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FY 14 Budget Presentation 20 May 2013

FY 14 Budget Presentation 20 May 2013. Mission Statement: To provide value added services in a customer friendly, cost efficient and effective manner resulting in a safe and prosperous community. Positive Focus.

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FY 14 Budget Presentation 20 May 2013

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  1. FY 14 Budget Presentation20 May 2013

  2. Mission Statement:To provide value added services in a customer friendly, cost efficient and effective manner resulting in a safe and prosperous community

  3. Positive Focus • Honored to work with a progressive, forward thinking and committed Mayor, City Council, Department Directors and dedicated employees

  4. Live Within Our Means…. • By law, NC localities must operate within a balanced budget • It is often heard that in tough times, government should tighten its belt and live within its means • When governments tighten their belts, citizens, customers and employees feel the squeeze

  5. Approach to FY14 Budget Development • Constrained Operating Budget Requests from Department Directors • Requests included CIP items • Analysis of Revenue Stream • Prioritizing expenditure requests (as with business and citizens, costs to government also increases each year)

  6. The FY14 Budget is… • Seriously Constrained and Does Not fully address the needs of the municipal organization, particularly capital improvements and repairs, and/or all of the City Council’s initiatives and strategic objectives. • A No-Frills Budget

  7. We’ve been in this mode since 1999 • Henderson has been in the Recessionary mode for several years • A great deal of the elasticity and flexibilitythat normally exists within a budget has already been utilized

  8. Total Budget • The Total Budget, adjusted for inter-fund transfers, is: • $35,751,900

  9. Major Budgetary Impacts at a Glance:Fee/Rate/Tax Increases • 8.3 Cents Property Tax Increase • 50 Cents Monthly Sanitation Fee Increase • Regional Water Rate Increase = 5% • Water Rate Increase = 8% • Sewer Rate Increase = 2.5%

  10. Impacts on Residential Customers • For in-city homeowner with $200,000 home and using 800 cf of water a month, estimated annual impact of increases would be $194.73

  11. Budgetary Impacts at a Glance:Personnel • No Cost of living increase • Career Development is funded • Unfreeze 1 position—Firefighter • No new positions are recommended. Proposed new CD Director position not funded • Provision for pay & classification study • Medical insurance decreased 5% • Provision of wellness program incentive

  12. Individual Funds • Now that we’ve taken a look at the global budget issues, let’s look at the four operating funds: • General Fund • Regional Water Fund • Water Fund • Sewer Fund

  13. General Fund • Work Horse of all City Budgets • Provides for GENERAL services including • Public Safety: Police, Fire, E-911 • Cultural: Library, Recreation, • Public Health & Welfare: code enforcement, sanitation, Planning/Zoning • General Administration of City • Archaic revenue structure (property tax and sales taxes based on products; not services)

  14. General Fund Revenues:Primary Revenue Sources • Primary Revenue Sources • Property Tax: 39% • Sales Taxes: 15% • Sanitation Fee: 11% 65%

  15. Property Tax • 39% of General Fund Budget • One of only two major revenue sources that is at the discretion of Council • Recommended to increase from 58.5 cents to 66.8 cents per hundred dollar valuation

  16. Property Tax Increase • About 3 cents of increase due to not utilizing undesignated fund balance to balance the budget

  17. Property Tax Increase • Part of 5.3 cents increase to cover decreased revenue estimates for: • Prior years’ tax collections • Serious reduction in Privilege License revenues due to loss of inter-net cafés, and other sources. • Part of 5.3 cents to cover reduction in Powell Bill Transfer • Part of 5.3 cents increase to cover increased costs of operations, including State’s new Unemployment Tax on positions

  18. General Fund Revenues:Sales Taxes Recovery began in FY12, remained flat in FY13 and projected 2% increase for FY14.

  19. General Fund Revenues:Undesignated Fund Balance

  20. General Fund:Expenditures

  21. General Fund Expenditures:Where Does the $ Go?

  22. General Fund Expenditures:Public Safety

  23. General Fund:Areas of Largest Increase • Increased costs for • Joint Programs ($40,300) • E-911 • Tax Billing and Collections • Board of Elections • Recreation • Fire & Police ($433,800)(non-asset forfeiture) • Garage Sales (M/R) ($81,870) • Human Resources ($58,740) • Recreation Services ($45,535)

  24. General Fund Expenditures:Gaps • Many Capital improvements not addressed in all departments; however, funding is provided for contracted services for Recreation CIP study • No funding for Grant Writer with COG • No funding for proposed CD Director position • Heavy reliance on asset forfeiture to purchase police cars

  25. Regional Water Fund:Revenues • 97% of revenues come from the sale of water to the three regional partners: Henderson, 60%, and Warren County and Oxford at 20% each • 5% rate increase for increased costs for operations and capital improvements

  26. Regional Water Fund:Revenues 5% Increase Each % of increase = about $38,000

  27. Regional Water Fund Expenditures:Major Initiatives • Obtain Inter-Basin Transfer of Water Permit to 20mgd that will provide for expansion of plant • Physical Expansion of Plant to 20mgdCapital improvements: Chemical Pit and Clearwell Roof • Development of rate stabilization/debt service plan

  28. Water Fund:Revenues • 97% of revenues come from the sale of water to • 8,800 customers • Four governmental customers • Vance County 1A comes on-line this year • Granville County not yet active customer • Operates as an Enterprise Fund

  29. Water Fund Revenues:Rate Increase • 8% Rate Increase • Each 1% = about • $25,000

  30. Water Fund Revenues:Rate Increase Comparison

  31. Water Fund:Major Initiatives • Water Meter Replacement Program continues • 2” Line Replacement continues

  32. Sewer Fund:Revenues • 87%, from sewer user fee • Operates as an enterprise fund

  33. Sewer Fund Revenues:Rate Increase • 2.5% rate increase (less than projected last year) • Each 1% = about $37,700

  34. Sewer Fund Revenues:Rate Impact Comparison

  35. Sewer Fund Expenditures:Major Initiatives Underway • Renovation to Sewer Plant • Sandy Creek Basin Sewer Line Rehab • Sandy Creek Lift Station Replacement • Development of rate stabilization/debt service plan

  36. Insurance Utilization is Excellent: 5% rate decrease

  37. Health Insurance • Kudos to HR Director Cathy Brown and all employees/retirees that have worked hard to keep costs down • Wellness program working well • $23,000 in General Fund for new wellness initiative in FY14

  38. Tighten the Belts • Belt tightening affects not only the City, it also affects its customers and citizens through reductions in levels of service or elimination of certain services • The staff and I look forward to working with Mayor and Council as we begin the budget review/adoption processes

  39. First Budget Review This Thursday Night • 64: Regional Water Fund • 46: Regional Capital Improvements Fund • 78: Capital Reserve Regional Fund • 30: Water Fund • 43: Water Capital Improvements Fund • 70: Capital Reserve Utilities Fund • 79: Water Rate Stabilization Fund

  40. FY14 Budget:In Closing • Thank you for your time and patience this evening • First Budget Work Session is this Thursday, • Questions?

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