City Budget of $22.6 Million Presented in Public Study Session
Menifee City Council members were presented with a $22.6 million budget proposal by staff members during a public study session prior to Tue...
http://www.menifee247.com/2013/06/city-budget-of-22.6-million-presented-in-public-study-session.html
Menifee City Council members were presented with a $22.6 million budget proposal by staff members during a public study session prior to Tuesday night's council meeting.
Expected revenues listed for the 2013-14 fiscal year total $22,633,059. Staff members were able to present a balanced budget by leaving out approximately $1.1 million in requests for new staff positions to accommodate needs in a growing city of 80,000.
Those requested positions included salaries for engineers needed to help with the planning and design of capital improvement projects such as the upcoming road improvement projects. Instead, said interim city manager Rob Johnson (below), consultants must be hired out of existing project funds.
Another $630,090 in one-time expenditures will come from the city's general fund -- a reserve of $8.7 million of unspent revenue that has been built up since the city's incorporation in 2008. Those expenditures for the next fiscal year include additional software and hardware to support administrative services and community development improvement projects.
Using funds granted by Riverside County upon the city's incorporation, Menifee built up a surplus of $5.6 million its first year. That fund balance increased every year until the 2010-11 fiscal year, when it reached $10.1 million. The 2011-12 fiscal year was the first year the city needed to dip into that reserve, which leads to some confusion about whether the budget actually is balanced.
In response to a question from council member John Denver, finance director Terri Willoughby admitted that the city spent more than it took in during 2011-12. This, she and Johnson explained, occurred only because one-time expenditures were taken from the general (reserve) fund. So in essence, whether you consider the budget balanced is a manner of semantics.
The bottom line, says Johnson, is that the current general fund of $8.7 million is 38 percent of the proposedrevenue -- well above the 28 percent guideline established by the city council. This, he said, enables the city to fund necessary one-time expenditures without dipping into the budget.
"This is a very conservative budget," Johnson said. "We've made sure we're planning for the worst and expecting the best. We see the economy turning around and we see development starting. In the meantime, we're extremely fortunate to have that fund balance. For a city our size, we're doing very well."
That doesn't mean there aren't challenges. In fact, Mayor Scott Mann was absent from the meeting because he was in Sacramento with the mayors of Wildomar, Jurupa Valley and Eastvale to lobby state officials for the restoration of funding lost when $4 million annually in vehicle license fees was removed from the state budget. Because they were recently incorporated, these four cities did not receive the supplemental funding other cities now receive.
The restoration of funds could help to pay for other necessary services, such as additions to the police force -- a definite necessity, Johnson said.
The Menifee Police Department -- an organization formed through contract with the Riverside County Sheriff's Department -- includes about 33 full-time officers, Johnson said. The Sheriff's Department guidelines for police staffing recommends one officer for every 1,000 residents -- meaning Menifee should have more than 80 full-time officers.
"There is a definite need," Johnson said. "It's a concern. To make budget, we didn't add any code enforcement or police officers. Unfortunately, 72 percent of our budget is already spent on police and fire personnel."
The expected additional development, with the resulting business and property tax, could help fund such additional expenses. Several new businesses have applied for city approval, including an Applebee's restaurant, Five Guys restaurant and a Jersey Mike's Subs. But any such tax revenue would not be seen until after the upcoming fiscal year.
"We're working on getting approval for several of these," Johnson said, "but it's a 12- to 18-month process. We won't reap those benefits until the following fiscal year. We could hedge our bets a bit in our budget planning, but we don't want to do that."
This meeting was informational only. The budget proposal will be presented to the city council for approval at its next meeting on June 18.
Expected revenues listed for the 2013-14 fiscal year total $22,633,059. Staff members were able to present a balanced budget by leaving out approximately $1.1 million in requests for new staff positions to accommodate needs in a growing city of 80,000.
Those requested positions included salaries for engineers needed to help with the planning and design of capital improvement projects such as the upcoming road improvement projects. Instead, said interim city manager Rob Johnson (below), consultants must be hired out of existing project funds.
Using funds granted by Riverside County upon the city's incorporation, Menifee built up a surplus of $5.6 million its first year. That fund balance increased every year until the 2010-11 fiscal year, when it reached $10.1 million. The 2011-12 fiscal year was the first year the city needed to dip into that reserve, which leads to some confusion about whether the budget actually is balanced.
In response to a question from council member John Denver, finance director Terri Willoughby admitted that the city spent more than it took in during 2011-12. This, she and Johnson explained, occurred only because one-time expenditures were taken from the general (reserve) fund. So in essence, whether you consider the budget balanced is a manner of semantics.
The bottom line, says Johnson, is that the current general fund of $8.7 million is 38 percent of the proposedrevenue -- well above the 28 percent guideline established by the city council. This, he said, enables the city to fund necessary one-time expenditures without dipping into the budget.
"This is a very conservative budget," Johnson said. "We've made sure we're planning for the worst and expecting the best. We see the economy turning around and we see development starting. In the meantime, we're extremely fortunate to have that fund balance. For a city our size, we're doing very well."
That doesn't mean there aren't challenges. In fact, Mayor Scott Mann was absent from the meeting because he was in Sacramento with the mayors of Wildomar, Jurupa Valley and Eastvale to lobby state officials for the restoration of funding lost when $4 million annually in vehicle license fees was removed from the state budget. Because they were recently incorporated, these four cities did not receive the supplemental funding other cities now receive.
The restoration of funds could help to pay for other necessary services, such as additions to the police force -- a definite necessity, Johnson said.
The Menifee Police Department -- an organization formed through contract with the Riverside County Sheriff's Department -- includes about 33 full-time officers, Johnson said. The Sheriff's Department guidelines for police staffing recommends one officer for every 1,000 residents -- meaning Menifee should have more than 80 full-time officers.
"There is a definite need," Johnson said. "It's a concern. To make budget, we didn't add any code enforcement or police officers. Unfortunately, 72 percent of our budget is already spent on police and fire personnel."
The expected additional development, with the resulting business and property tax, could help fund such additional expenses. Several new businesses have applied for city approval, including an Applebee's restaurant, Five Guys restaurant and a Jersey Mike's Subs. But any such tax revenue would not be seen until after the upcoming fiscal year.
"We're working on getting approval for several of these," Johnson said, "but it's a 12- to 18-month process. We won't reap those benefits until the following fiscal year. We could hedge our bets a bit in our budget planning, but we don't want to do that."
This meeting was informational only. The budget proposal will be presented to the city council for approval at its next meeting on June 18.
