INTRODUCTION
- City Manager Kenneth P. Collard -
2011 BUDGET
Fiscal Plan 2011
BUDGET
Fiscal Plan 2011 Outcomes
BUDGET
Plan Development Process & Results
The Plan was developed in 2006 through the following process steps:
Step 1 - Identified budget realities
Step 2 - Identified and evaluated the City’s roles and responsibilities for service
delivery within the community
Step 3 - Identified revenues from historical trends and projections
Step 4 - Developed more accurate year-end projections
Step 5 - Validated the impact of key budget components
Step 6 - Established financial targets to guide our fiscal decision-making
Step 7 - Evaluated options for funding legacy costs
Step 8 - Evaluated and reassessed assumptions and targets against actual
performance (added for 2008)
Base Line Data
Key financial assumptions and targets have been superimposed on baseline financial data.
Assumption #1: Revenues and expenditures increase at historical rates:
Projected Annual Increase Projected Annual Increase
Revenue
2010 Assumptions 2011 Assumptions
Property taxes (based on assessor’s 1.5%
1.5%
estimate) ( Revised – 0% for 2012 and 2013)
1.5%
Licenses, permits & fees 3%
(Revised – 0% for 2012 and 2013)
Other intergovernmental revenue 0% 0% (Revised -10% for 2012)
Charges for services 2% 2%
Interest and rentals 1% 1%
Other revenue 3% 3% (-6% in 2015)
Projected Annual Increase Projected Annual Increase
Expenditures
2010 Assumptions 2011 Assumptions
1.5%
Salaries 1.5%
(Revised – 0% for 2012 and 2013)
Health Insurance 7.0% 7.0%
1.5% per affected 1.5% per affected employee group
FICA, Medicare, Deferred comp.
employee group (Revised – 0% for 2012 and 2013)
Fringe Benefits 3% 3%
Supplies and services 1% 1%
Non-departmental expenditures 3% 3%
Assumption #2: No new taxes
Assumption #3: Increased contribution to capital
Assumption #4: Continuation of Initiatives
Assumption #5: Strategic Issuance of Debt to Finance Capital
Assumption #6: Reduction of State Shared Revenue
Assumption #7: Use of excess pension fund investment earnings (modified)
Financial Targets & Criteria
Several key indicators establish the overarching fiscal goals that serve as a foundation for the Plan.
2010 2011
Indicator Target
Accomplishment Proposed
Range of 13-15% of budgeted operating
Fund Balance 13.8% 15.4%
revenues
Budget Stabilization Range of 1-2% of budgeted operating revenue
$1.65M $1.65M
Reserve Target = $500K - $1M
Capital Contingency Range of 1-2% of budgeted operating revenue
$350K $350K
Reserve Target = $500K - $1M
Annual Capital $13.3M
$5M
Improvement Program (incl. ARRA $6.6M
(Includes CIP, Major & Local Street Funds)
(CIP) funding)
Debt Financing for Debt Service Debt Service
Optimized
Capital Improvements $5.12M $5.07M
Bond Ratings Maintained or Improved Maintained Maintained
Retiree Health Care
Established $400K $250K
Fund
Financial Plan Projections
2010 2011 2012 2013
Projected Proposed Projected Projected
Revenue* 51.2 49.4 49.2 49.6
Expenses 52.3 52.3 53.3 51.1**
Difference (1.1) (2.9) (4.1) (1.5)
Beginning 7.7 7.1 8.2 6.6
Use of
0.5 4.0 2.5 1.5
Reserves
7.1 8.2 6.6 6.6
Ending
(13.8%) (15.4%) (13.0%) (13.0%)
* - Healthcare Adjustments Excluded
** - Net of $4.1 million of permanent expense reductions
Property Tax (Growth Trend)
7.0 0 % 6. 09%
5.0 0 %
2. 70% 2. 94% 2. 85%
3 .0 0 %
% C h an g e
1.97%
1. 48%
0. 67%
1.0 0 % 0. 00%
- 1.0 0 %
- 3 .0 0 % -2. 90%
-3. 58%
- 5.0 0 %
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12
Fiscal Year
State Revenue Sharing Trend
14
12
10
7.3 7.0
(millions)
8 5.9 5.4 5.1 4.7 4.5 4.8 Statutory
4.2 3.7 3.6 3.5 Constitutional
6
4
5.2 5.0 5.1 5.1 5.0 5.2 5.2 5.2 4.8 4.9 4.8
2 4.6
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Fiscal Year
Change in Total State Spending
FY 00 FY 10
4.0 0%
3.0
M illio n s
0% -30% 14.0
2.0
-44% 12.0 -22%
-48% -62%
10.0
1.0
8.0
0.0 6.0 School Aid
Community Health Corrections Higher Education Human Services Transportation State Shared
Revenue 4.0
2.0
Budget Areas
0.0
Full Time Employee Trend
1000 968
935
950
900
900
Positions
850 822
793
800
753 753 753
750
700
1990 1995 2000 2005 2009 2010 2011 2012
Year
Employee Retirement System Trust Fund
600,000 High Point: $550M
Oct. 7, 2007
550,000 Current: $478M
Sept. 30, 2010
500,000
In M illio n s $
450,000
Market Value of Assets
400,000
350,000
Low Point: $280M
300,000 Mar. 9, 2009
250,000
2006Q1 2007Q1 2007Q4 2008Q4 2009Q3 2010Q3
End of Quarter
Health Care Cost Savings: 2006-2011
28
26 26.3
24.6
24
23.0
22 21.5 21.5
m illio ns
20 20.1
18.7 18.8
18 17.6
16.7
16 16.3 16.1 15.6
14 14.3 14.2 14.4 14.5
13.7
12 12.5 12.2 12.3
10
2006 2007 2008 2009 2010 2011 2012
No Change Projection (Starting in 2006)
New Plan Projection (Based on Inflationary Assumptions)
CoK Actual (2005-2009) / CoK Projected (2010-2012)
NEIGHBORHOOD
STABILIZATION PROGRAM
- Jeff Chamberlain -
Community Planning & Development Director
- Laura Lam -
Community Development Manager
Outcomes
Stimulus funds into the local economy
Foreclosed / vacant properties rehabbed & re-occupied
Elimination of blight
Job creation
Targeted improvements coordinated with neighborhoods / neighborhood
plans
Positive impact on real estate market
Community Planning & Development
Stimulus Grants
CDBG – Recovery $ 495,533
Homeless Prevention Rapid Re-Housing $ 758,089
Neighborhood Stabilization Program 1 $ 1,700,000
NSP2 (City and Land Bank) $15,075,131
TOTAL $18,028,753
Community Development
Block Grant – Recovery
NACD – Job Training / Park Street Market $250,000
Hays Park Sidewalk / Curb $121,983
KNHS – Foreclosure Prevention Fund $ 47,597
MBA – Youth Training Program $ 26,403
Administration $ 49,550
TOTAL $495,533
Homeless Prevention Rapid
Re-Housing Program (HPRP)
Homeless Prevention
Financial Assistance $300,000
Housing Relocation and Stabilization Services $ 88,045
Data Collection and Evaluation $ 7,500
Outreach and Engagement $ 25,000
Rapid Re-Housing
Financial Assistance $205,000
Housing Relocation and Stabilization Services $ 88,044
Data Collection and Evaluation $ 7,500
Administration (HRI & CPD) $ 37,000
TOTAL $758,089
HPRP Outcomes to Date
Homeless Prevention: Eviction Diversion Program
127 households avoided becoming homeless
$139,520 expended
Rapid Re-Housing: Housing
42 homeless individuals/families re-housed and stabilized
$52,642 expended
Data Collection / Outreach Engagement: $13,329
Total Expended: $285,532 (3rd Quarter Report)
Neighborhood Stabilization Program
(NSP) 1
Demolition - 48 Blighted Properties $ 254,984
Acquisition / Rehab - 7 Foreclosed Units $ 671,379
Acquisition / Redevelopment - 61 Properties $ 461,137
Homebuyer Assistance & Counseling $ 142,500
Administration $ 170,000
TOTAL $1,700,000
Neighborhood Stabilization Program
(NSP) 2
City
Demolition - 65 Blighted Properties $ 1,890,000
Rehab - 95 Foreclosed Units $ 5,566,860
Redevelop - 15 Vacant Properties $ 786,645
Homebuyer Counseling $ 114,000
Administration $ 595,955
Sub-Total $ 8,953,460
Land Bank
Acquisition - 95 Foreclosed Units $ 1,565,000
Acquisition - 15 Redeveloped Properties $ 307,500
Land Banking - 245 Foreclosed Units $ 4,051,698
Administration $ 197,473
Sub-Total $ 6,121,671
TOTAL $15,075,131
NSP - Requirements
Grant Timelines
1
NSP1 – City of Kalamazoo must expend 100% of NSP1 funds by 9/2012.
2
NSP2 – City of Kalamazoo and Kalamazoo County Land Bank must
expend 50% of NSP2 funds by 2/2012 and expend 100% funds by 2/2013.
Income Eligibility
25% of funds must directly benefit individuals at or below 50% of Area
Median Income ($3.8 million of Kalamazoo’s grant):
• (1 person = $21,350)
• (4 person = $30,500)
Remainder of funds can benefit individuals up to 120% of Area Median
Income:
• 1 person = $51,240)
• (4 person = $73,200)
NSP – Accessing the Program
Getting the Funds to the Streets:
NSP Homes
– For Sale
– Rental
– Lease / Purchase
Homeownership Opportunity Program
– Starting the Process: Contact Community Planning & Development
– Criteria: Securing financing, credit, and counseling
– Homebuyer Counseling
– Significant down payment, closing cost assistance available to eligible
homebuyers
NSP – Special Projects & Partnerships
Marketplace Development Partnership – Home Builders Association and
Michigan Prisoner Re-Entry Initiative
Major Demolition – Blakeslee Hospital and JA Richards properties
Deconstruction Collaboration – County and Community Partners
Engagement of Community Stakeholders – 6 core neighborhoods, housing
service providers, contractors, community organizations
NSP – 2011 Outcomes
Continuation of CDBG-R and HPRP
Marketing and sale of NSP1 homes, pre-marketing for NSP2 homes
Plan development, bidding, and rehabilitation of NSP2 homes
Demolition of Blakeslee Hospital and JA Richards properties
New construction at the Marketplace Plat
Revitalizing Neighborhoods
in Kalamazoo
http://www.fox17online.com/news/fox17-revitalize-neighborhoods-
kalamazoo,0,5614829.story
NEIGHBORHOOD
STABILIZATION PROGRAM
- Jeff Chamberlain -
Community Planning & Development Director
- Laura Lam -
Community Development Manager
INFRASTRUCTURE
- Bruce Merchant -
Public Services Director
- Frank Szopo -
City Engineer
Arboretum Parkway
Connector & Roundabouts
CITY OF KALAMAZOO STREETS CONDITION
1997-2010
83% 83%
% of Streets in Need of Paving
% of Streets in Need of Paving
51%
$4.8 million
$7.0 per year
$66.6 million total
$98 million total 20%
2010
1997
2010
1997
Recommended Actual Funding
Program 1997
North Street
Portage Street
2011 MAJOR STREETS
STREETS COST
$900,000
Local Street Program (Tier #1) - Various
$100,000
$458,000
Douglas (Kalamazoo to Ravine)
$200,000
$315,000
Balch Street (Park to Burdick)
$226,000
$320,000
Traffic Signal Upgrade - Various
$150,000
Scattered Site Mill and Resurface – Various Major Street $150,000
Glendale Boulevard (Mount Olivet Road to Courtland) $300,000
Angling (South City Limits to 500' West of Oakland $245,000
Gibson (Pitcher Street to King Highway) $377,000
Palmer (Portage Street to James Street) $145,000
Lake Street (Portage Street to Walter Street) $73,000
Oakland/Parkview Intersection Improvements $49,000
Design for Upcoming Years Major Street Projects - Various Major Streets $50,000
MDOT - Park Street Bridge @ Axtell Creek $35,000
$4,093,000
Balch Street
Douglas Avenue
2011 LOCAL STREETS PROJECT CANDIDATES
STREET FROM TO PASER NEIGHBORHOOD TYPE OF WORK LENGTH COST
Songbird Old Field E. End 2 Parkview Hills 1 1/2" M&R 525 $29,000.00
Blackberry Old Field E. End 2 Parkview Hills 1 1/2" M&R 610 $33,000.00
Katydid Old Field E. End 2 Parkview Hills 1 1/2" M&R 1590 $85,500.00
Axtell Merril Westnedge 2 Vine 3" M&R, New C&G 1270 $142,500.00
Random Oakcreek Mt. Olivet 3 Burke Acres 3" M&R 850 $67,000.00
Garland Westndege Rose 2 Westnedge Hill 3" M&R 1315 $104,000.00
Glenwood Edgemoore Parkwood 2 Westnedge Hill 3" M&R, New C&G 1325 $155,000.00
Parkwood Bronson 2 Westnedge Hill 1 1/2" M&R 735 $44,000.00
Adams Parkview Springmont 2 Oakwood 1 1/2" M&R 1580 $72,500.00
Forbes Douglas Hilbert 2 Fairmont 1 1/2" M&R 2040 $117,500.00
TOTALS $850,000.00
11,840 Feet
2.24 Miles
Central Pumping Station
Public Services – Harrison Facility
2011 Proposed Utility Rates
Typical Residential Bills
3.5% Water Increase - 2.0% Wastewater Increase
INSIDE CITY OUTSIDE CITY
Quarterly Bill - 2010 Quarterly Bill - 2010
Water Sewer Water Sewer
Charge Charge Charge Charge
Inside City Residential $34.89 $27.19 Outside City Residential $59.08 $64.19
(70 cubic meters, 5/8" (70 cubic meters, 5/8"
meter) meter)
Quarterly Bill - 2011 Quarterly Bill - 2011
Water Sewer Water Sewer
Charge Charge Charge Charge
Inside City Residential $37.66 $29.57 Outside City Residential $59.13 $62.49
(70 cubic meters, 5/8" (70 cubic meters, 5/8"
meter) meter)
Dollar Increase $2.77 $2.38 Dollar Increase $0.05 ($1.70)
Percentage Increase 7.94% 8.75% Percentage Increase 0.08% -2.65%
The combined water and sewer bill will increase $5.15 per The combined water and sewer bill will decrease $1.65 per
quarter. quarter.
The combined percentage increase will be 8.30% The combined percentage decrease will be 1.34%
Southwest Michigan Regional
“SUSTAINABILITY COVENANT”
The Southwest Michigan Regional SUSTAINABILITY
COVENANT shall be a joint initiative of several organizations
in the Southwest Michigan Regional area that are committed
to promoting the development of a sustainable infrastructure
by the interconnection of economic, social and environmental
sustainability principles throughout the region and within their
respective community and organizations.
Public Services - Stockbridge
Facility Renovation
CITY HALL
Vegetative Roof Project
INFRASTRUCTURE
- Bruce Merchant -
Public Services Director
- Frank Szopo -
City Engineer
COMPENSATION
- Jerome Post -
Human Resources/Labor Relations Director
City of Kalamazoo Employee Groups
Amalgamated Transit Union (ATU)
Bus Drivers, Mechanics and related Service
91 members
American Federation of State, County and Municipal Employees (AFSCME)
Public Works crews and technicians
137 members
Kalamazoo Municipal employees Association (KMEA)
Clerical and Technical
114 members
Kalamazoo Public Safety Officers Association (KPSOA)
Public Safety Officers, Detectives and Civilian Officers
211 members
Kalamazoo Police Supervisors Association (KPSA)
Sergeants, Lieutenants and Captains
52 members
Not represented by a bargaining unit (NBU)
Professionals, Supervisors, Managers, Directors and some Clerical
157 employees
Wage Increases
Compensation
Year NBU AFSCME ATU KMEA KPSOA KPSA
Item
2005 0.0% 0.0% 0.0% 0.0% 3.1% 3.1%
2006 2.0% 2.0% 2.0% 2.0% 2.5% 2.5%
2007 2.0% 2.0% 2.0% 2.0% 2.0% 2.5%
2/14/08; 1.25%
Wages 2008 2.5% 2.5% 2.5% 2.5% 2.5%
8/14/08; 1.25%
2/14/09; 1.0%
2009 2.0% 1.5% 2.0% 2.0% 2.0%
8/14/09; 1.0%
2010 0.0% 1.5% 0% 2.0% * *
2011 0.0% * * * * *
* Currently in bargaining
Pension History
Compensation
Year NBU AFSCME ATU KMEA KPSOA KPSA
Item
2005 1.5% 2.0% 1.0% 1.0% 6.5%/1.0% ** 6.5%
2006 1.5% or 3.0% * 1.0% 1.0% 1.0% 6.5%/1.0% 6.5%
2007 1.5% or 3.0% 1.0% 1.0% 1.0% 6.5%/1.0% 6.5%
Employee Pension
2008 1.5% or 3.0% 1.5% 1.0% 1.0% 6.5%/1.0% 6.5%
Contribution
2009 1.5% or 3.0% 1.5% 1.0% 1.0% 6.5%/1.0% 6.5%
2010 1.5% or 3.0% 1.0% 1.0% 1.0% 6.5%/1.0% 6.5%
2011 1.5% or 3.0% 1.0% *** 1.0% *** ***
2005 2.3% 1.9% 2.1% 1.9% 2.7% 2.7%
2006 2.3% 2.0% 2.1% 2.0% 2.7% 2.7%
2007 2.3% 2.1% 2.1% 2.1% 2.7% 2.7%
Multiplier 2008 2.3% 2.1% 2.1% 2.1% 2.7% 2.7%
2009 2.3% 2.1% 2.1% 2.1% 2.7% 2.7%
2010 2.3% 2.1% 2.1% 2.1% 2.7% 2.7%
2011 2.3% 2.1% *** 2.1% *** ***
10 10
Vesting 9 10 10 10
(9/1/10) (1/1/09)
* 1.5% for those who did not purchase the PRA and 3% for those who did.
** 6.5% for sworn officers, 1% for non-sworn (civilian)
***Currently in bargaining
Health Care Costs: Projections vs. Actual
$14.5
$14.0
$13.5
$13.0
$ Million
$12.5 Actual
Projected
$12.5
$12.0 $12.2
$11.5
$11.0
2006 (AFSCME, KMEA & NBU)
Health Care Costs: Projections vs. Actual
$14.5 $14.2
$14.0
$13.5
$13.0
$ Million
Actual
$12.5
Projected
$12.5
$12.3
$12.0 $12.2
$11.5
$11.0
2006 (AFSCME, KMEA & NBU) 2007 (KPSOA & KPSA)
Health Care Costs: Projections vs. Actual
$18.0
$16.1
$16.0
$14.2
$14.0 $12.5
$13.7
$12.0
$12.2 $12.3
$ Million
$10.0
Actual
Projected
$8.0
$6.0
$4.0
$2.0
$0.0
2006 (AFSCME, KMEA & NBU) 2007 (KPSOA & KPSA) 2008
Health Care Costs: Projections vs. Actual
$20.0
$17.6
$18.0
$16.1
$16.0 $14.2
$14.0 $12.5
$14.4
$13.7
$12.0
$ Million
$12.2 $12.3
Actual
$10.0
Projected
$8.0
$6.0
$4.0
$2.0
$0.0
2006 (AFSCME, 2007 (KPSOA & 2008 2009
KMEA & NBU) KPSA) AFSCME KMEA NBU
80/20 split
Health Care Costs: Projections vs. Actual
$20.0 $18.8
$17.6
$18.0
$16.1
$16.0 $14.2
$14.0 $12.5
$14.4 $14.5
$13.7
$12.0
$ Million
$12.2 $12.3 Actual
$10.0
Projected
$8.0
$6.0
$4.0
$2.0
$0.0
2006 (AFSCME, 2007 (KPSOA & 2008 2009 2010 (ATU)
KMEA & NBU) KPSA) AFSCME KMEA
NBU 80/20 split
Health Care Costs: Projections vs. Actual
$25.0
$20.1
$20.0 $18.8
$17.6
$16.1
$14.2
$15.0
$12.5
$ M illio n
$15.6
$14.5 Actual
$14.4
$13.7
Projected
$12.2 $12.3
$10.0
$5.0
$0.0
2006 (AFSCME, 2007 (KPSOA & 2008 2009 2010 (ATU) 2011
KMEA & NBU) KPSA) AFSCME KMEA
NBU 80/20 split
COMPENSATION
- Jerome Post -
Human Resources/Labor Relations Director
COMMUNITY
POLICING
- Chief Jeff Hadley -
Department of Public Safety
Community Policing
Community Policing Initiatives & Outcomes
Hiring & Recruiting
Profiling Study
Program & Outreach
Citizens Police Academy
Monthly Neighborhood Meetings
Youth Leadership Academies
Street Academy
Broken Windows
Foot Patrol
School Resource Officer at Loy Norrix
2010 Statistics
2008 Crime Down 7.0%
2009 Crime Down 1.25%
2010 Crime Down 15.0%
Juvenile Part I Crime Down 43% (2009-2010)
Juvenile Arrests Down 37% (2009-2010)
Juvenile Felony Charges Down 38% (2009-2010)
Hiring & Recruiting
Current Environment (13 Vacancies)
Projected Retirements (Approximately 40 Retirements by
2013)
Citizens Public Safety Review & Appeal Board/Advisory
Council
Process Changes
Continuous Improvement
Profiling Study
Recommended by Citizens Public Safety Review & Appeal
Board
Lamberth Consulting
Justice Assistance Grant
Thank You
Citizens of Kalamazoo
City Commission
Community Planning and Development
Parks & Recreation Department
Public Services Department
Citizens Public Safety Review & Appeal Board
Department of Public Safety
COMMUNITY
POLICING
- Chief Jeff Hadley -
Department of Public Safety
ETHICS
SE
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ANALYSIS
RELATIO
NSHIPS
REL ATI
ONSHIP
S
SE A
RV N
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LY
E S
IS
ETHICS
REL ATI
ONSHIP
S
SE A
RV N
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ETHICS
BUDGET OVERVIEW
- Tom Skrobola –
Management Services/Finance Director
Departmental Budget
Reviews