HomeMy WebLinkAboutAgenda Report - June 7, 2017 I-01TM
CITY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: Adopt Resolution Approving the Fiscal Year 2017/18 Financial Plan and Budget
and Approving the Fiscal Year 2017/18 Appropriation Spending Limit
MEETING DATE: June 7, 2017
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Adopt resolution approving the Fiscal Year 2017/18 Financial Plan and
Budget and approving the Fiscal Year 2017/18 Appropriation Spending
Limit.
BACKGROUND INFORMATION: Staff presented information to Council regarding this budget at the
Shirtsleeve meetings on May 2, May 9, and May 23, 2017. Staff
published a draft budget document on May 19, 2017, to the City's
webpage. The direct link to the document is:
http://www.lodi.gov/finance/pdf/Draft17-18Budget.pdf
The Budget presented to Council this evening is consistent with the draft released on May 19 and the
information presented at the Shirtsleeve meetings. The exception is in the General Fund relating to
internal cost recovery (Cost of Services) methods. At the May 2 Shirtsleeve meeting, the General Fund
budget and five-year financial forecast were discussed in detail. That budget and forecast did not include
Cost of Services charges assessed to certain special revenue funds for services provided by the General
Fund. City Staff had calculated the appropriate justifiable Cost of Service charge but had not levied that
charge on all receiving funds in the past. The Budget as published on May 19 and presented to Council
in this report includes Cost of Services charges to the following special revenue funds in the amounts
noted:
Fiscal Year 2017/18
Special Revenue Fund Cost of Service Cham e
Historical Cost of
Service Recovery
Charge
Total Cost of
Services Charge
Streets $174,0801
Community Development $192,1723
Transit
$174,080
$1,667,352
$1,859,522
$177,800
$177,800
Total $544,040 $1,667,352 $2,211,402
1. Streets is onty assessed at 50% of the eligible charge. Staff will recommend 100% of the eligible charge be recovered in FY 201819
including a recovery of the unlevied charge from FY 2017/18.
2. Staff continues to explore the potential to recover historical cost of service charges from these funds and from Engineering. Any potential
recovery will be part of the FY 2017/18 Mid -Year review.
3. This amount was included in the May 2nd Shirtsleeve, but is shown here for full disclosure of cost of service charges.
APPROVED:
`S
viati)auer City Manager
Best practice dictates the City would assess Cost of Services charges on all funds receiving General
Fund services that are eligible to and in a financial position to absorb such charges. The funds identified
above meet both criteria.
Adding this additional revenue to FY 2017/18 provided additional resources to the Budget. In the Budget,
Staff has allocated those resources ($2.0 Million) to the Pension Rate Stabilization Plan (PRSP) the City
currently has with the Public Agency Retirement Services (PARS). The PRSP has significantly higher
earnings potential than the City's pooled cash investment portfolio and has a recent track record of
exceeding CaIPERS investment return. The additional resources the General Fund budget proposes to
place in the PRSP will allow the General Fund to remain solvent longer given the impending CaIPERS
contribution increases in the coming years.
Combining the additional contributions to PARS noted above and assuming continued Cost of Service
allocations from the special revenue funds noted, the General Fund is able to survive an additional two
years from what was shown on May 2nd. However, the limited circumstances include unprecedented
growth assumptions for City revenue, constant 6.25% earnings in the PARS account and still result in
insolvency very early in the Fiscal Year 2023/24. Only four actions can stave off or delay the City's
insolvency beyond that year. They are:
1.) Substantial service reductions to the point where current City operations are unrecognizable and
service is inaccessible to the public.
2.) Additional revenue equivalent to at least a'/ cent sales tax. Note, this could be any type of new
revenue but must generate revenue equivalent to the % cent sales tax.
3.) CaIPERS reconsideration of future rate increases to both the normal cost and Unfunded Accrued
Liability "catch up" payments.
4.) Legislative changes to pension benefit funding formulas or protections.
The City has control over the first two items. The third and fourth are entirely outside City control. The
City is involved in efforts to influence CaIPERS and the State Legislature, but to date CaIPERS is
continuing with the rate increases with no indication they will reconsider. Additionally, the PERS board is
signaling that further reductions of the discount rate are imminent. Further discount rate reductions will
increase the City's unfunded actuarial liability and future PERS contributions. The legislature has to date
not considered any items that would provide pension relief to local agencies.
To solve the problem locally, the City needs to embark on aggressive strategies within items one and
two. In addition, Staff will continue to explore options to maximize investments, enhance cost recovery
and reduce expenses within existing resources in an effort to continue providing services to the residents
as long as possible. However, these are Band-Aid solutions when a tourniquet is needed. Efficiency and
revenue enhancements that can be achieved at a Staff level will only provide the City with extensions of
solvency in the days or months range. These are useful considerations and part of best practice, but
cannot be relied upon to solve the problem.
The Budget recommendation includes funding for 393 full-time positions. This is a net reduction of 4
positions from FY 2016/17. The table below shows a summary of the position changes. In addition, two
police officer positions are funded at 50% in the budget, meaning the officers will not be hired before
January 1, 2018.
Classification
Department
Number
Groundworker
Electric Utility
(1)
Senior Adminstrative Clerk
Fire
(1)
Accountant
Internal Services
1
Librarian
Library
(1)
Park Superintendent
PRCS
(1)
Recreation Superintendent
PRCS
(1)
Deputy PRCS Director
PRCS
1
Electrician
Water Services
(1)
Net position reduction:
(4)
FISCAL IMPACT: The 2017/18 budget provides an expenditure plan for all funds. The All -Funds
expenditure budget is projected to be $195,421,000, an increase of $1.6 million from
the prior year. The General Fund revenue projection is $50,388,788. On-going
expenses are projected at $48,369,550. The balance of $2,019,232 is a one-time
investment in the PRSP.
ar)
Andrew Keys, Deputy City Manager
RESOLUTION NO. 2017-109
A RESOLUTION OF THE LODI CITY COUNCIL
ADOPTING THE CITY OF LODI FINANCIAL PLAN AND
BUDGET FOR THE FISCAL YEAR BEGINNING JULY 1, 2017
AND ENDING JUNE 30, 2018, AND APPROVING THE 2017/18
APPROPRIATIONS SPENDING LIMIT
WHEREAS, the City Manager submitted the 2017/18 Financial Plan and Budget to the
City Council on May 18, 2017; and
WHEREAS, the 2017/18 Financial Plan and Budget was prepared in accordance with
the City Council's goals, budget assumptions, and policies; and
WHEREAS, the City Council conducted public budget meetings on May 2, May 9, and
May 23, 2017 at the Carnegie Forum; and
WHEREAS, the City Council is required to adopt the Appropriations Spending Limit for
2017/18; and
WHEREAS, the Appropriations Spending Limit and the annual adjustment factors
selected to calculate the Limit are part of the Financial Plan and Budget.
fol lows:
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lodi as
1. That the 2017/18 Financial Plan and Budget, as proposed by the City Manager, be
approved as follows:
Budget
General Fund
Police
$19,804,640
Fire
$11,695,580
Public Works
$2,322,320
City Clerk
$562,290
City Manager
$476,690
City Attorney
$557,480
Internal Services
$3,935,880
Economic Development
$468,070
Non -Departmental
$10,565,830
Total General Fund
$50,388,780
Other Funds
Electric Utility
$74,784,690
Water Utility
$16,612,210
Wastewater Utility
$17,294,260
Transit
$6,737,080
Streets
$4,213,430
Community Development
$3,906,660
Parks, Rec & Cultural Services
$6,160,970
Library
$1,527,940
Transportation Development Act
$50,000
Community Dev Block Grant
$1,044,340
Public Safety Special Revenue
$270,500
Capital Outlay
$732,040
Equip & Vehicle Replacement
$240,000
Debt Service
$1,757,140
Benefits
$8,909,600
Self Insurance
$3,752,960
Trust and Agency
$73,000
Fleet Services
$1,948,600
Total Other Funds
$150,015,420
(1)
Recreation Superintendent
Grand Total
$200,404,200
2. That the funds for the 2017/18 Financial Plan and Budget are appropriated as
summarized in the document on file in the City Clerk's Office;
3. That position additions and deletions be approved as shown in the table below
effective July 1, 2017:
Classification
Department
Electric
Number ,
(1)
(1)
_
Groundworker
Senior Administrative Clerk
Fire
Accountant
Internal Services
1
Librarian
Library
(1)
Park Superintendent
PRCS
(1)
Recreation Superintendent
PRCS
(1)
Deputy PRCS Director
PRCS
1
Electrician
Water Services
(1)
Net positions reduction:
(4)
and;
4. That the Appropriations Spending Limit be increased by $4,558,937 from the
2016/17 level of $95,607,750 to the 2017/18 level of $100,166,687 in accordance
with the calculations on Attachment 1 and Exhibits A through G.
Dated: June 7, 2017
I hereby certify that Resolution No. 2017-109 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held June 7, 2017, by the following vote:
AYES: COUNCIL MEMBERS — Chandler, Mounce, Nakanishi, and
Mayor Kuehne
NOES: COUNCIL MEMBERS — Johnson
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
lNIFER . FERRAIOLO
City Clerk
2017-109
Attachment 1
2017-18 FINANCIAL PLAN AND BUDGET
APPROPRIATIONS SPENDING LIMIT
2017-18 APPROPRIATIONS SPENDING LIMIT
AMOUNT
Last Year's Limit
Adjustment Factors
1 Population % 1.0104
2 Inflation % 1.0369
Total Adjustment %
Annual Adjustment
Adjustments
Total Adjustments
2017-18 APPROPRIATIONS SPENDING LIMIT
95,607,750
1.04768
4,558,937
None
4,558,937
100,166,687
2017-18 APPROPRIATIONS SUBJECT TO LIMITATION
AMOUNT
PROCEEDS OF TAXES
EXCLUSIONS
APPROPRIATIONS SUBJECT TO LIMITATION 38,181,190
CURRENT YEAR LIMIT 100,166,687
38,181,190
OVER(UNDER) LIMIT
(61,985,496)
EXHIBIT A
City of Lodi
Appropriations Spending Limit
Fiscal Year 2017-18
Amount Source
A. Last Year's Limit
B. Adjustments Factors
Total Adjustment %
95,607,750
1 Population % 1.0104 (Exhibit B)
2 Inflation % 1.0369 (State Finance)
(B1*B2)
1.04768
C. Annual Adjustment 4,558,937 (B*A)
D. Other Adjustments
E. Total Adjustments
F. This Year's Limit
None
4,558,937
100,166,687
(C+D)
(A+E)
City of Lodi
Appropriations Spending Limit
Growth Factors/Calculations
EXHIBIT B
GROWTH FACTORS: %Increase %Increase
Fiscal Per Capita City County
Year Income Population Population
87-88 3.47
5.72 3.33
88-89 4.66 4.96 3.32
89-90 5.19
2.52 2.20
90-91 4.21 2.26 2.23
91-92 4.14 1.19 2.64
92-93 -0.64 0.97 2.41
93-94 2.72 0.73 2.13
94-95 0.71 0.51 1.57
95-96 4.72 1.31 1.59
96-97 4.67 1.68 1.85
97-98 4.67 0.70 1.21
98-99 4.15 1.16 1.47
99-00 433 1.94 1.44
00-01 4.91 1.29 1.78
01-02 7.82 1.90 2.71
02-03 -1.27 2.14 3.07
03-04 2.31 1.69 2.86
04-05 3.28 0.75 2.54
05-06 5.26 0.96 2.65
06-07 3.96 0.30 2.00
07-08 4.42 0.90 1.73
08-09 4.29 0.68 1.59
09-10 0.62 0.42 1.07
10-11 -234 0.61 0.97
11-12 2.51 0.61 0.97
12-13 3.77 0.77 1.05
13-14 5.12 0.57 0.95
14-15 -0.23 0.66 1.10
15-16 3.82 0.35 1.43
16-17 5.37 0.71 1.27
17-18 3.69 1.04 1.53
CALCULATIONS:
Fiscal
Year
Calculation
Appropriation
Spending Limit
87-88 1.0347 x 1.0572 = 1.0939
1.0939 x $22,654,787
88-89 1.0466x1.0496=1.0985
1.0985 x $24,782,072
89-90 1.0519 x 1.0252 = 1.0784
1.0784 x $27,223,106
90-91 1.0421 x 1.0226 =1.0657
1.0657 x $29,357,398
91-92 1.0414 x 1.0264 =1.0689
1.0689 x $31,286,179
92-93 .9936 x 1.0241 =1.0175
$24,782,072
$27,223,106
$29,357,398
$31,286,179
$33,441,797
1.0175 x 33,441,797 $34,027,028
93-94 1.0272 x 1.0213 = 1.0491
1.0491x 34,027,028 = $35,697,755
94-95 1.0071 x 1.0157 = 1.0229
1.0229 x 35,697,755 = $36,515,234
95-96 1.0472 x 1.0131 =1.0609
1.0609 x 36,515,234 = $38,739,012
96-97 1.0467x1.0168=1.0643
1.0643 x 38739012 = $41,229,332
97-98 1.0467x1.0070=1.0540
1.0540x 41,229,332 = $43,456,825
98-99 1.0415x1.01160=1.0536
1.0536x 43,456,825 = $45,785,303
99-00 1.0453x1.0194=1.0656
1.0656x45,785,303 = $48,787,849
99-01 1.0491x1.0129=1.0626
1.0626x48,787,849 = $51,843,597
01-02 1.0782x1.0190=1.0987 $56,959,824
1.0986858
02-03 .9873x1.0214=1.00843 $57,439,894
1.00842822
03-04 1.0231x1.0169=1.0404 $59,759,913
1.04039039
04-05 1.0328x1.0075=1.040546 $62,182,939
1.040546
05-06 1.0526x1.0096=1.06270496 $66,082,118
1.06270496
06-07 1.0396x1.0030=1.0427188 $68,905,066
1.0427188
07-98 1.0442x1.0090=1.0535978 $72,598,226
1.0535978
98-09 1.0429x1.0068=1.0499917 $76,227,535
1.0499917
09-10 1.0062x1.0042=1.01042604 $77,022,286
1.01042604
10-11 .9746x1.0061=.98054506 $75,523,822
0.98054506
11-12 1.0251x1.0061=1.03135311 $77,891,729
1.03135311
12-13 1.0377x1.0077=1.04569029 $81,450,625
1.04569029
13-14 1.0512*1.0057=1.05719184 $86,108,936
1.05719184
14-15 0.9977x1.0066=1.00428482 $86,477,897
1.00428482
15-16 1.0382x1.0035=1.04183370 $90,095,588
1.04183370
16-17 1.0537x1.0071=1.06118127 $95,607,750
1.06118127
17-18 1.0369x1.0104=1.04768376 $100,166,687
1.04768376
17-18 Appropriations Subject to Limit:
$38 181 190 38.12%
$100,166,687
APPROPRIATIONS SUBJECT TO LIMITATION
City of Lodi
Fiscal Year 2017-18
EXHIBIT C
AMOUNT
SOURCE
A. PROCEEDS OF TAXES
B. EXCLUSIONS
C. APPROPRIATIONS SUBJECT TO LIMITATION
D. CURRENT YEAR LIMIT
r
38,181,190
0
38,181,190
100,166,687
(Exhibit F)
(Exhibit D)
(A -B)
(Exhibit A)
E. OVER(UNDER) LIMIT (61,985,496) (C -D)
38.181.190 =
100,166,687
38.12%
EXCLUDED APPROPRIATIONS
City of Lodi
Fiscal Year 2017-18
EXHIBIT D
CATEGORY Amount
COURT ORDERS
FEDERAL MANDATES
Subtotal
Subtotal
QUALIFIED CAPITAL OUTLAYS
Subtotal
QUALIFIED DEBT SERVICE
Subtotal
TOTAL EXCLUDABLE
(Copy to Exhibit C & G)
None
None
None
None
None
City of Lodi
Schedule to Match User Fees to Costs
Fiscal Year 2017-18
EXHIBIT E
User Fee Cost Associated Amount
Collections With User Fees in Excess
of User fees
Public Safety Fees 371,850 31,500,220 0
Parks and Rec/Cultural Fees 1,757,000 6,160,970 0
Community Development Fees 602,000 3,906,660 0
PW Engineering Fees 870,510 1,344,560 0
Library Fees 35,000 1,177,940 0
Total
3,636,360 44,090,350 0
Calculation - Proceeds of Taxes
City of Lodi
Fiscal Year 2017-18
EXHIBIT F
REVENUE
TAXES:
Property Taxes
Sales & Use Tax
Business License Tax
Franchise Tax
Transient Occupancy Tax
Real Property -Documentary Tax
In -Lieu Franchise Tax
FROM STATE
Motor Vehicle In Lieu
State H -way Maintenance
Gas Tax
Cigarette tax
Transportation Development Act
TDA -Pedestrian/Bike Path
SB 300 Transportation Partnership
Measure K Funds
State Reimbursements -POST
Public Library grants
PERS Rebate
SB90 Reimbursements
Asset Seizure Funds/Auto Theft
Drug Suppression Grant
State special grants
Traffic Congestion Relief
State STIP reimbursement
LOCALLY RAISED
Fines, Forfeitures, Penalties
Licenses and permits
Rent of City Property
Development Fees
USER FEES
(from Exhibit E)
OTHER MISCELLANEOUS
Sale of Property
Restitution -Damage to Property
Other revenue
Interfund Transfers
SUB -TOTAL
(for Exhibit G)
INTEREST EARNINGS
(from Exhibit G)
TOTAL REVENUE
(use for Exhibit C)
RESERVE WITHDRAWALS
(Including appropriated Fund Balance)
TOTAL OF THESE FUNDS
OTHER FUNDS NOT INCLUDED
GRAND TOTAL BUDGET
PROCEEDS
OF TAXES
NON -PROCEEDS
OF TAXES
TOTAL
9,885,200
1,445,000
9,885,200
11,490,830
374,000
11,864,830
1,590,000
1,766,360
1,590,000
1,964,000
2,534,990
1,964,000
800,000
3,400,000
800,000
210,000
49,000
210,000
7,158,850
0
7,158,850
5,018,600
1,445,000
5,018,600
11,400
11,400
1,766,360
1,766,360
2,534,990
0
3,400,000
3,400,000
49,000
49,000
0
0
955,000
955,000
35,000
35,000
15,000
15,000
0
0
50,000
50,000
0
0
301,410
301,410
3,264,560
3,264,560
0
0
0
0
0
3,636,360
3,636,360
1,445,000
1,445,000
1,569,420
1,569,420
2,036,000
2,036,000
2,534,990
2,534,990
0
3,636,360
3,636,360
6,314,870
6,314,870
38,117,480
28,580,650
66,698,130
63,710
47,770
111,480
38,181,190
28,628,420
66,809,610
0]
66,809,61
129,141,69
195,951,300
0
0
1,000
1,000
821,280
821,280
6,314,870
6,314,870
38,117,480
28,580,650
66,698,130
63,710
47,770
111,480
38,181,190
28,628,420
66,809,610
0]
66,809,61
129,141,69
195,951,300
Interest Earning
Produced by Taxes
City of Lodi
Fiscal Year 2017-18
EXHIBIT G
AMOUNT SOURCE
A. NON-INTEREST TAX PROCEEDS
B. MINUS EXCLUSIONS
C. NET INVESTED TAXES
D. TOTAL NON-INTEREST BUDGET
E. TAX PROCEEDS AS PERCENT
OF BUDGET
F. INTEREST EARNINGS
G. AMOUNT OF INTEREST EARNED
FROM TAXES
H. AMOUNT OF INTEREST EARNED
ON NON -TAXES
I. Take the result of steps #G & I3
Copy on to Exhibit F
38,117,480
0
38,117,480
66,698,130
57.15%
111,480
63,710
r
47,770
"(Exhibit F)
(Exhibit D)
(A -B)
A(Exhibit F)
(C/D)
(E*F)
(F -G)
Fiscal Year 2017/18 Budget
General Fund Forecast
Presented by: Andrew Keys, Deputy City Manager
Agenda
• Council Requests
• Updated General Fund Forecast
— Changes from May 2nd
— Risks and Opportunities
• City wide Positions
• Major Capital Projects
COUNCIL REQUESTS
Historical General Fund Expenses
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
10 Year General Fund Expense by Type
9
•
2009
•
2010
•
2011
•
200112 1 2013
•
2014
2015
•
2016
2017
20118
—e—salaries
20,576,160
19424,353
( PERS 5,327,292 5,058,148
19,199,531
5,081,795
17,491, 826 18,307,093
4,900,883 4,939,753
19,186,132 16,829,581 20,073,317
5,171,442 5,220,421 5,965,872
—dr—Other Benefits 4,531,719 4,210,577
4,409,119
4,098,037 5,031,610
20,739,880
20,866,650
6,681,790
7,368,430
4,630,722 1 4,768834 4,852,418
- • 5upplies/5errices 5,583,351 5,557,282
5,577,924
5,535,178
5,053,172
5,491,608
5,309,490
5,612,940
5,912,470 6,323,257
10,061,210
8,813,210
1(—Operating Transfer s 6,1913,396 5,946,204
5,724,070
9,741,038
8,631,846
7,643,831
8,484409
9,067,107
8,079,580
7,687,550
—0—Capital 182,231 70,434
61,341
15,908
96,391
52,659
29,923
88,891
73,030
40,000
* This graph masks the PERS rate increases. Prior to 2012 the City paid 100% of the employer and
employee share of PERS rates. Since then employee groups converted to paying their share of PERS costs.
Comparison of Labor Costs
City
Labor Costs as % of General
Fund Expenditures
Elk Grove*
61%
Tracy
67%
Stockton
68%
Rio Vista
70%
Ripon
Modesto 71%
Lodi** 73%
Manteca 75%
Galt 79%
* Elk Grove is a contract City and also pays a Revenue Neutrality penalty on its property tax
from its General Fund equal to approximately 9% of the General Fund.
**Lodi uses a "whole people, whole places" approach to budgeting. This measure does not
account for personnel charges transferred to other funds.
Utility Intrafund Transfers
Department
2017 Actual
Electric Utility Capital
10,286,832
Water Utility Capital
5,400,000
Sewer Dump Fee Revenues
Year
Revenue
2008/09
2009/10
2010/11
2011/12
2012/13
172,960
153,507
164,216
180,381
170,824
2013/14 138,582
2014/15
125,425
2015/16 88,553
2016/17 Est.
80,000
2017/18 Budget 80,000
5 -YEAR GENERAL FUND FORECAST
Changes from May 2nd
• Cost of Service charges are included as follows:
— One time "catch up" from Development Services $1.6
Million
• Use: Additional PARS contribution
— On going cost of services assessed in FY 17/18 and
throughout the forecast
• Streets - $348,150 annually (50% charge of $174,080 in FY 17/18
made up in FY 18/19)
• Transit -$177,800 annually
• Pension Stabilization reserves (PARS) factored into
analysis
— Use of GF reserves prioritized over use of PARS
reserves
— Has approximately $1.25 Million benefit over
forecast term
Revenue Assumptions
Revenue Category
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
Property Taxes - Secured
Property Taxes - CFD [1]
Property Taxes - Other
Sales & Use Taxes [2]
Other Taxes
EU Pilot
Fees & Permits [3]
Property Tax in Lieu VLF
Intergovernmental - Other [4]
Services Charges [5]
Fines & Forfeitures [6]
Use of Money
Other Revenues
Transfer In
4.0% 3.7% 3.7% 3.7% 3.7% 3.7%
N/A N/A 51.6% 25.8% 26.4% 17.6%
5.3% 2.1% 1.8% 1.9% 1.9% 1.9%
-0.2% 2.3% 1.8% 1.9% 1.9% 1.9%
3.7% 1.8% 2.1% 1.7% 1.8% 1.6%
0.4% 0.5% 0.5% 0.5% 0.5% 0.5%
8.5% 1.5% 1.5% 1.5% 1.5% 1.5%
2.3% 2.0% 2.0% 2.0% 2.0% 2.0%
-11.8% 0.0% 0.0% 0.0% 0.0% 0.0%
23.1% -29.9% -20.0% 0.0% 0.0% 0.0%
27.1% 0.0% 0.0% 0.0% 0.0% 0.0%
2.1% 2.1% 2.1% 2.1% 2.1% 2.1%
4.9% 4.6% 1.3% 1.4% 1.4% 1.4%
7.4% 4.2% 4.2% 2.6% 1.2% 1.2%
[1] Some revenue may be received in Fiscal Year 2017/18. Future year's growth accounts for projected growth
and 2% CPI.
[2] The decrease in Fiscal Year 2017-18 is due to adjustments to the City's share of the County Pool as a result
of historical misallocations. Actual economic activity is projected to increase approximately 3.5%.
[3] FY 17/18 increase due to anticipated continued strong economic growth.
[4] FY 17/18 decrease is due to the elimination of Delta RATT and state mandate reimbursements.
[5] FY 17/18 Public Work fee revenue is anticipated to increase with the growing demand for development
related engineering services. A gradual reduction to more normal collection rate is projected.
[6] The FY 17/18 increase due to reduced utility late fee collections in FY 16/17 caused by the Munis conversion.
Expense Assumptions
Expense Category
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
Salaries [1]
PERS Normal Cost [1] [2]
PERS UAL [2]
Other Benefits [1]
Operations
Debt [3]
Transfers
0.7%
N/A
N/A
4.4%
-8.0%
0.0%
0.1%
1.5%
9.0%
22.0%
2.5%
4.5%
0.0%
0.5%
0.7%
7.8%
20.0%
2.5%
4.5%
-0.2%
0.5%
0.5%
13.2%
17.5%
2.5%
4.5%
0.0%
0.5%
0.5%
0.5%
12.7%
2.5%
4.5%
0.3%
0.5%
0.5%
0.5%
10.0%
2.5%
4.5%
-0.4%
0.5%
[1] FY 2017-18 based on current employee salaries with allowance for step increases to eligible employees. No
allowance is made for benefit changes, employee benefit choices or salary scale adjustments.
[2] PERS rates will be assessed differently in FY 17-18 with normal cost separated from UAL. Growth in PERS
outpaces salary growth due to UAL. Estimates are based on the high end of the cost increase range
provided by CaIPERS. More information is not available until the City's actuarial is completed in August.
[3] Based on actual debt service schedules for existing debt. Does not assume any refinancing opportunity.
CaIPERS Rate Assumptions
• Rate changes with three 5 year Ramp Up.
Valuation Date
Fiscal Year
for Required Contribution
Discount Rate
June 30, 2016
2018-19
7.375%
June 30, 2017
2019-20
7.25%
June 30, 2018
2020-21
7.00%
• Estimated impacts compared to 6/30/2015
valuation.
Normal Cost
UAL Payments
Valuation Date
Fiscal Year
Impact
Misc.
Plans
Safety
Plans
Misc.
Plans
Safety
Plans
6/30/2016
6/30/2017
6/30/2018
6/30/2019
6/30/2020
2018-19
2019-20
2020-21
2021-22
2022-23
0.25% - 0.75%
0.5% - 1.5%
1.0% - 3.0%
1.0% - 3.0%
1.0% - 3.0%
0.5% - 1.25%
1.0% - 2.5%
2.0% - 5.0%
2.0% - 5.0%
2.0% - 5.0%
2% - 3%
4% - 6%
10% - 15%
15% - 20%
20% - 25%
2% - 3%
4% - 6%
10% - 15%
15% - 20%
20% - 25%
6/30/2021
6/30/2022
2023-24
2024-25
1.0% - 3.0%
1.0% - 3.0%
2.0% - 5.0%
2.0% - 5.0%
25% - 30%
30% - 40%
25% - 30%
30% - 40%
Revenues
Revenues
Revenue
Budget
FY 16/17 E FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
Property Taxes - Secured 9,505,250 9,885,200 10,251,000 10,631,000 11,025,000 11,433,000 11,857,000
Property Taxes - CFD 0 0 244,300 370,400 466,100 589,200 692,900
Property Taxes - Other 355,290 374,000 382,000 389,000 397,000 405,000 413,000
Sales & Use Taxes 11,517,970 11,490,830 11,755,000 11,971,000 12,196,000 12,432,000 12,669,000
Other Taxes 4,402,000 4,564,000 4,646,000 4,744,000 4,826,000 4,911,000 4,990,000
EU Pilot 7,131,330 7,158,850 7,195,000 7,231,000 7,268,000 7,305,000 7,342,000
Fees & Permits 91,080 98,820 101,000 103,000 105,000 107,000 109,000
Property Tax in Lieu VLF 4,903,500 5,018,600 5,119,000 5,222,000 5,327,000 5,434,000 5,543,000
Intergovernmental- Other 680,830 600,410 601,000 601,000 601,000 601,000 601,000
Services Charges 1,218,980 1,500,330 1,051,000 841,000 841,000 841,000 841,000
Fines & Forfeitures 1,136,500 1,445,000 1,445,000 1,445,000 1,445,000 1,445,000 1,445,000
Use of Money 1,521,000 1,553,370 1,587,000 1,621,000 1,656,000 1,692,000 1,729,000
Other Revenues 366,620 384,500 403,000 409,000 415,000 421,000 427,000
New Cost of Service Chari 0 2,019,232 722,236 571,452 586,081 593,114 600,232
Pension Stabilization [1] 0 0 0 0 0 1,423,266 4,609,118
Transfer In 4,000,000 4,295,640 4,477,000 4,668,000 4,788,000 4,846,000 4,905,000
Total Revenue 46,830,350 50,388,782 49,979,536 50,817,852 51,942,181 54,478,580 58,773,250
Revenue Growth [2] N/A
4.0% 2.2%
2.0% 2.2%
2.1% 2.1%
[1] Pension Stabilization Revenue reduces overall fund resources.
[2] Excludes one time pension stabilization revenue, FY 17/18 and FY 18/19 historical Cost of service charges.
Expenses
City of Lodi
Expense and Fund Balance
Expense Category
Budget
FY 16/17 E FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
Salaries 20,731,010 20,866,650 21,180,000 21,329,000 21,436,000 21,544,000 21,652,000
PERS Normal Cost 6,681,790 2,708,300 2,953,000 3,184, 000 3,605,000 3,624,000 3,643,000
PERS UAL 0 4,660,130 5,686,000 6,824,000 8,019,000 9,038,000 9,942,000
Other Benefits 6,688,340 6,984,450 7,160, 000 7,339,000 7,523,000 7,712,000 7,905,000
Operations 10,700,690 9,844,550 10,288,000 10,751,000 11,235,000 11,741,000 12,270,000
Debt 1,001,850 1,002,070 1,002,250 999,760 999,310 1,002,560 998,250
Transfers 2,302,090 2,303,400 2,315,000 2,327,000 2,339,000 2,351,000 2,363,000
Pension Stabilization (PARS) 2,830,210 2,019,232
Total Expenditure
50, 935, 980 50, 388, 782 50, 584, 250 52, 753, 760 55,156, 310 57, 012, 560 58, 773, 250
Expenditure Growth
N/A
-1.1% 0.4% 4.3% 4.6%
3.4%
3.1%
Revenue - Expenditure (4,105,630)
0 (604,714) (1,935,908) (3,214,129) (2,533,980)
0
Total Fund Balance
8,288,731 8,288,731 7,684,017 5,748,109 2,533,980
0
0
Fund Balance
Category
Budget
FY 16/17 E FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
Catastrophic Reserve [1] 3,746,428 3,897,714 3,984,436 4,065,428 2,533,980
Economic Reserve [1] 3,746,428 3,897,714 3,699,580 1,682,681
Pension Stabilization Fund [2] 2,830,210 5,026,330 5,340,476 5,674,255 6,028,896 4,982,437 684,721
Unassigned Reserve 795,875 493,302
Available Resources [3] 11,118,941 13,315,061 13,024,492 11,422,364 8,562,877 4,982,437 684,721
Fund Balance %[4]
17.7% 16.4% 15.4% 11.3% 4.9%
0.0%
0.0%
[1] Per policy, this is set at 8% of revenue, catostrophic reserves are prioritize, then economic reserves, then unassigned.
[2] Note this reserve is held in a separate fund. The amounts shown represent the General Fund's portion of this reserve.
It is assumed to grow at 6.25%, consistent with the chosen investment options recent historical returns.
[3] The Pension Stabilization Reserve is not a General Fund Reserve but is an available resource to the General Fund.
[4] Calculated as % of Revenue using the economic, catstrophic and unassigned reserves only. The target is 16%.
Risks and Opportunities
Risks
Opportunities
PERS UAL/Other changes
Economic Development
Recession
Revenue Enhancement
Labor agreements
Cost of Services
Cost recovery studies
ADP/PARS Funding
Total Fund Blance
Impact of Potential New Revenue
Category
Budget
FY 16/17 E FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
Revenues
Potential New Revenue[1]
Expenses
46,830,350 50,388,782 49,979,536 50,817,852 51,942,181 54,478,580 58,773,250
N/A N/A 2,644,875 5,386,950 5,488,200 5,594,400 5,701,050
50,935,980 50,388,782 50,584,250 52,753,760 55,156,310 57,012,560 58,773,250
Revenue - Expenditure (4,105,630)
0 2,040,161 3,451,042 2,274,071 3,060,420 5,701,050
11,118,941 11,118,941 13,159,102 16,610,144 18,884,215 21,944,635 27,645,685
Catstrophic Reserves
Economic Reserves
PARS Reserves
Unassigned Reserve
3,746,428 4,031,103 3,998,363 4,065,428 4,155, 375 4,358,286 4,701,860
3,746,428 4,031,103 3,998,363 4,065,428 4,155, 375 4,358,286 4,701,860
2,830,210 5,026,330 5,340,476 5,674,255 6,028,896 6,405,702 6,806,059
3,626,085 3,056,736 5,162,376 8,479,287 10,573,466 13,228,062 18,241,965
Total Resources [2]
13, 949,151 16,145, 271 18, 499, 577 22, 284, 399 24, 913,112 28, 350, 337 34, 451, 744
Cumulative Impact [2] N/A
2,830,210 5,475,085 10, 862, 035 16, 350, 235 23, 367, 901 33, 767, 023
[1] Based on estimated Local Sales Tax measure at half -cent approved in November 2018.
[2[ Assumes no new service enhancements, PERS prepayments or changes to employee compensation.
*Council is not being asked to act upon a potential revenue enhancing measure at this time.
City Wide Positions
• The budget provides funding for 393 full-time
positions.
— Net reduction of 4 positions from FY 2016/17
Classification
Department
Number
Groundworker
Electric Utility
(1)
Senior Adminstrative Clerk
Fire
(1)
Accountant
Internal Services
1
Librarian
Library
(1)
Park Superintendent
PRCS
(1)
Recreation Superintendent
PRCS
(1)
Deputy PRCS Director
PRCS
1
Electrician
Water Services
(1)
Net position reduction:
(4)
Major Capital Projects
Project
Water Meter Phase 7
White Slough Imprvs
Ham and Century =I.
Rehabilitation
Transit Facility Imprvs
Guild/Victor Traffic Signal
Harney/Mills Traffic Signal
Library Imprvs
Underground System
Improvements
Killelea Bank 1 Replacement
MSC ADA and Gate Imprvs
Funding Source
FY 2017-18 Amount
561 Water Capital
$4,983,200
531 Wastewater Capital
$2,370,000
531 Wastewater Capital
$2,275,000
1
601 Transit Capital/
603 Prop 1B
$1,494,000
308 IMF Streets $500,000
305 TDA Streets
$160,000
410 Library Capital/ $500,000
431 General Fund Capital
501 EU Capital
$1,100,000
501 EU Capital $200,000
501 EU Capital
$200,000
Recommended Action
• Adopt a resolution approving the budget and
setting the appropriations limit for Fiscal Year
2017/18
Questions