Next Year: begin Budget Season Prepare Departmental Goals, Performance Measures & Budget Requests

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Malcolm West
6 years ago
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1 May 7, 2013

3 May: Current Year: Mid-Year Budget Review/ Adjustments Next Year: begin Budget Season Prepare Departmental Goals, Performance Measures & Budget Requests June: Finance compiles preliminary Budget and analysis July: New Administrative Services Director On Board Review of preliminary Budget with City Manager and Departments Review of preliminary Budget with Financial Sustainability Committee August: City Council Budget Work Sessions and review of preliminary Budget September: City Council Budget Adoption October 1 st : Fiscal Year begins

4 Budget preparation began May 2012 Global economists forecast modest improvements for 2012 / 2013 Election season impacted recovery efforts Unemployment still a factor Dissolution of redevelopment impacts Municipal bankruptcies increasing CA pushing realignment and scare-cuts to achieve support for tax initiative City staffing cuts at critical tipping point

5 Budget prep (May 2012) Shortfall projection began at $1.6M Scrubbed departmental budget Reorganization Eliminate several positions Created TOT auditor to capture lost revenue Reestablished Public Works Dept Final Budget adopted with projected shortfall of $700,000 Between October 2012 and March 2013 additional expenditures increased shortfall to $806k.

7 Quality Core Services Strategy Delivering services to meet demands Profit Centers (Building, Recreation) increased services Capital investment creating jobs Development applications have increased Approximately $20M in permit applications Demands on staff to meet expectations increased Capital Improvement Projects Highest workload, fewest staff Grant funded projects require timely reimbursement submittals Recreation getting an early start Golf course had earliest opening LV Commons staffing increased Boat ramp/launch and parking w/ TRCD

8 Projected increase $1,021,908 TOT up 26% over the same period last year Sales Tax up 13% Oct to Dec (year over year) but too early to determine impact Property taxes on target no change Revenue Description Amount TOT increase. The projected increase is Citywide TOT $533,000 El Dorado County over-collected property taxes. This is a one-time $102,491 payment. Building Fees for Commercial projects anticipated in the fiscal $260,000 year. Total amount expected is approximately $400,000, split between this fiscal year and next fiscal year (13/14). Boat Launch parking lot revenue to be offset by an Agreement with Tahoe $51,000 Resource Conservation District to manage the lot, boat launch and parking. Corrections Grant Funding for miscellaneous Police Department $56,000 expenses (offset by same amount in expenses). Parks and Recreation revenue (concessions and tent-cabin) $19,417 Revenue Adjustments $1,021,908

9 Projected increase $468,435 Focus: improving service deliver to support local economy. Temp staffing in Building, Dvlpment Services, CIP, permit processing, inspections, and Parks/Rec seasonal services Description Amount Salary savings vacant positions ($282k) and Parking reorganization ($165k) (447,000) Employee retirements, payouts, vacation sell bac k ($128k), Fire Dept OT & Training ($95); Engineering OT ($15k); PERs temp costs ($18k); Reclassifications/Reorg ($59k); Legal staffing vacancy ($50k); 365,000 Litigation: settlement of two cases and outside legal costs for three on-going cases. 126,000 Recreation: Campground Tree removal and purchase of tent cabins; pool supplies, pool roof repair 33,000 Ski-Run BID additional funding to cover Lawn Service in ,435 Legislative affairs (focus area: SB 630 & NV 271) 20,000 Engineering: Consultant for project management assistance 100,000 Temporary Staff for Summer 2013: Building /permit Inspections ($93,627), Parks and Recreation seasonal staffing ($106,684) and Human Resources part time admin assistance ($6,689) Corrections Grant Funding for miscellaneous Police Department expenses (offset by same amount in revenue) 207,000 56,000 Expense Adjustments 468,435

10 Fund Revenue (Increase)/Decrease Expense Increase/(Decrease) General Fund: 100 General Fund Amendments (1,021,908) 468,435 Other Funds: 201 Streets Fund (326,000) 326, Snow Removal 305,636 (305,636) 218 Vacation Home Rental - 31, Long-Term Building Projects (130,000) 280 Ski-Run BID (9,000) 9, Construction-in-Progress (CIP) (70,707) 70, Airport (17,872) 17, Code Enforcement (22,036) 29, Parking Beaches - 92, Motor Pool Fund (9,000) -

12 California Gov Brown gets the tax hike he wanted State revenues are up State income tax State Sales tax (initiative impact) Unemployment declines, but slowing CA, 9.4% EDC, 9.5% City, 13%

13 Nationally & State home sales sluggish, slowing recovery Locally, home sales improving due to low supply and high demand (highest gains since 2006) One of the benefits to slow/no growth restrictions Conservative estimate is property taxes will remain flat 10% 5% 0% 4% South Lake Tahoe: Median Home Sales (Mo-2-Mo) 2.00% 7.20% -5% -10% -15% -5.20% % -7.80% -20% -25% Sept Sept 2007 Aug % Oct 2009 Oct 2010 April % Mar 2013

14 Increases in TOT remain strong 26% over last year significant VHR TOT collections exceed expectations to date ($20k/1mo) Sales tax expected to increase throughout 2014 Voter initiative partially responsible Increase in tourism locally TJ Maxx, Big 5 Are we ready; are we investing in our economy? Latino population expected to be majority by 2020 Chinese leading spending in global tourism visitor numbers Outdoor recreation is Tahoe industry CA is marketing recreation/outdoors to CAN, AU, UK Recreation amenities, curb appeal missing ingredient Parks, Trails, and Recreation Master Plan expected to produce roadmap and investment strategy (ROI)

15 Economy still very dependant upon global impacts Employee Benefit costs continue to rise As revenues increase, they re often absorbed by expense increases PERS new policy changes expect to increase costs by as much as 20% to 40% over next 10 years Actuarial will provide detailed analysis for FY 13/14 budget Health Care Benefit costs We ve issued RFP to evaluate broker options Potential savings: Affordable Health Care Act

16 60.00% Tier % 40.00% 30.00% 20.00% 10.00% 0.00% Fire-Tier 1 Fire-Tier 2 Fire-Tier 3 Fire-Tier 4 Police-Tier 1 Police-Tier 2 Police-Tier 3 Police-Tier 4 Miscellaneous-Tier 1 Miscellaneous-Tier 2 Miscellaneous-Tier 3

17 $25,000 $20,000 Dependent Rate $15,000 $10,000 Single Rate $5,000 $

18 Some light in this tunnel? Affordable Health Care Act Approximately 780 lives covered by City 165 FTE active employees, plus dependants 145 Retirees, plus dependants Medicare Eligible retirees Medigap supplemental insurance provides a fully insured option Nationally available: Secured Horizon, AARP, Aetna, etc. Plans range from ZERO out of pocket, zero co-pays, to very low co-pays; Far better product and lower cost Has been available for many years, but not offered to City retirees AHCA / aka Obamacare same possibilities for early retirees Early Retirees (age 50-64) would be eligible Expected to function same as Medicare gap insurance Better product, lower deductibles & copays, lower cost If Retirees fully insured, active employee pool improved

19 Projected shortfall continuing due to rising costs of providing services, goods, contracts and employees Options: reduce services, increase revenue, build the Tahoe Brand to increase tourism Citizen survey demonstrates a continued expectation to do more: improve streets/roads, transportation, recreation, public safety Survey respondents overwhelming (70%-80%) support TOT and sales tax increase to pay for specific services Five-Year strategy should include Targeted investing in Recreation Tourism industry Utilize ROI to invest in infrastructure Maintain service levels for core functions Prioritize other services Reduce benefit expenses

20 REVENUES BY TYPE 2013 Mid Year Prop Tax 5,990,000 6,109,800 6,231,996 6,356,636 6,483,769 6,613,444 TOT 4,831,869 4,880,188 4,928,990 4,978,279 5,028,062 5,078,343 Sales Tax 3,870,000 4,075,285 4,095,661 4,116,140 4,136,720 4,157,404 Measure Q 2,020,000 2,137,000 2,147,685 2,158,423 2,169,216 2,180,062 Project Area TOT 4,265,000 4,307,650 4,350,727 4,394,234 4,438,176 4,482,558 Other 10,615,744 9,317,913 9,344,235 9,371,676 9,398,236 9,428,498 TOTAL Revenues 31,592,613 30,827,836 31,099,294 31,375,388 31,654,179 31,940,309 EXPENDITURES BY DEPT Police 8,279,210 8,482,704 8,591,166 8,688,132 8,786,546 8,888,931 Fire 4,952,599 4,884,618 4,963,059 5,054,451 5,149,010 5,246,879 Gen Fund Trans OUT 6,599,244 6,651,289 6,334,215 6,360,799 6,387,915 6,415,574 Comm Svc 2,467,758 2,428,262 2,440,567 2,453,910 2,448,556 2,462,090 Gen Gov 2,534,671 2,442,149 2,453,701 2,467,487 2,481,383 2,495,390 Finance 1,785,274 1,869,354 1,884,749 1,901,645 1,918,785 1,936,174 Misc Gen Fund 1,462,249 1,472,929 1,480,294 1,487,695 1,495,134 1,502,609 Dev Svc 1,213,920 1,126,822 1,133,545 1,140,666 1,147,856 1,155,116 Public Works 2,500,420 2,367,862 2,381,343 2,396,272 2,411,347 2,426,570 BASE Expenses (Includes Health Savings) 31,795,345 31,725,990 31,662,639 31,951,057 32,226,532 32,529,333 Other: - Vacancy Factor (200,000) (200,000) (200,000) (200,000) (200,000) COP Debt Svc on 2012 $5.7M 0 213, , , , ,875 TOTAL EXPENDITURES (A) 31,795,345 31,739,615 31,796,264 32,082,282 32,359,157 32,663,208 NET REVENUES before new Revenues (202,732) (911,779) (696,970) (706,894) (704,978) (722,899) New Planned Rev TOT Voter Initiative - 250,000 1,000,000 1,000,000 1,000,000 1,000,000 Redevelopment TOT Voter Initiative - 112, , , , ,000 NET REVENUES w/new Revenues (202,732) (549,279) 753, , , ,101

21 Tahoe s recreation, natural environment unparalleled tourist industry However, to compete effectively, south shore community must continue to work together and leverage resources effectively City spent last three years getting its house in order Budget shortfalls reduced to zero and positive cash flow FY 11/12 FY 12/13 on track to eliminate projected shortfall City Council has invested in infrastructure, adopted fair and equitable policies, improved contract compliance, and invested in comprehensive Recreation Master Plan City should continue to focus on core services, operating efficiently and develop long-term Financial Strategy for investing in tourism and infrastructure

CITY OF CULVER CITY FY Mid-Year Presentation

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