mid-year budget review - santa ana, california...$208.4m (actuals) $11.8m fy 14-15 ending operating...

Mid-Year Budget ReviewCity Council Meeting

City of Santa AnaFebruary 21, 2017ITEM 65B

TABLE OF CONTENTS

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I. Path to Fiscal Stability

II. FY 16-17 Economic Overview

III. FY 16-17 General Fund Projected Year-End Balance

IV. Fiscal Year Ending Operating Balance

V. Assigned Balances

VI. Next Steps

Path to Fiscal Stability

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PATH TO FISCAL STABILITY

• Understanding the City’s Budget• FY 2008-2009• 1,785 Full Time Employees (FTE)• $239.1M General Fund Budget• Consolidation of Departments

(e.g. Library Services merged with Parks and Rec. Services)

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PATH TO FISCAL STABILITY CONTINUED

• FY 2012-2013• 1,203 Full Time Employees (FTE)• $196.5M General Fund Budget• Outsourcing of the Fire Department to

OCFA• Due to effective resource utilization and

strong management, the City generated a positive ending operating balance.• Results in lower expenditure base• Increase in actual revenues

City of Santa AnaEconomic Overview

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FY 2016-17 OPERATING BUDGET

On June 21, 2016, the City Council adopted the FY 2016-17 Budget

Operating Budget Revenues Expenditures

General Fund $228,970,000 $228,970,000

Total Citywide Budget $513,887,000 $513,887,000

General Fund Operations: Mid-year Report

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General Fund Operations: Budget to Actuals Comparison

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JULY - DECEMBER 2016

GENERAL FUNDFY 16-17

Annual Budget

FY 16-17 July - Dec.

Actuals% Received

Revenues $228,970,000 $80,386,907 35.1%

Expenditures $228,970,000 $112,413,436 49.1%


GENERAL FUNDFY 15-16

Annual Budget


Actuals% Received

Revenues $225,813,258 $71,483,418 31.7%

Expenditures $225,813,258 $106,945,455 47.4%

FY 2016 – 2017General Fund 11 Revenue Sources

Estimated Revenues: $228,970,000

Sales Tax $46,504,000 (20.3%)

Property Tax $33,022,000 (14.4%)

Utility Users Tax $27,780,000 (12.1%)

Other Taxes $11,548,160 (5.1%)

Business Tax $11,632,323 (5.1%)

Hotel Visitor’s Tax $9,430,000 (4.1%)

Intergovernmental$8,521,802 (3.7%)

Franchise Fees$3,308,620 (1.5%)

Charges for Services & Fees

$10,244,709 (4.5%)

Property Tax In Lieu VLF

$30,096,000 (13.2%)

Licenses and Permits

$4,654,774 (2.0%)

Use of Money & Property

$17,018,300 (7.4%)

Miscellaneous

$10,331,856 (4.5%)

Fines

$4,877,456 (2.1%)

A Diversified General Fund Revenue Base.

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General Fund Revenues: Top 6BUDGET TO ACTUALS

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JULY - DECEMBER 2016 (50%)

Top 6 General Fund

Revenues

FY 16-17 Annual Budget


Actuals% Received

Sales Tax $46,504,000 $17,551,205** 37.7%

Property Tax $33,022,000 $17,854,802 54.1%

Property Tax In-Lieu of

VLF*$30,096,000 ------ -----

UUT $27,780,000 $10,977,808 39.5%

Business License $11,632,323 $2,202,351 18.9%

Hotel Visitors Tax $9,430,000 $4,424,793 46.9%

Total Top 6 $158,464,323 $53,010,959 33.5%

* Revenue is received in the 3rd and 4th Quarter (January and May)

**Amount reflects full 1% of Bradley-Burns Local Sales Tax

General Fund Revenues: Top 6Actuals Vs. Actuals

FY 15-16 v. FY 16-17

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Top 6 General Fund

Revenues


Actuals


Actuals% Variance

Sales Tax $11,769,028 $17,551,205** $5,782,177 49.1%

Property Tax $16,891,583 $17,854,802 $963,219 5.7%

Property Tax In-Lieu of

VLF*-------- ------- ------- --------

UUT $11,528,284 $10,977,808 ($550,476) -4.8%

Business License $2,226,895 $2,202,351 ($24,544) -1.1%

Hotel Visitors Tax $4,083,902 $4,424,793 $340,891 8.3%

Total Top 6 $46,499,692 $53,010,959 $6,511,267 14.0%

* Revenue is received in the 3rd and 4th Quarter (January and May)

**Amount reflects full 1% of Bradley-Burns Local Sales Tax

Positive Development Activity

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General Fund Revenues

FY 16-17 Annual Budget


Actuals% Received

Building Plan Check $1,292,845 $2,757,322 213.3%

Electrical Plan Check $149,433 $425,356 284.6%

Mechanical Plan

Check$121,337 $326,293 268.9%

Plumbing Plan Check $45,966 $178,563 388.5%

Total $1,609,581 $3,687,534 229.1%

General Fund Revenues: BUDGET TO ACTUALS COMPARISON

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General Fund RevenuesFY 16-17

Annual Budget


Actuals

% Received

Dept. Revenue Total: $70,505,677 $27,375,948 38.8%

Top 6 GF Revenues $158,464,323 $53,010,959 33.5%

Total: $228,970,000 $80,386,907 35.1%

Projected Revenues as of December is $225,671,339. Current Year-End revenue shortfalls include:

1) Water Overhead Transfer: ($2.4M) 2) UUT: ($2.2M)3) Jail Rental Facility: ($2.4M)

City of Santa AnaTop General Fund Revenues

Sales Tax

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Sales Tax Overview

Sales Tax Base by Category

General Retail 23.8%

Transportation 22.6%

Business to Business 20.7%

Food Products 17.9%

Construction 13.9%

Other 1.1%

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Property Tax

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Property Tax Overview

Fiscal Year Secured Value Unsecured Value Total Assessed Value

% Change

Total Value

2016-2017 22,436,846,167 1,449,280,188 23,886,126,355 3.8%

2015-2016 21,528,908,507 1,484,317,701 23,013,226,208 4.2%

2014-2015 20,432,992,347 1,642,391,147 22,075,383,494 4.5%

2013-2014 19,579,938,214 1,539,744,991 21,119,683,205 3.8%

2012-2013 18,829,929,040 1,509,850,095 20,339,779,135 1.2%

2011-2012 18,509,577,519 1,591,286,970 20,100,864,489

Source: Orange County Auditor-Controller Office Assessed Valuations

City of Santa Ana

Assessed Valuation

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Property Tax Overview

A majority of the assessed basic property value is derived from residential, commercial and industrial parcels.

Net Taxable Value

Residential 59.4%Commercial 21.2%Industrial 12.1%

Total: 92.7%

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Source: HdL Co. (Consultant)


Property Tax in Lieu of Vehicle License Fee (VLF)

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Property Tax In Lieu of Vehicle License Fee (VLF)

Property Tax (VLF) is the third largest general fund revenue source.

In 2004, the California Legislature approved a VLF for property tax swap.

The result was a reduction of the VLF from 2% to 0.65% and the difference in the reduction was backfilled to cities and counties with property tax.

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Utility User Tax

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Utility User Tax (UUT) Overview Utility Users Tax represents the fourth largest revenue source for the City

The UUT is applied to four categories: Electricity (48.0% of total UUT revenues) Telephone (34.1% of total UUT revenues) Water (9.6% of total UUT revenues) Gas (8.3% of total UUT revenues)

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Business License

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Business License

Business License represents the fifth largest revenue source for the City

Number of Business Licenses:2016 = 30,593 vs. 2015 = 29,107

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Hotel Visitors’ Tax (HVT)

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Hotel Visitors’ Tax (HVT) Hotel Visitors’ Tax is the sixth largest general fund revenue. HVT Rate since January 2005 is 11% Total number of hotels is 36. The top 10 generate 75% of the City’s Hotel Visitors’ tax.

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TOP 10 REPORTING HOTELS - REVENUE

ALPHABETICAL SECTION

Best Western Orange County Airport North

Candlewood Suites

Courtyard By Marriott Santa Ana

Doubletree Club Hotel

Doubletree Hotel Santa Ana Orange County Airport

Embassy Suites

Hampton Inn & Suites

Holiday Inn Orange County Airport

La Quinta Inn #2006

South Coast Metro Courtyard

General Fund Operating BudgetFiscal Year 2016-2017

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Fire Department

$41,765,144 (18.2%)

Police Department

$120,257,118 (52.5%)

Finance & Mgmt. Services

$4,873,614 (2.1%)

Public Works

$5,908,755 (2.6%)

Parks, Recreation, &

Com. Services

$19,366,804 (8.5%)

All Others$14,706,278 (6.4%)

Planning & Building

$9,514,222(4.2%)

Debt Service & Transfers

$12,578,065 (5.5%)

FY 2016-2017 General Fund 11 Appropriations$ 228,970,000

City Manager’s Office $2,270,005 (1.0%)

City Attorney’s Office $2,878,925 (1.3%)

Community Development $465,675 (0.2%)

Personnel $1,405,042 (0.6%)

Non-Departmental $2,224,235 (1.0%)

Bower’s Museum $1,475,890 (0.6%)

Legislative Affairs $377,515 (0.2%)

Clerk of the Council $976,761 (0.4%)

Information Services $2,632,230 (1.1%)

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General Fund Expenditures: BUDGET TO ACTUALS

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July – December (50%)

Departmental ExpendituresFY 16-17

Annual Budget


Actuals% Expended

City Manager $ 2,647,520 $ 1,167,032 44.1%

Non-Dept $ 17,434,530 $ 8,296,799 47.6%

Clerk of the Council $ 976,761 $ 445,037 45.6%

City Attorney's Office $ 2,878,925 $ 1,657,176 57.6%

Personnel Department $ 1,405,042 $ 588,666 41.9%

Finance & Management Services Agency $ 4,873,614 $ 2,114,744 43.4%

Bowers Museum $ 1,475,890 $ 737,853 50.0%

Parks and Recreation Services Agency $ 19,366,804 $ 8,567,922 44.2%

Police Department $ 120,257,118 $ 58,337,154 48.5%

Fire Department $ 41,765,144 $ 23,424,548 56.1%

Planning & Building Agency $ 9,514,222 $ 4,774,949 50.2%

Public Works Agency $ 5,908,755 $ 2,091,343 35.4%

Community Development Agency $ 465,675 $ 210,211 45.1%

TOTAL GENERAL FUND $ 228,970,000 $ 112,413,436 49.1%

General Fund Expenditures: ACTUALS TO ACTUALS

FY 15-16 v. FY 16-17

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Departmental ExpendituresFY 15-16

July - Dec.Actuals


ActualsVariance

City Manager $ 1,020,800 $ 1,167,032 $ 146,232 14.3%

Non-Dept $ 8,884,922 $ 8,296,799 $ (588,123) -6.6%

Clerk of the Council $ 389,237 $ 445,037 $ 55,800 14.3%

City Attorney's Office $ 1,499,146 $ 1,657,176 $ 158,030 10.5%

Personnel Department $ 647,614 $ 588,666 $ (58,949) -9.1%

Finance & Management Services Agency $ 1,920,332 $ 2,114,744 $ 194,412 10.1%

Bowers Museum $ 730,565 $ 737,853 $ 7,288 1.0%

Parks and Recreation Services Agency $ 8,096,112 $ 8,567,922 $ 471,811 5.8%

Police Department $ 53,146,193 $ 58,337,154 $ 5,190,961 9.8%

Fire Department $ 23,669,959 $ 23,424,548 $ (245,411) -1.0%

Planning & Building Agency $ 4,078,307 $ 4,774,949 $ 696,642 17.1%

Public Works Agency $ 2,631,484 $ 2,091,343 $ (540,140) -20.5%

Community Development Agency $ 230,784 $ 210,211 $ (20,573) -8.9%

TOTAL GENERAL FUND $ 106,945,455 $ 112,413,436 $ 5,467,981 5.1%

General Fund Operating BudgetProjected Year End

Fiscal Year 2016-2017

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General Fund Operations

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Projected Net Operating Balance: ($3,179,684)

Pending items:1) Christmas Sales2) Additional major development3) Additional utility usage4) Expenditure Trends

PROJECTED YEAR-END FY 16-17

GENERAL FUNDFY 16-17 Annual Budget

FY 16-17 Projected

% Received

Revenues $228,970,000 $225,671,339 98.6%

Expenditures $228,970,000 $228,851,023 99.9%

FISCAL YEAR ENDING OPERATING

BALANCE

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General Fund(s) include:

1) Fund 11 – General Fund2) Fund 50 – Council Special

Projects3) Fund 52 – Strategic Plan 4) Other Funds

Final numbers are audited and validated annually in December for the year-end operating balance

FY 15-16 GENERAL FUND ENDING OPERATING BALANCE

$215.5M(Actuals without triple-flip)

$212.0M(Actuals)

$3.5M

FY 15-16Ending Operating

Balance

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Revenues Expenditures

$2119M(Actuals)

5.6M

Triple-Flip Payment• On June 24, 2016 the DOF directed the State Controller to

transfer the final Triple-Flip payment to the Counties• The County Auditors had 60 days to make the final payment to

cities and counties• On July 15, 2016 the City received final Triple-Flip payment of

$5,677,782.91

$3.5M Ending Operating Balance(without triple-flip)

$9.1MFinal Ending Operating Fund

Balance(with triple-flip)

FY 2015-16 SURPLUS CALCULATION

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FY 14-15 GENERAL FUND ENDING OPERATING BALANCE

$220.2M(Actuals)

$208.4M(Actuals)

$11.8M

FY 14-15Ending Operating

Balance

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Revenues

Expenditures

FY 14-15 Surplus Allocationo Surplus Allocation Monies of $11.8M in October 2015

• Technology - $2,653,600

Computer/Technology Replacements and Software Enhancements

Communication Upgrades

• Investment in City - $2,550,000

General Plan Update

Branding Study

Pension Stability

• City Facility/Assets - $2,885,000

HVAC Projects – Library and Community Centers

Vehicle Replacement

Calle Cuatro/Plaza Calle Cuatro

• Parks - $1,870,200

Playground Equipment and Basketball Court/Trail Resurfacing

Restroom Renovations

• Public Safety/Security - $1,290,000

200 Body Cameras,

Security Lights at eight parks

Homeless efforts

• 20% Operating Reserve - $500K 39

ASSIGNED BALANCES

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$6M FUND BALANCE AMOUNT EXPLANATION

$2.5M From encumbrance and project savings

$3.5M From Prepaid Savings (OCFA)

$6.0M Available Fund Balance

$2119M(Actuals)

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Encumbrance procedure occurs annually

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AS OF JANUARY 31 2017

Assigned Programs as of June 30, 2016 (GENERAL FUND)Community Engagement 500,000

So. Main, Downtown, Harbor Blvd., 17th St. Business Corridor 1,600,000

South Main Development ($400K)

Downtown ($400K)

Harbor Boulevard ($400K)

17th Street Business Corridor - ($400K)

Pension Stability Fund 500,000

Orange County Animal Shelter 550,000

Jail Revenue Stability Fund 1,000,000

Economic Development/Infrastructure: SARTC 400,000

Additional Police Officers (June 21 Council Meeting) 1,500,000

Subtotal General Fund Assigned Programs as of 6/30/2016 6,050,000

City Council Approved Fund Balance Items (GENERAL FUND)

Civic Center Safety/Homeless - 09/20/2016 CCM (731,836)

Animal Shelter Payment - 01/17/2017 CCM (750,000)

Subtotal (1,481,836)

Remaining Available General Fund Balance 4,568,164

CURRENT ASSIGNED PROGRAM BALANCE

NEXT STEPS

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NEXT STEPS

• Development and adoption of FY 2017-2018 Balanced Budget by June• Key Elements

• Available monies are one time only monies

• Importance of maintaining the 20% operating reserve ($42.4M) and a healthy Economic Uncertainty Account ($3.8M)

• All Bargaining Units MOU’s are scheduled to expire June 2017

• Conduct Community Outreach Meetings

Mid-Year Budget ReviewCity Council Meeting

City of Santa AnaFebruary 21, 2017

mid-year budget review - santa ana, california...$208.4m (actuals) $11.8m fy 14-15 ending operating...

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