City of Presque Isle, Maine Presentation of 2014 Budget Are We At - - PowerPoint PPT Presentation

City of Presque Isle, Maine Presentation of 2014 Budget

Are We At the ‘Tipping Point’?

Desired Services Property Taxes & Other Costs

State Government Begin Raids

Desired Services Property Taxes & Other Costs

How Did We Respond?

2009 2010 2011 2012 18 20 22 24 26 28

PI's Tax Rate

PI's Tax Rate

How Did We Keep It Balanced?

Created more efficient organization through downgrading of positions and elimination of workforce (mostly attrition) Net savings of $931,142.78 annually (17 positions eliminated) Reduction of overtime $100,000 in Police Numerous other smaller efforts Deferment of capital

Changes in Spending & Capital

2009 2010 2011 2012 2013 2014 2000000 4000000 6000000 8000000 10000000 12000000 Total Expenses Capital Reserve In 5 years, spending is up $291,844 (2.7%) of which $218,131 is capital

Half Decade of Cost Increase

Health Insurance * $22,620 2.70% $836,925 vs $859,545 Maine State Retirement $495,882 14,168.06% $35,000 vs $499,382 Payroll* ($87,619) (2.12%) $4,129,659 vs $4,042,031 Gas & Oil $75,000 51.83% $144,700 vs $219,700 Total Increase (for these) $505,883 * Based on 17% less full time employees

Unbalancing by State of Maine

Property Taxes & Other Costs Desired Services

‘The Raid’

2008 2009 2010 2011 2012 2013 2014 500000 1000000 1500000 2000000 2500000 The Law* Actual $1,236,655 difference

The ‘Raid’

Municipal Revenue Sharing Takes 5.1% of all state revenues each month and redistributes those to municipalities the next month Funds distributed based on valuation, population and property tax burden ‘Notwithstanding’ the law State law was not changed Impact in 2014 is $255,017 reduction 22% of operating budget from revenue sharing in 2010 PL2013, c.368, Part S Will require another $40 million in revenue sharing cuts for FY15 (effective July 1, 2014) if other ‘tax expenditures” are not found

Capital Investment

Approximately $102,000,000 in capital assets Deferment in capital (anticipating the return of municipal revenue sharing) $582,825 in capital reserves in 2012 Reasonable goal should be about $1,000,000 annually Deferment is not sustainable Capital Reserve allocation was $650,300 in 2013, plus borrowing for plow truck & fire truck

Employee Contributions

2011 no COLA 2012 COLA 1.7% union 2013 COLA 1.5% All employees, one shut down day (except public safety) Fire Contract Concessions to allow per diems; 1 FT positions left unfilled Non-union Elimination of pre-96 health premium Temporary reduction of deferred comp by 1% for 6 months Certain union positions substantial increases to bring to market during this period

Challenges In 2014

2013 mid-year adjustments ($458,171) One time revenue increases or cost reductions covered $333,533 Employees requested to give back $50,000, mostly in one time reductions Only non-union obtained at this time* Revenue Sharing raid impact of $255,017 Benefit costs up $199,161 Other decline in Non-property tax revenues $63,775 Use of surplus/reserves $90,184

*talks continue with Police Patrol Unit

Impact of these alone is $877,895 or $1.72

Department Head Submittals

Expenses up $737,380 or $1.44 on the tax rate (largest portion was capital $277,616) Revenues down $318,792 As submitted budget impact of $2.14 on tax rate

2014 Submitted Budget

Reduced requested spending by $684,449 Increased capital recommendation by $68,131 Increased revenue forecast by $39,250 Impact on taxes: Spending increase $52,931 $0.10 No use of surplus $90,184 $0.18 Loss of revenues Revenue sharing $255,017 $0.50 Other revenues $24,525 $0.05 Totals $422,657 $0.73 SAD #1 increase (if flat in 2014-2015) $411,449 $0.80

General Comments

Starting point not a conclusion Far from ‘ideal’ budget Impact of July 1, 2015 state budget Key assumptions will need action

Budget Specifics

Required further personnel cuts Not fill vacant deputy city clerk position Juggling of city hall personnel Maintains 37.5 hour work week for professional unit (down from 40 hours) No layoffs or further reductions in services (at this point) No COLA or raises Assumes elimination of all pre-96 health insurance benefits for entire year Pays off fire truck in cash instead of borrowing ($255,000) Decreases other capital investment for 1 year

More Budget Specifics

Increases Cable TV franchise agreement to 5% ($14,000) in new review Increases EAS funding effective June 14 to essentially make airport self funded thereon Elimination of summer ice at the forum Impact on building long term

Solid Waste Budget-Specifics

No changes in fees or costs Decrease in property tax support $29,818 (by suggested lower hauling cost negotiation) Increases reserve funding $70,000 or 41.2% Working with MeDEP to potentially eliminate need for a vacant position REMINDER: private haulers can pick up larger items for fee

The Community Center Future

Strong recommendation that we tear it down this summer Scale back programming until new facility is built No serious funding in budget to deal with existing and emerging issues

Next Steps/Critical Dates

Budget details available to Council now Available by end of the week for public on web site Available by end of the week at City Clerk and Library October 21 workshop: Detailed presentation by City Manager/Finance Director October 28 Department Head presentations November 4 First public hearing on budget December 9 Final public hearing on budget and tentative adoption date

Closing Thoughts

Property Taxes & Other Costs

Desired Services

2014 challenge is find the balance with state government pulling at critical revenues Submitted budget far from conclusion There is no ‘right’ answer Five Councilors required July 1, 2015 PL 2013, c. 368, Part S Finally, the process will be important