HomeMy WebLinkAboutSection J - Local Revenue MeasureSection J
Background Materials
LOCAL REVENUE MEASURE
Revenue Enhancement Oversight Commission
Agenda Report Meeting Date: 12/6/18
Item Number: 4
DATE: December 6, 2018
FROM: Greg Hermann, Interim Deputy City Manager
Prepared By: Ryan Betz, Interim Assistant to the City Manager
SUBJECT: 2017-18 LOCAL REVENUE MEASURE UNAUDITED YEAR-END
EXPENDITURES
RECOMMENDATION
Receive a report and review unaudited operating and capital expenditures of local half-percent sales
tax revenue in the last fiscal year.
DISCUSSION
Local Revenue Measure Uses
The Local Revenue Measure Summary Schedule for the Fiscal Year (FY) 2017-18 lists unaudited
expenditures for operating and capital project costs (Attachment 1). Expenditures are broken into the
following categories: 1) Open Space Preservation, 2) Bicycle and Pedestrian Improvements, 3) Traffic
Congestion Relief/Safety Improvements, 4) Public Safety, 5) Neighborhood Street Paving, 6) Code
Enforcement, 7) Flood Protection, 8) Parks and Recreation/Senior Programs and Facilities and 9) Other
Vital Services and Capital Projects
8%
5%
7%
19%
41%
4%
8%
7%
1%
FY 2017 18 Local Revenue Measure Operating Captial Uses 7.2M)
1.Open Space Preservation
2.Bicycles and Pedestrian Improvements
3.Traffic Congestion Relief/Safety
Improvements
4.Public Safety
5.Neighborhood Street Paving
6.Code Enforcement
7.Flood Protection
8.Parks Recreation/Senior Programs and
Facilities
9.Other Vital Services and Capital Projects
Total
CityofSanLuisObispo,Title,Subtitle
Actual operating expenditures for FY 2017-18 were approximately $2.5 M and capital expenditures were
approximately $4.8M totaling approximately $7.3M. Expenditures for the Local Revenue Measure in
the 2017-19 Financial Plan were budgeted to account for approximately 33 percent operating and 67
percent capital costs. In the FY 2017-18, unaudited actuals were 33 percent operating and 67 percent
capital expenditures. All funds budgeted for capital projects are carried forward in the budget until they
are complete. Unexpended funds for operating expenses and completed capital projects go the Local
Revenue Measure fund balance at the end of each fiscal year for future appropriation.
1. Operating Uses ($2.5M)
95 percent of budgeted Local Revenue Measure operating program funds were expended in FY 2017-
18. The 5 percent balance remaining was due to salary variances and hiring gaps for individual positions.
Any unexpended operating funds go the Local Revenue Measure fund balance for future appropriation.
The largest use of local revenue measure funding for operating costs was for Public Safety. Examples
of these costs were salaries for the Downtown Patrol Officers.
2. Capital Uses ($4.8M)
Approximately 43 percent of Local Revenue measure capital project funds were expended in FY 2017-
18. These funds were a combination of what was budgeted in FY 2017-18 and carryover from FY 16-
17. This is due to multi-year nature of capital improvement projects and some savings from projects that
were completed under budget. In addition, project phases don’t always align with fiscal years so while
5%
8%
5%
37%
9%
11%
22%
3%
FY 2017 18 Local Revenue Measure Operating Uses 2.5M)
1.Open Space Preservation
2.Bicycles and Pedestrian
Improvements
3.Traffic Congestion Relief/Safety
Improvements
4.Public Safety
5.Neighborhood Street Paving
6.Code Enforcement
7.Flood Protection
8.Parks Recreation/Senior
Programs and Facilities
CityofSanLuisObispo,Title,Subtitle
encumbrances for the use of funds may be in place they are not reflected as actual expenditures. Project
schedules are subject to variables that cause delays and can sometimes be beyond the City’s control.
Because the budgeted funds for capital projects carry over year to year until the project is complete, a
list of current capital projects, including projects funded from previous fiscal years, has been included
in Attachment 1. This list provides the total expenditure amounts for all Local Revenue Measure
operating and capital projects and aligns with the City’s 2017-18 Comprehensive Annual Financial
Report which is scheduled to be reviewed and approved by the City Council in February, 2019.
Any funding remaining once projects are completed will be transferred into a Local Revenue Measure
Completed Projects account. This funding could be used for other approved Local Revenue Measure
projects that end up costing more than what was budgeted (subject to City Manager approval) or be
reprogrammed to other capital projects that meet Local Revenue Measure priorities subject to Revenue
Enhancement Oversight Commission (REOC) and City Council approval during the budget process.
The largest capital expenditures funded by the Local Revenue Measure in FY 2017-18 were for
Neighborhood Street Paving, specifically for street reconstruction and resurfacing neighborhoods on and
near Madonna Road and Los Osos Valley Road.
3. Net Available for Future Appropriations
As of June 30, 2018, there is no net balance of Local Revenue Measure funding available for future uses.
All existing funds for the Local Revenue Measure have been carried over or are already budgeted for the
current fiscal year.
9%
4%
7%
11%
58%
1%
1%
8%
1%
FY 2017 18 Local Revenue Measure Captial Uses 4.8M)
1.Open Space Preservation
2.Bicycles and Pedestrian
Improvements
3.Traffic Congestion Relief/Safety
Improvements
4.Public Safety
5.Neighborhood Street Paving
6.Code Enforcement
7.Flood Protection
8.Parks Recreation/Senior Programs
and Facilities
9.Other Vital Services and Capital
Projects
CityofSanLuisObispo,Title,Subtitle
4. Master Accounts
Master accounts are an accounting structure the City uses for a limited number of maintenance capital
projects that occur throughout the City and are typically funded on an annual basis. For example, master
accounts are used for capital projects related to road repair, sidewalk and storm drain maintenance.
Because the project scope and funding can range for these types of capital projects, the full funding is
grouped into a master account. This flexibility allows project managers to access the appropriate amount
of budget once the project bids have been submitted. Once the project has been completed, any
remaining project funding is transferred back into the Master account for future projects that fall under
that specific category of Local Revenue Measure projects. Per the City’s Financial Management Manual,
requests for additional funding for a project from a Master Account must be approved by the City
Manager. The current balance of the Local Revenue Measure master accounts have been included in the
FY 2017-18 Funding Summary Schedule (Attachment 1) and could be included in the Annual
Community Report. The master account structure provides efficiencies to deliver a portfolio of similar
types of projects while still providing a high level of oversight by City leadership.
Local Revenue Measure Revenues
Unaudited revenues from the local half-percent sales tax totaled $7.5 M in FY 2017-18. This is a 1.5
percent increase from last fiscal year and in line with the 2017-18 Budget. Staff is continuously working
to refine future revenue forecasts based on current data for both the 2018-19 Mid-Year Budget and the
2019-21 Financial Plan.
FY 2017-18 Budgeted Revenues $7,445,096
FY 2017-18 Year End Unaudited Revenues $7,504,485
Interest on Investments $55,638
Total Revenue $7,560,123
Difference (+/-) +115,027
The increase in revenue received is due to higher than expected sales of goods and services. The
additional revenue will help offset the unaudited Fund Balance of -$87K. Staff will return to the REOC
in the spring, as part of the FY 2017-18 Audit, with a recommended plan to address the budget shortfall
as part of the 2019-21 Financial Plan.
FY 2018-19 revenue from the Local Revenue Measure is forecasted to be $7.6 M. These projections will
change over time and the next update will be presented to the City Council with the 2018-19 Mid-Year
Budget in February 2019.
ATTACHMENT
1. Fiscal Year 2017-18 Local Revenue Measure Funding Summary Schedule