CC 2018-04-24_11b Budget Balancing Strategies_2018-20 Biennial Budget PP Presentation_1
Consideration of Budget Balancing Strategies for 2018-20 Biennial Budget
6/8/2020
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Prologue
Checking-in; Communication is key
2/13/2018
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Background
General Fund 10 Year Forecast – 1/23/2018
Expenditures exceed revenues by $900,000
Without intervention, all Fund Balance depleted within 5 years
Major drivers: CalPERS costs, FCFA budget request
Budget Priorities – 2/13/18
Identify most important services to provide
Approved Budget Concepts
Endorsed Goals/Priorities
6/8/2020
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1/23/2018
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Goals/Priorities
Reverse the expense/revenue gap - $900,000 by second year
Focus on core and essential services
Right Size core and essential services
Focus on efficient service delivery for non-core and non-essential services
Increase revenues
Reduce exposure to volatility in pension payments
Begin to study options for new revenue sources
2/13/2018
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Proposed Budget Concept
Once long-term economic and fiscal sustainability is achieved, start to build a community vision of future wants (based on the assumption that the community wants and expects more).
Identify new revenue sources to support these efforts
We can then say “these are the services and service levels the City is able to provide, if we as a community want more, we, as a community, have to find new revenue.”
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Proposed Budget Balancing
Reduction of operating budgets/develop efficiencies
(Pre)PAYMENT of CalPERS debt
Revenue enhancements
Staffing reductions, eliminations and restructuring
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Reduction of Operating Budgets and Efficiency Measures
We have gone to this well many times – its almost dry
All departments reviewed operating budgets
Results in reduction of expenditures by $86,000 in FY 2018-19 and $164,000 in FY 19-20
Significant proposed reductions:
Two year hiatus in memberships to
League of California Cities and Channel Counties Division ($7,400)
Economic Vitality Corporation membership ($5,000)
Five Cities Diversity Coalition membership ($1,500)
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Revenue Enhancements
Fee Increases – Community Development
Accelerate time frame to achieve cost recovery
Increase cost recovery goal from 75% to 80%
Generates approximately $121,000 annually – if activity remains stable
Fee Increases – Recreation Services
Increase fees for Preschool, Children in Motion, youth and adjust sports in 2018-19 ($130,000 - $250,000 annually)
Explore feasibility and evaluation of several other revenue ideas in the coming months with implementation by 2019-20
2/13/2018
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Prepayment of CalPERS Unfunded Liability
Unfunded Liability – difference between cost of providing retirement obligations and market value of assets set aside to pay them
It is city debt that has an interest rate of 7%
Annual payments will increase until FY 2032, then decline
Increase 45% in 10 years
Managing city debt is a big component of fiscal sustainability
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CalPERS Debt
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What does that mean?
The employer is responsible to make up any asset losses, mistaken assumptions, and any expected returns not made by the investments.
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Negative Amortization
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Negative Amortization
Not paying the minimum on our credit cards
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The Standard Financial Caveat
Past Performance Is No Guarantee of Future Results
Or is it?
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2/13/2018
*After accounting for the additional payment amount
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Paying down UAL
Saves $7.45 million in interest costs over 30 years
General Fund minimum balance remains above 20% goal
Improves PERS funded status
Eliminates $5 million in debt (23% of UAL)
Reduces possibilities of what else we could do with $5 million
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This debt costs us $1,500,000 per year
When we hold money we earn <1%, the CalPERS debt is 7% against us; we are losing 6% every year or $1,296,000 per year
If we are comfortable with a 20% reserve but we hold more than that instead of paying debt we are losing 6% of it every year or $300,000.
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Staffing Reductions
Community development
Eliminate Associate Planner, PT Planning Technician, PT Planning Intern positions and replace with Full Time Assistant Planner position
Eliminate Administrative Secretary position
Reclassify existing PT Senior Office Assistant to Full Time Permit Technician
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Impacts
Community development
Require shifts to major aspects of land use planning
Reduce or eliminate commissions/committees
Revise lower impact land use regulations and reduce review processes
Delay long range planning initiatives like E. Grand, Halcyon Rd, E. Branch
Delay programs like Climate Action Plan, housing, water conservation
Delay Housing Element, Circulation Element, Safety/Local Hazard Mitigation Plan and Land Use Elements
Will require reduced public counter hours
Will result in higher workloads for remaining staff
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Staffing
Public works
Eliminate 3 part time Maintenance Worker positions
Eliminate 1 part time CIP Associate Engineer/Intern
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Impacts
Public works
CIP projects and CIP Project Manager will be impacted by reduction in collecting data and updating records
Parks maintenance and street maintenance will be impacted
30% reduction in mowing, trash pickup, restroom maintenance, etc.
Reduction in assistance for special events and volunteer support
Reduction in building maintenance and janitorial services at City Hall, Recreation Services, and Corporation Yard
Visual impacts to parks, streets, Village areas and deferred proactive maintenance of infrastructure
Delay of 3 – 4 street maintenance projects per week due to loss of safety team for street closures or traffic control
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Staffing
police
Elimination of Property & Evidence Technician and PT Administrative Intern (both non-sworn)
Reduction of hours for Police Reserve (sworn)
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Impacts
Police
Redistribution of workload for property and evidence duties
Impacts to crime mapping and data analysis – greater reliance on GIS Technician in Community Development
Reduce hours available for Reserve Officer to assist with traffic control at special events, parking enforcement, traffic enforcement, community engagement activities related to DUI
and traffic safety
Reduce hours available for Reserve Officer to assist with armory and range operations
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Seeking Input
Council and Community – does this approach seem appropriate or are there different views or perspectives?
If we reduce one component, which other component(s) should increase?
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6/8/2020
Council will consider the CIP and Local Sales Tax Fund 5/8/18
Preliminary Budget 5/29/18 (Special Meeting)
Budget Adoption 6/12/18
Next Steps
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Department Directors are present to assist with any questions
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What if?
2/13/2018
What if we do the right thing and pay all of our debts and the State forgives everybody else's?
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