Avondale

City of

Communicating BudgetReductions

GFOA AZFebruary 2009

Avondale

City of

Financial Forecast

Fiscal Update2nd Quarter FY 2009

Avondale

City of

Economic Indicators

2008 - December National

CPI – 0.7% December job change =

(1,529,000) Unemployment rate 7.2%

Arizona Unemployment rate 6.9% December job change =

(12,400) Active foreclosures = 7,797

(Maricopa County)

328 Avondale foreclosures

2007 - December National

CPI 0.4% December job change =

(320,000) Unemployment rate 4.9%

Arizona Unemployment rate 4.2% December job change =

5,100 Active foreclosures = 3,859

(Maricopa County)

193 Avondale foreclosures

Avondale

City of

State Revenues

Shared Sales Tax December sales tax collections were down

(16.4)% compared to December 2007 and were $(79.7) million short of the monthly forecast.

14.8% projected annual loss = $920,000 to Avondale

Income Tax December individual income tax collections were

down (6.2)% compared to December 2007 and were $(43.1) million below forecast.

Avondale

City of

State Revenues

Auto In-Lieu Tax FY 2009 YTD Disbursement to Avondale $100,00

below 2007 (7.5% below City forecast)

HURF FY 2009 YTD Disbursement $348,000 below

2007 (14% below City forecast)

Avondale

City of

State Shared Revenue

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

*

2010

*

2011

*

St. Sales TaxIncome TaxHURFAuto

*Projected

Avondale

City of

Local Revenues

Sales Tax Six month collections $2.2 million or 11.3% below

forecast Six month collections below same six months

prior year $2.4 million or -12%. Development Revenue

Single family permits total 39 year to date – 38% below forecast

Avondale

City of

City Sales TaxCalendar Year Monthly

2,000

3,000

4,000

5,000

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Thousa

nds

2005 2006 2007 2008

Avondale

City of

Restaurant & Bar TaxQuarterly Collections

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2003 2004 2005 2006 2007 2008 2009

FQ1FQ2FQ3FQ4

Avondale

City of

Tax on Items over 5,000Quarterly Collections

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2002 2003 2004 2005 2006 2007 2008 2009

FQ1FQ2FQ3FQ4

Avondale

City of

Contracting TaxQuarterly Collections

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2003 2004 2005 2006 2007 2008 2009

FQ1FQ2FQ3FQ4

Avondale

City of

Retail TaxQuarterly Collections

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2003 2004 2005 2006 2007 2008 2009

FQ1FQ2FQ3FQ4

Avondale

City of

Tax Percent by CategoryFY 2007

RETAIL42%

USE1%

TELECOM/ TRANS/ UTILITIES

4%

HOTEL/ MOTEL0.1%

RENTALS/EQUIP2%

PRINTING PUBLISH0.28%

ADVERTISING0.06%

RETAIL $5k+18.15%

BARS/ REST6%

AMUSEMENT2%

CONTRACTING19%

RENTAL REAL PROP6%

Avondale

City of

Tax Percent by CategoryFY 2009 YTD

RETAIL49%

TELECOM/ TRANS/ UTILITIES

6%

USE1%

HOTEL/ MOTEL0.4%

RENTALS/EQUIP2%

PRINTING PUBLISH0.21%

ADVERTISING0.16%

RETAIL $5k+12.57%

BARS/ REST7%

AMUSEMENT2%

CONTRACTING12%

RENTAL REAL PROP8%

Avondale

City of

Taxable TransactionsQuarterly

0

100

200

300

400

500

600

Millions

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

FQ1

FQ2

FQ3

FQ4

Avondale

City of

Assumptions FY 2009-10

Baseline sales tax assumes -5% growth 100% of contracting sales tax considered

one-time 75% of building/development revenue

considered one-time 75% of Interest Income considered one-time

Avondale

City of

FY 2009-10 RevenueProjections

2005-06 2006-07 2007-08 2008-09 2009-10 2009-10 2009-10Actuals Actuals Actuals Estimates Projection One-Time On-Going

GENERAL FUNDTaxes 28,842,447 31,217,648 28,461,289 24,259,787 23,539,840 2,597,130 20,942,710 Intergovernmental 10,144,819 17,891,905 19,292,811 18,339,091 16,575,020 960,000 15,615,020 Licenses and Permits 5,356,305 3,537,710 1,999,825 1,007,038 1,007,040 514,520 492,520 Charges for Service 1,397,203 1,093,757 1,309,472 837,873 837,890 454,120 383,770 Fines and Forfeits 950,973 1,280,033 1,467,013 1,591,071 1,591,090 106,670 1,484,420 Miscellaneous 1,261,671 2,349,819 1,825,713 695,214 434,440 132,930 301,510

TOTALS 47,953,419 57,370,873 54,356,123 46,730,074 43,985,320 4,765,370 39,219,950

Avondale

City of

Avondale Budget Reductions

Step One Reductions – Spring 2008 - $3.2 million•Elimination of 29.5 positions•Transfer or redeployment of staff•Layoff of two employees•Voluntary separation offered•Reduce training and travel•Eliminate consulting projects and services•Eliminate operating capital purchases and improvements•Reduce memberships•Reduce meeting expenses and supply budgets•Reduce special events and activities•Reduce printing, publication and marketing costs•Replacement costs, temps and other contracts

Avondale

City of

Avondale Budget Reductions

Step Two Reductions – December 2008 - $3.6 millionContracting out for services – $153,000Reduction in force - $1,198,960Eliminating special events for one year $110,000 + O/T (not including RIF)State of the City $2,500Northwest Public Safety Facility $1,100,000 (net)Eliminating the Neighborhood Traffic Management Program (NTMP) $200,000Cashion Community Center Conversion $58,500Contributions Assistance Program $40,000Youth Non-Profit Sports Voucher Program $32,500New Life Center $25,000Line items/Other - $670,000Elimination of 46 positionsLayoff of 20 employees

Avondale

City of

The Final $3 Million

Suspend equipment and vehicles replacements Suspend replacement fund contributions Additional voluntary retirements No salary adjustments No additional employees Special interest classes/sports cost recovery Increase in engineering and planning fees

Avondale

City of

Transition Assistance

2 weeks base pay + 1 week for each year capped at 12 weeks

$3,000 for 90 days of medical premiums Outplacement services including skills

training, professional resume service, interviewing assistance

Avondale

City of

Questions?

March 2009