1. JULY 10 2012 BUDGET WORKSHOP NO. 3 12-13 FISCAL YEAR GENERAL FUND & ANCILLARY FUNDS Innovation will serve to keep the plan in the forefront of all that we do. Our actions should always be advancing the Plan. Operation Innovation

2. Workshop Schedule Schedule of FY 12-13 Council Work Sessions:  June 7- Budget Format Workshop*  June 26- Capital Projects & Replacement/Renewal Fund Workshop*  July 10- General Fund (and smaller ancillary funds) Workshop**  July 24- Enterprise Fund Workshop (Electric, Telecommunications, Water/Sewer, Sanitation, Golf & Airport)*  August 14-Preliminary Budget Presentation Workshop*  TBA- 1 st Reading Tentative Budget (Public Hearing)  TBA- 2 nd Reading Final Budget (Public Hearing) *11:00 Council Lunch *11:30-1:30 Work Session (Council Chambers) ** 3:00 pm Work Session (Council Chambers)

3. Items of Discussion  Reserve Policy Adjustment  Fee increases (Development Services, Engineering, Recreation & Parks, Telecommunications)  Proactive approach to curtailment of current year expenses  Continued culture and innovation enhancements  General Fund Balancing Strategies

4. FY 12-13 General Fund Information  The General Fund is the main operating fund of the City. As such it bears the brunt of costs associated with a majority of the City’s core functions.  The General Fund will be balanced using a millage of 6.1502, the Revenue Neutral Option, which allows the City to collect the same tax revenue as in the current fiscal year.  All cash balances available to the City, including a 20% reserve, have been incorporated into the budget in an effort to enhance the transparency of the budgeting process.  Salaries have been kept at current levels, as such there are no raises programmed into the budget.  Enterprise Fund transfers were held to FY12 levels.  The General Fund will be balanced using the proposed fee increases from Development Services, Engineering, Recreation & Parks.  The VSIP savings of ~$500,000 has been factored into the General Fund.  The City assumed the 2% increase in Health Insurance Premiums.  The General Fund will be balanced using a transfer of $1M from the 1/8 mil Police & Fire Fund.

5. Millage Information FY2012/2013 MILLAGE RATES When setting the tentative millage rates, Council should consider: 1. The maximum millage rate that can be levied by a majority vote of City Council is the rolled-back rate adjusted per the new legislation. 2. A millage rate of not more than 110% of the rolled-back rate adjusted for growth may be adopted if approved by two-thirds vote of the City Council. 3. A rate in excess of the 110% described in #2 may be adopted if approved by a unanimous vote of City Council or if approved by a referendum.

6. Additional Millage Information For comparison purposes, the following schedule lists the current rate, rolled-back, the maximum millage rate that can be imposed with a majority vote of City Council and the amount of revenue that would be generated for each, based on a 95% collection rate. *Rolled Back Rate is not a tax increase FY 12 Rate % Incr/Decr over RBRCommentsVote FY 13 Proposed Revenue @ 95% FY 12 Actual Revenue @ 95% Incr/Decr over FY 12 Revenue @ 95% 5.9332-3.56%Current Rate FY 12Majority$20,030,863$20,888,517($857,654) 6.52766.11%Majority Vote MaxMajority$22,037,595 6.15020.00%Rolled-back RateMajority$20,769,546 REVENUE NEUTRAL OPTION 7.180416.72%2/3rd Vote Max2/3rd Vote$24,241,490

7. General Fund Deficit AdoptedYTDRevisedIncrease/ FY 10-11BudgetActualsBase BudgetDecrease ActualsFY 11-12 FY 12-13AmountPercentage CASH BALANCE FORWARD$0$22,443,019$21,512,427$16,500,000 Revenues$50,808,008$48,592,420$38,280,936$48,609,077$16,6570.03% Transfers from Other Funds$11,358,680$15,242,555$10,053,018$13,946,207$(1,296,348)-8.50% Total Revenues & Transfers$62,166,688$63,834,975$48,333,954$62,555,284$(1,279,691)-2.00% Operating Expenditures$63,133,849$64,730,249$43,681,30461,095,937(3,634,312)-5.61% Transfers$3,333,077$3,642,608$2,759,5213,739,756886,41424.33% Total Expenditures$66,466,925$68,372,857$46,440,825$64,835,693$(2,747,898)-4.02% REVENUES - EXPENDITURES$(4,300,237)$(4,537,882)$1,893,129$(2,280,409)

8. General Fund Balancing Strategies CASH BALANCE FORWARD (Estimated) $ 16,500,000 RESERVES Revenues$48,609,077 Reserve For Fund Balance $ 12,942,139 Transfers In $ 13,946,207 Reserve For Contingencies $ 1,110,128 $ 62,555,284 Reserve For Fire Grant Match $ 96,238 Reserve For Affordable Housing $ 557,677 Expenditures $ 61,095,937 Reserve For Tree Mitigation $ 115,351 Transfers Out $ 3,739,756 Reserve For Discovery Science Center $ 20,000 $ 64,835,693 Reserve For Salaries/OT/Retire/VSIP $ 458,467 Building Fund $ 1,200,000 $ 16,500,000 Budget Gap $ (2,280,409) Reserve Deficit $ 0 DEFICIT $ 0TOTAL DEFICIT$(2,280,409) STRATEGIES PERMANENT OPTIONSAMOUNTPRIORITYTEMPORARY OPTIONSAMOUNTPRIORITY Comm Tech Consolidation (Fire Only) $ 476,973 Delay Fire Station $ 1,000,000 Reduce Reserves to 19% $ 647,107 800 MHz Payment Transfer $ 300,000 Reduce Reserves to 18% $ 1,294,214 Enterprise Funds Transfers $ 2,280,409 OPD Reductions $ 700,000Furloughs $ 1,800,000 Insurance Changes $ 360,000 Lay Offs $ 1,000,000 Pay Cuts $ 1,500,000

9. Questions/Comments