HomeMy WebLinkAboutFin Budget Amendments FY2013-14CITY aF 5,1 d,
Agenda Item No:
meeting
eet February Em ing Date: 3, 2014
Department: FINANCE
Prepared by: Mark Moses,
Finance Director
a"I
A
YEAR 2013-2014
I
City Manager Approva
RECOMMENDATION: ADOPT RESOLUTION TO AMEND THE CITY OF SA
RAFAEL BUDGET FOR FISCAL YEAR 2013-2014 1
BACKGROUND: As part of the budget monitoring process, the Finance Department conducts a
mid -year review of the City's financial performance. This report presents the City's financial
condition in the current fiscal year (2013-2014) based on actual revenue and expenditure
performance for the six months ending December 31, 2013, as compared to the budget approved by
City Council in June 2013.
Based on this review and analysis, revisions are recommended to address the following categories:
(1) Revenue projections
(2) Expenditure projections
(3) Authorized positions
(4) Change in accounting policy or methodology
The fiscal year 2013-2014 marks the second consecutive annual general fund budget that was
balanced without the use of reserves or borrowed funds. In addition, significant resources have been
added over the past year to the general fund operating reserves, and other uses such as: technology
to support City operations, facilities and open space maintenance, and to reduce retiree benefit -
related pension and health liabilities. Notwithstanding this much -improved fiscal condition from the
several preceding years, funding remains inadequate in the areas of operating reserves, technology,
facilities maintenance,, unfunded retiree benefits, and major capital and faces replacement.
Measure E, which was passed in November 2013, provides for a transactions and use tax that is
one-quarter cent higher than the current one-half cent provided for by Measure S. The new tax,
which supplants Measure S on April 1, 2014, is available to address some of these deficiencies,
particularly in the area of public safety facilities.
The key content of this report and staff recommendat ions were reviewed by the City Counc"
Finance Committee (Mayor Phillips and Councilmember Colin) at its January meeting. I
Council Meeting.-
Disposition.* I Z
rg"Mve , n
iftwM
111,41111 N MIA 11
ADJUSTMENTS TO BEGINNING FUND BALANCES.- City staff recommends one-time fund
balance adjustments to bring the City's financial reporting methodology fully in line with the
principles of modified accrual accounting. This adjustment consists of the full recognition of
payroll -related expenses in the year incurred, and does not impact revenues or expenditures in fiscal
year 2013-2014. Details of this restatement will be provided in the City's fiscal year 2013-2014
Comprehensive Annual Financial Report (C FR.). The City's General Fund Emergency Reserve is
not affected by these adjustments.
In order to enhance the tracking and accountability of revenues dedicated to specific purposes,
activities corresponding to the development of General Plan 2040, General Plan Implementation
and Camp Chance are beinmoved from the General Fund into special re
gvenue funds.
The following table displays the impacts of the changes described above:
Oneefund balance restatements as of
June 30 , 2013):
F und Balance
Reported
Adjustment
I�IIIIIIII 'I IIS
`II BalancII III IIID u e
Restated
General Fund Non -spendable
$527!235 il
General Fund – Committed
f 8001876 11
(800!876)
"General Fund – Emergency Reserve
L General Fund – Other
f 6
L Su) b -total: General Fund
398049787]
(969972 9
298359058 1
Paramedic Tax Ar
744749
EMM
(25927)1
5661737
21469!949
(72855)
2!397094
Internal Services Funds,
6876, 1 32_]��W
10 -ME
6!1749948
Other Special Revenue, Capital & Equipment -
261413172-4d
27329
26g,1441 P054
-Other Funds without adjustments
Sub -total: Other Funds
5094159394
X -Met—
5090729582
Total: All Funds
S5299017,6400
FISCAL YEAR 2013-,,".7014.- On January 10. the Governor released his Proposed Budget for fiscal
N14-2015, announcing that the State"s defic*t.
year . i . which totaled $26.6 billion three years ago, has
been eliminated. The Governor credited the combination of spending cuts and new, voter -approved
taxes for this result. His plan projects a modest economic recovery for California and increases
spending by over $4 billion. Of relevance to cities: the State continues to emphasize the winding
down of the former redevelopment acFencies. the suspension of many state mandates, and the
continued deferral of pre -2004 mandate obligations, which are statutorily required to be completely
paid by fiscal year 2020-202 1. The City of San Rafael is owed approximately $2 million from these
State -mandated reimbursements. The Govemor"s Proposed Budget is the starting point for budget
discussion with the Legislature. In May, the Governor will release a revised State Budget as the
Legislature prepares for budget deliberations. The Legislature has until June 15 to pass a State
Budget in advance of the new fiscal year which begins July 1.
Locally, the City's revenues are on track with the assumptions made for fiscal year 2013-2014. The
largest revenues are property tax and sales tax -related revenues which together account for two-
thirds of total general fund revenues. Property tax revenues were projected to increase by 1.2% over
the previous year, while sales -tax related revenues (including sales and use tax and transactions and
use tax) were projected to increase by approximately 5.5%.
Other revenues,, including library parcel tax, paramedic tax and parking fees are also on track or up,
relative to the original budget assumptions.
Revenues and Other Sources.- Exhibit I presents the status of General Fund revenues and other
sources as of December 3 L 2013, and proposed changes, which add $1,,893,000 to total sources.
Revenues: Since the budget adoption, there have been no changes to the adopted budgeted revenues
of $60,253,618. The following are the -pro-posed ad ustments to the revenue forecast which has been
increased to $62, 146,,618, which is 3. 1 % higher than the adopted budget.
General Fund projected revenues are being reduced by $311,000, reflecting the tracking of General
Plan 2040 ($68,000), General Plan Implementation ($203,000), and Camp Chance ($40,00 0) in
separate funds. These reductions are offset by equivalent reductions in general fund expenditures.
The revenues will be reported in the newly established funds.
There are two, major one-time revenues added to the projections: $411,000 in property tax
administration fees to be refunded by the County, and $303,000 from a sales tax -related true -up
payment. Economic adjustments, based on actual revenues through December 31, 2013, generate
$599,000 in additional, ongoing resources, primarily from property tax,, sales -related taxes and
vehicle -in -lieu backfill. The other major adjustment to resources is an estimated $891,000 for the
additional one-quarter cent TUT from Measure E, effective April 1, 2014.
Transftrs in.- There are no proposed changes to transfers iii
Revenues
Structural changes offset by expenditure reductions (no net impact)
General Plan 2040 now in separate fund (68,000)
General Plan Implementation now in separate fund (203,000)
I I'V
Camp Chance now in separate fund (40,000)
Sub -total — structural changes ($311,000)
One-time adjustments
Property Tax Administration Fee Refund from County 411,000
Sales Tax — true -up (triple flip) 303.000
Ongoing adjustments — current revenue sources
Property Tax — economic adjustment based on actual
1511000
Sales Tax/Triple Flip — economic adjustment based on actual
184,000
Transactions and Use Tax (TUT) — adjustment based on actual
1321,000
Vehicle in Lieu — Backfill — economic adjustment based on actual
108!)000
Other ongoing adjustments from current revenue sources (net)
24,000
Ongoing adjustment - new revenue sources
TUT — adjustment for additional 1/4 cent (Measure "E")
891,000
Sub -total — economic changes
$2,204,9000
I
Total prop sea General Fund revenue changes
$198939000
Transfers in — proposed changes
$0
Total proposed changes to General Fund sources
$1,893,00:0]
Expenditures and Other Uses: Exhibit 11 presents the General Fund and other uses status through
December 3 1 1� 2013. The proposed net expenditure changes, coupled with the recommended
transfers out,, result in a reduction of $3 11 .000 in General Fund uses.
Expenditures-. General fund operating expenditures are being reduced by $3,894, in order to fund
the transfer of funds to match a grant for police safety vests.
General Fund projected expenditures are also being reduced by $311,000, reflecting the tracking of
General Plan 2040 ($68,000), General Plan Implementation ($203,000), and Camp Chance
($40,,000) in separate funds. These reductions are offset by equivalent reductions in revenues.
Transfers out-. An additional transfer out of $31894 to the public safety grant fund is proposed, in
order to fulfill the commitment to provide general fund matching for the grant.
4anges offset by revenue reductions (no net iTpact)
MeneMral MPIan 2040 now in separate fund (681,000)
MGeneral Plan Implementation now in separate fund
(40.000)
Sub -total — structural changes
Generai T und expenditures reduced to match safety grant
[Total proposed General Fund expenditure changes
IM
Totalp�o_posed c�� eneral Fund uses
General Fund — Operating Results: The following table summarizes the recommended General
Fund changes and the impact on the General Fund budget for fiscal year 201-3-2014, and the impact
on Net Operating Results. Purchase orders from the prior fiscal year were automatically rolled over
into the new period and are reflected in the second column. (This amount was reserved from that
year's resources to fund these expenditures and,, therefore, does not require additional action.)
General Fund
Adopted
Budi!et
Approved
Changes
Re ement
stat
Current
Budget
Recommended
Changes
Revised
Budget
60253!hI8
59!94216l8Q
212041000
62! 146!1618
11241,424
(241 �424
FY13-14 Sourcs
e
61,495,042
61,184,042
2920 4 9
�. _00 0
63,388,04i
FY12-13 rll ovi
o
%
o
mt111M
a tort
all
Mt
Total Sources
$61,495,042
$ 611,202,6 4 6
$292049000
,4 69 646
$63 0
Expenditures i
;q 1526A�41
(292!,396)
591,234M28
591230J34
Transfers out
1 925!P00
1 000
!925
94
1 928 8ii
Appropriations
$61,451,424
($292,396)
$61,159,028
$619159902
Net Operating
Results
$2,2049000
$2,2479618
The recommended changes increase the projected net operating results from $43,618 to $2,247,618,,
an increase of $2,204,000. Since $891 .000 (approximately 40%) of this increase comes from the
additional revenues attributable to Measure E, coupled with the critical need to build back operating
reserves to 10% of annual expenditures, staff recommends the following-.
1. Set aside $891 1,000 for funding priorities established by City Council for Measure E.
2. Allocate $1 mon to raise the general fund emergency reserve from $2.3 million (39% of
$5.9 million target) to $3.3 million, (56% of $5.9 million target).
3. Allocate a minimum of $300K for additional contributions to pension and/or OPEB
4. Maintain General Fund Expenditure levels consistent with original budget adoption.
These actions can be taken without impacting current service levels.
Since the budget adoption in June 2013, a total of $3,293 ),464 has been appropriated for spending in
other funds. Of thi s amount, S 1.0-54,43 ) 3 was rolled over from major vehicle purchases that were not
completed be fiscal year end and $311,000 was added to reflect expenditures formerly tracked in
the General Fund. The remaining amount consists of the new Measure A — open space program, the
parking meter upgrade, and a number of grants.
The recommended changes add $366,595 in revenues and other sources to the current fiscal year.
These include an increase of $300,000 to reflect additional parking revenue, an increase of $39,496
in childcare -related revenues, $3,894 in transfers from the General Fund for grant matching, with
the balance coming from various grant activity and adjustments to internal charges.
The recommended changes also include $5,525,707 in additional appropriations for the current
fiscal year. This change formally adopts the funding included in the Capital Improvement Plan
update that was presented to the City Council on July 15, 2013, one month after the fiscal year
2013-2014 budget was adopted. These appropriations include approximately $2.4 million in street
projects funded by Gas Tax, $1.5 million for building -related repairs, and $1.2 million in
stormwater projects funded by runoff fees, with the balance of the changes attributable to other
capital projects.
The table below summarizes the impact of the recommended changes to the resources and
9-ppropriations for other funds. Detail is provided in Exhibit 111.
Other Funds
Adopted
Budget
Approved
Changes
Restatement
Current
Budget
ecommended
Recommended
Changes
Changes
Revised
Budget
Operating/Capital
-Revenue
41 15921539
42!532,847
42i18951548
Transfers in I;
F_ I 990MOO
M1
I 19901000
1993894
FY13-14 Sources
43,5829539
44,5229847
4498899442
FY12-13 rollover
19054943il
1905494 J3-
190549433
Total Sources
$4395829539
$199 949741
$45957792 8 0
$ 36 6 9595 1
�iiii iii
$4599439875
Expenditures
45,3731,913
3i293•
�96"
481667377
55251707
54!J930 4
Tr nsrs out
afe
41011 424
6
1306424
1 306424
Appropriations
$4696809337
$392939464
$49,973,801
$595259707
$55949995
F �Results
31097974�i 1
11
1 (1,298,723)
1)
Library Services: Management staff has an ongoing practice of evaluating staffing levels and
determining the most effective, efficient, and appropriate way to deliver services. Part of this
evaluation includes analyzing the allocation of regular full time employees, regular part time
employees, temporary/seasonal employees, etc. Staff recommends making four adjustments in the
Library Department that would spread out a beneficial impact to Children's Services, Adult
Services, Circulation,, and at our Pickleweed branch. Specifically, two Librarian 11 positions would
move from three-quarter time to full time. In additiona if time Librarian 11 would be added at
Pickleweed and a part time Library Assistant would be added in Circulation. The cumulative impact
of these changes adds 1.67 authorized positions to the Library, with a corresponding reduction in
temporary/seasonal staff.
These changes would be phased in over the remainder of fiscal year 2013-2014 and next fiscal year.
Additional costs would be partially off -set by reductions in the budget for temporary/seasonal
employees. The funding required for the remainder of the current fiscal year is approximately one-
third, or $25,000, of the approximately $75.000 annualized cost. These additional expenses can be
covered by current general fund appropriations; therefore there is no impact on expenditure
projections for this fiscal year.
Fire Services: In January 2010, four vacant firefighter positions were "suspended" from the budget
reducing the Fire Department allocation by 4.0 full time equivalent (FTE) employees. In order to
maintain required constant staffing, these positions have continually been backfilled with overtime.
Since 2010, departmental needs have reallocated the "suspended" positions which currently stand at
one Fire Captain and two Fire Engineer positions. Although it is possible that there may have been
some savings generated from this staff reduction early in its implementation, it has severely
challenged the Fire Department's ability to staff its facilities without excessive overtime which can
contribute to unsafe working conditions. Because these positions can now be replaced with a lower
benefit tier, they can be funded from the current,, respective overtime budgets in the General Fund
and Paramedic Tax Fund. Therefore!, there is no resulting increase in expenditure projections for the
current or future fiscal years.
These proposed change increases the approved positions in the Library from 21.74 to 23.41, Fire
from 76.00 to 79.00, and the City-wide totals from 378.34 to 383.01. (Exhibit IV)
Community Media Center of Marin has requested that $660,000 be redirected from franchise fees
over a four year period to help them preserve their reserve levels and meet capital replacement
needs. The impact to the City of San Rafael would be $153,703 - $172,443, depending upon the
final methodology used to distribute costs. Based on the City's emergency reserve levels, combined
with other unfunded needs, an allowance for this support has not been included in the mid -year
recommendations.
FISCAL IMPACT:
GENER,4L FUND IMPACT: The recommendations in this report do not increase the City's
General Fund appropriations for fiscal year 2013-2014, which provide for most of the major local
services (such as police, fire suppression and prevention., planning, building, library, parks, streets,,
engineering, traffic enforcement and management,, and cultural programs). The increase in projected
revenues, led primarily by the property tax administrative fee refund and increased transaction and
use tax revenues from Measure E,, will be preserved for operating reserves and capital reserves,
The additional 1.67 FTE in the Library will increase future year, annual budgets by approximately
$75,000. The additional 3.00 FTE in Fire are not projected to have a budgetary impact., due to the
projected reduction of overtime.
W A
oil iiii 403
,CITY- WIDE IHPACT.- The following table summarizes the impact of the recommended
appropriation changes across all funds. The detail for this table is provided in Exhibit 111.
RECOMMENDATION: Staff recommends that City Council accept the report and adopt the
resolution as presented.
ATTACHMENTS
Resolution with exhibits:
Exhibit I — FY 2013-14 General Fund Revenue and Other Sources
Exhibit 11 - FY 2013-14 General Fund Expenditures and Other Uses
Exhibit III — Comprehensive Fund Summary
Exhibit IV- Authorized Positions
W-\Mianagement Services- WorkFile\Finance- Work File\Council Material\Staff Rep orts\2014\C ity\M i d- Year Review
Adopted
Budget
Approved
Changes
Restatement
Current
Budget
Recommended
Changes
Revised
Budget
1 45 1 424
(292396)
611,159028
61 1591,028
Other Funds
461,680,337
312931464
4911973ui ii 81-
0
5525 !1707
Less interfund
(13,0531,978)
(131053978)
(2293 1)
(13 IP76909
S
019068
S 9890p.78981,i
S5 950 29776
SIIT 035816iiuini
27
199
RECOMMENDATION: Staff recommends that City Council accept the report and adopt the
resolution as presented.
ATTACHMENTS
Resolution with exhibits:
Exhibit I — FY 2013-14 General Fund Revenue and Other Sources
Exhibit 11 - FY 2013-14 General Fund Expenditures and Other Uses
Exhibit III — Comprehensive Fund Summary
Exhibit IV- Authorized Positions
W-\Mianagement Services- WorkFile\Finance- Work File\Council Material\Staff Rep orts\2014\C ity\M i d- Year Review
% A
' i i i i i► l
WHEREAS, the City Council approved Resolution 13554 adopting the fiscal year
0-1013-2014 budget; ani
requireWHEREAS, the changes in available funding sources and operational needs
adjustments • some City • ii` and
WHEREAS, it is the intention of this Council to review recommendations from
staff regardingcondition,i • revenue projections ani available
WHEREAS,resources and provide funding for various ongoing, capital and other service needs; and
` examination, deliberation . • due consideration,the City
Council •• i `• the staff reportand recommendations,and directs
Manager to proceed with the implementation of these recommendations for the
remainder
year;
!a of this fiscal
ExhibitNOW, THEREFORE, BE IT RESOLVED, by the San Rafael City Council that
Resolution 13554 for fiscal year 2013-2014 is amended to increase total general fund
revenues to $62,146,618 with transfers in unchanged at $1,241,424 as presented on
`i hereto; and reduces general fun• expenditure authi • to
attached$59,230,134 and increases transfers out to $1,928,894, as presented on Exhibit 11
hereto. Further,Resolution is am` • `i for other i revenues
ai #
$42,895,548 and transfers in to $1,993,894, ` !` • ` i $54,193,084 • transfers
out i $1,306,424 presented i i attached
hereto. a i changes result
net City-wide appropriations of $103,581,627.
NOW, THEREFORE, BE IT FURTHER RESOLVED, by the San Rafael City
Council that Resolution 13554 for fiscal year 2013-2014 is also amended to increase
the number of authorized positions from 378.34 to 383.01, as presented in Exhibit IV
attached
i aii
R C. B i Clerk
. i Rafael,
certify i
# ihereby
foregoing ` i # . duly and regularly introduced and adopted at a regular
meeting of the Council of said City on Monday, the 3rd of February 2014, by the
following i` to
YES-
C OUNC ILMEMBERS-
lips
Bushey, Colin, Connolly, McCullough & Mayor Phillips
NOES-
C OUNCI LM EMBERS:
Nerve
ABSENT:
COUNCILMEMBERS-
Nene
e49Hzi*e e- - e=ae 40-z *
ZSTHER C. BEIRNE, City Clerk
]1'' 11 , IN Ak mlc��
1 1
s ♦ a a® 0 0
(29, NIL!
Ilk
INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT,
ORDINANCE ! • RESOLUTION BEFORE APPROVAL AGENCY.
DATE OF February 1
16111
,.
11 11 li� -
01
0o
DATE:
1/29/2014
# i! i 1•! 'i 1 ' i• i � 1 i�' 1 i
Department Head (signature)
APPROVED AS COUNCIL / AGENCY
AGENDA
REMARKS:
APPROVED AS TO FORM:
City Attorney (signaoire)