Transcript City of Lowell FY 2011 Proposed Budget Presentation to the Lowell City Council June 8, 2010

City of Lowell
FY 2011 Proposed Budget
Presentation to the Lowell City
Council
June 8, 2010
Summary
•Operating budget is $266 million, a 0.6%
increase over last year
•Total spending is $336 million, inclusive of
enterprise funds
•Increases city contribution to school funding by
$1.17 million
•Includes contractual salary obligations that were
previously deferred
Revenue
2011 General Fund Revenue Makeup
Local Receipts
7.5%
General Aid
8.9%
Other
1.7%
Prior Tax Levy
35.3%
MSBA Reimbursement
4.2%
Levy Growth
1.1%
Chapter 70
40.6%
New Growth
0.6%
Revenue: Local Aid
• Total local aid is projected to decrease by $4.6
million in FY11
– Chapter 70 School Funding is projected to
decrease by $3 million
– Unrestricted local aid is projected to decrease by
almost $1 million
• Local aid has been cut from $154.8 million in FY08
to $139.5 million in FY11
• Net general aid constitutes $11.4 of that $15.3
million reduction
Revenue: Local Aid
N et State A id (Excluding Scho o l B uilding A ssistance)
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
1990
1991
1992
1993
1994
1995 1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Sour c e: C her r y Sheet s
Net Gener al Aid
Net Sc hool Aid
2006
2007
2008
2009
2010
2011
Revenue: Property Tax
• Property taxes are still approximately $5 million
below the levy limit
• New growth of $1.7 million
• Average single family tax bill is significantly
lower and growing at a slower rate than the state
average
Revenue: Property Tax
Average Single Family Home Tax Bill
$5,000
$4,500
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Lowell
Massachusetts
Revenue: Property Tax
Current Tax Levy as Percentage of Maximum
100
95
98.23
90
95.4
85
80
75
70
65
60
55
50
State Average
Lowell
Revenue: Local Receipts
• Projected to decrease by $700,000
• Motor Vehicle Excise projected to
decrease by $50,000
– small number, but a barometer of the general
economy
• Building permits projected to increase by
$150,000
Expenditures: Overview
• Increases in fixed costs and employee benefits
– Comprise 26.1% of the General Fund budget
– Health insurance rates have risen 10%
• Previously deferred salary increases will go
into effect
• Majority of expenditures go towards schools
and fixed costs
Expenditures: Overview
General Fund Expenditures By Category
Trash Removal
2.0%
Departmental
Expenses
3.1%
Claims & Judgments
0.3%
Street Lighting
0.3%
Snow & Ice
0.2%
Payroll
16.7%
Schools
47.8%
Fixed Costs/Benefits
29.5%
Management Decisions
• Elected not to fill most vacancies since 2008
– Results in decreased benefit costs in addition to salary
savings
• Executed long-term fixed price contracts for both
electricity and gas which have saved the City
hundreds of thousands of dollars
• Adopted conservative borrowing practices
• Implemented energy conservation measures
• Reorganized departments to increase efficiency with
no increase in costs
Management Decisions
• Renegotiated our solid waste program
• Increased our ambulance cost reimbursement
• Renegotiated both the Lowell Spinners and our tow
contracts
• Transferred the Tsongas Arena to UMass Lowell
• Purchased our streetlights
• Adopted the local option hotel and meal taxes
• Extended the pension liability deadline to 2040 in
order to smooth out substantial losses
Personnel Decisions
• Our voluntary layoff incentive programs
resulted in fewer involuntary layoffs
• City staff, both union and non-union, made
significant concessions in 2009 and 2010
• Took steps to move employees out of more
expensive healthcare plans
• Secured grants to retain Public Safety staffing
• Adopted Chapter 32B, Section 18A
Staffing
Employment
909
911
893
General Government: -11%
Public Works: -32%
Public Safety: -4%
808
2007
2008
2009
2010
815
2011
Staffing
• Many previously eliminated positions will
not be returning
• Employees are being asked to do more with
less
• The fiscal crisis will have long-lasting
ramifications for municipal government,
requiring employees with different skill sets
and flexibility
Schools
• Schools are facing a $3 million decrease in state
funding
• 1st time in over a decade that the City has met its net
school spending obligation
• The City is increasing its contribution to the school
system by over $1 million
• Working jointly with the schools, identified over $1
million in potential energy savings
• Extended the health care open enrollment period by
two weeks
Schools
$160,000,000
$140,000,000
Gap between general
spending and school
spending is increasing
$120,000,000
$100,000,000
$80,000,000
$60,000,000
Gap between fixed costs
and general spending is
decreasing
$40,000,000
$20,000,000
$0
2004
2005
General Spending
2006
Maintenance of Effort
2007
Fixed Costs
2008
2009
School Spending
Enterprise Fund: Water
•Insufficient reserves to
balance the Water
Enterprise Fund
2011 Water Fund Revenue Makeup
Misc Revenue
2.3%
Reserves
8.3%
•Rate increase necessary
to ensure sufficient
revenue
•Rate increase must be
approved before DOR
will set tax rate
Rate Revenue
89.4%
Enterprise Fund: Water
2011 Water Expenditures By Category
Benefits
11.1%
Debt Service
34.2%
Allocated Costs
4.9%
Payroll
20.0%
•Debt service is largest
expenditure = 34.2%
•Large debt service is the
result of $19 million in
improvements the Council
authorized in 2007
•Operating costs have
remained stable
Expenses
29.8%
•Projected increase in future
debt service payments
Enterprise Fund: Wastewater
2011Wastewater Fund Revenue Makeup
Other
0.8%
Reserves
27.1%
Rate Revenue
55.3%
•Operating revenues
constitute 70.9% of needed
revenue
•Adequate reserves to make
up shortfall this year
•Rate increase is needed to
address structural deficit
Septage
4.3%
Town Billing
12.5%
•Intermunicipal agreements
will be renegotiated soon
Enterprise Fund: Wastewater
2011 Wastewater Expenditures by Category
Payroll, 14.40%
Expenses, 34.10%
Benefits, 7.20%
Allocated Costs,
5.70%
Debt Service,
38.50%
Enterprise Fund: Parking
•Operating revenue
covers 94.3%
•50% of current
reserve funds will be
used to balance
budget
•Structural balance
will need to be
addressed through
rate increase
2011 Parking Fund Revenue Makeup
Fine Revenue
18.9%
Meter Revenue
6.9%
Reserves
5.7%
Garage/Lot
Revenue
68.5%
Enterprise Fund: Parking
2011 Parking Expenditures By Category
Benefits
3.4%
Allocated Costs
Payroll
3.3%
4.5%
•Recent debt means
payments will continue
well into the future
•Most operations are
outsourced
Debt Service
40.3%
Expenses
48.4%
•Operating expenses
should remain in check
through competitive
bidding
Looking Ahead
•Challenges
•Opportunities
City of Lowell
FY 2011 Proposed Budget
Presentation to the Lowell City
Council
June 8, 2010