2019-08-20 CC Agenda Packet - ITEM #14 - PRESENTATION - Proposed FY 2019-20 BudgetAugust 20, 2019
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• Review the Proposed FY 2019-20 General Fund Budget
• Review the Proposed FY 2019-20 City-wide Budget (Special Revenue Funds, Internal Service
Funds, Enterprise Funds, Debt Service Fund & CIP)
• Review of City Reserves & Recommendation on General Fund Reserve Level
• Recommendation on addressing unfunded pension liabilities
• Discussion on potential revenue enhancements
• Wrap Up and Next Steps
Beginning Unassigned Fund Balance at October 1, 2018 (based on FY 2017-18
audited CAFR) $2190649124
Plus revised year-end estimated revenues for FY 2018-19 751559,271
Less revised estimated year-end expenditures for FY 2018-19 (includes transfers out) (78,140,000)
eginning Fund Balance at October 1, 2019 18,483,395
lus estimated revenues for FY 2019-20 76,7101208
ess estimated expenditures for FY 2019-20 (77,836,430)
stimated Ending Unassigned Fund Balance at September 30, 2020 17,357,173
7% General Fund Reserve 13,232,193
Iver/(Under) reserve policy at September 30, 2020 4,124,980
quivalent to 2% of General Fund reserves (transfer funds to the Pension Trust) (1,557,000)
ransient Occupancy Tax
usiness License Tax
ales Tax
roperty Taxes
tility Users Taxes
RA/Chevron
harges for Services
ranchise Tax
ether Revenues
tergovernmental
Cher Licenses & Permits
terest & Rentals
es & Forfeitures
sfers in
15,20000
olice Department
12,510,000
Fire Department
11150000
Public Works
9,416,500
Recreation & Parks
6,45000
on -department
50000
Planning & Building Safety
51298,845
Information Systems
312001000
City Manager
216181995
Library
118511490
Finance
1,6881358
Human Resources
8241000
City Clerk
4121020
City Attorney
City Treasurer
Fle'SINIMOV
City Council
140,000
Transfers out to CIP
23,203,532
16,627,696
8,054,027
7,259,130
5,736,964
3,201,731
2,782,398
2,648,200
2,496,775
2,429,945
1,430,937
722,838
585,450
345,375
311,432
2,470,00
Total General Fund (GF) personnel costs of $62.2 million or 80% of
the GF proposed budget
An increase of $3.4 million from the prior year
The $62.2 million consists of:
$31.2 million in salaries
$12.8 million in pension costs
$11.5 million in benefits
$3.0 million in worker's comp
$2.2 million in O.T.
$1.5 million in payroll taxes
Fiscal Year General Fund Reserve Economic Uncertainty Reserve Total
JL
4Mm
FY 2015-16
FY 2017-18
FY 2018-19
FY 2019-20
$12,098,641 (19%) $1,250,000 $13,348,641
$12,087,064 (18%) $1,500,000 $13,587,064
$12,459,038 (18%) $2,000,000 $14,459,038
$131742,619 (19%) $2,0001000 $151742,619
$13,232,193 (17%) $2,000,000 $15,232,193
Fund/Classification
Special Revenue Funds
Traffic Safety 104)
State Gas Tax (106)
Asset Forfeiture (109)
Measure "R" (110)
CDBG (Fund 111)
Proposition "A" (112)
Proposition "C" (114)
Air Pollution Reduction (AQMD) (115)
TDA Article #3 - SB 821/Bikeway (118)
Citizens Option for Public Safety (COPS)
(120)
Public Safety Augmentation (Fund 123)
Federal Grants (124)
SubTotal Special Revenue Funds
Proposed
Revenues
FY 2019-2020
r1or
Proposed Operating Proposed Capital
Budget Budget
FY 2019-2020 FY 2019-2020
Proposed
Budget
FY 2019-2020
$ 30,682
$ 140,000 $
-
$ 140,000
384,804
106,681
300,000
406,681
-
375,500
370,000
745,500
205,484
-
563,866
563,866
51,000
-
152,556
152,556
330,108
375,680
-
375,680
273,294
107,053
240,000
347,053
15,810
63,000
-
63,000
50,000
11,530
-
-
50,000
103,530
-
175,000
175,000
25,500
100,000
-
100,000
233,748
150,000
-
150,000
$ 1,666,000
$ 11432,590 $
11851,422
$ 3,284,012
Fund/Classification
Special Revenue Funds
Subtotal ca rryove r
Proposed
Revenues
FY 2019-2020
Proposed
Operating
Budget
FY 2019-2020
Proposed
Capital
Budget
FY 2019-2020
Proposed
Budget
FY 2019-2020
$ 1,666,000 $ 1,432,590 $ 1,851,422 $ 3,284,012
State Grants (125)
240,000
40,000
- 40,000
CU PA (126)
434,870
641,065
- 641,065
Measure M (Fund 127)
246,330
-
241,500 241,500
SB -1 (128)
127,704
285,071
- 285,071
CASP (129)
26,000
25,000
- 25,000
Total Special Revenue Funds
$ 2,740,904 $
21423,726 $
21092,922 $ 4,516,648
Fund/Classification
Debt Service Funds
Debt Service (202)
Enterprise Funds
Water (501)
Wastewater (502)
Golf Course (503)*
Solid Waste (505)
Estimated Proposed Operating Proposed Capital Proposed
Revenues
FY 2019-2020
$ 183,600
31,281,360
3,886,200
1,450,667
Budget
FY 2019-2020 FY 2019-2020
$ 545,000 $ -
Total Enterprise Funds $ 36,618,227 $
* Golf Course has $5.7M loan payable to the Equipment
Replacement Fund
27,637,411
4,175,334
1,532,514
230,000
33,407,926
1,810,000
1,060,000
Budget
FY 2019-2020
$ 2,870,000 $
545,000
29,447,411
5,235,334
1,532,514
230,000
36,277,926
Fund/Classification
Component Unit
Senior Housing Fund (504)
Internal Service Funds
Equipment Replacement (601)
General Liability Insurance
(602)
Worker's Compensation Fund
(603)
Total Internal Service Funds
Estimated
Revenues
FY 2019-2020
Proposed Operating Proposed Capital Proposed
Budget Budget Budget
FY 2019-2020 FY 2019-2020 FY 2019-2020
$
21714 $ 14,113 $
$ 2,089,441 $ - $
1,914,179 1,783,333
2,757,020 2,934,272
$ 6,760,640 $ 4,717,605 $
7,849,761 $ 7,849,761
1,783,333
2,934,272
7,849,761 $ 12,567,366
Total CIP budget of $10,010,000 for FY 2019-20 (attachment A)
$5,480,000
In Cal'fyOVef
pfOj2CtS (funding previously approved by
City Council)
$2,470,000
in proposed
new appropriations from General
Fund
City Hall Security/Improvements - #14 on CIP list
Facility Condition Program Reserve - #15
Fiber Vault Lids Replacement - #18
Teen Center Upgrades (teen center, basketball court &skate park) - #23
Library Park Project- #27
Fitness Trail at Memory Row - #28
$2,060,000 in proposed new appropriations from special revenue funds
and grants
FY18/19 Allocated Funds $ 1,350,000
Anticicpated Prop 68
Grant (per capita
funding)
Total Allocated Funds To
Date
$ 200,000
Proiect Scope
Renovated Park, Renovated Pool &
New Restrooms (delta)
Renovated Park & New Restrooms
(no pool)
Renovated Park only (pool &
$ 1,550,000 restrooms removed)
Variance +(f-)
Estimated in Total
Proiect Cost Estimate
$1,850,000 -
$1,215,000 $(635,000)
$830,000 $(110201000)
Reserve Designation
General Fund Reserve
Economic Uncertainty Fund
Equipment Replacement
Debt Service — Douglas
St.
OPEB Trust — CERBT Fund
115 Pension Trust
401(a) PARS Retirement
Enhancement Plan
Estimated Reserve/Balance
$13,232,193
$2,000,000
$12,927,508
$1,024,000
$24,647,085 (as of June
30, 2019)
$2,612,423 (as of June
30, 2019)
$1,218,199 (as of June
30, 2019)
Target Reserve I
17% or $13,232,193
$2,000,000
100% of amortized
depreciation
$545,000 (annual debt service
payment)
100% funded (total liability=
$64.3M, annual contributions
of ^'$500,000)
$26 million by 2033
100% funded (total liability of
$2.23M, annual contributions of
$158,000)
Funded Status
100% Funded
100% Funded
Amortization schedule is
100% funded
100% Funded + $479,000
in excess reserves
38% Funded
10%
54% funded
i
Reduce GF reserves from 19% to 17% and place the 2%
(f%0$1,557,000) into the pension trust
Complete Fresh Start (Refinance) of Police Classic Pension
Plan
will save $2.71 million in interest payments
Complete Fresh Start of Fire Classic Pension Plan
will save $2.53 million in interest payments
NO
Proposed action will result in a total cost savings of $5.24
million over 25 years
Total cost savings to date of $11.72 million ($5.24M
proposed + $6.48M already implemented over the past
two fiscal years.
Discussion of whether to pursue potential revenue measures for
the March 2020 ballot
Local Sales Tax (recap of Measure C)
Utility Users Tax (UUT)
Business License Tax
Parking Tax
Parcel Tax
Transient Occupancy Tax (T.O.T.)
Measure C was passed in March 2018 by 85% of EI Segundo
voters
When enacted, the %cent local sales tax will generate $8.6
million/year for the City's General Fund
Reevaluate existing revenue sources
Explore revising the Utility User Tax (UUT)
Requires an affirmative vote by four members of the
Council to place the measure on the ballot
Requires voter approval: 50% + 1
IV]
Reevaluate existing revenue sources
Each 1% increase in UUT will result in ^'$2.4M (business
UUT only)
Current UUT rate is 3% on Electric, Gas & Water
Current Rate is 2% on Phone
Overall UUT has been declining over the past 6 years from ^'$9.OM/year to
$6.4M/year
Each 1% UUT assessed on residential will result in N$440k
Current UUT rate on residential is 0%
IM
E
Average Assessed Business UUT Rate by cities in L.A. County
Electric = 6.48%
Gas = 6.49%
Water/Sewer = 6.97%
Wireless/Phone = 6.39%
Average Assessed Residential UUT Rate by cities in L.A. County
Electric = 6.30 %
Gas = 6.20%
Water/Sewer = 6.79%
Wireless/Phone = 6.19%
20
Policy options:
Status Quo: no action
Direct staff to look into pursuing an increase of the
current business UUT rate
Direct staff to look into pursuing setting a new rate for
residential UUT assessment
Reevaluate existing revenue sources
Revision to the Business License Tax
Requires an affirmative vote by four members of the
Council to place the measure on the ballot
Requires voter approval: 50% + 1
Potentially generate ^'$1.7 million per year ongoing
Create Small Business Exemption
Revision to the Sales Tax Credit and Late Penalty Credit
Update language in EI Segundo Municipal Code (ESMC)
Redefine business types and categories
Exclude old business models (circus, Wild West shows, etc.)
Add shared economy business types (virtual offices, shared rides, short term
rentals)
Policy options:
Status Quo: no action
Direct staff to look into pursuing a revision to the
current Business License Tax structure and ordinance
Explore adding a Parking Taxon the ballot
Requires an affirmative vote by four members of the
Council to place the measure on the ballot
Requires voter approval: 50% + 1
A 10% tax would result in up to f%J$1.8M annually
A parking tax applies to the rental (daily, weekly, monthly)
of non-residential paid parking spaces in the City
Policy options:
Status Quo: no action
Direct staff to look into pursuing a new parking tax ordinance
Explore adding a Parcel Tax on the ballot
Requires an affirmative vote by four members of the Council to
place the measure on the ballot
Requires voter approval: 66.67% (2/3rds special tax)
A parcel tax would result in ^'$150k -$300k annually
Policy options:
Status Quo: no action
Direct staff to look into pursuing a new parking tax ordinance
Explore revising the T.O.T. — ballot measure
Requires an affirmative vote by four members of the
Council to place the measure on the ballot
Requires voter approval: 50% + 1
Each 1% increase would generate $1.25 million in new
revenue: current rate is 12% (Measure B passed in 2016)
Policy options:
Status Quo: no action
Direct staff to look into pursuing a revision to the TOT ordinance
September 3rd
Budget adoption
Gann Limit adoption
29
City Manager &Council Comments
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