Mid-Year Status & Fiscal Outlook Report
City of Placerville | California | February 8, 2011
1
Introduction Recap budget challenges Review City’s economic environment
Focus on the General Fund Discuss 2010/2011 year-to-date results Consider budgetary options & recommendations
Enterprise Fund Update
2
Budget Challenges Began General Fund budget development process with an
estimated $217,873 deficit Fourth consecutive year of declining revenues Budget Balancing Measures $100,000 Transfer from the Transportation Fund to support Dura
Patcher Machine Activities Trimmed line items in each department Deferred all capital outlay line items Conference, training, and travel line items were minimized to certificate renewal and health and safety type expenses only Minimized overtime budgets to a level accommodating health and safety related events only 3
Budget Challenges (Continued) Budget Balancing Measures (Continued) Reduced janitorial service costs Assumed closure of Aquatics Center September 2010 City Employees were instrumental in achieving a balanced budget while keeping the City running smoothly Froze all existing vacant positions Deferred salary study adjustments and COLA Continued 10% salary reduction for City Council and all employees Implemented second round of early retirement incentives (two employees) 4
Budget Challenges (Continued) Budget Balancing Measures (Continued) Pursued reimbursements for State mandated costs The City Council adopted the Fiscal Year 2010/2011 Operating
Budget in August 2010 General Fund Budget Balanced and totaled $6,442,608 Maintains essential program delivery to the greatest extent possible Purchased 21 desktop computers for the Police Department with the Homeland Security Grant ($13,188) Plan on exercising $24,248 Edward Byrne JAG Grant to purchase new patrol vehicle
5
Economic Environment Local Economic Indicators Reveal a stagnant Local
Economy: Unemployment rates remains high 12.7% in El Dorado County (December 2010) which is static since November 12.5% in Sacramento-Arden-Arcade-Roseville MSA (December 2010) down from 12.6% in November Unemployment rates have changed slightly over the past twelve months State unemployment rate is 12.3% (December 2010) 6
Economic Environment (Cont.) Recreation Program Attendance From June to July
Program Gold Bug Park Gold Bug Daily Tours Gold Bug Group Tours Total Aquatics Lap Swim Evening Public Swim Wading Pool Public Swim Water Exercise Extended Day Swim Lessons Jr. Lifeguard Camp Pool Rentals Total Special Interest Classes & Camps Youth Camps Adult Special Interest Youth Special Interest Total Adult Sports Basketball Teams (3 on 3) Basketball Teams (5 on 5) Softball Teams Volleyball Teams Total
June to July 2009
June to Increase/- % Increase/July 2010 Decrease Decrease
3,583 680 4,263
3,766 707 4,473
183 27 210
5.11% 3.97% 4.93%
487 2,007 1,468 7,471 570 2,891 1,065 27 18 16,004
717 1,730 1,258 7,987 625 2,431 883 50 18 15,699
230 -277 -210 516 55 -460 -182 23 0 -305
47.23% -13.80% -14.31% 6.91% 9.65% -15.91% -17.09% 85.19% 0.00% -1.91%
652 102 180 934
584 158 191 933
-68 56 11 -1
-10.43% 54.90% 6.11% -0.11%
9 0 73 8 90
7 0 66 10 83
-2 0 -7 2 -7
-22.22% 0.00% -9.59% 25.00% -7.78%
7
Economic Environment (Cont.) Building Division Activity
7/1/07 – 1/31/08
7/1/08 – 1/31/09
7/1/09 – 1/31/10
7/1/10 – 1/31/11
Difference
Percentage Difference
Building Permits Issued
225
217
219
204
-15
-6.85%
Plan Checks
136
93
86
78
-8
-9.3%
Description
8
Economic Environment (Cont.) Building Division Revenues
Actual Actual as of 2009/2010 01/31/11 Construction Permits Plan Check Fees
$99,622 $27,089
$42,663 $24,053
Forecasted 2010/2011 $65,000 $39,000
9
Economic Environment (Cont.) Engineering Division has experienced mixed results over the past seven months
Fee Type Development Plan Checks Development Permits Grading Plan Checks Grading Permits Boundary Line Adjustment Certificates of Compliance Planned Development Overlay Preliminary Plan Review Site Plan Review Tentative Parcel Map Tentative Subdivision Map Development T&M Accounts Misc. Engineering Fees Encroachment Permits Annual Transportation Permits Transportation Permits
July 1 to December 31, 2009
July 1 to December 31, 2010
6 4 1 2 0 1 0 0 0 0 0 4 33 43 37 13
6 4 0 0 0 0 0 0 0 0 0 8 26 24 40 14 10
Economic Environment (Cont.) State projecting a $25.4 billion budget deficit through June
30, 2012 State COPS Grant and Booking Fee funding appear to be safe through 6/30/11 but uncertain after that Proposed elimination of redevelopment as we know it Anticipate State looking to cities and counties for other ways of balancing its budget
11
Economic Environment (Cont.) City is on the road to recovery However, the road is unpaved and rocky
Fuel prices remain volatile While Wall Street enjoyed a brighter 2010, Main Street
America continued its recovery at a much slower pace Job creation and productivity are key City continues to strive for business attraction/ retention and redevelopment
12
Economic Environment (Cont.) Sales Tax Most significant local economic indicator 48% of all General Fund revenues Between April and September 2010, Sales Tax revenues shrunk by $(17,138) or -1.19% compared to the same time last year Quarter ended June 30, 2010–Receipts up by $5,277 or 0.76% (year to year) Quarter ended September 30, 2010-Receipts down by $(22,415) or -2.98% (year to year) State BOE projects a year-to-year statewide increase of 5.1% for the quarter ended December 2010 13
Economic Environment (Cont.)
Sales Tax (Continued) Actual 4th quarter results will be available in mid March Forecast Placerville’s 4th quarter growth at 0.86% BOE estimates a year-to-year Statewide increases of 3.9% and a 7% in the 1st and 2nd quarters of 2011 respectively Forecast Placerville’s 1st and 2nd quarter growth at -0.34% and 2.76% respectively Based on State estimates and current trends, staff forecasts Placerville’s 10/11 Sales Tax will total $2,909,593 which is $(155,432) or -5.07% below Budget Projected receipts slightly above the 2000/2001 level 14
Economic Environment (Cont.) City of Placerville Sales Tax Sources As of September 30, 2010 Apparel Stores
0.85%
5.84%
15.62%
General Merchandise Stores
8.04%
Other Retail Stores
7.20% 8.69%
Food Stores Eating & Drinking Places Home Furnishing & Appliances
12.90% Building Material & Farm Implements
18.85%
Auto Dealers & Auto Supplies
1.80% Service Stations
20.22%
All Other Outlets
15
Economic Environment (Cont.) City of Placerville Sales Tax Comparison 2nd and 3rd Quarter
300,000.00
250,000.00
200,000.00
150,000.00
100,000.00
50,000.00
April to September 2010 -
April to September 2009
16
Economic Environment (Cont.) City of Placerville Multi-Year Sales Tax Trend $4,500,000 $4,000,000 $3,500,000 $3,000,000
$2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000
Actual Sales Tax Revenues Adjusted for Inflation
$0
17
Focus on the General Fund Adopted Budget
Forecast
Revenues Expenditures Net Transfers In
$ 6,442,608 6,634,770 192,162
$ 6,278,921 6,559,345 192,162
Revenues over (under) Expenditures
$
$
-
Under/(Over) Budget $ 163,687 75,425 -
2.54% 1.14%
(88,262)
18
Focus on the General Fund (Cont.) Revenue Type
Adopted Budget
Forecast
Over/(Under)
Sales Tax $ 3,065,025 $ 2,909,593 $ (155,432) All Other Taxes 782,701 717,169 (65,532) Licenses & Permits 65,000 65,000 Intergovernmental Revenues 916,710 831,354 (85,356) Charges for Service 620,449 712,822 92,373 Fines & Forfeitures 263,200 244,209 (18,991) Use of Money & Property 52,523 49,024 (3,499) Other Financing Sources 677,000 749,750 72,750 Total revenues $ 6,442,608 $ 6,278,921 $ (163,687)
-5.07% -8.37% 0.00% -9.31% 14.89% -7.22% -6.66% 10.75% -2.54% 19
Focus on the General Fund (cont.) As you can see, the City has made significant budgetary adjustments since
2007 in order to adapt to the “new economy” 2006/2007 Actual
2010/2011 Forecast
Revenues Expenditures Net Transfers In
$ 8,386,136 8,173,119 (111,821)
$ 6,278,921 6,559,345 192,162
Revenues over (under) Expenditures
$
$
101,196
Increase (Decrease) $ (2,107,215) -25.13% (1,613,774) -19.74% (303,983) 271.85%
(88,262)
20
Focus on the General Fund (Cont.) Projected deficit based on current revenue and expenditure
trends Assumes continuation of 10% pay cut through 6/30/11 Revenue shortfall primarily attributable to the projected $(155,432) shortfall Sales Tax receipts Assumes pay-as-you-go costs for GASB 45 Other Post Employment Benefits (OPEB) Annual Required Contribution (ARC) No contribution for future retiree medical insurance costs
21
Focus on the General Fund (Cont.) Staff will gather input from the City Council tonight
and continue to analyze the Budget and available options Staff will return to the City Council in March with more analysis, including the 4th quarter Sales Tax results, and recommendations for eliminating the budget deficit
22
Enterprise Fund Update Measure H was approved by voters last November Proceeds will be used to reduce water and/or
wastewater rates Excess proceeds could be used to accelerate debt repayment and replace worn out lines City Council is in the process of forming a 5 person oversight committee to recommend uses for Measure H revenues and review related expenditures which will be addressed in a separate report tonight
23
Closing Comments City Council and management continue to
operate the City in a prudent and responsible manner Staff anticipates City operating costs to be well within the existing operating budget at year-end
24
Conclusion Questions? Comments?
That’s all folks!
25
1
Introduction Recap budget challenges Review City’s economic environment
Focus on the General Fund Discuss 2010/2011 year-to-date results Consider budgetary options & recommendations
Enterprise Fund Update
2
Budget Challenges Began General Fund budget development process with an
estimated $217,873 deficit Fourth consecutive year of declining revenues Budget Balancing Measures $100,000 Transfer from the Transportation Fund to support Dura
Patcher Machine Activities Trimmed line items in each department Deferred all capital outlay line items Conference, training, and travel line items were minimized to certificate renewal and health and safety type expenses only Minimized overtime budgets to a level accommodating health and safety related events only 3
Budget Challenges (Continued) Budget Balancing Measures (Continued) Reduced janitorial service costs Assumed closure of Aquatics Center September 2010 City Employees were instrumental in achieving a balanced budget while keeping the City running smoothly Froze all existing vacant positions Deferred salary study adjustments and COLA Continued 10% salary reduction for City Council and all employees Implemented second round of early retirement incentives (two employees) 4
Budget Challenges (Continued) Budget Balancing Measures (Continued) Pursued reimbursements for State mandated costs The City Council adopted the Fiscal Year 2010/2011 Operating
Budget in August 2010 General Fund Budget Balanced and totaled $6,442,608 Maintains essential program delivery to the greatest extent possible Purchased 21 desktop computers for the Police Department with the Homeland Security Grant ($13,188) Plan on exercising $24,248 Edward Byrne JAG Grant to purchase new patrol vehicle
5
Economic Environment Local Economic Indicators Reveal a stagnant Local
Economy: Unemployment rates remains high 12.7% in El Dorado County (December 2010) which is static since November 12.5% in Sacramento-Arden-Arcade-Roseville MSA (December 2010) down from 12.6% in November Unemployment rates have changed slightly over the past twelve months State unemployment rate is 12.3% (December 2010) 6
Economic Environment (Cont.) Recreation Program Attendance From June to July
Program Gold Bug Park Gold Bug Daily Tours Gold Bug Group Tours Total Aquatics Lap Swim Evening Public Swim Wading Pool Public Swim Water Exercise Extended Day Swim Lessons Jr. Lifeguard Camp Pool Rentals Total Special Interest Classes & Camps Youth Camps Adult Special Interest Youth Special Interest Total Adult Sports Basketball Teams (3 on 3) Basketball Teams (5 on 5) Softball Teams Volleyball Teams Total
June to July 2009
June to Increase/- % Increase/July 2010 Decrease Decrease
3,583 680 4,263
3,766 707 4,473
183 27 210
5.11% 3.97% 4.93%
487 2,007 1,468 7,471 570 2,891 1,065 27 18 16,004
717 1,730 1,258 7,987 625 2,431 883 50 18 15,699
230 -277 -210 516 55 -460 -182 23 0 -305
47.23% -13.80% -14.31% 6.91% 9.65% -15.91% -17.09% 85.19% 0.00% -1.91%
652 102 180 934
584 158 191 933
-68 56 11 -1
-10.43% 54.90% 6.11% -0.11%
9 0 73 8 90
7 0 66 10 83
-2 0 -7 2 -7
-22.22% 0.00% -9.59% 25.00% -7.78%
7
Economic Environment (Cont.) Building Division Activity
7/1/07 – 1/31/08
7/1/08 – 1/31/09
7/1/09 – 1/31/10
7/1/10 – 1/31/11
Difference
Percentage Difference
Building Permits Issued
225
217
219
204
-15
-6.85%
Plan Checks
136
93
86
78
-8
-9.3%
Description
8
Economic Environment (Cont.) Building Division Revenues
Actual Actual as of 2009/2010 01/31/11 Construction Permits Plan Check Fees
$99,622 $27,089
$42,663 $24,053
Forecasted 2010/2011 $65,000 $39,000
9
Economic Environment (Cont.) Engineering Division has experienced mixed results over the past seven months
Fee Type Development Plan Checks Development Permits Grading Plan Checks Grading Permits Boundary Line Adjustment Certificates of Compliance Planned Development Overlay Preliminary Plan Review Site Plan Review Tentative Parcel Map Tentative Subdivision Map Development T&M Accounts Misc. Engineering Fees Encroachment Permits Annual Transportation Permits Transportation Permits
July 1 to December 31, 2009
July 1 to December 31, 2010
6 4 1 2 0 1 0 0 0 0 0 4 33 43 37 13
6 4 0 0 0 0 0 0 0 0 0 8 26 24 40 14 10
Economic Environment (Cont.) State projecting a $25.4 billion budget deficit through June
30, 2012 State COPS Grant and Booking Fee funding appear to be safe through 6/30/11 but uncertain after that Proposed elimination of redevelopment as we know it Anticipate State looking to cities and counties for other ways of balancing its budget
11
Economic Environment (Cont.) City is on the road to recovery However, the road is unpaved and rocky
Fuel prices remain volatile While Wall Street enjoyed a brighter 2010, Main Street
America continued its recovery at a much slower pace Job creation and productivity are key City continues to strive for business attraction/ retention and redevelopment
12
Economic Environment (Cont.) Sales Tax Most significant local economic indicator 48% of all General Fund revenues Between April and September 2010, Sales Tax revenues shrunk by $(17,138) or -1.19% compared to the same time last year Quarter ended June 30, 2010–Receipts up by $5,277 or 0.76% (year to year) Quarter ended September 30, 2010-Receipts down by $(22,415) or -2.98% (year to year) State BOE projects a year-to-year statewide increase of 5.1% for the quarter ended December 2010 13
Economic Environment (Cont.)
Sales Tax (Continued) Actual 4th quarter results will be available in mid March Forecast Placerville’s 4th quarter growth at 0.86% BOE estimates a year-to-year Statewide increases of 3.9% and a 7% in the 1st and 2nd quarters of 2011 respectively Forecast Placerville’s 1st and 2nd quarter growth at -0.34% and 2.76% respectively Based on State estimates and current trends, staff forecasts Placerville’s 10/11 Sales Tax will total $2,909,593 which is $(155,432) or -5.07% below Budget Projected receipts slightly above the 2000/2001 level 14
Economic Environment (Cont.) City of Placerville Sales Tax Sources As of September 30, 2010 Apparel Stores
0.85%
5.84%
15.62%
General Merchandise Stores
8.04%
Other Retail Stores
7.20% 8.69%
Food Stores Eating & Drinking Places Home Furnishing & Appliances
12.90% Building Material & Farm Implements
18.85%
Auto Dealers & Auto Supplies
1.80% Service Stations
20.22%
All Other Outlets
15
Economic Environment (Cont.) City of Placerville Sales Tax Comparison 2nd and 3rd Quarter
300,000.00
250,000.00
200,000.00
150,000.00
100,000.00
50,000.00
April to September 2010 -
April to September 2009
16
Economic Environment (Cont.) City of Placerville Multi-Year Sales Tax Trend $4,500,000 $4,000,000 $3,500,000 $3,000,000
$2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000
Actual Sales Tax Revenues Adjusted for Inflation
$0
17
Focus on the General Fund Adopted Budget
Forecast
Revenues Expenditures Net Transfers In
$ 6,442,608 6,634,770 192,162
$ 6,278,921 6,559,345 192,162
Revenues over (under) Expenditures
$
$
-
Under/(Over) Budget $ 163,687 75,425 -
2.54% 1.14%
(88,262)
18
Focus on the General Fund (Cont.) Revenue Type
Adopted Budget
Forecast
Over/(Under)
Sales Tax $ 3,065,025 $ 2,909,593 $ (155,432) All Other Taxes 782,701 717,169 (65,532) Licenses & Permits 65,000 65,000 Intergovernmental Revenues 916,710 831,354 (85,356) Charges for Service 620,449 712,822 92,373 Fines & Forfeitures 263,200 244,209 (18,991) Use of Money & Property 52,523 49,024 (3,499) Other Financing Sources 677,000 749,750 72,750 Total revenues $ 6,442,608 $ 6,278,921 $ (163,687)
-5.07% -8.37% 0.00% -9.31% 14.89% -7.22% -6.66% 10.75% -2.54% 19
Focus on the General Fund (cont.) As you can see, the City has made significant budgetary adjustments since
2007 in order to adapt to the “new economy” 2006/2007 Actual
2010/2011 Forecast
Revenues Expenditures Net Transfers In
$ 8,386,136 8,173,119 (111,821)
$ 6,278,921 6,559,345 192,162
Revenues over (under) Expenditures
$
$
101,196
Increase (Decrease) $ (2,107,215) -25.13% (1,613,774) -19.74% (303,983) 271.85%
(88,262)
20
Focus on the General Fund (Cont.) Projected deficit based on current revenue and expenditure
trends Assumes continuation of 10% pay cut through 6/30/11 Revenue shortfall primarily attributable to the projected $(155,432) shortfall Sales Tax receipts Assumes pay-as-you-go costs for GASB 45 Other Post Employment Benefits (OPEB) Annual Required Contribution (ARC) No contribution for future retiree medical insurance costs
21
Focus on the General Fund (Cont.) Staff will gather input from the City Council tonight
and continue to analyze the Budget and available options Staff will return to the City Council in March with more analysis, including the 4th quarter Sales Tax results, and recommendations for eliminating the budget deficit
22
Enterprise Fund Update Measure H was approved by voters last November Proceeds will be used to reduce water and/or
wastewater rates Excess proceeds could be used to accelerate debt repayment and replace worn out lines City Council is in the process of forming a 5 person oversight committee to recommend uses for Measure H revenues and review related expenditures which will be addressed in a separate report tonight
23
Closing Comments City Council and management continue to
operate the City in a prudent and responsible manner Staff anticipates City operating costs to be well within the existing operating budget at year-end
24
Conclusion Questions? Comments?
That’s all folks!
25
