DEPARTMENT: Office of Management and Budget
DEPARTMENT HEAD: John Woodruff
COUNCIL DISTRICTS IMPACTED: City Wide
SUBJECT:
City Council Worksession on the FY 2017 Proposed Budget
SUMMARY:
Staff presentation on the FY 2017 Proposed Budget focusing on, but not limited to, the following City Departments:
A. Smart Cities
B. Aviation
C. Employee Healthcare and Compensation
D. Hemisfair Park Area Redevelopment Corporation
BACKGROUND INFORMATION:
The FY 2017 Proposed Budget was presented to the Mayor and City Council on August 18, 2016. The FY 2017 Proposed Budget reflects City Council policy direction, community priorities, and begins the implementation of the SA Tomorrow Comprehensive Plan. The Budget focuses on five key areas: 1) Fiscal responsibility, 2) Investing in streets and sidewalks, 3) Enhancing public safety and quality of life of city neighborhoods, 4) Promoting our world heritage site and preparing for the City’s Tricentennial Celebration; and 5) Building a strong foundation to place San Antonio as a leader in “Smart Cities” initiatives.
The Proposed FY 2017 Consolidated Annual Budget, comprised of all funds excluding transfers, totals $2.5 billion. The General Fund budget is $1.14 billion; restricted funds, including Aviation, Development Services, Solid Waste and Hotel Occupancy Tax, total $823 million; and the Capital Budget totals $585 million. The Proposed Budget adds a net of 151 new positions for a total of 12,183 authorized positions.
The Proposed General Fund Budget is structurally balanced, keeps public safety spending at 65.9%, and maintains financial reserves at 15%. The budget supports a proposed general obligation bond program for 2017 to 2021 of $850 million with no city property tax rate increase.
Following the presentation of the proposed budget a series of City Council budget worksessions are scheduled from August 24 to September 7. At these sessions, City staff will review the budget proposals with the Mayor and City Council in detail. The budget is scheduled to be adopted on September 15 for the City’s fiscal year that begins on October 1.
ISSUE:
A Budget Worksession is scheduled for Wednesday, September 7 from 2:00 p.m. to 5:00 p.m. at the Municipal Plaza “B” Room. At this session, the City Council will be presented with the FY 2017 Proposed Budget for Smart Cities, Aviation, Employee Healthcare Benefits & Compensation and Hemisfair Park Area Redevelopment Corporation.
SMART CITIES
A total of $13 million is recommended in the FY 2017 Proposed Budget for Smart City projects and technology infrastructure replacement. Of this amount, the budget includes $5 million allocated for technology infrastructure replacements that includes exchanging existing servers, storage, data center and data network. $8 million is allocated for Smart City projects including the projects below:
• Parks App Pilot: This project will create an app that would provide a map of linear creek ways & initial pilot parks (10 largest) to include exact locations and amenities.
• Enhanced 311 App: This project would update our current 3-1-1 app to make it easier for citizens to interact with government through the use of a smart phone. The app would allow citizens to easily see the status of their 3-1-1 submissions and other submissions based on their location.
• SATRIP: This project would implement advanced transportation technologies that will gather real-time traffic data, incorporate the high water detection system, include a pedestrian detection system in pedestrian crosswalks and incorporate traffic data into a mobile app for travelers. The project would be piloted along Blanco Road & Military Drive corridors. (Grant is for $1.5M with 1:1 match)
• Solar Benches: This project will install benches with solar panels in strategic pilot locations that will allow people to charge their electronic devices with the use of solar power. Sensors can be added that will allow the bench to be a Wi-Fi hotspot and collect information on pedestrian traffic.
• Community Kiosks: This project would pilot kiosks used to access city services, current events, transportation services, local business information, local history and entertainment.
• Wi-Fi in Parks: Implement a pilot program to increase Wi-Fi coverage at 10 City parks.
The FY 2017 Proposed Budget recommends adding one position for $65,000 in the Office of Innovation to spearhead the City’s smart city program and to pursue partnerships, grants and event opportunities.
AVIATION DEPARTMENT
The Aviation Department’s FY 2017 Proposed Budget is operated as an enterprise system, principally funded by the following funds, Aviation Operation and Maintenance Fund, and other Restricted Funds. Below is a summary of the funding and position counts that would be authorized by the FY 2017 Proposed Budget.
|
FUND |
FY 2017 PROPOSED BUDGET |
AUTHORIZED POSITIONS |
|
Aviation Operation and Maintenance Fund |
$92,050,327 |
473 |
|
Passenger Facility Charge Fund |
16,808,204 |
0 |
|
Customer Facility Charge Fund |
75,522,050 |
0 |
|
Capital Projects |
133,906,880 |
0 |
|
Total |
$318,278,461 |
473 |
The San Antonio Airport System is comprised of the San Antonio International Airport and Stinson Municipal Airport facilities. The San Antonio International Airport serves as a gateway for residents and visitors who are conducting business, visiting other locations or enjoying our City as a leisure or business destination. The mission of the Aviation Department is to innovatively manage our airports to provide a positive customer experience while supporting economic development.
The Airport Operations & Maintenance Fund is an enterprise fund that supports airport operations and debt service expenses entirely through user fees paid by airlines, passengers and other tenants who use the airport. Airline related revenues include commercial aircraft landing fees, areas in the airport terminal building leased for ticket counters, office space, and passenger gate waiting areas and aircraft parking areas. Examples of non-airline revenues generated by the airport include parking fees, rental car fees, airport food, beverage, and retail concessions, and lease of other airport buildings and property for uses including aircraft maintenance, flight instruction, and hangars.
The Aviation Operation and Maintenance Fund FY 2017 Proposed Budget includes $273,303 in improvements and adds five positions to provide resources for operations, air service development and capital project management.
The Aviation Department recommends a parking rate increase of $1 dollar for the short term and the long term parking garage maximum daily rate. With this increase the short term maximum parking garage rate would increase from $24 to $25; and the long term maximum parking garage rate would increase from $11 to $12 per day. These increases would be effective April 2017.
EMPLOYEE HEALTHCARE BENEFITS & COMPENSATION
The FY 2017 Proposed Budget includes funding for increases to civilian compensation including ongoing maintenance of the Step Pay Plan, a 1% cost of living adjustment, and performance pay for Professionals, Managers, and Executives. Also included is a cost of living adjustment for civilian retirees equivalent to approximately 0.5% of their annuity, consistent with TMRS rules.
Healthcare Benefits
Active Civilian Employees As the cost of health care continues to increase, the City continues to offer employees a choice in health plans to best meet their individual needs. The City is self-insured for health benefits, meaning the City and employees share all health care costs.
For 2017, employees will continue to have the option of participating in one of two Preferred Provider Organization plans, Consumer Choice and Value.
For those in Consumer Choice, the City will again provide a $500 contribution ($1,000 for family) to an employee’s Health Savings Account (HSA). The Consumer Choice plan continues to promote consumerism and encourages employees to take a more active role in managing their health care - placing more of their health care decisions in their hands. The plan will continue to have premiums lower than the other health plan options. Internal Revenue Service (IRS) approved maintenance drugs covered under the Consumer Choice plan will continue to be exempt from the deductible.
The FY 2017 Proposed Budget includes premium increases for both plans. There are no recommended plan design changes to either the Consumer Choice or New Value plans. Additionally, there are no plan design changes proposed for the dental or vision plans.
Uniform Police Employees As reflected in the Collective Bargaining Agreement approved by City Council on September 1, 2016, Police uniform employees will be offered two health plans effective January 1, 2017.
Uniform Police employees participating in the Consumer Directed Health Plan (CDHP) will receive $1,500 as a contribution from the City in their Health Savings Accounts. Like the Civilian Consumer Choice plan, the Uniform Police CDHP encourages Uniform Police employees to take an active role in managing their health care. The Uniform Police CDHP Plan is a high deductible plan, and covers 100% of all participant and their family member premiums.
The Uniform Police Value Plan provides a lower deductible option that will also cover 100% of the premiums for each Uniform employee and the police officers will pay premiums for their dependents.
Firefighter Healthcare The firefighter’s healthcare reflects the Evergreen Clause of the Collective Bargaining Agreement that expired September 30, 2014. Firefighters currently do not pay premiums for themselves or their dependents. The annual deductible is $250 for an individual or $500 for a family. The Out-of-Pocket maximum is $500 for an individual and $1,500 for families.
Retiree Civilian Benefits The City remains committed to providing health care insurance for retired City employees. Non-Medicare eligible retirees are eligible for the same health care plan options as active civilian employees, including Consumer Choice PPO with a health savings account and Value PPO. Health care benefits are also provided to Medicare-eligible retirees through a Medicare Advantage plan. The FY 2017 Proposed Budget includes a 0.5% increase for retiree civilian benefits for ad hoc COLA. The FY 2017 Proposed Budget includes premium increases for CDHP and Value plans.
Civilian Employee Compensation
Cost of Living Adjustment The FY 2017 Proposed Budget includes a 1% cost of living pay adjustment for all permanent full-time and part-time civilian employees, effective October 2016.
Step Pay Plan Maintenance The FY 2017 Proposed Budget includes a Step increase of 2% to 4% for eligible employees. The Step Pay Plan addresses market-competitiveness ensuring equitable employee pay within each job for non-professional, non-managerial employees. The Step Pay Plan was developed with input from the City’s Employee Management Committee (EMC), which is composed of City employees, employee associations including Service Employees International Union (SEIU) and the National Association of Public Employees (NAPE), and City management staff. Employees will move annually through the range and reach the maximum of the pay range at step 10.
Performance Pay The FY 2017 Proposed Budget includes funding for performance pay for Professionals, Managers, and Executives as a method to reward strong performance through base salary increases. Employees hired before April 1, 2016 will be eligible and increases will be based on performance evaluations. A total of 3% of salaries has been allocated for performance pay.
Federal Overtime Mandate On December 1, 2016, new federal overtime regulations take effect which increases the current minimum salary threshold, established by the Department of Labor, to be exempt from overtime from $23,660 to $47,476. This change affects 4.2 million workers in the United States and approximately 1,300 positions in 172 unique jobs at the City of San Antonio. The Human Resources Department consulted with each impacted department to educate and estimate current overtime usage. The review resulted in three major strategies to mitigate the impact: increase wages to maintain eligibility for current overtime exemptions; utilize alternative approaches (alternative work schedules, redistribution of work); and consider overtime based on estimated hours worked in excess of 40 hours per week. The estimated FY 2017 impact of the federal overtime mandate is $2.4 million of which $1.7 million is included in the General Fund, and $734,000 in restricted funds.
Uniform Employee Compensation
On September 2, 2016, City Council approved a Collective Bargaining Agreement with the San Antonio Police Association. The FY 2017 Budget includes compensation increases consistent with this agreement: a 3% Lump sum payment, $400 in additional clothing allowance, 3% Longevity for eligible employees, 2% step for eligible employees.
Fire The FY 2017 Proposed Budget reflects the Evergreen Clause of the Firefighters Collective Bargaining Agreement that expired in September 30, 2014. There are no wage increases included in the budget. Longevity and Step increases for eligible employees as per the Evergreen Clause are included in the budget.
Fire Uniform compensation in the FY 2017 budget is consistent with this agreement.
Employer of Choice
The City strives to be an employer of choice. The following policies will become effective October 1, 2016:
Parental Leave (for Civilians) Currently the City offers maternity leave through our Short-term Disability benefit. This benefit provides the birthing parent with paid leave to allow for the medical recovery after childbirth. The proposed parental leave benefit would provide paid leave for both the birthing and non-birthing parent for the birth or placement of child for adoption. Highlights of the program include:
• 6 weeks for both parents to be taken on a continuous basis
• Employees eligible upon hire
• Parental leave runs concurrent with Family and Medical Leave Act (FMLA) protected leave
Wellness and Education Leave (for Civilians) To support employee wellness as well as involvement in their children’s education, this program would introduce a new leave category, Wellness and Education leave. Similar leave has been proposed by the federal government 6 times in last 15 years without success. Employees would be awarded 24 hours of paid leave for the following uses:
• Scheduled wellness visits for self and immediate family;
• Attending school-related functions for dependents (parent-teacher conferences, school programs, etc.);
• Registration and enrollment-related activities for the employee to attend college or trade school courses
Tuition Reimbursement Program The FY 2017 Proposed Budget expands the current civilian tuition reimbursement program to include trade and technical certificate programs from accredited institutions. This enhancement would provide employees in entry wage positions the opportunity to enhance their job skills and marketability without having to pursue a degree.
HEMISFAIR PARK AREA REDEVELOPMENT CORPORATION
In 2009, the City Council established the Hemisfair Park Area Redevelopment Corporation (HPARC), a local government corporation appointed to manage and revitalize the Hemisfair area. HPARC is governed by an 11-member board of directors appointed by City Council. In addition to the 11-member board, the City of San Antonio has one ex-officio, non-voting member consisting of the City Manager or her designee. Since 2009, the City of San Antonio has funded the staff and operations of HPARC through various agreements.
The FY 2017 Proposed Budget includes $1,687,000 for HPARC for operations to assist in the development and redevelopment of HemisFair and its surrounding area by promoting economic development and stimulating business, housing and commercial activity.
ALTERNATIVES:
This item is a scheduled worksession for the FY 2017 Proposed Budget.
FISCAL IMPACT:
This presentation provides a briefing on the major initiatives within Aviation, Smart Cities, and Employee Healthcare Benefits and Compensation. The FY 2017 Budget is scheduled to be adopted by City Council on September 15, 2016.
RECOMMENDATION:
This item is a worksession for discussion of the FY 2017 Proposed Budget and is for briefing purposes only.