1. CITY OF PORT ARTHUR, TEXAS BUDGET WORKSHOP July 12, 2005

2. City of Port Arthur Total Fund Balances

3. Fund balances FY 2003-2006 Balances have dropped a total of $2.8 million in the last two years The 2006 budget, as it stands now, would further erode balances $1.9 million This does not include any major capital initiatives

4. Fiscal 2005 – Est. Balance Reduction Budget Adopted Deficit($496,727) Budget Adopted Deficit($496,727) Budget Amendments($611,500) Budget Amendments($611,500)  Amended Deficit ($1,108,227) Estimated Deficit ($1,282,637)

5. General Fund Revenue Growth

6. Revenue Sources

7. Industrial Revenue

8. Total Property Tax Levy

9. City Sales Tax

10. City Sales Tax and Hospitalization Insurance Cost

11. General Fund Operating Budgets

12. CDBG Funding

13. Water Purification Expenses

14. Expenditures by activity

15. Expenditures by category * Operating capital only

16. City of Port Arthur Historical Staffing Levels

18. Proposed Budget ‘Status quo’ budget ‘Status quo’ budget City Street Program totaling $500,000 City Street Program totaling $500,000  With CDBG Streets at $270,379, total 2006 street program $770,379 Continue Drainage Program at $100,000 Continue Drainage Program at $100,000 Total deficit $1.89 million Total deficit $1.89 million  Reduces total balances to $8.77 million

19. Budget Does Not Include Funding ($271,000 in fy 2004) for Narcotics Task Force Funding ($271,000 in fy 2004) for Narcotics Task Force  Program had funded 75% of 5 officers  All officers are included in the budget Community prosecution program Community prosecution program  Estimated cost to continue - $93,000 New funding for capital projects New funding for capital projects Increased funding for equipment Increased funding for equipment

20. Budget Does Not Include Employee Hospitalization Insurance Increases Employee Hospitalization Insurance Increases  Total Insurance cost increases from 2004  $1 Million in 2005  $1.2 Million in 2006  No increase in employee cost during this period  Approx. $200,000 for 2005  Approx. $240,000 for 2006

21. Hospitalization Insurance Cost

22. Some Options to Close the Gap Force Reduction Force Reduction  Elimination of 10 positions could save $350,000 Further reduce CVB contract to assist in the funding of the Civic Center Further reduce CVB contract to assist in the funding of the Civic Center Increase water and sewer utility rate Increase water and sewer utility rate  5% would produce $725,000  6% would produce $870,000

23. No Funding has been provided for 2005-2006 Capital Projects West 7 th Street Widening $1 million West 7 th Street Widening $1 million West 7 th Street Development $ 500,000 West 7 th Street Development $ 500,000 Residential Development $1 million Residential Development $1 million City Streets and Drainage $1.5 million City Streets and Drainage $1.5 million

24. No Funding has been provided for 2005-2006 Capital Projects Land Acquisition$500,000 Land Acquisition$500,000 Parks Improvements Project$500,000 Parks Improvements Project$500,000 Landfill Cell Construction$1 million Landfill Cell Construction$1 million City Facilities – Roofs$300,000 City Facilities – Roofs$300,000 TOTAL $6 MILLION

25. Highway 365 Tolling project will require Tolling project will require  upfront financing  payment of all debt service until 1 year after completion  Payment of all interest cost over the life of the project City has invested $1.2 million in project to date City has invested $1.2 million in project to date