HomeMy WebLinkAbout8.2 - 1164 Fiscal Year 2015-16 4th Quarter Financial R
Page 1 of 6
STAFF REPORT
CITY COUNCIL
DATE: November 1, 2016
TO: Honorable Mayor and City Councilmembers
FROM:
Christopher L. Foss, City Manager
SUBJECT:
Fiscal Year 2015-16 4th Quarter Financial Review
Prepared by: Colleen Tribby, Director of Administrative Services
EXECUTIVE SUMMARY:
The City Council will receive a financial report on the fourth quarter of Fiscal Year 2015 -
16 and consider amendments to the Fiscal Year 2015 -16 Budget and to the General
Fund reserve designations.
STAFF RECOMMENDATION:
Staff recommends that the City Council receive the report, approve the budget change,
and confirm General Fund reserve designations as of June 30, 2016.
FINANCIAL IMPACT:
City Council approval of the budget change and reserve designations will no t alter
amounts received or spent, but will allow Staff to close the Fiscal Year 2015-16 financial
books.
Total General Fund reserves are projected at $109.2 million at June 30, 2016, with
$32.1 million in the unassigned cash flow reserve, representing 5.5 months of the Fiscal
Year 2016-17 Adopted Budget. It should be noted that this is above the target of 4.0
months in cash flow reserve, and the City Council has discretion to make additional
reserve designations allowable by the City’s Fund Balance and Reserves Policy. All
balances in other funds are in compliance with the Policy.
DESCRIPTION:
This report transmits the preliminary financial results of the Fiscal Year 2015-16 year-
end, focusing on the General Fund, and includes any budget amendments neede d to
close the books. At this time, the numbers are essentially final, and though adjustments
may happen as the audit is finalized, Staff does not expect substantial changes from the
numbers in this report. The Comprehensive Annual Financial Report (CAFR), which will
be presented to the City Council at its second meeting in December 2016, will contain
the final audited results.
Page 2 of 6
General Fund Overview
General Fund revenues came in at $82.9 million ($7.8 million over budget) in FY 2015-
16, while expenditures totaled $69.0 million ($6.6 million under budget). Transfers from
the General Fund to Capital Improvement Project Funds totaled $2.4 million. The
resulting impact on total General Fund Reserves was an increase of $11.5 million, as
shown in Table 1.
Table 1: Total Reserves
Total Reserves, Beginning of Year 79,577,762 97,706,494
Total Revenue 76,099,263 82,916,416
Total Expenditures (56,577,254) (69,048,878)
Total Transfers to CIP Projects (1,393,277) (2,409,006)
Total Reserves, End of Year 97,706,494 109,165,025
11,458,531 Change
In June 2015, the City Council designated $8.9 million of the estimated year-end surplus
to specific Committed Reserves, and confirmed $5.3 million in allocations to Assigned
Reserves. These designations, as well as reserve allocations for budget carryovers and
for set asides required by accounting rules and/or City policy, have been incorporated
into the General Fund Reserve Balances (Attachment 2). In addition, Staff has made
the following change, which requires City Council approval:
1. Within the Committed Reserves category, the $1.0 million Affordable Housing
Reserve has been shifted to a new reserve called the Economic Development
Reserve. This is in response to the City Council discussion during the meeting of
June 21, 2016.
The City Council’s designation of reserves in June 2016 was based on estimated
revenues and expenditures at that time, and since then the City has received final
Property Tax, Sales Tax, and Development Revenues accrued to June 30. In addition,
the Fiscal Year ended with numerous staffing vacancies either still in place, or having
been recently filled. The variance in expenditures is largely due to this factor; other
factors include underspending in supplies and services, remaining contingency
balances, and contract expenditures that were either closed out during the year or were
carried over into the current Fiscal Year.
Although the Unassigned Cash Flow Reserve, estimated at $32.1 million (or 5.5 months
of the Fiscal Year 2016-17 Adopted Budget), is above th e reserve target as provided for
in the City Policy; Staff is not recommending any additional allocations from that
reserve. There are a number of factors to be considered in the next update to the 10-
Year Forecast, including the updated Property and Sales Tax projections, the shift of
Development Revenues sooner than was anticipated, the inclusion of personnel costs
at a fully-staffed level, and the possible expansion of police services to the community.
These will all impact the Forecast; and while the most recent projection showed a deficit
Page 3 of 6
by Fiscal Year 2020-21, the City will need to examine how surpluses now can be best
utilized to bridge funding gaps over the long term.
The following is a discussion of the major factors in budgetary variances (+/- $250,000)
that occurred in Fiscal Year 2015-16. The General Fund Summary (Attachment 1)
presents this data by major category.
Revenue
Property Tax: $684,855 higher than budget. Property taxes came in strong again in
Fiscal Year 2015-16 due to an increase in assessed valuation (AV) by $1.5 billion
(13.3%) over the prior year, which was the largest percentage growth in Alameda
County, followed by Emeryville’s (11.7%) and Oakland’s (8.7%) growth. A total of 575
properties changed hands in Dublin from January to June 2015, with an increase in
value of 38.9%, or $138.5 million in AV, and the median home price, at $737,000, is the
highest in the City’s 15-year reporting period. Dublin has also continued to see home
values previously reduced under Prop 8 reassessed at their full market value, with a
fraction of such homes in the City remaining to be restored.
Development Revenue: $1,183.395 higher than budget. Development Permits includes
all permits associated with new development (primarily building permits), as well as
tenant improvements on current structures. Development Services includes fees for City
services provided, most typically Zoning and Plan Checking services. The overall
increase in these revenue streams is related to development activity that had b een
originally anticipated to occur over the course of the next few fiscal years. As a
reminder, because there is a lag between the receipt of revenue and the expense of
related funds to provide the services, the City continues to maintain a Service Contin uity
Reserve to ensure that there are future funds to cover expenditures when development
activity slows.
Other Taxes: $1,698,016 higher than budget. Property Transfer Tax came in $450,025
higher, linked to increased home sales and AV; high hotel occupancy and room rates
brought Transient Occupancy Tax revenue in $525,219 over budget; and Garbage
franchise fee revenue came in $497,152 above budget due to expande d services and
the incorporation of the annual rate adjustment.
Interest: $2,471,787 higher than budget. Interest earnings nearly doubled in Fiscal Year
2015-16, coming in $596,056 over budget, due to the continued economic recovery and
the portfolio of investments being managed by Chandler Asset Management .
Accounting Staff have also booked an adjustment of $1,869,627 in fair market value,
which is the amount the City would realize if it were to sell off its investments as of June
30, 2016. Because this is not “real” revenue, that amount is set aside in a reserve for
unrealized gains/losses, according to accounting rules.
Charges for Services: $1,319,817 higher than budget. The City received $493,220 in
revenue above the budgeted amount in reimbursement for services provided by
Page 4 of 6
Alameda County Fire Services at the Santa Rita Jail. Additionally, Par ks and
Community Services revenue for the sports programs, family programs and recreational
activities outperformed budget estimates by a combined $565,451.
Community Benefit Payments: $251,678 lower than budget. This is due to the timing of
payments made via certain development agreements.
Expenditures
Salaries and Wages: $1,128,384 lower than budget. The decrease was primarily a
result of vacancies that occurred throughout the course of the Fiscal Year, combined
with unused contingency funds for projected merit increases.
Benefits: $901,999 lower than budget. In correlation with the underspending in Salaries
and Wages, the vacancies in FY 2015-16 also resulted in spending less than budgeted
funds in Benefits.
Services and Supplies: $666,073 lower than budget. This underspending occurred
across departments in a variety of specific budget line items, including printing and
binding, repairs and maintenance, travel and meetings, and operating supplies, with
much of this attributable to staff vacancies.
Utilities: $377,106 lower than budget. There were clear savings in the budgets for both
potable and recycled water, pointing to the City’s conservation efforts over the last
Fiscal Year.
Contracted Services: $2,075,589 lower than budget. The net savings is primarily due to
several departments not fully utilizing open contracts related to ongoing consulting or
other professional services, and to a budget savings of $408,000 for Fire Services, as
personnel contingencies are built in that were not used in t he Fiscal Year. However, a
budget adjustment (included in Attachment 3) is needed to cover an increase in Police
Services costs related to the contract not entirely covering the pay periods billed in the
Fiscal Year. Staff has worked with the Alameda Count y Sheriff’s Office to ensure that
future contracts correct for the differing number of pay periods in a given year.
Capital Outlay: $1,002,147 lower than budget. This variance is due to funds being
budgeted for multiple small-scale projects or office equipment purchases in the Non-
Building Improvements category that were not spent in Fiscal Year 2015-16. One such
budget was for the purchase of automated license plate readers, which was carried over
into the current Fiscal Year.
Interest & Other: $427,088 lower than budget. This savings resulted from not using
Non-Departmental budgeted contingency funds.
Page 5 of 6
Transfers Out for Capital Improvement Projects
The General Fund transferred out $2.4 million in FY 2015-16 for capital project
expenditures, the largest of which was the $2.0 million seed funding for the Information
Technology (IT) Fund, in accordance with initiatives identified in the IT Master Plan of
2015, which include upgrading the City’s existing IT infrastructure (servers and
backups) and ensuring high speed connectivity to all City facilities.
General Fund Reserve Balances
After transfers out to CIP projects, total reserves increased $11.5 million in FY 2015-16.
It is important to look not only at how total reserves changes over the year, but how the
addition or use of reserves gets shifted and allocated across the reserve categories, as
allowed by the Funds Balance and Reserves Policy.
Total Change to Reserves
Table 2 summarizes how the $11.5 million in new reserves is allocated among reserve
categories. Some of the reserve shifts occur for accounting purposes or are dictated by
the Fund Balance and Reserves Policy, while the other shifts are based on City Council
approval and/or Staff recommendation. Attachment 2 provides the detail of these
allocations.
Table 2: Summary of Reserve Changes
Reserve Change Amount
Non-Spendable - Accounting Adj (757,993)
Restricted - Accounting Adj 79,000
Committed - Additions to Reserves 8,906,626
Committed - Spending of Reserves (8,509,049)
Assigned - Additions to Reserves 8,209,789
Assigned - Spending of Reserves (5,031,358)
Unassigned - Addition to Cash Flow 8,561,517
Total 11,458,532
In summary, the City experienced another budget surplus in Fiscal Year 2015 -16, which
is an indicator or the health of the local economy as well as conservative City budgeting
practices. Such surpluses have allowed the City not only to continue to provide a high
level of community service and maintain top-notch facilities, but to shore up reserves
against future liabilities. As Staff maintains its focus on the long-term fiscal health of the
City’s General Fund, it becomes increasingly important to consider current surpluses in
light of the future projected deficit, as Dublin transitions from a developing City to a
maintenance City. With that in mind, Staff will be updating the current budget as well as
the 10-Year forecast using the information in this report, and will look to the City Council
to provide direction on any additional considerations it would like to see represented in
future budget discussions.
Page 6 of 6
As a final note, Attachment 3 lists the budget adjustments needing City Council
approval to close the books on Fiscal Year 2015 -16. The three General Fund
adjustments have already been incorporated in the numbers presented in this report;
adjustments in other funds are administrative in nature.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. FY 2015-16 General Fund Summary
2. General Fund Reserves Summary
Attach 3 Budget Change Form
GENERAL FUND SUMMARY Attachment 1
FY 2015-16 QUARTER 4
Actual
2014-15
Adopted
2015-16
Amended
2015-16
Actual
2015-16
$ Change from
Amended
% Change
from
Amended
$ Change from
Prior Year
% Change
from Prior
Year
Revenues
Property Taxes 29,437,951 31,786,036 32,913,746 33,598,601 684,855 2%4,160,650 14%
Sales Taxes 18,571,057 20,236,439 20,736,439 20,938,826 202,387 1%2,367,769 13%
Development Revenue 10,513,835 6,867,199 9,379,568 10,562,963 1,183,395 13%49,128 0%
Other Taxes 6,159,654 4,908,000 4,908,000 6,606,016 1,698,016 35%446,362 7%
Licenses & Permits 297,639 281,955 281,955 310,286 28,331 10%12,647 4%
Fines & Penalties 124,529 109,932 109,932 116,016 6,084 6%(8,513) -7%
Interest 550,264 466,191 466,191 2,937,978 2,471,787 530%2,387,714 434%
Rentals and Leases 1,001,581 943,073 943,073 1,114,747 171,674 18%113,166 11%
Intergovernmental 483,300 198,620 198,620 324,075 125,455 63%(159,225) -33%
Charges for Services 5,552,762 3,874,347 4,077,147 5,396,964 1,319,817 32%(155,798) -3%
Community Benefit Payments 2,964,899 675,678 675,678 424,000 (251,678) -37%(2,540,899) -86%
Other Revenue 441,791 358,417 423,285 585,944 162,659 38%144,153 33%
Total Revenues 76,099,262 70,705,887 75,113,634 82,916,416 7,802,782 10%6,817,154 9%
Expenditures
Salaries & Wages 9,465,819 10,535,746 10,565,810 9,437,426 (1,128,384) -11%(28,392) 0%
Benefits 4,395,043 5,074,484 5,074,484 4,172,485 (901,999) -18%(222,558) -5%
Services & Supplies 1,584,944 2,641,339 2,541,531 1,875,458 (666,073) -26%290,514 18%
Internal Service Fund Charges 1,763,226 2,584,258 2,637,371 2,637,354 (17) 0%874,128 50%
Utilities 1,724,116 2,100,310 2,100,310 1,723,204 (377,106) -18%(912) 0%
Contracted Services 37,400,528 39,397,142 41,945,062 39,869,473 (2,075,589) -5%2,468,945 7%
Capital Outlay 174,314 329,250 1,135,624 133,477 (1,002,147) -88%(40,837) -23%
Interest & Other 69,264 717,756 427,088 - (427,088) -100%(69,264) -100%
Contribution to OPEB/PERS 150,000 9,200,000 9,200,000 9,200,000
Total Expenditures 56,577,252 63,530,285 75,627,280 69,048,878 (6,578,402) -9%12,471,626 22%
Operating Impact 19,522,010 7,175,602 (513,646) 13,867,538
Transfers Out (1,393,277) (8,366,292) (12,709,496) (2,409,006)
Impact on Total Reserves 18,128,733 (1,190,690) (13,223,142) 11,458,531
Attachment 2
GENERAL FUND RESERVES
FY 2015-16 4TH QUARTER
Reserve Balances
Actual
2014-15
Increase
2015-16
Decrease
2015-16
NET
CHANGE
Actual
2015-16 Description of Change
Non-Spendable 1,475,691 579 (758,572) (757,993) 717,698
Prepaid Expenses 27,080 - 27,080
Cemetery Endowment 60,000 - 60,000
Advance to Public Facility Fees - - -
Advance to Fire Impact Fee 470,606 579 (390,513) (389,933) 80,672 Addition of interest; pay down of advance
Advance to PERS Side Fund 918,005 (368,059) (368,059) 549,946 Pay down of advance
Restricted 500,000 79,000 - 79,000 579,000
Heritage Park Maintenance 500,000 - 500,000
Developer Contr - Nature Pk - 60,000 60,000 60,000 To account for specific contribution to CIP project
Developer Contr - Heritage Pk - 19,000 19,000 19,000 To account for specific donation received
Committed 38,531,179 8,906,626 (8,509,049) 397,577 38,928,756
Economic Stability 6,000,000 2,000,000 2,000,000 8,000,000 Increased in support of fiscal sustainability initiative
Downtown Public Impr 1,000,000 - 1,000,000
Affordable Housing 1,000,000 (1,000,000) (1,000,000) - Transferred to new Economic Development Reserve
Economic Development 1,000,000 1,000,000 1,000,000 Transferred from Affordable Housing Reserve
Emergency Communications 741,000 - 741,000
Fire Svcs OPEB 9,196,000 2,008,000 (8,200,000) (6,192,000) 3,004,000 To equal valuation, plus 1 yr amortized payment of unfunded liability
Innovations & New Opport 1,372,785 750,000 750,000 2,122,785 Increased funding; approx $500k to be used for PD technology
Jt City / School Projects 46,015 (46,015) (46,015) - To close out project
One-Time Initiative 1,341,408 - 1,341,408
Specific Committed Reserves - -
Emerald Glen Aquatic Complex 3,000,000 - 3,000,000 Decreased for project expenses
Maintenance Facility 250,023 (34,922) (34,922) 215,101 Decreased for project expenses
Cemetery Expansion 5,272,210 - 5,272,210
Fallon Sports Park 2,000,000 - 2,000,000
Civic Ctr Expansion 136,737 (108,964) (108,964) 27,773 Decreased for project expenses
Storm Drain Capture 400,000 178,436 (31,558) 146,878 546,878 Decreased for project expenses
Shannon Center Parking Lot 775,000 300,000 (87,590) 212,410 987,410 Decreased for project expenses
Utility Undergrounding - 1,170,190 1,170,190 1,170,190 City Council-approved funding
Advance to Public Facility Fee 6,000,000 - 6,000,000
Dublin Sports Ground - 2,500,000 2,500,000 2,500,000 For future renovation of Dublin Sports grounds
Assigned 35,875,264 8,209,789 (5,031,358) 3,178,431 39,053,695
Accrued Leave 953,251 35,457 35,457 988,708 To account for the value of earned employee leave
Operating Carryovers 866,562 1,612,658 (866,562) 746,096 1,612,658 To carry over specific operating budgets
CIP Carryovers 1,133,753 1,227,829 (1,133,753) 94,076 1,227,829 To carry over CIP project budgets
Non-Streets CIP Commitments 3,132,016 747,500 747,500 3,879,516 CC-approved designation in June 2016
Catastrophic Loss 10,608,186 760,345 760,345 11,368,531 To equal 15% book value of buildings
Service Continuity 2,771,500 228,500 228,500 3,000,000 To fund future 18-month lag for slowdown of development
Pension & OPEB 9,866,853 1,747,500 (1,000,000) 747,500 10,614,353 CC-approved designation in June 2016, decrease for payment
Fiscally Responsible Adj 325,000 - 325,000
Municipal Regional Permit 2,250,000 (25,000) (25,000) 2,225,000 Decreased for project expenses
HVAC Replacement - 1,000,000 1,000,000 1,000,000 In addition to $1.2 million available in Building Replacement Fund
Relocate Parks Dept - 250,000 250,000 250,000 Upon completion of the new Public Safety Complex
Specific Assigned Reserves -
Civic Ctr Renovation-Police 1,968,143 (6,043) (6,043) 1,962,100 Decreased for project expenses
Contribution to ISF 2,000,000 (2,000,000) (2,000,000) - Decreased for transfer out to IT Fund
Fire Equipment Replacement - 600,000 600,000 600,000 To fund Fire SCBA and radio equipment per contract
Unassigned 21,324,361 14,298,979 (5,737,463) 8,561,517 29,885,877
Unassigned-Unrealized Gains (242,263) (1,955,091) (1,955,091) (2,197,354)
Unassigned (Available)21,566,623 32,083,231 5.5 months of FY 16-17 Budget
TOTAL RESERVES 97,706,494 31,494,974 (20,036,442) 11,458,532 109,165,026
Budget Change Reference #:
From Un-Appropriated Reserves X Budget Transfer Between Funds
From Designated Reserves Other
Account Amount Reason for Adjustment
1001.2405.52101 $49,300
1001.2701.64014 $45,400
1001.2102.64021 $547,220
2106.2801.63202 $3,550
2903.5501.64011 $2,897
6305.1905.72102 $15,000
1005.0000.49151 ($251,000)
2204.0000.42101 ($320,000)
2205.0000.42101 ($110,000)
2801.0000.49161 $270,000
2901.0000.49161 $1,000,000
4101.0000.49161 (Comm. Park Land)$193,000
4103.0000.49161 (Comm. Park Improve.)$1,600,000
4104.0000.49161 (Neighbor. Park Improve.)$320,000
4105.0000.49161 (Comm. Buildings)$1,170,000
4106.0000.49161 (Comm. Library)$330,000
4108.0000.49161 (Aquatic Ctr.)$170,000
CITY OF DUBLIN
FISCAL YEAR 2015-16
BUDGET CHANGE FORM
EXP: General Fund - DRFA - Pension
EXP: General Fund - Animal Services - Contract Services
(Animal Shelter)
EXP: General Fund - Police Services - Contract
Personnel
City Council's Approval Required
EXP: CDBG Fund - Human Services - Community Grant
EXP: ISF Fund - Non - Dept - ISF Equipment
PERS pension unfunded liability for Dougherty Regional Fire
Authority
Increased in animal shelter and field services costs
Additional pay period, budget for 26 pay periods only and actual is
27 pay periods
REV: General Fund - Community Benefit PMT
REV: Public Art Fund - Developer Contribution
REV: Affordable Housing Fund - Developer Contribution
Additional ISF equipment replacements
EXP: Traffic Safety Fund - Traffic Signals - Electric Slightly higher than anticipated electric costs due to additional traffic signals
Additional CDBG fund available to be carried over to FY 16-17 for
Section 108 Loan
REV: Measure B Local Street Fund - Sales & Use Tax Accounted for in Measure BB Fund 2214
REV: Measure B Bike & Ped Fund - Sales & Use Tax Accounted for in Measure BB Fund 2215
Positano project advanced project timeline, CBP collected in
FY14-15
Public art in-lieu fee payment from developers instead of installing
public art
BJP-ROF purchase of 15 Affordable Unit Credit from the City and
delay of Tassajara Highlands payment of its affordable housing in-
lieu fee
Developer paid in-lieu fee instead of applying parkland credit
More building permits issued than anticipated due to advance
timeline of development projects
REV: Public Facilities Fee
C:\Users\colleent\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\5E4CEASC\20_Q4 FY16 Budget Adjustments 20_Q4
FY16 Budget Adjustments
Budget Change Reference #:
FISCAL YEAR 2015-16
BUDGET CHANGE FORM
City Council's Approval Required
4110.0000.49161 (Comm. Nature Pk Land)$35,000
4111.0000.49161 (Comm. Nature Pk Improve.)$245,000
4107.0000.49161 (Civic Ctr.)$1,700,000
4301.0000.49161 (EDTIF1)$450,000
4302.0000.49161 (EDTIF2)$195,000
4304.0000.49161 (Downtown TIF)$115,000
4305.0000.49161 (Dougherty Valley TIF)$550,000
4306.0000.49161 (Tri-valley Trans. Fee)$210,000
4401.0000.49151 (Comm. Benefit PMT)$15,000,000
11/1/2016
Posted By:Date:
As Presented at the City Council Meeting
**********Finance Use Only**********
First Community Benefit Payment for the Dublin Crossing project
More building permits issued than anticipated due to advance
timeline of development projects
REV: Dublin Crossing Fund
REV: Traffic Impact Fees
More building permits issued than anticipated due to advance
timeline of development projects
Advance payment of Dublin Crossing 1600 units
C:\Users\colleent\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\5E4CEASC\20_Q4 FY16 Budget Adjustments 20_Q4
FY16 Budget Adjustments