City of CottonwoodBudgetary Workshop I

May 29, 20086:00 p.m.

City Council Chambers

City’s Budget Shortfall

This is what department headsstarted with—

($2,297,465)(including $100K in Undesignated Reserves)

No additional staffing No reclassifications No new programs or contracts This is a barebones base budget number

Reality Check On Our Main Revenue Sources

Sales tax down 10.4% in FY 2008

Sales tax expected down by 3.0% in FY 2009

State Shared Revenue is down Urban Revenue -5.7% State sales tax -4.5%

Local car dealership moved out of town

Dealing with the Reality Check

Eliminated Cost Of Living Adjustment – COLA

Eliminated Compensation Study

Elimination of positions

Reduction in overtime

Dealing with the Reality Check

Reduction in temporary staffing services

Hiring freeze

Reduction in maintenance Building maintenance Vehicle maintenance Grounds maintenance

Dealing with the Reality Check

Reduction in fuel

Reduction in contractual services (legal, ground maintenance)

Reduction in services (community policing, swimming pool hours, Emergency Medical Services, public safety inspections)

Reduction in recreational programs (Rhythm & Ribs, summer youth programming)

Dealing with the Reality Check

Reduction in training and continuing education

Reduction in travel/change in travel policy

Reduction in book purchases

Reduction in networking services

Dealing with the Reality Check

Reduction in support to outside agencies Old Town Association - OTA Senior Center Youth Commission

Additional reductions Supplies Subscriptions Postage & freight Small tools and operating supplies

City’s Budget New Shortfall

After all these budget cutsthe new balance is –

($602,710)(including $50K in Undesignated Reserves)

Projected 2.2% Sales Tax(Pre – Recreation Center – Summer 2006)

Capital Project Costs

Available Resources - E xpenditures

0

2

4

6

8

10

12

14

16

18

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Millio

ns

DeficitsOther Funding Sources2.2% Sales TaxPlanned Expenditures

Police Department

Loss of 3 Patrol positions Increased response time Reduced visibility Increased safety risk to on duty officers

Overtime reduction Reduced public relations (block watches, school

talks, multi-housing inspections) Reduced patrol time on streets Reduced presence at public events (Verde

Valley Fair, Smoke Out west, Christmas Parade)

Police Department

Reduced vehicle maintenance Tire replacement will be delayed Reduced car washes will lower public image Small repairs will be delayed, possibly

causing larger repairs costs in the future

Reduced Training limits growth of staff knowledge, skills and abilities that could increase safety and save lives

In general As the economy gets worse, crime rises Inability to perform services at prior

professional level

Animal Control/Communication

Animal Control Increase in dog at large issues No work at the dog park

Communications Increasing stress on staff due to reduced staff Reduced supervision, since supervisor will

need to cover a shift Increased time to rebuild with staffing changes Increased risk to officers on duty due to

working with obsolete, broken or faulty equipment due to budget cutbacks

Fire Department

Loss of one existing Firefighter/MedicNon-compliance with Occupational Safety

& Health Administration (OSHA) – 2 in/2 out

Increased public and firefighter risk due to longer response times

The inability to respond to multiple events or requests for service is significantly increased

Already need an additional staffed 4 person engine company

Fire Department

Absences will need to be covered by volunteer staff at a time we are cutting volunteer funding

Non– compliance with Federal, and State regulations and standards related to staffing, response times, and public & firefighter safety

Loss of ½ time fire prevention support positionReduced public fire and life safety educationReduced building fire safety inspectionReduced participation in community events

Fire Department

Reduced travel, training & continued education Limits growth of staff knowledge, skills and abilities Increase in liability by failure to meet;

OSHA Insurance Services Office (ISO), and National Fire Protection Association (NFPA)

Standards Reduces eligibility for grant, federal, and disaster aid

(grants can’t supplant)

Reduced operation supplies Increased health risks – Blood Borne Pathogens/

Communicable diseases/hearing damage Loss of technical advantage/service quality Reduced standard of care in emergency medicine

Fire Department

Deferred maintenance of vehicles, equipment, and radios Increases long-term costs Efficiency, and reliability is compromised Deterioration of standard of excellence Decreases safety and public image

Parks & Recreation

Elimination of Recreational Programs & Events Rhythm & Ribs Event Summer programming

Youth Basketball Summer internships Camping Series

Overtime budget cuts Cannot support after hours programming Remaining programming will suffer

Parks & Recreation

Early pool closure around September 1st Reduced services to public Affects Mingus High School most of all

If they need it they will have to provide full funding Affects a group of lap swimmers and evening

swim programs

Weight-room – reduced hours of operation Will affect weight-room patrons

Facilities Maintenance

Reduced cost of facilities maintenance Field over-seeding program is impacted Annual tree pruning, and weed-herbicide will

be reduced Bldg maintenance schedules will be extended Repairs on exteriors and interiors will be

postponed Custodial cleaning services eliminated on

Fridays except PD and FD

Other Impacts to Parks and Recreation

Current impacts Children will not have much to do during the

summer City will not have a signature event Pool early closure will probably not go unchallenged Parks will look ill maintained Lengthened maintenance schedules could cause

early failure of equipment. Buildings will fall in ill repair Old Town building will cost more later to repair

Other Impacts to Parks and Recreation

Upcoming impact – Recreation Center City may not have the ability to cover the

O&M on the Recreation Center

Library

Reduction in book purchases will age our collection

Traffic continues to increase and resources are not available

Concerns over being able to fund the O&M for the new addition to the Library

Utility Department

Eliminated sales tax contribution to Sewer Fund Capital fund will grow only by interest Capital program will be modified to fit within

the new model City is looking at smaller package plant vs.

regional plant

Department has reduced its budget to comply with overall City directive

Utility Department

Both Water & Sewer contribute to the GF Contribution to Natural Resources position

(50%) Will contribute to 25% of PW for engineer’s

services

Utilities contribute $266,000 to GF in indirect costs

Despite staffing constraints this department continues to maintain the Clarkdale water system and brings in additional revenues to our Utility Co.

Impacts on All Departments

Reduction in staff, compensation, COLA Stress will affect all personnel in general

Stress due to uncertainty of their jobs Stress over maintaining our high level of services The general feeling of “who” or “what’s” next Employees can’t keep up with rising costs Stress will drive up our health insurance Stress will increase our absenteeism

Reduction in training & travel Forego ability to acquire and implement

knowledge and skills Lower employee morale

Impacts on All Departments

Reduction in supplies, materials, & tools Reduction in quality of supplies and materials

used Inability to do the job properly Increased health & safety risks Increased liability to the City due to cuts

Grounds/Building Maintenance Parks will look bad and will increase our

liability due to lack of maintenance Increased costs for building maintenance in

the future

Impacts on All Departments

Sacrificing services and programming

Reducing support for outside agencies

Other Potential Cost Savings

10/40 schedule for employees Open 4 days a week 7:30 a.m. to 5:30 p.m. Savings on utility costs

Travel Policy Changes Reduce daily per-diem for meals Review mileage reimbursement

Cellular Phone Policy Changes Shift service responsibility to employee Will lower costs to the City

Revenue Options

Adopt the new building fees Current downturn in the housing market will

not make much revenue for the City Increase in fees concentrated on commercial

property Increases the cost of building projects Positions the City for future growth

Revenue Options

Adjust all 1% sales tax allocation away from streets to General Fund Street projects will be postponed General Fund capital will be delayed We have already affected the sewer facility We have been to this trough before Not sure when, if ever, we will be able to adjust

the allocation back to the Streets or GF capital

1% Sales Tax DistributionC hanges to the 1% S ales T ax Policy

Description %B udgeted for

FY 2008%

O riginal 07-08

Policy% A mended Policy %

FY 08-09 Policy

Proposal

E stimated 1% S ales T ax $4,587,000 $4,090,000 $4,090,000 $4,090,000

Recreation C enter D ebt S ervice

(D S ) plus O perations and

M aintenance (O &M )

1,488,700

1,751,500 1,751,500 1,751,500

N et of Recreation C enter C osts 3,098,300 2,338,500 2,338,500 2,338,500

O ther D istributions

G eneral G overnment O &M 19% 588,677 19% 444,315 50% 1,169,250 100% 2,338,500

S treet Improvements 27% 836,541 27% 631,395 30% 701,550 0

S ewer F acility Improvements 27% 836,541 27% 631,395 0% 0 0

G eneral G overnment F acilities 27% 836,541 27% 631,395 20% 467,700 0

T otal O ther D istributions 3,098,300 2,338,500 2,338,500 2,338,500

T otal S ales T ax $4,587,000 1 $4,090,000 2 $4,090,000 3 $4,090,000

N ote 1: D enotes the loss in S ales T ax epected due to the slowing of the economy.

N ote2: A mended Policy reflects mid year changes to shift monies around to help the G eneral F und

N ote 3: O ne of the options available to assist the G F until the economy turns around.

Revenue Options

Increase in sales tax All current 1% sales tax allocations remain in

place Street projects can be scheduled with sales tax

revenue General Fund capital, too, will be scheduled

with sales tax revenue We will still need to watch our spending, but

will be able to avoid layoffs Will make every effort to keep existing

programs and contributions to outside agencies

Sales Tax Comparison

T ax Rates

C ommunity Privilege U se C ontracting

C amp Verde 2.00% 2.00% 3.00%

C larkdale 2.25% 3.25%

C hino Valley 3.00% 3.00% 3.00%

D ewey - H umboldt - C entral Y avapai F D 2.00% 2.00% 2.00%

D ewey - H umboldt - M ayer F D 2.00% 2.00% 2.00%

J erome 3.00% 3.00%

Prescott 2.00% 2.00% 2.00%

Prescott Valley 2.33% 2.33% 2.33%

S edona - Y avapai C o. 3.00% 3.00% 3.00%

C ottonwood 2.20% 0.00% 3.20%

Property Tax Comparison

T ax Rates

C ommunity Notes

C ounty /

C ollege S chools C ity

S pecial

D ist Fire D ist T otal

C amp Verde 1 3.41% 4.84% 2.31% 2.25% 12.81%

C larkdale 3.41% 4.08% 0.71% 1.63% 9.83%

C hino Valley 3.41% 4.46% 2.67% 10.54%

D ewey - H umboldt - C entral Y avapai F D 2 3.41% 4.59% 3.30% 1.89% 13.19%

D ewey - H umboldt - M ayer F D 2 3.41% 4.59% 3.30% 3.25% 14.55%

J erome 3.41% 4.08% 0.90% 8.39%

Prescott 3.41% 3.45% 0.50% 7.36%

Prescott Valley 3.41% 4.59% 1.89% 9.89%

S edona - Y avapai C o. 3.41% 2.25% 1.75% 7.41%

C ottonwood 3.41% 4.31% 0.00% 0.00% 0.00% 7.72%

N ote 1: C amp Verde has a S anitation D istrict, which handles wastewater

N ote 2: D ewey H umboldt has several C ommunity F acility D isticts which help finance infrastructure

What now?????

Council and staff discussion

Staff needs direction Proceed with more reductions to balance the

budget Council will support a revenue increase A combination of added reductions and a

revenue increase (and where do we concentrate)