Budget issuesHI Jane-
I had the 2007, 2008, and 2009 budgets reviewed by an accountant on my
task force and put into a format that is short and decipherable for my
non-numbers mind. I will provide you with the spreadsheets today. A
few things that were noted are:
1) only 10% of total debt is reserved for debt service and this amount
barely covers the interest payments so the principal isn't being brought
down;
2) from 2007-2009 the city doubled its debt load but there was not
cocomitent increase in the budget for debt service;
3) the city increased its assets by $20million in two years that it now
has to maintain (I assume that was for the sewage treatment plant)
4) we saw a public safety increase of over $1 million in 3 years;
5) 12% of our total revenues goes to pay for employees
6) interest revenue in 2009 is 50% of what it was in 2007;
7) over the three year period we added over 21 miles of water main paid
by developers that we have maintenance responsibility for, and 9.3 miles
of sewer line;
8) in the sewer budget, we spent $80k in contracted services to earn
$40k in revenue;
9) the City has consistently lost approximately $100k per year by
operation of the Airport;
10) the City's expenditures have largely been the same, but income has
decreased;
11) the only propriety fund department that has been able to maintain a
balanced budget without a loss is Garbage.
I wish I had this information prior to going into our work sessions, and
I regret I was not able to get it to you sooner. Obviously, with our
debt service for multiple obligations looming large (including OSS), I
am quite concerned about moving forward and our ability to eliminate
debt- not simply service the interest payments. I am not panicked, but
I am deeply concerned, and I know that you are too (a fact which has
been reflected in your budget proposals). I would like to see some
benchmarks for the budget come to fruition, until we can get the debt
service under better control. I would like your review and opinion on
the following benchmarks:
i.
Public Safety not to exceed 30% of total budget
ii. Debt
Service (including lease payments) < 6% of revenue
iii. No
increase in personnel expenses
I believe your budget proposal has implemented (iii). My concern is
that a further reduction in personnel is
necesary, and if there is a department that can be minimized, the time
to do it is now. I would also like each
department to look at a 10% reduction in expenses - not that it would be
implemented, but to have each
department head provide a break down of how they would, if forced, cut
their budgets by 10%. Again, this is not to
say that I would promote an across the board 10% cut, as I recognize
there are departments that are doing well,
are already very lean on money, and they all cannot be lumped together.
I will get the spreadsheets to you in short order. If we could have the
proposed 2010 numbers plugged into this format, that would help me
review the same and make a better informed decision.
Thanks!
Tammi