HomeMy WebLinkAboutItem 02 Budget Check InAGENDA ITEM SUMMARY
Meeting Date:
11/7/2022
revenue generation strategies to bring back to Council to review in a future work
Meeting Type:
Work Session
ISSUE
Staff Contact/Dept.:
Nathan Bell/Finance
Council with an update on the five-year General Fund forecast and some of the
Staff Phone No:
541-726-2364
ATTACHMENTS:
Estimated Time:
30 Minutes
SPRINGFIELD
Council Goals:
Provide Financially
CITY COUNCIL
and the financial challenges the City is facing in the coming budget year and
Responsible and
beyond.
Innovative Government
Services
ITEM TITLE: BUDGET CHECK-IN
ACTION
Provide staff with guidance on whether to explore changes to service levels or
REQUESTED:
revenue generation strategies to bring back to Council to review in a future work
session.
ISSUE
As the City begins the fiscal year 2024 budget process, staff would like to provide
STATEMENT:
Council with an update on the five-year General Fund forecast and some of the
underlying assumptions.
ATTACHMENTS:
Attachment 1: FY24 Budget Check-in PowerPoint
DISCUSSION/
As the City begins its annual budget process in the Fall of each year, staff engages
FINANCIAL
Council with a conversation on an updated five-year forecast for the General Fund
IMPACT:
and the financial challenges the City is facing in the coming budget year and
beyond.
As with previous five-year forecasts, there remains a structural imbalance of
revenues not keeping pace with expenditures. Staff has made progress in narrowing
that gap through a number of initiatives over the past few years, primarily through
reductions in staffing, most recently in FY20 & FY21. However, this has shown
itself to be unsustainable, and 9 positions were added back to the budget in FY22 &
FY23. These positions are currently funded through ARPA funds. This funding
will end on December 31, 2024, and the positions will come back into the General
Fund half -way through FY25. These positions, as well the forecasted subsidies to
the Ambulance Fund, are the primary drivers of the large deficit spending in the
outer years.
Staff continue to be proactive in monitoring the condition of the City's General
Fund and identifying strategies to address this imbalance. Historically, this has
involved staff reductions through restructuring or process improvements. These
opportunities are becoming more challenging to find. The other options are service
level changes or new revenues. While the infusion of Federal ARPA funds has
shored up our finances in the near-term, it is important that we start the
conversations on potential solutions to have a plan in place by the end of ARPA
funding.
SPRINGFIELD
c�
OREGON
General Fund Forecast
General Fund Five Year Forecast
Total Operating Revenue
Operating Expenditures
Personal Services
Material & Services
Capital Outlay
Total Operating Expenditures
Fiscal Transactions
Transfer to Street Fund
Transfer to Ambulance Fund
Transfer to Development Assessment Capital Fund
Total Fiscal Transactions
TOTAL Expenditures
Current Operating Revenue over Expenditures
Beginning Cash
Ending Cash
FCST FCST
FY23 FY24
FCST FCST FCST
FY25 FY26 FY27
$ 42,215,811 $ 44,545,130 $ 45,938,080 $ 47,422,855 $ 48,745,984
34,269,811
35,907,691
37,909,696
39,739,505
40,665,669
7,512,878
8,029,074
8,374,237
8,643,464
8,920,768
94,300
100,000
100,000
100,000
100,000
41,876,989
44,036,765
46,383,933
48,482,969
49,686,438
471,000
501,816
516,870
532,377
548,348
250,535
693,274
822,130
1,056,916
1,055,941
56,312
56,312
56,312
56,312
56,312
777,847
1,251,402
1,395,312
1,645,605
1,660,601
42,654,836
45,288,167
47,779,245
50,128,574
51,347,039
(439,025)
(743,037)
(1,841,166)
(2,705,718)
(2,601,055)
10,336,767 9,897,742 9,154,705 7,313,539 4,607,821
$ 9,897,742 $ 9,154,705 $ 7,313,539 $ 4,607,821 $ 2,006,766
Ending Cash as a Percent of Operating Expenditures 24% 21% 16% 10% 4%
Attachment 1 Page 2 of 6
SPRINGFIELD
11L, OREGON
Assumptions
Revenue
• Baseline assessed value (AV) growth — 3% per year
• AV growth including Marcola Meadows and Enterprise Zone
expiration — 4% to 5.5%
• Average revenue growth across all accounts — 3.2%
Expenditures
• COLA assumptions for labor costs do not reflect current
inflationary environment — 3% average across all labor groups
• Materials and services is assumed to increase 5% in FY24, 4%
in FY25, and 3% in FY26-27
• Underspend - $800K per year
• Jail Medical contract increase - $200K of 600K per year
increase covered by General Fund
Attachment 1 Page 3 of 6
SPRINGFIELD
11L, � OREGON ARPA Funded Critical Positions
Fire Inspector (FLS) —fulfill IGA required position
EMS/Fire Instructor (FLS) —fulfill IGA required position
Deputy Police Chief (POL) —increase leadership capacity
Human Resource Specialist (HR) —support recruitment
activities
Training Coordinator (HR) —support training and development
Legislative & EcDev Analyst (CMO) —support legislative and
economic development activities
Senior Planner (DPW) —support unfunded state mandates
Programmer Analyst (IT)
improvements
software support and process
Attachment 1 Page 4 of 6
SPRINGFIELD
11L, OREGON
Considerations
• Inflation — cost of labor, material, and services
• Recession — impact on current and planned developments
• Telework — commercial vacancies
• Ambulance Fund — revenues not keeping pace with
expenditures
• Jail Medical expense — percentage of recovery through agency
lease contracts
• City facilities maintenance/replacement — not saving for future
facilities needs
Attachment 1 Page 5 of 6
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