City of Winooski

City Manager’s Fiscal Issues PresentationSeptember 8, 2008

-$ 1,102,835 17% of our Annual Budget

We are here:

What

- ($ 443,813) (Actual General Fund Cash Position at End of FY2008)

– Trial Balances from NEMRC– Checkbooks Reconciled and NEMRC adjusted.– Quick and Dirty:

FY2007 Shortage + FY2008 Shortage $ 259,151 + $ 185,230 = $ 444,380

Transfers In

Enterprise Indirects Budgeted but not booked. $53,000.00Property Taxes Downtown Reimbursement for FY2007

Descrease in TIF Base Value $34,278.59Enterprise Indirects Budgeted but not booked. $310,500.00VMERS Credit It appears that we've overpaid VMERS. $12,337.73

$410,116.32

Transfers Out

Property Taxes General Fund collected property taxes on the increment and now owes the Downtown ($666,814.94)

Misc Account Deficit Difference between FY2009 $207 closing of misc. accounts and reconciliated amount.

($57,660.66)Legal Obligations Ongoing legal matter. Could win appeal but

still needs to be booked. ($92,662.88)Capital Funds FY2009 Budget consisted of a transfer from

the Capital Reserves but did not account for replenishing the reserves. ($252,000.00)

($1,069,138.48)

Cash Position

Cash Position + Transfers In – Transfers Out

$ 443,813

+ $ 410,116

- $1,069,138

= $1,102,835

How

Lack of financial controls and policies. No regular oversight into departmental

budgets. A new computer system. Poor budgeting and budget monitoring

methods. Lack of Department Head Budget Support

and Training.

How

Grant expenditures were not budgeted in the general fund yet expended from it.

Property tax collections are impossible to monitor.

Department Heads were allowed to overspend line items.

FACT:

In Both FY2007 and FY2008, out of the 375 General Fund Line Items, 122 items were overspent.

33% of our line items were overspent.

Not because of:

Changing the seal from the Onion to the Leek.

Lawyers, mediators, facilitators, hearings and Investigations.

The Downtown TIF Lack of oversight by previous Mayors,

Councilors, Managers and Clerks. Hands in the cookie jar.

Moving Forward

Moving Forward:

Adopt and adhere to financial policies. Close Miscellaneous Accounts. Borrow from other Funds. Ask the Voters.

Fiscal Policies

Capital Investment Policy Reserve Fund Policy Internal Controls

Capital Investment Policy

It shall be the policy of the City of Winooski to try to maintain the general fund’s annual debt service payment at 5% of the operating budget.

A debt service level below this amount is considered to be not properly investing in our infrastructure and capital needs.

A debt service number above this limit is spending more than the City should be.

Reserve Fund Policy

It shall be the policy of the City of Winooski to try to maintain the general fund’s reserve fund balance at an amount equal to 10 % of its annual operating budget.

For example, a budget of $6,000,000 should have a reserve fund balance of $600,000.

The same ratio shall apply to the enterprise funds. Only the Council may vote to expend funds from the

reserve fund for unforeseen and unexpected expenses.

Internal Controls

General Journal Entries: The City Manager signs off on any and all Journal Entries (corrections). Weekly Payroll: The City Manager reviews and signs off on the payroll coversheet. Employee reimbursements: No employee is to be reimbursed for any non Section 125 expense without City

Manager approval. Line Item Spending: No line item can be overspent. Line Item Transfers: The City Manager must sign off on departmental line item transfers. Pass through and grant revenue: All revenue, regardless as to source, is to be entered as a general fund

revenue. Department Heads code their own invoices so that expenditures are taken out of proper line item. An accounts

payable cover sheet is being implemented so that they can double check their work. Department heads are being given monthly budget status reports to monitor their own department’s

expenditures. Credit card use is being controlled by the Clerk’s office. The past practice of paying employees in advance for vacation time has been ended. Annual pay is paid in increments of 1/52.2 rather than 1/52. Regardless of the day of the week the fiscal year ends/starts, different rates of pay are to be calculated. Quicken is no longer used to track any accounts. All funds in NEMRC are set up under the fund accounting mode, and not the account balance system. Bank statements are to be reconciled monthly. Any discrepancies are to be logged immediately. On multiple occasions, numbered receipt books have been requested to be ordered. Again, this process is

being reinitiated. Regular transfers from one account into another (such as enterprise to General Fund) must occur monthly. Property taxes are to be projected in one department and in one line item.

Balance After Adopting Policies:

= $1,102,835

Closing out of Misc. Accounts

Description AmountStone House Endowment $224,401.63

Parks and Rec Grant Funds $179,465.45

Teen Center Grant Funds $16,795.56$420,662.64

Balance After Closing Misc. Accounts:

= $682,173

Other Accounts: FYI

Other Open Accounts: FYIAppraisal Account 19,532.17$

Police Grant Accounts 27,780.94$ Downtown 1,100,972.20$

Community Development 198,896.75$ Op Bloom 537.84$

Winooski Days 577.06$ Balance of: 1,348,296.96$

Borrow From Other Funds

Annual BudgetAvailable Funds:

Water Enterprise Fund 688,552.39$ 67,604.37$

Wastewater/Stormwater 794,559.27$ 637,309.10$

Parking Garage 689,364.00$ 86,659.57$

Borrow From Other Funds

Amount BORROWED:

Reserves Remaining

Water Enterprise Fund $0.00 $67,604.37

Wastewater/Stormwater $511,629.46 $125,679.64

Parking Garage $17,723.17 $68,936.40

529,352.63$

Other Funds: Deficit After Borrowing

= $153,820

Ask the Voters

The City Needs Voter Approval to Bond FY2009 Recommended Capital Projects.

This passed at the March Town Meeting as part of the budget, but a separate vote is required to go out to bond.

Ask the Voters

Raise Property Taxes by $152,820 for the remaining two quarterly bills.– Effectively, a 3.5 cent increase in the municipal

tax rate, or a 82 cent tax rate for the City. If there are 1,474 residential properties in Winooski with

a total of $324,417,000 in R1 Grand list values, then the average home is valued at $220,092.

The average increase would be $73.29 for an average home owner. Split over two tax bills, this would be approximately $37.20 per bill if billed quarterly.

Street Number FY2009 Assessed ValueProposed Annual

Increase$0.034

Hood Street 36 $268,700 $90.82Lafountain Street 48 $234,400 $79.23Brisson Court 10 $208,000 $70.30Cedar Street 11 $202,600 $68.48North Street 270 $190,600 $64.42West Street 20 $190,300 $64.32Franklin Street 6 $171,400 $57.93Mallets Bay Ave 177 $226,800 $76.66LaPointe Street 60 $252,000 $85.18Hickok Street 75 $219,000 $74.02

$216,380 $73Averages:

How does this affect the average taxpayer?

What are we asking the voters?

Do you authorize the City of Winooski to bond in the amount of $1,065,779.00 for the purpose of funding the following Capital Projects from the City's Capital Improvement Plan: Fire: Replace 1972 Maxim Pumper $400,000.00, STREETS: Proposed 2009 Dump Truck W/Plow $130,000.00, STREETS: STREET MAINTENANCE PROGRAM $125,000.00, Management Information Services: Vital Records Scanner $80,000.00, Recreation: Basketball Courts $80,000.00, Parks and Recreation: Replacement of Passenger Van $49,779.00, Fire: Back-up Generator $40,000.00, Engineering: Engineering Contracts Consultants $30,000.00, PG&F: Replacement for 1999 Pickup $30,000.00, Police Department: New Vehicle Replacement Program $25,000.00, Public Buildings: Roof Repairs at City Hall $20,000.00, STREETS: Tractor/snow blower/sweep (sidewalks) $18,000.00, Recreation: Relocation of Landry Monument and Flagpole with new Lighting $10,000.00, PG&F: Richards Park - New 40' Flag Pole & Lighting $10,000.00, Senior Center: Air Conditioning $10,000.00, Senior Center: Furnace Replacement $8,000.00 by increasing the FY2009 Property Tax Levy in the amount of

$152,819.98 to be billed as amended tax bills in Q3 and Q4.

Are the enterprises going to be paid back?

In the next three fiscal years after this one, equal payments of $176,450 back to the enterprises from the general fund will be made.

Excess revenues in the utilities will eventually be used to fund capital projects or lower those rates.

And after they are paid back?

The increase in tax revenue should be used to start funding the City’s reserve policy.

10% of the General Fund Budget is over $600,000 that we need to have in reserves.

Why aren’t there any budget cuts being made?

The Budget is already lean in relation to our existing contractual obligations.

The FY2010 Budget is going to be a tough year.– Almost $500,000 is comprised of non-recurring revenue

sources. – Without those sources next year, there will have to be

budget cuts and the City will have to take a serious look at what programs and services we offer.

We also have the added expense of paying back the enterprise funds.

Inoculation

But our taxes are the highest in the County. Why? Why should we vote to pay more in taxes if the City

can’t manage its money, get clean audits and control its spending?

Who is watching our books? That was a pretty big list of Capital Items. How can

we vote for this without knowing what else we need in future years?

What about long term planning?

November 11, 2008 – Timing Is Important

Timing is Important! General Election is November 11, 2008 Ballot Questions must be in by September 27, 2008. We have this, and the meeting on September 22,

2008. The deadline for the district news is October 16,

2008. That’s our best opportunity to educate the voters.

Let’s get on the air on Channel 17.

In conclusion:

Next Steps– Pass a proposal at the next Council meeting.– Have a public hearing– Educate the voters and get out the vote.

Next Steps: More Policy and Fiscal Planning

– Collective Bargaining Negotiation Policy– Health Insurance Contribution Rates– FY2008 Audit– FY2010 Budget Planning– OVERSIGHT

November 11, 2008

The City needs your support. Please call the City Manager at 655-6410

with any questions or send him an e-mail at jhandverger@onioncity.com

Call the Mayor or any Councilor with questions.