CC 2020-10-13_11a FY 2019-20 Year End Financial Status Report_PP Presentation
Consideration of Fiscal Year (FY) 2019-20 Year-End
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FY 2019-20 Budget Highlights
FY 2018 -20 Biennial Budget
FY 2018-20 Biennial Budget was influenced by rising pension and health care costs.
City staff presented a 10-year Financial Forecast prior to budget development.
The 10-year Forecast revealed that increases in pension costs would lead to a situation where expenses would exceed revenues in out years.
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FY 2019-20 Budget Highlights
FY 2018 -20 Biennial Budget (cont.)
City Council meet over five public meetings to address the imbalance.
Council addressed the imbalance by:
Recommending efficiency measures, reducing operating budgets
Prepayments to the California Pension Employment Retirement System
(CalPERS) to reduce future unfunded liability payments
Revenue enhancement, including increases in user fees
Staffing reductions
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FY 2019-20 Highlights
COVID-19 Impacts
Governor Newsom instituted a Shelter-at-Home imitative limiting residents’ movements and closing non-essential businesses on March 4, 2020.
City proclaimed a local emergency in response to COVID-19 on March 16, 2020.
On April 14, 2020, the City Council discussed the Forecast developed by staff to estimate the potential impacts to the City’s revenue stream due to COVID-19.
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FY 2019-20 Highlights
COVID-19 Impacts (cont.)
On April 28, 2020, the City Council approved short-term cost containment strategies to address the anticipated revenue shortfall. These include:
Hiring and travel chill
Identifying operating savings
Use of one-time available reserves
On May 2020, the City Council approved additional use of reserves due to cover budgeted expenditure savings not identified in the previous two presentations.
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Financial Performance
First perspective is comparing Actual results versus the Prior Year.
Secondly, a comparison of the Actual expenditures and revenue to the Budget.
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Current Year Actuals Compared to Prior Year
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General Fund – FY 2019-20 Actual vs. Budget
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General Fund Expenditures by Type
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General Fund Expenditures by Dept.
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Savings by Department
Administrative Services – Aside from salary savings of approximately $46,000, Non-Departmental savings of $361,000 were realized through contractual services and utility cost savings.
Community Development – Divisions within the Community Development Department (CDD) realized a total salary savings of approximately $80,000 and contracted services savings of $185,000.
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Savings by Department
Police Department – The Police Department realized significant salary savings of approximately $493,000, in addition to other operating expense savings of $163,000.
Recreation Services – Recreation Services realized salary savings of $105,000, primarily due to a partial vacancy during the year of the Recreation Supervisor position and the furloughing
of part-time recreation staff due to the COVID-19 pandemic.
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Savings by Department
Public Works – The Public Works Department realized savings for traffic signal maintenance and reduced costs due to a change to LED efficient lighting of local streets. This resulted
in approximately $64,000 in annual savings
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General Fund Tax Revenue
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Property Tax Revenue
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Property tax ended the year favorable to both the Budget and Forecast.
Property tax estimates are provided by the County’s Auditor/Controller Department.
Actual property tax collected was higher than the County’s estimates.
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Sales Tax Revenue
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Sales tax revenue benefited from California’s Wayfair v South Dakota ruling.
Business categories like building & construction, on-line shopping, and food & drug continued to show strong sales tax receipts.
Restaurants & hotels, autos and transportation were moderately impacted (20% decline in sales tax).
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Sales Tax Revenue
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Fuel and service stations were the most impacted my COVID-19. (50% or greater decline in sales tax).
The City received a large one-time payment in sales tax of $101,000, paid by local construction firm for the purchase of large piece of construction equipment.
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Transient Occupancy Tax (TOT)
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TOT revenue was below the Budget but favorable to the Forecast.
Shelter-at-Home order in mid-March impacted lodging establishments for an extended period.
However, saw jump in May and June TOT receipts.
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Transient Occupancy Tax (TOT)
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Recreation Fee Revenue
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Recreation Fees ended the year unfavorable to both the Budget and Forecast.
In mid-March the Children in Motion program was closed due to COVID-19 restrictions and remained closed through the end of the year.
Other recreational services like sports leagues, special interest classes were also closed during this time frame.
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Fund Balance
Actual Fund Balance Available (FBA) ended the year at $4.6 million.
FBA exceeded the Adjusted Budget by $1.5 million.
FBA would increase from a budgeted 18.4% to 23.8% if assumed budget targets are met this year.
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Questions
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Backup to Presentation(if needed)
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