Budget by Service Areas

 

Introduction

 

When we present budget information, we usually aggregate costs by department and by division within the larger departments.  This manner of presentation is appropriate for preparing line item budgets as required by accounting standards.  When Department Heads have presented their budgets to the Council in past years, they generally have discussed their budgets in terms of programs or services.  The Council has requested and we have provided additional information about the costs and revenues associated with particular programs, such as residential refuse collection.

 

We thought that it might be informative to present the Town budget in a format that is summarized by type of service, rather than line items within departments.  A budget by service area allows us to combine costs when more than one department participates in providing a particular service.  Because of the somewhat arbitrary approach to incorporating overhead costs in a budget by type of service, budgeting by service area is not a practical way to examine costs on a routine basis, but it is useful when looking at the Town’s overall package of services. 

 

Since some services, such as parking, generate revenue while others do not, we examined the costs of Town services overall and also as net costs after deducting the revenues that are received as a direct result of the services offered.  For example, fixed-route bus service is the Town’s most costly service, but when offsetting revenues are taken into account, fixed-route bus services drops to the lower half of the list of services by net cost (cost after revenues are taken into account) and police patrol shows as the most costly service.

 

Background

 

In order to show the current year’s budget by service, we asked departments to summarize their budgets by type of service.  The departments allocated both their personnel and operating costs by the service areas selected.  Capital improvements projects and grants were not included in these calculations, except as noted. 

 

In preparing the budgets by service area, we included overhead costs within the external service-providing departments.  We did not apply the overhead costs for services provided outside those departments.  We left the following Internal Service Departments unallocated:

 

Discussion

 

The 2004-05 budget for services, excluding grants (except as noted) and multi-year projects, totals $56,221,131.  We looked at the relative cost of services in several different ways. 

 

Comparison of the Cost of Services Town-Wide

 

In addition to looking at Town services by type of service within each department, it is beneficial to compare the costs of services Town-wide.  The chart below shows the 10 most costly services we provide in descending order by cost.  We include both the total budget in 2004-05 for each service and the percentage of the $56 million for all services excluding multi-year funded projects and grants (except as noted) that each service represents.

 

The lists shows that fixed route bus service ($9,344,761) is the Town’s most costly service, representing about 17% of Town budgets, excluding capital improvements and most grants.  Not surprisingly, standard police patrol ($6,800,010) and emergency fire response ($4,181,937) are the next two most costly services.  Residential refuse collection ($3,175,624) and stormwater services ($2,387,220) follow next.  Filling out the top 10 services are: community police services, grounds maintenance (including parks maintenance) and landscaping, street maintenance, EZ Rider/Shared Ride services, and public housing.  Unlike the other services, public housing includes federal grants as a major funding source. 

 

Since 2004-05 is the first year that EZ Rider/Shared Ride services have been separated from fixed route bus service, the budget may need reallocation between the two services.  We believe that budget reallocation would not materially change the anticipated costs.  For a complete list of services arranged in order of cost, see Attachment 2.

 

How we spend our budget serves as a measure of Chapel Hill community values.  The Town’s fare-free bus system provides accessible transportation, reduces traffic congestion, and provides improved air quality for Town residents.  The system is an example of how the University of North Carolina at Chapel Hill, the Town of Carrboro and the Town of Chapel Hill have successfully worked together to create a coordinated transit system.  EZ rider and shared ride services also rank in the top 10 services and provide transportation after regular hours, to points not serviced by regular bus service and to passengers with limited mobility, further showing our commitment to transportation services for all.

 

Both routine police patrol and special community police services rank in the top 10 services offered by the Town.  We value a safe, secure and civil environment provided by these services.  Fire protection, another top 10 service, further supports the community commitment to a safe environment.

 

Residential refuse collection is a major service, supported through general revenues rather than by fees.  Grounds maintenance and landscaping are also in the top 10 services.  Together these services help provide a clean and attractive municipal environment.  These services support the desire for an attractive environment with high quality transportation services.  In addition to these services, the Public Works Department provides street maintenance to preserve the Town’s investment in its infrastructure.

 

Stormwater services round out the top 10 list.  Through these services we contribute to water quality and minimize flooding and erosion.

 

Comparison of the Cost of Services Town-Wide, Net of Direct Revenues

 

In addition to looking at costs within service areas and by total cost Town-wide, we looked at the cost of services less direct revenues.  When the list of the Town’s top services is ordered by cost after direct revenues (shown below, exclusive of internal service departments), the list reinforces the community values as supported by the list of services by cost only.  Police services and fire emergency services remain at or near the top of the list.  Police services now include investigations, as well as patrol and community services.  Grounds maintenance and landscaping and stormwater management also remain on the list.

 

New items on the rearranged list include contributions to agencies.  The contributions support a variety of human services, cultural and leisure services and affordable housing.  The variety of services shows the support for many facets of a rich community life.  Finally, the list includes long range projects.  We value the future of our community, and that value is expressed in our support for planning and community involvement.

 

 

Not shown on the top 10 list are two programs of interest: both parking meters and Tar Heel Express have revenues that exceed costs including departmental overhead.

 

For the complete list of services showing costs after deducting associated direct revenues, see Attachment 3.

 

CONCLUSION

 

In conclusion, the list of the Town’s most costly services (with or without offsetting direct revenues) serves as a measure of our community values.  The community highly values a transportation system that serves the community efficiently and effectively, improving transportation, while reducing traffic.  Police and fire protection are highly valued as well.  The community supports maintenance of streets, grounds, landscaping and residential refuse collection.  In addition, we support a variety of community values through public housing and contributions to agencies.  Concern for water quality and the environment is shown through the investment in stormwater fees.  Care for the long-term needs of the community is shown through the commitment to long-range projects and planning.

 

 

ATTACHMENTS

 

  1. Attachment 1 – Budget by Service Area Within Departments (p. 6).
  2. Attachment 2 – Budgeted Costs by Service Area (p. 11).
  3. Attachment 3 – Budgeted Costs by Service Area, Net of Revenues (p. 12).