07/16/2024 - PacketPort Orchard
Council Finance Committee
July 16, 2024
4:00 pm-5:00 Zoom Link
Council Conference Room
https://us02web.zoom. us/j/82820258472
US: +12532050468„82820258472# US
+12532158782„82820258472# US (Tacoma)
1) Finance Department (15 mins) Finance Director, Noah Crocker
a. Sales Tax & REET Revenue Report
b. Preliminary Treasurers Report — Funds, accounts
c. Monthly budget Report
2) Budget Amendment 2025-2026 (20 mins) Finance Director, Noah Crocker
a. 2025-2026 Budget Schedule Review
b. Sales Tax Revenue Assumptions
3) Utility Programs (20 mins) Finance Director, Noah Crocker
a. Low Income Utility Program
b. Water Leak Policy
c. Monthly Billing
Other Items to come before the Committee.
Schedule Next Meeting Date
Role of the Finance Committee
The finance committee provides oversight of city budgeting, financial planning, and financial reporting. The committee recommends long-range
financial goals along with funding strategies for the operating and capital budgets. Human resource issues requiring policy direction are brought
before the committee. The committee serves as the advisory forum for transportation and street maintenance funding, and funding relating to the
transportation benefit district.
Sales Tax Collections
Population
Summary of Budget to
Actuals
2022
2023
2024
Biennial
Budget
Actual
5,340,000
7,402,000
6,895,000
14,297,000
7,783,763
7,719,461
3,905,424
11,624,885
Over/Under
$ 2,443,763
$
317,461
$
(2,989,576)
$ (2,672,115)
Actuals
2022
2023
2024
Biennial
January
February
March
April
May
June
July
August
September
October
November
December
$ 543,145
626,678
524,545
548,118
665,944
682,922
668,890
742,304
707,709
693,521
730,655
649,332
$ 656,711
684,990
572,419
539,880
606,994
616,122
689,627
725,037
663,517
653,847
684,362
1 625,956
$ 631,079
723,810
609,403
574,283
681,038
685,812
$ 1,287,789
$ 1,408,800
$ 1,181,822
$ 1,114,163
$ 1,288,032
$ 1,301,933
$ 689,627
$ 725,037
$ 663,517
$ 653,847
$ 684,362
$ 625,956
Total
$ 7,783,763
$ 7,719,461
$ 3,905,424
$ 11,624,885
Percentage of Biennial
Budget Received
81%
Actuals
Year over Year
%
Change
Change
$ (25,632)
-3.90%
$ 38,820
5.67%
$ 36,985
6.46%
$ 34,402
6.37%
$ 74,044
12.20%
$ 69,690
11.31 %
$ 228,309
Real Estate Excise Tax (REET) Collections
Summary of Budget to
Actuals
2022
2023
2024
Biennial
Budget
Actual
$ 1,808,000
1,945,903
$ 1,800,000
2,112,110
$ 1,600,000
847,839
$ 3,400,000
$ 2,959,949
Over/Under
$ 137,903
$ 312,110
1 $ (752,161)
$ (440,051)
108%
Actuals
2022
2023
2024
Biennial
January
February
March
April
May
June
July
August
September
October
November
December
$ 82,213
166,226
204,469
126,410
151,824
190,761
249,922
172,743
181,406
151,035
121,635
147,258
$ 81,265 $
137,211
158,612
150,287
189,577
237,539
233,708
172,573
280,056
154,352
140,293
1 176,638
107,320
104,091
139,296
152,272
171,062
173,797
$ 188,585
$ 241,302
$ 297,908
$ 302,559
$ 360,639
$ 411,336
$ 233,708
$ 172,573
$ 280,056
$ 154,352
$ 140,293
$ 176,638
Total
$ 1,945,903
$ 2,112,110 $
847,839
$ 2,959,949
Percentage of Biennial
Budget Received
87%
Actuals
Year over Year
Change
%
Change
$ 26,055
32.06%
$ (33,120)
-24.14%
$ (19,316)
-12.18%
$ 1,985
1.32%
$ (18,515)
-9.77%
$ (63,742)
-26.83%
$ (106,652)
-11.17%
Budget
2024 estimated
Budget vs Actual
%
based on Syr avg
(Over/Under)
Over/Under
$
516,190
$
114,889
22.3%
$
620,872
$
102,938
16.6%
$
479,509
$
129,895
27.1%
$
461,296
$
112,986
24.5%
$
570,567
$
110,471
19.4%
$
566,524
$
119,288
21.1%
$
611,506
#VALUE!
$
642,161
#VALUE!
$
617,092
#VALUE!
$
606,655
#VALUE!
$
630,537
#VALUE!
$
572,093
#VALUE!
$
6,895,000
$
690,468
21.48%
Budget
2024 estimated
Budget vs Actual
%
based on Syr avg
(Over/Under)
Over/Under
$
80,407
$
26,913
33.5%
$
122,603
$
(18,512)
-15.1 %
$
134,793
$
4,503
3.3%
$
118,291
$
33,981
28.7%
$
108,281
$
62,781
58.0%
$
139,665
$
34,132
24.4%
$
231,669
#VALUE!
$
133,480
#VALUE!
$
155,823
#VALUE!
$
128,521
#VALUE!
$
94,003
#VALUE!
$
152,465
#VALUE!
$
1,600,000
$
143,799
20%
BUDGET CALENDAR
2024 CALENDAR FOR PREPARATION AND ADOPTION OF 2025-2026
.DUNE -DULY
AUGUST
BIENNIAL BUDGET
• Develop Budget Schedule
• Update City Comprehensive Plan
• Review Priorities and Policy direction from Council Biennial Budget Study Session
• Mayor discusses 2025-2026 fiscal year goals with Department Heads
• Personnel Salary and Benefits projections for 2025-2026
• Budget instructions provided to Dept for their proposed 2025-2026 budget
• Finance Director prepare estimates for revenue and ending fund balance
• Finance Director set schedule for Sept meeting with Dept Heads
SEPTEMBER
• Dept Heads submit budget and supplemental requests to the Finance Department
• Finance Department reviews Dept Budget Worksheet Report/Requests
• Mayor and Finance Dept review Budget Worksheet Report/Requests
• Finance Director and Mayor meet with Dept Heads to review budget requests
• Finance Department prepares Preliminary Budget Publication
OCTOBER
• Publication of notice of availability of the 2025-2026 Preliminary Budget for public
review and public hearing notice for the proposed final budget to be published
• Oct. 1- Preliminary Budget delivered to the City Council and available to the public
• Oct. 22- Finance Committee Meeting to Review Preliminary Budget
• Oct. 22-Council Study Session —Presentation on Revenue Sources
Oct. 22-Council Study Session- Preliminary 2025-2026 Budget
• Oct. 25- (TBD) All day Council Special meeting: Department budget review
• Oct. 29- Council Meeting -1st Public Hearing on 2025 Property Tax Levy as part of
the 2025-2026 Biennial Budget
• Oct. 25- Council Meeting -Adopting an Ordinance for the 2023 Property Tax Levy
NOVEMBER
• Nov. 12- Council Meeting Budget Discussion (Optional)
• Nov. 19-Finance Committee meeting to review the Proposed Final budget
• Nov. 19-Copies of Proposed Final budget made available to the public
• Nov. 19- Council Study Session on Proposed Final budget
• Nov. 26- Council Meeting: 2nd Public hearing of the Final 2025-2026 Budget
Ordinance
• Nov. 26- Council meeting Adopting the 2025-2026 final budget
� ORCHARD
Finance Co itte
2025-2026 Budge
Sales Tax Discussio
07*16.20
Note: This is intended to illustrate the project estimates and potential fundin
;;3
Fiscal Year
Growth Rate
2019
2020
8%
2021
18%
2022
14%
2023
-1 %
2024
-2
Sales Tax Scenarios for 2025-2026 Biennial Budget
Scenarios Requested: FY 2025 FY2026
► 5-Year Average+ 5% Growth
► 3-Year Average+ 5% Growth
► 2-Year Average+ 5% Growth
► Flat + 5% Growth
$ 7,13 0, 615
$7,696,231
$7,292,550
$7,783,763
$7,487,14
$ 8.9081, Oq
$7.9657.91 i
$8,172)9!
In
Sales Tax History and 2023-2024 Biennial Budget Assumptions
$9,000,000
$ 8, 000, 000
$7,000,000
$ 6, 000, 000
$ 5, 000, 000
$ 4, 000, 000
$ 3, 000, 000
$ 2, 000, 000
$1, 000, 000
Sales Tax History + Budget Assumption
2019 2020 2021 2022 2023 2024 2025
■ Actual 0 5-yr Avg 0 3-yr Avg ■ 2-yr Avg 0 Flat
2026
Recommendation
• Finance Department prefers using the 5-year avg for 2023 and 5+% growth for
2024 as a conservative base to start the budget
� ORCHARD
Finance Co itte
Low Income Discounte
Utility Rate Prograr
07*16.20
Note: This is intended to illustrate the project estimates and potential fundin
Low Income Discounted Utility Rate Program
WHAT IS THE PROGRAM
The City of Port Orchard offers reduced base rates for citizens with low income. Base rates for
water, sewer, and storm utility services are designated in POMC 13.04 &13.06.
DEFINITIONS FOR THE PROGRAM
Low Income — A citizen(s) whose total household annual income does not exceed 125% of the U
Census Department's poverty threshold.
Household Income — Includes all salary, wages, interest, dividends, and other earnings which ar(
reportable for federal income tax purposes, and cash payments such as reimbursement receivec
from pensions, annuities, social security, and public assistance programs. Also, included in incor
are any contributions received from any family member or other person who is living in the sam
residence as the applicant applying for reduced utility rates and who is helping defray such
applicants living costs.
Low Income Discounted Utility Rate Program 2023
Residential Utility Rate for Low Income Citizen
Related children under 18 years
Size of family unit
125% Non&125% 125% mb 125%Three
One person (unrelated individual): - - - -
Under age 65 17,621 - - -
125%
Aged 65 and older
16,245
-
-
-
Tw o people:
-
-
-
-
Householder under age 65
Householder aged 65 and over
Three people
Four people
Five people
Six people
Seven people
Fight people
Nine or more people
22,681
23,346
-
-
20,474
23,258
-
-
26,495
27,264
27,289
-
34,936
35,508
34,349
34,469
42,131
42,744
41,435
40,442
3
48,459
48,651
47,649
46,688
4
55,758
56,106
54,906
54,069
5
62,360
62,911
61,779
60,787
5
75,015
75,379
74,376
73,535
7
Source: U.S. Census Bureau.
PovertvThresholds: 2021 1<1.0M13
Low Income Discounted Utility Rate Program 2023
WHAT ARE THE DISCOUNTED RATES:
Residential Utility Rate for Low Income Citizen
,III utilities rate with discount
Reduction 25
Current rate
Reduction from base
New low income base rate
water base rate $ 53.50
5 13.3E
.13
sewer base rate $ 163.00
5 40.75
$122.25
storm base rate $ 2B.00
5 7.00
$ 21.OD
1* Water base rate + water consumption will be on billing statements
Low Income Discounted Utility Rate Program
Estimated Impact for 2023
ESTIMATED FINANCIAL IMPACT (REDUCED REVENUE): (25% DISCOUNT)
Utility Billing Cycle Annual
Water Base: $13.38 $80.28
Sewer Base: $40.75 $244.50
Storm Base: $7.00 $42
Total Impact: $61.13 $366.78
TARGET GOAL: 25 Accounts
Example: If 25 citizens are approved for program annual impact would have been $9,169.50
2023 Results
• Program Started in March 2023
• 12 accounts approved for the program throughout the year of 2023
• Total Financial Impact to the City $1,755
Note:
• One person was denied in 2023 due to income over threshold.
• When we reviewed renewals for 2024 one person was over threshold this year.
Low Income Discounted Utility Rate Program 2024
Residential Utility Rate for Low Income Citizen
Poverty Thresholds for 2023 by Size of Family and Number of Related Children Under 18 Years
(In dollars) multiplied by 125%
Size of family unit
None One Two
One person unrelated individual):
Under 65 years ........................... $ 19,815
65 vears and over ...................... $ 18.268
Householder under 65 years...... $ 25,505 $ 26,253
Householder 65 years and over...... $ 23,023 $ 26,154
Related children under 18 y
Three Four Five
Three people ................................ $ 29,793 $ 30,658 $ 30,686
Four people .................................. $ 39,285 $ 39,928 $ 38,625 $ 38,760
Five people .................................. $ 47.376 $ 48,065 $ 46.594 $ 45,454 $ 44.759
Six I Seven IEiaht or
Seven people ............................... $ 62,699 $ 63,090 $ 61,741 $ 60,800 $ 59,048 $ 57,003 $ 54,760
Eight people ................................. $ 70,124 $ 70,743 $ 69,469 $ 68,354 $ 66,770 $ 64,761 $ 62,670 $ 62,1
Nine people or more .................... $ 84,354 $ 84,763 $ 83,635 $ 82,689 $ 81,135 $ 78,998 $ 77,064 $ F
Source: U.S. Census Bureau,
2024. eshoi.
Note: The source of the weighted average thresholds is the 2023 Current Population Survey Annual Social and Economic Supplement (CPS ASEC).
Low Income Discounted Utility Rate Program
Current Discount for 2024
WHAT ARE THE DISCOUNTED RATES:
Residential Utility Rate for Low Income Citizen
All utilities rate with
discount
amount of reduction
25%
regular rate
reduction
lower rate
Water base rate
$57.50
$14.38
$43.13
sewer base rate
$163.00
$40.75
$122.25
storm base rate
$36.68
$9.17
$27.51
*Water base rate + water consumption will be on billing statements
What is next?
We currently have 12 Citizens that have qualified for the program.
How do we grow the program?
► 2 tools available to potentially expand the program
1) Change the Poverty Income threshold Factor
Determines Eligibility
Change the Discount Rate
Calculates Benefit of program
Poverty Income threshold Factor
• Used to establish Eligibility
• The Poverty threshold factor is used to establish the maximum
annual household income of the federal poverty guidelines applicable
at the time the applicant applies for the rate reduction to the City.
Current Example Example Example Example Exampl
Poverty Threshold Factor 125% 130% 135% 140% 145% 150%
One person under 65
Three person household
Four person household
Five person household
$19, 815
$ 20, 608
$ 21, 400
$ 22,193
$ 22, 985
$ 23, 778
$ 29, 793
$ 30, 984
$ 32,176
$ 33, 368
$ 34, 559
$ 35, 751
$ 39, 285
$ 40, 856
$ 42, 428
$ 43, 999
$ 45, 571
$ 47,124
$ 47, 376
$ 49, 271
$ 51,166
$ 53, 061
$ 54, 956
$ 56, 852
Discount Rate
• Used to determine the benefit for the applicant
- The low income discount rate provides the reduced cost for residents
whom have qualified.
Current (per account):
Rates Bi-monthly Bill Discount
25% - $65
Alternatives (per account):
Rates Bi-monthly Bill Discount
30% - $75
45 % - $85
Annual Impact
$385
Annual Impact
$447
$521
Discussion
Choices:
1) Maintain current 2024 threshold and Discount
1) 125% Threshold factor and 25% discount
2) Adjust 2024 threshold
1) Threshold factor ranges from 125-150%
3) Adjust 2024 discount
1) Discounts ranging from 25%-35%
4) Adjust 2024 threshold and discount
1) Threshold factor range from 125-150%
2) Discounts ranging from 25%-35%
Questions