Presentation on theme: "2013 Budget Proposal Overview Rev. Ricky Burgess, Finance Chair City Council Budget Office Bill Urbanic, Director November 27, 2012."— Presentation transcript:
2013 Budget Proposal Overview Rev. Ricky Burgess, Finance Chair City Council Budget Office Bill Urbanic, Director November 27, 2012
The 2013 Ravenstahl Budget Budgetary 892 Police Officers maintained 2.5% salary increase for non-union and some union employees, Implementation of other contracts $470.1m Revenue and $469.5m Expenditure Budget Departmental Expenditures increase by only $1m over 2012 City’s Total Portion of Pension will be $50m $31 million MMO, $13 million Parking, $5 million MMO+ Additionally $2.5m for OPEB Trust Fund $36.8 million Capital Budget $15 million transfer to PAYGO Budget 2014
2007 Expenditures 2013 Proposed Expenditures $469.5 Million
2013 Financial Outlook Revenues $ 470,210,172 Expenditures Operating Departments $ 229,584,955 Pension $ 55,282,500 Healthcare, Workers Comp $ 88,422,993 Utilities, Judgments $ 9,087,950 Debt Service $ 87,135,417 Total Expenditures $ 469,513,815 Operating Result $ 696,357 Beginning Fund Balance $ 48,599,490 Tranfer to PayGo $ 15,000,000 Reserve Fund Balance Transfer $ - Ending Reserve Fund Balance $ 34,295,847 Fund Balance as % of Expenditures 7.3%
Debt Service 18.5% of Budget Debt service has been reduced significantly over past 5 years PayGo Capital set aside returns in 2013 for 2014 2012 Bond Deal 1.Allows for reasonable debt service payments 2.Allows for future responsible borrowing 3.Maintains debt cliff and goal of 12% debt ratio Council Debt Policy Objectives are met City can responsibly borrow every 3 years Debt
Current Capital Status The City budgeted $42.5 million of the $80 million bond proceeds in 2012. That leaves $37.5 million available for 2013. The final 2012 Community Development Block Grant allocation was just over $13 million. The City anticipates slightly less funding in 2013 but that depends on the actions of Congress. Federal entitlement programs may be reduced if there is no compromise on tax revenues and expenditure cuts. There is no PAYGO funding in the 2012 or 2013 capital budgets. The need for capital expenditures continue to exceed available resources. Paving, vehicle replacements, and demolition of condemned buildings are in perpetual backlog. The City continues to look for grants and other funding opportunities to add to our capital budget.
2014-2018 Capital Improvement Plan The Mayor proposes $25 million in general fund revenue (PAYGO) be transferred for the 2014 capital budget. The CIP also contemplates an annual $30 million in new bond issuance for 2015-2018. CDBG entitlement is estimated to be fairly steady at approximately $13 million a year.
Proposed 5 Year Plan 20132014201520162017 Expend 469,513,815 479,097,862 496,367,961 507,437,901 521,568,544 Revenue 470,210,172 479,455,533 497,004,242 508,517,110 522,135,999 Surplus / (Deficit) 696,357 357,671 636,281 1,079,209 567,455 Fund Balance $ 34,295,847 $ 29,653,518 $ 30,289,799 $ 31,369,008 $ 31,936,463 Transfer to Capital $ (15,000,000) $ (5,000,000) $ -
Pension 5 year plan Benefit Expense Pension Contributions = MMO+ Parking Tax+$5 Million Employee Contributions
The need for additional revenue: In order to separate the lines of the previous slide the 2009 Act 47 Plan calls for the creation of new local revenue sources of $10 Million Dollars or expenditure cuts, or raise existing taxes Any excessive cuts will have an adverse effect on service delivery City should look to lower local tax burden on residents and businesses paying their share of fees and Payroll Tax to help create further growth Raising existing taxes would have an adverse effect 1.Billboard Tax $1.5 - $4m 2.Non-Profit Payroll Tax* or legal challenges of tax exempt cost centers $10-$40 Million 3.Market Based Revenue Opportunities $1 to $3 Million Potential new revenue sources: * State action required
We have addressed many of our underlying problems with the help of Act 47 The 2013 Budget proposal shows this by once again staying balanced Revenue is still and will continue to be an issue out into the future $10 Million is needed annually for a cushion for pension, PayGo and uncertain economic conditions City should insist on a non-profit payroll tax (MegaHealthcare) Any other options that do not increase resident taxes should be considered: Billboard Tax, Increases of fees, State enabled taxation and relief through pension reform CDBG funding may be further reduced – need to replace those dollars Summary
As Act 47 departs we need to take advantage of the plan and tools it has left us… Council should begin to reassume its oversight function Codify tools, processes and portions of the 47 plan that work and can be implemented – such as voting on a 5 year plan Improve communication process and approval process in 2013 Lobby the state legislature with a plan of reform for pension and non-profit contribution (payroll tax) Act 47