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PRESENTATION OF PROPOSED FY 2009-2010 CITY BUDGET

INTRODUCTION. In accordance with State law, the proposed City budget for fiscal year beginning July 1, 2009 and ending June 30, 2010 is presented for City Council review and actionBudget proposes funding for City operations, capital items and debt payments. Standard Initial Development of FY 2009-1

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PRESENTATION OF PROPOSED FY 2009-2010 CITY BUDGET

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    1. PRESENTATION OF PROPOSED FY 2009-2010 CITY BUDGET CALL FOR PUBLIC HEARING John L. Gray City Manager Lexington City Council Meeting May 26, 2009

    2. INTRODUCTION In accordance with State law, the proposed City budget for fiscal year beginning July 1, 2009 and ending June 30, 2010 is presented for City Council review and action Budget proposes funding for City operations, capital items and debt payments

    3. Standard Initial Development of FY 2009-10 Budget Department Heads provided input to Finance Director for Five-Year Financial Planning Model and results presented to City Council at February 2009 Retreat Department Heads submitted zero-based budget requests to Finance Department for 2009-2010 budget development in February 2009

    4. Standard Initial Development of FY 2009-10 Budget – (cont’d) Requests were reviewed with each Department Head by City Manager, Assistant City Manager and Finance Director and spending priorities were set in order to balance in April 2009 City Council reviewed the budget in detail during budget workshops held May 4th and 5th All legal requirements for balancing the budget for presentation to Council have been observed

    5. Key Questions for Budget-Making in 2009 Can basic City services and partnerships for services be continued? In the midst of a recession, can the City avoid a property tax rate increase? What is the lingering impact of industrial plant closings and job losses on the City’s budget? Will the federal economic stimulus funding help the City’s budget

    6. Key Questions for Budget-Making in 2009 – (cont’d) What effect will the housing market crisis and lack of consumer confidence (i.e. sales tax) have on the City’s budget? What toll will unfunded federal and state mandates have on the City’s budget?

    7. Guides for Setting Priorities in Proposed FY 2009-10 Budget City Council’s General Approach to Governing City Council’s Priorities from 2009 Retreat The Way Forward – Setting Priorities in Uncertain Times A Number of Council and Staff Priorities are Identical

    8. City Government’s Financial Position Has Eroded Since 2001 Loss of manufacturing plants and jobs due to: Mergers and Acquisitions New Technology Cheap Foreign Labor These losses have resulted in dramatic reductions in City property taxes and utility revenues

    9. Total Impact of Loss of Key Revenues and Jobs Since 2001 $9.2 Million Annual City Revenues Lost (equivalent value in property tax rate – 70.5 cents) Over 3,000 Jobs Lost 12 Plants Closed (Lexington Home Brands, Duracell, PGT, Stanley, Smurfit Stone, TI Industries) Mixed Signals of Recovery and Further Decline (New Restaurants, Uptown Lexington Business Activity, Surveys of Consumer Confidence and Factory Output Increasing, Layoffs at PPG)

    10. City Council’s General Approach to Governing Expand citizen involvement – Boards and Committees – and heed recommendations Employ professional staff for best advice available Pursue partnerships Plan, plan, plan!!! Make strategic investments Maintain financial integrity Take calculated risks

    11. City Council’s Goals from 2009 Retreat

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