CC 2018-01-23_12a PP 10 Year Fiscal Forecast
General Fund 10-Year Fiscal Forecast
2/8/2018
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Tonight’s Objectives
Present a forecast model that is a “reasonable possibility” for the next 10 years.
Receive comments if anything needs to be added or removed from the model.
Inform the public of our budget and process.
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Overview of Presentation
1. Context
2. The Model
3. The Forecast
4. Discussion and validation of forecast
5. Review next budget steps
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Shared Ownership
Property is spread around 5.25 square miles
67 miles of roads
88 miles of sidewalks
5 Bridges
48 acres of parks
169 acres of open space
Computers, desks, cars, heavy equipment
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More Property
93 miles of water mains
6 water tanks ranging from 250,000 to 2 million gallons
866 Fire Hydrants
75 miles of sewer lines
789 Storm drains
22 storm drain mains
2,060 man holes
153 trash cans
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Still More
7 Buildings
City Hall
Corporation Yard
Recreation building
Women’s Center
Council Chambers
Police Station
Fire Station
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Notable Expenses
Monthly
Yearly
$20,000 street lights and stop lights
$9,000 - PG&E bill for Soto Field Lights
Gas / Oil – $102,200
Software Licenses - $80,000
Public Noticing - $12,000
$500,000 annually for liability insurance
$1,200 for dog food
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http://www.sanluisobispo.com/news/local/article154411449.html
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https://smartasset.com/taxes/california-tax-calculator
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Distribution of All Taxes
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Distribution of All Taxes
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Distribution of All Taxes
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Distribution of All Taxes
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Sales Tax Distribution
Sales Tax 7.75% on taxable goods only
Total Sales Tax $6.14
State $3.12
County $1.83
City $1.19
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Distribution of All Taxes
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Property Tax Distribution
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Property Tax Distribution
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Distribution of All Taxes
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Distribution of All Taxes
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Distribution of All Taxes
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Distribution of All Taxes
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Distribution of All Taxes
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A Little Perspective
Average Arroyo Grande Car Insurance Premium is $1,082.
Average cable bill is $103 per month or $1,236 per year.
Average cell phone bill is $71 per month or $852 per year.
The average household with a 14.9% interest rate on a $5,100 balance will pay $760 per year in interest payments on a credit card.
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Value
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What You Pay For
24/7 Police Services
24/7 Fire Services
Parks and Open Spaces
Well maintained roads
Street lights
Neat and tidy places (no litter and graffiti under control)
Neighborhood Services
Well planned places
Accessible and transparent government
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What is a Forecast?
A series of assumptions about changes in revenues and expenses
Long term perspective of revenues and expenses
Provides an overview of the economic environment
What is the capacity to increase or decrease services?
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What Isn’t a Forecast
An indication of priorities
Perfect prognostication – things will be different
Additional CalPERS actuarial assumption changes
Rising insurance costs (health, workers’ compensation, liability)
County animal services facility
Diablo power plant closure
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So Why Do We Do This?
Updated at the beginning of each budget process as new information is known and trends emerge
Helps provide a framework for future discussions about priorities
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The Model
Assumptions
Modest revenue growth – 1.5% annual average
Incorporates an economic downturn in 2020-21
New revenues from village hotel
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Current Year
+1
+2
+3
+4
+5
+6
+7
+8
+9
+10
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What Does It Indicate?
A continuing trend of expenditures exceeding revenues with the deficit increasing over time
The gap between expenditures and revenues of $912,000 in the first year, growing to $3.4 Million in the tenth year
If status quo spending continues:
We will reach minimum reserve policy level in 3 years
We will deplete all reserves in 5 years
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What’s Driving Expenditure Increases?
Requested increase in Five Cities Fire Authority allocation
CalPERS costs
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Alternative – No economic downturn, no FCFA request
Current Year
+1
+2
+3
+4
+5
+6
+7
+8
+9
+10
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Conclusion
Without intervention, expenditures will continue to exceed revenues
Solutions are: reduce expenses, increase revenues or some combination of the two
Potential options will be further explored in the budget development process
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Next Steps and Key Dates
Council discussion about priorities – February 13
Community Outreach
Analysis and preliminary direction related to larger budget issues or impacts (115 Trust for pensions and FCFA request.) March 13
Council review of results of community outreach and preliminary budget balancing strategy – March 27
Departments begin developing first draft operating and CIP budgets
Preliminary budget presentation – April 24
Budget Adoption – June 12 (June 26 if needed)
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