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kFA60wfsE V );Ii= Memo To: Bill M linen, City Manager a.ger From: Chris Miller, Finance Director Date: January 28, 2009 Ike: 2009 Budget Reductlons Related to the foss of MVHC You recently ask d the Department Heads to identify potential 'budget cuts in recognition that the City is likely to lose approximately $400,000 annually in general - purpose state aid; also known as Market et value Homestead Credit reimbursement or MVl C.. Based on a. formula that distributes the impact of the loss of l VHC on a. proportionate basis of each division's operation budget, the Finance Department would have to accommodate the following ving budget reductions to the 2009 Budget; Finance/Accounting - $16,261 Central Services - $2,254 *% In u.ra ce - $2;. Based on a cursory review, it is proposed that the reductions would cone roar; • Reduced. color printing and copying f r City documents Use of Insurance Fund reserves A 0:25 FTE reduction in the Finance/Accounting area The proposed budget reductions and subsequent impacts are discussed in greater detail below. Central Services Division The Central Services division reduction of $2,254 can be accommodated by a reduction in the amount of printing costs — specifically* a 50% reduction in the amount of color copies that are typically made over the course of the year. The savings would come from reduced color toner purchases and maintenance charges which are tied directly to the number of copies made. Color toner and copies cost 5 times as much as black and white copies do. This would likely have the gr eatest impact on publications produced by the Parks & Recreation Department, but would also have some i. pact on other departments as well. Insurance Division Theln-surance Services division reduction. of $2, can be accommodated by a reduction in the General Fund's share of the. City's property /liability coverage. But becau- se the City 7 insurance pr emiums are fixed for 2009, this will require the use of reserves held in the City's Insurance Fund to offset this reduction.