City of Sunrise FY 2012 Budget Commission Workshop

July 7, 2011

General Fund

Budget Balancing Strategies

After five years of revenue declines the low hanging fruit is gone Budget balancing strategies now must focus on reducing personnel costs
Pension and health insurance benefits Salaries Staffing levels Contracting services where appropriate

5-Year Initial Budget Projections General Fund Revenues vs. Expenditures

FY 2012 thru 2016

10-Year History
Taxable Property Values
Billions $7.0 $6.5 $6.0 $5.5 $5.0 $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Revenue History
Ad Valorem Taxes: $1.3 million loss next year at current millage rate of 6.0543; $7.2 million loss since FY 2007 Building Revenues: up $130,000 from last year; down $1.9 million since FY 2007 Planning Revenues: same as last year; down $770,000 since FY 2007 Revenue Loss (excluding interfund transfers) is estimated at $2.14 million from last year and $9.24 million from FY 2007
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General Fund: Significant Increases Fiscal Year 2011 to FY 2012

Pension costs: $2.6 million Health Insurance: $513,000 Salaries & Wages: $2 million Other Operating: $3.6 million Excluding non-departmental appropriations, the cost for general fund departments is estimated to increase $7.31 million over last year and $26.3 million from FY 2007
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FY 2012 Budget General Fund Revenue Options

Policy Options--Revenues
Rollback Millage Rate
Rate of 6.2519: Increase of 0.1976 mils generates approximately $921,000 Decreasing property values results in a loss of approximately $1.3 million at current millage rate

Fire Assessment
Each $10 increase generates approximately $515,000

Summer Camp Fees

A $100 increase generates approximately $80,000

FY 2012 Rollback Rate Analysis Single Family Homesteaded Property

Over the past 5 years
For a non-senior taxes go down $49 dollars For a senior citizen, taxes go down $210 July 1 property values indicate overall decreased values of 2.4%

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FY 2012 Rollback Rate Analysis Condo Homesteaded Property

Over the past 5 years
For a non-senior taxes go down $86 dollars For a senior citizen, taxes go down $246 July 1 property values indicate overall decreased values of 2.4%

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Rollback vs. Current Mil Rate

Average Value Homesteaded Property
Property Class/Type Single Family, Non-Senior Single Family, Senior Condo, Non-Senior Condo, Senior Estimated Taxes at Rollback Rate $666 353 340 27 Estimated Taxes Annual Difference at Current Rate (Cost of Rollback) $645 342 329 26 $21 11 11 1

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Effect of Falling Property Values

Sun-SentinelMany Pay No Property Taxes
A reported 4,362 properties are exempt in Sunrise

Fire Assessment Comparison

Residential Rates--Current Fiscal Year

Average is $174.38

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FY 2012 Budget General Fund Expenditure Options

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Progress Has Been Made in Reduction of Future Personnel Costs

715X reductions for management Reduced COLAs in subsequent bargaining unit contracts Lump sum for General Employees Health insurance un-blending & cost sharing (making HMO the base City-paid benefit)*

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General Employees Pension (New Employees)

Vesting period increased Normal retirement age increased from 58 to 62 Benefit multiplier decreased from 4% and 2% to a 2.5% multiplier for all creditable service Reduced rate of return for new DROP participants (for all employees) Normal cost of plan will be reduced by 10%

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Reduced Benefits for New Management Employees

Elimination of 401a Plan Health insurance cost sharing (HMO base benefit)* Dental, catastrophic illness, and intensive care insurance are no longer provided at City cost Reduced life and AD&D insurance, retiree health insurance Elimination of long term care subsidy Greater parity with General Employees
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Police Officers Benefit Changes

Health insurance cost sharing (HMO Base)* Reduction in Tuition Refund program Changed definition of average final compensation Reduced rate of return for new DROP participants New 7th year of DROP (earnings are recalculated at a lower rate of return)
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The Path Forward

The six-year trend: revenues decreasing at an average annual rate of 1.5% but expenditures increasing at an average annual rate of 5.7% Balancing can be accomplished by using reserves, increasing taxes/fees, reducing expenditures, or some combination of these three

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Expenditure Policy Issues for FY 2012

Leisure Services Privatization
Transportation Aquatics

Evaluate moving sworn police officers from Administration to Road Patrol Eliminate COLAs Reduce future merit increases

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Use of Reserves
Sound financial management advises that reserves be used for non-recurring expenses and generally not for operations. Notwithstanding the above, it must be noted that current economic conditions for local governments are both extreme and unusual.

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Unreserved, Undesignated Fund Balance

FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 $34.9 37.4 44.6 44.6 40.2 FY 2005 FY 2004 FY 2003 FY 2002 FY 2001 40.6 34.5 29.8 22.7 22.0

Use of Reserves
Retained earnings is what we saved (operating revenues minus operating expenses) and is $2.4 million from FY 2010 Unless significant revenue increases or expenditure reductions occur, balancing the budget will only be accomplished through use of reserves/fund balance

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Capital Improvement Fund

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Capital Projects (Fund 325)

Active in FY 2012
Project Name/Description
Public Works Facility & L.S. Storage Open/Greenspace Improvements Civic Center Pool Splash Pad Sunrise Lakes Phase I Park Various Facilities Improvements Hiatus Road Wall Civic Center Pool Improvements SAC Concession Stand Press Box
Project Number 6290 6407 6465 6453 6464 6287 6404 6466

FY 2012 Funding
8,768,781 7,032,857 1,382,522 563,447 522,944 505,000 640,957 389,921

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Capital Projects (Fund 325)

Active in FY 2012
Project Name/Description
Entry Signs Shade Canopies for Park Bleachers Miscellaneous Wall Repairs Fire Station Repairs Traffic Calming City Hall Landscaping Restoration
Project Number 6274 6459 6445 6442 6463 6207 6444

FY 2012 Funding
299,859 227,331 126,120 108,668 76,909 68,922 56,274

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Capital Projects (Fund 325)

Active in FY 2012
Project Name/Description
NW 44th Street Streetscape Improvements Childrens Playground (Soccer Club) Waterbridge Wall (additional funding) Sunblest Wall (additional funding)
Project Number 6439 6457

FY 2012 Funding
20,000 6,636 260,000 1,300,000

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Budget Workshop
Utilities Department
(Water, Wastewater & Gas)
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Proposed Changes for Water/Wastewater

Department restructuring continues from FY 2011. Position changes are generally intended to meet broad operational objectives:
Flatten the organization and provide resources needed to perform work in the field Reduce the number of senior level & specialized plant operations positions, replacing them with Utility Operator positions Create a more maintenance-centric and focused operation Provide resources needed to manage the capital improvement program (CIP)

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Proposed Changes for Gas

Continue efforts to provide redundant gas supplies through interconnections with other gas providers Eliminate one unneeded staff position Provide resources needed for gas system expansion and maintenance Continue successful marketing efforts

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Water/Wastewater C.I.P.
Maintain 5-year capital improvement program (CIP) costs similar to FY 2011 As needed, revise the schedule of projects, as well as their prioritization and timing, based on changes in operational needs and regulatory obligations To the extent possible, direct resources toward irrigational reuse rather than Floridan aquifer development and treatment

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Water/Wastewater Rates
Automatic CPI adjustmentsincrease for FY 2012 currently projected at 5.7% Revenue sufficiency study calls for additional rate adjustment in FY 2012; staff is working with the Citys rate consultant to update the projected revenue requirements Need to evaluate additional rate adjustments to fund future debt issuance and offset additional borrowing

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Other Funds and Major Issues

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Other Funds
The budgets are balanced with no significant outstanding issues

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Springtree Golf
The course was renovated and operations turned over to a private contractor to increase service and reduce the General Fund subsidy
The subsidy is estimated at $803,100 for FY 2012 (lowest in 7 yrs)
General Fund Subsidy
$1,300,000 $1,200,000 $1,100,000 $1,000,000 $900,000 $800,000

$700,000
$600,000 $500,000

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011* FY 2012*

Designated Fund Balance: Economic & Job Growth

$16.8M was designated for economic & job growth Under new GASB rules this funding must be earmarked by the City Commission Recommendations are:
$10.0 million for Economic Development $ 6.8 million transfer to Capital Projects Fund for future City Hall project
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Sanitation Update
The Resource Recovery Board has adopted a tipping fee of $72.57 for FY 2012, a reduction of $26.63 (27%) from the FY 2011 tipping fee of $99.20 The reduced tipping fee will save Sunrise Class I customers (single family) $3.22 per month and Class II (multi-family) customers $1.12 per month, for a total of approximately $1.2 million annually The Interlocal Agreement (ILA) with the County and Contract Communities is scheduled to expire on July 2, 2013 Sunrise staff is working to enhance programs and public outreach related to recycling, electronics recycling, and disposal options for household hazardous wastes (HHW)

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Next Steps
Proposed millage rate and preliminary fire assessment set at the July 12th Regular CCM Proposed budget delivered to Commission by August 1, 2011 First budget hearing adopting a tentative millage rate and approving the final fire rescue assessment on Monday September 12, 2011 at 6:00 p.m. Second budget hearing approving a final millage rate and adopting the FY 2012 budget on Thursday September 22, 2011 at 6:00 p.m.

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