HomeMy WebLinkAboutFive Year Financial Plan - Revenue estimates - Study Session Five - Year Financial
Study Session
September 21 , 2009
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Does a plan really help?
e Difficult to predict the future
o Numbers outdated the moment it' s printed
o No two people can agree on the assumptions
o Why make decisions and take action on
information that is most likely to change? ! ! !
Benefits of a five -year plan
o Proactive financial management
o More time to effect change & adapt
o Adds transparency and encourages
involvement
Benefits of a five -year plan
e Way to see the cost/ benefits of decisions over
five years
o Models the impact of one -time fixes versus
long -term solutions
o Tool to help leaders balance demanding
needs for:
approach to building the plan
o Base year - FY 09 / 10
o Break revenue and expenditures into
components
o Develop low, mid , and high range
assumptions for each component
o Bring results together to serve as a basis to
shape fiscal strategy
Basis of estimates
o Trend analysis
o County Assessor/ Proposition 13 language
o Property/ sales tax consultants
o Economic outlooks - Chapman , Fullerton , and
UCLA
o Discussions with city department staff
o j udg ment / experience
Revenue Components
o Property Tax
o Sales Tax
o Utility Users Tax
o Franchise Agreements
o Transient Occupancy Tax
o Development Fees
o Non - Development Fees
o Revenue from other Agencies
o Other Revenue
o Non -Operating Revenue
Revenue Assumptions :
Mid - Range
o Property tax will decline by 1 off% next year, then
ease up to 4% growth in the fifth year
o Sales tax will remain flat next year, then slowly
grow up to 2% in the fifth year
o Utility Users Tax will grow at 1 % each year
o Fees will grow between 1 % to 2% each year
o Transient Occupancy Tax will grow to 2% in year
five
Mid-Range Revenue Estimate
FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15
Property Tax 66,683,263 67,652,000 66,975,480 67,142,919 68,485,777 70,540,350 73,361,964
-1.00% 0.25% 2.00% 3.00% 4.00%
Sales Tax 20,750,000 19,575,000 19,575,000 19,672,875 19,869,604 20,167,648 20,571,001
0.00% 0.50% 1.00% 1.50% 2.00%
UUT 21,375,000 21,725,000 21,942,250 22,161,673 22,383,289 22,607,122 22,833,193
1.00% 1.00% 1.00% 1.00% 1.00%
Franchise 7,810,000 7,985,000 8,004,963 8,024,975 8,045,037 8,065,150 8,085,313
0.25% 0.25% 0.25% 0.25% 0.25%
TOT 5,300,000 5,400,000 5,427,000 5,454,135 5,508,676 5,591,306 5,703,133
0.50% 0.50% 1.00% 1.50% 2.00%
Dev Fees 8,299,775 9,588,000 9,635,940 9,828,659 9,926,945 10,075,850 10,277,367
0.50% 2.00% 1.00% 1.50% 2.00%
Non-Dev Fees 32,788,381 35,276,063 35,805,204 36,163,256 36,524,889 36,890,137 37,259,039
1.50% 1.00% 1.00% 1.00% 1.00%
Agencies, 4,093,075 2,543,000 2,555,715 2,568,494 2,581,336 2,594,243 2,607,214
0.50% 0.50% 0.50% 0.50% 0.50%
Other Rev 5,858,065 5,471,450 5,526,165 5,581,426 5,637,240 5,693,613 5,750,549
1.00% 1.00% 1.00% 1.00% 1.00%
Non-Operating 9,567,102 7,380,428 5,680,428 5,680,428 5,680,428 5,680,428 5,680,428
-23.03% 0.00% 0.00% 0.00% 0.00%
182,524,661 182,595,941 181,128,144 182,278,839 184,643,222 187,905,847 192,129,200
T'
-0.80%1 0.64% 1.30%1 1.771/. 2.25%
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General Fund Revenue
FY 1990/91 - 2007/08*
$200,000 - - -
-
O
$,80,000 _- - Ave rag e - COwt h - 4-2/_—_-_ r-_ - -
1176,527
$166,;92& .
$14:3;.1�'32,
$140,000 - - -" --- - - - --- - -- - - -
N
a
' 1,30-,937 $132;U82
fA
o $y`29;362,
$1126;472;
$120,000 - - - - -- --- --- -- - --- -------- - ---- --- ---- -- - --_
$117JOS
$11a2822
" $�1103;523
:$1,04.;057
00,,7,66_
$80,000 - -- — - - - - - - --
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
:'N `\\� � CAFR "Statement of Revenues, Expenditures, and Changes in Fund Balance, Governmental Funds"
General Fund Revenue
FY 1990191 - 2007/08*
$200,000
$1"86,1'98
176;527
$1-66,920
/114 ;yi 32
$140,000 - _-- ---_ -
$132;082
- $1129;362. $1,26,472'
$120,000
$11121822;
$140344 .
_ '$1031523.
$1+04,057
$100,000 -- 97668
$95;192 . $92,988
$80,000 = - .-- - - -- - - - -
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
*CAFR "Statement of Revenues, Expenditures, and Changes in Fund Balance, Governmental Funds"
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nditure Components
_1�
> Salariesel�
� CaIPERS
� Workers ' Compensation
Other Benefits
Operating
Improvements
o Equipment
> Non -Operating
*Salaries include overtime, temporary salaries, and leave payouts
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Example of expenditure plan that
begins to fit availably revenue :
o Implement contractually obligated labor agreements, then
maintain all compensation at the current level through the
five-year period
o We have 70 vacant positions - continue to add 10 vacant
positions each year for a total of 120 vacant positions in
year five
o CaIPERS costs climb from $ 21 million next year to $ 27
million the fifth year using CaIPERS three-year smoothing
approach
o Workers' compensation costs grow by 5% per year
� Operating costs grow at 2% per year
P Grow our investment in equipment in steps over the five-
year period
Scenario 1 — Mid-Flange with No Additional Salary/Benefits Increases, 70 Vacancies pleas,
Attrition of 10 positions per year, Modest Operating and Capital
Object Estimated Proposed Projected Projected Projected Projected Projected
Account FY 2008/09 Budget Budget Budget Budget Budget Budget
FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15
SALARIES 92,908,804 92,480,623 93,330,236 93,823,519 93,292,637 92,759,100 92,222,896
0.9% 0.5% -0.6% -0.6% -0.6%
CALPERS 18,011,532 20,266,603 20,541,985 22,508,262 25,105,049 27,503,073 27,344,089
1% 10% 12% 10% -1%
WORKERS' COMP 5,062,700 4,912,768 5,158,406 5,416,326 5,687,143 5,971,500 6,270,075
5% 5% 5% 5% 5%
OTHER BENEFITS 18,329,461 18,881,802 19,051,738 19,146,997 19,032,115 18,917,922 18,804,414
0.9% 0.5% -0.6% -0.6% -0.6%
OPERATING 37,831,511 36,516,646 37,246,979 37,991,918 38,751,757 39,526,792 40,317,328
2% 2% 2% 2% 2%
IMPROVEMENTS 761,016 0 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
EQUIPMENT 6,069,116 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000
NON-OPERATING 8,108,939 8,537,500 7,385,000 6,133,000 6,130,000 5,837,000 5,840,000
TOTALS 187,083,079 182,595,941 185,714,343 189,020,023 192,998,700 196,515,387 197,798,801
..:...::.. .
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Mid - Range Revenue vs . Scenario 1
Expenditures
( in millions)
FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15
Revenue $181 $182 $185 $188 $192
Expenditure (186) (189) (193) (197) (198)
Challenge $ (5) $ (7) $ (8) $ (9) $ (6)
Next Steps :
o Strategic Plan Goal to report quarterly to the
Council on FY 09 / 10 budget
o Continue monthly budget reports to Council with
analysis by the Executive Team and Finance
o Begin discussions with Bargaining Group Leaders
to work together on the Five-Year Plan and
explore options to address the financial
challenge
o Department heads prioritize services and identify
service implications of budget reductions
Five - Year Financial Plan
Questions .?
Discussion
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