Presented by Salvatore J. Panto, Jr. Mayor Work in Progress? BIN: mam nr?munxm-z City of Easton Northampton County PA Mayor Salvatore J. Panto, Jr. Members of City Council Ken Brown, Vice?Mayor Sandra Vulcano Roger Ruggles David O?Connell Jim Edinger Peter Melan City Clerk Rita Messa City Controller Chris Heagele City Administrator Luis Campos Deputy City Administrator/Director Public Works David Hopkins Mayor's Cabinet Mark Finance Stephen Norowski, Planning and Codes John Kingsley, Community and Economic Development Carl Scalzo, Police Chief Frank Caruso, Information Technology Stephanie Weber, Human Resources CITY OF EASTON 2021 BUDGET A WORK IN PROGRESS Presented by Mayor Sal Panto October 1, 2020 I would like to welcome you to this virtual presentation of my proposed budget for 2021. Hopefully, this is the last time it will be delivered like this. i want to thank City Council members for the opportunity this evening to give an overview of our proposed 2021 budget. As we gather each year, we discuss the most important policy document in city government -- the budget. it is the annual budget that converts our values into investments, our goals into plans and our dreams into realities. The Charter of the City of Easton requires the Mayor to present their budget on October ?lSt of the previous year. This is an early date in normal times and this evening it is even more difficult given the current situation of our economy. This message comes amid a time of great change as our country faces a new normal in the wake of racial inequality, and the recent flooding along the Bushkill Creek. Fortunately, we are not dealing with some of the environmental issues like hurricanes and forest fires like the south and west. I am very proud to have been raised and live in Easton. The vast majority of our residents have always come together to fight the injustice of racial inequality. Our collective resilience and commitment to help each other will carry us through these difficult times as we focus on critical steps to create a more equitable future. Our city benefits from bringing together citizens from all diverse backgrounds regardless of race, ethnicity, age, religion, gender, and economic status with the purpose of healing, learning, building relationships and growing together. Our diversity is our strength. The soul of our City is deeply rooted in a history that has evolved over thousands of years; rooted in a diverse people who have been here together every step of the way. To that end, there are funds appropriated to provide for the historic markers that Councilman Ruggles has recommended. I support this effort. We are truly a city of many nations, a melting pot of many cultures. We truly exemplify the phrase pluribus unum out of many we are one. It is an understatement to say we live in unprecedented times, but that is truly where we are at this moment. Years from now when we reflect on 2020, the pandemic created by will be remembered as the moment norms were shattered, the economy stalled to a level not seen since the Great Depression and our view of the future seemed a bit more in question. In Easton we have responded to the call. Our Administration moved quickly to take the steps to protect our residents and employees from the effects of the pandemic. We partnered with others to provide relief for small businesses and displaced workers directly affected by the economic crisis created by the pandemic. We stood as a committed partner in the national call for social justice. As Easton has led during these critical times, we have also found ourselves in a very similar situation as cities across the state and our nation. The National League of Cities estimates the economic impact of the pandemic has created a $360 billion shortfall for cities through 2022. Our economic outlook is directly connected to a crisis that currently has no defined end. A survey of more than 2,100 cities by the National League of Cities and US. Conference of Mayors finds 70% of cities are preparing to cut critical public services. We drastically cut operating budget, capital improvement projects, furloughed 81 employees, while always maintaining our levels of public safety. We are meeting and collaborating remotely, making daily use of video conferences, screen sharing and conference calls. Zoom, Skype and Teams have been added to our vocabulary daily. While these methods remove some of the personal interaction and opportunities for spontaneous conversation, staff have nonetheless displayed impressive problem solving in furthering the City?s business. We never stopped working FOR EASTON. As we work over the next two months to develop this budget, I hope you?ll join with me and express our thanks to the outstanding people of our city government, from front-line employees to department heads, who labor diligently every day, to keep Easton not only functioning but thriving. I want to thank all the community members as well who participate in authorities, boards and commissions and keep meeting during this pandemic to further our city?s goals and objectives. These are unprecedented times. Our city has not been immune to the global economic impacts of the health pandemic. However, thanks to smart planning during previous years we have been able to mitigate many of those impacts, keep fees stable for our residents, and still maintain healthy fund balances for any other unforeseen circumstances, such as we are experiencing. In 2008 we started adding to our rainy-day surplus funds. We took them from deficits to surpluses. This year it poured! But we didn?t tap into our reserve funds but I was nice to know they were there if needed. Our reserve funds are stable, increasing and were not considered in balancing this proposed budget at this time. Those funds are not at their targeted balance and may be needed if another round of sweeps our country. We have kept Council Members informed. has forced a seismic disruption in our economy, and as a result, our city?s finances. Easton has seen a steep decline in revenue during this pandemic; particularly from unemployment taxes, amusement taxes, casino revenue and parking fees with so many businesses closed for three and a half months and some still closed. Mandated closures to stop the spread of have led to an increase in unemployment filings as small businesses still struggle to stay afloat. While we still navigate many unknowns, one thing is absolutely clear the pandemic continues to have a devastating impact on City finances and may through the next two years. Undoubtedly, we have a fiscal mountain to overcome. has caused the city to lose approximately $5.5 million in revenue for this year and has creates a huge hole in next year?s budget. Add to that a $1 million increase in our pension MMO and more than a half million dollars in trash contracts and this budget was never looking good. Fortunately, most of our City Council approved our financing plan that was recommended by our Financial Advisors. Historic MMO Trend 54.0 53.0 lF're 5m IPolice 51.0 S- 2016 2017 2018 2019 2020 2021 For the one Council Member who chose to vote against the re-financing plan I will be interested in hearing how he will propose balancing the budget for this year and next year. This year's gap would be $1 .3MM and next year?s hole would be more than $1 .6MM. You cannot vote against something that may seem to be politically popular without offering a solution to the financial crisis contributed to Prior to Easton had experienced unprecedented growth over the past decade and enormous economic gains, however, like all communities, Easton is facing a mix of knowns and unknowns. From a fiscal planning perspective, we know that global economies are in flux and likely headed toward a signi?cant economic contraction and that local, state, and federal government revenue growth will slow. is facing a $4 billion shortfall. Easton is well positioned to confront this uncertainty, but not immune to its effects. Conversely, we do not know how long the immediate public health measures will remain in place, how long will it take the local and national and global economy to recover, and how state governments and the federal government will react to their new fiscal realities. But our commitment to growing our fund balance and historic low interest rates has positioned us in a way that we can present our 2021 budget without the drastic increases originally anticipated. Historic MMO Trend I I I I I - 54.0 (3&5 53.0 I 52.0 I Police SLO 2016 2017 2018 2019 2020 2021 In ox 0 Even with budget shortfalls, our Administration is still working to provide residents and businesses with financial relief, which took shape with property tax deferments; delays in business licensing fees; free daily parking; cancellations of penalties and interest on late utility bills; and others. These fiscal decisions were a bene?t to hard hit related local businesses and residents, but they have financial consequences for budgets and financial resources. With very little support from the federal government, we had to make tough decisions and strain our fiscal resources. While it is true that the City received CARES money from the Federal government through the County, these funds were for direct expenses. Even the money that we thought we were going to receive for police and fire, and was originally included in this budget, was denied on Tuesday afternoon. The National League of Cities and the United States Conference of Mayors have been calling on Washington to help cities of all sizes with federal aid to supplant their revenue shortfalls but to date the federal government?s silence has been deafening and I am not hopeful. There is one last chance with Congress debating another round of stimulus. The global pandemic is taking a toll on everyone, and the City of Easton is no exception. As we look toward the new year and how to budget for the City?s priorities, we are facing significant reductions in several key revenue streams, increases in selected expenses and concerns for the long term effects on property tax revenue, intergovernmental revenue and development fees. Almost every revenue source is affected by the shutdown of nearly every aspect of economic activity within our community. The good news is in our economic deveIOpment success; next year we will see another increase in our taxable prOperties. However, our real estate taxes do not cover the cost of our police and fire departments. 525.0 Total GF Police and Fire Costs vs RE Taxes 15 .0 ?7 - .AA w. 510-0 7 550 i ggl? 2012 2013 2014 2015 2016 2017 2013 2013' 2020 3121 Bud A strong economy, a growing diverse p0pulation, a cultural and social base are necessary to maintain and continue to improve our strength as a city. The 2021 budget is a key process and an agenda- setting statement of the creative and innovative efforts needed to secure Easton's future as a quality place to live, work, and raise our families. The budget allows us to continue to follow-through on the ?clean and safe? commitments to the residents and businesses of Easton. 2021 will continue to be a year of construction expanding our tax base, including The Mill at Easton with 55 affordable housing units, The Seville, Hearst, the Townley micro-hotel, a parking garage and more. Our public investment will continue primarily through grants and the capital fund. These include: - Final design of the Centre Square Park improvements, traffic patterns have a May 2021 let date from PADOT and we will have a public input session on Wednesday October 28th - The feasibility and design work for the downtown "ring? road? 2? -way conversions - Secure remaining grant funds for the investigation and feasibility of a new Lehigh River Pedestrian Bridge that will connect Scott Park to Delaware Canal State Park - Complete design for improvements to the Wood Avenue corridor connecting the Northampton Street business district with the blossoming 13th Street Corridor I Investigate dedicated bicycle lanes connecting the west ward with the downtown and Trail - lmplement MS4 Best Management Practices to remain compliant with the City?s performance goals - Complete demolition and environmental remediation of the Easton Iron and Metal Property . Design and Construct $1 million Cattell Street Corridor safety improvements - Complete design of Bushkill Corridor pedestrian improvements including the rehabilitation of the former railroad bridge connecting the KSAT to the property Complete Phase I of the City-wide wayfinding signage program Complete bid process and begin construction of proposed 4th Street Garage and Urban Plaza Complete reconstruction of sanitary and stormwater pipelines Complete 13th Street Corridor pedestrian improvement project Feasibility study to investigate methods to provide for traffic calming, including bike lanes, on the St. John Street Corridor from our southern border to the downtown. - Complete 8. Sitgreaves improvements and pedestrian installation .. lmplement Bikeshare program - Complete Hackett Park improvements program including new bicycle trails, pavilion improvements, athletic field improvements, and restoration of the historic lighting - Continue exploring possibilities to create an improved Lehigh River waterfront to connect to existing Delaware River waterfront . Continue conversion of existing streetlights to LED - Re-lamp 1/3 of existing LED traffic signal heads - Complete structural design and improvements of the 500 complex maintenance building 0 lmplement urban forestry planting and maintenance goals as well as continued work with state and federal agencies on integrated pest management Spotted Emerald Ash Borer, etc. As this budget was prepared, the community faced the challenges of curbing the spread of the coronavirus, but we are ever hopeful for our future because the City?s economy was quite strong before the pandemic. We look forward to next year as we ask our Champ, Larry Holmes, to knockout 2020. My personal goal is to continue to provide strong leadership for our city at the local, state and federal levels and to provide the direction and support for the our Directors, Supervisors and employees of the city by creating an environment that empowers them to do their best. will always work hard to encourage a culture of continuous improvement that results in the best possible of service for Easton?s residents. Suffice it to say that our employees, volunteers, partners and city council leadership are performing such great work for this community. This budget reflects our Administrative team?s commitment to maintaining a high level of public services at a rate to our residents that is stable and not increasing. The future for the City of Easton is exciting, challenging and filled with opportunity. I firmly believe that we can continue to meet the needs of our community while maintaining an efficient, cost effective city government. I appreciate the City Council review and ultimate approval of this budget it is truly a ?work in progress? which will require constant updates during the review process. We are ready to provide whatever information you may require. There aren?t many highlights to identify in next year?s budget. As the graph below indicates, our proposed 2020 budget is less than the 2018 and 2019 budgets. The largest decreases in revenue anticipated comes from the same budget lines as this year?s related Revised Budget, namely Admission Tax, Casino and Parking revenues. Amusement and Casino We are projecting a 2% decrease in Earned Income Tax but that represents approximately a 5 to 6% decrease because we normally experience a 3% inflationary increase. Building permits are budgeted at a $28,250 decrease in anticipation of a few projects being delayed to 2022. For budgetary purposes we are maintaining revenue from parking meters to be the same as we proposed in 2020. The same holds true for most of the other line items affected this year. Given the aggressive housing market in our area, we are proposing to keep line items associated with the real estate market level for 2021. Trash fees and sewer fees are budgeted at a 2.3% decrease for sewer and level for trash as this budget proposes no increase in either service to our residents. Unemployment in the City has not seen a significant decrease as of today. We have had a three-fold increase this year from January?s 6.9% to a current rate of 18%. Chart View Full Chart [Edi 10y Max; _Export Data Save image Printlmage For advanced charting, View our full-featured Fundamental Chart 2000?": 1% . 2: 2015 2017 2013 2019 2029 Historical Data The most significant part of the revenue side of the budget is the impact of the Financial Advisors recommendation of the ?Scoop and Toss.? This refinancing of our debt at a lower interest rate and a longer term will save $2.6 million this year and another $1.3 million in 2021. My recommendation, as laid out in this budget is to use half of the savings in 2021 to assist in the 2022 budget. Council has approved that a portion of the revenue gap created by will be financed and our recommendation, as outlined in this budget, is that the savings be spread over the 2020, 2021 and 2022 budgets. General Fund Proposed Sources of 2020 Revenues mum On the Expense side there are positions that will not be filled in 2021 as well as capital projects that will be delayed. Positions not included in next year's proposed budget include: Second Assistant Solicitor Assistant City Clerk Recreation Director one police officer two firefighters (March Academy) Finance Clerk Utility Billing Clerk Second Clerk?s position Zoning Officer (July start) Part time Health Officer (July start) Assistant Engineer (July start) Part Time Garage Attendants Waste Water Operator All Summer Employment Council will also note an overall decrease in allocations to outside agencies. These decreases are consistent with the decrease in revenue and include allocations to groups like The Miracle League, Heritage Day and the Greater Easton Economic Development Corporation (GEDP) which is reduced by 10% or $30,000. Travel, meetings, and training have also been reduced. Legal fees in Human Resources is considerably higher (272%) as we anticipate the need to arbitrate the police and fire union?s Collective Bargaining Agreement, both of which expire December 315?. Neighborhood road reconstruction was moved from the General Fund to the Highway fund utilizing the State Highway Aide fund. As Council will recall, fire department overtime in 2019 was $1.3 million. This caused the city to incur a deficit in the year end audit for the first time in more than a decade. Through financial restraint we were able to absorb most of that amount and the final audit indicates a deficit of $420,000. For next year we are anticipating a firefighter overtime budget of $500,000. With the hiring of the three additional firefighters we lowered our August YTD amount to $272,000 this year versus $798,000 which was August YTD 2019. The budget of $91,000 remains level for clothing and supplies as we have new hires and the potential hiring of part time firefighters. We are also have several firefighters and police officers out on work-related injuries, and we expect to have several retirements by the end of this year or the beginning of next year. A note about Life Insurance line items. The premium was accounted for in a different line item, so it appears to have had a huge increase but in reality the $201,000 premium was only booked at $31,000 across the line items instead of the full $201 ,000. The balance was booked in another insurance line item so there is no impact on the General Fund budget. General Fund' Proposed 2020 Expense Uses Other Bene?ts 5.5936 Discretionary 2.34% Pension Debt 5.85% This proposed budget is balanced primarily by following the advice of our Financial Advisors. To summarize that plan, we will be refinancing our debt taking advantage of the historic low interest rates and providing the capital for the construction of the new Fourth Street Garage and still saving $2.6 million in this year?s budget and the remaining savings of $1 .6 million I am proposing that we ?smooth" that savings over a two year period in what is hopefully a post economy. We are not proposing any increase in the trash fee and will absorb the more than $500,000 increase in the contracts. As we made you aware, the recycling market has changed drastically in the last few years primarily due to the tariffs placed on China. Trash disposal increase of $120,000 Recycling disposal increase of 130,000 Hauling increase of $291,000 The 2021 budget is $300,000 short of being balanced. To meet this gap if revenue don't change, we are recommending a scheduled furlough of 20 working days for approximately eighty staff members next year. Lastly, we will be reviewing our finances throughout the first and second quarter of the new year and if revenues fall lower we may have to offer additional recommendations to Council such as closing pools next summer which is a savings of approximately $100,000 and/or not hiring summer employees. This proposed budget does not affect our fund balance nor does not account for any increase in the FOP or IAFF Collective Bargaining Agreements for next year. Today we reached a Tentative Agreement with the IAFF and I would like to thank them for their cooperation and support during these difficult times. If the AFSCME union is interested in lowering or even eliminating our proposed furlough days, we are willing to open their contract and re-negotiate terms to save the $300,000 in other ways that they may be able to recommend. Year End Fund Balances i 58.0 IDeb:5Inim I Run-rim Hulxh :Insunn? Gm-Jl Fund i i i 2009 2010 2011 201.2 2013 2014 2015 2016 2017 2018' This is our PROPOSED budget for next year. As I indicated in the beginning, this proposed budget is a ?work in progress? because our finances are changing every day. It will change several times before being adopted by City Council. Our current budget is like a moving goal post. We normally base next year?s revenue on historic data; but these are not normal times. We are forecasting next year?s revenue through our ball, and it has a crack in it. At every budget meeting we will give members of council the most up to date numbers for this year. We hope that the revised budget we presented to City Council earlier is conservative in estimating our revenues and we hope that the revenues acquired are more than anticipated. Sincerely, Salvatore J. Panto, Jr. Mayor CITY OF EASTON 10/1/20 Elected Appointed Of?cers The City of Easton?s residents are represented by a set of elected and appointed officers Mayor, City Council, City Controller, City Clerk, and City Solicitor. Mayor The Mayor is the Chief Executive Of?cer of the City of Easton, the Chairperson of Council, and the City?s chief elected official. There are no major changes proposed in the Mayor?s Office budget for 2021. City Council The City of Easton?s legislative body is City Council. As de?ned by the City Charter, the Mayor is the chairperson of Council. Besides the Mayor, city residents are represented on Council by 6 Members of Council. Three Members of Council are elected on an at?large basis; three are elected from districts; all are elected to four year terms. The budget for City Council includes only expenses as the Council does not recognize any revenue. The expense budget includes salary, benefits, and limited expenses. The Council budget also includes appropriations for the General Fund audit and a grant program for special events as well as the yearly City audit. There were no major changes in this budget between 2020 and 2021. City Controller The City of Easton?s finances are reviewed by the City Controller. The City Controller is elected at?large to a four?year term. The budget for the City Controller includes only expenses as the City Controller does not recognize any revenue. The expense budget includes salary and benefits. There were no major changes in this budget between 2020 and 2021 City Clerk? The City Clerk?s office 1s the main liaison between City Council, the General Government, and the public. The budget for the City Clerk includes both revenue and expenses. The City Clerk realizes minor revenue from making copies of records for the general public and also performs the duties of the Secretary to the Health Board. The expense budget for the City Clerk includes salary and benefits for one (previously two) full?time position. The budget also includes limited expenses. There are no other major changes in this budget between 2020 and 2021. 1 CITY OF EASTON 0 City Solicitor The City Solicitor?s office represents the City of Easton in all legal matters. The budget for the City Solicitor includes only expenses as recovery revenue has not been collected in a number of years. The budget for the City Solicitor includes salary and bene?ts for two part?time positions (one fewer than budgeted in the prior year). The budget also includes all miscellaneous legal expenses and a secretarial allowance and other limited expenses for each of the solicitors. There are no other major changes in this budget between the years 2020 and 2021. General Government This portion of the budget funds the management and support services for the City?s daily management operations. Funds allocated to this portion of the budget support the City Administrator?s Office (which includes Purchasing), Human Resources, Department of Finance, and Information Technology. Revenue Highlights In most cases, the 2021 City of Easton Revenue Budget is largely based on prior year audited results, as well as year?to?date (YTD) actual revenues collected in 2020. However, some revenue line items show large deviations from prior years. This is due to the ongoing uncertainty of the COVID pandemic and its impact to the local economy. A presentation of those line items is listed below for your information and review: 0 Real Estate Tax Collection The historical collection rate of 97% was assumed to hold for 2021. Over the last several years, the City of Easton saw, on average, slight increases annually but given the as?yet unknow impact of a year?over?year decrease is assumed for purposes of this budget 0 Per Capita Tax This account saw no change, year?over year Earned Income Tax 85 Non-Resident EIT Has seen an average 3% annual increase over the last few years. However, the proposed 2021 budget has conservatively decreased this line item by of the anticipated 2020 final revenues, causing a net decrease of approximately To provide additional history, in Aug 2012, City Council approved a non-resident earned income tax to directly help offset the City?s escalating pension obligations 0 Real Estate Transfer Tax This account saw no change, 2 CITY OF EASTON ESWA Lease Payment Increases by 2% per our lease agreement with the Easton Suburban Water Authority (ESWA) Casino Revenue Dropped by versus original 2020 budget Amusement Tax Decrease of BPT Decrease of Permit Fees Code permit fees are budgeted to increase in 2021 as construction continues (overall, remains at record highs) M84 ?2021 budget includes fund created in 2019 to account for Federal stormwater clean?up requirements; unchanged Sewer The 2021 budget includes the recently created sewer service fund (808), which was set up in 2020. Sewer charge revenues previously re?ected in General Fund (101) will continue be redirected to this new fund Reserves the aforementioned revenue shortfalls, which continued from 2020, were the basis for the CoE?s debt restructuring in late 2020. The savings from this action are being partially used to offset the projected revenue shortfalls in 2021; the balance of said funds to be placed in reserves. Expense Highlights Overall, this year?s budget includes two signi?cant increase in expenses. Below are several notable highlights: Minimum Municipal Obligation (MMO) due to the growing outstanding liability of our pensions, our payment is going up by over 1M Trash hauling, recycling and landfill the combined increase of the sanitation expenses is up 46% Human Resources legal expenses anticipated for binding Act 111 arbitration with Fire and Police Furlough in addition to using reserves to cover shortfalls, a furlough is included for 2021 to reduce expenses as a result of anticipated revenue shortfalls Capital Budget (Fund 151) the following items, among others, were incorporated into the capital budget for 2021: 0 Partial repayment of financing of 185 S. 3rd St 0 Centre Sq improvements 0 Building repairs 0 Sanitary sewer repairs CITY OF EASTON 0 M84 Expense (Fund 265) includes sewer rehabilitation and lining and providing funds for future capital projects as mandated by Federal regulation 0 Sewer as noted above, several expenses previously re?ected in General Fund (101) will continue to be redirected to this new fund Public Safety This portion of the budget covers the cost of operations for the Police Department (including Traffic and Parking) plus the Fire Department. Public Safety represents the largest portion of the City?s operating expenses. These departments play a major role in providing a clean and safe environment for all residents and visitors. Revenue Highlights As a result of the implementation of the the 2021 budget includes an increase in parking ?nes. Expense Highlights Two additional police officers and three fire?ghters were proposed in the 2021 budget with staggered start times, depending on the timing of the respective academies. Department of Planning and Codes The Planning, Zoning, Codes, and Health bureaus work closely together to oversee the enforcement of city codes, city zoning regulations, health and future development planning in the City of Easton. The department assists in the Finance Department?s collection efforts by ensuring that all licenses are obtained and fees are collected. Revenue Highlights The City continues to see a steady increase in building and permit fees, with the several large?scale projects anticipated to begin in 2021, all of which is re?ected in the proposed budget. CITY OF EASTON Expense Highlights In support of the anticipated building permit activity noted above, the Codes department?s budget includes a slight increase in engineering and architectural services. Department of Economic Development The Economic Development Department leads the City of Easton and the coordination of other affiliated organizations in encouraging investment in development, opening of new businesses and the expansion of existing businesses and redevelopment of commercial property. Revenue Highlights The Economic Development budget does not include significant revenues. Expense Highlights The Economic Development budget includes as the City?s contribution to the Greater Easton Development Partnership (GEDP). Public Works The Department of Public Works is primarily responsible for managing the City?s physical assets and infrastructure. The Department has over 100 employees in a variety of functional areas that consist of engineering, parks, streets, municipal buildings and parking facilities, wastewater treatment, underground utilities, ?eet management, trash 85 recycling, recreation, and urban forestry. The 2021 proposed Public Works budget will continue to focus on investment in highway and sewer infrastructure and will continue to collect a stormwater fee for all property owners to help cover the costs of compliance with the newly enacted federal stormwater regulations. Revenue Highlights The proposed 2021 budget re?ects a decrease in parking revenues from the City?s two garages CITY OF EASTON Expense Highlights Overall, the 2021 budget includes an increase, driven primarily by a 3% increase for wages and salaries for union employees. Operational Funds The City of Easton has 13 Operational Funds, including the newly prOposed Sewer Fund, which are used to manage the revenues and expenses of discrete City operations including self?insurance, certain grant monies, and enterprise operations that require separate accounting. Those funds are: 0 State Highway Aid (Fund 1 11) for road repair. The State Highway Aid Fund is funded by a state grant that is fully funded by liquid fuel purchases in the Commonwealth of Historically, the City of Easton has used these funds to pay for rock salt and the energy required to operate City traffic and street lights. Unlike prior years, the fund is self?sufficient this year, and does not require a General Fund transfer. In fact, the proposed budget includes a minor surplus. 0 Debt Service (Fund 131) The Debt Service Fund is funded by two sources - real estate taxes and transfers from operational funds. General obligation bonds, as well as all bond expenses, are funded by real estate taxes. In 2021, real estate tax collection will be reserved to pay principal, interest, and fees on general obligation note and bond issues. These obligations total including the re?nancing of the loan used to acquire the Days Inn site. The Debt Service Fund is also funded by transfers from three operational funds the General Fund, the Recreation Fund, and the Wastewater Fund. These transfers represent the amount needed to meet the City?s obligations for two pension bonds. In 2021, is required to pay principal and interest on these bonds. - Revolving Capital (Fund 151) The Revolving Capital Fund was created in 2009 to set aside all one?time money received by the into a special fund for capital purchases not appropriate for bond financing. The 2021 budget includes in revenue from the sale 185 S. Third St, which will be used to partially offset the outstanding balance on the loan. In addition, funds are proposed 6 CITY OF EASTON for the purchase of new vehicles, Centre Sq improvements, sewer repairs, etc. Recreation (Fund 202) The Recreation Fund was converted to an operational fund during the 2009 budget season. The fund is used to account for the activities associated with the operation of all City parks, including Hugh Moore Park, as well as our City recreation program. The fund expenses include salary and benefits. As a result of COVID staf?ng levels have been reduced to accommodate for limited activity. If Activity increases staffing will be added. Major expenses in this fund include the operation of our City pools, the utilities necessary to operate City parks, and the incidental expenses that are necessary for park operation. This fund is funded by user fees, such as pool and recreation user fees, a large contribution from the Hugh Moore Part Charitable Trust, and a dedication of real estate taxes. City Hall Fund (Fund 203) The City Hall Fund was created in 2019 to account for the operating expenses of the New City Hall. The fund will be funded by rental income from tenants in the City Hall building. Health Bene?ts (Fund 252) The Health Benefits Fund is used to account for the City of Easton Health Insurance Company. This company receives payments from retirees (in the form of full or partial premium payments), former employees (in the form of COBRA premium payments), and employees (in the form of co? share deductions from paychecks). The fund also receives benefit payments from the General Fund, Wastewater Fund, and the Recreation Fund to pay for the health bene?ts associated with the employees and retirees from those respective funds. Due to plan changes in 2016 85 2020, the budget expense for health care will remain ?at. Property and Casualty Insurance (Fund 253) The Property and Casualty Insurance Fund is used to account for the City of Easton Property and Casualty Insurance Company. This fund receives payments from the General Fund for administration, police, and parking facility liability coverage; the City Hall Fund for building liability coverage; and the Wastewater Fund for plant facility liability coverage. The monies received in premiums are used to pay various insurance premiums as well as deductibles (in the form of claims and legal fees) on our insurance policies. Based on 2020 experience, no major changes are budgeted. 7 CITY OF EASTON Unemployment Insurance (Fund 254) The Unemployment Insurance Fund is used to account for the City of Easton Unemployment Insurance Company. This company receives benefit payments from the General Fund, Wastewater Fund, and the Recreation Fund to pay for the unemployment insurance bene?ts associated with the employees in those reSpective funds. The monies received in premiums are used to pay an insurance premium to the Commonwealth of as well as any uncovered claims. No major changes are budgeted for this fund. Worker?s Compensation (Fund 255) The Worker?s Compensation Fund is used to account for the City of Easton Worker?s Compensation Insurance Company. This company receives benefit payments from the General Fund, Wastewater Fund, and the Recreation Fund to pay for the worker?s compensation insurance benefits associated with the employees in those respective funds. The monies received in premiums are used to pay our worker?s compensation administrator, certain insurance premiums, and worker?s compensation claims. Based on the recommendation of our worker?s compensation administrator, no major changes are budgeted for this fund. Wastewater Treatment (Fund 260) The Wastewater Treatment Fund is used to account for the activities associated with the operation of the Wastewater Treatment Facility, which is owned by the Easton Area Joint Sewer Authority. The fund receives quarterly payments from the Authority and uses those monies to operate the plant. Major expenses of the fund include salary and full benefits for full?time employees, insurance premiums, utility charges, solid waste removal, and an administrative charge to the City of Easton General Government. No major changes were budgeted in 202 1. However, this ?gure may change as the EAJ SA budget is not yet available. MS4/Stormwater Fee (Fund 265) The City of Easton is regulated by State and Federal Agencies through a Municipal Separate Storm Sewer System (M84) permit that is issued by the Department of Environmental Protection (PADEP). The City?s MS4 permit allows the discharge of stormwater from the public conveyance system to the Bushkill Creek, the Delaware River, and the Lehigh River. In addition to maintaining our existing infrastructure, as of January 1, 2021 the City will be required to remove sediment from stormwater as part of new PADEP regulations aimed at improving the water quality of our 8 CITY OF EASTON streams and rivers. This requirement will necessitate the design and construction of new stormwater facilities in order to maintain compliance with new water quality standards. This fund was created to support the Federal mandate described above. Sewer (Fund 808) Following the 2019 review with the administration determined to create a new enterprise fund to re?ect the income and expenses associated with providing and maintaining the City?s underground sanitary sewer system. These revenues and expenditures had previously been captured in the General Fund, with a very small portion in the Revolving Capital fund. Parking Facilities (Fund 901) The Parking Facilities Fund is used to account for the activities associated with the operation of City of Easton parking facilities. The fund receives payments from users of our Spring Garden Street lot as well as our Pine Street Garage and Intermodal Garage. The largest revenue item is daily parking at the Pine Street and Intermodal Garages. All revenues are used for the operation of all parking facilities. Because some of those facilities are operated by the City of Easton and funded by the General Fund, the parking facilities fund makes transfers back to the City of Easton General Fund. While the budget for Fund 901 is not approved by Ciw Council, the budget is an important input in the City budget and is provided for your information. It is expected that this budget will be adopted by the Easton Parking Authority prior to the beginning of 2021. 2021 Budget Summary - By Fund 2018 Final 2019 Council 2020 Council- 2020 Council I - 2021 vs Rvs'd 2021 vs Rvs'd Bud Bud Bud - Orig Bud - Rvs'd - 2020 (S) 2020 FA) Fund 101 - General Fund Revenue 35,291,017 36,325,059 31,373,196 30,263,847 31,332,358 1,068,511 3.5% Expense 35,291,017 3 36,325,059 31,373,196 30,263,847 31,369,858 1,106,011 3.7% Difference - - - - (37,500) (37,500) Fund 111 - Highway Aid Fund Revenue 718.277 701,046 924,569 3 933,869 1,115,879 182,010 19.5% Ex ense 718.277 701.046 924.569 933.869 1,115,879 182,010 19.5% Difference - - - - - - 0.0% Fund 131 - Debt Service Fund Revenue 5,332,529 12,015,085 5,372,079 2,776,030 8 3,960,788 1,184,758 42.7% Expense 3 5,332,529 12,015,085 5,372,079 2,776,030 5,077,553 2,301,523 82.9% Difference - - - - (1 .116,765) 9 (1,116,765) -40.2% Fund 151 - Revolving Capital Fund Revenue 596,516 525,333 1,574,333 1,574,333 3,955,000 2.380.667 151.2% Expense 596,516 525,333 1,574,333 1,574,333 3,955,000 2.380.667 151.2% Difference - - - - - - 0.0% Fund 160 - Revolving Loan Revenue 7.329 3 - 6,000 6 6,000 6,000 3 - 0.0% Expense 0.0% Difference 7.329 - 6.000 6.000 6 6,000 - 0.0% Fund 202 - Recreation Fund Revenue 1,471,213 1,446,102 1,461,216 1,079,468 1,387,765 308,297 28.6% Expense 5 1,471,213 1,446,102 1,461,216 3 1,079,468 1,387,765 308.297 28.6% Difference - - - 3 - - - 0.0% Fund 203 - City Hall Fund Revenue 200,000 175,400 3 125,000 125.000 125,000 - 0.0% Expense 200,000 3 175.400 125.000 3 125,000 3 125.000 - 0.0% Difference - - - - - - 0.0% Fund 252 - Health Bene?ts Fund Revenue 4,415,000 4.415.000 4,415,000 3 4.115.038 3 4,315,000 199,963 4.9% Expense 4,415,000 4,415,000 5 4,415,000 4,115,038 4,315,000 199.962 4.9% Difference - - - 3 - - 0.0% Fund 253 - Fund Revenue 888,506 888.506 888,506 1,138,506 888.506 (250,000) -22.0% Expense 888.506 888,506 888.506 1.138.506 888.506 3 (250,000) -22.0% Difference - - - - - - 0.0% Fund 254 - Unemployment Insurance Fund Revenue 27,070 27,070 - 2.843 5 35 (2.843) -100.0% Expense 27.070 27.070 5 - 2.843 - (2.843) 400.0% Difference - - - - - - 0.0% Fund 255 - Worker's Comp Fund Revenue 483.795 3 483,795 432,534 444.575 437.304 (7,271) 4.6% Expense 483.795 483.795 432,534 444.575 437.304 (7.271) Difference - - - - - - 0.0% Fund 260 - Wastewater Operating Fund Revenue 5,550,636 5,523,709 5,519,975 5,062,914 5,586,304 523,390 10.3% Expense 5,550,636 5,523,709 5,519,975 5,062,914 5,586,304 523.390 10.3% Difference - - - - (0) 0.0% Fund 265 - StonnwaterlMS4 Revenue - 1,315,602 1,335,602 1,302,646 1,301,558 (1,088) Expense - 1,315,602 1,335,602 1,302,646 1,301,558 3 (1.088) Difference - - - - - (0) 0.0% Fund 808 - Sewer Fund Revenue - - 5,371,910 3 5,189,656 3 5,545,918 356,262 6.9% Ex ense 3 - 3 5,371,910 5,189,656 5,545,918 356.262 6.9% Difference - - - - - 0 0.0% Fund 901 - Easton Parking Authority Fund Revenue 1,382,101 1,333,350 1,335,350 628,480 1,230,600 602,120 95.8% Expense 1,382,101 1,333,350 1,335,350 628.480 1,230,600 602,120 95.8% Difference - - - - - - 0.0% Revenue 56,363,989 65,175,056 60,135,270 54,643,204 61,187,980 6,544,776 12.0% Expense 56,356,661 65,175,056 60,129,270 54,637,204 62,336,245 3 7,699,041 14.1% 2020 Included creation of new "Sewer Fund" with majority of revenues and expenses coming from accounts previously in "General Fund" .. 2019 "Debt Service Fund? Budget had assumed payoff of acquisition costs for Days Inn lot; amount re?nanced in 2019 City of Easton - 2021 Mayor's Budget (as of 10/1/20) Fund Dept Title Description City of Easton - 2021 Mayor?s Budget (as of Fund Dept Title Descriptlun 57 13 1-38044 1 City of Easton - 2021 Mayor's Budget (as of 10/1/20) Fund Dept Title Description City of Easton - 2021 Mayor?s Budget (as of 10/1/20) Fund Dept Title Description 1 City of Easlon - 2021 Mayor?s Budget (as of 10/1/20) Fund Dept Title Description City of Easton - 2021 Mayor's Budget (as of 10/1/20) Fund Dept Title Description 101 Item 1 City of Easton - 2021 Mayor?s Budget (as of 10/1/20) Fund Dept Tltle Description 1 City of Easton - 2021 Mayor's Budget (as of 10/1/20) Fund Dept Titfe Description City of Easton 2021 Mayor?s Budget (as of 10/1/20) Fund Dept Title Description Accrued City of Easton - 2021 Mayor's Budget (as of 10/1/20) Fund Dept Title Description City of Easton 2021 Mayor's Budget (as of 10/1/20} Fund Dept Title Description City of Easton - 2021 Mayor's Budget (as of10/1/20) Fund Dept Title Description 111 31 13 City of Easton - 2021 Mayor's Budget (as of 10/1/20) Fund Dept Title Description Insurance 14 City of Easton - 2021 Mayor's Budget (35 of 10/1/20) Fund Dept Title Description 15 City of Easton - 2021 Mayor's Budget (as of 10/1/20) Fund Dept "flue Description