Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
06-20-12 Item A: Sustainable Budget Discussion
ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Sustainable Budget Discussion Meeting Date: June 20, 2012 Agenda Item Number: A Department: Central Services Staff Contact: Jon R. Ruiz www.eugene-or.gov Contact Telephone Number: 541-682-5336 ISSUE STATEMENT This work session will provide the council with an opportunity to review and discuss development of a path to achieve a sustainable budget. This is part of the two-year strategy laid out by the City Manager to balance the budget over the FY13 and FY14 budget cycles. Information about potential new revenues sources and the need for new revenue will be presented and the City Manager will provide a framework for preparing the FY14 Proposed Budget. BACKGROUND New Revenues: Despite making more than $24 million in reductions in the General Fund budget over the past several years, growth in expenditures continues to outpace growth in revenues, resulting in a structural deficit. Each year during the budget process, the City has made adjustments, but the persistent economic recession has continued to affect our ability to fully close the gap. Through all of the recent budget cycles, we have had a goal of achieving first a stable and then a stable budget sustainable budget. A is one where the City can live within its means and fund all current services over the long run with sufficient revenues to cover these costs and maintain adequate reserves sustainable budget for unexpected events. A is one where the City can afford to fund all of the desired items that are not currently part of the service mix with sufficient revenues to cover the enhanced service levels while maintaining adequate reserves. In 2009, the City Manager convened a group of citizens into the Meeting the Challenge Task Force. The MTC Task Force was to recommend new revenue sources that, together with existing revenues, would help balance the General Fund budget. Their report is included as Attachment A. On April 18, 2011, the council held a workshop to discuss long-term financial sustainability. Councilors, members of the Meeting the Challenge Task Force and the City’s executive managers received information about past discussions on revenue sources and discussed various unfunded service needs. The group also discussed various potential new revenue sources and some of the factors to be considered in selecting an approach. During the FY12 budget process, the Budget Committee recognized the difficulty in sustainably funding human services at an adequate level. As a result, the committee recommended that the council form a subcommittee to explore options to secure an increased level of stable and long-term funding for human S:\CMO\2012 Council Agendas\M120620\S120620A.doc services in the community. The subcommittee presented its report to the council in April 2012. That report is included as Attachment B. In the FY13 Proposed Budget, the General Fund forecast was updated to show a $7 million budget gap (Attachment C). The City Manager set out a path to achieve a stable budget over a two-year period, starting with over $4 million in cost reductions and service changes in the upcoming fiscal year. The two-year plan also called for nearly $3 million more in further service impacts and cost reductions in FY14. In addition to addressing the funding shortfall for the current service mix, the council has also had discussions about several service areas where the current level is inadequate and should be increased in order to provide for good stewardship of public assets, to meet council goals and to address community desires for service level changes. Some examples are street maintenance, parks and recreation operations and maintenance and ambulance transport services. The Multi-Year Financial Plan, which was last updated in April 2011, provides information about various unfunded needs. The plan is included as Attachment C. There are many potential needs for new revenue sources and limited opportunities to ask voters to approve new funding. In addition, the City is not alone in facing budget deficits and the potential need to ask voters to support new taxes or fees. In the past, the council has engaged in discussions on the sequencing of financial measures that would be put forth to voters. As any discussions about potential new revenue sources advance over the next several months, it will be important to be strategic in developing an approach to citizens to ask for new funding, by also considering plans that Lane County or the school districts may have to request new funding. FY14 Budget : The City Manager created a different approach to developing the FY13 budget. The new approach presented budget strategies to the Budget Committee much earlier than in previous years so that the committee could provide input to the City Manager for the FY13 Proposed Budget. The trade- off for that early review and input was that the proposed budget document was significantly shorter than in past years. A different strategy may again be appropriate for development of the FY14 budget and the City Manager will present his approach at this council work session. RELATED CITY POLICIES Fair, Stable and Adequate Financial Resources A government whose ongoing financial resources are based on a fair and equitable system of revenues and are adequate to maintain and deliver municipal services. • A long-term sustainable budget • New or expanded revenue sources • Accessible and transparent financial information COUNCIL OPTIONS No action is requested, so no options are presented. CITY MANAGER’S RECOMMENDATION No action is requested, so no recommendation is presented. S:\CMO\2012 Council Agendas\M120620\S120620A.doc SUGGESTED MOTION No action is requested, so no motion is presented. ATTACHMENTS A. Meeting the Challenge Task Force Report dated January 22, 2010 B. City Council Subcommittee on Human Services Report dated February 3, 2012 C. General Fund Forecast dated April 13, 2012 (excerpt from FY13 Proposed Budget) D. Multi-Year Financial Plan dated April 14, 2011 FOR MORE INFORMATION Staff Contact: Jon R. Ruiz, City Manager Telephone: 541-682-5536 Staff E-Mail: Jon.R.Ruiz@ci.eugene.or.us Staff Contact: Sue Cutsogeorge, Finance Director Telephone: 541-682-5589 Staff E-Mail: Sue.L.Cutsogeorge@ci.eugene.or.us S:\CMO\2012 Council Agendas\M120620\S120620A.doc %XXEGLQIRX% 1IIXMRKXLI'LEPPIRKI *MREP6ITSVX .ERYEV] 1IIXMRKXLI'LEPPIRKI8EWO*SVGI1IQFIVW .SLR&EVSJWO] 1IVPI&SXXKI (EZI*YRO +IVV]+E]HSW .EVIH1EWSR+IVI +VIXGLIR4MIVGI 1MGLEIP6IHHMRK (EZMH8EQ .IER8EXI 1IIXMRKXLI'LEPPIRKI *SVXLIPEWXWIZIVEP]IEVWXLI'MX]SJ)YKIRI¬W+IRIVEP*YRHLEWFIIRTVSNIGXIHXSLEZIPEVKIHIJMGMXW FIKMRRMRKMR.YP]SJ*SYVQENSVJEGXSVWEVIGEYWMRKXLMWHIJMGMX 8LI'MX]¬W+IRIVEP*YRH[MPPFIVIWTSRWMFPIJSVTE]MRKXLIGSWXSJPMFVEV]STIVEXMSRWXLEXEVI GYVVIRXP]TEMHF]EPSGEPSTXMSRPIZ][LIRMXI\TMVIWMR.YRI 8LIGSWXSJIQTPS]II[EKIWFIRIJMXWERHVIXMVIQIRXGSRXMRYIXSMRGVIEWI 4VIZMSYWP]XLI'MX]LEWYWIHSRIXMQIQSRI]XSTE]JSVSRKSMRKWIVZMGIWXLEX[MPPRIIHXSFITEMH JSVF]XLI+IRIVEP*YRH ERH 8LIIGSRSQMGHS[RXYVR[LMGLFIKERMR LEWVIHYGIHXLIEQSYRXSJQSRI]XLI'MX][MPPFI EHHMRKXSXLI+IRIVEP*YRH 8LI'MX]1EREKIV¬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¬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§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§8LMWMWEXE\XLEX[SYPHFITEMHF]FSXLMRHMZMHYEPWERHFYWMRIWWIW%XE\ SJ [SYPHKIRIVEXIEXPIEWXQMPPMSRERRYEPP]EJXIVEHQMRMWXVEXMZIGSWXWERHEHNYWXQIRXWJSV PS[MRGSQIERHLMKLZSPYQIYWIVW-X[SYPHFISTXMQEPXS[SVOGSPPEFSVEXMZIP][MXLXLI)YKIRI ;EXIV XMEPTVSFPIQW[MXLXLMWSTXMSRIEVP]SR4MKK] FEGOMRKXLMWXE\SRERI\MWXMRKFMPPMRKW]WXIQWYGLEWXLISRIYWIHF]);)&[SYPHFIXLIQSWXGSWX IJJIGXMZI[E]XSMQTPIQIRXMX 'MX][MHI1SRXLP]*IIJSV7IVZMGI§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§7ITXIQFIV 1IQS 4VIZMSYWP]-HIRXMJMIH+IRIVEP*YRH6IZIRYI%PXIVREXMZIW§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¬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¬W+IRIVEP*YRH §%RI\GMWIXE\ETTPMIHXSXLITVMGISJEQYWIQIRXJIIWSV %QYWIQIRXSV%HQMWWMSRW8E\ EHQMWWMSRWXSWTIGXEXSVIZIRXWTIVJSVQERGIWWTSVXMRKIZIRXWJIWXMZEPWSVSXLIVJSVQW SJIRXIVXEMRQIRXSVEQYWIQIRX §-RGVIEWITVSTIVX] %RRI\EXMSRSJ%HHMXMSREP4VSTIVX][MXLMRXLI9VFER+VS[XL&SYRHEV] XE\VIZIRYIF]ERRI\MRKXE\EFPITVSTIVX]SYXWMHI'MX]PMQMXWFYX[MXLMRXLI9VFER +VS[XL&SYRHEV] §%JIIMQTSWIHSRETIVWSRTEVXRIVWLMTGSVTSVEXMSRSVWMQMPEVIRXMX]JSV &YWMRIWW0MGIRWI*II XLITVMZMPIKISJGSRHYGXMRKFYWMRIWW[MXLMRXLI'MX]SJ)YKIRI1E]FIEKIRIVEP FYWMRIWWPMGIRWISVWTIGMJMGEPP]XEVKIXIH §%XE\MQTSWIHSRETIVWSRTEVXRIVWLMTGSVTSVEXMSR 'SVTSVEXI&YWMRIWW+VSWW6IGIMTXW8E\ SVWMQMPEVIRXMX]JSVXLITVMZMPIKISJGSRHYGXMRKFYWMRIWW[MXLMRXLI'MX]SJ)YKIRI QIEWYVIHF]KVSWWMRGSQI[MXLMRXLI'MX]SJ)YKIRI §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§%TIVGIRXEKISJ 'SRXVMFYXMSRMR0MIYSJ8E\IW '-08 SR);)&;EXIV9XMPMX]6IZIRYIW KVSWWVIZIRYIW);)&VIGIMZIWJSVTVSZMWMSRSJ[EXIVYXMPMX]WIVZMGIW §-RGVIEWIMRXLIVERKISJWIVZMGIWJSV[LMGLXLI'MX] )\TERHIH-RGVIEWIH*IIWJSV7IVZMGI GLEVKIWJIIWERHSVMRGVIEWIMRXLIEQSYRXSJJIIWGLEVKIH §%XE\SR[EKIWERHWEPEVMIWIEVRIH[MXLMRXLI'MX]SJ)YKIRIGSPPIGXIH ,IEHSV4E]VSPP8E\ IMXLIVJVSQIQTPS]IVWSRXSXEPTE]VSPPSVJVSQIQTPS]IIWZMEETE]VSPPHIHYGXMSR §%RI\GMWIXE\PIZMIHSREFVSEHVERKISJSVWTIGMJMGKSSHWERHWIVZMGIWEXXLI 6IXEMP7EPIW8E\ TSMRXSJWEPI §%PMQMXIHHYVEXMSRXE\PIZMIHSREPPXE\EFPITVSTIVX]MRXLI 0SGEP3TXMSR4VSTIVX]8E\0IZ] 'MX] §%XE\SRMRGSQISJVIWMHIRXWSJ)YKIRIERHSRRSRVIWMHIRXWIEVRMRK 4IVWSREP-RGSQI8E\ MRGSQIMR)YKIRI8E\GSYPHFITMKK]FEGOIHSRWXEXIMRGSQIXE\ §2IKSXMEXIHXIVQ 4VMZEXI7IGXSV7TSRWSVWLMTSJ'IVXEMR'MX]*EGMPMXMIWSV7IVZMGIW WTSRWSVWLMTF]TVMZEXIWIGXSVMRHMZMHYEPWSVKERM^EXMSRWFYWMRIWWSVGSVTSVEXMSRWXS WYTTSVXWTIGMJMG'MX]JEGMPMXMIWSVWIVZMGIW §%RI\GMWIXE\SRWEPIWSJJSSHERHFIZIVEKIWMRXLIGMX]TEMHIMXLIVF] 6IWXEYVERX8E\ GYWXSQIVWSRXLIMVFMPPSVF]XLIVIWXEYVERXFEWIHSRKVSWWVIGIMTXW §%RI\GMWIXE\SRYXMPMX]WIVZMGIWYWIHF]VIWMHIRXWSJXLI'MX] 9XMPMX]'SRWYQTXMSR8E\ PIZMIHIMXLIVSREQSYRXSJGSRWYQTXMSRSVEWEJPEXTIVEGGSYRXJII %XXEGLQIRX& 4EKI 4EKI 4EKI 4EKI 4EKI 4EKI 4EKI 4EKI 4EKI 4EKI 4EKI 8VEHMXMSREPHIJMRMXMSR 8VEHMXMSREPLYQER SJLYQERWIVZMGIW WIVZMGIWTPYWEZIV] MRGPYHMRK,7'ERH FVSEHVERKISJWSGMEP HMVIGXGSRXVEGXW[MXL NYWXMGIERHIUYMX] TVSZMHIVW WIVZMGIWEGVSWWXLI GSQQYRMX] *YRHGYVVIRXLYQER *YRHGYVVIRXLYQER)\TERHXLISYXGSQIW WIVZMGIPIZIPWFYX WIVZMGIPIZIPWERHEGLMIZIH[MXLLYQER VIZMI[SYXGSQIWERH EGLMIZIGYVVIRXWIVZMGIWXSMRGPYHI WIIMJGLERKIWRIIHXS EHHMXMSREPKSEPW SYXGSQIWFIQEHI[MXLMRGYVVIRX JYRHMRK 4EKI 'MX]SJ)YKIRI&VSEHIV6IKMSREP 'MXM^IRWERH7IVZMGIW'SRZIVWEXMSR§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¬W*=4VSTSWIH&YHKIX 6IZIRYIERHWTIRHMRKIWXMQEXIWLEZIFIIRYTHEXIHJSVXLIQSWXGYVVIRXMRJSVQEXMSR8LIYTHEXIH JSVIGEWXWLS[WPS[IVVIZIRYIWMR*=ERH*=HYIXSPS[IVGSYVXJMRIVIZIRYIERH©SXLIVGLEVKIWª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¬WJMWGEPLIEPXL&]MRGSVTSVEXMRKXLI*=4VSTSWIH&YHKIXEGXMSRWXLI6IWIVZI JSV6IZIRYI7LSVXJEPPMWERXMGMTEXIHXSPEWXYRXMP*=[MXLSYXJYVXLIVEGXMSRWFYX[SYPHFII\LEYWXIH F]XLIIRHSJXLITIVMSH&]MRGSVTSVEXMRKXLI*=FYHKIXWXVEXIKMIWXLIVIWIVZI[SYPHVIQEMRMRXLI FPEGOEGLMIZMRKXLIXEVKIX VIWIVZIPIZIPSZIVXLIIRXMVITIVMSH +IRIVEP*YRH*SVIGEWX§)\LMFMX %XXEGLQIRX% *SVIGEWX:EVMEFPIWMRXLI*=XS*= +IRIVEP*YRH*SVIGEWX %WWIWWIH:EPYI§*=EWWIWWIHZEPYIKVS[XL[EWSRP] [LMGLVIQEMRWFIPS[LMWXSVMGPIZIPW 8LI*=EWWIWWIHZEPYIKVS[XLVEXIMWTVSNIGXIHXSFI [MXLXLIKVS[XLVEXIMRGVIEWMRKXS JSV XLIVIQEMRHIVSJXLIJSVIGEWX 4VSTIVX]8E\'SPPIGXMSR6EXI§8LITVSNIGXIHTVSTIVX]XE\GSPPIGXMSRVEXIMWIWXMQEXIHEX JSV *=ERHVIQEMRMRKEXXLEXPIZIPXLVSYKLXLIJSVIGEWXTIVMSH8LIEGXYEPGSPPIGXMSRVEXIWJSV*=ERH *=[IVI 4VSTIVX]8E\6IZIRYI§8SXEPTVSTIVX]XE\VIZIRYIMRGPYHMRKGYVVIRXERHHIPMRUYIRXXE\IWMWTVSNIGXIH EX QMPPMSRMR*= QMPPMSRMR*=ERH QMPPMSRF]*= EJXIVXEOMRKMRXSEGGSYRX XLIEWWIWWIHZEPYIGLERKIWERHTVSTIVX]XE\GSPPIGXMSRVEXIWI\TPEMRIHEFSZI );)&'SRXVMFYXMSRWMRPMIYSJXE\IW '-08 §6IZIRYIJVSQ);)&MWTVSNIGXIHF]);)&WXEJJEX QMPPMSRMR*=ERHGSRXMRYIWXSFYMPHXSQMPPMSRERRYEPP]F]XLIIRHSJXLIJSVIGEWX8LIWI IWXMQEXIWMRGSVTSVEXIJYXYVIERXMGMTEXIHVEXIMRGVIEWIWXLITPERRIHGPSWYVISJXLIWXIEQW]WXIQF].YRI SJERHJPEX[LSPIWEPIVIZIRYIWMRXLISYX]IEVW 0MGIRWIW ]YWIJIIWJVSQ5[IWX2;2+'SQGEWXERHSXLIVTVSZMHIVWEVI MRGPYHIHEXQMPPMSRMR*=MRGVIEWMRKXS QMPPMSRERRYEPP]F]*= -RXIVIWX)EVRMRKW§4SVXJSPMSMRXIVIWXIEVRMRKWEVITVSNIGXIHEX MR*= MR*=ERH WPS[P]MRGVIEWMRKMRXLISYX]IEVWSJXLIJSVIGEWXXS F]*= 7XEXI7LEVIH6IZIRYIW§8LMWVIZIRYIMWTVSNIGXIHXSMRGVIEWIJVSQQMPPMSRXSQMPPMSRSZIVXLI JSVIGEWXTIVMSH -RJPEXMSR6EXIW§-RJPEXMSRVEXIWFIKMRRMRKMR*=EVITIKKIHEXXLIMRJPEXMSRTIVGIRXEKIWYWIHF]XLI 7XEXI3JJMGISJ)GSRSQMG%REP]WMWMRXLIMV*IFVYEV]JSVIGEWX8LI*=XLVSYKL*=VEXIMW HIGVIEWMRKXS MR*=ERHJPYGXYEXMRKEXNYWXYRHIV XLVSYKLXLIVIWXSJXLIJSVIGEWX TIVMSH 'SWXSJ0MZMRK%HNYWXQIRXW§2SRVITVIWIRXIHIQTPS]IIWMRGPYHIE^IVS'30%MR*=ERHMRGVIEWIW EXXLITVSNIGXIHVEXISJMRJPEXMSRMRJYXYVI]IEVW-JEPEFSVGSRXVEGXMWMRTPEGIXLIJSVIGEWXMRGPYHIWXLI '30%TIVXLIGSRXVEGX-JRSGSRXVEGXMWMRTPEGIJSVETEVXMGYPEV]IEVXLIJSVIGEWXEWWYQIWXLI7XEXI 3JJMGISJ)GSRSQMG%REP]WMWMRJPEXMSRTVSNIGXMSRWJVSQXLIMV*IFVYEV]JSVIGEWX 1EXIVMEPW ERHWIVZMGIW[IVILIPHJPEXMR*=8LI*=VEXIMW ERH MRGVIEWIWFIKMRRMRKMR*=EVIXMIHXSXLIMRJPEXMSRTIVGIRXEKIWYWIHF]XLI7XEXI3JJMGISJ)GSRSQMG %REP]WMWMRXLIMV*IFVYEV]JSVIGEWX ,IEPXL&IRIJMXW§8LIJSVIGEWXMRGPYHIWELIEPXLFIRIJMXWMRJPEXMSRVEXISJ MR*=&EWIHSR TVIPMQMREV]TVSNIGXMSRWJVSQXLI'MX]¬WEGXYEV]XLIGSWXSJLIEPXLFIRIJMXWEVII\TIGXIHXSMRGVIEWI IEGL]IEVXLIVIEJXIV +IRIVEP*YRH*SVIGEWX§)\LMFMX %XXEGLQIRX% 6IXMVIQIRX'SWXW§8LIJSVIGEWXMRGPYHIWXLI4)67VEXIMRGVIEWISJ SJTE]VSPPMR*=ERH*= FEWIHSRXLIEGXYEVMEPZEPYEXMSRJVSQGEPIRHEV]IEVHEXEERHWYFWIUYIRXERIGHSXEP4)67EGXYEV] MRJSVQEXMSR%R34764VEXIMRGVIEWISJ SJTE]VSPPMWTVSNIGXIHMR*=ERH*=8LIVIEVIRS EHHMXMSREPMRGVIEWIWFYMPXMRXLMWFEWIJSVIGEWXJSV*= +VS[XLERH7IVZMGI%HHMXMSRW§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§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©KETWªERHPMOIP]JMWGEPGLEPPIRKIW *EGMPMXEXMSRSJERSVKERM^EXMSREPGYPXYVIJSV©XLMROMRKELIEHª 9RHIVWXERHMRKERH[IMKLMRKEPXIVREXMZIYWIWJSVXLI'MX]¬WEZEMPEFPIJMRERGMEPVIWSYVGIW ,IPTXSEGGSQTPMWL'SYRGMP¬WKSEPSJ©*EMV7XEFPIERH%HIUYEXI*MRERGMEP6IWSYVGIWª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§WIXSJKVS[XLWXVEXIKMIWXSQIIXXLIGMX] W]IEVPERHRIIHW 4PERWSV4PERRMRK8IGLRMGEP8LIVI[MPPFIERIIHJSVWYFWXERXMEPXIGLRMGEPEWWMWXERGIXSHIZIPST 4SPMGMIW;SVOXLIWIJYXYVIMQTPIQIRXEXMSRQIEWYVIW8LMWMXIQHSIWR¬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¬W'ETMXEP&YHKIXJSVXLI JSPPS[MRKX[S]IEVW-XEPWSWIVZIWEWEPSRKXIVQTPERRMRKXSSPJSVYRJYRHIHWQEPPSVPEVKIGETMXEPTVSNIGXW 8LI1=*4MWTVIWIRXIHF]XLI'MX]¬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¬W*MRERGMEP1EREKIQIRX+SEPWERH4SPMGMIWXLEXETTP] XSGETMXEPTVSNIGXWERHEVIZMI[SJXLI'MX]¬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