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Home My WebLink About2004 08 30 Other 1 083004_ COMM _ Special_Meeting_Item _1_ Budget COMMISSION AGENDA ITEM 1 Consent Informational . Public Hearing Regular August 30. 2004 SPECIAL MEETING ~/ V Mgr.. / Dept. Authorization REQUEST: City Manager requesting the Commission to finalize its consensus relative to outstanding budget issues. PURPOSE: This agenda item is needed for the Commission to provide consensus on remaining budget issues which will be incorporated into the tentative budget that will be submitted to the Commission at its September 13,2004 meeting. CONSIDERATIONS: All funds are currently balanced without tax or fee increases. The budget restoration page contains requests the Conmlission may want to consider adding back to the budget and the related new tax implications, FUNDING: N/A RECOMMENDATION: It is recommended that the Commission consider and provide staff with a consensus relative to the attached budget issues. ATTACHMENTS: 1. Budget Issues 2. Budget Questions 3. Budget Restoration Page COMMISSION ACTION: 081604 Workshop_Item_1 Attachment I Budget Issues Page I of4 ,-'"", ! J BUDGET ISSUES 1. Pension System Enhancements Based upon the discussion to date I am recommending a plan for implementing pension plan enhancements that balance the various comments that have been provided. This plan involves a four-year program of implementing the additional 1 % retro-active benefit and reduction of the amortization period to at minimum IS-years. Additional 1 % Retro-Active Benefits Increasing the retro benefit from 2% to 3% can be accomplished in one of two ways as follows: A Capping merit increases in FY05 and FY06 at 3% and utilizing the 1% merit savings in each year to fund the 2% in new contributions required to fund the benefit. In this concept the additional 1 % would flow directly from the City to the Pension Trust rather than flowing through employee salaries. f) Employee City Total Merit Pay Contribution Contribution Contribution FY03 4 3 8 11 FY04 4 3 8 11 FY05 3 3 9 12 FY06 3 3 10 13 FY07 4 3 10 13 FY08 4 3 10 13 FY09 4 3 10 13 B Capping merit raises in FY05 and FY06 at 4% and deducting 1 % from employee salaries in the form of pension deductions from 3% to 4%. E~ployee City Total Merit Pay Contribution Contribution Contribution FY03 4 3 8 11 FY04 4 3 8 11 FY05 4 4 8 12 FY06 4 5 8 13 FY07 4 5 8 13 FY08 4 5 8 13 FY09 4 5 8 13 081604 Workshop_Item_l Attachment 1 Budget Issues Page 2 of 4 ,/", ) Reduction of Amortization Period It is recommended that the City contribution be increased 12% in FY05, FY06, FY07, and FY08 for a total of 2% to reduce the amortization period from 30 years to 15 years. Additionally, the Commission should consider the Option of continuing to add Y2% per year until the amortization period is reduced to O. The Y2% for FY05 is included in the budget. Effective Date Implementation of the extra benefit could happen in two ways as follows: A. Employees receiving the additional benefit would be eligible to retire at anytime during the four-year period. However, they would receive only a pro-rata share based upon time served. For example; if an employee served 2 of the 4 years, the employee would receive 50% of the additional 1 % benefit; or /" ". .. ) B. Employees receiving the additional benefit would not be eligible to retire before their anniversary date in FY09 unless certified medically disqualified from employment. In the case of a medically required retirement the employee would receive a prorated portion of the benefit. The purpose of this recommended policy is to prevent multiple retirements prior to the new contributions being fully implemented. Assuming the Commission chose Option "A" above for funding the increased benefit as well as the reduction of amortization period, the implementations would happen as follows: Employee City Total Merit Pay Contribution Contribution Contribution FY03 4 3 8 11 FY04 4 3 8 11 FY05 3 3 9-1/2 12-1/2 FY06 3 3 11 14 FY07 4 3 11-1/2 14-112 FY08 4 3 12 15 FY09 4 3 12 15 081604 Workshop_Item_l Attachment 1 Budget Issues Page 3 of4 /...-..... ) Assuming the Commission chose Option lOB" above for the funding of the increased benefit as well as the reduction of amortization period, the implementation would happen as follows: Employee City Total Merit Pay Contribution Contribution Contribution FY03 4 3 8 11 FY04 4 3 8 11 FY05 4 4 8-112 12-112 FY06 4 5 9 14 FY07 4 5 9-1/2 14-1/2 FY08 4 5 10 15 FY09 4 5 10 15 2. Joint City/School Recreational Facilitv This matter will be coming before the Commission at the September 24, 2004 meeting and has no budget implications atthis time, ~-) 3. Urban Beautification Proe:ram It is recommended that the Commission give consideration to funding this program with new taxation as indicated on the attached Budget Restoration page. 4. Phase II Town Center We still have riot received information from James Doran Company needed to address potential funding assistance for Phase II of the Town Center. This matter will have to be addressed after adoption of the budget. 5. Reproe:rammine: 1C Local Option Sales Tax This item cannot be addressed lUltil the requirements of Phase II of the Town Center are better understood. 6. ADA Transportation Payment The Commission has previously decided not to make this payment to the COlUlty but has agreed to meet with the COlUlty this coming Tuesday, August 17, 2004, 6:30PM at City Hall to discuss it further. 081604 Workshop_Item_1 Attachment 1 Budget Issues Page 4 of 4 r------- } 7. City Hall Expansion There are numerous methods of providing interim financing for the addition to City Hall. I would recommend the simplest method to be an inter fund loan arrangement with the Solid Waste Fund. Again, this loan would be for a period of time for impact fees to grow to a sufficient amount to payoff the loan. Due to cost increases in construction resulting from current market conditions caused by the "China Factor," the cost of the new addition has been raised from $500,000 to $600,000. It will take as estimated I5-months to complete the project from this date. I would suggest that the inter fund loan be authorized by Resolution in order to formalize the transaction. 8. Solid Water Fund - Proforma Analysis Analysis Sheet "A" provides a comparison of the original proforma with the revised proforma. Analysis Sheet "B" provides a detailed analysis of the original proforma. Analysis Sheet "e" provides an analysis of the variance between the original proforma t' :) and the revised proforma. As shown on Analysis Sheet "A" the actual ending fund balance for the nine-year contract is expected to exceed the proforma estimate of $101,735 by $797,954 due to larger than expected customer growth and the failure of F.R.S. to request C.P.I. increases or to earn performance bonuses provided for in the contract. The $60,000 dispute regarding solid waste collection at City Hall is being negotiated at this time (proforma attached). 081604_ Worshop_Item_I_Attachment_2 Budget Questions BUDGET QUESTIONS 1. What maintenance contracts exist in the Finance Department? General: Time Value 5 amortization software ($100), BMI asset scanner ($400) Utility Billing: NCF check encoder ($1,515), Datamatic handhelds ($3,836), Basetek mail stuffer ($353), Basetek mail machine ($1,625). 2. What do the fund balances represent in the Debt Service Funds? Fund balances in the funds 182, 206, and 215 represent monies due on October 1 st, balances in Fund 225 monies for January 1 payment and balances in Fund 230 monies for December 1 payment. 3. Are any fess charged to offset field maintenance or personnel costs against cost of programs? No, program fees only cover program expenses, facility and equipment rental, promotional literature, umpires, referees, licensing and certification of counselors. 4. In fund 140, are signal projects 30006 and 30022 the same project? No, the name of project #30006 was changed to SR 434/Central Winds Parkway signal. 5. Is the 2004 Line of Credit a revolving line? No, per David Moore (financial Advisor) and Mike Williams (Bond Counsel). 6. In fund 305 (1999 Construction Fund), is there a FRDAP grant that will reduce the trail cost of $870,000? No, however, parks and Recreation plans to apply for a future FRDAP Grant for $200,000 toward Magnolia Park for 2005 (per Chuck Pula). 7. A question arose as to Arbor Fund semantics. The Arbor Fund was created in FY 200 I as a way to segregate funds in order to maintain a level of plantings within the City of Winter Springs. Tree bank revenues are identified in Chapter 5 of the Code of Ordinances as funds paid by developers/homeowners as an alternative to replacing trees. Monies collected for the tree bank are used for enhancement and maintenance. of trees on public land and are placed in the Arbor Fund. This fund has other revenue streams such as arbor permit fees and licenses which are committed to the same purpose. 081604_ Worshop_Item_l_Attachment_2 Budget Questions 8. What are Industry Standards regarding reserves in Enterprise Fund? There are no industry standards as such. However, a prudent policy is made up of three factors. 1. Bond Covenants: An Enterprise Fund must. maintain sufficient cash flows to satisfy legal coverage requirements on Bond Issues. Winter Springs Utility is required to satisfy a 1.2 debt coverage ratio and restricted reserve funds and insurance specific to each bond issue. 2. Unrestricted Cash Operating Reserves: This is business decision. City policy mandates at minimum 90-day operating reserve and a 5% renewal and replacement reserve. 3. Debt Philosophy: This is a business decision deciding the levels of debt our city is willing to accept in the alternative to paying for capital improvements in cash. The City capital. improvements plan provides for a level debt flow for future years with other improvements funded from cash reserves. The City currently has sufficient cash reserves to pay for Capital Improvements in our CIP from cash. All of these issues were reviewed in the Rate Study that was adopted by the Commission in 2001. A new rate study should be performed in 2006. ) Solidwaste - Sheet A SOliD WASTE 9 YEAR ACTUAL CURRENT CUSTOlIER RATE AT 13.68 (- ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL f:B6.ji:;GT~9' .etl9J~CKQc PROJECTED PROFORMA YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 6 YEAR 9 TOTALS TOTALS VARIANCE 10/1196- 10/1/97. 10/1/96- 10/1199- 1010110(). 10101101. 10101102. 10101103. 10101104. Tll10ugh Through 9130197 gl3Olll8 9130199 91301OO 9130/01 9130102 9130103 9130104 9130105 MllJ05 9130105 FAV(UNFAV) FUND SUMMARY REVENUES 1.3 I 0.328 1,365.471 1.423.585 1,502,506 1.416,513 1,549.073 1,724.358 1.641.200 1,660.000 13,595.034 13,444.704 :--'-11;;),:>:1:1'1 EXPENSES TO BFVFRS 1.200.486 1,155.922 1,197,026 1.162.306 1.357.125 1.316.051 1.376.156 1.432.200 1,485.430 lI,6ll2. 702 12,409.856'-"" "'7.'1 INTEREST INCOME 10,974 10,000 10.000 30.074 49,467 (185131 EXPENSES OTHER 2.880 0 0 7,180 0 0 1,168 24,808 15.000 50.836 . (50,836) TRANSFER TO CITY 53.481 98,400 98.400 102.000 108,000 108.000 183.000 120.000 121.500 852781 982,800 (9.981) SURPlUS (DEFICIT) 53.481 111,149 128,159 231,020 -48.6' 2 125.023 175,007 74,392 48,070 899.689 101,735 797,954 BEGIN YR FUND BAl. 0 53,481 164,630 292,789 523.809 477,197 602,220 777,227 851.619 END YR FUtlO BAL 53.481 164.630 292.789 523,809 477,197 602,220 m,227 851,619 899.689 ~ MO CUST RATE $1368 51368 $13.68 51368 $13.68 513.68 51368 513.68 $1368 X CUST ACCTS 7,982 8.318 8.672 9,153 8.641 9,436 10,504 9,998 10,112 MONTHlY REVENUE $109,194 5113.7811 $118.832 5125,209 $118,209 5129,089 5143,696 $136,767 $138,333 X MONTHS 12 12 12 12 12 12 12 12 12 ANNUAL BILL 51,310,328 $1,365,471 $1,423,585 51,502.506 51,416,513 $1,549,073 51,724,358 51,64',200 51,660,000 INT EARNED $0 $0 50 50 50 so 510,974 510.000 510.000 TOTAL REV. 51,310,328 51.365,471 51,423.585 51,502.508 51,416,513 51,549,073 51.735,331 51,651.200 51,670,000 513,626,007 ~ X MO. COLLECT RATE 57.55 57.55 57.55 57.55 57.55 $7.55 5755 X ANNUAl C,P.!. INCREASE CP,I, INCREASE AMOUNT ADJ, MO. COlLECT RATE 57.55 57.55 57,55 57.55 57.55 5755 MO, PASSTHROUGH H1Q H1Q ~ ~ H.llZ H.llZ PAY TO BFIIFRS PER CUSTOMER $11.65 511.65 $11.65 511.65 $11.62 51'.62 $11.71 $11.94 51223 AVERAGE MONTliL Y P'fMT TO BFflFRS 5100.041 596,327 599.752 $96,659 $113,094 5109.671 5114.680 5119,350 5123.768 TOTAL ANNUAL PVMT TO BFIIFRS 51.200,486 51,155,922 51,197,026 51,162,306 51,357,125 51,316,051 51,376,156 51,432,200 51.465.430 511,662.702 MD. ADM COST 50.65 50.65 SO.65 5065 SO.65 50.65 SO.65 50.65 50.65 MO. FRANCHISE FEE ~ ~ ~ ~ ~ ~ ~ ~ ~ PAY TO CITY PER CUSTO~ER 5100 $1.00 5100 51,00 $1,00 $1.00 $100 $1.00 $1.00 AVERAGE MONTliL Y PYMT TO CITY 54,457 58,200 $8,200 $8,500 $9,000 59,000 $15,250 510,000 $10,125 TOT At ANNUAL PYMT TO CITY 553,481 598.400 598.400 5102,000 $108.000 $108.000 $183.000 $ 120.000 $12'.500 TOTAL MO. COST PER CUSTOMER 512.65 $1265 $1265 $12.65 $12.62 $12.62 512.71 512.94 $13.23 MONTHLY EXPE NSES $104,497 5'04,527 5107,952 5105.359 $122,094 $118.671 5129,930 5129.350 5133,911 SUBTOTALANNUALEXP 51.253.967 51.254.322 51,295.426 51,264.306 51,465.125 51.424.051 $1.559.156 51.552.200 51,606,930 CUSTOMER ACCTS 8,$87 8,268 8,562 8,314 9,733 9,438 9.793 10.000 10,126 MONTHS 12 12 12 12 12 12 12 12 12 CONSULTANT EXPENSE $2.880 $0 so 57,180 so so so 52,300 50 512,360 ANNUAL PERFORM BONUS 50 so so so $0 so $0 50 50 ANNUAL PERFORM SURVEY so so so so so so so so 50 TOTAL ANNUAL COST 51,256.847 51.264.322 51.295.426 $1.271.466 51.465.125 $1.424,051 51.559,156 51.554.500 $1,606,930 ADMINISTRATIVE COST INCOME 566,980 564,494 $66.787 564,850 575,915 573,617 576,388 576,000 $78.980 5646.010 FRANCHISE FEE INCOME $36,066 534,727 535,962 534.919 540.877 539,640 541.132 $42.000 542.528 5347,851 TOTAL INCOME TO CITY . BUD& SiB REC 5100,046 599,221 5102,749 599,769 $116,792 5113,257 5117,520 5120,000 5121,508 $993,881 TOTAL INCOME TO CITY. ACTUALLY REC 553,481 598,400 598,400 5102.000 5108.000 5108,000 5183.000 $120.000 5121,500 Im,7Bl INCOME DUE CITY 549,565 5821 54,349 (52.231 ) 58,792 $5,257 (565,480) 50 58 ($I.~O) U:\ODcsIFinancial-01l1er\SOUDWASTEPROFORMASOLIDWASTEPROFORMA '~"\ '\ , '-' '*w;;-:.;o/ Solidwaste - Sheet B SOLID WASTE 9 YEAR PROFORMA CURRENT CUSTOMER RATE AT 13.68 ANNUAL INCREASE OF 300 CUSTOMERS PER YEAR 2.5% C.P.!. INCREASE PER YEAR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 TOTAL 3/1/97-2128/98 3/1198-2128/99 3/1/99-2128/00 3/1100-2128/01 3/1101-2128/02 3/1102-2128/03 3/1/03-2128/04 3/1/04-2128/05 3/1/05-2128/06 FUND SUMMARY REVENUES $1,301,352 $1,350,824 $1,400,308 $1,449,803 $1,499,311 $1,548,832 $1,598.366 $1,647,915 $1,697,479 $13,494,1'91 EXPENSES $1,211 ,220 $1,275,456 $1,341,060 $1,411,588 $1,481,056 $1 ,553,092 $1,629,140 $1,706,600 $1,783,244 $13,392,456 . SURPLUS (DEFICIT) $90,132 $75,368 $59,248 $38,215 $18,255 ($4,260) ($30.774) ($58,685) ($85,765) $101,735 BEGIN YR FUND BAL. 0 $90,132 $165,500 $224,748 $262,964 $281 ,219 $276,959 $246,185 $187,500 $0 END YR FUND BAL. $90,132 $165,500 $224,748 $262,964 $281,219 $276,959 $246,185 $187,500 $101,735 $101,735 "Includes admin/franchise REVENUES MO. CUST RATE $13.68 $13.68 $13.68 $13.68 $13.68 $13.68 $13.68 $13.68 $13.68 X CUST ACCTS 7,900 8,200 8,500 8,800 9,100 9,400 9,700 10,000 10,300 MONTHLY REVENUE $108,072 $112,176 $116,280 $120,384 $124,488 $128,592 $132,696 $136,800 $140,904 $1,120,392 X MONTHS 12 12 12 12 12 12 12 12 12 12 ANNUAL BILL $1,296,864 $1,346,112 $1,395,360 $1,444,608 $1,493,856 $1,543,104 $1,592,352 $1.641,600 $1,690,848 $13,444,704 INT EARNED $4,488 $4,712 $4,948 $5,195 $5,455 $5,728 . $6,014 $6,315 $6,631 $49,487 TOTAL REV. $1,301,352 $1,350,824 $1,400,308 $1,449,803 $1,499,311 $1,548,832 $1,598,366 $1,647,915 $1,697,479 $13,494,191 EXPENSES X MO. COLLECT RATE $7.55 $7.55 $7.74 $7.93 $8.13 $8.33 $8.54 $8.76 $8.97 X ANNUAL C.P.!. INCREASE 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% C.P.I. INCREASE AMOUNT $0.19 $0.19 $0.20 $0.20 $0.21 $0.21 $0.22 $0.22 ADJ. MO. COLLECT RATE $7.55 $7.74 $7.93 $8.13 $8.33 $8.54 $8.75 $8.98 $9.19 MO. PASSTHROUGH $4.10 $4.10 $4.10 $4.10 $4.10 $4.10 $4.10 $4,10 $4.10 MO. ADM. COST $0.65 $0.65 $0.65 $0.65 $0.65 $0.65 $0.65 $0.65 $0.65 MO. FRANCHISE FEE $0.35 $0.35 $0.35 $0.35 $0.35 $0.35 $0.35 $0.35 $0.35 TOTAL MO. EXPENSE $12.65 $12.84 $13.03 $13.23 $13.43 $13.64 $13.85 $14.08 $14.29 X CUSTOMER ACCTS. 7,900 8,200 8,500 8,800 9,100 9,400 9,700 10,000 10,300 MONTHLY EXPENSES $99,935 $105,288 $110,755 $116,424 $122,213 $128,216 $134,345 $140,800 $147,187 $1,105,163 X MONTHS 12 12 12 12 12 12 12 12 12 12 SUBTOTAL ANNUAL EXP. $1,199,220 $1,263,456 $1,329,060 $1,397,088 $1,466,556 $1,538,592 $1,612,140 $1,689,600 $1,766,244 $13,261,956 ANNUAL PERFORM. BONUS $10,000 $10,000 $10,000 $12,500 $12,500 $12,500 $15,000 $15,000 $15,000 $112,500 ANNUAL PERFORM. SURVEY $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $18,000 TOTAL ANNUAL COST $1,211,220 $1.275,456 $1,341,060 $1,411,588 $1,481,056 $1,553,092 $1,629,140 $1,706,600 $1,783,244 $13,392,456 ADMINISTRATIVE COST INCOME $61,620 $63,960 $66,300 $68.640 $70,980 $73,320 $75,660 $78,000 $80,340 $638,820 FRANCHISE FEE INCOME $33,180 $34,440 $35,700 $36,960 $38,220 $39,480 $40,740 $42,000 $43,260 $343,980 TOTAL INCOME TO CITY $94,800 $98,400 $102,000 $105,600 $109,200 $112,800 $116,400 $120,000 $123,600 $982,800 U:\Docs\Financial-Other\SOLIDWASTEPROFORMA ) Solidwaste - Sheet C 0' Solid Waste Fund Variance Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year9 Total Proforma Rate $11.65 $11.84 $12.03 $12.23 $12.43 $12.64 $12.85 $13.08 $13.29 Accounts 7,900 8,200 8,500 8,800 9,100 9,400 9.700 10.000 10.300 1,104,420 1,165,056 1,227.060 1,291,488 1.357,356 1.425.792 1.495,740 1,569.600 1,642.644 12.279.156 Actual Projected proJe<:ted Rate $11.65 $11.65 $11.65 $11.65 $11.62 $11.62 $11.71 $11.94 $12.23 Accounts 8,587 8,268 8,562 8,314 9,733 9,438 9,793 10,000 10,126 1.200.463 1.155,866 1.196,968 1,162,297 1,357,170 1,316,035 1,376,112 1,432,800 1,486,092 11.683,802 ~ Rate $0.00 $0.19 $0.38 $0.58 $0.81 $1.02 $1.14 $1.14 $1.06 Accounts 687 68 62 (486) 633 38 93 0 (174) [.EXP~NSE \I~GE: ,,~,;;j Dollar Impact of Rate Variance Rate Variance x 12 $0.00 $2.28 $4.56 $6.96 $9.72 $12.24 $13.68 $13.68 $12.72 Proforma Accounts 7,900 8,200 8,500 8,800 9,100 9,400 9,700 10,000 10,300 0 18,696 38,760 61.248 88.452 115,056 132,696 136,800 131,016 722,724 Dollar Impact of Account Variance Account Variance 687 68 62 (486) 633 38 93 0 (174) Actual Rate x 12 $139.80 $139.80 $139.80 $139.80 $139.44 $139.44 $140.52 $143.28 $146.76 less: 96.043 9,506 8,668 (67,943) 88,266 5,299 13,068 0 (25,536) 127.370 595,354 112,500 Bonus 18,000 Survey 725.8541 [REVENUE VARIANCE: Account Variance 687 68 62 (486) 633 38 93 0 (174) 921 Revenue Rate $13.68 $13.68 $13.68 $13.68 $13.68 $13.68 $13.68 $13.68 $13.68 Variance 112,778 11,163 10.178 (79.7821 103.913 6.238 15,267 0 (28,564) L _n15t1~tJ (96,0431 9.190 30,092 129,191 186 109.757 119,628 136,800 156.552 595.354 (96,043) 9.190 30,092 129.191 186 109.757 119,628 136,800 156,552 595,354 U:\Docs\Financial-Other\SOLlDWASTEPROFORMA ~\ , } CI"_JF WINTER SPRINGS "-") --.../ FY '05 BUDGET WORKSHOP COMMISSION AL TERNA TIVES WORKSHEET .l' AMOUNT MILLAGE MILLAGE PER PRELIMINARY BUDGET 4.3000 ri 1- Very Important: Urban Beautification Maint Worker $30 000 0.0211 Urban Beautification Pro ram $15000 0.0105 2- Important: Parks & Rec - rounds maintenance worker $29 080 0.0204 Parks & Rec - overtime $9,233 0.0065 3- Nice but not Essential: $38 362 0.0269 $46 022 0.0323 Enhanced Health Insurance 0 tion $13 400 0.0094 $1 200 0.0008 $1 300 0.0009 General Services - 0 eratin $1 300 0.0009 Information Services - 0 eratln $3 300 0.0023 Public Works - Streetli htin $10000 0.0070 Police - 0 eratin $26 000 0.0182 Fire - 0 eratin $18350 0.0129 General Government - ADA Para Transit $81 728 0.0574 $3 000 0.0021 Total $327,275 4.5296