1. Introduction of the City Manager’s Proposed Fiscal Year 2012 Budget January 3, 2011 Sanford Miller, City Manager Robert Rusten, Assistant City Manager

2. General Fund Budget: FY2012 Expenditures In FY2012 General fund spending is proposed to be $17,595,573. In FY2012 it is projected that $10,658,308 will need to be raised by property taxes (tax levy). This is an increase of $870,913 from FY2011. We are assuming approximately ½ percent growth in the Grand List. This yields an estimated tax rate of $0.3918, and increase of $0.0277 (2.77 cents), from the FY2011 municipal tax rate of $0.3641or a 7.62% increase.

3. General Fund: FY2012 Tax Impact The average family home in South Burlington is Valued at $270,000. The average family will pay an additional $74.79 annually in municipal taxes. FY2012: $270,000 /100 = $2,700 $2,700 X.3918 = $1,057.86 FY2011: $270,000 /100 = $2,700 $2,700 X.3641 = $983.07

4. FY2012 – Summary All Funds, Expense and Revenue

5. Critical Budget Line Items: General Fund Line ItemNet Change Stormwater$130,000 (+) Pension$261,000 (+) Local Option Taxes$306,000 (-) Interest Income$135,000 (-) Surplus$201,000 (-) Total$1,033,000

6. Internal Controls and Financial Management Purchase order system; Institute standard operating procedures to prevent over spending of line items; Weekly account reviews conducted by the Finance Department; Segregation of funds; Enhance financial management software; Provide departments with monthly budget reports; Develop a schedule of assets; FY2013 Capital Improvement Program.

7. Pension Contribution Pension calculations in the FY2012 budget are based on actual/ projected salaries and the percentage of payroll contributions pursuant to the actuaries report of Oct. 29, 2010. The City contributes 22.4% for non-pubic safety employees and 25.1% for public safety employees. In most of the past ten (10) years, the City’s contribution toward the South Burlington Retirement Income Plan (SBRIP), did not meet actuarially recommended dollar amounts. Base on staff census for the FY2012 budget, the total contribution for all departments and funds to the SBRIP is $1,660,000. Several employees have been offered and switched retirement benefits to the Vermont Municipal Employees Retirement System (Plan B). The City will contribute considerably less to this Plan, 9.5% of salary. Some costs, such as portions or all of the Actuary and Investment Management fees have been paid from pension assets in the past. This has an impact of “financing” these operational expenses over thirty (30) years at 7.5%. This practice will be discontinued.

8. Staffing In FY2011 there were 128 full-time employees, 16 part- time employees, 12 on-call firefighters, and 40+ seasonal recreation staff members. In FY2012 across all funds there will be at least eight (8) fewer full-time-equivalent (FTEs). Reduction figures are the result of abolishing positions, leaving some positions vacant, and layoffs. In addition, some departments have been reorganized. Notably, what we consider a realistic number of staff positions are shown in the Ambulance budget, which makes it appear larger in FY2012

9. General Fund Payments and Services to the School District Community Use - $26,938 School Use - $16,981 + $1,000 for wage reimbursements School Bus Drivers - $1,000 School Grounds Maintenance - $32,609 Four (4) School Resource Officers - $250,000 Maintenance of Buses at DPW Library Use Space - $71,869

10. Program & Service Reductions Highway paving; Highway snow removal; Library Hours (3 hours per week); Reduction in School Resource Officers; Reduction in Planning & Zoning response time due to reduction in administrative staff; Others to come.

11. User Fees & Charges Ambulance transport fees; Ambulance billing services; Library charges; Planning fees are under advisement; Parking tickets.

12. Cost Savings Measures Enacted Health insurance; Retirement Income Plan conversion; Other benefit reductions for management and non- represented staff; $150,000 reduction- Management / Staff Challenge.

13. Special “200 - 600” Funds The FY2012 budget contains a listing of dozens of “special funds,” which were previously off-budget or in other words unrecorded. A number of theses funds have been eliminated or incorporated into the General Fund Budget. It’s expected that more “200” funds will be eliminated in the future. FY2012 expenditures are estimated at $933,378 and revenues are at $1,078,587

14. Water Fund Budget: FY2012 The Water Fund budget for FY2012 is proposed at $2,323,935. Water User Fees are projected to increase by about16.64%. Due to recent deficits, increases in wholesale water costs, andother operating cost increases.

15. Stormwater Fund Budget: FY2012 The Stormwater Fund Budget has been operating at a deficit since FY2010. Reserve funds have been depleted. Rates have not been increased since the inception of this Fund in 2008. In order to establish required reserve funds for on going projects; Fund revenues need to increase by 31.92%.

16. Water Pollution Control (WPC) Fund Budget : FY2012 The WPC Fund Budget is proposed at $3,885,000. WPC User Fees are projected to increase 46.67%. $1,207,555 of the $3,885,000 total fund budget will be used to help pay for Airport Parkway construction costs and debt service payments. Increases are attributed to: operating deficits, a flawed funding plan for Airport Parkway expansion, and artificially low rates.

17. Capital Budget & Debt FY2012 - AcquisitionFY2012 -Debt Service Ambulance - $170,000Existing Debt - $1,576,004 (General & Enterprise Funds) 3 Public Works Vehicles - $335,000 Quint Fire Truck – $750,000 5-Year Note = $163,000 P/Y Total Purchase: $505,000Total Debt : $1,739,004

18. Options for City Council Consideration: Financing the pension obligation; Further reduction in staff and service; Conservation funding; Rescind or restate SAFER grant;

19. Goals and Objectives Budgeting, auditing and implementation of changes to financial management system; Prior year inter-fund transfers; Technology; TIF; City Center Project; Workplace Safety Committee; Employee Benefits; Relocation/ restructuring of office operations.