BUDGET OVERVIEW

Transcription

1 BUDGET OVERVIEW

2 Declining Real Estate Values Revenues expected to decline by $700,000 Residential property taxable values down almost 10% for fiscal year Reduces taxes paid by residents in July and Dec Overall residential values having fallen by almost 40% since An average home worth $100,000 in 2008 would now be worth about $60,000. 2

3 Personal Property Tax The State of Michigan is considering eliminating the personal property tax Legislation has been introduced Initially it only affects small filers Eventually eliminate industrial personal property Fairly long transition period Negatively affect local governments and schools more than the State About 18.5% of City s taxable value is from personal property taxes 50% of that is Industrial 3

4 Fire Collaboration Proposal Fire collaboration expected to save $350,000 in first year Collaboration will save additional amounts in future years as revenues continue to decline Without collaboration, the $350,000 gap in the proposed budget will need to be filled by additional organizational reductions recommended by the City Manager 4

5 Garbage and Solid Waste Fund Current services continued for but contract changes will be needed for Property taxes no longer sufficient to provide all services Weekly trash pickup and recycling and public area pickup proposed to continue for Street sweeping reduced and moved to Streets funds Brush program reduced and moved to General Fund 5

6 Summary of Current and Prior Compensation Reductions New hires after In new hybrid pension plan New hires after No retiree health care, now in HCSP Employee pension contribution increased by 3% points effective July 1, 2011 (example to 6% for non union) 1% points effective July 1, 2012 (example to 7% for non union) 1% points effective July 1, 2013 (example to 8% for non union) City is now self insured for health care, reducing costs Increased co-pays and deductibles for current employees and retirees Reduced pension costs by reducing vacation accumulation 6

7 Employee Complement Changes Eliminate 4 positions across the City for Add 2 police officers for Total eliminated positions is now a net 90 since 2002 Eliminated 19 Administrators and Supervisors Eliminated 71 other positions Workforce has declined from 328 to 238 Decrease of over 25% 7

8 Workforce Reductions (Positions by Department) Fire 14 Police 5 DPW (Utilities/Streets) 28 Dispatch 11 Finance 5 Parks/Forestry/Cemetery 11.5 Legal 2 City Manager 1 Human Resources 1.5 Engineering 1 Community Dev/Inspection 4 Information Technology 3 Recreation 2 Clerk 1 Total Reductions 90 8

9 Number of Full-time Employees Using filled jobs prior to 2010, budgeted jobs thereafter, jobs held vacant to reduce costs during intervening periods 9

10 BUDGET OVERVIEW GENERAL FUND Revenue and Expenditure Details for

11 General Fund Revenue Components $9.0 $8.0 $7.0 $6.0 Millions $5.0 $4.0 $3.0 $2.0 $1.0 $ bgt est Income Tax Property Tax Revenue Sharing 11

12 Property Taxes for Homeowner (Using $100,000 Value in 2008) $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,455 $1,523 $1,558 $1,504 $1,347 $1,285 $1,160 $1,100 $1,

13 General Fund Revenue and Operating Expense $30.0 $25.0 $20.0 Millions $15.0 $10.0 $5.0 $ bgt est Revenue Operating Expense Capital & Transfers Inflation 13

14 BUDGET OVERVIEW WATER AND WASTEWATER FUNDS

15 Combined Utility Funds $25.0 $20.0 Millions $15.0 $10.0 $5.0 $ budget budget Revenue Expense 15

16 Share of Usage and Revenue 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Usage Water Rev Sewer Rev Total Rev Port Huron Townships 16

17 OVERVIEW PROJECTED UTILITY FUND REVENUES AND EXPENSES Projection 1 Without Rate Increases Projection 2 With Rate Increases 17

18 18

19 19

20 20

21 REVENUE GAP Once savings are depleted, there will be a revenue gap: Gap estimated to be about $6 million in Gap expected to be over $7 million by Progress being made, lower than prior estimates Savings appear to last one year longer - to Revenue difference now 40% to 50% to cover gap That gap is as large as the largest General Fund activity as follows: 21

22 22

23 Projection 2 With Rate Increase Eliminate Revenue Gap A projected 6% to 6.5% annual increase will increase rates more gradually and will: Eliminate revenue gap in Allow savings to last until revenues match expenses Avoid 40% to 50% rate increase in Limit adjustment to approximately $3 to $4 per month Rate increase may be reduced or eliminated in and beyond as debt service peaks All other assumptions remain the same 23

24 24

25 Comparison to Other Utilities Compared monthly City utility cost to: Natural Gas Electricity Cable TV Looked at prior nine years of rates Used actual Comcast cost for digital starter Used typical usage amounts and actual residential billings for DTE and SEMCO 25

26 Monthly Utility Rate Comparison $140 $120 $100 $80 $60 $40 $ Gas Electric Cable Water 26

27 Comparison to Other Communities Looked at average quarterly utility billings Called similar cities around the State (central cities that provide their own utility services) Called several St. Clair County communities Used 2,000 cubic feet per quarter as base for calculation ease (slightly larger than City s 1,730 average) 27

28 Average Utility Bills (2,000 Cu Ft) City Quarterly Monthly Bay City $ $95.74 Sault St. Marie Saginaw Lansing Mount Clemens Grand Rapids PORT HURON (proposed) $ $57.69 Ann Arbor* Portage Battle Creek Midland Jackson* Monroe Holland Muskegon Kalamazoo *Includes storm water fee Higher Lower 28

29 Average Utility Bills (2,000 Cu Ft) City/Township Quarterly Monthly Cottrellville Township $ $ St. Clair Township Marine City Clay Township Port Huron (proposed) $ $ St. Clair (w/o remote read) Algonac St. Clair (with remote read) Marysville East China Township Port Huron Township Fort Gratiot Township Kimball Township Higher Lower 29

30 BUDGET OVERVIEW