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HomeMy WebLinkAboutPreliminary (Binder Notes) Operating Budget FY16-17a fir` T H E`; C I T Y O F SS Office; of City Manager July 29, 2016 Dear Mayor and Council Members: Please find attached the FY2016-2017 proposed budget document and related materials for your study and review. We are very fortunate this year to see increased sales taxes as well as increased property values from both our new construction and existing properties. This has allowed us the opportunity to provide additional funds in a few critical areas; however, we have continued to maintain a very conservative approach to expenditure increases. As you will see, we are recommending that you reduce the tax rate by %C from 46.75C to 46.25C. As we have advised you in the past few years, although we are recommending a tax rate reduction, the Effective Tax Rate calculation will require that we publish notice of a tax increase. In reviewing the details of the tax roll, many of our residents did, in fact, see substantial increases in their values this year. It appears that many of these properties had lagged the market for several years so the catch up in some cases is significant. Keep in mind, current state law limits the increase for any given year to 10%. Also, keep in mind that Euless adopted the senior citizen freeze, so senior residents will see no impact to their taxes regardless of their increase in value. The water and wastewater fund continues to be a challenge and you will see that we are recommending a $1 increase in the base rate for both water and wastewater and recommending that the volume rates only be increased by the pass thru from TRA. We plan to cover most of our budget the evening of Thursday, August 4tn beginning at 5:30 p.m. here at City Hall. Dinner will be furnished. On Saturday, August 6th, we will begin with breakfast at 7:00 a.m. in the Treaty Room with the work session following at 8:00 a.m. in the Travis Room. We will wrap up any budget discussion and then have several presentations on other topics. We will allow ample time for any topics you may wish to discuss. Please let me know if there is anything in particular that you would like us to be prepared to discuss. Your staff has worked hard to prepare this budget and have been mindful of the needs of the departments and the impact on our citizens. I am very grateful to the Finance department staff and the Directors and Administrators for all their assistance. We appreciate so much the support we receive from you and our residents. It is our goal that this budget will continue to move Euless in the right direction for the future. Sincerely, Lo etta Getchell City Manager 201 N. Ector Drive, Euless, Texas 76039-3595 817/685-1400 • Metro 817/267-4403 • Fax 817/685-1416 www.ci.euless.tx.us City of Euless, Texas Fiscal Year 2016-17 Budget Cover Page This budget will raise more revenue from property taxes than last year's budget by an amount of $1,056,626, which is a 7.51 percent increase from last year's budget. The property tax revenue to be raised from new property added to the tax roll this year is $489,132. NOTICE OF 2016 TAX YEAR PROPOSED PROPERTY TAX RATE FOR CITY OF EULESS, TEXAS A tax rate of $0.462500 per $100 valuation has been proposed for adoption by the governing body of City of Euless, Texas. This rate exceeds the lower of the effective or rollback tax rate, and state law requires that two public hearings be held by the governing body before adopting the proposed tax rate. The governing body of City of Euless, Texas proposes to use revenue attributable to the tax rate increase for the purpose of funding the City of Euless Proposed Fiscal Year 2016-2017 Budget as detailed at www.eulesstx.gov and at 201 N. Ector Drive Euless, Texas 76039. PROPOSED TAX RATE $0.462500 per $100 PRECEDING YEAR'S TAX RATE $0.467500 per $100 EFFECTIVE TAX RATE $0.433988 per $100 ROLLBACK TAX RATE $0.466172 per $100 The effective tax rate is the total tax rate needed to raise the same amount of property tax revenue for City of Euless, Texas from the same properties in both the 2015 tax year and the 2016 tax year. The rollback tax rate is the highest tax rate that City of Euless, Texas may adopt before voters are entitled to petition for an election to limit the rate that may be approved to the rollback rate. YOUR TAXES OWED UNDER ANY OF THE ABOVE RATES CAN BE CALCULATED AS FOLLOWS: property tax amount= (rate) x (taxable value of your property)/100 For assistance or detailed information about tax calculations, please contact: Janina Jewell Director of Finance 201 N. Ector Drive Euless, Texas 76039 (817)685-1444 j j ewell@eulesstx.gov www.eulesstx.gov You are urged to attend and express your views at the following public hearings on the proposed tax rate: First Hearing: August 30, 2016 at 7:00 PM at Euless City Hall 201 N. Ector Drive Euless, Texas 76039. Notice of Adopted 2016 Tax Rate City of Euless, Texas ADOPTED A TAX RATE THAT WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR'S TAX RATE. THE TAX RATE WILL EFFECTIVELY BE RAISED BY 12.42 PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $8.72. Page 1 of 1 §26.05(b) of Property Tax Code Steps Required for Adoption of Tax Rate Entity Name: City of Euless, Texas Language Required in the Motion Setting This Year's Tax Rate: Date: 07/30/2016 01:42 PM This year's proposed tax rate exceeds the effective tax rate. The vote on the ordinance, resolution, or order setting the tax rate must be a record vote. A motion to adopt the ordinance, resolution, or order must be made in the following form: I move that the property tax rate be increased by the adoption of a tax rate of 0.462500, which is effectively a 6.57 percent increase in the tax rate. Statement Required in the Ordinance, Resolution, or Order Setting This Year's Tax Rate: This year's levy to fund maintenance and operations expenditures exceeds last year's maintenance and operations tax levy. The following statements must be included in the ordinance, resolution, or order setting this year's tax rate. The statements must be in larger type than the type used in any other portion of the document. THIS TAX RATE WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR'S TAX RATE. THE TAX RATE WILL EFFECTIVELY BE RAISED BY 12.42 PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $8.72. Statement That Must be Posted on the Home Page of Any Internet Website Operated by the Taxing Unit: This year's levy to fund maintenance and operations expenditures exceeds last year's maintenance and operations tax levy. The following statements must be included in the ordinance, resolution, or order setting this year's tax rate. The statements must be in larger type than the type used in any other portion of the document. City of Euless, Texas ADOPTED A TAX RATE THAT WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR'S TAX RATE. THE TAX RATE WILL EFFECTIVELY BE RAISED BY 12.42 PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $8.72. https://actweb.acttax.com/tnt/application/reports/1469904136025.html 7/30/2016 Page 1 of 1 City of Euless, Texas Fiscal Year 2016-2017 Budget Cover Page August 30, 2016 This budget will raise more revenue from property taxes than last year's budget by an amount of $1,056,626, which is a 7.51 percent increase from last year's budget. The property tax revenue to be raised from new property added to the tax roll this year is $489,132. The members of the governing body voted on the budget as follows: FOR: AGAINST: PRESENT and not voting: ABSENT: Property Tax Rate Comparison 2016-2017 2015-2016 Property Tax Rate: $0.462500/100 $0.467500/100 Effective Tax Rate: $0.433988/100 $<<5year_2015_etr>>/100 Effective Maintenance & Operations Tax Rate: $0.333831/100 $<<5year_2015_emor>>/l00 Rollback Tax Rate: $0.466172/100 $<<5year_2015_rtr>>/100 Debt Rate: $0.087213/100 $0.100929/100 Total debt obligation for City of Euless, Texas secured by property taxes: $4,793,056 https:Hactweb.acttax.com/tnt/application/reports/1469904184059.html 7/30/2016 EULESS CITY COUNCIL WORKSESSION August 4, 2016 EULESS CITY HALL Pre -Council Conference Room 201 N. Ector Drive Euless, Texas 5:30 p.m. The members of the City Council of the City of Euless, Texas, will hold a work session for the purpose of discussing the 2016-2017 Annual Budget and related items including: Capital Improvement Plan General Fund including Tax Rate Insurance and Benefits Risk Management Equipment Replacement Hotel/Motel Half Cent Sales Tax Crime Control District Car Rental Tax Water and Sewer, including rates Texas Star Golf and Conference Centre Texas Star Sports Complex Other Enterprise Funds Debt Funds 5 Year Budget Plan Goals and Objectives 2016-2017 Calendar Transportation, including SH183 Update Facility Master Plan Art Projects Staffing Levels Legislative Update Code of Ordinance Updates Arbor Daze Payday Lending Regulations Northeast Transportation Services Code Enforcement Construction Zone Signage Business Retention / Promotion Strategic Planning City Council Communication Development Update, including Glade Parks, Glade Parks South, Midtown and Riverwalk Posted this V day of August 2016 by5:00 p.m. Kim Sutter, TRMC, City Secretary If you plan to attend this public meeting and you have a disability that requires special arrangements at the meeting, please contact our office at 817-685-1420. Reasonable accommodations will be made to assist your needs. EULESS CITY COUNCIL WORKSESSION August 6, 2016 Texas Star Conference Centre 1400 Texas Star Parkway Euless, Texas 7:00 a.m. - Breakfast — Treaty Room 8:00 a.m. - Meeting — Travis Room The members of the City Council of the City of Euless, Texas, will hold a work session for the purpose of discussing the 2016-2017 Annual Budget and related items including: Capital Improvement Plan Transportation, including SH183 Update General Fund including Tax Rate Facility Master Plan Insurance and Benefits Art Projects Risk Management Staffing Levels Equipment Replacement Legislative Update Hotel/Motel Code of Ordinance Updates Half Cent Sales Tax Arbor Daze Crime Control District Payday Lending Regulations Car Rental Tax Northeast Transportation Services Water and Sewer, including rates Code Enforcement Texas Star Golf and Conference Centre Construction Zone Signage Texas Star Sports Complex Business Retention / Promotion Other Enterprise Funds Debt Funds 5 Year Budget Plan Goals and Objectives 2016-2017 Calendar Strategic Planning City Council Communication Development Update, including Glade Parks, Glade Parks South, Midtown and Riverwalk Posted this 111 day of August 2016 by 5:00 p.m. Kim Sutter, TRMC, City Secretary If you plan to attend this public meeting and you have a disability that requires special arrangements at the meeting, please contact our office at 817-685-1420. Reasonable accommodations will be made to assist your needs. G/L Account # Exp Amount Fund Total 101-9060-590.11-02/22-01 17,590 101-8064-531.11-02 22,000 101-9060-590.12-03 75,000 101-9060-590.29-99 225,060 101-9060-590.74-04 59,522 101-9060-590.74-99 476,632 875,804 201-7080-550.74-99 9,476 9,476 210-1052-550.74-99 122,762 210-1081-540.73-09 353,213 210-1081-540.74-99 196,925 672,900 230-3045-521.74-01 100,000 100,000 231-3045-521.74-01 100,000 100,000 240-9060-590.74-99 435,400 435,400 501-9060-590.74-99 233,074 233,074 610-5015-519.74-99 100,000 100,000 615-5020-519.74-99 175,000 175,000 2,701,654 2,701,654 City of Euless One -Time Project Status ForFY2016 Project Status (Open/Closed Expected /in Progress/ Spent as of Expense 4/01- Project ! Account Number Dept Fund Program Description On Hold) Funded 3/31/16 Encumbered Balance 9/30/16 EOY Balance Carryover Return CM1601 101-9060-590.11-02/22-01 CMO General Multi -Media Intern Roll $ 10,500 $ - $ - $ 10,500 $ 5,250 $ S,250 $ 51250 $ - PW1500 101-8064-531.11-02 PW General Part-time Animal Control Officer Roll $ 25,000 $ - $ - $ 25,000 $ 3,000 $ 22,000 $ 22,000 $ - CM1506 101-9060-590.11.02/22-01 HR General Continue Career Prep Roll $ 31,500 $ 5,425 $ - $ 26,075 $ 13,735 $ 12,340 $ 12,340 $ - PW1502 101-9060-590.12-03 PW General Contract lnspectorforCIP Roll $ 75,000 $ - $ - $ 75,000 $ - $ 75,000 $ 75,000 $ - CM1500 101-9060-590.29-99 CMO General Employee One Time Adjustments Roll $ 225,060 $ - $ - $ 225,060 $ - $ 225,060 $ 225,060 $ - IS1302 101-9060-590.74-04 Info Svcs General IS Consultant Roll $ 19,715 $ - $ - $ 19,715 $ - $ 19,715 $ 19,715 $ - IS1402 101-9060-590.74-04 Info Svcs General Document imaging System Roll $ 87,125 $ 16,962 $ 5,356 $ 64,807 $ 25,000 $ 39,807 $ 39,807 $ - CM0603 101-9060-590.74-99 CMO General Euless Pride Roll $ 17,968 $ 10,075 $ - $ 7,893 $ - $ 7,893 $ 7,893 $ - CM0802 101-9060-590.74-99 CMO General City's Match for TC Home Program/CPR Roll $ 148,138 $ 42,299 $ - $ 105,839 $ 20,000 $ 85,839 $ 85,839 $ (0) CM0902 101-9060-590.74-99 CMO General Consultant Roll $ 61,250 $ - $ - $ 61,250 $ - $ 61,250 $ 61,250 $ - CM1102 101-9060-590.74-99 CSO General Election Expense Roll $ 20,000 $ - $ - $ 20,000 $ - $ 20,000 $ 20,000 $ - CM1403 101-9060-590.74-99 CMO General Retirements Roll $ 225,000 $ - 5 - $ 225,000 $ - $ 225,000 $ 225,000 $ - ED1201 101-9060-590.74-99 Development General Plan Review Roll $ 22,200 $ - $ - $ 22,200 $ - $ 22,200 $ 22,200 $ - FD0706 101-9060-590.74-99 PACS General Tree Trimming Contract Roll $ 5,350 $ - $ - $ 5,350 $ - $ 5,350 $ 5,350 $ - PR1605 101-9060-590.74-99 PACS General Credit Card Machines Roll $ 9,100 $ - $ - $ 9,100 $ - $ 9,100 $ 9,100 $ - FM1605 101-9060-590.74-99 Fleet & Fac General Generator Replacement - Building D On Hold $ 40,000 $ - $ - $ 40,000 $ - $ 40,000 $ 40,000 $ - GC1501 201-7080-550.74-99 Golf Hotel/Motel Conf. Center Lighting & Misc. Improvements Roll $ 9,476 $ - $ - $ 9,476 $ - $ 9,476 $ 9,476 $ - PR1414 210-1052-550.74-99 CMO/PACS EDC Parks Upgrades Roll $ 124,011 $ 1,250 $ - $ 122,762 $ - $ 122,762 $ 122,762 $ - E01500 210-1081-540.73-09 CMO EDC Artfunds (add CY leftover funding of$82,032] Roll $ 275,119 $ 3,938 $ - $ 271,181 $ (82,032) $ 353,213 $ 353,213 $ - ED1001 210-1081-540.74-99 CMO EDC Refurbish Old Fire Station Roll $ 33,620 $ - $ - $ 33,620 $ • $ 33,620 $ 33,620 $ - ED1401 210-1081-540.74-99 Planning EDC Planning Consultants Roll $ 167,305 $ 2,000 $ - $ 165,305 $ 2,000 $ 163,305 $ 163,305 $ - PD1611 230-3045-521.74-01 PD Police Drug DEA Police Equipment Roll $ 100,000 $ - $ - $ 100,000 $ - $ 100,000 $ 100,000 $ - PD1612 231-3045-521.74-01 PD Police Drug State Police Equipment Roll $ 100,000 $ - $ - $ 100,000 $ - $ 100,000 $ 100,000 $ - CM0604 240-9060-590.74-99 CMO Car Rental Special Legal Fund Roll $ 410,400 $ - $ - $ 410,400 $ 25,000 $ 385,400 $ 385,400 $ - CM1402 240-9060-590.74-99 CMO Car Rental Relocation Services Roll $ 200,000 $ - $ - $ 200,000 $ - $ 200,000 $ 50,000 $ 150,000 CM0603 501.9060-590.74-99 CMO W&WW Euless Pride Roll $ 83,074 $ - $ - $ 83,074 $ - $ 83,074 $ 83,074 $ - FM1508 501-9060.590.74-99 Fleet & Fac W/WW Fuel Contingency Roll $ 150,000 $ - $ - $ 150,000 $ - $ 150,000 $ 150,000 $ - CM1201 610-5015-519.74-99 Insurance Insurance Employee Health Clinic Interior Finish Out Roll $ 100,000 $ - $ $ 100,000 $ - $ 100,000 $ 100,000 $ - CM1203 615-5020-519.74-99 Risk Risk Mgmt Claims Reserve Roll $ 175,000 $ - $ - $ 175,000 $ - $ 175,000 $ 175 000 $ $ 2,950,911 $ 81,949 $ 5,356 $ 2,863,606 $ 11,953 $ 2,851,653 $ 2,701,654 $ 150,000 Page 1 August 4th Council Presentation Proposed purchase of new 100 ft. Platform • In June 2012 I met with the City Managers Office to discuss ongoing maintenance issues with the Fire Department Fleet. Primary discussion was the need to look at the next apparatus replacement. The City Manager and I agreed to look at purchasing a pumper in 2012 (delivery 2013) and 1 in 2013 (delivery 2014)to update the current fire department fleet. Total cost for both trucks over two years was$924,000. The first purchase was an in stock fire truck to expedite delivery. Today for example with continued maintenance issues with our 2002 platform and to some degree our 2005 and 2008 quints we have only one reserve in service which is our 1998 Quality pumper. ' 7 • In July of 2013 the department continued to struggle with apparatus issues and availability of parts from Sutphen Corporation. At that rime I did a look back to June of 2012 and/Truck 553 had been out of service 67 days, Quint 551 was out of service 57 days and Quint 5/52 was out of service 85 days resulting in personnel working on reserve apparatus 210 days during the year. On at least three occasions due to multiple apparatus issues borrowing a truck from Hurst/Bedford was discussed and phone calls made to see if our neighbors had a truck we could borrow. • On July 2014 I received a letter from Sutphen Corporation requesting that we remove from service aerial operation of the 2002 platform due to 3 incidents across the country in which similar model Sutphen ladder trucks experienced elevated ladder failure which in one incident resulted in firefighter injury. Since the date of notification (2 years)Truck 553 has been in service 103 days out of 730 total days. It is currently out of service today. My other challenge after the recall has been the lack of confidence by my personnel to work off of or set the aerial. • In October of this year the 1998 Quality engine will be retired and sold at auction. The 1995 Sutphen pumper was sold at auction early 2015 allowing the 2005 Sutphen quint and 2008 Sutphen quint to be our main reserve apparatus along with the 2002 Sutphen Platform. • Additionally, I was contacted last September by ISO (Insurance Services Office)to request coming back into Euless to re-inspect our community for it PPC Rating (Public Protection Classification). Our last inspection was conducted in December 2007. At that time the community scored a 94.36 out of a possible 106.50. Becoming the first ISO#1 community in Tarrant County and 1 of only_in the state and_in the country. At that time we ran an all quint concept deployment and this did factor into our ability to achieve an ISO#1 in 2008. Today there are 30 ISO#1 communities in Texas counting Euless and our desire is to maintain our current ISO#1 designation. • With continued growth and development in Euless I believe and so does my staff and shift personnel that when we order our next fire truck that it would need to be a platform because of the lack of reliability with our current unit. Fleet's current apparatus replacement schedule for the Fire Department has our next fire truck purchase a platform but the scheduled order date is in 2018 with a delivery date of 2019. I have asked the CMO based on new commercial construction/number of 3 story apartments, lack of reliability/confidence of our current platform and ISO requirements that we consider moving up our 2018 scheduled purchase to this October with a delivery date of mid to late 2017. Overview — General Overview of the Budget — Janina will provide details. I'm very proud that this budget allows us to accomplish a number of objectives that we have been working towards for years and does so while still offering a slight reduction to the tax rate. As a bit of history, during the recession, we cut 19 positions (from 393 authorized in FY10 to 374 funded in FY2011) from the budget with an expressed intent to restore those as the economy recovered. However, we also indicated that as positions were added back, we would do so in the most critical areas and not necessarily do a full restoration. Since that time, we have been only been able to restore 6 position. We added 2 police officers to the GF in FY2013 and funded 3 more from the seized asset fund with the intent to move those into the GF or CCPD. We moved one in FY2016, have added one for FY2017 and we have one left to get funded in baseline. (1 — Secretary PD) ..... ..................... ......... . This year, addressing personnel shortage was a key goal in order to be able to maintain proper service levels. You will see that we are recommending 3 firefighters, one public works field tech, an athletic coordinator and the conversion of two part time secretary positions into one full time position. We have also included a 3.25% pay plan for our employees. Another major impact to the budget this year was the cost of the health insurance plan. Over the past few years, we have made a number of changes to the benefit plan including increasing deductibles, OOP max and co-payment; however the costs for the current year have soared. Premiums for the upcoming year are being increased by 14%. Because of health care reform that limits premiums for employees, mandates coverage of various items and caps out of pocket costs, we are running out of options; however, finding solutions will be a top priority for the upcoming year. (Rates — Plan B — Total/Employee Portion for Employee $698/174, Spouse $1,607/401, Children $1,327/331, Family $2,026/506) (Rate — Plan A — Employee $811/242, Spouse $1,865/556, Children $1,541/459, Family $2,352/702) Another area that we have been working for years to increase is our depreciation funding. The City has had an equipment replacement fund for many years but was only able to fund it at 55% of the expected replacement costs. Originally, the fund excluded large equipment over $75K. Over the last few years, we have been able to start depreciating the larger items. The current budget is now based on 100% depreciation for items under 75K and 55% for items over $75K which will put us in a much better financial position long term to adequately cover replacement costs. We will continue to try to reach 100% depreciation for all items when funding becomes available. Another area that we have worked on for years is increasing baseline funding for street maintenance. From the PCI study, you saw that we need to invest at least $900k annually to maintain our current street condition. Over the last few years, we have been able to get $300,000 into the baseline and $600,000 has been dependent upon the available of one- time money. If the one-time money is not available, we would be left with either deferring maintenance or issuing debt. The current budget increases the overall funding by $50,000 to offset rising construction costs which will allow us to continue the same level of maintenance and adds $175,000 to the baseline. This gives us a total of $950,000 with $525,000 now in baseline and $425,000 coming from one-time funding. We will continue to try to move all of this into baseline as funding allows. You will also see that with our increased revenues, our rebates payments have been increased in accordance with the contractual agreements. These include sales tax rebates, hotel occupancy tax and car rental revenue. We still have relatively minor increases to the baseline budgets and these are mostly related to increases for janitorial services and maintenance and contractual agreements The water and wastewater fund is another challenging area. The cost increases are primarily attributed to the salary package of 3.25%, the insurance increases, and the cost of purchasing water and treating wastewater through Trinity River Authority. We are recommending an increase of $1 to the base water and wastewater rate to cover our increased costs as well as a direct pass through of the TRA increases. TRA is increasing our costs to purchase water by 20C and wastewater treatment charges are increasing by 13C. We are recommending to only increase our volume charge by the exact amount of the TRA increases. We are also recommending a 25C rate stabilization rebate. We received a fairly large refund last year from TRA which has brought back up our balance in the rate stabilization fund so this will allow us to provide a slightly larger rebate to customers and help to offset the impact of the rate increase. In the Equipment Replacement Fund, you will see that we are recommending to expedite the purchase of an Aerial Platform Fire Truck. We are currently running one 2008 quint and two engines front line. We have a platform and two quints in reserve. The platform is a 2002 and the two quints are a 1998 and 2005. The 2002 platform has been the subject of many maintenance issues including a recall in 2014 after a fireman was injured by a faulty ladder. The ladder was repaired under warranty; however, the maintenance issues have continued. Since July, 2014, the truck has been out of service 730 days and in service 103 days. We do have a quint scheduled for delivery in October that will replace the 1998 quint; however, that will still leave us with just one quint front line as the 2008 quint will shift into reserve. The department personnel believes it is critical that we have a platform truck. We currently have over 250 three or four story structures in the City. The association has expressed their strong belief that the platform, which provides a bucket, is much safer for any type of roof operation or rescue operation. Wes is also working with our ISO consultant who has indicated that two front line ladders are required to meet that part of the ISO standards and without those, we will likely not maintain our ISO 1 rating. Wes has explored with our neighboring cities and DFW Airport as to whether they could guarantee us a platform for our large structure fires; however, none have the capability to give us this assurance. The cost of the truck is approximately $1.25M. We are recommending issuing short term tax notes for the financing. We have a drop in our debt service requirements this year and can issue notes with a three year term for an interest rate of 1-1.5%. Issuing tax notes is a very simple process and only requires that we take bids from financial institutions and present for your award. We have included the required debt payment into the I&S tax rate and can still maintain an l&S rate of 9.9C for FY2017 compared to 10.11C for the current year. The proposed budget includes all the things that I have just mentioned and is based on reducing the tax rate by % of 1C. We have also spent a great deal of time looking at our Capital Improvements Plan and have included a plan for all of the items that are needed within the next five years. We have a few street p` reconstruction projects including Fuller Wiser and Bear Creek Parkway that are in need to major reconstruction. We recommend that these be done in 2019 to coincide with the next debt reduction so that we can again maintain a level debt rate and not impact the overall tax rate. You will see that we have split the library remodel and the PATS VII into a design phase and a construction phase. We put one year between each to allow us the time to complete the design in order to get accurate construction cost estimates. You will see that we are following the plan that we discussed last year to take the funds available from the payoff of the EDC debt to cash flow Phase VI at the PATS (synthetic turf for the existing infields) and the design of the library remodel in the current budget. We are also recommending that we begin accumulating the cash for the Phase VII expansion at the PATS. We are recommending that $2M be transferred from to CIP for this project. The current plan call for design of Phase VII in 2018 with construction in 2020. We believe that we should be able to save enough to cash flow the majority of the project without a need to issue debt. We anticipate the ECD would repay the Car Rental fund and these funds could then be used for other city projects. There are a couple of other major projects that are in the long term plan that we will need to continue to address. The first is to evaluate a fire station expansion in the next 5 or so years. We will begin preliminary work next year to determine what would be required to expand Fire Station 1 to meet the growth on the north side of town. The three additional fireman that are being added this year and the new fire truck will put us further down the road to accomplishing a full double company in this station at some point in the future. While it may still be several years out, we are trying to put ourselves in the best position when the times comes since it would be near impossible to fund all of this in one year. Lastly, Chris will have a more detailed discussion on our water wells on Saturday. All three of our wells are reaching end of life and we are working to develop a financial plan to address this. Our early feasibility studies are indicating that it is financially advantageous for us to stay in the well business. If this holds true, we will be putting together a detailed plan for the future including site selection, cost and financing plans. So before Janina walks you through all the details, are there any questions on our general direction.