2010 Proposed Budget City Council Meeting October 5, 2010 2011 - - PowerPoint PPT Presentation
2010 Proposed Budget City Council Meeting October 5, 2010 2011 Proposed Budget Purpose of this presentation is to provide an overview of the proposed 2011 budget and the timeline for approval. Will briefly cover: Budget overview
October 5, 2010
Budget overview
Priorities
Effect of weak economic environment on each fund
Revenue highlights
Operating expenditure highlights
Capital commitments & new projects /purchases
Reserves
Five separate budgets; some costs are allocated (staff, insurance)
General Fund
Decreasing revenue in the general fund and cost inflation are being offset by personnel expense reductions, achieved through staff attrition and continued salary freezes.
Reviewing other areas for operating efficiencies and cost reductions, assessing needs vs. wants & cost/benefit analyses, consequences of non-compliance with accepted practices, etc.
Water Fund
No major changes
Development fees are not sufficient to cover debt service; expect rate increases
Sewer Fund – No major changes
SteamPlant – No major changes
CTF – Building reserves for future projects
Reduce operating expenditures without major disruptions to short- or long-term service levels
Maintain properties and infrastructure; improve streets
Comply with regulatory & safety standards
Expand / enhance trails and recreation amenities (mostly completion of previously approved grant projects)
Manage / improve (where necessary) fund reserves
General Fund
Sales tax (most significant general fund revenue stream) continued to decline in 2010; projecting no growth in 2011
Expect continued decrease in revenue generated by fees for services
SteamPlant
Operating growth and community support are a financial challenge.
Water Activity Enterprise Fund (Water & Sewer Operations)
Construction industry slowdown equates to minimal development revenue that is not sufficient for debt service and capital projects.
Slow growth also equates to slow growth in operating revenue
Sales Tax - $4.5 million (74%) of total GF revenue
Capital – 31% of total revenue
$1.5 million (81%) from city sales tax allocation
$243,000 (13%) from grants
$112,000 (6%) from occupation tax on lodging
Operating – 69% of total revenue
$3.3 million (78%) from city sales tax, allocation of county sales tax, occupation tax on lodging and franchise fees
$370,000 (9%) from fees for services (pool, park rentals, vital statistics, permit fees, etc.)
$367,000 (9%) from intergovernmental grants & revenue sharing (vehicle registration fees, South Ark Fire District, etc.)
$168,000 (4%) from licenses, fines, interest and misc
Capital – $1.8 million
Financing obligations for previous streets projects, hot water line improvements & Touber Bldg (45% of capital spending)
New projects / purchases such as street improvements and equipment purchases (34% of capital spending)
Completion of projects already underway or previously committed to (21% of capital spending)
New Projects / Purchases:
Streets overlay project
Culvert replacement / pans
Replace traffic signs (regulatory compliance)
Airport runway surfacing (grant match)
Picnic tables
Life / Safety equipment
Carry-over:
Hot water line replacement / pool upgrades (grant match)
Milk Run trail (grant match)
Safe Routes to School (grant match)
Unique Theater remediation
Debt service:
Increased due to final year of 1998 sales tax bond
General Fund Operating Expenditures of $4.2 million
$2.9 million (70%) for personnel
Reduced $200,000 from the 2010 budget
Headcount reduced by two full-time employees
Eliminated raise pool in 2010 budget amendment; salary freeze continues into 2011
54 full time employees with benefits; 40 – 50 part time / seasonal employees
Nearly $2.3 million in salaries and $700,000 in taxes and benefits
Employee insurance increase budgeted at 15%
Remainder spent for supplies, utilities and other purchased services, insurance and community support
$- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 2006 2007 2008 2009 2010E 2011E Other Parks & Trails Pool & Recreation Public Works Fire Police & Municipal Court Community Development Administration & Gen'l Government
SteamPlant
Revenue of $194,000, representing an expected increase of 17% compared to 2010 expectations.
Revenue increase will come from rate increases; number of events projected to be flat.
Total revenue is projected to decrease due to reduced expectations for donations and partner support.
Operating revenue is expected to increase approximately 25% compared to the 2009 / 2010 level due to rate increases.
Total expenditures of $293,000, represent an expected decrease of 4%.
Reduced subsidy from general fund planned for 2011 ($99,000)
Water
Operating and capital revenue of $1.2 million, an expected increase of 3%.
Operating expenditures, debt service and capital upgrades require over $1.6 million in 2010.
2011 shortfall to be provided through debt approved in 2010 to be fully drawn down in 2011 upon completion of water system improvements at the Galleries.
Rate study to be completed to address financial needs.
Sewer
Operating and capital revenue of $1.3 million, an expected increase of 4%
Operating expenditures of $755,000, a 14% increase due to
Debt service and costs for plant upgrade are estimated at $8.5 million.
General Fund – Rebuilding available reserves
The 2011 budget shows essentially no change in total reserves; the unreserved fund balance will increase due to use of debt reserves for a portion of the final payment of the 1998 sales tax bonds.
Fund balance will increase $200,000 to $300,000 during 2010, barring unforeseen financial events.
Final audited results for 2009 reflect a $1.4 million fund balance decrease from paying off the Vandaveer land purchase debt ahead of schedule, depleting capital reserves.
TABOR emergency reserve and Salida’s incremental “contingency fund” of 15% of operating budget maintained.
Water Department – Action Needed
The 2011 budget and 2010 projections included in this budget package do not resolve the pending financial insolvency for water operations.
Unrestricted net assets of $300,000 as of the beginning of 2010 will be nearly depleted by the end of the year.
A rate increase (after completion of a rate study) should be anticipated in 2011.
Sewer Department – Being used as planned
Reserves built up in recent years for the plant upgrade are now being used; balances depend on the project timing.
Conservation Trust Fund – Increasing $38,000
Long term solution to budget shortfalls
Sales tax revenue is unlikely to keep pace with cost increases from inflation and regulatory requirements.
2011 budget balanced through staff attrition; this is not sustainable without a reduction in services or real changes in how we deliver services.
Water rates and development fees / volumes are not meeting financial needs
Timeline:
October 15 deadline met to present proposed budget
Public hearing scheduled for November 2
Plan to adopt budget and appropriate funds on November 16
Budget available to public at City Hall