HomeMy WebLinkAbout2003-02-20 Council Packet - Budget Work SessionBudget Policy Work Session
February 20, 200'
1. facing a Ions of at least $800K in sales tax revenue direct from K-Mart, and more
like a 1.4 million total deficit-Larry will have handouts and provide discussion on
this and alI other budget numbers-2 things that have been going simultaneously
for a very long time at the City of Kenai and almost everywhere else: the graduated
loss of revenue, e.g. interest income, state revenue, and now K-Mart AND the
graduated increase in the costs of providing public services, e.g. personnel,
insurances, utilities, etc.
2. there is good news, however, and reasoning to recommend a calm, rational, fairly
optimistic approach to this year's budget-and that is, the healthy, commendable
fund balance, which could be used to weather a oue-year transitional stormo
3. the bad news is that the fund balance will be finite and won't last forever if we don't
take prudent, positive, and proactive measures now.
4. we recommend using this next year as a transitional year...at the end of one year,
we should have a much clearer picture and more information on which to base our
actions. Will there be another big store on the horizon? What are the actual sales
tax fosses? What does the larger economic picture took fake? We do not
recommend decimating public services, which means massive lay-offs, at this time
when we are looking at a $7 million dollar fund balance.
5. to get through this next budget year, and also to position the City carefully for the
projected years, we recommend athree-fold, combination approach: (I) budget
cuts between $100 and $200K; (2) a''/z mill increase to yield another $200K to the
already projected 1 mill increase; and (3) using the unrestricted fund balance to
cover the balance of the projected deficit.
6. throughout this year and by the beginning of next fiscal year, the will have had the o
opportunity to glean the information needed and upon which to approach the
second year. If our previous optimism and confidence has or is proving to be
unfounded, then we will have no choice at that time, but to recommend drastic
reductions in the level of public services. We do have choice this year.
What the Administration hopes for this evening is, of course, a good healthy discussion
of our recommendations as they pertain to the Council's previous budget policy
direction-which is here, (go over one by one)
BUDGET PROJECTION - GENERAL FUND
Original
Actual Actual Budget Projection Budget
FY 2001 FY 2002 FY 2003 FY 2003 FY 2004
TOTAL ASSESSED VALUE $ 350,584,054 $ 356,392,843 $ 375,900,000 $ 380,000,000 $ 391,400,000
MILL RATE 3.50 3.50 3.50 3.50 4.50
REVENUE
Property Tax $ 1,319,079 $ 1,322,042 $ 1,372,300 $ 1,415,575 $ 1,813,200
Sales Tax 3,809,239 4,180,190 4,200,000 4,000,000 3,060,000
State/Federal Revenue:
Revenue Sharing 96,923 97,483 97,000 98,264 98,000
Safe Communities and Muni. Asst. 992,426 205,593 205,000 204,718 205,000
Fish Tax 96,839 79,134 50,000 75,000 75,900
Other 58,978 67,572 49,000 61,400 49,000
Total State/Federal Revenue 445,166 449,782 401,000 439,382 427,000
Other Revenue
Licenses and Permits 71,067 85,183 38,900 64,900 53,900
Ambulance Fees 92,260 133,243 95,000 135,000 135,000
Interest 955,791 507,436 400,000 350,000 300,000
Other 525,842
~ 568,793 471,900 1,066,692 611,900
Total Other Revenue 1,644,960 1,294,655 1,005,800 1,616,592 1,100,800
Total Revenue 7,218,444 7,246,669 6,979,100 7,471,549 6,401,000
Transfers From Other Funds
Charges to other funds 921,100 960,500 933,800 933,800 966,200
Enterprise 128,334 112,495 49,523 49,523 49,523
Trust Fund 34,711 14,294 18,000 18,000 25,000
Total Transfers 1,084,145 1,087,289 1,001,323 1,001,323 1,040,723
TOTAL REVENUES AND TRANSFERS 8,302,589 8,333,958 7,980,423 8,472,872 7,441,723
Original
Actual Actual Budget Projection Budget
EXPENDITURES/APPROPRIATIONS FY 2001 FY 2002 FY 2003 FY 2003 FY 2004
General Government 1,316,894 1,616,535 1,565,128 1,866,131 1,667,730
Public Safety 3,240,920 3,377,233 3,512,557 3,625,598 3,616,352
Public Works 1,593,207 1,677,363 1,828,211 1,974,778 2,030,931
Parks, Rec. & Cultural 1,095,061 1,277,375 1,295,465 1,360,462 1,346,338
Total Operating Expenditures 7,246,082 7,948,506 8,201,361 8,826,969 8,661,351
Operating (Defcit)/Surplus before transfers 1,056,507 385,452 (220,938) (354,097) (1,219,628)
Transfers to Capital Projects 1,576,881 222,189 61,100 76,100 61,100
Other Transfers or Non Operating 300,367 657,053 221,020 221,020 186,963
Total Transfers and Non Operating 1,877,248 879,242 282,120 297,120 248,063
Total Expenditure/Appropriation 9,123,330 8,827,748 8,483,481 9,124,089 8,909,414
Total DeficitlSurplus (820,741) (493,790) (503,058) (651,217) (1,467,691)
Projected lapse (3%) - - 332,158 264,809 259,841
Adjusted (Defcit)/Surplus (820,741) (493,790) (170,900) (386,408) (1,207,850)
Residual Equity Transfers - 104,848 - - -
Beginning Fund Balance 8,926,890 8,106,149 6,738,962 7,717,207 7,330,799
Ending Fund Balance 8,106,149 7,717,207 6,568,062 7,330,799 6,122,949
Encumbrances (560,269) (318,701) (200,000) (300,000) (300,000)
Reserves and Designations (2,379,329) (2,264,480) (2,100,000) (3,026,912) (3,323,879)
Unres. Undesignated Fund Balance $ 5,166,551 $ 5,134,026 $ 4,268,062 $ 4,003,887 $ 2,499,070
BUDGET PROJECTION -GENERAL FUND
Original
Actual Actual Budget Projection Budget
FY 2001 FY 2002 FY 2003 FY 2003 FY 2004
TOTAL ASSESSED VALUE $ 350,584,054 $ 356,392,843 $ 375,900,000 $ 377,000,000 $ 388,31Q,OOD
MILL RATE 3.50 3.50 3.50 3.50 5.00
REVENUE
Property Tax $ 1,319,079 $ 1,322,042 $ 1,372,300 $ 1,415,575 $ 2,000,000
Sales Tax 3,809,239 4,180,190 4,200,000 4,000,000 3,060,000
State/Federal Revenue:
Revenue Sharing 96,923 97,483 97,000 98,264 98,000
Safe Communities and Muni. Asst. 192,426 205,593 205,000 204,718 205,000
Fish Taz 96,839 79,134 50,000 75,000 75,000
Other 58,978 67,572 49,000 61,400 49,000
Total State/Federal Revenue 445,166 449,782 401,000 439,382 427,000
Other Revenue:
Licenses and Permits 71,067 85,183 38,900 64,900 53,900
Ambulance Fees 92,260 133,243 95,000 135,000 135,000
Interest 955,791 507,436 400,000 350,000 300,000
Other 525,842 568,793 477,900 1,066,692 611,900
Total Other Revenue 1,644,960 1,294,655 1,005,800 1,616,592 1,100,800
Total Revenue 7,218,444 7,246,669 6,979,100 7,471,549 6,587,800
Transfers From Other Funds
Charges to other funds 921,100 960,500 933,800 933,800 966,200
Enterprise 128,334 112,495 49,523 49,523 49,523
Trust Fund 34,711 14,294 18,000 18,000 25,000
Total Transfers 1,084,145 1,087,289 1,001,323 7,001,323 1,040,723
TOTAL REVENUES AND TRANSFERS 8,302,589 8,333,958 7,980,423 8,472,872 7,628,523
Original
Actual Actual Budget Projection Budget
EXPENDITURESIAPPROPRIATIONS FY 2001 FY 2002 FY 2003 FY 2003 FY 2004
General Government 1,316,894 1,616,535 1,565,128 9,866,131 1,667,730
Public Satety 3,240,920 3,377,233 3,512,557 3,625,598 3,616,352
Public Works 1,593,207 1,677,363 1,828,211 1,974,778 2,030,931
Parks, Rec. & Cultural 1,095,061 1,277,375 7,295,465 1,360,462 1,346,338
Total Operating Expenditures 7,246,082 7,948,506 8,201,361 8,826,969 8,661,351
Operating (Deficit)/Surplus before transfers 1,056,507 385,452 (220,938) (354,097) (1,032,828}
Transfers to Capital Projects 1,576,881 222,189 61,100 76,100 61,100
Otfier Transfers or Non Operating 300,367 657,053 221,020 221,020 186,963
Total Transfers and Non Operating 1,877,248 879,242 282,120 297,720 248,063
Undefined Cuts/revenue increases (521,000)
Total ExpenditurelAppropriation 9,123,330 8,827,748 8,483,481 9,124,089 8,388,414
Total DeficiUSurplus (820,741) (493,790) (503,058) (651,217) (759,891)
Projected lapse (3%) - - 332,158 264,809 259,841
Adjusted (Deficit)/Surplus (820,741) (493,790) (170,900) (386,408) (500,050)
Residual Equity Transfers - 104,848 - - -
Beginning Fund Balance 8,926,890 8,106,749 6,738,962 7,717,207 7,330,799
Ending Fund Balance 8,106,149 7,717,207 6,568,062 7,330,799 6,830,749
Encumbrances (560,269) (318,701) (200,000) (300,000) (300,000)
Reserves and Designations (2.379,329) (2,264,480) (2,100,000) (2,319,112) (3,338,629)
Unres. Undesignated Fund Balance $ 5,166,551 $ 5,134,026 $ 4,268,062 $ 4,711,687 $ 3,192.120
KENAI CITY C®UNCIL
DRAFT FY 2003-2004 BUDGET POLICY STATEMENT
The FY 2003-2004 budget will be developed in accordance with the following
policies:
Establish the Unreserved Undesignated General Fund Balance at no less
than 54,750,000.
2. Project a mill rate increase from 3.5 to 4.5.
3. Project no change to the sales tax rate.
4. No new programs or additional staffing beyond what was authorized in
FY03, unless the staffing wi^ be offset by savings or have a neutral budget
impacf, e.g., VISTA.
5. After consideration of lapsed appropriations, the budget will be balanced,
i.e., the Adjusted (Deficit)/Surplus will be zero or show a surplus.
6. The budget should include some level of employee contribution towards the
payment of health insurance premiums.
7. The budget should include a COLA for employees.
KENAI CITY COUNCIL
REVISED PY 2003-2004 BUDGET POLICY STATEMENT
The FY 2003-2Q04 budget will be developed in accordance with the following
policies:
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tlhaa~4,~5A~98A-Maximum deficit spending level is set at $500,000.
2. A mill rate increase from 3.5 to 5.
3. No change to the sales tax rate.
4. No new programs or additional staffing beyond what was authorized in
BY03, unless the staffing will be offset by savings or have a neutral budget
impact, e.g., VISTA.
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6. Some level of employee contribution towards the payment of health
insurance premiums.
Febma~y 2l, 2003