Minutes 04/02/2013 - Laserfiche WebLink

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April 2, 2013 eliminated in this budget, generating a net savings to the City. With this budget, we are eliminating four combination inspector positions; in addition, we are eliminating a webmaster and a video production position because an outside contractor is now doing that work. Local Support for Education City Council has consistently had a goal of maintaining a high quality public school system. Even though I am recommending that you appropriate a smaller amount of local funds to the School System, this budget continues this goal. I am recommending that you decrease the amount of local funding to reflect the school system's actual operational expenditures in recent years, escalated for anticipated State supported salary increases. You appropriated to the School System a total $53.8 million in local funds for Fiscal Year 2012-2013. This budget recommends that you appropriate the sum of $46 million for Fiscal Year 2013-2014, a reduction of approximately $7.8 million. We have analyzed the School System's expenditures for the past several years as presented in the School System's Comprehensive Annual Financial Report (CAFR) and the State Superintendent's annual report on our School System's spending. Based on this analysis and implementing some important cost saving measures, we conclude that the School System will have adequate funding to continue its program of providing high quality education to the children of Portsmouth. As for the cost saving measures, City and School staffs have identified several support services where there are opportunities for partnering to provide services at a significant lower overall cost to Portsmouth taxpayers. The most significant opportunity for savings is for the Schools to combine their health insurance coverage and plan management with the City and to change from a fully insured to aself-insured program. The City's health insurance consultant, Mercer, has evaluated School claim data, and he estimates a savings of approximately $3.3 million annually from this change. My budget recommendation assumes that we can implement this partnership on January 1, 2014 thus generating one-half year of savings. In addition, the City and Schools are moving forward on having the City Fleet Management take over maintenance of School buses and vehicles. The City is ready to take over that function as early as July 1, 2013. We estimate that the Schools will save at least $100,000 per year from this change. Another opportunity for budget savings is to combine certain City and School financial functions such as purchasing and payroll, which should produce savings of at least $100,000 per year as well. Beginning July 1, 2013, this budget recommends that we fold the School System's school bus replacement program into the City's equipment replacement program. In this regard, I have included $1.0 million in the City's proposed CIP appropriation for Fiscal Year 2013-2014 to replace school buses, and I have included $1.0 million per year for the subsequent four years of the CIP for the continued annual replacement of school buses. Strategies to Reduce Subsidies for Enterprise Funds The City operates several enterprise operations, which are intended to be self- supporting through fees and revenues generated by their programs. The largest City enterprise operation is the Water and Sewer Utilities fund, which successfully covers 100% of its operating and capital costs. There are three other funds that are intended to be self-supporting, but which have required subsidies from the General Fund in order to fully pay for their costs. We are evaluating options and strategies to make these funds fully self-supporting. The most significant General Fund subsidy is to the Golf Fund, which we project to be almost $1.3 million for Fiscal Year 2013-2014. This subsidy has been growing rapidly each year, and now is equivalent to about two-cents on the real estate tax rate. In order to reduce this subsidy, we propose to implement in 2013 new pricing strategies for golf fees with a goal of increasing Golf Fund revenues. Golf fees have a high elasticity of demand, and yet our City Code dictates a very rigid pricing schedule.