HomeMy WebLinkAboutAgenda Report - February 10, 2009 B-01 SMAGENDA ITEM 1 1
ink CITY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: Fiscal Year 2008109 Mid -year Budget
MEETING DATE: February 10, 2009
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive presentation on the 2008-09 Mid -year budget review.
BACKGROUND INFORMATION: Absent any adjustments, the current year General Fund shortfall is
projected to be about $1,456,000. A number of adjustments have
been identified which are detailed below that will help mitigate this
shortfall by the end of this fiscal year, but will not completely close the gap. However, adjustments made
over a longer period should be able to maintain FY 6130108 reserve levels.
The following are the significant adjustments, by fund, that are needed to keep the City fiscally sound.
General Fund
Revenues:
No budgetary adjustmentsfor revenue are proposed at this time
The three primary General Fund Revenue sources are property taxes, sales taxes and Vehicle License
Fees. It is projected that property taxes will come in slightly ahead ($100,000) of budgeted levels. Sales
tax revenue is anticipated to be short of budgeted levels by about $517,000. This reduction reflects a
year over year reduction in this revenue source of $850,000. The third major revenue source, Vehicle
License Fees, is expected to be about $140,000 short of budgeted levels.
Expenditures:
Initial projection of General Fund expenditures is $43,660,062, a level that exceeded expected revenue
by $1,456,077. Staff has reviewed these initial estimates and developed a number of operational
corrections to mitigate the shortfall by $384,400. They include allocating costs for certain administrative
staff from the General Fund to Enterprise Funds ($247,800), allocating costs for on-line credit card
processing to Enterprise Funds ($30,000), deferring the hiring of a vacant position in the Budget Division
($46,000) and reducing the transfer to the Library Fund due to vacant Library positions ($60,600).
Staff is also recommending increasing the General Fund transfer to the Community Development Fund to
cover the current year deficit ($60,000). This item will be discussed further under the Community
Development Fund section of this report. Net operational mitigations represent a cost reduction of
$324,400.
APPROVED: ��aA"
Blair King, 4y Manager
The City has approached all of the represented employee organizations to reduce expenses. The City is
seeking to reduce expenses by $1,131,677. One proposalthat would affect all employees is to eliminate
the City match portion of the deferred compensation program. If effective at the beginning of March, the
elimination of this match would reduce General Fund costs by about $165,000 for the remainder of the
fiscal year. The City has asked all units to agree to this provision with the expectation that it would be
extended through the 2009110 fiscal year.
The City is proposing a one day furlough per month for the next four months for all miscellaneous
employees in lieu of reductions to base pay. This measure is expected to save about $179,000 over the
next four months.
As a further cost saving measure, staff is researching options related to alternative dispatch methods.
Specifically, staff is reviewing the option of AMR providing dispatch services.
One of the employee organizations requested we investigate the possibility of workforce reductions via
early retirements. Our current contract with CaIPERS allows the City to offer employees who are
currently eligible to retire (age 50 with five years service) a two-year service credit as an inducement to
retire. Our contract currently provides this benefit for all City employees except Police. V offered to
employees, the City Managerwould like to selectively identify positions that would be offered this benefit.
If accepted, the employee would need to retire within a window of 90 to 180 days of acceptance and the
City would need to hold vacant a position for a period of time to offset the cost of the benefit. The City
would pay the additional retirement expense over a 20 year period, beginning two years after the date of
retirement. Once positions are identified, staff will update the Council with the monetary specifics of the
program.
We have received very good cooperation from all of the employee organizations. All organizations have
been very understanding and have advanced a number of ideas for us to evaluate.
As we have not completed the meet -and -confer process, final recommendations regarding solutions are
pending.
Staff is hopeful that we can close the gap by June 30, 2009. In the event we are not able to provide a
total solution by June 30, 2009, we would ask the Council to allow us to draw down reserves at June 30,
2009 and replenish the reserve during FY 2009110.
Fund Balance:
Without any adjustments, Fund Balance is projected to be $2,702,930. Staff has identified $324,400 of
expense reductions that will offset some of the expenses in excess of budaet and would increase the
above fund balance number. Proposed recommendations are pending the results of the meet -and -confer
process.
Electric Utility
Expenses are expected to exceed appropriations by $158,455 primarily due to higher power costs.
Revenues are coming in higher than budgeted and will be used to cover the higher expenses. Included
in this action are adjustments to budgeted revenue and expenses.
Community Development Fund
The Community Development Fund ended the last fiscal year with a deficit fund balance of $702,127.
The slowdown in building activity has continued and will result in an unadjusted revenue shortfall of about
$300,000 compared to budget. The Community Development staff performs a general information
function that is properly a General Fund expenditure. Staff is recommending that Community
Development revenues be augmented by $60,000 from the General Fund to offset the expenditures for
the general information function. With this augmentation, the fund is expected to fully cover its costs.
Expenditures are being managed so that total expenditures will fit within the revised revenue stream.
Public Safety Special Revenue Fund
Revenues associated with COPS grants are not budgeted until receipt of the grant award notification.
Today's action will increase revenues by $172,000 and appropriations by $26,000 to reflect 2008109
COPS grant awards.
Library Fund
The General Fund supports funding of positions in the Library Fund through operating transfers. The
Library Fund has had two positions vacant this year. As such, the transfer from the General Fund is
being reduced to reflect a reduced level of expenditures related to staffing. The impact is to reduce
revenues in the Library Fund by $76,600.
FISCAL IMPACT: General Fund expenditure reductionswill need to be made. Recommendations for
specific reductions are pending the results of meet -and -confer sessions being held this week.
Jor an Ayers df
Deputy City Manager
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General Fund Summary
Projected Fund Balance (before
adjustments) for June 30, 2009:
• Unreserved: $2,718,930 ($4,461,081 projected)
• Projected shortfall: $1,456,077
• Primary causes: Personnel costs, revenue drop
• June 30, 2008 balance: $4,159,007
• Revised June 30, 2009 target, pending
recommendations: $4,086,330
K
General Fund Summary (cont.)
Proposed Adjustments/Expenditure Reductions:
• Allocate staff, credit card processing costs of $277,800 to
enterprise funds
• Reduce contribution to Library by $60,600 due to vacant
positions
• Keep vacant Budget Division position open ($46,000 savings)
• Increase Operating Transfer to Community Development to
cover current year's estimated $60,000 deficit
• Employee concessions: $1,131,677
• Research AMR dispatch options
• Workforce reductions via early retirements
K,
General Fund Summary (cont.)
• Target Unreserved Fund Balance on June 30, 2010:
$4,500,000
• Same as working fund balance on June 30, 2008
• Good cooperation from all labor groups
• Recommendations pending resolution of meet -and -
confer process
• Implementation target: March 1, 2009
4
Workforce Reduction Via Early Retirement
Apply to Miscellaneous and Fire Department
Employees
• Sworn Police not eligible under current contract
• Additional service credit of two years
• Must be currently eligible to retire
• Age 50 with 5 years service
0
Statement of Changes in Fund Balance
For the Fiscal Year Ended June 30, 2009
With Actuals for Fiscal Year 2007-08 and Comparative Budget Fiscal Year 2008-09
L
Audited
Budget to
Budget to
2007-08
2008-09
2008-09
Est Actuals
Est Actuals
Actuals
Budget
Estimated Actuals
Variance $
Variance %
General Fund
Fund Balance (Net Assets)
Beginning Fund Balance (Net Assets) Unreserved
5,175,522
4,534,293
4,159,007
(375,286)
Revenues
44,487,632
42,229,193
42,203,985
(25,208)
-0.1%
Expenditures
45.504.147
42.302.405
42.276.662
25.743
0.1%
Net Difference (Revenues Less Expenditures)
(1,016,515)
(73,212)
(72,677)
535
Fund Balance (Net Assets)
Ending Fund Balance (Net Assets) Unreserved
4.159.007
4.461.081
4.086.330
(374.7511
L
0
0
Electric Fund Summary
Net Bulk power costs: Projected $173,000 over budget.
Budget to be adjusted Feb. 18, 2009
Projected June 30, 2009 Fund Balance: $12.98 million
7
0
Statement of Changes in Fund Balance
For the Fiscal Year Ended June 30, 2009
With Actuals for Fiscal Year 2007-08 and Comparative Budget Fiscal Year 2008-09
Electric Utility Enterprise Fund
Fund Balance (Cash)
Beginning Fund Balance (Cash) Unreserved
Revenues
Expenditures
Net Difference (Revenues Less Expenditures)
Fund Balance (Cash)
Ending Fund Balance (Cash) Unreserved
Audited Budget to Budget to
2007-08 2008-09 2008-09 Est Actuals Est Actuals
Actuals Budget Estimated Actuals Variance $ Variance %
5,162,284
10,909,302
11,339,624
430,322
69,734,050
74,471,805
74,569,218
97,413 0.1%
63.556,710
72.772.068
72,930.523
(158.455) -0.2%
6,177,340
1,699,737
1,638,695
(61,042)
11.339.624 12.609.039 12.978.319 369.280
E:
Community Development Fund Summary
• Revenues: Revenues projected lower than budget
• The slowdown in building activity will result in a reduction of
revenues (compared to budget) of about $300,000
• General Fund contribution increased by $60,000 to fund current
year projected deficit
• Expenditures: Being managed to fit within expected
revenue stream
• Projected June 30, 2009 Fund Balance: <$699,341>
0
Statement of Changes in Fund Balance
For the Fiscal Year Ended June 30, 2009
With Actuals for Fiscal Year 2007-08 and Comparative Budget Fiscal Year 2008-09
Community Development Fund
Fund Balance (Net Assets)
Beginning Fund Balance (Net Assets) Unreserved
Revenues
Expenditures
Net Difference (Revenues Less Expenditures)
Fund Balance (Net Assets)
Ending Fund Balance (Net Assets) Unreserved
Audited Budget to Budget to
2007-08 2008-09 2008-09 Est Actuals Est Actuals
Actuals Budget Estimated Actuals Variance $ Variance %
(167,024)
(454,604)
(702,127)
(247,523)
1,479,536
1,615,148
1,382,236
(232,912) -16.9%
2.014.639
1,628.438
1.379.450
248,988 18.0%
(535,103)
(13,290)
2,786
16,076
(702.127) (467.894) (699.341) (231.447)
10
Public Safety Special Revenue Fund Summary
• Revenues: Revenues projected to be higher than
budget due to COPS grant not being budgeted.
• Expenditures: Expenditures are projected to be higher
than the current budget.
• Both revenue and expense to be adjusted Feb. 18, 2009
• Projected June 30, 2009 Fund Balance: $227,172.
11
Statement of Changes in Fund Balance
For the Fiscal Year Ended June 30, 2009
With Actuals for Fiscal Year 2007-08 and Comparative Budget Fiscal Year 2008-09
Public Safety Special Revenue Funds
Fund Balance (Net Assetsl
Beginning Fund Balance (Net Assets) Unreserved
Revenues
Expenditures
Net Difference (Revenues Less Expenditures)
Audited Budget to Budget to
2007-08 2008-09 2008-09 Est Actuals Est Actuals
Actuals Budget Estimated Actuals Variance $ Variance %
190,544
175,243
140,206
(35,037)
157,041
36,211
207,577
171,366
207.379
94.741
120.611
(25.8701
(50,338)
(58,530)
86,966
145,496
Fund Balance /Net Assetsl
Ending Fund Balance (Net Assets) Unreserved 140,206 116,713 227,172 110,459
82.6%
-21.4%
12
Library Fund Summary
• Revenues:
• Transfer from the General Fund is reduced by
$60,600 due to vacant positions.
• Projected June 30, 2009 Fund Balance: $55,678
13
Statement of Changes in Fund Balance
For the Fiscal Year Ended June 30, 2009
With Actuals for Fiscal Year 2007-08 and Comparative Budget Fiscal Year 2008-09
Library Fund
Fund Balance (Net Assetsl
Beginning Fund Balance (Net Assets) Unreserved
Revenues
Expenditures
Net Difference (Revenues Less Expenditures)
Fund Balance /Net Assetsl
Ending Fund Balance (Net Assets) Unreserved
Audited Budget to Budget to
2007-08 2008-09 2008-09 Est Actuals Est Actuals
Actuals Budget Estimated Actuals Variance $ Variance %
659,572
659,885
685,687
25,802
1,764,025
2,525,294
2,460,367
(64,927) -2.6%
1.737.910
3.176.759
3.090.376
86.383 2.8%
26,115
(651,465)
(630,009)
21,456
685,687 8,420 55,678 47,258
14