HomeMy WebLinkAboutItem 8.2 BudgetStudy 1997-98 (2)
CITY CLERK
File # @][2]~~-@]~
.
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: February 25, 1997
SUBJECT:
1997-98 Budget Study Session
Report Prepared by: Richard C. Ambrose, City Manager
EXHIBITS ATTACHED:
Exhibit A:
Exhibit B:
Budget Issues Worksheet
Analysis of Anticipated 1997-98 Impacts on the
City's General Fund
Background Financial Information including
Attachments 1-8
Swnmary of 1996-2000 Capital Improvement
Program by Program Area
Exhibit C:
,Exhibit D:
RECOMMENDATION: rJj1tIl.
~ 2.
3.
Receive Staff Report.
Review Budget Issues Worksheet and provide Staffwith
direction on each of the issues identified in the Worksheet.
Establish Budget Hearing Date to consider 1997-98 Annual
Budget.
. FINANCIAL STATEMENT: See attached.
DESCRIPTION: The City's Annual Budget Study Session provides the City Council
with an opportunity to identify those programs, services, and projects the Council would like Staff to
analyze as part of the development of the City's Annual Operating Budget and Five Year Capital
Improvement Program for the upcoming year. The Budget Study Session also serves as a means of
providing the Council with early information regarding those items that may have a significant impact
(positive or negative) on the City's expenditures and revenues in 1997-98.
The Study Session is also designed to minimize last minute budget issues for which there would be
insufficient time to evaluate.
Attached to this agenda statement are a) "1997-98 Budget Issues Worksheet" (blue) which provides a
framework for the Council to address those budget issues anticipated in Fiscal Year 1997-98; b) an
analysis of anticipated 1997-98 impact on the City's General Fund; c) background financial information
on the City; and d) a summary of the 1997-98 CIP.
The Study Session will be most productive if individual Councilmembers review the Fiscal Year 1996-97
Budget and 1996-2001 Capital Improvement Program documents prior to completing the Budget Issues
Worksheet and bring the completed Budget Issues Worksheet to the Council meeting for purposes of
discussion.
.------------------------CO-PI~ST()~--------------------------------
ITEM NO. ~,,2
g/cc-mtgs/97 -qtr l/feb-97/2-25-97/budgstud.doc
.
1997-98 BUDGET ISSUES WORKSHEET
OPERATING EXPENDITURES
1A. Should the 1996-97 level of service adopted by the City Council as part of the 1996-
97 Adopted Budget for each program area (i.e. Police, Recreation, etc.) be used as
the base level of service in developing the Fiscal Year 1997-98 Budget?
YES
NO
(Please circle one)
or
If you circle "NO", are there services/programs that you would like to see added or
dropped from the base level of service?
Added Services
. Dropped Services
.
1 B. To the extent that high priority objectives require additional resources not available
in the current budget, should the cost of funding those high priority objectives be
identified as an additional bUdget increment?
YES
NO
(Please circle one)
or
1 C. If there is an additional service/program which was not identified in the 1997 Goals
& Objectives Study Session, which you would like evaluated during the
development of the 1997-98 Budget, please identify below.
EXHIBIT A
1 D. During Fiscal Year 1996-97, the City Council funded a number of community groups.
For. each community group identified below, please identify whether the community
groups level offunding should be the same level as Fiscal Year 1996-97 and
included in the base level or in an additional level of service.
.
COMMUNITY GROUP
Dublin Substance Abuse Council
Red Ribbon Week
Dry Grad Night
1996/97
FUNDING
SAME
LEVEL
AS 1996/97
YES/NO
(IF YES,
MARK ONE)
BASE ADDITIONAL
LEVEL LEVEL
Parent Education Program
$ 2,500
$ 2,500
$ 2,650
Dublin Fine Arts Foundation
Organizational Subsidy
Art in the Parks Program
$10,000
$ 2,500
Community Television
Operational Subsidy
$22,006
Resources for Family Development
Child care Support
$12,000
$ 9,000
Tri-Valley ConventionsNisitors Bureau
. 1 E. As indicated in the 1996-97 Budget message, it is possible that the City may not
have sufficient income in 1997-98 to fund the current service level operating
expenditures plus those additional expenditures identified in Exhibit B.
If this situation does occur when both revenue and expenditure estimates are
finalized during the process of developing the budget, prioritize the following
alternatives you would consider to balance the 1997-98 Budget. (Prioritize 1 - 4 with
1 being most preferred and 4 being least preferred.
Reduce Services.
Fund the shortfall from unallocated reserves.
Defer capital projects/equipment which require General Fund support.
Withhold contributions to Equipment Replacement Fund for one year.
CAPITAL EXPENDITURES
2A. Are there additional Capital Projects which are not included in the adopted Five Year
Capital Improvement Program which you would like to see Staff evaluate?
If so, please identify projects below.
.
.
.
.
2B. Of those projects currently identified in the Five Year Capital Improvement Program,
which projects would you like to see funded in Fiscal Year 1997-98?
2C. In the 1996-97 Budget, a total of $759,000 was allocated from the General Fund for
Capital Projects. If this funding is necessary for operating expenditures in 1997-98,
which of the fOllowing alternatives do you prefer for funding Capital Projects in
1997 -98?
1. Defer 1997-98 Capital Projects to 1998-99.
2. Utilize Unallocated Reserves.
3. Utilize Debt Financing.
3. CONTRACT SERVICES
The following service contracts are due to be evaluated this Fiscal Year. Are you interested
in Staff evaluating any aspect of the service other than the cost of providing the service for
Fiscal Year 1997-98. If so, please indicate below.
CONTRACT
COST ONLY
YES/NO
IF "YES" IDENTIFY
OTHER ISSUES
1. Building & Safety
2. Animal Control
3. Crossing Guards
4. General Engineering
5. Traffic Engineering
6. Street Sweeping
4. BUDGET CALENDAR
In order to establish a Budget Calendar for preparation of the Budget and Capital Improvement
Program, it is necessary to establish a budget hearing date(s). Staff would recommend the week
of June 23, 1997.
ANALYSIS OF ESTIMATED FUTURE IMPACTS
ON THE GENERAL FUND
(prepared February 19, 1997)
. Staffhas analyzed potential major items which can affect General Fund Revenues and Expenditures
beginning in Fiscal Year 1997/98 and beyond. The information in some cases is extremely preliminary
and based upon limited information available at this time.
REVENUES AMOUNT
1. Sales Tax: Sales Tax represents nearly 40% of the City's General Budgeted Best Case:
Revenue in Fiscal Year 1996/97. Although certain retail enterprises are planned Anticipate
on the Santa Rita property, it is expected that these will have a limited impact in Limited
Fiscal Year 1997/98. This is due to the lag between when the business begins Opportunity
making sales; when the City receives the revenue; and the end of the City Fiscal for growth
Year (June 30). For example, if a new retail outlet opens in January; the City in 97/98.
receives sales tax revenues in April, May, and June; for transactions which
occurred in January through March. The existing sales tax base is also heavily Depending
weighted towards automobile sales which could deteriorate based upon changes on economy
in the general economy. In addition relocation of businesses from existing and
Dublin planned for the final quarter of 96/97 have the potential to result in a net relocation
decline in total sales tax revenue for Fiscal Year 1997/98. may be an
unknown
decline.
2. Property Tax: In Fiscal Year 1996/97 the City experienced an increase of $110,000
approximately 4.6% in the total assessed value. Approximately 3.0 % of the total Additional
was directly attributable to the Eastern Dublin Annexation. This means that the Revenue
base in the existing City only increased approximately 1.6%. Increases in Fiscal estimated in
Year 1997/98 are expected to be limited in part due to a change in State Law, Fiscal Year
which now establishes the lien date as January 1 st instead of March 1 st. This 1997/98,
means that construction occurring between January and March as well as with
property transfers will not be included on the regular tax roll until Fiscal Year potential for
1998/99. The only known transfer expected prior to the lien date on the Alameda further
County tax exempt Santa Rita property, was the K& B transaction. Estimated growth in
tax growth from new residential construction in western Dublin and the K&B future years
Santa Rita project are projected to add approximately $50,000 in property tax due to
revenue in Fiscal Year 1997/98. Initially a portion of increases in eastern Dublin property
property taxes will be off-set by decreases in the annexation service fees paid by transactions
Dublin Ranch developers. If inflationary adjustments average 1.6% on the on the Santa
existing base, this will result in an additional $60,000 in estimated property tax. Rita
property.
3. Proposition 218 Right To Vote On Taxes Constitutional Amendment: The Reduced
impact of implementing Proposition 218 cannot be fully known until the June 3, Revenues of
1997 election on the proposed local EMS Special Tax. If the proposed tax is Between
approved the City will have an increase in EMS revenue of$45,280. If voters do <$40,720>
not approve the tax the City would lose $27,330. The 1997/98 assessment to
district revenues will be flat. Revenue from NPDES Fees will be reduced by <$113,330>
approximately $86,000.
.
EXHIBIT B
REVENUES
4. Continued State COPS Funding
After the adoption of the City of Dublin 1996/97 Budget the State advised the
City of special police funding included in the State Budget. The City received
approximately $61,000 in Citizens Option for Public Safety (COPS) funds. The
Governor has included funding in the State 1997/98 Budget at the same level as
was provided in FY 96/97. The City will not know if the adopted State Budget
will continue to include these funds until the State legislature takes action.
5. Eastern Dublin Specific Plan Implementation Fee
The City has already imposed a fee to recover the cost of developing the Eastern
Dublin Specific Plan. In accordance with the Specific Plan, it will also be
necessary to implement a fee to recover the cost associated with implementing
the various policies and monitoring the plan. The exact structure of the fee has
not been determined. The amount to be potentially collected in Fiscal Year
1997/98 would depend upon the number and size of development applications
received. It is estimated that the fee may generate $50,000 - $100,000.
AMOUNT
Unknown
Unknown
fees will be
collected
after
implementa-
tion.
OPERATING EXPENDITURES
Identified below is a preliminary list of new expenditures which are anticipated by the Operating
Departments. The expenditures do....not include inflationary increases for the purchase of materials,
supplies, and equipment. Also excluded from this table is any estimate of increased cost of wages and
benefits for current City employees, or other contract service providers. In the 1997 Goals & Objectives
there may also be identified objectives which will require additional funding.
COST ITEM
1.
Liability Insurance Coverage Increase: Preliminary data used by ABAG
PLAN Corporation indicates that the City will receive a premium increase in
Fiscal Year 1997/98. This is due to several factors including: reduced
interest earnings by the insurance pool to offset the estimated losses; and the
premium allocation formula is based heavily on payroll. As the City has
added positions in recent years there is an increase in insurance premiums.
Animal Shelter: The City experienced a one-time savings in Fiscal Year
1996/97 related to the debt service payment towards the new Animal Shelter.
The 1997/98 expenditure will be approximately $26,000 more than estimated
expense for Fiscal Year 1996/97.
Full Year Police Staffing Costs: The 1996/97 budget contained certain
one-time savings due to partial year funding of the civilian Administrative
Assistant position and the two patrol officers required to fully staff the
eastern Dublin beat. The need for the patrol officers was anticipated to
coincide with the opening of the BART Station.
Police Dispatch Costs: Previously the Sheriff revised the methodology for
distributing dispatch costs among users of the system. The modifications
increased the City of Dublin share, and the Sheriff agreed to phase in the
implementation of the increase beginning in Fiscal Year 1994/95. Costs
were scheduled to increase by 20% per year between FY 1994/95 and FY
1998/99.
2.
3.
4.
Additional Cost
$ 7,000
$ 26,000
$ 150,000
$ 64,000 FY 97/98
to
$140,000 FY 98/99
5.
COST ITEM
Full Year Funding Of Police Officer Funded By COPS Grant: The
1996/97 COPS grant was used to add a police officer in November of 1996.
The 1996/97 grant also included certain one-time expenses for furniture and
equipment. If the 1997/98 grant remains the same as the 1996/97 grant (see
revenue section) the City will have an additional $24,200 in expenses to
provide full year funding of the position.
Increased Cost of Contract Fire Service Costs: The contract cost
associated with Fire Services will increase significantly in Fiscal Year
1997/98 due to the dissolution ofDRFA. In the previous year s the City
benefited from the shared cost of an Engine Company serving both Dublin
and San Ramon.
Fire Equipment Reserves: Beginning in Fiscal Year 1996/97 the City will
be responsible for funding reserves for fire equipment replacement. DRF A
did not fund the reserves in Fiscal Year 1996/97 since the decision had been
made to dissolve the entity. These funds are necessary to finance the
replacement of fire apparatus and related equipment. The precise level of
funding is not currently known, however, preliminary calculations by
Alameda County projected a minimum of $1 00,000 per year to replace fire
apparatus.
Additional Cost
$ 24,200
$ 436,000
$ 100,000+
CAPITAL EXPENDITURES
In the adopted 1996 - 2001 Five Year Capital Improvement Program, there are several needed projects,
which have been identified as unfunded. A summary by major program area follows:
CIP PROGRAM AREA AMOUNT
WITHOUT
IDENTIFIED
FUNDING
$ 90,000
2,237,418
23.352.793
$ 25,680,211
6.
7.
Community Improvements
Parks
Streets
TOTAL
Potential Changes To Capital Project Funds Required
Two projects which are underway involve eminent domain actions (PG&E Street Light Acquisition) and
(Dublin Blvd. Widening Project) Depending on the final outcome of these legal actions additional funds
may be required. At the time the 1996-2001 CIP was adopted, a second phase was added to the 1997/98
Dougherty Hills Park Slope Repair Project. The Phase 2 project was projected to add $300,000 in costs.
This amount has also been shown above in the Parks unfunded category.
CTV Representatives have indicated that they will be forwarding a plan requesting capital funds to
complete equipment replacement beginning in Fiscal Year 1997/98. Much of the existing equipment is at
least 10 years old. Preliminary estimates indicate that each City's share would be approximately $20,000
if shared equally. CTV may look at opportunities to fund the replacements over multiple years.
.
.
Attachment 1:
Attachment 2:
Attachment 3:
Attachment 4:
Attachment S:
Attachment 6:
Attachment 7:
Attachment 8:
.
EXHIBIT C
HISTORICAL TRENDS
GENERAL FUND
REVENUES & EXPENDITURES
(Actual 1990/1991 - Budget 1996/1997)
Per Capita Operating Revenues and Expenditures
Comparison of General Fund Revenues By Type
Actual Revenues Compared To Revenues Adjusted To Constant 1991 Dollars
Trends For The Four Major Revenue Categories Represent Over 80% Of Total
Total General Fund Expenditures 1990/91 - 1996/97
Actual Expenditures Compared To Expenditures Adjusted
To Constant 1991 Dollars
General Fund Expenditures By Category
Fiscal Year 1996/97 Budget Summary As Adjusted By Mid-Year Projections
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ATTACHMENT 8
--j
FISCAL YEAR 1996-97 GENERAL FUND BUDGET SUMMARY
ESTIMATED GENERAL FUND APPROPRIATIONS TO RESERVES
(Adjusted to Reflect Authorized Budget Adjustments as of December 31,1996 and
Mid Year Projections Per Staff Report Dated February 4, 1997)
ADJUSTED REVENUES
Estimated General Fund Revenue as Adopted June 1996
Net Revenue Adjustments Approved July 1996 - December 1996
Mid-Year Projected Net Increased Revenues (February 4, 1997 Report)
One Time Revenue Increases
Other Revenue Increases
PROJECTED GENERAL FUND REVENUES
ADJUSTED EXPENDITURES
General Government
Gross Debt Service Civic Center COP
Budgeted Contingent Reserve
Public Safety
Transportation
Health and Welfare
Culture and Leisure Services
Community Development
Capital Improvement Projects
PROJECTED ADJUSTED EXPENDITURES
ADJUSTED NET TRANSFERS
TOTAL ADJUSTED EXPENDITURES AND TRANSFERS OUT
PROJECTED DIFFERENCE IN GENERAL FUND REVENUES
VS. EXPENDITURES (i.e. Additional Appropriation to Reserves)
2120/97 2:21 PM
g;\finance\midYlTpt\1997\ PRJYRENDJ{LS
1,649,060
1,601,985
86,351
7,468,007
707,277
14,000
2,000,640
1,798,334
884,608
16,210,262
27,500
16,273,322
2,310
107,000
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SUMMARY 1996-2001 CAPITAL IMPROVEMENT PROGRAM - COMMUNITY IMPROVEMENTS
Page 2 of 2
UNFUNDED PROJECTS
ESTIMATED
COST
Street Name Identification Sign Replacement Program
$ 90,000
TOTAL COST
$ 90,000
FUNDING SHORTFALL
$90,000
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SUMMARY 1996.2001 CAPITAL IMPROVEMENT PROGRAM - PARKS
Page 2 of 2
UNFUNDED PROJECTS
Dublin Sports Grounds Renovation
Dublin Swim Center Deck Replacement
Dublin Swim Center Boiler Replacement
Dublin School Athletic Field and Play Area Renovation
Frederiksen School Athletic Field and Play Area Renovation
Wells-Cronin Athletic Field Renovation
Nielsen School Athletic Field Renovation
TOTAL COST
Less Park Dedication In-Lieu Fees Collected or Obligated
FUNDING SHORTFALL
.
.
ESTIMATED
.cQSI
$ 440,010
152,930
42,250
914,205
87,835
298,115
337,970
$ 2,273,315
($ 335,897)
$ 1,937,418
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SUMMARY 1996-2001 CAPITAL IMPROVEMENT PROGRAM - STREETS
Page 2 of 2
UNFUNDED PROJECTS
ESTIMATED
COST
Dougherty Road Improvements - From South of Amador Valley Boulevard to
Houston Place (Phase II)
Dougherty Road Improvements - Houston Place to 1-580
Downtown Street Light Additions
Dublin Boulevard Improvements - Sierra Court to Dougherty Road
Dougherty Road Improvements - Amador Valley Boulevard North to City Limits (a)
Scarlett Drive Extension - Dougherty Road to Dublin Boulevard (b)
1-580 Offramp Improvements at San Ramon Road
San Ramon Road Slope Stabilization Between Vomac Road and Alcosta Boulevard
New Street Parallel to and South of Dublin Boulevard
$ 3,561,012
1,771,432
80,000
2,625,220
3,538,600
8,313,833
845,000
400,000
2,246,719
TOTAL COST
$ 23,381,816
Less Traffic Impact Fees Collected or Obligated
. FUNDING SHORTFALL
($ 29,023)
$ 23,352,793
(a) This amount includes $13,460 in Traffic Impact Fees which have been collected to date.
(b) This amount includes $16,563 in Traffic Impact Fees which have been collected to date.
.