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Home My WebLink About040709 BUDGET WORKSHOP City Council Workshop #1 Second Year Update FY 2009-10 Budget and CIP April 7 th Agenda for Today Operating Budget Summary & Strategies ? Blue Ribbon Committee Recommendations Update ? Use of Fund Balances & One-time Sources ? Suspension of Transition Area Financing Program ? Employee Transition Program (ETP) ? Operating Budget Business Area Review ? Cultural and Recreational Opportunities ? Family and Youth Opportunities ? 2 Operating Budget Summary & Strategies Strategy Minimize impact on service delivery & programs ? Maintain City’s strong financial position ? Protect the future viability of the City’s economy ? Balance reductions across departments, ? employees, taxpayers, and reserves Avoid layoffs ? Minimize impacts on infrastructure projects in ? the Capital Improvement Program 4 Operating Budget –City Only (in millions) FY 2008-09 FY 2009-10 FY 2009-10 % Adjusted Approved Revised BudgetBudgetBudgetChange City Operations$ 731.6$ 740.5$ 727.7 City Debt Service100.0104.3102.2 City Pay-as-you-go56.166.654.9 Total City$ 887.7$ 911.4$ 884.8(2.9%) 5 Operating Budget –City Only (in millions) FY 2008-09 FY 2009-10 FY 2009-10 Adjusted Approved Revised % Change BudgetBudgetBudget City Operations $52.16$53.61$52.13(2.8%) Cultural & Recreation ? 114.81118.93117.69(1.1%) Family & Youth ? 52.9651.9355.386.6% Economic Vitality ? 179.48182.37181.92(0.3%) Quality Physical Environment ? 200.32202.89196.92(2.9%) Safe Community ? 87.8890.0189.54(0.5%) Quality Organization ? 16.8717.2316.90(1.9%) Quality Education –Libraries ? 27.1623.5617.27(26.7%) Other ? $ 731.64$ 740.53$ 727.75(1.7%) 6 Blue Ribbon Committee Recommendations Update Blue Ribbon Task Force Recommendations Revised FY 2009-10 City Under Council CompleteReviewDecision EXPENDITURE SUBCOMMITEE’S RECOMMENDATIONS: 3.1 Strategic Plan 3.2 Cap on Spending X City Council should keep spending in line with overall economy rather than rely on an absolute ? spending cap 3.3 Revise Budget Process X Review funding formulas annually ? 3.4 Business Processes, Efficiency, and Increased Labor XX Set specific benchmarks for continual increases in process efficiency and productivity gains ? X Increase the use of automation and technology to simplify processes and improve efficiency ? X Engage public and staff to identify and resolve problems on an on-going basis ? X Ensure that all budget policies are in writing and reviewed regularly ? X Reward efficient practices and suggestions ? X Create a hotline where by the public and city employees can suggest specific ideas ? X Identify and remove factors or policies that encourage counter-productive behavior ? 3.5 “Green”Processes and Energy Efficiency 3.6 Economic Development 3.7 Decision-Making Processes 3.9 Capital Expenditures X Proactively plan future for capital expenditures ? 3.10 Miscellaneous 8 X Introduce a cost recovery program for lost or damaged equipment ? City Under Council CompleteReviewDecision EXPENDITURE SUBCOMMITEE’S RECOMMENDATIONS (continued): 3.11 Next Steps X Consider phasing in the implementation of a Homestead Provision and identify potential savings to offset ? N/A anticipated revenue shortfalls 4.2 Employee Compensation X Bring compensation plans more in line with the private sector ? X Limit total direct salary expenditures including merit increases o X Change policies under which employees receive merit pay (approximately 97% currently receive o merit pay) X End the current policy of providing uniform pay increases to allcity employees-tie pay to o performance X Provide city manager with flexibility to recognize and differentiate levels or employee o performance X Consider Health Savings Accounts (HAS’s) and Health Retirement Accounts (HRA’s) as used in o the private sector X Reduce overall number of city employees (1% reduction in full time employees would save $3 million) ? X Evaluate the city’s current “No Layoff”policy ? X Reduce the number of paid holidays provided to city employees from 11.5 to 10 to match federal ? employees X Discontinue policy of giving employees a paid day off on their birthday ? REVENUE SUBCOMMITTEE’S RECOMMENDATIONS: 8.1 and 8.2 Homestead Provision X Offset some real estate tax revenue loss through expenditure reductions o 8.3 Surplus Property 8.4 Equity Concerns 8.5 Fees and Charges 9 XX Fees should be adjusted at least biennially for inflation to ensure cost recovery ? 8.6 Stimulate Economic Growth Use of Fund Balances & One-time Sources City/School Health Insurance Fund Projected June 30, 2009 Fund Balance = $30,454,167 ? FY 2010: ? Current Revenue = $103,253,861 ? Current Expenditures = $103,253,861 ? Use of Fund Balance for GASB45 = $8,400,000 ? School GASB45 payment is $3.7 million Reflects new ? valuation and a City GASB45 payment is $4.7 million ? savings of $500,000 Projected June 30, 2010 Fund Balance = $21,754,167 ? 11 Agriculture Reserve Program Projected June 30, 2009 Fund Balance = $14,727,864 ? FY 2010: ? Current Revenue $4,824,373 ? Current Expenditures$3,894,614 ? Transfer to Operating Budget $ 929,759 ? Use of Fund Balance ? For General Fund Operating Budget $3,070,241 ? For CIP$200,000 ? Projected Year-end FY 10 Fund Balance = $11,457,623 ? 12 School Reversion Special Revenue Fund Projected June 30, 2009 Fund Balance = $29,142,810 ? FY 2010: ? Current Revenue = not applicable ? Current Expenditures = not applicable ? Use of Fund Balance School Operating Budget = $3,276,367 ? Use of Fund Balance School CIP = $13,936,308 ? Use of Fund Balance City Operating Budget = $4,800,000 ? Use of Fund Balance City CIP = $4,000,000 ? Projected June 30, 2010 Fund Balance = $3,130,135 ? 13 Major Projects Projected June 30, 2009 Fund Balance = $14,747,967 ? FY 2010: ? Current Revenue $17,906,056 ? Current Expenditures $17,906,056 ? Planned Use of Fund Balance ? Major Projects Fund$3,145,645 ? General Fund Operating Budget$1,000,000 ? Projected June 30, 2010 Fund Balance = $10,602,322 ? 14 TGIF Projected June 30, 2009 Fund Balance = $2,058,236 ? FY 2010: ? Current Revenue$18,599,211 ? Current Expenditures $18,387,061 ? Transfer to General Fund Op. $212,150 ? $787,850 Fund Balance to General Fund Op. ? Projected June 30, 2010 Fund Balance = $1,270,386 ? 15 City Council Target = 10% General Fund Of the Next Year’s Revenues Projected June 30, 2009 Fund Balance = $144,133,622 ? Sandbridge TIF Surplus9,000,000 ? School Reversion Special Revenue Fund8,800,000 ? Total Projected June 30, 2009 Fund Balance $161,933,622 ? Less: ? Loans, Advances, & Encumbrances$17,000,000 ? FY 09 School Revenue Formula-7,169,220 ? Future uses of Fund Balance16,949,371 ? Use of Fund Balance for Operating Budget 4,800,000 ? Use of Fund Balance for CIP 23,912,998 ? nd $9.9 million included in original CIP 2year ? $10.0 million used as swap for pay-go financing ? $4.0 million used from School Reversion Special Revenue Fund ? Projected June 30, 2010 Fund Balance = $106,440,473 ? Projected Current Revenue for FY 2010 is $1,044,852,284 ? 16 Projected Target = 10.19% Suspension of Transition Area Financing Program What is the Transition Area Development Plan? In 2003, the City Council approved a plan for low-density ? development (approximately 3,000 homes). Plan was developed with Council and citizen input. ? Development pays its proportionate share of ? infrastructure and operating costs. Plan was last updated to City Council in 2007. ? 18 Transition Area Financing Parameters: Financing Plan is analogous to a TIF. ? Increment based on difference between value of house ? in the Transition Area and fiscally neutral home value outside. No impact on Schools Revenue Sharing Formula - ? (Schools would receive their portion of real estate taxes through the revenue-sharing formula to deal with School infrastructure needs). Debt Financing --debt would be issued to fund the ? required infrastructure. Concurrency –all infrastructure required would begin ? construction within six years of the last home built. 19 What has changed since the Transition Area Financing Plan was approved? Rate of home construction has been slower than ? originally anticipated 900 homes projected by FY 2007-08 versus 151 actual. ? Funding has come in much slower than expected ? $1.4 million projected to have been received by FY 2007- ? 08 versus $296,121 actual The demand for expensive homes is moderating ? Infrastructure/Right-of-Way costs have significantly ? increased above original projections $125.3 million originally projected versus $190.1 ? million in 2007, which represents over a 51% increase 20 What has changed since the Transition Area Financing Plan was approved? (Continued) 39.8% of the original plan was to be funded by the State ? versus zero now. The real estate tax rate is now 33 cents lower than the ? rate in original plan ($1.22 to $0.89). Limited debt capacity is available. ? Transition area developments have not generated a ? demand for these roads. The current demand for these roads has come from pre-existing homes or homes built outside of the transition area. 21 Recommendations for the Transition Area Financing Plan: Suspend the Transition Area financing strategy and ? eliminate the Special Revenue Fund. Prioritize all transition area road projects in the overall ? City road program. Appropriate FY 2007-08 Transition Area Special ? Revenue Fund Balance of $292,121 to the Roadways CIP for rural roads. Do not transfer Transition Area Funds to the Transition ? Area Special Revenue Fund. Instead, these funds will lapse to General Fund, Fund Balance. 22 Employee Transition Program (ETP) Fagan Stackhouse Operating Budget Business Area Review Cultural and Recreational Opportunities Cultural and Recreational Adjusted Approved Revised OpportunitiesFY 2008-09 FY 2009-10 FY 2009-10 Budgeted Amount$ 52,157,849 $ 53,608,629 $ 52,128,411 FTEs1,026.96 1,027.68 1,016.59 Includes Museums and Parks ? Cultural and Recreational and Recreation Departments Opportunities 6% of Totals $52.1 million in Revised ? Total FY10 Budget Operating Budget 53% of Business Area is ? covered by fees and state and federal revenue Revised FY10 Budget includes ? minor parks fee increases 25 Cultural and Recreational Opportunities Looking Ahead:Major Changes from Approved FY ?? 2009-10 Operating Budget: Aquarium’s Restless Planet ? Exhibits scheduled to open in Reduction of Educator position at ? late springLynnhaven House Parks and Recreation Additional Veterinary Tech ? ? implementing final phase of position at Aquarium Strategic Plan and expanding Elimination of Boys Baseball outdoor, fitness and pre- ? Program school programming Sportsplex and Field Hockey Reduction of 7 positions from ? ? contract and facility upgrades Schools Landscaping will enable greater use of Reduction of 2 positions in facility ? Sportsplex (contract mgmt.) Continuing the summer youth ? Reduction of part-time positions program in the Lake Edward ? (Strategic Plan) area 26 Questions . . . 27 Family and Youth Opportunities Family and Youth Adjusted Approved Revised OpportunitiesFY 2008-09 FY 2009-10 FY 2009-10 Budgeted Amount$ 114,814,852 $ 118,930,341 $ 117,686,164 FTEs1,096.21 1,093.66 1,084.98 Includes Health and Human ? Family and Youth Services Departments 13% of Opportunities Total Operating Totals $117.7 million in Revised ? Budget FY10 Budget 67% of Business Area is covered ? by fees and state and federal revenue The Health Department does not ? anticipate program cuts from State budget reductions 28 Family and Youth Opportunities Major Changes from Approved FY Looking Ahead: ? ? 2009-10 Operating Budget: Additional child care, foster ? Reduced funding for the Maternity ? care and adoption services Program in Health Increases to Mandated Eliminated State and Local ? ? Hospitalization Program Outpatient Treatment Reduced staffing at the Juvenile ? Increases to Mental Health in ? Detention Center Child and Youth Services Eliminated 3 positions in across ? other MH/MR programs Increases to the Jail ? Diversion Program Reduced emergency support ? funding to MR Clients Reduced contractual MH services ? Reduced in-home companion ? services to the elderly 29 Questions . . . 30 City Council Workshop #2 Second Year Update FY 2009-10 Budget and CIP April 14 th th Tentative Agenda . . .April 14 Capital Budget ? Roadways –Jason Cosby ? Water & Sewer –Tom Leahy ? Buildings –Dave Hansen ? Parks and Recreation –Cindy Curtis ? Economic Development –Warren Harris ? Storm Water & Coastal –Jason Cosby ? Operating Budget ? Economic Vitality ? Quality Physical Environment ? 32