|
030734
| 0 | 1) | Budget | Communication from the Mayor transmitting the 2004 City Budget.
Minutes note: Also appeared: Joseph Czarnezki, Director (DOA-Budget), John Egan (Comptroller's Office), Marianne Walsh, Manager (Fiscal Review), Cassandra Patterson (Special Assistant to the Finance and Personnel Committee)
DEFERRED COMPENSATION
William Thompson, Katie O'Sullivan and Jim Carroll appeared.
The 2004 Deferred Compensation Plan's Proposed Budget increases approximately 5% from the 2003 Budget, due to a $48,000 increase for Professional services. The 2004 Proposed Budget includes $878,233 for Professional Services primarily related to services such as the third party administrator, equity option advisor fees, record keeping and other account maintenance activities. The major reasons for the increase are the additional costs for trades performed by the Third Party Administrator Consumer Price increase adjustments for the Plan's administrators' contracts and increase in the Plan's Custodian contract. Salaries and Wages ($116,459) a step increase for the Executive Director that was inadvertently not included in last year's budget. The Proposed Budget includes $75,000 for the Plan's Contingent Fund. As of December 31, 2002, there were a total of 7,398 participants in the plan. Approximately 67.4% of current eligible employees participate in the Plan. The average monthly cash deferral per participant during the first quarter of 2003 was $547.69. For 2003, Plan participants are able to defer salary up to $12,000 of their salary. The Plan will be enhancing its educational curriculum for 2004. Ald. Murphy asked how many people participated in the choices offered other than the normal. Mr. Thompson replied about 54. Ald. Murphy asked if we were about average for administrative costs. Mr. Thompson said our costs were low.
GRANT & AID FUND
Eric Pearson and Angelyn Ward appeared.
Only grants that are anticipated in the 2004 Budget year are reflected in the Proposed Budget. The 2004 Budget anticipates grants with a grantor share of $71,908,461 which will be awarded to the City in 2004. This includes a grantor share of $10,000,000 for unanticipated grants. Grant expenditures require Common Council approval.
The expenditure authority for In-Kind City share has been eliminated because the city's FMIS no longer records this expenditure. Prior to this change, the In-Kind City share grant match was contained within department budgets. It is no longer necessary to deduct the In-Kind contribution from the Grant In Aid Budget. This account has been budgeted at $50,000 for a number of years. Excess funds are typically carried over into the next budget year for a maximum of three years. The 2004 Proposed Budget does not fund this account. Most departments will receive less money in grants. Ald. Murphy met with the Fire Department and advised them to ask for assistance from Home Land Securities. Ald. Hines asked if their was any coordination with the budget office and the Washington delegation to try to increase grant dollars. Mr. Czarnezki replied there is coordination, but needs to be greater coordination.
COMPTROLLER (and PUBLIC DEBT)
W. Martin Morics, John Egan, Mike Daun, Richard Li, Dennis Yacarino, Jim Carroll and John English appeared.
The 2004 Proposed Budget includes the consolidation of the Public Debt Commission with the Comptroller's Office. The Budget is approximately $360,000 less than the respective individual 2003 budgets for the Comptroller's Office and Public Debt Commission. It includes the following personnel changes: -1 Office Assistant III, -1 Administrative Assistant, -1 Management Accountant Sr., +1 Accounting Program Assistant III, +1 Accounting Intern. This Proposed Budget includes the outside pilot audit program. Two currently vacant Auditing Specialist positions, which are currently vacant, will remain unfilled which will offset the cost of the pilot program. There is a total of $593,000 of CDBG funding which supports the salaries and fringe benefits of certain positions in the office. The CDBG funded accounting and auditing services are performed by a staff of 11 full-time positions and one part-time intern. This Proposed Budget provides funding for the 8 special purpose accounts that will be administered by the Comptroller. On September 17, 2003, the Public Debt Commission approved a $4.0 million withdrawal from the Public Debt Amortization Fund. While the 30% minority participation goal has not been met. The Public Debt Commission indicates it appears it has been able to expand minority participation in negotiated offerings. An Audit is being done on the 3rd district capital project and Mr. Morics stated the final audit should be put to bed by the end of this week. The guidelines for grants were out dated and the new guidelines have been approved by the Common Council. Grants are done more on a department basis than a City wide basis. $5 million would more adversely affect the bond rating. Ald. Hines asked about the strengths or weaknesses of the budget as proposed. Mr. Morics stated the strengths are the revenue estimates are realistic. It is a realistic budget and the resources are good. Tax levy freeze - what you have is fundamentally a budget that attempts to live within a budget that has a 9 million gap from the state. Publie Debt Fund withdrawal is the lowest its been in 20 years which is $4 million. If rates were at 8% you'd be looking at a larger withdrawal. We have a 6 year capital improvement plan in place. How much you use this year, is then how much you have left for next year. 2 of the positions being eliminated are filled. Mr. English represents the office assistant III and the Administrative Assistant I. He met with some office personnel to discuss this. There are very few clerical positions in the union. He stated they understand this is a difficult year and there is some tough choices that are going to have to be made. Ald. D'Amato asked about grants that are really small and why they come to the council for review. Mr. Morics replied it would have to be a policy of the council and he would follow up on it. Ald. Gordon asked about the 30% minority participation goal that has not been met and what measures they are taking to increase that goal. In competitive issues they have tried to encourage minority firms by lowering the minimum bid. They have made progress. They have received some bids from minority and women owned firms. We are at about 20% percent tile for minority firms that have bid. Rates can change and their capital is at risk. Ald. Murphy asked if they are still having trouble getting acountants. Mr. Morics stated they are not.
CITY DEBT
W. Martin Morics, Jennifer Gonda, and Marianne Walsh appeared.
The City Budget for Debt Service includes Milwaukee Public School Debt and all City government-related purposes. The City may also use its own borrowing authority for school purposes. As of December 31, 2002, the outstanding debt service requirements for the City totaled $855.3 million. Of the $855.3 million, $453 million (53%) in outstanding debt service requirements is related to general city capital expenditures. The remaining obligation is split between MPS debt service ($139.4 million) and self-supporting debt service requirements is related to general city capital expenditures. The remaining obligation is split between MPS debt service ($139.4 million) and self-supporting debt service ($263.1 million). The largest component of the city capital debt is $224 million for street, sewer and bridge systems: $177 million for public facilities, $33 million for economic development-related activities, and $19 million for other miscellaneous projects. Approximately 30.8% or $263.1 million of the $855.3 million total General Obligation Debt outstanding was classified as “self-supporting debt.” The concept of “self supporting” debt is that proceeds from borrowing will fund projects that generate a revenue stream sufficient to offset debt service obligations. Examples of this type of debt include Tax Increment Financing, Special Assessments and the Parking Fund. GO self-supporting debt is a general City obligation and must be paid from the property tax levy if the offsetting revenue stream is insufficient to meet debt service. The largest component of self-supporting debt is tax incremental districts, which total $128.7 million. The other components are: parking - $27.6 million; water - $54.9 million; special assessments - $27.6 million; delinquent taxes - $23.9 million; and land bank - $381,000. The debt needs of the City in 2004 total $116.6 million, a decrease of $2.2 million from the 2003 debt budget. The tax levy supported portion of the 2004 debt budget is $54 million, a decrease of $760,000 from the 2003 tax levy contribution.
Mr. Morics stated the system is so large and replacements are so predicable and they are steady. Our bond rating was last altered 3 or 4 years ago. We lost one of our AA ratings.
CITY REVENUES
W. Martin Morics, Michael Daun, Dennis Yaccarino and Marianne Walsh appeared.
The 2004 general City purposed budget totals $492.9 million, an increase of $4.5 million or 0.9% from the 2003 Adopted Budget. A variety of revenue sources support the general City purposed budget, including intergovernmental aid, fringe benefits, property taxes, payments in lieu of taxes, charges, miscellaneous revenues, the Tax Stabilization Fund, fines and forfeitures, licenses and permits, and cost recovery. Intergovernmental revenues and the property tax levy account for nearly ¾ of total revenues for general City purposes in the 2004 Proposed Budget. Nearly 50% of these revenues are from state shared revenue. Total revenues for 2004 are expected to increase by only 0.9% above 2003 estimated levels, 0.9% under the 2004 projected rate of inflation of 1.8%. In 2004 the solid waste fee will remain at $75 and the snow and ice fee will remain the same. Revenue for licenses and permits is estimated at 9.6 million for 2004. 16.4 million will remain in the fund after the TSF withdrawal. Conversation ensued on parking checkers. We let the districts dictate their parking regulations. People pick up their cars and pay the towing and storage and not the tickets.
TAX STABILIZATION FUND
W. Martin Morics, Dennis Yaccarino, Mark Ramion appeared.
The Tax Stabilization Fund (TSF) balance available for 2004 purposes is $33,745,000. The 2004 proposed budget TSF annual withdrawal of $17,250,000, includes $16,750,000 for a contribution to property tax levy offset would leave a remaining available balanced of $16,495,000 prior to 2003 regeneration. The proposed withdrawal includes $500,000 (not recognized by the Comptroller) in anticipation of recognition by the Comptroller for changes in various fees. This revenue includes proposed increases for several fees in 2004 that require approval by the Common Council. The Tax Stabilization Fund (TSF) is the portion of unrestricted general fund balance not designated for a specific purpose. Withdrawal from the TSF serves as a revenue item in the budget, and offsets the amount of property tax levy that would otherwise be required. State law permits cities of the first class to establish a TSF. The City, in establishing a TSF, set forth the following purposes and objectives for the fund in section 304-29 of the Milwaukee Code. To assist in stabilizing the city's tax rate “within reasonable limits” from year to year. To protect the city and its citizens from fluctuations in the City property tax rate “which can result from erratic variations in non-property tax revenues”. To improve the city's financial planning ability. To better enable the city to comply with state levy limits. The primary funding sources for the TSF established by Section 304-29 of the Milwaukee Code are: Revenue surpluses, i.e., the difference between estimated revenues and the actual receipts. Unexpected appropriations not carried-over, except from internal service funds. Any internal service fund retained earnings that exceed 5% of that fund's budget. Mr. Morics stated one of the fundamental points when you look at the city's budget, they have done a fairly good job in recognizing revenues and anticipated revenues. If you increase the withdrawal, your structural balance is up for 2005 so you eating away faster at a smaller amount. (see exhibit A) Ald. D'Amato asked Mr. Morics if he agreed with the regeneration proposed by the Budget. Mr. Morics has been the comptroller for 12 years. He has never experienced such a significant revenue cut. State laws permit cities of the first class to establish a TSF. The City of Milwaukee, in establishing a TSF, set forth by the following purposes and objectives for the fund in section 304-29 of the Milwaukee Code. The estimated balance after regeneration is approximately $30 million (Mr. Morics stated that is on the high side). Ald. Murphy asked why the Comptroller let the Mayors office take out as much as they propose with an outstanding debt of Police overtime. Mr. Morics stated the Mayor does not ask his permission. This is his executive budget. You have to pay for that withdrawal in 2005. We (cities of the first class) are the only municipality in the state that is required to appropriate money for every expense. The state contract trumps the Citys and we are left with $3.38 million from Potowatomi.
COMMON COUNCIL CONTINGENT FUND
Dennis Yaccarino and Mark Ramion appeared.
City Contingent Fund spending has been authorized since 1874, when the state legislature enacted a new charter for the City of Milwaukee. Currently, the fund is authorized by Section 18-0404 of the Milwaukee City Charter and state statute. The Contingent Fund provides for unanticipated needs by enabling transfer of funds into existing or new accounts. Other applications of the funds may be for emergency uses or for purposes for which no express provisions are made in the Budget. Unspent funds revert to the Tax Stabilization Fund. Contingent Fund appropriation requires a ¾ vote of the Common Council. As of September 12, 2003 the available remaining 2003 Contingent Fund balance was $3,346,994 (67% of the total 2003 appropriation). Any Contingent Fund requests are expected to meet the following criteria to be considered by the Finance and Personnel Committee: Emergency Circumstances, Obligatory Circumstances, or Fiscal Advantage/Compliance with Fiscal Management Principles. The proposed budget includes $5 million dollars for the contingent fund. 100% of the expenditures were non discretionary expenditures. The budget office expects the hiring freeze to continue. | HELD TO CALL OF THE CHAIR | Pass | 5:0 |
Action details
|
Not available
|