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Home My WebLink About01 - Study Session - Presentation - 11/12/2019FISCAL YEAR 2018-19 FINANCIAL RESULTS -AND- FISCAL YEAR 2019-20 1ST QUARTER UPDATE Study Session November 12, 2019 v v 2 OVERVIEW •Fiscal Year 2018-19 General Fund Financial Results and Projected Ending Fund Balance (Preliminary Unaudited) •Fiscal Year 2019-20 General Fund pacing through September 30, 2019 •Status of Deferred Items from Fiscal Year 2019-20 Budget •Next Steps v v 3FY 18/19 PRELIMINARY GENERAL FUND FINANCIAL RESULTS •Information is preliminary and subject to change – audit is still underway. •Budget vs. Actuals are more favorable than expected. •Fund Balance is expected to close out higher than expected. •Received large sum of one-time revenues which resulted in at least $2 million in excess revenues over budget. •Remain cautious as we begin reviewing FY 19/20 financials to better assess recurring vs. one-time revenue. v v 4 FY 18/19 Amended Budget FY 18/19 Preliminary Actuals FY 18/19 Positive/ (Negative) Variance Revenues Taxes Sales and Use Tax 61,969,937 64,902,009 2,932,072 Property Tax 42,958,877 42,873,901 (84,976) Transient Occupancy Tax 9,571,342 8,595,417 (975,925) Franchise Tax 5,054,219 5,042,551 (11,668) Business Tax 942,541 929,351 (13,190) Marijuana Gross Receipts Tax 1,560,000 163,803 (1,396,197) Licenses and Permits Marijuana Business Permits - 163,720 163,720 Other Licenses and Permits 3,445,541 3,220,638 (224,903) Fines and Forfeitures 1,554,770 1,851,890 297,120 Use of Money and Property 4,238,163 4,430,995 192,832 Other Government Agencies 667,411 785,617 118,206 Fees and Charges for Services Marijuana CUP - 302,588 302,588 Paramedic Transportation 3,000,000 3,048,986 48,986 Fees and Charges for Services 4,827,926 5,525,160 697,234 Other Revenues 1,958,177 1,965,854 7,677 Transfers In 40,000 41,287 1,287 Total Revenues 141,788,904 143,843,767 2,054,863 FY 18/19 PRELIMINARY FINANCIAL RESULTS REVENUES – BUDGET VS. ACTUALS One-time v v 5FY 18/19 PRELIMINARY FINANCIAL RESULTS EXPENDITURES – BUDGET VS. ACTUALS FY 18/19 Amended Budget FY 18/19 Preliminary Actuals FY 18/19 Positive/ (Negative) Variance Expenditures City Council $ 753,029 $ 667,505 $ 85,524 City Manager 10,043,686 9,738,974 304,711 City Attorney 1,170,015 1,170,015 - Finance 3,389,724 3,310,638 79,086 Parks and Community Services 7,339,959 6,611,825 728,134 Information Technology 3,743,745 3,226,849 516,896 Police 48,110,609 46,271,525 1,839,084 Fire 27,852,726 28,809,137 (956,411) Development Services 7,272,976 6,250,876 1,022,100 Public Services 19,435,120 18,561,083 874,036 Non-Departmental (1,013,075)3,037,092 (4,050,167) Total Operating Expenses $128,098,514 $127,655,519 $442,995 v v 6FY 18/19 PRELIMINARY FINANCIAL RESULTS TRANSFERS – BUDGET VS. ACTUALS FY 18/19 Amended Budget FY 18/19 Preliminary Actuals FY 18/19 Positive/ (Negative) Variance Transfers - Non-Capital $ 271,927 $ 271,927 $ - Transfers - Capital Improvement Project (CAN)8,576,902 8,576,902 - Transfers - IT Replacement Fund (LMS & ERP)1,731,074 1,731,074 - Transfers - 115 Trust Fund 1,750,000 1,750,000 - Transfers - Self Insurance Fund 3,290,812 3,290,812 - Total Transfers 15,620,715 15,620,715 - Transfers - Homeless Shelter Operating Costs 1,003,400 1,003,400 - Transfers - Capital Improvement Project (Shelter Acquisition)3,425,000 3,425,000 - Total Transfers for Homeless Shelter 4,428,400 4,428,400 - One-Time Transfers v v 7 FY 18/19 Amended Budget FY 18/19 Preliminary Actuals FY 18/19 Positive/ (Negative) Variance Beginning Fund Balance, July 1 $ 55,224,080 $ 55,224,080 $ - Total Revenues 141,788,904 143,843,767 2,054,863 Total Operating Expenses (128,098,514) (127,655,519) 442,995 Total Transfers (15,620,715) (15,620,715) - Operating Surplus/(Deficit) Before Shelter (1,930,325)567,533 2,497,858 Total Transfers for Homeless Shelter (4,428,400) (4,428,400) - Operating Surplus/(Deficit) After Shelter (6,358,725)(3,860,867)2,497,858 Ending Fund Balance, June 30 $ 48,865,355 $ 51,363,213 $2,497,858 FY 18/19 PRELIMINARY FINANCIAL RESULTS OPERATING SURPLUS/(DEFICIT) v v 8FY 18/19 PRELIMINARY FINANCIAL RESULTS GENERAL FUND - FUND BALANCE Committed Assigned Unassigned (F) TOTAL FUND BALANCE % Increase/ (Decrease) Declared Disasters (A) Self-Insurance (B) Economic (C) Compensated Absences (D) Police Retirement 1% Supp (D) OPEB (D) Non-Spendable (E) June 30, 2019 Est $ 51,363,213 -5%$ 14,125,000 $ 2,000,000 $ 7,500,000 $ 4,892,819 $ 2,297,253 $ -$ 280,194 $ 20,267,947 June 30, 2018 55,224,080 -14%14,125,000 2,000,000 6,000,000 4,354,527 2,376,305 -2,038,518 23,329,730 June 30, 2017 63,065,129 -2%14,125,000 2,000,000 4,500,000 4,010,752 2,527,726 4,280,610 2,253,843 30,867,198 June 30, 2016 64,472,461 20%14,125,000 2,000,000 3,000,000 4,107,428 2,766,672 3,946,563 2,486,085 32,040,713 June 30, 2015 53,815,951 7%14,125,000 2,000,000 1,500,000 4,036,221 2,166,823 3,622,775 4,165,795 22,199,337 June 30, 2014 50,200,326 10%14,125,000 2,000,000 -4,443,799 2,262,032 3,310,261 3,430,104 20,629,130 June 30, 2013 45,646,441 -5%14,125,000 2,000,000 -4,871,727 2,362,297 2,897,591 3,137,794 16,252,032 June 30, 2012 47,809,926 6%14,125,000 2,000,000 -5,435,878 2,440,991 2,470,935 12,872,213 8,464,909 June 30, 2011 45,275,530 9%14,125,000 2,000,000 -5,438,852 2,534,919 1,926,696 13,334,328 5,915,735 June 30, 2010 41,520,065 -15%14,125,000 2,895,045 -4,724,270 2,624,382 1,407,942 14,421,676 1,321,750 June 30, 2009 48,856,719 -26%14,125,000 3,346,808 -6,875,301 2,713,058 664,000 15,140,564 5,991,988 June 30, 2008 66,236,447 -10%14,125,000 3,006,249 -6,732,116 -6,000,000 15,768,661 20,604,421 June 30, 2007 73,384,067 3%14,125,000 10,579,069 -6,249,240 -7,000,000 16,326,310 19,104,448 June 30, 2006 70,937,168 2%14,125,000 11,007,121 -6,023,443 -6,500,000 12,744,220 20,537,384 June 30, 2005 69,832,354 13%14,125,000 11,900,385 -5,349,013 --13,227,236 25,230,720 June 30, 2004 61,600,230 3%14,125,000 11,900,385 -5,349,013 --13,225,005 17,000,827 June 30, 2003 59,819,921 N/A 14,125,000 9,539,622 ----13,579,931 22,575,368 v v 9 •Information is preliminary and subject to change – audit is still underway. •Budget vs. Actuals are more favorable than expected. •Fund Balance is expected to close out higher than expected. •Received large sum of one-time revenues which resulted in at least $2 million in excess revenues over budget. •Remain cautious as we begin reviewing FY 19/20 financials to better assess recurring vs. one-time revenue. FY 18/19 PRELIMINARY GENERAL FUND FINANCIAL RESULTS v v 10 FISCAL YEAR 2019-20 GENERAL FUND PACING THROUGH SEPTEMBER 30, 2019 v v 11 FY 19/20 Amended Budget FY 19/20 YTD as of 9/30/19 % Earned/ Spent Revenues Taxes Sales and Use Tax 59,854,856 5,101,572 9% Property Tax 43,246,886 734,823 2% Transient Occupancy Tax 9,619,199 1,739,291 18% Franchise Tax 5,166,745 -0% Business Tax 955,000 230,794 24% Marijuana Gross Receipts Tax 1,143,000 91,355 8% Licenses and Permits Marijuana Business Permits 64,575 43,050 67% Other Licenses and Permits 3,402,145 854,406 25% Fines and Forfeitures 1,623,244 381,311 23% Use of Money and Property 4,283,988 614,808 14% Other Government Agencies 438,600 47,915 11% Fees and Charges for Services Marijuana CUP 81,000 -0% Paramedic Transportation 3,400,000 1,155,439 34% Fees and Charges for Services 5,351,601 896,368 17% Other Revenues 1,920,064 1,316,963 69% Transfers In 1,150,000 1,150,440 100% Total Revenues 141,700,903 14,358,534 10% FY 19/20 GENERAL FUND PACING REVENUES - AS OF SEPTEMBER 30, 2019 v v 12FY 19/20 GENERAL FUND PACING EXPENDITURES - AS OF SEPTEMBER 30, 2019 FY 19/20 Amended Budget FY 19/20 YTD as of 9/30/19 % Earned/ Spent Expenditures City Council 768,216 214,278 28% City Manager 9,693,957 2,451,860 25% City Attorney 1,000,000 219,787 22% Finance 4,309,638 955,268 22% Parks and Community Services 7,340,458 1,897,309 26% Information Technology 3,665,497 1,168,352 32% Police 49,618,066 18,193,619 37% Fire 28,245,213 10,095,799 36% Development Services 7,195,106 2,041,461 28% Public Services 19,209,987 4,053,181 21% Non-Departmental 5,584,250 2,398,274 43% Total Operating Expenses 136,630,388 43,689,189 32% Transfers - Non-Capital -- Transfers - Capital Improvement Project (CAN)4,280,141 1,070,035 25% Transfers - Capital Improvement Project (Shelter Renovation)1,400,000 -0% Total Transfers 5,680,141 1,070,035 19% Total Expenditures 142,310,529 44,759,224 31% v v 13FY 19/20 GENERAL FUND POSSIBLE BUDGET ADJUSTMENTS AT MIDYEAR FY 19/20 Amended Budget FY 19/20 Possible Future Adjustments FY 19/20 Estimated Actuals Revenues Taxes Sales and Use Tax $ 59,854,856 $ 1,000,000 $ 60,854,856 Property Tax 43,246,886 -43,246,886 Transient Occupancy Tax 9,619,199 (600,000)9,019,199 Franchise Tax 5,166,745 -5,166,745 Business Tax 955,000 -955,000 Marijuana Gross Receipts Tax 1,143,000 (500,000)643,000 Licenses and Permits Marijuana Business Permits 64,575 64,575 129,150 Other Licenses and Permits 3,402,145 -3,402,145 Fines and Forfeitures 1,623,244 -1,623,244 Use of Money and Property 4,283,988 -4,283,988 Other Government Agencies 438,600 -438,600 Fees and Charges for Services Marijuana CUP 81,000 -81,000 Paramedic Transportation 3,400,000 -3,400,000 Fees and Charges for Services 5,351,601 120,000 5,471,601 Other Revenues 1,920,064 -1,920,064 Transfers In 1,150,000 -1,150,000 Total Revenues $ 141,700,903 $ 84,575 $ 141,785,478 v v 14 STATUS OF DEFERRED ITEMS FROM FISCAL YEAR 2019-20 BUDGET ADOPTION v v 15 Staffing Deferrals DEFERRED ITEMS - FY 19/20 BUDGET Department`Description Original Estimated Cost Ongoing Estimated Costs Finance Department FT Financial Analyst (new position)139,014 139,014 Information Technology Department FT Network Administrator - Eliminate PT Intern and PT Programmer Analyst and add this positon 8,570 36,686 Development Services Department FT Code Enforcement Officers (2) - Eliminate one PT Code Enforcement Officer and reclassifying two PT Code Enforcement Officers to full time 12,987 12,987 Estimated Cost to General Fund 160,571 188,687 v v 16 Staffing Deferrals - Recommendations DEFERRED ITEMS - FY 19/20 BUDGET Department Description Original FY 19/20 Estimated Cost Revised FY 19/20 Estimated Cost* Ongoing Estimated Costs Finance Department FT Financial Analyst FT Budget and Purchasing Manager –Already approved by Council on 11/5 139,014 -139,014 -106,093 212,186 Information Technology Department FT Network Administrator - Eliminate PT Intern and PT Programmer Analyst and add this positon 8,570 5,713 36,686 Development Services Department FT Code Enforcement Officers (2) - Eliminate one PT Code Enforcement Officer and reclassifying two PT Code Enforcement Officers to full time 12,987 8,658 12,987 Estimated Cost to General Fund 160,571 120,464 261,859 v v 17 Police Department Request List DEFERRED ITEMS - FY 19/20 BUDGET Description Estimate from Police Department Revised Estimate from PD/IT/ Finance Department Phase 1 FY 19/20 Recommendation Phase 2 FY 20/21 Recommendation Phase 3 FY 21/22 Recommendation Future Status 1 Mobile Command Vehicle 1,000,000 1,500,000 -180,000 180,000 1,440,000 Looking into grant opportunities and financing options. If approved, PD would create a team to evaluate all of the outfitting needed and the cost may increase since the previous estimates were over 3 years old. Once ordered, it will take 6 months before the City receives the completed unit. Payments would not begin until FY 20/21. If financed for 10 years, the total cost at the end of 10 years would be $1,800,000. 2 Extension of Telecommunications shop for MCV (CIP)220,000 220,000 -220,000 -This is anticipated to be included in FY 20/21 CIP budget but the total cost may change. 3 17 Vehicles 700,000 780,000 230,000 230,000 230,000 90,000 This represents a systematic replacement of the older vehicles in the fleet. The cost represents the replacement of 5 vehicles each year but may not include additional needs that are identified during each budget cycle. 4 L3 police car video system 450,000 783,520 783,520 --- If the MCV is financed, Finance recommends using the one-time money received in FY 18/19 from sales tax to pay for this. v v 18 Police Department Request List DEFERRED ITEMS - FY 19/20 BUDGET Description Estimate from Police Department Revised Estimate from PD/IT/ Finance Department Phase 1 FY 19/20 Recommendation Phase 2 FY 20/21 Recommendation Phase 3 FY 21/22 Recommendation Future Status 5 Police vehicle computers (MDCs)300,000 555,000 -555,000 -- Finance will review options with PD and the City Manager to determine if there is restricted funding sources available or one-time monies that can be used for this. 6 CCTV system in PD 60,000 Done ----PD has moved forward with this purchase using Asset Forfeiture Funds and will come to Council at a future date. 7 Digital Imaging Management System 100,000 110,000 ---110,000 Submitted a grant application for this equipment. It may only fund a portion of this so PD may need to identify other sources or do a phased approach over multiple years. v v 19 Police Department Request List DEFERRED ITEMS - FY 19/20 BUDGET Description Estimate from Police Department Revised Estimate from PD/IT/ Finance Department Phase 1 FY 19/20 Recommendation Phase 2 FY 20/21 Recommendation Phase 3 FY 21/22 Recommendation Future Status 8 Drone Program 40,000 Done ----PD has moved forward with this purchase using AB 109 Funds. 9 Crime Scene Investigation Equipment 80,000 80,000 ---80,000 PD is looking for a grant opportunity to purchase this equipment. 10 Dragon Dictation Software 36,000 Done ----PD has moved forward with this purchase using AB 109 Funds. 11 Personal Protective Equipment 110,000 -----PD is evaluating whether this should remain a high priority. This will be re-evaluated as the need increases. Total Cost $ 3,096,000 $ 4,028,520 $ 1,013,520 $ 1,185,000 $ 410,000 $ 1,720,000 v v 20 NEXT STEPS •Identify possible solutions to address projected increasing costs and potential structural deficits in the coming years. •Identify revenue generating measures. •Upon conclusion of FY 2018-19 audited financial statements, Finance will re-evaluate FY 2019-20 for mid-year purposes and re-evaluate the 5-year outlook. •In early 2019 (if timing permits), discuss the 5-year outlook and strategies to address projected shortfalls, if any.