City of Pleasanton Finances - Overview. July 12, 2017 Chamber of Commerce

Transcription

1 City of Pleasanton Finances - Overview July 12, 2017 Chamber of Commerce

2 2 Public versus Private Sector Public (not-for-profit) versus a private (for profit) entity Private company/corporation has one consolidated balance sheet and one income statement to measure overall profit & loss Monies can be comingled and used for any legal purpose Public entity has a balance sheet and income statement for each fund Monies can not be comingled and must be used for the fund s designated purpose

3 3 Think of Funds as Separate Buckets General Fund Taxes, fees, permits Police, fire, operating services Special Revenue Funds Funds restricted for special purposes Grants, donations Internal Service Funds Cost allocation mechanism Equipment, vehicle, IT, replacement Other Funds Debt service Trust funds Enterprise Funds Fees normally set to recover costs Water, sewer, golf course

4 4 Summary of Expenditures by Fund Fund Category FY 2017/18 (in millions) % of Budget General Fund $ % Enterprise Funds % Internal Service Funds % Special Revenue Funds 3.2 2% CIP Funds % Total $ %

5 5 Budget Process Starts with 2-year City Council Adopted Work Plan 2-year Work Plan identifies projects and major initiatives the City will implement. Dec Draft 2-year Work Plan Prepared by City Staff Jan-Feb 2017 Boards and Commissions Review and Provide input March 2017 City Council holds public workshops and adopts the Work Plan April-May 2017 City staff incorporate Work Plan into the 2- year budget and 4-year capital plan.

6 6 Summary of Revenues by Fund Fund Category FY 2017/18 Revenues (in millions) % of Budget General Fund $ % Enterprise Funds % Internal Service Funds % Special Revenue Funds 5.0 2% CIP Funds % Total $ %

7 7 General Fund - The Revenue Side 10% 6% 84% Taxes Department Revenues Other Revenues

8 General Fund The Revenue Rules 8 City Council has little authority to increase revenues Voters must approve any new or increased tax Fees and Charges for specific services must not exceed the cost of providing the service cannot make profit General Fund is dependent on general tax revenues (i.e. the local economy) Property Tax - 54% Sales & Other Taxes - 30% 84%

9 9 Sales & Use Tax Rate Alameda County State General Fund 6.50% City 1.00% BART 0.50% ACTC (Measure B & BB) 1.00% Alameda County Health Services 0.50% TOTAL 9.50%

10 10 10-year Sales Tax History $25.00 $22.40 $23.50 $22.50 $23.00 $23.70 $21.00 $20.00 $17.50 $18.50 $19.10 $19.10 $15.00 $15.40 $10.00 $5.00 $ /09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

11 11 Areas of Sales Tax Changes 5.0% State & County Pools 3.5% Restaurants & Hotels 4.6% Building & Construction 4.8% Autos & Transportation -12.2% Business & Industry -8.1% General Consumer Goods

12 12 Property Tax Distribution Allocation County City of Pleasanton Pleasanton Schools East Bay Regional Park District (EBRPD) So. County College District Flood Zone 7 County Schools Bay Area Rapid Transit (BART) County Flood Control Bay Area Air Quality Mosquito Abatement Alameda County Resource Conservation District Education Revenue Augmentation Fund (ERAF) TOTAL

13 13 10-year Property Tax History $70.0 $60.0 $53.7 $57.3 $60.3 $62.5 $63.3 $50.0 $40.0 $39.7 $39.5 $39.1 $38.7 $39.5 $40.9 $30.0 $20.0 $10.0 $0.0 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

14 14 Hotel Tax Trends $7.00 $6.00 $6.00 $6.00 $6.30 $6.50 $5.00 $5.10 $4.30 $4.00 $3.50 $3.90 $3.00 $2.80 $2.70 $3.00 $2.00 $1.00 $ /09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

15 15 General Fund Expenditures (By Department)

16 16 General Fund Expenditures (By Type of Expenditure) 1.1% 5.4% 0.4% 19.3% 73.7% Personnel Repairs & Maintenance Capital Outlay Materials & Supplies Transportation & Training

17 17 How does Pleasanton Compare to Walnut Creek? Walnut Creek Pleasanton Population estimate for ,018 75,600 Average Median Household Income (2016)* $110,823 $132,366 Assessed Valuation (FY 2016) $15.3Billion $20.9Billion Portion of 1% Property Tax Rate 9% 25% Annual Property Tax Revenue (FY 2016) $20.8Million $59.1Million Annual Sales Tax Revenue (FY 2016) $23.6Million $25.3Million Total General Fund Revenue (FY 2016) $87.7Million $113.9Million Total General Fund Expenditures (FY 2016) $85.0Million $105.4Million * Bay Area Census, American Communities Survey, 2010

18 18 Enterprise Funds Water Wastewater Golf Cemetery Transit Enterprise Funds are self-supporting funds where rates & fees are designed to cover the cost of operations, maintenance, repair and replacement of facilities and infrastructure

19 19 Capital Project Funds (Capital Improvement Program-CIP) FY 2017/18 Streets $8.3 Parks 4.5 Miscellaneous 6.2 Water 4.8 Wastewater 2.2 Total $28.2M Projects include: Street resurfacing, downtown parking, New Fire Station #3, Aquatic center locker rooms, bike and ped improvements, & Kottinger Sr. Housing

20 20 Financial Policies Guide the City s Finances Adopt a balanced budget Prudent investments of the City s money Establish reserves for unforeseen circumstances as well as equipment & facilities replacement costs Year-end surplus is used to increase reserves, fund capital projects, and/or reduce pension unfunded liability

21 21 Operating Reserves FY 2017/18 General Fund - $20.8M = 20% of operating expenses Water Fund - $5.4M = 26% of operating expenses Sewer Fund - $5.4M =41% of operating expenses

22 22 INVESTING CITY FUNDS

23 City s Investment Portfolio 23 $204 million As of 5/30/17

24 24 Types of Investments Per Section of the Government Code U.S. Treasury Bills and Notes Federal Agencies Local Agency Investment Fund (LAIF) Money Market Corporate Notes Commercial Paper Bank Certificates of Deposit

25 25 City Portfolio by Investment Type Callable Federal Agency Issues 46% Non-Callable Federal Agency Issues 31% LAIF 17% Corporate Notes 3% U.S. Treasury Notes 2% Certificates of Deposit 1% Total 100.0%

26 26 Return on Investments Overall Return on Investments 1.09%

27 27 Monthly Claims on City Cash Paying the Bills (Accounts Payable) $5 to $10 million Payroll Salaries Only $3.0 million Big project payments $ amount varies

28 28 THE CITY S NET POSITION ASSETS - LIABILITIES

29 29 Assets and Liabilities at end of FY 2015/16 Total Assets & Deferred Outflows of Resources: $959.8 million Total Liabilities & Deferred Inflows of Resources: $188.1 million Net Position $771.6 million

30 30 Changes in Net Position Increased by $24.6M from FY 2014/15 New capital assets: Bernal Park Old Stanley Blvd Bernal/I-680 landscaping improvements Various street resurfacing projects

31 31 FINANCIAL CHALLENGES

32 32 City of Pleasanton Pension Related Liabilities Fire Retiree Funded Plstn Only Miscellaneous Police (1) Medical (OPEB) (3) Total Ratio Based on Market Value of assets Total Unfunded Liability as of June 30, 2005 $8,939,536 $11,481,557 7,730,000 N/A $28,151,093 NA as of June 30, ,674,613 10,993,259 7,058,000 N/A 25,725,872 NA as of June 30, ,913,704 14,223,163 6,480,000 N/A 23,616,867 NA as of June 30, ,421,672 31,061,451 16,440,000 N/A 59,923,123 NA as of June 30, ,623,887 78,769,631 41,709,409 29,699, ,802, % as of June 30, ,960,312 77,771,174 39,773,229 30,115, ,620, % as of June 30, ,505,962 71,307,408 21,857,349 35,563, ,234, % as of June 30, ,932,104 81,745,309 28,247,729 42,585, ,510, % as of June 30, ,357,207 72,500,887 25,508,677 42,585, ,952, % as of June 30, ,838,694 70,016,408 23,816,166 39,663, ,334, % as of June 30, 2015 (2) 28,639,688 66,465,857 20,164,785 33,355, ,626, % Difference (2014 to 2015) 800,994 (3,550,551) (3,651,381) (6,307,306) (12,708,244) Difference (2009 to 2015) (2,984,199) (12,303,774) (21,544,624) 3,656,308 (33,176,290) Notes: FY 2014 based on PERS January 2016 report includes PERS preliminary report that won't be finalized until October (1) Prior to FY2011 the Police Safety plan was part of a pooled plan, UAL is estimated. (2) Reflects $14.2 M allocation from Retiree Health Reserve Fund and FY2015 YE surplus to pre-fund PERS & OPEB. (3) Applied Retirees Medical Reserve Fund Balance of $19.7M to reduce liability. Prior to FY2009 the City did not have information about the actuarial accrued liabilities for OPEB

33 33 CalPERS Challenges As of June 30, 2016

34 34 CalPERS Policies to Accelerate Pension Contributions to Address Challenges FY 2015/16 Adopted Policies: Replacing rolling 30-year amortization of gains and losses with fixed amortization Changing market asset smoothing to direct rate smoothing Improved mortality assumptions

35 35 CalPERS Policies to Accelerate Pension Contributions January 2017 Adopted Discount Rate Policy: Valuation Date Fiscal Year Contribution Discount Rate June 30, / % June 30, / % June 30, / % June 30, / %

36 36 Add l Annual CalPERS Payments from New Policies $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $ Potential Impacts - Reduced General Fund contributions to the CIP and other cost saving measures required to balance budget.

37 37 City PERS Pension Liability Prepayments PERS Pension Liability Prepayments Amount Police Side Fund Payoff (FY 2011/12) $7,900,000 FY 2012/13 Prepayment from YE Surplus 1,000,000 FY 2013/14 Prepayment from YE Surplus 1,000,000 FY 2014/15 Prepayment from Retiree Medical Reserve and 14/15 YE Surplus) 10,600,000 FY 2015/16 Prepayments (Budgeted & YE Surplus) 2,919,587 FY 2016/17 Prepayments (Budgeted) 2,000,000 Total Pension Liability Prepayments $25,419,587

38 38 Implementing CalPERS Policies - Next Steps CalPERS actuarial report due in June or July with more accurate pension projections. City staff and the City s actuary will analyze options to prefund pension liabilities. Staff will present funding options to City Council in the summer/fall of 2017.

39 39 Questions?