Bryan Whitemyer, City Manager

Transcription

1 Reviewed Date: Approved: Meeting Date: Agenda Item: Bryan Whitemyer, City Manager June 6, 2011 Executive Summary Presented By: Bryan Whitemyer, City Manager Meeting Date: June 6, 2011 City Council Workshop Subject: FY Preliminary Budget Review Enclosures: FY Preliminary Budget Budget Action: None Desired Action: Review and Discuss the Proposed FY Preliminary Budget Background: On February 14, 2011 the City Council approved the FY Mid-Year Budget. The mid-year budget included a reorganization of City operations that resulted in the elimination of five full-time positions. In order to fully analyze how these changes would affect the organization, staff utilized a modified Zero-Based Budgeting (ZBB) approach to develop the draft FY Preliminary Budget. The main difference between ZBB and Traditional Budgeting is that you start with zero instead of simply using the previous year s budget numbers as a baseline. The website defines Zero Based Budgeting as budgeting system that sets all budgets to zero and makes departments or government agencies justify all of their expenditures. Money is then allocated to the various departments or agencies based on what is currently needed, not the previous year s budget. During this process we evaluated the job duties of our employees and reassigned their cost allocations as needed. As a result, some General Fund categories show increased salary costs. Generally, this increase is due to the reallocation of costs and not increases in employee pay. Finance Subcommittee Meeting: On May 26, 2011 staff presented a proposed FY preliminary General Fund Budget to the Finance Subcommittee. This proposal projected revenues of $2,140,168 and expenditures of $2,128,729. The proposal included a slight decrease in property tax and sales tax revenues. The projected revenues for FY rose by $83,094 when compared to FY revenue figures. The $92,000 Proposition 84 planning grant was the reason for the revenue increase. Expenditures included $53,743 in Police Services cost increases and $7,032 in additional Animal Control costs. The projected 1

2 expenditures assumed that City employees would not receive cost of living adjustment pay increases. During the review of the projected General Fund revenues the Finance Subcommittee recommended that staff revisit the revenue projections for the following revenue accounts: 1) 4735 Planning Application - $14,000 2) 4813 Plan Check Fees - $35,000 3) 4915 Refund - $32,000 Staff reassessed these figures and now recommends that these revenues be adjusted down by a total of $60,000. Reasons for Revenue Adjustments: Most projects that staff is aware of have already gone through the planning application process. With that in mind, staff has reduced account 4735 Planning Application by $13,000. The City anticipates some single family home construction activity during the upcoming year. However, the plan checks for that construction activity has already been completed. Therefore, revenues for account 4813 Plan Check Fees have been reduced by $20,000. The biggest source of revenue in account 4915 Refund is made up of retrospective adjustments for the City s workers compensation and liability insurance. In some cases the City receives refunds from previous year payments. Upon further investigation staff discovered that it will not receive a refund in FY Revenues for this account have been reduced by $27,000. Below are the new revenue projections for those accounts: 1) 4735 Planning Application - $1,000 2) 4813 Plan Check Fees - $15,000 3) 4915 Refund - $5,000 Expenditure Adjustments: After recognizing the needed revenue adjustments staff looked for ways to reduce its expenditures. As a result, staff is recommending that the Administrative Services Director/City Clerk position be budgeted as a part time position in FY This results in a savings of $45,650 to the General fund. The goal is to then recruit for an individual that is experienced in this field. The most likely candidate would be a retired City Clerk that is interesting in working part-time. The current Finance Director is working part-time under this type of arrangement and this has worked out very well for the City. Staff recommends eliminating contract planning services in the amount of $13,400 and purchasing the $13,000 Cracksealer machine with Gas Tax Funds instead of General Funds. Staff also identified two additional expenditure items that needed to be added to the budget. The first was an adjustment of $11,000 related to the Proposition 84 planning grant. The other adjustment was to add a line item expense of $1,250 for the Citywide 2

3 Clean Up. The result of these adjustments reduces expenditures to the General Fund by $59,800. 1) Change Administrative Services Director/City Clerk position from full-time to part time ($45,650) 2) Eliminate Contract Planner Services ($13,400) 3) Cracksealer Machine with Gas Tax ($13,000) 4) Prop 84 Planning Grant Adjustment $11,000 5) Add line item for City Wide Clean Up $1,250 Total Reduction ($59,800) These adjustments allow the City to maintain a balanced preliminary FY General Fund operating budget with revenues totaling $2,080,168 and expenditures totaling $2,068,929. (Note: The attached worksheets do not reflect the expenditure reductions of $13,400 in Contract Planner Services and $13,000 for the Cracksealer Machine. Total General Fund expenditures are actually $26,400 lower than what is indicated on the worksheets. Due to technical difficulties staff was not able to update the numbers in the packet prior to distribution.) General Fund Highlights: 1) Police Services costs are going up. The primary reasons for the increases are the result of rising pension and workers comp costs. The City is also in the process of negotiating a new contract with Stanislaus County that could add additional costs to the contract. 2) Animal Control Services are going up. The operational costs of the new animal shelter are slightly higher than the old facility and the City now has a new debt service payment. 3) Staff recommends setting aside $15,000 toward the purchase of a new finance software system. The goal is to set this amount aside over the next couple years and purchase the new system in FY ) The City received a Proposition 84 planning grant in the amount of $92,000. 5) Staff recommends setting aside $30,000 to hire a grant writer consultant that can seek out funds for the City. The cost to the General Fund will be $5,000 with contributions also coming from the Redevelopment Agency $5,000, Sewer Fund $10,000, and the Water Fund $10,000. Public Facilities Development Streets: The Public Facilities Development Streets Fund is expected to have a beginning negative balance on July 1, 2011 of ($1,020,000). The deficit is a result of the Euclid Bridge Project, which was constructed in Fiscal Year 2006/2007, for approximately $1.3 million. The project was completed in anticipation of funding from in-coming Developer Impact Fees. Unfortunately, the housing market dropped significantly and new residential home building in the City declined to a near stop. The City is forecasting the construction of 17 new homes in FY that will reduce the deficit in this fund to ($950,283). Once the economy strengthens and new construction begins again we will collect Developer Impact Fees that will reduce the deficit even further. 3

4 Sewer Operations & Maintenance Fund: The Sewer 0&M Fund should have a negative balance of ($390,000) on July 1, However, sewer rates will be increasing on July 1, 2011 that will allow the fund to close its deficit and have a positive cash balance at the close of FY The rate increases are desperately needed to provide the funding needed to meet the upcoming annual debt service obligation of $1,190,000 starting in FY Residential Rate per month July 1, 2010 July 1, 2011 July 1, 2012 $59.42 $69.22 $82.37 Water Fund: On July 1, 2011 the metered water rate will increase to fund needed improvements to the water system. Typical single family home rates will see their flat rate per month decrease from $26.40 to $23.75 on July 1, 2011 but the metered water rate will increase from $1.00 per 1,000 gallons to $1.37 per 1,000 gallons. The impact on the monthly water bill for a single family home has been described as follows: User Type Current Bill Bill on July 1, 2011 Low user 400 Gallons $38.40 $40.19 per day Median User 750 $48.90 $54.58 Gallons per day Median User 750 Gallons per day $63.90, $ Budget Worksheets: Attached to this staff report are the budget worksheets. We have worked diligently to provide the most accurate data possible but please note that these are only worksheets and will be revised as necessary. Also it is our goal to adopt a preliminary budget by June 30, A preliminary budget is needed since the ultimate amounts of the major funding sources for the General Fund are still unknown (Property Tax, Sales Tax, Motor Vehicle Fees). Staff will bring back a final budget to the Council in September 2011 that includes the closed out figures for the FY budget as well as the revised revenue and expenditure projections for the FY budget. Other Notes: Account numbers for Professional Services are no longer used. All Professional Service account numbers have now been combined with Contract Services. Fund 4, 5 and 7 have been moved into the General Fund. 4

5 The Landscape and Lighting Districts and Benefit Assessment Districts have been moved to two funds only Fund 100 and Fund 200. We are still in the process of finalizing budget numbers for these funds. They will be presented at the June 13, 2011 City Council meeting. Recommendation: Staff suggests that the City Council review and discuss the FY 2011/2012 Preliminary Budget and then provide direction to staff. Worksheets: A) Staffing Levels B) Employee Cost Allocation Breakdown C) City of Hughson FY Preliminary Budget 5

6 Worksheet A Staffing Levels 6

7 Staffing Levels Adopted Budget Adopted Mid Year Adopted Propsed Account Technician II Account Technician II Account Technician II Account Technician II Account Technician II Account Technician II Account Technician II Account Technician II City Manager City Manager City Manager City Manager Code Enforcement Officer Code Enforcement Officer Director of Administrative Services Director of Administrative Services Director of Administrative Services Director of Admin. Service (Part Time) Director of Finance Director of Finance Director of Finance (Part Time) Director of Finance (Part Time) Director of Planning and Building Director of Planning and Building Director of Community Development Director of Community Development Maintenance Worker II Maintenance Worker II Maintenance Worker II Maintenance Worker II Maintenance Worker II Maintenance Worker II Maintenance Worker II Maintenance Worker II Maintenance Worker II Maintenance Worker II Management Analyst Management Analyst Management Analyst Management Analyst Office Assistant II Office Assistant II Parks and Maintenance Worker Parks and Maintenance Worker Parks and Maintenance Worker Parks and Maintenance Worker Parks and Maintenance Worker Parks and Maintenance Worker Parks and Maintenance Worker Parks and Maintenance Worker Parks and Recreation Coordinator Parks and Recreation Coordinator Parks and Recreation Manager Planning and Building Assitant Public Works Director/City Engineer Public Works Director/City Engineer Public Works Superintendent Public Works Superintendent Public Works Superintendent Public Works Superintendent RDA & Housing Analyst RDA & Housing Analyst Senior Accounting Technician Senior Accounting Technician Accounting Manager Accounting Manager Senior Building Inspector Senior Building Inspector Senior Maintenance Worker II Senior Maintenance Worker II Senior Maintenance Worker II Senior Maintenance Worker II Senior Parks Maintenance Worker Senior Water Dist. System Operator Water Distribution Systems Operator Water Distribution Systems Operator Water Distribution Systems Operator Water Distribution Systems Operator WWTP Operator II WWTP Operator II WWTP Operator II WWTP Operator II WWTP Operator I WWTP Operator I WWTP Operator I WWTP Operator I 29 Full Time Positions 24 Full Time Positions 16 Full Time Positions 15 Full Time Positions 1 Part Time Position 2 Part Time Position 7

8 Worksheet B Employee Cost Allocation Breakdown 8

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10 Worksheet C City of Hughson FY Preliminary Budget 10

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