DISCUSSION ON PROPOSED FY 2018/19 OPERATING GENERAL FUND BUDGET

Transcription

1 J-12 STAFF REPORT MEETING DATE: June 12, 2018 TO: FROM: City Council Regan M. Candelario, City Manager Michael L. Antwine II, Assistant City Manager Tony Clark, Finance Manager 922 Machin Avenue Novato, CA (415) FAX (415) SUBJECT: DISCUSSION ON PROPOSED FY 2018/19 OPERATING GENERAL FUND BUDGET REQUEST Discuss the proposed Fiscal Year (FY) 2018/19 Operating General Fund budget and provide feedback to staff. DISCUSSION The City budget process for the 2018/19 fiscal year began in January 2018 with a series of staff meetings. In February 2018, staff presented Council with the FY 2018/18 Mid-Year Financial Report. On April 10, 2018, staff presented the Capital Improvement Program during a City Council work session. On April 17, April 23, and April 28 staff held a series of community budget workshops. The Operating Budget work session was held on April 24, 2018, and continued discussion and budget direction was received from the City Council at its May 8 meeting, and a special City Council meeting on May 14, Additionally, on June 7, 2018 staff met with the Novato Citizens Finance/Advisory Oversight Committee to present the proposed Measure F budget requests recommendations. The committee provided staff with their feedback and were overall supportive of the proposed funding recommendations. The proposed FY 2018/19 budget was published on May 25, 2018 and the full document is available online on the City s website: At this point in the budget development process staff is presenting its recommended funding allocation for the operating general fund accounts and Measure F funds based on all of the input received from the community, City Council, Staff, and Novato Citizens Finance/Advisory Oversight Committee. The proposed budget provides a strategic and conservative fiscal expenditure plan that incorporates any known mandatory cost increases and priority needs of the organization. The table below represents a summary of each departments approved FY18/19 one- 1

2 time and on-going budget requests and their respective funding sources: ANALYSIS The FY18/19 budget development process includes a 2.5% growth rate assumption to the current year s approved operations and maintenance (O&M) budgets, a 3% cost of living adjustment (COLA) increase for FY18/19, and respective personnel fringe benefits per the current employee labor agreements. The proposed FY18/19 budget as presented is a balanced budget including all of the proposed additional budget requests from each department and the aforementioned COLA increases and any mandated or priority O & M costs. Additionally, the proposed budget complies with the City s Emergency Reserve Policy of 15%. The proposed budget emphasizes a prudent and targeted approach on our community s highest priorities and most pressing challenges. The City anticipates financial stability for the FY budget; however, as previously stated in prior meetings staff acknowledges that it is time to begin developing a plan for revenue generation and growth that will allow the City to maintain service levels to the community in future fiscal years. This should be recognized as a very high priority for staff during FY BUDGET VARAIBLES SMART Station: While the proposed budget does not include a specific allocation for the $2.1 million dollar additional funds needed for the Smart Station at the Depot Site, Staff is developing recommendations for Council consideration regarding this project for the July 10 City Council meeting. Based on our initial fiscal analysis, staff will be proposing funding alternatives that do not have a negative impact to the proposed FY General Fund budget. However, if staff receives direction from Council to use funds related to current general fund operating activities, staff will provide a fiscal analysis of that impact to the City s operational budget. Labor Negotiations: As previously stated within this report, the FY proposed budget does include the City s contractually mandated 3 % COLA increases to city employees. However, staff did not include 2

3 any projections for future COLA increases within the budget, because the city s labor contracts expire within FY and staff s position is that it would not be appropriate to include any COLA scenarios for labor negations outside of a City Council approved labor negotiation process for the FY labor negotiation period. Nonetheless, per Council requests staff has provided three (3) Hypothetical 5-year forecast scenarios that would be based on the proposed FY budget as presented. These Hypothetical scenarios represent COLA increases between 1 3%. It must be noted that staff is not representing or proposing any of the three COLA scenarios. Our understanding is that this information is being used by Council to assist only for discussion purposes for the proposed FY budget. 115 Irrevocable Trust: Staff has recommended a $450,000 investment for the creation of the 115 trust. Once approved by Council staff will reallocate these funds from the Emergency & Disaster Response Reserve fund, which has a current available fund balance of $6,127,081 which will NOT reduce the reserve below the 15% reserve policy amount. The Emergency Reserve Fund is located on page 321 of the draft budget book. Please be advised that this initial investment of $450k will not resolve the City s Unfunded Accrued Liability balances, it is just an initial set-up amount. Staff is in the process of identifying an actuary to perform a detailed analysis and develop a future funding strategy for the city related to its ongoing pension costs. We anticipate this actuarial report will be complete in September-October 2018; then staff would issue an RFP for a 115 Trust provider in November Measure F Funding: As part of the budget development process, staff evaluated the use of Measure F funds to supplement general fund dollars where applicable to complete several significant technology improvement projects, organizational efficiency improvements and revenue generating activities that will assist in the accomplishment of the City s strategic goals and quality of life service. Staff is proposing an allocation of $639,798 from the unallocated Measure F funds for FY Administrative Services Department - Administration Division a. $40,000 for the Cannabis Outreach Plan (One-time) 2. Administrative Services Department - Citywide Programs a. $75,000 for Grant Writer - ( One- Time) 3. Information Technology Division a. $104,910 for a Technical Business Analyst position - (2 year request) b. $46,000 for Live Closed Captioning Services & HD Streaming Services from Granicus - (One-time) c. $18,500 new Dell leases, including laptops/workstations - (One-time) d. $16,800 Sonic Internet circuit ($21,600); MIDAS network changes (-$4,800) - (One-time) e. $56,000 for Kyocera TASK ALFA maintenance contract ($16k), 2 nd Dell Compellent maintenance for PD Department ($15k), Video Storage maintenance ($6k), BMC Track-It! software maintenance ($9k); Palo Alto firewall maintenance ($10k) - (One-time) 4. Finance Division a. $75,000 for contract with HDL to provide business license and Transient Occupancy Tax audit (one-time) b. $50,000 for contract to perform cost recovery fee study - (One-time) c. $5,000 for contract Bartel & Associates to perform actuarial study for 115 pension trust - (One-time) 5. Police Department a. $2,588 increase for Major Crimes Task Force new annual costs of $41,588 - (2 year request) 3

4 6. Central Administration Economic Development a. $150,000 - Business Assistance Program (One-time) NEXT STEPS The schedule for the upcoming budget adoption for both operating and capital budget is listed below: June 21, 2018 June 26, 2018 Budget Review Meeting with Finance Oversight Committee Council Meeting / Public Hearing Budget Adoption RECOMMENDATION Staff recommends Council discuss the proposed fiscal year 2018/19 Operating General Fund budget and provide feedback to staff. ATTACHMENTS 1. Memo on Errata FY Five Year Forecast with COLA 1% ~2% ~ 3% increases 3. List of recommended FY budget requests w/ budget book references 4

5 City of Novato - Five Year General Fund Financial Forecast Attachment 1-1% COLA FY17/18 Amended Budget Forecast 2017/ / / / / /2023 Revenues 36,340,155 38,269,783 39,336,278 40,515,067 41,806,142 43,142,380 Transfers In 1,359,935 1,418,675 1,396,536 1,381,100 1,422,500 1,380,500 J-12.1 TOTAL REV'S & TRANSFERS IN 37,700,090 39,688,458 40,732,814 41,896,167 43,228,642 44,522,880 Expenditures 36,018,634 39,318,466 40,707,666 41,951,639 43,353,838 44,786,359 Position Vacancy / Savings Factor (650,000) (650,000) (650,000) (650,000) (650,000) (650,000) Current Year Budget Amendments (54,459) Transfers Out 3,174,853 1,475,588 1,307,303 1,339,810 1,373,130 1,407,284 TOTAL EXP'S & TRANSFERS OUT 38,489,028 40,144,054 41,364,968 42,641,450 44,076,968 45,543,643 Interfund Loan Repayment 463,938 Use of FY16/17 Surplus 325,000 Use of FY17/18 Surplus 750, % Inflation Factor 309,000 Operating Surplus / (Deficit) - 603,403 (632,154) (745,283) (848,326) (1,020,763) Deficit as % of Revenue 0.0% -1.5% 1.6% 1.8% 2.0% 2.3% Beginning Reserve Fund Balance 5,839,834 5,839,834 6,443,237 5,811,083 5,065,800 4,217,475 Ending Reserve Fund Balance 5,839,834 6,443,237 5,811,083 5,065,800 4,217,475 3,196, % 14.28% 12.08% 9.73% 7.14% Millions Novato Five-Year General Fund Forecast / / / / / /2023 Forecast Revenues Forecast Expenditures 5

6 Description 2017/2018 Amended Budgeted Growth Assumptions 2018/ / / / /2023 Property Tax 9,227, % 9,596, ,980, ,379, ,794, ,226, Secured Property Taxes In Lieu VLF 4,776, % 5,020, ,220, ,429, ,646, ,872, Real Property Tax 358, % 362, , , , , Sales & Use Tax 8,631, % 9,607, ,847, ,093, ,345, ,604, Measure C 2,584, % 2,648, ,714, ,782, ,852, ,923, Sales & Use Tax Public Safety Sales Tax 460, % 471, , , , , Transient Occupancy Tax 1,768, % ~5% 1,786, ,804, ,822, ,913, ,009, Business Licenses 1,218, % 1,249, ,280, ,312, ,345, ,379, Franchise Fees Cable Television 1,098, % 1,125, ,153, ,182, ,211, ,242, Franchise Fees PG&E 635, % 641, , , , , Licenses and Permits 1,152, % 1,175, ,199, ,222, ,247, ,272, Intergovernmental 381, % 434, , , , , Charges for Services 2,920, % ~ 4% 3,046, ,161, ,279, ,402, ,530, Fines and Forfeitures 525, % 532, , , , , Uses of Money 541, % 528, , , , , Miscellaneous 60, % 44, , , , , Operating Transfers In 1,359, ,418, ,396, ,381, ,422, ,380, Total Revenue 37,700, ,688, ,732, ,896, ,228, ,522, Salaries & Benefits - Miscellaneous 12,141, Refer to CalPERS Assumptions 13,954, ,219, ,502, ,794, ,094, Salaries & Benefits - Safety 10,538, Refer to CalPERS Assumptions 9,478, ,649, ,825, ,965, ,109, CalPERS Pension Costs - Miscellaneous 1,520, Refer to CalPERS Assumptions 2,177, ,539, ,856, ,151, ,418, CalPERS Pension Costs - Safety 2,204, Refer to CalPERS Assumptions 2,331, ,726, ,084, ,418, ,704, Total Salaries 26,404, ,941, ,135, ,270, ,329, ,326, Professional Services 3,079, % 3,461, ,250, ,332, ,415, ,500, Contracts 1,327, % 1,153, ,398, ,203, ,233, ,338, Training 479, % 516, , , , , Equipment Replacement 733, % 658, , , , , Repairs & Maintenance 815, % 868, , , , ,040, Material & Supplies 1,819, % 1,899, ,930, ,974, ,019, ,065, Other Post Employment Benefit 329, % 347, , , , , Utilities 1,030, % 1,081, ,108, ,136, ,164, ,193, Transfers Out (Pension Obligation Bonds Debt Service) 1,270, ,388, ,436, ,490, ,542, ,604, Transfers Out 1,904, ,475, ,307, ,339, ,373, ,407, Expenditure Subtotal 12,788, ,852, ,879, ,021, ,397, ,866, Total Expenditures 39,193, ,794, ,014, ,291, ,726, ,193, Total Net Revenue (1,493,397.00) (1,105,596.70) (1,282,154.28) (1,395,282.76) (1,498,325.51) (1,670,763.07) 6

7 Legend GL-Account Description 2017/2018 Amended Budget (Forecast Base) Growth Estimate Laddered Growth Estimate FY 17/18 Surplus Ongoing Additions / Reductions 2018/ / / / /2023 PT 401 Secured Property Taxes 8,869, % (96,370.00) 9,224, ,593, ,976, ,376, ,791, PT 402 Unsecured Property Taxes 138, % (3,500.00) 144, , , , , PT 403 Supplemental Property Tax 210, % (38,200.00) 218, , , , , PT 409 Special Assessments 4, % 13, , , , , , VLF Secured Property Taxes In Lieu VLF 4,776, % 57, , ,020, ,220, ,429, ,646, ,872, RPT 410 Real Property Transfer Tax 358, % (28,500.00) 362, , , , , ST 411 Sales & Use Tax 8,631, % 690, , ,607, ,847, ,093, ,345, ,604, STC Measure C 2,584, % 15, ,648, ,714, ,782, ,852, ,923, ST Sales & Use Tax Public Safety Sales Tax 460, % 10, , , , , , TOT 413 Hotel Tax 1,768, % 5.00% (18,900.00) 1,786, ,804, ,822, ,913, ,009, BL 414 Business Licenses 1,218, % 31, ,249, ,280, ,312, ,345, ,379, FFC Franchise Fees Cable Television 1,098, % (3,000.00) 1,125, ,153, ,182, ,211, ,242, FFPGE Franchise Fees PG&E 635, % 40, , , , , , PT 417 Residential Development Tax 5, % (500.00) 5, , , , , P 421 Construction Permits 1,115, % 134, ,138, ,160, ,183, ,207, ,231, P 4222 Police Permits 21, % 12, , , , , , P 429 Other Permits 15, % (2,000.00) 15, , , , , IG 431 State-Motor Vehicle in Lieu 23, % 5, , , , , , IG 432 State-HOPTR 34, % 34, , , , , IG 434 Peace Officers Standards & Training - 1.0% 26, IG 436 Other State Revenues 151, % 75, , , , , , IG 437 County Grants 25, % (23,000.00) (25,000.00) IG 438 Federal Grants 134, % 134, , , , , IG 439 Other Intergovernmental Revenue 13, % 13, , , , , SCC 441 General Government 240, % (6,000.00) 247, , , , , SCC 442 Zoning & Subdivision 191, % 197, , , , , SCC 443 Plan Checking Fees 186, % 16, , , , , , SCC 444 Engineering Fees, Inspections & Other 97, % 10, , , , , , , SCC 447 Parks & Recreation 2,023, % (83,155.00) (12,844.00) 2,091, ,174, ,261, ,352, ,446, SCC 448 Police Services 99, % 12, (3,850.00) 98, , , , , SCC 449 Other Service Charges 82, % 43, , , , , , , F 451 Fines & Forfeitures 220, % (20,000.00) 1, , , , , , F 452 Code Enforcement Fines 200, % 202, , , , , F 453 Parking Fines 90, % 70, , , , , , F 455 Penalties 15, % 7, , , , , , UM 461 Investment Earnings 110, % (10,000.00) 111, , , , , UM 462 Rents 430, % 41, (18,766.00) 415, , , , , UM 471 Sale of Property 1, % (1,500.00) 1, , , , , UM 472 Insurance/Litigation Settlements - 1.0% M 475 Private Donations/Contributions 13, % 13, , , , , M 477 Miscellaneous Reimbursements 29, % 21, (15,500.00) 13, , , , , M 478 Bad Debt Writeoffs % M 480 Other 17, % 4, , , , , , TI Operating Transfers In Clean Stormwater 75, % 75, , , , , TI Operating Transfers In Subdivision Park Trust % TI Operating Transfers In Gas Tax 817, % 817, , , , , TI Operating Transfers In Development Impact Fees 34, % (31,000.00) 3, , , , TI Operating Transfers In NPFA 13, % 13, , , , , TI Operating Transfers In DIF - General Government Systems 45, % (45,000.00) (45,000.00) TI Operating Transfers In Hamilton Trust 375, % 100, , , , , , OF Other Financing Proceeds - OF Other Financing Sources - 7

8 Legend GL-Account Description 2017/2018 Amended Budget (Forecast Base) Growth Estimate Laddered Growth Estimate FY 17/18 Surplus Ongoing Additions / Reductions 2018/ / / / /2023 Total Revenue 37,700, , , ,688, ,732, ,896, ,228, ,522, ,688, MS Salaries - Miscellaneous 10,769, ,920, ,084, ,250, ,419, SS Salaries - Safety Tier 1 2,657, ,697, ,738, ,779, ,820, SS Salaries - Safety Tier 2 1,293, ,313, ,332, ,339, ,346, SS Salaries - Safety PEPRA 2,652, ,692, ,732, ,746, ,759, MS Healthcare - Misc 1,822, ,922, ,028, ,139, ,257, SS Healthcare - Safety 940, , ,046, ,103, ,164, MS Other Benefits - Misc 485, , , , , SS Other Benefits - Safety 916, , , , , MS Vacation / Admin Pay Outs - Misc 169, , , , , SS Vacation / Admin Pay Outs - Safety 162, , , , , MP PERS - Misc Normal Cost 948, ,026, ,142, ,159, ,177, SP PERS - Safety Tier 1 Normal Cost 496, , , , , SP PERS - Safety Tier 2 Normal Cost 227, , , , , SP PERS - Safety Tier PEPRA Normal Cost 321, , , , , MP PERS - Misc UAL 1,228, ,513, ,713, ,991, ,240, SP PERS - Safety Tier 1 UAL 1,283, ,618, ,871, ,185, ,452, SP PERS - Safety Tier 2 UAL , , , , SP PERS - Safety Tier PEPRA UAL 1, , , , , MS Overtime -Misc 33, , , , , SS Overtime -Safety 764, , , , , MS Hourly - Misc 674, , , , , SS Hourly - Police 91, , , , , Total Salaries $ 26,404, ,941, ,135, ,270, ,329, ,326, PS 600 Professional Services 2,022, % - 2,378, ,140, ,193, ,248, ,304, C 601 Contract Services-Intergovernmental 1,327, % (230,000.00) 1,153, ,398, ,203, ,233, ,338, T 610 Training & Travel 479, % - 516, , , , , S 615 Rentals & Leases 266, % - 269, , , , , ER Equipment Replacement Charges - Vehicles 628, % (128,000.00) 513, , , , , ER Equipment Replacement Charges - Equipment 105, % 33, , , , , , R 625 Repairs & Maintenance 815, % (180,000.00) - 868, , , , ,040, S 630 Materials & Supplies 970, % - 1,007, ,019, ,045, ,071, ,098, S 635 Dues & Publications 111, % (15,000.00) - 119, , , , , PS 640 Insurance 1,057, % (90,000.00) - 1,083, ,110, ,138, ,166, ,195, S 645 Notices & Advertising 54, % - 55, , , , , S 650 Printing & Duplicating 110, % (50,000.00) - 112, , , , , U 655 Utilites 1,030, % 105, , ,081, ,108, ,136, ,164, ,193, S 660 Applied Costs To/From (16,340.00) (80,000.00) 16, S 680 Capital Outlay >$5k - 100, O Special Program Expenses OPEB-Retiree Medical 99, % - 104, , , , , O Special Program Expenses OPEB-Required Contribution 227, % - 239, , , , , O Special Program Expenses OPEB-Administration Fees 3, % - 3, , , , , S 685 Special Program Expenses 322, % 40, , , , , , TO Operating Transfers Out Facilities Long-Term Maint 400, % (100,000.00) 307, , , , , TO Operating Transfers Out Infrastructure Long-Term Maint 586, % (100,000.00) 499, , , , , TO Operating Transfers Out PD Special Projects 7, % - 7, , , , , TO Operating Transfers Out Capital Projects 448, % (248,758.00) (248,758.00) 200, TOPOB Operating Transfers Out POB Debt Service 1,270, ,388, ,436, ,490, ,542, ,604, TO Operating Transfers Out Equipment Replacement 462, % 462, , , , , Other Financing Uses - Total Non Salary Expenditures 12,788, (418,758.00) (732,418.00) 12,852, ,879, ,021, ,397, ,866, $ (1,269,378.00) 8

9 City Salary & CalPERS Assumptions 2018/ / / / /23 Salaries - Miscellaneous $ 10,519, % 1.50% 1.50% 1.50% Salaries - Safety Tier 1 $ 2,657, % 1.50% 1.50% 1.50% Salaries - Safety Tier 2 $ 1,293, % 1.50% 1.50% 1.50% Salaries - Safety PEPRA $ 2,652, % 1.50% 1.50% 1.50% Healthcare - Misc $ 1,822, % 5.50% 5.50% 5.50% Healthcare - Safety $ 940, % 5.50% 5.50% 5.50% Other Benefits - Misc $ 485, % 1.50% 1.50% 1.50% Other Benefits - Safety $ 916, % 1.50% 1.50% 1.50% Vacation / Admin Pay Outs - Misc $ 169, % 1.50% 1.50% 1.50% Vacation / Admin Pay Outs - Safety $ 162, % 1.50% 1.50% 1.50% PERS - Misc Employer Normal Cost Rate 9.02% 9.40% 10.31% 10.31% 10.31% PERS - Misc Employer Contribution $ 948, $ 1,026, $ 1,142, $ 1,159, $ 1,177, PERS - Misc Unfunded Accrued Amortizated Liability $ 1,228, $ 1,513, $ 1,713, $ 1,991, $ 2,240, PERS - Safety Tier 1 Employer Normal Cost Rate 18.68% 19.50% 21.10% 21.10% 21.10% PERS - Safety Tier 1 Employer Contribution $ 496, $ 526, $ 577, $ 586, $ 595, PERS - Safety Tier 1 Unfunded Accrued Amortized Liability $ 1,283, $ 1,618, $ 1,871, $ 2,185, $ 2,452, PERS - Safety Tier 2 Employer Normal Cost Rate 17.61% 18.40% 19.90% 19.90% 19.90% PERS - Safety Tier 2 Employer Contribution Rate $ 227, $ 241, $ 265, $ 266, $ 267, PERS - Safety Tier 2 Unfunded Accrued Amortized Liability $ $ 2, $ 4, $ 7, $ 10, PERS - Safety PEPRA Employer Normal Cost Rate 12.14% 12.40% 13.10% 13.10% 13.10% PERS - Safety PEPRA Employer Contribution Rate $ 321, $ 333, $ 357, $ 359, $ 361, PERS - Safety PEPRA Unfunded Accrued Amortized Liability $ 1, $ 3, $ 7, $ 12, $ 16, Merit / COLA Adjustment 1.5% 9

10 Attachment 1-2% COLA J-12.1a City of Novato - Five Year General Fund Financial Forecast FY17/18 Amended Budget Forecast 2017/ / / / / /2023 Revenues 36,340,155 38,269,783 39,336,278 40,515,067 41,806,142 43,142,380 Transfers In 1,359,935 1,418,675 1,396,536 1,381,100 1,422,500 1,380,500 TOTAL REV'S & TRANSFERS IN 37,700,090 39,688,458 40,732,814 41,896,167 43,228,642 44,522,880 Expenditures 36,018,634 39,318,466 40,919,711 42,387,743 43,972,285 45,594,299 Position Vacancy / Savings Factor (650,000) (650,000) (650,000) (650,000) (650,000) (650,000) Current Year Budget Amendments (54,459) Transfers Out 3,174,853 1,475,588 1,307,303 1,339,810 1,373,130 1,407,284 TOTAL EXP'S & TRANSFERS OUT 38,489,028 40,144,054 41,577,014 43,077,553 44,695,416 46,351,583 Interfund Loan Repayment 463,938 Use of FY16/17 Surplus 325,000 Use of FY17/18 Surplus 750, % Inflation Factor 309,000 Operating Surplus / (Deficit) - 603,403 (844,200) (1,181,387) (1,466,773) (1,828,703) Deficit as % of Revenue 0.0% -1.5% 2.1% 2.8% 3.4% 4.1% Beginning Reserve Fund Balance 5,839,834 5,839,834 6,443,237 5,599,037 4,417,651 2,950,878 Ending Reserve Fund Balance 5,839,834 6,443,237 5,599,037 4,417,651 2,950,878 1,122, % 13.68% 10.42% 6.71% 2.46% Millions Novato Five-Year General Fund Forecast / / / / / /2023 Forecast Revenues Forecast Expenditures 10

11 Description 2017/2018 Amended Budgeted Growth Assumptions 2018/ / / / /2023 Property Tax 9,227, % 9,596, ,980, ,379, ,794, ,226, Secured Property Taxes In Lieu VLF 4,776, % 5,020, ,220, ,429, ,646, ,872, Real Property Tax 358, % 362, , , , , Sales & Use Tax 8,631, % 9,607, ,847, ,093, ,345, ,604, Measure C 2,584, % 2,648, ,714, ,782, ,852, ,923, Sales & Use Tax Public Safety Sales Tax 460, % 471, , , , , Transient Occupancy Tax 1,768, % ~5% 1,786, ,804, ,822, ,913, ,009, Business Licenses 1,218, % 1,249, ,280, ,312, ,345, ,379, Franchise Fees Cable Television 1,098, % 1,125, ,153, ,182, ,211, ,242, Franchise Fees PG&E 635, % 641, , , , , Licenses and Permits 1,152, % 1,175, ,199, ,222, ,247, ,272, Intergovernmental 381, % 434, , , , , Charges for Services 2,920, % ~ 4% 3,046, ,161, ,279, ,402, ,530, Fines and Forfeitures 525, % 532, , , , , Uses of Money 541, % 528, , , , , Miscellaneous 60, % 44, , , , , Operating Transfers In 1,359, ,418, ,396, ,381, ,422, ,380, Total Revenue 37,700, ,688, ,732, ,896, ,228, ,522, Salaries & Benefits - Miscellaneous 12,141, Refer to CalPERS Assumptions 13,954, ,333, ,735, ,150, ,579, Salaries & Benefits - Safety 10,538, Refer to CalPERS Assumptions 9,478, ,726, ,982, ,163, ,349, CalPERS Pension Costs - Miscellaneous 1,520, Refer to CalPERS Assumptions 2,177, ,549, ,879, ,185, ,465, CalPERS Pension Costs - Safety 2,204, Refer to CalPERS Assumptions 2,331, ,737, ,108, ,448, ,740, Total Salaries 26,404, ,941, ,347, ,706, ,948, ,134, Professional Services 3,079, % 3,461, ,250, ,332, ,415, ,500, Contracts 1,327, % 1,153, ,398, ,203, ,233, ,338, Training 479, % 516, , , , , Equipment Replacement 733, % 658, , , , , Repairs & Maintenance 815, % 868, , , , ,040, Material & Supplies 1,819, % 1,899, ,930, ,974, ,019, ,065, Other Post Employment Benefit 329, % 347, , , , , Utilities 1,030, % 1,081, ,108, ,136, ,164, ,193, Transfers Out (Pension Obligation Bonds Debt Service) 1,270, ,388, ,436, ,490, ,542, ,604, Transfers Out 1,904, ,475, ,307, ,339, ,373, ,407, Expenditure Subtotal 12,788, ,852, ,879, ,021, ,397, ,866, Total Expenditures 39,193, ,794, ,227, ,727, ,345, ,001, Total Net Revenue (1,493,397.00) (1,105,596.70) (1,494,199.82) (1,831,386.64) (2,116,773.24) (2,478,703.42) 11

12 Legend GL-Account Description 2017/2018 Amended Budget (Forecast Base) Growth Estimate Laddered Growth Estimate FY 17/18 Surplus Ongoing Additions / Reductions 2018/ / / / /2023 Total Revenue 37,700, , , ,688, ,732, ,896, ,228, ,522, ,688, MS Salaries - Miscellaneous 10,769, ,028, ,303, ,586, ,876, SS Salaries - Safety Tier 1 2,657, ,724, ,792, ,862, ,933, SS Salaries - Safety Tier 2 1,293, ,326, ,359, ,365, ,372, SS Salaries - Safety PEPRA 2,652, ,718, ,786, ,800, ,814, MS Healthcare - Misc 1,822, ,922, ,028, ,139, ,257, SS Healthcare - Safety 940, , ,046, ,103, ,164, MS Other Benefits - Misc 485, , , , , SS Other Benefits - Safety 916, , , , ,011, MS Vacation / Admin Pay Outs - Misc 169, , , , , SS Vacation / Admin Pay Outs - Safety 162, , , , , MP PERS - Misc Normal Cost 948, ,036, ,165, ,194, ,224, SP PERS - Safety Tier 1 Normal Cost 496, , , , , SP PERS - Safety Tier 2 Normal Cost 227, , , , , SP PERS - Safety Tier PEPRA Normal Cost 321, , , , , MP PERS - Misc UAL 1,228, ,513, ,713, ,991, ,240, SP PERS - Safety Tier 1 UAL 1,283, ,618, ,871, ,185, ,452, SP PERS - Safety Tier 2 UAL , , , , SP PERS - Safety Tier PEPRA UAL 1, , , , , MS Overtime -Misc 33, , , , , SS Overtime -Safety 764, , , , , MS Hourly - Misc 674, , , , , SS Hourly - Police 91, , , , , Total Salaries $ 26,404, ,941, ,347, ,706, ,948, ,134, PS 600 Professional Services 2,022, % - 2,378, ,140, ,193, ,248, ,304, C 601 Contract Services-Intergovernmental 1,327, % (230,000.00) 1,153, ,398, ,203, ,233, ,338, T 610 Training & Travel 479, % - 516, , , , , S 615 Rentals & Leases 266, % - 269, , , , , ER Equipment Replacement Charges - Vehicles 628, % (128,000.00) 513, , , , , ER Equipment Replacement Charges - Equipment 105, % 33, , , , , , R 625 Repairs & Maintenance 815, % (180,000.00) - 868, , , , ,040, S 630 Materials & Supplies 970, % - 1,007, ,019, ,045, ,071, ,098, S 635 Dues & Publications 111, % (15,000.00) - 119, , , , , PS 640 Insurance 1,057, % (90,000.00) - 1,083, ,110, ,138, ,166, ,195, S 645 Notices & Advertising 54, % - 55, , , , , S 650 Printing & Duplicating 110, % (50,000.00) - 112, , , , , U 655 Utilites 1,030, % 105, , ,081, ,108, ,136, ,164, ,193, S 660 Applied Costs To/From (16,340.00) (80,000.00) 16, S 680 Capital Outlay >$5k - 100, O Special Program Expenses OPEB-Retiree Medical 99, % - 104, , , , , O Special Program Expenses OPEB-Required Contribution 227, % - 239, , , , , O Special Program Expenses OPEB-Administration Fees 3, % - 3, , , , , S 685 Special Program Expenses 322, % 40, , , , , , TO Operating Transfers Out Facilities Long-Term Maint 400, % (100,000.00) 307, , , , , TO Operating Transfers Out Infrastructure Long-Term Maint 586, % (100,000.00) 499, , , , , TO Operating Transfers Out PD Special Projects 7, % - 7, , , , , TO Operating Transfers Out Capital Projects 448, % (248,758.00) (248,758.00) 200, TOPOB Operating Transfers Out POB Debt Service 1,270, ,388, ,436, ,490, ,542, ,604, TO Operating Transfers Out Equipment Replacement 462, % 462, , , , , Other Financing Uses - Total Non Salary Expenditures 12,788, (418,758.00) (732,418.00) 12,852, ,879, ,021, ,397, ,866, $ (1,269,378.00) 12

13 Legend GL-Account Description 2017/2018 Amended Budget (Forecast Base) Growth Estimate Laddered Growth Estimate FY 17/18 Surplus Ongoing Additions / Reductions 2018/ / / / /2023 PT 401 Secured Property Taxes 8,869, % (96,370.00) 9,224, ,593, ,976, ,376, ,791, PT 402 Unsecured Property Taxes 138, % (3,500.00) 144, , , , , PT 403 Supplemental Property Tax 210, % (38,200.00) 218, , , , , PT 409 Special Assessments 4, % 13, , , , , , VLF Secured Property Taxes In Lieu VLF 4,776, % 57, , ,020, ,220, ,429, ,646, ,872, RPT 410 Real Property Transfer Tax 358, % (28,500.00) 362, , , , , ST 411 Sales & Use Tax 8,631, % 690, , ,607, ,847, ,093, ,345, ,604, STC Measure C 2,584, % 15, ,648, ,714, ,782, ,852, ,923, ST Sales & Use Tax Public Safety Sales Tax 460, % 10, , , , , , TOT 413 Hotel Tax 1,768, % 5.00% (18,900.00) 1,786, ,804, ,822, ,913, ,009, BL 414 Business Licenses 1,218, % 31, ,249, ,280, ,312, ,345, ,379, FFC Franchise Fees Cable Television 1,098, % (3,000.00) 1,125, ,153, ,182, ,211, ,242, FFPGE Franchise Fees PG&E 635, % 40, , , , , , PT 417 Residential Development Tax 5, % (500.00) 5, , , , , P 421 Construction Permits 1,115, % 134, ,138, ,160, ,183, ,207, ,231, P 4222 Police Permits 21, % 12, , , , , , P 429 Other Permits 15, % (2,000.00) 15, , , , , IG 431 State-Motor Vehicle in Lieu 23, % 5, , , , , , IG 432 State-HOPTR 34, % 34, , , , , IG 434 Peace Officers Standards & Training - 1.0% 26, IG 436 Other State Revenues 151, % 75, , , , , , IG 437 County Grants 25, % (23,000.00) (25,000.00) IG 438 Federal Grants 134, % 134, , , , , IG 439 Other Intergovernmental Revenue 13, % 13, , , , , SCC 441 General Government 240, % (6,000.00) 247, , , , , SCC 442 Zoning & Subdivision 191, % 197, , , , , SCC 443 Plan Checking Fees 186, % 16, , , , , , SCC 444 Engineering Fees, Inspections & Other 97, % 10, , , , , , , SCC 447 Parks & Recreation 2,023, % (83,155.00) (12,844.00) 2,091, ,174, ,261, ,352, ,446, SCC 448 Police Services 99, % 12, (3,850.00) 98, , , , , SCC 449 Other Service Charges 82, % 43, , , , , , , F 451 Fines & Forfeitures 220, % (20,000.00) 1, , , , , , F 452 Code Enforcement Fines 200, % 202, , , , , F 453 Parking Fines 90, % 70, , , , , , F 455 Penalties 15, % 7, , , , , , UM 461 Investment Earnings 110, % (10,000.00) 111, , , , , UM 462 Rents 430, % 41, (18,766.00) 415, , , , , UM 471 Sale of Property 1, % (1,500.00) 1, , , , , UM 472 Insurance/Litigation Settlements - 1.0% M 475 Private Donations/Contributions 13, % 13, , , , , M 477 Miscellaneous Reimbursements 29, % 21, (15,500.00) 13, , , , , M 478 Bad Debt Writeoffs % M 480 Other 17, % 4, , , , , , TI Operating Transfers In Clean Stormwater 75, % 75, , , , , TI Operating Transfers In Subdivision Park Trust % TI Operating Transfers In Gas Tax 817, % 817, , , , , TI Operating Transfers In Development Impact Fees 34, % (31,000.00) 3, , , , TI Operating Transfers In NPFA 13, % 13, , , , , TI Operating Transfers In DIF - General Government Systems 45, % (45,000.00) (45,000.00) TI Operating Transfers In Hamilton Trust 375, % 100, , , , , , OF Other Financing Proceeds - OF Other Financing Sources - 13

14 City Salary & CalPERS Assumptions 2018/ / / / /23 Salaries - Miscellaneous $ 10,519, % 2.50% 2.50% 2.50% Salaries - Safety Tier 1 $ 2,657, % 2.50% 2.50% 2.50% Salaries - Safety Tier 2 $ 1,293, % 2.50% 2.50% 2.50% Salaries - Safety PEPRA $ 2,652, % 2.50% 2.50% 2.50% Healthcare - Misc $ 1,822, % 5.50% 5.50% 5.50% Healthcare - Safety $ 940, % 5.50% 5.50% 5.50% Other Benefits - Misc $ 485, % 2.50% 2.50% 2.50% Other Benefits - Safety $ 916, % 2.50% 2.50% 2.50% Vacation / Admin Pay Outs - Misc $ 169, % 2.50% 2.50% 2.50% Vacation / Admin Pay Outs - Safety $ 162, % 2.50% 2.50% 2.50% PERS - Misc Employer Normal Cost Rate 9.02% 9.40% 10.31% 10.31% 10.31% PERS - Misc Employer Contribution $ 948, $ 1,036, $ 1,165, $ 1,194, $ 1,224, PERS - Misc Unfunded Accrued Amortizated Liability $ 1,228, $ 1,513, $ 1,713, $ 1,991, $ 2,240, PERS - Safety Tier 1 Employer Normal Cost Rate 18.68% 19.50% 21.10% 21.10% 21.10% PERS - Safety Tier 1 Employer Contribution $ 496, $ 531, $ 589, $ 603, $ 619, PERS - Safety Tier 1 Unfunded Accrued Amortized Liability $ 1,283, $ 1,618, $ 1,871, $ 2,185, $ 2,452, PERS - Safety Tier 2 Employer Normal Cost Rate 17.61% 18.40% 19.90% 19.90% 19.90% PERS - Safety Tier 2 Employer Contribution Rate $ 227, $ 243, $ 270, $ 271, $ 273, PERS - Safety Tier 2 Unfunded Accrued Amortized Liability $ $ 2, $ 4, $ 7, $ 10, PERS - Safety PEPRA Employer Normal Cost Rate 12.14% 12.40% 13.10% 13.10% 13.10% PERS - Safety PEPRA Employer Contribution Rate $ 321, $ 337, $ 365, $ 366, $ 368, PERS - Safety PEPRA Unfunded Accrued Amortized Liability $ 1, $ 3, $ 7, $ 12, $ 16, Merit / COLA Adjustment 2.5% 14

15 City of Novato - Five Year General Fund Financial Forecast Attachment 1-3% COLA FY17/18 Amended Budget Forecast 2017/ / / / / /2023 Revenues 36,340,155 38,269,783 39,336,278 40,515,067 41,806,142 43,142,380 Transfers In 1,359,935 1,418,675 1,396,536 1,381,100 1,422,500 1,380,500 J-12.1b TOTAL REV'S & TRANSFERS IN 37,700,090 39,688,458 40,732,814 41,896,167 43,228,642 44,522,880 Expenditures 36,018,634 39,318,466 41,131,757 42,828,124 44,601,997 46,424,374 Position Vacancy / Savings Factor (650,000) (650,000) (650,000) (650,000) (650,000) (650,000) Current Year Budget Amendments (54,459) Transfers Out 3,174,853 1,475,588 1,307,303 1,339,810 1,373,130 1,407,284 TOTAL EXP'S & TRANSFERS OUT 38,489,028 40,144,054 41,789,059 43,517,934 45,325,128 47,181,657 Interfund Loan Repayment 463,938 Use of FY16/17 Surplus 325,000 Use of FY17/18 Surplus 750, % Inflation Factor 309,000 Operating Surplus / (Deficit) - 603,403 (1,056,245) (1,621,767) (2,096,485) (2,658,778) Deficit as % of Revenue 0.0% -1.5% 2.6% 3.9% 4.8% 6.0% Beginning Reserve Fund Balance 5,839,834 5,839,834 6,443,237 5,386,992 3,765,225 1,668,740 Ending Reserve Fund Balance 5,839,834 6,443,237 5,386,992 3,765,225 1,668,740 (990,038) 16.39% 13.10% 8.79% 3.74% -2.13% Millions Novato Five-Year General Fund Forecast / / / / / /2023 Forecast Revenues Forecast Expenditures 15

16 Description 2017/2018 Amended Budgeted Growth Assumptions 2018/ / / / /2023 Property Tax 9,227, % 9,596, ,980, ,379, ,794, ,226, Secured Property Taxes In Lieu VLF 4,776, % 5,020, ,220, ,429, ,646, ,872, Real Property Tax 358, % 362, , , , , Sales & Use Tax 8,631, % 9,607, ,847, ,093, ,345, ,604, Measure C 2,584, % 2,648, ,714, ,782, ,852, ,923, Sales & Use Tax Public Safety Sales Tax 460, % 471, , , , , Transient Occupancy Tax 1,768, % ~5% 1,786, ,804, ,822, ,913, ,009, Business Licenses 1,218, % 1,249, ,280, ,312, ,345, ,379, Franchise Fees Cable Television 1,098, % 1,125, ,153, ,182, ,211, ,242, Franchise Fees PG&E 635, % 641, , , , , Licenses and Permits 1,152, % 1,175, ,199, ,222, ,247, ,272, Intergovernmental 381, % 434, , , , , Charges for Services 2,920, % ~ 4% 3,046, ,161, ,279, ,402, ,530, Fines and Forfeitures 525, % 532, , , , , Uses of Money 541, % 528, , , , , Miscellaneous 60, % 44, , , , , Operating Transfers In 1,359, ,418, ,396, ,381, ,422, ,380, Total Revenue 37,700, ,688, ,732, ,896, ,228, ,522, Salaries & Benefits - Miscellaneous 12,141, Refer to CalPERS Assumptions 13,954, ,448, ,970, ,514, ,078, Salaries & Benefits - Safety 10,538, Refer to CalPERS Assumptions 9,478, ,803, ,140, ,363, ,595, CalPERS Pension Costs - Miscellaneous 1,520, Refer to CalPERS Assumptions 2,177, ,559, ,902, ,221, ,513, CalPERS Pension Costs - Safety 2,204, Refer to CalPERS Assumptions 2,331, ,748, ,132, ,478, ,777, Total Salaries 26,404, ,941, ,559, ,146, ,577, ,964, Professional Services 3,079, % 3,461, ,250, ,332, ,415, ,500, Contracts 1,327, % 1,153, ,398, ,203, ,233, ,338, Training 479, % 516, , , , , Equipment Replacement 733, % 658, , , , , Repairs & Maintenance 815, % 868, , , , ,040, Material & Supplies 1,819, % 1,899, ,930, ,974, ,019, ,065, Other Post Employment Benefit 329, % 347, , , , , Utilities 1,030, % 1,081, ,108, ,136, ,164, ,193, Transfers Out (Pension Obligation Bonds Debt Service) 1,270, ,388, ,436, ,490, ,542, ,604, Transfers Out 1,904, ,475, ,307, ,339, ,373, ,407, Expenditure Subtotal 12,788, ,852, ,879, ,021, ,397, ,866, Total Expenditures 39,193, ,794, ,439, ,167, ,975, ,831, Total Net Revenue (1,493,397.00) (1,105,596.70) (1,706,245.36) (2,271,767.14) (2,746,485.29) (3,308,777.84) 16