From: Alison Zelms
Rick -

Every email pertaining to public matters that you, or any other member
of the public sends or is sent to/by the City is a public document.

Thank you

Alison


>>> J Rick Normand 2/12/2009 8:44 PM
>>>
Alison,
 
  Thank you for your clarifications enumerated below. Since you've
archived to the public records both my original letter entitled
"Council: Relative to Staff Burden, You're Asking the Wrong
Question!" and your clarification remarks relative thereto, would you have any
objection, or would the City according to Mike Goimarac, to
dissemination of both documents (conjoined) together to the
public-at-large? Thank you so much.
 
J. Rick Normand

--- On Thu, 2/12/09, Alison Zelms wrote:

Date: Thursday, February 12, 2009, 8:38 AM

Mayor Council and Committee Members:
 
First, I appreciate the time the committee members have put into and
backgrounds they bring to their efforts. 
 
However, let me clarify what staff spends time on (far in excess of 80
to 100 hours) when preparing the budget for the City Council. Let me make it
very clear, it will never take less than one hour to complete the budget.
One tool will not change the expenditure side forecasting that cannot go
overlooked and that is required for us to accurately project our needs for future
years and what areas can or should be cut if those outweigh our revenues.  In
addition we meet with multiple outside entities that provide services that the City
might otherwise provide in-house to work through them requests and operations
among other things. 
 
The overwhelming bulk of the time it takes us to present a budget is generally
not in forecasting - although our revenue numbers have been accurate
enough over the last ten years to add annually to our reserve, which is over $30
million for all funds.   
 
The model that Professor Ancis presented is based on regression methodology and
is a "what if' scenario that may help to show the effects of changes to
specific indicators on our local economy and therefore local revenue collection.

It may also be helpful in proving out our numbers or changing some of our
numbers, and more specifically for help in decision making and contingency
planning.  It was never intended to replace other budget preparation
or projection needs.  We will still rely on the state's budget forecast
tempered by our own analysis of the economic situation.  Perhaps I
wasn't clear in my explanation to the committee about our use of State and
League numbers.  We use those as a start for our current year base (for state
shared revenue only) once finalized by the State and then we project out based
on the revenue distribution formulas, current, and future economic
expectations.  In order to start up the system, staff has been working with the committee
through Professor Roberto Ancis and will need to provide reliable sources for
a multitude of data points, and will also have to ensure that those are
updated and remain valid in the future.   
 
Meeting bi-weekly to discuss future business models, regression analysis,
rehash the work of the Chamber of Commerce for marketing, and question
our current debt - which is $71.8 million, not $76, does not help staff to
present an annual budget to the Council. 
 
The City is not servicing $6.5 million of debt from the reserve and our
underwriter is fully aware of that.  The reserve is not considered in our
coverage levels, that would not be allowed, nor is the entire 3-cent
sales tax.

The debt the City has is not a new issue and we have more coverage and reserve
today than we did with the same amount of debt ten years ago.

Our financial position is stronger than most Cities in the state.  That is not
to say we don't have challenges - just like every other City.
 
At least since I arrived at the City, and I believe before then, staff has
pointed out that our expenditures were starting to outweigh revenues
and that Council would have to either increase revenues or control expenditures
- regardless of the current economic situation.

Alison Zelms
Interim City Manager
City of Sedona