Citizens Budget Committee Citizens Budget Committee FY2010 BudgetFY2010 Budget

City of Duluth

AgendaAgenda

March 26, 20097:00 p.m. to 8:00 p.m.

I. Welcome and Recap of Last Weeks Meeting(Slide depicting our projections of Revenue and Expenses for the FY10 Budget. Slide of sample PDP to see that everyoneunderstands what they are looking at)

 II. “Big Picture” Solutions

(Don’t get bogged down in details of budgets but concentrate on big picture of what is City’s goal. Do we want to maintaincurrent service levels? What are we will to do without or willing to pay for?)

  III. Introduction of City Department Heads

Public Works- Director Audrey TurnerCourts- Judge Charles BarrettPolice Department- Chief Randy BelcherPlanning Department- Director Cliff Cross(Each department director will provide an overview of their department and the actions that they have taken to reduce expensesand still maintain service. They will answer any questions that might have been unclear on their department’s budgets)

  IV. Overview “Capital Improvement” Budget. What is the Capital Improvement Budget, where does funding come from?

Can expenses be cut by cutting projects? (Presentation of Projects. Due to the shortage of General Revenue to meet Administrative Cost for the past 6 years Capital projects are funded almost entirely by SPLOST funds or Grants that can onlybe used for Capital projects and no Administrative costs. The only Capital projects that will be shown will be those involvingthe use of General Fund Revenues.)

  V. What is the City’s Recommended Solution?

(After forming the Citizens Budget Committee and addressing the many questions and listening to the suggestions staff hasbegun to focus more precisely on ways to balance the budget and has put its ideas down. It is up to the Budget Committee if they want to look at these ideas at this point or wait until the Committee has formed its own ideas and present those) Optional Slide.

  VII. Homework: Continue to study Department Budgets and other information presented in preparation for presentations

from remaining City Departments: Public Information/Marketing, Parks, Business Office

FY 2010 Budget SummaryFY 2010 Budget Summary

FY2010 Budgeted General Fund Revenues ($1,728,371.28 less than 2009) 15,000,000.00

FY2010 Budgeted Expenditure Total ($703,840 less than 2009 and reflects City Department cuts of $714,550) 17,362,120.00

Projected General Fund Revenue Shortfall 2,362,120.00

Program Description Package Program Description Package (PDP) Example (PDP) Example

Program Description Package Program Description Package (PDP) Example (PDP) Example

Program Description Package Program Description Package (PDP) Example (PDP) Example

Capital Improvement Project Capital Improvement Project (CIP) Example (CIP) Example

Department ReviewDepartment Review

Public Works DepartmentStaff of 14 Full Time and 3 Part

TimeDepartment Director: Audrey

Turner

Department ReviewDepartment Review

Courts DepartmentStaff of 8 Full Time and 2 Part

TimeJudge and Court Administrator:

Charles Barrett

CourtsCourts

CourtsCourts

Department ReviewDepartment Review

Police DepartmentStaff of 58 Sworn Officers and

15 Non Sworn EmployeesPolice Chief: Randy Belcher

Department ReviewDepartment Review

Planning DepartmentStaff of 8 Full Time

Planning Director: Cliff Cross

What is a Capital Improvement What is a Capital Improvement Project?Project?

Five Year Capital Improvement Program

The City has established a five year capital improvement program which identifies capital projects to be funded during the next five years.

The program identifies each proposed capital project to be undertaken, the year in which it will be started or acquired, the amount expected

to be expended on the project each year, and the proposed method of financing these expenditures. This program shall be approved each

year by the Mayor and Council.

The capital improvement budget represents the first year of the capital improvement program (the current year of the budget). The capital

budget is the government’s annual appropriation for capital spending and is legally adopted by the Mayor and Council. The capital budget

authorizes specific projects and appropriates specific funding for those projects. The capital budget, not the capital improvement program,

provides legal authority to proceed with specific projects. Projects listed in the capital improvement program for year other than 2008 (the

out years of 2009-2012) are not authorized until the annual budget for those years is legally adopted. The out years serve only as a guide for

future planning.

Definition of a Capital Improvement

The classification of a project as a Capital Improvement is based on the project’s cost and frequency of funding. A Capital Improvement

project is relatively costly and funded infrequently. Capital Improvement project will typically meet at least one of the following criteria:

1. The cost to purchase is high (generally $5,000.00 or more),

2. The purchase does not recur annually,

3. The useful life is long (generally 3 years or more),

4. The purchased item will become part of the City’s fixed asset inventory.

The typical fixed asset will have a useful life of at least three years and cost at least $5,000.00. Major equipment (expensive and long useful

life), new property (buildings, land, parks), facility improvements, public improvement projects (road and park improvements,

sidewalk/bikeway/path projects, etc.) and vehicle replacements are some examples of what is considered a Capital Improvement.

What is a Capital Improvement What is a Capital Improvement Project?Project?

Capital Projects Considerations and Ranking

The projects are separated into two sections, non-competing and ranked competing projects. Non-competing

projects are funded 100% by outside funds such as grant money. If these funds do not materialize, the projects

will drop out of the budget.

The competing projects are ranked numerous times by the City Administrator, the City Clerk, and the Chief of

Police. The Mayor and Council consider these employees’ rankings and then conduct their own ranking in budget

work sessions. The list of projects is always much larger at the beginning of the budget cycle and is later pared

down to meet the absolute minimum realistic needs and available revenue. Funds available for CIPs are

determined by the operations budget and revenue projections. Revenues in excess of the operations budget are

dedicated to CIP projects. Items that fall below the available funding line are dropped and often reappear to

compete in the following year’s iterations.

The following criteria are used by the Mayor, Council and Department heads to rank competing capital projects.

1. Most directly benefit the community.

2. Support all departments.

3. Yield the highest return-on-investment.

4. Maintain the department heads’ rankings.

5. Are the least costly, when project rankings are tied.

Capital Improvement Projects Capital Improvement Projects Department SummaryDepartment Summary

Capital Improvement Projects Capital Improvement Projects Department SummaryDepartment Summary

Capital Improvement ProjectsCapital Improvement Projects

Capital Improvement ProjectsCapital Improvement Projects

Capital Improvement ProjectsCapital Improvement Projects

Capital Improvement ProjectsCapital Improvement Projects

Capital Improvement ProjectsCapital Improvement Projects

Capital Improvement ProjectsCapital Improvement Projects

Rogers Bridge BikewayRogers Bridge Bikeway

Western Gwinnett BikewayWestern Gwinnett Bikeway

Davenport and Irvindale Davenport and Irvindale SidewalksSidewalks

Hospital Road ConnectorHospital Road Connector

SR 120 SidewalksSR 120 Sidewalks

Capital Improvement Projects Capital Improvement Projects OverviewOverview

CAPITAL IMPROVEMENT PROJECTSWITH GENERAL REVENUE FUNDS 

City Gen. Funds Grant SPLOST

 Western Gwinnett Bikeway $225,000 $2,328,016 $592,177  Duluth Sidewalks (Davenport & $ 75,000 $1,834,000$459,000Irvindale)  Rogers Bridge Bikeway $ 41,176 $ 372,000 $ 95,000  Hospital Road Connector $183,962 $1,785,902 $341,000

Hudgens Park Restroom $100,000 $ 0 $271,925  SR 120 Sidewalks $227,000 $ 496,000 $ 21,000 TOTAL $852,138 $6,815,918 $1,780,102

Staff Recommendations to Staff Recommendations to Balance BudgetBalance Budget

2010 Budget Summary

FY2010 Budgeted General Fund Revenues $15,000,000($1,728,371 less than the FY2009 Budget)

FY2010 Budgeted Expenditure Total $17,362,120($703,840 less than the 2009 Budget andReflects City Dept., cuts of $714,550)

Projected General Fund Revenue Shortfall $2,362,120

Measures to Balance Budget

Freeze on hiring (Cont. holding vacant positions) $ 250,000

Insurance Benefit Savings $ 20,000

Unobligated Reserve Funds $ 338,144Substitution of 2009 SPLOST funds for ObligatedGeneral Funds for Capital Projects $ 852,138

Increase of Property Taxes 1.25 mills $1,250,000

$2,710,282

Projected Shortfall $2,362,120Budget Cuts and Revenue $2,710,282Balance with some additional for Margin for Error

And funds already spent $ 348,162