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Briefing Purpose

Briefing Purpose. To submit the amended FY11 City Manager’s proposed FY10/FY11 Biennium Operating Budget and NEW five-year Capital Improvement Plan (CIP) for Council’s consideration. 2. 3. 4. 5.

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Briefing Purpose

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  1. Briefing Purpose To submit the amended FY11 City Manager’s proposed FY10/FY11 Biennium Operating Budget and NEW five-year Capital Improvement Plan (CIP) for Council’s consideration. 2

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  5. Revenues– Diversified and stable; fees and changes set to cover expense of attendant services; restricted use of one-time revenues; conservative estimation Budget– Balanced; restricted use of fund balance; quarterly monitoring; multi-year forecast Fund Balance– Policy minimum of 15% Financial Policies (Adopted by Council September 2009) 6

  6. Debt Management Principles and Administration–Debt capacity and affordability limits • Debt Service to General Fund revenues <= 12% • Debt Service to Market Value <= 4% • 10 year payout ration >= 50% Utility Fund Debt– Annual water and sewer rates set to generate sufficient revenues to meet bond covenants and capital replacement Refunding Bonds– On-going monitoring with a minimum of 3% Net Present Value (NPV) savings Financial Policies (continued) (Adopted by Council September 2009) 7

  7. Capital Improvement Program Guidelines– Five-Year Capital Improvement with enhanced pay-as-you go funding –Adequate maintenance of physical assets to protect investment Other Post Employment Benefits (OPEB) Funding• Set aside resources to pre-fund OPEB liabilities on an actuarially-sound basis over time Special Revenue/Enterprise Funds– Avoid designation of discretionary funds in order to maintain maximum financial flexibility Independent Audit–Conduct an annual independent audit Financial Policies (continued) (Adopted by Council September 2009) 8

  8. March 2009—rating analysts outlined certain expectations of the City to sustain ratings: No additional debt restructuring for cash flow benefits Conservative revenue projections; structurally balanced budget with recurring revenues Reduction of discretionary expenditures and strong expenditure controls Restoration of general fund undesignated unreserved fund balance to 15% of revenues Continued progress in eliminating Risk Management Fund deficit Continued compliance with 12% debt-service-to-revenues policy Credit Rating Agencies 9

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  12. Submit a balanced budget for each year of the FY10/11 biennium without use of fund balance No consideration of equalization tax rate in response to declining real estate assessed values Continue to manage FY10 revenue shortfall without using fund balance through tight expenditure controls Include public safety retention pay plan and anniversary increase as first priority Budget Assumptions 13

  13. Fund Courts Complex and Capital Reserve to maintain policy compliance Include level funding for education among priorities Continue $3M funding for Tax Relief for Elderlyand Disabled No new capital projects for the biennium except Council’s reprogramming of Holiday Inn to Admiral’s Landing Seawall and Crawford Pkwy. bulkhead projects Budget Assumptions (continued) 14

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  16. FY2010 FY2011 Change $4.24/1,000 gallons Residential Water Charges $4.03/1,000 gallons $0.21 $3.15/1,000 gallons $3.31/1,000 gallons $0.16 Residential Sewer Charges Stormwater Fees $6.50/month per ERU $7.00/month per ERU $0.50 • Cost of Service Highlights Proposed FY11 rate increases set at 5.2%, per Council consensusduring utility plan of finance discussions with Financial Advisors 17

  17. Historical Practice (<FY08) Revised Approach Collections projected at 99-100% Projections set at usual and customary 96% collection rate Silo projections from Finance Collaboration with Assessor, Treasurer & Commissioner 6% vacancy savings 4.4% vacancy savings Tax Relief netted against revenue Tax Relief reflected as expenditure; revenues projected as gross amount Departments budgeted in silos Collaboration among and between departments to create efficiencies and savings Biennium Budgeting Methodology 18

  18. Implement Public Safety Retention Pay Plan andAnniversary step increase Continued level funding of Portsmouth Public Schools Redeployment of Solid Waste Fund workforce fromweekly to monthly bulk waste removal and add more street sweeping services Funding of capital reserve for new courts facilityat $1.8M $834,310 golf fund subsidy, down from $1.2M No equalization tax rate or increase tax rate Total General Fund Budget = $218,361,390 Total Budget = $547,938,307 FY11 Budget Highlights 19

  19. No furloughs No unpaid holidays No layoffs No elimination of vacant positions Birthday Holiday added Fund public safety retention pay and anniversary step increase FY11 PROPOSED BUDGETInvestment in Employees 20

  20. Remaining FY10 Calendar March 30 City Manager’s FY11 Budget Presentation* April 6 Public Work Session–FY11 Budget April 8 State of the City Luncheon April 12 Public Work Session–Five-Year CIP (FY11–FY15) April 13 Public Work Session – FY11 Budget and CIP Public Hearing • 7 p.m. April 26 Public Work Session–Economic Development April 27 Public Work Session Regular City Council Meeting May 10 Public Work Session May 11 Regular City Council Meeting – FY11 Budget and CIP Public Hearing • 7 p.m. Budget Adoption 21

  21. Remaining FY10 Calendar May 17 Community Meeting: I.C. Norcom High School May 24 Public Work Session–Economic Development May 25 Public Work Session Regular City Council Meeting May 31 Memorial Day Parade June 7 Public Work Session June 8 Public Work Session Regular City Council Meeting June 21 Public Work Session–Economic Development June 22 Public Work Session Regular City Council Meeting 22

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