Fort Walton Beach Council agenda — 05-17-11 special — reading text

itlaitla Denara Denara nPO6eenPO6ee eiei FlreFlre ° ° ss oror 1515 PacketPacket Pg.Pg. 1010  3. 1. 8 FY 2011 -12 Budget Policy Meeting for the next couple of years. Alternatively, lump sum incentive payments based on evaluation scores do not cumulatively increase pay or increase the City' s pension liability. Benefits – Benefits include Social Security tax, Medicare tax, worker' s compensation insurance, unemployment compensation insurance, medical insurance ( health, dental, & life), and pension benefits. Affordable health insurance providing quality coverage is an important pan of the City' s benefits package. The City' s total medical benefits expense is nearly the same as five years ago, in large part due to reducing the City contribution to 50% of the family premium for new hires after October I, 2008. Pei , coy 30 The City is required to maintain its three pension ell plans in a fiscally sound manner. Investment sap earnings and employee/ employer contributions comprise the plans' income. General employees and police officers contribute 5% of wages and fire " o, _ personnel contribute 6. 6% of wages into their S0 — — respective plans. The City' s actuaries estimate investment earnings at 8% annually for each plan and estimate annual salary increases as follows: . so -o zoosm zoozoe zooeos zoos -10 2D10e 11 a' 0vee . F' l al General 5. 4 %, Police 7. 5 %, and Fire 6. 5 %. The ° " " City' s contribution is based on these estimates and must be adjusted in future years to make up for any deviation from these estimates. Factors such as lower than anticipated investment earnings, higher than estimated salary increases, and more participants due to early -out toN retirement programs have contributed to the City' s contribution increase. Operations & Maintenance – This category of expenses includes materials and supplies, repair and maintenance, utilities and fuel, insurance, and other charges. These expenses are largely driven by program and service delivery levels as well as fixed costs over which the City has little control, such as utilities, fuel, property & casualty insurance, concrete, and steel. For instance, the cost of fuel, which impacts nearly all facets of 2006 07 200700 2008W 2009 10 201011 euagei operations, is currently 31% higher than a year urames • Nei emsumnre ago for gasoline and 44% higher for diesel. Capital Outlay – Includes the purchase of computers, vehicles, equipment, and other assets with a value greater than $ 500 and a useful life of more than one year. A five -year replacement schedule has been developed for vehicles and heavy equipment based on a numerical scoring derived from objective criteria for age, mileage, repair /maintenance expense, and overall condition. Aae of Fleet Capital Improvements – The acquisition, construction, replacement, renovation, or repair of facilities and infrastructure with a value greater than $ 25, 000 and a useful life of ten years or more e. g. buildings and facilities, parks, streets and sidewalks, as well as water and sewer lines, tanks, and pumps) are identified in the City' s five -year Capital Improvements Program. a. ra F' 1e Nollt, FIla 9 Ft d M- 1., F, 1e 6 of 15 F Packet Pg. 11  F31. FY 2011 - 12 Budget Policy Meeting FIVE -YEAR FINANCIAL FORECASTS Long -term financial planning is the process of aligning financial capacity with service objectives so policies may be developed to achieve long -terror sustainability. Highlighting the long -term impact of current decisions is crucial to fiscal sustainability. Staff' s goal is to enable City Council to make policy decisions today in the context of current and future resources and service levels. Budgeting for results begins by identifying available revenues, contemplates desired results and strategies, and concludes by determining which programs and activities can best achieve the desired results. By linking resources to objectives at the beginning of the budgetary process, the primary focus is on outcomes - City Council' s desired service levels - rather than organizational structure or departmental funding levels. GENERALFUND Preliminary calculations indicate FY 2011 - 12 General Fund revenues of $ 17.2M, a $ 49K shortfall compared to the FY 2010 -11 budget. Decreases in ad valorem revenues and interfund transfers are largely offset by increases in utility taxes and franchise fees. Expenses are anticipated to be $ 377K higher, in large part due to a $ 509K increase in pension contributions offsetting salary savings from mid -year position eliminations due to attrition. Despite no wage increases over the next five years, the General Fund is anticipated to incur a deficit in FY 2012 and 2013. Staff has been evaluating operations for efficiencies and believes these deficits can be closed without service reductions. City Council policy direction regarding millage, reserves, employee compensation, and recreation consolidation will ensure operations are sustainable in future years. GENERAL FUND No Employee Adjustment 2011- 12 2012 -13 21114 201415 201516 Annual Ad Velorem Revenue? 144, 203) 83747 85, 422 130. 695 Total Revenues 17584. 130 17857731 16, 236, 279 18603, 183 18, 990, 153 Tool ExpenOtlures 18010, 462 18131, 936 18217347 18, 173,296 18295537 Shemeli) I Surplus 426, 332) 374, 205) 111, 932 429,885 694, 616 Brook Even Mlllaelner l Deer) 04621 04058 00201) 04478) 07025 UTILITIESUTILITIES FUNDFUND PreliminaryPreliminary calculations calculations indicateindicate FYFY 20112011 - - 1212 UtilitiesUtilities FundFund revenuesrevenues ofof$ $ 7.7. 9M,9M, aa$$ 200K200K increaseincrease comparedcompared toto thethe FYFY 20102010 - - 1111 budget.budget. ExpensesExpenses areare anticipatedanticipated toto bebe$ $ 173K173K higherhigher duedue toto aa franchise/franchise/ rightright - - ofof- -wayway accessaccess feefee toto thethe GeneralGeneral Fund.Fund. UTILITIES FUND No Employee Adjustment 2011 -12 3012- 13 201.3 - 14 21415 201516 Total Revenues 7913552 8167, 593 8482446 8831314 9, 133409 Total Expenses 7795369 7837, 106 7, 999468 8063480 8, 150369 Revenue ( Shortfall l Surplus 11B, 183 330, 487 482978 767834 983. 040 SANITATION SANITATION FUNDFUND PreliminaryPreliminary calculationscalculations indicateindicate FYFY 20112011 - - 1212 Sanitation Sanitation FundFund revenuesrevenues ofof$ $ 33M,33M, aa$$ 30K30K increaseincrease duedue toto aa declinedecline inin residentialresidential customers.customers. Expenses Expenses areare estimatedestimated atat$ $ 3.3. 2M,2M, aa decreasedecrease ofof$ $ 222K222K duedue toto thethe excessexcess revenuesrevenues beingbeing retainedretained byby thethe fundfund ratherrather thanthan transferredtransferred toto thethe GeneralGeneral Fund.Fund. 77 ofof 1515 PacketPacket Pg.Pg. 1212  3. 1. a FY 2011. 12 Budget Policy Meeting SANITATION FUND No Employee Adjustment