City Council Agenda and Packet 2011 03 08 SP BUDGET

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COUNCIL COMMUNICATION TO: MAYOR AND CITY COUNCIL FROM: MALCOLM FLEMING, CITY MANAGER DATE: MARCH 8, 2011 SUBJECT: COUNCIL RETREAT /SPECIAL BUDGET MEETING ORIGINATING DEPARTMENT: CITY MANAGER'S OFFICE SUMMARY: The City Council adopted the City's 2011 budget on November 1, 2010 before Louisville voters approved the Use Tax measure on the November ballot. Consequently, the 2011 budget does not reflect any revenue or expenditures attributable to the new Use Tax. This special budget retreat is intended to give the City Council an opportunity to discuss the implications of the new Use Tax and provide staff with direction on any amendments to the 2011 budget and planning for 2012 and subsequent years. Staff will also discuss and requests Council direction on alternative approaches to budgeting, performance measurement and goals for 2011 and subsequent years. 2010 Year -End Summary, Use Tax Revenue Assumptions, Revenue and Expenditure Estimates and Projected Changes to Fund Balances for 2011 -2015 Staff will summarize the 2010 year -end results for the General, Conservation Trust, Historic Preservation and Capital Projects Funds. There is currently insufficient data to accurately project how much revenue the new Use Tax will generate in 2011 or subsequent years. However, for long range planning purposes, staff has assumed that the new tax will generate a total of around $700,000 annually. Of this total amount, about $290,000 would accrue to the Capital Projects Fund, $280,000 to the General Fund, $70,000 to the Conservation Trust Land Acquisition Fund and $60,000 to the Historic Preservation Fund. These assumptions have been incorporated into the City's long range forecasts for each fund. The budget is based on assumptions about anticipated revenue and expected expenditures. Those assumptions drive the projections of changes in fund balance. Among staff's objectives for this special meeting is ensuring that the City Council concurs with current assumptions on which those projections are based. The attached PowerPoint slides, which staff will review during the meeting, reflect the assumptions and targets affecting each fund. Staff will also review the graphs that reflect the forecast changes in fund balance for the City's major funds. If Council members want to change any of the assumptions, staff can do that during the meeting and show the impact, if any, on the forecast for each fund. . SUBJECT AGENDA ITEM COUNCIL RETREAT /SPECIAL BUDGET MEETING 3