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Briefing Purpose 2 To submit the amended FY11 City Manager’s proposed FY10/FY11 Biennium Operating Budget and NEW five-year Capital Improvement Plan (CIP)

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Presentation on theme: "Briefing Purpose 2 To submit the amended FY11 City Manager’s proposed FY10/FY11 Biennium Operating Budget and NEW five-year Capital Improvement Plan (CIP)"— Presentation transcript:

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2 Briefing Purpose 2 To submit the amended FY11 City Manager’s proposed FY10/FY11 Biennium Operating Budget and NEW five-year Capital Improvement Plan (CIP) for Council’s consideration.

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6 6 Financial Policies Revenues – Diversified and stable; fees and changes set to cover expense of attendant services; restricted use of one-time revenues; conservative estimation Budget – Balanced; restricted use of fund balance; quarterly monitoring; multi-year forecast Fund Balance – Policy minimum of 15% (Adopted by Council September 2009)

7 7 Debt Management Principles and Administration –Debt capacity and affordability limits Debt Service to General Fund revenues = 50% Utility Fund Debt – Annual water and sewer rates set to generate sufficient revenues to meet bond covenants and capital replacement Refunding Bonds – On-going monitoring with a minimum of 3% Net Present Value (NPV) savings Financial Policies (continued) (Adopted by Council September 2009)

8 8 Capital Improvement Program Guidelines – Five-Year Capital Improvement with enhanced pay-as-you go funding –Adequate maintenance of physical assets to protect investment Other Post Employment Benefits (OPEB) Funding Set aside resources to pre-fund OPEB liabilities on an actuarially-sound basis over time Special Revenue/Enterprise Funds – Avoid designation of discretionary funds in order to maintain maximum financial flexibility Independent Audit –Conduct an annual independent audit Financial Policies (continued) (Adopted by Council September 2009)

9 Credit Rating Agencies March 2009—rating analysts outlined certain expectations of the City to sustain ratings: No additional debt restructuring for cash flow benefits Conservative revenue projections; structurally balanced budget with recurring revenues Reduction of discretionary expenditures and strong expenditure controls Restoration of general fund undesignated unreserved fund balance to 15% of revenues Continued progress in eliminating Risk Management Fund deficit Continued compliance with 12% debt-service-to-revenues policy 9

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13 Budget Assumptions Submit a balanced budget for each year of the FY10/11 biennium without use of fund balance No consideration of equalization tax rate in response to declining real estate assessed values Continue to manage FY10 revenue shortfall without using fund balance through tight expenditure controls Include public safety retention pay plan and anniversary increase as first priority 13

14 Budget Assumptions (continued) Fund Courts Complex and Capital Reserve to maintain policy compliance Include level funding for education among priorities Continue $3M funding for Tax Relief for Elderly and Disabled No new capital projects for the biennium except Council’s reprogramming of Holiday Inn to Admiral’s Landing Seawall and Crawford Pkwy. bulkhead projects 14

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17 17 Cost of Service Highlights Proposed FY11 rate increases set at 5.2%, per Council consensus during utility plan of finance discussions with Financial Advisors FY2010FY2011Change Residential Water Charges$4.03/1,000 gallons $4.24/1,000 gallons $0.21 Residential Sewer Charges $3.15/1,000 gallons$3.31/1,000 gallons$0.16 Stormwater Fees$6.50/month per ERU$7.00/month per ERU$0.50

18 Historical Practice (

19 FY11 Budget Highlights Implement Public Safety Retention Pay Plan and Anniversary step increase Continued level funding of Portsmouth Public Schools Redeployment of Solid Waste Fund workforce from weekly to monthly bulk waste removal and add more street sweeping services Funding of capital reserve for new courts facility at $1.8M $834,310 golf fund subsidy, down from $1.2M No equalization tax rate or increase tax rate Total General Fund Budget = $218,361,390 Total Budget = $547,938,307 19

20 FY11 PROPOSED BUDGET Investment in Employees No furloughs No unpaid holidays No layoffs No elimination of vacant positions Birthday Holiday added Fund public safety retention pay and anniversary step increase 20

21 21 March 30City Manager’s FY11 Budget Presentation* April 6Public Work Session–FY11 Budget April 8State of the City Luncheon April 12Public Work Session–Five-Year CIP (FY11–FY15) April 13Public Work Session – FY11 Budget and CIP Public Hearing 7 p.m. April 26Public Work Session–Economic Development April 27Public Work Session Regular City Council Meeting May 10Public Work Session May 11Regular City Council Meeting – FY11 Budget and CIP Public Hearing 7 p.m. Budget Adoption Remaining FY10 Calendar

22 22 May 17Community Meeting: I.C. Norcom High School May 24Public Work Session–Economic Development May 25Public Work Session Regular City Council Meeting May 31Memorial Day Parade June 7Public Work Session June 8Public Work Session Regular City Council Meeting June 21Public Work Session–Economic Development June 22Public Work Session Regular City Council Meeting Remaining FY10 Calendar


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