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HomeMy WebLinkAboutb15yrgeneralfundfiscalforecast FROM: Katie Lichtig, City Manager Wayne Padilla, Director of Finance & Information Technology Joe Lamers, Budget Manager SUBJECT: INTERIM UPDATE OF THE 5-YEAR GENERAL FUND FISCAL FORECAST RECOMMENDATION 1. Receive an update to the 5-Year Fiscal Forecast. 2. Provide direction to the City Manager regarding the recommended allocation of one-time and ongoing budget resources to fund proposed supplemental funding requests as well as the additional proposed uses of the General Fund reserve amount that exceeds the 20% minimum level. DISCUSSION Staff has prepared an interim update to the 5-Year Fiscal Forecast in order to provide the City Council and staff with a backdrop for use in determining how to address the various fiscal issues that have been identified and which will be coming back to the City Council for further deliberation in the future. These issues include the $24 million unfunded liability within the California Public Employees retirement system; the $2.025 million balance owed to the California Joint Powers Insurance Authority for the retrospective deposit; developing the fiscal contingency plan to address the possibility that the Measure Y revenue stream is not extended; providing the resources necessary to match the contributions of other public agencies within the county to provide for a homeless services center. Through the mid-year budget review, staff has developed a recommendation for three supplemental funding requests for Development Services, the Fire Vehicle Mechanic program and a vehicle locating and routing software for the fire department totaling $955,000 in the current year. Of that amount, $105,789 represents on-going costs. These requests, which are fully detailed in the Mid-Year Budget Update, have their one- time and on-going cost elements reflected in the 5-year forecast. Changes to the Forecast Format The forecast document has a new look. It has been expanded from a 2 page document to 4 pages in order to provide more detail to make it easier to understand and to ensure that there is sufficient detail for the reader. The first page is a simple summary showing revenue and expenditure totals and the beginning and ending fund balances. The subsequent pages provide the revenue and expenditure detail, along with relevant notes on important assumptions. Purpose of the Forecast The purpose of this forecast is to assess the General Fund’s ability over the next five years—on an “order of magnitude” basis—to do five things: 2-18-14 B1 - 1 Interim Update to the 5-Year Fiscal Forecast Page 2 1. Deliver current service levels. 2. Maintain the City’s existing infrastructure and facilities based on past funding levels. 3. Preserve the City’s long-term fiscal health by aligning operating revenues and expenditures. 4. Maintain fund balance at policy levels. 5. Reinvest in the General Fund supported Capital Improvement Program, particularly in areas that are underfunded such as infrastructure maintenance, fleet replacement, Information Technology replacement, and facilities maintenance. Revisions to the Revenue and Expenditure Forecasts When the forecast was last presented to the City Council in December 2013, the only significant change made at that time was to incorporate the 2012-13 actual results and to include the 2013- 15 Financial Plan as adopted in June 2013. The following summarizes the information included in the updated forecast which is provided as an attachment. 1. Revenue Forecast In this forecast, the current year revenue numbers have been reset to reflect the most recent results and current year forecasts presented at the Mid-Year Budget review. The following are the highlights of the revenue forecast: • Property tax revenues grew for the first time in 3 years during 2012-13 and are expected to grow by $204,000 in 2013-14 over the prior year amount, after adjustment for the $620,000 refund of overpaid administration fees that was received last year. However the County has indicated that the inflation factor used to reset Proposition 13 property values in 2014-15 will be nearly 1.5% less than the normal 2% rate that is used each year. Future year property tax forecast amounts have therefore been adjusted to reflect that condition and staff will continue to monitor property values with the county since property values that are not protected by Proposition 13 may be adjusted at a higher rate if the Assessor deems it is warranted by market conditions. • Interest revenue continues to be forecast in amounts much lower than in the past and a further reduction is being recommended for the current year. During the fiscal year end close, staff learned that adjustments to the investment portfolio’s market value which are based on monthly and quarterly valuations to determine unrealized market gains and losses are being reported as part of the interest income stream. Staff is working to separate the two items so that a better analysis of the interest returns can be reported in the forecast and in the city’s year end financial results. While this will not increase the overall revenue stream, it will be important to distinguish actual return on investment from unrealized results. • Utility User’s Tax (UUT) revenues forecast are based on a review of the UUT payments made by each company to the city. The forecast indicates that receipts will be 8% or $440,000 over the prior year amount. In the current year, the forecast will add $600,000 to the current budget amount. A significant portion of this increase is due to the change in the UUT ordinance that took effect on April 1, 2013 and B1 - 2 Interim Update to the 5-Year Fiscal Forecast Page 3 expanded the type of wireless phone services that are subject to the tax as well as the number of companies subject to collecting and remitting the tax. • Transient Occupancy Taxes continue to show year over year growth. The current forecast indicates that TOT will increase by 7.5% or $418,000 over the prior year. The forecast represents $240,900 more revenue over the current budget forecast and the next 4 years reflect average annual increases of between 4.4% and 5%. The forecast for the future years aligns with that of the Tourism Business Improvement District’s Strategic plan. • Sales tax receipts and Measure Y receipts are both being forecast in accordance with the guidance provided by HdL, the City’s sales tax revenue monitor. Due to the termination in 2015-16 of the “Triple Flip” formula as it relates to the ¼ cent portion of the general sales tax that the state exchanged for an equal amount of property taxes, coupled with an expected decline in vehicle sales volume and declining gasoline sales, HdL has forecast that there will a drop in general sales tax receipts in 2014-15. As part of the process to eliminate the property tax exchange for sales tax revenue program, the “Triple Flip”, the state will make its final adjustments to the payment advances that were made under that revenue exchange program and HdL is expecting that the City will see a one-time negative adjustment resulting from this process. All of these factors have been reflected in the forecast and resulted in the 2014-15 general sales tax receipts growing by only 1%, returning to a more normal pattern in later years. It should be noted that those later year forecasts are tempered with the expectation that the volume of car sales and fuel sales will be lower than current volumes. According to HdL, It appears that the public’s appetite for new cars is starting to wane while the larger number of highly fuel efficient cars is driving down demand for gasoline. • Development revenue receipts continue to surge this year, with another large volume received at the end of December. The forecast reflects an increase over the original budget of $1,204,000. The revised total includes $300,000 carried over from 2012-13 based on Council’s authorization received by Community Development in September 2013 to defer that amount and carry it over to this year. The new total is $752,000 more than the prior year total. • The latest state forecast for Gas Tax revenues indicates that the current year estimate will be $75,000 lower than originally reflected in the adopted budget. The forecast for 2014-15 was adjusted as well to reflect a drop of $196,000 over the original budget forecast. Gas taxes are based on volume of sales and not sales price, and as mentioned earlier, the rapid expansion in the number of fuel-efficient cars placed into service is causing a large drop in volume and the city receives its allocation based on a per-capita allocation formula administered by the state. Staff will continue to monitor the forecasts provided by the state. 2. Expenditure Forecast • Both the one-time and recurring costs resulting from the recommended supplemental funding requests are included in this forecast. $74,600 of the $954,800 funding request for the current year is recommended for funding from the excess reserve over the required 20% level. In 2014-15, $196,000 of the excess reserve is recommended to fund one-time costs. After 2014-15, ongoing costs from these requests are approximately $295,000. B1 - 3 Interim Update to the 5-Year Fiscal Forecast Page 4 • There are two items that affect all funds which have staffing costs. The first is an adjustment that is required to be made to properly reflect the full cost of the required annual contribution for the retiree medical program. At the time the 2013-14 budget was drafted, a portion of the annual required contribution was not included in the total annual cost that is shared with all funds that have staffing costs, due to an oversight when interpreting the actuarial report. This fact was discovered during the closing of the 2012-13 financial records. This has resulted in the addition of $173,200 to staffing costs in 2013-14 and the forecast for the future has been adjusted to reflect ongoing additional costs of $200,000 in each year. This may be adjusted after the updated actuarial report is received in the next few months. The second adjustment reduces the amount that was budgeted for the cost of Unemployment Insurance benefits by $83,400 in 2014-15. The city’s experience level has been much lower than the expense forecast, allowing this reduction to occur. Staff will continue to monitor the results of this program and provide corresponding adjustments as needed. • Changes in the 2014-15 premiums for liability and workers compensation insurance coverage have been identified. Liability premiums are estimated to increase by $13,000 and workers compensation premiums are estimated to increase by $42,500 over the 2014-15 budget amounts. The forecast contains the assumption that liability premiums will increase 5% per year and workers compensation premiums will increase 8% per year for a total additional cost of $122,000 per year compared to the last 5 year forecast update. These estimated increases are in line with those provided by the California Joint Powers Insurance Authority. • The retrospective computation for the liability program for periods including 2011-12 resulted in a retrospective charge in the amount of $39,300. The retrospective computation for the workers’ compensation program for periods including 2011-12 resulted in a retrospective charge in the amount of $442,700. Neither of these amounts were anticipated and both amounts have been added to the forecast for 2014- 15. Due to the nature of the retrospective computation process, it is difficult to forecast the results of future retrospective computations, which are completed each year by the California Joint Powers Insurance Authority which is the City’s insurance provider. • The California Public Employees Retirement System provided 2014-15 employer rate information indicating that first tier programs for miscellaneous and safety employees will see rate increases next year above the amount included in the 2013-15 financial plan. The additional rate increase over the budgeted amount is .45% for miscellaneous members and 1.2% for safety plan members. For the 2nd tier safety plan, the rate increase is .16% and for the fire 2nd tier plan, the increase is .56%. The additional cost related to these rate changes is approximately $221,000. This amount was included in the forecast and carried through the remaining years. Later this month the CalPERS Board is set to consider further modifications to the employer rates based on recommended changes that reflect lower mortality rates and greater numbers of employees retiring. No assumption for the possible changes resulting from their possible actions, which would take effect in 2016-17 has been included in the 5 year forecast. Last April the CalPERS Board approved changes to the actuarial assumptions used to set employer rates by enacting a plan to fully fund all retirement programs within 30 years. This process limits the period of time that certain rate increases are phased in to 5 years and uses a 25 year period to recognize market gains B1 - 4 Interim Update to the 5-Year Fiscal Forecast Page 5 and losses. The effect of this change in assumptions will be seen in 2015-16 but no firm employer rates have been established. The 5 Year Fiscal forecast reflects the value of a 1% increase ($280,000) in the employer rates as a self-assessed charge starting in 2014-15 raising this to 2% ($560,000) in 2015-16. In later years, the forecast reflects the $560,000 as an on-going cost. The forecast does not reflect estimated savings from future hiring that will place new employees into either the 2nd tier and 3rd tier retirement plans that have employer rates that are much lower than the original plan for public safety employees. Once the city has more history with these programs, future forecasts will reflect the estimated savings. • During a review of the 5 year forecast the amount of the remaining payments owed to the California Joint Powers Authority for the retrospective deposit which was formally recognized last year was adjusted to the amounts actually negotiated last June. It was noted that the 2015-16 installment payment had not been included in the last 5 year forecast due to the assumption that it would be paid out of the Insurance Benefit Trust fund using the reimbursement received from the county when it returned overpaid property tax administration fees. The additional cost reflected in 2015-16 is $429,000. • Support of capital programs has been reflected in the 5 Year Forecast as presented in June 2013. Additional investments may be recommended in the future and those will be reflected at that time. 3. Use of one-time funds above the 20% Reserve As part of the City’s long term financial sustainability strategy ongoing expenditures are only recommended when there are ongoing budget resources available to pay for those costs. Funds that are one time in nature are available for one-time expenditures. Based on the changes incorporated into the General Fund Five-Year Fiscal Forecast and after consideration of the costs associated with the supplemental funding requests, there is $5,810,000 remaining in the General Fund reserve in excess of the 20% required reserve. In addition to the supplemental funding requests received, staff is proposing the following as possible uses of the remaining amount of the excess reserve over the 20% level: $3.0 million to pay down unfunded liabilities. This could be applied either to the $24 million side-fund liability that exists in the California Public Employees Retirement System (CalPERS) safety program or the retrospective deposit balance in the amount of $2.025 million that exists at the California Joint Powers Insurance Authority. Further analysis with regard to the CalPERS side-fund amount and options will be brought back to the City Council in April. $1.7 million to backfill for Measure Y revenues in 2014-15 if needed. As staff indicated in its report to the City Council on January 21st and the Council concurred, one of the options to be considered for preserving services in 2014-15 in the event that the Measure Y revenue stream does not continue beyond March 2015 would be to use a portion of the existing reserve amount that exceeds the 20% level. $435,000 for street paving and the paving of the Sinsheimer stadium parking lot. o Additional funding is needed in the street rehabilitation and reconstruction account to more fully fund paving in Areas 6 and 7, including the completion of required ADA curb ramps in B1 - 5 Interim Update to the 5-Year Fiscal Forecast Page 6 the project area. This additional funding would help complete the neighborhood paving needs in these areas. o The Sinsheimer Parking Lot project budget was reduced in the 13-15 Financial Plan by $50,000. In addition, increased requirements relative to the Municipal Stormwater Permit result in a current project deficit of $80,000. $250,000 to be set aside as a matching grant future use in acquiring land at 40 Prado Road for the homeless services center as proposed by Community Action Partners of San Luis Obispo County (CAPSLO). This assumes that other agencies, including the county and the newly formed Homeless Foundation of San Luis Obispo County contribute their fair share. The amount of the city’s contribution could be reduced depending on the final tally of contributions provided by other cities in the county. Yet this set-aside may be used to achieve this aspect of the Homeless Major City Goal if required. $250,000 to be used to begin the city hall reconfiguration to provide an elevator for public use and to consolidate two public service counters on the main floor. $100,000 for the creation of an employee development and leadership program in conjunction with the county. The City is in discussions with the County of San Luis Obispo regarding the possibility of collaborating to provide a cost effective and progressive approach to leadership development for the two organizations (City and County). Collaborating with the County allows the City to participate in providing a three-tiered leadership development model that includes supervisory, management, and executive academies with classroom training, experiential learning activities, guest speakers, and coaching. The model would be provided through a group of consultants based on proven public sector competencies and regularly evaluated for effectiveness. While certain aspects of the leadership development program may be tailored for City or County specific needs, the economy of scale offered by this collaboration allows both organizations and our community to benefit from a program that otherwise would not be affordable for the City. Staff is requesting $100,000 of the one-time funds in excess of policy reserve to be designated for the purpose of “seeding” this program. Staff is in preliminary discussions with the County and consultant and therefore, does not have a complete estimate of costs and timeline for roll-out but is confident this amount will get the program up and running. ATTACHMENT 1. General Fund Five Year Fiscal Forecast 2013-18 B1 - 6 B1 - 7 B1 - 8 B1 - 9 B1 - 10 FEB 1 8 2014 i awaicouncit memo panbum city of san Luis oBispo, finance anb i.t, aepaRtment DATE: February 18, 2014 AGENDA CORRESPONDENCE TO: Mayor & Council Members Date �_ Item# VIA: Katie Lichtig, City Manager FROM: Wayne Padilla, Finance Director SUBJECT: Updates made to the 5 Year Fiscal Forecast have been reflected in the reprinted document which is attached After the agenda report regarding the 5 Year Fiscal Forecast was published, there were a number of changes made to the Community Services supplemental funding request that were covered in a separate Council Correspondence. This item provides the City Council with an update to the 5 Year Fiscal Forecast to reflect the changes made to the original funding request. The changes made are described below: Forecast Development Review Fee Revenues increased by $210,000 in 2013 -14 Limited Term Costs have increased by $115,400 in 2013 -14 Limited Term Costs have been reduced by $130,600 in 2014 -15 *this corrects a prior overstatement of costs contained in the original 5 Year Fiscal Forecast Due to the timing of the release of this information, a copy of this document will be provided at tonight's meeting. Please feel free to contact me with any questions you may have by calling me at 781 -7125 or by e -mail at wpadilla()slocity.org. HNnformation memos \memo on 2 -18 -14 6 yr forecast \5 yr forecast update for 2- 18- 14.docx GENERAL YEAR FORECAST: 2010 -11 2011 -12 2012 -13 2013 -14 MID YEAR FORECAST Actual Actual Actual Adopted 2013 -14 2014 -15 2015 -16 2016 -17 2017 -18 2013 -15 Financial Plan REVENUES & OTHER SOURCES Taxes 43,698,500 45,944,237 49,125,900 49,051,300 1 50,857,300 52,055,496 53,794,325 55,499,525 57,268,435 Subventions, Grants & Transfers In 2,454,400 2,017,699 2,748,900 1,778,000 2,532,200 1,518,521 1,549,441 1,581,134 1,614,588 Service Charges 4,987,100 6,285,300 6,194,500 5,437,700 6,870,450 5,964,799 6,078,144 6,119,315 6,161,225 Other Revenues 900,600 6,233,527 884,000 641500 380,000 385,025 390,125 395,302 466,857 Total Revenues 52,040,600 60,480,7.63 58,953,300 56,908,500 60,639,950 59,923,841 61,812,035 63,595,276 65,511,104 EXPENDITURES * Staffing Costs, net of reimb. transfers and est. savings 34,719,800 36,272,500 36,407,800 36,135,262 36,658,207 37,566,845 38,724,674 39,850,736 40,930,442 Operating Programs Non- staffing costs (net of estimated savings) 9,994,100 10,939,655 12,175,100 13,356,038 13,620,574 13,549,346 14,142,640 14,126,217 14,751,785 SOPC Request Ongoing - Fire Vehicle Mechanic 55,689 157,120 161,048 165,074 169,201 SOPC Request One Time - Fire Commodities 26,000 SOPC Request One Time - Development Review 863,800 113,400 SOPC Request Ongoing - Development Review 50,100 130,600 133,865 137,212 140,642 Transfers & Other Uses 5,532,900 12,492,108 7,014,000 7,249,700 7,267,885 8,002,139 8,230,524 8,392,376 9,519,034 Total Recurring Expenses 50,246,800 59,704,263 55,596,900 56,741,000 58,542,255 59,519,450 61,392,751 62,671,615 65,511,104 Fund Balance, Beginning of Year 11,114,100 12,907.900 13,684,400 181725.969 18,937,700 11,161,295 12,369,685 11,788,969 12,712,631 Revenues Over (Under) Expenditures 1,793,800 776,500 3,356,400 167,500 2,097,695 404,390 419,284 923,662 0 One Time Fund Balance Adjustment 1,896,900 SUBTOTAL FUND BALANCE END OF YEAR, BEFORE ONE TIME EXPENSES 12,9071900 13,684,400 18,937,700 18,893,469 21,035,395 11,565,685 11,788,969 12,712,631 12,712,631 ONE TIME EXPENSES APPROVED AT ADOPTED BUDGET Skate Park 1,226,300 1,226,300 IT Replacement Fund Support 500,000 500,000 One Time SOPCs (Operating) 70,000 70,000 Investment in Major Facility 500,000 500,000 Prior Year Encumbrances 1,768,200 Total One Time Expenses From Fund Balance 2,296,300 4,064,500 SOPC ONE TIME REQUESTS FROM RESERVES ABOVE 20% Quickest Route 20,600 Special Projects Temporary Staffing 54,000 196,000 Set Aside for Addressing Unfunded Liabilities (CaIPERS and /or GPIA) 3,000,000 Backfill for Measure Y Sunset If Needed 1,700,000 Street Paving and Sinsheimer Park Paving 435,000 Homeless Services Center Land Purchase Set Aside 250,000 City Hall ADA and Administration Reconfiguration (minimum estimate) 250,000 Employee Development and Leadership Collaboration 100,000 Total SOPC Requests from Fund Balance I - 5,809,600 196,000 Ending Fund Balance 12,907,900 13.684,400 18,937,700 16,597,169 11,161,295 11,369,685 11,788,969 32,712,631 12,712,631 Reserve @ 20% of Operating Costs 8,942,800 9,160,900 10,070,220 9,912,273 10,653,300 10,342,700' 10,632,400 10,855,800 11,198,400 Adjust for Debt Svc Reserves (602,800) (331,600) (331,600) (331,600) (331,600 (331,600) (331,600) (331,600) Adjust for Encumbrances & Carryover Reserve (if applicable) (2,279,271) (1,768,200_) (_1,756,000) Reserve Abave /(Below) Policy Level * 3.96%12LL 1.641,429 6,767.680 4,597,296 176,395 695,385 824,969 1,525,231 i,i82,fi31 Revenue rind expense forecast details are included on schedules 2 -4. - .Sr'l pdtilP 1 2/18/20144:25 PM GENERAL , • FORECAST: ' 2010 -11 2011 -12 2012 -13 2013 -14 MID YEAR FORECAST Actual Actual Actual Adapted 2013 -14 2014 -15 2015 -16 2016 -17 2017 -18 2013-15 inancia Pan REVENUES & OTHER SOURCES Taxes Sales Tax+ In -lieu (Based on "effective" 1% tax rate) 12,098,600 13,289,950 14,242,200 14,515,500 15,238,900 15,391,289 16,053,114 16,639,508 17,260,133 Measure Y 1/2% Note: 2014 - 15/15 -16 Estimates assume renewal 5,616,300 6,237,468 6,493,800 6,600,000 6,684,000 6,964,728 7,152,776 7,367,359 7,595,747 Sales Tax -Proposition 172 271,300 307,429 327,700 284,200 338,900 350,423 362,337 374,656 387,395 Property Tax 8,441,100 8,367,088 9,176,600 8,740,800 8,761,000 8,892,415 9,114,725 9,342,594 9,576,158 Property Tax in lieu of VLF 3,551,100 3,492,361 3,533,200 3,586,200 3,645,700 3,736,843 3,830,264 3,926,020 4,024,171 Transient Occupancy Tax 4,844,200 5,222,004 5,572,400 5,749,400 5,990,300 6,289,815 6,589,330 6,888,845 7,188,360 Utility Users Tax 4,592,300 4,584,055 4,916,100 4,756,000 5,356,000 5,516,680 5,682,180 5,852,646 6,028,225 Franchise Fees 2,352,100 2,462,349 2,552,300 2,523,000 2,525,900 2,563,789 2,602,245 2,641,279 2,680,898 Business Tax 1,797,800 1,837,548 2,055,300 2,116,200 2,116,600 2,169,515 2,223,753 2,279,347 2,336,330 Real Property Transfer Tax 133,700 143,985 256,300 180,000 200,000 180,000 183,600 187,272 191,017 Subventions, Grants & Transfers In Vehicle License Fees 205,600 45,752 19,300 Gas Tax/TDA/TBID Transfers In 1,658,400 1,407,600 1,374,500 1,446,300 1,380,300 1,236,800 1,267,720 1,299,413 1,332,867 Other Subventions & Grants 590,400 564,347 1,355,100 331,700 1,151,900 281,721 281,721 281,721 281,721 Service Charges Development Review Fees 1,668,000 2,453,773 2,595,300 2,143,700 3,557,300 2,574,300 2,577,565 2,580,912 2,584,342 Recreation Fees 1,300,700 1,741,676 1,747,900 1,519,200 1,577,450 1,608,999 1,641,179 1,674,003 1,707,483 Other Service Charges 2,018,400 2,089,851 1,851,400 1,774,800 1,735,700 1,781,500 1,859,400 1,864,400 1,869,400 Other Revenues Fines & Forfeitures 171,400 174,331 159,700 167,300 156,000 158,340 160,715 163,126 165,573 Interest Earnings and Rents 549,900 588,451 230,200 324,200 179,000 181,685 184,410 187,176 189,984 Bond Proceeds 5,386,300 - Other Revenues 179,300 84,445 494,100 150,000 45,000 45,000 45,000 45,000 111,300 Total Revenues 52,040.600 60,480,763 58,953,400 1 56,908,500 60,639,950 59,923,841 61,812,035 63,595,276 65,511,104 Schedule 2 2/18/20144:28 PM GENERAL YEAR FORECAST: 2013-18 2013 -14 2014 -15 2015 -16 2016 -17 Retiree Health Adjustment 173,200 200,000 2010 -11 2011 -12 2012 -13 2013 -14 CJPIA Retro Payment MID YEAR FORECAST CJPIA Ongoing Rate Increase Actual Actual Actual Adopted 2013 -14 2014 -15 2015 -16 2016 -17 2017 -18 2013 -15 Financial Plan EXPENDITURES Staffing Costs, net of reimb. transfers and est. savings * 34,719,800 36,272,500 36,407,800 36,135,262 36,658,207 37,566,845 38,724,674 39,850,736 40,930,442 Operating Programs - Non - staffing costs (net of estimated savings) 9,994,100 10,939,655 12,175,100 13,356,038 13,620,574 13,549,346 14,142,640 14,126,217 14,751,785 SOPC Request Ongoing - Fire Vehicle Mechanic / Fire Commodities 55,689 157,120 161,048 165,074 169,201 SOPC Request One Time - Fire Commodities 26,000 SOPC Request One Time - Development Review 863,800 113,400 SOPC Request Ongoing - Development Review 50,100 130,600 133,865 137,212 140,642 TRANSFERS Transfers to Golf, CDBG 372,800 53,564 45,000 53,100 71,285 81,200 81,200 81,200 81,200 Bond Costs /Defeasance /New SOPCs 5,778,500 Debt Service ** 3,023,200 2,437,244 2,772,600 2,760,200 2,760,200 2,954,602 2,999,753 2,989,805 2,806,921 Transfer to Debt Service Fund - CJPIA Retro payment - 429,537 429,537 429,537 429,537 Capital Improvement Plan - Equipment Replacement (Fleet) - 500,000 500,000 408,600 408,600 532,600 623,951 623,951 823,951 Capital Improvement Plan - Equipment Replacement (IT) 200,000 565,500 565,500 967,100 165,458 165,458 700,000 Capital Improvement Plan - Major Facility Replacement 602,700 602,700 551,400 345,000 480,000 780,000 Capital Improvement Plan - All other CIP /Open Space 2,136,900 3,722,800 _ 3,496,400 1 2,859,600 2,859,600 2,485,700 3,585,625 3,622,425 3,897,425 'Total Recurring Expenses 50,246,800 59,704,263 55,596,900 56,741,000 58,542,255 59,519,450 61,392,751 62,671,615 65,511,104 ONE TIME EXPENSES APPROVED AT ADOPT BUDGET Skate Park 1,226,300 1,226,300 IT Replacement Fund Support 500,000 500,000 One Time SOPCs (Operating) 70,000 70,000 Investment in Major Facility 1 500,000 500,000 Prior Year Encumbrances 1,768,200 Total One Time Expenses From Fund Balance 2,296,300 4,064,500 SOPC ONE TIME REQUESTS FROM RESERVES ABOVE 20% Quickest Route 20,600 Special Projects Temporary Staffing 54,000 196,000 Set Aside for addressing unfunded liabilities (CaIPERS and /or CJPIA) 3,000,000 Backfill for Measure Y Sunset If Needed 1,700,000 Street Paving and Sinsheimer Park Paving 435,000 Homeless Services Center Land Purchase Set Aside 250,000 City Hall ADA and Administration Reconfiguration (minimum estimate) 250,000 Employee Development and Leadership Collaboration 100,000 Total SOPC Requests from Fund Balance 5,809,600 196,000 * Staffing and Benefits Changes From Current 2013 -14 Mid Year Review 2013 -14 2014 -15 2015 -16 2016 -17 Retiree Health Adjustment 173,200 200,000 200,000 200,000 CJPIA Retro Payment 481,977 CJPIA Ongoing Rate Increase 55,528 121,828 121,828 CaIP €RS Retirement Costs 221,281 221,281 221,281 2/18/20144:35 PM ** Debt Service Changes From 2013 -15 Financial Plan 2013 -14 2014 -15 Lease of Public Safety Mobile Computers 185,000 Lease of Fire Engine 117,000 2004 Lease Bonds Retired (295,000) LOVR Financing 371 pM Schedule 3 PROJECTION FACTORS 2 Last L Historical Trends A Actual _ FORECAST ASSSUMPTIONS DEMOGRAPHICS Annual Percentage Changes Population 0 0.70% 0 0.50% 0.30% 0 0.60% Housing Units 0 0.80% 0 0.70% 0.70% 0 0.80% Inflation 3 3.10% 2 2.10% 2.60% 2 2.50% Compound Population &Inflation 3 3.80% 2 2.60% 2.90% 3 3.10% KEY REVENUES S a ax i us a es). ase ine 8.70/ 1.60% 3.80% 4.70% 4.50% 7.00% 1.00% 4.30% 3.65% 3.73% 2014 -15 is last year of in- lieu; true -up process is completed Garden Street Terrace: 1.5% 104,800 104,800 Net Increase 7.00% 1.00% 4.30% 3.65% 3.73% Property Tax (Assessed Value) 2.26% -2.30% 2.20% 2.30% 1.17% 2.39% 1.50% 2.50% 2.50% 2.50% TOT: Baseline (tied to TBID Strat. Plan) 7.30% 2.20% 3.90% 4.40% 6.71% 7.50% 5.00% 4.76% 4.55% 4.35% Beacon Forecast 3.00% 3.00% 3.00% Utility Users Tax 3.70% 3.50% 3.10% 3.50% 7.24% 8.95% 3.00% 3.00% 3.00% 3.00% Beacon Forecast 1.00% 1.00% 1.00% 2.00% 3.00% Franchise Fees 4.20% 8.40% 4.30% 2.70% 3.65% -1.03% 1.50% 1.50% 1.50% 1.50% Business Tax 6.60% 1.90% 3.70% 4.50% 11.85% 2.98% 2.50% 2.50% 2.50% 2.50% Beacon Forecast 2.00% 2.00% 2.00% 2.00% Transfers -In 2.50% 2.50% 2.57% Development Review Fees 37.07% - 27.63% 0.13% 0.13% 0.13% Recreation Fees -9.75% 2.00% 2.00% 2.00% 2.00% EXPENDITURES Operating Programs: Staffing actual actual 2.50% 2.50% 2.50% Estimated savings -2.00% -2.00% -2.00% -2.00% -2.DD% Operating Programs: Non - staffing 2.80% 2.80% 2.80% Estimated savings -2.00% - 2,00% Debt Service: Existing Debt Capital Improvement Plan - All other CIP /Open Space CIP costs reflect CIP requests submitted by departments and recommended by the CIP Review Committee for 2013- 14,2014-15 Schedule 4 2/18/20144:25 PM 14,2014-15 Schedule 4 2/18/20144:25 PM FFEB I_� D 5 2014 mas counck 111E111012an6ui11 DATE: February 24, 2014 TO: Mayor Marx & Members of the City Council FROM: Joe Lamers, Budget Manager y�- �• VIA: Katie Lichtig, City Manager V CC: Wayne Padilla, Finance Director SUBJECT: Updates made to the 5 Year Fiscal Forecast AGENDA CORRESPONDENCE Date Item# 91 This item provides the City Council with an update of the Five Year Fiscal Forecast based on actions taken at the City Council hearing on 2/18/14. The revisions made are to reflect approved one -time uses of the General Fund excess reserve over the 20% level. The changes that were made are described below: - Funding for street paving and paving of Sinsheimer Stadium Parking Lot was reduced from $430,000 to $300,000. This includes $220,000 devoted to street paving and $80,000 for paving of Sinsheimer Stadium parking lot. - $100,000 has been allocated to the Mission Plaza Master Plan. This replaces $100,000 that was proposed for the development of an employee development and leadership program. - $196,000 in costs were added in 2013 -14 to support the second year second year of Special Projects Temporary Staffing, related to the Development Services supplemental funding request. The 5 Year Fiscal Forecast previously charged this cost to 2014 -15. 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