General Fund FY 2022-23
First Quarter Financial Status
City Council
November 15, 2022
FINANCIAL
SERVICES
First Quarter Report Overview
FY 2021-22 Year End Results (unaudited)
FY 2022-23 Q1 Results
Revenues: Highlights & Trends
Expenditures: Spending to Date
FY 2022-23 Year End Forecast
Revised Recurring Budget Balance
Projected General Fund Spendable Balance
CalPERS Update
General Fund 5 Year Financial Forecast
2 FY 2021-22 Year End Results
Spendable General Fund balance as of July 1, 2022 is
$39.5 million
$20.8 million higher than balance projected during FY 2022- 23 budget process
Higher than expected fiscal year end budget savings totaling to $8.2 million (4.1% of recurring General Fund Budget) Recurring revenues significantly over revised projections, reflecting post-pandemic economic recovery and inflation Receipt of some large one-time revenues
Independent Financial Audit in process
Will return to the City Council with the Annual
Comprehensive Financial Report (ACFR) in January
3 Q1 Actual Revenue to Revised Forecast
numbers shown in $1,000’s
4 RECURRING REVENUE
CATEGORY
2021-22
Actual
2022-23
Adopted
2022-23
Revised
Change
from
Adopted
2022-23
Actual
Received
% of
Revenue
Received
Sales Tax $ 58,549 $ 54,417 $ 58,417 $ 4,000 $ 4,798 8.2% Property Tax 63,295 61,787 63,287 1,500 1,015 1.6%
Utility User's Tax 16,392 16,312 16,312 4,436 27.2%
Service Charges 21,608 18,406 18,406 4,235 23.0%
Transient Occupancy Tax 10,526 10,048 10,548 500 1,167 11.1% Transient Parking Tax 3,691 3,339 3,699 360 0.0%
All Other Revenue 38,033 37,525 37,525 8,007 21.3%
TOTALS $ 212,094 $ 201,834 $ 208,194 $ 6,360 $ 23,658 11.4% Sales Tax (+$4 million)
FY 2021-22 year-end actuals for Bradley-Burns sales tax were $41.5 million, $4.7 million over forecast
Exceeded pre-pandemic numbers (FY 2018-19 was $35.5 million) Measure P year-end actuals were $31.7 million (50% General Fund, 50% Infrastructure Fund)
Inflation impacting the price of goods and commodities Fuel and Service Stations up 79.3%
Restaurants and Hotels up 47.5%
Autos and Transportation up 31%
Business and Industry up 17.7%
General Consumer Goods up 15.6%
5 Q1 General Fund Revenue Adjustments
Q1 General Fund Revenue Adjustments
Citywide Assessed value increased by $2.3 billion, or 8.5% from prior year Transfers of ownership
Proposition 13 CPI
Reassessments from new development
Unsecured property (largely aircraft)
Payoff of RDA loan increased residual payments to all taxing entities Median single family home sale price in Burbank for 3rd quarter 2022 (July through September) was $1,183,000
6 Property Tax (+$1.5 million)
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
2020
Q1
2020
Q2
2020
Q3
2020
Q4
2021
Q1
2021
Q2
2021
Q3
2021
Q4
2022
Q1
2022
Q2
2022
Q3
Sales Price
Year/Quarter
City of Burbank Singly Family Home Sale Prices
Average Price
Median Price
Transient Occupancy Tax (TOT) (+500,000)
Occupancy rates up 7.1% year over year
Average room prices up 17.7% year over year
7 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Burbank Hotel Occupancy Rates
Q1 General Fund Revenue Adjustments
Transient Parking Tax (TPT) (+360,000)
TPT revenue rebounding as tourism and airline travel return to pre- pandemic levels
Hollywood Burbank Airport Passenger Counts
8 -
100,000
200,000
300,000
400,000
500,000
600,000
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Q1 General Fund Revenue Adjustments
Q1 General Fund Expenditure Results
9 * Appropriations include all carryovers as well as any additional General Fund budget amendments approved by the City Council since the adoption of the FY 2022-23 Budget. The original General Fund adopted budget totals $219,630,830.
EXPENDITURE APPROPRIATIONS EXPENDITURES PERCENT
CATEGORY FY 2022-23 as of 9-30-2022 EXPENDED
Police 65,393,364 15,641,625 23.9%
Fire 40,033,611 10,411,868 26.0%
Parks and Recreation 30,728,092 7,031,191 22.9%
Library Services 9,020,187 1,948,054 21.6%
Community Development 18,866,822 2,725,270 14.4%
Public Works 19,232,977 4,093,825 21.3%
Administrative Services 25,951,173 5,188,685 20.0%
Non-Departmental 25,180,967 20,399,917 81.0%
TOTALS 234,407,193 67,440,435 28.8%
2022 CalPERS Update
10 FY 2020-21 net investment return of 21.3% increased the City’s overall funded status to an average of 84.1%
Triggered reduction of discount rate from 7% to 6.8%
CalPERS revised assumptions show longer life expectancies and salary inflation
• Burbank’s FY 2023-24 normal cost increased
• Burbank’s FY 2023-24 UAL cost decreased
FY 2021-22 investment returns had a negative (6.1%) loss Will impact UAL costs and funded status beginning in FY 2024-25
FY 2022-23 unlikely to achieve 6.8% expected rate of return CalPERS Pension Costs
11 Classification
Actual
FY 2021 -22
Actual
FY 2022 -23*
Actual
FY 2023 -24
Projected
FY 2024 -25
Police 3% @ 50 Rate 23.10% 22.05% 24.01% 23.20%
Police Liability
Payment $7,300,248 $8,152,664 $7,175,729 $7,064,000
Fire 3% @ 55 Rate 17.55% 17.71% 18.80% 18.40%
Fire Liability Payment $4,561,502 $5,028,014 $4,465,006 $4,306,000 Misc 2.5% @ 55 Rate 10.38% 10.00% 11.11% 10.90%
Misc Liability Payment $19,578,570 $21,224,820 $18,843,953 $18,221,000 *Amounts shown are the total employer contribution amounts required for FY 2022-23. The City has completed the prepayment of the additional UAL payment to CalPERS which will result in a net savings of $1,661,016 citywide.
CalPERS Investment Return History
10.80%
-7.10%
-6.00%
3.90%
16.70%
12.60%
12.30%
19.10%
-4.90%
-23.40%
11.60%
20.90%
0.10%
13.20%
18.40%
2.40% 0.60%
11.20%
8.60%
6.70%
4.70%
21.30%
-6.10%
-25.00%
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 12 CalPERS Pension Funding Plan
Final multi-year pension funding plan payment of $12 million paid in July 2022
$53 million in additional payments sent to CalPERS resulting in $6 million in recurring savings ($4.1 million General Fund) Classification
Original 2023 -24
Payment
NEW 2023 -24
Payment SAVINGS
Miscellaneous Plan $18,843,953 $17,708,252 $1,135,701
Police Plan $7,175,729 $6,785,493 $390,236
Fire Plan $4,465,006 $4,334,927 $130,079
Citywide Total $30,484,688 $28,828,672 $1,656,016
Estimated General Fund Savings: $1,126,091
13 Burbank UAL Savings FY 2023 -24
Projected FY 2022-23 General Fund Balance
Adopted FY 2022-23 Recurring Revenues $201,834,053
1st Quarter Revenue Adjustments 6,360,000
Less: Recurring Appropriations (201,438,658)
TOTAL RECURRING BALANCE $6,755,395
14 Projected FY 2022-23 General Fund Balance
Projected Spendable Fund Balance 6/30/22 $52,059,874
Less: Formal & Compensated Absence Reserve Adjustments (12,599,378) Projected Beginning Spendable Balance 7/1/22 $39,460,496 Use of American Rescue Plan Funding 5,845,000
Other Non-Recurring Revenue/Use of Resources 8,597,271
Estimated Budget Savings FY 2022-23 3,021,580
Less: Adopted One-Time Budget Items (9,592,564)
Less: Adopted Contribution to CalPERS (7,969,600)
Less: Deposit to 115 Trust (6,700,000)
Less: Items Added Post Budget Adoption (407,903)
TOTAL NON-RECURRING BALANCE $32,254,280
15 Projected FY 2022-23 General Fund Balance
Total Recurring Balance $ 6,755,395
Total Non-Recurring Appropriations 32,254,280
PROJECTED GENRAL FUND
SPENDABLE BALANCE 6/30/23: $39,009,675
16 General Fund 5-Year Forecast (in millions)
Ending GF
Balance: $39.0 $59.5
17 $208.2
$213.5
$220.1
$226.8
$233.8
$201.4
$206.7
$216.4
$223.9
$232.3
$160
$170
$180
$190
$200
$210
$220
$230
$240
2022-23 2023-24 2024-25 2025-26 2026-27
Revenue Expenses
Balance: $6.8 $6.8 $3.7 $3.0 $1.5
Unrestricted General Fund
One-Time Resources
Projected General Fund Balance 6/30/22 $39,009,675
RESERVES:
15% Working Capital $30,215,798
5% Emergency Contingency 10,071,933
Up to 5% Budget Stabilization 10,071,933
Compensated Absences 3,371,105
RDA Loan Repayments 1,727,884
Performing Arts & Youth Endowment 236,758
Total Available One -Time Resources $94,705,086
18 Conclusion
Current (FY 2022-23) projected General Fund recurring budget balance of $6.8 million
Anticipated spendable balance of $39 million at the end of FY 2022-23
No General Fund deficit expected for the next 5 years General Fund recurring balance decreases to $1.5 million by year 5 (FY 2026-27)
Several economic unknowns, including inflation/recession, CalPERS returns, and future development
Staff will continue to monitor economic conditions and legislative actions and provide updates to City Council 19 January 24 – FY 2021-22 Annual Comprehensive Financial Report February 28 – Mid-Year Financial Report
May – Distribution and Presentation of Proposed
FY 2023-24 Budget
June 6 – Public Hearing and Adoption of Utility Rates June 13 - Public Hearing and Adoption of FY 2023-24 Budget 20 Future Financial Reports
Recommendation
Note and File
Staff is available to answer questions
21