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Home My WebLink About112106 5 Year ForecastFIVE YEAR FORECAST A Forecast of Financial Performance FY 2007-08 Through FY 2011-12 Purpose •Identify emerging trends •Apply existing policies into the future •Discuss alternatives and options Presentation •Revenues over the next 5 years •City Forecast •School Forecast •Conclusions Revenue Assumptions •Real Estate assessments returning to historic growth rates •State cap on car tax relief resulting in increasing costs to car owners •Telecommunications changes assumed to be revenue neutral • Reserve 100% of real estate revenue growth beyond that approved in FY 2008 Budget Real Estate Reserve Real Estate Revenue at Original Budget and Revised Growth Rates $34.6 million $700 $28.6 million $600 Millions $500 $400 $300 07-08 08-0909-1010-1111-12 Revised Revenue GrowthBudgeted Revenue Growth Real Estate Revenue Real Estate Appreciation 25.0% 20.0% 15.0% Real Estate Revenue 10.0% 5.0% $800 0.0% $600 Millions 01-02 03-0405-0607-08 09-1011-12 $400 Fiscal Years $200 $0 01-02 03-0405-0607-08 09-1011-12 Fiscal Years Personal Property Personal Property Revenues $200 $150 $100 Millions Automobiles Personal Property Tax $50 $- 120 01-0202-0303-0404-0505-0606-07 07-08 08-0909-1010-1111-12 100 Fiscal Years (Millions of Dollars) 80 60 40 20 0 FY 06-07F 07-08FY 08-09FY 09-10FY 10-11FY 11-12 StateResidents The Other 5 Formula Revenues $70 $60 $50 Millions $40 $30 $20 $10 $0 01-0202-0303-0404-0505-0606-07 07-08 08-0909-1010-1111-12 Fiscal Years General Sales TaxUtility TaxCox Cable FranchiseCell Phone TaxBusiness License Approved FY 07-08 Budget Utilities 7% City 43% Schools 50% City Forecast City Revenues $500 $400 $300 Millions $200 $100 $- 01-0202-0303-0404-0505-0606-07 07-08 08-0909-1010-1111-12 FormulaRestaurant TaxHotel Tax Cigarette TaxAmusement TaxOther Charges StateFederalFund Balance Expenditure Assumptions •No new programming is included •Salaries at 4.5% each year –1.5% general increase on July 1 –3.0% merit on anniversary date –Market & compression adjustments •Retirement at 1% each year starting in FY09 •Health Insurance Contribution at 10% each year •Contracts and supply accounts at 4.2% annual compound growth rates •Replacement equipment at inflation •Pay-as-you-go funding and debt service is based on the approved Capital Improvement Program (CIP) City Expenditure Forecast Projected Growth in City Expenses $500 $400 $300 Millions $200 $100 $0 01-02 02-03 03-0404-0505-0606-0707-0808-0909-1010-1111-12 City PersonnelFringe BenefitsOperating Accounts Debt ServiceReserves City Expenditure Forecast FY 2007-08 City Budget Reserves Debt Service 3% 11% FY 2011-12 City Forecast Salaries Reserves 39% Debt Service 3% 11% Salaries 37% Operating Costs 35% Fringe Benefits Operating Costs 12% 35% Fringe Benefits 14% City Revenue to Expenditures City Forecast $1,100 $1,050 $1,000 Millions $950 $900 $850 $800 07-08 08-0909-1010-1111-12 Total ExpendituresTotal Revenues School Forecast School Revenues $600 Millions $500 $400 $300 $200 $100 $- 01-0202-0303-0404-0505-0606-07 07-08 08-0909-1010-1111-12 FormulaStateFederalOther Revenues Expenditure Assumptions •Student enrollment will continue to decline –Reduction in staff •VRS will increase by ½% each year •Salary increases will be within 3.5% of payroll •Contribution to Health Insurance will increase by 10% each year •Repair and maintenance, and major equipment replacement baselines (includes buses) have been maintained •No changes in State or Federal mandates •Continue pay-as-you-go funding for modernization program School Expenditure Forecast $600 Millions $500 $400 $300 $200 $100 $- 05-0606-07 07-08 08-0909-1010-1111-12 SalariesFringe Benefits Operating CostsDebt Service School Expenditure Forecast FY 2007-08 School Budget CIP Transfer Debt Service 2% 5% Forecasted FY 11-12 Operating Costs CIP Transfer 19% 2% Debt Service 5% Salaries Operating 55% Costs Fringe 18% Benefits 19% Salaries 54% Fringe Benefits 21% School Revenue to Expenditures Schools Forecast $1,050 $1,000 $950 Millions $900 $850 $800 07-08 08-0909-1010-1111-12 Total ExpendituresTotal Revenues Debt Capacity For New Projects $70,000,000 $60,000,000 Charter Debt Capacity $50,000,000 $40,000,000 Total Capacity $30,000,000 if at $2,400 per $20,000,000 capita $10,000,000 $0 FY 07-08FY 08-09FY 09-10FY 10-11FY 11-12 City and Schools Forecast $2,200 $2,100 $2,000 $1,900 Millions $1,800 $1,700 $1,600 $1,500 07-08 08-0909-1010-1111-12 Fiscal Years Forecast ExpendituresTotal Revenues w/Revenue Set AsideForecast Revenues Conclusions •Use of the Real Estate Reserve would help to off set but not eliminate the projected deficit •Compensation, salaries and fringe benefits, are driving the rising cost of government •Debt capacity for City and School construction projects is very limited •Transportation Funding and Unfunded Health Care Liabilities are two major outstanding funding concerns