Budget Reduction FY 04MEMORANDUM
May 14, 2003
TO:The Honorable Mayor and CitY Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Fiscal Year 2004 Budget Reduction Process
With support of Iowa Governor Tom Vilsack, the Iowa State Legislature has approved
legislation resulting in dramatic reduction in state aid to municipal governments. These
reductions, which involve a repeal of existing law, are applicable to the Fiscal Year 2004
budget, which begins July 1, 2003, and all budget years that follow. The Fiscal Year
2004 budget for the City of Dubuque was approved by the City Council in March of this
year, as required by state law, and the tax levy was certified. This tax levy cannot be
modified.
The state aid to municipal governments involved the consolidated payment from the
state for population, personal property tax reimbursement, monies and credits, as well
as the bank franchise fees. This amounts to a reduction in revenues to the City of
Dubuque of $1,195,425, or about 3.54% of total general fund operating revenues.
Since the city's property tax levy for Fiscal Year 2004 has already been certified, the
only way to deal with this change in funding is through decreases in operating expenses
and increases in fees.
Since the City budget was adopted in March, there have been other negative impacts
on the Fiscal Year 2004 budget. It was anticipated that health insurance costs would be
rising by $1.2 million in Fiscal Year 2004. However, our experience to date indicates
that health insurance costs will actually be rising $1.8 million in Fiscal Year 2004, or
$600,000 greater than originally anticipated.
The City of Dubuque was also in discussions with John Deere Dubuque Works to
provide confined space rescue services, and the budget anticipated $150,000 in
revenues for marketing that Fire Department service. Since that time, John Deere has
decided to not contract with the City for those services, and that revenue will not be
realized.
It is important to remember that during the Fiscal Year 2004 budget process, we were
only able to have the ninth consecutive year without a property tax increase by
instituting a hiring freeze, reducing the city-wide training budgets and eliminating out-of-
state travel for conferences.
We also need to remember that the City of Dubuque has operated efficiently over the
years. As mentioned, the City of Dubuque has had nine consecutive years without a
property tax increase; in fact, five of those years have seen a property tax decrease.
Over that pedod of time, the average homeowner has enjoyed a 7% reduction in the
city-portion of their property taxes. Since 1981, the city has reduced the number of full-
time employees from 588 to 519. This is a reduction in the workforce of 11.8%, or 69
employees. This has happened during a time when new or expanding programs and
services have been added to meet increasing demands and mandates. Initiatives
during that time period have included:
· yard waste and recycling programs
· county-wide E-911 dispatch
comprehensive housing programs
· community oriented policing
· DARE and other drug related programs
· rental property inspections
· operations of the new leisure pools
· McAleece Recreation Complex operations
· the 5th Street Parking Ramp
· advanced life support ambulance service
· cable TV monitoring and government Channel 8 programming
· additional commissions, including the Long Range Planning, Environmental
Stewardship and Investment Oversight
· city-operated fixed-base operator functions at the airport
· increased zoning code enforcement
· addition of a Neighborhood Development Specialist to implement a neighborhood
reinvestment strategy
· the Lead Paint Abatement Program
· 13 additional neighborhood parks
· reinstatement of traffic accident investigations by the Police Department
· the School Resource Officer Program
· police K-9 unit
· implementation of the Drainage Basin Master Plan to save over 1,150 homes
from stormwater flooding
· Sanitary Sewer Infiltration and Inflow Reduction Program
· compliance with Federal National Pollutant Discharge Elimination System
(NPDES) standards
Governor Vilsack's belief, along with the members of the State Legislature who voted
for this bill, that cities can afford this drastic reduction in state revenues without serious
service reductions, is certainly not true at the City of Dubuque.
I have asked Department Managers to begin a modified zero base budgeting approach
to prepare budget recommendations for City Council consideration. This budgeting
approach recognizes that employee reductions cannot be made without impacting city
services. Each department will be reviewing the services they now provide and
prioritizing those services.
Although the City Council could choose to draw down reserves to delay this problem
until next year's budgeting process, I believe this would not be a fiscally-sound
approach to managing the budget problem. I believe it is important that we maintain
sufficient reserves to meet the policy guidelines established by City Council of 10%.
The bond rating agencies will ask about our reserve policy and will examine the reserve
levels. Cities will be expected to use sound financial practices in managing their budget
problems. If the draw down of fund balances was for one year only and there was a
plan to reinstate those fund balances to acceptable levels in the following year, you may
not damage your bond rating, but there are no guarantees. In addition, those reserves
are used to provide sufficient cash flow to pay bills, and should be reduced only in an
emergency. Should an emergency occur during the year, like flooding, tornado or other,
the city should not have depleted its resources to a point that it would be placed in a
crisis situation.
The City also needs to be concerned that health insurance costs may rise at a
significant rate in Fiscal Year 2005. We also are receiving information that the
residential rollback issued by the state might go from 51.3% in Fiscal Year 2004 to 47%
in Fiscal Year 2005. This would negatively impact Fiscal Year 2005 revenues.
This financial difficulty facing the city is mainly focused on the General Fund Operating
Budget, but also impacts the Enterprise Funds because of the problems with health
insurance costs.
Personnel Director Randy Peck is working on a proposal for employee assistance
services and outplacement services for any employee displaced through this process.
That will be presented to you at the time of the final recommendation.
I respectfully request Mayor and City Council approval of the use of the modified zero
based budgeting process and the departmental reduction targets.
The recommended budget modifications will be brought to the June 16, 2003 City
Council meeting. I would ask for your direction on whether this should be brought as a
work session and a City Council agenda item, or just a City Council agenda item.
Michael C. Van Milligen
MCVM/jh
Attachment
cc:Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Pauline Joyce, Administrative Services Manager
MEMORANDUM
May 9, 2003
TO:All Department Managers
FROM:Pauline Joyce, Administrative Services Manager
SUBJECT:Fiscal Year 2004 Budget Reduction Process
The purpose of this memorandum is forward to you a copy of the letter that will be
presented to City Council at their May 19 meeting which discusses the budget problem,
THE fiscal policies will guide us in addressing the problem, and an explanation of the
modified zero base budget process we are proposing to use to address the budget
problem. I thought this material might be helpful in presenting the issue to your
employees and explaining why we need recurring operating budget reductions to meet
the permanent loss of State funding and increased health costs.
Attached to the letter as Attachment A is the actual process you are to follow, including
due dates and anticipated meetings. Please make additional copies of the Base Level
form to meet your needs. If you want it as a Word document, you can ask Kevin
Firnstahl to email it. Please note that there is a schedule for targeted budget dollar
reductions by fund and by department. Make sure you check not only the tax funds (fist
schedule), but also the non-tax funds to see if you have target reductions in more than
one fund.
I have also attached a copy of the adopted Fiscal Year 2004 expense and revenue
broken down by department and activity.
I would also suggest that you visit the Iowa City web site to view their budget reduction
recommendations. They have basically completed their review and reduction process
and outlined for their City Council the recommended reductions and alternatives that
were considered but are not recommended. It provides an excellent example of the
final product we will be preparing and may generate some ideas for budget reductions.
Personnel Manager Randy Peck is preparing information on call-back procedures and
employee assistance services. As stated in the attached material, staff reductions do
not need to occur on July 1, 2003. They need to occur in a fashion that provides the
necessary savings.
Please call with any questions.
MEMORANDUM
May 8, 2003
TO:Michael C. Van Milligen, City Manager
FROM:Pauline Joyce, Administrative Services Manager
SUBJECT:Fiscal Year 2004 Budget Reduction Process
The purpose of this memorandum is to present the recommended process to be used to
bring the Fiscal Year 2004 budget back into balance. This involves reinstating the
modified zero base budgeting approach that was used last in the 1980's.
Background on Budget Problem
I would like to once again review the changes that have occurred since the Fiscal Year
2004 budget was adopted, in February 2003, and the impact of each change on the
operating budget.
The changes passed by the Iowa Legislature dramatically reduce State aid to
cities by eliminating Consolidated Payments and Bank Franchise Tax.
Consolidated Payments provided replacement funding for personal property,
monies and credit, and a population allocation. The impact on the City of
Dubuque's tax funds is a reduction in anticipated revenues from the State of
$1,195,425, or about 3.54% of total General Fund operating expense. This
action was taken by the legislature after the March 15 deadline for cities to certify
their tax askings. Once this deadline has passed, cities no longer have the ability
to raise property taxes.
The Fiscal Year 2004 budget included anticipated savings through vacancies of
$165,000 in the tax funded activities. A hiring freeze was already planned to go
into effect July 1, 2003 to create that savings.
Health Insurance costs continue to increase at a rate exceeding budget
expectations. Our insurance consultant estimates we will need to add $205,000
to the City's Self-Funded Health Insurance Reserve account by year end Fiscal
Year 2003. This will be necessary to meet the actuarial requirement that is
determined annually by the State Insurance Commissioner. If we don't
adequately fund the reserve, the State can require us to go to a fully insured
plan. This shortfall was anticipated and addressed through the Fiscal Year 2004
budget process.
Looking at Health Insurance costs beyond the current year, the anticipated
recurring costs in Fiscal Year 2004 are expected to be almost $99 per month per
contract higher than was budgeted or an additional $613,766 for the year in all
funds ($413,678 in the tax funds). This is in addition to the amount that we have
asked the Employee Health Insurance Task Force to find ($236,000 in recurring
savings in Fiscal Year 2004), and the original total anticipated increase of $1.2
million.
And a final Health related note, by year end Fiscal Year 2004, it is anticipated
that the Reserve requirement will be increased another $318,000 (from all funds)
based upon anticipated increased claims expense that the actuary uses for this
determination.
On the positive side, the review of year end balances by departments indicates
that we may generate $120,000 more than the required $200,000 in
unencumbered funds needed to support next year's budget. This is a non-
recurring revenue source in the General Fund.
Operating Funds-Budget Impact
To summarize the budget impact of the changes noted above, it is now anticipated that
on a recurring basis, the tax funds in the operating budget will be short $1,774,103 and
other city funds short by $200,088 (related to health costs).
Non-recurring shortfalls in the operating budget related to the Health Insurance
Reserve Fund balance will be $318,000.
Capital Improvement Program-Budget
Gaming representatives continue to talk to the State regarding proposed legislation. To
date these discussions have reached no satisfactory conclusion. If the gaming industry
loses the U.S. Supreme Court decision, the impact on the City of Dubuque would be a
loss of $11,645,047 in revenues that support the five year CIP and a loss of $4,900,000
in court settlement funds that were used to support the storm-water management plan.
To the extent the settlement funds are not available, the storm-water fee would need to
be increased from $1.29 to $1.79 per SFU. This impact will be better understood after
the upcoming Special Legislative Session. At that time I will provide a summary of the
Fiscal Years 2004-2008 CIP projects indicating only that portion of project expense
funded from General Fund (gaming revenues), Sales Tax and DRA Distribution,
excluding the Vision Iowa Commitments. These projects total $40,701,800 over the
five-year period. The potential $11,645,047 shortfall translates into a 28.6% reduction
in CIPs funded from these sources.
Operating Funds-Cut-Back Budgeting Approach
I would recommend we use a modified zero base budgeting approach to prepare the
Budget Reduction Recommendations for City Council consideration, amendment and
adoption. This budgeting approach recognizes that employee reductions cannot be
made without impacting City services. Each department will be reviewing the services
they now provide and prioritizing those services. Top priority will be given to mandated
programs that cannot be reduced, as opposed to services provided to a few people or
services that are purely discretionary. Attached is an outline of the process that has
been used in the past, and has been distributed to department managers for them to
begin the process (Attachment A). The recommended budget reductions and/or
revenue increases do not have to go into effect July 1,2003. However, the total
recurring savings must be sufficient to get the budget back into balance.
Although City Council could chose to draw down reserves to delay this problem until
next year, I believe this would not be a fiscally sound approach to managing the budget
problem. I believe it is important that we maintain sufficient reserves to meet the policy
guidelines established by City Council. The bond rating agencies will ask about our
reserve policy and will examine the reserve levels. They will expect reserves to be
maintained and will look for actions that indicate our City Council has made the more
difficult budget reduction/fee increase decisions to bring the budget back into balance.
Cities will be expected to use sound financial practices in managing their budget
problems. If the drawdown of balances was for one year only and there was a plan to
reinstate those fund balances to acceptable levels in the following year, you may not
damage your bond rating but there are no guarantees. In addition, those reserves are
used to provide sufficient cash flow to pay bills and should be reduced only in an
emergency.
The City's financial consultant, Evensen Dodge Inc. has been advising their clients not
to draw down reserves unless there is a plan for reinstating those fund balances in
future years. Cities must be vigilant in preserving their credit rating in order to assure
no long-term slippage of their financial position.
Fund Accounting
It is important to note that all cities have fund based accounting systems with
regulations, covenants and State and Federal rules and requirements that determine
how each fund can be spent.
For example, the utilities are self-supporting enterprises that generate revenue sufficient
to cover operating and capital expense related to that particular enterprise. For the City
of Dubuque, this includes water, sewer, the new stormwater utility, refuse, landfill,
parking and internal service funds.
Other funds that are restricted due to the source of revenue include the Community
Development Block Grant Fund, Section 8 Housing Fund, Road Use Tax Fund, Vision
Iowa Fund, UDAG Repayments, HOME Grant, Rental Rehab Payment (RRP) Fund,
Airport Passenger Facility Charge, and any proceeds from bond sales.
Funds that are allowed by State Code and are restricted in use are the self insurance
reserve funds (health and worker's comp) and the special assessment fund.
Finally, the capital funds are those used to maintain control of construction projects for
various functional areas such as Street Construction, Airport Construction and Sales
Tax (20% committed to maintenance of facilities and infrastructure). These funds
include multiple sources of revenue such as federal and state grants, transfers in from
DRA Distribution funds, and private participation. The sources of funding are normally
committed to a specific use and are non-recurring.
Sales Tax Revenue is restricted based on the language in the referendum that was
passed February 2, 1988. That language states that 50% will go for property tax relief
and is deposited directly into the City's General Fund as a recurring revenue stream.
Thirty percent of projected sales tax receipts will be used for: (a) the reduction by at
least 75 percent of street special assessments and (b) the maintenance and repair of
streets. Twenty percent will be used for: (a) the upkeep of City-owned property such as
sidewalks, steps, storm sewecs, walls, curbs, traffic signals and signs, bridges and
buildings and facilities (e.g., Airport, Five Flags Center, Library, Law Enforcement
Center, City Hall, fire stations, parks and swimming pools); (b) Transit equipment such
as buses; (c) riverfrent and wetland development; and (d) economic development
projects.
Gaming revenues include recurring revenues from facility rent, gaming tax and
admission fee and non-recurring revenues which include the annual distribtution of 50%
of the Dubuque Racing Association's operating surplus to the City.
The City has always tried to minimize dependence on gaming revenues in the operating
budget. It was felt that a fiscally sound policy was to commit two thirds of the annual
recurring gaming revenues to the capital budget, thereby providing a-cushion for future
years, when gaming revenues could fluctuate with the local economy. Should gaming
revenues begin to decline, the capital budget projects would be eliminated, deferred or
funded from some other soume if they were a high priority. This was maintained over
years, while still meeting the property tax guideline of no increase for the average
residential property. However, FY 2004 brought new financing challenges including.
double-digit inflation in key areas (health costs, liability, and property insurance, utility
costs), a 20.47% increase in Police and Fire Pension rates, decreasing State revenues
and reduced sales tax projections. The Fiscal Year 2004 guideline reflected the impact
of the changes and was changed to a 50/50 split of gaming taxes and rents between the
operating and capital budgets. This resulted in an additional $746,291 toward property
tax relief in Fiscal Year 2004. It is felt that this is still a fiscally responsible policy and
increasing the amount in the operating budget is not recommended as a solution to
addressing the recurring operating budget problems.
Distribution of any surplus funds from DRA are required by lease to be made into tlqe
capital improvement fund and have always been committed 100% to the capital budget
per the lease agreement. This lease has been approved by the Iowa Racing and
Gaming Commission. These funds will realize a dramatic reduction if the gaming
interests are unsuccessful in their tax case currently with the U.S. Supreme Court.
I have been asked by several employees why the City can't just move funds from the
capital budget to the operating budget to solve the problem. As noted above, each fund
and source of revenue has its own restrictions. In general, capital improvement budget
funding sources are either dedicated funds (i.e., grants, private participation that is
match for other funds, utility funds, portion of sales tax revenues committed by
referendum to the CIP, and DRA distribution funds). The only truly flexible funding
source is the recurring gaming revenues and 50% of those are already committed to the
operating budget. Our bond rating service inquires about this policy each times we sell
bonds and I believe increasing the amount going into the operating budget could
jeopardize our Aa3 bond rating. Gaming revenues are looked on by the rating services
as uncertain revenue streams and the more we put into the operating budget to cover
recurring expense, the more the rating services would be concerned about our future
capacity to repay debt.
Policy Guidelines
Attachment B provides a summary of the policy guidelines that will be followed in our
review of the base level decision packages. These are excerpts from the Policy
Guidelines adopted by City Council in November, 2002.
Modified Zero Base Budqeting Approach
The modified zero base budgeting approach provides targeted dollar reductions by
fund. For example,.the health insurance cost increases impact all of the cities various
operating funds. When the budget reduction recommendations are presented to City
Council, they will be prepared and presented by fund. We will be examining decision
packages within each fund to determine if there is any leeway to shift costs from the tax
funds to one of these funds and to provide sufficient savings to cover increased health
costs.
Requested Action
The requested action step is to forward this material to City Council for their review,
comments, and approval at their May 19 meeting.
Fiscal Year 2004 Budget
Modified Zero Based Budgeting Approach
Date Issued May 9, 2003
ATTACHMENT A
The last time the City of Dubuque used a modified zero base budgeting approach
was Fiscal Year 1985. This approach worked well as a method for arriving at
recommended service level reductions necessary to balance the budget.
Unfortunately, we once again find ourselves in need of this cut-back budgeting
approach to bring the Fiscal Year 2004 budget back into balance after State cuts,
insurance cost increases and tax askings already certified to the County Auditor.
Approach
The modified zero base budgeting approach we will be using begins with a
maintenance level budget expressed in terms of projected expense and revenue
dollars and in terms of the level of services (objectives and performance
measures) that will be provided for the given level of expenditures. We have
completed this phase of the budget which is the recommended budget presented
to City Council in the printed Fiscal Year 2004 budget documents.
The next phase of budget preparation under the modified zero base budgeting
approach is for each department to be given a dollar amount that needs to be
taken out of their budget as recommended to City Council. The maintenance
level budget less this pre-determined dollar reduction is then referred to as the
Base level budget. Hence the term, modified zero base budget.
The dollar reduction amounts have been determined by department and by fund
and are presented on the attached summary sheet (Attachment III). You will
note that no departments or funds are exempt. The target amount can be ardved
at via reduced expense and/or increased revenues, however, they must be
realistic and attainable in Fiscal Year 2004.
The tool we will use for developing the recommended budget cuts is to develop
decision packages that, if approved, are reductions from the maintenance level
expense budget or increases to the revenue budget. These dollar changes are
then expressed in terms of anticipated impact on existing service levels. The
forms will appear very familiar to you since they are the same ones used for
developing improvement level decision packages. In this process, you may only
develop decision packages related to your own department.
No one is expected to cut positions and maintain the status quo in terms of
services provided to their customers. We start out with the assumption that we
have been operating as a lean organization and that we don't have excess
personnel that can be eliminated without impacting service. I understand that the
City workforce has been decreased by 64 FTE positions since 1981 (Attachment
I) in spite of the fact that numerous services have been added over the years
(Attachment II).
The additional health care expenses and cuts in State revenues are permanent,
therefore, the savings must be recurring. Real savings must occur in Fiscal Year
2004, which begins on July 1,2003.
You are encouraged to have brain-storming sessions with employees to see if
there are suggestions for doing things differently or better that might realize cost
savings, however, I understand that it is difficult to ask employees to help make
decisions to eliminate their own position or that of employees they work along
side of on a day-to-day basis. Therefore, I leave it up to the Department
Manager to decide the level of employee involvement within their department.
Procedures
1. You will want to begin the process by developing a comprehensive list of
services provided by your department at either the department or activity level.
2. The next step is to prioritize the service list in terms of what services you feel
are most important to be maintained down to the least important. Each
department manager needs to create his or her own criteria for determining these
priorities. There is no magical formula that fits all. You should review City
Council goals, priorities and management agenda to see if they speak to any
operating budget services that are provided by your department.
2.a. A service may be broken down into smaller increments or levels
because a basic level of service may be considered a very high priority, while
enhanced portions of the existing level of service could be cut and not have
as great an impact. The lower priority services and/or service levels will
become part of your base level decision packages that will be recommended
to the City Manager.
2.b. To arrive at the target dollar savings, it will require significant reductions
in service levels and personnel complement. I doubt there is any department
that could reach their target dollar reductions without impacting full-time
employees. You can spend a lot of time developing decision packages that
amount to very little in terms of dollar savings, but eventually, you will need to
think about packaging some of the service level changes together because
they are related to a reduction in a full time staff position.
3. Once you have grouped service level changes into meaningful, stand-alone
decision packages, you then need to determine the line item expense and
revenue impacts associated with the decision package. Start with your lowest
priority services. Your goal is to cost out enough of your lower priority services or
service levels (base level decision packages) to reach the target dollar reduction
amount for your department.
3.a. Please review the list of base level decision packages carefully.
These must be stand alone decision packages. In other words, if it is
necessary for us to Cut your bottom three priorities, can you eliminate or
reduce the service levels you have described and continue to operate and
provide the balance of services you currently provide. Or, for example,
have you just eliminated .15 FTE of a full-time position and can no longer
operate other services because they require 5 days per week, and full-
time coverage.
4. Departments cannot reduce debt service expenditures, health insurance,
worker's comp, general liability, property or other insurance coverage and
expense as part of your decision packages.
5. Equipment items cannot be deferred as part of a decision package. We are
already looking at city-wide changes to the vehicle and computer replacement
policy 'that would not just defer one years cost but impact the entire replacement
schedule. To the extent we achieve savings with these modifications, it will
mean reduced cuts through the base level decision package process.
6. The Personnel Manager will be meeting with union representatives and the
Health Insurance task force to determine the extent to which they are willing and
able to help address the outstanding deficit. To the extent these efforts are
successful, it will also mean reduced cuts through the base level decision
package process.
7. Your preliminary plan for budget reductions and revenue enhancements will
be submitted to the Budget Office by Friday, May 30. The following week will be
a series of meetings to discuss these items. On Thursday, June 6, there will be a
Department Manager meeting to review your decision packages to see if there
are any unanticipated impacts of decision packages on other departments.
8. If you have a board or, commission, we would ask that you present your
recommended decision packages and priorities to the board or commission for
their comment the week of June 9. Please present both your recommendations
and suggestions from your boards and commissions regarding any changes to
the priorities being presented.
9. The deadline for submitting the final material to the Budget Office will be
Thursday, June 12 at noon. This material will be reviewed by the City Manager,
Administrative Services Manager, Assistant City Manager, Personnel Manager
and Finance Director and a meeting will be set up to go over any questions they
may have before the City Manager arrives at decisions for changes to be
recommended to City Council at the June 16 meeting. There will be a special
Department Manager meeting the afternoon of June 13th for the purpose of
sharing the City Manager's recommendations.
ATTACHMENT II
Back.clround Information
Since 1981, the City has reduced the number of full-time employees from 588 to
519. This is a reduction in the full-time work force of 11.8 percent or 69
employees. This has happened during a time when new or expanded City
programs and services have been added to meet increasing demands and
mandates. Initiatives during that time period have included:
· economic development efforts
· yard waste and recycling programs
· county-wide E911 dispatch
· comprehensive housing programs
· communityodented policing
· DARE and other drug related programs
· rental property inspections
· operation of leisure pools
· McAleece Recreation Complex operations
· City Focus newsletter
· industrial pretreatment and lead and copper testing programs
· Fifth Street parking ramp
· hazardous materials team
· advanced life support ambulance service
· government Channel 8 programming
· cable TV monitoring and regulation
· additional commissions including Long Range Planning,
Environmental Stewardship, Investment Oversight, Development
Review Committee.
· extension of hike and bike trails
· City operated FBO functions
· increased Zoning Code enforcement
· developers and builders roundtables
· implementation of Riverfront Plan
· downtown circulation study
· coordination and public information programs related to the
Highway 20 project
· implementation of the Neighborhood Reinvestment Strategy
· lead paint abatement program
· additional neighborhood parks and open spaces
· reinstatement of traffic accident investigations
· school resource officer program
· police canine unit
ATTACHMENT B
FY2004 PolicyGuidelines
Paget
EXCERPTS FROM POLICY GUIDELINES FOR FY 2004
BUDGET PLANNING AND ADMINISTRATION
OPERATING BUDGET GUIDELINES
The Policy Guidelines are developed and adopted by City Council early in the
budgeting process in order to provide targets or parameters within which the budget
recommendation will be formulated. The final budget presented by the City Manager
may not meet all of these targets due to changing conditions and updated information
during budget preparation. To the extent the recommended budget varies from the
guidelines, an explanation will be provided in the printed budget document.
BALANCED BUDGET
Guideline
The City will adopt a balanced budget in which expenditures will not be allowed
to exceed reasonable estimated resoumes. The City will pay for all current
expenditures with current revenues.
BALANCE BE'I'VVEEN SERVICES AND TAX BURDEN
Guideline
The budget should reflect a balance between services provided and the burden
of paying for those services. It is not possible or desirable for the City to provide
all of the services requested by individual citizens. The City must consider the
ability of citizens to pay for services in setting service levels and priorities.
MAINTENANCE OF EXISTING SERVICES
Guideline
To the extent possible with the financial resources available, the City should
attempt to maintain the existing level of services. Annually, however, each
service should be tested against the following questions: (a) Is this service truly
necessary?. (b) Should the City provide it? (c) What level of service should be
provided? (d) Is there a better, less costly way to, provide it? (e) What is its
pdority compared to other services? (f) What is the level of demand for the
service? (g) Should this service be supported by property tax, user fees, or a
combination?
FY 2004 Policy Guidelines
Page ¢
7. IMPROVED PRODUCTIVITY
Guideline
Efforts should continue to stretch the value of each tax dollar and the City
services that it buys through improved efficiency and effectiveness. Using
innovative and imaginative approaches to old tasks, reducing duplication of
service effort, creative application of new technologies and more effective
organizational arrangements are approaches to this challenge.
USE OF VOLUNTEERS
Discussion
As our financial capabilities decrease, we must seek to expand our resources by
continuing to get citizens directly involved in supplementing our service delivery
capability. Citizens must be encouraged to assume tasks previously performed
or provided by City government. This may require us to change our approach to
service delivery, such as, providing organizational skills, training, coordinating
staff, office space, meeting space, equipment, supplies and materials, but not
directly providing the more expensive full-time staff. Activities where citizens can
continue to take an active role include: Library, Recreation, Parks, Five Flags
Center, Cable TV (govemment channel camera operators) and Police. The City
initiated the Dubuque Volunteer Corps Program in FY 1998 to encourage citizen
involvement in the many programs offered by the City and in maintaining the
facilities for community betterment.
Guideline
In the future the maintenance of City services may well depend on volunteer
citizen staffs. In FY 2004 efforts shall continue through the Dubuque Volunteer
Corps to identify and implement areas of City government where (a) volunteers
can be utilized to supplement City employees to maintain service levels (i.e.,
Library, Recreation, Parks, Cable TV, Police) or (b) services can be "spun off" to
non-government groups and sponsors (i.e., YMCA/YWCA, United Way groups,
Recreation Groups).
RESTRICTIONS ON INITIATING NEW SERVICE
Guideline
No new service will be considered except (a) when additional revenue or
offsetting reduction in expenditures is proposed or (b) when mandated by state
or federal law.
FY 2004 Policy Guidelines
Page ~'
10. SALARYINCREASES OVER THE AMOUNT BUDGETED TO BE FINANCED
FROM BUDGET REDUCTIONS IN THE DEPARTMENT(S) OF THE
BENEFITING EMPLOYEES
Discussion
The recommended budget will include salary amounts for all City employees.
However, past experience shows that budgeted amounts are often exceeded by
fact finder and/or arbitrator awards. Such "neutrals" often do not take into
account the overall financial capabilities and needs of the community and the
fact that the budget is a carefully balanced and fragile thing. Such awards have
caused budgets to be overdrawn, needed budgeted expenditures to be deferred,
working balances to be expended and, in general, have reduced the financial
condition or health of the City government. To protect the financial integrity of
the City government, it is recommended that the cost of any salary adjustment
over the amount provided in the budget (that is, not financed in the budget) come
from reductions in the budget of the department(s) of the benefiting employees.
Guideline
Salary increases over the amount budgeted for salaries shall be financed from
operating budget reductions in the department(s) of the benefiting employees.
11, BALANCE BETWEEN CAPITAL AND OPERATING EXPENDITURES
Guideline
The provision of City services in the most economical and effective manner
requires a balance between capital (with particular emphasis upon replacement
of equipment and capital projects involving maintenance and reconstruction) and
operating expenditures. This balance should be reflected in the budget each
year.
12. USER CHARGES
Discussion
User charges or fees represent a significant portion of the income generated to
support the operating budget. It is the policy that user charges or fees be
established when possible so those who benefit from a service or activity also
help pay for it. This is easy in some cases and municipal utility funds have been
established for certain activities which are intended to be self-supporting.
Examples of utility funds include Water User Fund, Sewer User Fund, Refuse
FY 2004 Policy Guidelines
Page £
Collection Fund, and Parking Fund. In other cases, a user charge is made after
the Council determines to what extent an activity is to be self-supporting.
Examples of this arrangement are fees for swimming, golf and recreation
programs and certain inspection programs.
13. OUTSIDE FUNDING
14,
Discussion
The purpose of this guideline is to establish the policy that the City should
aggressively pursue outside funding to assist in financing its operating and
capital budgets. However, the long-term commitments required for such funding
must be carefully evaluated before any agreements are made. Commitments to
assume an ongoing increased level of service or level of funding once the
outside funding ends must be avoided.
Guideline
In order to minimize the property tax burden, the City of Dubuque will make every
effort to obtain federal, state and private funding to assist in financing its
operating and capital budgets. However, commitments to guarantee a level of
service or level of funding after the oUtside funding ends shall be avoided.
GENERAL FUND OPERATING RESERVE OR WORKING BALANCE
Discussion
An operating reserve or working balance is an amount of cash, which must be
carded into a fiscal year to pay operating costs until tax money, or other
anticipated revenue comes in. Without a working balance there would not be
sufficient cash in the fund to meet its obligations and money would have to be
borrowed. Workinq balances are not available for funding a budget; they are
required for cash flow (i.e., to be able to pay our bills before taxes are collected).
The rule of thumb the state recognizes for determining a reasonable amount for
a working balance is (a) anticipated revenues for the first three months of the
fiscal year less anticipated expenditures or (b) 5 percent of the total General
Fund operating budget (excluding fringes and tort liability expense). However, in
discussions with Moody's Investor Service a factor of 10 percent was
recommended for "A" rated cities. This is due to the fact that a large portion of
our revenue sources are beyond our control and therefore uncertain. In the case
of Dubuque, 10 percent represents approximately $2,556,000
FY 2004 Policy Guidelines
Page [
Guideline
The guideline of the City of Dubuque is to maintain a General Fund working
balance or operating reserve of 10 percent of the total General Fund Operating
budget requirements or approximately $2,556,000 for FY 2004.
15.
USE OF UNANTICIPATED~ UN-OBLIGATED~ NONRECURRING INCOME
Discussion
Sometimes income is received that was not anticipated and was not budgeted.
Often this money is not recurring and reflects something, which happened on a
one-time basis to generate the "windfall".
Nonrecurring income must not be spent for recurring expenses. To do so
causes a funding shortfall the next budget year before you even start budget
preparation. Nonrecurring expenditures would include capital improvements and
equipment purchases.
Guideline
Nonrecurring un-obligated income shall be spent only for nonrecurring expenses.
Capital improvement projects and major equipment pumhases tend to be
nonrecurring expenditures.
16. USE OF"UNENCUMBERED"FUND BALANCES
Discussion
Historically a budget is not spent 100 percent by the end of the year and a small
unencumbered balance remains on June 30th. In addition, income sometimes
exceeds revenue estimates resulting in some unanticipated balances at the end
of the year. These amounts of un-obligated year-end balances are in turn
"carried over" into the new fiscal year to help finance it.
The FY 2002-03 General Fund budget, which went into effect July 1, anticipated
a "carryover balance" of $200,000 or approximately 2 percent of the General
Fund. For multi-year budget planning purposes, these guidelines assume a
carryover balance of $200,000 in FY 2004 through FY 2008.
Guideline
The available carryover General Fund balance to help finance the budget and to
reduce the demand for increased taxation shall be anticipated not to exceed
$200,000 for FY 2003-04 and beyond through the budget planning pedod. Any
amount over that shall be programmed in the next budget cycle as part of the
capital improvement budgeting process.
May 7, 2003
RSVP
350 North Grandview Avenue
Dubuque, Iowa 52001-6392
563.589.2655
sponsored by The Finley Hospital
Dear Mike,
The Dubuque County RSVP program and The Finley Hospital were very disappointed to
learn that the RSVP 2003 -2004 Purchase of Service agreement with the city may be
reduced or eliminated. After attending the February 26th city budget hearing, we thought
At the present time we have 450 volunteers working at 45 volunteer sites. 120 of these
volunteers donate time to the city at the following city job sites:
City Planners Office
City Manager's Office
City Zoning Board
Wheels on Recycling Bins
Mailings for Departments as needed
Washington Tool Library
Dubuque Arboretum
Dubuque Food Pantry
Dubuque Comm. Schools
Dubuque Nursing and Rehab
Sunny Crest Manor
Funding from the City of Dubuque plays a crucial role in RSVP's ability to meet the
needs of this community and the not-for-profit sector. Reducing or eliminating that
funding means we will have to reduce or eliminate meeting some of the community needs
we currently meet. We strongly urge you to continue funding RSVP at it's present rate of
$7,341.
Thank you for your consideration of this request.
Sincerely.
inda Chapman, RSVP Director
RSVP Advisory Council Members, . _~-~
cc~ Mayor Terry Duggan, Dubuque City Council Members
"RSVP is a nationwide volunteer program that invites adults age 55 and older to
Use their life experiences and skills to answer the call of their neighbors in need."
Dubuque Area Labor-Management Council
"Working together for a better community"
220 West 7~ Street at the Town Clock, P.O. Box 14, Dubuque, IA 52004-00].4
Phone: 563-582-8804 FAX: 563-582-1224 E-mail: dalmc@mwci.net
Internet: htr p://www.dalmc.com
Apd118,2003
Michael VanMilligen
City Manager
Ci~ of Dubuque
50W. 13th Street
Dubuque, iA 52001
Dear Mike:
Thank you for your communication regarding the Public Strategies Group Proposal and its potential impact
on the City if passed by the State Legislature and signed by the Governor.
While t do not have time to become completely informed about the genesis, purpose or implications of this
legislative proposal - and therefore am not able to take a direct position on the matter - I have advised local
legislators regarding the threat it poses to our own funding, as you outlined in your memorandum.
On the surface, it appears that stateofficials - by considering this raw and broad-brushed approach to
budgeting, cutting state payments to local governments - is refusing to establish priorities or to take
responsibility for them. Except, perhaps, they are indicating that the needs and requirements of Cities and
Counties are not their priorities, whatever they may be. The impact of the proposal that has been presented
to them does not yet seem to have been carefully considered.
I write now to encourage you and the City Coundl to avoid making the same mistake. Please ensure that any
cuts that the City makes in response to the proposed legislation be balanced and pursuant to a clear set of
priorities. These principles, among others, are no doubt guiding your decision-making with respect to any
jobs that may need to be eliminated. I urge you and the City Council to use the same principles with respect
to other cuts that may be necessary. For example, I hope that agency agreements - or agency a;greements
funded from the General Fund - are not the only other items being considered for reduction or elimination.
I understand from your memo that the proposed cuts will reduce the City's General Fund. I trust that activities
not financed through the General Fund will also be reviewed when your priorities for budget cuts are set,
insofar as those other funds can be used to help maintain important services now paid for through the
General Fund. I think this is also a matter of fairness and balance.
The motto of the Dubuque Area Labor-Management Council is "working together for a better community."
When that works involve sacrifice, we are ready and willing to sacrifice for the sake of the community. But if we
are to remain a community, all sacrifice should be shared sacrifice.
Thank you very much for your attention and consideration to this communication.
Sincerely,
Charles Isenhart
Executive director
C: Board of Directors, City Council members, Helping Services of Northeast Iowa, Operation: New View,
Project Concern, Retired Senior Volunteer Program, Substance Abuse Services Center, Dubuque Humane
Society
SASC
SUBSTANCE ABUSE SERVICES CENTER
April 28, 2003
~-~esler Centre
759 Main Street
Dubuque, Iowa 52001-6825
(563~ 582-3784
Fax (563~ 5824006
Michael C. Van Milhgen
City Manager of Dubuque
50 West 13th Street
Dubuque, Iowa 52001-4864
Dear Mike:
[] 907W. Main
EO. Box 31
Manchester. Iowa 52057-1534
(563) 92%5112
Fax {563 927-3340
[] Stepping Stone Hatb~ay House
135 West 17th Street
Dubuque, Iowa 52001
Phone/Fax 563/589-0570
This letter is in response to your letter regarding the Public Strategies Group proposal and the impact it will
have on the FY2004 budget for the City of Dubuque. As I understand it, the legislation has passed and is
headed to the Governor's desk. I'm sure the full impact oftl'fis legislation has yet to be determined.
However, I would hope you could find a way to maintain the tax-funded Purchase of Service Agreements
that were approved as part of the FY2004 budget.
I particularly want to advocate for the continued funding of SASC's program, which provides early
intervention and treamaent services for youth. I would point out that the belief of Attorney General Tom
Miller and many others hi Iowa is that "the number one thing we can do to fight crime is fight drugs and
the number one thing we can do to fight drugs is to do a better job with drug treatment."
I believe that safeguarding the public safety of its citizens is an important responsibility for the City of
Dubuque, and an important piece of that is maintaining existing substance abuse treatment services.
Thank you for your consideration.
.._.....-Diane K. Thomas
Executive Director
cc: City Council Members
SOCIETY.~~
SERVING THE TRi-STATES
May 12, 2003
Dear City Council Members, Mayor Duggan and City ManagerMike Van
Milligan,
For many years the Dubuque Humane Society has contracted to house stray and
lost animals from the city of Dubuque. The Dubuque Humane Society considers
housing stray and lost animals an essential service that we provide for ff~ c~tx ~
through a purchase of service agreement. Although on occasion we !'~Ye 1ried to
establish a purchase of service agreement based on the number of ammals~w~ ?
house for the city, we have been unsuccessful. The city has been unwilling to
execute a contract based on the cost of actual services provided. Consequently,
the amount we receive is arbitrary and fails to cover the cost of the service we
provide.
On April 18, we received notification from the City Manager's Office that our
contract may not be renewed. While we realize the City is facing many difficult
choices right now, we are very concerned about public heakh and safety if our
contract is not renewed. Last year we received a total of 991 stray animals from
the city, including stray animals found by residents, and those brought in by the
police and animal control. The city's stray and lost animals made up 27% of the
total number of animals we cared for and the city's unwanted animals made up
34% of the animals coming into the shelter. Dubuque provided us with 61% of
our total animals.
Since we moved into the new facility in 1992, the number of animals we care3
has grown tremendously. In 1992 we cared for 1,774 total animals. Cit~
totaled 1.063 or 59%. In 2002, we took in a total of 3_630 animals, over tW~ee~as
many as 1992. The city of Dubuque alone accounted for 2,216 of those
The total number of stray and lost animals from the city of Dubuque was ~i~
For this service we were paid $30.034 or approximately $30 per animal, ~ur
cost per animal, srrmght across the board is $88 so we are subsidi~the ~[ty at
the rate of $58 per animal or a total of about $57,000 last year tG~ff~
fundraising projects on behalf of the stray and unwanted animal~ tiave~ k/~l~sidized
our city contract for many years.
The mission of the Dubuque Humane Society is to promote the human ani~raal
bond and the humane treatment of all animals. To that note_ 47% of our antis
are unwanted by their owners for one reason or another and we keep them from
being dumped on the street. We investigate over 400 cruelty and neglec~
175 North Crescent Pddge
Dubuque, IA
52003
Ph. 563-582-6766
Fax 563-582-0140
Website www.
dbqhumane.org
SERVING THE TRI-STATES
complaints each year. Through our humane education programs in the schools,
we teach dog bite prevention and responsible pet ownership to 3,000 students.
Our volunteers visit 13 nursing homes each month to share the animals with the
residents. We offer puppy socialization classes, obedience classes and behavior
counseling at the shelter. The Dubuque Humane Society works to benefit the
whole community through our cooperative programs with many area
organizations including Maria House, YWCA Domestic Violence Progratn, Red
Cross, NICC, and Project Concern - just to mention a few.
According to the ICMA (International City/County Management
Journal, the cost of animal control should be $4-7 per person. Dubuque averages
$1.72 per person based on the figures provided by Mary Rose Corrigan in Health
Services. This is far below the average. We realize that this is not the time to ask
for an increase, but want you to realize that Dubuque is far below average in this
area. We are willing to continue to raise funds to supplement the cost of caring
for the city animals but we need your financial assistance to do so.
The Dubuque Humane Society Board of Directors regrets that this is the decision
we have had to make and are deeply concerned for the welfare of the City of
Dubuque's dogs and cats, as well as, the public health and safety of our citizens.
While we wish to continue to support animal welfare in Dubuque, we cannot
afford to do so by putting our organization at risk financially. The Dubuque
Humane Society will still take owner surrendered animals from the city, as well
as, stray or unwanted animals from Dubuque County, Jo Daviess County and
Grant County as per our contracts. If the city does not extend our contract,
will not take city stray or lost animals after July 1.
If you have questions or seek more information, please contact me at 582-676G~
Thank you for your time and consideration
Sincerely,
Jane McCall, Executive Director
May12,2003
Dear Dubuque City Council, Mayor Duggan and Dubuque City Manager Van Milligen,
Recently, the Board of Directors of the Dubuque Humane Society met to address an imminent
concern. We have received correspondence from the Dubuque City Manager's office ind/cating that the
City of Dubuque's contract with the Dubuque Humane Society may not be renewed. The contract
provided for payment of approximately $30,000 to be made to the Dubuque Humane Society, in
exchange for which the Dubuque Humane Society accepted stray or lost dogs and cats found within the
Dubuque City Limits. In 2002, we received and cared for 99I strays and 1,225 unwanted animals fi.om
the City of Dubuque. Through the generous support of our many contributors, we have worked to
subsidize the contract with the City of Dubuque with our fund raising efforts, in the absence of which we
would not have been able to provide this service to the City of Dubuque in past years. We have similar
contracts with both Dubuque County and Jo Daviess County. After much consideration, the Dubuque
Humane Society Board of Directors has detern~ined that, in the event the City of Dubuque does not
renew its contract with us, we will be unable to provide services to City of Dubuque stray and lost dogs
and cats. We will no longer be able to assist the City of Dubuque in protecting public health and safety
in this way. In the absence ora significant increase in the contributions that we receive, we do not
anticipate that our decision will change.
As a Board, it is our job to act consistent with our Mission Statement to promote the human-
animal bond and the humane treatment of all animals. We must look at the big picture and ensure the
continued operation of the Dubuque Humane Society so it may serve Dubuque and Jo Daviess Counties
and the surrounding areas. We have determined that we would not be best servicing the animals within
our community if we were to accept city stray or lost dogs or cats without a city contract. Providing
services in the absence of having adequate funding to provide such services would result in the
permanent closure of our facility. We regret that this is the decision that we have had to make and are
deeply concerned for the welfare of the City of Dubuque's dogs and cats and, frankly, the health and
safety of our community, if its population of dogs and cats remains unchecked; but we have determined
the greater good is served by making this very difficult decision.
We hope it does not become necessary to place into effect this very significant policy change but
want to share with you and the community the issue, our concerns, and our decision. It is our continued
desire to work to benefit the community through our many cooperative programs with area organizations
including Mafia House, YWCA Domestic Violence Program, Red Cross, NICC, Project Concern, and
the Food Pantry. We plan to continue our Humane Education Classes in area schools and our community
outreach to area nursing homes. We plan to continue to serve the community and our animal friends to
the extent that it is f'mancially feasible.
FY 2004 Policy Guidelines
Page t
CIP BUDGET GUIDELINES
18. INTEGRATION OF CAPITAL RESOURCES
Guideline
In order to obtain maximum utilization, coordination and impact of ali
capital improvement resources available to the City, state and federal
block and categorical capital grants and funds shall be integrated into a
comprehensive five year Capital Improvement Program (ClP) for the
City of Dubuque.
19. INTEGRITY OF CIP PROCESS
Guideline
The City should make all capital improvements in accordance with an
adopted Capital Improvement Program (ClP). If conditions change and
projects are to be added and/or deleted from the ClP, the changes
shall be made only after approval by the City Council.
20.
RENOVATION AND MAINTENANCE
Guideline
Capital improvement expenditures should concentrate on renovating and
maintaining existing facilities to preserve prior community investment.
21. NEW CAPITAL FACILITIES
Guideline
Construction of new or expanded facilities which would result in new or
substantially increased operating costs will be considered only if: 1 ) their
necessity has been clearly demonstrated; 2) their operating cost estimates and
plans for providing those operating costs have been developed; 3) they can be
financed in the long term; and 4) they can be coordinated and supported within
the entire system.
FY 2004 Policy Guidelines
Page t
24. ROAD USE TAX FUND
Discussion
Actual Road Use Tax Fund receipts are as follows:
FY 1985 - $2,069,065 FY 1995 - $3,484,524
FY 1986 - $2,207,467 FY 1996 - $3,841,921
FY 1987 - $2,259,436 FY 1997 - $3,977,528
FY 1988 - $2,379,592 FY 1998 - $4,072,296
FY 1989 - $2,617,183 FY 1999 - $4,415,192
FY 1990 - $3,037,587 FY 2000 - $4,671 856
FY 1991 - $3,122,835 FY 2001 - $4,689,000
FY 1992 - $3,119,087 FY 2001 - $4,628,122
FY 1993 - $3,121,357 FY 2002 - $4,620,514
FY 1994 - $3,343,678
The FY 2003 budget was based on receiving $4,429,000 in Road Use Tax funds.
in FY 2003, 74.3 percent of the Road Use Tax income is in the operating
budget.
In FY 1997, the City Council adopted a plan to shift Road Use Tax funds from
the operating budget to the capital budget at a rate of $250,000 per year. As of
FY 2001, $940,000 of Road Use Tax fund expense had been shifted to the
General Fund per the guideline. The increase in the tax askings from this shift
was offset by reduced debt service expense. Shifting additional funds was
discontinued in FY 2001, and $60,000 was actually shifted back to Road Use
Tax funds. This change reflected the continued growth of gaming receipts and
recognition that this appeared to be a much more certain revenue stream that
could be used to support the CIP budget. In FY 2003, the shift of $940,000 to
the General Fund was shifted back to RUTF to support the multi-year pay plan
approved by City Council in FY 2002.
Guideline
Since FY 1997 Road Use Tax funds have been shifted to the capital budget for
street maintenance and repair to reduce the need to borrow funds for routine
street maintenance and improvements. This shift will not occur again until such
time as there is increased revenues or reduced expense that would allow this
shift without a property tax impact.
FY 2004 Policy Guidelines
Page ~
27.
SALES TAX
Guideline
Thirty percent of projected sales tax receipts will be used for: (a) the reduction by
at least 75 percent of street special assessments and (b) the maintenance and
repair of streets. Twenty percent will be used for: (a) the upkeep of City-owned
property such as sidewalks, steps, storm sewers, walls, curbs, traffic signals and
signs, bridges and buildings and facilities (e.g., Airport, Five Flags Center,
Library, Law Enforcement Center, City Hall, fire stations, parks and swimming
pools); (b) Transit equipment such as buses; (c) riverfront and wetland
development; and (d) economic development projects.
28. NET CASH PROCEEDS (SURPLUS DISTRIBUTION) FROM THE DUBUQUE
RACING ASSOCIATION
The contract with the Dubuque Racing Association calls for distribution at the
end of its fiscal year (November) of 50 percent of its net cash operating funds to
the City of Dubuque. In mid-December, the City will receive an un-audited
estimate of proceeds to be distributed. These proceeds were allocated
beginning with the next fiscal year through the capital improvement process with
the highest pdodty given to reducing the City's annual borrowing. This policy is
being changed to allow for use of the proceeds to support the current capital
improvement budget (versus the next fiscal years' budget).
In addition, the Dubuque Racing Association provides the City with projections of
future distributions since gaming is a highly volatile industry the estimates are
discounted prior to including them in the City's Five Year CIP.
One hundred pement of the January 2003 and 2004 projections of operating
surplus have been anticipated as resources to support the Fiscal Year 2005
capital improvement projects. This level has been maintained for the Fiscal Year
2005 resource estimate and then has been reduced from 100 percent to 90
percent of the year 2005 projected surplus for FY 2006, 80 percent for FY 2007,
and 70 percent for FY 2008 resources.
Guideline
In Fiscal Year 2004, the City anticipates distribution of a significant amount of net
cash proceeds for use in the Capital Improvement Program. These amounts will
be budgeted in the Five Year CIP in the year they are received and will be used
to reduce required General Obligation borrowing.
FY 2004 Policy Guidelines
Page t
29. EMPHASIS ON INITIATIVES THAT REDUCE FUTURE OPERATING BUDGET
EXPENSE
Guideline
Capital improvement expenditures that will reduce future maintenance and
operating expense will receive priority funding and these types of initiatives will
be encouraged in all departments and funding sources as a means of
maximizing the use of available resources. This emphasis reflects fiscally
responsible long range planning efforts.
30. USE OF GAMING RELATED RECEIPTS
Guideline
The amount of total gaming receipts from taxes and rent committed annually in
support of the annual operating budget has historically been one-third of the total
gaming tax and lease revenues. It was felt that a fiscally sound policy was to
commit two thirds of the gaming revenues to the capital budget, thereby
providing a cushion for future years, when gaming revenues could fluctuate with
the local economy. Should gaming revenues begin to decline, the capital budget
projects would be eliminated, deferred or funded from some other source if they
were a high priority.
The City has always tried to minimize dependence on gaming revenues in the
operating budget. This was maintained over years, while still meeting the
property tax guideline of no increase for the average residential property.
However, FY 2004 has brought new financing challenges including double-digit
inflation in key areas (health costs, liability, and property insurance, electrical
costs), a 5 percent increase in Police and Fire Pension costs, decreasing State
revenues and reduced sales tax projections. This year's guideline reflects the
impact of the changes and recommends a change to a 50/50 split of gaming
taxes and rents between the operating and capital budgets. This will result in an
additional $746,291 toward property tax relief in Fiscal Year 2004. It is felt that
this is still a fiscally responsible policy.
BP-4B - City of Dubuque
Base Level Decision Package Form - Objectives
Base Increment #__ (1 = highest priority)
1. Department/Division Name & Number 2. Priority Ranking
Dept./Division Rank of
3. Service Level change(s) and impact of operations on community if this decision package is funded.
4. Increased (reduced) revenue (by revenue type) generated by this decision package
Activity Fund Line Item FY 04 Amount FY 05 Amount Explanation
$ $
$ $
$ $
$ $
$ $
$ $
$ $
$ $
Total: $ Total: $
5. Base level decision package expense accounts decreased (increased)
Activity Fund Line Item FY 04 Amount
FY 05 Amount
$ $
$ $
$ $
$ $
$ $
$ $
$ $
$ $
Total: $
Total: $
Explanation
FISCAL YEAR 2004 ADOPTED BUDGET
NET OPERATING BUDGET BY DEPARTMENT
TAXABLE
FUNDS MISC. REVENUE NET OPER.
DEPT w/o ecluipment GENERATED BUDGET
Protective Services
Police 8,015,828 907,247 7,108,581
Comm. Center 768,240 265,491 502,749
Fire 6,758,855 929,215 5,829,640
Disaster Services 35,580 35,580
Building w/equipment 582,127 567,000 15,127
Total 16,160,630 2,668,953 13,491,677
Human Development
Human Rights 252,058 53,400 198,658
Health Services 401,010 184,306 216,704
Park Div. 1,741,568 209,509 1,532,059
Civic Center 1,263,222 576,325 686,897
Recreation 1,717,988 1,361,748 356,240
Library 1,854,206 113,500 1,740,706
Total 7,230,052 2,498,788 4,731,264
Facilities & Env.
Airport 2,362,000 1,865,280 496,.720
Transf[ 1,718,597 1,204,267 514,330
Operation & Maint. 883,401 366,297 517,104
Engineering 748,276 67,938 680,338
Economic Developmer 104,818 17,130 87,688
Housing & Comm. Dev 117,574 99,561 18,013
Total without Debt 5,934,666
Debt Service 1 t236,431
Total with Debt 7,171,097
3,620,473 2,314,193
758,107 478,324
4,378,580 2,792,517
Administration
City Hall/Annex 162,739 162,739
Planning 435,716 43,300 392,416
City Council 122,094 122,094
City Manager's Office 793,075 454,717 338,358
Budget 133,140 31,595 101,545
Personnel 301,604 67,154 234,450
City Clerk 288,681 129,108 159,573
Finance 1,344,309 700,455 643,854
Legal 407,757 21,586 386,171
Information Sen/ 491,8t9 267,500 224,319
Purchase of Sen/ 530,492 478,770 51,722
Total 5,011,426 2,194,185 2,817,241
Total Without Debt 34,336,774 10,982,399 23,354,375
Debt Service 1,236,431 758,107 478,324
Total With Debt 35,573,205 11,740,506 23,832,699
Minimum Assigned
PERCENT Base Level Base Level
OF BUDGET Reduction Reduction
30.44% 540,000 791,385
2.15% 38,191 55,970
24.96% 442,846 649,003
0.15% 2,703 3,961
0.06% 1,149 16,811
57.77% 1,024,888 1,517,131
0.85% 15,091 22,116
0.93% 16,462 24,125
6.56% 116,382 170,561
2.94% 52,180 76,471
1.53% 27,062 39,660
7.45% 132,232 193,790
20.26% 359,408 526,723
2.13% 37,733 55,299
2.20% 39,071 57,259
2.21% 39,282 57,568
2.91% 51,682 75,741
0.38% 6,661 9,762
0.08% 1,368 2,005
9.91% 175,796 257,635
_9.91% 175,796 257,635
0.70% 12,362 18,117
1.68% 29,810 43,687
0.52% 9,275 13,593
1.45% 25,703 37,669
0.43% 7,714 11,305
1.00% 17,810 26,101
0.68% 12,122 17,765
2.76% 48,910 71,679
1.65% 29,335 42,992
0.96% 17,040 24,973
0.22% 3,929 5,758
12.06% 214,010 313,638
100.00%
1,774,103 2,615,127
5.17% 7.62%
percent reduction
Fund
Road Use
Tax Fund
Community
Development
Fund
UDAG
Repayment
Fund
DEPARTMENT/DIVISION
Operations/Maintenance Dept.
Engineering Department
Total, Read Use Tax Fund
Recreation Division
Economic Development Dept
Housing and Comm, Dev.
Planning Services Department
Health Services Department
Human Rights Department
City Manager's Office
Purchase of Services
Total, Comm. Dev. Fund
Economic Development
Purchase of Services
Total, UDAG Repmt, Fund
CITY OF DUBUQUE
ADOPTED FISCAL YEAR 2004 OPERATING BUDGET
MAJOR OBJECT BY FUND AND DEPARTMENT
EMPLOYEE SUPPLIES & CAPITAL CLEARING
EXPENSE SERVICES OUTLAY ACCOUNT
TOTAL
$1,530,354 81,502,049 $314,550 8120,808 $3,467,761
1 ~550 850 $2~400
81,530,354 $1,503,599 $315,400 $120,808 $3,470,161
$77,871 852,076
98,317 17,265 8,122
417,253 64,947 8,749
93,096 32,200 1,500
1,000
1,000
72,123 22,631
71r915
8758,660 $263,034 $18,371
859,326 $674
179~350
859,326 8180,0Z4
$129,947
8123,704
$490,949
$126,796
$1,000
$1,000
$94,754
871~915
81,040,065
$60,000
$179,350
$239,350
MINIMUM
AMOUNT
(health)
830,778
812,799
8717
BASE LEVEL
REDUCTION
(2% w/o equip.)
$63,064
31
$63,095
$2,599
2,312
9,644
2,506
20
20
1,895
1,438
81,200
81,200
Section 8
Housing and Comm, Dev.
Total, Section 8 Housing Fund
8512r843 84~124~180 85,181
$512,843 $4,124,180 85,181
$4r642r204
84,642,'204
813,862
Adjus~d ~r
$20~514
820,514
RI~P Repay, Housing and Comm. Dev.
Fund Total, State HOME Fund
821~251
$21,251
$21,251
821,251
8425
$425
Water
Operating
Water Department
Finance Department
Total, Water Operating Fund
$1,366,838 81,369,503 859,550 $4,064 $2,799,955
107,612 129r625 $237,237
$1,4/4,~bU ~1,499,1Z~ ~b~,bbU ~4,U~4
$54,808
4,745
Sewer
Operating
Fund
Public Works/Engineering Division
Water Pollution Control Dept,
Operations/Maintenance Dept,
Total, Sewer Operating Fund
$72,727 $8,899 $81,626
$1,141,206 $1,424,307 $32,730 $3,439 $2,601,682
273r458 85r323 5r850 18t585 $383t216
$1,487,391 81,518,529 $38,580 $22,024 $3,066,524
$28,790
$1,633
51,379
7r547
$58,926
CITY OF DUBUQUE
ADOPTED FISCAL YEAR 2004 OPERATING BUDGET
MAJOR OBJECT BY FUND AND DEPARTMENT
EMPLOYEE SUPPLIES & CAPITAL CLEARING MINIMUM BASE LEVEL
Fund DEPARTMENT/DIVISION EXPENSE SERVICES OUTLAY ACCOUNT TOTAL AMOUNT REDUCTION
Refuse
Operations/Maintenance Dept.
Total, Refuse Collection Fund
81~140f901 8482,132 829r600 870r061 81f722r694 833,862
=)1,140,901 8482,132 829,600 870,061 81,722,694 824,719 833,862
Stormwater Engineering Department
Total, Stormwater Operating
8243r740 8243~740 84,875
8243,740 8243,740 84,875
Landfill
Operations/Maintenance Dept,
Total, Landfill Operating Fund
=)668~215 81~001,618 842~035 =)1,711~868 834,237
=)668,215 81,001,618 842,035 =)1,711,868 810,765 834,237
Parking
Parking System
Total, Parking Operating Fund
8696r262 8265,118 813,205 82r075 8976r660 819f269
8696,262 =)265,118 8')13,205 =)2,075 8976,660 =)11,513 819,269
Cable TV City Hall Annex Maintenance =) 12,444
Fund Health Services Division 22,406 1,038
Cable TV Division 144,788 62,540
City Manager's Office 126,546 65,586
Information Services 73~492
Total, Cable TV Fund =)367,232
812,444 8249
=)23,444 469
15,253 435 8223,016 4,155
200 =)192,332 3,843
=)73~492 Ir470
8141,608 815,453 =)435 =)524,728 87,015 =)10,186
Service Public Works/Engineering Division 919,980 7,931
Fund Operations/Maintenance Dept. 758~736 68,242
Total, Service Fund 81,678,716 876,173
8927,911 818,558
1,000 275,487 81r103r465 22,049
81,000 8275,487 =)2,031,376 831,103 840,608
OPERATING BUDGET 810,395,601 $11,298,883 8496,340 8536,989 822,727,813 8200,088 8367,999