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FROM: Wayne Padilla, Director of Finance and Information Technology
SUBJECT: GENERAL FUND FIVE YEAR FISCAL FORECAST: 2013-18
RECOMMENDATION
Review and discuss the results of the General Fund Five-Year Fiscal Forecast for 2013-18.
DISCUSSION
Forecast Purpose
The purpose of the attached Five-Year Fiscal Forecast is to assess the General Fund’s ability over
the next five years to accomplish five things:
1. Deliver current service levels;
2. Maintain existing infrastructure, fleet, information technology (IT), and facilities;
3. Preserve the City’s long-term fiscal health by aligning operating revenues and costs;
4. Maintain fund balance at policy levels; and
5. Reinvest in the General Fund supported Capital Improvement Program, particularly in areas
that are underfunded such as infrastructure maintenance, fleet replacement, IT replacement,
and facilities maintenance.
It is important to stress that the forecast is not the budget: it does neither make expenditure
decisions nor revenue decisions. Its sole purpose is to provide an “order of magnitude” feel for
the City’s ability to continue current services, maintain existing assets and fund new initiatives.
Ultimately, this forecast cannot answer the question: “can the City afford new initiatives?” This
is a basic question of priorities, not of financial capacity. However, the forecast helps identify
the key factors affecting the City’s fiscal outlook. Additionally, while the forecast does not make
budget decisions, it gives the Council, the community, and staff an early “heads-up” in assessing
how difficult making these priority decisions will be.
Summary of Forecast Findings
This fiscal forecast indicates that the City is making progress on its journey to financial
sustainability. While no city has fully recovered from the effects of the worst recession since the
Great Depression, there is reason for cautious optimism here in San Luis Obispo. In general,
revenues have begun to recover and cost containment measures, including reform of the City’s
retirement benefits, are working. The fiscal forecast indicates prudent decision making has placed
the City in a position where revenues will exceed expenditures; it can continue to provide
services to the community as prioritized in the financial planning process; it will meet the policy
objective of a 20 percent reserve; it will absorb additional required operating costs and reinvest in
the CIP.
12-10-12
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General Fund Five-Year Fiscal Forecast: 2013-18 Page 2
As it relates to revenue, the City is experiencing a resurgence of several revenue sources (namely
sales tax, transient occupancy tax (TOT), utility users tax and developer fees) while other
revenues are holding steady. With respect to development
fees, the City must not assume that it has returned to a period
of continuing activity and must not base decisions on the
assumption that these revenues will continue to come in at
these levels. The City must also be alert for any effects that
may result from the federal government’s in ability to adopt a
budget and maintain spending within the existing debt ceiling.
Containing operating expenditures, particularly related to
personnel costs, has been a primary focus on the financial
sustainability journey over the past two years. Through budget-driven negotiations, the City has
set the stage for ongoing savings that will deliver $3.1 million per year in reduced personnel
costs in addition to the savings that will come about from the actions taken to create new
retirement benefit programs for new hires. The forecast assumes that employer cost increases in
the Public Employees Retirement System (PERS) program will take effect starting in 2015-16
and begins to capture 1% of payroll in 2014-15 and 2% in 2015-16 in order to begin setting aside
the resources needed to fund the higher employer rates. Staff continues to monitor all actions
being considered by PERS to increase employer costs and is prepared to create new cost forecasts
as that information becomes available. Staff is also assessing how to limit costs in the future as it
relates to retirement costs (paying down the side fund or any other long term retirement liability)
and insurance programs for workers compensation and general liability.
The forecast also assumes significant, on-going and increasing re-investment in the City’s
General Fund supported capital assets. In the last two years there have been multiple occasions
when the City Council expressed a desire to reinvest in the City’s existing assets (infrastructure,
information technology, fleet and facilities) as well as new “bricks and mortar” assets. Examples
of new investments will include bicycle lanes, pedestrian improvements, and the Santa Rosa
skate park. The forecast assumes re-investment in existing assets of all types: Information
Technology equipment, vehicles and other rolling stock, building as well as infrastructure such as
streets and stormdrains. It is worth noting that the amounts reflected after 2014-15 are place
holders and may change depending upon the direction that is received from the City Council and
changing financial conditions.
It is important to note that while there is increasing re-investment in the City’s capital
infrastructure, no funds have been set aside for purposes of enhancing operating programs or
addressing the organization’s capacity to achieve the enhanced capital expenditures that are
planned. In other words, there is no pre-planned set-aside for staff, consultants or other expenses
associated with new or enhanced operating programs. This approach was taken because it is
virtually impossible to project City Council and community priorities for operating program
enhancement. In sum, as the Council evaluates the City’s financial position, it should consider
that different allocations from those identified in the forecast may be warranted based on the
outcomes of the goal setting process and the needs associated with achieving those outcomes.
Forecast Findings
Prudent and thoughtful
policy decisions have lead
to a stronger financial
condition which is cause
for cautious optimism.
However, uncertainties
remain.
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General Fund Five-Year Fiscal Forecast: 2013-18 Page 3
There is a second report prepared for this evening’s agenda which addresses the status of Major
City Goals and also reviews the unaudited financial results from 2012-13. That report should be
read in conjunction with this report on the fiscal forecast since the starting point of the forecast is
the ending balance of the last completed fiscal year.
As indicated in that report, the ending fund balance grew by $5.3 million, which is $5.1 million
more than was expected. There were three primary reasons for this happening:
1. Revenues exceeded budget estimates by $1.4 million as development fees, sales tax,
TOT, Utility User’ Taxes and other revenues exceeded a conservative forecast for the
year. (Staff will be evaluating these results to determine what changes if any should be
made to the forecast revenues as part of the mid-year budget update process that will
culminate in a presentation to the City Council in February.)
2. Cost savings totaled $2.7 million, even after counting encumbered funds that will be
carried forward. This level of savings exceeded the forecast amount by $633,000;
3. A correction of $1.8 million was made to the fund balance to adjust prior years’ accrued
sales tax amounts in line with the information provided by the Board of Equalization.
(This adjustment will not have a detrimental effect on future sales tax estimates currently
in the forecast.)
While the forecast reflects the one-time use of a portion of the excess General Fund reserve, that
amount which is above the minimum 20% policy reserve amount. This spending was approved
by the City Council as part of the 2013-15 Financial Plan and includes $1.2 million for Skate
Park construction; $500,000 for replacement of Information Technology equipment; $500,000
for reinvestment in Major Facility Replacement projects; $20,000 for permit streamlining
implementation; and $50,000 for Revenue Measure Outreach and Education. It is important to
note that had these one-time costs not been planned, the General Fund would reflect excess
revenues over expenditures of $141,000 in the current year. All other years shown in the forecast
reflect revenues in excess of expenditures.
It must be mentioned here that the previous commentary on the City’s fiscal outlook assumes that
voters renew the current general purpose half-cent sales tax measure or another similar measure
in 2014. If this does not occur, revenue from the half-cent sales tax would no longer be collected
effective April 1, 2015, affecting the last three months of the 2013-15 Financial Plan period. If it
is not renewed and the City takes no corrective action, the City would spend as much as $7.7
million more during the forecast period than it garners from revenues resulting in a budget gap
(that amount below the minimum 20% policy reserve) that would cumulatively total $24 million
by 2017-18. This is the worst case scenario if the City took no corrective action between 2014-15
and 2017-18. Starting next month, staff will begin preparing the outline of a contingency plan
and will then formulate a budget adjustment scenario that will ultimately be presented to Council
in June 2014 for review.
In order to illustrate the impacts of eliminating Measure Y resources, a secondary Five-Year
Fiscal Forecast is included. (All other assumptions remain unchanged.) This separate forecast
highlights the loss of revenue should the revenue stream from Measure Y cease. As outlined to
the Council on September 4, 2012, this information is provided so that the Council and the
community could understand the magnitude of the impacts of the half-cent sales tax on the
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General Fund Five-Year Fiscal Forecast: 2013-18 Page 4
services being provided. At that meeting, the Council approved the process by which this issue
would be outlined as part of the forecast in order to provide context.
The report that accompanies the fiscal forecast contains a host of facts about the forecast process
and the factors used to determine each year’s revenue and expenditure levels. While the forecast
and the report on the status of the 2012-13 Fiscal Year represent positive fiscal news, it is best to
follow the City’s practice of waiting for the mid-year update to occur in February before any
decisions are made with regard to the use of the larger reserve for one-time costs and the
improving revenue picture. This will give staff an opportunity to assess these results, look at
trends occurring within the current year and return to the City Council with a complete update on
all of this information.
SUMMARY
The City will go into 2013-15 with a number of positive outlooks compared with many
communities in California:
1. A balanced 2013-14 budget and reserves that are above minimum policy levels.
2. Strong financial policies, systems and procedures in place.
3. Cost containment measures that have already been put into place.
4. Excellent Council leadership.
5. Committed and engaged citizens.
6. Excellent organization and capable staff.
7. A tradition of responsible stewardship.
This “civic infrastructure” is simply not in place in many other cities and it will serve the City
well in successfully meeting the fiscal challenges ahead. Moreover, the fact remains that, in
good times or bad, the fundamental policy questions posed by the budget process are the same: of
all the things we want to do in making our community an even better place, which are the most
important and what is the resource trade-offs needed to accomplish them?
ATTACHMENT
1. General Fund Five-Year Forecast: 2013-18
T:\Council Agenda Reports\2012\2012-12-18\Budget Foundation for 2013-15 Financial Plan- 5 YR Financial Forecast (Lichtig-Codron-
Stanwyck)\CAR13-18Five year Forecast.doc
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General Fund Five Year Forecast for the Period from 2013-2018 (December 2013 Update)
TABLE OF CONTENTS
INTRODUCTION
Overview
Purpose and Summary of Forecast Findings 1
Where We’ve Been 2
Revenue Forecast 3
Expenditure Forecast 5
Summary 8
Synopsis of Major Assumptions
Demographic Trends 9
Expenditures 9
Key Revenues 9
Fund Balance 10
FIVE YEAR FORECAST SUMMARY
Forecast of Revenues, Expenditures and Changes in Fund Balance 12
Forecast of Revenues, Expenditures and Changes in Fund Balance-
without measure Y 13
Attachment 1
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OVERVIEW
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PURPOSE AND SUMMARY OF FORECAST FINDINGS
PURPOSE:
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:
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.
The forecast does this by projecting likely revenues and subtracting from
them operating costs, debt service and the Capital Improvement Program
(CIP). The balance remaining is available for Council decision on whether
to build reserves to guard against future financial uncertainties or make
additional investments to maintain infrastructure, create new capital
improvements or to finance operating initiatives.
It is important to stress that this forecast is not a budget.
The forecast does not make expenditure decisions or formally adopt
revenue numbers. Its sole purpose is to provide a context for considering
the City’s ability to continue current services, maintain existing assets
and/or fund new initiatives. Ultimately, this forecast cannot answer the
question: “can we afford new initiatives?” This is a basic question of
priorities. Funding new initiatives within existing resources would require
adjustments within the existing budget to provide the required resources.
As a result, making trade-offs and determining priorities is a key aspect of
the budget process. The forecast is a helpful tool in this regard because it
provides an important framework for decision-making by projecting the
revenues that will likely be available in the future to cover the cost of
maintaining current service levels.
SUMMARY OF FINDINGS:
The City’s efforts to control costs have been successful and are ongoing.
Policy leadership by the City Council and implementation efforts by City
employees have led to this outcome.
Prudent spending and financial
management allow the city to
consistently keep expenditures under
budget in both operational and
staffing categories. These cost savings
coupled with past budget reductions
and modest revenue enhancements are helping to fund services for
residents and the community while allowing additional investment in
critical infrastructure to occur. It should be noted that revenues will be
reduced by over $7 million and an overall funding shortfall will occur after
2014-15 if Measure Y is not reauthorized by the voters in November 2014.
If Measure Y is not reauthorized, those revenues would cease to be
collected in April 2015. The impact of that potential loss is shown in a
separate fiscal forecast on page 13.
Why is the forecast better than what was expected two years ago?
There are two primary reasons why the forecast continues to show
improvement. As stated above, the City’s cost control measures have
been effective and growth in the General Fund’s major revenues is
expected to continue at a modest rate throughout the forecast period. As
an example, key revenue sources such as sales tax and Transient
Occupancy Tax (TOT) have rebounded and have been growing for the past
three years with TOT exceeding its pre-recession peak in 2011-12. The
forecast projects continued moderate growth in these sources. After
three years of minor declines, property tax revenue returned to positive
PROGRESS ON THE
PATH TO
FISCAL
SUSTAINABILITY
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OVERVIEW
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growth in 2012-13 with very modest increases forecast for the future.
While the revenue picture is positive, especially compared to the recent
past, the rate of increases projected is less than the rates seen in previous
periods of economic growth. The Fiscal Forecast reflects the belief that
revenue growth will be “slow and steady” as a symptom of the deep and
prolonged recession that began in late 2006. There is more discussion
later in this report regarding specific revenues related to the results seen
in 2012-13.
On the cost side of the equation, the Council took decisive action to
reduce expenditures with the adoption of the 2011-13 Financial Plan. This
was in addition to actions taken during previous financial plans to reduce
costs and address the budget gap. Most recently, these expenditure
reductions have been accomplished by controlling operating costs,
reducing staffing levels, negotiating personnel compensation reductions,
and constraining investment in the Capital Improvement Program. For the
longer term, the City has achieved second tier pension formulas with
reduced benefits for all new City employees. This is a critical element in
the City’s plan to contain costs for future hires who are already members
of the Public Employees Retirement System (PERS) because State pension
reform only establishes reduced pension formulas for new PERS members.
These actions, coupled with the City’s plan to begin addressing the
proposed increases in the cost of PERS retirement by taking those costs
into account a year before they are scheduled to begin in 2015-16 will
help the City minimize the effect of future pension cost increases, which
have and will continue to be a major cost driver and source of uncertainty.
More information is provided on expenditure trends later in this report.
The City continues to benefit from the lower interest rates that were
obtained from the two debt refinancings that were completed in 2011-12.
In both cases the City received an AA+ implied General Obligation bond
rating from Fitch Rating Services and the City compares favorably on many
indices with certain AAA-rated cities.
WHERE WE’VE BEEN
The City’s journey to financial sustainability has been on-going, and it is
helpful to review where it has been and the steps that have been taken in
response to the constant changes in our financial condition.
In the 2009-11 Financial Plan, Council responded to declining revenues
caused by the severe recession and unanticipated staffing cost increases
with actions to reduce the budget by $11.3 million. While reserves and
added revenues played an important role, about 80% of the budget-
balancing strategy again relied upon expenditure reductions with the bulk
provided by CIP reductions. Reductions from 3-11% by department were
imposed with the deepest reductions occurring in the support
departments. These reductions included 17.2 regular positions and 6.4
temporary full time equivalent (FTE) positions in the General Fund. This
also included salary deferrals by employees totaling nearly $1 million.
The 2009-11 Financial Plan Supplement (2010-11 budget) included
additional cuts of almost $1 million in operating expenses and almost $2
million in CIP reductions.
The 2011-13 Financial Plan focused on permanent, on-going changes as
much as possible, with departmental operating budgets and employee
concessions being the two largest elements of the budget balancing
strategy. Revenue enhancements were also part of the strategy, but were
limited due to recognition that the City’s long-term sustainability depends
more on cost control than on development of new revenue sources.
Therefore the 2011-13 Financial Plan included ongoing employee
concessions totaling $3.1 million in all funds, or $2.6 million in the General
Fund, as indicated in the chart below. This financial objective set the
stage for Council labor relations objectives that included pension reform
and a 6.8% reduction in employee total compensation.
Attachment 1
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OVERVIEW
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General Fund Budget Balancing
Elements 2011-12 2012-13
Revenue enhancements $ 301,300 $ 351,300
Operating budget reductions 1,812,000 1,956,000
Employee concessions 1,300,000 2,600,000
Operational efficiencies /NOBBs 50,000 100,000
Fiscal Health Contingency Plan Elements Still Active
Twice since 2008, the City has implemented actions in its fiscal health
contingency plan. The first implementation was in response to the
adverse financial impacts of the 2008 binding arbitration decision (binding
arbitration has since been eliminated through a Charter amendment
approved by City voters on August 30, 2011). Actions were again taken
due to the significant downturns in revenues in 2009-10, which included a
hiring freeze. During 2012-13, a “hiring chill” remained in place requiring
the City Manager to approve all hiring actions including backfilling
budgeted vacant positions. The City Manager’s judicious use of the “chill”
resulted in considerable salary savings without the potentially arbitrary
impact on operations that can be caused by a full hiring freeze.
Reserve Levels Have Been Maintained
The City made strategic use of its reserve funds as lower operating
expenditures produced a proportionally smaller reserve requirement.
Reserves have been maintained at or above the policy level of 20% of
operating expenses throughout the financial difficulties of the last several
years. Since 2010-11 the City achieved higher than expected revenues,
and expenditure savings, resulting in higher than projected fund balances.
(The results for 2012-13 are based on preliminary, unaudited values.)
REVENUE FORECAST
Reset of Revenue Base
Beginning in 2006, the United States experienced the deepest and longest
recession since the Great Depression. The bursting of the housing bubble
was followed by a crisis in the financial markets, high levels of
unemployment and a sharp decline in consumer spending. All of this had
a negative effect on the local economy starting in 2008. Since then,
several of the City’s top revenues declined or at best stayed flat. Sales tax
(including Measure Y), property tax and transient occupancy tax (TOT)
account for about two-thirds of all funding sources in the General Fund.
As stated earlier, these sources have begun to recover at varying rates
with a continuing forecast for “slow and steady ”increases to continue
throughout the forecast period. The recovery outlook has been tempered
with a bit of uncertainty regarding concerns that there could be future
economic turmoil caused by unresolved economic issues, including the
on-going lack of a federal budget and challenges in addressing the federal
government’s debt ceiling. Uncertainty in the European economy remains
a concern as well. This long slow recovery with low growth rates and
continued uncertainty is often referred to as the “new normal.” It also
means that revenue forecasts must be understood in context. Because of
the various uncertainties associated with the current economic recovery,
staff has erred on the conservative side when making these projections.
Sources used in developing revenue projections for the forecast include
long and short-term trends in key City revenues, data from the Central
Coast Economic Forecast project; information developed by the State
Legislative Analyst and the State Department of Finance; and materials
prepared by the League of California Cities and State Controller's Office.
To assist in improving the reliability of revenue forecasts, staff has
engaged the services of Beacon Economics to provide assistance in
developing growth trends for a number of key revenues sources.
Beacon’s projections will be discussed in the applicable narrative
discussions below.
Attachment 1
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OVERVIEW
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Ultimately, the revenue projections in this forecast reflect staff's best
judgment about the performance of the local economy during the next
five years and how it will affect the City's General Fund revenues.
Forecast
Sales Tax. For the last two fiscal years the City’s growth estimates for
Sales Tax revenue have been exceeded. These estimates were last
updated as part of the 2011-13 Financial Plan and the 2012-13 budget.
The 2013-14 growth rate projection is 3.6%, followed by a 3.7% increase in
2014-15, 3.8% in 2015-16, 4.94% in 2016-17(which reflects anticipated
revenues to be generated from the Chinatown project)and 4% in 2017-18.
The following table includes the City’s most recently approved sales tax
growth projections, along with projections provided by Beacon Economics
and HdL, the City’s sales tax advisor. The data indicates varying degrees of
confidence in taxable sales growth over the forecast period. Staff
recommends using HdL’s growth assumptions in the current forecast
calculation, consistent with our conservative approach to projecting
revenues during this uncertain economic recovery.
Sales Tax Growth Projections
2013-14 2014-15 2015-16 2016-17 2017-18
Staff 3.74% 4.0% 3.8% 4.94% 4.0%
HdL 5.0% 4.0% 4.0% 4.0% 4.0%
Beacon 5.0% 6.4% 8.0% 7.8% 6.6%
Measure Y. The growth projections for Measure Y revenue, the local half-
cent sales tax, are the same as identified in the previous table for all sales
tax revenue. This document includes a forecast of revenue, expenditures
and changes in fund balance without Measure Y renewal. It should be
noted that if Measure Y is not renewed, revenue from the half-cent sales
tax would no longer be collected effective April 1, 2015. This reduction in
revenue would affect the last three months of the 2013-15 Financial Plan
period, and the last three years of the forecast. As shown in the forecast,
if Measure Y is not renewed a negative gap between revenues and
expenditures would begin in 2014-15 and grow to $7.7 million in 2017-18.
Actual consideration of the tradeoffs that would be required to balance
the budget if the half-cent sales tax is eliminated will be considered
beginning in January 2014, with decisions by the City Council in June 2014.
This schedule gives the Council and the community the opportunity to
consider this question separately and independently from the vast
number of policy questions to be considered as part of the 2013-15
Financial Plan Supplemental budget adoption for the 2014-15 Fiscal Year.
TOT Revenues. Revenues from transient occupancy tax (TOT) ended 2012-
13 up 6.7% from the prior year, reaching $5,572,000. This surpassed the
2007-08 pre-recession peak of $5,054,700 by over 10%. TOT has
benefitted from the extensive marketing efforts of the Tourism Business
Improvement District and the community promotions program. Having
achieved and surpassed the pre-recession peak, staff expects the rate of
growth to moderate some. The market has recently seen growth in both
room rates and the number of rooms available with the opening in May
2012 of the 84-room Hampton Inn, and the October 2012 opening of the
17-room Granada Hotel.
Current projections include the anticipated effect of Monterey Place (11
rooms) in 2014-15 and the Garden Street Terraces project (48 rooms)
beginning in 2015-16. Staff has revised the dates for receiving TOT from
these hotel properties to reflect the latest information on development
plans received by the Community Development Department.
Based on the analysis provided by Beacon Economics staff is projecting
net TOT revenue growth of:
Transient Occupancy Tax Growth Projections
2013-14 2014-15 2015-16 2016-17 2017-18
6.56% 2.6% 3.3% 5.65% 5.74%
Property Taxes. Property tax revenues in 2012-13 were $12.7 million,
which included a one-time refund from the County for previously paid
administrative fees totaling $620,000. Taking the one-time payment out
of the total, property taxes increased by 2% over the prior year, making
this the first increase following three years of small declines. Since its
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OVERVIEW
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2008-09 peak, property tax revenue declined 4.8%, far less than most
communities in California and the result of the revaluations of properties
by the County Assessor’s office based on market price declines. Based on
preliminary data from the Assessor, staff projects continued growth at a
modest rate as shown below.
Based on data provided by Beacon Economics and information obtained
from the County, staff projects the following through the forecast period:
Property Tax Growth Projections
2013-14 2014-15 2015-16 2016-17 2017-18
4.4% 1.5% 2.69% 3.0% 3.4%
The initial increase in 2013-14 reflects the lowering of property tax
administrative fees by the County, which will continue throughout the
forecast period.
Grants. The forecast does not reflect the receipt of any “competitive”
grant revenues over the next five years. However, our experience tells us
that we will undoubtedly be successful in obtaining grants, but these are
for restricted purposes, and are usually for new facilities, programs and
infrastructure, not the “maintenance-only” activities assumed in the
forecast.
Other “formula grant” programs like Community Development Block
Grants (CDBG) will help in achieving CIP goals. However, their use is highly
restricted by the granting agencies. Recent information received from San
Luis Obispo County indicates that reductions in the overall amount of
CDBG funds and in the amount allowed to be spent on the administration
of the grant are to be expected starting this year and continuing into the
future as adjustments are made based on the federal budget guidelines.
For these reasons, the forecast does not include any funding from these
sources.
Development Impact Fees. These are subject to changes in the
construction market, over which the City has no control. Depending upon
growth that occurs in the community over the next five years,
transportation impact fees will generate funds to help offset funding for
transportation improvements. However, these revenues are restricted
solely to funding improvements related to new development. On a much
smaller scale, the City also receives park, open space and housing in-lieu
fees, which are also restricted to funding improvements related to those
specific programs as they relate to new development. Because of these
restrictions they are not included in this forecast.
EXPENDITURE FORECAST
Operating Costs
Based on requests from Council, staff has broken down the forecast of
operating expenses between staffing and non-staffing costs. This is logical
because most City services, such as public safety and building permit
inspections, are provided by City staff. It is also helpful to organize
operating costs in this way because the factors driving staffing cost
increases, such as retirement costs, are completely different and warrant
much greater analysis than non-staffing operating costs.
Operating Costs - Staffing
Basic Compensation. Staffing costs have represented up to 80% of total
operating expenditures in the General Fund and have for several years
been the driving force behind increases in the costs of providing City
services. This has primarily been a function of rising retirement costs
driven by substantial increases in the employer contribution rates
required by the California Public Employees Retirement System, known as
CalPERS or simply PERS.
As mentioned above, the City Council included a projection of $2.6 million
in annualized reductions in personnel compensation in the General Fund
($3.1 million in all funds) as part of the 2011-13 Financial Plan. The plan
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OVERVIEW
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anticipated achieving $1.3 million in savings during the 2011-12 year and
the full $2.6 million in each year thereafter. Achieving the annual savings
goal required substantial negotiation with each bargaining unit and
ultimately resulted in a variety of phased in approaches to achieve the
desired reduction. The last phased-in reduction will occur in July 2014 and
the forecast reflects these phased in reductions through the 2014-15 fiscal
year.
Reductions in compensation were achieved in a variety of ways,
depending upon the bargaining unit. However, all employees will pay the
full Member contribution to PERS (8% or 9%) by July 2014. Further, none
of the labor agreements or compensation resolutions include any sort of
cost of living adjustments for salaries during the term (through the end of
December 2014 or 2015). Considering it will be at least four years that
most employee classifications have not been adjusted, staff forecasts that
compensation will increase at the assumed rate of inflation for the 2015-
16 year and beyond.
PERS Retirement Costs. Starting with the 2011-16 forecast, staff
projected fairly high increases in PERS employer contribution rates over
the forecast period based on the rapid rises seen in preceding years and
the knowledge that PERS was reviewing and would likely changing a
number of assumptions that would increase rates. Several of those
assumption changes have come to pass, most notably the change in the
rate of return on investments from 7.75% to 7.50%. Employer rates for
First Tier Safety Employees rose to 42.16% from 38.9% in 2011-12 while
the employer rate for First Tier Miscellaneous Employees rose to 24.7%
from 21.97% during that same period. The City recently received its PERS
Annual Valuation Report with the official rate for the First Tier Safety
Program set at 45.2% for 2014-15 and a projected rate of 47.2% for 2015-
16.The City has not yet received the Annual Valuation report for the
Miscellaneous Member Plan.
The rates for 2015-16 reflect the initial impact of the June PERS Board
action which approved a change to the funding horizon for plan losses
(smoothing) and rate adjustments tied to the assumptions related to
growth in plan membership, which is now being affected by the addition
of new benefit plan programs, which are described below. The Chief
Actuary at PERS has also indicated that the retirement board will be
considering rate changes related to the effect of lower mortality rates
among plan members and a change in the assumed rate of return on plan
assets as early as February 2014. If approved, these changes will also
begin to take effect in 2015-16. As part of the 2013-15 Financial Plan,
staff included as an item of expense, the assumption that in 2014-15, 1%
of payroll and in 2015-16, 2% of payroll would be self-assessed in all
operating funds and held as a deposit to be applied against the higher
PERS rates that will be realized in 2015-16. Overall, the forecast includes
the assumption that PERS rates will rise 2% in 2015-16. However, this does
not take into effect the savings that will be realized from the adoption of
the 2nd and 3rd Tier benefit programs, since PERS has not yet provided a
set of separate rates for each of these programs. Staff will return before
the City Council in April 2014 with an assessment of the city’s PERS liability
and options for paying down that liability as well as with a recap of any
further funding assumption changes that are adopted by the PERS board
in February 2014.
One of the City’s key cost containment objectives achieved through the
round of labor negotiations completed during 2012 was pension reform,
specifically the achievement of lower second tier pension formulas for City
employees that increase the “normal” retirement age and calculate
benefits on the average of three years of compensation instead of the
single highest year. The State also adopted new pension formulas through
the Public Employees Pension Reform Act (PEPRA) effective January 1,
2013. However, the PEPRA formulas only apply to new employees who
are also new to PERS.
Consequently all new personnel hired by the City will fall into either a
second tier, or third “PEPRA” tier , both of which are lower than the City’s
current retirement benefits. Future retirement costs will be impacted by
rates of turnover in the City’s workforce as new employees receiving
lower benefits with lower costs, replace current employees. Thus, the
savings to the City will increase over time. PERS provided estimated
employer contribution rates only for the City’s Police and Fire Second Tier
plans which are 20.6% and 21.8% respectively, compared to the current
Attachment 1
B3 - 11
OVERVIEW
- 7 -
First Tier rates for Police and Fire of 42.16%. The recently enacted Third
Tier programs created by the Public Employee’s Pension Reform Act
added rates for new members as follows: 12.25% for Police and Fire;
23.15% for Miscellaneous Members. The current rate for the
Miscellaneous First Tier plan is 24.68%.
Due to the uncertainty in hiring new employees and estimating which
ones will be new members and which will be joining the Second Tier
programs for Police and Fire, the projection does not reflect new hires’
cost using the rates for these programs. Instead, an estimate of cost
savings targeted at $119,000 has been established in the forecast until
more experience is gained with these programs and new rates have been
established for all of the new benefit tier programs.
Other Post Employment Benefit (OPEB) costs. Unlike many cities, the City
of San Luis Obispo faces a fairly stable cost outlook for its OPEB
obligations. Since 2008 the City pays its full Annual Required Contribution
(ARC) to the California Employers Retiree Benefit Trust (CERBT) run by
PERS to cover future retiree health benefits, and is rapidly reducing the
future liability for this benefit. Based on the latest biennial actuarial
report received during 2012, the City’s cost for the next two years will
increase from $536,000 to $558,000 and $576,000 respectively, with
future increases projected at a similar rate. Bartel and Associates will
begin preparation of the next actuarial study in the coming months.
Overall, the efforts undertaken to control staffing costs in the short- and
long-term appear to be successful. Ultimately, the savings from new
retirement tiers will depend on turnover as well as the contribution rates
required by PERS, but total staffing costs are projected to grow by less
than inflation during the forecast period.
Operating Costs – Non-Staffing
As the economy has stabilized and recovery taken hold, non-staffing
operating costs have begun to rise. City staff has been working hard to
identify areas where efficiencies can be made through improved work
processes, organizational studies, increased use of technology, etc. and
this effort will help moderate costs to some extent.
Accordingly, the forecast assumes non-staffing operating costs will
increase in each forecast year by the assumptions for population growth
and inflation combined.
Infrastructure and Facilities Maintenance
As discussed in the 2011-16 fiscal forecast, the estimated cost of
adequately maintaining, repairing or replacing existing General Fund
facilities, infrastructure and equipment is about $8.8 million annually.
This excludes any enhancements or “betterments.” To place this in
context, the average General Fund CIP expenditures for the last 15 years
have been about $4 million annually, and the average for the last two
years is a similar amount. The budget for the General Fund CIP was
reduced to $2.4 million for 2010-11 and increased to $3.7 million in 2011-
12.
For purposes of this Fiscal Forecast, staff started with the expenditure
levels adopted for 2013-15 which represents an initial increase in 2013-14
of 47%. This amount varies over the remaining years but increases
steadily until it reaches 12% over the 2012-13 amount. While these
numbers could and very likely will change through the adoption of future
Financial Plans, the previously approved plan is a logical place to start for
forecast purposes.
One of the Council’s Other Important Objectives for 2013-15 continues to
be increasing infrastructure maintenance and investment. This goal is
important to the City’s fiscal well-being, since failure to maintain critical
infrastructure often results in higher costs down the road. To accomplish
this, staff has proposed setting aside funding for major replacements, such
as fleet, information technology and major facilities. The forecast reflects
as much as $2 million per year being placed into these funds over the 5-
year forecast period. Although initial investments in these funds will not
cover the full cost of replacing these critical and expensive components, it
is a good start toward creating fiscally sustainable replacement programs.
Attachment 1
B3 - 12
OVERVIEW
- 8 -
Debt Service Costs
During 2011-12, the City successfully refinanced 2001 Series C lease
revenue bonds to achieve a lower interest rate and save $65,000 annually
in debt service costs to the General Fund. Staff and the City’s financial
advisor remain open to any potential opportunities for further savings
that may present themselves if interest rates remain low and other bond
refinancing options become available. The City has incurred no new
General Fund debt since 2011 but has included in the 2013-15 Financial
Plan, the lease purchase of a new fire engine and the financing of
replacement mobile data computers for the Police and Fire Departments
in order to leverage the city’s contribution to capital replacement. The
fire engine lease has been approved by the City Council in November and
the annual payments will be $117,000 per year starting in 2014-15. The
estimated payment for the mobile computers is $184,500 per year
starting in 2013-14. In addition, the forecast includes the debt payment
costs related to the Los Osos Valley Road Overcrossing construction. The
city has received a grant in excess of $15 million and will finance $8 million
to provide the remaining funds needed for construction. The annual
payment is estimated to be $371,000 starting in 2014-15 and increasing to
$425,000 per year thereafter.
SUMMARY
The City enters the 2013-15 Financial Planning period in substantially
better condition both long and short term than in previous financial plan
periods. However, it still faces many challenges as well as continued
economic uncertainty.
The City continues to have substantial advantages compared with many
communities in California due to:
1.Balanced budgets for both years in the 2013-15 Financial Plan and
reserves above minimum policy levels
2.Strong financial systems and procedures in place
3.Strong Council leadership
4.Committed and engaged citizens
5.Excellent organization and capable staff
6.Great tradition of responsible stewardship
This “civic infrastructure” is simply not in place in many other cities and it
will serve San Luis Obispo well in successfully meeting the fiscal challenges
ahead.
Moreover, the fact remains that in good times or bad, the fundamental
policy questions posed by the budget process are the same: of all the
things we want to do in making our community an even better place to
live, work and play, which are the most important? And what are the
resource trade-offs we have to make to do them?
Attachment 1
B3 - 13
SYNOPSIS OF MAJOR TRENDS
- 9 -
DEMOGRAPHIC TRENDS
1.Population and Housing. Population grows by 0.25% per year for
each of the years in the forecast.
2.Inflation. Grows by 2.4% in 2013-14 and 2.5% each fiscal year
through 2017-18.
EXPENDITURES
1.Operating Expenditures - Staffing. Uses the adopted budget for 2013-
14 and the preliminary 2014-15 budget values for those years. Using
2014-15 as the base for later years, staffing costs are estimated to
increase by the estimated inflation factor of 2.5% for the remainder of
the forecast period. Savings is estimated to be 2% per year.
2.Operating Expenditures – Non-Staffing. Uses the preliminary 2014-15
budget as the base and assumes increases (2.8%) based on combined
growth rates for population and inflation. Savings is estimated to be
2% per year except in the second year of each 2-year Financial Plan
cycle, when savings is estimated to be 2.25% based on recent
experience.
3.CIP Expenditures. Based on the five-year CIP program approved with
the 2013-15 Financial Plan. Steadily increasing expenses occur
through 2017-18.
4.Debt Service. The forecast includes current debt service obligations
and the estimated new debt service obligations called for in the 2013-
15 Financial Plan for financing of a fire engine, mobile computers for
public safety and the LOVR Overpass Construction grant match.
KEY REVENUES
Top Dozen General Fund Revenues
These “Top Dozen” sources account for about 95% of total projected
General Fund revenues. The estimated growth rates compare the forecast
amount to the Mid-Year budget estimate from 2012-13.
1.Sales Tax. Grows by rates projected by HdL and incorporates specific
factors such as the lapsing Airport Area Annexation Agreement and
estimated revenue generation from both the Chinatown and Garden
Street Terrace projects. Measure Y and Proposition 172 revenues are
projected to grow by the same factors.
2.Property Tax. As projected using information supplied by the County,
grows by 4.4% in 2013-14 with approximately half of that amount
resulting from lower property tax administration fees; by 1.5% in
2014-15; by 3.0% in later years.
3.Transient Occupancy Tax. Based on performance through the first 3
quarters of 2012-13, grows by 6.56% in 2013-14; by 2.6% in 2014-15;
by 3.3% in 2015-16; by 5.65% in 2016-17 due to projected
development in the downtown area from the Chinatown and Garden
Street Terrace projects; by 5.74% in 2017-18.
4.Utility Users Tax. Grows by 2.0% in 2013-14; by 2.5% in 2014-15; by
1.5% in 2015-16; by 2.8% in 2016-17 and 3.1% in 2017-18. Passage of
Measure D-12 which clarified the application of the tax and lowered
the percentage applicable to telecom services was projected to be
revenue neutral. Staff is analyzing the actual results seen in 2012-13
starting in April, when it was noted that an increase in revenues was
realized after the tax change took effect. The forecast is based in part
on estimates provided by Beacon Economics, starting with the 2015-
16 year.
Attachment 1
B3 - 14
SYNOPSIS OF MAJOR TRENDS
- 10 -
5.Property Tax in Lieu of Vehicle License Fees. Grows by the same rate
as property tax revenues throughout the forecast period.
6.Business Tax. Grows by 2.5% in 2013-14 and 2014-15; by 2.3% in
2015-16; by 2.6% in 2016-17 and 2.8% in 2017-18. The forecast is
based in part on estimates provided by Beacon Economics, starting
with the 2015-16 year.
7.Franchise Fees. Growth estimated using a combination of population
and inflation throughout the forecast period.
8.Gas Tax Subventions. Forecast using information provided by
California City Finance and recent local trends. Growth is being
monitored closely since the state’s implementation of the Proposition
42 replacement component is creating irregular patterns in the
allocation of these funds.
9.Development Review Fees. Decreased by 9.2% in 2013-14 in order to
eliminate the spike in revenues noted in 2012-13 which may not
reoccur. Grows by 4.99% in 2014-15; grows by 4% thereafter based on
Beacon Economics projection for building permit activity adjusted for
estimated timing of development review activity by Community
Development Department. Based on the continuing growth of these
revenues in the first part of 2013-14 in excess of anticipated levels,
staff will review these revenues with the City Council as part of the
mid-year update process.
10.Recreation Fees. Grows by population and inflation throughout the
forecast period.
11.Other Fees. Grows by population and inflation throughout the
forecast period.
12.Investments. Grows by 2.1% in 2013-14 and 1.5% each year
thereafter. This takes into account the lower yields earned on new
investments.
Special Revenue Assumptions
1.Proposition 42 Revenues. Beginning in 2010-11, the State replaced
Proposition 42 revenues with additional Gas Tax revenues pursuant to
Revenue & Taxation Code Section 7360. The City receives about
$500,000 annually from these transportation-restricted revenues
which are included in the Gas Tax estimates.
2.Mutual Aid Reimbursements. The forecast makes no assumptions for
the receipt of mutual aid revenues. This revenue results when Fire
personnel respond to significant events (usually wildland fires) for
which the City receives reimbursement from Federal or State sources.
Response to these types of events is volatile and difficult to predict.
While the City almost always receives some level of revenue from this
source each year, including substantial amounts in some years, there
are years where very little net revenue is received and it is unwise to
build the forecast based on these revenues.
3.State Budget Impacts. The forecast assumes no further adverse state
budget actions during the forecast period. With the adoption of the
2013-14 balanced budget and an unexpected surplus from 2012-13,
the state’s fiscal condition is improving but does not appear to require
additional assistance from local agencies.
4.Federal Fiscal Cliff – The State LAO states that Congress’ failure to
deal with the issues referred to as the “Fiscal Cliff” could result in
economic conditions differing materially from those forecast. This
means that “autopilot” actions referred to in the term “Fiscal Cliff”
could affect the economic growth upon which the forecast is based.
This does not account for unfunded Federal mandates that may trickle
down to the local level. There will be at least one more deadline by
which Congress must decide whether to increase the federal debt
limit, a process that has been complicated by the issues surrounding
the implementation of the Affordable Care Act.
Attachment 1
B3 - 15
SYNOPSIS OF MAJOR TRENDS
- 11 -
FUND BALANCE
The forecast assumes that the policy for maintaining fund balance at a
minimum of 20% of operating expenditures will be adhered to throughout
the forecast period. The fund balance has been updated based on the
unaudited 2012-13 results and has been used for the remaining periods
included in the 5-year forecast. Any amount above the policy level is one-
time funding and in accordance with Council adopted policy should be
used for one-time purposes (not for on-going operating programs). As
previously discussed, this document includes a forecast of revenue,
expenditures and changes in fund balance without Measure Y renewal. In
order to achieve the fund balance called for by the City’s reserve policy in
this scenario, significant reductions in expenditures would have to occur
to offset the loss of Measure Y revenue.
Attachment 1
B3 - 16
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2
0
0
2,
1
4
3
,
7
0
0
2,
2
5
0
,
6
0
0
2,340,653
2,434,279 2,531,650
Re
c
r
e
a
t
i
o
n
Fe
e
s
1,
3
0
0
,
7
0
0
1,
7
4
1
,
6
7
6
1,
5
1
8
,
4
0
0
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7
4
7
,
9
0
0
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5
1
9
,
2
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0
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5
2
7
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7
0
0
1,562,627
1,606,381 1,651,359
Ot
h
e
r
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r
v
i
c
e
Ch
a
r
g
e
s
2,
0
1
8
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4
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0
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0
8
9
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8
5
1
1,
8
6
0
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6
0
0
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8
5
1
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4
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0
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7
7
4
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8
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0
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7
8
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5
0
0
1,859,400
1,864,400 1,869,400
Ot
h
e
r
Re
v
e
n
u
e
s
Fi
n
e
s
& Fo
r
f
e
i
t
u
r
e
s
17
1
,
4
0
0
17
4
,
3
3
1
16
7
,
2
5
0
15
9
,
7
0
0
16
7
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3
0
0
16
7
,
3
0
0
171,933
176,747 181,696
In
t
e
r
e
s
t
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r
n
i
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g
s
an
d
Re
n
t
s
54
9
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9
0
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58
8
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5
1
28
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0
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0
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2
,
9
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32
4
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2
0
0
32
4
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2
0
0
329,000
334,000 349,000
Bo
n
d
Pr
o
c
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e
d
s
5,
3
8
6
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3
0
0
Ot
h
e
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v
e
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s
17
9
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4
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52
4
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9
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9
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0
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100,000
100,000 100,000
To
t
a
l
Re
v
e
n
u
e
s
52
,
0
4
0
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6
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0
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7
6
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2
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5
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58
,
3
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5
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2
0
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60
,
0
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7
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62,241,69264,498,231
EX
P
E
N
D
I
T
U
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S
& OT
H
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US
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St
a
f
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s
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t
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a
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t
.
sa
v
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s
34
,
7
1
9
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8
0
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6
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7
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5
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39,386,93940,466,645
Op
e
r
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g
Pr
o
g
r
a
m
s
‐
No
n
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a
f
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(n
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6
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14,046,90514,772,600
Tr
a
n
s
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to
Go
l
f
,
CD
B
G
37
2
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8
0
0
53
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5
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45
,
0
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0
0
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53
,
1
0
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81
,
2
0
0
81,200
81,200 81,200
Bo
n
d
Co
s
t
s
/
D
e
f
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a
s
a
n
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5,
7
7
8
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b
t
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c
e
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3
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4
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5
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7
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6
3
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6
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9
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3
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0
0
3,009,051
2,999,103 2,816,219
Tr
a
n
s
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r
to
In
s
u
r
a
n
c
e
Fu
n
d
‐
CJ
P
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A
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t
r
o
pa
y
m
e
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t
20,407
475,407 475,407
Ca
p
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t
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l
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p
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u
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50
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2
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623,951
623,951 823,951
Ca
p
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Eq
u
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(I
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)
20
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5
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7
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165,458
165,458 700,000
Ca
p
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60
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7
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55
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100,000
100,000 450,000
Ca
p
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p
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m
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n
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Al
l
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7
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3,585,625
3,622,425 3,897,425
To
t
a
l
Ex
p
e
n
d
i
t
u
r
e
s
50
,
2
4
6
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8
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57
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7
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4
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5
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0
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58
,
2
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5
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61,501,38864,483,447
Re
v
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s
Ov
e
r
(U
n
d
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Ex
p
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t
u
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1,
7
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6
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740,304 14,784
FU
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OF
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12
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Re
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Ad
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Re
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(
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4,247,518
4,674,817 4,328,640
FO
R
E
C
A
S
T
12B3 - 17
GE
N
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L
FU
N
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FO
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‐
As
s
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s
Sa
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Me
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At
t
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1
20
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2
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2
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Ac
t
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20
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Fi
n
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OF
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1
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13,996,869
6,965,483 281,685
En
c
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s
1,
3
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8
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3
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m
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1,
8
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Ca
r
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n
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a
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88
3
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4
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3
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4
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Fu
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a
n
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Pr
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20
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co
s
t
s
:
13
,
0
8
1
,
6
0
0
15
,
2
4
9
,
5
0
0
RE
V
E
N
U
E
S
& OT
H
E
R
SO
U
R
C
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S
Ta
x
e
s
Sa
l
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s
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x
+ In
‐li
e
u
(B
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on
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f
f
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ta
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12
,
0
9
8
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6
0
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3
,
2
8
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15,634,996
16,408,14517,064,471
Me
a
s
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Y 1/
2
%
No
t
e
:
20
1
4
‐15
/
1
5
‐16
Es
t
i
m
a
t
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s
as
s
u
m
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re
n
e
w
a
l
5,
6
1
6
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3
0
0
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2
3
7
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4
6
8
6,
3
4
0
,
0
0
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4
9
3
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Sa
l
e
s
Ta
x
‐
Pr
o
p
o
s
i
t
i
o
n
17
2
27
1
,
3
0
0
30
7
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4
2
9
28
4
,
6
0
0
32
7
,
7
0
0
28
4
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2
0
0
28
4
,
6
0
0
293,138
301,932 314,009
Pr
o
p
e
r
t
y
Ta
x
8,
4
4
1
,
1
0
0
8,
3
6
7
,
0
8
8
8,
3
7
0
,
2
0
0
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1
7
6
,
6
0
0
8,
7
4
0
,
8
0
0
8,
8
7
2
,
2
0
0
9,111,745
9,385,096 9,704,190
Pr
o
p
e
r
t
y
Ta
x
in
li
e
u
of
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F
3,
5
5
1
,
1
0
0
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4
9
2
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3
6
1
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5
3
3
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2
0
0
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5
3
3
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2
0
0
3,
5
8
6
,
2
0
0
3,
6
4
0
,
0
0
0
3,738,259
3,850,407 3,981,321
Tr
a
n
s
i
e
n
t
Oc
c
u
p
a
n
c
y
Ta
x
4,
8
4
4
,
2
0
0
5,
2
2
2
,
0
0
4
5,
3
9
5
,
0
0
0
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5
7
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4
0
0
5,
7
4
9
,
4
0
0
5,
8
9
8
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2
0
0
6,092,835
6,437,177 6,806,789
Ut
i
l
i
t
y
Us
e
r
s
Ta
x
4,
5
9
2
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3
0
0
4,
5
8
4
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0
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5
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6
6
2
,
7
0
0
4,
9
2
8
,
0
0
0
4,
7
5
6
,
0
0
0
4,
8
7
4
,
9
0
0
4,948,018
5,086,563 5,244,246
Fr
a
n
c
h
i
s
e
Fe
e
s
2,
3
5
2
,
1
0
0
2,
4
6
2
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3
4
9
2,
4
9
8
,
0
0
0
2,
5
5
2
,
3
0
0
2,
5
2
3
,
0
0
0
2,
5
4
8
,
2
0
0
2,619,588
2,692,936 2,768,339
Bu
s
i
n
e
s
s
Ta
x
1,
7
9
7
,
8
0
0
1,
8
3
7
,
5
4
8
2,
0
5
0
,
0
0
0
2,
0
3
8
,
9
0
0
2,
1
1
6
,
2
0
0
2,
1
6
8
,
6
0
0
2,203,318
2,260,604 2,323,901
Re
a
l
Pr
o
p
e
r
t
y
Tr
a
n
s
f
e
r
Ta
x
13
3
,
7
0
0
14
3
,
9
8
5
18
0
,
0
0
0
25
6
,
3
0
0
18
0
,
0
0
0
18
0
,
0
0
0
183,600
187,272 192,516
Su
b
v
e
n
t
i
o
n
s
& Gr
a
n
t
s
Ve
h
i
c
l
e
Li
c
e
n
s
e
In
‐Li
e
u
Fe
e
s
(V
L
F
)
20
5
,
6
0
0
45
,
7
5
2
‐
19
,
3
0
0
‐
‐
‐‐ ‐
Ga
s
Ta
x
/
T
D
A
/
T
B
I
D
Tr
a
n
s
f
e
r
s
In
1,
6
5
8
,
4
0
0
1,
4
0
7
,
6
0
0
1,
3
9
5
,
5
0
0
1,
3
8
4
,
9
0
0
1,
4
4
6
,
3
0
0
1,
4
3
2
,
8
0
0
1,407,680
1,407,680 1,407,680
Ot
h
e
r
Su
b
v
e
n
t
i
o
n
s
& Gr
a
n
t
s
59
0
,
4
0
0
56
4
,
3
4
7
1,
5
0
3
,
0
0
0
1,
3
5
5
,
2
0
0
33
1
,
7
0
0
33
1
,
7
0
0
281,721
283,971 286,598
Se
r
v
i
c
e
Ch
a
r
g
e
s
De
v
e
l
o
p
m
e
n
t
Re
v
i
e
w
Fe
e
s
1,
6
6
8
,
0
0
0
2,
4
5
3
,
7
7
3
2,
3
6
0
,
9
0
0
2,
5
9
5
,
2
0
0
2,
1
4
3
,
7
0
0
2,
2
5
0
,
6
0
0
2,340,653
2,434,279 2,531,650
Re
c
r
e
a
t
i
o
n
Fe
e
s
1,
3
0
0
,
7
0
0
1,
7
4
1
,
6
7
6
1,
5
1
8
,
4
0
0
1,
7
4
7
,
9
0
0
1,
5
1
9
,
2
0
0
1,
5
2
7
,
7
0
0
1,562,627
1,606,381 1,651,359
Ot
h
e
r
Se
r
v
i
c
e
Ch
a
r
g
e
s
2,
0
1
8
,
4
0
0
2,
0
8
9
,
8
5
1
1,
8
6
0
,
6
0
0
1,
8
5
1
,
4
0
0
1,
7
7
4
,
8
0
0
1,
7
8
1
,
5
0
0
1,859,400
1,864,400 1,869,400
Ot
h
e
r
Re
v
e
n
u
e
s
Fi
n
e
s
& Fo
r
f
e
i
t
u
r
e
s
17
1
,
4
0
0
17
4
,
3
3
1
16
7
,
2
5
0
15
9
,
7
0
0
16
7
,
3
0
0
16
7
,
3
0
0
171,933
176,747 181,696
In
t
e
r
e
s
t
Ea
r
n
i
n
g
s
an
d
Re
n
t
s
54
9
,
9
0
0
58
8
,
4
5
1
28
9
,
0
0
0
28
2
,
9
0
0
32
4
,
2
0
0
32
4
,
2
0
0
329,000
334,000 349,000
Bo
n
d
Pr
o
c
e
e
d
s
5,
3
8
6
,
3
0
0
Ot
h
e
r
Re
v
e
n
u
e
s
17
9
,
3
0
0
84
,
4
4
5
52
4
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6
0
0
49
9
,
9
0
0
15
0
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0
0
0
15
0
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0
0
0
100,000
100,000 100,000
To
t
a
l
Re
v
e
n
u
e
s
52
,
0
4
0
,
6
0
0
6
0
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4
8
0
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7
6
3
5
6
,
9
3
9
,
2
4
2
59
,
0
7
4
,
0
0
0
5
6
,
9
0
8
,
5
0
0
55
,
6
5
5
,
2
0
0
52,878,511
54,817,59056,777,165
EX
P
E
N
D
I
T
U
R
E
S
& OT
H
E
R
US
E
S
St
a
f
f
i
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Co
s
t
s
,
ne
t
of
re
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m
b
.
tr
a
n
s
f
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s
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d
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t
.
sa
v
i
n
g
s
34
,
7
1
9
,
8
0
0
3
6
,
2
7
2
,
5
0
0
3
5
,
9
4
5
,
4
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36
,
4
5
0
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6
0
0
3
6
,
1
3
5
,
2
6
2
36
,
7
5
0
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7
9
6
38,260,877
39,386,93940,466,645
Op
e
r
a
t
i
n
g
Pr
o
g
r
a
m
s
‐
No
n
‐st
a
f
f
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n
g
co
s
t
s
(n
e
t
of
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t
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m
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t
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sa
v
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s
)
9,
9
9
4
,
1
0
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10
,
9
3
9
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6
5
5
1
5
,
0
9
3
,
1
0
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12
,
1
5
8
,
3
0
0
1
3
,
4
2
6
,
0
3
8
13
,
9
2
2
,
8
0
4
14,063,328
14,046,90514,772,600
Tr
a
n
s
f
e
r
s
to
Go
l
f
,
CD
B
G
37
2
,
8
0
0
53
,
5
6
4
45
,
0
0
0
45
,
0
0
0
53
,
1
0
0
81
,
2
0
0
81,200
81,200 81,200
Bo
n
d
Co
s
t
s
/
D
e
f
e
a
s
a
n
c
e
5,
7
7
8
,
5
0
0
De
b
t
Se
r
v
i
c
e
3,
0
2
3
,
2
0
0
2,
4
3
7
,
2
4
4
2,
6
3
7
,
5
0
0
2,
7
7
2
,
6
3
1
2,
7
6
0
,
2
0
0
2,
9
6
3
,
9
0
0
3,009,051
2,999,103 2,816,219
Tr
a
n
s
f
e
r
to
In
s
u
r
a
n
c
e
Fu
n
d
‐
CJ
P
I
A
Re
t
r
o
pa
y
m
e
n
t
20,407
475,407 475,407
Ca
p
i
t
a
l
Im
p
r
o
v
e
m
e
n
t
Pl
a
n
‐
Eq
u
i
p
m
e
n
t
Re
p
l
a
c
e
m
e
n
t
(F
l
e
e
t
)
‐
50
0
,
0
0
0
50
0
,
0
0
0
50
0
,
0
0
0
40
8
,
6
0
0
53
2
,
6
0
0
623,951
623,951 823,951
Ca
p
i
t
a
l
Im
p
r
o
v
e
m
e
n
t
Pl
a
n
‐
Eq
u
i
p
m
e
n
t
Re
p
l
a
c
e
m
e
n
t
(I
T
)
20
0
,
0
0
0
20
0
,
0
0
0
56
5
,
5
0
0
96
7
,
1
0
0
165,458
165,458 700,000
Ca
p
i
t
a
l
Im
p
r
o
v
e
m
e
n
t
Pl
a
n
‐
Ma
j
o
r
Fa
c
i
l
i
t
y
Re
p
l
a
c
e
m
e
n
t
60
2
,
7
0
0
55
1
,
4
0
0
100,000
100,000 450,000
Ca
p
i
t
a
l
Im
p
r
o
v
e
m
e
n
t
Pl
a
n
‐
Al
l
ot
h
e
r
CI
P
/
O
p
e
n
Sp
a
c
e
2,
1
3
6
,
9
0
0
3,
7
2
2
,
8
0
0
3,
3
1
8
,
4
0
0
3,
4
7
1
,
0
0
0
5,
0
8
5
,
9
0
0
2,
4
8
5
,
7
0
0
3,585,625
3,622,425 3,897,425
To
t
a
l
Ex
p
e
n
d
i
t
u
r
e
s
50
,
2
4
6
,
8
0
0
5
9
,
7
0
4
,
2
6
3
57
,
7
3
9
,
4
0
0
55
,
5
9
7
,
5
3
1
59
,
0
3
7
,
3
0
0
58
,
2
5
5
,
5
0
0
59,909,897
61,501,38864,483,447
Re
v
e
n
u
e
s
Ov
e
r
(U
n
d
e
r
)
Ex
p
e
n
d
i
t
u
r
e
s
1,
7
9
3
,
8
0
0
77
6
,
5
0
0
1,
4
7
9
,
1
1
4
5,
7
5
5
,
7
4
1
(2
,
1
2
8
,
8
0
0
)
(2
,
6
0
0
,
3
0
0
)
(7,031,386)
(6,683,798) (7,706,282)
FU
N
D
BA
L
A
N
C
E
,
EN
D
OF
YE
A
R
12
,
9
0
7
,
9
0
0
1
3
,
6
8
4
,
4
0
0
1
2
,
2
8
1
,
4
4
2
18
,
7
2
5
,
9
6
9
1
6
,
5
9
7
,
1
6
9
13
,
9
9
6
,
8
6
9
6,965,483
281,685 (7,424,597)
Re
s
e
r
v
e
@ 20
%
of
Op
e
r
a
t
i
n
g
Co
s
t
s
8,
9
4
2
,
8
0
0
9,
1
6
0
,
9
0
0
9,
9
3
0
,
7
0
0
10
,
0
7
2
,
9
8
0
9
,
9
1
2
,
2
7
3
10
,
1
3
4
,
7
0
0
10,468,925
10,781,93011,142,891
Ad
j
u
s
t
fo
r
En
c
u
m
b
r
a
n
c
e
/
C
a
r
r
y
o
v
e
r
/
D
e
b
t
Sv
c
Re
s
e
r
v
e
s
(2
,
8
8
2
,
0
7
2
)
(2
,
0
8
7
,
6
0
0
)
(2
,
0
8
7
,
6
0
0
)
(2
,
0
8
7
,
6
0
0
)
(2,087,600)
(2,087,600) (2,087,600)
Re
s
e
r
v
e
ab
o
v
e
/
(
b
e
l
o
w
)
po
l
i
c
y
le
v
e
l
3,
9
6
5
,
1
0
0
1,
6
4
1
,
4
2
8
2,
3
5
0
,
7
4
2
6,
5
6
5
,
3
8
9
4,
5
9
7
,
2
9
6
1,
7
7
4
,
5
6
9
(5,591,042)
(12,587,845) (20,655,088)
FO
R
E
C
A
S
T
13B3 - 18