2004 Performance Based Budget - Laserfiche WebLink

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and lottery proceeds. These funds are distributed to cities within the state based upon complicated formulas that take into consideration the City's pay-as-you-go pension costs, funding for statewide pension plans and several other variables. As reported for the past several years, the City's Police and Fire Pension Funds continue to experience fiinding shortfalls as a result of the increasing number of retirees that are receiving pension benefits coupled with the base pay increases for the Police and Firefighters on which the pension payments are determined. Recent changes enacted by new state pension laws have had a positive impact on the overall funding of these funds. In 2001, the General Assembly enacted SEA 260 which guarantees that 50% of the pension payments the City makes will be reimbursed by the State in the current year. This law provides for this type of distribution through 2007. Also enacted in 2001 is SEA 524 that distributes the interest earned on the Public Deposit Insurance Fund. The total budgeted, for both pension funds, in 2004 is $450,000 for this new revenue source. The grants received from local, state or federal agencies are generally one year commitments and thus projecting this stream of revenue with any degree of certainty is difficult. As mentioned in other sections of this document, the City is committed to preserving its cash reserves and investing these fiords in order to maximize investment returns. As a resuh, the City is budgeting 2004 revenues from investment income of approximately $1.3 million. The City has assumed an overall investment rate of 1.2% for 2004. Historically, the City has been very conservative in its interest income revenue projection. Through fiscally responsible cash management and sound 'investments, the City once again believes that its 2004 interest income budget will be met and exceeded. 2(104 EXPENDITURE BUDGET -SIGNIFICANT ISSUES AND ffiGHLIGHTS The 2004 Operating Budget is balanced and financially conservative. It continues the City's commitment to provide high quality, dependable services while directing available resources to service areas experiencing the greatest demand. The trend is to build upon what has aheady become a strong base. This budget addresses current and future community needs and balances service demands with conservative financial management. The City continually strives to "live within its means" while providing strong, responsible leadership and offering efficient city services. Early on in the budgeting process, the Mayor set forth general guidelines that were communicated to department managers and fiscal staff before budgets were submitted to the City Controller. The Mayor emphasized his expectations of sound financial and operational decision making by his staff. He reminded City Managers that each of the eight citywide goals must remain at the forefront while preparing this year's budget. The three key points that the Mayor stressed for the 2004 Operating Budget were as follows: no increases in staff unless new or expanded services were to be added or additional costs were necessary due to legislative mandates; there was zero growth in the category of supplies (unless new services were to be provided); and zero growth in expenditures for the other services category (unless new services were to be provided). As a result, the City has budgeted the costs anticipated to fiend all the services it currently provides as well as a few programs that have been modestly expanded No services have been eliminated in this year's budget. Traditionally, the City prepares a conservative budget which includes the assumption that all personnel positions are filled for the entire year. This is an important assumption to note since personnel costs (salary and benefits) represent 47% of the total 2004 Operating & Capital Budget. B-8