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CC 2016-02-23_12b Mid Year Presentation 15-16MID-YEAR BUDGET REPORT FISCAL YEAR 2015-2016 February 23, 2016 Good evening, Mr. Mayor, members of the City Council I am Debbie Malicoat, your Director of Administrative Services I’m here tonight to present the Mid-Year Budget Report 1 Purpose Review revenues and expenditures during the first six months of the fiscal year to determine appropriate adjustments Highlight any major changes that have occurred since budget adoption Update the budget with audited results of prior fiscal year Typically General Fund focused – not this year The purpose of the Mid Year Budget report is to take a look at how revenues and expenditures are performing during the first half of the fiscal year and make any adjustments that might be necessary. It also provides an opportunity for staff to highlight any major changes that have occurred since the budget was adopted While we look at every fund and operation of the City, the Mid Year Budget Report is usually primarily focused on the General Fund, but this year there are challenges in other funds that need to be called to your attention as well. 2 Key Points Mixed results and financial challenges, particularly Gas Tax, Water, Sewer General Fund balance is strong and is projected to be 35.5% of appropriations at year-end A few budget adjustments are recommended at this time Long term challenges remain 3 Water and Sewer Revenues Consumption is much lower than originally anticipated. The Governor’s Emergency Order happened after the budget was developed, so modest reductions were projected, not the 28% mandate – much less the way the community has exceeded the mandate. There is an inverse relationship between price and consumption. Since most of the costs are fixed and must be covered by users, not general taxes, when consumption goes down, price has to go up in order to generate the necessary revenue. No recommendations for rate adjustments at this time, but it is likely that when we come to the Council in April, we will have the data we need to make rate recommendations. 4 Gas Tax Revenues Complicated formula for allocation, but it is always looking back in time Trends show a decline in consumption and price Projections $75,000 short in FY 2015-16 and $190,000 short in FY 2016-17 Possible offsets in Governor’s May Revise but wait and see 5 Top 10 Revenue Performance Taking a quick look at the General Fund’s top 10 revenues, we see that overall, with half the year behind us, we are only at 38% of our revenue target. This is consistent with previous years and reflects the fact that not all revenues are received in equal increments and there are timing issue related to when we receive the revenue. For example, the Sales tax and franchise fee numbers reflect only 4 months of collections. The TOT revenue reflects just 5 months. And the first half of our Triple Flip money isn’t received until January. 6 Expenditures by Department As far as expenditures are concerned, again, not everything is paid in equal increments throughout the year, but as you can see on the slide, for the most part, department budgets are less than 50% expended. The Non-Departmental budget contains the City’s liability insurance premium- full annual amount. 7 Mid-Year Expenditure Requests There are a few adjustments to expenditures that are requested by the departments. These are detailed in the Report on pages 8 through 10 and summarized on the screen. 8 Revenue Adjustments Offsetting the increases to appropriations are several increases to revenues. Most significant are the increases to property tax and TOT. In addition, a number of other revenues are performing better than original estimates , which results in increased revenue projections in the General Fund of just over $362,000. The Local Sales tax fund is also anticipated to bring in about 63,000 more and Gas Tax estimates released from the State show that this revenue source will do better than projected. 9 10 Recommendation Approve detailed budget adjustments listed in the Mid-Year Budget Report Approve Schedule A Approve requests for additional appropriations Adopt a Resolution establishing or amending job descriptions/classifications Tonight, the recommendation before the Council is to: 11 Questions With that, I’m happy to answer any questions you might have. Thank you. 12