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Lake City Report - August 6, 2010
Budget Planning Complete - No City Layoffs

From City Manager Wendell Johnson

Fiscal Year 2011 City Budget

The City Council and Staff concluded the FY 2010/2011 Budget Workshop process this week. The Tentative and Final Budget Hearings for the new fiscal year are scheduled for September 7, 2010 and September 21, 2010.

The City’s budget deliberations started on March 29th and four budget workshops were held.  The City is meeting the challenges of a difficult budget year. Here are a few highlights:

Ad Valorem and General Fund Revenues.

The City will experience an approximate $30 million decline in Gross Tax Value for FY 2011. Overall, the City’s General Fund deficit is nearly $1.3 million. To compensate for the deficit, the City reduced its General Fund operating costs for FY 2011 by about $500,000 and will draw $787,000 from the General Fund reserve.  

Fund Reserves

All of the City’s fund reserves remain stable with positive balances within each fund. For FY 2011, the City has established a Water/Sewer Fund Reserve “set aside” to begin building these reserves to a more desirable level. The plan calls for a practice of setting aside no less than $250,000 annually to the Water/Sewer fund reserves. The General Fund Reserve remains at an acceptable level and again this year provides flexibility for withdrawal to sustain the City’s operational and capital needs in the face of declining revenues and escalating costs. 

Revenue Generation/Cost Reductions

The City established and/or is considering several opportunities for the coming year as a means to enhance the budget and to provide for improved services. Among the more significant of these initiatives, the “general purpose” vehicle fleet will begin transition this year under a new leasing program from Enterprise, Inc.

The first 30 vehicles will be operational by the end of September 2010. The transition of another 60-70 vehicles will occur during the next four years and the end result will be all general purpose vehicles will be on a five-year rotation. The expected savings of this initiative is $175,000 annually.

Another measure is the implementation of a “stormwater” assessment fee to fund the City’s already established Stormwater Utility Fund. The City will move forward with the evaluation of this opportunity and if feasible, the assessment will be effective during the first quarter of 2011.  If implemented, the projected revenue for the fund would be $350,000 to $450,000 annually which will be used exclusively for stormwater improvements and upgrades.

Personnel costs 

Hiring Freeze – Still in force for FY 2011 Lay Offs – No layoffs planned or expected. Merit Increases – Funding is in the FY 2011 budget for 25% of City employees to receive a 3% merit increase. City employees have not received COLA and/or merit increases for several years.

Health and Risk Insurance Costs

The City will evaluate health costs to minimize and or eliminate a proposed 12 to 18% cost increase ($250,000 - $400,000) on the existing health plan. The FY 2011 Budget does not account for any increase in health costs.

Debt Restructuring General Fund – Sales Tax Bond Series 1998 and 2000 were repackaged to generate $2,000,000 in new General Fund Capital Needs revenue. Utilities Fund – Utility Bonds Series 1996 and 2000 were repackaged to lower debt by $490,000 and generate $18,000,000 in revenue for Waste Water Treatment plant upgrades and improvements.

Capital Needs Funding (five-year schedule)

The City has established a relationship with the North Central Florida Regional Planning Council (RPC) to assist in preparing a five-year “Capital Improvement Plan” as an approach for identifying and funding the City’s most pressing capital improvement needs.

The RPC has agreed to provide services to prepare the project plan, which will involve upgrades to streets, walkways and drainage, as well as water distribution and sewer collection systems.

Funding will consist of Sales Tax Revenue, Utility User Fees, CRA Trust Funds, CDBG Funds, and Water/Sewer Enterprise Funds. The project timeline funding range is anticipated to be $4 to $6 million.

The City Staff Report is available in pdf format here.

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Read the City Manager's 2010 Budget and Administrative Report • here.


City Staff Report
 • Week ending August 6, 2010