CCMIN03032020 - Laserfiche WebLink

City Manager Fialho provided a recap of the budget process for the benefit of the public. He noted the FY 2019/20 Mid-year Budget Report includes adjustments to the General Fund, Enterprise Funds, and Internal Services Funds to end the fiscal year balanced and in alignment with fiscal policies. City Manager Fialho provided a brief overview of the General Fund which indicates revenues are projected to increase by $2.2 million and expenditures are projected to decrease by %1.6 million with an anticipated a $3.98 million surplus by the end of the fiscal year. He noted a reduction in projected Sales Tax Revenue, Franchise Fees, and Documentary Transfer Tax. He believes the City over projected the Hotel Tax and therefore it is not indicative of any trend. City Manager Fialho reported staff projects to end the fiscal year with $130 million in revenue which over the last 10 years reflects a 53% increase in revenue. He provided a review of Property Tax Revenue and Sales Tax Revenue trendsand noted Sales Tax Revenue has decreased due to online sales and is not unique to Pleasanton. City Manager Fialho reported on General Fund Personnel and Non-Personnel Expenditures. He noted the mid-year budget adjustment for Personnel does not include new positions but the previously approved budget does include three (3) new positions including a Community Service Officer, Fire Inspector, and Architect. He reported on Non-Personnel expenses which are offset by a significant reduction in contingency including expanded custodial services, increasing water rates from Zone 7 and electrical costs. City Manager Fialho reported on the General Fund Surplus and noted staff proposes allocating $2 million to the General Fund, $1 million to Capital Improvements Plan (CIP) Reserves, and $980,000 to the Repair and Replacement (R&R) Reserves. He advised if approved by City Council, the General Fund Reserve will equal 25.7% of the operating expenses which adheres to the City Policy which requires a minimum of 20% and a goal of 25%. City Manager Fialho reported on the Water Operations and Maintenance Fund and Sewer Operations and Maintenance Fund and noted the City is above the policy threshold. He noted the City is working on water and sewer rates to fund necessary CIP improvements or to offset some of the rate increases. He reported a Net Revenue increase of$65,000 is due to an accounting reimbursement from the sewer fund. He noted part of the expense decrease is due to staff attrition, savings reductions, and contingency. He recapped two (2) positions were added to the baseline budget which includes a Utilities Planning Manager and a Utilities Maintenance Supervisor. City Manager Fialho reported the Internal Services Fund is being adjusted by $2.2 million due to an increase in workers' compensation claims, R&R Fund Carry-Forward, insurance premium increases, a City Council approved transfer out to the CIP Fund, and public art acquisition. He reported it is the staff's recommendation City Council approve the item. In response to Councilmember Narum's inquiry, City Manager Fialho reported the City has promoted "shop local" periodically in the City's newsletter and there is a goal to promote it more robustly citywide. Deputy City Manager Pamela Ott reported there is a Business Support Program to support "shop local" which includes a local preference policy which was reviewed by City Council and is currently in development of a "support local" campaign which will roll out later this year. In response to Mayor Thorne's inquiry, City Manager Fialho reported the Point of Sale legislation is in the legislative cycle but if passed, could be a big windfall for Pleasanton. City Council Minutes Page 8 of 9 March 3, 2020