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Home My WebLink About04/28/2009 Council Presentation - FY 2010 Budget - Revenue Outlook/Operating Budget.TOWN OF MARANA r~ FY 2010 Budget -Revenue Outlook/Operating Buck ... r ~ ~.. r ,. /' : T. 1.: ~ ~ ~'w I '. .11y' ~, xy-, .. ,=t, ~..~~ ~~ ~ ~ (; tf iff (~~ ~.' if{ ' ~~ ~ ~ ~M. . . ,< ~; ~ ` ~ ~;:.. y.~.~ ~»: ~:' April 2009 Council Study Session Overview I. FY 2010 Budget Goals II. Year-to-Date FY 2009 Revenue Update III. Projected FY 2010 Revenues IV. Budget Modifications - Levels I and II V. Next Steps in Budget Process VI. Budget Modifications -Level 3 Tools FY 2010 Budget Goals • Maintain Critical Operations - Public Safety - Infrastructure • Minimize Impact to Personnel • Position Town for Quick Economic Recovery • Align Decisions with Strategic Plan Year-to-Date FY 2009 Revenue Update 10.8% State Budget Summary • The State economy continues to deteriorate - http://v~rww.azleg.state.az.us/jlbc.htm • Negative revenue growth through 2010 • State shortfall projections - FY2010 between $2.2B - $2.9B • Financial impact on municipalities? General Fund -Current Condition Projected • 90% of revenues are Revenue Class Over/(Under) - Transaction Privilege Taxes (TPT) TPT $(2.0)M - State Shared Revenue State Shared $(0.4)M - Development Related Development Revenues $(1.2)M • All highly dependent Revenues on the economy Total $(3.6)M • Revenues have slowed significantly • Impact of other revenues 15% 5% -5% -15% -2S% -35% -45% Marana Tax Collections for Selected Categories Year Over Year Revenue Changes ]uly -March 2009 8.3°l0 -35.7'% ]an-09 Feb-09 Mar-09 ^ Contracting Retail CY Average -34.7% Questions? Projected FY 2010 Revenues Transaction Privilege Taxes (TPT) $22 $21 $20 $19 $18 - $17 $16 $20.8 $20.5 • General Fund - ~ 12% or $2.5M • Decreases in retail and contracting partially offset by increases in lodging and restaurants • Transportation Fund - X33% or $2.7M 2005-06 2006-07 2007-08 2008-09 2008-09 2009-10 Budget Estimate Budget Shared Revenues $7.5 $7.7 _ _ $7.3 • General Fund - - Auto lieu ~8% or $97K; Urban Revenue Sharing ~ 14% or $540K; State Shared Sales Tax ~ 18% or $442 K • HURF X22% or $510K 2005-06 2006-07 2007-08 2008-09 2008-09 2009-10 Budget Estimate Budget Licenses, Fees & Permits $9 $8 $7 $6 $5 $4 $3 $2 $o ~ 2005-06 2006-07 2007-08 __ 2008-09 2008-09 2009-10 Budget Estimate Budget • Single family: - FY2009 - 425 budgeted; actual 155 - FY2010 - 70 budgeted • Commercial development - ~12 major projects; ~36 tenant improvements • Overall X38% or $1.3M 2010 General Fund - Revenue Summary Year over Year Revenue Change Change $ March $(6.0)M -17% April $(5.2)M -15°l0 Ongoing Expenditure Adjustments Expenditure Adjustments $3.6M $2.OM Vacant positions eliminations $1.2M FY2009 personnel adjustments (0.4)M Operating budget reductions 1.2M Total ongoing adjustment $2.OM Balance $(2.4)M $(3.2)M Total Projected General Fund 2010 Shortfall Remaining revenue shortfall Expenses to be added back Reimbursable labor Supplemental requests Current health care cost Other cost adjustments $ 3.2 1.1 0.5 0.3 0.1 Subtotal Total projected shortfall for FY 2010 3.6 $ 5.2 Preliminary FY 2010 General Fund Expenditure Summary • $2.7M decrease Prelim 2010 Revised 2009 Change - $0.5M in ongoing supplemental requests $o.7M in one-time funding requests $34.4M $37.1 M -7% - CI P costs to be added General Fund Budgeted Transfer to: Transfers Amount Other Grants for grant match 100,000 LTAF for grant match 20,000 1997 Bonds for debt service 157,328 2003 Bonds for debt service 1,385,278 2.004.. Bonds for debt service 633,425 2008 Bands far debt service 242,3.37 Airport for grant match 565,000 Total budgeted transfers 3,103,368 Preliminary FY 2010 Water Utility Fund Expense Summary • Incorporates rate structure • Funds central service cost reimbursements (General Fund) • Includes emergency funding Prelim Budget Budget Change 2010 2009 $2.9M $2.9M 0% Preliminary FY 2010 Airport Fund Expense Summary • $64K in debt service Prelim transfers for CIP project Budget Budget Change funding 2010 2009 $441K $392K 13% Questions? FY 2010 Budget Modifications Levels 1 and 2 Impact of Revenues and Expenditures on Reserves Before Budget Modifications (Not Recommended) AmountsinMillion$ $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 (Projected) Fund Balance EOY •~~~~~~~ 'Total Revenues Total Expenditures FY2005-06 FY2006-07 FY2007-08 FY2008-09 FY2009-10 FY 20.10 -11 Level 1: Increased Revenue & Cost Savings • Fee Schedule Adjustments • Bed Tax Rate Adjustment $1.8 Mllllon Allocation of staff and operations to HURF Increased Reimbursable Labor (CIP) Revenue & Health Care Costs C~St ~aVingS Transaction Privile e Tax g (TPT) Enforcement and Compliance Impact of Revenues and Expenditures on Reserves nth Level 1 Modifications - $1.8M AmountsinMillion$ $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 ® Fund Balance EOYTotal Revenues ~ - =Total Expenditures FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010 -11 (Projected) Level 2: Operational Reductions & Cost Avoidance • Departmental Savings: -Additional. Reductions in Travel & Training ~~.2rJ M I ~ ~ 1011 -Suspend Vehicle Allowances - Eliminate Non-Essential Memberships. Scale-Back Special Events (Founders' Day, Star-Spangled Spectacular, Fall Operatl0l"laI Heritage Festival, Holiday Tree Lighting) Reductions & Increase Employee Share of Benefits Costs COSt Renegotiate/Rebid Contracts AVOldc~n~~ Eliminate Tuition Reimbursement Pro ram g ' - Eliminate Employee Housing Assistance . Program $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 Impact of Revenues and Expenditures on Reserves nth Level 1 & 2 Modifications - $2.05M AmountsinMillion$ - --- Fund Balance EOY Total Revenues ~~ ° =Total Expenditures ~, FY2005-06 FY2006-07 FY2007-08 FY2008-09 FY2009-10 FY 2010 -11 (Projected) Level 3: Elimination' or Reduction of Services & Personnel - Transportation Sales Tax - Voluntary Reduction in Pay (vRIP> -Separation Incentive Plan (SIP) -Worker Recession Assignment Program (WRAP) - Other Pay Reduction Options • IF NEEDED --PHASE [[ Tools - Mandatory Furlough 1""Y.. f , ion Grogram • TODAY - PHASE I Tools Impact of Revenues and Expenditures on Reserves With Level 1, 2 and $1.6M in Transportation Tax - $3.65M Amountsi n Million $ $40.0 $35.0 ~-- i $30.0 ~ - -- $25.0 $20.0 $13.7 $15.0 ----_ . -------____ $10.0 --- _ _ $5.0 $0.0 ~ - FY 2005-06 $19.2 $20.4 $16.1 $14.6 $10.5 FY2006-07 FY2007-08 FY2008-09 i=Y2009-10 FY 2010 -11 ~~,._:__a_.~~ $(0.6) $(4.3) $(1.5) $(4.1) Budget Modification Strategy Summary $3.65 Million as of 4. X1.8 Millions Increased Revenue & Cost Savings LEVEL 1 $0.25 Million Operational Reductions 8~ Cost Avoidance LEVEL 2 LEAST _ - MOST IMPACT ON PEF~SONNEL & SERVICES LEVEL 3 Next Steps April 28, 2009: Council approval requested for voluntary reduction programs April 29, 2009: Roll-out and employee education begins (Q & A, Web Information, One to One meetings, Group meetings); forms and applications available April 29 -May 19, 2009: Employee election period for voluntary programs (where applicable) May 5, 2009: Council approval requested for mandatory employee reduction programs to be in place if needed (revised layoff policies, transition package) Next Steps May 5, 2009: Council approval requested for FY 2010 Health Benefit Rates May 12, 2009: Council Study Session on CIP and Fee Adjustments May 20, 2009: Regular Council Meeting and Study Session to Finalize Level 3 Options (Voluntary and Mandatory Programs) June 2, 2009: Tentative Budget Adoption June 23, 2009: Final Budget Adoption Questions? Level 3 Employee Tools TODAY: Phase I -Voluntary Seeking Council Approval Today For: - Voluntary Reduction in Pay (VRIP) -Separation Incentive Plan (SIP) -Worker Recession Assignment Program ~vvr<Hr~ Voluntary Reduction in Pay (VRIPj • Voluntary reduction in pay by working less hours • Applies to all classified and unclassified employees except certified peace officers • Election period April 29 -May 19, 2009 Voluntary Reduction in Pay (VRIP) Furlough Features • Employees may elect a minimum of 5 voluntary furlough days up to a maximum of 15 days; must be used in 1 day increments • All requests must receive department head concurrence and Town Manager approval • Furlough days receive preference for days off, ahead of vacation • Furlough days do not affect vacation and sick leave accrual rate Furlough days da affect gross salary reported to SRS and Social Security fog FY 20~ 0 • ~~luntary furlough days o ~ credited toward mandatory days if itpe~~nted Voluntary Reduction in Pay (VRIP continued) Reduction in Hours or Job Share Features • Reduction in hours for current job or job-share effective first pay period in FY 2010 • Effective for duration of employment during FY 2010 • Employee's regular work schedule must be at least 20 hours per week to remain benefit eligible (health benefits) • Vacation/Sick Leaves and Holidays prorated based on hours Separation Incentive Plan (SIP) •Incentives to employee who voluntarily separate employment (retirement, resignation) •Applies to regular full and part-time classified/unclassified employees •Election period April 29 -May 19, 2009; separation by August 31, 2009 •Provides: - Sick leave payout at 50% of accrued balance -.Basic town plan fife insurance for the employee for one year after separation $15o medical subsidy for town plan or ASKS/PSI~RS for 6 months - Severance oav epua~ to .5°l° to 2%Q of base salary times years of Separation Incentive Plan (SIP) Severance qav lto max of $50.0001: 0 to 10 years of service 1.5% of annual base salary for eacch year >10 to 15 years of service 1.75% of annual base salary for each year Over 15 years of service 2% of annual salary for each year EXAMPLE: :..Buse Salary of $30,000 x .OZ ~15.~ years of service} $00~ per year . $00~ per ~te~r x ~ 5. years = ~~,3On total payout Worker Recession Assignment Program (WRAP) Begins 4/29/09 • Classified employees only • Directed or voluntary assignments • WRAP assignment may be special project or vacant position • All newly vacant positions reviewed for fill, eliminate or WRAP • Open, competitive internal process and selection based on competencies and job performance history • Employee must be in good standing - no discipline or WI P for past 12 months • Changes to pay (if needed) are temporary, concurrent with the length of assignment & adjustments in accordance .with Personnel F~olicies • Voluntary ~~' ~r~avides preference if layoff occurs in employee's regua~ ciassifeatior ~. ` . Questions?