I N T R O D U C T I O N

Transcription

1 I N T R O D U C T I O N Summary of Total City Revenue and Expenditures Summary of Operating Expenditures and Staffing Changes Mission Statement and City Council Priorities (Goals)

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3 Summary of Total City Revenue and Expenditures The following information summarizes and highlights the planned major changes in the : Change From Amount Percent Resources Revenue $ 82,918,745 $ 91,253,002 $ 8,334,257 10% Loan Proceeds 7,946,413 8,000,000 53,587 1% ed Reserves 6,402,951 7,274, ,274 14% Net Transfers 2,344,062 2,682, ,493 14% Total Resources 99,612, ,209,782 9,597,611 10% Expenditures $ 95,046,978 $ 104,994,475 $ 9,947,497 10% Difference $ 4,565,193 $ 4,215,307 Revenue: Revenue is anticipated to increase by 10% ($8.7 million) overall and a detailed discussion of all budgeted revenues can be located in Section C Revenue Summaries. With that, the General Fund is increasing by 6% or $1.7 million, which is primarily due to Sales and Use Tax increasing by $0.4 million, Vehicle License Fee increasing by $0.6 million, and Development-Related Revenue, as 200 building permits are planned to be issued, increasing by $0.4 million. The Water District revenues are increasing by 13% from the FY. The rise in Water District revenue is primarily attributable to increases in water sales and water availability charges, as the Board of Directors of the Hesperia Water District approved a utility rate increase over five years, which went into effect January The approved annual 9% revenue rate increase for water sales and 6% revenue rate increase for sewer. Fees (DIF) for Streets and Storm Drainage. This gain is due to the anticipated continuation of growth in development activity. Furthermore, this increase is conservatively based on DIF rates prior to the City Council approved revisions that are to take effect July 16, Expenditures: The FY proposes expenditures of $104,994,475 which is a 10% or $9.9 million increase over the FY of $95,046,978. The proposed budget consists of $30.6 million of Capital Improvement Program (CIP) projects, $6.4 million of Debt Service, and $68.0 million for normal operations. The FY CIP budget will increase by 30%, which is primarily due to the Streets, Storm Drain, and Sewer related projects. The Debt Service budget will increase 58%, due to the Ranchero Road Interchange Loan. The FY operating budget of $68.0 million is a modest increase of 1% or $0.6 million from the FY of $67.4 million. Capital Improvement Program, 29% Operating, 65% Debt Service, 6% The largest percentage increase to City revenue is Streets Related, which is anticipated to increase by 24% or $3.2 million. The primary factor for this increase is the combined $2.6 million increase to Developer Impact A - 3

4 ed Reserves: Much like a savings account, ed Reserves are excess resources saved from prior fiscal years. It is the policy of the City to only use these savings for one-time purchases. ed Reserves are not used for on-going operation costs, such as staffing. The FY contains the use of reserves totaling $7,274,225. Of the $6.4 million use of reserves, $0.5 million will be utilized by operating funds, specifically the Hesperia Housing Authority and the Community Development Commission. The remaining $6.7 million of reserve usage is to primarily fund projects. The following table details the use of reserves. Balanced Policy The $7,274,225 of ed Reserves is comprised of the following: Operating Funds Use of Reserves Community Development Commission $ 72,970 Hesperia Housing Authority 453,613 Subtotal Operating Funds Use of Reserve 526,583 Other Funds Use of Reserves Streets Capital Improvement Projects Funds (Measure I, Gas Tax, DIF-Storm Drains, Ras Tax RMRA, & LTF) 3,058,484 Other City Related (AB 3229 Supplemental Law, DIF Public Service, & 2013 Civic Plaza Refi) 126,659 City Faclities (City Facilities CIP) 620,000 Water District - Sewer Capital 2,942,499 Subtotal Other Funds Use of Reserve 6,747,642 Total ed Reserves $ 7,274,225 Fund Balance: Actual Actual Revised General Fund CDC & Housing Authority Streets Related Other City Related Water District Fire District After accounting for all proposed resources and expenditures, the FY fund balance will be approximately $145.1 million, which is a decrease of 3% or $4.4 million from the FY of $149.4 million. The decrease is primarily due to CIP projects in the Water District, where its fund balance is decreasing by $5.0 million. Amount Percent Fund Balance Difference Change General Fund $ 5,176,099 $ 7,419,880 $ 2,243,781 43% CDC & Housing Authority 28,488,071 27,346,090 (1,141,981) -4% Streets Related 18,013,695 20,067,103 2,053,408 11% Other City Related 6,744,427 4,772,430 (1,971,997) -29% Water District 84,646,656 79,465,420 (5,181,236) -6% Fire District 6,372,380 6,004,923 (367,457) -6% Ending Fund Balance $ 149,441,328 $ 145,075,846 $ (4,365,482) -3% Balanced : A balanced budget uses operational revenue to fund operational expenditures, which means that one-time revenue is reserved for one-time costs, such as purchasing a large piece of equipment. Of the City operational funds, the Hesperia Housing Authority and the Community Development Commission (CDC) will be using fund balance reserves. Specifically, it is anticipated that the CDC will sell Land Held for Resale the replenish cash. Both funds were created from the Redevelopment Dissolution and have limited funding sources. Management is reviewing and monitoring options amid the post redevelopment atmosphere. While Water District as a whole has a balanced budget, individually, Water Capital has expenditures exceeding resources. Additionally, a few funds are projected to have ending fund balance deficits, including certain reimbursable grant funds, which are manageable and will be resolved in future years. Cash Reserve Policy: The City's General Fund, Water Operating and Sewer Operating funds are balanced with a surplus 10% cash reserve. The Fire District, as a whole, which includes the Fire Operating and the Fire Capital fund exceeds 10% cash reserves. While a percentage of cash reserves is an important indicator of financial health, the Government Finance Officers Association (GFOA) recommends that a City s General Fund maintain a minimum reserve level of two (2) months of operating revenues or regular general fund operating expenditures. The Proposed FY ensures that the General Fund has two months of cash reserves to fund General Fund operating expenditures. The Water District maintains 1.8 months of cash reserves, while the Fire District, including capital, maintains 5.8 months cash reserve. Greater detail on cash reserves can be found in section B Resources & Expenditure Summaries. A - 4

5 Capital Improvement Program (CIP) Summary: The total allocation for all Capital Projects in all funds in Fiscal Year is $30,590,062. These projects include streets, storm drainage, facilities, and water projects. For an in depth review of all CIP projects, refer to Section G CIP. Capital Improvement Program (CIP) Projects Streets Projects Street Improvement $ 4,334,316 "I"Avenue Corridor Enhancement 83,640 Ranchero Road Related Projects 2,970,000 Carryover Streets Related Projects Total Streets Related Projects 2,732,161 10,120,117 Storm Drainage Projects 1,200,000 Facilities Projects 1,311,945 Water Projects 14,228,000 Sewer Projects 3,730,000 Total CIP Projects $ 30,590,062 Debt Service for FY : The Debt Service obligation for the City of Hesperia and the Hesperia Water District total $6,359,457 for FY. This represents an increase of $2.3 million from the FY Debt Service budget of $4,027,515. It should be noted that the City s debt service obligation is 88%, while the Water District is 12% of the total obligation. The following is a synopsis of the FY obligation costs: City Total $4,882, Water Rights Lease Revenue Bonds - $1,446, Civic Plaza Refunding - $822, DIF Loan from General Fund - $47,750 Ranchero Rd Interchange Loan from SBCTA - $2,565,607 Water Total $1,477,125 City of Hesperia, 88% Hesperia Water District, 12% 1998 A Variable Rate Lease Revenue - $1,477,125 Positions, Salaries, and Benefits: In total, the FY ed salaries and benefits are expected to increase by 8%, or $1.4 million, over the FY. The FY includes the continuation of the merit step increases, a cost of living adjustment (COLA) increase of 3.0%, increase of the City s medical contribution, and anticipated CalPERS (retirement) increase. The anticipated CalPERS increase of $0.5 million, which is due to the third year of a five-year rate restructure, is the single largest salary and benefit increase. The FY proposes an increase of 0.92 fulltime equivalent (FTE), which is less than a 1% increase from the FY. FY : Please refer to the subsequent sections for detailed discussions for all items and areas of interest presented in the FY highlights. Financial Policies This section includes the financial policies the City must abide by. These policies are adopted by resolution of the City Council. (B) Resource & Expenditure Summary Provides an analysis of each of the major operating funds (General Fund, Water District, Fire District, Streets Maintenance Fund, Hesperia Housing Authority, and the Community Development Commission). In addition, a projected cash balance is prepared for the General Fund, Water District, and Fire District. (C) Revenue Summaries Detailed discussion and analysis of the budgeted revenue. (D) Expenditure Summaries An overview of all expenditures with discussions on major budgeted items. (E) Position Summaries & Salary Range Tables Discussion of the position changes, major benefit changes, along with listings of all positions and salaries. (F) & Program Summaries A detailed account of all operating expenditures by, Division, and Program. These sections include goals & accomplishments, as well performance and workload indicators. (G) Capital Improvement Program (CIP) This section identifies all CIP costs, as well as detailed descriptions of each individual project. (H) Debt Service This section identifies and describes each outstanding long term debt obligation. (I) Fund Balance Summary In this section, a calculation is prepared for each fund showing its budgeted financial transactions and identifies the impact of the projected budget on each fund. (J) Supplemental Information This section includes supplementary information that enhances the understanding of the prepared budget. A - 5

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7 Summary of Operating Expenditures and Staffing Changes CITY COUNCIL Change From Amount Percent City Council $ 637,093 $ 591,761 $ (45,332) -7% City Attorney 250, ,000 50,000 20% Total City Council $ 887,093 $ 891,761 $ 4,668 1% City Attorney budget is proposed to increase $50,000 for FY, which reflects the expenditure for the past several fiscal years. CITY MANAGER Change From Amount Percent City Manager $ 1,244,010 $ 1,341,826 $ 97,816 8% Information Technology 1,450,920 1,289,689 (161,231) -11% Total City Manager $ 2,694,930 $ 2,631,515 $ (63,415) -2% Full & Part-Time Staff (FTE) % Funding for the 2018 Municipal Election is added in the amount of $30,000. Eliminate one vacant Executive Secretary position (1.00 FTE) and add one Administrative Aide (1.00 FTE) position in the City Manager s Office. Transfer two part-time Receptionist positions (0.92 FTE) from Development Services to the City Manager s. Funding of $9,472 has been included to upgrade the city virtual server infrastructure to the latest software and firmware versions. Funding of $16,000 has been included to refresh 20 user workstations to improve performance and replace aging end of life computers. Funding of $44,850 has been included for the EPlan Review Software. MANAGEMENT SERVICES Change From Amount Percent Finance $ 2,333,135 $ 1,940,692 $ (392,443) -17% Human Resources/Risk Management 1,274,657 1,441, ,171 13% Total Management Services $ 3,607,792 $ 3,382,520 $ (225,272) -6% Full & Part-Time Staff (FTE) % A - 7

8 Summary of Operating Expenditures and Staffing Changes (Continued) MANAGEMENT SERVICES (Continued) During the FY Mid-Year Review, one Executive Secretary (1.00 FTE) position was transferred to Development Services to assist the newly created Assistant City Manager. Additionally, the Administrative Secretary (1.00 FTE) position in Development Services was transferred to Finance. Within the FY, it is proposed that the Administrative Secretary position be eliminated. Also, the Assistant City Manager/Management Services and /Finance Manager (2.00 FTE) positions were eliminated and a Director of Finance (1.00 FTE) position was added. Two Accounting Technician (2.00 FTE) positions will be added to more effectively deal with the Finance Division s workload. In addition, one Personnel Technician (1.00 FTE) position will be added to Human Resources/Risk Management Division. ECONOMIC DEVELOPMENT DEPARTMENT Amount Percent Community Development Commission $ 535,545 $ 524,026 $ (11,519) -2% Hesperia Housing Authority $ 443,982 $ 279,113 $ (164,869) -37% CDBG: Change From Administration $ 1,061,740 $ 1,093,581 $ 31,841 3% Neighborhood Stabilization 82,975 14,984 (67,991) -82% Subtotal CDBG $ 1,144,715 $ 1,108,565 $ (36,150) -3% Total Economic Development $ 2,124,242 $ 1,911,704 $ (212,538) -10% Full & Part-Time Staff (FTE) % None. D.S. COMMUNITY DEVELOPMENT Change From Amount Percent Planning $ 887,339 $ 917,322 $ 29,983 3% Building & Safety 1,001,772 1,070,128 68,356 7% Total Community Development $ 1,889,111 $ 1,987,450 $ 98,339 5% Full & Part-Time Staff (FTE) % The Building and Safety Manager position was retitled to Building Official during the FY Mid-Year review. One full-time Community Development Technician (1.00 FTE) position will be added to support the increased development workload. A - 8

9 Summary of Operating Expenditures and Staffing Changes (Continued) D.S. CODE COMPLIANCE During the FY Mid-Year review, one Animal Care Technician (1.00 FTE) position was eliminated and one Senior Animal Care Technician (1.00 FTE) position was added. One part-time Office Assistant (0.46 FTE) position will be added to Animal Control, while one part-time Animal Care Technician (0.46 FTE) will be eliminated. Add one part-time (0.46 FTE) Administrative Aide (Range 27) position, which will allow current Office Assistants to focus on expanded training of financial procedures and customer. Contracted costs for spay and neuter services will be reduced to $0, as these services will be funded by the spay and neuter trust account for this fiscal year. This is a savings of $120,000. D.S. PUBLIC WORKS Change From Amount Percent Code Enforcement $ 1,052,853 $ 1,151,344 $ 98,491 9% Animal Control 1,597,420 1,616,555 19,135 1% Total D.S.-Code Compliance $ 2,650,273 $ 2,767,899 $ 117,626 4% Full & Part-Time Staff (FTE) % Change From Amount Percent Street Maintenance $ 2,387,910 $ 2,504,067 $ 116,157 5% Traffic 1,431,331 1,642, ,162 15% Engineering 695, ,341 1,166 0% Building Maintenance 1,100,436 1,127,008 26,572 2% Total D.S. Public Works $ 5,614,852 $ 5,969,909 $ 355,057 6% Full & Part-Time Staff (FTE) % Streets Maintenance Funding of $200,000 is included as a carry-over item for the Pavement Management Program, which is a street assessment utilized for managing local streets. Funding of $50,000 is included as a carry-over item for the Heavy Load Vehicles Pavement Impact Study. Funding of $70,000 is included for the purchase of a reconditioned paving truck. Eliminate one vacant Part-time Office Assistant (0.23 FTE) position. Add one Senior Management Analyst (0.20 FTE) position and eliminate one Management Analyst (0.20 FTE) position. To accurately reflect current assigned duties, one Maintenance Worker (1.00 FTE) position is being transferred to Traffic. Traffic To accurately reflect current assigned duties, one Maintenance Worker (1.00 FTE) position is being transferred from Streets Maintenance. Engineering Eliminate one vacant Management Analyst (0.50 FTE) position. Add one Senior Management Analyst (0.30 FTE) position and eliminate one Management Analyst (0.30 FTE) position. Add one part-time Administrative Intern (0.23 FTE) position. A - 9

10 Summary of Operating Expenditures and Staffing Changes (Continued) D.S. WATER Water Operating Source of Supply Eliminate one vacant Water Conservation Specialist (1.00 FTE) position. Production Eliminate one Water Quality Technician (Range 12) position and add one Water Quality Specialist (Range 19) position. Funding in the amount of $35,000 has been included for the relocation of backflow prevention data from Tokay Software to Cityworks. Distribution Funding in the amount of $60,000 has been included for the purchase of a dump truck. Engineering Eliminate one vacant Management Analyst (0.50 FTE) position. Add one part-time Administrative Intern (0.23 FTE) position. Due to the recently completed Water and Sewer User Rate Study, which was approved by the Board of Directors during November 2017, approximately 20% of salaries, benefits, and engineering costs (contract) will be transferred to Sewer Operating. Customer Service Funding in the amount of $38,200 has been included for the purchase of one (1) right hand drive jeep. Utility Billing With the approval of the user rate study, approximately 16% of the Utility Billing budget will be transferred to Sewer Operating starting in FY. Administration Eliminate one vacant Part-time Office Assistant (0.23 FTE) position. Change From Amount Percent Source of Supply $ 3,624,483 $ 3,311,622 $ (312,861) -9% Production 3,398,471 3,415,046 16,575 0% Distribution 1,232,760 1,476, ,053 20% Pipeline Maintenance 1,281,847 1,356,475 74,628 6% Engineering 1,009, ,887 (202,997) -20% Customer Service 1,684,117 1,652,600 (31,517) -2% Utility Billing 1,065, ,135 (126,647) -12% Administration 4,912,234 4,859,804 (52,430) -1% Property Management 416, ,759 31,634 8% Subtotal Water Operating $ 18,625,703 $ 18,266,141 $ (359,562) -2% Water Capital 13,113,331 14,228,000 1,114,669 9% Total D.S.-Water $ 31,739,034 $ 32,494,141 $ 755,107 2% Full & Part-Time Staff (FTE) % Add one Senior Management Analyst (0.41 FTE) position and eliminate one Management Analyst (0.50 FTE) position. As with Engineering and Utility Billing, approximately 16% of salaries and benefits will now be included in Sewer Operating. A - 10

11 Summary of Operating Expenditures and Staffing Changes (Continued) D.S. SEWER Change From Amount Percent Sewer Operations $ 3,552,772 $ 3,519,106 $ (33,666) -1% Engineering 0 161, , % Utility Billing 0 177, , % Administration 0 111, , % Sewer Capital 760,000 3,860,020 3,100, % Total D.S. Sewer $ 4,312,772 $ 7,829,479 $ 3,516,707 82% Full & Part-Time Staff (FTE) % Add one Senior Management Analyst (0.09 FTE) position. During November 2017, the Board of Directors for the Hesperia Water District approved a water and sewer user rate study. In that study, it was identified that the water-operating fund fully funded Engineering, Utility Billing, and Administration costs. With the FY, approximately 20% of Engineering salaries, benefits, and engineering contract costs; 16% of the Utility Billing budget; and 16% of the Administration salary and benefits are transferred from Water Operating to Sewer Operating. Funding in the amount of $25,000 has been included to upgrade the camera truck software from GraniteXP to GraniteNet. POLICE DEPARTMENT Change From Amount Percent Police $ 15,912,763 $ 16,290,376 $ 377,613 2% Total Police $ 15,912,763 $ 16,290,376 $ 377,613 2% Full & Part-Time Staff (FTE) % The FY contract costs (Schedule A) for law enforcement services is $16,166,486; however, based on historical trends, it is assumed that $160,000 of vacancy savings will be realized during the fiscal year. With the assumed vacancy savings, the FY is $16,006,486 for law enforcement contract costs The is not anticipating any changes in staffing levels for FY. A - 11

12 Summary of Operating Expenditures and Staffing Changes (Continued) FIRE DISTRICT Change From Amount Percent Operations and Community Safety $ 10,530,863 $ 10,925,735 $ 394,872 4% Administration 890,575 1,125, ,585 26% Total Fire District $ 11,421,438 $ 12,050,895 $ 629,457 6% Full & Part-Time Staff (FTE) % For FY the County Fire contract for the current level of service has increased from $10,530,863 to $10,925,735 for an increase of $394,872, or 3.7%. This increase was due to operating expenses decrease of $8,541; an increase in administrative overhead costs of $67,043; and an increase in salaries and benefits of $336,370. CalPERS inactive pension plan will increase $122,241 or 18% from $675,542 to $797,783 in FY. A - 12

13 CITY OF HESPERIA MISSION STATEMENT Hesperia is dedicated to enhancing our safe, friendly community, while blending a rural lifestyle with progress and responsible growth. CITY COUNCIL PRIORITIES (GOALS) To adhere to the City s Mission Statement, the City Council has adopted the following six goals. 1. Public Safety Ensure adequate public safety resources are available for our citizens, families, children, businesses, and visitors. Refer to the Police (page F-102) and Fire (page F-110) budget, as well as the Code Enforcement Program (page F-50) and the Animal Control Program (page F-53) budget for discussion of the Public Safety goal. 2. Financial Health Hesperia will assure its financial health by continuing to provide structurally balanced budgets for its operating funds. The City Manager (page F-9) and Management Services, particularly the Finance Division, (page F-20) budget discusses the Financial Health goal. 3. Future Development Actively manage growth to ensure cohesive development including Industrial, Commercial, Residential, Freeway, Main Street and Ranchero Corridors. The Economic Development (page F-28) focuses on business attraction component of this goal, while the Development Service, particularly the Community Development Division (page F-44 & F-46), focus on the development component of the goal. 4. Future Vision Agree on a vision of what Hesperia should be in 5, 15, and 25 years (revisit the vision no sooner than once every 5 years). This goal discussion can be found in the City Council narrative found on page F-1. A - 13

14 CITY COUNCIL PRIORITIES (GOALS) - Continued 5. Organizational Health Establish and maintain a healthy and efficient organization to provide City services. The City Manager (page F-9) and Human Resources/Risk Management Division within the Management Services (page F-24), ensure that this goal is ascertained. 6. Capital Improvement Create Capital Improvement Funding after Redevelopment s elimination. The Development Services (page F-66), as a whole, oversee capital improvement. Furthermore, refer to the Capital Improvement Program (CIP) section, which starts on page G-4 for a complete discussion of the planned projects. A - 14