08-03-2010 City Council Special Meeting PacketCity of Grand Island
Tuesday, August 03, 2010
Special Meeting Packet
City Council:Mayor:
Margaret Hornady
City Administrator:
Jeff Pederson
City Clerk:
RaNae Edwards
T
u
7:00:00 PM
Council Chambers - City Hall
100 East First Street
Larry Carney
Scott Dugan
John Gericke
Peg Gilbert
Chuck Haase
Robert Meyer
Mitchell Nickerson
Bob Niemann
Kirk Ramsey
Jose Zapata
Call to OrderCity of Grand Island City Council
A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS
Individuals who have appropriate items for City Council consideration should complete the Request for Future Agenda
Items form located at the Information Booth. If the issue can be handled administratively without Council action,
notification will be provided. If the item is scheduled for a meeting or study session, notification of the date will be given.
B - RESERVE TIME TO SPEAK ON AGENDA ITEMS
This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve time to speak.
Please come forward, state your name and address, and the Agenda topic on which you will be speaking.
MAYOR COMMUNICATION
This is an opportunity for the Mayor to comment on current events, activities, and issues of interest to the community.
Call to Order
Pledge of Allegiance
Roll Call
This is an open meeting of the Grand Island City Council. The City of Grand Island abides by the Open Meetings Act
in conducting business. A copy of the Open Meetings Act is displayed in the back of this room as required by state
law.
The City Council may vote to go into Closed Session on any agenda item as allowed by state law.
City of Grand Island City Council
Item E1
Public Hearing on Proposed FY 2010-2011 City Single Budget
Tuesday, August 03, 2010
Special Meeting
City of Grand Island
Staff Contact: Jeff Pederson
City of Grand Island City Council
Council Agenda Memo
From: Mary Lou Brown, Finance Director
Meeting: August 3, 2010
Subject: Public Hearing for FY 2010-2011 Single City Budget
Item #’s: 1
Presenter(s): Mary Lou Brown, Finance Director
Background
The budget process for the City of Grand Island begins early in the year with the internal
budget compilation and culminates with the submittal of the final budget to the State
Auditor in September. This year marked the formal implementation of Program
Prioritization which provided a framework within which budget allocations were driven
and decisions made. Following are accomplishments that have occurred:
· Departments received target appropriation amounts and submitted proposed 2010-
2011 budgets that reflected both the program prioritizations and appropriation
targets.
· Proposed budgets were reviewed with each department by City Administration.
· City Council conducted a public hearing and approved the Solid Waste Agency
Budget on July 13, 2010.
In the past, other budget related items suc h as FTE requests and Fee Schedule changes
would have been studied and approved prior to the Budget review and approval. With
Program Prioritization, all of the budget items are interrelated and will be reviewed and
approved along with the 2010-2011 Budget.
Discussion
At the Special Council meeting on August 3, 2010, the City Council is asked to conduct a
public hearing on the proposed budget to allow for public input. Budget discussions will
begin following the public hearing on August 3, 2010 and continue on August 5, 2010.
On August 10, 2010, the Council will be asked to make determination on the budget or
set further meetings to move toward determination.
In order to meet the State filing regulations and to have a 15 day window between the
budget approval and the effective date, the latest the budget approval can take place is
September 7, 2010.
Recommendation
The Council is asked to conduct the public hearing and take information from the
citizens. After conducting the hearing, it is recommended tha t the City Council take the
information under advisement and begin deliberations regarding the City’s 2010-2011
fiscal year budget.
The budget transmittal letter, a “Budget in Brief”, and draft documents of the budget
were provided to Council in early July. If any further information is needed, please
contact City Administration.
Item E2
Public Hearing on Community Redevelopment Authority (CRA)
Budget
Tuesday, August 03, 2010
Special Meeting
City of Grand Island
Staff Contact: Chad Nabity
City of Grand Island City Council
Council Agenda Memo
From: Grand Island Community Redevelopment Authority
Meeting: August 3, 2010
Subject: Proposed CRA Budget
Item #’s: 2
Presenter(s): Chad Nabity AICP, CRA Director
COMMUNITY REDEVELOPMENT AUTHORITY
2010-2011 ANNUAL BUDGET
It is my privilege to present to you the budget for the Community Redevelopment
Authority for 2010-2011. This plan and budget continues the high-quality services that
have enabled the CRA to partner with the City of Grand Island, private developers and
businesses, and with property owners in the blighted and substandard areas to make
Grand Island vibrant, clean, safe, and attractive.
The CRA budget for 2010-2011 is offered to you with a review of the responsibilities of
the CRA. Those responsibilities and abilities are outlined in State Statutes and are
summarized, in part, as follows:
The creation of Redevelopment Authorities was authorized by the Nebraska Legislature
in order to provide communities with the ability to address certain areas of a city in need
of improvement and development. Powers granted to Community Redevelopment
Authorities are outlined in Chapter l8 of the Statutes and include the ability to expend
funds to acquire substandard or blighted areas, make public improvements, and assist
with development and redevelopment projects in specified areas. The Authority has
virtually the same powers as any political subdivision, including borrowing money,
issuing bonds, undertaking surveys and appraisals and asking for a levy of taxes.
A five-member board, appointed by the Mayor with the approval of the City Council,
governs the CRA. The CRA is administered by a Director and devotes the overwhelming
share of its resources to highly visible and effective programs including commercial
façade improvements, and purchasing and demolishing dilapidated properties. The CRA
funds its programs primarily through assessments on taxable properties within the Grand
Island city limits.
BLIGHTED AND SUBSTANDARD AREAS
There are Seven (7) designated Blighted and Substandard Areas within the Grand Island
City Limits (see attached map). The City of Grand Island has the authority to designate
up to 35% of the community a blighted and substandard. At present 16.66% of the City
has been designated blighted and substandard.
CRA MISSION
The CRA’s mission is to reduce, slow or eliminate blighting influences on property in
those areas that have been designated as blighted and substandard. They do this by
encouraging new investment and improved infrastructure in older areas of the community
through the use of tax increment financing. They also take an active role in purchasing
and demolishing properties that need to be cleared. This property is then made available
for redevelopment.
FISCAL RESOURCES
General Revenues For 2010-2011,
The CRA is requesting property tax revenues of $425,000 the same amount requested for
the 2009-2010 and down from $475,000 in 2008-09 and down from $500,000 in 2007-
2008. Historically, the levies and tax asking have been:
2010-
2011
2009-
2010
2008-
2009
2007-2008 2006-
2007
2005-
2006
2004-
2005
$0.017012 $0.018076 $0.020790 $0.0225655 $0.022824 $0.023625 $0.024287
$425,000 $425,000 $475,000 $500,000 $477,204 $456,540 $457,391
At the July1, 2010 meeting, the Community Redevelopment Authority approved the
proposed budget establishing a preliminary request of $0.017012 for each hundred dollars
of valuation for an anticipated $425,000 based on an estimated taxable valuation of
$2,498,348,795.
Program Funding
The Community Redevelopment Authority has the ability to assist private developers and
governmental entities with the commercial, residential or mixed-use redevelopment
projects throughout the City. Specific detail on projects is as follows:
· Purchase of Dilapidated Properties/Infrastruc ture. The 2010-2011 budget includes
$150,000 for the acquisition of substandard properties in the blighted and substandard
areas and for the provision of infrastructure. The Authority will consider any property
within a designated area. The Authority budgeted $100,000 in the 2009-10 year and
spent $450,000 with the purchase of the building on South Locust.
· Facade Development $250,000 has been budgeted for the façade development
program, including grants and interest buy down these projects are unidentified at this
time. This program has been used extensively in the Downtown area but is available
to all blighted and substandard areas.
· Train Horns: A total amount of $240,000 has been reserved for participation in the
way side horn project in Downtown Grand Island. This project is a joint project
funded by the City and the CRA through an interlocal agreement. Final approvals
from the railroad are moving forward. This will be a reimbursement to the City.
· Other Projects: $400,000 has been reserved for other projects in the blighted and
substandard areas. In the 2010 fiscal year funding in the other projects was used:
o to purchase and demolish the old VooDoo Lounge Building at 3235 S.
Locust;
o to finance the installation of water lines along Poplar Street between 9th
and 12th Streets; and
o to fund additional façade projects that were approved based on the 2009
budget but not carried over into the 2010 budget.
This funding can be assigned to specific projects including but not limited to
infrastructure improvements in the blighted and substandard areas that would support
larger redevelopment plans. The CRA has used this funding item in the past to fund
additional façade improvement projects and to make grants to fund specific projects for
the: Business Improvement Districts, the Grand Island Parks Department, Fonner Park,
The Central Nebraska Humane Society, St. Stephens, Habitat for Humanity and other
community groups for specific projects that meet the mission of the CRA.
CONCLUSION
A continued aggressive approach toward redevelopment will be the focus for the CRA in
2010-2011. The investments this community has made in housing, redevelopment
efforts, infrastructure and economic development, bode well for the future of the
community. The tax dollars dedicated to the CRA make these projects and improvements
possible in an efficient and timely manner.
2007 2008 2009 2010 2010 2011
Actual Actual Actual Budget Projected Budget
CONSOLIDATED
Beginning Cash 1,309,485 952,497 1,236,622 1,547,542 1,547,542 883,698
REVENUE:
Property Taxes 699,422 750,800 755,133 667,783 667,783 667,783
Loan Proceeds - -
Interest Income 45,272 41,968 15,630 8,000 8,579 5,000
Land Sales 14,837 15,152 47,335 50,000 - -
Other Revenue 6,506 - 24,473 - 16,977 8,000
TOTAL REVENUE 766,037 807,920 842,571 725,783 693,339 680,783
TOTAL RESOURCES 2,075,522 1,760,417 2,079,193 2,273,325 2,240,881 1,564,481
EXPENSES
Auditing & Accounting 4,900 5,000 7,601 7,500 7,500 7,500
Legal Services 5,500 2,143 4,829 10,000 10,000 15,000
Consulting Services 999 - - 10,000 - 10,000
Contract Services 48,430 34,362 26,122 40,000 40,000 50,000
Printing & Binding - 568 - 1,000 500 1,000
Other Professional Services 3,429 4,112 - 5,000 - 5,000
General Liability Insurance - - - 250 250 250
Postage 142 159 200 200 200
Legal Notices 303 828 750 800 800 800
Licenses & Fees - - - - - -
Travel & Training 70 - - 1,000 - 1,000
Other Expenditures 14 - - 500 - 500
Office Supplies 32 105 38 500 100 500
Supplies - - - 300 100 300
Land 15,137 33,090 129 100,000 100,000 150,000
Façade Improvement 127,300 207,871 241,793 150,000 150,000 250,000
South Locust - - - - - -
Other Projects 706,680 - 2,858 800,000 550,000 400,000
Property Taxes BID Fees - - 10,000
2nd Street BID - 105,000 -
Outstanding Façade Improvement Grants 132,250 132,250 175,000
Railroad Horns 240,000 - 240,000
Other Committed Projects 17,700 17,700 -
Property Management - - -
Bond Principal 112,739 142,543 161,927 161,611 161,611 161,611
Bond Interest 97,492 93,031 85,445 81,172 81,172 81,172
TOTAL EXPENSES 1,123,025 523,795 531,650 1,759,783 1,357,183 1,559,833
INCREASE(DECREASE) IN CASH (356,988) 284,125 310,920 (1,034,000) (663,844) (879,050)
ENDING CASH 952,497 1,236,622 1,547,542 513,542 883,698 4,648
LESS COMMITMENTS - - - - -
AVAILABLE CASH 952,497 1,236,622 1,547,542 513,542 883,698 4,648
CHECKING 481,867 786,622 637,868 213,542 (21,302) (295,352)
INVESTMENTS 470,630 450,000 909,674 300,000 905,000 300,000
Total Cash 952,497 1,236,622 1,547,542 513,542 883,698 4,648
COMMUNITY REDEVELOPMENT AUTHORITY
FY 2010 - 2011 BUDGET
2007 2008 2009 2010 2010 2011
Actual Actual Actual Budget Projected Budget
COMMUNITY REDEVELOPMENT AUTHORITY
FY 2010 - 2011 BUDGET
CRA
GENERAL OPERATIONS: 01
Property Taxes 491,210 493,602 487,610 425,000 425,000 425,000
Interest Income 44,921 41,561 14,889 8,000 8,000 5,000
Land Sales 14,837 - 47,335 50,000 - -
Other Revenue & Motor Vehicle Tax 4,251 1,300 8,959 8,000 8,000
TOTAL 555,219 536,463 558,792 483,000 441,000 438,000
GILI TRUST 07
Property Taxes 64,571 66,410 65,817 65,780 65,780 65,780
Interest Income - -
Other Revenue 324 1,108 277 - 277
TOTAL 64,895 67,518 66,094 65,780 66,057 65,780
CHERRY PARK LTD II
Property Taxes 61,006 62,743 91,836 59,180 59,180 59,180
Interest Income 237 251 497 - 349 -
Other Revenue 68 - -
TOTAL 61,311 62,994 92,334 59,180 59,529 59,180
GENTLE DENTAL
Property Taxes 3,251 3,497 4,427 4,202 4,202 4,202
Interest Income 4 3 1 - 1 -
Other Revenue 846 947 2,610 - 702
TOTAL 4,101 4,447 7,037 4,202 4,905 4,202
PROCON TIF
Property Taxes 17,631 18,138 17,925 19,162 19,162 19,162
Interest Income 27 53 36 - 36
Other Revenue 931 972 232 -
TOTAL 18,589 19,163 18,193 19,162 19,198 19,162
WALNUT HOUSING PROJECT
Property Taxes 61,753 93,632 62,942 74,472 74,472 74,472
Interest Income 83 100 207 - 193
Other Revenue 86 10,825 12,395 - 7,998
TOTAL 61,922 104,557 75,544 74,472 82,663 74,472
2007 2008 2009 2010 2010 2011
Actual Actual Actual Budget Projected Budget
COMMUNITY REDEVELOPMENT AUTHORITY
FY 2010 - 2011 BUDGET
BRUNS PET GROOMING
Property Taxes - 9,536 9,575 4,986 4,986 4,986
Interest Income 4,940
TOTAL - 9,536 9,575 9,926 4,986 4,986
GIRAD VET CLINIC
Property Taxes - 3,242 4,940 - 4,940 4,940
Interest Income - - - - - -
TOTAL - 3,242 4,940 - 4,940 4,940
GEDDES ST APTS - PROCON
Property Taxes 1,195 1,195 1,195 1,195
Interest Income - - - - - -
TOTAL - - 1,195 1,195 1,195 1,195
SOUTHEAST CROSSINGS
Property Taxes - - 8,866 8,866 8,866 8,866
Interest Income - - - - - -
TOTAL - - 8,866 8,866 8,866 8,866
POPLAR STREET WATER
Property Taxes - - - - - -
Interest Income - - - - - -
TOTAL - - - - - -
TOTAL REVENUE 766,037 807,920 842,571 725,783 693,339 680,783
2007 2008 2009 2010 2010 2011
Actual Actual Actual Budget Projected Budget
COMMUNITY REDEVELOPMENT AUTHORITY
FY 2010 - 2011 BUDGET
EXPENSES
CRA
GENERAL OPERATIONS:
Auditing & Accounting 4,900 5,000 7,601 7,500 7,500 7,500
Legal Services 5,500 2,143 4,829 10,000 10,000 15,000
Consulting Services 999 - - 10,000 - 10,000
Contract Services 48,430 34,362 26,122 40,000 40,000 50,000
Printing & Binding - 568 - 1,000 500 1,000
Other Professional Services 3,429 4,112 - 5,000 - 5,000
General Liability Insurance - - - 250 250 250
Postsge 142 159 200 200 200
Legal Notices 303 828 750 800 800 800
Licenses & Fees - - -
Travel & Training 70 - - 1,000 - 1,000
Other Expenditures - - - 500 - 500
Office Supplies 32 105 38 500 100 500
Supplies - - - 300 100 300
Land 15,137 33,090 129 100,000 100,000 100,000
PROJECTS
Façade Improvement 127,300 207,871 241,793 150,000 150,000 250,000
South Locust - - - - - -
2nd Street BID - - - 105,000 -
Outstanding Façade Improvement Grants - - 132,250 132,250 175,000
Railroad Horns - - 240,000 - 240,000
Other Committed Projects - - 17,700 17,700 -
Other Projects 706,680 - 2,858 800,000 550,000 -
Property Taxes BID Fees - - - - 10,000
Property Management - - - - -
TOTAL CRA OPERATING EXPENSES 912,780 288,221 284,279 1,517,000 1,114,400 867,050
GILI TRUST
Bond Principal 43,604 47,158 51,009 51,001 51,001 51,001
Bond Interest 22,176 18,622 14,779 14,779 14,779 14,779
Other Expenditures 4 -
TOTAL GILI EXPENSES 65,784 65,780 65,788 65,780 65,780 65,780
CHERRY PARK LTD II
Bond Principal 34,131 36,824 39,729 39,729 39,729 39,729
Bond Interest 25,049 22,356 19,451 19,451 19,451 19,451
TOTAL CHERRY PARK EXPENSES 59,180 59,180 59,180 59,180 59,180 59,180
GENTLE DENTAL
Bond Principal 1,949 2,127 2,236 2,276 2,276 2,276
Bond Interest 2,253 2,075 1,966 1,926 1,926 1,926
TOTAL GENTLE DENTAL 4,202 4,202 4,202 4,202 4,202 4,202
PROCON TIF
Bond Principal 8,333 10,601 9,064 9,467 9,467 9,467
Bond Interest 10,829 8,561 10,098 9,695 9,695 9,695
TOTAL PROCON TIF 19,162 19,162 19,162 19,162 19,162 19,162
2007 2008 2009 2010 2010 2011
Actual Actual Actual Budget Projected Budget
COMMUNITY REDEVELOPMENT AUTHORITY
FY 2010 - 2011 BUDGET
WALNUT HOUSING PROJECT
Other Expenditures 10
Bond Principal 24,722 33,055 35,321 39,151 39,151 39,151
Bond Interest 37,185 41,417 39,151 35,321 35,321 35,321
TOTAL WALNUT HOUSING PROJECT 61,917 74,472 74,472 74,472 74,472 74,472
BRUNS PET GROOMING
Bond Principal - 9,536 9,575 4,986 4,986 4,986
Bond Interest - - - - - -
TOTAL BRUNS PET GROOMING - 9,536 9,575 4,986 4,986 4,986
GIRARD VET CLINIC
Bond Principal - 6,242 4,940 4,940 4,940 4,940
Bond Interest - - - - - -
TOTAL GIRARD VET CLINIC - 6,242 4,940 4,940 4,940 4,940
GEDDESST APTS - PROCON
Bond Principal - - 1,195 1,195 1,195 1,195
Bond Interest - - - - - -
TOTAL GIRARD VET CLINIC - - 1,195 1,195 1,195 1,195
SOUTHEAST CROSSINGS
Bond Principal - - 8,866 8,866 8,866 8,866
Bond Interest - - - - - -
TOTAL GIRARD VET CLINIC - - 8,866 8,866 8,866 8,866
POPLAR STREET WATER
Auditing & Accounting - - - - 1,000 -
Bond Principal - - - - - -
Bond Interest - - - - - -
TOTAL GIRARD VET CLINIC - - - - 1,000 -
TOTAL EXPENSES 1,123,025 526,795 531,658 1,759,783 1,358,183 1,109,833
Item X1
Review of Proposed FY 2010/2011 City Single Budget
Tuesday, August 03, 2010
Special Meeting
City of Grand Island
Staff Contact: Jeff Pederson
City of Grand Island City Council
Working Together for a
Better Tomorrow. Today.
July 13, 2010
Honorable Mayor and City Council
Submitted herewith for your consideration is the City of Grand Island 2010/2011
Proposed City Budget. This document represents the City’s financial plan for the
upcoming fiscal year beginning October 1, 2010, and it reflects a comprehensive process
of allocating resources to programs that have been prioritized as important to the
achievement of outcomes associated with Key Result Areas that have been identified by
the City Council.
The importance of this “prioritization” process lies with the recognition of the
growing annual imbalance between current revenues and annual operating expenses that
was first illustrated with the use of the Financial Trend Monitoring System (FTMS) for
the years of 1998-2008. FTMS information fulfilled much of the fiscal “diagnostics” that
brought to light the weakening of the City’s fiscal health over that period, resulting in a
realization that new thinking and new strategies were needed to achieve long-term
financial sustainability.
Annual increases in operating expenses for General Fund programs have outpaced
growth in operating revenues in recent years, and the City became reliant upon reserve
appropriations to balance the budget. With the reserves being reduced to a level within
the range of acceptability, and with revenue growth slowing due to economic conditions,
reductions to program spending are necessary to meet the fiscal reality that requires the
City to “spend within our means”.
PRIORITIZATION
Against the backdrop of these revenue constraints, a new process was needed to
thoughtfully develop the 2010/2011 Budget. Program Prioritization is intended to be a
more progressive strategy in response to budget reductions than traditional “across the
board” budget cuts that many governments employ in an effort to treat cuts “equitably”
among departments. The logic here is that “core” services and programs should not be
cut at the same level as less important programs, any more that one would make a
reduction to a household mortgage payment before seeking to trim discretionary expenses
such as eating out and entertainment.
Drawing on experience from other communities, the City endorsed Program
Prioritization in the broader context of resource management with a special emphasis on
Office of the City Administrator
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Programs rather than on line items or on entire departmental budgets. This new focus
is expected to result in better decisions for resource allocation through careful evaluation
of each program and service; understanding those services better within the context of
local priorities; providing a higher level of understanding among decision makers,
enabling them to rank services based on community priorities and clearly articulating
how services are valued and funded.
Result Maps
Without formal guideposts to navigate the prioritization process, the City Council and
management team spent two evenings identifying the Key Results that the City is in
business to achieve. Department Directors then inventoried all programs for the purpose
of articulating a cause and effect relationship between programs and the Key Results. A
formal scoring process was then used to accurately value all programs relative to their
influence on achieving Results. Programs were scored by a multitude of factors
including whether the demand for the service was increasing or decreasing, whether
program costs were covered through charges or fees, whether a governmental mandate
for the program existed, and others.
Five areas deemed most vital for the City of Grand Island Government to impact,
called “Result Maps”, were deve loped.
1.) Safe Community
2.) Quality of Live
3.) Strategic, Sustainable and Maintained Development
4.) Stewardship of the Environment
5.) Governance
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Departmental Budget Targets
The scoring process allowed programs to be ranked within each Department, and the
array of program rankings was divided in to four quartiles from which the relative
“importance” of all programs could be illustrated. With the need to reduce the General
Fund Budget by $1.9m, it became necessary to determine reduction targets for each of the
four quartiles. Budget reduction targets for operational departments were established
based upon the following schedule: Quartile 1 Programs; (2%) - Quartile 2 Programs;
(6.5%) - Quartile 3 Programs; (11%) - Quartile 4 Programs; (16%). Reductions were also
made to all four tiers for programs that fell within the “Governance” category, which are
by nature support/compliance departments and therefore experienced a maximum tier
reduction of 4%.
Overall Departmental targets were established by the cumulative impact of quartile
reductions applied to previous budget costs for respective programs, meaning that the
actual percentage reductions to Departmental budgets varied depending on the level of
program costs that fell within each of the four quartiles. It is important to note that
Department Directors were required to absorb expense increases attributable to employee
compensation within their new budget targets rather than having additional money
made available to fund such increases.
FORMULATION OF DEPARTMENTAL BUDGETS
The ranking of programs within the Program Prioritization process produced a re-
allocation of resources between Departments stemming from where respective programs
ranked in the four quartiles. The fact that $1.9m had to be cut from the General Fund
necessitated the need to include all program quartiles in the funding reduction, meaning
that even the highest level programs would have less funding in the new Budget. To
“protect” funding for Quartile 1 for example, would have resulted in greater reductions
for the other quartiles and also would have lessened the requirement for resourcefulness
and efficiency in preserving even the core programs associated with that Quartile.
Once given their respective budget targets, Department Directors were directed to
prepare a budget using program rankings as a “guide”, but not as an absolute. Many
reasons might exist why it might be wise to preserve a Quartile 3 program over a Quartile
4 program, therefore Directors were allowed to use their professional judgment to make
final determinations on resource allocations. The fact that the overall array for the
General Fund revealed a disproportionate amount of program expense associated with
Quartile 1 and Quartile 1 programs made the decision making process more difficult as
this was in fact a validation of the fact that previous resource allocation was closely
aligned with the new Result Areas.
Budget Format
The format of the Proposed Budget document has evolved to reflect the emphasis on
programs that is inherent in Program Prioritization. Again, we are confident that this new
focus will improve decision making at all stages of the budget including the deliberation
that will occur with the City Council.
The Budget book follows a similar sequence as in previous years, with the most
noticeable difference being the absence of expenditure line items for the respective
Departments and programs. While line item detail disclosed the “expense” of the
multitude of cost components of Departments, it did very little to assist in the
understanding of the “impact” or “value” of individual programs that are conducted
within a given Department. Therein lies the fundamental shift in emphasis in the
operational budget away from isolated cost components in favor of program impacts.
Budgets for each Department are presented by Program, with cost identified for
personnel expenses as well as for operating expense. Included in the Program
information is the Quartile within which the respective Program was scored, as well as
the FTE count for the Program. Importantly, included also is an Impact Statement that
describes any significant change in Program capacity due to a change in dollar
allocation.
BUDGET OVERVIEW
The 2010/2011 Proposed Budget for the City of Grand Island recommends total
combined operating and capital expenditures of $147,176,927, excluding
interdepartmental and inter-fund transfers. This represents an 8.27% decrease in
expenditures compared with the 2009/2010 Adopted Budget of $160,449,249.
The General Fund
Total proposed spending for the General Fund is $35,652,272, which is a decrease of
$1,805,210 from the previous year. Forecasted revenues for the new fiscal year are
projected to be $31,892,246, excluding inter-fund transfers. This represents a decrease of
2.04% compared to the amount budgeted for the current year, and an increase of
$1,355,787 over the actual amount projected to be received in the current fiscal year.
Sales Taxes is the single largest source of revenue for the General Fund and is
estimated at $13,457,800 for 2010/2011. While monthly sales tax collections for the
past two months have shown some recovery from the economic downturn, we believe it
is prudent to project that a full recovery will not occur in the next budget year and
consequently revenue from this source is projected to generate approximately the same
amount as it did two years prior. This is significant, as it essentially means that the
revenue source that comprises over 40% of the General Fund revenue stream will not
have contributed additional resources to meet expense growth.
This Proposed Budget presumes no increase to the mill levy for Property Tax,
although the amount of $320,600 in additional revenue from this source is expected to
accrue from increase in property valuation. Total revenue from Property Tax is projected
to be $5,118,000, which represents a return to a “flat line” fo r property taxes.
The pie chart that follows provides a comparison of the five major sources of General
Fund revenue. Total anticipated revenue for all sources combined is $31,892,246.
SUMMARY OF GENERAL FUND REVENUES BY SOURCE
The pie chart that follows shows the major expenditure categories for programs in the
General Fund, with personnel services being the largest slice at 65.8%. This category of
expenditure is especially noteworthy in the Proposed Budget, as a reduction in spending
of 2.54% or $611,190 is accomplished while still absorbing compensation increases
associated with annual wage adjustments for some employee groups and the continuation
of the merit-pay plan for all employee groups. A net reduction of 29.8 full-time
equivalent positions within General Fund Departments was necessary in order to meet
respective Department budget targets.
Of equal significance is the planned reduction of 10.31% or $1,016,620 in spending
for operating expenses compared to the prior-year budget. This reduction is attributable
to a combination of program reduction and increased operational efficiency.
GENERAL FUND EXPENDITURES
Enterprises
The Enterprise operations of the City include Electricity, Water, Wastewater
Treatment, Solid Waste, and Golf Course. The combined appropriation for these
operations is $85,715,535, compared to $96,413,317 budgeted for the prior year.
Each of these operations participated in the program prioritization process, including
development of program inventories and associated cost determinations. The enterprises
each operate on a “charge for service” basis that is intended to sustain all costs of
operations. While budget reduction “targets” were not deemed necessary for the
enterprises, the Program Prioritization process was nonetheless used to assess funding
priorities within these operations.
Capital Improvements Plan
The Capital Improvements Plan is included with the Proposed Budget, and it is
intended to address the necessary capital needs of the City. The proposed expenditure for
CIP projects is $4,217,081, which includes $1,100,000 for a major renovation of Lincoln
Park Pool that would necessitate a public referendum for bonding authorization. Other
major projects include continuation of the Northwest Drainage Project, the CCC to Wood
River Diversion Project, a roundabout on Capital and North Road, and completion of the
Veterans Athletic Complex.
Revenue to complete the 2010/2011 CIP is comprised of $1,193,066 from current
operating revenue (including State Gas Tax), $555,400 from Special Assessment re-
payments and Keno, and $2.468.615 from the issuance of bonds. The use of debt-
financing is projected to be necessary over the next five years as a “bridge” to 2016 when
debt payments on the Library and the Police Building will be completed and revenue
currently dedicated to those will become available for CIP funding.
Summary & Acknowledgements
In spite of employee expense increases and the non-availability of reserve
appropriation, the City is able to present a balanced budget for the General Fund for next
year through a combination of measures, including:
* Reducing levels of services for various programs, with corresponding recommended
staffing reductions (including conversion to outsourcing)
* Increased efficiency/effectiveness through position realignment
* Increased operational efficiencies through reduction to operating expenditures
* Increased charges for services to more nearly reflect actual costs
The declining financial health of the City, exacerbated by the effects of the economic
downturn on City revenues, necessitated a shift in direction and approach to budget
development. I wish to commend the City Council, Department Directors, Division
Heads, and budget staff for responding to this challenge through the implementation of
the Program Prioritization process as a primary means to pursue fiscal health and
wellness for the City.
The conversion has been a major undertaking, and countless hours were spent at each
stage in the process. There are some reductions to programs, and the process of reducing
nearly $2m from the General Fund has brought about the painful reality of some position
cutbacks. This Proposed Budget does represent a continued commitment to quality
programs and services while also committing to investment and reinvestment in quality
facilities and infrastructure.
Jeff Pederson
City Administrator