Budget Presentation 2012 - GREG (2)Small Town Service ~ Community Stewardship ~ Future Focus
Small Town Service ~ Community Stewardship ~ Future Focus
Budget Presentation
2012-13 Operating Budget
2012-17 Capital Improvement Program
May 21, 2012
Small Town Service ~ Community Stewardship ~ Future Focus
Presentation Outline
Introduction Town Manager
Budget Overview Finance Director
Departmental Highlights Assistant Finance Director
Additional Policy Items Town Manager
CIP Highlights Parks & Public Works Director
Public Comment
Council Discussion & Direction
Small Town Service ~ Community Stewardship ~ Future Focus
Budgetary Roller Coaster
•Continuing “Great Recession”
•Declining revenue from largest tax payer
•Redevelopment “takes” by State & County
•Rising pension, medical, police and
environmental costs
Small Town Service ~ Community Stewardship ~ Future Focus
Budget Development Process
•May, 2011 –Projected $7 m future shortfall
Council directed review of budget priorities
•Nov., 2011 –Projected $4 m gap in 2012/13
Subsequent retention of Netflix sales tax
•Jan., 2012 –Projected $2 m gap in 2012/13
Council rank orders budget proposals
•May, 2012 –Balanced proposed budget
Manageable future with better economy
Small Town Service ~ Community Stewardship ~ Future Focus
Balanced Budget Overview
GENERAL FUND SOURCES
General Fund Operating Revenues
Sales & Use Tax $7.9
Property Taxes 8.0
Licenses & Permits 2.1
Charge for Services 2.2
All Others 12.7
Fund Balance (for designated uses)2.4
TOTAL SOURCE $35.3
GENERAL FUND USES
General Fund Operating Expenditures $33.3
Transfers (for designated uses)2.0
Contingent Transfers -$
TOTAL USE $35.3
FY 2012/13
PROPOSED
BUDGET
Small Town Service ~ Community Stewardship ~ Future Focus
$1.8 m Budget Gap Solution
Tier 1 Reductions & Adjustments $1.1 m
Updated Revenue Projections $ .5 m
Increased Operating Costs ($ .3 m)
Use of 2011-12 Fund Balance $ .5 m
(or new revenue alternatives)
Small Town Service ~ Community Stewardship ~ Future Focus
Updated 5-Year Forecast
Assumptions
-Netflix sales tax revenues continue to drop
-Other revenues trending up slowly
-Rising pension and health costs
Future Challenges
-Up to $2.4 m in future adjustments needed
-Will require stronger economy and more cuts
-Some use of reserves likely to bridge the gaps
Small Town Service ~ Community Stewardship ~ Future Focus
Reserves Remain Strong
Restricted General Fund Reserves
Reserved for RDA Loan $1.5
Total Restricted General Fund Reserves $1.5
Designated Reserves
Budget Stabilization Reserve $7.4
Catastrophic Reserve 3.7
Capital/ Special Projects 5.1
Unallocated Reserves 0.2
Open Space Reserve 0.6
Actuarial 0.4
Vasona Land Sale 1.3
Sustainability Reserve 0.1
Special Studies 0.3
Productivity 0.1
Total Designated Reserves $19.2
Total Restricted and Designated Fund Balances $20.7
Estimated
June 30, 2013
( $ Millions)
Small Town Service ~ Community Stewardship ~ Future Focus
Departmental Highlights
Administrative Services
-Elimination of vacant Staff Technician
-Reduction in training, travel and other expenses
Community Development
-Reclassification of temporary planner to Senior Planner
-Reclaim previously shared Building Inspector
-Reduction in temporary staff hours
Police
-Elimination of vacant officer position
-Mid-year consolidation of Community/Personnel and Traffic sergeant positions upon retirement
Small Town Service ~ Community Stewardship ~ Future Focus
Departmental Highlights
Parks & Public Works (PPW)
-Elimination of PPW Manager; CIP funded thru Nov.
-Transfer some engineering/inspection expenses to CIP
Library
Add hourly staff for essential customer service
Seek funding for teen services and collections
Town-Wide
-Continue non-sworn unpaid furloughs for 5 days
(2% pay reduction)
Small Town Service ~ Community Stewardship ~ Future Focus
Additional Policy Items
Other Budget Considerations
-Library Weekend Hours
-Live Oak Day Services & Case Management
-Arts Funding Allocation
Final Budget Balancing
-Use of anticipated 2011/12 Fund Balance
-Redevelopment dissolution distributions
-Residual income from Villa Vasona transfer
Small Town Service ~ Community Stewardship ~ Future Focus
Future Budget Issues
Capital Projects Funding & Priorities Direction
Incomplete Redevelopment Projects
Technology investments
FY 12/13 Mid-Year Budget Review
-Environmental services funding
-Police staffing, overtime and training
Labor Negotiations with all bargaining groups
Small Town Service ~ Community Stewardship ~ Future Focus
Dissolution of Redevelopment
•Extraordinary Town administrative burdens
•County/State minimizing Town resources:
–Legislated reimbursements cut in half
–High County overhead costs taken off the top
–Tax increment allocation penalizes Town
–Narrow definition of “incomplete” projects
•Almond Grove, Pageant & Library cut
•Affordable Housing status unknown
Small Town Service ~ Community Stewardship ~ Future Focus
Proposed Fee Adjustments
Council Tier 1 Budget Priorities
Development related costs rise to full cost recovery
Evaluate Impact Fees (traffic, parks, environmental)
Annual CPI increases approved in April
Proposing Building/Planning Fee changes
Based on 2010 Cost Recovery Fee Study
Some increases, decreases and restructuring
Proposed Budget includes $50 k revenue
Public Hearing scheduled for June 4, 2012
Small Town Service ~ Community Stewardship ~ Future Focus
Building Fees
No rate or fee changes proposed
Instead, update basis for construction valuation
-Currently use 2002 ICBO Building Standards
-Move to 2010 ICC Standards
-Projects national average construction costs
-Includes regional adjustments for local variances
-New standard used by most local agencies
-Most agencies use ICC instead of ICBO
Likely increases most fees 10 –12%
Small Town Service ~ Community Stewardship ~ Future Focus
Planning Fees
Maximum 10% Increase
-Impacts most planning fees
30% Increase
-Non-residential and multiple dwelling A&S applications
-New second tier –Major Restaurants Category
Greater than 30% Increase
-CDAC & Administrative Land Use Permits (Wireless Telecom)
Other Modified Fees
-PD & Rezoning applications charged on actual Time & Materials
-Major projects: No change or slightly higher
-Minor projects: Lower fees
-Modest decreases for A&S and subdivision applications part of a PD
Small Town Service ~ Community Stewardship ~ Future Focus
Proposed FY 2012 –2017 CIP
CIP Development Process
-Review current and scheduled projects
-Match priorities to available resources
-Planning Commission review
Proposed 5 Year CIP totals $27m
-Proposed FY 12/13 CIP totals $18.6m
-$14m in carry-forward projects
-$4.6m in new or expanded projects
Small Town Service ~ Community Stewardship ~ Future Focus
Specific Capital Projects
Streets Projects
-Blossom Hill Road street improvements
-Almond Grove Street Rehabilitation
-University Avenue Resurfacing
Parks
-Completion of Pageant Grounds
-Completion of Los Gatos Creekside Sports Park
Public Facilities
-Completion of LEED certification for new Library
-Planned Re-Use of former Library Space
Small Town Service ~ Community Stewardship ~ Future Focus
Recommended Actions
Public Comment
Council Discussion
Council Direction and Action
-Consider the FY 2012/13 Proposed Operating Budget
-Consider the FY 2012-17 Proposed CIP
-Provide direction on the following:
-Funding for increased Library weekend hours
-Arts and Senior services funding requests
-Use of increased revenues in lieu of fund balance
-Planning and Building Fee changes
-Other Council priorities and interests
Small Town Service ~ Community Stewardship ~ Future Focus
Thank You