ADMINISTRATION - Joe Huss, Finance Director
Title
ADOPT 2021 COMMUNICATIONS FUND BUDGET
Background
Staff presented a proposed 2021 Communications Fund Budget for discussion at the October 12, 2020 Council Workshop. Council reviewed the proposed budget and indicated their conceptual approval of the budget presented. A summary of the budget is as follows:
The city’s Communications Fund accounts for revenue received from cable franchise fees paid by cable television customers. The current cable service provider is Comcast. Cable fees are passed through to the North Metro Telecommunications Commission, which is the regulatory body that oversees the cable franchise in our area. The commission is made up of elected officials from each of its seven member cities. The commission adopts an annual budget. Staff anticipates that net franchise fee revenue distributed to Blaine in 2021 will total $221,400 - the same as that received in 2020.
The proposed 2021 operating budget is $257,120. The production and mailing of six issues of the CityConnect, and two issues of the BizConnect newsletters are budgeted at $83,500. Expenses for the operation/maintenance of the Legistar system are budgeted for $29,700. Services including media monitoring and analytics, a survey platform, Zoom remote meeting, and other services account for $23,100 in budgeted expenses. The administrative service charge has been increased by $22,100 to $115,500, and allocated facility charges total $620.
The recently begun initiative to have North Metro Television staff produce and broadcast City Council meetings will continue into 2021, and is expected to result in roughly $17,000 in savings to the budget. Personal service expenses of $1,000 are budgeted in the event that city staff are needed to fill in on occasion.
Capital equipment expenses of $40,000 are programmed in 2021 to install technology updates in two conference rooms. This work will be done in conjunction with the City Hall expansion project.
The full 2021 Communications Fund Budget totals $297,120, which will result in a fund balance decrease of $70,820. The fund is expected to end 2021 with a fund balance reserve of $182,000.
Staff is developing a model for future budget years through 2025 based on the terms of the current franchise agreement. Since 2017, the commission has designated $400,000 of franchise fees to be returned to the member cities. At the same time, Blaine’s share of that has leveled off to roughly 55.3%. Staff is projecting modest increases in franchise fees through 2025, but will continue to closely monitor revenue. If budget adjustments are required, the City will be in the position to make the adjustments without affecting operations. Given the anticipated slow/no growth in revenue, the 5-year model indicates that the fund’s reserves will be near the targeted minimum by the end of 2025. For now, there are sufficient reserves to allow for a strategic adjustment to future budgets if revenue models remain unchanged.
Recommendation
By motion, adopt the attached resolution
Body
WHEREAS, the proposed Communications Fund Budget for the fiscal year commencing January 1, 2021 has been prepared by the City Manager; and
WHEREAS, the City Council has examined, studied and reviewed said proposed Communications Fund Budget; and
WHEREAS, the City Council has, after due consideration and deliberation, made such amendments and adjustments in the proposed Communications Fund Budget as they consider necessary, desirable or expedient;
NOW, THEREFORE, BE IT RESOLVED, that the Blaine City Council of the City of Blaine as follows:
1. That the proposed Budget for the Communications Fund attached hereto is approved.
2. That the 2021 appropriations attached hereto are approved.
3. That the 2021 funding sources identified and attached hereto are approved.
That the City Manager is authorized and directed to implement and to administer, within the budgetary funding limits and within adopted City policy and relevant State and City laws and regulations, said approved Communications Fund Budget.
PASSED by the City Council of the City of Blaine this 2nd day of November, 2020