HomeMy WebLinkAboutAgenda Packet - February 23, 2009 - CC Special Mtg. .,
. ..
.. .
z. z5 al ,, , ,
, er ,,,,:..., ,
,e, —
14
1
,AZUS '
AGENDA ITEM
TO: THE HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ALAN KREIMEIER, DIRECTOR OF ADMINISTRATIVE SERVICES/ CFO
VIA: F. M. DELACH, CITY MANAGER
DATE: FEBRUARY 23, 2009
SUBJECT: FISCAL YEAR 2008-09 MID-YEAR BUDGET REVIEW
RECOMMENDATION
There is no recommendation. Staff will be providing a presentation at the meeting in
order to provide Council with an update of the City's fiscal condition in preparation
for the upcoming budget process.
BACKGROUND
The FY 2008-09 Budget was adopted in June of 2008 with an operating surplus in the
City's General Fund. Since this time, events have occurred which impact the City's
finances. The purpose of the mid-year review is to identify and explain these impacts
to the Council and to seek direction with respect to both the remainder of the current
fiscal year and the preparation of the budget for the upcoming year.
Based upon the direction received from Council at the workshop, staff will prepare
necessary actions to implement any changes and provide them to Council for
approval.
FISCAL IMPACT
There is no fiscal impact as a result of this staff report.
Mid-Year Budget
Presentation
February 23 , 2008
Mid -Year Overview
• Progress towards major goals continues
• Post Audit review of FY 2007-08 ending General Fund balance
• Projected FY08-09 year end General Fund balance exceeds FY04-
05 by Approx. $4 Million, funds that have increased reserves.
• Impacts from newly adopted State Budget
• Conservative fiscal practices are called for in Light of economic
downturn. Goal of 5% M&O reduction next year, continued hiring
freeze.
Continuing Progress
Completion of Foothill Crossing Commercial Center
Completion of Water Treatment Plant
Completion of Block 36 Utility Relocation/ Undergrounding
Project
Improved Management of Workers Compensation program
Budgeted Capital Projects on Track for Completion
Development Agreement with Target executed
New Developer Selected for Downtown
Completion of 5 Year Pavement Plan- Begin Yr. 6
Revised
Adopted Revised
Budget Net Revisions Budget
Beginning Balance (June 30, 2008) .` 10,598,010 (1,574,930) 9,023,080
FY 08-09 Estimated Revenues 32,182,150 64,450 32,246,600
Transfers In 1,005,580 60,000 1,065,580
Total Sources 33,187,730 124,450 33,312,180
FY 08-09 Estimated Expenses 28,848,160 258,570 29,106,730
Transfers Out 4,221,790 61,030 4,282,820
Total Uses 33,069,950 319,600 33,389,550
FY 08-09 Surplus/(Deficit) 117,780 (195,150) (77,370)
Ending Balance 10,715,790 (1,770,080) 8,945,710
Economic Factors
• Annual inflation rate has gone from 5% to
essentially zero from August to December
• Interest rates have fluctuated wildly and
are now at historic lows
• The Dow Jones Index has gone from
14, 000 this last summer to under 8 ,000
• Unemployment continues to rise
• Housing market continues to slump
Revenue Issues
• Property Taxes
• VLF in Lieu Taxes
• Sales Tax
• Utility Users Tax
• Interest Income
• Business License Taxes
Expenditure Issues
• Impacts of State Budget are minimal
• Liability/ Workers Comp Expenses (decreased)
• Pavement Mgmt. Program Costs (decrease in available
funds)
• Potential Fire Safety Contract increases
• Fuel price fluctuations (effect on contracts, etc.)__.
• Employee contract cost impacts (impact of negotiated
COLA's)
Need for Fiscal Prudence
In recent years, through prudent management
and frugal spending , the City actually spent less
than what it received in revenues.
• The savings have gone back into the General
Fund allowing reserves to increase and insure
their availability for contingencies
• Recession expected to continue
• The City's ongoing revenues are at a level that
requires continued financial prudence.
Preliminary Budget Directives
• Reduce General Fund related M&O costs by 5%
• Minimize General Fund Capital Outlay
Expenditures
• Any new Program Expenditures must be
matched with new revenues (Grants, etc. )
• Freeze all vacant positions until reviewed by City
Manager to determine if immediate critical need
exists for replacement
• New positions only if supported by increase in
ongoing revenues or mandated by Council
policy
Budget Philosophy
• Align Department Budgets with Council Goals.
• Prepare an easily understood working budget
document that will be consistent from year to
year and a reference document during the year.
• Match operating revenues with operating
expenses. (checking account)
• Use of reserves for capital and one time
discretionary expenses. (savings account)
• Maintenance of essential services
FY 08-09 Budget Issues
• Preserving City services
• Necessity for Utility rate studies (Water,
Sewer, Electric)
• Focus on cost cutting/ revenue generating
measures
• Impacts on City of continued State/
Federal response to recession conditions
• Difficulty/ uncertainty of financial projection
in the current economic climate
FY 08-09 Budget
• February 10 Budget materials distributed to Departments
• February 23 Mid-Year Budget review at Utility Board meeting
• March 5 Final date for Personnel Request Submittals
• March 19 Departmental Budget requests returned to Finance
• April 6-23 Budget meetings with Departments & City Manager
• May 7 Preliminary Budget balanced by City Manager
• May 18 City Council Budget Study Session (tentative date)
• June 1 Final Budget adopted by City Council