HomeMy WebLinkAboutItem 03 Budget Check In AGENDA ITEM SUMMARY Meeting Date: 10/26/2020
Meeting Type: Work Session
Staff Contact/Dept.: Nathan Bell/Finance
Staff Phone No: 541-726-2364
Estimated Time: 30 Minutes
S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals: Provide Financially
Responsible and
Innovative Government
Services
ITEM TITLE: BUDGET CHECK-IN
ACTION
REQUESTED:
Provide staff with guidance on potential strategies to address the long-term fiscal
health of the General Fund.
ISSUE
STATEMENT:
As the City begins the fiscal year 2022 budget process, staff is requesting guidance
on potential strategies for addressing a persistent structural deficit in the General
Fund. Expenditures continue to grow at a faster pace than revenues and the
reductions made in prior years are not making enough of an impact on this
structural imbalance. An updated five-year General Fund forecast will be presented
as information to inform the larger conversation.
ATTACHMENTS: Attachment 1: General Fund Five-year Forecast
DISCUSSION/
FINANCIAL
IMPACT:
As the City begins its annual budget process in October of each year, staff engages
Council with a conversation on an updated five-year forecast for the General Fund
and the financial challenges the City is facing in the coming budget year and
beyond. In June of 2020, Council adopted the FY21 budget that included a staff
recommended budget reduction of $478,000 in the General Fund. These reductions
were a first step in addressing the financial impact of Covid-19 as well as the
continued long-term structural deficit in the General Fund. While staff anticipates
making further reductions in the FY22 General Fund budget, the previous spring’s
budget reduction exercise clarified that we are coming to a point where further
reductions will impact outward facing services.
In addition to putting together a balanced FY22 budget, staff would like to also
begin the process of addressing the longer-term structural deficit. At its most basic
level, the options for addressing this imbalance are either new or increased revenues
or a reduction in expenditures that will most likely impact outward facing service
levels. Staff is requesting guidance on which path the Council would prefer staff to
focus on, recognizing it will likely take both to fully address the issue and it is a
question of what degree each one will be utilized.
General Fund 5‐Year ForecastRefresh Date: 10.19.20Actuals Actuals Actual Actual FCST FCST FCST FCST FCST FCSTFY17 FY18 FY19FY20FY21 FY22 FY23 FY24 FY25 FY26Total Operating Revenue (1)35,936,676 37,128,696 38,081,005 40,006,281 39,227,590 40,554,037 42,285,764 43,293,722 44,430,617 45,633,417Personal Services 27,943,949 28,622,368 30,347,735 31,424,511 32,652,519 34,104,321 34,961,370 36,114,070 37,214,967 38,703,565 Material & Services6,875,347 6,784,185 6,600,655 6,708,153 6,488,227 6,918,600 7,034,379 7,151,895 7,271,174 7,392,241 Capital Outlay435,803 124,025 234,649 165,894 74,300 74,300 74,300 74,300 74,300 74,300OPERATING EXPENDITURES35,255,098 35,530,578 37,183,039 38,298,558 39,215,046 41,097,221 42,070,049 43,340,265 44,560,440 46,170,106Fiscal TransactionsTransfer to Street Fund (2)415,501 423,873 436,006 412,038 453,750 467,363 481,383 495,825 510,700 526,021 Transfer to Ambulance Fund (3)‐ ‐ ‐ ‐ ‐ 565,914 1,037,237 1,210,117 1,296,219 1,444,770 Transfer to Reserve for ADA Projects (4)‐ 13,250 ‐ 100,000 100,000 ‐ ‐ ‐ ‐ ‐ Transfer to Building Preservation Reserve (5)‐ ‐ ‐ 400,000 400,000 ‐ ‐ ‐ ‐ ‐ Transfer to Special Revenue Fund (6)‐ ‐ ‐ 503,500 ‐ ‐ ‐ ‐ ‐ ‐ Transfer to Development Assessment Capital Fund (7)‐ ‐ ‐ 64,293 56,311 56,311 56,311 56,311 56,311 56,311 Debt Service532,103 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ FISCAL TRANSACTIONS947,604 437,123 436,006 1,479,831 1,010,061 1,089,588 1,574,931 1,762,253 1,863,230 2,027,102TOTAL Expenditures36,202,702 35,967,701 37,619,045 39,778,389 40,225,107 42,186,809 43,644,981 45,102,518 46,423,670 48,197,208‐266,026 1,160,995 461,960 227,892 ‐997,518 ‐1,632,772 ‐1,359,216 ‐1,808,796 ‐1,993,053 ‐2,563,791Beginning Cash8,666,256 8,574,037 9,735,032 10,196,992 10,424,884 9,427,366 7,794,594 6,435,378 4,626,582 2,633,529Ending Cash8,400,230 9,735,032 10,196,992 10,424,884 9,427,366 7,794,594 6,435,378 4,626,582 2,633,529 69,738Ending Cash as a Percent of Operating Expenditures 24% 27% 27% 27% 24% 19% 15% 11% 6% 0%7.) Repay F419 for BOARD software purchase6.) Transfer to Special Revenue Fund of Tech Fee Reserve, Library grant award and CMO special events budget. Expenditures Current Operating Revenue over ExpendituresREVENUE NOTES:* 1.) $200,000 transfer‐in from Both Kelly Fund removed in FY21 through FY25. Booth Kelly Fund forecast suggests that the fund cannot sustain this transfer. $100,000 Tech Fee has been revenue removed starting in FY20 due to move to Special Revenue Fund 204. 1.) One time Comcast property tax settlement revenue ($540,000 ‐ FY19) and franchise fee underpayment ($61,404 ‐ FY20) have been excluded from operating revenues in those years. FISCAL TRANSACTIONS NOTES:2.) This transfer represents the ROW use fee charged by the Street Fund to the Stormwater and Sanitary Sewer Funds. The fee is 5% of total revenues but 3% is transferred to the Street Fund to support work in the ROW. 3.) This transfer is an estimate based on the level of need projected in the Ambulance Fund in FY21. Additional transfers may be needed in future years. 4.) Transfer to reserve in the Development Projects Fund 420 to fund projects listed as needed in the City's ADA transition plan. 5.) Transfer to a reserve in the Vehicle and Equipment Fund 713 to save for building maintenance and preservation projects at City owned buildings. Attachment 1, Page 1 of 1