1. Budget Update January 14, 2010 01/14/2010 1

2. Non-Construction Local Sales Tax Month 3 Year Average FY2010 Budget FY2010 Actual% of Budget Projected FYE Surplus/ (Deficit) July7.6% $1,958,600 $1,937,6337.5% ($275,134) August7.9% 2,022,100 1,814,9647.1% (1,473,599) September8.3% 2,129,200 1,894,1147.4% (1,949,338) October8.1% 2,086,300 1,866,3627.3% (2,143,095) November 2,218,500 December 2,464,500 January 1,994,200 February 2,084,100 March 2,370,500 April 2,140,100 May 2,101,400 June 2,142,400 Total31.9% $25,711,900$7,513,07329.2% ($2,143,095) 01/14/20102 FY2010 Budget Update

3. 01/14/2010 FY2010 Budget Update 3

4. Construction Local Sales Tax Month 3 Year Average FY2010 Budget FY2010 Actual% of Budget Projected FYE Surplus/ (Deficit) July9.4% $540,353 $587,14410.2% $500,004 August10.3% 597,499 349,3906.1% (1,021,619) September10.7% 615,074 527,2809.1% (952,346) October9.6% 556,540 330,7825.7% (1,287,295) November 547,150 December 559,189 January 332,308 February 396,478 March 417,781 April 395,739 May 393,361 June 422,728 Total40.0%$5,774,200$1,794,59531.1% ($1,287,295) 01/14/20104 FY2010 Budget Update

5. 501/14/2010 DepartmentFTE City Attorney2 City Clerk1 Communications3 Community and Recreation Services5.8 Community Development1 Fire Education Specialist1 Information Technology1 Public Works2 Total16.8 FY2010 Budget Update Reductions January 2010

6. January Action Eliminate 16.8 positions $300,500 Reduce open swim at Surprise Aquatic Center25,000 Weekend only operations at Hollyhock Pool21,000 Reduce Hollyhock Library operations 50%20,000 Reduce Tennis Facility operating hours12,500 Reduction to Fourth of July event15,000 Subtotal$394,000 01/14/20106 FY2010 Budget Update

7. January Action (Continued) Subtotal from previous $394,000 Reduce Sierra Montana operating hours3,100 Reduce mailing of Recreation Times10,000 Reduce labor distribution for special events35,000 Adjust budgets to department estimates684,300 Total January Action$1,126,400 01/14/20107 FY2010 Budget Update

8. 801/14/2010 DepartmentFTE City Attorney3 City Clerk1 City Court1 City Manager3 Communications3 Community and Recreation Services9.8 Community Development18 Fire (Inspection to Building Safety)6 Human Resources2 Information Technology2 Finance/Management and Budget6 Public Works15.5 Transportation6 Total76.3 FY2010 Budget Update Reductions February 2009 - January 2010

9. 01/14/20109 FY2010 Budget Update 9% decrease overall 29% decrease in management Includes 16.8 FTE eliminated January FY2010

10. Compensation and Benefit Changes to Employees Car allowances eliminated—directors and above including City Manager and City Attorney Eliminated 457 or PEHP employer contribution—0.5% Eliminated potential 457 employer match—1% Reduce PTO payout by ½ in FY2009 Eliminated PTO payout in FY2010 Reduced PTO drop (80 hours to 40 or 120 to 60) Implemented $25 per month employee insurance contribution 10/6/200910 Payroll Issues

11. FY2010 Expenditures Adjustments Previous Operating Actions $1,225,600 Greenway Road900,000 Bell Road Lighting and Landscaping210,000 Jerry Street Project grant234,000 January Action1,126,400 Vacant positions (to date)749,400 Projected Total Adjustments @ January 14 th $4,445,400 01/14/201011 FY2010 Budget Update

12. FY2011 Identified Negative Budget Impacts State Share Income Tax $2,800,000 State Shared Sales Tax$678,600-1,017,900 Local Sales Tax741,400 Health Insurance increase (12% estimate) 770,600 Employer pension contribution increase242,200 Total Negative Impacts$5,232,800 - 5,572,100 01/14/201012 FY2010 Budget Update

13. FY2011 Identified Reductions Previous actions $1,929,600 Vacant positions677,100 Full revenue recovery of Court209,800 Street Light Improvement Districts100,000 Total Identified Reductions$2,916,500 01/14/201013 FY2010 Budget Update

14. FY2011 Identified Budget Shortfall Identified negative impacts ($5,232,800 - 5,572,100) Identified reductions2,916,500 Total FY2011 Shortfall($2,316,300 - 2,655,600) 01/14/201014 FY2010 Budget Update

15. 01/14/201015 FY2010 Budget Update Estimated FY2011 Shortfall Comparison State of Arizona30% Tempe16.1% Phoenix12.8% Buckeye9.3% Surprise3.7%

16. FY2011 Potential Options -Holiday Reduction (per holiday)$171,300 -Furloughs (per day)$91,400 -Pay reductions (per 1% decrease)$478,200 -Increase employee insurance contribution (per 1% of increase)$64,200 -Increase sales tax (per 0.1%)$1,071,300 -Implement food tax (per 1%)$900,000-1,200,000 01/14/201016 FY2010 Budget Update

17. 01/14/201017 FY2010 Budget Update

18. Assumptions State shared revenue formulas unchanged State does not charge for other services Car sales and VLT tax Recession does not deepen Pavement Management and Vehicle Replacement funded with CIP funds 01/14/201018 FY2010 Budget Update

19. 10/6/2009 19 Questions?