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HomeMy Public PortalAbout6a 2018 Budget Message DRAFT Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Page 1 2018 Town of Fraser Budget Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Page 2 December 6, 2017 Mayor Vandernail and the Board of Trustees are pleased to present the 2018 Budget. The Town Board has expressed a strong commitment to ensuring the fiscal sustainability of the organization while providing the highest level of service within our available resources. Throughout the Budget Process, the Town Board has identified challenges that threaten near term fiscal sustainability for the organization. Further, absent effective mitigating actions by the Town, the impact of these challenges may result in significant reductions to levels of service, changes to the Town’s tax structure, and/or increases in service fees. These challenges are summarized as follows: • Sales tax revenues provide approximately 75% of the revenue in the General Fund which provides for the general operations of the Town. The Fraser business community is relatively small, therefore otherwise minor changes can have a significant impact on revenues that are relied upon for general operations. The opening of a new grocery store in Winter Park in late 2017 will most certainly have a negative impact on Fraser sales tax revenues. However, the extent of that impact is uncertain. • Our long range plans, policies and codes need review, especially in North Fraser, to confirm that they accurately reflect our community vision for the future. • The desire to coordinate and improve solid waste management programs, energy efficiency, and best business sustainability practices. • While the Town of Fraser has made great strides to improve its records management programs, this is a critical function for the organization and needs further resources to ensure effective and efficient management of our community’s public records. • Demands on the Public Works Department exceed current resources in the department, especially in terms of winter snow management, water and sewer operations, and open space and trails maintenance. • Absent significant investment in water system infrastructure, the Town may not be able to meet its mission of providing a safe, reliable, and sustainable water supply into the future. • Inflow and infiltration into the Town’s wastewater collections system is resulting in operational challenges at the Upper Fraser Valley Wastewater Treatment Facility which will require multi-million dollar capital projects at the Facility to avoid violations of our permits, unless we act to reduce the collection system inflow and infiltration problems. Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Page 3 Colorado municipalities are required to adopt an annual budget. In addition to identifying revenue sources and amounts, the budget identifies the Town Board’s vision and hopes for the community via proposed expenditures. Over the course of the year, the Budget provides the framework for the annual work plan, all programs, projects, and services (and levels of service) to be provided to the community. The total expenditures appropriated in the annual budget cannot be exceeded unless an amended budget is adopted after proper hearings. The annual budget cannot provide for deficit spending, unless appropriate additional funds are provided (such as those from committed reserve accounts). Budget adoption is a public policy exercise that must comply with certain statutory requirements. The Town’s process meets and exceeds all such requirements. While only one public hearing is required, the Fraser Town Board conducted three hearings. These hearings occurred on November 2nd, November 16th, and December 7th 2016. The Water and Wastewater Committee was also instrumental in considering rates for the Water and Wastewater Funds. The baseline services provided for in the 2018 budget are proposed to be delivered at the same level of service as provided in 2017. These baseline services include: • Public Works, including maintenance of streets, trails, parks, and other assets; Water production and distribution to Fraser residents and guests; Wastewater collections and treatment. • Administrative services , including financial and records management, and general municipal administration. • Community Development, including planning review of new development, long range strategic planning, and other planning and building services . As in 2017, the Budget includes provisions for in house engineering should the opportunity arise. • Economic development services and resources. • Provision of Law Enforcement (including municipal court and animal control) and Building Inspection Services via intergovernmental agreements with the Town of Winter Park. • Operation of the Upper Fraser Valley Wastewater Treatment Facility on behalf of the Town of Fraser, Winter Park Ranch Water and Sanitation District, and Grand County Water and Sanitation District #1. • Transit services via the Town of Winter Park (funded by a 1% Fraser municipal sales tax). Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Page 4 In addition to the baseline services, the Town Board included the following in the 2018 Budget: • The US 40 Pedestrian Safety Improvement Project, funded via two grants from the Colorado Department of Transportation along with a local match of $775,000 This project will provide a series of traffic calming medians and crosswalk improvements between CR8 and Old Victory Road, along additional pedestrian trail improvements. This project is funded in the Capital Asset Fund. Given the additional landscaping opportunities related to these medians, provisions have been included for additional garden staff and planting supplies. • In late 2017, a new nightly rental registration program was established. Accordingly, the Budget includes a $20,000 expenditure for software support and revenues associated with the registration fees and sales taxes in a new account for community housing expenditures. Additionally, $365,000 of fund balance is appropriated into this account. This combined with the affordable housing restricted reserve would provide for $500,000 toward a housing project. • Two projects initiated in 2017 will wrap up in 2017, the Development Code Update and Fraser River Corridor Master Plan. • In anticipation of capital projects as may be recommended by the Fraser River Corridor Master Plan, $100,000 is appropriated in the Restricted Revenue Fund for implementation of an open space capital project. (This may need to be funded by GF) • A $25,000 contribution from the Conservation Trust Fund to the Fraser Valley Metropolitan Recreation District initiative to install a refrigeration system at the Icebox ice rink. • Increased funding for the Business Enhancement Grant program from $25,000 to $50,000. • A $5,000 contribution to the Grand Enterprise Initiative. This is a countywide initiative designed to provide free confidential business support and assistance, with the goal of growing local businesses. (They’ve requested an increase to $7,500) • Continued support for Headwater Trails Alliance ($10,500 for operations, $6,000 for winter trail grooming, and $30,000 for capital projects relating to the Trail Smart Sizing Project). While it remains our goal to fund trails expenditures in the Restricted Revenue Fund, in 2018 the General Fund will support these expenditures as transit start-up costs along with uncertain revenue impacts due to the Winter Park grocery store continue to limit opportunities to utilize the Restricted Revenue Fund. • Development and operation of a new recycling and pay as you throw trash drop off facility. This project results from our waste diversion study and related sustainability initiatives and is underwritten by a $195,000 grant from the Colorado Department of Public Health and Environment. Operational revenues and expenses are also new additions to the budget in 2018 (estimated at $200,000) • The Art in Public Places Program appropriate increased from $7,500 to $12,500 to expand upon the successful projects completed in 2017. Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Page 5 • The following are noteworthy additions and funding changes from the 2017 Budget: • Fraser property owners will benefit from a property tax reduction resulting from 2016 sales tax revenues from the 1% transit, trails, and capital projects sales tax that exceeded the first-year revenue estimate. This results in a reduction of ___ Mills. • The Town of Fraser has been negotiating with Grand County Water and Sanitation District #1 regarding purchase of augmentation water, an expenditure of $625,000 within the Water Fund for this purpose was included in the 2017 Budget. However, since this agreement has yet to be concluded, these funds are re-appropriated in the 2018 Budget. • The pavement and bridge over the Fraser River on County Road 8 are in desperate need of improvements. The budget includes $1,600,000 for this project in the General Fund (Public Works, Capital Projects). While this would be an appropriate project for the Capital Asset Fund, we are reserving use of this Fund for the Pedestrian Safety Improvement Project to facilitate accurate reporting for the CDOT grant. The CR8 bridge and pavement project will include funding from Grand County and grant funds. • Improvements to CR 72 in the amount of $400,000 are also proposed in the General Fund (Public Works, Capital Projects). • The Public Works Facility is long overdue for improvements. Our crews have done a fantastic job of making use of every square inch of the facility, but we have overgrown the space. The budget includes funds to begin design development for a new facility. Funds for construction are not included within the budget. • Also, the Public Works fleet is aging. Public Works is proposing purchase of a new snow plow truck, skid loader, dump truck, light duty work truck, and full duty work truck. Funds for these purchases, along with a new police vehicle, are appropriated in the Capital Equipment Replacement Fund. The heavy equipment purchases would all require further consideration and approval from the Town board prior to acquisition. • While we have consultants engaged in design work for the Public Works Facility, we also propose safety and accessibility improvements to the front entry of Town Hall. • The Water Fund includes a $300,000 expenditure for a waterline replacement project on Byers Avenue west of the railroad. This project is currently undergoing a cost-benefit evaluation, and prior to initiating the project, further Board consideration will be necessary. • The Wastewater Fund includes funding for inflow and infiltration capital projects and associated engineering. This work is critical to maintain operations at the wastewater treatment plant and future capacity. • Significant capital projects are proposed for the wastewater treatment facility. This facility is owned by Fraser and two other special districts, so Fraser’s actual costs are only a portion of the total. However, as managing entity, Fraser’s budget includes the entire expenditure. The bulk of the work is designed to address metals and nutrient removal, but also includes other improvements to address permit compliance and maintain capacity. • Development of FroDo property? (If so, we’ll need to add that expenditure/revenue) • Transfer funds from unassigned fund balance in Water Fund into committed reserves in Water fund to increase emergency reserves from $500,000 to $750,000? • JFF-CRR reserve replenishment… 2018 or 2019? Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Page 6 • It should be noted that while the expenditures in the General Fund result in a reduction of $2,400,000 of unassigned fund balance, this is the result of capital expenditures. The Town Board has adopted a policy of not using “savings” for operational costs, instead setting aside funds for future emergencies or capital projects. Funding for the following capital expenditures is included in the Budget totaling $2,065,000 • $2,000,000 for CR8 and CR72 pavement and bridge projects, anticipating funding support of $1,000,000 from other sources. • $450,000 for engineering and local match for the US 40 Pedestrian Safety Improvement Project. • $100,000 for vehicle purchases. • $50,000 for recycle facility site development. • $100,000 for consulting work on the Development Code Update and Fraser River Corridor Master Plan. • $365,000 appropriated for community housing project funding. Further, the budget anticipates a conservative reduction in sales tax revenues of $500,000 as a result of the new grocery store opening in Winter Park. Funds The Town’s Budget includes the following funds: • General Fund (GF), which provides for the general functions and services such as administration, planning, law enforcement, streets and properties. • Restricted Revenue Fund (RRF), a fund to account for sales tax revenues restricted to transit, trails, and capital projects. • Conservation Trust Fund (CTF), which is funded by lottery proceeds and provides for open space and recreational capital projects. • Capital Equipment Replacement Fund (CERF), which provides for vehicle and heavy equipment purchases. • Capital Asset Fund (CAF), which is intended to fund long term maintenance of capital assets (streets, buildings, parks, trails, etc). • Debt Service Fund (DSF), which provides for debt service payments. • Fraser River Enhancement Project Fund (FREP), which was utilized for the Fraser River Enhancement Project to provide transparency and accountability for the project. • Water Fund (WF), an enterprise fund for the Town’s water utility. • Wastewater Fund (WWF), an enterprise fund for the Town’s wastewater utility. • Joint Facilities Fund (JFF) O&M and the Joint Facilities Fund CRR, both of which provide for operations and capital projects at the Wastewater Treatment Plant. Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Page 7 Reserves The Fraser Town Board adopted significant amendments to the Town’s Financial Policies (see Resolution 2015-12-14). In addition to updating the financial standards and expectations established by the Board, the policies include new reserve policies and goals. Additionally, in order to clearly identify the Town’s financial position the Budget format has been amended. At the bottom of each fund, the available reserves are identified. Budget Process The budgeting process is continuous throughout the year, as we continually monitor revenues and expenses against the current adopted budget. Budget development for the following year begins mid-year in the offices of the Town Manager and Finance Manager as trends are identified and work plans for the current year are evaluated. Around this time budget requests and proposals for the following year start to be identified and are submitted by department heads, the Town Board, and other outside entities. While only one public hearing is re quired, the Town of Fraser hosts three public hearings to ensure that the community has ample opportunity to engage in this process. In 201 6, the Town Board conduct ed three hearings (November 1st, November 15th, and December 6th). The Town’s Budget is one of the most important matters considered by the Town Board that directly affects every resident, guest, business, and property owner within the community. Budget Basis The 201 8 budget is prepared in accordance with the laws of the State of Colorado and has been prepared using the Modified Accrual basis of accounting. Under this method, the focus is on current financial resource measurement whereby revenues are recognized when they become both meas urable and available (except for unmarred interest on long - term debt which is recognized when due). Measurable means the amount of the transaction that can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The budgets for the enterprise funds are prepared using the accrual basis of accounting, meaning that revenues and expenses are recognized when they are earned or incurred. Thank you on behalf of the c ommunity! Mayor Vandernail and the Board of Trustees, as well as staff, appreciate the time, effort, and consideration invested by so many in this important process . Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Page 8 Supplemental Lease/Purchase Information (Required by C.R.S. 29-1-103 (d) (II)) The Town of Fraser currently has no lease purchases.