June 14 2011 Budget Workshop No. 1 11-12 Fiscal Year Budget Format

1. June 14 2011 Budget Workshop No. 111-12 Fiscal Year Budget Format Forwarding Financial Management by Exercising Best Practices, Policy Development and Information Dissemination Operation Momentum

2. Forward Momentum in the Budgeting Process • Office of the City Manager • Matthew Brower– City Manager • Office of Budget & Finance • John Lege-Chief Financial Officer/Finance Director • Cindy Kelley-Deputy Director of Budget & Finance • Rita Conn-Sr. Budget Analyst • Jennifer Love-Budget Analyst • Tammi Haslam-Grants Coordinator • Angela Sistarelli-Temple- Grants Accountant

3. Continued Momentum of the New Business Plan This continues the evolution of the City’s fiscal transformation efforts to produce a more transparent document, greater accountability to the citizens, and improve the accuracy, efficiency and timeliness of financial information. Today’s purpose is to solicit City Council direction of the previously adopted budget process, format, and key management principals. To continue to streamline the budget process and to ensure that the budget is clear and intelligible.

4. Workshop Schedule Schedule of FY 11-12 Council Work Sessions: • June 14- Budget Format Workshop* • June 28- Capital Projects & Replacement/Renewal Fund Workshop* • July 12- General Fund (and smaller ancillary funds) Workshop* • July 26- Enterprise Fund Workshop (Electric, Water/Sewer, Sanitation, Golf & Airport)* • August 9-Preliminary Budget Presentation Workshop* • TBA- 1st Reading Tentative Budget (Public Hearing) • TBA- 2nd Reading Final Budget (Public Hearing) *11:00 Council Lunch *11:30-1:30 Work Session (Council Chambers)

5. FY 11-12 Budget Format • There will be separate books for workshops versus public hearings in September. • The workshop books will have much greater levels of detail. The public hearing will be similar in nature to the current year format with some additional sections. • The Capital Improvement Plan (CIP) will be in a separate book. The work session for CIP will provide detail by project as well as anticipated available funding. • The “work book” format will be utilized again this year with enhancements: • Tabbed out by section • Footnotes related to changes/consolidations • Summary page outlining each areas major changes/initiatives • Items related to audit findings will be emphasized • The Fiscal Managers/Department Heads for the service areas will be involved in the presentation of their respective budgets.

6. Changes Between This Year’s Budget and Last’s • Key Management Practices are adopted and implemented. Financial Policies will be drafted for adoption. A Fund Balance Policy in accordance with GASB 54 will be presented for adoption. These continue to be updated and any changes will be presented to Council with the Budget. • Continuation of the Streamlining Process • Operating Budget • Migration to the State Chart of Accounts • Bringing the Internal Service Funds into the budget • Budgeting all dollars including reserves • Capital Improvement Program • Improved project request and tracking processes • Funding for Replacement/Renewal of IT & Facilities

8. Other Changes • Formally adopted Financial & Fund Balance Policies • Inclusion of ALL funds in the budget ( Internal Services) • Inclusion of reserves in the budget • Public Access- web based financial reports to be available monthly

9. Items of Discussion • 2012 Tentative Millage Rate • Fees & Taxes • Revenue Projections • Growth • Insurance • Personnel • Longevity • Pension • Salary

10. Millage Comparison Value of a mil (at 95% collection rate): 2009- 1 mill- $4.1M 2010- 1 mill- $3.7M *2011- 1 mill- $3.4M *Based on June 1, 2011 estimate from Property Appraiser Recommendation for FY 11-12 is to adopt the Roll Back Rate. This is the Revenue Neutral option.

11. Fees &Taxes • The same services will be provided at the currently established service levels • No fee or tax increases will be recommended in FY 11-12 unless it is needed to cover the true cost of service • Sanitation Commercial Fees are reduced by approximately 5% • The Fire Fee will remain at the current level for Residential and Commercial • The comprehensive fee schedule will be presented to Council for adoption along with the budget

12. Revenue & Growth Projections • We are not expecting to receive additional Stimulus dollars • SHIP dollars have been eliminated and we expect CDBG dollars to be reduced • Tax Revenues (sales tax, communications tax, gas taxes etc) are expected to be flat • Any recovery of Economic Improvement Program dollars will roll back into the program to fund future projects • Population growth is expected to be 3.1% • We expect a very modest increase in growth of new business and building throughout the City, but expect to budget conservatively

13. Insurance Estimated 3.7% increase to premiums for FY 11/12: The City is proposing to split the difference with employees in the following manner: the City absorb up to 2.7% of the increase and the employees absorb up to1%. * ALL FIGURES ARE ESTIMATES SUBJECT TO REVISION

14. Personnel • Longevity- no change recommended to current policy • Pension- • Expected 3% increases to plan contributions will be absorbed by fund balance within the pension prior to using General Fund dollars • An actuary has been hired by the City to do a thorough plan analysis and recommend any necessary changes • The total employee headcount of the City is expected to be approximately 983 Regular FT, 41 Permanent PT • No new or upgraded positions are being recommended without a compelling justifiable reason (as determined by the City Manager)

15. Personnel (continued) Salary Plan • The current fiscal year saw the following salary increase: • The increase for Regular FT employees earning <$45,000 was a flat dollar range from $500-$900 (2% not to be below $500) • The increase for Regular FT employees >$45,000 was 1% NOT to exceed $750. • A pro rata share plan was utilized for the Permanent PT employees • Cabinet members were excluded from the plan • Employees on initial probation or performance improvement/disciplinary probation were also excluded • For FY 11/12 an increase of up to 1.5% is being considered based on funding availability

16. Other items • Recommendation to hold the line on charitable giving requests to current year levels • We will continue to implement prior audit finding recommendations into our processes • Continued focus on job creation as well as creating community wealth • Continued focus on tying CIP related projects to Economic Development

17. Strategies for Fiscal Momentum • Business Cycle Ebbs & Flows • Refrain from use of survival techniques • Continued reliance on a team effort

18. Questions/Comments