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FY13 Budget Recommendations Overview June 12, 2012

FY13 Budget Recommendations Overview June 12, 2012. Agenda . FY13 Budget Overview FY13 Budget Challenge FY13 Budget Solutions Overview of Spending & Revenue Next Steps Estimated Tax Rate Impacts Four Year Forecast. FY13 Budget Overview. Overall Budget:

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FY13 Budget Recommendations Overview June 12, 2012

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  1. FY13 Budget Recommendations Overview June 12, 2012

  2. Agenda • FY13 Budget Overview • FY13 Budget Challenge • FY13 Budget Solutions • Overview of Spending & Revenue • Next Steps • Estimated Tax Rate Impacts • Four Year Forecast

  3. FY13 Budget Overview • Overall Budget: • Discretionary vs. Non-Discretionary: • City / Schools Breakdown:

  4. FY13 Budget Challenge • Throughout the FY13 budget planning process, spending and revenue continued to be updated based on the most available information. • The major drivers of the gap continued to fluctuate throughout the planning process. • In general, the drivers of the budget gap included:

  5. FY13 Budget Solutions • To solve for the projected budget gap, many solutions were used to balance budget reductions, revenues and use of reserves:

  6. FY13 Budget Solutions • Every department was impacted by budget reductions. • $10.2 million in reductions from personal services (salaries, benefits, elimination of vacant positions, layoffs); • $4.6 million in reductions from other than personal services (OTPS); • $269,000 in reductions in capital expenditures. • Overall, the budget reductions across departments impacted 108.0 requested FTEs which is divided into: • Elimination of 96.0 FTE vacancies and the layoff of 12.0 FTEs. • 12.0 FTE Layoffs Include 2.0 HHS,1.0 HR, 4.0 Parks, 2.0 Facilities, 1.0 IT, 2.0 Libraries • Negotiations with all the city unions which may impact some of the proposed layoffs • The General Fund FTE complement is at its lowest to date at 1,207.3 FTEs. That is a reduction of 374 FTEs or 24% since Fiscal Year 2008

  7. Position Reduction Impacts • Public Safety Division: Police- 22 vacant sworn officer positions and 9 vacant civilian positions including detention attendants and cadets; Fire – 12 vacancies (11 firefighters; 1 clerical in Prevention Bureau) Brown out ladder 9 full time and potentially another company depending how much overtime is needed.; Dispatch – two new positions necessary for combining dispatch to one central location • PBRM Division – 6 layoffs and 2 vacancies effecting the After School Program and Facilities internal operations – Less programs available for children • HHS Division – 3.5 vacancies and 4.0 layoffs including outreach workers and senior clerks. As a result, 3 branches are closing. • DPW Division – 7 vacancies including street sweeping and motor equipment operators. Reducing the number of street sweepings • Planning and Economic Development Division – 4 vacancies including building and code inspectors. Less inspections done in the community • A&F Division - 5.5 vacancies and 2 layoffs including 3-1-1,Treasurer and Collector Customer Service Reps and Computer, Telephone and HR Coordinators – Wait times increase for both tax payers and employees

  8. FY13 Budget Solutions • The City is responsible for funding 100% of School Transportation costs, which totals $21.7 million in Fiscal Year 2013. • This is a reduction from the original request by $1.7 million from • Current year operating efficiencies; • Utilizing the PVTA for some services; and • Assuming State funding for homelessness transportation as approved by the State House of Representatives.

  9. FY13 Budget Solutions • The City is responsible for 100% of all City and School department debt service for large scale capital projects. • The City has a Capital Improvement Plan (CIP) worth $413 million. It was hoped that an investment in the issuance of new debt to help meet some of these critical capital needs could be afforded in Fiscal Year 2013. • No new long-term debt issuances can be contemplated for next year – that means • No new road projects • No demolitions for blight • No new upgrades or major maintenance projects to facilities • Note – The City will need to consider short term debt issuance for storm related costs and will consider short term debt services for the most critical projects.

  10. FY13 Budget Solutions • Animal Control - animal adoption fees • Health and Human Services - 20 License fees • Medicaid Reimbursement - reimbursement for specific health services provided to students in special education programs. • Assessors - stringent fines will also be assessed to business that are not complying with State mandated reporting requirements • Adjustment for recent trends – recent trends for the City’s disbursement of the local option meals tax show stronger collections

  11. FY13 Budget Solutions • Federal and State laws allow communities to charge an administrative rate to School department grants to recoup the costs of back office services provided in support of those grants. • The City had not previously charged this rate but is instituting this charge for Fiscal Year 2013 at 4% which is lower than the 6.24% composite rate calculated in the City’s Cost Allocation Plan. • This will not take away from services to children and will truly reflect the City’s costs associated with these grants. • Assessors Office is continually working to update the levy through the budget planning year. • As a result of this review, an additional $289,000 in levy capacity was identified.

  12. FY13 Budget Solutions • City departments submitted revenue increases totaling $1.3 million that are pending City Council review and action. • Trash Fee - $10 increase to the trash fee • Trash Demand Fee – increase to be consistent with the demand fee for taxes • Hotel / Motel Tax - enacting the final municipal partnership act local option • City Clerk Fees - increases to physicians fees, tag sales, charitable solicitations, raffle permits and dog licenses (note: General Gov’t Committee recommends $187K) • Building Code Fees - updating the entire fee schedule for building permits based upon comparisons made to surrounding communities. • Animal Control Fees - increases for boarding and impounding

  13. FY13 Budget Solutions • As part of the annual Free Cash calculation completed by the Department of Revenue, the Enterprise Fund is analyzed for its free cash or surplus funds. • Based upon the FY11 calculation approximately $300,000 in Free Cash remains in the Enterprise Fund for appropriation. • Since all revenues associated with trash services must stay within the Enterprise Fund, this revenue will be used to lower the General Fund subsidy to the Enterprise Fund. • A review of grant and other accounts maintained on the City’s books revealed some residual balances that are still available for expenditure however the need of the grant or other service has been met. • This allows for a sweep of these balances into the City’s General Fund revenue for next year. The City is continually reviewing accounts to ensure that balances are cleaned and accounts are properly reported or closed in MUNIS, the City’s financial book of record.

  14. FY13 Budget Solutions • In Fiscal Year 2012, the City finalized the sale of its Fire Training Center to the State in order for the State to operate a western MA facility for training. • The City will receive $2 million from this sale and proposes using $1 million toward City operating costs. • The remaining $1 million may be used to address some capital needs of the Fire department for apparatus and support vehicles replacement. • As part of the sale, the City has free access to the training center. • Annually, the City’s Board of Assessors reviews the overlay account to determine if obligations have been met and balances can be declared as surplus. • Each year, the City reserves a new amount for that fiscal years potential obligations. • The Assessors have declared surpluses in the overlay accounts for FY07, FY08, FY09 and FY10 totaling $5 million.

  15. FY13 Budget Solutions • The City is proposing to use a total of $9.8 million in reserves in FY13 • $8.0 million will support General Fund Revenues for operating costs • $1.8 million will be set aside in a separate reserve account for the State’s share of the Quinn bill to be used, if necessary, pending the outcome of current contract negotiations. • The amount recommended would leave the fund balance at 5.48% of the overall budget which complies with the City’s financial ordinances. • Utilizing reserves is necessary to fund programs and services that would otherwise be decimated by that level of reductions.

  16. Next Steps • Budget Document – What’s Included • Overview Information • Divisional Details • Appendices (including the MYFP) • MUNIS Reports • Orders • City Council Hearings • Budget Adoption • Setting Tax Rate • Planning for next four years

  17. Estimated Tax Rate Impacts

  18. Estimated Tax Rate Impacts

  19. Four Year Forecast

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