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HomeMy WebLinkAbout04-18-2017 Item 2, BradfordRE EIVEi3 Council Memorandum APR 13 2017 -I. COUNCIL MEETING: 4-/ - I bo- J ;L ITEM NO.: April 13, 2017 TO: FROM: VIA: SUBJECT Enc: City Council Xenia Bradford, Interim Finance Director Katie Lichtig, City Manager STRATEGIC BUDGET DIRECT ON AND MAJOR CITY GOAL WORK PROGRAMS FOR THE 2017-19 FINANCIAL PLAN Revised Attachment A Attached is a replacement for Attachment A for this item. The original attachment published with the agenda packet included a General Fund Five Year Forecast highlights on packet page 185. An updated version of that section is already included on page 186 and page 185 has been removed. Also, the attachment was missing the General Fund Five Year Forecast which has been added. The attachment included with this memo replaces the originally posted Attachment A and corrects these publishing errors. Attachment A ATTACHMENT A: FIVE-YEAR FORECASTS General Fund • Revenues — top five key revenue sources assumptions as shown in the assumptions table are based on assumption of slow steady economic growth with a moderate recession in 2019-20 and a recovery in 2020-21. The forecast projects a more aggressive growth for Transient Occupancy Tax and Property Tax due to three major hotel developments currently under construction. • Expenditures — Include increase in required contributions due to California Public Employee's Retirement System (Ca1PERS) policy change to lower discount rate used for the actuary valuations from 7.5% to 7% • Include one-time and ongoing expenditures related to Significant Operating Program Changes and Major City Goals/Other Important Objectives • Include the reduction of approximately $90,000 from school district for a School Resource Officer (safety) • Fiscal Outlook: The General Fund Five Year Forecast continues to show Expenditures outpacing Revenue Growth. This trend shows a budget gap starting in fiscal year 2018-19 and continuing to grow through the fiscal forecast primarily due to projected CalPERS costs outpacing revenue growth. Parking Fund • Revenues — No parking rate changes included in analysis (modifications to fines, forfeitures, and rates will be addressed in the June 2017 Fund Review) • Utility Expenditures - Annual Growth Rates: 3% Water & Sewer; 2% Trash, and 5% for Electric • Other Expenditures: The forecast includes funding for the Palm Nipomo Structure, the parking structure assessment program, the Marsh Street Structure Maintenance, and the replacement of the Parking Access Revenue Control System (PARCS). • Fiscal Outlook: Working capital decreases each year with a negative balance projection of fallings to less than one-third the current level in the outmost year (2022-23). The forecast includes the funding of the Palm Nipomo structure in 2019-20, but even without this major project, the annual working capital balance would continue to decrease due to expenditures exceeding annual revenue. Transit Fund • Federal Grant revenue is anticipated to remain flat over the 5 -year forecast, while State Grants are anticipated to decline by 1% over the same period • 9% Transit Fare Increase in 2017-18 and I% annual increase thereafter • Bus replacement grant revenue is assumed for each bus • 3% annual increase for contract services per agreement with First Transit • 3% annual increase for operational Short -Range Transit Plan implementation • Fiscal Outlook: Based upon the conservative revenue projections and expenditures, working capital decreases each year though Fund is projecting to have a modest balance in 2021-22. Staff will present Council with revenue and expenditure options, including service levels, as part of the 2017-19 Transit Fund Review in June. Sewer Fund • Revenues — there is no increase recommended for 2017-18 rates, forecast assumes a 3% sewer rate increase • Expenditures — includes debt financing assumptions through State Revolving Loan fund for Water Resource Recovery project. • Fiscal Outlook: The fiscal condition of the Sewer Fund remains sound over the five-year forecast. A sewer rate structure study and revenue assessment is being recommended to ensure the long-term health of the Sewer Fund. Water Fund • Revenues — 2017-18 rates are based on Council approved rate increases; the drought surcharge is eliminated; future forecast assumes a 3% water rate increase • Fiscal Outlook: The fiscal condition of the Water Fund remains sound over the five-year forecast. However, reduced revenues due to the drought (and the resultant compounding impacts) along with significant capital infrastructure needs, requires a re-evaluation long-term business. With the elimination of the drought surcharge and conservative assumptions on increased water sales, the fifth year of the forecast shows a minimal working capital balance. Addressing capital needs remains a high priority for the water and wastewater utilities. A robust capital program based on master plan prioritization and increased fee recommendations are included in this forecast. ATTACHMENT A: FIVE-YEAR FORECASTS FORECAST ASSUMPTIONS 2017-18 2018-19 0192020-21 2021-22 4,5 EXPENDITURES Staffing & Operating Expenses (excluding PERS) 2 2.0% 2.0% 2.0% 2.0% 2.0% PERS Normal Costs Rates Misc. Tier 10.4% 10.4% 10.4% 10.4% 10.4% Safety Tier 1 21.4% 21.4% 21.4% 21.4% 21.4% Safety Tier 2 (Police) 16.5% 16.5% 16.5% 16.5% 16.5% Safety Tier 2 (Fire) 18.5% 18.5% 18.5% 18.5% 18.5% PEPRA 12.7% 12.7% 12.7% 12.7% 12.7% PERS Unfimded Liability Payments3 $ 8,134 $ 9,331 $10,593 $11,420 $ 12,268 (all tiers, $ in thousands) PERS Discount Rate Adjustment - Normal Costa 0.0% 0.5% 1.0% 2.0% 2.0% PERS Discount Rate Adjustment - Unfimded Liability3 0.0% 2.0% 4.0% 10.0% 15.0% Retirement Incentives 1.0% 1.0% DescriptionsAssumption 1) Forecast Assumptions may vary for each Fund. 2) Staffing & Operating Expenses - Assumes 2% annual growth with seasonal fluctuations within 2 -year Financial Plan cycles. 3) PERS Costs are based on Actuarial Valuation Report Rates and Amortization schedules. 4) 2016-17 base budget levels used to develop 2017-18 and 2018-19 expenditure budgets. Increases to operating and capital budgets from 2016-17 levels fall within the following variance criteria: • Executed contract that cannot be renegotiated, • Known increase outside of City's control (Example: Utilities), • Health and safety requirements, • Critical efficiency or effectiveness measure, and/or • Biennial or "lumpy" costs which do not occur each fiscal year. 5) Capital Improvement Plan Projects excluded from Assumptions table since expenditure forecasts are based on a Five -Year Capital Improvement Program City of San Luis Obispo - General Fund Five Year Fiscal Forecast 2017-19 Financial Plan S in 000's Actual Actual Revised Five Year Forecast zk 1 1 1. 1 1: 10 2020-21 1 17-19 Financial Plan 1 Sales Tax 15,273 17,498 16,584 16,932 17,277 17,186 17,659 18,170 2 Measure Y/G Sales Tax 7,136 7,178 7,391 7,607 7,679 7,636 7,790 7,959 3 Sales Tax Prop 172 410 405 428 437 445 445 454 463 4 Property Taxes 9,632 10,187 10,767 10,950 11,607 12,245 12,858 13,501 5 Property Tax in Lieu of VLF 3,849 4,113 4,365 4,593 4,846 5,088 5,343 5,610 6 Transient Occupancy Tax 6,806 7,113 7,186 7,294 7,440 7,663 8,008 8,368 7 Utility Users Tax 5,211 5,414 5,506 5,568 5,617 5,690 5,779 5,870 8 Franchise Fees 2,790 1,538 1,540 1,527 1,527 1,527 1,527 1,527 9 Business Tax 2,203 2,492 2,500 2,747 2,884 3,028 3,180 3,339 10 Real Property Transfer Tax 298 366 373 381 388 396 404 412 12 Transfers In (Gas, TDA, CoS, Other) 1,505 2,924 2,353 3,190 3,239 2,307 2,307 2,307 13 Other Subventions & Grants 1,278 1,539 316 316 316 316 316 316 14 Development Review Fees 5,274 5,624 5,647 6,154 5,950 6,068 6,188 6,311 15 Recreation Fees 1,881 1,759 1,640 1,810 1,846 1,883 1,921 1,959 16 Other Service Charges 1,875 1,952 1,750 1,633 1,657 1,682 1,707 1,733 17 Other Revenues 697 891 543 543 543 543 543 543 18 • . .12,510 14,689 12,249 13,646 13,551 12,799 12,982 13,169 19 Total Resources 66,118 70,9931 20 Operating Expenses (exc/PERS) 44,576 46,223 49,548 50,675 52,593 53,112 54,313 55,629 21 PERS Normal Costs 4,322 3,612 3,866 3,058 3,020 3,080 3,157 3,236 22 PERS Unfunded Liability 3,536 5,629 6,871 8,134 9,330 10,591 11,416 12,264 23 PERS Discount Rate Adjustment 375 802 1,896 2,550 .24 Subtotal: Operating Expenses 5 5 J. 5,318 67586 70,783 73,679 25 Debt Service 5,312 3,025 3,246 3,212 3,122 2,795 2,391 2,391 26 Transfer to CDBG 73 147 154 154 154 154 154 154 27 Transfer to Insurance Benefit Fund 280 2,124 1,740 750 - - - - 28 Transfer to Parkland Development Fund - - 900 29 CIP - Fleet Replacement 533 384 - 604 471 485 500 500 30 CIP - IT Replacement 991 617 2,621 726 1,261 525 551 579 31 CIP - Major Facility Replacement 551 146 505 715 590 855 917 962 32 CIP - All Other & Local Measure Funded 2,197 3,329 6,507 3,552 3,797 3,502 3,550 3,728 r08Ct5 Subtotal: Operating - _, 9 ..fijj" 1. 8,314 34 • • Total3 :1 74,712 75,902 35 Resources Over/(Under) Expenses 3,747 5,757 (7,069) 101 (1,450) (2,197) (2,863) (3,606) 36 Fund Balance, Beginning of Year 20,317 24,566 21,539 14,470 14,470 14,571 13,020 12,374 37 Nondispensable/Restricted/ Committed (8,074) (489) (489) (489) (489) (489) (489) 38 Funding Adjustment 502 (709) - - - - - L39 Ending Fund Balance 24,566 21,539 14,470 14,571 13,020 12,374 10,158 40 Reserve @ 20% Operating Costs (10,487) (11,476) (10,683) (10,747) (11,123) (11,239) (11,494) (11,773) 41 Designated Reserve (8,108) (725) (725) (725) (725) (725) (725) 42 Reserve• .= "a.. • 1. 1. 11 1. Sales Tax Measure Y/G Sales Tax Property Taxes Transient Occupancy Tax Utility Users Tax Development Review Fees ANISNO&W =1 i 14.6% -5.2% 2.1% 2.0% -0.5% 2.8% 2.9% 0.6% 3.0% 2.9% 0.9% -0.6% 2.0% 2.2% 5.8% 5.7% 1.7% 6.0% 5.5% 5.0% 5.0% 4.5% 1.0% 1.5% 2.0% 3.0% 4.5% 4.5% 3.9% 1.70/co 1.10/( 0.9% 1.3% 1.6% 1.6% 20.4% -79.5% 0.0% 0.0% 0.0% 0.0% 0.0% Operating Expenses (excl PERS) 3.7% 7.2% 2.3% 3.8% 1.00/0 PERS Total Costs 17.6% 16.2% 4.2% 13.7% 13.7% Debt Service -4.4% 0.4% -0.1% -0.1% -0.5O/C CIP - Fleet Replacement 0.0% 0.0% 67.1% 0.0% 0.0% CIP - IT Replacement -70.2% 521.7% 0.0% 88.6% -156.2% CIP - Major Facility Replacement -40.9% 58.2% 8.0% -17.3% 21.0% CIP - All Other & Local Measure Funded projects) 205.3% 2180.4% -585.1% 34.3% -50.0% Assumes 2% growth with seasonal fluctuations within 2 -year Financial Plan cycles 2.3% 2.4% 13.8% 9.6% -0.6% 0.0% 0.0% 0.0% 5.4% 5.5% 11.8% 8.2% 5.6% 19.4% PARKING FUND FIVE-YEAR FORECAST 2017-19 Financial Plan Out -Year Fund Projections ACTUAL Mid Year Projected Projected Projected Projected Projected Budget 2016-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Revenues_ Service Charges Parking Meter Collections Lots 304,345 166,200 140,400 141,900 122,900 124,200 125,500 Streets 1,526,182 1,539,100 1,648,100 1,664, 700 1,400 1,698.300 1,715,200 Parking Structure Collections 1,162,982 1,054,700 1,489,500 1,504,400 1,519,500 1,596,700 1,801,100 Lon -Term Parking Revenues 642,483 434,900 795,000 802,900 810,900 819;100 827,300 Lease Revenues 403,630 500,500 502,900 509,800 512,300 514,800 521,800 Parkin In -Lieu Fees .1 2,641,296 20,200 20,400 20,600 20,800 1 21,000 21,200 Other Service Charges (15,096) 100 (94,400) (95,400 (96,400)1 97 400 98,400 Total Service Charges 6,665,822 3,715,700 4,501,900 4,548,900 4,571,400 4,676,700 4,913,700 Investment and Property Revenues 172,523 48.200 48.000 52,000 54,400 24,700 22,800 Fines and Forfeitures 579,823 669,900 5_8.7,300 593.200 599,100 1 605,100 611,100 Other Revenues 161,164 -1 100 C 100 100 1 100 100 _ Total Revenues 7,579,332 4433,800 5,137,300 5,194,200 5,225,0001 5,306,600 5,547,700 Ex enditures Operating Programs 5 ratingExpenses 1,835753 2,385,106 1,999,600 2,039,500 2,100,700 2210,400 2421,000 Retirement Contribution 61,300 62,600 64,4001 66,100 67,700 Unfunded Liabilities 157,700 171,800 193,3001 207,500 222,300 _ CaIPERS Discount Rate Cost - 6,200 12,500 28,500 36,700 General Government 711,587 684,603 601,200 601,200 601,200 601,200 601,200 Motion Project -one time - - 151,000 151,000 - - Motion Project - on going - - 42,000 47.200 48,600 5Q 100 Total Operating Pro rams 2,547,340 3,069,709 2,970,81 3,074,300 1 3,162,300 3,399,000 Capital Improvement Plan P . ects 20.547 _2_._231,404 831,633 668,854 _3,019,300 23,688,069 120,633 59,749 Debt Service 953,751 969 400 967 400 967 500 2 047 500 412 500 409 300 Total Expenditures 3,521,638 6,2701513 4,769,833 4,710,654 28,754,869 1 5,695,433 5,868,049 Other Sources (Uses) Cashflow, adj. for working capital Operating Transfers In - - - - Operating Transfers Out 473,368 17,600,000 Proceeds from Debt Financing - Other f82,653) _ (11,198) GST Loan er Council Approval (500,000 _ Total Other Sources (Uses) (556,021) (511,198) 17,600,000 - (Revenues Overt(Under) Expenses 3,501,673 (2,347,911) 367,467 483.546(5.929, 69) ( (388,833) 320,349 Working Capital, Beginning of Year 8,436,557 11,938,230 10,024,311 10,391,778 10,875,324 4,945,455 4,556,622 ru _ Working Capital, End of Year 11,938,230 9,590 319 10 391,778 1p 875,324FAL,945.455 4,556,622 4 236,273 Reserve 1 509,468 613,942 594,160 614,860 1 603,860: 632,460 679,800 Unreserved Workin 2 C:a• iral 11,428 762 8,976 377 9,797,618 10.260.464 1 4,341.595 3,R24 162 3,556.473 Revenue Assumptions: Currently, there are no rate changes that have been adopted by the City Council, though staff is projecting a modest 1% annual increase in revenues because of general parking volume demand. Modifications to fines, forfeitures and rates will be forthcoming as part of the Fund review in June 2017 Expenditure Assumptions: 2% annual staffing cost increase, 2% annual contract services cost increase, 3% annual increase for water & sewer rates, 2°10 annual increase for trash service and 5% annual increase for electric utility service PARKING •-ASSUMPTIONS Mid Year Burl et 2016-17 2017-19 Financial Plan Projected Projected 2017-18 2018-19 Out -Year Fund Projections Projected Projected Projected 2019-20 2020-21 2021-22 Revenues Service Charges Parking Meter Collections Lots -45% -16% 1% -13% 1% 1% Streets 1% 7% 1% 1% 1% 1% Parking Structure Collections -9% 41% 1% 1% 5% 13% Long -Term Parking Revenues -32% 83% 1% 1% 1% 1% Lease Revenues 24% 0% 1% 0% 0% 1% Parkin In -Lieu Fees -99% 1% 1% 1% 1% 1% Other Service Charges Investment and Property Revenues -101% -72% -94500% 0% 1% 8% 1% 5% 1% -55% 1% -8% Fines and Forfeitures 16% -12% 1% 1% 1% 1% Other Revenues Expenditures O er ting Programs -100% #DIV/0! 0% 0% 0% 0% _ Operating Expenses Retirement Contribution 30% -16% 2% 2% 3% 3% 5% 3% 10% 2% Unfunded Liabilities 9% 13% 7% 7% Ca/PERS Discount Rate Cost 102% 128% 29% Capital Im rovement Plan Projects 10760% -63% -20%1-3442% -99% 50% TRANSIT FUND - FORECAST 2017-19 Finacial Plan Out -Year Fund Projections Mid -Year Actual Budget 2016- Projected Projected Projected Projected Projected 2015-16 17 2017-18 2018-19 2019-20 2020-21 2021-22 Revenues Investment and Property Revenues 11,203 5,800 5,800 5,800 5,800 5,800 5,800 From Other Governments TDA Revenues (LTF) 1,312,716 1,286,625 1,299,676 1,299,676 1,299,676 1,299,676 1,299,676 TDA Revenues (STA) 162,418 159,890 154,027 152,748 151,482 150,228 148,987 Other Grants* 39,738 1,300,200 174,600 1,060,000 1,590,000 1,590,000 250,000 FTA Grants 1,373,948 1,424,555 1,426,251 1,426,251 1,426,251 1,426,251 1,426,252 'Service Charges 658,601 690,381 721,757 723,778 739,384 755,414 755,414 Other Revenues 868 4,600 6,600 6,600 6,600 6,600 6,600 TOTAL REVENUES: 3,559,492 4,872,051 3,788,712 4,674,853 5,219,193 5,233,969 3,892,729 Expenditures Operating Programs Operating Expenses 2,819,992 3,448,368 3,436,064 3,545,042 3,623,935 3,630,255 3,636,700 Retirement Contribution 22,956 23,276 23,858 24,545 25,066 Unfunded Liability 38,229 41,634 46,828 50,263 53,858 Discount Rate Adjustment 1,884 3,823 8,526 10,555 General Government 277,329 288,995 312,332 312,332 312,332 312,332 312,332 Total Operating Programs 3,097,321 3,737,363 3,809,581 3,924,168 4,010,776 4,025,920 4,038,511 Capital Improvement Plan Projects* 131,999 1,657,386 338,317 1,141,570 1.700.523 1,615,982 276,001 TOTAL EXPENDITURES: 3,229,320 5,394,751 4,147,898 5,065,738 5,711,299 5,641,902 4,314,512 Other Sources (Uses) Cashflow adjustment for working capital Operating Transfers Out Other Sources (21,225) (4,200) (58,081) (79,101) (23,579) (23,579) (23,579) TOTAL OTHER SOURCES: (21,225) (4,200) (58,081) (79,101) (23,579) (23,579) (23,579) Revenues and Other Sources (Over/Under) 308,948 (526,900) (417,267) (469,985) (515,686) (431,513) (445,362) Working Capital, Beginning of Year 2,825,195 3,134,143 2,607,243 2,189,976 1,719,990 1,204,305 772,792 Working Capital, End of Year Fund 1 3,134,143 2,607,2431 2,189,976 1,719,990 1 1,204,305 772,792 327,431 * Bus Replacements costs are equal to the Other Grant revenues. Should grant funding for bus replacements not become available, staff will explore other options, such as bus refurbishment, to extend the life of the buses. Revenue Assumptions: 0% increase in Federal Grants and 1 % decrease in annual State Grants. An annual increase in Cal Poly Service Agreement. 9% increase in Fare Increase in 2017-18 and a 1% annual increase thereafter. Bus replacement grant revenue is assumed for each bus replacement Expenditure Assumptions: 2% annual increase in staffing costs, 3% annual increase for contract services per agreement with First Transit, 3% annual increase for operational short range plan implementation TRANSIT Mid-Year Budget 2016- 17 2017-19 Finacial Plan Projected Projected 2017-18 2018-19 Out-Year Fund Projections Projected Projected Projected 2019-20 2020-21 2021-22 Revenues Investment and Property Revenues -48.2% 0.0% 0.0% 0.0% 0.0% 0.0% TDA Revenues (LTF) -2.0% 1.0% 0.0% 0.0% 0.0% 0.0% TDA Revenues (STA) -1.6% -3.701. -0.8% -0.8% -0.8% -0.8% Other Grants* 3171.9% -86.6% 507.1% 50.0% 0.0% -84.3% FTA Grants 3.7% 0.1% 0.0% 0.0% 0.0% 0.0% ,Service Charges 4.8% 4.5% 0.3% 2.2% 2.2% 0.0% Other Revenues 430.0% 43.5% 0.0% 0.0% 0.0% 0.0% (Expenditures Operating Programs Operating Expenses 22.3% -0.4% 3.2% 2.2% 0.2% 0.2% Retirement Contribution 1.4% 2.5% 2.9% 2.1% Unfunded Liability 8.9% 12.5% 7.3% 7.2% Discount Rate Adjustment 103.0% 123.0% 23.8% General Government 4.2% 8.1% 0.0% 0.0% 0.0% 0.0% Total Operating Programs 20.7% 1.9% 3.0% 2.2% 0.4% 0.3% Capital Improvement Plan Projects 1155.6% -79.6%1 237.4% 49.0% -5.0% -82.9% REVENUES BY TYPE Sewer Service Charges $ 13,062,863 $ 12,800,000 $ 12,800,000 $ 13,184,000 $ 13,579,520 $ 13,986,906 $ 14,406,513 Base Fee Revenue $ 1,447,669 $ 1,491,100 $ 1,501,464 $ 1,557,100 $ 1,614,724 $ 1,674,403 $ 1,736,210 Cal Poly Sales $ 888,437 $ 875,000 $ 875,000 $ 901,250 $ 928,288 $ 956,136 $ 984,820 Development Impact Fees $ 675,489 $ 400,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 Industrial User Charges $ 79,822 $ 81,600 $ 85,000 $ 85,000 $ 85,000 $ 85,000 $ 85,000 Investment & Property Revenue $ 355,802 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 Proceeds from Debt Financing $ $ $ 19,500,000 $ 56,500,000 $ 35,000,000 $ 29,000,000 Miscellaneous S 307,026 S 247,500 S 373.W0 5 383,071 5 390,732 $ 39$,547 $ 406,518 TOTAL $ 16,817,108 5 15,945,200 $ 35,484,464 $ 72,960,421 $ 51,948,264 $ 46,450,992 $ 17,969,061 EXPENDITURE BY CATEGORY Salaries & Benefits $ 3,088,509 $ 3,557,866 $ 3,541,728 $ 3,636,768 $ 3,703,632 $ 3,771,803 $ 3,841,308 PERS Normal Cost' $ 541,531 $ 821,024 $ 291,128 $ 280,832 $ 317,000 $ 354,503 $ 361,593 PERS Unfunded Liability 1,2 $ $ - $ 486,836 $ 528,916 $ 603,550 $ 675,398 $ 744,864 Operating Expenditures $ 2,388,767 $ 3,527,565 $ 3,000,534 $ 3,068,754 $ 3,114,785 $ 3,161,507 $ 3,208,930 Capital Outlay $ 5,178,482 $ 21,366,383 $ 22,061,023 $ 58,255,380 $ 37,447,876 $ 30,910,260 $ 4,090,873 Debt Service $ 1,437,543 $ 1,435,589 $ 1,433,709 $ 1,431,006 $ 4,468,004 $ 4,470,107 $ 7,548,013 Transfers Out 5 2,0b9,099 S 2,082,360 $ 2,373,206 S 2,494,751 S 2,215,578 S 2,257,950 S 2,301,169 TOTAL $ 14,703,931 $ 32,789,787 $ 33,188,164 $ 69,696,407 S 51,870,425 5 45,601,529 $ 22,096,750 EXPENDITURE BY FUNCTION General Government $ 2,143,573 $ 2,155,530 $ 2,447,392 $ 2,568,373 $ 2,247,786 $ 2,290,002 $ 2,333,422 Wastewater Collection $ 2,927,473 $ 12,233,582 $ 4,410,586 $ 3,480,835 $ 3,985,403 $ 3,676,599 $ 5,996,288 Environmental Compliance $ 236,987 $ 260,393 $ 265,608 $ 279,856 $ 324,621 $ 299,385 $ 307,590 Water Resource Recovery $ 7,611,910 $ 14,989,339 $ 23,930,619 $ 61,064,474 $ 42,968,626 $ 36,978,413 $ 11,019,566 Utilities Revenue $ - $ $ 511,901 $ 526,681 $ 538,977 $ 551,349 $ S62,431 Water Quality Lab $ 588,348 $ 889,545 $ 780,277 $ 798,855 $ 824,701 $ 850,573 $ 872,621 Sewer Customer Service $ 350,279 $ 503,636 $ - $ $ - $ $ Wastewater Administration $ 845,361 S 1,757,762 5 841,781 $ 977,333 $ 980311 $ 955,208 S 1,004,831 TOTAL $ 14,703,931 S 32,789,787 $ 33,188,164 $ 69,696,407 $ 51,870,425 $ 45,601,529 S 22,095,750 CHANGES IN FINANCIAL POSITION Working Capital - Beginning $ 27,071,809 $ 28,917,309 $ 12,072,722 $ 14,101,344 $ 17,097,682 $ 16,907,843 $ 17,489,629 Revenues over(under) Expenditures $ 1,845,500 S (16,844,5871 $ 2.028,623 S 2,996,338 5 (189,839] $ 581,786 $ (4,395,3661 Working Capital - year End $ 28,917,309 $ 27,072,722 $ 14,101,344 S 17,097,682 $ 16,907,843 $; 17,489,629 $ 13,094,263 Operating Reserve $ 1,617,581 $ 1,997,563 $ 1,938,686 $ 2,002,004 $ 1,990,909 $ 2,044,232 $ 2,091,573 Rate Stabilization 5 697,565 5 683,750 5 683,759 S 704,263 S 725,390 5 747,152 $ 769,567 Unreserved Working Capital - Year End $ 26,602,163 S 9,391,409 $ 11,478,908 $ 14,391,415 $ 140191,544 5 14,698,245 $ 10,233,124 PERS Normal and Unfunded Liability costs include PERS Discount Rate Adjustments 'Prior to 2017/18, PERS Unfunded Liability costs were calculated as a percentage of total salaries. Beginning in 2017/18, Unfunded Liability costs are lump sum payments based on PERS Actuarial valuation reports. SEWER FUND - FORECAST ASSUMPTIONS REVENUES BY TYPE Sewer Service Charges -2.0% 0.0% 3.0% 3.0% 3.0% 3.0% Base Fee Revenue 3.0% 0.7% 3.7% 3.7% 3.7% 3.7% Cal Poly Sales -1.5% 0.0% 3.0% 3.0% 3.0% 3.0% Development Impact Fees -40.8% -25.0% 0.0% 0.0% 0.0% 0.0% Industrial User Charges 2.2% 4.2% 0.0% 0.0% 0.0% 0.0% Investment & Property Revenue -85.9% 0.0% 0.0% 0.0% 0.0% 0.0% EXPENDITURE BY CATEGORY Salaries & Benefits 17.1% -0.7% 3.9% 1.8% 1.8% 1.8% PERS Normal Cost (including Discount Rate Adjust) 53.3% -64.9% 6.8% 4.9% 13.5% 2.0% PERS Unfunded Liability (including Discount Rate Adjust) 8.6% 16.2% 11.8%1 10.2% Operating Expenditures 46.4% -14.1% 2.3% 1.5% 1.5% 1.5% Capital Outlay 312.2% -3.2% 188.9% -36.9% -16.3% -89.0% EXPENDITURE BY FUNCTION General Government 0.6% 13.5% 4.9% -12.5% 1.9% 1.9% 'Wastewater Collection 318.5% -63.9% -20.6% 17.2%1;-7.5% 6.3% Environmental Compliance 10.7% 2.5% 6.4% 15.5% -7.5% 2.7% 'Water Resource Recovery 96.7% 50.3% 178.2% -31.3% -14.0% -67.7% Utilities Revenue 3.1% 2.2% 2.3% 2.0% Water Quality Lab 52.2% -12.1%1 3.8%1 3.1% 3.2% 2.6% Wastewater Administration 108.4% -48.2%1 5.5% 12.LoL 35.8%1 2.3% Other Inflators 2016-17 Cost Inflators 2017-18 2018-19 2019-20 2020-21 2021-22 Municipal Code Index (MCI) 2.7% 2% 2% 2% 2% 2% Construction Cost Index (CCI) (U.S. Department of Commerce) 3.9% Consumer Price Index (CPI) 3.1% Producer Price Index (PPI) (Wholesale Price Index for Industrial Commodities) 1.3% Salary Increases 2% 2% 2% 2% Sewer Rate Increases Base Fee $ $ 8.57 $ 8.57 $ 8.83 $ 9.09 $ 9.36 $ 9.65 Base Fee % 3.0% 0.0% 3.0% 3.0% 3.0% 3.0% Volumetric 3.0% 0.0% 3.0% 3.0% 3,0% 3.0% Estimated # of meters 14,500 14,600 14,700 14,800 14,900 15,000 1MCI cost inflator used throughout the 5 -Year Forecast since it is a more realistic depiction of anticipated expenditure growth in the Sewer Fund REVENUES BY TYPE $ 14,315,677 $ 11,315,124 $ 10,007,849 $ 9,437,267 $ 6,545,231 Water Services Charges $ 14,989,116 $ 15,438,789 $ 15,901,953 $ 16,379,011 $ 16,870,382 Drought Surcharge Volumetric $ 11,315,124 $ - $ - $ - $ - Base Fee Revenue $ 2,234,196 $ 2,316,462 $ 2,401,653 $ 2,489,870 $ 2,581,219 Drought Surcharge - Base Fee $ - $ - $ - $ - $ - Cal Poly Sales $ 866,250 $ 892,238 $ 919,005 $ 946,575 $ 974,972 Recycled Water $ 400,000 $ 412,000 $ 424,360 $ 437,091 $ 450,204 Development Impact Fees $ 800,000 $ 800,000 $ 800,000 $ 800,000 $ 800,000 AB 939 Reimbursement $ 145,000 $ 147,900 $ 150,858 $ 153,875 $ 156,953 Investment & Property Revenue $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 Proceeds from Debt $ 8,500,000 $ 16,300,000 Miscellaneous $ 523,000 $ 523,000 $ 523,000 $ 523,000 $ 523,000 TOTAL $ 20,007,562 $ 29,080,388 $ 37,470,828 $ 21,779,422 $ 22,406,729 EXPENDITURE BY CATEGORY Salaries & Benefits $ 3,519,809 $ 3,633,034 $ 3,699,888 $ 3,768,051 $ 3,837,548 PERS Normal Cost' $ 294,796 $ 302,479 $ 324,056 $ 362,213 $ 369,457 PERS Unfunded Liability 1'z $ 488,747 $ 534,807 $ 610,211 $ 610,211 $ 752,723 Operating Expenditures $ 10,927,642 $ 11,113,746 $ 11,168,472 $ 11,267,996 $ 11,363,188 Capital Outlay $ 3,303,762 $ 9,448,925 $ 17,165,287 $ 2,785,848 $ 2,178,419 Debt Service $ 2,194,005 $ 2,955,652 $ 2,955,561 $ 3,718,787 $ 3,766,571 Transfers Out $ 2,279,354 $ 2,399,022 $ 2,117,934 $ 2,158,353 $ 2,199,581 TOTAL $ 23,008,1.14 $ 30,387,664 $ 38,041,410 $ 24,671,459 $ 24,467,488 EXPENDITURE BY FUNCTION General Government $ 2,344,754 $ 2,463,925 $ 2,146,328 $ 2,186,610 $ 2,228,015 Water Source of Supply $ 9,907,029 $ 10,059,517 $ 10,137,433 $ 10,213,773 $ 10,332,671 Water Treatment $ 5,245,125 $ 14,154,674 $ 22,077,678 $ 6,383,609 $ 6,491,601 Water Distribution $ 4,263,300 $ 2,346,557 $ 2,301,923 $ 4,538,284 $ 3,982,292 Utilities Services $ 515,893 $ 531,548 $ 548,484 $ 560,008 $ 582,120 Water Administration $ 728,413 $ 831,443 $ 829,564 $ 789,175 $ 850,789 TOTAL $ 23,004,514 $ 30,387,664 $ 38,041,410 $ 24,671,459 $ 24,467,488 CHANGES IN FINANCIAL POSITION Working Capital - Beginning $ 14,315,677 $ 11,315,124 $ 10,007,849 $ 9,437,267 $ 6,545,231 Revenues over (under) Expenditure $ (3,000,553) $ (1,307,275) $ (570,582) $ (2,892,037) $ (2,060,759) Working Capital - Year End $ 11,315,124 $ 10,007,849 $ 9,437,267 $ 6,545,231 $ 4,484,472 Operating Reserve $ 3,502,070 $ 3,596,617 $ 3,584,112 $ 3,633,365 $ 3,704,500 Rate Stabilization $ 1,585,537 $ 1,633,103 $ 1,682,096 $ 1,000,000 Unreserved Working Capital - Year End $ 6,227,518 $ 4,778,129 5 4,171,059 $ 1,911,866 $ 779,972 1PERS Normal and Unfunded Liability costs include PERS Discount Rate Adjustments 2Prior to 2017/18, PERS Unfunded Liability costs were calculated as a percetange of total salaries. Beginning in 2017/18, Unfunded Liability costs are lump sum payments REVENUES BY TYPE •2020-21 2021-22 Water Services Charges 0.0% 15.3% 3.0% 3.0% 3.0% 3.0% Drought Surcharge Volumetric 12.0% -100.0% 2% 2% 2% 2% Base Fee Revenue 28.4% 26.0% 3.7% 3.7% 3.7% 3.7% Drought Surcharge - Base Fee 94.9% -100.0% Cal Poly Sales -4.4% 5.0% 3.0% 3.0% 3.0% 3.0% Recycled Water -2.4% -38.5% 3.0% 3.0% 3.0% 3.0% Development Impact Fees -41.6% -11.1% 0.0% 0.0% 0.0% 0.0% .AB 939 Reimbursement 0.0% 2.1% 2.0% 2.0% 2.0% 2.0% Investment & Property Revenue -83.6% 0.0% 0.0% 0.0% 0.0% 0.0% Miscellaneous 0.6% 98.1% 0.0% 0.0% 0.0% 0.0% EXPENDITURE BY CATEGORY 30.8% 23.5% 3% 3% 3% 3% Salaries & Benefits 26.0% 2.0% 3.2% 1.8% 1.8% 1.8% PERS Normal Cost (including Discount Rate Adjust) 56.3% -63.8% 8.1% 5.0% 13.8% 2.0% PERS Unfunded Liability (including Discount Rate Adjust) 8% 11.4% 14.1% 11.8% 10.2% Operating Expenditures 26.3% -10.5% 1.7% 0.5% 0.9% 0.8% Capital Outlay 217.5% -55.5% 181.2% 85.9% -85.1% 2.0% Debt Service 0.1% 0.0% 34.7% 0.0% 25.8% 1.3% Transfers Out 13.4% 11.8% 5.3% -11.7% 1.9% 1.9% EXPENDITURE BY FUNCTION General Government 12.9% 11.4% 5.1% -12.9% 1.9% 1.9% Water Source of Supply 31.5% -16.2% 1.5% 0.8% 0.8% 1.1% Water Treatment 40.3% -2.7% 170.4% 56.0% -71.0% 1.2% Water Distribution 97.4% -33.3% -44.8% 5.7% 76.5% -9.1% Utilities Services 48.4% -44.5%ol 3.5% 13.8% -6.3% 2.7% Water Administration 117.9% -50.3%1 2.3%1 15.8% -12.2% 66.09/0- • •2020-21 2021-22 Cost Inflators Municipal Code Index' 2.7% 2% 2% 2% 2% 2% Construction Cost Index (U.S. Department of Commerce) 3.9% Consumer Price Index 3.1% Producer Price Index (Wholesale Price Index for Industrial Commodities) 1.3% Salary Increases 2% 2% 2% 2% Water Rate Increases Base Fee $ 9.98 12.33 12.70 13.08 13.47 13.88 Base Fee % 30.8% 23.5% 3% 3% 3% 3% Volumetric 0% 5% 3% 3% 3% 3% Drought Surcharges Base Fee 8% 3% 3% 3% 3% Estimated # of meters 15,000 15,100 15,200 15,300 15,400 15,500 'MCI cost inflator used throughout the 5 -Year Forecast since it is a more realistic depiction of anticipated expenditure growth in the Water Fund.