Minutes 03/18/1997 - Laserfiche WebLink

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08O March 18.1997 drinking water. The proposed rate increase is necessary for protecting one of our most valuable assets. FISCALSTRENGTH We will operate our community in a fiscally responsible manner, balancing services delivered against taxes paid to achieve substantial value for our citizens. We will constantly encourage our family to maximize effectiveness in service delivery and seek altemative revenue sources to meet our financial objectives. Investment in Employees The FY97 budget highlighted a renewed emphasis on ~mproving the capabilities of the labor force. I am pleased that this budget has been able to continue this trend for our employees. Funds for tuition assistance, training and membership ,n professional organizations will help provide the tools for staying current with industry standards and technological changes to improve the efficiency and effectiveness of operations. Wise investment in our employees will yield substantial benefits to our citizens as services and service delivery improves. I am also pleased that this budget includes $1.5 million for a salary and benefit increase for city employees which equates to an average of 3%. The method established in FY97 of fixed dollar ncrease is being utilized again for FY98. Also. the market ranges for each position must remain competitive with the market place. To accomplish this, effective July 1, 1997, the salary ranges for each grade are proposed to increase by a 2% market adjustment. Retirement Benefits In FY97, a new direction was established for providing retirement increases at the same level as those provided city employees. It is my intention to continue this practice for FY98. Retired fire and police employees have requested that the 3% increase from. last year be made permanent and fully funded actuarially. The cost to the City would be approximately $2.4 million were this increase made permanent and is not affordable. The funding of this request would severely limit the budget's capacity to provide salary increases to active City employees or school personnel. My recommendation for retirement tncreases consists of continuing the 3% provided for FY97 and an additional 3% for FY98 which is comparable with that given to current employees. Prudent Savings The front-page headlines read "$6 million Surplus Signals Comeback for Portsmouth." The excess of revenues over expenditures was a positive sign and is a good step toward improved financial health. The Fund Balance Reserve represents the primary resource (or savings) the City has for minimizing the peaks and valleys in our cash flow stream and for emergencies. A prudent industry standard for a minimum fund balance level is 10% of general fund operating revenues. Based on the FY98 proposed general fund budget operating revenues of $126 million, the fund balance level should be approximately $13 million, With the FY96 surplus, the minimum level has been achieved for first time in 10 years. In continuing tight financial times, it is very tempting to want to use this reserve. In 1995, the City's bond rating was downgraded by Moody,s Investors Services, who cited the erosion of the fund balance as a contributing factor. To move toward having the previous rating restored or improved, Moody's will watch the fund balance reserve growth and use. The reserve represents a "one-time" revenue source and