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Home My WebLink AboutAgenda Report - May 14, 2008 B-01 SMAGENDA ITEM B-01 • CITY OF LODI %W COUNCIL COMMUNICATION rnn AGENDA TITLE: Review of the 2008-09 Draft Budget MEETING DATE: May 14,2008 (Special Meeting) PREPARED B Y City Manager RECOMMENDED ACTION: Review of 2008-09 draft budget. BACKGROUND INFORMATION: The review of the draft 2008-09 budget will continue. City Council Members were previously given copies of the 2008-09 draft budget and are encouraged to bring the budget document to the meeting. Comcast will be on site Wednesday evening to televise the meeting. FISCAL IMPACT: The draft 2008-09 budget provides an expenditure plan for all funds. The All Funds Budget is $186,957,380. The proposed General Fund Budget is approximately $34,104,000. FUNDING AVAILABLE: NIA BK/JMP Blair King City Manager APPROVED: BlaiKKEV, City Manager N:1AdministratiouNCLERKICouncillCOUNCOM1BudgetReview20n8-U9b.DOC GASB STATEMENT 45 ON OPEB ACCOUNTING BY GOVERNMENTS A FEW BASIC QUESTIONS AND ANSWERS 1. Why was Statement 45 on OPEB accounting by governments necessary? Statement 45 was issued to provide more complete, reliable, and decision -useful financial reporting regarding the costs and financial obligations that governments incur when they provide postemployment benefits other than pensions (OPEB) as part of the compensation for services rendered by their employees. Postemployment healthcare benefits, the most common form of OPEB, are a very significant financial commitment for many governments. 2. How was OPEB accounting and financial reporting done prior to Statement 45? Prior to Statement 45, governments typically followed a "pay-as-you-go" accounting approach in which the cost of benefits is not reported until after employees retire. However, this approach is not comprehensive—only revealing a limited amount of data and failing to account for costs and obligations incurred as governments receive employee services each year for which they have promised future benefit payments in exchange. 3. What does Statement 45 accomplish? • When they implement Statement 45, many governments will report, for the first time, annual OPEB cost and their unfunded actuarial accrued liabilities for past service costs. This will foster improved accountability and a better foundation for informed policy decisions about, for example, the level and types of benefits provided and potential methods of financing those benefits. The Standard also: • Results in reporting the estimated cost of the benefits as expense each year during the years that employees are providing services to the government and its constituents in exchange for those benefits. • Provides, to the diverse users of a government's financial reports, more accurate information about the total cost of the services that a government provides to its constituents. • Clarifies whether the amount a government has paid or contributed for OPEB during the report year has covered its annual OPEB cost. Generally, the more of its annual OPEB cost that a government chooses to defer, the higher will be (a) its unfunded actuarial accrued liability and (b) the cash flow demands on the government and its tax or rate payers in future years. • Provides better information to report users about a government's unfunded actuarial accrued liabilities (the difference between a government's total obligation for OPEB and any assets it has set aside for financing the benefits) and changes in the #untied status q f the benefits overtime. °r MEMORANDUM Office of George F. Morrow, Director TO: Kirk Evans, Budget Manager FROM. George Morrow, Electric Utility Director DATE: April 14,2008 SUBJECT: Background on Budgeted EUD Position Changes You requested that I provide a brief background statement on EUi7 position changes In the FY09 budget. Distribution Planner (3) — Title change from Electrical Estimator as per City Council approved IBEW contract. (No cost) 2. Distribution Planning Supervisor — Title change from Sr. Electrical Estimator as per City Council approved IBEW contract. (No cost) 3. Electrical Technician — New positionto resolve technical oversight on FY08 budget. This workgroup is composed of two Electronic Technicians — one is working out of position as Senior Electrical Technician. Previously, a Senior Electrical Technician and one Electrical Technician position were budgeted. Technically this should have been budgeted as a Senior Electrical Technician and two Electrical Technicians. (Fully loaded annual cost of $109,371) 4. Assistant Electric Utility Director (2) — This is a proposed upgrade for the two EUD division managers (Electric Services Manager and Engineering & Operations Manager) to reflect enhanced experience and responsibility. A pay increase of five percent is being incorporated into the proposed budget (Fully loaded annual cost of $42,015). Ple I t me know K I can provide anything further on this subject. 61wo-_ _FEttftr+ Kector 5_ jV_Or Answers to Councilmember Ouestions related to Revenues Sales Tax Revenues The estimate for Sales Tax Revenues has been combined with line item 5039 -In lieu Sales Tax in order to provide better information related to the amount of the total sales taxes. The combined amounts for historical purposes are as follows: 2005-06 $ 9,811,974 2006-07 $10,136,958 2007-08 bdgt $10,209,000 2007-08 est. $ 9,837,310 2008-09 bdgt $ 9,860,000 Line 5971 Fire Department Services Other The estimated actual for 07-08 is 49,285, why is there no amount entered in FY 2008-09 budget? The total amount of fees for the Fire Department activities line items 5971,5973, 5974 and 5975 of OK +75K +40K) $120,000 appears reasonable based on the total amount received in the fiscal year 2006-07 column of (25,075+5,475+56,035+42,384) $128,969. Although the distribution amongst the accounts may be different the total estimated of $120,000 appears reasonable. Line 6121 -Engineering Fees The increase in fiscal year 2008-09 to $470,010 from the estimated actual of 2007-08 reflects activity level increases from development agreements amounts to be received in fiscal year 2008-09. Line 6157 Outside city services The 2007-08 budget and the 2007-08 estimated actual column reflect one time revenues (265,000 and 250,000 respectively) from the "signing bonus" amount from the Flag City hookup to White Slough treatment facilities. Line 5211 -Code Enforcement Fine Has the infractions program been implemented? The infractions program has been implemented. It is difficult to predict, and anticipate, how much the fines revenue amount each year will be. The implementation was not intended to be a source of revenue for the City, but rather a means to garner compliance from property owners who might otherwise continue to neglect their property. Page 1 Answers to Councilmember Questions related to Expenditures Memorandums of Understanding Increases Increases as approved by City Council: Police Mid -management Police Officers Association Dispatchers Lodi Firefighters Lodi Fire Mid -management Lodi Mid Management International Brotherhood of Electrical workers Police Department 2007-08 2008-09 $232,000 $90,200 $516,400 $77.200 $505,000 $212,600 $135,300 $284,200 $59,000 $123,100 Page 55; Reason for decrease in line 7302- with a new photocopy machine the cost per copy and cost per year are anticipated to decrease. Page 56; line item 7355 Sublet Service Contracts -Why the increase to $124,255 This amount represents all the maintenance & service agreements for the majority of our technology equipment. As equipment ages, the cost to maintain & repair them increases. Service/maintenance contracts include Data 9-1-1, CLETS & Delta Wireless. Page 65; line 7112 Medical Insurance- Why did amount decrease from 159,800 to 43,887? This is a data entry error. The amount keyed into line item 7112 should have been $21,500 with a distribution to all of the remaining line items. This will be corrected in the final documents that are prepared for City Council on May 21. Page 2