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BACKGROUND
<br /> Staff regularly monitors expenditures, cautiously forecasts revenues, and makes
<br /> recommendations to address changes as quickly as possible to maintain a balanced
<br /> Budget. The Midyear Budget report helps staff address budget variances in a timely
<br /> manner.
<br /> DISCUSSION
<br /> General Fund Overview
<br /> As described below, staff recommends decreasing revenue estimates by $9 million,
<br /> allocating $1.2 million from the reserve established to provide additional funding to the
<br /> Livermore Pleasanton Fire Department (LPFD) Workers Compensation Fund',
<br /> decreasing net transfers by $2.1 million ($1 million from the CIPR and $1.1 million from
<br /> the Rainy Day Fund), and decreasing expenditure estimates by approximately $5 million
<br /> (including reducing Repair and Replacement Fund allocations by $1 million and
<br /> reducing the General Fund contingency by $0.8 million). As a result of these changes,
<br /> staff currently expect that the General Fund will be balanced at the end FY 2020/21.
<br /> Table 1. General Fund Overview
<br /> FY 2020/21
<br /> FY 2019/20 Adjusted Recommended Mid-Year
<br /> Actual Budget Adjustments Budget
<br /> Revenues $124,353,299 $131,011,958 ($9,071,943) $121,940,015
<br /> Use of GF LPFD Workers Comp Reserve 1,230,000 1,230,000
<br /> Net Transfers (6,987,676) (8,590,565) 2,147,025 (6,443,540)
<br /> Expenditures (113,806,097), (121,683,240) 4,956,766 (116,726,474)
<br /> Difference $3,559,526 $738,153 ($738,153) $0
<br /> General Fund Revenues - Table 2 identifies the total recommended net revenue
<br /> decreases of approximately $9.1 million based on revenues received to date. Major
<br /> revenue increases include: Property Taxes ($1 million). Property taxes continue to
<br /> increase as a result of increased property values that are realized after the sale of the
<br /> property and newly constructed properties added to the property tax roll.
<br /> These revenue increases are off-set by the following anticipated major revenue
<br /> decreases all of which is related to COVID related restrictions: Sales Tax ($0.8 million),
<br /> Transient Occupancy Taxes ($3.8 million), Development Services fees ($0.9 million),
<br /> Recreation fees ($3.8 million), and Planning reimbursements that are off-set by reduced
<br /> expenditures ($0.5 million).
<br /> The $781,950 reduction to Sales Tax revenues primarily reflects declines in sales tax
<br /> receipts related to general consumer goods, restaurants and hotels, and fuel and
<br /> service stations that have resulted in sales tax revenues declining more than originally
<br /> projected as a result of COVID related restrictions. These reductions are somewhat off-
<br /> 1 The City's FY 2017/18 year-end General Fund surplus included $1.23 million to increase LPFD's
<br /> Workers Compensation Fund reserves required to maintain reserves equal to at least 70% of claims
<br /> payable Workers Compensation. Each partner city is equally responsible for funding LPFD's Workers
<br /> Compensation expenses and help maintain reserves. The City decided to actually allocate the $1.2
<br /> million allocation to LPFD's Workers Compensation reserves when the City of Livermore allocated its $1.2
<br /> million, which it did this fiscal year.
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