May 23, 2012. ISF & Cost Allocation Distribution of Costs (120 Day Review - Aug. – Dec., 2012)...
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Transcript of May 23, 2012. ISF & Cost Allocation Distribution of Costs (120 Day Review - Aug. – Dec., 2012)...
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City of Modesto Fiscal Year 2012-13Budget Workshops Follow-UpMay 23, 2012
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AgendaISF & Cost Allocation
Distribution of Costs (120 Day Review - Aug. – Dec., 2012)Overview Budget Picture
Public Works & UP&P$3.8 Million ShortfallMayor’s Reductions (Initial and Additional 3%)
Department Presentations (Service Enhancements, Reductions, Impacts and Revenue Enhancements)UP&P - Workload/Workflow of Capital Improvement Support FundMayor’s Closing CommentsFinance Committee Deliberations and Policy Considerations
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GAAP Distribution of Costs
Internal Service
Fund (ISF)
Cost Allocation
Service Credits
Direct Billing
The City of Modesto utilizes 4 methods to distribute costs for services. These methods are industry standard and supported under Government Accepted Accounting Principles (GAAP)
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Distribution of Cost Methods Defined
Internal Service Funds
• Funds used to account for goods or services provided by one dept to another dept on a cost reimbursement basis.
Cost Allocation Plan
• A method to identify and distribute indirect costs from support depts to those depts they serve.
Service Credits
• An signed agreement between depts to provide labor, equipment, supplies and material costs as agreed upon in advance.
Direct Invoices
• Invoices related to a service or charge provided or directed by another dept may be directly invoiced to the consumer dept.
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Methods Used by Departments
Departments ISF Cost Allocation
Service Credits
Direct Billing Comments
City Clerk X XCity Attorney X X XCity Auditor XCity Council XCity Manager X XPRN X XHR X X XFinance X XIT X X XPolice X X
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Addressing Distribution of Costs – Models Moving Forward
Complex allocation modelsNot 1 for 1 reductions – Costs savings are not specific to General Fund (i.e., 40% General Fund to 60% Enterprise Fund) Plan to address distribution of cost models (Aug. -Dec., 2012)City Manager will request the City Council direct the City Auditor to review and make recommendations to current allocation models.
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Budget Picture
Continued challengesExpenditures still exceed revenuesService levels remain flat but needs are evidentWater & Wastewater stable - Future rate increases being proposedSalary & Benefits (contractual raises, increased pension costs, retiree health care costs projected to increase annually)MPOA – 2% August, 2012 – Estimated at $310,052MPMA – 2% August, 2012 – Estimated at $82,571MCFFA – 3% July, 2012 – Estimated at $460,898No furlough savings are currently budgetedObligations to JPA/MRFA
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Modesto Regional Fire Authority(MRFA) – Additional Expenses
City of Modesto has received and is reviewing the preliminary MRFA budget for FY13.Capital equipment needs will need to be discussed and addressed.Larger increases include:
Pension Increase - $480,0003% Raises July, 2012 - $460,000Airport Staffing - $160,000
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General Fund Overview – FY12/13Amount
Total Revenues $ 101,752,591
Total Expenditures:
Department Budgets (102,644,318)
Transfers Out (8,202,314)
(110,846,632)
Shortfall $ (9,094,041)
Notes: Revenues include Transfers In Transfers Out include: Debt Service - $3,400,801Surface Transportation MOE - $1,687,7154th Year of PD ARRA Grant - $986,000
Mayor's Recommended Reductions or Enhancements Are Not Included
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Shortfall for 2012 / 13
AmountUse of FY11/12 Fund Balance $ 4,718,202 Mayor's Recommended Reduction List:
Initial Revenue Enhancements 337,868 Initial Expenditure Reductions 243,170
Total to Date $ 5,299,240
Remaining Reductions to be Made $ 3,794,801
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Source of FY 11-12 Fund Balance Carryover
Amount Fund Balance Carryover - FY 10/11 $ 1,493,348Departmental Savings:
Police 859,668Parks, Recreation & Neighborhood 418,655Others 269,441
Unanticipated RevenuesPolice 595,393Business License 359,447Sales Tax 187,485Others 534,765
Total to Date $ 4,718,202
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FY12/13 Proposed General Fund Expenditures
Police $ 48,755,502 44.1%Fire 24,458,566 22.1%PR&N 11,163,141 10.1%C&ED 5,848,656 5.3%Finance 4,911,584 4.4%City Attorney 2,394,476 2.2%City Manager 1,509,989 1.4%Human Resources 1,373,133 1.2%City Council 475,713 0.4%City Clerk 383,198 0.3%Office of the Auditor 163,756 0.1%Transfers Out 8,136,314 7.4%Non-Departmental 1,029,434 0.9%
$ 110,603,462 100%
Includes Initial Mayor's Recommendations
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Mayor’s Reductions -Initial and additional 3%
Reduction Worksheets
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Closing The Shortfall
Freezing of Vacant Positions (May-Sept)
Temporary Savings on EBF and WC (To fund shortfall temporarily
through negotiations)
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Finance Committee Deliberations and Policy Considerations
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Closing
Thank you & Questions