Attachment

SPECIAL COUNCIL MEETING - BUDGET REVIEW AGENDA (Continuation of Recessed Meeting of May 24, 2011) June 6, 2011 Council Chambers - City Hall - City of Dover AGENDA ADDITIONS/DELETIONS MONDAY, JUNE 6, 2011 - 6:00 P.M. (Adjourn by 9:00 P.M.) The first twenty (20) minutes of each meeting will be set aside to allow for public comment. If the public comment time is utilized, the agendas will be adjusted accordingly. 1. 2011/2012 Budget - Updated Staff Proposal. . . . . . . . . . . . . . . . . . . . . . . . . (6:00 - 7:15 p.m.) Break - 15 Minutes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7:15 - 7:30 p.m.) 2. Discussion - 2011/2012 Budget - Updated Staff Proposal. . . . . . . . . . . . . . (7:30 - 9:00 p.m.) 3. Adjourn by 9:00 p.m. /tm S:\AGENDAS & MINUTES\Council-Agendas\2011\06-06-2011 Budget Review Continuation of 05-17 - 05-25-2011 Meeting.wpd THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS.

CITY OF DOVER FISCAL YEAR 2011/2012 PROPOSED BUDGET AS AMENDED JUNE 6, 2011 PREPARED BY: DONNA MITCHELL, CONTROLLER/TREASURER & TERESA TIEMAN, SENIOR CITY ADMINISTRATOR

THREE STAGES IN RECOVERY • Bridging – get through the immediate crisis and create breathing room to make more sustainable reforms • Reform – carry out the short-term recovery plan and develop and implement long-term strategies • Transform – institutionalize long-term financial planning and become more resistant to financial distress and adaptable to a changing environment 2

STAGE 1 - BRIDGING • As discussed with Council President Leary and Councilman McGlumphy the Proposed FY11/12 Budget for the City of Dover has been amended for Council’s consideration. • These changes maintain City policies and procedures across all Funds. • The General Fund is balanced with the General Fund transfer policy change, no rate or fee increases (page 5), temporary cost reductions (page 6), further reduction of strategic budgets (page 7), and capital outlay reductions (page 8). Temporary cost reductions were consistently applied to all Funds. • IUE & IBEW Contractual pay increases are maintained at 2%. • No pay increases, promotions, or pay grade changes for non-bargaining. (see first bullet on page 6) • No Law Enforcement across the board pay increases, career ladder increases are maintained. • Budget Balances are all within the policy range of 8% to 12%. Any amounts over the policy minimum are recommended to be maintained while working towards next year’s budget. • Interest Earnings on reserves that are over their minimum balance are being credited to their respective operating funds. 3

FINANCIAL POLICY CHANGE • Revenue Policy – Section 11 • Upon satisfying all rate covenants the City will provide operating transfers to the General Fund. From the Water/Wastewater Utility no greater than 4.5% ($424,508) of operating revenues . or $750,000. From the Electric Utility no greater than 6.5% 8.0% ($7,876,288) of operating revenues. or $7,250,000 of the utility operating revenues. Both transfer calculations will exclude the carry forward budget balance, County Sewer Fees, and State Utility Tax. The Utility transfers will not exceed 25% of the General Fund Revenues. (Amended Budget FY11/12 = 23.8%) • The electric transfer percentage change increases the transfer by $1,538,288 • An Action Form for policy change will be included with Budget Ordinance. 4

GENERAL FUND REVENUE ADJUSTMENTS • Beginning Budget Balance adjustment $16,642 • Demolition & Grass Cutting adjustment $100,000 • Investment Income on reserve added $23,100 • Interfund Service Billings for Administrative Divisions reduced $239,142 • Electric Fund Transfer additional $1,538,288 • Net Revenue Adjustments $1,438,888 5

GENERAL FUND COST REDUCTIONS • Removal of non-contractual raises, temporary employees, new/vacant positions (Grounds 1; Library 1.5; Emergency Planning Coordinator 1; Temporary Code Enforcement 1;), upgrades, or promotions – Total $306,527 reduction • Police – Reduced terminal leave by $50,000 • Overtime - $72,670 or 10% reduction • Education Assistance - $63,497; Full reduction unless current personnel are receiving this benefit. Other budgets were reduced to be more reflective of actual expenses last two years. • Computer Hardware - $95,692; 50% reduction except server equipment • Subscriptions & Dues - $19,365 reduction or 50%, except Assessor Office (20%) to maintain IAAO, Marshals & Swift, and AAS Designation and Electric Administration – DEMEC membership . • Training, Conference & Travel - $45,065 reduction of 50%; includes Mayor’s strategic program $2,900 • Vehicle Maintenance & Program Expenses $58,964 • Transfer to Capital Asset Reserve $50,000 (per Financial Policy) • Transfer to Inventory Write-offs $116,800 • Nuisance Reserve $112,000 • Transfer to CDBG $6,000 • Total cost reductions as above $996,580 6

STRATEGIC PLAN/PROGRAM REDUCTIONS • Assessor $3,800 for publishing property card on the internet • Fire Department $81,440 pagers, radios, and software • Life Safety $4,000 reduction for Police Academy Training • Planning $18,500 placeholder for any cost related to storm water compliance permit; Maintains staffing for permit work; • Facilities Management $7,800 energy audit • Code Enforcement $480 air card • City Manager $50,000 legal fees for labor negotiations • Human Resources $2,000 recruitment • All upgraded radios for FCC requirements were kept in applicable budgets • Total strategic reductions $168,020 7

GENERAL FUND CAPITAL OUTLAY REDUCTIONS • Fire $28,234 for 50% of Holmatro equipment • Grounds $44,720 vehicle • Recreation $50,000 playground improvements and splash pad • Police $201,534 vehicles and station parking lot repaving • Street Division $621,210 • Salt Storage Building $50,000 • Brine System $27,825 • Vehicles & Equipment $163,385 • Street & Sidewalk Program $380,000 • Sanitation $232,084 automated trash truck • Information Technology $66,600 server replacements • Public Services Administration $18,000 mobile solutions • Central Services $30,670 forklift • Mayor $33,000 downtown security cameras • Capital outlay reductions $1,326,052 8

GENERAL FUND CAPITAL OUTLAY ADDITIONS • Capital Project Fund - Street Program $2,000,000 • Included in amendments to be financed through a “proposed” bond issue; Bond resolution authorizing the issuance of bonds would be submitted to City Council before starting project; • To cover FY12 and FY13 programs • No General Fund monies are included for any sidewalk and street improvements • Will create a future debt service payment estimated at $150,000 9

SUMMARY OF GENERAL FUND ADJUSTMENTS Amount Proposed Budget - Ending Budget Balance ($980,022) Revenue Adjustments 1,438,888 General Fund Cost Reductions 996,580 Strategic Adjustments 168,020 Capital Outlay Adjustments 1,326,052 Transfer to Capital Project Fund (147,191) Ending Budget Balance as presented $2,802,327 10

GENERAL FUND FUTURE BUDGETS • Worker’s Compensation $505,000 (based on FY11 payroll) • Ladder Truck Payment $153,000 • Library additional operating cost approximately $400,000 when fully operational • Fully funding OPEB $5.9 million as compared to FY12 funding of $1.1 million • Health Insurance premiums did not increase in FY12; FY13 ? • Future debt service payments and capital asset replacements is dependent on affordability 11

SUMMARY OF UTILITY FUND ADJUSTMENTS Water/ Wastewater Electric Proposed Budget - Ending Budget Balance $2,961,479 $13,385,521 Revenue Adjustments & Reserve Transfers --- 1,036,048 Cost Reductions 67,459 181,416 Strategic Adjustments --- 125,005 Interfund Service Charges 49,508 185,486 Power Supply (reclass rate stabilization transfer) --- (1,000,000) General Fund Transfer --- (1,538,288) Ending Budget Balance as presented $3,078,446 $12,375,188 12