HomeMy WebLinkAbout8.1 - 2502 Fiscal Year 2018-19 2nd Quarter Financial R
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STAFF REPORT
CITY COUNCIL
DATE: March 19, 2019
TO: Honorable Mayor and City Councilmembers
FROM:
Christopher L. Foss, City Manager
SUBJECT:
Fiscal Year 2018-19 2nd Quarter Financial Review
Prepared by: Colleen Tribby, Director of Administrative Services
EXECUTIVE SUMMARY:
The City Council will receive a financial report through the second quarter for Fiscal
Year 2018-19 and consider amendments to the Fiscal Year 2018-9 Budget via a budget
change. The City Council will also receive an update to the City's 10-Year Forecast.
STAFF RECOMMENDATION:
Receive the report and approve the budget change.
FINANCIAL IMPACT:
Approval of the budget change will result in the addition of $2,250,000 to the General
Fund revenue budget and $558,000 to the General Fund expenditure budget, as well as
the addition of $2,000,000 to transfers out of the General Fund. Total General Fund
reserves are projected at $133,358,306 by June 30, 2019. This report also contains
various budget changes in other funds requiring City Council approval.
DESCRIPTION:
The purpose of this report is to update the City Council on the status of the Fiscal Year
2018-19 General Fund Amended Budget and projected reserves and provide an
overview of the most recent 10-Year Forecast. As a reminder, the Amended Budget
includes budget amendments already approved by the City Council since July 1, as well
as carry-over budgets from the prior year. The Budget Change Form (Attachment 4)
lists all new amendments needing approval in the General Fund as well as in other
funds.
Projected General Fund Results (Attachment 1)
General Fund revenues are projected to come in $2,250,000 higher than the Amended
Budget, accounting for higher sales tax, property tax, and interest income. Increased
sales tax revenue accounts for $1,200,000 of the additional revenue, primarily due to
performance in the Autos and Transportation sector ove r the first two quarters of the
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year ($1,100,000). According to the City’s sales tax consultant, much of this revenue is
likely non-recurring in nature, resulting from the catching up of backlogged car
purchases. It is also unknown at this point whether this activity will continue for the last
two quarters of the fiscal year or will normalize by year end. Property tax revenue is
projected to be $500,000 higher than budget, accounting for continued increases in
property values in Dublin. Interest income is expected to come in $550,000 higher than
budget, as the City’s total cash has increased, and Staff have worked with Chand ler
Asset Management to maximize earnings on those funds.
On the expenditure side, Staff is planning for an increase of $306,000 to the Dougherty
Regional Fire Authority retiree health liability (a closed plan), resulting from CalPERS
lowering its expected earnings rate. Other expenditure budget increases are needed for
office reorganization and related fixtures ($198,000), the Mayor’s attendance at the US
Conference of Mayors ($4,000 – out of state), increased utilities costs ($10,000), and
increased police booking fees ($40,000).
In addition, the budget for General Fund transfers is being increased by $2,000,000 to
account for further improvements constructed for the Public Safety Complex project,
including structural upgrades, replacement of the existing parking lot adjacent to the
Alameda County Fire Department side of the building, and installation of a solar voltaic
system within the police parking lot.
After incorporating those changes, total reserves are projected to decrease $8,757,081
from the prior year, as illustrated in the table below.
General Fund Reserve Changes
The decrease in reserves is due entirely to the planned use of reserves for capital
projects. The City has $16,690,746 budgeted in transfers out of the General Fund, the
majority of which ($14,690,746) are covered by Committed and Assigned Reserves, as
follows:
Transfers from Committed Reserves 8,475,191$
Transfers from Assigned Reserves 6,215,555$
Other Transfers (from Cash Flow)2,000,000$
Total Transfers out of General Fund 16,690,746
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A summary of the changes to specific reserves is provided as Attachment 2 (General
Fund Reserves Summary). A detailed list of transfers out of the General Fund is
provided as Attachment 3.
10-Year Forecast
At the previous budget adoption in May 2018, Staff presented the 10-Year General
Fund Forecast, which projected an operating deficit of $1.4 million in Fiscal Year 2024 -
25. Because of growth in property tax, sales tax (including non-recurring revenue), and
development revenue in the current year and projected into next year, the 10-Year
Forecast is now balanced at Fiscal Year 2027-28.
It is important to note that the Forecast does not incorporate any major stru ctural shifts
over the 10-year period (e.g., new businesses coming into Dublin, increased Police
Services beyond what is included in the two -year projection, or any other significant
investment in capital projects using the General Fund). At the presentation of the
preliminary Fiscal Year 2019-20 budget (scheduled for April 2, 2019), Staff will include a
discussion of capital project funding sources which may impact the General Fund in the
future. In addition, while the City is set to absorb the recent annual increases resulting
from CalPERS lower investment earnings and has built that cushion into the Forecast,
Staff will continue to look for opportunities to increase reserves to weather such
dramatic increases in the future.
The following is a summary of major assumptions used in the updated 10-Year Forecast
(Year 1 is Fiscal Year 2018-19):
Revenue
Property Tax:
• Years 1 – 5 growth: 6.7%, 8.2%, 5.2%, 5%, 4%
• Years 6 – 10 growth: 2.7% ($1.5 million) annually
Sales Tax:
• Years 1 – 2 growth: 4.1%, 3.4%
• Years 3 – 4: recessionary adjustment growth 1.0%
• Year 5: flat
• Years 6 – 10 growth: 2% ($400,000) annually
• No new large sales tax generators in 10-year period
Development Revenue:
• Two-year estimates from building and planning divisions
• Year 3: Decline of 2.1%
• Years 4 – 10: Average annual decline of 11.8% ($690,000)
Expenditures
Personnel Costs:
• Two-year actual salaries and benefits based on current position allocation
• Years 3 – 10 growth: 4.2% ($920,000) annually
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• Extra funding of DRFA OPEB liability: $300,000 annually
Contracted Services (Average Annual Change):
• Police Services – two-year agreement, then 5.5% increase ($1.4 million) annually
• Fire Services – five-year agreement, then 4.5% increase ($800,000) annually
• Maintenance Services (MCE) – 3.8% increase ($220,000) annually
• Development – 11.6% decrease ($580,000) annually
• Other Contracted Services – 4.0% increase ($690,000) annually
Internal Service Charges
• $250,000 annual funding, beginning in Year 3, for building/equipment replacement
All other:
• Minimal (1%) annual increases
Non-General Fund Items
In addition to the above changes to the General Fund, there are various budget
amendments in other funds that require City Council approval:
1) Increase Dublin Blvd. Improvements – Sierra Court to Dublin Court (CIP no.
ST1012) project budget by $525,000 to account for additional improvements,
including repaving and installing a video detection system at the intersection of
Dublin and Dougherty, installing street lighting along the Dublin Sports Grounds
parking lot, and performing emergency pavement repairs on Village Parkway.
The funding comes from Gas Tax ($500,000) and a reimbursement by Zayo
Communications of project-related improvement costs incurred by the City within
the project limits ($25,000).
2) Remove $45,000 in Measure D funding for the construction of stormwater trash
capture devices (CIP no. ST0419), as this funding source can no longer be used
for that purpose.
3) Make adjustments in Public Facilities Fees Funds budgets to account for $5,676
in closing costs for the purchase of the ACSPA property as part of the Dublin
Crossing project; to transfers funds from the Neighborhood Parkland Fund and
Community Nature Parkland Fund to the Quimby Act Fund ($1,158,805) to cover
the Iron Horse parkland purchase; and to account for in-lieu fees received from
developers ($1,740,000).
4) Appropriate $15,000 in the Eastern Dublin Traffic Impact Fee Fund (EDTIF1) for
professional services to update the impact fee program.
Other Administrative Items
The following out of state travel items have already been incorporated into the Fiscal
Year 2018-19 budget as presented in this report.
Out of State Travel:
1) Mayor: United States Conference of Mayors in Honolulu, Hawaii
2) Special Projects Manager: Association of Defense Commun ities Installation
Innovation Forum in Miami, Florida
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3) Special Projects Manager: Association of Defense Communities Annual Summit
in Washington, DC
STRATEGIC PLAN INITIATIVE:
Strategy #1: Assure the City's long-term financial sustainability;
Strategic Objective A: Maintain strong conservative fiscal policies.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. General Fund Summary
2. General Fund Reserves
3. General Fund Transfers Out
4. Budget Change
GENERAL FUND SUMMARY ATTACHMENT 1
FY 2018-19 2ND QUARTER
Actual
2017-18
Adopted
2018-19
Amended
2018-19
2nd Quarter
Adjustments
New
Amended
2018-19
Revenues
Property Tax 40,628,040 40,130,168 43,330,168 500,000 43,830,168
Sales Tax 20,286,396 20,758,196 21,158,196 1,200,000 22,358,196
Sales Tax Reimbursements (562,731) (628,500) (628,500) (628,500)
Development Revenue 13,551,788 8,286,433 8,387,573 8,387,573
Other Taxes 7,366,201 6,573,100 6,573,100 6,573,100
Licenses & Permits 318,400 272,013 272,013 272,013
Fines & Penalties 134,022 111,432 111,432 111,432
Interest Earnings 1,932,519 1,328,987 1,328,987 550,000 1,878,987
Rentals and Leases 1,243,389 1,147,218 1,147,218 1,147,218
Intergovernmental 153,834 234,919 234,919 234,919
Charges for Services 7,218,457 6,787,895 6,787,895 6,787,895
Community Benefit Payments 670,000 641,000 641,000 641,000
Other Revenue 1,007,224 836,026 1,013,563 1,013,563
Subtotal Revenues 93,947,539$ 86,478,887$ 90,357,564$ 2,250,000$ 92,607,564$
Unrealized Gains/Losses (2,751,679) -
Transfers In 135,151 -
Total Revenues 91,331,011$ 86,478,887$ 90,357,564$ 2,250,000$ 92,607,564$
Expenditures
Salaries & Wages 10,878,367 12,453,627 12,452,427 12,452,427
Benefits 4,666,642 5,924,104 6,244,025 306,000 6,550,025
Services & Supplies 2,231,135 3,012,493 3,151,783 4,000 3,155,783
Internal Service Fund Charges 3,049,920 2,985,004 2,985,004 2,985,004
Utilities 2,779,522 3,090,055 3,121,735 10,000 3,131,735
Total Contracted Services *43,724,128 48,869,314 49,286,501 40,000 49,326,501
Capital Outlay 357,516 163,770 339,601 198,000 537,601
Contingency & Miscellaneous 20,000 210,000 161,000 161,000
Chevron Debt Payment - 4,064,515 4,064,515
Subtotal Expenditures 67,707,229$ 76,708,367$ 81,806,592$ 558,000$ 82,364,592$
Carryovers from Prior Year 1,240,217 2,309,306 2,309,306
Total Expenditures 68,947,446$ 76,708,367$ 84,115,898$ 558,000$ 84,673,898$
Operating Impact 22,383,566$ 9,770,520$ 6,241,666$ 1,692,000$ 7,933,666$
One Time Adjustment for Accruals
Transfers Out (4,670,532) (6,243,000) (14,690,746) (2,000,000) (16,690,746)
Impact on Total Reserves 17,713,033$ 3,527,520$ (8,449,081)$ (8,757,081)$
TOTAL RESERVES 140,128,693$ 131,679,612$ 131,371,612$
* Contracted Services Detail (1) (2)
Actual
2017-18
Adopted
2018-19
Amended
2018-19
2nd Quarter
Adjustments
New
Amended
2018-19
Police Services 17,404,255 19,078,235 19,178,235 40,000 19,218,235
Fire Services 12,079,373 13,125,673 13,130,170 13,130,170
Maintenance Services (MCE)4,879,545 5,158,925 5,232,925 5,232,925
Development 7,961,870 5,948,048 6,492,525 6,492,525
Other Contracted Services 2,578,241 5,558,433 6,534,717 6,534,717
Total Contracted Services 43,222,525$ 48,869,314$ 50,568,572$ 50,608,572$
(1) Contracted Services Detail includes carryovers from FY 2017-18 totaling $1,282,070.
(2) Police and Fire liabilty insurance amounts are shown in Services & Supplies above.
GENERAL FUND RESERVES ATTACHMENT 2
FY 2018-19 2ND QUARTER
Reserve Balances
Actual
2016-17
Actual
2017-18
Increase
2018-19
Decrease
2018-19
NET
CHANGE
Projected
2018-19
Non-Spendable 198,875$ 7,432$ -$ -$ -$ -$
Prepaid Expenses 39,262 7,432 - 7,432
Advance to Public Facility Fees - - - -
Advance to PERS Side Fund 159,613 - - - -
Restricted 1,762,000$ 1,938,000$ -$ -$ -$ 500,000$
Heritage Park Maintenance 750,000 750,000 - 750,000
Cemetery Endowment 60,000 60,000 - 60,000
Developer Contr - Downtown 873,000 1,049,000 - 1,049,000
Developer Contr - Nature Pk 60,000 60,000 - 60,000
Developer Contr - Heritage Pk 19,000 19,000 - 19,000
Committed 36,213,716$ 43,740,494$ 1,000,000$ (6,210,172)$ (5,210,172)$ 3,987,658$
Economic Stability 8,000,000 8,000,000 - 8,000,000
Public Safety Reserve 1,600,000 2,000,000 - 2,000,000
Downtown Public Impr 452,170 3,000,000 - 3,000,000
Economic Development 2,000,000 3,000,000 - 3,000,000
Emergency Communications 741,000 741,000 - 741,000
Fire Svcs OPEB 3,334,672 3,584,672 - 3,584,672
Innovations & New Opport 1,813,408 1,813,408 - 1,813,408
One-Time Initiative 1,341,408 6,341,408 (1,500,000) (1,500,000) 4,841,408
Specific Committed Reserves -
Maintenance Facility 76,033 71,753 (71,753) (71,753) -
Cemetery Expansion 5,272,210 5,270,876 (1,491,737) (1,491,737) 3,779,139
Fallon Sports Park 200,000 110,500 (9,995) (9,995) 100,505
Civic Ctr Expansion 22,746 22,746 (22,746) (22,746) -
Storm Drain Trash Capture 722,198 118,303 1,000,000 (1,118,303) (118,303) -
Shannon Center Parking Lot 967,680 - - -
Utility Undergrounding 1,170,190 1,170,190 - 1,170,190
Advance to Public Facility Fee 6,000,000 6,000,000 - 6,000,000
Dublin Sports Ground 2,500,000 2,495,638 (1,995,638) (1,995,638) 500,000
Assigned 50,126,808$ 57,267,840$ -$ (2,263,000)$ (2,263,000)$ 9,207,460$
Accrued Leave 998,235 1,072,508 - 1,072,508
Operating Carryovers 1,240,217 2,169,276 - 2,169,276
CIP Carryovers 1,739,331 4,272,555 - 4,272,555
Non-Streets CIP Commitments 3,879,516 4,000,000 - 4,000,000
Catastrophic Loss 13,918,531 14,764,599 - - 14,764,599
Service Continuity 3,150,000 3,150,000 - 3,150,000
Pension Rate Stabilization Plan 2,000,000 2,000,000 - 2,000,000
Chevron Debt Payoff 5,238,622 4,656,742 - 4,656,742
Pension & OPEB 10,614,353 12,000,000 - 12,000,000
Fiscally Responsible Adj 325,000 325,000 - 325,000
Municipal Regional Permit 1,870,030 2,370,030 (193,000) (193,000) 2,177,030
HVAC Replacement 2,000,000 2,000,000 (2,000,000) (2,000,000) -
Relocate Parks Dept 250,000 250,000 - 250,000
Parks and Streets Contingency 250,000
Specific Assigned Reserves -
Civic Ctr Renovation-Police 1,962,100 1,962,100 - 1,962,100
Façade Improvement Grants 250,000 234,157 (70,000) (70,000) 164,157
Contribution to ISF 500,000 1,500,000 - 1,500,000
Fire Equipment Replacement 190,873 290,873 - 290,873
Unassigned 34,114,261$ 37,174,927$ 8,473,172$ (9,757,081)$ (1,283,908)$ 35,891,018$
Unassigned-Unrealized Gains (3,860,531) 3,000,862 3,000,862
Unassigned (Available)37,974,792 34,174,064 32,890,156
TOTAL RESERVES 122,415,659$ 140,128,693$ 9,473,172$ (18,230,253)$ (8,757,081)$ 131,371,612$
GENERAL FUND TRANSFERS OUT ATTACHMENT 3
FY 2018-19 2ND QUARTER
CIP Projects Funded by
Specific Committed Reserves
Budget
Balance
17-18
Adopted
18-19
Carried
Over
Budget
Adjustments
2nd Quarter
Adjustments
New
Amended
18-19
Projected
19-20
HVAC Replacement - Civic Center 2,000,000 2,000,000
ERP Replacement 1,845,000
Citywide Signal Communications Upgrade 1,500,000 1,500,000
AVB, Wildwood, Stagecoach Impr 193,000 193,000
Maintenance Yard 71,753 71,753 71,753
Civic Center Modifications 22,746 22,746 22,746
Shannon Center Parking Lot Impr 72,019 72,019 72,019
Dublin Heritage Cemetery Phase II 1,491,737 1,491,737 1,491,737
Dublin Sports Grounds Rehab 295,638 1,700,000 295,638 1,995,638
Fallon Sports Park - Phase II 9,995 9,995 9,995
Storm Drain Trash Capture 118,303 1,000,000 118,303 1,118,303
Subtotal 2,082,191$ 4,700,000$ 2,082,191$ 1,693,000$ -$ 8,475,191$ 1,845,000$
CIP Projects Funded by
Assigned Reserves Balance
Adopted
18-19
Carried
Over
Budget
Adjustments
2nd Quarter
Adjustments
New
Amended
18-19
Projected
19-20
Citywide Bicycle and Pedestrian Impr 216,000 108,000 216,000 324,000 108,000
EV Charging Stations 150,000 150,000
City Entrance Monument Signs 285,000 285,000
San Ramon Rd Trail Improvements 101,410 101,410 101,410
San Ramon Rd Landscape 238,660 238,660 238,660
Police Services Building 3,500,000 3,500,000 400,000 3,900,000
Dublin Blvd Extension 123,000 123,000 123,000
Dougherty Rd to Sierra 93,485 93,485 93,485
Transfer to Equipment Replacement 1,000,000 1,000,000 1,000,000
Subtotal 4,272,555$ 1,543,000$ 4,272,555$ 400,000$ -$ 6,215,555$ 1,108,000$
TOTAL TRANSFERS TO CIP's 6,354,746$ 6,243,000$ 6,354,746$ 2,093,000$ -$ 14,690,746$ 2,953,000$
Other Transfers (from Cash Flow) Balance
Adopted
18-19
Carried
Over
Budget
Adjustments
2nd Quarter
Adjustments
New
Amended
18-19
Projected
19-20
Public Safety Complex - - - - 2,000,000 2,000,000
TOTAL OTHER TRANSFERS -$ -$ -$ -$ 2,000,000$ 2,000,000$ -$
Total Transfers Out of General Fund 6,354,746$ 6,243,000$ 6,354,746$ 2,093,000$ 2,000,000$ 16,690,746$ 2,953,000$
Budget Change Reference #:
From Un-Appropriated Reserves X Budget Transfer Between Funds
From Designated Reserves Other
GI0116.9400.9401 (Improvements - Not Building)$1,400,000.00
GI0116.9400.9401 (Improvements - Not Building)$600,000.00
3300.9301.49999 (Transfers In)$2,000,000.00
GI0116.1001 (1001.9301.89101) - General Fund - Transfers Out $2,000,000.00
ST1012.9400.9401 (Improvements - Not Building)$500,000.00
ST1012.9400.9401 (Improvements - Not Building)$25,000.00
3600.9601.49141 (Reimbursements- General)$25,000.00
3600.9601.49999 (Transfers In)$500,000.00
ST1012.2201 (2201.9601.89101) - Gas Tax Fund - Transfers Out $500,000.00
ST0419.9200.9201 (Contract Services - General)($45,000.00)
3600.9601.49999 (Transfers In)($45,000.00)
ST0419.2302 (2302.9601.89101) - Measure D Fund - Transfers Out ($45,000.00)
1001.2405.52105 (PERS)$306,000.00
General Fund - Police Operations Support
1001.2111.64051 (Booking Fees)$40,000.00
General Fund - City Council
1001.1101.61503 (Travel & Conferences)$4,000.00
General Fund -Public Safety Complex
1001.1802.63202 (Electricity)$10,000.00
Mayor's attendance of United States Conference of
Mayors in Honolulu, Hawaii
Additional fees due to the City has exceeded the 3-
year average of "specific non-felony booking"
Higher than anticipated electricity cost
ATTACHMENT 4
Stormwater Trash Capture Device Installation
Rules for utilizing Measure D funds have changed
and these funds cannot be used to design or
construct stormwater trash capture devices
Dublin Boulevard Improvements – Sierra Court to Dublin Court
Account for the additional improvements constructed
by the project, including repaving and installing video
detection at the intersection of Dublin and
Dougherty, installation of street lighting along the
Dublin Sports Grounds parking lot, and emergency
pavement repairs on Village Parkway and account
for the reimbursement of improvements constructed
by the City of Dublin within the project limits for Zayo
Communications
CITY OF DUBLIN
FISCAL YEAR 2018-19
BUDGET CHANGE FORM
Public Safety Complex – Police Services Building
City Council's Approval Required
CIP
Account for additional improvements constructed by
the project, including structural upgrades necessary
to bring the building up to “essential facility” status
and replacement of the existing parking lot adjacent
to the Alameda County Fire Department side of the
building and installation of 180 kVA solar voltaic
system within the police parking lot.
OPERATING EXPENDITURES
DRFA retirement unfunded liabilityGeneral Fund - DRFA
G:\Budget Changes\11_2018-19\CC\z_Q2 Budget Adj_031919 z_Q2 Budget Adj_031919
Budget Change Reference #:
FISCAL YEAR 2018-19
BUDGET CHANGE FORM
City Council's Approval Required
General Fund - Multiple Programs - Furniture
770299.6000.6001 (PCS Admin)$18,000.00
1001.1601.71101 (Finance)$60,000.00
1001.3101.71101 (Public Works Admin)$120,000.00
4101.1901.85102 (Community Parkland Fund - Principal Payments)$5,676.00
4102.1901.89101 (Neighborhood Parkland Fund - Transfers out)$869,169.51
4110.1901.89101 (Community Nature Parkland Fund - Transfers
out)$289,635.54
4109.1901.89101 (Quimby Act Fund - Transfers in)$1,158,805.05
4301.8301.65101 (Professional Services)$15,000.00
1001.0000.46101 (Interest)$550,000.00
1001.0000.42101 (Sales Tax)$1,200,000.00
1001.0000.41103 $500,000.00
3/19/2019
Posted By:Date:
Office furniture replacement and standardization
**********Finance Use Only**********
As Presented at the City Council Meeting
REVENUES
General Fund - Motor Vehicle In-Lieu Fee
General Fund - Interest Income
General Fund - Sales Tax
Higher than anticipated interest rate
Public Facilities Fee - Non-Dept
Additional scope for EDTIF update
Transfer out from Neighborhood Parkland Fund and
Community Nature Parkland Fund to balance
Quimby Act Fund for the acquisition of Iron Horse
park land
EDTIF1 - Engineering - Professional Services
Include closing cost as part of the principal payment
Higher than anticipated revenue
Clean up payments from FY 2017-18; one time
increase in the Auto sector
G:\Budget Changes\11_2018-19\CC\z_Q2 Budget Adj_031919 z_Q2 Budget Adj_031919