1 Presented to the City Council By Dale Fisseler, City Manager Karen L. Montgomery, Assistant City...

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Presented to the City CouncilBy

Dale Fisseler, City Manager

Karen L. Montgomery, Assistant City ManagerHoratio Porter, Budget Officer

August 11, 2009

City Manager’s Proposed Budget FY2010

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Economic Drivers and

Update of 5 Year Financial Forecast

Karen MontgomeryAssistant City Manager

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June 2008 Unemployment

- National 9.5%

- State 7.5%

- DFW 8.2%

Consumer Confidence In 1985 = 100%

- June 2009, National = 46.6%

- June 2009, State = 73.3%

National Gas Production Tax Collections are down 42% for FY2009

Dow Jones Industrial Average History 2008-2009

Overview of FY2010Economic Drivers

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2008 2009

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The recession has hit Fort Worth

Overview of FY2010Proposed Budget

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Revenue Impacts

-Foreclosure increase

-Unemployment rate climbing

-Decline in retail sales

-Decline in construction

-Decline in gas well drilling

-Decline in interest income

Expenditure Impacts

-Continued growth: infrastructure demands & other services

-Rising pension costs

-Rising healthcare costs (employees & retirees)

-Increasing contractual costs

-Fewer employees; less pay

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Overview of FY2010Proposed Budget - Recommendation

• Overview of CFW budget– $1.2 billion – Comprised of 20 different operating funds

• General Fund represents 41% of all expenditures

• March 2009:– 5 year financial forecast– GF expenditures outpacing revenues– Budget discussions considered impact on forecast

• Forecast updated for Proposed FY2010 Budget

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Navigating the Fiscal Crisis Audio Conferences

• Opportunity in Crisis– Improve the Organization – Resize or Restructure– Develop New Partnerships– Focus on Community Priorities– Proactive, not Reactive– Embrace the Future’s Possibilities

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Navigating The Fiscal CrisisFiscal Monitored Communities

• East Providence, RI Polk County, FL• Hickory, NC Prince William County, VA• Jefferson County, CO Rancho Cordova, CA• Las Vegas, NV Rockville, MD• Overland Park, KS San Antonio, TX• Phoenix, AZ Washtenaw County, MI

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Navigating the Fiscal CrisisAudio Conferences

• What type of strategies are you deploying now to prepare your community for the future?

– “Long Term Planning and Forecasting” Rockville, MD

– “5 year balanced fiscal plan” Prince William County, VA

– “Making real changes that will insure our long-term solvency while protecting core services” and “Telling our elected officials that there will be no easy decisions and no quick fixes” City of Hickory, NC

• City of Fort Worth’s response? All of the above

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Navigating the Fiscal CrisisAudio Conferences

• What is your prediction for the duration of the economic downturn?

– “Planning horizon is five years with expenditures outpacing revenues creating shortfalls in each of the next fiscal years ranging from $43-67 million” San Antonio, TX

– “2007 Tax Base could be lost until 2018 or later; 2012 is the earliest that property tax revenues would begin to increase Washtenaw County, MI

– “Current 5-Year Financial Plan [2010-2014] projects sales tax stabilization during 2011 and deterioration of property valuation until 2012” Overland Park, KS

• City of Fort Worth’s response?

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Updated 5 Yr Financial Forecast

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$400

$450

$500

$550

$600

$650

$700

FY05

FY06

FY07

FY08

Re-

est

FY09

FY10

FY11

FY12

FY13

FY14

Mill

ions

Revenues Baseline Expenditures

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Original 5 Yr Financial Forecast

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$400

$450

$500

$550

$600

$650

$700

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

Mill

ions

Revenues Baseline Expenditures

Gap = $58M

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Proposed BudgetPolicy Recommendations

• Recommend rescinding policy capping mineral valuesImpact on FY2009 and FY2010 - $6.7 million• Directions Home - $3 million • Vacation Buyback for Gen Employees - $3 million

• Recommend earmarking $5 million for pension • Committee to study alternatives before disbursing funds

• Recommend additional $5 million for retiree healthcare liability instead of $10.9 million

• Limit coverage to eligible employees through FY2020

• Recommend retaining the General Fund 10% reserve policy • Short term, one time infusion of funds

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FY2010 Proposed BudgetRecommendations

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• Service Reductions•Citywide Initiatives•Organizational Changes and Consolidations•Revenue Enhancement

•Proposed Fee Changes•Employee Impact

Horatio PorterBudget Officer

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Overview of FY2010Proposed BudgetBudget Recommendations

Service Reductions

Organizational Changes

Citywide Initiatives

C

B

Enhance Revenues

$59 millionbudget shortfall

A$16 m

$25 m

$3 m $15 mD

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The proposed budget necessitated curtailing spending through departmental and citywide reductions and vacancy management.

Budget Impact of Service Reductions - $16M

FY2010 RecommendationsService Reductions

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FY2010 RecommendedService Reductions

Elimination or Reduction of Operations and Programs at City facilities, eliminating 66.25 APs:

Service Reductions AP $$

Reduce Hours at Animal Shelter/Kennel 3.00 $103,992

Reduce Education Programs at Botanic Garden 3.00 $176,232

Reduce Staffing at Community Centers for After School Programs

6.00 $188,512

Eliminate 2 Mechanic Positions within the Fire Dept 2.00 $96,924

Service Reductions - Sub Total 14.00 $565,660

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FY2010 RecommendedService Reductions (cont.)


Close Day Labor Center Operations 2.50 $271,462

Eliminate Right of Way Maintenance 0.00 $283,000

Reduce Staffing Dedicated to Monitoring Illegal Dumping

6.00 $351,012

Close 6 of the 7 Swimming Pools 2.00 $444,961

Realign Code Districts 6.00 $466,320

Service Reductions - Sub Total 16.50 $1,816,755

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Reduce Street and Traffic Operations Maintenance 9.00 $535,605

Eliminate the Late Night Program 10.00 $577,041

Forgo any Additional Alleyway Maintenance 1.00 $622,012

Close 2 Branch Libraries (Meadowbrook and Wedgwood)

15.75 $813,194


Total Reduction of Operations and Programs 66.25 $4,930,267

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Reduction of Citywide Maintenance, Eliminating 22 APs:


Reduce Staffing for Bridge Maintenance 1.00 $53,964

Reduce Athletic Fields Maintenance - $62,501

Reduce Staffing for Pavement Management Program

5.00 $85,718

Reduce Staffing for Urban Forestry Program 2.00 $101,280


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Eliminate Graffiti Abatement in General Fund 2.00 $134,451

Reduce one Forestry Hazard Abatement Crew 4.00 $138,516

Reduce Staffing for Facilities Maintenance 5.00 $295,804

Reduce Mowing Frequency 3.00 $424,060


Total Citywide Maintenance Reductions 22.00 $1,296,294

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Elimination of Special Services:


Eliminate Employee PAY$ suggestion program - $32,400

Reduce frequency of Citizens Survey to biennial - $48,000

Reorganize/Reduce Youth and Adult Sports Program schedule

- $102,689

Eliminate funding for FY10 Charter Election - $604,566


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Elimination of Subsidies:


Eliminate City Hall Cafeteria subsidy - $40,000

Eliminate Cable Office General Fund subsidy - $216,135


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Reduction of Contractual Services:


Reduce Legislative consulting services - $68,200

Reduce Outside Attorney Fees - $150,000

Eliminate Sunset Review contractual Services - $216,960

Reduce Audit Fees - $570,000


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Transfer Functions to Alternate Funding Sources:


Transfer Storm Water Compliance Efforts to Environmental Protection Fund

1.00 $73,615

Transfer Nature Center operations to Friends of the FW Nature Center

2.00 $117,068

Transfer Staff to Grant and Special Trust Funds 2.40 $174,813

Transfer Development Review/Project Manager positions to Capital Projects Service Fund

6.00 $332,427


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Miscellaneous reductions*:


Various positions throughout the City that provide administrative support. Also includes salary savings, supplies, and miscellaneous services.

45.40 $7,018,651


*Detailed descriptions are available in the FY2010 Proposed Decision Package Book.

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FY2010 RecommendedService Reduction Recap

SUMMARY AP $$

Reduction of Operations and Programs Sub Total 66.25 $4,930,267

Reduction of Citywide Maintenance Sub Total 22.00 $1,296,294

Reduction of Special Services Sub Total 0.00 $787,655

Reduction of Subsidies Sub Total 0.00 $256,135

Reduction of Contractual Services Sub Total 0.00 $1,005,160

Transfer Functions to Alternate Funding Sources Sub Total

11.40 $697,923

Miscellaneous Service Reductions 45.40 $7,018,651

Service Reductions – Grand Total 145.05 $15,992,085

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AP REDUCTION BY SERVICE GROUP

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Management Services

12.008%

Neighborhood Services

77.6554%

Infrastructure Services

50.0034%

Public Safety/Econ Develop

5.404%

General Fund only

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FY2010 RecommendationsCitywide Initiatives

Recommendation TOTAL

Fund Balance $7,500,000

Modify Retiree healthcare benefits ($10.9M vs $5M) $5,900,000

$3,900,000

Eliminate Third Contribution to Housing Fund $2,000,000

Reduce Medstar subsidy back to FY2008 level $2,000,000

Reduce Non Civil Service Vehicle Purchases $1,500,000

Reduction in Discretionary Spending $1,000,000

$779,000

Reduce Spending for Non Civil Service Uniforms $220,000

Total Citywide Initiatives $24,799,000

Eight (8) mandatory furlough days – equivalent to a 3% salary reduction for general employees

Reduce Funding to Non Profit Agencies

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FY2010 RecommendationsNon Profit Funding

Adopted ProposedFY2009 FY2010 Variance

Arts Related FundingArts Council* 1,220,484$ 1,000,000$ (220,484)$ Community Arts Center 200,000 200,000 Van Cliburn 100,000 100,000 Artes de la Rosa 60,000 60,000 Imagination Celebration 50,000 (50,000)

Total Arts Related funding 1,630,484$ 1,360,000$ (270,484)$

Agency FundingSafe Haven 90,000 90,000 Women's Center 75,000 75,000 Alliance for Children 63,998 64,000 2 Resource Recovery Council 50,000 50,000 Tarrant County Recovery Campus 51,000 51,000 Tarrant County Youth Collaboration 15,000 15,000

Total Agency Funding 344,998 345,000 2

Subtotal of Non Profit Funding 1,975,482$ 1,705,000$ (270,482)

Convention and Visitor's Bureau 7,622,527$ 7,622,527$ -

* Excludes Public Art Funding

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FY2010 RecommendationsNon Profit Funding

Adopted ProposedFY2009 FY2010 Variance

Other FundingMusuem of Science and History 572,149 500,000 (72,149) Sister Cities 378,420 (378,420) Safe Cities Commission - Police 60,195 60,195 - World Affairs Council 33,000 (33,000) North Texas LEAD - HR 25,000 20,000 (5,000) Corporate Champions 10,000 (10,000) ICMA 5,400 (5,400) Tarrant County Veterans Council 5,000 (5,000)

Other Funding 1,089,164$ 580,195$ (508,969)

Total Non-Profit Funding 3,064,646$ 2,285,195$ (779,451)$

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FY2010 RecommendationsRevenue Enhancements

REVENUE ENHANCEMENT TOTAL

Revenue from change in Policy on Mineral Values 6,700,000$

Assess a Payment in Lieu of Ad Valorem Taxes on Enterprise Funds 4,200,000$

Collect Outstanding Court Fines Thru Collection Agency 1,500,000$

General Fund Fees Increases 1,470,000$

Increase Collection of Third Party Residential Inspections Revenues 1,300,000$

Total New Revenue 15,170,000$

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Proposed Fee ChangesGeneral Fund Revenue Increases from Proposed Fee Changes

Department Increased Revenue

Parking Fees $470,000

Code Compliance $463,000

Transportation & Public Works $243,000

Parks & Community Services $168,000

Fire Department $126,000

Total $1,470,000

Other Funds Increases from Proposed Fee Changes

Fund Increased Revenue

Storm Water Utility $5,404,000

Water & Sewer $1,535,000

Solid Waste $1,328,000

Office Services $192,000

Municipal Golf $88,000

Total $8,547,000

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Account Number: XXXXXX-XXXXXXTotal Charges: $76.13Current charges due on 05/01/10After 05/24/10 Amount Due $79.94

WATER Current reading 368.7 Previous Reading 358.0 Water use in CCF 10.7

Service Charge 7.008.0 CCF @ $1.90 15.202.7 CCF @ $2.66 7.18 WATER SUBTOTAL $29.38WASTEWATER Service Charge 5.10 6.2 CCF @ @2.64 16.37WASTEWATER SUBTOTAL $21.47

SANITATION Service Charge 18.50 Garbage sales tax 1.53SANITATION SUBTOTAL $20.03

ENVIRONMENT Environmental Protection Fee .50ENVIRONMENT SUBTOTAL $.50

STORM WATER UTILITY Service charge 4.75STORM Water UTILITY SUBTOTAL $4.75

$76.13

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Account Number: XXXXXX-XXXXXXTotal Charges: $76.13Current charges due on 05/01/10After 05/24/10 Amount Due $79.94

Late Fee inclusio

n

Late Fee inclusio

n

WATER Current reading 368.7 Previous Reading 358.0 Water use in CCF 10.7

Service Charge 7.008.0 CCF @ $1.90 15.202.7 CCF @ $2.66 7.18 WATER SUBTOTAL $29.38WASTEWATER Service Charge 5.10 6.2 CCF @ @2.64 16.37WASTEWATER SUBTOTAL $21.47

SANITATION00 Service Charge 18.50 Garbage sales tax 1.53SANITATION SUBTOTAL $20.03

ENVIRONMENT Environmental Protection Fee .50ENVIRONMENT SUBTOTAL $.50

STORM WATER UTILITY Service charge 4.75STORM Water UTILITY SUBTOTAL $4.75

$76.13

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• No across the board or step increases for general or fire employees

• Eliminate tuition reimbursement

• Offer $10,000 incentive to eligible general employees for retirement by 12/31/2009. – Currently have 170 individuals that are eligible– We assume that 25% or 42 individuals will participate

FY2010 RecommendationsEmployee Impact

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• Furlough – 8 days, 3% reduction in pay, 10% pay reduction in pay period of furlough day

FY2010 RecommendationsEmployee Impact – Furlough Days

Columbus Day Monday, October 12, 2009

Day Before Thanksgiving Day Wednesday, November 25, 2009

Christmas Eve Thursday, December 24, 2009

Presidents' Day Monday, February 15, 2009

Good Friday Friday, April 2, 2010

Friday Before Memorial Day Friday, May 28, 2010

Friday Before Independence Day Friday, July 2, 2010

Friday Before Labor Day Friday, September 3, 2010

FY2010 Proposed Furlough Days

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• Reduction in Force (RIF) of 188 Citywide APs (114 filled, 74 vacant)– 134 General Fund APs (85.0 – filled, 49.0 vacant)– 54 Other Fund APs (29.0 filled, 25.0 vacant)

FY2010 RecommendationsEmployee Impact – RIF Timeline

August 11th City Manager presents FY2010 Proposed Budget

September 15th City Council adopts FY2010 Budget

September 16th Employees receive RIF notification

September 17th Human Resources meet with RIF employees

September 21st Human Resources begin referral process

November 6th RIF Effective date

November 5th 2010 End of preferential rehire status

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• Vacation Buy Back option for eligible

general employees – 40 hours equivalent to 2% salary

• Longevity Pay is included for those eligible employees

• Open a Health Clinic in FY2010

FY2010 RecommendationsEmployee Impact

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Proposed Budget General Fund FY2010 - Balanced

ADOPTED ADOPTED PROPOSED VARIANCE VARIANCEFY2008 FY2009 FY2010 $ %

Property Tax $324,907,629 $293,055,766 $292,440,666 ($615,100) -0.21%

Sales Tax $99,583,863 $104,536,265 $98,866,422 ($5,669,843) -5.73%

Other Local Taxes $9,297,234 $9,515,000 $9,077,500 ($437,500) -4.82%

Licenses & Permits $53,899,857 $44,222,278 $44,022,974 ($199,304) -0.45%

Fines & Forfeitures $13,727,486 $12,528,370 $13,168,383 $640,013 4.86%

Use of Money & Property $17,697,559 $14,263,915 $4,792,100 ($9,471,815) -197.65%

From Other Agencies $1,068,420 $1,168,420 $1,262,953 $94,533 7.49%

Service Charges $25,714,687 $24,964,394 $23,524,849 ($1,439,545) -6.12%

Other Revenue $1,338,262 $1,450,137 $1,100,204 ($349,933) -31.81%

Transfers $15,497,208 $33,282,607 $39,960,498 $6,677,891 16.71%

$562,732,205 $538,987,152 $528,216,549 ($10,770,603) -2.04%

PERSONNEL $357,429,610 $369,030,244 $375,553,394 $6,523,150 1.74%SUPPLIES $25,569,341 $27,838,254 $25,926,858 ($1,911,396) -7.37%CONTRACTUAL $126,234,552 $140,048,854 $125,015,297 ($15,033,557) -12.03%CAPITAL OUTLAY $53,498,702 $2,069,800 $1,721,000 ($348,800) -20.27%

$562,732,205 $538,987,152 $528,216,549 ($10,770,603) -2.04%

REVENUES

Total Revenues

Total Expenditures

EXPENDITURES

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Total General Fund Revenues FY2010 Proposed Budget

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$528,216,548

PROPERTY TAX$292,440,666

55.36%

OTHER REVENUE$1,100,204

0.21%

SERVICE CHARGES$23,524,849

4.45%

USE OF MONEY AND PROPERTY$4,792,100

0.91%

TRANSFERS$39,960,498

7.57%

OTHER AGENCIES$1,140,508

0.22%

FINES AND FORFEITURES

$13,168,383 2.49%

LICENSES AND PERMITS$44,145,419

8.36%

OTHER LOCAL TAXES

$9,077,500 1.72%

SALES TAX$98,866,421

18.72%

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Total General Fund Expenditures FY2010 Proposed Budget

$528,216,548FY2009 Adopted Budget = $ 538,987,152 (2.0% Decrease)

NEIGHBORHOOD SERVICES 81,116,879

15.36%

MANAGEMENT SERVICES 23,697,179

4.49%

INFRASTRUCTURE SERVICES 63,825,174

12.08%

NON DEPARTMENTAL

69,575,626 13.17%

PUBLIC SAFETY & ECONOMIC

DEVELOPMENT 290,001,690

54.90%

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Total Citywide Expenditures FY2010 Proposed Budget

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TOTAL EXPENDITURES: $1,048,824,998* FY2009 Adopted Budget = $1,034,021* (1.4% Increase)

Cable Communications $616,341 0.06%

Crime District $50,625,926 4.83%

Culture and Tourism $29,010,535 2.77%

Environmental Protection $4,305,117 0.41%

Awarded Assets $782,407 0.07%

Lake Worth $922,630 0.09%

Solid Waste $52,157,385 4.97%Water and Sewer

$341,494,432 32.56%

Municipal Parking $4,654,455 0.44%

Municipal Golf $5,726,246 0.55%

Municipal Airports $4,619,947 0.44%

Stormwater Utility $25,693,028 2.45%

General Fund $528,216,549 50.36%

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*Excludes internal service and insurance funds

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Total Citywide Revenues FY2010 Proposed Budget

General Fund $528,216,548 50.39%

Stormwater Utility $25,693,028 2.45%

Municipal Airports $4,619,947 0.44%

Municipal Golf $5,726,246 0.55%

Municipal Parking $4,654,455 0.44%Water and Sewer

$341,494,432 32.57%

Solid Waste $52,157,385 4.98%

Lake Worth $196,800 0.02%

Awarded Assets $843,146 0.08%

Environmental Protection $4,305,117 0.41%

Culture and Tourism $29,010,535 2.77%

Crime District $50,816,184 4.85%

Cable Communications $616,341 0.06%

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TOTAL REVENUES: $1,048,350,164**Excludes internal service and insurance funds

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Next Steps• August 11th City Manager recommends FY2010 Budget

• August 18th Budget Study Sessions / Public Hearing

• August 20th–21st Budget Retreat - Southwestern Baptist Seminary

• August 25th Budget Study Session / Public Hearing

• August 27th Budget Study Session

• September 1st Budget Study Session / Public Hearing

• September 3rd Budget Study Session

• September 8th Budget Study Session Public Hearing

• September 10th Budget Session

• September 15th City Council to adopt FY2010 Budget

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1 Presented to the City Council By Dale Fisseler, City Manager Karen L. Montgomery, Assistant City...

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