2017-18 City Council March 20, 2018 1 Tonights Objectives - - PowerPoint PPT Presentation

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2017-18 City Council March 20, 2018 1 Tonights Objectives - - PowerPoint PPT Presentation

Mar 18, 2024 262 likes •497 views

Midyear Budget Update 2017-18 City Council March 20, 2018 1 Tonights Objectives Presentation Receive update on General Fund financial projections Review Pension/OPEB funding status Discuss Midyear budget amendment request

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Midyear Budget Update 2017-18

City Council March 20, 2018

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SLIDE 2

Tonight’s Objectives

Presentation

 Receive update on General Fund financial projections  Review Pension/OPEB funding status  Discuss Midyear budget amendment request

Action

 Consider resolution to amend 2017-18 budget

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SLIDE 3

General Fund

Highlights

 Strong revenue growth improves City’s financial position

  • Transfer tax continues to deliver revenue for now
  • Caution: 10% of budget dependent upon real estate sales

 Minimal midyear operating expenditure requests

  • Focused on new programs and equipment replacement

 Changing CalPERS/OPEB assumptions shadow long-term forecast

  • Deficits return in 5-Year projection
  • New CalPERS/OPEB funding policy is reducing risk

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SLIDE 4

General Fund

Revenues

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 2017-18 Midyear adds +$7 million vs. original budget  2017-18 includes $4 Million transfer tax on 3 properties  Total 2017-18 General Fund revenues $99 Million +

$0 $0 $10 $10,000 000,00 ,000 $20, $20,000,00 000,000 $30, $30,000,00 000,000 $40, $40,000,00 000,000 $50, $50,000,00 000,000 $60 $60,000 000,00 ,000 $70, $70,000,00 000,000 $80, $80,000,00 000,000 $90, $90,000,00 000,000 $100 $100,000,0 ,000,000 00 2015 2015-16

  • 16

Act Actual ual 2016 2016-17

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Act Actual ual 2017 2017-18

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Projec rojection tion 2018 2018-19

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Projec rojection tion 2019 2019-20

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Projec rojection tion 2020 2020-21

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Projec rojection tion 2021 2021-22

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Projec rojection tion Prop roper erty ty T Taxes xes Othe ther T Taxes xes Proper roperty ty T Trans ansfer er T Tax ax Inter-f nter-fund und Progra rogram Rev m Reven enues ues

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General Fund Revenues

Property Tax

 2017-18 Assessed Valuation

+5.8% Annual City-wide growth

 Successor Agency revenue exceed requirements

Additional Residual Tax Increment to City

 2017-18 Budget (Property, Residual TI, MVLF)

Original Budget $36,134,000 Budget Increase +1,650,000 Midyear $37,784,000 5

  • 2,000,000,000

4,000,000,000 6,000,000,000 8,000,000,000 10,000,000,000 12,000,000,000 14,000,000,000 2013-14 2014-15 2015-16 2016-17 2017-18

City of Alameda Assessed Property Values

5.9% 6.3% 5.8%

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General Fund Revenues

Sales Tax

Source: HDL

2017-18 Budget $9,650,000 Budget Increase +300,000 2017-18 Midyear $9,950,000

 Prior Year 2016-17 included extra one-time Triple Flip unwind  2017-18 Midyear Projection 1% less than prior year

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Sales Tax Revenue

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 30+% of annual sales tax revenue is concentrated with 5 companies

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General Fund Revenues

Transfer Tax

 Real Estate Sales generate significant tax revenue

  • Highly volatile source for baseline salary/operating costs

 $4 million year-to-date 2017-18 from 3 parcels

  • Unusual and non-reoccurring source

 2017-18 Midyear projection

Original Budget $ 8,750,000 Budget Increase 5,250,000 Midyear $14,000,000 8

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Proposed Midyear Budget Amendment

General Fund Revenues

Property and Related Tax $1,650,000 Transfer Tax 5,250,000 Sales Tax 300,000 Franchise Fees

  • 200,000 *

$7,000,000

* Franchise fee reduction due to updated Solid Waste calculation

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General Fund

Expenditures

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 2017-18 Midyear adds +382,000 operating expenditures (Equipment, Cannabis)  2017-18 Midyear updates budget for Pension/OPEB reserve policy payments  2017-18 General Fund operating expenditures $94 million; with pension reserve $111 million

$0 $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 $90,000,000 $100,000,000 $110,000,000

2015-16 Actual 2016-17 Actual 2017-18 Midyear 2018-19 Budget

Police

  • lice

Fir Fire Public Wor ublic Works ks Rec ecrea eation ion & & P Par arks ks Lib Librar ary Int nter erfun und C d Con

  • ntribu

ibution ions Adm dminis inistrat ation ion Pens ension/ ion/OP OPEB R Res eser erve

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CalPERS Pension Funding Status

June 2016 CalPERS Actuary Report Before New Pension/OPEB Funding Policy

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  • 50,000,000.00

100,000,000.00 150,000,000.00 200,000,000.00 250,000,000.00 300,000,000.00 350,000,000.00 400,000,000.00 450,000,000.00

Safety 2011 Safety 2016 Misc 2011 Misc 2016

Unfunded Accrued Liability Plan Assets

65% 58% 70% 79%

June 2016 Safety Miscellaneous

Total General Fund

Accrued Liability 405,671,933 $ 268,433,783 $

674,105,716 $ 496,939,419 $

Plan Assets 234,841,250 189,131,190

423,972,440 299,145,855

Unfunded 170,830,683 79,302,593

250,133,276 197,793,565

General Fund % of Total

79%

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SLIDE 12

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$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 $5,727,208 $6,154,000 $6,918,000 $7,113,000 $7,344,000 $7,562,000 $7,808,000 $11,349,482 $13,376,000 $14,891,000$16,765,000 $18,383,000 $19,522,000 $20,511,000

CalPERS Payment Schedule Normal Cost and Unfunded Liability General Fund

June 2016 Actuary Report, Prior to New Pension Funding Policy

Normal Cost for Current Employee Services Unfunded Liability for Past Employee Services

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General Fund

Pension/OPEB Funding Policy

Policy

 50% of prior year Available Fund Balance in excess of 25% of Operating

Expenditures committed to Pension/OPEB Reserve

 Contribute surplus from closed pension plans 1079/1082 as plans wind down

2017-18 Budget/June 2017 Reserve Disbursement

OriginalOriginal Budget Projection $11,143,000 Midyear increase per policy 5,217,068 Total June 2017 Pension/OPEB Reserves 16,380,068

2017-18 Operating Projections

June 2018 Estimated Pension Reserve $6.8 million Estimate will be updated after 2017-18 audit for 2018-19 Implementation 13

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General Fund Annual CalPERS Payments

Unfunded Liability For Past Service Cost

June 2016 Actuary Report

 Without action,

payments double in 5 years

 Proactive funding

policy is providing 18-19 budget relief

 $1 million+ annual

CalPERS savings

 $25 million:

15 Year savings from combined 17-18 $16 million CalPERS and 115 Trust investment

$10,000,000 $12,500,000 $15,000,000 $17,500,000 $20,000,000 $22,500,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 Total UAL Costs (General Fund) PERS Costs after $6.3M Pay Down (Dec 2017) PERS Costs after $4.4M Pay Down (March 2018) Total Costs Assuming $2M Pay Down Every Year

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Proposed Midyear Budget Amendment

General Fund Expenditures

Community Development $203,000

Cannabis, Council referrals, North Housing MOU

EOC Building Operations 75,000 Fire Equipment - rescue, communications 80,000 Parks – light Pole covers/theft prevention 24,000 358,000 Pension/OPEB Reserve Contribution 5,217,068 $5,599,068

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General Fund

2017-18 Midyear Projection

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Original Previous Midyear Midyear Budget Adjustments Adjustments Proposal Revenues 92,026,000 $

  • $

7,000,000 $ 99,026,000 $ Expenditures Operations 92,206,000 2,083,869 382,000 94,671,869 Prior Year Pension/OPEB Reserve 11,143,000 5,217,068 16,360,068 103,349,000 2,083,869 5,599,068 111,031,937 Net Annual Activity Operations (180,000) (2,083,869) 6,618,000 4,354,131 With Pension/OPEB Reserve (11,323,000) (2,083,869) 1,400,932 (12,005,937)

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General Fund

Net Annual Activity

 2017-18 includes one-time transfer tax revenue and Pension/OPEB contributions  On-going revenue/expenditure gap closes for 2017-18 and 2018-19

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$70,000,000 $80,000,000 $90,000,000 $100,000,000 $110,000,000 $120,000,000 2015-16 Actual 2016-17 Actual 2017-18 Midyear 2018-19 Projection Revenues Revenues with Full Transfer Tax Expenditures Expenditures with Pension/OPEB Reserve

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General Fund

5-Year Forecast

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 Revenue projections have been updated with Midyear trends  Expenditures same as presented in 2017-2018 budget

$70,000,000 $80,000,000 $90,000,000 $100,000,000 $110,000,000 2015-16 Actual 2016-17 Actual 2017-18 Midyear 2018-19 Projection 2019-20 Projection 2020-21 Projection 2021-22 Projection Revenues Revenues with Full Transfer Tax Expenditures Expenditures with Pension/OPEB Reserve

$8 Million Annual Gap

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Proposed Midyear Budget Amendment

Other Funds/Programs

Base Reuse Lease Revenues $548,000 Alameda Point Expenditures $312,000

Solar Street Lights, Building Demolition, Fire Inspections, Natural Gas billing correction

Library System Electricity/Billing Correction $ 18,000

HVAC Capital Outlay

$ 25,000

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Proposed Midyear Budget Amendment

Other Funds/Programs

FISC Lease Revenue Catellus DDA Reimbursements $615,000 Capital Project Expenditures $800,000

Construction of service road to access Estuary Park from Mitchell Avenue

Recreation Capital Projects $83,149

Re-allocate unused project appropriation from Encinal Boat Ramp to Estuary Park projects 20

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Proposed Midyear Budget Amendment

Internal Service Funds

Equipment Replacement

Fire Truck Engine Emergency Rebuild $100,000

Unemployment Insurance

Claims payments $70,000 Follows two low claim years; consistent with prior trend

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Proposed Midyear Budget Amendment

Capital Program Funding Swap

 CIP Project Funding Source reclass between funds  To Prioritize Draw on Measure B/BB  No Net Change in CIP Project Totals

Funds: Old Measure B, Measure B/BB, Gas Tax Projects: Cross Alameda Trail, Otis Drive Traffic Calming Signs, Curbs, and Painting, Mecartney and Island Intersection, Sidewalk Repairs 22

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Wrap Up

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Questions? Requested City Council Action

Consider Resolution to Amend 2017-18 Budget