Budget Summary VOLUME ONE FY 2023/24 Budget Photo by Bill Timmerman; Pima Dynamite Trailhead in Scottsdale’s McDowell Sonoran Preserve Adopted FY 2023/24 Budget City of Scottsdale, Arizona Volume One Budget Summary City Council David D. Ortega, Mayor Kathy Littlefield, Vice Mayor Tammy Caputi Tom Durham Barry Graham Betty Janik Solange Whitehead Administrative Staff Jim Thompson, City Manager Amy Foster, Systems Integrator Sonia Andrews, City Treasurer Nick Lanza, Principal Budget & Research Analyst Bill Murphy, Assistant City Manager Keith Marquis, Sr. Budget Analyst Brent Stockwell, Assistant City Manager Trey Nilles, Sr. Budget Analyst Ana Lia Johnson, Acting Budget Director* Linna Zhou, Sr. Budget Analyst JunJun Rose, Management Assistant *Judy Doyle was the city's Budget Director during the FY 2023/24 budget development process. TABLE OF CONTENTS FY 2023/24 Adopted Budget – Volume One Budget Summary About Scottsdale Report to our Community ................................................................................................................................ 1 City Organization ............................................................................................................................................. 5 Scottsdale City Council ................................................................................................................................... 6 Charter Officers ............................................................................................................................................... 8 Community Profile .......................................................................................................................................... 9 Demographics ............................................................................................................................................... 13 Assets and Facilities .................................................................................................................................... 17 Financial Overview ........................................................................................................................................ 21 Overview Executive Summary ....................................................................................................................................... 23 Final Budget Transmittal ............................................................................................................................... 37 Budget Adoption Ordinance .......................................................................................................................... 39 Property Tax Levy Ordinance ........................................................................................................................ 60 Proposed Budget Transmittal ....................................................................................................................... 62 Distinguished Budget Presentation Award ................................................................................................... 71 What Works Cities Certification .................................................................................................................... 72 Budget Development Process ....................................................................................................................... 73 Budget Calendar ............................................................................................................................................ 82 Adopted Comprehensive Financial Policies and Governing Guidance.......................................................... 83 Fund Accounting - Fund Types...................................................................................................................... 97 Budget by Fund Total Budget Overview .................................................................................................................................. 99 Total Appropriation ..................................................................................................................................... 103 General Fund ............................................................................................................................................... 107 Special Revenue Funds ............................................................................................................................... 137 Preservation Fund ........................................................................................................................... 139 Special Programs Fund................................................................................................................... 147 Stadium Facility Fund ..................................................................................................................... 165 Tourism Development Fund ........................................................................................................... 175 Transportation Fund ....................................................................................................................... 187 TABLE OF CONTENTS Debt Service Fund ....................................................................................................................................... 201 Bonded Debt ................................................................................................................................... 209 Debt Service Expense .................................................................................................................... 215 Long-Term Debt Outstanding ......................................................................................................... 217 Enterprise Funds ......................................................................................................................................... 219 Water and Water Reclamation Funds ............................................................................................. 221 Solid Waste Fund ............................................................................................................................ 241 Aviation Fund .................................................................................................................................. 257 Internal Service Funds ................................................................................................................................. 271 Healthcare Self Insurance Fund ..................................................................................................... 273 Fleet Management Fund ................................................................................................................. 283 Risk Management Fund .................................................................................................................. 295 PC Replacement Fund .................................................................................................................... 307 Grants & Special Districts Funds Grant Funds .................................................................................................................................... 313 Special Districts Fund ..................................................................................................................... 323 Table of Contents REPORT TO OUR COMMUNITY for Fiscal Year 2022/23 Building a Sustainable and Prosperous Desert City Scottsdale has long focused on creating a successful and sustainable community for its residents, businesses and visitors. Over generations, the city has evolved with vision and purpose, setting a high standard among its peer communities, particularly for those thriving in a challenging desert environment. Scottsdale’s General Plan 2035, which was approved by voters in November 2021, guides the city as one that provides exceptional experience, outstanding livability, community prosperity and distinctive character. Scottsdale’s achievements from the past year and objectives for the next are focused on achieving the seven strategic goals outlined in General Plan 2035. Continue reading to learn how Scottsdale is fulfilling its 2035 mission and ensuring a long and prosperous future for the community. If you have comments or suggestions on how we can improve this document, please contact the City Manager’s Office: 480-312-2800 | citymanager@ScottsdaleAZ.gov. Scottsdale exceeded five percent water savings through internal city efforts 10,900,000 gallons of water saved by removing grass through city rebate program 5,000,000 gallons 5,000,000 gallons 895,000 gallons saved in parks saved in water services saved in facilities Respect Character and Culture Scottsdale protects and enhances the community’s unique features 9 miles of city water pipes cleaned using a recycling filtration truck Learn more at ScottsdaleAZ.gov, search “general plan” Highlighted Accomplishments • As the big game was hosted on the other side of the Valley, Scottsdale was home to dozens of Super Bowl LVII activities, including the ESPN Main Street Tailgate in Historic Old Town, which brought nearly 30,000 visitors to Scottsdale and brought international media exposure valued at $4.2 million. • To help the city shine in the spotlight, 50 different maintenance and restoration projects were completed around the city prior to Scottsdale’s Super Season, including updates of the Old Town Cowboy sign and improvements in the Entertainment District which will be enjoyed by city residents all year round. Looking Forward • The city will collaborate with the Phoenix Local Organizing Committee to plan events and activities for the 2024 NCAA Men’s Basketball Final Four. • A new event, “Noon Year’s Eve,” will be held at McCormick-Stillman Railroad Park Dec. 31 featuring a noon ball drop and snow play. Old Town cowboy sign 1 Table of Contents Conserve and Preserve the Environment Scottsdale leads in the stewardship of the Sonoran Desert environment Highlighted Accomplishments • Scottsdale was granted membership to the Organization of World Heritage Cities in recognition of the community’s efforts to preserve and protect Frank Lloyd Wright’s Desert home and laboratory, making Scottsdale among an elite group of 200 cities to receive membership. The 48 square miles of Scottsdale’s McDowell Sonoran Preserve is the equivalent to 36 of New York City’s Central Park • Scottsdale Water increased water available for reuse and aquifer recharge by over nine percent, or 1 million gallons a day. Looking Forward • The Protect and Preserve Scottsdale Task Force will deliver recommendations regarding future funding for the protection, preservation and maintenance of Scottsdale’s parks, open spaces and other community amenities as a 0.2% sales tax dedicated to purchasing land for the McDowell Sonoran Preserve expires in 2025. • Scottsdale Water will present the third One Water Brewing Showcase at Canal Convergence in Fall 2023, an opportunity to sample beer made exclusively with ultra-purified, recycled water from Scottsdale’s Advanced Water Treatment Plant. Learn more at ScottsdaleAZ.gov, search “preserve” NOT TO SCALE Collaborate and Engage Scottsdale fosters transparent, responsive and collaborative community involvement Highlighted Accomplishments • Three park playgrounds were replaced, including a newly accessible playground for children with physical disabilities at Thompson Peak Park. Adaptive playground at Thompson Peak Park • Vista del Camino’s Community Assistance Program distributed over $4.1 million in rental assistance to 547 households and over $332,000 in utility assistance to 595 households through various funding sources. Looking Forward • Scottsdale is exploring partnerships with Scottsdale Unified School District and Maricopa County Community Colleges to establish the Scottsdale Promise scholarship and internship programs for current and future Scottsdale students. • The city will continue community programs including the Adopt-a-Senior holiday program to serve low-income seniors and disabled adults and the Back-to-School program to provide school supplies, clothes, shoes and more for Scottsdale students. Reporting issues is EZ 2 Residents made 39,184 requests using Scottsdale EZ last year. The number one request? Residential container repair. Have a broken recycling container or other issues? Report it at ScottsdaleAZ.gov, search “EZ”. Table of Contents Foster Well-Being 6:04 minutes average police response time. Scottsdale promotes a culture of physical and mental health, safety and well-being Highlighted Accomplishments 5:51 minutes average fire response time. • The Scottsdale Police Department completed realigning its resources which resulted in redeploying patrol squads and introducing new units such as the Short-Term Rental Squad, Park Rangers and expanding the Real Time Crime Center to better meet service needs of Scottsdale residents. Fire Department public education and outreach connected with 58,810 people. • After completing a community-wide assessment, the city joined a variety of community partners to announce the Blue Zones Scottsdale Project, a comprehensive initiative focused on transforming the environments where people live, work, learn and play to improve community well-being, resilience and economic vitality. Scottsdale libraries welcomed more than 550,000 visitors. Looking Forward • A variety of programs will assist Scottsdale residents facing a housing crisis, including a bridge housing program which will assist 120 individuals with emergency shelter and transitional housing and the community action program at Vista del Camino Community Center, which will provide emergency rent assistance to 230 Scottsdale households. 60 volunteers with Vista del Camino & Paiute neighborhood centers 21,851 food boxes provided at senior and community centers. Scottsdale’s McDowell Sonoran Preserve had 870,000 visits. • The city will complete construction of the Bell Road area multiuse sports fields, begin construction of Indian Bend Wash improvements and a new fire station near Hayden Road and Loop 101. Connect the Community Scottsdale connects all community members through safe and efficient mobility options Highlighted Accomplishments Looking Forward • Scottsdale resumed operating the Spring Training game day trolley following COVID-19 suspension and modified the route to focus on connecting attendees from parking garages to Old Town Scottsdale. • The city will improve comfort and safety of bus stops around Scottsdale through deep cleaning, enhanced lighting, new shade structures and greater accessibility. • Through focused effort, Scottsdale boosted productivity and levels of service in maintaining transportation infrastructure, with a 19 percent improvement in average repair times while replacing 94 streetlight poles and completing 850 LED fixture upgrades. • The city will evaluate and monitor the performance of the public transit system to help bring ridership to pre-COVID levels while ensuring riders are getting the services most beneficial to them. Advance Innovation and Prosperity Want to help out? Learn more at ScottsdaleAZ.gov, search “volunteer” Scottsdale embraces a diverse and innovative economy Highlighted Accomplishments Looking Forward • Using a $5 million grant, Scottsdale reconfigured aircraft operations at the Scottsdale Airport in preparation for the Super Bowl and WM Phoenix Open weekend, successfully supporting over 900 aircraft over the weekend, and 490 other aircraft following the weekend events. • Continue work to identify cost effective and reliable electric powered work trucks that could begin replacing traditional gas powered light-duty pickup trucks for full workday operations. • Scottsdale Economic Development recruited or retained 12 businesses in Scottsdale, resulting in 797 jobs at an average salary of $90,005 representing a total five-year economic impact of $3.1 billion. Scottsdale Airport 3 Table of Contents Revitalize Responsibly Scottsdale vigorously evaluates the short and long-term impacts of development and redevelopment decisions Highlighted Accomplishments • Continued the Choose Scottsdale HUUB program offering free access to an online community and resource center for small businesses. The typical Scottsdale household pays less for monthly water, wastewater, trash and recycling services than the average rates for other Valley cities. Source: City of Tempe 2023 • In collaboration with Colorado Basin municipal and public water providers, Scottsdale adopted an ordinance to implement more water efficiency practices by prohibiting natural grass in front yards of new single-family homes built after August 15. $72 $103 CHANDLER SCOTTSDALE $106 $138 AVERAGE * MESA Looking Forward • Continue developing a citywide Sustainability Plan and Heat Mitigation Plan based on the Cooler Scottsdale study for City Council adoption. • Begin implementing and training staff on the 2021 edition of the International Code Council Family of Building Codes. Bills may vary based on actual usage and size of property *Average of the eight largest cities in the Valley Resources and Expenses Scottsdale is required by law to adopt a budget each year and cannot spend more than the total budgeted amount. This includes all city funds for the fiscal year ending June 30. The budget was adopted by the City Council in June 2023. The city’s financial statements are audited annually by an independent auditor. The most recent audit from October 2022 received a clean opinion. Resources (in millions of dollars) Expenses (in millions of dollars) 2024 BUDGET 2023 $964.3 2024 BUDGET Fund Balances consist of accumulated surpluses from prior years held in contingency and reserve. BUDGET $795.5 2023 Contingency & Reserves are set aside for emergency use. $1,368.9 Capital Budget is used to construct major facilities and infrastructure including building and roads. BUDGET $1,006.5 Capital set aside for future projects that is not to be spent by year-end. $425.3 $365.5 $810.7 $1,066.9 $1,056.2 Taxes and Service Charges are collected to support city services and pay for debt service. Total Resources Available $1,012.1 $2,618.3 $3,027.0 Learn more at ScottsdaleAZ.gov, search “finance” 4 $688.5 $739.1 $2,112.0 $2,533.3 Operating Budget pays for city services and the employees that provide those services. Maximum Expenditure Limit Some numbers may not add correctly due to rounding. Table of Contents CITY ORGANIZATION An Introduction to Our Leadership The voter-approved City Charter established the council-manager form of government which combines the strong political leadership of elected officials with the professional experience of an appointed local government manager. People of Scottsdale Learn more at ScottsdaleAZ.gov, search “about” Citizen Advisory Groups COMMISSIONS Airport Environmental Historic Preservation Human Relations Human Services McDowell Sonoran Preserve Neighborhood Parks and Recreation Planning Tourism Development Transportation Veterans BOARDS Adjustment Building Appeals Development Review Judicial Appointments Library Loss Trust Fund Personnel Public Safety Personnel Retirement - Fire Local Public Safety Personnel Retirement - Police Local CITY MANAGER’S OFFICE ADMIN SERVICES Communications Government Relations Information Technology COMMUNITY ADMIN SERVICES SERVICES Human Resources Human Services Libraries Parks & Recreation Planning & Business Operations Preserve WestWorld Mayor & City Council Accounting Budget Business Services Finance Purchasing City Treasurer Charter Officers City Manager Assistant WATER City Water Quality Manager Reclamation Services Planning & Engineering Technology & Administration Water Services Pipeline & Treatment Agreements Civil Prosecution Risk Management Victim Services City Auditor City Clerk Assistant COMMUNITY & City ECONOMIC Manager DEVELOPMENT Aviation Planning & Development Services Economic Development Tourism & Events PUBLIC WORKS Capital Project Management Facilities Management Fleet Management Solid Waste Management Transportation & Streets City Attorney Presiding Judge City Court Police Chief Executive Leadership Fire Chief POLICE Office of the Police Chief Uniformed Services Investigative Services Operational Services FIRE Office of the Fire Chief Emergency Services Professional Services Prevention Services 5 Table of Contents Scottsdale City Council The City Council consists of the mayor and six council members who are elected to represent the city at large and serve overlapping, four-year terms. These seven citizens oversee city government and set policy, approve programs, appropriate funds, enact laws, select charter officers, and appoint residents to serve on advisory boards. The mayor is the chair of the Scottsdale City Council and presides over its meetings, which are typically held on Tuesdays in the City Hall Kiva Forum located at 3939 N. Drinkwater Blvd. in Old Town Scottsdale. Mayor David D. Ortega Mayor David D. Ortega began his term of office in January 2021. He is focused on safeguarding public health and safety; maintaining Scottsdale’s family-friendly neighborhoods; protecting the McDowell Sonoran Preserve and strengthening Scottsdale’s world-renowned reputation. As mayor, he is committed to equal rights for all, responsive city government and adoption of citizen-driven General Plan 2035 to support economic vitality. Mayor Ortega is a registered Arizona architect and designed many landmark buildings in Old Town Scottsdale. He is a graduate of the University of Arizona and was an apprentice architect to Bennie Gonzales FAIA, the award-winning designer of Scottsdale City Hall, Civic Center Library and Scottsdale Center for the Performing Arts. Throughout his life, Mayor Ortega has served on numerous city, county and state commissions, and on many civic and nonprofit organizations including serving as a Scottsdale City Councilman from 2000 to 2004, on the Scottsdale Downtown Architectural Guidelines Committee, Scottsdale Development Review Board, the State of Arizona School Facilities Board and the Governor’s Latino Advisory Council. He is a member of the American Institute of Architects, Scottsdale Leadership and Friends of the Scottsdale Library. He is a past president of the Scottsdale Sunrise Rotary Club. Mayor Ortega and his wife, Rosemary Gannon, have been married for 40 years. They live in the Park Scottsdale neighborhood near Saguaro High School where they raised their children Alexandra and Luke. DOrtega@ScottsdaleAZ.gov | 480-312-2433 Councilwoman Caputi began her first term on the Scottsdale City Council in January 2021. She has lived and worked in Scottsdale for over 20 years. She is the president and owner of Yale Electric West, Inc, a company she founded in Scottsdale in 2001. Councilwoman Caputi holds a Bachelor of Arts degree in Councilwoman Economics from Wellesley Tammy Caputi College in Wellesley, Massachusetts and a Master of Business Administration from Simmons University in Boston. Councilwoman Caputi is a Fellow with the Flinn-Brown Arizona Center for Civic Leadership and Leading for Change and current chair of the Scottsdale Coalition of Today and Tomorrow (SCOTT), an organization dedicated to promoting, enhancing, and improving Scottsdale’s quality of life and economic vitality through community education and involvement in public policy issues. Councilwoman Caputi, along with her husband, Steve, enjoys many outdoor activities and physical pursuits. They have three young daughters who attend local public schools. TCaputi@ScottsdaleAZ.gov | 480-312-7402 6 Councilmember Durham began his first term on the Scottsdale City Council in January 2021. He grew up in a small town in Iowa and attended Cornell College in Mt. Vernon, Iowa, where he graduated Phi Beta Kappa and magna cum laude in 1977, with majors in philosophy and history. After graduating from Cornell Councilmember College, he attended New Tom Durham York University Law School. He then joined international law firm Mayer Brown, where he specialized in tax controversy, representing the firm’s clients in audits, trials, and appeals of local, state, and federal tax cases. During his time at Mayer Brown, he was recognized by Chambers USA as one of the top 25 tax controversy lawyers in the nation. Councilmember Durham retired from Mayer Brown in April 2015 and soon thereafter became a full-time resident of the city of Scottsdale. He served as treasurer of the Protect Our Preserve political action committee and has also volunteered as a mock trial coach at a local high school, teaching trial skills, teamwork, and the rules of evidence. His wife Martha has served as an Episcopal Deacon at a local church; together they have two sons. TDurham@ScottsdaleAZ.gov | 480-312-7456 Table of Contents Councilmember Graham grew up in northern Scottsdale and was an allstate athlete at Chaparral High School. Today he lives in southern Scottsdale where he and his wife, Farrah, are raising their twin sons. He is a Certified Public Accountant (CPA) for one of the most prestigious accounting firms in Arizona. He specializes Councilmember in auditing the financial Barry Graham statements and analyzing the performance of private businesses, most of which are based in Arizona. As a history enthusiast, Barry spent several years after high school in Massachusetts, earning undergraduate degrees from Boston University in Economics and International Relations. While working as an analyst in the Massachusetts State Legislature, Barry graduated from the University of Massachusetts with a Master of Science in Accounting where he delivered the commencement address. Barry has served as a precinct committeeman since 2012 and was twice-elected treasurer of his political party’s local legislative district. Councilwoman Janik began her first term on the Scottsdale City Council in January 2021. She was born and raised in Chicago and earned a Bachelor of Science in Chemistry from the University of Illinois Chicago. After college, she was employed by GD Searle, where her primary research concentrated Councilwoman on dissolving blood clots Betty Janik – an endeavor which was awarded in international publication. Thereafter she took time off to start a family. She taught math and science for nearly 10 years at both the middle school and high school levels in the Denver area. After relocating to Scottsdale, she has served in many volunteer roles including as the past treasurer of Protect Our Preserve and past president of the Board of the Coalition for Greater Scottsdale. She and her husband, Joe, a pediatric surgeon (now retired), have been married for 50 years. They have three grown children, all physicians, and nine delightful grandchildren. BGraham@scottsdaleaz.gov | 480-312-7454 BJanik@ScottsdaleAZ.gov | 480-312-2374 Kathy Littlefield began her second term on the Scottsdale City Council in January 2019. She has 25 years of financial and management experience. She co-founded (with her husband Bob Littlefield, who served three terms on the Scottsdale City Council from 2002 to 2015) and continues to manage a successful Councilwoman Scottsdale-based computer Kathy Littlefield company, NetXpert Systems, Inc. Her previous professional experience includes working in the Budget Office of the City of Plano, Texas, as an office manager for a local greetings company, and as the finance director for Girls Ranch, a nonprofit organization formerly in Scottsdale. She served as president of her Civitan Club (an organization that helps developmentally disabled and underprivileged children), where she was chosen “Civitan of the Year” for her efforts. Councilwoman Littlefield is a Scottsdale native. She attended the Scottsdale Unified Schools Ingleside Elementary and Arcadia High and graduated with distinction from Arizona State University in 1970 with a bachelor’s degree in business education. Councilwoman Whitehead began her first term on the Scottsdale City Council in January 2019. She came to Scottsdale in 1996 from San Diego for ‘just six months’, fell in love with everything Arizona and never went back. Councilwoman Whitehead graduated from the University of Florida where Councilwoman she earned a degree in Solange Whitehead electrical engineering. She is an accomplished businesswoman, currently working in the real estate field. She served 10 years as executive director of the Environmental Fund for Arizona and in that capacity was named Arizona Wildlife Federation’s “Arizona Conservationist of the Year” in 2009. Councilwoman Whitehead is a former Scottsdale McDowell Sonoran Preserve Commissioner, proudly helped lead the monumental effort to pass Proposition 420 in November 2018 and provided funding for the initial 3D Printer Lab at Scottsdale Community College. She and her husband Mike have three grown children and spend a lot of time outdoors. KLittlefield@ScottsdaleAZ.gov | 480-312-7412 SWhitehead@ScottsdaleAZ.gov | 480-312-7423 7 Table of Contents Charter Officers Highlighted Recognition The City Council hires six officers to advise them on policy issues and run day-to-day operations. They are collectively known as the charter officers because their positions are spelled out in the City Charter, a voterapproved document which describes the organization and authority of the city government in Scottsdale. These positions are the city attorney, city auditor, city clerk, city manager, city treasurer, and presiding city judge. The city manager is the chief executive officer and is responsible for about 90 percent of the city’s workforce. Scottsdale is certified Gold by Bloomberg Philanthropies What Works Cities The Gold Level Bloomberg Philanthropies What Works Cities Certification is awarded for exceptional use of data to inform policy decisions, allocate funding, improve services, evaluate program effectiveness and engage residents. Since 2018 Scottsdale has continued to level up its certification, from Honor Roll to Gold, and is among an elite group of only 62 cities worldwide to have received the certification. What Works Cities spotlighted Scottsdale’s datadriven approaches to tackling issues with short-term and vacation rental properties, and managing water resources and water policies. Scottsdale named No. 1 Healthiest Employer in the Valley Jim Thompson City Manager JThompson@ScottsdaleAZ.gov 480-312-2800 Sherry R. Scott City Attorney SScott@ScottsdaleAZ.gov 480-312-2405 The Phoenix Business Journal named Scottsdale the healthiest “big company” employer in the Valley. This award recognizes Scottsdale’s commitment to providing wellness programs and opportunities for employees beyond exercise and nutrition. Scottsdale’s programs contain many support services including components related to financial, social, emotional, physical and mental well-being. City staff’s commitment to the community was recognized at the annual Scottsdale Employee Awards Lai Cluff Acting City Auditor Ben Lane City Clerk Sonia Andrews City Treasurer Marianne Bayardi Presiding Judge LCluff@ScottsdaleAZ.gov 480-312-7851 SAndrews@ScottsdaleAZ.gov 480-312-2364 8 BLane@ScottsdaleAZ.gov 480-312-2412 MBayardi@ScottsdaleAZ.gov 480-312-7604 Over 40 different Scottsdale employees were awarded for their hard work throughout the year. Kris Cano received the Herbert R. Drinkwater Award for her dedication to serving the community. She recently retired from the position as the WestWorld General Manager and previously worked as the Forensic Services Director for many years. Kris is an active participant in developing standards for forensic science, a volunteer for a variety of organizations and the governance subcommittee Chairperson for the One N Ten Board. The Bill Donaldson Award, given to an employee that transformed and innovated the culture of city government, went to Bill Hylen. Bill not only performed two difficult and high-level jobs simultaneously, as both a City Attorney Senior Supervisor and the Acting Human Resources Director, but also helped improve the HR process by establishing a variety of new online trainings, including ones for supervisors in Scottsdale. These employees, along with many more, are part of what makes Scottsdale so great. Find more recognitions and rankings at ScottsdaleAZ.gov, search “recognition” Table of Contents COMMUNITY PROFILE Welcome to Scottsdale, Arizona A World-Class Community Located in the beautiful Sonoran Desert, Scottsdale is nestled at the foot of the McDowell Mountains in the Valley of the Sun. Scottsdale is a premier community known for a high quality of life with attractive residential, working and shopping areas. It is an internationally recognized destination and a thriving home to businesses of all kinds. Scottsdale consistently ranks among the nation’s best places to live, with top-rated schools, award-winning parks, low crime rates and a vibrant economy. In Old Town Scottsdale you will find world-class restaurants, shops, art galleries and resort hotels. Scottsdale’s McDowell Sonoran Preserve is a permanently protected Sonoran Desert habitat encompassing nearly 48 square miles. There are recreational opportunities for everyone with golf courses, tennis courts, parks, pools, bike paths and trails. Scottsdale was founded by Army Chaplain Winfield Scott in 1888 but was not incorporated until 1951 when Scottsdale was a small community of 2,021 residents situated on about two square miles of land. Today, more than 243,000 Scottsdale residents enjoy the rich diversity of experiences offered within the city’s 185 square miles. Renovated Civic Center City Employee Picnic Dia de los Muertos Oktoberfest event at Granite Reef Senior Center Scottsdale Youth Development’s Wet n’ Wild Day 9 Table of Contents Work Hard, Play Hard Business Scottsdale is one of the state’s leading job centers with a robust economy anchored by bio-life science companies, high-tech innovation, financial services, tourism and corporate headquarters. Almost 34,000 companies do business in Scottsdale, creating more than 200,000 jobs. SkySong, the ASU Scottsdale Innovation Center, is designed to help companies grow through a unique partnership with Arizona State University. Scottsdale’s downtown, Old Town Scottsdale, is an emerging center for high-tech businesses. To the north, the Scottsdale Airpark is the city’s largest employment area, and the Scottsdale Cure Corridor is a hub of premier healthcare providers and biomedical companies. Tourism With great weather, breathtaking scenery and a calendar full of special events, Scottsdale is a popular tourist destination in Arizona that welcomes millions of visitors annually. The city boasts many hotels, resorts, restaurants and spas. That activity adds up to big business. The annual economic impact of Scottsdale visitors is estimated at $2.5 billion dollars. Visitors generate almost $56 million dollars of annual tax revenue— representing more than one in every five city tax dollars. Special Events Every spring, Scottsdale garners national attention with an eclectic mix of sporting and cultural events that draw hundreds of thousands of spectators and millions of television viewers. Scottsdale resorts annually host Fiesta Bowl teams as Old Town becomes a focal point for pep rallies and fan parties. The Barrett-Jackson Collector Car Auction headlines a week of automotive attractions and becomes the star of more than 40 hours of live television coverage. This year, the WM Phoenix Open unfolded at the same time as Super Bowl LVII, which put Scottsdale squarely in the center of the sports world, hosting national TV coverage of the one of the largest galleries in golf along with 40 plus hours of live telecasts from the Historic Old Town ESPN Main Street Tailgate. The Scottsdale Arabian Horse Show — among the largest horse shows in the nation — and Scottsdale’s festive Parada del Sol Parade and Rodeo follow later. In March, Major League Baseball takes center stage. Old Town Scottsdale serves as the spring home of the San Francisco Giants and makes the city a home base for visiting fans and media from across the nation. Fiesta Bowl Pep Rally Historic Old Town ESPN Main Street Tailgate 10 Scottsdale Arabian Horse Show Table of Contents Scottsdale Top Attractions 1. Pinnacle Peak Park 2. Preserve Gateway and Scottsdale’s McDowell Sonoran Preserve 4. WestWorld 3. TPC Scottsdale 5. Scottsdale Airport/Airpark 1 6. McCormick-Stillman Railroad Park 7. Indian Bend Wash Greenbelt 2 3 4 8. Scottsdale Fashion Square 5 6 10. Scottsdale Historical Museum 9. Old Town Scottsdale 7 8 9 10 11 12 11. Scottsdale’s Museum of the West 13 12. Scottsdale Stadium 13. SkySong 11 Table of Contents Managing Our Water Resources Scottsdale’s effort to reduce water usage, reuse and recycle our water is more important than ever. In the past year, Scottsdale has effectively saved over 38 million gallons of water, a six percent decrease in usage. Some of Scottsdale’s main water reduction efforts were through finding and fixing leaks in parks, removing grass and installing advanced drip irrigation systems and cooling tower monitors. One of the biggest successes came from Scottsdale’s water rebate program, which incentivizes citizens for water saving practices. The program received more than 1,200 applications and saw an increase of 434 percent in grass removal rebates. In addition to these reduction efforts, Scottsdale has continued to benefit from the Advanced Water Treatment Plant, one of the most sophisticated recycled water facilities in the world, to recycle and reuse its water. The innovative facility can treat up to 20 million gallons of wastewater a day to a water quality standard that exceeds that of bottled water and is only the third facility in the nation to be permitted for direct consumption. While the ultra-purified, recycled water is not currently utilized in the drinking water system, it is an important water source for irrigation around the city. Most notably, the recycled water is used to irrigate the TPC Scottsdale, which annually hosts the WM Phoenix Open. This year the golf tournament occurred at the same time as Super Bowl LVII, which brought record numbers of visitors to Scottsdale. Scottsdale Water Treatment Plant Scottsdale employee inspects the technological infrastructure at Scottsdale Water To educate the public on the safety and quality of Scottsdale’s ultrapurified, recycled water, Scottsdale Water also collaborated with local breweries in November 2022 for its One Water Brewing Showcase. This event allowed nine different local breweries to use Scottsdale’s ultrapurified, recycled water to create beer and provided samples for the public to try. The one-of-a-kind showcase will return to the Scottsdale Waterfront during Canal Convergence in November 2023. As Scottsdale looks forward, it plans to continue these efforts to ensure a successful and sustainable future. Learn more at ScottsdaleAZ.gov, search “water” Scottsdale Water Treatment Plant Scottsdale Water Campus 12 Table of Contents DEMOGRAPHICS Scottsdale by the Numbers: A Demographic Summary Source: U.S. Census Quickfacts 1951 2,021 1960 10,026 1970 67,841 Scottsdale is the 48th largest city in the U.S. by area. 1980 88,364 1990 2000 130,069 202,705 2010 2021 217,365 2022 242,753 243,050 Over 6,000 people directly serve the residents of Scottsdale. Source: U.S. Census Bureau Quickfacts and City of Scottsdale U.S. Census Bureau Quickfacts and City of Scottsdale 6 Appointed Officers 6 Council Members 1 Mayor 162 Board & Commission Members SCOTTSDALE’S 243,050 2,697 CITIZENS Employees ARE SERVED BY 31 miles long 3,780 184.5 square miles Volunteers Scottsdale’s elevation rises by nearly 4,000 feet from south to north. Source: City of Scottsdale and Scottsdale Airport Weather Station 1,510 ft 1,150 ft Lowest point 63° 43° 83° 58° 85° 63° 102° 79° 4,877 ft Highest Point (Butte Peak) Scottsdale Airport Change in Elevation 11.4 miles wide 13 Table of Contents Scottsdale Residents Scottsdale’s median age of 47.9 is almost 10 years older than the U.S. median age of 38.4. Source: U.S. Census Bureau (2017-2021 ACS) Median Age (US): 38.4 | Median Age (Scottsdale) 47.9 Age Under 5 8,696 5–19 30,467 20–24 12,513 25–54 90,900 3 in 5 Scottsdale residents over age 25 have earned a bachelor’s degree or higher. 75+ 26,561 55–74 69,548 1 in 5 Scottsdale residents is a person of color. Source: U.S. Census Bureau (2017-2021 ACS) U.S. Census Bureau (2017-2021 ACS) Hispanic or Latino: 10.4% Asian: 4.9% 112,579 (60.2%) Bachelor’s Degree or higher Two or more races: 2.7% AfricanAmerican: 2.2% NativeAmerican: 0.6% White: 79.2% While most Scottsdale residents speak English, 1 in 10 can also speak another language. Source: U.S Census Bureau (2017-2021 ACS) 47,647 (25.5%) Spanish Associate Degree/Some College 12,752 (5.5%) English only 21,637 (11.6%) High School Graduate 5,146 (2.7%) Less than High School Graduate 187,009 Population 25 years & older 14 201,037 (87.4%) English and another language Indo-European languages 9,897 (4.3%) 28,952 (12.6%) Asian and Pacific Islander languages Other languages 1,675 (0.7%) 4,646 (2.1%) Table of Contents Scottsdale has the highest median housing price of any of the large Valley cities and one of the lowest property tax rates. $540,000 Source: U.S. Census Bureau (2017-2021 ACS) $269,400 $277,700 $ $ $ Glendale Mesa Phoenix $252,200 $314,000 $321,300 $ $ Peoria Tempe Almost 3 in 4 Scottsdale residents live in single unit housing $ $377,800 $351,600 $ $ Chandler Gilbert Scottsdale Nearly half of all Scottsdale households make more than $100,000 a year. Source: U.S. Census Bureau (2017-2021 ACS) Source: U.S. Census Bureau (2017-2021 ACS) Population in single unit housing 175,244 (73.9%) 24.8% less than $50,000 (28,088) 49.1% $100,000 or more (55,685) 26.1% $50,000-$99,999 (29,678) Population in multi-unit housing Population in other housing (Mobile Home, Boat, RV, Van, etc.): 1,716 (0.7%) 60,126 (25.4%) 2 in 3 housing units in Scottsdale are owner occupied. Source: U.S. Census Bureau (2017-2021 ACS) 84% occupied housing (113,451) 55.9% owner occupied (75,531) 1.4% homeowner vacancy rate 28.1% renter occupied (37,920) 6.3% rental vacancy rate 16% seasonal & vacant units (21,467) 134,918 total housing units 15 Table of Contents 7,347 employees Healthcare and finance firms lead the list of top employers. Source: City of Scottsdale Economic Development Department (2023) 2,984 2,697 employees employees 2,505 employees 2,253 employees 1,752 1,559 employees employees 1,407 employees 1,345 employees 1,300 employees * Excludes grocers, convenience stores and traditional retail stores. Almost 40% of Scottsdale employees have a decade or more of experience. Source: City of Scottsdale More people come to work in Scottsdale each day than leave to work in other communities. Source: U.S. Census Inflow/Outflow Analysis (2020) Scottsdale has more than 200,000 jobs 32,090 work/live in Scottsdale 169,250 workers enter 10+ years 1,021 (37.9%) 5-10 years 420 (15.6%) 5 years or less 1,256 (46.6%) 75,515 To view additional demographic information, visit ScottsdaleAZ.gov and search “about” work elsewhere Note: Total population is determined by the Decennial Census. Demographic numbers are based on five-year estimates. 16 Table of Contents SIMPLY BETTER SERVICE Scottsdale employees provide Simply Better Service that helps keep the community clean and healthy. Learn more at ScottsdaleAZ.gov, search “about” 17 Table of Contents Scottsdale employees provide Simply Better Service that help keep our World-Class Community safe. 18 Table of Contents Scottsdale employees provide Simply Better Service that enhance the quality of life of residents and visitors. 19 Table of Contents Scottsdale has a vibrant business community and is a destination for arts, dining and tourism. 20 Table of Contents FINANCIAL OVERVIEW Making Cents of Numbers Scottsdale values transparency and communication with our community. Creating and adopting a budget with public feedback, as well as informing residents about the uses of their money each year, ensures that Scottsdale is providing Simply Better Service for a World-Class community. Community Feedback September - January April May June Prepare Propose Review Adopt Departments work to forecast and refine forthcoming budget requests Proposed Budget is presented to City Council City Council tentatively adopts Proposed Budget City Council adopts the final budget and sets the rates, fees and taxes for the fiscal year Adopted Budget (all funds) Scottsdale’s budget is balanced as the city has more resources available than it is using Total Resources $3,027.1 (in millions of dollars) Total Uses $2,533.3 (in millions of dollars) Scottsdale’s Two Budgets Scottsdale has two budgets, one is for capital projects that become long-time assets and the other is for city operations, which fund services for the public. Operating Budget Capital Budget Funds long-term investments in the city such as building, acquisition and improvement of infrastructure and facilities. Funds the day-to-day city operations and services. Top Uses of Funds FY 2023/24 Budget $1,420.7 (in millions of dollars) Water Management $449.8 Transportation $427.7 Community Facilities $144.8 All other uses of funds: $398.4 Top Uses of Funds FY 2023/24 Budget $1,112.6 (in millions of dollars) Public Safety $215.4 Public Works $110.2 Water Resources $101.2 All other uses of funds: $685.8 21 Table of Contents Where Do My Property Taxes Go? Total: $64.5 million For every dollar collected SCHOOLS/EDUCATION MARICOPA COUNTY $0.55 $0.20 SPECIAL DISTRICTS $0.10 CITY SERVICES CITY DEBT SERVICES $0.08 $0.07 Some property tax numbers may vary based on location in Scottsdale Scottsdale has one of the lowest property and sales tax rates in the Valley. Property tax on a $300,000 house Sales tax on a $30,000 car $257 $294 $418 $722 MESA SCOTTSDALE AVERAGE * GLENDALE $450 $525 $583 $870 CHANDLER & GILBERT SCOTTSDALE AVERAGE * GLENDALE *Average of the eight largest cities in the Valley Where Do My Sales Taxes Go? Total: 8.05% County Sales Tax 0.7% State Sales Tax 5.6% STATE GENERAL FUND 3.9% 22 ROADS 0.5% JAILS AND DETENTION CENTERS 0.2% PUBLIC SAFETY AND OTHER CITY SERVICES City of Scottsdale Sales Tax 1.75% 1.10% 0.10% minimum public safety requirement EDUCATION 0.6% CITIES AND COUNTIES 1.1% PRESERVE TRANSPORTATION 0.30% 0.35% Table of Contents OVERVIEW | Executive Summary EXECUTIVE SUMMARY The City of Scottsdale’s three budget volumes provide a comprehensive picture of the city’s financial plan for FY 2023/24. This Executive Summary complements that information highlighting items, issues and trends that shaped the budget. CURRENT YEAR CITY OUTLOOK The city’s balanced budget is possible due to the continuing strength of the local and state economy as the Valley comes off one of the busiest special events seasons in history - much of that centered in Scottsdale. While revenue growth remained strong through the pandemic and the most recent fiscal year, the adopted FY 2023/24 budget anticipates a decline in local tax revenues in anticipation of an economic downturn and slowdown in consumer spending. Given the uncertainty of the economy, the adopted budget takes a cautious approach to the future. The five-year financial forecasts anticipate revenues returning to normal historical growth trends and excess revenues collected will be used as one-time revenues to address a number of needs in the adopted budget as detailed throughout the budget volumes. CURRENT YEAR CITY COUNCIL POLICY DECISIONS The following are the major policy items included in the city’s adopted FY 2023/24 budget: • $68.5 million General Fund transferred to the CIP ensuring compliance with Scottsdale’s Financial Policies Appendix A – Budgeting Governing Guidance. • $10.0 million General Fund in additional public safety retirement contributions to paydown the Police unfunded liability. • $0.8 million General Fund for a 5.0 percent Step Program for Police sworn personnel. • $4.6 million General Fund ($6.5 million all funds) for the citywide pay for performance program, through which employees may receive up to 5.0 percent salary increases based on performance (up to the maximum of their salary range). • $4.5 million General Fund ($5.7 million all funds) for a 2.0 percent market adjustment. • $6.8 million for the costs anticipated in implementing a comprehensive classification and compensation study ($8.5 million all funds). • $3.7 million ($4.4 million all funds) for retirement cost increases. • $1.1 million ($1.3 million all funds) for the vacation buyback program for eligible employees. • $0.8 million ($1.1 million all funds) for health and dental cost increases. 23 Table of Contents OVERVIEW | Executive Summary $2.9 million from additional primary property tax collections due to tort liability claim payments, the allowable 2 percent statutory adjustment and new construction. • STAFFING CHANGES The city’s total FTE count for FY 2023/24 is 2,638.89 which is a net increase of 50.00 FTE from the prior year adopted budget. The positions that were added in FY 2023/24 were spread across divisions where needs had been identified. For example: • Administrative Services: 1) an ADA/Title VI Coordinator (1.00 FTE) position to focus on Americans with Disabilities compliance and reporting; 2) a Technology Coordinator (1.00 FTE) position to support the function-specific technology needs of public meetings and video programming; 3) a part-time Public Information Officer (0.50 FTE) position to assist with coordinating communication to a variety of media, print and internal and external sources on department calls, activities and events; 4) Human Resource Analyst (2.00 FTE) positions to aid in recruitment and retention; 5) Enterprise Security Engineer (2.00 FTE) positions to improve the city’s cybersecurity posture; 6) a Software Developer/Architect (1.00 FTE) position to modernize business solutions; 7) an Enterprise Portfolio Manager (1.00 FTE) position to manage the city’s information technology portfolio; and 8) Enterprise Communications Engineer (1.00 FTE) position to support and maintain Water Resources Supervisory Control and Data Acquisition (SCADA) systems (Water Funds). • Community and Economic Development: 1) Plans Examiner (2.00 FTE) positions to focus on Green Building plan review and inspections; 2) a Systems Integrator (1.00 FTE) position to keep up with the technology demands of the department; 3) Code Inspector I (4.00 FTE) positions to focus on community needs and short-term rentals; and 4) the increase of hours for an existing Planning Specialist position (0.25 FTE) to address customer service needs. • Public Safety - Police: 1) a Police Officer (1.00 FTE Sworn) position for the Crisis Response Team (CRT) to enhance coverage, increase collaboration and support with other Police operational units, and increase the quantity and frequency of calls CRT can respond to; 2) Police Officer (2.00 FTE Sworn) positions for the Traffic Enforcement Unit to increase response to Council and public safety complaints, monitor high-collision and school safety zones, and to assist general traffic patrol and investigations; 3) Police Civilian Investigator (2.00 FTE Non-Sworn) positions to provide crime control prevention data, analysis, intelligence, and other significant case support; and 4) Municipal Security Guard (2.00 FTE NonSworn) positions that will provide security guard presence at One Civic Center and the Civic Center/Mustang libraries. • Public Works: 1) a Public Works Building Inspector I (1.00 FTE) position to review daily progress of capital projects to ensure that the soon to be assets of the city are constructed in conformance with the approved plans and specifications, that the site is managed in a way to keep the traveling public safe during construction and to ensure the end product is of a quality acceptable to the city; 2) a Safety & Training Coordinator (1.00 FTE) position to prevent and mitigate workplace incidents; 3) a Maintenance Worker I (1.00 FTE) position and a Streets Equipment Operator Senior (1.00 FTE) position dedicated to paths and trails maintenance; 4) a Streets Equipment Operator Senior (1.00 FTE) position to address the additional maintenance responsibilities of the Cross Roads East project-phase I, the Pima Road and Drainage improvement, and Rawhide Wash; 5) a Street Maintenance Worker (1.00 FTE) position to facilitate maintenance and repair of the city’s concrete assets; 6) Solid Waste Equipment Operator IV (3.00 FTE) positions to allow for faster response times to collection issues and to aid in promoting safe operating practices; and 7) Solid Waste Equipment Operator III (2.00 FTE) positions to continue to provide weekly refuse and recycle service to the growing number of residents across the city. • Water Resources: 1) a Water Planning & Policy Analyst (1.00 FTE) position to aid in the ever-increasing workload that is associated with water shortage and drought; 2) a Senior Management Analyst (1.00 FTE) position, which will aid in the division’s ability to expand monitoring and analytical activities related to development impact fees, development and other service agreements, cost of service studies and general data analysis; and 3) an Intern position (0.48 FTE) for additional monitoring in preparation for enhanced Direct Potable Reuse (DPR) permit in the future. These staffing changes are summarized in the following schedule, using full-time equivalent positions (FTEs). 24 Table of Contents OVERVIEW | Executive Summary FTE Changes from Prior Fiscal Year by Division FY 2022/23 ADOPTED FTEs CITY MANAGER Assistant City Manager Assistant to the City Manager CITY TREASURER Principal Financial Analyst Tax & License Specialist I Tax & License Specialist II Tax Auditor ADMINISTRATIVE SERVICES ADA / Title VI Coordinator Enterprise Communications Engr Enterprise Portfolio Manager Enterprise Security Engineer Human Resources Analyst Public Information Officer Software Developer/Architect Technology Coordinator 2,588.89 1.00 1.00 2.00 (a) 1.00 1.00 1.00 1.00 4.00 1.00 1.00 1.00 2.00 2.00 0.50 1.00 PUBLIC SAFETY - FIRE Fire Captain (56) - (Sworn) Fire Engineer (56) - (Sworn) Fire Systems Analyst Firefighter (56) - (Sworn) 1.00 0.50 4.00 Communication & Outreach Coord 1.00 Operation Fix-It Prog Mgr Planner Principal Planning & Develop Area Mgr Planning Specialist Plans Examiner Plans Review Manager Project Coordination Liaison Strategic Initiatives Prog Mgr System Integrator (1.00) 1.00 2.00 0.25 1.00 1.00 (3.00) (1.00) 1.00 (0.33) 1.00 1.00 (1.44) 2.00 1.00 (1.00) (0.76) 2.32 (1.00) 1.00 6.27 (a) (a) (b) (c) 5.00 6.00 1.00 (11.00) 1.00 9.50 COMMUNITY AND ECONOMIC DEVELOPMENT Administrative Secretary Code Inspector I COMMUNITY SERVICES (con't) Library Page Maint Tech Aquatics/Fountains Maintenance Technician Maintenance Worker I Maintenance Worker II Management Analyst Preserve Prog Dir/Spec Proj Recreation Leader I Recreation Leader II Recreation Leader Senior Video Production Assistant PUBLIC SAFETY - POLICE (c) Municipal Security Guard Police Civilian Investigator Police Officer - (Sworn) 2.00 2.00 3.00 (b) 7.00 (a) 6.75 PUBLIC WORKS Maintenance Worker I PW Building Inspector I Safety Training Coordinator Solid Waste Equip Operator III Solid Waste Equip Operator IV Street Maintenance Worker Street Equipment Operator Sr Transit Operations Analyst 1.00 1.00 1.00 2.00 3.00 1.00 2.00 1.00 Transportation Representative (1.00) COMMUNITY SERVICES 11.00 Account Specialist Communications Specialist Community Services Supervisor Human Services Case Worker 1.00 0.63 1.00 (0.16) Human Services Representative 1.00 Intern Library Monitor (0.29) (0.70) WATER RESOURCES Intern Management Analyst Senior Water Plan. & Policy Analyst 0.48 1.00 1.00 2.48 (b) Net Change All Divisions FY 2023/24 ADOPTED FTEs 50.00 2,638.89 25 Table of Contents OVERVIEW | Executive Summary (a) Position transferred from one division to another and reclassified. (b) -0.70 Library Monitor and -0.01 Recreation Leader I to help offset costs of Police Municipal Security Guards. (c) 0.50 Position transferred from Community Services to Community & Econ Dev during FY 2021/22, not included in FY 2022/23 adopted budget. HOW THE ADOPTED BUDGET WILL AFFECT CITIZENS’ PROPERTY TAX RATES The FY 2023/24 primary property tax levy will be used to support General Fund activities such as police and fire protection, operation and maintenance of parks and libraries, and other general governmental functions. The primary property tax levy also includes a repayment to the Risk Management Fund reserve of $2,201,944 for tort liability claim payments made during calendar year 2022. For FY 2023/24, the city’s total primary property tax levy of $39.30 million is an increase of $2.88 million over the FY 2022/23 levy of $36.42 million. The increase is due to 1) tort liability claim payments; 2) the 2 percent statutory adjustment; and 3) new construction. The FY 2022/23 primary property tax rate of $0.4970 per $100 of assessed valuation will increase by $0.0180 to $0.5150 in FY 2023/24. For FY 2023/24, the city’s secondary property tax levy will increase $5.53 million from the FY 2022/23 adopted budget of $30.06 million to $35.59 million due to use of accumulated fund balance in FY 2022/23 as a result of savings achieved through a general obligation debt refinancing. The FY 2022/23 secondary tax rate of $0.4101 will increase by $0.0563 to $0.4664 per $100 of assessed valuation in FY 2023/24. The combined tax levy is the aggregate of the primary and secondary levies. For FY 2023/24, the city’s total combined property tax levy is an increase by approximately $8.41 million from $66.48 million in FY 2022/23 to $74.89 million in FY 2023/24. In FY 2023/24, citizen tax bills will reflect a combined property tax rate of $0.9841, which is $0.0743 more than the FY 2022/23 combined rate of $0.9071. The management of the combined property tax rate is included in the city’s adopted financial policies for debt management, which states that the combined tax rate will not exceed $1.50 per $100 of assessed value. Based on this combined rate, an owner of a home with a County Assessor’s real property assessed value of $100,000 will pay approximately $98.41 in city property taxes, applying the combined property tax rate. The Maricopa County Assessor’s Office, not the City of Scottsdale, determines real property assessed values used to calculate property tax bills. CHANGES FROM PROPOSED TO ADOPTED BUDGET The budget development process is an ever changing one. This is true not only in the ramp up to establish the Proposed Budget, but also in the period between the Proposed Budget and when the Final Adopted Budget is presented. Below lists the changes that were made between the proposed budget release, and this final budget. • Added two new capital projects approved by City Council on March 21, 2023: 1) Pima Road Sound Wall ($6.0 million); and 2) Railroad Park Ramada ($0.3 million). • Transferred $0.4 million from the Dynamite Boulevard: Pima Road to 136th Street Turn Bays and Bike Lanes to the Osborn Road Complete Street: Hayden Road to Scottsdale Road project approved by City Council on March 21, 2023. • Increased the 68th Street: Indian School Road to Thomas Road project ($0.1 million) approved by City Council on March 21, 2023. • Moved up the timing of the 68th Street Storm Drain South of Camelback Road project so that the funding is in FY 2023/24 and FY 2024/25, not FY 2024/25 and FY 2025/26. This project goes together with the 68th Street Sidewalk project. • Removed the additional funding not necessary for the two Bond 2019 solar projects: 58 - Install Parasol Solar Shade Structure at City Hall Parking Lot ($1.2 million) and 59 - Install Solar Systems at Civic Center Campus ($0.9 million). • Increased the 45 - Renovate WestWorld Horse Barns to Increase Rentable Space project ($1.0 million) as result of the use of the unrestricted funds from the Bell Road land sale as presented to Council on April 13, 2023. • Removed the additional funding request for the 18 – Build Roadway and Pedestrian Improvements along 2nd Street from Drinkwater Blvd to Goldwater Blvd ($14.0 million) per Council direction received on April 13, 2023. 26 Table of Contents OVERVIEW | Executive Summary • Transferred $0.6 million from the 47 - Replace WestWorld Arena Lights to Reduce Operating Costs project to the 45 Renovate WestWorld Horse Barns to Increase Rentable Space project approved by City Council on April 18, 2023. • Moved $3.5 million from FY 2024/25 to FY 2023/24 for the WestWorld Tent Refurbishment capital project in an effort to complete that project sooner. • Deferred $2.1 million from the Downtown Main Street Streetscape & Pedestrian Improvements capital project from FY 2023/24 to FY 2024/25 to first address concerns about parking spaces. • Deferred $1.4 million from Energy Performance Project – Phase II from FY 2023/24 to FY 2024/25 to align with delays caused by procurement issues. • Moved $0.9 million from FY 2024/25 to FY 2023/24 for the WestWorld Polo Field Lighting for Soccer Fields capital project in an effort to complete the project sooner. • Deferred $0.9 million from 22 – Build New Swimming Pools and Replace Building at Cactus Pool from FY 2023/24 to FY 2024/25 to better align with expected spending. Those are the adjustments during the budget process, and additional changes will be made as needed. FUND HIGHLIGHTS The remainder of this Executive Summary highlights the key elements of each fund in the FY 2023/24 budget. The General Fund is presented first and in more detail because of its size and importance. GENERAL FUND – SOURCES The General Fund supports core services and is the largest fund with the greatest potential for revenue fluctuations. Forecasted General Fund sources for FY 2023/24 are $436.1 million, approximately $48.4 million (12.5 percent) more than the FY 2022/23 adopted budget. The following bar graph summarizes the major sources. Note: Rounding difference may occur 27 Table of Contents OVERVIEW | Executive Summary That total projected increase comes from a net of several different sources. Below highlights the sources contributing significantly to the change: • $12.4 million from a projected increase in general fund sales tax, including $1.1 million for the portion dedicated to Public Safety. While an increase in sales tax is reflected when compared to the FY 2022/23 adopted budget, the proposed FY 2023/24 sales tax will see a decrease when compared to the FY 2022/23 forecast. The FY 2022/23 sales tax was updated from the original budget (forecast) to reflect the significant increases the city was experiencing due to inflation, stimulus money continuing to work its way through the economy, pandemic spending sprees, etc. The city expects FY 2023/24 sales tax revenues to decrease with the anticipated economic downturn and slowdown in consumer spending and over the fiveyear forecast, sales tax will realign with historical growth trends. • $20.3 million from a projected increase in the city’s proportionate slices of state shared income tax, sales tax, and vehicle license fees. • $1.3 million from additional primary property tax collections. • $2.3 million from Building Permit Fees & Charges to help cover inflationary costs and department operating costs to provide an excellent customer experience. • $0.5 million from WestWorld Equestrian Facility Fees based on anticipated events and establishing a more appropriate cost recovery formula used when developing WestWorld fees. • $1.2 million due to increased revenue from TPC Scottsdale and Scottsdale Stadium usage fees. • $0.5 million due to increases in the Advanced Life Support (ALS) Ambulance Contract; increased revenue associated with third-party fire protection system inspections; special events reimbursements; and rate and fee increases for afterhours fire inspections, fire plan reviews, and CPR/First Aid classes. • $0.5 million due to increased Recreation Fees with the opening of the WestWorld Sports Complex; and rate and fee changes to aquatics, patio rentals, and to tennis and volleyball court rentals. • $1.0 million due to increased indirect costs for services provided by the General Fund to enterprise operations. • $6.3 million from a projected increase in interest earnings due to higher anticipated rates of return on investments. • $1.0 million due to a Transfers In from the Tourism Development Fund to pay for the painting of the public art wall ‘The Path Most Traveled’ on the Arizona State Loop 101. GENERAL FUND – USES The adopted FY 2023/24 General Fund uses budget is projected to be approximately $456.4 million (not including contingency, reserves, and designations), approximately $43.7 million (10.6 percent) more than the FY 2022/23 adopted budget. The following bar graph provides a summary of the General Fund uses. 28 Table of Contents OVERVIEW | Executive Summary Note: Rounding difference may occur The General Fund adopted operating budget for next fiscal year is a $44.1 million increase from the FY 2022/23 adopted budget. Scottsdale is a people-powered service provider. As such, most expenses are related to funding for our high-performance workforce and providing pay and benefit packages that allow the city to retain and recruit employees. Significant personnel expenditures included in the adopted operating budget include: • A 5.0 percent Step Program for Police sworn personnel of $0.8 million. • $4.6 million ($6.5 million all funds) for the citywide pay for performance program, through which employees may receive up to 5.0 percent salary increases based on performance (up to the maximum in their salary range). • A 2.0 percent market adjustment of $4.5 million ($5.7 million all funds). • $6.8 million for the costs anticipated in implementing a comprehensive classification and compensation study ($8.5 million all funds). • $1.1 million ($1.3 million all funds) for the vacation buyback program for eligible employees. • $3.7 million ($4.4 million all funds) for retirement cost increases. • $0.8 million ($1.1 million all funds) for health and dental cost increases. • $10.0 million in additional public safety retirement contributions to paydown the unfunded liability. While high quality staff are the engine that drives our organization, the proposed General Fund budget also includes money for these priority projects and programs across the city’s operating and administrative departments: City Manager: • $0.1 million to implement the Scottsdale Promise Program, which is a commitment from the city to its residents to allow all eligible Scottsdale residents to attend Scottsdale Community College for two years with Arizona resident tuition and fees fully funded. 29 Table of Contents OVERVIEW | Executive Summary Administrative Services: • $0.3 million for Information Technology contract increases. • $0.2 million of one-time funding to complete a comprehensive classification and compensation study. • $0.2 million of one-time funding to reconfigure the Human Resources Office to accommodate staffing changes within the existing space. Community & Economic Development: • $0.4 million of one-time funding for public art restoration. • $0.3 million for increases in banking fees related to higher credit card processing fees. (The division is exploring ways to reduce this cost such as implementing a convenience fee when developers use credit cards.) • $0.3 million of one-time funding for a comprehensive Shade and Tree Master Plan. (Implementation of the plan is included in the Capital Improvement Plan (CIP).) • $0.2 million carry-over of one-time funding to provide an in-depth, independent review, assessment, and benchmarking of Planning & Development Services’ rates and fees that was budgeted in FY 2022/23 but will not be completed until FY 2023/24. • $0.1 million of one-time funding to update or draft a new Character Area Plan. • $0.1 million for a 2 percent financial participation agreement increase with Scottsdale Arts for wages to remain competitive. Community Services: • $0.4 million of one-time funding for the removal and disposal of organic waste material from WestWorld. • $0.4 million for an annual one-time contract labor request for events and custodial services at WestWorld. • $0.3 million of one-time funding to purchase equipment to maintain the WestWorld Sports Complex. • $0.3 million one-time funding to repair and replace aging portable horse stalls and material at WestWorld. • $0.2 million to increase the feed and bedding inventory at WestWorld. • $0.2 million of one-time funding to replace critical library infrastructure technology needs at Mustang and Civic Center Libraries. • $0.2 million of one-time funding to complete the Indian School Master Plan and begin the Cactus pool and Parks and Recreation master plans. • $0.1 million for equipment rentals at WestWorld to allow for faster response to equipment replacements on the weekends. • $0.1 million of one-time funding for replacing the WestWorld Equidome footing. Public Safety - Fire: • $1.3 million of mostly one-time funding for overtime to provide backfill of 21 Firefighters while they attend paramedic training/certification • $0.4 million for various contract increases. • $0.3 million of one-time funding to purchase hazardous material equipment and ladder extrication equipment. • $0.3 million of one-time funding for overtime to provide backfill while sworn staff attend specialty teams training. • $0.2 million of one-time funding to contract for landscaping for fuel mitigation. 30 Table of Contents • OVERVIEW | Executive Summary $0.1 million to reclassify seven Firefighter positions to two Fire Captains and five Fire Engineers to properly align the needs within the division and decrease the impacts of mandatory hold overs on the workforce. Public Safety - Police: • $1.0 million for overtime for special events which will be reimbursed by the vendors. • $0.8 million contract increases for photo enforcement, leased vehicles, Maricopa County Jail services, and municipal security. • $0.4 million to continue a grant funded initiative for electronic citation (e-citation) and electronic collision (e-collision) platforms to increase efficiency in enforcing traffic-related violations and vehicular safety. Public Works: • $1.0 million of one-time funding to paint the public art wall ‘The Path Most Traveled’ on the Arizona State Loop 101. • $0.2 million to paint the exterior of selected city facilities. • $0.2 million of one-time funding to purchase 24 cooling tower controllers for the Cooling Tower Water Reduction Project. • $0.1 million to cover Facilities Management price increases for parts, equipment, materials, and contractual services due to inflation. • $0.1 million for a contract increase in maintaining the city’s automatic gates inventory. • $0.1 million to contract for land surveying, mapping, and compiling GIS data. GENERAL FUND ENDING BALANCE The FY 2023/24 budget includes the following: Emergency Reserve – The Emergency Reserve was new beginning in FY 2022/23. The reserve was added to incorporate best financial practices. Emergency Reserve complies with Financial Policy No. 2.02. The policy states that the General Fund will maintain five percent of operating uses, excluding transfers out as an emergency reserve to cover for unexpected emergencies and events where immediate action must be taken in the best interest of the city's residents and business owners. The FY 2023/24 General Fund Emergency Reserve is $18.8 million. General Plan Initiatives – The General Plan Initiatives fund balance designation was created in FY 2022/23 to support the implementation of the new General Plan, which was approved by voters in November 2021. The FY 2023/24 General Fund General Plan Initiatives designation is $15.0 million. Innovation Initiatives – The Innovation Initiatives reserve designation was created in FY 2022/23 to support projects that benefit the community and support organizational goals and City Council initiatives. The FY 2023/24 General Fund Innovation Initiatives designation is $0.5 million. Operating Contingency – Operating Contingency includes $15.0 million of budget authorization in the event that unforeseen expenses occur during the fiscal year. Contingency funds are utilized only after all budget options have been considered and require City Council approval. Operating Reserve – The Operating Reserve complies with Financial Policy No.2.01. The policy states the General Fund will maintain an operating reserve of 20 percent of General Fund operating uses, excluding transfers out, which beginning in FY 2022/23 is an increase from 10 percent to incorporate best financial practices. The Operating Reserve is to only be used for unforeseen emergencies or catastrophic impacts to the city. Maintaining a sufficient General Fund Reserve level is financially prudent. Based on the operating budget expenditure estimate, the FY 2023/24 General Fund Operating Reserve is $75.1 million. PSPRS Pension Liabilities – Public Safety Personnel Retirement System (PSPRS) is an Arizona pension system for public safety personnel. The FY 2023/24 PSPRS Pension Liabilities fund balance designation is $82.4 million. FY 2023/24 includes a $10.0 million payment to the PSPRS to pay down the Police unfunded liability. 31 Table of Contents OVERVIEW | Executive Summary Cavasson Infrastructure Reimbursement – Designation created in FY 2019/20 for the Cavasson Development Project and the eligible infrastructure reimbursements associated with milestones achieved in phases one, two and three of the development agreement. The FY 2023/24 fund balance designation is $14.6 million with a second payment of $7.3 million expected in FY 2025/26. Undesignated, Unreserved Fund Balance – Undesignated, Unreserved Fund Balance accounts for any funds remaining after the designation of all other reserves/uses. The FY 2023/24 ending undesignated, unreserved fund balance is $0.5 million. Under prudent fiscal management practices, this balance should most appropriately be used for one-time expenditures, not to fund new or to expand programs with ongoing operating expenses. SPECIAL REVENUE FUNDS The city accounts for sources dedicated for specific purposes – by law or city policy – through Special Revenue Funds. There are five Special Revenue Funds – Transportation Fund, Preservation Fund, Special Programs Fund, Tourism Development Fund, and the Stadium Facility Fund. The Transportation Fund accounts for Highway User Revenue Fund (HURF) dollars shared with cities from state gas taxes. However, the majority of the fund’s funding comes from the 1990 (0.20 percent) voter-approved sales tax, and partially from the state’s Local Transportation Assistance Fund, which is funded from lottery proceeds, and it is distributed to cities and towns through an annual application process. Total sources are expected to be about $52.0 million. Uses total about $66.1 million of which $32.3 million represents operating expenses. The operating expenses are those necessary to operate and maintain the city’s transportation system. The largest expenses include transit contracts, trolley maintenance, medians and rights-of-way maintenance and the street overlay program. Of the Transfers Out, $15.5 million is dedicated for transportation capital projects per the Budget Governing Guidance (Appendix A to the adopted Financial Policies) (50 percent of the 1990 (0.2 percent) transportation sales tax revenue) and $18.3 million are for additional pay-as-you-go transfers above the 50 percent level authorized by the City Council. The Preservation Fund is used to account for sources and uses related to the acquisition of land for the Scottsdale McDowell Sonoran Preserve. Funding comes from the 1995 (0.20 percent) and 2004 (0.15 percent) voter-approved sales tax. Under the sales tax ballot language, the preservation sales tax revenues are to be used only for preserve acquisition, preserve related construction and trailheads. These sales tax revenues are forecasted to be $59.9 million. Approximately $35.4 million of this amount will be required for debt service payments for debt already issued for land purchases. The ending fund balance on June 30, 2024, is expected to be $131.1 million. The Special Programs Fund is a collection of smaller restricted sources dedicated to specific uses. The services included in these various programs are intended to be self-supporting and not subsidized by the General Fund. Examples of these funds include Public Safety - Police Racketeering Influenced Corrupt Organization (RICO) funds, the City Court’s Court Enhancement Funds (CEF), and the McCormick-Stillman Railroad Park funds. The Tourism Development Fund is a special revenue fund created to account for transient occupancy (bed) tax revenues and Fairmont Scottsdale Princess Hotel Lease payments which are to be used for tourism related activities and General Fund support. The fund currently has annual sources of $35.0 million, annual uses of $43.4 million, which includes Council approved one-time use of fund balance for Tourism related capital projects, and a projected June 30, 2024 ending fund balance of $10.2 million. The Stadium Facility Fund is a special revenue fund created to account for activity at the Scottsdale Stadium. In June 2019, the city entered into a 25-year baseball facilities agreement with the Scottsdale Charros and the San Francisco Giants Baseball Club for the use and maintenance of the Scottsdale Stadium. This fund accounts for the contributions and uses as per the agreement. The fund currently has annual sources of $2.2 million, annual uses of $1.6 million and a projected June 30, 2024 ending fund balance of $5.4 million. DEBT SERVICE FUND The Debt Service Fund is designated for payment of long-term debt. Total sources are $89.8 million for FY 2023/24. 32 Table of Contents OVERVIEW | Executive Summary The $91.5 million budget for debt service payments in FY 2023/24 is approximately $4.2 million more than the FY 2022/23 Adopted Budget primarily due to the second GO Bonds issuance for the Bond 2019 program. ENTERPRISE FUNDS Enterprise Funds account for the city’s water and water reclamation, solid waste, and aviation services, which operate as standalone businesses. User fees are assessed to cover cost of services. Water Fund – The Water Fund is impacted by multiple cost factors over the five‐year planning period including: • Operating cost increases for raw water to include Tier 2a Drought Contingency Plan ( DCP) drought pricing, put in place by Central Arizona Project (CAP) • Increasing actions and costs required for drought preparedness through enhancement of conservation measures and messaging • Additional staff to support conservation efforts and compliance • Increasing costs for replacing and repairing aging infrastructure • New groundwater treatment operating costs to improve the reliability and water quality of south Scottsdale wells • Operating cost increases for personnel services and benefits Increases to base fees are proposed to better reflect the recovery of fixed operating costs and adjusted to capture the demand availability designed into the system. Increases to commodity rates are proposed to generate sufficient revenues to maintain the water fund as a self- sustaining enterprise, encourage efficient water use and urge conservation. Within the commodity rates, no change is proposed for the first tier of residential rates, however increased commodity rates are proposed for tiers two through five and the volume thresholds for tiers three through five are reduced. Similarly with the commercial commodity rates, no change is proposed for the first tier, however increased commodity rates are proposed for tiers two through four and volume thresholds are reduced for tiers three and four. Overall, the water base fee and commodity rate changes are forecasted to generate an annual revenue increase of approximately $4.8 million or 4.2 percent, and effective November 1, 2023. Water Reclamation Fund – The Water Reclamation Fund is impacted by multiple cost factors over the five‐year planning period including: • Operating cost increases related to ongoing supply challenges and systemwide operations • Increasing cost for replacing and repairing aging infrastructure • Maintenance cost increases of system infrastructure due to increased system demand • Operating cost increases for personnel services and benefits. Increases to base fees are proposed to better reflect the recovery of fixed operating costs and adjusted to capture the demand availability designed into the system. Adjustments to volumetric rates are proposed to generate sufficient revenues to maintain the Sewer Fund as a self- sustaining enterprise. Overall, the base fee and volumetric rate changes are forecasted to generate an annual revenue increase of approximately $2.7 million or 5.8 percent, and effective July 13, 2023. Solid Waste Fund – The Solid Waste Fund accounts for the transactions related to the city’s commercial and residential refuse, recycling, brush, and bulk collections business activities. To maintain the revenue requirements of the Solid Waste Fund, modifications to the residential and commercial solid waste rates were implemented effective July 1, 2023 and are expected to generate approximately $2.5 million in additional revenue. Revenue requirements for the Solid Waste Fund for FY 2023/24 were primarily impacted by inflationary effects, landfill and transfer disposal costs, and recycling market volatility and resulting costs. 33 Table of Contents OVERVIEW | Executive Summary Total Solid Waste Fund sources are expected to be about $33.2 million, annual uses are expected to be $35.1 million, and ending fund balance is projected to be $8.0 million by June 30, 2024. Aviation Fund – The Aviation Fund accounts for the transactions related to the city’s aviation business activity at the Scottsdale Airport. Total Aviation Fund sources are expected to be about $9.7 million, annual uses are expected to be $6.1 million, and ending fund balance is projected to be $14.0 million by June 30, 2024. INTERNAL SERVICE FUNDS Internal Service Funds account for services and equipment provided to all city divisions by centralized functions. There are four Internal Service Funds – Fleet Management, PC Replacement, Risk Management and Healthcare Self Insurance. The Fleet Management Fund accounts for the costs of operating, maintaining, and acquiring all of the city’s vehicles, equipment, and other rolling stock. User divisions are assessed maintenance and operation costs ($9.3 million), acquisition costs ($14.3 million), and fuel costs ($6.4 million). Fleet Management establishes, collects, and manages funds to provide acquisition and/or replacement of approved fleet assets based on life cycle cost analysis performed on each equipment class. Fleet Management, in cooperation with the corresponding division, calculates an annual rate for each individual asset based on condition, suitability for service, the state of the current economy, the repair history, the actual utilization rate of each asset and other applicable factors. The fund balance of about $9.5 million estimated on June 30, 2024, represents funds previously collected for maintenance, operations and vehicle/equipment acquisitions that will be expended in future years. The PC Replacement Fund accounts for the uses associated with purchasing computers, monitors and printers. Acquisition of computers, monitors and printers is charged to the city divisions as an internal operating charge based on the quantity and type of hardware used. For FY 2023/24, user divisions are assessed estimated costs of $0.9 million, leaving an estimated ending fund balance of $1.6 million on June 30, 2024. The Risk Management Fund accounts for the activity related to the city’s property, liability, and workers compensation programs. User divisions are assessed estimated costs of $16.5 million. The estimated ending fund balance on June 30, 2024, of about $28.5 million is within the actuarial estimate of the reserves required to ensure the long-term sustainability of the fund and complies with the governing body’s (Loss Trust Fund Board) requirement to maintain a 75 percent confidence level in the actuarial assessment. The Healthcare Self Insurance Fund accounts for the activity related to employee healthcare programs (medical and dental). The estimated $39.2 million in healthcare costs is shared by the city, its employees and public safety disabled retirees. For FY 2023/24, there was a $0.9 million increase in uses compared to the FY 2022/23 adopted budget due to rising healthcare costs. The estimated ending fund balance on June 30, 2024 of $19.8 million includes: 1) a reserve for large claims beyond what was anticipated and for incurred but not reported claims; 2) an operating contingency used only for unforeseen emergencies; 3) a premium stabilization reserve to ensure revenue from premiums exceed medical and dental claims and administrative expenses paid by the healthcare plan; and 4) an undesignated, unreserved fund balance which accounts for any remaining funds after the designation of all other reserves/uses. Under prudent fiscal management practices, the undesignated, unreserved fund balance should most appropriately be used for one-time uses, not to fund new or to expand programs with ongoing operating expenses. GRANTS AND SPECIAL DISTRICTS FUNDS Each year the city receives Grant Funds from a variety of federal, state, regional and local agencies. Within the $23.8 million total grants are three larger grants – Housing Choice Voucher Program (previously Section 8 Housing Grant) at $7.0 million, the Home Grant at $2.1 million, and the Community Development Block Grant (CDBG) at $1.7 million (plus $0.7 million for the Rehab Revolving Loan). In addition to numerous identified smaller grants, the city includes $8.1 million in the grant budget for anticipated and/or unidentified future grants. This gives the City Council the budget authority to accept and spend grant funds that are not specifically known at the time the budget is adopted. This practice also allows the city to comply with state budget laws regarding annual expenditure limits. The ending fund balance of the individual grants is carried forward to future periods, re-budgeted, and is available to be spent solely for the intended purposes. A Special Districts Fund is used to account for the proceeds received from property owners in the city’s 355 streetlight districts. The intention is that only the amount needed to provide the service is assessed to the customer. Sources are estimated at $0.5 million 34 Table of Contents OVERVIEW | Executive Summary and uses are estimated at $0.6 million for FY 2023/24. If an ending fund balance of the Special Districts Fund exists, it is carried forward to future periods and is available to be re-budgeted but must be spent solely for the intended purposes. CAPITAL IMPROVEMENT PLAN A separate, key component of the city’s annual financial plan is the five-year Capital Improvement Plan (CIP) for infrastructure and public facilities – including roads, water and water reclamation improvements, parks, buildings and information technology. Projects listed in the capital budget are funded by a combination of funding sources and typically take multiple years to complete. Some of the funding sources include the city’s transportation sales tax; voter approved general obligation bonds (including Bond 2019), user fees, grants, Proposition 400 Regional Transportation Sales Tax, voter-approved Preservation Sales Tax, development impact fees and General Fund transfers. The city established a fund for each funding source to track the diverse resources used to pay the acquisition or construction of major capital projects. Below is a summary of the $1.4 billion capital budget highlights by program, along with some notable examples in each capital program area: Community Facilities ($144.8 million) – focuses on providing library improvements, parks, park improvements, multiuse paths, neighborhood enhancements, youth sports lighting, aquatic centers, library facilities and senior centers. Approximately 10.6 percent of the CIP addresses the needs of this program. Significant Community Facilities projects include the WestWorld Tent Refurbishment; Pinnacle Peak Trail Enhancements; as well as the continuation and initiation of various Bond 2019 program projects. Some examples are the 42 - Add a Dog Park to Thompson Peak Park; 22 – Build New Swimming Pools and Replace Building at Cactus Pool; and 23 – Repair Lakes and Irrigation at Vista del Camino Park in the Indian Bend Wash. Preservation ($38.1 million) – addresses the goal of preserving the character and environment of Scottsdale. This goal is met by land acquisition activities for the Scottsdale McDowell Sonoran Preserve for maintaining scenic views, preserving native plants and wildlife, and providing public access to the McDowell Mountains and Sonoran Desert. Approximately 2.8 percent of the CIP addresses this program. Significant preserve projects include the restoration of habitat, invasive plant, wildland fire prevention and safety improvements. Drainage and Flood Control ($71.0 million) – addresses flood plain mapping, meeting regulatory requirements, and identifying and correcting hazards to reduce future flood damage potential. This is accomplished using detention basins, culvert and channel projects, and a program of neighborhood drainage improvements. Approximately 5.2 percent of the CIP addresses the drainage and flood control needs of the city. Major Drainage and Flood Control projects include commencement of construction of the Rawhide Wash project in conjunction with the Maricopa County Flood Control District and the City of Phoenix; and the reduction in the size of the Reata Wash Floodplain. Public Safety ($100.6 million) – addresses the construction, acquisition, and purchase of capital assets for the Police and Fire Departments, such as fire and police stations, training facilities and automation systems related to fire and police operations. Approximately 7.3 percent of the CIP addresses the public safety needs of the city. The Public Safety budget includes key projects such as the recurring purchase of Police and Fire Real Replacement; upgrades to Security Cameras and Access Control; and various Bond 2019 program projects. Some examples are the 38-Build a New Fire Department Training Facility; 26 - Replace Deteriorating Vehicle Training Track at the Police and Fire Training Facility; and the 27 - Modernize and Expand the Police and Fire Training Facility. Service Facilities ($137.0 million) – addresses the goal of coordinating land use and infrastructure planning. These programs achieve this goal through the renovation of current facilities and technology necessary for the efficient and effective operations of the city. Approximately 10.0 percent of the CIP addresses this program. Service Facilities projects include Facilities Upgrade and Replacement Program; Network and Server Infrastructure Replacement Program; an Information Technology Security Program; an Enterprise Resource Planning System; modernization of the City Hall Kiva; Continuous Fleet Replacement; and the continuation of various Bond 2019 program projects. Some examples are the 63-Build Parking Structures in Old Town Scottsdale and solar system installation and upgrade projects. Transportation ($427.7 million) – addresses multi-modal transportation needs. Approximately 31.2 percent of the CIP addresses the transportation needs of the city. Significant Transportation projects include various pedestrian improvements; the construction of Pima Road: Las Piedras to Stagecoach Pass; Rehabilitate Runway 03/21 Pavement - Design/Construct; the construction of Hayden 35 Table of Contents OVERVIEW | Executive Summary Road / Miller Road: Pinnacle Peak Road to Happy Valley Road; Arizona State Route 101 Traffic Interchanges; and pavement overlay improvements. Water Management ($449.8 million) – focuses on the capital needs required to deliver safe, reliable water and to provide water reclamation services. This program also addresses the requirement to achieve federal and state regulations. Approximately 32.9 percent of the CIP addresses the water and water reclamation needs of the city. Significant projects include the construction of water transmission lines along Rio Verde Drive, deep well recharge and recovery projects, as well the design and construction of multiple other projects to keep water treatment facilities functioning properly. The five-year CIP uses conservative financial forecasts and reflects only those high priority projects expected to be started and often completed during the next five years. This approach helps the city manage operating costs for new facilities and avoids raising expectations for projects that are not well defined. The budget continues the practice of leveraging one-time elastic revenue from the General Fund (e.g., construction sales tax and development fees) to help pay for capital projects. The municipal bond rating agencies view this as a sound fiscal practice. In FY 2023/24, the budget assumes the General Fund will transfer a total of $68.5 million to the CIP. CONCLUSION The goal of this summary is to provide the reader with the key highlights most likely of interest to readers. For readers requiring greater levels of detail and information, they are encouraged to review the rest of Volume One (Budget Summary), Volume Two (Division Operating Budget), and Volume Three (Capital Improvement Plan). 36 Table of Contents City Manager 3939 N. Drinkwater Blvd. Scottsdale, AZ 85251 PHONE FAX WEB 480-312-2800 480-312-9055 www.ScottsdaleAZ.gov July 1, 2023 Fiscal Year 2023/242 Final Budget Transmittal Honorable Mayor and City Council: Scottsdale’s Fiscal Year 2023/24 Budget and supporting documents are provided here. This package of information provides the financial detail behind the city’s core services – the full range of operating and capital expenses that allow our municipal organization to deliver the outstanding quality of life that is the foundation of Scottsdale’s sterling reputation. Throughout the budget process, our attention remained squarely focused on creating a responsible and balanced financial plan that accounts for the priorities of the next 12 months with an eye on future challenges. Several adjustments in the Capital Improvement Plan were made between the proposed budget release and this final budget, most notably: • Two new projects approved by City Council March 21 – Pima Road Sound Wall ($6.0 million) and Railroad Park Ramada ($300,000) – were added. • Removed additional funding not necessary for two Bond 2019 projects – Install Parasol Solar Shade Structure at City Hall Parking Lot ($1.2 million) and Install Solar Systems at Civic Center Campus ($900,000). • Removed additional funding Build Roadway and Pedestrian Improvements along 2nd Street from Drinkwater Boulevard to Goldwater Boulevard ($14.0 million) per Council direction received April 13. • Two capital projects funded by the Tourism Development Fund, the WestWorld Tent Refurbishment ($3.5 million) and WestWorld Polo Field Lighting for Soccer Fields ($900,000), were moved forward from FY 2024/25 to this fiscal year in an effort to complete them sooner. 37 Table of Contents • $2.1 million for the Downtown Main Street Streetscape & Pedestrian Improvements project was moved back from this fiscal year to FY 2024/25 so that concerns about parking can be addressed prior to commencing the streetscape project (General Fund). • $1.4 million for the Energy Performance Project (Phase II) was moved back from this fiscal year to FY 2024/25 to align with delays caused by procurement issues (General Fund). A full summary of the key priorities and programs funded in Fiscal Year 2023/24 Budget is provided in the “Proposed Budget Transmittal” that follows this cover letter. With these financial tools in hand, your leadership team and city staff look forward once again to providing Simply Better Service for a World-Class Community in Fiscal Year 2023/24. Sincerely, Jim Thompson City Manager 38 Table of Contents ORDINANCE NO. 4602 AN ORDINANCE OF THE COUNCIL OF THE CITY OF SCOTTSDALE, MARICOPA COUNTY, ARIZONA, FlNALLY DETERMINING AND ADOPTING ESTIMATES OF PROPOSED EXPENDITURES BY THE CITY OF SCOTTSDALE FOR THE FISCAL YEAR BEGINNING JULY 1, 2023, AND ENDING JUNE 30, 2024, AND DECLARING THAT SUCH SHALL CONSTITUTE THE BUDGET FOR THE CITY OF SCOTTSDALE; RECOGNIZING CONDITIONS ON TRANSFERS OF BUDGETED MONIES; ADOPTING A ONE-TIME WAIVER OF THE $600,000 PER COMMITMENT RESTRICTION OF FINANCIAL POLICY 10.02 FOR FIVE PROJECTS; ADOPTING THE FINAL FY 2023/2024 CLASSIFICATION PLAN AND JOB CLASSIFICATION PAY TABLE; AND AUTHORIZING OR APPROVING, AS APPLICABLE, CERTAIN SALARY ADJUSTMENTS INCLUDED IN THE FINAL BUDGET FOR CITY EMPLOYEES AND CHARTER OFFICERS AND SETTING THE SALARIES OF THE PRESIDING JUDGE AND ASSOCIATE JUDGES. WHEREAS, in accordance with the provisions of Title 42, Chapter 17 of the Arizona Revised Statutes, and the Scottsdale City Charter, the City Council did, on May 16, 2023, make a budget estimate of the different amounts required to meet the public expenses for the fiscal year beginning July 1, 2023, and ending June 30, 2024 ("Fiscal Year 2023/2024"), an estimate of receipts from sources other than direct taxation, and the amount to be raised by taxation upon real and personal property within the City of Scottsdale, Arizona; WHEREAS, following publication of notice as required by law, the City Council held a public hearing on June 13, 2023, at which any taxpayer could appear and be heard in favor of or against any proposed expenditure or property tax levy; WHEREAS, following the public hearing, the City Council convened in a special meeting for purposes of finally determining and adopting the estimates of proposed expenditures, which estimates, when adopted, would constitute the budget of the City of Scottsdale for Fiscal Year 2023/2024; WHEREAS, publication has been duly made, as required by law, of said budget estimates, together with a notice that the City Council will meet on June 27, 2023 for the purpose of assessing the primary and secondary property tax levies; WHEREAS, the sums to be raised by taxation, as specified therein, do not, in the aggregate, exceed that amount for primary property taxes as computed in A.RS. § 42-17051; WHEREAS, City Council-adopted Financial Policy 10.02 (as adopted through Ordinance No. 4534) sets forth the allocation of City bed tax revenues as prescribed by state law, City elections, and City ordinance and, as relevant to this Resolution, limits the use of the balance of remaining bed tax revenues to one-time commitments not to exceed $600,000 per commitment Ordinance No. 4602 Page 1 of 3 39 Table of Contents unless otherwise approved by City Council for tourism-related operating expenses and capital projects; WHEREAS, City staff and the Tourism Development Commission recommend that for five tourism-related capital projects, the City Council approve a one-time waiver of the maximum $600,000 per commitment restriction in Financial Policy 10.02; WHEREAS, in accordance with Scottsdale Revised Code section 14-22, the City Council must annually adopt the job classification plan, including a listing of official titles with the authorized number of positions, salary range, and a breakdown of titles and numbers of positions by section; and now, therefore follows: BE IT ORDAINED by the Council of the City of Scottsdale, Maricopa County, Arizona, as Section 1. Pursuant to the laws of the State of Arizona and the Scottsdale City Charter, the City Council hereby adopts Schedules A through G, as further described below, attached hereto as Exhibit 1 and incorporated herein by this reference in their entirety, as the Final Budget of the City of Scottsdale Fiscal Year 2023/2024: Schedule A, Summary Schedule of Estimated Revenues and Expenditures/Expenses Fiscal Year 2023/2024 Schedule B, Summary of Property Tax Levy and Property Tax Rate Information Fiscal Year 2023/2024 Schedule C, Summary by Fund of Revenues Other than Property Taxes Fiscal Year 2023/2024 Schedule D, Summary by Fund Type of Other Financing Sources/(Uses) and lnterfund Transfers Fiscal Year 2023/2024 Schedule E, Summary by Division of Expenditures/Expenses Within Each Fund Type Fiscal Year 2023/2024 Schedule F, Summary by Division of Expenditures/Expenses Fiscal Year 2023/2024 Schedule G, Full-Time Empioyees and Personnel Compensation Fiscal Year 2023/2024 Section 2. Upon the recommendation of the City Manager, and with the approval of the City Council, expenditures may be made for the budget from contingencies and reserves. Section 3. The City Council expressly authorizes the City Manager, at any time, to transfer funds from any unencumbered macro level appropriation balance stated for a specific purpose to a division and/or fund in conformity with that purpose. Section 4. Resources from any fund may be used to meet the adopted budget, except funds specifically restricted by Federal or State law or by City ordinance or resolution. Section 5. The City Council, subject to the limitation in Section 4 and to the extent allowable by law, expressly authorizes the City Manager, at any time, to transfer grant/match Ordinance No. 4602 Page 2 of 3 40 Table of Contents contingency funds to airport Capital Improvement Plan projects as may become necessary or desirable during the fiscal year. Section 6. The City Council hereby approves a one-time waiver of the maximum $600,000 per commitment restriction in Financial Policy 10.02 for each of the following tourism-related capital projects (including operating expenses) that otherwise comply with such Financial Policy, up to the following amounts: Art Wall on Arizona State Route 101 ($1.0 million) WestWorld Polo Field Lighting ($1.3 million) Scottsdale Stadium - First Base Event Plaza ($1.5 million) Scottsdale Stadium - Amenities and Access for Day Park in Left Field Berm ($1.9 million) e. WestWorld Tent Refurbishment ($3.5 million) a. b. c. d. Section 7. Pursuant to Sections 14-20 through 14-24 of the Scottsdale Revised Code, the City Council hereby adopts the Final FY 2023/2024 City Classification Plan and Job Classification Pay Table, which are on file with, and available for review at, the Office of the City Clerk. Section 8. Further, all to become effective July 1, 2023, the City Council hereby (i) authorizes a five percent step program for sworn Police personnel, a two percent salary market adjustment for all job classifications except as specified in this section, and up to five percent salary merit increase for all eligible City employees based on performance, as reflected in the Fiscal Year 2023/2024 Final Budget and the Final FY 2023/2024 Job Classification Plan and Pay Table, (ii) pursuant to Section 9-6 of the Scottsdale Revised Code, sets the salaries for the Presiding City Judge and the Associate Judges to increase their current salaries as follows: a two percent salary market adjustment and an additional salary increase up to five percent but not to exceed the salary range for the position, and (iii) approves a two percent salary market adjustment for all other Charter Officers. PASSED AND ADOPTED by the Council of the City of Scottsdale, Maricopa County, Arizona, this 13th day of June, 2023. CITY OF SCOTTSDALE, an Arizona mun ipal corporati ATTEST: � &� � �Ben Lane, Citycierk !\o/l1rl-n APPROVED AS TO FORM: '1/vm U!.d Q g_ Sherry R. Scott, City Attorney By: Kimberly Campbell, Senior Assistant City Attorney Ordinance No. 4602 Page 3 of 3 41 Table of Contents CITY OF SCOTTSDALE Summary Schedule of Estimated Revenues and Expenditures/Expenses Fiscal Year 2023/2024 Schedule A FUNDS Fiscal Year SCH Special Revenue Fund General Fund Debt Service Fund Capital Project Funds Grants & Special Districts Funds Internal Enterprise Funds Service Funds Total All Funds 2023 Adopted/Adjusted Budgeted Expenditures/Expenses* E 1 $479,024,087 $72,550,409 $95,646,873 $1,121,620,572 $37,437,058 $259,657,518 $46,051,765 $2,111,988,282 2023 Actual Expenditures/Expenses** E 2 $333,039,605 $60,929,341 $87,222,000 $1,066,898,613 $31,820,188 $169,397,924 $9,882,962 $1,759,190,633 2024 Fund Balance/Net Position at July 1 3 $242,156,388 $188,143,640 $8,668,474 $369,638,669 $39,980 $97,884,834 $57,804,437 $964,336,422 2024 Primary Property Tax Levy B 4 $37,096,462 $0 $0 $0 $0 $0 $2,201,944 $39,298,406 2024 Secondary Property Tax Levy B 5 $0 $0 $35,591,731 $0 $0 $0 $0 $35,591,731 2024 Estimated Revenues Other than Property Taxes C 6 $381,769,223 $168,560,659 $0 $1,150,878,158 $24,333,626 $244,270,943 $17,927,379 $1,987,739,988 2024 Other Financing Sources D 7 $0 $0 $0 $0 $0 $0 $0 $0 2024 Other Financing (Uses) D 8 $0 $0 $0 $0 $0 $0 $0 $0 2024 Interfund Transfers In D 9 $17,152,136 $63,689 $54,102,524 $182,943,979 $0 $8,318,156 $170,038 $262,750,522 2024 Interfund Transfers (Out) D 10 $81,017,973 $99,186,078 $0 $5,763,028 $31,450 $68,086,324 $8,665,669 $262,750,522 2024 Line:11: Reduction for Fund Balance Reserved for Future Budget Year Expenditures Maintained for Future Debt Retirement 12 $661,022,073 $356,704,299 $44,260,205 $1,520,516,827 $24,373,606 $342,155,777 $77,933,760 $3,026,966,547 13 $582,137,346 $82,166,664 $98,427,729 $1,420,651,744 $24,342,156 $274,537,783 $51,007,139 $2,533,270,561 Maintained for Future Capital Projects 11 Maintained for Future Financial Stability 2024 Total Financial Resources Available *** 2024 Budgeted Expenditures/Expenses E Expenditure Limitation Comparison 1. Budgeted expenditures/expenses 2. Add/subtract : estimated net reconciling items 3. Budgeted expenditures/expenses adjusted for reconciling items 4. Less: estimated exclusions 5. Amount subject to the expenditure limitation 6. EEC expenditure limitation *Includes expenditure adjustments approved in FY 2022/2023 from Schedule E. **Incudes actual amounts as of the date the final budget was prepared, adjusted for estimated activity for the remainder of the fiscal year. ***Updated to capture correct summation of totals above. 42 2022/2023 2023/2024 $2,111,988,282 $2,533,270,561 - - 2,111,988,282 2,533,270,561 (1,622,259,688) (1,951,267,847) 489,728,594 582,002,714 $542,507,696 $585,825,862 Table of Contents 1. 2. 3. 4. CITY OF SCOTTSDALE Summary of Property Tax Levy and Property Tax Rate Information Fiscal Year 2023/2024 Schedule B Fiscal Year 2022/2023 Maximum allowable primary property tax levy. A.R.S. §42-17051(A) 36,425,125 Amount received from primary property taxation in the current year in excess of the sum of that year's maximum allowable primary property tax levy. A.R.S. §42-17102(A)(18) 39,381,406 - Property tax levy amounts A. Primary property taxes Property tax judgment - - B. Secondary property taxes Property tax judgment 30,055,758 - 35,591,731 - C. Total property tax levy amounts 66,476,883 74,890,137 36,421,125 39,298,406 Property taxes collected* A. Primary property taxes (1) 2022/2023 levy (2) Prior years' levies (3) Total primary property taxes B. 35,943,544 547,364 36,490,908 Secondary property taxes (1) 2022/2023 levy 29,700,220 (2) Prior years' levies 452,288 (3) Total secondary property taxes C. Total property taxes collected 5. Fiscal Year 2023/2024 30,152,507 66,643,415 Property tax rates A. City tax rate (1) Primary property tax rate 0.4970 0.5150 (2) Secondary property tax rate Property tax judgement 0.4101 0.4664 (3) Total city tax rate 0.9071 0.9814 Property tax judgement B. Special assessment district tax rates Special Assessment District Tax Rates - As of the date the final budget was prepared, the city was operating 355 special assessment districts (streetlight improvement districts) for which property taxes are levied. The proposed streetlight property tax levy for fiscal year 2023/24 is $494,979. On February 14, 2023 the Scottsdale City Council formed two new streetlight improvement districts. These new districts are waiting to become official from the State of Arizona and Maricopa County and are therefore not included in the streetlight improvement districts levy. For information pertaining to special assessment districts and their tax rates/levy, please contact the City of Scottsdale City Treasurer Division. *Includes actual property taxes collected as of the date the final budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. 43 Table of Contents CITY OF SCOTTSDALE Summary by Fund of Revenues Other than Property Taxes Fiscal Year 2023/2024 Schedule C Source of Revenues Budgeted Revenues 2022/2023 Actual Revenues 2022/2023* Adopted Revenues 2023/2024 GENERAL FUND** TAXES - LOCAL AUTOMOTIVE $23,353,378 $23,353,378 $21,114,227 CONSTRUCTION $14,182,606 $14,182,606 $14,581,826 DINING/ENTERTNMNT $15,048,073 $15,048,073 $17,306,181 FOOD STORES $10,025,531 $10,025,531 $11,319,269 HOTEL/MOTEL $8,750,444 $8,750,444 $10,631,687 MAJOR DEPT STORES $12,897,888 $12,897,888 $12,813,553 MISC RETAIL STORES $38,805,675 $38,805,675 $39,984,959 OTHER ACTIVITY $20,771,393 $20,771,393 $23,500,005 RENTAL $20,626,422 $20,626,422 $25,342,507 UTILITIES $5,650,928 $5,650,928 $5,893,665 ELECTRIC & GAS FRANCHISE $8,454,833 $8,454,833 $9,106,540 CABLE TV LICENSE FEE $3,800,000 $3,800,000 $3,700,000 SALT RIVER PROJECT IN LIEU $220,000 $220,000 $200,000 STORMWATER FEE $946,580 $946,580 $960,198 $183,533,751 $183,533,751 $196,454,617 STATE SHARED SALES TAX $35,088,377 $35,088,377 $36,543,806 STATE SHARED INCOME TAX $46,439,631 $46,439,631 $65,098,126 AUTO LIEU TAX $12,282,914 $12,282,914 $12,436,288 $93,810,922 $93,810,922 $114,078,220 WESTWORLD EQUESTRIAN FACILITY FEES $5,405,782 $5,405,782 $5,929,574 INTERGOVERNMENTAL AGREEMENTS $4,327,431 $4,327,431 $4,168,669 MISCELLANEOUS $1,504,340 $1,504,340 $1,006,918 TOTAL TAXES - LOCAL STATE SHARED REVENUES TOTAL STATE SHARED REVENUES CHARGES FOR SERVICE/OTHER PROPERTY RENTAL $3,960,794 $3,960,794 $5,427,428 $15,198,347 $15,198,347 $16,532,589 BUSINESS & LIQUOR LICENSES $1,788,516 $1,788,516 $2,802,228 FIRE CHARGES FOR SERVICES $2,266,364 $2,266,364 $2,736,729 RECREATION FEES $4,720,736 $4,720,736 $5,205,367 TOTAL LICENSE PERMITS & FEES $8,775,616 $8,775,616 $10,744,324 TOTAL CHARGES FOR SERVICE/OTHER LICENSE PERMITS & FEES 44 Table of Contents Budgeted Revenues 2022/2023 Source of Revenues FINES FEES & FORFEITURES COURT FINES Actual Revenues 2022/2023* Adopted Revenues 2023/2024 $4,165,213 $4,165,213 $4,053,645 LIBRARY $19,260 $19,260 $27,204 PARKING FINES $287,409 $287,409 $263,700 PHOTO RADAR $2,590,337 $2,590,337 $2,641,329 JAIL DORMITORY $137,098 $137,098 $144,000 $7,199,317 $7,199,317 $7,129,878 $1,935,739 $1,935,739 $8,212,914 $1,935,739 $1,935,739 $8,212,914 BUILDING & RELATED PERMITS $18,089,810 $18,089,810 $20,400,907 TOTAL BUILDING PERMIT FEES & CHARGES $18,089,810 $18,089,810 $20,400,907 $6,755,168 $6,755,168 $7,796,474 TOTAL FINES FEES & FORFEITURES INTEREST EARNINGS INTEREST EARNINGS TOTAL INTEREST EARNINGS BUILDING PERMIT FEES & CHARGES INDIRECT/DIRECT COST ALLOCATIONS INDIRECT COSTS DIRECT COST ALLOCATION (FIRE) $446,810 $446,810 $419,300 TOTAL INDIRECT/DIRECT COST ALLOCATIONS $7,201,978 $7,201,978 $8,215,774 $335,745,480 $335,745,480 $381,769,223 AUTOMOTIVE $7,430,621 $7,430,621 $6,718,161 CONSTRUCTION $4,512,648 $4,512,648 $4,639,673 DINING/ENTERTNMNT $4,788,023 $4,788,023 $5,506,511 FOOD STORES $3,189,942 $3,189,942 $3,601,586 HOTEL/MOTEL $2,784,232 $2,784,232 $3,382,809 MAJOR DEPT STORES $4,103,874 $4,103,874 $4,077,037 MISC RETAIL STORES $12,347,260 $12,347,260 $12,722,486 OTHER ACTIVITY $5,845,472 $5,845,472 $6,648,668 RENTAL $6,562,953 $6,562,953 $8,063,526 UTILITIES $1,798,022 $1,798,022 $1,875,258 $428,454 $428,454 $2,234,571 $53,791,501 $53,791,501 $59,470,286 TOTAL GENERAL FUND** SPECIAL REVENUE FUNDS PRESERVATION FUNDS INTEREST EARNINGS TOTAL PRESERVATION FUNDS 45 Table of Contents Source of Revenues TRANSPORTATION FUND Budgeted Revenues 2022/2023 Actual Revenues 2022/2023* Adopted Revenues 2023/2024 AUTOMOTIVE $4,015,847 $4,015,847 $3,630,801 CONSTRUCTION $2,438,841 $2,438,841 $2,507,492 DINING/ENTERTNMNT $2,587,667 $2,587,667 $2,975,970 FOOD STORES $1,723,990 $1,723,990 $1,946,462 HOTEL/MOTEL $1,504,726 $1,504,726 $1,828,225 MAJOR DEPT STORES $2,217,921 $2,217,921 $2,203,418 MISC RETAIL STORES $6,673,024 $6,673,024 $6,875,814 OTHER ACTIVITY $3,159,160 $3,159,160 $3,593,243 RENTAL $3,546,920 $3,546,920 $4,357,899 UTILITIES $971,734 $971,734 $1,013,475 $18,648,000 $18,648,000 $18,848,335 LOCAL TRANSPORTATION ASSISTANCE FUND $640,000 $640,000 $610,000 INTERGOVERNMENTAL AGREEMENTS $90,000 $90,000 $87,800 MISCELLANEOUS $23,430 $23,430 $21,200 HIGHWAY USER TAX PROPERTY RENTAL $5,844 $5,844 $5,844 INTEREST EARNINGS $244,760 $244,760 $1,522,193 $48,491,864 $48,491,864 $52,028,171 $25,000,000 $25,000,000 $31,448,488 $25,000 $25,000 $25,000 $2,519,163 $2,519,163 $3,066,671 TOTAL TRANSPORTATION FUND TOURISM DEVELOPMENT FUND TRANSIENT OCCUPANCY TAX MISCELLANEOUS PROPERTY RENTAL INTEREST EARNINGS TOTAL TOURISM DEVELOPMENT FUND $59,080 $59,080 $504,510 $27,603,243 $27,603,243 $35,044,669 $262,000 $262,000 $262,000 SPECIAL PROGRAMS FUND ELECTRIC & GAS FRANCHISE STORMWATER FEE - CIP $5,410,100 $5,410,100 $6,721,382 WESTWORLD EQUESTRIAN FACILITY FEES $200,000 $200,000 $1,223,354 INTERGOVERNMENTAL AGREEMENTS $203,937 $203,937 $1,115,540 MISCELLANEOUS $4,343,473 $4,343,473 $4,113,088 PROPERTY RENTAL $337,717 $337,717 $365,153 CONTRIBUTIONS & DONATIONS $479,679 $479,679 $704,051 BUSINESS & LIQUOR LICENSES $50,160 $50,160 $50,160 RECREATION FEES $2,641,373 $2,641,373 $3,045,528 COURT FINES $1,814,552 $1,814,552 $1,860,508 LIBRARY $80,000 $80,000 $115,000 POLICE FEES $95,400 $95,400 $95,400 INTEREST EARNINGS $55,109 $55,109 $84,888 BUILDING & RELATED PERMITS $71,000 $71,000 $77,320 $16,044,500 $16,044,500 $19,833,372 TOTAL SPECIAL PROGRAMS FUND 46 Table of Contents Budgeted Revenues 2022/2023 Source of Revenues STADIUM FACILITY FUND Actual Revenues 2022/2023* Adopted Revenues 2023/2024 MISCELLANEOUS $275,913 $275,913 $282,066 PROPERTY RENTAL $565,420 $565,420 $1,042,848 CONTRIBUTIONS & DONATIONS $576,450 $576,450 $725,000 INTEREST EARNINGS TOTAL STADIUM FACILITY FUND TOTAL SPECIAL REVENUE FUNDS $19,362 $19,362 $134,247 $1,437,145 $1,437,145 $2,184,161 $147,368,253 $147,368,253 $168,560,659 $552,218 $552,218 $538,728 $552,218 $552,218 $538,728 $0 $0 $582,000 GRANTS & SPECIAL DISTRICTS FUNDS SPECIAL DISTRICTS FUND STREETLIGHT DISTRICTS TOTAL SPECIAL DISTRICTS FUND GRANT FUNDS MISCELLANEOUS PROPERTY RENTAL $62,674 $62,674 $64,200 CONTRIBUTIONS & DONATIONS $2,844,126 $2,844,126 $3,259,390 FEDERAL GRANTS $33,775,598 $33,775,598 $19,589,308 STATE GRANTS $262,000 $262,000 $300,000 TOTAL GRANT FUNDS $36,944,398 $36,944,398 $23,794,898 $37,496,616 $37,496,616 $24,333,626 $810,698,689 $810,698,689 $1,006,533,095 AUTOMOTIVE $2,123,034 $2,123,034 $1,919,476 CONSTRUCTION $1,289,328 $1,289,328 $1,325,620 DINING/ENTERTNMNT $1,368,007 $1,368,007 $1,573,291 FOOD STORES $911,412 $911,412 $1,029,025 HOTEL/MOTEL $795,495 $795,495 $966,518 MAJOR DEPT STORES $1,172,535 $1,172,535 $1,164,869 MISC RETAIL STORES $3,527,789 $3,527,789 $3,634,995 OTHER ACTIVITY $1,670,135 $1,670,135 $1,899,620 RENTAL $1,875,129 $1,875,129 $2,303,864 UTILITIES $513,721 $513,721 $535,787 OTHER WATER REVENUE $2,750,000 $2,750,000 $2,750,000 OTHER WATER RECLAMATION REVENUE $2,650,000 $2,650,000 $2,650,000 NON-POTABLE WATER SERVICE CHARGES $2,100,000 $2,100,000 $2,100,000 INTERGOVERNMENTAL AGREEMENTS $36,846,081 $36,846,081 $110,082,462 TOTAL GRANTS & SPECIAL DISTRICTS FUNDS CAPITAL IMPROVEMENT PROJECT FUNDS ESTIMATED UNEXPENDED PRIOR YEAR MISCELLANEOUS INTEREST EARNINGS BUILDING & RELATED PERMITS $3,930 $3,930 $1,491,000 $1,360,329 $1,360,329 $4,731,141 $65,000 $65,000 $65,000 FEDERAL GRANTS $9,764,737 $9,764,737 $4,122,395 BOND PROCEEDS $120,000,000 $120,000,000 $0 $1,001,485,351 $1,001,485,351 $1,150,878,158 TOTAL CAPITAL IMPROVEMENT PROJECT FUNDS 47 Table of Contents Budgeted Revenues 2022/2023 Source of Revenues Actual Revenues 2022/2023* Adopted Revenues 2023/2024 ENTERPRISE FUNDS AVIATION FUND JET FUEL $179,000 $179,000 $223,000 $7,918,961 $7,918,961 $9,174,872 PROPERTY RENTAL $182,624 $182,624 $188,586 INTEREST EARNINGS $31,278 $31,278 $162,396 $8,311,863 $8,311,863 $9,748,854 $339,099 $339,099 $340,527 WATER SERVICE FEES $118,576,492 $118,576,492 $123,359,867 SEWER SERVICE FEES $45,995,649 $48,337,011 $51,636,995 NON-POTABLE WATER SERVICE CHARGES $15,406,758 $15,406,758 $16,905,462 MISCELLANEOUS $1,373,916 $1,373,916 $4,432,368 PROPERTY RENTAL $209,861 $209,861 $210,188 $5,550 $5,550 $5,550 INTEREST EARNINGS $780,451 $780,451 $3,648,499 INDIRECT COSTS $921,000 $921,000 $801,903 $183,608,776 $185,950,138 $201,341,359 SOLID WASTE SERVICE CHARGES - COMMERCIAL $3,500,332 $3,500,332 $4,046,242 SOLID WASTE SERVICE CHARGES - RESIDENTIAL AIRPORT FEES TOTAL AVIATION FUND WATER & WATER RECLAMATION FUNDS STORMWATER FEE CONTRIBUTIONS & DONATIONS TOTAL WATER & WATER RECLAMATION FUNDS SOLID WASTE FUND $26,916,208 $26,916,208 $28,878,985 INTEREST EARNINGS $50,144 $50,144 $255,503 TOTAL SOLID WASTE FUND $30,466,684 $30,466,684 $33,180,730 $222,387,323 $224,728,685 $244,270,943 ($29,060,988) ($29,060,988) ($22,750,676) FUEL $5,183,460 $5,183,460 $6,351,853 MAINTENANCE & OPERATIONS $9,408,048 $9,408,048 $9,298,220 RENTAL RATES $14,469,480 $14,469,480 $14,303,617 MISCELLANEOUS $456,157 $456,157 $468,951 REIMBURSEMENTS FROM OUTSIDE SOURCES $540,225 $540,225 $556,432 $996,382 $996,382 $8,228,397 INTERNAL SERVICE OFFSETS ($750,000) ($750,000) ($850,000) PC REPLACEMENT $750,000 $750,000 $850,000 $0 $0 $0 TOTAL ENTERPRISE FUNDS INTERNAL SERVICE FUNDS FLEET MANAGEMENT FUND INTERNAL SERVICE OFFSETS TOTAL FLEET MANAGEMENT FUND PC REPLACEMENT FUND TOTAL PC REPLACEMENT FUND 48 Table of Contents Budgeted Revenues 2022/2023 Source of Revenues Actual Revenues 2022/2023* Adopted Revenues 2023/2024 SELF INSURANCE FUNDS INTERNAL SERVICE OFFSETS TOTAL SELF INSURANCE FUNDS ($44,437,569) ($44,437,569) ($46,752,224) ($44,437,569) ($44,437,569) ($46,752,224) $250,908 $250,908 $239,379 SELF INSURANCE FUNDS - HEALTH DISABLED RETIREE CONTRIBUTIONS EMPLOYEE CONTRIBUTIONS - DENTAL $778,368 $778,368 $793,935 EMPLOYEE CONTRIBUTIONS - MEDICAL $8,247,684 $8,247,684 $7,599,568 EMPLOYER CONTRIBUTION - DENTAL $981,016 $981,016 $962,436 EMPLOYER CONTRIBUTION - MEDICAL $28,619,388 $28,619,388 $29,229,111 $284,000 $284,000 $251,100 $39,161,364 $39,161,364 $39,075,529 $15,437,357 $15,437,357 $16,508,600 UNEMPLOYMENT CLAIMS $49,597 $49,597 $52,077 MISCELLANEOUS $290,000 $290,000 $290,000 MISCELLANEOUS TOTAL SELF INSURANCE FUNDS - HEALTH SELF INSURANCE FUNDS - RISK SELF INSURANCE (PROPERTY AND WORKERS COMP) REIMBURSEMENTS FROM OUTSIDE SOURCES TOTAL SELF INSURANCE FUNDS - RISK TOTAL INTERNAL SERVICE FUNDS TOTAL ALL FUNDS $575,000 $575,000 $525,000 $16,351,954 $16,351,954 $17,375,677 $12,072,131 $12,072,131 $17,927,379 $1,756,555,154 $1,758,896,516 $1,987,739,988 *Includes budgeted revenues. Actual revenues will be reflected in the city’s FY 2022/23 annual comprehensive financial report. **There are $0 voluntary contributions estimated to be received pursuant to A.R.S. § 48-242. 49 Table of Contents CITY OF SCOTTSDALE Summary by Fund Type of Other Financing Sources/(Uses) and Interfund Transfers Fiscal Year 2023/2024 Schedule D Other Financing Sources/(Uses) Adopted Interfund Transfers 2023/2024 2023/2024 Fund IN OUT $0 $17,152,136 $81,017,973 $0 $17,152,136 $81,017,973 $0 $0 $31,450 $0 $0 $31,450 GENERAL FUND GENERAL FUND TOTAL GENERAL FUND GRANTS & SPECIAL DISTRICTS FUNDS GRANT FUNDS TOTAL GRANTS & SPECIAL DISTRICTS FUNDS SPECIAL REVENUE FUNDS PRESERVATION FUNDS $0 $0 $35,354,537 SPECIAL PROGRAMS FUND $0 $63,689 $7,982,969 STADIUM FACILITY FUND $0 $0 $660,000 TOURISM DEVELOPMENT FUND $0 $0 $21,350,538 TRANSPORTATION FUND $0 $0 $33,838,034 $0 $63,689 $99,186,078 $0 $54,102,524 $0 $0 $54,102,524 $0 $0 $182,943,979 $5,763,028 $0 $182,943,979 $5,763,028 AVIATION FUND $0 $0 $498,536 SOLID WASTE FUND $0 $0 $2,777,884 $0 $8,318,156 $64,809,904 $0 $8,318,156 $68,086,324 FLEET MANAGEMENT FUND $0 $0 $8,636,120 SELF INSURANCE FUNDS - HEALTH $0 $170,038 $0 SELF INSURANCE FUNDS - RISK $0 $0 $29,549 $0 $170,038 $8,665,669 $0 $262,750,522 $262,750,522 TOTAL SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS DEBT TOTAL DEBT SERVICE FUNDS CAPITAL IMPROVEMENT PROJECT FUNDS CAPITAL IMPROVEMENT PROGRAM TOTAL CAPITAL IMPROVEMENT PROJECT FUNDS ENTERPRISE FUNDS WATER & WATER RECLAMATION FUNDS TOTAL ENTERPRISE FUNDS INTERNAL SERVICE FUNDS TOTAL INTERNAL SERVICE FUNDS TOTAL ALL FUNDS 50 Table of Contents CITY OF SCOTTSDALE Summary by Division of Expenditures/Expenses Within Each Fund Type Fiscal Year 2023/2024 Schedule E Adopted Budget Expenditures 2022/2023 Fund/Divisions Expenditure Adjustments Approved 2022/2023 Actual Expenditures 2022/2023* Adopted Budget Expenditures 2023/2024 GENERAL FUND MAYOR AND CITY COUNCIL $957,862 ($4,991) $952,871 $1,112,601 CITY ATTORNEY $8,301,331 ($19,656) $8,281,675 $8,589,399 CITY AUDITOR $1,289,532 $145,298 $1,434,830 $1,313,021 CITY CLERK $1,287,756 $902 $1,288,658 $1,103,865 CITY COURT $5,350,199 ($295,567) $5,054,632 $5,655,776 CITY MANAGER $1,966,670 $47,839 $2,014,509 $2,228,807 CITY TREASURER $11,344,952 ($515,559) $10,829,393 $12,585,220 ADMINISTRATIVE SERVICES $22,828,349 ($792,581) $22,035,768 $25,956,820 COMMUNITY AND ECONOMIC DEVELOPMENT $26,080,389 ($769,712) $25,310,677 $26,455,848 COMMUNITY SERVICES $47,472,569 ($1,856,678) $45,615,891 $50,821,650 PUBLIC SAFETY - FIRE $55,619,254 ($1,736,218) $53,883,036 $64,767,849 PUBLIC SAFETY - POLICE $127,854,029 ($2,067,216) $125,786,813 $144,301,971 PUBLIC WORKS $24,355,438 ($3,537,849) $20,817,589 $28,329,379 $0 $0 $0 $6,818,554 $431,315 $0 $431,315 $452,103 ($7,350,000) $7,681,586 $331,586 ($9,000,000) CLASS AND COMP STUDY DEBT SERVICE ESTIMATED DIVISION SAVINGS FUEL AND MAINT AND REPAIR $0 $2,435,933 $2,435,933 $0 LEAVE ACCRUAL PAYMENTS $2,250,000 ($1,751,064) $498,936 $2,813,988 MARKET $0 $130 $130 $0 PAY PROGRAM $0 $2,301,454 $2,301,454 $0 UTILITIES $0 $3,488,010 $3,488,010 $0 VACATION TRADE $1,298,293 ($1,052,394) $245,899 $1,105,014 CONTINGENCY / RESERVE APPROPRIATION $147,686,149 ($3,344,932) $0 $206,725,481 TOTAL GENERAL FUND $479,024,087 ($1,643,265) $333,039,605 $582,137,346 $479,024,087 ($1,643,265) $333,039,605 $582,137,346 $0 $5,000 $5,000 $0 TOTAL GENERAL FUND GRANTS & SPECIAL DISTRICTS FUNDS GRANT FUNDS MAYOR AND CITY COUNCIL CITY MANAGER $865,128 $40,000 $905,128 $865,128 COMMUNITY SERVICES $12,954,501 $565,503 $13,520,004 $13,206,296 PUBLIC SAFETY - FIRE $6,289,101 $972,168 $7,261,269 $560,505 PUBLIC SAFETY - POLICE $8,839,030 $716,832 $9,555,862 $1,055,111 CONTINGENCY / RESERVE APPROPRIATION $8,409,258 ($2,299,503) $0 $8,076,408 TOTAL GRANT FUNDS $37,357,018 $0 $31,247,263 $23,763,448 NON DIVISIONAL $572,925 $0 $572,925 $578,708 TOTAL SPECIAL DISTRICTS FUND $572,925 $0 $572,925 SPECIAL DISTRICTS FUND TOTAL GRANTS & SPECIAL DISTRICTS FUNDS $37,929,943 $0 $31,820,188 $578,708 $24,342,156 51 Table of Contents Adopted Budget Expenditures 2022/2023 Fund/Divisions Expenditure Adjustments Approved 2022/2023 Actual Expenditures 2022/2023* Adopted Budget Expenditures 2023/2024 SPECIAL REVENUE FUNDS SPECIAL PROGRAMS FUND MAYOR AND CITY COUNCIL $48,000 $0 $48,000 $231,000 CITY COURT $1,944,634 $0 $1,944,634 $2,065,560 COMMUNITY AND ECONOMIC DEVELOPMENT $2,982,000 $120,000 $3,102,000 $719,220 COMMUNITY SERVICES $3,396,627 ($150,000) $3,246,627 $4,389,994 PUBLIC SAFETY - FIRE $730,855 $0 $730,855 $757,094 PUBLIC SAFETY - POLICE $3,614,717 $21,792 $3,636,509 $3,942,212 PUBLIC WORKS $165,800 $0 $165,800 $165,810 DEBT SERVICE $60,733 $0 $60,733 $58,549 CONTINGENCY / RESERVE APPROPRIATION $1,500,000 $0 $0 $1,500,000 TOTAL SPECIAL PROGRAMS FUND $14,443,366 ($8,208) $12,935,158 $13,829,439 $70,015 ($279) $69,736 $0 TRANSPORTATION FUND CITY TREASURER ADMINISTRATIVE SERVICES $18,800 $0 $18,800 $18,800 COMMUNITY SERVICES $2,102,042 $26 $2,102,068 $2,255,183 PUBLIC WORKS $26,982,350 ($1,955,313) $25,027,037 $29,894,026 $0 $0 $0 $248,635 ($360,000) $267,644 ($92,356) ($360,000) CLASS AND COMP STUDY ESTIMATED DIVISION SAVINGS FUEL AND MAINT AND REPAIR $0 $901,926 $901,926 $0 LEAVE ACCRUAL PAYMENTS $170,000 ($29,454) $140,546 $209,626 MARKET $0 $256 $256 $0 PAY PROGRAM $0 $113,206 $113,206 $0 UTILITIES $0 $739,154 $739,154 $0 VACATION TRADE $45,921 ($37,166) $8,755 $39,025 CONTINGENCY / RESERVE APPROPRIATION $3,402,913 ($250,000) $0 $3,730,530 TOTAL TRANSPORTATION FUND $32,432,041 ($250,000) $29,029,128 $36,035,825 COMMUNITY SERVICES $671,130 $0 $671,130 $887,919 DEBT SERVICE $17,375 $0 $17,375 $17,375 TOTAL STADIUM FACILITY FUND $688,505 $0 $688,505 $905,294 STADIUM FACILITY FUND TOURISM DEVELOPMENT FUND COMMUNITY AND ECONOMIC DEVELOPMENT $18,275,534 $1,015 $18,276,549 $22,011,914 CLASS AND COMP STUDY $0 $0 $0 $18,205 LEAVE ACCRUAL PAYMENTS $0 $0 $0 $1,058 VACATION TRADE $1,016 ($1,015) $1 $5,046 CONTINGENCY / RESERVE APPROPRIATION $6,217,062 $0 $0 $9,359,883 TOTAL TOURISM DEVELOPMENT FUND $24,493,612 $0 $18,276,550 $31,396,106 $72,057,524 ($258,208) $60,929,341 $82,166,664 TOTAL SPECIAL REVENUE FUNDS 52 Table of Contents Adopted Budget Expenditures 2022/2023 Fund/Divisions DEBT SERVICE FUNDS Expenditure Adjustments Approved 2022/2023 Actual Expenditures 2022/2023* Adopted Budget Expenditures 2023/2024 DEBT DEBT SERVICE $87,222,000 $0 $87,222,000 $91,459,254 CONTINGENCY / RESERVE APPROPRIATION $8,424,873 $0 $0 $6,968,475 TOTAL DEBT $95,646,873 $0 $87,222,000 $98,427,729 $95,646,873 $0 $87,222,000 $98,427,729 $1,042,677 ($49,965) $992,712 $1,031,593 $8,000 $0 $8,000 $8,000 $27,319,948 ($2,342,943) $24,977,005 $29,009,258 $0 $0 $0 $277,211 TOTAL DEBT SERVICE FUNDS ENTERPRISE FUNDS SOLID WASTE FUND CITY TREASURER ADMINISTRATIVE SERVICES PUBLIC WORKS CLASS AND COMP STUDY DEBT SERVICE ESTIMATED DIVISION SAVINGS FUEL AND MAINT AND REPAIR INDIRECT/DIRECT COST ALLOCATION LEAVE ACCRUAL PAYMENTS $0 $0 $0 $430,715 ($320,000) $0 ($320,000) ($325,000) $0 $2,273,449 $2,273,449 $0 $1,399,781 $0 $1,399,781 $1,785,696 $25,760 ($13,760) $12,000 $46,880 MARKET $0 $491 $491 $0 PAY PROGRAM $0 $155,290 $155,290 $0 $0 $23,189 $23,189 $0 $47,621 ($41,487) $6,134 $43,561 UTILITIES VACATION TRADE CONTINGENCY / RESERVE APPROPRIATION $4,428,568 $0 $0 $5,342,418 TOTAL SOLID WASTE FUND $33,952,355 $4,264 $29,528,051 $37,650,332 $2,495,042 ($105,703) $2,389,339 $2,605,385 $489,531 ($777) $488,754 $729,338 $92,143,242 ($540,502) $91,602,740 $100,909,490 $0 $0 $0 $745,370 $33,012,172 $0 $33,012,172 $28,545,978 $0 $409,005 $409,005 $0 $6,174,417 $0 $6,174,417 $6,685,230 WATER & WATER RECLAMATION FUNDS CITY TREASURER ADMINISTRATIVE SERVICES WATER RESOURCES CLASS AND COMP STUDY DEBT SERVICE FUEL AND MAINT AND REPAIR INDIRECT/DIRECT COST ALLOCATION LEAVE ACCRUAL PAYMENTS $0 $0 $0 $53,232 MARKET $0 $624 $624 $0 PAY PROGRAM $0 $302,236 $302,236 $0 $133,839 ($64,883) $68,956 $70,424 CONTINGENCY / RESERVE APPROPRIATION $78,292,593 $0 $0 $82,160,525 TOTAL WATER & WATER RECLAMATION FUNDS $212,740,836 $0 $134,448,243 $222,504,972 VACATION TRADE 53 Table of Contents Adopted Budget Expenditures 2022/2023 Fund/Divisions AVIATION FUND COMMUNITY AND ECONOMIC DEVELOPMENT CLASS AND COMP STUDY DEBT SERVICE FUEL AND MAINT AND REPAIR INDIRECT/DIRECT COST ALLOCATION Expenditure Adjustments Approved 2022/2023 Actual Expenditures 2022/2023* Adopted Budget Expenditures 2023/2024 $3,145,716 ($157,088) $2,988,628 $0 $0 $0 $3,315,174 $47,878 $1,719,244 $0 $1,719,244 $1,722,244 $0 $42,838 $42,838 $0 $548,776 $0 $548,776 $546,752 LEAVE ACCRUAL PAYMENTS $0 $0 $0 $3,493 MARKET $0 $27 $27 $0 MARKET CATCH-UP $0 $458 $458 $0 PAY PROGRAM $0 $28,704 $28,704 $0 UTILITIES $0 $85,061 $85,061 $0 VACATION TRADE $7,894 $0 $7,894 $4,000 CONTINGENCY / RESERVE APPROPRIATION $7,542,697 $0 $0 $8,742,938 TOTAL AVIATION FUND $12,964,327 $0 $5,421,630 $14,382,479 $259,657,518 $4,264 $169,397,924 $274,537,783 $14,782,364 ($2,599) $14,779,765 $17,559,732 $50,000 $0 $50,000 $50,000 CLASS AND COMP STUDY $0 $0 $0 $36,268 LEAVE ACCRUAL PAYMENTS $0 $0 $0 $2,482 TOTAL ENTERPRISE FUNDS INTERNAL SERVICE FUNDS SELF INSURANCE FUNDS - RISK CITY ATTORNEY ADMINISTRATIVE SERVICES PAY PROGRAM $0 $6,373 $6,373 $0 $4,801 ($3,774) $1,027 $3,963 CONTINGENCY / RESERVE APPROPRIATION $26,526,222 $0 $0 $28,483,062 TOTAL SELF INSURANCE FUNDS - RISK $41,363,387 $0 $14,837,165 $46,135,507 $30,688,089 ($800,833) $29,887,256 $22,790,188 $0 $0 $0 $142,273 ESTIMATED DIVISION SAVINGS ($300,000) $429,010 $129,010 ($300,000) FUEL AND MAINT AND REPAIR $0 $129,769 $129,769 $0 INTERNAL SERVICE OFFSETS ($29,060,988) $0 ($29,060,988) ($22,750,676) LEAVE ACCRUAL PAYMENTS $90,000 ($74,138) $15,862 $111,959 $0 VACATION TRADE FLEET MANAGEMENT FUND PUBLIC WORKS CLASS AND COMP STUDY MARKET $0 $277 $277 PAY PROGRAM $0 $71,873 $71,873 $0 $19,094 ($5,958) $13,136 $6,256 VACATION TRADE CONTINGENCY / RESERVE APPROPRIATION $0 $0 $0 $3,000,000 $1,436,195 ($250,000) $1,186,195 $3,000,000 ADMINISTRATIVE SERVICES $730,342 $0 $730,342 $768,170 INTERNAL SERVICE OFFSETS ($750,000) $0 ($750,000) ($850,000) CONTINGENCY / RESERVE APPROPRIATION $100,000 $0 $0 $100,000 TOTAL PC REPLACEMENT FUND $80,342 $0 ($19,658) $18,170 TOTAL FLEET MANAGEMENT FUND PC REPLACEMENT FUND 54 Table of Contents Fund/Divisions SELF INSURANCE FUNDS - HEALTH ADMINISTRATIVE SERVICES Adopted Budget Expenditures 2022/2023 Expenditure Adjustments Approved 2022/2023 Actual Expenditures 2022/2023* Adopted Budget Expenditures 2023/2024 $38,316,829 ($1,472) $38,315,357 $39,220,582 CLASS AND COMP STUDY $0 $0 $0 $3,359 PAY PROGRAM $0 $1,472 $1,472 $0 CONTINGENCY / RESERVE APPROPRIATION $9,292,581 $0 $0 $9,381,745 TOTAL SELF INSURANCE FUNDS - HEALTH $47,609,410 $0 $38,316,829 $48,605,686 INTERNAL SERVICE OFFSETS ($44,437,569) $0 ($44,437,569) ($46,752,224) TOTAL SELF INSURANCE FUNDS ($44,437,569) $0 ($44,437,569) ($46,752,224) $46,051,765 ($250,000) $9,882,962 $51,007,139 SELF INSURANCE FUNDS TOTAL INTERNAL SERVICE FUNDS CAPITAL PROJECT FUNDS CAPITAL IMPROVEMENT PROGRAM CAPITAL PROJECTS $1,066,898,613 $0 $1,066,898,613 $1,368,929,785 CONTINGENCY / RESERVE APPROPRIATION $54,721,959 $0 $0 $51,721,959 TOTAL CAPITAL IMPROVEMENT PROGRAM $1,121,620,572 $0 $1,066,898,613 $1,420,651,744 $1,121,620,572 $0 $1,066,898,613 $1,420,651,744 $2,111,988,282 ($2,147,209) $1,759,190,633 $2,533,270,561 TOTAL CAPITAL PROJECT FUNDS TOTAL ALL FUNDS *Includes actual expenditures recognized on the modified accrual or accrual basis as of the date the final budget was prepared, plus estimated expenditures for the remainder of the fiscal year. 55 Table of Contents CITY OF SCOTTSDALE Summary by Division of Expenditures/Expenses Fiscal Year 2023/2024 Schedule F Adopted Budget Expenditures 2022/2023 Division/Fund MAYOR AND CITY COUNCIL GENERAL FUND GRANTS & SPECIAL DISTRICTS FUND - GRANT Expenditure Adjustments Approved 2022/2023 $957,862 ($4,991) Actual Expenditures 2022/2023* $952,871 Adopted Budget Expenditures 2023/2024 $1,112,601 $0 $5,000 $5,000 $0 $48,000 $0 $48,000 $231,000 $1,005,862 $9 $1,005,871 $1,343,601 $8,301,331 ($19,656) $8,281,675 $8,589,399 $14,782,364 ($2,599) $14,779,765 $17,559,732 $23,083,695 ($22,255) $23,061,440 $26,149,131 $1,289,532 $145,298 $1,434,830 $1,313,021 $1,289,532 $145,298 $1,434,830 $1,313,021 $1,287,756 $902 $1,288,658 $1,103,865 $1,287,756 $902 $1,288,658 $1,103,865 GENERAL FUND $5,350,199 ($295,567) $5,054,632 $5,655,776 SPECIAL REVENUE FUND - SPECIAL PROGRAMS $1,944,634 $0 $1,944,634 $2,065,560 $7,294,833 ($295,567) $6,999,266 $7,721,336 $1,966,670 $47,839 $2,014,509 $2,228,807 $865,128 $40,000 $905,128 $865,128 $2,831,798 $87,839 $2,919,637 $3,093,935 $11,344,952 ($515,559) $10,829,393 $12,585,220 $70,015 ($279) $69,736 $0 ENTERPRISE FUND - SOLID WASTE $1,042,677 ($49,965) $992,712 $1,031,593 ENTERPRISE FUND - WATER & WATER RECLAMATION $2,495,042 ($105,703) $2,389,339 $2,605,385 $14,952,686 ($671,506) $14,281,180 $16,222,198 SPECIAL REVENUE FUND - SPECIAL PROGRAMS TOTAL MAYOR AND CITY COUNCIL CITY ATTORNEY GENERAL FUND INTERNAL SERVICE FUND - SELF INSURANCE - RISK TOTAL CITY ATTORNEY CITY AUDITOR GENERAL FUND TOTAL CITY AUDITOR CITY CLERK GENERAL FUND TOTAL CITY CLERK CITY COURT TOTAL CITY COURT CITY MANAGER GENERAL FUND GRANTS & SPECIAL DISTRICTS FUND - GRANT TOTAL CITY MANAGER CITY TREASURER GENERAL FUND SPECIAL REVENUE FUND - TRANSPORTATION TOTAL CITY TREASURER ADMINISTRATIVE SERVICES GENERAL FUND $22,828,349 ($792,581) $22,035,768 $25,956,820 SPECIAL REVENUE FUND - TRANSPORTATION $18,800 $0 $18,800 $18,800 ENTERPRISE FUND - SOLID WASTE $8,000 $0 $8,000 $8,000 ENTERPRISE FUND - WATER & WATER RECLAMATION $489,531 ($777) $488,754 $729,338 INTERNAL SERVICE FUND - PC REPLACEMENT $730,342 $0 $730,342 $768,170 $38,316,829 ($1,472) $38,315,357 $39,220,582 $50,000 $0 $50,000 $50,000 $62,441,851 ($794,830) $61,647,021 $66,751,710 INTERNAL SERVICE FUND - SELF INSURANCE - HEALTH INTERNAL SERVICE FUND - SELF INSURANCE - RISK TOTAL ADMINISTRATIVE SERVICES 56 Table of Contents Division/Fund COMMUNITY AND ECONOMIC DEVELOPMENT GENERAL FUND Adopted Budget Expenditures 2022/2023 Expenditure Adjustments Approved 2022/2023 Actual Expenditures 2022/2023* $26,080,389 ($769,712) SPECIAL REVENUE FUND - SPECIAL PROGRAMS $2,982,000 $120,000 $3,102,000 $719,220 SPECIAL REVENUE FUND - TOURISM DEVELOPMENT $18,275,534 $1,015 $18,276,549 $22,011,914 ENTERPRISE FUND - AVIATION $25,310,677 Adopted Budget Expenditures 2023/2024 $26,455,848 $3,145,716 ($157,088) $2,988,628 $3,315,174 $50,483,639 ($805,785) $49,677,854 $52,502,156 GENERAL FUND $47,472,569 ($1,856,678) $45,615,891 $50,821,650 GRANTS & SPECIAL DISTRICTS FUND - GRANT $12,954,501 $565,503 $13,520,004 $13,206,296 SPECIAL REVENUE FUND - SPECIAL PROGRAMS $3,396,627 ($150,000) $3,246,627 $4,389,994 SPECIAL REVENUE FUND - STADIUM FACILITY $671,130 $0 $671,130 $887,919 TOTAL COMMUNITY AND ECONOMIC DEVELOPMENT COMMUNITY SERVICES SPECIAL REVENUE FUND - TRANSPORTATION $2,102,042 $26 $2,102,068 $2,255,183 $66,596,869 ($1,441,149) $65,155,720 $71,561,042 GENERAL FUND $55,619,254 ($1,736,218) $53,883,036 $64,767,849 GRANTS & SPECIAL DISTRICTS FUND - GRANT $6,289,101 $972,168 $7,261,269 $560,505 SPECIAL REVENUE FUND - SPECIAL PROGRAMS $730,855 $0 $730,855 $757,094 $62,639,210 ($764,050) $61,875,160 $66,085,448 TOTAL COMMUNITY SERVICES PUBLIC SAFETY - FIRE TOTAL PUBLIC SAFETY - FIRE PUBLIC SAFETY - POLICE GENERAL FUND $127,854,029 ($2,067,216) $125,786,813 $144,301,971 GRANTS & SPECIAL DISTRICTS FUND - GRANT $8,839,030 $716,832 $9,555,862 $1,055,111 SPECIAL REVENUE FUND - SPECIAL PROGRAMS $3,614,717 $21,792 $3,636,509 $3,942,212 $140,307,776 ($1,328,592) $138,979,184 $149,299,294 $28,329,379 TOTAL PUBLIC SAFETY - POLICE PUBLIC WORKS GENERAL FUND $24,355,438 ($3,537,849) $20,817,589 SPECIAL REVENUE FUND - SPECIAL PROGRAMS $165,800 $0 $165,800 $165,810 SPECIAL REVENUE FUND - TRANSPORTATION $26,982,350 ($1,955,313) $25,027,037 $29,894,026 ENTERPRISE FUND - SOLID WASTE $27,319,948 ($2,342,943) $24,977,005 $29,009,258 INTERNAL SERVICE FUND - FLEET MANAGEMENT TOTAL PUBLIC WORKS $30,688,089 ($800,833) $29,887,256 $22,790,188 $109,511,625 ($8,636,938) $100,874,687 $110,188,661 $92,143,242 ($540,502) $91,602,740 $100,909,490 $92,143,242 ($540,502) $91,602,740 $100,909,490 WATER RESOURCES ENTERPRISE FUND - WATER & WATER RECLAMATION TOTAL WATER RESOURCES 57 Table of Contents Adopted Budget Expenditures 2022/2023 Division/Fund OTHER CAPITAL PROJECTS Expenditure Adjustments Approved 2022/2023 Actual Expenditures 2022/2023* Adopted Budget Expenditures 2023/2024 $1,368,929,785 $1,066,898,613 $0 $1,066,898,613 $0 $0 $0 $8,337,753 CONTINGENCY / RESERVE APPROPRIATION $356,544,875 ($5,894,435) $0 $425,293,424 DEBT SERVICE $122,462,839 $0 $122,462,839 $122,686,218 ESTIMATED DIVISION SAVINGS ($8,330,000) $8,378,240 $48,240 ($9,985,000) FUEL AND MAINT AND REPAIR $0 $6,192,920 $6,192,920 $0 $8,122,974 $0 $8,122,974 $9,017,678 CLASS AND COMP STUDY INDIRECT/DIRECT COST ALLOCATION INTERNAL SERVICE OFFSETS ($74,248,557) $0 ($74,248,557) ($70,352,900) LEAVE ACCRUAL PAYMENTS $2,535,760 ($1,868,416) $667,344 $3,242,718 MARKET $0 $1,805 $1,805 $0 MARKET CATCH-UP $0 $458 $458 $0 NON DIVISIONAL $572,925 $0 $572,925 $578,708 PAY PROGRAM $0 $2,980,608 $2,980,608 $0 UTILITIES $0 $4,335,414 $4,335,414 $0 $1,558,479 ($1,206,677) $351,802 $1,277,289 $1,476,117,908 $12,919,917 $1,138,387,385 $1,859,025,673 $2,111,988,282 ($2,147,209) $1,759,190,633 $2,533,270,561 VACATION TRADE TOTAL OTHER TOTAL ALL FUNDS *Includes actual expenditures recognized on the modified accrual or accrual basis as of the date the final budget was prepared, plus estimated expenditures for the remainder of the fiscal year. 58 Table of Contents CITY OF SCOTTSDALE Full-Time Employees and Personnel Compensation Fiscal Year 2023/2024 Schedule G Full-Time Equivalent (FTE) 2023/2024 Fund Employee Salaries and Hourly Costs 2023/2024 Retirement Costs 2023/2024 Healthcare Costs 2023/2024 Other Benefit Costs 2023/2024 Total Adopted Personnel Compensation 2023/2024 GENERAL FUND GENERAL FUND 2,037.42 $185,902,278 $54,330,354 $23,623,901 $11,382,778 $275,239,311 2,037.42 $185,902,278 $54,330,354 $23,623,901 $11,382,778 $275,239,311 GRANT FUNDS 17.00 $1,713,686 $275,948 $215,496 $115,857 $2,320,987 TOTAL GRANTS & SPECIAL DISTRICTS FUNDS 17.00 $1,713,686 $275,948 $215,496 $115,857 $2,320,987 SPECIAL PROGRAMS FUND 58.53 $3,862,982 $739,903 $466,764 $235,348 $5,304,997 STADIUM FACILITY FUND 3.00 $203,830 $22,189 $22,884 $13,859 $262,762 TOURISM DEVELOPMENT FUND 4.69 $498,387 $54,484 $71,220 $33,126 $657,217 TRANSPORTATION FUND 92.98 $7,766,726 $843,350 $1,155,432 $519,849 $10,285,357 159.20 $12,331,925 $1,659,926 $1,716,300 $802,182 $16,510,333 AVIATION FUND 15.48 $1,541,953 $157,664 $133,896 $97,551 $1,931,064 SOLID WASTE FUND 106.40 $8,536,644 $882,696 $1,240,560 $540,984 $11,200,884 WATER & WATER RECLAMATION FUNDS 239.39 $22,211,281 $2,478,091 $2,950,028 $1,517,957 $29,157,357 361.27 $32,289,878 $3,518,451 $4,324,484 $2,156,492 $42,289,305 FLEET MANAGEMENT FUND 53.00 $4,165,265 $462,608 $654,876 $285,120 $5,567,869 SELF INSURANCE FUNDS - HEALTH 0.00 $312,204 $0 $0 $0 $312,204 SELF INSURANCE FUNDS - RISK 11.00 $1,254,938 $120,624 $140,412 $73,926 $1,589,900 64.00 $5,732,407 $583,232 $795,288 $359,046 $7,469,973 2,638.89 $237,970,174 $60,367,911 $30,675,469 $14,816,355 $343,829,909 TOTAL GENERAL FUND GRANTS & SPECIAL DISTRICTS FUNDS SPECIAL REVENUE FUNDS TOTAL SPECIAL REVENUE FUNDS ENTERPRISE FUNDS TOTAL ENTERPRISE FUNDS INTERNAL SERVICE FUNDS TOTAL INTERNAL SERVICE FUNDS TOTAL ALL FUNDS 59 Table of Contents ORDINANCE NO. 4595 AN ORDINANCE OF THE CITY OF SCOTTSDALE, MARICOPA COUNTY, ARIZONA, LEVYING UPON THE ASSESSED VALUATION OF THE PROPERTY WITHIN THE CITY OF SCOTTSDALE SUBJECT TO TAXATION, A CERTAIN SUM UPON EACH ONE HUNDRED DOLLARS ($100.00) OF ASSESSED VALUATION SUFFICIENT TO RAISE THE AMOUNT ESTIMATED TO BE REQUIRED IN THE ANNUAL BUDGET, LESS THE AMOUNT ESTIMATED TO BE RECEIVED FROM OTHER SOURCES OF REVENUE; FIXING THE PRIMARY PROPERTY TAX RATE AND SECONDARY PROPERTY TAX RATE; PROVIDING FUNDS FOR THE VARIOUS BOND REDEMPTIONS FOR THE PURPOSE OF PAYING PRINCIPAL OF AND INTEREST ON BONDED INDEBTEDNESS; AND PROVIDING FUNDS FOR GENERAL MUNICIPAL EXPENSES; ALL FOR THE FISCAL YEAR ENDING THE 30TH DAY OF JUNE, 2024. WHEREAS, by the provisions of the City Charter, an ordinance is required to set the property tax levy for the fiscal year beginning July 1, 2023, and ending June 30, 2024; WHERE, State laws requires the property tax levy to be finally adopted not later than the third Monday in August; WHEREAS, the County of Maricopa is the assessing and collecting authority for the City of Scottsdale; WHEREAS, the required Truth In Taxation hearing and public hearing was held on June 13, 2023, and the City Council made the following policy decisions relating to the primary property taxes: a. Accepted increasing the levy amount for the two percent (2%) maximum legal amount for fiscal year 2023/24; and b. Increased the levy amount to account for two million two hundred and one thousand nine hundred and forty-four dollars ($2,201,944) for tort claim payments for calendar year 2022; and now, therefore, BE IT ORDAINED by the Council of the City of Scottsdale as follows: Section 1. The foregoing recitals are incorporated as if fully set forth herein. Section 2. There is hereby levied on each one hundred and no/100 dollars ($100.00) of assessed valuation of all property, both real and personal, within the corporate limits of the City of Scottsdale, except such property as may be, by law, exempt from taxation, a primary property tax levy not to exceed the maximum levy allowed by law for the fiscal year ending June 30, 2024, Ordinance No. 4595 Page 1 of 2 60 Table of Contents and allowable tort liability claims. The total primary levy is thirty-nine million two hundred ninety­ eight thousand four hundred six dollars ($39,298,406), resulting in a tax rate of $0.5150 per one hundred and no/100 dollars ($100.00) of assessed valuation. If this exceeds the maximum levy allowed by law, the Maricopa County Board of Supervisors is hereby authorized to reduce the levy to the maximum allowable by law after providing notice to the City. Section 3. In addition to the rate set in Section 2 above, there is hereby levied on each one hundred and no/100 dollars ($100.00) of assessed valuation of all property, both real and personal, within the corporate limits of the City of Scottsdale, except such property as may be, by law, exempt from taxation, a secondary property tax rate of $0.4664 per one hundred and no/100 dollars ($100.00) of assessed valuation, which is a rate sufficient to raise the sum of thirty-five million five hundred ninety-one thousand seven hundred thirty-one dollars ($35,591,731) for the purpose of providing a bond interest and redemption fund for General Obligation debt service for the fiscal year ending June 30, 2024. Section 4. Failure by the county officials of Maricopa County, Arizona, to properly return the delinquent list, any irregularity in assessments or omission in the same, or any irregularity in any proceedings shall not invalidate such proceedings or invalidate any title conveyed by any tax deed; failure or neglect of any officer(s) to timely perform any of the assigned duties shall not invalidate any proceedings or any deed or sale pursuant thereto; the validity of the assessment or levy of taxes or of the judgment of sale by which the collection of the same may be enforced shall not affect the lien of the City of Scottsdale upon such property for the delinquent taxes unpaid thereon, and no overcharge as to part of the taxes or of costs shall invalidate any proceedings for the collection of taxes or the foreclosure; and all acts of officers de facto shall be valid as if performed by officers de jure. Section 5. The City Clerk or designee is hereby authorized and directed to transmit a certified copy of this ordinance to the Maricopa County Assessor and the Maricopa County Board of Supervisors. _$ection 6. repealed. All ordinances and parts of ordinances in conflict herewith are hereby PASSED AND ADOPTED by the Council of the City of Scottsdale,· Maricopa County, Arizona, this 27th day of June 2023. ATTEST: '-P CITY OF SCOTTSDALE, an Arizona mu �� Ben Lane, City Clerk APPROVED AS TO FORM: Lf;wnCl?fj) QQ_ Sherry R. Scott, City Attorney By: Kimberly Campbell, Senior Assistant City Attorney Ordinance No. 4595 Page 2 of 2 61 Table of Contents Fiscal Year 2023/24 Proposed Budget Transmittal Honorable Mayor and City Council: The proposed Fiscal Year 2023/24 budget is provided here for your consideration. This annual financial plan lays the foundation for serving Scottsdale in the year ahead. This balanced budget is possible due to the continuing strength of the local and state economy as the Valley comes off one of the busiest special events seasons in our history - much of that centered in Scottsdale. While revenue growth remained strong through the pandemic and this fiscal year, our proposed FY2023/24 budget anticipates a decline in local tax revenues in anticipation of an economic downturn and slowdown in consumer spending. Given the uncertainty of the economy, the proposed budget takes a cautious approach to the future. Our five-year financial forecasts anticipate revenues returning to normal historical growth trends and excess revenues collected are used as one-time revenues to address a number of needs in the proposed budget as detailed below. Expenditures in the proposed FY2023/24 budget are focused squarely on our workforce, inflationary increases impacting our core services and capital projects and funding Council and citizen priorities. Hiring and retaining skilled staff is crucial to providing quality service to our citizens and visitors. Increased competition for top quality people makes this a very competitive time across all job sectors. This budget prioritizes expenditures to hire and retain the top-quality city staff who provide service for our residents and visitors along with benefit adjustments to help Scottsdale remain an employer of choice as we seek to fill positions. The proposed budget also prioritizes funding cost inflation that impacts our services and capital projects. Capital project costs have increased as a result of materials and labor costs with the Producer Price Index Construction for Government showing inflationary increases of 19% from July 2021 to July 2022 and another 5% through February 2023. The proposed budget also includes a number of program and projects to address Council and citizen priorities. Notable programs and initiatives The budget includes money for ongoing market and performance pay adjustment programs, detailed in the Uses section below, which will help city staff face rising inflation, and help the city compete to retain and attract top-quality people. The proposed budget includes 36.52 new, General Fund funded full-time equivalent employees (FTEs) (50.00 FTEs all funds), as summarized in the FY 2023/24 Operating Expenditure Summary section of the budget document. 62 Table of Contents These new staff are critical to maintaining and improving performance in a number of priority areas including short-term rental licensing and compliance; cybersecurity; crime prevention, police crisis response, traffic enforcement and municipal security; maintenance and repair of sidewalks, paths and trails; solid waste collection; and water policy and planning. The budget fully funds a comprehensive classification and compensation study to ensure city positions are appropriately compensated based upon internal and external benchmark comparisons. A more substantial expenditure to implement pay changes identified in the study is included as well. New post-employment medical and parental leave programs are proposed as other initiatives focused on providing best practices benefits to ensure the city remains a competitive employer in the market. Investments in the community include one-time funding for public art restoration (including repainting "The Path Most Travelled" along Loop 101), to replace critical library technology infrastructure, complete the Indian School Park Master Plan, fund a comprehensive Shade and Tree Master Plan, and modernize cooling towers at city buildings to improve efficiency and save water. With $100,000 in annual funding, the proposed Scottsdale Promise program would allow all eligible Scottsdale residents to attend Scottsdale Community College for two years with Arizona resident tuition and fees fully funded. This initiative was brought forward by the City Council Subcommittee on Education. Details on these proposed expenditures and more are included in the Uses section below. Sources General Fund sources are estimated to increase by $47.3 million from the adopted FY 2022/23 budget That total projected increase comes from several different sources, including these items contributing significantly to the change: • $12.4 million from a projected increase in general fund sales tax, including $1.1 million for the portion dedicated to Public Safety. While an increase in sales tax is reflected when compared to the FY 2022/23 adopted budget, the proposed FY 2023/24 sales tax will see a decrease when compared to the FY 2022/23 forecast. The FY 2022/23 sales tax was updated from the original budget (forecast) to reflect the significant increases the city was experiencing due to inflation, stimulus money continuing to work its way through the economy, pandemic spending sprees, etc. The city expects FY 2023/24 sales tax revenues 63 Table of Contents to decrease with the anticipated economic downturn and slowdown in consumer spending and over the five-year forecast, sales tax will realign with historical growth trends. • $20.3 million from a projected increase in the city's proportionate slices of state shared income tax, sales tax, and vehicle license fees. • $1.3 million from additional primary property tax collections ($0.7 million due to the allowable 2 percent statutory adjustment and $0.6 million due to new growth). • $2.3 million from Building Permit Fees & Charges to help cover inflationary costs and department operating costs to provide an excellent customer experience. • $0.5 million from WestWorld Equestrian Facility Fees based on anticipated events and establishing a more appropriate cost recovery formula used when developing WestWorld fees. • $1.2 million due to increased revenue from TPC Scottsdale and Scottsdale Stadium usage fees. • $0.5 million due to increases in the Advanced Life Support (ALS) Ambulance Contract; increased revenue associated with third-party fire protection system inspections; special events reimbursements; and rate and fee increases for afterhours fire inspections, fire plan reviews, and CPR/First Aid classes. • $0.5 million due to increased Recreation Fees with the opening of the WestWorld Sports Complex; and rate and fee changes to aquatics, patio rentals, and tennis and volleyball court rentals. • $1.0 million due to increased indirect costs for services provided by the General Fund to enterprise operations. • $6.3 million from a projected increase in interest earnings due to higher anticipated rates of return on investments. • $1.0 million due to a Transfers In from the Tourism Development Fund to pay for the painting of the public art wall 'The Path Most Travelled' on the Arizona State Loop 101. 64 Table of Contents Uses The General Fund proposed operating budget for next fiscal year is a $44.1 million increase from the FY 2022/23 adopted budget. Scottsdale is a people-powered service provider. As such, most expenses are related to funding for our high-performance workforce and providing pay and benefit packages that allow the city to retain and recruit employees. Significant personnel expenditures included in the proposed operating budget include: • A 5.0 percent Step Program for Police sworn personnel of $0.8 million. • $4.6 million ($6.5 million all funds) for the citywide pay for performance program, through which employees may receive up to 5.0 percent salary increases based on performance (up to the maximum in their salary range). • A 2.0 percent market adjustment of $4.5 million ($5.7 million all funds). • $6.8 million for the costs anticipated in implementing a comprehensive classification and compensation study ($8.5 million all funds) • $1.1 million ($1.3 million all funds) for the vacation buyback program for eligible employees. • $3.7 million ($4.4 million all funds) for retirement cost increases. • $0.8 million ($1.1 million all funds) for health and dental cost increases. • $10.0 million in additional public safety retirement contributions to paydown the unfunded liability. While high quality staff are the engine that drives our organization, the proposed General Fund budget also includes money for these priority projects and programs across the city's operating and administrative departments: City Manager: • $0.1 million to implement the Scottsdale Promise Program, which is a commitment from the city to its residents to allow all eligible Scottsdale residents to attend Scottsdale Community College for two years with Arizona resident tuition and fees fully funded. Administrative Services: • $0.3 million for Information Technology contract increases. • $0.2 million of one-time funding to complete a comprehensive classification and compensation study. • $0.2 million of one-time funding to reconfigure the Human Resources Office to accommodate staffing changes within the existing space. 65 Table of Contents Community & Economic Development: • $0.4 million of one-time funding for public art restoration. • $0.3 million for increases in banking fees related to higher credit card processing fees. (The division is exploring ways to reduce this cost such as implementing a convenience fee when developers use credit cards.) • $0.3 million of one-time funding for a comprehensive Shade and Tree Master Plan. (Implementation of the plan is included in the Capital Improvement Plan (CIP).) • $0.2 million carry-over of one-time funding to provide an in-depth, independent review, assessment, and benchmarking of Planning & Development Services' rates and fees that was budgeted in FY 2022/23 but will not be completed until FY 2023/24. • $0.1 million of one-time funding to update or draft a new Character Area Plan. • $0.1 million for a 2 percent financial participation agreement increase with Scottsdale Arts for wages to remain competitive. Community Services: • $0.4 million of one-time funding for the removal and disposal of organic waste material from WestWorld. • $0.4 million for an annual one-time contract labor request for events and custodial services at WestWorld. • $0.3 million of one-time funding to purchase equipment to maintain the WestWorld Sports Complex. • $0.3 million one-time funding to repair and replace aging portable horse stalls and material at WestWorld. • $0.2 million to increase the feed and bedding inventory at WestWorld. • $0.2 million of one-time funding to replace critical library infrastructure technology needs at Mustang and Civic Center Libraries. • $0.2 million of one-time funding to complete the Indian School Master Plan and begin the Cactus pool and Parks and Recreation master plans. • $0.1 million for equipment rentals at WestWorld to allow for faster response to equipment replacements on the weekends. • $0.1 million of one-time funding for replacing the WestWorld Equidome footing. 66 Table of Contents Public Safety- Fire: • $1.3 million of mostly one-time funding for overtime to provide backfill of 21 Firefighters while they attend paramedic training/ certification. • $0.4 million for various contract increases. • $0.3 million of one-time funding to purchase hazardous material equipment and ladder extrication equipment. • $0.3 million of one-time funding for overtime to provide backfill while sworn staff attend specialty teams training. • $0.2 million of one-time funding to contract for landscaping for fuel mitigation. • $0.1 million to reclassify seven Firefighter positions to two Fire Captains and five Fire Engineers to properly align the needs within the division and decrease the impacts of mandatory hold overs on the workforce. Public Safety - Police: • $1.0 for overtime for special events which will be reimbursed by the vendors. • $0.8 million contract increases for photo enforcement, leased vehicles, Maricopa County Jail services, and municipal security. • $0.4 million to continue a grant funded initiative for electronic citation (e-citation) and electronic collision (e-collision) platforms to increase efficiency in enforcing traffic-related violations and vehicular safety. Public Works: • $1.0 million of one-time funding to paint the public art wall 'The Path Most Travelled' on the Arizona State Loop 101. • $0.2 million to paint the exterior of selected city facilities. • $0.2 million of one-time funding to purchase 24 cooling tower controllers for the Cooling Tower Water Reduction Project. • $0.1 million to cover Facilities Management price increases for parts, equipment, materials, and contractual services due to inflation. • $0.1 million for a contract increase in maintaining the city's automatic gates inventory. • $0.1 million to contract for land surveying, mapping, and compiling GIS data. 67 Table of Contents Capital Improvement Program The proposed Capital Improvement Plan (CIP) budget for FY 2023/24 is $1,428.0 million including contingencies. The projects highlighted below address City Council priorities and critical capital infrastructure needs in a variety of areas and are supported by different funding sources. The total FY 2023/24 CIP transfer from the General Fund operating budget of $68.5 million includes funds from the Bell Road property sale as well as additional one-time funding to cover cost inflation and other capital project costs. Some notable projects proceeding next fiscal year are highlighted below. (The amounts reflected are the amounts budgeted in FY 2023/24 and not necessarily the total cost of the project.) Information Technology Security Program (FY 2023/24: $3.2 million) This project addresses gaps and deficiencies to support a comprehensive, robust Cybersecurity Program. Solutions need to be added and/or enhanced to bring the city current with cybersecurity best practice frameworks. Funding Source: General Fund Transfer Station Enhancements (FY 2023 /24: $2.3 million) This project is related to the expansion of the existing layout of the transfer station facility, including the addition of a stand-alone residential household hazardous materials facility, green waste disposal facility, and electronics storage building to be used as a drop off location. Additionally, project includes doubling the current tipping floor loading space to service new customers such as city residents and private haulers. Funding Source: Sanitation Rates McCormick-Stillman Railroad Park Roundhouse (FY 2023 /24: $3.9 million) - Funding Added for FY 2023/24 This project would build an 8,000 square foot indoor interactive multi-use facility for families and children of all ages to engage in one-of-a-kind train-themed play structure. As part of this, the existing unused and outdated "bunkhouse" would be removed. This project would include the 68 Table of Contents play structure; indoor/outdoor restrooms, party/event space, staff office space, shaded outdoor area and event lawn and plaza. Funding Sources: Contributions, Special Programs Revenue, General Fund Kiva Modernization (FY 2023/24: $1.6 million) The City Hall Kiva is a symbol of the City of Scottsdale, community involvement and civic processes. Unfortunately, the facility is in desperate need of modernization. This project will modernize the City Hall Kiva to allow for effective in-person, virtual and hybrid meetings. This modernization would include renovation and technology upgrade phases. Aspects of this project include updated technology and equipment. Funding Sources: General Fund Pima Park - Build Eight New Pickleball Courts (FY 2023/24: $2.1 million) This project would create eight new pickleball courts as well as the parking necessary to accommodate the influx of players. Pickleball is the fastest growing sport in the country, and the city has been inundated with requests to build additional pickleball courts. New courts are planned for north Scottsdale, and this project helps the city meet growing demand for more courts in south Scottsdale. Funding Source: General Fund 68th Street Sidewalk-Arizona Canal to Camelback Road (FY 2023/24: $0.5 million) Design and build a sidewalk on both sides of 68th Street from the Arizona Canal to just south of Camel back Road. The project will improve pedestrian safety and enhance the accessibility to the Old Town area for pedestrians and bikes. Funding Source: Transportation Sales Tax Pavement Overlay Program (FY 2023/24: $9.1 million) - Funding Added for FY 2023/24 The Pavement Overlay Program is an on-going project that addresses street pavement and public alley overlays and all associated improvements, which may include milling and surface treatments on existing roadways, traffic control, new pavement thickness, water valve and manhole lowering and raising, signal detection upgrades from loops to video, Americans with Disabilities Act (ADA) upgrades for concrete ramps and signal push buttons, concrete repairs to curbs and sidewalks, new striping plans, new striping and new signage for bike lanes and sidewalks. Funding Source: Transportation Sales Tax and Highway User Revenue Fun 69 Table of Contents Conclusion The Fiscal Year 2023/24 budget proposal supports the municipal organization and the community. The city's comprehensive approach to service delivery and improvement, capital investment and fiscal sustainability is evident throughout this proposal. Staff looks forward to discussing the contents of this proposal with City Council and the community over the coming months. Sincerely, Jim Thompson, City Manager 70 Table of Contents GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award PRESENTED TO City of Scottsdale Arizona For the Fiscal Year Beginning July 01, 2022 Executive Director Budget Award for Fiscal Year 2022/23 Budget The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation award to the City of Scottsdale, Arizona for its annual budget for fiscal year beginning July 1, 2022. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as a financial plan, as an operating guide, and as a communications device. This award is valid for a period of one year only. The current budget continues to conform to program requirements and will be submitted to the GFOA to determine its eligibility for another award. 71 Table of Contents Bloomberg Philanthropies’ What Works Cities recognized Scottsdale as a Gold Certified City. Scottsdale was recognized for exceptional use of data to inform policy decisions, allocate funding, improve services, evaluate program effectiveness, and engage residents. What Works Cities Certification is the international standard of excellence in well-managed, data-driven local government. Cities that achieve Certification demonstrate excellence by investing in the people, processes and policies that put data and evidence at the center of decision-making. Scottsdale was previously recognized on the What Works Cities Certification Honor Roll in 2018, receiving Silver Certification in 2019 and 2020 before being recognized with Gold Certification in 2023. Certification is good for three years. Scottsdale joins an elite group of only 19 cities worldwide that have earned Gold or Platinum levels of certification. 72 Table of Contents OVERVIEW | Budget Development Process CITY OF SCOTTSDALE’S BUDGET DEVELOPMENT PROCESS RECOMMENDED BUDGET PRACTICES The City of Scottsdale’s budget process incorporates the recommended practices from the National Advisory Council on State and Local Budgeting (NACSLB).1 The NACSLB was created to provide tools for governments to improve their budgeting processes and to promote their use. In fulfilling that role, the NACSLB set forth a framework that has provided the context for the development of a set of budget practices for state and local governments. These practices represent a cooperative effort by several organizations with diverse interests to examine and agree on key aspects of good budgeting. The NACSLB was founded by eight organizations representing elected officials, government administrators and finance professionals at both the state and local government level. The NACSLB’s work focused on long-term financial planning and encourages governments to consider the longer consequences of actions to ensure that impacts of budget decisions are understood over a multi-year planning horizon and to assess whether program and service levels can be sustained. Practices encourage the development of organizational goals, establishment of policies and plans to achieve these goals and allocation of resources through the budget process that are consistent with goals, policies and plans. There is also a focus on measuring performance to determine what has been accomplished with limited government resources. The following are excerpts of the NACSLB’s guiding principles and budget practice recommendations: BUDGET PROCESS DEFINITION The budget process consists of activities that encompass the development, implementation and evaluation of a plan for the provision of services and capital assets. A good budget process is characterized by several essential features: • • • • • Incorporates a long-term perspective Establishes linkages to broad organizational goals Focuses budget decisions on results and outcomes Involves and promotes effective communication with stakeholders Provides incentives to government management and employees These key characteristics make clear that the budget process is not simply an exercise in balancing revenues and expenditures one year at a time, but is strategic in nature, encompassing a multi-year financial and operating plan that allocates resources based on identified goals. A good budget process moves beyond the traditional concept of line-item expenditure control, to providing incentives and flexibility to managers that can lead to improved program efficiency and effectiveness. MISSION OF THE BUDGET PROCESS The mission of the budget process is to help decision-makers make informed choices about the provision of services and capital assets and to promote stakeholder participation in the process. The term stakeholder refers to anyone affected by or who has a stake in government. This term includes, but is not limited to residents, customers, elected officials, management, employees, businesses, vendors, other governments and the media. The budget process should accomplish the following: • • • • • Involve stakeholders Identify stakeholder issues and concerns Obtain stakeholder support for the overall budgeting process Achieve stakeholder acceptance of decisions related to goals, services and resource utilization Report to stakeholders on services and resource utilization and serve generally to enhance the stakeholders’ view of government The importance of the mission of the budget process cannot be overstated. Regular and frequent reporting is necessary to provide accountability and educate and inform stakeholders. Communication and involvement are essential components of every aspect of the budget process. 73 Table of Contents OVERVIEW | Budget Development Process PRINCIPLES/ELEMENTS OF THE BUDGET PROCESS The budget process consists of four broad principles that stem from the definition and mission previously described. These principles encompass many functions that spread across a governmental organization. They reflect the fact that development of a balanced budget is a political and managerial process that also has financial and technical dimensions. Each of the principles incorporates components or elements that represent achievable results. These elements help translate the guiding principles into action components. 1. Establish Broad Goals to Guide Government Decision Making • Assess community needs, priorities, challenges and opportunities • Identify opportunities and challenges for government services, capital assets and management • Develop and disseminate broad goals 2. Develop Approaches to Achieve Goals • Adopt financial policies • Develop programmatic, operating, capital policies and plans • Develop programs and services that are consistent with policies and plans • Develop management strategies 3. Develop a Budget Consistent with Approaches to Achieve Goals • Develop a process for preparing and adopting a budget • Develop and evaluate financial options • Make choices necessary to adopt a budget 4. Evaluate Performance and Make Adjustments • Monitor, measure and evaluate performance • Make adjustments, as needed The NACSLB’s work goes on to identify 59 practices to achieve the higher-level activities identified in the principles and elements of budgeting. Scottsdale’s budget process attempts to incorporate all the NACSLB’s recommended practices. BUDGET ROLES AND RESPONSIBILITIES Every Scottsdale employee plays a role in the city’s budget — whether in its formulation, preparation, implementation, administration or evaluation. Ultimately, each division director, through the city manager and the charter officers, is accountable to the City Council for the performance of program personnel in meeting the City Council’s broad goals and specific work plan objectives within allocated resource limits. The actual budget responsibilities of the employees are identified more specifically below: The program managers in city divisions are responsible for preparing an estimate of cost requirements and revenues, if applicable, for the current fiscal year, projecting the base budget requirements for the next fiscal year and developing other requests that change or revise the program so that it will be more effective, efficient, productive and economical. The city divisions have budget liaisons that coordinate the day-to-day budget management within their respective divisions along with the budget staff. The budget liaisons serve as the vital communication link between their city division and the Budget Department on matters related to their specific operating budget. Budget liaisons are responsible for revenue and expenditure forecasts, monthly expenditure and revenue variance analysis, calculating user fees, monitoring the budget, support to the Accounting Department in the Comprehensive Annual Financial Report preparation and preparing budget review materials for the city treasurer, other charter officers, division directors, city manager, City Council, media and residents. The capital improvement plan (CIP) liaisons essentially serve the same role as the budget liaisons; however, their focus is on the coordination of capital projects, multi-year capital planning and identifying capital project operating impacts with the budget staff. In some cases, the same individual serves as both the divisional budget liaison and CIP liaison. The CIP technology review team, CIP construction review team and CIP transportation review team are comprised of individuals from various city divisions. These cross-divisional teams are responsible for the initial review of all the city’s capital project requests. Their reviews are focused on ensuring that projects are scoped properly, infrastructure components are coordinated, long-term operating impacts are included, timeframes are realistic, projects are coordinated geographically, and project costs are adequate. They also 74 Table of Contents OVERVIEW | Budget Development Process consider if the request is congruent with city objectives and priorities using a set of predetermined criteria. The review group recommendations are forwarded to the capital management review committee. The capital management review committee (CMRC) is formed by division directors and key staff. They provide an organizationalwide view for collaboration and prioritization, serve as advisors for policies and technologies, balance projects against Council objectives and refine the initial prioritization of overall city goals and objectives. The committee forwards its funding recommendations to the City Council for final approval. The division directors and charter officers are responsible for reviewing historical performance, anticipating future problems and opportunities, considering alternative solutions and modifying and assembling their program data into a cohesive budget information package. Each division director and charter officer are responsible for evaluating, reviewing, justifying and prioritizing all operating and capital budget requests for their division. Only those requests that division directors and charter officers believe support the City Council’s broad goals, the city’s general plan, city manager’s work plan, administrative direction and program objectives are to be submitted to the budget department. The budget department team is comprised of the budget director, budget administrator, and senior budget analysts. The team is responsible for preparing the multi-fund short-range and long-range revenue and expenditure forecasts, coordinating with budget liaisons in calculating user fees, calculating the indirect cost rate, developing the process and related forms for preparing and monitoring the budget, coordinating the compilation of budget data, analyzing operating and capital budget requests, evaluating and summarizing budget requests from divisions and preparing budget review materials for the city treasurer, other charter officers, division directors, city manager, City Council, media and residents. The city treasurer, other city charter officers and division directors collaborate in developing programmatic, operating and capital policies and financial plans that help define how Scottsdale will achieve its long-term goals. They are responsible for reviewing the program operating budget and capital budget requests and for working with program managers to develop service recommendations that are consistent with the City Council’s broad goals, management strategies and the city’s adopted comprehensive financial policies. The city manager is responsible for reviewing the multi-year, multi-fund financial plan and submitting a balanced citywide proposed budget to the Mayor and City Council, which supports their broad goals. From December through May, the city manager holds biweekly meetings with the budget director and city treasurer to ensure staff are preparing a proposed budget that addresses the City Council’s priorities and to provide guidance on key policy issues related to the budget development. The Mayor and City Council set the direction for staff related to the forthcoming budget by establishing broad goals for the organization to serve as a basis for decision-making. The City Council reviews key aspects of the city manager’s proposed budget such as the city’s multi-year financial plan including an examination of the revenue forecast and related assumptions, employee compensation including healthcare and retirement costs, changes to rates and fees, comprehensive financial policies, debt schedules, property tax rate and the capital budget. The budget development process culminates in the spring with the Mayor and City Council holding public budget hearings. The Mayor and City Council are ultimately responsible for the review of the city manager’s proposed budget, tentative budget adoption (mid-May) and final adoption of the budget (mid-June). All City Council budget discussions are open to the public for comment and are broadcast on CityCable 11 and the city’s web page. BUDGET PHASES Needs Assessment and Financial Capacity Phase In this phase, which begins in the late summer and continues up to the final budget adoption, staff compile and update on an ongoing basis the city’s multi-fund, multi-year revenue forecast. The first year of the revenue estimates is the most critical in the process as that will ultimately define the expenditure limitations for the forthcoming budget year. The multi-year revenue perspective further refines the city’s planning for current and future period expenditures — with the goal of not adding service areas, services or staff which do not have a ‘sustainable’ funding source over the five-year planning time frame. The preliminary assumptions are used to forecast the city’s fiscal capacity and provide the financial framework within which the proposed division budget service levels, capital budget and operating impacts. Policy/Strategy Development and Prioritization Phase In the fall and winter, the City Council typically reviews citizen input, citizen board and commission feedback, financial policies, citizen survey results and the most current financial forecast. They discuss broad organizational goals, priorities, constituents’ suggestions and expectations for Scottsdale. From this, the City Council establishes broad goals and strategic directives, which are the cornerstone for budget development. These broad goals provide the overall direction for Scottsdale and serve as a basis for 75 Table of Contents OVERVIEW | Budget Development Process decision-making. The division directors and senior management staff update city financial policies, plans, programs and management strategies to define how the city will achieve the goals. It is within this framework that the city staff formulates the proposed operating and capital budgets. Budget Development and Prioritization Phase The CIP development begins in the early fall in conjunction with the city’s multi-year financial forecasts. Initial divisional capital project requests and changes to existing capital projects are reviewed by cross-divisional teams for accurate costing, congruence with city objectives and are prioritized using a set of pre-determined criteria. Financing sources are then sought for the highestranking projects. The teams involved in this process include the CIP technology review team, the CIP construction review team and the CIP transportation review team. When developing their division operating budget plans, staff closely consider the ongoing operating impacts of current and proposed capital projects. Staff also consider the City Council’s broad goals and strategic directives as they develop program objectives and work plans for the budget period. Later in the fall after the CIP development is underway, city staff update their proposed performance measurements. These are developed to assess results and ensure accountability, which enable managers and policy makers to evaluate progress towards stated goals and objectives. Staff also prepare the proposed program operating budgets at this time by using a modified zero-based budget approach. This requires that the budget be prepared solely at the existing service operating levels – no modifications are permitted at this stage of the budget development process. The divisional staff are also asked to evaluate their programs and/or positions for possible trade-offs, reductions, eliminations or service level changes to offset inflation, contractual, compensation and benefit cost increases. Under the city’s modified zero-based budget approach, any proposed changes in service levels, new programs, population/service growth, additional staff and program trade-offs resulting in service level reductions/increases must be submitted to the Budget Department in a decision package. The division’s requests include extensive analysis and justification and are reviewed by the city manager, city treasurer and budget director during the prioritization process. In the later stages of the city’s budget development process, decision packages are considered and balanced among numerous competing demands within the city’s available ongoing resources. When funding needs exceed the city’s funding limits, remedies may include the identification of new revenues, the employment of process management tools and/or formation of partnerships with other city programs or non-profit organizations. City Management Review and Modification Phase In the early winter the divisions submit their proposed operating budget requests to the Budget Department. The initial multi-faceted review focuses on ascertaining the division’s needs with the Budget Department’s budget instructions, reviewing the mathematical accuracy and logic of the divisional base budget and decision packages. The review also includes a broader assessment of whether the divisional budget proposals address the City Council’s broad goals, strategic directives and service needs while maintaining a citywide perspective ensuring the fiscal integrity of the city (not exceeding forecasted resources/limits). The city manager, division directors, city treasurer and budget staff collaborate on the development of a recommended five-year financial plan and proposed budget for each fund and then submit the plans to the City Council for review and adoption. The City Council also reviews the proposed multi-year revenue forecasts for reasonableness and the expenditure budgets for efficiencies and alignment with community needs and expectations. City Council Budget Review and Adoption Phase In the winter and spring, funding recommendations are discussed at public meetings. Staff present an overview of the proposed operating and capital budgets to the City Council and residents for consideration and further public input. The budget is also communicated to the public through televised public meetings and/or via the city’s website. The City Council holds public meetings to review key operating and capital budget policy items. The discussions focus on the city’s five-year financial plans and how the divisions’ operating and capital budgets address residents’ priorities and the City Council’s broad goals. Additionally, the City Council holds meetings to review rates and fees, financial policies and compensation, including benefits. Next, a series of required public budget hearings are held and the City Council adopts the budget and property tax levy consistent with the City Charter and state law. Per the City Charter, the City Council must have tentative adoption of the proposed budget on or before the second regular City Council meeting in May each year (Article 6, Sec. 3. Submission of Recommendations and Estimates to Council). This meeting is usually held in mid-May (Note: State law requires the City Council adopted the tentative budget on or before the third Monday in July of each fiscal year.) Tentative adoption sets the legal maximum expenditure limit (i.e., appropriation) for the coming fiscal year budget. 76 Table of Contents OVERVIEW | Budget Development Process Under the City Charter (Article 6, Sec. 5. Public Hearing and Adoption of Budget), final adoption of the budget must occur at the first regular City Council meeting in June (Note: There is no specific date set by state law for adoption of the final budget. However, for jurisdictions with a property tax, such as Scottsdale, the recommended deadline for adoption of the property tax levy is the third Monday in August. Since state law requires a period of at least 14 days between adoption of the final budget and adoption of the property tax levy, the budget should be adopted by the first Monday in August of each year). Arizona state law requires a “balanced” budget” (Title 42, Arizona Revised Statutes) and requires the City Council to annually adopt a balanced budget by purpose of public expense. State law defines that as the primary property tax levy, when added together with all other available resources, must equal expenditures. Arizona state law also requires an “expenditure limitation.” This requirement was imposed by the Arizona Constitution and approved by the voters in 1980 (Article 9, Section 20).2 Under Arizona state law, “expenditure limitation” means if an item is not budgeted (i.e., does not have an appropriation), it cannot legally be spent during the fiscal year. Therefore, the budget must include enough appropriation and contingency provisions for expenditures related to revenues (e.g., possible future grants) that cannot be accurately determined or even anticipated when the budget is adopted in June. This budgetary flexibility allows the city to comply with the Arizona state law and to proactively pursue emerging revenue sources as the budget year unfolds. Expenditures (i.e., appropriations) associated with items such as possible future grants/revenues may not be spent without the City Council’s prior approval at a public meeting. Arizona Revised Statutes (A.R.S.) only requires communities to prepare budgets for two funds — the General Fund (A.R.S. 42-17101) and the Highway User Revenue Fund (A.R.S. 28-6533) (see the Transportation Fund). In addition to these two funds, the city prepares budgets and requests legal appropriation for the following funds: Special Revenue, Debt Service, Enterprise, Internal Service, Grants, Special Districts and Capital Funds. The ordinance adopting the annual budget requires City Council authorization for expenditures from the funds, which in the aggregate constitutes the city’s total operating, capital budget and contingency/reserves for purposes of complying with the state’s balanced budget and legal maximum appropriation requirements. Implementing, Monitoring and Amending the Budget Phase In July, city staff implement the operating budget and the capital improvement plan and are accountable for budgetary control throughout the fiscal year. Sources and uses patterns are examined compared to budget plans and corrective action is taken if necessary. The budget team and divisional budget liaisons review current demographic, economic and financial trends every month which may impact the city and also discuss strategies to ensure the city’s fiscal integrity. City management and the City Council are also provided quarterly operating budget financial updates and reports disclosing actual revenue, expenditure and fund balance performance, as well as quarterly CIP budget updates. Scottsdale’s programs and services are periodically reviewed to determine if they are achieving the City Council’s broad goals, accomplishing strategic objectives and making efficient use of limited resources. Two employee values, “thoughtful innovation” and “accountable integrity,” along with city manager directed studies of several programs during the next budget year help communicate this expectation. The City Treasurer’s staff, other charter officers, division directors, and the internal audit staff all aid in the review of programs. City staff from all programs are expected to conduct self-assessments and develop cost and quality measures of efficiency and effectiveness. Internal performance measurements are developed, reviewed and reported on quarterly. Scottsdale’s culture and the employee values of “dedicated service”, and ”collaborative teamwork” stress the importance of open communication and stakeholder involvement in determining satisfaction with programs. Ongoing monitoring of the city’s financial performance is required monthly by the City Charter. Written budget to actual expenditure variance reports must be submitted monthly by all city divisions explaining any significant variances (where previous months recorded sources and uses are above or below the budget) and provide a solution for corrective action. Additionally, the divisions must be able to explain in writing to the Budget Department the projected year-end budget savings and/or fund balances. The City of Scottsdale’s operating budget is adopted at a division level and the capital improvement plan is adopted at a project level. All midyear amendments to the budget that require a budget transfer from the Contingency/Reserve Funds require the City Council’s prior approval at a public meeting. 77 Table of Contents OVERVIEW | Budget Development Process NEEDS ASSESSMENT and FINANCIAL CAPACITY August – June Involve Public and Gather Input Forecast Multi-Year Revenues Identify and Evaluate Infrastructure Needs Create Fiscal Forecasting Assumptions Develop Financial Trends Review Quarterly Financial Updates POLICY/STRATEGY DEVELOPMENT and PRIORITIZATION PROCESS September – January Establish City Council’s Broad Goals and Strategic Directives Update Financial Policies, Plans, Programs, Management Strategies Present Key Issues BUDGET DEVELOPMENT and PRIORITIZATION PROCESS PHASE September – January Capital Improvement Plan Five Year Financial Plan Operating Budget CITY MANAGEMENT REVIEW and MODIFICATION December – March Capital Improvement Plan Five Year Financial Plan Operating Budget CITY COUNCIL BUDGET REVIEW and ADOPTION April – June Present Proposed Operating Budget and Capital Improvement Plan IMPLEMENTING, MONITORING and AMENDING THE BUDGET July – June Implement Adopted Budget Monitor Citywide Financial Performance 78 Budget Process Review & Adjustment Hold Public Budget Forums and Hearings Address City Council’s Broad Goals Strategic Directives Maintain Citywide Perspective Ensure Fiscal Integrity of the City Table of Contents OVERVIEW | Budget Development Process USE OF CONTINGENCY/RESERVE FUNDS Contingency/Reserve Funds are strictly defined in the city’s financial policies adopted by the City Council annually and are used in the following instances: when additional funds are necessary to offset unexpected expenditure increases, so that service measures can be maintained; when unanticipated grants are received; and when unanticipated and/or inadequately budgeted events threaten the public health or safety. Use of Contingency/Reserve Funds is to be utilized only after all alternative budget funding sources and other options have been fully considered. All Contingency/Reserve Fund requests require a written justification and an explanation of the fiscal impact, which is reviewed and approved in writing by the city treasurer, budget director, the applicable city charter officer, division director and city manager before being presented to the City Council for consideration in a public meeting. BUDGETARY AND ACCOUNTING BASIS Scottsdale’s budget is prepared on a basis consistent with Generally Accepted Accounting Principles (GAAP). The city’s governmental funds consist of the General Fund, Special Revenue Funds, Debt Service Funds, Permanent (Grant) Funds and Capital Project Funds. Governmental fund type budgets are developed using the modified accrual basis of accounting. Under the modified accrual basis, revenues are accrued if they are earned and will be collected within the 31-days after the fiscal year-end. Principal and interest on general long-term debt is budgeted as expenditures when due, whereas other expenditures are budgeted based on the timing of the receipt of the good or service. Proprietary fund budgets – Water, Water Reclamation, Solid Waste, Aviation and Internal Service Funds – are adopted using the full accrual basis of accounting, whereby revenue projections are developed recognizing revenues earned in the period. Expenditure estimates are developed for all expenses incurred during the fiscal year. The major differences between the budget and the Annual Comprehensive Financial Report are: • • • • • • Certain revenues, expenditures and transfers are not included in the budget, but are accrued and reported in the Annual Comprehensive Financial Report. For example, increases or decreases in compensated absences, payroll accruals and changes in fair market value are not included for budget purposes, but are presented in the Annual Comprehensive Financial Report. Franchise fees charged to the Enterprise Funds are accounted for as transfers-in or transfers-out in the budget, but are recorded as revenues and expenses in the Annual Comprehensive Financial Report. Capital outlays in the Enterprise Funds are presented as expenses in the budget, but are recorded as assets along with associated depreciation expenses in the Annual Comprehensive Financial Report. Debt service principal payments in the Enterprise Funds are expenses in the budget, but reported as reduction of long-term debt liability in the Annual Comprehensive Financial Report. Certain debt service principal and interest payments are accounted for as operating expenditures in the General Fund for the budget, but are reported as debt service expenditures in the Annual Comprehensive Financial Report. For budget purposes the Risk Management Fund presents claim expenditures on a short-term basis while in the Annual Comprehensive Financial Report, the claim expenditures also include a long-term accrual for “incurred, but not reported” (IBNR) claims. All actual amounts in the budget document are shown on the budgetary basis to facilitate meaningful comparisons. Budgeted funds include the General, Special Revenue, Debt Service, Enterprise, Permanent (Grant), Internal Service, Grants and the Capital Improvement Plan. OPERATING AND CAPITAL BUDGET RELATIONSHIP The City of Scottsdale’s Budget for FY 2023/24 is comprised of three volumes: Volume One – Budget Summary includes the City Council’s mission statement and broad goals, the city manager’s transmittal letters, the signed budget adoption and property tax levy ordinances, final state forms, executive summary and adopted financial policies. Volume One also contains a budget by fund section, which includes five-year financial forecasts that cover the period FY 2023/24 through FY 2027/28. This section also provides five-year historical summaries for sources and uses by fund. Volume Two – Division Operating Budget contains descriptions of services provided by each division, staffing summaries, operating budgets by expenditure category and the applicable funding sources, current fiscal year objectives, as well as prior year 79 Table of Contents OVERVIEW | Budget Development Process achievements, significant changes and performance measures. In addition, division operating budgets and their relationship with the broad goals and the general plan are included. Volume Three - Capital Improvement Plan includes the Capital Project Budget and Five-Year Capital Improvement Plan with detailed information for each project. Capital Project Budget funding sources are matched with budgeted expenditures. Future year projected operating impacts are also included. Finally, there is an appendix which includes a list of acronyms and a glossary. Governmental accounting procedures and state law require expenditures for the five-year capital improvement plan to be budgeted at an amount sufficient to pay for an entire contract, meaning the legal authority is available and appropriated in the period in which a contract is entered by the city. Therefore, capital expenditures are presented on a budget basis reflecting the total appropriated amount as opposed to a cash flow basis, which may take several fiscal years to be paid out. For example, a 180-day construction contract entered in May of fiscal year one would have cash expenditures from May of fiscal year one through October of fiscal year two. However, the entire budget for this contract must be appropriated in fiscal year one, the year in which the contract was entered; any unspent funds at the end of fiscal year one would be carried forward and re-budgeted in fiscal year two. Funding sources for the five-year capital improvement plan are presented on a budget basis, except for cash transfers from the operating budget, which are presented on a purely cash basis. These resources are presented in the period that the cash funding will be transferred to provide continuity between the operating budget and the Capital Improvement Plan. As a result of presenting the cash transfers in on a purely cash basis, the funding sources may not equal the budgeted expenditures in each period, creating a fund balance as cash accumulates each year for planned larger capital expenditures in later fiscal years. For further information regarding capital project funding sources and uses, refer to Volume Three. FIVE-YEAR FINANCIAL PLAN The city’s five-year financial planning process used to develop the proposed budget is a year-round process. The budget process begins in the early fall with the Budget Department’s initial update of the five-year financial plan for each of the city’s major funds. Staff review the five-year financial plans for the following funds that appear in the budget – General, Transportation, Preservation, Special Programs, Tourism Development, Stadium Facility, Special Districts, Debt Service, Water and Water Reclamation, Solid Waste, Aviation, Fleet, PC Replacement, Risk Management, Healthcare Self Insurance and Capital Funds. Using the latest fiscal, operational and legislative information, staff work collaboratively with city divisions to update the forecast for the current fiscal year and to create a forecast for the coming budget year. The forecast serves as the basis for the development of the city’s proposed fiveyear financial plan. In April, the city manager provides the City Council with the updated proposed five-year financial plans for their review and consideration. Staff work with the City Council to review the underlying assumptions and reasonableness of the plans. The proposed plans include the budget for the coming year (i.e., the first year of the plan) and subsequent years of the five-year financial forecast period. This time is also used to identify future service and financial issues requiring attention during the budget planning process. The five-year financial plans provide the City Council, city management, residents and municipal bond rating agencies with the benefits of a long-term financial perspective of revenues, expenditures, cash transfers in/out, fund balances and capital financing options. They also serve as the basis to test the potential impacts of proposed policy and operational modifications and pending legislative changes all intended to avoid subjecting residents to wide or irregular fluctuations in rates/fees and service levels. Proposed future operating impacts of capital projects are also included in the forecast, which facilitates the planning, integration and timing of the capital projects into the city’s five-year financial plans. The City Council and city management use the plans to assess the impact of their proposed decisions in a long-range financial context. These decisions may include the proposed addition of new staff, new debt issuances and debt refunding, tax rate changes, the desire to create, modify or eliminate rates/fees, new or expanded services and state legislation changes. Based on the fiscal impact of these decisions, the City Council has an opportunity to modify the proposed plans. As noted above, the development and update of the five-year financial plans is a year-round process. Staff monitor the budget monthly and adjust the estimated annual revenues and expenditures based on the latest economic information, legislative changes and City Council priorities. Per the City Charter, the revenue and expenditure variances, estimated ending fund balances and the status of the current year contingency usage are reported quarterly to the City Council, city management and other stakeholders via the operating budget Financial Update and Financial Report. The CIP budget status is also shared quarterly. Staff monitor and 80 Table of Contents OVERVIEW | Budget Development Process identify changes in the financial and economic climates and considers solutions to negative trends, thereby preserving the financial health of Scottsdale. REVENUE FORECASTING The City of Scottsdale uses both qualitative and quantitative methods for forecasting revenues by blending various techniques to develop conservative and prudent revenue projections. Qualitative revenue forecasting methods used by staff to develop multi-year financial plans include consensus, judgmental and expert forecasting, while trend analysis is used as a quantitative technique. This balanced approach to revenue forecasting is aligned with the Government Finance Officers Association (GFOA) recommendation since research shows that forecasting accuracy is improved by combining qualitative and quantitative techniques. According to the GFOA, each method by itself has inherent weaknesses: qualitative methods can be too subjective at times and may be dependent on wishful thinking and selective perception on behalf of the forecasters; quantitative methods may fail to consider changing conditions inside and outside a jurisdiction and tend to discount important historical events. By combining both methods, forecasters integrate judgmental assumptions within the forecasting framework to produce more realistic revenue projections. To enhance the revenue forecasting process and gain a broader input into the planning process, the Budget Department staff work collaboratively with city divisions throughout the year to prepare the revenue estimates. This multi-disciplinary approach and continual reassessment promotes collaboration between the central Budget Department staff and the division field staff, which reduces the likelihood of miscommunications in formulating the revenue estimates. The field staff’s participation in the revenue estimate forecasts also increases their ownership and accountability for achieving the proposed plan. EXPENDITURE AND YEAR-END SAVINGS FORECASTING Each month throughout the fiscal year, the Budget Department staff works with city divisions to monitor year-to-date actual expenditures against the year-to-date approved budget and prior year actual expenditures. Each division is also required to forecast their year-end expenditures and related savings. All significant actual or forecasted variances are researched and a reason for the likely variance as well as possible ways to resolve the variance are considered by staff. Proactive management of the budget to actual/forecasted expenditures allows staff the opportunity to promptly notify city management and the City Council of potential budget concerns. 1 Recommended budget practices: A framework for improved state and local government budgeting national advisory council on state and local budgeting government finance officers association. (1999). https://gfoaorg.cdn.prismic.io/gfoaorg/e4534548-fa06-47ad-9cc8- 5f37e6e2f21e_RecommendedBudgetPractices.pdf 2 Office of the Arizona Auditor General. (2021). FAQs—Cities and Towns. Arizona Auditor General. https://www.azauditor.gov/reports-publications/citiesand-towns/faqs 81 Table of Contents OVERVIEW | Budget Calendar BUDGET PLANNING AND DEVELOPMENT FISCAL YEAR 2023/24 CALENDAR Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Strategic Planning Process Collect Citizen Input Develop Broad Goals & Strategic Directives Conduct Needs Assessment Develop Financial Trends & Forecasting Assumptions Forecast Multi-Year Revenues Update Financial Policies Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Capital Improvement Plan Budget Process Update Budget Planning Guide CIP Kick-off Division Preparation & Submittal Peer Construction & Technology Reviews Capital Management Review Committee Operating Impacts Review Proposed/Tentative/Final Budget Public Hearings Final Adoption Implement Adopted Budget Monitor Citywide Financial Performance Budget Process Review & Adjustment Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Operating Budget Process Update Budget Planning Guide Budget Liaison Update Meetings Budget Application User Training Operating Budget Kick-Off Internal Service Rates Finalized Division Budget Development Division Budget Request Submission Update Performance Measurements Line Item Analytical Review City Management Budget Review New Rates & Fees Proposed Finalize Proposed Five-Year Financial Plans City Council Review Proposed/Tentative/Final Budget Public Hearings Final Budget Adoption Implement Adopted Budget Monitor Citywide Financial Performance Budget Process Review & Adjustment 82 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance COMPREHENSIVE FINANCIAL POLICIES The City of Scottsdale’s (city) mission is to provide simply better service for a world-class community. A vital component to achieving this mission is to carefully account for public funds, to manage finances wisely, and to plan for the adequate funding of services desired by the public, including the provision and maintenance of public facilities. These Comprehensive Financial Policies (Policies) establish the standards for stewardship over the city’s financial resources and provide guidance for sound fiscal planning, budgeting, accounting, and financial reporting to support the city’s mission and financial goals. The city’s financial goals are broad and represent the financial position the city seeks to attain: • To deliver quality services in an affordable, efficient, and cost-effective basis providing full value for each tax dollar. • To maintain an adequate financial base to sustain a sufficient level of municipal services, thereby preserving the quality of life in Scottsdale. • To have the ability to withstand local and regional economic fluctuations, to adjust to changes in the service requirements of our community, and to respond to changes in Federal and State priorities and funding as they affect the city's residents and business owners. • To maintain a high bond credit rating to ensure the city’s access to the bond markets and to provide assurance to the city's taxpayers that the city government is well managed and financially sound. All divisions will participate in the responsibility of meeting policy goals and ensuring the long-term financial health of the city. Future service plans and program initiatives will be developed to reflect current policy directives, projected resources, and future service requirements. The city is in compliance with all financial policies. COUNCIL- ADOPTED FINANCIAL POLICIES These Policies are adopted by council resolution each year. By their nature, policies must change and evolve over time as the city grows and to respond to changes in law, new industry standards, or best practices. Accordingly, these Policies will be subject to annual review and recommendation for revisions, if any, will be presented to the Scottsdale City Council (council) for approval. In addition to these Policies, the city maintains internal Administrative Regulations (AR) to provide city manager directives for staff, where necessary. ARs are written orders or directives issued by the city manager intended to articulate citywide policies and procedures. These are referenced throughout these Policies, where applicable. POLICY 1 - FISCAL PLANNING AND BUDGETING Fiscal planning refers to the process of identifying resources and allocating those resources among numerous and complex competing purposes. The primary vehicle for this planning is the preparation, monitoring, and analysis of the city’s budget. The purpose of this policy is to provide guidance on the city’s budget process and development to ensure sound financial management and application of best practices in budgeting and fiscal planning. Accompanying the Policies are a set of budget governing guidance which provides direction for allocating certain annual city resources through the budget process to meet council priorities and goals. These guidelines are attached as Appendix A Budget Governing Guidance. 1.01 Budget Period. The city will budget revenues and expenditures for all funds on a fiscal year basis which begins July 1 and ends on the following June 30. 2 1.02 Budget Adoption. Pursuant to Article 3, Section and Article 6, Sections 3 and 5 of the Scottsdale City 83 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance Charter, the city manager shall submit to the council a proposed annual budget. The full council will solicit resident input and review the operating and capital budget recommendations from a division, program, and goals perspective. The council shall adopt the budget for the following fiscal year at the first regular meeting in June. 1.03 Budget Basis. The annual budget will be prepared on a basis consistent with Generally Accepted Accounting Principles (GAAP 1 ) whereby Governmental Funds (General Fund, Special Revenue Funds, Debt Service Funds, and Capital Project Funds) are budgeted on a modified accrual basis and Proprietary Funds (Enterprise Funds and Internal Service Funds) are budgeted on a full accrual basis except for the following: a) Amortized lease revenues and associated interest b) Payroll accruals and accrued compensated absences c) Change in fair value of investments d) Depreciation and amortization expenditures e) Long-term revenue and expenditure activity 1.04 Alignment with Goals and Performance Measurement. The budget will be developed in accordance with council’s established goals and priorities, the needs of the community and local, state, and federal laws. Performance management will be utilized to align council goals and organization strategic efforts. The annual budget will include department goals, objectives, and performance measures to show that intended goals and objectives are achieved in an efficient and effective manner. 1.05 Long-Range Financial Forecasts. To promote long-term strategic thinking and demonstrate the city’s ability to adapt to changes in the economy, operating requirements and capital demands, the city will prepare a balanced five-year financial forecast that will incorporate both revenue and expenditure estimates and reserve requirements for the city’s primary funds. The five-year forecast will identify revenues and expenditures that are anticipated to be sustainable over the five-year period. The five-year forecast will be updated annually and provided to executive leadership GAAP and fund types are all defined by the Governmental Accounting Standards Board (GASB) as defined by the Statements of Governmental Accounting Standards. 1 during the city’s budget process. 1.06 Balanced Budget. The budget shall be considered balanced if all sources of revenue, as estimated, are equal to, or exceed, the total of amounts proposed to be used in the operating budget for the current fiscal year, by fund. To the extent unencumbered balances from the preceding fiscal year are required to achieve a balanced budget, use of unencumbered balances from the preceding fiscal year will be only as authorized by council. The budget will not use one-time (non-recurring) sources to fund continuing (recurring) uses or use external borrowing for operational requirements. The budget will incorporate the best available estimates of revenues and expenditures. 1.07 Cost Allocation. The city shall establish an indirect cost allocation plan to determine the administrative service and other indirect staff support provided to divisions, programs, and funds. Administrative costs incurred in the General Fund to support operations of the Enterprise Funds (Water, Wastewater, Solid Waste, and Aviation) will be recovered through the indirect cost allocation plan. 1.08 Contingency. The city’s annual budget will include contingency appropriations to provide for unanticipated increases in service delivery costs and unexpected needs that may arise throughout the fiscal year. Use of contingency appropriation will require identifying a funding source and should be utilized only after all budget sources have been examined for available funds. The contingency appropriation can only be expended upon separate council approval. 1.09 Budget Control. The city shall establish appropriate management controls to monitor expenditure budgets to ensure they do not exceed authorizations. For operating budgets, this control shall be exercised at the division/fund level. For capital budgets, this control shall be at the project level. See Policy 3 Expenditure Management for further policy guidance on budget controls. 1.10 Budget Amendments. The city can amend appropriations for line items, funds, projects, or divisions if total expenditures do not exceed the final appropriation budget adopted by council. Requests for amendments within the same division, fund, and account categories (personnel services, contractual 84 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance services, commodities, and capital outlays) must be approved by the division’s executive director and the city’s budget director. Pursuant to Article 6, Section 11 of the Scottsdale City Charter, amendments requiring the transfer of contingency appropriation or the transfer of appropriation between general classification of expenditures such as between operating and capital budgets, funds, divisions, account categories, and between capital projects can be made at the direction of the city manager subject to council approval. 1.11 Budget Deficit. If a deficit is projected during the fiscal year, the city will take steps to reduce expenditures or increase revenues before considering using fund balance or reserves. The city manager may institute a cessation during the fiscal year on hiring, promotions, transfers, capital equipment purchases, and capital projects. Such action will not be taken arbitrarily or without knowledge of the council. 1.12 Unspent Appropriations. Unspent appropriations for programs and major projects may be considered for re-appropriation in the subsequent fiscal year. Such carryover of appropriation shall be included in the proposed budget to be authorized by the council. 1.13 Distinguished Budget Award. The city will prepare a budget in accordance with the Government Finance Officers Association policies and best practices established by the “Government Finance Officers Association Distinguished Budget Award” program. Staff will submit the budget document to the Government Finance Officers Association each year for review in the award program. POLICY 2 - RESERVES AND FUND BALANCE Maintaining adequate reserves is critical to ensure the city’s financial stability through economic downturns, catastrophic events, natural disasters, and other unforeseen emergencies and events. Adequate reserves are also essential in preserving the city’s high bond ratings and achieving the city’s financial goals. The purpose of this policy is to establish reserve targets and fund balance, the conditions under which reserves and fund balance may be spent, and the method by which reserves and fund balance will be restored. Reserves should only be used after all other budget sources have been examined. 2.01 General Fund Operating Reserves. The General Fund is the city’s main operating fund that pays for public safety, community services, parks, libraries, and other general city operations. The General Fund is considered to have a high level of risk due to its dependence on economically sensitive revenues. The General Fund is the main funding source when responding to city-wide emergencies and unexpected events. In consideration of these risks and other driving factors, the city will maintain an “Operating Reserve” in the General Fund of 20 percent of operating uses, excluding transfers out, to provide stability and flexibility to respond to unexpected events. The reserve is intended for unexpected events (such as a significant unexpected loss of revenues, unexpected mandates, or large-scale emergencies) whose impact is significant. Use of this reserve requires council approval and must be replenished to the required General Fund Operating Reserve policy level of 20 percent within the next two fiscal years following the fiscal year in which the funds were used. 2.02 General Fund Emergency Reserves. The city will maintain an “Emergency Reserve” in the General Fund of 5 percent of operating uses, excluding transfers out. The reserve is intended for unexpected emergencies and events where immediate action must be taken in the best interest of the city’s residents and business owners. Use of reserves must be appropriated by council action. However, the city manager may approve the use of this reserve in the event that immediate expenditure of funds is needed to protect the health, safety, and welfare of the city. When this occurs, the city manager will provide a report for council approval as soon as practical on the usage of these funds. The city will strive to restore the reserves to the required General Fund Emergency Reserve policy level of 5 percent within the next fiscal year following the fiscal year in which the funds were used. 2.03 Transportation Fund Operating Reserves. The city will maintain an “Operating Reserve” in the Transportation Fund of 10 percent of operating uses, excluding transfers out, to provide funding to deal with fluctuations in economic cycles and unexpected onetime operating requirements. Use of this reserve requires council approval and the city shall strive to restore the reserves to the required Transportation 85 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance Fund Operating Reserve policy level of 10 percent within the next two fiscal years following the fiscal year in which the funds were used. 2.04 Enterprise Fund Operating Reserves. Enterprise Funds (Water, Wastewater, Solid Waste, and Aviation) are intended to be self-supporting and not depend on the General Fund to fund operating and capital costs. The city will maintain “Operating Reserves” in its Enterprise Funds as follows to provide for emergencies, unexpected declines in revenues and other unanticipated events. Use of these reserves require council approval and the city shall strive to restore the reserves to the defined level within the next two fiscal years following the fiscal year in which the funds were used. a) Water and Wastewater Funds - 25 percent of operating uses, excluding transfers out and debt service. b) Aviation Fund - 25 percent of operating uses, excluding transfers out and debt service. c) Solid Waste Fund - 15 percent of operating uses, excluding transfers out and debt service. 2.05 Water and Wastewater Asset Replacement Reserves. The city will maintain a “Water and Wastewater Asset Replacement Reserve” equal to 2 percent of the undepreciated book value of tangible fixed assets. The reserve may be used to provide funding for the repair and maintenance of critical infrastructure. Use of this reserve requires council approval and the city shall strive to restore the reserve to the defined level within the next two fiscal years following the fiscal year in which the funds were used. Debt Service Reserves. The city will maintain 2 .0 6 “Debt Service Reserves” in the General Obligation Bond Debt Service Fund for secondary property tax supported debt of no more than 10 percent of the amount of annual principal and interest needed to service the outstanding debt. The city will maintain “Debt Service Reserves” for governmental debt supported by excise taxes, dedicated taxes, or revenues, at a minimum of 25 percent of the next fiscal year’s debt service. 2.07 Self-Insurance Reserves. The city will maintain “Self-Insurance Reserves” at a level that will adequately fund the city’s financial obligations for the payment of property, workers’ compensation, liability, and health benefit losses. A qualified actuarial firm shall be retained on an annual basis to project and develop losses to recommend appropriate reserve levels. The Loss Trust Fund Board’s target is to maintain a Risk Management reserve fund balance equivalent to the actuary’s 75 percent confidence interval of projected total outstanding claims liability. 2.08 Other Reserves and Fund Balance. The city may maintain other reserves or fund balance as deemed necessary to ensure adequate resources to cover future expenditures. POLICY 3 - EXPENDITURE MANAGEMENT Division or department management is expected to manage their expenditures wisely and to look for efficient and effective ways to deliver services— including alternative means of service delivery—to residents and businesses while meeting council goals. This policy provides guidance and standards to ensure careful management of expenditures in accordance with legal requirements and to ensure sound financial management practices and accountability for public funds. 3.01 Operating Expenditure Management. a) Budget Level Control. Operating expenditures will be controlled by an annual appropriated budget at the division/fund level. A division cannot spend more than the budget appropriated for the division or fund unless additional appropriation is approved by council through a budget transfer or amendment process. If a transfer of appropriation between expenditure categories is necessary, council approval is required. Requests for new, on-going programs made outside the budget process will be discouraged and only accepted when approved by the city manager and the related budget authority must also be approved by council. b) Transfer of Appropriation. In accordance with Article 6, Section 11 of the Scottsdale City Charter, the city manager, subject to approval of the council, may transfer any unencumbered or unrestricted appropriation balance between general classifications of expenditures within a division/department or fund or from one division/department or fund to another. c) Position Control. A system will be used to facilitate position control. The number of full-time and regular part-time employees on the payroll shall not exceed 86 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance the total number of full-time equivalents (FTEs) authorized by council through the budget process. The budget will identify the resources required to support the authorized staffing. Personnel additions outside of the budget process are discouraged and only accepted when approved by the city manager and the related budget authority must also be approved by council. d) Health Benefits. Benefits and compensation will be administered in accordance with policy given by council. As part of a cost-containment strategy, total costs for health insurance premiums will be shared between the employer, employees, and public safety disabled retirees. Total premiums will be evaluated on an annual basis to ensure they are reasonable and competitive and that total premiums are expected to provide adequate funding of anticipated claims and a reasonable level of loss reserves. 3 .0 2 Capital Expenditure Management. forecasted and included in the operating budget, fiveyear financial plan, and the CIP. d) Balanced CIP Budget. For each year of the CIP, total anticipated expenditures and commitments will not exceed projected starting fund balance plus total anticipated revenues for that year. e) Pay-as-you-go. The city shall incorporate “pay-as-yougo” funding in the annual CIP. Pay-as-you-go funding should account for a minimum of 25 percent of the capital improvement plan (CIP), for each five-year planning period, expect for capital improvement programs funded by voter approved debt where the amount of debt is authorized by voters. Pay-as-you-go funding is defined as all sources of revenue other than city debt issuance, i.e., fund balance, dedicated revenues, contributions, grants etc. f) Approval for Capital Project Cost increases. Cost increases to capital projects greater than 10 percent and $1.0 million as a result of scope increases or other cost increases require council presentation or a written update to council, and council approval. a) Capital Improvement Plan (CIP). The CIP is a planning and fiscal management tool used by the city for long-term planning for capital improvements. The five-year CIP will be updated annually, including anticipated spending as well as funding sources, and submitted to council for review and adoption. CIP projects are defined typically as multi-year efforts which may include purchases or construction of infrastructure or equipment which results in a new capitalized asset costing more than $50,000 and having a useful life of five years or more. 3.03 b) Project Review and Selection. Proposed CIP projects will include a detailed project description, identification of need and funding sources, full cost estimates, anticipated time schedule, full operating impacts, and other information necessary for proper evaluation of the city’s investment in and the ability to fund the projects. Proposed CIP projects will be reviewed and prioritized by a cross-divisional team to ensure they are consistent with the council goals. POLICY 4 - REVENUE MANAGEMENT c) Funding of CIP Projects. CIP projects must have sufficient budget authority and a funding source identified in the current budget year to meet the entire amount of the commitment. Future operating, maintenance, and capital costs associated with new capital improvements approved by council will be Financial Obligations and Commitments. a) Divisions contemplating entering into financial obligations and commitments for new programs, projects, or services and requiring future budget appropriations over $1.0 million that is currently not in the five-year CIP or operating forecast requires city manager approval and council presentation and approval before entering into the financial obligation or commitment. The revenue management policy establishes the city’s revenue principles and practices for ensuring financial stability and sustainability and achieving the city’s financial goals of maintaining an adequate financial base for municipal services. 4.01 Custody. In accordance with Scottsdale Revised Code Chapter 2 Article IV, Section 2-131, the city treasurer shall control receipts and have custody of all the money of the city. 4.02 Revenue Collection. The city will maintain effective internal controls and formal procedures to ensure the proper billing, collection, and accounting of 87 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance all receipts and receivables. The city will vigilantly pursue collecting all revenues, late penalties, and related interest as authorized by the Arizona Revised Statutes and city policies. 4.03 Revenue Base. The city will strive to maintain a diversified and stable General Fund revenue base to shelter it from economic changes or short-term fluctuations by exploring appropriate and allowable sources of revenues for funding programs and projects which may include revenues from assessments, contracts, grants and contributions, taxes, and fees. 4.04 Dedicated Revenues. Revenues will not be dedicated for specific purposes, unless approved by council, required by law, or restricted by an outside party. All non-restricted revenues (except for Proprietary Fund revenues) will be deposited in the General Fund. 4.05 User Fees and Charges. For services that largely or solely benefit individuals, the city shall recover full or partial cost of service delivery through user fees and charges. New fees and fee increases must be approved by council before implementation. The city will periodically evaluate the full cost of providing a service for which fees are charged. The calculation of full cost will include all reasonable and justifiable direct and indirect cost components. 4.06 Fleet and IT Replacement Rates. The use or replacement of Fleet and Information Technology (PC, phones, and copier systems) will be accounted for through the use of a direct or a “rental” rate structure. The rates will be revised annually to ensure that charges to operating divisions are sufficient for operation and replacement of vehicles and other equipment. Replacement costs will be based upon equipment lifecycle financial analysis. Development 4.07 Development Impact Fees. impact fees, as permitted by state law, for capital expenses attributable to new development will be reviewed periodically with an engineering assessment to ensure that fees recover all direct developmentrelated expenses and be approved by council. One-Time Non-Operating 4.08 Unanticipated Revenues. Use of significant unanticipated one-time, non-operating revenues (except for grants) such as the sale of land, requires council presentation and approval. POLICY 5 - GRANTS MANAGEMENT Grant funding will be considered to leverage city funds. This policy provides guidance to ensure careful review of grant opportunities and their fiscal impact, prior to determining whether an application should be made for these grant funds. The city also maintains AR #255, which governs the Grant Acquisition and Administration process. 5.01 Grant Application. The city shall apply for only those grants that are consistent with the goals and priority needs of the city. The potential for incurring ongoing costs, including the assumption of support for grant-funded positions from local revenues, will be considered prior to applying for a grant. Application or acceptance of grants meeting the parameters of AR #255 are subject to council approval. 5.02 Match Requirements. All grant submittals shall be reviewed for their cash match requirements, their potential impact on the operating budget, and the extent to which they meet the city’s goals. If there is a cash match requirement, the source of funding shall be identified prior to application. 5.03 Budget Control. The city should avoid relying on grant funding to support on-going programs. All grant program initiatives will be evaluated as part of the budget process. In the event of reduced grant funding, or inconsistent and/or fluctuating grants, city resources may be substituted only after all program priorities and alternatives are considered during the budget process. POLICY 6 - CAPITAL ASSET MAINTENANCE AND REPLACEMENT Proper preventative maintenance, repair, renewal, and replacement are essential to protecting the city’s investment in its capital assets and ensuring the continued performance and use of these assets for the provision of services to our residents. Deferring essential maintenance or replacement can impact service delivery and increase long term costs. This policy provides guidance to ensure a system for assessing capital assets and providing adequate funding for the maintenance, repair, renewal and replacement of capital assets. The city also maintains AR #226, which governs 88 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance Capital Assets: Acquisition, Inventory and Disposal. 6.01 Maintenance and Replacement Plans. Periodic physical inventories and assessments for all types of capital assets should be conducted to determine the condition, use, repair, and replacement needs of the assets. A multi-year maintenance and replacement plan should be maintained for critical assets. 6.02 On-going Funding. The city will establish an ongoing source of funds to provide for and avoid deferral of critical capital asset maintenance, repair, renewal, and replacement needs. 6.03 Fleet and Equipment Reserves. Replacement funds or reserves for certain fleet vehicles, certain computer equipment, and other asset categories will be determined as part of the annual budget process, as deemed necessary, to ensure adequate funding for systematic replacement and operational needs. POLICY 7 - CASH AND INVESTMENT MANAGEMENT The city has a fiduciary responsibility over public funds, including the on-going managing and monitoring of treasury and investment activities. This policy provides guidance and standards of care for the proper management of the city’s cash and investments. The city also maintains AR #268, which ensures a system of internal controls and governs the city’s cash collection, handling, training, and procedures program. 7.01 Investment Policy. The city shall maintain and comply with a separate written Investment Policy that has been approved by the council. The city treasurer, as chief investment officer, or his/her designee shall invest all funds of the city according to the approved Investment Policy. City funds will be managed in a prudent and diligent manner with an emphasis on safety of principal, liquidity, and financial returns on principal, in that order. The city treasurer shall provide the council with quarterly investment reports. 7.02 Management of Funds. The city will collect, deposit, invest, and disburse all funds on a schedule that insures optimum cash flow liquidity and investment of public funds. Bond funds will be segregated from all other funds for arbitrage and accounting purposes. To optimize investment performance, the city will consolidate cash balances from various funds for investment purposes. 7.03 Financial Institutions. The city will conduct its treasury and investment activities with qualified financial institution(s) that have balance sheet strength, high credit quality, and dedicated government operations that can fully serve the city’s complex treasury and investment needs. Arrangements with financial institutions will be based on written contracts. The city and financial institution(s) will adhere to state laws and city code for the proper collateralization of public deposits. 7.04 Custody of Investments. Ownership of the city’s investment securities will be protected through third party custody safekeeping. Arrangements with third party custodian services will be based on written contracts. POLICY 8 - DEBT MANAGEMENT The city utilizes debt to finance needed capital projects too large to fund with current resources or where the issuance of debt provides financial or economic benefits to the city’s residents and business owners. The issuance of debt obligations (bonds, notes, certificates of participation, capital leases, and other debt instruments) has a significant impact on the city’s finances and must be carefully considered and managed to ensure prudent financial management, mitigation of risks, and preservation of the city’s high bond ratings. This policy provides guidelines for the appropriate uses of debt, establishing debt management goals, ensuring compliance with federal, state, and local laws, and maintaining the city’s high bond ratings. 8.01 Evaluation for Issuance of Debt Obligations. The city treasurer shall evaluate and consider various conditions, including but not limited to the following, when analyzing, reviewing, and recommending the issuance of debt obligations: a) Appropriate use of debt; 89 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance b) Financing and funding alternatives; c) Acquisition and construction cash flow projections; d) Impact on the General Fund and other operating funds; e) Debt burden on tax base or user fees; f) Availability and sufficiency of pledged revenues for current and future debt service; g) Debt coverage and other ratios, debt security, reserve requirements, and proposed debt covenants. advisor will have a fiduciary responsibility to the city, the proper experience and qualifications to advise the city and will comply with all applicable municipal advisor rules and regulations promulgated by the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB). The financial advisory relationship will be evidenced through a written contract. The solicitation and selection of outside professionals shall be done in conformance with the city’s procurement code and competitive selection process for professional service contracts. 8 .0 2 Conditions for Issuance of Debt Obligations. The issuance of all debt obligations is subject to approval by the city treasurer and council. In addition, the issuance of debt obligations is subject to but not limited to the following requirements: a) Debt financing shall not be obtained to fund operations. b) Capital projects to be financed should first be developed and approved in accordance with the capital improvement process. c) The city treasurer will seek input from the city’s external financial advisor and bond counsel and carefully consider the debt service structure, timing, terms and other such matters concerning each debt issuance. d) The debt portfolio’s principal and interest payments should generally be structured to result in level debt service or to align with the useful life of the assets, unless an alternate structure is warranted. Deferral of principal is discouraged. e) The weighted average maturity of the debt issuance should generally be no greater than the reasonably expected average economic life of all the assets being financed. f) Debt proceeds will reasonably be utilized within three-years, and in approved circumstances fiveyears, in compliance with Internal Revenue Service (IRS) regulations. g) Debt obligations must comply with all applicable federal, state, and local laws, regulations, and covenants. 8.04 Types of Debt Obligations: a) General Obligation (G.O.) Bonds. i. G. O. Bonds are voter authorized debt supported by (secondary) property tax revenues. The issuance of G.O. Bonds shall be carefully considered and used only for public projects benefitting a broad public interest. ii. Issuances will be managed to match debt issuance proceeds to CIP cash flow requirements. iii. The city will not exceed $1.50 combined (primary and secondary) property tax rate per $100 net assessed limited property value unless otherwise directed by the council. iv. Outstanding G.O. Bonds are limited by the Arizona Constitution to 20 percent of net assessed full cash property value for projects involving water, sewer, streets, transportation, public safety artificial light, parks, open space, and recreational facility improvements, and 6 percent of net assessed full cash property value for any other general municipal-purpose projects. v. The city will maintain appropriate debt service reserves as stated in Policy 2. 8.03 Outside Professional Services. The city treasurer (and city attorney for bond counsel services) shall be responsible for the solicitation, selection, and securing of professional services required to assist the city in the issuance and administration of its debt obligations. The city shall use an external financial advisor on all debt issuances. The external financial b) Excise Tax/Revenue Secured Obligations. i. Non-voter authorized debt (i.e., Municipal Property Corporation (MPC 2 ), Excise Tax Municipal Property Corporation (MPC) is a non-profit corporation created in 1967 by the city as a financing mechanism for the purpose of financing the construction or acquisition of capital improvement projects for lease to and use by the city. The MPC is governed by a board of directors consisting of citizens from the community approved by the city council. MPC bonds are secured by the city's lease payments which are in turn secured by city excise tax and other undesignated general fund revenues. These bonds may be issued without a vote of the citizens. 2 90 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance ii. iii. iv. v. vi. vii. Obligations, Revenue Obligations, and other non-voter authorized debt) will be used only when a dedicated non-property tax source (e.g., excise taxes and utility revenues) can be identified to pay or reimburse the General Fund for paying debt service expenses. Issuances will be managed to match debt issuance proceeds to CIP cash flow requirements. The General Fund excise tax debt service should not exceed 10 percent of the General Fund’s current or future annual operating revenue in order to control fixed costs and ensure expenditure flexibility. The city treasurer shall perform a five-year analysis of debt coverage and other ratios, debt security, and reserve requirements for each debt issuance. Careful consideration of the intended use of the financed facilities, including private activity use, must be evaluated when determining the appropriate debt structure. McDowell Sonoran Preserve (Preserve) debt service will be funded by the dedicated 0.35 percent privilege tax. The city will strive to maintain a dedicated debt service ratio of at least 1.5:1 for senior lien debt to ensure the city’s ability to pay for Preserve debt from this elastic revenue source. The city will maintain appropriate Debt Service Reserves as stated in Policy 2. c) Improvement District (ID) Bonds. i. IDs are a funding mechanism primarily used for existing neighborhoods desiring improvements to public infrastructure that specifically benefit the neighborhood such as street paving, improvements to sidewalks, curbs, gutters, sewers, ditches, drains, offstreet parking, street lighting, undergrounding utility facilities etc. ii. ID bonds, as authorized by state statutes for certain ID improvements, shall not have maturities longer than ten years and are secured by a first lien on the property benefited. ID bonds will be utilized only when it is expected that the debt will be issued for their full term. iii. ID debt will be permitted only when the net assessed full cash property value of the district, as reported by the Maricopa County Assessor’s Office, to debt ratio (prior to improvements being installed) is a minimum of 3:1 prior to issuance of debt and 5:1 or higher after construction of improvements. Should the net assessed full cash property value to debt ratio not meet the minimum requirements, property values may be determined by an appraisal paid for by the applicant and administered by the city. d) Community Facility District (CFD) Bonds. i. CFDs are special taxing districts created to provide a funding mechanism to finance construction, acquisition, operation and maintenance of public infrastructure that benefits real property within the CFD. ii. CFDs have statutory taxing and borrowing authority within the city. For that reason, council must fully understand the benefits, potential drawbacks, risks and legal exposures, to ensure the financial protection of the city and its property owners and taxpayers, and to ensure the success of the CFD, when considering each CFD formation. The city will maintain a separate written CFD policy to establish policy directions, application and formation procedures. iii. CFDs should be considered primarily in connection with the financing and funding of major public infrastructure that conforms to council goals, the city’s general plan, infrastructure plans or capital improvement plans. iv. The city treasurer will carefully assess the proposed financing plan, financial assurances, overlapping tax and financial burden on property owners and other factors for each proposed CFD formation. v. CFD debt will be permitted only when the net assessed full cash property value of the district, as reported by the Maricopa County Assessor’s Office, to debt ratio (prior to improvements being installed) is a minimum of 3:1 prior to issuance of debt and 5:1 or higher after construction of improvements. vi. Voter approval is required for the CFD to issue G.O. bonds. vii. The landowner/developer shall also contribute $0.25 in public infrastructure improvement costs for each dollar of public infrastructure improvement debt to be financed by the CFD. 91 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance 8.05 Refunding Bonds. Refunding bonds are issued to retire all or a portion of an outstanding bond issue. Typically, this is done to achieve lower interest costs, reduce debt service payments or to restructure the debt to meet the city’s goals. When making a determination on refunding bonds, the city treasurer will consider the following conditions: a) A present value analysis must be prepared to identify the economic effects of the potential refunding. b) For refunding transactions undertaken solely to achieve cost savings, the target net present value savings as a percent of par, shall be at least 3 percent of the refunded par amount, net of transaction expenses, and in excess of $1,000,000. c) Modification of restrictive covenants or existing debt structure to the benefit of the city. 8.06 Investment of Bond Proceeds. The city treasurer or his/her designee will direct the investment of bond proceeds in accordance with permitted investments for each bond issue and with the city’s separately written Investment Policy. Bond interest earnings will be limited to funding changes to the bond financed CIP, as approved by the council or be applied to debt service payments on the bonds issued. The investment of bond proceeds shall comply with all applicable federal, state and, indenture restrictions. 8.07 Use of Bond Proceeds. The city shall not give or loan its bond proceeds to any individual, association, or corporation unless legally authorized and approved by council. 8.08 Lending of City’s Credit. The city shall not loan, give its credit, or guarantee loans for private developers or private party financing arrangements. 8.09 Issuance and Post Issuance Compliance and Continuing Disclosure Undertakings. The city will comply with arbitrage rebate requirements of Internal Revenue Code Section 148 and related Treasury Regulations and shall maintain and comply with separately written procedures for tax-exempt bonds (Written Policies Relating to Issuance and PostIssuance Compliance Procedures for Tax-Advantaged Obligations of the City of Scottsdale, Arizona) to ensure tax-exempt bonds remain in compliance with federal tax requirements. Additionally, the city will comply with Rule 15c2-12 of the Securities and Exchange Act of 1934 adopted by the SEC for reporting significant events and shall maintain and comply with separately written procedures for continuing disclosure compliance (Continuing Disclosure Compliance Procedures Regarding the Securities and Exchange Commission Rule 15c2-12 for the City of Scottsdale, Arizona). POLICY 9 - ENTERPRISE FUNDS The city’s Enterprise Fund operations (Water, Wastewater, Solid Waste, and Aviation) are selfsupporting operations that generate revenues to fully recover the cost of service. The city invests significantly in its enterprise systems and operations to ensure safe and reliable service to our residents and businesses. This policy provides guidance for the proper management, stewardship and safeguarding of the Enterprise Fund assets and resources and to ensure financial stability and sustainability of the city’s enterprise systems. Enterprise Funds will comply with all Policies where applicable. 9.01 Enterprise Funds. Separate funds will be established and maintained to properly account for each enterprise operation. Enterprise Funds will not be used to subsidize the operations of other non-Enterprise Funds. Interfund charges will be assessed for the administrative support of the enterprise activity based on a rational nexus between the charges and cost of the benefits received. 9.02 Rates and Fees. The city will establish rates and fees at levels that recover the total direct and indirect costs for operating and capital requirements, including debt service and debt coverage requirements for water, wastewater, solid waste, and general aviation services. All existing enterprise rates and charges will be reviewed annually and developed pursuant to a multiyear financial plan that strives to gradually implement user rate adjustments to avoid acute fluctuations. 9.03 Enterprise Rate Stabilization. In order to ensure long-term stability of the city’s enterprise systems and rates, the city will develop its rates to include future capital needs. In conjunction with debt issuances, funds in excess of reserves and operating requirements will be used to supplement "pay as you go” capital 92 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance expenditures to avoid significant and unplanned rate adjustments. 10.01 Deposits to the Tourism Development Fund. 100 percent of the bed tax received by the city shall be deposited into the Special Revenue Fund for Tourism Development (Tourism Development Fund). Additionally, the Tourism Development Fund shall receive 100 percent of Princess Hotel lease revenues. 9.04 Operating Reserves. The city will maintain “Operating Reserves” in its Enterprise Funds as stated in Policy 2 to provide for emergencies, unexpected declines in revenues, and other unanticipated events. 9.05 Water and Wastewater Asset Replacement Reserve. The city will maintain a “Water and Wastewater Asset Replacement Reserve” in its Enterprise Fund as stated in Policy 2 to provide funding for the repair and maintenance of critical assets. 10.02 Allocation of Bed Taxes. As approved by the voters, 50 percent of the bed tax revenues shall be used for destination marketing to promote tourism and 50 percent shall be divided among tourism-related event support, tourism research, tourism-related capital projects and other eligible uses as determined by city ordinance and state law. 9.06 Debt Financing. Debt financing will be used for capital projects too large to fund with current resources and when a debt issuance is affordable and appropriate to facilitate “intergenerational equity,” wherein projects with longer lives are paid over several generations through debt service payments. The Enterprise Funds shall incorporate “pay-as-you-go” funding in the annual CIP, Pay-as-you-go funding about should account for a minimum of 25 percent of the capital improvement plan (CIP), for each year five-year planning period. Pay-as-you-go funding is defined as all sources of revenue other than city debt issuance, i.e., fund balance, dedicated revenues, contributions, grants, etc. As approved by council ordinance and in compliance with state law, the annual allocation of the second 50 percent of bed taxes is as follows3: a) Twelve percent for the General Fund; b) Nine percent for tourism-related events and event development; c) Four percent for tourism-related administration and research; d) Twenty-five percent, plus the lease payments on the Princess Resort, or the balance of the remaining Tourism Development Fund revenues, for tourismrelated operating expenses, capital projects and/or operating impacts that are directly associated with tourism-related capital projects, in the form of onetime commitments or multi-year annual commitments, not to exceed $600,000 per commitment unless otherwise approved by council. 9.07 Debt Coverage Ratio Target. Bond covenants may exist that require maintaining a minimum debt coverage ratio. In order to maintain the city’s high bond rating, the city will recommend rates based on a target debt coverage ratio of at least 2.0 times for Water and Wastewater and 1.5 times for Aviation and Solid Waste. For financial planning purposes, the debt coverage ratios will be calculated without consideration of development fee revenues. 10.03 Unused Funds. Subject to council approval, at the end of each fiscal year, any unused funds from the second 50 percent as referenced in 10.02 above will be available for use in following years for any of the nonmarketing tourism categories (except the General Fund category) and may be allocated without limitations, except that they may not be leveraged for multi-year annual commitments, such as debt service payments. POLICY 10 - TOURISM DEVELOPMENT FUND The city assesses a 5 percent transient tax for lodging (bed tax) on businesses charging for lodging on a daily, weekly, or any other basis for less than 30 consecutive days. The purpose of this policy is to comply with state law and city elections as well as provide for the proper allocation of the transient tax for lodging in accordance with Scottsdale Ordinance No. 4534. 10.04 Allocation Priority. In the event of a decrease in Tourism Development Fund revenues, debt service is Three percent of the bed tax was grandfathered in and is not subject to the A.R.S. § 9-500.06 restrictions on the use of bed tax funds for the promotion of tourism, and thus is only restricted by city election. 3 93 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance the priority and will be met first. POLICY 11 - ECONOMIC DEVELOPMENT The city may utilize public funds to encourage private development projects that have a direct benefit to the city, subject to state law and Scottsdale City Charter restrictions. The city strives to expand and diversify its economic base by attracting, retaining, and expanding targeted industries to the city as identified in the city’s Economic Development Strategic Plan. The purpose of this policy is to provide guidance on the use of public funds in economic development to focus on job opportunities and other community benefits that diversify and strengthen the local economy and align with the Scottsdale General Plan. 11.01 Compliance with State Law and the Scottsdale City Charter. Use of public funds in development agreements and contracts for economic development shall be applied consistent with state law and the Scottsdale City Charter and prove to have a clearly identified public purpose and direct benefit to the city. 11.02 Evaluation of Costs and Financial Impacts. Development agreements and contracts for economic development will be carefully evaluated to ensure financial and cost impacts are fully understood. Such costs and financial impacts will be forecasted and included in the operating budget, five-year financial plan, and/or the CIP. 11.03 Restricted Use of Public Funds for Economic Development. The city shall not give or loan its credit in aid of, nor make any donation, grant, or payment of any public funds, by subsidy or otherwise, to any individual, association, or corporation except where there is a clearly identified public purpose and the city either receives direct consideration substantially equal to its expenditure or provides direct assistance to those in need. Use of public funds for economic development shall be in accordance with council’s established goals and priorities and subject to council approval. POLICY 12 - RISK MANAGEMENT Risk management has become increasingly important to guard against economic loss and ensure public safety in a time of increasing public liability and litigation. This policy outlines how risk management is an on-going process of identifying, assessing, and prioritizing of risks, followed by the application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events. 12.01 Mitigation of Risks. The city shall make diligent efforts to prevent or mitigate the loss of city assets and to reduce the city's exposure to liability claims through on-going risk assessments, training, safety reviews, loss prevention, and the transfer of risk when prudent. 12.02 Self-Insurance. The city has elected to manage its exposure to risk, and third-party liability claims through self-insurance, in addition to purchasing excess workers’ compensation property and casualty insurance. 12.03 Risk Exposure Controls. The city will utilize additional risk control measures to further control its exposure to risk. Measures include, but are not limited to, hold harmless provisions, indemnification language, and in many cases requiring contractors or vendor to procure additional insurance to address the various exposures presented to the city by their activities. 12.04 Self-Insurance Reserves. Financial reserves shall be maintained at a level which, together with any excess insurance, will adequately protect the city’s assets and defend its elected officials, officers, and directors against financial loss. The Risk Management Department relies on an annual actuarial study to identify probable losses and is used as a basis for determining self-insurance fund balances based on historical loss data. See Policy 2 for additional information. 12.05 Annual Report. Each year, the Risk Management Department will prepare an annual report depicting a summary of the revenues and expenses received in relation to the worker’s compensation, property and casualty program for the fiscal year. 12.06 Cost Allocations. Cost allocations to various funds will be based on an analysis of contributing factors, such as claims experience, reserve requirements, cost of risk management and mitigation etc. 12.07 Liability Tort Settlement and Judgments. 94 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance Annually, the city shall include liability tort settlements and judgments authorized by the State of Arizona’s Property Tax Oversight Commission into the primary property tax creating a reimbursement revenue to the Risk Management Fund. POLICY 13 - ACCOUNTING, AUDITING, AND FINANCIAL REPORTING Accounting, auditing, and financial reporting form the foundation for financial transparency and accountability. This policy provides guidance on the city’s accounting, auditing, and reporting functions to ensure timely, accurate, and comprehensive information is provided to the council, management, residents, investors, creditors and other interested parties. 13.01 Financial Records. The city treasurer maintains the official financial records of the city, to include the general ledger, the city’s budget documents, debtrelated documents etc. 13.02 Compliance. The city’s accounting and financial reporting systems will be maintained in conformance with all state and federal laws, General Accepted Accounting Principles (GAAP), and GAAP and standards of the Governmental Accounting Standards Board (GASB). 13.03 Internal Controls. A system of internal accounting controls and procedures will be maintained to provide reasonable assurance of the safeguarding of assets, the proper recording of financial transactions of the city, and compliance with applicable laws and regulations. 13.04 Monthly Financial Reports. The city treasurer shall issue timely monthly financial reports to council in accordance with the Scottsdale City Charter. 13.05 Audit. Prior to the end of the fiscal year, the council shall designate certified public accountants who shall perform an independent audit of the city’s financial statements in accordance with generally accepted governmental auditing standards. The certified public accountants shall be independent of the city government, having no personal interest, direct or indirect, in the fiscal affairs of the city government or any of its officers. The certified public accountants shall submit their reports to the council. All such audit reports shall be a matter of public record. 13.06 Annual Financial Report. The city will prepare an Annual Comprehensive Financial Report (ACFR) in accordance with the principles and guidelines established by the Government Finance Officers Association “Certificate of Achievement for Excellence in Financial Reporting” program. Staff will submit the ACFR each year for review in the award program. POLICY 14 - PENSION FUNDING An adequately funded pension plan not only provides assurance to employees but also achieves taxpayer and member intergenerational equity by not placing an unfair burden on future taxpayers and members. This policy provides guidance for pension funding to ensure the city maintains adequate assets to fund benefits payable in its pension plans. 14.01 Annual Required Contributions. The city shall fund the full amount of the Annual Required Contribution (ARC) each year as determined by the actuarial valuation report for its defined benefit contribution plans. The ARC is the amount necessary to be contributed by an employer to adequately fund a public pension plan. 14.02 Funding Policy. The city shall maintain and comply with a separate written pension funding policy for its Public Safety Personnel Retirement System that is approved by the council annually in accordance with A.R.S. § 38-863.01 14.03 Funding Status. It is the intent of the city to maintain adequate assets to fund benefits payable in its defined benefit plans. In the event the funded status falls to an unacceptable level, the city shall strive to make additional contributions above the ARC to restore the funded status to an acceptable level. 14.04 Use of Debt. Pension obligation bonds add a level of risk that should be analyzed thoroughly, and the city shall not rely on pension obligation bonds to reduce unfunded pension liabilities. 95 Table of Contents OVERVIEW | Adopted Comprehensive Financial Policies and Governing Guidance Appendix A - Budget Governing Guidance The following represents budget governing guidance which provides direction for allocating city resources to fund operating or capital expenditures. The below guidance may be changed during the annual budget process to respond to council priorities or to better align resources with operating or capital needs as recommended by the city manager and city treasurer. Changes to the below guidance must be approved by the council through the budget process. 1) Funding for General Fund CIP. a) 50 percent of the unrestricted portion of construction privilege tax revenues. b) 100 percent of General Fund interest earnings. c) Any additional funding as recommended through the budget process. 2) General Fund Operating Surplus. Year-end General Fund operating surpluses not needed to restore contingency reserves, or designations or to cover unforeseen shortfalls in the budget will be considered for one-time operating needs or transferred to the General Fund CIP in the following fiscal year’s budget development process. 3) Funding for Public Safety Accidental Disabled Retirees. A General Fund transfer will be made to the Benefits Healthcare Self-Insurance Fund to subsidize the cost of providing healthcare benefits to sworn public safety accidental disabled retirees. 4) Transportation Fund Operating Surpluses. Year-end Transportation Fund operating surpluses not needed to restore contingency or reserves or to cover unforeseen shortfalls in the budget will be considered for one-time operating needs or transferred to the Transportation Fund CIP in the following fiscal year’s budget development process. 5) Allocation of Dedicated 0.2 Percent Transportation Privilege Tax. No less than 50 percent of the dedicated 0.2 percent privilege tax revenue for transportation improvements will be allocated to the capital budget for planning, design, construction, and acquisition costs associated with building, renovating, or enhancing capital projects for streets, highways, traffic control, and transit. 96 Table of Contents OVERVIEW | Fund Accounting - Fund Types Fund Accounting – Fund Types Fund accounting segregates functions and activities into separate self-balancing funds that are created and maintained for specific purposes. This approach is unique to the government sector. To ensure legal compliance and financial management for the various restricted revenues and program expenditures, the city’s accounting and budget structure is segregated into various funds. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The city, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. General Fund is the primary operating fund of the city. It exists to account for the resources devoted to finance the services traditionally associated with local government. Included in these services are police and fire, parks and recreation, planning and economic development, general administration of the city, and any other activity for which a special fund has not been created. Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. The city maintains the following five Special Revenue Funds: Transportation, Tourism Development, Preservation, Stadium Facility, and Special Programs. Debt Service Fund is used to account for the accumulation of resources and for the payment of general long-term debt principal and interest. It does not include contractual obligations accounted for in the individual funds. Internal Service Funds are used to account for the financing, on a cost-reimbursement basis, of commodities or services provided by one program for the benefit of other programs within the city. The city maintains Internal Service Funds to account for Fleet Management, PC Replacement and Self Insurance activities. Grant Funds are used to leverage city funds to address priority program and service needs. Special Districts Fund is used to account for the city’s streetlight districts. Capital Improvement Plan Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. The city maintains several Capital Improvement Plan Funds to ensure legal compliance and financial management for various restricted and unrestricted revenues. Enterprise Funds are used to account for operations, including debt service, which are financed and operated similarly to private businesses, where the intent is that the service is self-sufficient, with all costs supported predominantly by user charges. The city maintains three Enterprise Funds to account for Water and Water Reclamation, Solid Waste, and Aviation activities. 97 Table of Contents FY 2023/24 Adopted Budget 98 Table of Contents BUDGET BY FUND | Total Budget Overview Adopted Budget $2,533.3M (a) Operating Budgets $722.8M (a) (a) (b) Grants & Special Districts $16.3M Capital Improvement Plan $1,368.9M Contingencies / Reserves $425.3M General Fund $375.4M Grant Funds $15.7M Community Facilities $144.8M General Fund $206.7M Special Revenue Funds $67.5M Special Districts Fund $0.6M Drainage / Flood Control $71.0M Special Revenue Funds $14.6M Debt Service Fund $91.5M Preservation $38.1M Debt Service Fund $7.0M Enterprise Funds $178.3M Public Safety $100.6M Enterprise Funds $96.2M Internal Service Funds $10.0M (a) $80.4M (b) Service Facilities $137.0M Internal Service Funds $41.0M Transportation $427.7M Grant Funds $8.1M Water Management $449.8M Capital Improvement $51.7M Adopted Budget and Operating Budgets include Internal Service Funds offsets (reductions) of $70.4M Internal Service Funds Budget prior to Internal Service Funds offsets of $70.4M Rounding differences may occur. 99 Table of Contents Revenue by Fund Type The total City of Scottsdale FY 2023/24 adopted budget consists of $2,054.7 million in revenue including, $1,006.5 million in anticipated Capital Improvement Plan (CIP) unexpended revenue, $287.2 million in Sales Tax, $75.0 million in property taxes, and $685.9 million in other operating and capital revenues. A complete detail of revenues can be found on the Total Appropriation schedule. Total Budget Appropriation by Fund Type The total City of Scottsdale FY 2023/24 adopted budget appropriation is $2,533.3 million, which includes $425.3 million in contingencies/reserves. The Capital Improvement Plan and its associated contingencies/reserves accounts for the largest portion of the annual budget appropriation at $1,420.7 million. Rounding differences may occur. 100 BUDGET BY FUND | Total Budget Overview Table of Contents BUDGET BY FUND | Total Budget Overview Total Budget Appropriation Expense Type The largest expense category in the FY 2023/24 adopted budget is Capital Outlays at 55 percent, or $1,382.0 million. Expenses for Personnel Services, Contractual Services, Debt Services and Commodities together account for $664.6 million, or approximately 26 percent of the total authorized budget. Total budget appropriation by expense category is displayed on the following page. Rounding differences may occur. 101 102 964,336,422 369,638,669 39,980 2,054,699,827 1,150,878,158 15,718,490 538,728 8,228,397 3,016,944 8,883,982 262,750,522 182,943,979 - 170,038 8,318,156 - 54,102,524 35,656,731 201,341,359 33,180,730 9,748,854 63,689 - 17,152,136 52,028,171 59,470,286 19,833,372 35,044,669 2,184,161 418,946,795 8,076,408 - 8,076,408 - - - - - - Other* 344,690,911 - 2,320,987 - 5,567,869 1,589,900 312,204 29,157,357 11,200,884 1,931,064 - 10,285,357 5,304,997 657,217 262,762 276,100,313 Personnel Services 377,168,083 **Total Budget Appropriation excludes Transfers Out and assumes the use of reserve appropriations. - 13,231,006 578,708 2,022,804 15,792,845 38,911,737 62,319,362 18,380,221 3,071,665 91,459,254 18,437,385 4,695,843 20,798,461 448,419 87,020,373 Contractual & Debt Service *Other includes Operating Contingency, Reserve Appropriations, Internal Service Offsets, Anticipated Grants and Indirect Costs. Total All Funds Capital Improvement Grants Special Districts 9,881,940 1,561,172 26,587,435 19,773,890 77,655,361 9,888,652 10,340,821 8,668,474 41,112,983 106,970,044 16,774,735 18,554,409 4,731,469 242,156,388 Revenue Transfers In Sources 363,958,202 2,533,270,561 51,721,959 8,076,408 - (19,750,676) (750,000) 11,922,385 (20,809,802) 88,845,755 7,128,114 9,289,690 6,968,475 3,730,530 1,500,000 9,359,883 - 206,725,481 Other* 1,382,038,445 1,368,929,785 - 6,317,209 768,170 - 812,560 32,400 - 2,034,060 534,248 573,675 - 2,036,338 Capital Outlays To t al B u d g e t A p p r o p r i at i o n ** 65,414,920 - 135,047 - 8,842,794 269,700 - 41,369,938 941,113 57,660 - 1,548,493 1,794,351 6,870 194,113 10,254,841 Commodities Uses 262,750,522 5,763,028 31,450 - 8,636,120 29,549 - 64,809,904 2,777,884 498,536 - 33,838,034 35,354,537 7,982,969 21,350,538 660,000 81,017,973 Transfers Out 493,842,097 277,046,034 - 6,474,217 1,543,002 10,413,771 2,641,166 5,208,660 - 23,267,295 131,085,793 14,859,389 852,434 5,350,336 15,100,000 Ending Balance Grants & Special Districts Fleet Management PC Replacement Risk Management Healthcare Self-Insurance Internal Service Funds Water & Water Reclamation Solid Waste Aviation Enterprise Funds Debt Service Fund Transportation Preservation Special Programs Tourism Development Stadium Facility Special Revenue Funds General Fund Beginning Balance Table of Contents BUDGET BY FUND | Total Budget Overview Table of Contents BUDGET BY FUND | Total Appropriation G e ne r a l Fund Special Revenue Funds Debt Service Fund Enterprise Funds Internal Service Funds Grants & Special Districts Fund Ca p i t a l Improvement Funds 242, 156, 388 188, 143, 640 8, 668, 474 97, 884, 833 57, 804, 438 39, 980 369, 638, 669 T ot al 964, 336, 422 Sales Tax 166,134,814 88,168,514 16,353,065 270,879,393 Sales Tax - Public Safety (0.10%) 16,353,065 Electric & Gas Franchise 9,106,540 262,000 Stormwater Fee - CIP - 6,721,382 Cable TV License Fee 3,700,000 Stormwater Fee 960,198 Salt River Project In Lieu 200,000 Description Beginning Fund Balance Revenues T a x es - L o c a l Transient Occupancy Tax 223,000 16,353,065 9,368,540 - 6,721,382 3,700,000 340,527 1,300,725 200,000 31,448,488 31,448,488 Charges For Service/Other Intergovernmental 4,168,669 3,263,813 - Miscellaneous 1,006,918 2,380,881 - Property Rental 5,427,428 4,295,416 Westworld Equestrian Facility Fees 5,929,574 1,223,354 - 1,429,051 Contributions & Donations 4,432,368 1,010,051 - 110,082,462 117,514,944 582,000 1,491,000 10,903,218 398,774 64,200 5,550 2,183,390 10,185,818 7,152,928 - - 3,617,991 State Shared Revenues State Shared Income Tax 65,098,126 65,098,126 State Shared Sales Tax 36,543,806 36,543,806 Auto Lieu Tax 12,436,288 12,436,288 P r o p er t y T a x Property Tax 37,177,572 35,656,731 2,201,944 75,036,247 Interest Earnings Interest Earnings 8,212,914 4,480,409 20,400,907 77,320 4,066,398 4,731,141 21,490,862 65,000 20,543,227 4,122,395 17,011,295 Building Permit Fees & Charges Building Permit Fees & Charges Other Revenue Grants - - 12,888,900 Special Districts 538,728 Property Rental 185,100 185,100 CIP Unexpended Year End Reimbursements from Outside Sources 538,728 - 1,081,432 1,006,533,095 1,006,533,095 - 1,081,432 License Permits & Fees Recreation Fees 5,205,367 3,045,528 8,250,895 Business & Liquor Licenses 2,802,228 50,160 2,852,388 Fire Charges For Services 2,736,729 2,736,729 Fines Fees & Forfeitures Court Fines 4,053,645 Photo Radar 2,641,329 2,641,329 Parking Fines 263,700 263,700 Jail Dormitory 144,000 Library 27,204 Police Fees 1,860,508 5,914,153 144,000 115,000 142,204 95,400 95,400 Indirect/Direct Cost Allocations Indirect Costs 7,796,474 Direct Cost Allocation (Fire) 419,300 801,903 8,598,377 419,300 Taxes- From Other Agencies Highway User Tax Local Transportation Assistance Fund 18,848,335 18,848,335 610,000 610,000 Other Financing Sources Utilities & Enterprises Water Service Charges 123,359,867 2,750,000 126,109,867 Non-Potable Water Service Charges 16,905,462 2,100,000 19,005,462 Water Reclamation Service Charges 51,636,995 2,650,000 54,286,995 Airport Fees 9,174,872 9,174,872 Refuse/Recycling 32,925,227 32,925,227 103 Table of Contents BUDGET BY FUND | Total Appropriation G e ne r a l Fund Description Special Revenue Funds Debt Service Fund Enterprise Funds Internal Service Funds Grants & Special Districts Fund Ca p i t a l Improvement Funds T ot al Internal Service Charges Fleet Management 29,953,690 29,953,690 Less Internal Service Funds Offset (70,352,900) (70,352,900) Self Insurance 55,385,106 55,385,106 PC Replacement 850,000 Subtotal 418, 946, 795 168, 560, 659 35, 656, 731 244, 270, 943 20, 129, 323 850,000 16, 257, 218 1, 150, 878, 158 2, 054, 699, 827 Other Activity Grant Anticipated 4,076,408 Grant Contingency 4,000,000 Subtotal - - - - - 8, 076, 408 4,076,408 4,000,000 - 8, 076, 408 Transfers In From Debt Service - From Enterprise Franchise Fees 9,422,892 From Operating 7,729,244 3,963,028 3,963,028 9,422,892 63,689 - From Debt Svc GO Bonds 35,354,537 From Debt Svc MPC Bonds 18,747,987 170,038 - 7,962,971 35,354,537 - 18,747,987 From General Fund 68,500,851 68,500,851 From Special Programs Fund 1,107,779 1,107,779 From Tourism Development Fund 8,703,120 8,703,120 From Transportation Sales Tax (0.20%) Fund 31,238,034 31,238,034 From Grants Fund 31,450 31,450 From Risk Management Fund 29,549 29,549 From Stormwater Fee Fund 6,054,632 6,054,632 From HURF 2,600,000 2,600,000 From Water & Water Reclamation Funds 51,866,024 51,866,024 From AWT 3,455,128 From RWDS 900,000 3,455,128 900,000 From Aviation Fund 498,536 498,536 From Solid Waste Fund 3,677,884 3,677,884 From Fleet Fund 8,636,120 8,636,120 Subtotal 17, 152, 136 63, 689 54, 102, 524 8, 318, 156 170, 038 - 182, 943, 979 262, 750, 522 Sources Total 436, 098, 931 168, 624, 348 89, 759, 255 252, 589, 099 20, 299, 361 24, 333, 626 1, 333, 822, 137 2, 325, 526, 757 104 Table of Contents BUDGET BY FUND | Total Appropriation Debt Service Fund Grants & Special Districts Fund Ca p i t a l Improvement Funds Special Revenue Funds Mayor and City Council 1,112,601 231,000 City Clerk 1,103,865 City Attorney 8,589,399 City Auditor 1,313,021 City Court 5,655,776 2,065,560 City Manager 2,228,807 - Public Works 28,329,379 30,059,836 29,009,258 Community and Economic Development 26,455,848 22,731,134 3,195,174 Public Safety - Fire 64,767,849 757,094 560,505 66,085,448 Public Safety - Police 144,301,971 3,942,212 1,055,111 149,299,294 City Treasurer 12,585,220 - - 16,222,198 Community Services 50,821,650 7,533,096 13,206,296 71,561,042 Administrative Services 25,956,820 18,800 Description Enterprise Funds Internal Service Funds G e ne r a l Fund T ot al Expenditures - 1,343,601 - 26,149,131 1,103,865 17,559,732 1,313,021 7,721,336 22,790,188 3,636,978 737,338 Water Resources 865,128 3,093,935 - 110,188,661 - 52,382,156 40,038,752 66,751,710 101,204,788 101,204,788 Citywide Indirect Cost Allocation 7,796,475 7,796,475 Department Indirect Cost 801,903 801,903 Citywide Direct Cost Allocation 419,300 Class and Comp Study 6,818,554 266,840 1,070,459 419,300 181,900 8,337,753 Leave Accrual Payments / Parental Leave 2,813,988 210,684 752,807 114,441 3,891,920 Savings from Vacant Positions (9,000,000) (360,000) (1,542,100) (300,000) (11,202,100) - - 392,600 1,105,014 44,071 117,985 10,219 1,277,289 Utilities Vacation Trade 392,600 Special Districts 578,708 Less Internal Service Funds Offset 578,708 (70,352,900) Subtotal 374, 959, 762 67, 500, 327 452,103 75,924 - 147, 592, 965 10, 042, 332 (70,352,900) 16, 265, 748 - 616, 361, 134 Debt Service Contracts Payable 528,027 GO Debt Service - Non Preserve 37,356,731 37,356,731 GO Debt Service - Preserve 35,354,537 35,354,537 MPC Excise Debt 18,747,986 18,747,986 MPC Bonds Debt Service-Sewer 7,516,900 7,516,900 MPC Bonds Debt Service-Water 21,029,078 21,029,078 MPC Bonds Debt Svc - Airport 1,722,244 1,722,244 Future Issuance Solid Waste 430,715 Subtotal 452, 103 75, 924 91, 459, 254 30, 698, 937 430,715 - - - 122, 686, 218 Community Facilities 144,756,253 144,756,253 Drainage/Flood Control 71,016,074 71,016,074 Public Safety 100,572,421 100,572,421 Service Facilities 136,993,875 136,993,875 Transportation 427,722,748 427,722,748 Preservation 38,071,873 38,071,873 Water Management 449,796,541 449,796,541 1, 368, 929, 785 1, 368, 929, 785 Capi t al Subtotal - - - - - - 105 Table of Contents BUDGET BY FUND | Total Appropriation G e ne r a l Fund Description Special Revenue Funds Debt Service Fund Enterprise Funds Internal Service Funds Grants & Special Districts Fund Ca p i t a l Improvement Funds T ot al Other Activity Emergency Reserve 18,770,593 18,770,593 General Plan Initiatives 15,000,000 15,000,000 Innovation Initiatives 500,000 Operating Contingency 15,000,000 3,000,000 5,600,000 8,791,193 32,391,193 Operating Reserve 75,082,373 3,230,530 33,098,535 25,983,062 137,394,500 PSPRS Pension Liabilities 82,372,515 500,000 82,372,515 Grant Anticipated 4,076,408 Grant Contingency 4,000,000 4,076,408 8,600,000 1,003,500 12,600,000 Debt Service Reserve 38,849,700 Restricted for Capital 92,236,093 39,853,200 92,236,093 Appropriation Contingency 1,500,000 1,500,000 Destination Marketing 6,859,883 6,859,883 GO Debt Service Reserve - Non Preserve 1,913,394 Debt Stabilization Reserve 5,055,081 - 1,913,394 5,055,081 General Fund Contingency 7,500,000 7,500,000 Transportation 0.2% Sales Tax Contingency 3,000,000 3,000,000 CIP Stormwater Utility Bill Fee Contingency 1,000,000 1,000,000 Old Town Special Improvements Contingency 3,200,000 3,200,000 Greater Airpark Special Improvements Contingency 2,000,000 Water & WasteWater Asset Replacement Reserve 44,210,907 Water Drought Reserve 5,000,000 2,000,000 44,210,907 5,000,000 Water Rates Contingency 5,000,000 5,000,000 Sewer Rates Contingency 4,000,000 4,000,000 Fleet Replacement Reserve 1,890,800 Future Capital Replacement 5,442,139 1,890,800 5,442,139 Aviation Funds Contingency 450,000 IBNR Reserve 2,812,827 Premium Stabilization Reserve 3,377,725 3,377,725 Connectivity Initiative Contingency Subtotal 450,000 2,812,827 16,971,959 16,971,959 206, 725, 481 145, 676, 206 6, 968, 475 96, 245, 881 40, 964, 807 8, 076, 408 51, 721, 959 556, 379, 217 582, 137, 346 213, 252, 457 98, 427, 729 274, 537, 783 51, 007, 139 24, 342, 156 1, 420, 651, 744 2, 664, 356, 354 To CIP 53,659,834 43,377,299 51,949,584 8,533,883 31,450 To CIP Construction Sales Tax 6,628,103 To CIP Excess Interest 8,212,914 TOTAL BUDGET Transfers Out To CIP Stormwater To Debt Svc MPC Bonds To Operating 6,628,103 8,212,914 - 6,054,632 12,337,084 6,410,903 180,038 7,717,073 To CIP Technology 6,054,632 - - 18,747,987 7,897,111 271,634 To Debt Svc GO Bonds 157,552,050 3,192,860 131,786 - 3,596,280 35,354,537 35,354,537 To AWT 3,455,128 3,455,128 To Franchise Fees 9,422,892 9,422,892 To Other 65,860 65,860 To Water & Water Reclamation Funds 4,863,028 To Solid Waste Fund Subtotal 81, 017, 973 99, 186, 078 - 68, 086, 324 4,863,028 900,000 900,000 8, 665, 669 31, 450 5, 763, 028 262, 750, 522 Uses Total 663, 155, 319 312, 438, 535 98, 427, 729 342, 624, 107 59, 672, 808 24, 373, 606 1, 426, 414, 772 2, 927, 106, 876 Sources Over/(Under) Uses (a) (227, 056, 388) (143, 814, 187) (8, 668, 474) (90, 035, 008) (39, 373, 447) (39, 980) (92, 592, 635) (601, 580, 119) Ending Fund Balance (a) 15, 100, 000 44, 329, 453 - 7, 849, 825 18, 430, 991 - 277, 046, 034 362, 756, 303 Ending Fund Balance (b) 221, 825, 481 190, 005, 659 6, 968, 475 104, 095, 706 59, 395, 798 8, 076, 408 328, 767, 993 919, 135, 520 (a) Includes use of reserve appropriations. (b) Does not include use of reserve appropriations. 106 Table of Contents BUDGET BY FUND | General Fund FUND PURPOSE The General Fund exists to account for the activity associated with traditional local government services such as police, fire, parks and recreation, planning and economic development, and general city administration. Under Arizona State law, each city and town must maintain a General Fund. The General Fund is the largest operating fund, includes the most diverse operations and because its use is unrestricted is typically the fund of most interest and significance to citizens. General Fund Sources (% to Total) $436.1 Million General Fund Uses (% to Total) $456.4 Million Rounding differences may occur. 107 Table of Contents BUDGET BY FUND | General Fund Summary A c t u al 2 0 2 1 /2 2 A do p t e d 2 0 2 2 /2 3 F o r e c as t 2 0 2 2 /2 3 A do p t e d 2 0 2 3 /2 4 3,000,000 42,456,278 114,085,073 14,600,000 500,000 174, 641, 351 16,377,415 15,000,000 500,000 10,000,000 65,509,660 65,389,374 14,600,000 500,000 187, 876, 449 16,377,415 15,000,000 500,000 10,000,000 65,609,660 93,473,623 14,600,000 500,000 216, 060, 698 16,362,003 15,000,000 500,000 15,000,000 65,448,013 114,746,372 14,600,000 500,000 242, 156, 388 165,535,064 16,288,477 9,092,778 3,824,704 955,857 227,692 154,865,753 15,246,585 8,454,833 3,800,000 946,580 220,000 173,637,948 17,105,945 8,454,833 3,800,000 946,580 220,000 166,134,814 16,353,065 9,106,540 3,700,000 960,198 200,000 32,138,234 34,246,548 12,081,433 46,439,631 35,088,377 12,282,914 46,050,622 36,088,377 11,742,466 65,098,126 36,543,806 12,436,288 34,584,456 35,885,125 35,885,125 37,177,572 20,292,645 18,089,810 19,330,647 20,400,907 6,125,988 4,819,176 3,834,698 1,770,852 5,405,782 3,960,794 4,327,431 1,504,340 5,555,782 3,960,794 3,846,431 1,467,502 5,929,574 5,427,428 4,168,669 1,006,918 4,580,419 1,867,140 2,328,461 4,720,736 1,788,516 2,266,364 4,720,736 2,713,516 2,266,364 5,205,367 2,802,228 2,736,729 6,793,734 423,680 6,755,168 446,810 6,755,168 446,810 7,796,474 419,300 3,325,601 1,935,739 5,384,223 8,212,914 3,999,375 2,942,388 261,598 130,751 115,931 4,165,213 2,590,337 287,409 137,098 19,260 4,165,213 2,590,337 287,409 137,098 19,260 4,053,645 2,641,329 263,700 144,000 27,204 20,527,709 - 21,159,834 - B e g i n n i n g F u n d B al an c e Emergency Reserve (a) General Plan Initiatives (b) Innovation Initiatives (c) Operating Contingency (d) Operating Reserve (e) PSPRS Pension Liabilities (f) Cavasson Infrastructure Reimbursement (g) Undesignated, Unreserved Fund Balance T o t al B e g i n n i n g F u n d B al an c e R e ve nue s T ax e s - L o c al Sales Tax Sales Tax - Public Safety (0.10%) Electric & Gas Franchise Cable TV License Fee Stormwater Fee Salt River Project In Lieu S t at e S h ar e d R e v e n u e s State Shared Income Tax State Shared Sales Tax Auto Lieu Tax P r o p e r t y T ax Property Tax B u i l d i n g P e r m i t F e e s & Ch ar g e s Building Permit Fees & Charges Ch ar g e s F o r S e r v i c e / O t h e r Westworld Equestrian Facility Fees Property Rental Intergovernmental Miscellaneous Li c e n se Pe r m i t s & F e e s Recreation Fees Business & Liquor Licenses Fire Charges For Services I n d i r e c t / D i r e c t Co s t A l l o c at i o n s Indirect Costs Direct Cost Allocation (Fire) I n t e r e s t E ar n i n g s Interest Earnings(h) F i ne s F e e s & F o r f e i tur e s Court Fines Photo Radar Parking Fines Jail Dormitory Library O the r R e ve nue Miscellaneous(i) G aap GAAP Adjustment(j) Subtotal T r an s f e r s I n CIP Enterprise Franchise Fees Special Revenue/Enterprise Funds Subtotal 303,829 - - - 393, 419, 217 371, 630, 605 418, 739, 020 418, 946, 795 3,774,819 8,509,370 5,876,200 400,000 8,868,936 6,781,053 400,000 8,868,936 10,762,018 9,422,892 7,729,244 18, 160, 389 16, 049, 989 20, 030, 954 17, 152, 136 T o t al S o u r c e s 411, 579, 606 387, 680, 594 438, 769, 974 436, 098, 931 (a) Reserve created in FY 2022/23 per Financial Policy No.2.02 to cover for unexpected emergencies and events where immediate action must be taken in the best interest of the city's residents and business owners. (b) Designation created in FY 2022/23 to support the implementation of the new General Plan which was approved by voters in November 2021. (c) Designation created in FY 2022/23 to support projects that benefit the community and support organizational goals and City Council initiatives. (d) FY 2023/24, Operating Contingency increased to cover any potential Public Safety - Fire Certificate of Necessity (CON) costs. (e) Beginning in FY 2022/23, Operating Reserve was increased from 10 percent to 20 percent of operating uses, excluding transfers out. (f) Designation is to address the Public Safety Personnel Retirement System (PSPRS) unfunded liability. FY 2021/22 PSPRS Net Pension Liabilities are $25.2 million for Public Safety - Fire and $156.8 million for Public Safety - Police. FY 2023/24 includes a $10.0 million payment to PSPRS for Public Safety - Police to pay down the unfunded liability. (g) Designation created for the Cavasson Development Project and the eligible infrastructure reimbursements associated with milestones achieved in phases one, two and three of the development agreement. (h) Increase in Interest Earnings is due to rising interest rates. (i) One-time proceeds from Museum Square and 94th Street and Bell Road land sales in FY 2021/22 and FY 2022/23, respectively. (j) Adjustment to align with fund balance calculation used in the Annual Financial Report. 108 Table of Contents BUDGET BY FUND | General Fund Summary A c t u al 2 0 2 1 /2 2 A do p t e d 2 0 2 2 /2 3 F o r e c as t 2 0 2 2 /2 3 A do p t e d 2 0 2 3 /2 4 869,042 7,311,081 1,098,648 1,252,389 4,879,291 1,478,404 9,482,235 19,540,261 26,263,085 41,568,777 53,586,556 137,677,002 23,332,573 - 957,862 8,301,331 1,289,532 1,287,756 5,350,199 1,966,670 11,344,952 22,828,349 26,080,389 47,472,569 55,619,254 127,854,029 24,355,438 2,250,000 (7,350,000) 1,298,293 952,871 8,281,675 1,314,830 1,288,658 5,054,632 2,014,509 10,829,393 22,035,767 25,315,677 45,559,891 53,883,036 126,024,172 20,817,589 2,435,933 3,488,010 498,936 (2,986,828) - 1,112,601 8,589,399 1,313,021 1,103,865 5,655,776 2,228,807 12,585,220 25,956,820 26,455,848 50,821,650 64,767,849 144,301,971 28,329,379 6,818,554 2,813,988 (9,000,000) 1,105,014 Subtotal 328, 339, 344 330, 906, 623 326, 808, 751 374, 959, 762 395,986 431,315 431,315 452,103 Subtotal 395, 986 431, 315 431, 315 452, 103 328,735,330 331,337,938 327,240,066 375,411,865 16,143,847 3,220,050 2,325,601 4,683,569 13,965,338 1,086,523 60,662,704 6,446,639 1,935,739 12,240,000 147,874 60,662,704 6,995,113 5,384,223 12,244,304 147,874 53,659,834 6,628,103 8,212,914 12,337,084 180,038 E x p e n di t u r e s Mayor and City Council City Attorney City Auditor City Clerk City Court City Manager City Treasurer Administrative Services Community and Economic Development Community Services Public Safety - Fire(k) Public Safety - Police (k)(l) Public Works Fuel and Maint and Repair (m) Operating Impacts Utilities (m) Class and Comp Study (n) Leave Accrual Payments/Parental Leave Savings from Vacant Positions Vacation Trade D e bt S e r v i c e Contracts Payable TO TA L O PE R A TI NG B U D G E T T r an s f e r s O u t CIP CIP Construction Sales Tax CIP Excess Interest CIP Food Tax (o) Debt Svc MPC Bonds Operating 41, 424, 929 81, 432, 956 85, 434, 218 81, 017, 973 T o t al U s e s Subtotal 370, 160, 259 412, 770, 894 412, 674, 284 456, 429, 838 S o u r c e s O v e r /( U n de r ) U s e s 41, 419, 347 ( 25, 090, 300) 26, 095, 690 ( 20, 330, 907) 15,948,942 32,873,533 149,838,223 16,900,000 500,000 216, 060, 698 16,566,897 15,000,000 500,000 10,000,000 66,267,588 39,351,664 14,600,000 500,000 162, 786, 149 16,362,003 15,000,000 500,000 8,954,872 65,448,013 120,791,500 14,600,000 500,000 242, 156, 388 18,770,593 15,000,000 500,000 15,000,000 75,082,373 82,372,515 14,600,000 500,000 221, 825, 481 E n d i n g F u n d B al an c e Emergency Reserve(a) General Plan Initiatives(b) Innovation Initiatives(c) Operating Contingency (d) Operating Reserve (e) PSPRS Pension Liabilities(f) Cavasson Infrastructure Reimbursement(g) Undesignated, Unreserved Fund Balance T o t al E n d i n g F u n d B al an c e (a) Reserve created in FY 2022/23 per Financial Policy No.2.02 to cover for unexpected emergencies and events where immediate action must be taken in the best interest of the city's residents and business owners. (b) Designation created in FY 2022/23 to support the implementation of the new General Plan which was approved by voters in November 2021. (c) Designation created in FY 2022/23 to support projects that benefit the community and support organizational goals and City Council initiatives. (d) FY 2023/24, Operating Contingency increased to cover any potential Public Safety - Fire Certificate of Necessity (CON) costs. (e) Beginning in FY 2022/23, Operating Reserve was increased from 10 percent to 20 percent of operating uses, excluding transfers out. (f) Designation is to address the Public Safety Personnel Retirement System (PSPRS) unfunded liability. FY 2021/22 PSPRS Net Pension Liabilities are $25.2 million for Public Safety - Fire and $156.8 million for Public Safety - Police. FY 2023/24 includes a $10.0 million payment to PSPRS for Public Safety - Police to pay down the unfunded liability. (g) Designation created for the Cavasson Development Project and the eligible infrastructure reimbursements associated with milestones achieved in phases one, two and three of the development agreement. (k) Scottsdale was awarded $29.2 million of the American Rescue Plan Act (ARPA), an economic stimulus bill signed into law by the President in March 2021. Public Safety - Fire and Police payroll expenses were transferred to the ARPA Fund (grant) in FY 2021/22 ($14.6 million) and FY 2022/2023 ($14.6 million); thereby freeing up General Fund dollars. (l) FY 2023/24 includes a $10.0 million payment to PSPRS for Public Safety - Police to pay down the unfunded liability. (m) Initially budgeted at the division level. At the start of the fiscal year the budget will move to a macro level and then will be transferred back to the divisions monthly as expenses occur. (n) Anticipated cost to implement the Classification and Compensation Study recommendations. (o) FY 2021/22 was the final year of transferring sales tax on food for home consumption to the CIP. 109 Table of Contents BUDGET BY FUND | General Fund Five-Year Financial Forecast A do p t e d 2 0 2 3 /2 4 F o r e c as t 2 0 2 4 /2 5 F o r e c as t 2 0 2 5 /2 6 F o r e c as t 2 0 2 6 /2 7 F o r e c as t 2 0 2 7 /2 8 16,362,003 15,000,000 500,000 15,000,000 65,448,013 114,746,372 14,600,000 500,000 242, 156, 388 18,770,593 15,000,000 500,000 15,000,000 75,082,373 82,372,515 14,600,000 500,000 221, 825, 481 18,991,120 500,000 10,000,000 75,964,480 125,312,381 14,600,000 500,000 245, 867, 981 20,292,805 500,000 10,000,000 81,171,220 118,784,956 7,300,000 500,000 238, 548, 981 20,772,975 500,000 10,000,000 83,091,900 109,567,106 7,300,000 500,000 231, 731, 981 166,134,814 16,353,065 9,106,540 3,700,000 960,198 200,000 168,601,000 16,597,100 9,106,600 3,700,000 965,000 200,000 174,642,000 17,198,600 9,106,600 3,600,000 969,800 200,000 179,949,400 17,726,600 9,106,600 3,600,000 974,700 200,000 185,439,500 18,273,100 9,106,600 3,600,000 979,500 200,000 65,098,126 36,543,806 12,436,288 56,911,500 37,092,000 12,747,200 40,854,000 38,427,300 13,257,100 42,342,900 39,580,100 13,522,200 43,888,200 40,807,100 13,792,700 37,177,572 38,323,700 39,505,100 40,722,900 41,978,200 20,400,907 20,524,700 20,652,300 20,773,400 20,894,700 5,929,574 5,427,428 4,168,669 1,006,918 5,974,000 5,530,500 4,190,900 1,006,500 6,018,700 5,571,100 4,238,700 1,009,400 6,064,000 5,613,000 4,287,300 1,012,100 6,109,600 5,655,800 4,337,000 1,014,900 5,205,367 2,802,228 2,736,729 5,308,200 2,858,500 2,465,800 5,412,900 2,915,500 2,495,400 5,520,200 2,972,900 1,525,900 5,467,600 3,031,200 1,075,200 7,796,474 419,300 8,186,300 440,300 8,595,600 462,300 9,025,400 485,400 9,476,700 509,700 8,212,914 9,342,800 10,521,300 8,135,300 7,907,000 4,053,645 2,641,329 263,700 144,000 27,204 4,096,000 2,667,700 265,600 146,900 27,700 4,143,900 2,694,400 268,000 149,800 28,200 4,191,600 2,721,300 269,500 152,800 28,900 4,227,800 2,748,600 271,500 155,900 29,400 - - - - - B e g i n n i n g F u n d B al an c e Emergency Reserve (a) General Plan Initiatives (b) Innovation Initiatives (c) Operating Contingency (d) Operating Reserve (e) PSPRS Pension Liabilities (f) Cavasson Infrastructure Reimbursement (g) Undesignated, Unreserved Fund Balance T o t al B e g i n n i n g F u n d B al an c e R e ve nue s T ax e s - L o c al Sales Tax Sales Tax - Public Safety (0.10%) Electric & Gas Franchise Cable TV License Fee Stormwater Fee Salt River Project In Lieu S t at e S h ar e d R e v e n u e s State Shared Income Tax State Shared Sales Tax Auto Lieu Tax P r o p e r t y T ax Property Tax B u i l d i n g P e r m i t F e e s & Ch ar g e s Building Permit Fees & Charges Ch ar g e s F o r S e r v i c e / O t h e r Westworld Equestrian Facility Fees Property Rental Intergovernmental Miscellaneous Li c e n se Pe r m i t s & F e e s Recreation Fees Business & Liquor Licenses Fire Charges For Services I n d i r e c t / D i r e c t Co s t A l l o c at i o n s Indirect Costs Direct Cost Allocation (Fire) I n t e r e s t E ar n i n g s Interest Earnings(h) F i ne s F e e s & F o r f e i tur e s Court Fines Photo Radar Parking Fines Jail Dormitory Library O the r R e ve nue Miscellaneous(i) G aap GAAP Adjustment(j) Subtotal T r an s f e r s I n CIP Enterprise Franchise Fees Special Revenue/Enterprise Funds Subtotal - - - - - 418, 946, 795 417, 276, 500 412, 938, 000 420, 504, 400 430, 977, 500 9,422,892 7,729,244 9,750,400 5,596,800 10,088,700 5,703,000 10,439,500 5,812,000 10,803,600 5,940,500 17, 152, 136 15, 347, 200 15, 791, 700 16, 251, 500 16, 744, 100 T o t al S o u r c e s 436, 098, 931 432, 623, 700 428, 729, 700 436, 755, 900 447, 721, 600 (a) Reserve created in FY 2022/23 per Financial Policy No.2.02 to cover for unexpected emergencies and events where immediate action must be taken in the best interest of the city's residents and business owners. (b) Designation created in FY 2022/23 to support the implementation of the new General Plan which was approved by voters in November 2021. (c) Designation created in FY 2022/23 to support projects that benefit the community and support organizational goals and City Council initiatives. (d) FY 2023/24, Operating Contingency increased to cover any potential Public Safety - Fire Certificate of Necessity (CON) costs. (e) Beginning in FY 2022/23, Operating Reserve was increased from 10 percent to 20 percent of operating uses, excluding transfers out. (f) Designation is to address the Public Safety Personnel Retirement System (PSPRS) unfunded liability. FY 2021/22 PSPRS Net Pension Liabilities are $25.2 million for Public Safety - Fire and $156.8 million for Public Safety - Police. FY 2023/24 includes a $10.0 million payment to PSPRS for Public Safety - Police to pay down the unfunded liability. (g) Designation created for the Cavasson Development Project and the eligible infrastructure reimbursements associated with milestones achieved in phases one, two and three of the development agreement. (h) Increase in Interest Earnings is due to rising interest rates. (i) One-time proceeds from Museum Square and 94th Street and Bell Road land sales in FY 2021/22 and FY 2022/23, respectively. (j) Adjustment to align with fund balance calculation used in the Annual Financial Report. 110 Table of Contents BUDGET BY FUND | General Fund Five-Year Financial Forecast A do p t e d 2 0 2 3 /2 4 F o r e c as t 2 0 2 4 /2 5 F o r e c as t 2 0 2 5 /2 6 F o r e c as t 2 0 2 6 /2 7 F o r e c as t 2 0 2 7 /2 8 1,112,601 8,589,399 1,313,021 1,103,865 5,655,776 2,228,807 12,585,220 25,956,820 26,455,848 50,821,650 64,767,849 144,301,971 28,329,379 6,818,554 2,813,988 (9,000,000) 1,105,014 1,156,600 8,920,400 1,371,700 1,135,700 6,040,900 2,308,600 12,956,400 26,191,500 25,664,400 50,838,800 65,944,600 141,960,200 28,634,500 5,399,100 6,972,700 2,942,400 (9,090,000) - 1,198,200 9,248,800 1,420,800 1,185,500 6,421,500 2,392,400 13,469,500 27,084,100 33,694,700 52,842,800 69,015,400 147,642,300 29,734,000 6,607,000 7,112,100 5,470,900 (9,180,900) - 1,242,600 9,577,900 1,472,000 1,229,000 6,760,700 2,466,200 13,988,800 28,032,300 27,329,400 54,915,100 72,138,300 153,207,900 30,878,900 8,245,000 7,252,200 5,480,200 (9,272,700) - 1,323,500 10,228,500 1,574,700 1,306,300 7,360,800 2,626,200 14,650,500 29,634,800 28,731,100 58,459,700 77,364,000 163,469,400 32,346,400 7,688,100 7,397,300 3,342,600 (9,365,400) - Subtotal 374, 959, 762 379, 348, 500 405, 359, 100 414, 943, 800 438, 138, 500 452,103 473,900 497,000 515,700 530,800 Subtotal 452, 103 473, 900 497, 000 515, 700 530, 800 375,411,865 379,822,400 405,856,100 415,459,500 438,669,300 53,659,834 6,628,103 8,212,914 12,337,084 180,038 6,747,400 9,342,800 12,464,100 204,500 6,868,900 10,521,300 12,582,800 219,600 6,917,000 8,135,300 12,825,600 235,500 6,965,400 7,907,000 13,145,500 252,900 E x p e n di t u r e s Mayor and City Council City Attorney City Auditor City Clerk City Court City Manager City Treasurer Administrative Services Community and Economic Development Community Services Public Safety - Fire(k) Public Safety - Police (k)(l) Public Works Fuel and Maint and Repair (m) Operating Impacts Utilities (m) Class and Comp Study (n) Leave Accrual Payments/Parental Leave Savings from Vacant Positions Vacation Trade D e bt S e r v i c e Contracts Payable TO TA L O PE R A TI NG B U D G E T T r an s f e r s O u t CIP CIP Construction Sales Tax CIP Excess Interest CIP Food Tax (o) Debt Svc MPC Bonds Operating 81, 017, 973 28, 758, 800 30, 192, 600 28, 113, 400 28, 270, 800 T o t al U s e s Subtotal 456, 429, 838 408, 581, 200 436, 048, 700 443, 572, 900 466, 940, 100 S o u r c e s O v e r /( U n de r ) U s e s ( 20, 330, 907) 24, 042, 500 ( 7, 319, 000) ( 6, 817, 000) ( 19, 218, 500) 18,770,593 15,000,000 500,000 15,000,000 75,082,373 82,372,515 14,600,000 500,000 221, 825, 481 18,991,120 500,000 10,000,000 75,964,480 125,312,381 14,600,000 500,000 245, 867, 981 20,292,805 500,000 10,000,000 81,171,220 118,784,956 7,300,000 500,000 238, 548, 981 20,772,975 500,000 10,000,000 83,091,900 109,567,106 7,300,000 500,000 231, 731, 981 21,933,465 500,000 10,000,000 87,733,860 84,546,156 7,300,000 500,000 212, 513, 481 E n d i n g F u n d B al an c e Emergency Reserve(a) General Plan Initiatives(b) Innovation Initiatives(c) Operating Contingency (d) Operating Reserve (e) PSPRS Pension Liabilities(f) Cavasson Infrastructure Reimbursement(g) Undesignated, Unreserved Fund Balance T o t al E n d i n g F u n d B al an c e (a) Reserve created in FY 2022/23 per Financial Policy No.2.02 to cover for unexpected emergencies and events where immediate action must be taken in the best interest of the city's residents and business owners. (b) Designation created in FY 2022/23 to support the implementation of the new General Plan which was approved by voters in November 2021. (c) Designation created in FY 2022/23 to support projects that benefit the community and support organizational goals and City Council initiatives. (d) FY 2023/24, Operating Contingency increased to cover any potential Public Safety - Fire Certificate of Necessity (CON) costs. (e) Beginning in FY 2022/23, Operating Reserve was increased from 10 percent to 20 percent of operating uses, excluding transfers out. (f) Designation is to address the Public Safety Personnel Retirement System (PSPRS) unfunded liability. FY 2021/22 PSPRS Net Pension Liabilities are $25.2 million for Public Safety - Fire and $156.8 million for Public Safety - Police. FY 2023/24 includes a $10.0 million payment to PSPRS for Public Safety - Police to pay down the unfunded liability. (g) Designation created for the Cavasson Development Project and the eligible infrastructure reimbursements associated with milestones achieved in phases one, two and three of the development agreement. (k) Scottsdale was awarded $29.2 million of the American Rescue Plan Act (ARPA), an economic stimulus bill signed into law by the President in March 2021. Public Safety - Fire and Police payroll expenses were transferred to the ARPA Fund (grant) in FY 2021/22 ($14.6 million) and FY 2022/2023 ($14.6 million); thereby freeing up General Fund dollars. (l) FY 2023/24 includes a $10.0 million payment to PSPRS for Public Safety - Police to pay down the unfunded liability. (m) Initially budgeted at the division level. At the start of the fiscal year the budget will move to a macro level and then will be transferred back to the divisions monthly as expenses occur. (n) Anticipated cost to implement the Classification and Compensation Study recommendations. (o) FY 2021/22 was the final year of transferring sales tax on food for home consumption to the CIP. 111 Table of Contents BUDGET BY FUND | General Fund GENERAL FUND SOURCES General Fund Sources include revenues and transfers in from other funds such as the Special Programs, Tourism Development, and Water and Water Reclamation funds. For FY 2023/24 estimated General Fund revenues and transfers in equal $436.1 million, an increase of approximately $48.4 million, or 12.5 percent, from the FY 2022/23 adopted budget of $387.7 million. The increase is primarily due to rising inflation and continued strong consumer spending reflected mostly in Sales Tax revenue, an adjustment in the state shared income distribution rate increase, and high interest rates. The General Fund Sources that are used for operating budget and debt service, and that contribute to the Capital Improvement Plan are identified in this section. SALES TAX (1.00%) FY 2019/20 to FY 2025/26 (in millions) Sales Tax (1.00%) represents the 1.00 percent General Fund share of the city’s total 1.75 percent Sales Tax that is available for any municipal purpose. This revenue also includes sales tax application and penalty fees. Sales Tax (1.00%) is the General Fund’s largest revenue source, which is used to pay for general governmental operations as well as the repayment of Municipal Property Corporation (MPC) Bonds. The FY 2023/24 adopted budget is $166.1 million, which is approximately $11.2 million higher than the FY 2022/23 adopted budget of $154.9 million due to rising inflation and continued strong consumer spending. Staff forecast the Sales Tax collections by business category to arrive at more precise projections. The revenue forecasts for each business category use various assumptions that combine historical elements as well as emerging fiscal, economic and legal considerations. SALES TAX - PUBLIC SAFETY (0.10%) FY 2019/20 to FY 2025/26 (in millions) Sales Tax - Public Safety (0.10%) represents the 0.10 percent of the total 1.75 percent sales tax rate and is dedicated exclusively to public safety. The Sales Tax - Public Safety (0.10%) adopted budget for FY 2023/24 is $16.4 million, which is a $1.2 million increase from the FY 2022/23 adopted budget of $15.2 million due to rising inflation and continued strong consumer spending. This designated sales tax covers 7.8 percent of the FY 2023/24 Public Safety Police and Fire General Fund budgets combined. *36)'%78 112 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund ELECTRIC & GAS FRANCHISE FY 2019/20 to FY 2025/26 (in millions) Electric & Gas Franchise includes franchise taxes charged on revenues from utility companies to use city right-of-ways and in-lieu property tax for municipal utilities. The FY 2023/24 adopted budget for Electric & Gas Franchise totals $9.1 million, which is an increase of approximately $0.6 million from the FY 2022/23 adopted budget, mostly explained by higher electric usage. CABLE TV LICENSE FEE FY 2019/20 to FY 2025/26 (in millions) Cable TV License Fee is a franchise tax charged on revenues from cable companies for use of city right-of-ways. The FY 2023/24 adopted budget is $3.7 million, which is a decrease of $0.1 million from the FY 2022/23 adopted budget, mostly due to the anticipated decrease in the number of cable TV customers as a result of the growing demand for streaming services. STORMWATER FEE FY 2019/20 to FY 2025/26 (in millions) Stormwater Fee is a monthly charge to customers to help pay a portion of the city’s stormwater Management program costs. These costs are driven by unfunded federal mandates that require the city to operate under a National Pollution Discharge Elimination System (NPDES) permit and to address the quality of stormwater runoff. The FY 2023/24 adopted budget totals $1.0 million, which is an increase of approximately $0.1 million from the FY 2022/23 adopted budget. *36)'%78 &9(+)8 %'89%0*36)'%78 113 Table of Contents BUDGET BY FUND | General Fund SALT RIVER PROJECT IN LIEU FY 2019/20 to FY 2025/26 (in millions) Salt River Project In Lieu is franchise taxes charged to Salt River Project (SRP), a local utility provider, for the use of city right-of-ways and in-lieu property tax for municipal utilities. The FY 2023/24 adopted budget is $0.2 million, which remains flat compare to FY 2022/23 adopted budget. STATE SHARED INCOME TAX FY 2019/20 to FY 2025/26 (in millions) The formula for distribution of the State Shared Income Tax is based upon the relation of the city's population to the total incorporated state population according to the decennial census or population estimates of the U.S. Census Bureau. Cities and towns in Arizona are prohibited by law from levying a local income tax; however, 15 percent of the state income tax collections are shared with the cities and towns. Effective in FY 2023/24, the sharing percentage increases from 15 percent to 18 percent to help offset the impacts to local governments of the State instituting a flat income tax. There is a two-year lag between the time citizens report income to the state and when the state remits shared income tax revenues to cities and towns. Revenue from State Shared Income Tax is budgeted at $65.1 million for FY 2023/24, an increase of $18.7 million from the FY 2022/23 adopted budget of $46.4 million. The increase is mainly due to the impact of the three percent rate increase of state income tax distribution to cities and towns. *36)'%78 114 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund STATE SHARED SALES TAX FY 2019/20 to FY 2025/26 (in millions) The formula for distribution of State Shared Sales Tax is based upon the relation of the city's population to the total incorporated state population according to the decennial census or population estimates of the U.S. Census Bureau. Cities and towns share in a portion of the 5.60 percent sales tax collected by the State. The distribution base (shared portion) varies by category. For example, retail sales is 40 percent shared and 60 percent non-shared (retained by the State). Of the shared portion, 25 percent is returned to incorporated cities and towns, 40.51 percent is returned to counties, and 34.49 percent is returned to the state General Fund. The FY 2023/24 adopted budget is $36.5 million, which is an increase of $1.4 million compared to the FY 2022/23 adopted budget of $35.1 million, due rising inflation and continued strong consumer spending. AUTO LIEU TAX FY 2019/20 to FY 2025/26 (in millions) Auto Lieu Tax, also known as Vehicle License Tax, is part of the vehicle license fees collected by Maricopa County, but it is actually a state revenue source. Approximately 20 percent of the net revenues collected for the licensing of motor vehicles by the county are distributed back to incorporated cities and towns based on population in relation to the total incorporated population of the county. The only stipulation on the use of this revenue is that it must be spent on any municipal public purpose. The FY 2023/24 adopted budget is $12.4 million, an increase of approximately $0.1 million compared to the FY 2022/23 adopted budget. PROPERTY TAX FY 2019/20 to FY 2025/26 (in millions) Property Tax represents the primary portion of the Property Tax which is levied on the assessed value of all property within the city to help pay for general governmental operation costs. By Arizona State Statute, the primary property levy is limited to a two percent increase per year, plus an allowance for annexations and new construction. Primary property tax accounts for approximately nine percent of the total adopted FY 2023/24 General Fund sources. The FY 2023/24 adopted budget is $37.2 million, an increase of $1.3 million compared to the FY 2022/23 adopted budget, due to the two percent statutory allowable increase and new construction. The FY 2023/24 adopted primary property tax rate is $0.5150 cents per $100 of assessed valuation represents a $0.0180 cent increase from the FY 2022/23 rate. *36)'%78 &9(+)8 %'89%0*36)'%78 115 Table of Contents BUDGET BY FUND | General Fund BUILDING PERMIT FEES & CHARGES FY 2019/20 to FY 2025/26 (in millions) Building Permit Fees & Charges includes fees assessed to developers/builders that recover the cost of four primary functions: 1) reviewing/processing development applications; 2) plan review of construction documents; 3) the issuance of building, electrical, mechanical and plumbing permits; and 4) the inspection of buildings/structures in the construction phase. The FY 2023/24 adopted budget is $20.4 million, which is an increase of $2.3 million compared to the FY 2022/23 adopted budget mostly due to anticipated higher revenues from large development projects. WESTWORLD EQUESTRIAN FACILITY FEES FY 2019/20 to FY 2025/26 (in millions) WestWorld Equestrian Facility Fees includes revenue (general facility rental, concessions, parking fees, etc.) from events such as horse shows, auto auctions and car shows, consumer and home shows, as well as recreational vehicle (RV) space rental at WestWorld. The FY 2023/24 adopted budget is mostly based on future confirmed bookings, and it is estimated to be $5.9 million, which is an increase of approximately $0.5 million from the FY 2022/23 adopted budget, due to the increase in RV rental and feed/bedding sales. INTERGOVERNMENTAL FY 2019/20 to FY 2025/26 (in millions) Intergovernmental revenue sources include payments for School Resource Officers (SRO) from the Public Safety - Police Division to service local area schools, a Salt River PimaMaricopa Indian Community agreement for providing crime laboratory services. The FY 2023/24 adopted budgeted is $4.2 million, which is a slight decrease of $0.1 million from the FY 2022/23 adopted budget primarily due to a change on the recording of the vendor credit issued by the Maricopa County Library Assistance Program. *36)'%78 116 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund PROPERTY RENTAL FY 2019/20 to FY 2025/26 (in millions) Property Rental revenues are rental fees on facilities such as the Scottsdale Stadium, as well as funding received from the Tournament Players Club (TPC) for a percent of revenue on gross sales agreements. The FY 2023/24 adopted budget is estimated to be $5.4 million, which is an increase of $1.4 million from the FY 2022/23 adopted budget mostly due to aligning revenue anticipated from the TPC with prior year actuals, new TPC revenue from the seventh contract amendment, and increase in stadium usage fees. MISCELLANEOUS FY 2019/20 to FY 2025/26 (in millions) Miscellaneous revenue includes various revenues the city receives during any given year that are not attributable to one of the specific revenue categories noted previously, such as Other Sale of Property, Passport Fees, Copies of Materials,etc. The FY 2023/24 adopted budget is $1 million which is a decrease of 0.5 million from the FY 2022/23 adopted budget, primarily due to a required accounting change related to the subscription -based information technology agreements in the Public Safety - Police Division. Actual revenue in FY 2020/21 corresponds to a required accounting change related to subscription-based technology agreements. RECREATION FEES FY 2019/20 to FY 2025/26 (in millions) Recreation Fees includes revenue from various recreational programs, classes and entry fees. In accordance with the city’s adopted financial policies, recreation fees are reviewed periodically and adjusted as needed to meet cost recovery targets as approved by City Council. The FY 2023/24 adopted budget of $5.2 million is $0.5 million higher than the FY 2022/23 adopted budget of $4.7 million mostly due to higher anticipated revenues at the WestWorld Sports Complex and fee increase for recreational programs. *36)'%78 &9(+)8 %'89%0*36)'%78 117 Table of Contents BUDGET BY FUND | General Fund FIRE CHARGES FOR SERVICES FY 2019/20 to FY 2025/26 (in millions) Fire Charges for Services includes fees for the cost recovery of fire and medical standbys at special events, after-hours inspections, ambulance staffing, and medical enhancement costs associated with the ambulance agreement. In addition, the Public Safety - Fire Division collects fees for Cardiopulmonary Resuscitation (CPR) classes, permits and incident reports. The FY 2023/24 adopted budget is $2.7 million, which is approximately $0.4 million higher than the FY 2022/23 adopted budget, mostly due to reimbursement allowed in the ambulance contract for clinical improvements, and increase revenue from fire prevention services. BUSINESS & LIQUOR LICENSES FY 2019/20 to FY 2025/26 (in millions) Business & Liquor Licenses includes the licensing of business activity and associated fees for the licensure and regulation of specific activities. The FY 2023/24 adopted budget is $2.8 million, which is a $1.0 million increase when compared to the FY 2022/23 adopted budget. The increase is primarily due to the implementation of the Short Term Rental program that requires property operators to maintain special local licenses. INDIRECT COSTS FY 2019/20 to FY 2025/26 (in millions) Indirect Costs is payments for services provided by the General Fund to other operating areas within the city. These services include: Accounting, Human Resources, Information Technology, etc. The FY 2023/24 adopted budget for indirect cost is $7.8 million, which increased $1.0 million from the FY 2022/23 adopted budget primarily due to higher personnel costs. *36)'%78 118 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund DIRECT COST ALLOCATION (FIRE) FY 2019/20 to FY 2025/26 (in millions) Direct Cost Allocation (Fire) is the direct cost of fire services at the Scottsdale Airport. The FY 2023/24 adopted budget is $0.4 million, which remains flat when compared to the FY 2022/23 adopted budget. The revenue is received from the Aviation Fund. COURT FINES FY 2019/20 to FY 2025/26 (in millions) Court Fines is the General Fund portion of penalties or fees assessed by State Statute, City Ordinance or the Presiding Judge. Examples include: fines, a portion of the registration fee to attend Defensive Driving School, bonds forfeited to the city, and default fees. The other portions of the fines are included in the Special Programs Fund for Court Enhancement and the Judicial Collections Enhancement or remitted to the State of Arizona. The FY 2023/24 adopted budget is $4.1 million, which is $0.1 million lower than the FY 2022/23 adopted budget. PHOTO RADAR FY 2019/20 to FY 2025/26 (in millions) Photo Radar is the General Fund's portion of photo enforcement penalties as assessed by the Presiding Judge. Examples include: red light and speeding fines and a portion of the registration fee to attend Defensive Driving School. The other portions of the fines are included in the Special Programs Fund for Court Enhancement and Judicial Collections Enhancement or remitted to the State of Arizona. The FY 2023/24 adopted budget is $2.6 million, which remains flat from the FY 2022/23 adopted budget. Photo Radar revenue is offset by the costs to run the program. The use of photo radar by the Public Safety - Police Division is designed as a deterrent to unsafe driving and to modify driving habits, not as a revenue producer. *36)'%78 &9(+)8 %'89%0*36)'%78 119 Table of Contents BUDGET BY FUND | General Fund PARKING FINES FY 2019/20 to FY 2025/26 (in millions) Parking Fines are the General Fund portion of parking fees assessed per City Ordinance. The FY 2023/24 adopted budget is $0.3 million, which remains relatively flat from the FY 2022/23 adopted budget. The other portions of the fines are included in the Special Programs Fund for Court Enhancement and Judicial Collections Enhancement. JAIL DORMITORY FY 2019/20 to FY 2025/26 (in millions) The Jail Dormitory program, which allows offenders adjudicated outside of Scottsdale the opportunity to serve their sentence in the city’s jail, started operations in FY 2020/21 with a nightly fee of $250. The fee is comparable to the average of two fees set by the Maricopa County Sheriff's Office. The FY 2023/24 adopted revenue is $0.1 million which remains flat to the FY 2022/23 adopted budget. LIBRARY FY 2019/20 to FY 2025/26 (in millions) Library fees is revenue collected from meeting room rentals at any of the four library branches. Library fees used to include monies collected when library materials are lost, and/or are damaged, and revenue from the library shops at all four library branches. Late fees were eliminated in FY 2020/21. Beginning in FY 2022/23, the revenue related to library materials was moved to the Special Programs Fund. *36)'%78 120 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund INTEREST EARNINGS FY 2019/20 to FY 2025/26 (in millions) Interest Earnings are generated on idle General Fund cash balances throughout the year. This revenue is a function of the relationship between the city’s available cash balance and the interest rate. The city earns interest on funds through various investment vehicles in accordance with Arizona Revised Statutes and City Ordinance. The city’s investment policy stresses safety above yield. Interest earnings applicable to bond proceeds and the Capital Improvement Plan (CIP) accrue to the CIP budget and are not included in General Fund revenues. The FY 2023/24 adopted budget is $8.2 million, which an increase of $6.3 million from the FY 2022/23 adopted budget. The increase of interest earnings is due to rising interest rates. Per the Budget Governing Guidance, Appendix A of the Comprehensive Financial Policies, 100 percent of net interest income will be transferred to the General Fund CIP. TRANSFERS IN Transfers In is the authorized movement of cash or other resources from other funds. The FY 2023/24 General Fund adopted budget includes $17.2 million in Transfers In. TRANSFERS IN FY 2019/20 to FY 2025/26 (in millions) The FY 2023/24 adopted budget for Transfers In is $17.2 million and includes:1) $9.4 million from the Water and Water Reclamation Fund for the Enterprise Franchise Fees, which is five percent of Water Services and Water Reclamation Charges. The city charges all utility companies, including the city's Water and Water Reclamation Fund, for use of the rightof-ways and medians; 2) $0.1 million from the Water and Water Reclamation Fund to support grant writing services; and 3) a total of $7.6 million from the Tourism Development Fund: $3.8 million to comply with Financial Policy No.10.02 which indicates 12 percent of the transient lodging/bed tax revenues; $1.0 million one-time funding to support the AZ SR101 Public Art Wall Painting; $1.6 million per Resolution No.12267 to reimburse the General Fund for the purchase of land at WestWorld; $0.3 million to support the Short Term Rental Program and the Police Park Range Unit; and $0.9 million to support marketing efforts at WestWorld and the Scottsdale Stadium. *36)'%78 &9(+)8 %'89%0*36)'%78 121 Table of Contents BUDGET BY FUND | General Fund GENERAL FUND USES The General Fund uses are presented by the following divisions, additional non-divisional operating categories, debt service and transfers out. The increase in FY 2023/24 is mainly due to increases in Personnel Services and Contractual Services that include: 1) a FY 2023/24 Step Program for sworn personnel and a pay for performance and market adjustment to eligible employees; 2) increases in healthcare and retirement rates; 3) the anticipated cost to implement the recommendations from the Public Service Personnel Consultants Classification and Compensation study that will take place in late 2023; 4) the conclusion of the American Rescue Act funding that was used to assist with Police Uniformed Services; and 5) increases in contracts. The increase could have been higher, but it is offset by the reduction on the one-time Fire PSPRS liability paydown and the increase of estimated vacancy savings. MAYOR AND CITY COUNCIL FY 2019/20 to FY 2025/26 (in millions) Mayor and City Council includes the voter elected mayor, six Council members and operational support staff. The FY 2023/24 adopted budget is $1.1 million, an increase of $0.1 million from the FY 2022/23 adopted budget. CITY ATTORNEY FY 2019/20 to FY 2025/26 (in millions) The City Attorney is the city’s chief legal advisor and includes Civil, Prosecution, Risk Management and Victim Services departments. The FY 2023/24 adopted budget of $8.6 million is $0.3 million greater than the FY 2022/23 adopted budget of $8.3 million, mainly due to a pay for performance and market adjustment for eligible employees. *36)'%78 122 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund CITY AUDITOR FY 2019/20 to FY 2025/26 (in millions) The City Auditor conducts audits to independently evaluate the operational efficiency and effectiveness, compliance and accountability of the city. The FY 2023/24 adopted budget is $1.3 million and remains relatively flat when compared to the FY 2022/23 adopted budget. CITY CLERK FY 2019/20 to FY 2025/26 (in millions) The City Clerk conducts all local elections, gives notice of all City Council meetings, keeps the records of Council proceedings, administers the city's records management program, authenticates ordinances and resolutions, and provides administrative support to the Council. The Clerk's expenses fluctuate from year to year due to the cycle of elections. The City Clerk conducts and oversees the election process for municipal elections, referendums and initiatives within the city resulting in increased costs when these activities occur. At times elections are known, such as when Council seats are up for election. Other times, the elections may not be known such as when new General Obligation Bond proposals are taken to the voters. Therefore, some differences between budget to actuals may reflect this as was the case in FY 2019/20. Elections for Mayor and Council occur in the fall of even-numbered years and the City races appear on the State's Primary and General Election ballots. Cost savings are achieved by combining city elections on state ballots. The FY 2023/24 adopted budget of $1.1 million is $0.2 million lower than the FY 2022/23 adopted budget as FY 2023/24 is not an election year. However, there are certain costs related to the 2024 Mayor and Council election that will occur in FY 2023/24, such as advertising, Spanish translation, and informational pamphlet expenses. *36)'%78 &9(+)8 %'89%0*36)'%78 123 Table of Contents BUDGET BY FUND | General Fund CITY COURT FY 2019/20 to FY 2025/26 (in millions) The City Court is part of the integrated judicial system for Arizona and is the judicial branch for the city efficiently resolving civil traffic and misdemeanor violations, petty offenses, City Ordinance and code violations, and issuance of protective orders. There is a total of $5.7 million budgeted for FY 2023/24, which is an increase of $0.3 million when compared to the FY 2022/23 adopted budget mostly due to a pay for performance and market adjustment for eligible employees. CITY MANAGER FY 2019/20 to FY 2025/26 (in millions) The City Manager Division provides the organizational leadership necessary to successfully implement the policy direction of the City Council, communicate that direction to the organization, ensure the efficient, effective and economical delivery of services to citizens, build relationships with other governments, and foster diversity. Beginning in FY2023/24, the Communication and the Government Relations Departments were moved from the City Manager Division to the Administrative Services Division. The FY 2023/24 adopted budget of $2.2 million, an increase of $0.2 million from the FY 2022/23 adopted budget, is related to: 1) the addition of 2.00 FTE including an Assistant City Manager and an Assistant to the Assistant City Manager positions, and 2) a FY 2023/24 pay for performance and market adjustment for eligible employees and an increase in healthcare and retirement rates. *36)'%78 124 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund CITY TREASURER FY 2019/20 to FY 2025/26 (in millions) The City Treasurer, the city's chief financial officer, is responsible for providing City Council and management with timely financial reports as well as oversight of the Accounting, Budget, Finance, Business Services and Purchasing departments. The FY 2023/24 adopted budget of $12.6 million represents an increase of $1.3 million from the FY 2022/23 adopted budget. The increase is related to: 1) the addition of 4.00 FTE; 2) one-time contract worker services funding in the Purchasing Department to address the increased demand for services from city departments and a challenging labor market; 3) a FY 2023/24 pay for performance and market adjustment for eligible employees and an increase in healthcare and retirement rates; 4) increased contractual costs; and 5) one-time funding for professional services to support the Protect and Preserve Scottsdale Task Force. ADMINISTRATIVE SERVICES FY 2019/20 to FY 2025/26 (in millions) Administrative Services is comprised of the Communications, Government Relations, Human Resources, and the Information Technology departments. These departments are responsible for a wide breadth of activities including the accurate and timely sharing of information; creating and maintaining effective working relationships with other governments; training, recruiting and hiring employees as well as benefits and compensation; and the design, support and maintenance of a variety of citywide systems and hardware. The FY 2023/24 Administrative Services budget of $26.0 million is $3.2 million higher than the FY 2022/23 adopted budget of $22.8 million. The increase is due to: 1) the addition of 8.50 FTE; 2) a pay for performance and market adjustment for eligible employees; 3) funding to develop an Americans with Disabilities Act Transition Plan for the city to be incompliance with the Department of Justice, a Class and Compensation Study, and a comprehensive review of the city's diversity, equity and inclusion policies, procedures and programs; 4) higher software, memberships and lease costs; and 5) onetime funding for the Human Resources office reconfiguration to accommodate staffing within the existing space. *36)'%78 &9(+)8 %'89%0*36)'%78 125 Table of Contents BUDGET BY FUND | General Fund COMMUNITY AND ECONOMIC DEVELOPMENT FY 2019/20 to FY 2025/26 (in millions) Community and Economic Development works to preserve Scottsdale as a great community, offering value-added programs to stimulate the economy, sustain, revitalize, and build upon the community's unique lifestyle and character. The departments with General Fund budgets include Economic Development, Planning and Development Services, and Tourism and Events. The FY 2023/24 budget is $26.5 million, which is an increase of $0.4 million from the FY 2022/23 adopted budget primarily due to: 1) the net increase of 6.75 FTE; 2) a pay for performance and market adjustment for eligible employees; 3) contract increases; and 4) funding to purchase vehicles for new positions. The increase could have been higher, but it is offset by the removal of one-time funding for anticipated expenses related to the Super Bowl LVII. COMMUNITY SERVICES FY 2019/20 to FY 2025/26 (in millions) Community Services is comprised of six departments: Human Services, Library Systems, Parks & Recreation, Planning and Business Operations, Preserve Management and WestWorld. Each of these departments work to improve the quality of life of Scottsdale residents and visitors. The FY 2023/24 adopted budget of $50.8 million is a $3.3 million increase from the FY 2022/23 adopted budget. The increase is primarily related to: 1)) the addition of 6.27 FTE; 2) a FY 2023/24 pay for performance and market adjustment for eligible employees and an increase in healthcare and retirement rates; 3) additional funding for overtime hours to support tournaments and WestWorld events; 4) one-time funding to replace critical library infrastructure technology needs at Mustang and Civic Center Libraries; 5) one-time funding added to complete the Indian School Master Plan and begin the Cactus pool and Parks and Recreation master plans; 6) one-time funding added for tree pruning; 7) one-time funding added for the removal and disposal of organic waste material from WestWorld; 8) added funding for equipment rentals at WestWorld to allow for faster response to equipment replacements on the weekends; 9)) one-time expense authority to pay the PAC12 a share revenue received to host their inaugural Baseball Conference Tournament; 10) an increase for feed and bedding inventory; 11) 1) the rising costs of agriculture and horticulture suppl and aquatics chemicals; 12) one-time funding added for replacing the WestWorld Equidome footing; and 13) one-time funding for construction and equipment costs for WestWorld. *36)'%78 126 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund PUBLIC SAFETY - FIRE FY 2019/20 to FY 2025/26 (in millions) Public Safety - Fire responds to emergencies through timely, skilled and compassionate service including; fire, emergency medical, chemical, biological, nuclear and radiologic, wildland and technical rescue. The FY 2023/24 adopted budget of $64.8 million is $9.2 million higher than the FY 2022/23 adopted budget. The increase is due to: 1) a FY 2023/24 pay for performance and market adjustment for eligible employees and an increase in healthcare and retirement rates; 2) additional funding for overtime for special events, to provide backfill while sworn staff attend specialty teams training; 3) higher fleet maintenance, repair, and replacement costs as a result of inflation and supply chain challenges; 4) higher than anticipated fuel costs; and 5) various contract increases. PUBLIC SAFETY - POLICE FY 2019/20 to FY 2025/26 (in millions) Public Safety - Police provides efficient and effective police services to the community including: confronting crime, responding to citizens and visitors' concerns, and seeking citizen involvement and partnerships. The operating areas include Police Uniformed Services, Investigative Services, Operational Services and Office of the Police Chief. The FY 2023/24 adopted budget of $144.3 million is $16.4 million higher than the FY 2022/23 adopted budget of $127.9 million. The increase is primarily related to: 1) the addition of 7.00 FTE; 2) a FY 2023/24 Step Program for sworn personnel and a pay for performance and market adjustment for eligible employees and an increase in healthcare and retirement rates; 3) additional funding for overtime for special events which will be reimbursed by the vendors; 4) contract increases for photo enforcement, leased vehicles, Maricopa County Jail services, and municipal security; and 5) continuing a grant funded initiative for electronic citation (e-citation) and electronic collision (e-collision) platforms to increase efficiency in enforcing traffic-related violations and vehicular safety. *36)'%78 &9(+)8 %'89%0*36)'%78 127 Table of Contents BUDGET BY FUND | General Fund PUBLIC WORKS FY 2019/20 to FY 2025/26 (in millions) Public Works General Fund includes Capital Project Management (CPM) which oversees the design and construction of capital improvement projects (also includes the city's real estate services area), and Facilities Management which includes the repair and maintenance of just over three million square feet of city-owned facilities, as well as strategic space planning and contract administration. The FY 2023/24 adopted budget of $28.3 million is an increase of $3.9 million when compared to the FY 2022/23 adopted budget of $24.4 million. The increase is related to: 1) a FY 2023/24 pay for performance and market adjustment for eligible employees and an increase in healthcare and retirement rates; 2) contract increases; 3) facilities management increases due to inflation; 4)) contracting for land surveying, mapping and compiling G data; 5) funding for the exterior painting of city-owned buildings and structures; and 6) one-time funding to paint the public art wall "The Path Most Traveled" on the Arizona State Loop 101 (funded by the Tourism Development Fund). NON-DIVISIONAL USES Non-Divisional Uses are items that were budgeted in citywide macro level holding accounts. As expenditures occur in the applicable divisions, budget transfers are completed to move the needed budget from the macro level holding accounts to the respective divisions. Therefore, the FY 2022/23 year-end forecast and prior years’ budget and actuals that are displayed in the graphs are for comparison purposes only as the expenditures are actually recorded and reported as part of the applicable division’s uses. Beginning in FY 2020/21 due to an administrative change, most non-divisional uses are initially placed into the divisions instead of at a macro level; then moving the budget to a macro level holding account at the beginning of the fiscal year, and completing budget transfers to move the needed budget back to the applicable divisions as expenditures occur. The administrative change is in an effort to have more meaningful year-over-year comparisons. FUEL AND MAINT AND REPAIR FY 2019/20 to FY 2025/26 (in millions) Fuel and Maint and Repair are budgeted at the division level and then at the beginning of the fiscal year are moved to a macro account. Budgeting on a macro level is a tool used by the budget department to more accurately track how expenses are occurring by each division. Fuel and Maint and Repair includes expenses related to vehicle and equipment repairs and fuel usage. The FY 2023/24 Fuel and Maint and Repair adopted budgeted is $6.8 million, budgeted at the division level. *36)'%78 128 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund OPERATING IMPACTS FY 2019/20 to FY 2025/26 Operating Impacts is additional future costs associated with Capital Improvement Plan (CIP) projects that impact operating budget such as positions, facilities maintenance, utilities, and annual software maintenance. In FY 2023/24 and years prior, operating impacts have been included at the division level. FY 2024/25 through FY 2025/26 are forecasted based on the adopted CIP Five Year Plan. UTILITIES FY 2019/20 to FY 2025/26 (in millions) Utilities are budgeted at the division level and then at the beginning of the year are moved to a macro account. Budgeting on a macro level is a tool used by the Budget Department to more accurately track how expenses are occurring by each division. Utilities include city expenses on water, electric, sewer, gas, solid waste and recycling services. The FY 2023/24 Utilities budget is $10.5 million which is an increase of $2.1 million when compared to the FY 2022/23 adopted budget. CLASS AND COMP STUDY FY 2019/20 to FY 2025/26 (in millions) The Class and Comp Study reflects the anticipated cost to implement the recommendations from the Public Service Personnel Consultants Classification and Compensation study that will take place in late 2023. The FY 2023/24 Class and Comp Study is estimated at $6.8 million. *36)'%78 &9(+)8 %'89%0*36)'%78 129 Table of Contents BUDGET BY FUND | General Fund LEAVE ACCRUAL PAYMENTS / PARENTAL LEAVE FY 2019/20 to FY 2025/26 (in millions) Leave Accrual Payments include accumulated medical and/or vacation leave paid out at the time of retirement or separation from the city. Parental Leave allows for a four-week paid leave for new parents. The total FY 2023/24 Leave Accrual Payments / Parental Leave budget is $2.8 million, which includes $1.3 million budgeted for medical leave accrual payouts, $1.0 million budgeted for vacation accrual payouts, and $0.5 million budget for parental leave. SAVINGS FROM VACANT POSITIONS FY 2019/20 to FY 2025/26 (in millions) The amount of savings achieved from vacant positions for FY 2023/24 is estimated at ($9.0) million. The significant amount of vacancy savings achieved in FY 2021/22, and FY 2022/23 reflect in part challenges in the labor market, and it is the result of more resignations and retirements within the city than anticipated. VACATION TRADE FY 2019/20 to FY 2025/26 (in millions) The Vacation Trade program allows employees who have been employed by the city for five years or more and who have used at least 80 hours of vacation (112 hours for 56 hour employees) during the approved eligibility period, may elect to trade up to 40 hours (56 hours for 56 hour employees) of vacation for equivalent compensation. A Vacation Trade program was not approved for FY 2020/21 and FY 2021/22. *36)'%78 130 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund DEBT SERVICE AND TRANSFERS OUT Debt Service is the payment of principal, interest and related service charges on obligations resulting from the issuance of bonds. Transfers Out are the authorized movement of cash to other funds and/or capital projects. CONTRACTS PAYABLE FY 2019/20 to FY 2025/26 (in millions) Contracts Payable is primarily contractual debt related to sales tax development agreements and will vary based on the actual sales tax collections at each developed site. The FY 2023/24 Contracts Payable budget is $0.5 million. CIP FY 2019/20 to FY 2025/26 (in millions) Transfers Out to the Capital Improvement Plan (CIP) in FY 2023/24 is $68.5 million, which ensures compliance with the Budget Governing Guidance, Appendix A of the Comprehensive Financial Policies: $6.6 million or 50 percent of the construction sales tax, and $8.2 million or 100 percent of interest income. Transfers Out to the CIP also includes: 1) $2.5 million for inflation-related increases; 2) $21.2 million to allocate the unrestricted portion of the Bell Road land sale proceeds to applicable capital projects; and 5) $ 30.0 million to provide funding for various CIP projects that do not have a dedicated funding source per the Budget Governing Guidance, Appendix A of the Comprehensive Financial Policies. *36)'%78 &9(+)8 %'89%0*36)'%78 131 Table of Contents BUDGET BY FUND | General Fund DEBT SVC MPC BONDS FY 2019/20 to FY 2025/26 (in millions) Debt Service Municipal Property Corporation (MPC) bonds includes transfers to the Debt Service Fund for the annual debt service payments for MPC bonds issued that use sales tax as dedicated revenue source to service the debt. The MPC bonds issued include SkySong, WestWorld land acquisitions, Tournament Players Club (TPC) improvements, the Tony Nelssen Equestrian Center (TNEC) and the Scottsdale Fashion Square parking garage. In FY 2023/24 a total of $12.3 million will be transferred to the Debt Service Fund for MPC bonds issued. OPERATING FY 2019/20 to FY 2025/26 (in millions) The FY 2023/24 Operating Transfers Out budget of $0.2 million is to the Healthcare Self Insurance Fund to subsidize the costs of providing disabled public safety retiree healthcare benefits, per City Council direction. Per City Council approval, FY 2020/21 includes moving the savings in the General Fund generated by the AZCares Grant Program to a Special Revenue Fund to ensure governmental accounting standards are being met. GENERAL FUND ENDING BALANCE Fund balance/reserves protect the city’s financial condition and provide for unexpected economic challenges. The specific make-up of the city’s General Fund ending balance is noted in the following: *36)'%78 132 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund EMERGENCY RESERVE FY 2019/20 to FY 2025/26 (in millions) The Emergency Reserve was added in FY 2022/23 to incorporate best financial practices. Emergency Reserve complies with Financial Policy No. 2.02. The policy states that the General Fund will maintain five percent of operating uses, excluding transfers out as an emergency reserve to cover for unexpected emergencies and events where immediate action must be taken in the best interest of the city's residents and business owners. The FY 2023/24 General Fund Emergency Reserve is $18.8 million. GENERAL PLAN INITIATIVES FY 2019/20 to FY 2025/26 (in millions) The General Plan Initiatives fund balance designation was created in FY 2022/23 to support the implementation of the new General Plan, which was approved by voters in November 2021. The FY 2023/24 General Fund General Plan Initiatives designation is $15.0 million. INNOVATION INITIATIVES FY 2019/20 to FY 2025/26 (in millions) The Innovation Initiatives reserve designation was created in FY 2022/23 to support projects that benefit the community and support organizational goals and City Council initiatives. The FY 20223/24 General Fund Innovation Initiatives designation is $0.5 million. *36)'%78 &9(+)8 %'89%0*36)'%78 133 Table of Contents BUDGET BY FUND | General Fund OPERATING CONTINGENCY FY 2019/20 to FY 2025/26 (in millions) Operating Contingency for FY 2023/24 is set at $15.0 million of budget authorization in the event that unforeseen expenses occur during the fiscal year, and includes $5.0 million to cover any potential Public Safety - Fire Certificate of Necessity (CON) costs. In FY 2021/22 the $15.8 million of Operating Contingency fund balance included General Fund savings from utilizing the first half of the $29.2 million of the American Rescue Plan Act (ARPA) awarded to the city to pay for Public Safety - Police and Fire payroll expenses. Contingency funds are utilized only after all budget options have been considered and require City Council approval. OPERATING RESERVE FY 2019/20 to FY 2025/26 (in millions) The Operating Reserve complies with Financial Policy No. 2.01. The policy states the General Fund will maintain an operating reserve of 20 percent of General Fund operating uses, excluding transfers out, which beginning in FY 2022/23 is an increase from 10 percent to incorporate best financial practices. The Operating Reserve is to only be used for unforeseen emergencies or catastrophic impacts to the city. Maintaining a sufficient General Fund Reserve level is financially prudent. Based on the operating budget expenditure estimate, the FY 2023/24 General Fund Operating Reserve is $75.1 million. PSPRS PENSION LIABILITIES FY 2019/20 to FY 2025/26 (in millions) Public Safety Personnel Retirement System (PSPRS) is an Arizona pension system for public safety personnel. The PSPRS Pension Liabilities designation is to address the unfunded liability and shore-up the city's portion of the pension program for public safety personnel. In prior years, funds were held in the Undesignated, Unreserved Fund Balance. The FY 2023/234 PSPRS Pension Liabilities fund balance designation is $82.4 million, which is an increase of $43.0 million from the FY 2022/23 adopted budget. The increase is the net effect of a $10.0 million payment to the PSPRS to pay down the unfunded liability and anticipated greater sources than uses. FY 2020/21 and FY 2021/22 saw significant ‘actual’ increases compared to budget attributed to primarily one-time federal funding received thereby freeing up General Fund dollars and sources significantly exceeding uses. *36)'%78 134 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | General Fund CAVASSON INFRASTRUCTURE REIMBURSEMENT FY 2019/20 to FY 2025/26 (in millions) Designation created in FY 2019/20 for the Cavasson Development Project and the eligible infrastructure reimbursements associated with milestones achieved in phases one, two and three of the development agreement. The FY 2023/24 fund balance designation is $14.6 million. UNDESIGNATED, UNRESERVED FUND BALANCE FY 2019/20 to FY 2025/26 (in millions) Undesignated, Unreserved Fund Balance accounts for any funds remaining after the designation of all other reserves/uses. The FY 2023/24 ending undesignated, unreserved fund balance is $0.5 million. Under prudent fiscal management practices, this balance may be used for one-time expenditures, not to fund new or to expand programs with ongoing operating expenses. FY 2019/20 actual amount includes funds that were moved to PSPRS Pension Liabilities to address the unfunded liability for public safety personnel. *36)'%78 &9(+)8 %'89%0*36)'%78 135 Table of Contents FY 2023/24 Adopted Budget 136 Table of Contents BUDGET BY FUND | Special Revenue Funds Overview SPECIAL REVENUE FUNDS DESCRIPTION Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Examples of restricted revenues that must be spent on specific purposes are Sales Tax - Transportation (0.20%), Sales Tax - Preservation (0.35%), Highway User Tax, Transient Occupancy Tax, and special programs such as the Police 30-Day Tow program. The sections to follow discuss each of the funds in more detail. Special Revenue Funds Sources (% to Total) $ Special Revenue Funds Uses (% to Total) $ Rounding differences may occur. 137 Table of Contents FY 2023/24 Adopted Budget 138 Table of Contents BUDGET BY FUND | Preservation Fund FUND PURPOSE The Preservation Fund accounts for the portion of the city’s Sales Tax – Preservation (0.35 percent) dedicated to the purchase of about 30,500 acres of land within the McDowell Sonoran Preserve. In 1995, voters approved increasing the city’s sales tax rate by 0.20 percent for the purchase of land within the McDowell Sonoran Preserve. In May 2004, voters approved an additional 0.15 percent in the city’s sales tax rate dedicated to the McDowell Sonoran Preserve land acquisition. Differing from the 1995 tax, the 2004 tax also allows for the construction of essential preserve related necessities such as proposed trailheads. The 1995 Sales Tax – Preservation of 0.20 percent is due to sunset in 2025 and the 2004 Sales Tax – Preservation of 0.15 is due to sunset in 2034. Revenue collections and contractual debt associated with purchased land are accounted for in this fund. A Transfer Out is made to the Debt Service Fund and Capital Improvement Plan (CIP) to pay debt service payments associated with bonds issued for land purchases and capital preserve projects. Preservation Fund Sources (% to Total) $59.5 Million Preservation Fund Uses (% to Total) $35.4 Million Rounding differences may occur. 139 Table of Contents BUDGET BY FUND | Preservation Fund Summary Actual 2021/ 22 Adopted 2022/ 23 Forecast 2022/ 23 Adopted 2023/ 24 32,947,342 23,650,628 56,597,970 33,439,900 38,313,924 71,753,824 33,439,242 46,388,023 79,827,265 35,354,537 71,615,507 106,970,044 32,574,988 24,434,764 726,449 30,493,170 22,869,877 428,454 34,211,903 25,658,945 1,161,173 32,706,126 24,529,589 2,234,571 57,736,201 53,791,501 61,032,021 59,470,286 57,736,201 53,791,501 61,032,021 59,470,286 1,559,907 31,526,989 1,420,010 450,000 33,439,242 - 450,000 33,439,242 - 35,354,537 - 34,506,906 33,889,242 33,889,242 35,354,537 Total Uses 34,506,906 33,889,242 33,889,242 35,354,537 Sources Over/(Under) Uses 23,229,295 19,902,259 27,142,779 24,115,749 Ending Fund Balance Debt Service Reserve Restricted for Capital Total Ending Fund Balance 33,439,242 46,388,023 79,827,265 35,354,600 56,301,483 91,656,083 35,354,537 71,615,507 106,970,044 38,849,700 92,236,093 131,085,793 Beginning Fund Balance Debt Service Reserve Restricted for Capital Total Beginning Fund Balance Revenues Sales Tax - Preservation (0.20%) Sales Tax - Preservation (0.15%) Interest Earnings (a) Subtotal Total Sources Transfers Out CIP (b) Debt Svc GO Bonds Trnsfrs Out-Debt Svc SPA Bonds (c) Subtotal (a) Increase in Interest Earnings is due to rising interes rates. There are no capital projects proposed for Preservation Funds after FY 2022/23. (c) The Transfers Out-Debt Svc SPA Bonds is for the repayment of Scottsdale Preserve Authority Bonds with the final payment in FY 2021/22. (b) 140 Table of Contents BUDGET BY FUND | Preservation Fund Five-Year Financial Forecast Adopted 2023/ 24 Forecast 2024/ 25 Forecast 2025/ 26 Forecast 2026/ 27 Forecast 2027/ 28 35,354,537 71,615,507 106,970,044 38,849,700 92,236,093 131,085,793 24,670,700 128,225,193 152,895,893 18,798,800 139,156,893 157,955,693 18,659,800 149,075,193 167,734,993 32,706,126 24,529,589 2,234,571 33,194,100 24,895,500 2,570,200 1,595,600 25,797,800 2,337,100 180,700 26,590,000 1,807,400 27,409,400 1,746,900 59,470,286 60,659,800 29,730,500 28,578,100 29,156,300 Total Sources 59,470,286 60,659,800 29,730,500 28,578,100 29,156,300 Transfers Out CIP Debt Svc GO Bonds Trnsfrs Out-Debt Svc SPA Bonds 35,354,537 - 38,849,700 - 24,670,700 - 18,798,800 - 18,659,800 - 35,354,537 38,849,700 24,670,700 18,798,800 18,659,800 Total Uses 35,354,537 38,849,700 24,670,700 18,798,800 18,659,800 Sources Over/(Under) Uses 24,115,749 21,810,100 5,059,800 9,779,300 10,496,500 Ending Fund Balance Debt Service Reserve Restricted for Capital Total Ending Fund Balance 38,849,700 92,236,093 131,085,793 24,670,700 128,225,193 152,895,893 18,798,800 139,156,893 157,955,693 18,659,800 149,075,193 167,734,993 18,659,800 159,571,693 178,231,493 Beginning Fund Balance Debt Service Reserve Restricted for Capital Total Beginning Fund Balance Revenues Sales Tax - Preservation (0.20%)(a) Sales Tax - Preservation (0.15%) Interest Earnings Subtotal Subtotal (a) The 1995 voter approved 0.20 percent of the city's sales tax dedicated to the purchase of land within the McDowell Sonoran Preserve will sunset in June 2025. June 2025 tax returns reported in July 2025, delinquent tax returns, and audits will result in additional funds after expiration date. 141 Table of Contents BUDGET BY FUND | Preservation Fund 46)7)6:%8-32*92(7396')7 8LI4VIWIVZEXMSR*YRHWSYVGIWJSV*=EVIFYHKIXIHEXQMPPMSRERMRGVIEWISJQMPPMSRJVSQXLI*= EHSTXIHFYHKIX8LIWEQIQIXLSHSPSK]JSVHIZIPSTMRKXLIWEPIWXE\JSVIGEWXMRXLI+IRIVEP*YRHMWEPWSYWIHJSVXLI4VIWIVZEXMSR *YRH 7%0)78%<46)7)6:%8-32  *=XS*= MRQMPPMSRW 7EPIW8E\4VIWIVZEXMSR  VITVIWIRXWXLIZSXIV ETTVSZIHTIVGIRXSJXLIGMX]’WWEPIWXE\HIHMGEXIHXSXLI TYVGLEWISJPERH[MXLMRXLI1G(S[IPP7SRSVER4VIWIVZISJ [LMGL[MPPWYRWIXMRXLI]IEV8LI*=EHSTXIH FYHKIXSJQMPPMSRVITVIWIRXWERMRGVIEWISJQMPPMSR SVWIZIRTIVGIRXJVSQXLI*=EHSTXIHFYHKIX.YRI XE\VIXYVRWVITSVXIHMR.YP]HIPMRUYIRXXE\VIXYVRW ERHEYHMXW[MPPVIWYPXMREHHMXMSREPJYRHWVIGIMZIHEJXIVXLI I\TMVEXMSRSJXLIXE\ 7%0)78%<46)7)6:%8-32  *=XS*= MRQMPPMSRW 7EPIW8E\4VIWIVZEXMSR  VITVIWIRXWXLIZSXIV ETTVSZIHTIVGIRXSJXLIGMX]’WWEPIWXE\HIHMGEXIHXSXLI TYVGLEWISJPERH[MXLMRXLI1G(S[IPP7SRSVER4VIWIVZITPYW GSRWXVYGXMSRSJIWWIRXMEPTVIWIVZIVIPEXIHRIGIWWMXMIWWYGLEW XVEMPLIEHW8LIWIJYRHWEVIHYIXSWYRWIXMRXLI]IEV8LI *=EHSTXIHFYHKIXSJQMPPMSRVITVIWIRXWER MRGVIEWISJQMPPMSRSVWIZIRTIVGIRXSZIVXLI*= EHSTXIHFYHKIX *36)'%78 142 &9(+)8 %'89%0*36)'%78 Table of Contents -28)6)78)%62-2+7 BUDGET BY FUND | Preservation Fund *=XS*= MRQMPPMSRW -RXIVIWX)EVRMRKWMWEJYRGXMSRSJXLIVIPEXMSRWLMTFIX[IIRXLI EZEMPEFPIGEWLFEPERGIERHMRXIVIWXVEXI8LIGMX]IEVRW MRXIVIWXSRJYRHWXLVSYKLZEVMSYWMRZIWXQIRXWMREGGSVHERGI [MXL%VM^SRE6IZMWIH7XEXYXIWERH'MX]3VHMRERGI8LIGMX]’W MRZIWXQIRXTSPMG]WXVIWWIWWEJIX]EFSZI]MIPH8LI*= EHSTXIHFYHKIXSJQMPPMSRERMRGVIEWISJQMPPMSR JVSQ*=EHSTXIHFYHKIXHYIXSVMWMRKMRXIVIWXVEXIs. 86%27*)67398 8VERWJIVW3YXMWXLIEYXLSVM^IHQSZIQIRXSJGEWLSVSXLIVVIWSYVGIWXSSXLIVJYRHWERHSVGETMXEPTVSNIGXW8VERWJIVW3YXMR*= MWQMPPMSR[LMGLMWERMRGVIEWISJQMPPMSRJVSQXLI*=EHSTXIHFYHKIXERHMWTVSZMHIHMRJYVXLIVHIXEMP FIPS[ '-4 *=XS*= MRQMPPMSRW 8VERWJIVWSYXXSXLI'ETMXEP-QTVSZIQIRX4PER '-4 JSVGETMXEP TVIWIVZITVSNIGXW8LIVIEVIRSGETMXEPTVSNIGXWTVSTSWIHJSV 4VIWIVZEXMSR*YRHWSZIVXLIRI\XJMZI]IEVWXLIVIJSVIXLI*= EHSTXIHFYHKIXMW *36)'%78 &9(+)8 %'89%0*36)'%78 143 Table of Contents ()&87:'+3&32(7 BUDGET BY FUND | Preservation Fund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able of Contents ()&87)6:-')6)7)6:) BUDGET BY FUND | Preservation Fund *=XS*= MRQMPPMSRW (IFX7IVZMGI6IWIVZIMWEVIWIVZIIUYEPXSXLIRI\XJMWGEP]IEV W HIFXWIVZMGI8LI(IFX7IVZMGI0MEFMPMXMIWFEPERGIJSV*= MWQMPPMSR8LIWIHIWMKREXIHJYRHW[MPPFIYWIH XSTE]JYXYVIHIFXWIVZMGITE]QIRXW 6)786-'8)(*36'%4-8%0 *=XS*= MRQMPPMSRW 6IWXVMGXIHJSV'ETMXEP*YRH&EPERGIEGGSYRXWJSVER]JYRHW VIQEMRMRKEJXIVXLIHIWMKREXMSRSJEPPSXLIVVIWIVZIWYWIW8LI 6IWXVMGXIHJSV'ETMXEP*YRH&EPERGIJSV*=MW QMPPMSR *36)'%78 &9(+)8 %'89%0*36)'%78 145 Table of Contents FY 2023/24 Adopted Budget 146 Table of Contents BUDGET BY FUND | Special Programs Fund FUND PURPOSE In accordance with the Governmental Accounting Standards Board, this fund is used to account for dedicated funding sources and donations earmarked for specific purposes pursuant to constraints imposed by formal action of the City Council or restricted by an outside source. All revenue not expended in the current fiscal year are carried over to the next fiscal year to continue funding the intended purpose. Special Programs Fund Sources (% to Total) $ 1 9 . 9 M i l l i on Special Programs Fund Uses (% to Total) $ 2 0 . 3 M i l l i on Rounding differences may occur. 147 Table of Contents BUDGET BY FUND | Special Programs Fund Summary Actual 2 0 2 1 /2 2 Beginning Fund Balance Appropriation Contingency(a) Reserve - Az Cares(b) Reserve - City Court Reserve - Community and Economic Development Reserve - Community Services Reserve - Mayor And City Council Reserve - Public Safety - Fire Reserve - Public Safety - Police Reserve - Public Works T o t a l B e g i n n i n g F u n d B a l a n ce R e v e nue s Az Cares City Court Community and Economic Development Community Services(c) Mayor and City Council Public Safety - Fire Public Safety - Police Public Works T r a ns f e r s I n CIP Operating T o t a l S o u r ce s S ub t o t a l S ub t o t a l A d op t e d 2 0 2 2 /2 3 F o r e ca s t 2 0 2 2 /2 3 A d op t e d 2 0 2 3 /2 4 11,500,000 11,019,249 9,049,036 3,852,139 2,236,646 3,030 103,491 1,109,940 303,039 2 7 ,6 7 6 ,5 7 0 1,500,000 7,905,043 3,352,469 2,360,045 3,830 367,805 2,035,705 121,040 1 6 ,1 4 5 ,9 3 7 1,500,000 2,787,833 8,573,441 3,371,659 4,449,149 10,800 478,433 1,937,540 127,950 2 1 ,7 3 6 ,8 0 4 6,685,849 1,008,878 5,620,531 11,601 476,078 2,721,253 250,547 1 6 ,7 7 4 ,7 3 8 34,631 1,869,606 5,139,262 5,979,423 10,000 719,242 2,935,935 493,778 1,751,874 5,609,320 3,711,654 48,800 728,500 3,910,222 284,130 1,751,874 5,735,597 4,511,654 48,800 728,500 3,910,222 349,130 1,826,716 6,880,382 5,969,850 244,900 743,170 3,826,542 341,812 1,500,000 1 7 ,1 8 1 ,8 7 6 1 6 ,0 4 4 ,5 0 0 1 7 ,0 3 5 ,7 7 7 1 9 ,8 3 3 ,3 7 2 254,378 31,734 10,000 10,000 63,689 2 8 6 ,1 1 2 1 0 ,0 0 0 1 0 ,0 0 0 6 3 ,6 8 9 1 7 ,4 6 7 ,9 8 9 1 6 ,0 5 4 ,5 0 0 1 7 ,0 4 5 ,7 7 7 1 9 ,8 9 7 ,0 6 1 (a) The Appropriation Contingency for the Special Programs Fund is an unfunded contingency that allows for the expenditure of unanticipated revenues from a dedicated funding source and is not included in the beginning or ending fund balances. In FY 2021/22, City Council approved a $10.0 million Affordable Housing Contingency. (b) Scottsdale’s allocation of $29.6 million of the AzCares Fund (created as a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)), was transferred from the General Fund to the Special Programs Fund in FY 2020/21 to ensure governmental accounting standards are being met and the funding is being used for the specific purposes directed by City Council. The remaining AZ Cares funding was transferred to the General Fund in FY 2022/23, where the remaining work of Scottsdale AZ Cares program was being completed. (c) FY 2023/24 includes one-time $0.6 million receipt of One AZ Opioid settlement funds. 148 Table of Contents BUDGET BY FUND | Special Programs Fund Summary Expenditures Az Cares City Court Community and Economic Development Community Services Mayor and City Council Public Safety - Fire Public Safety - Police Public Works Debt Service Contracts Payable Actual 2 0 2 1 /2 2 1,944,634 2,982,000 3,396,627 48,000 730,855 3,614,717 165,800 1,944,634 2,572,000 3,246,627 48,000 730,855 3,086,509 165,800 2,065,560 719,220 4,389,994 231,000 757,094 3,942,212 165,810 S ub t o t a l 7 4 ,2 6 7 6 0 ,7 3 3 6 0 ,7 3 3 5 8 ,5 4 9 10,272,420 12,943,366 11,855,158 12,329,439 7,374,729 3,721,325 827,078 1,212,204 1,734,832 4,745,970 757,730 - 1,734,832 4,872,627 757,396 2,787,833 1,107,779 6,054,632 766,869 53,689 S ub t o t a l 60,733 1 1 ,7 9 4 ,4 2 5 A d op t e d 2 0 2 3 /2 4 1 0 ,1 9 8 ,1 5 3 74,267 1 2 ,8 8 2 ,6 3 3 Forecast 2 0 2 2 /2 3 S ub t o t a l TOTAL OPERATING BUDGET Transfers Out CIP CIP Stormwater Debt Svc MPC Bonds Operating 2,456,042 1,632,767 97,494 3,045,225 2,231 348,359 2,070,737 545,300 A d op t e d 2 0 2 2 /2 3 60,733 1 2 ,2 7 0 ,8 9 0 58,549 1 3 ,1 3 5 ,3 3 5 7 ,2 3 8 ,5 3 2 1 0 ,1 5 2 ,6 8 8 7 ,9 8 2 ,9 6 9 T o t a l Us e s 2 3 ,4 0 7 ,7 5 5 2 0 ,1 8 1 ,8 9 8 2 2 ,0 0 7 ,8 4 6 2 0 ,3 1 2 ,4 0 8 Sources Over/(Under) Uses ( 5 ,9 3 9 ,7 6 6 ) ( 4 ,1 2 7 ,3 9 8 ) ( 4 ,9 6 2 ,0 6 9 ) ( 4 1 5 ,3 4 7 ) Ending Fund Balance Appropriation Contingency(a) Reserve - Az Cares(b) Reserve - City Court Reserve - Community And Economic Development Reserve - Community Services Reserve - Mayor And City Council Reserve - Public Safety - Fire Reserve - Public Safety - Police Reserve - Public Works Total Ending Fund Balance 11,967,048 2,787,833 8,573,441 3,371,659 4,449,149 10,800 478,433 1,937,540 127,950 2 1 ,7 3 6 ,8 0 4 1,500,000 6,017,450 579,689 2,581,473 4,631 365,449 2,291,210 178,637 1 2 ,0 1 8 ,5 3 9 1,500,000 6,685,849 1,008,878 5,620,531 11,601 476,078 2,721,253 250,547 1 6 ,7 7 4 ,7 3 8 1,500,000 5,659,225 404,969 6,853,954 25,501 462,154 2,585,584 368,000 1 6 ,3 5 9 ,3 8 7 (a) The Appropriation Contingency for the Special Programs Fund is an unfunded contingency that allows for the expenditure of unanticipated revenues from a dedicated funding source and is not included in the beginning or ending fund balances. In FY 2021/22, City Council approved a $10.0 million Affordable Housing Contingency. (b) Scottsdale’s allocation of $29.6 million of the AzCares Fund (created as a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)), was transferred from the General Fund to the Special Programs Fund in FY 2020/21 to ensure governmental accounting standards are being met and the funding is being used for the specific purposes directed by City Council. The remaining AZ Cares funding was transferred to the General Fund in FY 2022/23, where the remaining work of Scottsdale AZ Cares program was being completed. 149 Table of Contents BUDGET BY FUND | Special Programs Fund Five-Year Financial Forecast Beginning Fund Balance Appropriation Contingency(a) Reserve - Az Cares(b) Reserve - City Court Reserve - Community and Economic Development Reserve - Community Services Reserve - Mayor And City Council Reserve - Public Safety - Fire Reserve - Public Safety - Police Reserve - Public Works T o t a l B e g i n n i n g F u n d B a l a n ce R e v e nue s Az Cares City Court Community and Economic Development Community Services(c) Mayor and City Council Public Safety - Fire Public Safety - Police Public Works T r a ns f e r s I n CIP Operating Total Sources S ub t o t a l S ub t o t a l A d op t e d 2 0 2 3 /2 4 Forecast 2 0 2 4 /2 5 F o r e ca s t 2 0 2 5 /2 6 F o r e ca s t 2 0 2 6 /2 7 Forecast 2 0 2 7 /2 8 1,500,000 6,685,849 1,008,878 5,620,531 11,601 476,078 2,721,253 250,547 1 6 ,7 7 4 ,7 3 8 1,500,000 5,659,225 404,969 6,853,954 25,501 462,154 2,585,584 368,000 1 6 ,3 5 9 ,3 8 7 1,500,000 5,523,325 284,669 6,833,954 39,701 423,054 2,264,284 397,600 1 5 ,7 6 6 ,5 8 7 1,500,000 5,452,025 199,069 6,673,254 54,001 357,754 1,945,484 429,400 1 5 ,1 1 0 ,9 8 7 1,500,000 5,404,025 113,369 6,510,554 68,501 265,154 1,664,984 463,400 1 4 ,4 8 9 ,9 8 7 1,826,716 6,880,382 5,969,850 244,900 743,170 3,826,542 341,812 1,828,000 6,947,500 5,402,800 249,600 758,100 3,734,900 341,800 1,829,400 7,015,400 5,560,800 254,000 773,300 3,587,200 341,800 1,831,100 7,084,000 5,719,600 258,400 788,800 3,815,600 341,800 1,831,800 7,153,300 5,859,000 262,800 804,700 4,011,300 341,800 1 9 ,8 3 3 ,3 7 2 1 9 ,2 6 2 ,7 0 0 1 9 ,3 6 1 ,9 0 0 1 9 ,8 3 9 ,3 0 0 2 0 ,2 6 4 ,7 0 0 63,689 10,000 10,000 10,000 10,000 6 3 ,6 8 9 1 0 ,0 0 0 1 0 ,0 0 0 1 0 ,0 0 0 1 0 ,0 0 0 1 9 ,8 9 7 ,0 6 1 1 9 ,2 7 2 ,7 0 0 1 9 ,3 7 1 ,9 0 0 1 9 ,8 4 9 ,3 0 0 2 0 ,2 7 4 ,7 0 0 (a) The Appropriation Contingency for the Special Programs Fund is an unfunded contingency that allows for the expenditure of unanticipated revenues from a dedicated funding source and is not included in the beginning or ending fund balances. In FY 2021/22, City Council approved a $10.0 million Affordable Housing Contingency. (b) Scottsdale’s allocation of $29.6 million of the AzCares Fund (created as a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)), was transferred from the General Fund to the Special Programs Fund in FY 2020/21 to ensure governmental accounting standards are being met and the funding is being used for the specific purposes directed by City Council. The remaining AZ Cares funding was transferred to the General Fund in FY 2022/23, where the remaining work of Scottsdale AZ Cares program was being completed. (c) FY 2023/24 includes one-time $0.6 million receipt of One AZ Opioid settlement funds. 150 Table of Contents BUDGET BY FUND | Special Programs Fund Five-Year Financial Forecast Expenditures Az Cares City Court Community and Economic Development Community Services Mayor and City Council Public Safety - Fire Public Safety - Police Public Works Debt Service Contracts Payable A d op t e d 2 0 2 3 /2 4 1,963,900 289,300 5,338,000 235,400 797,200 4,036,200 255,800 1,900,700 254,600 5,627,200 239,700 838,600 3,886,000 255,800 1,879,100 254,700 5,783,700 243,900 881,400 4,076,100 255,800 2,001,500 224,800 6,001,400 248,200 959,800 4,347,600 255,800 5 8 ,5 4 9 5 6 ,4 0 0 5 4 ,2 0 0 5 2 ,0 0 0 5 2 ,0 0 0 12,329,439 12,972,200 13,056,800 13,426,700 14,091,100 1,107,779 6,054,632 766,869 53,689 20,000 6,119,700 753,600 - 20,000 6,191,600 759,100 - 20,000 6,260,000 763,600 - 20,000 6,330,000 752,000 - S ub t o t a l 54,200 1 3 ,3 7 4 ,7 0 0 Forecast 2 0 2 7 /2 8 S ub t o t a l 56,400 1 3 ,0 0 2 ,6 0 0 F o r e ca s t 2 0 2 6 /2 7 1 2 ,2 7 0 ,8 9 0 58,549 1 2 ,9 1 5 ,8 0 0 F o r e ca s t 2 0 2 5 /2 6 S ub t o t a l TOTAL OPERATING BUDGET T r a n s f e r s Ou t CIP CIP Stormwater Debt Svc MPC Bonds Operating 2,065,560 719,220 4,389,994 231,000 757,094 3,942,212 165,810 F o r e ca s t 2 0 2 4 /2 5 52,000 1 4 ,0 3 9 ,1 0 0 52,000 7 ,9 8 2 ,9 6 9 6 ,8 9 3 ,3 0 0 6 ,9 7 0 ,7 0 0 7 ,0 4 3 ,6 0 0 7 ,1 0 2 ,0 0 0 T o t a l Us e s 2 0 ,3 1 2 ,4 0 8 1 9 ,8 6 5 ,5 0 0 2 0 ,0 2 7 ,5 0 0 2 0 ,4 7 0 ,3 0 0 2 1 ,1 9 3 ,1 0 0 Sources Over/(Under) Uses ( 4 1 5 ,3 4 7 ) ( 5 9 2 ,8 0 0 ) ( 6 5 5 ,6 0 0 ) ( 6 2 1 ,0 0 0 ) ( 9 1 8 ,4 0 0 ) Ending Fund Balance Appropriation Contingency(a) Reserve - Az Cares(b) Reserve - City Court Reserve - Community And Economic Development Reserve - Community Services Reserve - Mayor And City Council Reserve - Public Safety - Fire Reserve - Public Safety - Police Reserve - Public Works Total Ending Fund Balance 1,500,000 5,659,225 404,969 6,853,954 25,501 462,154 2,585,584 368,000 1 6 ,3 5 9 ,3 8 7 1,500,000 5,523,325 284,669 6,833,954 39,701 423,054 2,264,284 397,600 1 5 ,7 6 6 ,5 8 7 1,500,000 5,452,025 199,069 6,673,254 54,001 357,754 1,945,484 429,400 1 5 ,1 1 0 ,9 8 7 1,500,000 5,404,025 113,369 6,510,554 68,501 265,154 1,664,984 463,400 1 4 ,4 8 9 ,9 8 7 1,500,000 5,234,325 57,569 6,280,454 83,101 110,054 1,308,684 497,400 1 3 ,5 7 1 ,5 8 7 (a) The Appropriation Contingency for the Special Programs Fund is an unfunded contingency that allows for the expenditure of unanticipated revenues from a dedicated funding source and is not included in the beginning or ending fund balances. In FY 2021/22, City Council approved a $10.0 million Affordable Housing Contingency. (b) Scottsdale’s allocation of $29.6 million of the AzCares Fund (created as a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)), was transferred from the General Fund to the Special Programs Fund in FY 2020/21 to ensure governmental accounting standards are being met and the funding is being used for the specific purposes directed by City Council. The remaining AZ Cares funding was transferred to the General Fund in FY 2022/23, where the remaining work of Scottsdale AZ Cares program was being completed. 151 Table of Contents BUDGET BY FUND | Special Programs Fund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’WEFMPMX]XSGSPPIGXERH QEREKIQSRMIW8LI*=FYHKIXJSVVIWXVMGXIH'MX] 'SYVXVIZIRYISJQMPPMSRMWJPEX[LIRGSQTEVIHXSXLI*= EHSTXIHFYHKIX *36)'%78 152 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Special Programs Fund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able of Contents BUDGET BY FUND | Special Programs Fund 1%=36%2('-8='392'-0 *=XS*= 1E]SVERH'MX]'SYRGMPVIGIMZIGSRXVMFYXMSRWERHHSREXMSRWXS JYRHXLI]IEVP]1E]SV W'SRWXMXYXMSRIZIRX8LI*= IWXMQEXIHWTIGMEPVIZIRYISJMWERMRGVIEWISJ [LIRGSQTEVIHXSXLI*=EHSTXIHFYHKIX 8LIMRGVIEWIMWHYIXSI\TIGXIHVIZIRYIJVSQGSRXVMFYXMSRW 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4VSKVEQW*YRHXSFIYWIHXSWYTTPIQIRXI\MWXMRKTVSKVEQW GVIEXIRI[TVSKVEQWI\IGYXIGSRXVEGXWERHI\TIRHJYRHWEW RIGIWWEV]XSQMXMKEXIXLIIJJIGXWSJERHEMHMRVIGSZIV]JVSQ XLI'3:-(TERHIQMG8LI%>'EVIWTVSKVEQ[EW XIVQMREXIHMR*=%R]VIQEMRHIVFEPERGI[EW XVERWJIVVIHFEGOXSXLI+IRIVEP*YRH *36)'%78 &9(+)8 %'89%0*36)'%78 157 Table of Contents BUDGET BY FUND | Special Programs Fund '-8='3968 *=XS*= MRQMPPMSRW 'MX]'SYVXEHSTXIHFYHKIXJSV*=MWQMPPMSRERH MRGPYHIWXLIJSPPS[MRKWTIGMJMGYWIW IRLERGIQIRXWXSXLI 'SYVX’WXIGLRSPSKMGEPSTIVEXMSREPERHWIGYVMX]JEGMPMXMIWEW EPPS[IHYRHIVXLI'SYVX)RLERGIQIRX*YRH ')* IWXEFPMWLIH F]7GSXXWHEPI'MX]3VHMRERGI2SWIGXMSR  EHHMXMSREPI\TIRHMXYVIWEWEPPS[IHF].YHMGMEP'SPPIGXMSRW )RLERGIQIRX*YRH .')* ERH*MPPXLI+ET *8+ IWXEFPMWLIH F]%VM^SRE6IZMWIH7XEXYXIW %67  %  & ERH7IREXI &MPP 7& JSVXLIQEMRXIRERGIERHIRLERGIQIRXSJXLI 'SYVX’WEFMPMX]XSGSPPIGXERHQEREKIQSRMIWERH WIVZMGIW XSIRLERGIXLII\TIVMIRGISJGMXM^IRWWIVZMRKSRNYVMIWYWMRK NYV]JIIHSREXMSRW8LI*=EHSTXIHFYHKIXMRGVIEWIH QMPPMSR[LIRGSQTEVIHXSXLI*=EHSTXIH 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*YRHW[LMGLMWMRXIRHIHXSFIYWIHJSV]SYXLERHJEQMP]ERH LSQIPIWWRIWWSYXVIEGLTVSKVEQWEW[IPPEWJYRHMRKJSVXLI TYVGLEWISJPMFVEV]GSPPIGXMSRQEXIVMEPWERHIQEXIVMEPWERHE *=TE]JSVTIVJSVQERGIERHQEVOIXEHNYWXQIRXJSV IPMKMFPIIQTPS]IIW *36)'%78 158 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Special Programs Fund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able of Contents BUDGET BY FUND | Special Programs Fund 49&0-'7%*)8=430-') *=XS*= MRQMPPMSRW 4YFPMG7EJIX]4SPMGII\TIRHMXYVIWMRGPYHI PE[IRJSVGIQIRX IRLERGIQIRXWYWMRK6EGOIXIIV-RJPYIRGIHERH'SVVYTX 3VKERM^EXMSRW 6-'3 JYRHW XLITVSZMWMSRSJ'VMQI 0EFSVEXSV]7IVZMGIW ZIXIVMREV]GSWXWWTIGMJMGXVEMRMRK IHYGEXMSRERHWYTTPMIWJSVXLI1SYRXIH9RMXERH'ERMRI9RMX  7GLSSP6IWSYVGI7IVZMGIWMRGPYHMRKXLI'EHIX4VSKVEQ *EQMP]%HZSGEG]'IRXIV EHQMRMWXVEXMZIGSWXWJSVXLI(E] Tow Program that enforces ARS §28-3511; 7) equipment that IRLERGIWSJJMGIV’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able of Contents BUDGET BY FUND | Special Programs Fund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able of Contents BUDGET BY FUND | Special Programs Fund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able of Contents BUDGET BY FUND | Special Programs Fund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able of Contents FY 2023/24 Adopted Budget 164 Table of Contents BUDGET BY FUND | Stadium Facility Fund FUND PURPOSE The Stadium Facility Fund is a special revenue fund created to account for activity at the Scottsdale Stadium. In June 2019, the city entered into a 25-year baseball facilities agreement with the Scottsdale Charros and the San Francisco Giants Baseball Club for the use and maintenance of the Scottsdale Stadium. This fund accounts for the contributions and uses as per the agreement. Stadium Facility Fund Sources (% to Total) $2.2 Million Stadium Facility Fund Uses (% to Total) $1.6 Million Rounding differences may occur. 165 Table of Contents BUDGET BY FUND | Stadium Facility Fund Summary Ac t u al 2021/ 22 3,821,663 Adopted 2022/ 23 3,807,078 Forecast 2022/ 23 4,838,414 Adopted 2023/ 24 4,731,469 Subtotal 135,000 375,000 40,388 379,730 383,179 1,034,593 2 ,3 4 7 ,8 9 0 135,000 375,000 19,362 169,460 511,823 226,500 1 ,4 3 7 ,1 4 5 135,000 375,000 52,475 169,460 511,823 477,453 1 ,7 2 1 ,2 1 1 135,000 525,000 134,247 172,500 519,566 697,848 2 ,1 8 4 ,1 6 1 Subtotal 7,204 7 ,2 0 4 - - - 2, 355, 094 1, 437, 145 1, 721, 211 2, 184, 161 Subtotal 255,701 493,975 77,424 1,242 8 2 8 ,3 4 2 270,710 206,307 194,113 6 7 1 ,1 3 0 270,710 437,958 252,113 340,000 1 ,3 0 0 ,7 8 1 262,762 431,044 194,113 8 8 7 ,9 1 9 Subtotal - 17,375 1 7 ,3 7 5 17,375 1 7 ,3 7 5 17,375 1 7 ,3 7 5 828,342 688,505 1,318,156 905,294 510,000 5 1 0 ,0 0 0 510,000 5 1 0 ,0 0 0 510,000 5 1 0 ,0 0 0 660,000 6 6 0 ,0 0 0 Total Uses 1, 338, 342 1, 198, 505 1, 828, 156 1, 565, 294 Sources Over/(Under) Uses 1, 016, 751 238, 640 ( 106, 945) 618, 867 Total Ending Fund Balance 4, 838, 414 4, 045, 718 4, 731, 469 5, 350, 336 Beginning Fund Balance Rev en u es Charros Capital Contribution Giants Capital Contribution Giants Stadium Lifecycle Giants Stadium Maintenance Giants Stadium Operations Stadium Events Transfers In CIP (a) Total Sources E x p en di t u r es Personnel Services Contractual Services Commodities Capital Outlays (b) Debt Service Contracts Payable TOTAL OPERATING BUDGET Transfers Out Debt Svc MPC Bonds Subtotal (a) One-time bonuses approved by Council to active full and part-time employees paid in FY 2021/22. The funding used was Scottsdale AZCares funding that was in the CIP. (b) One-time replacement of stadium seats was budgeted in adopted FY 2021/22, but was not completed until FY 2022/23 due to the delay of product delivery. 166 Table of Contents BUDGET BY FUND | Stadium Facility Fund Five-Year Financial Forecast Adopted 2023/ 24 4,731,469 Forecast 2024/ 25 5,350,336 Forecast 2025/ 26 5,984,236 Forecast 2026/ 27 6,641,636 Forecast 2027/ 28 7,268,136 Subtotal 135,000 525,000 134,247 172,500 519,566 697,848 2 ,1 8 4 ,1 6 1 135,000 525,000 152,600 176,400 531,300 486,700 2 ,0 0 7 ,0 0 0 135,000 525,000 173,800 179,900 542,000 495,700 2 ,0 5 1 ,4 0 0 135,000 525,000 135,000 183,500 553,000 505,000 2 ,0 3 6 ,5 0 0 135,000 525,000 130,400 187,100 564,100 514,400 2 ,0 5 6 ,0 0 0 Subtotal - - - - - 2, 184, 161 2, 007, 000 2, 051, 400 2, 036, 500 2, 056, 000 Subtotal 262,762 431,044 194,113 8 8 7 ,9 1 9 275,900 224,500 195,300 6 9 5 ,7 0 0 289,700 230,100 196,800 7 1 6 ,6 0 0 304,700 235,200 198,500 7 3 8 ,4 0 0 331,000 241,000 199,800 7 7 1 ,8 0 0 Subtotal 17,375 1 7 ,3 7 5 17,400 1 7 ,4 0 0 17,400 1 7 ,4 0 0 11,600 1 1 ,6 0 0 - 905,294 713,100 734,000 750,000 771,800 660,000 6 6 0 ,0 0 0 660,000 6 6 0 ,0 0 0 660,000 6 6 0 ,0 0 0 660,000 6 6 0 ,0 0 0 660,000 6 6 0 ,0 0 0 Total Uses 1, 565, 294 1, 373, 100 1, 394, 000 1, 410, 000 1, 431, 800 Sources Over/(Under) Uses 618, 867 633, 900 657, 400 626, 500 624, 200 Total Ending Fund Balance 5, 350, 336 5, 984, 236 6, 641, 636 7, 268, 136 7, 892, 336 Beginning Fund Balance Rev en u es Charros Capital Contribution Giants Capital Contribution Giants Stadium Lifecycle Giants Stadium Maintenance Giants Stadium Operations Stadium Events Transfers In CIP Total Sources E x p en di t u r es Personnel Services Contractual Services Commodities Capital Outlays Debt Service Contracts Payable (a) TOTAL OPERATING BUDGET Transfers Out Debt Svc MPC Bonds Subtotal (a) Repayment of a 60-month lease-to-own contract for mowing equipment with the final payment due in FY 2026/27. 167 Table of Contents BUDGET BY FUND | Stadium Facility Fund 78%(-91*%'-0-8=*92(7396')7 8LI7XEHMYQ*EGMPMX]*YRHWSYVGIWJSV*=EVIFYHKIXIHEXQMPPMSRERMRGVIEWISJQMPPMSRJVSQXLI*= EHSTXIHFYHKIX ',%6637'%4-8%0'3286-&98-32 *=XS*= MRQMPPMSRW 'LEVVSW'ETMXEP'SRXVMFYXMSRVITVIWIRXWXLI7GSXXWHEPI 'LEVVSWSVKERM^EXMSR WERRYEPGSRXVEGXYEPGSRXVMFYXMSRYWIH JSVHIFXWIVZMGIXSLIPTJYRHXLIWXEHMYQVILEFMPMXEXMSRERH MQTVSZIQIRXTVSNIGX4IVXLIFEWIFEPPJEGMPMXMIWEKVIIQIRXXLI 'LEVVSWWLEPPTE]ERRYEPGETMXEPGSRXVMFYXMSRWSJQMPPMSR JSV]IEVW +-%287'%4-8%0'3286-&98-32 *=XS*= MRQMPPMSRW +MERXW'ETMXEP'SRXVMFYXMSRVITVIWIRXWXLI7ER*VERGMWGS +MERXWSVKERM^EXMSR WERRYEPGSRXVEGXYEPGSRXVMFYXMSRYWIHJSV HIFXWIVZMGIXSLIPTJYRHXLIWXEHMYQVILEFMPMXEXMSRERH MQTVSZIQIRXTVSNIGX4IVXLIFEWIFEPPJEGMPMXMIWEKVIIQIRXXLI GSRXVMFYXMSRVEXI[MPPKSYTXSQMPPMSRWXEVXMRKMR*= ERHXSQMPPMSRWXEVXMRKMR*=YRXMPXLI IRHSJXLIGSRXVEGX%RMRMXMEPTE]QIRXSJQMPPMSR[EW QEHIMR*= *36)'%78 168 &9(+)8 %'89%0*36)'%78 Table of Contents +-%28778%(-910-*)'='0) BUDGET BY FUND | Stadium Facility Fund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able of Contents 78%(-91):)287 BUDGET BY FUND | Stadium Facility Fund *=XS*= MRQMPPMSRW 7XEHMYQ)ZIRXWVITVIWIRXWVIZIRYIKIRIVEXIHJVSQXLIIZIRXW LIPHSRXLIWXEHMYQGEQTYW)ZIRXWEVILIPHF]EZEVMIX]SJ HMJJIVIRXKVSYTWERHSVKERM^EXMSRWXLVSYKLSYXXLI]IEVERH EVILIPHSYXWMHISJXLI+MERXWI\GPYWMZIYWITIVMSH-XMRGPYHIW WXEHMYQYWEKIJIIWERHXLIGMX] WTIVGIRXEKISJWXEHMYQ GSRGIWWMSRVIZIRYIW8LI*=EHSTXIHFYHKIXSJ QMPPMSRMWQMPPMSRLMKLIVXLERXLI*=EHSTXIH FYHKIXQEMRP]VIWYPXMRKJVSQPMQMXIH7TVMRK8VEMRMRKHYVMRKXLI '3:-(TERHIQMGERHGSRXVEGXRIKSXMEXMSR 86%27*)67-2 8VERWJIVW-RMWXLIEYXLSVM^IHQSZIQIRXSJGEWLSVSXLIVVIWSYVGIWJVSQSXLIVJYRHWERHSVGETMXEPTVSNIGXW '-4 *=XS*= 8VERWJIVWMRJVSQXLI'ETMXEP-QTVSZIQIRX4PER '-4 MR*= VITVIWIRXSRIXMQIFSRYWIWETTVSZIHF]'SYRGMPXS EGXMZIJYPPERHTEVXXMQIIQTPS]IIWTEMHMR*=8LI JYRHMRKYWIH[EW7GSXXWHEPI%>'EVIWJYRHMRKXLEX[EWMRXLI '-4 78%(-91*%'-0-8=*92(97)7 8LI7XEHMYQ*EGMPMX]*YRHYWIWMRGPYHI4IVWSRRIP7IVZMGIW'SRXVEGXIH7IVZMGIW'SQQSHMXMIW'ETMXEP3YXPE](IFX7IVZMGIERH 8VERWJIVW3YX *36)'%78 170 &9(+)8 %'89%0*36)'%78 Table of Contents 4)67322)07)6:-')7 BUDGET BY FUND | Stadium Facility Fund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able of Contents '%4-8%03980%=7 BUDGET BY FUND | Stadium Facility Fund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able of Contents BUDGET BY FUND | Stadium Facility Fund 86%27*)67398 8VERWJIVW3YXEVIXLIEYXLSVM^IHQSZIQIRXSJGEWLXSSXLIVJYRHWERHSVGETMXEPTVSNIGXW ()&87:'14'&32(7 *=XS*= MRQMPPMSRW (IFX7ZG14'&SRHWEGGSYRXWJSVXLI+MERX W QMPPMSR  ERH'LEVVSW  QMPPMSR ERRYEPGSRXVMFYXMSRWXSXLI(IFX 7IVZMGI*YRHXSLIPTWYTTSVXXLIWXEHMYQVIRSZEXMSRTVSNIGX 8LI*=EHSTXIHFYHKIXMWQMPPMSRLMKLIVXLERXLI *=EQSYRX *36)'%78 &9(+)8 %'89%0*36)'%78 173 Table of Contents FY 2023/24 Adopted Budget 174 Table of Contents BUDGET BY FUND | Tourism Development Fund FUND PURPOSE The Tourism Development Fund is a special revenue fund created to account for Transient Occupancy Tax revenues, Property Rental from Fairmont Scottsdale Princess Hotel lease payments, and other related miscellaneous revenues. All Tourism Development Fund revenues must be used for tourism related activities. Ordinance No.4330, approved by Scottsdale City Council in March 2018, identifies the authorized expenditures to be made from this fund. Tourism Development Fund Sources (% to Total) $35.0 Million Tourism Development Fund Uses (% to Total) $43.4 Million Rounding differences may occur. 175 Table of Contents BUDGET BY FUND | Tourism Development Fund Summary Actual 2 0 2 1 /2 2 Beginning Fund Balance Destination Marketing Operating Contingency Undesignated, Unreserved Fund Balance Total Beginning Fund Balance Revenues Transient Occupancy Tax Property Rental Interest Earnings Miscellaneous (a) Transfers In CIP(b) Adopted 2 0 2 3 /2 4 2,500,000 4,775,286 7,275,286 1,751,402 2,500,000 4,547,385 8,798,787 5,112,744 2,500,000 8,458,208 16,070,952 6,859,883 2,500,000 9,194,526 18,554,409 31,862,719 3,313,797 38,255 25,000,000 2,519,163 59,080 25,000 34,942,766 3,369,163 160,115 25,000 31,448,488 3,066,671 504,510 25,000 35,214,771 7,204 - - - Subtotal 7,204 - - - 35,221,974 27,603,243 38,497,044 35,044,669 750,000 10,818,615 1,914,370 1,501,157 636,236 - 750,000 8,500,000 4,000,000 2,250,000 1,776,550 998,984 1,016 750,000 15,724,245 1,747,138 2,500,000 1,202,875 999,999 - 750,000 14,151,820 1,372,424 2,830,364 1,673,675 1,233,631 18,205 1,058 5,046 Expenditures Canal Convergence Events (c) Dest. Marketing - Contract Destination Marketing Event Retention and Development Other Commitments Tourism Development - Bed Tax Subtotal TOTAL OPERATING BUDGET Transfers Out (e) CIP Debt Svc MPC Bonds Operating Forecast 2 0 2 2 /2 3 Subtotal Total Sources Class and Comp Study (d) Leave Accrual Payments / Parental Leave Vacation Trade Adopted 2 0 2 2 /2 3 Subtotal 27,603,243 38,497,044 35,044,669 15,620,379 18,276,550 22,924,257 22,036,223 15,620,379 18,276,550 22,924,257 22,036,223 5,279,029 5,526,900 5,119,270 6,781,053 5,115,145 7,974,185 8,703,120 4,984,034 7,663,384 10,805,930 11,900,323 13,089,330 21,350,538 Total Uses 26,426,308 30,176,873 36,013,587 43,386,761 Sources Over/(Under) Uses 8,795,666 (2 , 5 7 3 , 6 3 0 ) 2,483,457 (8 , 3 4 2 , 0 9 2 ) Ending Fund Balance Destination Marketing Operating Contingency Undesignated, Unreserved Fund Balance Total Ending Fund Balance 5,112,744 2,125,000 8,833,208 16,070,952 1,751,402 2,500,000 1,973,755 6,225,157 6,859,883 2,500,000 9,194,526 18,554,409 6,859,883 2,500,000 852,434 10,212,317 (a) Beginning in FY 2022/23, Interest Earnings are now recorded in the Tourism Development Fund based on a change in interest allocation methodology. The increase in Interest Earnings is due to rising interest rates. (b) One-time bonuses approved by Council to active full and part-time employees paid in FY 2021/22. The funding used was Scottsdale AZCares funding that was in the CIP. (c) Per Financial Policy No.10, fifty percent of Transient Occupancy Tax shall be used for Destination Marketing. Beginning in FY 2022/23, a negotiated amount of 45 percent of bed tax funds collected based on the prior month's collections will be used for the Destination Marketing Contract, per Destination Marketing Services Agreement approved by Council after budget adoption, on June 21, 2022. A portion ($0.2 million) of the Destination Marketing is budgeted as a transfer out to the General Fund to support marketing efforts for the Scottsdale Stadium, WestWorld and Choose Scottsdale. (d) Anticipated cost to implement the Classification and Compensation Study recommendations. (e) Tourism will fund five capital projects in the amount of $8.7M. 176 Table of Contents BUDGET BY FUND | Tourism Development Fund Five-Year Financial Forecast Adopted 2 0 2 3 /2 4 Forecast 2 0 2 4 /2 5 Forecast 2 0 2 5 /2 6 Forecast 2 0 2 6 /2 7 Beginning Fund Balance Destination Marketing Operating Contingency Undesignated, Unreserved Fund Balance Total Beginning Fund Balance Forecast 2 0 2 7 /2 8 6,859,883 2,500,000 9,194,526 18,554,409 6,859,883 2,500,000 852,434 10,212,317 6,673,613 2,500,000 2,218,804 11,392,417 6,526,093 2,500,000 3,905,824 12,931,917 6,418,403 2,500,000 5,719,414 14,637,817 Revenues Transient Occupancy Tax Property Rental Interest Earnings Miscellaneous 31,448,488 3,066,671 504,510 25,000 27,674,600 2,698,700 581,000 25,000 28,449,600 2,774,200 656,800 25,000 29,246,200 2,851,900 507,400 25,000 30,065,000 2,931,800 489,600 25,000 Subtotal 35,044,669 - - - - - Subtotal - - - - - 35,044,669 30,979,300 31,905,600 32,630,500 33,511,400 750,000 14,151,820 1,372,424 2,830,364 1,673,675 1,233,631 18,205 1,058 5,046 750,000 12,453,600 1,370,000 2,490,900 1,100,000 1,087,300 18,600 1,100 - 750,000 12,803,000 1,370,000 2,560,600 1,100,000 1,117,900 19,000 1,100 - 750,000 13,162,200 1,370,000 2,632,300 1,100,000 1,149,300 19,400 1,100 - 750,000 13,529,900 1,370,000 2,706,000 1,100,000 1,181,700 19,800 1,100 - Transfers In CIP Total Sources Expenditures Canal Convergence Events Dest. Marketing - Contract Destination Marketing Event Retention and Development Other Commitments Tourism Development - Bed Tax Class and Comp Study (a) Parental Leave Vacation Trade Subtotal TOTAL OPERATING BUDGET Transfers Out (b) CIP Debt Svc MPC Bonds Operating 31,905,600 32,630,500 33,511,400 22,036,223 19,271,500 19,721,600 20,184,300 20,658,500 22,036,223 19,271,500 19,721,600 20,184,300 20,658,500 8,703,120 4,984,034 7,663,384 4,974,800 5,552,900 4,985,400 5,659,100 4,972,200 5,768,100 4,990,800 5,896,600 21,350,538 10,527,700 10,644,500 10,740,300 10,887,400 Total Uses 43,386,761 29,799,200 30,366,100 30,924,600 31,545,900 Sources Over/(Under) Uses (8 , 3 4 2 , 0 9 2 ) 1,180,100 1,539,500 1,705,900 1,965,500 Ending Fund Balance Destination Marketing Operating Contingency Undesignated, Unreserved Fund Balance Total Ending Fund Balance 6,859,883 2,500,000 852,434 10,212,317 6,673,613 2,500,000 2,218,804 11,392,417 6,526,093 2,500,000 3,905,824 12,931,917 6,418,403 2,500,000 5,719,414 14,637,817 6,351,653 2,500,000 7,751,664 16,603,317 (a) (b) Subtotal 30,979,300 Anticipated cost to implement the Classification and Compensation Study recommendations. Tourism will fund five capital projects in the amount of $8.7M. 177 Table of Contents BUDGET BY FUND | Tourism Development Fund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able of Contents BUDGET BY FUND | Tourism Development Fund -28)6)78)%62-2+7 *=XS*= MRQMPPMSRW &IKMRRMRKMR*=-RXIVIWX)EVRMRKWEVIVIGSVHIHMRXLI 8SYVMWQ(IZIPSTQIRX*YRHFEWIHSREGLERKIMRMRXIVIWX EPPSGEXMSRQIXLSHSPSK]-RXIVIWX)EVRMRKWEVIKIRIVEXIHSR MHPI8SYVMWQ(IZIPSTQIRX*YRHGEWLFEPERGIWXLVSYKLSYXXLI ]IEV8LMWVIZIRYIMWEJYRGXMSRSJXLIVIPEXMSRWLMTFIX[IIRXLI GMX]’WEZEMPEFPIGEWLFEPERGIERHXLIMRXIVIWXVEXI8LIGMX] IEVRWMRXIVIWXSRJYRHWXLVSYKLZEVMSYWMRZIWXQIRXZILMGPIWMR 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8SYVMWQ(IZIPSTQIRX*YRHYWIWEVITVIWIRXIHF]YWISJJYRHWEGGSVHMRKXS*MRERGMEP4SPMG]2SXLEXIWXEFPMWLIWXLIEPPSGEXMSR SJ8VERWMIRX3GGYTERG]8E\GSPPIGXMSRWXSHMJJIVIRXXSYVMWQVIPEXIHTYVTSWIW '%2%0'32:)6+)2')):)287 *=XS*= MRQMPPMSRW 'EREP'SRZIVKIRGI)ZIRXWMRGPYHIWJYRHMRKJSVEXIRHE] PEVKIWGEPITYFPMGEVXIZIRXMRERHEVSYRHXLI%VM^SRE'EREPEX XLI7GSXXWHEPI;EXIVJVSRX8LI*=EHSTXIHFYHKIXMW QMPPMSR[LMGLVIQEMRWJPEXJVSQXLI*=EHSTXIH FYHKIX *36)'%78 180 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Tourism Development Fund ()781%6/)8-2+'3286%'8 *=XS*= MRQMPPMSRW 4IV*MRERGMEP4SPMG]2STIVGIRXSJXLI8VERWMIRX 3GGYTERG]8E\ &IH8E\ VIGIMZIHF]XLIGMX]MWYWIHJSV HIWXMREXMSRQEVOIXMRKTYVTSWIW4VMSVXS*=XLI XSXEPMX]SJXLMWEPPSGEXMSR[EWYXMPM^IHXLVSYKLEGSRXVEGX[MXL )\TIVMIRGI7GSXXWHEPI&IKMRRMRKMR*=TIVXLIRI[ )\TIVMIRGI7GSXXWHEPI(IWXMREXMSR1EVOIXMRK7IVZMGIW %KVIIQIRXETTVSZIHF]'MX]'SYRGMPSR.YRIXLI TE]QIRXXS)\TIVMIRGI7GSXXWHEPI[MPPFIIUYEPXSTIVGIRX SJ&IH8E\GSPPIGXMSRW8LI*=EHSTXIHFYHKIXSJ QMPPMSRMWQMPPMSRLMKLIVXLERXLI*= 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’ FYHKIXERHEGXYEPWXLEXEVIHMWTPE]IHMRXLIKVETLWEVIJSV GSQTEVMWSRTYVTSWIWSRP]EWXLII\TIRHMXYVIWEVIEGXYEPP]VIGSVHIHERHVITSVXIHEWTEVXSJXLIETTPMGEFPIHMZMWMSR’WYWIW &IKMRRMRKMR*=HYIXSEREHQMRMWXVEXMZIGLERKIQSWXRSRHMZMWMSREPYWIWEVIMRMXMEPP]TPEGIHMRXSXLIHMZMWMSRWMRWXIEHSJ EXEQEGVSPIZIPXLIRQSZMRKXLIFYHKIXXSEQEGVSPIZIPLSPHMRKEGGSYRXEXXLIFIKMRRMRKSJXLIJMWGEP]IEVERHGSQTPIXMRKFYHKIX XVERWJIVWXSQSZIXLIRIIHIHFYHKIXFEGOXSXLIETTPMGEFPIHMZMWMSRWEWI\TIRHMXYVIWSGGYV8LIEHQMRMWXVEXMZIGLERKIMWMRER IJJSVXXSLEZIQSVIQIERMRKJYP]IEVSZIV]IEVGSQTEVMWSRW *36)'%78 182 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Tourism Development Fund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able of Contents BUDGET BY FUND | Tourism Development Fund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able of Contents BUDGET BY FUND | Tourism Development Fund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’WJMRERGMEPGSRHMXMSRERHTVSZMHIWJSVYRI\TIGXIHIGSRSQMGGLEPPIRKIW8LIWTIGMJMGQEOIYTSJXLI 8SYVMWQ(IZIPSTQIRX*YRHIRHMRKFEPERGIMWRSXIHFIPS[ ()78-2%8-321%6/)8-2+ *=XS*= MRQMPPMSRW (IWXMREXMSR1EVOIXMRKLSPHWXLITSVXMSRSJXLIIRHMRKJYRH FEPERGIVIWYPXMRKJVSQYRWTIRXHIWXMREXMSRQEVOIXMRK EPPSGEXMSRW4IV*MRERGMEP4SPMG]2STIVGIRXSJXLI 8VERWMIRX3GGYTERG]8E\ &IH8E\ VIGIMZIHF]XLIGMX]MWYWIH JSVHIWXMREXMSRQEVOIXMRKTYVTSWIW8LI*=8SYVMWQ (IZIPSTQIRX*YRH(IWXMREXMSR1EVOIXMRKIRHMRKFEPERGIMW QMPPMSR *36)'%78 &9(+)8 %'89%0*36)'%78 185 Table of Contents BUDGET BY FUND | Tourism Development Fund 34)6%8-2+'328-2+)2'= *=XS*= MRQMPPMSRW 3TIVEXMRK'SRXMRKIRG]MRGPYHIWQMPPMSRSJFYHKIX EYXLSVM^EXMSRMRXLIIZIRXXLEXYRJSVIWIIRI\TIRWIWSGGYV HYVMRKXLIJMWGEP]IEV'SRXMRKIRG]JYRHWEVIYXMPM^IHSRP]EJXIV EPPFYHKIXSTXMSRWLEZIFIIRGSRWMHIVIHERHVIUYMVIW'MX] 'SYRGMPETTVSZEP 92()7-+2%8)(926)7)6:)(*92(&%0%2') *=XS*= MRQMPPMSRW 9RHIWMKREXIH9RVIWIVZIH*YRH&EPERGIEGGSYRXWJSVER] JYRHWVIQEMRMRKEJXIVXLIHIWMKREXMSRSJEPPSXLIV VIWIVZIWYWIW8LI*=9RHIWMKREXIH9RVIWIVZIH *YRHFEPERGIMWQMPPMSR *36)'%78 186 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Transportation Fund FUND PURPOSE The State of Arizona requires the city to establish and maintain an accounting for Highway User Tax revenue. The Transportation Fund receives and expends the city’s allocation of the Arizona Highway User Tax which is allocated based on the official U.S. Census Bureau population estimate, as directed by Statute. These monies must be used for street construction, reconstruction, or maintenance. The fund also accounts for other transportation related revenues as well as for the 1989 voter approved Sales Tax - Transportation of 0.20 percent, which is dedicated funding for transportation improvements and operations.Note: Beginning October 2019, the 2018 voter approved Sales Tax – Transportation of 0.10 percent of the city’s sales tax dedicated solely to the Arterial Life Cycle Program transportation capital project is being recorded directly in the Capital Improvement Plan versus a Transfer Out to CIP from the Transportation Fund. Transportation Fund Sources (% to Total) $52.0 Million Transportation Fund Uses (% to Total) $66.1 Million Rounding differences may occur. 187 Table of Contents BUDGET BY FUND | Transportation Fund Summary Actual 2 0 2 1 /2 2 Beginning Fund Balance Operating Contingency Operating Reserve Undesignated, Unreserved Fund Balance Total Beginning Fund Balance R e v e nue s Sales Tax - Transportation (0.20%) Highway User Tax Interest Earnings (a) Local Transportation Assistance Fund Intergovernmental Miscellaneous Property Rental T r a ns f e r s I n CIP Forecast 2 0 2 2 /2 3 A d op t e d 2 0 2 3 /2 4 500,000 2,040,590 29,740,777 3 2 ,2 8 1 ,3 6 7 500,000 2,902,913 28,256,267 3 1 ,6 5 9 ,1 8 0 500,000 2,239,936 34,496,851 3 7 ,2 3 6 ,7 8 7 500,000 2,890,691 37,722,292 4 1 ,1 1 2 ,9 8 3 31,321,136 18,987,730 608,013 81,070 81,740 950 28,839,830 18,648,000 244,760 640,000 90,000 23,430 5,844 32,567,536 17,820,042 663,335 580,384 90,000 23,430 5,844 30,932,799 18,848,335 1,522,193 610,000 87,800 21,200 5,844 S ub t o t a l 5 1 ,0 8 0 ,6 3 9 S ub t o t a l 1 7 2 ,8 4 3 - - - 5 1 ,2 5 3 ,4 8 2 4 8 ,4 9 1 ,8 6 4 5 1 ,7 5 0 ,5 7 1 5 2 ,0 2 8 ,1 7 1 20,378,669 66,778 1,935,114 18,800 - 26,982,350 70,015 2,102,042 18,800 170,000 (360,000) 45,921 25,027,037 69,736 2,102,068 18,800 901,926 140,546 (92,356) 739,154 - 29,894,026 2,255,183 18,800 248,635 209,626 (360,000) 39,025 (b) Total Sources Expenditures Public Works (c) City Treasurer Community Services Administrative Services Class and Comp Study (d) Fuel and Maint and Repair (e) Leave Accrual Payments / Parental Leave Operating Impacts Savings from Vacant Positions Utilities (e) Vacation Trade A d op t e d 2 0 2 2 /2 3 S ub t o t a l TOTAL OPERATING BUDGET 172,843 4 8 ,4 9 1 ,8 6 4 - 5 1 ,7 5 0 ,5 7 1 5 2 ,0 2 8 ,1 7 1 - - 2 2 ,3 9 9 ,3 6 1 2 9 ,0 2 9 ,1 2 8 2 8 ,9 0 6 ,9 1 1 3 2 ,3 0 5 ,2 9 5 22,399,361 29,029,128 28,906,911 32,305,295 23,660,568 238,132 17,019,915 83,696 18,883,768 83,696 33,566,400 271,634 Transfers Out CIP (f) CIP Technology S ub t o t a l 2 3 ,8 9 8 ,7 0 0 1 7 ,1 0 3 ,6 1 1 1 8 ,9 6 7 ,4 6 4 3 3 ,8 3 8 ,0 3 4 T o t a l Us e s 4 6 ,2 9 8 ,0 6 1 4 6 ,1 3 2 ,7 3 9 4 7 ,8 7 4 ,3 7 5 6 6 ,1 4 3 ,3 2 9 Sources Over/(Under) Uses 4 ,9 5 5 ,4 2 0 2 ,3 5 9 ,1 2 5 3 ,8 7 6 ,1 9 6 ( 1 4 ,1 1 5 ,1 5 8 ) Ending Fund Balance Operating Contingency Operating Reserve Undesignated, Unreserved Fund Balance Total Ending Fund Balance 500,000 2,239,936 34,496,851 3 7 ,2 3 6 ,7 8 7 500,000 2,902,913 30,615,392 3 4 ,0 1 8 ,3 0 5 250,000 2,890,691 37,972,292 4 1 ,1 1 2 ,9 8 3 500,000 3,230,530 23,267,295 2 6 ,9 9 7 ,8 2 5 (a) Increase in Interest Earnings is due to rising interest rates. One-time bonuses approved by Council to active full and part-time employees paid in FY 2021/22. The funding used was Scottsdale AZ Cares funding that was in the CIP. (c) Starting in FY 2023/24, the City Treasurer Division will no longer expense staff salary to the Transportation Fund. (d) Anticipated cost to implement the Classification and Compensation Study recommendations. (e) Budget adopted at the division level. At the start of the fiscal year the budget moves to a non-divisional account and then is transferred back to the divisions monthly as expenses occur. (f) In FY 2023/24, the Transportation Department will transfer $15.5 million from the Undesignated, Unreserved Fund Balance to fund capital projects. (b) 188 Table of Contents BUDGET BY FUND | Transportation Fund Five-Year Financial Forecast Beginning Fund Balance Operating Contingency Operating Reserve Undesignated, Unreserved Fund Balance Total Beginning Fund Balance R e v e nue s Sales Tax - Transportation (0.20%) Highway User Tax Interest Earnings (a) Local Transportation Assistance Fund Intergovernmental Miscellaneous Property Rental T r a ns f e r s I n CIP Forecast 2 0 2 4 /2 5 Forecast 2 0 2 5 /2 6 Forecast 2 0 2 6 /2 7 Forecast 2 0 2 7 /2 8 500,000 2,890,691 37,722,292 4 1 ,1 1 2 ,9 8 3 500,000 3,230,530 23,267,295 2 6 ,9 9 7 ,8 2 5 500,000 3,317,990 24,736,035 2 8 ,5 5 4 ,0 2 5 500,000 3,467,580 26,258,245 3 0 ,2 2 5 ,8 2 5 500,000 3,590,830 28,983,095 3 3 ,0 7 3 ,9 2 5 30,932,799 18,848,335 1,522,193 610,000 87,800 21,200 5,844 31,394,400 19,319,500 1,679,000 610,000 89,600 31,200 5,800 32,532,100 20,092,300 1,901,200 610,000 91,300 31,200 5,800 33,531,000 20,494,200 1,498,100 610,000 93,200 26,200 5,800 34,564,400 20,904,100 1,483,900 610,000 95,000 20,200 5,800 S ub t o t a l 5 2 ,0 2 8 ,1 7 1 S ub t o t a l - - - - - 5 2 ,0 2 8 ,1 7 1 5 3 ,1 2 9 ,5 0 0 5 5 ,2 6 3 ,9 0 0 5 6 ,2 5 8 ,5 0 0 5 7 ,6 8 3 ,4 0 0 29,894,026 2,255,183 18,800 248,635 209,626 (360,000) 39,025 30,806,800 1,963,800 18,800 254,300 214,400 290,000 (368,200) - 31,982,900 2,008,400 19,700 259,300 218,600 562,400 (375,500) - 33,123,900 2,053,200 20,700 264,400 223,000 606,000 (382,900) - 34,765,400 2,106,000 21,800 269,700 227,400 122,400 (390,500) - Total Sources Expenditures Public Works City Treasurer Community Services Administrative Services Class and Comp Study (b) Fuel and Maint and Repair Leave Accrual Payments / Parental Leave Operating Impacts Savings from Vacant Positions Utilities Vacation Trade A d op t e d 2 0 2 3 /2 4 S ub t o t a l TOTAL OPERATING BUDGET - 5 3 ,1 2 9 ,5 0 0 - 5 5 ,2 6 3 ,9 0 0 - 5 6 ,2 5 8 ,5 0 0 - 5 7 ,6 8 3 ,4 0 0 - 3 2 ,3 0 5 ,2 9 5 3 3 ,1 7 9 ,9 0 0 3 4 ,6 7 5 ,8 0 0 3 5 ,9 0 8 ,3 0 0 3 7 ,1 2 2 ,2 0 0 32,305,295 33,179,900 34,675,800 35,908,300 37,122,200 33,566,400 271,634 18,297,200 96,200 18,866,100 50,200 17,421,400 80,700 17,282,200 101,300 Transfers Out CIP (c) CIP Technology S ub t o t a l 3 3 ,8 3 8 ,0 3 4 1 8 ,3 9 3 ,4 0 0 1 8 ,9 1 6 ,3 0 0 1 7 ,5 0 2 ,1 0 0 1 7 ,3 8 3 ,5 0 0 T o t a l Us e s 6 6 ,1 4 3 ,3 2 9 5 1 ,5 7 3 ,3 0 0 5 3 ,5 9 2 ,1 0 0 5 3 ,4 1 0 ,4 0 0 5 4 ,5 0 5 ,7 0 0 Sources Over/(Under) Uses ( 1 4 ,1 1 5 ,1 5 8 ) 1 ,5 5 6 ,2 0 0 1 ,6 7 1 ,8 0 0 2 ,8 4 8 ,1 0 0 3 ,1 7 7 ,7 0 0 Ending Fund Balance Operating Contingency Operating Reserve Undesignated, Unreserved Fund Balance Total Ending Fund Balance 500,000 3,230,530 23,267,295 2 6 ,9 9 7 ,8 2 5 500,000 3,317,990 24,736,035 2 8 ,5 5 4 ,0 2 5 500,000 3,467,580 26,258,245 3 0 ,2 2 5 ,8 2 5 500,000 3,590,830 28,983,095 3 3 ,0 7 3 ,9 2 5 500,000 3,712,220 32,039,405 3 6 ,2 5 1 ,6 2 5 (a) Increase in Interest Earnings is due to rising interest rates. Anticipated cost to implement the Classification and Compensation Study recommendations. (c) In FY 2023/24, the Transportation Department will transfer $15.5 million from the Undesignated, Unreserved Fund Balance to fund capital projects. (b) 189 Table of Contents BUDGET BY FUND | Transportation Fund TRANSPORTATION FUND SOURCES Transportation Fund sources for FY 2023/24 equal $52.0 million which is a increase of $3.5 million from the FY 2022/23 adopted budget primarily related to strong consumer demand and spending reflected mostly in Sales Tax - Transportation (0.20%) revenue as well as increased interest rates. The same methodology for developing the Sales Tax budgeted in the General Fund is also used for the Transportation Fund. SALES TAX - TRANSPORTATION (0.20%) FY 2019/20 to FY 2025/26 (in millions) Sales Tax - Transportation (0.20%) represents the 0.20 percent of the city’s sales tax dedicated solely to transportation. Please note that while the rate is the same for the Transportation and 1995 Preservation Sales Tax, there is a difference between the revenue amounts, which is attributable to differences in the taxing provisions for each of the revenues. The adopted FY 2023/24 budget of $30.9 million represents an increase of $2.1 million, or 7.3 percent, over the FY 2022/23 adopted budget due to strong consumer demand and spending. HIGHWAY USER TAX FY 2019/20 to FY 2025/26 (in millions) Highway User Tax, also known as the gas tax or the Highway User Revenue Fund (HURF), is distributed by the State of Arizona. The state constitution requires that all highway user revenue be used solely for street, highway or transit purposes. Cities and towns receive 27.5 percent of the highway user revenue fund, of which one half of the monies are distributed based on population of all incorporated cities and towns in the state. The remaining half is distributed based on 'county of origin' of gasoline sales and the relation of the city or town's population to the total incorporated population of Maricopa County. The adopted FY 2023/24 budget of $18.8 million represents a $0.2 million increase from the FY 2022/23 adopted budget. *36)'%78 190 &9(+)8 %'89%0*36)'%78 Table of Contents INTEREST EARNINGS BUDGET BY FUND | Transportation Fund FY 2019/20 to FY 2025/26 (in millions) Interest Earnings are generated on idle General Fund cash balances throughout the year. This revenue is a function of the relationship between the city’s available cash balance and the interest rate. The city earns interest on funds through various investment vehicles in accordance with Arizona Revised Statutes and City Ordinance. The city’s investment policy stresses safety above yield. Interest Earnings revenue is budgeted at $1.5 million in FY 2023/24 an increase of $0.8 million due to increased interest rates. LOCAL TRANSPORTATION ASSISTANCE FUND FY 2019/20 to FY 2025/26 (in millions) Local Transportation Assistance Fund supports the development and operation of a comprehensive multi-modal public transportation program in Arizona. The funding for this program comes from lottery proceeds and it is distributed to cities and towns through an annual application process. The amounts available to cities and towns are capped based on population. The FY 2023/24 budget for this revenue is $0.6 million, which represents the entire allocation available to the city. INTERGOVERNMENTAL FY 2019/20 to FY 2025/26 (in millions) Intergovernmental represents the city’s allocation of the halfcent sales tax for transportation improvements approved in Proposition 400 by Maricopa County voters in November 2004. This revenue, through the Transportation Fund, funds the American's with Disabilities Act (ADA) Cab Connection Rides program, which addresses the transportation needs of people with disabilities within the city. The FY 2023/24 budget is $0.1 million, which is flat when compared to the FY 2022/23 adopted budget. *36)'%78 &9(+)8 %'89%0*36)'%78 191 Table of Contents BUDGET BY FUND | Transportation Fund MISCELLANEOUS FY 2019/20 to FY 2025/26 Miscellaneous includes various revenues the city receives in the Transportation Fund during any given year that are not attributable to one of the specific revenue categories previously noted. The FY 2023/24 budget of $21,200 represents a slight decrease from the FY 2022/23 adopted budget. PROPERTY RENTAL FY 2019/20 to FY 2025/26 Property Rental represents revenue received from a transportation services business use of office space at the South Corporation Yard. The adopted FY 2023/24 budget for Property Rental is $5,844. *36)'%78 192 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Transportation Fund TRANSFERS IN Transfers In is the authorized movement of cash or other resources from other funds and/or capital projects. The total amount of Transfers In for FY 2023/24 is $0.0 million. More specific information is detailed below. CIP FY 2019/20 to FY 2025/26 (in millions) For FY 2021/22, City Council authorized a one-time bonus to active full and part-time employees paid in FY 2021/22. The funding used was Scottsdale AZ Cares funding that was in the CIP. For FY 2020/21, City Council authorized a Transfer In totaling $1.8 million related to the Crossroads East Development agreement for a roadway segment. These funds are to be used towards the future reimbursement of public infrastructure costs. For FY 2019/20, City Council authorized a Transfer In totaling $1.2 million to reimburse the Transportation Fund for its contribution to the Drinkwater Bridge Structural Repairs capital project. The Maricopa Association of Governments (MAG) reimbursed the capital project with Proposition 400 funding so the contribution from the Transportation Fund was no longer needed. TRANSPORTATION FUND USES The Transportation Fund uses for FY 2023/24 is $66.1 million and represents expenses by division, additional non-divisional operating categories, and transfers out to the CIP. PUBLIC WORKS FY 2019/20 to FY 2025/26 (in millions) The expenditures for Public Works include alley maintenance, streets cleaning, lighting maintenance, and traffic signal maintenance. The adopted FY 2023/24 Public Works budget of $29.9 million is an increase of $2.9 million from the FY 2022/23 adopted budget of $27.0 million. The increase is mainly due to the higher anticipated costs across all commodities due to global conditions, supply chain challenges, and the addition of three Street Equipment Operator positions and necessary equipment. *36)'%78 &9(+)8 %'89%0*36)'%78 193 Table of Contents BUDGET BY FUND | Transportation Fund CITY TREASURER FY 2019/20 to FY 2025/26 This budget was used to partially fund a Sr. Budget Analyst position within the City Treasurer Division. The position is primarily dedicated to supporting the complex operating and capital financial needs within the Transportation Fund. The FY 2023/24 adopted budget is $0 as this position will become fully funded by the General Fund. COMMUNITY SERVICES FY 2019/20 to FY 2025/26 (in millions) Community Services represents the contracted landscaping of medians and right-of-ways. The FY 2023/24 adopted budget of $2.3 million represents an increase of $0.2 million when compared to the FY 2022/23 adopted budget. The increase represents one-time funding for irrigation replacement, new granite, and revegetation along Scottsdale Road. ADMINISTRATIVE SERVICES FY 2019/20 to FY 2025/26 Administrative Services includes software supported by the Transportation Fund which is administered by the Information Technology (IT) Department. The FY 2023/24 adopted budget is $18,800. *36)'%78 194 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Transportation Fund NON-DIVISIONAL USES Non-Divisional Uses are items that were budgeted in citywide macro level holding accounts. As expenditures occur in the applicable divisions, budget transfers are completed to move the needed budget from the macro level holding accounts to the respective divisions. Therefore, the FY 2022/23 year-end forecast and prior years’ budget and actuals that are displayed in the graphs are for comparison purposes only as the expenditures are actually recorded and reported as part of the applicable division’s uses. Beginning in FY 2020/21 due to an administrative change, most non-divisional uses are initially placed into the divisions instead of at a macro level; then moving the budget to a macro level holding account at the beginning of the fiscal year, and completing budget transfers to move the needed budget back to the applicable divisions as expenditures occur. The administrative change is in an effort to have more meaningful year-over-year comparisons. CLASS AND COMP STUDY FY 2019/20 to FY 2025/26 (in millions) The Class and Comp Study reflects the anticipated cost to implement the recommendations from the Public Service Personnel Consultants Classification and Compensation study that will take place in late 2023. The FY 2023/24 Class and Comp Study is estimated at $0.2 million. FUEL AND MAINT AND REPAIR FY 2019/20 to FY 2025/26 (in millions) Fuel and Maint and Repair are budgeted at the division level and then at the beginning of the fiscal year are moved to a macro account. Budgeting on a macro level is a tool used by the budget department to more accurately track how expenses are occurring by each division. Fuel and Maint and Repair includes expenses related to vehicle and equipment repairs and fuel usage. The adopted FY 2023/24 Fuel and Maint and Repair is budgeted at $2.3 million at the division level. *36)'%78 &9(+)8 %'89%0*36)'%78 195 Table of Contents BUDGET BY FUND | Transportation Fund LEAVE ACCRUAL PAYMENTS / PARENTAL LEAVE FY 2019/20 to FY 2025/26 Leave Accrual Payments include accumulated medical and/or vacation leave paid out at the time of retirement or separation from the city. Parental Leave allows for a four-week paid leave for new parents. The total FY 2023/24 Leave Accrual Payments / Parental Leave budget is $209,626, which includes $85,000 budgeted for medical leave accrual payouts, $105,000 budgeted for vacation accrual payouts, and $19,626 budget for parental leave. OPERATING IMPACTS FY 2019/20 to FY 2025/26 (in millions) Operating Impacts are additional costs associated with future Capital Improvement Plan (CIP) projects that impact the operating budget such as positions, facilities maintenance, utilities, and annual software maintenance. FY 2024/25 and FY 2025/26 are forecasted at $0.3 million and $0.6 million respectively based on the current approved CIP projects. SAVINGS FROM VACANT POSITIONS FY 2019/20 to FY 2025/26 (in millions) The amount of savings achieved from vacant positions for FY 2023/24 is estimated at ($0.4) million. *36)'%78 196 &9(+)8 %'89%0*36)'%78 Table of Contents UTILITIES BUDGET BY FUND | Transportation Fund *=XS*= MRQMPPMSRW Utilities are budgeted at the division level and then at the beginning of the year are moved to a macro account. Budgeting on a macro level is a tool used by the Budget Department to more accurately track how expenses are occurring by each division. Utilities include city expenses on water, electric, sewer, gas, solid waste and recycling services. The FY 2023/24 Utilities budget is $1.8 million which is an increase of $0.2 million when compared to the FY 2022/23 adopted budget. VACATION TRADE *=XS*= The Vacation Trade program allows employees who have been employed by the city for five years or more and who have used at least 80 hours of vacation (112 hours for 56 hour employees) during the approved eligibility period, may elect to trade up to 40 hours (56 hours for 56 hour employees) of vacation for equivalent compensation. A Vacation Trade program was not approved for FY 2020/21 and FY 2021/22. *36)'%78 &9(+)8 %'89%0*36)'%78 197 Table of Contents BUDGET BY FUND | Transportation Fund TRANSFERS OUT Transfers Out are the authorized movement of cash to other funds and/or capital projects. CIP FY 2019/20 to FY 2025/26 (in millions) The FY 2023/24 budget includes a $33.6 million transfer of the Sales Tax - Transportation (0.20%) revenue, which is comprised of 50 percent of the revenue collected per Budget Governing Guidance No. 5, to the Capital Improvement Plan (CIP); as well as a Highway User Revenue Fund (HURF) transfer designated for the Pavement Overlay Program project. CIP TECHNOLOGY FY 2019/20 to FY 2025/26 (in millions) CIP Technology is the authorized transfer to CIP to fund technology related capital projects. The FY 2023/24 adopted budget is $0.3 million. TRANSPORTATION FUND ENDING BALANCE Fund balance/contingency/reserves protect the city’s financial condition and provide for unexpected economic challenges. The specific make-up of the city’s Transportation Fund Ending Balance is noted in the following: *36)'%78 198 &9(+)8 %'89%0*36)'%78 Table of Contents OPERATING CONTINGENCY BUDGET BY FUND | Transportation Fund *=XS*= MRQMPPMSRW Operating Contingency includes $0.5 million of budget authorization in the event that unforeseen expenses occur during the fiscal year. Contingency funds are utilized only after all budget options have been considered and require City Council approval. OPERATING RESERVE *=XS*= MRQMPPMSRW Per Financial Policy No. 2.03, the city's transportation operating reserve shall be 10 percent of the annual Transportation Fund operating budget, and shall be used for unforeseen emergencies or catastrophic impacts to the city related to transportation. The FY 2023/24 Transportation Fund operating reserve is $3.2 million. UNDESIGNATED, UNRESERVED FUND BALANCE *=XS*= MRQMPPMSRW The Undesignated, Unreserved Fund Balance accounts for any remaining funds after the designation of all other reserves/uses. The FY 2023/24 ending undesignated, unreserved fund balance is $23.3 million. Under prudent fiscal management practices, this balance should most appropriately be used for one-time expenditures, not to fund new or to expand programs with ongoing operating expenses. *36)'%78 &9(+)8 %'89%0*36)'%78 199 Table of Contents FY 2023/24 Adopted Budget 200 Table of Contents BUDGET BY FUND | Debt Service Fund FUND PURPOSE This fund accounts for the accumulation of resources for, and the payment of, long-term debt principal and interest that are not serviced by the General, Enterprise or Special Revenue Funds. Contracts Payable and certificates of participation for contractual debt such as sales tax development agreements, are serviced by the General Fund and will vary based on the actual sales tax collections at each development site. The applicable sources, uses and ending fund balance of the Debt Service Fund are described in further detail in the following sections. Debt Service Fund Sources (% to Total) $89.8 Million Debt Service Fund Uses (% to Total) $91.5 Million Rounding differences may occur. 201 Table of Contents BUDGET BY FUND | Debt Service Fund Summary A c tu a l 2 0 2 1 /2 2 Adopted 2 0 2 2 /2 3 Forecast 2 0 2 2 /2 3 Adopted 2 0 2 3 /2 4 B e g i n n i n g Fu n d B a l a n c e Debt Stabilization Reserve GO Debt Service Reserve - Non Preserve Total Beginning Fund Balance 5,055,080 3,469,053 8, 524, 133 5,055,080 8,469,793 13, 524, 873 5,055,080 8,713,394 13, 768, 474 5,055,080 3,613,394 8, 668, 474 Revenues Property Tax Interest Income Non-pooled 34,911,861 6 30,055,758 - 30,055,758 - 35,656,731 - 34, 911, 867 30, 055, 758 30, 055, 758 35, 656, 731 31,937,859 20,581,445 1,420,010 33,439,242 18,627,000 - 33,439,242 18,626,845 - 35,354,537 18,747,987 - 53, 939, 314 52, 066, 242 52, 066, 087 54, 102, 524 88, 851, 181 82, 122, 000 82, 121, 845 89, 759, 255 30,078,393 31,526,989 20,581,448 1,420,010 35,155,758 33,439,242 18,627,000 - 35,155,758 33,439,242 18,626,845 - 37,356,731 35,354,537 18,747,986 - 83, 606, 840 87, 222, 000 87, 221, 845 91, 459, 254 83,606,840 87,222,000 87,221,845 91,459,254 Total Uses 83, 606, 840 87, 222, 000 87, 221, 845 91, 459, 254 Sources Over/(Under) Uses 5, 244, 341 ( 5, 100, 000) ( 5, 100, 000) ( 1, 699, 999) E n d i n g Fu n d B a l a n c e Debt Stabilization Reserve GO Debt Service Reserve - Non Preserve Total Ending Fund Balance 5,055,080 8,713,394 13, 768, 474 5,055,080 3,369,793 8, 424, 873 5,055,080 3,613,394 8, 668, 474 5,055,081 1,913,394 6, 968, 475 Subtotal T ra n s f e rs I n Debt Svc GO Bonds Debt Svc MPC Bonds Debt Svc SPA Bonds(a) Subtotal Total Sources Debt Service GO Debt Service - Non Preserve GO Debt Service - Preserve MPC Excise Debt SPA Debt Service(a) TOTAL OPERATING BUDGET (a) Subtotal The final payment for the repayment of the Scottsdale Preserve Authority Bonds occurred in FY 2021/22. 202 Table of Contents BUDGET BY FUND | Debt Service Fund Five-Year Financial Forecast Adopted 2 0 2 3 /2 4 Forecast 2 0 2 4 /2 5 Forecast 2 0 2 5 /2 6 Forecast 2 0 2 6 /2 7 B e g i n n i n g Fu n d B a l a n c e Debt Stabilization Reserve GO Debt Service Reserve - Non Preserve Total Beginning Fund Balance 5,055,080 3,613,394 8, 668, 474 5,055,081 1,913,394 6, 968, 475 5,055,081 1,913,394 6, 968, 475 5,055,081 1,913,394 6, 968, 475 Revenues Property Tax Interest Income Non-pooled 35,656,731 - 31,101,100 - 33,166,400 - 37,449,800 - 35, 656, 731 31, 101, 100 33, 166, 400 37, 449, 800 35,354,537 18,747,987 - 38,849,700 18,852,500 - 24,670,700 18,987,300 - 18,798,800 19,221,400 - 54, 102, 524 57, 702, 200 43, 658, 000 38, 020, 200 Total Sources 89, 759, 255 88, 803, 300 76, 824, 400 75, 470, 000 Debt Service GO Debt Service - Non Preserve GO Debt Service - Preserve MPC Excise Debt SPA Debt Service 37,356,731 35,354,537 18,747,986 - 31,101,100 38,849,700 18,852,500 - 33,166,400 24,670,700 18,987,300 - 37,449,800 18,798,800 19,221,400 - 91, 459, 254 88, 803, 300 76, 824, 400 75, 470, 000 91,459,254 88,803,300 76,824,400 75,470,000 Total Uses 91, 459, 254 88, 803, 300 76, 824, 400 75, 470, 000 Sources Over/(Under) Uses ( 1, 699, 999) - - - E n d i n g Fu n d B a l a n c e Debt Stabilization Reserve GO Debt Service Reserve - Non Preserve Total Ending Fund Balance 5,055,081 1,913,394 6, 968, 475 5,055,081 1,913,394 6, 968, 475 5,055,081 1,913,394 6, 968, 475 5,055,081 1,913,394 6, 968, 475 Subtotal T ra n s f e rs I n Debt Svc GO Bonds Debt Svc MPC Bonds Debt Svc SPA Bonds Subtotal Subtotal TOTAL OPERATING BUDGET 203 Table of Contents BUDGET BY FUND | Debt Service Fund ()&87)6:-')*92(7396')7 (IFX7IVZMGI*YRHWSYVGIWJSV*=IUYEPQMPPMSR7SYVGIWMRGPYHI4VSTIVX]8E\-RXIVIWX-RGSQI2SRTSSPIHERH 8VERWJIVW-R 4634)68=8%< *=XS*= MRQMPPMSRW 4VSTIVX]8E\VITVIWIRXWXLIWIGSRHEV]TSVXMSRSJXLITVSTIVX] XE\XLEXMWPMQMXIHF]WXEXIWXEXYIERHPIZMIHXSVITE]HIFX WIVZMGISRZSXIVETTVSZIH+IRIVEP3FPMKEXMSR +3 FSRHW8LI GMX]MWWYIW+IRIVEP3FPMKEXMSRFSRHWJSVMQTVSZIQIRXWXS WXVIIXWFVMHKIWXVERWTSVXEXMSRW]WXIQWTEVOWERHXVEMPW HVEMREKIW]WXIQWERHTYFPMGWEJIX]ERHQYRMGMTEPJEGMPMXMIW 8LI*=PIZ]EQSYRX VIZIRYI MWQMPPMSR -28)6)78-2'31)2324330)( *=XS*= -RXIVIWX-RGSQI2SRTSSPIHMWMRXIVIWXVIZIRYIHIVMZIHJVSQ 1YRMGMTEP4VSTIVX]'SVTSVEXMSR 14' &SRHW[LMGLMW VIGIMZIHSRERMVVIKYPEVFEWMW 86%27*)67-2 8VERWJIVW-RMWXLIEYXLSVM^IHQSZIQIRXSJGEWLSVSXLIVVIWSYVGIWJVSQSXLIVJYRHWERHSVGETMXEPTVSNIGXW8LI*= EHSTXIHFYHKIXMRGPYHIWQMPPMSRMR8VERWJIVW-R1SVIWTIGMJMGMRJSVQEXMSRMWHIXEMPIHFIPS[ *36)'%78 204 &9(+)8 %'89%0*36)'%78 Table of Contents ()&87:'+3&32(7 BUDGET BY FUND | Debt Service Fund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able of Contents BUDGET BY FUND | Debt Service Fund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able of Contents 14')<'-7)()&8 BUDGET BY FUND | Debt Service Fund *=XS*= MRQMPPMSRW 14')\GMWI(IFXVITVIWIRXW1YRMGMTEP4VSTIVX]'SVTSVEXMSR FSRHW[LMGLEVIRSRZSXIVETTVSZIHERHMWWYIHF]XLI'MX]SJ 7GSXXWHEPI1YRMGMTEP4VSTIVX]'SVTSVEXMSRERSRTVSJMX GSVTSVEXMSRGVIEXIHF]XLIGMX]MRJSVXLIWSPITYVTSWISJ GSRWXVYGXMRKEGUYMVMRKERHIUYMTTMRKFYMPHMRKWWXVYGXYVIWSV MQTVSZIQIRXWSRPERHS[RIHF]XLIGMX]8LIHIFXMRGYVVIHF] XLIGSVTSVEXMSRMWEGMX]SFPMKEXMSRERHXLIVITE]QIRXSJHIFX MWJMRERGIHF]+IRIVEP*YRHWEPIWXE\IW8SYVMWQ(IZIPSTQIRX *YRHFIHXE\VIGIMTXWIXG4IV*MRERGMEP4SPMG]2SRSR ZSXIVETTVSZIHHIFX[MPPFIYXMPM^IHSRP][LIREHIHMGEXIH VIZIRYIWSYVGIGERFIMHIRXMJMIHXSTE]SVVIMQFYVWIXLIGMX] JSVTE]MRKHIFXWIVZMGIWI\TIRWIW(IFX7IVZMGITE]QIRXWJSV *=XSXEPQMPPMSR[LMGLMWEWPMKLXMRGVIEWI GSQTEVIHXS*=EHSTXIHFYHKIX8LIPEVKIEGXYEPMR *=MWHYIXSTE]QIRXWXSXLIVIJYRHMRKIWGVS[EKIRX ERHGSWXWSJMWWYERGIMRGSRRIGXMSR[MXLXLIHIJIEWIQIRXSJ 14'(IFX 74%()&87)6:-') *=XS*= MRQMPPMSRW 74%(IFX7IVZMGIVITVIWIRXWTVMSV7GSXXWHEPI4VIWIVZI %YXLSVMX]HIFXMWWYERGIWVIPEXIHXSPERHEGUYMWMXMSRMRXLI 1G(S[IPP1SYRXEMR7SRSVER4VIWIVZI7GSXXWHEPI4VIWIVZI %YXLSVMX]HIFXVITEMHF]XLI4VIWIVZIHIHMGEXIH TIVGIRXWEPIWXE\EYXLSVM^IHF]ZSXIVWMRERHXLI TIVGIRXWEPIWXE\EYXLSVM^IHF]ZSXIVWMR%PP74% FSRHW[IVIJYPP]TEMHSJJMR*= ()&87)6:-')*92()2(-2+&%0%2') )RHMRKJYRHFEPERGIMRGPYHIWVIWIVZIW[LMGLTVSXIGXXLIGMX]’WJMRERGMEPGSRHMXMSRERHTVSZMHIJSVYRI\TIGXIHIGSRSQMGGLEPPIRKIW 8LI(IFX7IVZMGI*YRHIRHMRKFEPERGIZEVMIWTVMQEVMP]HYIXSXLIXMQMRKSJHIFXMWWYERGIWERHVIPEXIHVITE]QIRXWGLIHYPIW +VS[XLSJJYRHFEPERGISGGYVW[LIRWSYVGIWI\GIIHYWIW8LIWTIGMJMGQEOIYTSJXLIGMX]’W(IFX7IVZMGI*YRHIRHMRKFEPERGIMW RSXIHMRXLIJSPPS[MRK *36)'%78 &9(+)8 %'89%0*36)'%78 207 Table of Contents ()&878%&-0->%8-326)7)6:) BUDGET BY FUND | Debt Service Fund *=XS*= MRQMPPMSRW (IFX7XEFMPM^EXMSR6IWIVZISJQMPPMSRMWTVSNIGXIHJSV*= 8LI(IFX7XEFMPM^EXMSR6IWIVZIFEPERGIZEVMIW TVMQEVMP]HYIXSXLIXMQMRKSJHIFXMWWYERGIWERHVIPEXIH VITE]QIRXWGLIHYPIWEWWSGMEXIH[MXLXLI14')\GMWI(IFX ;LMPIXLIVIMWRSPIKEPVIUYMVIQIRXXSLSPHXLMWVIWIVZIEXE GIVXEMRPIZIPXLI'MX]'SYRGMPLEWMRHMGEXIHXLEXMXWLSYPHFI QEMRXEMRIHXSTVSXIGXXLIGMX]JVSQYRI\TIGXIHJMRERGMEP GLEPPIRKIW +3()&87)6:-')6)7)6:)23246)7)6:) *=XS*= MRQMPPMSRW +3(IFX7IVZMGI6IWIVZI– 2SR4VIWIVZIVIWIVZIMWTVSNIGXIH EXQMPPMSRJSV*=8LI+3(IFX7IVZMGI6IWIVZI– 2SR4VIWIVZIFEPERGIZEVMIWTVMQEVMP]HYIXSXLIXMQMRKSJ HIFXMWWYERGIWERHVIPEXIHVITE]QIRXWGLIHYPIWEWWSGMEXIH [MXL+3(IFX7IVZMGITIV*MRERGMEP4SPMG]2S8LI WIGSRHEV]TVSTIVX]XE\WYTTSVXIHHIFXVIWIVZIWLSYPHFIRS QSVIXLERTIVGIRXSJXLIEQSYRXSJERRYEPTVMRGMTEPERH MRXIVIWXRIIHIHXSWIVZMGIXLISYXWXERHMRKHIFX *36)'%78 208 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND |I Bonded Bonded Debt Debt The city issues debt to finance capital project construction. This section of the budget document provides summary information regarding the amount of debt outstanding, description of bond types, property tax debt limitation, primary and secondary property tax history, debt repayment, pledged revenue coverage, long-term debt principal and interest through maturity, Scottsdale's bond rating, and debt management. Outstanding Debt by Type The proposed FY 2023/24 budget includes issuance of $185,000,000 of General Obligation Bonds for the 2019 Bond projects. Outstanding debt by type at the end of FY 2023/24 is as follows: Descri pti on of Bond Ty pes - In cl u di n g Pri n ci pal and In terest Pay men ts throu gh Matu ri ty i n Mi l l i on s Property Tax Supported General Obligation (GO) Bonds - The city issues General Obligation Bonds for improvements to streets, bridges, transportation systems, parks and trails, drainage systems and public safety and municipal facilities. General Obligation Bonds require voter approval. Secondary property taxes assessed are collected to repay General Obligation Bonds. 209 Table of Contents BUDGET BUDGET BY BY FUND |I Bonded Bonded Debt Debt Preserve Tax Supported General Obligation Bonds - Preserve bonds include bonds issued by the Scottsdale Preserve Authority (SPA) and General Obligation Bonds for preserve land and land improvements. General Obligation Bonds require voter approval. Preserve excise tax revenues are pledged to repay the preserve bonds. Excise Tax Supported Bonds - The city has debt secured by a pledge of all unrestricted excise taxes, transaction, franchise, privilege and business taxes, State-shared sales and income taxes, fees for licenses and permits, and fines and forfeitures, issued through the Municipal Property Corporation (MPC). These obligations were issued to fund the Museum of the West, TPC land and land improvements, WestWorld land, Skysong land, flood control, and other city improvements. Water and Sewer Revenue Supported Bonds - Water and sewer revenue bonds include bonds issued by the city for water and sewer capital improvements, pledging water and sewer revenues, and issued by the Municipal Property Corporation, pledging city excise tax but are repaid with water and sewer revenues. 210 Table of Contents BUDGET BY FUND |I Bonded Bonded Debt Debt Aviation Revenue Supported Bonds - Aviation revenue bonds are issued by the Municipal Property Corporation for Airport capital improvements, pledging city excise tax but are repaid with aviation revenues. Contracts Payable - The city has lease purchase agreements for the financing of equipment. Community Facility District (CFD) Tax Supported Debt - The city has four CFDs (DC Ranch, McDowell Mountain Ranch, Via Linda Road and Scottsdale Waterfront Commercial). CFD bonds are repaid from a special purpose tax levied on the properties within the Districts. The city has no liability for CFD debt. 211 Table of Contents BUDGET BUDGET BY BY FUND |I Bonded Bonded Debt Debt Property Tax Debt Li mi tati on The Arizona Constitution, (Article 9, Section 8), provides that the general obligation bonded indebtedness for a city for general municipal purposes may not exceed six percent of the assessed valuation of the taxable property in that city. In addition to the six percent limitation for general municipal purpose bonds, cities may issue general obligation bonds up to an additional 20 percent of the assessed valuation for supplying such city with water, artificial light, or sewers, for the acquisition and development of land for open space preserves, parks, playgrounds and recreational facilities, public safety, law enforcement, fire and emergency services facilities and streets and transportation facilities. General Obligation Bonds Issued to Provide Water, Sewers, Artificial Light, Parks, Playgrounds and Recreational Facilities, Open Space Preserves, Public Safety, and Streets and Transportation Facilities 20% Constitutional Limit $2,264,620,665 Less General Obligation Bonds 20% Bonds Outstanding (351,404,000) Excess Premium (12,192,677) Available 20% Limitation Borrowing Capacity $1,901,023,988 General Obligation Bonds Issued for All Other Purposes 6% Constitutional Limit $679,386,200 Less General Obligation Bonds 6% Bonds Outstanding (7,706,000) Excess Premium (880,964) Available 6% Limitation Borrowing Capacity $670,799,235 Primary and Secondary Property Tax Rates History: Tax Rates per $100 Assessed Valuation The primary property tax revenues are used by the General Fund for services such as Police, Fire, Community Services, and many other governmental purposes. The secondary property tax revenues are used to repay debt service on General Obligation Bonds. Fiscal Year 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Primary Tax Rate $0.5316 $0.5198 $0.5273 $0.5039 $0.4970 $0.5150 Secondary Tax Rate $0.5705 $0.5214 $0.5043 $0.5042 $0.4101 $0.4664 Total Tax Rate $1.1021 $1.0412 $1.0316 $1.0081 $0.9071 $0.9814 Deb t Rep ay m en t F i s cal Y ear E n d 2 0 2 3 / 2 4 F or ecas t Debt paydown reflects how quickly the city expects to repay outstanding debt. A more rapid repayment period reduces risks from future loss of revenues and is an indicator of repayment strength. Rapid repayment also allows debt capacity to be released and made available for future capital needs. The city's debt paydown is strong with 55 percent of total debt repaid in eight years and 92 percent repaid in 15 years. 212 Table of Contents BUDGET BY FUND |I Bonded Bonded Debt Debt Pledged Revenue Coverage - Municipal Property Corporation * The Municipal Property Corporation (MPC) is a non-profit corporation created by the city as a financing conduit for the purpose of financing the construction or acquisition of city capital improvement projects. In order to obtain the funds necessary for the construction or acquisition of facilities, the MPC issues bonds and then leases the facilities to the city for lease-rental payments which equal the semiannual debt service payments on the MPC bonds. * Includes debt service payments paid out of the General Fund, Special Programs Fund, Tourism Development Fund, Stadium Facility Fund, Aviation Fund and the Water and Water Reclamation Funds. 213 Table of Contents BUDGET BY FUND |I Bonded Bonded Debt Debt Scottsdal e's Bon d Rati n g Scottsdale General Obligation Bonds continue to maintain the highest possible rating from the three major national bond rating agencies, Moody's Investors Services, Standard & Poor's Rating Services, and Fitch Ratings, reaffirming their confidence in the city's financial management and its economic outlook. Scottsdale is one of a select number of municipalities achieving top ratings from all three. High bond ratings mean the city is able to sell General Obligation Bonds to finance voter-approved capital projects, including new parks, libraries, and pools at lower interest rates. Because the ratings are high, Scottsdale's General Obligation Bonds are highly desirable and therefore increase the value of existing bonds for investors. Deb t Man agemen t Scottsdale's primary debt management objectives are to minimize the cost of borrowing to taxpayers while assuring that total indebtedness does not exceed available resources and conforms to Arizona legal requirements. The necessity to incur debt in order to finance the capital program requires the obligation to manage the debt program effectively. As a result, the level of outstanding debt and the city's capacity to incur and repay additional debt require careful examination. Proper debt management provides for the protection and eventual enhancement of bond ratings; and compliance with debt instrument provisions and required disclosures to investors, underwriters, and rating agencies. Financial Policy No.8 is used when evaluating the purpose, necessity and condition under which decisions are made to issue debt. Financial Policy No.8 is also meant to supplement the legal framework of public debt law provided by the Arizona Constitution, State statutes, federal tax laws, and the city's bond resolutions and covenants. 214 Table of Contents BUDGET BY FUND |I Debt Service Expense Fin al Paymen t Date Forecast 20 22/23 Adopted 20 23/24 Forecast 20 24/25 Forecast 20 25/26 Forecast 20 26/27 Forecast 20 27/28 11,022,288 9,349,350 3,818,329 2,620,000 2,006,700 1,217,124 672,708 785,740 2,758 31,494,996 20,304,250 3,911,892 2,417,000 2,004,500 1,221,324 3,589,500 3,905,775 2,490 37,356,731 9,335,700 4,040,000 2,934,000 2,005,500 1,219,600 3,415,800 3,809,800 4,337,800 2,900 31,101,100 9,590,200 4,126,300 2,635,300 2,004,500 1,221,300 3,320,800 3,683,500 6,581,600 2,900 33,166,400 9,774,800 4,280,100 2,310,000 2,006,500 1,217,600 3,225,800 3,583,500 6,586,400 4,461,800 3,300 37,449,800 9,838,400 4,366,400 2,006,300 1,218,600 3,130,800 3,483,500 6,583,500 6,713,300 4,200 37,345,000 2023 2028 2029 2027 2040 2040 2042 2042 2044 2046 3,369,550 2,650,000 747,825 1,574,613 12,879,050 820,600 6,048,750 1,463,436 3,881,584 3,742 33,439,150 5,531,100 2,550,000 744,900 12,785,250 820,600 6,079,500 1,494,623 5,344,904 3,660 35,354,537 747,900 946,300 820,600 1,481,000 34,851,500 2,400 38,849,700 746,800 961,800 820,600 1,449,700 20,689,900 1,900 24,670,700 972,600 2,645,600 1,433,100 13,746,400 1,100 18,798,800 951,600 2,644,400 1,431,100 13,631,600 1,100 18,659,800 2024 2024 2026 2023 2028 2034 2024 2034 2034 M unicip al Property Corporation (MPC) Bonds - Excise Tax Supported 2006 MPC Refunding Bonds SkySong (GF/ST) ($42.8M Nov 2006) 2006 MPC Refunding Bonds WW/TPC Land Acquisition 80-acres (GF/ST) ($30.5M Nov 2006) 2021B MPC Refunding Bonds (Taxable) WW/TPC Land Acquisition 80-acres (TDF) ($16.3M Feb 2021) 2014 MPC Refunding Bonds TPC (GF/ST) ($5.3M May 2014) 2021B MPC Refunding Bonds (Taxable) TPC (GF/ST) ($2.6M Feb 2021) 2014 MPC Refunding Bonds WW/TPC Land Acq 52 and 17-acres (GF/ST) ($17.4M May 2014) 2021B MPC Refunding Bonds (Taxable) WW/TPC Land Acq 52- and 17-acres (GF/ST) ($10.4M Feb 2021) 2013A MPC Refunding Bonds SFS Garage Payoff (GF/ST) ($65.0M Feb 2013) 2021B MPC Refunding Bonds (Taxable) SFS Garage Payoff (GF/ST) ($14.1M Feb 2021) 2013B MPC Refunding Bonds McDowell Golf (SPF) ($65.0M Feb 2013) 2021B MPC Refunding Bonds (Taxable) McDowell Golf (SPF) ($0.9M Feb 2021) 2013C MPC Refunding Bonds TNEC (GF/ST) ($65.0M Feb 2013) 2013C MPC Refunding Bonds TNEC (TDF) ($65.0M Feb 2013) 2021B MPC Refunding Bonds (Taxable) TNEC (GF/ST) ($15.1M Feb 2021) 2021B MPC Refunding Bonds (Taxable) TNEC (TDF) ($10.5M Feb 2021) 2015A MPC Museum (TDF) ($12.2M Jan 2015) 2021B MPC Refunding Bonds (Taxable) Museum (TDF) ($0.8M Feb 2021) 2015A MPC (Taxable) TPC Golf Surcharge (TDF) ($2.2M Jan 2015) 2015A MPC (Taxable) TPC Golf Surcharge (GF/ST) ($12.4M Jan 2015) 2019A MPC Crossroads Flood Control (SF) ($9.3M Oct 2019) 2019B MPC (Taxable) Stadium Improvements (TDF) ($22.8M Oct 2019) 2019B MPC (Taxable) Stadium Improvements (Giants Contribution) ($8.4M Oct 2019) 2019B MPC (Taxable) Stadium Improvements (Charros Contribution) ($2.1M Oct 2019) Fiscal Agent Fees and Arbitrage Fees 2,821,000 2,564,250 456,731 587,800 74,176 1,917,413 293,783 2,094,750 336,790 73,500 20,146 600,750 1,200,000 779,479 857,613 22,856 900,000 163,913 663,750 1,677,945 375,000 135,000 10,200 2,816,000 2,579,500 471,177 594,050 77,165 1,934,913 305,241 2,576,167 100,119 1,283,136 1,200,000 859,363 22,815 900,000 161,713 666,750 1,530,680 525,000 135,000 9,200 2,817,300 2,584,800 470,300 598,800 81,000 1,952,700 320,600 2,646,500 84,800 1,289,500 1,200,000 854,600 22,800 900,000 163,500 668,800 1,527,100 525,000 135,000 9,400 2,819,300 2,640,300 469,000 597,100 78,700 1,940,400 311,400 2,731,200 94,300 1,291,300 1,200,000 858,600 27,700 900,000 164,100 664,800 1,530,100 525,000 135,000 9,000 2,811,800 2,738,300 467,300 598,900 78,300 1,946,300 310,000 2,830,100 98,600 1,338,600 1,200,000 170,900 702,500 900,000 164,300 665,000 1,531,500 525,000 135,000 9,000 2,815,000 2,796,300 470,000 608,300 2,407,700 2,900,200 87,700 1,448,900 1,200,000 890,900 900,000 162,600 664,300 1,529,900 525,000 135,000 6,500 2034 2030 2035 2027 2031 2027 2031 2023 2028 2023 2033 2023 2023 2033 2033 2034 2027 2034 2034 2039 2039 2039 2039 Subtotal by Fund ing Source General Fund/Excise Tas (GF/ST) Special Revenue/Stormwater Fee (SF) Tourism Development Fund (TDF) Special Program (McDowell Golf) (SPF) Giants/Charros Contribution Subtotal Municipal Property Corporation (MPC) Bonds - Excise Tax Supported 12,244,304 663,750 5,115,145 93,646 510,000 18,626,845 12,337,084 666,750 4,984,034 100,119 660,000 18,747,986 12,464,100 668,800 4,974,800 84,800 660,000 18,852,500 12,582,800 664,800 4,985,400 94,300 660,000 18,987,300 12,825,600 665,000 4,972,200 98,600 660,000 19,221,400 13,145,500 664,300 4,990,800 87,700 660,000 19,548,300 Total Debt Service Fund s 83 ,560 ,99 1 91 ,459 ,25 4 88 ,803 ,30 0 76 ,824 ,40 0 75 ,470 ,00 0 75 ,553 ,10 0 Debt Service Fund s General O bligation (G.O .) Bonds - Property Tax (Secondary) Sup ported 2014 G.O. Refunding Bonds ($73.8M May 2014) 2015 G.O. Refunding Bonds ($86.4M Apr 2015) 2017 G.O. Refunding Bonds ($26.8M May 2017) 2017C G.O. Various Purpose Bonds ($25.5M Dec 2017) 2021 G.O. Various Purpose Bonds (Tax-Exempt) ($31.4M Feb 2021) 2021 G.O. Various Purpose Bonds (Taxable) ($19.8M Feb 2021) 2023 G.O. Various Purpose Bonds (Tax-Exempt) ($34.2M Jan 2023) 2023 G.O. Various Purpose Bonds (Taxable) ($39.5M Jan 2023) Future G.O. Various Purpose Bonds ($90.0M Jan 2025) Future G.O. Various Purpose Bonds ($95.0M Jan 2027) Fiscal Agent Fees and Arbitrage Fees Preserve General O bligation Bonds - Preserve Sales Tax Supported 2012 G.O. Refunding Bonds Preserve ($44.5M Jul 2012) 2013 G.O. Bonds Preserve ($75.0M Feb 2013) 2014 G.O. Bonds Preserve ($14.0M May 2014) 2014 G.O. Refunding Bonds Preserve ($9.4M May 2014) 2015 G.O. Refunding Bonds Preserve ($74.0M Apr 2015) 2017A G.O. Bonds Preserve ($17.4M Mar 2017) 2017B G.O. Preserve Acquisition Refinancing Bonds ($18.5M May 2017) 2017 G.O. Refunding Bonds Preserve ($13.2M May 2017) 2020 G.O. Taxable Refunding Bonds Preserve ($167.9M Dec 2020) Fiscal Agent Fees and Arbitrage Fees 215 Table of Contents BUDGET BY FUND |I Debt Debt Service Service Expense Expense Debt Service Fund s Forecast 20 22/23 Adopted 20 23/24 Forecast 20 24/25 Forecast 20 25/26 Forecast 20 26/27 Fin al Paymen t Date Forecast 20 27/28 General Fund Service C oncess ion A greemen ts BOR Administration/WestWorld BOR Administration/TPC Subtotal General Fund Service Concession Agreements 207,900 207,900 415,800 218,287 218,287 436,574 229,200 229,200 458,400 240,700 240,700 481,400 252,700 252,700 505,400 265,300 265,300 530,600 Contracts Payable John Deere Mowing Equipment Subtotal General Fund Contracts Payable 15,500 15,500 15,529 15,529 15,500 15,500 15,500 15,500 10,400 10,400 - Total General Fun d 43 1,30 0 45 2,10 3 47 3,90 0 49 6,90 0 51 5,80 0 53 0,60 0 Special Revenue Fun ds Contracts Payable Underground Utility Improvement District John Deere Mowing Equipment Subtotal Special Revenue Funds Contracts Payable 60,700 17,400 78,100 58,028 17,375 75,403 55,900 17,400 73,300 53,800 17,400 71,200 51,700 11,600 63,300 49,500 49,500 - 306,145 78,888 385,033 78,900 78,900 - - - 78 ,100 46 0,43 6 15 2,20 0 71 ,200 63 ,300 49 ,500 Water and Water Reclamation Fund s Water and Water Reclamation Revenue Bonds 2008 Revenue Refunding Bonds Water and Water Reclamation ($35.3M Feb 2008) Fiscal Agent Fees and Arbitrage Fees Subtotal Water and Water Reclamation Funds 4,604,688 400 4,605,088 - - - - - M unicip al Property Corporation (MPC) - Water and Sewer Fund s 2006 MPC Refunding Bonds Water ($82.8M Nov 2006) 2006 MPC Refunding Bonds Water Reclamation ($9.9M Nov 2006) 2015A MPC Water Reclamation ($18.5M Jan 2015) 2015 MPC Refunding Bonds Water ($71.5M Mar 2015) 2015 MPC Refunding Bonds Water Reclamation ($22.1M Mar 2015) 2017 MPC Refunding Bonds Water ($32.2M Mar 2017) 2017 MPC Refunding Bonds Water Reclamation ($47.7M Mar 2017) 2017A MPC Water ($39.1M May 2017) 2021A Refunding Bonds Water ($1.8M Feb 2021) 2021A Refunding Bonds Water Reclamation ($6.1M Feb 2021) 2021B MPC Refunding Bonds (Taxable) Water ($38.2M Feb 2021) 2021B MPC Refunding Bonds (Taxable) Water Reclamation ($26.2M Feb 2021) Future MPC Water ($50.0M 2026) Future MPC Water Reclamation ($75.0M 2026) Fiscal Agent Fees and Arbitrage Fees Subtotal Water and Water Reclamation Funds 11,041,746 1,315,754 1,298,163 4,167,741 1,290,009 1,541,948 2,282,327 2,828,356 89,782 306,218 1,327,288 907,952 9,800 28,407,084 10,987,464 1,309,286 1,300,413 4,175,760 1,292,490 1,618,374 2,395,451 2,824,356 89,782 306,218 1,328,117 908,467 9,800 28,545,978 5,865,800 699,000 1,295,400 4,159,500 1,287,500 1,694,700 2,508,500 2,826,600 89,800 306,200 1,328,000 908,400 9,800 22,979,200 5,838,300 695,700 1,298,400 4,169,500 1,290,500 1,774,500 2,626,500 2,824,600 89,800 306,200 1,326,300 907,100 3,662,200 5,493,200 11,600 32,314,400 5,810,200 692,300 258,900 1,861,800 2,755,700 2,823,400 89,800 306,200 5,171,000 3,536,800 3,656,400 5,484,700 11,600 32,458,800 5,794,300 690,500 1,348,900 1,947,800 2,883,100 2,827,600 89,800 306,200 4,592,200 3,141,100 3,659,100 5,488,700 11,200 32,780,500 Total Water and Water Reclamation Fund s 33 ,012 ,17 2 28 ,545 ,97 8 22 ,979 ,20 0 32 ,314 ,40 0 32 ,458 ,80 0 32 ,780 ,50 0 1,717,744 1,500 1,719,244 1,720,744 1,500 1,722,244 1,721,200 1,500 1,722,700 1,719,200 1,500 1,720,700 1,719,700 1,500 1,721,200 1,717,500 1,500 1,719,000 2037 429,115 1,600 430,715 2,289,700 1,600 2,291,300 2,178,900 1,600 2,180,500 2,118,300 1,600 2,119,900 2,057,700 1,600 2,059,300 2043 12 3,07 0,730 11 6,42 2,600 11 3,60 8,100 11 2,34 9,000 11 2,69 2,000 Police Department Investigative Equipment Police Department Protective Equipment Subtotal General Fund Contracts Payable Total Special R evenue Funds M unicip al Property Corporation (MPC) - Av iation Fund 2017B MPC Aviation ($23.5M 2017) Fiscal Agent Fees and Arbitrage Fees Total Aviation Fund M unicip al Property Corporation (MPC) - Solid Waste Fun d Future MPC Solid Waste ($21.8M 2025) Fiscal Agent Fees and Arbitrage Fees Total Solid Waste Fund TOTAL DEBT SER VICE EXPENSE - A LL FU NDS 11 8,80 1,806 216 2030 2030 2034 2026 2026 2034 2034 2037 2030 2030 2036 2036 2045 2045 Table of Contents BUDGET BY FUND |I Long-Term Debt Outstanding Debt S ervice F unds General Obli gati on (G.O.) Bo nds - P roperty Tax (Secondary) S upported 2014 G.O. Refunding Bonds 2015 G.O. Refunding Bonds 2017 G.O. Refunding Bonds 2017C G.O. Various Purpose Bonds 2021 G.O. Various Purpose Bonds (Tax-Exempt) 2021 G.O. Various Purpose Bonds (Taxable) 2023 G.O. Various Purpose Bonds (Tax-Exempt) 2023 G.O. Various Purpose Bonds (Taxable) Future G.O. Various Purpose Bonds Total General Obligation Bonds B a l a nc e a t 6/30/23 B a l a nc e a t 6/30/24 B a l a nc e a t 6/30/25 B a l a nc e a t 6/30/26 B a l a nc e a t 6/30/27 F inal P ayment Date B a l a nc e a t 6/30/28 53,360,000 21,742,360 9,140,000 27,675,000 17,750,000 39,530,000 34,175,000 203,372,360 35,020,000 18,809,860 7,180,000 26,450,000 16,860,000 37,510,000 32,200,000 174,029,860 27,005,000 15,602,700 4,605,000 25,175,000 15,945,000 35,485,000 30,300,000 90,000,000 244,117,700 18,495,000 12,172,300 2,200,000 23,850,000 15,010,000 33,485,000 28,400,000 87,531,900 221,144,200 9,460,000 8,416,600 22,470,000 14,060,000 31,485,000 26,500,000 173,842,500 286,234,100 4,386,900 21,035,000 13,090,000 29,485,000 24,600,000 167,440,500 260,037,400 2023 2028 2029 2027 2040 2040 2042 2042 2046 P reserve General Obl i gati on Bo nds - P reserve S al es Tax Suppo rted 2012 G.O. Refunding Bonds Preserve 2013 G.O. Bonds Preserve 2014 G.O. Bonds Preserve 2014 G.O. Refunding Bonds Preserve 2015 G.O. Refunding Bonds Preserve 2017A G.O. Bonds Preserve 2017B G.O. Preserve Acquisition Refinancing Bonds 2017 G.O. Refunding Bonds Preserve 2020 G.O. Taxable Refunding Bonds Preserve Total Preserve General Obligation Bonds 5,370,000 2,500,000 2,105,000 15,710,000 17,410,000 5,790,000 12,257,640 155,100,000 216,242,640 1,430,000 3,485,000 17,410,000 11,280,140 151,475,000 185,080,140 725,000 2,670,000 17,410,000 10,267,300 118,325,000 149,397,300 1,815,000 17,410,000 9,242,700 99,135,000 127,602,700 915,000 15,585,000 8,183,400 86,730,000 111,413,400 13,670,000 7,073,200 74,325,000 95,068,200 2024 2024 2026 2023 2028 2034 2024 2034 2034 Muni cipal P roperty Corporation (MP C) Bo nds - Exci se Tax Supported 2006 MPC Refunding Bonds SkySong 2006 MPC Refunding Bonds WW/TPC Land Acquisition 80-acres 2021B MPC Refunding Bonds (Taxable) WW/TPC Land Acquisition 80-acres 2014 MPC Refunding Bonds TPC 2021B MPC Refunding Bonds (Taxable) TPC 2014 MPC Refunding Bonds WW/TPC Land Acq 52 and 17-acres 2021B MPC Refunding Bonds (Taxable) WW/TPC Land Acq 52- and 17-acres 2021B MPC Refunding Bonds (Taxable) SFS Garage Payoff 2021B MPC Refunding Bonds (Taxable) McDowell Golf 2021B MPC Refunding Bonds (Taxable) TNEC 2015A MPC Museum 2021B MPC Refunding Bonds (Taxable) Museum 2015A MPC (Taxable) TPC Golf Surcharge 2019A MPC Crossroads Flood Control 2019B MPC (Taxable) Stadium Improvements Total Municipal Property Corporation (MPC) Bonds - Excise Tax Supported 22,820,000 15,690,000 15,425,000 2,180,000 2,484,900 7,095,000 9,835,100 13,285,000 845,000 24,060,000 7,390,000 745,000 9,395,000 8,095,000 28,105,000 167,450,000 21,145,000 13,895,000 15,210,000 1,675,000 2,441,500 5,450,000 9,663,500 10,820,000 755,000 21,870,000 6,795,000 730,000 8,690,000 7,735,000 26,640,000 153,515,000 19,385,000 12,005,000 14,995,000 1,140,000 2,394,100 3,705,000 9,475,900 8,275,000 680,000 19,665,000 6,175,000 715,000 7,955,000 7,355,000 25,150,000 139,070,000 17,535,000 9,965,000 14,780,000 580,000 2,348,700 1,885,000 9,296,300 5,630,000 595,000 17,445,000 5,520,000 695,000 7,190,000 6,960,000 23,625,000 124,050,000 15,600,000 7,725,000 14,565,000 2,303,300 9,116,700 2,865,000 505,000 15,160,000 5,520,000 6,400,000 6,545,000 22,065,000 108,370,000 13,565,000 5,315,000 14,345,000 1,727,500 6,837,500 425,000 12,740,000 4,800,000 5,585,000 6,110,000 20,470,000 91,920,000 2034 2030 2035 2027 2031 2027 2031 2028 2033 2033 2034 2027 2034 2039 2039 To tal Debt S ervice F unds 587, 065, 000 512, 625, 000 532, 585, 000 472, 796, 900 506, 017, 500 447, 025, 600 719,643 886,536 1,606,179 639,683 812,658 1,452,341 559,700 738,800 1,298,500 479,800 664,900 1,144,700 399,800 591,000 990,800 319,800 517,100 836,900 2032 2035 53,868 53,868 39,757 39,757 25,200 25,200 10,200 10,200 - - 2027 General Fund Se rvice Co ncessi on Agreements BOR Administration/WestWorld BOR Administration/TPC Total General Fund Service Concession Agreements Contracts P ayable John Deere Mowing Equipment Total General Fund Contracts Payable To tal General Fund 1, 660, 047 1, 492, 098 1, 323, 700 1, 154, 900 990, 800 836, 900 Special Revenue Funds Contracts P ayable Underground Utility Improvement District John Deere Mowing Equipment Total Special Revenue Funds Contracts Payable 364,756 60,269 425,025 327,592 44,481 372,073 290,400 28,200 318,600 253,300 11,500 264,800 216,100 216,100 178,900 178,900 2033 2027 Police Department Investigative Equipment Police Department Protective Equipment Total General Fund Contracts Payable 284,786 148,790 433,576 75,854 75,854 - - - - 2024 2025 To tal Speci al Revenue Funds 858, 601 447, 927 318, 600 264, 800 216, 100 178, 900 43,135,000 11,195,000 14,865,000 39,605,000 30,810,000 7,920,000 60,420,000 207, 950, 000 32,995,000 10,295,000 10,140,000 37,340,000 29,155,000 7,920,000 59,095,000 186, 940, 000 28,080,000 9,355,000 5,200,000 34,795,000 27,415,000 7,920,000 57,765,000 125,000,000 295, 530, 000 22,950,000 8,365,000 31,925,000 25,590,000 7,920,000 56,430,000 121,572,100 274, 752, 100 17,595,000 8,365,000 28,695,000 23,675,000 7,920,000 48,610,000 117,453,200 252, 313, 200 11,990,000 7,275,000 25,090,000 21,660,000 7,920,000 41,680,000 113,121,800 228, 736, 800 2030 2034 2026 2034 2037 2030 2036 2045 18,590,000 18,590,000 17,600,000 17,600,000 16,560,000 16,560,000 15,470,000 15,470,000 14,325,000 14,325,000 13,125,000 13,125,000 2037 21,800,000 21,800,000 20,540,200 20,540,200 19,328,200 19,328,200 18,116,200 18,116,200 2043 868, 117, 300 784, 978, 900 793, 190, 800 708, 019, 400 Muni cipal P roperty Corporation (MP C) - Water and S ewer F unds 2006 MPC Refunding Bonds Water and Water Reclamation 2015A MPC Water and Water Reclamation 2015 MPC Refunding Bonds Water and Water Reclamation 2017 MPC Refunding Bonds Water and Water Reclamation 2017A MPC Water and Water Reclamation 2021A Refunding Bonds Water and Water Reclamation 2021B MPC Refunding Bonds (Taxable) Water and Water Reclamation Future MPC Water and Water Reclamation To tal Wa ter and Water Reclamatio n F unds Muni cipal P roperty Corporation (MP C) - Avi ati on F und 2017B MPC Aviation To tal Avi ati on Fund Muni cipal P roperty Corporation (MP C) - S ol id Waste F und Future MPC Solid Waste To tal So li d Waste F und TOTAL OUTSTANDING DEB T - ALL F UNDS 816, 123, 648 719, 105, 025 217 Table of Contents FY 2023/24 Adopted Budget 218 Table of Contents BUDGET BY FUND | Enterprise Funds Overview BUDGET BY FUND | Enterprise Funds Overview ENTERPRISE FUNDS DESCRIPTION Scottsdale uses separate Enterprise Funds to account for the activity of the proprietary funds. The individual funds are Water and Water Reclamation, Solid Waste, and Aviation. In aggregate, the Enterprise Funds are the city’s second largest source of revenues, which are derived from user fees and charges. User fees and charges are established to promote efficiency by shifting costs to specific users of services and avoiding general taxation. The applicable revenues of the individual funds, along with each fund’s purpose, are described in the sections that follow. Enterprise Funds Sources (% to Total) $252.6 Million Enterprise Funds Uses (% to Total) $246.4 Million Rounding differences may occur. 219 Table of Contents FY 2023/24 Adopted Budget 220 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds FUND PURPOSE These funds account for the transactions related to the city’s water and water reclamation business activities, including operating sources, uses and debt service payments. Capital uses are accounted for in various Capital Improvement Plan funds. Water & Water Reclamation Funds Sources (% to Total) $209.7 Million Water & Water Reclamation Funds Uses (% to Total) $205.2 Million Rounding differences may occur. 221 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds Summary Actual 2021/ 22 Adopted 2022/ 23 Forecast 2022/ 23 Adopted 2023/ 24 4,691,838 16,418,406 5,129,851 44,050,511 3,000,000 24,829,345 98, 119, 951 4,604,688 25,309,018 845,335 46,239,707 3,000,000 20,597,980 100, 596, 728 4,604,688 20,413,305 46,239,707 3,000,000 31,974,023 106, 231, 723 5,000,000 24,721,786 42,933,575 5,000,000 77, 655, 361 Subtotal 111,380,810 47,007,854 14,462,748 2,512,632 1,172,452 854,719 333,144 201,617 4,000 952,877 178,882,854 118,576,492 45,995,649 15,406,758 1,373,916 780,451 921,000 339,099 209,861 5,550 183,608,776 118,576,492 48,337,011 15,406,758 1,373,916 1,895,482 921,000 339,099 209,861 5,550 187,065,169 123,359,867 51,636,995 16,905,462 4,432,368 3,648,499 801,903 340,527 210,188 5,550 201,341,359 Subtotal 3,148,353 13,359 8,464,544 483,646 900,000 13,009,901 2,177,402 4,613,814 900,000 7,691,216 2,177,402 4,613,814 900,000 7,691,216 3,455,128 3,963,028 900,000 8,318,156 191, 892, 755 191, 299, 992 194, 756, 385 209, 659, 515 B e g i n n i n g Fu n d B a l a n c e Debt Service Reserve (a) Operating Contingency (b) Operating Reserve Special Contractual Fund Balance (c) Water & WasteWater Asset Replacement Reserve Water Drought Reserve (d) Undesignated, Unreserved Fund Balance Total Beginning Fund Balance R ev en u es Water Service Charges Water Reclamation Service Charges Non-Potable Water Service Charges Miscellaneous Interest Earnings (e) Indirect Costs Stormwater Fee Property Rental Contributions & Donations GAAP Adjustment (f) T r a n sf e r s I n AWT CIP Debt Service Operating (g) RWDS Total Sources (a) Debt Service Reserve is projected to be zero in FY 2023/24 as Sewer Revenue Bonds sunset in FY 2022/23. Operating Contingency of $5.0 million is added beginning FY 2023/24 to align with other operating funds. (c) Beginning in FY 2022/23, Special Contractual Fund Balance is consolidated to Operating Reserve. (d) Water Drought Reserve is increased in FY 2023/24 to $5.0 million in anticipation of an ongoing drought. This will ensure the city is prepared for unexpected cost increases related to water purchases and other unforeseen expenses. (e) The increase in Interest Earnings is due to rising interest rates. (f) Adjustment to align with fund balance calculation used in the Annual Financial Report. (g) One-time bonuses approved by Council to active full and part-time employees paid in FY 2021/22. The funding used was Scottsdale AZCares funding that was in the Special Programs Fund. (b) 222 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds Summary E x p e n di t u r e s City Treasurer Administrative Services Water Resources Citywide Indirect Cost Allocation Department Indirect Cost Class and Comp Study (a) Fuel and Maint and Repair (b) Leave Accrual Payments / Parental Leave Vacation Trade Savings from Vacant Positions Utilities D e b t Se r v i c e MPC Bonds Debt Service-Sewer MPC Bonds Debt Service-Water Sewer Revenue Bonds (c) Actual 2021/ 22 Adopted 2022/ 23 Forecast 2022/ 23 Adopted 2023/ 24 Subtotal 2,189,935 413,510 69,706,388 5,393,197 854,719 14,790,438 93,348,187 2,495,042 489,531 77,006,690 5,253,417 921,000 489,202 133,839 (1,177,100) 15,824,450 101,436,071 2,389,339 488,754 73,716,802 5,253,417 921,000 409,005 402,884 (518,506) 15,824,450 98,887,145 2,605,385 729,338 85,562,038 5,883,327 801,903 745,370 542,434 70,424 (1,177,100) 16,035,350 111,798,469 Subtotal 6,207,222 20,230,874 4,592,700 31,030,796 7,404,997 21,002,087 4,605,088 33,012,172 7,404,997 21,002,087 4,605,088 33,012,172 7,516,900 21,029,078 28,545,978 124,378,984 134,448,243 131,899,317 140,344,447 3,148,353 43,206,026 700,809 3,837,441 8,509,370 59,401,999 2,177,402 56,646,304 11,463,242 8,868,936 79,155,884 2,177,402 68,923,850 11,463,242 8,868,936 91,433,430 3,455,128 48,921,942 2,944,082 9,422,892 65,860 64,809,904 183, 780, 983 213, 604, 127 223, 332, 747 205, 154, 351 8, 111, 772 ( 22, 304, 135) ( 28, 576, 362) 4, 505, 164 4,604,688 19,567,970 845,335 46,239,707 3,000,000 31,974,023 106, 231, 723 4,517,538 25,359,018 45,416,037 3,000,000 78, 292, 593 4,517,538 24,721,786 45,416,037 3,000,000 77, 655, 361 5,000,000 27,949,618 44,210,907 5,000,000 82, 160, 525 TOTAL OPERATING BUDGET Transfers Out AWT CIP CIP Technology Debt Service Fund (d) Franchise Fees Other (e) Total Uses Sources Over/(Under) Uses E n d i n g Fu n d B a l a n c e Debt Service Reserve Operating Contingency Operating Reserve Special Contractual Fund Balance Water & WasteWater Asset Replacement Reserve Water Drought Reserve Undesignated, Unreserved Fund Balance Total Ending Fund Balance Subtotal (a) Anticipated cost to implement the Classification and Compensation Study recommendations. Budget adopted at the division level. At the start of the fiscal year, the budget moves to a non-divisional account and then is transferred back to the division monthly as expenses occur. (c) Sewer Revenue Bonds sunset in FY 2022/23. (d) In FY 2021/22 a procedural change was implemented in the recording of debt service for water and sewer bonds. The procedural change was done for efficiency and has no impact on the cost of debt service or fund balance. (e) Beginning in FY 2023/24, a transfer out to the General Fund will support a portion of grant writing services to enhance current efforts to seek additional funding sources for citywide services and projects. (b) 223 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds Five Year Forecast Adopted 2023/ 24 Forecast 2024/ 25 Forecast 2025/ 26 Forecast 2026/ 27 Forecast 2027/ 28 5,000,000 24,721,786 42,933,575 5,000,000 77, 655, 361 5,000,000 27,949,618 44,210,907 5,000,000 82, 160, 525 5,000,000 28,468,164 55,080,561 5,000,000 93, 548, 725 5,000,000 29,720,453 57,075,172 5,000,000 96, 795, 625 5,000,000 30,733,276 59,169,449 5,000,000 99, 902, 725 Subtotal 123,359,867 51,636,995 16,905,462 4,432,368 3,648,499 801,903 340,527 210,188 5,550 201,341,359 126,810,900 54,113,300 17,609,200 4,468,300 4,202,400 817,900 345,600 217,400 5,600 208,590,600 130,616,700 56,712,800 18,053,400 4,504,900 4,751,400 834,300 350,800 224,900 5,700 216,054,900 134,537,700 59,440,900 18,507,700 4,542,100 3,673,600 851,000 356,100 232,800 5,700 222,147,600 138,576,800 62,304,400 18,974,800 4,579,500 3,551,600 868,000 361,400 240,700 5,800 229,463,000 Subtotal 3,455,128 3,963,028 900,000 8,318,156 3,553,500 3,579,000 900,000 8,032,500 3,650,600 3,147,700 900,000 7,698,300 3,750,800 2,683,600 900,000 7,334,400 3,892,900 2,448,600 900,000 7,241,500 209, 659, 515 216, 623, 100 223, 753, 200 229, 482, 000 236, 704, 500 B e g i n n i n g Fu n d B a l a n c e Debt Service Reserve Operating Contingency Operating Reserve Special Contractual Fund Balance Water & WasteWater Asset Replacement Reserve Water Drought Reserve Undesignated, Unreserved Fund Balance Total Beginning Fund Balance R ev en u es Water Service Charges Water Reclamation Service Charges Non-Potable Water Service Charges Miscellaneous Interest Earnings (a) Indirect Costs Stormwater Fee Property Rental Contributions & Donations GAAP Adjustment T r a n sf e r s I n AWT CIP Debt Service Operating RWDS Total Sources (a) The increase in Interest Earnings is due to rising interest rates. 224 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds Five Year Forecast Adopted 2023/ 24 Forecast 2024/ 25 Forecast 2025/ 26 Forecast 2026/ 27 Forecast 2027/ 28 Subtotal 2,605,385 729,338 85,562,038 5,883,327 801,903 745,370 542,434 70,424 (1,177,100) 16,035,350 111,798,469 2,543,200 695,600 87,011,600 6,177,600 817,900 762,100 554,800 (1,203,700) 16,513,500 113,872,600 2,624,100 721,700 91,095,000 6,486,400 834,200 777,400 565,800 (1,227,800) 17,005,000 118,881,800 2,705,300 745,800 94,192,000 6,810,700 850,900 792,700 576,800 (1,251,900) 17,510,800 122,933,100 2,858,900 794,800 98,282,000 7,151,200 867,900 808,800 588,500 (1,276,900) 18,031,900 128,107,100 Subtotal 7,516,900 21,029,078 28,545,978 7,009,400 15,969,800 22,979,200 12,623,200 19,691,200 32,314,400 13,040,600 19,418,200 32,458,800 13,864,000 18,916,500 32,780,500 140,344,447 136,851,800 151,196,200 155,391,900 160,887,600 3,455,128 48,921,942 2,944,082 9,422,892 65,860 64,809,904 3,553,500 53,625,700 1,409,600 9,750,400 43,900 68,383,100 3,650,600 53,510,100 2,016,800 10,088,700 43,900 69,310,100 3,750,800 55,927,900 820,900 10,439,500 43,900 70,983,000 3,892,900 45,921,300 2,506,800 10,803,600 43,900 63,168,500 205, 154, 351 205, 234, 900 220, 506, 300 226, 374, 900 224, 056, 100 Sources Over/(Under) Uses 4, 505, 164 11, 388, 200 3, 246, 900 3, 107, 100 12, 648, 400 E n d i n g Fu n d B a l a n c e Debt Service Reserve Operating Contingency Operating Reserve Special Contractual Fund Balance Water & WasteWater Asset Replacement Reserve Water Drought Reserve Undesignated, Unreserved Fund Balance Total Ending Fund Balance 5,000,000 27,949,618 44,210,907 5,000,000 82, 160, 525 5,000,000 28,468,164 55,080,561 5,000,000 93, 548, 725 5,000,000 29,720,453 57,075,172 5,000,000 96, 795, 625 5,000,000 30,733,276 59,169,449 5,000,000 99, 902, 725 5,000,000 32,026,812 70,524,313 5,000,000 112, 551, 125 E x p e n di t u r e s City Treasurer Administrative Services Water Resources Citywide Indirect Cost Allocation Department Indirect Cost Class and Comp Study (a) Fuel and Maint and Repair (b) Leave Accrual Payments / Parental Leave Vacation Trade Savings from Vacant Positions Utilities D e b t Se r v i c e MPC Bonds Debt Service-Sewer MPC Bonds Debt Service-Water Sewer Revenue Bonds TOTAL OPERATING BUDGET Transfers Out AWT CIP CIP Technology Debt Service Fund Franchise Fees Other (c) Total Uses Subtotal (a) Anticipated cost to implement the Classification and Compensation Study recommendations. Budget adopted at the division level. At the start of the fiscal year, the budget moves to a non-divisional account and then is transferred back to the division monthly as expenses occur. (c) Beginning in FY 2023/24, a transfer out to the General Fund will support a portion of grant writing services to enhance current efforts to seek additional funding sources for citywide services and projects. (b) 225 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds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able of Contents BUDGET BY FUND | Water and Water Reclamation Funds 232438%&0);%8)67)6:-')',%6+)7 *=XS*= MRQMPPMSRW 2SR4SXEFPI;EXIV7IVZMGI'LEVKIWVIZIRYIMRGPYHIW EHZERGIH[EXIVXVIEXQIRXERHIJJPYIRXWEPIWVIPEXIHXS[EXIV XVIEXIHXSMVVMKEXMSRWXERHEVHWEXXLIGMX]’W;EXIV6IGPEQEXMSR 4PERXJSVKSPJGSYVWIWMRRSVXL7GSXXWHEPIXLEXEVITEVXSJ XLI6IGPEMQIH;EXIV(MWXVMFYXMSR7]WXIQ 6;(7 ERHXLI 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%'89%0*36)'%78 237 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds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able of Contents BUDGET BY FUND | Water and Water Reclamation Funds ()&87)6:-')*92( *=XS*= MRQMPPMSRW ,MWXSVMGEPP](IFX7IVZMGI*YRH[EWERMRXIVREPXVERWJIVSJ14' &SRHWFIX[IIR[EXIVERH[EXIVVIGPEQEXMSRHIFXWIVZMGI JYRHWXSXLI;EXIVERH;EXIV6IGPEQEXMSR*YRHWXSFIXXIV EGGSYRXJSVHIFXWIVZMGITE]QIRXWVIPEXIHXS[EXIVERH[EXIV VIGPEQEXMSRGETMXEPTVSNIGXW7XEVXMRKMR*=E TVSGIHYVEPGLERKI[EWMQTPIQIRXIHMRXLIVIGSVHMRKJSV[EXIV ERHWI[IVFSRHW8LIVIJSVIXLI(IFX7IVZMGI*YRHMW TVSNIGXIHXSFI^IVSMR*= *6%2',-7)*))7 *=XS*= MRQMPPMSRW *VERGLMWI*IIWMWEXVERWJIVMR*=SJQMPPMSRJVSQ XLI;EXIVERH;EXIV6IGPEQEXMSR*YRHWXSXLI+IRIVEP*YRH JSVYWISJXLIGMX] WVMKLXSJ[E]WERHQIHMERW8LI;EXIV 6IWSYVGIW(MZMWMSRMWXVIEXIHEWER]SXLIVYXMPMX][SYPHFIMR XLMWVIKEVH8LIERRYEPGLEVKIMWJMZITIVGIRXSJ;EXIV7IVZMGI ERH;EXIV6IGPEQEXMSR'LEVKIWVIZIRYI 38,)6 *=XS*= MRQMPPMSRW &IKMRRMRKMR*=EXVERWJIVSYXXSXLI+IRIVEP*YRH [MPPWYTTSVXETSVXMSRSJKVERX[VMXMRKWIVZMGIWXSIRLERGI GYVVIRXIJJSVXWXSWIIOEHHMXMSREPJYRHMRKWSYVGIWJSVGMX][MHI WIVZMGIWERHTVSNIGXW8LI*=EHSTXIHEQSYRXMW  *36)'%78 &9(+)8 %'89%0*36)'%78 239 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds ;%8)6%2(;%8)66)'0%1%8-32*92(7)2(-2+&%0%2') 8LI;EXIVERH;EXIV6IGPEQEXMSR*YRHWIRHMRKFEPERGIMRGPYHIWVIWIVZIWERHGSRXMRKIRG][LMGLTVSXIGXWXLIGMX]’WJMRERGMEP GSRHMXMSRERHTVSZMHIJSVYRI\TIGXIHIGSRSQMGGLEPPIRKIWE7TIGMEP'SRXVEGXYEP*YRH&EPERGIHIWMKREXMSRERHER9RVIWIVZIH 9RHIWMKREXIH*YRH&EPERGI+VS[XLSJIRHMRKJYRHFEPERGISGGYVW[LIRWSYVGIWI\GIIHYWIW)RHMRKJYRHFEPERGIWEVIWMQMPEVXS EGSQTER]’WRIXIUYMX] EWWIXWPIWWPMEFMPMXMIW 4VYHIRXJMWGEPQEREKIQIRXHMGXEXIWJYRHFEPERGIWWLSYPHSRP]FIYWIHJSV RSRVIGYVVMRK RSRSTIVEXMSREP YWIW3RGIJYRHFEPERGIWEVIWTIRXXLI]EVISRP]VITPIRMWLIHF]JYXYVI]IEVWSYVGIWMRI\GIWWSJ YWIW8LIGMX]’WFYHKIXTPERRMRKFSRHMRHIRXYVIERHEHSTXIHJMRERGMEPTSPMGMIWGEPPJSVXLIIWXEFPMWLQIRXSJVIWIVZIWEWTEVXSJXLI VIWSYVGIEPPSGEXMSRPMQMXWIXXMRKTVSGIWW8LMWTVSGIWWEPPS[WXLIGMX]XSWIXEWMHIWEZMRKWFIJSVIEPPSGEXIHSVWTIRXEWFYHKIXIH YWIW8LIWTIGMJMGQEOIYTSJXLIGMX]’W;EXIVERH;EXIV6IGPEQEXMSR*YRHWFEPERGIMWEWJSPPS[W ()&87)6:-')6)7)6:) *=XS*= MRQMPPMSRW (IFX7IVZMGI6IWIVZIMWTVSNIGXIHXSFI^IVSMR*=EW 7I[IV6IZIRYI&SRHWWYRWIXMR*=8LMWVIWIVZI[EW VIUYMVIHTIVXLIXIVQSJXLIVIZIRYIFSRHMRHIRXYVIXSIRWYVI XLEXJYRHWEVIWIXEWMHIEWGSPPEXIVEPJSVXLI&SRHWHIFX WIVZMGITE]QIRXW 34)6%8-2+'328-2+)2'= *=XS*= MRQMPPMSRW 3TIVEXMRK'SRXMRKIRG]SJQMPPMSRMWEHHIHFIKMRRMRK*= XSEPMKR[MXLSXLIVSTIVEXMRKJYRHW *36)'%78 240 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds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able of Contents BUDGET BY FUND | Solid Waste Fund Summary ;%8)6(639+,86)7)6:) *=XS*= MRQMPPMSRW 8LI;EXIV(VSYKLX6IWIVZIIRHMRKJYRHFEPERGIMWMRGVIEWIH XSQMPPMSRJSV*=MRERXMGMTEXMSRSJERSRKSMRK HVSYKLX(YIXSFIPS[EZIVEKIVEMRJEPPERHWRS[TEGOJSVXLI PEWX]IEVWMRXLI'SPSVEHS6MZIV;EXIVWLIHXLI&YVIEYSJ 6IGPEQEXMSR &36 IREGXIHXLI(VSYKLX'SRXMRKIRG]4PER ('4 ERHHIGPEVIHE8MIVEWLSVXEKIJSVXLI'SPSVEHS6MZIV W]WXIQJSVGEPIRHEV]IEVMR%YKYWX8LVSYKLXLMW HIGPEVEXMSRTVMGMRKEHNYWXQIRXW[MPPMRGVIEWIEXIEGL EHHMXMSREPXMIVSJXLI('48LMW;EXIV(VSYKLX6IWIVZI[MPP IRWYVIXLIGMX]MWTVITEVIHJSVYRI\TIGXIHGSWXMRGVIEWIW VIPEXIH[EXIVTYVGLEWIWERHSXLIVYRJSVIWIIRI\TIRWIW 92()7-+2%8)(926)7)6:)(*92(&%0%2') *=XS*= MRQMPPMSRW ;LMPIXLIVIMWRS9RHIWMKREXIH9RVIWIVZIHJYRHFEPERGIMR*= MXLMWXSVMGEPP]VITVIWIRXWXLIGYQYPEXMZI;EXIVERH ;EXIV6IGPEQEXMSR*YRHWWSYVGIWRSXHIWMKREXIHJSVE WTIGMJMGTYVTSWI8LMWFEPERGIVITVIWIRXWEREGGYQYPEXMSRSJ SRIXMQIWSYVGIWERHMXMWQSWXETTVSTVMEXIP]YWIHJSVSRI XMQIYWIW9RHIVTVYHIRXJMWGEPQEREKIQIRXTVEGXMGIWXLMW EQSYRXWLSYPHRSXFIYWIHXSJYRHRI[SVI\TERHIH TVSKVEQW[MXLSRKSMRKSTIVEXMRKYWIW *36)'%78 242 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Solid Waste Fund Five-Year Financial Forecast BUDGET BY FUND | Solid Waste Fund Overview FUND PURPOSE This fund accounts for the transactions related to the city’s commercial and residential refuse, recycling, brush and bulk collections business activities. The operating sources and uses are accounted for in this fund while the capital expenditures are accounted for in a separate Solid Waste Capital Fund. The operating sources, uses and ending fund balance of the Solid Waste Fund are described in the following sections. Solid Waste Fund Sources (% to Total) $33.2 Million Solid Waste Fund Uses (% to Total) $35.1 Million Rounding differences may occur. 243 Table of Contents BUDGET BY FUND | Solid Waste Fund Summary A ct u al 2021/ 22 Adopted 2022/ 23 Forecast 2022/ 23 Adopted 2023/ 24 Beginning Fund Balance Debt Service Reserve (a) Operating Contingency (b) Operating Reserve (c) Undesignated, Unreserved Fund Balance Total Beginning Fund Balance 3,893,818 5,512,984 9, 406, 802 4,428,568 4,670,900 9, 099, 468 4,361,640 6,147,140 10, 508, 780 572,825 600,000 4,397,569 4,318,258 9, 888, 652 Revenues Solid Waste Service Charges - Residential Solid Waste Service Charges - Commercial Interest Earnings Miscellaneous 23,582,748 3,582,696 81,190 12,097 26,916,208 3,500,332 50,144 - 26,916,208 3,500,332 135,897 - 28,878,985 4,046,242 255,503 - 27, 258, 731 30, 466, 684 30, 552, 437 33, 180, 730 79,191 216,020 - - - 295, 212 - - - 27, 553, 943 30, 466, 684 30, 552, 437 33, 180, 730 23,794,602 884,728 8,000 1,210,226 - 27,319,948 1,042,677 8,000 1,399,781 25,760 (320,000) 47,621 24,607,993 992,712 8,000 1,399,781 2,273,449 12,000 23,189 - 29,009,258 1,031,593 8,000 1,785,696 277,211 46,880 (325,000) 43,561 Subtotal 25, 897, 556 29, 523, 787 29, 317, 124 31, 877, 199 - - - 430,715 Subtotal - - - 430, 715 25,897,556 29,523,787 29,317,124 32,307,914 465,807 88,602 1,450,807 209,634 1,645,807 209,634 2,566,007 211,877 Subtotal Transfers In CIP (d) Operating (e) Subtotal Total Sources Expenditures Public Works City Treasurer Administrative Services Citywide Indirect Cost Allocation Class and Comp Study (f) Fuel and Maint and Repair (g) Leave Accrual Payments / Parental Leave Savings from Vacant Positions Utilities (g) Vacation Trade Debt Service Future Issuance Solid Waste (h) TOTAL OPERATING BUDGET Transfers Out CIP CIP Technology 554, 409 1, 660, 441 1, 855, 441 2, 777, 884 Total Uses Subtotal 26, 451, 965 31, 184, 228 31, 172, 565 35, 085, 798 Sources Over/(Under) Uses 1, 101, 978 ( 717, 544) ( 620, 128) ( 1, 905, 068) 4,361,640 6,147,140 10, 508, 780 4,428,568 3,953,356 8, 381, 924 4,397,569 5,491,083 9, 888, 652 572,825 600,000 4,169,593 2,641,166 7, 983, 584 Ending Fund Balance Debt Service Reserve (a) Operating Contingency (b) Operating Reserve (c) Undesignated, Unreserved Fund Balance Total Ending Fund Balance (a) Debt Service Reserve added in FY 2023/24 for planned debt issuance per Financial Policy 2.06. FY 2023/24 Operating Contingency was added to be used for potential recycling market volatility, transfer fee increases, and landfill increases. (c) In FY 2022/23, the Solid Waste Operating Reserve shifted from between 60 and 120 days of budget operating expenditures to 15 percent of operating uses, excluding transfers out. (d) In FY 2021/22, savings was achieved in a Solid Waste capital project and; therefore, the savings was transferred back from the CIP to the Solid Waste operating fund. (e) One-time bonuses approved by Council to active full and part-time employees paid in FY 2021/22. The funding used was Scottsdale AZ Cares funding that was in the Special Programs Fund. (f) Anticipated cost to implement the Classification and Compensation Study recommendations. (g) Budget adopted at the division level. At the start of the fiscal year the budget moves to a non-divisional account and then is transferred back to the divisions monthly as expenses occur. (h) Projected debt service payment on a planned FY 2023/24 debt issuance for the transfer station facility expansion. (b) 244 Table of Contents BUDGET BY FUND | Solid Waste Fund Five-Year Financial Forecast Adopted 2023/ 24 Forecast 2024/ 25 Forecast 2025/ 26 Forecast 2026/ 27 Forecast 2027/ 28 Beginning Fund Balance Debt Service Reserve (a) Operating Contingency (b) Operating Reserve (c) Undesignated, Unreserved Fund Balance Total Beginning Fund Balance 572,825 600,000 4,397,569 4,318,258 9, 888, 652 572,825 600,000 4,169,593 2,641,166 7, 983, 584 545,125 600,000 4,329,120 1,412,039 6, 886, 284 529,975 600,000 4,503,390 846,719 6, 480, 084 514,825 600,000 4,672,920 431,339 6, 219, 084 Revenues Solid Waste Service Charges - Residential Solid Waste Service Charges - Commercial Interest Earnings Miscellaneous 28,878,985 4,046,242 255,503 - 30,310,500 4,243,100 293,000 - 31,813,700 4,449,500 331,100 - 33,392,000 4,660,800 256,900 - 35,049,300 4,887,700 248,000 - 33, 180, 730 34, 846, 600 36, 594, 300 38, 309, 700 40, 185, 000 - - - - - - - - - - 33, 180, 730 34, 846, 600 36, 594, 300 38, 309, 700 40, 185, 000 29,009,258 1,031,593 8,000 1,785,696 277,211 46,880 (325,000) 43,561 30,235,300 1,039,400 8,000 1,875,000 283,500 48,000 (332,300) - 31,495,500 1,074,800 8,400 1,968,700 289,100 48,900 (339,000) - 32,733,100 1,108,300 8,800 2,067,200 294,800 49,900 (345,700) - 34,432,200 1,170,300 9,300 2,170,500 300,700 50,800 (352,600) - Subtotal 31, 877, 199 33, 156, 900 34, 546, 400 35, 916, 400 37, 781, 200 430,715 2,291,300 2,180,500 2,119,900 2,059,300 Subtotal 430, 715 2, 291, 300 2, 180, 500 2, 119, 900 2, 059, 300 32,307,914 35,448,200 36,726,900 38,036,300 39,840,500 2,566,007 211,877 400,000 95,700 200,000 73,600 440,000 94,400 140,000 134,100 Subtotal Transfers In CIP Operating Subtotal Total Sources Expenditures Public Works City Treasurer Administrative Services Citywide Indirect Cost Allocation Class and Comp Study Class and Comp Study (d) Leave Accrual Payments / Parental Leave Savings from Vacant Positions Utilities Vacation Trade Debt Service Future Issuance Solid Waste (e) TOTAL OPERATING BUDGET Transfers Out CIP CIP Technology 2, 777, 884 495, 700 273, 600 534, 400 274, 100 Total Uses Subtotal 35, 085, 798 35, 943, 900 37, 000, 500 38, 570, 700 40, 114, 600 Sources Over/(Under) Uses ( 1, 905, 068) ( 1, 097, 300) ( 406, 200) ( 261, 000) 70, 400 572,825 600,000 4,169,593 2,641,166 7, 983, 584 545,125 600,000 4,329,120 1,412,039 6, 886, 284 529,975 600,000 4,503,390 846,719 6, 480, 084 514,825 600,000 4,672,920 431,339 6, 219, 084 499,672 600,000 4,914,765 275,047 6, 289, 484 Ending Fund Balance Debt Service Reserve (a) Operating Contingency (b) Operating Reserve (c) Undesignated, Unreserved Fund Balance Total Ending Fund Balance (a) Debt Service Reserve added in FY 2023/24 for planned debt issuance per Financial Policy 2.06. FY 2023/24 Operating Contingency was added to be used for potential recycling market volatility, transfer fee increases, and landfill increases. (c) In FY 2022/23, the Solid Waste Operating Reserve shifted from between 60 and 120 days of budget operating expenditures to 15 percent of operating uses, excluding transfers out. (d) Anticipated cost to implement the Classification and Compensation Study recommendations. (e) Projected debt service payment on a planned FY 2023/24 debt issuance for the transfer station facility expansion. (b) 245 Table of Contents BUDGET BY FUND | Solid Waste Fund 730-(;%78)*92(7396')7 7SPMH;EWXI*YRHWSYVGIWJSV*=IUYEPQMPPMSR[LMGLMWERMRGVIEWISJQMPPMSRJVSQXLI*=EHSTXIH FYHKIX8LIWSYVGIWMRGPYHI7SPMH;EWXI7IVZMGI'LEVKIWJSVFSXLVIWMHIRXMEPERHGSQQIVGMEPGYWXSQIVWEW[IPPEW-RXIVIWX )EVRMRKWERHSGGEWMSREPP]1MWGIPPERISYW 730-(;%78)7)6:-')',%6+)76)7-()28-%0 *=XS*= MRQMPPMSRW 7SPMH;EWXI7IVZMGI'LEVKIW–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– 'SQQIVGMEPMRGPYHIWSPMH [EWXIWIVZMGIGLEVKIWJSVGSQQIVGMEPGYWXSQIVW'SQQIVGMEP GYWXSQIVWEVIGLEVKIHFEWIHYTSRXLIWM^ISJXLIGSRXEMRIV ERHXLIRYQFIVSJTMGOYTWTIVQSRXL3XLIV7SPMH;EWXI 7IVZMGI'LEVKIW'SQQIVGMEPVIZIRYIMRGPYHIWGSQQIVGMEP VSPPSJJGLEVKIWMRMXMEXMSRGLEVKIWPEXIGLEVKIWERH GSQQIVGMEPVIG]GPIHQEXIVMEPWJIIW*IIWERHGLEVKIWEVI VIZMI[IHERRYEPP]XSHIXIVQMRIMJXLI]GSZIVXLIGSWXWSJXLI WIVZMGIWTVSZMHIH8LI*=EHSTXIHFYHKIXMW QMPPMSRERMRGVIEWISJQMPPMSRJVSQXLI*= EHSTXIHFYHKIX *36)'%78 246 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds -28)6)78)%62-2+7 *=XS*= MRQMPPMSRW -RXIVIWX)EVRMRKWVIZIRYIEHSTXIHJSV*=MW QMPPMSRERMRGVIEWISJQMPPMSRJVSQXLI*= EHSTXIHFYHKIX-RXIVIWX)EVRMRKWEVIKIRIVEXIHSRXLI7SPMH ;EWXI*YRHGEWLFEPERGIXLVSYKLSYXXLI]IEV8LMWVIZIRYIMW EJYRGXMSRSJXLIVIPEXMSRWLMTFIX[IIRXLIEZEMPEFPIGEWL FEPERGIERHMRXIVIWXVEXI8LIGMX]IEVRWMRXIVIWXSRJYRHW XLVSYKLZEVMSYWMRZIWXQIRXZILMGPIWMREGGSVHERGI[MXL %VM^SRE6IZMWIH7XEXYXIWERH'MX]3VHMRERGI8LIGMX]’W MRZIWXQIRXTSPMG]WXVIWWIWWEJIX]EFSZI]MIPH 1-7')00%2)397 *=XS*= 1MWGIPPERISYWVIZIRYISJXIRVITVIWIRXWEVIZIRYISVGVIHMXXS XLIJYRHSYXWMHISJRSVQEPSTIVEXMSRW8LI*= EQSYRXMWTE]VSPPXE\VIXYVRGVIHMXWXLEX[IVIEFPIXSFI GPEMQIHHYIXSSJJIVMRK'3:-(PIEZI8LIEHSTXIH*= FYHKIXJSV1MWGIPPERISYWMWQMPPMSREWXLMWVIZIRYI WSYVGIMWYRGSQQSR *36)'%78 &9(+)8 %'89%0*36)'%78 247 Table of Contents BUDGET BY FUND | Solid Waste Fund 86%27*)67-2 8VERWJIVW-RMWXLIEYXLSVM^IHQSZIQIRXSJGEWLSVSXLIVVIWSYVGIWJVSQSXLIVJYRHW '-4 *=XS*= MRQMPPMSRW *=ERH*=8VERWJIVW-RVITVIWIRXWEZMRKW JVSQGSQTPIXIH'ETMXEP-QTVSZIQIRX4PER '-4 TVSNIGXW 34)6%8-2+ *=XS*= MRQMPPMSRW *=3TIVEXMRKXVERWJIVMRMWJSVSRIXMQIFSRYWIWTEMH XSGMX]IQTPS]IIWJYRHIHF]XLI%>'EVIWJYRHMRK *36)'%78 248 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds 730-(;%78)*92(97)7 8LI7SPMH;EWXI*YRHYWIWEVITVIWIRXIHF]HMZMWMSR 4YFPMG;SVOW'MX]8VIEWYVIVERH%HQMRMWXVEXMZI7IVZMGIW ERHEPWSMRGPYHI 'MX][MHI-RHMVIGX'SWX%PPSGEXMSRERHRSRHMZMWMSREPYWIW 49&0-';36/7 *=XS*= MRQMPPMSRW 4YFPMG;SVOWTVSZMHIWWSPMH[EWXIGSPPIGXMSRXVERWTSVXEXMSR HMWTSWEPGSQTPMERGIERHIHYGEXMSR8LIKSEPMWXSTVSZMHI XLIWIWIVZMGIWEXXLIPS[IWXTVEGXMGEPVEXI[MXLXLILMKLIWX TSWWMFPIGYWXSQIVWEXMWJEGXMSR8LI*=adopted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adopted FYHKIXMWQMPPMSR[LMGLVIQEMRW VIPEXMZIP]JPEX[LIRGSQTEVIHXSXLI*=EHSTXIH FYHKIX *36)'%78 &9(+)8 %'89%0*36)'%78 249 Table of Contents BUDGET BY FUND | Solid Waste Fund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’ FYHKIXERHEGXYEPWXLEXEVIHMWTPE]IHMRXLIKVETLWEVIJSV GSQTEVMWSRTYVTSWIWSRP]EWXLII\TIRHMXYVIWEVIEGXYEPP]VIGSVHIHERHVITSVXIHEWTEVXSJXLIETTPMGEFPIHMZMWMSR’WYWIW &IKMRRMRKMR*=HYIXSEREHQMRMWXVEXMZIGLERKIQSWXRSRHMZMWMSREPYWIWEVIMRMXMEPP]TPEGIHMRXSXLIHMZMWMSRWMRWXIEHSJ EXEQEGVSPIZIPXLIRQSZMRKXLIFYHKIXXSEQEGVSPIZIPLSPHMRKEGGSYRXEXXLIFIKMRRMRKSJXLIJMWGEP]IEVERHGSQTPIXMRKFYHKIX XVERWJIVWXSQSZIXLIRIIHIHFYHKIXFEGOXSXLIETTPMGEFPIHMZMWMSRWEWI\TIRHMXYVIWSGGYV8LIEHQMRMWXVEXMZIGLERKIMWMRER IJJSVXXSLEZIQSVIQIERMRKJYP]IEVSZIV]IEVGSQTEVMWSRW *36)'%78 250 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds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adoptedFYHKIX isQMPPMSR, budgetedEXXLIHMZMWMSRPIZIP 0)%:)%''69%04%=1)2874%RENTAL0)%:) *=XS*= 0IEZI%GGVYEP4E]QIRXWMRGPYHIEGGYQYPEXIHQIHMGEPERHSV ZEGEXMSRPIEZITEMHSYXEXXLIXMQISJVIXMVIQIRXSV WITEVEXMSRJVSQXLIGMX]Parental Leave allows for a fourweek paid leave for new parents. 8LIXSXEP*=0IEZI %GGVYEP4E]QIRXWFYHKIXMW[LMGLMRGPYHIW FYHKIXIHJSVQIHMGEPPIEZIEGGVYEPTE]SYXW FYHKIXIHJSVZEGEXMSREGGVYEPTE]SYXWERH FYHKIXIHJSVTEVIRXEPPIEZI *36)'%78 &9(+)8 %'89%0*36)'%78 251 Table of Contents BUDGET BY FUND | Solid Waste Fund 7%:-2+7*631:%'%28437-8-327 *=XS*= MRQMPPMSRW 8LIEQSYRXSJWEZMRKWEGLMIZIHJVSQZEGERXTSWMXMSRWJSV*= MWIWXMQEXIHEX  QMPPMSR 98-0-8-)7 *=XS*= 9XMPMXMIWEVIFYHKIXIHEXXLIHMZMWMSRPIZIPERHXLIREXXLI FIKMRRMRKSJXLI]IEVEVIQSZIHXSEQEGVSEGGSYRX &YHKIXMRKSREQEGVSPIZIPMWEXSSPYWIHF]XLI&YHKIX (ITEVXQIRXXSQSVIEGGYVEXIP]XVEGOLS[I\TIRWIWEVI SGGYVVMRKF]IEGLHMZMWMSR9XMPMXMIWMRGPYHIGMX]I\TIRWIWSR [EXIVIPIGXVMGWI[IVKEWWSPMH[EWXIERHVIG]GPMRK WIVZMGIW8LI*=9XMPMXMIWadopted FYHKIXMW [LMGLMWLMKLIV[LIRGSQTEVIHXSXLI*= EHSTXIHFYHKIX :%'%8-3286%() *=XS*= 8LI:EGEXMSR8VEHITVSKVEQEPPS[WIQTPS]IIW[LSLEZIFIIR IQTPS]IHF]XLIGMX]JSVJMZI]IEVWSVQSVIERH[LSLEZIYWIH EXPIEWXLSYVWSJZEGEXMSR LSYVWJSVLSYV IQTPS]IIW HYVMRKXLIETTVSZIHIPMKMFMPMX]TIVMSHQE]IPIGXXS XVEHIYTXSLSYVW LSYVWJSVLSYVIQTPS]IIW SJ ZEGEXMSRJSVIUYMZEPIRXGSQTIRWEXMSR%:EGEXMSR8VEHI TVSKVEQ[EWRSXETTVSZIHJSV*=ERH*= *36)'%78 252 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds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able of Contents BUDGET BY FUND | Solid Waste Fund '-48)',2303+= *=XS*= '-48IGLRSPSK]MRGPYHIWXSLIPTGSZIVXLI7SPMH ;EWXI*YRH WTSVXMSRSJGMX][MHIXIGLRSPSK]GETMXEPTVSNIGXW HYVMRK*= 730-(;%78)*92()2(-2+&%0%2') *YRHFEPERGIVIWIVZIWTVSXIGXXLIGMX]’WJMRERGMEPGSRHMXMSRERHTVSZMHIJSVYRI\TIGXIHIGSRSQMGGLEPPIRKIW+VS[XLSJJYRH FEPERGISGGYVW[LIRWSYVGIWI\GIIHYWIW4VYHIRXJMWGEPQEREKIQIRXHMGXEXIWJYRHFEPERGIWWLSYPHSRP]FIYWIHJSV RSRVIGYVVMRK RSRSTIVEXMSREP I\TIRHMXYVIW3RGIJYRHFEPERGIWEVIWTIRXXLI]EVISRP]VITPIRMWLIHF]JYXYVI]IEVWSYVGIWMR I\GIWWSJYWIW8LIGMX]’WFYHKIXTPERRMRKFSRHMRHIRXYVIERHEHSTXIHJMRERGMEPTSPMGMIWGEPPJSVXLIIWXEFPMWLQIRXSJVIWIVZIWEW TEVXSJXLIVIWSYVGIEPPSGEXMSRPMQMXWIXXMRKTVSGIWW8LMWTVSGIWWEPPS[WXLIGMX]XSWIXEWMHIWEZMRKWFIJSVIFIMRKEPPSGEXIHSV WTIRXEWFYHKIXIHI\TIRHMXYVIW8LIWTIGMJMGQEOIYTSJXLIGMX]’W7SPMH;EWXI*YRHIRHMRKFEPERGIMWRSXIHMRXLIJSPPS[MRK ()&87)6:-')6)7)6:) *=XS*= MRQMPPMSRW 4IV*MRERGMEP4SPMG]2SXLMWVIWIVZIMWVIUYMVIHTIVXLI XIVQSJXLIVIZIRYIFSRHMRHIRXYVIXSIRWYVIXLEXJYRHWEVI WIXEWMHIEWGSPPEXIVEPJSVXLI&SRHWHIFXWIVZMGITE]QIRXW *36)'%78 254 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Water and Water Reclamation Funds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able of Contents FY 2023/24 Adopted Budget 256 Table of Contents BUDGET BY FUND | Aviation Fund FUND PURPOSE This fund accounts for the transactions related to the city’s aviation business activity at the Scottsdale Airport, which includes operating sources and uses. Capital expenditures are accounted for in a separate Aviation Capital Fund. Aviation Fund Sources (% to Total) $9.7 Million Aviation Fund Uses (% to Total) $6.1 Million Rounding differences may occur. 257 Table of Contents BUDGET BY FUND | Aviation Fund A ct u al 2021/ 22 B eg i n n i n g Fu n d B a l a n c e Debt Service Reserve Fleet Replacement Reserve Future Capital Replacement Operating Reserve Undesignated, Unreserved Fund Balance T ot a l B e g i n n i n g F u n d B a l a n c e R ev en u es Airport Fees Jet Fuel Property Rental Interest Earnings(a) Federal Grants(b) Miscellaneous T r a n s f er s I n S u b t ot a l A d op t e d 2022/ 23 F or e c a s t 2022/ 23 A d op t e d 2023/ 24 1,010,500 2,276,278 825,604 1,634,432 5, 746, 814 1,196,500 1,769,800 925,597 1,960,292 5, 852, 189 1,196,500 2,199,611 1,132,600 2,303,409 6, 832, 120 430,561 960,739 5,220,800 922,308 2,806,413 10, 340, 821 8,623,987 232,469 177,349 39,092 7,918,961 179,000 182,624 31,278 8,898,300 250,000 182,624 84,767 9,174,872 223,000 188,586 162,396 205,000 - - - 24,490 - - - 9, 302, 387 8, 311, 863 9, 415, 691 9, 748, 854 Debt Svc MPC Bonds(c) 740,599 - - - (d) 33,617 - - - 774, 216 - - - 10, 076, 603 8, 311, 863 9, 415, 691 9, 748, 854 2,770,600 423,680 190,311 72,954 3,072,216 446,810 101,966 - 2,875,353 446,810 101,966 - 3,195,174 419,300 127,452 - - - 28,704 - 47,878 Operating S u b t ot a l T ot a l S ou r c e s E x p en d i t u r es Community and Economic Development Citywide Direct Cost Allocation Citywide Indirect Cost Allocation GAAP Adjustment(e) Citywide Pay Program Class and Comp Study (f) Fuel and Maint and Repair (g) Leave Accrual Payments / Parental Leave Utilities (g) Vacation Trade Savings from Vacant Positions De b t S e r v i c e MPC Bonds Debt Svc - Airport - 42,838 - 108,500 - 108,500 85,061 163,493 - - 7,894 (35,000) - 4,000 (40,000) S u b t ot a l 3, 457, 544 S u b t ot a l 1, 724, 244 1, 719, 244 1, 719, 244 1, 722, 244 5,181,788 5,421,630 5,408,476 5,639,541 3,035,287 33,623 740,599 487,233 11,281 - 487,233 11,281 - 461,635 36,901 - TOTAL OPERATING BUDGET T r a n s f er s O u t CIP CIP Technology Debt Svc MPC Bonds - S u b t ot a l 1,724,244 3, 702, 386 1,719,244 3, 689, 232 1,719,244 3, 917, 297 1,722,244 3, 809, 509 498, 514 498, 514 498, 536 T ot a l Us e s 8, 991, 297 5, 920, 144 5, 906, 990 6, 138, 077 S ou r c e s O v e r / ( Un d e r ) Us e s 1, 085, 305 2, 391, 719 3, 508, 701 3, 610, 777 E n d i n g Fu n d B a l a n c e Debt Service Reserve(h) Fleet Replacement Reserve Future Capital Replacement Operating Reserve Undesignated, Unreserved Fund Balance T ot a l E n d i n g F u n d B a l a n c e (a) - - 430,561 430,675 1,196,500 2,199,611 1,132,600 2,303,409 6, 832, 120 1,396,300 5,220,800 925,597 701,211 8, 243, 908 960,739 5,220,800 922,308 2,806,413 10, 340, 821 1,890,800 5,442,139 979,324 5,208,660 13, 951, 598 Increase in Interest Earnings is due to rising interest rates. One-time federal grant received. (c) Intra-funds transfer for debt service. (d) One-time bonuses approved by Council to active full and part-time employees paid in FY 2021/22. The funding used was Scottsdale AZCares funding that was in the Special Programs Fund. (e) Adjustment to align with fund balance calculation used in the Annual Financial Report. (f) Anticipated cost to implement the Classification and Compensation Study recommendations. (g) Budget adopted at the division level. At the start of the fiscal year the budget will move to a non-divisional account and then be transferred back to the division monthly as expenses occur. (h) Debt Service Reserve was established in FY 2022/23 per Financial Policy No. 2.06. (b) 258 Table of Contents BUDGET BY FUND | Aviation Fund B eg i n n i n g Fu n d B a l a n c e Debt Service Reserve Fleet Replacement Reserve Future Capital Replacement Operating Reserve Undesignated, Unreserved Fund Balance T ot a l B e g i n n i n g F u n d B a l a n c e R ev en u es Airport Fees Jet Fuel Property Rental Interest Earnings(a) Federal Grants Miscellaneous F or e c a s t 2024/ 25 F or e c a s t 2025/ 26 F or e c a s t 2026/ 27 F or e c a s t 2027/ 28 430,561 960,739 5,220,800 922,308 2,806,413 10, 340, 821 430,675 1,890,800 5,442,139 979,324 5,208,660 13, 951, 598 430,175 1,890,800 7,630,425 968,450 6,786,948 17, 706, 798 430,300 1,890,800 9,986,400 1,001,875 8,235,923 21, 545, 298 429,750 1,890,800 13,213,750 1,036,550 8,593,148 25, 163, 998 9,174,872 223,000 188,586 162,396 9,266,300 225,200 189,500 187,100 9,358,800 227,500 190,300 212,500 9,451,900 229,800 191,300 163,300 9,546,400 232,100 192,100 158,200 - - - - - - - - - - 9, 748, 854 9, 868, 100 9, 989, 100 10, 036, 300 10, 128, 800 - - - - - - - - - - - - - - - T ot a l S ou r c e s 9, 748, 854 9, 868, 100 9, 989, 100 10, 036, 300 10, 128, 800 E x p en d i t u r es Community and Economic Development Citywide Direct Cost Allocation Citywide Indirect Cost Allocation GAAP Adjustment 3,195,174 419,300 127,452 - 3,277,100 440,300 133,800 - 3,381,000 462,300 140,500 - 3,488,300 485,400 147,500 - 3,672,300 509,700 154,900 - 47,878 49,000 49,900 50,900 51,900 T r a n s f er s I n Debt Svc MPC Bonds S u b t ot a l A d op t e d 2023/ 24 Operating S u b t ot a l Citywide Pay Program Class and Comp Study (b) Fuel and Maint and Repair Leave Accrual Payments / Parental Leave Utilities Vacation Trade Savings from Vacant Positions De b t S e r v i c e MPC Bonds Debt Svc - Airport - - - - 13,600 - 13,800 - 14,100 - 14,400 - 4,000 (40,000) (40,000) (40,000) (40,000) (40,000) S u b t ot a l 3, 917, 297 S u b t ot a l 1, 722, 244 1, 722, 700 1, 720, 700 1, 721, 200 1, 719, 000 5,639,541 5,596,500 5,728,200 5,867,400 6,082,200 461,635 36,901 - 503,200 13,200 - 416,200 6,200 - 539,800 10,400 - 492,900 14,100 - TOTAL OPERATING BUDGET T r a n s f er s O u t CIP CIP Technology Debt Svc MPC Bonds 163,493 - 1,722,700 4, 007, 500 1,720,700 4, 146, 200 1,721,200 4, 363, 200 1,719,000 498, 536 516, 400 422, 400 550, 200 507, 000 T ot a l Us e s 6, 138, 077 6, 112, 900 6, 150, 600 6, 417, 600 6, 589, 200 S ou r c e s O v e r / ( Un d e r ) Us e s 3, 610, 777 3, 755, 200 3, 838, 500 3, 618, 700 3, 539, 600 E n d i n g Fu n d B a l a n c e Debt Service Reserve Fleet Replacement Reserve Future Capital Replacement Operating Reserve Undesignated, Unreserved Fund Balance T ot a l E n d i n g F u n d B a l a n c e (a) (b) S u b t ot a l 1,722,244 3, 873, 800 430,675 430,175 430,300 429,750 429,750 1,890,800 5,442,139 979,324 5,208,660 13, 951, 598 1,890,800 7,630,425 968,450 6,786,948 17, 706, 798 1,890,800 9,986,400 1,001,875 8,235,923 21, 545, 298 1,890,800 13,213,750 1,036,550 8,593,148 25, 163, 998 1,890,800 16,467,250 1,090,800 8,824,998 28, 703, 598 Increase in Interest Earnings is due to rising interest rates. Anticipated cost to implement the Classification and Compensation Study recommendations. 259 Table of Contents BUDGET BY FUND | Aviation Fund AVIATION FUND SOURCES Aviation Fund sources for FY 2023/24 are $9.7 million, most of which is received from Airport Fees. Other sources include Jet Fuel, Property Rental, Interest Earnings, and in prior years, Federal Grants, Miscellaneous and Transfers In. AIRPORT FEES FY 2019/20 to FY 2025/26 (in millions) Airport Fees are fees imposed for the aeronautical use of airport facilities, including but not limited to: aircraft overnight parking fees, hangar rentals, fuel flowage and transient landing fees. The Airport Fees are reviewed annually to determine if they cover the costs of the services provided. The Airport Fees FY 2023/24 adopted budget is $9.2 million which is $1.3 million higher than the FY 2022/23 adopted budget. The increase is due to an overall rise in business activity. JET FUEL FY 2019/20 to FY 2025/26 (in millions) A jet fuel tax of 18 cents is charged to every gallon of fuel purchased at the airport. The FY 2023/24 Jet Fuel adopted budget is $0.2 million, which remains relatively flat when compared to the FY 2022/23 adopted budget. *36)'%78 260 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Aviation Fund PROPERTY RENTAL FY 2019/20 to FY 2025/26 (in millions) Property Rental includes the annual $0.1 million amortization payment of a 20-year land lease for the construction and operation of a park-and-ride facility at the airport that sunsets in 2032; as well as the rent of a well site, radio shop and a fire station managed by other city divisions. The FY 2023/24 adopted budget for Property Rental is $0.2 million, which remains relatively flat from the FY 2022/23 adopted budget. INTEREST EARNINGS FY 2019/20 to FY 2025/26 (in thousands) Interest earnings are generated on idle Aviation Fund cash balances throughout the year. This revenue is a function of the relationship between the available cash balance and interest rate. The city earns interest on funds through various investment vehicles in accordance with Arizona Revised Statutes and City Ordinance. The city’s investment policy stresses safety above yield. Interest Earnings is budgeted at $0.2 million in FY 2023/24. FEDERAL GRANTS FY 2019/20 to FY 2025/26 (in millions) The FY 2020/21 and FY 2021/22 actual amounts for Federal Grants are related to two one-time federal grants received to mitigate the impact of the COVID-19 pandemic. *36)'%78 &9(+)8 %'89%0*36)'%78 261 Table of Contents BUDGET BY FUND | Aviation Fund MISCELLANEOUS FY 2019/20 to FY 2025/26 Miscellaneous includes other types of one-time revenue that may or may not be received each year such as the FY 2019/20 reimbursement for electricity charges during construction of the Aviation Business Center, and the FY 2020/21 reimbursement as part of an audit review settlement related to a bond-funded capital project. TRANSFERS IN Transfers In is the authorized movement of cash or other resources from other funds and/or capital projects. DEBT SVC MPC BONDS FY 2019/20 to FY 2025/26 (in millions) Debt Svc MPC Bonds is an internal transfer between airport funds to repay the debt service from the FY 2017/18 issuance of Municipal Corporation Bonds in order to finance the Airport Terminal Area Redevelopment capital improvement project. *36)'%78 262 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Aviation Fund OPERATING FY 2019/20 to FY 2025/26 The Operating Transfers In amount in FY 2021/22 is related to one-time bonuses approved by Council to active full and parttime employees. The funding used was Scottsdale AZCares funding that was in the Special Programs Fund. AVIATION FUND USES The Aviation Fund uses are presented as a portion of the Community and Economic Development division's operating budget. Additionally, there are uses related to Direct and Indirect Cost Allocation, Class and Comp Study, Fuel and Maintenance and Repair, Leave Accrual Payments/Parental Leave, Utilities, Vacation Trade, Savings from Vacant Positions, Debt Service, and Transfers Out to other funds. COMMUNITY AND ECONOMIC DEVELOPMENT FY 2019/20 to FY 2025/26 (in millions) Community and Economic Development includes costs related to the operation and maintenance of the city's airport. The FY 2023/24 adopted budget is $3.2 million, which is $0.1 million higher than the FY 2022/23 adopted budget mostly due to increases in Personnel Services costs. *36)'%78 &9(+)8 %'89%0*36)'%78 263 Table of Contents BUDGET BY FUND | Aviation Fund CITYWIDE DIRECT COST ALLOCATION FY 2019/20 to FY 2025/26 (in millions) Citywide Direct Cost Allocation represents Aviation Fund charges for the direct cost of fire service at the airport performed by General Fund personnel. The FY 2023/24 budget for this allocation is $0.4 million, which remains flat when compared to the FY 2022/23 adopted budget. CITYWIDE INDIRECT COST ALLOCATION FY 2019/20 to FY 2025/26 (in millions) Citywide Indirect Cost Allocation represents charges to the Aviation Fund for specific General Fund central administrative functions, which benefit the Enterprise operations (e.g., City Manager, Information Technology, Human Resources, Legal, etc.). The city’s indirect costs are allocated to the Enterprise Funds based on relative benefits received. The citywide indirect cost allocation for the FY 2023/24 adopted budget is $0.1 million, which remains relatively flat from the FY 2022/23 adopted budget. GAAP ADJUSTMENT FY 2019/20 to FY 2025/26 (in millions) A GAAP Adjustment was recorded in FY 2021/22 to align with fund balance calculation used in the Annual Financial Report. *36)'%78 264 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Aviation Fund DEBT SERVICE Debt Service is the payment of principal, interest and related service charges on obligations resulting from the issuance of bonds. MPC BONDS DEBT SVC - AIRPORT FY 2019/20 to FY 2025/26 (in millions) Contracts Payable represents the repayment of Municipal Property Corporation (MPC) bonds, along with the applicable annual fiscal agent fees. The FY 2023/24 adopted budget is $1.7 million. The bonds were used for the Airport Terminal Area Redevelopment capital project. NON-DIVISIONAL USES Non-Divisional Uses are items that were budgeted in citywide macro level holding accounts. As expenditures occur in the applicable divisions, budget transfers are completed to move the needed budget from the macro level holding accounts to the respective divisions. Therefore, the FY 2022/23 year-end forecast and prior years’ budget and actuals that are displayed in the graphs are for comparison purposes only as the expenditures are actually recorded and reported as part of the applicable division’s uses. Beginning in FY 2020/21 due to an administrative change, most non-divisional uses are initially placed into the divisions instead of at a macro level. Then moving the budget to a macro level holding account at the beginning of the fiscal year and completing budget transfers to move the needed budget back to the applicable divisions as expenditures occur. The administrative change is in an effort to have more meaningful year-over-year comparisons. CLASS AND COMP STUDY FY 2019/20 to FY 2025/26 The Class and Comp Study reflects the anticipated cost to implement the recommendations from the Public Service Personnel Consultants Classification and Compensation study that will take place in late 2023. The FY 2023/24 Class and Comp Study is estimated at $47,878. *36)'%78 &9(+)8 %'89%0*36)'%78 265 Table of Contents BUDGET BY FUND | Aviation Fund FUEL AND MAINT AND REPAIR FY 2019/20 to FY 2025/26 (in millions) Beginning in FY 2019/20, Fuel and Maint and Repair are budgeted at the division level and then, at the beginning of the fiscal year, are moved to a macro account. Budgeting on a macro level is a tool used by the budget department to more accurately track how expenses are occurring by each division. Fuel and Maint and Repair includes expenses related to vehicle and equipment repairs and fuel usage. The FY 2023/24 Fuel and Maint and Repair adopted budget is $0.1 million, budgeted at the division level. LEAVE ACCRUAL PAYMENTS / PARENTAL LEAVE FY 2019/20 to FY 2025/26 These payments include accumulated medical and/or vacation leave paid out at the time of retirement or separation from the city, or a four-week paid parental leave. FY 2023/24 leave accrual payments of $163,493, include $104,000 budgeted for medical leave accrual payouts, $56,000 budgeted for vacation leave accrual payouts, and $3,493 in parental leave budget. The FY 2022/23 year-end forecast and FY 2019/20 - FY 2021/22 actuals displayed are recorded and reported as part of the division's expenditures. UTILITIES FY 2019/20 to FY 2025/26 (in millions) Beginning in FY 2020/21, Utilities are budgeted at the division level and then at the beginning of the year are moved to a macro account. Budgeting on a macro level is a tool used by the Budget Department to more accurately track how expenses are occurring by each division. Utilities include city expenses on water, electric, sewer, gas, solid waste and recycling services. The FY 2023/24 Utilities adopted budget is $0.2 million which remains relatively flat when compared to the FY 2022/23 adopted budget. *36)'%78 266 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Aviation Fund VACATION TRADE FY 2019/20 to FY 2025/26 Through the Vacation Trade Program employees who have been employed by the city for five years or more, and have used at least 80 hours of vacation between October 24, 2021 and October 22, 2022, may elect to trade up to 40 hours of vacation time for cash. The program was canceled in FY 2020/21 and in FY 2021/22, but has been restated for FY 2022/23. The FY 2023/24 Vacation Trade adopted budget is $4,000. SAVINGS FROM VACANT POSITIONS FY 2019/20 to FY 2025/26 The amount of savings achieved from vacant positions for FY 2023/24 is estimated at ($40,000), which includes anticipated retirements within the city, and the impact of challenges in the labor market. TRANSFERS OUT Transfers Out are the authorized movement of cash to other funds and/or capital projects. More specific information is detailed below. *36)'%78 &9(+)8 %'89%0*36)'%78 267 Table of Contents BUDGET BY FUND | Aviation Fund CIP FY 2019/20 to FY 2025/26 (in millions) Transfers Out CIP are used to fund capital projects related to the Airport. The FY 2023/24 CIP adopted budget is $0.5 million. FY 2019/20 includes a transfer to the Capital Improvement Plan (CIP) for the design and construction of aircraft box hangars and pavement preservation at the airport that was budgeted, but not processed in FY 2018/19. CIP TECHNOLOGY FY 2019/20 to FY 2025/26 CIP Technology is the authorized transfer to CIP to fund technology-related capital projects. The FY 2023/24 adopted budget is $36,901. DEBT SVC MPC BONDS FY 2019/20 to FY 2025/26 (in millions) Debt Svc MPC Bonds is an internal transfer between airport funds to repay the debt service from the FY 2017/18 issuance of Municipal Corporation Bonds (MPC) in order to finance the Airport Terminal Area Redevelopment capital improvement project. *36)'%78 268 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Aviation Fund AVIATION FUND ENDING BALANCE Fund balance protects the city’s financial condition and provides for unexpected economic challenges. The city’s budget planning and adopted financial policies call for the establishment of reserves as part of the resource allocation/limit setting process. This process allows the city to set aside savings before they are allocated or spent as budgeted expenditures. The specific make-up of the city’s Aviation Fund ending balance and reserves are noted in the following: DEBT SERVICE RESERVE FY 2019/20 to FY 2025/26 (in millions) The Debt Service Reserve was established in FY 2022/23 by Financial Policy No. 2.06 to set aside funds for the repayment of debt service. The FY 2023/24 Debt Service Reserve is $0.4 million. FLEET REPLACEMENT RESERVE FY 2019/20 to FY 2025/26 (in millions) The Fleet Replacement Reserve is intended to ensure adequate funding for the replacement of aviation vehicles and heavy equipment. The FY 2023/24 Fleet Replacement Reserve ending fund balance is $1.9 million. *36)'%78 &9(+)8 %'89%0*36)'%78 269 Table of Contents BUDGET BY FUND | Aviation Fund FUTURE CAPITAL REPLACEMENT FY 2019/20 to FY 2025/26 (in millions) The Future Capital Replacement Reserve ensures adequate funding for emergency repair and replacement needs at the airport. The balance for the Future Capital Replacement Reserve in FY 2023/24 is $5.4 million. OPERATING RESERVE FY 2019/20 to FY 2025/26 (in millions) Operating Reserve, per Financial Policy No. 2.04, is intended to provide for emergencies, unexpected declines in revenues and other unanticipated events or opportunities; and it is calculated as 25 percent of operating uses, excluding transfers out and debt service. The FY 2023/24 ending fund balance includes an Operating Reserve of $1.0 million. UNDESIGNATED, UNRESERVED FUND BALANCE FY 2019/20 to FY 2025/26 (in millions) The Undesignated, Unreserved Fund Balance accounts for any remaining funds after the designation of all other reserves/uses. Under prudent fiscal management practices, this balance should most appropriately be used for one-time uses, not to fund new or to expand programs with ongoing operating expenses. The FY 2023/24 ending Undesignated, Unreserved Fund Balance is $5.2 million. *36)'%78 270 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Internal Service Funds Overview INTERNAL SERVICE FUNDS DESCRIPTION Internal Service Funds account for the financing, on a cost-reimbursement basis, of commodities or services provided by one program for the benefit of other programs within the city. Users of internal services are charged for those services based on use. Scottsdale has four separate Internal Service Funds to account for the activity of this fund type: Fleet Management, PC Replacement, Risk Management and Healthcare Self Insurance. Internal Service Offsets are included to avoid duplicating the budget, since the charges for these services are already included in the divisions’ budgets. Internal Service Funds Sources (% to Total) $90.7 Million Internal Service Funds Uses (% to Total) $89.1 Million 271 Table of Contents FY 2023/24 Adopted Budget 272 Table of Contents BUDGET BUDGET BYBY FUND FUND | Healthcare | General Fund Self Insurance Ending Balance Fund FUND PURPOSE The Healthcare Self Insurance Fund is used to account for the city’s self insured medical and dental benefits. Revenue to this fund is derived from premiums charged to both the city and employees. The premiums are collected for the city’s portion by charging the divisions and through payroll deductions for the employee’s portion. Revenue is also collected through premium charges to Public Safety disabled retirees (including, per City Council direction, a subsidy transfer from the General Fund to cover Public Safety disabled retirees costs that exceed the premium charges) as well as state subsidies on healthcare contributions, Consolidated Omnibus Budget Reconciliation Act (COBRA), and stop loss insurance recoveries. This fund provides payment of actual healthcare expenses (medical, behavioral, prescription and dental claims) as well as claims administration and other benefit plan expenses. Healthcare Self Insurance Fund Sources (% to Total) $ 3 9 . 2 M i l l i on Healthcare Self Insurance Fund Uses (% to Total) $ 3 9 . 2 M i l l i on Rounding differences may occur. 273 Table of Contents BUDGET BY FUND | Healthcare Self Insurance Fund Summary Actual 2021/ 22 Adopted 2022/ 23 Forecast 2022/ 23 Adopted 2023/ 24 B e g i n n i n g Fu n d B a l a n c e IBNR Reserve 2,225,382 2,633,492 2,633,492 2,569,600 Operating Contingency 2,525,837 2,987,053 2,987,053 2,915,070 Premium Stabilization Reserve 2,981,883 2,995,596 2,995,596 3,163,047 Undesignated, Unreserved Fund Balance 12,383,420 10,007,270 10,296,168 11,126,173 20, 116, 522 18, 623, 411 18, 912, 309 19, 773, 890 Employer Contribution - Medical 24,294,641 28,619,388 26,483,988 29,229,111 Employee Contributions - Medical 7333970.04 8247684 7,862,584 7,599,568 Employer Contribution - Dental 787,688 981,016 981,016 962,436 Employee Contributions - Dental 722,500 778,368 778,368 793,935 Miscellaneous 392,828 284,000 284,000 251,100 Total Beginning Fund Balance R ev en u es Disabled Retiree Contributions 310,904 250,908 250,908 239,379 33,842,532 39,161,364 36,640,864 39,075,529 109,831 137,874 137,874 170,038 109,831 137,874 137,874 170,038 39, 897, 333 38, 940, 845 45, 653, 269 55, 454, 530 Medical Claims 31,534,863 34,615,089 32,020,089 35,028,489 Dental Claims 1,472,610 1,486,467 1,486,467 1,651,894 Insurance & Bond Premiums 1,009,465 981,220 1,178,020 1,333,720 Administrative Fees 572903.13 579,480 579480 579,480 Live Life Well Program 252609.42 336,538 336538 335,597 City Administration 199244.21 231,342 229,870 204,709 114879.94 86693 86693 86693 Subtotal T r a n sf e r s I n Operating Subtotal Total Sources E x p e n di t u r e s Behavioral Health Insurance Claims 0 0 0 3,359 35,156,575 38,316,829 35,917,157 39,223,941 35,156,575 38,316,829 35,917,157 39,223,941 Total Uses 35, 156, 575 38, 316, 829 35, 917, 157 39, 223, 941 Sources Over/(Under) Uses ( 1, 204, 213) 982, 409 861, 581 21, 626 IBNR Reserve 2633492 2769415 2569600 2812827 Operating Contingency 2,987,053 3,140,835 2,915,070 3,191,193 Operating Reserve 2,995,596 3,382,331 3,163,047 3,377,725 Undesignated, Unreserved Fund Balance 10,296,168 10,313,239 11,126,173 10,413,771 18, 912, 309 19, 605, 820 19, 773, 890 19, 795, 516 Class and Comp Study (a) Subtotal TOTAL OPERATING BUDGET E n d i n g Fu n d B a l a n c e Total Ending Fund Balance (a) Anticipated cost to implement the Classification and Compensation Study recommendations. 274 Table of Contents BUDGET BY FUND | Healthcare Self Insurance Fund Five-Year Financial Forecast Adopted 2023/ 24 Forecast 2024/ 25 Forecast 2025/ 26 Forecast 2026/ 27 Forecast 2027/ 28 B e g i n n i n g Fu n d B a l a n c e IBNR Reserve 2,569,600 2,812,827 2,957,487 3,106,221 3,262,463 Operating Contingency 2,915,070 3,191,193 3,355,294 3,524,031 3,701,285 Premium Stabilization Reserve 3,163,047 3,377,725 3,548,008 3,726,958 3,930,338 Undesignated, Unreserved Fund Balance 11,126,173 10,413,771 9,945,427 9,481,306 9,151,630 19, 773, 890 19, 795, 516 19, 806, 216 19, 838, 516 20, 045, 716 Employer Contribution - Medical 29,229,111 30,730,400 32,309,000 34,144,900 36,086,000 Employee Contributions - Medical 7,599,568 7,979,500 8,378,400 8,797,400 9,237,300 Employer Contribution - Dental 962,436 1,010,600 1,061,100 1,114,100 1,169,800 Employee Contributions - Dental 793,935 809,800 826,000 842,500 859,400 Miscellaneous 251,100 253,100 255,100 257,400 259,300 Total Beginning Fund Balance R ev en u es Disabled Retiree Contributions 239,379 251,400 264,100 277,400 291,400 39,075,529 41,034,800 43,093,700 45,433,700 47,903,200 170,038 194500 209600 225500 242900 170,038 194500 209600 225500 242900 55, 454, 530 52, 984, 500 52, 769, 300 53, 393, 300 54, 081, 600 Medical Claims 35,028,489 36,832,100 38,684,900 40,631,200 42,676,300 Dental Claims 1,651,894 1,734,500 1,821,200 1,912,300 2,007,900 Insurance & Bond Premiums 1,333,720 1,404,200 1,478,000 1,555,700 1,638,000 Administrative Fees 579,480 601,900 625,400 649,700 675,100 Live Life Well Program 335,597 336,500 337,200 337,900 345,700 City Administration 204,709 214,100 223,400 258,400 249,100 86693 91,900 97,400 103,200 109,500 Subtotal T r a n sf e r s I n Operating Subtotal Total Sources E x p e n di t u r e s Behavioral Health Insurance Claims 3,359 3,400 3,500 3,600 3,600 39,223,941 41,218,600 43,271,000 45,452,000 47,705,200 39,223,941 41,218,600 43,271,000 45,452,000 47,705,200 39, 223, 941 41, 218, 600 43, 271, 000 45, 452, 000 47, 705, 200 21, 626 10, 700 32, 300 207, 200 440, 900 IBNR Reserve 2812827 2957487 3106221 3262463 3426628 Operating Contingency 3,191,193 3,355,294 3,524,031 3,701,285 3,887,525 Operating Reserve 3,377,725 3,548,008 3,726,958 3,930,338 4,145,019 Undesignated, Unreserved Fund Balance 10,413,771 9,945,427 9,481,306 9,151,630 9,027,444 19, 795, 516 19, 806, 216 19, 838, 516 20, 045, 716 Class and Comp Study (a) Subtotal TOTAL OPERATING BUDGET Total Uses Sources Over/(Under) Uses E n d i n g Fu n d B a l a n c e Total Ending Fund Balance (a) Anticipated cost to implement the Classification and Compensation Study recommendations. 20, 486, 616 275 Table of Contents BUDGET BUDGET BYBY FUND FUND | Healthcare | General Fund Self Insurance Ending Balance Fund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able of Contents BUDGET BUDGET BYBY FUND FUND | Healthcare | General Fund Self Insurance Ending Balance Fund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able of Contents BUDGET BUDGET BYBY FUND FUND | Healthcare | General Fund Self Insurance Ending Balance Fund (-7%&0)(6)8-6))'3286-&98-327 *=XS*= MRQMPPMSRW (MWEFPIH6IXMVII'SRXVMFYXMSRWGETXYVIWXLI4YFPMG7EJIX] HMWEFPIHVIXMVIILIEPXLGEVITVIQMYQWVIGIMZIHXLVSYKLHMVIGX GSPPIGXMSRWEXXLIWEQIVEXIEWEREGXMZIIQTPS]II8LI*= EHSTXIHFYHKIXSJQMPPMSRVITVIWIRXWE HIGVIEWISJQMPPMSRwhen GSQTEVIHXSXLI*= EHSTXIHFYHKIX 86%27*)67-2 8VERWJIVW-RMWXLIEYXLSVM^IHQSZIQIRXSJGEWLSVSXLIVVIWSYVGIWJVSQSXLIVJYRHW 34)6%8-2+ *=XS*= MRQMPPMSRW 3TIVEXMRKMRGPYHIWEXVERWJIVMRJVSQXLI+IRIVEP*YRHTIV'MX] 'SYRGMPHMVIGXMSRXSWYFWMHM^IXLIERRYEPGSWXWXLEXI\GIIHIH TVIQMYQGSPPIGXMSRWJSV4YFPMG7EJIX]HMWEFPIHVIXMVIIW8SXEP STIVEXMRKXVERWJIVWMRJSV*=MWQMPPMSR[LMGLMW ERMRGVIEWISJQMPPMSRwhen GSQTEVIHXSXLI*= EHSTXIHFYHKIX ,)%08,'%6)7)0*-2796%2')*92(97)7 8LIHMVIGXSTIVEXMRKI\TIRHMXYVIWSJXLI,IEPXLGEVI7IPJ-RWYVERGI*YRHMRGPYHI1IHMGEP'PEMQW(IRXEP'PEMQW-RWYVERGI &SRH 4VIQMYQW%HQMRMWXVEXMZI*IIWLIEPXLVIPEXIHTVSKVEQWERH&ILEZMSVEP,IEPXL-RWYVERGI'PEMQW *36)'%78 278 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BUDGET BYBY FUND FUND | Healthcare | General Fund Self Insurance Ending Balance Fund 1)(-'%0'0%-17 *=XS*= MRQMPPMSRW 1IHMGEP'PEMQWMRGPYHIWEPPQIHMGEPGPEMQWI\TIRWIWJSV QIQFIVWSJXLITPERWMRGPYHMRKIQTPS]IIWERHXLIMVJEQMPMIW '3&6%TEVXMGMTERXWERH4YFPMG7EJIX]HMWEFPIHVIXMVIIW8LI *=EHSTXIHFYHKIXSJQMPPMSRVITVIWIRXWER MRGVIEWISJQMPPMSRJVSQXLI*=EHSTXIHFYHKIX QSWXP]HYIXSXLIMRGVIEWMRKGSWXWSJLIEPXLGEVI ()28%0'0%-17 *=XS*= MRQMPPMSRW (IRXEP'PEMQWMRGPYHIWEPPHIRXEPGPEMQWI\TIRWIWJSV QIQFIVWSJXLITPERWMRGPYHMRKIQTPS]IIWERHXLIMVJEQMPMIW ERH'3&6%TEVXMGMTERXW8LI*=adopted FYHKIXSJ QMPPMSRVITVIWIRXWERMRGVIEWISJQMPPMSRJVSQXLI *=EHSTXIHFYHKIX mostly due to the increasing costs of dental care. -2796%2') &32(46)1-917 *=XS*= MRQMPPMSRW -RWYVERGI &SRH4VIQMYQWMRGPYHIXLIWXSTPSWWMRWYVERGI TYVGLEWIHXSPMQMXXLIGMX] WI\TSWYVIXSPEVKIHSPPEVGPEMQW 8LMWX]TISJGSZIVEKIMWYWIHXSIRWYVIGEXEWXVSTLMGGPEMQWHS RSXYTWIXXLIJMRERGMEPVIWIVZIWSJXLIWIPJJYRHIHTPER8LI *=adopted FYHKIXSJQMPPMSRVITVIWIRXWE QMPPMSRMRGVIEWI[LIRGSQTEVIHXSXLI*=EHSTXIH FYHKIXTVMQEVMP]HYIXSVMWMRKGSWXWJSVI\GIWWPMEFMPMX] GSZIVEKIJSVEPPTPERWF]VSYKLP]TIVGIRX *36)'%78 &9(+)8 %'89%0*36)'%78 279 Table of Contents BUDGET BUDGET BYBY FUND FUND | Healthcare | General Fund Self Insurance Ending Balance Fund %(1-2-786%8-:)*))7 *=XS*= MRQMPPMSRW %HQMRMWXVEXMZI*IIWEVIXLIGSWXWMRGYVVIHJSVEHQMRMWXIVMRK XLILIEPXLGEVIERHHIRXEPTPERW8LI*=EHSTXIH FYHKIXSJQMPPMSRMWJPEXGSQTEVIHXSXLI*= EHSTXIHFYHKIX 0-:)0-*);)00463+6%1 *=XS*= MRQMPPMSRW 0MZI0MJI;IPP4VSKVEQMRGPYHIWMRGIRXMZIWXSIQTPS]IIWXS IRGSYVEKITEVXMGMTEXMSRMRZEVMSYWLIEPXLERH[IPPRIWWIZIRXW GLEPPIRKIWEGXMZMXMIWERHGPEWWIW8LI*=EHSTXIH FYHKIXSJQMPPMSRMRGPYHIWQMPPMSRJSVE[IPPRIWW MRGIRXMZIXSIQTPS]IIWIRVSPPIHMREQIHMGEPTPERXLEX GSQTPIXIERERRYEP[IPPRIWWI\EQERHLIEPXLEWWIWWQIRX '-8=%(1-2-786%8-32 *=XS*= MRQMPPMSRW 8LIGMX] WEHQMRMWXVEXMZII\TIRWIWMRGYVVIHEVIXSGSSVHMREXI LIEPXLGEVIFILEZMSVEPHIRXEPERH[IPPRIWWTPERW8LI EHSTXIH*=FYHKIXSJQMPPMSRVIQEMRWJPEX whenGSQTEVIHXSXLI*=EHSTXIHFYHKIX *36)'%78 280 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BUDGET BYBY FUND FUND | Healthcare | General Fund Self Insurance Ending Balance Fund &),%:-36%0,)%08,-2796%2')'0%-17 *=XS*= MRQMPPMSRW &ILEZMSVEP,IEPXL-RWYVERGI'PEMQWMRGPYHIWEPPFILEZMSVEP GPEMQWI\TIRWIW8LI*=EHSTXIHFYHKIXSJ QMPPMSRVIQEMRWJPEXwhen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able of Contents BUDGET BUDGET BYBY FUND FUND | Healthcare | General Fund Self Insurance Ending Balance Fund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able of Contents BUDGET BY FUND | Fleet Management Fund BUDGET BY FUND | Fleet Management Fund Overview FUND PURPOSE This fund is used to account for the expenditures associated with purchasing and maintaining the city’s equipment and vehicles. Replacement and operation of equipment and vehicles are charged to the city divisions as internal operating costs based on the quantity and type of equipment and vehicles used. The division charges become revenue to the Fleet Management Fund. Fleet Management Fund Sources (% to Total) $31.0 Million Fleet Management Fund Uses (% to Total) $31.4 Million Rounding differences may occur. 283 Table of Contents BUDGET BY FUND | Fleet Management Fund Summary Actual 2021/ 22 Adopted 2022/ 23 Forecast 2022/ 23 Adopted 2023/ 24 Beginning Fund Balance 12,098,297 12, 098, 297 5,805,328 5, 805, 328 9,805,949 9, 805, 949 3,000,000 6,881,940 9, 881, 940 9,995,988 3,896,011 8,369,217 369,735 499,187 1,067,119 14,469,480 5,183,460 9,408,048 540,225 456,157 - 14,469,480 5,183,460 9,408,048 540,225 456,157 - 14,303,617 6,351,853 9,298,220 556,432 468,951 - 24,197,257 30,057,370 30,057,370 30,979,073 110,607 105,609 1,900,000 - 1,900,000 - - 216,216 1,900,000 1,900,000 - 24, 413, 473 31, 957, 370 31, 957, 370 30, 979, 073 646,930 8,563,694 650,677 3,755,981 63,286 9,612,547 - 708,612 9,531,520 821,086 5,137,812 65,748 14,423,311 90,000 (300,000) 19,094 725,373 9,038,936 753,693 5,138,024 57,919 14,173,311 129,769 15,862 - 764,604 9,618,499 782,080 5,173,184 79,091 6,372,730 142,273 111,959 (300,000) 6,256 23,293,115 30,497,183 30,032,887 22,750,676 23,293,115 30,497,183 30,032,887 22,750,676 3,336,642 76,064 1,820,894 27,598 1,820,894 27,598 8,533,883 102,237 3,412,706 1,848,492 1,848,492 8,636,120 Total Uses 26, 705, 821 32, 345, 675 31, 881, 379 31, 386, 796 Sources Over/(Under) Uses (2 , 2 9 2 , 3 4 8 ) (3 8 8 , 3 0 5 ) 75, 991 (4 0 7 , 7 2 3 ) Ending Fund Balance Operating Contingency Undesignated, Unreserved Fund Balance Total Ending Fund Balance 9,805,949 9, 805, 949 5,417,023 5, 417, 023 9,881,940 9, 881, 940 3,000,000 6,474,217 9, 474, 217 Operating Contingency (a) Undesignated, Unreserved Fund Balance Total Beginning Fund Balance Revenues Rental Rates Fuel Maintenance & Operations Reimbursements from Outside Sources Miscellaneous GAAP Adjustment (b) Subtotal Transfers In CIP (c) Operating Subtotal Total Sources Expenditures Fleet Management Administration Fleet Management Operations Fleet Management Parts Supply Fuel Motorpool Vehicle Acquisitions Class and Comp Study (d) Fuel and Maint and Repair (e) Leave Accrual Payments / Parental Leave Operating Impacts Savings from Vacant Positions Vacation Trade Subtotal TOTAL OPERATING BUDGET Transfers Out CIP (f) CIP Technology Subtotal (a) FY 2023/24 Operating Contingency was added to be used for increased Maintenance and Repair costs due to Vehicle Acquisition deferrals, fuel fluctuations, and supply chain challenges. (b) Adjustment to align with fund balance calculation used in the Annual Comprehensive Financial Report. (c) In FY 2022/23, the North Corporation Yard Garage capital project returned $1.9 million of funding to the Fleet Management Fund and utilized the Transportation Fund to fund the project. (d) Anticipated cost to implement the Classification and Compensation Study recommendations. (e) Budget adopted at the division level. At the start of the fiscal year the budget moves to a non-divisional account and then is transferred back to the divisions monthly as expenses occur. (f) FY 2023/24 includes manufacturing cutbacks and parts shortages which has caused a delay in deliveries; therefore, many scheduled vehicle purchases will now take place in future years as well as shift of budget for long lead time vehicles to the CIP. 284 Table of Contents BUDGET BY FUND | Fleet Management Fund Five-Year Financial Forecast Adopted 2023/ 24 Forecast 2024/ 25 Forecast 2025/ 26 Forecast 2026/ 27 Forecast 2027/ 28 Beginning Fund Balance Operating Contingency (a) Undesignated, Unreserved Fund Balance Total Beginning Fund Balance 3,000,000 6,881,940 9, 881, 940 3,000,000 6,474,217 9, 474, 217 3,000,000 6,053,217 9, 053, 217 3,000,000 5,609,417 8, 609, 417 3,000,000 5,113,917 8, 113, 917 Revenues Rental Rates Fuel Maintenance & Operations Reimbursements from Outside Sources Miscellaneous GAAP Adjustment 14,303,617 6,351,853 9,298,220 556,432 468,951 - 15,061,500 6,478,900 9,698,000 567,600 482,100 - 15,860,200 6,608,500 10,115,100 578,900 495,600 - 16,700,500 6,740,600 10,550,000 590,500 509,600 - 17,585,800 6,875,400 11,003,700 602,300 524,000 - 30,979,073 32,288,100 33,658,300 35,091,200 36,591,200 - - - - - - - - - - 30, 979, 073 32, 288, 100 33, 658, 300 35, 091, 200 36, 591, 200 764,604 9,618,499 782,080 5,173,184 79,091 6,372,730 142,273 111,959 (300,000) 6,256 794,700 10,034,500 822,600 5,277,300 82,000 14,022,900 145,500 114,400 27,000 (306,800) - 818,400 10,454,900 863,100 5,382,800 85,000 13,000,600 148,400 116,900 27,000 (312,900) - 843,700 10,879,800 902,600 5,490,400 88,300 13,862,800 151,300 119,100 27,000 (319,100) - 894,100 11,490,700 975,700 5,600,100 91,500 14,771,300 154,300 121,400 (325,500) - 22,750,676 31,014,100 30,584,200 32,045,900 33,773,600 22,750,676 31,014,100 30,584,200 32,045,900 33,773,600 8,533,883 102,237 1,659,800 35,200 3,500,000 17,900 3,500,000 40,800 3,500,000 48,200 8,636,120 1,695,000 3,517,900 3,540,800 3,548,200 Total Uses 31, 386, 796 32, 709, 100 34, 102, 100 35, 586, 700 37, 321, 800 Sources Over/(Under) Uses (4 0 7 , 7 2 3 ) (4 2 1 , 0 0 0 ) (4 4 3 , 8 0 0 ) (4 9 5 , 5 0 0 ) (7 3 0 , 6 0 0 ) Ending Fund Balance Operating Contingency Undesignated, Unreserved Fund Balance Total Ending Fund Balance 3,000,000 6,474,217 9, 474, 217 3,000,000 6,053,217 9, 053, 217 3,000,000 5,609,417 8, 609, 417 3,000,000 5,113,917 8, 113, 917 3,000,000 4,383,317 7, 383, 317 Subtotal Transfers In CIP Operating Subtotal Total Sources Expenditures Fleet Management Administration Fleet Management Operations Fleet Management Parts Supply Fuel Motorpool Vehicle Acquisitions Class and Comp Study (b) Fuel and Maint and Repair Leave Accrual Payments / Parental Leave Operating Impacts Savings from Vacant Positions Vacation Trade Subtotal TOTAL OPERATING BUDGET Transfers Out CIP (c) CIP Technology Subtotal (a) FY 2023/24 Operating Contingency was added to be used for increased Maintenance and Repair costs due to Vehicle Acquisition deferrals, fuel fluctuations, and supply chain challenges. (b) Anticipated cost to implement the Classification and Compensation Study recommendations. (c) FY 2023/24 includes manufacturing cutbacks and parts shortages which has caused a delay in deliveries; therefore, many scheduled vehicle purchases will now take place in future years as well as shift of budget for long lead time vehicles to the CIP. 285 Table of Contents BUDGET BY FUND | Fleet Management Fund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able of Contents BUDGET BY FUND | Fleet Management Fund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able of Contents BUDGET BY FUND | Fleet Management Fund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able of Contents BUDGET BY FUND | Fleet Management Fund *0))81%2%+)1)28%(1-2-786%8-32 *=XS*= MRQMPPMSRW *PIIX1EREKIQIRX%HQMRMWXVEXMSRMRGPYHIWEPPGSWXWVIPEXIHXS WYTTSVXMRKXLIQEREKIQIRXERHEHQMRMWXVEXMZITIVWSRRIPXLEX EVIHIHMGEXIHXSHMVIGXMRKERHSZIVWIIMRKXLIJPIIXSTIVEXMSRSJ XLIGMX]8LI*=EHSTXIHFYHKIXMWQMPPMSR[LMGL MWERMRGVIEWISJQMPPMSR[LIRGSQTEVIHXSXLI*= EHSTXIHFYHKIX *0))81%2%+)1)2834)6%8-327 *=XS*= MRQMPPMSRW *PIIX1EREKIQIRX3TIVEXMSRWMRGPYHIWGSWXWVIPEXIHXS WYTTSVXMRKXIGLRMGEPTIVWSRRIPXLEXTIVJSVQXLIQEMRXIRERGI ERHVITEMVJYRGXMSRWSJXLIGMX]’WJPIIXSTIVEXMSRXLIJYRHMRK JSVVITPEGIQIRXTEVXWERHXLIYWISJSYXWMHIZIRHSVW[LIR RIGIWWEV]8LI*=EHSTXIHFYHKIXSJQMPPMSRMWE QMPPMSRMRGVIEWISZIVXLI*=EHSTXIHFYHKIX 8LIMRGVIEWIMWHYIXSLMKLIVERXMGMTEXIHJPIIXQEMRXIRERGI GSWXWHYIXSWYTTP]GLEMRGLEPPIRKIWERHMRJPEXMSR *0))81%2%+)1)284%68779440= *=XS*= MRQMPPMSRW *PIIX1EREKIQIRX4EVXW7YTTP]MRGPYHIWEPPGSWXWVIPEXIHXS WYTTSVXMRKXLIWTIGMEPM^IHTIVWSRRIPXLEXEVIHIHMGEXIHXS QEMRXEMRMRKXLITEVXWWIKQIRXSJXLIGMX]’WJPIIXSTIVEXMSREW [IPPEWXLIGSWXWSJEPPVIUYMVIHWYTTPMIWERHXSSPW8LI*= EHSTXIHFYHKIXMWQMPPMSR[LMGLMWJPEX[LIR GSQTEVIHXSXLI*=EHSTXIHFYHKIX *36)'%78 &9(+)8 %'89%0*36)'%78 289 Table of Contents BUDGET BY FUND | Fleet Management Fund *9)0 *=XS*= MRQMPPMSRW *YIPMRGPYHIWEPPGSWXWVIPEXIHXSXLITYVGLEWISJJYIPEW[IPP EWGSWXWJSVIUYMTQIRXQEMRXIRERGIERHWIVZMGIWRIGIWWEV] XSQEMRXEMRXLITVSZMWMSRSJJYIPMRXLIGMX]’WJPIIXSTIVEXMSR 8LI*=EHSTXIHFYHKIXMWQMPPMSR[LMGLMW relatively JPEX[LIRGSQTEVIHXSXLI*=EHSTXIH FYHKIX 138364330 *=XS*= 1SXSVTSSPMRGPYHIWEPPGSWXWVIPEXIHXSXLIGEVISJXLIGMX]’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able of Contents BUDGET BY FUND | Fleet Management Fund 232(-:-7-32%097)7 2SR(MZMWMSREP9WIWEVIMXIQWXLEX[IVIFYHKIXIHMRGMX][MHIQEGVSPIZIPLSPHMRKEGGSYRXW%WI\TIRHMXYVIWSGGYVMRXLIETTPMGEFPI HMZMWMSRWFYHKIXXVERWJIVWEVIGSQTPIXIHXSQSZIXLIRIIHIHFYHKIXJVSQXLIQEGVSPIZIPLSPHMRKEGGSYRXWXSXLIVIWTIGXMZI HMZMWMSRW8LIVIJSVIXLI*=]IEVIRHJSVIGEWXERHTVMSV]IEVW’ FYHKIXERHEGXYEPWXLEXEVIHMWTPE]IHMRXLIKVETLWEVIJSV GSQTEVMWSRTYVTSWIWSRP]EWXLII\TIRHMXYVIWEVIEGXYEPP]VIGSVHIHERHVITSVXIHEWTEVXSJXLIETTPMGEFPIHMZMWMSR’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adopted FYHKIX isQMPPMSR, budgetedEXXLIHMZMWMSRPIZIP 0)%:)%''69%04%=1)2874%6)28%00)%:) *=XS*= 0IEZI%GGVYEP4E]QIRXWMRGPYHIEGGYQYPEXIHQIHMGEPERHSV ZEGEXMSRPIEZITEMHSYXEXXLIXMQISJVIXMVIQIRXSVWITEVEXMSR JVSQXLIGMX]Parental Leave allows for a four-week paid leave for new parents. 8LIXSXEP*=0IEZI%GGVYEP 4E]QIRXWFYHKIXMW[LMGLMRGPYHIW FYHKIXIHJSVQIHMGEPPIEZIEGGVYEPTE]SYXW FYHKIXIHJSVZEGEXMSREGGVYEPTE]SYXWERHFYHKIX JSVTEVIRXEPPIEZI *36)'%78 &9(+)8 %'89%0*36)'%78 291 Table of Contents BUDGET BY FUND | Fleet Management Fund 34)6%8-2+-14%'87 *=XS*= 3TIVEXMRK-QTEGXWMWEHHMXMSREPJYXYVISTIVEXMRKGSWXW EWWSGMEXIH[MXL'ETMXEP-QTVSZIQIRX4PER '-4 TVSNIGXWWYGL EWRI[TSWMXMSRWJEGMPMXMIWQEMRXIRERGIYXMPMXMIWERHERRYEP WSJX[EVIQEMRXIRERGI-R*=ERH]IEVWTVMSV STIVEXMRKMQTEGXWLEZIFIIRMRGPYHIHEXXLIHMZMWMSRPIZIP*= XLVoYgh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able of Contents BUDGET BY FUND | Fleet Management Fund 86%27*)67398 8VERWJIVW3YXEVIXLIEYXLSVM^IHQSZIQIRXSJGEWLXSSXLIVJYRHWERHSVGETMXEPTVSNIGXW*PIIX1EREKIQIRX8VERWJIVW3YXJSV*= IUYEPQMPPMSR[LMGLMWERMRGVIEWISJQMPPMSRJVSQXLI*=EHSTXIHFYHKIX '-4 *=XS*= MRQMPPMSRW 8LI*='-4EHSTXIHFYHKIXSJQMPPMSR[MPPFI TVMQEVMP]YWIHXSJYRHGETMXEPTVSNIGXWXLEXMRGPYHIXLI 'SRXMRYSYW*PIIX6ITPEGIQIRXERHXLI*PIIX)PIGXVMG:ILMGPI ): -RJVEWXVYGXYVI-QTPIQIRXEXMSR '-48)',2303+= *=XS*= 8LI'-48IGLRSPSK]FYHKIXSJMWTPERRIHXSLIPT GSZIV*PIIX1EREKIQIRX WTSVXMSRSJGMX][MHIXIGLRSPSK] GETMXEPTVSNIGXWHYVMRK*= *0))81%2%+)1)28*92()2(-2+&%0%2') *YRHFEPERGITVSXIGXWXLIGMX]’WJMRERGMEPGSRHMXMSRERHTVSZMHIWJSVYRI\TIGXIHIGSRSQMGGLEPPIRKIW+VS[XLSJJYRHFEPERGI SGGYVW[LIRWSYVGIWI\GIIHYWIW8LIGMX]’WFYHKIXTPERRMRKERHEHSTXIHJMRERGMEPTSPMGMIWGEPPJSVXLIIWXEFPMWLQIRXSJVIWIVZIW EWTEVXSJXLIVIWSYVGIEPPSGEXMSRPMQMXWIXXMRKTVSGIWW8LMWTVSGIWWEPPS[WXLIGMX]XSWIXEWMHIWEZMRKWFIJSVIEPPSGEXIHSVWTIRX EWFYHKIXIHI\TIRHMXYVIW-R*=3TIVEXMRK'SRXMRKIRG][EWVIMRWXEXIHXSFIYWIHJSVMRGVIEWIH1EMRXIRERGIERH6ITEMV GSWXWHYIXS:ILMGPI%GUYMWMXMSRHIJIVVEPWJYIPJPYGXYEXMSRWERHWYTTP]GLEMRWLMJXW *36)'%78 &9(+)8 %'89%0*36)'%78 293 Table of Contents BUDGET BY FUND | Fleet Management Fund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able of Contents BUDGET BY FUND | Risk Management Fund FUND PURPOSE The Risk Management Fund is used to account for the city’s self insurance, safety and risk management functions. Revenue to this fund is derived from internal charges to city divisions and is captured as internal rates. Payments for unemployment, workers’ compensation, and property and liability claims are made from this fund. Risk Management Fund Sources (% to Total) $19.6 Million Risk Management Fund Uses (% to Total) $17.7 Million Rounding differences may occur. 295 Table of Contents BUDGET BY FUND | Risk Management Fund Summary Ac t u a l 2021/22 A d op t e d 2022/23 Fo r e c a s t 2022/23 A d op t e d 2023/24 Beginning Fund Balance Operating Contingency 2,500,000 Operating Reserve 2,500,000 2,500,000 2,500,000 23,393,365 21,982,682 21,885,409 24,087,435 25, 893, 365 24, 482, 682 24, 385, 409 26, 587, 435 11,668,410 15,437,357 15,437,357 16,508,600 Property Tax 290,000 536,000 536,000 2,201,944 Reimbursements from Outside Sources 410,632 575,000 675,000 525,000 Miscellaneous 282,277 290,000 667,000 290,000 Total Beginning Fund Balance Revenues Self Insurance (Property and Workers Comp) Unemployment Claims 99,976 49,597 49,597 52,077 Subtotal 12, 751, 295 16, 887, 954 17, 364, 954 19, 577, 621 24,012 - - - Subtotal 24, 012 - - - 12, 775, 307 16, 887, 954 17, 364, 954 19, 577, 621 Insurance & Bond Premiums 3,309,406 3,921,281 4,247,195 5,195,439 Liability 3,675,168 2,954,252 2,954,252 3,459,874 Physical Damage 750,670 1,010,024 1,010,024 1,390,023 Risk Management 1,517,741 1,850,365 1,847,766 2,021,447 92,787 98,000 98,000 114,500 Transfers In Operating(a) Total Sources E xp en di t u r es Safety Grants Program Unemployment 12,079 50,000 50,000 50,000 Workers Compensation 4,903,999 4,948,442 4,948,442 5,378,449 Class and Comp Study (b) - - - 36,268 Leave Accrual Payments / Parental Leave - - - 2,482 Vacation Trade - 4,801 - 3,963 14, 261, 850 14, 837, 165 15, 155, 679 17, 652, 445 14,261,850 14,837,165 15,155,679 17,652,445 21,413 7,249 7,249 29,549 21, 413 7, 249 7, 249 29, 549 Total Uses 35, 156, 575 38, 316, 829 35, 917, 157 39, 223, 941 Sources Over/(Under) Uses ( 1, 507, 956) 2, 043, 540 2, 202, 026 1, 895, 627 Subtotal TOTAL OPERATING BUDGET Transfers Out CIP Technology Subtotal Ending Fund Balance Operating Contingency 1,300,000 2,500,000 2,500,000 2,500,000 Operating Reserve 23,085,409 24,026,222 24,087,435 25,983,062 24, 385, 409 26, 526, 222 26, 587, 435 28, 483, 062 Total Ending Fund Balance (a) One-time bonuses approved by Council to active full and part-time employees paid in FY 2021/22.The funding used was Scottsdale AZCares funding that was in the Special Programs Fund. (b) Anticipated cost to implement the Classification and Compensation Study recommendations. 296 Table of Contents BUDGET BY FUND | Risk Management Fund Five-Year Financial Forecast Adopted 2023/24 Fo r e c a s t 2024/25 Fo r e c a s t 2025/26 Fo r e c a s t 2026/27 Fo r e c a s t 2027/28 Beginning Fund Balance Operating Contingency 2,500,000 Operating Reserve 2,500,000 2,500,000 2,500,000 2,500,000 24,087,435 25,983,062 27,591,462 29,258,062 30,985,262 26, 587, 435 28, 483, 062 30, 091, 462 31, 758, 062 33, 485, 262 Self Insurance (Property and Workers Comp) 29,229,111 30,730,400 32,309,000 34,144,900 36,086,000 Property Tax 7,599,568 7,979,500 8,378,400 8,797,400 9,237,300 Reimbursements from Outside Sources 962,436 1,010,600 1,061,100 1,114,100 1,169,800 Miscellaneous 793,935 809,800 826,000 842,500 859,400 Total Beginning Fund Balance Revenues Unemployment Claims 251,100 253,100 255,100 257,400 259,300 Subtotal 39, 075, 529 41, 034, 800 43, 093, 700 45, 433, 700 47, 903, 200 - - - - - Subtotal - - - - - 19, 577, 621 20, 984, 300 22, 659, 400 24, 598, 300 27, 178, 300 Insurance & Bond Premiums 5,195,439 6,593,000 7,924,700 9,514,000 11,677,600 Liability 3,459,874 3,538,400 3,609,500 3,681,000 3,754,800 Physical Damage 1,390,023 1,421,400 1,449,900 1,478,400 1,507,900 Risk Management 2,021,447 2,107,000 2,184,400 2,254,300 2,380,900 Safety Grants Program 114,500 117,100 119,300 121,700 124,200 Transfers In Operating Total Sources E xp en di t u r es Unemployment 50,000 52,500 55,100 57,900 60,800 Workers Compensation 5,378,449 5,495,300 5,602,200 5,709,700 5,826,700 Class and Comp Study (b) 36,268 37,100 37,800 38,600 39,300 Leave Accrual Payments / Parental Leave 2,482 2,500 2,600 2,600 2,700 Vacation Trade 3,963 - - - - 17, 652, 445 19, 364, 300 20, 985, 500 22, 858, 200 25, 374, 900 17,652,445 19,364,300 20,985,500 22,858,200 25,374,900 29,549 11,600 7,300 12,900 15,600 29, 549 11, 600 7, 300 12, 900 15, 600 Total Uses 39, 223, 941 41, 218, 600 43, 271, 000 45, 452, 000 47, 705, 200 Sources Over/(Under) Uses 1, 895, 627 1, 608, 400 1, 666, 600 1, 727, 200 1, 787, 800 Subtotal TOTAL OPERATING BUDGET Transfers Out CIP Technology Subtotal Ending Fund Balance Operating Contingency 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 Operating Reserve 25,983,062 27,591,462 29,258,062 30,985,262 32,773,062 28, 483, 062 30, 091, 462 31, 758, 062 33, 485, 262 35, 273, 062 Total Ending Fund Balance 297 Table of Contents BUDGET BY FUND | Risk Management Fund RISK MANAGEMENT FUND SOURCES Sources received in the Risk Management Fund consist of Self Insurance (Property and Workers Comp), Property Tax, Reimbursements from Outside Sources, Miscellaneous, and Unemployment Claims. More specific information on these sources is detailed below: SELF INSURANCE (PROPERTY AND WORKERS COMP) FY 2019/20 to FY 2025/26 (in millions) Self Insurance (Property and Workers Comp) represent this fund’s primary operating resources, which are derived from internal charges for services to other city divisions. The fund covers excess insurance premiums, administrative charges and claim payments for general and auto liability/physical damages, workers’ compensation and property damage. The FY 2023/24 adopted budget for Self Insurance (Property and Workers Comp) is $16.5 million, which represents an increase of $1.1 million from the FY 2022/23 adopted budget due to an annual evaluation to determine the Internal Service Rates charged to every department. The continued increases in FY 2024/25 - FY 2025/26 assumes the need to charge divisions more due to increased costs while maintaining the Loss Trust Fund Board's preferred 75 percent confidence level of the most recent actuarial assessment in the fund balance. PROPERTY TAX FY 2019/20 to FY 2025/26 (in millions) Property Tax represents a reimbursement to the city’s Risk Management Fund for the liability tort settlements and judgments approved by City Council and paid during the most recently completed calendar year. The inclusion of the tort claim reimbursements in the city’s primary tax levy is allowed per a March 20, 1986 Arizona Attorney General opinion. The tort expenses are paid from the Risk Management Fund, therefore the reimbursement becomes revenue to this fund. The budgeted tort claims for FY 2023/24 is $2.2 million, which represents an increase of $1.7 million due to the settlement of several large, unforeseen occurrences. *36)'%78 298 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Risk Management Fund REIMBURSEMENTS FROM OUTSIDE SOURCES FY 2019/20 to FY 2025/26 (in millions) Reimbursements from Outside Sources represents reimbursements received from insurance claims. The primary component of this source is subrogation where the city seeks reimbursement from third party insurance companies for various types of claims. Reimbursements from Outside Sources for FY 2023/24 are $0.5 million, which represents a decrease of $0.1 million compared the FY 2022/23 adopted budget. The $2.2 million shown in FY 2020/21 includes a large reimbursement related to a claim for a fire that damaged and totaled several solid waste trucks. MISCELLANEOUS FY 2019/20 to FY 2025/26 (in millions) Miscellaneous revenue represents special event reimbursements related to services provided by off-duty police officers. When an off-duty police officer is contracted for services certain insurance requirements must be met. If the event producer does not meet the specified insurance thresholds, additional costs are billed to cover potential city liability. When the Public Safety - Police Division receives these reimbursements, they are then deposited into the city's Risk Management Fund. Also included is subrogation recoveries which are claim amounts paid by third parties that are recovered by the city for damage occurring on or to city property. Miscellaneous revenue for FY 2023/24 is budgeted at $0.3 million which remains flat compared to the FY 2022/23 adopted budget. UNEMPLOYMENT CLAIMS FY 2019/20 to FY 2025/26 Unemployment Claims includes charges to all positions for unemployment insurance. The FY 2023/24 adopted budget of $52,077 reflects a minor increase from the FY 2022/23 adopted budget of $49,597. 299 Table of Contents BUDGET BY FUND | Risk Management Fund RISK MANAGEMENT FUND USES The direct operating expenditures of the Risk Management Fund are divided into the following major expenditure categories: Insurance & Bond Premiums, Liability, Physical Damage, Risk Management, Safety Grants Program, Unemployment, Workers Compensation, Class and Comps Study, Leave Accrual Payments, and Vacation Trade. Also included are cash Transfers Out to the CIP. INSURANCE & BOND PREMIUMS FY 2019/20 to FY 2025/26 (in millions) Insurance & Bond Premiums includes various citywide insurance policies for umbrella type coverage offering protection against large or ongoing claims. The adopted budget for FY 2023/24 is $5.2 million, which is $1.3 million higher than the FY 2022/23 adopted budget of $3.9 million due to market hardening and the market running at a 30 percent premium. LIABILITY FY 2019/20 to FY 2025/26 (in millions) Liability primarily includes claim payments and legal costs for all activity not related to physical damage or workers compensation claims. The adopted budget for FY 2023/24 is $3.5 million, which is $0.5 million higher than the FY 2022/23 adopted budget due to the increase in General Liability Claims, mainly related to water main breaks. *36)'%78 300 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Risk Management Fund PHYSICAL DAMAGE FY 2019/20 to FY 2025/26 (in millions) Physical Damage is a claim used to pay for physical damage to city property or city vehicles. The adopted budget for FY 2023/24 is $1.4 million, which represents an increase of $0.4 million compared to the FY 2022/23 adopted budget. The budget was adjusted in FY 2020/21 to align with previous actual expenditures which continue to increase due to weather related and catastrophic events. There was a large claim in FY 2020/21 for a fire that damaged and totaled several solid waste trucks. FY 2019/20 had higher than anticipated damage to vehicles. RISK MANAGEMENT FY 2019/20 to FY 2025/26 (in millions) The Risk Management operating budget is for day to day operations of the department. The adopted budget for FY 2023/24 is $2.0 million, which represents an increase of $0.1 million compared to the FY 2022/23 adopted budget, mostly driven by merit, market, healthcare, and retirement rate increases. 7%*)8=+6%287463+6%1 FY 2019/20 to FY 2025/26 8LI7EJIX]+VERXW4VSKVEQMWJSVGMX]HMZMWMSRWXSVIUYIWX JYRHWXSTE]JSVSJJMGIJYVRMXYVIIUYMTQIRXSJJMGISTIVEXMRK WYTTPMIWERHTVSXIGXMZIGPSXLMRKXLEX[SYPHIRLERGIWEJIX]SV VIHYGIEORS[RPSWWMRXLI[SVOTPEGI-RSVHIVXSVIGIMZIXLIWI JYRHWGIVXEMRGVMXIVMEQYWXFIQIXERHRSSXLIVJYRHMRKWSYVGI FIEZEMPEFPI8LIFYHKIXIHI\TIRHMXYVIJSV*=MW QMPPMSR[LMGLMWLMKLIVXLERXLI*=EHSTXIH FYHKIXVIWYPXMRKJVSQIJJSVXWXSI\TERHXLI'MX] W7EJIX] -RGIRXMZI4VSKVEQ *36)'%78 &9(+)8 %'89%0*36)'%78 301 Table of Contents BUDGET BY FUND | Risk Management Fund UNEMPLOYMENT FY 2019/20 to FY 2025/26 Unemployment represents claims which can be paid to terminated city employees who qualify. The adopted budget for FY 2023/24 is $50,000, which remains flat compared to the FY 2022/23 adopted budget. The FY 2020/21 actuals represent a higher level of expenses due to an increased number of unemployment claims resulting from the COVID-19 pandemic. WORKERS COMPENSATION FY 2019/20 to FY 2025/26 (in millions) Workers Compensation represents claims paid to current city employees in the event of an injury, illness, or disease occurring in the course of city employment. The adopted budget for FY 2023/24 is $5.4 million which is $0.5 million greater than the FY 2022/23 adopted budget. The increase in budget is also due to higher forecasted worker compensation expenses related to rising medical costs and partial disability to coincide with the actuarial forecast. NON-DIVISIONAL USES Non-Divisional Uses are items that were budgeted in citywide macro level holding accounts. As expenditures occur in the applicable divisions, budget transfers are completed to move the needed budget from the macro level holding accounts to the respective divisions. Therefore, the FY 2022/23 year-end forecast and prior years’ budget and actuals that are displayed in the graphs are for comparison purposes only as the expenditures are actually recorded and reported as part of the applicable division’s uses. Beginning in FY 2020/21 due to an administrative change, most non-divisional uses are initially placed into the divisions instead of at a macro level then moving the budget to a macro level holding account at the beginning of the fiscal year and completing budget transfers to move the needed budget back to the applicable divisions as expenditures occur. The administrative change is in an effort to have more meaningful year-over-year comparisons. *36)'%78 302 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Risk Management Fund VACATION TRADE FY 2019/20 to FY 2025/26 Through the Vacation Trade Program employees who have been employed by the city for five years or more, and have used at least 80 hours of vacation between October 24, 2021 and October 22, 2022, may elect to trade up to 40 hours of vacation time for cash. The program was canceled in FY 2020/21 and in FY 2021/22, but has been restated for FY 2022/23. The FY 2023/24 Vacation Trade adopted budget is $3,963. CLASS AND COMPS STUDY FY 2019/20 to FY 2025/26 The Class and Comp Study reflects the anticipated cost to implement the recommendations from the Public Service Personnel Consultants Classification and Compensation study that will take place in late 2023. The FY 2023/24 Class and Comp Study is estimated at $36,268. LEAVE ACCRUAL PAYMENTS / PARENTAL LEAVE FY 2019/20 to FY 2025/26 These payments include accumulated medical and/or vacation leave paid out at the time of retirement or separation from the city, or a four-week paid parental leave. FY 2023/24 leave accrual payments of $2,482 corresponds to a parental leave budget. The FY 2022/23 year-end forecast and FY 2019/20 FY 2021/22 actuals displayed are recorded and reported as part of the division's expenditures. *36)'%78 &9(+)8 %'89%0*36)'%78 303 Table of Contents BUDGET BY FUND | Risk Management Fund TRANSFERS OUT Transfers Out is the authorized movement of cash or other resources to other funds and/or capital projects. CIP TECHNOLOGY FY 2019/20 to FY 2025/26 The CIP Technology budget of $29,549 in FY 2023/24 is planned to help cover the Risk Management's portion of citywide technology replacement capital projects. FY 2019/20 included budget for a new modern risk management platform to effectively manage liability and workers compensation claims. The expense was lower than originally anticipated. RISK MANAGEMENT FUND ENDING BALANCE Fund balance protects the city's financial condition and provides for unexpected economic challenges. The Loss Trust Fund Board, per Financial Policy No. 2.07, set a target to maintain a Risk Management reserve fund balance equivalent to the actuary's 75 percent confidence level of the most recent actuarial assessment. Each year the projected balance is actuarially determined based on current actual losses and potential outstanding claims. The specific make-up of the city's Risk Management Fund ending balance is noted in the following: OPERATING CONTINGENCY FY 2019/20 to FY 2025/26 (in millions) Operating Contingency includes $2.5 million of budget authorization in the event that unforeseen expenses occur during the fiscal year. Contingency funds are utilized only after all budget options have been examined and requires City Council approval. *36)'%78 304 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Risk Management Fund OPERATING RESERVE FY 2019/20 to FY 2025/26 (in millions) The projected FY 2023/24 Operating Reserve is approximately $26.0 million, which is an increase of $2.0 million from the FY 2022/23 adopted budget. *36)'%78 &9(+)8 %'89%0*36)'%78 305 Table of Contents FY 2023/24 Adopted Budget 306 Table of Contents BUDGET BY FUND | PC Replacement Fund FUND PURPOSE The PC Replacement fund is used to account for the expenditures associated with purchasing the city’s computers, monitors and printers. The replacement of computers, monitors and printers (hardware) is charged to the city divisions as an internal operating cost based on the quantity and type of hardware used. The divisions' charges become revenue to the PC Replacement Fund. PC Replacement Fund Sources (% to Total) $0.9 Million PC Replacement Fund Uses (% to Total) $0.8 Million Rounding differences may occur. 307 Table of Contents BUDGET BY FUND | PC Replacement Fund Summary Actual 2021/ 22 Adopted 2022/ 23 Forecast 2022/ 23 Adopted 2023/ 24 B e g i n n i n g Fu n d B a l a n c e Operating Contingency 500,000 Undesignated, Unreserved Fund Balance 100,000 100,000 100,000 1,329,103 1,292,656 1,441,514 1,461,172 1, 829, 103 1, 392, 656 1, 541, 514 1, 561, 172 750,000 750,000 750,000 850,000 750, 000 750, 000 750, 000 850, 000 750, 000 750, 000 750, 000 850, 000 1,037,589 730,342 730,342 768,170 1, 037, 589 730, 342 730, 342 768, 170 1,037,589 730,342 730,342 768,170 Total Uses 1, 037, 589 730, 342 730, 342 768, 170 Sources Over/(Under) Uses ( 287, 589) 19, 658 19, 658 81, 830 100,000 100,000 100,000 100,000 Total Beginning Fund Balance R ev en u es PC Replacement Fees Subtotal Total Sources E x p e n di t u r e s Computer Hardware Acquisition Subtotal TOTAL OPERATING BUDGET E n d i n g Fu n d B a l a n c e Operating Contingency(a) Undesignated, Unreserved Fund Balance Total Ending Fund Balance (a) 1,441,514 1,312,314 1,461,172 1,543,002 1, 541, 514 1, 412, 314 1, 561, 172 1, 643, 002 During FY 2021/22, the Operating Contingency reduced from $500,000 to $100,00 to better align with historical usage. 308 Table of Contents BUDGET BY FUND | PC Replacement Fund Five-Year Financial Forecast Adopted 2023/ 24 Forecast 2024/ 25 Forecast 2025/ 26 Forecast 2026/ 27 Forecast 2027/ 28 B e g i n n i n g Fu n d B a l a n c e Operating Contingency 100,000 Undesignated, Unreserved Fund Balance 100,000 100,000 100,000 100,000 1,461,172 1,543,002 856,702 363,402 108,502 1, 561, 172 1, 643, 002 956, 702 463, 402 208, 502 850,000 950,800 950,800 1,149,800 1,299,600 850, 000 950, 800 950, 800 1, 149, 800 1, 299, 600 850, 000 950, 800 950, 800 1, 149, 800 1, 299, 600 1,637,100 1,444,100 1,404,700 1,358,400 42,676,300 1, 637, 100 1, 444, 100 1, 404, 700 1, 358, 400 47, 705, 200 768,170 1,637,100 1,444,100 1,404,700 1,358,400 Total Uses 768, 170 1, 637, 100 1, 444, 100 1, 404, 700 1, 358, 400 Sources Over/(Under) Uses ( 686, 300) ( 493, 300) ( 254, 900) ( 58, 800) 440, 900 100,000 100,000 100,000 100,000 100,000 Total Beginning Fund Balance R ev en u es PC Replacement Fees(a) Subtotal Total Sources E x p e n di t u r e s Computer Hardware Acquisition Subtotal TOTAL OPERATING BUDGET E n d i n g Fu n d B a l a n c e Operating Contingency Undesignated, Unreserved Fund Balance Total Ending Fund Balance (a) 1,543,002 856,702 363,402 108,502 49,702 1, 643, 002 956, 702 463, 402 208, 502 149, 702 Beginning in FY 2024/25, the PC Replacement Fees internal service charge intentionally lowered to utilize available Undesignated, Unreserved Fund Balance. 309 Table of Contents BUDGET BY FUND | PC Replacement Fund PC REPLACEMENT FUND SOURCES The PC Replacement Fund includes revenue from rates charged to the city divisions as internal operating costs to each program based on the quantity and type of hardware used. The only source of revenue to this fund is the PC Replacement Fees, detailed below. PC REPLACEMENT FEES FY 2019/20 to FY 2025/26 (in millions) PC Replacement Fees represents the rates charged to other city funds and divisions for the acquisition and replacement of city computer hardware. The amount collected ensures sufficient funding is available for hardware acquisition and replacement while also considering future needs. The goal is to minimize large fluctuations to the rates that are charged to the divisions each year. The revenue for FY 2023/24 is $0.9 million, which is $0.1 million higher than the FY 2022/23 adopted budget. Beginning in FY 2020/21 the PC Replacement Fees internal service charge was reduced in order to utilize available Undesignated, Unreserved Fund Balance. PC REPLACEMENT FUND USES The direct operating expenditures of the PC Replacement Fund are budgeted in the capital outlay category. COMPUTER HARDWARE ACQUISITION FY 2019/20 to FY 2025/26 (in millions) Computer Hardware Acquisition includes the purchase of desktop computers, laptops, ruggedized laptops, monitors, and printers. The computer hardware inventory for the entire city is aggregated as one asset and is thus classified as a capital asset on the city’s balance sheet. The FY 2023/24 Computer Hardware Acquisition adopted budget is $0.8 million, which is $0.1 million higher than the FY 2022/23 adopted budget. The expenditures vary from year to year depending on the replacement schedule. FORECAST 310 BUDGET ACTUAL/FORECAST* Table of Contents BUDGET BY FUND | PC Replacement Fund PC REPLACEMENT FUND ENDING BALANCE The PC Replacement Fund ending balance varies primarily due to the hardware replacement schedule. The fund balance at the end of each year includes the accumulated balance to be used for future year hardware purchases. The PC Replacement Fund ending balance includes: Operating Contingency and Undesignated, Unreserved Fund Balance. OPERATING CONTINGENCY FY 2019/20 to FY 2025/26 (in millions) Operating Contingency is set at $0.1 million of budget authorization to offset unforeseen expenses that occur during the fiscal year. Beginning in FY 2021/22, the Operating Contingency was reduced from $0.5 million to $0.1 million to better align with historical usage. Contingency funds are utilized only after all budget options have been considered and requires City Council approval. UNDESIGNATED, UNRESERVED FUND BALANCE FY 2019/20 to FY 2025/26 (in millions) Undesignated, Unreserved Fund Balance accounts for any funds remaining after the designation of all other reserves/contingencies. The FY 2023/24 ending undesignated, unreserved fund balance is $1.5 million. This balance represents an accumulation of sources to be used for future year hardware purchases. A reduction of undesignated, unreserved fund balance beginning in FY 2024/25 reflects the efforts to utilize fund balance by aligning the PC Replacement Fees and Computer Hardware Acquisitions with anticipated replacement schedules throughout the city. FORECAST BUDGET ACTUAL/FORECAST* 311 Table of Contents FY 2023/24 Adopted Budget 312 Table of Contents BUDGET BY FUND | Grant Funds FUND PURPOSE The Grant Funds receive and expend the city’s federal, state, and local grants. The amount of grants received is generally based upon application to granting agencies by the city and through entitlement grants and are contingent upon availability of funding by the grantors. Grant revenues may be used only for the stated purpose in the approved grant agreement and are subject to grantor expenditure guidelines and audits. The city will only expend grant funds that have been appropriately awarded by the granting agency and accepted in accordance with the city’s grant policy. Grant Funds Sources (% to Total) $23.8 Million Grant Funds Uses (% to Total) $23.8 Million Rounding differences may occur. 313 Table of Contents BUDGET BY FUND | Grant Funds Summary Adopted 2 0 2 3 /2 4 Revenues Housing Choice Voucher (Formerly the Section 8 Housing Program) Grants HOME Investment Partnership Community Development Block Grant (CDBG) & CDBG Rehab Revolving Loan Subtotal Other Activity Grant Anticipated Grant Contingency 6,977,318 4,127,777 2,147,828 2,465,567 15, 718, 490 4,076,408 4,000,000 Subtotal 8, 076, 408 Total Sources 23, 794, 898 Expenditures Housing Choice Voucher (Formerly the Section 8 Housing Program) Grants HOME Investment Partnership Community Development Block Grant (CDBG) & CDBG Rehab Revolving Loan 6,977,318 4,127,777 2,147,828 2,434,117 Subtotal TOTAL OPERATING BUDGET 15,687,040 Other Activity Grant Anticipated Grant Contingency 4,076,408 4,000,000 Subtotal Transfers Out CIP Technology Sources Over/(Under) Uses 314 8, 076, 408 31,450 Subtotal Total Uses 15, 687, 040 31, 450 23, 794, 898 - Table of Contents BUDGET BY FUND | Grant Funds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’WMRGSQI*EQMPMIWQYWX FIMRGSQIIPMKMFPIFEWIHSRXLI4VSKVEQ-RGSQI+YMHIPMRIW 8LITVSKVEQTVSZMHIWEJJSVHEFPIERHWEJILSYWMRK STTSVXYRMXMIWJSVPS[IVMRGSQIJEQMPMIWWIRMSVGMXM^IRWERH TIVWSRW[MXLHMWEFMPMXMIW7XEJJIWXMQEXIWXLI,':EPPSGEXMSRW MRGPYHMRKTVMSV]IEV’WGEVV]SZIVJSV*=EXQMPPMSR 8LIEGXYEPEQSYRXW[MPPZEV]HITIRHMRKSR[LIRXLIJYRHWEVI VIGIMZIHHYVMRKXLIJMWGEP]IEV +6%287 *=XS*= MRQMPPMSRW 1MWGIPPERISYWJIHIVEPWXEXIERHPSGEPKVERXWMRGPYHIKVERXWJSV PE[IRJSVGIQIRXJMVIWIVZMGIWGSQQYRMX]WIVZMGIW XVERWTSVXEXMSRERHTVIWIVZEXMSRTVSNIGXW%HHMXMSREPKVERX JYRHMRK[EWVIGIMZIHJVSQXLI%>'EVIW*YRHXSEWWMWX[MXL GSWXWSJTYFPMGLIEPXLERHTYFPMGWEJIX]TIVWSRRIPI\TIRWIWMR *=ERHMR*=8LI*=EHSTXIH FYHKIXJSV+VERXWMWQMPPMSR *36)'%78 &9(+)8 %'89%0*36)'%78 315 Table of Contents BUDGET BY FUND | Grant Funds ,31)-2:)781)284%682)67,-4 *=XS*= MRQMPPMSRW ,31)*YRHWEVIVIGIMZIHXLVSYKLXLI1EVMGSTE'SYRX],SQI 'SRWSVXMYQ7XEJJIWXMQEXIWXLI,31)EPPSGEXMSRMRGPYHMRK TVMSV]IEV’WGEVV]SZIVJSV*=EXQMPPMSR,31) *YRHWEGXYEPEQSYRXW[MPPZEV]HITIRHMRKSR[LIRXLIJYRHW EVIVIGIMZIHHYVMRKXLIJMWGEP]IEV '31192-8=():)0341)28&03'/+6%28 '(&+  '(&+6),%&6):30:-2+03%2 *=XS*= MRQMPPMSRW 8LI'MX]SJ7GSXXWHEPIVIGIMZIW'SQQYRMX](IZIPSTQIRX&PSGO +VERX '(&+ JYRHWJVSQXLI97(ITEVXQIRXSJ,SYWMRKERH 9VFER(IZIPSTQIRX ,9( '(&+JYRHWEVITVSZMHIHSRE JSVQYPEFEWMWXSIRXMXPIQIRXGSQQYRMXMIWXSHIZIPSTZMEFPI YVFERGSQQYRMXMIWF]TVSZMHMRKHIGIRXLSYWMRKWYMXEFPIPMZMRK IRZMVSRQIRXWERHSVF]I\TERHMRKIGSRSQMGSTTSVXYRMXMIW TVMQEVMP]JSVPS[XSQSHIVEXIMRGSQITIVWSRW7XEJJIWXMQEXIW XLI'(&+ERH'(&+6ILEF6IZSPZMRK0SER*YRHWMRGPYHMRK TVMSV]IEV’WGEVV]SZIVJSV*=EXQMPPMSR8LIWI JYRHEQSYRXW[MPPZEV]HITIRHMRKSR[LIRXLIJYRHWEVI VIGIMZIHHYVMRKXLIJMWGEP]IEV8LMWEPWSMRGPYHIWQMPPMSR MRFYHKIXJSV&IPPIZMI[6IRXEP3TIVEXMSRW *36)'%78 316 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Grant Funds +6%287%28-'-4%8)( *=XS*= MRQMPPMSRW 8LIWIEVIERXMGMTEXIHKVERXWXLEXQE]FIVIGIMZIHXLVSYKLSYX XLIJMWGEP]IEVXSEMHMRXLIWYTTSVXSJEWTIGMJMIHJYRGXMSRSV YWIHJSVKIRIVEPTYVTSWIW+VERXW%RXMGMTEXIHJSV*= XSXEPWQMPPMSR +6%28'328-2+)2'= *=XS*= MRQMPPMSRW +VERX'SRXMRKIRG]TVSZMHIWJSVYRI\TIGXIHKVERXE[EVHWMR XLIIZIRXXLEXYRJSVIWIIRI\TIRWIWSGGYVHYVMRKXLIJMWGEP ]IEV[LMPIGSRHYGXMRKSTIVEXMSRW*SV*=XLIEHSTXIH FYHKIXMWQMPPMSR *36)'%78 &9(+)8 %'89%0*36)'%78 317 Table of Contents BUDGET BY FUND | Grant Funds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’WMRGSQI*EQMPMIWQYWX FIMRGSQIIPMKMFPIFEWIHSRXLI4VSKVEQ-RGSQI+YMHIPMRIW 8LITVSKVEQTVSZMHIWEJJSVHEFPIERHWEJILSYWMRK STTSVXYRMXMIWJSVPS[IVMRGSQIJEQMPMIWWIRMSVGMXM^IRWERH TIVWSRW[MXLHMWEFMPMXMIW7XEJJIWXMQEXIWXLI,:'EPPSGEXMSRW MRGPYHMRKTVMSV]IEV’WGEVV]SZIVJSVMRGPYHMRKTVMSV]IEV’W GEVV]SZIVJSV*=EXQMPPMSR8LIEGXYEPEQSYRXW [MPPZEV]HITIRHMRKSR[LIRXLIJYRHWEVIVIGIMZIHHYVMRKXLI JMWGEP]IEV +6%287 *=XS*= MRQMPPMSRW 1MWGIPPERISYWJIHIVEPWXEXIERHPSGEPKVERXWMRGPYHIKVERXWJSV PE[IRJSVGIQIRXJMVIWIVZMGIWGSQQYRMX]WIVZMGIW XVERWTSVXEXMSRERHTVIWIVZEXMSRTVSNIGXW%HHMXMSREPKVERX JYRHMRK[EWVIGIMZIHJVSQXLI%>'EVIW*YRHXSEWWMWX[MXL GSWXWSJTYFPMGLIEPXLERHTYFPMGWEJIX]TIVWSRRIPI\TIRWIWMR *=ERHMR*=8LI*=EHSTXIH FYHKIXJSV+VERXWMWQMPPMSR *36)'%78 318 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Grant Funds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’WGEVV]SZIVJSV*=EXQMPPMSR8LIWI JYRHEQSYRXW[MPPZEV]HITIRHMRKSR[LIRXLIJYRHWEVI VIGIMZIHHYVMRKXLIJMWGEP]IEV8LMWEPWSMRGPYHIWQMPPMSR MRFYHKIXJSV&IPPIZMI[6IRXEP3TIVEXMSRW *36)'%78 &9(+)8 %'89%0*36)'%78 319 Table of Contents BUDGET BY FUND | Grant Funds +6%287%28-'-4%8)( *=XS*= MRQMPPMSRW 8LIWIEVIERXMGMTEXIHKVERXWXLEXQE]FIVIGIMZIH XLVSYKLSYXXLIJMWGEP]IEVXSEMHMRXLIWYTTSVXSJEWTIGMJMIH JYRGXMSRSVKIRIVEPTYVTSWIW+VERXW%RXMGMTEXIHJSV*= XSXEPWQMPPMSR +6%28'328-2+)2'= *=XS*= MRQMPPMSRW +VERX'SRXMRKIRG]TVSZMHIWJSVYRI\TIGXIHKVERXE[EVHWMR XLIIZIRXXLEXYRJSVIWIIRI\TIRWIWSGGYVHYVMRKXLIJMWGEP ]IEV[LMPIGSRHYGXMRKSTIVEXMSRW*SV*=XLIEHSTXIH FYHKIXMWQMPPMSR *36)'%78 320 &9(+)8 %'89%0*36)'%78 Table of Contents BUDGET BY FUND | Grant Funds 86%27*)67398 8VERWJIVW3YXMWXLIEYXLSVM^IHQSZIQIRXSJGEWLSVSXLIVVIWSYVGIWXSSXLIVJYRHWERHSVGETMXEPTVSNIGXW '-48)',2303+= *=XS*= '-48IGLRSPSK]LIPTWGSZIVXLITSVXMSRSJGMX][MHIXIGLRSPSK] GETMXEPTVSNIGXW8LI*=EHSTXIHFYHKIXSJMW EWLEVIHGSWXJSVWIVZIVERHRIX[SVOMRJVEWXVYGXYVI VITPEGIQIRXTVSKVEQW *36)'%78 &9(+)8 %'89%0*36)'%78 321 Table of Contents FY 2023/24 Adopted Budget 322 Table of Contents BUDGET BY FUND | Special Districts Fund FUND PURPOSE The Special Districts Fund is used to account for proceeds received by property owners in return for the city providing agreed-upon increased levels of municipal services beyond the standard level of core city services as allowed by statute. More specifically, the fund is used to account for the city’s streetlight districts. Special Districts Fund Sources (% to Total) $0.5 Million Special Districts Fund Uses (% to Total) $0.6 Million Rounding differences may occur. 323 Table of Contents BUDGET BY FUND | Special Districts Fund Summary Actual 2021/22 Beginning Fund Balance Streetlight Districts Total Beginning Fund Balance A d o p te d 2022/23 Forecast 2022/23 A d o p te d 2023/24 57,166 57,166 20,707 20,707 46,443 46,443 39,980 39,980 524,338 524, 338 552,218 552, 218 524,844 524, 844 538,728 538, 728 524,338 552,218 524,844 538,728 535,062 535, 062 572,925 572, 925 531,307 531, 307 578,708 578, 708 535,062 572,925 531,307 578,708 T o ta l Us e s 535,062 572,925 531,307 578,708 Sources Over/(Under) Uses ( 10,723) ( 20,707) ( 6,463) ( 39,980) Ending Fund Balance Streetlight Districts Total Ending Fund Balance 46,443 46,443 - 39,980 39,980 - Revenues Streetlight Districts S u b t ot a l Total Sources Expenditures Streetlight Districts S u b t ot a l TOTAL OPERATING BUDGET 324 Table of Contents BUDGET BY FUND | Special Districts Fund Five-Year Financial Forecast A d o p te d 2023/24 Beginning Fund Balance Streetlight Districts Total Beginning Fund Balance Forecast 2024/25 Forecast 2025/26 Forecast 2026/27 Forecast 2027/28 39,980 39,980 - - - - 538,728 538, 728 590,300 590, 300 602,100 602, 100 614,100 614, 100 626,400 626, 400 538,728 590,300 602,100 614,100 626,400 578,708 578, 708 590,300 590, 300 602,100 602, 100 614,100 614, 100 626,400 626, 400 578,708 590,300 602,100 614,100 626,400 T o ta l Us e s 578,708 590,300 602,100 614,100 626,400 Sources Over/(Under) Uses ( 39,980) - - - - Ending Fund Balance Streetlight Districts Total Ending Fund Balance - - - - - Revenues Streetlight Districts S u b t ot a l Total Sources Expenditures Streetlight Districts TOTAL OPERATING BUDGET S u b t ot a l 325 Table of Contents BUDGET BY FUND | Special Districts Fund SPECIAL DISTRICTS SOURCES Special Districts Sources for FY 2023/24 equal $0.5 million, which is slightly decreased compared to the FY 2022/23 adopted budget. Sources include Streetlight Districts revenue which is derived from the levy assessed on property owners within the city's streetlight districts. STREETLIGHT DISTRICTS FY 2019/20 to FY 2025/26 (in millions) Streetlight Districts revenue represents the levy assessed on property owners within each of the city’s 355 streetlight districts. The adopted FY 2023/24 revenue budget is $0.5 million, the streetlight levy is calculated based solely on estimated energy costs. On February 14, 2023 the Scottsdale City Council formed two new streetlight improvement districts. These new districts are waiting to become official from the State of Arizona and Maricopa County, therefore not included in the FY 2023/24 adopted budget. SPECIAL DISTRICTS USES Special Districts Uses consists of Streetlight Districts Expenditures. The cost of operating each district varies based on the cost of electricity usage and number of streetlights. STREETLIGHT DISTRICTS FY 2019/20 to FY 2025/26 (in millions) Streetlight Districts adopted FY 2023/24 expenditure budget is $0.6 million and will be used for electric costs of streetlights installed within certain areas throughout the community. FORECAST 326 BUDGET ACTUAL/FORECAST* Table of Contents BUDGET BY FUND | Special Districts Fund SPECIAL DISTRICTS FUND BALANCE Growth of fund balance occurs when sources exceed uses. Any fund balance achieved during a fiscal year is then re-budgeted the following fiscal year to ultimately keep the reserve to a $0 balance. A historical summary of the city’s Special Districts Fund ending balance is as follows: STREETLIGHT DISTRICTS FY 2019/20 to FY 2025/26 (in thousands) The FY 2023/24 Streetlight Districts ending fund balance is projected to be $0. The ending balance from the FY 2022/23 year-end forecast amount of $39,980 is carried forward to FY 2023/24 and is available to be re-budgeted to ultimately reduce the existing reserve to a $0 balance. FORECAST BUDGET ACTUAL/FORECAST* 327