HomeMy WebLinkAbout6/5/2018 Item 19, Stanwyck, Elke, Ferreira
City of San Luis Obispo, Council Memorandum
DATE: June 1, 2018
TO: City Council
FROM: Shelly Stanwyck, Parks and Recreation Director
Brigitte Elke, Interim Finance Director
Alex Ferreira, Budget Manager
VIA: Derek Johnson, City Manager DJ
SUBJECT: June 5, 2018 Agenda Correspondence Item 19
Staff identified a budgeting error in the proposed 2018-19 Supplemental Budget related to the Adopted
2017-19 Financial Plan as described below:
1. On page D-6 of the Budget Supplement (page 87 of the agenda packet), Changes in Financial
Position: Local Revenue Measure Sub-Fund, the Fund Balance, End of Year sub-total should be
listed as negative $271,073 for 2017-18 current budget and not negative $401,073. In addition, the
amount listed for the 2018-19 Revised Budget should be negative $175,247 and not negative $570,247.
These changes are a result of an error in the calculation for Capital Improvement Plan Projects
specifically relating to financed fleet purchases made during the development of the Adopted 2017-
19 Financial Plan. Overall, the result is a positive increase to the Local Revenue Measure Fund Balance
for FY 2018-19. The Local Revenue Measure Fund Balance does remain negative due to actual
revenues falling below projections over the past several years without corresponding decreases to
planned expenditures.
2. As the Local Revenue Measure is a part of the City’s General Fund, the correction of this budgeting
error affects several other summary totals related to General Fund and Capital Improvement Program
reflected throughout the document. Replacement pages for A-7, A-10, A-13, D-2, D-3, D-6, D-18, G-
10, G-11 are included as Attachment A. The adopted and published Budget Supplement will include
the corrected information.
Please contact Alex Ferreira with any questions at aferreir@slocity.org.
Attachment A – Replacement Pages for; A-7, A-10, A-13, D-2, D-3, D-6, D-18, G-10, G-11
Recommended Appropriations of excess Reserve
Public Safety CIP (Downtown bollards) $1,300,000
Revenue Stabilization $1,000,000
Infrastructure Investment Fund $ 250,000
Trust/Prepay $4,200,000
2018-19 Appropriations
To be adopted by Resolution, the proposed appropriations for the 2018-19 Financial Plan Supplemental
Budget are as follows
Allocation Type Governmental Funds Enterprise & Other
Funds
Total
Operating Programs $68,722,687 $33,800,168 $102,522,854
CIP $24,758,084 $26,322,583 $51,080,667
Debt Service $3,185,500 $5,354,158 $8,539,658
Total $96,666,271 $65,476,909 $162,143,179
Consumer Price Index (CPI) Adjusted Fees
After many years of no change, due in large measure to economic conditions associated with the Great
Recession, in 2017 the City Council reviewed a study of General Fund costs of service fees for service
related and regulatory activities. As a result of that study many fees were adjusted to appropriately reflect
the current costs of providing service to the public. Upon adoption on April 18, 2017 of the updated
citywide user and regulatory fees, it was directed that a majority of the fees (except for Parks and Recreation
which are adjusted by policy and were adopted for two fiscal years) be adjusted by CPI on an annual basis
under the City Manager’s authority.
SUMMARY OF FINANCIAL CHANGES FOR THE GENERAL FUND
Allocations in the General Fund are proposed based on available fund balance, actual revenues received in
the current fiscal year, 2017-18 and projected revenues and expenditures throughout the 10-year Fiscal
Forecast.
In alignment with the Financial Responsibility Philosophy, the Adopted Major City Goals and Other
Important Objectives, the adopted Fiscal Health Response Plan and the Council adopted policy to address
the City’s Long-Term unfunded liabilities, the proposed 2018-19 Financial Plan Supplement allocates
General Fund funding for the following purposes.
CIP - Increases $2,853,477
Long-Term Unfunded Liability Reduction $4,200,000
Fiscal Health Response Plan Revenue Stabilization Fund $1,000,000
As noted above, $1,372,000 in operational reductions and new ways of doing business are proposed by
Departments to reduce the overall operating budget for the City. The effect of these reductions begins to
address the $7.5 million General Fund liability required to address the long-term financial impacts related
to pension costs. This need arises from significant policy changes made by CalPERS.
A-7
Revenue Highlights
Sales Tax is the City’s largest revenue. It accounts for 35% of the General Fund’s total revenues. The sales
tax growth rate continues to be positive. However, changes in purchasing habits (increased online retailing)
and lowering consumer confidence could significantly impact this growth rate in the near future. As one
of the more volatile revenue sources, due to its responsiveness to changes in economic conditions, staff
have used conservative growth rates of 2% for this revenue source.
Property Taxes are the second major source of General Fund revenues. They constitute 17% of General
Fund revenues. Based on data from the County Auditor-Controller’s Office, the property tax for 2018-19
is projected to grow 5%. Based on Beacon Economics’ assessment of near term upward growth in home
prices this 5% growth rate is reasonable and realistic.
$15,000
$25,000
$35,000
$45,000
$55,000
$65,000
$75,000
$85,000
2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23
Five Year Forecast
Revenues Expenditures
Projection
$15,000
$17,000
$19,000
$21,000
$23,000
$25,000
$27,000
$29,000
2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23
General Sales Tax Projection($000s)
A-10
General Fund Ten Year Forecast
A FY'17 B FY'18 B FY'19 F FY'20 F FY'21 F FY'22 F FY'23
Sales & Use Tax
General 16,737 16,487 17,217 17,413 17,730 18,059 18,407
Public Safety (Prop 172) 406 437 403 406 409 413 416
Measure G 7,332 7,445 7,673 7,748 7,848 7,954 8,062
Property Taxes 10,756 11,145 11,665 12,307 12,922 13,568 13,975
Property Tax In Lieu Of Vlf 4,354 4,638 4,846 5,088 5,343 5,610 5,722
Transient Occupancy Tax 7,368 7,294 7,367 7,551 7,627 7,703 7,780
Utility Users Tax 5,539 5,568 5,617 5,673 5,730 5,787 5,845
Franchise Fees 1,557 1,582 1,527 1,558 1,591 1,623 1,657
Business Tax Certificates 2,372 2,747 2,884 2,971 3,060 3,151 3,246
Real Property Transfer Tax 332 381 388 407 428 449 472
Total Tax & Franchise Revenues 56,753 57,724 59,587 61,123 62,686 64,317 65,581
Fines & Forfeitures 140 148 148 149 151 152 154
Investment and Property Revenues 160 265 265 265 265 265 265
Subventions & Grants 1,015 1,886 386 386 386 386 386
Police Services 621 481 606 618 629 641 654
Fire Services 910 722 990 1,010 1,030 1,051 1,072
Development Review 5,537 6,154 5,870 5,969 6,088 6,210 6,210
Parks & Recreation 1,658 1,822 1,836 1,873 1,910 1,948 1,987
General Government 394 424 431 446 461 476 492
Other Revenues 173 67 118 118 118 118 118
Subtotal Non-Tax Revenues 10,607 11,968 10,649 10,832 11,038 11,247 11,337
Total Revenues 67,360 69,692 70,236 71,955 73,724 75,565 76,918
Salaries 29,001 31,600 32,234 33,175 34,205 35,149 35,852
Overtime 3,604 3,654 2,551 2,602 2,654 2,707 2,761
Subtotal Salaries 32,605 35,254 34,785 35,777 36,858 37,856 38,613
7040: Retirement Contributions 10,301 4,258 4,170 5,118 5,619 5,774 5,890
7049: PERS Unfunded Liability -6,874 10,112 10,416 10,728 11,050 11,381
Other Benefits 2,687 2,962 3,021 3,081 3,143 3,206 3,270
Benefits 12,987 14,094 17,303 18,615 19,490 20,030 20,541
Other (263)(166)(215)(215) (215) (215) (215)
Staffing 45,329 49,182 51,874 54,177 56,134 57,671 58,939
Contract Services 6,958 8,631 9,149 9,332 9,519 9,709 9,903
Other Operating Expenses 8,460 10,650 11,208 11,432 11,661 11,894 12,132
LRM Expenses 2,127 2,522 2,625 2,325 2,354 2,386 2,419
All other 203 102 104 106 109 111 113
Reimbursement Transfers (4,165) (4,135) (3,918) (3,996) (4,076) (4,157) (4,241)
Prior Year Encumbrance Adjustment (ie. Backout from Revised budget)(3,289) (3,289) (3,289) (3,289) (3,289) (3,289)
Subtotal: Expenditures 58,913 63,664 67,753 70,087 72,411 74,324 75,976
Est. Annual Salaries & Benefits Savings (1,268) (1,300) (1,358) (1,407) (1,445) (1,477)
Transfers In (2,110) (5,057) (3,774) (2,377) (2,377) (2,377) (2,377)
Transfers Out 900 --- - - -
Debt Service 3,246 3,245 3,186 2,795 2,391 2,391 2,391
Transfer to CDBG 154 154 154 154 154 154 154
Transfer to Insurance Benefit Fund 1,740 750 500 500 500 500 500
CIP - Fleet Replacement (LRM)-768 624 732 741 751 762
CIP - Infrastructure Investment Fund 250 250 250 250 250
CIP - IT Replacement (GF + LRM)2,621 640 1,136 610 618 626 635
CIP - Major Facility Replacement (LRM)514 675 593 643 652 660 669
CIP - All Other 440 450 214 428 434 440 446
CIP - Measure G (LRM)4,081 3,158 3,290 3,010 3,049 3,090 3,132
Subtotal: Operating Transfers 11,585 3,514 4,872 5,388 5,005 5,040 5,084
Safety Cost Allocation of $200k 200 200 200 200
CIP Reserve (Index to CCI)1,000 1,028 1,057 1,086
FHRP - Operating Reductions and New Revenue (1,472) (3,750) (7,500) (7,500) (7,500)
Total Expenditures 70,498 67,178 71,153 72,926 71,144 73,121 74,847
Resources Over/(Under) Expenses (3,138) 2,514 (917)(970) 2,580 2,444 2,071
Fund Balance, Beginning of Year 29,626 26,496 22,522 17,605 13,635 15,214 16,658
CAFR Adjustments 9
Prior Year Restatement
Revenue Stabalization Reserve (Recommendation)(1,000)
Bollard CIP Project (one time monies)(1,288)
Additional CalPERS Principal Payment (4,200) (4,000) (3,000) (1,000) (1,000) (1,000)
Ending Fund Balance 26,496 22,522 17,605 13,635 15,214 16,658 17,729
Designated Reserves (9,697) (3,301)
Policy Reserve Level @ 20%:(10,902) (11,358) (11,528) (11,934) (12,337) (12,655) (12,919)
Reserve Over/(Under) Policy Level 5,897 7,863 6,077 1,701 2,878 4,003 4,810
A-13
CHANGES IN FINANCIAL POSITION
ALL FUNDS COMBINED
Actual Current Budget Original Revised
16-17 17-18 Budget Budget
Revenues
Tax Revenues 56,753,255 57,723,638 59,710,423 59,587,543 (122,880) 0%
Fines and Forfeitures 670,178 802,600 740,800 764,600 23,800 3%
Investment and Property Revenues 473,040 507,898 516,898 519,898 3,000 1%
From Other Governments 6,834,649 19,476,604 18,771,684 18,589,100 (182,584) -1%
Service Charges
Governmental Funds 14,728,538 11,579,969 11,491,458 11,723,320 231,862 2%
Enterprise Funds 42,303,618 43,994,133 43,397,445 45,272,942 1,875,497 4%
Trust and Agency Revenues - - - - - 0%
Other Revenues 1,312,896 254,877 477,300 611,816 134,516 28%
Total Revenues 123,076,173 134,339,719 135,106,008 137,069,219 1,963,211 1%
Expenditures
Operating Programs
Community Safety 28,182,941 32,496,354 32,394,244 31,816,719 (577,525) -2%
Infrastructure & Transportation 27,164,304 29,498,607 31,432,525 31,092,644 (339,881) -1%
Culture & Recreation 3,506,780 6,483,472 3,858,583 3,695,170 (163,413) -4%
Environmental Health & Open Space 7,367,428 9,681,436 8,931,782 8,582,798 (348,984) -4%
Community & Neighborhood Livability 9,955,543 6,903,105 8,900,042 9,400,943 500,901 6%
Fiscal Health & Governance 19,899,227 24,238,198 22,384,524 21,852,244 (532,280) -2%
CalPERS Discount Rate - - 432,211 - (432,211) -100%
Total Operating Programs 96,076,223 109,301,173 108,333,911 106,440,517 (1,893,394) -2%
Reimbursed Expenditures (4,164,747) (4,264,633) (4,264,633) (3,917,663) 346,970 -8%
Capital Improvement Plan Projects 17,822,303 70,223,298 92,617,277 51,080,667 (41,536,610) -45%
Debt Service 5,096,743 7,969,844 8,860,368 8,539,658 (320,710) -4%
Total Expenditures 114,830,522 183,229,681 205,546,923 162,143,179 (43,403,744) -21%
Other Sources (Uses)
Adjustment to Working Capial - - - - - 0%
Operating Transfers In 11,756,033 11,924,950 11,443,133 10,688,969 (754,164) -7%
Operating Transfers Out (11,658,548) (11,924,607) (11,477,482) (11,603,074) (125,592) 1%
Proceeds from Debt Financing 1,141,468 595,000 65,773,000 23,600,203 (42,172,797) -64%
Projected MOA Adjustments - - - - - 0%
Other Sources (Uses)- - - - - 0%
Expenditure Savings - 1,268,462 1,300,000 1,300,000 - 0%
Total Other Sources (Uses)1,238,953 1,863,805 67,038,651 23,986,098 (43,052,553) -64%
Revenues and Other Sources Over (Under)
Expenditures and Other Uses 9,484,604 (47,026,158) (3,402,264) (1,087,862) 2,314,402 -68%
Fund Balance, Beginning of Year 125,495,919 134,980,651 67,271,610 88,130,147 20,858,537 31%
Fund Balance, End of Year 134,980,524 87,954,493 63,869,346 87,042,285
Prior Year Restatement - 0%
Reserved for Debt Service 2,125,253 2,125,252 2,119,721 2,125,252 5,531 0%
Unreserved 132,855,271 85,829,242 61,749,625 84,917,033 23,167,408 38%
Total Fund Balance 134,980,524 87,954,493 63,869,346 87,042,285 23,172,939 36%
2017 - 19 Financial Plan
Variance % Change
D-2
CHANGES IN FINANCIAL POSITION
ALL GOVERNMENTAL FUNDS COMBINED
Actual Current Budget Original Revised
16-17 17-18 Budget Budget
Revenues
Tax Revenues 56,753,255 57,723,638 59,710,423 59,587,543 (122,880) 0%
Fines and Forfeitures 139,534 147,600 147,600 147,600 - 0%
Investment and Property Revenues 259,301 356,098 356,098 356,098 - 0%
From Other Governments 2,654,263 16,514,738 15,121,885 15,121,885 - 0%
Service Charges 14,728,538 11,579,969 11,491,458 11,723,320 231,862 2%
Other Revenues 620,830 176,777 146,200 198,200 52,000 36%
Total Revenues 75,155,721 86,498,820 86,973,664 87,134,646 160,982 0%
Expenditures
Operating Programs
Community Safety 28,182,941 32,496,354 32,394,244 31,816,719 (577,525) -2%
Infrastructure & Transportation 10,482,258 10,198,619 11,974,763 11,307,026 (667,737) -6%
Culture & Recreation 3,506,780 6,475,972 3,851,083 3,687,670 (163,413) -4%
Environmental Health & Open Space 874,057 1,847,292 1,196,643 1,107,516 (89,127) -7%
Community & Neighborhood Livability 8,964,068 6,372,018 8,368,495 8,902,403 533,908 6%
Fiscal Health & Governance 13,938,106 17,598,967 15,968,836 15,819,015 (149,821) -1%
CalPERS Discount Rate - - 375,000 - (375,000) -100%
Total Operating Programs 65,948,210 74,989,222 74,129,064 72,640,350 (1,488,714) -2%
Reimbursed Expenditures (4,164,747) (4,264,633) (4,264,633) (3,917,663) 346,970 -8%
Total Operating Expenditures 61,783,463 70,724,589 69,864,431 68,722,687 (1,141,744) -2%
Capital Improvement Plan Projects 10,145,986 36,755,196 23,265,607 24,758,084 1,492,477 6%
Debt Service 3,243,976 3,374,758 3,506,210 3,185,500 (320,710) -9%
Total Expenditures 75,173,425 110,854,543 96,636,248 96,666,271 30,023 0%
Other Sources (Uses)
Operating Transfers In 11,756,033 11,924,950 11,443,133 10,688,969 (754,164) -7%
Operating Transfers Out (10,606,985) (9,918,041) (9,362,660) (9,488,252) (125,592) 1%
Proceeds from Debt Financing 1,141,468 595,000 773,000 773,000 - 0%
Projected MOA Adjustments - - - - - 0%
Expenditure Savings - 1,268,462 1,300,000 1,300,000 - 0%
Total Other Sources (Uses)2,290,516 3,870,371 4,153,473 3,273,717 (879,756) -21%
Revenues and Other Sources Over (Under)
Expenditures and Other Uses 2,272,812 (20,485,352) (5,509,111) (6,257,907) (748,796) 14%
Fund Balance, Beginning of Year 49,602,347 51,875,159 26,281,236 31,565,461 5,284,225 20%
Prior Year Restatement - 0%
Fund Balance, End of Year 51,875,159 31,389,807 20,772,125 25,307,554 4,535,429 22%
Reserved for Debt Service 2,125,253 2,125,252 2,119,721 2,125,252 5,531 0%
Unreserved 49,749,906 29,264,555 18,652,404 23,182,302 4,529,898 24%
Total Fund Balance 51,875,159 31,389,807 20,772,125 25,307,554 4,535,429 22%
2017 - 19 Financial Plan
Variance % Change
D-3
CHANGES IN FINANCIAL POSITION
LOCAL REVENUE MEASURE SUB-FUND
Actual Current Budget Original Revised
16-17 17-18 Budget Budget
Revenues
Tax Revenues 7,331,660 7,445,096 7,679,000 7,673,084 (5,916) 0%
Investment and Property Revenues 44,796 - - - - 0%
Total Revenues 7,376,456 7,445,096 7,679,000 7,673,084 (5,916) 0%
Expenditures
Operating Programs
Community Safety 1,204,966 1,539,130 1,857,297 1,593,272 (264,025) -14%
Infrastructure & Transportation 370,875 400,795 531,007 415,682 (115,325) -22%
Culture & Recreation 84,249 83,520 - 84,563 84,563 0%
Environmental Health & Open Space 114,116 139,685 152,068 147,068 (5,000) -3%
Community & Neighborhood Livability 352,617 366,628 84,563 384,350 299,787 355%
Fiscal Health & Governance - - - - - 0%
Capital Improvement Plan Projects 4,080,548 10,957,892 4,737,323 4,687,323 (50,000) -1%
Total Expenditures 6,207,371 13,487,650 7,362,258 7,312,258 (50,000) -1%
Other Sources (Uses)
Operating Transfers In - 1,658,400 1,197,723 1,197,723 - 0%
Operating Transfers Out - (1,788,400) (1,462,723) (1,462,723) - 0%
Total Other Sources (Uses) - (130,000) (265,000) (265,000) - 0%
Revenues and Other Sources Over (Under)
Expenditures and Other Uses 1,169,085 (6,172,554) 51,742 95,826 44,084 85%
Fund Balance, Beginning of Year 4,732,397 5,901,482 (248,507) (271,073) (22,566) 9%
Fund Balance, End of Year sub-total* 5,901,482 (271,073) (196,765) (175,247) 21,518 -11%
Fund Balance Components:
Reserved (6,141,192)
Unreserved (239,711)
*20% Reserve fund balance is fully reported/calculated within General Fund Changes in Financial Position.
Variance % Change
2017 - 19 Financial Plan
D-6
CHANGES IN FINANCIAL POSITION
FLEET REPLACEMENT FUND
Actual Current Budget Original Revised
16-17 17-18 Budget Budget
Revenues
Investment and Property Revenues 10,898 10,000 10,000 10,000 - 0%
Service Charges - - - - - 0%
Other Revenues -
OthSale of Surplus Property 137,034 40,000 80,000 80,000 - 0%
OthGreen Vehicle Rebates 9,000 - - - - 0%
Total Revenues 156,932 50,000 90,000 90,000 - 0%
Expenditures
Capital Improvement Plan Projects 1,594,712 1,324,078 699,000 699,000 - 0%
Total Expenditures 1,594,712 1,324,078 699,000 699,000 - 0%
Other Sources (Uses)
Operating Transfers In 31,652 768,000 624,000 624,000 - 0%
Operating Transfers Out (60) (768,000) (773,000) (773,000) - 0%
Proceeds from Debt Financing 1,141,468 595,000 773,000 773,000 - 0%
Total Other Sources (Uses)1,173,060 595,000 624,000 624,000 - 0%
Revenues and Other Sources Over (Under)
Expenditures and Other Uses (264,721) (679,078) 15,000 15,000 - 0%
Fund Balance, Beginning of Year 1,809,605 1,544,884 865,374 865,806 432 0%
Fund Balance, End of Year 1,544,884 865,806 880,374 880,806 432 0%
Variance % Change
2017 - 19 Financial Plan
D-18
CAPITAL IMPROVEMENT PLAN - SUMMARY BY FUND & FUNDING SOURCE
Fund 2018-19 Financial Plan
Adopted Revised Change
Airport Area Impact Fee
Airport Area Impact Fee $750,000 $750,000 $0
Airport Area Impact Fee Total $750,000 $750,000 $0
Community Development Block Grant (CDBG) Fund
State or Federal Grant $0 $0 $0
CDBG Fund Total $0 $0 $0
Fleet Replacement Fund
Debt Financing $624,000 $624,000 $0
Fleet Replacement Fund $75,000 $75,000 $0
General Capital Outlay $0 $0 $0
Fleet Replacement Fund Total $699,000 $699,000 $0
General CIP Grant Fund
State or Federal Grant $13,327,453 $13,327,453 $0
SB-1 $180,000 $180,000 $0
Zone 9 - County Grant $100,000 $476,000 $376,000
General CIP Grant Fund Total $13,607,453 $13,983,453 $376,000
General Purpose CIP
Developer Contribution $97,547 $97,547 $0
General Capital Outlay $261,000 $1,549,000 $1,288,000
Development Services $0 $59,477 $59,477
CIP Reserves $0 $0 $0
General Purpose CIP Total $358,547 $1,706,024 $1,347,477
Information Technology Replacement Fund
General Capital Outlay $1,078,977 $1,078,977 $0
Parking Fund $18,854 $18,854 $0
Sewer Fund $71,780 $71,780 $0
State or Federal Grant $0 $0 $0
Transit Fund $56,570 $56,570 $0
G-10
Water Fund $52,150 $52,150 $0
Whale Rock Fund $15,963 $15,963 $0
Information Tech. Replacement Fund
Total
$1,294,294 $1,294,294 $0
Local Revenue Measure Sub-Fund
Measure G Revenue $3,539,600 $3,489,600 ($50,000)
Measure G Revenue - Information
Technology
$182,023 $182,023 $0
Measure G Revenue - Major Facility
Replacement
$507,700 $507,700 $0
Measure G Revenue - Fleet Replacement $508,000 $508,000 $0
Measure G Revenue - Fleet Debt $0 $0 $0
Local Revenue Measure Sub-Fund
Total
$4,737,323 $4,687,323 ($50,000)
Major Facility Replacement Fund
General Capital Outlay $101,000 $101,000 $0
Sewer Fund $21,600 $21,600 $0
Water Fund $21,600 $21,600 $0
Major Facility Replacement Fund
Total
$144,200 $144,200 $0
Parking Fund
Debt Financing
Parking Fund $650,000 $650,000 $0
Parking Fund Total $650,000 $650,000 $0
Parkland Development Fund
Park In-Lieu Fees $179,000 $254,000 $75,000
Parkland Development Fund Total $179,000 $254,000 $75,000
Public Art Fund
Art In Lieu Fee $15,000 $15,000 $0
General Capital Outlay $111,700 $111,700 $0
Public Art Fund Total $126,700 $126,700 $0
Sewer Fund
Sewer Fund $58,162,000 $16,082,583 ($42,079,417)
Sewer Fund Total $58,162,000 $16,082,583 ($42,079,417)
Transit Fund
G-11