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CC:HA:PA:SA - FOUR-FIFTHS VOTE REQUIREMENT - (1) Receipt and Filing of the Fiscal Year 2015/2016 Mid-Year General Fund Budget Monitoring Report, (2) Receipt and Filing of the General Fund Financial Forecast, (3) Provide Notification to the Public Inviting Comment and Input for the Upcoming Proposed Budget for Fiscal Year 2016/2017, and (4) Approval of Proposed Budget Amendments.
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Contact Person/Dept: Jeff Muir, Finance
Phone Number: (310) 253-5865
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: Yes [X] No []
Commission Action Required: Yes [] No [X]
Public Notification: (Email) Meetings and Agendas - City Council (02/18/16); (Email) Ongoing Topics - Fiscal and Budget Issues (02/18/16)
Department Approval: Jeff Muir, Chief Financial Officer (02/16/16)
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RECOMMENDATION
Staff recommends the City Council and Boards of the Culver City Housing Authority, Culver City Parking Authority, and Successor Agency to the Culver City Redevelopment Agency (1) receive and file the Fiscal Year 2015/2016 Mid-Year Budget Monitoring Report, (2) receive and file the General Fund Financial Forecast, (3) provide notification to the public inviting comment and input for the upcoming Proposed Budget for Fiscal Year 2016/2017, and (4) approve related budget amendments.
A budget amendment requires a 4/5ths vote.
BACKGROUND/DISCUSSION:
Mid-Year and Forecast Reports
The attached Mid-Year Budget Monitoring Report (Mid-Year Report) presents the City Council with a snapshot of General Fund, Enterprise Funds, and Internal Service Funds expenditures and revenues through the first half of Fiscal Year 2015/2016, which began on July 1, 2015. Other funds are performing within expectations and are not a part of this report. The attached General Fund Financial Forecast (Forecast) takes the mid-year projections and forecasts revenues and expenditures out to Fiscal Year 2023/2024. The Forecast provides details of the various assumptions used to arrive at the revenue and expenditure estimates.
Notification Inviting Public Comment and Input
Consistent with the City Council’s general policy, the City is committed to being open and transparent in all matters, especially those involving the collection and expenditure of public funds. In order to continue this commitment, the public is being provided this first of several opportunities to comment and offer input on the City’s upcoming Fiscal Year 2016/2017 proposed budget.
The City Manager’s Proposed Budget for Fiscal Year 2016/2017 is scheduled to be formally presented to the City Council on Monday, May 9, 2016. Prior to this date, there will be additional public comment opportunities currently scheduled in the month of March, and opportunities during the period the City Council discusses the proposed budget with City staff in May and June.
The public is also invited to submit comments and suggestions to the City at the following e-mail address: Budget.Priorities@culvercity.org <mailto:Budget.Priorities@culvercity.org>.
FISCAL ANALYSIS
The Mid-Year Report provides detail into General Fund revenues received and expenditures disbursed through December 31, 2015, as well as adjusted projections through the end of the Fiscal Year (to June 30, 2016). General Fund expenditures through December 31, 2015 are $53.16 million, or 48.9% of current revised budget projections. General Fund operating revenues through December 31, 2015 are $33.3 million, or 33.0% of current revised budget projections. Full year General Fund projections for Fiscal Year 2015/2016 show total estimated operating revenues at $101.22 million, $1.19 more than the current revised budget total.
Total expenditures are estimated at $106.52 million, $2.11 million less than the current budget. General Fund total expenditures are projected to exceed operating revenue by an estimated $5.3 million. This, however, is largely due to substantial planned transfers to fund capital projects (a total of $3.4 million) as well as $4.6 million to implement mitigation measures in dealing with urban runoff discharge requirements. Therefore, operating revenues are expected to meet operating expenditure requirements again for Fiscal Year 2015/2016.
As recommended by the Finance Advisory Committee, the General Fund Financial Forecast has been expanded out through Fiscal Year 2023/2024 in order to show the effect of Measure Y ending in March 2023. The Forecast predicts minor operating surpluses for the next several years, but shows a deficit of approximately $11 million if Measure Y does sunset in March 2023.
Generally, revenues are projected to increase by an average of 2.3% annually, with continued gradual growth in the economy. The Forecast does not make any assumption for another recession during this time. The Forecast also assumes the same staffing levels approved for Fiscal Year 2015/2016 stay in place. For budgetary purposes, cost-of-living adjustments for both safety and non-safety employees are assumed at 2.0% per year. Significant increases to pension costs are assumed based on the latest actuarial information provided by CalPERS. For the most part, other expenditure categories are assumed to grow at an average 1.6% inflationary rate. Further details are provided in the Forecast document.
Several factors must be considered when reviewing the Forecast:
• A number of developments, both private and former Culver City Redevelopment Agency projects, are assumed to come ‘on line’ during the course of this projection.
• Measure Y, which is estimated to provide approximately $11.5 million per year in General Fund revenues by the end of the Forecast, sunsets on March 31, 2023.
Staff will make a presentation of the report and also discuss in more detail future policy discussions on whether and how to use General Fund reserves in excess of the 30% Contingency Reserve.
The following adjustments are requested for approval, and are incorporated into Attachment 2:
• Increase various line items in PRCS by $49,000 and increase constant staffing in Fire Department by $350,000, offset by transferring appropriated reserves.
• Increase budget amounts for General Fund revenues by $1.19 million in various categories.
• Appropriate the remaining $2.5 million from Fiscal Year 2014/2015 land sale proceeds towards capital investments ($2.0 million towards a major streetlight replacement project and $500,000 toward the Culver Boulevard urban runoff infiltration project).
• Replace ride-on sweeper for Transportation for $85,000.
• Add 570 part-time hours for Administrative Intern in Transportation, no additional funding required due to salary savings this year.
• Add one full-time Sr. Computer Analyst in the Technology Surcharge Fund to support the newly implemented permitting system, prorated amount of $62,675 for remainder of the Fiscal Year.
• Add $57,425 in anticipated revenue for Arts Business District and $27,500 in expenditures.
ATTACHMENTS
• Attachment 1 - Fiscal Year 2015/2016 Mid-Year Budget Monitoring Report
• Attachment 2 - Proposed Budget Amendments
• Attachment 3 - General Fund Financial Forecast
• Attachment 4 - Proposed Revised Summary of Blanket Purchase Orders
RECOMMENDED MOTION(S)
That the City Council:
(1) Receive and file the Fiscal 2015/2016 Mid-Year Report as provided in Attachment 1; and,
(2) Receive and file the General Fund Financial Forecast as provided in Attachment 3; and,
(3) Provide notification to public inviting comment and input for the upcoming Proposed Budget for Fiscal Year 2016/2017; and,
(4) Approve the Revised Summary of Blanket Purchase Orders as proposed in Attachment 4; and,
(5) Approve Budget Amendments as proposed in Attachment 2.
A budget amendment requires a 4/5ths vote.