Porterville’s Budgetary Approach The budgetary process is continuous in Porterville with many options and possibilities

The Approach A three-year Strategic Budget Plan A one-year Budget Periodic review of Budget Targets Revision of Expenditures when necessary

EXPENDITURE CONTROL The approach has been called Expenditure Control It is more accurately described as Expenditure Management Each Department is provided with spending targets and they are accountable to manage within the TARGETS

Base-Line Budget For the General Fund, each year at a Budget Conference, the City Manager and Directors Establish a Draft Base-Line Budget The Base-Line Budget is based on Prior Year, Adjusted for Actual Personnel Costs + Inflation Allowance and Inflation Allowance for Supplies & Services The Inflation Allowance is specified as a DEFLATOR, which is somewhat less than inflation. For Supplies and Services in The General Fund it has been set at 3%

The Bottom Line The proposed General Fund Budget for 2007/08 is proposed as structurally balanced but with a cash deficit Structural deficit = ($39,864) (.18% of operating appropriations) Cash deficit = ($1,014,864)

Revenues General Fund Revenues and Transfers are projected as $23,561,339 This is up 1.6% from previous year This is intended to be an accurate estimate and is not conservative and does not hedge A recession may reduce revenues and require the City to utilize reserves to cover expenditures or curtail expenditures and programs

Expenditures General Fund expenditures and transfers are targeted at $24,576,203 This is up 1.8% from Prior Year These targets assume increases for the deflator These expenditures assume new capital and program costs

Proposed Program Modifications Program Costs ABOVE Base-Line BIG Legislative Program = $1,000 Deputy CM = $14,000 ICMA Conference = $1,500 Second Code Enforcement Officer = $80,000 Park Ranger to Assist with Code Enforcement = $80,000

Proposed Above-Line Projects Above-Line Projects are Included in Draft Budget or Finance Letter Modification of Draft Budget Total amounts allocated add up to $1,915,925. The sources include: Re-appropriated General Fund = $543,925 Appropriated General Fund = $18,000 General Fund Carry Over = $975,000 Re-appropriated Gen. Fund Carry-Over = $132,000 Grant Monies= $247,000

Below-Line-Projects The amount of Below-Line projects (projects specified but not included in draft budget) are defined in both the Draft Budget and Finance Letters Draft Budget = $1,483,000 Finance Letters (#1 thru #4) = $649,000

Funds Other Than General Trends from Prior Years Are Continued Measure H Will Be in Full Force Zalud House Will Require Assistance CDBG Down Slightly Airport Expends Capital for Office, Pilots Lounge & Hangars Risk Management $607,000 expense for Airport Hazardous Materials Remediation, and $310,000 loan to Redevelopment for Hockett/Mill parking lot repair Golf Operations Consistent Many Projects in Sewer, Water, Streets That Will Be the Focus of An Upcoming Study Session Redevelopment Will Be Presented Separately

Service Levels It is suggested that each Director have an opportunity present their departments and funds and take questions The Council may then wish to proceed page-by- page or focus on specific items The next Study Session is about Capital Projects