Agenda 02/13/2007 - Laserfiche WebLink

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M Martinsville City Council Agenda Summary Meeting Date: Item No: Department: Issue: February 13, 2007 3. City Manager Reconsider capital expenditures frozen and other discretionary expense reductions included in Council's action of December 21, 2006. Summary: The budget process has begun. As such, the following is background information on the Budget process for FY 08. The budget will be more difficult this year than in previous years. But rest assured we will present a balanced budget. The following guidelines will be utilized in the development of this year's budget. Of course the council can provide additional instructions and/ or guidelines at any time. FY 08 Budget Guidelines: · Develop a Budget that provides the means to accomplish a significant portion of the Cities "Goals & Initiatives". · Maintain the current Real Estate tax rate. (Recognizing that the biannual re-assessment conducted by the Commissioner of the Revenue will provide increased funding for the General Fund) · Adequately Fund Schools. · Adjust utility rates were appropriate. o Small CPI" increases annually have been suggested. o Recover Electric wholesale rate discount from FY 07 Budget · A cost of living adjustment for all employees at least equal to the State COLA. · Market adjustment for those positions that are at 85% of market or less. · Fund Merit plan if possible. · Update Five Year CIP budget · Manage the current budget. Manage the existing budget based on the Budget Projections in Attachment A. This will be our guide to ensure an adequate year-end fund balance for FY07 and a reduction in the use of fund balance in FY08. The plan provides for operational reductions with an annual savings of $1,616,305 for both FY07 and FY08. A reduction in contributions to outside agencies, the reductions will range from $306,920 to $613,840 depending on final level of funding. We anticipate growth in revenues totaling in amounts ranging from a low of$837,613 to amounts greater than $1,700,000. Finally, council members have expressed a desire to recover the discounting of the electric wholesale rate adjustment in FY07 budget. The City used almost a $1,000,000 of existing fund balance to subsidize the retail electric rates in the FY 07 budget. A reasonable approach would be to spread the recovered cost over several months with and adjustment of 3% in March followed with an additional 3% increase in September. These adjustments will provide $3,085,338 for use in the FY 08 Budget.