Item 2 - Proposed FY 2005-06 and FY 2006-07 Comprehensive Financial Plan
AGENDA REPORT SUMMARY
,0:
Honorable Mayor and Members of the City Council
Honorable Chairman and Members of the Redevel~~t Agency
James L. Bowersox, City Manager/Executive Direct~ .
Warren H. Shafer, Director of Administrative service~
FROM:
INITIATED BY:
DATE:
June 7, 2005
SUBJECT:
Proposed FY 2005-06 and FY 2006-07 Comprehensive Financial Plan and
5- Year Fiscal Forecast for the General Fund
ABSTRACT
This is the first of three scheduled reports regarding the City of Poway Comprehensive Financial
Program. It presents the Proposed Comprehensive Financial Program for the periods FY 2005-06
and FY 2006-07. The report also includes a 5-year fiscal forecast for the General Fund through FY
2009-10.
-'=NVIRONMENTAL REVIEW
.1is action is not subject to CEQA review.
FISCAL IMPACT
As stated throughout this report.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
Notice was published in the Poway News Chieftain. The members of the Budget Review Committee
have been notified of this report.
RECOMMENDATION
It is recommended that the City Council receive this report, and the Budget Review Committee's
report on the Proposed Financial Program for FY 2005-06/FY2006-07, take public input, and continue
the Public Hearing to June 14, 2005.
ACTION
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m .tor\budgel\FY 05-06 06-07 heanng1sum.doc
1 of 18
June 7, 2005 Item # 2
CITY OF POWA Y
AGENDA REPORT
DATE:
Honorable Mayor and Members of the City Council
Honorable Chairman and Members of the Redeve~~nt Agency
James L. Bowersox, City Manager/Executive Dire~
Warren H. Shafer, Director of Administrative services(;~
Peter Moote, Deputy Director of Administrative Services~\r\-
Andrew White, Finance Manager {IV .
June 7,2005
TO:
FROM:
INITIATED BY:
SUBJECT:
Proposed FY 2005-06 and FY 2006-07 Comprehensive Financial Plan and
5-Year Fiscal Forecast for the General Fund
BACKGROUND
On March 22, 2005, the City Council received the FY 2004-05 midyear budget status report that
provided a review of year-to-date revenue and expenditure activity. Upon adoption of the
amended FY 2004-05 Financial Plan, revenues were projected to exceed expenditures for the
General Fund by $135,000. At midyear, the projected General Fund surplus for the year
remained virtually the same at $136,000.
Using the midyear budget review as a base, staff has developed a Proposed Financial Program
for both FY 2005-06 and FY 2006-07, and updated the 5-year fiscal forecast for the General
Fund. From late April through May 2005, the Budget Review Committee completed a detailed
review of expenditure and revenue budgets for the upcoming fiscal year. A full report and
recommendations from the Committee will be presented to the City Council on June 7,2005.
FINDINGS
Two- Year Plan
The Proposed Comprehensive Financial Program represents a two-year plan, spanning both
Fiscal Years 2005-06 and FY 2006-07. The Proposed Financial Program incorporates two
separate fiscal year budgets, establishing separate appropriations for each year. Program
performance will continue to be evaluated every six months over the two-year period. Under the
updated charter for the Budget Review Committee, the current appointees are to serve through
both fiscal years of the budget cycle, and conduct reviews of the six-month budget reports.
2 of 18
June 7, 2005 Item # 2
Proposed FY 2005-06 & FY 2006-07 Comprehensive
Financial Plan and 5- Year Fiscal Forecast for the General Fund
June 7, 2005
-Oage 2
Summary of the Financial Plan
The first year of the proposed Comprehensive Financial Program recommends a City operating
budget of $65,352,200, and a Redevelopment/Housing Services operating budget of
$5,902,430. For FY 2006-07, the proposed operating budgetforthe City is $66,388,700, while
the Redevelopment/Housing Services operating budget is $5,896,780.
In total, the Comprehensive Financial Program for the City as proposed is increased over the
current year estimated budget by approximately 14% over its two-year period. The majority of
adjustments to expenditures over the current fiscal year are:
· The addition of two new Community Services' divisions for Blue Sky and the Fine Arts
Center
· Costs associated with the GIS implementation
· Operation of the red light monitoring program
· Increased water purchases
· Increased Safety Services' costs for the new truck company
· The annual cost adjustment to the law enforcement contract
Cost reduction measures proposed for FY 2005-06 and FY 2006-07 include a reduction in the
- ~ontribution for replacement of capital equipment and utilization of the City's internal PERS
etirement rate stabilization fund. In addition, the Financial Program incorporates personnel
cost increases established by employee Memorandums of Understanding, which are in effect
through FY 2007-08.
The proposed General Fund operating budget is balanced, with a projected surplus of
$315,004 in FY 2005-06 and $243,310 in FY 2006-07. The total General Fund revenue
projection for FY 2005-06 reflects an increase of approximately $1,736,700 from the midyear
estimate. Most of this change is due to increases in sales tax related to new retail in the
Business Park, and interest income due to rising interest rates. These increases were partially
offset by projected decreases in development fees due to slowing activity.
Included in the projected General Fund surplus calculation are costs in addition to the proposed
operating expenditures. These are the debt for the City office building at apprOXimately
$410,000 per year, an ongoing contribution of $271,060 for the City capital facilities renovation
fund, and the annual benefit cost for the Street Lighting District of $110,000. Finally, for Fiscal
Year 2005-06, there is an Educational Revenue Augmentation Fund payment of $672,680 of
which $545,660 is being offset by a transfer from the State Economic Uncertainty fund. That
will leave a balance of $2,554,340 in that fund. Exhibit A provides a summary of General Fund
revenue and expenditure activity.
The following table provides a summary of significant changes to the General Fund Budget that
.J'lre included in the preliminary Proposed Financial Plan.
3 of 18
June 7, 2005 Item # 2
._---"-_."._~----_.~-----".-._-- -_.,,---~--_.- -
Proposed FY 2005-06 & FY 2006-07 Comprehensive
Financial Plan and 5-Year Fiscal Forecast for the General Fund
June 7, 2005
Page 3
A_liNt OFCffANGlE
1'N(i;JtlifAS& aR(Ii$ORIfASE)
F- - ...,;,........,'.ft
",' R ,I!:"'I:'<~.!L .'
, FY~~ll$~!h,'.fY ~!ilt$'~t '
REVENUE
Expanded retail businesses generating sales tax and continued
!;t~~ng!.l!()f existing base '__________ ___ ___ __~12?,9, 7]1_ J655.!UO
, Increase_cl.P'!()E,El_r!Y_.'!alue~_______ ___ ______ 265,536,326,100_
Development Fees -- decrease due to anticipated reduction in
dev~102rnel!Lac!i~ty__~,________, _
All Other
SUMMARY OptSIGMlFfItA'IQ..,eJllAN~d 1'ifJG~ffl"l~
ACTIVITY
(539,620)
- ,-.---
681,062
Total Revenue Adjustments
+$1,736,709
+5:4'&%
EXPENDITURES
Safety Services: Law Enforcement
Fire Su ression
Street Maintenance
All Other
Total Expenditure'Adj_,~,"
$424,353
780,710
1,011,910
768,493
$2,985,4$$
+9.70%
,(1_13,,9.901
249,910
+ $1,118,780
+3,,65~
The Financial Plan's capital improvement and multi-year program activity is limited to
adjustments to the City and Redevelopment Agency multi-year capital improvement program.
The program shows City and Redevelopment Agency projects totaling $211,279,114. The
projects are updated on a quarterly basis to add new projects, revise existing projects and close
completed projects.
Five- Year Fiscal Forecast for the General Fund
As part of the budget preparation process, staff has prepared an updated five-year fiscal
forecast for the General Fund. The forecast provides an account of General Fund revenue and
expenditure trends under three different scenarios.
The first scenario is conservative (Exhibit B-1), in which the assumptions reflect a conservative
approach to both revenues and expenditures, and includes our best estimates of probable
changes over which the City has control. The conservative scenario projects that revenue
increases will continue to offset expenditures through FY 2006-07.
The fiscal forecast model includes two additional scenarios to provide additional perspective.
Scenario " (Exhibit B-2) assumes a higher level of costs combined with minimum revenues,
indicating maximum potential shortfalls. Scenario'" (Exhibit B-3) assumes a lower level of costs
with a higher level of revenues, indicating maximum surpluses.
4 of 18
June 7, 2005 Item # 2
Proposed FY 2005-06 & FY 2006-07 Comprehensive
Financial Plan and 5- Year Fiscal Forecast for the General Fund
June 7, 2005
-Page 4
Under a "Highest Cost/Lowest Revenue" scenario, expenditures exceed revenues by a deficit
$4.5 million in the fifth year, while a "Lowest Cost/Highest Revenue" scenario would yield a
surplus of $3.9 million for the same year. Our experience has been that actual expenditures
have remained closest to the conservative level of the model, while revenues have been about
midway between the conservative and high levels.
Notable assumptions used for significant revenue items under the conservative scenario include
an annual growth rate of 4.0% for property tax. Long-range sales tax revenue projections
assume an adjustment of 5.0% annually, and assume that no new major retail sources will be
added to the current base. Development revenues are reduced to minimum levels in the
second year, with no annual increases for the remaining three years of the forecast.
Much like the current General Fund fiscal forecast, the model prepared for previous years has
typically projected a deficit General Fund budget for the out years under the conservative
model. However, continued vigilant management of operations supported by the General Fund
has resulted in balanced budgets by the end of each fiscal year. Historically, actual
performance has exceeded the conservative scenario, and has generally been close to the
"Highest Revenue/Lowest Expenditure" scenario. For the period FY 1998-99 through FY 2003-
04, General Fund revenues have exceeded operating expenditures by an average of $3.5
million annually, for a cumulative total of $21.3 million, as shown in the following table.
FY 1. ~991: FH .
. .e1'~"':
3,909,661 4,734,024
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
FISCAL IMPACT
As stated throughout this report.
PUBLIC NOTIFICATION AND CORRESPONDENCE
Notice was published in the Poway News Chieftain. The members of the Budget Review
Committee have been notified of this report.
5 of 18
June 7, 2005 Item # 2
Proposed FY 2005-06 & FY 2006-07 Comprehensive
Financial Plan and 5-Year Fiscal Forecast for the General Fund
June 7, 2005
Page 5
RECOMMENDATION
It is recommended that the City Council receive this report, and the Budget Review Committee's
report on the Proposed Financial Program for FY 2005-06/FY 2006-07, take public input, and
continue the Public Hearing to June 14,2005.
Exhibits: A: General Fund Revenue/Expenditure Activity
B-1: Fiscal Forecast Summary--Conservative
B-2: Fiscal Forecast Summary--Low Revenue/High Cost
B-3: Fiscal Forecast Summary--Low Cost/High Revenue
Attachment: 1: Report by Budget Review Committee
n.~\dj'~rtm\blj~:)>-:'LI---YO:i {,e. n6 07 heanng! do':
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June 7, 2005 Item # 2
CITY OF POWAY
BUDGET REVIEW COMMITTEE
TO:
Honorable Mayor and Members of the City Council
FROM:
Members of the Budget Review Committee
DATE:
June 7, 2005
SUBJECT: The Proposed Comprehensive Financial Plan for Fiscal Years
July 1, 2005 through June 30, 2006 and July 1, 2006 through June 30, 2007
I. RECOMMENDATION OF FINANCIAL PLAN
The Budget Review Committee has completed its review of the City Manager's Proposed
Financial Plan for fiscal years 2005-06 and 2006-07. We concur with the Plan as
proposed, and find that the budgeted expenditures are necessary to maintain appropriate
levels of service while accomplishing a balanced General Fund budget through fiscal year
2006-07.
II. REVIEW PROCESS
Reports and materials used in review process:
· FY 2004-05 Midyear Budget Agenda Report
· Report on the Implementation of Past Committee Recommendations
· 420 pages of expenditure justification detail and revenue calculation detail
· Breakdown of costs for law enforcement services under the Sheriff's contract for
FY 2005-06
· The replacement program for the City's information technology equipment and software
· Fund Balances, inter-fund transfers and loans, and capital improvement program
funding for the City and Redevelopment Agency
· Five-year Fiscal Forecast for the General Fund
· Water and Wastewater rate structure, history, and comparison of City versus San Diego
County Water Authority and Metro Wastewater agency pass-through costs
· Various reports in response to the Committee's questions regarding proposed
expenditure and revenue line items to confirm accuracy or determine sufficient
justification
11 of 18
Attachment 1
June 7, 2005 Item # 2
--. ---_......_--"-_._------_...__._--_.._.~-----.~~..-
Committee Recommendations
Page 2
III. RECOMMENDATIONS
A. CEDAR FIRE REMEDIATION
The Committee discussed the City's use of the Capital Improvement Program to fund
measures taken to minimize flood damage attributable to lost vegetation, and silted creeks
and drainage channels. The Committee concurred that the results achieved from this
work proved to be a wise investment of the City's funds. The Committee also noted that
the City's record keeping and financial reporting software was instrumental in enabling
recovery of $1.1 million, which was the maximum eligible amount of the costs from the
Federal and State disaster programs.
B. REPORTING OF OPERATING EXPENDITURE CHANGES AND TRENDS
The Committee closely examined changes in the organization of cost centers reflected in
the Proposed Budget, with the objective of determining any net changes in proposed
budgets that represented new, ongoing expenditure commitments. An example is the
creation of the Blue Sky Reserve division, now split off from the Lake Operations division,
which reflects the City's costs of staffing Blue Sky Reserve, in lieu of the contract with the
County and the City's share of costs for Goodan Ranch improvements.
In addition, the Committee requested and reviewed a newly developed budget activity
report capable of identifying trends by type of expenditure.
C. GEOGRAPHIC INFORMATION SYSTEM (GIS)
The Committee reviewed the aggregate costs for development and implementation of a
GIS system, which is proposed to be funded at approximately $475,000 over the two-year
budget. The Committee supports the City making this investment, given the growing need
for providing and analyzing information that cannot be practically obtained and stored in
any other way. The GIS system is now the most appropriate tool to perform land use
projections and analysis; management of maintenance programs for streets, water and
sewer utilities; track infrastructure inventory; prepare specialized maps (i.e. fire run maps
used on each piece of equipment); emergency preparedness; and to meet mandatory
financial reporting requirements. Also, it is expected that the cost of continuing the current
method of compiling and analyzing geographic information manually or with independent,
partially developed systems will begin to exceed this initial investment over the next few
years.
D. RETIREMENT AND HEALH PLAN FUNDING
A review of the City's funding plan for retirement confirms that projected costs are fully
and properly represented, and are consistent with the City's overall conservative fiscal
practices.
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June 7, 2005 Item # 2
Committee Recommendations
Page 3
- D. Retirement And Health Plan Funding (continued)
The two-year financial program reflects final draw-downs from the retirement stabilization
fund, and costs for the .7% PARS supplement benefit for certain eligible employees
effective July 1, 2005.
The Committee also supports the current method of handling retiree medical coverage.
The current method provides retirees the option of purchasing coverage by paying 100%
of the cost plus a small processing charge. The City does provide a defined contribution
plan through a 401(a) deferred compensation plan that retirees can use as a way to pay
for this coverage. Using this approach eliminates the City's risk for unfunded retiree
medical costs.
E. FUTURE COMMUNITY SERVICES PROGRAMMING
A major focus of the Committee's discussions, which became our major concern,
encompassed the potential expanded Community Services facilities that are incorporated
in the proposed budget. The Committee believes the budget reflects the minimum funding
necessary to achieve successful programming and use of the planned new facilities, while
minimal revenue generation is attributable to their operation. The total ongoing operations
and maintenance costs for these facilities are substantial, as shown in the table below.
Ilffial
"~I
>Ri~
Ntlt.
$2.7 million
$12,680
$26,520
.A" . ':$t.
$310,400
$0 $39,200
The Committee identified additional facilities or increased programming not yet included in
the financial plan or the five-year fiscal forecast, but have potential to be considered for
future development and operation by the City. These projects include Big Stone Lodge,
Goodan Ranch, and a Blue Sky Interpretive Center as follows.
. Ptojft-.. ..:,. . Armual
,r;:, =:.i.I;~:~~~",:,:,;, J~',,~~,
. ",.",...""""".., -'t- iI';,%! '"'"...................''' "_.' '"
,~j.- ~" :,.;~ft':',: ~::!'F\.~';,,:' >,<1:: ~,'< '~'~,,;'I\ ,(::"t:H.Hir..t.o~VI'f'
:'\*",~;f~:~~/'f !
"';1'=:::
"i:i.)),' .," '" ,'_.~.
'\, ';'_ __ ,'li ;
" fif8t.Annt!ia1
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"VQ8t,
$85,000 - $25,000 - $110,000 _
$140,000 $35,000 $175,000
$85,000 - $15,000- $29,750- $70,250-
$100000 $20,000 $35,000 $85,000
G00dalt~ ". $t~;:ggg; :18i5~ggO
All of these potential projects would represent a new, ongoing commitment of the General
Fund, also with the expectation of generating minimal operating revenue.
$2.5 - $3.5
million
atg .Stbne LQ'dgll;
$1.5 - $2
million
'Estimate of the City's share of costs in the event the County terminates its contribution offunds
13 of 18
June 7, 2005 Item # 2
--..--.-----------.-----.-------
Committee Recommendations
Page 4
E. Future Community Services Programming (continued)
In addition, new programming costs could be anticipated for the telecasting of Council
meetings, at a preliminary estimated startup cost of $250,000 and $40,000 for annual
operations, and an unknown additional amount to provide additional support for the Senior
Center.
Consequently, the Committee wishes to express that the City Council take extreme
caution in their consideration of the Train Depot and Fine Arts Education Center capital
projects. These and any additional future projects place new demands on the City's
sustainable revenue sources used for new operations. Little if any general fund monies
are projected to be available for expansion of any program.
The Committee recognizes that fiscal challenges will continue to afflict the State, thereby
warranting concern over possible future raids on municipal revenue shares, or additional
unfunded mandates.
Completion of the planned new facilities must come with acceptance that the City will face
additional conflicting demands on its resources. The operating budgets for the proposed
new Community Services' facilities, combined with future operating budgets for the
potential future facilities identified in this report, represent 13.5% of the proposed
Community Services budget for FY 2005-06, and 2.2% of the entire proposed General
Fund budget.
Further, when considering the addition of any new Community Services' facilities, every
effort should be made to identify and develop operating plans that optimize their revenue-
generating potential to offset ongoing maintenance and upkeep costs. Aggressive
marketing of City facilities and programs should take place, which includes and is not
limited to publicizing annual passes for the aquatics center, wedding facilities at Old
Poway Park, and the Farmers Market.
F. WATER AND SEWER UTILITIES COST MANAGEMENT
The Committee supports the City's practice of utilizing staff and consultant resources to
ensure that allocated costs for shared water and sewer infrastructure are accurate. This
investment has resulted in cost reductions many times greater than associated
expenditures.
The rates that will be proposed to fund utility operations for FY 2005-06 incorporate the
use of $350,000 in sewer rate stabilization funds, reduced from the $700,000 used to
establish the current rates. The Committee concurs with the proposed reduction in the
use of rate stabilization funds, as costs for City utility operations and "pass-throughs" to
San Diego Metro and the Water Authority are expected to become more constant in the
future. In addition, the declining growth in the customer base has reduced the ability to
underwrite adjustments in fixed costs, which allowed lower increases to prior years' rates.
14 of 18
June 7, 2005 Item # 2
Committee Recommendations
Page 5
G. COMMITTEE OBSERVATIONS REGARDING ADMINISTRATION AND GENERAL
MANAGEMENT PRACTICES
During the course of its review of the City budget, the Committee made the following
observations regarding the City's fiscal policies, budget management practices, and
implementation of operational and administrative improvements:
· New technologies have been utilized, where cost effective, to permanently reduce
direct costs and improve customer service, including the outsourcing of utility bill
printing and mailing, and electronic payment processing.
· The City's use of consultant services has been effective. Examples that support
continuing this practice are the Pefiasquitos system cost study, that identified $1.2
million in unsupported sewer costs charged to the City, and Redevelopment Agency
marketing services used for the economic development program.
· The capital investment to standardize the City's IT equipment, telecommunications
equipment and digital copiers has enabled the City to minimize staffing costs for
administration and support.
· Expenditures for proactive measures taken to mitigate the effect of the Cedar fire
were prudent, that otherwise would have resulted in a much greater expenditure of
Drainage and General funds. .
H. TRAFFIC SAFETY PROGRAM
The Committee recognizes the Community's concern regarding traffic safety and
speeding, and recommends the Council and staff consider the expansion of passive
enforcement options such as permanent and trailer mounted radar signs to encourage
better compliance with the posted speed limits.
I. STREET MAINTENANCE PROGRAM
The past Budget Review Committee recommended that at the earliest opportunity, the
City restore the General Fund contribution to the street maintenance program. The
current Committee is pleased that this recommendation is incorporated in the proposed
Financial Plan, which provides a General Fund contribution of approximately $1.8 million
over the two-year period. The present condition of the City's streets demonstrates the
benefits of the City's policy to make funding the street maintenance program a priority,
despite having just endured one of the toughest weather years.
15 of 18
June 7, 2005 Item # 2
Committee Recommendations
Page 6
J. FIVE-YEAR FISCAL FORECAST FOR THE GENERAL FUND
The updated five-year fiscal forecast supports the Committee's concern over the City
undertaking construction of new facilities that will require full support from the City's
sustainable revenue sources. Other commitments being considered that have no
supporting revenue, such as telecasting of Council meetings, add to this concern. Best
management practices and a successful economic developm~nt program have enabled
the City to continue to build its General Fund reserve. Large growth in sales tax revenues
is no longer expected, however, and balancing of future budgets could be a greater
challenge.
The graph below of the General Fund five-year fiscal forecast incorporates a new
probable scenario that includes the ongoing operating costs of the new proposed, and
potential future additional Community Services facilities. This scenario generates a trend
line that falls about midway between the projected shortfall for the "probable" scenario and
the "highest cost with lowest revenue" scenario.
2,000,000
Five-Year Forecast
3-Scenario Composite and Scenario with Operations of
New Proposed & Potential Community Services Facilities
6,000,000
4,000,000
(2,000,000)
(4,000,000)
(6,000,000)
The Committee believes that from this point forward, all new facilities and programs that
commit General Fund expenditures need to be considered as having the potential to
represent a replacement for an existing General Fund supported program. In no event
should the City be in the position of deferring appropriate levels of funding for street
maintenance and other critical services in order to support new commitments.
16 of 18
June 7, 2005 Item # 2
Committee Recommendations
Page 6
J. FIVE.YEAR FISCAL FORECAST FOR THE GENERAL FUND
The updated five-year fiscal forecast supports the Committee's concern over the City
undertaking construction of new facilities that will require full support from the City's
sustainable revenue sources. Other commitments being considered that have no
supporting revenue, such as telecasting of Council meetings, add to this concern. Best
management practices and a successful economic development program have enabled
the City to continue to build its General Fund reserve. Large growth in sales tax revenues
is no longer expected, however, and balancing of future budgets could be a greater
challenge.
The graph below of the General Fund five-year fiscal forecast incorporates a new
probable scenario that includes the ongoing operating costs of the new proposed, and
potential future additional Community Services facilities. This scenario generates a trend
line that falls about midway between the projected shortfall for the "probable" scenario and
the "highest cost with lowest revenue" scenario.
4,000,000
Five-Year Forecast
3-Scenario Composite and Scenario with Operations of
New Proposed & Potential Community Services Facilities
6,000,000
(4,000,000)
-+- Probable
___ High Cost/Low Rev.
-.- Low Cost/High Rev.
~ Probable with New Facilities
2,000,000
(2,000,000)
(6,000,000)
The Committee believes that from this point forward, all new facilities and programs that
commit General Fund expenditures need to be considered as having the potential to
represent a replacement for an existing General Fund supported program. In no event
should the City be in the position of deferring appropriate levels of funding for street
maintenance and other critical services in order to support new commitments.
16 of 18
June 7, 2005 Item # 2
Committee Recommendations
Page 7
- CONCLUSION
The Committee has unanimous praise for the job Jim Bowersox has done for the City of
Poway. The financial health of the City is a direct reflection of his management skill and
acumen. For nearly twenty-five years, Poway's leaders have had the foresight, discipline, and
ability to manage our City's finances responsibly. Reserves have been established and
policies developed to overcome economic uncertainty, Mother Nature, population growth, as
well as County, State, and Federal challenges, all which constantly threaten to negatively
impact our outstanding quality of life.
The fiscal restraint shown by this and preceding City Councils is a tribute to the City as a
whole. Poway focuses on the important services and delivers them in a very cost-effective
way. Our conclusions are based on the Council continuing this demonstrated fiscal prudence.
The pension fund system for the City employees is designed to keep the City competitive with
other public agencies in a cost-effective manner.
The efforts that resulted in a recuperation of $1.1 million in costs from FEMA for the Cedar
Fire, potential recovery of $1.2 million in unsupported sewer costs charged to the City, and a
GIS System that will result in more efficient City services, are all good examples of the
excellent management of the City.
The following are areas that we feel should be strengthened in order to continue to promote
the excellence of Poway.
. The neighborhood and arterial speeding is of great concern to everyone. The City has
spent a great deal of staff time and money in trying to alleviate this issue. We recommend
that the City procure additional permanent flashing radar speed signs and a radar speed
trailer to help calm traffic on the arterials, and help slow down traffic in the neighborhoods.
. The Community Services' programs and facilities need to be marketed more aggressively.
. We are very concerned about the fiscal future of Poway. Over the past nine years, the
City has experienced exceptional economic growth. The potential for future economic
uncertainty, and limited opportunities for additional development, must be taken seriously.
. The Council is considering adding capital projects that will have long-term funding needs
from the City. The Big Stone Lodge may exceed $2,000,000 for renovations, with
expected annual operating costs as high as $85,000. The Goodan Ranch and a Blue Sky
Interpretive Center will both be costly. The Senior Center is another area that may require
additional financial assistance. Telecasting of Council meetings will cost approximately
$250,000 for capital equipment, and $40,000 in annual operating costs. The Fine Arts
facility will cost about $310,000 to operate at a minimum.
. The combined cost of the proposed new and potential future additional Community
Services facilities is approximately 13.5% of the entire proposed Community Services
Budget, and an additional 6% growth in projected sales tax revenue would be required to
offset this cost
17 of 18
June 7. 2005 Item # 2
Committee Recommendations
Page 8
ACKNOWLEDGMENTS
The members of the Budget Review Committee would like to thank the City Council for the
opportunity to serve the City. We believe that our evaluation consisted of a thorough and
complete assessment of the Proposed Financial Program, as well as an in-depth examination
of the City's fiscal policies. In addition, the Committee's review of the Financial Program
provides a broad look into the City's financial operations from a citizen's perspective, and
provides participants with an informative and rewarding experience. The Committee would
like to express our gratitude and thanks to Jim Bowersox, Penny Riley, Warren Shafer, and
Peter Moote, for their assistance and responsiveness, and to recognize the total staff effort
that went into the financial program. Their work on preparation of the program is reflected in
what the Committee believes to be a well-prepared, informative document.
This report on the Proposed Comprehensive Plan for Fiscal Year 2005-06 and 2006-07 as
prepared by the Budget Review Committee is hereby submitted to the Poway City Council.
Respectfully submitted,
'1l'f) IJt~
ara, Chairperson
~~~
JO~ ~ <i~
J~1t F~
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June 7, 2005 Item # 2