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HomeMy Public PortalAbout12) 7G FY11-12 Mid Year Budget ReviewCity Council April 3, 2012 Page 2 FY 2011·12 GENERAL FUND REVENUES A revenue analysis has been completed for FY 2011-12 General Fund Revenues. Although most revenues are in line with projections, there are some revenues that require adjustments. Below is a brief discussion of each significant revenue source with an explanation of the requested adjustment. The table below summarizes the City's significant General Fund revenues and provides an overview of the recommended changes based on mid-year review by staff. General Fund Revenues FY 2011-12 FY 2011-12 Revenue Source Budget Revised Increase Percent Revenue Projection {Decrease} Change Property Tax $2,240,250 $2,240,250 $0 0% Sales Tax $1,082,870 $1,157,870 $75,000 6.9% Other Taxes $1,082,470 $1,082,470 $0 0% License & Permits $1,204,860 $1,324,860 $120,000 9.9% Motor Vehicle In $3,150,800 $3,273,500 $122,700 3.9% Lieu Charge for $759,590 $759,590 $0 0% Services Court Fines $627,000 $627,000 $0 0% Investments $353,600 $363,600 $10,000 0% Other Revenue $374,515 $374,515 $0 0% Totals $10,875,955 $11 ,203,655 $327,700 3.0% • Property Tax; Property taxes continue to be one of the City's strongest revenue sources. Under Proposition 13, property is generally reassessed only when there is a change in ownership. After which, its assessed value is adjusted annually by an inflation factor not to exceed 2 percent. The property tax revenue for Temple City continues to be strong. Temple City's assessed valuations are increasing and resale values are much higher than the original amount budgeted in FY 2010-11 of $1 ,842,000. The actual amount was $2,160,300. Based on the previous fiscal year, staff estimated an increase of 4% to the Property Tax for FY 2011-12 at budget time. No adjustments are recommended. • Sales Tax: There was a 16.9% increase from the projected amount of $1,046,250 to actual of $1,223,188 for FY 2010-11. In FY 2011-12, the budgeted amount is $1 ,082,870. Based on the prior fiscal year's actual amount received for the sales tax and the slowly recovering economy, an adjustment in the amount of $75,000 is being recommended for sales tax, City Council April 3, 2012 Page 3 resulting in a new budget projection of $1,157,870. • Other Taxes: Other tax revenues include franchise fees and transient occupancy tax. Franchise fee taxes are collected from service providers, such as Athens Services, Gas Company and Cable services. A 1 0% transient occupancy tax is collected from each guest that rents a room from any hotel/motel located within the City and is directly paid to the City by the owners. At this time, these revenues are in line with estimated projections and no adjustment is recommended. • License & Permits: License & permits include building permits, business license fees, animal license fees, parking permits, impound fees, temporary parking permits, code enforcement fees and in lieu parking fees. The City received a total of $154,550 more than the second quarter of FY 2010-11. These additional increased revenues were a result of the City's Cost of Services Study prepared by Revenue & Cost Specialists. LLC and the new services costs and fee changes was adopted by the City Council starting with FY 2011-12 to recover the City's costs to provide better services to the community. Based on the six months of revenues received, staff recommends a $120,000 or 10% increase resulting in a new budget projection of $1,324,860. • Motor Vehicle in-lieu fee (VLF): Established in 1935 as a uniform statewide tax, the VLF is a tax on the ownership of a registered vehicle in place of taxing vehicles as personal property. By law, all revenues from the VLF fund city and county services, but the state legislature controls the tax rate and the allocation among local governments. In 2004, the Legislature permanently reduced the VLF tax rate and eliminated state general fund backfill to cities and counties. Instead, cities and counties now receive additional transfers of property tax revenues in lieu of VLF. The projected In Lieu VLF for FY 2011-12 is $3,150,800. Based on the first allocation, an adjustment to increase the projection by $122,700 is recommended resulting in a new projection of $3,273,500. • Charge of Services: Charge of services are revenues received from recreation fees, facility rental fees, zoning fees and plan check fees. These revenues are reflected when services, classes or events are provided. This category may fluctuate based on the number of participants who enroll to various programs. Based on the current revenues, the estimate may be slightly lower than projected. At this time, no adjustments are recommended. • Court Fines: Court Fines are revenues collected from citations written from both the Los Angeles County Sheriff's Department and authorized City staff. At this time, these revenues are in line with estimated projections and no adjustment is recommended. City Council April 3, 2012 Page 4 • Investments: The City receives interest on various investments on a monthly; quarterly or annual basis based on the type of investment. Currently the City invests with Local Agency Investment Fund (LAIF); Certificates of Deposit (CD); and security investments with various banks and agencies. Interest rates on investment have decreased over the past few years. However, the City was able to invest $2.5 million more from December 2010 to December 2011. An adjustment to increase $10,000 is being recommended resulting in a new projection of $363,600. • Other Revenue: Other revenue include: recyclable revenue; sale of City property; and donations . At this time, no adjustments are recommended . I. FY 2011-12 GENERAL FUND EXPENDITURES The adoption of FY 2011-12 City Budget estimated total General Fund operating expenditures of $11.2 million. At this time, staff is not recommending any adjustments for the department expenditure level. General Fund Expenditures FY 2011-12 FY 2011-12 Budget Revised Increase Percent De~artment Ex~enditure Projection (Decrease} Change Management $1,885,250 $1,885,250 $0 0% Services Administrative $1,122,075 $1,122,075 $0 0% Services Community $3,062,255 $3,062,255 $0 0% Development Parks $1,725,770 $1,725,770 $0 0% & Recreation Law $3,413,310 $3,413,310 $0 0% Enforcement Totals $11,208,660 $11,208,660 $0 0% Due to the windstorm on November 30, 2011, the City issued a Declaration of a Local Emergency on December 1, 2011 at a Special City Council meeting and the State declared it on December 10, 2011 where as the Federal Government has declined the declaration of the emergency for Los Angeles County. The City applied for the State resources to recover eligible costs for reimbursement of the windstorm damages. However, the City is not guaranteed to receive reimbursement as the State currently has a $140 million obligation deficit from previous disasters. To date, $244,144 has been incurred for this disaster. The City may have to pay out of the general fund one-time expenditure for this disaster if no reimbursement is received from the State . City Cou neil April 3 , 2012 Page 5 The total General Fund Mid-Year Budget adjustments requested are $327,700. This amount will increase the estimated General Fund Balance from $21 ,425,021 to $21,752,721. II. CAPITAL IMPROVEMENT PROJECTS (CIP) Temple City has been very busy this year completing various Capital Improvement Projects (CIP). During the adoption of FY 2011-12 City Budget, the City Council approved $20.1 million in CIP expenditures. The good news is that only 1.3% of the total expenditures ($272,000) will be funded by the General Fund . The majority of the expenditures are for the Rosemead Boulevard Safety Enhancement & Beautification Project, $12.4 million was budgeted this fiscal year (as of December 2011 ). This project has been presented and has continued to be a proposed project that will not use General Fund monies . The Capital Improvement Projects that are in progress or were completed during the FY 2011-12: Renovation of circular planter at Live Oak Park, Temple City Park and Monument Sign Project; Temple City Library Mural; Citywide Traffic Calming Study Master Plan; Comprehensive Downtown Parking Study and Strategic Plan; left turn phasing on Las Tunas Drive and Temple City Boulevard for East-West traffic; left turn phasing on Olive Street and Baldwin Avenue for North-South traffic; Rosemead Boulevard Improvement Project; and Council Chamber Upgrades. At this time, staff is not requesting any adjustments for FY 2011 -12 CIP Budget. Adjustments to projects are usually requested after a project has begun or other funding sources are available . Ill. COMMUNITY REDEVELOPMENT AGENCY With the dissolution of the Community Redevelopment Agency as of January 31, 2012, the City has become the Successor Agency to the Community Redevelopment Agency. Actions taken include the transferring of fund from Local Agency Investment Fund (LAIF) in the amount of $2,318,691 to the City as the Successor Agency to the Temple City Community Redevelopment Agency. The allocation of the transfer translated as follow: • 80% for Non-Housing Fund ($1 ,854,953). • 20% for Housing Fund {$463,738). CONCLUSION: As the economy slowly recovers, it is reassuring to know that Temple City has survived the economic recession. Not only has Temple City lived within its means the past City Council April 3, 2012 Page 6 couple of years, but we are proposing $327,700 in our General Fund Reserve which if approved by City Council would increase up to $21,752 ,721 . Throughout the remaining three months additional amendments may be required, but if we continue with our conservative spending, Temple City will complete another successful year. FISCAL IMPACT: It is recommended the City Council approve the above mentioned General Fund Mid-Year adjustments which will increase the General Fund estimated Fund Balance by an additional $327 ,700. The projected General Fund Balance as of June 30, 2012 will be $21 ,752 ,721 .