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City 2011 budget – an analyis

Marc Knapp and Warwick Jones

The preliminary 2011 budget was presented to City Council at its last meeting. It will vote on the budget at it meeting on December 7. As promised in our report on the last meeting, we are providing a summary of the budget document. There were no surprises in the document and all of the major moves were described by the Mayor or staff at Council meetings,

Clearly, it was a difficult and painful budget. We’d like to think that 2012 will be easier.

General Fund
Total revenue for 2011 is projected at $122.0 million, 1% lower to that budgeted for 2010. Press Download file to see breakdown The fall reflects amongst other things:
  1. lower City property taxes, down 2% to $41.2 million
  2. lower business license fees, down 9% to $22.6 million
  3. lower SC Government grants, down 2%to $13.4 million
  4. lower motor vehicle taxes, down 15% to $15.5 million
  5. lower inspection fees, down 20% to $1.4 million.

The fall would have been greater if not for

  1. a recovery of ‘prior year property taxes” of $2 million up 909 % on 2010

  2. higher SCE&G franchise fees, up 5% to $10 million

Total expenditures for 2011 were projected at $124.8 million, a fall of 1% compared to that for 2010. The deficit of $1.8 million between revenues and expenditures is met, as in previous years, by the surplus achieved by Enterprise Funds. Press Download file to see Expenditure breakdown

Generally, there were no large increases in costs projected for any department, but “non departmental” showed a very large credit. The major projected increases were;

  1. Police, up 1% to $36.3 million
  2. .
  3. Fire, up 3% to $20.9 million
  4. Livability, new for 2011 and spending projected at $0.68 million
  5. “Non departmental” - a credit of $3.3 million compared with a credit of $2.2 million in 2010.

“Non departmental” adjustments are tricky to describe. When an employment position is allowed to remain unfilled, the department budget is not necessarily adjusted, but the “non departmental” account is. Similarly with furloughs, the budget of the specific department remains the same, but adjustments are made in “non departmental’.

Within “non departmental”, the 2011 draft budget has “Salary Savings” of $3.8 million for 2011 compared with $2.2 million for $2010. From the presentation to Council, the City plans to eliminate 110 positions next year. The 2011 budget also provided a credit of $550,000 to reflect the benefits of its proposed early retirement plan. There were no savings from furloughs projected for 2011. In 2010, savings of over $1 million were projected.

We also note the $1.92 millionfor "Transfers out". We asked the City what these were. We were told it represents funds from the general revenues going to pay expenditures or expenses in areas outside of the general operating budget. The largest piece, $1.63 million, is for principal and interest on the certificates of participation (COP) borrowing that paid for the "new" Lockwood building, renovation of the police station, ball park and various city garages. The non-garage debt (72.3%) is paid for by the monies in the "transfer out" from the general operating budget each year. The COP will be completely paid off in 2015. The other significant"transfer out" is to pay the cost of various energy savings items (3rd generation lights in light intensive facilities (garages, fire stations, etc.), LED traffic lights, satellite technology sprinklers, etc.) that the city has put in place over time using an energy performance contract financing. The funds transferring out ($272,294) pay for these items and are tracked directly to reductions to in the general fund in the appropriate budget lines such as different buildings electricity, water, etc that are made possible by the energy reduction items that have taken place.

Enterprise Funds
There were no surprises in the Enterprise Funds budget. Revenue for 2011 is projected at $23 million, a 5% increase over 2010. Expenditures are projected to remain flat at $21.2 million. Revenues benefited from a 33% increase in City market revenues and a 6% increase in parking revenues. Despite a 2% increase in City market expenses, the surplus for Enterprise Funds jumped to a projected $1.8 million, 3 times that for 2010. Press Download file to see Enterprise Fund summary.

A fuller description of the budget can be gained by viewing the document on the City web site. We have covered the broad features. But as the Mayor remarked cuts and changes were made to many of the City departments.