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TO: Honorable Mayor and Members of the City Council
FROM: Francis M. Delach, City Manager
SUBJECT: City Manager’s Budget Message for Fiscal-Year 2011-2012
DATE: June 06, 2011
I am pleased to present the Budget for the 2011-2012 Fiscal Year. The Annual Budget is the Council’s most important
annual legislative responsibility. Budget preparation identifies community standards with respect to acceptable service
levels for our citizens and the establishment of service priorities by the City Council. This document outlines and describes
specific programs, along with a financial plan designed to meet the service requirements of our citizens for the next twelve
months.
At a time when many surrounding cities in the San Gabriel Valley, as well as throughout the State, are facing deficit and
financial crisis, I am proud to report that thanks to the Council’s prudent approach and fiscal responsibility we are on solid
financial ground.
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The 2011-2012 Budget stays within current projected resources. In addition, the Budget contains staff initiatives to
continue implementing the City Council’s goals and objectives. This can continue to be accomplished if prudent care is
exercised in maintaining the philosophy that the City cannot spend what it does not have. Cost containment measures
will remain in effect, and we will actively seek new non-tax revenue sources to increase the City’s General Fund
resources.
Again this year, as in the past several years, we will keep a careful watch on the State budget and legislative action that
may have an impact on the City’s financial condition. The strategy for preparing the 2011-2012 Budget documents was
designed to facilitate a balanced budget, to maintain and where necessary, enhance service levels, and to meet the City’s
non-discretionary financial commitments for the 2011-2012 Fiscal Year.
Revenues
General Fund revenues and transfers reflect a decrease of 1.56% from the prior year’s budget. Property tax revenues
and interest income are the major factors in the reduction. However, sales tax revenues are anticipated to increase due
to a full year of sales activities from Target. Other major revenues are anticipated to contract or remain at prior year levels
as the economy as a whole continues to respond to the real estate and stock market collapse. An additional factor
affecting Azusa is the concurrent decline in water consumption and related revenues in response to conservation efforts.
A detailed list of revenue projections is included in the Summary section of this Budget.
Expenditures
General Fund expenditures, operating transfers out and funding for capital outlay ($34,840,215) show an increase of
3.06% for FY 2011-2012. This was a result of additional program activities and personnel costs. However, wherever
possible, departments were instructed by the City Manager to reduce or eliminate discretionary expenses and requested
to defer new initiatives until a financial review of the City’s finances at mid-year. Summaries of expenditures by
Department for all funds and the General Fund specifically, are included in the Budget in the Summary section.
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General Fund Summary
The following schedule summarizes the revenues, expenditures and changes in the General Fund balance for FY 2011-
2012. The primary focus of attention continues to be the General Fund which accounts for the majority of non-utility
operations, including, Police, Fire and General Government.
There is a one-time or discretionary expenditure for the FY 2011-2012 Budget for capital equipment. The overall
condition of the City’s non-general funding sources is included in the Summary section of this Budget.
Beginning Projected General Fund Balance 7/01/11 $ 7,185,030
FY 11-12
Projected Revenues& Transfers In 35,033,660
Balance Available 42,218,690
Less: Operating Expenses& Transfers out (34,812,005)
Preliminary Projected Balance @ 6/30/12 7,406,685
Less Discretionary & One Time Expenses
Capital Equipment ( 28,210)
Projected Fund Balance @ 6/30/12 $ 7,378,475
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Summary
This Budget, as presented, provides for the maintenance of service levels for the majority of City programs. However,
there are several items that may affect our ability to maintain our current service levels. For those reasons, we have
prepared a financial plan that will maintain required services within our operating revenue base and will not be reliant on
one-time sources of funds. The projected General Fund un-designated reserves as of June 30, 2012 will be $7,378,475.
Our goal is to continually look at our revenue resources, continue to monitor our expenditures, and implement efficiencies
wherever possible.
The 2011-2012 Budget represents a program designed to ensure that Azusa remains an outstanding City in which to live,
work, and conduct business. Furthermore, I believe these programs reflect your priorities, as well as the priorities of the
community, as they can be achieved within the City’s financial resources.
Respectfully submitted,
Francis M. Delach
City Manager
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