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Home My WebLink About1982-02-16; City Council; 6908; Review of Budget Process & Setting TargetC\\ . OF CARLSBAD — AGENDA BILL AR# U? ?#Q MTG. 2-16-82 DEPT. FINANCE TITLE: REVIEW OF 82-83 BUDGET PROCESS AND SETTING OF BUDGET TARGET DEPT. HD. ^ CITY ATrvV//^ CITY MGR.^^^1 oI_l oz oo RECOMMENDED ACTION: The council should select a budget target figure to guide the staff in the preparation of the 1982-83 budget. No official motion is required. ITEM EXPLANATION; The staff has proposed a new budget preparation process that will reduce total staff time required to prepare the 1982-83 budget document and allow budget adoption in April, 1982. The process will allow the staff to prepare the base budget using known cost increases while allowing the council to concentrate on the program changes. Council should be able to apply the goals and objectives to the base budget to direct the staff in implementing budget policies. The attached memo describes the process. Last year, the council provided a budget target that provided direction to the staff while preparing the 81-82 budget. The council is again being asked to set a budget target for the 82-83 budget. The revenue and expense information is attached to this agenda bill. FISCAL IMPACT; The use of the proposed budget process should save about 1500 hours of staff time and about $15,000. These hours could then be used in other more productive areas. The adoption of the budget target has no direct fiscal impact, although the target itself will determine the availability of funds for operations in 82-83. Exhibits; Memo to all departments - Its budget time Budget target work sheet MEMORANDUM DATE:January 19, 1982 TO: ALL DEPARTMENT HEADS FROM: FINANCE DIRECTOR SUBJECT: IT'S BUDGET TIME I know everyone is anxious to get started on the 1982-83 Budget. And, since budget preparation is one of everyone's favorite tasks, it may disappoint many of you to hear that there has been a suggestion that we reduce the budget calendar from six months to three months and we concentrate our efforts on the major program changes rather then on the on-going line item budget. In all seriousness, a proposal has been made that we modify the budget process to allow for budget adoption by April 13, 1982. This approach would eliminate the necessity to defend the Regular Salaries and Maintenance and Operation portion of the budget that continues the present level of service. New programs or substantial increases in existing programs would be submitted to the Council through the City Manager as the need arises. The following section gives a brief outline of how the budget process would unfold. BUDGET CALENDAR Date Action Res pons ible Depar t ment 1-20-82 Discuss proposal 82-83 Budget'. 1-1-32 to Prepare: Revenue Forecasts 82-83. 1-27-82 Year to date expenditure info. 1932-83 expenditure estimates. 2-9-82 Council budget workshop 2-26-82 Distribute proposed budget to Department s. 3-8-82 City Manager Review 3-22-82 Prepare budget for Council 4-6-82 Adopt Budget 7-1-82 to Adjust budget as needed to fund 6-30-83 departments specific needs. Manage r/F inanee Finance Manager/Finance Finance Manager F inance Manager/Council All Departments IT'S BUDGET TIME Page 2 January 19, 1982 The actual preparation of the budget would be done in four parts: Personnel Services, Maintenance and Operation, Capital Outlay and Capital Improvements. 1. Personnel Services Accounts - Salaries for miscellaneous employees will be raised by 8% for 1982-83 as outlined in the current MOU. Police and Fire salaries - since negotiations will be underway at the time of budget adoption, current salary rates for safety employees will be carried forward into 1982-83. Any subsequent salary adjustment will be financed through a transfer from contingency funds. 2. Maintenance and Operations Accounts - These accounts fall into several different groups; those where fixed percent increases can be computed, those where appropriations will be held constant, and those where no appropriation will be recommended for 1982-83 without specific justifications from departments. Discussion with departments will be necessary to establish sorae of the more specific rat es . 3. Capital Outlay Accounts - The City experiences two types of capital outlay each year. The first is the usual equipment replacement and minor new equipment purchases. These are recurring types of capital outlay and account for a substantial porton of the capital outlay budget. The second type is the one time purchase of major equipment. The 1982-83 budget should contain an allowance for a fixed amount of capital outlay dollars. Only equipment replacement and usual minor new equipment' should be funded. Major one time capital outlay should be funded from the contingency account. In 1981-82 this equipment replacement pool amounted to about $300,000. 4. Caoiral Improvements - The City has a five year Capital Improvement Program. The 1933 portion of this CIP should be included in the 1982-83 budget. The Revenue side of the budget will not change substantially from past years. The major difference will be in the general fund, any difference between estimated revenues and the proposed general fund budget will be appropriated as part of the contingency account. Revenue estimates will be based as -much as possible on the data being developed by Planning and Series V population estimates. IT'S BUDGET TIME January Page 3 19, 1982 The budget packet received by all departments would include a complete budget for Salaries, and M&O Accounts. Departments would be asked to submit specific requests and justifications for Capital Outlay items to be included in the final budget. All departments will have an opportunity to discuss their budget with the City Manager prior to submission to the City Council for review and adoption. This process will be one of the topics of discussion at the January 20, 1982 Management Meeting. Please feel free to comment constructively on the process. (Anyone for a two yearbudget?) Estimated Cost of Budget Preparation* TASK 1. Preparation of budget manual,forms, estimate 2. Council budget workshop 3. Departmental Budget Preparation including one all day retreat 4. Assembly of Budget Requests for Manager's Review 5. Manager's Review 6. Public Meeting 7. City Council Review and Adoption REGULAR PROCESS 200 hrs $2600 100 hrs $1500 2270 hrs $23,000 250 hrs $3,000 120 hrs $1,900 100 hrs $1,600 50 hrs $600 REVISED PROCESS 200 hrs $2600 100 hrs S1500 900 hrs $11,000 120 hrs $1,400 60 hrs $800 100 hrs $1 ,600 50 hrs $600 SAVINGS -0- -0- 1370 hrs $12,000 130 hrs $1,600 60 hrs $1,100 -0- -0- Estimated Total Proces s Costs 3090 hrs $34,200 1530 hrs $19,500 1560 hrs $14,700 * These estimates are based on an "average" department preparing a relatively simple budget request. The figures shown represent only the ma gtii ~-ade 3 ? cost or savings experienced. These should not be used as exact calculations. CITY OF CARLSBAD BUDGET TARGET WORKSHEET General Fund 1982-83 Revenues - The revenue estimates for 1982-83 have been based on 'current 1981-82 revenues adjusted for changes in 1982-83. The estimated $1 million additional revenue for 1982-83 is an increase of about 8% over the 1981-82 estimate of $12.8 million. The estimate will be revised as better information becomes available, Revenues 1981-82 $12.8 million (includes gas tax support of streets dept.) Additional:.Revenue 1.0 million Sub-total 1982-83 revenue 13.8 million Less state reductions* (0.5)million Total funds available 82-83 $13.3 million * The State has estimated that the City may lose as much as $500,000 in State subventions in 1982-83. This number has not been finalized and will undoubtedly change. Expenditures - general fund expenditures are budgeted to reach 12.9 million for 1981-82. This is somewhat higher than estimated expenditure levels based on December, 1981 data. Salary savings of about $200,000 to $500,000 may be realized by year end. The 1982-83 budget target must be set based on available resources and estimated needs. A review of known cost increases is shown below. 1981-82 budget* $12.9 million Known cost increases - Safety retirement $230,000 Miscellaneous MOU $280,000 .5 million Total 82-83 costs (with salary increases only) $13.4 million * The City generally budgets for 100% staffing of all positions. Budget Target Alternatives - 1. Use estimated revenue before State reductions $13.8 million 2. Use estimated revenue after State reductions $13.3 million .3. Use estimated 82-83 budget with known salary cost increases $13.4 miiiion