CCMIN031715 - Laserfiche WebLink

AYES: Councilmembers Narum, Olson, Pentin, Vice Mayor Brown NOES: None ABSENT: Mayor Thorne 12. Consider adoption of a resolution accepting the Midyear FY 2014-15 Operating Budget and amending said budget accordingly Director of Finance Tina Olson presented the Midyear Operating Budget and related amendments. She reviewed the General Fund, including revenue adjustments of $2.9 million. Total adjusted revenues are estimated at $100.3 million, with an ending General Fund balance of $2.5 million. The most significant revenue increases were seen in Property Taxes with a $1 billion increase in assessed valuations from the 2013-14 FY due to several new projects and valuation updates on those properties affected by Proposition 8. Sales Tax revenues are projected to increase an additional $550,000 primarily due to auto and restaurant sales. Other notable revenue increases include Hotel-Motel Taxes ($300,000), Recreation fees ($104,000), interest income and rent ($400,000), subventions and grants ($122,000), franchise fees ($60,000), refunds and reimbursements ($15,000), and Library revenues ($23,800). The sole revenue decrease adjustment is to fines and forfeitures, which is being reduced by $100,000. Revenue trends reveal the first increase in Sales Tax revenues over the previous 2006-07 high and Property Tax revenues of the previous high in 2008-09. General Fund expenditure adjustments include a net increase in personnel costs ($367,000) for 3 full- time equivalent positions, a limited-term Special Projects Coordinator and an increase in the City Attorney's caseload. Non-personnel expenditure adjustments include reduced contractual expenses for both Building Inspectors and Human Resource consultants, various increases in non-labor expenses like Recreation Instructors, expenses for the new telephone system, website improvements and upgrades to the library. Expenditure adjustments total a net increase of$277,455. Of the projected $2.5 million General Fund surplus, staff is proposing to allocate $326,000 to the 10% Reserve for Economic Uncertainties, $1.2 million to the Unassigned General Fund balance and $1 million to the Repair and Replacement Fund. With these allocations, the 10% Reserve for Economic Uncertainties and Unassigned General Fund combined balance totals $16.5 million which is approximately $2.5 million shy of the goal of maintaining 20% in operating reserves. Ms. Olson very briefly reviewed notable highlights of the remaining funds. Adjustments to the Water Operations Fund include increased transfers of $44,626 to the PERS Rate Stabilization Fund and $24,124 to the Repair and Replacement Fund. Adjustments to the Sewer Fund included decreased personnel costs due to vacancies as well as transfers to the PERS Rate Stabilization Fund of $20,995 and Repair and Replacement Fund of $12,693. Adjustments to the Repair and Replacement Fund include revenue increases already detailed from other funds, expenditure increases for the outfitting of leased city vehicles, a new Fire Department vehicle, street light pole replacements and installation of traffic cameras. The net fund balance will increase $596,000. The Golf Course Operations Fund is expected to end the year with a fund balance of $115,000 due to a comparable decrease in expenditures related to supplies, maintenance, food and beverage costs and labor. Ms. Olson explained that staff expects to close the books on the Operating Budget in November and return to Council with a recommendation to allocate any additional surpluses to either the Repair & Replacement or PERS Rate Stabilization Funds. Audited financial states should come before the City Council in January 2016. Councilmember Olson asked about transfers to the PERS Stabilization Fund from the General Fund. Ms. Olson explained that these are still conservative estimates. After the close of the Fiscal Year, staff will return with a recommendation to fund the PERS Stabilization Fund. City Council Minutes Page 5 of 9 March 17, 2015