HomeMy WebLinkAboutWS Item 01 - Financial PoliciesThe Krueger Report
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• 20% General Fund balance; up from current policy of 16.6% today and we get there
in Year One with a investment of $2,351,042 and smaller investments in future years
to stay at that level as a hedge against future downturns in collections
• $1.7 Million is allocated, starting in the next budget year, for PSMF and PCMF
making certain that we take care of existing assets to move away from debt servicing
these expenditures
• Line item expenditure growth of 5% is assumed to make certain that we are able to
maintain salary levels at the 50th percentile
• Recommendation of an "early warning system" reporting process to the City Council
that will help us identify/inform early when sales tax revenues slow down; before
election 45% dependence, after, 62%
• Cap debt service at 25% of the General Fund Budget
Constraint
• Highlights a structural imbalance in current revenues and current expenditures of
$3.8M
• Assumes a 4% overall revenue growth and a 5% expenditure growth in the early
years of the plan
• Assumes that some portion of 413 funding will be used to get us to a 50% level for
Quality of Life projects; which is at variance with the desire to use at least 50% of the
"freed up" funds for this purpose and conserve 413 for transit related projects (rail
station land acquisition -betterment, and a parking garage to serve the development in
the early years of the collection of the tax
• Assumes that the line item deficit that was taken out of the General Fund during the
last budget process will be restored at a $1.0 Million Dollar level
• Expansion of the tax base through economic development. Several projects are
currently being constructed which will (of course) provide new revenue. (i.e. Great
Wolf Lodge, Fairfield on Main, Marriott Inn, Hilton Garden Inn, Bone Daddy's,
Uncle Julio's, Bob's, the Gaylord Expansion, Grapevine Station development) In
addition (barring any further acts of terror) against US airlines we will likely see a
gradual rise in personal property taxes collected at DFW
• Short Term (Next 30 days) : Cuts now in general fund line items to shave as much
as possible on the amount needed for restoration; Supplies, services, maintenance and
capital outlay totals $8.2 Million. We will target a cut of 10% or $820,000 and bring
back a list of cuts for Council review at the Feb 20 meeting
• Longer Term (Next 30 Months) : Systematic, structural review (supplies, programs,
maintenance, services and personnel) of each department in the General Fund to trim
costs. Staff is meeting next week (pushed back because of the weather yesterday)
with the staffs in Irving, and Plano (and we will schedule one in Carrollton). Each of
these cities have been through the expenditure reduction programs in the recent past
to determine the process they used. We will target cuts from this process of $3
Million over the next 30 Months with an emphasis on maintaining quality services,
while lowering costs and identifying positions which would be eliminated through
attrition.
Result
• By October 1, 2009 balance current revenues and current expenditures
• Using new expenditure assumptions (as described above or a set you can agree upon)
staff will have Dr. Krueger prepare a new overall financial strategy for your review
• Council ranks the Quality of Life Projects (from those provided tonight or any you
may choose to add or detract) and select those you want to fund over the next few
years so that Staff may begin the design process with consultants