FY 2011-2012 Budget Briefing

1. FY 2011-2012 Budget Briefing General Fund Operating Budget and Fees & Charges

2. Budget Process Calendar • March 22 Budget Briefing • General Fund Operating Budget • Fees and Charges • April 12 Budget Briefing • Enterprise Funds • Capital Improvement Program • Outside Agencies • April 26 • Proposed budget presentation at City Council meeting • May 10 – Budget Public Hearing • May 24 – Budget Adoption

3. FY 11-12 Budget Outlook • Revenue assumptions • Overall slight decrease in revenues • State revenue decrease for Transit operations • Decreases in investment earnings and permit revenue • No property tax increase • No fund balance appropriation • Expenditure assumptions • Continuation of core services • Savings strategies with a focus on workload metrics • Expenditure increases expected for fuel, law enforcement, LGERS • No change in employee compensation and City health care contribution

4. Compensation & Benefits

5. Compensation & Benefits • Compensation to remain at current levels during FY 11-12. • Blue Ribbon Task Force recommendations presented to City Council 2/22. • Operate a sustainable Health Care Program that provides access, quality and cost-effective medical care • General Fund contribution to health care fund remain flat • Necessitates increases to premiums, co-payments and co-insurance. • Expansion of Employee Health Clinic • Implementation of Wellness Program with incentives • Consideration of continuation of retiree health care coverage for future hires

6. Medical Plan Design Changes • Plan Design Changes • Wellness program implementation with incentive to participate • Three plan options (HRA, Basic & Enhanced) • Increase in employee premium costs on average of 30% • Increase in member out of pocket costs (co-payments & deductibles) • Preventive services covered at 100% • Expanded capabilities of Health Services with no fee for service • Domestic Partner Benefits extended • Wellness Program Participation • Health Risk Assessment and Biometric screenings • Non-tobacco affidavit or commit to participate in cessation program • Participate in initial one-on-one meeting with Health Services staff and regular follow up to ensure compliance with recommendations.

7. Domestic Partner Benefits • Available during open enrollment for FY 11-12 plan year. • Anticipated cost impact of around 1%. • Prepared to offer for same-sex domestic partners as directed by City Council. • Registration as domestic partners with City registry will be required to verify eligibility. • Impact of IRS regulations • Employee paid premiums for coverage post-tax • Income tax implications for value of employer subsidy for benefit • Restrictions on HRA and Flexible Spending reimbursements

8. Service Delivery

9. Brush and Leaf Collection • Brush Collection • Return to twice per month brush collection • Financial Impact = $125,000 in expenditures • Leaf Collection • Collect only bagged leaves • Twice per month collection during leaf season • Bags can be provided free of charge to households • Improves efficiency of collection • Positive impact on street sweeping and water quality • Financial Impact = $83,000 in cost savings

10. Solid Waste and Recycling Waste Stream Reduction Program • Changes the way we collect solid waste and pay for it consistent with recommendations in the Sustainability Management Plan. • Introduces variable-sized garbage cans: 65-gallon and 95-gallon. • Introduces single stream recycling in 95-gallon carts. • Cost of program enhancements is approximately $1 million; proposed solid waste fee structure designed to cover costs.

11. Solid Waste Fee Proposal

12. Fees & Charges

13. Fees & Charges • Fire Inspection fees in the ETJ • Brings service up to full cost recovery by adding a 20% surcharge to inspections in the ETJ • $25,000 anticipated in revenue • Parking garage rates • Civic Center garage • Hourly: 50 cents to 75 cents • Monthly: $70 to $80 • Monthly discounted rates: $35 to $40 • Rankin and Wall Street garage special event rates • Special Events: $6 to $7 • Downtown resident monthly parking discount: 60%

14. Fees & Charges • Special Event discount rate • In FY 10-11, City Council approved a 75% discount on permit fees for non-profits holding special events. • To date, 49 events have qualified. • Value of fees waived is $7,180. • Some concerns have been raised about the use of space. • Staff is recommending a cap to the fee waiver at six events per year per group. • Domestic Partner Registry • Fee

15. Fees & Charges: Water Rate Study Goals of the Water Rate Study • Generate enough revenue to operate water utility • Make rate structure equitable • Protect the residential rate payer • Protect small businesses • Phase in any rate increases to minimize impact over time

16. Fees & Charges: Water Rates Assumptions • There is enough revenue next year to avoid an across the board rate increase • There is not enough revenue gained with small increases in Multifamily and Small and Large Commercial rates to create a reduction in Residential rates • Assume reduced growth of indirect costs (3% rather than 5%) and possible adjustment of Sullivan Act transfer

17. Fees & Charges: Water Rates Proposals for FY 2011-2012 • Hold Residential rate at current level • Adjust irrigation rates to promote conservation (1.2X Residential?) • Adjust Multifamily from 18% discount to 15% discount • Adjust Commercial (small) from 16% discount to 15% discount • Adjust Commercial (large) from 63% discount to 60% discount Outcomes • Brings Multifamily and small Commercial to 15% discount • Sooner action to balance rates will delay impact on Residential rates • Small changes over time (5 years) will allow for smaller increments

18. Next Steps

19. Schedule • City Council April 12 Budget Review • Enterprise Funds • Capital Improvement Program • Outside Agencies Update • April 26 • Proposed budget presentation at City Council meeting • May 10 – Budget Public Hearing • May 24 – Budget Adoption