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Home My WebLink AboutSupplemental Information Rcvd from Robert Goldberg (2)CITY OF COSTA MESA, CALIFORNIA ADOPTED ••, , CAPITAL IMPROVEMENT BUDGET FISCAL YEAR 2019-2020 Prepared By the Finance Department In Collaboration With: Tamara Letourneau Assistant City Manager Raja Sethuraman Public Services Director From Fiscal Year 2016-2017 Through Fiscal Year 2019-2020 Executive Professional Development(') Auto Allowance Clothing Allowance Unemployment(2) Workers' Compensation (2) Employer Contr. Retirees' Med. Subtotal Salaries and Benefits Mnint ar+�e + r�'6 505500 564,799 505600 30,595 FY 18-19 FY 19-20 505800 Account FY 16-17 FY 17-18 Amended Adopted Account Descri tion Number Actuals Actuals Budget Bud et Sc�iprtes +_�-.. 510400 401,224 -- - M: ..-.- -- ._ ._ _.. ._ Regular Salaries -Sworn 501100 $ 19,282,641 $ 21,437-,379 $ 22,941,726 $ 22,868,488 Regular Salaries - Non Sworn 501200 15,118,935 16,726,832 18,569,966 21,360,205 Regular Salaries - Part time 501300 4,642,655 5,032,550 4,990,524 4,956,634 Overtime 501400 8,122,256 7,326,685 4,376,893 3,939,328 Accrual Payoff - Excess Maximum 501500 110,160 491,203 204,967 186,128 Vacation/Comp. Time Cash Out 501600 381,880 454,817 203,551 292,980 Holiday Allowance 501700 653,323 769,178 514,768 675,892 Separation Pay -Off 501800 252,658 194,432 15,162 145,375 Other Compensation 501900 2,006,433 2,251,913 2,952,970 2,851,660 Cafeteria Plan 505100 4,164,054 5,708,906 7,051,098 9,853,476 Medicare 505200 728,475 800,992 709,595 765,708 Retirement 505300 19,037,806 21,057,153 25,396,453 28,017,499 Longevity 505400 2,760 2,768 2,760 2,800 Executive Professional Development(') Auto Allowance Clothing Allowance Unemployment(2) Workers' Compensation (2) Employer Contr. Retirees' Med. Subtotal Salaries and Benefits Mnint ar+�e + r�'6 505500 564,799 505600 30,595 505700 - 505800 84,599 712,904 744,712 77,115 43,987 38,662 49,200 84,504 84,596 505900 2,587,118 3,233,145 3,309,062 - 506100 1,907,654 1,867,879 1,915,100 2,460,000 $ 79,678,801 $ 88,197,227 $ 94,022,565 $ 98,502,488 Stationery and Office 510100 205,743 263,191 $ 221,576 $ 175,550 Multi -Media, Promotions and Subs 510200 730,026 572,429 755,372 507,389 Small Tools and Equipment 510300 333,911 300,869 404,913 254,416 Uniform and Clothing 510400 401,224 326,300 459,600 355,700 Safety and Health 510500 407,218 396,627 495,098 381,430 Maintenance & Construction 510600 448,542 409,783 504,068 323,350 Agriculture 510700 138,109 90,382 113,500 97,000 Fuel 510800 - 72 200 - Electricity - Buildings & Fac. 515100 515,367 523,561 574,085 604,550 Electricity - Power 515200 243,008 247,164 284,013 281,800 Electricity - Street Lights 515300 988,547 1,007,520 1,100,000 1,000,000 Gas 515400 45,182 37,489 47,299 45,400 Water- Domestic 515500 124,460 113,572 167,489 149,200 Water - Parks and Parkways 515600 628,055 748,009 648,795 785,000 Waste Disposal 515700 130,689 141,495 170,354 161,800 Janitorial and Housekeeping 515800 457,807 440,416 467,635 481,713 Postage 520100 197,277 105,773 103,179 - Legal Advertising/Filing Fees 520200 257,587 236,100 231,061 236,600 Advertising and Public Info. 520300 13,503 10,129 16,275 14,300 Telephone/Radio/Communications 520400 547,152 538,745 664,085 765,200 Business Meetings 520500 57,729 58,369 83,273 46,580 Mileage Reimbursement 520600 4,151 4,558 6,145 3,300 Dues and Membership 520700 - 1,120 36,000 36,000 Board Member Fees 520800 30,500 30,500 33,400 41,300 72 From Fiscal Year 2016-2017 Through Fiscal Year 2019-2020 CITY MANA#ER'S it City Manager FY 16-17 Adopted FY 17-18 Adopted FY 18-19 Amended FY 19-20 Adopted CITY CQUNIQi 2.00 2.00 1.00 1.00 Mayor - - 1.00 1.00 Council Member 5.00 5.00 6.00 6.00 Executive Secretary 1.00 1.00 1.00 1.00 Management Analyst/Chief of Staff - - 1.00 1.00 Total City Council 6.00 6.00 9.00 9.00 CITY MANA#ER'S it City Manager 1.00 1.00 1.00 1.00 Assistant City Manager 2.00 2.00 1.00 1.00 Administrative Secretary 1.00 1.00 1.00 1.00 Assistant to the City Manager - - - 1.00 Central Services Supervisor 1.00 1.00 1.00 1.00 City Clerk 1.00 1.00 1.00 1.00 Community Outreach Worker 1.00 1.00 2.00 - Deputy City Clerk 2.00 2.00 2.00 2.00 Executive Assistant to the City Manager 1.00 1.00 1.00 1.00 Executive Secretary 1.00 1.00 1.00 1.00 Graphics Designer 1.00 1.00 1.00 1.00 Human Resources Administrator - 1.00 1.00 1.00 Human Resources Analyst 3.00 3.00 2.00 3.00 Human Resources Manager 1.00 1.00 1.00 1.00 Human Resources Office Specialist II 1.00 1.00 1.00 1.00 Management Analyst 1.00 1.00 1.00 - Neighborhood Improvement Manager - - 1.00 - Principal Human Resources Analyst 2.00 1.00 2.00 2.00 Public Affairs Manager 3.00 3.00 3.00 2.00 Senior Management Analyst - - - 1.00 Senior Code Enforcement Officer - - 1.00 - Video Production Coordinator 1.00 1.00 1.00 1.00 Video Production Specialist - - 1.00 1.00 Website Coordinator 1.00 1.00 1.00 1.00 Total City Manager's Office 25.00 25.00 28.00 25.00 FINANCE DEPAIt M N.T Finance Director 1.00 1.00 1.00 1.00 Accountant 1.00 1.00 1.00 2.00 Accounting Specialist 1 1.00 1.00 1.00 1.00 Accounting Specialist II 3.00 3.00 3.00 3.00 Accounting Supervisor 1.00 1.00 1.00 1.00 Assistant Finance Director 1.00 1.00 1.00 1.00 Budget Analyst 1.00 1.00 1.00 2.00 Budget Specialist 1.00 1.00 1.00 - Buyer 2.00 2.00 3.00 3.00 Executive Secretary 1.00 1.00 1.00 1.00 Management Analyst 1.00 1.00 1.00 1.00 Payroll Coordinator 1.00 1.00 1.00 1.00 Permit Processing Specialist 1.00 1.00 1.00 1.00 Purchasing Supervisor 1.00 1.00 1.00 1.00 Revenue Supervisor 1.00 1.00 1.00 1.00 Tax Auditing Specialist 1.00 - - - 75 INTRODUCTION The City of Costa Mesa prepares a Five -Year Forecast of General Fund revenues and expenditures on an annual basis in order to evaluate the City's fiscal condition and to guide policy and programmatic decisions. The development of the Five -Year Forecast as part of the budget development process is identified as a best practice by the Government Finance Officers Association (GFOA). GFOA recognizes a financial forecast as a "fiscal management tool that presents estimated information based on past, current and projected financial conditions. This will help identify future revenue and expenditure trends that may have an immediate or long-term influence on government policies, strategic goals and community services." The Five -Year Forecast focuses primarily on the forecast of future revenues and expenditures of the City's General Fund and analyzes future expenditure trends with particular emphasis on negotiated labor contracts, pension costs, infrastructure needs and the current priorities of the City Council. The City utilizes the information in the Five -Year Forecast as part of its annual budget development and updates the projections each year. ASSUMPTIONS The Five -Year Forecast includes key assumptions over the forecast period. These include: • Sustained modest growth averaging 1 percent in Fiscal Year 2020-21 and no adverse economic down turns. • Projected revenue growth in Fiscal Year 2021-22 and beyond of 1 percent to 3 percent with stable economic conditions. • Status quo expenditure growth with no new costs, programs, or initiatives. • Personnel costs include costs of already negotiated labor MOUs but does not assume increases beyond that, however, pension costs are expected to continue to rise. • Balancing measures used in Fiscal Year 2019-20 will not be used in the future to balance the budget. Specific assumptions used in the development of the Five -Year Forecast are detailed out below. REVENUES SALES AND USE TAX The forecast anticipants modest gains in all categories with automobile/transportation and fuel/ service stations and State and County pools contributing more to the overall growth. The largest factor contributing to uncertainty is the impacts of the Wayfair decision on sales and use tax revenue growth. For Fiscal Year 2019-20 revenue increases are projected at 1 percent and increase to 3 percent by Fiscal Year 2024-25. PROPERTY TAX For Fiscal Year 2019-20 revenue increases are projected at 0.67 percent and increase to 3 percent by Fiscal Year 2024-25. TRANSIENT OCCUPANCY TAX Orange County remains a highly desirable destination to travelers in the United States as well as internationally. The addition of several new hotels at surrounding cities has put additional pressure on Costa Mesa hotels to reinvent themselves in order to attract tourists. For Fiscal Year 2019-20 revenue increases are projected at 0.5 - percent and increase to 3 percent by Fiscal Year 2024-25. m From Fiscal Year 2019-2020 Through Fiscal Year 2024-2025 85 FY 18-19 FFY 19-20 I FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 Amended Ado ted Forecast Forecast Forecast Forecast Forecast $ 61,969,937 $ 59,854,856 $ 60,554,523 $ 61,160,068 $ 62,383,270 $ 64,254,768 $ 66,182,411 42,958,877 43,246,886 43,678,905 44,551,583 45,886,781 47,262,034 48,678,545 9,571,342 9,619,199 9,715,391 9,909,699 10,107,892 10,411,129 10,723,463 5,054,219 5,166,745 5,226,658 5,287,593 5,349,568 5,412,603 5,476,719 942,541 955,000 964,550 974,196 983,937 993,777 1,003,715 1,560,000 1,143,000 2,064,000 2,084,640 2,105,486 2,126,541 2,147,807 - 64,575 64,575 64,575 64,575 64,575 64,575 3,445,541 3,402,145 3,402,145 3,402,145 3,402,145 3,402,145 3,402,145 1,554,770 1,623, 244 1,631,360 1,639, 517 1,647,715 1,655, 953 1,664, 233 4,238,163 4,283,988 4,378,988 4,385,288 4,391,777 4,398,461 4,405,345 667,411 438,600 438,600 438,600 438,600 438,600 438,600 - 81,000 81,810 82,628 83,454 84,289 85,132 3,000,000 3,400,000 3,434,000 3,468,340 3,503,023 3,538,054 3,573,434 4,827,926 5,351,601 5,405,117 5,459,168 5,513,760 5,568,897 5,624,586 1,958,177 1, 920, 064 1, 427,247 1,427,247 1,427,247 1,427,247 1,427, 247 40,000 1,150,000 - - - - - $ tai '$ = °-: : 7sl ..:.,:-:. w=:r= 3-i ... ," 'i $ 46,502,216 $ 49,185,327 $ 49,740,859 $ 49,795,788 $ 49,795,788 $ 49,795,788 $ 49,795,788 25,396,453 28,017,499 29,805,560 32,022,611 33,897,611 35,087,611 36,299,251 22,123,896 21,299,662 21,379,668 21,462,273 21,547,563 21,635,624 21,726,545 29,618,764 34,496,295 37,120,241 38,671,791 39,672,074 40,715,564 41,804,522 3,073,580 3,030,958 2,814,550 2,802,550 2,803,300 2,799,550 2,796,175 115,072 500,000 500,000 500,000 500,000 500,000 500,000 -tax W $ 1,268,531 $ 1,345,620 $ 1,372,274 $ 1,399,462 $ 1,427,193 $ 1,455,479 $ 1,484,331 $ 271,929 $ - $ - $ - $ - $ - $ 1,003,400 - - - - - 3,425,000 - - - - - - 8,576,902 4,280,141 9,178,932 9,299,585 9,490,857 9,733,858 9,983,942 1,731,074 - - - - - - 1,750,000 - 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 3,290,812 - 500,000 500,000 500,000 - - S 14_ 147; $.:1. +1T......: $ 5 3x872 .. 1 . 1 : 1 $...,1ti :_: : 13 35 46%`- 1 484 492 492 492 492 492 492 445 N/A N/A N/A N/A N/A N/A 85 In order to achieve cash flow savings, in July 2019 the City will elect the annual lump sum payment option offered by CalPERS for its Fiscal Year 2019-20 unfunded pension liability contribution. The lump sum payment will result in anticipated cash flow savings of approximately $600 thousand. Healthcare Costs: Healthcare is another major contributor to the City's increasing compensation burden. Healthcare costs are anticipated to increase annually by 8% over the next five-year period, exceeding the growth of revenues. With little control over future healthcare costs and national policies we will continue to negotiate the best rates for the City, promote wellness and seek increased cost sharing from our workers. Federal Funding: The City receives Community Development Block Grant (CDBG) and HOME Investment Partnership Program (HOME) grant funds. There is a potential for a significant reduction in these funds. Self -Insurance Costs: The budget includes funding for litigation costs, including those related to sober living litigation. However, the self-insurance fund is not fully funded for existing claims. The City is taking steps to curb these costs and determine the best method to fund reserves. Costa Mesa Bridge Shelter. The temporary Costa Mesa Bridge Shelter opened in April 2019 in a temporary facility leased by the City. We anticipate operational costs will total nearly $2.6 million in Fiscal Year 2019-20. While we are pursuing every opportunity for outside funding, we will need to subsidize operations using General Fund dollars totaling approximately $2.0 million in Fiscal Year 2019-20. As we embark on site improvements necessary to prepare a newly acquired property for use as the permanent shelter location, we are evaluating projected operating costs and expect the General Fund subsidy may increase in future fiscal years. Rebuilding the General Fund Reserves: In 2015, City Council adopted a policy determining the appropriate fund balance reserve level for the General Fund is $55,000,000 and committed to a plan to reach that goal and to increase the reserve level by a CPI factor annually in years where the General Fund had a surplus. Since the policy was adopted, General Fund fund balance has exceeded the minimum reserve level topping $64.5 million in Fiscal Year 2015-16. However, over the last two years, reserves have begun to decline. The fund balance in the General Fund for the Fiscal Year 2017-18 totaled $55 million and is estimated to total $46.6 million at the end of Fiscal Year 2018-19. This decline is anticipated to continue and is projected to total $43 million by the end of Fiscal Year 2019-20. This represents a decrease of $12 million or 21.8% over a period of two years. When the City uses General Fund reserves to pay for unanticipated costs, a best practice is to use reserves for one-time costs, rather than annual ongoing costs such as salaries and services. The use of General Fund reserves over the last two years was necessary to address high priority issues such as defending the City in litigation related to sober living cases, opening the temporary bridge shelter, and . acquisition and renovation of the permanent bridge shelter site. To make the most of our resources, and to ensure that we continue to have resources in even harder times, will have to prioritize how we spend money and focus on the return on taxpayer investment. City Council will face difficult decisions in the coming years to ensure we can continue delivering the highest level of services to the community. BUDGETARY REPORTING AWARDS The budget was prepared in accordance with local ordinances, state statutes, and best practices in budgeting recommended by the National Advisory Council on State and Local Budgeting. Additionally, this document will also be prepared in a manner that meets the Budget Awards Program criteria established by the Government Finance Officers Association (GFOA) of the United States and Canada and the California Society of Municipal Finance Officers (CSMFO). 9 ►L,�J GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award PRESENTED TO City of Costa Mesa California For the Fiscal Year Beginning July 1, 2018 OAm�� P. *ww Executive Director pli!ZI