City Council Work Session STAFFING & FY 2017 BUDGET MAY 31, 2016

Transcription

1 City Council Work Session STAFFING & FY 2017 BUDGET MAY 31, 2016

2 Public Safety Pensions Recommended 2016 Contribution = $4,652,215 Police Fire Total Budget $ 1,657,195 $ 1,708,505 $ 3,365,700 Amended $ 2,264,616 $ 2,328,400 $ 4,593,016 $ 607,421 $ 619,895 $ 1,227,316

3 FY 2017 Budget Calendar May June July August September October November December Financial Forecast & Public Safety Staffing Priorities, Programs, Service Levels & Armory Water, Refuse, Fees & Revenues Capital Improvement Program Budget & CIP Discussion Proposed Budget Finalize Budget & CIP Adoption Additional Work Sessions as needed

4 General Fund Financial Forecast Not a proposed budget planning tool Departments have not submitted budget requests Estimate based on available data and historical trends Anticipate future needs and available resources Identifies trends and warning signs Forecast for next 5 year period Helps to guide discussion and focus for budget process

5 % Chg FY 2017 % Chg 2018 Description 2014 Actual 2015 (Unaudited) 2016 Budget Estimate FY Estimate Begin. unassigned fund bal. 7,287,240 6,566,847 6,814,501 6,684,501 5,560,269 % Chg FY Estimate % Chg FY Estimate % Chg FY Revenues & other sources Property tax 5,841,717 6,206,396 6,821, % 6,821, % 6,821, % 6,821, % 6,821, % State income tax 3,082,472 3,425,651 2,461, % 3,307, % 3,335, % 3,365, % 3,394, % Sales tax 5,345,162 5,405,142 5,419, % 5,459, % 5,486, % 5,514, % 5,541, % Home rule tax 2,687,324 2,696,459 2,768, % 2,723, % 2,747, % 2,772, % 2,797, % Food & beverage tax 1,441,263 1,526,658 1,443, % 1,541, % 1,564, % 1,588, % 1,611, % Misc taxes 2,382,471 2,637,628 2,379, % 2,642, % 2,747, % 2,856, % 2,970, % Licenses & permits 298, , , % 311, % 311, % 311, % 311, % Fines & fees 376, , , % 325, % 325, % 326, % 326, % Use of money & property 2,103,512 2,242,338 2,295, % 2,278, % 2,321, % 2,366, % 2,411, % Intergovernmental 1,387, , , % 918, % 936, % 955, % 974, % Current services 938,296 1,231,593 1,068, % 1,027, % 1,047, % 1,068, % 1,089, % Miscellaneous revenue 48,428 72,048 36, % 51, % 52, % 53, % 54, % Transfers & other 7, , , % 6, % 6, % 6, % 6, % Total revenues 25,939,892 27,257,282 26,578, % 27,412, % 27,705, % 28,004, % 28,312, % $ Change 2,105,535 1,317,390 (679,232) 834, , , ,382 Expenditures & other uses Personnel 19,950,842 21,584,123 20,815, % 22,995, % 23,915, % 24,872, % 25,867, % Contractual 3,323,829 3,196,277 3,180, % 3,341, % 3,428, % 3,518, % 3,611, % Commodities 1,254,915 1,190,349 1,258, % 1,292, % 1,328, % 1,364, % 1,402, % Capital outlay Other 118, , , % 369, % 373, % 377, % 382, % Debt service Transfer Out 1,835,550 1,146,791 1,168, % 1,193, % 1,210, % 1,227, % 1,245, % Total expenditures 26,484,094 27,479,660 26,708, % 29,192, % 30,257, % 31,361, % 32,508, % $ Change 2,826,158 (771,610) 1,828, , , ,888 Revs over/(under) expenditures (544,202) (222,378) (130,000) (1,780,478) (2,551,985) (3,356,771) (4,196,167) Reclassify fund bal per GASB 54 (176,191) 470,032 End. unassigned fund bal. 6,566,847 6,814,501 6,684,501 5,560,269 3,914,175 (2,184,546) (2,740,053)

6 General Fund Financial Forecast Structural deficit minimized Revenues good Past efforts to control costs Deficit forecast for FY 2017 largely driven by increases in pension costs for fire and police FY 2017 forecast Revenues increase by $834,342 (3.1%) Expenditures increase by $2,484,820 (8.5%) Deficit = $1,780,478

7 Cost Drivers Police & Fire Pension Costs 2016 combined recommended increase = $1.3M 2017 Police recommended increase = $355, Fire recommended increase =?? IMRF Contribution Rate decrease from 12.77% to 12.31% Raises = $286,520 Heath Insurance = $243,180 Deficit ($1,780,478) less F&P Increase ($1,655,000) = $138,963

8 Concerns State budget Income Tax Water payments Grants Agreements Fire pension recommendation

9 Expenditures FY 2016 Budget & Recommended Pension Administrative Services $ 1,500,340 Contracts & Subsidies $ 1,606,840 Finance $ 892,280 MIS $ 376,230 Public Works $ 3,156,270 Economic Development $ 849,575 Police $ 7,104,928 Community Development $ 591,030 Communications & Records (911) $ 1,654,515 Fire $ 6,434,951 Parks & Recreation $ 4,677,185 $ 28,844,143

10 Financial Goals Ensure fiscal stability of organization Maintain priority programs and services Maintain capital investments: facilities, equipment and infrastructure Attract, develop and retain quality workforce

11 Balanced Budget Short Term Short term efforts largely tailored toward cyclical problem: Using reserves planning fund Reducing or eliminating capital expenditures Leaving positions unfilled or open temporarily Deferring liabilities infrastructure, OPEB Underfund replacement plans Control spending strategies to reduce expenditures Between 2010 and 2014 non personnel expenses decreased significantly Cut positions without service or program reduction Do more with less Problem with cyclical strategies not sustainable for long

12 Sustainable Strategies Develop sustainable structure of revenues and expenditures Lower level of service Reduce or eliminate programs Reduce personnel Raise revenues Requires a balanced approach has to include addressing liabilities (pension, OPEB and infrastructure) Deficit Elimination Revenue Strategies Economic development Cost recovery from fees Support for tax increases linked to specific purposes Enterprise funds (Storm) or special districts (Park or Library) Cost savings strategies Service delivery alternatives Asset management Investments in technology Address rate of increase in personnel costs

13 2016 Expenditures Public Safety Expenditures $ 15,194,393 Non Public Safety Expenditures $ 13,649,750 $ 28,844,143 Projected FY 2017 Deficit $ 1,780,478 Percent of Total 6% Percent of Non PS 13%

14 2017 Forecast Expenditures Personnel $ 22,995,840 79% Contractual $ 3,341,469 11% Commodities $ 1,292,953 4% Other $ 369,051 1% Transfer Out $ 1,193,556 4% $ 29,192,869 Non personnel $ 6,197,029

15 2016 Expenditures Professional Services $ 173,930 Training & Travel $ 116,140 Property Maintenance Private $ 225,000 Maintenance Equip/Bldg/Comp/Veh $ 370,345 Contractual Not specified $ 149,815 Motor Vehicle Supplies $ 128,760 Bad Debt Expense $ 200,000 Replacement Programs $ 727,117 Contribution to Handivan $ 206,550 Animal Control $ 253,965 SSA $ 167,920 Electricity $ 306,695 Gasoline $ 191,945 $ 3,218,182

16 2016 GF Personnel Costs inc. Pension Regular Employees $ 10,691,070 Temporary Employees $ 131,470 Overtime $ 357,900 Special Pay $ 20,080 Life Insurance $ 23,010 Workers Compensation $ 114,935 Health Insurance $ 1,796,470 Retiree Health Insurance $ 384,780 OPEB Contributions $ 109,325 Health Savings Accounts $ 169,380 Pension Contributions $ 5,311,950 Social Security $ 448,245 Miscealaneous $ 6,930 $ 19,565,545 Public Safety Pension Costs $ 4,661,700 24% Regular Pension Costs $ 650,250 3%

17 Public Safety Pensions

18 Pension Cost History Thousands $5,000 $4,500 $4,652 $4,000 $3,500 $3, active members / $49,489 per active member $2,851 $3,046 $3,366 $2,500 $2,444 $2,089 $2,268 $2,000 $1,571 $1,530 $1, = Over $5M $1,500 $1,000 $924 $715 $749 $1,011 $1,043 $1,136 $1,103 $1,001 $1,031 $500 $ Police & Fire IMRF

19 Funded Ratio Year Fire Police IMRF % 71% 89% % 71% 64% % 63% 63% % 59% 60% % 62% 60% % 58% 63% % 59% 70% % 54% 69% % 52%

20 2016 Contribution Level Column1 Fire Police Total Prior recommendation $ 1,708,503 $ 1,657,194 $ 3,365,697 GASB % funding target $ 368,154 $ 356,693 $ 724,847 Changes in Assumptions $ 325,345 $ 275,747 $ 601,092 Actual plan Experience $ (44,106) $ 4,685 $ (39,421) Recommended Contribution $ 2,357,896 $ 2,294,319 $ 4,652,215 State Minimum Required $ 1,569,321 $ 1,621,627 $ 3,190,948

21 Police Actuarial Report Recommended contribution increase = $355,999 for total of $2,650,318 (80.1% of payroll) Funded ratio drop from to 49.28% Liabilities increase $4,456,960 Investment loss = $2,011,715 An annual investment return of 10.55% would be needed to cover outgoing expenses Composite rate of return since 2008 = 3.19%, assumed return 6.75% Inactive (57) to active (50) ratio 114

22 Police Pension As indicated last year, municipal contributions and contributions by active police officers are being used to pay current pension payments. These funds are generally the major source of new funds for investment purposes to accumulate reserves. Even with improved investment returns, the maturing of the employee group requires that the fund be carefully monitored during the next few years to assure that an orderly funding progress is maintained. If investment income remains insufficient to pay the existing pensioners, then municipal and participant contributions will continue to be used..it is not unnoticed that annual pension payments far exceeded the investment income during 2015 and an annual investment return of 10.55% would be needed to cover the outgoing benefit expenses. The Trustees should be advised that this is a potentially dangerous situation regarding the fund. Clearly municipal contributions will remain at these levels until the fund can annually increase its investment return. As would be expected in this situation, all of the assets available for investment have been committed to provide benefits for existing pensioners and beneficiaries. Additionally, pension disbursements on an annual basis total over $2.4 million As a percentage of the total pension liabilities, the liabilities for inactive participants represent over 66% of the total liabilities. This continues as a disturbing statistic. However, once again, we suggest that the City make an additional cash infusion into the fund to stabilize its performance.

23 Options Reduce sworn officer count Civilianize public safety work when possible Utilize part timers when possible Improve investment returns Make additional cash contributions Advocate for changes to downstate police & fire system Consolidate investment function (Sheriffs SLEP)

24 Investment Returns years 5 years Police 3.98% 9.91% 5.64% 3.51% 6.38% 6.51% 5.88% Fire 4.40% 7.97% 7.40% 1.96% 9.95% 6.59% 5.55% Average 4.19% 8.94% 6.52% 0.78% 8.17% 6.55% 5.72% IMRF 6.01% 20.26% 13.77% 0.29% 13.60% 13.35% 10.67% Difference 1.82% 11.32% 7.25% 1.07% 5.44% 6.80% 4.95%

25 Options Reduce sworn officer count Civilianize public safety work when possible Utilize part timers when possible Improve investment returns Make additional cash contribution Advocate for changes to downstate police & fire system Consolidate investment function (Sheriffs SLEP) Pay minimum required by state $1.46M less in 2016

26 Process Set target Staffing Analysis Programs/Services Prioritization Revenues applied to deficit? Fees Cost of Service Timing: Attrition, transfer, advanced notification Alternative service delivery

27 Overall Comparison Using comparable identified by data analysis Total FTE Range from 130 to 371, Average 227 Galesburg 227 including transit FTE per 1,000 Range from 5.1 to 10, Average 7, Traditional measure 8.5 Galesburg = 7.1

28 Staffing Compare East Moline East Peoria Belvidere Freeport Carbondale Alton Galesburg Danville Quincy Urbana Normal Average 2010 Population 21,302 23,402 25,585 25,638 25,902 27,865 32,195 33,027 40,633 41,250 52, Total FTE/1, FIRE Sworn Civilian POLICE Sworn Civillian

29 Fire Department

30 FIRE DEPARTMENT OPTIONS Option Budget Impact Spending Option Explanation Notes $ (117,124) Part time Firefighter per position $ (351,372) Replace 1 FT with 1 PT per station $ (23,000) Create Housing Program Manager Consolidate Inspections programs Eliminate Fire Rental Inspector, Create Housing Program Manager Consolidate Rental, Building and Code Inspectors $ (87,000) Eliminate overtime minimum manning $ (302,500) Reduce minimum manning from 11 to 10 $ (605,000) Reduce minimum manning from 11 to 9

31 Police Department

32 POLICE DEPARTMENT OPTIONS Option Budget Impact Spending Option Explanation Notes $ (108,800) Reorganize 911 Supervisor position $ (140,160) Eliminate staff & services captain $ (105,120) Eliminate administrative Sergeant $ (37,120) Replace administrative sergeant with Civillian $ (98,000) Replace 8 hour shift with 12 hour $ (292,000) Eliminate one patrol position (4 positions) $ (131,400) Appoint Public Safety Director Combine Police & Fire Chief

33 Police Services Study Assessment of the efficiency and effectiveness of Police Service operations Identifying improvement opportunities relating to service delivery, organization and staffing, including management functions. Staffing allocations and deployments Processes, policies and practices Estimated cost $40,000 to $60,000