[PDF] - Ge ne ra l F und a nd Me a sure Z F Y 2018- 2020 T wo- Ye a r PDF Document

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City Co unc il Ja nua ry 16, 2018

Ge ne ra l F und a nd Me a sure Z

F Y 2018- 2020 T wo- Ye a r Budg e t a nd F Y 2018- 2023 F ive - Ye a r Pla n

F ina nc e De pa rtme nt

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BACKGROUND

1. De c e mb e r 2015 – City Co unc il a ppro ve d the mo ve to

a two -ye a r b udg e t in the c o nte xt o f a five -ye a r pla n.

2. Se pte mb e r 2017 – sta ff b e g a n pla nning fo r the F

Y 2018- 2020 T wo -Ye a r Budg e t a nd F Y 2018-2023 F ive -Ye a r Pla n.

3. June 2018 – a do ptio n o f the Citywide F

Y 2018-2020 T wo -Ye a r Budg e t a nd Ge ne ra l F und F Y 2018-2023 F ive - Ye a r Pla n a re a ntic ipa te d.

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F

c us o n de ta ile d

b udg e t de ve lo pme nt fo r two -ye a rs with five - ye a r fina nc ial fo re c a sts. Inc o rpo ra te Rive rside 2.1. Mid-Cyc le re vie w to inc o rpo rate upda te s to Rive rside 2.1 a nd re fine me nts to F ive -Ye a r F ina nc ial Pla n.

F Y 2018- 2023 F IVE

YE

AR F INANCIAL PL AN with ke y c halle ng e s and so lutio ns ide ntifie d and linke d to Rive rside 2.1 S trate g ic Plan and F ive -Ye ar Capital I mpro ve me nt Plan

F Y 2018- 2020 T wo- Ye a r Budg e t YE AR 1 F Y 18- 19 T wo- Ye a r Budg e t YE AR 2 F Y 19- 20 T wo- Ye a r Budg e t YE AR 3 F Y 20- 21 T wo- Ye a r Budg e t YE AR 4 F Y 21- 22 T wo- Ye a r Budg e t YE AR 5 F Y 22- 23 T wo- Ye a r Budg e t

Upd a te d Annua lly

F

ina nc ia l de c isio ns a re ma de in the c o nte xt o f the F ive -Ye a r F ina nc ia l Pla n.

Co mpre he nsive ve tting

b y Budg e t E ng a g e me nt Co mmissio n, a pplic a b le c itywide Bo a rd a nd Co mmissio ns, City Co unc il a nd the Rive rside Co mmunity.

Qua rte rly re ve nue ,

e xpe nditure , de b t a nd inve stme nt re vie ws a re c o nduc te d.

PL ANNING PROCE SS

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Promise s Ma de , Promise s Ke pt

With the ado ptio n o f the F ive -Ye ar Me asure Z Spe nding Plan in May 2016, the City made financ ial and

pe ratio nal pro mise s to the

Rive rside c o mmunity. Staff is c o mmitte d to b uilding o n the financ ial suc c e sse s o f F Y 2016-2018 b y pre se rving se rvic e s and finding additio nal e ffic ie nc ie s to e nsure the City’ s c o ntinue d financ ial suc c e ss and ac hie ve me nt o f its Rive rside 2.1 strate g ic initiative s. F Y 2018- 2020 KE Y BUDGE T ARY T HE ME S

F ina nc ia l Ac c ura c y F ina nc ia l Re sponsibility & Disc ipline Ma inta ining E sse ntia l Se rvic e s a nd Infra struc ture E xe c utive manag e me nt se e s a c o mpre he nsive data c o lle c tio n and analyzatio n e ffo rt to ac hie ve ac c urate financ ial targ e ts and pro je c tio ns as a c o re te ne t, e sse ntial fo r the City’ s future fisc al fo undatio n. F inanc ial re spo nsib ility re q uire s ac kno wle dg ing and fully disc lo sing the City’ s c ritic al funding re q uire me nts, inc luding unfunde d ne e ds. F isc al disc ipline de mands City De partme nts o pe rate within the ir b udg e t. Manag e me nt ac tio n c alls fo r time ly re c o mme ndatio n to City Co unc il to addre ss any financ ial issue s c o nfro nting the City. I n c o nc e rt with the Re spo nsib le S pe nding Visio n Ple dg e (Oc t. 2016), the City will find ways to addre ss the c halle ng e s in funding its e xisting pro g rams and se rvic e s, and ide ntifying re ve nue s fo r the c ritic al ne e ds that have b e e n unfunde d fo r ye ars, inc luding re pair, mainte nanc e and re plac e me nt o f

ur b uilding s, ro ads

and side walks, stre e tlig hts, and fle e t inc luding first re spo nde r ve hic le s. T hro ug h c re atio n o f the Budg e t E ng ag e me nt Co mmissio n (BE C), the City c o mmitte d to a pub lic ve tting o f its financ e s. T he two -ye ar b udg e t pro c e ss inc lude s many

ppo rtunitie s fo r the

Rive rside c o mmunity to c o ntrib ute , inc luding City Co unc il, BE C, and ward-spe c ific me e ting s. Additio nally, re ade r-frie ndly b udg e t pub lic atio ns will b e made availab le . T ra nspa re nt & Pa rtic ipa tory Proc e ss

F Y 2018- 2020 BUDGE T T HE ME S

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ST RONG F OUNDAT ION

Ge ne ra l o b lig a tio n

b o nd ra ting inc re a se d fro m A+ to AA– b y S&P

F

Y 2017-2018 pro je c te d Ge ne ra l F und re se rve o f mo re tha n 20%

Me a sure Z
F

Y 2016-2018 b udg e t re duc tio ns

Budg e t E

ng a g e me nt Co mmissio n

T

wo -ye a r b udg e t a nd five -ye a r pla n

ST RONG F INANCIAL F OUNDAT ION

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F

latte ning o f Re ve nue s

Annua lize d g ro wth ra te in c o re re ve nue so urc e s c o ntinuing to slo w ; 1.5% -

2% a s c o mpa re d to 7% fro m F Y 2013-14 to F Y 2014-15

Me asure ZCo ntrib utio n
I

n F Y 2017-18, $20.5M to Ge ne ra l F

und. Sta ff a ntic ipa te s c o ntrib utio ns o f

$13.2M in F Y 2018-19 a nd $18.3M in F Y 2019-20

Pe rso nne l Co sts
Mo re tha n 80% o f to ta l e xpe nditure s, c o nsiste nt with o the r full-se rvic e c itie s
I

nc re a sing Ca lPE RS c o sts

Manag e d Saving s
I

mple me nting pe rma ne nt re duc tio ns will e limina te the ma jo rity o f pro je c te d sho rtfa lls in the F Y 2018-2020 T wo -Ye a r Budg e t

Ge ne ral F

und Sub sidie s

Stre e t L

ig hting Asse ssme nt Distric t, c ro ssing g ua rd c o ntra c t, a nd o the rs

BOT T OM L INE

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BASE L INE ASSUMPT IONS - RE VE NUE S

Sale s T

ax

Slo wing ; 2% F

Y 2018-19, 1.5% F Y 2019-20

Pro pe rty T

ax

Gro wing ; 3.7% pe r ye a r

pro je c te d fo r F Y 2018-20

Utility Use r T

ax

F

la t sinc e F Y 2012-13

Ge ne ral F

und T ransfe r

Me a sure Z
E

le c tric & wa te r

Othe r Re ve nue s
Mo stly fla t

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“T he drastic e c o no mic and te c hno lo g ic al c hang e s

c c urring in the mo st re c e nt re c o ve ry pe rio d, as we ll o ve r

the past 30 ye ars, po int to the impe rative to re -e xamine the fie ld’ s c o nve ntio nal thinking ab o ut the ability of city finance s to buffe r against e conomic downtur ns and to captur e r e ve nue gr

wth during pe rio ds o f e c o no mic

e xpansio n.”

Natio nal L

e ag ue o f Citie s 2017 “City F isc al Co nditio ns”

HOW DOE S RIVE RSIDE COMPARE ?

Rive rside re ve nue

re c o ve ry a t just 97.3% o f pre -re c e ssio n le ve ls, in line with o the r c itie s

Co ntinue d e c o no mic

unc e rta inty

Slo wing re ve nue s in

po st-re c e ssio n pe rio d

Natio nal L

e ag ue o f Citie s 2017 “City F isc al Co nditio ns”

97.3 Riverside

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BASE L INE ASSUMPT IONS - E XPE NDIT URE S

Pe rso nne l
Pa rtne rship Co mpe nsa tio n

Mo de l

Ca lPE

RS

No n-Pe rso nne l
I

nc re a se s b a se d o n histo ric a l CPI

De b t Se rvic e
F

Y 2016-17 BAN re fina nc ing re duc e d Ge ne ra l F und de b t

Cha rg e s a nd T

ra nsfe rs

Ne w Co st Allo c a tio n Pla n
Sub sidie s

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7% a nnua l inc re a se in

Pe rso nne l c o sts pe r ye a r F isc a l Ye a rs 2018-2023

Ca lPE

RS la rg e st c o st drive r, o utpa c ing sa la rie s

Pa rtne rship

Co mpe nsa tio n Mo de l tie s pa y ra ise s fo r mo st re pre se nte d e mplo ye e s to c o re re ve nue so urc e s

PE RSONNE L COST S

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PE RSONNE L COST S

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L
we r tha n prio r ye a rs
Co st sa ving s e ffo rts
Sta ff re c o mme nds

pe rma ne nt imple me nta tio n

f c o sts re duc tio ns a c hie ve d

in prio r ye a rs thro ug h “ma na g e d sa ving s”

I

nc re a se fro m F Y 2017-18 la rg e ly due to c o ntrib utio ns to Se lf-I nsura nc e F und

Disc re tio na ry vs. no n-

disc re tio na ry

Re vie w e xisting c o ntra c ts

NON- PE RSONNE L COST S

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Spe c ial Pro je c ts
3% - appro ximate ly $8 millio n pe r ye ar
Mino r Capital
<1% - appro ximate ly $2 millio n pe r ye ar
E

q uipme nt

<1% - $400,000 pe r ye ar
De b t
$24.4 millio n in F

Y 2018-19

$23.2 millio n in F

Y 2019-20

OT HE R E XPE NDIT URE S

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T ra nsfe rs

Spe c ia l Distric ts
Stre e t L

ig hting Asse ssme nt Distric t

E

nte rta inme nt F unds

Co nve ntio n Ce nte r, Munic ipa l

Audito rium, F

x, e tc .
Ha ve tra ditio na lly re q uire d

Ge ne ra l F und sub sidie s whe n re ve nue s fa ll sho rt o f o pe ra ting e xpe nditure s

CHARGE S AND T RANSF E RS

Cha rg e s T

/ F

rom

Co st Allo c a tio n Pla n (CAP)

re va mpe d

Co mpre he nsive re vie w a nd upda te
f a llo c a tio n b a se s
Ge ne ra l F

und re struc turing

So me dire c t c ha rg e s mo ve d to

CAP

Cha ng e to Ge ne ra l F

und

F

Y 2018-19 $7 millio n a dditio na l a llo c a tio ns to o the rs

F

Y 2019-20 $462K a dditio na l a llo c a tio ns to o the rs (in line with c o st inc re a se s)

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Co ntra c tua l Ag re e me nts

– Cro ssing g ua rds fo r sc ho o l distric ts – RCC Po o l Ma inte na nc e

E

c o no mic De ve lo pme nt – De ve lo pe r Ag re e me nts

Cha rte r Re q uire me nt

– Co mmissio n suppo rt

Spe c ia l Asse ssme nt Distric ts

– Busine ss I mpro ve me nt, L a ndsc a pe

Co mmunity Suppo rt

– Art Org a niza tio ns – Ja ne t Go e kse Ce nte r

Spe c ia l E

ve nts – F

e stiva l o f L ig hts

GE NE RAL F UND SUBSIDIE S

Misc e lla ne ous $3,041,957 De ve lope r Ag re e me nts $1,132,000 Busine ss Improve me nt Distric ts $300,000 L a ndsc a pe Ma inte na nc e Distric ts $1,080,000

Ge ne ra l F und subsidie s tota l more tha n $5 million a nnua lly Rive rside CA.g ov

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Se pte mb e r 6, 2016 a do ptio n o f

Ge ne ra l F und Re se rve Po lic y

15% minimum re se rve le ve l
20% a spira tio na l g o a l
Sta ff re c omme nds ba la nc e d F

Y 2018- 20 T wo- Ye a r Budg e t, de sig ne d to ma inta in the a spira tiona l 20% re se rve g oa l for both F Y 2018- 19 a nd 2019- 20.

I

f we do no thing

F

Y 2018-19 & 2019-20 will ma inta in re se rve le ve ls a b o ve the po lic y re q uire me nt o f 15%

Re se rve s will b e de ple te d in F

Y 2022-23

GE NE RAL F UND RE SE RVE

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ME ASURE Z BASE L INE

Ma y 16, 2017 - City Co unc il a ppro va l o f F

ive -Ye a r Spe nding Pla n

E

stima te d Re ve nue s o f $51.5 millio n

E

stima te d E xpe nditure s o f $47.2 millio n

Upda te d Pla n inc o rpo ra te s Co unc il Ac tio n ta ke n sinc e initia l a do ptio n
Re ve nue pro je c tio n re ma ins unc ha ng e d
F

unding fo r e xisting Spe nding I te ms e xte nde d thro ug h F Y 2022-23, pe nding input fro m the Budg e t E ng a g e me nt Co mmissio n a nd Co unc il dire c tio n thro ug ho ut the b udg e t pre pa ra tio n pe rio d.

– Sta ffing le ve ls re ma in unc ha ng e d – Pe rso nne l inc re a se s (Pa rtne rship Co mpe nsa tio n Mo de l, Ca lPE RS) a re inc lude d

Pro je c te d re se rve s o f $14.3M F

Y 2018-19 a nd 11.2M F Y 2019-20

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ME ASURE Z BASE L INE

F

ina nc ia l Disc ipline

No Me a sure Z suppo rt re q ue ste d fo r Ge ne ra l F

und re se rve s

Sta ff re c o mme nds inc luding a $1 millio n

Co nting e nc y fo r e a c h o f F Y 2018-19 a nd F Y 2019-20

Pub lic Sa fe ty
De b t se rvic e upda te d to a c tua l
Critic a l Ope ra ting Ne e ds
F

unding GAP pe r Ge ne ra l F und F ive -Ye a r F ina nc ia l Pla n

F

a c ility Ca pita l Ne e ds

Inc o rpo ra te d Co unc il a c tio n re la te d

to Ne w Ma in L ib ra ry, Po lic e He a dq ua rte rs, a nd Muse um Re furb ishme nt pro je c ts

Qua lity o f L

ife – no c ha ng e

T

e c hno lo g y

E

xte nde d thro ug h F Y 2022-23

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Ja nua ry: Ba se line b udg e t pro je c tio ns pre se nte d to City Co unc il

a nd the Budg e t E ng a g e me nt Co mmissio n

F

e brua ry: Co mmunity Budg e t Wo rksho ps

Ma rc h: F

ive -Ye a r Pla ns fo r E le c tric , Wa te r & Se we r pre se nte d to City Co unc il a nd the Budg e t E ng a g e me nt Co mmissio n

Ma y: Pro po se d F

Y 2016-2018 Bie nnia l Budg e t pre se nte d to City Co unc il in Ma y

June : F

ina l b udg e t, sub mitte d fo r City Co unc il a do ptio n

BUDGE T T IME L INE

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T ha t the City Co unc il re c e ive a nd pro vide input o n the b a se line F Y 2018-2020 T wo -Ye a r Budg e t, b a se line F Y 2018-2023 F ive -Ye a r Pla n fo r the Ge ne ra l F und a nd Me a sure Z, a nd Budg e t De ve lo pme nt Sc he dule .