sunnyvale budget 2011-2012 presentation
DESCRIPTION
Slide Presentation from Sunnyvale City Council Budget Workshop on June 2, 2011TRANSCRIPT
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June 2, 2011
FY 2011/12 Budget WorkshopFY 2011/12 Budget Workshop
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- J. K. Galbraith
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Recovery UnderwayRecovery Underway
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Spending Outpaces Spending Outpaces RevenuesRevenues
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Citywide Expenditures by Citywide Expenditures by FundFund
General $129.7M 48%
Solid Waste Management $32.8M 12%
Water Supply & Distribution
$32.3M 12%
Wastewater Management $26.5M 10%
Other $22.8M 9%
Employment Development
$9.7M 4%
Community Recreation $12.1M 5%
Total Expenditures$265.9M
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2001 2011 Increase/Decrease
City Population 133,215 141,099 6%
Operations Expenditures
$157.9M $222M 41%
Total Full-time Employees
937 845 -10%
Citywide OverviewCitywide Overview
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Total Expenditures$129.7M
General Fund OverviewGeneral Fund Overview
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5 Key Decision Points5 Key Decision Points
1. Increased City pension contributions2.Public Safety salary assumptions3.Miscellaneous employee compensation4. Infrastructure investment5.Addressing the structural deficit
Changes to these proposals alter the plan dramatically!
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#1 Increased Pension #1 Increased Pension ContributionsContributions
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CalPERS rates are not high enough
City developed alternative pension ratesShort term: Higher than CalPERS• Miscellaneous: $2.8M additional next 5 years• Safety: $2.6M additional over next 5 years
Benefits:Less rate volatilityPays off unfunded liabilityLower rates in long-term
#1 Increased Pension #1 Increased Pension ContributionsContributions
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#2 Public Safety Salary #2 Public Safety Salary Assumptions Assumptions
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Concessions from PSMA and PSOA budgeted
Salary survey leaves City vulnerable
If historical annual increases occur$194 million additional compensation over 20
yearsBudget Stabilization Fund exhausted in FY 2017
Key assumption in budget: Modification to Safety salary survey when contract expires or earlier if possible
#2 Public Safety Salary #2 Public Safety Salary Assumptions Assumptions
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Concessions from SMA in 20112% contribution + 2 “zero years” + two-tier
Budget assumes same concessions from other bargaining unitsIf not, $73 million additional over 20 yearsBudget Stabilization Fund exhausted in 2017
#3 Miscellaneous Employee #3 Miscellaneous Employee Compensation Compensation
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#3 Miscellaneous Employee #3 Miscellaneous Employee Compensation AssumptionCompensation Assumption
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Included in Recommended Budget
$28M over 20 yearsRepresents cost to get Pavement Condition
Index (PCI) back to 80 and maintain
Does not address other needsNo funds set aside for other infrastructure/
facilities
#4 Infrastructure #4 Infrastructure Investment Investment
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It’s just arithmetic…the numbers don’t add up
Annual expenditures > annual revenuesBy average of $2.4M annually over next 10
yearsExpenditures growing faster than revenues
Contingency Reserve grows $9.1M to $32.6M by 2021Due to increasing operations costs
#5 Addressing the #5 Addressing the Structural Deficit Structural Deficit
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Fiscal Year Property Tax Sales Tax Compensation
2000/01 $20.4M $36.3M $58.5M
2001/02 $22.8M $25.8M $62.6M
2002/03 $23.9M $22.8M $70.2M
2003/04 $23.6M $23.5M $73.2M
2004/05* $23.9M $24.9M $80.1M
2005/06 $25.9M $28.4M $86.6M
2006/07 $27.0M $30.9M $88.8M
2007/08 $29.3M $29.7M $90.9M
2008/09 $31.8M $25.1M $97.2M
2009/10 $32.7M $25.4M $96.2M
2010/11 $31.0M $27.3M $97.7M
*In FY 2004/05, Property Tax increased due to a State revenue shift between the VLF and Property Tax. In order to compare the true growth of property tax, the shift is not reflected in this table.
Expenditures Grew Faster Expenditures Grew Faster than Revenues than Revenues
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Structural DeficitStructural Deficit
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$500,000 annual savings programmed in Recommended Budget
Budget Stabilization Fund exhausted in 2021
Actual savings identified by departments: $1M
Adds 2 years to the Budget Stabilization Fund Exhausted in 2023
Cost SavingsCost Savings
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Department Target Proposed Savings
Office of the City Attorney $7,781 $7,884
Human Resources $15,030 $168,109
Community Development $22,259 $25,240
Finance $25,094 $26,125
Information Technology $26,699 $26,912
Office of the City Manager $48,212 $219,679
Library and Community Services $68,705 $113,199
Public Works $80,215 $103,210
Public Safety $306,006 $308,697
Total $600,000 $999,055
Level 1 Cost SavingsLevel 1 Cost Savings
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Drastic cuts required in final 10 years of planExacerbated by loan repayments ending• Solid Waste - $4.7M in FY 2022/23
• RDA - $11.5M in FY 2027/28
Additional cuts now mean less drastic cuts later
Significant Cuts RequiredSignificant Cuts Required
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If $2.25M in Level 2 Cost Savings achieved:Budget Stabilization Fund not exhausted until
2028• Coincides with RDA loan repayment ending
Budget Stabilization Fund ends FY 2021 at $26.4M• Current plan is $1.6M
All other assumptions must hold!Most important: modifications to DPS salary
survey
Level 2 Cost SavingsLevel 2 Cost Savings
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Department Cumulative Target
Office of the City Attorney $29,179
Human Resources $56,364
Community Development $83,469
Finance $94,104
Information Technology $100,120
Office of the City Manager $180,796
Library and Community Services $257,640
Public Works $300,807
Public Safety $1,147,521
Total $2,250,000
Level 2 Cost SavingsLevel 2 Cost Savings
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Budget Stabilization Fund Budget Stabilization Fund ScenariosScenarios
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WPCP RenovationWPCP Renovation
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Utilities InfrastructureUtilities Infrastructure
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WaterWater
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TransportationTransportation
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Civic CenterCivic Center
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Parks InfrastructureParks Infrastructure
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Park Dedication FundPark Dedication Fund
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Community Recreation FundCommunity Recreation Fund
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Other Significant IssuesOther Significant Issues
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Utilities Rate IncreasesUtilities Rate Increases
Each utility facing unique challengesWater: Significant increases to wholesale ratesWastewater: Infrastructure needs• Including plant replacement
Solid Waste: Declining revenues
Rate increases higher than projected
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Utility Rates v. Original Utility Rates v. Original Projection in FY 2010/2011Projection in FY 2010/2011
Average monthly utility bill will rise by 11.6%
Equal to $11.44 per month
UtilityOriginal
ProjectionRecommended FY
2011/2012Change in % Points
Water 9.0% 18% +9%
Wastewater 7.5% 5.5% -2%
Solid Waste 7.0% 6.0% -1%
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Organizational RestructureOrganizational Restructure
Public Works adds Parks, Golf, Fleet, and Facilities
Utilities in separate department
Library adds Recreation
Continued civilianization effort in Public Safety
Elimination of additional positions
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Budget SupplementsBudget Supplements
Description
One time or
ongoing Cost
Funding Recommendati
on
Guided Neighborhood Bike Routes – First Phase
One time $40,000 No
Expand Care Management at Senior Center
Ongoing Up to $1.5M
No
Junior Achievement One time $5,000 No
Leadership Sunnyvale Funding One time $6,000 Yes
Community Event Grant Funding
One time $10,000 Yes
Neighborhood Grant Funding One time $6,125 Yes
2011 Priority Study Issues Funding
One time $855,000 No
Pet Parade One time $30,500 No
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End of Slide Show
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