HomeMy WebLinkAboutAgenda Report - March 15, 2017 I-02TM
CITY OF LODI
COUNCIL COMMUNICATION
_'-
AGENDA TITLE: Adopt Resolution Approving Fiscal Year 2016/17 Mid -Year Budget Adjustments
and Authorizing the Contribution and Appropriation of Enterprise Funds and
Special Revenue Funds to the PERS Rate Stabilization Fund
MEETING DATE: March 15, 2017
PREPARED BY: Supervising Budget Analyst
RECOMMENDED ACTION: Adopt resolution approving Fiscal Year 2016/17 mid -year budget
adjustments and authorizing the contribution and appropriation of
Enterprise Funds and Special Revenue Funds to the PERS Rate
Stabilization Fund.
BACKGROUND INFORMATION: Staff is recommending that Council approve adjusting
appropriations within the Electric Utility to address a transfer of
operating funds to capital funds; adjusting appropriations within
Water to address a transfer of operating funds to capital funds; adjusting appropriations within Self
Insurance Fund to address additional worker's compensation expenses; adjusting appropriations within
the Benefits Fund to address additional medical expenses and adjusting appropriations within Electric
Utility; Water; Wastewater; Community Development; Parks, Recreation and Cultural Services; Library;
Streets and Transit funds to address contributions to the PERS Rate Stabilization Fund.
General Fund:
The Fiscal Year 2016/17 budget adopted last June assumed that reserves would be drawn down by
$1,564,090 for settled labor agreements. Based upon mid -year revenue and expenditure estimates, staff
is projecting that expenditures will exceed revenue by $1,275,420 after adjusting for funding the PERS
Rate Stabilization Fund. In sum, after adjusting for differences in revenue and expenses outlined below,
staff projects that the General Fund will perform $288,670 better than initially projected.
Resolution 2016-190 established a new council policy to use excess reserves to fund the PERS Rate
Stabilization Fund. However the funding for this account was, by definition not in the FY16/17 budget.
As such, the $2,830,210 in General Fund contribution to the Fund added to the $1,275,420 to put total
expenditures $4,105,630 over budget.
General Fund Revenue Adjustments
Revenue estimates are $85,670 lower than projected at initial budget adoption. The main driving force of
the overall reduction is lower than projected late fees associated with utility payments as we transitioned
to the new software. Sales tax is projected just slightly under budget by $8,100; transient occupancy tax
projected $100,000 higher. Variances in a number of other accounts make up the remainder of the
difference in estimated revenue. Total General Fund estimated revenue is $46,830,350.
The primary General Fund revenue sources are property taxes, sales taxes, Electric Utility payment in
lieu of taxes, transfers from other funds and Vehicle License Fees. Combined, these five revenue
sources are expected to account for approximately $37 million, or about 79 percent of General Fund
revenue. This percent is just slightly higher than FY 2015/16.
APPROVED: 44i)01,
en S►• a■ - ger, City Manager
Adopt Resolution Approving Fiscal Year 2016/17 Mid -Year Adjustments and Authorizing the Contribution and Appropriation of
Enterprise Funds and Special Revenue Funds to the PERS Rate Stabilization Fund
March 15, 2017
Page 2
General Fund Expense Adjustments
General Fund department budgeted and estimated actual costs are shown in the table below:
Department
2016/17
Budget
2016/17
Estimate
(Over) Under
Budget
City Attorney
_$ 530,830
$ 543,730
$ (12,900)
City Clerk
$ 686,170
$ 685,620
$ 550
City Manager
$ 477,810
$ 436,540
$ 41,270
Eco Dev
$ 589,910
$ 577,200
$ 12,710
Fire
$ 11,552,550
$ 11,491,770
$ 60,780
Internal Services
$ 3,826,830
$ 3,844,730
$ (17,900)
Non Departmental
$ 8,765,760
$ 8,688,970
$ 76,790
Police
$ 19,872,500
$ 19,769,680
$ 102,820
Public Works
$ 2,177,750
$ 2,067,530
$ 110,220
Total
$ 48,480,110
$ 48,105,770
$ 374,340
Overall, General Fund expenses are projected to be $374,340 under budget. This is primarily due to
salary savings in City Manager, Police, Fire, and Public Works. The additional projected expenditure in
City Attorney is primarily due to overtime expenses ($2,400) and an increase in book and supply needs
($5,600). The additional projected expenditure in Internal Services is primarily due to an increase in legal
services pertaining to labor relations ($14,520). Variances in a number of other accounts make up the
difference in estimated expenditures within the departments. Additional appropriations for the General
Fund are not needed.
Electric Utility
$10,286,830 was transferred from the Electric Utility operating fund to its Capital fund to improve the
quarterly reporting process. This transfer normally occurs at the close of the year. A budget adjustment
is needed to address the transfer within the utility. Revenues are projected at $82,030,370, an increase
of $9,749,130 primarily due to the capital transfer. Variances in a variety of customer accounts make of
the balance. The Utility originally budgeted a projected draw on reserves of $1,424,660. It is projected to
draw $1,604,274 of which $396,974 is requested to be transferred to the PERS Rate Stabilization Fund,
discussed later in this communication. The overall expenditure appropriation requested is $8,855,081.
Water Utility
$5,400,000 was transferred from the Water operating fund to its Capital fund to improve the quarterly
reporting process. This transfer normally occurs at the close of the year. A budget adjustment is needed
to address the transfer within the utility. Revenues are projected at $19,477,800, an increase of
$4,973,690 primarily due to the capital transfer. Customer accounts are projected to come under budget
by $542,880. The overall expenditure appropriation requested is $5,344,756, of which $158,656 is
requested to be transferred to the PERS Rate Stabilization Fund, discussed later in this communication.
Self -Insurance Fund
The Self -Insurance funds include our General Liability and Worker's Compensation programs. The
Worker's Compensation program is reflecting higher than budgeted costs as a result of aggressive claims
closure practices and additional claims being filed and settled. Additional appropriations of $942,380 are
Adopt Resolution Approving Fiscal Year 2016/17 Mid -Year Adjustments and Authorizing the Contribution and Appropriation of
Enterprise Funds and Special Revenue Funds to the PERS Rate Stabilization Fund
March 15, 2017
Page 3
required to fund activities through the end of the fiscal year. Sufficient reserves exist to accommodate
the additional appropriation.
Employee Benefits Fund
The Employee Benefits Fund pays for a variety of benefits provided to employees which are offset by
transfer from departmental funds. Additional appropriations of $210,330 are required to fund costs
through the end of the fiscal year. The additional need is primarily due to increases in medical costs for
both active and retired employees.
PERS Rate Stabilization Fund
Resolution 2016-190 established a pension stabilization trust to pre -fund unfunded liability associated
with the City's pension fund. Additionally the resolution authorized the City Manager to approve an
appropriation adjustment for the General Fund contribution once final numbers were known. Lastly, the
resolution indicated staff would bring forth a plan for enterprise fund contributions along with the mid -year
adjustment.
The calculation for the General Fund designates at least 80 percent of the reserves in excess of
established reserve levels for Fiscal Year 2015/16. This calculates to $2,830,210, which represents
47.2 percent of the General Fund pension payment made in Fiscal Year 2015/16. Using the same
percentage on PERS 2015/16 payments made by the remaining operating funds, staff is recommending
appropriation adjustments as shown on the following table for Community Development, Electric Utility,
Library, Parks, Recreation and Cultural Services, Streets, Transit, Wastewater and Water funds for their
contributions toward the PERS Rate Stabilization fund for Fiscal Year 2015/16.
Fund _
Pension Stabilization
Fund
Community Development
67,562
Electric Utility
396,974
General Fund
2,830,210
Library
40,931
Parks, Recreation & Culteral Services
100,768
Streets
64,130
Transit
26,068
Wastewater
158,656
Water
158,656
Total
3,843,955
FISCAL IMPACT:
SVB/sb
Funding for the PERS Rate Stabilization Fund and the additional expenses in the
Self -Insurance Fund and Benefits Fund is funded from unassigned reserves in
each of the effected funds; no additional funding is used in Electric Utility or Water
for the transfers from operating to capital adjustments.
usan Bjork, Supervising Budget Analyst
1 BA#
2 JV#
CITY OF LODI
- APPROPRIATION ADJUSTMENT REQUEST
TO:
Internal Services Dept - Budget Division
OBJ #
3, FROM:
Susan Bjork, Sup Budget Analyst 5. DATE:
3/7/16
4. DEPARTMENT/DIVISION: Budget Division
66. REQUEST ADJUSTMENT OF APPROPRIATION AS LISTED BELOW
FUND #
ORG #
OBJ #
ACCOUNT TITLE
AMOUNT
A.
SOURCE OF
FINANCING
501
50050
IEU Capital Intrafund Transfer
$ 8,485,107.00
561
50050
'Water Capital Intrafund Transfer
$ 5,186,100.00
665
32205
'W/C Fund Balance
$ 942,380.00
655
32205
Benefit Fund Balance
$ 210,330.00
270
32205
Com Dev Fund Balance
$ 67,562.00
500
32205
EU Fund Balance
$ 369,974.00
120
32205
Library Fund Balance
$ 40,931.00
200
32205
PRCS Fund Balance
$ 100,768.00
301
32205
Streets Fund Balance
$ 64.130.00
600
32205
Transit Fund Balance
$ 26,068.00
530
32205
Wastewater Fund Balance
$ 158,656.00
560
32205
Water Fund Balance
$ 158,656.00
B.
USE OF
FINANCING
500
76050
IEU Operating Intrafund Transfer
$ 8,485.107.00
560
76060
Water Operating Intrafund Transfer
$ 5,186,100.00
665
66525100
74065
W/C Medical Services
$ 942,380.00
655
65522000
74001
Medical premiums
$ 210,330.00
270
27080000
72990
Special Payments
$ 67,562.00
500
50060001
72990
Special Payments
$ 369,974.00
120
12090000
72990
Special Payments
$ 40,931.00
200
20070001
72990
Special Payments
$ 100,768.00
301
30156001
72990
Special Payments
$ 64,130.00
600
60054101
72990
Special Payments
$ 26,068.00
530
53053001
72990
Special Payments
$ 158.656.00
560
56052001
72990
Special Payments
$ 158,656.00
7. REQUEST IS MADE TO FUND THE FOLLOWING PROJECT NOT INCLUDED IN THE CURRENT BUDGET
Please provide a description of the project, the total cost of the project, as well as justification for the
requested adjustment If you need more space, use an additional sheet and attach to this form.
2016/17 mid -year adjustments
If Council has authorized the appropriation adjustment, complete the following:
Meeting Date: es No:
n/7 ) Attttach copy of resolution to this form.
Department Head Signature:
8. APPI41/AL SIGNATURES
(Deputy City Manager/Internal Services Manager Date
Submit completed form to the Budget Division with any required documentation,
Final approval will be provided in electronic copy format,
RESOLUTION NO. 2017-44
A RESOLUTION OF THE LODI CITY COUNCIL AMENDING
THE CITY OF LODI FINANCIAL PLAN AND BUDGET FOR
THE FISCAL YEAR BEGINNING JULY 1, 2016 AND ENDING
JUNE 30, 2017
WHEREAS, the City Council adopted a Financial Plan and Budget for Fiscal Year
2016-17 on June 1, 2016; and
WHEREAS, the adopted 2016-17 Financial Plan and Budget was prepared in
accordance with the City Council's goals, budget assumptions, and policies; and
WHEREAS, revisions to the adopted 2016-17 Financial Plan and Budget are necessary
to address operating changes and expenditure estimates; and
WHEREAS, Resolution No. 2016-190 established a pension stabilization trust to prefund
unfunded liability associated with the City's pension fund, additionally authorized the City
Manager to approve an appropriation adjustment for the General Fund contribution, and
directed staff to bring forth a plan for Enterprise Fund contributions along with mid -year
adjustments.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lodi does
hereby revise the adopted 2016-17 Financial Plan and Budget as follows:
1. Approve a budget adjustment in Electric Utility to facilitate transferring funds from
operating to capital for $8,485,107.
2. Approve a budget adjustment in Water Utility to facilitate transferring funds from
operating to capital for $5,186,100.
3. Approve increasing appropriations in the Self Insurance Fund in the amount of
$942,380 for Worker's Compensation to provide funding for increased costs.
4. Approve increasing appropriations in the Benefits Fund in the amount of
$210,330 to provide funding for increased costs.
5. Approve funding the contributions of Enterprise Funds to the PERS Rate
Stabilization Fund as follows:
Fund
PERS Rate
Stabilization Fund
Community Development
67,562
396,974
Electric Utility
Library
40,931
Parks, Recreation & Cultural Services
100,768
Streets
64,130
Transit
26,068
Wastewater
158,656
Water
158,656
Dated: March 15, 2017
hereby certify that Resolution No. 2017-44 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held March 15, 2017, by the following votes:
AYES: COUNCIL MEMBERS — Chandler, Johnson, Nakanishi, and Mayor Kuehne
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Mounce
ABSTAIN: COUNCIL MEMBERS — None
g5NNIFER FERRAIOLO
City Clerk
2017-44
[2016/17 Mid -Year Budget
Review
City Council Meeting
March 15, 2017
J
[General Fund Overview
General Fund
Fund Balance
Beginning Fund Balance Unreserved
Revenues
Expenditures
Audited Audited
2014-15 2015-16
Actuals Actuals
2016-17
Budget
Estimated Budget to
2016-17 Est Actuals
Actuals Variance
J
8,950,876
46,181,151
43,289,809
Net Difference (Revenues Less Expenditures) 2,891,342
11,842,218
46,938,195
46,372,665
10,359,298
46,916,020
51,310,320
565,530 (4,394,300)
Fund Balance
Ending Fund Balance Unreserved 11,842,218 12,407,748 5,964,998
12,407,748 2,048,450
46,830,350 (85,670)
50,935,980 (374,340)
(4,105,630) 288,670
8,302,118 2,337,120
2
[General Fund Reserve Status
Total Reserve
Allocated to:
Catastrophic Reserve
Economic Reserve
Unassigned
8,302,118.00
3,704,602.00
3,704,602.00
892,914.00
[Departmental Variances
Department
2016/17
Budget
2016/17
Estimate
(Over)
Under
Budget
City Clerk
686,170
685,620
550
City Manager
477,810
436,540
41,270
Ecomomic Development
589,910
577,200
12,710
City Attorney
530,830
543,730
(12,900)
Internal Services
3826830
3844730
(17, 900)
Police
19, 872, 500
19, 769, 680
102,820
Fire
11, 552, 550
11, 491, 770
60,780
Public Works
2,177, 750
2,067,530
110,220
Non Departmental
8,765,760
8,688,970
76,790
Total
48, 480,110
48,105, 770
374,340
[Electric Utility
Electric Utility Enterprise Fund
Audited Audited
2014-15 2015-16
Actuals Actuals
2016-17
Budget
Estimated Budget to
2016-17 Est Actuals
Actuals Variance
Cash Balance
Beginning Cash Balance *
Revenues
Expenditures
5,929,528
70,972,285
70,518,796
Net Difference (Revenues Less Expenditures) 453,489
Cash Balance
Ending Cash Balance *
6,383,017
* Local cash, excluding NCPA General Operating Reserve (GOR)
6,383,017
73,132,203
67,246,200
3,267,477
72,281,240
74,779,563
5,886,003 (2,498,323)
12,269,020 769,154
12,269,020
82,030,370
83,634,644
9,001,543
9,749,130
8,855,081
(1,604,274) 894,049
10,664,746 9,895,592
5
[Water Utility
Water Utility Enterprise Fund
Cash Balance
Beginning Cash Balance
Revenues
Expenditures
Audited Audited
2014-15 2015-16
Actuals Actuals
2016-17
Budget
Estimated Budget to
2016-17 Est Actuals
Actuals Variance
J
Net Difference (Revenues Less Expenditures)
Cash Balance
Ending Cash Balance
7,027,567 6,755,522 7,807,772
15,464,665 14,149,204 14,504,110
15,736,710 14,633,940 16,830,110
(272,045) (484,736) (2,326,000)
6,755,522
6,270,786 5,481,772
6,270,786
19,477,800
22,174,866
(1,536,986)
4,973,690
5,344,756
(2,697,066) (371,066)
3,573,720 (1,908,052)
6
[Self Insurance
Self Insurance Internal Services Funds
Cash Balance
Beginning Cash Balance
Revenues
Expenditures
Audited Audited
2014-15 2015-16
Actuals Actuals
2016-17
Budget
Estimated Budget to
2016-17 Est Actuals
Actuals Variance
J
12,253,198
2,709,197
2,579,733
Net Difference (Revenues Less Expenditures) 129,464
Cash Balance
Ending Cash Balance
12,382,662
12,382,662
3,249,910
3,077,977
11,602,252
3,675,580
3,620,720
171,933 54,860
12,554,595 11,657,112
12,554,595
3,690,590
4,563,100
952,343
15,010
942,380
(872,510) (927,370)
11,682,085 24,973
7
[Employee Benefits
Audited Audited
2014-15 2015-16
Actuals Actuals
2016-17
Budget
Estimated Budget to
2016-17 Est Actuals
Actuals Variance
Employee Benefits Internal Services Fund 1
Cash Balance
Beginning Cash Balance
Revenues
Expenditures
1,249,353 1,681,977 1,681,977 1,653,111 (28,866)
7,798,463 7,684,771 8,201,360 8,207,860 6,500
7,365,839 7,713,637 9,118,440 9,328,770 210,330
Net Difference (Revenues Less Expenditures) 432,624 (28,866) (917,080) (1,120,910) (203,830)
Cash Balance
Ending Cash Balance
1,681,977 1,653,111
764,897 532,201 (232,696)
8
[PERS Rate Stabilization Fund
Fund
Pension Stabilization
Fund
Community Development
67,562
Electric Utility
396,974
General Fund
2,830,210
Library
40,931
Parks, Recreation & Culteral Services
100,768
Streets
64,130
Transit
26,068
Wastewater
158,656
l ate r
158,656
Total
3,843,955
[Action Requested
Adopt resolution adjusting
appropriations in various funds to
address FY 2016/17 needs and
allocations to the PERS Rate
Stabilization Fund.
CQuestions?