TOWN OF PAONIA, COLORADO
PROPOSED ANNUAL BUDGET
FISCAL YEAR 2016
JANUARY 1, 2016 - DECEMBER 31, 2016
Presented to the Mayor and Town Board
October 13, 2015
TOWN OF PAONIA
FISCAL YEAR 2016
TABLE OF CONTENTS
INTRODUCTION
Elected Officials
Town Administration
Town Manager’s (Budget Officer) 2016 Budget Transmittal Letter
FY’2016Town Manager Budget Message (Draft provided/Final Staff Narrative 12/8/15)
FY’2016 Budget Adoption Ordinance (Draft to be provided by 11/24/15)
BUDGET DETAIL
Funds Spreadsheets – Proposed Budgets
General Fund Revenues and Expenditures
Water Fund Revenues and Expenditures
Sanitation Fund (Sewer & Trash) Revenues and Expenditures
Sales Tax Capital Improvement Fund Revenues and Expenditures
Conservation Trust Fund Revenues and Expenditures
Sidewalk Fund Revenues and Expenditures
Grant Projects Fund Revenues and Expenditures
SUPPLEMENTAL INFORMATION
Draft Tax Year 2016Certification of Taxable Value and Value Attributable to Growth
FY’ 2016 Budget Planning and Adoption Schedule
State of Colorado Budget Timeline
FY’2016Town Capital Improvement Plan Items
2015 Town of Paonia Employees & Appointed Listing: Position/Wage Rate/Date of Hire
Glossary
TOWN OF PAONIAELECTED OFFICIALS
MAYOR OF THE TOWN
Neal Schwieterman
MAYOR PR0-TEM
Charles Stewart
TOWN BOARD OF TRUSTEES
David Bradford
Eric Goold
Ross King
Amber Kleinman
Suzanne Watson
TOWN OF PAONIAADMINISTRATION
TOWN MANAGER/TOWN CLERK
Jane A. Berry
TOWN ATTORNEY
David Marek
FINANCE OFFICER
Cindy Jones
DEPUTY TOWN CLERK
Corinne Ferguson
PUBIC WORKS DIRECTOR
Travis Loberg
POLICE INVESTIGATOR/OFFICER
Neil Ferguson
MUNICIPAL COURT JUDGE
Bradley Kohlman
TOWN MANAGERFY’2016 BUDGETTRANSMITTAL LETTER
October 13, 2015
The Honorable Mayor Neal Schwietermanand the Paonia Town Board of Trustees
Town of Paonia
P. O. Box 460
214 Grand Avenue
Paonia, Colorado 81428
Dear Honorable Mayor Schwieterman and Members of the Paonia Town Board of Trustees,
We present to you and the citizens of the Town of Paonia a“Proposed FY’2016Town Budget.”
The Town’sprojected revenues for the current budget year (2015)are within acceptable ranges from our expectations of a year ago. There are potential exceptions, specifically for the Water and Sewer Utility Funds, for which adoption of an amended (revised) FY’2015 Town of PaoniaBudget might be recommended during late December 2015 or early January 2016.
All of the Town’s major fundscash balances are expected to experience a positive increase from the prior 2015 Fiscal Year if the submitted budget proposals are accepted by the Town Board. Prior deficit fund balances will be eliminated if the 2016 Proposed Town Budget is adopted at projected and recommended revenue levels.
Expenditures have been appropriately designated and severalnew accounts have been added and or accounts deleted, to better classify revenues, expenses and provide for new activities.
All current activities and agreements are planned to be fully funded at 100% of our contractual obligations as our continuing commitment to provide critical services to the Paonia community.
For the FY’2016 General Fund of the Town, the total tax levy will remain level at 8.322 mills given a slight increasein the Town’s overall total taxable valuation.
Total General Fund revenues will increasemodestly by approximately $10,300 above projections from the FY’2015estimated budget due to the valuation change and other minor revenue projection increases.
Property tax revenues in the General Fund will increase by an estimated $2,700.00 due to the valuation increase of the new construction.
The budget for the General Fund has been projected based upon an increased “Total Taxable Valuation” for all personal and real property in the Townof Paonia(Delta County) for a total taxable valuation for 2016 in the amount of $12,291,143.00. The increased valuation accounts for $114,849.00 in the value of new construction.
Total taxable valuation for the Town in 2015 was $12,031,703.00.
The Delta County Boards of Commissioners will approve and certify the valuations for both the Town and the Counties at a future meeting within the next sixty (60) days.
For all other funds of the Town including the Enterprise Funds (Water and Sanitation Fund), the Sidewalk Fund, Sales Tax Capital Improvement Fund, Conservation Trust Fund, Grant Projects Fund their proposed budgets have been prepared with consideration to fund all current programs and services as well as plan for several major capital improvement projects.
Significant Enterprise Funds (Water, Sewer, and Trash) rate increases are recommended as an integral component of this proposed budget for 2016. The proposed rate increases will be reviewed in detail with the Town Board for all to gain an understanding of these operations and their requirements.
Requests for programs, equipment, and projects will be addressed and funded whenever possible. This budget, as presented, is balancedand provides for positive fund balances in all funds.
The 2016 Town of Paonia Proposed Budget is presented to the Mayor and TownBoard with the highest expectations that together, we will continue delivering the highest quality of public services financially attainable to our citizens and businesses.
Respectfully Submitted,
Jane A. Berry
TownManager/Town Clerk
FISCAL YEAR 2016BUDGET MESSAGE
INTRODUCTION
Proposed Town of Paonia General Fund and other funds financial projections for the Fiscal Year 2016Town Budget is the result of a working consideration and commitment to meet both existing and projected future needs as well as those of the community at large.
The FY’ 2016Town Budget will serve as the benchmark document for multi-year budgeting and capital improvement planning as we provide for a sustainable future and continued improvement for our fiscal vitality.
The preparation of the Town of Paonia, Colorado Operating Budget, utilizes a number of methods to determine the total budget estimates. Methodology tools included general estimating, averaging, historical experience, benchmarking, trends, and forecasting. Revenues are based on projections and formulas obtained from the State of Colorado, Delta County, the Federal government, and other data resources.
The Town’s projected budget expenditures are based on estimates, averages, historical experience, benchmarking and other performance indicators, trends, and forecasts anticipated for the current and future needs of the community. The budgetary basis of accounting utilized in the preparation of the budget is modified accrual.
BudgetaryproceduresforunitsoflocalgovernmentinColoradoarestatutorily definedinthe"LocalGovernmentBudgetLaw",ColoradoRevisedStatutes,§29-1-101etseq.TheBudgetLawrequiresalllocalgovernmentswhichlevyataxorappropriatemoneytoprepareandadoptanannualbudget.
TheBudgetispreparedusingthesameclassification“Chart ofAccounts”astheAnnualFinancialStatements or Audit.Thisresultsinthebudget,theaccountingrecordsandtheannualfinancialstatementsallfollowingonesetofguidelines.
Generallyacceptedpublic accountingprinciplesrequirethatgovernmental accountingsystemsbeoperatedonafundbasis.FundsareestablishedfortheTownbasedonlegalrequirementsandortheneedtosegregaterevenuesandtheircorrespondingexpendituresformanagementcontrol,accountability,andotherpurposes.
EachfundoftheTownhasitsowncompletebudget.The State of Colorado Budget Law prohibits deficit financing in each fund in the budget.
In order to maintain the general operations of the Town government, without borrowing against anticipated revenues or other bonded indebtedness, the operating funds of the Town should project a positive year-end Fund (Cash) Balance.
Ultimately, the goal is to reach ending fiscal year cash balance (fund balance and or operating income) of at least a minimum of 25% or one quarter of operations. This would allow our Town operations to continue for a period of up to three months if no revenues from any sources were received.
If necessary, a “Contingency Fund”(a line item in the General Fund and or other operating fund) will be used to balance the budget and provide for other unanticipated projects or expenses.
No need for such fund is currently anticipated for FY’ 2016 with the exception of the required TABOR reserves of three (3) percent (%) of fiscal year spending which have been provided for in the General Fund Administration Expenditures budget and from the Fund and or Cash Balances of the other operating funds of the Town.
The Town operates under a Mayor-Town Board form of government with an appointed Town Manager. The Town Board provides strategic leadership, goal setting and policy-making authority and employs the Town Manager who is responsible for the day-to-day management, financial and technical support to ensure equitable, efficient and effective implementation of government services to our citizens.
The Town provides a full range of public services, including a Police Department, Municipal Utilities (water, wastewater, and trash), Infrastructure (drainage, streets, public buildings, airport, and sidewalks), and Cultural and Recreational programs (parks and recreation activities to promote wellness).
Other governmental services are provided through various agencies include: fire protection through the Paonia Volunteer Fire Department (Delta County FPD #2), North Fork Volunteer Ambulance Association, and the Paonia Public Library a branch office of the Delta County Library District.
IMPACT OF TABOR ON THE ANNUAL BUDGET
OnNovember3,1992,voters in ColoradoapprovedanamendmenttotheState’sConstitutionknownas"Amendment1"orthe "Taxpayer'sBillofRights"(TABOR).Thepurposeofthisamendmentistopreventgrowthofgovernment unlessspecificallyauthorizedbyavoteofthecitizens.
Thekeymechanismsfor preventinggrowthwithoutvoterapprovalare:
- Prohibitionofrevenueandexpendituregrowthotherthanforinflationandacomponentfornewconstruction;
- Prohibitionofnewtaxesorhighertaxrates;
- Prohibitionofnewdebt;and
- Refundingofanyexcessrevenuesorexcessexpenditures.
On November 8, 1994thevoters of Paoniapasseda ballot issuewhichauthorized collection,retention,andexpenditureofrevenuesinexcessofthelimitationssetbySection20ofArticleXoftheStateConstitution.
Themeasure,commonlyreferredtoasa"Debrucing Measure"wouldexempttheTownfrommechanisms(1)and(4)ofthepreceding paragraph.
VotersoftheTownapprovedthemeasure, thusexemptingtheTownfromtheselimits, but also requiring that emergency reserves be established. Reserves must be at least 3% of fiscal year spending and cannot be used for economic conditions, revenue shortfalls, or salary or benefit increases.
LOCAL GOVERNMENT BUDGET LAW FORMAT & CONTENT REQUIREMENTS
An annual local government budget presents a complete financial plan by fund and by spending agency within each fund and sets for the following requirements:
- Proposed Expenditures.
- Anticipated Revenues.
- Estimated Beginning and Ending Fund Balances.
- Three Years Comparable Data.
- Written Budget Message.
- Expenditures and Revenues must be described with explanatory schedules classifying the expenditures by object and the revenues by source.
- No Deficit Spending!
- Lease-Purchase Agreement(s) Supplemental Schedule (NA).
- Filing of a Certified Copy of the Budget after Adoption with the Division of Local Government by no later than January 31.
PREPARATION OF THE ANNUAL BUDGET & IMPORTANT FEATURES
In 2015 during the budget planning process, the Mayor and Town Board identified three (3) primary goals theywould like to achieve in 2016. These goals in order of priority are:
- Water Projects (Continue and complete in 2016-2017)
- Organization, Staffing and Police Department (Recruit and Select New Police Chief)
- Town Code (Enforcement and Administration)
During the 2016 Proposed Town Budget review process with the assistance of the Town Board Standing Committees we will revisit these goals to determine if these projects remain as the budget priorities for 2016.
Town revenues for the current FY’ 2015 are within acceptable ranges of meeting projections from the Adopted Budget planning of twelve months ago. General Fund’s fund balance at year-end2015 is projected to increase by approximately $20,000 for a positive 2015 year-end Fund Balance Forward of $3,482over a deficit FY’2014 ending Fund Balance (-$16,563).
There exists no plan to utilize “unrestricted fund balance appropriations” to supplement the operations of departments of the various funds (Streets or the Sewer Utility as an example). Restricted Fund balance reserves will continue in FY’2016 to be reserved and or obligated for authorized capital improvement, acquisition projects, and existing contractual (example of debt service loan or bond agreements) and or intergovernmental agreements.
Tax levy estimates for FY’2016, in the General Fund are projected to remain at 8.322 mills, the same present levy as 2015 in consideration of the slight increase ($114,849) to the Town’s overall total taxable valuation, due to new construction.
Combined General Fund tax revenues and non-tax revenues for 2016 will decrease by approximately $36,000for a total of $651,637below the FY’ 2014 Audited General Fund figure of $687,617.
The proposed General Fund 2016 Budget has been projected based upon a total valuation of all real and personal property in the Town at $12,291,143as of December 31, 2015. This “Total Taxable Value” reflects an increase of $114,849for new construction fromthe total valuation of $12,031,703as of December 31, 2014.
Tax revenues will continue to have future growth potential particularly with any new housing and or commercial development, re-development, or annexationprojects. Numerous economic and community development opportunities could be facilitated by the revision of the Town’sComprehensive (Master) Plan which hopefully will be considered for FY’2017.
Re-establishment of the Town’s Planning Commission will be critical partners in any planning and financing efforts for strategic community development action plans.
In FY’2014 Town employees did not receive a cost of living increase and or bonuses and additionally no increases were budgeted for in FY’2015.
Recommendations for employee compensation and fringe benefits are incorporated within the various cost categories and funds. Salaries and wages are planned to modestly increase based upon successful performance evaluations for all Town Employees in 2016. No cost of living increase (COLA) is provided for in the Fiscal Year 2016 Proposed Town Budget despite the Federal government’s forecast of a 2015 2% inflation rate.
Overall inflation in the United States rose 0.2% in the 12 months ended August 2015, marking the same inflation rate as in July 2015.
The US Labor Department’s report for a third month in a row, states core US inflation increased 1.8% on an annual basis. This 12-month reading is the benchmark inflation rate and is the key indicator to the central bank in their decision as to where to set interest rates. The Federal government estimates a 2% annual inflation rate target for 2015.
Current and future workloads of Town Departments will continue to be analyzed to determine the appropriate staffing levels in all departments and operational areas. This issue is a top priority for the 2016 Town Budget Year.
At this time, the following staffing and organizational recommendations for Fiscal Year 2016 are presented:
- Two (2) Public Works Laborer positions to be eliminated.
- Leave position vacancy, not replacing the Chief of Police position.
- Appoint and promote an existing Police Officer to the position of Sergeant who will be the responsible officer-in-charge of the Police Department for supervision of personnel and daily operations of the Paonia Police Department as well as other duties which may be assigned by the Town Manager.
- Establish a full-time employee position, recruit and employ a minimum of a Class D licensed water operator in early 2016.
- Consider establishing a full-time employee position, recruit, and employ a minimum of a Class D licensed wastewater operator for early 2017.
- Elimination of the additional 5% pension program contribution for Police Department Full-time Benefited Employees.
Employee Fringe Benefits are projected at approximately 22% of gross wages. Employee Fringe Benefits is an area where considerable attention and study should continue to be applied in subsequent years. This is due to the continued rising costs of health care as the primary employee fringe benefit provided by the Town of Paoniato its full-time employees.
Medical insurance is currently provided through the Rocky Mountain Health Plan. The Town of Paonia currently provides 80% premium coverage for the full-time employee and their dependents.
For 2016, the Town will consider requesting Town Employees to contribute 25% of the premium coverage for medical insurance with the Town providing 75% premium coverage. As an alternative, the current 80% Town - 20% Employee premium cost share could be considered.
The total 2016 annual increase for the health care plan is 3.3% or approximately $,2230 due to the need to switch to a plan that meets the requirements of the Federal “Affordable Care Act” as the current Town health insurance plan is not in compliance with this federal act and has been eliminated for 2016.
Considerable time and effort has been dedicated to analyzing various health plans proposals provided by multiple carriers. Every effort has been made to find a comparable plan to the existing Town Employee health plan, but to no avail.
The deductibles will increase two-fold from the current plan to the recommended plan for 2016. A decision must be made at the October 27, 2015 Town Board Meeting (11/1/15 deadline) to designate the health care plan for Town Employees for the Plan Year 2016.
In 2014 Town Employees were contributing 10% to the premium cost with the Town’s Employer share being 90%. For FY’2015, the cost share for Town Employees increased to 20% with the Town providing 80% of the premium coverage.
The following cost summary comparison is provided for information only at this time:
2015 Plan Total Annual Premium:$67,658
2015 Plan Total Cost to Town (80%):$54,127
2015 Plan Total Cost to Employees (20%):$13,531
2016 Plan Total Annual Premium:$69,886 ($2,228 increase)
2016 Plan Total Cost to Town (80%):$55,909($1,782 increase)
2016 Plan Total Cost to Employees (20%):$13,977 ($446 increase)
2016 Plan Total Annual Premium:$69,886 ($2,228 increase)
2016 Plan Total Cost to Town (75%):$52,415 ($3,494 decrease)
2016 Plan Total Cost to Employees (25%):$17,472 ($3,941 increase)
Numerous potential Capital Improvement Projects for 2016 funded from all Town sources include:
- Re-construction of streets due to the planned water main replacement projects.
- Sidewalk replacement and construction.
- 2016 payments on Police Department Vehicles.
- Consideration to purchase one (1) new Skid Steer to replace the existing two (2).
- Purchase of two (2) Police Department Ballistic Vests.
- Leaf Vacuum improvements.
- Street Signs Replacement Project.
- Apple Valley Park Improvements.
- Town Park Improvements.
- Parks Sprinklers Repairs.
- Consideration to purchase a new pick-up truck for the Public Works Director.
- Broadband Grant Share for Town of Paonia.
- Several Water and Sewer Projects.
- LED Street Lighting Project.
- Town Hall Upgrades.
In addition to the above listed potential capital projects, the Conservation Trust Fund as well as grant monies from GOCO, will finance capital improvements for the Town’s parks and recreation facilities.
A Capital Improvement Plan (CIP) is an important component of the Town’s planning process and anticipates local monies to be leveraged in several areas by grants and other non-tax sources of financing (revenue bonds).
A formal CIP should be developed and implemented during FY’2016 with planning for the next five (5) years of capital projects. Projections for financing has been anticipated and included in the budget document necessary to fund contemplated capital improvements.