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HomeMy WebLinkAboutStaff Report Presentation 04/23/2012 I' 4/23/2012 c L U W 'tr 4 xi \I85$ City Council Budget Workshop April 23, 2012 Workshop Agenda :~1 • Mid-Year recap • Changes since mid-year • Updated long term forecast • Risks and opportunities • Next steps in the budget process • Review departmental reductions • Q&A 1 4/23/2012 ' Mid-Year Update Recap • Assumptions analyzed & revised stz,L,,estipsw • Revenues & Expenditures revised .,.� $r► • Year end results integrated 1 • Regency revenues forecasted es". Z • PERS assumption change included • Structural deficit of approximately $1.6 million annually identified Changes since Mid-Year Update (201142) • Revenue assumptions updated: — Sales tax revenue received for 3rd quarter— cash receipts up 9.9% — One time real property transfer tax receipt received — Incremental building permit revenues revised - Overall revenues up slightly from mid=year forecast • Expenditure projections also up slightly from mid- year 2 • - • 4/23/2012 Changes since Mid-Year (2012-13) • Departments submitted $1.6 million of deficit reduction proposals • PERS investment earnings rate adjustment impact revised • Amount needed reduced to $1.51 million based on PERS rate adjustment impact • DRAFT 12-13 budgets prepared Other changes since Mid-Year • New budgeting system brought on line — Eden position budgeting module. • Integrates with the current payroll system • Captures all benefits and pay types • Improves accuracy • Replaced a 56 column, 688 row spreadsheet — Eden budget prep module • Integrates with financial reporting system • Replaces 50+ linked spreadsheets 3 4/23/2012 ' Forecasted Revenue Assumptions • Flat property tax revenues in 2013, 1.5% growth in 2014 • Sales tax revenues growing at 6.5% in 2013 (In-lieu up 10%, true up +$135K) base growing 3.2% • Regency revenues included beginning in FY-14 • No Deer Creek revenues included Forecasted Expenditure Assumptions • PERS.rates include golden handshake impact and updated investment earnings projection change • Health insurance grows at 9% annually • No COLAs included • 6 Firefighters formerly funded. by SAFER grant now funded by the General fund • Comp time payouts budgeted • $1.5 million of expenditure reductions included 4 • • • - 4/23/2012 Model Results (in millions) f ,- J Final is Bud ` Fcst 7 Fcst 14 ,Fcst; y 1 2012 IC 2013, ;i 2014 .20154 2016 _, �F _ I! ;l > 11 I1 Revenue" ' 411:IA> 317' 32 2 $33 2j 34 5f 35.6 _. { d {,I II I } Expenditures ,` h, 31 7, 32,:k4,44:3„3:4 _(44.73_ 34;8 Rev over/(under.) „-0114 0 1�.'40:2I, .A 3 08_- / 7-` ' - , Fund baI begcof`•year i 09 0'4 0:3 Wit 0.4 11 II Fundlbal entl illitear 10 41 -0 3 OA' 0 4; I:2 :-%.— Forecast Risks u ,t T a -,,� • PERS rates could increase more related to investment earnings, demographics, etc. • Health care costs could outpace estimates • Property values could continue to be negative or grow less than anticipated after 2012-13 • Redevelopment dissolution impacts remain fuzzy • Economic uncertainty remains 5 4/23/2012 Forecast Opportunities ",,:.;14'4: • Economic recovery continues • Tourism industry recovery underway • Economic development opportunities exist including SMART station area master plan and others • Absorption of vacant office and warehouse space is occurring • Franchise agreement updates could provide additional resources The Bottom Line t$. to .o • Budget cuts are necessary now to balance this fiscal year and next • Very slim fund balance at 6/30/2014 ($129,000) projected • Based on no surprises over the next two years! • Revenue generation options will continue to be evaluated 6 4/23/2012 Next Steps • Continue to review draft budget submittals and update as necessary • Develop and fine tune budget reports • Make adjustments based on differing Council consensus today • Present a draft budget document on May 7 • Present the budget for Council approval on May 21 Review of Budget Reductions • Departments brought their best case scenarios forward to minimize service level impacts • Alternate scenarios being pursued in some cases • If reductions are removed,,they should be added back elsewhere 4/23f2U12 t* Sm Department Reductions Review Departments will present proposed budget reductions for Council consideration and feedback 8