City Manager’s Proposed Budget for Fiscal Years 2010 and 2011 City Council Budget Hearing June 08, 2009

2 Proposed Budget FY 2010 & 2011  Overview and Future Meetings June 8- City Council Budget Discussion  Budget Schedule  Update on FY 2009  City Manager’s Proposed Budget FY 2010 and 2011 General Fund Enterprise Funds Capital Fund  Questions/Discussion June 15  Public Hearings Proposition 218 utility rates  Water Utility Rates  Wastewater Collection Rates  Refuse Rates  FY 2010 Budget Adoption  FY 2011 Budget Adoption-in-concept

3 FY 2010 & 2011 Budget Hearing Schedule  March 31 Utility Rates & Prop 218 noticing  April 21 HSRAP/CDBG  April 27 Study Session with City Council  May 5 Budget Kick-Off, Admin. Depts.  May 7 Police, Fire, Library, Planning  May 12 CSD, Utilities, Utilities CIP  May 13 GF Capital Budget, PWD, ASD  May 19PWD Enterprise and ISF, Atty Office  May 26 Wrap-Up, Municipal Fee Schedule  May 28Wrap-up continued  June 8 Budget Review with City Council  June 15Budget Adoption

4 Proposed Budget FY 2010 & 2011  Update of Fiscal Year 2009 – General Fund $8.0 million gap due to revenue declines Budget Balancing Strategies initiated  One-time expenditure reductions moves structural issues into FY 2010

5 Proposed Budget FY 2010 & 2011  Summary – General Fund Fiscal year 2010 deficit - $10 million $8 million gap from FY 2009 $2 million in addition revenue declines  City Manager’s Proposed Budget balancing strategies: $3.0 million – Employee compensation contributions $2.8 million - Departmental expenditure reductions  One-time options” $2.1 million - Suspension of GF Retiree Medical contribution $1.0 million - Suspension of GF year-end contribution to Capital Fund $1.4 million - Additional revenues from other funds $0.3 million - Other expenditure changes $10.6 million  $0.6 FY 2010 excess to be applied to one-time options

6 Proposed Budget FY 2010 & 2011 Fiscal year 2010 General Fund deficit $10 million Budget balancing strategies

7 Proposed Budget FY 2010 & 2011 Finance Committee and Staff Recommended** Changes

8 Proposed Budget FY 2010 & 2011 Finance Committee and Staff Recommended Changes – General Fund FY 2010

9 Proposed Budget FY 2010 & 2011  General Fund Reserves Budget Stabilization Reserve  Reserve is for one-time unexpected needs, not meant to fund ongoing operating expense  Range 15-20% of GF expenditures; 18.5% is the target  FY 2010 proposed reserve level $21.7 million or 15.3%  FY 2011 proposed in-concept reserve level $19.0 million or 13.0% Additional expenditure reductions will be made prior to FY 2011 budget adoption, June 2010 to bring reserves to 15% Infrastructure Reserve  $5.2 million in FY 2010 and $1.6 million in FY 2011  The $1 million year-end budgeted transfer from the General Fund was suspended in FY 2009 and 2010, but resumes in FY 2011  An additional $1 million reduction in the General Fund transfer for FY 2010 was recommended by the Finance Committee

10 Proposed Budget FY 2010 & 2011  Additional General Fund Budget Pressures State Borrowing of Property Tax Revenues $2.4 million Possible Unknown Additional Revenue Declines Other Possible State Budget impacts Infrastructure Funding

11 Proposed Budget FY 2010 & 2011  Enterprise Funds Proposed Budgets Electric Fund  FY 2010$137.1 million  FY 2011$146.9 million Fiber Optics Fund  FY 2010$1.6 million  FY 2011$1.6 million Gas Fund  FY 2010$45.8 million  FY 2011$51.6 million Water Fund  FY 2010$50.8 million  FY 2011$33.3 million

12 Proposed Budget FY 2010 & 2011  Enterprise Funds Proposed Budgets Wastewater Collection Fund  FY 2010$16.4 million  FY 2011$17.3 million Refuse Fund  FY 2010$36.5 million  FY 2011$44.1 million Wastewater Treatment Fund  FY 2010$20.4 million  FY 2011$21.7 million Storm Drainage Fund  FY 2010$5.6 million  FY 2011$5.6 million

13 Proposed Budget FY 2010 & 2011  Enterprise Funds In Fiscal Year 2010 the average residential utility bill is increasing by $4.42 or 1.4 percent Rates Gas 10 % decrease 15 % increase Electric10 % increase 15 % increase Water 5 % increase 7 % increase Wastewater Collection 5 % increase 5 % increase Refuse17 % increase Storm Drainage 0 % increase

14 Proposed Budget FY 2010 & 2011 Average Residential Utility Bill

15 Proposed Budget FY 2010 & 2011  General Fund CIP Overview Total CIP $66.8 million in FY 2010 and $17.4 million in FY 2011  FY 2010 includes $50.5 million for Measure N Library Bond Construction and improvements  General Fund Contribution to CIP in FY 2010 $8.9 million Infrastructure Reserve  $5.2 million in FY 2010 and $1.6 million in FY 2011  The $1 million year-end budget transfer from the General Fund was suspended in FY 2009 and 2011, and resumes in FY 2011  An additional $1 million reduction in the General Fund transfer for FY 2010 was recommended by the Finance Committee

16 Proposed Budget FY 2010 & 2011 Update to Infrastructure Backlog Report  Infrastructure Backlog Report Total Backlog (20 years)$ 450 million GF CIP appropriations ($ 64) million Total Unfunded Backlog $ 386 million

17 Proposed Budget FY 2010 & 2011  Questions/Discussion