City Finance Update Operating and Capital Budgets April 5, 2011 Post Agenda Councilman William Peduto, Finance Chair

Operating Budget $455,109,600 Revenues Includes a one time transfer of $12 Million from the Citys Rainy Day Fund Balance This helps to make up for the $13.4 Million irrevocably deducted from Parking Tax and dedicated to Pension $1.3 Million expected before years end from increased parking rates $450,016,815 Expenditures Includes all departmental operating expenses $87 million Debt Payment Pension payments in the budget: $50 Million Total into Pension $50 Budget + $13.4 PKT + $9.1 EC = $72.5

Operating Budget: Where Are We? At the end of February 2011: Revenues = $133.9 Million Expenditures= $ 52 March 1 Debt= $ 21 Total= $ 61 Million *If expenditures payable and revenues received goes as planned there should not be a need to transfer funds from the rainy day fund into the GF operating budget until late August for the September 1 st $66 Million debt payment.

Capital Budget Capital Fund Balance: Per CAFR *2010 Estimate Beginning Balance $ 11,530,696 $ 43,270,662 $ 81,427,473 $ 78,323,210 $ 52,763,509 Revenues $ 1,289,154 $ 5,078,058 $ 3,815,392 $ 17,764,715$ 8,763,649 Transfer from/to other sources $ 49,168,255 $ 55,139,533 $ 19,330,487 $ (6,282,020)- Expenditures $ (18,717,443) $ (22,060,780) $ (26,250,142) $ (37,042,396)$ (29,735,242) Remaining Fund Balance $ 43,270,662 $ 81,427,473 $ 78,323,210 $ 52,763,509$ 31,791,916 Annual Capital Budget $ 25,000,000 $ 21,000,000 $ 26,318,500 $ 26,887,280 $ 27,000,000 *The City spent, and was reimbursed, approximately $12 Million for the G20 expenses that is reflected in the 2009 fiscal year.

2009 Act 47 Plan CIP Recommendations Beginning Balance $ 78,323,210 $ 51,435,930 $ 26,435,930 $ 1,435,930 $ - City Funding Needed $ 26,887,280 $ 25,000,000 Remaining Capital Fund $ 51,435,930 $ 26,435,930 $ 1,435,930 $ (23,564,070) $ (25,000,000) According to the ACT 47 Plan, the City's transfer of $78 Million of PAYGO funds should have provided $25 million for capital projects for 2009, 2010 and It was clear that the City will run out after 2011 and the Act 47 team recommended the City transfer additional PAYGO funds, dedicate a portion of the Parking Tax Revenue, and consider borrowing/debt refunding starting in 2011 for future years.

Controller Lamb completed/abandoned projects have prior authorizations and expired contracts can be cancelled to free up some funds State and Federal reimbursements $13 Million from ICA to be placed in Capital There may still be a need for Pay-Go funds to fully fund the 2011 capital budget Capital Budget: Where Are We?

Best Practices – GFOA /NACSLB The Government Finance Officers Association (GFOA) recommends that, at a minimum, financial policies in the following areas be developed by professional staff and formally adopted by the jurisdiction's governing board as well as the governing boards of those component units; state, provincial and municipal corporations and organizations; and other bodies under their jurisdiction. Financial Planning Policies Revenue Policies Expenditure Policies

Financial Planning Policies These policies address both the need for a long-term view and the fundamental principle of a balanced budget. At a minimum, jurisdictions should have policies that support: Balanced Budget - A jurisdiction should adopt a policy(s) that defines a balanced operating budget, encourages commitment to a balanced budget under normal circumstances, and provides for disclosure when a deviation from a balanced operating budget is planned or when it occurs. (NACSLB Practice 4.5) Long-Range Planning - A jurisdiction should adopt a policy(s) that supports a financial planning process that assesses the long-term financial implications of current and proposed operating and capital budgets, budget policies, cash management and investment policies, programs and assumptions. (NACSLB Element 9, GFOA Recommended Practice) Asset Inventory - A jurisdiction should adopt a policy(s) to inventory and assess the condition of all major capital assets. This information should be used to plan for the ongoing financial commitments required to maximize the public's benefit. (NACSLB Practice 2.2)

Revenue Policies Revenue Diversification - A jurisdiction should adopt a policy(s) that encourages a diversity of revenue sources in order to improve the ability to handle fluctuations in individual sources. (NACSLB Practice 4.6) Fees and Charges - A jurisdiction should adopt policy(s) that identify the manner in which fees and charges are set and the extent to which they cover the cost of the service provided. (NACSLB Practice 4.2) Use of One-time Revenues - A jurisdiction should adopt a policy(s) discouraging the use of one-time revenues for ongoing expenditures. (NACSLB Practice 4.4) Use of Unpredictable Revenues - A jurisdiction should adopt a policy(s) on the collection and use of major revenue sources it considers unpredictable. (NACSLB Practice 4.4a)

Expenditure Policies Debt Capacity, Issuance, and Management - A jurisdiction should adopt a policy(s) that specifies appropriate uses for debt and identifies the maximum amount of debt and debt service that should be outstanding at any time. (NACSLB Practice 4.3, 4.3a, GFOA Recommend Practices pp.90-92) Reserve or Stabilization Accounts - A jurisdiction should adopt a policy(s) to maintain a prudent level of financial resources to protect against the need to reduce service levels or raise taxes and fees due to temporary revenue shortfalls or unpredicted one-time expenditures. (NACSLB Practice 4.1) Operating/Capital Expenditure Accountability - A jurisdiction should adopt a policy(s) to compare actual expenditures to budget periodically (e.g., quarterly) and decide on actions to bring the budget into balance, if necessary. (NACSLB Practice 7.2)

Sharing of Information it is further recommended that these policies, along with any others that may be adopted, be reviewed during the budget process… The results of the review should be shared with the governing board during the review of the proposed budget.