AGENDA #1a

BUDGET WORKING PAPER

TO:                  W. Calvin Horton, Town Manager

FROM:               James M. Baker, Finance Director

SUBJECT:       Summary Information on Major Changes in Recommended Budget for 2001-2002

DATE:            May 30, 2001

The attached tables provide, by Department and Division, a summary of the major changes or increases between the original 2000-2001 base budget and the Manager’s Recommended Budget for 2001-2002.  The tables show the dollar and percentage changes in each departmental budget and the major components of the proposed changes.

As discussed at the Council’s work session on May 3, the percentage changes in the budgets for the General Fund departments and divisions vary greatly due partially to The recommended change for 2001-2002 in accounting for vehicle fleet maintenance costs. For next year, these costs are distributed to the various user departments in the General Fund to a line item called “Fleet Use Charges”.  In the original 2000-2001 budget, these costs are consolidated in the Fleet Maintenance Division of the Public Works Department.  For the 2001-2002, the redistributed costs total about $825,000 for the General Fund Departments using vehicles, and the Fleet Maintenance Division budget in the Public Works Department totals zero.

The redistribution of these costs results in a significant increase in the various departmental budgets, both in dollar amount and percentage.  For example, the recommended Police Department budget for 2001-2002 includes a new budget line item of $201,017 for Fleet Use Charges, reflecting the cost of vehicular maintenance and repair for the department. This change results in a significant dollar and percentage increase in the Police Department budget compared to the current year.  The redistributions result in similar changes in the dollar and percentages amount for all other departments in the General Fund using vehicles.

The other primary increases in the departmental budgets are in the personnel categories, normally showing the full year costs of the market and merit pay adjustments funded for about eight and one-half months in the current year, and increases in worker’s compensation and medical insurance cost totaling about $200,000 in the General Fund for 2001-2002. 

For the Transportation Fund, the primary changes, in addition to personnel costs increases, include the service changes requested by the University and Carrboro, additional capital matching funds for new buses, the cost of providing service to the annexed areas, and additional costs relating to the implementation of fare-free service beginning in January, 2002.

I am available to provide additional explanations or answer any questions concerning the attached information.