HomeMy WebLinkAboutFin City Operating Budget FY2016-17f SAN RAFAEL
THE CITY WITH A MISSION
Agenda Item No: 5.a
Meeting Date: April 17, 2017
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Finance
Prepared by: Mark Moses, City Manager Approval:
Finance Director
TOPIC: City Operating Budget
SUBJECT: (1) FISCAL YEAR 2016-2017 SECOND INTERIM FINANCIAL UPDATE
(2) RESOLUTION AMENDING FISCAL YEAR 2016-2017 BUDGET
(3) FISCAL YEAR 2017-2018 OPERATING BUDGET PREVIEW
RECOMMENDATION: ADOPT RESOLUTION
BACKGROUND:
The Finance Department performs an ongoing review of the City's financial performance, and provides
monthly reports on the General Fund results to the City Council Finance Committee. This report
presents the City's financial condition in the current fiscal year (2016-2017) based on actual revenue
and expenditure performance for the period July 1, 2016 through March 31, 2017, and budget actions
taken through April 3, 2017, as compared to the budget approved by City Council on June 6, 2016, and
subsequently amended on December 19, 2016.
Based on this review and analysis, revisions are recommended to address the following categories:
(1) Revenue projections
(2) Expenditure plan changes, including adjustments based on labor contracts approved after
budget adoption.
The major General Fund content of this report and staff recommendations are scheduled to be
considered by the City Council Finance Committee (Mayor Phillips and Councilmember Gamblin) at its
April 17, 2017 public meeting.
ANALYSIS:
GENERAL FUND:
Revenues and Other Sources:
Revenues: In December 2016, the revenue forecast was increased by $775,000, in order to incorporate
adjustments necessary to bring the fiscal year 2016-2017 projections in line with the actual ending
FOR CITY CLERK ONLY
File No.: 8-5
Council Meeting: 04/17/2017
Disposition: Accepted reports and adopted Resolution 14312
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
results for the fiscal year ended June 30, 2016. Although sales tax revenues ended that year
approximately $300K less than projected, an adjustment was not made at that time, since the actual
sales tax receipts for the first fiscal quarter had yet to be reported. Since that time, the City has
confirmed a slowdown in sales tax collections through the first half of the fiscal year. This slowdown,
coupled with a correction to a prior year reporting error, translates to a $1.4 million reduction in basic
sales tax, and a $300,000 reduction in Measure E Transactions and Use Tax. Revenue from Permits
and Licenses is being increased by $150,000, while Other Revenues are being increased by $200,000,
to reflect a one-time settlement and other damage recovery trends. Finally, the City was recently
notified by the State Department of Finance, that the annual reimbursement by the former
Redevelopment Agency (via the Successor Agency) for unfunded pension and other retiree obligations
is being disallowed for the first time since they were approved by the Oversight Board more than four
years ago. Although the City is challenging this decision, which reduces General Fund revenues by
approximately $250,000, the revenues have been removed from the current projections.
The table below presents the proposed changes to General Fund revenues and transfers in, which
reduce total resources by $1,600,000.
Revenues and Other Public Sources:
Figure 1
FY 16-17 Adjustments
Revenues
Sales Tax— based on trends through March 2017 $ (1,400,000)
Transactions and Use Tax — based on trends through March 2017 (300,000)
Permits & Licenses — based on trends through March 2017 150,000
Other Revenues (includes settlements) 200,000
Termination of RDA Pension/OPEB reimbursements (250,000)
Total proposed revenue changes $ (1,600,000)
Transfers in (no adjustment) $ -
Total proposed changes to General Fund sources $ (1,600,000)
Revenues and Transfers in as adjusted through April 3, 2017 $ 76,811,226
Revenues and Transfers in as proposed $ 75,211,226
Expenditures and Other Uses:
Based on an analysis of spending trends and staffing vacancies, staff is recommending a reduction in
personnel -related costs of $600,000 and $300,000 for salaries and pension contributions, respectively.
In addition, the Redevelopment Agency/Successor Agency contingency of $250,000 is being eliminated
as a result of the recent State Department of Finance decision described in the previous section.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
Finally, staff has identified other unspent, non -personnel appropriations totaling $140,690 that will not
be needed for the current fiscal year.
Capital transfers out are being reduced by $100,000 to reflect the drop in Measure E TUT revenues.
(One-third of the $300,000 revenue reduction impacts the funds dedicated to the San Rafael Essential
Facilities project.)
Changes to the General Fund expenditures and transfers out are detailed below.
Figure 2
FY 16-17
Adjustments
Expenditures
Adjust salaries per mid -year analysis
$
(600,000)
Adjust pension contributions per mid -year analysis
(300,000)
Reduce RDA contingency to reflect termination of Pension/OPEB
(250,000)
Adjust non -personnel costs
(140,690)
Total proposed expenditure changes
$
(1,290,960)
Transfers out
Reduce capital transfers to SREF project due to Measure E revenue adj
$
(100,000)
Total proposed transfers out changes
$
(100,000)
Total proposed changes to General Fund uses
$
(1,390,690)
Expenditures and Transfers in as adjusted through April 3, 2017
$
77,443,828
Expenditures and Transfers with proposed changes
$
76,053,138
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
General Fund — Operating Results: The following table summarizes the recommended General Fund
changes, the impact on the General Fund budget for fiscal year 2016-2017, and the impact on Net
Operating Results and Unassigned funds.
Figure 3
General Fund
Revenues
Transfers in
FY16-17 Sources
FY15-16 P.O.
reserve
Total Resources
Expenditures
P.O. Rollover
Operating
Transfers out
Capital Transfers
out
(from Measure E
to SREF)
Total
Appropriations
Net Results —
sub -total
Allocations
Emergency
Reserve
Use of unassigned
funds
Final Results
Unassigned
funds
Adopted
Approved
($209,310)
Proposed
Revised
Budget
Changes
Current Budget
Changes
Budget
$74,513,000
$775,000
$75,288,000
($1,600,000)
$73,688,000
1,212,520
169,783
1,382,303
1,382,303
75,725,520
944,783
76,670,303
(1,600,000)
75,070,303
140,923
140,923
140,923
$ 75,725,520
$ 1,085,706
$ 76,811,226
($1,600,000)
$75,211,226
69,731,979
1,784,835
71,516,814
($1,290,690)
$70,226,124
140,923
140,923
140,923
1,936,091
($150,000)
1,786,091
1,786,091
4,040,000
($40,000)
4,000,000
($100,000)
3,900,000
$ 75,708,07 $ 1,735,758 $ 77,443,828 ($1,390,690) $76,053,138
$17,450
260,000
($809,500)
$566,950
($650,052)
($632,602)
($209,310)
($841,912)
180,000
440,000
($120,000)
$320,000
($500,000)
($1,309,500)
0
($1,309,500)
($330,052)
$236,898
($89,310)
$147,588
The proposed changes decrease the current projected net results before allocations from negative
$632,602 to negative $841,912, a decrease of $209,310. Unassigned funds now drop from $236,898
to 147,588.
The changes to General Fund Sources and Appropriations are summarized in Tables I and II of
Exhibit I to the attached Resolution.
OTHER FUNDS:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 5
The adopted budgeted appropriations for Other Funds, including approved carryforward of funds
approved in prior years and changes approved since July 1, 2016, total $65,810,340 (Figure 5). These
expenditures and transfers result in the spending of approximately $6.3 million in accumulated funds
(i.e., fund balance), primarily in the areas of infrastructure maintenance (e.g., streets and storm drain)
and equipment replacement. Key projects contributing to the use of fund balance are: Rossi Pump
Station, Del Presidio, Downtown Rail, 750 Grand Avenue and other street repair and pump station
maintenance, City Hall switchgear replacement, traffic study for 3rd and Hetherton, and the Canal
Neighborhood Parking evaluation.
Revenue changes:
The Department of Public Works reports additional grant revenues of $2,125,000 from the One Bay
Area Grant (OBAG) and $115,000 in Traffic Mitigation Fees. Meanwhile, projected Paramedic Tax
revenues in the Emergency Medical Services Fund are being increased by $500,000, to reflect
additional collections of prior year billings.
Finally, the Childcare Fund is projecting an additional $16,000 in revenues for its California State
Preschool Program through the Marin Child Care Council. This additional revenue will narrow the
funding gap for the City's preschool programming.
These adjustments result in an increase of $2,711,317 for non -general fund (Other Fund) revenues
(figure 4).
Expenditure changes:
Proposed changes to appropriations include increases in the Measure C — Library Parcel Tax planned
expenditures of $60,000, to cover additional books and publications for both library sites, as well as
audio-visual materials.
The communications internal service fund appropriations are being increased by $125,000, primarily to
cover delayed invoicing that occurred during AT&T's transition to a new State contract. The remaining
cost increases were due primarily to expansions of the City's computer network to (a) provide faster
network speeds to existing buildings and (b) support longer -than expected timelines for temporary
facilities related to the essential facilities project.
The Sustainability and Volunteer Program Coordinator requested an additional $37,950 appropriation
from the Sustainability Program project account for the remainder of this fiscal year. This increase is
prompted by the need to expend $30,000 form grant funds received from Marin Climate and Energy
Partnership for the Resilient Neighborhoods Outreach Specialist position, with the balance covering
minor additional expenses for trash and recycling container replacements along 4th Street downtown.
Finally, the Department of Public Works is requesting $15,614 in additional appropriations for the Bay
Point Lagoons assessment district and Loch Lomond #10 Mello -Roos district to match current year
activities.
Changes to the Other Funds revenues, expenditures and transfers are detailed in the following table:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 6
Figure 4
FY 16-17
Proposed
Revenues Changes
Additional grant reimbursements (OBAG) $ 2,125,000
Adjust Traffic Mitigation Fees — based on actual trends 115,000
Additional paramedic tax revenues (EMS fund) 500,000
Additional Childcare (Preschool) program revenues 16,000
Reduce internal service charges to reflect actual activity levels (44,683)
Total proposed revenue changes $ 2,711,317
Transfers in
Reduce capital transfers to Measure E project based on revenue adj $ (100,000)
Total proposed transfers in changes $ (100,000)
Expenditures
Communications Internal Service Fund $ 125,000
Sustainability fund 37,950
Measure C — Library Materials 60,000
Assessment District adjustment to reflect actual activity 15,614
Total proposed expenditure changes $ (238,564)
Total proposed transfers out (no adjustment) $ 0
Net proposed changes to Other Funds $ 2,372,753
Revenues+ Transfers -in -Expenditures -Transfers -Out
The net impact of all proposed changes on Other Funds is $2,372,753. These additional resources
reduce the spending of accumulated funds from $6.3 million to $3.9 million. Based on the beginning
balance of $52.6 million, the projected ending balance is revised to $48.7 million.
The following table presents the adopted budget, approved changes and proposed changes to the
FY2016-2017 Other Funds budget.
SAN RAFAEL CITY COUNCIL AGENDA REPORT I Paae: 7
Figure 5
Other Funds
Operating/Capital
Revenue
Transfers in
FY16-17 Sources
FY15-16 Rollover
FY15-16 CIP Carry
Over
Total Sources
Expenditures
Transfers out
Total
Appropriations
Adopted Approved
Budget Changes
$ 42,689,466
6,176,091
48,865,557
$ 48,865,557
$ 49,111,963
1,412,520
$ 50,524,483
Proposed
Current Budget Changes
$ 116,488 $ 42,805,954
513,400
6,689,491
629,888
49,495,445
248,627
248,627
9,768,360
9,768,360
$ 10,646,875
$ 59,512,432
$ 14,412,673
$ 63,524,637
873,183
2,285,703
$ 15,285,856
$ 65,810,340
$ 2,711,317
(100,000)
2,611,317
Revised Budget
$ 45,517,271
6,589,491
52,106,762
248,627
9,768,360
$ 2,611,317 $ 62,123,749
$ 238,564 $ 63,763,201
2,285,703
$ 238,564 $ 66,048,904
Net Results $ (1,658,926) $ (4,638,981) $ (6,297,907) $ 2,372,753 $ (3,925,154)
These proposed changes to Other Fund Sources and Appropriations are presented in Table III of
Exhibit I to the attached Resolution.
CITY-WIDE FISCAL IMPACT:
The following table presents the impact of the recommended appropriation changes across all funds.
Figure 6
All Funds Adopted
Approved
Current
Proposed
Revised
Budget
Changes
Budget
Budget
Budget
General Fund $75,708,070
$1,735,758
$77,443,828
($1,390,690)
$76,053,138
Other Funds $50,524,483
$15,285,856
$65,810,340
$238,564
$66,048,904
FISCAL YEAR 2017-2018 Budqet Preview:
Revenues and other sources of funding:
Preliminary revenue projections for fiscal year 2017-2018 show a 3.5% increase over those of the
current year.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 8
Figure 7
General Fund Revenues
Revenues
Transfers -in
Current Year Sources
Prior year allocation
Total Sources
FY16-17 FY17-18
Projection Preliminary Change
$ 73,688,000 $ 76,294,000
1,382,303
1,328,000
75,070,303
77,622,000
1,450,423
1,196,000-
$ 76,520,726
$ 78,818,000
3.50%
3.40%
3.00%
* The following previous commitment of accumulated funds will be used to supplement FY17-18
revenues to support expenditures with limited duration:
Figure 8
Accumulated
resources
allocated to
Program
FY17-18
One-time payments under MOU
$500,000
Director of Homeless Planning & Outreach
135,000
Two additional police officers (2'/2 years)
450,000
Additional patrol on 4th Street
75,000
MCCMC contribution for homelessness
36,000
Massage enforcement
0
Total
$1,196,000
These activities will be included in the preliminary fiscal year 2017-2018 budget to be presented on
May 1, 2017. Because there are very limited resources from which to support additional programs, it is
unlikely that any additional, major programming will be recommended for funding in fiscal year
2017-2018.
Expenditures and other uses of funds:
On the expenditure side, MCERA rates are essentially flat with the City's composite rate increasing
very modestly from 60.96% to 61.04% on eligible payroll for fiscal year 2017-2018. Salaries and
benefits are projected to increase by 4.8% over current year projections; however, current year
projections have been adjusted downward to incorporate projected savings from vacant positions. Total
General Fund Uses are projected to increase by 3.1 % in fiscal year 2017-2018.
Figure 9
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 9
General Fund Uses
Salaries & Benefit Expenditures
Non -personnel Expenditures
Debt Service Expenditures
Operating transfers out
Capital transfers out (Measure E)
Emergency Reserve allocation
Total Uses
Figure 10
Net Revenue
$147,588
FY 16-17
Projection
FY16-17
FY16-17
General Fund Results
Projection
Total Sources
$ 76,520,726
Total Uses
$ 76,373,138
Net Results
147,588
FY16-17
FY17-18
Projection
Preliminary
Change
$ 53,984,983
$ 56,591,000
4.8%
15,930,379
15,444,000
(3.1%)
451,685
571,000
26.3%
1,786,091
1,920,000
7.5%
3,900,000
4,025,000
3.2%
320,000
220,000
(31.3%)
$ 76,373,138
$ 78,771,000
3.1%.
Net Revenue
$47,000
3.1%
Increase in General
Fund Uses in FY 17.18
IP8.81
llelulon
■ Expenditures (Uses)
Revenues (Sources)
FY 17-18
Preliminary
FY17-18
Preliminary
$ 78,818,000
$ 78,771,000
47,000
Difference Change
$ 2,297,274 3.00%
$ 2,397,862 3.10%
RECOMMENDATION: Accept the report and adopt the resolution as presented.
ATTACHMENTS:
Resolution with exhibit
RESOLUTION NO. 14312
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL ADOPTING AMENDMENTS TO THE 2016-2017 BUDGET
WHEREAS, on June 6, 2016, the City Council approved Resolution 14131
adopting the fiscal year 2016-2017 budget; and
WHEREAS, the changes in available funding sources and operational needs
require adjustments to some City budgets; and
WHEREAS, on December 19, 2016, the City Council received an interim report
from City staff on the status of the City's fiscal activities and approved Resolution 14256
amending the fiscal year 2016-2017 budget; and
WHEREAS, it is the intention of this Council to review recommendations from
staff regarding the City's financial condition, including revenue projections and available
resources and provide funding for various ongoing, capital and other service needs; and
WHEREAS, after examination, deliberation and due consideration, the City
Council has approved the staff report and recommendations, and directs the City
Manager to proceed with the implementation of these recommendations.
NOW, THEREFORE, BE IT RESOLVED, by the San Rafael City Council that
Resolution 14131 for fiscal year 2016-2017 is further amended to decrease total
general fund revenues to $73,688,000 as presented on Exhibit I Table I, decrease
general fund expenditures to $70,367,047 and decrease general fund capital transfers
out to $3,900,000 as presented on Exhibit I Table 11. Further, the Resolution is
amended to increase other fund revenues to $45,517,271 reduce transfers in to
$6,589,491 and increase expenditures to $63,763,201 as presented on Exhibit I
Table III. These changes result in City-wide General Fund appropriations of
$76,053,138 and other fund appropriations of $66,048,904 as summarized on Exhibit I
Table IV.
I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular
meeting of the Council of said City on Monday, the 17th of April 2017, by the following
vote, to wit:
AYES: COUNCILMEMBERS: Bushey, Colin, Gamblin, McCullough & Mayor Phillips
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
atj�L_ 'ems
ESTHER C. BEIRNE, City Clerk
WACouncil Materia l\Resolutions\2016\City\Amend City budget 16-17-9month.doc
TABLE I
CHANGES TO GENERAL FUND REVENUES AND OTHER SOURCES
TABLE II
CHANGES TO GENERAL FUND EXPENDITURES AND OTHER USES
Adopted Budget FY
Approved
General Fund
2016-17
Changes
Revenues
74,513,000
775,000
(Transfers in
1,212,520
169,783
IFY16-17 Sources
75,725,520
944,783
IFY15-16 Rollover
-
140,923
Total Resources
75,725,520
1,085,706
TABLE II
CHANGES TO GENERAL FUND EXPENDITURES AND OTHER USES
TABLE III
CHANGES TO OTHER FUNDS
Adopted Budget FY
Approved
General Fund
2016-17
Changes
Expenditures
69,731,979
1,925,758
(Transfer out
1,936,091
(150,000)
(Transfer out-CIP
4,040,000
(40,000)
Total Appropriation
75,708,070
1,735,758
TABLE III
CHANGES TO OTHER FUNDS
TABLE IV
CITY-WIDE APPROPRIATION SUMMARY
Adopted Budget FY
Approved
Other Funds
2016-17
Changes
Revenues
42,689,466
116,488
Transfers in
6,176,091
513,400
FYI6-17Sources
48,865,557
629,888
FY15-16 Rollover
106,262,975
248,627
FYI5-16CIP Carry Over
9,768,360
(Total Resources
48,865,557
10,646,875
1
Expenditures
49,111,963
14,412,673
(Transfer out
1,412,520
873,183
(Total Appropriation
50,524,483
15,285,856
1
(Net Results
(1,658,926)
(4,638,981)
TABLE IV
CITY-WIDE APPROPRIATION SUMMARY
W1:11:1111111111
Current Budget Proposed Changes Revised Budget
75,288,000
Adopted Budget FY
Approved
All Funds
2016-17
Changes
(General Fund
75,708,070
1,735,758
(Other Funds
50,524,483
15,285,856
(Less interfund
(19,969,579)
Net Expenditures
106,262,975
W1:11:1111111111
Current Budget Proposed Changes Revised Budget
75,288,000
(1,600,000) 73,688,000
1,382,303
1,382,303
76,670,303
(1,600,000) 75,070,303
140,923
140,923
76,811,226
(1,600,000) 75,211,226
Current Budget Proposed Changes Revised Budget
71,657,737
(1,290,690) 70,367,047
1,786,091
1,786,091
4,000,000
(100,000) 3,900,000
77,443,828
(1,390,690) 76,053,138
Current Budget Proposed Changes Revised Budget
42,805,954
2,711,317
6,689,491
(100,000)
49,495,445
2,611,317
248,627
9,768,360
59,512,432
2,611,317
63,524,637 238,564
2,285,703 -
65,810,340 238,564
(6,297,907) 2,372,753
Current Budget Proposed Changes
77,443,828 (1,390,690)
65,810,340 238,564
17,021,614 123,284,588
(1,152,126)
45,517,271
6,589,491
52,106,762
248,627
9,768,360
62,123,749
63,763,201
2,285,703
66,048,904
(3,925,154)
Revised Budget
76,053,138
66,048,904
122,132,462
ROUTING SLIP / APPROVAL FORM
INSTRUCTIONS: Use this cover sheet with each submittal of a staff report before approval
by the City Council. Save staff report (including this cover sheet) along
with all related attachments in the Team Drive (T:) --> CITY COUNCIL
AGENDA ITEMS 4 AGENDA ITEM APPROVAL PROCESS 4 [DEPT -
AGENDA TOPIC]
Agenda Item #
Date of Meeting: 4/17/2017
From: Mark Moses
Department: Finance
Date: 4/7/2017
Topic: City Operating Budget
Subject: (1) SECOND FISCAL YEAR 2016-2017 INTERIM FINANCIAL UPDATE
(2) RESOLUTION AMENDING FISCAL YEAR 2016-2017 BUDGET
(3) FISCAL YEAR 2017-2018 OPERATING BUDGET PREVIEW
Type: ® Resolution ❑ Ordinance
❑ Professional Services Agreement ❑ Other:
APPROVALS
® Finance Director
Remarks: self -approved
® City Attorney
Remarks: LG -Approved 4/10/17.
® Author, review and accept City Attorney / Finance changes
Remarks: ready for CM - 4/11
® City Manager
Remarks: