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HomeMy WebLinkAbout4/4/2018 - STAFF REPORTS - 5E 40 PALM SA4 iy a u ,n ` °•b•�° 's ' CITY COUNCIL STAFF REPORT DATE: APRIL 4, 2018 NEW BUSINESS SUBJECT: PRELIMINARY OVERVIEW OF THE FISCAL YEAR 2018-19 BUDGET FROM: David H. Ready, City Manager BY: Department of Finance and Treasury SUMMARY Staff is presenting a preliminary Fiscal Year 2018-19 Budget to the City Council for an initial review. Included are estimates for revenues and expenditures, including personnel-related mandated cost adjustments (e.g. PERS retirement, health care, etc.) and projected increases in utilities, supplies, materials and contracts. Additionally, some department modifications are being considered to enhance service delivery in specific areas and will be outlined as we move through the budget process. The budget presentation will cover the General Fund, Enterprise Funds and Internal Service Funds. The Airport Fund will be presented on April 18th following a recommendation from the Airport Commission. At the request of the Council Budget Subcommittee (Councilmembers Kors and Middleton), a Budget Town Hall meeting is planned for Tuesday, April 24th at 6:00 P.M. The Measure J Commission will join City Council to discuss their recommendations on the Measure J Capital Budget during a meeting in May. Budget discussions will be placed on City Council Meeting Agendas at the meetings of April 18tt', May 2"d and May 18th. The City Charter-mandated Budget Public Hearing, when City Council may adopt the new fiscal year budget will be scheduled for June 6, 2018. RECOMMENDATION: 1. Direct the City Council Budget Subcommittee and Staff as appropriate. STAFF ANALYSIS: Current Fiscal Year 2017-16: Ending June 30 2018 Mid-year, subsequent to the passage of "Measure D", City Council approved 13 positions including 6 Firefighter/Paramedics, 4 Police Officers, 2 Police Community Service Officers and an Accountant position, totaling $1,612,000. ITEM N0. 5 * ; City Council Staff Report April 4, 2018— Page 2 Fiscal Year 2018-19 Budget Preliminary Overview Further, as we close the current fiscal year on June 30, 2018, the Finance Director is projecting a General Fund surplus of approximately $4 million which will be added to the PERS Future Pension Reserve created by City Council to address the anticipated significant pension increases over the next several years (discussed below). FY 2018-19 Overview This preliminary preview of the Fiscal Year 2018-19 budget represents the best estimates of the Finance Department for revenues and expenditures. It is a balanced budget—with an anticipated modest surplus of approximately $161,000. Importantly, it should be noted, a significant impact to an otherwise balanced budget is the upcoming June 5th election — relative to Measure C. This citizen group ballot initiative, if approved by the voters, would ban vacation rentals in single family residential neighborhoods (with the exception of condominiums) resulting in a projected loss of Hotel Transient Occupancy Tax (TOT) revenue of approximately $7 million beginning in Fiscal Year 2020-21. Although this would occur two fiscal years from now, any appreciable level of potential revenue loss requires taking immediate cost reduction measures to avoid a deficit situation. Revenues Total General Fund Revenues are projected at $125,442,000, which represents a 7% increase from the previous fiscal year. The new Y--cent Measure D sales tax is estimated to generate $6.7 million in new revenue. The passage of Measure E, which expands the former Medical Cannabis Tax to include recreational cannabis and cultivation, is projected to add approximately $600,000. Increases are also anticipated in the top four revenue categories: • Transient Occupancy Tax - $850,000 • Property Taxes - $1,100,000 • Sales Taxes - $577,000 • Utilities Users' Taxes - $100,000 Staff will also be recommending all fees be increased by the Consumer Price Index (CPI) of 2.5%, as prescribed by the U.S. Department of Labor. Parks fees will be addressed separately with a recommendation from the Parks Commission at a subsequent City Council Meeting. Expenses Total General Fund Expenses and Transfers are projected at $125,280,000, which is an 11% increase from the previous fiscal year. 02 City Council Staff Report April 4, 2018- Page 3 Fiscal Year 2018-19 Budget Preliminary Overview Employee Compensation In the area of employee compensation, budget line items have been adjusted for contractual obligations related to salaries and benefits, workers compensation, etc. However, all Bargaining Unit contracts expire June 30, 2018, and are currently being re- negotiated - any increases associated with new agreements are yet to be determined and will require an additional budget appropriation. Below is a summary of the current agreements' salary adjustments by unit: Bargaining Unit Compensation Actual for Actual for Actual for Actual for Budget FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Police- Regular +1% +0% +1% +1% TBD Police- Management +1% +0% +2% +1% TBD Fire- Regular +0% +2% +0% +1% TBD Fire - Management +0% +2% +0% +2% TBD General Unit +0% +2% +0% +2% TBD Management Association of PS +0% +2% +0% +2% TBD Executive / Non-Represented +0% +2% +0% +2% TBD Pension Costs - PERS Employee pension costs are the next largest expense category for the City. Employer rates for all public agencies are determined annually for the upcoming fiscal year by the State's CalPERS Board. Below is a summary of recent rate increases: Employer PERS Rate Increases Actual for Actual for Actual for Actual for Actual for By Group FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Police & Fire (Safety) +4.555% +2.846% +4.728% +3.214% +3.876% Non-Safety (Miscellaneous) +2.574% +2.262% +1.628% +1.182% +2.877% Beginning in FY 2018-19, PERS costs will begin increasing at a higher rate as new investment earnings assumptions, known as 'the discount rate' (or PERS anticipated 20-year average rate of return on investments) are being implemented state-wide, resulting in several years of higher required employer contributions. Additionally, PERS is changing the amortization term on unfunded liabilities from 30 years to 20 years, which will affect required contributions beginning in FY 2021-22. The following graph illustrates the most recent update to the CaIPERS projections. Even without the included change to the amortization term on unfunded liabilities, which occurs in FY 2021-22, annual required contributions will almost double over a six-year period: 03 City Council Staff Report April 4, 2018— Page 4 Fiscal Year 2018-19 Budget Preliminary Overview Total PERS Costs 16-17 17-18 18-19 19-20 20-21 21-22 22-23 BEFORE Change Discount Rate @ 7.5% $13.5 $15.1 $16.2 $18.2 $19.5 $20.8 $21.9 Total PERS Costs AFTER Change $13.5 $15.1 $16.8 $19.3 $21.6 $23.9 $25.8 New Discount Rate 7.38% 7.25% 7.0% 7.0% 7.0% Amortization term on Unfunded Liabilities changed from 30-years to 20-years $?? $?� -- Unknown additional $$$ required starting FY 21-22 Last year as part of the current fiscal year budget process and in response to these anticipated PERS increases, the City Council created a special reserve account, setting aside funds for future years' cost increases. Currently, $3.25 million is appropriated in this account, and the Budget Subcommittee is recommending adding $7 million ($4 million carryover from the current fiscal year budget surplus and $3 million appropriated in the new budget) for a total of$10.25 million. In addition, beginning this Fiscal Year, Staff will be recommending the Airport Fund annually contribute $500,000 to the PERS Reserve. Department Budget Modifications Several Department budgets have increased to accommodate additional spending requirements and various personnel position modifications. An itemized list of these requests can be found on page 8 of the Preliminary Budget document. For example, an additional $250,000 is required from the General Fund to backfill the lost Redevelopment Agency (RDA) administration funds for economic development that terminate this fiscal year per the state RDA dissolution process. Also, the Community and Economic Development Department has added $100,000 to match the Desert Healthcare District's homelessness wrap-around services grant. Other Budget Increases Utility rate increases for water and electricity are anticipated to increase an additional $400,000; including $146,000 for fleet and facilities costs; $200,000 for debt service costs; and $37,000 for the animal shelter agreement contractual CPI. 04 City Council Staff Report April 4, 2018—Page 5 Fiscal Year 2018-19 Budget Preliminary Overview With regard to liability and property insurance, an additional $300,000 for anticipated coverage increases has been added to the proposed budget. However, formal insurance costs will not be available until May pending a final report from our insurance broker. Sponsorships/Grants A revised and simplified application process was implemented for organizations seeking to request City grants and sponsorships funding. The applications were made available in early March and responses are due April 9th. In the current budget, $417,500 was appropriated for these requests — and an additional $130,250 was approved as "in-kind" contributions of departmental services, such as waiving City use of facility fees and staff overtime. Staff has included this same amount as a budget placeholder pending further City Council direction. Capital Improvements Given the City's extensive capital improvement needs, $4.5 million has been included in the proposed budget including $3 million for facilities maintenance and repairs, $1 million for street resurfacing (augmenting Measure J funding), and $500,000 for vehicle replacement. Additionally, the Budget Sub-Committee is recommending transferring an additional $3 million from General Fund reserves to the Capital Fund for major projects, including continued Fire Station renovations, Indian Canyon Two-Way project, the new Downtown Park, Library improvements, etc. This would create a $7.5 million capital improvement budget in the new fiscal year. Also, the Measure J Commission has made a recommendation regarding $3.2 million available in the Measure J Fund for capital projects in the new fiscal year (see page 10 of the Preliminary Budget document). The Commission will join City Council at the April 18th Council meeting to review their recommendations. Reserves The new fiscal year budget recommendation provides for a General Fund reserve balance of $18,718,000, which represents 16.35% of annual operations. Although a reduction from the previous fiscal year, this is still within the generally accepted reserve range of 10%-20%. Next Steps April 181h Airport Budget April 20 Town Hall Budget Meeting May 2"d Capital Budget Discussion with Measure J Commission May 16th Continued Budget Discussion June 6th Budget Public Hearing June 20th Deadline for budget approval 05 City Council Staff Report April 4, 2018— Page 6 Fiscal Year 2018-19 Budget Preliminary Overview The Budget Public Hearing scheduled for June 6th is required by City Charter. City Council may approve the FY 2018-19 Budget after the Public Hearing or may continue the item for approval on June 20th. David H. Ready, Esq., Ph. Geoffrey S. Kiehl City Manager Director of Finance and Treasurer Attachments: Preliminary Budget FY 2018-19 06 PRELIMINARY BUDGJW-6 - FY 2018-19 FpALM g �O A'pi c R t M1C �l�t �MYRIl� Cq 41FOIL DRAFT , City Council Meeting - April 4, 2018 07 City of Palm Springs Table of Contents Budget Calendar FY 2018-19 Page 1 General Fund Proposed Budget Summary for 2017-18 / 2018-19 Page 2 Recommended Budget Summary operating Fund Page 3 General Fund Revenues Page 4 General Fund Expenses Page 5 General Fund Summary Page 6 & 7 Department Line Item Requests FY 18-19 Page 8 New Unfunded Capital Project Requests FY 18-19 Page 9 Measure J Commission Top Five Unfunded Capital FY 18-19 Page 10 City of Palm Springs 3/29/2018;4:33 PM FY 2018-2019 BUDGET CALENDAR April 4, 2018 Preliminary Budget April 12, 2018 Special Events and Contributions Applications Due to City Clerk's Office April 18, 2018 Public Hearing on Building, Engineering and Planning Fee Increases on Comprehensive Fee Schedule for July 1st April 18, 2018 Airport Budget April 24, 2018 Town Hall Budget Meeting May 2, 2018 Capital Budget Discussion with Measure J Commission May 16, 2018 Continued Budget Discussion June 6, 2018 Public Hearing and Adoption of Budget for FY 2018-19 June 20, 2018 Final Meeting to Adopt Budget PALM Sa � Z V N ro..rt •° C��lfORN,P 09 Page 1 General Fund Proposed Budget Summary 2017-2018 and 2018-2019 Fiscal Years City of Palm Springs Includes the Following: • CalPERS Reserve Set-Aside $37000,000 • Capital - Facilities 3,000,000 • Capital - Vehicles 5009000 • Capital - Street Repairs 110005000 • Capital - Other Projects 370005000 • Departmental Reorganizations and Position Additions 3509000 • Departmental Budget Requests 5459000 Total Additional Items $11,3955000 Projected Preliminary 2017-2018 2018-2019 Revenues $1161970,862 $12594419854 Expenditures (112,962,182) (125,280,457) Surplus / (Deficit) $490085680 $161 ,397 Additional Transfer to PERS Reserve ($4,0009000) Additional Capital - Other Projects ($39000,000) 17-18 Unrestricted Beginning Balance $2195485391 Projected Unrestricted Ending Balance $21 ,557,071 $18,718,468 Reserve as a % 20.82% 16.35% 3/29/2018;2:27 PM Page 2 10 BUDGET OVERVIEW GENERAL FUND PRELIMINARY FY 2018-19 BUDGET SUMMARY FUNDS AVAILABLE Revenue Property Tax 24,150,000 TOT 33,540,000 Sales Tax 13,585,000 Measure J Sales Tax 13,800,000 Cannabis Tax/ Fees 2,350,000 Utility Users Tax 7,100,000 Franchise Fees 3,100,000 Motor Vehicle License Fees 4,700,000 Administrative Service Charges 2,230,934 Business License 1,000,000 Building Permits 1,410,000 All Other 17,588,420 Total Revenue 124,554,354 Transfers In From: Gas Tax(133) 600,000 Airport General Operations (415) 287,500 Total Transfer In 887,500 Total Operating Funds Available 125,441,854 FUNDS REQUIRED Appropriations 103,635,055 Transfer Out To: Debt Service(301) - Police Building and Others 136,551 Chevron /Opterra 1,094,850 Parking Structure 569,900 Total Transfers for Debt 1,801,301 Public Safety- CFD (140) 100,000 Parking Fund - Operations (131) 40,000 Master Lease(139) 381,000 Emergency Response Fund (136) 10,000 Capital Projects (261) 7,000,000 Capital Projects- Measure J (260) 13,800,000 Golf Course (430) 1,013,101 Motor Vehicle (510) 500,000 Total Transfer Out 24,645,402 Total Operating Funds Required 128,280,457 Estimated Reserve 18,718,468 Reserve as a % 16.35% Page 3 1 1 BUDGET OVERVIEW GENERAL FUND REVENUES FY 2018-19 MAJOR GENERAL FUND REVENUES The following graph and schedule identify the major sources of revenue for the 2018-19 adopted General Fund budget. 2018-19 Revenues as a Percent of Total 1 18% 9% 2% ■Property Taxes 4% ■Sales&Use Taxes 11% •Transient Occupancy Tax(TOT) 2% ■Measure J Sales Tax ■Utility Users Tax ■Franchise Fees 6% a Motor Vehicle In Lieu Tax ■Cannabis Tax&Fees All Other Sources 11% 27% MAJOR GENERAL FUND REVENUES ADOPTED ADOPTED PRELIMINARY % CATEGORY 2016-17 2017-18 2018-19 CHANGE Property Taxes 20,892,100 22,550,000 24,150,000 7.1% Sales & Use Taxes 12,040,686 12,375,517 13,585,000 9.8% Transient Occupancy Tax (TOT) 26,200,000 29,660,000 33,540,000 13.1% Measure J Sales Tax 13,100,000 13,400,000 13,800,000 3.0% Utility Users Tax 7,500,000 7,200,000 7,100,000 -1.4% Franchise Fees 3,100,000 3,200,000 3,100,000 -3.1% Motor Vehicle In Lieu Tax 4,219,000 4,200,000 4,700,000 11.9% Cannabis Tax & Fees 1,450,000 1,500,000 2,350,000 56.7% All Other Sources 13,246,139 15,645,318 22,229,354 42.1% TOTALS $ 101,747,925 $ 109,730,835 $ 124,554,354 13.5% 12 Page 4 BUDGET OVERVIEW GENERAL FUND EXPENSES FY 2018-19 GENERAL FUND EXPENSES The following graph and schedule identify the major expenses for the FY 2018-19 adopted General Fund budget. 2018-19 Expenses as a Percent of Total 8% 2% \ z0% 7% ■Administration ■Growth Management 9% ■Quality of Life ■Public Safety ■Public Works&Engineering ■Marketing&Tourism •Contractual Obligations" 10% 44% MAJOR GENERAL FUND EXPENSES BY CATEGORY ADOPTED ADOPTED PRELIMINARY % CATEGORY 2016-17 2017-18 2018-19 CHANGE Administration 12,026,080 14,228,358 20,799,614 46.2% Growth Management 6,529,848 7,961,915 9,269,998 16.4% Quality of Life 9,613,414 10,332,315 10,284,496 -0.5% Public Safety 41,133,721 42,743,594 45,284,107 5.9% Public Works & Engineering 6,708,601 6,707,536 6,914,932 3.1% Marketing & Tourism 2,436,500 2,436,500 2,436,500 0.0% Contractual Obligations" 8,446,370 8,646,370 8,645,407 0.0% TOTALS $ 86,894,534 $ 93,056,588 $ 103,635,055 11.4% Debt Service included in Convention Center (2180) Page 5 13 Combined Changes in Estimated Cash Estimated Adopted Adopted Preliminary Adopted Estimated Cash Reserve Revenues Transfer-in Expenses Transfer-Out Cash Reserve Fund Description 7/1/2018 FY 18-19 FY 1849 FY 18-19 FY 18-19 6/30/2019 CITY FUNDS: General Fund 21,557,071 124,554,354 887,500 103,635,055 24,645,402 18,718,468 SPECIAL REVENUE FUNDS: Small Hotel TBID 0 325,000 0 325,000 0 0 Forfeited Assets 0 2,000 0 2,000 0 0 Safety Augmentation 654,922 910,352 0 918,639 0 646,635 Special Development Fund 0 0 0 0 0 0 CSA 152 2,000 566,275 0 556,033 0 12,242 Recycling 826,704 120,000 500,000 198,607 0 1,248,097 PS Villagefest 84,548 508.855 0 510,590 0 82,813 Neighborhood Involvement 50 0 0 0 0 50 Business Improvement District 0 0 0 0 0 0 Energy Efficient Loan Program 500,000 0 0 0 500,000 0 Parking 305,130 220,000 40,000 382,382 0 182,748 Parking Capital Programs 495,769 2,000 0 2,005 0 495,764 Community Block Grant 0 387,834 0 387,834 0 0 Sustainability 5,000 247,207 0 79,164 147,600 25,443 CFD Public Safety#1 5,000 601,429 100,000 706,429 0 0 Land/Light/Park Maintenance 0 356,941 0 356,941 0 0 Air Quality Management 108,610 57,600 0 57,600 0 108,610 Public Arts 425,765 191,000 0 257,457 0 359,308 Library Endowment 0 8,600 0 8,600 0 0 Special Projects 0 200,000 0 200,000 0 0 Special Grants 0 175,000 0 175,000 0 0 Housing Successor Admin 2,470,140 7,500 0 241,585 0 2,236,055 CAPITAL PROJECT FUNDS: Special Gas Tax Improvements 0 1,343,765 0 743,765 600,000 0 Measure A Improvements 0 2,054,000 0 2,054,000 0 0 Measure J Capital 335,912 0 13,800,000 10,507,287 3,200,000 428,625 Drainage 1,453,953 136,500 0 136,500 0 1,453,953 Emergency Response Fund 848,497 1,406,346 10,000 1,525,269 0 739,574 Quimby Park& Recreation 277,500 189,400 0 189,400 0 277,500 Capital Projects 0 86,500 7,000,000 86,500 0 7,000,000 DEBT SERVICE FUNDS: Master Lease 161,086 1,312,700 381,000 1,593,700 0 261,086 Debt Service 129,923 4,692,229 5,001,301 9.693,530 0 129,923 Assessment District 763,532 595,863 0 595,863 0 763,532 'ENTERPRISE FUNDS: Waste Water Treatment 13,578,182 10,280,617 0 10,281,731 0 13,577,068 Golf Course 0 4,395,000 1,013,101 5,408,101 0 0 Page 6 14 CITY OF PALM SPRINGS FY 2018-19 BUDGET Combined Changes in Estimated Cash Estimated Adopted Adopted Preliminary Adopted Estimated Cash Reserve Revenues Transfer-In Expenses Transfer-Out Cash Reserve Fund Description 711/2018 FY 18-19 FY 18-19 FY 18-19 FY 18-19 6130/2019 INTERNAL SERVICE FUNDS: Motor Vehicle 1,658,781 3,080,973 500,000 3,777,920 0 1,461,834 Facilities Maintenance 0 4,943,040 0 4,943,040 0 0 Employee Retirement Benefit 0 17,642,179 0 17,642,179 0 0 Risk Management 4,133,147 14,997,479 0 14,650,385 0 4,480,241 Retiree Health Insurance 1,210,954 2,759,118 0 2,759,118 0 1,210,954 Energy 3,272,984 2,573,823 147,600 2,721,423 0 3,272,984 TOTAL CITY FUNDS 85,780,081 236,803,613 32,122,002 240,548,009 32,122,002 82,035,685 `Excludes Airport Funds Page 7 15 DEPARTMENT LINE ITEM CHANGES FY 2018-19 Adopted Requested Incl(Dec) Net Dept Dept Department Name Acct Account Name 2017.18 2018.19 2018-19 Inc](Dec) 1200 CITY ATTORNEY 42015 Communications 0 9,000 9,000 1200 CITY ATTORNEY 42100 Office Supplies 1,000 6,000 5,000 1200 CITY ATTORNEY 42490 Non Capital Equipment 900 4,500 3,600 1200 CITY ATTORNEY 42500 Travel &Training 0 5,000 5,000 1200 CITY ATTORNEY 43203 Contractual TEA 0 5,000 5,000 1200 CITY ATTORNEY 43240 Other Contractual(Legal) 75,500 175,500 100,000 127,600 1400 COMM ECO DEV 59505 Backfill for loss of Redevelopment funding 0 250,000 250,000 1400 COMM ECO DEV 59506 Desert Healthcare wrap-Around Service 0 100,000 100,000 350,000 3010 POLICE 42500 Travel&Training 145,000 200,000 55,000 55,000 3520 FIRE 42500 Travel&Training 35,000 45,000 10,000 10,000 2510 RECREATION 40800 Overtime 25,000 28,000 3,000 3,000 Total to add to General Fund if approved $545,600 PERSONNEL MODIFICATIONS Salary I Benefits Information Technology $50,000 Engineering 13,000 Paralegal I City Attorney Department 95,000 Library 62,000 Parks Maintenance 5,000 Demuth Recreation 53,000 Downtown Maintenance 72,000 Additional Amounts Included in Budget $350,000 GRAND TOTAL $895,600 3/29/2018;4:33 PM Page 8 16 Unfunded Capital Project Requests City of Palm Springs New Project Requests Title 2016-19 1 Bollards-Phase 2(Andreas/TahquitzJBaristo/Arenas) 900,000 2 Keyless Entry a Keyless Entry-Phase 1 (City Hall,Police Department, City Yard/Fleet) 475,000 b Keyless Entry-Phase 2(Fire Stations 1,2,3,5 and Animal Shelter) 475,000 3 Demuth ADA Access-Phase 2 1,250,000 4 Plaza Theater a Phase 1 -Design 500,000 b Phase 2-Construction 5,000,000 5 Holiday Lights 270,000 6 Emergency Generators City Facilities 1,500,000 7 Life Safety Upgrades-All City Facilities a Phase 1 -Design 100,000 b Phase 2-Construction 300,000 8 PD Impound Facility-Initial Project Conception 400,000 9 Park Restrooms Renovations/Repairs(Demuth,Victoria,Sunrise and Ruth Hardy) a Phase 1 -Design 100,000 b Phase 2-Construction 300,000 10 Caltrans 6-inch Wide Striping Standard(Major and Secondary Arterials,Collectors) a Phase 1 -Design 50,000 b Phase 2-Construction- 750,000 c Phase 3-Maintenance-Truck with Mounted Paint Striper 250,000 11 Boiler-Fire Station No.2 60,000 12 Animal Shelter Replacement and Upgrades a Phase 1 -Design 50,000 b Phase 2-Construction(Wall,Flooring,Kenai,Misters,Dog Run Electrical Service) 250,000 13 Chiller Replacement-City Yard 80,000 14 Cogeneration Plant Coils 120,000 15 Citywide Water Treatment Program(Public Health&Mechanical) 600,000 16 Upgrade Fire Sprinkler System-All City Facilities 1,500.000 17 Storm Drain Improvements-Line 3 San Rafael Dr. 5,500,000 18 Indian Canyon Two-Way Conversion-Roundabout 1,000,000 19 Traffic Calming:Speed Feedback Radar Signs 400,000 20 City-wide Sign Inventory Program 1205000 21 Fire-New EOC I Remodel of SSC Building Remodel on Airport Property 400,000 22 Fire Station#1 Remodel 6,5005000 23 Speed Survey Update:City-wide Speed Limits 110,000 24 IT:City Phone System 250,000 25 IT:City Wireless Network System 150,000 26 PD:Evidence Booking Management System 80,000 27 PD:Computer Servers&Storage 150,000 28 PD:Paperless Document Management System 250,000 29 PD:CAD/RMS System Used by Police&Fire(Cyrun) 2,000,000 30 Planning: Land Use Element/Housing Contract 400,000 31 Engineering:Circulation Element 200,000 32 Maintenance:Chiller Replacement-City Yard 74,000 33 Recreation:Replacement of Vehicle for Ballfield 25,000 34 Recreation:Replacement of Vehicle for Recreation/Vfest 55,000 35 Recreation:Replace Gymnasium Floor(JOJDHUC) 96,000 36 Recreation:Replacement of light fixtures on ballfields in order of need 1,089.150 37 Library:JC Frey Building Rehabilitation 100.000 38 Library:Main Library Rehabilitation 5,000.000 39 Fire-Security Gates/Fencing Stations#1 &#3 150,000 Sub-Total Funding Request $ 39,379,150 Active Projects - Needing Additional Funds 1 HVAC Replacements(City Facilities) 100,000 2 Palm Canyon Electrical Upgrades 400,000 3 CMAQ/CVAG Bicycle Lane Installation 75,000 Sub-Total Funding Request $ 575,000 Total Funding Request $ 39,954,150 Page 9 1 MEASURE J COMMISSION TOP FIVE UNFUNDED CAPITAL PROJECTS RECOMMENDATION LIST (CURRENT FUNDS AVAILABLE_$3,200,000) RECOMMENDATIONS 1 Park Restrooms Renovations/Repairs(Phase 1 and 2) 400,000 2 Bollards- Phase 2 900,000 3 Emergency Generators 1,500,000 4 Keyless Entry(Phase 1 and 2) 950,000 5 Caltrans Wide Striping(Phase 1, 2, and 3) 1,050,000 4,800,000 PROJECT DESCRIPTION Park Restrooms Renovations/Repairs(Demuth,Victoria, Sunrise and Ruth Hardy) (a)Phase 1 Design and(b)Phase 2 Construction- Upgrade:plumbing,electrical,ventilation including natural light features at City owned park restroom facilities,as applicable. The Design phase would be approximately$100,000.00 and the construction phase would be approximately$300,000.00 Bollards Phase 2(And reas/Tahquitz/Baristo/Arenas) Temporary plastic water-filled k-rails are being deployed every Thursday night to aid in separating vehicles and pedestrians during each Village Fest event.This project will replace the temporary barrier solution with permanent retractable security bollards to provide physical separation between vehicles and pedestrians and to protect public health and safety of all who attend Village Fest events.Phase 2 expands the locations of new security bollard installations. Emergency Generators City Facilities Procure and install back up emergency generators for the Animal Shelter,the Leisure Center,the Pavilion and the PS Public Library. Keyless Entry (a)Phase 1(City Hall,Police Department,City Yard/Fleet) The City's existing access control system(card reader)at the locations indicated above is more than 10 years old that comprise of a proprietary system hardware with limited capability for future expansion.This project will replace the access control system with a new non-proprietary system hardware expandable to other city facilities including the integration of intrusion detection and video surveillance. Phase 1 replaces the existing access control system. (b)Phase 2(Fire Stations 1,2,3,5 and Animal Shelter) These city facilities mentioned above do not have an existing access control system(card reader).This project will install a new non-proprietary access control system providing a single access control system used for all city facilities.Fire Station 4 is excluded from this project for the reason that the access control system will be installed as part of the remodel and expansion capital project improvements.Phase 2 installs new access control system. Caltrans 6-inch Wide Striping Standard(Major and Secondary Arterials,Collectors) The California Department of Transportation(Caltrans)is discontinuing the use of non-reflective raised pavement markers and increasing the width of all 4-inch wide longitudinal traffic lines to 6-inch wide lines which will benefit older drivers and increase visibility of lane line delineation. Local jurisdictions are encouraged to adopt Caltrans new striping standards. (a)Phase 1-Design Prepare the construction drawings for new 6-inch striping. (b)Phase 2-Construction Install new 6-inch striping standards. (c)Phase 3-Maintenance-Truck with Mounted Paint Striper Purchase a vehicle to refresh 6-inch striping standards. MEASURE J COMMISSION TOP FIVE UNFUNDED CAPITAL PROJECTS RECOMMENDATION LIST(AS OF 0311612018) Page 10 18 i0E P A LOAM'sp4 � a V W • a CITY COUNCIL STAFF REPORT c4�lFORN�P DATE: APRIL 4, 2018 NEW BUSINESS SUBJECT: PRELIMINARY OVERVIEW OF THE FISCAL YEAR 2018-19 BUDGET (REVISED) FROM: David H. Ready, City Manager BY: Department of Finance and Treasury SUMMARY Staff is presenting a preliminary Fiscal Year 2018-19 Budget to the City Council for an initial review. Included are estimates for revenues and expenditures, including personnel-related mandated cost adjustments (e.g. PERS retirement, health care, etc.) and projected increases in utilities, supplies, materials and contracts. Additionally, some department modifications are being considered to enhance service delivery in specific areas and will be outlined as we move through the budget process. The budget presentation will cover the General Fund, Enterprise Funds and Internal Service Funds. The Airport Fund will be presented on April 18th following a recommendation from the Airport Commission. At the request of the Council Budget Subcommittee (Councilmembers Kors and Middleton), a Budget Town Hall meeting is planned for Tuesday, April 24th at 6:00 P.M. The Measure J Commission will join City Council to discuss their recommendations on the Measure J Capital Budget during a meeting in May. Budget discussions will be placed on City Council Meeting Agendas at the meetings of April 18th, May 2"d and May 18th. The City Charter-mandated Budget Public Hearing, when City Council may adopt the new fiscal year budget will be scheduled for June 6, 2018. RECOMMENDATION: 1. Direct the City Council Budget Subcommittee and Staff as appropriate. STAFF ANALYSIS: Current Fiscal Year 2017-18: Endinq June 30, 2018 Mid-year, subsequent to the passage of "Measure D", City Council approved 13 positions including 6 Firefighter/Paramedics, 4 Police Officers, 2 Police Community Service Officers and an Accountant position, totaling $1,612,000. LNXCS. City Council Staff Report April 4, 2018—Page 2 Fiscal Year 2018-19 Budget Preliminary Overview Further, as we close the current fiscal year on June 30, 2018, the Finance Director is projecting a General Fund surplus of approximately $4 million which will be added to the PERS Future Pension Reserve created by City Council to address the anticipated significant pension increases over the next several years (discussed below). FY 2018-19 Overview This preliminary preview of the Fiscal Year 2018-19 budget represents the best estimates of the Finance Department for revenues and expenditures. It is a balanced budget—with an anticipated modest surplus of approximately $161,000. Importantly, it should be noted, a significant impact to an otherwise balanced budget is the upcoming June 5th election — relative to Measure C. This citizen group ballot initiative, if approved by the voters, would ban vacation rentals in single family residential neighborhoods (with the exception of condominiums) resulting in a projected loss of Hotel Transient Occupancy Tax (TOT) revenue of approximately $7 million beginning in Fiscal Year 2020-21. Although this would occur two fiscal years from now, any appreciable level of potential revenue loss requires taking immediate cost reduction measures to avoid a deficit situation. Revenues Total General Fund Revenues are projected at $125,442,000, which represents a 7% increase from the previous fiscal year. The new %-cent Measure D sales tax is estimated to generate $6.7 million in new revenue. The passage of Measure E, which expands the former Medical Cannabis Tax to include recreational cannabis and cultivation, is projected to add approximately $600,000. Increases are also anticipated in the top four revenue categories: • Transient Occupancy Tax - $850,000 • Property Taxes - $1,100,000 • Sales Taxes - $577,000 • Utilities Users' Taxes - $100,000 Staff will also be recommending all fees be increased by the Consumer Price Index (CPI) of 2.5%, as prescribed by the U.S. Department of Labor. Parks fees will be addressed separately with a recommendation from the Parks Commission at a subsequent City Council Meeting. Expenses Total General Fund Expenses and Transfers are projected at $125,280,000, which is an 11% increase from the previous fiscal year. City Council Staff Report April 4, 2018— Page 3 Fiscal Year 2018-19 Budget Preliminary Overview Employee Compensation In the area of employee compensation, budget line items have been adjusted for contractual obligations related to salaries and benefits, workers compensation, etc. However, all Bargaining Unit contracts expire June 30, 2018, and are currently being re- negotiated — any increases associated with new agreements are yet to be determined and will require an additional budget appropriation. Below is a summary of the current agreements' salary adjustments by unit: Bargaining Unit Compensation Actual for Actual for Actual for Actual for Budget FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Police— Regular +1% +0% +1% +1% TBD Police— Management +1% +0% +2% +1% TBD Fire— Regular +0% +2% +0% +1% TBD Fire— Management +0% +2% +0% +2% TBD General Unit +0% +2% +0% +2% TBD Management Association of PS +0% +2% +0% +2% TBD Executive / Non-Represented +0% +2% +0% +2% TBD Pension Costs - PERS Employee pension costs are the next largest expense category for the City. Employer rates for all public agencies are determined annually for the upcoming fiscal year by the State's CalPERS Board. Below is a summary of recent rate increases: Employer PERS Rate Increases Actual for Actual for Actual for Actual for Actual for By Group FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Police & Fire (Safety) +4.555% +2.846% +4.728% +3.214% +3.876% Non-Safety (Miscellaneous) +2.574% +2.262% +1.628% +1.182% +2.877% Beginning in FY 2018-19, PERS costs will begin increasing at a higher rate as new investment earnings assumptions, known as `the discount rate' (or PERS anticipated 20-year average rate of return on investments) are being implemented state-wide, resulting in several years of higher required employer contributions. Additionally, PERS is changing the amortization term on unfunded liabilities from 30 years to 20 years, which will affect required contributions beginning in FY 2021-22. The following graph illustrates the most recent update to the CalPERS projections. Even without the included change to the amortization term on unfunded liabilities, which occurs in FY 2021-22, annual required contributions will almost double over a six-year period: City Council Staff Report April 4, 2018— Page 4 Fiscal Year 2018-19 Budget Preliminary Overview Total PERS Costs 16-17 17-18 18-19 19-20 20-21 21-22 22-23 BEFORE Change Discount Rate @ 7.5% $13.5 $15.1 $16.2 $18.2 $19.5 $20.8 $21.9 Total PERS Costs AFTER Change $13.5 $15.1 $16.8 $19.3 $21.6 $23.9 $25.8 New Discount Rate 7.38% 7.25% 7.0% 7.0% 7.0% Amortization term on Unfunded Liabilities changed from 30-years to 20-years $?? $?? -- Unknown additional $$$ required starting FY 21-22 Last year as part of the current fiscal year budget process and in response to these anticipated PERS increases, the City Council created a special reserve account, setting aside funds for future years' cost increases. Currently, $3.25 million is set aside in this account, and the Budget Subcommittee is recommending adding $6.5 million ($4 million carryover from the current fiscal year budget surplus and $1.5 million appropriated in the new budget, and another $1 million in the Airport Fund) for a total of$9.75 million. Department Budget Modifications Several Department budgets have increased to accommodate additional spending requirements and various personnel position modifications. An itemized list of these requests can be found on page 8 of the Preliminary Budget document. For example, an additional $250,000 is required from the General Fund to backfill the lost Redevelopment Agency (RDA) administration funds for economic development that terminate this fiscal year per the state RDA dissolution process. Also, the Community and Economic Development Department has added $100,000 to match the Desert Healthcare District's homelessness wrap-around services grant. Other Budget Increases Utility rate increases for water and electricity are anticipated to increase an additional $400,000; including $146,000 for fleet and facilities costs; $200,000 for debt service costs; and $37,000 for the animal shelter agreement contractual CPI. City Council Staff Report April 4, 2018—Page 5 Fiscal Year 2018-19 Budget Preliminary Overview With regard to liability and property insurance, an additional $300,000 for anticipated coverage increases has been added to the proposed budget. However, formal insurance costs will not be available until May pending a final report from our insurance broker. Sponsorships/Grants A revised and simplified application process was implemented for organizations seeking to request City grants and sponsorships funding. The applications were made available in early March and responses are due April 9th. In the current budget, $417,500 was appropriated for these requests — and an additional $130,250 was approved as "in-kind" contributions of departmental services, such as waiving City use of facility fees and staff overtime. Staff has included this same amount as a budget placeholder pending further City Council direction. Capital Improvements Given the City's extensive capital improvement needs, $4.5 million has been included in the proposed budget including $3 million for facilities maintenance and repairs, $1 million for street resurfacing (augmenting Measure J funding), and $500,000 for vehicle replacement. Additionally, the Budget Sub-Committee is recommending transferring an additional $1.5 million from General Fund reserves to the Capital Fund for major projects, including continued Fire Station renovations, Indian Canyon Two-Way project, the new Downtown Park, Library improvements, etc. This would create a $6 million capital improvement budget in the new fiscal year. Also, the Measure J Commission has made a recommendation regarding $3.2 million available in the Measure J Fund for capital projects in the new fiscal year (see page 10 of the Preliminary Budget document). The Commission will join City Council at the April 18th Council meeting to review their recommendations. Reserves The new fiscal year budget recommendation provides for a General Fund reserve balance of $18,718,000, which represents 16.35% of annual operations. Although a reduction from the previous fiscal year, this is still within the generally accepted reserve range of 10%-20%. Next Steps April 18" Airport Budget April 24" Town Hall Budget Meeting May 2"d Capital Budget Discussion with Measure J Commission May 16th Continued Budget Discussion June 6th Budget Public Hearing June 20th Deadline for budget approval City Council Staff Report April 4, 2018— Page 6 Fiscal Year 2018-19 Budget Preliminary Overview The Budget Public Hearing scheduled for June 6th is required by City Charter. City Council may approve the FY 2018-19 Budget after the Public Hearing or may continue the item for approval on June 20th. David H. Ready, Esq., P . Geoffrey S. Kiehl City Manager Director of Finance and Treasurer Attachments: Preliminary Budget FY 2018-19 Preliminary Budget April 4 , 2018 City of Palm Springs 4/4/2018 City of Palm Springs 2018-2019 Budget 1 Budget Overview General Fund ($ 128 . 3 M ) - General Purpose All Other Funds ($ 116 . 6 M ) - Restricted Enterprise Funds (Airport, Wastewater, Golf) (Note: Airport to be presented at 4/18 Council ) Internal Service Funds (Motor Vehicles , Facilities , Employee Retirement & Health , Energy, Risk Management) Debt Service , Special Revenues, Capital and Measure J Successor to Redevelopment / Housing 4/4/2018 City of Palm Springs 2018-2019 Budget 2 2018=2019 Preliminary Budget Projected Preliminary 2017-2018 2018-2019 Revenues $116,970,862 $125,441 ,854 Expenditures (112,962,182) (12592803457) Surplus / (Deficit) $4,008,680 $161 ,397 Additional Transfer to PERS Reserve * ($4,000,000) ($1 ,500,000) Additional Capital - Other Projects ($1 ,5001000) 17-18 Unrestricted Beginning Balance $2135489391 Projected Unrestricted Ending Balance $21 ,557,071 $189718,468 Reserve as a % 20.82% 16.35% * Total PERS Reserve Set-Aside for FY 2018-19 is $6.5 million which includes $1 million in the Airport Fund. 4/4/2018 City of Palm Springs 2018-2019 Budget 3 Major New Additions for 2018=2019 • Capital - Facilities $3,000,000 • Capital - Vehicles 5003000 • Capital - Street Repairs 15000,000 • Capital - Other Projects 15500,000 • Departmental Reorganizations and Position Additions 3507000 • Departmental Budget Requests 545,000 Total Additional Items $6,8959000 4/4/2018 City of Palm Springs 2018-2019 Budget 4 Major Revenue Categories $0.9 1p ■ TOT $2.4� $15.5 ■ Sales Tax $3.1 M-J Sales Tax $4.7 $33.5 ■ M-D Sales Tax Property Taxes $7.1 Utility Users Tax Motor Vehicle Tax $13.6 Franchise Fees $24.2 Cannabis Tax & Fees $13, All Other Revenue Interfund Transfers In (in Millions) 4/4/2018 City of Palm Springs 2018-2019 Budget 5 Revenue Increases for FY 2018=2019 Estimated Revenue Increases: • Sales Tax (Measure D +1 /2%) $6,7001000 • Cannabis Tax Expansion (Measure E) 6009000 • TOT / Hotel Tax 8509000 • Property Taxes 19100,000 • Sales Tax (excludes Measure J) 5777000 • Utility Users Tax 100,000 4/4/2018 City of Palm Springs 2018-2019 Budget 6 Major Expenditure Activities ■ Administration $7.8 ■ Growth Management $20.8 $13.8 Quality of Life $8.6 $9 ■ Public Safety $2.4 Public Works & Engineering $6.9 $10.3 Marketing & Tourism Contractual Obligations Measure J Projects Interfund Transfers Out (in Millions) 4/4/2018 City of Palm Springs 2018-2019 Budget 7 Employee Related Expense Increases for FY 2018=2019 Employee Related Expense Increases: • CaIPERS Rate Increases ($154585457) • Employee Health Benefits (115,035) • Retiree Health Benefits (2505000) • Workers' Comp (+5% estimate) (1505000) • Police/Fire Mid-Year Personnel Adds (176115800) • Bargaining Unit Contracts TBD 4/4/2018 City of Palm Springs 2018-2019 Budget 8 Non =Employee Related Expense Increases for FY 2018=2019 Other Significant Expense Increases: • Animal Shelter Contract ($375642) • Electricity and Water Rate Increases (4005000) • Facilities & Fleet (w/o vehicle repl't) (250,000) • Land Lease Payment (200,000) • Property & Liability Insurance (3003000) • Departmental Increases (545,000) • Mid-Year Contractual Increases (2089600) 4/4/2018 City of Palm Springs 2018-2019 Budget 9 Looking Ahead : Future CaIPERS & OPEB Costs 16-17 17-18 18-19 19-20 20-21 21 -22 22-23 Total PERS Costs BEFORE Change Discount Rate @ 7.5% $13.5 $15.1 $16.2 $18.2 $19.5 $20.8 $21 .9 Total PERS Costs AFTER Change $13.5 $15.1 $16.8 $19.3 $21 .6 $23.9 $25.8 New Discount Rate 7.38% 7.25% 7.0% 7.0% 7.0% Amortization term on Unfunded Liabilities I I changed from 30-years to 20-years $?? I $?? -- Unknown additional $$$ required starting FY 21 -22 Retiree Health Insurance (OPEB) $2.6 $2.7 $3.0 $3.2 $3.5 $3.7 $3.9 4/4/2018 City of Palm Springs 2018-2019 Budget 10 Budget Calendar Next Steps April 18 Public Hearing on Fee Increases April 18 Airport Budget April 24 Town Hall Budget Meeting May 2 Capital Budget Discussion with Measure J Commission May 16 Continued Budget Discussion June 6 Public Hearing and Adoption June 20 Final Meeting to Adopt Budget 4/4/2018 City of Palm Springs 2018-2019 Budget 11 PRELIMINARY BUDGET FY 2018- 19 ppPLMg a� p'Pi ti u N ti + Cor•ourt•`o� C �P 4�IFO0.N REVISED City Council Meeting - April 4, 2018 City of Palm Springs Table of Contents Budget Calendar FY 2018-19 Page 1 General Fund Proposed Budget Summary for 2017-18 1 2018-19 Page 2 Recommended Budget Summary Operating Fund Page 3 General Fund Revenues Page 4 General Fund Expenses Page 5 General Fund Summary Page 6 & 7 Department Line Item Requests FY 18-19 Page 8 New Unfunded Capital Project Requests FY 18-19 Page 9 Measure J Commission Top Five Unfunded Capital FY 18-19 Page 10 City of Palm Springs 41412018; 12:55 PM FY 2018-2019 BUDGET CALENDAR April 4, 2018 Preliminary Budget April 12, 2018 Special Events and Contributions Applications Due to City Clerk's Office April 18, 2018 Public Hearing on Building, Engineering and Planning Fee Increases on Comprehensive Fee Schedule for July 1st April 18, 2018 Airport Budget April 24, 2018 Town Hall Budget Meeting May 2, 2018 Capital Budget Discussion with Measure J Commission May 16, 2018 Continued Budget Discussion June 6, 2018 Public Hearing and Adoption of Budget for FY 2018-19 June 20, 2018 Final Meeting to Adopt Budget � EpALMgp4 iy '` c V N F f "afAK� r4�lFORN% Page 1 General Fund Proposed Budget Summary 2017-2018 and 2018-2019 Fiscal Years City of Palm Springs Includes the Following: • Capital - Facilities $3,0009000 • Capital - Vehicles 500,000 • Capital - Street Repairs 1,000,000 • Capital - Other Projects 1,500,000 • Departmental Reorganizations and Position Additions 350,000 • Departmental Budget Requests 5457000 Total Additional Items $6,895,000 Projected Preliminary 2017-2018 2018-2019 Revenues $11659709862 $125,4419854 Expenditures (112,962,182) (1252280,457) Surplus / (Deficit) $4,008,680 $161,397 Additional Transfer to PERS Reserve * ($4,0001000) ($1,500,000) Additional Capital - Other Projects ($19500,000) 17-18 Unrestricted Beginning Balance $211548,391 Projected Unrestricted Ending Balance $219557,071 $189718,468 Reserve as a % 20.82% 16.35% * Total PERS Reserve Set-Aside for FY 2018-19 is $6.5 million which includes $1 million in the Airport Fund. 4/4/2018;uss AM Page 2 BUDGET OVERVIEW GENERAL FUND PRELIMINARY FY 2018-19 BUDGET SUMMARY FUNDS AVAILABLE Revenue Property Tax 24,150,000 TOT 33,540,000 Sales Tax 13,585.000 Measure J Sales Tax 13,800,000 Cannabis Tax/ Fees 2,350,000 Utility Users Tax 7,100,000 Franchise Fees 3,100,000 Motor Vehicle License Fees 4,700,000 Administrative Service Charges 2,230,934 Business License 1,000,000 Building Permits 1,410,000 All Other 17,588,420 Total Revenue 124,554,354 Transfers In From: Gas Tax(133) 600,000 Airport General Operations (415) 287,500 Total Transfer In 887,500 Total Operating Funds Available 125,441,854 FUNDS REQUIRED Appropriations 105,135,055 Transfer Out To: Debt Service (301) - Police Building and Others 136,551 Chevron /Opterra 1,094,850 Parking Structure 569,900 Total Transfers for Debt 1,801,301 Public Safety- CFD (140) 100,000 Parking Fund -Operations (131) 40,000 Master Lease (139) 381,000 Emergency Response Fund (136) 10,000 Capital Projects (261) 5,500,000 Capital Projects - Measure J (260) 13,800,000 Golf Course (430) 1,013,101 Motor Vehicle (510) 500,000 Total Transfer Out 23,145,402 Total Operating Funds Required 128,280,457 Estimated Reserve 18,718,468 Reserve as a % 16.35% Page 3 BUDGET OVERVIEW GENERAL FUND REVENUES FY 2018-19 MAJOR GENERAL FUND REVENUES The following graph and schedule identify the major sources of revenue for the 2018-19 adopted General Fund budget. 2018-19 Revenues as a Percent of Total 12% 19% 4% ° ■Property Taxes 3% ■Sales&Use Taxes ■Transient Occupancy Tax(TOT) 6% 11% Measure J Sales Tax ■Measure D Sales Tax ■Utility Users Tax m Franchise Fees 5% ■Motor Vehicle In Lieu Tax Cannabis Tax&Fees ■All Other Sources 11% 27% MAJOR GENERAL FUND REVENUES ADOPTED ADOPTED PRELIMINARY % CATEGORY 2016-17 2017-18 2018-19 CHANGE Property Taxes 20,892,100 22,550,000 24,150,000 7.1% Sales & Use Taxes 12,040,686 12,375,517 13,585,000 9.8% Transient Occupancy Tax (TOT) 26,200,000 29,660,000 33,540,000 13.1% Measure J Sales Tax 13,100,000 13,400,000 13,800,000 3.0% Measure D Sales Tax 0 1,675,000 6,700,000 300.0% Utility Users Tax 7,500,000 7,200,000 7,100,000 -1.4% Franchise Fees 3,100,000 3,200,000 3,100,000 -3.1% Motor Vehicle In Lieu Tax 4,219,000 4,200,000 4,700,000 11.9% Cannabis Tax & Fees 1,450,000 1,500,000 2,350,000 56.7% All Other Sources 13,246,139 15,645,318 15,529,354 -0.7% TOTALS $ 101,747,925 $ 111,405,835 $ 124,554,354 11.8% Page 4 BUDGET OVERVIEW GENERAL FUND EXPENSES FY 2018-19 GENERAL FUND EXPENSES The following graph and schedule identify the major expenses for the FY 2018-19 adopted General Fund budget. 2018-19 Expenses as a Percent of Total s% 2% ,,,, a;at7ss 21% o 7% ■Administration ■Growth Management ■Quality of Life 9% ■Public Safety ■Public Works&Engineering ■Marketing&Tourism Contractual Obligations" 10% 43% MAJOR GENERAL FUND EXPENSES BY CATEGORY ADOPTED ADOPTED PRELIMINARY % CATEGORY 2016-17 2017-18 2018-19 CHANGE Administration 12,026,080 14,228,358 22,299,614 56.7% Growth Management 6,529,848 7,961,915 9,269,998 16.4% Quality of Life 9,613,414 10,332,315 10,284,496 -0.5% Public Safety 41,133,721 42,743,594 45,284,107 5.9% Public Works & Engineering 6,708,601 6,707,536 6,914,932 3.1% Marketing & Tourism 2,436,500 2,436,500 2,436,500 0.0% Contractual Obligations" 8,446,370 8,646,370 8,645,407 0.0% TOTALS $ 86,894,534 $ 93,056,588 $ 105,135,055 13.0% ** Debt Service included in Convention Center (2180) Page 5 CITY OF PALM SPRINGS FY 2018-19 BUDGET Combined Changes in Estimated Cash Estimated Adopted Adopted Preliminary Adopted Estimated Cash Reserve Revenues Transfer-in Expenses Transfer-Out Cash Reserve Fund Description 71112018 FY 18-19 FY 18-19 FY 18-19 FY 18-19 6/30/2019 CITY FUNDS: General Fund 21,557,071 124,554,354 887,500 105,135,055 23,145,402 18,718,468 SPECIAL REVENUE FUNDS: Small Hotel TBID 0 325,000 0 325,000 0 0 Forfeited Assets 0 2,000 0 2,000 0 0 Safety Augmentation 654,922 910,352 0 918,639 0 646,635 Special Development Fund 0 0 0 0 0 0 CSA 152 2,000 566,275 0 556,033 0 12,242 Recycling 826,704 120,000 500,000 198,607 0 1,248,097 PS Villagefest &4,548 508,855 0 510,590 0 82,813 Neighborhood Involvement 50 0 0 0 0 50 Business Improvement District 0 0 0 0 0 0 Energy Efficient Loan Program 500,000 0 0 0 500,000 0 Parking 305,130 220,000 40,000 382,382 0 182,748 Parking Capital Programs 495,769 2,000 0 2,005 0 495,764 Community Block Grant 0 387,834 0 387,834 0 0 Sustainability 5,000 247,207 0 79,164 147.600 25,443 CFD Public Safety#1 5,000 601,429 100,000 706,429 0 0 Land/Light/Park Maintenance 0 356,941 0 356,941 0 0 Air Quality Management 108,610 57,600 0 57,600 0 108,610 Public Arts 425,765 191,000 0 257,457 0 359,308 Library Endowment 0 8,600 0 8,600 0 0 Special Projects 0 200,000 0 200,000 0 0 Special Grants 0 175,000 0 175,000 0 0 Housing Successor Admin 2,470,140 7,500 0 241,585 0 2,236,055 CAPITAL PROJECT FUNDS: Special Gas Tax Improvements 0 1,343,765 0 743,765 600,000 0 Measure A Improvements 0 2,054,000 0 2,054,000 0 0 Measure J Capital 335,912 0 13,800,000 10,507,287 3,200,000 428,625 Drainage 1,453,953 136,500 0 136,500 0 1,453,953 Emergency Response Fund 848,497 1,406,346 10,000 1,525.269 0 739,574 Quimby Park& Recreation 277,500 189,400 0 189,400 0 277,500 Capital Projects 0 86,500 5,500,000 86,500 0 5,500,000 DEBT SERVICE FUNDS: Master Lease 161,086 1,312,700 381,000 1,593,700 0 261,086 Debt Service 129,923 4,692,229 5,001,301 9,693,530 0 129,923 Assessment District 763,532 595,863 0 595,863 0 763,532 'ENTERPRISE FUNDS: Waste Water Treatment 13,578,182 10,280,617 0 10,281,731 0 13,577,068 Golf Course 0 4,395,000 1,013,101 5,408,101 0 0 Page 6 CITY OF PALM SPRINGS FY 2018-19 BUDGET Combined Changes in Estimated Cash Estimated Adopted Adopted Preliminary Adopted Estimated Cash Reserve Revenues Transfer-In Expenses Transfer-Out Cash Reserve Fund Description 71112018 FY 18-19 FY 18-19 FY 18-19 FY 18-19 6/30/2019 INTERNAL SERVICE FUNDS: Motor Vehicle 1,658,781 3,080,973 500,000 3,777,920 0 1,461,834 Facilities Maintenance 0 4,943,040 0 4,943,040 0 0 Employee Retirement Benefit 0 17,642,179 0 17,642,179 0 0 Risk Management 4,133,147 14,997,479 0 14,650,385 0 4,480,241 Retiree Health Insurance 1,210,954 2,759,118 0 2,759,118 0 1,210,954 Energy 3,272,984 2,573,823 147,600 2,721,423 0 3,272,984 TOTAL CITY FUNDS 85,780,081 236,803,613 30,622,002 242,048,009 30,622,002 80,535,685 *Excludes Airport Funds Page 7 DEPARTMENT LINE ITEM CHANGES FY 2018-19 Adopted Requested Inci(Dec) Net Dept Deft Department Name Acct Account Name 2017.18 2018-19 2018.19 Incl Dec 1200 CITY ATTORNEY 42015 Communications 0 9,000 9,000 1200 CITY ATTORNEY 42100 Office Supplies 1,000 6,000 5,000 1200 CITY ATTORNEY 42490 Non Capital Equipment 900 4,500 3,600 1200 CITY ATTORNEY 42500 Travel&Training 0 5,000 5,000 1200 CITY ATTORNEY 43203 Contractual TEA 0 5,000 5,000 1200 CITY ATTORNEY 43240 Other Contractual(Legal) 75,500 175,500 100,000 127,600 1400 COMM ECO DEV 59505 Backfill for loss of Redevelopment funding 0 250,000 250,000 1400 COMM ECO DEV 59506 Desert Healthcare Wrap-Around Service 0 100,000 100,000 350,000 3010 POLICE 42500 Travel&Training 145,000 200,000 55,000 55,000 3520 FIRE 42500 Travel&Training 35,000 45,000 10,000 10,000 2510 RECREATION 40800 Overtime 25,000 28,000 3,000 3,000 Total to add to General Fund if approved $545,600 PERSONNEL MODIFICATIONS Salary I Benefits Information Technology $50,000 Engineering 13,000 Paralegal I City Attorney Department 95,000 Library 62,000 Parks Maintenance 5,000 Demuth Recreation 53,000 Downtown Maintenance 72,000 Additional Amounts Included in Budget $350,000 GRAND TOTAL $895,600 41412018; 12:55 PIN Page 8 Unfunded Capital Project Requests City of Palm Springs New Project Requests Title 2018-19 1 Bollards-Phase 2(Andreas/Tahquitz/Baristo/Arenas) 900,000 2 Keyless Entry a Keyless Entry-Phase 1 (City Hall,Police Department,City Yard/Fleet) 475,000 b Keyless Entry-Phase 2(Fire Stations 1,2,3,5 and Animal Shelter) 475,000 3 Demuth ADA Access-Phase 2 1,250,000 4 Plaza Theater a Phase 1 -Design 500,000 b Phase 2-Construction 5,000,000 5 Holiday Lights 270,000 6 Emergency Generators City Facilities 1,500,000 7 Life Safety Upgrades-All City Facilities a Phase 1-Design 100,000 b Phase 2-Construction 300,000 8 PD Impound Facility-Initial Project Conception 400,000 9 Park Restrooms Renovations/Repairs(Demuth,Victoria,Sunrise and Ruth Hardy) a Phase 1 -Design 100,000 b Phase 2-Construction 300,000 10 Caltrans 6-inch Wide Striping Standard(Major and Secondary Arterials,Collectors) a Phase 1 -Design 50,000 b Phase 2-Construction- 750,000 c Phase 3-Maintenance-Truck with Mounted Paint Striper 250,000 11 Boiler-Fire Station No.2 60,000 12 Animal Shelter Replacement and Upgrades a Phase 1 -Design 50,000 b Phase 2-Construction(Wall,Flooring,Kenai,Misters,Dog Run Electrical Service) 250,000 13 Chiller Replacement-City Yard 80,000 14 Cogeneration Plant Coils 120,000 15 Citywide Water Treatment Program(Public Health&Mechanical) 600,000 16 Upgrade Fire Sprinkler System-All City Facilities 1,500,000 17 Storm Drain Improvements-Line 3 San Rafael Dr. 5,500,000 18 Indian Canyon Two-Way Conversion-Roundabout 1,000,000 19 Traffic Calming:Speed Feedback Radar Signs 400,000 20 City-wide Sign Inventory Program 120,000 21 Fire-New EOC/Remodel of SSC Building Remodel on Airport Property 400,000 22 Fire Station#1 Remodel 61500,000 23 Speed Survey Update:City-wide Speed Limits 110,000 24 IT:City Phone System 250,000 25 IT:City Wireless Network System 150,000 26 PD:Evidence Booking Management System 80,000 27 PD:Computer Servers&Storage 150,000 28 PD:Paperless Document Management System 250,000 29 PD:CAD/RMS System Used by Police&Fire(Cyrun) 2,000,000 30 Planning:Land Use Element/Housing Contract 400,000 31 Engineering:Circulation Element 200,000 32 Maintenance:Chiller Replacement-CityYard 74,000 33 Recreation:Replacement of Vehicle for Ballfield 25,000 34 Recreation:Replacement of Vehicle for Recreation(Vfest 65,000 35 Recreation:Replace Gymnasium Floor(JOJDHUC) 96,000 36 Recreation:Replacement of light fixtures on ballfields in order of need 1,089,150 37 Library:JC Frey Building Rehabilitation 100,000 38 Library:Main Library Rehabilitation 5,000,000 39 Fire-Security Gates/Fencing Stations#1&#3 150,000 Sub-Total Funding Request $ 39,379,150 Active Projects - Needing Additional Funds 1 HVAC Replacements(City Facilities) 100,000 2 Palm Canyon Electrical Upgrades 400,000 3 CMAQlCVAG Bicycle Lane Installation 753000 Sub-Total Funding Request $ 575,000 Total Funding Request $ 39,954,150 Page 9 MEASURE J COMMISSION TOP FIVE UNFUNDED CAPITAL PROJECTS RECOMMENDATION LIST (CURRENT FUNDS AVAILABLE _$3,200,000) RECOMMENDATIONS 1 Park Restrooms Renovations/ Repairs(Phase 1 and 2) 400,000 2 Bollards- Phase 2 900,000 3 Emergency Generators 1,500,000 4 Keyless Entry(Phase 1 and 2) 950,000 5 Caltrans Wide Striping(Phase 1, 2, and 3) 1,050,000 4,800,000 PROJECT DESCRIPTION Park Restrooms Renovations/Repairs(Demuth,Victoria,Sunrise and Ruth Hardy) (a)Phase 1 Design and(b)Phase 2 Construction- Upgrade:plumbing,electrical,ventilation including natural light features at City owned park restroom facilities,as applicable. The Design phase would be approximately$100,000.00 and the construction phase would be approximately$300,000.00 Bollards Phase 2(Andreas/Tahquitz/Baristo/Arenas) Temporary plastic water-filled k-rails are being deployed every Thursday night to aid in separating vehicles and pedestrians during each Village Fest event.This project will replace the temporary barrier solution with permanent retractable security bollards to provide physical separation between vehicles and pedestrians and to protect public health and safety of all who attend Village Fest events.Phase 2 expands the locations of new security bollard installations. Emergency Generators City Facilities Procure and install back up emergency generators for the Animal Shelter,the Leisure Center,the Pavilion and the PS Public Library. Keyless Entry (a)Phase 1(City Hall,Police Department,City Yard/Fleet) The City's existing access control system(card reader)at the locations indicated above is more than 10 years old that comprise of a proprietary system hardware with limited capability for future expansion.This project will replace the access control system with a new non-proprietary system hardware expandable to other city facilities including the integration of intrusion detection and video surveillance. Phase 1 replaces the existing access control system. (b)Phase 2(Fire Stations 1,2,3,S and Animal Shelter) These city facilities mentioned above do not have an existing access control system(card reader).This project will install a new non-proprietary access control system providing a single access control system used for all city facilities.Fire Station 4 is excluded from this project for the reason that the access control system will be installed as part of the remodel and expansion capital project improvements.Phase 2 installs new access control system. Caltrans 6-inch Wide Striping Standard(Major and Secondary Arterials,Collectors) The California Department of Transportation(Caltrans)is discontinuing the use of non-reflective raised pavement markers and increasing the width of all 4-inch wide longitudinal traffic lines to 6-inch wide lines which will benefit older drivers and increase visibility of lane line delineation.Local jurisdictions are encouraged to adopt Caltrans new striping standards. (a) Phase 1-Design Prepare the construction drawings for new 6-inch striping. (b)Phase 2-Construction Install new 6-inch striping standards. (c)Phase 3-Maintenance-Truck with Mounted Paint Striper Purchase a vehicle to refresh 6-inch striping standards. MEASUREJ COMMISSION TOPFIVE UNFUNDED CAPITAL PROJECTS RECOMMENDATION LISTIASOF 03/10018) Page 10