HomeMy WebLinkAbout4.3 - 3443 Fiscal Year 2019-20 4th Quarter Financial R
Page 1 of 7
STAFF REPORT
CITY COUNCIL
DATE: November 3, 2020
TO: Honorable Mayor and City Councilmembers
FROM:
Linda Smith, City Manager
SUBJECT:
Fiscal Year 2019-20 4th Quarter Financial Review
Prepared by: Lisa Hisatomi, Director of Administrative Services
EXECUTIVE SUMMARY:
The City Council will receive a financial report on the fourth quarter of Fiscal Year 2019 -
20 and consider amendments to General Fund reserve designations.
STAFF RECOMMENDATION:
Receive the report and confirm General Fund reserve designations as of June 30, 2020.
FINANCIAL IMPACT:
City Council confirmation of General Fund reserve designations will not alter amounts
received or spent but will allow Staff to close the Fiscal Year 2019 -20 financial books.
Total General Fund reserves are projected at $190.6 million at June 30, 2020, with
$58.4 million in the unassigned cash flow reserve, representing 8.5 months of the Fiscal
Year 2020-21 Adopted Budget. All other funds comply with policies governing fund
balance.
DESCRIPTION:
This report transmits the preliminary financial results of the Fiscal Year 2019 -20 year-
end, focusing on the General Fund. At this time, the numbers are essentially final, and
though adjustments may happen as the audit is finalized, Staff does not expe ct
substantial changes from the numbers in this report. The Comprehensive Annual
Financial Report, which will be presented to the City Council at its second meeting in
December 2020, will contain the final audited results.
General Fund Overview (Attachment 1)
General Fund operating revenues totaled $102.9 million in Fiscal Year 2019 -20, a
decrease of $4.5 million from the prior year. Removing unrealized gains and transfers
in, operating revenues decreased $5.8 from the prior year. General Fund expenditures
totaled $83.5 million; removing contributions to other funds and transfers out, operating
expenditures decreased $2.7 million from the prior year. Contributions to capital projects
Page 2 of 7
and other funds totaled $9.2 million, an increase of $7.9 over the prior y ear. The
resulting impact on total General Fund Reserves was an increase of $19.4 million, as
shown in Table 1.
Table 1: General Fund Summary
FY 2018-19 FY 2019-20
Total Reserves, Beginning of Year $142,112,669 $171,225,773
Total Revenues 107,391,738 102,909,631
Total Expenditures (76,964,506)(74,251,883)
Total Transfers to CIPs/ISF (1,314,129)(9,234,298)
Total Reserves, End of Year $171,225,773 $190,649,224
Change $19,423,450
The primary drivers of the decrease in year-to-year revenues was the economic impact
of COVID-19 and the shelter-in-place order, resulting in business shutdowns, combined
with already flattening sales tax revenue and a slowdown in development activity that
began early on in Fiscal Year 2019 -20. Specific revenue and expenditure changes (+/-
$200,000 compared to Fiscal Year 2018-19 actuals and to the Fiscal Year 2019-20
budget) are discussed below. The General Fund Summary (Attachment 1) presents
this data by major category.
Revenues
Property Tax (+$4,792,734 vs. prior year / +$1,551,581 vs. budget)
Property Tax revenue in Fiscal Year 2019-20 increased along with a gain in net
assessed valuation by $1.7 billion (10.4%) over the prior year, which was the largest
percentage growth in Alameda County. The COVID-19 pandemic did not have a
significant impact on Property Tax revenues since the values were placed on the tax roll
in calendar year 2018, and there were no significant delinquencies.
Sales Tax (-$3,377,151 vs. prior year / -$253,992 vs. budget)
Overall Sales Tax came in $3.4 Million (13.6%) lower than Fiscal Y ear 2018-19. While
the City had expected a decline from the prior year due to one -time receipts in Fiscal
Year 2018-19 and to flattening sales in the Autos and Transportation sector, the
COVID-19 pandemic and related shutdowns aggravated the decline. In th e first two
combined quarters of calendar year 2020 compared to the same period the previous
year, declines were seen in Autos and Transportation (-9.5%), General Consumer
Goods (-21.1%), Business and Industry (-10.7%), Restaurants and Hotels (-24.5%),
Building and Construction (-13.2%), and Fuel and Transportation (-21.0%). Some of this
decrease may be attributed to deferred payments, however much of it is related to the
business closures and modified operations.
Development Revenue (-$3,886,952 vs. prior year / -$1,230,486 vs. budget)
This category includes revenues associated with permits for new development (primarily
building permits) as well as tenant improvements on current structures. It also includes
fees for City services provided, most typically zoning and plan checking services. The
Page 3 of 7
decrease is due to the slowdown of development activities prior to the outbreak of
COVID-19, which was exacerbated by the pandemic and related industry shutdowns.
Transient Occupancy Tax (-$517,005 vs. prior year / +$167,987 vs. budget)
Over the last few months of Fiscal Year 2019-20, the hotel industry faced an abrupt and
unprecedented drop in business due to the outbreak of COVID-19.
Other Taxes (-$426,182 vs. prior year / +$312,936 vs. budget)
This category includes Property Transfer Tax and Franchise Fees for garbage and
utilities. Property Transfer Tax is typically budgeted conservatively, as it fluctuates with
the real estate market. In Fiscal Year 2019-20, the net decrease in Other Taxes from
the prior year is related entirely to a decline in property sales, reflecting 817 transfers of
ownership (for single-family residential as well as multi-family, commercial, and
industrial types combined) versus 1,543 transfers the year before.
Interest (+$456,878 vs. prior year / +$1,652,445 vs. budget)
Interest earnings reflect the strategies used by Chandler Asset Management in
managing the City’s portfolio, which has maintained a healthy balance of investment
types. The total value of the City’s investment portfolio increased 10% compared to
Fiscal Year 2018-19. In addition, higher LAIF yields prior to COVID-19 also contributed
to the increase in interest earnings.
Charges for Services (-$1,914,794 vs. prior year / -$791,592 vs. budget)
The net change in Fiscal Year 2019-20 is primarily due to a significant decrease in
Parks and Recreation program revenues, as many recreation programs were cancelled
due to COVID-19.
Other Revenue (+$159,876 vs. prior year / +$328,015 vs. budget)
This increase is due to a reimbursement from the Alameda County Fire Department for
improvements made to Fire’s side of the building during the construction of the Public
Safety Complex. These are one-time revenues.
Expenditures
Salaries and Wages (-$259,594 vs. prior year / -$1,350,529 vs. budget)
Staff costs came in lower than the prior year, and lower than budgeted, as a number of
vacant positions remained unfilled during the year. In addition, seasonal salaries came
in significantly lower due to the cancellation of recreation programs impacted by COVID-
19.
Benefits (+$110,317 vs. prior year / -$794,386 vs. budget)
This variance is primarily attributed to vacant positions and a lower retiree health
contribution.
Services and Supplies (-$251,216 vs. prior year / -$814,817 vs. budget)
Reductions in expenditures for supplies and services in Fiscal Year 2019 -20 occurred
primarily due to the closure of City facilities, with a majority of staff teleworking through
the end of the year.
Utilities (-$317,213 vs. prior year / -$322,165 vs. budget)
This variance occurred primarily due to the closure of City facilities.
Page 4 of 7
Contracted Services (-$604,598 vs. prior year / -$6,393,264 vs. budget)
Nearly all City contracts came in lower than the prior year and under budget in Fiscal
Year 2019-20 due to the COVID-19 shutdowns. Development services contracts
finished the year $2.1 million under budget, which offsets the corresponding loss in
revenue for that period, due to a slowdown in activity that began before and continued
through the Shelter-in-Place Order. Other general City contracts were under budget
$667,928, the MCE contract was under budget by $515,480, and recreation contract
costs were under budget by $405,454. Additionally, non-departmental contract services
(e.g., animal services, library services, citywide projects) were $1.2 million under
budget. Of that amount, $791,000 will be carried over to Fiscal Year 2020 -21 for work
on the City’s green infrastructure program, Downtown Dublin Preferred Vision, and
fiscal consulting.
The police services contract came in under budget by $526,900, which will be carried
over to Fiscal Year 2020-21 to offset any dispatch overages and to fund public safety
one-time needs. Budget savings in the Fire services contract amounted to $422,228,
which Staff proposes to contribute to the Fire Services Pension/OPEB Reserve.
Capital Outlay (+$2,672,646 vs. prior year / -$424,365 vs. budget)
Capital Outlay expenditures were higher than in Fiscal Year 2018-19 due to the City’s
participation in the Amador Plaza land acquisition as part of the Downtown Preferred
Vision project. The variance to budget is due to unspent funds for the purchase of
situational awareness cameras and auto license recognition cameras, and for the Public
Works workspace reconfiguration. These budgets will be carried into Fiscal Year 2019 -
20.
Transfers Out for Capital Improvement Projects
The General Fund transferred out $8.0 million in Fiscal Year 2019-20 for capital project
expenditures; of that amount, $7.7 Million was covered by Committed /Assigned
Reserves. Table 2 summarizes the CIPs funded by the General Fund.
Page 5 of 7
Table 2: General Fund CIPs
Project Amount
Committed/Assigned
EV Charging Stations $6,316
Maintenance Yard Facility Improve 13,403
Dublin Heritage Park Cemetery Phase 43,973
Citywide Signal Comm. Upgrade 79,851
Police Services Building 5,641,075
Imagine Playground at Dublin Sports Grounds 1,884,305
Subtotal - Committed/Assigned $7,668,923
Undesignated
AVB - Wildwood Rd Intersection Improvements $120,000
Citywide Bicycle & Pedestrian Improvements 214,234
San Ramon Road Trail Improvements 2,075
Subtotal - Undesignated $336,309
Total - General Fund $8,005,232
Reserves (Attachment 2)
In June 2020, based on estimated revenues and expenditures at that time, the City
Council approved allocations to specific Committed Reserves and Assigned Reserves,
shown in Table 3 below. With the close of the financial books, Staff is recommending
the following additional allocations:
Committed Reserves
a. Advance to Public Facility Fee - Increase $3,100,000
In June 2020, the City Council approved the creation of a new reserve and set
aside half of the expected surplus to advance the construction of the Wallis
Ranch Community Park, Jordan Ranch Neighborhood Square, and Library
Tenant Improvements projects. Staff now recommends setting aside an
additional $3.1 million ($7.5 million total), which would fund 75% of the total
estimated cost for the CIPs.
b. Cultural Arts Center Reserve - Transfer $760,059 from HVAC Replacement
and Civic Center Improvements Reserve
The City Council approved the Cultural Arts Center project cost on May 19, 2020,
along with shifting a portion of the budget from the HVAC & Roof Replacement
and Civic Center Rehabilitation projects. The General Fund portion of the budget
shift is $760,059; with this adjustment plus the City Council-approved transfer of
$3,779,138 from the Cemetery Expansion reserve, the Cultural Arts Center
reserve will be $4,539,197.
c. Don Biddle Community Park Reserve - Increase $500,000
Staff is recommending an additional $500,000 to cover anticipated higher soft
costs associated with the construction of Don Biddle Community Park. With this
adjustment, the reserve will total $1,500,000. On a related staff item on tonight’s
Page 6 of 7
agenda, the $1,500,000 will be necessary for the updated costs for the project.
d. Downtown Public Improvement Reserve - Increase $5,000,000.
In accordance with the City Council’s Strategy #1: Implement the City’s Adopted
Preferred Vision for Downtown Dublin, Staff recommends the addition of $5.0
million to this reserve for funding towards the Downtown Dublin Town Square
Park and the Downtown Dublin Street Grid Network. With this adjustment, the
total reserve will be $8,454,625.
e. Dublin Sports Grounds Reserve - Transfer - $1,141,400 from Assigned CIP
Carryovers
The total General Fund contribution to this project is $3,641,400, with an existing
reserve of $2,500,000 for the Imagine Playground. The remaining $1,141,400 is
held in a general CIP carryover reserve. Staff recommends shifting this amount
to the Dublin Sports Grounds Reserve to fully commit the General Fund portion
of the project cost.
f. Fallon Sports Park III Reserve - Transfer $110,500 from Fallon Sports Park II
Reserve
With the completion of Fallon Sports Park Phase II, Staff recommends
transferring the reserve balance to Phase III, for a total balance of $3,110,500.
g. Fire Services Pension/OPEB Reserve - Additional increase $1,422,228.
The City Council approved the addition of $317,325 to this reserve in June 2020.
Staff recommends an additional $1,422,228; of that amount, $422,228 is from fire
contract savings for Fiscal Year 2019-20 and $1.0 million is from the overall
surplus. With the adjustment, this reserve will total $5,324,225.
Assigned Reserves
a. Climate Action Plan - Create a new reserve and add $3,000,000
The total estimated City cost for the measures in the Climate Action Plan 2030 is
approximately $4.6 million. Staff recommends initial funding of $3.0 million for
near term priorities. Staff plans to pursue grant opportunities for the rem aining
funding.
b. Contribution to Internal Service Funds - Increase $500,000
Staff recommends adding $500,000 to the reserve for information technology
infrastructure needs, in addition to the $1.0 million contribution approved by the
City Council in June 2020 for facility/equipment replacement needs.
c. Combine HVAC and Civic Center Renovation - Police Wing Reserves
Staff recommends combining the two reserves into one and renaming it the
HVAC Replacement and Civic Center Improvements Reserve. After shifting
$760,059 of the reserve balance to the Cultural Arts Center project, this reserve
will total $4,202,041.
d. Village Parkway Pavement Reconstruction Reserve - Increase $3,000,000
In June 2020, the City Council approved the creation of a new reserve and
agreed to set aside $2.0 million each year for the project. With the Fiscal Year
2019-20 surplus higher than previously estimated, Staff recommends adding
$3.0 million. With this adjustment the balance will be $5.0 million, about 50% of
the estimated, future project cost.
e. Pension and OPEB - Increase $1,000,000
Staff recommends the addition of $1.0 million to this reserve to cover potential
increases in the City’s unfunded liability for pensions.
f. Catastrophic Loss Reserve - Increase $1,937,717.
With this adjustment per the City’s Fund Balance and Reserves Policy, the total
Page 7 of 7
Catastrophic Loss Reserve balance will be $17,702,316, 15% of the book value
of City-owned building and improvements.
These designations, as well as reserve allocations for budget carryovers and per
accounting rules and/or City policy, have been incorporated into the General Fund
Reserve Balances (Attachment 2).
Table 3. Committed/Specific Assigned Reserve Recommendations
Reserve Category
June 2020
Approval Recommendation
FY 19-20 Total
Adjustment Adj Type
Committed
Advance to Public Facility Fee $4,400,000 $3,100,000 $7,500,000 Add
Cultural Arts Center 3,779,138 760,059 4,539,197 Add
Don Biddle Park 500,000 500,000 Add
Downtown Public Improvement 5,000,000 5,000,000 Add
Dublin Sports Grounds 1,141,400 1,141,400 Transfer
Fallon Sports Park III 110,500 110,500 Transfer
Fire Services Pension/OPEB 317,325 1,422,228 1,739,553 Add
Specific Assigned
Climate Action Plan 3,000,000 3,000,000 Add
Contribution to Internal Service Funds 1,000,000 500,000 1,500,000 Add
HVAC Replacement & Civic Center Improve (760,059) (760,059) Transfer
Village Parkway Pavement Reconstruction 2,000,000 3,000,000 5,000,000 Add
With approval of the recommendations above, and after res erve shifts for accounting
purposes or per the Fund Balance and Reserves Policy, the Unassigned Cash Flow
Reserve is estimated at $58.4 million (or 8.5 months of the Fiscal Year 2020 -21
Adopted Budget), which is above the reserve target as provided for in the City Policy.
STRATEGIC PLAN INITIATIVE:
Strategy 1: Implement the City’s Adopted Preferred Vision for Downtown Dublin.
Strategy 2D: Continue to maintain strong fiscal policies.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. General Fund Summary Q4 FY 2019-20
2. General Fund Reserves Summary Q4 FY 2019-20
GENERAL FUND SUMMARY - Q4 FY 2019-20
Actual
2018-19
Adopted
Budget
2019-20
Amended
Budget
2019-20
Actual
2019-20
2019-20 vs
2018-19
Actual
2019-20
Actual vs
Amended
Revenues
Property Tax $44,293,602 $46,874,754 $47,534,754 $49,086,335 $4,792,734 $1,551,581
Sales Tax 24,817,037 21,693,878 21,693,878 21,439,886 (3,377,151)(253,992)
Sales Tax Reimbursements (91,062) (466,500) (466,500) (407,431) (316,369)59,069
Development Revenue 10,603,008 8,446,542 7,946,542 6,716,056 (3,886,952)(1,230,486)
Transient Occupancy Tax 2,084,992 1,400,000 1,400,000 1,567,987 (517,005)167,987
Other Taxes 6,138,518 5,399,400 5,399,400 5,712,336 (426,182)312,936
Licenses & Permits 291,788 233,147 233,147 236,972 (54,816)3,825
Fines & Penalties 130,993 111,432 111,432 85,128 (45,865)(26,304)
Interest Earnings 3,195,567 2,000,000 2,000,000 3,652,445 456,878 1,652,445
Rentals and Leases 1,100,888 1,104,127 964,127 974,392 (126,496)10,265
Intergovernmental 287,811 234,919 234,919 306,425 18,614 71,506
Charges for Services 7,559,259 6,436,057 6,436,057 5,644,465 (1,914,794)(791,592)
Community Benefit Payments 600,000 200,000 641,000 (600,000)(641,000)
Other Revenue 1,214,400 814,706 1,046,260 1,374,275 159,876 328,015
Subtotal Revenues - Operating $102,226,800 $94,482,462 $95,175,016 $96,389,272 ($5,837,528)$1,214,256
Transfers In $144,098 $1,075 $76,075 $87,098 ($57,000)$11,023
Unrealized Gains/Losses 5,020,840 - - 6,433,261 1,412,422 6,433,261
Total Revenues $107,391,738 $94,483,537 $95,251,091 $102,909,631 ($4,482,107)$7,658,540
Expenditures
Salaries & Wages $11,237,770 $12,330,169 $12,328,705 $10,978,176 ($259,594)($1,350,529)
Benefits 4,780,663 5,368,041 5,685,366 4,890,980 110,317 (794,386)
Services & Supplies 3,179,408 3,496,548 3,743,008 2,928,191 (251,216)(814,817)
Internal Service Fund Charges 2,985,004 2,977,333 2,977,333 2,977,333 (7,671)0
Utilities 2,744,523 2,728,912 2,749,475 2,427,310 (317,213)(322,165)
Contracted Services 46,675,752 50,653,983 52,464,417 46,071,154 (604,598)(6,393,264)
Capital Outlay 1,287,107 153,580 4,384,118 3,959,753 2,672,646 (424,365)
Contingency & Miscellaneous 4,074,279 222,235 162,235 18,987 (4,055,293)(143,248)
Subtotal Expenditures - Operating $76,964,506 $77,930,801 $84,494,657 $74,251,883 ($2,712,622)($10,242,773)
Operating Impact (REV-EXP)$25,262,295 $16,551,661 $10,680,360 $22,137,389 ($3,124,906)$11,457,029
Transfers Out (CIPs) - Undesignated $1,953,000 $4,379,955 $336,309 $336,309 ($4,043,646)
Transfers Out (CIPs) - Com./Assig. Res $252,321 2,600,000 14,967,418 7,668,923 7,416,602 (7,298,496)
Contribution to OPEB/PERS 1,000,000 1,000,000 - (1,000,000)
Contribution to ISF 1,061,808 1,000,000 1,000,000 1,229,066 167,258 229,066
Total Expenditures $78,278,634 $84,483,801 $105,842,030 $83,486,181 $5,207,546 ($22,355,849)
GF Impact (Include CIP & Transfers)$29,113,104 $9,999,736 ($10,590,938)$19,423,450 ($3,628,473)$15,271,609
TOTAL GENERAL FUND BALANCE $171,225,773 $181,225,509 $160,634,835 $190,649,224
Attachment 1
GENERAL FUND RESERVES - Q4 FY 2019-20
RESERVE DESCRIPTION
Actual
2018-19
Adjustment
2019-20
Decrease
2019-20 Net Change
Projected
2019-20
Non-Spendable $12,818 $243 $243 $13,061
Prepaid Expenses 12,818 243 243 13,061
Restricted $1,938,000 $1,938,000
Cemetery Endowment 60,000 60,000
Developer Contr - Downtown 1,049,000 1,049,000
Developer Contr - Heritage Pk 19,000 19,000
Developer Contr - Nature Pk 60,000 60,000
Heritage Park Maintenance 750,000 750,000
Committed $47,267,326 $16,641,012 ($6,079,863)$10,561,149 $57,828,474
Advance to Public Facility Fee 7,500,000 7,500,000 7,500,000
Downtown Public Impr 4,000,000 5,000,000 (545,375)4,454,625 8,454,625
Economic Development 2,806,486 (2,680,126)(2,680,126)126,359
Economic Stability 8,000,000 8,000,000
Emergency Communications 532,113 532,113
Fire Svcs Pension/OPEB 3,584,672 1,739,553 1,739,553 5,324,225
Innovations & New Opport 1,133,753 (68,283)(68,283)1,065,471
One-Time Initiative - Capital 5,837,548 (844,398)(844,398)4,993,150
One-Time Initiative - Operating 503,860 503,860
Public Safety Reserve 2,000,000 2,000,000
Specific Committed Reserves
Cemetery Expansion (CIP)5,270,875 (3,779,138)(43,973)(3,823,111)1,447,764
Contribution to Public Facility Fee 6,000,000 6,000,000
Cultural Arts Center 4,539,197 4,539,197 4,539,197
Don Biddle Park (CIP)1,000,000 500,000 500,000 1,500,000
Dublin Sports Ground (CIP)2,245,576 1,141,400 (1,884,306)(742,906)1,502,671
Fallon Sports Park II (CIP)110,500 (110,500)(110,500)
Fallon Sports Park III Contingency 3,000,000 110,500 110,500 3,110,500
Maintenance Facility (CIP)71,753 (13,403)(13,403)58,350
Utility Undergrounding (CIP)1,170,190 1,170,190
Assigned $60,771,811 $17,016,902 ($13,784,053)$3,232,849 $64,004,659
Accrued Leave 1,001,744 42,986 42,986 1,044,730
Catastrophic Loss 15,764,599 1,937,717 1,937,717 17,702,316
CIP Carryovers 4,006,912 3,502,246 (4,006,912)(504,666)3,502,246
Fiscally Responsible Adj 325,000 325,000
Municipal Regional Permit 2,360,673 (77,768)(77,768)2,282,905
Non-Streets CIP Commitments 2,462,100 2,462,100
Operating Carryovers 2,805,459 1,724,011 (2,805,459)(1,081,448)1,724,011
Parks and Streets Contingency 250,000 (23,773)(23,773)226,227
Pension & OPEB 14,000,000 1,000,000 1,000,000 15,000,000
Pension Rate Stabilization Plan 2,000,000 2,000,000
Relocate Parks Dept 250,000 250,000
Service Continuity 3,150,000 3,150,000
Specific Assigned Reserves
Civic Ctr Renovation-Police Wing 2,962,100 (2,962,100)(2,962,100)
Climate Action Plan 3,000,000 3,000,000 3,000,000
Contribution to ISF 1,000,000 1,500,000 (1,000,000)500,000 1,500,000
Façade Improvement Grants 304,157 70,000 70,000 374,157
Fire Equipment Replacement 229,066 (229,066)(229,066)
HVAC Replacement & Civic Ctr Improv. (C 2,000,000 2,202,041 2,202,041 4,202,041
Public Safety Complex (CIP)5,900,000 (5,641,075)(5,641,075)258,925
Village Pkwy Pavemt Recon 5,000,000 5,000,000 5,000,000
Unassigned $61,235,819 $19,863,916 ($14,234,706)$5,629,210 $66,865,029
Unassigned-Unrealized Gains 2,186,891 6,266,349 6,266,349 8,453,240
Unassigned (Available)59,048,929 58,411,790
TOTAL RESERVES $171,225,773 $53,522,073 ($34,098,623)$19,423,450 $190,649,224
Attachment 2