Mid-Year
Financial Report
FY 2022-23
City Council
February 28, 2023
FINANCIAL
SERVICES
Mid-Year Report Overview
Economic Overview
Fiscal Year (FY) 2022-23 Q2 Results
Mid-Year Appropriation Requests
General Fund Year End Projection and Five-
Year Forecast
Preview of FY 2023-24 Budget Process
2 State of the Economy
COVID-19 Emergency ending: “Back to normal?”
Available cash + limited supply = higher prices (inflation) High utility prices due to weather events
Federal Reserve interest rate hikes
Continued low unemployment / tight labor market
“Feels like” a recession, but data says otherwise
3 Economic Impacts to Burbank
General Fund revenues trending above
expectations
FY 2022-23 revenues coming in at 3.8% over
budgeted projections
Citywide costs escalating
Continued shortages of goods
Labor shortages
Increases in utility costs
December 2022 CPI 6.5%
4 Mid-Year General Fund Revenues
5 Sales Tax 58,547$ 54,417 4,000$ 58,417$ 20,419$ 35.0% Property Tax 63,295 61,787 1,500 63,287 17,492 27.6% Utility Users Tax 16,392 16,312 910 17,222 8,751 50.8% Svc Charges Intra-City 13,360 13,500 13,500 6,716 49.7% Services Charges 21,608 18,406 530 18,936 9,858 52.1% Transient Occupancy Tax 10,526 10,048 500 10,548 4,492 42.6% Transient Parking Tax 3,691 3,339 360 3,699 1,116 30.2% All Other Sources 24,672 24,025 (57) 23,968 9,715 40.5% TOTAL REVENUE 212,091$ 201,834$ 6,360$ 1,383$ 209,577$ 78,559$ 37.5% CHANGE
2ND
QUARTER
REVISED
FY 2022-23
YTD
ACTUAL
12/31/22
% OF
REVISED
RECV'D
CHANGE
1ST
QUARTER
ACTUAL
FY 2021-22
ADOPTED
FY 2022-23
RECURRING REVENUE
CATEGORY
Mid-Year Revenues
Sales Tax
Burbank 3rd quarter 2022 (Jul-Sept) taxable sales up 6.6% on an adjusted basis
Fuel & Service Stations + 16.9%
Restaurants & Hotels + 12.8%
Business & Industry + 11.5%
General Consumer Goods + 5.1%
Positive gains lead to higher County Pool allocations Measure P Transactions & Use Tax (TUT) up 6.9%
Autos & Transportation contributed to increase
6 Mid-Year Revenues
7 Property Tax
Burbank’s Assessed Value (AV) increased 8.5% for 2022 (General Fund AV increased 6.8%)
Price growth attributable to addition of commercial development and transfers of ownership
Median sales price for 4th quarter of 2022 was $1.1 million, down from 2nd quarter peak of $1.27 million
Mid-Year Revenues
Transient Occupancy Tax (TOT)
Revenues still nearly 20% below pre-pandemic peak
U.S. TravelAssociation expects a full recovery in 2024 8 Burbank Hotel Occupancy Rates
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Mid-Year Revenues
Transient Parking Tax (TPT)
Airport activity continuing to rebound from pandemic
December slowed due to airline scheduling crisis
9 Hollywood Burbank Airport Passenger Counts
-
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
Mid-Year Revenue Adjustments
Utility User’s Tax/In-Lieu of Tax $1,285,000 Increase
Summer heat wave
Return to in person work for larger Burbank employers Increase in natural gas prices due to recent Arctic cold fronts Parking Fines ($632,000) Decrease
Received 27.1% of projected revenues at Mid-Year FY 2022-23 Staffing shortages impacting the provision of parking enforcement services
Anticipated revenue increases following implementation of pilot parking enforcement program
10 Mid-Year Revenue Adjustments
Service Charges $530,000 Increase
Passport revenues boosted by demand for leisure travel Emergency transport services +15% compared to prior period Increase in athletic activities +39.6% from prior year Interest/Use of Money $200,000 Increase
Interest earnings +165% compared to prior year
Rising interest rates
Growing Citywide cash balance
11 Mid-Year General Fund Expenditures
12 EXPENDITURE APPROPRIATIONS EXPENDITURES PERCENT
CATEGORY FY 2022-23 as of 12/31/2022 EXPENDED
Administrative Depts $ 25,951,174 $ 10,400,177 40.1%
Community Development 19,023,092 6,045,367 31.8%
Fire 40,437,783 20,868,598 51.6%
Library Services 9,278,274 3,990,003 43.0%
Non-Departmental 25,233,328 20,631,367 81.8%
Parks and Recreation 30,729,592 13,893,106 45.2%
Police 65,448,864 31,625,416 48.3%
Public Works 19,326,195 8,153,877 42.2%
TOTALS $ 235,428,303 $ 115,607,911 49.1%
Mid-Year Budget Requests
13 Appropriations Revenues Net Impact
Total General Fund Appropriation Requests 2,650,539$ 916,507$ 1,734,032$ Non-General Funds
Measure R Transportation (Fund 107) 50,000 - 50,000 Public Improvements (Fund 127) 1,700,000 500,000 1,200,000 General City Capital Projects Fund (Fund 370) 969,074 - 969,074 Electric Fund (Fund 496) 5,900,000 - 5,900,000 Refuse Collection and Disposal (Fund 498) 186,454 186,454 - Municipal Infrastructure Fund (534) 1,593,540 - 1,593,540 Total Non-General Fund Appropriation Request 10,399,068$ 686,454$ 9,712,614$ 13,049,607$ 1,602,961$ 11,446,646$ Grand Total All Funds Appropriation Requests General Fund Appropriation Requests
14 Additional maintenance, repairs, landscaping and upgrades in Downtown Burbank
Firefighter Recruit Academy
Increases in DeBell Golf Course activities and special events Continuation of Police Department Recruitment Plan
Non-General Fund Appropriation Requests
15 Electric Fund power supply expenses
Increases in natural gas prices and
power purchases
Coal shortages for the Intermountain
Power Project (IPP)
Los Angeles River bicycle and pedestrian
bridge design and planning
Infrastructure funding for Santa Anita
Playlot renovation
Projected FY 2022-23 General Fund Balance
16 Adopted FY 2022-23 Recurring Revenues $201,834,053
1st Quarter Revenue Adjustments 6,360,000
2nd Quarter Revenue Adjustments 1,383,000
Less: Recurring Appropriations (201,438,658)
TOTAL RECURRING BALANCE $8,138,395
Projected FY 2022-23 General Fund Balance
17 Updated Projected Spendable Fund Balance 6/30/22 $49,018,695 Estimated Budget Savings FY 2022-23 3,021,580
Non-Recurring Resources 14,442,271
Less: Reserve Adjustments (12,599,378)
Less: Adopted Non-Recurring Items (10,250,467) Less: Adopted Contribution to CalPERS (7,969,600)
Less: Deposit to 115 Trust (6,700,000)
Less: Mid -Year Requests (net of revenue) (1,734,032)
TOTAL NON-RECURRING BALANCE $27,229,069
Projected FY 2022-23 General Fund Balance
Total Recurring Balance $ 8,138,395
Total Non-Recurring Appropriations 27,229,069
Projected General Fund
Spendable Balance 6/30/23: $35,367,464
18 19
General Fund 5-Year Forecast
(in millions)
Ending GF
Balance: $35.4M $49.4M
$209.6
$217.1
$225.0
$232.1
$239.4
$201.4
$211.1
$222.8
$230.5
$239.2
$170
$180
$190
$200
$210
$220
$230
$240
$250
2022-23 2023-24 2024-25 2025-26 2026-27
Revenue Expenses
Balance: $8.1 $6.0 $2.3 $1.5 $0.1
Financial Forecast Risks & Rewards
- Tax revenue from continued development
- Retail sales and tourism growth
- Low unemployment
- Pension savings from additional payments
- Strong General Fund cash position
- Projections of looming recession
- Continuing cost escalations
- Tight labor market
- CalPERS investment losses
- Future changes to CalPERS assumptions
20 CalPERS Pension Update
Unfunded Actuarial Liability (UAL) at 6/30/22 just under $248 million (average 84.1% funded)
21 * Amounts shown are the total amounts due for FY 2023-24 if the City were to pay CalPERS on a monthly basis. 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.
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
CalPERS Pension Update
CalPERS’ 2021-22 FYE investment losses of (6.1%)
Increases the City’s UAL payment amount beginning in FY 2024-25
Losses will nearly negate the increase in funded status the City experienced for FY 2023-24
The City’s UAL costs in FY 2025-26 will be negatively impacted if CalPERS’ discount rate of 6.8% is not met for FYE 2022-23 Burbank has made $53 million additional discretionary payments (ADP) to CalPERS to date
Achieved $6 million annual savings (approximately $4.2 million General Fund)
22 Unrestricted General Fund
One-time Resources
Projected General Fund Balance 6/30/23 $35,367,464
RESERVES AND SPECIAL ACCOUNTS:
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
Section 115 Pension Trust 16,313,737
Total Available One -Time Resources $107,139,854
23 Projected FY 2023-24 General Fund recurring
balance of $6 million
Represents 2.8% of recurring budget
Prior to any new budget requests
Drops to $2.3 million in FY 2024-25
$35.4 million projected one-time General Fund
Balance
Updated Pension Funding Plan options
Citywide Fee Study also in development
FY 2023-24 Budget Development Process
24 May 3 – Distribute the Proposed Budget
May 9 – Dedicated City Council Budget Meeting
May 16 – Budget Presentation Continuation
June 6 – Public Hearing and Adoption of Utility Rates
June 13- Public Hearing and Adoption of FY 2023-24 Budget FY 2023-24 Budget Timeline
25 Recommendation
Approve resolution amending the FY
2022-23 Adopted Budget for the
purpose of Mid-Year adjustments.
26 Jennifer Becker
Financial Services Director
(818) 238-5500
[email protected]
Questions?
27