Introduction of the City Manager’s Proposed Fiscal Year 2012 Budget

January 3, 2011

Sanford Miller, City Manager

Robert Rusten, Assistant City Manager

General Fund Budget: FY2012 Expenditures In FY2012 General fund spending is proposed to

be $17,595,573. In FY2012 it is projected that $10,658,308 will

need to be raised by property taxes (tax levy). This is an increase of $870,913 from FY2011.

We are assuming approximately ½ percent growth in the Grand List.

This yields an estimated tax rate of $0.3918, and increase of $0.0277 (2.77 cents), from the FY2011 municipal tax rate of $0.3641or a 7.62% increase.

General Fund: FY2012 Tax Impact

The average family home in South Burlington is Valued at $270,000.

The average family will pay an additional $74.79 annually in municipal taxes.

FY2012: $270,000 /100 = $2,700

$2,700 X .3918 = $1,057.86 FY2011: $270,000 /100 = $2,700

$2,700 X .3641 = $983.07

FY2012 – Summary All Funds, Expense and Revenue

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A B C D E F G H I J K

FY 2012 - Summary, All Funds Expenses and RevenuesGENERAL FUND

FY10 Budget

FY 10 Actual non-audited FY 11 Budget FY 11 Estimate FY 2012 Proposed

FY 11-12

$ Change

FY 11-12

% Change

General Fund Expenditures 14,636,084 14,881,177 15,662,939 - 17,592,573 1,929,634 12.32%General Fund Non-Property Tax Revenues 4,990,007 4,898,992 5,875,544 6,784,265 908,721 15.47%Mgt/Staff Challenge - reduce costs /increase $ 150,000

net to be raised by property tax 9,646,077 9,982,185 9,787,395 - 10,658,308 870,913 8.90%estimated tax rate 0.3641 0.3918 0.0277 7.62%

SPECIAL FUNDS

FY10 Budget

FY 10 Actual non-audited FY 11 Budget FY 11 Estimate FY 2012 Proposed

FY 11-12

$ Change

FY 11-12

% Change

Budget Expenditures 2,140,017 959,878

Revenues 2,387,691 1,078,587net 247,674 118,709

ENTERPRISE FUNDS

FY10 Budget

FY 10 Actual non-audited FY 11 Budget FY 11 Estimate FY 2012 Proposed

FY 11-12

$ Change

FY 11-12

% Change

Water Pollution Control Expenditures 2,758,036 2,579,821 2,852,736 2,677,445 -175,291 -6.14%

Revenues 2,758,036 2,434,247 2,852,736 3,885,000 1,032,264 36.19%net 0 -145,574 0 0 1,207,555 1,207,555 #DIV/0!

Water Expenditures 1,842,980 1,981,020 2,027,652 2,304,935 277,283 13.68%

Revenues 1,842,980 1,931,613 1,951,702 2,323,935 372,233 19.07%net 0 -49,407 -75,950 0 19,000 94,950 -125.02%

Stormwater Expenditures 1,346,428 1,309,996 1,614,770 1,741,143 126,373 7.83%

Revenues 1,346,428 1,294,582 1,607,770 1,836,000 228,230 14.20%net 0 -15,414 -7,000 0 94,857 101,857 -1455.10%

TOTAL OF ALL FUNDSTotal EXPENSES 20,583,528 22,892,031 22,158,097 - 25,275,974 3,117,877 14.07%Total Non Property Tax Revenue 10,937,451 12,947,125 12,287,752 - 15,907,787 3,620,035 29.46%

Net 9,368,187

all surpluses 1,440,121net 10,808,308challenge -150,000Money to be raised via property tax 10,658,308

Critical Budget Line Items: General Fund

Line Item Net Change

Stormwater $130,000 (+)

Pension $261,000 (+)

Local Option Taxes $306,000 (-)

Interest Income $135,000 (-)

Surplus $201,000 (-)

Total $1,033,000

Internal Controls andFinancial Management

Purchase order system; Institute standard operating procedures to prevent over

spending of line items; Weekly account reviews conducted by the Finance

Department; Segregation of funds; Enhance financial management software; Provide departments with monthly budget reports; Develop a schedule of assets; FY2013 Capital Improvement Program.

Pension Contribution Pension calculations in the FY2012 budget are based on actual/ projected

salaries and the percentage of payroll contributions pursuant to the actuaries report of Oct. 29, 2010.

The City contributes 22.4% for non-pubic safety employees and 25.1% for public safety employees.

In most of the past ten (10) years, the City’s contribution toward the South Burlington Retirement Income Plan (SBRIP), did not meet actuarially recommended dollar amounts.

Base on staff census for the FY2012 budget, the total contribution for all departments and funds to the SBRIP is $1,660,000.

Several employees have been offered and switched retirement benefits to the Vermont Municipal Employees Retirement System (Plan B). The City will contribute considerably less to this Plan, 9.5% of salary.

Some costs, such as portions or all of the Actuary and Investment Management fees have been paid from pension assets in the past. This has an impact of “financing” these operational expenses over thirty (30) years at 7.5%. This practice will be discontinued.

Staffing

In FY2011 there were 128 full-time employees, 16 part-time employees, 12 on-call firefighters, and 40+ seasonal recreation staff members.

In FY2012 across all funds there will be at least eight (8) fewer full-time-equivalent (FTEs). Reduction figures are the result of abolishing positions, leaving some positions vacant, and layoffs.

In addition, some departments have been reorganized. Notably, what we consider a realistic number of staff positions are shown in the Ambulance budget, which makes it appear larger in FY2012

General Fund Payments and Services to the School District Community Use - $26,938 School Use - $16,981 + $1,000 for wage

reimbursements School Bus Drivers - $1,000 School Grounds Maintenance - $32,609 Four (4) School Resource Officers - $250,000 Maintenance of Buses at DPW Library Use Space - $71,869

Program & Service Reductions

Highway paving; Highway snow removal; Library Hours (3 hours per week); Reduction in School Resource Officers; Reduction in Planning & Zoning response time

due to reduction in administrative staff; Others to come.

User Fees & Charges

Ambulance transport fees; Ambulance billing services; Library charges; Planning fees are under advisement; Parking tickets.

Cost Savings Measures Enacted

Health insurance; Retirement Income Plan conversion; Other benefit reductions for management and non-

represented staff; $150,000 reduction- Management / Staff

Challenge.

Special “200 - 600” Funds

The FY2012 budget contains a listing of dozens of “special funds,” which were previously off-budget or in other words unrecorded.

A number of theses funds have been eliminated or incorporated into the General Fund Budget. It’s expected that more “200” funds will be eliminated in the future.

FY2012 expenditures are estimated at $933,378 and revenues are at $1,078,587

Water Fund Budget: FY2012

The Water Fund budget for FY2012 is proposed at $2,323,935.

Water User Fees are projected to increase by about16.64%.

Due to recent deficits, increases in wholesale water costs, and other operating cost increases.

Stormwater Fund Budget: FY2012

The Stormwater Fund Budget has been operating at a deficit since FY2010.

Reserve funds have been depleted. Rates have not been increased since the inception

of this Fund in 2008. In order to establish required reserve funds for on

going projects; Fund revenues need to increase by 31.92%.

Water Pollution Control (WPC) Fund Budget : FY2012

The WPC Fund Budget is proposed at $3,885,000. WPC User Fees are projected to increase 46.67%. $1,207,555 of the $3,885,000 total fund budget

will be used to help pay for Airport Parkway construction costs and debt service payments.

Increases are attributed to: operating deficits, a flawed funding plan for Airport Parkway expansion, and artificially low rates.

Capital Budget & Debt

FY2012 - Acquisition FY2012 -Debt Service

Ambulance - $170,000 Existing Debt - $1,576,004

(General & Enterprise Funds)

3 Public Works

Vehicles - $335,000

Quint Fire Truck – $750,000

5-Year Note = $163,000 P/Y

Total Purchase: $505,000 Total Debt : $1,739,004

Options for City Council Consideration: Financing the pension obligation; Further reduction in staff and service; Conservation funding; Rescind or restate SAFER grant;

Goals and Objectives

Budgeting, auditing and implementation of changes to financial management system;

Prior year inter-fund transfers; Technology; TIF; City Center Project; Workplace Safety Committee; Employee Benefits; Relocation/ restructuring of office operations.