HomeMy Public PortalAboutFiscal Year 2014-15 Mid-Year Budget Review---~--
DATE:
TO:
FROM:
SUBJECT:
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
February 10 , 2015
The Honorable City Council
Bryan Cook , City Manager
Via : Tracey L. Hause , Administrative Services Direct~
By: Lee Ma , Accountant ·~
FISCAL YEAR (FY) 2014-15 MID-YEAR BUDGET REVIEW
RECOMMENDATION:
The City Council is requested to :
a) Authorize staff to revise various revenue estimates as indicated in Attachment "A";
b) Authorize staff to revise various budgeted appropriations as indicated in Attachment
"B";
c) Authorize an increase i n the bus passes and tokens subsidy for Temple City
residents ;
d) Receive a demonstration of the City's Fiscal Health Diagnostic Tool , a tool for
forecasting future revenues and expenditures .
BACKGROUND:
1. On May 22 , 2014 , the Metropolitan Transportation Authority (MTA) Board of
D irectors approved a fare increase for bus and rail lines , effective September 15,
2014 .
2. On June 3 , 2014 , the City Council approved the FY 2014-15 City Budget in the
amount of $20 ,587 ,925 .
3. On August 5 , 2014 , the City Council approved a budget amendment in the amount
of $26 ,500 to host and co-sponsor the 2015 Sing Tao Lunar New Year Street
Festiva l. To offset the cost to the City , Sing Tao will reimburse the City $10 ,000 .
4 . On September 2 , 2014 , the City Council approved a budget amendment in the
amount of $15 ,000 for relocation of a streetlight pursuant to contractual terms with
the Temple City Gateway LLC .
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City Council
February 10 , 2015
Page 2 of 9
5. On September 16 , 2014 , the City Council approved a budget amendment in the
amount of $41,610 to purchase a telephone system from KTS Networks .
6 . On October 21, 2014 , the City Council approved a budget amendment in the
amount of $7 ,500 awarded to Center of Priority Based Budgeting (CPBB) for the
development of the Fiscal Health Diagnostic Too l and related consulting services .
7 . On November 18 , 2014 , the City Council approved first quarter budget
amendments in various revenue accounts for a total amount of $575 ,000 , and
$104,770 in General Fund and $1,641 ,125 in non -General Fund appropriations .
8. On December 16 , 2014 , the City Council appropriated $10 ,000 to fund installation
of a decorative feature on the Performing Arts Pavilion Dance Floor.
9. On February 3, 2015 , the City Council approved the following recommended
revenue and appropriatio n adjustments :
• An additional $30 ,600 from the General Fund Un assigned Fund Balance in
appropriations ; and
• An adjustment of $40 ,350 in both estimated revenues and appropriations in
the Community Development Block Grant (CDBG) Fund to recognize a
housing rehabi litatio n loan repayment.
ANALYSIS:
The FY 2014 -15 Mid-Year Budget review process provides the City Council with an
opportunity to review and adjust original revenue projections and budgeted
appropriations based on six months of actual acti vity . Adjustments are a result of
changes in revenue projections based on actual revenue received from July 1, 2014
through December 31 , 2014 , as well as unanticipated expenditures due to information
that was not previously available . While the City continues to show positive financial
growth , staff continues to monitor revenues close ly and to strictly control expenditu res .
Details of revenues and expenditures are prov id ed below .
1. FY 2014-15 REVENUES
An analysis of the City 's revenues has been completed for the FY 2014 -15. Although
some revenues are in lin e with projections , there are other revenue estimates that
require adjustments . The table below summarizes the City's significant revenues and
provides an overview of the recommended changes based on mid-year review by staff.
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City Council
February 10 , 2015
Page 3 of 9
Re venue Source
General Fund
Real Estate Transfer Tax
Franchise Fees
Transient Occupancy Ta x
Property Ta x Allocation
Building Perm it Fees
Encroachment Pe rmit Fees
Plan C heck Fees
Facility Rental Fees
Engineeri ng Fees
Court Fines
Rental Income
Other Re imbursement
Sub-Total
P ropositio n A Fund
Charges for Service -Bus Pa ss Sale
Total
FY2014-15
Budge t
$ 170,000
$ 560 ,000
$ 35 ,000
$ 2 ,700 ,000
$ 300,000
$ 120 ,000
$ 400,000
$ 65,000
$ 50 ,000
$ 700 ,000
$ 65,000
$ 100,000
$ 5 ,265,000
$ 140,000
$ 5 ,405 ,000
A . GENERAL F UND REVENUES
FY2014-15
Revised Projection Increase Percentage
Amendme nts (D ecrease) Change
$ 200 ,000 $ 30 ,000 17.6%
$ 580 ,000 $ 20 ,000 3.6 %
$ 50 ,000 $ 15,000 42 .9 %
$ 2 ,735 ,000 $ 35 ,000 1.3 %
$ 500 ,000 $ 200 ,000 66.7%
$ 200 ,000 $ 80 ,000 66 .7%
$ 570,000 $ 170,000 42 .5%
$ 75,000 $ 10,000 15.4%
$ 85,000 $ 35 ,000 70.0%
$ 400 ,000 $ (3 00 ,000) -42 .9 %
$ 100 ,000 $ 35,000 53 .8 %
$ 409,000 $ 309,000 309 .0 %
$ 5 ,904 ,000 $ 639,000 12 .1%
$ 148,900 $ 8,900 6.4%
$ 6 ,052 ,900 $ 647,900 12.0 %
~ Rea l Estate Trans fer Tax: Real Estate Transfer Tax is tax that is collected
when there is a change in ownership of all real properties with i n City limits . Staff
is recommending a $30 ,000 increase in this revenue source as a result of a
continuing increase in the number of sales of properties .
~ Franch i se Fees: Franchise Fees are fees co llected from service providers for
use of the City 's infrastructure and who provide uti lity services to the residents ,
such as Athens Services , The Gas Company , Southern California Edison and
cable television . An increase in estimated revenues of $2 0 ,000 is recommended
as a result of fee collections through December 2014.
~ Transien t O ccupancy Tax: A 10% Transient Occupancy Tax is collected from
each guest that rents a room from any hotel located within the City . The tax is
remitted directly to the City by the hotel owners on a monthly basis . Based on
actu al collections for the first six months of the fisca l year, an i ncrease of $15 ,000
is recommended.
~ Pro perty Tax Allo cation: Property ta xes c ontinue 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 . In addition assessed
City Council
February 10 , 2015
Page 4 of 9
value is adjusted annually by an inflation factor not to exceed two percent.
Templ e City's assessed valuations continue to increase and the median home
prices have exceeded the pre-recession levels of 2007. Staff estimated an
increase of 4.4 % in property ta x revenues for FY 2014 -15 during the budget
process last spring. However , after ana lyzing the increases in assessed
valuat ions and property tax receipts to date, it is anticipated receipts will be
higher th an originally anticipated and an adjustment of $35 ,000 is recommended.
)> Building Permit Fees: Based on the f irst six months of revenues received in
FY 2014-15 , staff recommends a $200 ,000 increase in the building permit fees
as a result of a continued building activity .
if private
Due to
and other
)> Encroachment Permit Fees: An Encroachment Permit is required
development completes construction in the public right-of-way .
continued activities with the Olson Project , Camilla Square
construction activities , an increase of $80 ,000 is recommended .
)> Plan Check Fees: As indicated above with construction related revenues , an
inc rease in Plan Check Fees in the amount of $170,000 is recomm ended due to
continued building activities .
)> Facility Rental Fees: Fees are cha rged when City facilities are utilized by
outside organizations or the general public . Increased activity supports an
increase of estimated revenues of $10 ,000 .
)> Engineering Fees : Engineering Fees are co llected when a review of building
plans by the City's contracted engineering firm , Transtech is required for approval
of a Building Pe rmit. Based on increased activity , an adjustment of $35,000 is
recommended.
)> Court Fines: Court Fines are revenues collected from citations written from both
the Los Angeles County Sheriffs Department and authorized C ity staff. A
revised estimate decreasing revenues by $300,000 is recommended due to a
reduction of overnight parking citations issued due to compliance by res idents .
)> Rental Income: Staff recommends an inc rease of $35 ,000 in rental income
primarily as a result of additional incom e generated by the Primrose properties.
)> Other Reimbursements: An increase in Other Reimbursements of $309 ,000 as
a result of the reimbursement for the windstorm emergency expenses and debris
removal , and the recovery of Property Tax administrative fees levied by Los
Angeles County .
City Council
February 10 , 2015
Page 5 of 9
B. SPECIAL REVENUE FUND-PROPOSITION A FUND
The City currently offers bus passes and tokens for sale to Temple City residents at a
reduced rate . The subsidy is funded through the City's Proposition A funds .
With the approval of the new fare increases by MT A for bus and rail passes , most
monthly passes increased by over 20%. Following is a table comparing the previous
fare and cost to the cur re nt fare and cost for Temple C ity residents :
Prior to 9/15/2014 Current
DESCRIPTION MTA Fare Cost for TC MTA Fare Cost for TC
Residents Residents
Regular-MTA $75 $60 $100 $85
Reg ular-EZ $84 $69 $110 $95
Senor/Disabled -MT A $14 $11 $20 $17
Sen ior/Disabled -EZ $35 $32 $42 $39
Student (K-12) $24 $18 $24 $18
College $36 $26 $43 $33
Token s $15 $12 $17 .50 $14 .50
The subsidy amount for each pass has remained the same since the fare increase
(i.e . Regular passes were discounted $15 ; Senior/Disabled passes discounted $3 ;
College passes $1 0). However, residents are now paying significantly more for some -
of the passes , in particular Regular passes which increased $25 per month for
Regular MTA (42% in crease) and $26 per month for EZ passes (38 % increase).
Passes for seniors and disabled persons also increased substantially (55 % for MTA
and 22 % for EZ), while the co l lege monthly passes increased $7 (27 %) per month .
Staff is recommending the City Council consider increasing the subsidy amount for
the Regular MTA and EZ pass ; the MTA and EZ Senior pass ; and the MTA College
pass . The table below shows the recommended subsidy amounts .
Resident Price
DESCRIPTION MTA Fare Pre-9/15 Current Proposed
Regu lar-MTA $100 $60 $85 $75
Regu lar-EZ $110 $69 $95 $85
Senor/Disabled -MT A $20 $11 $17 $15
Senior/Disabled -EZ $42 $32 $39 $37
Student (K-12 ) $24 $18 $18 $18
Coll ege $43 $26 $33 $30
Tokens $17 .50 $12 $14.50 $14
To cover the increase in fares , a revenue adjustment is required as discussed below .
Th e expenditure adjustment w ill be discussed later in this report. If the City Council
approves the recommended increase in the subsidy , the Bus Pass Sales revenue
account will increase by approximately $8 ,900. If the increase in subsidy is not
approved , and the cost for monthly passes for Temple City residents remains at the
current rate , the Bus Pass Sales revenue account will increase by approximately
$12 ,900 . A budget amendment in the amount of $8 ,900 is recommended along with
the increased subsidy .
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City Council
Febr uary 10 , 2015
e 6 of 9 Pag
2. F Y 2013-14 EXPENDITURES
The
and
for a
adopted FY 2014-15 City Budget totaling $16.4 million in Operating Expenditures
Vehicle/Equipment Outlay. The table below summarizes staff's recommendations
djustments:
Department/Fund
FY2014-15 FY 2014-15 Increase Perce nt Budgeted Revised (Decrease) Change
Expenditures Projections
Ci ty A $130 ,000 $398,000 $1 4 8,000 114%
Com $5 ,115 $20,115 $15,000 293%
Com $2 ,250 $1 7 ,250 $15,000 667%
Bus P $151 ,540 $171,540 $20,000 13%
Eng in $40 ,500 $260,500 $220,000 543%
Speci $0 $40,000 $40,000
Tota $329,405 $907,405 $458,000 139%
The total mid-year recommended operating increase is $418 ,000 (Attachment "B").
ional resources are required for special legal services as a result of continued Add it
labor negotiations and other personnel matters. With increased engineering services
ed to traffic and traffic surveys , an increase in two related line times , (Traffic
neering and Traffic Surveys), an amendment of $15 ,000 for each line item is
ested . An amendment of $20,000 is required to cover th e increase in the cost of
passes and tokens purchased from MTA , as discussed above, is required . An
relat
Engi
requ
bus
ad jus tment in the State Gas Tax Fund for engineering services , provided by Transtech ,
reet projects in the amount of $220,000 is also recommended . The original request
40 ,500 was not sufficient and an amendment is required to cover al l services
ded by Transtech during this fiscal year .
forst
of $
pro vi
3. E QUIPMENTIVEHICLE REPLACEMENT
The
$96,
City adopted a budget for Equipment Nehicle Rep lacement of $141 ,900 of which
900 if funded by the Genera l Fund . Staff is requesting $40 ,000 to upgrade the
s parking permit system to provide better service to Temple City residents and their
ts. The funds will be used for two purposes : 1) to replace the parking permit
City '
gues
disp
parki
enser at City Hall , and 2) to implement an online parking permit system . The
ng permit dispenser at City Hall is an older machine that is frequently inoperative
n need of service or repair. It also la cks the functionality of modern machines
ding the ability to issue more than one type of permit and the ability to print vehicle
se numbers on the permits . In addition to overnight parking permits , a new
hine could a lso issue oversize vehicle permits , providing additional convenience for
ents . An on l i ne parking permit system would provide residents and their guests
and i
inclu
licen
mac
resid
with
on lin
the option of obtaining overnight parking permits and oversize vehicle permits
e. Permits could be pu rc hased online and printed at home without the need to
e to City Hall or use the permit dispenser. An updated dispenser machine and an
e service also prov ide capabi lities for further service enhancements in the future ,
com
onlin
such as license plate-based paperless permits .
City Council
February 10 , 2015
Pag e 7 of 9
4. GENERAL FUND CAPITAL IMPROVEMENT PROJECTS (CIP)
There are no adjustm ents recommended to the CIP at this time .
5. FUND BALANCE ANALYSIS
Attachment "C" provides an analys is of the fund balance . Estimated General Fund
Ba lan ces at June 30, 2015 are provided :
• At July 1, 20 14 , when the FY 2014-15 City Budget was adopted ;
• At December 31 , 2014 , when actual Fund Balance at July 1 , 2014 was ava i lab le
due to comp letion of the aud ited Comprehensive Annual Financia l Report
(CAFR). This estimate also includes budget adjustments approved by the City
Council for the first eight months of operations ; and
• At present, if the recommended adjustments in this report are approved and
implemented .
At the time of adoption of th e FY 2014-15 City Budget , a structural deficit of $2 .1 million
existed as a result of a conscious decision on the City Council's part to commit to one-
time, capital expe nditures from Reserves , in accordance w ith the City's adopted Budget
Reserve Policy . While a stru ctural deficit remains at approximately $2 .1 m il lion , revised
revenue estimates and adjustmen t s in appropriations are recommended to ensure a
comprehensive spend ing plan is in place for the remaining fis ca l year and
recommended programs are funded .
The analysis further articulates the resources that are available in accordance w ith the
City's adopted Budget Reserve Po li cy. It is anticipated the City will be moving into the
FY 2015-16 City Budget process with an unassigned Fund Balan ce of $42 ,377 , and
Committed and Ass ign ed Reserves for res tri cted purposes remain unchanged .
6. FISCAL HEALTH DIAGNOSTIC TOOL
One of the too ls identified in the City's Strategi c Plan for accompl ishing its goals is the
development of a Long -Term Financial Plan . A Long-Term Financial Plan wi ll identify
potential long-term imbalances and id entify strategies to counteract these imbalances.
The Long-T erm Financial Plan does not just forecast the status quo , it considers various
financial and economic environments, forecasts revenues and expe nditu res both on-
going and one time , capital needs and considers future debt.
Staff will be demonstrating CPBB 's Fiscal Health Diagnostic Tool (an on-line multi-year
forecasting tool) during the FY 2014-15 Mid -Year Budget Special City Council Meeting ,
to facilitate f uture comprehensive discussions with th e City Counci l for alternative
funding strateg ies, not only General Fund operatio nal activities , but also long-term
infrastru ctu re projects.
City Council
February 10, 2015
Pag e 8 of 9
CPBB pres ents 5 key principles of Fiscal Health , which are significant as part of the
development of the Fiscal Health Diagnostic Tool :
• Spending Within Our Means-focusing on the alignment between ongoing
sources and ongoing uses and on the alignment between one-time sources
and one-time uses ;
• Establishing and Ma intaining Reserves -focusing on fu nd balance reserves
and the monitoring tools in place to protect those reserves ;
• Understanding Variances -focusing on disparities between budget projections
and actuals to look for opportunities to shift resource allocations from areas
where they are not ne eded and more impo rtantly improve the accuracy of
reve nue and expenditure forecasts by eliminating the impact of re c urring
historical variances ;
• Being Transparent About the Tru e Cost of Doing Business -focusing on
ensuring that appropriate internal se rvi ce and administrative costs are
shouldered by the programs that benefit from those services , ensuring that
fees for services are capturing both direct and indirect costs (appropriate for
cost recovery objectives) and ensuring that the full cost of offering programs
and services is clearly articulated and understood ; and
• Incorporating Lo ng-term Plann ing into Decision Making -focusing on the
inclusion of all long-term plans prepared by the City in financ ia l forecasts and
the budget process as well as the associated incorporation of relevant
external economic influences . Additionally, insuring that the City uses clear
and concise modeling tools to communicate forecasts , assess impacts and
identify impacts of budget decisions .
Since the Fisca l Health Diagnostic Tool and its results will be incorporated into the
City 's regular budget process and budget doc ument , staff will be presenting a one-year
budget document to the City Council for cons ideration and adoption . The 5 year
forecast generated from the Fisca l Health Diagnostic Tool will provide a more
comprehensive and accurate view into th e f utu re than the previously two-y ear budget
document.
CONCLUSION:
As the building and development activities re ma i n strong providing for enhanced
revenues , the City will continue to apply best fiscal management pra cti ces and a
conservative approach, including p roactive mid -year budget adjustments , a real isti c and
accurate spending plan for the remaining of the fiscal year.
City Council
February 10 , 2015
Page 9 of 9
FISCAL IMPACT:
If the City Council approves the above mentioned FY 2014-15 Mid -Year adjustments,
the FY 2014-15 City Budget will be amended to $23 ,053 ,380.
ATTACHMENTS:
A. FY 2013-14 Mid -Year General Fund Revenue Adjustments
B . FY 2013-14 Mid-Year General Fund Appropriation Adjustments
C. FY 2013-14 Fund Balance Analysis
Attachm en t "A"
CITY OF TEMPLE CITY
FY 2014-15 MID-YEAR REVENUE AD JUSTMENTS
Propose d
Origina l Budget Amendments Revised Budget
Gen e ral Fund
Real Estate Transfer Tax 01-810-32-3201 170,000 30,000 200,000
Franchise Fees 01-810-32-3207 560,000 20,000 580,000
Tra nsient Occupancy Tax 0 1-8 10-32 -3209 35,000 15,000 50 ,000
Property Tax Allocation 0 1-8 10-32-3211 2,700,000 35 ,000 2,735 ,000
Building Permit Fees 01-820-33-3303 300,000 200,000 500,000
Encroachment Permit Fees 01-820-33-3306 120,000 80,000 200,000
Plan Check Fees 01-840-35 -3508 400,000 170,000 570,000
Facility Rental Fees 01-840-35 -3510 65 ,000 10,000 75,000
Engineering Fees 01-810-35-35 12 50,000 35,000 85,000
Court Fines 01-850-3 6-3601 700,000 (300,000) 400,000
Renta l Income 0 1-870-38-3811 65,000 35,000 100,000
Other Re imbursement 01-870-38-3815 100,000 309,000 409,000
Sub -Total 5,265,000 639,000 5,904 ,000
Propositi on A Fund
Charges for Service-Bus Pass Sales 15-830-34-3507 140,000 8,900 148,900
Total 5,405,000 647,900 6,05 2,900
Special Co unsel
Traffic Engineering
Traffic Surveys
Bus Pa ss Sales
Enig1neeri ng Services
Special Equipment
0 1-9 10-43-4243
01-9S0-62-4236
0 1-950-62-4237
15-94 0-58-4 278
21-960-71-4239
Total Operating
To Be Determined
Total Fixed Assets
Grand Total
CITY O F TEMPLE CITY
FY 2014-1S MI D-YEAR APPROPRIATIONS ADJUSTMENTS
Original Budget
Amount
130,000
5,115
2,250
151,540
40,SOO
329,405
0
0
329,405
Propose d
Adjustments
148,000
15,000
15,000
20,000
220,000
418,000
40,000
40,000
458,000
Rev1sed Budget
Amount
278,000
20,115
17,250
171,540
260,500
747 ,405
40,000
40,000
787,405
City Attorney special legal expenses
Increased Traffic Analysis Activ ity
Increased Traffic Ana lysis Activ ity
Increase Cost of Bus Passes
Incorrect Budget ing for In-House Enginneer ing Services
Rep lace Parking Permit Machine
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CITY OF TEMPLE CITY
FY 2014-15 GENERAL FUND BALANCE ANALYSIS
FY 201 4 -15 Budget Amendments (Jul -Feb) and
Adopted Budget Ac tual Fund Balance (6 -30-1 4)
Est1mated Fund Balance July 1, 2014
Des1gnated $ -
Nonspendable $ 10,531 $
Comm1tted $ 3 ,500,000 s 3 ,500,000 $
ASSigned $ 12,769,580 $ 12,769.580 $
Unass1gned $ 1 .586.004 $ 1 ,328,611 $
Total Fund Balance Before Reserves $ 17,855,584 $ 17 ,608,722 $
Reserved (Interna l Purposes)
C1ty Loan (Ca la bee 's) $ 335.4 18 $ 335,418 $
C1ty Loan (Chamber) $ 4 ,100 $ 4 ,6 00 $
C1ty Loans (Homeowners) $ 56,775 $ 56,775 $
CRA loans $ $ $
Total Fund Bal ance July 1 , 201 4 $ 18,251 ,877 $ 18,005,515 s
Revenues $ 11 ,961 ,300 $ 12,021 ,300 $
Transfers In $ 500 $ 500 $
Estimated Expen ditures $ (1 1 ,928,835) $ (12 ,071,435) $
Operating Surplus/Defi cit s 32,965 $ (49,6 35) s
Esumated EquipN eh1cle Replacement $ (96,9 00) s (138510) s
CIP!Transfers Out $ (841 ,025) $ (877,495) s
Use of Reserves for Spec1fic ProJects $ (1 . 1 96,000) $ (1,209,300) s
Surplus/Deficit $ (2 ,1 00,960) $ (2 ,2 7 4 ,940) s
Estimated Fund Balance June 30, 2015 s 16,150,917 s 15,730,575 s
• Estimated Fund Balance Des1gnat1ons at June 30, 2015 1n a ccordance w1th the General Fund Budget Reseve Po lley
Nonspendable
Committed
Emergency/Disasters
LiqUidity
Local EconomiC Uncertainty
ASSi g ned
Fleet Management
Facilities Management
Technology Replaceme nt
Econom1c Development
Opportunllues for O ne-T1me Expend itures
Un assigned
Internal Reserves (C1ty Loa ns)
s 1,000,000
$ 2,000,000
$ 500.000
$ 400,000
$ 3,540,000
$ 49,028
$ 3,446,41 0
$ 4 ,547,436
$
$
s
s
$
$
10,531
3 ,500,000
11 .982,874
4 2 .3 77
395 793
15,931 ,575
A ttachme nt "C"
FY 2014 -15
M1d-Y ea r Budget Rev1ew
10,531
3 ,500 000
13 178.874
919,317
17 ,608,722
335,418
4 ,600
56,775
18,0 0 5 ,515
12,660 300
500
(12,249,435)
411 ,365
(178 510)
(1 097 495)
(1,209,300)
(2 ,073 ,940)
15,931 ,575 .