City of Washington Proposed FY 200405 Budget 1

1
FY 04-05 ProposedCity of Washington Budget

• As Presented to
• Washington City Council
• April 19, 2004

2
Highlights Total Budget
3
Highlights Total Budget

• Total is 48,902,671 with Special Revenue funds
• assumes Capital/Grant project funds close at
  years end
• Aquatic Center Fund, Civic Center Fund now under
  Parks Recreation in General Fund
• no longer separate enterprise funds

4
General Fund Highlights

• Increases some fees
• Draws down fund balance to balance
• Retains 55 cents property tax rate
• Allows limited spending for capital outlay
• Cuts original department requests by more than
  3.4 million
• Funds only 1 (of 20 requested) new position

5
General Fund Fees

• Increases monthly residential garbage collection
  fees
• New fee 7 (up 2)
• Increases revenues by 110,000
• Covers only 57.7 of Sanitation Divisions costs

6
A Look At The Numbers
7
General Fund Fees

• Increases non-resident recreation athletic
  activity fees
• New fee 60 (up 20)
• Increases revenues by 21,000
• Covers only 20.9 of athletic programs costs
  (287,823)
• 55 (1000) of program participants are
  non-residents
• Beaufort County provides only 15,732 for City
  recreation
• 31.89 of the cost of non-resident recreation
  activities would continue to be subsidized by the
  City

8
General Funds Fund Balance

• Proposed budget uses 900,694 of GF Fund Balance
• Current GF Fund Balance
• 3,084,157 (not including Powell Bill revenues)
• 24 of General Fund appropriations
• NC Local Government Commission (LGC) recommends
  8 minimum fund balance (including Powell Bill
  revenues)

9
General Funds Fund Balance

• 2004-05 proposed Fund Balance 2,183,463
• Level would be 17 of the General Fund
  appropriations
• Past City practice 25 to 30 unrestricted fund
  balance
• Matched average of same size municipalities in NC
• Non-public power cities need higher fund balance
  for cash flow in first 6 months
• Public power cities can maintain cash flow with
  budgeted transfers and administration charges

10
A Look At The Numbers
11
A Look At The Numbers
12
General Funds Fund Balance

• Operational cost shortfall needs to be addressed
• Cannot continue draw downs indefinitely

13
General Fund Capital Outlay

• 266,916 for items needed to fulfill work
  responsibilities and provide services
• computer upgrades (software and hardware)
• 2 police patrol cars
• repair facilities (HVAC, lighting and carpet)
• operational equipment (i.e., lawnmower, postage
  machine, garage tire balancer, pool vacuum and
  lights, fitness treadmill, parks recreation
  pickup truck, garbage carts, portable radios)

14
General Fund Capital Outlay

• Unfunded capital outlay requests include
• additional police cars
• various trucks/maintenance equipment
• computers
• radios and communications equipment

15
General Fund Capital Outlay

• Funds minimal needs of Citys E-911 Central
  Communications Center
• further upgrades on hold while management staff
  addresses redundancy with the Countys E-911
  Center
• Construction of second fire station on west side
  of town on hold
• Current GF revenues will not support
• hiring 6 additional personnel to staff station
• paying for construction debt service

16
General Fund Capital Outlay

• Remaining funds special community projects
• 10,000 - Veterans Memorial Park
• 25,000 - Beebe Memorial Park
• 10,000 - proposed skate board park

17
Property Tax Rate

• At current tax base and revenue growth, 0.55 tax
  rate will not continue to cover future City
  services or operational costs

18
A Look At The Numbers
19
Property Tax Rate

• 0.02 of 0.55 tax rate set aside
• public safety capital needs (specifically Fire
  Department) needs
• directive from previous Council
• FY 04-05 Public Safety Capital Reserve Fund -
  116,866
• undesignated until decisions made about
  additional fire station and personnel
• FY 03-04 includes 205,000 to buy land for new
  fire station
• Public Safety Capital Reserve Fund will have
  321,866, undesignated if land acquisition not
  completed by end of FY 03-04

20
General Fund ProjectsUtility Billing

• Convert to envelope billing system to provide
• customer account privacy as recommended by state
  law
• space on bill form to list any additional billing
  services
• ability to communicate with customers with bill
  inserts
• return payment envelopes
• Additional annual postage cost - 13,000
• Much of this cost absorbed by 3 utilities
  (administration charges paid to General Fund)

21
General Fund Support Economic Development

• Downtown Washington
• on the Waterfront (DWOW)
• 55,000 recommended (71,895 requested)
• Not expected to be recurring cost at this level
• Future funding levels to be determined

22
General Fund SupportEconomic Development

• Beaufort County Economic Development Commission
  (EDC)
• City FY 04-05 budget proposes
• 84,490 for operations (same as FY 03-04)
• 15,636 for Skills Center
• 82,932 for industrial park land debt service
  (same as FY 03-04)
• 55,000 in agreed upon incentive grant to
  PrettlNoma
• EDC requested 123,616 for FY 04-05 operations
• 39,126 increase includes 15,636 for Citys
  share of Skills Center

23
Water Sewer Funds

• LGC letters Water and Sewer funds operating at
  losses
• City instructed to review fees and expenditures
• to determine if fees should be increased or
  expenditures reduced in order to cover the full
  costs of providing these services
• Significant rate increases proposed for water and
  wastewater services
• To keep rate increases as low as possible,
  operational funds still at uncomfortable levels

24
Water Fund

• 13 increase proposed for water rates
• Average residential customer will pay 2.84 more
  a month (750 cubic feet)
• Revenues will rise only 5 over FY 03-04
• FY 03-04 budget has non-recurring revenues
• FY 03-04 transferred 195,104 from other funds
• FY 03-04 has 40,000 Rural Center grant

25
A Look At The Numbers
26
Water Fund

• FY 04-05 expenditures up 5
• New position in Water Distribution Maintenance
  Division
• state-mandated cross-connections/backflow
  prevention program
• Other than 5 increase adopted for FY 03-04,
  water rates have not increased since FY 97-98
• Operational costs and debt service payments over
  this 5-year period could not be covered by FY
  03-04s 5 increase
• No capital outlay requested except for
  replacement water meters (8,000), tamping
  machine (2,000)

27
Sewer Fund

• 18 increase proposed for wastewater rates
• Average residential customers will pay 4.85 more
  a month (750 cubic feet)
• 5 of increase to pay future debt service on
  oxidation ditch project
• At Citys request, LGC approved sewer rate
  increase of 5 annually for the next 3 years to
  pay debt service on money borrowed from the State
  Revolving Loan Fund

28
A Look At The Numbers
29
Sewer Fund

• Revenues still will be down 26.9 from FY 03-04
• FY 03-04 has non-recurring revenues (1,140,780)
• transfers from other City funds
• grants
• special assessments
• appropriated restricted fund balance (encumbered
  contractual obligations from FY 02-03)
• 657,000 of FY 03-04 revenues were non-grant
  funding used for recurring operational costs
• FY 03-04 sewer sales revenue projections were too
  high

30
Sewer Fund Capital Outlay

• Capital outlay at bare minimum level
• State-mandated gas generator (21,000)
• State requires secondary power source at all lift
  stations
• 16 generators now in place (29 lift stations
  total)
• have been buying 2/year only 1 generator
  requested for FY 04-05
• Debt service payment (10,220)
• Sewer Funds half of debt service for upgrade to
  System Control and Data Acquisition (SCADA)
  system at the Citys Operations Center
• Electric Fund budgeting for other half of payment
• First of 5 annual payments for 90,000 project

31
Water Sewer Impact Fees

• New Impact Fee proposed
• Seek to implement in May 2004
• Common in North Carolina
• New customers pay to offset loss of treatment
  capacity in water and wastewater plants
• Projected revenue of 26,000 (water) and 23,600
  (sewer) can be applied debt service (existing and
  future)
• frees up some rate revenues for operations

32
Stormwater Utility Management Fund

• Proposed budget of 388,244 supported by current
  rates
• No capital outlay recommended
• Additional position requested to implement and
  enforce new state-mandated storm water management
  nutrient control program

33
A Look At The Numbers
34
Electric Fund

• Proposed budget is 29,054,027
• 20,040,000 for City-purchased power
• 19,900,00 purchased from the NC Eastern
  Municipal Power Agency (NCEMPA)
• 140,000 purchased from the federal Southeast
  Power Administration (SEPA)

35
A Look At The Numbers
36
Electric Fund - Rates

• No rate increase proposed
• Rates primarily dictated by Power Agency
  wholesale rates
• Power Agency could review rates at any time

37
Electric Fund Capital Outlay

• Cash outlay of 195,050
• Vehicles pickup truck, minivan
• Equipment computers, radios, load management
  switches, capacitor switches, substation control
  batteries, reclosers, single-phase three-phase
  meters, thumper, cell phone equipment

38
Electric Fund Capital Outlay

• Budget includes initial debt service on 5-year
  note for 1,941,351
• FY 04-05 payment of 214,131 for last 6 months of
  the fiscal year
• Future annual payments will be 424,262
• Borrowed 1.94 million will
• purchase automatic remotely-read meters
• complete relocation of the Wanoca substation (1
  million)
• replace a bucket truck, a line truck and a
  front-end tractor
• construct first phase of the Bath electric
  circuit rebuild (160,000)
• pay Electric Funds half of the SCADA system
  upgrade

39
Electric Fund System Maintenance

• Proposed Electric Fund budget includes
• 322,400 for tree trimming contract
• 328,700 for materials for overhead and
  underground construction (includes transformers)
• 70,000 for substation maintenance

40
A Look At The Numbers
41
Human Resources Positions

• 22 new positions requested City-wide
  organization, including 6 firefighters
• 3 new positions recommended
• 2 of the recommended new positions due to
  state-mandated programs
• 1 position in Water Fund to implement/operate
  cross connections and backflow prevention program
• 1 position in Storm Water Utility Management Fund
  to implement/operate nutrient control program

42
Human Resources Positions

• Third new position in General Fund
• Code Enforcement Officer in Community Development
  Planning Department
• City Council directive to step up code
  enforcement against public nuisances

43
Human Resources Benefits

• Major medical insurance premiums projected to
  increase 3.4
• had expected 20 increase
• Recommend upgrading vision and dental coverage
• current plans have minimal benefits
• proposed upgrades provide significant
  improvements at a reasonable cost
• Total proposed increase in health care benefits
  is 8.79

44
Human Resources - Compensation

• Pay Classification Study recommends recurring
  personnel costs that City cannot afford at levels
  presented at this time
• Management staff recognizes that any plan would
  have to be implemented over a 3- to 4-year span

45
Human Resources - Compensation

• Budget proposes 188,000 in personnel costs
  increases
• COLA (parallels Consumer Price Index of 1.6)
• Existing merit and job maturity raises
• Management staff proposes implementing first-year
  increment within the 188,000
• Strategy would not inhibit Councils budget
  deliberations

46
Questions and Discussion