Provide clear direction on your thoughts that impact all aspects of the proposed FY21 budget, as presented.  Budget approval is scheduled for June 22, 2021.Staff recommends

    
The proposed budget was developed keeping the City Council adopted goals as a primary guide, along with the adopted five-year Capital Improvement Plan, Equipment Replacement Plan and Technology Replacement Plan.  The City’s highest priorities are to: Improve the safety of Billings; improve service delivery, cost efficiency, and return on investment through the principles of Lean Six Sigma; complete project re-code; continue with the airport terminal reconstruction; continue with the west-end reservoir and water plant and to improve communication with our citizens.  Each of these high priorities are positively impacted by the proposed FY21 budget.  All aspects of the budget have been presented to the Council over the past month.  The following modification are up for your consideration as a result of updated information and/or feedback received during the budget discussions.
 
The following adjustments to the FY21 Proposed budget, are recommended for consideration by City Council:

1. Lean Six Implementation – All direct personnel costs will be reimbursed back to the general fund by each department that is assigned service review.  The net effect of this change is to offset approx. $430,000 in personnel, maintenance and operational expenses back to the general fund.  The cost to each department will be offset by a minimum of a dollar for dollar return on investment within the first year.  In future years we expect the ROI to exceed $1 to $1.
2. A reduction in liability insurance of $300,000. We have learned what the actual premium will be for FY21 and can reduce the budgeted amount.
3. A $300,000 reduction in the airport budget (typo – the item was duplicated).
4. Reduction in fuel expense as a result of decrease in fuel prices. We’re recommending a reduction of $149,000 to account for the reduced fuel prices we’re experiencing. The impacted funds include Public Safety, Street & Traffic, Solid Waste, and Park District One
5. While a Public Information Officer is an important investment needed by the City, however it is not likely that this can be implemented in a short timeline. As a result, the City Administrator is recommending only budgeting 50% for FY21, with the expectation that the position will not be filled until January of 2021.
6. Shift Recreation program expenses back to the General Fund. It is recommended that Park District One not be used for Recreation Program costs. As a result of this decision, $1,330,000 in expenses should be shifted from Park District One back into the General Fund, along with Recreation Program Revenue of $371,000. This will move the entire Recreation Programming and Parks & Rec Admin back into the General Fund. In future years, a charge to Park District One will be included to reimburse the General Fund for eligible Administration costs. This will allow for the annual proposed Park District One assessment to be decreased from $87.38 to $71.21, for the median home.

As defined by Council

The policy discussion will guide the adoption of the FY21 Budget.  The proposed budget totals $318,642,348.