1. CITY OF MERIDIAN FY2012 BUDGET HEARING Mayor – Tammy de Weerd Council President – David Zaremba Council Vice President – Brad Hoaglun Councilman – Keith Bird Councilman – Charlie Rountree

2. FY2012 Budget Recap This budget is not just an “income statement” budget but also a “balance sheet” budget. It is not prepared looking at one year in isolation but looking out at least five years forward and evaluating revenue streams and fund balances. First year we incorporated our five year capital improvement plan. We are not taking any of the allowed statutory increase for property tax. Significant changes in the General Fund include increasing the number of command personnel in the Fire Department and three Parks capital projects from the CIP plan. The Enterprise Fund is not adding any personnel and is concentrating on core functions, the treatment plant, wells, and line repair and expansion with the exception of some reclaimed water projects.

3. FY2012 Revenue Forecast FY2012 Development Services revenue (building permit revenue) is budgeted 12% below the FY2011 budget. This is due to the a year over year decline in FY2011 residential building permits. FY2011 revenue will in fact slightly exceed the budget due to an increase in commercial building permits. Commercial and even residential building permit sales projections have a high possibility of error so budgeted amounts remain conservative. Interest rate revenue will be insignificant. State Revenue Sharing (sales tax) will remain at about $3 million as no surge in consumer spending is expected. Revenue sharing is budgeted at $2.75 million to provide a safety cushion. The Enterprise Fund revenue budget is 3% below the FY2011 revenue budget. This is a protection against the variability in water sales. Sewer sales are lowered just slightly. The budget does not include a fee increase or a significant increase in the number of accounts. Assessment revenue from new buildings connecting to the utility system will remain relatively low consistent with the last two years. The City is not taking the 3% allowable property tax budget increase. Property tax increases by 2% due to new construction. Overall the General Fund revenue is budgeted at almost exactly the same number that it was in FY2011.

4. Accounting Details We now show transfers as a separate line below personnel, operating expense, and capital outlay so true cost of the department before transfer will be reflected. 50% of Finance, IT, HR, Construction Manager, and Legal Department to Enterprise Fund 15% of Mayor’s Office personnel (except Mayor) to Enterprise Fund City Hall cost split with all departments in building according to square footage The Enterprise Fund added a new department headed by the Environmental Program Manager. This department is funded with monies taken from other departments within the fund. Definition of “total” budget can vary depending on inclusion of carry forward. This presentation often excludes carry forward in order to represent the “new” budget. Inclusion of “Use of fund balance” balances the total budget. It is generally not used in the revenue graphs to highlight the new sources of revenue. Use of fund balance offsets carry forward or is for one-time capital projects selected to be spent from amounts saved in the fund balance. Used for Enterprise Fund depreciation (non-cash).

8. For the last three years about 80% of each year’s new budget has been for on-going costs, personnel and operating. This includes one-time operating items which are generally immaterial for General Fund but can be substantial for the Enterprise Fund.

10. This Graph illustrates only Funds 01 through 20 70% of the FY2012 Base Budget is Public Safety

12. Property Tax - FY2012 Not taking the allowable 3% increase in budget authority means foregoing $568,435. Total taxable value of all Meridian property dropped just under 4% percent (compared to 10.5% last year). Total residential property values dropped 7.5% while total commercial property values dropped 1.28%. Property tax revenue increased $385,000 due to new construction. ($433,157 from new construction last year)

14. Impact of Levy and Market Value Change Average Residential Property

15. Total General Fund (funds 01 thru 55) FY2012 New Budget Request - $30.85 Million (excluding Carry Forward ) CIP Fund Carry Forward - $1.7 million

16. FY2012 Total Enhancements, Replacements, and Wage Adjustments - $2,972,788 –Personnel - $502,826 : $165,260 transfer to Enterprise Fund Total personnel cost increased 3% between FY2011 and FY2012. Between FY2008 and FY2012 total personnel cost increased 18%. –Operating - $223,204 –Capital - $2,415,670 ($2,385,500 from Capital Improvement Plan)

17. General Fund – Police Department FY2012 Budget Request Small grants and small equipment upgrades - $181,921 Moved the Police Pay Step Plan 3% Vehicle Replacement $285,500

18. General Fund Fire Department FY2012 Budget Request 3 Division Chiefs- $405,803 Bush Chassis - $49,500 Capital Replacements - $113,000

19. General Fund – Parks and Recreation FY2012 Budget Request Capital Improvement Plan projects –Field House - $500,000 –Pathway Connections - $100,600 –Maintenance Facility - $1,547,895 Franklin Road - $66,333 Increase Recreation Employee to 2/3 rd Time - $22,824

20. General Fund Administration FY2012 Budget Request City Hall Building Maintenance Worker - $43,058 1.5 Additional GIS staff - $118,824 Various Wage Adjustments - $45,742 Street Lights $51,000 IT Software and Hardware Replacements - $148,245

21. Development Services FY2012 Budget Request Planning South Meridian Public Outreach - $40,000 Wage Adjustment - $4,926

23. Connection and utility sales revenue are mixed in this graph. Connection revenue has largely paid for infrastructure expansion and sales revenue for day to day operations costs but they are mixed in the fund balance. Historically we include depreciation but remove it for consideration of “balancing” the budget since it is a financial accounting number.

25. City of Meridian FY2012 Enterprise Fund Budget Request PC/OE/New Capital - $25.9 Million New Enhancements - $7.73 Million

26. Enterprise Fund FY2012 Enhancement Requests Water –Well Development and Rehabilitation - $763,413 Water – Water Mains and Water Lines - $905,000 Water – Pressure Equalization - $331,500 Water – Machinery and Equipment - $268,000 Water – Backflow Rebates - $203,000 Public Works – Source Water Master Planning - $240,000

27. Enterprise Fund FY2012 Enhancement Requests Wastewater – Treatment Plant Improvements - $2,748,413 Wastewater - Sewer Lines - $1,670,000 Wastewater - Machinery and Equipment - $218,500 Wastewater - Reclaimed Lines - $350,000

28. City of Meridian FY2011 Budget Amendment August 23, 2011

29. City of Meridian FY2011 Budget Amendment

33. Summary of major FY2011 Amendments General Fund –Parks Land Acquisition - $540,000 –Contracted Legal Expenses - $1,500,000 –Settlement Expenses - $2,300,000 –City Hall Repairs - $1,883,700 Enterprise Fund –Carryforward Adjustment to Actual - ($3,457,180) –Land Acquisition - $21,000

34. City of Meridian FY2011 Budget Amendment

36. Any Questions

37. Fund Balance Policy Why? To comply with GASB 54 When? Must approve a policy by year end What the policy defines? Only applies to Governmental funds Defines the 5 designations allowed to categorize fund balances Delegates authority to assign funds (to Stacy) Provides spending priority (restricted first) Clarifies minimum fund balance reserve (4months)

38. Policy Defines Fund Balance 1.Nonspendable – non cash funds such as inventory, long term notes, property held for sale, prepayments or endowment funds –Fire Prevention & Burnout Trust Funds (only $4,000) –Prepayments for flex plan, postage, software maintenance plans, insurance 2.Restricted – external parties constraints, State Legislation, Federal or Court –Impact Fund –Debt Service Fund –Grant Fund 3.Committed – internal constraints or self imposed restrictions, formally made by Council prior to year end for a specific use –Budget of fund balance 4.Assigned – internal self imposed restrictions but Council can grant the authority to an appointee –Carryforward, commitments or encumbrances –Capital Projects Fund –Public Safety Fund 5.Unassigned – available fund balance –Minimum fund balance reserve

39. Action needed by Council Adopt Fund Balance Policy by 9/30/2011 Questions ???

40. Prepared by the City of Meridian Department of Financial Management and Planning For More Information call City Hall at 888 – 4433, email us at skilchenmann@meridiancity.org or check out our City of Meridian website at www.meridiancity.org – Finance Department