04/20/2019
Dear S**o Citizens, below you will find answer to questions submitted to the administrator and finance director.
SCSG has submitted a number of the questions and have requested follow-up information. Please take a moment to read the responses.
Budget Questions & Answers
If you have a question about the municipal budget process, please email [email protected].
Questions will be answered prior to the Budget Workshops during City Council Meetings. Answers will be posted on this webpage and shared during the Administrative Update portion of the City Council Workshops.
1) Is the Council and citizens of S**o aware that with its budget approvals since FY2016, twenty seven positions will have been added under this administration to date?
This is based off the head count report from the FY2017 Budget, which had 158 FTEs in FY2016 and included fractions of part-time positions versus the FY2019 Budget, which had 185.5 where all part-time positions equate to .5 a FTE. Comparing those two figures, that is an increase of 27.5.
1A) It appears there are some discrepancies in the 2020 Budget in regard to which funds employees are paid out of and how the number per each department is counted. Please view page 126 of the Audit Book versus what is in the Budget book.
Page 126 of the Audit Book has actual employee headcount. The FTE Headcount in the Budget Book is the budgeted headcount (including open positions). We elected not to break out employees by fund in the budget book. The Mayor has requested this as a change and it will be featured in the final Approved Budget Book.
2) Have the original energy bond for projects been completed? If so, should the balance be placed in surplus and fund closed out?
Two of the three bond projects have been completed: the Middle School Boiler and the Police Department HVAC. The balance on the Middle School Boiler, less cost overruns on the Police Department HVAC, is set to be returned to the General Fund to compensate for General Fund expenses incurred on the project. The balance on the other energy projects ($100,000 as approved by the voters plus $34,250 of bond premium) has yet to be spent and will be held in qualified account at a restricted yield.
3) With a proposed increase in valuation and additional local funding for the Schools, shouldn't the School Mill Rate be going down?
The reason the school’s mil rate is still going up has to do with the overlay or “buffer” on the mil rate. In any given year, the City of S**o collects between 97% and 99% of the budgeted tax revenue. A 1% overlay provides a buffer to ensure the City does not suffer a shortfall of revenue. The overlay was actually -$226K after Homestead/BETE were taken out of the “Other Revenues” line in the FY2019 Tax Rate Sheet. To get our overlay back up to historic norms of around $500,000, the City and School have higher Mil Rate Increases than the actual change in costs versus valuation increase would calculate to. That means, the $201k in increased local funding in the School budget results in a $0.09 on the School Mill Rate, rather than the expected result of a $0.10 decrease on the School Mil Rate. Like the Mil Rate and Valuation, only the Assessor gets to decide what the overlay is, so we are using historic norms as a place holder. All mil rate calculations are estimates and subject to change.
4) Why does the Request Above Directive (RAD) total amount vary on two different pages of the budget book?
RADs are organized by the department that submitted them; however, each RAD may contain accounts from other departments. For example, the Fire Department headcount RAD contains amounts in accounts under Fringe Benefits and Information Technology. The RAD description will show all the related accounts, but the RAD columns in the budget book reflect where the RAD amounts are budgeted.
In the case of the City Clerk’s budget, it contains a portion of RAD # 1-1 1.1% Pay Increases for Non-Union. That RAD was submitted by the City Administrator in the Administration budget but contains line items that are distributed throughout the different departments.
5) What is an Enterprise fund?
Enterprise Funds are a type of proprietary fund, which charges customers directly for the services it provides. Enterprise/proprietary funds are supposed to be self-sufficient, in that the service charges generally cover the cost of operations over time. For this reason, they are reported using full accrual accounting in the financial statements each year and are completely separate from the City’s General Fund.
More detailed explanation of enterprise/proprietary funds on pages 30, 34, and 53 of the 2018 CAFR.
6) What's the useful life of RAD 32 – Garage Fabrication Equipment?
25 to 30 years
7) Are the increases in the respective salaries included in the budget lines impacted by the approval of union contracts?
All approved union contracts are reflected in budgeted salary lines. Fire Department contract is a RAD. Unapproved union contracts have a 1.9% pay increase in line with non-union.
8) Please post a current monthly financial report and the Excel spreadsheet. This allows a citizen to see the various funds spent to date other than what is in the budget book.
Current financials will be available when our partners at Paychex have provided us with a balanced General Ledger entry.
8) Is there a way to move the budget book and make it a stand alone document on the Budget website page?
On the home page, just below the friendly by nature photos, click the button labeled Budget Documents. On the FY2020 budget page, click Current Budget Process, under Phase 3: Budget Presentation you'll find links to all of the budget related documents including the Recommended Budget Book, updates from the Finance Director that Council will need to consider, the PowerPoint presentations, and the Mil Rate Calculator.
9) Have all union contracts been negotiated and implemented?
The City of S**o has seven unions. For fiscal year 2019 (our current fiscal year ending June 30th, 2019), six of the seven union contracts have been approved by Council and budget amendments have also been approved to move resources into the departments.
For fiscal year 2020, five of the seven union contracts have been approved by Council and are currently included in the directive column of the budget.
10) On the RAD Calculator - where is the dollar value for the total? Is it from Reserves or Local Funds?
The reason the RAD has a zero dollar amount is that there is no net change to the general fund. The RAD is made available for Council to review as it is a personnel change and the city strives to maintain total transparency when it comes to personnel changes.
