PREVIEW Town of Hillsborough

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PREVIEWTown of Hillsborough

• FY10 BUDGET
• 7-YEAR FINANCIAL PLAN
• May 11, 2009

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Budget Goals for FY10

• No rate increases
• Minimal impact to service delivery
• No employee layoffs
• Protect savings and prepare for at least one more
  tough year
• Continue training cost containment efforts

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How Others are Balancing Budgets

• Across the board cuts
• Layoffs
• Pay reductions
• Furloughs
• No Merits/COLAs
• Hiring Freezes
• Health insurance contributions
• Raise health insurance deductibles lower
  benefits

• No pay increases for promotions
• Reduce/eliminate 401k
• Freeze travel/training
• Reduce paid holidays
• Reduce vacation days
• Early retirement programs
• Using savings
• Slashing capital operating
• Reducing services/levels

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How Hillsborough Balanced its Budget

• Departments given bottom line budget amount,
  set priorities and made their own cuts (few
  changes made by town manager)
• Operating expenses slashed (via many small cuts
  changes)
• Delayed almost all capital projects
• No vehicle equipment replacements
• No Merit or COLA funded
• Personnel reduction hiring freeze savings
  included

5
What Determines the Budget Climate?

• Revenues
• or
• Expenses (Needs)

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Less Operating Revenue to Fund Operations
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Big Cuts to Expenditures
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FY10 General Fund Highlights

• FISCAL
• Tax Rate Revenue Neutral (Drops from 67 to 62
  cents or 8)
• Average property value increases 13.74, while
  personal, vehicle, public service drop 5 20
• Net increase in property tax due to new growth is
  only 0.7 or 29,181
• Operating budget 12.7 decrease
• Fund Balance Approp. 96,956
• Fund Balance Level 30
• Personnel 0.52 FTE decrease
• Health Insurance 5.6

• PROJECTS/KEY ITEMS
• Nash St. Sidewalk Project
• Fleet Maintenance Facility (replace)
• Street Repaving (100K)
• Riverwalk Phase II (Grants for land acquisition
  partial design)
• Personnel-related programs are still funded
  (e.g., longevity, employee recognition, wellness,
  safety, tuition reimbursement, customer service
  innovation program)

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FY10 WATER/SEWER FUND HIGHLIGHTS

• No rate increases for water or sewer
• Operating budget decreases by 21.4
• Positions decrease by 1.0 FTE
• Retained earnings appropriated 55,380
• Fund balance level 30 or 3.6 months
• Radio-read and meter replacement project
  (750,000)
• Sewer line repairs for II (60,000)
• Debt refinancing saves 20,000 per year
• Capital facility fees for new conx to increase
  after 7 years

10
Cost Containment Operational Redesign Effort

• A lot of little ideas add up to make a
  difference!
• Complete ideas list with updates is in the
  appendix of the budget workbook
• Two pages of highlights are found at the end of
  the budget message
• Impacts on employees

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Operational Redesign IdeasApproved or In-Process

• Retiree health insurance eligibility, increases
  from 20 to 30 years for new hires (Done)
• Increase purchase order limit 300 to 500 (July
  1st)
• Police department reorganization (In process)
• Fleet mechanic supervisor switch (Done)
• Change work hours for COP CID officers (July
  1st)
• Change Holiday Pay Structure (July 1st)
• Eliminate uniform cleaning in HPD patrol (July
  1st)
• Eliminate bottled water use, coffee, etc. (Done)

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Operational Redesign IdeasRecommended for
Implementation or Review

• Longevity Pay Eligibility Starts at 5 Years for
  New Hires
• Take Home Vehicle Policy (Still gathering data)
• Reinvestment Program Return 50 of eligible
  savings categories made by departments in FY10 to
  use in FY11 at their discretion
• Eliminate Petty Leave (14 hours annually) Add 6
  hours vacation per year
• Reduce bulk item, limb, bagged leaf pick-up to
  the first 24 days of the month frees up time
  for public works to maintain parks
• Charge residences using more than one roll-out
  cart
• Employee payroll direct deposit mandatory
  starting January 2010

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Predictions for FY11

• General Fund Projected Deficit 834,799
• Water/Sewer Fund Projected Deficit 366,451
• Major expenses must be funded fire/aerial
  truck, garbage truck, vehicles equipment,
  utility projects, etc.
• Flat revenues will require rate increases,
  position reductions, and more drastic changes
• Whats the best way to encourage innovation for
  FY11?

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When Will Things Get Better?

• Economists predictions
• Hillsborough is poised to exit recession strongly
• Plenty of high quality approved developments
  (e.g., Waterstone, Oakdale Village, Bellevue
  Mill, and Corbinton Commons)
• Plenty of potential developments seeking approval
  (Forest Ridge, Truck Stop Redevelopment, UNC
  Hospitals, others)
• Challenges for town board, employees, and
  management
• Our roles in encouraging moderate steady growth
  in the future?
• Living within budget
• Prioritizing investments in capital, services,
  employees

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• QUESTIONS, CONCERNS,
• SUGGESTIONS