HomeMy WebLinkAboutItem 8.1 - 2535 Preliminary FY 2019-20 Budget
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STAFF REPORT
CITY COUNCIL
DATE: April 2, 2019
TO: Honorable Mayor and City Councilmembers
FROM:
Christopher L. Foss, City Manager
SUBJECT:
Preliminary Fiscal Year 2019-20 Budget
Prepared by: Colleen Tribby, Director of Administrative Services
EXECUTIVE SUMMARY:
The City Council will review the Preliminary Fiscal Year 2019-20 Budget, focusing on
the General Fund. As this is the second year of the City's two -year budget, this
information will supplement the budget document adopted by th e City Council in May
2018. The updated Capital Improvement Program is presented under a separate item.
STAFF RECOMMENDATION:
Receive the report and provide direction to Staff related to the budget adoption
scheduled for May 21, 2019.
FINANCIAL IMPACT:
The Preliminary Budget results in an increase to revenues of $2,270,344 and an
increase to expenditures of $944,946 in the General Fund over the prior year. Total
General Fund reserves are projected at $143,410,510, an increase of $10,067,405 over
Fiscal Year 2018-19.
DESCRIPTION:
The City of Dublin utilizes a biennial budget process, in which a comprehensive budget
document is prepared that establishes high-level priorities and specific departmental
goals for a two-year period. The second year of the cycle is the “update year”, in which
projections are revised and significant changes highlighted, while the original document
continues to serve as the guiding financial plan.
As in prior years, this report focuses on the General Fund, as there are no maj or
budgetary changes in other funds. This report discusses updates to the City’s major
revenue categories reflecting the most recent information and refines expenditure
projections. The analysis compares the Preliminary Fiscal Year 2019 -20 to the
Amended Fiscal Year 2018-19 Budget.
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Summary
The Preliminary Budget (see table below, also included as Attachments 1 - 3) projects
an operating surplus in the General Fund (ongoing revenues less ongoing expenditures)
of $15,620,405 which is $1,325,398 (9.3%) higher than the Fiscal Year 2018-19
Amended Budget. After one-time items and transfers out, total reserves are projected at
$143,410,510, an increase of $10,067,405 (7.6%) over the prior year.
Revenues in Fiscal Year 2019-20 are increasing a net of $2,270,344 (2.5%) over the
prior year, due primarily to higher property tax revenue, and despite a notable decrease
in sales tax revenue. Expenditures are increasing $944,946 (1.2%) over the prior year,
primarily due to higher contracted services costs. Other changes are explained in the
section below.
Operating Budget Impact & Reserves
Amended
2018-19
Preliminary
2019-20
$
Change
%
Change
Revenue 92,607,564 94,877,908 2,270,344 2.5%
Expenditures (78,312,557) (79,257,503) (944,946) 1.2%
Ongoing Operating Budget Impact 14,295,007 15,620,405 1,325,398 9.3%
Carryovers from Prior Year (2,309,306) 2,309,306
Capital Lease Payoff (4,064,515) 4,064,515
Total Operating Budget Impact 7,921,186 15,620,405 7,699,219 97.2%
Transfers Out (16,690,746) (5,553,000) 11,137,746
Year End Reserves 133,343,105 143,410,510 10,067,405 7.6%
The following is a summary of the net changes reflected in the Preliminary Budget as
compared to the Fiscal Year 2018-19 Amended Budget (+/- $250,000):
Property Tax - Increasing $3,044,585 (6.9%)
The current budget was adjusted upwards a total of $3,700,000 over the first two
quarters of Fiscal Year 2018-19 to account for higher-than-anticipated growth in
citywide assessed values (AV). That growth has been carried into Fiscal Year 2019-20,
and added to a revised estimate of new construction values as well as the restoration of
AV previously reduced via Proposition 8.
Sales Tax – Decreasing $664,318 (-3.0%)
The Preliminary Budget has been adjusted to remove non-recurring revenues earned in
Fiscal Year 2018-19 from a backlog of auto sales, before a 2.5% annual growth factor
was applied.
Community Benefit Payments – Decreasing $441,000 (-68.8%)
The Preliminary Budget removes Community Benefit Payments expected in Fiscal Year
2018-19 for specific development activity.
Expenditure Changes
Services and Supplies - Increasing $340,765 (10.8%)
The net increase accounts for the higher cost of liability insurance for Police Services,
based on the cost of past claims, smoothed over several years.
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Utilities – Decreasing $402,824 (-12.9%)
The current budget includes the last payment of the Chevron capital lease for the City’s
solar system, removed in the following year.
Contracted Services – Increasing $1,282,191 (2.6%)
The net increase in contracted services is due to the following:
• Police Services – increasing $1,637,596 to account for the addition of two
deputies beginning in January 2020, and annual salary and benefit increases.
• Fire Services – increasing $631,337 to account for annual salary and benefit
increases.
• Other Contracted Services – decreasing $1,197,963 to account for one-time
budgets in the current year that will not be repeated (but may be carried over) in
the Fiscal Year 2019-20 (e.g., election costs, economic development contracts).
Transfers Out
The 2018-2023 Capital Improvement Program update includes $5,553,000 in General
Fund contributions to capital projects. These include:
• $2,000,000 for the All Abilities Playground at Dublin Sports Grounds
• $108,000 for the Citywide Bicycle and Pedestrian Improvements Project
• $1,845,000 for replacement of the City’s Enterprise Resource Planning system
(citywide financial software)
• $1,000,000 in contribution to Internal Service Funds for citywide equipment
replacement
• $600,000 to the Don Biddle Community Park Project
10-Year Forecast and Next Steps
As part of the Fiscal Year 2018-19 2nd Quarter Financial Review (March 19, 2019), the
City Council received an update to the 10 -Year General Fund Forecast, which shows
City ongoing operations balanced at Fiscal Year 2027-28. A discussion of the
assumptions used in the Forecast will be included in the final budget proposal
scheduled for May 21, 2019.
Staff is also seeking direction form the City Council on other items it wishes to include in
the Fiscal Year 2019-20 Budget, or changes to the information contained in this report.
STRATEGIC PLAN INITIATIVE:
Strategy 1: Assure the City's long-term financial sustainability;
Strategic Objective 1A: Maintain strong conservative fiscal policies.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
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ATTACHMENTS:
1. Preliminary FY 2019-20 General Fund Summary
2. FY 2019-20 General Fund Transfers Out
3. FY 2019-20 General Fund Reserves
GENERAL FUND SUMMARY ATTACHMENT 1
FY 2019-20 PRELIMINARY
Actual
2017-18
Adopted
2018-19
Amended
2018-19
Preliminary
2019-20
$ Change from
2018-19
% Change from
2018-19
Revenues
Property Tax 40,628,040 40,130,168 43,830,168 46,874,753 3,044,585 6.9%
Sales Tax 20,286,396 20,758,196 22,358,196 21,693,878 (664,318) (3.0%)
Sales Tax Reimbursements (562,731) (628,500) (628,500) (466,500) 162,000 (25.8%)
Development Revenue 13,551,788 8,286,433 8,387,573 8,427,743 40,170 0.5%
Other Taxes 7,366,201 6,573,100 6,573,100 6,799,400 226,300 3.4%
Licenses & Permits 318,400 272,013 272,013 233,147 (38,866) (14.3%)
Fines & Penalties 134,022 111,432 111,432 111,432 - 0.0%
Interest Earnings 1,932,519 1,328,987 1,878,987 2,000,000 121,013 6.4%
Rentals and Leases 1,243,389 1,147,218 1,147,218 1,125,791 (21,427) (1.9%)
Intergovernmental 153,834 234,919 234,919 234,919 (0) (0.0%)
Charges for Services 7,218,457 6,787,895 6,787,895 6,799,258 11,363 0.2%
Community Benefit Payments 670,000 641,000 641,000 200,000 (441,000) (68.8%)
Other Revenue 1,007,224 836,026 1,013,563 844,086 (169,477) (16.7%)
Subtotal Revenues 93,947,539$ 86,478,887$ 92,607,564$ 94,877,908$ 2,270,344$ 2.5%
Unrealized Gains/Losses (2,751,679) -
Transfers In 135,151 -
Total Revenues 91,331,011$ 86,478,887$ 92,607,564$ 94,877,908$ 2,270,344$ 2.5%
Expenditures
Salaries & Wages 10,878,367 12,453,627 12,442,617 12,379,882 (62,735) (0.5%)
Benefits 4,666,642 5,924,104 6,550,025 6,668,029 118,004 1.8%
Services & Supplies 2,231,135 3,012,493 3,155,783 3,496,548 340,765 10.8%
Internal Service Fund Charges 3,049,920 2,985,004 2,985,004 2,977,334 (7,670) (0.3%)
Utilities 2,779,522 3,090,055 3,131,735 2,728,911 (402,824) (12.9%)
Total Contracted Services 43,724,128 48,869,314 49,348,791 50,630,983 1,282,191 2.6%
Capital Outlay 357,516 163,770 537,601 153,581 (384,021) (71.4%)
Contingency & Miscellaneous 20,000 210,000 161,000 222,235 61,235 38.0%
Subtotal Expenditures 67,707,229$ 76,708,367$ 78,312,557$ 79,257,503$ 944,946$ 1.2%
Carryovers from Prior Year (1)1,240,217 2,309,306 (2,309,306)
Chevron Debt Payment - 4,064,515 - (4,064,515) (100.0%)
Total Expenditures 68,947,446$ 76,708,367$ 84,686,378$ 79,257,503$ (5,428,875)$ (6.4%)
Operating Impact 22,383,566$ 9,770,520$ 7,921,186$ 15,620,405$ 7,699,219$ 97.2%
Transfers Out (2,686,559) (6,243,000) (16,690,746) (5,553,000)
Impact on Total Reserves 19,697,006$ 3,527,520$ (8,769,561)$ 10,067,405$
TOTAL RESERVES 142,112,666$ 133,343,105$ 143,410,510$ 10,067,405$ 7.6%
(1) Carryovers from FY 2017-18 include $13,079 in Supplies and Services, $1,282,070 in Contracted Services, and $1,014,157 in Capital Outlay.
* Contracted Services Detail (2) (3)
Actual
2017-18
Adopted
2018-19
Amended
2018-19
Preliminary
2019-20
$ Change from
2018-19
% Change from
2018-19
Police Services 17,404,255 19,078,235 18,795,017 20,432,613 1,637,596 8.7%
Fire Services 12,079,373 13,125,673 13,237,550 13,868,887 631,337 4.8%
Maintenance Services (MCE)4,879,545 5,158,925 5,232,925 5,318,478 85,553 1.6%
Development (CDD and PW)6,277,088 5,948,048 5,908,345 6,034,013 125,668 2.1%
Other Contracted Services 3,083,867 5,558,433 6,174,955 4,976,992 (1,197,963) (19.4%)
Total Contracted Services 43,724,128$ 48,869,314$ 49,348,791$ 50,630,983$ 1,282,191$ 2.6%
(2) Does not include carryovers from FY 2017-18.
(3) Police and Fire liabilty insurance amounts are shown in Supplies & Services above.
GENERAL FUND TRANSFERS OUT ATTACHMENT 2
FY 2019-20 PRELIMINARY
CIP Projects Funded by
Specific Committed Reserves
Amended
18-19
Projected
19-20
Citywide Signal Communications Upgrade 1,500,000
AVB, Wildwood, Stagecoach Impr 193,000
Maintenance Yard 71,753
Civic Center Modifications 22,746
Shannon Center Parking Lot Impr 72,019
Dublin Heritage Cemetery Phase II 1,491,737
Dublin Sports Grounds Rehab 1,995,638 2,000,000
Fallon Sports Park - Phase II 9,995
Storm Drain Trash Capture 1,118,303
Subtotal 6,475,191$ 2,000,000$
CIP Projects Funded by
Assigned Reserves
Amended
18-19
Projected
19-20
Citywide Bicycle and Pedestrian Impr 324,000 108,000
HVAC Replacement - Civic Center 2,000,000
ERP Replacement 1,845,000
EV Charging Stations 150,000
City Entrance Monument Signs 285,000
San Ramon Rd Trail Improvements 101,410
San Ramon Rd Landscape 238,660
Police Services Building 3,900,000
Dublin Blvd Extension 123,000
Dougherty Rd to Sierra 93,485
Transfer to Equipment Replacement 1,000,000 1,000,000
Subtotal 8,215,555$ 2,953,000$
TOTAL TRANSFERS TO CIP's 14,690,746$ 4,953,000$
Other Transfers (from Cash Flow)
New
Amended
18-19
Projected
19-20
Public Safety Complex 2,000,000
Don Biddle Community Park 600,000
TOTAL OTHER TRANSFERS 2,000,000$ 600,000$
Total Transfers Out of General Fund 16,690,746$ 5,553,000$
GENERAL FUND RESERVES ATTACHMENT 3
FY 2019-20 PRELIMINARY
Reserve Balances
Projected
2018-19
Increase
2019-20
Decrease
2019-20
NET
CHANGE
Projected
2019-20
Non-Spendable -$ -$ -$ -$ -$
Prepaid Expenses 7,432 - 7,432
Advance to Public Facility Fees - - -
Advance to PERS Side Fund - - - -
Restricted 500,000$ -$ -$ -$ -$
Heritage Park Maintenance 750,000 - 750,000
Cemetery Endowment 60,000 - 60,000
Developer Contr - Downtown 1,049,000 - 1,049,000
Developer Contr - Nature Pk 60,000 - 60,000
Developer Contr - Heritage Pk 19,000 - 19,000
Committed 5,487,658$ -$ (2,000,000)$ (2,000,000)$ 500,000$
Economic Stability 8,000,000 - 8,000,000
Public Safety Reserve 2,000,000 - 2,000,000
Downtown Public Impr 3,000,000 - 3,000,000
Economic Development 3,000,000 - 3,000,000
Emergency Communications 741,000 - 741,000
Fire Svcs OPEB 3,584,672 - 3,584,672
Innovations & New Opport 1,813,408 - 1,813,408
One-Time Initiative 4,841,408 - 4,841,408
Specific Committed Reserves
Maintenance Facility - - -
Cemetery Expansion 3,779,139 - 3,779,139
Fallon Sports Park 100,505 - 100,505
Civic Ctr Expansion (0.01000) - (0)
Storm Drain Trash Capture - - -
Utility Undergrounding 1,170,190 - 1,170,190
Advance to Public Facility Fee 6,000,000 - 6,000,000
Dublin Sports Ground 2,000,000 (2,000,000) (2,000,000) -
Assigned 5,015,629$ -$ (1,845,000)$ (1,845,000)$ 655,000$
Accrued Leave 1,072,508 - 1,072,508
Operating Carryovers - - -
CIP Carryovers - - -
Non-Streets CIP Commitments 4,000,000 - 4,000,000
Catastrophic Loss 14,764,599 - 14,764,599
Service Continuity 3,150,000 - 3,150,000
Finance System Replacements 2,500,000 (1,845,000) (1,845,000) 655,000
Pension Rate Stabilization Plan 2,000,000 - 2,000,000
Chevron Debt Payoff 4,656,742 - 4,656,742
Pension & OPEB 12,000,000 - 12,000,000
Fiscally Responsible Adj 325,000 - 325,000
Municipal Regional Permit 2,177,030 - 2,177,030
HVAC Replacement - - -
Relocate Parks Dept 250,000 - 250,000
Parks and Streets Contingency - - -
Specific Assigned Reserves - - -
Civic Ctr Renovation-Police 1,962,100 - 1,962,100
Façade Improvement Grants 164,157 - 164,157
Contribution to ISF 1,500,000 - 1,500,000
Fire Equipment Replacement 290,873 - 290,873
Unassigned 40,554,342$ 3,845,000$ 10,067,405$ 13,912,405$ 54,466,747$
Unassigned-Unrealized Gains 3,000,862 3,000,862
Unassigned (Available)37,553,480 51,465,885
TOTAL RESERVES 133,343,106$ 3,845,000$ 6,222,405$ 10,067,405$ 143,410,510$