1. Access and review the Hadleyville Budget Briefing Books and memo. Write aRecommendations to minimize the impact of the financial crisis on critical town services(500-750 words).

HADLEYVILLE TOWN OF HADLEYVILLE DEPARTMENT OF FINANCE 1245 LINCOLN BOULEVARD HADLEYVILLE, AZ 85001 BUDGET BRIEFING BOOKS Town of Hadleyville Budget Briefing Books Summary The following budget lays out the beginning steps to creating a future budget that will not operate in deficit while still offering some essential services to the residents of Hadleyville. It is the town's mission to provide services which offer the quality of life in Hadleyville that makes people want to live and raise their children here. We are entering into three major capital construction projects that are essential to improving the quality of life in Hadleyville. This year represents an opportunity for the Town of Hadleyville to finalize these capital construction projects and make any final modifications to the financing and timeline expected for these projects. Major Factors Impacting the 2011 Budget Economic Climate The Town's budget and overall financial plans are directly linked to the state of the regional and national economies. Economic forecasters expect our Town's economic forecast to improve slightly over the next three years, as well as, generate other industry and revenue into the future with the right planning now. We believe the investment in a Senior Center, Elementary School, and Water Treatment Plant will help with the future economic improvement by providing quality services for businesses and residents in Hadleyville. General Town Revenue Hadleyville has seen a decrease in general revenue categories due to families moving out of the area with the closing of a major employer. Although, revenues are down, important fee based services are still producing significant revenue for the Town. By improving facilities for youth, offering adult and senior programs at the new elementary school, and building a senior center, we are estimating some potential revenue growth opportunities for families. Industry/Employment We know that families cannot enjoy recreational programming for fees if the Town does not retain a major employer. We also know the importance a major industry employer can have on the local economy and we are actively engaged in discussion with several large companies about relocating to Hadleyville. We anticipate that through discussion and demonstration of the value Hadleyville can bring to an employer that within three to five years we will have a new major employer in the Town. Continued efforts to attract new business will serve as our primary strategy for increasing revenues. In addition, recommendations made by the Finance Department will ideally help to rectify the long-term issues created by deficit spending. Town of Hadleyville Budget Briefing Books Overall Budget Information Town Staffing Several positions have been restructured within the Town to adapt to the needs and skills necessary for the Town of Hadleyville to be successful. We have grown our staffing levels over the last several years and anticipate more growth if the budget allows in the coming years. Policing We have added the use of speed camera/photo radar in our Town primarily as a safety precaution, but we have seen a surprising source of revenue from this policing effort. We very much would love to see this revenue source decline for the Town; however, in the meantime we are making sure our residents are aware of this effort. Maintaining Infrastructure/Capital Projects Maintaining and enhancing the Town's infrastructure is critical to the Town's future. Given the Town's current financial commitments and the overall state of the economy we understand the difficult decisions we face related to maintaining our planned efforts for the Water Treatment Plant, new Elementary School, and Senior Center. We have asked a team of experts to take a look at the Town of Hadleyville's current and past budgets as well as future projections to determine if the plans we have put in place are feasible in the same timeline expected given the goal of reducing our deficit spending. Many Town of Hadleyville staff contributed to preparing the budget. The budget process is truly one project that involves all Town departments. The many people working together on its production exemplify the values of teamwork, craftsmanship, and public service that guide Town staff in all of our work throughout the year. Financial Management Policies Statement of Purpose The financial integrity of the Town of Hadleyville is of utmost importance. To discuss, write, and adopt a set of financial policies is a key element to maintaining this integrity. These financial management policies are designed to ensure the fiscal stability of the Town of Hadleyville and to guide the development and administration of the annual operating and capital budgets, as well as the debt program. Written, adopted financial policies have many benefits, such as assisting the Mayor and Council and City Manager in the financial management of the Town, saving time and energy when discussing financial matters, promoting public confidence, and providing continuity over time as the mayor and Council and staff members change. While these policies will be amended periodically, they will provide the foundation and framework for many of the issues and decisions facing the Town. They will promote wise and prudent financial management, provide the foundation for adequate funding of services desired by the public, and help make the Town more financially stable, efficient, and effective. Town of Hadleyville Budget Briefing Books Objectives The following are some objectives which should be considered when analyzing the budget documents and make recommendations: 1. Assist the Mayor and Council and Town management by providing accurate and timely information on financial conditions pertinent to the Town operations. 2. Provide sound financial principles with which to guide the important decisions of the mayor and Council and management, which have significant fiscal impact. 3. Set forth operational principles that minimize the cost of government and financial risk, to the extent consistent with services desired by the public. 4. Enhance the policy-making ability of the Mayor and Council by providing accurate information on program costs. 5. Ensure the legal use of all Town funds through a sound financial system and strong internal controls. 6. Employ revenue policies that diversify revenue sources, distribute the costs of municipal services fairly, and provide adequate funds to operate desired programs. Basis for Budgeting Budgets are adopted on a basis consistent with Generally Accepted Accounting Principles. Accordingly, all governmental fund budgets are presented on the modified accrual basis of accounting. Under this method of accounting, revenue and other governmental fund resources are recognized in the accounting period in which they become susceptible to accrual - this is, when they become both \"measureable and available\" to finance current operating expenditures for the fiscal period. Federal grant funds follow the required federal accounting requirements for expenditure and reimbursement of funds to the Town. Capital Improvement Projects All capital improvement projects must demonstrate the importance of the Town priorities, go through a workgroup process to explore the benefits of the project, and be approved by the Town Council. Projects may also be approved, but upon additional review and consideration, timelines and costs may be adjusted to reflect the Town's best interests. Basic Services, Parks & Facilities These services include operation and maintenance, open space and recreation facilities, neighborhood and Town-wide parks, greenways, trails, right-of-way islands and landscaping including street trees, playgrounds, non-reservation amenities and other similar public facilities, maintenance operations facilities, as well as overall department administrative activities. These services primarily serve to support individual and small-group recreation activities. Town of Hadleyville Budget Briefing Books No cost recovery is associated with the following services, which are provided to the community from Town Revenue: Parks Skate Park Hiking Playground Picnic areas Trails Bike paths Dog Park Outdoor courts Play areas Community Benefit - Core Programs These services include core or basic recreation programs and activities and events and are available for a fee and include: Large Group Park Use - Party/Picnic/Gatherings Youth Recreation & Classes Adult Recreation & Classes Senior Recreation & Classes Development and Review of Programs and Other Revenue The Town of Hadleyville is asking a team of experts to review additional programming revenue opportunities for fee services. Debt Management Debt management will provide for the protection of bond rating, the maintenance of adequate debt service reserves, compliance with debt covenant provisions and appropriate disclosure to investors, underwriters and rating agencies All debt issuance shall comply with Federal, State, and Town charter requirements and adhere to federal arbitrage regulations. The Town shall maintain an ongoing performance monitoring system of various outstanding bond indebtedness issues and utilize this monitoring system as a performance criterion for the administration of the Town's outstanding indebtedness. Town of Hadleyville Budget Briefing Books Total Revenues by Funding Source FY 2007 - 2013 Revenue General Sales Tax (1.4 Percent) Water Use Fees Federal Funds Community Development Block Grant Water Use Grant Parks & Recreation User Fees Swimming Pool Youth Programs Adult Programs Park Use Fees Senior Center 07 Actual 08 Actual 09 Actual 10 Actual 11 Projected 12 Projected 13 Projected 27,500,000 5,500,000 26,614,075 5,250,000 23,800,000 4,825,000 20,450,000 4,000,000 18,599,840 4,250,000 16,128,880 4,000,000 15,713,360 4,000,000 2,160,850 500,000 2,600,000 500,000 2,613,000 500,000 3,110,500 750,000 3,450,700 750,000 3,989,300 900,000 4,120,110 900,000 133,000 525,000 900,000 100,000 150,000 130,000 500,000 600,000 90,000 150,000 125,000 475,000 615,000 80,000 150,000 125,000 450,000 591,000 75,000 125,000 115,000 425,000 550,000 50,000 100,000 120,000 400,000 525,000 50,000 100,000 120,000 375,000 450,000 50,000 100,000 6,500,000 1,900,000 6,500,000 1,900,000 6,000,000 1,800,000 5,900,000 1,750,000 5,750,000 1,350,000 5,600,000 1,350,000 5,500,000 1,350,000 Property Taxes Sewer Garbage Police Speed Camera Patrol Parking Enforcement Liscense & Permits General Fines General Collections from Other Revenue Departments 500,000 112,000 350,000 110,000 125,000 500,000 110,000 219,800 165,580 250,000 310,000 110,000 177,500 117,910 250,000 550,000 125,000 102,890 147,880 225,000 400,000 100,000 100,000 150,000 200,000 450,000 100,000 90,000 140,000 200,000 500,000 100,000 80,000 130,000 12,500,000 8,000,000 6,000,000 5,000,000 3,500,000 3,100,000 2,800,000 Total 59,440,850 53,954,455 47,948,410 43,502,270 39,865,540 37,243,180 36,488,470 Town of Hadleyville June, 2010 Town of Hadleyville Budget Briefing Books Total Revenues And Expenditures FY 2007 - 2013 80000000 75000000 70000000 65000000 60000000 $59,440,850 55000000 $53,954,455 50000000 $47,948,410 45000000 $43,502,270 $39,865,540 40000000 $37,243,180 $36,488,470 35000000 30000000 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 Total Revenue Town of Hadleyville Budget Briefing Books Hadleyville Selected General Operating Budget (All Departments) 07 Actual Central Administration/Personnel Transportation Office of the Inspector General Office of the Mayor/Town Council Office of Budget and Finance Water and Sewerage Economic Security Bus and Fleet Services Electrical and Gas Utility Parks and Recreation Public Health Emergency Management Public Safety (Police, Fire, EMT) Community Development Public Housing Commerce Town of Hadleyville 08 Actual 09 Actual 10 Actual Budget 11 Adopted Budget 12 Projected 13 Projected 1,169,410 12,500,000 313,000 800,000 258,980 3,560,000 2,986,660 660,500 4,340,440 980,170 455,000 1,351,880 22,000,000 1,678,920 1,850,650 751,600 1,169,410 13,000,000 313,000 810,000 300,000 3,560,000 3,050,610 750,000 5,100,000 1,100,000 500,000 1,500,000 23,000,000 1,678,920 2,100,000 800,000.00 1,169,500 13,650,000 313,000 820,000 310,000 3,308,000 3,199,510 800,000 5,600,000 1,100,000 680,000 2,400,000 22,000,000 1,678,920 2,150,000 800,000.00 1,180,500 14,890,110 320,000 830,000 308,000 3,308,000 3,407,000 810,000 7,500,000 1,350,000 750,000 2,400,000 22,000,000 1,890,000 2,200,000 900,000.00 1,180,500 14,890,110 325,000 760,000 258,900 2,305,500 3,407,000 835,000 7,500,000 1,400,000 750,000 2,400,000 21,600,000 2,000,000 2,300,000 954,680.00 1,180,500 14,890,110 325,000 755,000 250,000 2,305,500 3,500,000 844,000 7,130,350 1,400,000 750,000 3,000,000 21,600,000 2,000,000 2,400,000 981,270.00 1,180,000 14,890,110 325,000 755,000 250,000 2,200,000 3,500,000 921,000 7,880,670 1,400,000 750,000 3,300,000 21,600,000 2,100,000 2,500,000 981,270.00 50,206,630.00 52,983,610.00 54,180,510.00 57,873,110.00 56,431,510.00 56,749,960.00 57,771,780.00 Budget Briefing Books Water Sewage Department 10 Actual Budget 11 Adopted Budget Water Department Operating Budget Personnel Benefits/ERE Overtime Operating Capital Outlay Travel Professional & Outside Services Contracted Services for Maintenance Contracted Services for Equipment Replacement Vehicle - Department Water Maintenance Fuel Repair City Fee for City Operations Revenue Water Use Fees 350,000.00 98,000.00 50,000.00 250,000.00 1,500,000.00 10,000.00 450,000.00 350,000.00 98,000.00 50,000.00 250,000.00 750,000.00 7,500.00 200,000.00 200,000.00 250,000.00 200,000.00 200,000.00 600,000.00 600,000.00 150,000.00 300,000.00 150,000.00 150,000.00 300,000.00 150,000.00 3,250,000.00 3,025,000.00 3,308,000.00 2,305,500.00 4,500,000.00 4,250,000.00 6,000,000.00 5,750,000.00 750,000.00 1,750,000.00 750,000.00 1,350,000.00 13,000,000.00 12,100,000.00 $19.79 plus $7.15 per 1000 cubic feet used for every two (2) months of each year with a minimum bill of $19.79 bi-monthly Sewer/Reclamation 32.00 plus $8.70 per 1000 cubic feet bi-monthly based on the amount of water billed in the winter months of December & January with minimum monthly bill of $32.00 bi-monthly Water Use Grant Garbage Capital Improvement Project Revenue Town of Hadleyville - 9,794,500.00 Budget Briefing Books Economic Security Department 10 Actual Budget 11 Adopted Budget Economic Security Department Operating Budget Personnel Benefits/ERE Overtime Operating Capital Outlay Travel Professional & Outside Services CDBG Grant Awards Revenue Community Development Block Grant Town of Hadleyville 400,000.00 112,000.00 20,000.00 100,000.00 15,000.00 10,000.00 2,750,000.00 400,000.00 112,000.00 20,000.00 100,000.00 15,000.00 10,000.00 2,750,000.00 3,407,000.00 3,407,000.00 3,000,000.00 3,000,000.00 Budget Briefing Books Capital Water Treatment Project Year 1 Water Treatment Project Personnel ERE/Benfits Professional & Outside Service Project General Contractor Excavation Concrete Build Plumbing Electrical Capital Outlay Town of Hadleyville Year 2 Year 3 Year 4 350,000.00 98,000.00 1,500,000.00 375,000.00 105,000.00 6,000,000.00 500,000.00 140,000.00 5,625,600.00 750,000.00 210,000.00 2,280,000.00 350,000.00 1,000,000.00 1,000,000.00 550,000.00 150,000.00 1,000,000.00 500,000.00 2,500,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,500,000.00 2,125,600.00 980,000.00 750,000.00 150,000.00 350,000.00 350,000.00 150,000.00 2,098,000.00 6,830,000.00 6,615,600.00 3,390,000.00 18,933,600.00 Budget Briefing Books HADLEYVILLE DEPARTMENT OF FINANCE 1245 LINCOLN BOULEVARD HADLEYVILLE, AZ 85001 HADLEYVILLE INTERDEPARTMENT MEMORANDUM October 5, 2010 TO: Budget and Finance Teams FROM: Jack Sprague, Town Manager RE: Town Financial Crisis Update The Water and Sewage Department and the Economic Security Department, who handle jobless benefits, are in desperate need of examination and adjustment. We have spent some considerable time with both of these departments, and would really like your analysis to help make some difficult decisions. The Water and Sewage Department is somewhat unique in that it is supported entirely by user fees. We have provided you with some analysis and projections of user fee revenue for both drinking water production and water reclamation and treatment. We've also provided some projected expenditures for the next 3 years, including a significant capital outlay project the town council has approved - the construction of the Hadleyville Water Treatment Plant and Reservoir. This project is politically very sensitive, and I'll be honest with you, I don't think taking it off the table is an option. However, what you may explore is a different timeline or different priorities in budgeting that can help make the project more successful given the budget constraints. We know that user fees will need increasing, but as you can imagine that isn't the most popular route we can take. We'd like to hear your recommendations for reigning in operating costs as much as possible. The Economic Security Department handles quite a few federal programs for the town in addition to locally-funded programs. We have some initial projects for federal resources that we see increasing over time and perhaps some opportunities for new federal revenue in the very near future. Specifically, we'd like you to see if operating costs can be brought in line with revenues while maintaining a high level of service and providing as much service as possible through these additional federal resources. Be as specific as possible in your recommendations. Your Budget Briefing Book will have more detail on the current state of both of these department's operating budgets and the key decision points that the council will need from your recommendations. As you develop the specific recommendations for these two departments, my hope is that it will help inform your larger decisions surrounding the town's overall budget