City of Placerville California February 8, 2011

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Jodie Wilcox
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1 City of Placerville California February 8,

2 Introduction Recap budget challenges Review City s economic environment Focus on the General Fund Discuss 2010/2011 year-to-date results Consider budgetary options & recommendations Enterprise Fund Update 2

3 Budget Challenges Began General Fund budget development process with an estimated $217,873 deficit Fourth consecutive year of declining revenues Budget Balancing Measures $100,000 Transfer from the Transportation Fund to support Dura Patcher Machine Activities Trimmed line items in each department Deferred all capital outlay line items Conference, training, and travel line items were minimized to certificate renewal and health and safety type expenses only Minimized overtime budgets to a level accommodating health and safety related events only 3

4 Budget Challenges (Continued) Budget Balancing Measures (Continued) Reduced janitorial service costs Assumed closure of Aquatics Center September 2010 City Employees were instrumental in achieving a balanced budget while keeping the City running smoothly Froze all existing vacant positions Deferred salary study adjustments and COLA Continued 10% salary reduction for City Council and all employees Implemented second round of early retirement incentives (two employees) 4

5 Budget Challenges (Continued) Budget Balancing Measures (Continued) Pursued reimbursements for State mandated costs The City Council adopted the Fiscal Year 2010/2011 Operating Budget in August 2010 General Fund Budget Balanced and totaled $6,442,608 Maintains essential program delivery to the greatest extent possible Purchased 21 desktop computers for the Police Department with the Homeland Security Grant ($13,188) Plan on exercising $24,248 Edward Byrne JAG Grant to purchase new patrol vehicle 5

6 Economic Environment Local Economic Indicators Reveal a stagnant Local Economy: Unemployment rates remains high 12.7% in El Dorado County (December 2010) which is static since November 12.5% in Sacramento-Arden-Arcade-Roseville MSA (December 2010) down from 12.6% in November Unemployment rates have changed slightly over the past twelve months State unemployment rate is 12.3% (December 2010) 6

7 Economic Environment (Cont.) Recreation Program Attendance From June to July June to July 2009 June to July 2010 Increase/- % Increase/- Decrease Decrease Program Gold Bug Park Gold Bug Daily Tours 3,583 3, % Gold Bug Group Tours % Total 4,263 4, % Aquatics Lap Swim % Evening Public Swim 2,007 1, % Wading Pool 1,468 1, % Public Swim 7,471 7, % Water Exercise % Extended Day 2,891 2, % Swim Lessons 1, % Jr. Lifeguard Camp % Pool Rentals % Total 16,004 15, % Special Interest Classes & Camps Youth Camps % Adult Special Interest % Youth Special Interest % Total % Adult Sports Basketball Teams (3 on 3) % Basketball Teams (5 on 5) % Softball Teams % Volleyball Teams % Total % 7

8 Economic Environment (Cont.) Building Division Activity Description 7/1/07 1/31/08 7/1/08 1/31/09 7/1/09 1/31/10 7/1/10 1/31/11 Difference Percentage Difference Building Permits Issued % Plan Checks % 8

9 Economic Environment (Cont.) Building Division Revenues Actual 2009/2010 Actual as of 01/31/11 Forecasted 2010/2011 Construction Permits $99,622 $42,663 $65,000 Plan Check Fees $27,089 $24,053 $39,000 9

10 Economic Environment (Cont.) Engineering Division has experienced mixed results over the past seven months Fee Type July 1 to December 31, 2009 July 1 to December 31, 2010 Development Plan Checks 6 6 Development Permits 4 4 Grading Plan Checks 1 0 Grading Permits 2 0 Boundary Line Adjustment 0 0 Certificates of Compliance 1 0 Planned Development Overlay 0 0 Preliminary Plan Review 0 0 Site Plan Review 0 0 Tentative Parcel Map 0 0 Tentative Subdivision Map 0 0 Development T&M Accounts 4 8 Misc. Engineering Fees Encroachment Permits Annual Transportation Permits Transportation Permits

11 Economic Environment (Cont.) State projecting a $25.4 billion budget deficit through June 30, 2012 State COPS Grant and Booking Fee funding appear to be safe through 6/30/11 but uncertain after that Proposed elimination of redevelopment as we know it Anticipate State looking to cities and counties for other ways of balancing its budget 11

12 Economic Environment (Cont.) City is on the road to recovery However, the road is unpaved and rocky Fuel prices remain volatile While Wall Street enjoyed a brighter 2010, Main Street America continued its recovery at a much slower pace Job creation and productivity are key City continues to strive for business attraction/ retention and redevelopment 12

13 Economic Environment (Cont.) Sales Tax Most significant local economic indicator 48% of all General Fund revenues Between April and September 2010, Sales Tax revenues shrunk by $(17,138) or -1.19% compared to the same time last year Quarter ended June 30, 2010 Receipts up by $5,277 or 0.76% (year to year) Quarter ended September 30, 2010-Receipts down by $(22,415) or -2.98% (year to year) State BOE projects a year-to-year statewide increase of 5.1% for the quarter ended December

14 Economic Environment (Cont.) Sales Tax (Continued) Actual 4 th quarter results will be available in mid March Forecast Placerville s 4 th quarter growth at 0.86% BOE estimates a year-to-year Statewide increases of 3.9% and a 7% in the 1 st and 2nd quarters of 2011 respectively Forecast Placerville s 1 st and 2 nd quarter growth at -0.34% and 2.76% respectively Based on State estimates and current trends, staff forecasts Placerville s 10/11 Sales Tax will total $2,909,593 which is $(155,432) or -5.07% below Budget Projected receipts slightly above the 2000/2001 level 14

15 Economic Environment (Cont.) City of Placerville Sales Tax Sources As of September 30, 2010 Apparel Stores 15.62% 0.85% 5.84% 8.04% General Merchandise Stores Other Retail Stores 8.69% 7.20% Food Stores Eating & Drinking Places 18.85% 1.80% 12.90% Home Furnishing & Appliances Building Material & Farm Implements Auto Dealers & Auto Supplies Service Stations 20.22% All Other Outlets 15

16 Economic Environment (Cont.) 300, City of Placerville Sales Tax Comparison 2nd and 3rd Quarter 250, , , , , April to September 2010 April to September

17 Economic Environment (Cont.) City of Placerville Multi-Year Sales Tax Trend $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Actual Sales Tax Revenues Adjusted for Inflation $0 17

18 Focus on the General Fund Adopted Budget Forecast Under/(Over) Budget Revenues $ 6,442,608 $ 6,278,921 $ 163, % Expenditures 6,634,770 6,559,345 75, % Net Transfers In 192, ,162 - Revenues over (under) Expenditures $ - $ (88,262) 18

19 Focus on the General Fund (Cont.) Revenue Type Adopted Budget Forecast Over/(Under) Sales Tax $ 3,065,025 $ 2,909,593 $ (155,432) -5.07% All Other Taxes 782, ,169 (65,532) -8.37% Licenses & Permits 65,000 65, % Intergovernmental Revenues 916, ,354 (85,356) -9.31% Charges for Service 620, ,822 92, % Fines & Forfeitures 263, ,209 (18,991) -7.22% Use of Money & Property 52,523 49,024 (3,499) -6.66% Other Financing Sources 677, ,750 72, % Total revenues $ 6,442,608 $ 6,278,921 $ (163,687) -2.54% 19

20 Focus on the General Fund (cont.) As you can see, the City has made significant budgetary adjustments since 2007 in order to adapt to the new economy 2006/ /2011 Actual Forecast Increase (Decrease) Revenues $ 8,386,136 $ 6,278,921 $ (2,107,215) % Expenditures 8,173,119 6,559,345 (1,613,774) % Net Transfers In (111,821) 192,162 (303,983) % Revenues over (under) Expenditures $ 101,196 $ (88,262) 20

21 Focus on the General Fund (Cont.) Projected deficit based on current revenue and expenditure trends Assumes continuation of 10% pay cut through 6/30/11 Revenue shortfall primarily attributable to the projected $(155,432) shortfall Sales Tax receipts Assumes pay-as-you-go costs for GASB 45 Other Post Employment Benefits (OPEB) Annual Required Contribution (ARC) No contribution for future retiree medical insurance costs 21

22 Focus on the General Fund (Cont.) Staff will gather input from the City Council tonight and continue to analyze the Budget and available options Staff will return to the City Council in March with more analysis, including the 4 th quarter Sales Tax results, and recommendations for eliminating the budget deficit 22

23 Enterprise Fund Update Measure H was approved by voters last November Proceeds will be used to reduce water and/or wastewater rates Excess proceeds could be used to accelerate debt repayment and replace worn out lines City Council is in the process of forming a 5 person oversight committee to recommend uses for Measure H revenues and review related expenditures which will be addressed in a separate report tonight 23

24 Closing Comments City Council and management continue to operate the City in a prudent and responsible manner Staff anticipates City operating costs to be well within the existing operating budget at year-end 24

25 Conclusion Questions? Comments? That s all folks! 25

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