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Home My WebLink About4.9 Fiscal Year 2021-22 2nd Quarter Financial ReviewSTAFF REPORT CITY COUNCIL Page 1 of 5 Agenda Item 4.9 DATE:March 15, 2022 TO:Honorable Mayor and City Councilmembers FROM:Linda Smith, City Manager SUBJECT:Fiscal Year 2021-22 2nd Quarter Financial ReviewPreparedby:Lisa Hisatomi,Director of Administrative Services EXECUTIVE SUMMARY:The City Council will receive a financial report through the second quarter for Fiscal Year 2021-22and consider amendments to the Fiscal Year 2021-22 Budget via a budget change. STAFF RECOMMENDATION:Receive the report and approve the budget change. FINANCIAL IMPACT:Approval of the budget change will result in a net increase to the General Fund revenue budget of $6,317,443 and a net increase in the General Fund expenditure budget of $1,503,030, for a netincreaseinGeneral Fund reserves of $4,814,413. The City is projected to be in an operating surplus position of $17,006,920 in Fiscal Year 2021-22. Total General Fund reserves are projected at $209,116,308 by June 30, 2022. 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 2021-22General Fund Amended Budget and projected reserves.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. 366 Page 2 of 5 OverviewStaff presented the Fiscal Year 2021-22 Budget in June 2021, when the economy was just beginning a recovery from the COVID-19 pandemic and related shutdowns. As the speed and level of recovery was uncertain at the time, Staff used conservative assumptions for the City’s major revenue categories. The majority of the budget changes below realign those conservative assumptions with actual receipts through December.General Fund ChangesTable 1 below reflects the proposed changes to revenues and expenditures in this mid-year report and their impacts on total City reserves, followed by a discussion of the changes. Table 1: Revenue and Expenditure ChangesCategoryRevenues Expenditures Net ImpactProperty Tax $1,000,000 $1,000,000 Sales Tax 3,300,000 3,300,000 Transient Occupancy Tax 250,000 250,000 Parks & Recreation Programs 945,543 668,930 276,613 One-time Revenues 50,000 50,000 Development Services 771,900 363,000 408,900 Contract Services 471,100 (471,100)Total Impact on GF Reserves $6,317,443 $1,503,030 $4,814,413 PropertyTaxRevenue– increase of $1,000,000While the pandemic delayed home and property sales in the 2020 calendar year, it did not significantly impact the growth most communities experienced in 2021. New construction continued even through shortages in building supplies in the second half of the year. Increased home prices (23% higher than the previous year) are being driven by fewer properties being offered for sale and the lower interest rates for home loans. Sales TaxRevenue– increase of $3,300,000The City continues to experience strong sales tax revenue growth in Fiscal Year 2021-22, particularly in the Autos and Transportation and Consumer Goods categories. Auto sales prices increased for both new and used cars, and many consumers traded up for luxury vehicles. Growth in the Consumer Goods category reflected a return to in-store shopping, especially in retail apparel and specialty stores. Additionally, the City’s share of the countywide use tax pool allocations (e-commerce) remains strong. TransientOccupancy Tax(TOT)Revenue– increaseof $250,000As the hotel industry begun a slow return to pre-pandemic levels during this fiscal year, the City is starting to see recovery in TOT (hotel tax) revenues that will continue into next year. 367 Page 3 of 5 Parks andCommunity Services (PCS)Programs – netrevenueincrease of $276,613The Fiscal Year 2021-22 Budget assumed the resumption of all programs in the fall of 2021 with modifications in place according to health guidelines related to reduced class and group sizes. With the guidelines relaxing, PCS revenues are projected to be $945,543 higher than budgeted, partially offset by an increase in related expenditures by $668,930 for contracted services. Additionally, the City will incur one-time repair costs ($204,567) for damaged equipment at The Wave; the majority of which will be reimbursed through the City’s insurance. Proposed budget adjustments also reflect increases in facility, field, and sports court rentals, as well as an increase in program enrollments.One-TimeRevenues– increaseof $50,000The budget for one-time revenues is being adjusted for the receipt of a community benefit payment from the Avalon Bay project for pedestrian access improvements to BART.DevelopmentServices –netrevenueincreaseof $408,900Due to a shift in the timing of various projects, development revenues are expected to increase $771,900 from the budget, offset by an increase of $363,000 in related expenditures. Contract ServicesExpenditures– net increase of $471,100Contract Services costs are increasing as the net result of the following: o Public Works’ use of consulting services for 1) a workspace planning study; 2) increased traffic signal repair and maintenance costs; 3) consulting services for grant application assistance (total +$311,100). o Additional vehicle repair and maintenance for police vehicles (+$75,000). o Consulting services and repair costs for Senior Center property damaged by a third party. These costs will be reimbursed by insurance (+$85,000).General Fund Reserves and Transfers OutAfter incorporating all adjustments, total reserves are projected to slightly decrease by $648,187from prior year, as illustrated in Table 2 below. Table 2: General Fund Reserve Changes FY 2020-21 Actual FY 2021-22 Adopted FY 2021-22 Amended*New FY 2021-22 Amended*Total Reserves, Beg of Year $190,649,224 $209,764,495 $209,764,495 $209,764,495 Revenues 103,200,620 98,397,780 98,753,604 105,071,047 Expenditures (74,121,779)(83,917,877)(86,561,097)(88,064,127)Net Operating Budget Impact $29,078,842 $14,479,903 $12,192,507 $17,006,920 Transfers In 273,623 56,600 191,116 191,116 Unrealized Gain/Loss (3,936,480)Transfers Out/Contrib. to Other (6,300,714)(6,038,550)(17,846,223)(17,846,223)Total Reserves, End of Year $209,764,495 $218,262,448 $204,301,895 $209,116,308 368 Page 4 of 5 * Includes $2.0M and $12.5M budget carryover from FY 20-21 for operating and CIP programsThe City has $17,846,223 budgeted in transfers out of the General Fund, the majority of which ($13,959,854) are covered by Committed and Assigned Reserves. Table 3 summarizes General Fund Transfers Out by reserve category.Table 3: Summary of General Fund Transfers Out Type FY 2020-21 Actual FY 2021-22 Adopted FY 2021-22 Amended New FY 2021-22 AmendedCIP Specific -Assigned/Committed $4,352,208 $2,404,645 $11,224,744 $11,224,744CIP Carryovers -Assigned 2,735,111 $2,735,111CIP -Undesignated 948,506 1,633,905 1,886,369 1,886,369Contribution to ISF 1,000,000 1,000,000 1,000,000 1,000,000Contribution to PERS 1,000,000 1,000,000 1,000,000Total Transfers Out $6,300,714 $6,038,550 $17,846,223 $17,846,223A listing of 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.Non-General Fund ItemsIn addition to the changes to the General Fund, there are various budget amendments in other funds that require City Council approval, to do the following: Decrease Public Facilities Fee Fund revenue by $261,000 to reconcile with project timelines (these revenues were collected in the prior fiscal year). Increase Traffic Impact Fee Fund revenue by $1,027,000 to reconcile with project timelines. Increase Dublin Crossing Fund revenue by $3,350,000 to reconcile with project timelines. Increase State Seizure/Special Activity Fund revenue by $74,000 for the City's adjudicated share of State seizure funds; and increase the budget by $30,000 for the procurement of equipment to assist police investigations. Increase State Grant - Park Fund revenue by $271,600 for the grant reimbursement for Imagine Playground - Dublin Sports Ground. Increase Affordable Housing Fund revenue by $5,000,000 for the repayment of the acquisition cost of the Regional Street site. Decrease American Rescue Plan Act Fund expenditures by $766,025 due to not filling City positions and staffing of the Dublin Police Service Behavioral Health Unit for a part of the fiscal year. This budget reduction is rolled over and accounted for in the Fiscal Year 2022-23 budget.Non-budgetary Administrative Items Ratify the purchase of two police vehicles made by the City Manager under a time constraint due to the major supply chain issues caused by the pandemic. 369 Page 5 of 5 STRATEGIC PLAN INITIATIVE:Strategy 2: Explore New City Revenue Streams for Long Term Financial StabilityObjective 2D: Continue to maintain strong fiscal policies. NOTICING REQUIREMENTS/PUBLIC OUTREACH:The City Council Agenda was posted. ATTACHMENTS:1) General Fund Summary Q2 FY 2021-222) General Fund Reserves Q2 FY2021-223) General Fund Transfers Out Q2 FY 2021-22 4)Budget Change Q2 FY 2021-22 370 Attachment 1GENERAL FUND SUMMARY - Q2 FY 2021-22 Actual 2020-21 Adopted 2021-22 Amended 2021-22 Q2 Adjustment New Amended 2021-22 Revenues Property Tax $53,007,086 $52,763,000 $52,763,000 $1,000,000 $53,763,000 Sales Tax 24,860,469 22,528,000 22,528,000 3,300,000 $25,828,000 Sales Tax Reimbursements (219,445)(610,000)(610,000)($610,000) Development Revenue 7,391,926 7,721,318 8,044,983 771,900 $8,816,883 Transient Occupancy Tax 743,962 750,000 750,000 250,000 $1,000,000 Other Taxes 6,441,357 5,732,706 5,732,706 $5,732,706 Licenses & Permits 334,852 313,434 313,434 $313,434 Fines & Penalties 75,394 107,432 107,432 $107,432 Interest Earnings 2,809,671 1,200,000 1,200,000 $1,200,000 Rentals and Leases 822,841 1,020,768 1,020,768 434,825 $1,455,593 Intergovernmental 300,618 285,000 285,000 $285,000 Charges for Services 4,794,938 5,268,891 5,268,891 510,718 $5,779,609 Other Revenue 1,836,951 1,317,231 1,349,390 50,000 $1,399,390 Subtotal Revenues - Operating $103,200,620 $98,397,780 $98,753,604 $6,317,443 $105,071,047 Transfers In $273,623 $56,600 $191,116 191,116 Unrealized Gains/Losses (3,936,480) - Total Revenues $99,537,763 $98,454,380 $98,944,720 $6,317,443 $105,262,163 Expenditures Salaries & Wages $10,666,813 $12,772,606 $12,772,606 $12,772,606 Benefits 4,754,632 5,372,420 5,372,420 - $5,372,420 Services & Supplies 2,782,316 4,110,511 4,351,749 160,000 $4,511,749 Internal Service Fund Charges 3,685,246 3,907,323 3,907,323 - $3,907,323 Utilities 2,399,088 3,045,467 3,045,467 - $3,045,467 Contracted Services 49,039,885 54,367,888 55,383,221 1,296,230 $56,679,451 Capital Outlay 639,176 118,677 529,605 46,800 $576,405 Debt Service Payment - 975,720 - $975,720 Contingency & Miscellaneous 154,622 222,985 222,985 - $222,985 Subtotal Expenditures - Operating $74,121,779 $83,917,877 $86,561,097 $1,503,030 $88,064,127 Operating Impact (REV-EXP)$29,078,842 $14,479,903 $12,192,507 $4,814,413 $17,006,920 Transfer Outs & Contributions to Other Funds Transfers Out (CIPs) - Com./Assig. Reserve (1)4,352,208 2,404,645 11,224,744 - 11,224,744 Transfers Out (CIPs) - Undesignated (1)$948,506 1,633,905 4,621,480 - $4,621,480 Contribution to OPEB/PERS 1,000,000 1,000,000 - 1,000,000 Contribution to ISF 1,000,000 1,000,000 1,000,000 - 1,000,000 Subtotal - Transfers Out & Contributions (2)6,300,714 6,038,550 17,846,223 - 17,846,223 Total Expenditures $80,422,492 $89,956,427 $104,407,320 $1,503,030 $105,910,350 GF Impact (Include CIP & Transfers)$19,115,271 $8,497,953 ($5,462,600)$4,814,413 ($648,187) TOTAL GENERAL FUND BALANCE $209,764,495 $218,262,448 $204,301,895 $209,116,308 Contracted Services Detail Actual 2020-21 Adopted 2021-22 Amended 2021-22 Q2 Adjustment New Amended 2021-22 Police Services (3)$20,731,301 $22,294,777 $21,788,548 $21,788,548 Fire Services (3)13,846,016 14,609,570 14,609,570 $14,609,570 Maintenance Services (MCE)5,344,843 5,933,838 5,933,838 $5,933,838 Development (CDD and PW)3,059,578 4,107,935 4,646,552 363,000 $5,009,552 Other Contracted Services 6,058,148 7,421,768 8,404,714 933,230 $9,337,944 Total Contracted Services $49,039,885 $54,367,888 $55,383,221 $1,296,230 $56,679,451 (1) Amended budget for operating expenditures includes $2,027,817 carryover from FY 20-21 (3) Police and Fire liability insurance amounts are not included above, they are included in Services & Supplies. (2) Amended Budget for Transfers Out to CIP includes $12,517,349 carryover from FY 20-21 and reduction of General Fund contribution for the Citywide Energy Improvement project 371 Attachment 2GENERAL FUND RESERVES SUMMARY- Q2 FY 2021-22 RESERVE DESCRIPTION Actual 2020-21 Increase 2021-22 Decrease 2021-22 Net Change Projected 2021-22 Non-Spendable $13,266 $13,266 Prepaid Expenses 13,266 13,266 Restricted $4,493,314 $4,493,314 Cemetery Endowment 60,000 60,000 Developer Contr - Downtown 1,490,000 1,490,000 Developer Contr - Heritage Pk 19,000 19,000 Developer Contr - Nature Pk 60,000 60,000 Section 115 Trust - Pension 2,114,314 2,114,314 Heritage Park Maintenance 750,000 750,000 Committed $70,694,542 ($16,634,077)($16,634,077)$54,060,465 Advance to Public Facility Fee 9,857,639 (7,074,270)(7,074,270)2,783,369 Downtown Public Impr 13,000,000 (200,000)(200,000)12,800,000 Economic Development 53,319 (53,319)(53,319)0 Economic Stability 8,000,000 8,000,000 Emergency Communications 532,113 532,113 Fire Svcs Pension/OPEB 5,671,094 5,671,094 Innovations & New Opport 1,031,719 (137,220)(137,220)894,498 One-Time Initiative - Capital 4,966,110 (1,476,078)(1,476,078)3,490,032 One-Time Initiative - Operating 503,860 503,860 Public Safety Reserve 2,600,000 2,600,000 Specific Committed Reserves Cemetery Expansion (CIP)1,173,549 (1,173,549)(1,173,549) Contribution to Public Facility Fee 6,000,000 6,000,000 Cultural Arts Center 4,539,197 (4,364,197)(4,364,197)175,000 Don Biddle Park (CIP)2,100,000 (2,100,000)(2,100,000) Fallon Sports Park III Contingency 3,110,500 3,110,500 Lease Revenue Bond Payment 4,000,000 4,000,000 Maintenance Facility (CIP)55,443 (55,443)(55,443) Utility Undergrounding (CIP)3,500,000 3,500,000 Assigned $66,743,520 ($1,810,019)($1,810,019)$64,933,502 Accrued Leave 1,296,514 1,296,514 Catastrophic Loss 17,710,320 17,710,320 CIP Carryovers 2,735,111 2,735,111 Fiscally Responsible Adj 325,000 325,000 Municipal Regional Permit 2,212,931 (418,403)(418,403)1,794,528 Non-Streets CIP Commitments 2,366,100 (93,600)(93,600)2,272,500 Operating Carryovers 1,882,745 1,882,745 Parks and Streets Contingency 201,270 201,270 Pension & OPEB 16,000,000 16,000,000 Relocate Parks Dept 500,000 500,000 Service Continuity 3,150,000 3,150,000 Specific Assigned Reserves Climate Action Plan 3,000,000 3,000,000 Contribution to ISF 1,500,000 1,500,000 Façade Improvement Grants 374,157 374,157 HVAC Replace. & Civic Ctr Improv. (CIP)3,337,009 (1,145,652)(1,145,652)2,191,357 Public Safety Complex (CIP)152,363 (152,363)(152,363) Village Pkwy Pavemt Recon 10,000,000 10,000,000 Unassigned $67,819,852 $18,444,095 ($648,187)$17,795,908 $85,615,761 Unassigned-Unrealized Gains 4,516,760 4,516,760 Unassigned (Available)63,303,092 81,099,001 TOTAL RESERVES $209,764,495 $18,444,095 ($19,092,282)($648,187)$209,116,308 372 Attachment 3 GENERAL FUND TRANSFERS OUT/CONTRIBUTIONS - Q2 FY 2021-22 Project 2021-22 Adopted 2021-22 Amended Committed/ Assigned Reserve* CIPS Alamo Creek Pk and Assessment Dist. Fence Replacement $450,000 $450,000 Annual Street Resurfacing 67,957 Audio Visual System Upgrade 44,020 108,783 City Entrance Monument Signs $200,000 $485,000 $200,000 Citywide Bicycle & Pedestrian Improvements 108,000 263,642 Citywide Energy Improvements 115,780 217,420 Citywide Signal Comm. Upgrade 1,420,149 1,420,149 Civic Center HVAC and Roof Replacement 22,602 22,602 Civic Center Rehabilitation 1,123,050 1,123,050 1,123,050 Cultural Arts Center 4,364,197 4,364,197 Don Biddle Community Park 2,100,000 2,100,000 Downtown Dublin Street Grid Network 60,210 198,550 Downtown Dublin Town Square Park 29,505 97,525 Dublin Blvd Extension 123,000 Dublin Heritage Park Cemetery Phase 1,173,549 1,173,549 EV Charging Stations 137,220 137,220 Financial System Replacement 1,479,831 Green Stormwater Infrastructure 310,855 382,570 382,570 IT Infrastructure Improvement 93,600 93,600 Maintenance Yard Facility Improve 55,443 55,443 Police Services Building 152,363 152,363 Resiliency and Disaster Preparedness Improvements 681,010 Restrooms Replacement 916,120 1,000,000 San Ramon Road Landscape Renovation 238,660 San Ramon Road Trail Improvements 91,113 Subtotal - Transfers Out to CIPS $4,038,550 $15,846,223 $11,224,744 Other Contributions Contribution to OPEB/PERS 1,000,000 1,000,000 Contribution to ISF 1,000,000 1,000,000 Subtotal - Other Contributions $2,000,000 $2,000,000 Total General Fund Transfers Out/Contributions $6,038,550 $17,846,223 * Does not include CIP carryovers from prior year not funded by specific Committed/ Assigned Reserve, but set aside in Assigned - CIP Carryovers 373 Attachment 4 Budget Change Reference #: From Un-Appropriated Reserves X Budget Transfer Between Funds From Designated Reserves Other 1001.0000.42101 (Sales Tax)$3,300,000 1001.0000.41101 (Property Tax)$1,000,000 1001.0000.42301 (TOT)$250,000 1001.8102.44231 (Building Permits)$300,000 1001.xxxx. 46200 (PCS - Multiple Programs - Facility Rentals)$434,825 1001.xxxx. 48000 (PCS - Multiple Programs - Charge for Svcs)$510,718 1009.8101.48911 (Zoning)$471,900 1005.0000.49151 (Community Benefit Payments)$50,000 Special Revenue Funds 2101.0000.49131 (State Seizure/Special Activity Fund)$74,000 2403.0000.47261 (State Grant - Park)$271,600 2901.0000.49141 (Affordable Housing Fund)$5,000,000 Impact Fee Funds - Developer Contributions 4103.0000.49161 (PFF -Community Park Improvements)($125,000) 4104.0000.49161 (PFF - Neighborhood Park Improvements)($87,000) 4107.0000.49161 (PFF - Civic Center)($49,000) 4304.0000.49161 (TIF - Western Dublin)$540,000 4306.0000.49161 (TIF - TVTD)$347,000 4311.0000.49161 (Dublin Crossing TIF)$140,000 4401.0000.49161 (Dublin Crossing Fund)$3,350,000 1001.1402.61301 (Insurance - Repairs)$85,000 1001.2111.61309 (Police Support - Vehicle Repair)$75,000 1001.8301.64001 (Public Works - Contract Services)$211,100 1001.8301.65101 (Public Works - Professional Services)$100,000 Consulting services for Public Works 1) workspace planning study, 2) increase in traffic signal repair and maintenance cost, 3) Bridge and Structure Asset Assessment and Inspection - Phase 2 Higher than anticipated rentals and additional fields and courts available for rent Community benefit payment for Avalon Bay project Adjustment of development project timing Adjustment for fee credit exhausted, developer paid fees instead City's adjudicated share of State seizure fund Grant reimbursement for Imagine Playground - Dublin Sports Ground Repayment of acquisition cost for the Regional Street site increase in enrollments of recreation programs Increase due to reimbursement of costs for SCS Dublin EIR, with offset increase in expenditure Consulting services for grant application assistance General Fund Consulting services and repair cost for Senior Center property damage by a third party. Cost will be reimbursed by insurance REVENUES Increase due to aging fleet CITY OF DUBLIN FISCAL YEAR 2021-22 BUDGET CHANGE FORM City Council's Approval Required OPERATING EXPENDITURES General Fund Increase in taxes based on consultant's updated projections Increase due to change of timeline of development projects Higher than anticipated revenues 374 Attachment 4 Budget Change Reference #: FISCAL YEAR 2021-22 BUDGET CHANGE FORM 1001.xxxx.64005 (PCS - Bldg Maintenance)$220,456 1001.xxxx.64000 (PCS - Contract Services)$401,674 1001.xxxx.64000 (PCS - Capital Outlay)$46,800 1009.8101.65106 (Community Dev. - Professional Services Reimbursable) $363,000 Special Revenue Funds 2907.1201.51101 (ARPA Fund - Salaries)($320,833) 2907.2108.64021 (ARPA Fund - Contract Personnel)($445,191) 2101.2111.71102 (State Asset Seizure Fund - Equipment Exp)$30,000 3/15/2022 Posted By:Date: Increase in profession services reimbursable expense for SCS Dublin EIR Purchase of cabana and Square equipment Program contract services. **********Finance Use Only********** As Presented at the City Council Meeting Custodial services for use of DUSD facilities and increase in maintenance cost due to increase in rental, offset by increase in revenues. $204,567 is for waterslide repairs at The Wave due to vandalism, the cost will be reimbursed by insurance Utilization of asset seizure fund to procure equipment for police investigation Unfilled Management Analyst for full FY and Special Projects Manager for 7 months Unfilled DPS Behavioral Health Unit for 8 months 375