AGENDA #1

Wednesday, February 25, 2004

Finance Department

Initial Budget Presentation to the Mayor and Town Council

Fiscal Year 2004-2005

I. Mission Statement

The primary mission of the Finance Department is to provide budgetary and financial oversight and direction to assist the Town in determining the best possible use of its assets.

II. Brief Services Description

· Efficiently provide and maintain accurate and informative financial records in a manner supported by the Town’s independent auditors.

· Provide centralized revenue collection services for all Departments and collection of taxes for Town and County citizens.

· Provide support for the budget process, including an accurate and informative budget document and estimation of Town revenues.

· Oversee Town centralized purchasing and contract processes.

· Monitor the Town’s fiscal position and provide for appropriate investments and borrowings.

· Provide payroll and accounts payable services.

· Provide assistance and coordination of debt management and planning.

III. Departmental Revenue Estimates

The Finance Department has no revenues that offset operating costs.

IV. Departmental Base Budget Cost Estimates

CATEGORY	2003-2004 Original Budget	Requested 2004-2005 Budget
Personnel	678,044	688,488
Operations	238,360	270,519
Capital Equipment	15,000	-
TOTAL	931,404	959,007

Key Budget Issues

· An increase of about $4,000 over the current budget of $98,202 for the property tax collection contracts with Orange and Durham counties (costs determined by formula which includes the proportional tax levies and number of bills for each jurisdiction and the overall costs of collection by each county).  Tax services received from our primary contract with Orange County are a very efficient use of the taxpayer’s money.

· An increase of about $3,150 in banking services and fees.  Normally these costs are offset by interest earnings on available bank balances; however account balance interest earnings have decreased to below 2% in the current economic environment, and are no longer available to help offset standard monthly account charges and fees.

· An increase of about $9,500 in the annual maintenance support charge for IBM hardware and financial system computer software support charges.

· An increase in miscellaneous contracted services of about $15,000 for the completion of an actuarial study of other post-employment benefits (OPEB) to be required by the Governmental Accounting Standards Board (GASB).  This new standard would require the Town to accrue the cost of OPEB benefits as they are earned by employees.  This study would have to be done once every two years at a cost of approximately $15,000 per study.

· An increase of about $2,830 for classes and training necessary for staff to maintain CPA certifications and to receive essential financial software update training.

For most other operating costs, the requested line item amounts are the same as in the current base budget.

V. Programs Going Well

· Budget preparation and meeting all financial reporting requirements in a timely manner.

· Purchasing and contract oversight, including the implementation of the purchasing card system.

· Borrowing and debt management.

· Billing and collection of Town revenues in a timely manner.

VI. Programs That Could Be Improved

· Acceptance of credit card payments for Town services.

· Redesign of invoices and licenses for garbage, compactor, parking and privilege and rental license billings.

VII. Proposed Additions or Reductions

· Receipt of credit card payments for all Town services.  In addition to the acceptance of credit cards for parking services, this proposed addition would allow citizens to pay for permits, fees and other charges by credit card.  This service could be offered at a cost of approximately $17,000.