BUDGET OVERVIEW FISCAL YEAR 2018-19 JUNE 19, 2018 BUDGET GOALS - - PowerPoint PPT Presentation

BUDGET OVERVIEW FISCAL YEAR 2018-19

JUNE 19, 2018

BUDGET GOALS

• Maintain core services:
• Police and fire protection
• Keeping public areas safe, clean and well-lit
• Repairing streets and roads
• Prepare for the City’s long-term financial

viability

• Exploring options on revenue enhancement and

expense reduction, including securing additional funding from the State or other agencies

• Be transparent and accountable with how

taxpayer dollars are spent

FY17-18 GENERAL FUND ESTIMATES

Beginning Fund Balance

8,166,100 $ Revenue & Sources 62,699,600 $ Expenses & Uses 59,857,100 Revenue over Expenses 2,842,500 $ Transfer to Equipment Replacement Fund (1,400,000) Transfer to Capital Improvement Fund (1,400,000) Subtotal Operating Balance 42,500

Ending Fund Balance

8,208,600 $

FY17-18 GENERAL FUND REVENUE

Property Taxes 8.2% Sales Taxes 1.8% UUT 1.8% VLF 6.9% License & Permits -22.6% TOT - 7.2% Charges for Services - 0.5% Franchises - 2.5% Recreation 7.4%

• 25.0%
• 20.0%
• 15.0%
• 10.0%
• 5.0%

2 4 6 8 10 12 14 16

Millions

FY16-17 Actual FY 17-18 Estimates

FY17-18 GENERAL FUND EXPENSES

• 1.4%
• 4.6%
• 2.5%
• 5%
• 5%
• 4%
• 4%
• 3%
• 3%
• 2%
• 2%
• 1%
• 1%

5 10 15 20 25 30 35 40 45

Personnel O&M Excluding Equipment Supplies

Millions

FY 17-18 Budget FY 17-18 Estimates

FY18-19 GENERAL FUND PROPOSED BUDGET

Beginning Fund Balance 8,208,600 $

Revenue & Sources 64,389,800 $ Expenses & Uses 63,288,600 Revenue over Expenses 1,101,200 $ Transfer to Equipment Replacement Fund (1,800,000) Transfer to Capital Improvement Fund (2,400,000) (3,098,800)

Ending Fund Balance 5,109,800 $

Subtotal Operating Balance

GENERAL FUND REVENUE BUDGET $64,389,800

Property Taxes 4.5% Sales Taxes 2.5% UUT 1.5%VLF 4.0% License & Permits 13.4% TOT -3.0% Charges for Services -1.3% Franchises 1.0% Recreation 9.6%

• 10.0%

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0

Millions

FY 17-18 Estimates FY 18-19 Budget

REVENUE AFFECTED BY PROPERTY VALUE

2 4 6 8 10 12 14 16 18 5 10 15 20 25

FY08-09FY09-10FY10-11 FY 11- 12 FY 12- 13 FY 13- 14 FY 14- 15 FY 15- 16 FY 16- 17 FY 17- 18 FY 18- 19

Billions Millions

Assessed Value VLF Property Taxes

REVENUE AFFECTED BY ECONOMY

45,000 46,000 47,000 48,000 49,000 50,000 51,000 52,000 53,000 54,000 55,000

2 4 6 8 10 12 14 16

FY08-09 FY09-10 FY10-11FY 11-12FY 12-13FY 13-14FY 14-15FY 15-16FY 16-17FY 17-18FY 18-19

Millions

GDP Per Capita TOT Sales Taxes

LICENSE AND PERMITS

• 1

2 3 4 5 6 7

FY08-09 FY09-10 FY10-11 FY 11-12FY 12-13FY 13-14FY 14-15FY 15-16FY 16-17FY 17-18FY 18-19

Millions

UTILITY USER TAXES

4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5

FY08-09 FY09-10 FY10-11 FY 11-12FY 12-13FY 13-14FY 14-15FY 15-16FY 16-17FY 17-18FY 18-19

Millions

GENERAL FUND EXPENSE BUDGET $62,386,800

General Government $4,051,500 7% Administrative Services $3,298,700 5% Police $22,651,600 36% Fire $15,863,000 26% Public Works Services $4,162,400 7% Development Services $5,032,400 8% Recreation & Community Services $3,358,700 5% Library & Museum Services $3,968,500 6%

GENERAL FUND EXPENSE BUDGET

4.7% 4.7% 0.3%

5 10 15 20 25 30 35 40 45 50

Personnel O&M Excluding Equipment Supplies

Millions

FY 17-18 Budget FY 18-19 Budget

NEW PROGRAMS

Revenue Additional Costs Annual FY18-19

Police Police Special Enforcement Team (SET) 70,100 64,100 Accurint Crime Analysis 13,800 13,800 Interagency Communications Interoperability System 65,000 65,000 Fire Upgrade one (1) Firefighter Position to a Firefighter/Paramedic 11,100 11,100 Development EnerGov ‐ Phase 2 for Mobil Devices and iG Workforce Apps 48,800 6,900 Contract Inspector for the Le Meridien Hotel Project 100,000 Recreation Elementary Summer Playgrounds 10,600 Saturday Adult Basketball League 9,100 8,900 8,900 City Manager Government Transparency upgrade 40,000 5,000 Administrative Services NeoGOV ‐ HR Recruitment Process 11,000 4,000

$19,700 $368,700 $178,800

PROPOSED NEW PROGRAMS

Ongoing Annual Costs

Total General Fund

RESTORING SERVICES: $2,088,500

Police Sergeant Police FY 2011 $176,600 Maintenance Contract Officer Public Works FY 2010 $107,000 5 Police Officers Police FY 2008 $751,800 Management Analyst

• Admin. Svs.

FY 2008 $106,400 Library Technician Library FY 2007 $66,000 Administrative Captain (Former Div. Chief) Fire FY 2005 $244,000 3 Firefighters Fire FY 1998 $636,700

FUTURE BUDGET CHALLENGES

ESCALATING PERS COSTS

0% 10% 20% 30% 40% 50% 60% 70% 80% 2 4 6 8 10 12 14 16

2013-14 2015-16 2017-18 2019-20 2021-22 2023-24

Millions

Misc $ Safety $ Misc % Safety %

PERS FUNDING STATUS

30‐Jun‐15 30‐Jun‐16 Miscellaneous Plan Accrued Liablilty (Projected) 133,929,705 139,784,811 Market Value of Assets 94,952,165 93,110,320 Unfunded Accrued Liability 38,977,540 46,674,491 Funded Ratio 70.9% 66.6% Safety Plan Accrued Liablilty (Projected) 223,960,685 234,127,732 Market Value of Assets 142,070,931 138,550,802 Unfunded Accrued Liability 81,889,754 95,576,930 Funded Ratio 63.4% 59.2%

PERS FUNDING STATUS

50% 60% 70% 80% 90% 100% 110%

Safety Misc PERF AVERAGE

UNFUNDED OPEB ACCRUED LIABILITY

OPEB LIABILITY Total OPEB Liability, valuation as of 6/30/17 19,707,399 $ Market Value of Assets in the Trust, 5/1/18 3,022,474 $ Unfunded Accrued Liability 16,684,925 $ Funded Ratio 15.3% Included in the FY2018‐19 Budget Retiree Medical Costs 812,700 $ OPEB Trust Contribution 911,600 $ TOTAL 1,724,300 $

POST EMPLOYMENT HEALTH CARE BENEFITS (OPEB)

• Have taken steps to:

I. Contribute to an OPEB Trust and built this cost into the annual Operating Budget

• FY2015-16

$1,351,650

• FY2016-17

$ 650,800

• FY2017-18

$ 650,800

• FY2018-19

$ 911,600

• II. Deposits & investment earnings will reduce the

unfunded liability and eventually reach 100% funding level.

5-YEAR FINANCIAL FORECAST BASELINE SCENARIO – 2% INCREASE

50 55 60 65 70 75 80

FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23

Millions

Revenue & Sources Expenditures & Transfers

5-YEAR FINANCIAL FORECAST W/ADDITIONAL SALES TAX

50 55 60 65 70 75 80 85 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23

Millions

Revenue & Sources Expenditures & Transfers

OPERATING RESERVES $23,166,100

General Fund $7,809,800 Self- Insurance Fund $3,509,000 Emergency Reserve $10,147,000 PERS Fund Reserve $1,351,600 Medical/ Dental Fund $348,700

ESTIMATED AS OF JUNE 30, 2019

OPERATING RESERVES

$21 $24 $24 $25 $22 $23 $23 $23

• 5

• 5

10 15 20 25 30

FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19

Millions

General Fund Self-Insurance Fund Emergency Reserve PERS Fund Reserve Medical/Dental Fund Total

CAPITAL RESERVES

$9 $7 $13 $16 $22 $22 $13 $12

• 5

• 5

10 15 20 25

Millions

CIP Equipment CityHall Reserve

FY18-19 GENERAL FUND BUDGET

Beginning Fund Balance 8,208,600 $

Revenue & Sources 64,389,800 $ Expenses & Uses 63,288,600 Revenue over Expenses 1,101,200 $ Transfer to Equipment Replacement Fund (1,800,000) Transfer to Capital Improvement Fund (2,400,000) (3,098,800)

Ending Fund Balance 5,109,800 $

Subtotal Operating Balance

CAPITAL IMPROVEMENT AND EQUIPMENT REPLACEMENT BUDGET

CAPITAL IMPROVEMENT PROJECTS

Street Maintenance $4,502,800 31% Traffic Signal Improvement $175,000 1% Park Improvement $1,799,100 13% Facility Improvement $1,747,000 12% Water Related Improvement $3,458,000 24% Sewer Related Improvement $1,140,000 8% Greenscape Improvement $1,571,000 11%

TOTAL $14,392,900

CAPITAL IMPROVEMENT BUDGET

Capital Improvement Fund $4,092,100 29% Prop C Local Return $900,000 6% Sewer Fund $1,203,900 8% Water Fund $4,036,500 28%

Transportation Impact Fees $250,000 2%

Measure M $1,175,000 8% Park Fund $1,158,800 8% RMRA $952,800 7% Grants $568,800 4% Others $55,000 0%

FUNDING SOURCES

EQUIPMENT REPLACEMENT PROJECTS

Office Machines & Furniture $163,700 5% Computers & Software $125,100 4% Field & Plant Equipment $520,000 17% Vehicles & Major Parts $1,853,900 61%

Communication

Equipment $398,600 13%

TOTAL $3,061,300

EQUIPMENT REPLACEMENT BUDGET

EQUIPMENT REPLACEMENT BUDGET

COSTS FUNDING

Police 3 B/W Ford SUV PPV 4 Used Vehicles for Detectives 2 SUV for Administrative staff Street 1 CNG Water Tanker Truck 300,000 ER/AQMD/Sewer /Water/Grant Fire 1 Chevrolet Tahoe 50,000 ER Transit 8 Arcadia Transit Cutaways 640,000 FTA Grant/Prop A Water 1 CNG Excavator 545,900 Water/AQMD Police Radio Replacement 117,000 $ ER Police FARO Laser Scanner ‐ 3D Diagramming 91,800 ER Public Works Equipment including a Stump Grinder 144,000 ER/Water/Sewer Fire Cardiac Monitor Replacement Program 100,000 ER Fire Radio and Mobil Computer Replacement 180,000 ER Microsoft Operating System and Software Licensing 92,000 ER/Water

Vehicle Replacement Other Major Projects

318,000 $ ER

FY18-19 GENERAL FUND PROPOSED BUDGET

Beginning Fund Balance 8,208,600 $

Revenue & Sources 64,389,800 $ Expenses & Uses 63,288,600 Revenue over Expenses 1,101,200 $ Transfer to Equipment Replacement Fund (1,800,000) Transfer to Capital Improvement Fund (2,400,000) (3,098,800)

Ending Fund Balance 5,109,800 $

Subtotal Operating Balance

FY 2018-19 BUDGET SUMMARY

• Budget Shows $3.1 million shortfall
• Was Anticipated Due To PERS Increases
• Maintains full transfers to Capital/Equipment Funds
• Meets Council’s Goals to set aside funds for future facility needs

and mitigate long-term liabilities

• Sufficient Reserves to cover deficit in short term
• Use current year to fully assess alternatives
• Service delivery models
• Potential service reductions
• Revenue enhancements

RECOMMENDATIONS

• Approve Resolution No. 7224 – adopting the Fiscal Year 2018-19

and appropriating the amounts specified therein as expenditures from the Funds

• Approve Resolution No. 7225 – adopting a Capital Improvement

and Equipment Plan for the Fiscal Year 2018-19 through 2022-23

• Appoint Members to Citizen’s Financial Advisory Committee

and begin full assessment of alternatives and community priorities