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HomeMy WebLinkAbout05/17/1988, 2A - 1988-89 BUDGET REVIEW AND ANNUAL WORK PROGRAM MEETING DATE: �i►Itl�IbII�N�����ll ��l� City of San Luis OBISpo May 17, 1988 COUNCIL AGENDA REPORT I NUMBER -44 FROM: William C. Statler, Director of Finance SUBJECT: 1988-89 BUDGET REVIEW AND ANNUAL WORK PROGRAM CAO RECOMMENDATION Review and consideration of the 1988-89 Budget and Annual Work Program. OVERVIEW Under the City's 'two-year approach to financial planning and budgeting, the primary policy and financial guidelines used in preparing the FY 1988-89 Budget were established in the 1987-89 Financial Plan. As such, the proposed budget for 1988-89 builds from the groundwork laid in the 1987-89 Financial Plan, and reflects modest financial changes from that document. As noted in the City's 1987-89 Financial Plan, the City's financial position continues to be one of "health but not wealth" . However, as noted in the 1987-89 Financial Plan, rate increases will continue to be required in several of the City's enterprise funds (most notably water and sewer) in order to develop and maintain the financial resources required to support the City's operating and capital programs in these areas. In preparing the 1988-89 Budget, the following reviews have been held with the City Council : • Capital project review and field trip. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .02/09/88 0 Mid-year budget review Including initial 1988-89 revenue projections submitted to City Council . . . . . . . . . . .03/15/88 • Financial study session. . . . . . . . . . . . . . . . . . . . . . . . . . .04/11/88 • Capital improvement plan study session and review of proposed permanent personnel additions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .05/02/88 Based on projected revenues and beginning fund balances, adequate resources are available to fund the proposed expenditures and to maintain fund balance reserves at policy levels. 1988-89 BUDGET Provided in Attachments A and B are the proposed operating and capital budgets for FY 1988-89. In both attachments, the funding levels previously proposed in the 1987-89 Financial Plan are provided along with recommended adjustments. In the case of the operating programs, the 1987-89 Financial Plan estimate for 1988-89 has been adjusted to reflect approved Memorandums of Agreement and salary changes scheduled for 2�-1 �b '1111111IIIIIIIN1�11 city of san Luis oBi spo = COUNCIL AGENDA REPORT FY 1988-89. No adjustments have been made to reflect the impact on personnel costs which may result from negotiations currently underway with the Police Unit, nor any impact that may result from changes in management compensation. The following is a summary of projected revenues and proposed operating and capital expenditures for 1988-89 compared with the 1987-89 Financial Plan: 1987-89 Financial Plan 1988-89 (As Adjusted) Proposed Budget Variance Revenues $24,801,600 $26,914,600 $ 2, 113,000 Expenditures: Operating 22, 100,500 22,934,800 834,300 Capital 7,090,500 9,037,800 1 ,947,300 Operating Programs As reflected in Attachment A, modest changes (3.7X) are recommended to the operating programs from the adjusted levels proposed in the 1987-89 Financial Plan. The primary policy change recommended for 1988-89 is the continuation of funding for the General Plan update effort initiated in 1987-88, and the inclusion of an update to the City's Recreation and Park Element as part of this effort: • Supplemental funding for the update of the Land Use and Circulation Elements. . . . . . . . . . .$ 39,000 a Update of the Park and Recreation Element. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 84,700 It should be noted that the Recreation and Park Element update is projected to be a two-year program, and that $60.000 is estimated to be required to support this program in FY 1989-90. Additional information has been prepared regarding the inclusion of this work effort with the General Plan update and is included as a separate agenda item. In reviewing proposed changes to the 1988-89 operating budget, special attention was paid to the financial position of the General Fund, which is the backbone of the City's financial resources. Provided in Attachment C is a summary of projected changes in the General Fund's financial position for Fiscal Years 1987-88 and 1988-89. These changes in financial position have been based on realistic revenue projections and the proposed 1988-89 General Fund operating budget. As reflected in the summary, current year revenues will be sufficient to meet all current year obligations during 1988-89. Additionally, the General Fund position will be significantly improved over original 1987-89 Financial Plan projectinns summarized as follows: 2A IIINiql1lipmI.city of San Luis OBISPO -no COUNCIL AGENDA REPORT Projected General Fund Balance June 30, 1989 1987-89 Financial Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 2,262,800 1988-89 Proposed Budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,234,900 Variance - Favorable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 972, 100 It should be noted that the 1988-89 proposed budget includes funding for 3.25 additional authorized permanent positions as reviewed with the City Council on May 2, 1988: Department No. Engineering Technician. . . . . . . . . . . . .Public Works 1.00 Field Services Technician. . . . . . . . . .Police 1 .00 Recreation Coordinator. . . . . . . . . . . . .Recreation 1.00 Clerical Assistant. . . . . . . . . . . . . . . . .Community Development .25 Capital Programs Proposed changes to the 1988-89 capital budget (Attachment D) were reviewed with the City Council at the May 2, 1988 Capital Projects Study Session, and are reflected in the proposed capital budget. The proposed change for wastewater projects has been modified slightly since that time to more accurately reflect project scheduling: no construction expenditures are anticipated for 1988-89 (originally estimated at $2,000,000) ; and $1 ,000,000 in design costs are anticipated to be incurred during 1988-89, rather than the total estimated design cost of $1 ,500,000. As noted in the 1987-89 Financial Plan, implementation of the proposed water and sewer projects is dependent on rate increases to support required project financings. Significant progress has already been made in this area: sewer rate increases of 90% were approved by the City Council on April 5, 1988 to finance wastewater treatment plant design costs; and water rate increases were discussed with the City Council at their May 10, 1988 meeting for possible adoption at the June 6, 1988 meeting. During the May 2, 1988 study session, the City Council requested additional information regarding two proposed projects: site preparation at the civic center site after completion of the new library; and the installation of landscaped medians along Grand Avenue. In response to this request, a summary of the Facilities Master Plan has been distributed to the City Council ; and a report on the Grand Avenue medians will be available prior to the June 6, 1988 City Council meeting. a -3 city of san Luis ogispo i COUNCIL AGENDA REPORT Revenue Projections Provided in Attachment E are revenue projections for all funds for 1988-89. Although further refinements have been made, the projections are consistent with those presented to the City Council during the Mid-Year Budget Review and Financial Study Session . ANNUAL WORK PROGRAM Provided in Attachment F is a draft Annual Work Program for 1988-89. As discussed at the Financial Study Session held on April 11 , 1988, the draft plan builds upon the 1987-88 Work Program, with projects recommended for carry-over as appropriate. The proposed 1988-89 Budget reflects the resources required to support the goals and objectives of the draft Annual Work Program. SUMMARY The proposed 1989 Operating and Capital Budget has been prepared using the 1987-89 Financial Plan as its policy base. Overall , the City's projected financial position at the end of 1988-89 compares favorably with original 1987-89 Financial Plan estimates. Representatives from the operating departments will be available at the meeting to respond to any questions or concerns that the City Council may have regarding proposed changes or modifications to the 1988-89 Budget. EG88033/TXTELLA ATTACHMENT A CITY OF SAN LUIS OBISPO o 1988-89 OPERATING BUDGET 1987-89 RECOMMENDED PROPOSED FINANCIAL PLAN* ADJUSTMENTS 1988-89 ------------------------------------------------------------------------------------------- Puhlic Safety: Police Protection. . . . . . . . . . . . . . . . . . . . 4,072,100 34,800 4,106,900 Fire & Environmental Safety. . . . . . . . . . 3,283,400 34,000 3,317,400 Disaster Preparedness. . . . . . . . . . . . . . . . 55,100 0 55, 100 Public Utilities: Water Service. . . . . . . . . . . . . . . . . . . . . . ... 3,072,900 218,700 3,291 ,600 Wastewater Service. . . . . . . . . . .. . . . . . . . 1 .150,300 43, 100 1 ,193,400 Whale Rock Reservoir & Fishing. . . . . . . 415, 100 234,200 649,300 Special Assessment Districts. . . . . . . . . 8,500 0 8,500 Transportation: Streets/Flood Control. . . . . . . . . . . . . . . . 1 ,318, 100 15,000 1 ,333,100 Parking Operations & Maintenance. . . . . 340,000 32,500 372,500 Parking Enforcement. . . . . . . . . . . . . . . . . . 72,100 0 72,100 Municipal Transit System. . . . . . . . . . . . . 513,600 0 513,600 Vehicle & Equipment Maintenance. . . . . . 190,700 0 190,700 Leisure, Cultural , and Social Services: Parks and Recreation: Recreation and Aquatic Programs. . . . 1 ,268,200 0 1 ,268,200 Landscape, Parks, & Swim Center Maintenance. . . . . . . . . . . . . . . . . . . 860,100 0 860,100 Tree Maintenance. . . . . . . . . . . . . . . . . . . . . 211 ,700 0 211 ,700 Golf Course. . . . . . . . . . . . . . . . . . . . . . . . . . 208,900 6,600 215,500 City/County Library. . . . . . . . . . . . . . . . . . 5,000 0 5,000 Community Promotion. . . . . . . . . . . . . . . . . . 220,000 0 220,000 Human Relations. . . . . . . . . . . . . . . . . . . . . . 193, .100 0 193, 100 Community Development: Planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789,000 129,000 918,000 Construction Development: Engineering. . . . . . . . . . . . . . . . . . . . . . . . 709,900 6,700 716,600 Construction Regulation. . . . . . . . . . . . 487,800 30,000 517,800 Economic Development - Business Improvement Area (BTA) . . . . 111 ,000 27,500 138,500 General Government: City Council . . . . . . . . . . . . . . . . . . . . . . . . . 78,800 0 78,800 General Administration. . . . . . . . . . . . . . . 285,700 0 285,700 Legal Services. . . . . . . . . . . . . . . . . . . . . . . 171 ,400 0 171,400 City Clerk. . . . . . . . . . . . . . . . . . . . . . . . . . . 205,500 0 205,500 Finance Administration. . . . . . . . . . . . . . . 478,600 0 478,600 Personnel Administration. . . . . . . . . . . . . 276,000 0 276,000 Public Works Administration. . . . . . . . . . 215,500 7,200 222,700 Buildings (Operations & Maintenance) . 357,600 15,000 372,600 Non-Departmental. . . . . . . . . . . . . . . . . . . . . 474,800 0 474,800 ------------------------------------------------- Total. . . . . . . . . . . . . . . . . . . . . . . . . 22, 100,500 834,300 22,934,800 * Adjusted to reflect approved Memorandums of Understanding and other salary changes scheduled for 1988-89. J co SOP ATTACHMENT B CITY OF SAN LUIS OBISPO o 1988-89 CAPITAL IMPROVEMENT BUDGET 1987-89 PROPOSED PROPOSED FINANCIAL PLAN CHANGE 1988-89 ---------------------------------------------------------------------------------------- Public Safety: Fire & Environmental Safety. . . . . . . 484,000 0 484,000 Public Utilities: Water Service. . . . . . . . . . . . . . . . . . . . . 2,987,000 0 2,987,000 Wastewater Service. . . . . . . . . . . . . . . . 0 1 ,045,000 1 ,045,000 Transportation: Streets/Flood Control. . . . . . . . . . . . . 2,192,000 508,000 2,700,000 Parking Operations & Maintenance. . 0 60,000 60,000 Leisure, Cultural , and Social Services: Parks and Recreation. . . . . . . . . . . . . . 352,000 242,300 594,300 Cultural Facilities. . . . . . . . . . . . . . . 38,500 0 38,500 Golf Course. . . . . . . . . . . . . . . . . . . . . . . 109,000 0 109,000 Community Development: Planning. . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 0 15,000 Cultural Heritage. . . . . . . . . . . . . . . . . 0 12,000 12,000 General Government: Administration. . . . . . . . . . . . . . . . . . . . 67 ,000 0 67,000 Buildings. . . . . . . . . . . . . . . . . . . . . . . . . 846,000 80,000 926,000 ------------------------------------------------- TOTAL. . . . . . . . . . . . . . . . . . . . . . . . 7,090,500 1 ,947,300 9,037,800 ------------------------------------------------- ------------------------------------------------- aA - � ATTACHMENT C CITY OF SAN LUIS OBISPO SUMMARY OF CHANGES IN GENERAL FUND BALANCES FISCAL YEARS 1987-88 AND 1988-89 ESTTMATF.D PROPOSED 1987-88 1988-89 ------------------------------------------------------------------------------- Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.672,000 15,077,000 Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,667,300 14,346,500 Other Financing Sources (Uses) : Operating Transfers In. . . . . . . . . . . . . . . . . . 248,500 248,500 Operating Transfers Out. . . . . . . . . . . . . . . . . (1 ,390,500) (1 , 140,300) Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 ,300 ---------------------------------- Total Other Sources (Uses) . . . . . . . . . . . (1 , 142,000) (730,500) ---------------------------------- Fund Balance, Beginning of Year. . . . . . . . . . . . . . 3,372,200 3,234,900 Fund Balance, End of Year. . . . . . . . . . . . . . . . . . . . 3,234,900 3,234,900 ATTACHMENT D SUMMARY OF SUPPLEMENTAL CAPITAL PROJECTS o 1987-89 FINANCIAL PLAN 1987-89 Phase Type Supplemental (1 ) (2) Cost PROJECTS APPROVED SUBSEQUENT TO THE ADOPTION OF THE 1987-89 FINANCIAL PLAN: Public Utilities (Wastewater) : Wastewater Plan Implementation (Total project cost: D $ 1 ,500,000 C 22,700,000 D CRP $1 ,000,000 Transportation: Upstream detention dams (Flood Control) S CFP 15,000 Pavement Management (Streets) C CRP 140,000 Leisure, Cultural , & Social Services (Parks & Landscape) : Mitchell Park Memorial Modifications D/C CRP 25,000 French Park: 1988-89 (Total cost: $362,200) C CFP 78,300 PROJECTS PREVIOUSLY SCHEDULED RECOMMENDED FOR EARLIER IMPLEMENTATION OR REQUIRING SUPPLEMENTAL FUNDING: Leisure, Cultural , & Social Services (Parks & Recreation) : Santa Rosa Park Irrigation (Total cost: $99,000 Funding Scheduled: $65,000) C CRP 34,000 Laguna Lake Park Expansion (Total Cost: $178,000 Funding Scheduled: $ 73,000) C CFP 105,000 General Government (Buildings) : Civic Center Improvements Site preparation/ demolition C CFP 30,000 - Cg 5-17-88 MAJOR CAPITAL PURCHASES TO RE MADE FROM EQUIPMENT REPLACEMENT RESERVES: Public Safety: Computer Aided Dispatch A CRP (Expenditure Scheduled for 1988-89: $270,000) Aerial Fire Truck (Expenditure Scheduled for 1990-91 : $450,000) A CRP Pumper Fire Engine (Expenditure Scheduled for 1989-90: $190,000) A CRP NEW PROJECTS: Public Utilities (Wastewater) : Sewer Main Reconstruction C CRP 45,000 Transportation: Streets: Landscape Grand Ave Islands D/C CFP 123,000 Flood Control : Improved Access for Prefumo Arm S CFP of Laguna Lake Zone 9 Projects C CRP 230,000 Parking: Resurface Parking Lots C CRP 60,000 General Government (Buildings) : Corporation Yard Site Improvements A CFP 50,000 Community Development (Cultural Heritage) : Railroad Tower Rehab/ Phase 1 - Hazard Abatement (Total project cost: $51 ,700) C CRA 12,000 POTENTIAL PROJECTS PENDING COMPLETION OF FACILITIES MASTER PLAN: Corporation Yard Improvements Recreation Department Offices Fire Station No. 1 Senior Center City Hall Office Expansion NOTES: 1. Phases include: S - Study; D - Design; C- Construction; A - Acquisition ^ ^ 2. Types include: CRP - Capital Replacement Plan d�•�I CFP - Capital Facilities Plan 5-17-88 ATTACHMENT E CITY OF S*WIG OBISPO 0 1988-89 R&RE BY PH *0 SOLRCE Special Capital &1e 1987-89 General Revenue Project Enterprise Rock Proposed Financial Fund Funds Funds Funds Fund Budget Plan TAO: Property 1,310,000 666,600 1,3213,000 3,306,600 33003,000 Sales &Use 600000 6,200 000 6400,000 Transient Lodging 100000 1,200000 960000 Franck ire 471,200 471,200 418,500 Business Tax 455,300 68,600 523,900 474,300 Documentary Transfer 100000 100,000 905000 Uti I ity ll5ers 2,046,500 2,046,500 1,762,40D Construction 218,000 218,000 220,OT 11,793,000 953,200 1,320,000 14,066,200 12,928,200 LICBE S& PeR111IT5 190500 190,500 308,7JC FINE & FORFEINE 410,000 70,000 480,000 392,000 :NaTW& PIRVEM: interest Earnings 616,5M 6700 342,400 383,000 80,000 1,488,900 114251CCO Rents & Concessions 91000 9,000 12,DOD 625,500 67,000 342,400 383,000 80,000 1497,900 1,4377000 REVEN I N5 & CR*TS: ,Ittor Velkicie In-lieu 1,25740 1,257,400 11270800 Cigarette Tax In-lieu 138,800 138,800 143,000 CasaI ine Tax 465,900 485,900 569,000 Sales Tax-Trans (93M) 2191000 381600 602,600 752,000 Otker Suhv & Grants 139,800 59,000 198,800 395,000 1,536,000 761900 383,600 243,�J 3,129,800 ERVICE OWRS 447,000 466,900 246,000 5417,000 7,07000 5,867,900 TRY& AW REVEN-E 8,300 805,300 813,600 531,OOD OTl`R RB,E4E5 75,000 6,000 25400 106,000 207,000 TOTAL 15,077,000 1,493,100 2,697,300 6,761,900 885,300 26,914,600 Z4,801,600 4zQ4 - io . 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