City of Biddeford City Council - Workshop May 12, 2020 6:30 PM …€¦ · Presentation of FY21...
Transcript of City of Biddeford City Council - Workshop May 12, 2020 6:30 PM …€¦ · Presentation of FY21...
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City of BiddefordCity Council - Workshop
May 12, 2020 6:30 PM Via ZOOM
1. Workshop Discussion Items 1.1. Presentation of FY21 City Government Budget
COVID-19 Financial Impact.PartII.pdf
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COVID-19 FINANCIAL IMPACT: PART IIMAY 12, 2020
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COVID-19 Financial Impacts Part II May 12, 2020
PURPOSE
1.Recommended strategy for FY21 budget adjustments because of COVID-19
2.Recommended FY21 operational strategy for COVID-19
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COVID-19 Financial Impacts Part II May 12, 2020
FY21 SUMMARY ON MAY 5, 2020
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Property Tax Collection
10%
Revenues28%
Expenses16%
Rev Sharing Leg16%
State Aid25%
Homestead5%
Property Tax Collection Revenues Expenses
Rev Sharing Leg State Aid Homestead
Property Tax Collection
0%
Revenues97%
Expenses-3%Rev Sharing Leg
0%State Aid
0%Homestead
0%
Property Tax Collection Revenues
Expenses Rev Sharing Leg
State Aid Homestead
Worst Case: $4,747,809 Best Case: $1,489,206
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Worst Case: $4,747,809 Best Case: $1,489,206
Development of tool boxes for risk
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CLOSING THOUGHTS ON MAY 5, 2020BIGGEST IMPACTS:
PROPERTY TAX COLLECTION RATE
EXCISE TAX
REVENUE SHARING
‘THE LEGISLATURE’
‘OPERATIONAL PLAN’
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COVID-19 Financial Impacts Part II May 12, 2020
FY21 OPERATIONAL PLAN: THREE TOOLBOXES
Definitive changes to FY21 budget
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Expenditures in FY21 budget but on hold; phasing plan
THE HARD CHANGES THE DEFERMENT
THE POSSIBLE NOT PROBABLE 7
COVID-19 Financial Impacts Part II May 12, 2020
EXCISE TAX: IMPACT OF DEFERMENT OF FY20 RECEIVABLES
• Normally, excise tax is treated by auditors on a cash basis
• Revenue recognized in month received
• Example: June 2020 payment made July 3, 2020 will be booked in FY21
• $703,256 is best estimate of FY20 excise that will be paid in FY21
• $325,000 shortfall in current budget/fund balance reduction*
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MODIFIED CASH
MODIFIED ACCRUAL
$3,051,3
$703,256$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Fy20 FY21
Expected Paid
• Recognize $3,750,000 in revenues• $700,000 in receivables• $375,000 above projection/fund balance
increase
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COVID-19 Financial Impacts Part II May 12, 20208
GASB DECISION ON EXCISE TAX
GASB will recognize on modified-accrual basis; $700,000 of revenue expected to be collected 9
COVID-19 Financial Impacts Part II May 12, 20209
• FY21 revenue forecast• Every economic down turn, total
excise tax goes down• Worse case is 17.78% or $635,000
plus the $125,000 projected increase or $760,000
• Decrease either increases property tax rate or needs expenditure reduction
• FY21 Submitted budget projection• $3,400,000, up $125,000 from FY20
• Decision: modify the FY21 projected excise revenue downward between $760,000 to $250,000
EXCISE TAX DECISIONS & IMPLICATIONS
FY21 reduction 10%$340,000
FY21 additional 5%$170,000
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COVID-19 Financial Impacts Part II May 12, 202010
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COVID-19 Financial Impacts Part II May 12, 202011
• Project the decline in state revenues from June 2020 to May 2021• 35% reduction = $927,500
• 15% reduction = $397,500
REVENUE SHARING CHALLENGE
FY21 reduction 25%$662,500
FY21 additional 15%$397,500
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COVID-19 Financial Impacts Part II May 12, 202012
• Interest income
• Ambulance revenue
• URIP (Local road assistance)
OTHER REVENUE IMPACTS
Interest Income $50,000
Ambulance revenue$100,000
URIP$50,000
Interest Income$25,000
Ambulance revenue$150,000
URIP$25,000
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COVID-19 Financial Impacts Part II May 12, 202013
• Unemployment
• General Assistance
• Other COVID-19
EXPENSE IMPACTS
Unemployment$20,000
General Assistance$27,000
Other COVID-19$50,000
Unemployment$100,000
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COVID-19 Financial Impacts Part II May 12, 202014
Item Amount Reason
Excise tax ($340,000 10% reduction from FY21 budget
Revenue Sharing ($662,500) 25% reduction from FY21 budget
Investment income ($50,000) 33% reduction from FY21 budget
Ambulance revenue ($100,000) Reduced call volume
URIP (Local Road Asst) ($50,000) 25% reduction from FY21 budget
Total Revenue reductions ($1,202,500)
Unemployment $20,000 Increase claims
General Assistance $27,000 Increase demand
Other COVID-19 $50,000 Expenditures needed after July 1; undefined
Total expense increases $97,000
Toolbox Hard Changes ($1,299,500)
THE HARD CHANGES GOAL
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COVID-19 Financial Impacts Part II May 12, 2020
MARCH 5 SUMMARY OF BUDGET MUNICIPAL ONLY
PROPERTY TAX IMPACTS
$424,438 increase in tax commitment or 0.89%
$0.23 increase in tax rate or 1.14%
Max fund balance exposure: $431,540
IMPACT ON MEDIAN HOUSE W/HOMESTEAD
$227,100 median home value
2020 homestead of $20,000: $4,127.86 tax bill
2021 homestead of $25,000: $4,084.44 tax bill
Reduction of $53.42
SPENDING
Capital up $500,000
Contingency up $150,000
Fire staffing up $225,000
Transitional staffing $431,540
Total spending $2,130,009 or 6.44%
REVENUES
Revenue sharing up $675,000 or 34.18%
Non-property tax up $688,854 or 8.88%
Homestead up $330,408 or 40.58%
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COVID-19 Financial Impacts Part II May 12, 202016
Item Impact
Toolbox 1: Hard Changes ($1,299,500)
Eliminate Fund Balance Use ($431,540)
Reductions needed $1,731,040
Less: Higher valuation ($111,155)
Final Reductions Needed ($1,619,885)
THE MATH TO RETURN TO MARCH 5 IMPACT ON TAXES
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COVID-19 Financial Impacts Part II May 12, 202017
Fire Wages* $175,000 Construction material $10,000
Fire Fringe Benefits* $50,000 HR specialized training $2,500
Communications Director* $100,000 E2E training $3,000
Deputy PWD* $95,144 Community Center heating $12,500
CSO Engineer* $68,968 Advertising citywide $2,500
Planning support $15,000 General fund support recreation $25,000
Additional capital funds $500,000 Overtime citywide $20,000
Reduce additional contingency $150,000 Turnover credit $10,000
Refurbish records City Clerk $4,000 Vehicle repair citywide $8,575
Eliminate 1 Cruiser $30,000 Building repairs citywide $7,500
Reduce polygrapher 8 hrs x 26 weeks $6,482 Supplies citywide $5,000
Reduce street light repair $15,000 Police administrative position $96,216
Training/Travel citywide $10,000 Capital (additional) $154,500
Reduce outside engineering $25,000 Road salt $10,000
Equipment/Tools Parks $12,500 Equipment/Tools Solid Waste $7,500
TOOL BOX OF HARD CHOICES ($1,619,885)
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COVID-19 Financial Impacts Part II May 12, 202018
Worst Case: $4,747,809 Best Case: $1,489,206
$1,619,885
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COVID-19 Financial Impacts Part II May 12, 2020
DEFERMENTS TOOL BOX ($965,521)
On Hold
Item 2nd 3rd 4th Savings
Capital $150,000
Road Salt $10,000
Mechanic Supervisor $3,000
Non-Union Raises $100,000
Union Wage Deferral $100,000
Project module $10,200
Financial Aid-Rec $5,000 $5,000 $20,000
Vacant Firefighters (2) $82,239 $82,239
Vacant police patrol $43,747 $43,747
Vacant City Clerk PT $22,175 $22,175
Market wage adjustment $25,000
Vacant mechanic $44,985 $44,985
Vacant laborer $18,930 $56,792
Longevity payment $75,307
Totals $5,000 $636,453 $74,130 $249,938
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Worst Case: $4,747,809 Best Case: $1,489,206
$1,619,885
$965,521
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COVID-19 Financial Impacts Part II May 12, 2020
THE COLLECTION RATE QUESTION
• Delay in FY20 payments• $483,115 (1%) Low• $1,087,008 (2.25%) High
• Delay in FY21 payments• -$603,894 (1.25% reduction)
Low• $483,115 (1% additional)
High
• Ebb and flow between years• Fund balance adjustment• Bounce back within year or
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COVID-19 Financial Impacts Part II May 12, 202022
Worst Case: $4,747,809 Best Case: $1,489,206
$1,619,885
$965,521$1,195,271
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A d j u s t m e n t s t o B a l a n c eS t a t e B u d g e t
LegislativeRisk
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• Revenue Sharing Raid • $738,214
• Homestead Reimbursement• $228,918
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Worst Case: $4,747,809 Best Case: $1,489,206
$1,619,885
$965,521$1,195,271
$967,132
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COVID-19 Financial Impacts Part II May 12, 2020
MARCH 5 SUMMARY OF BUDGET MUNICIPAL ONLY
PROPERTY TAX IMPACTS
$424,438 increase in tax commitment or 0.89%
$0.23 increase in tax rate or 1.14%
Max fund balance exposure: $431,540
IMPACT ON MEDIAN HOUSE W/HOMESTEAD
$227,100 median home value
2020 homestead of $20,000: $4,127.86 tax bill
2021 homestead of $25,000: $4,084.44 tax bill
Reduction of $53.42
SPENDING
Capital down $154,5000
Contingency same
Fire staffing none
Transitional staffing none
Total spending $616,124 or 1.86%
REVENUES
Revenue sharing down $12,500
Excise Tax down $125,000
Homestead up $330,408 or 40.58%
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COVID-19 FINANCIAL IMPACT: PART IIQUESTIONS
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