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Finance Department Presentation to the City of Houston Budget and Fiscal Affairs Committee FY2012 Budget Overview and General Fund Five Year Forecast May.

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Presentation on theme: "Finance Department Presentation to the City of Houston Budget and Fiscal Affairs Committee FY2012 Budget Overview and General Fund Five Year Forecast May."— Presentation transcript:

1 Finance Department Presentation to the City of Houston Budget and Fiscal Affairs Committee FY2012 Budget Overview and General Fund Five Year Forecast May 31, 2011 Kelly Dowe, Director

2 2 Table of Contents Section Page Fiscal Year 2012 Budget Overview 3 General Fund Budget Revenues 5 General Fund Budget Expenditures 12 General Fund Five Year Plan 18 Five Year Plan Revenues 20 Five Year Plan Expenditures 21 Five Year Management Strategies 24

3 3 Fiscal Year Budget Overview Budget balanced without use of pension obligation bonds or fund balance for the first time since Fiscal Year Departmental budgets approximately 4% to 27% lower than FY2011 spending levels. Overall budget is approximately $100 million lower than FY2011 Current Budget. Preserves public safety as the top priority for the City. Includes $10 million transfer from Houston First Limited Government Corporation. Presentation includes adjustments to HPD and HFD budgets that were not available when the budget was printed.

4 Summary Of All Funds 4

5 5 General Fund Revenues

6 6 General Fund Revenues FY FY2012

7 7 Property Tax Revenue Assumptions: –Decline in property tax revenue of 1.0%, $8.2 million lower than FY2011. –No change in the current tax rate ($ per $100 valuation). –Collection rate of 96.9%. –Net of tax increment zone payments.

8 8 Trends in Property Tax Revenues FY FY2012

9 9 Sales Tax Revenue Assumptions: –Positive growth trend in FY2012 of 5.7%, $28.0 million higher than FY2011. –Continued positive year-over-year employment growth. –Oil at or above $70/barrel.

10 10 Trends in Sales Tax Revenues FY FY2012

11 11 Other Revenues and Sources of Funds Assumptions: –Sale of Land of $13.6 million Approximately the same amount as in FY2011 transactions $10.7 million in non-right-of-way properties –Transfers of $27.1 million: $17.1 million transfers from Combined Utility System for debt repayment $10.0 million from Houston First consolidation –Ongoing transfers of $14.2 million: $9.2 million from Parking Management, $2.2 million from Auto Dealers, $2.5 million from Building Inspection, and $340,000 from other funds –No drawdown in fund balance.

12 General Fund Expenditures 12

13 13 General Fund Expenditures FY FY2012 (Including Debt Service)

14 14 Expenditures Summary No pay increases. Savings in Health Benefits from implementation of new contract. Includes termination pay allowances of $5.4 million. Reflects decreases in HR and IT costs resulting from consolidations. Fleet costs budgeted conservatively with no change in FY2012 costs. Police: –Deferred pension contribution of $17 million. –No layoffs for classified and jail employees. Fire: –Deferred termination pay and other pays. –Pension rate of 23.9%. –No layoffs of classified personnel pending ratification of new collective bargaining agreement.

15 15 General Fund Full-Time Equivalents

16 16 General Fund Pension Contributions FY FY2012

17 17 General Fund Unassigned Ending Fund Balance FY FY2012

18 Finance Department General Fund Five Year Plan FY2012 – FY2016

19 19 Overview This 5-year plan is based on the FY2012 Proposed Budget. Expenditures include legal mandates, staffing for new facilities, and contractual escalators. Capital outlay/equipment acquisition are not included. Includes debt service for capital projects but no new drainage debt issuance.

20 20 Revenue Summary ($ Thousands)

21 Expenditure Summary ($ Thousands) 21

22 22 Expenditures Details Health benefits increases by approximately 5% each year. Police increases based on the HPOU agreement. Fire increases also based on the recent negotiation. Includes Rainy Day Fund reimbursement of $5 million per year beginning in FY2013. Pension increases: –HMEPS: 2% per year FY –HPOPS: $10 million per year FY –HFFRF: Assumes contribution rate increases to 36.3% in FY2014.

23 23 Revenue & Expenditure Summary ($ Thousands)

24 24 Five Year Management Strategies Continued efforts to improve collection of current and past due balances owed to the City. Full implementation of Kronos, Fleet consolidation and IT consolidation. On-going negotiation of Fire cost savings as agreed upon in collective bargaining agreement. Pension reform for new employees. Continued efforts to cut costs and improve productivity within departments. Continued efforts to lower health benefits cost increases.


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