CITY OF MORENO VALLEY Neighborhood Budget Meeting. May 2013

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1 CITY OF MORENO VALLEY Neighborhood Budget Meeting May 2013

2 General Background Balance the General Fund Budget in FY 2013/14 Conduct Study Session Meetings Discuss unfunded liabilities and financial challenges Information posted on City website Review the Need for Surplus City Owned Property Augment Street Maintenance Budgets Within 1-2 Years Conduct Neighborhood Budget Meetings in each City Council District Study the Benefits and Potential for a Revenue Ballot Measure 2

3 CITY OF MORENO VALLEY Slow Growth in Major General Fund Revenue Sources May 2013

4 Financial Background City Has Had a Historically Low Tax Base Low Property Tax Base Post Prop. 13 City only receive 11% of the City s tax levy Still relatively new City only 50% built-out Most development has been residential 1% tax limit does not generate enough revenue to pay for services required Low Sales Tax Base due to: Bedroom Community commuters spend where they work Low employment base - no draw of commuters into the City to generate sales tax High unemployment affects spending within the City 4

5 General Fund Revenue Comparison to Similar Cities in the Region Population General Fund Percent of City (1/1/12) Per Capita Average Moreno Valley 196,495 $414 74% Corona 154,520 $702 Fontana 199,898 $475 Rancho Cucamonga 169,498 $522 Temecula 103,092 $535 Four City Average 156,752 $559 5

6 Third Quarter 2012 Comparison Sales Tax Comparison to Similar Cities in the Region Population (1/1/12) No. of Businesses Sales Tax Generated Avg. Sales Tax/Business Businesses per 1,000 pop. Sales Tax per 1,000 pop. Moreno Valley 196,495 2,772 3,223,702 1, ,406 Percent of Average % 61.59% 50.96% 82.15% 47.36% 37.95% Temecula 103,092 3,813 6,354,906 1, ,643 Corona 154,520 4,879 7,969,790 1, ,578 Rancho Cucamonga 169,498 4,393 5,362,449 1, ,637 Fontana 199,898 4,917 5,614,550 1, ,087 Total 627,008 18,002 25,301,695 5, ,945 Four City Average 156,752 4,501 6,325,424 1, ,236 Riverside 308,511 10,581 10,850,742 1, ,171 Perris 70,180 1,347 1,745,898 1, ,877 6

7 Annual Sales Taxes per Household $282 7

8 Annual Utility User Taxes per Household $ $ $ $ $ UUT per Household $ $ $ $

9 Annual Property Taxes Taxable Assessed Value $ 180,000 General Property Tax 1.00% Total Property Taxes 1,800 City of Moreno Valley 5.07% Moreno Valley Fire 5.88% Total % to GF 10.95% Total Property Taxes $ 197 9

10 Total Sources 10

11 CITY OF MORENO VALLEY Proposed Operating Budget FY 2013/14 and FY 2014/15 May 2013

12 GF Revenue Projections Fund/Component Unit FY 2013/14 FY 2014/15 Taxes: Property Tax $ 9,647,100 $ 9,803,900 Property Tax in lieu 13,640,000 13,890,000 Utility Users Tax 16,114,000 16,428,000 Sales Tax 15,570,000 16,420,000 Other Taxes 7,965,000 8,185,000 State Gasoline Tax Licenses & Permits 1,514,000 1,519,200 Intergovernmental 265, ,000 Charges for Services 8,869,395 8,977,274 Use of Money & Property 2,688,000 2,589,600 Fines & Forfeitures 601, ,500 Miscellaneous 51,400 51,400 Transfers In 914, ,790 Total Revenue Budget $ 77,839,933 $ 78,823,664 12

13 Projected Budget Before Proposed Reductions FY 2013/14 FY 2014/15 Projected Revenues $ 76.4 $ 78.2 Projected Expenditures $ 84.7 $ 87.9 Proposed Variance (Deficit) $ (8.3) $ (9.7) * in millions City Council provided direction to create a balanced budget for FY 2013/14 13

14 GF Proposed Reductions 13/14 & 14/15 FY 2013/14 FY 2014/15 Estimated General Fund Shortfall $ 8,253,118 $ 9,711,873 Proposed Reductions: Non Public Safety $ (1,233,807) $ (1,087,356) Total Non Public Safety Reductions $ (1,233,807) $ (1,087,356) Police Department Approved DEP Yr 2 Reduction carried forward (2,000,000) (2,000,000) Approved DEP Yr 3 Reductions (2,000,000) (2,000,000) New Adjustments to Close Deficit (2,044,461) (2,343,882) Total Police Reductions $ (6,044,461) $ (6,343,882) Fire Department Station 99 Closure (1,042,467) One Time Savings (794,405) New Adjustments to Close Deficit (246,842) (246,842) Total Fire Reductions $ (1,041,247) $ (1,289,309) Total Proposed Reductions $ (8,319,515) $ (8,720,547) Balance (savings vs (shortfall)) $ 66,397 $ (991,326) 14

15 Expenditure Reductions Reduce 25 Police Officers (181 to 156) Close Fire Station 99 (Morrison Park) ($1.1M) 2 Fire Apparatus Engineers 2 Fire Captains 2 Firefighter II Paramedics Non Public Safety Reductions City Manager: Eliminate Customer Service Assistant position City Attorney: 2 Deputy City Attorney positions Community & Economic Development: Eliminate Building Official position Eliminate Code Enforcement Div Mgr position Potentially Contract Library Services 15

16 GF Expenditure Projections Department FY 2013/14 FY 2014/15 City Council $ 616,632 $ 618,382 City Clerk 448, ,181 City Attorney 483, ,195 City Manager 1,318,957 1,325,216 Administrative Svcs 3,657,689 3,671,099 Community & Economic Dev 6,731,597 6,745,761 Financial & Mgmt Svcs 2,980,392 3,020,788 Fire 18,363,153 17,765,576 Police 37,939,734 39,911,963 Public Works 2,136,995 2,147,726 Non-Department 3,096,503 3,547,103 Total Expenditure Budget $ 77,773,536 $ 79,814,990 16

17 Proposed Budget After Proposed Reductions FY 2013/14 FY 2014/15 Proposed Revenues $ 77.8 $ 78.8 Proposed Expenditures $ 77.8 $ 79.8 Proposed Variance (Deficit) $ $ (1.0) * in millions City Council provided direction to create a balanced budget for FY 2013/14 17

18 Further Challenges Additional revenue source(s) needed or continued reductions will be necessary Service levels will continue to shrink Is 10% furlough sustainable? $900K/yr to the General Fund Suspension of Other Post-Retirement Employee Benefits; $450K/yr Increasing CalPERS retirement rates Available reserves: $22.7M; minimal level for $77M operating budget FY 2013/14 is balanced with proposed reductions but the deficit returns in FY 2014/15 ($991,000) 18

19 Other Major Funds Community Services District Successor Agency Housing Authority Special Revenue Funds Capital Projects Funds Enterprise Funds (Electric Utility) Internal Service Funds Debt Service Funds 19

20 Community Services District FY 2013/14 FY 2014/15 Revenues Property Tax $ 3,188,300 $ 3,233,300 Other Taxes 1,000,000 1,000,000 Charges for Services 11,437,031 11,441,112 Use of Money & Property 614, ,351 Fines & Forfeitures 50,000 50,000 Miscellaneous 20,100 20,100 Transfers In from General Fund 1,666,608 1,787,608 Transfers In from Non General Fund 276, ,000 Total Revenues $ 18,252,896 $ 18,313,471 Expenditures Library Services Fund (5010) 1,812,217 1,828,882 Zone A Parks Fund (5011) 9,148,506 8,941,044 Zone B Residential Street Lighting Fund (5012) 1,677,100 1,735,500 Zone C Arterial Street Lighting Fund (5110) 927, ,400 Zone D Standard Landscaping Fund (5111) 1,086,200 1,120,300 Zone E Extensive Landscaping Fund (5013) 2,481,783 2,535,783 Zone M Median Fund (5112) 281, ,144 CFD No. 1 (5113) 1,182,223 1,225,757 Zone S (5114) 66,017 68,017 Total Expenditures $ 18,663,690 $ 18,704,827 Net Change/Proposed Use of Fund Balance $ (410,794) $ (391,356) 20

21 Electric Utility FY 2013/14 FY 2014/15 Revenues Property Tax $ - $ - Charges for Services 18,915,548 19,285,102 Use of Money & Property 80,500 80,500 Miscellaneous 123, ,878 Transfers In from General Fund - - Transfers In from Non General Fund - - Total Revenues $ 19,119,536 $ 19,491,480 Expenditures Electric Utility - General 15,591,767 15,862, Public Purpose Program 721, , Taxable Lease Rev Bonds 1,835,144 1,830, Lease Revenue Bonds 322, ,263 Total Expenditures $ 18,470,974 $ 18,862,227 Net Change/Proposed Use of Fund Balance $ 648,562 $ 629,253 21

22 Further Challenges Additional revenue source(s) needed or continued reductions will be necessary Police Services DIF: negative fund balance of approximately; $3 million The General Fund acts as the backstop of last resort for cash flow, emergencies, grant matching and debt service payments MVU: One-time rate stabilization payment ($2.5M) due to ENCO by January 31, GF $2.6M reserved, if needed Successor Agency: If CA. Dept. of Finance denies payment of 2005 Lease Revenue Bonds debt services payments ($600k/yr through 2025), will become GF liability 22

23 CITY OF MORENO VALLEY Proposed Capital Improvement Plan FY 2013/14 Council District 1 May 2013

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27 CITY OF MORENO VALLEY Proposed Capital Improvement Plan FY 2013/14 Council District 2 May 2013

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31 CITY OF MORENO VALLEY Proposed Capital Improvement Plan FY 2013/14 Council District 3 May 2013

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35 CITY OF MORENO VALLEY Proposed Capital Improvement Plan FY 2013/14 Council District 4 May 2013

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39 CITY OF MORENO VALLEY Proposed Capital Improvement Plan FY 2013/14 Council District 5 May 2013

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43 Upcoming Actions March 5, 2013 Slow Growth in Major General Fund Revenue Sources March 19, 2013 Annual Increases in Public Safety Costs April 2, 2013 Unfunded Liabilities Public Employees Retirement System and Retiree Medical April 30, 2013 Presentation of the General Fund Budget May 7, 2013 Presentation of Non-General Fund Budgets May 13-18, 2013 Council District Budget Presentations May 21, 2013 Presentation of Capital Improvement Program June 4, 2013 Increased Demands on General Fund Reserves June 11, 2013 Proposed Adoption of the 2-Year Budget and CIP July 2, 2013 Unfunded Liabilities Compensated Absences and Other 43