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Home My WebLink About04-22-2013 Budget Study Session Agenda PacketI F0?, AGENDA SPECIAL MEETING SARATOGA CITY COUNCIL APRIL 22, 2013 SPECIAL MEETING — 6:00 P.M. ADMINISTRATIVE CONFERENCE ROOM, 13777 FRUITVALE AVENUE CALL MEETING TO ORDER — 6:00 p.m. REPORT ON POSTING OF AGENDA (Pursuant to Gov't. Code 54954.2, the agenda for this meeting was properly posted on April 19, 2013) COMMUNICATIONS FROM COMMISSIONS & PUBLIC ORAL COMMUNICATIONS ON NON - AGENDIZED ITEMS Any member of the public will be allowed to address the City Council for up to three (3) minutes on matters not on this agenda. The law generally prohibits the council from discussing or taking action on such items. However, the Council may instruct staff accordingly regarding Oral Communications under Council Direction to Staff. COUNCIL DIRECTION TO STAFF Instruction to Staff regarding actions on current Oral Communications. Fiscal Year 2013/14 Budget Study Session Recommended Action: Review the proposed Fiscal Year 2013/14 Operating and Capital Budgets to be brought before the Council at the May 15, 2013 Proposed Budget Hearing, review the status of the Fund Balance Reserve, and review the revised language of the Fund Balance Reserve Policy. ADJOURNMENT In accordance with the Ralph M. Brown Act, copies of the staff reports and other materials provided to the City Council by City staff in connection with this agenda are available at the office of the City Clerk at 13777 Fruitvale Avenue, Saratoga, CA 95070. Note that copies of materials distributed to the City Council concurrently with the posting of the agenda are also available on the City Website at www.saratoga.ca.us. Any materials distributed by staff after the posting of the agenda are made available for public review at the office of the City Clerk at the time they are distributed to the City Council. In Compliance with the Americans with Disabilities Act, if you need assistance to participate in this meeting, please contact the City Clerk at 4081868 -1269. Notification 24 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. [28 CFR 35.102- 35.104 ADA title II] Certificate of Posting of Agenda: I, Crystal Bothelio, City Clerk for the City of Saratoga, declare that the foregoing agenda for the meeting of the City Council was posted and available for public review on April 19, 2013 at the City of Saratoga, 13777 Fruitvale Ave., Saratoga, CA 95070 and on the City's website at www.saratoga.ca.us. Signed this 19' day of April 2013 at Saratoga, California. Crystal Bothelio, City Clerk 0 0 SAIt 1 SARATOGA CITY COUNCIL MEETING DATE: April 22, 2013 AGENDA ITEM: DEPARTMENT: Finance & Administrative Services CITY MANAGER: Dave Anderson PREPARED BY: Mary Furey DIRECTOR: Mary Furey SUBJECT: Review of the FY 2013/14 Proposed Operating and Capital Budgets, the projected Fund Balance Reserve balances, and Fund Balance Reserve Policy revised language RECOMMENDED ACTION: Council to review and provide consensus direction to staff on: 1) The final draft proposed FY 2013/14 Operating and Capital Budgets to be brought forth to Council at the May 15'' Proposed Budget Hearing 2) Projected Fund Balance Status Update 3) Reserve Policy revised language REPORT SUMMARY: The Budget Study Session meeting is structured to review the following topics: ❖ Proposed Operating & Capital Budget Financial Summaries ❖ Proposed organizational changes ❖ New capital project recap and two updates ❖ Projected Fund Balance year -end status ❖ Revised Reserve Policy language Staff is in the process of finalizing the Proposed Operating & Capital Budget for the Budget Hearing on May 15, 2013. This Budget Study Session is intended to provide an overview of the proposed budget to familiarize Council with the document's schedules, financial and operational changes, and budgeted fiscal status. This informal review process provides Council with the opportunity to ask questions, request clarifications, and provide direction, in preparation for the public hearing. Additionally, as directed by Council at the Mid -Year Budget Status Update, the Fund Balance Reserve policy was to be brought back to the Budget Study Session with revised language in the Internal Service Fund policies. A very quick review will confirm that the language now clearly states fund balances are to be maintained for working capital purposes, as seen in Attachment 5 on page 12 (in red) and throughout the individual funds on pages 12 -14. FISCAL IMPACTS: N/A CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: Council would not have the benefit of reviewing the proposed budget in a study session environment or provide input and direction to staff. ALTERNATIVE ACTION: Reschedule Study Session to an alternate date. FOLLOW UP ACTION: Review final FY 2013/14 Proposed Operating and Capital Budget for Budget Hearing on May 15, 2013 ADVERTISING, NOTICING AND PUBLIC CONTACT: Pursuant to Government Code 54954.2, this item was properly posted as a City Council agenda item and was included in the packet made available on the City's website in advance of the meeting. A copy of the agenda packet is also made available at the Saratoga Branch Library each Monday in advance of the Council meeting. ATTACHMENTS: Attachment IA: FY 2013/14 General Fund Summary Attachment 1B: Proposed Financial Summaries Attachment 2A: FTE Summary Attachment 2B: Proposed Staffing Revisions Worksheet Attachment 3: Proposed New Capital Projects Funding Worksheet Attachment 4: Fund Balance Reserves Worksheet Attachment 5: Fund Balance Reserve Policy - Revised Language Update General Fund Revenues 17,188,083 Transfers In 106,000 Total General Fund Revenues & Transfers 17,294,083 Use of Fund Balance Reserves: Environmental Reserve 50,000 CIP Project Reserve 280,880 Total Use of Fund Balance Reserves 330,880 Total Funding Sources 17,624,963 General Fund Expenditures 16,627,824 Transfers Out to CIP 380,880 Total Expenditures & Transfers 17,008,704 Total Funding Uses 17,008,704 CITY OF SARATOGA FINANCIAL SUMMARIES 300 250 200 150 100 50 0 FINANCIAL SUMMARIES TOTAL REVENUES AND EXPENDITURES Summary schedules which provide a high level overview of the entire operating budget, in a fund -type summary, as well as by fund - specific and category - specific summary levels. TotalFund Activity Summary ........................................................................................ ............................... B— 3 TotalRevenues — by Fund .............................................................................................. ............................... B— 4 TotalExpenditures — by Fund ........................................................................................ ............................... B— 6 TotalRevenues — by Category ....................................................................................... ............................... B— 8 Total Expenditures — by Category .................................................................................. ............................... B— 9 GENERAL FUND REVENUES AND EXPENDITURES Summary schedules which identify the General Fund operating sources and uses at the department and category levels. The Fund Balance Activity summarizes the General Fund sources and uses which impact the ending fund balance. General Fund Revenues — by Department ..................................................................... ............................... B — 10 General Fund Expenditures — by Department ................................................................ ............................... B-11 General Fund Revenues — by Category .......................................................................... ............................... B — 12 General Fund Expenditures — by Category ..................................................................... ............................... B — 13 General Fund Tax Revenues per Capita — Cities of Santa Clara County ...................... ............................... B — 14 General Fund Tax Revenues — 10 Year History of Key Tax Revenues ........................ ............................... B — 15 General Fund — Fund Balance Activity .......................................................................... ............................... B — 16 OPERATING TRANSFERS A schedule summarizing activity by fund, of estimated fund transfers for the prior year and budgeted for the adopted fiscal year. Schedule of Interfund Transfers ..................................................................................... ............................... B — 17 FUND BALANCE Fund Balance schedules, one which summarizes activity and ending fund balances to provide a quick look at the ongoing status of the individual funds, and another which provides a S year trend. Total Fund Balance Activity Summary — by Fund ........................................................ ............................... B — 18 Fund Balance Reserve — 5 Year Comparative History ................................................... ............................... B-20 CITY OF SARATOGA FINANCIAL SUMMARIES DEPARTMENTAL BUDGETS Department level schedules which provide an overview of funding source and expenditure use by each program within the department. Department Revenues — by Program .............................................................................. ............................... B — 22 Department Expenditures — by Program ......................................................................... ............................... B — 24 STAFFING Staffing schedules which provide a summary level view of operational staffing assignments, funding, and trend over the prior five years. Summary of Employee Salary & Benefits ....................................................................... ............................... B - 28 Positionsby Department ................................................................................................ ............................... B-32 Staffing by Department ................................................................................................. ............................... B-34 Staffing by Fund ............................................................................................................ ............................... B-35 B -2 CITY OF SARATOGA FINANCIAL SUMMARIES TOTAL FUND ACTIVITY SUMMARY FY 2013/14 Internal Service Funds Estimated Revenues Expenditures Source (Use) Estimated Liability/Risk Management Fund Balance & & of Fund Balance Fund Category July 1, 2013 Transfers In Transfers Out Fund Balance June 30, 2014 Operating Funds 21,470 67,000 (63,550) $ 10,873,018 - 24,920 Gen eral Fu n Reserves 281,248 400,000 (460,226) - 221,021 Environmental Services 463,182 - - (50,000) 413,182 Hillside Stability 550,000 - - - 550,000 Capital Projects 1,164,158 - - (280,880) 883,278 Working Capital 2,914,426 - - - 2,914,426 Fiscal Stabilization 1,500,000 - - - 1,500,000 Development Services 667,233 - - - 667,233 Other Unassigned 2,082,198 17,294,083 (17,008,704) 330,880 2,698,457 Total General Fund Reserves $ 9,341,197 $ 17,294,083 $ (17,008,704) $ - $ 9,626,576 Special Revenue Funds $ 905,293 $ 851,500 $ (889,860) $ - $ 866,933 Landscape & Lighting Districts 618,000 486,931 (602,084) - 502,847 Total Special Revenue Reserves $ 618,000 $ 486,931 $ (602,084) $ - $ 502,847 Internal Service Funds Street Projects 2,216,932 Liability/Risk Management 216,638 465,995 (475,536) 952,907 - 207,097 Workers Compensation 285,925 215,000 (270,748) Administrative Projects - 230,177 Office Support Services 21,470 67,000 (63,550) $ 10,873,018 - 24,920 IT Services 281,248 400,000 (460,226) - 221,021 Vehicle & Equipment Maintenance 16,985 250,000 (232,750) - 34,235 Building M aintenance 158,368 825,000 (800,270) - 183,098 Vehicle & Equipment Replacement 443,309 200,000 (240,000) - 403,309 IT Equipment Replacement 150,456 55,000 (59,200) - 146,256 Total Internal Service Fund Reserves $ 1,574,398 $ 2,477,995 $ (2,602,280) $ - $ 1,450,113 Total Operating Funds $ 11,533,595 $ 20,259,009 $ (20,213,069) $ - $ 11,579,536 Debt Service 2001 Series GO Bonds 905,293 851,500 (889,860) - 866,933 Total Debt Service Funds $ 905,293 $ 851,500 $ (889,860) $ - $ 866,933 TOTAL OPERATING BUDGET $ 12,438,888 $ 21,110,509 $ (21,102,929) $ - $ 12,446,469 Capital Funds Street Projects 2,216,932 9,614,186 (11,831,118) - Park & Trail Projects 722,636 952,907 (1,675,544) - - Facility Projects 236,952 202,523 (404,475) - 35,000 Administrative Projects 173,771 103,402 (277,173) - Total Capital Funds $ 3,350,291 $ 10,873,018 $ (14,188,310) $ - $ 35,000 TOTAL ALL FUNDS $ 15,789,180 $ 31,983,527 $ (35,291,239) $ - $ 12,481,468 Capital Project funding incorporates remaining funds not yet received from the prior year, new revenue, grants to be received, and transfers in. Prior year budgeted funds are shown as beginning fund balance carryforward amounts to which new funding is added to produce total available funding for project budgets. All available funds are appropriated as expenditures and transfers out to allow for project encumbrances and completion. As most projects will not be fully expended in a fiscal year, remaining project balances will carry forward into the next fiscal year. B -3 CITY OF SARATOGA FINANCIAL SUMMARIES TOTAL REVENUES & TRANSFERS IN ■ BY FUND Special Revenue Funds CDBG Program Fund 300,692 - - - - SHARP Program Fund 714 - - - - Landscape &Lighting Districts 460,115 491,241 464,734 477,215 486,931 Total Special Revenue Funds 761,522 491,241 464,734 477,215 486,931 Internal Service Funds Liability /Risk Management Ins FY 2010 /11 FY 2011 /12 FY 2012/13 FY 2012/13 FY 2013/14 Fund Actuals Actuals Adjusted Estimated Proposed General Fund 38,535 50,626 67,000 66,300 67,000 General Fund 15,742,117 16,230,633 16,693,609 17,364,840 $17,188,083 Total General Fund 15,742,117 16,230,633 16,693,609 17,364,840 17,188,083 Special Revenue Funds CDBG Program Fund 300,692 - - - - SHARP Program Fund 714 - - - - Landscape &Lighting Districts 460,115 491,241 464,734 477,215 486,931 Total Special Revenue Funds 761,522 491,241 464,734 477,215 486,931 Internal Service Funds Liability /Risk Management Ins 275,014 352,455 468,527 468,527 465,995 Workers Compensation Ins 221,966 219,287 255,000 246,000 215,000 Office Support Services 38,535 50,626 67,000 66,300 67,000 Information Technology Services 400,000 400,000 400,000 400,000 400,000 Vehicle & Equipment Maintenance 200,000 200,000 215,000 215,000 250,000 Building M aintenance 732,601 725,000 750,000 749,999 825,000 Vehicle & Equipment Replacement 100,000 115,715 100,000 100,000 200,000 IT Equipment Replacement 50,000 50,000 46,236 46,236 55,000 Total Internal Service Funds 2,018,116 2,113,083 2,301,763 2,292,062 2,477,995 Debt Service Funds 2001 Series GO Bond 972,940 13,387,316 850,600 911,788 851,500 Total Debt Service Funds 972,940 13,387,316 850,600 911,788 851,500 Trust Fu n ds Library Capital Improvement Fund - - - - - KSAR Community Access Trust 18,573 - - - Total Trust Funds 18,573 - - - - Capital Project Funds Street Projects 2,223,355 3,455,125 5,266,615 2,226,261 9,464,186 Park & Trail Projects 877,706 647,874 555,765 213,507 867,026 Facility Projects 47,111 39,219 28,722 134,058 102,523 Administrative Projects 5,072 5,736 175,000 156,598 18,402 Total Capital Improvement Projects 3,153,244 4,147,954 6,026,101 2,730,424 10,452,137 Total Revenues 22,666,512 36,370,226 26,336,807 23,776,330 $ 31,456,646 Operating Transfers In General Fund 224,550 205,222 106,000 106,000 106,000 Street Capital Project Funds 781,272 400,308 656,818 656,818 150,000 Park & Trail Capital Project Funds 198,791 25 610,000 610,231 85,880 Facility Capital Project Fund 810,418 264,659 500,401 324,500 100,000 Admin Capital Project Fund - 55,941 85,000 85,000 85,000 Total Operating Transfers In 2,015,031 926,156 1,958,219 1,782,549 526,880 Total Revenues & Transfers In 24,681,543 37,296,381 28,295,026 25,558,879 $ 31,983,526 B -4 CITY OF SARATOGA FINANCIAL SUMMARIES General Fund 54 -6% TOTAL REVENUES & TRANSFERS IN BY FUND TYPE Special Revenue Debt Service Funds Funds 1_rr �. FY 2013/14 REVENUES BY FUND Internal Service Funds 7 -9% Capital Project Funds 33.2 Note: Capital Project revenues and expenditures amounts in the current year budget reflect full appropriation for receipt and expense of capital funding to indicate the potential impact of capital projects. However, this high level of activity is not expected as most projects are completed over multiple years. Remaining project balances at year -end carryover to the following fiscal year, and are again reflected as revenue and expenditure funding. B -5 FY 2010 /I1 FY 2011/12 FY 2012/13 FY 2012/13 FY 2013/14 % of Fund Actuals Actuals Adjusted Estimated Proposed Total General Fund $15,742,117 $16,230,633 $16,693,609 $17,364,840 $17,188,083 54.6% Special Revenue Funds 761,522 491,241 464,734 477,215 486,931 1.5% Internal Service Funds 2,018,116 2,113,083 2,301,763 2,292,062 2,477,995 7.9% Debt Service Funds 972,940 13,387,316 850,600 911,788 851,500 2.7% Trust Funds 18,573 - - - - 0.0% Capital Project Funds 3,153,244 4,147,954 6,026,101 2,730,424 10,452,137 33.2% Total Revenues by Fund $ 22,666,512 $ 36,370,226 $ 26,336,807 $ 23,776,330 $ 31,456,646 100.0% Operating Fund Transfers 224,550 205,222 106,000 106,000 106,000 CIP Fund Transfers 1,790,481 720,934 1,852,219 1,676,549 420,880 Total Revenues & Transfers In $ 24,681,543 $ 37,296,381 $ 28,295,026 $ 25,558,879 $ 31,983,526 Note: Capital Project revenues and expenditures amounts in the current year budget reflect full appropriation for receipt and expense of capital funding to indicate the potential impact of capital projects. However, this high level of activity is not expected as most projects are completed over multiple years. Remaining project balances at year -end carryover to the following fiscal year, and are again reflected as revenue and expenditure funding. B -5 CITY OF SARATOGA FINANCIAL SUMMARIES TOTAL EXPENDITURES & TRANSFERS OUT BY FUND Expenditures by Fund General Fund General Fund Total General Fund Special Revenue Funds SHARP Program Fund Landscape & Lighting Districts Total Special Revenue Funds Internal Service Funds Liability /Risk Management Ins Workers Compensation Ins Office Support Services Information Technology Services Vehicle & Equipment Maintenance Building Maintenance Vehicle & Equipment Replacement IT Equipment Replacement Total Internal Service Funds Debt Service Funds 2001 Series GO Bond Total Debt Service Funds Trust Funds KSAR Community Access Trust Total Trust Funds Capital Project Funds Street Projects Park & Trail Projects Facility Projects Administrative Projects Total Capital Project Funds FY 2010/11 Actuals FY 2011/12 Actuals FY 2012/13 FY 2012/13 FY 2013/14 Adjusted Estimated Proposed $ 15,616,298 $ 14,710,797 $ 16,151,134 $ 15,849,265 16,627,824 15,616,298 14,710,797 16,151,134 15,849,265 16,627,824 210,748 - - - - 396,379 432,862 633,929 421,719 602,084 607,127 432,862 633,929 421,719 602,084 359,670 352,603 489,249 386,646 450,536 196,454 211,425 284,684 192,041 270,748 49,534 55,236 59,250 56,050 63,550 382,877 374,362 422,758 375,453 460,226 211,441 219,786 225,477 221,046 232,750 726,653 732,592 767,229 792,557 800,270 4,856 10,000 95,000 93,780 240,000 51,119 53,844 52,600 52,540 59,200 1,982,604 2,009,848 2,396,247 2,170,113 2,577,280 1,014,876 13,375,558 869,285 868,910 889,860 1,014,876 13,375,558 869,285 868,910 889,860 128,416 128,416 2,590,294 3,693,733 7,616,249 2,358,963 11,725,118 649,959 948,802 1,820,997 756,333 1,675,544 381,677 492,379 987,832 715,314 404,476 81,707 43,986 389,399 197,226 262,173 3,703,637 5,178,900 10,814,477 4,027,838 14,067,311 Total Expenditures $ 23,052,958 $ 35,707,966 $ 30,865,072 $ 23,337,845 34,764,359 Operating Transfers Out General Fund 876,983 280,000 859,500 1,209,500 380,880 Liability/Risk Mgmt Fund 25,000 - - - 25,000 IT Equipment Replacement to CIP - 24,963 - CDBG Fund 291,071 - - - Library Capital Trust Fund to CIP 351,360 - - - - Street Capital Project Funds 316,558 324,896 572,818 572,818 106,000 Park & Trail Capital Project Funds 95,000 25 231 231 - Facility Capital Projects Fund 59,058 259,841 - - - Admin Capital Projects Fund - 36,430 - - 15,000 Total Operating Transfers Out 2,015,031 926,156 1,432,549 1,782,549 526,880 Total Expenditures & Transfers Out $ 25,067,989 $ 36,634,122 $ 32,297,621 $ 25,120,394 35,291,239 B -6 CITY OF SARATOGA FINANCIAL SUMMARIES General Fun 47.8° TOTAL EXPENDITURES & TRANSFERS OUT BY FUND TYPE SwnPrinl RPVPn71P nab,+ Intarnal gPMnra FY 2013/14 EXPENDITURES BY FUND CIP Funds 40 -5% Total Expenditures & Transfers $ 25,067,989 $ 24,1799384 $ 329297,621 $ 25,120,394 $ 359291,239 Bond Refunding Expenditures - 12,454,738 - - - Total Funding Uses $ 25,067,989 $ 369634,122 $ 32,297,621 $ 259120,394 $ 359291,239 Note: Capital Project revenues and expenditures amounts in the current year budget reflect full appropriation for receipt and expense of capital funding to indicate the potential impact of capital projects. However, this high level of activity is not expected as most projects are completed over multiple years. Remaining project balances at year -end carryover to the following fiscal year, and are again reflected as revenue and expenditure funding. B -7 FY 2010 /11 FY 2011 /12 FY 2012/13 FY 2012/13 FY 2013/14 % of Fund Actuals Actuals Adjusted Estimated Proposed Total General Fund $ 15,616,298 $ 14,710,797 $ 16,151,134 $ 15,849,265 $ 16,627,824 47.8% Special Revenue Funds 607,127 432,862 633,929 421,719 602,084 1.7% Internal Service Funds 1,982,604 2,009,848 2,396,247 2,170,113 2,577,280 7.4% Debt Service Funds 1,014,876 920,820 869,285 868,910 889,860 2.6% Trust Funds 128,416 - - - - 0.0% Capital Project Funds 3,703,637 5,178,900 10,814,477 4,027,838 14,067,311 40.5% Total Expenditures by Fund $ 23,052,958 $ 23,253,228 $ 30,865,072 $ 23,337,845 $ 34,764,359 100.0% Operating Fund Transfers 1,544,415 304,963 859,500 1,209,500 405,880 CIP Fund Transfers Out 470,617 621,193 573,049 573,049 121,000 Total Expenditures & Transfers $ 25,067,989 $ 24,1799384 $ 329297,621 $ 25,120,394 $ 359291,239 Bond Refunding Expenditures - 12,454,738 - - - Total Funding Uses $ 25,067,989 $ 369634,122 $ 32,297,621 $ 259120,394 $ 359291,239 Note: Capital Project revenues and expenditures amounts in the current year budget reflect full appropriation for receipt and expense of capital funding to indicate the potential impact of capital projects. However, this high level of activity is not expected as most projects are completed over multiple years. Remaining project balances at year -end carryover to the following fiscal year, and are again reflected as revenue and expenditure funding. B -7 CITY OF SARATOGA FINANCIAL SUMMARIES Property Tax Sales & Use Tax Franchise Fee Tax Transient Occupancy Tax Business /Other Taxes Fees. Licenses & Permits Intergovernmental Charge for Services Interest Income Rental Inc ome Other Sources Internal Service Charges Capital Improvements TOTAL REVENUES & TRANSFERS IN BY CATEGORY 10,295,336 10,452,137 '2.,000P'30 °pd pQ) 6 l000'0 00 'bp OO 4O0 to 1000,000 k2+() °05000 FY 2013/14 REVENUES BY CATEGORY FY 2010/11 FY 2011 /12 FY 2012/13 FY 2012/13 1,05b'000 % of Revenue Category Actuals Actuals Adjusted Estimated 2,059,954 Total Property Talc 9,453,877 9,699,503 210,000 535,000 10,295,336 32.7% Sales Tax 990,579 1,100,489 1, 92,065 1,050,000 3.3% Franchise Fee Tax 1,839,568 448,211 1,983,454 2,048,971 2,059,954 6.5% Transient Occupancy Tax 184,362 1,867,115 175,000 210,000 210,000 0.7% 49,495 419,175 477,962 455,000 535,000 535,000 1.7% 318,158 1,156,486 1,236,460 1,380,065 1,392,873 1,392,065 4.4% Intergovernmental 726,312 313,453 432,390 478,058 448,211 1.4% Charge for Services 1,749,826 1,743,515 1,710,688 10,295,336 10,452,137 '2.,000P'30 °pd pQ) 6 l000'0 00 'bp OO 4O0 to 1000,000 k2+() °05000 FY 2013/14 REVENUES BY CATEGORY FY 2010/11 FY 2011 /12 FY 2012/13 FY 2012/13 FY 2013/14 % of Revenue Category Actuals Actuals Adjusted Estimated Proposed Total Property Talc 9,453,877 9,699,503 9,755,064 10,192,660 10,295,336 32.7% Sales Tax 990,579 1,100,489 1,035,000 1,025,000 1,050,000 3.3% Franchise Fee Tax 1,839,568 1,852,390 1,983,454 2,048,971 2,059,954 6.5% Transient Occupancy Tax 184,362 205,421 175,000 210,000 210,000 0.7% Business /Other Taxes 448,138 477,962 455,000 535,000 535,000 1.7% Fees, Licenses & Permits 1,156,486 1,236,460 1,380,065 1,392,873 1,392,065 4.4% Intergovernmental 726,312 313,453 432,390 478,058 448,211 1.4% Charge for Services 1,749,826 1,743,515 1,710,688 1,858,616 1,867,115 5.9% Interest Income 69,861 48,994 47,345 49,125 49,495 0.2% Rental Income 438,458 507,941 471,182 457,107 419,175 1.3% Other Sources 535,801 551,405 684,282 617,259 318,158 1.0% Operational Revenues $ 17,593,268 $ 17,737,532 $ 18,129,470 $ 18,864,669 $ 18,644,509 59.3% Internal Service Charges 1,920,000 2,030,000 2,181,236 2,181,236 2,360,000 7.5% Capital Improvements 3,153,244 4,147,954 6,026,101 2,730,424 10,452,137 33.2% Total Revenues $ 22,666,512 $ 23,915,486 $ 26,336,807 $ 23,776,329 $ 31,456,646 100.0% Fund Transfers In: 2,015,031 926,156 1,958,219 1,782,549 526,880 Total Revenues & Transfers $ 24,681,542 $ 24,841,641 $ 28,295,026 $ 25,558,878 $ 31,9835526 Bond Refunding Proceeds - 12,454,738 - - - Total Funding Sources $ 24,6815542 $ 37,296,379 $ 28,295,026 $ 25,558,878 $ 31,983,526 Note: Saratoga is a minimum services contract city meaning consultants and contract services are utilized extensively to provide services to the community. Examples include: Sheriff's services, animal control services, street sweeping, and landscape maintenance services. B -8 CITY OF SARATOGA FINANCIAL SUMMARIES Salaries & Benefits Materials & Supplies Fees & Charges Consultant & Contract Services Sheriff Services Community Grants & Events Meetings & Training Debt Service Fixed Assets Internal Service Charges Capital Improvements TOTAL EXPENDITURES & TRANSFERS OUT BY CATEGORY FY 2013/14 EXPENDITURES BY CATEGORY Note: Saratoga is a minimum services contract city meaning consultants and contract services are utilized extensively to provide services to the community. Examples include: Sheriff's services, animal control services, street sweeping, and landscape maintenance services. FY 2010 /11 FY 2011/12 FY 2012/13 FY 2012/13 FY 2013/14 % of Expenditure Category Actuals Actuals Adjusted Estimated Proposed Total Salaries & Benefits 7,488,036 6,850,735 7,530,373 7,316,493 7,728,816 22.2% Materials & Supplies 370,868 382,800 422,987 408,060 492,722 1.4% Fees & Charges 1,947,920 1,616,183 1,881,675 1,650,103 1,788,081 5.1% Consultant & Contract Services 2,119,902 2,037,669 2,724,458 2,458,689 2,762,041 7.9% Sheriff Services 4,253,148 4,060,306 4,153,654 4,153,654 4,225,024 12.2% Meetings & Training 63,799 38,277 64,070 55,050 73,545 0.2% Community Grants & Events 165,915 116,203 127,856 124,033 136,950 0.4% Debt Service 1,014,876 920,820 869,285 868,910 971,860 2.8% Fixed Assets 4,856 21,336 95,000 93,780 158,000 0.5% Operating Expenditures 17,429,320 16,044,329 17,869,358 17,128,772 18,337,039 52.7% Internal Service Charges 1,920,001 2,030,000 2,181,236 2,181,236 2,360,012 6.8% Capital Improvements 3,703,637 5,178,900 10,814,477 4,027,838 14,067,311 40.5% Total Expenditures $ 23,052,958 $ 23,253,229 $ 30,865,071 $ 23,337,846 $ 34,764,362 100.0% Fund Transfers Out 2,015,031 926,156 1,432,549 1,782,549 526,880 Total Expenditures & Transfers $ 25,067,989 $ 24,179,385 $ 32,297,620 $ 25,120,395 $ 35,291,242 Bond Refunding Expenditure - 12,454,738 - - Total Funding Uses $ 25,067,989 $ 36,634,123 $ 32,297,620 $ 25,120,395 $ 35,291,242 Note: Saratoga is a minimum services contract city meaning consultants and contract services are utilized extensively to provide services to the community. Examples include: Sheriff's services, animal control services, street sweeping, and landscape maintenance services. CITY OF SARATOGA FINANCIAL SUMMARIES Public Safety 2.5% Recreation & F. 5.8% GENERAL FUND REVENUES BY DEPARTMENT Non - Departmental 7n `] 9h Development 11.9% FY 2013/14 REVENUES BY DEPARTMENT Administrative Services 0.3% Use of Fund Balance Reserves: Carryforward Reserve 2010/11 2011/12 2012/13 2012/13 2013/14 % of Departments Actuals Actuals Adjusted Estimated Proposed Total Council & Commissions $ 600 $ 2,400 $ 600 $ 600 S - 0.0% City Manager's Department 20,820 20,412 13,400 3,017 1,000 0.0% Administrative Services 58,574 49,758 50,000 50,760 51,500 0.3% Community Development 1,734,095 1,922,649 1,962,265 2,037,170 2,050,815 11.9% Public Works 589,929 587,480 898,610 975,043 898,255 5.2% Recreation & Facilities 882,355 852,736 953,900 946,209 1,004,750 5.8% Public Safety 661,253 694,129 751,319 723,737 432,241 2.5% Non - Departmental 11,794,492 12,101,067 12,063,515 12,628,304 12,749,522 74.2% Total General Fund Revenues $ 15,742,117 $ 16,230,633 $ 16,693,609 $ 17,364,840 $ 17,188,083 100.0% Fund Transfers In: 224,550 205,222 106,000 106,000 106,000 Total Operating Revenues $ 15,966,667 $ 16,435,855 $ 16,799,609 $ 17,470,840 $ 17,294,083 Use of Fund Balance Reserves: Carryforward Reserve 68,600 31,900 247,200 247,200 - Environmental Reserve 50,000 - 50,000 50,000 50,000 CIP Reserve 776,983 80,779 759,500 759,500 280,880 Hillside Reserve - - 350,000 350,000 - Uncommitted Funds 95,000 - - - - Total Operating Sources 16,957,250 16,548,534 18,206,309 18,877,540 17,624,963 B -10 CITY OF SARATOGA FINANCIAL SUMMARIES GENERAL FUND EXPENDITURES BY DEPARTMENT Public Works 28.596 Recreation & Facilities 8.5% Public Safety Community 26.6% Development 13.2% Administrative Services 8.2% City Manager's Non Departmental Department 6.8% 4.9% Council & Fund Transfers Out Commissions 2.2% 1.2% FY 2013/14 EXPENDITURES BY DEPARTMENT B -11 2010/11 2011/12 2012/13 2012/13 2013/14 % of Departments Actuals Actuals Adjusted Estimated Proposed Total Council & Commissions $ 154,340 $ 152,149 $ 188,343 $ 182,478 $ 201,859 1.2% City Manager's Department 1,455,993 798,582 822,944 838,246 830,916 5.0% Administrative Services 795,490 1,166,825 1,253,278 1,191,315 1,386,371 8.3% Community Development 1,981,762 1,887,796 2,090,641 2,098,901 2,244,838 13.5% Public Works 4,320,463 4,318,432 4,545,040 4,529,405 4,841,300 29.1% Recreation & Facilities 1,322,152 1,269,497 1,396,144 1,349,948 1,450,395 8.7% Public Safety 4,467,738 4,310,113 4,400,463 4,397,713 4,516,154 27.2% Non - Departmental 1,118,359 807,403 1,454,281 1,261,259 1,155,990 7.0% Total General Fund Exp $ 15,616,298 $ 14,710,797 $ 16,151,134 $ 15,849,265 $ 16,627,824 100.0% Fund Transfers Out 876,983 280,000 859,500 1,209,500 380,880 Total Exp & Transfers Out $ 16,493,281 $ 14,990,797 $ 17,010,634 $ 17,058,765 $ 17,008,704 B -11 CITY OF SARATOGA FINANCIAL SUMMARIES Other Sources 1.6% Rental Incom 2.4% Chargefor Services 10.8% Fees, Licenses & Permits 8.1% GENERAL FUND REVENUES BY CATEGORY Property Tax 52.1% lnLergovL 1 2.3% Sales Tax 6.1% Transient OccupancyTax 1.2% Business & Other Taxes 3.1% Franchise Fee Tax 12.0% FY 2013/14 REVENUES BY CATEGORY Use of Fund Balance Reserves: FY 2010 /11 FY 2011 /12 FY 2012/13 FY 2012/13 FY2013/14 % of Revenue Category Actuals Actuals Adjusted Estimated Proposed Total Property Tax $ 8,026,659 $ 8,279,947 $ 8,441,975 $ 8,807,682 $ 8,960,400 52.1% Sales Tax 990,579 1,100,489 1,035,000 1,025,000 1,050,000 6.1% Transient Occupancy Tax 184,362 205,421 175,000 210,000 210,000 1.2% Business & Other Taxes 448,137 477,963 455,000 535,000 535,000 3.1% Franchise Fee Tax 1,821,131 1,852,390 1,983,454 2,048,971 2,059,954 12.0% Intergovernmental 384,746 274,848 373,863 428,531 392,216 2.3% Fees, Licenses & Permits 1,156,486 1,236,460 1,380,065 1,392,873 1,392,065 8.1% Charge for Services 1,741,291 1,732,889 1,698,688 1,847,316 1,855,115 10.8% Interest 63,883 44,731 45,100 45,100 46,000 0.3% Rental Income 438,901 508,647 471,182 457,371 419,175 2.4% Other Sources 485,940 516,848 634,282 566,996 268,158 1.6% Total Revenues $ 15,742,117 $ 16,230,633 $ 16,693,609 $ 17,364,840 $ 17,188,083 100.0% Fund Transfers In 224,550 205,222 106,000 106,000 106,000 Total Revenues & Transfers $ 15,966,667 $ 16,435,855 $ 16,799,609 $ 17,470,840 $ 17,294,083 Use of Fund Balance Reserves: Carryforward Reserve 68,600 31,900 247,200 247,200 - Environmental Reserve 50,000 - 50,000 50,000 50,000 CIP Reserve 776,983 80,779 759,500 759,500 280,880 Hillside Reserve - - 350,000 350,000 - Uncommitted Funds 95,000 - - - - Total Operating Sources 16,957,250 16,548,534 18,206,309 18,877,540 17,624,963 B -12 CITY OF SARATOGA FINANCIAL SUMMARIES GENERAL FUND EXPENDITURES BY CATEGORY Internal Services Meetings, Events &� Charges Training 13.2% 0.4% Sheriff Services 25.4% Salary & Benefits 41.2% Consultant &� Contract Services Materials & 12.9% Fees & Charges Supplies 4.5% 1.4% FY 2013/14 EXPENDITURES BY CATEGORY B -13 FY 2010 /11 FY 2011 /12 FY 2012/13 FY2012/13 FY2013/14 % of Expenditure Category Actuals Actuals Adjusted Estimated Proposed Total Salary & Benefits $ 6,710,412 $ 6,074,360 $ 6,730,125 $ 6,497,210 6,852,713 41.2% Materials & Supplies 150,910 163,990 185,270 181,503 228,507 1.4% Fees & Charges 734,205 708,175 782,440 751,640 742,169 4.5% Consultant & Contract Services 5,992,977 5,699,202 6,230,595 6,209,071 6,373,868 38.3% Meetings, Events & Training 63,668 37,783 61,270 52,230 70,745 0.4% Community Grants & Events 165,915 116,203 127,856 124,033 156,972 0.9% Internal Services Charges 1,798,212 1,899,748 2,033,578 2,033,578 2,202,851 13.2% Total Expenditures $ 15,616,298 $ 14,710,797 $ 16,151,134 $ 15,849,265 $ 16,627,824 100.0 "/. Fund Transfers Out: 876,983 280,000 859,500 1,209,500 380,880 Total Expenditures & Transfers $ 16,493,281 $ 14,990,797 $ 17,010,634 $ 17,058,765 $ 17,008,704 B -13 CITY OF SARATOGA FINANCIAL SUMMARIES GENERAL FUND TAX REVENUES CITIES OF SANTA CLARA COUNTY - TAX REVENUES PER CAPITA ® Business License Tax ■ Transient Occupancy Tax ■ Sales Tax ■ Property Tax Campbell Cupertino Gilroy Los Altos Los Altos Hills Los Gatos Milpitas Monte Sereno Morgan Hill Mountain 'View Palo Alto San Jose Santa Clara SARATOGA Sunnyvale $- $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 FY 20011/12 TAX REVENUES AND PER CAPITA NOTES: *Most recent information available Sales Tax - includes Sales Tax portion temporarily received as Property Tax effective with the Triple Flip B -14 Proper Tax Sales Tax Transient Occu nc Business License Amount Per capita Amount Per capita Amount Per capita Amount Per capita city Po lation Campbell 40,860 8,737,866 214 11,777,412 288 2,578,323 63 598,342 15 Cupertino 59,022 11,966,544 203 17,326,460 294 3,112,934 53 705,420 12 Gilroy 50,178 9,131,673 182 13,833,561 276 998,743 20 555,725 11 Los Altos 29,460 13,301,920 452 2,746,374 93 1,782,018 60 442,824 15 Los Altos Hills 8,027 3,536,611 441 46,155 6 - - 186,527 23 Los Gatos 29,584 7,445,902 252 9,889,100 334 1,174,485 40 1,071,620 36 Milpitas 67,476 17,357,336 257 19,403,068 288 7,067,413 105 299,073 4 Monte Sereno 3,800 1,135,601 299 10,496 3 - - 31,487 8 Morgan Hill 39,127 6,483,130 166 6,638,381 170 1,119,491 29 160,301 4 Mountain View 75,275 26,216,000 348 15,939,000 212 4,397,000 58 220,000 3 Palo Alto 65,544 26,494,000 404 22,132,000 338 9,664,000 147 - San Jose 972,000 317,215,000 326 154,026,000 158 22,451,000 23 41,134,000 42 Santa Clara 118,813 1 28,451,028 239 41,279,940 347 11,755,416 99 842,057 7 SARATOGA 30,363 8,279,947 273 1,100,489 36 205,421 7 313,984 10 Sunnyvale 142,896 43,407,026 304 31,623,449 221 7,777,583 54 1,504,737 11 Average 115,495 35,277,306 305 23,184,792 201 4,938,922 43 3,204,406 28 NOTES: *Most recent information available Sales Tax - includes Sales Tax portion temporarily received as Property Tax effective with the Triple Flip B -14 CITY OF SARATOGA FINANCIAL SUMMARIES $12, 000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 52,000,000 8- GENERAL FUND REVENUES 10 YEAR HISTORY OF KEY TAX REVENUES -1 2oo4 /o5 2oo5 /o6 2oo6 /o7 2oo7 /o8 2oo8 /og 2000 /lo 2olo /11 2o11 /m 2ol2/1,3 2o13 /14 Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals Estimated Budgeted ■ Property Tax 0 Sales Tax ® Occupancy Tax 0 Business License Tax Fiscal Year erty Tax Sales Tax Occupancy Tax Business License Tax Summary of Tax Revenues Change from Prior Year 2004/05 Actuals $ 5,334,406 $ 1,011,721 $ 146,607 $ 298,823 6,791,557 53.3% 2005/06 Actuals $ 6,141,365 $ 988,132 $ 163,222 $ 339,648 7,632,367 12.4% 2006/07 Actuals $ 7,577,444 $ 994,680 $ 195,261 $ 303,787 9,071,172 18.9% 2007/08 Actuals $ 7,922,815 $ 1,057,977 $ 211,532 $ 290,996 9,483,320 4.5% 2008/09 Actuals $ 8,155,362 $ 1,043,034 $ 151,378 $ 321,347 9,671,121 2.0% 2009/10 Actuals $ 8,194,364 $ 954,574 $ 144,151 $ 303,990 9,597,079 (0.8 %) 2010/11 Actuals $ 8,026,659 $ 990,579 $ 184,362 $ 310,273 9,511,873 (0.9 %) 2011/12 Actuals $ 8,279,947 $ 1,100,489 $ 205,421 $ 313,984 9,899,841 4.1% 2012/13 Estimated $ 8,807,682 $ 1,025,000 $ 210,000 $ 320,000 10,362,682 8.0% 2013/14 Budgeted $ 8,960,400 $ 1,050,000 $ 210,000 $ 320,000 10,540,400 10.8% NOTES: FY 2006107 Property Tax Revenues — This is the first year the City received the ongoing permanent addition of Property Tax revenues resulting from the increased allocation share per the State passed Tax Equity Allocation (TEA) Legislation. (Approximately $760,000 in FY 200610 7) B -15 CITY OF SARATOGA FINANCIAL SUMMARIES GENERAL FUND FUND BALANCE ACTIVITY GENERAL FUND Reserve Activity includes: Fund Balance Reserves reflect the cumulative effect ofrevenues and otherfinancing sources over expenditures and otherfinancing uses. Restricted Fund Balance represents legal restrictions and obligations; Committed Fund Balance represents Council directed funding for a specific and binding use; Assigned Fund Balance represents resources that reflects the City's intended use offunds; whereas Unassigned Fund Balance includes estimated year -end fund balance not previously identified for a specific purpose, and is therefore available to buffer unplanned financial situations during the fiscal year. As year -end fund balance reflects an estimate, sound finanical practices suggest retaining a sufficient amount ofundesignated fund balance to offset unexpected revenue shortfalls and operational expenditures. These Environmental Reserve accounts forfunding obligated for use in the Environmental program originally collected under the City's former solid waste agreement. The Hillside Stability Reserve reflects funding set aside for emergency roadway and retaining wall support projects. The Capital Project Reserve reflects funding designated to fund capital projects in the current orfuture fiscal years as ofbudget adoption. Prior Year Carryforward Reserves reflects an estimate offending to be set -aside for Council directed, encumbered, or designated obligations that are to be paid for in the following fiscal year. The General Fund's Working Capital Reserve was established July 1, 1999 (called Operations Reserve) at $2,000,000 to ensure sufficient cash flow funding for the General Fund. The reserve is adjusted at the end ofeach fiscal year by interest earned on the balance in the reserve at LAIF rates. Council Policy caps the reserve at 20% ofappropriations. The Fiscal Stability Reserve of$1,500,000 is to be used in the case offiscal uncertainty or disaster. Upon approval from the City Council, this reserve mayprovide reliefin the case of State takeaways, unanticipated revenue shortfalls, unexpected expenses or natural disasters. This reserve is not adjusted for interest earnings. The Development Services Reserve reflects a funding buffer to offset the revenue highs and lows for multi year development service obligations. B -16 Estimated Plus Less Sources Estimated 7/1/2013 Transfers Transfers (Uses) of 6/30/2014 General Fund Reserves: Balance Revenues In Expenditures Out Fund Balance Balance Restricted Fnvironmental Services 463,182 (50,000) 413,182 Committed Hillside Stability 550,000 550,000 Assigned Capital Projects 1,164,158 - 1,164,158 Carryforwards - - - Unassigned Worldng Capital Reserve 2,914,426 - 2,914,426 Fiscal Stability Reserve 1,500,000 - 1,500,000 Development Services 667,233 - - 667,233 OtberUnassi ned 2,082,198 17,188,083 106,000 16,627,824 380,880 50,000 2,417,577 Total Fund Balance Reserves $9,341,197 M A 110V $ 9,626,576 GENERAL FUND Reserve Activity includes: Fund Balance Reserves reflect the cumulative effect ofrevenues and otherfinancing sources over expenditures and otherfinancing uses. Restricted Fund Balance represents legal restrictions and obligations; Committed Fund Balance represents Council directed funding for a specific and binding use; Assigned Fund Balance represents resources that reflects the City's intended use offunds; whereas Unassigned Fund Balance includes estimated year -end fund balance not previously identified for a specific purpose, and is therefore available to buffer unplanned financial situations during the fiscal year. As year -end fund balance reflects an estimate, sound finanical practices suggest retaining a sufficient amount ofundesignated fund balance to offset unexpected revenue shortfalls and operational expenditures. These Environmental Reserve accounts forfunding obligated for use in the Environmental program originally collected under the City's former solid waste agreement. The Hillside Stability Reserve reflects funding set aside for emergency roadway and retaining wall support projects. The Capital Project Reserve reflects funding designated to fund capital projects in the current orfuture fiscal years as ofbudget adoption. Prior Year Carryforward Reserves reflects an estimate offending to be set -aside for Council directed, encumbered, or designated obligations that are to be paid for in the following fiscal year. The General Fund's Working Capital Reserve was established July 1, 1999 (called Operations Reserve) at $2,000,000 to ensure sufficient cash flow funding for the General Fund. The reserve is adjusted at the end ofeach fiscal year by interest earned on the balance in the reserve at LAIF rates. Council Policy caps the reserve at 20% ofappropriations. The Fiscal Stability Reserve of$1,500,000 is to be used in the case offiscal uncertainty or disaster. Upon approval from the City Council, this reserve mayprovide reliefin the case of State takeaways, unanticipated revenue shortfalls, unexpected expenses or natural disasters. This reserve is not adjusted for interest earnings. The Development Services Reserve reflects a funding buffer to offset the revenue highs and lows for multi year development service obligations. B -16 CITY OF SARATOGA FINANCIAL SUMMARIES SCHEDULE OF INTERFUND TRANSFERS Estimated Estimated Budgeted Budgeted 2012/13 2012/13 2013/14 2013/14 Fund Description Transfers In Transfers Out Transfers In Transfers Out General Funds General Fund 106,000 1,209,500 106,000 380,880 In tern al Service Funds Risk M anagement/Liability Ins - - - 25,000 Capital Project Funds Street Projects 656,818 572,818 150,000 106,000 Parks & Trail Projects 610,231 231 85,880 - Facility Projects 324,500 - 100,000 - Administrative Projects 85,000 - 85,000 15,000 Total Interfund Transfers $ 1,782,549 $ 1,782,549 $ 526,880 $ 526,880 F Y 2 013114 In terfund Transfers In General Fund Transfer In of $106, 000 from Gas Tax Fund to reimburse Engineering and Administrative Services Capital Project Funds Transfer In of $420,880 is comprised of: 1. $150, 000 from GF Reserve for Capital to CIP Street projects 2. $45,880from GFReservefor Capital to CIP Parks projects 3. $100, 000 from GF Operations to Facilities 4. $85,000 from GFReserves for Capital to CIP Admin projects. $25, 000 from Internal Services and $15, 000 from Admin CIP to CIP Parks Projects FY2013114lnterfund Transfers Out $380,880 transfer from the General Fund is comprised of- 1. $100, 000 annual transfer to the CIP Facilities Fund for projects 2. $150, 000 to CIP Streets for projects 3. $45,880 to CIP Parks for projects 3. $85, 000 to CIP Admin for Risk Management, CMO Document Imaging and Wildfire Protection projects $25, 000 from Risk Management and $15, 000 from Administrative Projects to Parks & Trails for Wildfire Protection Plan $106,000 is comprised of $106,000 from CIP Gas Tax Fund to reimburse Engineering and Administrative Services FY2012113 Interfund Transfers In General Fund Transfer In of $106, 000 from Gas Tax Fund to reimburse Engineering and Administrative Services Capital Project Funds Transfer In of $1,676,549 is comprised of 1. $190, 000 from GF Reserve for Capital to CIP Street projects 2. $610, 000 from GF Reserve for Capital to CIP Parks project 3. $100, 000 from GF Operations, $224, 500 from GF Reserve and $231 from Annual Facilities to CIP Facilities 4. $85,000 from GFReserves for Capital to CIP Admin projects 5. $466,818 Transfer of Grant $'s to speck project FY2012113 Interfund Transfers Out $1,209,500 transfer from the General Fund is comprised of- 1. $100, 000 annual transfer to the CIP Facilities Fund for projects 2. $190, 000 to CIP Streets for projects 3. $224, 500 to CIP Facilities for City Hall Emergency Power, Security System Phase III, Theater Master Plan & JP Wood Floor 4. $6101 000 to CIP Parks for Saratoga to the Sea Master Plan and Hakone Hillside project 5. $85,000 to CIPAdmin for Risk Management, Business Development and CMO Document Imaging Projects $572,818 is comprised of $106,000 from CIP Gas Tax Fund to reimburse Engineering and Administrative Services and a transfer from Annual Streets to speck project B -17 CITY OF SARATOGA FINANCIAL SUMMARIES FUND BALANCE ACTIVITY FY 2013/14 Internal Service Funds 7/1/2013 Plus Plus Less Less Sources 6/30/2014 Estimated Revenues & Transfers Exp & Transfers (Uses) of Estimated 216,638 Balance Carryfwds In Carryfwds Out Fund Bal Balance General Fund Workers Compensation 285,925 Restricted 270,748 - 230,177 Environmental Services 463,182 (50,000) 413,182 Committed 24,920 IT Services Hillside Stability 550,000 550,000 Assigned Vehicle & Equip Maintenance 16,985 Capital Projects 1,164,158 1,164,158 Carryforwards - - Un assign ed 183,098 Vehicle & Equip Replacement Working Capital Reserve 2,914,426 2,914,426 Fiscal Stabilization Reserve 1,500,000 1,500,000 Development Services 667,233 - - - - - 667,233 Other Unassigned 2,082,198 17,188,083 106,000 16,627,824 380,880 50,000 2,417,577 Total General Fund $ 9,341,197 $ 17,188,083 $ 106,000 $ 16,627,824 $ 380,880 $ - $ 9,626,576 Other Unassigned Fund Balance Reservice reflects the operating budget's ongoing revenues, expenditures, carryforwards, transfers in and out, and the use of fund balance reserves. Committed, Assigned, and the remaining Unassigned Reserves reflectfunding held in compliance with speciticfund balancepolicy and Council direction. The Restricted Reserve accounts for funding obligated for use in the Environmental program originally collected under the City's former solid waste agreement Special Reven u e Fun us Landscape & Lighting Districts 618,000 486,931 602,084 502,847 Total Special Revenue Funds $ 618,000 $ 486,931 $ $ 602,084 $ $ $ 502,847 Special Revenue Funds account for legally restricted revenues and obilgations. Landscape & Lighting Fund budgeted expenditures typically include all available funds to allow for use in unplanned repairs if necessary, but are not anticipated to be used in full each year. Internal Service Funds Liability /Risk Management 216,638 465,995 450,536 25,000 207,097 Workers Compensation 285,925 215,000 270,748 - 230,177 Office Stores Fund 21,470 67,000 63,550 24,920 IT Services 281,248 400,000 460,226 221,021 Vehicle & Equip Maintenance 16,985 250,000 232,750 34,235 Building Maintenance 158,368 825,000 800,270 183,098 Vehicle & Equip Replacement 443,309 200,000 240,000 403,309 IT Equipment Replacement 150,456 55,000 59,200 - 146,256 Total In tern al Service Funds $ 1,5743398 $ 2,477,995 $ $ 2,577,280 $ 25,000 $ $ 1,450,112 Internal Service Funds account provide operational costing for citywide services. Two of these funds are equipment replacement funds which charge back to departments the cost of the assets over their lifespan, to ensure replacement funding is available when required, and to charge an appropriate annual cost for the asset. Replacement Fund balances reflect funding accumulated to date for asset replacement. The remaining Internal Service Funds provide for the cost ofservices and insurance in a fair, allocated manner. Debt Service Funds GO Bond Debt Service 905,293 851,500 889,860 866,933 Total Debt Service Funds $ 905,293 $ 851,500 $ $ 889,860 $ $ $ 866,933 Debt Service Funds manage the repayment of City debt. The City issued General Obligation Bonds in 2001 for the library expansion project. The Fund reflects the property tax assessment receipts, and the debt principal & interest payments made during the fiscal year. Fund Balance reflects the City's reserve for this debt issuance. Currently, the assessment revenues are intentionally set less than expenditures to reduce the Fund Balance to an appropriate debt level. B -18 CITY OF SARATOGA FINANCIAL SUMMARIES FUND BALANCE ACTIVITY FY 2013/14 7/1/2013 Plus Plus Less Estimated Revenues & Transfers Expenditures & Balance Carryforwards In Carryforwards Less Source & 6/30/2014 Transfers (Use) of Estimated Out Fund Bal Balance Capital Improvement Plan Funds Street Projects 2,216,932 9,464,186 150,000 11,725,118 106,000 Parks & Trails Projects 722,636 867,027 85,880 1,675,544 - - Facility Projects 236,952 102,523 100,000 404,475 - 35,000 Administrative Projects 173,771 18,402 85,000 262,173 15,000 - Total Capital Improvement Funds $ 3,350,291 $ 10,452,138 $ 420,880 $ 14,067,310 $ 121,000 $ $ 35,000 The above CIP funds are included at a summary level. Capital revenues include all outstanding funding sources identified as a source offends for projects, however not all funding is expected to become available in the fiscal year. Similarly, appropriated expenditures are not expected to be expended as most are multi -year projects. Funds will be reduced to actuals at year -end and the remaining project balance will be rolled forward. FUND BALANCE TOTALS $ 15,789,179 $ 31,456,647 $ 526,880 $ 34,764,359 S 526,880 $ - $ 12,481,468 B-19 CITY OF SARATOGA FINANCIAL SUMMARIES FUND BALANCE RESERVES 5 YEAR COMPARATIVE HISTORY 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 Actual Actual Actual Estimated Budgeted Fund Balance Reserves YE Balance YE Balance YE Balance YE Balance YE Balance General Fund Restricted Environmental Services 563,182 513,182 513,182 463,182 413,182 Committed Hillside Stability Reserve 300,000 500,000 600,000 550,000 550,000 Assign ed Capital Projects 726,983 500,000 1,923,658 1,164,158 1,164,158 Carryforwards 68,600 326,900 247,201 - - Unassigned Working Capital 2,889,077 2,903,522 2,914,426 2,914,426 2,914,426 Fiscal Stability Reserve 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 Development Services 632,380 632,380 667,233 667,233 667,233 Uncollected Deposits 44,791 44,791 44,791 - - Other Unassigned 1,285,666 563,290 518,631 2,082,198 2,417,577 Total General Fund Reserves 8,010,679 7,484,065 8,929,122 9,341,197 9,626,576 Special Reven u e Funds CDBG Program Fund (9,621) - - - - SHARP Program Fund 210,033 - - - - Landscape &Lighting Districts 440,389 504,126 562,504 618,000 502,847 Total Special Revenue Funds 640,802 504,126 562,504 618,000 502,847 Internal Service Liability / Risk Management 244,562 134,905 134,757 216,638 207,097 Workers Compensation 198,592 224,104 231,966 285,925 230,177 Office Support Services 26,830 15,831 11,220 21,470 24,920 IT Services 213,940 231,063 256,701 281,248 221,021 Vehicle & Equipment Maintenance 54,258 42,817 23,031 16,985 34,235 Building Maintenance 202,569 208,518 200,926 158,368 183,098 Vehicle & Equipment Replacement 236,230 331,374 437,089 443,309 403,309 IT Equipment Replacement 186,686 185,567 156,760 150,456 146,256 Total Internal Service Reserves 1,363,667 1,374,179 1,452,449 1,574,398 1,450,113 Debt Service 2001 Series Library GO Bonds 892,593 850,657 862,414 905,293 866,933 Total Debt Service 892,593 850,657 862,414 905,293 866,933 Trust & Agency Library Capital Improvement 351,360 - - - - KSAR Trust Fund 109,842 Tota1Trust &AgencyReserves 461,202 - - - - OPERATING BUDGET RESERVES $11,368,943 $10,213,026 $11,806,490 $12,438,888 $12,446,469 B - 20 CITY OF SARATOGA FINANCIAL SUMMARIES FUND BALANCE RESERVES 5 YEAR COMPARATIVE HISTORY 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 Actual Actual Actual Estimated Budgeted Fund Balance Reserves YE Balance YE Balance YE Balance YE Balance YE Balance Capital Project Funds Street Project Funds 2,331,056 2,428,830 2,265,634 2,216,932 - Park & Trail Project Funds 624,854 956,391 655,463 722,636 - Facility Improvement Funds 525,258 942,051 493,709 236,952 35,000 Administrative Project Funds 224,773 148,139 129,400 173,771 - Total Capital Projects Funds 3,705,940 4,475,411 3,544,206 3,350,291 35,000 TOTAL RESERVES $15,074,883 $14,688,437 $15,350,696 $15,789,179 $12,481,469 GRAPHIC REPRESENTATION OF GENERAL FUND AND TOTAL OF ALL FUNDS 5 YEAR FUND BALANCE HISTORY, BUDGET YEAR, AND 5 YEAR TREND PROJECTION + General Fund Balance --El— Total All Fund Balance 20,000,000 16,000,000 12,000,000 8,000,000 4,000,000 �1 °`� g110 Q111 1112 211 �'`� 11� 11� �l1`� 11�' �,11� 20p 2�p 2p1 �p1 X01 �01a 2 2�1 �Q1 ��y1� �p1 Note - FY 2013/14 fund balance (in white) and five years forward reflect the full expenditure of the Capital Budget in the first year, thereby causing a steep drop and a continued zero balance from that point forward in the graph above. The full appropriation of the capital project budget is to allow for full encumbrance and completion of the projects during the fiscal year, however in most cases this will not occur and project balances will roll forward into the following fiscal year. Future year projections represent a sustainable operating and capital budget with zero growth in outlaying year's fund balances. B -21 CITY OF SARATOGA FINANCIAL SUMMARIES DEPARTMENT REVENUES BY PROGRAM FY 2010/11 Actuals FY 2011/12 Actuals FY 2012/13 FY 2012/13 FY 2013/14 Adopted Estimated Proposed Council & Commissions General Fund Program: City Council 600 2,400 600 600 Citv Commissions - - - - Total Council & Commissions $ 600 $ 2,400 $ 600 $ 600 City Manager's Department 98,294 102,822 169,563 138,380 129,883 General Fund Program: 177,166 107,099 85,000 128,461 90,000 City Manager's Office - - 1,000 1,000 1,000 City Clerk 20,820 20,412 12,400 2,017 - 40 Total City Manager's Department S 20,820 $ 20,412 $ 13,400 $ 3,017 1,000 Finance & Administrative Services Department qu General Fund Program: 200,000 200,000 215,000 215,000 250,000 Finance Services 58,574 49,758 50,000 50,760 51,500 Human Resources - - - - - Internal Service Funds: 460,115 491,241 464,734 477,215 486,931 Office Support Services 38,535 50,626 67,000 66,300 67,000 Information Technology Services 400,000 400,000 400,000 400,000 400,000 IT Equipment Replacement 50,000 50,000 46,236 46,236 55,000 Total Finance &Administrative Services $ 547,108 $ 550,384 $ 563,236 $ 563,296 573,500 Community Development General Fund Program; Development Services 521,545 591,958 517,500 521,925 522,200 Advanced Planning 149,563 169,574 180,000 189,000 200,000 Code Compliance 12,491 9,600 8,265 6,365 6,365 Building & Inspection Services 1,050,497 1,151,517 1,256,500 1,319,880 1,322,250 Special Revenue Funds: CDBG Program Fund 300,692 - - - - SHARP Program Fund 714 - - - - Total Community Development $ 2,035,502 $ 1,922,649 $ 1,962,265 $ 2,037,170 2,050,815 Public Works Departm en t General Fund Program: General Engineering 98,294 102,822 169,563 138,380 129,883 Development Engineering 177,166 107,099 85,000 128,461 90,000 Environmental Services 24,110 23,571 339,817 376,218 348,954 Streets & Storm Drains 11,560 2,912 12,568 47,388 40,000 Parks & Landscape Maintenance 278,799 351,076 291,662 284,597 289,418 Internal Service Funds: Vehicle & Equipment Maintenance 200,000 200,000 215,000 215,000 250,000 Vehicle & Equipment Replacement 100,000 115,715 100,000 100,000 200,000 Special Revenue Fund: Landscape & Lighting Districts 460,115 491,241 464,734 477,215 486,931 Total Public Works Department $ 1,350,044 $ 1,394,436 $ 1,678,344 $ 1,767,259 1,835,186 B -22 CITY OF SARATOGA FINANCIAL SUMMARIES DEPARTMENT REVENUES BY PROGRAM FY 2010/11 Actuals FY 2011/12 Actuals FY 2012/13 FY 2012/13 FY 2013/14 Adjusted Estimated Proposed Council & Commissions General Fund Program: City Council 600 2,400 600 600 City Commissions - - - - Total Council & Commissions $ 600 $ 2,400 $ 600 $ 600 City Manager's Department General Fund Program: City Manager's Office - - 1,000 1,000 1,000 City Clerk 20,820 20,412 12,400 2,017 - Total City Manager's Department $ 20,820 $ 20,412 $ 13,400 $ 3,017 i 1,000 Finance & Administrative Servi ces Deparmmen t 98,294 102,822 169,563 138,380 129,883 General Fund Program: 177,166 107,099 85,000 128,461 90,000 Finance Services 58,574 49,758 50,000 50,760 51,500 Human Resources - - - - - • Internal Service Funds: 278,799 351,076 291,662 284,597 289,418 Office Support Services 38,535 50,626 67,000 66,300 67,000 Information Technology Services 400,000 400,000 400,000 400,000 400,000 IT Equipment Replacement 50,000 50,000 46,236 46,236 55,000 Total Finance& Administrative Services $ 547,108 $ 550,384 $ 563,236 $ 563,296 573,500 Landscape& Lighting Districts 460,115 491,241 464,734 477,215 486,931 Community Development $ 1,350,044 $ 1,394,436 $ 1,678,344 $ 1,767,259 I General Fund Program: Development Services 521,545 591,958 517,500 521,925 522,200 Advanced Planning 149,563 169,574 180,000 189,000 200,000 Code Compliance 12,491 9,600 8,265 6,365 6,365 Building& Inspection Services 1,050,497 1,151,517 1,256,500 1,319,880 1,322,250 Special Revenue Funds: CDBG Program Fund 300,692 - - - - SHARP Program Fund 714 - - - - Total Community Development $ 2,035,502 $ 1,922,649 $ 1,962,265 $ 2,037,170 2,050,815 Public Works Department General Fund Program: General Engineering 98,294 102,822 169,563 138,380 129,883 Development Engineering 177,166 107,099 85,000 128,461 90,000 Environmental Services 24,110 23,571 339,817 376,218 348,954 Streets & Storm Drains 11,560 2,912 12,568 47,388 40,000 Parks & Landscape Maintenance 278,799 351,076 291,662 284,597 289,418 Internal Service Funds: Vehicle & Equipment Maintenance 200,000 200,000 215,000 215,000 250,000 Vehicle & Equipment Replacement 100,000 115,715 100,000 100,000 200,000 St) ecial Revenue Fund: Landscape& Lighting Districts 460,115 491,241 464,734 477,215 486,931 Total Public Works Department $ 1,350,044 $ 1,394,436 $ 1,678,344 $ 1,767,259 1,835,186 B -23 CITY OF SARATOGA FINANCIAL SUMMARIES DEPARTMENT REVENUES BY PROGRAM FY 2010/11 Actuals Recreation &Facilities Department FY 2011/12 Actuals FY 2012/13 FY 2012/13 FY 2013/14 Adjusted Estimated Proposed General Fund Proaam: 224,550 205,222 106,000 106,000 106,000 Recreation Services 652,281 614,400 685,500 700,100 746,000 Teen Services 4,287 2,758 5,500 3,000 5,500 Facility Rentals 225,787 235,579 262,900 243,109 253,250 Internal Service Funds: 47,111 39,219 28,722 134,058 102,523 Building Maintenance 732,601 725,000 750,000 749,999 825,000 Total Recreation Department $ 1,614,956 $ 1,577,736 $ 1,703,900 $ 1,696,208 1,829,750 Public Safety General Fund Pro r� am: Public Safety Services 661,253 684,430 751,319 723,767 420,025 Emergency Preparedness - 9,700 - (30) 12,216 Total Public Safety $ 661,253 $ 694,129 $ 751,319 $ 723,737 432,241 Non-Departmental General Fund Program: General Administration 11,794,462 12,100,422 12,063,515 12,628,281 12,749,522 Legal Services 30 - - 22 - Community Grants - - - - Community Events - 645 - - - Internal Service Funds: Risk Management/Liability Ins 275,014 352,455 468,527 468,527 465,995 Workers Compensation Ins 221,966 219,287 255,000 246,000 215,000 Debt Service Funds 2001 Series Bond Debt Service Fund 972,940 13,387,316 850,600 911,788 851,500 Trust & A egencv Funds Library Capital Improvement Fund - - - - - KSAR Community Access 18,573 - - - - Total Non - Departmental $ 13,282,985 $ 26,060,125 $ 13,637,642 $ 14,254,619 14,282,017 Cap tat Imp rovemen t Projects 224,550 205,222 106,000 106,000 106,000 Caital Improvement Funds 781,272 400,308 656,818 656,818 150,000 Street Projects 2,223,355 3,455,125 5,266,615 2,226,261 9,464,186 Park & Trail Projects 877,706 647,874 555,765 213,507 867,026 Facility Projects 47,111 39,219 28,722 134,058 102,523 Administrative Projects 5,072 5,736 175,000 156,598 18,402 Total Capital ImprovementPr*cts $ 3,153,244 $ 4,147,954 $ 6,026,101 $ 2,730,424 10,452,137 Operating Transfers In General Fund 224,550 205,222 106,000 106,000 106,000 Capital Projects - Streets 781,272 400,308 656,818 656,818 150,000 Capital Projects - Parks & Trails 198,791 25 610,000 610,231 85,880 Capital Projects - Facilities 810,418 264,659 500,401 324,500 100,000 Capital Projects - Administrative - 55,941 85,000 85,000 85,000 Total Operating Transfers In $ 2,015,031 $ 926,156 $ 1,958,219 $ 1,782,549 526,880 Total R even u es an d Tran sfers In $ 24,681,543 $ 37,296,381 $ 28,295,026 $ 25,558,879 31,983,526 B - 24 CITY OF SARATOGA FINANCIAL SUMMARIES City Manager's Department General Fund Proerams: City Manager's Office 695,114 508,150 485,274 502,256 515,246 City Clerk 323,836 290,432 337,670 335,990 315,670 Human Resources* 437,043 - - - - Total City Manager's Departmen t $ 1,455,993 $ 798,582 $ 822,944 S 838,246 830,916 Administrative Services Department General Fund Proerams: Finance Services DEPARTMENT EXPENDITURES 800,562 912,356 855,108 BY PROGRAM Human Resources * - 366,263 340,922 FY 2010 /11 FY 2011/12 FY 2012/13 FY 2012/13 FY 2013/14 92,821 Actuals Actuals Adjusted Estimated Proposed Council & Commissions 55,236 59,250 56,050 63,550 General Fund Proerams: 382,877 374,362 422,758 375,453 City Council 130,898 126,832 157,901 154,901 171,089 City Commissions 23,442 25,317 30,442 27,577 30,770 Total Council & Commissions 154,340 152,149 188,343 182,478 201,859 City Manager's Department General Fund Proerams: City Manager's Office 695,114 508,150 485,274 502,256 515,246 City Clerk 323,836 290,432 337,670 335,990 315,670 Human Resources* 437,043 - - - - Total City Manager's Departmen t $ 1,455,993 $ 798,582 $ 822,944 S 838,246 830,916 Administrative Services Department General Fund Proerams: Finance Services 795,490 800,562 912,356 855,108 1,014,516 Human Resources * - 366,263 340,922 336,207 371,856 Internal Service Funds: 184,066 92,821 96,967 105,194 101,500 Office Stores Fund 49,534 55,236 59,250 56,050 63,550 Information Technology Services 382,877 374,362 422,758 375,453 460,226 IT Equipment Replacement 51,119 53,844 52,600 52,540 59,200 Total Administrative Services Dept $ 1,279,019 $ 1,650,268 $ 1,787,886 $ 1,675,358 1,969,348 Community Development General Fund Prourams: Development Services 821,240 822,267 917,270 935,967 975,955 Advanced Planning 148,916 144,716 162,020 161,499 233,121 Code Compliance 184,066 92,821 96,967 105,194 101,500 Building& Inspection Services 827,540 827,991 914,384 896,241 934,263 Sp ecial Revenue Funds 1,988,066 1,925,312 1,944,472 1,919,323 2,084,951 CDBG Program Fund - - - - - SHARP Program Fund 210,748 - - - - Total Community Development 2,192,510 1,887,796 2,090,641 2,098,901 2,244,838 Public Works Department General Fund Proerams: General Engineering 465,610 469,404 471,625 487,981 493,949 Development Engineering 187,417 191,598 200,513 207,598 208,074 Environmental Services 496,370 545,492 650,264 630,112 676,188 Streets & Storm Drains 1,182,999 1,186,626 1,278,166 1,284,391 1,378,138 Parks & Landscape Maintenance 1,988,066 1,925,312 1,944,472 1,919,323 2,084,951 Internal Service Funds: Equipment Maintenance 211,441 219,786 225,477 221,046 232,750 Vehicle & Equipment Replacement 4,856 10,000 95,000 93,780 240,000 Special Revenue Funds Landscape& Lighting Districts 396,379 432,862 633,929 421,719 602,084 Total Public Works Department 4,933,140 4,981,080 5,499,446 5,265,950 5,916,135 B - 25 CITY OF SARATOGA FINANCIAL SUMMARIES DEPARTMENT EXPENDITURES BY PROGRAM FY 2010 /11 FY 2011 /12 FY 2012/13 FY 2012/13 FY 2013/14 Actuals Actuals Adjusted Estimated Proposed Recreation &Facilities Department General Fund Programs: Recreation Services 945,962 900,930 981,588 965,730 1,029,859 Teen Services 66,461 67,859 72,611 68,964 57,101 Facility Rentals 309,728 300,708 341,945 315,254 363,435 Internal Service Funds: Building Maintenance 726,653 732,592 767,229 792,557 800,270 Total Recreation Department 2,048,805 2,002,090 2,163,373 2,142,505 2,250,665 Public Safety General Fund Programs: Public Safety Services 4,423,899 4,241,260 4,336,785 4,334,485 4,410,788 Emergency Preparedness 43,840 68,854 63,678 63,228 105,367 Total Public Safety 4,467,738 4,310,113 4,400,463 4,397,713 4,516,154 Non - Departmental General Fund Programs: General Administration 593,948 431,480 1,024,047 784,848 696,357 Legal Services 358,496 259,720 302,378 352,378 302,661 Community Grants 156,476 109,459 107,856 107,856 132,600 Community Events 9,439 6,744 20,000 16,177 24,372 Internal Service Funds: Liability /Risk Management 359,670 352,603 489,249 386,646 450,536 Workers Compensation 196,454 211,425 284,684 192,041 270,748 Debt Service Fund: 2001 Series Bond Debt Service Fund 1,014,876 13,375,558 869,285 868,910 889,860 Trust & Agency Funds: KSAR Community Access 128,416 - - - - Total Non - Departmental 2,817,775 14,746,989 3,097,499 2,708,856 2,767,134 Capital Improvem en t Fu n ds.- Street Projects 2,590,294 3,693,733 7,616,249 2,358,963 11,725,118 Park & Trail Projects 649,959 948,802 1,820,997 756,333 1,675,544 Facility Projects 381,677 492,379 987,832 715,314 404,476 Administrative Projects 81,707 43,986 389,399 197,226 262,173 Total Capital Improvement Projects 3,703,637 5,178,900 10,814,477 4,027,838 14,067,311 Operating Transfers Out General Fund 876,983 280,000 859,500 1,209,500 380,880 CDBG Fund to GF & CIP 291,071 - - - - Liability/Risk Mgmt Fund 25,000 - - 25,000 IT Equipment Replacement to CIP - 24,963 - - Library Capital Trust Fund to CIP 351,360 - - - - Capital Projects - Streets 316,558 324,896 572,818 572,818 106,000 Capital Projects - Parks & Trails 95,000 25 231 231 - Capital Projects - Facilities 59,058 259,841 - - - Capital Projects - Administrative - 36,430 - - 15,000 Total Operating Transfers Out 2,015,031 926,156 1,432,549 1,782,549 526,880 Total Expenditures and Transfers Out 25,067,989 36,634,122 32,297,621 25,120,394 35,291,239 * Human Resources moved from City Manager Department to Administrative Services Department in FY2011112 B - 26 CITY OF SARATOGA FINANCIAL SUMMARIES STAFFING INFORMATION B -27 CITY OF SARATOGA FINANCIAL SUMMARIES SUMMARY OF EMPLOYEE SALARY & BENEFITS To Be Updated The City of Saratoga's total budgeted salary and benefit expenditures are projected to total $7.3 million dollars in FY 2012/13, representing approximately 23.3% of total budgeted expenditures. Approximately $6.5 million (89.0 %) of labor costs are funded in the General Fund and represent 39.2% of General Fund's budgeted expenditures. Budgeted salary and benefit amounts reflect a $23,000 decrease from last year's budgeted amount as a result of a reduction in funded positions offset against increases in salaries and benefits. After the Code Compliance Specialist position was vacated in FY 2011/12, code compliance duties were shifted to other staff positions. For instance, Building staff now follow up on complaints and field checks. Administrative functions were absorbed by the department's office staff, special events by City Manager's staff, parking ticket appeals by Finance staff, and the DMV compliance program by Human Resources staff. This restructuring was continued into FY 2012/13 as the assessment of the position is ongoing. Staff changes will also occur in the Recreation and Facilities Department with a scheduled retirement early in FY 2012/13. A shift in work schedules and duties will provide a .15 FTE reduction between two Office Specialist positions. A portion of the savings from the FTE reduction will be utilized in FY2012/13 to increase the Executive Administrative Assistant to the City Manager /Deputy City Clerk position back to 1.00 FTE from .90 FTE in FY 2011/2012. For comparison, budgeted FY 2011/12 salaries and benefits amounts were already discounted by approximately $260,000 (5 %) in anticipation of labor negotiations. Therefore, the additional decrease in salary and benefit expenditures budgeted this year is primarily from additional staff reductions. Last year's labor negotiations resulted in a shift of the employee's portion of the California Public Employees' Retirement System (Ca1PERS) charges paid fully by employees rather than the City. This will result in a savings of approximately $340,000 for FY 2012/13. Additional savings will accrue from reductions in auto allowance and uniform allowance, changes in overtime and call -out pay. For new employees hired after July 1, 2011, medical benefits are limited to fixed dollar amounts ($800 per month for single coverage, $1,200 per month for double coverage, and $1,500 per month for family coverage). For new employees hired on or after May 12, 2012, a second tier Ca1PERS retirement package with 2% at 60 will be in effect. The annual savings equals the difference between the pool- specific rates times the second tier payroll. Although the expected saving from implementing this new tier will be minimal at first, such savings will slowly increase over time. Salary and budget projections are prepared using known data on current employees, current MOU provisions, and California Public Employees' Retirement System (Ca1PERS), medical, dental, vision, long -term disability, and life insurance premiums. In some years, these projections are known and stable and in others there is more fluctuation, as in the case of years in which MOUs expire and new MOU provisions are scheduled to be put into place. The City does not use a vacancy factor for salary projections as there is very little turnover due both to the economic recession, and to the necessity in most cases to re -fill a position quickly due to the City's limited staffing. Most staff positions are at top step, and health insurance benefits are budgeted at the employee's current status (Single /Double /Family) under their chosen health insurance plan to provide accuracy in the total salary and benefit costs. However, a small contingency is built into budgeted salary numbers to offset some unknowns which may occur. Employee Compensation and Benefits Personnel costs are comprised of salaries for full and part-time personnel, inclusive of holidays and paid time off and benefits which includes health, life and disability insurances, and retirement contributions. Annual wage increases and benefit adjustments are negotiated under each bargaining unit's Memorandum of Understanding (MOU) contracts. B - 28 CITY OF SARATOGA FINANCIAL SUMMARIES Memorandums of Understanding Each of the three bargaining units have an MOU: 1) the Saratoga Management Association for the four Department Directors; 2) the Northern California Carpenter's Regional Council, Carpenters Forty Six Counties Conference Board and Their Affiliated Local Unions (UNION) for the fifteen Public Work's Corporation Yard staff, and; 3) the Saratoga Employees Association (SEA) for all other represented staff, which is the City's largest bargaining group with 32 full and part-time employees. The City Manager, the Human Resources Manager, and hourly (un- benefited) staff are not represented by associations. All three bargaining units entered into a four year MOU agreement effective from July 1, 2011 through June 30, 2015. The City Manager has a negotiated contract, and the Human Resources Manager falls under a negotiated contract for unrepresented staff. Wages Salaries are adjusted as defined by the MOUs. Effective July 1, 2012 SMO and SEA negotiated contracts provide cost of living adjustments based upon the annual average for the 12 month period of January 1 to December 31 of the U.S. Department of Labor, Bureau of Labor Statistics, "All Urban Consumers (CPI -U)" for the San Francisco- Oakland -San Jose region.. The UNION negotiated contract included an hourly rate increase effective November 14, 2011 and calls for a reopener if Property and Sales Tax revenues increase by more than 3 %, however specific wage increase adjustments are not stated. Employee Benefits The City provides medical, dental, life insurance, and long -term disability insurance to its benefitted employees and Ca1PERS retirement to eligible employees. Currently, the City self -funds short-term disability coverage for 75% of wages after an employee's paid time off is exhausted, up until long -term coverage activates at six months. Employees have the option to enhance their long -term disability and life insurance plans, and to obtain vision care coverage through a group plan. The City contracts for health insurance through Ca1PERS, offering employees a choice between Kaiser, Blue Cross, or Blue Shield medical plans. Although Ca1PERS has substantial negotiating powers, health insurance premiums continue to increase each year. For October 1, 2008 through the 2012 calendar year, the City has contracted with Ameritas as its dental insurance provider. Ameritas increased the City's premium rates by 33.80% in January 2010, 9.30% in January 2011, and 6% in January 2012. Staff is currently working with the City's broker to lower premium costs through changes in plan design. The Principal Life and AD &D Insurance premium increases are a result of demographic changes (age /gender /salary level are all part of the risk factor analysis). The City's broker negotiated these rates down by 20% effective April, 2011. Pension Plan The City of Saratoga's 2% at 55 and 2% at 60 defined benefit plans are part of Ca1PERS "Miscellaneous 2% at 55 Risk Pool" and "Miscellaneous 2% at 60 Risk Pool ", cost sharing multiple - employer defined benefit plans. The City's payment of Ca1PERS Contribution Rates is comprised of employee and employer contributions. The Employee Contribution Rate under the 2% at 55 and 2% at 60 benefit plans is constant at 7 %, while the Employer Contribution Rates are determined each year through an actuarial valuation of the plan. In addition to the above two pension plans, effective January 1, 2013 the State mandated 2% @62 plan will go into effect for all new Ca1PERS member employees. Employer rates are based on Ca1PERS' principle assumptions, including but not limited to an Investment Rate of Return and an Annual Payroll Growth Rate. Various agency -based factors such as number and age of employees, increases and decreases in employee FTEs and employee wages, as well as impacts from other agencies in the benefit plan pool are all contributing factors in the calculation. B - 29 CITY OF SARATOGA FINANCIAL SUMMARIES Since 2003, Ca1PERS has utilized the assumption that the value of its stock, bonds and other holdings would increase by 7.75% a year, and in fact, Ca1PERS annualized Investment Rate of Return (IRR) was slightly higher than the 7.75% target until the economic downturn began in 2009. Since then, with returns diminishing heavily, Ca1PERS has requested the Investment Rate of Return be adjusted. In March 2012, the Ca1PERS Board agreed to a reduction in the IRR to 7.5 %, to be phased in over two years. This IRR change will increase Miscellaneous Employer Contribution Rates between 1 -2 %, while most Public Safety Plan's Employer Contribution Rate will increase by 2 -3 %. The City's rate increases will begin in FY 2013/14. Even though the economic downturn has impacted investment returns heavily, the "Miscellaneous 2% at 55 Risk Pool" was able to sustain the plan long -term because the plan design was based on actuarially sound principles. Other enhanced plans (2.5g_55, 2.7k55 for miscellaneous, and the further enhanced plans such as 3 %@50 or 55 for Public Safety ) were built based on short term assumptions that were estimated, not realized, and ultimately proved to be financially unsustainable. Those plans will experience greater PERS rate increases in the coming years. A five year history of Saratoga's employer contribution rates for the 2 % @55 Risk Pool is provided below, along with the new PERS employer contribution rate for FY 2012/13, and the projected PERS employer contribution rate for FY 2013/14. The 2 % @60 Risk Pool Plan (2nd tier) went into effect on May 12, 2012 for new employees. 2% @55 2% @60 Fiscal Employer Employer Year Contribution Rate Contribution Rate FY 2007/08 11.390% FY 2008/09 11.070% FY 2009/10 1 11.276% FY 2010/11 11.863% FY 2011/12 12.856% 8.438% FY 2012/13 F 13.031% 8.552% FY 2013/14 13.200% unknown As shown in the above schedule, the City of Saratoga pension plan Employer Contribution Rate reflects slight increases for FY 2013/14. The FY 2013/14 rates are Ca1PERS projections from their October 2011 valuation report which assumes there are no amendments and/or liability gains or losses (such as larger than expected pay increases, or more retirements than expected). As gains and losses cannot be predicted in advance; the projected FY 2013/14 employer contribution rate is just an estimate. Ca1PERS will provide actual rates for FY 2013/14 for all cities in the annual valuation reports to be issued in October or November, 2012. B -30 CITY OF SARATOGA FINANCIAL SUMMARIES PEMHCA Section 22892 of the Public Employees' Medical and Hospital Care Act ( PEMHCA), establishes contract agencies minimum monthly health premium contribution for their participating active membership. The employer contribution is adjusted annually by the board to reflect any changes in the medical care component of the CPI -U. The minimum employer contribution is $112 for calendar year 2012, and $115 for calendar year 2013. The City includes this amount in the budget as an ongoing retiree cost, which currently amounts to approximately $20,000 per year for an estimated 15 retirees. B -31 CITY OF SARATOGA FINANCIAL SUMMARIES TOTAL FUNDED POSITIONS BY DEPARTMENT Finance & Administrative Services Department 2009/10 2010/11 2011/12 2012/13 2013/14 Full Time Equivalents (FTE) Funded Funded Funded Funded Funded City Manager's Department - - - - 1.00 City Manager 1.00 1.00 1.00 1.00 1.00 Assistant City Manager 1.00 0.90 - - - Exec Assistant to CM / Deputy City Clerl 0.75 0.75 0.90 1.00 1.00 City Clerk 1.00 1.00 1.00 1.00 1.00 Human Resources Manager 1.00 1.00 - - - Administrative Analyst I/II 1.00 0.90 1.00 1.00 1.00 Total FTEs 5.75 5.55 3.90 4.00 4.00 Finance & Administrative Services Department Administrative Services Director 1.00 1.00 1.00 1.00 1.00 Accounting Supervisor - - - - 1.00 Accountant I/1I 1.00 0.90 0.90 0.90 0.90 Accounting Technicians 3.00 3.00 3.00 3.00 3.00 Human Resources Manager - - 1.00 1.00 1.00 Human Resources Technician - - - - 0.75 Information Technology Administrator 1.00 1.00 1.00 1.00 1.00 Information Technology Technician - - - - 1.00 Total FTEs 6.00 5.90 6.90 6.90 9.65 Community Developmen t Departmen t Community Development Director 1.00 1.00 1.00 1.00 1.00 Senior Planner 1.00 1.00 1.00 1.00 1.00 Planner I/II 2.00 2.00 2.00 2.00 2.00 Plan Check Engineer 1.00 1.00 1.00 1.00 1.00 Senior Arborist 1.00 1.00 1.00 1.00 1.00 Building Official 1.00 1.00 1.00 1.00 - Sr. Building Inspector - - - - 1.00 Building Inspector 2.00 2.00 2.00 2.00 2.00 Permit Technician - - - - 1.00 Office Specialist II/III 2.00 2.00 2.00 2.00 2.00 Code Compliance Specialist 1.00 1.00 1.00 - - Total FTEs 12.00 12.00 12.00 11.00 12.00 Public Works Department Public Works Director 1.00 1.00 1.00 1.00 1.00 Senior Civil Engineer 1.00 1.00 1.00 1.00 1.00 Assistant /Associate Engineer 1.00 1.00 1.00 1.00 1.00 Administrative Analyst I/II 1.00 0.90 0.90 0.90 1.00 Office Specialist II/III 1.75 1.75 1.75 1.75 1.75 Parks Maintenance Manager 1.00 1.00 1.00 1.00 1.00 Parks Maintenance Lead 1.00 1.00 1.00 1.00 1.00 Parks Maintenance Specialist 1.00 1.00 1.00 - - Parks Maintenance Worker I/II/III 6.00 6.00 5.90 6.00 6.00 Street Maintenance Manager 1.00 1.00 1.00 1.00 1.00 Street Maintenance Lead 1.00 1.00 1.00 1.00 2.00 Street Maintenance Specialist 1.00 1.00 1.00 1.00 - Street Maintenance Worker 1/11/111 4.00 4.00 4.00 4.00 4.00 Total FTEs 21.75 21.65 21.55 20.65 20.75 B -32 CITY OF SARATOGA FINANCIAL SUMMARIES TOTAL FUNDED POSITIONS BY DEPARTMENT City Man ager's Departmen t HR Specialists 2009/10 2010/11 2011/12 2012/13 2013/14 Student Interns Funded Funded Funded Funded Funded Recreation &Facilities Department - - - - 120 Recreation & Facilities Director 1.00 1.00 1.00 1.00 1.00 Senior Recreation Supervisor 1.00 1.00 1.00 - - Recreation Supervisor 1.00 1.00 1.00 1.00 1.00 Recreation Coordinator - - - 2.00 2.00 Facility Coordinator 0.60 0.60 0.60 0.60 0.60 Office Specialist II/II1 1.75 1.90 1.90 1.00 1.00 Facility Maintenance Manager 1.00 1.00 1.00 1.00 1.00 Facility Maintenance Lead 1.00 1.00 1.00 1.00 1.00 Facility Maintenance Worker I/II/III 2.00 2.00 2.00 2.00 2.00 Total FTEs 9.35 9.50 9.50 9.60 9.60 Maintenance Workers 2,080 2,040 2,000 - - TOTAL STAFF FTEs 54.85 54.60 53.85 52.15 56.00 FUNDED HOURLY STAFFING BY DEPARTMENT 1,200 1,362 1,500 2009/10 2010/11 2011/12 2012/13 2013/14 500 Funded Funded Funded Funded Funded City Man ager's Departmen t HR Specialists 1,600 1,568 - - - Student Interns 900 - - - 320 Executive Assistant (backfill) - - - - 120 Administrative Services Department Senior Accountant 960 960 1,200 1,200 200 IT Technician 2,080 2,040 2,000 2,000 - HR Technician - - 1,768 1,568 - Student Interns - - - - 320 Community Developmen t Departmen t GIS/Forestry Intern 940 940 940 940 - Office Specialist II/III 1,200 800 800 800 800 Public Works Department Engineering Inspectors* 3,588 3,588 2,760 2,760 2,760 Maintenance Workers 2,080 2,040 2,000 - - Recreation &Facilities Department Facility Attendents 1,200 1,362 1,500 1,500 1,500 Recreation Leaders 2,034 2,667 500 500 3,335 Total Annual Hours 16,582 15,965 13,468 11,268 9,355 Temporary Hours converted to FTEs 7.97 7.68 6.48 5.42 4.50 Total FTEs 62.82 62.28 60.33 57.57 60.50 B -33 CITY OF SARATOGA FINANCIAL SUMMARIES STAFFING BY DEPARTMENT 6o 50 40 30 10 0 2009/lo 2010/11 2011/12 2012/13 2013/14 Five Year History ■ City Manager's Department ❑ Community Development ®Recreation & Facilities Department Full Time Equivalents (FTE) ®Finance & Administrative Services 0Public Works. Department TOTAL STAFF BY DEPARTMENT 2009/10 2010/11 2011/12 2012/13 2013/14 Funded Funded Funded Funded Funded City Manager's Department 5.75 5.55 3.90 4.00 4.00 Finance & Administrative Services 6.00 5.90 6.90 6.90 9.65 Community Development 12.00 12.00 12.00 11.00 12.00 Public Works Department 21.75 21.65 21.55 20.65 20.75 Recreation & Facilities Department 9.35 9.50 9.50 9.60 9.60 Total Staff by Department 54.85 54.60 53.85 52.15 56.00 B -34 CITY OF SARATOGA FINANCIAL SUMMARIES STAFFING BY FUND 60.04 ;70.00 40.00 30.00 20.00 10.00 Five Year History 2000/10 2010;11 ❑ Special Revenue Funds Full Time Equivalents (FTE) General Fund City Manager's Department Administrative Services Community Development Public Works Recreation Department Total Gen eral Fu n d FTEs Internal Service Funds City Manager's Department Administrative Services Public Works Recreation Department Total Internal Service Funds 2011/12 2012,E13 2013 /14 ❑ Internal Service Funds ® General Fund TOTAL DEPARTMENTAL S TAFF BY FUND 2009/10 2010/11 2011/12 2012/13 2013/14 Funded Funded Funded Funded Funded 1.15 1.15 1.20 1.20 2.30 5.70 5.50 3.90 4.00 4.00 4.85 4.75 5.70 5.70 7.35 12.00 12.00 12.00 11.00 12.00 21.05 20.95 20.85 19.95 20.05 5.20 5.35 5.30 5.70 5.65 48.80 48.55 47.75 46.35 49.05 0.05 0.05 - - - 1.15 1.15 1.20 1.20 2.30 0.70 0.70 0.70 0.70 0.70 4.15 4.15 4.20 3.90 3.95 6.05 6.05 6.10 5.80 6.95 Total FTEs 54.85 54.60 53.85 52.15 56.00 B -35 CITY OF SARATOGA FINANCIAL SUMMARIES wk 4 . - B -36 TOTAL STAFF BY DEPARTMENT 7,128 8,883 5,390 4,300 4,300 240 4,300 2,034 900 2,667 500 500 3,335 640 Full Time Equivalents (FTE) 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Temporary hours converted to FTE Funded Funded Funded Funded Funded Funded Funded Funded Funded Funded Funded City Manager's Department 5.75 5.75 4.80 4.80 6.00 6.00 5.75 5.55 3.90 4.00 4.00 Finance & Administrative Services 6.90 6.90 5.75 6.00 7.00 6.00 6.00 5.90 6.90 6.90 9.65 Community Development 13.00 13.00 13.00 14.00 14.00 14.00 12.00 12.00 12.00 11.00 12.00 Public Works Department 21.75 20.75 20.75 21.75 22.75 21.75 21.75 21.65 21.55 20.65 20.75 Recreation & Facilities Department 10.35 10.35 10.35 10.60 10.60 10.60 9.35 9.50 9.50 9.60 9.60 Public Safety - - 0.20 0.20 - - - - - - - Total Staff by Department 57.75 56.75 54.85 57.35 60.35 58.35 54.85 54.60 53.85 52.15 56.00 FUNDED HOURLY STAFFING BY DEPARTMENT 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Funded Funded Funded Funded Funded Funded Funded Funded Funded Funded Funded City Manager's Departm en HR Specialists 1,400 1,400 1,400 1,400 1,800 1,600 1,600 1,568 - Student Interns - - - - 240 - 900 - 320 Executive Assistant (backfrll) 900 900 900 900 - 800 - - - - 120 Administrative Services Department Senior Accountant - - - - - 960 960 960 1,200 1,200 200 Accountant/BudgetAnalyst 2,137 1,907 1,040 1,040 1,040 - - - - - - Accounting Technician - - - - 1,040 2,000 - - - - IT Technician 1,052 1,052 1,052 1,040 - 2,000 2,080 2,040 2,000 2,000 HR Technician - - - - - - - 1,768 1,568 - Student Interns - - - - - - 320 Community Development Departm en t GIS/Forestry Intern 940 940 940 940 940 940 940 940 940 940 - Planning Intem - - - - 450 450 - - - - - Office Specialist II/IH - - 1,200 1,200 800 800 800 800 Public Works Department Engineering Inspectors* - - - 1,840 1,840 1,840 3,588 3,588 2,760 2,760 2,760 Maintenance Workers 2,080 2,080 2,080 4,080 2,080 2,080 2,080 2,040 2,000 - - Recreation & Facilities Department Facility Attendents 1,387 2,025 1,700 1,700 1,700 1,700 1,200 1,362 1,500 1,500 1,500 Recreation Leaders 7,128 8,883 5,390 4,300 4,300 4,300 2,034 2,667 500 500 3,335 Total Annual Hours 17,024 19,187 14,502 17,240 15,430 19,870 16,582 15,965 13,468 11,268 9,355 Temporary Hours converted to FTEs 8.18 9.22 6.97 8.29 7.42 9.55 7.97 7.68 6.48 5.42 4.50 Total FTEs 65.93 65.97 61.82 65.64 67.77 67.90 62.82 62.28 60.33 57.57 60.50 Less: Rec Temporary Hours Less: Summer Intern Hours 7,128 8,883 5,390 4,300 4,300 240 4,300 2,034 900 2,667 500 500 3,335 640 Total Annual Hours w/o Rec/Interns 9,896 10,304 9,112 12,940 10,890 15,570 13,648 13,298 12,968 10,768 5,380 Temporary hours converted to FTE 4.76 4.95 4.38 6.22 5.24 7.49 6.56 6.39 6.23 5.18 2.59 TOTAL FTEs w/o Rec & Interns 62.51 61.70 59.23 63.57 65.59 65.84 61.41 60.99 60.08 57.33 58.59 FY 2013/14 Proposed Staffing Revisions Hours Benefits & or FTE's Salary Taxes Total Finance & Administrative Services Finance Division Accounting Supervisor /Manager 1.00 116,896 33,753 150,649 Temporary Sr. Acct 1200 hours (65,817) (5,035) (70,852) HR Division HR Technician 0.75 56,121 16,116 72,237 Temporary HR Asst 960 hours (32,314) (2,472) (34,786) Temporary HR Asst 608 hours (20,465) (1,566) (22,031) IT Division IT Technician 1.00 74,506 16,058 90,564 Temporary IT Technician 2000 hours (67,320) (7,811) (75,131) Department Total 61,607 49,043 110,650 Community Development Building & Inspections Sr. Building Inspector 1.00 112,216 33,697 145,913 Building Official (1.00) (136,614) (29,255) (165,869) Permit Technician 1.00 80,517 29,370 109,887 Temporary Forestry Intern 940 hours (14,100) (1,079) (15,179) Elimination of Contract Services Backfill (20,000) - (20,000) Office Specialist III 1.00 70,013 18,970 88,983 Office Specialist II (1.00) (62,566) (17,998) (80,564) Department Total 29,466 33,705 63,171 Public Works Streets Division Streets MW - Lead 1.00 80,538 35,919 116,457 Streets MW - Specialist (1.00) (79,061) (35,674) (114,735) Streets MW - II 1.00 61,090 33,372 94,462 Streets MW - 1 (1.00) (58,219) (32,996) (91,215) Parks Division Parks MW III 1.00 72,779 19,367 92,146 Parks MW II (1.00) (70,720) (19,097) (89,817) Department Total 6,407 891 7,298 Recreation & Facilities Recreation Division In House Rec Leader Staffing + Expenses 35,300 Offset by Camp Fee Revenue Increase (35,200) Facilities Division Facility Maintenance Manager 1.00 108,546 39,618 148,164 Facility Maintenance Supervisor (1.00) (104,894) (39,137) (144,031) Department Total 3,652 1 481 F 4,233 PROPOSED STAFFING REVISION TOTAL $ 101,132 1 $ 84,120 1 $ 185,352 New position /title in Black - represents new cost Old position /title in Red - represents old cost or offset Wildwood Park Bridge Rehabilitation General BEP Private OBAG Gas Tax VTA Total Project Joe's Trail - SSR to Arroyo de Arguello Fund Park in Lieu Grant Grant Grant Funding Grant CDBG Grant Funding Village Sidewalk Grant 163,000 $ 163,000 General Fund Operations 4,206,000 544,000 $ 4,750,000 Annual Facility Improvements $ 100,000 $ 100,000 General Fund Reserves Annual Storm Drains 50,000 $ 50,000 Annual Sidewalk 50,000 $ 50,000 Annual Roadway Safety 50,000 $ 50,000 Annual Risk Management 50,000 $ 50,000 Annual CMO Imaging 10,000 $ 10,000 Guava Ct / Fredericksburg 45,880 $ 45,880 Wildfire Protection Plan 25,000 $ 25,000 Wildwood Park Bridge Rehabilitation 125,000 $ 125,000 Joe's Trail - SSR to Arroyo de Arguello 350,000 250,000 $ 600,000 Village Sidewalk Grant 163,000 $ 163,000 Prospect /Saratoga Improvements 4,206,000 544,000 $ 4,750,000 Total Proposed New Project Funding 380,880 125,000 350,000 250,000 4,369,000 544,000 - - $ 6,018,880 ADA Accessible Signals 400,000 $ 400,000 Citywide Signal Upgrade - Phase II 100,000 400,000 $ 500,000 Total Proposed New Project Funding 480,880 125,000 350,000 250,000 4,369,000 544,000 400,000 400,000 $ 6,918,880 General Fund Fund Balance Reserves FY 2012/13 1 1 FY 2013/14 6/30/2012 6/30/2013 6/30/2014 Actual Fund Estimated Estimated FB FB Estimated Budgeted Budgeted FB FB Estimated GENERAL FUND RESERVES Balance Revenues Expenditures Uses Allocations Fund Balance Revenues Expenditures Uses Allocations Fund Balance Restricted Reserves Environmental Service 513,182 (50,000) 463,182 (50,000) 413,182 Committed Reserves Hillside Stability 600,000 (350,000) 300,000 550,000 100,000 650,000 Assigned Reserves Capital & Efficiency Reserve 1,923,658 (1,504,944) 418,714 (280,880) 1,650,000 1,787,834 Ca rryforwards 247,201 (247,201) - - Unassigned Reserves Working Capital 2,914,426 11,000 2,925,426 13,500 2,938,926 Fiscal Stability 1,500,000 1,500,000 1,500,000 Development Services 667,233 667,233 667,233 Compensated Absences - 200,000 200,000 200,000 Unassigned Fund Balance $ 563,423 $ 17,470,840 $ (17,408,765) $ 2,152,145 $ (511,000) $ 2,266,642 $ 17,294,083 $ (17,008,707) $ 330,880 $ (1,763,500) $ 1,119,398 Totals $ 8,929,122 $ 17,470,840 $ (17,408,765) $ $ $ 8,991,197 $ 17,294,083 $ (17,008,707) $ - $ $ 9,276,573 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES FUND BALANCE RESERVE POLICY SUMMARY Fund Balance Reserve Policy Overview Overview section added to outline the overall purpose and intent of Fund Balance Reserves, how the reserves are classified per accounting standards, and the Council established allocation priorities for the fund balance reserves. General Fund — Reserve Policies General Fund Reserve's descriptions were revised to define each reserve's purpose, funding goal, reserve utilization and replenishment guidelines, and authority levels required for use. The "Operations Reserve" was renamed to "Working Capital Reserve'; and the "Economic Uncertainty Reserve" was renamed to "Fiscal Stabilization Reserve" to more accurately reflect their purposes. The Uncollected Deposits Reserve will be closed at the FY 2012113 year -end, and is to be eliminated from the Fund Balance Reserve Policies. With the revisions, the General Fund reserve will include: • Working Capital Reserve (previously known as Operations Reserve) • Fiscal Stabilization Reserve (previously known as Economic Uncertainty Reserve) • Carryforward Reserve • Hillside Stability Reserve • Future Capital Improvements & Efficiency Projects Reserve • Environmental Services Reserves • Development Services Reserves • Compensated Absences Reserve • Council Discretionary Reserve • Other Unassigned Reserve Special Revenue Fund Reserves Special Revenue Reserve descriptions were added to define the purpose of the Landscape & Lighting Fund reserves. Currently, this is the only type of Special Revenue Fund in the City's Financial Structure. Debt Service Fund Reserves The Library General Obligation (GO) Bond Debt Fund Reserve was added to define the purpose and funding levels of the City's debt fund. Capital Improvement Funds Capital Fund Reserves descriptions were added to identify the funds within the Capital Program, and that the fund balances are established solely to hold the program's project funds. The four Capital Programs include: • Street Improvement Funds • Park & Trail Improvement Funds Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES • Facility Improvement Funds • Administrative Improvement Funds Internal Service Fund Reserves Internal Service Fund Reserve descriptions were added to identify the reserve purposes, funding of the reserve, authority levels, and utilization and replenishment guidelines. Each Internal Service Fund has very specific purposes with funding levels established to support cash flow needs and minimize interfund loans. Reserves are established for each of the following Internal Service Funds: • Liability /Risk Management Reserves • Workers Compensation Fund • Office Support Fund • Information Technology Services Fund • Vehicle & Equipment Maintenance Fund • Building Maintenance Fund • Vehicle & Equipment Replacement Fund • Office Technology Equipment Replacement Fund Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES FUND BALANCE RESERVE POLICY OVERVIEW Principles As a general philosophy to practice fiscal responsibility, the City of Saratoga attains conservative and cautious financial management through responsible, sustainable, and enforceable fiscal policies and internal controls to ensure prudent and efficient use of resources. The City's budget practices utilize long -range planning as a decision making tool, and annually adopts a structurally balanced fiscal plan that retains the City's fiscal health, preserves essential services, and supports short and long -term goals in a financially judicious manner. Budgeted revenues are conservatively stated and budgeted expenditures are comprehensive, allowing for the annual operational and capital improvement goals to be completed. With effectively managed revenue streams and efficient use of resources, fiscal year -end operational budget surpluses are available to fund future capital improvement projects and contribute to the City's fiscally responsible reserve accounts. The City's policy is to fund the Operating Budget with current funding, and to fund the Capital Budget with surplus and dedicated capital funding resources. The City does not incur debt for operations or capital improvements except under extraordinary circumstances and with citizen support. Under these circumstances the City will seek voter approval for General Obligation (GO) Bond Debt for major infrastructure rehabilitation. Additionally, the City practices conservative and cautious investment practices through limiting its investments to the State's Local Agency Investment Fund (LAIF). LAIF's extensive professional investment staff and conservative investment practices ensure prudent financial management of the City's fiscal reserves. Prudent financial management dictates that the City reserves a portion of its funds for future use to: maintain fiscal stability; ensure the continued orderly operation of government and provision of services to residents; and to mitigate current and future risks. As a general budget precept, the City Council decides when and whether to appropriate available funds to and from a reserve account. Use of reserve funds are not authorized without either specific direction in the annual budget or by a separate City Council action unless specifically noted in policy. Responsible fiscal stewardship also requires adequate reserve be maintained for all known liabilities and established City Council and community directed initiatives. In the following Fund Balance /Reserve Policy overviews, the descriptions are to include identification of the fund type and classification, the purpose of the reserve, minimum and maximum funding goals (from a long -term perspective) if appropriate, guidelines on utilization of the reserve and by what authority, and how the reserve is funded on an ongoing basis, or after utilization. Fund Balance and Net Position For Governmental Fund types, a fund's equity is the "fund balance ", for which the Governmental Accounting Standards Board ( "GASB ") Statement No. 54 defines five specific classifications of fund balance. Governmental Funds include the General Fund, Special Revenue Funds, Capital Project Funds, and Debt Service Funds). The five fund balance classifications are intended to identify the extent to which a specific fund balance reserve is available for appropriation and therefore spendable, or if the reserve is constrained by special restrictions, if any. Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES Equity classifications for non - governmental funds are "Net Position" which is defined as Restricted or Unrestricted Net Position. A third component of a non - governmental fund's equity is "Net Investment in Capital Assets" however as this refers to a non - monetary portion of equity, it is not discussed in this policy section. Non - governmental fund types include Proprietary Funds (Enterprise and Internal Service Funds) and Fiduciary Funds (Trust Funds). Currently, the City's non - governmental fund types are limited to Internal Service Funds. Governmental Fund Type Reserve Classifications The Governmental Reserve classifications are defined as follows, including the applicable reserves that fall into the classification: Non - Spendable Fund Balance Represents resources that are inherently non - spendable from the vantage point of the current period. The City does not presently hold Non - Spendable Reserve funds Restricted Fund Balance Represents fund balance that is subject to external enforceable legal restrictions. The City maintains the following restricted fund balances under this designation: • Environmental Service Fund Balance — in the General Fund • Fund Balance — in the Special Assessment Funds • Fund Balance — in the Debt Service Fund Committed Fund Balance Represents fund balance constrained by limitations the government imposes upon itself at its highest level of decision making and remains binding unless removed in the same manner. The City maintains the following fund balances under this designation: • Hillside Stability Reserve — in the General Fund • CIP Fund(s) Project Reserve — in the Capital Improvement Program Funds Assigned Fund Balance Represents fund balance identified by Council for an intended use; however as no legal obligations exist, the funds may be re- designated and utilized for another purpose if Council chooses. The City maintains the following General Fund reserves under this designation: • Future Capital Improvement & Efficiency Project Reserve — in the General Fund • Carryforward Reserve — in the General Fund Unassigned Fund Balance Represents funding which may be held for specific types of uses or stabilization purposes, but is not yet directed to be used for a specific purpose. Only General Fund reserves can be designated under the "Unassigned" fund balance classification. Other funds are structured for specific purposes and their fund balances are therefore considered "assigned" for that purpose. • Working Capital Reserve — in the General Fund • Fiscal Stabilization Reserve - in the General Fund • Development Services Reserve — in the General Fund • Uncollected Deposits Reserve — in the General Fund • Other Unassigned Fund Balance Reserve — in the General Fund Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES Unassigned Fund Balance Ratio The General Fund Unassigned Reserve (collective total) is to be maintained at a minimum of 20% of General Fund appropriations. General Fund Year -End Allocations After the City's financial records are finalized and audited, with legal obligations and liability reserves funded, revenues in excess of expenditures then close out to the Other Unassigned Fund Balance Reserve. From the Other Unassigned Fund Balance, funding in excess of $500,000 will be distributed in the following order: 1. Working Capital Reserve interest allocation. 2. Repayment of Fund Balance Reserve loan back to established level (e.g. borrowing from the Fiscal Stabilization or Hillside Stability Reserves). 3. Annual contribution of $100,000 to Hillside Stability Reserve, until reserve balance reaches $1,000,000. 4. Remaining funds are allocated to the Future Capital Improvement and Cost Efficiency Projects Reserve. GENERAL FUND — FUND BALANCE RESERVE POLICIES Working Capital Reserve In accordance with the City's cautious and conservative fiscal philosophy, the City's general prevailing financial policy holds that the City should fund daily operations with current resources in order to avoid use of short -term Tax Revenue Anticipation Notes (TRANS). To support this policy a Working Capital Reserve is established to meet cash flow requirements and prevent short -term borrowing, which in turn ensures the continuance of services to the public while also maintaining the City's credit worthiness. To provide adequate working capital, the City shall maintain a minimum reserve of 60 days of the following year's General Fund budget expenditures and up to a maximum reserve amount equal to 90 days of the following year's General Fund budget expenditures. This reserve falls under the Unassigned Fund Balance classification. A Working Capital Reserve of $2,000,000 was established in April 1994. Effective June 30, 2000, interest earnings accrue to the reserve at the end of each fiscal year based on the annual LAIF rate, with the intention to increase the reserve balance amount in proportion to Operating Budget increases. Fiscal Stabilization Reserve Under the Unassigned Fund Balance classification, a Fiscal Stabilization Reserve of $1,500,000 is established to provide temporary financing for budget stabilization caused by fiscal downturns, unanticipated extraordinary expenditures related to a natural disaster or calamity, or from an unexpected liability created by Federal or State legislative action. Fiscal stabilization needs may occur from revenue declines (over one or more years) of more than 5% of either property tax, the combined total of other taxes, or General Fund revenues in total, or from unanticipated extraordinary operational increases of more than 5% such as from a natural disaster or Federal or State legislative action. Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES Council may utilize funding at budget adoption, by adoption of a budget adjustment resolution during the course of the year, or after a Federal, State, or locally declared emergency. In the event a locally declared emergency takes place, the City Manager has the authority to spend funds until such time as the City Council takes action. Reserve appropriations are to be replenished from year -end net operations, as available, on a priority basis. Carryforward Reserve Under the Assigned Fund Balance classification, the Reserve for Carryforwards represents funding held at the end of each fiscal year for specific unexpended operating budget liabilities to be paid in the following fiscal year. The reserve is reconciled at the end of each year to both release prior year carryforward funding and reserve current year carryforward funding into the following budget year. Staff determines the year -end reserve amount after all fiscal year payments are finalized; the reserve amount is conceptually appropriated by Council each year in the budget adoption resolution. Hillside Stability Reserve Under the Committed Fund Balance classification, a Hillside Stability Reserve of $1,000,000 is established for unanticipated or unforeseen emergency or extraordinary costs related to hillside degradation, inclusive of slide prevention and mitigation, slide repair, and associated drainage and roadwork. The reserve is to be increased by $100,000 each fiscal year from General Fund year -end net operations until a $1,000,000 reserve cap is reached. Use of the reserve requires that an analysis be prepared and presented to Council for approval, or in the event of a landslide requiring immediate emergency work the Public Works Director may direct use of up to 10% of the reserve to make repairs and mitigate further damage until Council takes action. Reserve funding is to be used for emergency work which exceeds emergency operational funding provided for in the Operations Budget. Upon use, refunding of the reserve shall again resume at $100,000 each fiscal year. Future Capital Improvements & Efficiency Projects Reserve Under the Assigned Fund Balance classification, the Reserve for Future Capital Improvement & Efficiency Projects shall be maintained to fund as yet directed but uncommitted to specific capital and efficiency improvement projects. Funding is derived from General Fund accumulated net operations (if available) and is therefore considered a "one -time funding source ". Funds are held in this reserve until Council reviews funding requests and approves a use or transfer to another fund. Use of the reserve funding is at the Council's discretion, but typically occurs as part of the annual budget adoption after Council conducts a comprehensive review of capital and efficiency improvement needs. Reserve replenishment is dependent upon net operations funding in subsequent fiscal years. Environmental Services Reserve Under the Restricted Fund Balance classification, the Environmental Services Reserve represents revenues collected under a prior funding structure for environmental purposes, and is therefore restricted for use in funding environmental program costs such as street sweeping and storm drain cleaning services. Per policy, the Environmental Service Reserve is being utilized through annual budget appropriations of $50,000. The Environmental Services Reserve originated from a one -time funding structural change and therefore will not be replenished when depleted. Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES Development Services Reserve Under the Unassigned Fund Balance classification, the Development Services Reserve provides fiscal stability for the Community Development Department's planning and building programs. Development projects are often multi -year activities in which revenues may be collected in one year, while project expenditures may extend over several years. This reserve represents accumulated planning and building funds from years when revenues exceeded expenditures. The reserve is subsequently utilized to offset excess planning and building program expenditures through annual budget appropriations in the years where revenues are not sufficient, thereby acting as an overall funding stabilizer for multi -year development activities. Use of reserve funding is restricted to 1/3 or the reserve balance in any given fiscal year, with Council approval. Budgeted use of the Development Reserve is to be rescinded if and to the point where development revenues are sufficient to cover General Fund net operations at year -end. Funds are added to the reserve in years where Community Development Department revenues exceed Community Development Department expenditures. Compensated Absences Reserve Under the Assigned Fund Balance classification, the Compensated Absences Reserve is established to smooth expenditure fluctuations resulting from the payout of accrued leave to employees at service separation and distribution payouts. Initial reserve funding is to be established at $200,000, with a targeted goal of one -third of the compensated absences liability established at year -end. Reserve funding in excess of one -third of the liability is to be returned to the General Fund Other Unassigned Reserve. Use of the reserve occurs when total annual compensated absences payouts exceed budgeted salary funds. Large payouts decrease the compensated absences liability at year -end, thereby supporting the practice of utilizing the reserve as needed. The reserve may be replenished over a three year period. Year -end reconciling allocations to and from the reserve are approved though Council's budget resolution adoption each fiscal year; the reserve and liability amounts are determined as part of the year -end close process. Council Discretionary Reserve Under the Unassigned Fund Balance classification, the Council Discretionary Reserve represents unspent funds from the Council's annual appropriation. The reserve provides a mechanism to roll forward remaining Council Discretionary Funds as reserve funds are immediately re- appropriated into the following fiscal year. This allows Council the flexibility to take advantage of unforeseen opportunities or needs without the restriction of fiscal year boundaries. Use of the reserve funding requires Council approval. The reserve exists at year -end only when there are remaining unspent Council Discretionary funds at the end of the fiscal year. Other Unassigned Reserve The Other Unassigned Reserve represents accumulated net operations which are not allocated to other fund balance reserves, and by definition fall into the Unassigned Fund Balance classification. In the General Fund, approximately $500,000 of accumulated net operations is to remain in the Other Unassigned Fund Balance Reserve at year end to provide a buffer for unanticipated operational shortfalls and unforeseen needs. Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES Other fund's accumulated net operations are typically accounted for in a general use fund balance reserve as the funds are structured for specific purposes, whereas the General Fund is used for multiple operational purposes thereby requiring a distinction of purpose for each reserve. Council may utilize funding at budget adoption or by adoption of a budget adjustment resolution during the course of the year. The reserve is replenished from year -end net operations, as available. Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES SPECIAL REVENUE FUND — FUND BALANCE RESERVE PPOLICIES Landscape & Lighting Assessment District Funds Assessment District Funds are Special Revenue Funds, which is a type of governmental fund. As a governmental fund, the Landscape and Lighting Assessment District Funds comply with GASB 54 fund balance classifications, and by nature of the fund's purpose, fund balance reserves are classified as restricted reserves. Special Revenue Funds account for and report the proceeds of specific revenue sources that are restricted or committed to specified purposes (other than for debt service or capital projects.) A Landscape & Lighting Fund is established to account for each individual assessment district; thereby each fund has its own fund balance reserve. The minimum fund balance reserve should be sufficient to provide working capital to cover operational expenses through bond debt receipts in December, which is equitable to approximately one -half of a district's annual expenditure budget. Some districts may include capital improvement projects in addition to ongoing regular maintenance resulting in fund balance increasing over the years to accumulate sufficient resources for the improvement projects. As each district's situation is different, a district's maximum fund balance shall be determined by the Public Works Director. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. DEBT SERVICE FUND — FUND BALANCE RESERVE POLICIES Library General Obligation (GO) Bond Debt Fund The Library General Obligation (GO) Bond Debt Fund is a Debt Service Fund established to account for the financial resources accumulated for principal, interest, and cost of issuance expenditures associated with the Library Bond Debt. As Debt Service Funds are a governmental fund type, the fund reserves fall under the GASB 54 fund balance classifications. Debt Service Fund reserves are classified as Restricted as it can be spent only for specific purposes as stipulated by the bond covenants. The Library GO Bond Debt Fund was established to ensure funding is available for the GO Bond debt service requirements. At a minimum, the year -end fund balance reserve shall be sufficient to provide working capital to cover the semi - annual principal and interest debt payment due on August 1St as GO Bond tax receipts are received after the 1St debt payment is due. The reserve balance should also include sufficient funding to compensate for possible tax fluctuations as bond assessments are based as a percentage of property values not a flat amount. The fund's reserve maximum should be no more than one -year of budgeted annual expenditures. The reserve balance is increased (or reduced) through establishing assessment rates at more (or less) than the semi - annual payments and bond services require. Therefore, replenishment (or use) of the reserve is approved by Council through budget adoption and implemented through an increased (or reduced) assessment rate as a result of the fund's net operations. Fund Balance Reserve Policies April 22, 2013 • CITY OF SARATOGA FISCAL MANAGEMENT POLICIES CAPITAL IMPROVEMENT PLAN FUNDS — FUND BALANCE RESERVE POLICIES Overview Capital Improvement Funds account for the acquisition and maintenance of major capital assets other than those financed through special assessments or enterprise funds. Capital Project Funds are a type of governmental fund and therefore comply with GASB 54 fund balance classifications. As Council has directed the funding be spent for specific improvement projects, the Capital Project Fund Balance Reserves are classified as Committed Fund Balance. Budgeted capital improvement projects are funded for the scope of work approved by Council and remain assigned for that use until completed or reassigned by Council. Fund Balance amounts represent the total remaining funds of individual projects at year -end. As Fund Balance amounts are determined by the point of project completion at year -end they cannot be standardized for minimum or maximum amounts. Fund Balance is re- appropriated to the capital project in the following fiscal year for the work to be completed. Street Improvement Projects Funds Street Improvement Project Funds provide for a safe and functional roadway and pedestrian street system. Each Street Improvement Fund (CIP Street Fund, CIP Grant Fund, and Gas Tax Fund) has multiple projects which roll up into the overall fund balances, but remain designated for use by project. The CIP Street Fund receives annual funding from road impact fees, reimbursements and contributions, and transfers from other funds. The CIP Grant Fund receives federal, state, and local grants which vary in source and amount from year -to -year. Typically, CIP Grant Funds have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. The Gas Tax Fund represents annual Gas Tax and TCR allocations that are to be accounted for separately and may be audited by the State. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re- appropriated by Council into the following budget year through budget adoption. Park & Trail Improvement Project Funds Park & Trail Improvement Project Funds provide for capital improvements to the City's neighborhood and city parks and plaza, the sport fields, bike and pedestrian trails, and open space areas throughout the City. Each of the Park & Trail Improvement Funds (CIP Park & Trail Fund, CIP Tree Fund, and the CIP Park & Trail Grant Fund) have multiple projects which roll up into the overall fund balances, but remain designated for use by project. The CIP Park & Trail Fund receives annual funding from subventions, occasional Park -in -Lieu fees, reimbursements and contributions, and transfers in from other funds. The Tree Fund receives revenue from tree fines and transfers from other funds upon Council direction. The CIP Grant Fund receives federal, state, and local grants which vary in source and amount from year -to -year. Typically, CIP Grant Funds have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re- appropriated by Council into the following budget year through budget adoption. Fund Balance Reserve Policies April 22, 2013 E CITY OF SARATOGA FISCAL MANAGEMENT POLICIES Facility Improvement Funds Facility Improvement Project Funds provide for capital maintenance and improvements of the City - owned buildings and structures throughout the City. Each of the Facility Improvement Funds (CIP Facilities Fund and the Facility Grant Fund) have multiple projects which roll up into the overall fund balances, but remain designated for use by project. The CIP Facilities Fund receives annual funding from an annual General Fund transfer, from Theater Ticket Surcharge Fees, from reimbursements and contributions, and transfers from other funds. The Facility Grant Fund receives revenue from grants that varies in amount from year -to -year. Typically, CIP Grant Funds have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re- appropriated by Council into the following budget year through budget adoption. Administrative Improvement Funds Administrative Improvement Project Funds provide for major capital expenditures to improve or enhance administrative and operational systems, processes, or functions. Each of the Administrative Improvement Funds (CIP Administrative Improvement Fund and the Administrative Grant Fund) have multiple projects which roll up into the overall fund balances, but remain designated for use by individual project. The CIP Administrative Fund typically receives funding from a General Fund transfer as Administrative Grants are limited. Typically, CIP Grant Funds have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re- appropriated by Council into the following budget year through budget adoption. Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES INTERNAL SERVICE FUND — FUND BALANCE RESERVE POLICIES Overview Internal Service Funds are established to provide centralized cost centers for shared expenses and services in order to efficiently track costs and manage resources. Costs are then allocated back to the operational programs based on usage to more accurately determine cost of services. The City's Internal Service Funds include the two Insurance funds: Risk Management and Workers Compensation, four Service /Support funds: Office Support, IT Services, Vehicle & Equipment Maintenance, and Building Maintenance Funds, and two Equipment Replacement funds: the Vehicle & Equipment Replacement Fund, and the Office Technology Equipment Replacement Fund. As each fund is accounted for as a separate entity, operational revenues less expenditures result in either a positive or negative fund balance at any given point in time — Internal Service Funds are similar to the separate checking and saving accounts a person may use for different purposes. At year end, each fund's net balance is represented as the "Fund Balance Reserve ". The intent of the Internal Service Funds Reserves is to hold appropriate levels of reserves to support cash flow needs and minimize interfund loans, not to accumulate funds in excess of expected ongoing operational costs. Reserve levels are determined by the specific operational needs of the program, but typically will fall within 25 — 50% of annual budgeted expenditures. As Internal Service Funds are a type of Proprietary Fund; GASB 54 fund balance classification (for Governmental Fund types) does not apply. Instead, Internal Service Fund's financial statement reports are presented similar to private- sector businesses and use "Restricted" and "Unrestricted Net Position" to define net operational balances (equity /fund balance reserves). Unrestricted Net Position allows reserve funding to be used (with Council approval) within the general scope of the fund's purpose. Restricted Net Position reserves are limited to a purpose narrower than the purpose of the fund. For example, grant funding limited to a specifically defined use, as in remaining funds from a Risk Management Training Grant within the Liability /Risk Management Fund must be used for qualified training purposes. Most Internal Service Funds reserves are held in the Unrestricted Net Position category. Liability /Risk Management Reserve Fund The Liability /Risk Management Fund's Unrestricted Net Position reserve supports cash flow needs and minimizes interfund loans. Appropriate levels are maintained through service chargebacks to the programs, based on operational risk factors. Most claims are covered under the insurance risk pool JPA, the City is self- insured for up to $25,000 per occurrence. Non - covered claims are paid fully by the City. The Liability /Risk Management program receives funding from: allocations charged to covered departments, from grant funding, and from claim reimbursements. At year end, unspent funding flows into Unrestricted Net Position or Restricted Net Position for grant funding. Requests for use of the reserve balance are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Workers Compensation Fund The Workers Compensation Fund's Unrestricted Net Position reserve supports cash flow needs and minimizes interfund loans. Appropriate levels are maintained through service chargebacks to the Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES programs, based on operational risk factors. The purpose of the Workers' Compensation program is to provide insurance benefit coverage for employee work - related illness and /or injuries through its membership in a shared risk pool. The risk pool provides coverage up to $250,000, and excess insurance provides coverage over this amount up to $10 million. The Workers Compensation program receives funding from allocations charged to covered departments, from grant funding, and from claim reimbursements. At year end, unspent funding flows into Unrestricted Net Position, or Restricted Net Position for grant funding. Requests for use of the reserve balance are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Office Support Fund The Office Support program provides a centralized cost center for administrative office support expenses, including photocopy machine leases, postage machines, and the associated, maintenance and repair services, postage, paper, and copier supplies. For efficiency, office support costs are managed collectively and charged back to departmental programs on a use -basis allocation. Accumulated net operations are held in the Office Support Fund for working capital cash flow. The reserve is funded from the allocations charged to covered departments. At year end, unspent funding flows into Unrestricted Net Position. Requests for use of excess reserve balance are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Information Technology Services Fund Information Technology Services provide for the delivery of technology based services throughout the City's operations, including maintenance of the City's information systems and infrastructure, program implementation, streaming video, internet, landline, and wireless communications systems, cloud based technology, and support of all existing information technology as well as new technology initiatives. For efficiency, information technology costs are managed collectively and charged back to departmental programs on a service -based allocation to fund the program. Funding for the program comes from these allocations charged to covered departments. At year end, unspent funding flows into Unrestricted Net Position. Accumulated net operations are held in the Information Technology Services Fund for working capital cash flow. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Vehicle & Equipment Maintenance Fund The Vehicle & Equipment Maintenance program provides for the fuel, maintenance, and servicing of the City's fleet and major equipment to ensure all vehicles and equipment comply with manufacturer's recommendations and safety requirements. To fund the program, vehicle & equipment replacement costs are charged back to the departmental programs based on assigned usage. Accumulated net operations are held in the Vehicle & Equipment Maintenance Fund for working capital cash flow. At year end, unspent funding flows into Unrestricted Net Position. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Fund Balance Reserve Policies April 22, 2013 CITY OF SARATOGA FISCAL MANAGEMENT POLICIES Building Maintenance Fund The Building Maintenance program provides for the custodial, maintenance, and non -major repairs and building improvement services for all facilities at the Civic Center, Prospect Center, and Museum Park. Additionally, the program supports the maintenance and repair needs for the tenants of City leased buildings as defined in the lease agreements. To fund the program, total costs are allocated back to departmental programs primarily based on building space usage. Non - departmental uses are allocated to the Non - Departmental program. Accumulated net operations are held in the Building Maintenance Fund for working capital cash flow. Funding comes from the allocations charged to covered departments. At year end, unspent funding flows into Unrestricted Net Position. Requests for use of the reserve are approved by Council through budget adoption or by establishing chargeback funding levels higher or lower than budgeted expenditures. The reserve is replenished from the Fund's net operations in subsequent years. Vehicle & Equipment Replacement Reserve The Vehicle and Equipment Replacement Fund Balance Reserve accounts for accumulated funding over an asset's lifespan, to be used for the replacement of the vehicle or equipment at the end of its useful life. Initial purchases are paid for through a department's operational budget. If the purchased item is for ongoing use, the Vehicle & Equipment Replacement program appropriates an annual allocation for the replacement of the vehicles and equipment based on the asset's cost and years of life. Final determination for replacement of the asset is determined through analysis of whether the cost of maintenance equals or exceeds the cost of replacing the asset. The reserve is funded from allocations charged to covered departments and represents accumulated funding, less amounts expended for asset replacement. At year end, unspent funding is held in Unrestricted Net Position. The reserve shall be funded to provide replacement funding of vehicles and equipment in accordance with replacement schedules. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Office Technology Equipment Replacement Fund The Office Technology Equipment Replacement Fund accounts for accumulated funding over an asset's lifespan to be used for the replacement of office technology based equipment such as desktop computers and monitors, laptops and tablets, network infrastructure, and various other related equipment. Replacement costs are charged back to the departments based on assigned equipment costs. Initial purchases are paid for through a department's operational budget. If the purchased item is for ongoing use, the Office Equipment Replacement program appropriates an annual allocation for the replacement of the equipment based on the assets cost and years of life. The reserve represents accumulated funding, less amounts expended for replacements. The reserve shall be funded to provide replacement funding in accordance with replacement schedules. Funding for the reserve comes from the allocations charged to covered departments. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Fund Balance Reserve Policies April 22, 2013