The URL can be used to link to this page

Home My WebLink About06-17-2014 ph2 PPP 2013-15 Financial Plan Supplement Presentation.pdf2013-15 Financial Plan Supplement Proposed 2014-15 Budget - June 17, 2014 Katie Lichtig, City Manager Wayne Padilla, Director of Finance Joe Lamers, Budget Manager 1 Meeting Objectives •Review the City’s financial condition at the midpoint of the 2013-15 Financial Plan •Consider supplemental funding requests •Adopt a resolution approving the 2013-15 Financial Plan Supplement and 2014-15 Budget •Approve amendments to 2013-14 budgets •Adopt the revised resolution approving an amendment to the Financial Management Manual and the Budget and Fiscal Policies Section of the Financial Plan, regarding the use of development review fees 2 Steady Progress •Revenues have rebounded •Development review activity remains strong •The budget is balanced for all funds •Fiscal Health Objectives •Full payment of $2.065 million for retrospective insurance costs •$935,000 pay down of unfunded retirement liabilities in 2013-14. Additional payment of $300,000 recommended in 2014-15 •Reduction in retirement costs through implementation of 2nd Tier Retirement programs 3 2014-15 Budget Process •2014-15 Budget is “Supplement” to 2013-15 Financial Plan as part of 2-year approach •Build on the policy and planning foundation of the “parent” 2013-15 Financial Plan •Council action required to appropriate funds for the 2014-15 fiscal year •Limited and strategic changes proposed •Like the mid-year budget review, Supplement process provides opportunities to review changes and trends and take actions as needed 4 Budget Overview •2014-15 Budget is balanced: •Maintains ending reserve balance above policy minimum of 20% of operating expenditures for General Fund and Enterprise Funds •Requests Council appropriate $134.2 million across all funds •Includes $1.867 million in new funding requests, the majority of which are for one-time costs 5 Expenditures by Fund: $134.2 Million 6 General Fund Revenues: $59.1 Million 7 General Fund Revenue Trend 39,000,000 44,000,000 49,000,000 54,000,000 59,000,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Revenue Total Revenue Excluding Grants 8 Revenue Changes for 2014-15 •2014-15 revenue changes are similar to trends identified at 2013-14 Mid Year update •General Fund revenue projected to increase by $2.2 million or 4% over original budget estimate •$1.145 million from development fees (51% increase) •$625,000 from UUT (13% increase) •$391,000 from TOT (7% increase) •Transportation Impact Fee Fund to provide $250,000 Transfer In to the General Fund in 2014- 15 for debt service on the LOVR overpass •Ongoing support equal to at least one-half of annual payments recommended 9 General Fund Expenditures: $60.8 Million 10 General Fund Operating Expenditures: $53.3 Million 11 CIP Expenditures by Function 2014-15 Public Safety 643,500 Public Utilities 7,234,830 Transportation 28,227,421 Leisure, Cultural & Social Services 932,000 Community Development 729,200 General Government 1,630,200 Total 39,397,151$ CIP Expenditures by Source 2014-15 General Fund 4,536,800 Transportation Impact Fees 7,500,000 CDBG Fund 262,121 Other Grants and Contributions 19,254,800 Enterprise and Agency Funds 7,843,430 Total $39,397,151 2014-15 CIP Summary 12 2014-15 CIP Changes •Water Fund changes: •Pressure Reducing Valve replacement $109,000 •Monterey Street Waterline replacement $391,400 •LOVR overpass net increase of $495,000: •$1 million increase in grant funded expenses •$505,000 reduction in the amount to be borrowed •CDBG Fund reflects carryover of prior year projects ($157,000 increase over original 14-15 Budget) 13 Five Year General Fund Forecast •Projects balanced budgets through 2017-18 •Meets 20% minimum fund balance requirement •Assumes: •Forecast revenues reflect current trends •Reauthorization of Measure Y •Modest increase in operating costs •PERS cost increases resulting from 2012-13 CalPERS Board actions 14 Five Year General Fund Forecast (Retirement Costs) •CalPERS Board provided estimates for newly approved employer rates starting in 2015-16 •Approximately 4% increase per year •$1.2 million by 2017-18 •Single safety pool based on share of liability: $35,200 •These costs have been included in the Five Year Forecast •The forecast reflects a $1.7 million transfer from Insurance Benefit Fund in 2017-18 to offset higher PERS costs •Keeps General Fund at the 20% minimum level •In 2018-19 retirement costs increase by $1.7 million •Insurance Benefit Fund covers $833,000 •Leaves $900,000 to be addressed through budget adjustments 15 •In February 2014 CalPERS adopted additional changes in plan assumptions based on increased retirements and lower mortality •Effects of rate changes will begin in 2016-17 •CalPERS has only provided potential high and low rate change estimates •Potential cost estimates shown below are not included in the forecast Uncertainties: Retirement Costs 2016-17 2020-21 Low High Low High Miscellaneous $133,000 $281,600 $511,300 $1,072,000 Safety $213,700 $371,200 $665,900 $1,168,500 $346,700 $652,800 $1,177,200 $2,240,500 16 •In May 2014, CalPERS Board approved: •A single safety retirement pool •A flat charge for the side fund liability payment in-lieu of an amount based on a percentage of payroll •Potential range of cost increase $35,200 in 2015-16 to $1.5 million in 2035-36 •Allocation of changes in unfunded liabilities will be based on each member agency's share of total pool liability instead of each agency’s percent of total payroll •An additional side fund liability will be created in 2015-16 •Total of two side funds as of 6/30/12 is $57.3 million 17 Uncertainties: Retirement Costs 2013-15 Uses of Measure Y Revenue: $16.9 million *does not include $1.7 million in contingency reserve 18 Measure Y Uses •A detailed list of Measure Y operating and capital costs is provided in the Supplement Budget document •Updated to reflect: •$851,951 of previously committed Measure Y dollars for CIP carried over to 2013-14 •$4.3 million unspent revenue as of June 30, 2013 is reflected in the 2013-15 funding detail •$1.2 million for the Skate Park •$500,000 Major Facility Transfer •$500,000 IT Replacement Transfer •$300,000 for paving •$100,000 Mission Plaza Master Plan •$20,600 Fire Department Quickest Route •$1.7 million in Contingency Reserve 19 Significant Operating Program Changes (SOPC’s) There are eight SOPC requests with a total value of $1,867,321 in 2014-15: 1.Development Services Temporary Staffing - $830,213 2.Finance Temporary Staffing - $65,641 3.New I.T. Support Model - $204,000 4.Increase in Liability Insurance - $180,483 5.Increase in Worker’s Comp Insurance - $429,184 6.Skate Park Maintenance and Operations - $12,800 7.Bus Pass Sales Agreement Revenue - $25,000 8.Employee Leadership Program - $170,000 20 2014-15 Community Development Department 2014-15 Original Budget $2,250,600 2014-15 Revised Budget $3,396,450 Forecast Revenue in Excess of Budget $1,145,850 •$830,213 SOPC: Requests for Staffing •$315,637 Forecasted Revenue in Excess of Budget after SOPC Revenue 21 2014-15 Community Development Department Staffing Requests Estimated: 2014-15 Total Estimated: 2015-16 Total $76,778 $34,997 $156,371 - $40,940 - $96,124 - $50,000 - $420,213 $34,997 Administration - Public Information Planning - Planning Techs, Asst. Planner Building - Interns & Plan Check Engineering - Engineer Consultant & Plan Check Fire - Temp Contract Staffing Subtotal: $100,000 - $150,000 - $80,000 - $75,000 - $5,000 - $410,000 $0 Planning Consultant Services Building Plan Check Consultant Services Building Inspection Consultant Services Engineering Plan Check Consultant Services Fire Plan Check Consultant Services Subtotal: Staffing Consultant Costs Estimated: 2014-15 Total Estimated: 2015-16 Total TOTAL:$830,213 $34,997 22 Recommended Policy The City Manager may reallocate Development Services revenues for Development Services expenses that are projected to exceed the current revenue budget estimate to acquire temporary resources for the purpose of accomplishing the timely processing of development permit applications and perform other related permit processing activities while maintaining a balanced budget. In no case, shall the reallocation of revenues exceed 75% of the projected revenue that is estimated to exceed the current development fee revenue budget forecast. Any and all reallocated revenues shall be reported to the City Council on a semi-annual basis, as part of the Mid-Year and annual budget adoption presentations. The Finance Department shall review the justifications for the reallocations of these revenues and shall confirm the balance remaining in the Development Services Account. An account shall be established in the General Fund to solely account for the balance of development services fees received that may be reallocated for the purpose described above. 23 Employee Development & Leadership Program SOPC Enhance service to the community through implementation of competency based employee & leadership development program Use integrated, one-stop shop approach, implemented over two years One-time cost of $170,000 Address succession planning needs Leverage program adopted by County and provide foundation for ongoing collaboration and economies of scale 24 Employee Development & Leadership Program SOPC 25 Planning & Executive Workshop (Early 2015) Management Academy (6 days, Fall 2015) Supervisor Academy (5 days) & START Program (2 days) (Spring 2015) Advanced leadership development curriculum with hands on learning activities, high-profile speakers, and interactive experiences; 360˚ feedback instrument Mid-level to high-level leadership development curriculum, workshop based with various guest presenters, panels, and competency-based curriculum and experiential learning activities. First time and experienced supervisory development (and those considering supervision) in workshop based activities and learning experiences with broad exposure to key competencies for leading others. Pr o j e c t s & V e r t i c a l I n t e g r a t i o n Individual Contributor Workshops build foundational competencies (Spring 2015) Consideration of Funding Requests 2013-14 2014-15 2015-16 Total * OPERATING PROGRAMS Page No. General Fund Development Services - 1x costs C-17 795,216 795,216 Development Services - ongoing 34,997 34,997 69,994 Finance Temporary Staffing - 1x costs C-23 65,641 65,641 New I.T. Support Model - 1 x costs C-27 204,000 70,000 274,000 Increase in Liability Insurance - 1x costs C-35 57,700 57,700 Increase in Liability Insurance - ongoing 7,913 122,783 130,696 261,392 Increase in Worker's Compensation - ongoing C-38 87,445 429,184 307,765 824,394 Skate Park Maintenance & Operations- ongoing C-41 12,800 41,400 54,200 Bus Pass Sales Agreement (revenue) -ongoing C-45 (25,000)(25,000)(50,000) Employee Leadership Program 1x costs C-48 170,000 170,000 Total Operating Programs 95,358$ 1,867,321$ 559,858$ 2,522,537$ * Summary table on page C-16 of Proposed Budget omits two year total for Bus Pass Sales and Employee Leadership Program. Values are included in all budget calculations. 26 Other General Fund Highlights •Proposed budget recommends additional $300,000 for PERS side fund liability payment in 2014-15 •Engineering Development Review program and budget transferring from Public Works to Community Development program management •Funds set aside for: •Public Works Skills Based Pay $24,000 •Affordable Care Act $18,000 •Potential Public Safety overtime expenses $195,000 •Retiree Health Care fully funded based on most recent actuarial valuation $469,400 in the General Fund ($588,000 all funds) 27 Other Funds Highlights •Enterprise Funds consistent with June 10th Fund Reviews •Staff recommendation to restore Public Art funding back to 1% policy level or $29,900 in 2014-15 •Insurance Benefit Fund reflects $342,700 as a Transfer In from other funds for future increases in retirement costs •2014-15 based on 1% PERS costs •2015-16 based on 2% PERS costs •Law Enforcement Grant Fund reflects $260,110 for Office of Traffic Safety Grant – DUI enforcement •Boyson Ranch Conservation Fund to use $7,500 from its endowment fund 28 Recommendation •Adopt a resolution approving the 2013-15 Financial Plan Supplement and 2014-15 Budget •Approve amendments to the 2013-14 budgets of various funds •Adopt the revised resolution approving an amendment to the Financial Management Manual and the Budget and Fiscal Policies section of the Financial Plan, regarding the use of development review fees •Restore Public Art funding back to 1% policy level •Approve Traffic Impact Fee support for Debt Service equal to at least one-half of the annual payment 29 Questions 30 Appendix 33 On-going Revenues Over On-going Expenses 2014-15 One Time Revenues Total On-Going One-Time / Limited Term Development Services Revenue Increase 1,145,850 - 1,145,850 Total 1,145,850 - 1,145,850 Summary Total On-Going One-Time / Limited Term Revenues 59,138,300 57,992,450 1,145,850 Operating Expenditures 53,345,928 51,915,071 1,430,857 Other Sources (Uses) 7,958,514 5,421,814 2,536,700 Revenues and Other Sources Over (Under) Expenditures and Other Uses (2,166,142) 655,565 (2,821,707) 2014-15 SOPC's and One-Time Expenditures Total On-Going One-Time / Limited Term Operating Expenditures Development Services 830,213 34,997 795,216 IT Support Model 204,000 - 204,000 Finance Temporary Staffing 65,641 - 65,641 Santa Rosa Skate Park 12,800 12,800 Employee Leadership Program 170,000 170,000 Mid Year Dev Svcs Limited Term SOPC 196,000 196,000 Subtotal 1,478,654 47,797 1,430,857 Other Sources (Debt Service) Insurance Liability 2,065,494 2,065,494 Liability Insurance SOPC*180,483 130,696 49,787 Worker's Compensation Insurance SOPC*429,184 307,765 121,419 PERS Side Fund Liability 300,000 300,000 Subtotal 2,975,161 438,461 2,536,700 * one time cost for insurance SOPC’s reflects difference between 2014-15 and 2015-16 cost Public Safety PERS Savings Staff*Salaries PERS Rate Cost Rate Cost Fire Tier II 7 558,464 23.07%128,810 45.20%252,431 123,622 Police Tier II 7 563,253 21.46%120,891 45.20%254,596 133,705 Police Tier III 3 224,376 12.25%27,486.09 45.20%101,420 73,934 17 1,346,093 277,187 608,447 331,261 Current PERS Rate Tier I PERS Rate Estimated Savings *Note: Includes 2 vacant positions estimated at Tier II (one in police, one in fire)