City of Phoenix Council Members and District Boundaries Thelda Williams 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 Maria Baier 602-262-7441 council.district.3 @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 Michael Nowakowski 602-262-7492 council.district.7@phoenix.gov iii City of Phoenix Mayor and City Council Phil Gordon Mayor David Krietor Deputy City Manager Rick Naimark Deputy City Manager Peggy Neely Vice Mayor District 2 Ed Zuercher Deputy City Manager Thelda Williams District 1 Jack F. Harris Public Safety Manager Maria Baier District 3 Tammy Perkins Executive Assistant to the City Manager Tom Simplot District 4 Lisa Takata Executive Assistant to the City Manager Claude Mattox District 5 Karen Peters Government Relations Director Mark E. Leonard Public Works Director and Acting Development Services Director Lionel Lyons Equal Opportunity Director Toni Maccarone Public Information Director Donald Maxwell Community and Economic Development Director Jerome S. Miller Neighborhood Services Director David V. Modeer Water Services Director Danny Murphy Aviation Director Greg Stanton District 6 Department Heads Michael Nowakowski District 7 Wylie Bearup Interim Street Transportation Director Michael Johnson District 8 John Chan Downtown Development Director Mayor’s Office Debbie Cotton Public Transit Director Ruth Osuna Chief of Staff Kim Dorney Housing Director City Council Office Toni Garvey City Librarian Cynthia Seelhammer Chief of Staff Cathleen Gleason Budget and Research Director Management Staff Jay Green Phoenix Convention Center Director Frank Fairbanks City Manager Sara L. Hensley Parks and Recreation Director Alton Washington Assistant City Manager Gloria Hurtado Human Services Director Tom Callow Deputy City Manager Robert Khan Fire Chief Mario Paniagua City Clerk Janet Smith Personnel Director Randy Spenla City Auditor Debra Stark Planning Director Charles T. Thompson, Sr. Chief Information Officer Gary Verburg City Attorney Bob Wingenroth Finance Director Tauny Woo Acting City Engineer Chief Presiding Judge Roxanne K. Song Ong David Cavazos Deputy City Manager iv City of Phoenix Organizational Chart PUBLIC MAYOR AND CITY COUNCIL CITY MANAGER City Auditor Finance Budget & Research Government Relations MUNICIPAL COURT ASSISTANT CITY MANAGER EXECUTIVE ASSISTANT TO THE CITY MANAGER DEPUTY CITY MANAGER DEPUTY CITY MANAGER DEPUTY CITY MANAGER City Clerk Engineering & Architecture ASU Downtown Aviation Family Advocacy Light Rail Project Business Customer Service Personnel Committee Public Transit Sister Cities Street Tramsportation PUBLIC SAFETY MANAGER DEPUTY CITY MANAGER DEPUTY CITY MANAGER Environmental Programs Community Preparedness Bio-Medical Campus Arts & Culture Convention Center Fire Criminal Justice Coordinator Human Services Equal Opportunity Development Services Downtown Development Office Law Police Library Housing Historic Preservation Education Personnel Parks & Recreation HOPE VI Information Technology Economic Development Public Defender Liaison MWSBE Program Planning International Economic Development Public Works Neighborhood Services Water Public Information Rio Salado State Land Department Liaison Water Strategy State Fairground Relocation State Lands Preserve Purchases Westside Revitalization Area v Budget Document Overview This overview outlines the 2008-09 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 602-262-4800. 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 2008-13 Capital Improvement Program provides Phoenix’s planned construction program by project and detailed sources of funds. A more detailed description of the 2008-09 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 key demographic, financial and infrastructure profile measures. Estimates or projections are provided for 2007-08 and 2008-09 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 2008-13 Capital Improvement Program. SCHEDULES 2008-09 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 2008-09 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. 2008-09 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 602-262-4800. 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, 2007. 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 2008-09 Annual Budget approved by Arizona voters beginning in the 1940s. The Legislature continues to grapple with the state’s $3 billion budget deficit. If cuts in state-shared revenues are part of the Legislature’s budget solution, the impact to community services will be drastic. GENERAL FUND BUDGET SHORTFALL TO THE HONORABLE MAYOR AND CITY COUNCIL: This letter transmits a balanced budget for the upcoming fiscal year. On March 11, the Mayor and City Council approved $72 million in General Fund budget reductions including the elimination of 431.8 city jobs. Those reductions were implemented on April 14. This formal budget, which is required by the City Charter, reflects those already approved and implemented budget reductions. The budget presented here includes all city funds and represents months of hard work and difficult decisions by the Mayor and City Council, our boards and commissions, our employees, city management and the community. I want to thank the many community members who took the time to attend one or more of our 13 budget hearings and share their ideas for balancing the upcoming budget. I also want to thank the many city boards and commissions who provided time on their already busy meeting agendas to review and discuss budget-balancing proposals. It is important to note that this budget assumes the continuation of all current state-shared revenues. These revenues have been shared with Arizona cities and towns as a result of three initiatives The $72 million in reductions were made to address an overall General Fund revenue shortfall of $96 million due to a decline in the housing industry and slowdown in the economy. Revenues began to decline during the last few months of fiscal year 2006-07, and worsened throughout 2007-08. In October 2007, staff reduced revenue estimates by $20 million. In December 2007, revenues were further reduced $54 million. In March 2008, a third reduction of $22 million was made. On the expenditure side, we have unavoidable cost increases next year. These include employee compensation and benefit cost increases, general inflationary cost increases (particularly in fuel and utilities), expiring federal grants, critical upgrades to major technology systems, and the cost to open new facilities. Finally, our budget-balancing actions included an amount for employee severance. Other actions were taken to address the $96 million revenue shortfall aside from the $72 million in department reductions. General Fund vehicle replacements were reduced to only emergency response and Reserve-a-Ride vehicles, desktop technology replacements were reduced, repayment of General Fund support to Transit and Streets was delayed, maintenance service center renovations were deferred, and a hiring freeze has been extended into the first few months of the 2008-09 fiscal year. These actions reduced General Fund expenditures on a citywide basis and helped minimize service and program reductions in the community. EARLY ACTION PROTECTS COMMUNITY SERVICES We began discussing our budget situation with the Mayor and City Council on Dec. 4, 2007. We asked departments to begin preparing proposed budget cuts equal to 20 percent of their General Fund budget. Since $117 million in General Fund reductions have occurred over the past five years, there was minimal capacity left for departments to avoid service cuts. In January 2008, the Mayor and City Council approved an approach to reduce the 2008-09 budget that included 3 percent reductions in the Public Safety and Criminal Justice programs (Police, Fire, Municipal Court, City Prosecutor and Public Defender), and 11.6 percent reductions for the remaining General Fund departments. This approach allowed for administrative, non-service reductions in Police and Fire and avoided even higher percentage reductions, and service impacts, to the community. Finally, as mentioned earlier, on March 11, 2008, the Mayor and City Council approved budget reductions of $72 million. These reductions were effective on April 14 wherever possible. In this way, we were able to achieve almost 15 months in savings rather than just 12 months. We were able to cut programs and services less by cutting them early. 5 OVERVIEW OF 2008-09 BUDGET All Other General Fund Departments Public Safety/Criminal Justice Reductions have been made in all other General Fund departments and at all levels of the organization. As mentioned earlier, we have cut 431.8 city jobs. Executive and middle management jobs have been reduced by the greatest proportion. The vast majority of services enjoyed by the community will remain intact. But, given the severity of our budget deficit, some services have to be reduced. Parks maintenance has been reduced which will mean less watering and a delay in landscape maintenance and in cleaning the parks each day. The swimming pool season has been shortened to the last weekend in May through the end of July. Hours at various cultural facilities will be reduced, and several small, minimally used recreation centers will close. Supervised youth sports programming will be eliminated. Funds available for Neighborhood Fight Back areas have been reduced. Fewer library materials will be purchased. The Summer Youth Work Experience Program will be reduced. New transit service will be delayed, and maintenance at city facilities has been curtailed. We regret any reductions in community services. Restoring these services will be a high priority when the economy improves. The Police, Fire, Municipal Court, City Prosecutor and Public Defender departments 2008-09 budget growth was reduced by 3 percent. A large portion of these reductions, particularly in Police and Fire, were in administrative support staff and costs. Capital outlay, commodities, supplies and overtime were reduced in Police and Fire, and staffing for two new fire stations was delayed due to delays in construction schedules. None of the reductions in Police and Fire impacted direct service delivery. Two courtrooms and associated staffing were eliminated in the Municipal Court, City Prosecutor and Public Defender. This budget also reflects additional funding for Police and Fire service as a result of the passage by Phoenix voters of Proposition 1 in September 2007. Proposition 1 increased the city sales tax by 0.2 percent to provide funding for 500 additional police officers and support staff, and 100 additional firefighters. The hiring of these new positions is underway. Proposition 1 funding and positions were not impacted by the General Fund reductions implemented. 6 Other General Fund Budget Adjustments This budget includes increases in some existing recreation fees and implementation of a new $5 fee to utilize Parks community centers throughout the city. The revenues raised by these actions prevented approximately $1 million in additional cuts in Parks and Recreation programs. We have included a reduction in next year’s contingency fund from the current 2.9 percent of operating expenses to 2.7 percent of operating expenses. This provided $2.6 million in resources used to reduce program cuts. The current property tax rate of $1.82 will remain unchanged. Non-General Fund Budgets This budget provides recommendations for all city departments and all city funds. The Development Services Department also has been severely impacted by the current housing and economic downturn. A total of 191 positions and $15.9 million have been reduced from Development Services. These reductions were necessary to keep expenditure levels in line with current revenues. The Phoenix Convention Center is adding positions to operate the new North Building scheduled to open for business in January 2009. Aviation is adding bus service between the 44th and Washington streets light rail stop and the Sky Harbor Airport terminals. We also were able to provide some budget improvements in the Water, Wastewater, Housing and Solid Waste funds. CONCLUSION The fiscal year 2008-09 budget process has been one of the most challenging in the city’s history. The rapid decline in the housing industry and economy resulted in a revenue shortfall that worsened as the year progressed. No one knows at this point when the economy will begin to turn around, or whether the significant actions we’ve taken to balance the budget will ultimately be enough. We will continue to carefully monitor our revenues and report quickly to the Mayor and City Council if any problems occur. We will also continue to carefully monitor the state’s budget deliberations and to vigorously defend state-shared revenues. To date, no formal proposal to reduce state-shared revenues has been introduced. If the state were to reduce revenues shared with cities and towns, we will return with additional budget cuts. Given the level of cuts we have already implemented, severe service reductions will be brought forward for consideration. I want to thank the Mayor and City Council for their leadership and guidance in balancing the city budget. I also want to thank city departments for carefully preparing budget reductions for consideration. Finally, I want to thank all city employees for their continued dedication to delivering high quality services to the community. Their efforts are especially appreciated during these cutback times. Frank Fairbanks City Manager May 13, 2008 7 Phoenix earned an “A” grade on the Valley Forward environmental report card for its efforts in reducing airborne dust and ensuring that all 2006 bond-funded buildings are built to LEED (Leadership in Energy and Environmental Design) standards. 8 Our Commitment To Excellence As the backbone of the Phoenix ■ community, we work diligently to provide our residents with the efficient and quality services they have come to expect. We know that they depend on us to be resourceful and forward thinking even in difficult economic times. Now more than ever it is vital that the organization manage its resources with care. We are continuously looking for new and creative ways to provide programs and services while maintaining sound financial controls and the highest environmental standards. As an organization, we have been working towards becoming more “green.” In the past year we have been recognized for our environmental efforts. Below are a few of the awards we have received: ■ The Environmental Protection Agency (EPA) presented the city with two awards – the Green Electronics Champion and the Smart Growth Implementation and Assistance Award (SGIA). The Champion Award was presented for purchasing computers from manufacturers with environmentally friendly products. Since July 2006, the city has purchased 3,253 computers and 246 notebooks. Through its purchases, the city has reduced energy use by 2,701,969 kWh – enough electricity to power 238 households annually. The 20-mile light rail project received the SGIA Award for its smart-growth planning while protecting public health and the environment. Valley Forward recognized the city with four Crescordia Environmental Excellence Awards. This is an annual award given for significant contributions to the environment. The city was recognized for the following projects – Phoenix Union High School/University of Arizona College of Medicine, Cesar Chavez Library, the North Gateway Transfer Station/Material Recovery Facility, the Green Building Expo and the Sonoran Preserve Edge Treatment Guidelines. The city also earned an “A” grade on the Valley Forward environmental report card. The report stated Phoenix is showing remarkable efforts in reducing airborne dust and ensuring that all 2006 bond-funded buildings are built to LEED standards. Commitment to Quality Service Customer service has always been a priority for the city of Phoenix. As we grow and evolve, customer service will continue to be a critical focus. We pride ourselves on our ability to maintain high standards of service even in lean budget years. We continue to provide the essential quality of life services our customers rely on – effective response times from our public safety teams, efficient sanitation pick up, safe drinking water, and well-maintained parks and libraries. Although we are facing fiscal challenges, we continue to demonstrate our commitment to customer service. The following are a few of the awards received over the last year demonstrating this commitment: ■ ■ ■ Time Magazine recognized the city of Phoenix as a “Rapidly Greening City,” citing Phoenix as one of the cities with strong environmental commitments. The city’s Environmentally Preferable Purchasing (EPP) program was featured in a Black Enterprise Magazine article entitled “Growing a Green Business” as a champion on how government is getting green. ■ The Ocotillo Library was given the Spirit of South Mountain Award from the South Mountain Laveen Chamber of Commerce. This award was given for fostering the love of reading among children and teens and for being the first library in the Phoenix Public Library system to offer Internet access to the community. The Fire Department’s child immunization program won a national award from the Association of Immunization Managers – the first ever “Bulls-Eye” award. It recognized the department’s successful Baby Shots program, a 12-year-old program that serves underprivileged Phoenix neighborhoods. 9 ■ ■ The National League of Cities and the National Black Caucus of Local Elected Officials recognized the city with two awards. The Human Relations Commission and Equal Opportunity Department received first place in the Excellence in Diversity category for the “Healing Racism” series. The Neighborhood Services Department was the runner up for the City Cultural Diversity award for the ”Taking it to the Streets” celebration showcasing diverse Phoenix communities and neighborhood groups. The city’s North Gateway Transfer Station received the collection and transfer division 2007 Transfer Station Gold Excellence Award from the Solid Waste Association of America. The award recognized the outstanding planning, design, construction and operation of the station and materials recovery facility. ■ ■ The National Association of Telecommunications Officers and Advisors honored three Phoenix video productions with government programming awards: the “Men in Dragnet” public service announcement; “Waterways –Think about Water” episode; and “Meth: don’t even start” video. Each of these programs was praised for their efforts to improve public awareness. ■ The National Association of Housing and Redevelopment recognized the Neighborhood Services and Housing departments for their efforts towards removing blight, building infill housing and removing health and safety hazards from homes. The Center for Digital Government Top Ten Digital Cities recognized Phoenix as one of the top ten digital cities for its information technology policies designed to enhance service delivery and security. e le ct ed a s on , 72 , w a s se m d n ru a oe h B it a Va n g st re n gt er vi so r A n fo r sh ow in en te r Su p ss H er oe s C le r ge io A n ’s Se a n a zo ls . M a n za n it ie ld of A ri in d iv id u a ss B lu e Sh it y a n d it s n u of B lu e C ro m m co t to th e co m m it m en 10 We are Committed to Making Phoenix Better The city’s Vision and Values statements continue to serve as a common source of motivation for city of Phoenix employees to do all that they can to make Phoenix better. ■ 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 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. City employees raised $1.5 million for the Community Service Fund Drive. This year’s theme was “Rise to the Challenge.” The goal of this drive is to raise money for the Valley of the Sun United Way agencies that serve the needs of the Phoenix metropolitan area residents. ■ Manzanita Senior Center Supervisor Anita Boerum, 72, was selected as one of Blue Cross Blue Shield of Arizona’s Ageless Heroes. Van Boerum received the Community Involvement Award, which is given to an Arizona senior who shows strength and commitment to the community and its individuals. She was recognized for her resourcefulness, particularly her ability to collect and use community resources for the center. This award was developed by Blue Cross Blue Shield of Arizona to recognize the accomplishments and contributions of Arizona seniors. St a n C ox , a C it y C le rk D ep a rt E xc el le n ce m en t em p Aw a rd fo r lo y ee w h o h el p in g to w it h d is a bi is bl in d , re in tr od u ce li ti es . ce iv ed a n a cc es si bl eE m p lo y ee vo ti n g eq u ip m en t to vo te rs 11 ■ ■ United Blood Services presented four Valentines for Life Awards to the city for its high participation at city-sponsored blood drives. The Platinum award went to the Police Academy and Headquarters; Gold to City Hall and Bronze to the Aviation and Convention Center departments. The Phoenix Business Journal recognized four city employees for their community service efforts by featuring them in the 2008 Forty-Under-40 edition, including Alexandra Jones from the Budget and Research Department, Ruben Gallego from Councilman Nowakowski’s office, and Cynthia Weaver and Stephanie Ribodal from the Public Information Office. City of Phoenix Excellence Awards Each year the city honors employees and employee teams for excellence. Their efforts help to make Phoenix a more livable city. The individual winners include Housing Program Representative Marylouise Chavez, Police Sergeant Chuck Mount and Records Imaging Specialist Stan Cox. ■ Marylouise Chavez, a Housing Department employee was honored for her actions on behalf of a co-worker who lived alone and complained that she always felt poorly. Her doctor dismissed it as acid reflux, which didn’t sound right to Chavez. In November 2007, paramedics were called to Chavez’s office to treat an ill customer. Before the paramedics departed, Chavez asked them to check the co-worker. They concluded that the woman’s condition was very serious and she was transported to a hospital, where she underwent an emergency bypass operation the next day. The co-worker has recovered from the surgery and credits Chavez for saving her life. ■ As a member of the Police Department’s Bomb Squad, Sergeant Chuck Mount spent a year preparing for the 2008 Super Bowl, Fiesta Bowl, Insight Bowl and FBR Open Golf Tournament – major sporting events held within a one-month period. Mount chaired the Super Bowl’s Explosive Ordnance Disposal group, working with bomb experts from local, state and federal law enforcement agencies to identify potential security problems and develop an emergency-response plan. Also in 2007, Mount and his fellow officers on the Bomb Squad hosted the International Association of Bomb Technicians and Investigators national conference. In addition, Mount successfully applied for federal grants to purchase a large command vehicle and other equipment for the Bomb Squad. g p la st ic ba bl is h in g a ta es r d fo n co gn iz ed u ra n ts a a m w a s re or es , re st a gr oc er y st St a ti on ” te l ix a n tr oe en h P C T h e “B a g a t in vo lv ed p ro gr a m th re cy cl in g re ta il er s. 12 ■ Stan Cox, a City Clerk Department employee, was honored for helping to introduce accessible-voting equipment to voters with disabilities. Cox’s primary responsibility is translating city documents into Braille, but he went beyond his normal duties to assist the Elections Division. Cox, who is blind, tested the accessible-voting equipment, which allows individuals to vote independently with either a touch screen or audio ballot. Cox also helped script instructions for audio voting and met with disability groups to demonstrate the accessible-voting devices. Much of the work was done on his own time. The City Clerk Department’s efforts to reach out to the disabled community would not have been as effective without Cox’s contributions. The winning employee teams included three groups whose efforts make Phoenix a better place for its residents. ■ The “Bag Central Station” team was recognized for establishing a plastic bag recycling program that involved Phoenix grocery stores, restaurants and retailers. The team met with representatives from the Arizona Food Marketing Association, the Arizona Retailers Association and the carry-out restaurant industry to create the voluntary recycling program. As a result of the cooperative effort, retail establishments that provide plastic bags now provide plastic bag recycling containers in their stores. Moreover, plastic bags carry messages urging customers to recycle, reduce or reuse. For its part, the city distributed more than 29,000 reusable carry-out bags at many supermarkets and retail outlets. The “Bag Central Station” team, led by the Public Works Department, also developed an education and marketing campaign to communicate the importance of recycling plastic bags. ■ The Rio Salado Habitat Solar Irrigation Enhancement Team was honored for outsmarting copper thieves who targeted the Rio Salado Habitat. Stretching along five miles of the Salt River, the habitat is located south of downtown Phoenix. The habitat’s wetland areas and vegetation rely on five wells that are controlled by electronic pumps. Lured by high copper prices, vandals over a period of months removed the irrigation system’s entire wiring network. Instead of replacing the system, the team pursued an option that uses solar photovoltaic technology. Three departments – Streets, Public Works and Parks and Recreation – worked together to design and install the solar irrigation system. Not only is it vandal-proof, the new system eliminates the need for utility power and is environmentally sustainable. Furthermore, it will save the city hundreds of thousands of dollars while preserving the area’s lush riparian corridor. T h e R io Sa la d o H a bi ta t So la r Ir d es ig n in g ri ga ti on E a n d in st a n h a n ce m en ll in g a n ew u ti li ty p ow t Te a m w a so la r ir ri ga er a n d is s h on or ed ti on sy st em en vi ro n m fo r en ta ll y su th a t el im in st a in a bl e. a te s th e n ee d fo r 13 ■ Electrical staff from the Union Hills Service Center also turned to solar power to win an Employee Excellence Award. The team researched, designed and installed solar lighting for the center’s employee parking lot. The traditional sodium light fixtures did not provide adequate, safe lighting for employees who remained at the center after dark. Instead of using a vendor to install solar lighting, the team took on the project. They researched and mastered the technical aspects of solar lighting, wiring and installation. The sustainable system is expected to save the facility $2,200 annually while enhancing safety. Equally important, the team saved the city thousands of dollars by doing the job themselves and acquired a new skill set that can be shared with other city departments. 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 2007-08 fiscal year: ■ Jesse Jimenez reduced the amount of maintenance expense for the materials laboratory concrete curing room. In the past, the city’s combined cost to maintain the compressor and the needed electricity for appropriate humidity and cooling was more than $5,200 annually. The cost to replace the aged system was about $6,500. By implementing a water misting system and by using products already in place, the city eliminated more than $5,200 in annual maintenance costs and eliminated the need to replace the compressor. ■ James Wagner suggested new solid waste truck drivers listen in on calls taken by solid waste call center operators to help improve customer service by minimizing complaint calls and reducing the expense of drivers having to return to resolve recurring issues. n ed a n d h ed , d es ig te r re se a rc en st a in a bl e C su e e ic h T rv rk in g lo t. io n H il ls Se a n p U ee e n g sa fe ty. y th ci lo te r’ s em p il e en h a n st a ff fr om h n l w ce ca y e ri ll th ct a r u le n E g fo ,2 00 a n la r li gh ti n fa ci li ty $2 in st a ll ed so to sa ve th e d te ec p ex sy st em is 14 ■ Duane Rendon suggested replacing the costly water feature photo sensors for city parks. The sensors on the water features were either inoperable during the summer heat or subject to vandalism. Replacing the sensors with simple push button technology saves the city the cost of replacing the photo sensors due to vandalism or heat exposure. ■ Robert Edgin suggested modifying the grabber arms on the solid waste Starr system trucks. The grabber arms were causing damage to the solid waste containers and the containers would fall over when set back down. Edgin determined that if the lower rear arm of the grabber was removed it would prevent it from hitting and damaging the wheel of the container. He also suggested adding a rubber stopper to the assembly to improve support when dumping. As you can see, we work very hard to earn our reputation as a well-run city. Each day the core values of our organization – what we call our “Visions and Values” are at the root of everything we do. 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 atlarge 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 517.6 square miles, with a projected population of 1,575,312. 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 United States as a whole. An exception is construction and financial employment, which comprise more of Phoenix’s employment mix than the United States average due to rapid population and employment growth. Additionally, the Phoenix area’s manufacturing mix is much more concentrated in high technology than the United States. The high technology manufacturing sectors are cyclical in nature and may be more impacted during periods of economic slowing than other manufacturing sectors. The primary employment sectors and their share of total employment in the Phoenix metropolitan area consist of service industry (42%); trade (17%); government (12%); construction (9%); 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, Wells Fargo and Company, Arizona State University, Fry’s Food and Drug Stores, U.S. Postal Service, Honeywell Aerospace, US Airways, and Bashas’ Inc. The top two property taxpayers, based on secondary assessed valuation - Arizona Public Service Company and Qwest Communications - make up only four percent 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 2006-07 Estimated 2007-08 Projected 2008-09 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 1,514,369 1,544,575 1,575,312 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 2006-07 Estimated 2007-08 Projected 2008-09 $27,601 13.6% $29,706 14.8% $30,797 4.6% $40,856 6.5% $65,491 8.2% $69,879 3.6% $74,281 4.1% 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 $12,261,134 6.0% 3.6% $1.71 $16,068,817 2.7% 4.0% $0.80 $18,856,072 1.8% 4.0% $0.60 N/A N/A $0.46 $1.33 $2.52 $2.68 $1.62 Total Budget (‘000s) $95,835 Total GF Budget (‘000s)8 $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 Employees9 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 Rate10 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 $2,776,897 $1,022,645 16,517.5 10.9 8.8 $3,186,519 $1,102,185 17,068.5 11.1 9.0 $3,735,754 $1,183,888 17,297.1 11.0 8.8 N/A N/A 2.0 2.1 2.1 2.2 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/AAA 57,403 1.8% Aa1/AAA 57,000 2.0% Aa1/AAA 57,000 2.0% 247.9 329.1 427.1 483.5 516.8 517.6 517.6 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 2,810 104,009 783,464 3,228 99,100 750,000 3,640 101,200 762,000 3,640 30 14,437 – 572 35 25,162 46,122 838 45 26,281 75,112 1,042 45 28,369 101,396 1,315 52 22,422 126,636 1,625 57 20,000 122,000 1,746 58 22,300 123,000 1,741 Building Inspections Total Number of Inspections12 236,000 196,356 176,909 261,184 326,648 304,300 276,200 Streets Total Miles Miles Resurfaced and Sealed Total Miles of Bikeway13 2,270 378 N/A 3,084 216 N/A 3,800 250 250 4,299 220 472 4,945 111 555 4,990 99 565 5,035 126 575 City Economic Profile Median Household Income4 Personal Income Growth (Metro Phoenix) Assessed Valuation (‘000s)5 Employment Growth Rate6 Unemployment Rate Value of Residential Construction7 (Billions) Value of Commercial Construction7 (Billions) City Financial Profile Infrastructure Profile Area (Square Miles) Fire Fire Stations Fire Calls and All Other Calls11 Emergency Medical Calls11 Authorized Sworn Firefighters 19 1970-71 1980-81 1990-91 2000-01 Actual 2006-07 Estimated 2007-08 Projected 2008-09 423 23,097 22,765 555 39,097 28,129 761 50,825 28,414 906 70,750 36,500 992 86,845 33,854 1,007 90,000 34,530 1,064 92,500 35,220 2,925,700 6,500,000 22,175,000 35,900,000 41,900,000 43,000,000 44,000,000 204,800 325,300 281,900 379,000 281,392 513,643 327,953 1,051,935 379,047 1,142,425 387,250 1,050,000 393,740 1,050,000 121 N/A 137 1,303 181 2,206 199 3,332 216 4,482 226 4,765 229 4,780 2,368,232 704,940 3,691,745 1,182,606 5,962,411 1,732,410 9,151,000 2,016,000 14,987,501 1,910,123 14,448,980 1,709,650 15,550,200 1,829,700 2,637 4,497 4,776 6,080 7,131 7,208 7,345 Water Connections 172,100 52.7 Production (billions of gallons)15 282,048 88.5 321,996 84.7 350,967 109.4 401,937 104.2 404,218 110.5 410,281 119.5 Wastewater Connections Miles of Line 250,199 3,040 311,980 3,661 327,051 4,174 373,035 4,780 375,516 4,858 381,149 4,939 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 Parks14 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 15 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 prior years not meaningful. Employment growth rate figures (total non-farm employment) are calendar year and not fiscal year. Calendar 2006 is shown under FY2006-07, and calendar 2007 is shown under FY2007-08, and projected calendar 2008 is shown under FY2008-09. Estimates are for the Phoenix metro area and are obtained from the Arizona Workforce Informer-Arizona Department of Economic Security. Beginning with FY2006-07, multi-family projects are included in the commercial valuation total. Prior to FY2006-07, multi-family projects were included in the residential valuation total. As of FY1998-99, 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 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. Voters approved a 0.2 percent increase to provide funds for additional police officers and firefighters effective December 1, 2007. Prior to FY1980-81, 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. 2008-09 Resource and Expenditure Summary T his section provides a broad overview of the resources and expenditures included in the 2008-09 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 2008-09 budget, financed by operating funds, totals $3,735,754,000. As shown in the pie chart on page 23, the General Fund portion of $1,183,888,000 is approximately 32 percent of the total. The Enterprise funds, which include Aviation, Water, Wastewater, Solid Waste, Convention Center and Golf, make up another 36 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 page 23 shows the distribution of the total operating budget into these three types of expenditures. Not included in the operating budget are bonds and other capital funds used for capital improvement projects. These are included in a separate capital improvement program. The 2008-09 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 the 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 bar chart on page 23 presents the General Fund budget on a department-by-department basis. The table below provides a comparison of the 2008-09 budget to the 2007-08 adopted budget. Actual expenditures for the 2006-07 fiscal year also are included. While general fund expenditures are expected to decline as a result of budget cuts as explained below, citywide operating and maintenance expenditures increased slightly from 2007-08. This is primarily due to the first full year of expenditures related to the new public safety expansion tax, increased operating costs associated with the expanded Convention Center facilities, and increased fuel and utility costs. The increased debt service from 2007-08 is associated with the voter-approved 2001 and 2006 bond programs and the planned sale of Aviation revenue bonds. 2008-09 Budget Compared to 2007-08 Adopted Budget (In Millions of Dollars) 2008-09 Operating and Maintenance Expenditures 2006-07 Actual Expenditures 2007-08 Adopted Budget Budget Amount Change Percent Change $2,000.8 $2,423.7 $2,531.9 $108.2 Capital Expenditures 294.3 540.9 584.4 43.5 8.0 Debt Service 481.8 599.1 619.5 20.4 3.4 $2,776.9 $3,563.7 $3,735.8 $172.1 Total 4.5% 4.8% 21 2008-09 GENERAL FUND BUDGET OVERVIEW 2008-09 Estimated Beginning Fund Balances 2007-08 General Fund Estimated Ending Balance The 2008-09 General Fund budget of $1,183,888,000 provides for ongoing operating and maintenance and a modest level of pay-as-you-go capital expenditures. The table below compares the 2008-09 General Fund budget with the adopted 2007-08 budget. The operating and maintenance expenditures for 2008-09 are decreased 0.5 percent compared to the 2007-08 adopted budget. The decrease is primarily the result of budget reductions made in mid 2007-08 and continuing through 2008-09 as a result of declining economic conditions. Budget reductions are described in detail in the Department Program Summary section of this document. The following pie charts show the 2008-09 General Fund budget summarized by major programs and major resources. 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 2008-09 beginning fund balances of $931.7 million include $43.0 million in General funds, $468.1 million in Special Revenue funds and $420.6 million in Enterprise funds. The estimated beginning fund balance for Special Revenue and Enterprise funds include: Transit 2000 - $231.3 million; Water $131.2 million; Aviation - $125.2 million; Wastewater - $98.0 million; Convention Center - $41.0 million; Parks and Preserves - $74.5 million; Solid Waste - $30.0 million; Grant funds - $23.3 million; Arizona Highway User Revenue - $19.8 million; Development Services - $17.3 million; Sports Facilities - $29.9 million and $67.2 million in various other restricted funds. As shown in the following table, the estimated 2007-08 ending General Fund balance is $43.0 million. The balance results primarily from a $94.8 million decrease in operating expenditures, a $2.3 million decrease in pay-as-you-go capital expenditures and a $6.3 million increase in transfers, which were offset by a $57.5 million decrease in operating revenues and a $2.2 million lower beginning balance. The decrease in estimated 2007-08 General Fund expenditures is largely due to unused contingency funds and mid-year budget cuts made as a result of declining economic conditions. 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. 2008-09 General Fund Budget Compared to 2007-08 Adopted Budget (In Millions of Dollars) 2008-09 2007-08 Adopted Budget Budget Amount Change Percent Change $1,018.9 $1,184.2 $1,177.8 ($6.4) (0.5%) Capital 3.7 15.1 6.1 (9.0) (68.9%) Debt Service — — $1,022.6 $1,199.3 Operating and Maintenance Expenditures Total 22 2006-07 Actual Expenditures — $1,183.9 — ($15.4) 0% (1.3%) ALL SOURCES OF FUNDS ALL SOURCES OF FUNDS Total Resources – $3.7 Billion Total Expenditures – $3.7 Billion Enterprise Funds 36% Operation & Maintenance 68% Debt Service 16% General Funds 32% Special Revenue Funds 32% Capital 16% GENERAL FUNDS GENERAL FUNDS Total Resources – $1,184 Million Total Expenditures – $1,184 Million Public Safety and Criminal Justice 66% Property Tax 9% Local Sales Tax 39% Other Resources 5% Environmental Services and Other 5% User Fees/ Other Revenue 10% Transportation 4% State-Shared Revenues 37% General Government 7% Community Development and Enrichment* 18% *Includes Parks, Library, Human Services, Neighborhood Services, Planning and Economic Development Expenditures by Department 2008-09 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 Opportunity Public Information Budget & Research Economic Development Law City Clerk Information Technology Planning Mayor & City Council Personnel Functions* Downtown Development *Functions include several small offices such as the Phoenix Office of Arts and Culture, Education Office and Environmental Programs. Neighborhood Services Finance Prosecutor & Defender Public Works Streets Public Transit Contingencies Human Services Library Municipal Court Fire Parks and Recreation Police 0 23 24 2008-09 Estimated Revenues 2008-09 Transfers to the General Fund Revenues from taxes, fees, interest, grants and other sources provide resources to fund programs and services delivered by the city. Revenues for 2008-09 are estimated at $3,295,107,000. This is $170,453,000, or 5.5 percent above the 2007-08 estimate of $3,124,654,000. General Fund revenues are estimated at $1,123,286,000, which is $62,881,000 or 5.9 percent more than the 2007-08 estimates. The following table provides a comparison of the 2008-09 estimated revenues to 2007-08 estimates and 2006-07 actual collections. Detailed explanations by category are provided in the 2008-09 Revenue Estimates section of this document. State and local economic growth slowed in 2006-07 from the strong growth in the previous two years as the local housing market cooled. The state and local economy have continued to decline in 2007-08 as a result of a variety of factors including continued weakness in the housing market, slower job growth, and increased oil and food prices. Estimated revenue growth for 2008-09 assumes that the economy will improve somewhat next year. As a result, local and state sales tax collections are expected to grow at a higher rate than in 2007-08. Included in 2008-09 estimates for the Enterprise funds are full-year impacts of rate increases for Solid Waste effective January 2008, and Water and Wastewater services effective March 2008. The 2008-09 estimate for Special Revenue funds includes a $36.9 million increase in secondary property tax, a $28.6 million increase in 2007 Public Safety Expansion funds as the first full year of sales tax is collected, and a $2.9 million increase in federal funds. 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 2008-09 total $47.4 million. This amount reflects $47.1 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 $267,000 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 $47.4 million. A transfer of $838.0 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. 2008-09 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 2008-09, $31.9 million is included for the General Fund contingency and is discussed in more detail in the Contingency section of this document. As a result, budgeted General Fund resources equal expenditures. However, any unused contingency amounts at year-end fall to a General Fund ending balance. Generally, at least 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 2008-09 ending balance of $488.1 million includes: Transit 2000 $186.2 million; Water - $67.2 million; Convention Center - $28.3 million; Wastewater - $37.2 million; Solid Waste $2.8 million; Aviation - $54.6 million; 2007 Public Safety Expansion – Police - $26.0 million; Arizona Highway User Revenue $9.7 million; Sports Facilities - $37.5 million and $38.6 million in various other Special Revenue and Enterprise funds. Beginning and ending fund balances are provided in more detail in Schedule 1. In 2008-09, the Enterprise funds in the aggregate are programmed to decline from $421 million at the beginning of 2008-09 to $182 million at year end. The Aviation balance is declining due to anticipated costs associated with planned bond sales and increases in new capital projects financed with operating funds. Solid Waste funds are decreasing due to increased maintenance and planned replacement costs associated with aging infrastructure, as well as additional field services staff and new containers needed to handle growth. Water funds are decreasing primarily due to increased costs for raw water, increased water production resulting in higher chemical costs and budget additions. Wastewater funds are decreasing primarily due to planned vehicle replacement costs, and increased costs for electricity and sludge hauling. The Convention Center Fund balance is declining due to planned increases in operating costs associated with the expanded facility. Special Revenue Fund balances in the aggregate are expected to decrease from $468 million to $306 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 Fund balance is decreasing primarily due to the planned expenditure of approximately $82 million for acquisition of land for the Sonoran Preserve. 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 Transit 2000 Fund balance also is decreasing due to increased contract services costs and significantly increased fuel costs. 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 significantly declined and the fund balance will be drawn down to support inspection services still due. Negative Fund Balance 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. General Fund Balance Analysis (In Thousands of Dollars) 2006-07 2007-08 Estimate Over (Under) Budget Actuals Budget Estimate Amount Percent Beginning Balances $ 68,761 $ 70,921 $ 68,689 $ (2,232) (3.1)% Revenue 1,009,545 1,117,954 1,060,405 (57,549) (5.1)% (650) (43.3)% Resources Recoveries 740 1,500 850 12,288 8,923 15,253 $1,091,334 $1,199,298 $1,145,197 $(54,101) (4.5)% 1,018,921 3,724 1,184,192 15,106 1,089,346 12,839 (94,846) (2,267) (8.0)% (15.0)% Total Expenditures $1,022,645 $1,199,298 $1,102,185 $(97,113) (8.1)% Ending Fund Balance $ $ $ $ 43,012 100.0+% Transfers Total Resources 6,330 70.9% Expenditures Operating Expenditures Capital 68,689 — 43,012 2008-09 Estimated Revenues Compared to 2007-08 Estimates (In Thousands of Dollars) 2008-09 Fund Types General Special Revenue Funds Enterprise Funds Total 2006-07 Actuals $1,009,545 2007-08 Estimate $1,060,405 Estimate $1,123,286 Amount Change $ 62,881 Percent Change 5.9% 831,268 964,487 1,029,152 64,665 6.7% 1,047,900 1,099,762 1,142,669 42,907 3.9% $2,888,713 $3,124,654 $3,295,107 $170,453 5.5% 25 2008-09 Operating Budget $3,735,754,000 OPERATING EXPENDITURES $2,531,940,000 GENERAL FUNDS $1,177,763,000 ENTERPRISE FUNDS $751,615,000 General Fund $1,028,607,000 Neighborhood Protection $33,505,000 2007 Public Safety Expansion $53,372,000 Aviation $228,410,000 Parks & Recreation $105,223,000 Public Safety Enhancement $31,703,000 Parks & Preserves $193,000 Water $205,426,000 Library $38,440,000 Transit 2000 $165,812,000 Court Awards $6,405,000 Wastewater $110,585,000 Cable $5,493,000 Development Services $47, 277,000 Capital Construction $87,000 Solid Waste $130,891,000 Sports Facilities $1,736,000 Arizona Highway User Revenue $38,900,000 Convention Center $67,499,000 Local Transportation Assistance $6,850,000 Regional Transit $17,379,000 Golf $8,804,000 Impact Fee Program Admin $2,082,000 Other Restricted $19,568,000 Community Reinvestment $80,000 26 SPECIAL SPECIAL REVENUE REVENUE FUNDS $1,083,304,000 $602,562,000 Grants $177,613,000 City of Phoenix Financial Organizational Chart DEBT SERVICE $619,449,000 PAY-AS-YOU-GO CAPITAL $584,365,000 Transit 2000 $327,000 Sports Facilities $9,870,000 General Fund $6,125,000 Parks and Preserves $107,624,000 Arizona Highway User Revenue $31,241,000 Secondary Property Tax $201,024,000 Transit 2000 $50,320,000 Capital Construction $28,479,000 City Improvement $70,362,000 Grants $1,914,000 Arizona Highway User Revenue $73,716,000 Regional Transit $10,957,000 Aviation $92,199,000 Water $94,032,000 Community Reinvestment $1,465,000 Other Restricted Funds $4,056,000 Wastewater $76,786,000 Solid Waste $22,252,000 Grants $22,559,000 Aviation $86,605,000 Convention Center $18,590,000 Golf $852,000 Wastewater $81,061,000 Convention Center $3,764,000 Water $103,800,000 Solid Waste $3,745,000 Development Services $89,000 27 Services to the Community Phoenix is the core of Maricopa County and the state’s population and economic center. With its attractive climate, recreational opportunities, and affordable costs of living and doing business, the city has experienced sustained growth. The Phoenix area has been one of the most rapidly growing metropolitan regions in the country in recent decades in terms of population, employment and personal income growth. The city’s area (approximately 517 square miles) increases periodically with annexations. Population has risen 20 percent since 2000 to 1.58 million, making Phoenix the nation’s fifth-largest city. The city’s employment base is the foundation of a deep and diverse metropolitan area economy. The primary employment sectors in the Phoenix metropolitan area consist of professional and business services, trade, government, education and health services, financial activities, leisure and hospitality, and construction. Historically, the unemployment rate in greater Phoenix has been well below that of the United States as a whole. The city has experienced a decline in revenues primarily due to the housing industry, mortgage lending issues and higher gasoline prices. The downturn in the economy is not unique to Phoenix and most government units in the country are seeing similar revenue declines. Budget reductions to all General Fund departments are necessary for the 2008-09 fiscal year totaling more than $72 million and include the elimination of 431.8 positions. Also, the Development Services Department (DSD), which relies on dedicated non-General Fund revenues, has been hit particularly hard by the current economic downturn. In total, $15.9 million in reductions including the elimination of 191 positions have been made in DSD to offset the decline in revenues. In the area of Public Safety, the budget reductions are offset by additional funding from Proposition 1, the new Public Safety Expansion tax, which increases the Police and Fire budgets by more than $30 million to fund hundreds of new officers, firefighters and civilian support positions. Necessary cost increases are included for 2008-09 including employee compensation and benefits; general inflation, particularly in fuel and utilities; expiring federal grants; critical upgrades to major technology systems; and estimated costs to open new facilities. Local and national economists are predicting the slowdown in the economy to last into fiscal year 2009-10 and possibly beyond, meaning future reductions and severe impacts to community services may become necessary. Furthermore, the current budget reductions do not reflect a decline in state-shared revenues. Any change in the formula that would decrease state-shared revenues would require deeper cuts to balance the budget. In the non-General Fund areas of the budget, funding is available to improve community services. Aviation funds will be used to add interim bus service until the completion of the Automated Train Project and includes the addition of staff to provide for increased workloads created by new federal security mandates. Water and Wastewater funds will be used to increase staff and equipment to accommodate increased growth in water distribution systems and electrical maintenance services. Solid Waste funds will be used to add staff to enforce environmental compliance, provide increased recycling outreach efforts and to accommodate increased demand for collection of contained residential solid waste. The chart that follows indicates how major services provided to Phoenix residents have been adjusted in response to local economic and financial conditions. Because benchmarking is an important measure of the efficiency and effectiveness of services provided, we also have included multi-city comparisons of performance in several areas. Much of the data for these comparisons is taken from the 2006 International City/County Management Association's Center for Performance Measurement report. 29 PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 The 2007-08 budget included a competitive salary adjustment for sworn personnel and added 10 new sworn positions. One of those was paid for with Aviation funds and stationed at the airport to provide TSA-mandated security. The other nine sworn positions were assigned to the Public Transit Safety Bureau. In addition, the 2007-08 budget added 30 municipal security guards and one support position to the Public Transit Safety Bureau. All of these positions were paid for with Public Transit funds. The 2008-09 budget includes $13.7 million in budget reductions. The budget cuts will reduce staffing within the department by one sworn and 72 civilian positions. The reduction also includes cuts to contractual, capital and commodity line items. The 2008-09 budget also reflects costs for 150 positions and related equipment funded by Proposition 1. PUBLIC SAFETY POLICE Personnel Resources: In 1997-98, the Police Department had 2,604 sworn officers and 794 civilian employees. The budget also included funding for 24 radio and 911 operators to improve service and prepare for the opening of two new police precincts; two support staff to operate the Pecos Park police station; and funding to replace expiring grant funds for civilian and sworn positions. In November 2007, Phoenix voters passed Proposition 1, a 0.2 percent sales tax increase, which will add 400 sworn and 175 civilian employees over a 24 month period. In 2007-08, 254 of these positions were added. Response Time Average: Response time for 1997-98 Priority 1 emergency calls was 4 minutes 54 seconds. Because of increased service demand, budgeted response times for Priority 1 emergency calls have gradually increased to 5 minutes 36 seconds in 2007-08. During this same time period, the percentage of 911 calls answered within 10 seconds has decreased from 90 to 80 percent. Based on 2006 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: Denver – 14 min 48 sec Oklahoma City – 8 min 36 sec Austin – 7 min 54 sec Portland – 7 min 18 sec PHOENIX – 5 min 36 sec San Antonio – 4 min 42 sec 30 Also included is the addition of one police sergeant that will be assigned to the Public Transit Safety Bureau. This position will be paid for with Public Transit funds. Funding also is provided to replace expiring grant funds for the Commercial Narcotics Interdiction Squad. Finally, the budget reflects the transfer of 10 civilian positions to the Family Advocacy Center to improve service to victims of crime and domestic violence. In 2008-09, the Police Department will have 3,640 sworn positions or 2.3 for every 1,000 residents, and 1,325 civilian employees. The 2008-09 budget provides for a continued 5 minutes 42 seconds average response time for Priority 1 calls. PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 PUBLIC SAFETY FIRE Response Time Average: In 1997-98, the Fire Department maintained an average response time of 4 minutes 18 seconds for all fire and emergency medical calls. Since 1997-98, response times have increased 27 percent to 5 minutes 29 seconds for all fire and emergency medical calls. This 71-second increase is primarily due to increased population growth and traffic congestion. The overall emergency call activity level increased 17 percent (since 1997-98) during this period. The 2007-08 budget added 10 fire emergency dispatchers to improve response times to calls for service. Also included were 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 was 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 and related costs also were added. The 2008-09 budget includes $7.3 million in budget reductions. The budget cuts will reduce staffing within the department by two battalion chiefs responsible for managing alarm room staff and five civilian support positions. The reductions also include cuts to overtime, contractual, commodity and capital line items, and the delayed opening of fire stations 60 and 62. The 2008-09 budget also reflects costs for 64 positions and related equipment funded by Proposition 1, a 0.2 percent sales tax increase that was approved by voters in 2007. Finally, seven technical staff were included for maintenance of the regional fire dispatch system. These seven positions were paid with revenues generated for providing this service to participating cities. Based on 2006 ICMA data, city of Phoenix response times compare favorably to those of other benchmark cities as noted below: Percentage of All Calls to Which Response Time is Under 8 Minutes: Oklahoma City – 90 percent Long Beach – 89 percent PHOENIX – 86 percent San Antonio – 82 percent Austin – 81 percent Las Vegas – 71 percent 31 PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 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 2008-09 budget. PUBLIC SAFETY FIRE Emergency Transportation: In 1997-98, 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 engines 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). No changes were included in the 2007-08 budget. 32 PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 The 2007-08 budget funded the addition of two new routes, Route 154 along Greenway Road and Route 32 from Washington Street to Union Hills Drive along 32nd Street. The 2008-09 budget funds the commencement of light rail operations (LRT) in December 2008. To ensure the proper coordination between bus and rail, the following changes in bus service will be made when LRT service is implemented: eliminate the Red Line; eliminate Blue Line service on Central Avenue (Blue Line service north of Camelback Road will be renamed Route 39 (40th Street); replace frequency of service on Central Avenue by increasing Route 0 (Central Avenue); extend Route 15 (15th Avenue) from the rail station at Montebello to Metrocenter along current Red Line routing; and divert Route 60 (Bethany Home Road) one-quarter mile to connect to the Montebello rail station. TRANSPORTATION PUBLIC TRANSIT Service Miles/Hours: In 1997-98, 10,708,930 annual bus service miles were provided on weekdays and weekends in the city of Phoenix. The 2007-08 budget funded five new neighborhood circulator routes and increased service for the ALEX neighborhood circulator along with additional weekday RAPID trips. The 2007-08 budget funded additional weekday and holiday Dial-a-Ride service hours and improvements to the Dialysis Taxi Subsidy Program. The 2007-08 budget funded increased frequency on bus routes 8, 70, 27 and 156, extended weekday service hours to midnight on routes 8, 70, 43, 61 and 106, and increased Sunday frequency on routes 8, 27 and 156. The 2007-08 budget extended weekday afternoon peak hours on the Blue Line, and routes 7 and 12, extended Route 70 to Litchfield Park Road and Route 17 to the city limit, and extended weekday service on routes 50 and 106. One new sergeant assigned to the Police Transit Bureau Division will be funded in the 2008-09 budget. Annual 2008-09 bus miles are estimated at 21,142,732 and Dial-a-Ride service hours are estimated at 305,394. The 2007-08 budget funded the opening of the West Maintenance Facility and enhanced security at existing park-and-ride facilities, and transit centers which sell fare media. With continued enhancements and improvements, annual 2007-08 bus miles were estimated at 21,415,732 and Dial-a-Ride service hours were estimated at 296,043. Average Weekday Bus Ridership: In 1997-98, the average weekday bus ridership was 116,300. In the 2007-08 budget, weekday ridership was estimated to rise to 170,250. In the 2008-09 budget, weekday ridership is estimated to rise to 174,506. 33 PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 The 2000-01 budget increased frequency of service to every two weeks to improve air quality. The budget also added capital funding to improve maintenance, pave dirt alleys, and install additional sidewalks and curbs. In 2003-04, budget constraints reduced funding for making quick concrete repairs to infrastructure throughout the city. Funding for paving dirt alleys also was reduced as was funding for retrofitting sidewalk ramps. An asphalt crew responsible for repairing asphalt pavement on major, collector and local streets was eliminated. No changes are included in the 2008-09 budget. TRANSPORTATION STREET TRANSPORTATION Major and Collector Street Sweeping and Maintenance: In 1997-98, sweeping major and collector streets was scheduled for every 21 days. 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. The 2007-08 budget added funding to improve the general maintenance of streets. Residential Street Sweeping: In 1997-98, the city of Phoenix provided street sweeping service four 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 2007-08 budget. 34 No changes are included in the 2008-09 budget. PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 In 1997-98, sealcoat miles increased to approximately 100 miles annually. The 2008-09 budget provides for 44 miles of city streets to be sealcoated annually. TRANSPORTATION STREET TRANSPORTATION Sealcoat: In 1997-98, the city of Phoenix provided 100 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 2006-07, 35 miles of city streets were sealcoated. This decrease was due to continued increases in material costs. In the 2007-08 fiscal year, it is estimated that 37 miles of city streets will be sealcoated. Based on 2006 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: San Antonio – $36.73 Oklahoma City – $28.02 Portland – $26.19 Austin – $20.86 Las Vegas – $17.89 PHOENIX – $15.93 San Jose – $4.42 Asphalt Overlay: In 1997-98, 95 miles of overlay were performed. Between fiscal years 1998-99 and 2003-04, an average of 131 miles of overlay were performed annually. The 2008-09 budget provides for 82 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 and in 2006-07, 76 miles overlaid. These decreases were primarily due to continued increases in cost of materials. For 2007-08, due to continued increases in cost, it is estimated that 62 miles of asphalt overlay will be completed. 35 PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 This homeownership program allows eligible tenants the opportunity to purchase their home. The 2007-08 inventory of 433 units reflects the sale of 47 homes to eligible tenants over the past decade. In the 2008-09, the program is expected to sell 13 Scattered Sites homes, bringing the inventory down to 420 homes. By the end of 2007-08, the Affordable Housing Program was expanded to a total of 1,382 city-owned units for families and individuals. For 2008-09, the program is expected to maintain its inventory of 1,382 affordable housing units for families and individuals. The program’s beginning inventory before the HOPE VI project was initiated was 2,176 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 1,895 units. The 2008-09 budget reflects the start of the McCarty on Monroe project which will demolish 24 existing units for reconstruction. The project is anticipated to be completed in 2009-10. The total inventory of conventional housing units will be 2,046. COMMUNITY DEVELOPMENT HOUSING Scattered Sites Housing Program: In 1997-98, the Housing Department had 480 units. Affordable Housing Program: In 1997-98, this program had 850 units for families and individuals. Conventional Housing Program: This program has been in effect since 1951-52. In 1997-98, there were 2,176 units. In 2005-06, the department demolished the remaining 78 HOPE VI units and leased 99 units from Phase I for a gain of 21 units and a year-end total of 1,916 units. In 2006-07, Phase II of the HOPE VI project was completed, which added 100 senior housing units to the 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 inventory at the end of 2006-07 was 2,002. Phase III of the HOPE VI project was completed during 2007-08, adding 68 units, bringing the total inventory of conventional housing units to 2,070. 36 Finally, the department will begin another HOPE VI project at the A.L. Krohn (Krohn West) housing site. This project is anticipated to replace 76 existing units with 42 conventional housing units, 25 affordable rental units and 40 affordable homes for purchase. PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 Over time, the scope and volume of caseloads increased, positions fluctuated, and technology improvements and quality control measures were implemented, resulting in the overall average case cycle time improving from 83 days in 2001-02 to 53 days in 2004-05. With the 2008-09 budget reductions in staffing, technology and abatement funding, a slight increase is projected in case cycle time to 53 days. COMMUNITY DEVELOPMENT NEIGHBORHOOD SERVICES Neighborhood Preservation Case Cycle Time (Days) In 1997-98, neighborhood preservation cases were resolved in an average of 59 days. Case cycle times increased to 61 days in 2005-06 due to reduced staff and abatement funding, but improved to 56 days in 2006-07 and is projected to be 51 days at the close of 2007-08, with the continued application of technology, training and quality control measures. Based on 2006 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: Long Beach – $6.18 Austin – $4.94 PHOENIX – $4.91 Portland – $3.88 San Antonio – $3.52 ECONOMIC DEVELOPMENT Employment Growth Rate Compared to Other Cities This is a new measure. In 2007, Phoenix’s employment growth rate was lower than some of the other benchmark cities due to the declining housing market. Phoenix has one of the highest foreclosure rates and is experiencing a significant downturn in the construction industry, which in 2006 was one of Phoenix's highest growth areas. It is anticipated employment will continue to grow in 2008-09, although growth will be at a modest rate. Employment Growth Rate: Austin – 3.1% Dallas – 2.2% Ft. Worth-Arlington – 2.2% San Antonio – 2.0% San Jose – 1.4% PHOENIX – 1.3% San Diego –1.1% Kansas City – 1.0% Los Angeles/Long Beach – 0.4% 37 PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 The program is expected to serve 3,800 children during 2007-08. Due to increased costs, the program is expected to serve 3,600 children in 2008-09. 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. For 2007-08, the program is expected to serve approximately 800 youth. Due to reductions In the 2008-09 budget, the program is expected to serve 730 youth. In 2006-07, the program served more than 614,000 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. For 2007-08, the program is expected to serve 625,000 congregate and home-delivered meals. It is anticipated that the number of congregate and home-delivered meals will continue to increase in the 2008-09 budget. COMMUNITY ENRICHMENT HUMAN SERVICES Head Start Program: In 1997-98, the Human Services Department served 3,075 children. School-Based/School-Linked Program: In 1997-98, this program provided services at 25 school sites and served 7,000 youth. Senior Nutrition Program: In 1997-98, the Human Services Department served 503,000 congregate and home-delivered meals. 38 PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 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 were included in the 2007-08 budget. No changes are included in the 2008-09 budget. 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. The 2008-09 budget eliminates pool hours in August. COMMUNITY ENRICHMENT PARKS AND RECREATION Swimming Pools: In 1997-98, the city of Phoenix had 28 public swimming pools. Swimming Pool Season: In 1997-98, swimming pools were open for 12 weeks during the summer months. The 2005-06 budget reduced the swim season by closing pools one week earlier, resulting in a nine-week season. Changes included in the original 2007-08 budget added funding to increase the pool season at all 29 pools. These funds added weekend hours beginning in August and continuing through Labor Day. However, due to budget reductions, weekend pool hours were eliminated in May, except for the Memorial Day weekend. Children’s Summer Recreation Programs: 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 are included in the 2008-09 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. There were no changes to the 2008-09 budget. In 1997-98, 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 1997-98, funding was provided for a total of 72 sites. In 2007-08 additional funding was provided to improve after-school programming. The Parks and Recreation Department conducted a comprehensive evaluation of this programming. Changes were implemented including re-defining what constituted an after-school program versus an after-school site. Based on this new definition, the 2007-08 school year had 83 sites and 166 program units (some sites have more than one program.) These sites represented 116 after-school program units and 50 summer program units. Budget reductions in 2007-08 reduced the number of after-school program units to 104, which included reducing the number of sites to 80. 39 PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 The 1998-99 budget added Thursday evening hours, increasing total weekly hours to 70. The 2000-01 budget extended service hours to 9 p.m. on school nights. As a result, the Central Library provided service 75 hours per week. In April 2003, Central Library hours were reduced to 66 hours per week as a result of citywide budget reductions. No changes to hours of service are included in the 2008-09 budget. COMMUNITY ENRICHMENT LIBRARY Central Library: The new Burton Barr Central Library opened in May 1995. In 1997-98, the hours of operation per week was 67. The 2007-08 budget included opening the Central Library at 9 a.m. Monday through Saturday, increasing hours of service from 66 to 72 hours per week. Branch Libraries: In 1997-98, the city had 12 branch libraries with a total of 751 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, increasing total branch library service hours to 900 per week. In April 2003, as a result of budget reductions, branch library hours were reduced to 66 hours per week, decreasing total branch library service hours to 792 per week. 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. The 2007-08 budget included opening all branch libraries at 9 a.m. Monday through Saturday, increasing total branch library service hours to 1,008 per week. The renovation of Saguaro Library is scheduled to be completed during spring 2008, with a grand re-opening to the public on June 6, 2008. 40 Due to budget reductions, a number of changes will be implemented: facilities maintenance projects will be deferred; the printed calendar of events will be eliminated; and the budget for books and other circulating materials for Central Library and the branches will be reduced by 18.9 percent. No changes to hours of service are included in the 2008-09 budget. The new 12,300-square-foot replacement for Harmon Library is scheduled to open in April 2009. Due to budget reductions, a number of changes will be implemented: staffing will be reorganized to reduce a supervisory layer at the branches, creating regional managers responsible for several branch libraries; facilities maintenance projects will be deferred; the opening of the new Agave Library, located at 33rd Avenue and Pinnacle Peak Road, will be delayed until July 2009. It had originally been scheduled to open in December 2008 (FY 2008-09); the printed calendar of events will be eliminated; and the budget for books and other circulating materials for Central Library and the branches will be reduced by 18.9 percent. PROGRAM SERVICE LEVEL IN 1997-98 SERVICE CHANGES THROUGH 2007-08 SERVICE CHANGES FOR 2008-09 Based on 2006 ICMA data, the Phoenix library system compared very favorably to other benchmark cities as noted below: This trend is expected to continue in 2008 09. COMMUNITY ENRICHMENT LIBRARY Cost per Item Circulated Compared to Other Cities This is a new measure. Cost per Item Circulated: Long Beach – $8.20 Austin – $4.60 San Antonio – $3.40 PHOENIX – $2.20 San Jose – $2.10 ENVIRONMENTAL SERVICES WATER SERVICES Water Bill Comparison for Single-Family Homes This is a new measure. In a March 2008 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 2008-09. San Jose – $47.72 Kansas City – $36.82 Dallas – $36.33 Austin – $36.07 Tucson – $30.25 Albuquerque – $28.84 PHOENIX – $28.29 San Antonio – $19.16 Wastewater Bill Comparison for Single-Family Homes This is a new measure. In a March 2008 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 2008-09. Austin – $53.73 Dallas – $33.21 Kansas City – $26.20 San Jose – $23.56 Tucson – $21.95 PHOENIX – $20.47 San Antonio – $19.67 Albuquerque – $15.38 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 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 typically 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. 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 are also asked to submit their own ideas for budget changes. 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. 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 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. 2008-09 BUDGET PROCESS Early Discussions In October 2007, Budget and Research staff presented an early review and discussion of the budget to the City Council. At that 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 2008-09 fiscal year. The Mayor and City Council were advised that current year General Fund revenue estimates were reduced by $20 million due to a decline in local and state sales tax revenues for the first two months of the fiscal year, however, a breakeven General Fund budget for 2008-09 was projected. Revenue collections in September and October continued to decline and, in fact, worsened. Collections in several major revenue categories indicated significant downward trends impacting both the current year and the projected 2008-09 budget. As a result, staff again lowered current year revenue estimates and reduced projected revenues for 2008-09. These actions resulted in a projected $54 million revenue shortfall through the 2008-09 fiscal year, which was reported to the Mayor and City Council in December 2007. In anticipation of a budget shortfall, city departments were asked to submit base reductions equal to 20 percent of their current budget for management review. Because of the $117 million in General Fund reductions experienced from fiscal year 2002-03 through 2005-06, departments had few options that didn’t result in reduced services to the community. Departments were also asked to carefully consider the funding needed for capital facilities opening in 2008-09. Initial Budget Status The 2008-09 budget development process began earlier in the year to respond to reduced revenues related to declines in the housing industry, mortgage lending issues and higher gasoline prices. In January 2008, the Mayor and City Council were alerted that the economy was steeply declining and that the revenue outlook was poor. A comprehensive review of departments’ expenditure estimates for 2007-08 and 2008-09 was completed in December. Several unavoidable expenditure increases were identified in this review including employee compensation and benefit cost increases; general inflation, particularly in fuel and utilities; expiring federal grants; the cost of a May election; critical upgrades to major technology systems; and estimated costs to open new facilities. After updating revenues and incorporating the unavoidable cost increases, a budget deficit of $70.8 million was projected for the 2008-09 fiscal year. On Jan, 15, 2008, the Mayor and City Council were advised that with a projected deficit of $70.8 million, actions to balance the 2008-09 budget needed to be identified and implemented as soon as possible. Staff 43 provided a series of actions for City Council consideration including expediting the budget process calendar, implementing a hiring freeze, authorizing severance packages, examining new sources of revenue and targeting budget reduction percentages. Budget and Research staff estimated an additional $1.0 million was needed for severance package costs. The department also identified one-time citywide reductions such as utilizing available Development Services Department vehicles for General Fund vehicle replacements, reducing the General Fund contingency percentage, deferring service center renovations, and reducing desktop computer replacements. These actions reduced the projected deficit by $4.7 million from $71.8 to $67.1 million. During this discussion, an across the board reduction of 5.9 percent for each department was projected in order to achieve $67.1 million in reductions. To minimize the impact to public safety and criminal justice activities, a 3.0 percent reduction in these programs was recommended by the city manager, requiring remaining General Fund department reductions of 11.6 percent to achieve the $67.1 million savings. The City Council concurred with this reduction strategy and also approved an expedited budget calendar that would allow reductions to be implemented in April to maximize savings and the use of severance packages to help manage the position reduction process. Trial Budget On Feb. 19, a budget reduction proposal totaling $67.2 million in cuts and the elimination of 445.4 positions was presented for review to the Mayor and City Council. All departments and all levels of the organization were affected by the proposed reductions. Among the recommended reductions were reducing hours at cultural facilities, delaying the opening of the new Agave Library, reducing library funding for books and other circulating materials, decreasing the number of annual Fight Back programs, increasing admission fees for Pueblo 44 Grande Museum, reductions in parks maintenance, reducing community center and city pools hours, less traffic calming solutions, and decreasing the frequency of cleaning bus shelters. Since the Jan. 15 meeting, Budget and Research completed its review of new capital facilities under construction and their associated 2008-09 operating costs. By phasing projects and reducing costs to the bare minimum, 2008-09 operating costs for new facilities was reduced by $5.7 million from the original projection. The proposed budget added $1.3 million to fund the operating costs of several new capital facilities including the staff and recreation services for the Downtown Civic Space park and Phase II of the Reach 11 Sports Complex; maintenance for the new police precinct at 99th Avenue and Lower Buckeye; and facilities maintenance of the Children’s Museum. Also presented on Feb. 19 were budget proposals for non-General funds. The Development Services Department (DSD) was hit particularly hard by the current economic downturn. Significant reductions were made in DSD in November 2007, resulting in the elimination of 125 positions. Unfortunately, another 66 positions were eliminated to keep expenditure levels in line with current revenue collections. In total, $15.9 million in reductions were made in DSD expenditures to help manage this issue. The same economic factors impacting the General Fund also negatively impacted Transit 2000 sales tax revenue. As a result, the planned implementation of two new neighborhood circulators for the South Mountain and Laveen areas could not be funded. Staff will continue to monitor revenues and look for opportunities to fund these services in the future. Recommended additional costs for non-General Fund new capital facilities and other budget additions were also included in the proposed budget. For the Aviation Department, staff and operating costs were added to support bus services between 44th and Washington streets to all terminals, implement a GIS System, meet new federal security mandates in airport security operations, and increase maintenance staff for newly acquired facilities and equipment. The Phoenix Convention Center added a significant number of new staff and additional funds for operating costs to support the January 2009 opening of the new North Building. For the Housing Department, additional staff was provided to ensure compliance with all HUD and federal Section 8 requirements, maintain lease rates, and improve intake processes and waiting list management. In the Public Works Department, additional Solid Waste funding was provided for continuing the recycling educational outreach, adding staff and related costs for resuming contained collection for Service Area 6, activating the Salt River Service Center, enhancing the enforcement of Chapter 27 code requirements and environmental compliance, and maintaining adequate collection of contained residential solid waste and recyclables. Water and Wastewater improvements included additional funding to implement process controls at water treatment facilities, contract solids removal services, maintain security systems improvements throughout the department, add shift supervision at the 91st Avenue Wastewater Treatment Plant, and increase electrical maintenance services at wastewater treatment facilities. Community Input The proposed budget was presented at 12 budget hearings conducted throughout the community from Feb. 25 through March 6, including a special hearing for 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 changes as well as a calendar of budget hearing dates. This publication was inserted in the Feb. 24 edition of The Arizona Republic and the Feb. 27 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 inserts were made available to residents throughout the city. Residents also were invited to send comments and questions through the city’s Web site. This publicity of the Trial Budget allowed the City Council and the community to comment on a balanced budget. On March 11, a revised budget package was presented to the Mayor and City Council. At that time, it was reported that the holiday sales tax results were disappointing, prompting a further reduction in revenue estimates of $22 million. On the upside, staff noted estimated property tax revenues for next year increased by $2.5 million and the hiring freeze and budget belt-tightening had produced another $1.0 million in savings. Additionally, staff identified a series of one-time savings, which would reduce the amount of new budget cuts necessary to balance the budget. Together, these recommended items produced $13.9 million in savings, leaving a new net deficit of $4.6 million. Additionally, comments from the community were incorporated into the recommended budget that was presented to the Mayor and Council on March 11. Based on the input received, eight restorations were recommended. General Fund restorations included funds for Work Alternative and Project Scrub program coordination efforts; staff to administer the River Rampage Program; contract funding for Advocates for the Disabled; an additional weekend of pool hours; and additional funds for after-school programs. Funded through Parks fees, Monday hours were restored at community centers. Several services were temporarily restored utilizing outside funding sources. The Neighborhood Block Watch Oversight Committee approved a one-time allocation to restore park rangers and code enforcement inspectors. The River of Dreams, a nonprofit agency, pledged $50,000 each of the next two years for operational costs associated with the River Rampage program. A staff position to coordinate the annual Electric Light Parade and Fabulous Phoenix Fourth events was supported with the assumption that outside funding sources would fund the $120,000 cost. At this meeting, the Mayor and City Council approved the $67.2 million General Fund budget reduction package, recommended $243,000 in restorations, supported an additional 0.5 percent in reductions to non-public safety/criminal justice departments, and extended the hiring freeze to achieve $2.8 million in savings. With these changes, the recommended 2008-09 budget included General Fund reductions totaling $72 million and the elimination of 431.8 jobs. With the exception of public safety and criminal justice departments, which were cut by 3.0 percent, most General-funded department budgets were reduced by 12.1 percent. becomes the City Council’s program of services for the ensuing fiscal year. At that 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 18 A public hearing and final adoption were conducted on June 18. 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 2008-09 budget calendar. Tentative Budget Adoption - June 4 A public hearing and tentative budget adoption was held on June 4 in compliance with the City Charter requirement that the budget be adopted no later than June 30. Upon tentative adoption, the budget 2008-09 Budget Calendar January 15 Initial 2008-09 Budget Status Report and Options for Budget Review Process February 19 Proposed Reductions to Balance General Fund Budget Week of February 24 Budget Inserts in Local Newspapers February 25 – March 6 Community Budget Hearings March 11 Recommended Actions to Balance the 2008-09 Budget April 8 2008-13 Preliminary Capital Improvement Program April 17 2006 Bond Committee Meeting May 13 City Manager’s Recommended 2008-09 Budget June 4 Tentative Adoption of 2008-09 Budget and 2008-13 Capital Improvement Program June 18 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 total bonded debt limits. The city’s budget policies are extensions of these basic laws and follow generally accepted governmental budgeting and accounting practices and standards. A BALANCED BUDGET IS REQUIRED Arizona law (Title 42 Arizona Revised Statutes) requires the City Council to annually adopt a balanced budget by purpose of public expense. State law defines this balanced budget as “the primary property tax levy, when added together with all other available resources, must equal these expenditures.” Therefore, no General Fund balances can be budgeted in reserve for subsequent fiscal years. Instead, an amount for contingencies (also commonly referred to as a “rainy day fund”) can be included in the budget each year. The City Charter also requires an annual balanced budget. The Charter further requires that “the total of proposed expenditures shall not exceed the total of estimated income and fund balances.” 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 2008-09 budget development process are as follows: 2008-09 Arizona State Statute Budget Prescribed Deadline Dates City manager’s recommended five-year 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 8 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 13 Publish general summary of budget and notice of public hearing that must be held prior to tentative budget adoption. Publish in newspaper of general circulation at least two weeks prior to first public hearing. No requirement. Publish Week of May 21 Publish notice of public hearing which must be held prior to adoption of five-year Capital Improvement Program by resolution. Publish in newspaper of general circulation at least two weeks prior to first public hearing. No requirement. Publish week of May 21 47 City Charter Prescribed Deadline 2008-09 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. June 4 Publish summary of tentatively adopted budget and notice of public hearing which must precede final adoption. No requirement. Once a week for two consecutive weeks following tentative adoption. Publish weeks of June 9 and 16 Publish truth-in-taxation notice twice in a newspaper of general circulation. No requirement. First, at least 14 but no more than 20 days before required public hearing; then at least seven days but not more than 10 days before required hearing. Publish weeks of May 30 and June 9 No requirement. Public hearing plus truth-in-taxation hearing immediately followed by final budget adoption. No later than second Monday in August. June 18 Property Tax Levy Adoption. No sooner than seven days following final budget adoption and no later than the third Monday in August. July 2 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. In certain instances, however, the 48 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 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 the General Fund and in many other restricted funds. Informal reservations of contingencies are 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, law 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 seven local home rule options in 1981, 1985, 1991, 1995, 1999, 2003 and 2007. Before 1999, the home rule options generally excluded enterprise operations such as Aviation, Water, Wastewater and Solid Waste from the expenditure limitation. Beginning in 1999, the voters approved establishing the city’s annual budget as the spending limit. The current home rule option will be in effect for four fiscal years beginning in 2008-09 and continuing through 2011-12, and will 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. 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 the 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. GENERAL FINANCIAL POLICIES In addition to the legal constraints outlined in the previous section, a number of administrative and City Council-approved policies provide guidance and direction to the budget development process. Form of Budget Adoption 1. Ordinances - Three budget ordinances are adopted each fiscal year: (1) the operating funds ordinance, (2) the capital funds ordinance and (3) the re-appropriated funds ordinance. The last ordinance is required because unexpended amounts, including those encumbered, lapse at the end of the fiscal year. Since all expended amounts must be included in the budget adoption ordinance, the city re-budgets all encumbrances outstanding at year’s end. 49 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. 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, while 2006-07 was increased to 2.7 percent. In the 2007-08 budget, the contingency was increased to 2.9 percent of operating expenditures. As part of the plan to balance the 2008-09 budget, the General Fund contingency was reduced to 2.7 percent. Enterprise and Special Revenue funds have varying levels of contingency funding consistent with the variability in revenues and expenditures associated with the services provided. 50 4. Budget Controls - At the department level, control of expenditures is governed by Administrative Regulation. City departments prepare revised expenditure estimates twice a year. The Budget and Research Department keeps the city manager and the City Council advised on the status of the budget through periodic budget status reports. Mid-year revenue shortfalls and/or expenditure increases can result in the adoption of mid-year expenditure reductions. Cost Allocation and Expenditure Policies 1. Central Services Cost Allocation - The Finance Department annually calculates the full cost of central services provided to Enterprise funds. Except for the Golf Fund, these allocated costs are recouped from the Enterprise funds through fund transfers to the General Fund. 2. Administrative Cost Recovery - The Finance Department prepares an indirect cost allocation plan that conforms to federal guidelines for grant reimbursement of appropriate administrative costs. The allocated costs are charged to eligible federal grant funds through a fund transfer to the General Fund. 3. Internal Cost Accounting Allocation Interdepartmental services performed by one department for another are credited to the performing department and charged to the receiving department to reflect the accurate costs of programs. The rates used are intended to reflect full costs including appropriate overhead. 4. Enterprise Cost Recovery - Aviation, Water, Wastewater and Solid Waste are fully self-supporting from rates, fees and charges and, as such, are budgeted and accounted for as Enterprise funds. Cost recovery includes direct operation and maintenance expenses, capital expenditures, debt service, indirect cost allocation, and in lieu property taxes, where allowable. The Convention Center, while accounted for using enterprise accounting principles, is partially financed from rental and parking fees with the remainder coming from earmarked sales taxes. The Golf Fund, also accounted for using enterprise accounting principles, does not reimburse the General Fund for citywide indirect cost allocations. Finally, federal regulations preclude the Aviation Fund from paying in lieu property taxes. By City Council policy, the Convention Center Fund does not pay in lieu property taxes. 5. Employee Compensation Costs - Costs for employee compensation including all wages, social security, industrial, health, life, unemployment, dental insurance and other personal allowances are allocated to each department. Annual amounts for cash conversion of vacation, compensatory time and sick leave are included in the budget. However, future values of compensated absences are not included in the budget but are disclosed in the notes to the comprehensive annual financial report at year’s end. 6. Pension Funding - In addition to other employee compensation amounts, pension amounts are allocated to each department. The required employer contribution is determined actuarially to fund full benefits for active members and to amortize any unfunded actuarial liability as a level percent of projected member payroll over a 20-year period. 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, 41 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 levied against the sales of electricity, natural gas, telecommunications, water and sewer make up about 21 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. 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 2.0 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. 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. 7. Interest Earnings - Interest earnings from the investment of temporarily idle funds are credited to the fund generating the earnings. 51 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. 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, is allocated 62 percent and the Fire Department 38 percent of revenues with the interest earnings going to the General Fund. 2007 Public Safety Expansion – These funds are used to account for the 0.2 percent increase in the sales tax approved by voters in 2007. The funds are designated for hiring additional police personnel and firefighters; hiring crime scene investigator teams to improve evidence collection; improving fire protection services, to improve response times; and increasing paramedic and other emergency medical services. The Police Department is allocated 80 percent of this fund and the Fire Department is allocated 20 percent. Parks and Preserves – This fund is used fund are the revenues and expenditures associated with administering cable television licensing and programming the government and education access channels. to account for the funds generated by the 0.1 percent increase in the sales tax approved by voters in 1999. The funds are being used to 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. Special Revenue Funds City Improvement – This fund is used to Excise Tax – The Excise Tax Fund is used account for debt payments incurred as a result of facilities built by the Civic Improvement Corporation. Cable Communications – Included in this to account for tax revenues ultimately pledged to pay principal and interest on various debt obligations. 52 Police and Fire Neighborhood Protection – These funds are used to Capital Construction – This fund is used to account for the utility taxes (2 percent) on telecommunication services that are 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 improvements approved by voters on March 14, 2000. Fare box collections are also included in this fund. 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 Enterprise Funds Fiduciary 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, 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. 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. 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 2008-09 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. State and local economic growth slowed in 2006-07 from the strong growth in the previous two years as the local housing market cooled. The state and local economy has continued to decline in 2007-08 as a result of a variety of factors including continued weakness in the housing market, slower job growth, and increased oil and food prices. It is assumed that growth rates will improve somewhat in 2008-09. 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 personal income is expected to grow by 4.1 percent in 2008-09, which is up from the 3.6 percent estimated for 2007-08. In non-General Fund revenues, the 2008-09 estimates for Water, Wastewater and Solid Waste systems reflect full-year impacts of 2007-08 fee increases. Personal Income Growth 12% 10.5% 10% 8% 6% 7.9% 6.7% 6.5% $ $ 4% 5.8% 4.6% 4.3% $ $ $ $ $ 8.2% $ $ 3.6% $ 2% 4.1% $ 0% 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 Fiscal Year 2005-06 2006-07 2007-08 Est. 2008-09 Est. 55 GENERAL REVENUES BY MAJOR SOURCE (In Thousands of Dollars) Revenue Source Increase/(Decrease) from 2007-08 Est. Amount Percent 2006-07 Actuals % of Total 2007-08 Estimate % of Total 2008-09 Budget % of Total $430,178 2,375 42.6% 0.2% $435,339 2,355 41.1% 0.2% $462,142 2,355 41.1% 0.2% 26,803 – 6.2% 0.0% $432,553 42.8% $437,694 41.3% $464,497 41.4% $26,803 6.1% 141,466 167,560 61,158 14.0% 16.6% 6.1% 141,806 207,702 61,740 13.4% 19.6% 5.8% 149,720 221,132 64,333 13.3% 19.7% 5.7% 7,914 13,430 2,593 5.6% 6.5% 4.2% $370,184 36.7% $411,248 38.8% $435,185 38.7% $23,937 5.8% 95,060 9.4% 102,317 9.6% 109,671 9.8% 7,354 7.2% 2,531 10,426 20,601 725 2,446 26,261 1,420 1,547 5,662 1,757 14,566 2,744 18,878 2,184 0.3% 1.0% 2.0% 0.1% 0.2% 2.6% 0.1% 0.2% 0.6% 0.2% 1.4% 0.3% 1.9% 0.2% 2,519 10,235 21,212 775 1,244 31,738 1,325 1,551 5,417 1,774 13,653 2,089 13,746 1,868 0.2% 1.0% 2.0% 0.1% 0.1% 3.0% 0.1% 0.1% 0.5% 0.2% 1.3% 0.2% 1.3% 0.2% 2,625 10,238 20,928 790 2,266 35,838 1,325 1,546 6,164 1,774 13,860 2,129 12,675 1,775 0.2% 0.9% 1.9% 0.1% 0.2% 3.2% 0.1% 0.1% 0.5% 0.2% 1.2% 0.2% 1.1% 0.2% 106 3 (284) 15 1,022 4,100 – (5) 747 – 207 40 (1,071) (93) 4.2% 0.0% -1.3% 1.9% 82.2% 12.9% 0.0% -0.3% 13.8% 0.0% 1.5% 1.9% -7.8% -5.0% $111,748 11.1% $109,146 10.3% $113,933 10.1% $4,787 4.4% $1,009,545 100.0% $1,060,405 100.0% $1,123,286 100.0% $62,881 5.9% 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 and Forfeitures Court Default Fee Engineering and Architectural Services Fire Hazardous Materials Inspection Fee Library Fees Parks and Recreation Planning Police Street Transportation Other Service Charges Other Subtotal TOTAL GENERAL FUND 56 GENERAL FUNDS Total 2008-09 General Fund revenues are estimated to be $1,123.3 million or 5.9 percent more than 2007-08 estimates of $1,060.4 million. General Fund revenues consist of four major categories: local taxes, state-shared revenues, primary property taxes and user fees. Following are descriptions of the revenue sources within these four categories and explanations of 2008-09 revenue estimates. Combined local and state sales revenues for 2008-09 are expected to grow by 6.0 percent over 2007-08 estimates. Combined rates of growth since 2001-02 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 55 percent of General Fund revenues. Local sales taxes for 2008-09 are expected to grow by 6.1 percent over 2007-08 estimates. This is an increase from the 1.2 percent growth rate in local sales taxes anticipated in 2007-08. Phoenix’s share of state sales taxes for 2008-09 is expected to grow by 5.6 percent over 2007-08 estimates. This is increased from the 0.2 percent growth in Phoenix’s share anticipated in 2007-08. 13.8% 14% Local and State Sales Tax Revenue Growth 12% 10% 8.1% 8% 6.2% 6.0% 6% 4.4% 4% 2% 1.0% 0.3% 0% -2% -0.5% 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 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 2008-09 estimate is $464.5 million, which is $26.8 million or 6.1 percent greater than the 2007-08 estimate of $437.7 million. The assumptions used to estimate local sales taxes follow. Total Revenues – $1,123.3 Million Local Sales Tax 41.4% Local Sales Tax The city of Phoenix’s local sales tax consists of 15 general categories that are collected based on a percentage of business income accruing in each category. To protect local businesses, Phoenix also levies a use tax on purchases where no sales taxes were paid. Finally, two additional local taxes are collected based on water service accounts. Of the 15 categories collected as a percentage of income, all except advertising provide General Fund resources 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 $464,497,000 for 2008-09. This is an increase of $26,803,000 or 6.1 percent from the 2007-08 estimate of $437,694,000. The increase in local sales tax revenue is based on estimated growth of 2.9 percent in the retail sales category, and reflects slight growth consistent with CURRENT LOCAL SALES TAX RATES BY CATEGORY General Neighborhood Fund Protection 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 2007 Public Safety Expansion Public Safety Enhancement Parks & Transit Convention Sports Capital Preserves 2000 Center Facilities Construction – 0.7% 0.7% 0.7% 0.7% 0.7% – 0.1% 0.1% 0.1% 0.1% 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% – – – – – – – 0.1% 0.1% 0.1% 0.1% 0.1% – 0.4% 0.4% 0.4% 0.4% 0.4% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% – – – – – – – – – – – – 0.5% 2.0% 2.0% 2.0% 2.0% 2.0% 1.2% 0.1% 0.2% – 0.1% 0.4% – – – 2.0% 1.2% 1.3% 0.1% 0.1% 0.2% 0.2% – – 0.1% 0.1% 0.4% 0.4% – – 2.0% – – – 4.0% 2.1% 1.2% 0.1% 0.2% – 0.1% 0.4% 2.0% 1.0% – 5.0% 1.2% 1.2% 1.2% 2.7% * 2.7% 0.1% 0.1% 0.1% – – 0.2% 0.2% 0.2% – – – – – 2.0% ** – 0.1% 0.1% 0.1% – – 0.4% 0.4% 0.4% – – – – – – – – – – – – – – – – 2.0% 2.0% 2.0% 2.0% 4.7% 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 Total predictions of local economists. Projected increases in other categories include 8.6 percent for utility and franchise; 8.1 percent for commercial rentals; 6.9 percent for restaurants and bars; and 7.9 percent for hotel/motel room rentals. As shown in the pie chart on the right, the retail category represents approximately 40 percent of the General Fund sales tax. Personal income growth, which is used as a trend indicator for retail sales activity, is projected at 4.1 percent for 2008-09. 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 2008-09, these categories are expected to increase 7.5 percent, 8.1 percent and 6.1 percent respectively. These three categories combined are approximately 18 percent of General Fund sales tax revenue. The contracting category is expected to increase by 1.3 percent in 2008-09. Due to the significant slowdown in the housing market, contracting sales tax is expected to decline by 1.6 percent in 2007-08. For 2008-09, 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 8 percent of the General Fund sales tax revenue. The restaurants and bars category is expected to increase 6.9 percent and the hotel/motel category is expected to increase 7.9 percent in 2008-09. These two categories, combined with revenue from short-term motor vehicle rentals, are closely related to tourism activity. The expected growth rate for these categories for 2007-08 are 2.9 percent and 5.9 percent respectively. Revenues from these tourism-related activities represent approximately 7 percent of General Fund sales tax revenue. GENERAL FUNDS Local Sales Taxes Various Leases and Rentals 18% Retail 40% Tourism-related 7% Contracting 8% The utility tax category is approximately 22 percent of General Fund sales tax revenue. The category includes electricity, natural and artificial gas, water consumption, sewer service and communications activities. The 2008-09 estimate for utility sales and franchise tax revenue is $98,597,000, which is an increase of 8.5 percent over the 2007-08 estimate. The increase is partly due to recent and expected future rate increases for water, wastewater and electricity. 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 2008-09 estimate of $17,447,000 for use tax is 3.3 percent or $1,338,000 more than the 2007-08 estimate. This category is subject to fluctuations in purchasing practices, as well as economic drivers. The use tax category is approximately 4 percent of General Fund sales tax revenue. The following table shows General Fund sales tax collections since 2004-05. The amounts shown exclude the two additional utility tax items that are collected based on water service accounts. Other 5% Utility & Franchise 22% The first of the two additional utility tax items collected on water service accounts was implemented on Oct. 1, 1990, and provides resources to help offset jail costs paid to Maricopa County for misdemeanor defendants. The 2008-09 estimate of $6,883,000 for this category is 2.5 percent higher than the 2007-08 estimate of $6,715,000. The second provides funding for storm water management programs required by the Environmental Protection Agency. The 2008-09 estimate of $1,378,000 for this tax is 2.5 percent greater than the 2007-08 estimate of $1,345,000. This increase provides for modest growth in accounts. GENERAL FUND SALES TAXES (In Thousands of Dollars) Fiscal Year Revenues % Change From Previous Year 2004-05 $349,120 2005-06 398,319 14.1 2006-07 422,130 6.0 2007-08 (Est.) 427,098 1.2 2008-09 (Est.) 453,695 6.2 7.2% 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 2008-09 estimate for privilege license fee revenue of $2,355,000 represents no change from the 2007-08 estimate. Historically, the net change in the number of licensed businesses is small. 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 2008-09 estimate for this category is $435.2 million, which is $23.9 million or 5.8 percent more than the 2007-08 estimate of $411.2 million. The increase is mainly due to projected growth rates of 5.6 percent in state-shared sales taxes and 6.5 percent in state-shared income taxes. The increase in the income tax collections reflects personal and corporate income growth in 2006-07. State-shared vehicle license tax revenue for 2008-09 is estimated to grow at 4.2 percent over the 2007-08 estimate. GENERAL FUNDS Total Revenues – $1,123.3 Million State-Shared Revenue 38.7% 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 2008-09 is estimated at 30.3 percent. The city’s share of the state sales tax for 2008-09 is expected to be $149,720,000, which is $7,914,000 or 5.6 percent more than the 2007-08 estimate of $141,806,000. This estimate is based on the assumption that, similar to the local economy, the state economy will improve somewhat. At the state level, retail sales are anticipated to increase about 3.9 percent over the current fiscal year. The table below shows the cities’ share of state sales taxes, Phoenix’s allocation and annual increases ________________________________________________________________________ STATE SALES TAXES (In Thousands of Dollars) ________________________________________________________________________ Cities’ Share of State Collections Phoenix’s Share __________________ ______________________________ Fiscal Year Total % Change Percent Amount % Change ________________________________________________________________________ 2004-05 2005-06 2006-07 2007-08 (Est.) 2008-09 (Est.) $376,213 435,568 462,037 469,029 491,517 10.5% 15.8 6.1 1.5 4.8 *Impact of 2005 census population changes. 60 32.5% 32.5 30.4* 30.3 30.3 $123,788 141,194 141,466 141,806 149,720 10.9% 14.1 0.2 0.2 5.6 since 2004-05. The population factor changes with decade or mid-decade census counts and periodic adjustments made throughout the year. State Income Tax Since 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 2006 state legislative session included personal income tax cuts which will impact the city in 2008-09 and 2009-10. For 2008-09, the Legislature attempted to hold the cities harmless from the cuts by appropriating a set distribution amount to the cities of $717.1 million. Phoenix’s portion is estimated to be approximately 30.3 percent. The Legislature also appropriated a one-time distribution of $10.5 million to the cities in an effort to reimburse them for income tax sharing cuts in 2002-03 and 2003-04. Phoenix’s portion of this is estimated to be approximately 33.7 percent. Phoenix’s total distribution for 2008-09 is estimated at $221,132,000 and is an increase of $13,430,000 or 6.5 percent from the 2007-08 estimate of $207,702,000. The following table shows the total cities’ share of state income tax, Phoenix’s share, percentage allocation and annual increase since 2004-05. 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 User 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) % Shared w/Cities Fiscal Year 2004-05 2005-06 2006-07 2007-08 (Est.) 2008-09 (Est.) Cities’ Share of State Collections Total 15.0% 15.0 15.0 15.0 15.0 $373,073 425,229 551,231 684,519 727,677** Phoenix’s Share % Change Percent Amount % Change 2.2% 13.9 29.6 24.2 6.3 32.5% 32.5 30.4* 30.3 30.3 $121,440 138,313 167,560 207,702 221,132 1.9% 14.0 21.1 24.0 6.5 *Impact of 2005 Census population changes. **Distribution set by the legislature of $717.1 million, plus one-time distribution of $10.5 million. 61 Phoenix’s share of the vehicle license tax for 2008-09 is anticipated to be $64,333,000, which is $2,593,000 or 4.2 percent more than the 2007-08 estimate of $61,740,000. The table below shows the cities’ share of the vehicle license tax, Phoenix’s share, allocation percentage and annual percentage change since 2004-05. GENERAL FUNDS Total Revenues – $1,123.3 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 9.8% ________________________________________________________________________ PRIMARY PROPERTY TAX ________________________________________________________________________ Primary Assessed Rate per Valuation % Primary Levy % $100 Assessed Fiscal Year (in Billions) Change (in Thousands) Change Valuation ________________________________________________________________________ 2004-05 2005-06 2006-07 2007-08 (Est.) 2008-09 (Est.) $9,800 10,637 11,431 12,890 14,665 8.3% 8.5 7.5 12.8 13.8 $83,304 91,311 96,622 103,664 111,568 9.0% 9.6 5.8 7.3 7.6 $.8500 .8584 .8453 .8042 .7608 ________________________________________________________________________ ________________________________________________________________________ VEHICLE LICENSE TAX (In Thousands of Dollars) ________________________________________________________________________ Amount Phoenix’s Share Increase/(Decrease) Distributed by Fiscal Year Maricopa County Percent Amount Amount Percent ________________________________________________________________________ 2004-05 2005-06 2006-07 2007-08 (Est.) 2008-09 (Est.) $122,619 136,835 143,530 145,100 151,194 46.1% 46.1 42.6 42.6 42.6 $56,552 63,108 61,158 61,740 64,333 $3,030 6,556 (1,950) 582 2,593 5.7% 11.6 (3.1) 1.0 4.2 Primary Property Tax Rate (combined rate each year is $1.82) $1.00 0.85 0.85 0.86 0.85 0.80 $0.75 0.76 $0.50 $0.25 $0.00 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Fiscal Year The chart above shows the changes in the primary property tax rate since 2003-04. 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 2008-09 primary property tax levy is $111,568,000, which is the maximum amount allowed by the Arizona Constitution. This is a 7.6 percent increase over the 2007-08 levy of $103,664,000. The change in the primary levy reflects an estimated $5,830,000 increase for collections associated with new properties entering the rolls, plus $2,074,000 for the State Constitution allowed 2 percent increase on the prior year levy. The primary assessed valuation of $14.67 billion is approximately 13.8 percent above the 2007-08 primary assessed valuation of $12.89 billion. Of this increase about 43 percent is from new properties. Historically, actual property tax collections are slightly lower than the amount levied. For 2008-09, actual collections for primary property tax are estimated to be $109,671,000 or 98.3 percent of the levy amount. The 2008-09 levy results in an estimated primary property tax rate of $0.7608 per $100 of assessed valuation. This would result in a secondary property tax rate of $1.0592 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 2004-05. 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 2008-09 estimate for this category is $113.9 million, which is $4.8 million or 4.4 percent higher than the 2007-08 estimate of $109.1 million. Following are descriptions of the various categories and explanations of the revenue estimates. GENERAL FUNDS Total Revenues – $1,123.3 Million User Fees and Other Revenues 10.1% 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 2008-09 estimate of $2,625,000 is 4.2 percent higher than the 2007-08 estimate, primarily due to expected growth in liquor licenses. 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 2008-09 estimate of $10,238,000 is $3,000 greater than the 2007-08 estimate of $10,235,000. The increase assumes no change in the customer base for one of the cable providers and a very minimal rate increase. The license for the other cable provider provides that the amount will remain at calendar year 2006 levels. Revenue payments for both providers are offset by annual payments to the Educational Access Account, which are adjusted annually by the consumer price index. 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 2008-09 estimate of $20,928,000 is $284,000 or 1.3 percent less than the 2007-08 estimate of $21,212,000. The decrease in 2008-09 is due to the receipt of surplus revenue from the Fines, Fees, and Forfeitures (FARE) program from the state for 2007-08. 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 2008-09 estimate for this revenue category is $790,000, which is 1.9 percent higher than the 2007-08 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 2008-09 estimate of $2,266,000 is $1,022,000 or 82.2 percent more than the 2007-08 estimate of $1,244,000. The increase in 2008-09 is due to an anticipated large bad debt write-off in 2007-08 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 2008-09 estimate for ETS is $26,010,000, which is $2,394,000 or 10.1 percent greater than the 2007-08 estimate of $23,616,000. The projected increase is due to rate increases approved by the Arizona Department of Health Services, modest growth in the number of transports and a projected increase in collection rates. The collection rates are anticipated to increase by 2 percent in 2008-09 as transition issues related to the Fire Department’s assuming billing and collections in-house in 2006 will be fully resolved. Other Fire revenue sources include fire prevention inspection fees, computer-aided dispatch (CAD) and various other services provided to the community. The 2008-09 estimate for other fire services is $9,828,000 which is $1,706,000 or 21.0 percent above the 2007-08 estimate of $8,122,000. Increased fees for computer-aided dispatch and increased billings for Paradise Valley fire services contribute to the increased revenues. Library fee and fine revenue for 2008-09 is expected to be $1,546,000, which is $5,000 or 0.3 percent below the 2007-08 estimate. The reduction is due to an anticipated decrease in miscellaneous fees and interest. This user fee category includes permit fees for utility construction in the public rights of way as well as utility ordinance inspections. The 2008-09 estimate of $2,129,000 is $40,000 more than the 2007-08 estimate of $2,089,000. Parks and Recreation Fees Other Service Charges 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 2008-09 estimate of $6,164,000 is $747,000 or 13.8 percent above the 2007-08 estimate. The increase in 2008-09 is primarily due to implementing and increasing a variety of fees to help lesson the impact to the community of budget reductions. This included implementing a $5 annual fee for use of community centers and increasing fees for aquatics programs, ball field usage and museum admissions. 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 2008-09 estimate of $12,675,000 is $1,071,000 or 7.8 percent less than the 2007-08 estimate of $13,746,000. This is primarily due to a projected decrease in interest earnings. Hazardous Materials Permit and Inspection Fee Because incidents involving hazardous materials have increased in recent years, a hazardous materials permit and inspection fee was established in October 2001. Revenues from this category are used to recover direct costs incurred for inspecting businesses that use hazardous materials. Upon review in 2003-04, the annual permit fee amount was raised. This annual permit now varies from $400 to $1,650 and depends on the volume of hazardous materials stored on site. The 2008-09 estimate is $1,325,000, which is the same as 2007-08 estimate. Revenues in this category have been historically consistent. Planning User fees in this category include rezoning fees and zoning adjustment fees for use permits and variances. The 2008-09 estimate of $1,774,000 reflects no change from the 2007-08 estimate. All Other Fees This fee category consists of miscellaneous service charges in the Finance, Housing, Human Services and Neighborhood Services departments and miscellaneous categories. The 2008-09 estimate of $1,775,000 is $93,000 or 5.0 percent less than the 2007-08 estimate of $1,868,000. Police The Police Department receives revenues for various services and programs. Police services are provided on a fee-per-hour basis for school and athletic events as well as other activities where a law enforcement presence is desired. In addition, a false alarm program includes both permit fees and assessments for false alarm responses. For 2008-09, the estimate of $13,860,000 is 1.5 percent more than the 2007-08 estimate of $13,653,000. The increase is due to a projected increase in revenue from reimbursements for school resource officers. 65 NON-GENERAL FUNDS 2007 Public Safety Expansion Tax Parks and Preserves Sales Tax 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 2008-09 revenue estimates. The table on the next page provides the 2007-08 and 2008-09 estimates and 2006-07 actual revenue amounts for revenues within these two categories. The 2007 Public Safety Expansion sales tax is a 0.2 percent sales tax approved by voters in September 2007 and implemented in December 2007. Revenues are allocated 80 percent to Police and 20 percent to Fire. The funds are to be used for hiring additional police personnel and firefighters; to hire crime scene investigation teams to improve evidence collection; and to improve fire protection services, improve response times, and increase paramedic and other emergency medical services. The 2008-09 estimate is $65,723,000 and the 2007-08 estimate since inception is $37,934,000. These estimates are consistent with those for the same categories in the local sales tax discussion. Also, $950,000 is estimated for interest earnings in 2008-09. 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 2008-09 estimate of $32,861,000 is $1,667,000 or 5.3 percent more than the 2007-08 estimate of $31,194,000. These estimates are consistent with the estimates for the same categories in the local sales tax discussion. Also, $2,311,000 is estimated for interest earnings in 2008-09. 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, Public Safety Enhancement, and Public Safety Expansion. 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 2008-09 estimate of $32,861,000 is $1,665,000 or 5.3 percent greater than the 2007-08 estimate of $31,196,000. These estimates are consistent with those for the same categories in the local sales tax discussion. Also, $350,000 is estimated for interest earnings in 2008-09. 66 Transit 2000 Funds 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 2008-09 estimate of $27,347,000 is $2,228,000 or 8.9 percent greater than the 2007-08 estimate of $25,119,000. These estimates are consistent with the utilities sales tax forecast for the General Fund. 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 2008-09 estimate of $131,445,000 is $6,669,000 or 5.3 percent greater than the 2007-08 estimate of $124,776,000. 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 2008-09 fare box revenue estimate of $35,477,000 is 12.0 percent greater than the 2007-08 estimate. The 2008-09 estimate also includes interest earnings and other miscellaneous revenue of $9,324,000 which is a 6.8 percent decrease from 2007-08 estimate of $10,004,000. The decrease in interest earnings is primarily the result of the planned reduction in the Light Rail Fund balance. NON-GENERAL FUND REVENUES BY MAJOR SOURCE (In Thousands of Dollars) 2006-07 Actual 2007-08 Estimate 2008-09 Budget Increase/(Decrease) from 2007-08 Est. Amount Percent $31,364 23,657 34,670 165,460 6,670 54,957 19,722 17,645 134,186 6,969 30,005 3,727 118,596 2,369 1,682 125 23 18 1,989 8,972 $31,576 38,084 25,119 34,339 166,466 5,309 46,100 21,034 18,427 130,497 6,910 72,002 2,724 164,127 920 1,748 133 21 2,929 20 1,599 11,376 $33,211 66,673 27,347 35,172 176,246 6,250 34,000 21,766 19,788 132,946 6,850 59,916 2,781 201,024 940 1,752 133 21 2,868 20 1,591 11,976 $1,635 28,589 2,228 833 9,780 941 (12,100) 732 1,361 2,449 (60) (12,086) 57 36,897 20 4 (61) (8) 600 5.2% 75.1% 8.9% 2.4% 5.9% 17.7% -26.2% 3.5% 7.4% 1.9% -0.9% -16.8% 2.1% 22.5% 2.2% 0.2% 0.0% 0.0% -2.1% 0.0% -0.5% 5.3% 60,048 34,803 16,621 12,017 12,095 10,011 22,867 70,655 34,345 23,076 16,844 6,272 3,841 27,994 68,348 34,025 34,200 8,493 9,742 535 30,538 (2,307) (320) 11,124 (8,351) 3,470 (3,306) 2,544 -3.3% -0.9% 48.2% -49.6% 55.3% -86.1% 9.1% $168,462 $183,027 $185,881 $831,268 $964,487 Aviation Water System Wastewater System Solid Waste Convention Center Golf Courses 322,870 311,934 203,068 127,411 74,989 7,628 Total Enterprise Funds TOTAL NON-GENERAL FUND REVENUE Revenue Source Special Revenue Funds Neighborhood Protection 2007 Public Safety Expansion 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 Vehicle Impound Program 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 $2,854 1.6% $1,029,152 $64,665 6.7% 332,513 333,873 216,810 133,677 75,125 7,764 343,078 356,817 218,409 136,900 80,418 7,047 10,565 22,944 1,599 3,223 5,293 (717) 3.2% 6.9% 0.7% 2.4% 7.0% -9.2% $1,047,900 $1,099,762 $1,142,669 $42,907 3.9% $1,879,168 $2,064,249 $2,171,821 $107,572 5.2% Enterprise Funds 67 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 recommended estimate for 2008-09 is $6,250,000. Development Services Revenues in this user fee category include building permits and plans review, subdivision and site plan fees, sign permit fees and engineering permits and plan review fees. These fees are used to fully support the activities of the Development Services Department. The 2008-09 estimate is $34,000,000, which is $12,100,000 or 26.2 percent less than the 2007-08 estimate of $46,100,000. This is primarily due to a projected decrease in plan review and permit activity in all disciplines, with declines anticipated in both the residential and commercial sectors. ARIZONA HIGHWAY USER REVENUES (In Thousands of Dollars) Fiscal Year AHUR Distribution 2004-05 $117,464 $5,707 2005-06 124,791 7,327 6.2 2006-07 130,223* 5,432 4.4 2007-08 (Est.) 126,797 (3,426) 2.6 2008-09 (Est.) 129,746 2,949 2.3 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 recommended 2008-09 estimate is $21,216,000, or a 4.6 percent increase over the 2007-08 estimate. These funds are used primarily for right-of-way improvements in the Street Transportation Capital Improvement Program. The 2008-09 estimate also includes interest earnings of $550,000. Sports Facilities Sports facilities revenues consist of a 1 percent portion of the 5.0 percent hotel/motel tax category, a 2 percent tax on short-term motor vehicle rentals, and interest revenue generated by the fund. 68 5.1% *2005 Census adjustment to population is reflected. The 2008-09 estimate is $18,238,000, which is $1,361,000 or 8.1 percent more than the 2007-08 estimate of $16,877,000. The revenue estimates are consistent with the General Fund sales tax estimates in the hotel/motel and short-term vehicle rental categories. The 2008-09 estimate includes $8.3 million for the hotel/motel portion and $9.9 million for the short-term car rental portion. Also, $1,550,000 is estimated in 2008-09 for interest revenue. Arizona Highway User Revenue Capital Construction Increase/(Decrease) Amount Percent 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 2008-09, it is anticipated that Phoenix will receive $105.0 million from the 27.5 percent share and $24.8 million from the 3 percent share. The total 2008-09 AHUR estimate of $132,946,000 is $2,449,000 or 1.9 percent above the 2007-08 estimate of $130,497,000. Included in the estimate are interest earnings of $2,500,000 in 2008-09 and $3,000,000 in 2007-08. The state-shared increase is based on average annual increases at the state level of 3.7 percent in gasoline tax collections, 3.2 percent in motor carrier tax collections (trucking), 5.9 percent in vehicle license tax collections and 6.1 percent in vehicle registrations. The table above shows the state-shared Arizona Highway Users allocations to the city of Phoenix since 2004-05. 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 2008-09 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. 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 2008-09 estimate of $59,916,000 is $12,086,000 or 16.8 percent below the 2007-08 estimate of $72,002,000. The decrease is due to an anticipated reduction in reimbursable Regional Transportation Plan projects. The plan is funded by the Maricopa County transportation tax that was extended through December 2025 by Proposition 400. ________________________________________________________________________ SECONDARY PROPERTY TAX ________________________________________________________________________ Secondary Assessed Rate per Valuation Secondary Levy $100 Assessed Fiscal Year (in Billions) % Change (in Thousands) % Change Valuation ________________________________________________________________________ 2004-05 2005-06 2006-07 2007-08 (Est.) 2008-09 (Est.) $10,490 11,420 12,261 16,069 18,856 7.1% 8.9 7.4 31.1 17.3 $101,752 109,811 119,509 163,227 199,724 7.1% 7.9 8.8 36.6 22.4 $0.9700 0.9616 0.9747 1.0158 1.0592 Community Reinvestment Impact Fee Program Administration The 2008-09 estimate of $2,781,000 represents estimated redevelopment revenues to be received through various economic redevelopment agreements in the downtown area. 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 2007-08 and 2008-09 revenue estimates are $920,000 and $940,000 respectively. Effective February 2007, a reduction to the administrative fee from 3 percent to 1 percent of the gross impact fee was approved. As a result of the administrative fee reduction, and the recent downturn in residential construction activity, the 2008-09 revenue estimate has decreased by $1,429,000 when compared to the 2006-07 actual revenue amount of $2,369,000. 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 2008-09 primary property tax rate is $0.7608. To maintain our current $1.82 total rate, the resulting secondary rate is $1.0592 per $100 of assessed value for 2008-09. The 2008-09 secondary property tax levy of $199,724,000 is based on this rate and secondary assessed valuation of $18.86 billion. This resulting levy is $36,496,000 or 22.4 percent greater than the 2007-08 levy of $163,227,000. The increase is primarily because of a 17.3 percent increase in net assessed property values for Phoenix plus the increase in the secondary rate described above. Also included in the 2008-09 estimate is $1,300,000 in interest earnings, a 44.4 percent increase above 2007-08. The table above shows secondary assessed valuation, secondary property tax levies and secondary property tax rates since 2004-05. The total property tax rate of $1.82 for 2008-09 has remained unchanged since 1995-96. 69 Other Restricted Fees Community Development Block Grant ENTERPRISE FUNDS 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, Vehicle Impound fees, 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 2008-09 estimate of $18,361,000 is $535,000 above the 2007-08 estimate of $17,826,000. The increase is primarily due to projected increases in Fire Technical Support revenues and health insurance reimbursements. 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 2008-09 CDBG entitlement is $34,200,000. 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. Public Housing Grants The 2008-09 Public Housing grants revenue included in the annual operating budget is $68,348,000, which is a 3.2 percent decrease from 2007-08. 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. Human Services Grants The 2008-09 revenue estimate of $34,025,000 is $320,000 less than the 2007-08 estimate of $34,345,000. This category includes funds from the Department of Health and Human Services, Workforce Investment Act, Aging Program Grants and Head Start funds. 70 Criminal Justice Grants The 2008-09 grant revenue for criminal justice programs is estimated to be $8,493,000. This includes Police, Court and Law department grants. Grants include Universal Hiring grants totaling $1.0 million, $6.3 million in other Police Department grants, and renewals of ongoing state grants. Public Transit Grants The 2008-09 Federal Transit Administration Grant estimate is $9,742,000 reflecting an increase of $3,470,000 above the 2007-08 estimate of $6,272,000. Other Grants The 2008-09 budget also includes $31,073,000 for federal, state and other grants that provide funding for some parks and recreation and library activities as well as programs such as workforce development. Aviation Aviation revenue estimates include landing fees, concession revenues and interest income at Sky Harbor International, Deer Valley and Goodyear airports. Total Aviation revenue for 2008-09 is anticipated to be $343,078,000, which is $10,565,000 or 3.2 percent greater than the 2007-08 estimate of $332,513,000. The 2008-09 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 2004-05. Other Restricted Fees Community Development Block Grant ENTERPRISE FUNDS 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, Vehicle Impound fees, 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 2008-09 estimate of $18,361,000 is $535,000 above the 2007-08 estimate of $17,826,000. The increase is primarily due to projected increases in Fire Technical Support revenues and health insurance reimbursements. 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 2008-09 CDBG entitlement is $34,200,000. 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. Public Housing Grants The 2008-09 Public Housing grants revenue included in the annual operating budget is $68,348,000, which is a 3.2 percent decrease from 2007-08. 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. Human Services Grants The 2008-09 revenue estimate of $34,025,000 is $320,000 less than the 2007-08 estimate of $34,345,000. This category includes funds from the Department of Health and Human Services, Workforce Investment Act, Aging Program Grants and Head Start funds. 70 Criminal Justice Grants The 2008-09 grant revenue for criminal justice programs is estimated to be $8,493,000. This includes Police, Court and Law department grants. Grants include Universal Hiring grants totaling $1.0 million, $6.3 million in other Police Department grants, and renewals of ongoing state grants. Public Transit Grants The 2008-09 Federal Transit Administration Grant estimate is $9,742,000 reflecting an increase of $3,470,000 above the 2007-08 estimate of $6,272,000. Other Grants The 2008-09 budget also includes $31,073,000 for federal, state and other grants that provide funding for some parks and recreation and library activities as well as programs such as workforce development. Aviation Aviation revenue estimates include landing fees, concession revenues and interest income at Sky Harbor International, Deer Valley and Goodyear airports. Total Aviation revenue for 2008-09 is anticipated to be $343,078,000, which is $10,565,000 or 3.2 percent greater than the 2007-08 estimate of $332,513,000. The 2008-09 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 2004-05. SUMMARY OF AVIATION REVENUES (In Thousands of Dollars) Airline Operation Concessions and Rentals 2004-05 $ 84,039 2005-06 $ 89,005 2006-07 $ 92,056 2007-08 (Est.) $ 93,032 2008-09 (Est.) $ 94,832 126,490 153,814 176,579 190,806 198,995 32,919 34,520 34,000 34,500 Rental Car Facility Interest 6,644 6,850 10,426 7,845 7,800 Other/Federal Grants 7,304 3,041 5,676 2,582 2,624 Goodyear 1,820 1,725 415 1,469 1,499 Deer Valley 2,650 2,773 3,198 2,779 2,828 $228,947 $290,127 $322,870 $332,513 $343,078 14.6% 3.2% Total Aviation Revenue Change From Prior Year 4.3% 26.7% 11.3% SUMMARY OF WATER SYSTEM REVENUES (In Thousands of Dollars) 2007-08 (Est.) 2008-09 (Est.) 2004-05 2005-06 2006-07 Water Sales Environmental Consumption Charge Raw Water Charge Interest Development Fees Combined Service Fees Val Vista All Other $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 $211,380 31,337 16,080 15,963 8,712 2,163 7,194 19,105 $235,169 35,881 16,195 13,547 5,000 5,250 9,359 13,472 $258,905 42,686 16,438 6,847 5,500 5,175 8,200 13,066 Total Water Revenue $252,643 $297,711 $311,934 $333,873 $356,817 17.8% 4.8% 12.1% 6.9% Change From Prior Year 1.0% 71 Water System Wastewater System Solid Waste 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 2008-09 is projected to be $356,817,000, which is $22,944,000 or 6.9 percent more than the $333,873,000 estimate for 2007-08. The 2008-09 estimate reflects a full year’s impact from the March 2008 rate increase for water sales. It also reflects modest account growth coupled with a slightly lower overall consumption per account. The table on the previous page shows water system revenues by major category since 2004-05. 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 $218,409,000 in 2008-09, which is $1,599,000 or 0.7 percent greater than the 2007-08 estimate of $216,810,000. The 2008-09 estimate is based on moderate account growth of 1.5 percent and the full year’s realization of the March 2008 rate increase on sewer services. The table below shows Wastewater revenue by major category and annual percent change since 2004-05. This category includes revenues from the monthly residential collection and landfill tipping fees. The 2008-09 estimate of $136,900,000 is an increase of $3,223,000 or 2.4 percent greater than the 2007-08 estimate of $133,677,000. The increase assumes continuance of the January 2008 rate increase and a conservative growth in housing units of 1.8 percent. ____________________________________________________________________________________________________________ SUMMARY OF WASTEWATER SYSTEM REVENUES (In Thousands of Dollars) ____________________________________________________________________________________________________________ 2007-08 2008-09 2004-05 2005-06 2006-07 (Est.) (Est.) ____________________________________________________________________________________________________________ Sewer Service Charge $ 99,121 $110,902 $122,103 $135,012 $145,988 Environmental Charges 21,820 24,939 31,429 33,894 32,887 Development Fees 10,168 9,335 8,187 4,500 5,000 13,373 17,625 8,731 9,471 3,285 Interest Multi-City 16,705 17,261 19,242 20,764 21,175 Other 7,971 5,261 8,734 5,015 4,628 Total Wastewater Revenue Change From Prior Year 72 $159,070 $177,169 $203,068 8.4% 11.4% 14.6% $216,810 22.4% $218,409 0.7% 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 2.0 percent tax on restaurant and bar sales, construction, publishing, printing, and transportation and towing, plus a 2 percent portion of the 5.0 percent hotel/motel tax on rooms rented for 30 days or less. Earmarked sales taxes are expected to produce $64,622,000 in 2008-09, an increase of 5.0 percent above 2007-08. Convention Center operating revenues are expected to be $7,863,000, parking revenue is expected to be $6,433,000, and interest revenue is expected to be $1,500,000, for total revenue estimates of $80,418,000. This is $5,293,000 or 7.0 percent more than the 2007-08 total estimated revenue of $75,125,000. The increase is due to the estimated growth in earmarked sales tax categories, as well as higher parking and operating revenues expected as a result of the facility expansion. Tax estimates are consistent with General Fund sales tax estimates for the categories included in Convention Center. The following table shows the Convention Center excise tax collections since 2004-05. 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 following pie chart, contracting and tourism represent 91 percent of the sales tax revenue to this fund. Both industries are considered volatile; and both have experienced dramatic changes in the last several years. In the General Fund, however, contracting and tourism represent only 15 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. CONVENTION CENTER SALES TAXES (In Thousands of Dollars) Fiscal Year Amount Collected Increase/(Decrease) Amount Percent 2004-05 $48,003 $7,681 2005-06 56,889 8,886 2006-07 61,647 4,758 2007-08 (Est.) 61,533 (114) 2008-09 (Est.) 64,622 3,089 19.0% 18.5 8.4 (0.2) 5.0 2008-09 CONVENTION CENTER Earmarked Sales Taxes Tourism-related 49% Contracting 42% Other 9% The growth rate anticipated for 2007-08 reflects the current slowdown in the economy, while the growth rate for 2008-09 reflects some improvement. 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 2008-09 estimate of $7,047,000 is $717,000 or 9.2 percent below the 2007-08 estimate. This is due to the closing of Papago Golf Course from April 2008 through November 2008 for renovation. Upon reopening, Papago will be operated by a concessionaire and the city will receive an annual lease payment. 73 a y or M a tt ox , M ft ) C la u d e le ri a a om M fr ) d ft d es (s ea te in g fr om le n ci l in cl u s and n d (s ta n d ou m a a C , li y ly il it ee W C N ix eg gy , T h el d a T h e P h oe n e M a y or P el Jo h n so n on a n d V ic to n , M ic h a n a St g P h il G or d re Si m p lo t, G B a ie r, To m a ko w sk i. ow N el M ic h a 74 General Government MAYOR Mayor Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: The Mayor is elected on a nonpartisan ballot to represent the entire city for a four-year term that expires in January 2012. 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 2008-09 operating budget allowance of $2,075,000 is $241,000 or 10.4 percent less than 2007-08 estimated expenditures and reflects budget reductions including printing, temporary employment, training and the elimination of two mayor’s assistant positions. The reductions will adversely impact administrative support and policy advisement on issues affecting constituents. 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) 2006-07 2007-08* 2008-09 91% 91% 95% 1,040 1,030 574 650 625 650 *Based on 10 months of actual experience. **Based on 2006 Community Attitude Survey, which is administered in even-numbered years. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $2,244,000 $2,316,000 $2,075,000 20.0 20.5 18.5 Source of Funds: General Other Restricted $2,244,000 $2,315,000 $2,073,000 — 1,000 2,000 75 CITY COUNCIL City Council Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 even-numbered districts expire in January 2010. Terms for council members from odd-numbered districts expire in January 2012. 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. Budget Allowance Explanation 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*** Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $4,420,000 $4,478,000 $4,578,000 55.0 54.0 General Other Restricted 54.0 $4,374,000 $4,478,000 $4,578,000 46,000 — M a C ou n ci lte s u n d er a er op ix P h oe n ve rn m en t. fo rm of go 76 2007-08* 2008-09 91% 91% 95% N/A N/A 90 5,900 180 5,900 *Based on ten months of actual experience. **Based on 2006 Community Attitude Survey, which is administered in even-numbered years. ***This is a new measure. Prior year data is not available. Source of Funds: The 2008-09 City Council operating budget allowance of $4,578,000 is $100,000 or 2.2 percent more than 2007-08 estimated expenditures. The increase is due to normal inflationary increases and is offset with budget reductions including the elimination of an Administrative Assistant I position and reductions in district funding and other contractual items. 2006-07 — a n a ge r CITY MANAGER City Manager’s Office Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 operating budget allowance of $1,201,000 is $111,000 or 10.2 percent more than 2007-08 estimated expenditures. This is a result of budget reductions taken in 2007-08, one time contractual costs and normal inflationary increases that are partially offset by budget reductions in 2008-09. The combined reductions eliminate funding for consultants, out of state conferences, memberships with research organizations, other contractual services as needed, and the internship honoring former Phoenix City Manager Marvin A. Andrews. 2006-07 2007-08* 2008-09 Public satisfaction with city services ** 89% 90% 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% 97% 97% *Based on 10 months actual experience. **Based on 2006 Community Attitude Survey, which is administered in even-numbered years. ***Based on 2007 Employee Survey, which is administered in odd-numbered years. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $1,097,000 $1,090,000 $1,201,000 6.0 6.0 6.0 Source of Funds: General $1,097,000 $1,090,000 $1,201,000 DEPUTY CITY MANAGERS Deputy City Manager’s Office Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 operating budget allowance of $1,871,000 is $36,000 or 1.9 percent less than 2007-08 estimated expenditures. This reflects budget reductions, which are partially offset by normal inflationary increases. Reductions eliminate a management assistant III position responsible for coordinating special projects, a deputy city manager position resulting in greater workloads and less time to address management issues, funding for consultants, memberships with research organizations, and various contractual services. Additionally, it transfers funding of an administrative secretary position to the Aviation Department. 2006-07** 2007-08* 2008-09 Items processed for City Council subcommittee action N/A 160 160 Number of community and nonprofit meetings attended N/A 375 340 Percent of targeted program improvements implemented N/A 95% 95% *Based on 10 months actual experience. **This is a new measure. Prior year data is not available. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $1,845,000 $1,907,000 $1,871,000 23.0 21.0 20.0 Source of Funds: General Water $1,518,000 $1,565,000 $1,516,000 327,000 342,000 355,000 77 GOVERNMENT RELATIONS Government Relations Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: The Office of Government Relations represents the city, as appropriate, in contacts with federal, state, regional, county and other city governments. Government Relations also is charged with citywide grants coordination. Budget Allowance Explanation The Government Relations 2008-09 operating budget allowance of $1,435,000 is $43,000 or 2.9 percent less than 2007-08 estimated expenditures. This decrease is a result of budget reductions including the elimination of a management assistant II position. These reductions may adversely impact regional relationships and federal lobbying efforts. 2006-07 2007-08* 2008-09 Number of governments, communities, regional and private sector agencies, neighborhood associations, commissions and organizations communicated with during the year. 508 500 500 Number of Arizona state legislative bill versions and amendments evaluated and prepared to support or oppose. 3,164 3,500 3,500 *Based on 10 months actual experience. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $1,361,000 $1,478,000 $1,435,000 6.3 6.3 6.3 Source of Funds: General Other Restricted 2,000 5,000 2,00 PUBLIC INFORMATION Public Information Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 operating budget allowance of $3,277,000 is $24,000 or 0.7 percent more than 2007-08 estimated expenditures. The increase reflects replacement of broadcast equipment and sets for PHX 11 and normal inflationary increases, which are offset by the elimination of one full-time production specialist and a part-time media production specialist position. The budget also reduces the replacement of production sets, video equipment, photographic supplies, computer replacements and various contractual services including community advertising, graphic design and printing services. 78 $1,359,000 $1,473,000 $1,433,000 2006-07 2007-08* 2008-09 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) 235 235 200 138 148 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 2006-07 Operating Expense Total Positions 2007-08 2008-09 $3,537,000 $3,253,000 $3,277,000 31.0 30.0 29.5 Source of Funds: General Other Restricted $3,533,000 $3,233,000 $3,272,000 4,000 20,000 5,000 CITY AUDITOR City Auditor Impact of Recommendations Program Goal The City Auditor Department supports the city manager and elected officials in meeting residents’ needs for quality government, products and services by providing independent and objective feedback on the city’s programs, activities and functions. The city auditor’s work is vital in maintaining trust and confidence that city resources are used effectively and honestly. The City Auditor budget also funds an annual independent audit conducted by outside auditors in accordance with the City Charter. This includes an audit of city accounting and financial records, the federal single audit, review of the City of Phoenix Employees’ Retirement System, external audits of specific activities and review of business systems for possible improvements. Millions $4 $3 3.0 2.8 2.5 2.2 2.0 $2 $1 $0 2004-05 2006-07 2005-06 2007-08 2008-09 Fiscal Year City Auditor Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: Budget Allowance Explanation The City Auditor 2008-09 operating budget allowance of $3,082,000 is $139,000 or 4.3 percent less than 2007-08 estimated expenditures. The decrease is primarily due to budget reductions including the elimination of two internal auditors and one secretarial position, a reduction in contractual data security testing, a reduction in outreach recruitment efforts and replacing one full-time internal auditor with a part-time position. These reductions will result in fewer audits performed annually. These decreases are partially offset by normal inflationary increases. 2006-07 2007-08* 2008-09 Performance audit and management reports issued 161 145 140 Percentage of commitment dates met 90% 85% 92% 100% 100% 100% 145 145 140 $19,000 $19,000 $18,000 8.5 8.4 9.0 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 2006-07 Operating Expense Total Positions 2007-08 2008-09 $3,079,000 $3,221,000 $3,082,000 38.5 35.2 35.2 Source of Funds: General $3,079,000 $3,221,000 $3,082,000 79 EQUAL OPPORTUNITY Equal Opportunity Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 budget allowance of $3,648,000 is $41,000 or 1.1 percent less than 2007-08 estimated expenditures. The decrease includes the elimination of user technology specialist and equal opportunity specialist positions. The budget also includes reductions in travel, various contractual services, programming for a new Minority Women Small Business Enterprise (MWSBE) database and computer replacements. These reductions are partially offset by normal inflationary increases and a slight increase in federal grants. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $3,872,000 $3,689,000 $3,648,000 38.0 37.0 37.0 Source of Funds: General 80 $3,499,000 $3,320,000 $3,253,000 Community Development Block Grant 184,000 196,000 207,000 Federal and State Grants 100,000 124,000 139,000 Other Restricted 89,000 49,000 49,000 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 *Based on 10 months actual experience. 2006-07 2007-08* 2008-09 245 237 237 37 37 37 765/96% 809/101% 809/101% 694/139% 756/151% 756/151% 1,332 1,332 1,332 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 1999 2001 97 96 97 2003 2005 2007 75% Budget Allowance Explanation The Personnel Department 2008-09 operating budget allowance of $15,518,000 is $1,037,000 or 6.3 percent less than 2007-08 estimated expenditures. This decrease is the result of 2007-08 budget reductions in the General Fund, which are partially offset by normal inflationary increases. The 2008-09 budget reduces funding for replacement of office furniture and the outdated building alarm system, travel, employee benefit and compensation consultants, contracts for employee counseling, executive medical services, and reduced support of the city’s annual Community Service Fund Drive. The Language Education and Diversity Sensitivity (LEADS) program is reduced by 80 percent. Funding for job recruitment and outreach activities, advertising and executive search firms, development and training of city employees, and translation services provided to the public also is reduced. The 2008-09 budget eliminates funding for the parenting reference guide, and eliminates the City Store, a volunteer program run by retired city employees. Several positions are eliminated including staff assigned to the Employee Assistance Program (EAP), and staff responsible for testing, recruitment, and career counseling. Also, staff assigned to the LEADS program, the Labor Relations Division and the Employment Services Division are eliminated. The impact of these reductions will result in increased difficulty in finding highly qualified and diverse candidates, increased time to fill vacancies, increased staff workloads, a backlog in the processing of grievances and a reduced number of training classes available to city employees. 50% 25% 0% Fiscal Year *Results from the biennial Employee Opinion Survey. The next survey is scheduled for Fall 2009. Personnel Department Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: Annualized employee turnover rate Average work days from vacancy-to-fill date Number of recruitment processes Average work days for recruitment from opening to creation of eligibility list Employees participating in city-sponsored and language classes Number of industrial injuries per 200,00 man hours worked. 2006-07 2007-08* 2008-09 6.7% 6.0% 6.0% 74 85 85 1,196 900 900 23 24 24 9,200 9,000 5,000 13 13 13 *Based on 10 months actual experience. **Decrease in 2008-09 is due to budget reductions in employee training. Expenditure and Position Summary 2006-07 2007-08 2008-09 Operating Expense $15,485,000 $16,555,000 $15,518,000 Total Positions 116.4 111.4 111.4 Source of Funds: General City Improvement Other Restricted $14,159,000 $15,139,000 $14,290,000 1,076,000 1,076,000 979,000 250,000 340,000 249,000 81 PHOENIX EMPLOYMENT RELATIONS BOARD Phoenix Employment Relations Board Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 operating budget allowance of $221,000 is $6,000 or 2.6 percent less than 2007-08 estimated expenditures. This decrease is primarily due to budget reductions in various commodities, computer and furniture replacements, use of outside legal services and continued training for PERB board members. 2008-09 4 17 18 Expenditure and Position Summary Total Positions 2006-07 2007-08 2008-09 $196,000 $227,000 $221,000 2.0 2.0 2.0 $196,000 $227,000 $221,000 Source of Funds: General RETIREMENT SYSTEMS Retirement Systems Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 gross operating budget allowance of $1,830,000 is $40,000 or 2.2 percent more than 2007-08 estimated expenditures. This increase is due primarily to increased costs of software maintenance. This increase is partially offset by the elimination of an information technology systems specialist and a secretary II position. Also reduced are contractual services for pre-existing condition exams for Fire Department recruits that will now be conducted by the Fire Department, and reduced attendance at conferences for COPERS board members. 2006-07 2007-08* 2008-09 COPERS’ general city retirements 298 325 286 COPERS’ public safety retirements 330 209 192 516 682 540 Walk-in service 2,140 1,893 1,900 Telephone calls 13,236 9,728 10,050 COPERS’ general city and public safety member contacts Appointments *Based on 10 months actual experience. Expenditure and Position Summary 2006-07 Operating Expense (Gross*) Total Positions 2007-08 2008-09 $1,643,000 $1,790,000 $1,830,000 16.0 14.0 14.0 Source of Funds: General (Gross*) $1,643,000 $1,790,000 $1,830,000 *Gross costs are recovered through citywide assessments to all city departments. 82 2007-08* *Based on 10 months actual experience. **Number of cases filed may vary yearly depending upon specific issues encountered. Operating Expense Budget Allowance Explanation 2006-07 LAW Law Department Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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. Budget Allowance Explanation The Law Department 2008-09 operating budget allowance of $22,918,000 is $312,000 or 1.4 percent more than 2007-08 estimated expenditures. The increase is due to normal inflationary adjustments and is offset by budget reductions including the elimination of four attorneys and four legal support positions assigned to various trial courtrooms and civil litigation. 2006-07 2007-08* 2008-09 3,389 3,700 7,700** 51,675 55,000 55,000 1,280 1,400 1,400 36,297 44,000 44,000 Number of civil cases closed, including those assigned to outside counsel and handled through the alternative dispute resolution process 1,427 1,300 1,300 Ordinances and resolutions for City Council adoption drafted and reviewed 1,375 1,300 1,300 271 200 200 Criminal cases sent to diversion 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 Number of jury trials prosecuted *Based on 10 months actual experience. **The Prosecutor’s Office is in the process of completing a Request for Proposal selection process for an Underage Drinking Diversion Program. It is anticipated that in 2008-09 4,000 new cases will be sent to diversion upon implementation. Expenditure and Position Summary 2006-07 2007-08 2008-09 Operating Expense $20,786,000 $22,606,000 $22,918,000 Total Positions 252.0 250.0 250.0 Source of Funds: General $20,006,000 $21,797,000 $22,274,000 Court Awards 202,000 220,000 207,000 Federal and State Grants 487,000 500,000 374,000 91,000 89,000 63,000 Other Restricted 83 INFORMATION TECHNOLOGY Information Technology Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 costeffective 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 2008-09 operating budget allowance of $7,123,000 is $2,103,000 or 41.9 percent more than 2007-08 estimated expenditures. The increase reflects infrastructure and software costs to enhance network security, 2007-08 expenditure reductions, carryovers and normal inflationary increases. These increases are partially offset with reductions in funding for recruiting expenditures, deferring operating and maintenance costs for the Phoenix Wi-Fi network, elimination of an information technology analyst programmer III and the deferral of a licensed cable provider audit. 2006-07 2007-08* 2008-09 Percentage of on-time operations center services 99.9% 99.9% 99.0% Number of ITD-supported network devices 15,000 17,200 17,200 99.9% 99.8% 99.9% 99.9% 99.9% 99.9% 99.8% 99.9% 99.9% 99.9% 99.0% 99.0% 99.0% 99.9% 100% Critical systems availability percentage: Enterprise network Business systems Internet services Telephone network Microwave network Number of visits to phoenix.gov 12,000,000 Average cycle time of telephone service requests 2 weeks 2 weeks 2 weeks 93,972 89,277 97,000 0.94 hours 0.95 hours 0.95 hours 16,309 17,000*** 18,000*** Average number of CityCom phone calls processed daily Average cycle time of wireless communication repairs Units of portable and mobile radio equipment *Based on 10 months actual experience. **Increased visits to phoenix.gov are due to the expansion of e-commerce and increased amounts of information provided to citizens by city departments, and the increase in Internet users. ***Number of devices has increased due to network redesign and inventory of nodes and devices. Expenditure and Position Summary 2006-07 2007-08 2008-09 Operating Expense* $6,540,000 $5,020,000 $7,123,000 Total Positions 214.0 218.0 220.0 Source of Funds: General City Improvement $5,144,000 $3,289,000 $5,391,000 1,025,000 1,023,000 1,017,000 33,000 275,000 275,000 Aviation 234,000 227,000 231,000 Water 104,000 206,000 209,000 Other Restricted *Reflects net costs; most costs are charged to other departments for services provided. 84 16,300,000** 16,500,000** CITY CLERK AND ELECTIONS City Clerk Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: The City Clerk Department maintains orderly and accessible records of all city activities and transactions including posting all public meeting notifications; preparing agendas and minutes for City Council formal meetings; providing for effective administration of city elections and annexations; administering liquor, bingo and regulatory license services; and providing printing, typesetting, microfilming, document imaging, office automation and mail delivery services to all city departments. Budget Allowance Explanation The City Clerk 2008-09 operating budget allowance of $6,685,000 is $804,000 or 10.7 percent less than 2007-08 estimated expenditures. The decrease primarily reflects the non-recurring costs of a regularly scheduled citywide election, two City Council district run-off elections, a special Parks and Preserve Initiative election in 2007-08 and budget reductions. These reductions eliminate micrographic and word processing operations, reorganize the Election Division by reclassifying a deputy city clerk position and assigning administrative duties to a management assistant II, and eliminate an information technology analyst position responsible for technical customer support. Funding also was reduced for part-time election staff, mail services and technology support, and resources such as office supplies, reference materials and new equipment. 2006-07 2007-08* 2008-09 Number of Council formal and special meeting agenda items 3,500 3,500 3,500 Minute pages prepared 3,100 3,100 3,100 Open meeting law notices posted ** 5,000 6,000 5,000 Water bills and other items presorted for mailing 7.8 M 8.6 M 8.5 M 24 24 24 100% 100% 100% 40.1 M 43.1 M 40.0 M 5,742 5,500 5,400 0 3 0 Time to complete ballot processing and tabulation to obtain final unofficial results N/A 3 days N/A Percent of “how to” questions resolved by Office Systems Help Desk 98% 95% 95% Customer satisfaction with department 97% 95% 95% 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 *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. City Clerk _ Business License Activity Thousands 60 40 34 Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 City Improvement 34 32 32 20 $6,734,000 $7,489,000 $6,685,000 130.2 124.0 123.0 Source of Funds: General 31 0 $6,571,000 $7,324,000 $6,520,000 163,000 165,000 165,000 2004-05 2005-06 2006-07 2007-08 2008-09 Fiscal Year Beginning in 2005-06 the State of Arizona began licensing massage practitioners. 85 FINANCE Finance Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 Finance Department operating budget allowance of $24,521,000 is $221,000 or 0.9 percent less than 2007-08 estimated expenditures. The budget includes a reduction of 22 positions in Inventory Management, Banking and Cashiering, Tax, Accounting, Administration, Purchasing, and Financial Accounting and Reporting divisions. The budget also includes reduced funding for various contractual services and commodities; travel, training, and conferences; computer software licenses and support; and professional financial consultants. These reductions will negatively impact administrative support within the Finance Department and increase the workload of operations staff in each division. The budget reduction is partially offset by increases in personal services, reduced cost recovery by the Real Estate Division caused by a decreased workforce, and an increase in consulting services for complex city financial system changes. Expenditure and Position Summary 2006-07 2007-08 316.5 303.5 303.5 Source of Funds: General 715,000 703,000 625,000 Wastewater 702,000 702,000 699,000 24,000 58,000 60,000 2,000 (105,000) (75,000) Public Housing City Improvement 86 $24,377,000 $23,327,000 $23,157,000 Water Sports Facilities 52,000 57,000 2007-08* 2008-09 $1,766 mil. 4.67% 2.07 $1,587 mil. 4.64% 1.4 $1,600 mil. 4.00% 1.3 $102 mil. 3.64% .11 $143 mil. 3.26% .11 $200 mil. 3.40% .11 $1,236 mil. 5.18% .24 $1,350 mil. 4.29% .11 $1,400 mil. 2.00% .20 $3.2 bil. $3.1 bil. $3.1 bil. AAA 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 3,233 3,250 3,250 Receivables: Dollar value of receivables billed Percentage outstanding (as of June 30) $555 mil. 4.0% $564 mil. 2.86% $564 mil. 2.86% City sales (excise) tax collected $713 mil. $694 mil. $700 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. 2008-09 Operating Expense $25,872,000 $24,742,000 $24,521,000 Total Positions 2006-07 55,000 BUDGET AND RESEARCH Budget and Research Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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. 2006-07 2007-08* 2008-09 Percent variance of actual versus estimated expenditures for each major fund (data for the General Fund is shown) (0.9)% 0% -± 0.5% 0% -± 0.5% Percent variance of actual versus estimated revenues for each major fund (data for the General Fund is shown) (1.2)% 0% -± 0.5% 0% -± 0.5% Percent of Requests for Council Action processed within 24 hours 75% 75% 75% Cost savings and/or operational improvements identified (millions) $7.5 $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) 9.1 10.0 10.0 Customer satisfaction with capital budget development and impact fee support (scale of 1-10) 8.9 10.0 10.0 Percent of Capital Improvement Program budget encumbered 61% 65% 70% Budget Allowance Explanation The Budget and Research Department’s 2008-09 operating budget allowance of $4,087,000 is $114,000 or 2.7 percent less than 2007-08 estimated expenditures. The decrease reflects budget reductions in contractual services and commodity purchases, and the elimination of a secretary II and a budget analyst II position. A management intern position was restored with Water, Aviation and Solid Waste funds. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $3,993,000 $4,201,000 $4,087,000 33.0 31.0 31.0 Source of Funds: General Other Restricted $3,614,000 $3,791,000 $3,762,000 379,000 410,000 325,000 *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 88 114 120 110 90 100 75 0 2004-05 Budget Allowance Explanation The Engineering and Architectural Services Department 2008-09 gross operating budget allowance of $14,006,000 is $630,000 or 4.7 percent more than 2007 08 estimated expenditures. The gross operating budget reflects normal inflationary increases and is partially offset by reduced funding for computer application and system support, overtime and GPS equipment. These reductions will delay the development of project management software applications and create backlogs in the Geographic Technology Section. Engineering and Architectural Services – Construction Projects Awarded 2005-06 2006-07 Fiscal Year Expenditure and Position Summary 2006-07 2007-08 2008-09 Operating Expense $12,640,000 $13,376,000 $14,006,000 (Gross*) Total Positions 116.1 119.1 119.1 Source of Funds: General (Gross*) Other Restricted $12,640,000 $13,283,000 $13,983,000 — 93,000 23,000 *The majority of Engineering and Architectural Services’ costs are charged to the appropriate capital improvement projects. 2007-08 2008-09 Engineering and Architectural Services Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 Number of construction contract bids awarded 2007-08* 2008-09 94 90 100 289 290 290 Construction dollars as a percentage of total dollars awarded Minority-owned business enterprises Woman-owned business enterprises Small business enterprises 2.5% 3.1% 4.0% 2.0% 2.0% 7.0% 1.0% 1.0% 9.0%** Percentage of utility permits reviewed and approved by target date** 88% 85% 85% Number of engineering and architectural consultant contracts awarded *Based on 10 months actual experience. **Increase in SBE business is the result of improved and concentrated efforts in this business area. 89 ic e n ed fo r p ol te r is d es ig h op rc ic a el se h u es , a n d st a 10 9E n ta in re sc n gi n e A gu -e ou in m tw g, n ce ti re fi gh er fo rm a n g br u sh fi T h e h ig h -p s, in cl u d in on si is m re a n d fi e. a n d re sc u 90 Public Safety The Public Safety Program Represents 33.8% of the Total Budget. The Public Safety program budget includes the Office of the Public Safety Manager, Police Department, Fire Department, Emergency Management and Family Advocacy Center. POLICE Program Goal Budget Allowance Explanation 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. The Police Department 2008-09 operating budget allowance of $574,215,000 is $49,487,000 or 9.4 percent more than 2007-08 estimated expenditures. This increase is primarily due to normal inflationary adjustments, partial-year funding to operate the new Southwest Police Major Performance Measures and Service Trends The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2007-08* 2008-09 Average Response Time (Minutes) Priority 1 - Emergency Priority 2 - Non-Emergency Priority 3 - All Others Telephone Callbacks OFFICE OF THE PUBLIC SAFETY MANAGER Program Goal 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 the Emergency Operations Center. Percentage of phone calls to 911 and Crime Stop answered within 10 seconds Budget Allowance Explanation Percentage of cases cleared: Murder Rape Robbery Aggravated Assault Burglary Theft Auto Theft Arson The Office of the Public Safety Manager’s 2008-09 operating budget allowance of $381,000 is $22,000 or 6.1 percent more than 2007-08 estimated expenditures and is due to normal inflationary increases. Expenditure and Position Summary Operating Expense Total Positions 2006-07 2007-08 2008-09 $97,000 $359,000 $381,000 2.0 2.0 2.0 $97,000 $359,000 $381,000 Source of Funds: General Cases accepted by the county attorney for issuance of complaint Moving violation citations issued Traffic accidents 5.9 23.3 67.7 117.0** 5.6 22.4 58.6 87.3 5.4 22.5 62.2 92.7 83% 79%*** 83% 23,515 22,100 23,100 248,479 255,400 258,600 32,220 35,300 34,700 47% 19% 16% 39% 5% 13% 8% 9% 51% 22% 17% 40% 5% 15% 8% 12% 47% 22% 17% 40% 5% 14% 8% 10% *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, resulted in longer response times to calls. ***The 2007-08 percent of 9-1-1 calls answered within 10 seconds is low due to the installation of a new phone system and the temporary relocation of the call center for several months during the fiscal year. 91 Public Safety The Public Safety Program Represents 33.8% of the Total Budget. The Public Safety program budget includes the Office of the Public Safety Manager, Police Department, Fire Department, Emergency Management and Family Advocacy Center. POLICE Program Goal Budget Allowance Explanation 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. The Police Department 2008-09 operating budget allowance of $574,215,000 is $49,487,000 or 9.4 percent more than 2007-08 estimated expenditures. This increase is primarily due to normal inflationary adjustments, partial-year funding to operate the new Southwest Police Major Performance Measures and Service Trends The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2007-08* 2008-09 Average Response Time (Minutes) Priority 1 - Emergency Priority 2 - Non-Emergency Priority 3 - All Others Telephone Callbacks OFFICE OF THE PUBLIC SAFETY MANAGER Program Goal 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 the Emergency Operations Center. Percentage of phone calls to 911 and Crime Stop answered within 10 seconds Budget Allowance Explanation Percentage of cases cleared: Murder Rape Robbery Aggravated Assault Burglary Theft Auto Theft Arson The Office of the Public Safety Manager’s 2008-09 operating budget allowance of $381,000 is $22,000 or 6.1 percent more than 2007-08 estimated expenditures and is due to normal inflationary increases. Expenditure and Position Summary Operating Expense Total Positions 2006-07 2007-08 2008-09 $97,000 $359,000 $381,000 2.0 2.0 2.0 $97,000 $359,000 $381,000 Source of Funds: General Cases accepted by the county attorney for issuance of complaint Moving violation citations issued Traffic accidents 5.9 23.3 67.7 117.0** 5.6 22.4 58.6 87.3 5.4 22.5 62.2 92.7 83% 79%*** 83% 23,515 22,100 23,100 248,479 255,400 258,600 32,220 35,300 34,700 47% 19% 16% 39% 5% 13% 8% 9% 51% 22% 17% 40% 5% 15% 8% 12% 47% 22% 17% 40% 5% 14% 8% 10% *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, resulted in longer response times to calls. ***The 2007-08 percent of 9-1-1 calls answered within 10 seconds is low due to the installation of a new phone system and the temporary relocation of the call center for several months during the fiscal year. 91 Precinct, and new Public Safety Expansion funds approved by Phoenix residents in November 2007. Of the 575 positions added with Public Safety Expansion funding, it is anticipated that 389 will be hired by the end of 2008-09. These increases are partially offset by budget reductions including the elimination of 72 administrative and clerical support positions and one police commander. The reductions also include reduced funding for a variety of contractual, commodity and capital items such as replacement vehicles. Also offsetting the increase is the transfer of 10 victim services positions to the Family Advocacy Center to improve and better coordinate victim advocacy for victims of crime, sexual assault and domestic violence. In addition, the proposed budget converts six grant-funded positions in the Commercial Narcotics Interdiction Squad to General funds by reducing overtime, and adds one police sergeant to the Public Transit Safety Bureau with Public Transit funds. Expenditure and Position Summary 2006-07 Operating Expense 2007-08 2008-09 $458,448,000 $524,728,000 $574,215,000 Total Positions 4,371.7 4,966.7 4,964.7 Source of Funds: General $400,329,000 $435,460,000 $467,597,000 Public Safety Expansion — 17,842,000 38,422,000 Neighborhood Protection 21,647,000 24,811,000 25,335,000 Public Safety Enhancement 11,853,000 16,023,000 18,942,000 Federal and State Grants 13,259,000 16,344,000 8,118,000 Court Awards 5,572,000 5,088,000 6,198,000 City Improvement 3,795,000 5,133,000 5,177,000 200,000 2,234,000 2,579,000 Other Restricted Sports Facilities 993,000 993,000 1,022,000 Convention Center 782,000 782,000 805,000 18,000 18,000 20,000 Human Services Grant Police — Violent Crimes per 1,000 Residents 8 6.5 7.0 7.2 6.8 6.7 6 4 2 0 2004-05 2005-06 2006-07 Fiscal Year 92 2007-08 2008-09 Police — Property Crimes per 1,000 Residents 80 61 60 59 58 54 54 2007-08 2008-09 40 20 0 2004-05 2005-06 2006-07 Fiscal Year T h e P h oe n ix P ol ic e D ep a rt m en co m m u n ic t h a s 34 4 a ti on op er a to rs to re p ri or it iz e, ce iv e, a n d p ro ce ss ca ll s fo r se rv ic es . p ol ic e 93 FIRE Fire — First Unit Average Response Time Program Goal The Fire Department provides the highest level of life and property safety through fire prevention, fire control, and emergency medical and public education services. Minutes 5:11 6 5:00 5:08 5:00 4:56 4 Budget Allowance Explanation The 2008-09 Fire Department operating budget allowance of $302,959,000 is $39,141,000 or 14.8 percent more than 2007-08 estimated expenditures. This increase reflects normal inflationary adjustments, the carryover of funds to replace the department’s self-contained breathing apparatus (SCBA), and Proposition 1 funding which was approved by voters in November 2007. 2 0 2004-05 2005-06 2006-07 2007-08 Fiscal Year fi re fi gh te rs 10 0 sw or n e ir h to d l be u se t fu n d s w il n h a n ce m en es . E ty fe Sa P u bl ic io n se rv ic re p ro te ct im p ro ve fi 94 to 2008-09 These increases are partially offset by reduced funding for commodities and the replacement of equipment; deferring the opening of Station 62 located at 99th Avenue and Lower Buckeye Road; delaying the hiring of staff for Station 60 at 24th and Townley avenues due to construction delays; and the elimination of a media production specialist, caseworker II, two secretary IIs, user technology specialist and two fire battalion chiefs assigned to the alarm room. Adaptive Response Units will be used to ensure quality service continues while stations are being deferred. Fire — Percentage of Time First Unit Arrives on Scene in Four Minutes or Less 40% 31.3 29.3 30% 26.6 27.0 2006-07 2007-08 29.0 20% 10% 0% 2004-05 2005-06 2008-09 Fiscal Year Fire Department Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $240,086,000 $263,818,000 $302,959,000 2008.2 2,136 2,134 Source of Funds: General $212,028,000 $229,016,000 $257,087,000 Public Safety Enhancement 8,512,000 9,604,000 12,403,000 Neighborhood Protection 8,453,000 7,582,000 8,170,000 — 5,374,000 13,355,000 Development Services 1,895,000 2,575,000 2,643,000 Federal and State Grants 5,616,000 5,070,000 1,871,000 140,000 1,134,000 3,956,000 3,442,000 3,463,000 3,474,000 Public Safety Expansion Other Restricted City Improvement Percent of fire and emergency medical call responses within four minutes 2007-08* 2008-09 26.6% 27.0% 29.0% Patient transports to Valley hospitals via emergency medical vehicles 55,408 56,980 57,000 Percentage of time Advanced Life Support (ALS) medical calls are responded to with paramedic units within five minutes 44.0% 44.5% 46.0% Number of fire investigations to determine cause only 870 905 942 126,636 15,897 122,000 15,000 123,000 15,500 6,525 5,000 5,500 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 level trends will be achieved with the 2008-09 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. 2006-07 Customer satisfaction with homeland security efforts and security related communications *Based on 10 months actual experience. Budget Allowance Explanation The Emergency Management 2008-09 operating budget allowance of $793,000 is $44,000 or 5.9 percent more than 2007-08 estimated expenditures. The increase reflects normal inflationary increases and the carryover of federal and state grant funds. This increase is partially offset by general fund budget reductions in contractual and commodity line items. Expenditure and Position Summary Operating Expense Total Positions 2006-07 2007-08 2008-09 $769,000 $749,000 $793,000 6.5 6.0 6.0 Source of Funds: General 96 $306,000 $232,000 $251,000 Public Safety Enhancement 344,000 362,000 358,000 Grants 119,000 155,000 184,000 9 2007-08* 9 2008-09 9 FAMILY ADVOCACY CENTER Program Goal Family Advocacy Center Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 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. Phone calls received 3,098 2,600 5,200*** Victim contacts 5,561 5,250 9,000*** Services provided 3,619 2,700** 4,700*** Budget Allowance Explanation Presentation participants 3,990 2,100** 2,400*** The Family Advocacy Center 2008-09 operating budget allowance of $1,715,000 is $820,000 or 91.6 percent more than 2007-08 estimated expenditures. The increase reflects the transition of 10 victim services staff from the Police Department to enhance victim advocacy for victims of crime, sexual assault and domestic violence. This increase is partially offset with reductions in funding for victim services materials, domestic violence and sexual abuse education materials, the intern program and the elimination of the volunteer/intern coordinator position. These reductions will impact the center’s community outreach efforts. *Based on 10 months actual experience. **The decrease in services provided and presentation participants is due to vacancies in the volunteer coordinator and intern positions. ***The increase in service levels reflects the transition of the victim services staff from Police. 2006-07 2007-08* 2008-09 Expenditure and Position Summary 2006-07 Operating Expense Total Positions $824,000 7.0 2007-08 2008-09 $895,000 $1,715,000 17.0 17.0 Source of Funds: General Other Restricted $784,000 40,000 $843,000 $1,656,000 52,000 59,000 In O ct ob er 20 07 , P h oe n ix p a rt ic te rr or is m ip a te d in ex er ci se th T O P O F F IV a t en ga ge ty p e of d ec , a n a ti on d “t op of fi is io n -m a ki a l la rg e- sc ci a ls ” in a n g th ey w a le ll le ve ls of ou ld en co go ve rn m en u n te r in a t in th e re a l- w or ld d is a st er. 97 ri sd ic ti on t li m it ed ju es rg la ’s te s. te is th e st a U n it ed St a rt s in th e ip a l C ou rt u ic co n l u a M ip ix n ic T h e P h oe n bu si es t m u th e to p te n is a m on g 98 co u rt a n d Criminal Justice The Criminal Justice Program Represents 2.5% of the Total Budget. Municipal Court Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2007-08* 2008-09 72,278 78,000 78,000 277,903 261,000 270,000 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 2008-09 operating budget allowance of $42,541,000 is $1,603,000 or 3.9 percent more than 2007-08 estimated expenditures. The increase is due to normal inflationary increases and is offset by the elimination of six support staff positions. Three of 99 these positions were assigned to an environmental courtroom and three were assigned to a criminal courtroom. Additional reductions were also taken in various contractual line items. Municipal Court - Percent of criminal cases resolved within 180 days from case filing 100% 95.7% 97.3% 97.3% 2006-07 2007-08 2008-09 80% 60% Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 384.9 382.9 382.9 Source of Funds: General Other Restricted City Improvement 40% $38,118,000 $40,938,000 $42,541,000 $31,492,000 $33,115,000 $34,307,000 770,000 5,856,000 2,019,000 5,804,000 20% 0 2004-05* 2005-06* 2,699,000 5,535,000 Fiscal Year *Data not available prior to 2006-07 ic es a ti n g se rv a n d tr a n sl g n ti re . rp d es in te la n gu a ge ou rt p ro vi qu ir e si gn u n ic ip a l C ki n g or re M ea ix sp n h oe is h The P n on -E n gl ls w h o a re in d iv id u a 100 to PUBLIC DEFENDER Public Defender Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: The Public Defender Program provides legal representation for indigent defendants in Phoenix Municipal Court. Budget Allowance Explanation The Public Defender Program’s 2008-09 operating budget allowance of $4,937,000 is $318,000 or 6.9 percent more than the 2007-08 estimated expenditures. This increase is primarily due to normal inflationary adjustments and 2007-08 budget reductions for contracted court-appointed attorneys and expert witnesses. 2006-07 2007-08* 2008-09 Defendants charged with misdemeanor crimes represented in Phoenix Municipal Court 11,308 14,300 14,300 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) 26,819 32,000 30,000 *Based on 10 months actual experience. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $4,383,000 $4,619,000 $4,937,000 9.0 9.0 9.0 Source of Funds: General $4,383,000 $4,619,000 $4,937,000 101 em in to n d tu rn th cl e ti re s a bb er iz ed cy ru re of to y es 1, 70 0 m il te ch n ol og d e te th le d p re m ee n h a s co s. h oe n ix p io 88 , th e ci ty cy cl ed ti re In 19 62 , P lt . Si n ce 19 m il li on re a t h gh sp a ei d ed te ru bb er iz a n es ti m a a d s, u si n g a sp h a lt ro 102 Transportation The Transportation Program Represents 20.0% of the Total Budget. Street Transportation Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2007-08* 2008-09 187,000 179,000 180,000 Miles of streets per street maintenance field employee 15.6 15.6 15.8 Percent of scheduled requests for street maintenance service completed within target** 83% 80% 80% Percent of major/collector street miles with satisfactory rideability 98% 98% 98% 8,400 7,500 8,500 Customer satisfaction on traffic operations requests for service (scale 1 to 10) 9.0 9.3 9.0 Number of neighborhoods actively working with the Neighborhood Traffic Management Team**** 190 280 295 Miles of major streets constructed 5.4 5.5 5.9 Customer satisfaction on mid-block streetlight requests 97% 98% 98% 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 2008-09 operating budget allowance of $65,375,000 is $2,007,000 or 3.0 percent less than 2007-08 estimated expenditures. This decrease is primarily due to budget reductions, which are slightly offset by normal inflationary increases and the carry-forward of unspent 2007-08 funds for the remodeling of the Southwest Service Center, electrical repairs at the department’s sign shop and completion of a new roof for the signal shop. Reductions in the 2008-09 budget eliminate five positions including a middle manager and administrative support staff, which will result in service delays for Requests for services completed by the Operations Division*** *Based on 10 months actual experience. **The decrease in 2007-08 and 2008-09 is due to increased downtime for the repair of aging vehicles in need of replacement. ***The decrease in 2007-08 is due to training of new staff. The 2008-09 figure is expected to improve once training of new staff is completed. ****The increase in 2007-08 and 2008-09 is due to an increase in neighborhood requests for assistance. 103 internal customers. The budget also eliminates production of a training video for internal and external groups on permitting processes and requirements for safe construction zones, minimizing safety hazards for cars and pedestrians; eliminates funding for material testing of street surface repairs done by street maintenance staff; and eliminates the capital replacement of a robotic station used by survey crews to collect and record data on completed projects. Also, funding that allows the Street Maintenance Safety Committee to review and test safety products is reduced. The budget converts funding of the Traffic Management System Maintenance contract from the General Fund to the Arizona Highway User Revenue Fund. General Fund contracts for freeway landscape maintenance, quick concrete response and wash maintenance will be converted to the Capital Construction Fund. This will reduce funding for screen walls, guard/rail/barriers, speed humps, illuminated street signs and local street improvements. Expenditure and Position Summary 2006-07 Operating Expense 2007-08 2008-09 $64,356,000 $67,382,000 $65,375,000 Total Positions 781.0 784.0 784.0 Source of Funds: General $25,762,000 $29,449,000 $25,978,000 Arizona Highway User Revenue 38,103,000 37,441,000 38,900,000 City Improvement 398,000 400,000 398,000 Federal and State Grant 30,000 26,000 32,000 Other Restricted 63,000 66,000 67,000 Street Transportation – Miles Resurfaced and Sealed Number of miles (includes total miles of sealcoat and asphalt overlay) 300 250 200 186 143 150 126 111 99 100 0 2004-05* 2005-06** 2006-07** 2007-08*** 2008-09**** 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. ***Microsealing is done every other year and is not scheduled for 2007-08. ****Increase in 2008-09 due to additional capital improvement funds. 104 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 43.0 44 42 Budget Allowance Explanation 40 The Aviation 2008-09 operating budget allowance of $214,109,000 is $9,390,000 or 4.6 percent more than 2007-08 estimated expenditures. This increase reflects the addition of expanded bus service needed during the construction of the Automated Train Project and normal inflationary adjustments. 38 41.7 44.0 41.9 40.5 36 34 32 30 2004-05 2005-06 2006-07 2007-08 2008-09 Fiscal Year Sk y H a rb or N a vi ga to rs a re a gr ou vo lu n te er s w h os e m p of fr ie n d is si on is to ly th ro u gh Sk m a ke tr a ve y H a rb or li n g In te rn a ti on a ea si er a n d l A ir p or t fa m or e en jo y a bl e. N a st er, d ir ec ti on s, vi ga to rs p in fo rm a ti ro vi d e on a n d fr ie n d ly a ss is ta n ce . 105 The 2008-09 budget also adds six support staff for implementation of a GIS system and to assist with new federal security mandates. A building equipment operator is added to provide maintenance for newly acquired facilities. Aviation Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2007-08* $52.56 $56.16 $63.72 $53.88 $57.96 $66.72 $56.57 $60.86 $70.06 $6.40 $9.16 $8.06 $6.68 $10.02 $8.32 $6.88 $10.32 $8.56 Aircraft takeoffs and landings (Sky Harbor Airport only) 544,296 540,000 540,000 Total international passengers 1,741,088 1,700,000 1,750,000 293,835 305,000 310,000 Airline rental rates (cost per square foot): Terminal 2 Terminal 3 Terminal 4 Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $189,009,000 $204,719,000 $214,109,000 853.7 861.7 868.7 Source of Funds: Aviation Gross sales per departing passenger: Terminal 2 Terminal 3 Terminal 4 $189,009,000 $204,719,000 $214,109,000 Air cargo processed (in tons) *Based on 10 months actual experience. 106 2008-09 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 2008-09 operating budget allowance of $240,175,000 is $22,430,000 or 10.3 percent more than 2007-08 estimated expenditures. This increase is primarily due to full-year costs of service added in 2007-08, a significant increase in fuel costs, the addition of a sergeant for the Transit Safety Bureau (position is included in the Police Department budget) and normal inflationary increases. These increases are offset by General Fund expenditure reductions. Thousands 200 153 150 148 149 151 2006-07 2007-08 157 100 50 0 2004-05 2005-06 2008-09 Fiscal Year T h e Wes t Tr a n si t F a ci li ty, lo ca te ca p a ci ty to d on a 25 -a se rv e a fl ee cr e si te in t of 25 0 Va so u th w es t ll ey M et ro P h oe n ix , h bu se s. a s th e 107 The General Fund expenditure reductions include the utilization of savings from a new bus shelter maintenance and advertising contract and the elimination of bus routes being replaced by the light rail system. Reductions also include eliminating municipal security guard positions added in 2007-08 for park-and-ride facilities and transit centers (positions are included in the Police Department budget.) Security would continue to be provided with contracted security services. In addition, the reductions include the elimination of two positions providing contract oversight and information technology support. Other reductions include reduced frequency of cleaning for bus stops with no furniture, reduced funding for replacement of office equipment, reduced marketing and customer communication, and reduced training and travel for staff and members of the Citizens Transit Commission. Expenditure and Position Summary 2006-07 Operating Expense 2008-09 $181,094,000 $217,745,000 $240,175,000 Total Positions 99.0 125.0 125.0 Source of Funds: General $26,146,000 $26,763,000 $24,348,000 Transit 2000 92,044,000 123,698,000 144,656,000 City Improvement 38,129,000 Local Transportation Assistance 39,996,000 41,900,000 6,860,000 6,808,000 6,744,000 Regional Transit 12,415,000 15,057,000 17,379,000 Federal Transit Authority 5,500,000 5,423,000 5,148,000 ee e of fi ve fr D A R T is on a re or rs t to or la u sp n rc e rh oo d ci ol vi n g Tr a bo ev gh su ch a s th R s ei a N ce re . la A P h oe n ix t R id ge te lo ca l p in ri s vo se fa bu r T h e D es er r ei to ce to th oo d ci rc u la or t d is ta n n ei gh bo rh si d en ts a sh te r. re t ge to n in te n d ed m u n it y ce or e or co m gr oc er y st 108 2007-08 Public Transit Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 Cost recovery from fares 2007-08* 2008-09 21.3% 19.4% 19.7% $27,612 $31,304 $35,477 On-time performance for bus service 88% 89% 89% On-time performance for Dial-a-Ride prescheduled service 92% 92% 92% On-time performance for Dial-a-Ride on-demand service 53% 48% 48% Average weekday ridership for bus service 149,117 150,844 153,107 Average weekday ridership for Dial-a-Ride service 1,330 1,297 1,313 Passengers per revenue mile for bus service 2.43 2.21 2.25 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 expected increases in ridership and a full-year of the new fare policy, which was initiated in December 2007. 109 nd p er m it s a en t is su es m and rt gs a in ep d D t Se rv ic es fe ty of bu il en sa e m th op el re u rb a n T h e D ev es to en su h a n ce th e il d in g co d en ts th a t en m en fo rc es bu ve . ro ty p li ta e si te im on om ic vi co m p a ti bl ro m ot e ec en t a n d p m n ro vi en 110 Community Development The Community Development Program Represents 8.0% of the Total Budget. Development Services Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2007-08* 2008-09 43,894 33,700 27,500 Single-family permits issued 7,251 2,600 1,200 Multi-family units permitted 7,115 4,700 3,000 38.0 million 31.2 million 21.3 million 326,648 304,300 276,200 93% 94% 96% 93% 96% 94% 8,663 4,486 3,000 123,267 108,000 100,000 14 minutes 11 minutes 11 minutes Total construction permits issued Commercial square footage permitted** The Community Development program budget includes Development Services, Planning, Business Customer Service Center, Housing, Community and Economic Development, International 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 Residential lots submitted for preliminary review Counter customers served DEVELOPMENT SERVICES Average wait time Program Goal 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. *Based on 10 months actual experience. **New commercial square footage has been adjusted to include multi-family buildings (three or more family units). Changes in single-family permits, multi-family permits and commercial square footage permitted, and number of inspections are primarily due to market forces. Budget Allowance Explanation Expenditure and Position Summary The Development Services 2008-09 operating budget allowance of $44,356,000 is $6,487,000 or 12.8 percent less than 2007-08 estimated expenditures. This decrease results primarily from the effects of the housing market which significantly reduced the department’s workload and corresponding revenues. Overall, the 2008-09 budget is $16.8 million lower than the original 2007-08 budget and reflects the elimination of 191 positions. These reductions were necessary to keep expenditures in line with current 2006-07 Operating Expense Total Positions 2007-08 2008-09 $53,350,000 $50,843,000 $44,356,000 570.0 386.0 386.0 Source of Funds: Development Services General Other Restricted $52,878,000 $50,221,000 $43,734,000 — 71,000 108,000 472,000 551,000 514,000 111 revenue collections. The budget eliminates administrative staff including accounting, technology support, and counter support staff, residential inspectors responsible for inspecting residential construction, civil and site inspection staff responsible for inspecting off site infrastructure improvements for residential and commercial projects, and a major commercial plan review team responsible for plan review and permitting services for large commercial construction projects. Other reductions include eliminating funding for Web site development and additional online permitting, eliminating leased space, eliminating temporary staff support, and reducing fuel, furniture and technology expenses. Development Services – Value of Permits Issued Billions $5.4 $6 $4.5 $5 $4.2 $4 $3.7 $3 $2.4 $2 $1 $0 2004-05 2005-06 2006-07 PLANNING Planning Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 budget allowance of $7,536,000 is $306,000 or 3.9 percent less than 2007-08 estimated expenditures. The decrease is due to the elimination of seven positions. These include technical positions assigned to GIS (Geographical Information Systems), graphic design, planning, secretarial support and two management level positions. The elimination of these positions will adversely impact general support of the department and village planning committees. 2006-07 Village planning committees supported 2007-08* 2008-09 15 15 15 Zoning adjustment hearing officer cases scheduled within 30 working days of request 99% 90% 88% Formal rezoning pre-application meetings scheduled within 20 working days of request 100% 100% 90% 63% 91% 80% Zoning verification letters completed within 15 working days *Based on ten months actual experience. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $7,960,000 $7,842,000 $7,536,000 75.9 69.9 68.9 Source of Funds: General $6,970,000 $7,060,000 $6,745,000 Community Development Block Grant 63,000 Other Restricted 112 2008-09 2007-08 Fiscal Year 927,000 63,000 64,000 719,000 727,000 revenue collections. The budget eliminates administrative staff including accounting, technology support, and counter support staff, residential inspectors responsible for inspecting residential construction, civil and site inspection staff responsible for inspecting off site infrastructure improvements for residential and commercial projects, and a major commercial plan review team responsible for plan review and permitting services for large commercial construction projects. Other reductions include eliminating funding for Web site development and additional online permitting, eliminating leased space, eliminating temporary staff support, and reducing fuel, furniture and technology expenses. Development Services – Value of Permits Issued Billions $5.4 $6 $4.5 $5 $4.2 $4 $3.7 $3 $2.4 $2 $1 $0 2004-05 2005-06 2006-07 PLANNING Planning Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 budget allowance of $7,536,000 is $306,000 or 3.9 percent less than 2007-08 estimated expenditures. The decrease is due to the elimination of seven positions. These include technical positions assigned to GIS (Geographical Information Systems), graphic design, planning, secretarial support and two management level positions. The elimination of these positions will adversely impact general support of the department and village planning committees. 2006-07 Village planning committees supported 2007-08* 2008-09 15 15 15 Zoning adjustment hearing officer cases scheduled within 30 working days of request 99% 90% 88% Formal rezoning pre-application meetings scheduled within 20 working days of request 100% 100% 90% 63% 91% 80% Zoning verification letters completed within 15 working days *Based on ten months actual experience. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $7,960,000 $7,842,000 $7,536,000 75.9 69.9 68.9 Source of Funds: General $6,970,000 $7,060,000 $6,745,000 Community Development Block Grant 63,000 Other Restricted 112 2008-09 2007-08 Fiscal Year 927,000 63,000 64,000 719,000 727,000 BUSINESS CUSTOMER SERVICE CENTER Business Customer Service Center Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 The Business Customer Service Center 2008-09 operating budget allowance of $553,000 is $39,000 or 6.6 percent less than 2007-08 estimated expenditures. This reflects a budget reduction in staff that provides specialized plan review and assistance for businesses that are starting or expanding in Phoenix. 2006-07 Infill housing permits issued** 2007-08* 2008-09 68 16 40 Infill customers served** 1,387 405 715 Business customers served 2,254 2,630 2,440 Customer assistance provided*** 8,872 5,950 6,000 *Based on 10 months actual experience. **Infill housing permits issued and customers served are influenced by the housing market, which is currently experiencing a downturn. Additionally, program requirements were revised effective May 19, 2008, and are expected to attract more customers to the program. Customer assistance provided has experienced considerable change as staff adjusts how customers are counted. ***Formerly listed as customers receiving regulatory assistance. Expenditure and Position Summary 2006-07 2007-08 2008-09 Operating Expense $450,000 $592,000 $553,000 Total Positions**** 4.0 1.9 2.4 Source of Funds: General $350,000 $352,000 $313,000 Water 50,000 120,000 120,000 Wastewater 50,000 120,000 120,000 ****In 2007-08, a full-time position was converted to a part-time position. The elimination of the full-time position occurred in 2007-08 however, the addition of the part-time position occurred in 2008-09. 113 HOUSING Budget Allowance Explanation Program Goal The 2008-09 Housing Department operating budget allowance of $84,285,000 is $1,174,000 or 1.4 percent more than 2007-08 estimated expenditures. The increase reflects the addition of 22 positions needed to maintain lease-up rates for conventional housing units and the Section 8 voucher program. Many of these positions are temporary and will not be needed once the department implements its new business system. Also reflected is the conversion of a budget analyst II position to a management services administrator. Additionally, Community Development Block Grant funds are expected to be decreased by 41.7 percent in 2008-09. 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 2006-07 Operating Expense Total Positions Source of Funds: Public Housing Other Restricted Community Development Block Grant General City Improvement Federal and State Grants 2007-08 2008-09 $61,552,000 $83,111,000 $84,285,000 148.7 150.7 171.7 $59,833,000 $75,513,000 $78,224,000 860,000 3,762,000 3,855,000 608,000 179,000 72,000 3,420,000 235,000 71,000 1,993,000 143,000 70,000 — 110,000 — Housing Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2008-09 Affordable housing units for families and individuals 1,382 1,382 1,382 Rental assistance provided for low-income residents in the private housing market 5,320 5,388 5,524 City-owned and operated public housing units for families and seniors 2,335 2,479 2,466 Percent of Section 8 vouchers under lease 85% 95% 95% Occupancy rate for public housing units 90% 98% 98% *Based on 10 months actual experience. 114 2007-08* 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 Department’s 2008-09 operating budget allowance of $18,603,000 is $687,000 or 3.6 percent lower than 2007-08 estimated expenditures. This decrease is primarily due to reductions in Community Development Block Grant allocations. Also reflected are General Fund budget reductions including the elimination of a secretary III, a project manager, two project management assistant positions, reduced funding for the International Program interns and computer replacements. Expenditure and Position Summary 2007-08 2006-07 Operating Expense 2008-09 $18,565,000 $19,290,000 $18,603,000 Total Positions 115.0 111.0 111.0 $3,744,000 $3,772,000 $3,734,000 Source of Funds: General Community Development Block Grant City Improvement Sports Facilities 716,000 1,430,000 461,000 2,541,000 2,542,000 2,533,000 — 40,000 40,000 69,000 68,000 69,000 Water 532,000 551,000 572,000 Convention Center 134,000 135,000 137,000 10,498,000 10,479,000 10,756,000 Aviation Federal & State Grant Trust Community Reinvestment Other Restricted Human Services Grant 84,000 78,000 80,000 184,000 195,000 221,000 63,000 — — Community and Economic Development Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 Projected jobs created/retained within the city of Phoenix as a result of department efforts 2007-08* 2008-09 5,676 5,300 6,600 3 8 9 10 1 N/A** Estimated sales tax generated from projects $55,267,422 $54,000,000 $54,600,000 Projected average annual salary for new jobs with companies newly located in Phoenix $43,000 $38,000 $43,000 1,584 1,215 1,600 1,100 1,500 1,100 Loan applications approved for the Expand Collateral Loan Assistance Program Loans approved for the New Markets Tax Credit Loan Program Individuals served 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 2008-09. 115 Budget Allowance Explanation INTERNATIONAL ECONOMIC DEVELOPMENT The International Economic Development function’s 2008-09 operating budget is $217,000 and reflects the full-year costs associated with this newly created function which is designed to enhance the city’s economic development activities on an international level. Program Goal The International Economic Development function provides a comprehensive approach to the city's international economic agenda by enhancing existing programs that target foreign direct investment, trade, job creation and tourism. This is accomplished through coordination, collaboration and communication among city, state and public/private organizations. 2006-07 2007-08 2008-09 Operating Expense — — $217,000 Total Positions — — 1.0 — — $217,000 Source of Funds: General DOWNTOWN DEVELOPMENT OFFICE Downtown Development Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 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. The Downtown Development Office 2008-09 operating budget allowance of $4,344,000 is $166,000 or 4.0 percent more than 2007-08 estimated expenditures and reflects budget reductions occurring in both 2007-08 and 2008-09. These reductions include cuts in business travel, consultant funding, appraisals, lot cleanings and printing costs for downtown projects; reduced costs for plan review and event partnering; and the elimination of an economic development program manager. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $4,067,000 $4,178,000 $4,344,000 16.0 15.0 15.0 Source of Funds: General $3,564,000 $3,636,000 $3,782,000 Sports Facilities 106,000 110,000 114,000 Convention Center 417,000 432,000 448,000 (20,000) — — Community Reinvestment 2006-07 Number of development/redevelopment projects in process 2007-08* 2008-09 35 39 39 $2,725,000 $3,082,000 $2,850,000 Number of residential units created 212 234 992** Projected jobs created downtown as a result of department efforts 380 201 1,866*** Estimated construction value of projects (in millions) Budget Allowance Explanation 116 Expenditure and Position Summary *Based on 10 months actual experience. **Projections for increase in residential units in 2008-09 results from the completion of Taylor Place (ASU Student Housing), Alta Lofts and 44 Monroe. ***Projections for 2008-09 job creation will result from the Downtown Sheraton Hotel opening. 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 Calendar Days 100 75 61 56 53 50 51 53 2007-08 2008-09 25 The Neighborhood Services 2008-09 operating budget allowance of $48,845,000 is $16,150,000 or 49.4 percent more than 2007-08 estimated expenditures. This increase reflects the effect of the carry-forward of unspent grant allocations budgeted in 2007-08. The General Fund budget of $15,353,000 is $763,000 or 5.2 percent more than the 2007-08 estimated expenditures. The General Fund increase 0 2004-05 2006-07 2005-06 Fiscal Year T h e go a l of th e “H el p P u t th e D ia N ei gh bo rh m on d B a ck oo d – K ee p It C le a n in to Yo u r in cr ea se p !” ca m p a ig u bl ic a w a n is to re n es s of n su p p or t on ei gh bo rh oo go in g ef fo d is su es a rt s to m a in n ei gh bo rh nd ta in vi br a oo d s. n t P h oe n ix 117 reflects the carry-forward of unspent but committed Fight Back funds and normal inflationary adjustments offset by budget reductions. The General Fund budget reduces contractual funding for blight abatement activities, code enforcement computer upgrades, and Fight Back program grants to assist neighborhood improvement efforts. Additionally, budget reductions include eliminating a middle manager position assigned to the Westside Revitalization program; a curriculum and training coordinator position used to develop, coordinate and provide training for neighborhood associations; three administrative support positions providing fiscal, personnel and administrative assistance; three preservation inspectors responsible for code enforcement citywide; two neighborhood specialist positions providing information and support to neighborhood groups; and an information technology programmer position. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $32,330,000 $32,695,000 $48,845,000 235.0 235.0 235.0 Source of Funds: General Community Development Block Grant 118 $14,348,000 $14,590,000 $15,353,000 12,553,000 14,354,000 27,038,000 Federal and State Grants 2,050,000 2,497,000 2,939,000 Public Housing 2,911,000 891,000 3,218,000 Other Restricted 166,000 60,000 — City Improvement Funds 302,000 303,000 297,000 Neighborhood Services Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 Residents who receive landlord/tenant counseling(1) 2007-08* 2008-09 7,391 6500 7200 943 800 900 $30,848,670 $12,127,746 $5,943,783 63,723 90,000 90,000 Homeowner-occupied housing rehabilitation projects completed(5) 288 600 600 Percent of neighborhood preservation cases resolved voluntarily 86% 84% 84% Neighborhood preservation average response time from first call to initial inspection for occupied/non-hazard cases (in calendar days) 10 9 10 Neighborhood preservation average response time from first call to initial inspection for vacant/non-hazard/other non-pre-notification cases (in calendar days) 5 4 4 Properties acquired/demolished/redeveloped for neighborhood revitalization purposes 2 44 11 Neighborhood cleanup/resident meetings facilitated(2) Dollar value of infrastructure and development projects completed(3) Sites where graffiti was removed through the Graffiti Busters Program *Based on 10 months actual experience. Residents receiving landlord/tenant counseling is based on community demand. (2) Neighborhood cleanup/facilitated meetings participation is determined by residents. Neighborhood Services staff continue to promote and participate in regular monthly neighborhood cleanups and facilitate resident meetings. (3) Dollar value of infrastructure and development projects completed includes public and private investment in commercial and residential revitalization. The significant decrease is due to the Trend Homes “Copper Leaf” infill project nearing completion. (4) Additional Graffiti Busters staff was added in 2007-2008. (5) Increase of homeowner-occupied housing rehabilitation projects completed is due to increased efficiency and program marketing. (6) The 2007-08 variance is due to delayed funding in the 2006 Bond Program. (1) HOPE VI PROJECT Budget Allowance Explanation Program Goal The Hope VI Project 2008-09 gross operating budget allowance of $493,000 is $714,000 or 59.2 percent less than 2007-08 estimated expenditures. This decrease reflects the reclassification of a management assistant III position to a management assistant II position and the carryover of a receivable for reimbursement of administrative costs associated with the A. L. Krohn HOPE VI application. The Hope VI Project will reconstruct the obsolete Matthew Henson and Krohn West public housing sites 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. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $983,000 $1,207,000 $493,000 11.5 9.5 9.5 $978,000 $1,207,000 $493,000 Source of Funds: General (Gross*) Hope VI $5,000 – – *Gross costs are charged to the Hope VI federal grant and Conventional Housing funds. T h e M a tt h ew H en so n HOPE VI P m u lt i- fa m ro je ct in cl il y ga rd en u d es si n gl a p a rt m en Va ri ou s gr e- fa m il y d ts , d u p le x ee n bu il d in et a ch ed h om to w n h ou se g fe a tu re s p ro vi d in g es , s a n d a se h a ve be en gr ea t en vi n io r co m p in te gr a te d ro n m en ta le x. in to th e co l, ec on om ic a n d so ci m m u n it y a l be n ef it s. 119 ip a l er t m u n ic la rg es t d es 's se ba ck ld or h or w g, n e g, cl im bi P a rk is th in in ik h ta r n fo ou s il So u th M il es of tr a ri n g 58 m n g. ki p a rk fe a tu bi in ta d m ou n ri d in g a n 120 Community Enrichment The Community Enrichment Program Represents 11.2% of the Total Budget. 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. The budget provides for additional staff and operating costs to open and maintain new or improved park facilities constructed primarily with 2006 bonds. This includes maintenance and recreational activities for the Downtown Civic Space Park and Phase II of the Reach 11 Sports Complex. The budget also provides staff and other operating costs for landscape maintenance of new streets citywide. The 2008-09 budget eliminates 220.2 positions throughout the Parks and Recreation Department. The budget eliminates administrative staffing in several divisions including a deputy parks and recreation director, and reduces funding in various commodity and contractual costs including private security services at various central city park facilities. Staff reductions also include park rangers responsible for patrolling and enforcement of preserves and undeveloped park land, and staff responsible for general park maintenance, street landscape maintenance, palm tree pruning in residential neighborhoods, graffiti removal and specialized maintenance. Maintenance staff that coordinated various work alternative projects for community service opportunities also was reduced. The budget reduces hours and recreation programming at various cultural facilities, all community centers and swimming pools; closes small, minimally used recreation centers and eliminates recreation programming at Cesar Chavez High School and Palomino Park; eliminates recreation support of Human Services Department’s senior programs at South Mountain and Devonshire Community Senior centers; delays the opening of the 35th Avenue Learning Center and Phoenix Center North building; eliminates overtime in support of several promoter-backed 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. Summer Recreation and After-School Programs _ Number of Participants Millions 8 7.2 7.2 6 4.5 4 Budget Allowance Explanation The 2008-09 Parks and Recreation budget allowance of $112,626,000 is $5,631,000 or 4.8 percent less than 2007-08 estimated expenditures. This decrease is the result of budget reductions, some of which became effective the last two and a half months of 2007-08. Reductions are slightly offset by a full-year’s operating costs for facilities opened in 2007-08, operating costs for new or expanded facilities opening in 2008-09, and normal inflationary adjustments. 1.9 2 1.8 0 2004-05 2005-06 2006-07* 2007-08** 2008-09*** Fiscal Year *2006-07 participation rates changed due to use of new software that reduced duplicate counting of participants. **2007-08 decrease is due to budget reductions for this program and continued use of new counting system. ***2008-09 decrease reflects further budget reductions. 121 events including the People’s Pop Concert series and other medium-sized events including setup for these events; eliminates staff and coordination of the X-Tattoo program and Plan-it League summer employment program; eliminates staff and support of the Latino Institute, recreation intern, and Summer Youth Work Experience programs; eliminates supervised youth sports programming, community use of the Maryvale Baseball Park, staff support of the Arizona Senior Olympics programs and reduces usage of Camp Colley; eliminates the General funds that leverage grant funds for the Clear Path and Tribal Outreach programs, which ends grant funding of these employment training programs; and reduces funding for after-school programs citywide. In addition to budget cuts, the budget also increases revenues through new or increased recreational and/or admission fees, which avoids further reductions in recreation programming. This includes implementing a new fee for youth and increasing the adult fee for athletic field usage, increasing softball league fees, increasing swim lessons and swim team fees, increasing admission fees to the Pueblo Grande Museum and for recreational swimming, and implementing an annual fee to purchase a recreation pass for use at community centers. The budget also converts funding for various services. Neighborhood Block Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $112,012,000 $118,257,000 $112,626,000 1,613.9 1,485.6 1,491.4 Source of Funds: General 122 $104,724,000 $110,386,000 $105,223,000 Other Restricted 3,109,000 3,552,000 3,649,000 City Improvement 1,897,000 1,937,000 1,979,000 Federal and State Grants 1,562,000 1,695,000 1,090,000 Convention Center 434,000 489,000 493,000 Parks and Preserves 174,000 185,000 192,000 Golf 112,000 13,000 — Watch funds will support park rangers to patrol and enforce city codes at developed city parks through 2008-09, the River Rampage program will be partially supported by private donations committed through 2009-10, the Electric Light Parade and Fabulous Phoenix Fourth events will be funded by working with the community to find private funding sources, and the cost of printing class catalogs and other material will be transferred from the General Fund to the accounts which are funded by recreation program registration fees. Parks and Recreation Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2007-08* 2008-09 Acres maintained(1) Developed parks Undeveloped park land Parkways and medians Preserves/desert parks 4,482 3,858 896 29,719 4,765 2,007 1,015 31,218 4,780 2,190 1,200 31,800 Cost per acre for annual maintenance(2) Developed parks Undeveloped park land Preserves/desert parks $8,000 $2,257 $224 $7,856 $4,530 $223 $8,900 $4,600 $220 3.00 3.00 3.00 85,000 56,000 60,000 Youth Development participants 232,000 306,000 300,000 Aquatic participants 964,000 862,000 800,000 36,000,000 31,000,000 27,000,000 Acres of developed parks per 1,000 population Number of volunteer hours (3) (4) All other recreation services participants(5) *Based on 10 months actual experience. (1) An internal audit was conducted at the end of 2007 which re-calculated how acres were categorized. This resulted in a revision of the number of acres for each category in the 2007-08 and 2008-09 figures. (2) Department does not keep data on the cost of maintenance for each type of park land. The figures provided are based on an internal percentage used by the department (on average 68% of actual maintenance costs are used for developed parks, 30% for undeveloped park land, and 2% for preserves/desert parks.) (3) 2007-08 and 2008-09 figures are down due to reduction in programs assisted by volunteers and improved method of tracking number of volunteers. (4) This was previously reported as “at-risk youth.” (5) Excludes summer and after-school, youth development, aquatics and golf participants. Decreases in 2007-08 and 2008-09 are due to budget reductions in sports programs. LIBRARY Library _ Annual Circulation per Capita Program Goal The Library provides information and resources that are relevant, accessible and responsive to the intellectual needs and interests of the community. Items Circulated 12 9.9 10 8.4 Budget Allowance Explanation The Library 2008-09 budget allowance of $39,404,000 is $1,273,000 or 3.3 percent more than 2007-08 estimated expenditures. This increase is primarily due to start-up costs for the new Agave regional library (scheduled to open in July 2009,) which 8.9 10.3 9.6 8 6 4 2 0 2004-05 2005-06 2006-07 2007-08 2008-09 Fiscal Year In 20 07 , th e P h oe n ix P u bl ic L ib ex h ib it . W ra ry h os te en d y R es n d th e tr a ve ik re ce iv ed co or d in a ti li n g B er en a n E m p lo on of th e ex st a in B ea rs y ee E xc el le h ib it , w h ic C en tr a l L ib n ce Aw a rd h ra n fo r ra ry ’s C en fo r h er tw o m on th te r fo r C h s a t B u rt on il d re n ’s L it B a rr er a tu re . 123 includes hiring staff in preparation for opening and related operating services. These increases are partially offset by budget reductions that include reducing the number of supervisory positions at the branches, deferring planned facilities maintenance projects, delaying opening of the new Agave Library from December 2008 until July 2009, eliminating a monthly calendar of events, and reducing the book and other circulating materials budget by 19 percent. Library Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 Number of library visitors served 5,146,200 5,594,000 Number of electronic visits 18,561,007 24,339,000 30,423,800 Annual budget for purchase of library materials $6,814,821 $5,345,225 $5,710,624 Cost per library visitor served $7.59 $7.15 $6.79 2,646,580 12,340,921 2,252,608 12,196,372 2,365,200 13,185,000 $2.43 $2.55 $2.44 Circulation per library visit 3.12 2.81 2.78 Collection turnover rate 7.85 8.20 8.50 57.9% 60.0% 63.0% 1,910,123 1,709,650 1,829,700 101,525 98,366 93,900 9.90 9.54 10.27 1,080 1,080 1,080 Cost per item circulated 2006-07 Operating Expense Total Positions 2007-08 Library card registration as a percentage of population 2008-09 $36,351,000 $38,131,000 $39,404,000 436.5 471.4 471.4 General 124 Number of books in stock Number of telephone reference requests answered Annual circulation per capita Source of Funds: $36,093,000 $36,792,000 $38,440,000 Federal and State Grants 116,000 386,000 386,000 Other Restricted 142,000 953,000 578,000 2008-09 4,809,692 Number of items circulated: Central Thirteen branches Expenditure and Position Summary 2007-08* Number of hours open for public service per week *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 2008-09 operating budget allowance of $8,754,000 is $253,000 or 3.0 percent more than 2007-08 estimated expenditures. This increase is due to normal inflationary costs and an increase in the number of vehicles that need replacing due to continuous breakdowns and repairs. The increase is partially offset by the elimination of operating costs and staffing for the Papago Golf Course and Pro Shop. Management and maintenance of this course will be contracted out to a concessionaire. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 117.3 326 313 295 252 200 100 0 2004-05 2005-06 2006-07 2007-08 2008-09* Fiscal Year *Papago Golf Course closed on April 1, 2008, for renovation and when reopened will be operated by a private concessionaire. Rounds will no longer be reported for this golf course. Golf Major Performance Measures and Service Levels 2008-09 $7,619,000 $8,501,000 $8,754,000 140.0 326 300 The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 117.3 2006-07 2007-08* 2008-09 Source of Funds: Golf $7,619,000 $8,501,000 $8,754,000 Acres of golf courses maintained** 922 922 724 Annual cost of maintenance per acre** $5,456 $6,139 $7,869 Cost per participant $24.64 $28.82 $34.74 *Based on 10 months actual experience. **Effective April 2008, Papago Golf Course will be under management of contractor and will no longer be maintained by the city. 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. The budget provides for additional staff and other resources to operate the new North building, which triples total rentable space. The General Fund reductions include the elimination of an available parking space counting system for Regency garage and a reduction in fixed-post security for Heritage and Regency garages. Expenditure and Position Summary 2006-07 Operating Expense 213.4 229.9 341.7 Source of Funds: Convention Center $33,811,000 $40,483,000 $60,618,000 General 2,021,000 2,182,000 1,835,000 City Improvement 1,663,000 2,960,000 152,000 500,000 500,000 500,000 Sports Facilities The Phoenix Convention Center 2008-09 operating budget allowance of $63,105,000 is $16,980,000 or 36.8 percent more than 2007-08 estimated expenditures. The increase is primarily the result of new capital facility operating costs and normal inflationary increases. The increase is partially offset by reductions in General Fund expenditures. 126 2008-09 $37,995,000 $46,125,000 $63,105,000 Total Positions Budget Allowance Explanation ix T h e P h oe n 2007-08 te ri a ls to n s of m a e th a n 40 0 or m ed cl C en te r re cy C on ve n ti on in 20 07 . Phoenix Convention Center Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 2007-08* Estimated direct spending impact from conventions (millions)** $124.1 $126.9 $262.1 Number of convention delegates 85,580 87,490 180,700 Number of conventions** 49 52 61 Number of local public shows 34 35 30 Percent square feet occupancy (all events) 34% 43% 51% Number of theatrical performances 326 322 350 335,360 340,000 340,000 $7.7 $7.7 $8.2 $1,087 $1,355 $1,447 $755 $958 $1,073 Total theater attendance Total parking revenue (millions)** Revenue per parking space Operating expense per parking space 2008-09 *Based on 10 months actual experience. **Estimated direct spending impact is reported by the Greater Phoenix Convention and Visitors Bureau. Estimated direct spending impact, the number of convention delegates, and the number of conventions are increasing in 2008-09 due to the opening of the expanded Convention Center (North building) in January 2009. Total parking revenue is projected to slightly increase in 2008-09 due to the increase in convention delegates. The increase in revenue per parking space in 2007-08 is due to fewer parking spaces as a result of the closing of Patriots Square Garage, which is offset by an increase in parking rates. 127 HUMAN SERVICES Human Services _ Meals Served by Senior Nutrition Program Program Goal Thousands 750 622 613 600 625 630 588 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 2004-05 2005-06 2006-07 2007-08** 2008-09 Fiscal Year *Changes encompass all meals regardless of inclusion in AAA contract. **Projection includes additional meals anticipated with a full year of operations at Shadow Mountain, Westside and Pecos Senior Centers. le , vi d e p eo p , w h ic h p ro rs te n ce p r s, gr ou 17 se n io n p ro gr a m t op er a te s , it h n u tr it io fo rm a ti on D ep a rt m en w , in es es s, ic ti ie li rv it bi Se iv a ct n is a a d l m h a u it ci H w so The d u lt s es . on a n d ol d er or a or k se rv ic s, re cr ea ti 60 y ea rs or li n g/ ca se w p or tu n it ie se op n l u a co on d ti n ca on a m ea ls , ed u a n sp or ta ti d vo ca cy, tr re fe rr a l, a 128 The Human Services 2008-09 operating budget allowance of $64,500,000 is $57,000 or 0.1 percent less than 2007-08 estimated expenditures. The decrease is primarily due to budget reductions but is partially offset by increases in building rental for Reserve-a-Ride, bulk food purchases for senior meals program, replacement vehicles and normal inflationary increases. The budget includes a reduction of 16.9 positions that will eliminate arts and crafts instruction classes at senior centers; reduced support for personnel, budgeting, accounting, contract management and information system functions; and decreased support of the emergency utility assistance program. Additionally, budget reductions eliminate the STEP-UP and Young Families Can programs, thereby removing the opportunity for 50 volunteer mentor matches with young fathers and the opportunity to provide self-sufficiency skill development assistance; and decreases the School Base Program. The budget reductions will also eliminate senior home meal delivery carrying case replacement funding, eliminate a senior center volunteer recognition event and reduce contracted computer support. The Stay-in-School Small Business Program will be eliminated resulting in fewer summer jobs for local youth. Additional reductions will eliminate city funding for Salvation Army Market Shuttle and community assistance contracts (Rio Salado Community College and Salvation Army); reduce emergency assistance focused on clients without alternate community assistance; and reduce city funding for the Local Alcohol Reception Center (LARC), thereby reducing alcohol detoxification and medial treatment services. The budget also reduces the Summer Youth Work Experience Program, eliminates a remodeling project for the Luke Krohn Senior Center and reduces funding for the Central Arizona Shelter Services, decreasing the number of homeless single men and women receiving emergency shelter services. Human Services Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 3,809 3,800 3,800 Number of students receiving school-based services** 3,650 800 730 Community Services Division unduplicated households served 13,256 11,938 11,500 229,800 235,000 235,000 Average monthly downtown homeless population: Sheltered Unsheltered 663 68 858 63 855 60 Persons served at the Watkins shelter 2,520 3,391 3,400 Senior clients receiving daily meals 2,455 2,597 2,700 621 651 685 64 66 — 913 550 550 28 64 40 Number of community volunteer hours managed by Human Services staff Stay-in-School Small Business Program** Summer Youth Work Experience Program** 2006-07 Operating Expense Total Positions 2007-08 Youthbuild Phoenix Program 2008-09 $63,057,000 $64,557,000 $64,500,000 501.2 509.5 508.5 Source of Funds: General Human Services Grants $25,872,000 $27,597,000 $28,200,000 34,749,000 34,327,000 34,005,000 Community Development Block Grant 1,152,000 1,326,000 1,079,000 Federal and State Grant 276,000 336,000 252,000 City Improvement 457,000 455,000 462,000 Water 250,000 250,000 250,000 Transit 2000 156,000 156,000 156,000 Public Housing (1,000) — — Other Restricted 146,000 110,000 96,000 2008-09 Number of children in Head Start Daily average number of Reserve-a-Ride passengers Expenditure and Position Summary 2007-08* *Based on 10 months actual experience. **Impacted by budget reductions. Unduplicated households served decreases in 2007-08 due to a change in calculating assistance numbers; the change in methodology is carried forward to the 2008-09 projection. The increase in the number of persons served at the Watkins shelter in 2007-08 is projected as a result of additional funding received in 2007-08 to address homelessness. The number of senior clients receiving daily meals is expected to increase due to greater participation at Devonshire, Diaz, Shadow Mountain, and Pecos senior centers. The increase in daily average number of Reserve-a-Ride passengers is due to greater participation at senior centers. Small Business participation continues to decline due to a decrease in program popularity, and the program will be eliminated in 2008-09 due to a budget reduction. Decreases in Summer Youth are expected as a result of budget reductions. The variation in Youthbuild Phoenix Program participation is due to the migration of program funding from the Department of Housing and Urban Development to Department of Labor and a corresponding change in program design. 129 EDUCATION AND YOUTH PROGRAMS Education and Youth Programs Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 2008-09 operating budget allowance of $1,065,000 is $114,000 or 9.7 percent less than 2007-08 estimated expenditures. The decrease reflects budget reductions including funding for grants and the elimination of an administrative assistant II position. The reductions will adversely impact youth involvement in city operations and administrative support. 2006-07 Number of subscribers to receive online principal’s letter, youth newsletter and KNOW99 schedule 2007-08* 2008-09 4,127 4,500 4,750 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) 540 544 550 Number of participants in Phoenix Principal for a Day event 142 183 200 73 69 90 Number of KNOW99 productions *Based on 10 months actual experience. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $1,130,000 $1,179,000 $1,065,000 7.8 7.4 7.4 $851,000 $854,000 $767,000 279,000 325,000 298,000 Source of Funds: General Other Restricted 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 2008-09 operating budget allowance of $682,000 is $56,000 or 8.9 percent more than 2007-08 estimated expenditures. This increase is a result of budget reductions primarily taken in 2007-08 including reductions to the Youth 130 Ambassador Program, mailing and printing monthly communications, computer hardware maintenance and office equipment. Expenditure and Position Summary Operating Expense Total Positions 2006-07 2007-08 2008-09 $600,000 $626,000 $682,000 5.0 6.0 6.0 $600,000 $626,000 $682,000 Source of Funds: General International and Sister Cities Programs Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 Customer satisfaction with events and activities Percentage of scheduled events completed *Based on 10 months actual experience. 9.1 100 2007-08* 9.1 100 2008-09 9.1 100 RIO SALADO Rio Salado Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 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 Federal funding for ecosystem restoration The Rio Salado 2008-09 operating budget allowance of $167,000 is $4,000 or 2.5 percent more than the 2007-08 estimated expenditures. This increase reflects normal inflationary adjustments. Total Positions $65 million $400,000** 90% 100% — Status of Rio Salado Oeste Design (percent complete) — — 10% Customer service (1-10 scale) 9.0 10.0 9.0 *Based on 10 months actual experience. **Rio Salado Project was completed in 2007-08. Rio Salado Oeste design starting 2008-09. These performance measures relate to the Army Corps of Engineers federal funding and contracts. Expenditure and Position Summary Operating Expense 2008-09 $63 million Status of Rio Salado Oeste Feasibility Report Budget Allowance Explanation 2007-08* 2006-07 2007-08 2008-09 $158,000 $163,000 $167,000 1.0 1.0 1.0 $158,000 $163,000 $167,000 Source of Funds: General HISTORIC PRESERVATION OFFICE Historic Preservation Office Major Performance Measures and Service Levels Program Goal The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: The Historic Preservation Office works to support the protection, preservation and designation of historic resources throughout the city. The office also works with other city departments to encourage projects that are sensitive to historic building and district character. Budget Allowance Explanation The Historic Preservation Office 2008-09 operating budget allowance of $713,000 is $7,000 or 1.0 percent more than 2007-08 estimated expenditures. The increase is primarily due to the funding of an historic preservation database. This increase is partially offset by a budget reduction that eliminates an historic preservation planner II position for design review. 2006-07 Number of design reviews performed on building permits in historic districts** Number of city grants awarded for historic rehabilitation projects 2007-08* 2008-09 505 400 400 35 21*** 18*** *Based on 10 months actual experience. **This includes the cumulative number of Certificates of Appropriateness, Certificates of No Effect, Demolition Reviews and Demolition Appeal Hearings. ***Includes the delay of one competitive grant cycle in 2007-08 and a reduced level in 2008-09 due to an extended hiring freeze. Expenditure and Position Summary Operating Expense Total Positions 2006-07 2007-08 2008-09 $570,000 $706,000 $713,000 6.0 7.0 7.0 $570,000 $706,000 $713,000 Source of Funds: General 131 Budget Allowance Explanation PHOENIX OFFICE OF ARTS AND CULTURE Program Goal The Phoenix 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 Phoenix Office of Arts and Culture 2008-09 operating budget allowance of $1,477,000 is $490,000 or 24.9 percent less than 2007-08 estimated expenditures. The decrease is the result of budget reductions and the expiration of the 21st Century Grant, which is partly offset by normal inflationary increases. The budget reduces grants to arts organizations, eliminates part-time staff, and reduces funding for educational and marketing efforts. Reductions also include reduced funding for art preservation projects and fewer resources for training. Individual grant awards or the number of organizations receiving grants will be reduced. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2008-09 $2,011,000 $1,967,000 $1,477,000 12.5 13.0 13.0 Source of Funds: General $1,266,000 $1,357,000 $1,324,000 Local Transportation Assistance 106,000 106,000 106,000 Federal and State Grants 639,000 499,000 47,000 — 5,000 — Other Restricted ve n th a n d ec ti on of Se rs te in e th es se s w it h ro je ct , a t ci a l bu si n st ra ti on P e co m m er on th ic sp a ce . em ks bl D n u li e p , p sc a n -f ri en d ly a l P h oe n ix ia tr T h e St re et n tr es ce ed in p ta li ze d , a ve n u es G le n ro sa ea te a re vi d li fe to cr oo rh bo gh n ei 132 2007-08 Phoenix Office of Arts and Culture Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance. 2006-07 2007-08* 2008-09 Grant applications processed to support arts activities through schools and nonprofit organizations 136 130 135 Grant awards administered to support arts activities through schools and nonprofit organizations 101 110 95 Percent-for-art projects to enhance city capital improvement projects with artwork 62 61 69 Local artists/arts organizations training workshops 19 19 17 Arts management consulting projects coordinated by Business Volunteers for the Arts 54 50 45 *Based on 10 months actual experience. The number of grant 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 us 's p re st ig io ey F or w a rd er d a y of ll p s Va n ed to iv 0 t u p to 32 a ti on re ce er St iv er m it m en t d sf m to n a co s th e ci ty te w a y Tr re fl ec ts a a ow G d ll n a th a or ty m N li a The h e fa ci a st e st re a w a rd . T u n ic ip a l w C re sc or d ia fr om th e m ls a ri te a m re cy cl a bl e a re n es s. m en ta l a w to en vi ro n 134 Environmental Services The Environmental Services Program Represents 16.5% of the Total Budget. The Environmental Services program budget includes Water Services, Solid Waste Management, Public Works and Environmental Programs. WATER SERVICES Budget Allowance Explanation Program Goal The Water Services 2008-09 operating budget allowance of $267,979,000 is $17,892,000 or 7.2 percent more than 2007-08 estimated expenditures. The increase is primarily due to an increase in price for raw water, an increase in water production, vehicle replacements, proposed budget additions and normal inflationary increases. The budget adds staff and equipment to provide maintenance and support for the new Distributed Control System, and new security system improvements. Also included is the addition of staff to keep pace with the growth in the water distribution system and to improve the Backflow Prevention Program. The costs for both programs are offset by a reduction in overtime and contractual charges. In 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 waterborne wastes generated within the Phoenix drainage area. Water Services – Total Water Production Billions of Gallons 137.5 136.0 140 135 130 125 126.3 125.4 2006-07 2007-08 118.4 120 115 110 105 100 2004-05 2005-06 2008-09 Fiscal Year 135 addition, staff and equipment are being added to provide ongoing support for the electronic Drinking Water Regulatory Database and to increase electrical maintenance services for water and wastewater treatment facilities. The budget adds contractual services to provide solids removal for the newest expansion of the 91st Avenue Wastewater Treatment Plant. In addition, staff and equipment are being added to provide supervision for the third shift maintenance staff at the 91st Avenue Wastewater Treatment Plant. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2008-09 $221,685,000 $250,087,000 $267,979,000 1,415.1 1,477.1 1,488.1 Source of Funds: Water Wastewater Other Restricted Federal and State Grants te st s ve m il li on or e th a n fi sy st em s m s on ti rm u fo n d d is tr ib e ci ty p er a th t r, en a re ea tm y ts ea E a ch a te r tr qu ir em en t it s ta p w gu la to ry re re of e d th ro u gh ou u lt it th a t a m u to en su re . ed ss a rp m et or su 136 2007-08 $143,453,000 $162,297,000 $173,070,000 78,490,000 87,676,000 94,767,000 107,000 114,000 117,000 (365,000) — 25,000 Water Services Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 Gallons of water produced systemwide (in billions)** 2007-08* 2008-09 126.3 125.4 137.5 Gallons of wastewater treated (in billions) 67.0 64.9 64.9 Gallons of water supplied to consumers per $.01 3.90 3.56 3.15 Miles of wastewater collection lines cleaned 1,709 1,674 1,700 Laboratory analyses and analytic screenings conducted in-house 75,136 80,773 81,000 971,754 95% 1,011,619 95% 1,079,861 96% 1,467,885 1,587,898 1,722,098 5,850 6,500 6,500 Percent of service leaks repaired within the five-day standard 98% 95% 95% Average gallons of water used per capita per day 199 196 199 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 2008-13 Capital Improvement Program Highlights The Capital Improvement Program totals $6.7 billion over the next five years. As shown in the pie chart, funding for the 2008-13 program comes from five main sources: $0.6 billion in 1988, 1989, 2001 and 2006 voter-approved bond funds, $1.8 billion in pay-as-you-go operating funds, $2.7 billion in various enterprise bonds, $0.5 billion in Transit 2000 and Parks and Preserve Initiative funds, and $1.1 billion in other funds. The $1.1 billion in other funds includes $236.6 million in payments by other cities and agencies for participating in projects in programs such as Water and Wastewater, $364.5 million in capital grants, $179.6 million in development impact fees, $105.6 million in passenger facility charges, $141.4 million in other government participation in projects, $32.8 million in capital reserves, $6.9 million in Solid Waste remediation funding and $11.0 million from miscellaneous capital sources. Projects in the first year total $2.2 billion and are funded from pay-as-you-go operating funds ($0.6 billion), bond funds ($1.1 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 2008-09 Capital Budget by source of funds, and the 2008-09 Capital Improvement Program by fund group and program. A brief overview of the five-year plan for each program follows. 2008-13 Preliminary Capital Improvement Program Sources of Funds Property Tax Bonds $0.6 Billion Pay-As-You-Go $1.8 Billion Enterprise Bonds $2.7 Billion Transit 2000 and Parks and Preserves $0.5 Billion Other $1.1 Billion Arts and Cultural Facilities Aviation The $31.6 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 $1.7 billion and includes projects for Phoenix Sky Harbor International Airport and two satellite airports, Phoenix Deer Valley and Phoenix Goodyear. The Aviation program is funded with Aviation operating revenue, federal grant funds, Aviation nonprofit corporation bonds, and Passenger and Customer Facility Charge funds. Major improvements planned for Sky Harbor International Airport include the following: ■ ■ ■ 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 the Arizona Opera and Ballet Arizona ■ ■ ■ Renovate existing Black Theatre Troupe facility Address needed capital improvements, major maintenance, ADA and safety issues at city-owned cultural facilities ■ ■ ■ Develop airport expansion infrastructure Design and construct an automated train system and related ground transportation center Reconstruct and expand taxiways Acquire and maintain properties for the Community Noise Reduction Program, the automated train and future airport expansion Complete various development studies and consultant services 155 ■ Replace carousel and expand Terminal 3 checkpoints ■ Rehabilitate Terminal 4 ■ Expand and improve roadways ■ ■ ■ Purchase additional buses and improve parking facilities Install intruder alarm and implement other security improvements Construct an in-line baggage explosive detection system The Aviation program also includes taxiway, ramp and other various improvements at the Phoenix Deer Valley and Goodyear airports, and airport development projects at Phoenix-Mesa airport. Economic Development The $45.2 million Economic Development program is funded with 2006 Bonds and Downtown Community Reinvestment funds. The program includes the following downtown and citywide economic development projects: ■ ■ ■ ■ Design the new University of Arizona College of Pharmacy ■ ■ ■ ■ Construct downtown infrastructure improvements to sidewalks, landscaping and lighting Increase business redevelopment and public art enhancements Revitalize public infrastructure in west Phoenix Acquire property for the relocation of the state fairgrounds Construct infrastructure improvements to the Phoenix Biomedical Campus Acquire land and prepare site near the downtown area for the expansion of the Life Sciences Research Park Complete the ASU School of Nursing and Healthcare Innovation Building s be en ca p it a l h a a n d p u bl ic te va ri p ll io n of a te ly $3 bi , a p p ro xi m 87 . 19 ix n ce n oe h Si P d ow n to w n in ve st ed in 156 Energy Conservation Facilities Management The $7.2 million Energy Conservation Program is funded with General, Convention Center, Water and Wastewater operating funds. This program includes capital projects to continue the city's energy conservation efforts and also includes energy efficient retrofit 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, first year annualized cost savings average $250,000. Energy saving retrofits have been completed for lighting, heating, ventilation, air conditioning and control systems. Examples of recent capital projects that the Energy Program has participated in include the Phoenix Convention Center, Pecos Community Center and Desert Broom Library. The Facilities Management program totals $79.5 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 and/or repair the city’s maintenance service centers 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 and Personnel Building ■ ■ Update downtown facilities to bring them into compliance with the Americans with Disabilities Act Provide partial infrastructure for the Estrella Multi-Use 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 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. Increase work space efficiencies through a partial restacking of Phoenix City Hall 157 Fire Protection The $64.9 million Fire Protection program is funded with 2001 and 2006 bonds and impact fees. The following fire stations are planned for bond funding: Fire Station Construction ■ 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 ■ ■ The following firefighter training and technology projects also are included for bond funding: ■ Study and pilot new fire communication technology ■ Expand the Fire Training Academy ■ Construct a Command Training Center ■ Construct a Dispatch and Emergency Operations Center New Station 74 in west Ahwatukee Foothills New Station 62 at 99th Avenue and Lower Buckeye Road a te ri a ls re cy cl ed m ic h m ea n s h w s, on ti ee n st a se ve ra l gr 60 is on e of on . ti n a io St ct e F ir co n st ru ze d in it s w er e u ti li 158 Freeway Mitigation Historic Preservation HOPE The Freeway Mitigation program totals $4.5 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 $10.9 million and is funded with 1989, 2001 and 2006 bonds. The following projects are planned: The HOPE VI project of $4.9 million is funded with Community Development Block Grants (CDBG) and other federal grants, HOME Program fund 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. ■ ■ ■ ■ Construct historic preservation demonstration projects Construct city-owned historic preservation demonstration projects Acquire and rehabilitate threatened historic buildings citywide Provide 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 $54.2 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 $25.4 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. The $45.9 million Information Technology program is funded with 2001 and 2006 bonds and 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 in the program include: ■ ■ ■ Nonprofit projects using 2006 bond funds include: ■ ■ Provide funding for construction of the United Methodist Outreach Ministries New Day Center homeless shelter for families Modernization projects for public housing units are proposed based on the availability of grant funds. City Council approved allocations of Community Development Block Grant funds also are programmed. 160 Expand the Boys and Girls Club Dave Pratt Dental Clinic Provide partial funding for the Native American Connections’ Business and Cultural Center Acquire and renovate a facility for the Valle Del Sol Combined Service Center ■ ■ ■ Provide 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 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 $37.7 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 and equip a new Agave regional branch library Construct and equip a replacement for Harmon branch library Remodel completely the Saguaro branch library Design, construct and furnish South Mountain regional branch library ■ ■ Expand library patron self-service capabilities Complete the Palo Verde replacement branch library Acquire land for a North Gateway branch library General funds are proposed to construct minor improvements to the Burton Barr Library, renovate the Ocotillo and Acacia branch libraries and improve existing branch libraries to meet current standards. Impact fees are included to acquire sites for new libraries in west Ahwatukee and Desert View areas, and also will fund the design and construction of an Estrella branch library. Neighborhood Services The Neighborhood Services program totals $30.1 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 a site 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 and provide development incentives for blight elimination and revitalization Construct neighborhood infrastructure such as sidewalks, lighting, alley improvements and landscaping to enhance aging neighborhoods T h e D es er t B ro om B ra n ch L ib ef fi ci en t d ra ry h a s be es ig n fe a tu en re co gn re s. iz ed fo r se ve ra l en er gy 161 Parks, Recreation and Mountain Preserves ■ The Parks, Recreation and Mountain Preserves program totals $511.9 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 2001 and 2006 bond funds: ■ ■ Acquire land in the Ahwatukee Foothills area ■ Acquire the Pioneer Living History Museum land Acquire land for neighborhood mini-park sites ■ Renovate and construct trails citywide ■ Renovate aquatics facilities citywide ■ ■ ■ 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 and construct amenities for the Rio Salado Oeste habitat ■ Provide funding for construction of a sports and recreation center for A Bridge to Independent Living (ABIL) Provide funding toward construction of the Galvin Parkway intersection at the Desert Botanical Garden 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 funding toward construction of an Audubon Center at Rio Salado Construct, improve and renovate parks citywide s th ro u gh ou n 20 0 p a rk a th e or m t op er a te s D ep a rt m en ec re a ti on p a rk s. R in d n ta a n s T h e P a rk d es er t m ou x si g in d cl u th e ci ty, in 162 t Parks and Preserves projects include improvements to community and neighborhood parks and land for the Sonoran Preserve. Impact fees are included 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 $52.9 million Phoenix Convention Center program is funded with Convention Center operating revenue, 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 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. T h e fi n a l p h a se of th e P h oe n ix in D ec em be C on ve n ti on r 20 08 . W C en te r re n h en co m p be co m e on ov a ti on w le te d , th e e of th e to il l be co m fa ci li ty w il p 20 co n ve p le te d l n ea rl y tr n ti on ve n ip le in si ze u es in N or to th A m er ic a. 163 Police Protection Public Transit Solid Waste Disposal The Police Protection program totals $96.4 million and is funded with 2001 and 2006 bonds, impact fees and nonprofit corporation bonds. The following projects are planned: The $575.9 million Public Transit program is funded with Capital Construction, 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: The $111.7 million Solid Waste Disposal program includes projects at the city’s open landfill, closed landfills and transfer stations, and is funded with Solid Waste revenue, Solid Waste Remediation funds and nonprofit corporation bond funds. Projects planned in the Solid Waste program include: ■ ■ ■ Purchase helicopters to replace 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 buses, Dial-a-Ride replacement vans and neighborhood circulators ■ Improve and maintain bus stops, bus shelters and park-and-ride locations ■ ■ Acquire land for a new northwest precinct ■ Acquire land for north operating facility. ■ ■ Acquire Police Automated Computer Entry (PACE) upgrade and replacement ■ Design and construct Dial-a-Ride operations and heavy maintenance facilities ■ ■ ■ ■ ■ 164 Design, rebuild and equip the Squaw Peak Precinct ■ Design and construct a new precinct in the Cave Creek Road and Smokehouse Trail area Renovate a newly acquired building for use as the Cactus Park Precinct Design a communications center expansion ■ ■ Implement technology enhancements including upgrades to the vehicle management system and 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 Monitor and maintain methane gas extraction systems, cell lining and capping, and installing landscaping at the Skunk Creek landfill Expand and renovate 27th Avenue Transfer Station Monitor and maintain methane gas extraction systems and cell lining at the State Route 85 landfill Excavate cell and construct a drainage system for the State Route 85 landfill. Maintain soil capping and the methane gas collection system at the 19th Avenue landfill Monitor groundwater and methane gas and installing landscaping at the 27th Avenue landfill Street Transportation and Drainage The Street Transportation and Drainage program totals $793.5 million and is funded with Arizona Highway User Revenues, 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 2008. Major street and storm drainage projects for 2006 bond funding include: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Expand city of Phoenix wireless network for connections to on-street devices for traffic signal coordination ■ 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 ■ Construct intersection improvements at Pinnacle Peak Road and Tatum Boulevard Construct a scenic drive segment of Rio Salado Beyond the Banks Construct landscape improvements in the west Phoenix revitalization area Construct historic districts streetscape improvements Construct one mile of storm drain at 75th Avenue from Buckeye Road to Van Buren Street Construct detention basin at 23rd Avenue and Roeser Road Design and construct traffic-calming infrastructure Major street projects for AHUR funding include the following projects: Construct one mile of major street at Van Buren Street from 67th to 75th avenues Rehabilitation of 16 major flood-control dams located in the North Mountain Preserve (includes additional funding from Maricopa County) Construct the Bethany Home Road outfall channel ■ ■ ■ ■ Construct one mile of major street at 19th Avenue from Baseline Road to Southern Avenue Capital Construction funding is planned for the following types of projects: ■ Local paving projects ■ Residential street resurfacing ■ Sidewalks ■ Sidewalk ramps ■ Dust control ■ Traffic calming Development impact fees are planned for street improvements in the North Gateway, Desert View, Laveen and Estrella areas. Complete construction of one mile of major street at Van Buren Street from 59th to 67th avenues Construct one mile of major street at 75th Avenue from Buckeye Road to Van Buren Street Construct one mile of major street at Pinnacle Peak Road from 43rd to 35th avenues Construct one mile of major street at Pinnacle Peak Road from 43rd to 55th avenues Construct one mile of major street at 35th Avenue from Baseline Road to Southern Avenue Construct a major roadway and bridges at Sonoran Desert Boulevard (includes funding from state and local aid) Construct one mile of major street at 43rd Avenue from Lower Buckeye to Buckeye roads Construct a mile and a half of major street at Southern Avenue from 31st to 19th avenues Retrofit landscaping on existing major streets ■ Major street overlay ■ Major street microseal 165 Wastewater The Wastewater program totals $935.5 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, instrumentation and process control inspections, power line relocation and support system upgrades. Other major Wastewater projects include the following: Water The $1.5 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: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 166 Land acquisition for the reuse and river restoration project at Tres Rios 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 Rehabilitate existing booster stations ■ Rehabilitate steel tanks ■ ■ ■ Construction of relief sewers citywide Systems development and equipment replacement at the 23rd Avenue Wastewater Treatment Plant Security improvements at remote facilities Sewer lift station replacements and construction of a sewer lift station at 107th Avenue and Roeser Road Construction of parallel sections of the Broadway Sewer from 32nd Street to 51st Avenue to provide needed additional capacity Rehabilitation of selected sewers of various sizes and materials located throughout the city ■ ■ ■ ■ ■ ■ Sewer relocations for light rail Various Wastewater management studies, staff charges and consultant fees Construct new reservoirs and rehabilitate existing reservoirs ■ ■ ■ Acquire and construct new wells and rehabilitate existing wells Rehabilitate and upgrade security at Cave Creek Water Reclamation Plant Design and construct a new water treatment plant at 15th Avenue and Dobbins Road Re-construct the east basin at Deer Valley Water Treatment Plant Convert plant filtration to granular activated carbon at Val Vista, 24th Street and Union Hills water treatment plants Rehabilitate and optimize process at the Val Vista, Deer Valley and 24th Street water treatment plants Replace and rehabilitate the Val Vista Transmission Main from the Val Vista Water Treatment Plant to 48th Street Construct water main improvements recommended in the integrity study and rehabilitate existing mains citywide Increase capacity of water distribution system in the Camelback east residential corridor Construct new mains in growth areas Replace and upgrade the city’s Customer Information System ■ Acquire additional water resources ■ Relocate water lines for light rail ■ Construct transmission main on 51st Avenue to Deem Hills reservoir ■ ■ ■ Install new service meters and construct plumbing connections for alley service relocations Acquire and install software and hardware to automate meter reading Perform assessment study of all prestressed concrete cylinder pipe 2008-09 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 $17,000 555,263 21,046 1,425 22,684 26,405 4,504 6,133 1,994 22,274 13,514 30,422 21,447 13,861 310,289 20,577 39,978 239,342 60,625 227,166 202,400 331,051 $– 86,600 1,130 1,425 13,687 – – 80 1,737 2,600 – 16,320 1,250 1,243 108,481 3,794 – 66,886 2,880 92,230 80,591 103,431 $14,917 – 19,916 – 3,217 20,985 – 4,427 52 7,475 5,906 10,968 9,330 10,107 37,245 6,457 18,247 100 – 48,946 14 586 $1,833 – – – 772 3,838 4,504 1,626 22 – 7,578 813 6,492 1,928 14,674 518 5,081 – 22 2,244 – 21 $250 372,656 – – – – – – 183 – 30 2,321 431 583 42,365 9,808 12,850 117,874 54,959 1,921 65,075 166,651 $– 96,007 – – 5,008 1,582 – – – 12,199 – – 3,944 – 107,524 – 3,800 54,482 2,764 81,825 56,720 60,362 $2,189,400 $584,365 $218,895 $51,966 $847,957 $486,217 *Remaining 1981, 1988, 1989 and 2001 bond funds. Of this amount, $49,699,000 is 2001 bond funds. 167 RESOURCES AND EXPENDITURES BY CAPITAL FUND 2008-09 CAPITAL IMPROVEMENT PROGRAM RESOURCES Capital Fund Beginning Balance Bond and Related Funds 2006 Bonds Libraries, Senior & Cultural Centers $1,603 Education 6,319 Affordable Housing & Neighborhoods (3,789) Parks and Recreation 11,114 Police, Fire & Homeland Security (1,514) Police, Fire & City Technology (585) Street and Storm Sewer Improvement 3,011 2001 Bonds Affordable Housing & Homeless Shelter 3,052 Educational, Youth & Cultural Facilities 1,591 (664) Environmental Improvement & Cleanup Fire Protection Facilities & Equipment (1,321) Neighborhood Protection & Senior Centers 5,283 New & Improved Libraries 1,421 Parks, Open Space & Recreation 8,975 Police Protection Facilities & Equipment (9,192) Police, Fire & Computer Technology (2,715) Preserving Phoenix Heritage (939) Storm Sewers (3,668) Street Improvements (1,097) 1989 Historic Preservation 391 1988 Bonds Affordable Housing & Service Facilities 53 Freeway Mitigation, Neighborhood Stabilization, Slum & Blight Elimination 915 Parks, Recreation & Mountain Preserves 41 Police Protection 37 Storm Sewers – 1984 Fire & Police Protection 261 Nonprofit Corporation Bonds Aviation (439,797) Phoenix Convention Center 10,136 Golf 380 Solid Waste 44,823 Transit 2000 133,958 Wastewater (85,829) Water (234,495) Other 13,366 OTHER FINANCING Impact Fees 202,572 Passenger/Customer Facility Charge 97,349 43,551 Other Cities' Participation in Joint Ventures 10,016 Solid Waste Remediation 72,433 Capital Grants Federal, State & Other Participation 4,042 Capital Gifts 863 2,913 Private Participation 326,022 Capital Reserves Other Capital 27,119 TOTAL $248,005 EXPENDITURES Available For Sale Funds Available Beyond 08/09 Projected Revenue* Total Estimated Expenditures Ending Fund Balances $– – – – – – – $1,603 6,319 (3,789) 11,114 (1,514) (585) 3,011 $46,632 11,803 25,582 36,792 44,696 5,504 47,886 $(45,029) (5,484) (29,371) (25,678) (46,210) (6,089) (44,875) $113,250 12,100 76,155 69,375 147,825 15,200 126,200 $68,221 6,616 46,784 43,697 101,615 9,111 81,325 – – – – – – – – – – – – – 3,052 1,591 (664) (1,321) 5,283 1,421 8,975 (9,192) (2,715) (939) (3,668) (1,097) 391 777 3,905 887 3,638 9,332 6,492 12,866 3,115 2,942 830 2,009 2,906 312 2,275 (2,314) (1,551) (4,959) (4,049) (5,071) (3,891) (12,307) (5,657) (1,769) (5,677) (4,003) 79 – 3,075 2,100 6,000 5,655 5,500 4,425 12,350 6,500 2,075 7,370 6,200 – 2,275 761 549 1,041 1,606 429 534 43 843 306 1,693 2,197 79 – 53 – 53 – 53 – – – 915 41 37 – 261 1,893 25 37 – – (978) 16 – – 261 1,000 – – – – 22 16 – – 261 1,420,045 – – 75,000 – 505,000 1,050,000 10,000 997,592 1,048 267 61,773 16,184 347,497 652,074 8,195 – – – – – – – – – – 53,574 189,328 44,587 7,252 70,706 4,042 863 2,913 298,617 23,322 $3,682,400 $3,149,911 – 390,000 – – – – – – 40,000 (49,797) 10,136 380 44,823 133,958 (85,829) (234,495) 53,366 372,656 9,088 113 58,050 117,774 71,674 163,431 55,171 (422,453) 1,048 267 (13,227) 16,184 (157,503) (397,926) (1,805) – 141,697 59,700 – 158,674 15,294 3,385 3,765 4,861 7,165 202,572 239,046 103,251 10,016 231,107 19,336 4,248 6,678 330,883 34,284 148,998 49,718 58,664 2,764 160,401 15,294 3,385 3,765 32,266 10,962 53,574 189,328 44,587 7,252 70,706 4,042 863 2,913 298,617 23,322 $824,541 $1,072,546 $1,605,035 *Includes bond proceeds and funds which "pass through" bond funds such as grants, land sales and other agency and private participation. 168 FUND BALANCES $(532,489) 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 collection in Service Area 6 of the West Region; increases for equipment management and diesel fuel; procurement of solid waste containers and refuse barrels; and other inflationary increases. Budget additions also include staff and equipment needed to activate the Salt River Service Center, enhanced enforcement of Chapter 27 code requirements, and increased environmental compliance and recycling educational outreach to residents. Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2008-09 $100,915,000 $111,337,000 $128,216,000 531.0 551.0 614.0 Source of Funds: Solid Waste General Federal and State Grants The 2008-09 Solid Waste Management operating budget allowance of $128,216,000 is $16,879,000 or 15.2 percent more than 2007-08 estimated expenditures. This increase includes costs and staff additions to resume contained solid waste h li gh ts h ow th in g, ” h ig ry ve E has s ge n 89 , th e ci ty cl in g C h a t. Si n ce 19 a m , “R ec y en gr m n ro p ro g vi re cy cl in e th e en ri a ls . P h oe n ix ’s a bl e m a te el p p re se rv s of re cy cl fo rt s ca n h n ef to g in on li cl il re cy 1. 3 m m or e th a n p ro ce ss ed 138 2007-08 $99,986,000 $109,818,000 $126,890,000 929,000 1,310,000 1,326,000 — 209,000 — Solid Waste — Recyclable Material Processed Thousands of Tons 150 125 124.0 126.4 126.1 127.0 129.0 2007-08 2008-09 100 75 50 25 0 2004-05 2005-06 2006-07 Fiscal Year _______________________________________________________________________ Solid Waste Management Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: Residential households served with twice-per-week contained solid waste and recyclable material collections Tons of total solid waste disposed at city landfills Tons of solid waste from city residences disposed 2006-07 2007-08* 2008-09 379,047 387,250 393,740 1,142,425 1,050,000 1,050,000 772,052 750,000 750,000 *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 2008-09 Public Works operating budget allowance of $30,036,000 is $3,316,000 or 12.4 percent more than 2007-08 estimated expenditures. This increase is for contract custodial expenses; increases in fuel and electricity prices; the carryover of costs associated with various remodeling projects and a portion of the employee bus card program; information technology upgrades and other inflationary increases. Also reflected is the addition of 17 equipment management support positions related to the opening of the Salt River Service Center and the expansion of solid waste collection in Service Area 6. All of these positions are charged to the Solid Waste Fund. These increases are partially offset by the following budget reductions: elimination of funding for the Glenrosa Service Center land purchase and installation of the Fire Operations Building exhaust system; reduced funding for upgrades to the Calvin Goode Building and deferral of painting at the Okemah and Glenrosa service centers; and the elimination of a secretary II position, a contract specialist I position, a building maintenance worker position and an equipment service worker position. Public Works Major Performance Measures and Service Levels The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 2006-07 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 2007-08* 2008-09 8,417,854 9,425,000 9,493,300 21,311 23,500 25,500 40.3 40.3 40.3 7,131 7,208 7,345 55.6 56.5 57.2 Expenditure and Position Summary 2006-07 Operating Expense Total Positions 2007-08 2008-09 $26,714,000 $26,720,000 $30,036,000 506.0 524.0 541.0 Source of Funds: General City Improvement Other Restricted $20,334,000 $20,006,000 $22,626,000 6,186,000 6,197,000 6,169,000 194,000 517,000 1,241,000 ENVIRONMENTAL PROGRAMS Total Employees/Consultants Trained On Environmental Issues 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. Number Trained 5000 4000 Budget Allowance Explanation 3000 The 2008-09 Office of Environmental Programs operating budget allowance of $1,729,000 is $176,000 or 9.2 percent less than the 2007-08 estimated expenditures. The decrease includes budget reductions in General Fund brownfields grants, which were reallocated to bond funds in the capital improvement program, and the elimination of an environmental quality specialist position. Also reflected is the expiration of a federal brownfields training grant. Expenditure and Position Summary 2006-07 Operating Expense 2007-08 15.0 15.0 2,040 2000 1,193 1,102 1,100 1000 0 2004-05 2005-06 2006-07 2007-08 2008-09 Calendar Year Training levels were exceptional in FY 2006-07 due to new regulations and a concentrated effort to bring staff up to basic levels. Environmental Programs Major Performance Measures and Service Levels 2008-09 $1,528,000 $1,905,000 $1,729,000 Total Positions 4,327 The following significant performance measures and service level trends will be achieved with the 2008-09 budget allowance: 15.0 2006-07 2007-08* 2008-09 159 120 65 43 45 50 94% 97% 97% 98 59 50 Source of Funds: General $1,252,000 $1,377,000 $1,398,000 Water 220,000 212,000 224,000 Capital Construction 17,000 61,000 87,000 Federal & State Grant 39,000 255,000 20,000 Number of facility assessments and technical assistance visits conducted** Number of brownfield projects implemented 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. In May 2005, as part of a five-year forecast review, the City Council expressed interest in increasing the Contingency Fund to 3.5 percent, economic conditions permitting. Due to declining economic conditions, the 2008-09 budget decreases the contingency amount by $2,330,000. This is a decrease of 0.2 percent from the current year’s 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 2008-09. Comparison of Annual Budget for General Fund Contingency Amount to Operating Expenditures (000’s) GENERAL FUND CONTINGENCY The budget reflects a decrease in the General Fund contingency from the 2007-08 budgeted level of $34,230,000 to $31,900,000. This decreases the General Fund contingency to 2.7 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. The funding level was increased slightly over the next four years. Fiscal Year General Fund Operating Expenditures* Contingency and Set-Aside Amounts 1999-00 797,633 2000-01 883,196 2001-02 887,644 2002-03 912,192 2003-04 912,583 2004-05 925,603 2005-06 965,936 2006-07 1,079,000 2007-08 1,184,192 23,408 1,800 26,780 4,600 26,550 7,600 27,190 3,652 22,700 _ 23,800 _ 24,740 _ 28,860 _ 34,230 2008-09 1,177,763 31,900 Percent of Operating Expenditures 2.9 3.0 3.0 3.0 2.5 2.6 2.6 2.7 2.9 2.7 *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. 2008-09 Other Fund Operating Expenditure and Contingency Amount (000’s) Operating Expenditures Contingency Amount $165,812 $21,000 12.7 47,277 900 1.9 Aviation 228,410 14,000 6.1 Water 205,426 30,000 14.6 Wastewater 110,585 15,000 13.6 Solid Waste 130,891 4,000 3.1 67,499 5,000 7.4 8,804 50 0.6 53,372 1,595 3.0 Fund Transit 2000 Development Services Convention Center Golf 2007 Public Safety Expansion 144 Percent of Operating Expenditures 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 2008-09 for existing debt and future bond sales is $622,249,000. As shown in the pie chart, the $622.2 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 $70.4 million in general government nonprofit corporation bonds debt service payments funded by the General ($28.5 million) and Transit 2000 ($41.9 million) portions of excise tax funds. Secondary Property Tax shown in the pie chart represents the annual tax levy for debt service and related interest earnings. 2008-09 Debt Service Total - $622.2 Million Solid Waste 3.6% Wastewater 12.3% Other 2.2% Convention Center 3.0% AHUR 5.0% Water 15.2% City Improvement* 11.3% *Funded by the General and Transit 2000 taxes. 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. Types of Bonds Issued and Security Under Arizona law, cities are authorized to issue voter-approved general obligation, highway user revenue and utility revenue bonds. For the city of Phoenix, this includes property tax-supported bonds and revenue bonds (such as water revenue and airport revenue bonds). The city’s general obligation bonds are “full faith and credit” bonds. This means they are secured by a legally binding pledge to levy property taxes without limit to make annual bond principal and interest payments. Water and airport revenue bonds are secured by a pledge of these enterprises’ net revenues (revenues net of operation and maintenance expenses) and do not constitute a general Aviation 15.1% Secondary Property Tax 32.3% 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 & Poor’s. The city’s general obligation bonds are rated Aa1 and AAA, respectively. Standard & 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, 2008. Statement of Bonded Indebtedness General Obligation Bonds (In Thousands of Dollars) (1) Purpose Non-Enterprise Revenue General Supported General Obligation Obligation Bonds Bonds(2) $ — 17,360 57,073 30,655 101,061 — — Total General Obligation Bonds $1,262,653 — — — — — — Subtotal Less: Restricted Funds $1,262,653 (149,943) $ 206,149 — $1,468,802 (149,943) $ 152,561 — $1,621,363 (149,943) Direct Debt Less: Revenue Supported $1,112,710 — $ 206,149 (206,149) $1,318,859 (206,149) $152,561 (152,561) $1,471,420 (358,710) Net Debt $1,112,710 — $1,112,710 $ — 28,745 — — — 805 123,011 Total Bonds Various Airport Sanitary Sewer Solid Waste Water Public Housing Street and Highway $ $1,262,653 17,360 57,073 30,655 101,061 — — Revenue Bonds $ — $1,262,653 46,105 57,073 30,655 101,061 805 123,011 $1,112,710 Represents bonds outstanding as of April 1, 2008. 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 1980-81 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. (1) 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, 2008, based upon 2007-08 assessed valuation is shown in the tables on the right. Public Safety, Law Enforcement, Fire and Emergency Services Facilities, and Streets and Transportation Facilities Bonds 20% Constitutional Limitation Direct General Obligation Bonds Outstanding(1) $3,213,763,300 (1,122,561,452) Unused 20% Limitation Borrowing Capacity $2,091,201,848 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, 2008 $ 964,128,990 $346,240,000(1) (149,943,049) Direct General Obligation Bonds Outstanding (196,296,951) Unused 6% Limitation Borrowing Capacity $ 767,832,039 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 table on the right provides debt burden ratios as of April 1, 2008. 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. Represents general obligation bonds outstanding as of April 1, 2008. (1) Net Direct General Obligation Bonded Debt Ratios Per Capita Debt Secondary Pop. Est. as of Assessed April 1, 2008 Valuation (1,618,680) ($16,068,816,499) Full Cash Valuation ($140,052,671,158) Direct General Obligation Bonded Debt Outstanding as of April 1, 2008 $814.77 8.21% 0.94% Net Direct General Obligation Bonded Debt Outstanding as of April 1, 2008 %$687.42 6.92% 0.79% 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 also has 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 & Poor’s and Moody’s Investors Service were AAA and Aa1, respectively. Debt Service by Source of Funds and Type of Expenditure (In Thousands of Dollars) 2006-07 Actual 2007-08 Estimate 2008-09 Budget $119,246 $164,127 $201,024 Aviation 67,578 68,329 92,199 Arizona Highway User Revenue 31,242 31,246 31,241 Fund Secondary Property Tax Convention Center 18,591 18,592 18,590 General 28,926 31,586 28,462 Golf Grant Funds - Transit and Housing Solid Waste Sports Facilities 848 851 852 2,150 2,141 1,914 21,348 20,289 22,252 9,193 9,177 9,870 Transit 2000* 38,454 40,322 42,227 Wastewater* 57,676 72,684 76,786 86,553 100,677 94,032 162,574 1,903 2,800 $644,379 $561,924 $622,249 Principal $371,520 $267,574 $303,353 Interest 269,536 290,446 314,476 3,323 3,904 4,420 $644,379 $561,924 $622,249 Water* Capital Funds - Various Sources Total Type of Expenditure Issuance Total *Includes bonded debt and general government nonprofit corporation bond payments. 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 8, 2008, the City Council reviewed the Preliminary 2008-13 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 17 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 information presented. The Capital Improvement Program reflected here includes the preliminary plan presented to the City Council in April updated for project cost and timing changes. 2008-13 Capital Improvement Program Development The annual citywide Capital Improvement Program update process began in January when departments prepared revised 2007-08 estimates and updated their five-year capital improvement programs. The 2007-08 estimates reflect updated construction cost estimates, project delays, awarded contract amounts, project carry-overs and other program changes. The 2008-13 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 Recreation, 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 $11.5 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 17, 2008, to review the 2006 bond-funded portion of the 2008-13 Capital Improvement Program. They recommended approval of the plan presented. 149 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 multi-year rate plans on a similar timeline. These plans are first reviewed by the City Council Transportation and Infrastructure 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. 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 second phase is scheduled for completion in January 2009. 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 $21 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. ■ ■ ■ ■ ■ ■ Additional vehicles and upgrades to existing vehicles ($6.8 million) New and expanded passenger and maintenance facilities ($40.8 million) Bus pullouts, left-turn arrows and bicycle lanes ($13.2 million) Technology upgrades ($8.0 million) Light rail, bus rapid transit and related support services ($131.3 million) Contingencies ($3.0 million) Five-Year Arterial Streets Plan 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 2008-13 Capital Improvement Program includes $267.2 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. On May 20, 2008, voters approved a 30-year extension of this 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 150 and related operating costs. The 2008-13 Capital Improvement Program includes $203.1 million of these funds, which are programmed for: 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 and Infrastructure Subcommittee before forwarding on to the City Council. This program reflects the five-year Arterial Street plan approved by the City Council on May 13, 2008. 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 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. A study is currently underway to update the streets, parks, trails and open space impact fees. The results of this study will be presented to City Council in 2008. Operating costs for impact fee-funded projects are included in the rate planning SUMMARY OF 2008-13 CAPITAL IMPROVEMENT PROGRAM (In Thousands of Dollars) Program 2008-09 2009-10 2010-11 2011-12 2012-13 5-Year Total Arts and Cultural Facilities Aviation $17,000 555,263 $14,382 341,992 $238 254,692 $– 295,168 $– 230,387 $31,620 1,677,502 Economic Development Energy Conservation Facilities Management 21,046 1,425 22,684 13,187 1,388 19,605 9,130 1,450 19,103 900 1,450 9,952 900 1,450 8,115 45,163 7,163 79,459 Fire Protection Freeway Mitigation Historic Preservation HOPE Housing Human Services Information Technology Libraries Neighborhood Services Parks, Recreation and Mountain Preserves 26,405 4,504 6,133 1,994 22,274 13,514 30,422 19,286 – 1,713 2,046 13,169 6,000 9,235 19,197 – 3,024 858 – – – – – – – – 64,888 4,504 10,870 4,898 12,330 5,901 6,233 3,149 – – 3,250 – – 54,172 25,415 45,890 21,447 13,861 310,289 6,906 7,824 60,655 8,931 8,099 57,649 200 360 41,188 200 – 42,158 37,684 30,144 511,939 20,577 39,978 239,342 15,954 34,880 86,888 6,662 21,548 86,143 4,365 – 78,360 5,318 – 85,189 52,876 96,406 575,922 60,625 227,166 202,400 10,977 133,306 87,045 15,830 158,486 153,472 15,759 137,476 150,182 8,536 137,028 342,397 111,727 793,462 935,496 331,051 238,544 180,552 223,319 517,291 1,490,757 $2,189,400 $1,124,982 $1,029,528 $961,828 $1,382,219 $6,687,957 Phoenix Convention Center Police Protection Public Transit Solid Waste Disposal Street Transportation and Drainage Wastewater Water Total 151 process for Water, Wastewater and Solid 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 has worked with the Planning Department as well as operating department staff to appropriately program $179.6 million in available impact fees in the 2008-13 Capital Improvement Program. Additional impact fees will be programmed in future capital improvement programs as these fees are collected. SUMMARY OF 2008-13 CAPITAL IMPROVEMENT PROGRAM BY SOURCE OF FUNDS (In Thousands of Dollars) Source of Funds 2008-09 2009-10 2010-11 2011-12 2012-13 5-Year Total General Funds Parks and Preserves Transit 2000 Development Services $6,125 107,624 50,320 89 $9,326 38,246 46,387 250 $8,047 38,063 56,380 134 $7,947 41,188 42,151 – $11,223 42,158 7,904 – $42,668 267,279 203,142 473 Capital Construction 28,479 21,085 21,523 21,793 22,067 114,947 Arizona Highway Users Public Transit 73,716 10,957 64,936 6,670 73,721 7,693 80,944 10,368 81,503 32,653 374,820 68,341 Community Reinvestment 1,465 1,040 900 900 900 5,205 Community Development Block Grants (CDBG) HOPE Grant 3,358 535 560 – 560 – 560 – 200 – 5,238 535 Other Restricted 4,056 – – – – 4,056 Grant Funds Enterprise Funds: Aviation 18,666 260 – – – 18,926 86,605 42,303 26,190 52,696 19,642 227,436 Water Wastewater 103,800 81,061 141,075 39,775 102,562 62,395 112,482 40,206 132,286 67,096 592,205 290,533 Solid Waste 3,745 3,091 2,380 2,389 3,013 14,618 Convention Center 3,764 6,933 1,388 4,520 3,360 19,965 $584,365 $421,937 $401,936 $418,144 $424,005 $2,250,387 $218,895 49,699 312 1,955 $183,634 817 – – $161,067 – – – $– – – – $– – – – $563,596 50,516 312 1,955 372,656 9,088 113 58,050 117,774 71,674 163,431 55,171 266,282 – – 6,529 13,458 36,355 96,182 100 183,513 – – 12,811 – 69,444 71,885 – 213,523 – – 12,125 – 81,862 107,590 – 185,503 – – 4,824 – 162,068 370,820 – 1,221,477 9,088 113 94,339 131,232 421,403 809,908 55,271 $1,118,818 $603,357 $498,720 $415,100 $723,215 $3,359,210 Total Operating Funds Property Tax Supported: 2006 Various Purpose 2001 Various Purpose 1989 Historic Preservation 1988 Various Purpose Nonprofit Corporation Bonds: Aviation Convention Center Golf Solid Waste Transit 2000 Wastewater Water Other Total Bond Funds 152 SUMMARY OF 2008-13 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 2008-09 2009-10 2010-11 2011-12 2012-13 5-Year Total $148,998 49,718 $13,323 20,703 $5,000 15,680 $– 10,444 $12,300 9,011 $179,621 105,556 58,664 2,764 160,401 15,294 3,385 6,755 1,470 38,393 18,168 – 23,749 700 55,046 28,697 – 31,861 1,244 47,296 37,739 – 115,618 700 63,413 33,457 – 236,647 6,878 364,549 133,355 3,385 3,765 32,266 10,962 876 – – – – – – – – – 500 – 4,641 32,766 10,962 $486,217 $99,688 $128,872 $128,584 $234,999 $1,078,360 $2,189,400 $1,124,982 $1,029,528 $961,828 $1,382,219 $6,687,957 153 2008-09 Capital Improvement Program Organizational Chart 2008-09 CAPITAL IMPROVEMENT PROGRAM $2,189,400,000 BOND FUNDS $1,118,818,000 OTHER CAPITAL $486,217,000 OPERATING FUNDS $584,365,000 2006 G.O. Various Purpose $218,895,000 Aviation $372,656,000 Impact Fees $148,998,000 Other Cities’ Participation $58,664,000 General Fund $6,125,000 Parks and Preserves $107,624,000 2001 G.O. Various Purpose $49,699,000 Convention Center $9,088,000 Capital Grants $160,401,000 Passenger Facility Charge $49,718,000 Transit 2000 $50,320,000 Capital Construction $28,479,000 1989 G.O. Historic Preservation $312,000 Solid Waste $58,050,000 Solid Waste Remediation $2,764,000 Other Agency and Private Participation $22,444,000 Arizona Highway User Revenue $73,716,000 Regional Transit $10,957,000 1988 G.O. Various Purpose $1,955,000 Transit 2000 $117,774,000 Capital Reserves $32,266,000 Other Capital $10,962,000 Community Reinvestment $1,465,000 Other Restricted $4,056,000 Other Bonds $55,284,000 Wastewater $71,674,000 Grant $22,559,000 Aviation $86,605,000 Wastewater $81,061,000 Convention Center $3,764,000 Water $103,800,000 Solid Waste $3,745,000 Water $163,431,000 Development Services $89,000 169 Operating Costs for New Capital Facilities Capital facilities include the police and fire stations, senior centers, parks, swimming pools, libraries, cultural facilities and customer service centers 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 are not 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 $11.5 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, any costs associated with operating new facilities and systems, and the funding source(s) for these costs. These costs are reviewed jointly by the Budget and Research, and Engineering and Architectural Services departments. The 2008-09 budget includes $17.4 million in new operating and maintenance costs for new facilities and systems. The funding sources for 2008-09 operating costs include General, Civic Plaza, Water, and Wastewater funds. The schedule on the next page provides operating and maintenance costs for 200809, along with the full-year operating and maintenance costs for 2009-10, and the source of funds that would be used for these costs. 171 OPERATING COSTS FOR NEW CAPITAL FACILITIES # of FTEs 2008-09 Costs 2009-10 Costs Parks and Recreation ASU Downtown Civic Space* 4.0 Maintain and provide recreation activities for this newly constructed park. $86,000 $198,000 Reach 11 Sports ComplexPhase II 5.0 Maintain an additional phase of construction of the Reach 11 soccer complex. This phase adds eight full-size, natural turf soccer fields, 1,000 additional parking spaces, a maintenance shop and concession facilities. 585,000 746,000 New Street Landscape Maintenance 6.0 Provide for the maintenance of 62 acres of new street landscaping. 340,000 472,000 15,819,000 18,327,000 88,000 360,000 219,000 219,000 Phoenix Convention Center North Building (final phase of expansion) 111.8 Maintain and operate North Building of the Phoenix Convention Center complex and parking garage. Police Southwest Precinct at 99th Avenue and Lower Buckeye Road** — Provide utility costs for new police precinct. — Add utilities and facilities maintenance costs for the renovation of this museum (scheduled to open June 2008.) Public Works Children’s Museum 172 OPERATING COSTS FOR NEW CAPITAL FACILITIES (continued) # of FTEs 2008-09 Costs 2009-10 Costs Water Services Distributed Control System 2.0 Provide maintenance and support for Distributed Control System that is used for process control at water treatment facilities. Costs are offset by a reduction in contractual services. — — Security systems maintenance 1.0 Provide maintenance for security system improvements at water and wastewater facilities. 104,000 92,000 Solids removal services — Provide solids removal services for United Plant 2001 expansion at the 91st Avenue Wastewater Treatment Plant. 200,000 208,000 Net Total Costs Source of Funds Convention Center General Water Wastewater Total Source of Funds $17,441,000 $20,622,000 15,819,000 1,318,000 63,000 241,000 18,327,000 1,995,000 36,000 264,000 $17,441,000 $20,622,000 *Costs have been pro-rated to begin in February 2009 when the park is completed (full-year operating costs of $323,000 are offset by contributions of $125,000 per year from ASU). **New positions for this precinct are included in the Public Safety Expansion Fund hiring plan. 173 2006-07 SCHEDULE 1: RESOURCES AND EXPENDITURES BY FUND ACTUAL (In Thousands of Dollars) Resources Expenditures Beginning Fund Balances Revenue Recovery General Parks and Recreation Library Cable Communications $68,761 – – – $238,842 14,620 1,547 10,426 $709 10 21 – $794,512 90,094 34,654 – $157,849 – – 5,013 Total General Funds $68,761 $265,435(1) $740 $919,260 Excise Tax $– $1,051,025 Neighborhood Protection-Police 228 16 Neighborhood Protection-Fire 600 30 Neighborhood Protection Block Watch 1,255 213 2007 Public Safety ExpansionPolice 2007 Public Safety ExpansionFire Public Safety EnhancementPolice 2,727 – Public Safety EnhancementFire 1,596 – Parks and Preserves 60,624 3,564 Transit 2000 173,837 41,027 Court Awards 286 6,670 Development Services 31,970 54,957 Capital Construction 7,716 747 Sports Facilities 16,563 1,653 134,186 Arizona Highway User Revenue 27,222 Local Transportation Assistance – 6,969 (9,832) 30,005 Regional Transit Community Reinvestment 6,239 3,727 118,596 100 Secondary Property Tax Impact Fee Program Administration 2,829 2,369 City Improvement – – Other Restricted Funds 21,263 12,809 Grant Funds 35,568 168,462 $– – – Fund Transfer To From Ending Fund Total Balances Total Operating Capital Debt Service $944,975 104,724 36,222 5,413 $872,695 104,724 36,089 5,413 $3,591 – 133 – $– – – – $876,286 104,724 36,222 5,413 $68,689 – – – $162,862 $1,091,334 $1,018,921 $3,724 $– $1,022,645 $68,689 General Funds: Special Revenue Funds: Total Special Revenue Funds $380,791 $1,637,025 – $– $1,051,025 21,775 275 7,776 102 1,554 19 $– 21,744 8,304 $– 20,654 8,452 $– – – $– – – $– 20,654 8,452 $– 1,090 (148) 3,003 992 – – 992 2,011 – – – – – – – – – – 12,197 5,210 11 14,669 – 17,407 12,197 – – – 130 4,597 17 196 383 2 820 – – – – 8,988 31,106 137,138 – – 19,109 15,992 902 – – – 148,861 5 333 39,468 – 4,295 1,429 437 – – 11,502 – 144,671 10,579 95,091 317,131 6,973 82,828 26,526 33,773 163,130 6,969 8,671 9,966 122,886 8,512 174 92,201 5,775 54,772 17 1,623 38,103 6,966 12,415 64 – – 5,901 11,834 – – 17,199 – 59,444 – 12,973 1,404 – – – 326 – – – 9,193 31,242 – – – 119,246 – 23 21 466 – 67,194 – – – – – 645 5,198 67,217 34,093 203,851 2,021 – 6,673 152,782 – – 3,336 13,701 – 67,054 – 2,150 $424,393 $125,792 $229,211 $779,396 $465,944 $47,855 46,075 28,984 6,865 34,983 – $67,578 86,553 57,676 21,348 18,591 848 $304,745 $113,463 278,279 177,479 165,901 89,136 128,198 34,777 89,152 43,807 8,581 (2,915) $557,500 $164,762 $252,594 $974,856 $455,747 $6,666 $475,064 $1,254,206 $1,245,340 8,512 2,067 6,075 89,016 104,361 212,770 5,775 1,198 54,772 28,056 17,216 9,310 10,816 22,957 128,789 34,341 6,966 3 25,388 (16,717) 1,468 8,498 119,246 3,640 2,021 67,054 10,009 168,633 3,177 163 24,084 35,218 Enterprise Funds: Aviation Water Wastewater Solid Waste Convention Center Golf Course $100,394 166,155 72,761 40,711 60,843 (1,568) $322,870 311,934 203,068 127,411 13,342 7,628 $13 1,813 662 355 44 9 $7,088 12,628 – 1,357 61,647 – Total Enterprise Funds $439,296 $986,253 $2,896 $82,720 GRAND TOTAL $888,848 $2,888,713 $12,157 36,772 21,454 6,859 2,917 403 $418,208 455,758 255,037 162,975 132,959 5,666 $80,562 $1,430,603 $189,312 145,651 79,241 99,985 35,578 7,733 $10,302 $1,477,044 $1,497,630 $3,767,277 $2,000,814 $294,278 $481,805 $2,776,897 $990,380 General fund sales tax revenue is reflected as a transfer from the excise tax fund. The total transfer is $744.1 million, and is included in the General Funds revenue total of $1,009.5 million shown on Schedule 2. 1 177 2007-08 SCHEDULE 1: RESOURCES AND EXPENDITURES BY FUND ESTIMATE (In Thousands of Dollars) Resources Expenditures Beginning Fund Balances Revenue Recovery General Parks and Recreation Library Cable Communications $68,689 – – – $243,303 15,595 1,551 10,235 $850 – – – $846,815 94,791 35,419 – $167,151 – – 4,900 Total General Funds $68,689 $270,684(1) $850 $977,025 Excise Tax $– $1,138,634 Neighborhood Protection-Police 1,090 – Neighborhood Protection-Fire (148) 30 Neighborhood Protection Block Watch (148) 30 2007 Public Safety ExpansionPolice – 125 2007 Public Safety ExpansionFire – 25 Public Safety EnhancementPolice 5,210 – Public Safety EnhancementFire 2,067 – Parks and Preserves 89,016 3,145 Transit 2000 212,770 41,690 Court Awards 1,198 5,309 Development Services 28,056 46,100 Capital Construction 9,310 750 Sports Facilities 22,957 1,550 130,497 Arizona Highway User Revenue 34,341 Local Transportation Assistance 3 6,910 (16,717) 72,002 Regional Transit Community Reinvestment 8,498 2,724 164,127 3,640 Secondary Property Tax Impact Fee Program Administration 3,177 920 City Improvement 163 – Other Restricted Funds 24,084 17,826 Grant Funds 35,218 183,027 $– – – Fund Transfer To From Ending Fund Total Balances Total Operating Capital Debt Service $992,506 110,386 36,970 5,335 $936,833 110,386 36,792 5,335 $12,661 – 178 – $– – – – $949,494 110,386 36,970 5,335 $43,012 – – – $172,051 $1,145,197 $1,089,346 $12,839 $– $1,102,185 $43,012 General Funds: Special Revenue Funds: Total Special Revenue Funds $465,944 $1,815,741 $– $1,138,634 21,836 277 7,799 99 $– 22,649 7,582 $– 22,649 7,582 $– – – $– – – $– 22,649 7,582 $– – – – 7,799 99 7,582 7,582 – – 7,582 – – 30,347 305 30,167 17,842 – – 17,842 12,325 – 7,587 76 7,536 5,374 – – 5,374 2,162 – 15,571 – 20,781 16,385 – – 16,385 4,396 – 100 500 – – 400 – 800 – – – – 9,548 31,194 159,030 – – 20,284 16,877 2,373 – – – – – 313 41,228 – 3,869 741 600 1,928 – 32,528 – – 11,615 123,142 372,762 6,507 70,287 30,003 40,784 166,083 6,913 22,757 11,222 167,767 9,604 185 123,854 5,309 52,796 61 1,700 37,441 6,913 15,057 78 – – 48,442 17,257 121 200 20,896 – 77,624 – 3,284 734 – – – 326 – – – 9,177 31,246 – – – 164,127 9,604 48,627 141,437 5,430 52,996 20,957 10,877 146,311 6,913 18,341 812 164,127 2,011 74,515 231,325 1,077 17,291 9,046 29,907 19,772 – 4,416 10,410 3,640 – – – – – 71,582 – – – – – – 4,097 71,745 41,910 218,245 2,189 – 15,463 175,540 – – 7,753 17,260 – 71,582 – 2,141 2,189 71,582 23,216 194,941 1,908 163 18,694 23,304 $518,184 $193,571 $278,599 $990,354 $468,102 $68,329 100,677 72,684 20,289 18,592 851 $316,965 $125,207 363,650 131,198 198,110 97,980 131,458 29,962 74,432 41,037 9,365 (4,780) $1,800 $395,589 $1,220,618 $1,458,456 Enterprise Funds: Aviation Water Wastewater Solid Waste Convention Center Golf Course $113,463 177,479 89,136 34,777 43,807 (2,915) $332,513 333,873 216,810 133,677 13,592 7,764 $– – – – – – $2,584 – – – 61,533 – Total Enterprise Funds $455,747 $1,038,229 $– $64,117 GRAND TOTAL $990,380 $3,124,654 $6,388 16,504 9,856 7,034 3,463 264 $442,172 494,848 296,090 161,420 115,469 4,585 $43,509 $1,514,584 $205,014 164,682 88,498 109,818 42,320 8,514 $43,622 98,291 36,928 1,351 13,520 – $618,846 $193,712 $281,422 $1,093,980 $420,604 $2,650 $1,436,731 $1,436,178 $4,118,237 $2,226,376 $400,122 $560,021 $3,186,519 $931,718 General fund sales tax revenue is reflected as a transfer from the excise tax fund. The total transfer is $789.7 million, and is included in the General Funds revenue total of $1,060.4million shown on Schedule 2. 1 178 2008-09 SCHEDULE 1: RESOURCES AND EXPENDITURES BY FUND BUDGET (In Thousands of Dollars) Resources Beginning Fund Balances Revenue Recovery General Parks and Recreation Library Cable Communications $43,012 – – – $255,831 17,697 1,546 10,238 $850 – – – Total General Funds $43,012 $285,312(1) Expenditures Fund Transfer To From Total Debt Service Ending Fund Total Balances Operating Capital $890,073 87,526 37,294 – $155,434 $1,034,332 $1,028,607 – 105,223 105,223 – 38,840 38,440 4,745 5,493 5,493 $5,725 – 400 – $– $1,034,332 – 105,223 – 38,840 – 5,493 $– – – – $850 $1,014,893 $160,179 $1,183,888 $1,177,763 $6,125 $– $1,183,888 $– General Funds: Special Revenue Funds: Excise Tax $– $1,232,287 Neighborhood Protection-Police – – Neighborhood Protection-Fire – – Neighborhood Protection Block Watch 1,740 350 2007 Public Safety ExpansionPolice 12,325 850 2007 Public Safety ExpansionFire 2,162 100 Public Safety EnhancementPolice 4,396 – Public Safety EnhancementFire 2,011 – Parks and Preserves 74,515 2,311 Transit 2000 231,325 44,801 Court Awards 1,077 6,250 Development Services 17,291 34,000 Capital Construction 9,046 550 Sports Facilities 29,907 1,550 132,946 Arizona Highway User Revenue 19,772 Local Transportation Assistance – 6,850 4,416 59,916 Regional Transit Community Reinvestment 10,410 2,781 201,024 3,640 Secondary Property Tax Impact Fee Program Administration 1,908 940 City Improvement 163 – Other Restricted Funds 18,694 18,361 Grant Funds 23,304 185,881 Total Special Revenue Funds $468,102 $1,931,748 $– – – $– $1,232,287 23,003 125 8,215 45 $– 22,878 8,170 $– 22,878 8,170 $– – – $– – – $– 22,878 8,170 $– – – – 1,643 9 3,724 2,457 – – 2,457 1,267 – 52,578 169 65,584 39,602 – – 39,602 25,982 – 13,145 42 15,365 13,770 – – 13,770 1,595 – 16,955 – 21,351 19,300 – – 19,300 2,051 – 100 500 – – 400 – 800 – – – – 10,392 32,861 131,445 – – 21,216 18,238 – – – – – – 105 5,374 – 3,908 2,550 546 – – 34,396 – – 12,403 109,682 402,697 7,327 47,383 28,662 49,149 153,518 6,850 29,936 13,191 204,664 12,403 193 165,812 6,405 47,277 87 1,736 38,900 6,850 17,379 80 – – 107,624 50,320 – 89 28,479 – 73,716 – 10,957 1,465 – – – 327 – – – 9,870 31,241 – – – 201,024 12,403 107,817 216,459 6,405 47,366 28,566 11,606 143,857 6,850 28,336 1,545 201,024 – 1,865 186,238 922 17 96 37,543 9,661 – 1,600 11,646 3,640 – – – – – 70,362 – – – – – – 2,848 70,525 37,055 209,185 2,082 – 19,568 177,613 – – 4,056 22,559 – 70,362 – 1,914 2,082 70,362 23,624 202,086 766 163 13,431 7,099 $1,800 $400,053 $1,279,556 $1,522,147 $602,562 $299,265 $314,738 $1,216,565 $305,582 Enterprise Funds: Aviation Water Wastewater Solid Waste Convention Center Golf Course $125,207 131,198 97,980 29,962 41,037 (4,780) $343,078 356,817 218,409 136,900 15,796 7,047 $– – – – – – $– – – – 64,622 – Total Enterprise Funds $420,604 $1,078,047 $– $64,622 GRAND TOTAL $931,718 $3,295,107 $6,452 17,535 10,737 7,176 3,328 267 $461,833 470,480 305,652 159,686 118,127 2,000 $45,495 $1,517,778 $228,410 205,426 110,585 130,891 67,499 8,804 $86,605 103,800 81,061 3,745 3,764 – $92,199 94,032 76,786 22,252 18,590 852 $407,214 403,258 268,432 156,888 89,853 9,656 $54,619 67,222 37,220 2,798 28,274 (7,656) $751,615 $278,975 $304,711 $1,335,301 $182,477 $2,650 $1,479,568 $1,485,230 $4,223,813 $2,531,940 $584,365 $619,449 $3,735,754 $488,059 General fund sales tax revenue is reflected as a transfer from the excise tax fund. The total transfer is $838.0 million, and is included in the General Funds revenue total of $1,123.3 million shown on Schedule 2. 1 179 SCHEDULE 2: REVENUES BY MAJOR SOURCE (In Thousands of Dollars) 2006-07 Actual 2007-08 Estimate 2008-09 Budget $432,553 $437,694 $464,497 State Sales Tax 141,466 141,806 State Income Tax 167,560 207,702 61,158 Revenue Source Increase/(Decrease) From 2007-08 Estimate Amount Percent $26,803 6.1% 149,720 7,914 5.6% 221,132 13,430 6.5% 61,740 64,333 2,593 4.2% $370,184 $411,248 $435,185 $23,937 5.8% $95,060 $102,317 $109,671 $7,354 7.2% GENERAL FUNDS Local Sales Taxes and Related Fees State-Shared Revenues Vehicle License Tax Subtotal Primary Property Tax User Fees/Other Revenue Licenses & Permits 2,531 2,519 2,625 106 4.2% Cable Communications 10,426 10,235 10,238 3 0.0% Fines and Forfeitures 20,601 21,212 20,928 (284) -1.3% 725 775 790 15 1.9% 2,446 1,244 2,266 1,022 82.2% 12.9% Court Default Fee Engineering and Architectural Services Fire 26,261 31,738 35,838 4,100 Hazardous Materials Inspection Fee 1,420 1,325 1,325 0 0.0% Library Fees 1,547 1,551 1,546 (5) -0.3% Parks and Recreation 5,662 5,417 6,164 747 13.8% Planning 1,757 1,774 1,774 0 0.0% 14,566 13,653 13,860 207 1.5% Street Transportation 2,744 2,089 2,129 40 1.9% Other Service Charges 18,878 13,746 12,675 (1,071) -7.8% 2,184 1,868 1,775 (93) -5.0% $111,748 $109,146 $113,933 $4,787 4.4% $1,009,545 $1,060,405 $1,123,286 $62,881 Police Others Subtotal Total General Funds 180 5.9% SCHEDULE 2: REVENUES BY MAJOR SOURCE (Continued) (In Thousands of Dollars) Increase/(Decrease) From 2007-08 Estimate 2006-07 Actual 2007-08 Estimate 2008-09 Budget $31,364 $31,576 $33,211 $1,635 5.2% - 38,084 66,673 28,589 75.1% Public Safety Enhancement 23,657 25,119 27,347 2,228 8.9% Parks and Preserves 34,670 34,339 35,172 833 2.4% 165,460 166,466 176,246 9,780 5.9% Revenue Source Amount Percent SPECIAL REVENUE FUNDS Neighborhood Protection 2007 Public Safety Expansion Transit 2000 6,670 5,309 6,250 941 17.7% Development Services 54,957 46,100 34,000 (12,100) -26.2% Capital Construction 19,722 21,034 21,766 732 3.5% Sports Facilities 17,645 18,427 19,788 1,361 7.4% 134,186 130,497 132,946 2,449 1.9% Court Awards Arizona Highway User Revenue Local Transportation Assistance Regional Transit Revenues Community Reinvestment Secondary Property Tax Impact Fee Program Administration Other Restricted Revenues 6,969 6,910 6,850 (60) -0.9% 30,005 72,002 59,916 (12,086) -16.8% 3,727 2,724 2,781 57 2.1% 118,596 164,127 201,024 36,897 22.5% 2,369 920 940 20 2.2% 12,809 17,826 18,361 535 3.0% -3.3% Grants Public Housing Grants 60,048 70,655 68,348 (2,307) Human Services Grants 34,803 34,345 34,025 (320) -0.9% Community Development 16,621 23,076 34,200 11,124 48.2% Criminal Justice 12,017 16,844 8,493 (8,351) -49.6% Public Transit Grants 12,095 6,272 9,742 3,470 55.3% HOPE VI Grant 10,011 3,841 535 (3,306) -86.1% Other Grants Subtotal - Grants Subtotal Special Revenue Funds 22,867 27,994 30,538 2,544 9.1% $168,462 $183,027 $185,881 $2,854 1.6% $831,268 $964,487 $1,029,152 $64,665 6.7% ENTERPRISE FUNDS Aviation 322,870 332,513 343,078 10,565 3.2% Water System 311,934 333,873 356,817 22,944 6.9% Wastewater System 203,068 216,810 218,409 1,599 0.7% Solid Waste 127,411 133,677 136,900 3,223 2.4% 74,989 75,125 80,418 5,293 7.0% 7,628 7,764 7,047 (717) -9.2% Subtotal Enterprise Funds $1,047,900 $1,099,762 $1,142,669 $42,907 3.9% GRAND TOTAL $2,888,713 $3,124,654 $3,295,107 $170,453 5.5% Convention Center Golf Courses 181 SCHEDULE 3: EXPENDITURES BY DEPARTMENT (In Thousands of Dollars) Program 2007-08 Budget 2007-08 Estimate** 2008-09 Budget General Government Mayor City Council City Manager Deputy City Managers Government Relations Public Information City Auditor Equal Opportunity Personnel Phoenix Employment Relations Board Retirement Systems Law Information Technology City Clerk and Elections Finance Budget and Research Engineering and Architectural Services $2,244 4,420 1,097 1,845 1,361 3,537 3,079 3,872 15,485 196 – 3,473 6,540 6,734 25,872 3,993 (1,001) $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 $2,316 4,478 1,090 1,907 1,478 3,253 3,221 3,689 16,555 227 – 4,996 5,020 7,489 24,742 4,201 197 $2,075 4,578 1,201 1,871 1,435 3,277 3,082 3,648 15,518 221 – 4,949 7,123 6,685 24,521 4,087 225 (13.1%) (3.5%) (1.1%) (9.7%) (5.1%) (7.0%) (8.1%) (13.7%) (11.2%) (3.1%) – 1.0% (0.0%) (9.8%) (10.2%) (11.1%) (60.7%) (10.4%) 2.2% 10.2% (1.9%) (2.9%) 0.7% (4.3%) (1.1%) (6.3%) (2.6%) – (0.9%) 41.9% (10.7%) (0.9%) (2.7%) 14.2% $82,747 $92,660 $84,859 $84,496 (8.8%) (0.4%) $97 458,448 240,086 769 824 $391 521,174 273,282 839 1,003 $359 524,728 263,818 749 895 $381 574,215 302,959 793 1,715 (2.6%) 10.2% 10.9% (5.5%) 71.0% 6.1% 9.4% 14.8% 5.9% 91.6% $700,224 $796,689 $790,549 $880,063 10.5% 11.3% $38,118 17,313 4,383 $43,049 18,643 4,753 $40,938 17,610 4,619 $42,541 17,969 4,937 (1.2%) (3.6%) 3.9% 3.9% 2.0% 6.9% $59,814 $66,445 $63,167 $65,447 (1.5%) 3.6% Transportation Street Transportation Aviation Public Transit $64,356 189,009 181,094 $68,811 202,962 213,275 $67,382 204,719 217,745 $65,375 214,109 240,175 (5.0%) 5.5% 12.6% (3.0%) 4.6% 10.3% Total Transportation $434,459 $485,048 $489,846 $519,659 7.1% 6.1% 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 2007-08 Budget Estimate 2006-07 Actual SCHEDULE 3: EXPENDITURES BY DEPARTMENT (Continued) (In Thousands of Dollars) 2008-09 Budget Percent Change from 2007-08 Budget Estimate Program Community Development Development Services Planning Business Customer Service Center Housing Community and Economic Development Neighborhood Services Hope VI Project Downtown Development International Economic Development $53,350 7,960 450 61,552 18,565 32,330 5 4,067 – $61,186 8,290 709 80,304 20,120 51,365 500 4,643 – $50,843 7,842 592 83,111 19,290 32,695 725 4,178 – $44,356 7,536 553 84,285 18,603 48,845 – 4,344 217 (27.5%) (9.1%) (22.0%) 5.0% (7.5%) (4.9%) – (6.4%) – (12.8%) (3.9%) (6.6%) 1.4% (3.6%) 49.4% – 4.0% – $178,279 $227,117 $199,276 $208,739 (8.1%) 4.7% $112,012 36,351 7,619 37,995 63,057 1,130 158 570 2,011 600 $124,479 40,606 8,981 48,209 66,525 1,160 163 749 2,225 690 $118,257 38,131 8,501 46,125 64,557 1,179 163 706 1,967 626 $112,626 39,404 8,754 63,105 64,500 1,065 167 713 1,477 682 (9.5%) (3.0%) (2.5%) 30.9% (3.0%) (8.2%) 2.5% (4.8%) (33.6%) (1.2%) (4.8%) 3.3% 3.0% 36.8% (0.1%) (9.7%) 2.5% 1.0% (24.9%) 8.9% $261,503 $293,787 $280,212 $292,493 (0.4%) 4.4% $221,685 100,915 26,714 1,528 $265,089 114,031 27,834 2,292 $250,087 111,337 26,720 1,905 $267,979 128,216 30,036 1,729 1.1% 12.4% 7.9% (24.6%) 7.2% 15.2% 12.4% (9.2%) $350,842 $409,246 $390,049 $427,960 4.6% 9.7% $– $124,700 $– $123,445 (1.0%) – $2,067,868 $2,495,692 $2,297,958 $2,602,302 4.3% 13.2% Total Community Development Community Enrichment Parks and Recreation Library Golf Phoenix Convention Center Human Services Education and Youth Programs Rio Salado Historic Preservation Office Phoenix 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 2007-08 Budget 2007-08 Estimate** 2006-07 Actual * For purposes of this schedule, department budget allocations include Grants and City Improvement debt service payments. ** The 2007-08 Estimate reflects $14.4 million in net budget reductions. 183 SCHEDULE 4: EXPENDITURES BY DEPARTMENT BY SOURCE OF FUNDS INCLUDING BUDGET CHANGES (In Thousands of Dollars) Program General Government Mayor City Council City Manager Deputy City Managers Government Relations 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 2008-09 Budget General Funds Enterprise Funds Special Revenue Funds* $– (194) (62) (56) (29) (174) (24) (249) (661) (6) – (187) (478) (250) (781) (123) (31) $(291) (263) (62) (185) (154) (267) (403) (236) (1,327) (21) – (407) (229) (674) (2,347) (317) (66) $2,075 4,578 1,201 1,871 1,435 3,277 3,082 3,648 15,518 221 – 4,949 7,123 6,685 24,521 4,087 225 $2,073 4,578 1,201 1,516 1,433 3,272 3,082 3,253 14,290 221 – 4,894 5,391 6,520 23,157 3,762 202 $– – – 355 – – – – – – – – 440 – 1,324 – – $2 – – – 2 5 – 395 1,228 – – 55 1,292 165 40 325 23 $(3,305) $(7,249) $84,496 $78,845 $2,119 $3,532 $– (2,157) (13) (44) (20) $– (11,538) (7,377) (6) (98) $381 574,215 302,959 793 1,715 $381 467,597 257,087 251 1,656 $– 805 – – – $– 105,813 45,872 542 59 $(2,234) $(19,019) $880,063 $726,972 $805 $152,286 Criminal Justice Municipal Court City Prosecutor Public Defender $(270) (141) (123) $(966) (562) (20) $42,541 17,969 4,937 $34,307 17,380 4,937 $– – – $8,234 589 – Total Criminal Justice $(534) $(1,548) $65,447 $56,624 $– $8,823 Transportation Street Transportation Aviation Public Transit $(179) 10 (383) $(2,593) 71 (2,798) $65,375 214,109 240,175 $25,978 – 24,348 $– 214,109 – $39,397 – 215,827 Total Transportation $(552) $(5,320) $519,659 $50,326 $214,109 $255,224 Total General Government Public Safety Office of Public Safety Manager Police Fire Emergency Management Family Advocacy Center Total Public Safety 184 Recommended Changes Additions / (Reductions) 2007-08 2008-09 SCHEDULE 4: EXPENDITURES BY DEPARTMENT BY SOURCE OF FUNDS INCLUDING BUDGET CHANGES (Continued) (In Thousands of Dollars) Program Recommended Changes Additions / (Reductions) 2007-08 2008-09 2008-09 Budget General Funds Enterprise Funds Special Revenue Funds* Community Development Development Services Planning Business Customer Service Center Housing Community and Economic Development Neighborhood Services Hope VI Project Downtown Development International Economic Development $(1,452) (79) – – (124) (383) – (69) – $(5,168) (866) (46) (24) (366) (1,868) – (119) – $44,356 7,536 553 84,285 18,603 48,845 – 4,344 217 $108 6,745 313 143 3,734 15,353 – 3,782 217 $– – 240 – 778 – – 448 – $44,248 791 – 84,142 14,091 33,492 – 114 – Total Community Development $(2,107) $(8,457) $208,739 $30,395 $1,466 $176,878 Community Enrichment Parks and Recreation Library Golf Phoenix Convention Center Human Services Education and Youth Programs Rio Salado Historic Preservation Office Phoenix Office of Arts and Culture International and Sister Cities Programs $(2,215) (2,028) – – (1,274) – – (22) (24) (46) $(11,329) (2,804) – (321) (2,387) (104) – (86) (148) (41) $112,626 39,404 8,754 63,105 64,500 1,065 167 713 1,477 682 $105,223 38,440 – 1,835 28,200 767 167 713 1,324 682 $493 – 8,754 60,618 250 – – – – – $6,910 964 – 652 36,050 298 – – 153 – Total Community Enrichment $(5,609) $(17,220) $292,493 $177,351 $70,115 $45,027 $– – – (79) $– – (751) (127) $267,979 128,216 30,036 1,729 $– 1,326 22,626 1,398 $267,837 126,890 – 224 $142 – 7,410 107 $(79) $(878) $427,960 $25,350 $394,951 $7,659 $– $– $123,445 $31,900 $68,050 $23,495 $(14,420) $(59,691) $2,602,302 $1,177,763 $751,615 $672,924 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. 185 SCHEDULE 5: DEBT SERVICE EXPENDITURES BY PROGRAM, SOURCE OF FUNDS AND TYPE OF EXPENDITURE * (In Thousands of Dollars) Program Aviation Cultural Facilities Economic Development Environmental Programs Fire Protection Freeway Mitigation Golf Historic Preservation Human Services 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 Redemption 2 General Government Non-Profit Corporation Bonds Bond Issuance Costs Total Program 2006-07 Actual 2007-08 Estimate 2008-09 Budget $229,243 6,953 9,193 1341 1,2911 1491 848 4721 – 2751 5,865 1,7131 3061 31,242 631 1,3581 16,617 18,591 4,1041 1,8251 1,217 40,047 21,348 21,227 681 57,676 86,555 56,035 28,863 1,101 $69,179 7,043 28,885 1341 2,2031 4201 851 503 409 921 5,640 2,5921 4831 31,246 531 2,097 16,433 18,592 4,4421 6,298 2,165 41,913 20,289 19,212 88 72,684 100,677 74,611 31,637 1,053 $93,049 7,443 29,808 312 3,050 492 852 758 521 247 5,848 3,450 883 31,241 50 2,553 16,450 18,590 4,932 7,908 2,174 43,821 22,252 19,928 558 76,786 94,032 103,667 28,644 1,950 $644,379 $561,924 $622,249 $371,520 269,536 3,323 $267,574 290,446 3,904 $303,353 314,476 4,420 $644,379 $561,924 $622,249 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) 2006-07 Actual 2007-08 Estimate 2008-09 Budget Secondary Property Tax Transit 2000 Sports Facilities Arizona Highway User Revenue City Improvement General Transit 2000 Grant Funds Aviation Convention Center Golf Solid Waste Wastewater Water $119,246 326 9,193 31,242 $164,127 326 9,177 31,246 $201,024 327 9,870 31,241 28,926 38,128 2,150 67,578 18,591 848 21,348 57,676 86,553 31,586 39,996 2,141 68,329 18,592 851 20,289 72,684 100,677 28,462 41,900 1,914 92,199 18,590 852 22,252 76,786 94,032 Subtotal Operating Funds $481,805 $560,021 $619,449 149 161,515 1,300 – 1,700 – 170 17 1 22 2 – 286 79 161 172 26 – – – – – 62 – 515 – – – – – – 200 300 – – 600 Subtotal Capital Funds $162,574 $1,903 $2,800 Total Source of Funds $644,379 $561,924 $622,249 Program SOURCE OF FUNDS Operating Funds: Capital Funds: Aviation Bonds Passenger Facility Charge Non-Profit Corporation Bonds General Convention Center Golf Solid Waste Water 2001 Bonds 2006 Bonds Solid Waste Wastewater CIC Bonds Water CIC Bonds * 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 Historic Preservation HOPE Housing 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 188 2006-07 Actual 2007-08 Estimate 2008-09 Budget $3,152 48,172 1,011 1,056 3,115 – 9,950 58 864 133 629 6,014 34,026 – 27,068 6,755 76,763 28,755 46,757 $1,273 43,314 832 1,045 16,152 169 8,833 37 12,104 253 1,608 48,790 13,950 243 24,460 1,286 91,144 36,703 97,926 $– 86,600 1,130 1,425 13,687 80 1,737 2,600 16,320 1,250 1,243 108,481 3,794 – 66,886 2,880 92,230 80,591 103,431 $294,278 $400,122 $584,365 SCHEDULE 6: CAPITAL IMPROVEMENT PROGRAM FINANCED FROM OPERATING FUNDS (Continued) (In Thousands of Dollars) 2006-07 Actual 2007-08 Estimate 2008-09 Budget General Funds: General Library $3,591 133 $12,661 178 $5,725 400 Total General Funds $3,724 $12,839 $6,125 Special Revenue Funds: Parks and Preserves Transit 2000 Court Awards Development Services Capital Construction Arizona Highway Users Public Transit Community Reinvestment Community Development Block Grants (CDBG) HOPE Grant Other Restricted Grant Funds $5,901 11,834 – – 17,199 59,444 12,973 1,404 1,653 9,950 3,336 2,098 $48,442 17,257 121 200 20,896 77,624 3,284 734 2,288 3,890 7,753 11,082 $107,624 50,320 – 89 28,479 73,716 10,957 1,465 3,358 535 4,056 18,666 $125,792 $193,571 $299,265 Enterprise Funds: Aviation Water Wastewater Solid Waste Convention Center $47,855 46,075 28,984 6,865 34,983 $43,622 98,291 36,928 1,351 13,520 $86,605 103,800 81,061 3,745 3,764 Total Enterprise Funds $164,762 $193,712 $278,975 Total Operating Funds $294,278 $400,122 $584,365 Program SOURCE OF FUNDS Total Special Revenue Funds 189 SCHEDULE 7: NET INTERFUND TRANSFERS TO THE GENERAL FUND (In Thousands of Dollars) 2008-09 2006-07 Actual 2007-08 Estimate Budget Increase/ (Decrease) Aviation Central Service Cost Allocation $6,188 $6,388 $6,452 $64 Water Funds Central Service Cost Allocation In-Lieu Property Taxes Total 7,331 9,363 16,694 7,419 9,085 16,504 7,493 10,042 17,535 74 957 1,031 Wastewater Funds Central Service Cost Allocation In-Lieu Property Taxes Total 2,409 7,119 9,528 2,685 7,171 9,856 2,712 8,025 10,737 27 854 881 Solid Waste Central Service Cost Allocation In Lieu Property Taxes Total 4,539 1,069 5,608 4,736 1,062 5,798 4,783 1,132 5,915 47 70 117 Convention Center Central Service Cost Allocation 2,194 2,331 2,354 23 397 264 267 3 $40,609 $41,141 $43,260 $2,119 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) 2008-09 2006-07 Actual 2007-08 Estimate Budget Increase/ (Decrease) $744,110 $789,721 $837,974 $48,253 4,258 3,869 3,908 39 Sports Facilities - Central Service Costs Central Service Cost Allocation Phoenix Union Parking Maintenance Total 121 76 197 105 79 184 106 80 186 1 1 2 Public Housing In Lieu Property Taxes 325 – – – Total from Special Revenue Funds $748,890 $793,774 $842,068 $48,294 Total Transfers to the General Fund $789,499 $834,915 $885,328 $50,413 Transfer to Special Risk Fund $781 $– $– $– Transfer to Infrastructure Repayment Agreements Trust 3,550 5,355 2,152 (3,203) 28,770 24,586 28,462 3,876 $33,101 $29,941 $30,614 $673 $756,398 $804,974 $854,714 $49,740 Special Revenue Funds Excise Transfer to General Fund Development Services Central Service Cost Allocation Transfers from the General 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 2006-07 Actual 2007-08 Estimate 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 20.5 55.0 6.0 22.0 7.3 31.0 38.5 39.0 116.4 2.0 16.0 258.0 220.0 130.2 325.5 33.0 119.1 – (1.0) – (1.0) (1.0) (1.0) (3.3) (2.0) (5.0) – (2.0) (8.0) (2.0) (6.2) (22.0) (2.0) – (2.0) – – (1.0) – (0.5) – – – – – – 2.0 (1.0) – – – 18.5 54.0 6.0 20.0 6.3 29.5 35.2 37.0 111.4 2.0 14.0 250.0 220.0 123.0 303.5 31.0 119.1 1,414.0 1,439.5 (56.5) (2.5) 1,380.5 4,371.7 2,008.2 2.0 6.5 7.0 5,036.7 2,141.0 2.0 6.0 18.0 (70.0) (5.0) – – (1.0) (2.0) (2.0) – – – 4,964.7 2,134.0 2.0 6.0 17.0 6,395.4 7,203.7 (76.0) (4.0) 7,123.7 384.9 388.9 (6.0) – 382.9 9.0 9.0 – – 9.0 Total Criminal Justice 393.9 397.9 (6.0) – 391.9 Transportation Street Transportation Aviation Public Transit 781.0 853.7 99.0 789.0 861.7 127.0 (5.0) – (2.0) – 7.0 – 784.0 868.7 125.0 Total Transportation 1,733.7 1,777.7 (7.0) 7.0 1,777.7 Program General Government Mayor City Council City Manager Deputy City Managers Government Relations 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 Police Fire Office of the Public Safety Manager Emergency Management Family Advocacy Center Total Public Safety Criminal Justice Municipal Court Public Defender 192 *Additions/Reductions 2007-08 2008-09 2008-09 Allowances Ending June 30,2009 Authorized SCHEDULE 8: PERSONNEL SCHEDULE BY DEPARTMENT Number of Full-Time Equivalent Positions (Continued) 2006-07 Actual 2007-08 Estimate 570.0 452.0 75.9 4.0 Housing Community and Economic Development Program Community Development Development Services Planning Business Customer Service Center Downtown Development Office Neighborhood Services HOPE VI Project *Additions/Reductions 2007-08 2008-09 2008-09 Allowances Ending June 30,2009 Authorized (66.0) – 386.0 76.9 (7.0) (1.0) 68.9 3.0 (1.1) 0.5 2.4 148.7 149.7 1.0 21.0 171.7 115.0 115.0 (4.0) – 111.0 16.0 16.0 (1.0) – 15.0 235.0 246.0 (11.0) – 235.0 11.5 9.5 – – 9.5 0.0 1.0 – – 1.0 1,176.1 1,069.1 (89.1) 20.5 1,000.5 1,613.9 1,696.6 (211.0) 5.8 1,491.4 Library 436.5 474.0 (2.6) – 471.4 Golf 140.0 117.3 – – 117.3 Phoenix Convention Center 213.4 229.9 – 111.8 341.7 Human Services 501.2 525.4 (15.9) (1.0) 508.5 Education and Youth 7.8 8.4 (1.0) – 7.4 Rio Salado 1.0 1.0 – – 1.0 Historic Preservation 6.0 8.0 (1.0) – 7.0 12.5 13.5 (0.5) – 13.0 5.0 6.0 – – 6.0 2,937.3 3,080.1 (232.0) 116.6 2,964.7 1,415.1 531.0 506.0 15.0 1,471.1 551.0 528.0 16.0 6.0 – (4.0) (1.0) 11.0 63.0 17.0 – 1,488.1 614.0 541.0 15.0 2,467.1 2,566.1 1.0 91.0 2,658.1 16,517.5 17,534.1 (465.6) 228.6 17,297.1 International Economic Development Total Community Development Community Enrichment Parks and Recreation Phoenix 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 * Additions/Reductions reflect the combined total of budget reductions, budget additions and new positions associated with opening new facilities. 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. Limit Fiduciary Funds – Funds used to account for assets held by the city of Phoenix as a trustee or agent. These funds cannot be used to support the city’s own programs. 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. 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. 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. 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. 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-you-go” 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 and reauthorized in 2008. 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 forprofit 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 Public Safety Expansion Tax – This fund is used to account for the 0.2 percent increase in sales tax approved by Phoenix voters in 2007. The funds will be used to add 500 police personnel and 100 firefighters to the city of Phoenix. 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. Reappropriated Funds – Funds for contracts entered in a previous fiscal year but which are still in progress. Recoveries – Canceled prior year encumbrances. 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. Salary Savings – Budget savings realized 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. 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. 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. Tax Levy – The total amount to be raised by general property taxes for purposes specified in the Tax Levy Ordinance. Self-Insurance – Self-funding of insurance Technical Review – A detailed line-item review 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. of each city department's budget conducted by the Budget and Research Department. Special Revenue Fund – A fund used to 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. 198 Supplemental – Resources to provide new or enhanced programs or services over the base budget allocation. 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. 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.