2012-09-04 CC Agenda - PRESENTATION - B1 - BudgetG1OV Y
First Hearing for
FY 2012-2013 Operating
Budget
FY 2012-2013 Preliminary Budget
Preparation
,I
Strategic Planning Sessions
June zest
August 16th
2
Assumptions for 12/13 Preliminary Budget
Revenues:
Business License Tax — $200,000 net increase
over yearend estimates; 1% Growth due to
annual CPI change;
Property Tax — $117,000 increase over yearend
estimates; z% Growth
Assumptions for 12/13 Preliminary Budget
Revenues:
� Transient Occupancy Tax -(TOT)- — $450,000
increase over yearend estimates, or 10%;
increase attributed to new hotel
* Cogenerated Tax - $450,000 in additional
revenue over yearend estimates from new
operations;
4
Assumptions for 12/13 Preliminary Budget'
Revenues:
Sales Tax.- $1,624,Ooo decrease; lo%
decrease from 2012 estimated
yearend; zo% decrease from FY 2011
actuals.
Charges for Services -$1oo,qoo
decrease from yearend estimates, or
5�0
5
Assumptions for 12/13 Preliminary Budget
Revenues:
* Interest on Investments - $85,000
decrease from yearend estimates
* Utility Users'Tax - no growth.
*All other revenues remain flat or have
very little growth compared to
yearend estimates
well Q09,
Qa. 6
Q)Jy\ pL`J
ac
$450,000
$450,
o�
41
1
Lo°
FY 2010-2011 Actual 71 FY 2011-2012 Year-end Estimate
($824,700)
($100,900)
($85,000)
Sao \`�� wary
Q-
o�
�a
1�
FY 2012-2013 Preliminary 7
Assumptions for 12f13 Preliminary Budget
Expenditures:
*Salaries — increase of $458,00o due to
step increases and longevity/educational
incentive premiums; no growth in base
salaries
California Public Em-plovees' Retirement
System(CalPERS) Rate Increases —
$6zo0oo
Safety Rate Increase: $475,900
Misc Group Rate Increase: $144,200
0
3 PreliminaaAryvmrurer'et �
Expenditures (cont'd):
* Other Post-EmDl
ment Benefits (OPEB
* Increase due to updated valuation -
$z39,000 (Using two-year smoothing).
* Included in the Preliminary Budget is a
scheduled drawdown of $1,000,000
* Health Benefits — 3.5% or $1oo,000
0
PkkS.,WqqPtions for 12/13 Preliminary
Budget Expenditures (cont'd):
* Non -Personnel Costs -Total decrease of
$116,500 or 1%
This category has been reduced by 17%,
approx. $2.1 million, when compared to 2009
actuals.
* Transfers to other funds - decrease of $169,500
* Decrease in Transfer to Facilities
Maintenance - $150,000
* Decrease in Transfers to Community
Development Block Grant Fund — Due to
decrease in that funds' expenditures
,o
10
Assumptions for 12J13 Preliminary Budget
Expenditures (cont'd):
� Equipment Replacement Charles
* Funded at 50% or $730,150
* ESUSD Funding -
$250,000 Cash Contribution
* $ 8o,000 Crossing Guard Services
* $698,000 in In -Kind Services
* In total, the City contributes an estimated
$1,028,000 to ESUSD annually.
LADDER TRUCK -ADDITIONAL
FUNDING NEEDED: $ 560,000
FUND FIBER OPTICS PROJECT -
BORROWING NEEDED: 370,000
TOTAL ADDITIONAL FUNDING
NEEDED: $ 930,000
The Fiber Optics Project borrowing has a payback of 3 years.
FISCAL
FROM TO IMPACT FUNDING
Administrative General
Office Specialist II Specialist $3,000 Fund
Administrative
Office Specialist II Specialist $ 3,000 RSI Fund
13
FROM
Office Specialist II
Senior Management
Analyst
Records Technician
IN
Human Resources Assistant
Senior Human Resources
14
Analyst
Deputy City Clerk I
* Reviewed Revenue & Expenditure assumptions
used to build the FY 2012-2013 General Fund
Budget;
* Next:
* Update of Yearend Projections
* Presentation of Fund Balance
* Treasurer's Report
15
GENERAL FUND
ADOPTED
PROJECTED
YEAREND
FY 11/12
VARIANCE
Revenue
$51,674,OOO
49P781,739
(l,892,261)
Expenditures
51,674,000
51,674,000
0
Projected Yearend
Deficit
$(1)892,261)
16
vas a e Fund Balance:
9/30/12 Projected Deficit:
9/30/12 Unreserved, Undesignated Fund Balance:
`This is what the City refers to as our I Reserve')
Proposed Expenditures 9/30/13:
Fund Balance Reserve Funded Level:
Required Reserve:
Under Reserve:
$ 10,072,509
1,892y261
81180124
52,909,902
17
8�99083
(814,435)
17
FY 2011-2012 PROJECTED SHORTFALL: $ (814Y435)
IDENTIFIED POTENTIAL COST SAVINGS:
Supplies
Service Charges
TOTAL IDENTIFIED POTENTIAL COST SAVINGS:
SAVINGS FROM UNFILLED VACANCIES (2):
REDUCED SHORTFALL:
44,000
71 8Y789
7622789
51)646
$ 0
18
Preliminary General Fund Revenue and
Expenditures - FY 2012J2013
General Fund Budget
Revenues, Net of Transfers
Transfers In
Total General Fund Revenues
Total General Fund Expenditures
Deficit
19
Preliminary
FY 2012/2013
$47,600,000
400,000
$A000�000
$52,910,150
$ OP910050)
Preliminary General Fund Revenue and
Expenditures - FY 2011/2012
General Fund Deficit: $ (4,910,150)
Decrease in Revenues:
Sales Tax Revenue Loss:
Reduction in Investment Income:
Decrease in Electric Utility Tax:
Total Reductions to Revenues:
Increase in Personnel Costs:
GENERAL FUND BUDGET DEFICIT:
20
212001000
800,000
300,000
3Y300,000
1�610050
$ 4410,150
Budget Deficit Solutions
General Fund Deficit:
Budget Balancing Options:
Transfers In:
Balance from Economic Uncertainty:
Designation to Maintain/Repair Aquatics Facility:
Designation for City Hall Improvements:
Capital Improvements Fund Balance:
Total Transfers In:
Cancel Funding for Equipment Replacement Charges
Total of Budget Balancing Options:
$ (4,910050)
739,000
525050
314,280
2,601,570
V80,000
730,150
$ 4,910,150
21
c,enerai tuna tsuaget r Y 2012/2013
Revenues, Net of Transfers:
Operating Transfers In
One -Time Transfers In
Total General Fund Revenues
Preliminary Expenditures:
Equipment Replacement Charges
Other Miscellaneous Adjustments
Total General Fund Expenditures
Deficit
$47,61 2,300
400,000
4,180,000
Py192300
$52�910300
(730,150)
12050
52092300
22 $ 0
$4,580,000
Occupancy
$5,100,000 10%
$5,940,100
11%
Property Taxes
$6,000,000 12%
23
Business License
$10,306,800
Sales Tax
Cogenerated
$6,275,000 12;
o°
00 0
(Oo 0
o° o
o°
�o 0
54,504,867
49,887,290
48,181,739
47,612,300
FY 2oo8- FY 2009- FY 2010- FY 2011-2012 FY 2012-
2oog Actual 2010 Actual 2011 Actual Year-end 2013
24 Estimate Preliminary
FIL9W-ear Expenditure Reduction -
$10.5 million
o°
00 0
G° o
o°
°o 0
o°
011
09111
0
N�
z87
$52,1192300
10, 948, 2
15
8 31
�I
0
X
Total Nonpersonnel
Total Benefits
Total Salaries
-I I I I I I
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 25
(in millions)
Revenues:
Expend:
Structura
Def icit;
3-Year Forecast
2013
2014
2015
2oi6
$ 48,000
$ 48,960
$ 49,939
$ 50,938
$ 52,910
$ 54,497
$ 56,132
$ 57,816
$ (4,,910)$
(5, 5 3 7)
$ (6,.19 3)
$ (6, 8 7 8)
26
Balances @ 9130/2012
Deficit Spend 2012/2013
Balance @ 9/30/2013
Transfers 2012/2013:
Economic Uncertainty Fund
Transfer
Capital Funds Transfer
Balance @ 9/30/13 after transfers in
Projected 3 year Deficit Spending 201312o16
LI lull is UQIQI ICC
$8)995,000
-$4,18o,000
$4,815,000
VCI ICII I UI ICI
$0
-$4,18o,000
-$4,18o,000
$739,000 $739,000
$3,441,000 $3,441,000
$8,995,000 $0
-$18,6o8,000-$18,6o8,000
$38,000,000
-$4,18o,000
$33,820,000
$0
$0
$33,820,000
-$18,6o8,000
Estimated balances at 9130/2o16-$9,613,000-$18,6o8,000 $15,212,000
27
Available Fund Balances:
Transfer from Capital Projects
Fund(exhausted)
Transfer from Equiment replacement
Fund(exhausted)
Purchase of Ladder Truck
Remaining Deficit:
Loan from Enterprise Water & Sewer funds
(Fund balance of $4,9oo,000 remaining)
Estimated balances at 9/3o/16
after transfers in
28
General Fund
Ending Balance
$253,744
$6,152,270
17% reserve
Deficit
$253,744
$6,152,270
-$1)200)000-$1,200)000
Investable
Funds
$0
$0
$0
$5,2o6,014 $5,2o6,014 $O
-$4,406,986-$13,401,986 $15,212,000
$4,406,986 $4,406,986 $0
$o -$8,995,000 $15,2122000
Transient Occupancy Tax: Currently, rate is 8%
* U UT, currently set at z & 3%
What is the average for the area?
29
14%
12%
10%
8%
6%
4%
2%
0%
140/6 14% 140/6 L .. �.......
iNoM
c4�` �Oa dos ��o sa'r T°rr �''9i° yay? y°i �diL <'Os
o9G� `�~�:' 9e�a �9a oaa° a'Lio cease �°o Ora �Osa aaa% �9e
ash oa ash O°
c4�` �Oa dos ��o sa'r T°rr �''9i° yay? y°i �diL <'Os
o9G� `�~�:' 9e�a �9a oaa° a'Lio cease �°o Ora �Osa aaa% �9e
ash oa ash O°
Current Transient Occupancy Tax rate is 8%
A 1% increase (for a total 9% tax rate) _ $637,500
A 2% increase (for a total lo% tax rate) _ $1,275,000
* Average for surrounding areas is 12%
31
110
ao'O �fa� �9,��y�°� �i°sa ry'Qd/ sy�9i
N ry 7e
y
* tiectric zsc uas u u i , currentiy set at 3ro:
* A1% increase (fora
total
4%tax
rate)
= $1,582,000
* A 2% increase (for a
total
5%
tax rate)
=$3,164,000
* Water U UT, currently set at 3%:
* A 1% increase (for
a
total
4%
tax
rate)
= $116Y700
* A 2% increase (for a
total
5% tax
rate)
=$233,300
Average for surrounding areas is 7%
33
* Telephone Tax, currently set at z%:
= A 1% increase (for a
total
3% tax
rate)
=$338,950
- A 2% increase (for a
total
4% tax
rate)
=$677,900
Cm
Total 1% increase = $2,675000
Total z% increase = $5Y350YOOO
35
INTERNAL SERVICE F
EQUIPMENT REPLACEMENT
GENERAL LIABILITY FUND
WORKERS' COMPENSATION FUND
ENTERPRISE FUNDS
* WATER FUND
SEWER FUND
GOLF COURSE FUND
36
* Used to accumulate and allocate costs internally among the
City's various functions.
* Equipment Replacement Fund:
* Enough accumulated fund balance to sustain budgeted
expenditures and allow for the purchases of critical items.
* Remaining items' useful lives will be extended.
The General Liability and Workers' Compensation Funds have
been funded at the actuarially determined expected rate.
37
Funds where the City charges a fee to customers to
cover all or most of the costs of services it provides.
* The budgets in the Water and Sewer Funds are in
balance.
Golf Course Fund:
is reporting a slight deficit of $19,000.
This deficit includes a loan repayment to the General Fund of
$Z00,000.
38
*Council Direction to finalize the FY
2012-2013 Operating Budget.
*Continue the Public Hearing to
September 18, 2012
39