HomeMy WebLinkAboutMinutes - May 8, 2018 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, MAY 8, 2018
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday,
May 8, 2018, commencing at 7:02 a.m.
Present: Council Member Chandler, Council Member Johnson, Council Member Kuehne, and Mayor
Nakanishi
Absent: Mayor Pro Tempore Mounce
Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo
NOTE: Council Member Johnson participated in the meeting via teleconference and left the meeting at
7:53 a.m.
B. Topic(s)
B-1 Receive Presentation Regarding Fiscal Year 2018/19 General Fund Budget and Five-Year
General Fund Forecast (CM)
Deputy City Manager Andrew Keys provided a PowerPoint presentation regarding Fiscal Year 2018/19
budget and General Fund forecast. Specific topics of discussion included FY 2018/19 revenues,
revenue trends, FY 2018/19 expenses, key inputs, Vehicle Replacement fund, revenue five-year
forecast, forecast assumptions, forecast expenses and fund balance, available resources in forecast,
and summary. He stated the City's proposed budget is in a slightly better position than last year and
that revenues are growing at a healthy rate and expenses growing faster than desired, due to factors
outside of the City's control, including the California Public Employees' Retirement System situation.
Further, he stated the economy is improving with the lowest unemployment rate since 2000.
Mayor Nakanishi questioned if staff has statistical information on how many people in Lodi have lived in
their homes for a long time as it relates to property tax rates. City Manager Schwabauer stated Lodi has
a 35 percent homeowner rate, which means that a 30-year mortgage has been paid off and the home is
owned by the property owner. He stated that staff will look into it further and provide Council with the
information.
Myrna Wetzel stated she understands the cost to fully renovate Candy Cane Park is extensive;
however, she questioned whether the City could forego a complete overhaul of the park and, instead,
install new playground equipment in the meantime. She pointed out money is being spent on other
parks, but not on Candy Cane Park. Mr. Schwabauer responded Candy Cane Park does not meet
Americans with Disabilities Act (ADA) standards and installing new playground equipment would trigger
ADA requirements, which would be extremely expensive.
C. Comments by Public on Non-Agenda Items
None.
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 8:12 a.m.
ATTEST:
Jennifer M. Ferraiolo
City Clerk
1
Fiscal Year 2018/19 Budget
General Fund Forecast
Presented by: Andrew Keys, Deputy City Manager
Agenda
•Fiscal Year 2018-19
- Assumptions
- Revenues
- Expenses by Department
- Expenses by Type
•Key Inputs
•Five Year Forecast
- Assumptions
- Projection
- Risks/Known Challenges
- Opportunities
FY 18-19 Revenues
$51,300,380
23.7%
21.7%
14.0%
10.5%
9.7%
4.6%
3.2%
3.1% 2.8% 2.7% 2.0% 1.9%
Sales Tax - $12,172,600
Property Tax - $11,121,750
Lodi Electric PILOT - $7,197,380
Property Tax in Lieu - $5,374,070
Cost of Services - $4,994,780
Franchise Fees - $2,369,000
Rent & Investment - $1,647,830
Revenue Trends
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
YE Est
2019
Proj
Property Tax - 14% Growth
Sales Tax - 76% Growth
Property Tax In Lieu VLF - 19%
Growth
Revenue Trends
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
YE Est
2019
Proj
TOT - 140% Growth
Business Tax - 32% Growth
FY 18-19 Expenses
$51,300,380
4.4%
8.2%
40.6% 23.6%
4.9% 7.6%
2.6%
8.1%
FY 18-19 Expenditures by Function
Gov't and Admin -
$2,263,640
Internal Services -
$4,231,320
Police Department -
$20,852,850
Fire Department -
$12,088,480
FY 18-19 Expenses
$51,300,380
41.0%
5.4% 10.8%
13.8%
21.8%
2.1% 5.1%
FY 18-19 General Fund Expenditures by Type
Salary - $21,036,930
PERS Normal Cost -
$2,788,360
PERS UAL - $5,522,420
Other Benefits -
$7,067,090
Operations -
$11,165,480
Key Inputs FY 18-19
•Fire Engine 1 browned out 50%
•Police $100,000 to Vehicle Replacement
•Fire $250,000 to Vehicle Replacement
•Fire $170,000 to Equipment Replacement
•Continued $1.3m MOE to Measure K
•$435,000 Capital Contribution
•$265,000 IT Infrastructure Contribution
•$130,000 for 2018 elections costs
Vehicle Replacement Fund
Vehicle
Replacement Funds
FY 16/17
Fund
Balance
FY 17/18
Est Rev
FY 17/18
Est Exp
FY 17/18
YE Est
Fund
Target *
Over/
(Under)
Target
Comm. Dev $42,694 $21,000 $0 $63,694 $23,308 $40,386
Fire Dept. $264,229 $100,000 $0 $364,229 $2,314,554 ($1,950,325)
Police Dept. $867,444 $27,540 $143,020 $894,984 $1,656,873 ($761,889)
PRCS $384,636 $61,700 $60,000 $446,336 $974,772 ($528,436)
PW - GF $97,739 $0 $0 $97,739 $165,537 ($67,798)
Grand Total $1,656,742 $210,240 $203,020 $1,866,982 $5,135,044 ($3,268,062)
* Fund Target is the annualized depreciated value of vehicle stock that should be set aside for future
replacements using Fleet Services estimated useful life expectancies by vehicle type.
5 Year Forecast - Revenue
Revenue Category FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Property Taxes - Secured 3.1%3.7%3.7%3.7%3.7%3.7%
Property Taxes - CFD [1]N/A 75.0%45.0%35.0%21.0%15.0%
Property Taxes - Other 0.0%1.8%1.8%1.8%1.7%1.8%
Sales & Use Taxes 6.1%2.0%2.0%2.0%2.0%2.0%
Other Taxes 2.4%2.0%2.0%2.0%2.0%2.0%
EU Pilot 0.5%0.5%0.5%0.5%0.5%0.5%
Licenses & Permits [2]27.0%2.0%2.0%2.0%2.0%2.0%
Fines & Forfeitures 8.9%2.0%2.0%2.0%2.0%2.0%
Use of Money 6.1%2.0%2.0%2.0%2.0%2.0%
Misc Revenues -1.5%0.0%0.0%0.0%0.0%0.0%
Property Tax in Lieu VLF 4.5%3.7%3.7%3.7%3.7%3.7%
Intergovernmental - Other 4.5%0.0%0.0%0.0%0.0%0.0%
Charges for Services [3]-20.2%1.0%1.0%1.0%1.0%1.0%
New Cost of Services 0.0%0.0%0.0%0.0%0.0%N/A
Transfers In 1.2%1.5%1.5%1.5%1.5%1.5%
[1] Includes continued addition of new units and CPI adjustment. FY 18/19 based on actual eligible units
[2] Increase due to enactment of alarm ordinance.
[3] Decrease due to substantial lots available for development reducing demand for services.
Assumptions
5 Year Forecast - Revenue
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Revenue YE Est.Proposed Projected Projected Projected Projected Projected
Property Taxes - Secured 10,026,300 10,341,750 10,725,000 11,122,000 11,534,000 11,961,000 12,404,000
Property Taxes - CFD 43,700 150,000 262,000 379,000 511,000 618,000 710,000
Property Taxes - Other 390,000 390,000 397,000 404,000 412,000 420,000 428,000
Sales & Use Taxes 12,368,100 13,122,600 13,386,000 13,654,000 13,928,000 14,207,000 14,492,000
Other Taxes 3,892,000 3,984,000 4,064,000 4,146,000 4,229,000 4,314,000 4,401,000
EU Pilot 7,158,850 7,197,380 7,234,000 7,271,000 7,308,000 7,345,000 7,382,000
Licenses & Permits 80,320 101,970 105,000 108,000 111,000 114,000 117,000
Fines & Forfeitures 1,328,500 1,447,050 1,476,000 1,506,000 1,537,000 1,568,000 1,600,000
Use of Money 1,553,200 1,647,830 1,681,000 1,715,000 1,750,000 1,785,000 1,821,000
Misc Revenues 406,660 400,660 401,000 401,000 401,000 401,000 401,000
Property Tax in Lieu VLF 5,142,654 5,374,070 5,573,000 5,780,000 5,994,000 6,216,000 6,446,000
Intergovernmental - Other 600,310 644,310 645,000 645,000 645,000 645,000 645,000
Charges for Services 1,885,310 1,503,980 1,520,000 1,536,000 1,552,000 1,568,000 1,584,000
New Cost of Services 2,019,232 168,370 0 0 0 0 0
Transfer In 4,295,640 4,826,410 4,827,000 4,827,000 4,827,000 4,827,000 4,827,000
Total Revenue 51,190,776 51,300,380 52,296,000 53,494,000 54,739,000 55,989,000 57,258,000
Revenue Growth [1]N/A 4.0%2.3%2.3%2.3%2.3%2.3%
Revenue Projections
5 Year Forecast
Expense Category FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Salaries [1]N/A 2.0%2.0%2.0%2.0%2.0%
PERS Normal Cost [1]
PERS UAL
Other Benefits [1]4.9%4.5%4.5%4.5%4.5%4.5%
Operations 4.2%4.5%4.5%4.5%4.5%4.5%
Debt [2]
Transfers 13.7%0.5%0.5%0.5%0.5%0.5%
[1] FY 2018-19 based on current employee salaries with eligible step increase allowances. No change
in labor agreements is assumed. Minor decrease in vacant positions is assumed.
[2] Based on existing debt service schedules . Does not assume any refinancing opportunity in FY 2021.
Assumptions
Based on Projections in June 30, 2016 Actuarial Report
Per Existing Debt Schedule
5 Year Forecast
[1] Negative is a draw to pay for pension costs in that Fiscal Year.
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
YE Est.Proposed Projected Projected Projected Projected Projected
Salaries 20,632,380 21,036,930 21,458,000 21,888,000 22,326,000 22,773,000 23,229,000
PERS Normal Cost 2,648,120 2,788,360 3,325,990 3,720,960 3,795,420 3,871,410 3,948,930
PERS UAL 4,503,000 5,522,420 6,517,012 7,237,053 8,162,025 8,974,363 9,535,328
Other Benefits 6,722,800 7,067,090 7,386,000 7,719,000 8,067,000 8,431,000 8,811,000
Operations 10,555,500 10,997,110 11,492,000 12,010,000 12,551,000 13,116,000 13,707,000
Debt 1,002,070 1,101,430 999,760 999,310 1,002,560 998,250 998,480
Transfers 2,303,400 2,618,670 2,632,000 2,646,000 2,660,000 2,674,000 2,688,000
Pension Stabilization (PARS) [1]2,019,230 168,370 - - - (4,030,760) (5,659,738)
Total Expenditure 50,386,500 51,300,380 53,810,762 56,220,323 58,564,005 56,807,263 57,258,000
Expenditure Growth (less PARS N/A 5.7%5.2%4.5%4.2%3.9%3.4%
Revenue - Expenditure (less PARS)804,276 0 (1,514,762)(2,726,323)(3,825,005)(4,849,023)(5,659,738)
Total Fund Balance (w/o PARS)8,884,353 8,884,353 7,369,591 4,643,268 818,263 0 0
Expenses and Fund Balance
5 Year Forecast
[2] Per policy, this is set at 8% of revenue, catostrophic reserves are prioritize, then economic reserves, then unassigned.
[3] Note this reserve is held in an IRS Section 115 Trust account for pensions only. It is assumed to earn 6.25% annually.
[4] Calculated as % of Revenue using the economic and catstrophic reserves only. The target is 16%.
Category FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Catastrophic Reserve [2]3,933,724 4,090,561 4,183,680 4,279,520 818,263 0 0
Economic Reserve [2]3,933,724 4,090,561 3,185,911 363,748 0 0 0
Pension Stabilization Fund [3]9,200,000 10,740,000 11,410,000 12,120,000 12,870,000 9,390,000 3,960,000
DIVCA 364,528 382,000 403,000 426,000 452,000 480,000 508,000
Available Resources 17,431,975 19,303,122 19,182,591 17,189,268 14,140,263 9,870,000 4,468,000
Fund Balance % [4]16.0%16.0%14.1%8.7%1.5%0.0%0.0%
Available Resources
Summary
•Continued strong growth
•Prudent financial planning has enhanced the long term outlook
•Vacancies continue to provide Pension Stabilization funding
•Fiscal stewardship by of staff has led to strong budget results
•PERS continues to grow faster than revenues
•Recession will substantially impact fiscal sustainability
•-1% revenue in 2018/19 has a $2.3 Million impact on revenues over 5 years
•A sustained -1% drop has $10.5 Million impact