditures, a $5.5 million decrease in pay-as-you-go capital expenditures and a $7.9 million higher beginning balance. The decrease in estimated 2006-07 General Fund expenditures is largely due to unused contingency funds, and expenditure savings in most departments due to salary savings. Also contributing to the increase is the carryover of $10.5 million in General Fund expenditures from 2006-07. These carryovers represent planned expenditures in 2006-07 that will not be completed until 2007-08. 2007-08 General Fund Budget Compared to 2006-07 Adopted Budget (In Millions of Dollars) 2007-08 Operating and Maintenance Expenditures Capital Total 22 2005-06 Actual Expenditures 2006-07 Adopted Budget Budget Amount Change Percent Change $928.7 $1,083.3 $1,184.2 $100.9 9.3% 3.5 9.7 15.1 5.4 55.7% $932.2 $1,093.0 $1,199.3 $106.3 9.7% ALL SOURCES OF FUNDS ALL SOURCES OF FUNDS Total Resources – $3.6 Billion Total Expenditures – $3.6 Billion Enterprise Funds 34% Operation & Maintenance 68% Debt Service 17% General Funds 34% Special Revenue Funds 32% Capital 15% GENERAL FUNDS GENERAL FUNDS Total Resources – $1,199 Million Total Expenditures – $1,199 Million Public Safety and Criminal Justice 64% Property Tax 9% Local Sales Tax 39% Other Resources 7% Environmental Services and Other 5% User Fees/ Other Revenue 10% Transportation 5% State-Shared Revenues 35% General Government 7% Community Development and Enrichment* 19% *Includes Parks, Library, Human Services, Neighborhood Services, Planning and Economic Development Expenditures by Department 2007-08 General Fund Budget Millions of Dollars $500 450 400 350 300 250 200 150 100 50 Parking Garages Engineering & Architectural Services City Auditor City Manager Equal Opportnity Public Information Economic Development Law Budget & Research Mayor & City Council Information Technology Planning City Clerk Personnel Functions* Public Works Downtown Development *Functions include several small offices such as the Office of Arts and Culture, Education Office and Environmental Programs. Neighborhood Services Finance Prosecutor & Defender Public Transit Streets Human Services Contingencies Library Municipal Court Fire Parks and Recreation Police 0 23 2007-08 Estimated Revenues Revenues from taxes, fees, interest, grants and other sources provide resources to fund programs and services delivered by the city. Revenues for 2007-08 are estimated at $3,107,249,000. This is $225,434,000, or 7.8 percent above the 2006-07 estimate of $2,881,815,000. General Fund revenues are estimated at $1,117,954,000, which is $95,977,000 or 9.4 percent more than the 2006-07 estimates. The following table provides a comparison of the 2007-08 estimated revenues to 2006-07 estimates and 2005-06 actual collections. Detailed explanations by category are provided in the 2007-08 Revenue Estimates section of this document. The state and local economy experienced strong growth beginning in late 2004-05 and continuing through 2005-06, bolstered by increased retail spending, revived tourism spending and strong growth in contracting. Due to the recent downturn in the housing market, growth has continued in 2006-07, but at a slower pace. Estimated revenue growth for 2007-08 assumes the economy will continue to slow slightly as population and job growth absorb the available housing stock. As a result, local and state sales tax collections are expected to grow at a lower rate than in 2006-07. Reduced sales tax growth rates is partially offset by an increase in state-shared income tax. Included in 2007-08 estimates for the Enterprise funds are full-year impacts of rate increases for Water and Wastewater services, effective March 2007. The 2007-08 estimate for Special Revenue funds includes a $43.9 million increase in secondary property tax and a $15.0 million increase in federal funds. 2007-08 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 2007-08 total $47.0 million. This amount 24 reflects $46.5 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 $416,000 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 $47.0 million. A transfer of $835.1 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. 2007-08 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 2007-08, $34.2 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. 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, 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. The estimated 2007-08 ending balance of $473.7 million includes: Transit 2000 $147.1 million; Water - $83.7 million; Convention Center - $9.8 million; Wastewater - $47.6 million; Parks and Preserves - $5.1 million; Solid Waste - $10.7 million; Aviation - $92.9 million; Development Services - $9.4 million; Sports Facilities - $29.1 million and $38.3 million in various other Special Revenue and Enterprise funds. Beginning and ending fund balances are provided in more detail in Schedule 1. In 2007-08, the Enterprise funds in the aggregate are programmed to decline from $429 million at the beginning of 2007-08 to $240 million at year end. Increased maintenance and planned replacement costs associated with aging infrastructure contribute to decreased fund balances in the Water, Wastewater and Solid Waste funds. The Water Fund balance also is decreasing due to increases in chemical costs and full-year costs associated with operating the Lake Pleasant Water Treatment Plant. Increased sledge hauling costs contribute to the decrease in the Wastewater Fund balance. Additional field services staff and new containers needed to handle growth contribute to the decline in the Solid Waste Fund. The Convention Center Fund balance is declining as planned as debt service and operating costs associated with the expanded facility begin to occur. Special Revenue Fund balances in the aggregate are expected to decrease from $439 million to $233 million, primarily due to the decrease in the Parks and Preserves Fund, the Transit 2000 Fund, the Arizona Highway User Revenue Fund and the Development Services 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 acquire preserve land. The Transit 2000 Fund balance is decreasing as the capital improvement portion of the program reaches its peak years and as planned service improvements are implemented. The Arizona Highway User Revenue Fund balance is decreasing as costs for street construction increase. The Development Services Fund balance largely represents permit revenues received for which inspection services have not yet been performed. New permitting activities have begun to decline, the fund balance will be drawn down to support inspection services still due. County as actual cash expenditures are made. The reimbursement will take three years. Golf Fund expenditures have exceeded revenues for several years. The Parks Department has a major restructuring of the golf system underway in order to return it to a competitive status. The Golf Fund will remain in a deficit position while this restructuring is underway. Negative Fund Balances Two funds are budgeted with negative fund balances: Regional Transit and Golf. The Regional Transit negative fund balance represents a large encumbrance that was recorded in 2005-06. This encumbrance will be reimbursed to the city by Maricopa General Fund Balance Analysis (In Thousands of Dollars) 2005-06 2006-07 Actuals Budget Estimate Over (Under) Budget Estimate Amount Percent Resources Beginning Balances $38,903 $60,840 $68,761 $7,921 13.0% Revenue 945,618 1,021,516 1,021,977 461 < 0.1% Recoveries Transfers Total Resources 961 1,500 1,500 — —% 15,508 9,156 11,097 1,941 21.2% $1,000,990 $1,093,012 $1,103,335 $10,323 0.9% 928,702 3,527 1,083,304 9,708 1,028,201 4,213 (55,103) (5,495) (5.1) % (56.6) % $932,229 $1,093,012 $1,032,414 $(60,598) (5.5) % $68,761 $— $70,921 $70,921 100.0+% Expenditures Operating Expenditures Capital Total Expenditures Ending Fund Balance 2007-08 Estimated Revenues Compared to 2006-07 Estimates (In Thousands of Dollars) 2007-08 Fund Types General 2005-06 Actuals $945,618 2006-07 Estimate $1,021,977 Estimate $1,117,954 Amount Change $95,977 Percent Change 9.4% Special Revenue Funds 787,577 834,876 913,591 78,715 9.4% Enterprise Funds 958,254 1,024,962 1,075,704 50,742 5.0% $2,691,449 $2,881,815 $3,107,249 $225,434 7.8% Total 25 2007-08 OPERATING BUDGET $ 3,563,759,000 OPERATING EXPENDITURES $2,423,713,000 GENERAL FUND $1,184,192,000 26 SPECIAL SPECIAL REVENUE REVENUE FUNDS $1,083,304,000 $534,084,000 ENTERPRISE FUNDS $705,437,000 General Fund $1,023,257,000 Neighborhood Protection - Police $24,955,000 Neighborhood Protection - Fire $8,350,000 Aviation $217,264,000 Parks & Recreation $116,032,000 Neighborhood Protection - Block Watch $1,200,000 Public Safety Enhancement - Police $18,612,000 Water $207,471,000 Library $39,267,000 Public Safety Enhancement - Fire $11,325,000 Parks & Preserves $186,000 Wastewater $105,921,000 Cable $5,636,000 Transit 2000 $131,204,000 Court Awards $3,277,000 Solid Waste $116,886,000 Development Services $73,182,000 Capital Construction $101,000 Convention Center $48,754,000 Sports Facilities $1,774,000 Arizona Highway User Revenue $37,282,000 Local Transportation Assistance $6,883,000 Regional Transit $15,061,000 Community Reinvestment $80,000 Impact Fee Program Admin $2,367,000 Other Restricted Funds $14,571,000 Grants $183,674,000 Golf $9,141,000 City of Phoenix Financial Organizational Chart DEBT SERVICE $599,132,000 PAY-AS-YOU-GO CAPITAL $540,914,000 Secondary Property Tax $164,127,000 City Improvement $71,979,000 General Fund $15,106,000 Parks and Preserves $119,116,000 Arizona Highway User Revenue $31,246,000 Sports Facilities $9,177,000 Transit 2000 $42,920,000 Capital Construction $28,415,000 Aviation $86,290,000 Water $114,177,000 Arizona Highway User Revenue $96,358,000 Regional Transit $15,428,000 Wastewater $79,963,000 Solid Waste $20,269,000 Community Reinvestment $6,547,000 Other Restricted Funds $1,388,000 Convention Center $18,586,000 Golf $851,000 Grants $21,482,000 Aviation $34,320,000 Transit 2000 $326,000 Grants $2,141,000 Water $68,678,000 Wastewater $45,652,000 Solid Waste $5,674,000 Solid Waste $39,830,000 27 Services to the Community Phoenix is the seat of Maricopa County and the state’s population and economic center. The city’s area (approximately 516 square miles) increases periodically with annexations. With its attractive climate and affordable costs of living and doing business, the city has experienced sustained growth. Population has risen to 1.55 million, making Phoenix the nation’s fifth-largest city. The section outlines how, over the years, major services provided to Phoenix residents have been adjusted in response to local economic and financial conditions. In addition, 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 2005 International City/County Management Association’s Center for Performance Measurement report. No cuts were necessary for the 2007-08 budget. Instead, this year’s budget provides our first opportunity in several years to restore some of the service cuts necessary over the past few years as well as the opportunity to add some new community services. General Fund service additions amount to $10.5 million with another $4.4 million to open and operate newly constructed community facilities. In addition, Public Safety Enhancement funds and Proposition 301 Neighborhood Protection funds provide $2.7 million in various public safety improvements. Community service improvements affect all areas of the budget including: opening the new police crime lab and the new Pecos Park Police Station; adding police and fire communications operators; operating and maintaining new parks; improved maintenance of existing parks; increased swimming pool hours; the opening of a new library and the restoration of library hours; increases to senior programming; improvements to various neighborhood services; and restored levels of streets maintenance. In the non-General Fund areas of the budget, funding is available to improve community services. Transit 2000 funds will provide numerous fixed-route bus improvements and the costs necessary to operate the new West Maintenance Facility. Development Services funds will provide additions recommended by a recent organizational analysis as well as additions to the customer counter to reduce wait times. Convention Center funds will provide additional staff and costs necessary to operate and maintain the new West Building as well as additional fiscal staff to provide proper oversight to the center’s expanded operations. Water and Wastewater funds will provide a meter replacement program as well as the addition of a rapid-response crew to perform emergency repairs and staff to maintain service levels at the customer service call center. Solid Waste funds will provide costs necessary to keep pace with growth in residential units and improved prevention of illegal dumping. Aviation funds will improve sustainability efforts at the airport. 29 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 PUBLIC SAFETY POLICE Personnel Resources: In 1996-97, the Police Department had 2,589 sworn officers and 771 civilian employees. The 2006-07 budget included matching funding for the final allotment of 111 officer positions utilizing the Department of Justice’s Universal Hiring Grant program. Over the past nine years a total of 400 officer positions were added to the department as a result of this program. In addition, the 2006-07 budget included the creation of the Public Transit Safety Bureau with five sworn, one support and 50 civilian security positions. These positions were added to provide security for the transit system and prepare for the opening of light rail. In January 2007, 12 positions were added to the crime lab to address increased demands and prepare for the opening of the new police crime lab in 2007-08. The 2007-08 budget includes a competitive salary adjustment for sworn personnel and adds 10 new sworn positions. One of those is paid for with Aviation funds and will be stationed at the airport to provide TSA-mandated security. The other nine sworn positions will be assigned to the Public Transit Safety Bureau. The 2007-08 budget also includes 30 municipal security guards and one support staff position within the Public Transit Safety Bureau. These positions will be paid for with Public Transit funds. The budget also includes funding for 24 radio and 911 police operators to improve service and prepare for the opening of two new police precincts. In addition, the budget includes funding for two support staff to operate the Pecos Park Police Station. Finally, the budget also includes funding to replace expiring grant funds for civilian and sworn positions with General funds. In 2007-08, the Police Department will have 3,234 sworn positions or 2.1 for every 1,000 residents, and 1,206 civilian employees. Response Time Average: Due to increased calls for service in 1996-97, response time for Priority 1 emergency calls increased to 5 minutes 24 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 48 seconds in 2006 07. During this same time period, the percentage of 911 calls answered within 10 seconds has increased from 78 percent to 84 percent. Based on 2005 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 41 sec Austin – 7 min 59 sec San Jose – 8 min 18 sec Oklahoma City 9 min 21 sec Tucson – no data available 30 The 2007-08 budget provides for a 5 minutes 42 seconds average response time for Priority 1 calls. PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 PUBLIC SAFETY FIRE Response Time Average: In 1996-97, the Fire Department maintained an average response time of 4 minutes 18 seconds for all fire and emergency medical calls. 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 added 67 sworn and eight civilians to open and operate four new fire stations and the new Public Safety Driver Education facility. Also included was funding to retain five fire training captains to provide for the department’s training needs over the next several years. Also, in 2006-07 18 positions were added to provide fire service for the Town of Paradise Valley. Finally, three fire prevention specialists were included for the Annual Facilities Program. These positions were funded with Development Services Fees. Based on 2005 ICMA data, city of Phoenix response times compare favorably to those of other benchmark cities as noted below: The 2007-08 budget adds 10 fire emergency dispatchers to improve response to public calls for service. Also included are one administrative assistant I and matching funds for grants for the crisis response section which assist victims of crimes, fires and major emergencies. One fire prevention supervisor position will be added to improve fire inspections of child and elderly care facilities, hospitals, group homes and other licensed facilities. To enhance the hiring process of women and minorities, one fire captain position and related costs are being added. Finally, seven technical staff are included for maintenance of the regional fire dispatch system. These seven positions are paid for from revenues generated for providing this service to participating cities. Percentage of All Calls to Which Response Time is Under 8 Minutes: Oklahoma City – 93 percent Long Beach – 86 percent PHOENIX – 83 percent Austin – 76 percent San Jose – 72 percent San Antonio – 70 percent 31 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 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. No changes are included in the 2007-08 budget. PUBLIC SAFETY FIRE Emergency Transportation: In 1996-97, the city of Phoenix had a total of 19 full-time and nine part-time ambulances in service. 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. The 2006-07 budget included funding for four paramedic rescues and one additional ambulance to be located at Station 57 (15th Avenue and Dobbins Road), Station 60 (19th Avenue and Dunlap Avenue); Station 61 (19th Street and Indian School Road); and Station 62 (99th Avenue and Lower Buckeye Road). 32 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 The 2006-07 budget restored hours at the Central Station and implemented Saturday hours at Metrocenter Transit Center from 8 a.m. to 5 p.m. The 2007-08 budget funds the addition of two new routes, Route 154 along Greenway Road and Route 32 from Washington Street to Union Hills Drive along 32nd Street. TRANSPORTATION PUBLIC TRANSIT Service Miles/Hours: In 1996-97, 10,985,000 annual bus service miles were provided on weekdays and Saturdays in the city of Phoenix. The 2006-07 budget restored 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 funded increased frequency on routes 0 (Central), 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 funded additional neighborhood circulator services and additional weekday RAPID trips. With continued enhancements and improvements annual 2006-07 bus miles were estimated at 17,886,000 and Dial-a-Ride service hours were estimated at 336,650. The 2007-08 budget will fund five new neighborhood circulator routes and increase service for the ALEX neighborhood circulator along with additional weekday RAPID trips. The 2007-08 budget will fund additional weekday and holiday Dial-a-Ride service hours and improvements to the Dialysis Taxi Subsidy Program. The 2007-08 budget will fund increased frequency on bus routes 8, 24, 27 and 156, extend weekday service hours to midnight on routes 8, 24, 43, 61 and 106, and increase Sunday frequency on Route 8, 27 and 156. The 2007-08 budget will extend weekday afternoon peak hours on the Blue Line, and routes 7 and 12, extend Route 24 to Litchfield Park Road and route 17 to the city limit, and extend weekday service on Route 50 and 106. The 2007-08 budget will fund the opening of the West Maintenance Facility and enhanced security at existing park-and-ride facilities and transit centers which sell fare media. Average Weekday Bus Ridership: In 1996-97, the average weekday bus ridership was 113,200. Under the 2006-07 budget, weekday ridership was estimated to rise to 157,000. With continued enhancements and improvements, annual 2007-08 bus miles are estimated at 20,547,808 and Dial-aRide service hours are estimated at 350,180. Under the 2007-08 budget, weekday ridership is estimated to rise to 170,250. 33 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 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. The 2007-2008 budget adds funding for the maintenance of streets. TRANSPORTATION STREET TRANSPORTATION Major and Collector Street Sweeping and Maintenance: In 1996-97, 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. Dust proofing of dirt alleys continued to see reduced funding in both 2004-05 and 2005-06. No changes were included in the 2006-07 budget. Residential Street Sweeping: In 1996-97, 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 were included in the 2006-07 budget. 34 No changes are included in the 2007-08 budget. PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 In 1997-98, sealcoat miles increased to approximately 100 miles annually. The 2007-08 budget provides for 46 miles of city streets to be sealcoated annually. TRANSPORTATION STREET TRANSPORTATION Sealcoat: In 1996-97, the city of Phoenix provided 92 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. In the 2006-07 fiscal year, it is estimated that 40 miles of city streets will be sealcoated. This decrease is due to continued increases in material costs. Based on 2005 ICMA data, city of Phoenix paved road rehabilitation expenditures per capita compare favorably to those of other benchmark cities as noted below: Paved Road Rehabilitation Expenditures per Capita: Tucson – $40.10 Austin – $25.10 San Antonio – $17.00 PHOENIX – $16.20 Oklahoma City – $12.60 San Jose – $8.10 Kansas City – no data available Asphalt Overlay: In 1996-97, 86 miles of overlay were performed. 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. For FY 2007-08, the budget will be increased and provide for 80 miles of overlay. In 2004-05, 105 miles were overlaid. This decrease in miles was due to increased cost of materials and bad weather. In 2005-06, 89 miles were overlaid. This decrease in miles is primarily due to increased cost of materials. For 2006-07, it is estimated that 73 miles of asphalt overlay will be completed. This decreased due to continued price increases. 35 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 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 2006-07 inventory of 433 units reflects the sale of 37 homes to eligible tenants over the last few years. Under the 2007-08 budget, the program is expected to sell 13 Scattered Sites homes, bringing the inventory down to 420 homes. This program began in 1990-91 and has expanded to a total of 1,382 city-owned units for families and individuals with 325 units added with 2001 bond funds, and 369 units added with other funding sources. Under the 2007-08 budget, the program is expected to maintain its inventory of 1,383 affordable housing units for families and individuals. The program’s beginning inventory before the HOPE VI project was initiated was 1,776 units located at various sites. Due to the reconstruction activities funded by 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. The conventional housing inventory at the end of 2004-05 was 1,495 units. Under the 2007-08 budget, the program expects 68 units from Phase 3 of HOPE VI to be added and leased up. The total inventory is expected to increase to 1,670 units. COMMUNITY DEVELOPMENT HOUSING Scattered Sites Housing Program: In 1996-97, the Housing Department had 455 units. Affordable Housing Program: In 1996-97, this program had 747 units for families and individuals. Conventional Housing Program: This program has been in effect since 1951-52. In 1996-97, there were 1,776 units. In 2005-06, the department demolished the remaining 78 HOPE VI units and leased up 99 units from Phase I for a gain of 21 units and a year end total of 1,516 units. In 2006-07, Phase II of the HOPE VI project was completed which added 100 units to the conventional housing inventory. Also during this period, 14 original units at Matthew Henson were removed from the inventory and are being maintained for historical preservation. The total at the end of 2006-07 was 1,602. 36 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 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 53 in 2004-05 as staff added in previous years was fully trained and gained expertise in performing their duties. Case cycle times increased to 61 days in 2005-06 due to budget reductions of staff and abatement funding. The 2007-08 budget is expected to maintain the case cycle time of 60 days. COMMUNITY DEVELOPMENT NEIGHBORHOOD SERVICES Neighborhood Preservation Case Cycle Time (Days) In 1996-97, 151 days were needed to complete a neighborhood preservation case. Case cycle time for 2006-07 reduced slightly to 60 days. Based on 2005 ICMA data, city of Phoenix code enforcement expenditures per capita compares favorably to those of other benchmark cities as noted below: Code Enforcement Expenditures per Capita: Austin – $2.68 PHOENIX – $4.95 Long Beach – $6.15 Oklahoma City – not available ECONOMIC DEVELOPMENT Employment Growth Rate Compared to Other Cities This is a new measure. In 2006, 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 the 2007-08, although growth will be at a modest rate. PHOENIX - 4.07% Austin - 3.32% San Antonio - 2.95% Dallas - 2.76% Ft. Worth-Arlington - 2.35% San Diego - 1.3% Kansas City - 1.14% San Jose - 1.14% Los Angeles/Long Beach -0.29% 37 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 The program is estimated to serve 3,765 children during 2006-07. No changes are expected in the 2007-08 budget. The program began in 1990 with five school sites. With the 2006-07 school year, the program implemented a new service delivery model in 10 area high schools. The program assists with transitioning at-risk 8th grade students to the 9th grade. Follow-up services are provided for the remaining high school years to ensure graduation. It is expected that the program will serve approximately 800 youth. No service changes are expected in 2007-08. The program is expected to serve 800 youth. For 2006-07 the program is expected to serve more than 600,000 congregate and home-delivered meals having expanded space at the Devonshire (formerly Squaw Peak) Senior Center. In January 2007, Shadow Mountain, Westside and Pecos senior centers opened for business operations to the community. All three senior centers have experienced significant growth in their services. The centers are attracting new customers. The Pecos kitchen is operational and the site is preparing and serving congregate and home-delivered meals. With the new Shadow Mountain, Westside and Pecos senior centers being open a full year, it is anticipated that the number of congregate and home-delivered meals will continue to increase. COMMUNITY ENRICHMENT HUMAN SERVICES Head Start Program: In 1996-97, the Human Services Department served 2,850 children. School-Based/School-Linked Program: In 1996-97, this program provided services at 20 school sites and served 6,500 youth. Senior Nutrition Program: In 1996-97, the Human Services Department served 489,000 congregate and home-delivered meals. 38 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 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 2007-08 budget. COMMUNITY ENRICHMENT PARKS AND RECREATION Swimming Pools: In 1996-97, the city of Phoenix had 28 public swimming pools. No changes were included in the 2006-07 budget. Swimming Pool Season: In 1996-97, 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. Changes included in the 2007-08 budget would add funding to increase the pool season at all 29 pools by adding weekend hours beginning in August and continuing through Labor Day. The 2005-06 budget reduced the swim season by closing pools one week earlier, resulting in a nine-week season. No changes were included in the 2006-07 budget. Children’s Summer Recreation Programs: In 1996-97, the city of Phoenix provided recreation programs at 121 schools for 24-30 hours of programming for 6-8 weeks during the summer months. School Recreation Program During School Year: In 1996-97, funding provided for a total of 72 sites. Six sites were added in 1999-00 for a total of 127 program sites. No changes are included in the 2007-08 budget. No changes were included in the 2006-07 budget. 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 were included in the 2006-07 budget. Funding is added in the 2007-08 budget to improve after-school programming. 39 PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 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. The 2007-08 budget includes opening the Central Library at 9 a.m. Monday through Saturday, increasing hours of service from 66 hours per week to 72 hours per week. COMMUNITY ENRICHMENT LIBRARY Central Library: The new Burton Barr Central Library opened in May 1995, with 67 hours of operation per week. No changes included in the 2006-07 budget. Branch Libraries: In 1996-97, the city had 11 branch libraries with a total of 681 hours of weekly library service. 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 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. The new 25,000-square-foot Cesar Chavez Library, serving the western South Mountain Village, opened in January 2007 for 66 hours per week, increasing total branch library service hours to 924 per week. 40 The 2007-08 budget includes opening all branch libraries at 9 a.m. Monday through Saturday, increasing total branch library service hours to 1,008 per week. PROGRAM SERVICE LEVEL IN 1996-97 SERVICE CHANGES THROUGH 2006-07 SERVICE CHANGES FOR 2007-08 Based on 2005 ICMA data, the Phoenix library system compared very favorably to other benchmark cities as noted below: This trend is expected to continue during the 2007-08 budget. COMMUNITY ENRICHMENT LIBRARY Comparisons with Other Library Systems: This is a new measure. Cost per Item Circulated: PHOENIX – $2.12 Austin – $4.10 Tucson - $4.10 San Antonio – not available ENVIRONMENTAL SERVICES WATER SERVICES Water Bill Comparison for Single-Family Homes This is a new measure. In a March 2007 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 2007-08. San Jose – $45.73 Kansas City – $34.21 Austin – $34.03 Dallas – $33.35 Albuquerque – $28.84 Tucson – $28.53 PHOENIX – $25.35 San Antonio – $19.16 Wastewater Bill Comparison for Single-Family Homes This is a new measure. In a March 2007 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 2007-08. Austin – $50.87 Dallas – $33.40 Kansas City – $25.53 San Jose – $21.63 San Antonio – $20.78 Tucson – $20.30 PHOENIX – $19.06 Albuquerque – $15.96 41 Budget Process, Council Review and Input, Public Hearings and Budget Adoption Each 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 operating and maintenance 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 reviewed with the 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 reviewed. the full-year impact of facilities opening this year, and the transition of 80 police officers from grants to the General Fund. Also impacting the budget outlook were continuing previously approved restorations of Transit and Streets General funding cuts, the continued restoration of contingency fund levels, a citywide election, increased utility costs, and increased debt service payments necessary to retire the debt used during the prior four difficult budget years. Because this discussion came fairly early in the year, staff reported that it was expected that the next year’s budget could be balanced without reductions to city services. During this discussion, the Mayor and Council also were provided various options for conducting the 2007-08 budget process. The Mayor and Council recommended continuing the city’s long-standing modified zero-base budgeting system that includes reviewing all costs on a line-item basis. 2007-08 BUDGET PROCESS Initial Budget Status Early Discussions In January 2007, Budget and Research staff presented an early review and discussion of the budget to the City Council. At this time, staff focused on the General Fund, providing financial results for the previous fiscal year, the latest available information on revenues and expenditures for the current year, and the limited information available about the upcoming 2007-08 fiscal year. The Mayor and Council were advised that estimated General Fund revenue growth was positive but expenditures continued to provide challenges, including a spike in fuel prices and the essential costs associated with two high profile crime cases. Additionally, a number of significant costs for the next year were identified, including employee compensation, replacements for vehicles and police mobile terminals, the costs of opening new capital facilities as well as In March 2007, staff returned to Mayor and Council with an initial budget status report. Staff reported that in the current year, sales tax growth, including holiday sales taxes were somewhat disappointing. Moderate revenue growth was estimated for the upcoming year. Additional factors impacting next year’s budget included the need to improve the competitiveness of public safety starting salaries and the need to fund victim’s services no longer covered by grant funds. However, overall expenditure estimates had improved and staff anticipated that funds would be available to address high priority public safety needs as well as other service restorations and enhancements. 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 significant future cost pressures. 43 Trial Budget On April 3, a Trial Budget was presented to the Mayor and City Council. At that time, the Mayor and Council were advised that updated information on costs to operate newly constructed capital facilities provided additional funds for service restorations and enhancements. These cost savings resulted largely due to new information on opening and acquisition dates. The Trial Budget continued the city’s strong commitment to public safety by proposing to address three critical issues: allocating $1.7 million to improve the competitiveness of public safety starting salaries, $1.6 million to begin a three-year program to replace police patrol mobile computer terminals, and $350,000 needed to replace grant funding for victim’s services. Other proposed public safety additions included operating costs for the new crime lab, staff to open the new Pecos Park Police Station, increased 911 and police radio operators, transitioning of police officers to General funds from expiring grants, and adding a sergeant at Phoenix Sky Harbor Airport. Additional proposed public safety enhancements included the addition of communications operators in the Fire Department, providing staff and matching funds for Fire Crisis Response Units grants, adding staff to improve fire inspection of a variety child and elderly care facilities, adding a fire captain and related costs to enhance hiring of women and minorities, and adding technical staff for maintenance of the regional fire dispatch system. Staff also was recommended to improve services at the Family Advocacy Center and support the case management system in the Prosecutor’s Office. In addition, the Trial Budget proposed funding the opening costs of several new parks facilities, including staff to maintain Enchanted Island improvements, security and maintenance for newly acquired mountain preserve areas, operations and maintenance of new recreational features at Rio Salado, maintenance of 30 miles of new trails, staff to operate and maintain the first phase of a new community park at 71st Avenue and Elwood Street, and staff 44 and materials to operate the Reach 11 Field of Dreams donated by the Arizona Diamondbacks. The proposed budget also provided staff and other operating costs for street landscaping maintenance of new streets citywide and maintenance of newly acquired but undeveloped parks land. Restorations and enhancements to parks, youth, and senior services were also proposed in the Trial Budget. Staff and supporting expenditures to restore nearly 50 percent of general parks maintenance budget reductions was proposed. Street landscape maintenance crews eliminated in previous budget reductions were proposed to be restored and an additional maintenance crew added. Summer swimming pool hours were recommended to be partially restored, with funding to keep all pools open on weekends through Labor Day, beginning in August. An expansion to the city’s after-school program also was proposed. The recommended budget also began to restore funding for the youth summer jobs program. Enhancement of senior services was proposed through the addition of programming staff and food service workers at various senior centers. Additions and restorations also were proposed for cultural activities such as arts and libraries. Funding for setup at the new Agave Library at 33rd Avenue and Pinnacle Peak Road was proposed to enable a July 2008 opening date. Additionally, the proposed budget included restoration of morning hours at all libraries from 9 to 10 a.m. The proposed budget also began to restore arts grants reduced in previous budget cuts. Staff restorations and additions were proposed for funding to develop system improvements to code enforcement, case management and customer services in the Neighborhood Services Department. Proposed restorations also included staffing for a courtroom dedicated to complex property maintenance cases and other city code violations. The proposed budget also included staff and equipment to improve speed and quality of graffiti removal and graffiti enforcement efforts. Additional funding was proposed to address housing needs. Funding to complete the Matthew Henson HOPE VI Project was proposed, as well as the refunding of in lieu taxes paid with federal housing funds to free up public housing federal funds. Funding also was proposed to begin to expand operations at the Watkins Overflow Shelter. The creation of a wash maintenance program also was proposed, as well as increasing funds available for street maintenance. A variety of other funding items were proposed to address workload issues in a variety of departments throughout the city. 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. Additional routes and improvements on a number of existing routes were proposed, and Dial-A-Ride services also were recommended for improvement. Funds to implement five new neighborhood circulator bus routes in Maryvale, Sunnyslope, the Desert Sky area, the Desert Ridge area, and the Northwest area also were proposed. Specific routes will be identified through a community input process. Improvements to security at park-and-ride lots and transit centers that sell fare media also were proposed. Additional staffing also was proposed to address workloads associated with the expansion of the transit system and to staff the newly opened West Maintenance facility. Convention Center funds were proposed to improve operations at the new Phoenix Convention Center West Building as well as continue a program of enhancements to customer service. Development Services funds were recommended to fund administrative support and improve customer service at the Development Center customer service counter. Additional Aviation funds were proposed to identify more environmentally sensitive methods of operating. The proposed Water Services budget provided staff and other resources to add technical support for security systems, implement a new meter replacement program to replace under-registering meters, and to maintain consistent treatment processes at treatment plants. Also proposed is funding for staff and equipment to create a rapid-response crew to perform emergency repairs, develop and implement a strategic communications plan, and maintain service levels at the Water Customer Services Call Center and Water Distribution Communications Dispatch Center. In addition, funding was recommended for staff to improve staffing ratios, develop infrastructure master plans, and develop plans for the 2005 Water Resources Plan Update. The proposed budget also provided funding for staff and resources to reduce overtime and meet equipment maintenance schedules at wastewater treatment plants, provide electrical maintenance for the new water-activated sludge thickening and chlorine system at the 91st Avenue wastewater treatment plant, and convert the odor control pilot program along the Southern Avenue Interceptor into an ongoing program. In addition, funding for staff and supplies were recommended to convert contracted vactor truck service to an in-house service, improve supervision, and improve service levels for plan and new facility reviews. 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. Comments from the community were incorporated into the City Manager’s recommended budget that was presented to the Mayor and Council on May 1. As a result of community input the budget included funding to begin restoring community center hours and provided funding for modest capital improvements for Cementerio Lindo at 15th Avenue and Durango Street. Also included in the budget were additional police officers to further enhance transit security and four fire prevention positions to respond to workloads associated with new development plans review. Finally, city departments were provided the opportunity to use cost reductions within their budgets to fund needed administrative support. These self-funded additions included improved boards and commissions support services; better compliance with environmental construction standards; and greater ability to keep up with workloads in recruiting, testing and labor relations. TENTATIVE BUDGET ADOPTION – MAY 30 A public hearing and tentative budget adoption was held on May 30 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 13 A public hearing and final adoption were conducted on June 13. Adoption of the property tax levy was scheduled no less than 14 days later on July 2 in accordance with state law. The following chart is an overview of the 2007-08 budget calendar. Community Input The proposed budget was presented at 12 budget hearings conducted throughout the community from April 5 through April 20 including special hearings for youth and seniors. Following a presentation describing the proposed budget, residents were invited to comment. In addition 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 8 edition of The Arizona Republic and the April 11 edition of the Arizona Informant. A Spanish version of this publication was included in Prensa Hispana. 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 2007-08 Budget Calendar January 23 Early Budget Discussion and Options for Budget Review Process March 6 Initial 2007-08 Budget Status Report April 3 2007-08 Proposed Trial Budget and 2007-12 Preliminary Capital Improvement Program Week of April 8 Budget Insert in Local Newspapers April 5 – 20 Community Budget Hearings April 24 2006 Bond Committee Meeting May 1 City Manager’s Recommended 2007-08 Budget May 8 Final City Council Budget Review May 30 Tentative Adoption of 2007-08 Budget and 2007-12 Capital Improvement Program June 13 Final Budget Adoption July 2 Property Tax Adoption 45 General Budget and Financial Policies City 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 general obligation. 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.” Action Required City Charter Prescribed Deadline 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 2007-08 budget development process are as follows: 2007-08 Arizona State Statute Budget Prescribed Deadline Dates City manager’s recommended fiveyear Capital Improvement Program submitted to the City Council. At least three months prior to final date for submitting the budget or a date designated by the City Council. Capital Improvement Program not required. April 3 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 1 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 May 16 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 May 16 47 City Charter Prescribed Deadline 2007-08 Arizona State Statute Budget Prescribed Deadline Dates 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 30 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 June 4 and 11 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 7 days but not more than 10 days before required hearing. Publish May 28 and June 4 No requirement. Public hearing plus truth-in-taxation hearing immediately followed by final budget adoption. No later than second Monday in August. June 13 Property Tax Levy Adoption. No sooner than two weeks following final budget adoption and no later than the third Monday in August. Action Required 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 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 2 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, lighting, open space preserves, parks, playgrounds, recreational facilities, public safety, enforcement, fire emergency and street and transportation 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. Due to the current home rule option expiring at the end of fiscal year 2007-08, the 2007 Spending Limit Task Force recommended that the Mayor and City Council refer a local alternative expenditure limitation to the Sept. 11, 2007, ballot that sets the limit equal to the budget after the Mayor and Council have publicly reviewed the budget in hearings for each Council district. That limit would be in effect for four fiscal years from 2008-09 through 2011-12 and would allow Phoenix residents to continue to control local expenditures. 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 Councilapproved 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; 2006-07 was at 2.7 percent and the 2007-08 budget amount will increase the contingency allowance to 2.9 percent of operating expenditures. 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 more than 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, 42 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. In addition, several detailed revenue policies are listed below. 51 1. Privilege License and Use Taxes (Sales 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 and Solid Waste 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. 5. Fines and Forfeitures - The Municipal Court has jurisdiction over establishing many of the fine and forfeiture fee schedules. 52 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. 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. excise tax fund is used to account for tax revenues ultimately pledged to pay principal and interest on various debt obligations. FUND STRUCTURE 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. General Funds 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. 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. Special Revenue Funds Excise Tax – The Police and Fire Neighborhood Protection – These funds are used to 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. Police and Fire Public Safety Enhancement – These funds are used to account for the revenues and expenditures associated with a voter-approved 2.0 percent increment of the 2.7 percent 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 debt 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. Arizona Highway User Revenue (AHUR) – AHUR funds are made up of 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. 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. Other Restricted Funds – This is a 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. Enterprise Funds 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. Fiduciary Funds 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 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 Revenue estimates for 2007-08 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, sewer and solid waste services, 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 include portions of court fines and fees, and ambulance fees. Finally, consistent with recommendations of the 2006 Bond Committee, the primary property tax levy remains at the maximum allowable amount. The current combined primary and secondary property tax rate remains the same at $1.82. The state and local economy achieved strong growth in 2004-05 and 2005-06, bolstered by strong growth in construction, retail sales, and business and personal income taxes. Growth has slowed in 2006-07 as the local housing market has cooled. It is assumed that growth rates will moderate for the balance of the year and throughout next 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 6.7 percent in 2007-08, down from the 9.5 percent estimated for 2006-07. In non-General Fund revenues, the 2007-08 estimates for Water, Wastewater and Solid Waste systems reflect full year impacts of 2006-07 fee increases. Personal Income Growth 12% 10.5% 9.5% 10% 8% 6% $ 8.0% $ 6.7% 6.5% $ $ 4% $ $ 9.5% $ 6.7% 5.8% 4.6% 4.3% $ $ $ $ 2% 0% 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 Fiscal Year 2004-05 2005-06 2006-07 Est. 2007-08 Est. 55 GENERAL REVENUES BY MAJOR SOURCE (In Thousands of Dollars) Revenue Source Increase/(Decrease) from 2006-07 Est. Amount Percent 2005-06 Actuals % of Total 2006-07 Estimate % of Total 2007-08 Budget % of Total $406,153 2,332 43.0% 0.2% $437,808 2,355 42.8% 0.2% $468,056 2,355 41.9% 0.2% 30,248 – 6.90% 0.00% $408,485 43.2% $440,163 43.1% $470,411 42.1% $30,248 6.90% 141,194 138,313 63,108 14.9% 14.6% 6.7% 144,348 167,579 60,584 14.1% 16.4% 5.9% 154,234 207,826 63,007 13.8% 18.6% 5.6% 9,886 40,247 2,423 6.80% 24.00% 4.00% $342,615 36.2% $372,511 36.5% $425,067 38.0% $52,556 14.10% 89,721 9.5% 95,660 9.4% 102,317 9.2% 6,657 7.00% 2,486 8,662 20,726 850 2,694 28,664 1,419 1,481 4,564 1,952 12,415 2,429 14,340 2,115 0.3% 0.9% 2.2% 0.1% 0.3% 3.0% 0.2% 0.2% 0.5% 0.2% 1.3% 0.3% 1.5% 0.2% 2,580 9,850 22,515 810 2,600 32,390 1,325 1,629 5,040 1,683 13,773 2,470 15,551 1,427 0.3% 1.0% 2.2% 0.1% 0.3% 3.2% 0.1% 0.2% 0.5% 0.2% 1.3% 0.2% 1.5% 0.1% 2,603 10,018 25,573 864 1,400 37,407 1,325 1,726 5,036 1,683 14,004 2,472 14,680 1,368 0.2% 0.9% 2.3% 0.1% 0.1% 3.3% 0.1% 0.2% 0.5% 0.2% 1.3% 0.2% 1.3% 0.1% 23 168 3,058 54 -1,200 5,017 – 97 -4 231 2 -871 -59 0.90% 1.70% 13.60% 6.70% -46.20% 15.50% 0.00% 6.00% -0.10% 0.00% 1.70% 0.10% -5.60% -4.10% Subtotal $104,797 11.1% $113,643 11.1% $120,159 10.7% $6,516 5.70% TOTAL GENERAL FUND $945,618 100.0% $1,021,977 100.0% $1,117,954 100.0% $95,977 9.40% Local Taxes Sales Tax Privilege License Fees Subtotal State-Shared Revenues Sales Tax State Income Tax Vehicle License Tax Subtotal Primary Property Tax 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 2007-08 General Fund revenues are estimated to be $1,118.0 million or 9.4 percent more than 2006-07 estimates of $1,022.0 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 2007-08 revenue estimates. Phoenix share in 2006-07 was impacted by the 2005 census, which resulted in a significant reduction in Phoenix’s share of state sales tax revenues. Combined local and state sales revenues for 2007-08 are expected to grow by 6.9 percent over 2006-07 estimates. Combined rates of growth since 2000-01 are provided in the chart below. The table on the previous page details estimated General Fund revenues by major category. Local and state sales tax collections represent approximately 56 percent of General Fund revenues. Local sales taxes for 2007-08 are expected to grow by 6.9 percent over 2006-07 estimates. This is a decrease from the 7.8 percent growth rate in local sales taxes anticipated in 2006-07. Phoenix’s share of state sales taxes for 2007-08 is expected to grow by 6.8 percent over 2006-07 estimates. This is increased from the 2.2 percent growth in Phoenix’s share anticipated in 2006-07. However, the 13.8% 14% Local and State Sales Tax Revenue Growth 12% 10% 8.1% 8% 6.2% 6.4% 6.9% 2006-07 2007-08 6% 4% 3.3% 2% 0.3% 0% -0.5% -2% 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Fiscal Year 57 LOCAL SALES TAXES AND FEES GENERAL FUNDS This major revenue category consists of various local sales taxes, privilege license fees, use tax, and franchise taxes and fees. The 2007-08 estimate is $470.4 million, which is $30.2 million or 6.9 percent greater than the 2006-07 estimate of $440.2 million. The assumptions used to estimate local sales taxes follow. Total Revenues – $1,118.0 Million Local Sales Tax 42.1% 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 and contribute to 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, 2 percent of utilities sales tax collections paid by those utilities with a franchise agreement 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 $470,411,000 for 2007-08. This is an increase of $30,248,000 or 6.9 percent from the 2006-07 estimate of $440,163,000. The increase in local sales tax revenue is based on estimated growth of 5.5 percent in the retail sales category, and reflects slower growth consistent with predictions of local economists. Projected increases in other categories include 9.7 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 Parks & Preserves Transit 2000 Convention Sports Center Facilities Total – 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% * – 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% ** – 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% – – – – – – – – – – – – – – – – – – 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% 2.7% – – – – – – 2.0% 4.7% * 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 Capital Construction percent for utility and franchise; 7.8 percent for commercial rentals; 7.8 percent for restaurants and bars; and 10.3 percent for hotel/motel room rentals. As shown in the pie chart on the right, the retail category represents approximately 42 percent of the General Fund sales tax. Personal income growth, which is used as a trend indicator for retail sales activity, is projected at 6.7 percent for 2007-08. 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 2007-08, these categories are expected to increase 8.7 percent, 7.8 percent and 5.9 percent respectively. These three categories combined are approximately 17 percent of General Fund sales tax revenue. The contracting category is expected to increase by 12.2 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 2006-07 growth is 14.2 percent. For 2007-08, indicators for job creation and population growth predict that residential construction activity will continue to slow. This slowing, however, will be offset by significant public sector commercial construction projects such as the Convention Center expansion, the downtown hotel and light rail. This category represents approximately 10 percent of the General Fund sales tax revenue. The restaurants and bars category is expected to increase 7.8 percent and the hotel/motel category is expected to increase 10.3 percent in 2007-08. 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 2006-07 are 8.0 percent and 10.5 percent respectively. GENERAL FUNDS Local Sales Taxes Various Leases and Rentals 17% Retail 42% Tourism-related 7% Contracting 10% 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 2007-08 estimate for utility sales and franchise tax revenue is $90,975,000, which is an increase of 7.8 percent over the 2005-06 estimate. The increase is partly due to recent and expected future rate increases for 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 2007-08 estimate of $16,004,000 for use tax is 7.9 percent or $1,172,000 more than the 2006-07 estimate. This category is subject to variation in purchasing practices, as well as economic drivers. The use tax category is approximately 3 percent of General Fund sales tax revenue. The following table shows General Fund sales tax collections since 2003-04. Other 4% Utility & Franchise 20% The amounts shown exclude the two additional utility tax items that are collected based on water service accounts. The first of the two additional utility tax items collected on water service accounts was implemented on Oct. 1, 1990. The 2007-08 estimate of $6,712,000 for this category is 2.5 percent higher than the 2006-07 estimate of $6,549,000. The second provides funding for storm water management programs required by the Environmental Protection Agency. The 2007-08 estimate of $1,344,000 for this tax is 2.5 percent greater than the 2006-07 estimate of $1,311,000. This increase provides for modest growth in accounts. GENERAL FUND SALES TAXES (In Thousands of Dollars) Fiscal Year Revenues % Change From Previous Year 2003-04 $325,547 2004-05 349,120 7.2 2005-06 398,319 14.1 2006-07 (Est.) 429,779 7.9 2007-08 (Est.) 459,827 7.0 5.8% 59 Privilege License Fees The city charges a $20 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 $2 per unit ($50 maximum) annual fee on each apartment complex for non-transient lodging. The 2007-08 estimate for privilege license fee revenue of $2,355,000 represents no change from the 2006-07 estimate. Historically, the net change in the number of licensed businesses is small. GENERAL FUNDS Total Revenues – $1,118.0 Million State-Shared Revenue 38.0% STATE-SHARED REVENUES This major revenue category consists of the city’s share of the state sales tax, the state income tax and vehicle license tax. The 2007-08 estimate for this category is $425.1 million, which is $52.6 million or 14.1 percent more than the 2006-07 estimate of $372.5 million. The increase is mainly due to projected growth rates of 6.8 percent in state-shared sales taxes and 24.0 percent in state-shared income taxes. The increase in the income tax collections reflects personal and corporate income growth in 2005-06. State-shared vehicle license tax revenue for 2007-08 is estimated to grow at 4.0 percent over the 2006-07 estimate. State Sales Tax 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 nonshared” 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. Phoenix’s share of the distribution to cities for 2007-08 is estimated at 30.4 percent. The city’s share of the state sales tax for 2007-08 is expected to be $154,234,000, which is $9,886,000 or 6.8 percent more than the 2006-07 estimate of $144,348,000. This estimate is based on the assumption that, similar to the local economy, the state economy will continue to show growth but at a moderated pace. At the state level, retail sales are anticipated to ________________________________________________________________________ STATE SALES TAXES (In Thousands of Dollars) ________________________________________________________________________ Cities’ Share of State Collections Phoenix’s Share __________________ ______________________________ Fiscal Year Total % Change Percent Amount % Change ________________________________________________________________________ 2003-04 2004-05 2005-06 2006-07 (Est.) 2007-08 (Est.) $340,536 376,213 435,568 471,431 505,030 7.6% 10.5 15.8 8.2 7.1 *Impact of 2005 census population changes. 60 32.6% 32.5 32.5 30.4* 30.4 $111,594 123,788 141,194 144,348 154,234 7.9% 10.9 14.1 2.2 6.8 increase about 5.2 percent over the current fiscal year. The table below shows the cities’ share of state sales taxes, Phoenix’s allocation and annual increases since 2003-04. The population factor changes with decade or mid-decade census counts and periodic adjustments made throughout the year. State Income Tax Since in 1973, cities in Arizona have shared 15 percent of the actual state personal and corporate income tax collected two years earlier. Individual cities receive their portion based on the cities’ share of the state population. The 15 percent portion of the state income tax, which will be distributed to cities and towns in 2007-08, is expected to be $684.5 million. The distribution represents actual individual and corporate income tax collections by the state in the 2005-06 fiscal year. The anticipated $684.5 million is a 24.2 percent increase from the previous fiscal year. The large increase is a result of rapid growth in personal income and corporate profits two years ago. Personal income tax payments grew by 24.1 percent and corporate income tax payments grew by 24.5 percent. The city of Phoenix’s portion of the state income tax is estimated to be approximately 30.4 percent of the 15 percent share distributed to cities. This equates to $207,826,000 for 2007-08 and is an increase of $40,247,000 or 24.0 percent from the 2006-07 estimate of $167,579,000. The table on the right shows the total cities’ share of state income tax, Phoenix’s share, percentage allocation and annual increase since 2003-04. 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 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 2005 census, Phoenix’s percentage of population within Maricopa County is approximately 42.6 percent, down from 46.1 percent based on the 2000 census. STATE INCOME TAX (In Thousands of Dollars) Cities’ Share of State Collections % Shared w/Cities Fiscal Year 2003-04 2004-05 2005-06 2006-07 (Est.) 2007-08 (Est.) Total 14.8% 15.0 15.0 15.0 15.0 $365,842 373,073 425,229 551,231 684,539 Phoenix’s Share % Change Percent Amount % Change (14.9)% 2.2 13.9 29.6 24.2 32.6% 32.5 32.5 30.4* 30.4 $119,118 121,440 138,313 167,579 207,826 (15.3)% 1.9 14.0 21.2 24.0 *Impact of 2005 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 ________________________________________________________________________ 2003-04 2004-05 2005-06 2006-07 (Est.) 2007-08 (Est.) $116,050 122,619 136,835 142,182 147,870 46.1% 46.1 46.1 42.6 42.6 $53,522 56,552 63,108 60,584 63,007 $5,764 3,030 6,556 (181) 2,423 12.1% 5.7 11.6 (0.3) 4.0 61 Phoenix’s share of the vehicle license tax for 2007-08 is anticipated to be $63,007,000, which is $2,423,000 or 4.0 percent more than the 2006-07 estimate of $60,584,000. The table on the previous page shows the cities’ share of the vehicle license tax, Phoenix’s share, allocation percentage and annual percentage change since 2003-04. GENERAL FUNDS Total Revenues – $1,118.0 Million 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 voter-approved general obligation bond debt service. The annual increase in the primary property tax levy is limited by the Arizona Constitution to a 2 percent increase over the prior levy 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 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. By Council policy, the $1.82 rate remains in effect today. The 2006 Bond Committee recommended that maximum allowable primary property taxes be levied in order to help support operating and maintenance costs resulting from 2006 bond-funded capital projects. 62 Primary Property Tax 9.2% ________________________________________________________________________ PRIMARY PROPERTY TAX ________________________________________________________________________ Primary Assessed Rate per Valuation % Primary Levy % $100 Assessed Fiscal Year (in Billions) Change (in Thousands) Change Valuation ________________________________________________________________________ 2003-04 2004-05 2005-06 2006-07 (Est.) 2007-08 (Est.) $9,049 9,800 10,637 11,431 12,890 9.4% 8.3 8.5 7.5 12.8 $76,392 83,304 91,311 96,622 103,664 17.3% 9.0 9.6 5.8 7.3 $.8500 .8500 .8584 .8453 .8042 ________________________________________________________________________ Primary Property Tax Rate (combined rate each year is $1.82) $1.00 0.80 0.85 0.85 0.86 0.85 2004-05 2005-06 2006-07 0.80 $0.75 $0.50 $0.25 $0.00 2002-03 2003-04 2007-08 Fiscal Year The chart above shows the changes in the primary property tax rate since 2002-03. The primary property tax rate begins trending down in 2006-07 because the levy is capped at 2 percent regardless of the growth in property values. The estimated 2007-08 primary property tax levy is $103,664,000, which is the maximum amount allowed by the Arizona Constitution. This is a 7.3 percent increase over the 2006-07 levy of $96,622,000. The change in the primary levy reflects an estimated $5,008,000 increase for collections associated with new properties entering the rolls, plus $2,034,000 for the State Constitution allowed 2 percent increase on the prior year levy. The primary assessed valuation of $12.89 billion is approximately 12.8 percent above the 2006-07 primary assessed valuation of $11.43 billion. Of this increase about 44 percent is from new properties. Historically, actual property tax collections are slightly lower than the amount levied. For 2007-08, actual collections for primary property tax are estimated to be $102,317,000 or 98.7 percent of the levy amount. The 2007-08 levy results in an estimated primary property tax rate of $0.8042 per $100 of assessed valuation. This would result in a secondary property tax rate of $1.0158 to maintain a total property tax rate of $1.82 per $100 of assessed valuation. The table on the previous page shows primary assessed valuation, primary property tax revenues and primary rates since 2003-04. 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 2007-08 estimate for this category is $120.2 million, which is $6.5 million or 5.7 percent higher than the 2006-07 estimate of $113.7 million. Following are descriptions of the various categories and explanations of the revenue estimates. GENERAL FUNDS Total Revenues – $1,118.0 Million User Fees and Other Revenues 10.7% 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 2007-08 estimate of $2,603,000 is 0.9 percent higher than the 2006-07 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 2007-08 estimate of $10,018,000 is $168,000 or 1.7 percent greater than the 2006-07 estimate of $9,850,000. The increase assumes conservative growth in the customer base, plus a moderate rate increase of 2 percent for one of the cable providers. The license for the other cable provider was recently renegotiated and provides that the amount will remain at calendar year 2006 levels. The only revenue increase for that provider relates to the elimination of the public access channel revenue offset. 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 2007-08 estimate of $25,573,000 is $3,058,000 or 13.6 percent more than the 2006-07 estimate of $22,515,000. The estimate reflects increases in all categories. Several traffic enforcement programs, a driving under the influence pilot program, and increased collections are 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 2007-08 estimate for this revenue category is $864,000, which is 6.7 percent higher than the 2006-07 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 2007-08 estimate of $1,400,000 is $1,200,000 or 46.2 percent less than the 2006-07 estimate of $2,600,000. The decrease in 2007-08 is due to an anticipated large bad debt write-off due to a customer’s bankruptcy. 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 2007-08 estimate for ETS is $28,000,000, which is $1,736,000 or 6.6 percent greater than the 2006-07 estimate of $26,264,000. The primary reason for the projected increase is due to anticipated higher collection rates as a result of bringing the collection activity in-house. The 2007-08 projected revenue also includes rate increases approved by the Arizona Department of Health Services and modest growth in the number of transports. Other Fire revenue sources include fire prevention inspection fees, computer-aided dispatch (CAD) and various other services provided to the community. The 2007-08 estimate for other fire services is $9,407,000 which is 53.6 percent above 2006-07. Increased fees for computer-aided dispatch contribute to the increased revenues. Library fee and fine revenue for 2007-08 is expected to be $1,726,000, which is $97,000 or 6.0 percent above the 2006-07 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. This user fee category includes permit fees for utility construction in the public rights of way as well as utility ordinance inspections. The 2007-08 estimate of $2,472,000 is just slightly more than the 2006-07 estimate of $2,470,000. 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 2007-08 estimate of $5,036,000 is $4,000 or 0.1 percent below the 2006-07 estimate. The decrease in 2007-08 is due to a slight decrease in projected property rental 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 2007-08 estimate of $14,680,000 is $871,000 or 5.6 percent less than the 2006-07 estimate of $15,551,000. This is primarily due to a projected decrease in interest earnings. All Other Fees Planning User fees in this category include rezoning fees and zoning adjustment fees for use permits and variances. The 2007-08 estimate of $1,683,000, reflects no change from the 2006-07 estimate. Hazardous Materials Permit and Inspection Fee Police 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 2007-08 estimate is $1,325,000, which is the same as 2006-07 estimate. Revenues in this category have been historically consistent. 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. Finally, based on recent changes to governing statutes, a fee-recovered vehicle impound program began in 2005-06 which has contributed to Police revenue. For 2007-08, the estimate of $14,004,000 is 1.7 percent more than the 2006-07 estimate of $13,773,000. This fee category consists of miscellaneous service charges in the Finance, Housing, Human Services and Neighborhood Services departments and miscellaneous categories. The 2007-08 estimate of $1,368,000 is $59,000 or 4.1 percent less than the 2006-07 estimate of $1,427,000. 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 2007-08 revenue estimates. The table on the next page provides the 2006-07 and 2007-08 estimates and 2005-06 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 2007-08 estimate of $34,366,000 is $2,457,000 or 7.7 percent greater than the 2006-07 estimate of $31,909,000. These estimates are consistent with those for the same categories in the local sales tax discussion. Also, $211,000 is estimated for interest earnings in 2007-08. 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 2007-08 estimate of $25,902,000 is $2,679,000 or 11.5 percent greater than the 2006-07 estimate of $23,223,000. These estimates are consistent with the utilities sales tax forecast for the General Fund. 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 2007-08 estimate of $34,364,000 is $2,453,000 or 7.7 percent more than the 2006-07 estimate of $31,911,000. These estimates are consistent with the estimates for the same categories in the local sales tax discussion. Also, $2,600,000 is estimated for interest earnings in 2007-08. 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 2007-08 estimate of $137,456,000 is $9,805,000 or 7.7 percent greater than the 2006-07 estimate of $127,651,000. 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 2007-08 fare box revenue estimate of $27,263,000 is 9.0 percent greater than the 2006-07 estimate. The 2007-08 estimate also includes interest earnings and other miscellaneous revenue of $9,009,000 which is a 12.9 percent decrease from 2006-07 estimate of $10,348,000. The decrease in interest earnings is primarily the result of the planned reduction in the Light Rail Fund balance as construction continues. 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 police and prosecutor functions. Revenue estimates are based on cases in progress. The estimate for 2007-08 is $3,174,000. NON-GENERAL FUND REVENUES BY MAJOR SOURCE (In Thousands of Dollars) Revenue Source Increase/(Decrease) from 2006-07 Est. Amount Percent 2005-06 Actual 2006-07 Estimate 2007-08 Budget $29,894 20,330 31,867 156,167 4,217 59,220 19,562 15,808 127,835 7,034 10,409 3,133 108,652 2,934 1,683 138 23 12 2,155 11,614 $32,133 23,223 34,511 163,015 5,584 56,100 19,720 17,005 130,967 6,969 27,507 1,893 120,209 1,980 1,748 133 21 20 1,737 8,468 $34,577 25,902 36,964 173,728 3,174 58,800 20,677 18,743 136,058 6,880 24,936 2,580 164,127 1,190 1,883 133 21 20 1,765 4,536 $2,444 2,679 2,453 10,713 -2,410 2,700 957 1,738 5,091 -89 -2,571 687 43,918 -790 135 – – – 28 -3,932 7.60% 11.50% 7.10% 6.60% -43.20% 4.80% 4.90% 10.20% 3.90% -1.30% -9.30% 36.30% 36.50% -39.90% 7.70% 0.00% 0.00% 0.00% 1.60% -46.40% 68,376 44,224 18,225 12,491 7,853 9,517 14,204 $174,890 68,261 36,026 16,195 18,266 9,384 8,587 25,214 $181,933 66,567 34,256 37,634 14,767 13,046 8,325 22,302 $196,897 -1,694 -1,770 21,439 -3,499 3,662 -262 -2,912 $14,964 -2.50% -4.90% 132.40% -19.20% 39.00% -3.10% -11.50% 8.20% $787,577 $834,876 $913,591 $78,715 9.40% Aviation Water System Wastewater System Solid Waste Convention Center Golf Courses 290,127 297,711 177,169 118,670 67,784 6,793 314,175 304,205 200,065 123,913 74,287 8,317 322,973 333,327 203,069 126,929 80,849 8,557 8,798 29,122 3,004 3,016 6,562 240 2.80% 9.60% 1.50% 2.40% 8.80% 2.90% Total Enterprise Funds $958,254 $1,024,962 $1,075,704 $50,742 5.00% $1,745,831 $1,859,838 $1,989,295 $129,457 7.00% 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 Subtotal - Grants Total Special Revenue Funds Enterprise Funds TOTAL NON-GENERAL FUND REVENUE 67 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 2007-08 estimate is $58,800,000, which is $2,700,000 or 4.8 percent more than the 2006-07 estimate of $56,100,000. This is primarily due to an anticipated reduction in the backlog of work, which will result in a decrease in deferred revenue. It is also due to an increase in projected interest earnings. Capital Construction This category includes revenue from a 2 percent increase in the sales tax on telecommunications implemented in February 1998 and is intended to reimburse Phoenix residents for the use of their public rights of way by the telecommunications industry. The 2007-08 estimate is $19,927,000, or a 4.8 percent increase over the 2006-07 estimate. These funds are used primarily for right of way improvements in the Street Transportation Capital Improvement Program. The 2007-08 estimate also includes interest earnings, for which, $700,000 is estimated in 2006-07 and $750,000 is estimated in 2007-08. 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 2007-08 estimate is $18,193,000, which is $1,788,000 or 10.9 percent more than the 2006-07 estimate of $16,405,000. The revenue estimates are consistent with the General Fund sales tax estimates in the hotel/motel and short-term vehicle rental categories. The 2007-08 estimate includes $8.1 million for the hotel/motel portion and $9.9 million for the short-term car rental portion. Also, $550,000 is estimated in 2007-08 for interest revenue. 68 ARIZONA HIGHWAY USER REVENUES (In Thousands of Dollars) Increase/(Decrease) Amount Percent Fiscal Year AHUR Distribution 2003-04 $111,757 $7,161 2004-05 117,464 5,707 5.1 2005-06 124,791 7,327 6.2 2006-07 (Est.) 127,967* 3,176 2.5 2007-08 (Est.) 133,458 5,491 4.3 6.9% *2005 Census adjustment to population is reflected. Arizona Highway User Revenue The State Transportation Financing Plan adopted by the Legislature in 1981 and amended in 1982 and 1985 included 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 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). As a result of the 2005 census, Phoenix’s share was adjusted. For 2007-08, it is anticipated that Phoenix will receive $108.0 million from the 27.5 percent share and $25.4 million from the 3 percent share. The total 2007-08 AHUR estimate of $136,058,000 is $5,091,000 or 3.9 percent above the 2006-07 estimate of $130,967,000. Included in the estimate is interest earnings of $2,200,000 in 2006-07 and $1,800,000 in 2007-08. The state-shared increase is based on average annual increases at the state level of 3.0 percent in gasoline tax collections, 10.0 percent in motor carrier tax collections (trucking), 5.8 percent in vehicle license tax collections and 2.5 percent in vehicle registrations. The table above shows the state-shared Arizona Highway Users allocations to the city of Phoenix since 2003-04. 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 2007-08 estimate for LTA revenue is $6.9 million which assumes the $23 million maximum is reached. The city receives 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 ________________________________________________________________________ Secondary Assessed Rate per Valuation Secondary Levy $100 Assessed Fiscal Year (in Billions) % Change (in Thousands) % Change Valuation ________________________________________________________________________ 2003-04 2004-05 2005-06 2006-07 (Est.) 2007-08 (Est.) $ 9,792 10,490 11,420 12,261 16,069 11.2% 7.1 8.9 7.4 31.1 $ 94,984 101,756 109,811 119,509 163,227 5.6% 7.1 7.9 8.8 36.6 $0.9700 0.9700 0.9616 0.9747 1.0158 Regional Transit Revenues 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 2007-08 estimate of $24,936,000 matches reimbursements due from RPTA for the Regional Transportation Plan. The plan is funded by the Maricopa County transportation tax that was extended through December 2025 by Proposition 400. Community Reinvestment The 2007-08 estimate of $2,580,000 represents estimated redevelopment revenues to be received through various economic redevelopment agreements in Sky Harbor Center and the downtown area. Secondary Property Tax By law, the secondary property tax is earmarked for debt service on voter-approved general obligation bonds. There is no statutory limitation on the property taxes levied for debt service purposes. As discussed in the General Fund revenues section, the estimated 2007-08 primary property tax rate is $0.8042. To maintain our current $1.82 total rate, the resulting secondary rate is $1.0158 per $100 of assessed value for 2007-08. The 2007-08 secondary property tax levy of $163,227,000 is based on this rate and secondary assessed valuation of $16.07 billion. This resulting levy is $43,718,000 or 36.6 percent greater than the 2006-07 levy of $119,509,000. The increase is primarily because of a 31.1 percent increase in net assessed property values for Phoenix plus the increase in the secondary rate described above. This large increase in net assessed valuation reflects two years of growth on existing residential properties and $635 million in new values entering the rolls. Also included in the 2007-08 estimate is $900,000 in interest earnings, a 28.6 percent increase above 2006-07. The table above shows secondary assessed valuation, secondary property tax levies and secondary property tax rates since 2003-04. The total property tax rate of $1.82 for 2007-08 has remained unchanged since 1995-96. Impact Fee Program Administration In 1987, the City Council established an Impact Fee Program. Impact fees are charged 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. Impact fees may only be used to pay for the identified public infrastructure. In conjunction with the impact fee program, an administrative fee collected as a percentage of the gross impact fee 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 2006-07 and 2007-08 revenue estimates are $1,980,000 and $1,190,000 respectively. Effective Feb. 19, 2007, a reduction to the administrative fee from 3 percent to 1 percent of the gross impact fee was approved. As a result, it is expected that administrative fee revenue will decrease by $790,000 in 2007-08. 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 2007-08 estimate of $8,358,000 is $3,769,000 below the 2006-07 estimate of $12,127,000. The decrease is primarily due to the payment in 2006-07 of $3,500,000 as the private fund-raising match for constructing the Children’s Museum. 69 Public Housing Grants Public Transit Grants Aviation The 2007-08 Public Housing grants revenue included in the annual operating budget is $66,567,000, which is a 2.5 percent decrease from 2006-07. 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. The 2007-08 Federal Transit Administration Grant estimate is $13,046,000 reflecting an increase of $3,662,000 above the 2006-07 estimate of $9,384,000. Aviation revenue estimates include landing fees, concession revenues and interest income at Sky Harbor International, Deer Valley and Goodyear airports. Total Aviation revenue for 2007-08 is anticipated to be $322,973,000, which is $8,798,000 or 2.8 percent greater than the 2006-07 estimate of $314,175,000. The 2007-08 estimate anticipates conservative growth in airline fees, landing fees, concessions and parking revenues. The table on the next page shows Aviation revenue by major category and annual percent change since 2003-04. Human Services Grants The 2007-08 revenue estimate of $34,256,000 is $1,770,000 less than the 2006-07 estimate of $36,026,000. This category includes funds from the Department of Health and Human Services, Workforce Investment Act, Aging Program Grants and Head Start funds. 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 2007-08 CDBG entitlement is $37,634,000. Criminal Justice Grants The 2007-08 grant revenue for criminal justice programs is estimated to be $14,767,000. This includes Police, Court and Law department grants. Grants include Universal Hiring grants totaling $5.2 million, $8.1 million in other Police Department grants, and renewals of ongoing state grants. 70 HOPE VI Grant 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 $8,325,000 of that grant will be expended and earned in 2007-08. Other Grants The 2007-08 budget also includes $22,302,000 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 2007-08 is projected to be $333,327,000, which is $29,122,000 or 9.6 percent more than the $304,205,000 estimate for 2006-07. The 2007-08 estimate reflects a full year’s impact from the March 2007 rate increase for water sales and a projected increase for water miscellaneous user fees. It also reflects modest account growth coupled with a slightly lower overall consumption per account. The table on the next page shows water system revenues by major category since 2003-04. Public Housing Grants Public Transit Grants Aviation The 2007-08 Public Housing grants revenue included in the annual operating budget is $66,567,000, which is a 2.5 percent decrease from 2006-07. 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. The 2007-08 Federal Transit Administration Grant estimate is $13,046,000 reflecting an increase of $3,662,000 above the 2006-07 estimate of $9,384,000. Aviation revenue estimates include landing fees, concession revenues and interest income at Sky Harbor International, Deer Valley and Goodyear airports. Total Aviation revenue for 2007-08 is anticipated to be $322,973,000, which is $8,798,000 or 2.8 percent greater than the 2006-07 estimate of $314,175,000. The 2007-08 estimate anticipates conservative growth in airline fees, landing fees, concessions and parking revenues. The table on the next page shows Aviation revenue by major category and annual percent change since 2003-04. Human Services Grants The 2007-08 revenue estimate of $34,256,000 is $1,770,000 less than the 2006-07 estimate of $36,026,000. This category includes funds from the Department of Health and Human Services, Workforce Investment Act, Aging Program Grants and Head Start funds. 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 2007-08 CDBG entitlement is $37,634,000. Criminal Justice Grants The 2007-08 grant revenue for criminal justice programs is estimated to be $14,767,000. This includes Police, Court and Law department grants. Grants include Universal Hiring grants totaling $5.2 million, $8.1 million in other Police Department grants, and renewals of ongoing state grants. 70 HOPE VI Grant 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 $8,325,000 of that grant will be expended and earned in 2007-08. Other Grants The 2007-08 budget also includes $22,302,000 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 2007-08 is projected to be $333,327,000, which is $29,122,000 or 9.6 percent more than the $304,205,000 estimate for 2006-07. The 2007-08 estimate reflects a full year’s impact from the March 2007 rate increase for water sales and a projected increase for water miscellaneous user fees. It also reflects modest account growth coupled with a slightly lower overall consumption per account. The table on the next page shows water system revenues by major category since 2003-04. SUMMARY OF AVIATION REVENUES (In Thousands of Dollars) Airline Operation 2003-04 $78,910 2004-05 $84,039 2005-06 $89,005 2006-07 (Est.) $90,900 2007-08 (Est.) $93,032 Concessions and Rentals 120,032 126,490 153,814 174,055 181,550 32,919 33,346 34,343 Rental Car Facility Interest 6,758 6,644 6,850 8,000 6,400 Other/Federal Grants 9,668 7,304 3,041 2,583 2,680 Goodyear 1,773 1,820 1,725 2,129 2,123 Deer Valley 2,445 2,650 2,773 3,162 2,845 $219,586 $228,947 $290,127 $314,175 $322,973 2.9% 4.3% 8.3% 2.8% Total Aviation Revenue Change From Prior Year 26.7% SUMMARY OF WATER SYSTEM REVENUES (In Thousands of Dollars) 2006-07 (Est.) 2007-08 (Est.) 2003-04 2004-05 2005-06 Water Sales Environmental Consumption Charge Raw Water Charge Interest Development Fees Combined Service Fees Val Vista All Other $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 $200,390 26,662 16,563 16,602 9,901 2,215 6,942 18,436 $208,371 31,170 16,085 14,540 7,500 4,629 7,284 14,626 $236,587 34,953 17,177 14,657 6,500 4,548 6,762 12,143 Total Water Revenue $250,046 $252,643 $297,711 $304,205 $333,327 1.0% 17.8% 2.2% 9.6% Change From Prior Year (0.1%) 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 $203,069,000 in 2007-08, which is $3,004,000 or 1.5 percent greater than the 2006-07 estimate of $200,065,000. The 2007-08 estimate is based on moderate account growth of 1.8 percent and the full year’s realization of the March 2007 rate increase on sewer services. The table below shows Wastewater revenue by major category and annual percent change since 2003-04. This category includes revenues from the monthly residential collection and landfill tipping fees. The 2007-08 estimate of $126,929,000 is an increase of $3,016,000 or 2.4 percent greater than the 2006-07 estimate of $123,913,000. The increase assumes continuance of the January 2007 rate increase and a conservative growth in housing units of 1.8 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 $69,881,000 in 2007-08, an increase of 10.5 percent above 2006-07. Convention Center operating revenues are expected to be $5,849,000, parking revenue is expected to be $3,619,000, and interest revenue is expected to be $1,500,000, for total revenue estimates of $80,849,000. This is $6,562,000 or 8.8 percent more than the 2006-07 total estimated revenue of $74,287,000. 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 the next page shows the Convention Center excise tax collections since 2003-04. ____________________________________________________________________________________________________________ SUMMARY OF WASTEWATER SYSTEM REVENUES (In Thousands of Dollars) ____________________________________________________________________________________________________________ 2006-07 2007-08 2003-04 2004-05 2005-06 (Est.) (Est.) ____________________________________________________________________________________________________________ Sewer Service Charge $88,461 $99,121 $110,902 $121,228 $131,214 Environmental Charges 22,862 21,820 24,939 30,933 29,248 Development Fees 8,487 10,168 9,335 7,500 7,000 9,471 11,423 9,267 3,285 3,909 Interest Multi-City 17,118 16,705 17,261 20,954 21,552 Other 5,968 7,971 5,261 8,027 4,788 Total Wastewater Revenue Change From Prior Year 72 $146,805 $159,070 $177,169 10.6% 8.4% 11.4% $200,065 12.9% $203,069 1.5% 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 below, contracting and tourism represent 89 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 17 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 2006-07 and 2007-08 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) Fiscal Year Amount Collected Increase/(Decrease) Amount Percent 2003-04 $40,322 $3,473 2004-05 48,003 7,681 9.4% 2005-06 56,889 8,886 18.5 2006-07 (Est.) 63,224 6,335 11.1 2007-08 (Est.) 69,881 6,657 10.5 19.0 2007-08 CONVENTION CENTER Earmarked Sales Taxes Tourism-related 44% Contracting 45% Other 11% Golf Courses Revenue sources in the Golf Course category include greens fees, golf cart rentals, and pro shop sales at city golf courses which include Aguila, Cave Creek, Encanto, Maryvale, Palo Verde and Papago courses. The 2007-08 estimate of $8,557,000 is $240,000 or 2.9 percent above the 2006-07 estimate. This is due to an expected increase in total rounds of golf and a full year’s impact of the city’s assuming operations of three pro shops previously run by concessionaires. 73 n to n , ) G re g St a in gn er, d fr om le ft te ft ) D ou g L ea le (s es om d fr u g cl in in d l n ci ta n (s and ix C it y C ou P eg gy B il st en , a n d el Jo h n so n T h e P h oe n ox , M ic h a d on a n d tt or a G M il e h d P u M a y or m p lo t, C la ly, To m Si P eg gy N ee er t. eb Si D a ve V ic e M a y or 74 General Government MAYOR Mayor Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. Budget Allowance Explanation The Mayor’s operating budget allowance of $2,388,000 is $151,000 or 6.8 percent more than 2006-07 estimated expenditures and reflects normal inflationary increases. The budget also provides for the conversion of a contract position to part-time clerical staff to reduce turnover and enhance customer service. Community Attitude Survey Percent of citizens regarding the quality of life in Phoenix as positive ** Citizen Interaction Number of constituent cases (opened) Number of constituent cases (completed) 2005-06 2006-07* 2007-08 91% 91% 91% 779 801 999 978 1,100 1,050 *Based on 10 months of actual experience. **Based on 2006 Community Attitude Survey which is administered even-numbered years. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $2,354,000 $2,237,000 $2,388,000 21.0 20.0 20.5 Source of Funds: General $2,247,000 $2,216,000 $2,365,000 Grants 57,000 20,000 20,000 Other Restricted 50,000 1,000 3,000 75 CITY COUNCIL City Council Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. Community Attitude Survey Percent of citizens regarding the quality of life in Phoenix as positive ** Citizen Interaction Number of community outreach meetings*** Number of citizen cases per CitizenServe*** 2006-07* 2007-08 91% 91% 91% N/A N/A 86 5,400 86 5,400 *Based on ten months of actual experience. **Based on 2006 Community Attitude Survey which is administered even-numbered years. ***This is a new measure. Prior year data is not available. Expenditure and Position Summary 2005-06 Operating Expense Total Positions Budget Allowance Explanation 2005-06 2006-07 2007-08 $4,202,000 $4,571,000 $4,744,000 55.0 55.0 55.0 Source of Funds: The 2007-08 City Council operating budget allowance of $4,744,000 is $173,000 or 3.8 percent more than 2006-07 estimated expenditures. This increase reflects normal inflationary increases. General Other Restricted $4,250,000 $4,523,000 $4,744,000 (48,000) 48,000 — zo s, D a vi d C a va ro m le ft ) (f es d u cl ia t te a m in a , C y n th a n a ge m en R u th O su n C a ll ow, ec u ti ve m N a im a rk , ex k a rr is , To m ic ix H R n , oe ck ks h n Ja , ba ir on The P a gt F in k lt on Wa sh et or, F ra n ic tu re d ) A D a vi d K ri n d (n ot p a er m . m a ta Se el h is a Ta ka h er t a n d L D a vi d R ic 76 CITY MANAGER City Manager’s Office Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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 City Manager’s operating budget allowance of $1,214,000 is $84,000 or 7.4 percent more than 2006-07 estimated expenditures. This increase reflects normal inflationary adjustments. 2005-06 2006-07* 2007-08 Public satisfaction with city services ** 89% 89% 90% Citizen calls/correspondence responded to within established timeframes 99% 99% 99% Percent of employees agreeing that the city is a good place to work*** 96% 96% 96% *Based on 10 months actual experience. **Based on 2006 Community Attitude Survey which is administered even-numbered years. ***Based on 2005 Employee Survey which is administered odd-numbered years. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $1,132,000 $1,130,000 $1,214,000 6.0 6.0 6.0 Source of Funds: General $1,132,000 $1,130,000 $1,214,000 DEPUTY CITY MANAGERS Deputy City Manager’s Office Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. Budget Allowance Explanation The Deputy City Managers 2007-08 operating budget allowance of $2,071,000 is $218,000 or 11.8 percent more than 2006-07 estimated expenditures. The increase is the result of normal inflationary adjustments. 2005-06* 2006-07* 2007-08 Action items processed for City Council subcommittee consideration N/A N/A 240 Number of community and nonprofit meetings attended N/A N/A 95 Percent of targeted program improvements implemented N/A N/A 99% *This is a new measure. Prior year data is not available. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $1,611,000 $1,853,000 $2,071,000 22.0 23.0 23.0 Source of Funds: General Water $1,403,000 $1,526,000 $1,724,000 208,000 327,000 347,000 77 INTERGOVERNMENTAL PROGRAMS Intergovernmental Programs Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. Budget Allowance Explanation The Intergovernmental Programs 2007-08 operating budget allowance of $1,512,000 is $123,000 or 8.9 percent more than 2006-07 estimated expenditures. This increase reflects normal inflationary increases. 2005-06 2006-07* 2007-08 Number of governments, communities, regional and private sector agencies, neighborhood associations, commissions and organizations communicated with during the year. 508 508 500 Number of Arizona state legislative bill versions and amendments evaluated and prepared to support or oppose. 3,517 3,500 3,500 *Based on 10 months actual experience. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $1,196,000 $1,389,000 $1,512,000 6.3 6.3 6.3 Source of Funds: General Other Restricted $1,188,000 $1,386,000 $1,512,000 8,000 3,000 — PUBLIC INFORMATION Public Information Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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 The Public Information operating budget allowance of $3,522,000 is $52,000 or 1.5 percent less than 2006-07 estimated expenditures. The decrease reflects the replacement of camera equipment for the PHX 11 government access cable channel in 2006-07 partially offset by normal inflationary increases. 2005-06 2006-07* 2007-08 Number of news releases, media advisories and public service announcements issued 350 350 350 City publications reviewed and produced (i.e., City Council newsletters, City Page, City Connection, Notes and various brochures for city departments) 232 235 235 138 148 21 140 146 21 140 146 21 PHX 11 television programs produced - Standard programs - Requested unscheduled programs - Requested planned programs *Based on 10 months actual experience. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $3,217,000 $3,574,000 $3,522,000 31.0 31.0 31.0 Source of Funds: General Other Restricted 78 $3,213,000 $3,565,000 $3,514,000 4,000 9,000 8,000 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 2.8 $3 $2 3.0 2.5 2.5 2006-07 2007-08 1.5 $1 $0 2003-04 2004-05 2005-06 Fiscal Year City Auditor Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: Budget Allowance Explanation The City Auditor 2007-08 operating budget allowance of $3,353,000 is $327,000 or 10.8 percent more than 2006-07 estimated expenditures. This increase is primarily due to funding for additional technology audits and normal inflationary adjustments. 2005-06 2006-07* 2007-08 Performance audit and management reports issued 145 155 155 Percentage of commitment dates met 90% 92% 92% 100% 100% 100% 138 125 125 $21,000 $18,000 $18,000 8.4 8.5 8.5 Percentage of rulings issued timely Audit cycle time (calendar days) Cost per audit Customer satisfaction *Based on 10 months actual experience. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $2,751,000 $3,026,000 $3,353,000 38.5 38.5 38.5 Source of Funds: General $2,751,000 $3,026,000 $3,353,000 79 EQUAL OPPORTUNITY Equal Opportunity Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 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 $4,229,000 is $217,000 or 5.4 percent more than 2006-07 estimated expenditures. This increase includes the addition of a position to meet workloads associated with the M/W/SBE goals compliance program and normal inflationary increases. Also contributing to the increase is the carry forward of unspent funds for the Minority/Women/ Small Business Enterprise database. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $3,658,000 $4,012,000 $4,229,000 40.0 38.0 39.0 Source of Funds: General 80 $3,341,000 $3,636,000 $3,846,000 Community Development Block Grant 153,000 184,000 201,000 Federal and State Grants 113,000 137,000 128,000 Other Restricted 51,000 55,000 54,000 Discrimination complaints in employment, public accommodations, housing and Americans with Disabilities Act (ADA) accessibility, investigated and closed** 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 Number/percent of M/W/D/SBEs certified or recertified based on goal of 800 firms Number/percent of SBEs certified or recertified based on goal of 500 firms Contracts monitored for use of M/W/D/SBE subcontractors** 2005-06 2006-07* 2007-08 235 241 241 37 37 37 737 / 92% 755 / 94% 744 / 94% 651 / 130% 668 / 134% 668 / 134% 1,996 2,270 2,270 *Based on 10 months actual experience. **Contracts monitored fluctuate depending on the amount of construction work included in the annual Capital Improvement Program. The number of construction contracts monitored is estimated to increase in 2007-08 due to the continuation of several large multi-year projects, including the Phoenix Convention Center, the downtown hotel and light rail projects. 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 2007-08 operating budget allowance of $17,477,000 is $1,059,000 or 6.5 percent more than 2006-07 estimated expenditures. The 2007-08 budget includes the conversion of a temporary deputy personnel director, a personnel analyst II and a personnel aide to regular status. The deputy personnel director will address the growing labor relations needs of public safety employees and organizations. The personnel analyst and personnel aide will support the increase in workloads related to higher recruitment and selection processes, and career counseling requests. 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 Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: Annualized employee turnover rate Expenditure and Position Summary 2005-06 2006-07 Average work days from vacancy-to-fill date 2005-06 2006-07* 2007-08 5.71% 6.00% 6.00% 78 80 80 843 900 900 22 24 24 10,000 9,200 9,500 13 13 13 2007-08 Number of recruitment processes Operating Expense $15,152,000 $16,418,000 $17,477,000 Total Positions 113.4 116.4 116.4 Source of Funds: General City Improvement Other Restricted $13,803,000 $15,070,000 $16,157,000 1,073,000 1,077,000 1,076,000 276,000 271,000 244,000 Average work days for recruitment from opening to creation of eligibility list Employees participating in city-sponsored and language classes Number of industrial injuries per 200,00 man hours worked. *Based on 10 months actual experience. 81 PHOENIX EMPLOYMENT RELATIONS BOARD Phoenix Employment Relations Board Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. Number of cases filed** The Phoenix Employment Relations Board 2007-08 operating budget allowance of $228,000 is $31,000 or 15.7 percent more than 2006-07 estimated expenditures. This increase is primarily due to normal inflationary adjustments. 2007-08 17 7 17 Expenditure and Position Summary Total Positions 2005-06 2006-07 2007-08 $185,000 $197,000 $228,000 2.0 2.0 2.0 $185,000 $197,000 $228,000 Source of Funds: General RETIREMENT SYSTEMS Retirement Systems Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: Retirement Systems provides staff support to the general, police and fire retirement boards and administers retirement programs for all city employees. Budget Allowance Explanation The Retirement Systems gross operating budget allowance of $2,045,000 is $215,000 or 11.7 percent more than 2006-07 estimated expenditures. This increase is due primarily to increased costs for software and software maintenance, legal services and normal inflationary adjustments. The budget also converts a temporary technology position to regular status to meet system workloads. 2005-06 2006-07* 2007-08 COPERS’ general city retirements 297 335 353 COPERS’ public safety retirements 236 363 383 Appointments NA 655 680 Walk-in service NA 2,007 2,040 Telephone calls NA 11,545 12,000 COPERS’ general city and public safety member contacts *Based on 10 months actual experience. Expenditure and Position Summary 2005-06 Operating Expense (Gross*) Total Positions 2006-07 2007-08 $1,679,000 $1,830,000 $2,045,000 15.0 16.0 16.0 Source of Funds: General (Gross*) $1,679,000 $1,830,000 $2,045,000 *Gross costs are recovered through contributions to the pension fund. 82 2006-07* *Based on 10 months actual experience. **Number of cases filed may vary yearly depending upon specific issues encountered. Operating Expense Budget Allowance Explanation 2005-06 LAW Law Department Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. 2005-06 2006-07* 2007-08 Annualized employee turnover rate 5.71% 6.00% 6.00% Criminal cases sent to diversion 3,314 3,160 3,000 69,855 52,000 52,000 787 1,064 900 41,250 36,228 36,228 905 1,210 1,100 1,088 1,033 1,000 303 265 265 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 defendants submitted for charging review Budget Allowance Explanation The Law Department 2007-08 operating budget allowance of $23,543,000 is $2,058,000 or 9.6 percent more than 2006-07 estimated expenditures. The increase is primarily due to the addition of new positions to the Prosecutor’s Office. The positions include a technology specialist to manage the Prosecutor’s Case Management System and an attorney and court legal clerk to staff a courtroom to prosecute complex property maintenance cases and other city code violations. Also, two caseworkers were added in the current year to maintain compliance with legislation related to victim’s rights. The budget also continues the Initial Arraignment Court pilot program and converts temporary staff to regular status. Number of civil cases closed, including those assigned to outside counsel and handled through the alternative dispute resolution process Ordinances and resolutions for City Council adoption drafted and reviewed Number of jury trials prosecuted *Based on 10 months actual experience. A number of indicators are down, primarily due to the Prosecutor’s Office staffing the Arraignment and Initial Appearance (IA) Court beginning in FY 2006-07. The success of these recently implemented programs allows cases to be adjudicated prior to setting these matters to PDC or holding trial. Expenditure and Position Summary 2005-06 2006-07 2007-08 Operating Expense $20,170,000 $21,485,000 $23,543,000 Total Positions 246.0 252.0 255.0 Source of Funds: General $19,344,000 $20,775,000 $22,915,000 Court Awards 141,000 166,000 178,000 Grant 574,000 469,000 390,000 Other Restricted 111,000 75,000 60,000 83 INFORMATION TECHNOLOGY Information Technology Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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 Department operating budget allowance of $7,126,000 is $511,000 or 6.7 percent less than 2006-07 estimated expenditures. The decrease reflects the one-time costs in 2006-07 to upgrade critical network infrastructure and is partially offset by normal inflationary increases, the carryover of costs associated with critical business systems and budget additions. The budget additions include technical staff to implement a biannual maintenance program for the Phoenix Regional Wireless Network and maintenance costs for system security and network management software purchased with bonds. 2005-06 2006-07* 2007-08 Percentage of on-time operations center services 99.9% 99.9% 99.0% Number of ITD-supported network devices 14,680 17,200 17,200 99.9% 99.8% 99.9% 99.9% 100% 99.9% 99.9% 99.9% 99.9% 100% 99.0% 99.0% 99.0% 99.9% 100% Number of visits to phoenix.gov 12,200,000 14,000,000 15,000,000 Average cycle time of telephone service requests 2 weeks 2 weeks 2 weeks Average number of CityCom phone calls processed daily 100,815 103,000 102,000 1.0 hours 1.0 hours 1.0 hours 20,882 19,855 18,000 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. Number of devices has increased due to network redesign and inventory of nodes and devices. 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. Expenditure and Position Summary 2005-06 2006-07 2007-08 Operating Expense* $1,943,000 $7,637,000 $7,126,000 Total Positions 213.0 214.0 216.0 Source of Funds: General $403,000 $5,912,000 $5,313,000 City Improvement 1,010,000 1,013,000 1,014,000 Other Restricted 306,000 275,000 275,000 Aviation 224,000 228,000 234,000 Water — 168,000 223,000 Federal and State Grants — 41,000 67,000 *Reflects net costs; most costs are charged to other departments for services provided. 84 CITY CLERK AND ELECTIONS City Clerk Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. Budget Allowance Explanation The City Clerk operating budget allowance of $7,413,000 is $911,000 or 14.0 percent more than 2006-07 estimated expenditures. The increase primarily reflects funding of a regularly scheduled citywide election and normal inflationary increases. The budget also converts a temporary position which serves as a liaison to all citywide boards and commissions to regular status. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $8,059,000 $6,502,000 $7,413,000 129.2 130.2 2005-06 2006-07* 2007-08 Number of Council formal and special meeting agenda items 3,152 3,500 3,500 Minute pages prepared 3,115 3,100 3,100 Open meeting law notices posted ** 3,089 5,000 6,000 Water bills and other items presorted for mailing 8.2 M 8.2 M 8.2 M 24 24 24 100% 100% 100% 34.7 M 35.0 M 35.0 M 5,334 5,400 5,400 2 0 1 3 days 3 days 3 days Percent of “how to” questions resolved by Office Systems Help Desk 97% 95% 95% Customer satisfaction with department 97% 97% 97% Average number of days to process a business license Property ownership updates completed within five working days of receipt from county Total printing and copy impressions (including rapid copy) Total number of jobs processed City Council regular and special elections held Time to complete ballot processing and tabulation to obtain final unofficial results *Based on 10 months actual experience. **The number of open meeting law postings include meeting notices and meeting result postings as required by state law as of September 2006. 130.2 Source of Funds: General City Improvement $7,893,000 $6,339,000 $7,248,000 166,000 163,000 165,000 City Clerk _ Business License Activity Thousands 60 40 33 34 31 32 32 20 0 2003-04 2004-05 2005-06 2006-07 2007-08 Fiscal Year The decrease in 2005-06 is a result of the state of Arizona licensing massage practitioners. 85 FINANCE Finance Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. Budget Allowance Explanation The 2007-08 Finance operating budget allowance of $27,313,000 is $2,136,000 or 8.5 percent more than 2006-07 estimated expenditures. This reflects budget additions and normal inflationary increases. Budget additions include a purchasing position to address financial transaction workloads, and converting contracted common carrier services to regular city staff. This position will deliver city fuel to all city facilities, including those specifically governed by Homeland Security access requirements. The budget also includes General funding for an accounting position transferred from the HOPE VI project. Expenditure and Position Summary 2005-06 2006-07 2007-08 Operating Expense $23,047,000 $25,177,000 $27,313,000 Total Positions 313.5 316.5 319.5 Source of Funds: General 86 2006-07* 2007-08 $1,490 mil. 3.90% 1.49 $1,742 mil. 4.61% 1.67 $1,600 mil. 4.8% 1.75 $266 mil. 3.33% 0.06 $106 mil. 3.63% .12 $93 mil. 3.40% .14 $1,570 mil. 3.98% 0.17 $1,251 mil. 5.17% 0.19 $1,300 mil. 5.20% 0.25 $2.8 bil. $3.0 bil. $3.0 bil. AA+ Aa1 AAA Aa1 AAA 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 AAAa3 AAAa3 AAAa3 Senior lien street revenue - Standard & Poor’s Senior lien street revenue - Moody’s AAA Aa3 AAA Aa3 AAA 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 3,504 4,000 4,000 Receivables: Dollar value of receivables billed Percentage outstanding (as of June 30) $498 mil. 3.1% $520 mil. 4.0% $525 mil. 4.0% City sales (excise) tax collected $667 mil. $708 mil. $708 mil. Investments by portfolio: Treasurer’s Group Portfolio Dollars invested Average yield Average life (years) Yield Restricted Portfolio – Dollars invested Average yield Average life (years) Other Non-Yield Restricted Portfolio Dollars invested Average yield Average life (years) Dollar value of accounts payable warrants processed Bond ratings: General obligation - Standard & Poor’s General obligation - Moody’s *Based on 10 months actual experience. $21,566,000 $23,515,000 $25,497,000 Water 702,000 764,000 808,000 Wastewater 692,000 730,000 808,000 Sports Facilities 32,000 128,000 131,000 Public Housing 3,000 (12,000) 12,000 52,000 52,000 57,000 City Improvement 2005-06 BUDGET AND RESEARCH Budget and Research Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 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. 2005-06 2006-07* 2007-08 Percent variance of actual versus estimated expenditures for each major fund (data for the General Fund is shown) (0.1)% 0% -± .5% 0% -± .5% Percent variance of actual versus estimated revenues for each major fund (data for the General Fund is shown) 0.7% 0% -± .5% 0% -± .5% Percent of Requests for Council Action processed in one day N/A 75% 75% Cost savings and/or operational improvements identified (millions) $4.8 $6.0 $6.0 Customer satisfaction with research reports and other analyses (scale of 1-10) 9.2 10.0 10.0 Customer satisfaction with communication about budget decisions (scale of 1-10) 8.7 10 10 Customer satisfaction with capital budget development and impact fee support (scale of 1-10) 8.8 10 10 Percent of Capital Improvement Program budget encumbered 65.7% 65% 65% Budget Allowance Explanation The Budget and Research Department’s 2007-08 operating budget allowance of $4,597,000 is $467,000 or 11.3 percent more than 2006-07 estimated expenditures. This increase is due to the addition of a position to assist with data security and privacy as well as normal inflationary increases. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $3,682,000 $4,130,000 $4,597,000 33.0 33.0 34.0 Source of Funds: General Other Restricted $3,306,000 $3,674,000 $4,101,000 376,000 456,000 496,000 *Based on 10 months actual experience. 87 ENGINEERING AND ARCHITECTURAL SERVICES Program Goal 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. Number of Projects 225 150 88 120 114 90 110 110 75 0 2003-04 Budget Allowance Explanation The Engineering and Architectural Services Department gross operating budget allowance of $13,284,000 is $709,000 or 5.6 percent more than 2006-07 estimated expenditures. The budget includes the addition of two positions to ensure compliance with environmental standards. The gross cost of these positions will be recovered from fees charged to capital projects. The gross operating budget also reflects normal inflationary increases. Engineering and Architectural Services – Construction Projects Awarded 2004-05 2005-06 Fiscal Year Expenditure and Position Summary 2005-06 2006-07 2007-08 Operating Expense $11,326,000 $12,575,000 $13,284,000 (Gross*) Total Positions 112.1 116.1 118.1 Source of Funds: General (Gross*) Other Restricted $11,326,000 $12,557,000 $13,191,000 — 18,000 93,000 *The majority of Engineering and Architectural Services’ costs are charged to the appropriate capital improvement projects. 2006-07 2007-08 Engineering and Architectural Services Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2006-07* 2007-08 Number of construction contract bids awarded 341 300 300 Number of engineering and architectural consultant contracts awarded 120 110 110 Construction dollars as a percentage of total dollars awarded Minority-owned business enterprises Woman-owned business enterprises Small business enterprises 4.0% 4.0% 2.0% 3.0% 3.2% 4.0% 3.0% 3.0% 5.0% Percentage of utility permits reviewed and approved by target date** 85% 80% 80% *Based on 10 months actual experience. **Projected decrease in 2005-06 is due to impacts of anticipated increase in CIP projects workload. 89 of ti p s a n d th ou sa n d s d te a ig st tw o se ri a l p ol ic e in ve w it h on e of a rr is sa id on H ti ck ec n Ja n f ec t in co ol ic e C h ie t of a su sp P h oe n ix P to th e a rr es d . le a t re a a th le a d s P h oe n ix se s in th e p re d a to r ca 90 Public Safety The Public Safety Program Represents 31.9% of the Total Budget. POLICE 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 Public Safety program budget includes the Office of the Public Safety Manager, Police Department, Fire Department, Emergency Management and Family Advocacy Center. Police Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: OFFICE OF THE PUBLIC SAFETY MANAGER 2005-06 The Office of the Public Safety Manager oversees and coordinates operations of the Phoenix Police Department, the security operations of the Aviation, Transit (including Light Rail), and Water Services departments, the city’s Emergency Management Program and Emergency Operations Center. The Office of the Public Safety Manager’s 2007-08 operating budget allowance of $391,000 is $253,000 more than 2006-07 estimated expenditures and reflects a full year’s operating costs for the newly created function. Expenditure and Position Summary $ Total Positions 2005-06 2006-07 2007-08 —- $138,000 $391,000 —- 2.0 2.0 —- $138,000 $391,000 Source of Funds: $ Priority 1 - Emergency Priority 2 - Non-Emergency Priority 3 - All Others Telephone Callbacks Percentage of phone calls to 911 and Crime Stop answered within 10 seconds Cases accepted by the county attorney for issuance of complaint Budget Allowance Explanation General 2006-07* 2007-08 Average Response Time (Minutes) Program Goal Operating Expense The Police Department 2007-08 operating budget allowance of $521,174,000 is $51,189,000 or 10.9 percent more than 2006-07 estimated expenditures. This increase is primarily due to costs associated with opening and operating the new crime lab, a competitive officer starting salary adjustment, funding for the replacement of mobile computer terminals in police vehicles, a Maricopa County jail fee increase and other budget additions. Budget additions include 24 police communications operators to address increased workload and prepare for the opening of two new police precincts, two support staff for the Pecos Park Police Station and funding to replace expiring Moving violation citations issued Traffic accidents Percentage of cases cleared: Murder Rape Robbery Aggravated Assault Burglary Theft Auto Theft Arson 5.6 21.2 62.6 58.3 5.8 22.5 66.7 96.7** 5.7 21.6 64.7 76.9 83% 84% 84% 23,317 21,100 22,200 264,314 242,100 255,400 32,220 35,300 34,700 36% 25% 19% 40% 5% 13% 10% 6% 43% 19% 16% 40% 5% 13% 8% 8% 40% 20% 17% 40% 5% 13% 9% 7% *Based on 10 months actual experience. **Starting in October 2006 callback was moved temporarily to a new location with limited equipment. This, combined with staffing changes, has resulted in longer response times to calls. 91 Public Safety The Public Safety Program Represents 31.9% of the Total Budget. POLICE 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 Public Safety program budget includes the Office of the Public Safety Manager, Police Department, Fire Department, Emergency Management and Family Advocacy Center. Police Major Performance Measures and Service Trends The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: OFFICE OF THE PUBLIC SAFETY MANAGER 2005-06 The Office of the Public Safety Manager oversees and coordinates operations of the Phoenix Police Department, the security operations of the Aviation, Transit (including Light Rail), and Water Services departments, the city’s Emergency Management Program and Emergency Operations Center. The Office of the Public Safety Manager’s 2007-08 operating budget allowance of $391,000 is $253,000 more than 2006-07 estimated expenditures and reflects a full year’s operating costs for the newly created function. Expenditure and Position Summary $ Total Positions 2005-06 2006-07 2007-08 —- $138,000 $391,000 —- 2.0 2.0 —- $138,000 $391,000 Source of Funds: $ Priority 1 - Emergency Priority 2 - Non-Emergency Priority 3 - All Others Telephone Callbacks Percentage of phone calls to 911 and Crime Stop answered within 10 seconds Cases accepted by the county attorney for issuance of complaint Budget Allowance Explanation General 2006-07* 2007-08 Average Response Time (Minutes) Program Goal Operating Expense The Police Department 2007-08 operating budget allowance of $521,174,000 is $51,189,000 or 10.9 percent more than 2006-07 estimated expenditures. This increase is primarily due to costs associated with opening and operating the new crime lab, a competitive officer starting salary adjustment, funding for the replacement of mobile computer terminals in police vehicles, a Maricopa County jail fee increase and other budget additions. Budget additions include 24 police communications operators to address increased workload and prepare for the opening of two new police precincts, two support staff for the Pecos Park Police Station and funding to replace expiring Moving violation citations issued Traffic accidents Percentage of cases cleared: Murder Rape Robbery Aggravated Assault Burglary Theft Auto Theft Arson 5.6 21.2 62.6 58.3 5.8 22.5 66.7 96.7** 5.7 21.6 64.7 76.9 83% 84% 84% 23,317 21,100 22,200 264,314 242,100 255,400 32,220 35,300 34,700 36% 25% 19% 40% 5% 13% 10% 6% 43% 19% 16% 40% 5% 13% 8% 8% 40% 20% 17% 40% 5% 13% 9% 7% *Based on 10 months actual experience. **Starting in October 2006 callback was moved temporarily to a new location with limited equipment. This, combined with staffing changes, has resulted in longer response times to calls. 91 state and federal grants. Also added is an Aviation-funded police sergeant to assist with TSA-mandated security at Sky Harbor Airport. Finally, 30 municipal security guards, one secretary, eight police officers and a police sergeant are added to increase security at park-and-ride facilities and the new Transit West Maintenance Facility. These positions will be funded by voter-approved Transit 2000 funds. The budget also converts three temporary staff to regular positions and adds an accountant to the Vehicle Impound Program. Expenditure and Position Summary 2005-06 Operating Expense 2006-07 2007-08 $421,175,000 $469,985,000 $521,174,000 Total Positions 4,168.7 4,371.7 4,439.7 Source of Funds: General $368,060,000 $404,482,000 $452,488,000 Neighborhood Protection 21,428,000 22,162,000 26,155,000 Public Safety Enhancement 9,352,000 14,382,000 17,666,000 11,900,000 17,797,000 14,378,000 Federal and State Grants City Improvement 1,813,000 3,889,000 5,325,000 Court Awards 3,790,000 5,193,000 3,099,000 Sports Facilities 993,000 993,000 993,000 Convention Center 782,000 782,000 782,000 3,039,000 287,000 288,000 18,000 18,000 —- Other Restricted Human Services Grant Police — Violent Crimes per 1,000 Residents 8 6.6 6.5 7.0 7.0 6.7 6 4 2 0 2003-04 2004-05 2005-06 Fiscal Year 92 2006-07 2007-08 Police — Property Crimes per 1,000 Residents 80 66 61 59 58 57 2004-05 2005-06 2006-07 2007-08 60 40 20 0 2003-04 Fiscal Year T h e P h oe n ix P ol ic e D ep a rt m en a cc re d it ed t L a bo ra to fo re n si c la ry Se rv ic es bo ra to ry th ev a lu a te s B u re a u is a t p ro vi d es a n d a n a ly a n a ti on a ze te ch n ic a l s re la te d to ev id en ce , ll y a ss is ta n ce th e fu ll sp in te rp re ts a n d tr a in ec tr u m of re su lt s a n in g, p h y si ca l ev d p ro vi d es id en ce re co ex p er t te st im on y ve re d fr om cr im e sc en es . 93 FIRE Program Goal Fire — First Unit Average Response Time The Fire Department provides the highest level of life and property safety through fire prevention, fire control, emergency medical and public education services. Minutes 6 4:53 Budget Allowance Explanation 5:00 4:56 5:03 5:06 2004-05 2005-06 2006-07 2007-08 4 The 2007-08 Fire operating budget allowance of $273,282,000 is $28,385,000 or 11.6 percent more than 2006-07 estimated expenditures. This increase reflects the carryover of the funds needed to replace the department’s self-contained breathing apparatus, normal inflationary adjustments, and several budget additions. Budget additions include seven additional technical staff for maintenance of the regional fire dispatch system. These positions will be funded by participating cities. Also included are 10 emergency dispatchers to improve response times; staff and matching funds for grants for Fire Crisis Response Units; staff to improve fire inspection of licensed facilities; a fire 2 0 2003-04 Fiscal Year h od of on a ry m et a re vo lu ti g in ot il e p ed by th bl e fo r is re sp on si C R . D ev el op and m en t te a m ss io n , or C p re ss io n s rt re m a p co ep m t D co es e t ch es s ch ze s si T h is F ir a ou h u p n n iq u e em n a s co n ti e n ew te ch C P R kn ow th in g. ri zo n a , th A ou th br ea of m ty osi -t th ou U n iv er m r fo s th e n ee d el im in a te 94 captain to enhance hiring of women and minorities, and funding for a firefighter competitive starting salary adjustment. Four additional fire prevention staff are added to assist in review of new construction plans for fire protection systems and emergency access plans. These positions are funded with Development Services funds. The budget also converts six temporary positions to regular status to address a critical need to provide quality training, classroom instruction and supervision of a large number of probationary firefighters. These positions are funded by the Public Safety Enhancement Fund. Finally, the budget reflects eight additional positions to provide four paid leave days annually for firefighters, fire engineers and fire captains as part of the second year of a two-year labor agreement. In total, the 2007-08 budget adds nine sworn and 23 civilian positions to the Fire Department. Fire — Percentage of Time First Unit Arrives on Scene in Four Minutes or Less 40% 32.2 31.3 29.3 30% 26.5 24.7 2006-07 2007-08 20% 10% 0% 2003-04 2005-06 2004-05 Fiscal Year Fire Department Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $217,931,000 $244,897,000 $273,282,000 1,886.2 2,008.2 2,040.2 Source of Funds: General $194,211,000 $215,815,000 $244,403,000 Public Safety Enhancement 6,152,000 8,545,000 10,985,000 Fire Neighborhood Protection 6,735,000 8,470,000 8,350,000 Development Services 2,422,000 2,010,000 2,638,000 Grants 6,064,000 6,512,000 3,351,000 147,000 103,000 92,000 2,200,000 3,442,000 3,463,000 Other Restricted City Improvement Percent of fire and emergency medical call responses within four minutes 2006-07* 2007-08 29.3% 26.5% 24.7% Patient transports to Valley hospitals via emergency medical vehicles 57,377 58,000 58,500 Percentage of time Advanced Life Support (ALS) medical calls are responded to with paramedic units within five minutes 46.6% 43.8% 44.0% Number of fire investigations to determine cause only 839 930 1,260 129,208 16,872 136,000 16,200 139,000 17,100 6,957 5,500 6,500 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 Emergency Management Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: Program Goal The Emergency Management Program provides the city with the capability to plan for, mitigate, respond to and recover from large-scale community emergencies and disasters as a result of man-made, technological or natural hazards. 2005-06 Customer satisfaction with homeland security efforts and security related communications Budget Allowance Explanation *Based on 10 months actual experience. The Emergency Management 2007-08 operating budget allowance of $839,000 is $31,000 or 3.8 percent more than 2006-07 estimated expenditures. The increase reflects normal inflationary increases and is partially offset by a reduction in grant funding. Expenditure and Position Summary Operating Expense Total Positions 2005-06 2006-07 2007-08 $807,000 $808,000 $839,000 6.5 6.5 6.5 Source of Funds: General 96 $437,000 $302,000 $375,000 Public Safety Enhancement 257,000 364,000 386,000 Grants 113,000 142,000 78,000 9 2006-07* 9 2007-08 9 FAMILY ADVOCACY CENTER Program Goal 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 The Family Advocacy Center operating budget allowance of $1,003,000 is $151,000 or 17.7 percent more than 2006-07 estimated expenditures. The increase reflects normal inflationary increases and one casework services coordinator to ensure continued compliance with regulatory requirements. Family Advocacy Center Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2006-07* 2007-08 Phone calls received 4,620 3,076 3,200 Victim contacts 7,260 5,798 6,000 Services provided** 3,276 4,190 4,300 Presentation participants 1,953 2,198 2,300 *Based on 10 months actual experience. **Includes shelter placements, orders of protection, financial assistance, counseling services and medical examinations. Expenditure and Position Summary 2005-06 Operating Expense Total Positions $1,073,000 2006-07 2007-08 $852,000 $1,003,000 7.0 7.0 8.0 $1,014,000 $788,000 $940,000 59,000 64,000 63,000 Source of Funds: General Other Restricted T h e F a m il y A d vo ca cy C en te r p ro of se rv ic es vi d es vi ct im w it h ou t h a vi n g to tr s th e op p or en vi ro n m a ve l to m u tu n it y to ob en t w h er e lt ip le lo ca m ed ic a l ex ta in a va ri p ri va te se ti on s, in cl a m s fo r ev et y tt in g. u d in g a co id en ce co ll m fo rt in g ec ti on a re co n d u ct ed in a 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 2.7% of the Total Budget. Municipal Court Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2006-07* 2007-08 72,278 78,000 78,000 277,903 260,550 270,000 32.7 33 33 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 8.0 minutes 8.0 minutes 8.0 minutes *Based on 10 months actual experience. Budget Allowance Explanation The Municipal Court 2007-08 operating budget allowance of $43,049,000 is $4,067,000 or 10.4 percent more than 2006-07 estimated expenditures. The increase is due to the restoration of a courtroom reduced in a previous budget year and normal inflationary increases. Staffing for the courtroom includes a court clerk, bailiff and pro-tem judge. The courtroom is dedicated to complex property maintenance cases and other city code violations. In addition, a major computer enhancement to the Court Management System and a position to 99 enhance the coordination of information technology-related improvements are funded by the Court Technology Enhancement Fund. Days Municipal Court - Average Days from Arraignment to Adjudication (criminal cases) 100 75 Expenditure and Position Summary 2005-06 2006-07 76 71 75 75 75 2007-08 50 Operating Expense Total Positions $36,053,000 $39,982,000 $43,049,000 384.9 384.9 388.9 25 Source of Funds: General Grants Other Restricted City Improvement $29,505,000 $32,085,000 $34,537,000 17,000 — — 727,000 1,091,000 2,709,000 5,804,000 5,806,000 5,803,000 0 2003-04 2004-05 2005-06 2006-07 Fiscal Year ic e in et W iF i se rv l a fr ee In te rn g ip n ic ri n u fe M of P h oe n ix rt be ga n bb y of th e lo n ic ip a l C ou u r M oo e fl t th , 20 07 th e fi rs In M a rc h oo m a n d in ss em bl y R th e Ju ry A C ou rt . 100 2007-08 PUBLIC DEFENDER Public Defender Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: The Public Defender Program provides legal representation for indigent defendants in Phoenix Municipal Court. Budget Allowance Explanation The 2007-08 operating budget allowance for the Public Defender Program of $4,753,000 is $367,000 or 8.4 percent more than the 2006-07 estimated expenditures. This increase is primarily due to normal inflationary adjustments and a full year’s cost of the forensic technology expert position filled during the current year. 2005-06 2006-07* 2007-08 Defendants charged with misdemeanor crimes represented in Phoenix Municipal Court 12,819 11,064 11,000 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) 22,687 24,574 21,000 *Based on 10 months actual experience. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $3,975,000 $4,386,000 $4,753,000 9.0 9.0 9.0 Source of Funds: General $3,975,000 $4,386,000 $4,753,000 101 y H a rb or P h oe n ix Sk . im p a ct 102 om ic d a il y ec on $7 2 m il li on a s a h t a l A ir p or In te rn a ti on Transportation The Transportation Program Represents 19.4% of the Total Budget. Street Transportation Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2006-07* 2007-08 191,000 192,000 190,000 Miles of streets per street maintenance field employee 15.3 15.5 15.6 Percent of scheduled requests for street maintenance service completed within target** 83% 72% 80% Percent of major/collector street miles with satisfactory rideability 98% 98% 98% 8,000 8,500 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 220 210 200 Miles of major streets constructed**** 11.0 5.4 5.8 Customer satisfaction on mid-block streetlight requests 96% 97% 95% Street miles swept The Transportation program budget includes the Street Transportation Department, the Aviation Department and Public Transit. 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 2007-08 operating budget allowance of $68,811,000 is $3,462,000 or 5.3 percent more than 2006-07 estimated expenditures. This increase is primarily due to budget additions, normal inflationary adjustments and the carry-forward of unspent 2006-07 funds for a pavement management system. Budget additions include funding for a wash maintenance program to clear overgrown vegetation in city washes. Continued restoration of General Fund support to the department also is included. Restoring these General funds will free up gas tax funds for street construction and major maintenance. Requests for services completed by the Operations Division*** *Based on 10 months actual experience. **The decrease in 2006-07 is due to high number of vacancies and difficulty in filling key positions. ***2005-06 thru 2006-07 experienced an unusually high number of turnovers. 2007-08 figure is expected to improve once training of new staff is completed. ****Decreases since 2005-06 are due to significant increases in material costs. 103 The budget also converts several contracted services to regular positions. Contract technology positions will be converted to full-time regular positions for the support of a department-wide GIS initiative. Contractual administrative support will be converted to regular positions to address the increased workload in utility inspection requests and improve efficiency in planning work assignments. Finally, contracted safety services are converted to a regular position to conduct critical safety training, evaluate hazards, and implement safety standards for the department. Costs for these conversions are offset by a reduction in contract services. Expenditure and Position Summary 2005-06 Operating Expense 2006-07 $58,557,000 $65,349,000 $68,811,000 Total Positions 776.7 781.0 General $19,951,000 $26,610,000 $31,029,000 Arizona Highway User Revenue 38,134,000 38,239,000 37,282,000 City Improvement 399,000 398,000 400,000 Federal and State Grant 11,000 39,000 33,000 Other Restricted 62,000 63,000 67,000 (includes total miles of sealcoat and asphalt overlay) 300 250 224 186 200 143 150 116 132 100 0 2003-04 2004-05* 2005-06** 2006-07** 2007-08*** 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. ***Increase in 2007-08 due to additional capital improvement funds. 104 787.0 Source of Funds: Street Transportation – Miles Resurfaced and Sealed Number of miles 2007-08 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 44.0 44 41.7 42 Budget Allowance Explanation 40 The Aviation operating budget allowance of $202,962,000 is $7,390,000 or 3.8 percent more than 2006-07 estimated expenditures. This increase is largely due to full year’s costs for the new in-line explosive detection system and normal inflationary increases. 38 43.0 40.5 38.2 36 34 32 30 2003-04 2004-05 2005-06 2006-07 2007-08 Fiscal Year M or e th a n 41 m il li on p a ss en ge rs A ir p or t in tr a ve le d th 20 06 . ro u gh Sk y H a rb or In te rn a ti on a l 105 The 2007-08 budget also adds one police sergeant to assist with TSA-mandated security, converts a temporary assistant aviation director to regular status, and includes funding to enhance the departments sustainability efforts. Sky Harbor passengers arriving and departing Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 Aviation Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2007-08 $165,636,000 $195,572,000 $202,962,000 803.7 853.7 853.7 2006-07* 2007-08 41.7 million 43.0 million 44.0 million Airline rental rates (cost per square foot): Terminal 2 Terminal 3 Terminal 4 $50.76 $56.76 $62.28 $52.56 $56.16 $63.72 $53.88 $57.96 $66.72 Gross sales per departing passenger: Terminal 2 Terminal 3 Terminal 4 $6.48 $10.37 $6.96 $5.68 $10.17 $7.59 $5.79 $10.28 $7.87 Aircraft takeoffs and landings (Sky Harbor Airport only) 544,854 545,000 547,000 Total international passengers 1,801,602 1,805,000 1,809,000 322,842 325,000 330,000 Source of Funds: Aviation $165,636,000 $195,572,000 $202,962,000 Air cargo processed (in tons) *Based on 10 months actual experience. 106 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. Budget Allowance Explanation The Public Transit operating budget allowance of $213,275,000 is $28,736,000 or 15.6 percent more than 2006-07 estimated expenditures. This increase is primarily due to full-year costs of service added in 2006-07, service enhancements and normal inflationary increases. The budget also includes the carry-forward of unspent 2006-07 funds for the development of bus stop and facility maintenance software systems. The budget provides funds to implement Route 154 on Greenway Road from 59th Avenue to Scottsdale Road and Route 32 on 32nd Street from Washington Street to Union Hills Drive. In addition, the budget includes funds for five new neighborhood circulator routes and an extension of the Ahwatukee neighborhood circulator. The budget also includes funds to increase weekend and holiday frequency from 60 minutes to 30 minutes on Route 24 (24th Street/Glendale Avenue), extend Route 24 from 67th Avenue to Litchfield Thousands 200 150 139 149 153 155 157 2005-06 2006-07 2007-08 100 50 0 2003-04 2004-05 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 a d d ev en d ow n to a ft er n oo n m or e tr ip s. T h e 20 07 w n P h oe n ix M on d a s to th is ve y -0 8 bu d ge t ry p op u la in cl u d es fu r tr a n si t se n d s to rv ic e. 107 Road, extend weekday service on Route 50 (Camelback Road) from 44th to 64th streets, extend weekday service on Route 106 (Peoria/Shea Boulevard) from Tatum Boulevard to 64th Street, extend weekday afternoon peak hours on the Blue Line, Route 7 (Seventh Street), and Route 12 (12th Street), increase Sunday frequency from 60 minutes to 30 minutes on Routes 8 (Seventh Avenue), 27 (27th Avenue), and 156 (Chandler Boulevard), extend Route 17 (McDowell Road) from 75th Avenue to the city limits at about the Loop 101, and extend weekday service to midnight on Routes 8, 24, 43 (43rd Avenue), 61 (Southern Avenue), and 106. Also, the budget funds an increase in the Dialysis Taxi Subsidy Program, an increase in Diala-Ride service hours (weekday and weekend/holiday), and additional RAPID trips. The budget provides a police sergeant, eight police officers, and other staffing resources to provide security on the bus system, at park-and-ride facilities, and at transit centers that sell fare media. Positions will be assigned to the Public Transit Safety Bureau of the Police Department. Also added are staff and resources to provide fare media and revenue processing formerly performed by contract providers, increase administrative support to accommodate the growth of the department, implement an environmental management system, and improve passenger communication. In addition, staff and other resources are added to operate and maintain the new West Maintenance facility. Positions will be assigned to the Public Transit Safety Bureau of the Police Department and the Public Works Department. The budget also includes funds to improve warranty administration for transit vehicles formerly performed by contract providers. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2007-08 $158,457,000 $184,539,000 $213,275,000 92.0 99.0 127.0 Source of Funds: General $25,146,000 $26,146,000 $27,146,000 Transit 2000 84,518,000 95,371,000 119,348,000 City Improvement 27,353,000 38,126,000 39,995,000 Local Transportation Assistance 6,928,000 6,860,000 6,777,000 Other Agency 8,958,000 12,421,000 15,061,000 FTA Grant 5,533,000 5,615,000 4,948,000 21,000 — — Federal & State Grants ve le d th e ty bu s tr a rm of a ci fo - A rm ed e s th y a in id A m er ic a s a n d h ol to ce n te a u rv ib se tr e tr io ti c ob . e, a n d bl u te fo u r p a d en ce D a y A re d , w h it to ce le br a d In d ep en ix n n a y oe a h P D g st re et s of l D a y, F la y, M em or ia F or ce s D a 108 2006-07 Public Transit Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Cost recovery from fares 2006-07* 2007-08 21.8% 20.2% 19.7% $26,431 $26,856 $30,948 On-time performance for bus service 89% 88% 89% On-time performance for Dial-a-Ride prescheduled service 94% 91% 91% On-time performance for Dial-a-Ride on-demand service 61% 55% 55% Average weekday ridership for bus service 152,502 154,790 157,112 Average weekday ridership for Dial-a-Ride service 1,308 1,330 1,354 Passengers per revenue mile for bus service 2.54 2.44 2.48 Passengers per revenue mile for Dial-a-Ride service 0.10 0.10 0.10 Operating revenue (thousands) *Based on 10 months actual experience. Operating revenue is increasing due to significant service additions. On-time performance for Dial-a-Ride is expected to decline due to increasing demand. 109 nd p p ro ve d a la n s a re a p nd er a ft s a n s ro ve d p la ro je ct si te a tc h es a p p to rs vi si t p m ec n sp io in ct es th e co n st ru en t Se rv ic to en su re D ev el op m h a s be gu n s. n ce io n ct a ru co n st n d or d in a ll co d es a a d h er es to 110 Community Development The Community Development Program Represents 9.1% 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 2007-08 budget allowance: 2005-06 2006-07* 2007-08 46,442 43,448 44,200 Single-family permits issued 9,852 7,120 7,200 Multi-family units permitted 3,197 3,500 3,800 Commercial square footage permitted 26.0 million 24.0 million 24.0 million Building permit valuation $4.5 billion $4.8 billion $5.0 billion 346,409 316,460 345,600 93% 96% 94% 94% 94% 95% 12,069 8,500 8,600 133,259 121,300 122,000 15 minutes 13 minutes 10 minutes Total construction permits issued 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. 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 Budget Allowance Explanation The Development Services operating budget allowance of $61,186,000 is $7,081,000 or 13.1 percent more than 2006-07 estimated expenditures. This increase results primarily from budget additions, the full-year’s cost for mid-year additions and normal inflationary increases. Mid-year budget additions in 2006-07 included increased staff for inspections to address the demands by the community for development services and implementation of the new Office of *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. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $47,865,000 $54,105,000 $61,186,000 523.0 570.0 576.0 Source of Funds: Development Services Other Restricted $47,537,000 $53,533,000 $60,544,000 328,000 572,000 642,000 111 Customer Advocacy to provide case management and development assistance to business customers. The 2007-08 budget includes additional staff to improve customer service and reduce wait times in the Development Center. Also included is additional staff to improve administrative support as recommended by an organizational analysis. The budget also converts two temporary positions to regular status to improve recruitment capabilities and coordination of activities related to the light rail project. Development Services – Value of Permits Issued Billions $4.5 $5 $4.8 $5.0 2006-07 2007-08 $4.2 $4 $3.2 $3 $2 $1 $0 2003-04 2004-05 2005-06 Fiscal Year PLANNING Planning Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: The Planning Department coordinates the orderly growth of the city and creates a quality living environment through effective comprehensive planning. Budget Allowance Explanation The Planning Department’s 2007-08 budget allowance of $8,290,000 is $756,000 or 10.0 percent more than 2006-07 estimated expenditures. The budget includes the addition of a principal planner to provide assistance with current workloads and facilitate community meetings related to the revitalization of west Phoenix and normal inflationary increases. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $7,144,000 $7,534,000 $8,290,000 74.9 75.9 76.9 Source of Funds: General $6,291,000 $6,780,000 $7,503,000 Community Development Block Grant 63,000 Other Restricted 112 790,000 65,000 67,000 689,000 720,000 2005-06 Village planning committees supported 2006-07* 2007-08 15 15 15 Zoning adjustment hearing officer cases scheduled within 30 working days of request 41% 93% 90% Formal rezoning pre-application meetings scheduled within 20 working days of request 54% 100% 90% Annual cycle General Plan amendments completed by target date** 84% N/A N/A General Plan Amendments referred to City Council and upheld by City Council** 71% 100% 80% Zoning verification letters completed within 15 working days 53% 74% 70% Zoning case recommendations by staff upheld on appeal to the City Council 96% 93% 95% Zoning adjustment hearing officer actions upheld on appeal to the Board of Adjustment 81% 80% 80% *Based on ten months actual experience. **“Annual cycle General Plan amendments completed by target date” performance measure was replaced by the “General Plan Amendment recommendations by staff upheld by City Council” measure. Reporting period of August 2005 – March 2006. The reporting period was changed to full-year reporting effective January 2006. Customer Advocacy to provide case management and development assistance to business customers. The 2007-08 budget includes additional staff to improve customer service and reduce wait times in the Development Center. Also included is additional staff to improve administrative support as recommended by an organizational analysis. The budget also converts two temporary positions to regular status to improve recruitment capabilities and coordination of activities related to the light rail project. Development Services – Value of Permits Issued Billions $4.5 $5 $4.8 $5.0 2006-07 2007-08 $4.2 $4 $3.2 $3 $2 $1 $0 2003-04 2004-05 2005-06 Fiscal Year PLANNING Planning Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: The Planning Department coordinates the orderly growth of the city and creates a quality living environment through effective comprehensive planning. Budget Allowance Explanation The Planning Department’s 2007-08 budget allowance of $8,290,000 is $756,000 or 10.0 percent more than 2006-07 estimated expenditures. The budget includes the addition of a principal planner to provide assistance with current workloads and facilitate community meetings related to the revitalization of west Phoenix and normal inflationary increases. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $7,144,000 $7,534,000 $8,290,000 74.9 75.9 76.9 Source of Funds: General $6,291,000 $6,780,000 $7,503,000 Community Development Block Grant 63,000 Other Restricted 112 790,000 65,000 67,000 689,000 720,000 2005-06 Village planning committees supported 2006-07* 2007-08 15 15 15 Zoning adjustment hearing officer cases scheduled within 30 working days of request 41% 93% 90% Formal rezoning pre-application meetings scheduled within 20 working days of request 54% 100% 90% Annual cycle General Plan amendments completed by target date** 84% N/A N/A General Plan Amendments referred to City Council and upheld by City Council** 71% 100% 80% Zoning verification letters completed within 15 working days 53% 74% 70% Zoning case recommendations by staff upheld on appeal to the City Council 96% 93% 95% Zoning adjustment hearing officer actions upheld on appeal to the Board of Adjustment 81% 80% 80% *Based on ten months actual experience. **“Annual cycle General Plan amendments completed by target date” performance measure was replaced by the “General Plan Amendment recommendations by staff upheld by City Council” measure. Reporting period of August 2005 – March 2006. The reporting period was changed to full-year reporting effective January 2006. BUSINESS CUSTOMER SERVICE CENTER Business Customer Service Center Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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 2005-06 Infill housing permits issued 2006-07* 2007-08 157 90 120 Infill Program - average fee waiver granted $958 $1,200 $1,200 Infill customers served 2,203 1,320 1,500 Business customers served 1,188 1,852 2,000 Customers receiving regulatory assistance 8,767 8,900 9,200 *Based on 10 months actual experience. The Business Customer Service Center operating budget allowance of $709,000 is $71,000 or 11.1 percent more than 2006-07 estimated expenditures. This reflects an increase in fee waivers due to plans to increase visibility for the program. Expenditure and Position Summary Operating Expense Total Positions 2005-06 2006-07 2007-08 $503,000 $638,000 $709,000 4.0 4.0 4.0 Source of Funds: General $329,000 $338,000 $349,000 Water 87,000 150,000 180,000 Wastewater 87,000 150,000 180,000 113 HOUSING Budget Allowance Explanation Program Goal The 2007-08 Housing Department operating budget allowance of $80,304,000 is $20,946,000 or 35.3 percent more than 2006-07 estimated expenditures. The increase primarily reflects normal inflationary increases and the carry over of HOME Investment program funds, Community Development Block Grant (CDBG) funds and other grant funds. Finally the 2007-08 budget includes a refund of in lieu property taxes allowing the funds to be directed to public housing needs. This refund does not affect Housing Department expenditures. Instead it is reflected as a reduction in General Fund resources. 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 2005-06 Operating Expense Total Positions Source of Funds: Public Housing Other Restricted HOME Grant Community Development Block Grant General City Improvement 2006-07 2007-08 $60,390,000 $59,358,000 $80,304,000 145.7 148.7 148.7 $54,655,000 $52,515,000 $66,564,000 787,000 604,000 5,045,000 2,479,000 5,186,000 4,956,000 2,214,000 183,000 72,000 801,000 181,000 71,000 3,479,000 189,000 71,000 Housing Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2007-08 Affordable housing units for families and individuals 1,359 1,382 1,382 Rental assistance provided for low-income residents in the private housing market 5,320 5,320 5,470 City-owned and operated public housing units for families and seniors 2,335 2,435 2,466 Percent of Section 8 vouchers under lease 94% 90% 95% Occupancy rate for public housing units 96% 90% 98.0% *Based on 10 months actual experience. 114 2006-07* 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 (CED) operating budget allowance of $20,120,000 is $141,000 or 0.7 percent lower than 2006-07 estimated expenditures. This decrease is due to reductions in Community Development Block Grants and other grant funds. General Funds for CED are increased 15 percent and reflect the addition of a secretary to assist the Phoenix Film Office and normal inflationary adjustments. Expenditure and Position Summary 2006-07 2005-06 Operating Expense Total Positions 2007-08 $19,594,000 $20,261,000 $20,120,000 114.0 115.0 116.0 $2,764,000 $3,395,000 $3,903,000 Source of Funds: General Community Development Block Grant City Improvement Sports Facilities 877,000 1,272,000 483,000 2,578,000 2,536,000 2,542,000 40,000 40,000 40,000 Aviation 244,000 69,000 68,000 Water 518,000 532,000 555,000 Convention Center 133,000 134,000 136,000 4,108,000 11,899,000 12,045,000 Federal & State Grant Trust Community Reinvestment 73,000 81,000 80,000 Other Restricted 23,000 240,000 268,000 8,236,000 63,000 — HSD Grant Community and Economic Development Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Projected jobs created/retained within the city of Phoenix as a result of department efforts 2006-07* 2007-08 6,342 2,850 3,500 Loan applications approved for the Expand Collateral Loan Assistance Program 6 7 10 Loans approved for the New Markets Tax Credit Loan Program 7 10 n/a** Estimated sales tax generated from projects $51,004,095 $47,376,000 $48,797,000 Projected average annual salary for new jobs with companies newly located in Phoenix $39,900 $44,500 $46,500 1,870 929 1,900 929 1,710 1,150 Individuals serviced in employment and training programs Adult Youth *Based on 10 months actual experience. **New allocations for this program have been requested and may not be awarded until early FY 2007-08. 115 DOWNTOWN DEVELOPMENT OFFICE Budget Allowance Explanation Program Goal The Downtown Development Office operating budget allowance of $4,643,000 is $460,000 or 11 percent more than 2006-07 estimated expenditures and reflects 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 The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Estimated construction value of projects (in millions)** Number of residential units created Projected jobs created downtown as a result of department efforts 2006-07* 2007-08 31 34 40 $1,503,900 $2,250,000 $2,577,600 91 265 175 424 645 195 *Based on 10 months actual experience. **Projections for value of construction and job creation are determined based on information provided by private development partners. Projected 2007-08 job creation is associated with the biomedical field due to the completion of the Arizona Biomedical Collaborative I. 2007-08 projected residential units are the result of the completion of Phase I of the Portland Place project and additional smaller residential projects. 116 Operating Expense Total Positions 2006-07 2007-08 $3,767,000 $4,183,000 $4,643,000 16.0 16.0 16.0 Source of Funds: General Downtown Development Major Performance Measures and Service Levels Number of development/redevelopment projects in process 2005-06 $3,244,000 $3,660,000 $4,101,000 Sports Facilities 106,000 106,000 110,000 Convention Center 417,000 417,000 432,000 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 (all funds) of $51,365,000 is $19,575,000 or 61.6 percent more than 2006-07 estimated expenditures. This increase primarily reflects the effect of the carry-forward of unspent grant allocations in 2006 07. The General Fund budget of $17,431,000 is $2,879,000 or 19.8 percent more than the 2006-07 estimated expenditures. The General Fund increase Calendar Days 100 75 64 61 60 60 2005-06 2006-07 2007-08 53 50 25 0 2003-04 2004-05 Fiscal Year T h e N ei gh bo rh oo d Se rv ic es D ep p ro gr a m , a rt m en t w “P h oe n ix : a s th e fi rs Wor ki n g fo of th e d ep t to be fe a r Yo u .” T h a rt m en t a tu re d on th e li ve ca ll n d ca ll er s re ce gr a ff it i, bl e P H X 11 -i n sh ow of ig h te d p ro iv ed a n sw fe re d a n ov p er ti es , la er s to th ei is su es . er vi ew n d lo rd /t en r qu es ti on s p er ta in in a n t co n ce rn s a n d ot h er n ei gh bo g to rh oo d 117 reflects budget additions, the effect of the carry-forward of unspent but committed 2006-07 Fight Back funds and normal inflationary adjustments. The budget provides enhancements to the Graffiti Busters program through the addition of two new graffiti crews and funds for enforcement activities. The budget also restores an area supervisor eliminated as a prior year’s budget reduction and adds a project manager for the west Phoenix revitalization project. Additional technology staff also is included to develop system enhancements to improve customer service and case management capabilities. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $30,138,000 $31,790,000 $51,365,000 237.0 235.0 241.0 Source of Funds: General Community Development Block Grant 12,120,000 11,009,000 28,796,000 Federal and State Grants 1,741,000 2,230,000 2,740,000 HOME Program Grant 2,567,000 3,542,000 2,035,000 141,000 155,000 60,000 — 302,000 303,000 Other Restricted City Improvement Funds 118 $13,569,000 $14,552,000 $17,431,000 Neighborhood Services Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Residents who receive landlord/tenant counseling 2006-07* 2007-08 6,082 6,500 6,500 967 900 900 $35,545,771 $22,937,654 $20,040,410 48,552 60,000 70,000 Homeowner-occupied housing rehabilitation projects completed 540 300 350 Percent of neighborhood preservation cases resolved voluntarily 87% 85% 85% Neighborhood preservation average response time from first call to initial inspection for occupied/non-hazard cases (in calendar days) 11 10 10 Neighborhood preservation average response time from first call to initial inspection for vacant/non-hazard/other non-pre-notification cases (in calendar days) 6 5 5 Properties acquired/demolished/redeveloped for neighborhood revitalization purposes 182 150 180 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. HOPE VI PROJECT Budget Allowance Explanation Program Goal The Hope VI Project 2007-08 gross operating budget allowance of $928,000 is $126,000 or 12.0 percent less than 2006-07 estimated expenditures. This decrease reflects the elimination of an accountant position and the transfer of another accountant position to the Finance Department. The budget also provides $500,000 in General funds needed to complete the program by December 2008. These funds will be used to provide staff and administrative costs associated with the project. 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 2005-06 Operating Expense Total Positions 2006-07 2007-08 $897,000 $1,054,000 $928,000 10.5 11.5 9.5 $897,000 $1,054,000 $928,000 Source of Funds: General (Gross*) *Gross costs are charged to the Hope VI federal grant and Conventional Housing funds. H O P E V I is a fe d er a l, gr a n t- fu n se ve re ly d d ed p ro gr is tr es se d p a m cr ea te u bl ic h ou si lo ca te d be d to re bu il n g. T h e n ew tw ee n Se ve d ol d a n d , d iv er se a n th a n d 15 /o r n d vi br a n th a ve n u es t co m m u n a n d G ra n it y is t a n d P im a st re et s. 119 nd ix P a rk s a T h e P h oe n . ty ci t th e th ro u gh ou 120 20 0 p a rk s m or e th a n t op er a te s en m rt a D ep R ec re a ti on Community Enrichment The Community Enrichment Program Represents 11.8% 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 2007-08 Parks and Recreation budget allowance of $124,479,000 is $11,896,000 or 10.6 percent more than 2006-07 estimated expenditures. This increase is due to full-year’s operating costs for facilities opened in 2006-07, operating costs for new or expanded facilities opening in 2007-08, some restorations of prior year budget Summer Recreation and After-School Programs _ Number of Participants Millions 8 cuts, some service additions, and normal inflationary adjustments. The budget provides for additional staff and operating costs to open and maintain new or improved park facilities ($2,667,000) constructed with Parks and Preserve Initiative funds, impact fees and other funds. These facilities include the Enchanted Island at Encanto Park, a park at 71st Avenue and Elwood Street, the Reach 11 Field of Dreams baseball complex, and new amenities at the Rio Salado Habitat. The budget also provides staff and other operating costs for maintenance and security of newly acquired undeveloped mountain preserves and undeveloped flatland parks, maintenance of new trails in the Sonoran Preserves, and maintenance of street landscaping of new streets citywide. The budget also restores some services that were cut in prior years and expands 7.1 7.2 2003-04 2004-05 7.2 7.2 7.2 2005-06 2006-07 2007-08 6 4 2 0 Fiscal Year 121 other services. Park maintenance staff and supporting costs are partially restored. Also, funding for summer swimming pool hours will be partially restored by keeping all pools open on weekends beginning in August and continuing through Labor Day. In addition, the budget restores street landscape maintenance crews, adds a crew for west Phoenix and begins to restore community center hours. Finally, the budget provides funds to enhance the city’s after-school program and to begin capital improvements at Cementerio Lindo located at 15th Avenue and Durango Street. The budget also adds a position to coordinate and conduct the archeological reviews of city projects. Costs for this position will be charged to capital projects. Also included in the budget is the conversion of a part-time position to full-time at the Pecos Community Center to improve customer service, and the conversion of two part-time positions to one regular position to provide year-round maintenance at the Municipal Stadium. Costs for these positions will be offset by various line item reductions. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $100,194,000 $112,583,000 $124,479,000 1,530.4 1,613.9 1,692.6 Source of Funds: General $94,111,000 $104,172,000 $116,033,000 Other Restricted 2,956,000 3,603,000 3,531,000 City Improvement 1,494,000 1,897,000 1,937,000 Federal and State Grants 1,012,000 2,209,000 2,192,000 Convention Center 378,000 420,000 490,000 Parks and Preserves 161,000 172,000 186,000 82,000 110,000 110,000 Golf Parks and Recreation Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2006-07* 2007-08 Acres maintained:** Developed parks Undeveloped park land Parkways and medians Preserves/desert parks 4,395 3,946 885 29,376 4,506 4,036 896 32,625 4,634 4,036 1,015 33,522 Cost per acre for annual maintenance: Developed parks Undeveloped park land Preserves/desert parks $7,436 $2,016 $206 $6,919 $1,893 $196 $7,733 $2,189 $227 2.83 3.01 3.00 Number of volunteer hours 148,000 150,000 150,000 At-Risk-Youth participants 214,000 210,000 210,000 Aquatic participants 894,000 800,000 860,000 30,758,000 30,000,000 31,000,000 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. Budget Allowance Explanation The Library 2007-08 budget allowance of $40,606,000 is $4,338,000 or 12.0 percent more than 2006-07 estimated expenditures. The increase is due to budget restorations, new capital facility operating costs and Items Circulated 12 9.9 10 8.3 8.4 2003-04 2004-05 10.0 8.9 8 6 4 2 0 2005-06 2006-07 2007-08 Fiscal Year M or e th a n 4. 8 m il li on vi si to rs w in 20 06 -0 7. er e se rv ed by th e P h oe n ix P u bl ic L ib ra ry 123 normal inflationary increases. The budget also includes the carry-forward of 2006-07 technology funds to better coordinate with a planned bond-funded project. The budget includes start-up staff costs for the new Agave regional library scheduled to open in July 2008. The budget also begins to restore library services by opening libraries one hour earlier at 9 a.m. rather than 10 a.m., Monday through Saturday. Also included in the budget is the conversion of a part-time technology specialist to full time to manage the complex technology environment in the Library system. Library Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Number of library visitors served 2005-06 Operating Expense Total Positions 2006-07 4,803,131 5,010,131 Number of electronic visits 13,204,342 16,198,171 17,494,025 Annual budget for purchase of library materials $5,883,618 $6,343,330 $6,624,497 Cost per library visitor served $7.63 $7.55 $8.10 2,479,273 10,512,327 2,669,010 12,567,292 2,709,045 13,017,292 $2.56 $2.38 $2.58 Circulation per library visit 2.98 3.17 3.14 Collection turnover rate 6.62 7.73 7.82 67.9% 59.0% 68.0% 1,963,228 1,970,827 2,011,627 110,163 99,494 101,484 Annual circulation per capita 8.78 10.06 10.14 Number of hours open for public service per week 924 957 1080 Number of items circulated: Central 13 Branches Library card registration as a percentage of population 2007-08 $33,211,000 $36,268,000 $40,606,000 420.0 436.5 474.0 Source of Funds: General 124 $32,801,000 $35,640,000 $39,267,000 Federal and State Grants 221,000 375,000 385,000 Other Restricted 189,000 253,000 954,000 2007-08 4,352,667 Cost per item circulated Expenditure and Position Summary 2006-07 * Number of books in stock Number of telephone reference requests answered *Based on 10 months actual experience. GOLF City Golf Courses _ Rounds of Golf Played Program Goal The Golf Program provides quality golf services 365 days a year to residents and visitors. Thousands 600 500 Budget Allowance Explanation 400 The Golf 2007-08 operating budget allowance of $8,981,000 is $1,078,000 or 13.6 percent more than 2006-07 estimated expenditures. This is due to increases in commodities due to over-seeding of the golf courses, bringing the operation of all golf pro shops in-house during the current year and the replacement of a large piece of capital equipment necessary to maintain large fairways. 347 326 326 326 330 2004-05 2005-06 2006-07 2007-08 300 200 100 0 2003-04 Fiscal Year Golf Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $6,423,000 $7,903,000 $8,981,000 140.0 140.0 Acres of golf courses maintained 2006-07* 2007-08 922 922 922 Annual cost of maintenance per acre $5,721 $5,721 $5,652 Cost per participant $26.09 $26.09 $21.25 140.0 Source of Funds: Golf 2005-06 $6,423,000 $7,903,000 $8,981,000 *Based on 10 months actual experience. 125 PHOENIX CONVENTION CENTER Program Goal The Phoenix Convention Center 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 $48,209,000 is $7,723,000 or 19.1 percent more than 2006-07 estimated expenditures. The increase is primarily the result of service enhancements, normal inflationary increases and increased costs for debt service. The budget provides for staff and contractual services to provide increased levels of customer service by expanding the Guest Experience Program, improving information technology services available to clients, and providing seamless accounts payable services to clients. Also included is staff and other resources to improve management of information technology assets in the newly opened West building, to increase maintenance of the West building, and to expand sales and event planning services to meet demand for expansion of the North building. Finally, staff is added to improve financial management of the Capital Improvement Program budget and maintain turn around times on purchasing requests. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2007-08 $34,356,000 $40,486,000 $48,209,000 209.4 213.4 229.9 Source of Funds: Convention Center $30,322,000 $36,285,000 $41,914,000 General 1,978,000 2,037,000 2,622,000 City Improvement 1,556,000 1,664,000 3,173,000 500,000 500,000 500,000 Sports Facilities re s d in g fe a tu s Wes t B u il r’ te en of C y ti on og ra p h ix C on ve n ri n g th e ge T h e P h oe n en ts ca p tu a n d st on e em ss el a l gl ra ot tu a rc h it ec a ti c, 14 0- fo m el em en t. ra n d ig a es h it gn a tu re d si A ri zo n a , w s g’ in d th e bu il a tr iu m a s 126 2006-07 Phoenix Convention Center Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2006-07* Estimated direct spending impact from conventions (millions)** $137.5 $138.4 $135.3 Number of convention delegates 94,785 90,000 85,200 Number of conventions** 40 51 49 Number of local public shows 49 35 32 Percent square feet occupancy (all events) 58% 52% 48% Number of theatrical performances 354 360 367 339,443 342,500 349,000 Total parking revenue (millions)** $6.2 $6.4 $6.3 Revenue per parking space $830 $895 $880 Operating expense per parking space $692 $742 $780 Total theater attendance 2007-08 *Based on 10 months actual experience. **Estimated direct spending impact is reported by the Greater Phoenix Convention and Visitors Bureau. Estimated direct spending impact and the number of conventions is decreasing in 2007-08 due to the lack of contiguous space. Bookings are expected to continue to decrease until expansion of the North building is complete. Total parking revenue and revenue per parking space is projected to slightly decrease in 2007-08 due to the effect of construction on garage usage. 127 HUMAN SERVICES Human Services _ Meals Served by Senior Nutrition Program Program Goal Thousands 750 622 600 613 588 653 602 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. 450 Budget Allowance Explanation 300 150 0 2003-04 2004-05 2005-06 2006-07 2007-08* Fiscal Year *Projection includes additional meals anticipated with a full year of operations at Shadow Mountain, Westside and Pecos senior centers. The Human Services operating budget allowance of $66,525,000 is $1,768,000 or 2.7 percent more than 2006-07 estimated expenditures. This increase is primarily due to the full year of operation of the Shadow Mountain, Westside and Pecos senior centers opened during 2006-07, budget additions and normal inflationary increases. These increases are partially offset by decreases in grant funds which y ea r. il d re n ea ch a n 3, 70 0 ch th e or m a m se rv es St a rt P ro gr T h e H ea d 128 reflect conservative projections for the 2007-08 budget. The budget includes funding to increase senior programming at the Paradise Valley and Devonshire senior centers and increased staffing for food services at five senior centers (Deer Valley, Desert West, McDowell Place, Paradise Valley and South Mountain). Costs associated with additional senior programming are largely offset by a reduction in other department positions vacant for some time. The budget also includes funding for summer operations at the Watkins Overflow Shelter and begins to restore funding for the Summer Youth Work Experience Program. Human Services Major Performance Measures and Service Levels Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $62,316,000 $64,757,000 $66,525,000 493.0 501.2 505.4 Source of Funds: General Human Services Grants $23,891,000 $26,181,000 $30,001,000 35,980,000 35,945,000 34,255,000 Community Development Block Grant 1,162,000 1,256,000 936,000 Federal and State Grant 230,000 324,000 384,000 City Improvement 266,000 457,000 457,000 Water 250,000 250,000 250,000 Transit 2000 156,000 156,000 156,000 Public Housing 101,000 34,000 — Other Restricted 280,000 154,000 86,000 The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2006-07* 2007-08 Number of children in Head Start 3,864 3,700 3,700 Number of students receiving school-based services 3,024 800 800 Community Services Division unduplicated households served 17,769 19,775 18,772 163,758 150,000 150,000 Average monthly downtown homeless population: Sheltered Unsheltered 639 86 784 94 784 94 Persons served at the Watkins shelter 4,723 2,583 3,758 Senior clients receiving daily meals 2,453 2,687 2,725 578 626 626 Small Business 81 75 75 Summer Youth 1,175 900 1,014 30 30 30 Number of community volunteer hours managed by Human Services staff Daily average number of Reserve-a-Ride passengers Youthbuild *Based on 10 months actual experience. Unduplicated households assisted by the Community Services Division is projected to decrease in 2007-08 due to a decrease in funding from the Department of Economic Security. The 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. Decrease in number of persons served at the winter shelter in 2006-07 is a result of program changes to serve only single women and families. Increases in persons served at the Watkins shelter is projected in 2007-08 as a result of additional funding in 2007-08 budget to address homelessness. 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. 2007-08 senior client levels reflect an entire year of operation at Devonshire, Westside and Shadow Mountain senior centers. The increase in summer youth activities is a result of 2007-08 program restoration which will fund an additional 114 summer youth jobs. Youthbuild projections reflect the difficulty in recruiting and retaining participants. 129 EDUCATION AND YOUTH PROGRAMS Education and Youth Programs Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: The Education and Youth Programs function facilitates communication, information and coordination between city departments and schools to better serve the youth of our community. Budget Allowance Explanation The Education and Youth Programs operating budget allowance of $1,160,000 is $85,000 or 7.9 percent more than 2006-07 estimated expenditures. The budget reflects normal inflationary increases. The budget also provides for the conversion of program related expenses to a part-time intern to develop content for the Youth Town Hall events. 2005-06 Number of subscribers to receive online principal’s letter, youth newsletter and KNOW99 schedule 2006-07* 2007-08 3,071 4,022 3,275 Number of public, private and charter schools in Phoenix the office maintains regarding school information (school profile, attendance boundary and location, and school contact information) 543 540 545 Number of participants in Phoenix Principal for a Day event 178 146 180 20 60 60 Number of KNOW99 productions *Based on 10 months actual experience. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $915,000 $1,075,000 $1,160,000 5.8 7.8 8.4 Source of Funds: General $716,000 $800,000 $866,000 Other Restricted 201,000 275,000 294,000 Federal and State Grants (2,000) — — INTERNATIONAL AND SISTER CITIES PROGRAMS Program Goal 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 International and Sister Cities Programs 2007-08 operating budget allowance of $690,000 is $84,000 or 13.9 percent more than 2006-07 estimated expenditures. This increase reflects the addition of an administrative aide and normal inflationary increases. The 130 administrative aide position will be used to improve customer service and enhance communication with committee members. The budget also converts two temporary support positions to regular positions. Expenditure and Position Summary Operating Expense Total Positions 2005-06 2006-07* 2007-08 $540,000 $606,000 $690,000 5.0 5.0 6.0 $540,000 $606,000 $690,000 Source of Funds: General International and Sister Cities Programs Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Customer satisfaction with events and activities Percentage of scheduled events completed *Based on 10 months actual experience. 9.1 100 2006-07* 9.1 100 2007-08 9.1 100 RIO SALADO Rio Salado Major Performance Measures and Service Levels Program Goal The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 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. 2006-07* 2005-06 Budget Allowance Explanation Federal funding for ecosystem restoration** $53 million $63 million $65 million Status of Rio Salado Oeste Feasibility Report (percent complete) 75% 90% 100% 10 9.0 10 Customer service (1-10 scale) The Rio Salado 2007-08 operating budget allowance of $163,000 is $9,000 or 5.8 percent more than the 2006-07 estimated expenditures. This increase reflects normal inflationary adjustments. 2007-08 *Based on 10 months actual experience. **Project to be completed by 2007-08. These performance measures relate to the Army Corps of Engineers federal funding and contracts. Expenditure and Position Summary Operating Expense Total Positions 2005-06 2006-07 2007-08 $144,000 $154,000 $163,000 1.0 1.0 1.0 $144,000 $154,000 $163,000 Source of Funds: General HISTORIC PRESERVATION OFFICE Program Goal 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. Budget Allowance Explanation The Historic Preservation Office operating budget allowance of $749,000 is $144,000 or 23.8 percent more than 2006-07 estimated expenditures. This increase is primarily due to budget additions, additional technology costs for system expansion and normal inflationary increases. Budget additions include a position to improve design review and customer service at the counter, and a position to manage the historic preservation bond program. Costs for the second position will be charged to historic preservation projects. Expenditure and Position Summary Operating Expense Total Positions 2005-06 2006-07 2007-08 $511,000 $605,000 $749,000 6.0 6.0 8.0 $511,000 $605,000 $749,000 Source of Funds: General Historic Preservation Office Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Number of design reviews performed on building permits in historic districts Number of city grants awarded for historic rehabilitation projects 2006-07* 2007-08 372 409 425 32 44 44 *Based on 10 months actual experience. 131 Budget Allowance Explanation 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. The Office of Arts and Culture operating budget allowance of $2,225,000 is $32,000 or 1.5 percent more than 2006-07 estimated expenditures. The increase is the result of the partial restoration of arts grants funding and normal inflationary increases. This is offset by a reduction in state grants. The budget also adds a position to coordinate projects for the percent-for-art program. Costs of the position will be charged to project funds. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2007-08 $2,312,000 $2,193,000 $2,225,000 12.5 12.5 13.5 Source of Funds: General $1,184,000 $1,216,000 $1,389,000 Local Transportation Assistance 106,000 106,000 106,000 Federal and State Grants 772,000 621,000 475,000 Other Restricted 250,000 250,000 255,000 ck e C a m el ba u a rd t a t th rq of A rt s a e M ic o ff O ri a n d R os a e P h oe n ix r a th eh gh B en t’ s u m to ro on D ep a rt a y 20 07 th et by R ob er a n sp or ta ti m p le te d M Tr M a gi c C a rp co et , ss re a St p U n d er n d th e P ro gr a m a P ed es tr ia n a n .. P u bl ic A rt im L a n te rm re T u lt by u C o d ot h an P s. d n u r A rt F P er ce n t fo 132 2006-07 Office of Arts and Culture Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance. 2005-06 2006-07* 2007-08 Grant applications processed to support arts activities through schools and nonprofit organizations 125 138 142 Grant awards administered to support arts activities through schools and nonprofit organizations 116 101 110 Percent-for-art projects to enhance city capital improvement projects with artwork 54 61 70 Local artists/arts organizations training workshops 14 16 16 Arts management consulting projects coordinated by Business Volunteers for the Arts 49 43 46 *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 B u lk tr a sh ea ch y ea r. es m ti r u cy cl in g tr a sh fo rb a ge or re ll ec ts bu lk la ce d in ga a rt m en t co p ep be D ot ks n or n W a t ca T h e P u bl ic a te ri a ls th on . a in ly of m st e co ll ec ti a w d li co n si st s m so y kl ee w r s fo co n ta in er 134 Environmental Services The Environmental Services Program Represents 16.4% of the Total Budget. The Environmental Services program budget includes Water Services, Solid Waste Management, Public Works and Environmental Programs. WATER SERVICES Program Goal 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. Budget Allowance Explanation The Water Services operating budget allowance of $265,089,000 is $28,030,000 or 11.8 percent more than 2006-07 estimated expenditures. The increase is primarily due to increases in prices for sludge hauling and odor control services, budget additions and normal inflationary increases. The budget also includes the carry forward of unspent 2006-07 funds for the payment of outstanding claims related to a water main break, various ADA upgrades and various telecommunications upgrades. Budget additions include staff and other resources to improve technical support for security systems, implementing a meter replacement program to replace 39,000 under-registering meters, and maintaining consistent treatment processes at treatment plants. Also included is funding for additional staff and equipment to create a rapid-response crew to perform emergency repairs, develop and implement a strategic communications plan, and maintain service levels at the Water Customer Services Call Center and Water Distribution Communications Water Services – Total Water Production Billions of Gallons 137.5 140 132.5 135 128.4 130 125 124.3 118.4 120 115 110 105 100 2003-04 2004-05 2005-06 2006-07 2007-08 Fiscal Year Increase due to normal population growth. 135 Dispatch Center. In addition, funding is included for staff to improve staffing ratios, develop infrastructure master plans, and develop plans for the 2005 Water Resources Plan update. The budget also provides funding for staff and resources to reduce overtime and meet equipment maintenance schedules at wastewater treatment plants, provide electrical maintenance for the new water-activated sludge thickening and chlorine system at the 91st Avenue wastewater treatment plant, and convert the odor control pilot program along the Southern Avenue Interceptor into an ongoing program. In addition, contracted vactor truck service is converted to the staff and supplies necessary to provide this service in-house. Improved supervision of the blue stake program, added supervision for the expansion of the 91st Avenue wastewater treatment plant, and improved service levels for plan and new facility reviews are also included. Finally, a technology project leader is included to improve project planning and implementation. Costs for this position are offset by the elimination of a vacant technology position. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2007-08 $207,827,000 $237,059,000 $265,089,000 1,416.1 1,415.1 1,447.1 Source of Funds: Water Wastewater $132,872,000 $155,107,000 $174,862,000 73,951,000 81,845,000 City Improvement 901,000 — — Other Restricted 103,000 107,000 114,000 n tr y. in th e co u p ro gr a m s ir a p re ’s k ty a th e ci re ss iv e le fo r le a ks in e m os t a gg ic s to li st en n es s d a y s. s on e of th a si on h tr bu ix ec n ve el fi oe Ph th e- a rt ks w it h in se st a te -o fre p a ir le a Wor ke rs u n d tr y to a es n li d n u n d er gr ou 136 2006-07 90,113,000 Water Services Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Gallons of water produced systemwide (in billions) 2006-07 * 2007-08 128.4 132.5 137.5 Gallons of wastewater treated (in billions) 69.5 67.5 67.4 Gallons of water supplied to consumers per $.01 4.27 3.90 3.56 Miles of wastewater collection lines cleaned 1,535 1,556 1,556 Laboratory analyses and analytic screenings conducted in-house 79,569 81,500 81,500 929,875 95% 958,000 95% 984,000 96% 1,333,443 1,452,000 1,650,000 5,671 6,500 6,500 Percent of service leaks repaired within the five-day standard 90% 95% 96% Average gallons of water used per capita per day 199 200 199 Telephone calls: Received Percent answered Customer payments processed by customer services staff (excludes mailed payments) 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 The 2007-08 Solid Waste Management operating budget allowance of $114,031,000 is $12,967,000 or 12.8 percent more than 2006-07 estimated expenditures. This increase includes costs for procuring solid waste containers and refuse barrels, increases in fuel prices, increases in solid waste tonnage and fees, the carryover of costs associated with various remodeling projects and software upgrades; and other inflationary increases. Budget additions include staff and equipment needed to keep pace with increases in contained residential solid waste disposal and the growth at the 27th Avenue Solid Waste Management Facility. Also, staff and equipment is added to clean up illegally dumped waste. Funding to implement electronic routing also is added in the budget. Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2007-08 $83,670,000 $101,064,000 $114,031,000 519.0 531.0 550.0 Source of Funds: Solid Waste General h om es . 0 P h oe n ix a n 37 9, 00 th e or m om d w ee kl y fr a re co ll ec te R ec y cl a bl es 138 2006-07 $82,829,000 $99,956,000 $112,886,000 841,000 1,108,000 1,145,000 Solid Waste — Recyclable Material Processed Thousands of Tons 150 125 118.0 124.0 126.4 127.0 129.0 2004-05 2005-06 2006-07 2007-08 100 75 50 25 0 2003-04 Fiscal Year _______________________________________________________________________ Solid Waste Management Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 2006-07* 2007-08 Residential households served with twice-per-week contained solid waste and recyclable material collections 366,903 379,270 386,100 Tons of residential recyclable materials collected 126,400 127,000 129,000 1,029,700 1,170,000 1,190,000 741,700 800,000 812,000 Tons of total solid waste disposed at city landfills Tons of solid waste from city residences disposed *Based on 10 months actual experience. 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 2007-08 Public Works operating budget allowance of $27,834,000 is $3,780,000 or 15.7 percent more than 2006-07 estimated expenditures. This increase is primarily due to budget additions and inflationary increases for fuel and utilities and is partially offset by purchases of fleet vehicles and various facility improvements carried over to 2007-08. Budget additions included in the 2007-08 operating budget include the restoration of five positions needed to keep pace with facility maintenance and security and one auto mechanic to ensure proper maintenance of public safety vehicles. The budget also reflects a Development Services-funded auto mechanic to maintain an acceptable ratio of mechanics-to-vehicles due to recent additions in the Development Services Department. Public Works Major Performance Measures and Service Levels The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 2005-06 Square footage of buildings 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 2006-07* 2007-08 7,448,987 8,417,854 9,425,000 19,303 21,695 23,500 40.0 39.3 40.3 6,883 7,000 7,175 54.7 56.0 56.5 Expenditure and Position Summary 2005-06 Operating Expense Total Positions 2006-07 2007-08 $23,697,000 $24,054,000 $27,834,000 498.0 506.0 522.0 Source of Funds: General $16,601,000 $17,812,000 $21,119,000 City Improvement 5,371,000 6,186,000 6,198,000 Other Restricted 1,725,000 56,000 517,000 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 2007-08 Office of Environmental Programs operating budget allowance of $2,292,000 is $436,000 or 23.5 percent more than the 2006-07 estimated expenditures. This increase includes normal inflationary increases, budget additions, a new grant for brownfields training, and the carryover of the Brownfields Light Rail Assessment grant. Budget additions include funding for a position to implement enhancements to the Dust Control Program. 10 0 Operating Expense Total Positions 2006-07 15.0 Water 2007-08 2002 2003 2004 2005* 2006 The following significant performance measures and service trends will be achieved with the 2007-08 budget allowance: 16.0 $1,197,000 $1,469,000 $1,669,000 212,000 262,000 246,000 30,000 100,000 101,000 Federal & State Grant 213,000 25,000 276,000 Capital Construction N/A Environmental Programs Major Performance Measures and Service Levels Source of Funds: General 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. $1,652,000 $1,856,000 $2,292,000 15.0 N/A Calendar Year Expenditure and Position Summary 2005-06 35 2005-06 2006-07* 2007-08 2,040 2,000 2,000 Number of facility assessments and technical assistance visits conducted** 82 141 65 Number of brownfield projects implemented 37 40 45 96% 94% 94% 79 50 50 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. Fund to 3.5 percent if the local economy continued its strong performance and General Fund revenues would provide for an increased Contingency Fund and improvements to community services. The 2007-08 budget increases the contingency amount by $5,370,000 and also increases the percentage from the current year’s 2.7 percent to 2.9 percent of General Fund operating expenditures. 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 2007-08. 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 2006-07 budgeted level of $28,860,000 to $34,230,000. This increases the General Fund contingency to 2.9 percent of operating expenditures. The following table shows contingency funding over the past ten years. 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. This 3 percent target was achieved in 2000-01. In 2003-04, budget reductions necessitated reducing the funding level to 2.5 percent. In May 2005, as part of a five-year forecast review, the City Council expressed interest in increasing the Contingency Fiscal Year General Fund Operating Expenditures* Contingency and Set-Aside Amounts Percent of Operating Expenditures 1998-99 $748,937 $21,000 1,150 2.8 1999-00 797,633 23,408 2.9 1,800 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 1,079,000 2.7 2007-08 1,184,192 28,860 _ 34,230 2.9 *Prior to 2001-02, Development Services operating expenditures were included in the General Fund contingency calculation. A separate contingency is now maintained. 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. 2007-08 Other Fund Operating Expenditure and Contingency Amount (000’s) Operating Expenditures Contingency Amount $131,204 $11,700 8.9 73,182 10,000 13.7 Aviation 217,264 14,000 6.4 Water 207,471 30,000 14.5 Wastewater 105,921 14,820 14.0 Solid Waste 116,886 4,000 3.4 48,754 5,000 10.3 9,141 50 0.5 29,937 900 Fund Transit 2000 Development Services Convention Center Golf Public Safety Enhancement 144 Percent of Operating Expenditures 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 2007-08 for existing debt and future bond sales is $631,021,000. As shown in the pie chart to the right, the $631.0 million is 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 $72.0 million in general government nonprofit corporation bonds debt service payments funded by the General ($32.0 million) and Transit 2000 ($40.0 million) portions of excise 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 2007-08 Debt Service Aviation 15.1% Secondary Property Tax 26.0% Solid Waste 3.2% Wastewater 14.1% Others 2.5% Convention Center 2.9% AHUR 5.0% Water 19.7% City Improvement* 11.5% *Funded by the General and Transit 2000 taxes. 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 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, service centers 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. Currently, to finance the capital programs of enterprise departments, the city has used 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. 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. At a bond election held on March 14, 2006, voters approved all of the $878.5 million of the 2006 Citizens’ Bond 145 Committee-recommended bond authorizations. These authorizations provided funding to construct capital improvements in the following areas: ■ Police and Fire Protection ■ Police, Fire and Computer Technology ■ Parks, Recreation and Mountain Preserves ■ Education Facilities ■ Library Facilities ■ Street Improvements ■ Storm Sewers ■ Senior Facilities ■ Cultural Facilities ■ Affordable Housing Neighborhood Revitalization Bond Ratings 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 AAA, respectively. Standard and Poor’s has also assigned a Financial Management Assessment (FMA) score of “strong.” 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, 2007. Statement of Bonded Indebtedness General Obligation Bonds (In Thousands of Dollars) (1) Purpose Non-Enterprise Revenue General Supported General Obligation Obligation Bonds Bonds(2) Various Airport Sanitary Sewer Solid Waste Water Public Housing Street and Highway $869,983 — — — — — — Subtotal Less: Restricted Funds $ Total General Obligation Bonds — 20,840 61,821 34,965 110,036 — — $869,983 20,840 61,821 34,965 110,036 — — $869,983 (90,326) $227,662 — Direct Debt Less: Revenue Supported $779,657 — $227,662 (227,662) Net Debt $779,657 $ — Revenue Bonds — 33,155 — — — 1,285 147,386 $869,983 53,995 61,821 34,965 110,036 1,285 147,386 $1,097,645 (90,326) $181,826 — $1,279,471 (90,326) $1,007,319 (227,662) $181,826 (181,826) $1,189,145 (409,488) $ 779,657 $ Total Bonds $ — $ 779,657 (1) Represents bonds outstanding as of April 1, 2007. These figures do not include the outstanding principal amounts of certain general obligation bonds, certain water revenue bonds and street and highway user revenue bonds which have been refunded or the payment of which has been provided for in advance of maturity. The payment of the debt service requirements on these bonds (including redemption premiums where applicable) is secured by federal securities which were purchased with proceeds of the refunding issues and other available monies and are held in irrevocable trusts and special investment funds held by the city. (2) Revenues remaining after payment of operation and maintenance expenses and revenue bond debt service requirements of the Phoenix aviation operations since 1967 and the Phoenix water system since 1942 have been paying the general obligation bond debt service requirements of each respective system. In addition, the debt service requirements on the city's sanitary sewer general obligation bonds are supported from revenues of the city's sanitary sewer system. This enterprise system was established in the 1980-81 fiscal year through the city's imposition of a sewer user charge beginning June 1, 1980. Also, since 1990-91, all solid waste bonds have been paid from the revenues of the Solid Waste Enterprise Fund. 146 Debt Limitation Water, Sewer, Lighting, Parks, Open Spaces, Playgrounds, Recreational Facilities, Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt for combined water, sewer, lighting, park, open space preserves, playgrounds, recreational facilities, public safety, law enforcement, fire emergency, and street and transportation may not exceed 20 percent of a city’s net secondary assessed valuation, nor may outstanding general obligation bonded debt for all other purposes exceed six percent of a city’s net secondary assessed valuation. Unused borrowing capacity as of April 1, 2007, based upon 2006-07 assessed valuation is shown in the following tables. Public Safety, Law Enforcement, Fire and Emergency Services Facilities, and Streets 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, 2007. 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. and Transportation Facilities Bonds 20% Constitutional Limitation Direct General Obligation Bonds Outstanding(1) $2,452,226,753 (992,544,203) Unused 20% Limitation Borrowing Capacity $1,459,682,550 (1) Represents general obligation bonds outstanding as of April 1, 2007. 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, 2007 $ 735,668,026 $105,100,000 Direct General Obligation Bonds Outstanding (14,774,364) (90,325,636) Unused 6% Limitation Borrowing Capacity $ 720,893,662 Net Direct General Obligation Bonded Debt Ratios Per Capita Debt Secondary Pop. Est. as of Assessed April 1, 2007 Valuation (1,583,700) ($12,261,133,763) Full Cash Valuation ($100,948,090,933) Direct General Obligation Bonded Debt Outstanding as of April 1, 2007 $636.05 8.22% 1.00% Net Direct General Obligation Bonded Debt Outstanding as of April 1, 2007 %$492.30 6.36% 0.77% 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. The city has also used nonprofit corporation financing for projects essential to health and safety: e.g. police precinct stations. 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 by Source of Funds and Type of Expenditure (In Thousands of Dollars) 2005-06 Actual 2006-07 Estimate 2007-08 Budget $112,829 $120,209 $164,127 Aviation 61,460 71,289 86,290 Arizona Highway User Revenue 31,247 31,242 31,246 Fund Secondary Property Tax Convention Center 20,423 18,590 18,586 General 23,854 28,953 31,984 Golf Grant Funds - Transit and Housing Solid Waste Sports Facilities 579 849 851 2,138 2,141 2,141 17,797 21,635 20,269 6,519 9,386 9,177 Transit 2000* 27,680 38,452 40,321 Wastewater* 49,448 62,901 79,963 Water* 81,509 90,828 114,177 Capital Funds - Various Sources 13,025 166,359 31,888 $448,508 $662,834 $631,020 Principal $172,810 $375,127 $265,427 Interest 272,209 281,263 332,781 3,489 6,444 32,812 $448,508 $662,834 $631,020 Total Type of Expenditure Issuance Total *Includes bonded debt and general government nonprofit corporation bond payments. Principal and interest payments are detailed by program and fund in the 2007-08 Detail Budget document. 148 Overview of Capital Improvement Program Process The Capital Improvement Program is a five-year plan for capital expenditures needed to replace, expand and improve infrastructure and systems. Other planning processes, the most significant of which are explained in this section, identify the need and provide funding for capital projects and related operating costs. On April 3, 2007, the City Council reviewed the Preliminary 2007-12 Capital Improvement Program and forwarded the 2006 bond-funded portion for review and consideration by the 2006 Bond Committee. The bond committee met on April 24 and reviewed property tax assessed valuation results, planned sales of bonds and the 2006 bond-funded portion of the Preliminary Capital Improvement Program. The bond committee approved the plan presented. The Capital Improvement Program reflected here includes the preliminary plan presented to City Council in April updated for project timing and cost changes and the newly approved Airport Development Plan. 2007-12 Capital Improvement Program Development The annual citywide Capital Improvement Program update process began in January when departments prepared revised 2006-07 estimates and updated their five-year capital improvement programs. 2006-07 estimates reflect updated construction cost estimates, project delays, awarded contract amounts, project carry-overs and other program changes. The 2007-12 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 sources. Also included are net new operating costs and/or savings. Budget and Research staff reviewed the departments’ programs for funding availability, reasonableness and technical accuracy. Presented in this citywide program are projects reviewed and adopted through several planning processes. These include capital projects funded through the most recently adopted multi-year rate plans for Enterprise funds such as Water, Wastewater and Solid Waste and from other planning processes including the five-year Arterial Streets Plan, infrastructure financing plans for impact fees and various multi-year facility maintenance plans. Also reflected are capital projects from sales tax and voter-approved bond programs including the $878.5 million 2006 Bond Program approved by Phoenix voters 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 controlled construction costs and increased project quality by making better use of locally available construction resources. The city also has achieved better bid prices and increased competition for city projects by avoiding busy periods for the construction industry. As projects to construct building facilities are designed, they are reviewed by a Facilities Review Team made up of representatives from the Public Works, Engineering and Architectural Services, Information Technology, Development Services, Parks, and Budget and Research departments. This team reviews project designs for compliance with city standards for sustainability, maintainability and compatibility with enterprise-wide systems and to determine that the project is being designed within funding limitations. Information on the capital and operating costs and timelines are closely monitored and linked to the citywide annual operating budget through these reviews. 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 multi-year forecasts for assessed valuation and property tax levies and for General Fund revenues and expenses. They recommended annual 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 or other tax rates to support the estimated $12.5 million in new annual operating costs for the projects once complete. City Council formed the $878.5 million in projects into seven propositions all of which were approved by the voters in March 2006. Consistent with past practice to continue community oversight, the 2006 Bond Committee met on April 24, 2007, to review the 2006 bond-funded portion of the 2007-12 Capital Improvement Program. They recommended approval of the plan presented. 149 150 Enterprise Funds Capital Construction Funds Fees for the Water, Wastewater and Solid Waste enterprise funds are billed to customers on a single billing. As a result, all three of these enterprise funds complete annual updates to their multiyear rate plans on a similar timeline. These plans are first reviewed by the City Council Land Use, Environment and Natural Resources Subcommittee prior to action on the plans by the full City Council. Bond and pay-as-you-go funded capital projects, debt service and operating and maintenance costs of existing services and planned capital projects are all provided for in these multi-year rate plans. User fee rate changes are typically implemented in March of each year to support the updated plans. In addition, a new 10-year Airport Development Plan (ADP) was presented to the City Council and approved in February 2007. The ADP identifies capital projects to be funded from airline rates and charges, passenger and customer facility fees, federal funds and other sources. Debt service and operations and maintenance of existing services and new facilities are also included in the financial plan. The Phoenix Convention Center enterprise fund receives most of its resources from earmarked sales taxes. To support a significant expansion and renovation of the Phoenix Convention Center, an extensive multi-year forecast was developed to establish pay-as-you-go, bond and related debt service, and operations and maintenance cost capacities without a tax rate increase. The first phase of the expansion is now open for business and the next project phases are moving forward. The capital and financial plan was critical to securing $600 million in bond funding split equally between the city and state of Arizona to expand and modernize the facility. 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 are 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 In September 1999, the voters approved a 10-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 2007-12 Capital Improvement Program includes $169.4 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 only through 2009-10 reflecting the expiration of the 10-year sales tax. 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 plan provides funding for light rail, buses, right of way improvements, passenger facilities and related operating costs. The 2007-12 Capital Improvement Program includes $218.0 million of these funds, which are programmed for: ■ ■ ■ ■ ■ ■ Additional vehicles and upgrades to existing vehicles ($7.7 million) New and expanded passenger and maintenance facilities ($63.0 million) Bus pullouts, left-turn arrows and bicycle lanes ($14.1 million) Technology upgrades ($7.2 million) Light rail, bus rapid transit and related support services ($123.0 million) Contingencies ($3.0 million) Five-Year Arterial Streets Plan Each year the Street Transportation Department updates its five-year plan and funding for major street and storm drain construction. This program is primarily funded through Arizona Highway User Revenue (AHUR) including state-shared revenue from gas taxes and vehicle license taxes. The update begins with the Budget and Research Department providing an updated current year and five-year forecast of AHUR revenue and requirements for AHUR to support operating expenditures and debt service to determine the amounts available for pay-as-you-go capital projects. Also included in the plan are any needed updates to voter-approved bond projects as well as funding sources from other government agencies in projects such as flood control. The plan is then presented to the Transportation, Parks and Seniors Subcommittee before forwarding on to the City Council. This program reflects the five-year Arterial Street plan approved by the City Council on May 1, 2007. Programming of Impact Fees 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 planned in the Capital Improvement Program. The underlying infrastructure financing plans and fees are updated every three years with the most recent update having been completed and new fees implemented in mid-February 2007. In upcoming years, the plan and related fees will be updated for approximately one-third of the impact fee programs each year on a three-year cycle. Fees for programs not subject to a plan update will be updated annually using an appropriate cost index. Operating costs for impact fee-funded projects are included in the rate planning process for Water, Wastewater and Solid SUMMARY OF 2007-12 CAPITAL IMPROVEMENT PROGRAM (In Thousands of Dollars) Program 2007-08 2008-09 2009-10 2010-11 2011-12 5-Year Total Arts and Cultural Facilities Aviation $26,188 435,257 $10,327 650,541 $28 200,679 $238 244,839 $– 693,290 $36,781 2,224,606 Economic Development Energy Conservation Facilities Management 27,490 1,575 27,384 39,920 1,250 13,446 12,830 1,388 13,863 10,230 1,450 14,978 2,000 1,450 5,352 92,470 7,113 75,023 Fire Protection Freeway Mitigation Historic Preservation HOPE Housing Human Services Information Technology Libraries Neighborhood Services Parks, Recreation and Mountain Preserves 29,074 5,157 5,618 11,122 23,973 13,568 13,706 14,800 – 3,085 2,017 8,281 5,400 9,551 20,103 – 1,730 3,363 19,197 – 3,054 858 – – – – 83,174 5,157 13,487 17,360 11,909 6,000 9,927 12,330 5,900 6,233 3,150 – – 59,643 30,868 39,417 21,844 15,300 243,056 7,500 7,850 57,908 3,487 7,850 35,210 8,931 8,119 20,145 200 – – 41,962 39,119 356,319 61,910 36,407 268,211 12,386 22,725 92,257 13,379 35,210 118,393 10,262 18,619 94,697 4,350 – 89,282 102,287 112,961 662,840 36,802 196,014 388,374 17,340 155,105 114,330 20,746 135,335 159,737 20,999 158,035 87,534 9,383 128,960 164,214 105,270 773,449 914,189 368,958 289,214 242,589 142,724 201,220 1,244,705 $2,256,988 $1,535,233 $1,053,756 $889,372 $1,302,851 $7,038,200 Phoenix Convention Center Police Protection Public Transit Solid Waste Disposal Street Transportation and Drainage Wastewater Water Total 151 Waste. Operating costs for the other impact fee programs are identified in the Capital Improvement Program and are funded through the annual operating budget as costs for operating and maintaining new capital projects. Budget and Research staff have worked with Planning and operating department staff to appropriately program $160.7 million in available impact fees in the 2007-12 Capital Improvement Program. Additional impact fees will be programmed in future capital improvement programs as these fees are collected. SUMMARY OF 2007-12 CAPITAL IMPROVEMENT PROGRAM BY SOURCE OF FUNDS (In Thousands of Dollars) Source of Funds 2007-08 2008-09 2009-10 2010-11 2011-12 5-Year Total General Funds Parks and Preserves Transit 2000 Development Services $15,106 119,116 42,920 25 $6,932 36,984 42,386 89 $5,675 13,301 50,488 250 $4,302 – 54,054 134 $3,302 – 28,139 – $35,317 169,401 217,987 498 Capital Construction 28,415 20,175 22,135 22,556 22,919 116,200 Arizona Highway Users Public Transit 96,358 15,428 71,868 3,037 77,901 8,675 82,467 8,488 84,747 34,249 413,341 69,877 Community Reinvestment 6,547 1,130 2,000 2,000 2,000 13,677 Community Development Block Grants (CDBG) HOPE Grant 3,672 8,325 600 1,347 600 – 600 – 200 – 5,672 9,672 Other Restricted 1,363 – – – – 1,363 Grant Funds Enterprise Funds: Aviation 9,485 – – – – 9,485 34,320 122,942 53,000 34,706 76,901 321,869 Water Wastewater 68,678 45,652 93,827 39,190 78,993 40,391 113,286 56,779 98,518 42,276 453,302 224,288 Solid Waste Convention Center Total Operating Funds Property Tax Supported: 2006 Various Purpose 2001 Various Purpose 1989 Historic Preservation 1988 Various Purpose Revenue Supported: 1981 Various Purpose Nonprofit Corporation Bonds: Aviation Convention Center Solid Waste Transit 2000 Wastewater Water Other Total Bond Funds 152 5,674 3,073 3,643 3,680 3,214 19,284 39,830 5,848 4,728 4,600 4,550 59,556 $540,914 $449,428 $361,780 $387,652 $401,015 $2,140,789 $160,727 78,742 217 2,684 $191,080 – – – $168,273 817 – – $158,728 – – – $– – – – $678,808 79,559 217 2,684 6,825 – – – – 6,825 258,089 19,727 32,465 176,591 239,417 267,304 28,222 493,508 – 13,090 33,500 48,560 163,784 1,268 132,887 – 15,695 14,000 98,726 162,310 792 190,807 – 16,224 – 15,152 23,332 – 499,701 – 4,500 – 93,304 99,455 – 1,574,992 19,727 81,974 224,091 495,159 716,185 30,282 $1,271,010 $944,790 $593,500 $404,243 $696,960 $3,910,503 SUMMARY OF 2007-12 CAPITAL IMPROVEMENT PROGRAM (continued) BY SOURCE OF FUNDS (In Thousands of Dollars) Source of Funds Impact Fees Passenger Facility Charge Other Cities’ Share SROG and Val Vista Solid Waste Remediation Capital Grants Federal, State and Other Participation Parks Capital Gifts Private Participation Capital Reserves Other Capital Total Other Capital Sources TOTAL 2007-08 2008-09 2009-10 2010-11 2011-12 5-Year Total $138,088 83,473 $17,145 15,784 $500 7,038 $5,000 16,572 $– 112,995 $160,733 235,862 95,942 3,023 82,646 19,788 1,068 46,822 1,218 35,073 2,535 – 23,361 1,520 57,300 7,881 – 17,719 1,156 38,576 18,454 – 32,381 1,668 33,537 24,295 – 216,225 8,585 247,132 72,953 1,068 3,750 15,064 2,222 2,000 20,438 – 876 – – – – – – – – 6,626 35,502 2,222 $445,064 $141,015 $98,476 $97,477 $204,876 $986,908 $2,256,988 $1,535,233 $1,053,756 $889,372 $1,302,851 $7,038,200 153 2007-12 Capital Improvement Program Highlights The Capital Improvement Program totals $7 billion over the next five years. As shown in the pie chart, funding for the 2007-12 program comes from five main sources: $0.8 billion in 1988, 1989, 2001 and 2006 voter-approved bond funds, $3.1 billion in various nonprofit corporation bonds, $1.7 billion in pay-as-you-go operating funds, $0.4 billion in Transit 2000 and Parks and Preserve Initiative funds, and $1.0 billion in other capital funds. The $1.0 billion in other capital funds includes $216.2 million in payments by other cities and agencies participating in Water and Wastewater projects, $247.1 million in capital grants, $160.7 million in development impact fees, $235.8 million in passenger facility charges, $80.6 million in other agency and private participation in projects, $35.5 million in capital reserves, $8.5 million in Solid Waste remediation funding, and $2.2 million from miscellaneous capital sources. Projects in the first year total $2.3 billion and are funded from pay-as-you-go operating funds ($0.5 billion), bond funds ($1.3 billion) and other capital financing ($0.5 billion). A financial organization chart at the end of this section presents a visual overview of the first year by source of funds and additional schedules summarize the 2007-08 Capital Budget by source of funds and the 2007-08 Capital Improvement Program by fund group and program. A brief overview of the five-year plan for each program follows. 2007-12 Capital Improvement Program Sources of Funds Property Tax Bonds $0.8 Billion Pay-As-You-Go $1.7 Billion Nonprofit Corporation $3.1 Billion Transit 2000 and Parks and Preserves $0.4 Billion Other $1.0 Billion Arts and Cultural Facilities Aviation The $36.8 million Arts and Cultural Facilities program is funded with 2001 and 2006 bonds and miscellaneous contributions. The following projects are planned for bond funding: The Aviation program totals $2.2 billion. Projects for Phoenix Sky Harbor International Airport and the two satellite airports, Phoenix Deer Valley and Phoenix Goodyear are included in the Aviation program. The Aviation program is funded with Aviation operating revenue, federal grant funds, Aviation nonprofit corporation bonds, and Passenger and Customer Facility Charge funds. The projects and funding included in this Aviation program are consistent with the recently adopted Airport Development Plan. Major improvements planned for Sky Harbor International Airport include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ Construct an expansion to the Museo Chicano Complete renovation of the Children’s Museum of Phoenix Complete renovation and expansion of the Phoenix Theatre Renovate and expand the Phoenix Art Museum Construct upgrades and make ADA improvements to the Arizona Science Center Construct a new facility to house Arizona Opera and Ballet Arizona Renovate existing Black Theatre Troupe facility ■ ■ ■ Renovate Carver Museum Address major maintenance, ADA and safety issues at city-owned cultural facilities. ■ Design and begin construction of a new West Terminal Develop airport expansion infrastructure Design and construct an automated train and related light rail station Reconstruct and expand taxiways 155 ■ ■ ■ Acquire and maintain properties for the Community Noise Reduction Program, the automated train and a light rail station Complete various development studies and consultant services Upgrade electrical system and expand Terminal 3 checkpoints ■ Rehabilitate Terminal 4 ■ Expand and improve roadways ■ ■ Purchase additional buses and improve parking facilities Economic Development The $92.5 million Economic Development program is funded with 2006 bonds, Community Reinvestment funds, and nonprofit corporation bonds and includes downtown and citywide economic development projects. Downtown projects include acquiring land, renovating a building for the School of Journalism, designing the new University of Arizona College of Pharmacy and constructing 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 downtown infrastructure improvements to sidewalks, landscaping and lighting, business redevelopment and public art enhancements. Other projects funded with 2006 bonds include the revitalization of public infrastructure in west Phoenix and acquisition of property for the relocation of the state fairgrounds. Install intruder alarm and implement other security improvements The Aviation program also includes taxiway, ramp and hangar improvements at the Phoenix Deer Valley, Goodyear and Williams Gateway airports and construction of an administrative office facility. 20 06 . in A u gu st ed it s d oo rs en op ix n P h oe D ow n to w n h a se of A SU p t rs fi e h T 156 Energy Conservation Facilities Management The $7.1 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 $75.0 million and is funded with 2001 bonds, 2006 bonds, General funds, Capital Construction funds, impact fees and other restricted funds. The following projects are planned for 2001 and 2006 bond funding: ■ ■ ■ ■ ■ ■ Renovate the Glenrosa Service Center Construct North Gateway Maintenance Service Center Construct Compressed Natural Gas Fueling Sites Replace critical facility systems in the Calvin C. Goode Building Refurbish the City Council Chambers to bring it into compliance with the Americans with Disabilities Act Replace critical facility and support systems in Phoenix City Hall ■ ■ ■ Increase work space efficiencies through a partial restacking of Phoenix City Hall Update downtown facilities to bring them into compliance with the Americans with Disabilities Act Provide off-site preparation for the future Estrella maintenance and customer service center Also included in the program is the use of Capital Construction funds to underground 69kv electric lines near the Sonoran Preserve, impact fees for a fuel site at the Estrella Service Center, and funding for remediation of contaminated soil from leaking underground storage tanks. Planned uses of General funds include major facility repairs and maintenance for service centers, maintenance shops and office buildings according to the facility management plan. 157 Fire Protection The $83.2 million Fire Protection program is funded with 2001 and 2006 bonds, grants and impact fees. The following fire stations are planned for bond funding: ■ ■ Fire Station Construction ■ The following firefighter training and technology projects also are included for bond funding: New Station 55 near the borders of the Deer Valley and North Gateway villages along the I-17 corridor ■ ■ ■ New Station 59 in Estrella Village ■ New Station 72 in Desert View Village ■ ■ Study and pilot new fire communication technology Expansion of the Fire Training Academy Construction of a Command Training Center Construction of a Dispatch and Emergency Operations Center New Station 74 in west Ahwatukee Foothills Station 62 at 99th Avenue and Lower Buckeye Road (also partially funded by impact fees) co n st ru ct ed u le d to be ed h sc re a s fi re st a ti on F iv e n ew rs . ea y ve fi t th e n ex 158 th ro u gh ou ov er t th e ci ty Freeway Mitigation Historic Preservation HOPE The Freeway Mitigation program totals $5.2 million and 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 included for the Outer Loop, South Mountain Loop, Piestewa Peak, and Black Canyon/Maricopa Freeway corridors. The Historic Preservation program totals $13.5 million and is funded with 1989, 2001 and 2006 bonds. The following projects are planned: The HOPE VI project of $17.4 million is funded with federal grants and 2001 and 2006 bonds. The HOPE VI project will complete reconstruction of the public housing units at Matthew Henson and help revitalize the surrounding neighborhood. The project establishes a mixed-use, mixed-income development and creates incentives to attract additional investment to the area through public/private partnership. ■ ■ ■ ■ Construction of historic preservation demonstration projects Construction of city-owned historic preservation demonstration projects Acquisition and rehabilitation of threatened historic buildings citywide 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 $59.6 million and is funded with Community Development Block Grant (CDBG) funds, 2006 bonds and public housing federal grant funds. Housing projects using 2006 bond funds include: The $30.9 million Human Services program is funded with 2001 and 2006 bonds and provides for design and construction of the La Pradera and 51st Avenue senior centers, remaining 2001 bonds for a homeless shelter and purchase of land for the 16th Street senior center. It also includes completion of the southwest family services center and renovation and expansion of the Watkins Homeless Shelter to serve as an emergency shelter. The $39.4 million Information Technology program is funded with 2001 and 2006 bonds, and with Water, Wastewater, Solid Waste Disposal, and Aviation revenues. Projects planned for 2001 and 2006 bond funding include the following: ■ ■ ■ Acquire and expand city-owned properties for affordable housing Provide a new loan program to increase affordable properties Install air conditioning units in public housing to replace obsolete evaporative coolers Nonprofit projects using 2006 bond funds include: ■ Providing funding for construction of the United Methodist Outreach Ministries New Day Center homeless shelter for families ■ ■ Nonprofit projects in the program include: ■ ■ ■ ■ Expansion of the Boys and Girls Club Dave Pratt Dental Clinic Partial funding for the Native American Connections’ Business and Cultural Center Funding to acquire and renovate a facility for the Valle Del Sol Combined Service Center ■ ■ ■ Modernization projects for public housing units are planned based on the availability of grant funds. City Council-approved allocations of Community Development Block Grant funds also are programmed. 160 ■ Partial funding for the Body Positive Community Service Center ■ Complete the replacement of the public safety and public service radio system with the Phoenix Regional Wireless Network project Acquire electronic equipment to provide improved customer service 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 $42 million and is funded with 2001 and 2006 bonds, impact fees and General funds. Projects planned for 2001 and 2006 bond funding include the following: ■ ■ ■ ■ ■ Acquire land for a west Ahwatukee branch library Complete construction of a new Agave regional branch library Construct and equip a replacement for Harmon branch library Remodel the Saguaro branch library Design, construct and furnish South Mountain regional branch library ■ ■ Upgrade and expand the library computer system and network Expand library patron self-service capabilities Complete the Palo Verde replacement branch library General funds are included to construct minor improvements to the Burton Barr Library and improve other existing branch libraries to meet current standards. Impact fees are included to acquire sites for new libraries in North Gateway, west Ahwatukee and Desert View areas. Impact fees will also fund the design of an Estrella branch library. Neighborhood Services The Neighborhood Services program totals $39.1 million and is funded with Community Development Block Grant (CDBG) funds, 2001 bonds and 2006 bonds. Projects planned for 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 and blight elimination Acquire property for blight elimination and revitalization Construct neighborhood infrastructure such as sidewalks, lighting, alley improvements and landscaping to enhance aging neighborhoods T h e C es a r C h a ve z L ib ra ry op en 25 ,0 00 -s qu ed in Ja n a re -f oo t re u a ry 20 07 gi on a l br a ch il d re n 's in so u th w n ch li br a ry st or y ro om es t P h oe n ix in cl u d es a , a co m m u d ed ic a te d . The co m p u te r n it y m ee ti sp a ce fo r tr a in in g la n g ro om , p a re n ts /c a b, a a te en sp a re gi ve rs a ce a s w el l n d y ou n g as a ch il d re n . 161 Parks, Recreation and Mountain Preserves ■ ■ The Parks, Recreation and Mountain Preserves program totals $356.3 million and is funded with 2001 and 2006 bonds, parks monopole sites revenue, impact fees, Parks and Preserves Initiative and other restricted funds. The program provides for acquisition and development of new park sites, preserves, specialty areas and improvements to existing parks. The following major projects are planned for in 2001 and 2006 bond funds: ■ ■ ■ ■ Renovate the north building at the Phoenix Center for the Arts ■ Renovate and construct trails citywide ■ Renovate aquatics facilities citywide ■ ■ ■ ■ Acquire land in the Ahwatukee Foothills area Develop a downtown civic space park Renovate and construct park upgrades to comply with the Americans with Disabilities Act Construct sport fields and install sports lighting upgrades citywide Nonprofit projects in the program include: ■ ■ ■ ■ Acquire land for the Rio Salado Oeste habitat restoration Design and construct a soccer stadium at the Reach 11 sports complex ■ 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. Improve and renovate parks citywide Acquire Pioneer Living History Museum property and renovate the Ben Avery Shooting Range Acquire land for neighborhood mini-park sites s ki n d in m p le x of it n s. r so cc er co jo co m p et it io a l a m t on rs ti al and na le x is th e fi p on gi om C re l, ts 11 Sp or e fo r lo ca T h e R ea ch d e a ve n u w il l p ro vi d n a ix n P h oe 162 Parks and Preserves 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 included to add amenities to parks with monopole sites. Phoenix Convention Center The $102.3 million Phoenix Convention Center program is funded with Convention Center operating revenue, nonprofit corporation bonds, 2001 and 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 and south building renovations are the primary projects included for funding in this program. General funds are planned for various garage improvements. Projects using 2006 bonds include the Herberger Theater Center renovations and enhancements as well as parking garage repairs. T h e P h oe n ix C on ve n ti on C en te fe a tu re s fo r Wes t B u il u r le ve ls a d in g w a s n d 15 7, 00 co m p le te d 0 sq u a re fe in Ju ly 20 et of n ew 06 a n d m ee ti n g a n d ex h ib it sp a ce . 163 Police Protection The Police Protection program totals $113 million and is funded with 2001 and 2006 bonds, impact fees and nonprofit corporation bonds. The following projects are planned: ■ ■ 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 Acquire equipment for Automated Fingerprint Identification System (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 and construct a new precinct in the Cave Creek Road and Smokehouse Trail area Acquire land, design and construct a new precinct in the northwest area of 1-17 and Happy Valley Road Construct a new precinct at 99th Avenue and Lower Buckeye Road Design a communications center expansion Public Transit The $662.8 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 include the following: ■ Complete the range design and driving track improvements ■ ■ Renovate police headquarters and facilities ■ ■ ■ ■ 164 Acquire standard buses, Dial-A-Ride replacement vans, neighborhood circulators and LNG engine upgrades Improve and maintain bus stops, bus shelters and park-and-ride locations Construct, expand and renovate north, south and heavy maintenance facilities Implement technology enhancements including upgrade to the vehicle management system and implementation of a wireless communication system for the regional bus system Plan and construct rapid transit and light rail including design of the northwest light rail extension Acquire land for Light Rail right of way and future park-and-ride locations Solid Waste Disposal Street Transportation and Drainage The $105.3 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 corporation bond funds. Projects planned in the Solid Waste program include: The Street Transportation and Drainage program totals $773.4 million and is funded with Arizona Highway User Revenues, 2001 and 2006 bonds, Capital Construction funds, and participation from other agencies. Included in the program are major streets, storm drainage, traffic improvements, and other street maintenance and improvement projects. This program agrees with the five-year Major Street program approved by the City Council in May, 2007. Major street and storm drainage projects for 2001 and 2006 bond funding include: ■ ■ ■ ■ Monitor and maintain methane gas extraction systems, cell lining and capping, and installing landscaping at the Skunk Creek landfill Maintaining soil capping and the methane gas collection system at the 19th Avenue landfill. Monitoring groundwater and methane gas and installing landscaping at the 27th Avenue landfill Cell excavation and construction of a drainage system and methane gas system for the State Route 85 landfill ■ ■ ■ ■ ■ ■ ■ ■ Design and construct improvements to 20th Street from Highland Avenue to Camelback Road Design and construct improvements to 32nd Street from Washington Street to McDowell Road ■ ■ ■ ■ Acquire right of way, design and construct intersection improvements at Pinnacle Peak Road and Tatum Boulevard Construct a scenic drive segment of Rio Salado Beyond the Banks Design and construct landscape improvements in the west Phoenix revitalization area Design and construct historic districts streetscape improvements Design and construct one mile of major street and storm drain at 51st Avenue from Dobbins Road to Laveen Conveyance Channel (includes funding from AHUR) Design and construct one mile of street and storm drain at 75th Avenue from Buckeye Road to Van Buren Street Design and construct the Bethany Home Road outfall channel Design and construct detention basin at 23rd Avenue and Roeser Road Construct 10th Street wash improvements Construct detention basin at 24th Avenue and Camelback Road 165 2006 bonds are also planned for the purchase of office space for traffic counting, parking meter and right of way management functions. Major street projects for AHUR funding include the following projects: ■ ■ ■ ■ ■ ■ ■ 166 Design and construct one mile of major street at 19th Avenue from Baseline Road to Southern Avenue ■ Complete construction of one mile of major street at Van Buren Street from 59th to 67th avenues Design and construct one mile of major street at Van Buren Street from 67th to 75th avenues Design and construct one mile of major street at Pinnacle Peak Road from 43rd to 35th avenues ■ ■ Design and construct one mile of major street at Pinnacle Peak Road from 43rd to 55th avenues Construct improvements to 52nd Street from McDowell to Thomas roads Design and construct one mile of major street at 35th Avenue from Baseline Road to Southern Avenue Design and construct major roadways at Sonoran Desert Boulevard (includes funding from 2001 Bonds and state and local aid) Design and construct one mile of major street at 43rd Avenue from Lower Buckeye to Buckeye roads Retrofit landscaping on existing major streets Capital Construction funding is included for the following types of projects: ■ Local paving projects ■ Residential street resurfacing ■ Major street overlay ■ Major street microseal ■ Sidewalks ■ Ramps ■ Dust control ■ Speed humps ■ Traffic calming Development impact fees are planned for street improvements in the Desert View, Laveen and Estrella areas. Wastewater The Wastewater program totals $914.2 million and is funded with Wastewater operating revenue, Wastewater nonprofit corporation bonds, impact fees and other cities' participation in the 91st Avenue Wastewater Treatment Plant Subregional Operating Group (SROG) joint venture. Major projects planned for the 91st Avenue wastewater treatment plant include unified plant expansion, odor control facilities, and instrumentation and process control systems, 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 odor control facilities for the Salt River Outfall and Southern Avenue Interceptor sewers Construction of relief sewers citywide 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 Water The $1.2 billion Water program is funded with Water operating revenue, nonprofit corporation bonds, impact fees and city of Mesa participation in the Val Vista Water Treatment Plant joint venture. Major projects planned include the following: ■ ■ ■ ■ ■ ■ ■ Process control and instrumentation projects at the 23rd Avenue wastewater treatment plant Sewer relocations for light rail ■ ■ ■ 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 Rehabilitation and security upgrades at Cave Creek Water Reclamation Plant Design of a new water treatment plant at 15th Avenue and Dobbins Road Design and re-construction of the east basin at the Deer Valley water treatment plant Conversion of plant filtration to granular activated carbon at Val Vista, 24th Street, and Union Hills water treatment plants. 167 ■ Rehabilitation and process optimization at the Val Vista, Deer Valley, 24th Street, and Union Hills water treatment plants ■ ■ ■ ■ ■ ■ ■ ■ ■ 168 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 city’s customer information system Acquisition of additional water resources ■ ■ Relocation of water lines for light rail Construction of the 51st Avenue to Deems Hill reservoir Installation of new service meters and construction of plumbing connections for alley service relocations Acquisition and installation of software and hardware to automate meter reading Performance of an assessment study of all prestressed concrete cylinder pipe (PCCP) 2007-08 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 Housing Human Services Information Technology Libraries Neighborhood Services Parks, Recreation and Mountain Preserves Phoenix Convention Center Police Protection Public Transit Solid Waste Disposal Street Transportation and Drainage Wastewater Water Total Total Program Pay-AsYou-Go Operating 2006 Bonds All Other GO Bonds Nonprofit Corporation Bonds Other Capital Sources $26,188 435,257 27,490 1,575 27,384 29,074 5,157 5,618 11,122 23,973 13,568 13,706 21,844 15,300 243,056 61,910 36,407 268,211 36,802 196,014 388,374 368,958 $850 34,348 6,210 1,575 23,440 – – 129 9,325 2,400 – – 295 2,539 119,858 40,283 – 66,643 5,284 114,203 45,152 68,380 $23,089 – 21,280 – 784 17,813 – 3,144 796 7,733 3,924 3,499 10,409 8,658 42,991 – 30 60 – 15,919 44 555 $2,249 8,583 – – 1,660 6,308 5,157 2,345 716 1,639 9,614 4,004 6,456 2,803 17,864 1,176 9,674 – 30 9,926 – 21 $– 256,329 – – – – – – 285 – 30 6,203 200 1,300 2,439 20,451 21,921 179,011 28,465 460 232,117 270,846 $– 135,997 – – 1,500 4,953 – – – 12,201 – – 4,484 – 59,904 – 4,782 21,539 3,981 55,506 111,061 29,156 $2,256,988 $540,914 $160,728 $90,225 $1,020,057 $445,064 169 RESOURCES AND EXPENDITURES BY CAPITAL FUND 2007-08 CAPITAL IMPROVEMENT PROGRAM RESOURCES Capital Fund Beginning Balance Bond and Related Funds 2006 Bonds Libraries, Senior & Cultural Centers $(5,836) Education (78,498) Affordable Housing & Neighborhoods (995) Parks and Recreation (3,494) Police, Fire & Homeland Security (24,289) Police, Fire & City Technology (1,200) Street and Storm Sewer Improvement (7,122) 2001 Bonds Affordable Housing & Homeless Shelter 4,785 Educational, Youth & Cultural Facilities 1,133 Environmental Improvement & Cleanup (3,614) Fire Protection Facilities & Equipment (14,508) Neighborhood Protection & Senior Centers (523) New & Improved Libraries (6,474) Parks, Open Space & Recreation 1,092 Police Protection Facilities & Equipment (22,158) Police, Fire & Computer Technology 363 Preserving Phoenix Heritage (671) Storm Sewers (8,642) Street Improvements (25,354) 1989 Historic Preservation 296 1988 Bonds Affordable Housing & Service Facilities 53 Freeway Mitigation, Neighborhood Stabilization, Slum & Blight Elimination 53 Parks, Recreation & Mountain Preserves 28 Police Protection 11 Storm Sewers 4 1984 Fire & Police Protection 261 Nonprofit Corporation Bonds (326,149) Aviation Phoenix Convention Center 19,727 Solid Waste 45,883 Transit 2000 239,978 (207,961) Wastewater Water (133,925) Other (84,281) OTHER FINANCING 187,496 Impact Fees Passenger/Customer Facility Charge 54,298 Other Cities' Participation in Joint Ventures 15,022 Solid Waste Remediation 8,773 Capital Grants 46 Federal, State & Other Participation 79,413 Capital Gifts 1,235 Private Participation 2,584 Capital Reserves 290,014 Other Capital 23,664 TOTAL $20,518 EXPENDITURES FUND BALANCES Projected Revenue Total Estimated Expenditures $– – – – – – – $(5,836) (78,498) (995) (3,494) (24,289) (1,200) (7,122) $43,739 19,495 19,745 36,987 20,342 1,000 19,419 $(49,575) (97,993) (20,740) (40,481) (44,631) (2,200) (26,541) $133,797 198,700 85,000 120,500 177,000 16,100 147,400 $84,222 100,707 64,260 80,019 132,369 13,900 120,859 – – – – – – 2,300 – – – – – – 4,785 1,133 (3,614) (14,508) (523) (6,474) 3,392 (22,158) 363 (671) (8,642) (25,354) 296 4,475 4,986 1,439 3,020 11,931 6,456 15,629 6,747 10,459 1,380 5,330 6,890 217 310 (3,853) (5,053) (17,528) (12,454) (12,930) (12,237) (28,905) (10,096) (2,051) (13,972) (32,244) 79 – 4,775 5,500 18,500 14,560 13,300 14,500 30,300 10,800 2,300 15,470 34,500 – 310 922 447 972 2,106 370 2,263 1,395 704 249 1,498 2,256 79 – 53 – 53 – – – – – – 53 28 11 4 261 2,349 25 311 – – (2,296) 3 (300) 4 261 2,300 – 300 – – 4 3 – 4 261 2,420,943 19,727 45,883 239,978 (207,961) (133,925) (84,281) 264,913 19,727 32,465 176,591 239,417 267,304 28,222 2,156,030 – 13,418 63,387 (447,378) (401,229) (112,503) 436,045 – 75,000 – 715,000 850,000 116,480 2,592,075 – 88,418 63,387 267,622 448,771 3,977 187,496 450,125 110,964 8,773 82,692 79,413 2,302 6,334 306,014 23,664 138,088 83,473 95,942 3,023 82,646 19,788 1,068 3,750 15,064 2,222 49,408 366,652 15,022 5,750 46 59,625 1,234 2,584 290,950 21,442 – – – – – – – – – – 49,408 366,652 15,022 5,750 46 59,625 1,234 2,584 290,950 21,442 $3,238,127 $4,887,195 2,747,092 – – – – – – – 395,827 95,942 – 82,646 – 1,067 3,750 16,000 – $3,344,624 $3,365,142 $1,716,074 53 $1,649,068 *Includes bond proceeds and funds which pass through bond funds such as grants, land sales and other agency and private participation. 170 Available For Sale Funds Available Beyond 6/08 Ending Fund Balances SCHEDULE 1: RESOURCES AND EXPENDITURES BY FUND (In Thousands of Dollars) Resources Beginning Fund Balances Revenue Recovery General Parks and Recreation Library Cable Communications $70,921 – – – $255,922 15,214 1,726 10,018 $1,500 – – – Total General Funds $70,921 $282,8801 Expenditures Fund Transfer To From Total Debt Service Restricted Fund Total Balances Operating Capital $886,435 100,818 37,836 – $176,710 $1,038,068 $1,023,257 – 116,032 116,032 – 39,562 39,267 4,382 5,636 5,636 $14,811 – 295 – $– $1,038,068 – 116,032 – 39,562 – 5,636 $– – – – $1,500 $1,025,089 $181,092 $1,199,298 $1,184,192 $15,106 $– $1,199,298 $– 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 $– $1,175,163 1,245 5 $– – $– $1,175,163 24,057 333 $– 24,974 $– 24,955 $– – $– – $– 24,955 $– 19 – 5 – 8,591 119 8,477 8,350 – – 8,350 127 1,826 201 – 1,718 24 3,721 1,200 – – 1,200 2,521 2,382 – – 16,230 – 18,612 18,612 – – 18,612 – 1,868 87,775 188,852 511 28,232 9,825 21,967 29,869 3 – 2,600 36,272 3,174 58,800 750 550 136,058 6,880 – 100 500 – – – – 700 – 9,672 34,364 137,456 – – 19,927 18,193 – – – 400 41,520 – 4,459 – 631 – – 11,540 124,439 321,560 3,685 82,573 30,502 40,079 166,627 6,883 11,325 186 131,204 3,277 73,182 101 1,774 37,282 6,883 – 119,116 42,920 – 25 28,415 – 96,358 – – – 326 – – – 9,177 31,246 – 11,325 119,302 174,450 3,277 73,207 28,516 10,951 164,886 6,883 215 5,137 147,110 408 9,366 1,986 29,128 1,741 – (8,048) 7,121 24,936 2,580 – – – – – – 16,888 9,701 15,061 80 15,428 6,547 – – 100 164,127 – – – 164,227 – – 164,127 164,127 100 2,604 – 1,190 – – – – 71,979 – – 3,794 71,979 2,367 – – – – 71,979 2,367 71,979 1,427 – 22,416 40,169 8,358 196,897 – – – – – – 30,774 237,066 14,571 183,674 1,363 21,482 – 2,141 15,934 207,297 14,840 29,769 $438,717 $1,818,546 $1,300 $342,187 $1,222,649 $1,378,101 $534,084 $331,654 30,489 (13,601) 6,627 3,074 $278,996 $1,144,734 $233,367 Enterprise Funds: Aviation Water Wastewater Solid Waste Convention Center Golf Course $114,249 158,037 85,998 33,709 39,580 (2,516) $322,973 333,327 203,069 126,929 10,968 8,557 $– – _ $– – _ – – – – 69,881 – Total Enterprise Funds $429,057 $1,005,823 $– $69,881 GRAND TOTAL $938,695 $3,107,249 $6,481 17,368 9,891 7,098 3,423 416 $430,741 473,996 279,176 153,540 117,006 5,625 $44,677 $1,460,084 $217,264 207,471 105,921 116,886 48,754 9,141 $34,320 68,678 45,652 5,674 39,830 – $86,290 114,177 79,963 20,269 18,586 851 $337,874 390,326 231,536 142,829 107,170 9,992 $92,867 83,670 47,640 10,711 9,836 (4,367) $705,437 $194,154 $320,136 $1,219,727 $240,357 $2,800 $1,437,157 $1,448,418 $4,037,483 $2,423,713 $540,914 $599,132 $3,563,759 $473,724 General fund sales tax revenue is reflected as a transfer from the excise tax fund. The total transfer is $835.1 million, and is included in the General Funds revenue total of $1,118.0 million shown on Schedule 2. 1 179 2007-08 Capital Improvement Program Organizational Chart 2007-08 CAPITAL IMPROVEMENT PROGRAM $2,256,988,000 BOND FUNDS $1,271,010,000 OTHER CAPITAL $445,064,000 OPERATING FUNDS $540,914,000 2006 G.O. Various Purpose $160,727,000 Aviation $258,089,000 Impact Fees $138,088,000 Other Cities’ Participation $95,942,000 General Fund $15,106,000 Parks and Preserves $119,116,000 2001 G.O. Various Purpose $78,742,000 Convention Center $19,727,000 Passenger Facility Charge $83,473,000 Capital Grants $82,646,000 Transit 2000 $42,920,000 Capital Construction $28,415,000 1989 G.O. Historic Preservation $217,000 Solid Waste $32,465,000 Other Agency and Private Participation $24,606,000 Solid Waste Remediation $3,023,000 Arizona Highway User Revenue $96,358,000 Public Transit $15,428,000 1988 G.O. Various Purpose $2,684,000 Transit 2000 $176,591,000 Capital Reserves $15,064,000 Other Capital $2,222,000 Development Services $25,000 Other Restricted $1,363,000 1981 Revenue Various Purpose $6,825,000 Wastewater $239,417,000 Community Reinvestment $6,547,000 Grant Funds $21,482,000 Other Bonds $28,222,000 Water $267,304,000 Aviation $34,320,000 Wastewater $45,652,000 Water $68,678,000 Convention Center $39,830,000 Solid Waste $5,674,000 171 Operating Costs for New Capital Facilities Capital 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 assets. These costs should not be funded with bonded debt and must be paid from the city's annual operating funds. New Facilities Funding and Their 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 the funds invested. This program provides for energy efficient retrofits, energy efficient design and metering for efficient operations. Identifying Operating Costs Each fall, departments are asked to review all capital projects, their estimated completion dates and any costs associated with operating new facilities and systems. These costs are reviewed jointly by the Budget and Research, and Engineering and Architectural Services departments. The 2007-08 budget includes $6.9 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 2007-08 budget, along with the full-year operating and maintenance costs for the 2008-09 fiscal year and the source of funds that would be used for these costs. 173 OPERATING COSTS FOR NEW CAPITAL FACILITIES # of FTEs 2007-08 Costs 2008-09 Costs Information Technology System security/ network management 0.0 Provide support costs for technology improvements to system security and network management. $66,000 $66,000 Bi-annual maintenance program for PRWN 2.0 Implement a bi-annual maintenance program for the Phoenix Regional Wireless Network (PRWN) and handle new service activities, upgrades and equipment modifications. 253,000 144,000 Prepare for the opening of a new regional library that will provide services to an underserved area of north Phoenix. 261,000 1,704,000 75,000 75,000 Library Agave Regional Library Parks and Recreation Enchanted Island at Encanto Park 1.0 Maintain restorations that enhance the attractiveness of the park. 10.0 Deter illegal dumping and other activities that frequently occur in undeveloped preserves. This should result in the reduced maintenance cost over the long term. 408,000 529,000 Rio Salado operations and maintenance 4.0 Maintain an additional phase of construction of the Rio Salado Habitat Restoration Project that provides additional amenities, including an equestrian trail and staging area for visitors to explore a restored riparian habitat. 238,000 238,000 Trail crew 4.0 Provide for maintenance and improvements of 30 miles of new trails and trailheads in the mountain preserves including the establishment of a trail system in the Sonoran preserves. 207,000 207,000 Park at 71st Avenue and Elwood Street 3.0 Maintain a 28.1-acre park that will provide on-site recreation programming and supervision to this growing new community. 263,000 173,000 Reach 11 Field of Dreams baseball complex 8.0 Maintain a 20-acre baseball complex which will include one of the top facilities in the nation for inclusive, adaptive baseball programs for youth and adults with disabilities. 722,000 546,000 New street landscape maintenance 6.0 Provide for the maintenance of 20 acres of new street landscaping. 557,000 329,000 New undeveloped flatland properties 2.0 Provide for the maintenance and security of 89 acres of new land acquired for future park development. 197,000 121,000 New undeveloped property in the mountain park preserves 174 28.0 OPERATING COSTS FOR NEW CAPITAL FACILITIES (continued) # of FTEs 2007-08 Costs 2008-09 Costs Police Police crime lab* 3.0 Maintain and operate the newly completed crime $1,027,000 lab to expand the department’s capacity to identify, arrest and convict criminals. Pecos Park police station 2.0 Provide support staff to assume daily administrative functions, enhancing police-related activities at this community center-based substation. Public Transit West Maintenance Facility** Transit furniture maintenance 20.0 $1,300,000 134,000 143,000 Maintain and operate this new facility that provides 1,661,000 increased maintenance capacity for expanding bus services. 2,010,000 0.0 Provide maintenance for the expanding number of bus stops. 485,000 485,000 Water Services Security systems technical support 1.0 Provide for the administration and maintenance of Capital Improvement Program-funded security system upgrades occurring at multiple sites. 196,000 164,000 Lift Stations 0.0 Provide utility costs for the operation of two lift stations that will carry used water to wastewater treatment plants. 34,000 109,000 Expansion at 91st Avenue Treatment Plant 1.0 Provide adequate supervision and operations management at new treatment facility. 61,000 75,000 Process control network 0.0 Enable electronic security systems at treatment plants to be monitored from a central location and allow plant operators to access process control information while in the field. Both will improve operational efficiency. 130,000 343,000 $6,975,000 $8,761,000 4,408,000 2,146,000 326,000 95,000 5,575,000 2,495,000 507,000 184,000 $6,975,000 $8,761,000 Net Total Costs Source of Funds General Transit 2000 Water Wastewater Total Source of Funds *Positions will be assigned to the Public Works Department. **16.0 positions to be assigned to the Police Department and 4.0 positions to be assigned to the Public Works Department. 175 SCHEDULE 2: REVENUES BY MAJOR SOURCE (In Thousands of Dollars) Increase/(Decrease) From 2006-07 Estimate 2005-06 Actuals 2006-07 Estimate 2007-08 Budget $408,485 $440,163 $470,411 State Sales Tax 141,194 144,348 154,234 9,886 6.8% State Income Tax 138,313 167,579 207,826 40,247 24.0% 63,108 60,584 63,007 2,423 4.0% $342,615 $372,511 $425,067 $52,556 14.1% $89,721 $95,660 $102,317 $6,657 7.0% Licenses & Permits 2,486 2,580 2,603 23 0.9% Cable Communications 8,662 9,850 10,018 168 1.7% 20,726 22,515 25,573 3,058 13.6% Revenue Source Amount Percent $30,248 6.9% GENERAL FUNDS Local Sales Taxes and Related Fees State-Shared Revenues Vehicle License Tax Subtotal Primary Property Tax User Fees/Other Revenue Fines & Forfeitures Court Default Fee Engineering & Architectural Services Fire 810 864 54 6.7% 2,600 1,400 (1,200) -46.2% 28,664 32,390 37,407 5,017 15.5% Hazardous Materials Inspection Fees 1,419 1,325 1,325 – 0.0% Library Fees 1,481 1,629 1,726 97 6.0% Parks & Recreation 4,564 5,040 5,036 (4) -0.1% 0.0% Planning 1,952 1,683 1,683 – 12,415 13,773 14,004 231 1.7% Street Transportation 2,429 2,470 2,472 2 0.1% Other Service Charges 14,340 15,551 14,680 (871) -5.6% 2,115 1,427 1,368 (59) -4.1% $104,797 $113,643 $120,159 $6,516 5.7% $945,618 $1,021,977 $1,117,954 $95,977 9.4% Police Others Subtotal Total General Funds 180 850 2,694 SCHEDULE 2: REVENUES BY MAJOR SOURCE (Continued) (In Thousands of Dollars) Revenue Source Increase/(Decrease) From 2006-07 Estimate 2005-06 Actuals 2006-07 Estimate 2007-08 Budget $29,894 $32,133 $34,577 $2,444 7.6% 20,330 23,223 25,902 2,679 11.5% 7.1% Amount Percent SPECIAL REVENUE FUNDS Neighborhood Protection Public Safety Enhancement Parks and Preserves Transit 2000 Court Awards 31,867 34,511 36,964 2,453 156,167 163,015 173,728 10,713 6.6% 4,217 5,584 3,174 (2,410) -43.2% Development Services 59,220 56,100 58,800 2,700 4.8% Capital Construction 19,562 19,720 20,677 957 4.9% 10.2% Sports Facilities 15,808 17,005 18,743 1,738 Arizona Highway User Revenue 127,835 130,967 136,058 5,091 3.9% Local Transportation Assistance 7,034 6,969 6,880 (89) -1.3% Regional Transit Revenues 10,409 27,507 24,936 (2,571) -9.3% Community Reinvestment 3,133 1,893 2,580 687 36.3% 108,652 120,209 164,127 43,918 36.5% 2,934 1,980 1,190 (790) -39.9% 15,625 12,127 8,358 (3,769) -31.1% Public Housing Grants 68,376 68,261 66,567 (1,694) -2.5% Human Services Grants 44,224 36,026 34,256 (1,770) -4.9% Community Development 18,225 16,195 37,634 21,439 132.4% Criminal Justice Grants Secondary Property Tax Impact Fee Program Administration Other Restricted Revenues Grants 12,491 18,266 14,767 (3,499) -19.2% Public Transit Grants 7,853 9,384 13,046 3,662 39.0% HOPE VI Grant 9,517 8,587 8,325 (262) -3.1% 14,204 25,214 22,302 (2,912) -11.5% $174,890 $181,933 $196,897 $14,964 8.2% $787,577 $834,876 $913,591 $78,715 9.4% Aviation 290,127 314,175 322,973 8,798 2.8% Water System 297,711 304,205 333,327 29,122 9.6% Other Grants Subtotal - Grants Subtotal Special Revenue Funds ENTERPRISE FUNDS Wastewater System 177,169 200,065 203,069 3,004 1.5% Solid Waste 118,670 123,913 126,929 3,016 2.4% 67,784 74,287 80,849 6,562 8.8% 6,793 8,317 8,557 240 2.9% $958,254 $1,024,962 $1,075,704 $50,742 5.0% $2,691,449 $2,881,815 $3,107,249 $225,434 7.8% Convention Center Golf Courses Subtotal Enterprise Funds GRAND TOTAL 181 SCHEDULE 3: EXPENDITURES BY DEPARTMENT (In Thousands of Dollars) Percent Change from 2006-07 Estimate (5.0)% 8.8% (0.2)% 15.0% 16.1% 11.1% 10.0% 9.7% 8.4% 6.5% – 5.6% 100+% (19.3)% 9.2% 12.2% 100+% $2,388 4,744 1,214 2,071 1,512 3,522 3,353 4,229 17,477 228 – 4,900 7,126 7,413 27,313 4,597 573 6.8% 3.8% 7.4% 11.8% 8.9% (1.5)% 10.8% 5.4% 6.5% 15.7% – 14.9% (6.7)% 14.0% 8.5% 11.3% 100+% $86,368 14.1% $92,660 7.3% $– 421,175 217,931 807 1,073 $138 469,985 244,897 808 852 – 11.6% 12.4% 0.1% (20.6)% $391 521,174 273,282 839 1,003 100+% 10.9% 11.6% 3.8% 17.7% $640,986 $716,680 11.8% $796,689 11.2% $36,053 16,131 3,975 $38,982 17,220 4,386 8.1% 6.8% 10.3% $43,049 18,643 4,753 10.4% 8.3% 8.4% $56,159 $60,588 7.9% $66,445 9.7% Transportation Street Transportation Aviation ** Public Transit $58,557 165,636 158,457 $65,349 195,572 184,539 11.6% 18.1% 16.5% $68,811 202,962 213,275 5.3% 3.8% 15.6% Total Transportation $382,650 $445,460 16.4% $485,048 8.9% 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 Total General Government Public Safety Office of Public Safety Manager Police Fire Emergency Management Family Advocacy Center Total Public Safety Criminal Justice Municipal Court City Prosecutor Public Defender Total Criminal Justice 182 Percent Change from 2005-06 Actual 2007-08 Budget 2005-06 Actual 2006-07 Estimate $2,354 4,202 1,132 1,611 1,196 3,217 2,751 3,658 15,152 185 – 4,039 1,943 8,059 23,047 3,682 (517) $2,237 4,571 1,130 1,853 1,389 3,574 3,026 4,012 16,418 197 – 4,265 7,637 6,502 25,177 4,130 250 $75,711 SCHEDULE 3: EXPENDITURES BY DEPARTMENT (Continued) (In Thousands of Dollars) Program 2005-06 Actual 2006-07 Estimate Percent Change from 2005-06 Actual 2007-08 Budget Percent Change from 2006-07 Estimate Community Development Development Services Planning Business Customer Service Center Housing Community and Economic Development Neighborhood Services Hope VI Project Downtown Development $47,865 7,144 503 60,390 19,594 30,138 – 3,767 $54,105 7,534 638 59,358 20,261 31,790 21 4,183 13.0% 5.5% 26.8% (1.7)% 3.4% 5.5% – 11.0% $61,186 8,290 709 80,304 20,120 51,365 500 4,643 13.1% 10.0% 11.1% 35.3% (0.7)% 61.6% 100+% 11.0% $169,401 $177,890 5.0% $227,117 27.7% $100,194 33,211 6,423 34,356 62,316 915 144 511 2,312 540 $112,583 36,268 7,903 40,486 64,757 1,075 154 605 2,193 606 12.4% 9.2% 23.0% 17.8% 3.9% 17.5% 6.9% 18.4% (5.1)% 12.2% $124,479 40,606 8,981 48,209 66,525 1,160 163 749 2,225 690 10.6% 12.0% 13.6% 19.1% 2.7% 7.9% 5.8% 23.8% 1.5% 13.9% $240,922 $266,630 10.7% $293,787 10.2% $207,827 83,670 23,697 1,652 $237,059 101,064 24,054 1,856 14.1% 20.8% 1.5% 12.3% $265,089 114,031 27,834 2,292 11.8% 12.8% 15.7% 23.5% $316,846 $364,033 14.9% $409,246 12.4% $– $– –% $124,700 –% $1,882,675 $2,117,649 12.5% $2,495,692 17.9% 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 Community Enrichment Environmental Services Water Solid Waste Management Public Works Environmental Programs Total Environmental Services Contingencies GRAND TOTAL * For purposes of this schedule, department budget allocations include Grants and City Improvement debt service payments. ** Aviation 2005-06 totals in this schedule include Customer Facility Charges Funds (CFCs). Aviation Comprehensive Annual Financial Statement totals for 2005-06 did not include CFCs. 183 SCHEDULE 4: EXPENDITURES BY DEPARTMENT BY SOURCE OF FUNDS INCLUDING BUDGET CHANGES (In Thousands of Dollars) Base Budget Changes $2,388 4,744 1,214 2,071 1,512 3,522 3,253 4,138 17,473 228 – 4,793 7,122 7,411 27,158 4,517 572 Total General Government Public Safety Office of Public Safety Manager Police Fire Emergency Management Family Advocacy Center Total Enterprise Funds $– – – – – – 100 91 4 – – 107 4 2 155 80 1 $2,388 4,744 1,214 2,071 1,512 3,522 3,353 4,229 17,477 228 – 4,900 7,126 7,413 27,313 4,597 573 $2,365 4,744 1,214 1,724 1,512 3,514 3,353 3,846 16,157 228 – 4,848 5,313 7,248 25,497 4,101 480 $– – – 347 – – – – – – – – 457 – 1,616 – – $23 – – – – 8 – 383 1,320 – – 52 1,356 165 200 496 93 $92,116 $544 $92,660 $86,144 $2,420 $4,096 $391 515,758 270,632 838 953 $– 5,416 2,650 1 50 $391 521,174 273,282 839 1,003 $391 452,488 244,403 375 940 $– 782 – – – $– 67,904 28,879 464 63 $788,572 $8,117 $796,689 $698,597 $782 $97,310 $42,803 18,540 4,753 $246 103 – $43,049 18,643 4,753 $34,537 18,067 4,753 $– – – $8,512 576 – $66,096 $349 $66,445 $57,357 $– $9,088 Transportation Street Transportation Aviation Public Transit $68,498 202,662 193,189 $313 300 20,086 $68,811 202,962 213,275 $31,029 – 27,146 $– 202,962 – $37,782 – 186,129 Total Transportation $464,349 $20,699 $485,048 $58,175 $202,962 $223,911 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 Total Public Safety Criminal Justice Municipal Court City Prosecutor Public Defender Total Criminal Justice 184 Special Revenue Funds* General Funds SCHEDULE 4: EXPENDITURES BY DEPARTMENT BY SOURCE OF FUNDS INCLUDING BUDGET CHANGES (Continued) (In Thousands of Dollars) Total Enterprise Funds $429 111 – 1 1 815 500 – $61,186 8,290 709 80,304 20,120 51,365 500 4,643 $– 7,503 349 189 3,903 17,431 500 4,101 $– – 360 – 759 – – 432 $61,186 787 – 80,115 15,458 33,934 – 110 $225,260 $1,857 $227,117 $33,976 $1,551 $191,590 $120,372 39,918 8,981 46,670 65,475 1,160 163 688 2,200 642 $4,107 688 – 1,539 1,050 – – 61 25 48 $124,479 40,606 8,981 48,209 66,525 1,160 163 749 2,225 690 $116,033 39,267 – 2,622 30,001 866 163 749 1,389 690 $600 – 8,981 41,914 250 – – – – – $7,846 1,339 – 3,673 36,274 294 – – 836 – $286,269 $7,518 $293,787 $191,780 $51,745 $50,262 $262,818 110,221 27,517 2,194 $2,271 3,810 317 98 $265,089 114,031 27,834 2,292 $– 1,145 21,119 1,669 $264,975 112,886 – 246 $114 – 6,715 377 Total Environmental Services $402,750 $6,496 $409,246 $23,933 $378,107 $7,206 Contingencies $124,700 $– $124,700 $34,230 $67,870 $22,600 GRAND TOTAL $2,450,112 $45,580 $2,495,692 $1,184,192 $705,437 $606,063 Community Development Development Services Planning Business Customer Service Center Housing Community and Economic Development Neighborhood Services Hope VI Project Downtown Development 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 Community Enrichment Environmental Services Water Services Solid Waste Management Public Works Environmental Programs Base $60,757 8,179 709 80,303 20,119 50,550 – 4,643 Special Revenue Funds* General Funds Program Budget Changes *For purposes of this schedule, department budget allocations include Grants and City Improvement debt service payments. 185 SCHEDULE 5: DEBT SERVICE EXPENDITURES BY PROGRAM, SOURCE OF FUNDS AND TYPE OF EXPENDITURE * (In Thousands of Dollars) Program 2005-06 Actual 2006-07 Estimate 2007-08 Budget Aviation Cultural Facilities Economic 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 Light Refinancing Wastewater Water Early Redemption2 General Government Non-Profit Corporation Bonds Bond Issuance Costs $ 73,442 6,507 6,519 1351 3,853 1,079 579 2,301 1,322 5,031 2,602 844 31,247 2,379 5,147 17,883 20,423 5,2051 3,591 12,124 29,275 17,797 24,087 681 48,762 81,294 19,215 23,807 1,990 $ 232,984 7,294 9,386 269 1,932 1491 849 618 328 6,274 2,369 4,075 31,242 631 1,883 17,867 18,590 4,511 2,568 1,334 40,045 21,634 21,912 681 62,900 90,828 47,244 28,953 4,665 $ 87,140 8,416 9,177 553 3,706 1491 851 947 614 6,678 3,749 10,214 31,246 631 3,300 19,399 18,586 4,984 3,970 1,714 41,912 20,269 20,537 88 79,963 114,177 75,597 31,984 31,037 $ 448,508 $ 662,834 $ 631,020 $ 172,810 272,209 3,489 $ 375,127 281,263 6,444 $ 265,427 332,781 32,812 $ 448,508 $ 662,834 $631,020 Total Program Type of Expenditure Principal Interest Other Total Debt Service Expenditures 186 SCHEDULE 5: DEBT SERVICE EXPENDITURES BY PROGRAM, SOURCE OF FUNDS AND TYPE OF EXPENDITURE * (Continued) (In Thousands of Dollars) 2005-06 Actual 2006-07 Estimate 2007-08 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 $ 112,829 327 6,519 31,247 $ 120,209 326 9,386 31,242 $ 164,127 326 9,177 31,246 23,854 – 27,353 215 686 2,138 61,460 81,294 48,762 17,797 20,423 579 28,953 _ 31,984 _ 38,126 – – 2,141 71,289 90,828 62,901 21,635 18,590 849 39,995 – _ 2,141 86,290 114,177 79,963 20,269 18,586 851 Subtotal Operating Funds $ 435,483 $ 496,475 $ 599,132 122 11,861 180 161,515 933 63 329 – 109 31 (520) 97 61 315 899 2,900 – 79 210 200 8 ,825 – _ – 8,860 10,200 Subtotal Capital Funds $ 13,025 $ 166,359 $ 31,888 Total Source of Funds $ 448,508 $ 662,834 $ 631,020 Program SOURCE OF FUNDS Operating Funds: Capital Funds: Aviation Bonds Passenger Facility Charge Convention Center Bonds Non-Profit Corporation Bonds 2001 Bonds 2006 Bonds Public Transit Bonds Solid Waste Wastewater CIC Bonds Water CIC Bonds 367 1,106 2,530 _ * Program costs are a combination of principal and interest unless otherwise noted. 1 Interest only. 2 Principal only. 187 SCHEDULE 6: CAPITAL IMPROVEMENT PROGRAM FINANCED FROM OPERATING FUNDS (In Thousands of Dollars) Program Arts and Cultural Facilities Aviation Economic Development Energy Conservation Facilities Management 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 Street Transportation and Drainage Wastewater Water Total 188 2005-06 Actual 2006-07 Estimate 2007-08 Budget $517 33,546 3,614 2,449 2,691 (5) 10 $3,152 26,838 930 1,175 3,832 – 100 $850 34,348 6,210 1,575 23,440 – 129 10,507 67 4,588 93 1,004 23,277 14,150 45,865 2,375 76,309 27,025 33,949 10,694 50 3,300 204 609 6,958 34,025 28,516 2,200 76,104 31,038 47,346 9,325 2,400 – 295 2,539 119,858 40,283 66,643 5,284 114,203 45,152 68,380 $282,031 $277,071 $540,914 SCHEDULE 6: CAPITAL IMPROVEMENT PROGRAM FINANCED FROM OPERATING FUNDS (Continued) (In Thousands of Dollars) 2005-06 Actual 2006-07 Estimate 2007-08 Budget General Funds: General Library $3,434 93 $4,009 204 $14,811 295 Total General Funds $3,527 $4,213 $15,106 $20,599 29,736 – $6,838 12,714 – $119,116 42,920 25 19,682 62,865 13,687 3,020 1,711 10,244 1,241 (96) 17,506 59,539 13,302 930 1,608 8,577 3,402 4,359 28,415 96,358 15,428 6,547 3,672 8,325 1,363 9,485 $162,689 $128,775 $331,654 Enterprise Funds: Aviation Water Wastewater Solid Waste Convention Center $33,575 35,793 28,179 2,503 15,765 $26,914 47,163 31,648 2,469 35,889 $34,320 68,678 45,652 5,674 39,830 Total Enterprise Funds $115,815 $144,083 $194,154 Total Operating Funds $282,031 $277,071 $540,914 Program SOURCE OF FUNDS Special Revenue 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 Total Special Revenue Funds 189 SCHEDULE 7: NET INTERFUND TRANSFERS TO THE GENERAL FUND (In Thousands of Dollars) 2007-08 2005-06 Actual 2006-07 Estimate Budget Increase/ (Decrease) Aviation Central Service Cost Allocation $6,121 $6,188 $6,481 $293 Water Funds Central Service Cost Allocation In Lieu Property Taxes Total 7,068 8,964 16,032 7,331 9,363 16,694 7,677 9,691 17,368 346 328 674 Wastewater Funds Central Service Cost Allocation In Lieu Property Taxes Total 2,238 6,795 9,033 2,409 7,119 9,528 2,523 7,368 9,891 114 249 363 Solid Waste Central Service Cost Allocation In Lieu Property Taxes Total 4,136 883 5,019 4,539 1,069 5,608 4,754 1,106 5,860 215 37 252 Convention Center Central Service Cost Allocation 2,095 2,194 2,298 104 366 397 416 19 $38,666 $40,609 $42,314 $1,705 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) 2007-08 2005-06 Actual 2006-07 Estimate Budget Increase/ (Decrease) $690,478 $754,670 $835,074 $80,404 3,664 4,258 4,459 201 Sports Facilities - Central Service Costs Central Service Cost Allocation Phoenix Union Parking Maintenance Total 155 75 230 121 77 198 127 79 206 6 2 8 Public Housing In Lieu Property Taxes 301 303 – (303) – 113 – (113) Total from Special Revenue Funds $694,673 $759,542 $839,739 $80,197 Total Transfers to the General Fund $733,339 $800,151 $882,053 $81,902 $– $781 $– $(781) 3,575 4,650 6,072 1,422 23,778 28,953 31,984 3,031 $27,353 $34,384 $38,056 $3,672 $705,986 $765,767 $843,997 $78,230 Special Revenue Funds Excise Transfer to General Fund Development Services Central Service Cost Allocation Parking Trust Fund Transfers from the General Fund Transfer to Special Risk 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 June 30, 2006 Authorized July 1, 2007 Authorized Changes June 30, 2008 Authorized 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 20.0 55.0 6.0 23.0 6.3 31.0 38.5 38.0 116.4 2.0 16.0 252.0 214.0 130.2 316.5 33.0 116.1 0.5 – – – – – – 1.0 – – – 3.0 2.0 – 3.0 1.0 2.0 20.5 55.0 6.0 23.0 6.3 31.0 38.5 39.0 116.4 2.0 16.0 255.0 216.0 130.2 319.5 34.0 118.1 Total General Government 1,397.0 1,414.0 12.5 1,426.5 Public Safety Police Fire Office of the Public Safety Manager Emergency Management Family Advocacy Center 4,168.7 1,886.2 0.0 6.5 7.0 4,371.7 2,008.2 2.0 6.5 7.0 68.0 32.0 – – 1.0 4,439.7 2,040.2 2.0 6.5 8.0 Total Public Safety 6,068.4 6,395.4 101.0 6,496.4 Criminal Justice Municipal Court Public Defender 384.9 9.0 384.9 9.0 4.0 – 388.9 9.0 Total Criminal Justice 393.9 393.9 4.0 397.9 Transportation Street Transportation Aviation Public Transit 776.7 803.7 92.0 781.0 853.7 99.0 6.0 – 28.0 787.0 853.7 127.0 Total Transportation 1,672.4 1,733.7 34.0 1,767.7 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 192 SCHEDULE 8: PERSONNEL SCHEDULE BY DEPARTMENT Number of Full-Time Equivalent Positions (Continued) Program Community Development Development Services Planning Business Customer Service Center Housing Community and Economic Development Downtown Development Office Neighborhood Services HOPE VI Project Total Community Development 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 Total Community Enrichment Environmental Services Water Services Solid Waste Management Public Works Environmental Programs Total Environmental Services GRAND TOTAL June 30, 2006 Authorized July 1, 2007 Authorized Changes June 30, 2008 Authorized 523.0 74.9 4.0 145.7 114.0 16.0 237.0 10.5 570.0 75.9 4.0 148.7 115.0 16.0 235.0 11.5 6.0 1.0 – – 1.0 – 6.0 (2.0) 576.0 76.9 4.0 148.7 116.0 16.0 241.0 9.5 1,125.1 1,176.1 12.0 1,188.1 1,530.4 420.0 140.0 209.4 493.0 5.8 1.0 6.0 12.5 5.0 1,613.9 436.5 140.0 213.4 501.2 7.8 1.0 6.0 12.5 5.0 78.7 37.5 – 16.5 4.2 0.6 – 2.0 1.0 1.0 1,692.6 474.0 140.0 229.9 505.4 8.4 1.0 8.0 13.5 6.0 2,823.1 2,937.3 141.5 3,078.8 1,416.1 519.0 498.0 15.0 1,415.1 531.0 506.0 15.0 32.0 19.0 16.0 1.0 1,447.1 550.0 522.0 16.0 2,448.1 2,467.1 68.0 2,535.1 15,928.0 16,517.5 373.0 16,890.5 193 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 Capital Outlay – Items that cost more than 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. $5,000 and have a useful life of more than two years. 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 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 by 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. 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. 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. Expenditure Limit – See State Expenditure interest on an obligation resulting from the issuance of bonds. Depreciation – The decline in the value of 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. 196 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. GAAP – See Generally Accepted Accounting Estimate – The most recent prediction of 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. Debt Service – Payment of principal and 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. Limit Fire Neighborhood Protection Fund – 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. 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 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. 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. 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 Operating Funds – Resources derived from continuing revenue sources used to finance ongoing operating expenditures and “pay-as-yougo” capital projects. Police Neighborhood Protection Fund – This fund is the Police portion of a voter-approved 0.1 percent sales tax increase approved by the voters in October 1993. Ordinance – A formal legislative enactment by Preliminary Budget – A balanced budget 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. 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. 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. Outstanding Bonds – Bonds not yet retired through principal and interest payments. Improvement Districts – Special assessment Parks and Preserves Fund – This fund is districts formed by property owners who desire and are willing to pay for mutually enjoyed improvements such as streets, sidewalks, sewers and lighting. 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. In Lieu Property Taxes (or In Lieu 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. 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. Objective – Desired output-oriented accomplishments that can be measured and achieved within a given time frame, and advance the activity and organization toward a corresponding goal. Pay-As-You-Go Capital Projects – Capital 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. Primary Property Tax – A tax levy that can be used to support any public expense. 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. 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. PLT – See Privilege License Tax. 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. 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.