A road map through Woodburn's budget

Happy new year!

Well, almost. July 1, 2013 is the beginning of the City’s new Fiscal Year (FY), meaning that our newly-adopted budget will take effect very soon. We are proud of our budget, particularly the clarity and transparency contained not only in the documents itself, but the process used to develop this road map to how your tax dollars are spent. 

After a number of years of unsuccessful submissions, last year the City was honored to receive a 2012 Distinguished Budget Presentation Award from the Government Finance Officers Association. This is no doubt an important accomplishment for the City as an organization. We feel so good about the new budget, we plan on submitting the FY 2013/14 Budget to the Government Finance Officers Association's award program again in upcoming months.

The annual budget process is a complicated undertaking driven by State law, the City’s fiscal/budget policies, the City Council’s goals and mandated and discretionary funding requirements. It’s further complicated by uncertain revenues and a local economy still in recovery. Oftentimes, by the time the budget is put into action, much of the data is already several months old. This is why the City Council and I manage the budget throughout the year. All of this is overseen, reviewed, modified and deliberated on as needed by both the City’s Budget Committee (comprised of local volunteers) and the City Council.

Even though July 1 is our new fiscal year, the FY 2013/14 Budget has been up on the City website for public viewing and I would invite you to take a look at my Budget Message, skim the numbers line-by-line, department-by-department and all the budget narrative for yourself here.

To give people a better sense of what we have done with our Budget, I’ve put together the following Budget talking points for your interest:

 

  • Overall Budget Down 36%Overall, the Adopted FY 2013/14 Budget (excluding contingencies) reflects a decrease in spending from the FY 2012/13 Budget. The decrease of 36% is due almost entirely to reductions in planned capital improvement expenditures.

 

  • Total Adopted Budget: $68,370,457 All funds, including all contingencies.

 

  • Total Adopted General Fund Budget: $13,815,189 This includes $2,781,000 in beginning fund balance. This means that the City’s adjusted General Fund revenues for FY 2013/14 are $11,034,189.

 

  • Property Taxes Down The property tax estimate for FY 2013/14 decreased $625,000 compared to FY 2012/13. The property tax estimate was decreased such a significant amount based on actual collections for FY 2012/13, which are below budget. Our property tax revenues have declined over the last 18 months and we have no indication of near term improvement.

 

  • Franchise Fees Up Franchise fees for FY 2013/14 are $389,840 higher (35%) and include payments from Portland General Electric (PGE), Northwest Natural Gas, Qwest, DataVision, Wave Broadband, United Disposal and Woodburn Ambulance for use of the City’s rights-of-way. In addition, the new General Fund Right of Way charge imposed on the City’s Water and Sewer enterprises is included. This charge will generate an estimated $452,340 in additional revenue, which is slightly down from original estimates. I don’t expect water rates to be impacted for at least a year.

 

  • Personnel Expenses Growing Personnel expenses represent the majority of General Fund costs. Of the recommended General Fund operating budgets for FY 2013/14, personnel accounts for 67% of total operating expenses. General Fund personnel costs for FY 2013/14 total $7,594,955. This is an increase of $259,988, or 4%, due mostly to increased PERS contribution rates.

 

  • Where Does General Fund Revenue Come From? Using our General Funds adjusted revenue number of $11,034,189 (see above talking point), our revenues come from the following sources: taxes – 66%; franchise fees – 14%; intergovernmental – 6%; fines and forfeits – 5%; charges for goods & services – 5%; miscellaneous revenue – 2%; transfers in – 1%.          

 

  • Where Does General Fund Money Go? And in terms of expenditures, this is how it breaks out amongst our various General Fund departments: police – 58%; library – 8%; non-departmental – 6%;  parks maintenance – 5%; aquatics  – 4%; recreation – 4%; planning  – 3%; community services – 3%; finance – 2%; administration –2%; city attorney – 1%; and court – 1%.

 

  • Summary of FY 2013/14 Cuts Here’s a summary of the $748,150 in departmental cuts included in the the FY 2013/14 Budget (and take effect July 1):

 

FY 2013/14 Budget Cuts by Department

General Fund Departments

Budget Cuts

Police Department

$202,000

General Fund Furlough Day

$6,000

Non-Departmental Operating

$50,000

Audit Reduction Costs

$15,000

Planning Department

$8,785

Transit program

$35,000

Recreation Programming

$50,000

Library

$20,000

RSVP

$25,000

Reallocation of Banking Fees

$30,000

Dedicated Utility Fund Reductions

 

Water Fund Reductions

$114,226

Sewer Fund Reductions

$182,165

Total FY 2013/14 Cuts

$748,150

 

  • Budget Policies at Work Aggressive cost containment activities including 13 staff layoffs in FY 2011/12 and negotiation of lower cost health care benefits have helped offset continued flat and declining tax revenues and increases in operating costs.

 

  • General Fund Costs Containment is Excellent Our General Fund’s expenses will slightly decrease by $29,811. This is a good testament to our efforts to control costs while still reorganizing to better address City Hall’s areas of needed improvement (such as finance, human resources, communications, etc.) without increasing our spending dramatically.

 

  • Library Hours Remain Unchanged Last year, the City trimmed General Fund savings by not only eliminating positions, but we also reduced the hours the Library is open to the public. The good news is that this year, the proposed $20,000 reduction to the Library’s budget will mostly impact materials and supplies, not operating hours.

 

  • $2,658 in Stipend Savings At the City Council’s direction, effective July 1, City Councilors stipend will cease.

 

  • Fund Balance Management In FY 2013/14, fund balances are budgeted to increase $5,807,447, or 17%, to $40,310,990. The significant increase in fund balance since FY 2011/12 is the result of reduced capital projects scheduled for the fiscal year resulting in a carry forward of dedicated resources.

 

  • Police Department Holds the Line — For Now The FY 2013/14 Budget maintains current police staffing levels pending the final property tax installment made by Marion County in November 2013. Should the City’s property tax revenues meet — or fall below City estimates — then the Police Department could be in a position of reducing staff sometime in 2014. If our tax revenue exceeds our estimate, additional savings achieved, or other revenues increase beyond estimates, then we might be able to avoid reductions.

 

  • Layoffs No immediate layoffs of full-time employees are included in the FY 2013/14 Budget, although a single furlough day is proposed. The City may also consider contracting out certain services in order to lower current and future operating costs, but this has yet to be decided. Preservation of our highly motivated and skilled staff remains a priority as we hope that economic recovery improves our financial outlook in the coming years.

 

  • PERS Reform Initial estimates from PERS are predicting an average rate reduction between 2% and 4% of payroll. For Woodburn, a 2% reduction would mean about $160,000 in savings — of which about half would be in the General Fund. PERS warns that the previously announced rate increase effective July 1 will remain in place until new rates are calculated, which could take several months. We will continue to watch how this plays out.

 

  • Materials & Services Spending Down Materials and services in the General Fund FY 2013/14 have decreased over 10% from the current totaling $3,165,050.

 

If you’ve made it to this far, congratulations! You made it to the end of this week’s very long blog post! Let me pass along my thanks for being interested in this important material.

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