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Home My WebLink About3/2/2016 - STAFF REPORTS - 5.C. �Ot F P L M SpP iy c V N CITY COUNCIL STAFF REPORT c4�f FO Ra�P DATE: MARCH 2, 2016 NEW BUSINESS SUBJECT: PRELIMINARY OVERVIEW OF THE FISCAL YEAR 2016-17 GENERAL FUND BUDGET FROM: David H. Ready, City Manager BY: Department of Finance and Treasury SUMMARY The City Manager is presenting a preliminary Fiscal Year 2016-17 General Fund Budget to . the City Council for its first review. Included are initial estimates for revenues/expenditures of a basic 'carry over" budget, with the exception of included personnel-related mandated cost adjustments (e.g. PERS retirement, health care, etc.) and projected increases in supplies, materials and contracts. Staff will be presenting a full budget at the City Council Meeting of April 20, 2016, including recommended new personnel positions and capital expenditures. Additionally, the Council Finance and Budget Subcommittee (Mayor Moon/Councilmember Kors) will be holding "town half' type meetings to receive public input on the budget in April — and the full City Council will be discussing budget recommendations in May. Adoption of the new budget will take place at a Public Hearing scheduled for June 1, 2016. RECOMMENDATION: Direct the City Council Finance and Budget Subcommittee and City Staff as appropriate. STAFF ANALYSIS: A preview of the Fiscal Year 2016-17 General Fund budget is presented to City Council as a preliminary overview. The information being presented represents the best estimates of the Finance Department for the revenues and expenditures based upon a "roll-over" budget, including personnel-related cost adjustments and projected increases in supplies, materials and contracts—at a time when only 49% of the current fiscal year revenue has been collected. ITEM NO. r_ L_ City Council Staff Report March 2, 2016— Page 2 Fiscal Year 2016-17 Budget Current Year (FY 2015-16) Overview For the current fiscal year, the Finance Director is projecting a General Fund surplus of $557,388 and a projected cash balance of $15,542,992, which as discussed on February 17, 2016, at mid-year budget review, results in a General Fund Reserve Equivalency of 18%. FY 2016-17 Revenue Overview Total General Fund Revenue is projected at $102,524,097, which is a 3.76% increase from the previous fiscal year. However, a decrease in projected sales tax revenue is included due to a $1.3 million one-time payment in sales taxes received from the State in the current Fiscal Year, as a State repayment to the City of the "borrowed triple flip" revenue during the State's budget crisis several years ago. An increase of revenue from "All Other Sources' is based on fully realizing all Development Services fee increases approved by the City Council last year. FY 2016-17 Expenditure Overview Total General Fund Expenses and Transfers is projected at $102,219,225, which is a 4.04% increase from the previous fiscal year, including $2.7 million for the following Capital Projects: Fire Station No. 4 Renovation $ 700,000 Street Repairs $ 1,000,000 Miscellaneous Capital $ 1,000,000 The $700,000 for Fire Station No. 4 is to supplement the existing $600,000 in the current budget reserved for the complete renovation of the station which is currently underway. Staff is recommending $1,000,000 to continue the City Council priority of street repairs. Additionally, $1,000,000 is recommended for an unallocated capital projects account to address several facilities maintenance projects. FY 2016-17 Surplus/Reserves Overview The Finance Director is projecting a preliminary surplus of $304,872 resulting in a projected fund balance of 15,847,864, and a General Fund Reserve of 18%. Next Steps This introductory overview includes only the General Fund. Details of the General Fund Budget (including additional personnel requests), as well as the various Enterprise 02 City Council Staff Report March 2, 2016— Page 3 Fiscal Year 2016-17 Budget Funds, Internal Service Funds, and other funds, will be presented at the City Council Meeting of April 20, 2016. The City Council Finance and Budget Subcommittee (Mayor Moon/Councilmember Kors) is proposing to host two Town Hall meetings to accept public comment and further study the budget in greater detail, in order to make recommendations to the City Council. The proposed meetings are scheduled for April 11 and April 12, 2016, from 6:00 to 8:00 p.m. in the Council Chamber at City Hall. The full City Council will conduct a Budget Study Session on Wednesday, May 11, 2016, in addition to the budget remaining on the regular meeting agendas for May 4 and May 18, 2016. At the direction of City Council, Staff has developed an application process for special event sponsorships and program funding. Each organization and/or agency will be required to complete an application to be eligible for such — regardless of whether they have received prior funding. This application and notice will be advertised and available this week. As required by City Charter, Staff is scheduling the public hearing on the budget for June 1, 2016. At the conclusion of the public hearing, the City Council may adopt the budget or request additional information from Staff for adoption of the budget at the June 15, 2016, City Council meeting. mes Thompson David H. Ready, Esq., P . Chief of Staff/City Clerk City Manager Attachments: General Fund FY 2016-17 Budget Overview 03 BUDGET PREVIEW GENERALFUND FY 2016-2017 O�pALM sp9 iy ti Q M1e .P ♦C °♦roen�` p. q4/FOILN� March 2, 2016 04 City of Palm Springs Table of Contents Operating Funds CashBalances................................................................................. Page 1 Revenue..........................................................................................Page 2 Expenditures................................................................................... Page 3 BUDGET CALENDAR April 11 & 12, 2016 Budget Town Hall Meetings April 20, 2016 All Funds Preliminary Budget May 4, 2016 Continued Budget Discussion May 11, 2016 Budget Study Session May 18, 2016 Continued Budget Discussion June 1, 2016 Public Hearing 2/25/2016 4:57 PM 0 5 CASH BALANCES GENERAL OPERATING FUND AVAILABLE CASH BALANCE, 7101/15 $14,985,654 FISCAL YEAR 2015-2016 Projections Revenue&Transfers-In $98,806,250 Expenditures &Transfers-Out (98,248,912) Projected 2015.2016 Surplus/(Deficit) $557,338 Projected Available Cash Balance, 6130/2016 $15,542,992 FISCAL YEAR 2016-2017 Projections Revenue&Transfers-In $102,524,097 Expenditures &Transfers-Out (102,219,225) Preliminary 2016.2017 Surplus/(Deficit) $304,872 Projected Available Cash Balance, 6/3012017 $15,847,864 General Fund Reserve Equivalency 98% Short-Term Loan Repayment from Measure J Fund: Police Department Remodel Loan $1,000,000 Adjusted Projected Available Cash Balance, 6130/2017 $16,847,864 Adjusted General Fund Reserve Equivalency 19% City of Palm Springs Page 1 06 MAJOR REVENUE FUNDS FY 15-16 FY 16-17 %Change CATEGORY Projected Prelimina FY 16-17 Property Taxes 18,895,000 19,937,098 5.52% Transient Occupancy 25,750,000 26,450,000 2.72% Sales and Use Taxes 12,409,733 11,948,077 -3.72% Utility Users Tax 7,250,000 7,500,000 3.45% Franchise Fees 3.000,000 3,000,000 0.00% Vehicle In-Lieu Fees 4,190,282 4,200,000 0.23% Medical Cannabis 1.200.000 1,300,000 8.33% Administrative Charges 1,949,796 2,126,798 9,08% Business Licenses 900,000 900,000 0.00% Building Permits 1,100,000 1,100,000 0.00% CRA Residuals(One-Time) 2,049,295 2,548,456 NIA All Other Sources 8,473,939 10,074,624 18.89% Subtotal 87,168,045 91,085,053 4.49% Transfers In 887,500 887,500 0.00% Measure J Transfers In 12,800,000 13,100,000 2.34% TOTAL $98,806,250 $102,524,097 3.76% City of Palm Springs Page 2 07 EXPENDITURES FY 15-16 FY 16-17 %Change CATEGORY AdWW Prellmi FY 16-17 General Government 11,091,043 11,351,780 2.35% Community Econ Dev 1,299,914 1,363,794 4.91% Planning Services 1.674,432 1,732,684 3.48% Building&Code Enforcement 2,747,517 2,905,400 5.75% Recreation/Golf 4,024,147 4,083,765 1.48% Library 2,595,604 2,598,117 0.10% Police 25,240,715 25,983,364 2.94% Fire/Paramedic 13,098,975 13,355,627 1.96% Public Works/Streets 5,013,595 5,387,970 7.47% Maintenance/Facilities 4,122,156 4,254,654 3.21% Tourism/CVB/Convention Center 10,154,825 10,257,648 1.01% Special Events&Contributions 767,500 767,500 0.00% Subtotal 81,830,423 84,042,303 2.70% Transfers Out 3,618,489 2,376,922 -34.31% Capital Transfers 0 2,700,000 N/A Measure J Transfers Out 12,800,000 13,100,000 2.34% TOTAL $98,248,912 $102,219,225 4.04% Capital Transfers: Fire Station#4 Renovation 700,000 Street Repairs 1,000,000 Miscellaneous Capital 1,000,000 TOTAL $2,700,000 16.17 Compared to Employee Related Expenses(Increases)and Savings: 15.16 Protections MOU Contract COLAS ($132,767) MOU Salary Step Movement (43,708) CaIPERS Rate Increase(Safety+4.728%, Misc. +1.628%) (968,620) Employee Health Benefits (140,797) Retiree Health Benefits (34,267) Workers'Comp(+5%est.) (150,000) Total Employee Related Cost Increases ($1,470,159) City of Palm Springs Page 3 V