HomeMy WebLinkAboutAgenda Report - January 18, 2005 B-01 SMAGENDA ITEM V3001
'• CITY OF LODI
. ` COUNCIL COMMUNICATION
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AGENDA TITLE: Discuss 2005-06 Budget Strategy
MEETING DATE: January 18, 2005
PREPARED BY: Finance Director
RECOMMENDED ACTION: That Council continues discussions regarding the 2005-06 Budget
Strategy.
BACKGROUND INFORMATION: The City Council continued discussions of the 2005-06 budget at
the Council meeting on January 11, 2005. Staff would like to
continue that discussion during the Tuesday morning meeting
scheduled on January 18,2005. Attached is a general outline of the points of discussion for the meeting
in outline form.
There was no discussion related to the Accounting policy changes on January 11, 2005. Staff would like
to begin the meeting Tuesday morning with that topic. Following is a brief discussion of that point and
the other topics we would like to present on Tuesday:
Discussion of Accounting Policy Changes:
1) Many departments and programs are accounted for in the General Fund. In accordance
with budget policies, this has involved subsidizing some activities with general revenues. And,
in other cases it has involved paying for general activities with designated revenues. Although
this can be considered a permissible short term practice, it is not a practice which should be
continued on a long term basis. With the budget challenge we now face it is particularly
important that we make all the efforts we can at clarifying and identifying financial resources
with the associated services that those resources are utilized for. Specific examples of where
the matching of resources with the associated programs needs to be more carefully evaluated
is in the Community Development, Parks and Recreation, Community Center and Public
Works departments. Ultimately the objective is to make it as clear as possible within our
accounting and budgeting structure the relationship between revenues and services provided.
However, aside from the accounting practices we follow, the question for City Council is
whether general revenues should be used to subsidize operations that could be paid for with
direct revenues. Staff seeks your direction on this question. The answer to this policy question
may result in the increase of some fees and the reclassification of some activities out of the
general fund and into separate "specially designated funds."
2) Internal Services Activities are accounted for in the general fund for the most part. In the
past some of these activities have been reclassified to other funds (Medical Insurance,
Workers Compensation and other insurances). In order to more clearly associate the cost of
APPROVED:
Jqfiet S. Keefer, Interim City Manager
services provided internally by the Finance, Information Systems, Human Resources, Building
Facilities and Vehicle Maintenance Departments, staff is recommending that these activities
be reclassified to Internal Service Funds.
Discussion of Revenue Enhancements:
1) General Revenues- there are several elements associated with enhancing general
revenues. One of the primary ways in which to increase general revenues is through
investment in those activities which will result in increased economic activity. Staff proposes
that all programs involved with enhancing economic activity be evaluated and prioritized so
that continuing support of those programs and activities, which result in long term benefits to
the community, be viewed as having the highest priority within the community promotion
budget for 2005-06 and beyond.
2) Several departments will be recommending that the fees and rates that they charge for
specific programs and activities be increased in order to ensure that those activities not be
subsidized by general revenues as has been the case in past budgets. Specific examples of
these revenues will be discussed on Tuesday and include Fees for Parks and Recreation
activities, Fees for Community events at the Hutchins Street Square and Fire inspection fees.
Discussion of Mid Year Budget Adjustments:
There will be one significant budget adjustment that staff is recommending for 2004-05.
The adjustment that will be recommended by staff is that the Community Development
Department fills one of the current vacancies and starts the General Plan review process.
This will entail hiring staff in the current fiscal year and a consultant at a later time; and will
be funded with Impact Mitigation Fees.
Discussion of Internal Audit Function:
As indicated to the Council at the previous meeting, the Finance Department is interested
in starting a review of operations of departments for efficiencies and effectiveness. This
would be a significant commitment of resources to accomplish this objective; and will be
reviewed with the City Manager in conjunction with discussions with all departments
before it will be considered for implementation.
Gann Appropriations Limitation;
Staff will discuss the limitation amount and how it has been adjusted over the years to
arrive at the amount for which it is currently set.
FUNDING: Not applicable.
Ja s R. Krueger, Finance Director
Outline for Budget Discussions at Shirtsleeve Meetings
Tuesday_ January 11, 2005
Discussion of Meet and Confer Issues
A. Salary reductions
B. PERS Contributions
C. Employee Health Insurance Contribution
D. Reductions in Force
E. Outsourcing options
Discussion of Service Priorities in Conjunction with Community Survey
A. Results of Survey
B. Suggested weighting of priorities, cut %ps and target budgets to arrive
at resolution of $2.2 M imbalance.
Discussion of Accounting policy changes
A. Reclassification of Community Development, Parks and Recreation,
and Community Square to Special Revenue Funds.
B. Reclassification of Internal Services including Finance, Information
Systems Division, Building Facilities and Equipment Maintenance
divisions into Internal Services Funds.
Tuesday January 18, 2005
Discussion of Revenue Enhancements
Review Mid -year Budget Adjustments
Discussion of establishment of Internal (Operations) Audit Function to review
efficiencies and effectiveness of City Operations
Gann Appropriations Limitation
Tuesd#2 January 25, 2005
Discuss recommended strategies for development of 2005-06 budget document
Review Comprehensive Annual Financial Report for Fiscal Year ending June 30,
2004
Preliminary Information Only,
To be used for Developing Priorities for Expenditures Reductions
Baseline
Tar et
Cuts Proposed
% Reduction
City Attorney
421,400
400,300
21,100
5%
City Clerk
570,600
547,700
27,900
5%
City Manager
696,900
664,600
32,300
5%
Community Center
1,513,600
1,332,000
181,600
12%
Police
12,744,400
12,107,200
637,200
5%
Fire
7,709,400
7,323,900
385,500
5%
Community Dev. Dpt
1,974,000
1,855,600
118,400
6%
Parks
2,163,600
1,904,000
259,600
12%
RecreaWn
1,699,600
1,495,600
204,000
120/0
3,863,200
3,399,600
463,600
Public Works
8,199,700
7,543,700
656,000
8%
Informations Services Division
1,195,800
1,076,200
119,600
10%
Human Resources
689,400
620,500
68,900
10%
Finance
2,035,600
1,832,000
203,600
10%
Non -Departmental
803,700
707,300
96,400
12%
Preliminary Information Only,
To be used for Developing Priorities for Expenditures Reductions
Totals By Function
Public Safety
City Council and Appointees
Total (General Fund)
Public Works
Parks and Recreation
Community Center
Internal Services
Community Development
a
5%
5%
5%
8%
12%
12%
10%
6%
Total
Cuts 42,603,700 59,574,200 7%
Preliminary Information Only.
To be used for Developing Priorities for Expenditures Reductions
cuts
20,453,800
19,431,100
1,022,700
1.688.900
1.612.600
76.300
22,142,700
21,043,700
1,099,000
8,199,700
7,543,700
656,000
3,863,200
3,399,600
463,600
1,699,600
1,495,600
204,000
4,724,500
4,236,000
488,500
1,974,000
1,855,600
118,400
a
5%
5%
5%
8%
12%
12%
10%
6%
Total
Cuts 42,603,700 59,574,200 7%
Preliminary Information Only.
To be used for Developing Priorities for Expenditures Reductions