General Fund Preliminary Budget

Goal 8: Sound Governance
Presented by Bret Starr, Assistant CFO
July 8, 2010

1
 Overview

• Economic Conditions
• Property Tax Estimates
• Other Revenues
• Expenditures

2
Economic Update

3
 Economic Conditions
• Recovery expected to be long and slow
• Municipal revenues decreased for another 24‐
36 months
• State and Federal budget deficits impact local 
governments
– Reduced grants and aid
– Increasing fines, fees and unfunded mandates

4
 Other Cities Budget Solutions
• Reduce services to residents
– Close facilities
– Reduce hours of operation
– Reduce service levels
• Employee layoffs
• Employee furloughs
• Employee pay cuts

5
 Irving Budget Priorities
• Maintain current levels of service
• Focus on Council’s priorities through the strategic plan
• Use Lean, Six Sigma, and other productivity tools to 
reduce time and expense while delivering services
• Focus on streamlining workforce through attrition and 
reorganization
• Group like services and skills together to reduce 
redundancies
• Incentivize employees to take on additional skills and 
duties 
6
General Fund Revenues
Property Taxes

7
 Property Tax Levy
• May 25th Preliminary Value $18.08 billion
• New Construction  $336 million
• Change in existing values ($80 million)

• Estimated Certified Value $16.9 billion
‐6.63% decline from last year
• Impact on City revenues ($6.5 million)

8
 Property Tax Levy
Tax Year Tax Year
2009 2010 % Value
Certified Value Preliminary Value Change Change

Commercial $8,437,407,691 $8,475,344,474 0.45% $37,936,783

BPP $4,383,697,175 $4,581,935,684 4.52% $198,238,509
Residential $5,006,494,374 $5,026,158,853 0.39% $19,664,479

Total $17,827,599,240 $18,083,439,011 1.44% $255,839,771

2010 2010 % Value

Preliminary Value ESTIMATED Value Change Change

Commercial $8,475,344,474 $7,390,707,363 -12.80% ($1,084,637,111)

BPP $4,581,935,684 $4,580,125,828 -0.04% ($1,809,856)
Residential $5,026,158,853 $4,912,922,474 -2.25% ($113,236,379)

Total $18,083,439,011 $16,883,755,665 -6.63% ($1,199,683,346)

9
 Property Tax Value 
In Billions
$20

18.45
17.83
$18 17.55
16.88

$16 15.42

14.62
14.29
13.91 14.03
13.79
$14
13.37

12.44

$12

$10

$8 10
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Change from Preliminary to Certified
$20 Billions
-10.19% -
-
$19
-6.63%

$18

-7.48%
$17
-
$16
-12.40%
-6.95%
- -6.83%
$15 6 40%
-2.17%

$14

$13

$12

$11

$10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
11
Preliminary Certified
Property Tax Distribution

Tax Year 2010 Ad Valorem Composition

Residential
Commercial, 
28%
47%
BPP
25%

12
 General Fund 
Other Revenues

13
 Sales Tax
In Millions

$55.00

$50.00
$50.00

$46.85
$46.74
$45.86
$45.10
$45.00 $44.31

$43.74 $43.74

$41.77
$40.00

$38.04 $37.94

$35.00 $36.29

$30.00 14
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
 FY 10‐11 General Fund Revenue 
Projection
• Property Tax ($6.5 million)
(‐6.63% reduction estimated)
• Sales Tax ($3 million)
• Electric Franchise ($2.4 million)
• Net other revenues $700,000
• Total revenue reduction ($11.2 million)

15
General Fund
Expenditures

16
 Personnel Related Savings
• 91 vacant positions eliminated since 2006
– $4 million in annual savings to General Fund
– Reduced general government / executive positions
– Added positions directed to Council priorities
• Staffing aligned with strategic plan key focus areas
• Police, Fire, Code Enforcement, Animal Services
• Additional 61 positions held vacant 
– $3.7 million in annual savings to the General Fund

17
 FY 10‐11 General Fund Expenditures

• Projected Increases +$6.3 million
– Salary & Benefits  +$2.8 million
– Health Insurance  +$1.5 million
– Retiree health insurance  +$700,000
– Retiree Sick Leave Bonus  +$700,000
– Non‐personnel expenditures  +$500,000

18
 FY 10‐11 General Fund Expenditures

• Cost Savings ‐$4.2 million
– Salary savings ‐$750,000
– Staffing reassignments ‐$720,000
– Dependant claim audit  ‐$400,000
– Other spending reductions  ‐$1.4 million
– Slow down replacement funding  ‐$970,000

19
 Budget Balancing Strategies

• Reduce replacement fund transfers 50% ‐$1.3 million

• Departmental savings review ‐$1.4 million
• Budget reductions ‐$7.4 million
• Defer capital funding ‐$735,000
• Further implement IWIN plan 1/1/2011 ‐$500,000
• Health insurance cost allocation ‐$490,000
• Salary savings ‐$750,000

Total: ‐$7 million
20
 Budget Balancing Strategies

Remaining budget gap ‐$5 million

21
 Summary

• Impact of the recession will continue over the 
next 24‐36 months
• All major revenue streams are reduced
• General fund must stand on its own resources
• Not recommending use of fund balance 
• Continued reductions in expenditures and/or 
additional revenues will be necessary to 
maintain a balanced budget for FY 2010‐11
22