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Memo to Manager (FY 15 Budget Highlights for Workshop) 8-11-14 pmCITY OF SOUTH MIAMI OFFICE OF THE CITY MANAGER INTER-OFFICE MEMORANDUM TO: The Honorable Mayor & Members of the City Commission FROM: Steven Alexander, City Manager COPY: Alfredo Riverol, CPA, Cr.FA, CGFM, CGMA, Chief Financial Officer DATE: August 11, 2014 SUBJECT: PROPOSED FY 2015 Budget Revisions as of August 11, 2014 As you are aware, the FY 2015 Proposed Budget as of August 2, 2014 was presented with the significant budget benefits (savings) resulting from the proposed outsourcing of the residential Solid Waste Division, along with the Motor Pool Division. Due to the Commission’s desire to maintain those respective services in-house, the City Administration was required to remove the approximate $650,000 in savings from the budget and revise the August 2, 2014 proposed FY15 budget to balance the Capital and Operating budget. Below please find proposed revisions and cuts to accomplish a balanced budget: REVENUES Although projected revenues remain essentially the same, as shown in the previous draft budget, the loss of some $650,000 in savings acts like a reduction in usable revenue of that same amount. Therefore, cuts needed to be made in planned expenditures; staff searched to identify any additional revenues. After further evaluation and discussions with the City’s Building Official, staff has increased the estimated Building Permit Revenue amount by $200,000 for a total estimated revenue amount of $750,000. For the past two fiscal years, revenues have exceeded the estimated building permit revenues. The City expects that with the continued increasing levels of construction and remodeling occurring throughout the City, estimated revenues will continue to stay in line with the actual received revenues for the past couple of fiscal years, including FY 2014. This is the only change to revenues staff could responsibly identify. EXPENDITURES City Commission’s budget was reduced $36,405 by eliminating the expenditure enabling elected officials the option of participating in the existing City-sponsored health plan. City Commission City Manager City Manager’s Office relocated the budgeted office support position to the Planning Department as part of reorganization. Furthermore, the proposed increase for the Assistant City Manager was reduced by one step on the City’s Pay Plan. Lastly, expenditure related to the ONESolution Community implementation and report development was reallocated to the MIS budget. The overall reduction in the City Manager’s proposed FY 2015 budget is $54,124. In an effort to uniformly account for all capital purchases and large acquisitions, the Virtualization Project was reallocated from the MIS Office to the CIP fund. MIS expenditures increased due to the reallocation from the City Manager’s Office of the ONESolution Community implementation as noted in the City Manager budget. The net impact of reducing the overall operating expense for the MIS Office is $61,189. Management and Information Service (MIS} The office supplies account for Central Services (Procurement Division) was reduced by $1,000. Central Services (Procurement Division) Within the Human Resource’s Office, a vacant full-time office support position has been eliminated; the employee assistance and citywide training programs were reduced; and, due to the Commission’s rejection of proposed outsourcing of solid waste, and therefore the reduction in authorized positions, the City reduced the unemployment compensation expenditure. Lastly, the City is currently awaiting quotes for the City’s insurance for property, auto, general liability, and workers compensation. The City Administration currently expects the City’s general liability insurance premium amount, along with the deductible, to be reduced due certain closed lawsuits and increased efficiencies; however, the addition of the Murray Park Swimming Pool may reduce or eliminate these potential savings. Currently, the staff has reduced the estimated general liability insurance premium amount. The total reduction for the Human Resource Office is $275,183. Human Resources As part of the reorganization within the City Manager’s Office, the Planning Department has eliminated a vacant planning assistant position and an office support position originally within the City Manager’s budget has been transferred to Planning to address their staffing requirements. Furthermore, the contractual services line item has been reduced for items, such as land development code revisions, traffic studies, etc. These revisions have reduced expenditures by $65,810. Planning Department Public Works Department Within the Building Maintenance Division, the City reduced the contractual services estimated expenditure for janitorial services in public buildings. In the Solid Waste Division, due to the recent departure of a tenured employee, certain restructuring occurred, thus reducing the Division’s personnel expenditure amount. In the Streets and Landscaping Division, the City eliminated a vacant full-time Maintenance Worker I position. Lastly, in the Engineering and Construction Division, the contractual services expenditure for City Welcome Signs and miscellaneous infrastructure improvements were reallocated to the CIP fund. The overall reduction in the Public Works Department is $126,545. The Police Department’s contractual services line item was reduced as was the supplies account due to the reduction in the proposed renovations within the police department facility. The overall reduction equals $21,000. Police Department The Parks and Recreation Department, which is responsible for three divisions: Parks, Community Center, and the new Community Pool, has gone through a major reorganization in an effort to provide greater efficiencies and become more efficient. A vacant Recreation Aide part-time position was eliminated and a full-time Recreation Leader position was reclassified to Administrative Secretary within Parks. Within the Community Center, three vacant part-time Recreation Aid positions and two vacant part-time Recreation Leader positions were eliminated. The proposed full-time Pool Supervisor was eliminated and a new Recreation Supervisor position was created within the Community Center, which will oversee many different park programs along with the Community Pool. Lastly, the Community Center’s supplies account was reduced due to the elimination of the expense related to new flooring in the Community Center. The overall expense reduction for the Parks Department is $103,687. Parks and Recreation Department In summary, the overall reduction in the General Fund expenditures for the August 11, 2014 Proposed FY15 budget when compared to the presented August 2, 2014 proposed FY15 budget is an estimated $744,943. The City’s “Difference Before Fund Balance,” which represents the City’s General Fund operating surplus/deficit amount from operations, is $113, hence creating a balanced proposed FY 15 budget, using the City Commission’s approved millage of 4.3639. Summary Lastly, in an effort to maintain an amount that is more in line with the GFOA’s recommended 25% for unreserved, unassigned fund balance, I am proposing that the City provide funding in the amount of $2,694,919 to the Emergency Reserve Fund to maintain 25% of the City’s annual Emergency Reserve Fund budget amount in this critical account. The amount of the proposed transfer is reflected within the City’s Non-Departmental transfer out line item. Please find attached the City’s Proposed FY 2015 Department & Division Budget with accompanying highlights as of August 11, 2014. The City Administration continues its analysis of the City’s proposed FY 2015 Budget and its structure and is continually evaluating possible changes necessary to continue providing the City’s residents with the best possible services at the optimum budget organization and philosophy, and the lowest possible costs. The City Administration’s intent is to always improve City Services using efficiencies and effectiveness. Therefore, City Management may make additional changes to the FY 2015 Proposed Budget that will serve to be beneficial to the City. Any such changes may include suggestions from the Commission Workshop on August 13 and will be presented before the first Budget Hearing in early September.