Loading...
HomeMy WebLinkAbout101-Budget Adoption.pdf SARATOGA CITY COUNCIL MEETING DATE: June 2, 2010 AGENDA ITEM: DEPARTMENT: Finance & Admin Services CITY MANAGER: Dave Anderson PREPARED BY: Mary Furey DIRECTOR: Mary Furey SUBJECT: Adoption of Fiscal Year 2010/11 Operating & Capital Budget and the Environmental Impact Assessment for new CIP projects RECOMMENDED ACTIONS 1. Adopt resolution approving the Proposed FY 2010/11 Operating and Capital Budgets, directing staff to incorporate within the final adopted budget any changes related to minor corrections, carryforward appropriations, refined estimates, grant approvals, claim reimbursements, pass-through appropriations, or additional direction from Council upon adoption of the budget. 2. Adopt attached Environmental Impact Assessment for new projects included in the FY 2010/11 CIP update. BACKGROUND The City’s Proposed Operating and Capital Budgets reflect both revenue and expenditure appropriations which provide for the City’s service operations, administration, obligations, and infrastructure improvement projects. The City’s Operating Budget document is structured into a departmental format which defines departmental oversight, key program services, and significant projects or initiatives for the fiscal year. Summary level revenue and expenditure budget appropriations and assigned personnel schedules for proposed, current and prior years are included within each departmental program to identify the resources used to provide these services and operations, and for historical reference. The Financial Summaries section of the Operating Budget document compiles the individual financial and staffing information into summary schedules to provide users with an consolidated view of funding sources and uses from different perspectives, including departmental, fund type, and category. The City’s Capital Budget document is structured into four program areas, (Streets, Parks & Trails, Facilities, and Administrative Improvement Projects) which are further categorized by either the type of infrastructure improvement in the Streets and Administrative Improvement programs, or by site in the Parks & Trails and Facilities programs. The Capital Improvement Plan represents a multi-year work plan for major capital expenditures and related funding sources, to improve and maintain the various types of city infrastructure. Attached to this report, for Council adoption, is an Environmental Impact Assessment report in compliance with the California Environmental Quality Act (CEQA) requirement to ensure an assessment of the environmental impacts of new projects has been made by the governing body. REPORT DISCUSSION Budget Status A public hearing was held on May 19, 2010 to review the City of Saratoga’s proposed operating and capital budgets and obtain community input. The FY 2010/11 Proposed Operating Budget sustains service levels, operations, and obligations as are currently in place, with a few exceptions. Staff time will be impacted with the reduction of six full-time staff to part-time status, and from a 3 day furlough for the remainder of the City’s full-time staff. Overtime and temporary staff hours were also reduced. These reductions will impact services and workload, particularly in the City Manager’s Office where three of the FTE reductions will occur. There will be numerous operational changes, including two that will be visible to the public. The Saratogan newsletter will no longer be delivered as a stand-alone mailing to residents; it will instead be included in the City’s recreation guide and mailed to residents on the three times a year recreation guide schedule. A second noticeable change will come from restricting public notifications published in the newspaper to those notices that are legally required to be published, such as ordinances and fee hearings. Beginning next year, notifications such as the annual public hearing for the budget will be posted at City Hall and on the City’s website in order to reduce expenses. In addition to new reductions, most prior year operating budget expenditure reductions will continue, most notable are the elimination of: a Planner and Building Inspector position in Community Development; a Recreation Coordinator position in Recreation; and the reduction of the City Manager’s Executive Assistant from full-time to three-quarter time. The city continues to under-fill the IT Technician position with a temporary IT Intern for the third consecutive fiscal year, and a temporary half-time Sr. Accountant backfills the eliminated Accounting Supervisor position. Staff continues to seek out opportunities to increase operational efficiencies and reduce service costs on an ongoing basis, in order to provide the best use of City resources. Budget Appropriations The Operating & Capital Budget’s Financial Summaries include schedules which illustrate summary level revenue and expenditures information. This first schedule on the following page illustrates the Proposed Budget’s total activity by fund, categorized by fund group, beginning with the estimated July 1, 2010 fund balance, adding and subtracting all budgeted activity, and ending with the estimated year end fund balance at June 30, 2011. This Total Fund Activity Summary schedule categorizes the City’s different funds by function. Operating Funds support the City’s general operations, restricted revenue programs and services, and internal support services. Debt Service Funds account for the funding and payment of the City’s bond debt, and Trust & Agency Funds account for funds held in a trustee capacity; not to be used for City purposes. Capital Funds are used to account for major acquisition and construction of asset expenditures, in order to separate one-time activity from ongoing operational activities. As shown, the Operating Budget’s Total Expenditures and Transfers-Out exceed Total Revenues and Transfers-In. This is a consequence in part, of transferring out prior year operating fund surpluses to the Capital Project Funds. Additionally, other fund expenditures may be budgeted higher than revenues in some budget years. This would occur for example, in a replacement Internal Service Fund, where funding receipts may be less than amounts budgeted for replacement during any given fiscal year. It will also occur if the Internal Service Fund (ISF) includes current year contingency funding which may or may not be expended. This is typical in the Building Maintenance ISF to allow for urgent repairs to be made if needed, while avoiding a continual build-up of fund balance if repairs are not needed. Total Fund Activity Summary FY 2010/11 Estimated Revenues Expenditures Source (Use)Estimated Fund Balance && of Fund Balance Fund Category July 1, 2010 Transfers In Transfers Out Fund Balance June 30, 2011 Operating Funds General Fund Reserve for Petty Cash 1,300 - - - 1,300 Designated for Operations 2,891,666 - - 28,917 2,920,582 Economic Uncertainty 1,500,000 - - - 1,500,000 Environmental Reserve 563,182 - - (50,000) 513,182 Development Reserve 632,380 - - (210,000) 422,380 Uncollected Deposits 182,159 - - - 182,159 CIP/Matching Reserve 726,983 - - (505,000) 221,983 Hillside Stability Reserve 300,000 - - - 300,000 Undesignated Fund Balance 884,762 15,285,004 (16,045,428) 736,083 860,421 Total General Fund 7,682,432 15,285,004 (16,045,428) - 6,922,008 Special Revenue Funds CDBG Program Fund - 394,356 (394,356) - - SHARP Program Fund 210,125 1,000 - - 211,125 Landscape & Lighting Districts 437,472 455,193 (631,156) - 261,509 Internal Service Funds Liability/Risk Management 241,493 281,500 (393,464) - 129,529 Workers Compensation 199,109 225,000 (247,791) - 176,318 Office Support Services 31,033 42,000 (48,050) - 24,983 IT Services 127,589 400,000 (440,134) - 87,454 Vehicle & Equipment Maintenance 59,693 200,000 (210,623) - 49,070 Building Maintenance 189,039 725,000 (741,161) - 172,878 Vehicle & Equipment Replacement 237,587 100,000 (99,000) - 238,587 IT Equipment Replacement 158,296 50,000 (77,500) - 130,796 Total Operating Funds 9,573,868$ 18,159,053$ (19,328,664)$ -$ 8,404,257$ Debt Service 2001 Series GO Bonds 959,553 962,000 (1,019,656) - 901,897 Total Debt Service 959,553$ 962,000$ (1,019,656)$ -$ 901,897$ Trust & Agency Funds Library Capital Improvement 345,033 - (345,033) - - KSAR 105,588 68,500 (174,088) - - Total Trust & Agency Funds 450,621$ 68,500$ (519,121)$ -$ -$ TOTAL OPERATING BUDGET 10,984,042$ 19,189,553$ (20,867,441)$ -$ 9,306,154$ Capital Funds Street Projects 1,258,469 5,335,132 (6,494,857) - 98,744 Park & Trail Projects 556,413 2,589,807 (3,146,220) - - Facility Projects 438,443 761,636 (1,200,079) - - Administrative Projects 219,773 - (219,773) - - Total Capital Funds 2,473,097$ 8,686,575$ (11,060,929)$ -$ 98,744$ TOTAL ALL FUNDS 13,457,139$ 27,876,128$ (31,928,370)$ -$ 9,404,898$ Of particular note on the Total Activity schedule, is that the Capital Projects Funds reflect end-of the- year estimates two months prior to the end of the fiscal year - which means there will be many project ending balance changes, which changes the final budget numbers. The impact of this is that for Capital Budgets, estimated year-end project balances are automatically carried forward as continued budgeted appropriations into the following fiscal year. CIP projects are multi-year operations; therefore the beginning fund balance is dependent on prior year project expenditures which are not finalized at the time the proposed budget is adopted. In addition, on the budget schedule, the entire estimated carryforward and all new funding is typically appropriated and subsequently expended during the new budget year, typically leaving a fund balance of zero in each of the Capital Project funds. This method of full appropriation provides flexibility to allow the full funding for the project to be encumbered under contract if needed (as project work extends beyond fiscal year boundaries). However, the result of this capital budgeting method is a higher estimated Beginning Fund Balance than the estimated Ending Fund Balance, (as well as higher revenue and expenditure appropriations than will actually occur). For FY 2010/11, a balance of $98,744 remains in the Streets program at year end as funds designated for a utility undergrounding project were not appropriated as final development of the project scope is on hold awaiting additional funding. Budget Adjustments Throughout the year, Council may approve both Operating and Capital Budget adjustments for additional initiatives or projects. Within the Operating Budget, the Council approves the budget at the Fund level, meaning the City Manager is authorized to make program and account changes within a fund, however Council approval is required for adjustments that would either increase or decrease fund appropriations. The Capital Budget is authorized at the project level, meaning Council approval is required for both appropriation dollar changes and project scope changes. As a budget simplification, projects are typically budgeted with total expenditure appropriations accounted for in one project construction account, whereas actual expenditures are accounted for in the appropriate capital expense account. As a contingency built into the budget resolution, if at project close, an immaterial project balance remains, the amount will be transferred out to the annual Streets Resurfacing project in the Streets Program, to the Annual Park & Trail Maintenance project in the Parks & Trail program, to the Annual Facility Improvement project in the Facility Program, and to the Manager’s Records Management project in the Administrative Improvements program. If the ending balance is material, a fund balance transfer to another project or back to the General Fund Capital Reserve will be requested for approval from the Council. This methodology simplifies project closure while still retaining appropriated funding in the original capital project fund. General Fund The General Fund is the main operating fund used to account for the majority of the City’s operations. The following two charts provide a graphical overview of the budgetary appropriations for General Fund revenues and expenditures by category. The schedules below each graph provide summary level financial data for the proposed budget year (gray column), as well as the current and two prior fiscal years for historical reference. As you can see on the following page, the General Fund Revenue and Transfers In chart includes additional funding from designated reserves to clearly identify the total General Fund sources which offset the total General Fund uses. The second chart; General Fund Expenditures and Transfers Out shows that total uses is slightly less than the total sources, leaving us with a balanced General Fund budget. General Fund Revenues & Transfers In By Category FY 2010/11 FY 2007/08 FY 2008/09 FY 2009/10 FY 2009/10 FY 2010/11 % of Revenue Category Actuals Actuals Adjusted Estimated Proposed Total Property Tax 7,922,815$ 8,155,362$ 8,175,500$ 8,091,904$ 8,022,600$ 52.5% Sales Tax 1,057,977 1,043,034 910,000 875,000 910,000 6.0% Transient Occupancy Tax 211,532 151,378 140,000 120,000 120,000 0.8% Business & Other Taxes 482,184 511,675 490,000 425,000 425,000 2.8% Franchise Fee Tax 1,623,318 1,656,716 1,675,000 1,651,579 1,652,000 10.8% Intergovernmental 428,304 303,212 268,500 323,377 267,000 1.7% Fees, Licenses & Permits 1,747,922 1,186,319 1,083,750 1,036,249 1,012,300 6.6% Charge for Services 1,738,918 1,670,175 1,551,531 1,461,411 1,532,035 10.0% Interest 615,731 362,588 170,000 90,275 90,000 0.6% Rental Income 386,834 366,619 364,342 411,694 435,320 2.8% Other Sources 387,958 467,124 288,000 357,789 569,200 3.7% Total Revenues 16,603,493$ 15,874,201$ 15,116,623$ 14,844,277$ 15,035,454$ 98.4% Fund Transfers In 2,275,254 153,732 273,859 325,842 249,550 1.6% Total Revenues & Transfers 18,878,747$ 16,027,933$ 15,390,482$ 15,170,119$ 15,285,004$ 100.0% Funding from Use of Designated Funds Theater Surcharge Deposit - 53,167 - - - Funding Carryforward 80,000 58,386 22,000 22,000 - Development Reserve 99,447 75,000 75,000 75,000 210,000 Environmental Reserve 40,000 66,735 50,000 50,000 50,000 CIP Reserve - 1,400,000 550,000 550,000 505,000 Economic Stability Reserve - - 25,000 25,000 - Total Operating Sources 19,098,194 17,681,221 16,112,482 15,892,119 16,050,004 General Fund Expenditures & Transfers Out By Category FY 2010/11 FY 2007/08 FY 2008/09 FY 2009/10 FY 2009/10 FY 2010/11 % of Expenditure Category Actuals Actuals Adjusted Estimated Proposed Total Salary & Benefits 6,172,956$ 6,485,451$ 6,505,303$ 6,343,849$ 6,553,680$ 40.8% Materials & Supplies 316,073 216,062 185,525 164,724 174,008 1.1% Fees & Charges 621,787 619,648 698,080 636,499 701,859 4.4% Consultant & Contract Services 5,516,722 5,985,878 5,821,677 5,795,654 5,972,756 37.2% Meetings, Events & Training 73,746 74,204 55,265 44,278 57,975 0.4% Community Grants & Events 189,934 162,669 208,006 207,792 181,376 1.1% Fixed Assets 30,127 30,105 - - - 0.0% Internal Services Charges 2,053,479 2,189,340 1,873,576 1,873,576 1,798,775 11.2% Total Expenditures 14,974,823$ 15,763,356$ 15,347,432$ 15,066,373$ 15,440,428$ 96.2% Fund Transfers Out:3,764,304 1,571,727 650,000 650,000 605,000 3.8% Total Expenditures & Transfers 18,300,791$ 17,335,083$ 15,997,432$ 15,716,373$ 16,045,428$ 100.0% The FY 2010/11 General Fund proposed budget appropriations reflect net sources (revenues, transfers in, carryforward, and designated fund balance funding) exceeding uses (expenditures and transfers out to other funds) by $4,576. Overall, the FY 2010/11 General Fund proposed budget revenues reflect slightly more ($191,000) than the current year’s estimated revenues, primarily due to several small expected increases in Sales Tax and Recreation Services, and a reimbursement from the Sheriff’s Office. Additional funds are coming from the Development Reserve under Council’s policy of use in economic downturns, from the Environmental Reserve for Solid Waste diversion programs, and from the CIP reserve to fund approved CIP projects. Budgeted expenditures reflect an increase from FY 2009/10 estimated expenditures due to increases in budgeted salary and benefits, and from public safety contracts. Even with staffing and salary reductions, budgeted expenses increased slightly from last year primarily from medical insurance premium increases, the 1% COLA increase, and some step increases. Under the salary and benefits budgeting method, most staff is budgeted at the top level, however management staff and temporary staff are not, and these wages may be adjusted on a yearly basis. In addition, the highest cost medical benefit is used in calculating benefits in order to build in potential costs that could occur if all employees were to choose the highest cost medical plan. While this methodology provides consistency in budget numbers, not all staff members are at top step or use the most expensive medical plan, therefore staffing cost actuals are less than budget each year, which provides some General Fund savings. CPI adjustments in both the Sheriff Services and Animal Control Services contracts also contributed to the budget increase, however with the limited CPI increases in the last couple of years, the increase was minimized. For the Sheriff’s contract, the increase for the next fiscal year was held to $117,000. For the Animal Services, the increase from the prior year is $11,200. Overall, the General Fund Operating Budget’s expenditures reflect reductions in staff time, operating materials, supplies, fees, and services where available without significantly impacting community services, in order to offset areas of increase. The Proposed Operating and Capital Budget reflects estimated amounts for FY 2009/10, whereas the final budget document will be adjusted to actuals prior to publication and posting to provide the public with accurate information for future year’s reference. The final budget document will also include any additional changes as a result of direction from Council and/or identified by staff as a clean-up item will be included in the final budget, per Council’s adoption of the FY 2010/11 Operating & Capital Budget resolution at the June 2, 2010 Council Meeting. CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION The City would not adopt an Operating & Capital Budget for FY 2010/11. ALTERNATIVE ACTION N/A FOLLOW UP ACTIONS 1. Prepare FY 2010/11 Adopted Operating & Capital Summary and Detail Budget documents as directed by Council. 2. Monitor revenues and expenditures and provide quarterly reports and updates as necessary to Finance Committee and Council. ADVERTISING, NOTICING AND PUBLIC CONTACT N/A ATTACHMENTS A: Resolution to Adopt the Fiscal Year 2010/11 Operating & Capital Budget Attachment A A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA ADOPTING THE FISCAL YEAR 2010/11 OPERATING & CAPITAL BUDGET WHEREAS, the City Council held a public hearing on the Proposed Operating & Capital Budget for Fiscal Year 2010/11 on May 19, 2010; WHEREAS, Section 2-20.050(i) of the Code of the City of Saratoga requires the City Manager to prepare and submit the proposed annual budget to the City Council for its approval; WHEREAS, the Planning Commission has conducted an annual review of proposed new capital projects for consistency with the City’s general plan; and WHEREAS, after the Planning Commission’s approval of the proposed new projects the City Manager did submit a proposed budget for FY 2010/11 to the City Council; and WHEREAS, the City Council has considered and, upon consensus may provide direction for modifications to the proposed budget during a public hearing; and WHEREAS, the City Council gave staff direction to adopt the Fiscal Year 2010/11 operating and capital budgets as proposed; NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Saratoga hereby adopts the Fiscal Year 2010/11 Operating & Capital Budget as shown in the Total Fund Activity Summary schedule in the budget adoption report; AND BE IT FURTHER RESOLVED, that the final adopted budget includes carry-forward appropriations for prior year capital projects, identified funding for specified expenditures, grants, and pass-through balances; that capital projects are in compliance with the General Plan; that there be carried forward from the prior year within each fund an amount sufficient to cover approved outstanding encumbrances as of June 30, 2010; AND BE IT FURTHER RESOLVED, that the City Council hereby directs staff that any changes or impacts resulting from: Council approval of the meet and confer process or management compensation plan; from classification adjustments or miscellaneous corrections; from changes due to more refined estimates, grant approvals, or claim reimbursements; from development fee based pass- through budget appropriations; or from further City Council consensus direction received on June 2, 2010 be incorporated within the final Fiscal Year 2010/11 Operating & Capital Budgets; Attachment A AND BE IT FURTHER RESOLVED, that the Finance and Administrative Services Director is directed to record these changes into the City’s accounting records in accordance with appropriate accounting practices. The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga City Council held on the 2nd day of June, 2010, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Kathleen King, Mayor City of Saratoga ATTEST: Ann Sullivan, City Clerk of the City of Saratoga