City of Hampton Fiscal Year 2010 Budget City Council Work Session February 25, 2009

Budget Department- 2/13/2009 Council Budget Work Session Capital Budget

Budget Department- 2/13/2009 Council Budget Work Session FY2010 Budget – Capital Budget The Capital Budget for FY2010 totals: $37.7 million which includes the following funding sources: General Fund Revenues/Fund Balance Urban Maintenance Funds from the State Proposed GO Bonds Bond Interest Stormwater Funds State/Federal Construction Funds

Budget Department- 2/13/2009 Council Budget Work Session FY2010 Budget – Capital Budget For purposes of this presentation we will focus only on the General Fund portion of the Capital Budget. Total General Funds allocated to the FY 2010 Capital Budget totals $10,891,136.

Budget Department- 2/13/2009 Council Budget Work Session FY2010 Budget – Capital Budget Prior to developing any strategies to balance the budget the breakdown in general fund revenues is as follows: General Fund Operating Revenues - $4,359,514 General Fund Balance Transfer 2,000,000 Urban Maintenance Funds 4,531,623 Total General Fund Revenues $10,891,136

Budget Department- 2/13/2009 Council Budget Work Session FY2010 Budget – Capital Budget A complete breakdown of what is funded in the Capital Budget is included in your notebook. Highlights of Capital Budget projects funded with general funds include: Maintenance projects such as parks and recreation maintenance, city-wide landscaping, pre-wiring facilities for generators, etc. Projects such as blighted property acquisition, housing improvement grants, neighborhood improvement funding, etc.

Budget Department- 2/13/2009 Council Budget Work Session FY2010 Budget – Capital Budget Master plan projects such as redevelopment of Kingsway Building, retail/shopping center revitalization program, strategic property acquisition, retail incentive/opportunity fund, North King Street, etc.

Budget Department- 2/13/2009 Council Budget Work Session FY2010 Budget – Capital Budget In light of the budget shortfall, staff will consider using some of fund balance towards the capital budget.

Budget Department- 2/13/2009 Council Budget Work Session Outside Agency Funding

Budget Department- 2/13/2009 Council Budget Work Session Outside Agency Funding Last fiscal year Council adopted a policy where funding to agencies outside of the city would be limited to only those agencies that provided direct city services. In other words the City would have to pick up the service if the agency went away.

Budget Department- 2/13/2009 Council Budget Work Session Outside Agency Funding To limit the impact on those agencies that did not meet that criteria, Council agreed to phase-in the reductions (25% per year) until those agencies were no longer receiving aid from the City. This year’s budget continues the implementation of that policy resulting in a savings of $144,510. A listing of the funding for those agencies is included in your notebook.

Budget Department- 2/13/2009 Council Budget Work Session Outside Agency Funding It is possible that some of the agencies that provide direct support on behalf of the city will have to take a reduction if city departments are required to take a reduction. Funding reduction recommendations will be at the discretion of the department in which the agency falls. As of this meeting those departments currently remain funded at FY09 levels.

Budget Department- 2/13/2009 Council Budget Work Session Staff Considerations for Bridging the Gap

Budget Department- 2/13/2009 Council Budget Work Session Staff Work on Bridging the Gap As mentioned at the beginning of this presentation the FY 2010 Budget began with a funding shortfall of $14,106,733. But before I share with you the strategies being considered thus far to balance this budget, I want to take a minute to talk about the strategies staff is not recommending for funding this budget.

Budget Department- 2/13/2009 Council Budget Work Session Staff Work on Bridging the Gap What is not being Considered Employee share of VRS Contribution – paid for by employees We cannot legally require employees to pay this once we entered into the program Pay Cuts across the board In order to fund the budget shortfall noted above would require an across the board pay cut of 17.5 percent. This is before making adjustments where we could not reduce the pay further such as minimum wage jobs, some constitutional salaries, salaries having a direct impact on revenues.

Budget Department- 2/13/2009 Council Budget Work Session Staff Work on Bridging the Gap Furloughs – this option would have a tremendous cost in the way of increased overtime pay to perform functions when furloughed employees are off – for example police patrol, garbage collection and fire protection. It would require everyone to take 42 furlough days to fund the shortfall. 4-Day Workweek – the impact would be minimal as we could only close City Hall.

Budget Department- 2/13/2009 Council Budget Work Session Staff Work on Bridging the Gap What is Being Considered No pay increases for employees Continuation of policy regarding Outside Agency Use of Fund Balance for Capital Budget and one- time expenditures Use of Debt Service Reserve to fund increase in debt service Retirement Incentives Vacant Positions

Budget Department- 2/13/2009 Council Budget Work Session Staff Work on Bridging the Gap What is Being Considered (cont’d) Budgeting for Attrition Suspension of Longevity Pay Suspension of Tuition Assistance program Increasing co-pays in Health Insurance Plan Consolidations/Mergers Review of Support positions Departmental operating funds such as travel Energy savings ideas – such as using hybrid cars, turning off the lights

Budget Department- 2/13/2009 Council Budget Work Session Staff Work on Bridging the Gap Currently we are at the point where we have asked departments in each Business Team to produce a 10%reduction plan. These cuts will most likely not result in an exact 10% across the board reduction for each department as our goal is to keep direct service delivery in tact. Once we incorporate some of the items mentioned previously, it may be that some departments may experience a greater than 10% reduction while others would be less. We will discuss at the next work session the results of those reduction plans.