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HomeMy WebLinkAboutMinutes - May 9, 2017 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, MAY 9, 2017 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, May 9, commencing at 7:01 a.m. Present: Council Member Chandler, Council Member Johnson, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Absent: Council Member Mounce Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo B. Topic(s) B-1 Receive Presentation Regarding Fiscal Year 2017/18 Special Revenue Funds Budget (CM) Deputy City Manager Andrew Keys provided a PowerPoint presentation regarding Fiscal Year 2017/18 Special Revenue Funds budget. Specific topics of discussion included Special Revenue Funds - Library, Transit, Streets, Fleet, Community Development, and Parks, Recreation and Cultural Services; Library Teen Scene funding; Library roof replacement funding; Library overview; Transit overview; Streets overview; Fleet overview; Community Development overview; and Parks, Recreation and Cultural Services overview. In response to Mayor Kuehne, City Manager Schwabauer provided details relating to the transfer of personnel from the Library to the Fire Department. He explained that a clerical position opened up in the Fire Department due to a retirement; the Library Director previously considered a shared position between Library and Fire; and, once the position came open, the Library Director offered to cut his staff by moving his Administrative Secretary to the Fire Department. This adjustment allowed the Fire Department to receive the assistance it needs and the Library to realize a savings of roughly $75,000 in the general fund. Mr. Schwabauer stated that going forward all vacancies will be reviewed and there will likely be a reduction in work force. In response to Council Member Johnson, Mr. Schwabauer stated staff is currently compiling information and data relating to early retirements; however, further analysis is needed on the costs associates with encouraging it because there is already a California Public Employees Retirement System (Cal -PERS) problem. Mr. Keys added that the analysis involves determining where eligible employees are in relation to the unfunded actuarial liability. In response to Mayor Pro Tempore Nakanishi, Mr. Schwabauer stated that staff has always calculated cost of services and charged some operations, but not all. This is the first year staff is proposing to charge all operations, not just the utility accounts. He explained that every division of the City receives some administrative support or service, such as Human Resource's assistance in hiring or firing employees or conducting background investigations, City Attorney in defending lawsuits, or the City Manager on budget -related issues, and each should pay its freight for that administrative cost. Mr. Keys added this is a standard practice in larger agencies. In response to Mayor Kuehne, Transportation Manager Paula Fernandez stated the City's buses are compressed natural gas and the City has not purchased electric buses because there have been some problems and higher costs associated with them. She stated Regional Transportation District has electric buses and has expressed concerns. In response to Mayor Pro Tempore Nakanishi, Mr. Schwabauer stated the Fleet Division 1 maintains vehicles in all departments, including Police, Fire, Electric Utility, Public Works, and Parks, Recreation, and Cultural Services. Fleet has an independent budget, based on what it anticipates spending to maintain each vehicle, which is allocated to each of the divisions it services. In response to Council Member Johnson, Budget Analyst Susan Bjork clarified that the $45,000 decrease in grant reimbursements in Community Development is for the Brownfield grant, not the Delta Regional Auto Theft Task Force. Mayor Pro Tempore Nakanishi asked for an explanation regarding the $1.6 million of prior years cost of services that was not transferred from Community Development to the general fund. Mr. Keys responded that developers, i.e. users of the service, were charged the base rate plus a percentage for cost of service overhead. That money was collected and left in Community Development's fund; instead, it should have been transferred into the general fund as originally intended. The calculation for the last 10 years equates to $1.6 million, and staff's recommendation is to deposit the money into the Cal -PERS stabilization fund -- one-time revenue for a one-time purpose. In response to Mayor Pro Tempore Nakanishi, Mr. Schwabauer stated the Library general fund transfer has been consistent for at least eight years and this is the first year there has been a drop in the transfer amount, which was driven by the transfers out and the Library's elimination of the clerical position. In response to Mayor Pro Tempore Nakanishi, Parks, Recreation, and Cultural Services Director Jeff Hood stated the general fund transfer is $96,000 less but is basically in line with previous years. He explained that, once the debt service for Hutchins Street Square is subtracted, the general fund is steady at a little under $3.2 million. Mr. Keys informed Council that the budget document will be released at the end of this week or early next week. C. Comments by Public on Non -Agenda Items None. D. Adjournment No action was taken by the City Council. The meeting was adjourned at 7:38 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk 2 CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM AGENDA TITLE: Receive Presentation Regarding Fiscal Year 2017/18 Special Revenue Funds Budget MEETING DATE: May 9, 2017 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive presentation regarding Fiscal Year 2017/18 Special Revenue Funds budget. BACKGROUND INFORMATION: This is the second item in a series on the 2017/18 budget. This morning, staff is seeking Council and public comment on the assumptions in the draft budget as we finalize it. The draft budget will be released and made available for public review at City Hall and online once finalized. This session will provide information on the Special Revenue funds of the City including the City operating funds for the Library, Transit, Streets, Fleet Maintenance, Community Development and Parks, Recreation and Cultural Services (PRCS). Staff will be highlighting key items within each business unit that affect the 2017/18 budget. New this year is the application of cost of services charges to Streets, Transit and Community Development. Staff is reviewing Council adopted fund balance policies and historical calculated cost of service charges that were not assessed in these areas and will bring an update to City Council for recommendation on potentially charging additional cost of services to these areas. Staff is also reviewing applying back charges for historical cost of service charges with an eye towards applying those revenues to the City's pension stabilization fund to reduce future General Fund Pension liability. At the regularly scheduled Shirtsleeve meeting on May 2, Council received a presentation on the General Fund budget, general economic conditions, and the Five -Year General Fund Forecast. On May 23, Council will hear an update on the City's utility fund budget in conjunction with the utility quarterly financial reports. FISCAL IMPACT: There is no impact from this informational presentation. FUNDING AVAILABLE: The table below shows the estimated revenues, expenditures and change in fund balance recommended by staff in the current draft of the Fiscal Year 2017/18 budget. As noted, additional cost of service modifications may alter the Streets, Transit and Community Development numbers in this budget. Attachment Andrew Keys, Deputy city Manager mai► APPROVED: ephen Sc ■auer, City Manager Fiscal Year 2017-18 Staff Recommendations Fund Group Revenues Expenditures Change in Fund Balance Library 51,327,990 $1,527,940 ($199,950) Transit $7.338.440 $6,737,080 601,360 Streets $8.901.140 $4.213.430 $4,687,710 Fleet $1,948,600 51.948,600 5 - Community Development $2,560,600 53.906,660 (51.346.060) PRCS $6,149,250 $6,160,970 (511, 720) Attachment Andrew Keys, Deputy city Manager mai► APPROVED: ephen Sc ■auer, City Manager Fiscal Year 2017/18 Special Revenue Funds Budget Presented By: Andrew Keys, Deputy City Manager Overview • Special Revenue Funds — Library — Transit — Streets — Fleet — Community Development — Parks, Recreation and Cultural Services Library • Revenues $99,110 lower than FY 2016/17 budget — General Fund transfer $1,271,730 • $102,010 reduction from prior year • 96% of total library funding • Expenditures $181,816 lower than FY 2016/17 budget — Eliminate Librarian Position — Transfer Administrative Secretary to Fire — Roof replacement project ($350k), additional $70k from general fund capital • Includes Teen Scene Project to be considered by Council on May 17 Library Teen Scene Funding Source Funding Amount Library Fund Balance Library Foundation Trustees DIVCA Total Project Cost (including contract, staff costs and contingencies) 337,000 260,000 100,000 230,000 $927,000 Library Roof Replacement Funding Library Fund Balance General Fund Capital Estimated Project Cost (including contract, staff costs and contingencies) Funding Amount $350,000 $70,000 $420,000 Library Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Library Fund Fund Balance Beginning Fund Balance Unreserved 182,490 264,822 457,902 667,289 199,950 Audited Audited Estimated 2014-15 2015-16 2016-17 2016-17 2017-18 Actuals Actuals Budget Actuals Budget Revenues 1,433,747 1,433,375 1,427,100 1,450,270 1,327,990 Expenditures 1,351,415 1,030,908 1,668,826 1,917,609 1,527,940 Net Difference (Revenues Less Expenditures) 82,332 402,467 (241,726) (467,339) (199,950) Fund Balance Ending Fund Balance Unreserved 264,822 667,289 216,176 199,950 Fund Balance as a percentage of revenue net General Fund Transfer: 0% Transit • Revenue $813,600 higher than FY 2016/17 budget — $150,000 increase in State Transit assistance funds — $400,000 increase in Measure K funds • Expenses $37,000 lower than FY 2016/17 budget — Equipment and vehicles - $551k higher — Capital projects - $738k higher • Bus shelter/stop improvements ($270k) • Facility upgrades ($396k) • Parking structure improvements($300k) • Security upgrades ($528k) • Fleet facility equip ($50k) • Bus purchase ($1.6M) • Cost of Services $177,800 Transit Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Transit Fund Fund Balance (Net Assets) Beginning Fund Balance (Net Assets) Unreserved Audited Audited Estimated 2014-15 2015-16 2016-17 2016-17 2017-18 Actuals * Actuals Budget Actuals Budget 4,039,137 4,029,800 8,603,244 4,844,101 5,477,163 Revenues 6,567,876 4,449,294 6,524,840 7,396,090 7,338,440 Expenditures 6,577,213 3,634,993 6,774,306 6,763,028 6,737,080 Net Difference (Revenues Less Expenditures) (9,337) 814,301 (249,466) 633,062 601,360 Fund Balance (Net Assets) Ending Fund Balance (Net Assets) Unreserved 4,029,800 4,844,101 8,353,778 5,477,163 6,078,523 *Auditing adjustment in expenditures to recognize in correct year Fund Balance as a percentage of revenue: 83% Streets • Revenues $5.9M lower than FY 2016/17 budget — Old Gas tax - $22k higher — New Gas tax/Vehicle Registration Fees - $440k new revenue —TDA - $200k higher — Development fees - $425k higher — Federal grants - $9.7m lower — State special grants - $2.8m higher Streets • Expenditures $11.2M lower than FY 2016/17 — Supplies/materials - $307k lower — Capital Projects - $11.1m lower • Signals ($900k) • Signal maintenance ($150k) • Sealing/striping ($150k) • Sidewalk repairs ($100k) • Pavement maintenance ($100k) • Frontage wall repair/maintenance ($50k) • Street improvements ($95k) — Cost of Services (50% of eligible cost) $174,080 Streets Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Street Fund Fund Balance Audited Audited Estimated 2014-15 2015-16 2016-17 2016-17 2017-18 Actuals Actuals Budget Actuals Budget Beginning Fund Balance 3,987,299 3,192,312 2,535,772 3,574,516 3,181,006 Revenues Expenditures Net Difference (Revenues Less Expenditures) Fund Balance 5,046,221 8,502,180 14,834,980 12,030,070 8,901,140 5,841,208 8,119,976 15,396,854 12,423,580 4,213,430 (794,987) 382,204 (561,874) (393,510) 4,687,710 Ending Fund Balance 3,192,312 3,574,516 1,973,898 3,181,006 7,868,716 Fund Balance as a percentage of revenue: 88% Fleet • Revenues and expenses $61,670 higher than FY 2016/17 budget — Salary/benefits - $29k higher — Supplies/materials - $32k higher Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Fleet Services Internal Services Fund Fund Balance (Net Assets) Beginning Fund Balance (Net Assets) Unreserved 48,971 123,676 158,536 137,285 137,285 Audited Audited Estimated 2014-15 2015-16 2016-17 2016-17 2017-18 Actuals Actuals Budget Actuals Budget Revenues 1,639,276 1,739,187 1,886,930 1,885,350 1,948,600 Expenditures 1,564,571 1,725,578 1,886,930 1,885,350 1,948,600 Net Difference (Revenues Less Expenditures) 74,705 13,609 Fund Balance (Net Assets) Ending Fund Balance (Net Assets) Unreserved 123,676 137,285 158,536 137,285 137,285 Fund Balance as a percentage of expense: 7% Community Development • Revenues $191,840 higher than FY 2016/17 budget — Permit fees - $267k increase — Fire fees - $67k increase — Grant reimbursements - $45k decrease — Federal grants - $162k decrease Community Development • Expenditures $1.6m higher than FY 2016/17 — Salary & benefits - $3k decrease — Service/supply - $197 decrease — Transfer out — $1.8m increase • $192,172 of current year cost of service • $1.6 M of prior years cost of services charges collected from rate payers but not transferred to the General Fund • Prior years cost of services transfers will be dedicated to PERS Stabilization Fund Community Development Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Community Development Fund Fund Balance Beginning Fund Balance Unreserved Audited Audited Estimated 2014-15 2015-16 2016-17 2016-17 2017-18 Actuals Actuals Budget Actuals Budget 1,108,043 1,474,880 1,812,860 2,423,363 3,033,371 Revenues 1,595,654 2,584,987 2,368,760 2,666,740 2,560,600 Expenditures 1,228,817 1,636,504 2,259,682 2,056,732 3,906,660 Net Difference (Revenues Less Expenditures) 366,837 948,483 109,078 610,008 (1,346,060) Fund Balance Ending Fund Balance Unreserved 1,474,880 2,423,363 1,921,938 3,033,371 1,687,311 Fund Balance as a percentage of expense including transfers* *Historical cost of service allocations are shown as expenses in the current year but are netted out of this calculation. 75% Parks, Rec & Cultural Services • Revenues $132,380 lower than FY 2016/17 budget — General Fund transfer of $3,853,240 • $96,560 lower than prior year • 63% of total funding — Other programs showing net decrease in revenue streams ($35,820) • Adult Sports - $19,000 lower • Box Office — $17,000 lower — Overall approximately 37% direct cost recovery is projected Parks, Rec & Cultural Services • Expenditures $397,668 lower than FY 2016/17 budget — Salary & benefits - $29k lower — Supplies/materials - $138k lower — Transfer out - $230k lower Parks, Rec & Cultural Services Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Parks, Recreation & Cultural Svcs Fund Fund Balance Beginning Fund Balance Unreserved (94,785) 229,264 52,994 387,390 224,442 Audited Audited Estimated 2014-15 2015-16 2016-17 2016-17 2017-18 Actuals Actuals Budget Actuals Budget Revenues 5,687,681 5,870,743 6,281,630 6,256,350 6,149,250 Expenditures 5,363,632 5,712,617 6,558,638 6,419,298 6,160,970 Net Difference (Revenues Less Expenditures) 324,049 158,126 (277,008) (162,948) (11,720) Fund Balance Ending Fund Balance Unreserved 229,264 387,390 (224,014) 224,442 212,722 Fund Balance as a percentage of revenue net General Fund Transfer: 9% QUESTIONS?