04/27/2007
WORK SESSION AGENDA
Council Chambers - City Hall
4/27/2007 - 8:30 AM
1. Council Discussion Items
1.1 Discussion of Budget Task Force Recommendations
~ Attachments
1.2 Discussion of City Manager's Proposals for Budget Reductions
I@l Attachments
1.3 Review of Updated Five- Year Forecast
I@l Attachments
2. Adjourn
Meeting Date: 4/27/2007
Work Session
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Discussion of Budget Task Force Recommendations
SUMMARY:
Review Approval: 1) Clerk
Cover Memo
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Attachment number 1
Page 1 of 11
BUDGET TASK FORCE RECOMMENDATIONS
& Staff Comments
April 2007
1) The City Council consider a self- imposed cap on annual General Fund budgeted
expenditures to the CPI plus 1 %.
2) The City maintain its eXIstmg structures, refurbishing or replacing them as
necessary, which could lower maintenance and insurance costs and that the City
limit growth of additional facilities and parks so that no additional FTE's are
needed. Specifically, the Budget Task Force recommends that the proposed
Senior Center facility not be constructed, instead using existing facilities for
senior activities.
3) The City control the cost of employee benefits by:
a. Limit increases to the 3% level of revenue increases (based on the Save Our
Homes cap);
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Budget Task Force Report
Staff Recommendations
b. Freeze or cap the City's contribution to health insurance and considering a co-
pay program;
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Staff Recommendations
c. Reevaluate union contract provisions;
d. Evaluate the vacation/sick day policy and consider a PTO concept with a
disability rider;
e. Consider an employee buyout program for retirement eligible employees;
f. Evaluate pension alternatives such as replacing the defined benefit plan with a
defined contribution plan;
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Staff Recommendations
g. Emphasize subcontracting by considering liability factors when evaluating
costs.
4) The City budget for 2008 utilize a minimum of $6 million from the available $15
million pension plan "set aside" credit to assist in funding the Pension Plan
contribution for that year. We further recommend that the $1.5 million no longer
required to fund the "special" fireman's pension fund also be used to fund a
portion of the required 2008 pension contribution.
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Staff Recommendations
5) Regarding property insurance that the City consider eliminating or reducing its
wind coverage, using reserves in the Central Insurance Fund to increase self-
insurance limits; and pursuing pooling concepts with other municipalities.
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6) The City eliminate a freestanding beach library by consolidating it with the beach
recreation center or closing it, if consolidation is impractical, with patrons urged
to use the Main library.
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Staff Recommendations
7) Take home vehicles be limited to Pinellas County for all staff and that City
vehicles are tools that allow employees to do their tasks and should not be used as
employee perks.
8) As the Task Force Police fleet evaluation (see attached exhibit A) reflects a
potential savings of 25%, the Budget Task Force recommends a detailed
utilization study be performed on the City's fleets to identify and eliminate excess
vehicles, with a special emphasis on the elimination of take-home vehicles.
9) The City prohibit using reserves for FTE costs.
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Staff Recommendations
10) The City discontinue the practice of transferring FTE's from Enterprise Funds to
the General Fund.
11) It appears that the ratio of Fire Chiefs to the number of firefighters is inconsistent
with surrounding municipalities to the degree that it merits an in-depth review by
management. Consistent with this review an examination of the management to
staff ratios in all maj or departments should be conducted.
.
.
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Staff Recommendations
.
.
12) The City consolidate all public communications in all departments into one
department, with the goal of reducing FTE' s and consolidating efforts.
13) The Parks and Recreation budget be cut by approximately 5% with specific cuts
to include, but not be limited to:
a. Reduction of contracted grounds maintenance ..........................................$100,000
b. Eliminate Systems Analyst ...........................................................................$49,000
c. Eliminate Administrative Analyst............................................................... ..$51,000
d. MLNP - elimination of Programmer I;
loss of Pin ell as County School support ........................................................$30,000
e. Eliminate 2 FTE; move remaining FTE to
Carpenter Team . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. $60,000
f. Eliminate Public Information Coordinator and
reI y on Publi c Communi cati ons to do PR................................................... $113,000
Total $403.000
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Staff Recommendations
14) The City Fire Department institute a firefighter volunteer service program in
selected fire stations to evaluate the potential effectiveness of the program and the
station that successfully implements this program and has demonstrated one full-
time firefighter position completely staffed by the volunteer program be allowed
to add one paid firefighter FTE to the station when additional personnel are
needed.
15) The Fire Plans Examiner position be eliminated.
16) The City review and evaluate annual contribution programs (i.e. subsidies and/or
contributions to Ruth Eckerd Hall, Harborview, Long Center, and Bright House)
on an annual basis.
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Budget Task Force Report
Staff Recommendations
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Item # 1
Meeting Date: 4/27/2007
Work Session
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Discussion of City Manager's Proposals for Budget Reductions
SUMMARY:
Review Approval: 1) Clerk
Cover Memo
Item # 2
Attachment number 1
Page 1 of 3
Analysis of Department Budget Savings
for 2007/08 Annual Operating Budget
Preliminary Budget
City Manager Othe r
Recommended Savings
Savings FTE Options FTE
GENERAL FUND PROGRAMS
City Manager's Office (1)
Executive Assistant 67,000 1.0
Management Intern 41 ,900 1.0
Development Services
Administrative Support Manager 91,630 1.0
Neighborhood Services Manager 73,900 1.0
Neighborhood Services Specialist 50,500 1.0
Economic Development
Tampa Bay Partnership 25,000
Professional Services 12,000
Equity Services (1)
National Conference for Comm & Justice 10,000
Travel & training 3,000
Reduction in Diversity Council activities 4,500
Fire Department
Fire Inspectors 98,580 2.0
Squad #49 695,440 7.0
Fire Plans Examiner 49,460 1.0
S.WAT. Team 1 30,160
Arson Investigator 60,000 1.0
Public Education Specialist 50,610 1.0
Public Information Officer 69,530 1.0
Finance (1)
Accounting Clerk - treasury 22,700 1.0
Senior Accountant 64,590 1.0
Professional Svc - external audit 10,160
Human Resources (1)
Eliminate Systems Analyst position 54,350 1.0
Reclass Asst HR Director to SAMP 2 position 40,000
Library
Close Information desk at Main 80,290 2.0
Move Beach Library to Beach Recreation Center 100,000 0.5
Close Beach Library 85,440 1.5
North Greenwood - Library Assistant 33,240 1.0
East - close two nights/week 39,530 1.0
Countryside - close two nights/week 31,930 1.0
Non-Departmental
Beach Walk Debt Funding 370,000
Jolley Trolley 229,000
Item # 2
Analysis of Department Budget Savings
for 2007/08 Annual Operating Budget
Preliminary Budget
City Manager
Recommended
Savings FTE
Attachment number 1
Page 2 of 3
Othe r
Savings
Options FTE
Office of Management & Budget (1)
Eliminate Accountant position
Add intern support
Official Records (1)
Grant Writer
Lobbyist funding
Parks & Recreation
Projects Team - contract out services 133,700
Reduce holiday lighting
Reduce PACT to $400,000 77,620
Reduce AALC support
Consolidate electricians - eliminate position 44,920
Eliminate cash funding for outside organizations 30,000
Close Morningside Recreation Center 216,780
Reduce contracted grounds maintenance
Eliminate Systems Analyst 48,940
Eliminate Administrative Analyst 51,200
Close Recreation Centers on 7 holidays
Close Beach Recreation center - rentals only
MLNP- eliminate Programmer 29,970
Eliminate PIO 112,940
Reductions in Landscape Maintenance Team
Special Events - Recreation Specialist (includes Brighthouse Networks Field Events)
Reduce Fun-n-Sun festival to two weeks & eliminate Cinco De Mayo
Eliminate fall concert
City participation in Festival of Trees
Recreation Programming Administration (delete Coordinator)
North Greenwood Recreation and Aquatics Complex
- turn operations over to the Boys & Girls Club 680,000 13.7
Cultural Affairs - Recreation Programmer
Planning Department
Reduce professional services
Reduce travel, training, mileage reimb
Part-time staff assistant
47,450 1.0
(7,500)
47,000 1.0
5,000
4.0
26,490
6,560
1.0
99,500
5.5
100,400
1.0
1.0
10,770
89,920 2.9
1.0
1.0
283,400
53,400
34,700
19,600
15,200
67,120
8.0
1.0
1.0
37,950
1.0
40,000
26,200
23,400 0.5
40,820 1.0
50,590 1.0
56,910 1.0
74,680 1.0
55,650 1.0
96,700 1.0
251,440 4.0
125,720 2.0
100,000
Item # 2
Police Department
Senior Staff Assistant
Staff Assistant
Public Service Technician
Computer Systems Commander
Systems Programmer
Public Information Officer
School Resource Officers
Officer Friendly
Donation to Clearwater Homeless Intervention Program (CHIPS)
Attachment number 1
Page 3 of 3
Analysis of Department Budget Savings
for 2007/08 Annual Operating Budget
Preliminary Budget
City Manager Othe r
Recommended Savings
Savings FTE Options FTE
Engineering
Public Works Administrator 140,300 1.0
Survey Crew 103,500 3.0
Administrative Analyst 42,960 1.0
Reduction in street lighting 125,000
Public Services
Tree Trimmer/Arborist 44,060 1.0
Senior Staff Assistant 39,370 1.0
Public Services Trainer 64,160 1.0
Public Communications
Public Information Coordinator (70,000) (1.0)
C-News reduced to once a month 24,500
Eliminate ad support for Fun-n-Sun, Philliies,etc. 16,000
Operating Costs - consolidation of Pia functions (50,000)
Eliminate Staff Assistant 40,350 1.0
Accounting Clerk - part-time (12,230) (0.5)
Department-Wide Savings
Property Liability Insurance 1,372,000
Health Insurance - 3% reduction in employer share 230,000
TOTAL-GENERAL FUND PROGRAMS 4,177 ,270 44.7 3,932,280 47.4
INTERNAL SERVICE FUND PROGRAMS
Information Technology (1)
Eliminate Telecommunications Supervisor
and revert to part-time position 53,000 0.5
Eliminate Administrative Assistant position 53,470 1.0
Eliminate Network Analyst 54,560 1.0
Reduce annual project funding 50,000
General Services/Fleet Administration (1)
Administrative Analyst 47,000 1.0
Fleet Service Worker 55,080 1.0
Mechanics 81,280 2.0
Tradesworker 39,000 1.0
Total Savings 4,371,820 48.7 4,171,120 50.9
(1) Savings in these operations will be shared city-wide, not just in the General Fund.
Item # 2
SUBJECT / RECOMMENDATION:
Review of Updated Five-Year Forecast
SUMMARY:
Meeting Date: 4/27/2007
Work Session
Council Chambers - City Hall
Review Approval: 1) Clerk
Cover Memo
Item # 3
Attachment number 1
Page 1 of 4
Financial Forecast
April, 2007
City of Clearwater
General Fund
Five-Year Forecast
April 2007
FlVE- YEAR FORECAST
PURPOSE
The Five-Year Forecast was designed as a management tool to provide an enhanced level of financial
planning for the City's General Fund.
Financial planning expands a government's awareness of options, potential problems, and opportunities.
The long-term revenue, expenditure, and service implications of continuing or ending existing programs
or adding new programs, services, and debt can be identified. The financial planning process helps shape
decisions and allows necessary and corrective action to be taken before problems become more severe.
A financial plan is not a forecast of what is certain to happen, but rather a device to highlight significant
issues or problems that must be addressed if goals are to be achieved.
The City of Clearwater's General Fund projections are based upon current projected levels of service
and staffing in the 2006/07 adopted budget, other than where noted below.
GENERAL FUND
The General Fund is the general operating fund of the City. This fund was established to account for
revenues and expenditures involved in operating general functions of a non-proprietary nature. Major
revenue sources include property and other taxes, franchise and utility fees, licenses and permits, fees for
services, and charges to enterprise operations for administrative or specific services. The major operating
activities supported by the General Fund include most traditional tax-supported municipal services such as
police and fire services, transportation, economic development, parks and recreation, libraries,
administrative offices, planning services and public works operations.
Growth and Inflation
The rate of inflation is projected at 3.5% in fiscal year 2007/08. This is based upon current trends on the
average Consumer Price Index (CPI) for All Urban Consumers provided by the Bureau of Labor Statistics.
The forecasted inflation for fiscal years 2008 through 2012 is also projected at an annual rate of3.5%.
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Financial Forecast
April, 2007
Revenue Projections
Proj ection of revenues and other resources is critical in order to understand the level of funding available
for services and capital acquisitions. Projections for future budget periods help determine the likelihood
that services can be sustained and highlight future financial issues to be addressed. Preparing revenue
projections also enhances a government's understanding of revenue sensitivity to changes in assumptions
and to controllable factors such as changes to tax rates or fees.
Revenue forecasts for the City of Clearwater are based upon known factors and trend analysis, reviewing
the previous five-year history of actual receipts.
Property Tax Revenue
Property tax revenues are the largest source of revenue for the General Fund representing 41 % of the total
anticipated General Fund revenues in the 2006/07 annual budget.
The City of Clearwater is basically "built out". Therefore, the City will not see much increase in taxable
values from major new residential development. Still, the results of economic development, and
redevelopment within our community in the last several years is readily apparent in our growing taxable
values, with increases of almost 9.6%, 11.7%, 15.5%, and 23.3% respectively, in each of the last four
fiscal years.
As a means to review the impact of "rolling back the millage" next year, tax revenues are forecasted to
remain flat for the fiscal year 2007/08. An additional $500,000 of property tax revenues has been
included based upon anticipated $100 million of new values on the tax role in the new fiscal year.
Estimated receipts for years after 2007/08 are reflected at a conservative increase of 3 % annually.
For the purposes of this exercise, the City's taxable values reflect on a 3% increase in values each year
over the five-year period, and the taxable value for the purpose of computing the estimated millage rates in
future years has been frozen at the 2006/07 values of $10.6 billion.
Communications Services and Sales Tax
The anticipated revenue from the Communication Services tax was budgeted at almost $6.6 million of the
total $121.9 million budget, or 5% of General Fund revenues in fiscal 2006/07. Receipts for the current
year are slightly stronger than budgeted. For fiscal year 2008, budgeted receipts are estimated at
approximately $7.1 million with a growth factor of about 1 % thereafter based upon the five-year historical
trend.
The growth in sales tax revenues remains fairly flat at about 1 % per year on average. Sales tax revenue
projections for the current year will most likely need to be adjusted downward. For fiscal year 2008 and
thereafter, tax projections reflect a growth factor of 1 % based upon revised projections in fiscal 2007/08
and annually thereafter.
Utility & Franchise Fees
Franchise fees in the City of Clearwater are levied on companies in exchange for the right to operate
franchises for the purpose of maintaining and operating an electrical or gas distribution system in the City.
Utility taxes are fees levied on the purchase of electrical, gas, water, oil, or propane within the City.
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Financial Forecast
April, 2007
Overall, receipts from utility and franchise fees from Progress Energy represent the majority of this
revenue category. Although increasing steadily, franchise fee revenues are growing at a stronger pace
than utility tax revenues. Franchise fee revenues are anticipated to grow at approximately 4% per year
and utility tax revenues at approximately 2% per year, based upon revised estimates for the current year
and historical receipts for the past five years.
Other Revenue Sources
The three revenue sources detailed above account for over 69% of the total General Fund revenues.
All other revenue sources are forecasted individually on a line item basis based upon historical revenue
trends.
Expenditure Projections
Assumptions for expenditure projections should be consistent with related revenue and program
performance assumptions. A review of expenditure projections for individual programs, particularly those
with significant unexpected increases or decreases, is critical.
The expenditure proj ections are presented for each Department, and proj ections assume all current
programs continue into future fiscal years.
Salary and Benefits
Salary and benefit costs approximate 67.5% of all General Fund expenditures, at $82.1 million. Salary
projections are forecasted for budget approved 2006/07 full-time equivalent positions only. Funding for
union employees are projected within the limits of current union contracts and similar increases thereafter.
Funding for SAMP (Supervisory, Administrative, Managerial, and Professional) employees allows for a
4% merit increase. The attrition rate, or salary savings, is assumed to be 1% for all five years. Medical
insurance costs for all employees are approximately $7.7 million of the City's total General Fund
expenditures in the approved 2006/07 General Fund operating budget. Medical insurance is projected to
increase 0% in fiscal year 2007/08 and 6% in each of the years thereafter.
The forecast for fiscal year 2007/08 reflects City pension costs to increase from 13 % of covered payroll to
16%, which continues the plan to reach 20% of covered payroll by 2010 as recommended by the City's
actuary. A positive note regarding the funding of the Old Fire Pension is evident in the Fire Department
forecasted budget for fiscal year 2007/08. Full funding of the Old Fire Pension plan is expected by the
end of fiscal year 2006/07. This forecast reflects the savings of approximately $1.5 million starting in
2007/08 in the Fire Department operating budget. This forecast assumes that these savings will not be
diverted to other programs, and will be reflected as a reduction in General Fund expenditures starting in
fiscal year 2007/08.
Operating Expenditures
Operating expenditures include numerous costs including basic operating supplies, travel, training, etc.
These costs as a whole represent approximately 16% of the total General Fund expenditures. Significant
expenditures in the operating category include utility costs for public facilities such as City Hall, the
Municipal Services Building, our libraries and recreational facilities, and contributions to agencies
discussed below.
Property and liability insurance coverage for fiscal 2008 is estimated at $4.2 million.
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Financial Forecast
April, 2007
For the most part, these expenditures are forecasted to increase in line with the consumer price index,
which is estimated at 3.5% in fiscal year 2007/08 and each of the years thereafter.
Contributions to Other Agencies
Contributions to Other Agencies in the General Fund remain as currently budgeted to include such
contributions as the annual contribution to Ruth Eckerd Hall of $477,620 and the contribution to the
African American Leadership program in the amount of$lOO,OOO.
Internal Service Costs
This category of expenditures reflects the reimbursement to our Internal Service Funds for services.
Again, a major portion of this category of expenditures is directly tied to Salary and Benefit increases.
Internal Service Costs are projected to increase at the rate of 3.5% annually in each of the next five years.
Operating Capital
The operating capital category recognizes those capital purchases that are less than $25,000 and not
accounted for in the Capital Improvement Fund. These costs represent an insignificant portion of the
General Fund total expenditures at $136,200 annually. These costs are forecast to increase at the same
rate as operating expenditures, 3.5% annually in each of the next five years.
Debt Service Costs
Debt service costs are projected taking into account all lease purchase contracts anticipated to be
outstanding at the end of fiscal year 2006/07 and reflect the impact of current outstanding public service
tax bond commitments. Debt service costs are forecasted to remain relatively stable throughout the five-
year period, and include $1 million of annual debt service for the Beach Walk project in each of the
forecasted years.
Transfers to the Capital Improvement Fund
Transfers to the Capital Improvement Fund are forecasted as proposed in the current six-year Council
adopted Capital Improvement Plan.
Forecast Summary Analysis
In summary, the impact of maintaining the current level of ad-valorem taxes, along with the projection
of other given current revenues and current service expenditures produces a deficit of approximately
$3.1 million in fiscal year 2007/08. The projected increase in the new fiscal year is primarily due to
routine forecasted salary increases for current employees and cost index increases for other supplies and
services. Based upon these early projections, it appears that the service cuts of this amount would be
necessary to allow no increase in property tax revenue, assuming revenues meet expectations, and
expenditures are in line with forecasted projections.
This forecast does not factor in the impacts of any new programs and/or the impact of unknown or
extraordinary issues during the forecast period.
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