city of biddeford city council - workshop may 12, 2020 6:30 pm …€¦ · presentation of fy21...

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City of BiddefordCity Council - Workshop

May 12, 2020 6:30 PM Via ZOOM

1. Workshop Discussion Items 1.1. Presentation of FY21 City Government Budget

COVID-19 Financial Impact.PartII.pdf

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https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/591776/COVID-19_Financail_Impact.PartII.pdf

COVID-19 FINANCIAL IMPACT: PART IIMAY 12, 2020

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COVID-19 Financial Impacts Part II May 12, 2020

PURPOSE

1.Recommended strategy for FY21 budget adjustments because of COVID-19

2.Recommended FY21 operational strategy for COVID-19

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FY21 SUMMARY ON MAY 5, 2020

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Property Tax Collection

10%

Revenues28%

Expenses16%

Rev Sharing Leg16%

State Aid25%

Homestead5%

Property Tax Collection Revenues Expenses

Rev Sharing Leg State Aid Homestead

Property Tax Collection

0%

Revenues97%

Expenses-3%Rev Sharing Leg

0%State Aid

0%Homestead

0%

Property Tax Collection Revenues

Expenses Rev Sharing Leg

State Aid Homestead

Worst Case: $4,747,809 Best Case: $1,489,206

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Development of tool boxes for risk

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CLOSING THOUGHTS ON MAY 5, 2020BIGGEST IMPACTS:

PROPERTY TAX COLLECTION RATE

EXCISE TAX

REVENUE SHARING

‘THE LEGISLATURE’

‘OPERATIONAL PLAN’

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FY21 OPERATIONAL PLAN: THREE TOOLBOXES

Definitive changes to FY21 budget

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Expenditures in FY21 budget but on hold; phasing plan

THE HARD CHANGES THE DEFERMENT

THE POSSIBLE NOT PROBABLE 7


EXCISE TAX: IMPACT OF DEFERMENT OF FY20 RECEIVABLES

• Normally, excise tax is treated by auditors on a cash basis

• Revenue recognized in month received

• Example: June 2020 payment made July 3, 2020 will be booked in FY21

• $703,256 is best estimate of FY20 excise that will be paid in FY21

• $325,000 shortfall in current budget/fund balance reduction*

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MODIFIED CASH

MODIFIED ACCRUAL

$3,051,3

$703,256$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Fy20 FY21

Expected Paid

• Recognize $3,750,000 in revenues• $700,000 in receivables• $375,000 above projection/fund balance

increase

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GASB DECISION ON EXCISE TAX

GASB will recognize on modified-accrual basis; $700,000 of revenue expected to be collected 9


• FY21 revenue forecast• Every economic down turn, total

excise tax goes down• Worse case is 17.78% or $635,000

plus the $125,000 projected increase or $760,000

• Decrease either increases property tax rate or needs expenditure reduction

• FY21 Submitted budget projection• $3,400,000, up $125,000 from FY20

• Decision: modify the FY21 projected excise revenue downward between $760,000 to $250,000

EXCISE TAX DECISIONS & IMPLICATIONS

FY21 reduction 10%$340,000

FY21 additional 5%$170,000

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• Project the decline in state revenues from June 2020 to May 2021• 35% reduction = $927,500

• 15% reduction = $397,500

REVENUE SHARING CHALLENGE

FY21 reduction 25%$662,500

FY21 additional 15%$397,500

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• Interest income

• Ambulance revenue

• URIP (Local road assistance)

OTHER REVENUE IMPACTS

Interest Income $50,000

Ambulance revenue$100,000

URIP$50,000

Interest Income$25,000

Ambulance revenue$150,000

URIP$25,000

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• Unemployment

• General Assistance

• Other COVID-19

EXPENSE IMPACTS

Unemployment$20,000

General Assistance$27,000

Other COVID-19$50,000

Unemployment$100,000

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Item Amount Reason

Excise tax ($340,000 10% reduction from FY21 budget

Revenue Sharing ($662,500) 25% reduction from FY21 budget

Investment income ($50,000) 33% reduction from FY21 budget

Ambulance revenue ($100,000) Reduced call volume

URIP (Local Road Asst) ($50,000) 25% reduction from FY21 budget

Total Revenue reductions ($1,202,500)

Unemployment $20,000 Increase claims

General Assistance $27,000 Increase demand

Other COVID-19 $50,000 Expenditures needed after July 1; undefined

Total expense increases $97,000

Toolbox Hard Changes ($1,299,500)

THE HARD CHANGES GOAL

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MARCH 5 SUMMARY OF BUDGET MUNICIPAL ONLY

PROPERTY TAX IMPACTS

$424,438 increase in tax commitment or 0.89%

$0.23 increase in tax rate or 1.14%

Max fund balance exposure: $431,540

IMPACT ON MEDIAN HOUSE W/HOMESTEAD

$227,100 median home value

2020 homestead of $20,000: $4,127.86 tax bill


Reduction of $53.42

SPENDING

Capital up $500,000

Contingency up $150,000

Fire staffing up $225,000

Transitional staffing $431,540

Total spending $2,130,009 or 6.44%

REVENUES

Revenue sharing up $675,000 or 34.18%

Non-property tax up $688,854 or 8.88%

Homestead up $330,408 or 40.58%

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Item Impact

Toolbox 1: Hard Changes ($1,299,500)

Eliminate Fund Balance Use ($431,540)

Reductions needed $1,731,040

Less: Higher valuation ($111,155)

Final Reductions Needed ($1,619,885)

THE MATH TO RETURN TO MARCH 5 IMPACT ON TAXES

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Fire Wages* $175,000 Construction material $10,000

Fire Fringe Benefits* $50,000 HR specialized training $2,500

Communications Director* $100,000 E2E training $3,000

Deputy PWD* $95,144 Community Center heating $12,500

CSO Engineer* $68,968 Advertising citywide $2,500

Planning support $15,000 General fund support recreation $25,000

Additional capital funds $500,000 Overtime citywide $20,000

Reduce additional contingency $150,000 Turnover credit $10,000

Refurbish records City Clerk $4,000 Vehicle repair citywide $8,575

Eliminate 1 Cruiser $30,000 Building repairs citywide $7,500

Reduce polygrapher 8 hrs x 26 weeks $6,482 Supplies citywide $5,000

Reduce street light repair $15,000 Police administrative position $96,216

Training/Travel citywide $10,000 Capital (additional) $154,500

Reduce outside engineering $25,000 Road salt $10,000

Equipment/Tools Parks $12,500 Equipment/Tools Solid Waste $7,500

TOOL BOX OF HARD CHOICES ($1,619,885)

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$1,619,885

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DEFERMENTS TOOL BOX ($965,521)

On Hold

Item 2nd 3rd 4th Savings

Capital $150,000

Road Salt $10,000

Mechanic Supervisor $3,000

Non-Union Raises $100,000

Union Wage Deferral $100,000

Project module $10,200

Financial Aid-Rec $5,000 $5,000 $20,000

Vacant Firefighters (2) $82,239 $82,239

Vacant police patrol $43,747 $43,747

Vacant City Clerk PT $22,175 $22,175

Market wage adjustment $25,000

Vacant mechanic $44,985 $44,985

Vacant laborer $18,930 $56,792

Longevity payment $75,307

Totals $5,000 $636,453 $74,130 $249,938

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$1,619,885

$965,521

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THE COLLECTION RATE QUESTION

• Delay in FY20 payments• $483,115 (1%) Low• $1,087,008 (2.25%) High

• Delay in FY21 payments• -$603,894 (1.25% reduction)

Low• $483,115 (1% additional)

High

• Ebb and flow between years• Fund balance adjustment• Bounce back within year or

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$1,619,885

$965,521$1,195,271

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A d j u s t m e n t s t o B a l a n c eS t a t e B u d g e t

LegislativeRisk

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• Revenue Sharing Raid • $738,214

• Homestead Reimbursement• $228,918

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$1,619,885

$965,521$1,195,271

$967,132

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MARCH 5 SUMMARY OF BUDGET MUNICIPAL ONLY

PROPERTY TAX IMPACTS

$424,438 increase in tax commitment or 0.89%

$0.23 increase in tax rate or 1.14%

Max fund balance exposure: $431,540

IMPACT ON MEDIAN HOUSE W/HOMESTEAD

$227,100 median home value



Reduction of $53.42

SPENDING

Capital down $154,5000

Contingency same

Fire staffing none

Transitional staffing none

Total spending $616,124 or 1.86%

REVENUES

Revenue sharing down $12,500

Excise Tax down $125,000

Homestead up $330,408 or 40.58%

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COVID-19 FINANCIAL IMPACT: PART IIQUESTIONS

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city of biddeford city council - workshop may 12, 2020 6:30 pm …€¦ · presentation of fy21...

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