General Fund Water and Sewer Fund Mayor’s FY 2007 Budgets Recommendation

First Year Achievements by the Mayor, City Council and Staff  Ordinance requiring $10 million minimum in RFFI and General Fund  Ordinance establishing a Water and Sewer CIP  Ordinance requiring $10 million minimum in Water and Sewer CIP by 2013  Ratings upgrade by S&P to AA Committed to Protecting the Taxpayers’ Investments

Philosophy  The Budget is the City’s blueprint to improve the quality of life for all citizens  The Budget provides the mechanism to achieve the Core Values of our administration  The Budget must be conservative to ensure healthy reserves and sound financial practices

Budget 101

The City of Tuscaloosa has two operating budgets: 1. General Fund (GF) 2. Water and Sewer Fund (W/S) The City of Tuscaloosa has two capital budgets: 1. Reserve Fund for Future Improvements (RFFI) 2. Water/Sewer Capital Improvement Program (CIP) Budget 101

General Fund (operating)  Serves as the general operating fund for the City and excludes Water and Sewer Fund operations  Provides funding to City Departments such as City Clerk, EMA, Environmental Services, Finance, Fire, HR, IT, Inspections, OCA, Planning, Police, Revenue and TDOT  Provides funding to agencies such as PARA, Library, Tuscaloosa City Schools, FOCUS and Kid One Transport

Water and Sewer Fund (operating)  Serves as the general operating fund for the City’s Water and Sewer Fund and excludes all General Fund operations  Provides for the operations of Ed Love Water Treatment Plant, Hilliard Fletcher Wastewater Treatment Plant, Lakes Division, Water Distribution, etc.  Provides for debt service expenses on outstanding Water and Sewer debt

Reserve Fund for Future Improvement (capital)  Annual surpluses from the General Fund are transferred into the RFFI  Provides funding for non-water and sewer infrastructure related projects such as road improvements, sidewalk enhancements, traffic calmers, drainage projects and paving  Other examples of projects funded in previous years include the Mercedes recruitment, fire stations, City Hall annex, etc. This has allowed the City to minimize its outstanding debt  Estimated unencumbered balance is approximately $10.2 million  The FY 2005 General Fund transfer was $6.8 million

Water and Sewer – CIP (capital)  Annual surpluses from the Water and Sewer Fund will be transferred into the CIP  Provides funding for water and sewer infrastructure related projects  Estimated unencumbered balance is approximately $4.3 million

General Fund

The General Fund Budget Must…  Include estimates of revenues, and expenditures to include total debt service payments required for the budget year  Be a balanced budget where estimated revenues equal estimated expenditures Budget Requirements

Departmental Budgets  Department budget requests to the Mayor exceeded anticipated revenue by $38.5 million for FY 2007  Salary, wage and fringe benefits for employees increased by approximately $3.7 million over the FY 2006 Revised Budget

Agency Funding  Agencies requested an additional $8.7 million over FY 2006  Thirty-four agencies are recommended to be funded a total of $10 million

Revenue Projections  FY 2007 budget is more conservative than in past fiscal years with a 2.5% growth rate for the City’s Sales Tax, County-wide Sales Tax and Privilege License  FY 2006 budget had a 3% growth rate  FY 2005 budget had a 4% growth rate

Projected Revenues Revenue ProjectionsFY 2007FY 2006 *1 New Revenue % Change Taxes$49,156,000$45,833,461$3,322,5397% Licenses$16,248,500.00$14,777,000$1,471,50010% Fines$1,696,700$1,766,500($69,800)-4% Property Use$84,100$81,200$2,9004% Service Charges$2,230,600$2,230,622($22)0% Intergovernmental$23,539,393$22,859,221$680,1723% Other Operating$1,381,601$946,475$435,12646% Encumbrance Carry Over$0$873,643($873,643)-100% Interfund Transfer$812,610$1,087,393($274,783)-25% Reimburse$1,200,000$1,717,006($517,006)-30% Total$96,349,504$92,172,521$4,176,983 *1 Revised Budget As Of August 22, 2006

Projected Revenues

Projected Expenditures *1 Revised Budget As Of August 22, 2006

Projected Expenditures

General Fund Contingencies Mayor’s Recommended Budget $485,500$0$509,368$569,551 Original Council Budget * $464,504$164,967$552,015 TBD * Disregards budget revisions during the year Contingency

General Fund Highlights

Salary and Benefit Increases:$3,764,857 Employee Cost of Living Adjustment:3.60% Police, Fire and Exempt Employees: 3.00% (2 steps) City Employees:1.50% (1 step) Retirees Cost of Living Adjustment:$110,000 Highlights

Call Center Manager:$60,000 3 Call Center Employees:$120,000 Equipment/Furniture/Training:$50, Call Center:$230,000

Highlights Office of Economic Development:$120,000 Two Inspectors:$80,000 Code Enforcement Police Officer:$47,000 Neighborhood Planner:$46,000

Highlights Stillman Blvd Maintenance Contract:$50,000 Skyland Blvd Maintenance Contract:$50,000 Greenwood Cemetery:$20,000 West Highland Cemetery:$15,000 Minority Recruitment Outreach:$5,000

Highlights PARA:$3,075,000 ($250,000 Increase) Tuscaloosa City Schools:$2,910,000 ($100,000 Increase) (Does not include Pre-K) Tuscaloosa Library:$1,575,000 ($50,761 Increase) Tuscaloosa County Health Department: $130,000 (GF) ($40,000 Increase - $15,000 GF / $25,000 W/S) $25,000 (W/S) Sister City Commission: (0.25% of Lodging Tax) $84,643

West Alabama Chamber of Commerce:$25,000 (Cultural Arts Strategic Plan – One Time) Focus on Senior Citizens:$75,000 ($10,000 Increase) Temporary Emergency Services:$15,000 (One-time for new facility) Other Increases - Pride, Symphony, WAAO Highlights

Tuscaloosa Pre-K Initiative:$75,000 Tuscaloosa City Schools for Pre-K:$65,000 University of Alabama for Pre-K:$10,000 Highlights

Public Safety 6.6% Pay Increase:$2,443,000 3 Additional Fire Apparatus Operators: $150,000 (Station 12 – Airport) 8 Additional Take Home Police Cars: $360,000 Highlights

General Fund Equipment Included In Mayor’s Recommendation Equipment type items that exceed $5,000 per item are classified as equipment General Fund Equipment $217,000 Inspections/Fac Maint $416,000 Environmental Services $339,547 Fire $342,500 Information Technology $13,000 Municipal Court $10,000 Planning $1,401,467 Police $699,000 TDOT $64,000 Emergency Management

Water and Sewer Fund

The Water & Sewer Fund Budget Must…  Include estimates of receipts, total debt service, and expenses  Be an “approximate” balanced budget where expenses (less budgeted total debt service) do not exceed revenues Budget Requirements

Projected Revenues Charges for Services Revenue ProjectionsFY2007FY2006 *1 New Revenues Water Sales$16,000,000$15,500,000500,000 Sewer Sales$11,750,000$10,200,0001,550,000 Sale of Riverview Plant02,000,000(2,000,000) Other$2,179,500$2,283,000(103,500) Total$29,929,500$29,983,000( 53,500) Revenues ProjectionsFY2007FY2006 *1 New Revenues % Chg Use of Property$13,200$14,000($800) (0) Charges for Services$29,929,500$29,983,000($53,500) (0) Interfund Transfer$54,534$49,330$5,204 0 Encumb Carry Over$0$167,045($167,045) (1) Total$29,997,234$30,213,375($216,141) *1 Revised Budget As Of August 22, 2006

Projected Expenses Division FY2007FY2006 *1 New Exp % Chg Superintendent$337,210$108,899$228,311210% Water Works Office$2,235,080$2,100,578$134,5026% Lakes$610,411$576,034$34,3776% Waste Water Treatment$5,993,000$6,138,167($145,167)-2% Depreciation$6,603,091$6,002,810$600,28110% Ed Love Filter Plant$3,273,927$3,118,825$155,1025% Distribution$2,861,693$2,776,878$84,8153% Debt Service$10,497,496$8,765,222$1,732,27420% Other$505,500$2,584,719($2,079,219)-80% Total$32,917,408$32,172,132$745,276 *1 Revised Budget As Of August 22, 2006

Water and Sewer Fund Highlights

Departmental Budgets  Department budget requests to the Mayor exceeded anticipated revenue by $4.9 million for FY 2007  Salary, wage and fringe benefits for employees increased by approximately $426,000 over the FY 2006 Revised Budget as of August 22, 2006

Water/Sewer Engineer Division$226,000 Water Distribution Engineer $80,000 Sewer Distribution Engineer $80,000 Vehicles $34,000 Secretary $32,000 Highlights

Water & Sewer Equipment $34,000 Superintendent $48,000 Lakes $243,650 Waste Water Treatment Plant $18,000 Ed Love Filter Plant $145,000 Distributions Water & Sewer Fund Equipment Included In Mayor’s Recommendation Equipment type items that exceed $5,000 per item are classified as equipment Highlights

WATER AND SEWER DEBT SERVICE BUDGETS SRF Sewer$159,905$158, SRF Sewer$671,688$671, Traditional Water$0$929, SRF Refunding$4,618,120$4,567, SRF Sewer$852,088$610, SRF Water$450,315$ Traditional Water$1,829,780$1,827, Traditional Water$1,915,600$0 Total Debt$10,497,496$8,765,222

Council Finance Committee Tentative 2007 Budget Schedule Paul Garner Conference Room Thursday, September 7th 3:00 to 5:00 Agencies Tuesday, September 12th 10:00 to 11:00 Vehicles/Equipment (Jimmy Sexton) 11:00 to 11:30 Computers/IT (Doug Taylor) 11:30 to 12:00 Employees (Sedell Bullard) Thursday, September 14th 3:00 to 5:00 Water/Sewer Fund Budget (Maurice Sledge) Tuesday, September 19th 10:00 to 12:00 General Fund Dept. Line Items & Other Thursday, September 21st 3:00 to 4:00 Revenues (Linda McKinney) 4:00 to 6:00 Finalize Budget

Questions…

This Summer, I spent well over a hundred hours preparing my first budget recommendation to the Council. I realize how much I have enjoyed learning about the detail workings of our departments and agencies. I encourage all Council members to be actively involved in the Finance Committee’s budget meetings throughout the month of September. I would like to thank the Finance Department staff, the City’s department heads and representatives of our City funded agencies for their contributions to my report. Thank You!

Thank You Budget Team! Carol Muir, Accountant

Thank You Budget Team! Tracy Croom, Associate Finance Director

Thank You Budget Team! Mike Wright, Finance Director