Citizens Budget Committee Citizens Budget Committee FY2010 BudgetFY2010 Budget

City of Duluth

AgendaAgenda

March 19, 20097:00 p.m. to 8:00 p.m.

I.Welcome from Mayor and City Administrator

II.Why are we here? (Revenue shortfall-list of primary sources of lost revenue: Action by the State, Police Fines)

III.What can we do? (Recommendations for balancing the budget)

IV.Where do revenues come from? (Pie Chart of City Revenue & Pie Chart of City Expenses)

V.Presentation of current budget. What is the City doing?

VI.Presentation of projected FY10 Budget. (July 1-June 30)

VII.What are our options to balance the projected FY10 Budget?

VIII.Homework for next meeting: Review details of proposed FY10 Budget for each department. Staff will be present at the next meeting to answer any questions.

Budget Creation OverviewBudget Creation Overview

CITY OF DULUTH BUDGET CREATION OVERVIEW

January – At the beginning of the month, the City Clerk and Budget and Accounting Manager will set the “Budget Calendar”, which are the

dates when meetings will take place and deadlines for submitting budget materials. Budget and Accounting Manager will also send the Department Directors their budget history and current year’s request Forms.February-Department Directors review budget history and document the current years budget request. They also start preparing their Capital Improvement budget, both rollover and new.March - Meetings with Department Directors and Budget and Accounting Manager to discuss first drafts of department budgets.April - Final department budget drafts are due. Review revenue projections, both first and second drafts. Capital Improvement budget submitted and reviewed for all departments. Departmental, Capital Improvement budgets and revenue projections reviewed by Budget Committee (City Administrator, City Clerk and Police Chief). Capital Improvements projects ranked by Budget Committee, then Mayor and Council. Budget drafts submitted to Mayor, Council and City Attorney.May - Post ad in newspaper for time and date of the two/ three Mayor and Council budget review sessions. Conduct review sessions and implement requested changes. Post ad in newspaper for time and date of the upcoming Public Hearing and Budget Adoption.June - Conduct public hearing on the budget for citizen input. Budget is adopted by Mayor and Council a council meeting.

Active Municipality DefinitionActive Municipality Definition

FY 2009 BudgetFY 2009 Budget

City of Duluth

FY 2009 Budget TotalsFY 2009 Budget Totals

ExpendituresOperations $18,065,960Funded by Other Sources 2,993,390Capital Improvements 17,511,391

Total Expenditures $38,570,741

RevenuesRevenues, Grants & SPLOST $34,821,277FY 08 Prior Year Reserves 2,666,589Prior Year Carry Fwd.Reserves 1,082,875

Total Revenues $38,570,741

Total ExpendituresTotal Expenditures

2009 General Fund Revenues2009 General Fund Revenues

FY 2009 Budget SummaryFY 2009 Budget Summary

FY 2009 Budgeted General Fund Revenues 16,728,371.00

FY 2009 Budgeted Expenditure Total 18,065,960.00

Prior Year Reserves Budget to Balance FY 2009 Budget -1,337,589.00

General Fund Revenues Needed to Balance Budget 16,728,371.00

FY 2009 Revenue Analysis & FY 2009 Revenue Analysis & ProjectionProjection

General Fund Collections thru 1-31-09 10,367,378.14Anticipated RevenuesCollections-All Departments-February thru June 4,200,000.00Projected General Fund Revenues thru June 30, 2009 14,567,378.14

General Fund Revenues Needed to Balance Budget 16,728,371.00 Projected Revenue Shortfall for Current Year Budget -2,160,992.86

Prior Year Revenue ComparisonPrior Year Revenue Comparison

FY 2008 Budget General Fund Revenues 15,554,375.00 General Revenue Collections thru 1-31-08 11,301,633.22 Percent of Budget Collected 0.727

FY 2009 Budget General Fund Revenues 16,728,371.28 General Revenue Collections thru 1-31-09 10,367,378.14 Percent of Budget Collected 0.620

Additional Revenue needed to Equal FY 08 Collections 1,794,147.78

Staff RecommendationsStaff Recommendations

Revenue Collection Shortfall 2,160,993.00Expenditure Reductions by Departments -500,000.00Hiring freeze, non replacement in vacancies saves in benefits etc. -150,000.00 Remaining Shortfall 1,510,993.00

Current Funds Available 12,863,881.73Less 3 Months Operating Reserves -4,516,490.00Less Capital Reserve Fund -2,748,789.90Less Obligated FY 09 Capital Improvements -2,411,875.00Less Obligated FY 09 Expenditures -1,337,589.00Available Balance 1,849,137.83

FY 2010 BudgetFY 2010 Budget

City of Duluth

Actions Taken to Balance FY10 Actions Taken to Balance FY10 BudgetBudget

• Budget Cuts in Each Department’s Budget• Freeze on Hiring• Reduce Overtime• No Employee Merit or COLA Increases• Increase in User Fees, Permits, Licenses, Park

Usage• Reduction in Events, Concerts, Movies, Promotions• Increase Annexation Efforts• Reduction of City Organizational Memberships• Reduction in Training and Travel

Preliminary General Operating Preliminary General Operating ExpensesExpenses

BUDGET CHANGES BY DEPARTMENT

FY09 FY10 PDP PERCENTDEPARTMENT BUDGET BUDGET CHANGE CHANGE

Mayor & Council 1,705.27 2,114.88 409.61 24.02%City Administrator 295.52 256.91 -38.61 -13.07%City Clerk/Business Office 1,435.03 1,391.86 -43.17 -3.01%General Government 1,758.36 1,463.34 -295.02 -16.78%Public Information/Marketing 623.81 498.42 -125.39 -20.10%Municipal Court 2,075.51 2,070.21 -5.30 -0.26%Planning & Development 1,186.26 1,053.10 -133.16 -11.23%Parks & Recreation 1,212.47 1,228.52 16.05 1.32%Public Works 1,125.76 1,113.80 -11.96 -1.06%Police 6,658.68 6,171.08 -487.60 -7.32%

Total All Departments 18,076.67 17,362.12 -714.55 -3.95%

CUTS IN STAFF SALARIES

Merit Increase 244,174.23Cost of Living Increase 102,921.33FICA Tax Savings 26,552.81

Total Salary Cuts and Tax Savings 373,648.37

FY 2009 Budget SummaryFY 2009 Budget Summary

FY2010 Budgeted General Fund Revenues 15,000,000.00

FY2010 Budgeted Expenditure Total 17,362,120.00

Projected General Fund Revenue Shortfall 2,362,120.00

Additional Options to Balance Additional Options to Balance FY10 BudgetFY10 Budget

• Increase in Benefit Payments by Employees

• Increase Property Taxes• Employee Furloughs• Employee Reduction• Cut Services: Police, Parks, Public

Works, Planning & Permitting

Millage Rate HistoryMillage Rate History

Property Tax Bills With a Millage Property Tax Bills With a Millage IncreaseIncrease

Property taxes are calculated based on the assessed value of a home. The assessed value is calculated by multiplying the fair market value of the home by 40%. The property tax bill is calculated by multiplying the assessed value by the millage rate. NOTE: The property tax bill would be further reduced by any exemptions available to the property tax owner and the tax bill its self would be reduced by any tax credit available. 1 MILL INCREASE = APPROXIMATELY $1,000,000 IN ADDITIONAL FUNDS.

Fair Market Value Assessment Assessed Millage Property Tax Increase Perof the Home Percentage Value Rate Bill Month

CURRENT MILLAGE RATE $ 150,000 40.00% $ 60,000.00 5.191 $ 311.46 $ 250,000 40.00% $ 100,000.00 5.191 $ 519.10 $ 350,000 40.00% $ 140,000.00 5.191 $ 726.74 $ 450,000 40.00% $ 180,000.00 5.191 $ 934.38

ONE MILL INCREASE $ 150,000 40.00% $ 60,000.00 6.191 $ 371.46 $ 5.00 $ 250,000 40.00% $ 100,000.00 6.191 $ 619.10 $ 8.33 $ 350,000 40.00% $ 140,000.00 6.191 $ 866.74 $ 11.66 $ 450,000 40.00% $ 180,000.00 6.191 $ 1,114.38 $ 15.00

TWO MILL INCREASE $ 150,000 40.00% $ 60,000.00 7.191 $ 431.46 $ 10.00 $ 250,000 40.00% $ 100,000.00 7.191 $ 719.10 $ 16.66 $ 350,000 40.00% $ 140,000.00 7.191 $ 1,006.74 $ 23.32 $ 450,000 40.00% $ 180,000.00 7.191 $ 1,294.38 $ 30.00

Additional Options to Balance Additional Options to Balance FY10 BudgetFY10 Budget

• Increase in Benefit Payments by Employees

• Increase Property Taxes• Employee Furloughs• Employee Reduction• Cut Services: Police, Parks, Public

Works, Planning & Permitting