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Home My WebLink AboutItem 8.3 Financial Review 3rd Qtr STAFF REPORT CITY CLERK File #330-50 CITY COUNCIL DATE:May 6, 2014 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: FY 2013-14 3rd Quarter Financial Review Prepared by Colleen Tribby, Director of Administrative Services EXECUTIVE SUMMARY: The City Council will receive a budget update for the third quarter of the current fiscal year. This update also includes information on the City’s General Fund reserves. FINANCIAL IMPACT: Approval of the FY 2013-14 budget change will result in a net increase of $2.4 million to the General Fund revenue budget, and a net decrease of $5.5 million to the General Fund expenditure budget. Total General Fund reserves are projected at $66.3 million as of June 30, 2014, with $10.8 million in the unassigned (available) reserve. While there are no significant changes expected in other funds this fiscal year, there are minor budget adjustments and those appropriations require City Council approval. RECOMMENDATION: Resolution Staff recommends that the City Council adopt a Approving a Third Quarter Budget Amendment to the City of Dublin’s Fiscal Year 2013-14 Budget, and approve the Budget Change. Submitted By Reviewed By Administrative Services Director Assistant City Manager DESCRIPTION: This focus of this report is the projected FY 2013-14 fund balance in the General Fund, updated with information collected through the third quarter. The numbers include budget amendments already approved by the City Council since July 1, new amendments needing approval, and updated revenue projections. The FY 2013-14 year-end net operating impact of revenues less expenditures is projected at a positive $7.9 million, before transfers out to capital projects, and including all revenue and ITEM NO. 8.3 Page 1 of 5 expenditure carryovers from the prior year (Attachment 2: General Fund Operating Summary and Reserves, page 1). Revenue growth over the last quarter has added $2.4 million to the revenues, primarily to Sales Tax, Building Permits, and one-time Community Benefit Payments. The projected expenditure budget includes an increase of $974,000 in departmental budgets, primarily for development-related professional services, and the removal of the $6.5 million budget for the City’s share of the Alameda County Fire Department’s retiree health liability. Year-to-Date Budget Changes Approved by City Manager In October 2013, the City Council adopted Resolution 175-13, which allowed for more administrative efficiency in transferring budgets within the same funding source and in amending departmental budgets where there is no net impact. The following (Table 1) is a list of those budget changes that have been approved and included in the FY 2013-14 Amended Budget as of the preparation of this report: Table 1: FY 2013-14 Budget Changes Approved by City Manager, April 2014 Rev / FundActionExpAccountAmountDescription CIPTransferExpCivic Ctr Modifications Project$ (276,299) Move records/agenda project to its own project CIPTransferExpElectronic Records/Agenda Project$ 276,299Move records/agenda project to its own project GeneralIncreaseRevBuilding Permits$ 1,200,000 Additional development activity GeneralIncreaseRevCal Green Surcharge$ 70,000 Additional development activity GeneralIncreaseExpBuilding Division Contract Svcs$ 300,000Additional development activity GeneralTransferExpInfo Services - Contract Services$ (85,000)Move long-term data center needs to CIP GeneralTransferExpInfo Services - Network Systems Upgrade Proj$ 85,000 Move long-term data center needs to CIP GeneralTransferExpInfo Services - Salaries & Insurance$ (72,654)Use Contract Services for vacant IT position GeneralTransferExpInfo Services - Contract Services$ 72,654 Use Contract Services for vacant IT position GeneralTransferExpPolice Administration - Salaries$ (25,632)Temp back-fill for employee leave of absence GeneralTransferExpPolice Administration - Contract Services$ 25,632 Temp back-fill for employee leave of absence GeneralTransferExpNon Departmental - Budget Contingency$ (1,000)Earl Anthony PBA Open Bowling Sponsor GeneralTransferExpEconomic Development - Contract Services$ 1,000Earl Anthony PBA Open Bowling Sponsor GeneralTransferExpNon Departmental - Budget Contingency$ (10,000)Contract Services for Project Accounting GeneralTransferExpFinance - Contracted Services$ 10,000 Contract Services for Project Accounting GeneralIncreaseRevPark Maintenance - Contributions$ 6,000Developer Contribution to Schaffer Ranch Park GeneralIncreaseExpPark Maintenance - Contracted Svcs$ 6,000Developer Contribution to Schaffer Ranch Park GeneralIncreaseRevNeighborhood Resources - Donations$ 1,000Donation to Neighborhood Resources GeneralIncreaseExpNeighborhood Resources - Contracted Svcs$ 1,000Use of donation funds for safety seminar GeneralTransferExpParks & Comm Svcs - Professional$ (24,000)Shift from Parks to EDD for staff work GeneralTransferExpEconomic Development - PT Salaries$ 24,000 Shift from Parks to EDD for staff work GeneralIncreaseRevPolice - Donations$ 3,000Donation for drug prevention programs GeneralIncreaseExpPolice - Contracted Svcs$ 3,000Donation for drug prevention programs Street Light Dist 1999-1TransferExpUtilities / Chevron Energy Lease$ 283,801Transfer from operating program to Energy Project Street Light Dist 1999-1TransferExpUtilities / Chevron Energy Lease$ (283,801) Transfer from operating program to Energy Project Garbage SvcIncreaseRevResidential Garbage Revenue$ 191,790Additional revenue: new homes and rate increases Garbage SvcIncreaseExpResidential Garbage Expenditure$ 184,160Pass-through to AVI of additional revenue Page 2 of 5 rd 3 Quarter Items Needing City Council Approval ( listed on Attachment 3: Budget Change ) Form 1. Budget adjustments, General Fund REVENUE CHANGES: a. Increase Sales Tax Revenue: $798,548 According to data from the sales quarter ending December 31, 2013, sales activity grew a net 9.0% across all industry groups, compared to the same period in the prior year. The largest gains occurred in Autos and Transportation due to a solid quarter of auto sales and leases, and Building and Construction materials. b. Increase Franchise (Electric) Revenue: $126,837 Additional revenue due to rate increases. c. Decrease Santa Rita Services Revenue: ($295,000) Fire emergency response services to the Santa Rita Jail (an Alameda County facility) are included in the City’s fire services contract with Alameda County, and the County then reimburses the City for the cost of fire service calls to the jail. Those service calls have decreased since Santa Rita is no longer using City fire services for non- emergency calls. d. Increase Community Benefit Payment Revenue: $385,000 Revenue collected to date includes payments from Jordan Ranch and Positano development projects. e. Increase Development-Related Revenue: total $1,404,803 The following revenue adjustments are related to accelerated development activity in the latter half of the fiscal year. These adjustments offset the increases listed under Expenditure Changes below: i. Increase Annual Fire Permits Revenue: $20,000 ii. Increase Building Permits Revenue: $326,680 iii. Increase Construction and Demo Permit Revenue: $23,196 iv. Increase City Calgreen Building Permit Surcharge Revenue: $46,164 v. Increase Encroachment Revenue: $73,663 vi. Increase Fire Alarm Revenue : $29,950 vii. Increase Sprinkler / Underground Permit Revenue: $95,000 viii. Increase Fire Plan Check Revenue: $17,150 ix. Increase Zoning Revenue: $773,000 EXPENDITURE CHANGES: f. Increase Contract Services Expenditures: $200,000 This will cover the estimated cost of upgrades and turf improvements related to the cricket pitch at Emerald Glen ($100,000); additional costs related to potable-to- recycled water conversion ($25,000); and attorney services related to the partnership efforts between the City and Camp Parks ($75,000). Any unused funds will be carried over to FY 2014-15. g. Decrease Contribution to Other Agency Expenditures: ($6,487,000) This adjustment removes the budget for the City’s share of the Alameda County Fire Department’s retiree health obligation. While it is not known when that payment will be made, the City will have an estimated $8.0 million in a reserve for this purpose at the end of FY 2013-14. Page 3 of 5 h. Increase Development-Related Expenditures: total $774,295 The increase to revenues described above covers these additional related costs: i. Increase Building Inspection Expenditures: $150,000 ii. Increase Planning – Professional Services: $351,383 iii. Increase Planning – Professional Services (Reimbursable): $272,913 Budget adjustments, Non-General Fund: 2. a. Appropriate Additional Maintenance Funds in the Vehicle Maintenance Fund (Police Vehicles): $10,000 This adjustment is needed to cover increased cost of vehicle maintenance, based on past month averages and the anticipation of new vehicles entering the fleet. b. Remove budget for Eastern Dublin Arterial Street and Freeway Project (st0295): $2,598,813 This is an administrative change to remove the overall tracking budget for Eastern Dublin Traffic Impact Fees, which was a placeholder in the prior CIP document. Staff plans to budget for these specific projects as they are undertaken. Reserve designations, General Fund 3. a. New set aside for future advance from General Fund to Public Facility Fees Fund: $2,000,000 The most recent projected cash flow in the Public Facility Fees Fund shows an estimated deficit of $5.25 million by FY 2015-16, at which time Staff will recommend an advance from the General Fund of that amount. This advance is necessary to complete the Emerald Glen Aquatics Complex Project and the Cemetery Expansion Project, and will be repaid as the Public Facility Fees Fund collects revenue. In order to prepare for the advance, Staff recommends setting aside $2.0 million in FY 2013- 14 for this purpose, with another $3.25 million set aside in FY 2014-15. Though the cash flow deficit amount is an estimate at this time, it is prudent to prepare for the advance while the City has a surplus budget. Fiscal Impact, Projected FY 2013-14 The projected net impact of revenues, expenditures, and transfers out results in a draw on total reserves of $11.0 million (see Table 2). A total of $12.2 million is projected to be spent from Committed Reserves by June 30, due primarily to the completion of the Public Safety Complex ($3.1 million), the Maintenance Facility ($6.0 million), and the purchase of the Iron Horse Trail ($2.0 million). The projected change to all reserves is shown on Attachment 2, page 2. Table 2: General Fund Reserves 12-13 13-14 13-14 Total 13-14 YE Reserve CategoryActual Increase Decrease Change Projected Non-Spendable 2,836,130 810 (650,000) (649,190) 2,186,940 Restricted 500,000 - - - 500,000 Committed 36,020,171 6,316,538 (12,192,614) (5,876,076) 30,144,095 Assigned 23,912,896 325,000 (1,588,321) (1,263,321) 22,649,575 Unassigned 14,047,935 14,430,935 (17,651,482) (3,220,547) 10,827,388 Total Reserves 77,317,133 21,073,283 (32,082,417) (11,009,134) 66,307,998 Page 4 of 5 Additionally, of the $6.3 million added to Committed Reserves by the year-end, $5.9 million is related to the funding of specific large-scale projects over the next few years, as detailed in Table 3 below. When funds are added to Non-Spendable, Restricted, Committed, or Assigned reserves without specific revenues supporting them, the effect is a reduction to the Unassigned (Cash Flow) Reserve. In order to begin funding these projects in FY 2013-14, the Unassigned/Cash Flow Reserve will need to be decreased to roughly 2.1 months of the operating budget. This is still within the City policy of a minimum of 2.0 months. Table 3: Large Changes to Committed Reserves ProjectedProjectedProjected BalanceSet AsideSpent inBalanceSet AsideSpend inBalanceSet AsideSpend inBalance Committed Reserve12-1313-1413-1413-1414-1514-1514-1515-1615-1615-16 Emerald Glen Aquatics Center 1,500,0001,500,000 (102,350) 2,897,650 - 2,897,650(2,897,650) - Cemetery Expansion 750,0001,641,538 2,391,5382,137,600 (816,960) 3,712,178 750,000 (4,462,178) - Shannon Center Parking Lot - 775,000 775,000 775,000 775,000 Advance to Public Facility Fees Fund -2,000,000 2,000,0003,250,000 5,250,000 5,250,000 5,916,538 (102,350) 8,064,1885,387,600 (816,960) 12,634,828 750,000 (7,359,828) 6,025,000 In June, Staff will bring back to the City Council a preliminary year-end report, which will include recommendations on specific additions to or uses of current year reserves, with an emphasis on setting aside sufficient capital reserves while maintaining adequate operating reserves over the long term. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: 1. Resolution 2. General Fund Operating Summary and Reserves 3. Budget Change Form Page 5 of 5 RESOLUTION NO. xx - 14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * APPROVING A THIRD QUARTER BUDGET AMENDMENT TO THE CITY OF DUBLIN’S FISCAL YEAR 2013-14 BUDGET WHEREAS, the City of Dublin adopts the budget with the intent of providing a planned policy program for City services; and WHEREAS , the City Council approved Resolution 86-13 adopting the Adopted Budget and Financial Plan for Fiscal Year 2013-14 on June 4, 2013; and WHEREAS , amendments for revenues and expenditures impacting the various funds should be approved, consistent with the changes in estimated revenues, operating requirements, and rd previous City Council actions, and consistent with the information provided with the 3 Quarter Financial Review of Fiscal Year 2013-14 received by the City Council on May 6, 2014; and WHEREAS , the following 3rd quarter budget items need City Council approval: General Fund: 1. Increase Sales Tax Revenue: $798,548 2. Increase Franchise (Electric) Revenue: $126,837 3. Decrease Santa Rita Services Revenue: ($295,000) 4. Increase Community Benefit Payment Revenue: $385,000 5. Increase Annual Fire Permits Revenue: $20,000 6. Increase Building Permits Revenue: $326,680 7. Increase Construction and Demo Permit Revenue: $23,196 8. Increase City Calgreen Building Permit Surcharge Revenue: $46,164 9. Increase Encroachment Revenue: $73,663 10. Increase Fire Alarm Revenue : $29,950 11. Increase Sprinkler / Underground Permit Revenue: $95,000 12. Increase Fire Plan Check Revenue: $17,150 13. Increase Zoning Revenue: $773,000 14. Increase Contract Services Expenditures: $200,000 ($100,000 for cricket turf; $25,000 for potable-to-recycled water conversion; and $75,000 for attorney services related to the City-Camp parks partnership) 15. Decrease Contribution to Other Agency Expenditures, for Fire OPEB: ($6,487,000) 16. Increase Building Inspection Expenditures: $150,000 17. Increase Planning – Professional Service: $351,383 18. Increase Planning – Professional Services (Reimbursable): $272,913 Non-General Fund: 19. Appropriate Additional Maintenance Funds in the Vehicle Maintenance Fund (Police Vehicles): $10,000 20. Remove Budget for Eastern Dublin Arterial Street and Freeway Project (st0295): $2,598,813 ATTACHMENT 1 NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby amend the Adopted Budget and Financial Plan for Fiscal Year 2013-14 to account for the items listed in this resolution. th PASSED, APPROVED AND ADOPTED this 6 day of May, 2014, by the following vote: AYES : NOES : ABSENT : ABSTAIN : ______________________________________ Mayor ATTEST : _______________________________________ City Clerk ATTACHMENT 1 GENERALFUNDSUMMARY ATTACHMENT2 FY2013143rdQUARTERFINANCIALREVIEW 1of2 1213131413141314Changefrom ActualAdoptedAmendedProjectedAmended Revenues PropertyTaxes23,590,10224,153,05025,169,05425,169,054 SalesTax15,359,34016,271,40016,271,40017,069,948798,548 OtherTaxes5,054,2574,333,0004,333,0004,459,837126,837 BuildingPermits4,627,6312,255,0203,455,0203,781,700326,680 OtherLicenses&Permits627,878535,750605,750768,773163,023 Fines&Penalties132,616138,260138,260138,260 Interest(541,639)652,160352,160352,970810 Rentals&Leases582,039581,270581,270581,270 Intergovernmental208,904183,620183,620183,620 ChargesforServices9,076,1477,093,6307,093,6307,713,730620,100 OtherRevenue4,374,340327,510339,010339,010 CommunityBenefitPayment4,154,1601,461,2101,461,2101,846,210385,000 SubtotalRevenues67,245,77557,985,88059,983,38462,404,3822,420,998 CarryoverPriorYearRevenues12,445,2865,958,286(6,487,000) TotalRevenues67,245,77557,985,88072,428,67168,362,668(4,066,002) Expenditures Salaries&Wages8,769,6279,279,3409,193,2209,193,220 Benefits4,127,8334,628,8304,607,6644,607,664 Services&Supplies1,992,1202,308,5202,349,0672,349,067 InternalServiceFundCharges1,459,3281,770,2801,770,2801,770,280 Utilities1,576,9851,944,3101,949,6751,949,675 ContractedServices33,987,43135,891,55037,424,85738,399,152974,295 CapitalOutlay369,956236,420251,577251,577 Interest&Other119,8581,172,9308,437,6201,950,620(6,487,000) TotalExpenditures52,403,13857,232,18065,983,95960,471,254(5,512,705) OPERATINGBUDGETIMPAC14,842,636753,7006,444,7127,891,4157,933,703 T TransfersOuttoCIP(2,289,252)(8,422,370)(12,942,263)(12,942,263) NETIMPACTONRESERVES12,553,385(7,668,670)(6,497,551)(5,050,848) ReserveBalances NonSpendable2,836,1302,186,940 Restricted500,000500,000 Committed36,020,17130,144,095 Assigned23,912,89622,649,575 Unassigned/UnrealGains(263,162) Unassigned/CashFlow14,311,09810,827,388 TOTALRESERVES77,317,13366,307,998 GENERALFUNDRESERVES: ATTACHMENT2 FY201415andFY201516ProposedBudget(Preliminary) 2of2 1112121313141314TOTAL1314YE ActualActualINCREASEDECREASECHANGEProjected NetBudgetImpact7,558,81814,842,6367,891,415 Lessrevenuecarryover(5,958,286) TransfersOut(6,938,330)(2,289,252)(12,942,263) TOTALCHANGETORESERVES620,48812,553,385(11,009,134) ReserveBalances NonSpendable3,433,8862,836,130810(650,000)(649,190)2,186,940 PrepaidExpenses20,14634,75634,756 CemeteryEndowment60,00060,00081081060,810 AdvancetoPublicFacilityFees AdvancetoFireImpactFee1,358,9141,098,606(250,000)(250,000)848,606 AdvancetoPERSSideFund1,994,8261,642,768(400,000)(400,000)1,242,768 Restricted468500,000500,000 HeritageParkMaintenance500,000500,000 Committed24,176,65036,020,1716,316,538(12,192,614)(5,876,076)30,144,095 EconomicStability5,868,8475,868,8475,868,847 DowntownPublicImpr1,000,0001,000,0001,000,000 OpenSpaceFunding1,000,0002,000,000(2,000,000)(2,000,000) AffordableHousing1,000,0001,000,0001,000,000 EmeraldGlenAquaticCtr1,500,0001,500,0001,500,000(102,350)1,397,6502,897,650 EmergencyCommunications741,000741,000741,000 FireSvcsOPEB5,148,0217,610,058400,000400,0008,010,058 Innovations&NewOpport3,372,7851,372,7851,372,785 MaintenanceFacility1,083,9896,027,950(6,027,950)(6,027,950)0 CemeteryExpansion750,0001,641,5381,641,5382,391,538 FallonSportsPark CivicCtrExpansion767,922391,568(391,568)(391,568)0 EmergencyGenerator79,867 PublicSafetyComplex1,272,8113,070,746(3,070,746)(3,070,746)(0) JtCity/SchoolProjects600,000(600,000)(600,000) NonStreetsCIPCommitments2,745,8092,745,809 ShannonCenterParkingLot775,000775,000775,000 AdvancetoPublicFacilityFee2,000,0002,000,0002,000,000 OneTimeInitiative1,341,4081,341,4081,341,408 Assigned22,080,67723,912,896325,000(1,588,321)(1,263,321)22,649,575 AccruedLeave863,379896,658896,658 OperatingCarryovers652,585986,326(986,326)(986,326)0 CIPCarryovers215,587265,845(265,845)(265,845)(0) CatastophicLoss10,537,27110,537,27110,537,271 ServiceContinuity2,410,0002,410,0002,410,000 Pension&OPEB7,073,8168,480,6468,480,646 FiscallyResponsibleAdj328,039336,150325,000(336,150)(11,150)325,000 Unassigned15,072,06814,047,93514,430,935(17,651,482)(3,220,547)10,827,388 UnassignedUnrealizedGains1,013,252(263,162)263,162263,162 Unassigned(Available)14,058,81614,311,09810,827,388 TOTALRESERVES64,763,74977,317,13321,073,283(32,082,417)(11,009,134)66,307,999 1of2 ATTACHMENT3 CITYOFDUBLINBUDGETCHANGEFORM FY201314 BudgetChangeReference#: CityCouncil'sApprovalRequired FromUnAppropriatedReservesXTransferbtwnFundsX Other FromDesignatedReserves BudgetChange DescriptionAccountAmount wśōś■ĵś/╙Ă■┼śℓ⁬ GeneralFundSalesTax1001.0000.42101$160,548 GeneralFundInLieuSalesTax1001.0000.42102$638,000 GeneralFundElectric1001.0000.42401$126,837 GeneralFundFirePreventionFireAlarm1001.2402.48301$29,950 GeneralFundFirePreventionSprinkler/Underground1001.2402.48302$95,000 GeneralFundBuildingDivBuildingPermits1001.8102.44231$326,680 GeneralFundBuildingDivCityCalgreenBuildingPermitSurcharge1001.8102.44233$46,164 GeneralFundEngineeringEncroachment1001.8301.44241$73,663 GeneralFundFirePreventionFirePermitsAnnual1001.2402.44212$20,000 GeneralFundFirePreventionFirePlanCheck1001.2402.48305$17,150 GeneralFundBuildingDivConstructionandDemoPermits1001.8102.44232$23,196 GeneralFundPlanningZoning1001.8101.48911$773,000 GeneralFundSantaRitaFireServices1001.0000.48399($295,000) GeneralFundCommunityBenefitPayments1005.0000.49151$385,000 9ŝ♫ś■ŕ╜Ċĵŉś/╙Ă■┼śℓ⁬ GeneralFundAttorneyServiceforCampParkspartnership1001.1501.64001$75,000 GeneralFundPublicWorksPotablewaterconversion1001.3401.64102$25,000 GeneralFundParkscricketpitchupgradeandimprovements1001.7901.64001$100,000 GeneralFundBuildingInspection1001.8102.64001$150,000 GeneralFundPlanningProfessionalServices,General1001.8101.65101$351,383 GeneralFundPlanningProfessionalSvcs,Reimbursable1001.8101.65106$272,913 GeneralFundContributiontoFireServicesOPEB1001.2401.81998($6,487,000) VehicleMaintenanceInternalServiceFund,Police6501.1901.61302$10,000 G:\QuarterlyReports\1314Q3\BudgetChange_Q3050614BudgetChange_Q3050614 2of2 ATTACHMENT3 CITYOFDUBLINBUDGETCHANGEFORM FY201314 BudgetChangeReference#: CityCouncil'sApprovalRequired FromUnAppropriatedReservesXTransferbtwnFundsX Other FromDesignatedReserves BudgetChange DescriptionAccountAmount /Lttŉ◘╨śľĊ/╙Ă■┼śℓ⁬ EasternDublinArterialSt&Fwy(Projectst0295)totalproject:($2,598,813) ReducePhase9100st0295.9100.9101($24,794) ReducePhase9200st0295.9200.9201($148,000) ReducePhase9300st0295.9300.9301($723,841) ReducePhase9400st0295.9400.9401($907,639) ReducePhase9500st0295.9500.9501($794,539) TransferinfromEasternDublinTrafficImpactFeeFundsCategory1st0295.4301($2,100,450) TransferinfromEasternDublinTrafficImpactFeeFundsCategory2st0295.4302($498,363) NOTES SeeStaffReportfordescriptionsofadjustments. CityCouncilMeeting5/6/2014 AsPresentedatthe **********FinanceUseOnly********** PostedBy: Date: G:\QuarterlyReports\1314Q3\BudgetChange_Q3050614BudgetChange_Q3050614