4. 2009 Budget Discussion
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952,227,1110
Building Inspections
Phone: 952,227.1180
Fax: 952.227.1190
Engineering
Phone: 952,227,1160
Fax: 952.227.1170
Finance
Phone: 952.227.1140
Fax: 952,227,1110
Park & Recreation
Phone: 952.227.1120
Fax: 952,227,1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952,227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952,227,1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952,227,1310
Senior Center
Phone: 952.227.1125
Fax: 952,227.1110
Web Site
www.ci.chanhassen.mn.us
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MEMORANDUM
TO: Mayor and City Council
Greg Sticha, Finance Director Ct.7r
FROM:
DA TE:
&.
2009 Budget Discussion
July 27,2009
SUBJ:
BACKGROUND
This evening we will be discussing the impact of the anticipated shortfall in 2009
revenues in the General Fund. After our last budget discussion, the City Council
asked for clarification on some items related to reduced service levels (Tab 4 on
the spreadsheet) which are listed below.
The reduced CSO hours have already taken place due to a leave of absence by an
employee, so no additional service level will be affected. The sea1coating
reduction of $120,000 has the following impact. Streets are recommended for
sea1coating and identified by the pavement management program and by site
inspection. Annually we budget for about $200,000 in sea1coating projects. The
neighborhoods included in the 2009 project were the Vasserman Trail/Ridgeview
Way area, the Chan View area west of Frontier Trail, Sandy Hook neighborhood,
Minnewashta Parkway, and the Walnut Grove and Royal Oaks Estates
developments west of Galpin Boulevard.
In an effort to gap our budget shortfall, sea1coating the Sandy Hook
neighborhood, Minnewashta Parkway, and the Walnut Grove and Royal Oaks
Estates developments could be cut out of this year's project. It is important to
note that we are delaying the sea1coating of these neighborhoods and not
eliminating them. These areas would be scheduled for sea1coating next year. In
doing this, we will reduce the 2009 sea1coating projects to approximately
$80,000, which reduces the budget by $120,000.
We have also identified the patrolman position as a potential for cost reduction in
2009 and into 2010. Not hiring this position would save about $26,000 in 2009
and $88,000 in 2010.
After further reviewing some of the Park & Recreation and Park Maintenance
suggestions to reduce costs in 2009, staff felt that due to the difficulty and the
small size of the individual reduction of the expenses, that the resulting
Chanhassen is a Community for Life. Providing for Today and Planning for Tomorrow
2009 Budget Shortfall Discussion
July 27, 2009
Page 2 of2
programming reductions outweighed the cost of savings. So those items have
been removed from this plan.
At this point, it is estimated that revenues in the general fund will be
approximately $650,000 short of the original budget. Depending on the actual
revenue shortfall, staff recommends that the cash in the capital replacement fund
and revolving assessment construction fund (listed on the spreadsheet) be used as
the reserve funds to handle any additional shortage above the current estimate of
$650,000.
ATTACHMENTS
1. 2009 Shortfall Spreadsheet
F:\GregS\Budget\201O Budget\7-27 prelim bud discussion.docx
Chanhassen
2009 Potential Revenue Shortfall Ideas
Description Priority Amount 1 2 3 4 5 6
GENERAL FUND COST SAVINGS
Fuel costs under anticipated 2009 budget High $ 50,000 -/
No Out State Travel Med 5,000 -/
Stop Billing General Fund for Water Med 17,000 -/ -/
Renegotiated Garbage Contract High 5,000 -/ -/
RFP for Long Term Disability Insurance Rates High 4,400 ? -/
RFP for Life Insurance Rates High 3,200 ? -/
Reduced CSO Hours due to employee on leave High 3,000 -/
Reduce temporary Salaries in Building Dept High 20,000 -/ -/ ?
Eliminate Scanning Service for Building Drawings High 10,000 -/
Engineering Administrative Charge for Utility Projects Med 84,500 -/ -/ ?
Employee's going to 32 hour week this summer High 14,200 ? -/
Not hiring patrolman Med 26,000 Y -/
Total General Fund Savings $ 242,300
CAPITAL REPLACEMENT FUND SAVINGS (could be transferred to Gen Fund)
Underspent 2008 CIP items High $ 90,000 -/ -/
Total Capital Replacement Fund Savings $ 90,000
OTHER FUND SAVINGS (could be transferred to Gen Fund)/USE OF CASH
Excess levy dollars from 2009 Budget Discussion set aside in Street Recon fund High $ 42,000 -/ -/
Reduce sealcoating projects to highly needed areas only Med 120,000 -/ -/
Excess TIF from closing Gateway West TIF district Med 97,000 ../ .-7'
Close 1999A Bond Fund Med 161,944 -/ -/
Close 2001B Bond Fund Med 16,009 -/ -/
Use Cash Reserves in Capital Replacement Fund Low ? -/ -/
Use of Catastrophic Reserve Fund Low ? ? -/
Total Other Fund SaVings/Use of Cash $ 436,953
Net savings to General Fund $ 769,253
1- Sustainable or ongoing cost savings into future years budgets
2 - Already implemented for 2009
3 - New Revenue generation
4 - Resulting cut reduces service level to some extent
S - Use of funding source that was originaly targeted for another project, purpose or enterprise fund.
6 - One time use of Cash Reserve
1 - Sustainable or ongoing cost savings into future years budgets
A - Stop Billing General Fund for Water Med $ 17,000
B - Renegotiated Garbage Contract High 5,000
C - Reduce temporary Salaries in Building Dept High 20,000
D - Engineering Administrative Charge for Utility Projects Med 84,500
E - Not hiring patrolman Med 26,000
Total $ 152,500
A - In previous years we have billed the GF for water used. Stopping this practice will save the GF and will
have minimal impact on Utility funds.
B - Renogtiated Garbage Contract in 2009, should result in future years savings.
C - Eliminated use of temporary seasonal front desk help in Building Department.
D - Implemented Charge for in house staff engineering time on Utility Projects. No impact on Utility funds
because the outside engineering charges should see a corresponding reduction.
E - Not hiring patrolman as previously planned in 2009 ($26,000) and into 2010 ($88,000).
2 - Already implemented for 2009
Fuel costs under anticipated 2009 budget High $ 50,000
No Out State Travel Med 5,000
Renegotiated Garbage Contract High 5,000
RFP for Long Term Disability Insurance Rates High 4,400
RFP for Life Insurance Rates High 3,200
Reduced CSO Hours due to employee on leave High 3,000
Reduce temporary Salaries in Building Dept High 20,000
Eliminate Scanning Service for Building Drawings High 10,000
Excess levy dollars from 2009 Budget Discussion set aside in Street Recon fund High 42,000
Employee's going to 32 hour week this summer High 14,200
Total $ 156,800
3 - New Revenue generation
Engineering Administrative Charge for Utility Projects Med 84,500
Total $ 84,500
4 - Resulting cut reduces service level to some extent
Reduce seal coating projects to highly needed areas only Med 120,000
Not hiring patrolman Med 26,000
Total $ 146,000
- .
5 - Use of funding source that was originaly targeted for another project, purpose or enterprise fund.
Stop Billing General Fund for Water Med $ 17,000
Underspent 2008 CIP items High 90,000
Reduce sealcoating projects to highly needed areas only Med 120,000
Excess TIF from closing Gateway West TIF district Med 97,000
Close 1999A Bond Fund Med 161,944
Close 2001B Bond Fund Med 16,009
Use Cash Reserves in Capital Replacement Fund Low ?
Total $ 501,953
-./ ( . .
6 - One time use of Cash Reserve
Underspent 2008 CIP items High $ 90/000
Excess levy dollars from 2009 Budget Discussion set aside in Street Recon fund High 42/000
Excess TIF from closing Gateway West TIF district Med 97/000
Close 1999A Bond Fund Med 161/944
Close 2001B Bond Fund Med 16/009
Use Cash Reserves in Capital Replacement Fund Low ?
Use of Catastrophic Reserve Fund Low ?
Total $ 406/953