Porterville’s Budgetary Approach

Porterville’s Budgetary Approach

The budgetary process is continuous in Porterville with many options and possibilities

The Approach

• A three-year Strategic Budget Plan

• A one-year Budget

• Periodic review of Budget Targets

• Revision of Expenditures when necessary

EXPENDITURE CONTROLEXPENDITURE CONTROL

The approach has been called Expenditure Control

It is more accurately described as

Expenditure Management

Each Department is provided with spending targets and they are accountable to manage within the

TARGETS

Base-Line BudgetFor the General Fund, each year at a Budget Conference, the City

Manager and Directors Establish a Draft

Base-Line Budget

The Base-Line Budget is based on Prior Year, Adjusted for Actual Personnel Costs + Inflation Allowance and Inflation

Allowance for Supplies & Services

The Inflation Allowance is specified as a DEFLATOR, which is somewhat less than inflation. For Supplies and Services in The

General Fund it has been set at 3%

The Bottom Line

The proposed General Fund Budget for 2007/08 is proposed as structurally balanced but with a cash deficit

• Structural deficit = ($39,864) (.18% of operating appropriations)

• Cash deficit = ($1,014,864)

Revenues

• General Fund Revenues and Transfers are projected as $23,561,339

• This is up 1.6% from previous year

• This is intended to be an accurate estimate and is not conservative and does not hedge

• A recession may reduce revenues and require the City to utilize reserves to cover expenditures or curtail expenditures and programs

City of PortervilleGeneral Fund Revenue Estimates

FY 2007-2008

PROPERTY TAXES32%

SALES & USE TAX18%REVENUE FR OTHER

AGENCIES4%

UTILITY USERS TAX18%

PERMITS3%

OTHER TAXES11%

OTHER1%

CHARGES FOR SERVICES

13%

City of PortervilleGeneral Fund Revenue Estimates

FY 2006-2007

PROPERTY TAXES31%

SALES & USE TAX18%

REVENUE FR OTHER AGENCIES

4%

UTILITY USERS TAX17%

PERMITS4%

OTHER TAXES11%

OTHER2%

CHARGES FOR SERVICES

13%

City of PortervilleFive-Year General Fund Revenue

(in thousands of $)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY 03/04 FY 04/05 FY 05/06 FY 06/07 FY 07/08

PROPERTY TAXES SALES & USE TAX REVENUE FR OTHER AGENCIES UTILITY USERS TAX

PERMITS OTHER TAXES OTHER CHARGES FOR SERVICES

Expenditures

• General Fund expenditures and transfers are targeted at $24,576,203

• This is up 1.8% from Prior Year• These targets assume increases for the deflator• These expenditures assume new capital and

program costs

City of PortevilleGeneral Fund Expenditure Estimates

FY 2007 - 2008

FIRE17%

PARKS & LEISURE20%

POLICE35%

COMMUNITY DEVELOPMENT

3%LEGISLATIVE

1%

FINANCE6%

ADMINISTRATIVE & LEGAL

4%PUBLIC WORKS10%

CARRYOVER4%

City of PortervilleGeneral Fund Expenditure Estimates

FY 2006-2007

FIRE16%

PARKS & LEISURE19%

POLICE33%

LEGISLATIVE2%

FINANCE7%

ADMINISTRATIVE & LEGAL

4%

COMMUNITY DEVELOPMENT

3%

PUBLIC WORKS10%

CARRYOVER6%

City of PortervilleFive-Year General Fund Expenditure

(in thousands of $)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY 03/04 FY 04/05 FY 05/06 FY 06/07 FY 07/08

ADMINISTRATIVE & LEGAL FINANCE LEGISLATIVE

FIRE PARKS & LEISURE POLICE

CARRYOVER COMMUNITY DEVELOPMENT PUBLIC WORKS

Proposed Program Modifications

Program Costs ABOVE Base-Line

• BIG Legislative Program = $1,000• Deputy CM = $14,000• ICMA Conference = $1,500• Second Code Enforcement Officer = $80,000• Park Ranger to Assist with Code Enforcement =

$80,000

Proposed Above-Line Projects

• Above-Line Projects are Included in Draft Budget or Finance Letter Modification of Draft Budget

• Total amounts allocated add up to $1,915,925. The sources include:

Re-appropriated General Fund = $543,925Appropriated General Fund = $18,000General Fund Carry Over = $975,000

Re-appropriated Gen. Fund Carry-Over = $132,000Grant Monies= $247,000

Below-Line-Projects

• The amount of Below-Line projects (projects specified but not included in draft budget) are defined in both the Draft Budget and Finance Letters

Draft Budget = $1,483,000

Finance Letters (#1 thru #4) = $649,000

Funds Other Than GeneralFunds Other Than General

Trends from Prior Years Are Continued• Measure H Will Be in Full Force

• Zalud House Will Require Assistance• CDBG Down Slightly

• Airport Expends Capital for Office, Pilots Lounge & Hangars

• Risk Management $607,000 expense for Airport Hazardous Materials Remediation, and $310,000 loan to Redevelopment for Hockett/Mill parking lot repair

• Golf Operations Consistent• Many Projects in Sewer, Water, Streets That Will Be the

Focus of An Upcoming Study Session• Redevelopment Will Be Presented Separately

Service LevelsService Levels• It is suggested that each Director have an

opportunity present their departments and funds and take questions

• The Council may then wish to proceed page-by-page or focus on specific items

• The next Study Session is about Capital Projects