Agenda Date: 08/21/2018
Subject:
Title
A resolution approving the adoption of a statement of budget policy pertaining to the capital projects reserve account
Body
|
Presented By: |
Tiffany Hooten, Finance Department |
REQUESTED COUNCIL ACTION:
Does city council support approving a resolution adopting a statement of budget policy pertaining to the capital projects reserve account for FY 2019 and subsequent budgets should voters assume funding for fire and emergency services?
BACKGROUND:
Earlier in 2018, staff presented a draft of Principles of Sound Financial Management policies for council’s review. These principles establish guidelines for the city's overall fiscal planning and management and are intended to foster and support the continued financial strength and stability of the City of Littleton as reflected in its financial goals. The establishment of the capital projects reserve account will be incorporated into the Principles of Sound Financial Management policies.
The city funds its contribution to the Littleton Fire Rescue partnership through several sources of revenue including sales tax, emergency medical services transport fees, property taxes, and other fire-related revenues. The city's total fire budgeted expense in 2018 is approximately $7.1 million. The city does not have a dedicated revenue source to fund fire services. Unlike the city, special districts in Colorado are funded primarily by mill levies assessed on real and personal property within the district. South Metro Fire Rescue (SMFR) imposes a mill levy of 9.25 mills. Future increases in mill levies are subject to voter approval due to the Colorado Taxpayer's Bill of Rights (TABOR).
At its workshop on February 3, 2018, the council discussed inclusion with SMFR. The council reached consensus on the following:
1. Should a majority of the voters approve inclusion into SMFR and once the SMFR mill levy becomes effective, the city will reduce its mill levy by 4.662; thereby retaining 2 mills
2. Should a majority of the voters approve inclusion into SMFR and once the SMFR mill levy becomes effective, the city will redirect a portion of revenues budgeted for fire and emergency medical services to fund improvements to city streets and transportation
This action was approved on April 17, 2018 by Ordinance No. 13 and 14, Series, 2018.
This resolution reaffirms the establishment of a Capital Projects Reserve Account in FY 2019 should City of Littleton voters assume funding for fire and emergency medical services and the simultaneous reduction of the City of Littleton mill levy.
PRIOR ACTIONS OR DISCUSSIONS:
Ordinance No. 13, Series, 2018 approved the SMFR Pre-Inclusion Agreement which included a reduction in the City of Littleton property tax mill levy from 6.662 to 2.0 mills should the City of Littleton voters approve inclusion into SMFR for fire and emergency medical services on November 6, 2018.
Ordinance No. 14, Series, 2018 approved the establishment of a Capital Projects Reserve Account and the deposit of $3,100,000, adjusted annually, into the account in 2020 and thereafter should City of Littleton voters approve inclusion into SMFR for fire and emergency medical services on November 6, 2018.
STAFF ANALYSIS:
City council is commencing the review of the proposed FY 2019 Budget in September 2018. Included in this review are five year projections for the General Fund and the Capital Projects Fund.
Staff will be presenting five year fiscally constrained financial plans in the proposed FY 2019 budget. These plans will include the reduction in the City of Littleton’s property tax mill levy and the dedication of $3,100,000 beginning in 2020, in the event that the voters assume funding for fire and emergency medical services.
Staff has prepared a resolution for consideration by council providing for the adoption of a statement of budget policy pertaining to the capital projects reserve account for FY 2019 and subsequent budgets.
OPTIONS/ALTERNATIVES:
Approval will further solidify council’s commitment to a reduction in the property tax mill levy and deposit of funds into a capital projects reserve account should voters assume funding for fire and emergency medical services beginning in 2020.
FISCAL IMPACTS:
Ordinance No. 14, Series, 2018, approved on April 17, 2018, establishes a Capital Projects Reserve Account should City of Littleton voters approve inclusion into SMFR for fire and emergency medical services on November 6, 2018. Beginning in 2020, the city shall deposit $3,100,000 into a capital projects reserve account, and for each subsequent year, adjusted annually, as described in Ordinance No. 14, Series, 2018.
STAFF RECOMMENDATION:
Staff recommends approval of the resolution.
PROPOSED MOTION:
Proposed Motion
I move to approve the resolution approving adoption of a statement of budget policy pertaining to the capital projects reserve account for FY 2019 and subsequent budgets should voters assume funding for fire and emergency medical services.