Overview. Past Budget Challenges Forecast the Future

Transcription

1 Overview Past Budget Challenges Frecast the Future A Lk Back Mayr Sullivan tk ffice n July 1, Three mnths later he was required t prpse the Municipality s 2010 budget. What quickly became clear during the budget s develpment was that the Municipality was at an imprtant juncture in its fiscal future. It faced dramatic cst increases in nt nly 2010, but every year thereafter due t labr cntracts negtiated in 2008 by then Mayr Begich. The bttm line was that the increased cst f salary and benefits alne fr 2010 was $12 millin with a cumulative increased cst f an additinal $175 millin ver the next five years. In additin, anther $12 millin had t be paid in 2010 t the Plice and Fire Retirement Trust Fund due t its lss in value frm pr investment perfrmance. Similar extrardinary payments als were expected fr the next 15 years. $600.0 $550.0 $500.0 $450.0 $400.0 $350.0 $300.0 Chart 1. Gap Between Prjected Revenue & Expenditures (in millins) Prjected Revenue Prjected Expenditures 2015 Fr 2010, the ttal cst t cntinue the same level f services (a cntinuatin level budget) increased by $28.6 millin due t increased debt service. Prjected revenue fr 2010 was nt nearly enugh t cver these increases. The same wuld be true every year thereafter even if maximum prperty taxes were cllected each year. Chart 1 illustrates this challenge and identifies the recurring gap between a cntinuatin level f spending and revenue frm 2010 t It was clear that Anchrage didn t have a ne-time revenue prblem; it had a lngterm spending prblem. Fr 2010, the Mayr prpsed and the Assembly apprved $19 millin in spending reductins against a cntinuatin level budget and limited prperty taxes t a 2.13% increase. General Gvernment s perating budget was flat when cmpared t This was step ne in effrts t secure fiscal stability. Challenge Cntinued in 2011 Fast frward a year t Octber 2010 and it was time t again prepare a balanced budget fr A cntinuatin level budget was prjected t cst nearly $29 millin mre than Of this, an additinal $15.2 millin was required t pay increased salaries and benefits and anther $13.7 millin was needed t pay vter-apprved debt service. The challenge was the same increased csts far utstripped revenue. 1-1

2 Citizen Input: Cmmunity Budget Dialgues Given the recurring nature f the challenge, the Mayr wanted t engage citizens in talking abut the chices that were required. The Mayr cnvened fur cmmunity dialgues in August 2010 at which citizens learned abut the budget challenge and discussed chices between spending reductins and increased revenue. Over 350 peple discussed the trade-ffs between the tw. Out f the dialgue came sme key recmmendatins that guided the Mayr s budget decisin-making. Recmmendatins abut spending included: Anchrage residents dn t want large service cuts, instead they want the city t first address inefficiencies; If cuts must be made, take them frm administrative/supprt services, the Maintenance and Operatins Department, and the Plice Department; and Strng supprt fr maintaining and pssibly expanding essential services such as fire prtectin, plice (after efficiency measures are in place), public transprtatin, and Health and Human Services prgrams. Recmmendatins regarding revenue included: Residents generally are willing t raise taxes t maintain essential services but the city shuld nt cntinue t rely primarily n prperty taxes; Supprt fr user fees; Strng supprt fr an alchl excise tax; and Supprt fr a sales tax but there was strng ppsitin t. The apprved 2011 budget reduced $14.8 millin frm a cntinuatin level f spending. The Assembly als apprved increases in a number f user fees frm Parks t false alarms t vehicle registratin taxes. The Assembly-apprved budget ended up $14.3 millin lwer than cntinuatin. Becming the B.E.S.T. At the 2010 cmmunity budget dialgues, citizens said that they want assurances that gvernment is perating efficiently befre they wuld be willing t pay increased taxes. T that end, the Mayr has launched the B.E.S.T. (Building Efficient Services Tday) prject that invlves a number f cst-savings initiatives that leverage technlgy, cnslidate resurces, and streamline business prcesses. Last year, the city prvided pay advices nline instead f delivering print cpies t each emplyee every payday. The city als implemented an n-line ntificatin system fr public ntices instead f expensive newspaper advertisements. In Nvember 2010, emplyees updated benefit infrmatin nline; previusly paper applicatins were cmpleted that then were entered manually int the electrnic persnnel system. But these were initial steps. Majr transfrmatins are underway that further leverage technlgy t imprve efficiency, accuntability, and achieve permanent budget savings. Prcesses being re-engineered include electrnic timesheets and absence management (t be cmpleted in 2012) and replacement f the Municipality s ERP system (accunting, human resurces, purchasing, budgeting) that gt underway in September 2011 and will g live in 18 mnths. The ERP prject will result in significantly mre efficient, paperless prcesses that will deliver imprved service and save taxpayer dllars. 1-2

3 The Mayr als wanted t tap int private sectr expertise t learn hw the city s maintenance peratins can becme ne f the best and als save mney. CH2M Hill was awarded a cntract t review current maintenance peratins frm fleet t facilities t grunds and identify strategies by which the city can be mre efficient and maintain r imprve service. Recmmendatins are due by December 31, Aligning Budget t Pririties Early in ffice the Mayr articulated his Administratin s verarching missin and gals n which budget pririties wuld be made based. This framewrk is: Missin Prvide effective and fiscally respnsible municipal services t the Anchrage cmmunity that fsters a high quality f life. Cre Values Safety Excellence Accuntability Integrity Visin A safe place t call hme A flurishing, brad based and sustainable ecnmy An inviting place t live, wrk and play A premier destinatin Exemplary municipal peratins Gals Department cntributins t achieving each gal is nted within each f the Mayr s verarching gals: Achieve fiscal sustainability Imprve Municipal peratins Strengthen public safety Imprve the transprtatin system Enhance academic excellence and learning Prmte ecnmic develpment Keep taxes belw the tax cap An utline f department gals aligned within this framewrk is included in Appendix W. Accuntability fr Results In 2010 the Mayr launched an initiative by which departments reprt n the effectiveness f prgrams. Organized arund his missin and gals fr the Municipality, this accuntability initiative is called Anchrage: Perfrmance. Value. Results. (PVR). Thrugh perfrmance measures, it reprts the prgress departments are making in achieving the Mayr s gals. It als cmmunicates t citizens the return n investment fr their tax dllars. Departments reprt their respective results thrugh a strategic framewrk that includes its wn purpse, services, gals, perfrmance measures and perfrmance data that tracks hw well the gals are being achieved. Perfrmance data is updated quarterly and reviewed by the Mayr. Updates can be viewed at 1-3

4 Lking Frward: Six Year Prjectin Each year the Municipality updates the Six Year Fiscal Prgram that utlines ecnmic indicatrs, histrical fiscal trends and prjectins (the reprt is fund as Appendix V). The bttm line is that while future ecnmic trends are mdesty psitive, the Municipality will cntinue t face increases in persnnel-related csts that will utpace expected revenue. As a result, each year will require cntinued scrutiny f spending in rder t identify savings. Citizens Guide t the Budget Website In advance f prpsing the 2012 budget, the Mayr launched a new budget website. The Citizens Guide t the Budget includes backgrund infrmatin abut the budget prcess, hw t get/stay invlved in it, and backgrund infrmatin abut the current 2011 budget. It will be the clearinghuse fr key infrmatin abut the 2012 budget thrughut the year and can be viewed at 1-4

5 Highlights Apprved 2012 General Gvernment Operating Budget Just as in the last tw years, a cntinuatin budget t fund the same level f service in 2012 was prjected t increase $19.5 millin: 2012 Budget Challenge $12.4 millin fr salary and benefits; (in millin$) $1 millin fr cntractual and ther 2011 Ttal Budget $ bligatins; and $6.1 millin fr debt service n vterapprved Spending Increases bnds. Labr $ 12.4 Nn Labr 1.0 At the same time, prperty tax revenue culd Debt 6.1 nly increase $4.6 millin even if the Cntinuatin Level $ 19.5 Municipality taxed the full amunt allwed under the Tax Limit. Other revenue was expected t increase abut $4.5 millin. Additinally, $4.7 millin in fund balance used in 2011 was nt available in Once again, the cst t maintain the status qu far exceeded revenue. A ttal f $15.0 millin in savings had t be fund. Prjected Revenue Tax t Cap $ 4.6 Nn prperty taxes Fund Balance Use (net) (4.7) Cntinuatin Revenue $ Challenge: $15.1 Gap Mayr s Pririties The Mayr s gal was t ensure the 2012 budget met his cmmitment t public safety. In 2011, 29 new firefighters and safety fficers were added t the budget. While a Federal grant pays 60% f their cst, an additinal $1.7 millin in lcal funds is prvided in 2012 t cver the full year cst f the additinal fire fighters. Als, a 28-persn Plice Academy that started in Octber 2011 was funded in 2011 and anther tw recruits were added in The full-year cst required $1.3 millin be added t the budget. Develping the 2012 Budget In spite f limited revenue and required increases, the Mayr directed that 2012 budget decisins have minimal impact n direct services frm budget reductins wherever pssible. Given this challenge, the Mayr asked each department t identify ptential reductins t cver increased csts. In the summer he met with department directrs t discuss their ideas. Sme f the prpsals impacted the level f service that wuld be delivered t citizens. As an alternative, the Mayr asked OMB t scrub current year spending. OMB examined each department s actual level f expenditure in prir years as cmpared t the amunt that was budgeted. This quickly identified several areas that had been budgeted t high, which helped target areas fr further analysis. This effrt resulted in substantial savings as discussed belw. 1-5

6 Scrubbing the Numbers: Budgeting fr Leave One area in which departments have cnsistently cme in lwer than the amunt budgeted is leave cash-ut. The cst t cver leave-hurs taken is included in the amunt budgeted fr salaries. But emplyees als may cash-ut accrued leave. T cver this cst, an additinal percentage f salary is included in the budget. In 2010 a ttal f $10 millin was budgeted fr leave cash-ut but nly $4.3 millin was spent (unspent funds g int the treasury at the end f the year and are available t help pay fr the fllwing year s budget). The same situatin a department cming in underbudget in its leave cash-ut accunt als was true in prir years. T crrect this, a new frmula will be used starting in 2012 based n a department s prir three-year average actual spend fr leave cashed-ut. Fr 2012, this resulted in a $6.5 millin savings with n impact n services t citizens. This als meant that leave cash-ut was ver-budgeted in That year s expenditures were analyzed and $4.1 millin in expected savings was identified. The 2012 apprved budget utilizes this anticipated savings as revenue. (Using fund balance in this way is part f the budget balancing prcess each April during first quarter budget revisins.) Scrubbing the Numbers: Nn-Labr Csts Departments als clsely examined histrical spending in nn-labr expenditures, such as utilities, travel, and cntracts, t identify accunts that might histrically be under-spent/verbudgeted. A 3-year average histrical spend rate was used t identify such savings fr This prcess resulted in a $1.2 millin savings with n impact n services t citizens. Meeting 2012 Challenge (in millin$) Other Savings While substantial savings were realized by adjusting leave cash-ut and scrubbing nnlabr csts, mre reductins were still necessary t balance the budget. As a result, sme department prgrams will need t be realigned and staff reductins made. Every effrt will be made t minimize the impact n the level f direct services t citizens. Balanced Budget Achieved The result f these effrts is a budget that meets the Mayr s pririties: Spending savings Leave cash ut adjustment $ 6.5 Nn labr "scrub" 1.2 Other areas (net) 3.3 Revenue 2011 leave cash ut applied $ 4.1 Challenge Met $ 15.1 Enhanced public safety with 29 new firefighters and 30 new plice fficers; Minimal, if any, impact n direct services delivered t citizens; and Prperty tax increase that is abut half the rate f inflatin. 1-6

7 Spending Highlights The 2012 apprved budget is $452.3 millin, a 2.1% increase abve During the Assembly s cnsideratin f the budget it apprved $522,392 in amendments. As shwn in Chart 2, the largest cst is $247.5 millin fr salaries and benefits, which makes up 55% f spending. The secnd largest is $129.4 millin (29%) fr ther services (leases, cntracts, utilities, etc.). A breakdwn f these spending categries by department is in Appendix A. Chart 2 breaks dwn the perating budget by spending categries. Based n departments: Ttal: $452.3 millin Plice Department has the largest share f the ttal budget with $92.4 millin (21%); Fire Department has the secnd largest at $81 millin (18%); Public Wrks has the third largest with $63.4 millin (14%); Debt service csts have the furth largest slice with $57.8 millin (16%); and Budgets fr all ther departments ttal $157.7 millin (31%) f the budget. Table 2 displays each department s share f the 2012 apprved budget: Table Apprved Budget by Department / Debt Service Ranked by Percentage f Budget Plice $92,376, % Health & Human Services $11,369, % Fire $81,051, % Real Estate $8,012, % Public Wrks $63,415, % Library $7,754, % Debt Service $57,810, % Municipal Attrney $7,500, % Public Transprtatin $20,991, % Assembly $2,805, % Municipal Manager $20,539, % Mayr $2,179, % Parks & Rec $16,906, % Emplyee Relatins $2,189, % Infrmatin Technlgy $14,856, % Purchasing $1,760, % Cmmunity Develpment $13,903, % Management & Budget $843, % Cnventin Ctr Reserve $12,330, % Equal Rights $715, % Finance $11,749, % Chief Fiscal Officer $635, % Internal Audit $577, % 1-7

8 Revenue and Financing Surces Highlights 2012 Apprved Operating Budget The Mayr is required t prpse a balanced budget because the Charter prhibits the city frm incurring debt withut vter apprval. As a result, the budget identifies $452.3 millin in revenue frm six majr surces as displayed in Chart 3. Of this, $245 millin (54%) is frm prperty taxes. Taxes-Prperty - $245 millin The amunt f taxes the Municipality cllects is gverned by a Tax Limit (als knwn as the Tax Cap) that calculates tw numbers imprtant t the budget and taxpayers: Other (Incl Special Assessments, Fines & Frfeitures, Investment Incme); $14.5; 3% Transfers frm Other Funds, Restricted Cntributins; $14.8; 3% Chart Revenue (in millins) Intra Gvt Charges; $28.7; 6% Fund Balance; $8.0; 2% The maximum amunt f all taxes the city can cllect; and The maximum amunt f prperty taxes that can be cllected. State & Federal Revenues; $19.1; 4% Payments in Lieu f Taxes; $22.8; 5% Taxes Prperty; $245.0; 55% Ttal: $452.3 Millin The preliminary (the final limit is calculated in April) 2012 Tax Limit calculatin shws that $287.0 millin in Licenses & Permits, Prgram Fees; $39.6; 9% all taxes can be cllected (nt subject t the Tax Limit is anther $16.1 millin in mill levies set by service area bards). This is a $9.5 millin increase abve the same limit that culd have been cllected in At the same time, there is a $2.2 millin decrease in the maximum amunt f prperty taxes that can be cllected in Table 3. Prperty Tax Impact Change Tax Per $100,000 Assessed Value $ $ $9.00 (Excludes Anchrage Schl District) Taxes Other; $59.7; 13% The reasn fr an increase in ne limit and a decrease in the ther is the cre f the Tax Limit s design every dllar in a nn-prperty tax replaces a dllar in prperty tax. The $3.8 millin increase in vehicle registratin taxes prjected in 2012 autmatically reduces $3.8 millin in prperty taxes. Mst significant is the third and final year f phasing in Prpsitin 9, apprved by vters in 2009, that put revenue frm utility/enterprise payments-in-lieu-ftaxes back under the Tax Limit. A ttal f $21 millin in these payments will replace $21 millin in prperty taxes in The apprved 2012 budget relies n $245 millin in prperty taxes, which is $1 millin belw the maximum allwed under the preliminary 2012 Tax Cap. It is a $3.6 millin (1.7%) increase frm the amunt f ttal prperty taxes cllected in Table 3 describes the taxpayer impact per $100,000 f assessed prperty valuatin. Nn-Prperty Tax Revenue - $170.5 millin In 2012 there is a $4.5 millin increase in this categry f revenue, which includes: Taxes-Other (nn-prperty taxes) Licenses and Permits, Prgram Fees 1-8

9 Payments in Lieu f Taxes State and Federal Revenues Transfers frm Other Funds, Restricted Cntributins Other, Special Assessments, Fines and Frfeitures, Investment Incme Taxes-Other - $59.7 millin Revenue frm nn-prperty taxes that have substantively changed in 2012 include: Vehicle Registratin Tax (Aut Tax) A ttal f $8.8 millin is expected, which includes $3.8 millin mre than the 2011 budgeted amunt due t an increase in rates apprved by the Assembly in 2010 (there is a ne-year lag between apprval and implementatin). This tax is cllected by the State f Alaska and is paid at the time a mtr vehicle is registered; Tbacc Tax A ttal f $20,950,000 is expected, which is a decrease f $350,000 when cmpared t 2011; Mtr Vehicle Rental Tax A ttal f $5.2 millin is expected, representing an increase f $420,600 in 2012; and Htel/Mtel Rm Tax A ttal f $21.6 millin frm this 12% tax is expected in 2012 fr a $1.8 millin increase related t an expected upswing in turism. Revenue frm the tax is split three ways 4% t turism marketing; 4% fr cnventin center debt; and 4% t general gvernment. Licenses and Permits; Prgram Fees - $39.6 millin This categry includes fees paid fr services, such as land use permits and bus fares. Changes in 2012 include: Building Permit Plan Review A ttal f $2.1 millin is expected in 2012, which is an increase f $150,000 frm 2011; E-911 Surcharge A ttal f $6.8 millin is expected in 2012, which is a decrease f $329,100 due t a leveling ff in the number f cell phnes; this cmpares t an annual increase f 3% in previus years; and Lease and Rental Revenue There is a $203,400 increase frm rental f Municipalwned prperty, which will bring this categry s ttal revenue t $464,200. Payments in Lieu f Taxes - $22.8 millin This categry includes payments made by utilities, Municipal enterprises and private cmpanies instead f taxes t the Municipality, state and federal gvernments. MUSA/MESA This payment-in-lieu-f-(prperty) taxes paid by Municipal-wned utilities and enterprises will ttal $19.0 millin, which is $1.3 millin higher than State Revenues; Federal Revenues - $19.1 millin State Revenue A ttal f $18.2 millin is expected, primarily frm a prgram by which the State shares revenue with lcal gvernments. In 2012 the same level ($15 millin) is 1-9

10 expected as budgeted in 2011 (the Municipality als received $5 millin in ne-time funding in 2011). Federal Revenue A ttal f $1.0 millin is expected, which cmpares t $1.4 millin in 2011 due t a $417,000 reductin in the Build America Bnds subsidy. Transfers frm Other Funds; Restricted Cntributins - $14.8 millin Transfers frm Other Funds includes utility revenue distributin and a dividend paid frm MOA s Trust Fund (created with the prceeds frm the sale f the Anchrage Telephne Utility). Restricted Cntributins include payment frm the Anchrage Schl District fr the Schl Resurce Officers, which has nt substantively changed in Cntributin frm MOA Trust Fund The 2012 MOA Trust Fund dividend is anticipated t be $4.9 millin, which is $100,000 lwer than Other; Special Assessments; Fines and Frfeitures; Investment Incme - $14.5 millin Revenue that has substantively changed in 2012 includes: Curt Fines (Curt Fines and Frfeitures, SOA Trial Curt Fines) A decrease f $720,000 is anticipated fr a ttal f $3.8 millin. The reductin is the due t a smaller Permanent Fund dividend prjected fr 2012, which will reduce the amunt that can be garnished frm thse that fail t pay these fines; Parking Enfrcement Fines A $432,100 decrease is expected due t APD n lnger writing parking tickets dwntwn; this revenue nw will g t the Anchrage Cmmunity Develpment Authrity; and Investment Incme (Cash Pl Shrt-Term Interest, Other Shrt-Term Interest) This categry f revenue includes interest earnings n management f Municipal cash pls and. A ttal f $5.7 millin in revenue is expected in investment incme, which is $880,000 less than Intra-Gvernmental Charges (IGCs) - $28.7 millin IGCs are charges fr services prvided by ne Municipal rganizatin t anther. Fr example, the Maintenance and Operatins Department maintains all general gvernment buildings. Maintenance csts are budgeted in Maintenance and Operatins and charged ut thrugh IGCs t the apprpriate users. By using an intra-gvernmental charge system, the full cst f a prgram including verhead is linked t the prgram s budget. This system als allws departments t charge Municipal utilities, grants, and capital prjects fr services. In 2012, IGCs will generate $28.7 millin in financing surces, which is $1.3 millin mre than in Fund Balance - $8.1 millin Fund balance is generally defined as the difference between a fund s assets and liabilities. This categry f financing surces includes unspent funds at year-end in gvernmental perating funds. These balances then are used t help pay fr the fllwing year s budget, which reduces the amunt f revenue frm ther surces that therwise wuld be required 1-10

11 t supprt the spending frm the respective fund. The 2012 Apprved budget uses $4.1 millin in fund balance that is anticipated t be unspent at the end f 2011 due t the verbudgeting f leave cash-ut, as discussed earlier. Half f this unspent fund balance will be used in the Anchrage Plice and will result in a 14% reductin in fund balance. As part f the annual budget prcess, this will be revisited during first quarter budget amendments t ensure the fund remains in cmpliance with the Municipal fund balance reserve plicies. Since the leave cash-ut budget is crrected in 2012, it will nt be a surce f fund balance in the future. Several prgrams generate revenue that is placed in self-sustaining funds t pay perating csts. Fr example, Develpment Services gets revenue frm cnstructin-related permits; Heritage Land Bank gets revenue frm the sale f Municipal prperty and the Dena ina Center gets bed tax revenue t pay its debt service. A ttal f $1.4 millin f fund balance in these funds is budgeted t be used in This budgeted 2012 fund balance use represents large decreases in fund balances fr the Building Safety fund and the Heritage Land Bank fund. These will be reexamined in first quarter budget amendments: fund balance use in the Heritage Land Bank fund may be lwer t reflect an increase in revenue frm prperty sales, leases and land use permits that ccurred after the 2012 budget was prpsed; use f fund balance in the Building Safety fund may require a plicy decisin if the permit revenue cntinues t be less than the cst f the prgrams it is meant t supprt. Self Insurance and Management Infrmatin Systems are internal service funds used t accumulate and allcate csts fr services t ther Municipal departments r agencies n a cst-reimbursement basis. The 2012 Apprved budget includes the reductin and use f a ttal f $2.5 millin f fund balance in these funds. These internal service funds are reimbursed with IGCs, which, as part f the annual budget prcess, will be updated during first quarter budget revisins t fully reimburse the funds withut the use f fund balance. 1-11

12 Preliminary 2012 Tax Limit Calculatin Anchrage Municipal Charter and Anchrage Municipal Cde Line Revised Apprved 1 Step 1: Building Base with Taxes Cllected the Prir Year 2 Real/Persnal Prperty Taxes t be Cllected $ 221,394,860 $ 225,307,034 3 Payment in Lieu f Taxes (State & Federal) 919, ,000 4 Autmbile Tax 4,984,000 5,040,000 5 Tbacc Tax 16,300,000 21,300,000 6 Aircraft Tax 210, ,000 7 Mtr Vehicles Rental Tax 4,271,327 4,753,653 8 MUSA/MESA 6,328,914 13,187,332 9 Step 1 Ttal $ 254,408,101 $ 270,717, Step 2: Back ut Prir Year's Exclusins Nt Subject t Tax Limit 12 Taxes Authrized by Vter-Apprved Ballt - O&M Reserves (One-Time) (440,000) (440,000) 13 Judgments/Legal Settlements (One-Time) (539,824) (118,550) 14 Debt Service (One-Time) (35,582,194) (49,147,385) 16 Step 2 Ttal (36,562,018) (49,705,935) Tax Limit Base (befre Adjustment fr Ppulatin and CPI) $ 217,846,083 $ 221,011, Step 3: Adjust fr Ppulatin, Inflatin 21 Ppulatin 5 Year Average 1.00% 2,178, % 1,547, Change in Cnsumer Price Index 5 Year Average 2.60% 5,664, % 5,525, Step 3 Ttal 3.60% 7,842, % 7,072, The Base fr Calculating Fllwing Year's Tax Limit $ 225,688,543 $ 228,083, Step 4: Add Taxes fr Current Year Items Nt Subject t Tax Limit 28 New Cnstructin 1,657,790 2,195, Taxes Authrized by Vter-Apprved Ballt - O&M 477, , Taxes Authrized by Vter-Apprved Ballt - O&M Reserves (One-Time) 440, , Judgments/Legal Settlements (One-Time) 118,550 25, Debt Service (One-Time) 49,147,385 55,513, Step 4 Ttal 51,841,641 58,897, Limit n ALL TAXES that can be cllected $ 277,530,184 $ 286,981, Step 5: T determine limit n prperty taxes, back ut ther taxes 42 Payment in Lieu f Taxes (State & Federal) (919,000) (780,000) 43 Autmbile Tax (5,040,000) (8,800,000) 44 Tbacc Tax (21,300,000) (20,950,000) 45 Aircraft Tax (210,000) (210,000) 46 Mtr Vehicle Rental Tax (4,753,653) (5,174,208) 47 MUSA/MESA (13,187,332) (21,120,375) 48 Step 5 Ttal (45,409,985) (57,034,583) Limit n PROPERTY TAXES that can be cllected $ 232,120,199 $ 229,946, Step 6: Determine prperty taxes t be cllected if different than Limit n Prperty Taxes that can be cllected 53 Prperty taxes t be cllected based n spending decisins minus ther available revenue Prperty taxes TO BE COLLECTED $ 225,307,034 $ 228,942, Amunt belw limit n prperty taxes that can be cllected ("under the cap") (6,813,165) (1,004,079) There als are service areas with bards that set their maximum mill levies. The prperty taxes in these service areas are nt subject t the Tax Limit Calculatin ("utside the cap"). The preliminary 2012 ttal prperty taxes "utside the cap" is $16,096,786, making the preliminary ttal f all prperty that can be cllected $245,039,

13 Persnnel Summary by Department 2010 Revised Budget 2011 Revised Budget 2012 Apprved Budget Department FT PT Seas Temp Ttal FT PT Seas Temp Ttal FT PT Seas Temp Ttal Assembly Chief Fiscal Officer Develpment Services Cmmunity Develpment Cmmunity Planning and Develpment Emplyee Relatins Equal Rights Cmmissin * Finance * Fire Health and Human Services Infrmatin Technlgy Internal Audit Library * Maintenance and Operatins Management and Budget Mayr Municipal Attrney * Municipal Manager * Parks and Recreatin * Planning Plice Prject Management and Engineering Public Transprtatin * Public Wrks Purchasing Real Estate Traffic Ttal General Gvernment 1, ,285 1, ,274 1, ,254 Changes in staffing levels frm 2011 Revised Budget t 2012 Apprved Budget are explained n individual department recnciliatin pages. In 2010, t deliver better service t custmers: The Cmmunity Develpment Department was created by cmbining the fllwing departments: Planning; Prject Management & Engineering (Private Develpment); Traffic (Transprtatin Planning); and Develpment Services (except Directr and Admin). The Public Wrks Department was created by cmbining the fllwing departments: Maintenance & Operatins; Prject Management & Engineering (except Private Develpment); Traffic (except Transprtatin Planning); Cmmunity Planning & Develpment (1% fr Arts); and Develpment Services (Directr and Admin). The Cmmunity Planning & Develpment Department was merged int the Public Wrks (1% fr Arts) and the Municipal Manager Department. * 2010 crrectly reflects the psitins as reprted in the Persnnel Summary by Department in the 2011 Revised GGOB. The Department Summary reprts (generated frm TeamBudget) differ due t hw the number f psitins are cunted in TeamBudget. 1-13

14 Recnciliatin f 2011 Revised Budget t 2012 Apprved Budget Cntinuatin Level Adjustments Revised Salary, All Cntinuatin Additinal Apprved Department Budget Benefits Other Subttal Level Changes Budget % Assembly 2,600, , ,974 2,760,615 37,766 2,805, % Chief Fiscal Officer 485,366 10,096-10, , , , % Cmmunity Develpment 14,335, ,773 (88,540) 520,233 14,855,234 (892,078) 13,963, % Emplyee Relatins 2,256,775 98,760-98,760 2,355,535 (166,413) 2,189, % Equal Rights Cmmissin 676,331 60,352-60, ,683 (21,435) 715, % Finance 12,063, , ,070 12,603,802 (476,415) 12,127, % Fire 73,064,907 2,845, ,696 3,207,934 76,272,841 1,574,293 77,847, % Fire - Plice/Fire Retirement 8,713, ,713,855 (740,347) 7,973, % Health and Human Services 12,536, ,064 43, ,574 12,890,065 (1,204,469) 11,685, % Infrmatin Technlgy 15,350, ,133 52, ,169 15,716,664 (397,322) 15,319, % Internal Audit 535,762 60,103-60, ,865 (18,002) 577, % Library 7,742, ,204 (27,000) 314,204 8,056,969 (352,092) 7,754, % Management and Budget 912,499 (22,022) - (22,022) 890,477 (46,544) 843, % Mayr 1,702, , ,443 1,823,482 (124,583) 1,698, % Cmmunity Grants 480, , , % Municipal Attrney 7,342, , , ,624 7,702,107 (201,988) 7,500, % Municipal Manager 22,025, , , ,529 22,472,549 (159,847) 22,514, % Parks and Recreatin 19,921, , , ,260 20,866,175 (636,668) 20,374, % Plice 82,927,404 4,192,166 (67,660) 4,124,506 87,051,910 (3,743,046) 83,388, % Plice - Plice/Fire Retirement 10,175, ,175,537 (659,472) 9,516, % Public Transprtatin 21,251, ,685 95, ,962 22,030,071 (498,112) 21,571, % Public Wrks 104,613,880 1,120,595 4,909,362 6,029, ,643,837 (2,335,830) 108,308, % Purchasing 1,581,159 22,815-22,815 1,603, ,442 1,760, % Real Estate 7,834,255 41, , ,670 8,165,925 (153,716) 8,012, % Department Subttal 431,129,921 12,354,757 6,475,456 18,830, ,960,134 (10,920,200) 439,562,326 Cnventin Center Reserve 11,700, , ,516 12,330,090-12,330, % TANS Areawide Expense 381, , , % Subttal 12,081, , ,516 12,711,450-12,711,450 Ttal 443,211,855 12,354,757 7,104,972 19,459, ,671,584 (10,920,200) 452,273, % 1-14

15 Use f Funds by Department Budgets (Direct Cst in $ Thusands) Fund # SA/LRSA TOTAL Chugiak Fire Service Area Girdwd Valley Service Area Chugiak/ Birchwd /ER RR SA Anch Fire Service Area Anch Rads / Drainage Service Area Anch Plice Service Area Anch Parks & Rec Service Area Department Areawide Assembly 2, , % Equal Rights Cmmissin % Internal Audit % Office f the Mayr 2, , % Municipal Attrney 7, , % Real Estate 7, , % Municipal Manager 11, ,926-22, % Finance 10, , , % Infrmatin Technlgy 1, ,006 15, % Chief Fiscal Officer % Management and Budget % Emplyee Relatins 2, , % Purchasing 1, , % Health and Human Services 11, , % Fire 21,179 1, , , % Plice 1, , , % Library 7, , % Parks and Recreatin ,053 3, , % Public Transprtatin 21, , % Nn-Departmental % Taxes and Reserve , , % Cmmunity Develpment 8, , , % Eagle River / Chugiak Parks & Rec Service Area Multiple SAs and LRSAs Bld Safety Service Area Public Fin Invest Cnvntn Ctr Ops Reserve Heritage Land Bank Rev Bnd- PAC Self-Ins Public Wrks 27, ,748-70, , , % Ttal General Gvernment 149,460 1,016 1,694 6,748 62,959 70,237 91,615 17,053 3,038 2,971 5,502 1,516 12, ,926 14, , % Mgmnt Inf Systems 2012 Apprved Budget Percent f Ttal Percent f Ttal 33.0% 0.2% 0.4% 1.5% 13.9% 15.5% 20.3% 3.8% 0.7% 0.7% 1.2% 0.3% 2.7% 0.2% 0.1% 2.4% 3.1% 100.0% Direct Cst includes debt service. 1-15

16 Revenues, Expenditures and ther Financing Surces/Uses by Fund # Girdwd Valley Anchrage Rads / Drainage Anchrage Plice Anchrage Parks & Recreatin Chugiak Fire Chugiak/Birch Anchrage Fire Revenues: Areawide wd/er RR SA Taxes - Prperty (2,251,946) 1,422,914 2,291,788 6,527,644 61,781,962 65,607,403 86,325,951 17,479,353 Taxes - Other 42,000,117 23,020 34, ,144 1,137,451 1,710,402 1,590, ,767 Payments in Lieu f Taxes 22,768, Special Assessments , Licenses & Permits 4,071, , Prgram Fees 23,090,963-8,000 15, ,500 41,500 2,285,588 2,197,025 Fines & Frfeitures 821, ,796,658 - Investment Incme 1,773,045 52,913 11,733 25, , , , ,734 Restricted Cntributins , ,721,483 - Transfers frm Other Funds 11,524, State Revenues 16,917,080 1,810 2,570-99, , ,220 34,100 Federal Revenues 120, , ,642-43,888 Other 523, ,700 - TOTAL Revenues 121,358,390 1,500,657 2,348,094 6,812,492 64,463,309 69,664, ,358,020 20,543,867 Expenditures: Assembly 2,805, Equal Rights Cmmissin 715, Internal Audit 577, Office f the Mayr 2,179, Municipal Attrney 7,500, Real Estate 7,149, Municipal Manager 11,248, Finance 10,611, Infrmatin Technlgy 1,313, Chief Fiscal Officer 635, Management and Budget 843, Emplyee Relatins 2,189, Purchasing 1,760, Health and Human Services 11,685, Fire 21,178,857 1,016, ,346-62,959, Plice 1,289, ,615,243 - Library 7,754, Parks and Recreatin 98, , ,052,969 Public Transprtatin 21,571, Nn-Departmental 381, Cnventin Center Ops Reserve Cmmunity Develpment 8,461, Public Wrks 27,509, ,195 6,747,756-70,237, TOTAL Expenditures 149,460,074 1,016,250 1,693,525 6,747,756 62,959,188 70,237,184 91,615,243 17,052,969 Charges by Departments 55,458, , ,129 87,236 18,535,331 2,098,234 14,585,442 3,876,995 Charges t Departments (82,031,830) (16,500) (27,560) (22,500) (17,031,210) (2,303,373) (3,642,666) (386,097) TOTAL Charges by/t (26,573,372) 484, ,569 64,736 1,504,121 (205,139) 10,942,776 3,490,898 Net Increase (Decrease) in Fund Balance (1,528,312) (367,281) (2,199,999) - Estimated Fund Balance-Beginning* 22,435,575 1,262, , ,114 7,968,155 7,663,151 15,851,401 2,874,848 Estimated Fund Balance-Ending 20,907,263 1,262, , ,114 7,968,155 7,295,870 13,651,402 2,874,848 Y/Y Fund Balance % Change -7% 0% 0% 0% 0% -5% -14% 0% * Estimated Fund Balance-Beginning fr funds 602 and 607 based n trial balance at 02/14/2012. All ther funds based n 12/31/2010 fund balance plus 2011 revenue and 1-16

17 Majr Funds, and Nn-majr Funds in the Aggregate 162 SA/LRSA Eagle River / Chugiak Parks & Rec Multiple SAs and LRSAs Building Safety Public Finance Investment Cnventin Center Operatins Reserve Heritage Land Bank Revenue Bnd Payment- Perfrming Arts Center Self-Insurance Management Infrmatin Systems 2,711,758 3,142, ,039,508 17,000 6, ,518, ,727,911 TOTAL ,768, , ,892, , ,419, ,602-5, , , ,000 29,221, , ,618,658 95, ,566-1,177,500-28, ,855-5,728, , ,318, ,524,000-10, ,152, , , , ,886,803 3,247,165 3,272,830 5,898,746 1,730,618 13,018, , , ,855 5, ,562, ,805, , , ,179, ,500, , ,012, ,613 10,925,835-22,514, ,516, ,127, ,006,271 15,319, , , ,189, ,760, ,685, ,820, ,904, ,754,877 3,038, ,374, ,571, , ,330, ,330, ,501, ,963,156-2,970, ,308,007 3,038,161 2,970,954 5,501,698 1,516,003 12,330, , ,613 10,925,835 14,006, ,273, , ,326 2,201,454 80, ,608-2,189,863 3,668, ,042,389 (30,000) (26,450) (306,727) (10,725,658) (17,172,709) (133,723,280) 209, ,876 1,894,727 80, ,608 - (8,535,795) (13,504,544) (28,680,891) - - (1,497,679) 134, ,965 (738,841) - (2,024,185) (496,727) (8,030,681) 1,959,230 4,542,367 (2,761,465) 1,933,328 7,439,511 1,136, ,165 14,511,812 (953,658) 87,502,492 1,959,230 4,542,367 (4,259,144) 2,067,706 8,127, , ,165 12,487,627 (1,450,385) 79,471,811 0% 0% -54% 7% 9% -65% 0% -14% -52% -9% d expenditure prjectin at 02/14/ 1-17

18 2010 Actuals, 2011 Revised Budget and 2012 Apprved Budget Financing Surces and Uses Areawide Areawide Areawide Chugiak Fire Chugiak Fire Chugiak Fire Girdwd Valley Girdwd Valley Girdwd Valley Revenues Actuals Budget Budget Actuals Budget Budget Actuals Budget Budget Taxes - Prperty 14,933,018 2,946,180 (2,251,946) 1,048,786 1,044,896 1,422,914 1,880,581 1,829,907 2,291,788 Taxes - Other 36,004,404 38,975,208 42,000,117 17,249 16,000 23,020 24,851 24,000 34,003 Payments in Lieu f Taxes 20,588,215 21,568,331 22,768, Special Assessments Licenses & Permits 4,026,010 4,053,899 4,071, Prgram Fees 22,473,971 23,328,102 23,090, ,469 8,000 8,000 Fines & Frfeitures 1,080,723 1,395, , Investment Incme 1,280,517 2,644,125 1,773,045 16,895 45,460 52,913 13,440 10,080 11,733 Restricted Cntributins 257, Transfers frm Other Funds 11,273,425 11,604,962 11,524, State Revenues 17,019,310 16,917,080 16,917,080 1,709 1,810 1,810 2,426 2,570 2,570 Federal Revenues 45, , , Other 1,464, , , , , TOTAL Revenues 130,447, ,139, ,358,390 1,201,477 1,108,166 1,500,657 1,944,180 1,874,557 2,348,094 Expenditures Assembly 2,481,729 2,600,641 2,805, Equal Rights Cmmissin 575, , , Internal Audit 514, , , Office f the Mayr 1,251,620 2,182,539 2,179, Municipal Attrney 6,820,151 7,342,482 7,500, Real Estate 7,694,132 6,880,419 7,149, Municipal Manager Municipal Manager 11,192,358 11,132,427 11,248, Finance 10,221,757 10,658,353 10,611, Infrmatin Technlgy 1,276,728 1,371,645 1,313, Chief Fiscal Officer 434, , , Management and Budget 787, , , Emplyee Relatins 1,973,755 2,256,774 2,189, Purchasing 1,261,671 1,581,160 1,760, Health and Human Services 10,917,317 12,536,490 11,685, Fire 23,992,395 24,252,473 21,178, ,607 1,016,250 1,016, , , ,346 Plice 1,648,321 1,510,463 1,289, Library 7,409,608 7,742,767 7,754, Parks and Recreatin 98,000 98,000 98, , , ,984 Public Transprtatin 20,253,280 21,251,111 21,571, Nn-Departmental 211, , , Cnventin Center Ops Reserve Cmmunity Develpment 7,518,183 9,217,363 8,461, Public Wrks 22,082,719 28,182,952 27,509, , , ,195 TOTAL Expenditures 140,617, ,789, ,460, ,607 1,016,250 1,016,250 1,578,351 1,642,044 1,693,525 Charges by Departments 64,869,291 66,334,439 55,458, , , , , , ,129 Charges t Departments (88,564,120) (95,644,190) (82,031,830) (16,500) (16,500) (16,500) (27,560) (27,560) (27,560) TOTAL Charges by/t (23,694,829) (29,309,751) (26,573,372) 98,360 91, , , , ,569 Net Increase (Decrease) in Fund Balance 13,524,606 (340,199) (1,528,312) 285, , Actuals are presented in terms f 2010 Budget Perid and 2011 rganizatin and exclude Funds 213 and

19 2010 Actuals, 2011 Revised Budget and 2012 Apprved Budget Financing Surces and Uses Chugiak/Birch wd/er RR SA Chugiak/Birch wd/er RR SA Chugiak/Birch wd/er RR SA Anchrage Fire Anchrage Fire Anchrage Fire Anchrage Rads / Drainage Anchrage Rads / Drainage Anchrage Rads / Drainage Revenues Actuals Budget Budget Actuals Budget Budget Actuals Budget Budget Taxes - Prperty 6,714,451 6,377,169 6,527,644 54,578,434 61,586,025 61,781,962 53,637,878 60,780,274 65,607,403 Taxes - Other 99,956 97, , , ,000 1,137,451 1,229,149 1,177,678 1,710,402 Payments in Lieu f Taxes Special Assessments , , ,000 Licenses & Permits , , , Prgram Fees 33,549 15,460 15, , , ,500 20,146 41,500 41,500 Fines & Frfeitures Investment Incme 8,363 22,300 25, , , , , , ,017 Restricted Cntributins 113,809 96,550 96, Transfers frm Other Funds State Revenues ,311 99,890 99, , , ,800 Federal Revenues ,654 41, ,563 1,059, ,642 Other 23, , ,819, TOTAL Revenues 6,993,446 6,608,979 6,812,492 57,446,942 63,756,432 64,463,309 76,115,590 64,577,442 69,664,764 Expenditures Assembly Equal Rights Cmmissin Internal Audit Office f the Mayr Municipal Attrney Real Estate Municipal Manager Municipal Manager Finance Infrmatin Technlgy Chief Fiscal Officer Management and Budget Emplyee Relatins Purchasing Health and Human Services Fire ,547,005 55,843,981 62,959, Plice Library Parks and Recreatin Public Transprtatin Nn-Departmental Cnventin Center Ops Reserve Cmmunity Develpment Public Wrks 6,472,192 6,740,716 6,747, ,514,313 65,970,462 70,237,184 TOTAL Expenditures 6,472,192 6,740,716 6,747,756 52,547,005 55,843,981 62,959,188 77,514,313 65,970,462 70,237,184 Charges by Departments 243,575 97,951 87,236 17,424,818 21,012,881 18,535,331 3,856,643 2,374,944 2,098,234 Charges t Departments (22,500) (22,500) (22,500) (10,235,864) (13,962,780) (17,031,210) (5,910,742) (588,969) (2,303,373) TOTAL Charges by/t 221,075 75,451 64,736 7,188,954 7,050,101 1,504,121 (2,054,099) 1,785,975 (205,139) Net Increase (Decrease) in Fund Balance 300,179 (207,188) - (2,289,017) 862, ,377 (3,178,995) (367,281) 2010 Actuals are presented in terms f 2010 Budget Perid and 2011 rganizatin and exclude Funds 213 and

20 2010 Actuals, 2011 Revised Budget and 2012 Apprved Budget Financing Surces and Uses Anchrage Plice Anchrage Plice Anchrage Plice Anchrage Parks & Recreatin Anchrage Parks & Recreatin Anchrage Parks & Recreatin Eagle River / Chugiak Parks & Rec Eagle River / Chugiak Parks & Rec Eagle River / Chugiak Parks & Rec Revenues Actuals Budget Budget Actuals Budget Budget Actuals Budget Budget Taxes - Prperty 83,200,737 83,172,790 86,325,951 18,140,824 16,821,765 17,479,353 3,172,083 3,131,495 2,711,758 Taxes - Other 1,154,905 1,088,000 1,590, , , ,767 17,412 17,000 17,000 Payments in Lieu f Taxes Special Assessments Licenses & Permits Prgram Fees 2,118,201 2,218,586 2,285,588 2,097,079 2,197,025 2,197, , , ,602 Fines & Frfeitures 6,387,614 6,523,030 5,796, Investment Incme 568, , ,571 (8,835) 239, ,734 60,768 82,310 95,805 Restricted Cntributins 1,214,575 2,649,427 2,721, , Transfers frm Other Funds State Revenues 454, , ,220 32,196 34,100 34, Federal Revenues ,417 43, Other 796, , ,700 2,515, TOTAL Revenues 95,895,895 97,332, ,358,020 23,178,615 19,756,362 20,543,867 3,759,645 3,653,407 3,247,165 Expenditures Assembly Equal Rights Cmmissin Internal Audit Office f the Mayr Municipal Attrney Real Estate Municipal Manager Municipal Manager Finance Infrmatin Technlgy Chief Fiscal Officer Management and Budget Emplyee Relatins Purchasing Health and Human Services Fire Plice 84,803,900 91,592,479 91,615, Library Parks and Recreatin ,582,306 16,261,428 17,052,969 3,001,852 3,335,300 3,038,161 Public Transprtatin Nn-Departmental Cnventin Center Ops Reserve Cmmunity Develpment Public Wrks TOTAL Expenditures 84,803,900 91,592,479 91,615,243 17,582,306 16,261,428 17,052,969 3,001,852 3,335,300 3,038,161 Charges by Departments 11,163,232 14,249,939 14,585,442 4,642,514 3,959,874 3,876, , , ,004 Charges t Departments (3,692,142) (4,527,300) (3,642,666) (348,171) (386,097) (386,097) (30,000) (30,000) (30,000) TOTAL Charges by/t 7,471,090 9,722,639 10,942,776 4,294,343 3,573,777 3,490, , , ,004 Net Increase (Decrease) in Fund Balance 3,620,905 (3,982,150) (2,199,999) 1,301,966 (78,843) - 379, Actuals are presented in terms f 2010 Budget Perid and 2011 rganizatin and exclude Funds 213 and

21 2010 Actuals, 2011 Revised Budget and 2012 Apprved Budget Financing Surces and Uses SA/LRSA SA/LRSA SA/LRSA Multiple SAs and LRSAs Multiple SAs and LRSAs Multiple SAs and LRSAs Building Safety Building Safety Building Safety Public Finance Investment Public Finance Investment Public Finance Investment Revenues Actuals Budget Budget Actuals Budget Budget Actuals Budget Budget Taxes - Prperty 3,181,284 3,145,260 3,142, Taxes - Other 19,554 4,100 6, Payments in Lieu f Taxes Special Assessments Licenses & Permits ,315,904 5,902,746 5,892, Prgram Fees ,005 5,000 5, , , ,118 Fines & Frfeitures ,000 1, Investment Incme 82,687 97, ,566 (63,296) - - 1,198,712 1,123,360 1,177,500 Restricted Cntributins , Transfers frm Other Funds State Revenues 10,137 10,480 10, Federal Revenues Other , , TOTAL Revenues 3,293,661 3,257,410 3,272,830 6,085,363 5,908,746 5,898,746 1,649,549 1,623,520 1,730,618 Expenditures Assembly Equal Rights Cmmissin Internal Audit Office f the Mayr Municipal Attrney Real Estate Municipal Manager Municipal Manager Finance ,355,884 1,405,379 1,516,003 Infrmatin Technlgy Chief Fiscal Officer Management and Budget Emplyee Relatins Purchasing Health and Human Services Fire Plice Library Parks and Recreatin Public Transprtatin Nn-Departmental Cnventin Center Ops Reserve Cmmunity Develpment ,626,140 5,117,636 5,501, Public Wrks 2,735,957 2,970,954 2,970, TOTAL Expenditures 2,735,957 2,970,954 2,970,954 5,626,140 5,117,636 5,501,698 1,355,884 1,405,379 1,516,003 Charges by Departments 334, , ,326 1,580,908 2,295,168 2,201, ,935 64,370 80,237 Charges t Departments (26,450) (26,450) (26,450) (757,046) (310,324) (306,727) TOTAL Charges by/t 307, , , ,862 1,984,844 1,894, ,935 64,370 80,237 Net Increase (Decrease) in Fund Balance 249, (364,639) (1,193,734) (1,497,679) 129, , , Actuals are presented in terms f 2010 Budget Perid and 2011 rganizatin and exclude Funds 213 and