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CC 2018-05-29_05b Preliminary FY 18-20 Biennial Budget_PP Presentation Consideration of Preliminary Fiscal Years 2018-20 Biennial Budget 6/14/2019 1 Background General Fund 10 Year Forecast – 1/23/2018 Expenditures exceed revenues 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 6/14/2019 2 Background Budget Balancing Strategies – 4/24/18 Operating Savings Revenue enhancements CalPERS cost savings Staffing Reductions CIP and Local Sales Tax Fund Review – 5/22/18 Identified major capital projects Directed reallocation of staffing related costs away from Local Sales Tax Fund 2/13/2018 3 Tonight Preliminary Budget Recommendations Opportunity to review expenditures and revenues in all funds Look at the budget in an overall context Provide additional direction to staff Budget adoption is scheduled for June 12, 2018 2/13/2018 4 Highlights Total Budget $85.9 million over two years Operating (salaries/benefits, services, supplies, maintenance) Debt payments Capital items General Fund approximately $20 million each year Includes paying $5 million to CalPERS for unfunded liabilities Balanced, reduces long term liabilities and maintains reserves at or above policy levels 2/13/2018 5 2018-19 Revenues by Source – Excluding CIP Fund $34.9 Million 2/13/2018 6 2018-19 General Fund Revenues by Source $17.8 Million 2/13/2018 7 General Fund Tax Revenue 2/13/2018 8 Expenditures by Function – All Funds 2/13/2018 9 Expenditures by Function – General Fund 2/13/2018 10 Budget Assumptions - Revenues Property Tax 4.25% ($200K) Sales Tax 1% ($150K) TOT 3% plus new hotel ($130K) Building & Planning fees – steady activity, fee increases will take effect Recreation activities – expect participation to decline 10% to 30% as fee increases take effect 2/13/2018 11 Budget Assumptions - Expenses Salaries & benefits based on current contracts FCFA contribution is based on “strategic plan” budget Significant CalPERS costs – offset by additional UAL payment of $3 million/$2 million General 2% inflation (unless contract specifies) Contingency of $25,000 built into Local Sales Tax Fund 2/13/2018 12 2/13/2018 *After accounting for the additional payment amount 13 Staffing Reductions 2/13/2018 *After accounting for mitigations, net savings from staffing is $447,000 14 Changes from May 22 Supplement Gas Tax funding with LTF and General Fund sources Increase Sales Tax funding for FCFA (Full Battalion chief and “strategic plan” costs) Increase Sales Tax funding for pavement management program Move Engineering Inspector position to General Fund Retention basin maintenance moved from Sales Tax to General Fund 2/13/2018 15 Other Significant Changes Tax measure consulting $25,000 in 2018-19 Technology automation solutions $66,000 in 2018-19 Server replacements $28,000 in 2018-19 and $65,000 in 2019-20 Analyst Position Reclassification $4,000 annually 2/13/2018 16 Other Significant Changes Engineering Services $52,800 annually (fee recovery) Building Inspection Services $39,000 annually (fee recovery Street Light/Traffic Signal electricity $50,000 annually Police Report Management System $85,000 in 2018-19 2/13/2018 17 Other Actions Fee increases Will require separate action by council Community development department adjustments Implementation may require additional staff and/or council actions Funding request from 5cities homeless coalition 2/13/2018 18 Specific Direction for FY 2018-20 Preliminary Budget Recommendations Opportunity to review expenditures and revenues in all funds Look at the budget in an overall context Provide additional direction to staff Budget adoption is scheduled for June 12, 2018 2/13/2018 19 2/13/2018 20 2/13/2018 21 General Fund by Department 2/13/2018 22