Finance Highlights 2006 0503 - Laserfiche WebLink

Home

FY 2006-07 Budget Planning May 1, 2006 Page 3 of 3 o The Engine replacement is based on a 5 -year lease purchase with an annual cost of $100k/year and $75k for equipment during the first year. Summary Revenue growth of $4.5 million exceeds the increase in expenditures by approximately $760k, which leaves a $733k operating shortfall from the previous structural deficit. This is balanced through the repayment of loans and advances owed to the General Fund. It is proposed that the additional loan repayments of $260k be used to replenish the economic uncertainty reserve. In summary, the FY 2006-07 Budget is Proposed as follows: FY 2006-07 General Fund In Thousands July 1, 2006 Available Reserves $12,909 Operations: Revenues $73,591 Expenditures (74,193) Interfund Transfers 153 Net of Operations $755 Loan Repayments: Used to Balance Operations $733 Used to Replenish Economic Uncertainty $260 Net Non -Operating Sources $993 June 30, 2007 Available Reserves $13,147 At this time, the slight structural deficit is manageable and may be grown out of or balanced with the repayment of loan obligations owed to the City's General Fund until revenue growth catches current expenditures. Cautiously, the FY 06-07 Proposed Budget is dependent on the passage of the Business License Tax measure, which will not be known until June 2006. With exception to the mentioned new programs, the budget maintains the same service levels, but does not address ongoing deferrals, long-term funding towards the City's retiree medical liability (approximately $15 million), and contains zero contribution to new CIP. Current deferrals include maintenance, repair and replacement in the following major areas: machinery, equipment, and vehicles; buildings and other facilities, street and overall pavement management; and technology. Long-term deferrals can often create an immediate response reaction where needs are only replaced when critical breakdown occurs, often creating a greater cost to the City. In addition to having a balanced General Fund Budget, the City's Self -Insurance Funds first annual contribution of $1.3 million towards the City's total unfunded medical retirement obligation is made possible from current savings in the litigation and claims settlement budget.