94. AES-2: The Permittee shall submit a final landscaping plan for review and approval by the Community Development Director prior to issuance of a building permit.
95. AQ-1: During any construction period ground disturbance, the following dust control and exhaust measures shall be implemented:
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• All exposed surfaces (e.g., parking areas, staging areas, soil piles, graded areas, and unpaved access roads) shall be watered two times per day. • All haul trucks transporting soil, sand, or other loose material off-site shall be covered.
• All visible mud or dirt track-out onto adjacent public roads shall be removed using wet power vacuum street sweepers at least once per day. The use of dry power sweeping is prohibited.
• All vehicle speeds on unpaved roads shall be limited to 15 miles per hour (mph). • All roadways, driveways, and sidewalks to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading unless seeding or soil binders are used.
• Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to 5 minutes (as required by the California airborne toxics control measure Title 13, Section 2485 of California Code of Regulations [CCR]). Clear signage shall be provided for construction workers at all access points.
• All construction equipment shall be maintained and properly tuned in accordance with manufacturer’s specifications. All equipment shall be checked by a certified mechanic and determined to be running in proper condition prior to operation. • Post a publicly visible sign with the telephone number and person to contact at the Lead Agency regarding dust complaints. This person shall respond and take corrective action within 48 hours. The Air District’s phone number shall also be visible to ensure compliance with applicable regulations.
96. AQ-2: During construction activities, contractors shall use construction equipment that has low diesel particulate matter exhaust to minimize emissions and limit use of dieselpowered equipment. The Project shall implement a plan to reduce diesel-powered machinery (DPM) emissions by as much as possible through one or both of the following:
A. All construction equipment larger than 25 horsepower used at the site for more than two continuous days or 20 hours total shall meet U.S. EPA Tier 4 emission standards for particulate matter (PM10 and PM2.5), if feasible. If use of Tier 4 equipment is not available, alternatively use equipment that meets U.S. EPA emission standards for Tier 2 or 3 engines and include particulate matter emissions control equivalent to CARB Level 3 verifiable diesel emission control devices that altogether achieve a reduction in particulate matter exhaust in comparison to uncontrolled equipment; alternatively (or in combination).
B. Develop a Construction Operations Plan demonstrating that the construction equipment used on-site would achieve a reduction in construction diesel particulate matter. Such a plan shall be approved by the City prior to commencement of ground-disturbing activities and may be subject to review by an air quality expert. Elements of the plan could include a combination of some or all of the following measures:
• Use equipment that meets EPA Tier 4 standards or alternatively fueled equipment.
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• Install electric power lines during early construction phases to avoid use of diesel generators and compressors.
• Use electrically powered equipment.
• Use forklifts and aerial lifts for exterior and interior building construction that are electric or propane/natural gas powered.
• Change construction build-out plans to lengthen phases. • Implement building techniques that result in the use of less diesel-powered equipment.
97. BIO-1: To ensure that the Project does not result in the take of CTS, the following measures shall be implemented:
A. A Section 2081 Incidental Take Permit (ITP) from CDFW is required, along with avoidance measures prescribed in the 2020 Programmatic Biological Opinion (PBO) for CTS (USACE, 2020). Should Impacts to the ditch along Old Redwood Highway be necessary, formal consultation through the 2020 PBO would also be required. If no federal nexus exists, the Permittee may pursue a concurrence determination from USFWS with the 2081 ITP.
B. A USFWS and CDFW approved biological monitor shall conduct a training session for all construction workers before work begins. The biological monitor will be present on‐site during excavation activity, and each morning when an open trench is uncovered to check for trapped animals or animals under equipment. The biological monitor will check all excavated steep‐walled holes or trenches greater than one foot deep for any CTS.
C. In the event that CTS are found on site, construction work shall be halted immediately and the USFWS and/or CDFW contacted. Only a USFWS CTS recovery permit holder may relocate CTS. Translocation shall be performed as described in USFWS 2005 protocol to a location outside the Project Site, as directed by USFWS or CDFW.
D. Fencing to exclude CTS shall be installed between the grasslands and the construction footprint. The biological monitor shall verify that appropriate exclusion fencing is utilized and that it is installed properly and maintained throughout the duration of construction.
E. Site access routes and the number and size of staging and work areas shall be limited to the minimum necessary to achieve the project goals. Clearly mark routes and boundaries of the roadwork shall be installed prior to initiation construction/site disturbance.
F. All foods and food‐related trash items shall be enclosed in sealed trash containers at the end of each day and removed completely from the site once every three days.
G. No pets shall be allowed anywhere in the Project site during construction.
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H. Maintain all equipment such that there will be no leaks of automotive fluids such as gasoline, oils, or solvents.
I. Any hazardous materials such as fuels, oils, solvents, etc., shall be stored in sealable containers in a designated location that is at least 200 feet from aquatic habitats. All fueling and maintenance of vehicles and other equipment, and staging areas shall occur at least 200 feet from the seasonal wetland located along Old Redwood Highway.
J. Grading and clearing shall be conducted between June 15 and October 15, of any given year, depending on the level of rainfall and/or site conditions.
K. Project areas temporarily disturbed by construction activities shall be revegetated with native plants.
98. BIO-2: A Section 2081 ITP from CDFW shall be obtained and applicable avoidance measures prescribed in the 2020 PBO for CTS shall be implemented(USACE, 2020).
Should impacts to the roadside ditch be necessary, formal consultation through the 2020 PBO would also be required. If no federal nexus exists, the Permittee may pursue a concurrence determination from USFWS with the 2081 ITP.
99. BIO-3: In order to replace the loss of 6.2 acres of CTS upland habitat the Permittee shall secure suitable replacement lands at a 1:1 ratio at either an approved CDFW conservation bank or through the acquisition of CDFW approved permitted‐responsible mitigation lands elsewhere on the Santa Rosa Plain.
100. BIO-4: To prevent impacts to nesting birds, the following avoidance and minimization measures shall be followed:
• If construction begins between February 1 and August 31, a pre‐construction nesting bird (both passerine and raptor) survey of the habitats within 500 feet of all work areas shall be performed within 7 days of groundbreaking. If no nesting birds are observed, no further action is required, and grading must occur within one week of the survey to prevent “take” of individual birds that could begin nesting after the survey. A follow-up survey is required if a stoppage in work occurs for longer than 7 days between February 1 and July 1.
• If active bird nests (passerine and/or raptor) are observed during the pre‐construction survey, a disturbance‐free buffer zone shall be established around the nest tree(s) until the young have fledged or the nest has naturally failed or been predated, as determined by a qualified biologist. The radius of the required buffer zone can vary depending on the species, with the dimension of any required buffer zone to be determined by a qualified biologist.
• To delineate the “no‐work” buffer zone around a nesting tree, orange construction fencing must be placed at the specified radius from the base of the tree within which no construction related activity or machinery shall intrude.
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101. BIO-5: If any work occurs between September 1 and January 31, a qualified biologist shall follow the California a Department of Fish and Game (now CDFW) 2012 Staff Report on Burrowing Owl Mitigation (CDFW 2012 Staff Report) habitat assessment and survey methodology prior to Project activities occurring. The habitat assessment and surveys shall encompass a sufficient buffer zone to detect owls nearby that may be impacted. Time lapses between surveys or Project activities shall trigger subsequent surveys, as determined by a qualified biologist, including but not limited to a final survey within 24 hours prior to ground disturbance and before construction equipment mobilizes to the Project area. The qualified biologist shall have a minimum of two years of experience implementing the CDFW 2012 Staff Report survey methodology resulting in detections. Detected burrowing owls shall be avoided pursuant to the buffer zone prescribed in the CDFW 2012 Staff Report, unless otherwise approved in writing by CDFW, and any eviction plan shall be subject to CDFW review. 102. BIO-6: Prior to demolition of existing structures and trees, the biologist shall perform bat roost emergence surveys no more than 7 days prior to the start of activities outside of the hibernation period (November 1 to March 1). If bats are found, a bat exclusion plan shall be prepared and submitted to CDFW to include the following:
• Bats shall be excluded between March 1 (once overnight low temperatures exceed 45 degrees Fahrenheit) and April 15, or between September 1 and October 15 to ensure no impact to maternity roosting occurs. Once bats have been fully excluded, the structure may be demolished or removed.
• If a maternity roost is found, a replacement roost must be established either on‐site or at a nearby off‐site at a permanently protected location in consultation with CDFW.
• Tree removal for trees greater than 16‐inch dbh shall be performed using the three‐step removal process. First the crown or upper 1/3 of the tree shall be removed and any limbs removed and left overnight. Next, the rest of the tree shall be felled and left overnight. On the third day, the biologist shall examine the felled tree to make sure any bats have escaped prior to chipping on‐site or hauling to an off‐site location for disposal.
103. BIO-7: Pre‐construction surveys for American badger shall be performed within 10 days prior to the start of construction activities. If a potential den is found, a minimum 100‐foot buffer shall be established around the potential den. The den shall be monitored using wildlife cameras or track plates to confirm the animal has left the area of its own accord.
Following confirmation by the biologist the potential den is no longer active, it may be excavated by hand under the direction of the biologist and the buffer removed. 104. BIO-8: During construction an exclusion fence shall be placed around the seasonal wetland to avoid impacts during construction. Because the Project will likely require a small amount of fill and/or removal and replacement of the existing culvert, during road improvements, both a Clean Water Act Section 404 Nationwide permit application must Packet Page 326 of 390
be submitted to the USACE, and a Section 401 Water Quality Certification application must be submitted to the RWQCB prior to the commencement of construction. 105. BIO-9: Compensatory replacement for any impacts to the seasonal wetland shall be required at a minimum 1:1 ratio through purchase of wetland mitigation bank credits or through permittee-responsible mitigation either on or off-site. 106. BIO-10:Prior to any site preparation, grading, or construction, the Permittee and contractors shall implement the conditions of the Tree Permit. 107. CUL-1: In the event that cultural resources or human remains are inadvertently discovered during ground disturbing activities, the following conditions shall apply:
• If construction or grading activities result in the discovery of significant historic or prehistoric archaeological artifacts or unique paleontological resources, all work within 100 feet of the discovery shall cease, the Community Development Department shall be notified, the resources shall be examined by a qualified archaeologist, paleontologist, or historian for appropriate protection and preservation measures; and work may only resume when appropriate protections are in place and have been approved by the Community Development Department. • If human remains are discovered during any ground disturbing activity, work shall stop until the Community Development Department and the County Coroner have been contacted; if the human remains are determined to be of Native American origin, the Native American Heritage Commission (NAHC) and the most likely descendants have been consulted; and work may only resume when appropriate measures have been taken and approved by the Community Development Department.
• If construction or grading activities result in the discovery of significant historic or prehistoric archaeological artifacts or unique paleontological resources, all work within 100 feet of the discovery shall cease, the Community Development Department shall be notified, the resources shall be examined by a qualified archaeologist, paleontologist, or historian for appropriate protection and preservation measures; and work may only resume when appropriate protections are in place and have been approved by the Community Development Department. • If human remains are discovered during any ground disturbing activity, work shall stop until the Community Development Department and the County Coroner have been contacted; if the human remains are determined to be of Native American origin, the Native American Heritage Commission (NAHC) and the most likely descendants have been consulted; and work may only resume when appropriate measures have been taken and approved by the Community Development Department.
108. GEO-1: All design-level recommendations from the Soil Report shall be incorporated into the Project design, construction documents and improvement plans, or as otherwise Packet Page 327 of 390
determined by the City Engineer and/or Chief Building Official. The Project’s geotechnical engineer shall inspect the construction work and shall certify to the City, prior to issuance of a certificate of occupancy, that the improvements have been constructed in accordance with the soil investigation report. 109. GEO-2: Upon completion of grading planting shall be done as soon as practicable. Prior to issuance of a certificate of occupancy, the City shall verify that the Permittee has appropriately installed all plants consistent with the approved final landscaping plan. 110. GHG-1: The Project shall not install any natural gas appliances or natural gas plumbing.
Prior to issuance of a building permit, final engineered plans shall be submitted and reviewed for compliance.
111. GHG-2: Prior to issuance of a building permit, final engineered plans shall be submitted by the Permittee demonstrating inclusion of electrical vehicle charging at each residence in compliance with CalGreen Tier 2 (A4.106.8) and verified for compliance by the City. 112. HAZ-1: To avoid potential impacts related to the release of asbestos-containing materials or lead-based paint, an asbestos survey adhering to sampling protocols outlined by the Asbestos Hazard Emergency Response Act (AHERA) a lead-based paint screening shall be conducted prior to demolition of the existing structures. In the event that such substances are found, the Permittee shall be subject to requirements set forth by the Occupational Safety and Health Administration (OSHA) AHERA requirements, lead standard contained in 29 CFR 1910.1025 and 1926.62, and any other local, state, or federal regulations. Treatment, handling, and disposal of these materials shall adhere to all requirements established by OSHA and other agencies. 113. HAZ-2: Prior to issuance of the building permit, soil testing around the former agricultural use areas shall be tested for nitrates. If elevated levels of nitrates are found, the Permittee shall prepare and submit a remediation plan for review and acceptance by the City. Once accepted, the remediation plan shall be carried out by the Permittee and remediation documentation submitted to the City upon completion and prior to issuance of occupancy.
114. HYD-1: The Permittee shall submit a Storm Water Prevention and Pollution Plan (SWPPP) approved by the Regional Water Quality Control Board for approval by the City Engineer prior to the issuance of a building permit. The SWPPP shall include Best Management Practices for construction activities as well as accounting for any BMPs required for operational activities. The SWPPP shall incorporate the requirements of all applicable federal, state, and local regulations including the City of Cotati Municipal Code Chapter 13.68 Storm Water Ordinance and Chapter 14.36 Erosion and Sediment Control.
115. HYD-2: The Permittee shall submit a final Stormwater Low Impact Development and Stormwater Mitigation Plan for review and approval by the City Engineer prior to issuance of the building permit.
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116. NOI-1: Construction-related noise and vibration impacts shall be attenuated through implementation of the following best management practices (BMPs) for control of construction noise:
• Noise-generating construction activities, including truck traffic coming to and from the construction site for any purpose, shall be limited to between the hours of 7:00 am and 7:00 pm on weekdays and 9:00 am and 5:00 pm on Saturdays. No construction shall occur on Sundays or holidays.
• All equipment driven by internal combustion engines shall be equipped with mufflers, which are in good condition and appropriate for the equipment. • The construction contractor shall utilize “quiet” models of air compressors and other stationary noise sources where technology exists. • At all times during project grading and construction, stationary noise-‐generating equipment shall be located as far as practicable from sensitive receptors and placed so that emitted noise is directed away from residences. • Unnecessary idling of internal combustion engines shall be prohibited. • Construction staging areas shall be established at locations that will create the greatest distance between the construction-related noise sources and noise-sensitive receptors nearest the project site during all project construction. • Neighbors located adjacent to the construction site shall be notified of the construction schedule in writing.
• The construction contractor shall designate a “noise disturbance coordinator” who will be responsible for responding to any local complaints about construction noise.
The disturbance coordinator would determine the cause of the noise complaint (e.g., starting too early, bad muffler, etc.) and institute reasonable measures as warranted to correct the problem. A telephone number for the disturbance coordinator shall be conspicuously posted at the construction site.
117. NOI-2: Prior to issuance of the building permit, the Permittee shall submit final design plans that specify the noise attenuation measures along with an analysis documenting that the measures taken reduce interior and exterior noise to 65 dBA Ldn during the day and interior noise levels of no more than 45 dBa Ldn at night (with the windows closed) for all homes proposed for construction. This may be achieved through implementation of the recommendations of the RGD Acoustics Noise Study (e.g. installation of the sixfoot-tall soundwall) and/or through installation of sound-rated doors or windows as appropriate, and/or the installation of air conditioning or mechanical ventilation systems in compliance with Municipal Code Section 17.30.050(D)(5). 118. REC-1: The Permittee shall either dedicate 0.54 acres of parkland or pay the in-lieu fee in compliance with 17.76.030(B)(1). The Permittee shall pay the fee prior to issuance of the building permit.
119. TRA-1: Final design and landscaping plans shall be submitted and show compliance with Municipal Code Section 17.30.040(c)(2). Final landscaping plans shall include the specific plants that will be placed in the traffic safety visibility area and their maximum projected height which shall be no taller than 36 inches except for trees with their canopy Packet Page 329 of 390
trimmed to a minimum of eight feet above grade.
120. TRA-2: Prior to issuance of the building permit, the Permittee shall pay a traffic impact fee to be calculated by the City Engineer in compliance with Municipal Code Chapter
4.10.020.
121. TRA-3: Prior to issuance of a building permit, the Permittee shall provide a final civil improvements plan that includes the striping of a crosswalk and installation of a stop sign at the intersection of the access road (Viking Way) and Old Redwood Highway. 122. UTI-1: The Permittee shall provide a final landscaping plan that includes the installation of drought tolerant native vegetation that will be planted in compliance with the Water Efficient Landscaping Ordinance.
123. UTI -2: The Permittee shall prepare a draft Subdivision Improvement Agreement (SIA) and Subdivision Improvement Plan (SIP) that shall be approved by the City Engineer and a final SIA and SIP shall be signed prior to issuance of the Building Permit. Additionally, the Permittee shall submit an application to request that the site be annexed into the Community Facilities District (CFD) and shall receive approval prior to commencing construction.
124. WF-1: The Permittee shall implement the following Best Management Practices identified by the Sonoma County Multijurisdictional Hazard Mitigation Plan or as otherwise accepted by the Building Official/RAFPD:
1. Contractor(s) shall use fire-resistant building materials not limited to Class A Fire Resistant Roofing.
2. Permittee shall provide a long-term fire safety maintenance plan that shall be reviewed and approved by the Rancho Adobe Fire Protection District prior to issuance of a building permit. Once approved, the required actions shall be recorded on the deed of each property. Actions may include:
a. Homeowners shall maintain landscaping for fire safety including the clearing of overgrown brush and/or dead brush prior to the start of fire season.
b. Homeowners shall maintain adequate defensible space around structures.
ADDED AT PLANNING COMMISSION MEETING (12/04/2023)
125. As a part of Final Design Review, Permittee shall reduce the proposed height of Plan 5 from 29 feet to 28 feet.
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126. As a part of Final Design Review, Permittee shall increase the size of Lot 34 to a minimum of 6,000 square feet.
127. As a part of Final Design Review, Permittee shall relocate the residence on Lot 13 to be at least 20 feet from the rear property line or choose a different home model that will maintain the 20-foot rear setback.
128. As part of Final Design Review, Permittee shall amend the perimeter fence design to include two feet of lattice on top of the proposed six-foot fence. This fence design shall be applied to all lots that abut adjacent residential properties. 129. Permittee shall comply with CA Government Code §66300(d), which establishes requirements for replacement of the existing three residences and specific rights for the existing occupants.
130. Permittee shall meet onsite with the property owners of 8924 Clothier Drive and 8920 Clothier Lane to ensure that project grading and construction will not cause any adverse impacts to the properties.
*****
IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on January 23, 2024, by the following vote, to wit:
RESULT:
MOVER:
SECONDER:
AYES:
Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, Deputy City Clerk
Approved as to form:______________________________
City Attorney
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: MID-YEAR BUDGET REVIEW FOR FISCAL YEAR 2023-2024 Date: January 23, 2024
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council receive the fiscal year 2023/24 mid-year budget review report, adopt the resolution to amend the fiscal year budget based on updated assumptions for investment earnings, and receive the investment report for the quarter ended December 31,2023.
Background
The Mid-Year Budget Review is an opportunity for staff to update the City Council on currentyear budget performance based on actual operating results through December 31, 2023. This report's intent is to update the Council on how major revenue sources and operating expenditures are trending compared to the approved budget and propose any amendments to the budget if needed. Additionally, the mid-year revenue and expenditure report serves as a good baseline from which to begin developing the City Manager’s fiscal year 2024/25 recommended budget.
Emphasis is placed on an analysis of the City’s major General Fund revenues, as the overall health of those revenues is instrumental to the City’s ability to help, and potentially enhance, services in the future. In addition to the General Fund revenues, we will also evaluate the General Fund expenditures and the Water Fund, Sewer Fund, and Cash and Investments.
Finance staff hired Optimized Investment Partners (OIP) in May 2023 to help improve the investment returns for the city and to ensure compliance with California Government Code by ensuring safety of principal and sufficient liquidity for operations. The independently generated investment report for the quarter ended December 31, 2023 is attached along with the Quarterly Financial Report for consistency with prior quarters and compliance. This report is provided to meet the reporting requirements in the California Government Code Sections 53600 et seq. and Packet Page 332 of 390
the City of Cotati Investment Policy and Guidelines.
Analysis/Discussion
General Fund
General Fund Revenues: The General Fund revenues are on track for the budgeted expectations at half year. There is a variation of timing of receipts for Sales Taxes, Revenues from Other Agencies, Revenue from Other Taxes, and Licenses, Permits and Franchises which are expected to be reconciled by the end of the budget year. City staff are proposing increasing the investment earnings by $120,000 in the general revenues budget due to expectations with full implementation of investment policy.
Total expenditures both by expenditure type and by department for fiscal year 2023/24 are in line with the current year budget. Comparing the expenditures to the same periods in the prior year, there is a 19.6 percent increase of $774,289. This increase was primarily related to increased transfers needed for capital projects, increased contract services for insurance and tech and data projects.
Enterprise Funds
Water Funds- The water funds charges for services are tracking at 6 percent above the same period in the prior year and at 53.6 percent of the annual budget. This increase is primarily due to the City’s rate increase. Expenses as of mid-year are slightly below budget and in line with expectations. Aqueduct water usage and salaries-benefits are the main expenses for the fund at $303,537 and $305,233, respectively for the current fiscal year to date December 31, 2023.
Expenditures compared to prior years have decreased primarily due to prior years one-time payment of interfund debt service to the Wastewater fund of $526,117. The City project for the main flushing is to be started during the spring and will bring the capital outlay expenditures in line with the budget expectations.
Sewer Funds- The sewer fund revenues and expenditures are currently tracking at and just below budget expectations of 50 percent. Revenues for the funds compared to the same period in the previous year decreased due to the above-mentioned one-time interfund debt service payment received from the Water Fund. The actual balance of expenditures compared to mid-year prior year has decreased 26.6 percent due to decreased capital outlay for projects during the period and decreased wastewater treatment costs.
No adjustments are proposed for the water or wastewater funds at this time.
Cash and Investments Mid-Year Report:
Cash and investments held by the City and the trustees continue to be invested in accordance with the Government Code and the Council Investment Policy as adopted on May 9, 2023.
Cash Flows: Sufficient cash inflows were available from July 2023 through December 2023 to meet all City expenditures. In addition, the City has enough cash flow on December 31, 2023, to cover expected expenditures through the next six months. The difference in reporting from the cash and investments per the Mid-Year Report and the Investment Report are due to timing Packet Page 333 of 390
differences for the balance of outstanding payments and accrued interest.
Investment Reporting Balances: The total cash and investment portfolio book value (cost) held by the City as of December 31, 2023, was $18,265,456, balances held in restricted escrow account for $1,133,007, and total cash and investments held by the trustees for the 2019 and 2020A Bonds was $289,323.
The cash and investments held by the City include the following components: Managed Investment Portfolio ($8,707,706), State of CA Local Agency Investment Fund ($6,091), California Asset Management Program (CAMP) Pooled Investment Fund ($8,307,491), Cash/Time Deposits ($1,124,981.29), and accrued interest on investments ($119,185.98). Earned interest is the interest earned on investments over a specific time period, accrued interest is the interest that an investment has earned, but hasn’t yet been received, and paid interest is the interest that has already been received as payment.
During the quarter, no investments were purchased. During the quarter, one investment matured, totaling $1,230,000. The funds were reinvested into CAMP.
Two-year Treasuries yielding 5.03% at the beginning of the quarter ended lower at the end of the quarter at 4.23%, which was a decrease of 80 basis points for the quarter.
As of December 31, 2023, the Weighted Yield to Maturity on the Managed Investment Portfolio was 4.62%.
Financial Considerations
City staff are proposing amending the general fund fiscal year budget to increase the revenue expectations for Investment Earnings by $120,000. No other adjustments or financial considerations are proposed with the presentation of the Mid-Year budget or the investment reports.
Environmental Issues
The action of a mid-year budget review does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required.
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Mid-Year Financial Report
Fiscal Year to Date: July 1, 2023, to December 31, 2023 Administrative Services 1/15/24 Q1-Q2 2023/24
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Introduction
This financial report provides an overview of our where we are within the budget cycle, then a summary of the City’s financial position through the mid-year of Fiscal Year (FY) 2023/24 (July 1, 2023, through December 31, 2023) for (1) Citywide Revenues and Expenses, (2) the General Fund, (3) Enterprise Funds, and (4) Summary of Cash and Investments. Notable cumulative mid-year to midyear and preliminary amended budget to actual comparisons are included in this report.
The following factors should be taken into consideration when analyzing mid-year data:
• Revenues reported herein are calculated based on actual receipts through December 31, 2023.
Some revenues are received later in the year, and as such can appear to be low at mid-year with variances smoothing out over the Fiscal Year.
• Some costs, such as subscription services and other dues, are typically incurred at the beginning of the Fiscal Year, so appear high at mid-year but are on-budget for the fiscal year, with variances smoothing out over the Fiscal Year.
• Construction projects, specifically streets improvements, have a different project cycle which is offset from the Fiscal Year. As such, major projects are typically funded across two or more Fiscal Years.
Standard Budget Process Cycle - Where We Are Now & Next Steps:
Tentative Schedule for Budget Year 2024/25 Budget Workshops:
• February 20th - Strategic Planning Session
• April 2nd - General Fund Budget Study Session
• May 7th - Enterprise Funds Budget Study Session
* NOW* January
Mid-Year & Financial
Performance Review
February-March
Internal Budget
Review, Strategic/LongTerm and Capital
Planning
April
Draft Budget
Workshops
May
Budget Adoption
June
Budget Rollout
July - December
Financial Evaluations
Budget Adjustments as
Approved by Council
NovemberDecember
City Manager and
Admin. Services Budget
Planning Meetings
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Citywide Revenues and Expenses
*Other Special Revenues consists of the following funds: Grants, CDBG Grants, Gas Tax, MTC Streets, RMRA, Traffic Mitigation Fees, Park-In-Lieu, PEG, Public Safety, K9 Program, Inclusionary Housing, Linkage Affordable Housing, Community Facilities Districts, Measure M Parks, PEG, Bed Tax, and all Local Landscaping and Maintenance Districts.
City-wide Significant Variances
Fund type variances where revenues were less than 40 percent or expenditures are greater than 60 percent of budget as of mid-year were evaluated as follows:
• General Fund Revenues – The difference is primarily due to pending receipts for sales tax and other taxes. See further discussion on pages 3-4 herein. • Other Special Revenues Expenditures are related to a one-time transactions and projects including the Park and Ride lot construction projects which utilizes Excess Bond Proceed Special Revenue Funds as well as the purchase or land at La Plaza View with Inclusionary Housing Special Revenue Funds.
• Capital Projects are subject to construction timing of the projects. The City has programed over $12 million in capital projects, utilizing funding from a combination of funding sources including the Streets Improvement Lease Revenue Bond, State and Local Grants, Special Revenue Funds, and General Fund Contributions. Capital Projects timeframes vary due to design and review processes before construction as well as the time to construct. For more information on the City projects they are displayed online both on the City budget at https://city-cotati-ca-budgetbook.cleargov.com/4249 on the City’s transparency portal at www.tinyurl.com/CotatiProjects. • Internal Service revenues indicate as low due to the timing of transferred funds required for the purchase of replacement fleet vehicles. This transfer is expected to be complete by the end of the fiscal year.
Fund Actual Annual Budget
%
Budget
Actual Annual Budget
%
Budget
General $ 4,350,260 $ 10,694,333 40.7% $ 4,721,610 $ 14,529,062 32.5% Wastewater 1,627,856 3,231,839 50.4% 1,868,718 4,212,328 44.4% Water 1,267,005 2,295,500 55.2% 1,032,389 2,389,166 43.2% Other Special Revenues * 759,506 1,412,258 53.8% 3,259,103 4,766,358 68.4% Capital Projects 1,650,161 7,487,628 22.0% 1,866,021 7,503,128 24.9% Internal Service 162,969 456,480 35.7% 162,969 500,710 32.5% Total For All Funds $ 9,817,757 $ 25,578,038 38.4% $ 12,910,810 $ 33,900,752 38.1% 215,860
Revenues Expenses
$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0
General
Wastewater
Water
Other Special Revenues *
Capital Projects
Internal Service
Millions
Expenses Revenues
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General Fund: Operating Revenues
The following table includes cumulative revenue comparisons through the first half of the Fiscal Year 2022/23 and a revenue budget to actual comparison for Fiscal Year 2023/24.
General Fund operating revenues through the mid-year are approximately $243,000, or 5.9% above the same period in FY 2022/23. Although revenues are only at 40.7%, this increased from the previous year’s comparison which was at 39.9% of the budget through mid-year. The percentage at mid-year is typically less than 50% due to the timing associated with receiving some of the larger revenue sources. For instance, sales tax is the largest General Fund revenue source, but the receipts are received two months after the period paid by the consumers. The following is an explanation of other variations in revenues:
- Property Taxes received to date increased over the prior year by approximately 6.8% which is primarily due to additional Prop. 8 Recapture which added a combined $16 million of residential and commercial values, and the values of developed home sales by Richmond American Homes at Kessing Ranch. We anticipate meeting the total annual budget for the Fiscal Year 2023/24. - Sales Tax revenues are approximately 1.8% or $36,000 greater than last year’s cumulative mid-year balance. Compared to budget, these revenues are in line with expectations as we have received four out of the twelve annual payments from the state due to the two month lag as mentioned above.
Based on the latest sales tax forecast, combined revenues for Fiscal Year 2023/24 are estimated to end 1.6% or $98,000 below the original adopted budget. This would lead to a combined sales tax revenue of just under $6.0 million, down $37,450 or 0.6% from the previous year’s actual balance of $6.0 million. Due to the continued uncertainty of the economic environment, staff are proposing to retain the budget as it was adopted. This revenue stream will continue to be monitored and staff will provide the City Council with updated information during development of the FY 2024/25 budget.
- Other Taxes are primarily made up of Cannabis Business Tax. Last year had a decrease in taxes received which seems to have improved in the current fiscal year. Staff are continuing to monitor this revenue account. Financial reviews of each cannabis business are concluding currently, and no significant items were noted, and all revenue appears properly reported to the City. - Licenses, Permits and Franchises are subject to timing as most franchise payments are due annually near the end of the fiscal year.
- Rents are primarily related to revenue from renting out community facilities and park space. This revenue source has continued to improve as more events, post covid, are planned.
FY 2022/32 FY 2023/24 $ Variance % Variance FY 2023/24
Budget
% Budget
Property Tax $ 1,086,868 $ 1,161,066 $ 74,198 6.8% $ 2,131,758 54.5% Sales Tax 2,018,952 2,054,491 35,539 1.8% 6,084,000 33.8% Other Taxes 246,643 255,800 9,157 3.7% 652,300 39.2%
Licenses, Permits & Franchises 223,746 182,860 (40,886) -18.3% 556,500 32.9% Rents 52,105 82,577 30,471 58.5% 78,000 105.9%
Other Agencies 75,025 158,902 83,877 111.8% 207,150 76.7% Community Development Charges 156,992 172,959 15,967 10.2% 367,876 47.0% Public Works Charges 32,608 40,338 7,730 23.7% 67,800 59.5% Public Safety Charges 25,305 38,434 13,128 51.9% 58,000 66.3% Code Enforcement Charges 389 11,516 11,127 2858.5% 10,000 115.2% Other Revenues 90,275 47,224 (43,050) -47.7% 221,049 21.4% Investment Earnings 9,324 83,578 74,254 796.4% 45,600 183.3% Contributions 7,230 9,793 $ 2,563 35.5% 12,300 79.6%
Transfers In 82,000 50,722 (31,278) -38.1% 202,000 25.1% Total: $ 4,107,462 $ 4,350,260 $ 242,798 5.9% $ 10,694,333 40.7% Mid-Year Actuals Comparison
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- Other Agencies increased from the previous year due to the timing of receipts for the State Mandated Cost from the State and the timing of receipts from SSU for the negotiated Dispatching Contract. - Charges for Services have increased over the last year as Community Development, Public Works, and the Public Safety Department are again working on new development projects or engaging in more reimbursable activities.
- Investment Earnings have increased primarily due to active investment management and increased interest rate earnings. City staff have proposed a mid-year budget adjustment to increase the expected income from earnings to an annual budget amount of just over $165,000. - Other revenues are misc. other receipts received by the City for general purposes. These are made up of one-time unbudgeted receipts.
General Fund: Department Operating Expenditures
The following table includes cumulative mid-year actual expenditure comparisons by department and again by expenditure type for Fiscal Year 2022/23 and Fiscal Year 2023/24 and an expenditure budget to actual comparison for Fiscal Year 2023/24.
Expenditures by Type
Overall, cumulative mid-year General Fund expenditures increased from the previous year by approximately 19.6% or $774,000. Most of the increase was due to the timing of transfers out for capital projects. The increase in Contract Services primarily related to insurance, IT services, as well as contracts for ongoing operations and maintenance at Falletti Ranch and the SAFE team.
Expenditures by Department
Spending by General Fund Departments are consistent with the prior year with noted increases in Police, Public Works, Administrative Services, and the City Managers office. The majority of the increases are related to the proportional share of allocated expenses for insurance and tech and data management. Other increases for the Police department are related to increased Tech Projects for the camera system and dispatch wiring repairs as well as increased overtime related to coverage for time off and training.
General Fund Expenditures by Type FY 2022/23 FY 2023/24 $ Variance % Variance FY 2023/24 Budget
% Budget
Salaries & Benefits $ 2,301,288 $ 2,373,540 $ 72,252 3.1% $ 5,683,475 41.8% Contract Services 851,303 1,042,529 191,226 22.5% 1,881,461 55.4% Materials & Supplies 44,797 46,332 1,534 3.4% 76,762 60.4% Utilities 150,833 156,785 5,952 3.9% 381,817 41.1%
Repairs & Maintenance 60,206 77,349 17,143 28.5% 211,200 36.6% Other Expenses 225,497 267,081 41,584 18.4% 1,213,111 22.0% Transfers Out 313,397 757,995 444,598 141.9% 5,081,236 14.9% Total: $ 3,947,321 $ 4,721,610 $ 774,289 19.6% $ 14,529,062 32.5% Cumulative Mid-Year Actual Comparison
(July 1 - December 31) Budget to Actual Comparison
General Fund Expenditures by
Department FY 2022/23 FY 2023/24 $ Variance % Variance FY 2023/24 Budget % Budget
City Council $ 59,891 $ 64,101 $ 4,211 7.0% $ 170,457 37.6% City Manager 296,055 322,660 26,606 9.0% 741,811 43.5%
Admin Services 163,644 203,593 39,949 24.4% 508,290 40.1% Community Development 410,964 408,529 (2,434) -0.6% 1,159,735 35.2% Public Works 549,910 644,758 94,848 17.2% 1,400,181 46.0% Police 1,953,274 2,111,781 158,507 8.1% 5,017,822 42.1% Recreation 200,186 208,191 8,005 4.0% 449,530 46.3%
Transfers Out 313,397 757,995 444,598 141.9% 5,081,236 14.9% Total: $ 3,947,321 $ 4,721,610 $ 774,289 19.6% $ 14,529,062 32.5% Cumulative Mid-Year Actual Comparison
(July 1 - December 31) Budget to Actual Comparison
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The first six months, as compared to budget, General Fund expenditures are mostly tracking as expected with all operating departments (all departments except transfers out) averaging 32.5% of the budget. Overall expenditure is in line with staff expectations.
Enterprise Funds: Operating Revenue
The following table includes cumulative revenue and expenses comparisons through the first half of the Fiscal Year 2021/22 and 2022/23 and a revenue budget to actual comparison for Fiscal Year 2022/23 for the Enterprise Funds.
The Water and Wastewater Fund revenues are made up of charges for services, connection fees other revenues, and development fees. The operating revenues for the Water and Wastewater Funds (removing one-time interfund debt service and investment earnings) have increased compared to the prior year primarily due to applied rates. For Fiscal Year 2023/24, most expenses are in line with budget at mid-year.
Water Funds – Revenues for the water funds charges for services are tracking at 3.6% above budget and 6.6% greater than the same period in the last year. This increase is primarily related to continued water usage with increased rates. Expenses as of mid-year are below budget but in line with expectations Aqueduct water usage continues to be the main operating expense for the fund at approximately $304,000 and we expect this cost to increase for the next two quarters as the community Enterprise Funds FY 2022/23 FY 2023/24 $ Variance % Variance FY 2023/24 Budget
% Budget
- Water Operations & Capital
Revenues Operating Revenues $ 1,149,817 $ 1,225,682 $ 75,865 6.6% $ 2,288,800 53.6% Investment Earnings - 41,323 41,323 100.0% 6,700 100.0% Total Revenues $ 1,149,817 $ 1,267,005 $ 117,188 10.2% $ 2,295,500 55.2% Expenses
Salaries & Benefits 382,483 305,233 (77,250) -20.2% 726,080 42.0% Contract Services 147,558 97,197 (50,361) -34.1% 322,656 30.1% Other Expenses 196,081 196,674 593 0.3% 472,161 41.7%
Aqueduct Water Usage 218,675 303,537 84,862 38.8% 531,300 57.1% Capital Outlay 66,541 22,939 (43,602) 100.0% 232,500 9.9% Interfund Debt * 526,117 106,809 (419,308) 0.0% 104,469 102.2% Total Expenses $ 1,537,455 $ 1,032,389 $ (505,066) -32.9% $ 2,389,166 43.2% Net Income $ (387,638) $ 234,615 $ (93,666)
Wastewater Operations & Capital
Revenues Operations & Capital $ 1,499,325 $ 1,568,915 69,590 4.6% 3,226,839 48.6% Interfund Debt 526,117 - (526,117) -100.0% - 0.0%
Investment Earnings - 58,941 58,941 100.0% 5,000 1178.8% Total Revenues 2,025,442 1,627,856 (397,586) -19.6% 3,231,839 50.4% Expenses
Salaries & Benefits 381,584 305,206 (76,378) -20.0% 722,520 42.2% Contract Services 106,389 43,733 (62,656) -58.9% 138,963 31.5% Other Expenses 67,973 127,003 59,030 86.8% 171,897 73.9% Wastewater Treatment 1,383,851 1,181,584 (202,267) -14.6% 2,416,450 48.9% Capital Outlay 587,925 143,694 (444,231) 100.0% 695,000 20.7% Interfund Debt 16,874 67,498 50,624 0.0% 67,498 100.0%
Total Expenses $ 2,544,596 $ 1,868,718 $ (675,878) -26.6% $ 4,212,328 44.4% Net Income $ (519,154) $ (240,862) $ (980,489)
Cumulative Mid-Year Actual Comparison
(July 1 - December 31) Budget to Actual Comparison
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goes back to more normalized water use and irrigation during the summer. The water main flushing project is expected to run again during the spring of 2024 bringing the capital expenditures in line with expectations. The last major expense for sewer is the Salaries and Benefits. These costs though are both in line with the budget and prior year’s costs. No adjustments were deemed needed at this time.
Sewer Funds – Revenues are currently tracking at budget at 50.4 percent. However, the operations and portion of revenues are tracking just below budget at 48.6%. The decrease in revenues is primarily due to the ongoing reduction in water usage due to the drought and the related re-averaging of estimated sewer consumption. This reduced water usage which leads to a lower wintertime average consumption which is used as the volume metric for wastewater max usage for billing purposes. Operating Expenses at mid-year have decreased by approximately $232,000 or 12% compared to the prior fiscal year. This is primarily due to the decrease in the cost of Wastewater Treatment. Additionally, during this period last year, the City had already incurred almost $600,000 in capital project work related to the sewer main replacement on W. Sierra and the current project for Cypress has just completed design and is looking to be built during the remaining two quarters of fiscal year 2023/24.
These funds will continue to be monitored and staff will provide the City Council with updated information during development of the FY 2023/24 budget.
Cash and Investments
The tables below show the cash and investments held by the City as of December 31, 2023. The current cash and investment balances are in line with the City adopted investment policy and as budgeted are enough to meet the City’s expenditure requirements for the remainder of the fiscal year.
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Cash and Investment Detail by Composition
Conclusion
Except for identified variances, expenditures and revenues are tracking as expected. Staff will continue to monitor these variances and provide updated information to the City Council during budget development for Fiscal Year 2023/24.
Name of Investment Maturity Date Yield
Balance at
12/31/2022
Local Agency Investment Funds - (LAIF)
LAIF - Pooled Investments - Net FMV N/A 1.35% $ 11,474
Sonoma County Investment Pool - SCIP N/A 0.50% $ 86,059 US Bank Trust
Managed Investments in CD's and Treasuries 1.85 years 4.69% $ 8,618,766 Accrued Interest $ 98,235
California Asset Management Program (CAMP)
Pooled Investment Funds - 5.56% $ 8,268,683
Fiduciary Funds N/A 1.20% $ 285,535
Exchange Bank Operating & Payroll Accounts - N/A $ 715,420 Restricted Escrow Account - N/A $ 1,238,492
Funds held for payment on Park and Ride Project
Total Cash and Investments $ 19,224,430
FISCAL YEAR 2023/24
AS OF DECEMBER 31, 2023
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Un-Audited Mid-Year
Budget & Actuals Review
Fiscal year 2023/24 City of Cotati
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Financial
Reporting
• Citywide Overview
• General Fund
• Enterprise Funds
• Cash & Investments
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City Wide
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Citywide Revenues & Expenses
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Citywide Overview
Revenues and Expenses
On Target
Revenues are at 38.8% of
Budget
General Fund Revenues Sales tax
and Other Tax are collected 1-2
months after relevant taxing
period.
Internal Service – Decreased
revenue due to reduced payout
transfers of funds required (time
to purchase replacement
vehicles).
Capital Projects – Decreased due
to the timing of capital projects
Expenses are at 38.1% of
Budget
Capital Projects Funds– are
subject to timing of the projects in
place and related activity incurred
during the fiscal year.
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General
Fund
Mid-Year Budget
Analysis
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Comparative
Revenues & Expenditures
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Property Tax, $ 1,161,066
Sales Tax, $ 2,054,491
Other Taxes, $
255,800
Licenses, Permits &
Franchises, $ 182,860 Rents, $ 82,577
Other Agencies,
$ 158,902
Community
Development
Charges, $
172,959
Public Works
Charges, $
40,338
Public Safety
Charges, $
38,434
Code...
Other
Revenues
, $...
Investment
Earnings, $
83,578
Contrib
ution...
Transfers
In, $
50,722
Proportion of General Fund Revenues
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Enterprise Funds
SUMMARY OF WATER AND WASTEWATER FUNDS
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Enterprise Funds Analysis
WATER
• Revenues are
at 55.2% of
budget
• Expenses are
at 43.2% of
budget
WASTEWATER
• Revenues are
at 50.4% of
budget
• Expenses are
at 44.4% of
budget
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Cash &
Investments
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Summary of Cash and Investments at
December 31, 2023
• Total Exceeds
$19.2M
• In line with the City
adopted investment
policy.
• Enough to meet
operational needs
for next 6 months in
fiscal year.
• City Utilizes Pooled
Cash and
Investments.
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US BANK TRUST, $
8,618,766, 46%
$ -, 0%
CAMP, $ 8,268,683,
44%
OPERATING CASH, $
715,420, 4%
HELD IN ESCROW, $
1,238,492, 7%
LAIF, $ 11,474, 0%
SCIP, $ 86,059, 0%
Investment Portfolio Composition
$19.2 Million
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Conclusion
Fiscal Year was primarily
on track with Budget and
improved over fiscal year
2023/24
Budget Adjustment
Requests for:
Increasing Investment
Earnings by $120,000 to
$165,600
City staff will continue to
update the Council with
quarterly financial reports
as well as the audited
financial for Fiscal year
2023/24
City staff are committed to
exercising prudence and
integrity in the management
of public funds and provide
transparent accountability
for its use
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% of
Investment Type Par Value Market Value Book Value Portfolio Managed Investment Portfolio
U.S. Bank Custodial Cash Account $ 41,744 $ 41,744 $ 41,744 0.21% U.S. Treasury Bond/Note $ 800,000 $ 805,064 $ 811,263 4.12% Federal Agency Bond/Note $ 3,150,000 $ 3,096,168 $ 3,087,699 15.68% Certificate of Deposit $ 4,767,000 $ 4,764,309 $ 4,767,000 24.21% Managed Investment Portfolio Subtotal 8,758,744 $ $ 8,707,284 $ 8,707,706 44.23% Pooled Investments
State of CA Local Agency Investment Fund $ 6,091.35 $ 6,091.35 $ 6,091.35 0.03% CAMP $ 8,307,491.00 $ 8,307,491.00 $ 8,307,491.00 42.20% Pooled Investments Subtotal 8,313,582.35 $ $ 8,313,582.35 $ 8,313,582.35 42.23% Cash/Time Deposits $ 1,124,981.29 $ 1,124,981.29 $ 1,124,981.29 5.71% Accrued Interest $ 119,185.98 $ 119,185.98 $ 119,185.98 Total Cash & Investments Held by the City $18,316,493 $18,265,034 $18,265,456 92.78% Held by Bank Trustee/Fiduciary Funds (1)
Investment Agreements $ - $ - $ - 0.00%
Cash with Fiscal Agents $ 289,323.20 $ 289,323.20 $ 289,323.20 1.47% Restricted Cash $ 1,133,007.49 $ 1,133,007.49 $ 1,133,007.49 5.75% U.S. Government $ - $ - $ - 0.00%
Total Held by Bank Trustee/Fiduciary Funds $1,422,331 $1,422,331 $1,422,331 7.22% Total Portfolio $19,738,824 $19,687,364 $19,687,786 100.00% Notes:
1. Reflects bond proceeds and tax levy revenues held by trustee in accordance with bond covenants.
2. Par value is the principal amount of the investment on maturity.
3. Market values contained herein are received from sources we believe are reliable, however we do not guarantee their accuracy.
4. Book value is par value of the security plus or minus any premium or discount on the security.
Summary of Cash and Investments as of December 31, 2023 City of Cotati
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% of Portfolio by Investment Type
Investment Type % Held
CERTIFICATE OF DEPOSIT 26.26%
FEDERAL AGENCY BOND/NOTE 17.06%
U.S. TREASURY NOTE 4.44%
LOCAL AGENCY INVESTMENT FUND 0.03%
CAMP 45.78%
MONEY MARKET FUND 0.23%
CASH/TIME DEPOSITS 6.20%
ALL INVESTMENTS 100.00%
Excludes Pooled Investments and U.S. Bank Custodial Cash Account Under 1 Year
Maturity Dec 2023 Sept 2023 Change 1 - 2 Years
3-Month 5.40% 5.55% -0.15% 2 - 3 Years
1-Year 4.79% 5.46% -0.67% 3 - 4 Years
2-Year 4.23% 5.03% -0.80% 4 - 5 Years
3-Year 4.01% 4.80% -0.79% Total
5-Year 3.84% 4.60% -0.76%
10-Year 3.88% 4.59% -0.71%
Oct
Nov
Dec 2023 Dec 2022 Dec 2021 Dec 2020 Dec
4.23% 4.41% 0.73% 0.13% Total for Quarter
Note: Interest Earnings figures do not include capital gains or losses $ 72,979
$ - $ 213,111
$ 70,803
2-Year U.S. Treasury Yield - Historical Data $ 69,329
$ 248,000 3%
$ 8,717,000 100%
Interest Earnings FY2023 FY2024 Change
$ 1,780,000 20%
$ 1,784,000 20%
$ 1,783,000 20%
U.S. Treasury Yields - Quarterly Comparison $ 3,122,000 36% Book Value (COST) $ 18,265,456
Market Value $ 18,145,848
Weighted Average Maturity (in years) 1.84
Weighted Yield to Maturity 4.62%
Portfolio Maturity PAR Maturing % Maturing
City of Cotati
Investment Report for the Quarter Ended December 31, 2023 Portfolio Summary and Key Statistics
Portfolio Key Statistics
PAR Value $ 18,197,307 26.26%
17.06%
4.44% 0.03%
45.78%
0.23%
6.20%
CERTIFICATE OF DEPOSIT
FEDERAL AGENCY BOND/NOTE U.S. TREASURY NOTE
LOCAL AGENCY INVESTMENT FUND
CAMP MONEY MARKET FUND
CASH/TIME DEPOSITS 0%
5%
10%
15%
20%
25%
30%
35%
40%
Under 1
Year 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years 36% 20% 20% 20%
3%
Portfolio Maturity Distribution
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RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COTATI APPROVING MID-YEAR ADJUSTMENT TO THE BUDGET FOR FISCAL YEAR 2023/24 WHEREAS, the City of Cotati City Council did, on May 21, 2023, adopt the budget for fiscal year 2023/24; and
WHEREAS, the mid-year budget is an opportunity to update revenues and expenses, including increased investment earnings; and
WHEREAS, the City of Cotati identified additional revenues which were under budgeted for the investment earnings of the general fund by an estimated $120,000; and WHEREAS, per the City of Cotati’s Financial Principles and Policies, the City Council is the sole authority for creating or increasing a general fund budget.
NOW THEREFORE BE IT RESOLVED, that that the City Council of the City of Cotati adopts an increase in account 101-00-65010-0000 for $120,000 for a total adjusted budget of $165,600 to the operating revenue General Fund budgets for fiscal year 2023/24.
IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on January 23, 2024, by the following vote, to wit:
RESULT:
MOVER:
SECONDER:
AYES:
Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, Deputy City Clerk
Approved as to form:______________________________
City Attorney
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: PRESENTATION OF THE 2023-2033 GENERAL FUND LONG
RANGE FINANCIAL FORECAST
Date: January 23, 2024
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council review, discuss and accept the Fiscal Year 2024 to 2034 General Fund Long Range Financial Forecast.
Background
The City’s Long Range Financial Forecast (LRFF) was added to the City’s strategic objectives to help the City set out a path to revenue stability. Future updates to the LFRR are to be considered when new financial conditions arise, and plans are to be evaluated.
Analysis/Discussion
The Long-Range Financial Forecast (LRFF) provides a current and long-range financial assessment of revenues, expenditures, fund balance, and emergency reserves. The primary objective is to provide the City Council and the community with an early financial assessment and identify any significant issues that may need to be addressed in the budget development process. It is important to keep in mind that a forecast is not a budget.
The LRFF is a vehicle that allows us to peer into the future and make projections about what is likely to happen given certain assumptions. If future deficits are projected, then the forecast allows time to take corrective action to ensure finances remain stable. This analysis is centered on the City's General Fund because it is the primary operating budget for tax supported municipal services.
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This document presents a potential range of financial outcomes based on available data and conditions and represents a review of the long-term financial future of the City of Cotati General Fund using a set of three revenue projections and a single expense forecast for a total of three scenarios. The LRFF presents three scenarios illustrating trends of the City’s expenditures and revenues over the next 10 years. The FY (Fiscal Year) 2023-24 adjusted Operating Budget is used as the base for all scenarios.
1. Baseline - The baseline revenue/expense growth estimate is based on a continuation of current economic performance. This forecast is like the actual revenue growth and expenditure change for the City over the last five years plus the adopted budget for the current fiscal year. If identifiable, Staff removed on-time large expenditures from projected expenditures and revenues.
2. Baseline with new hotel breaking ground in FY 2023-24 and opening in 2024-25. This development would then create increases in property tax, sales tax, and a new Transient Occupancy Tax (TOT). TOT is currently approved at 10% per City Code 3.12.030. To remain conservative, for the first year of operations we assumed a 50% occupancy rate with a minimal hotel rate at $200 for the 153-room proposed hotel. Subsequent years are expected to increase to 60% occupancy and then just increase 5% in revenues for each year thereafter.
3. Baseline with a Recession in 2026-27 - This scenario starts from the base assumptions in scenario 1 then estimates what an impact of an event like the great recession of 2008 would be on the City’s General Fund. Initial major impacts would hit the Sales Tax and Rents due to consumers' reduction in spending. For the fiscal year 2026/27 we projected a 35% decline followed by a 5% decrease in the subsequent year as consumers are slow to rebound their spending. After 2027/28 the projection forecasts regular growth of 2% thereafter. Secondary impacts would be shown on Property Tax, which has a lagging recession point. Other revenues including Other Tax Licenses and Franchises, Investment Earnings. And Other Revenue would follow Sales tax with immediate decline in some industries with shrinkage and closures of some businesses.
Financial Considerations
This action is to inform future financial considerations made by the City.
Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
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Long-Range
Financial
Forecast
Fiscal Years 2024-2034
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Forecast
Assumptions
• Cotati is subject to the similar economic factors as
the region and across the State
• Based on best available information today.
• Less certain farther into the future
• Timing of future possible economic
recessions are unknown
• State or Regional legislative or tax changes
• Three Scenarios
• Base Line with Gradual Growth (Status Quo)
• New Hotel Development (New Revenue Source)
• Recession in 2026/27 (Worse Case)
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Millions
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 $0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
Property Tax Sales Tax Bradley Burns Sales Tax Measure A/G/S Top Revenues Historical and Forecast
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Forecast Assumptions
Operating Expenses
• Based on trended historical audited actuals for 5 years plus Fiscal Year 2023-24 budget
• Salaries and Benefits
• No new positions added
• Existing MOU’s
• Pension Unfunded Liability Based on Last Available Pension Analysis without additional contributions
• Debt Service includes new Street and Pension Lease Debt which is consistent payments
• Combined total expense growth on average is almost 8% per year Packet Page 365 of 390
General Fund Baseline
Millions
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 $ -
$ 5
$ 10
$ 15
$ 20
$ (5)
Operating Revenues to Expenses
Revenue Total Operating Expense Total Operating Income/(Deficit) Packet Page 366 of 390
Forecast Assumptions
Does Not Include Major Equipment
& Infrastructure Costs
• Includes
• Minor Equipment and Supplies Used in Operations
• Tech and Data Contract Services
• Serve the Network Management and Major Technological Updates • JPA for Sonoma County Consortium for most PD and Dispatch Computerized Equipment
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General Fund - Hotel
Millions
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 $ -
$ 5
$ 10
$ 15
$ 20
$ (5)
Operating Revenues to Expenses
Revenue Total Operating Expense Total Operating Income/(Deficit) Packet Page 368 of 390
General Fund - Recession
Millions
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 $ -
$ 5
$ 10
$ 15
$ 20
$ (5)
$ (10)
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Comparative Operating
Surplus/(Deficit)
Millions
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
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$ 1
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Operating Revenues to Expenses
Baseline Hotel Recession
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Summary
• LRFP is a Management Planning Tool Only
• Cotati’s challenges are not unique
• Significant Economic Downturn Would Demand Drastic Operating Reductions
• Shows Important Factors to Actively Managing Cash Flows & Flexible Need of Liquidity of Investments
• Economic Development and Special Revenues are Critical to Infrastructure Programs for Streets and Parks.
• Measure S Continues to be Critical to Core Operations and Infrastructure Programs
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City of Cotati
2024-2034
Updated January 23, 2024
Prepared By:
- Damien O’Bid, City Manager
- Angela Courter, Director of Administrative Services
- Neil Tomlinson, Senior Accountant
General Fund
Long Range Financial Forecast
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City of Cotati
General Fund - Financial Forecast
FY 2022-23 to FY 2032-33
Contents
INTRODUCTION .............................................................................................................................3 City Overview ........................................................................................................................3 Objectives...............................................................................................................................3 FORECAST OVERVIEW.................................................................................................................4 Long Range Financial Forecast..............................................................................................4 Base Assumption....................................................................................................................4 Scenarios ................................................................................................................................4 Risks to the Forecast ..............................................................................................................6 GENERAL FUND FORECAST........................................................................................................8 REVENUES HISTORICAL AND PROJECTIONS .......................................................................10 EXPENDITURES HISTORICAL AND PROJECTIONS ..............................................................13 Packet Page 373 of 390
3 INTRODUCTION
City Overview
The City’s Fiscal Year (FY) 2023-24 adopted General Fund Operating Budget is $9.2 million with approximately 51 FTE budgeted positions. The City has the following departments to supply service to the community: City Manager, Administrative Services, Planning and Building, Public Works and Engineering, Police Services, and Recreation.
Objectives
The Long-Range Financial Forecast (LRFF) through FY2033/34 represents a continuing effort to analyze the City’s long-term fiscal condition based upon a reasonable set of economic and operational assumptions. It is an important management tool that can be used by both the City Council and the City Manager for identifying fiscal trends and issues which must be addressed to assure continued financial success. With early detection, financial trends identified as potential problems can be dealt with in a reasonable manner rather than waiting for a crisis to occur. The set of forecasts contained in this report is not a prediction of what will occur. The forecast is a snapshot in time and an approximate view of what could occur in the future if all the assumptions are realized.
As with any forecast or prediction, the assumptions and projections for the nearer years carry more certainty and confidence than for the years further into the future. The economic disruption of the past few years has made forecasting increasingly challenging as financial markets, cost of goods, and the economy overall has grown increasingly volatile along with various stimulus and assistance programs that have been implemented by the state and federal governments. It is important that the City continues to closely monitor economic conditions locally, statewide, and nationally and policies at state and national levels that will impact the City’s financial health.
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4 FORECAST OVERVIEW
Long Range Financial Forecast
The Long-Range Financial Forecast (LRFF) provides a current and long-range financial assessment of revenues, expenditures, fund balance, and emergency reserves. The primary objective is to provide the City Council and the community with a financial forecast and identify any significant issues that may need to be addressed in the annual budget development process.
It is important to keep in mind that a forecast is not a budget. The LRFF is a vehicle that peers into the future and makes projections about what is likely to happen given certain assumptions. If future deficits are projected, then the forecast allows time to take corrective action to ensure finances remain stable.
This analysis is centered on the City's General Fund because it is the primary operating budget for tax supported municipal services. Long range financial forecasting assists the City in making decisions that lead to our ability to sustain the community’s core services. This document represents a review of the City of Cotati’s General Fund using three different scenarios.
Base Assumption
The LRFF scenarios illustrate trends of the City’s expenditures and revenues over the next 10 years. The FY 2023-24 adopted budget, is incorporated into the assumptions for the scenarios.
More detailed information about the assumptions is included in the Revenue and Assumptions and Expenditure and Assumptions sections of this report. It is important to note the historical LRFF figures for both revenues and expenditures are actual numbers. For forecasting purposes if nonreoccurring revenues and non-reoccurring expenditures could be identified, they were removed in determining forecasted growth/decline.
The City’s Annual Budget represents a total financing plan for all City operations and must be analyzed by its component parts to make any meaningful adjustments. Unlike a private holding company, the City cannot remove cash from any one enterprise operation to help support general tax funded operations. Although there is certainly some financial interdependence between the funds, such as internal service fund charges to allocate common costs, each fund represented in the budget must stand alone. When analyzing City operations, it is appropriate to look at the budget, department by department. However, when reviewing long range financial policies, it is best to look at the fund structure rather than the department structure.
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5 Scenarios
The scenarios are modeled to provide insight into future financial capacity so that strategies can be developed to achieve long-term sustainability considering the City’s service objectives and financial challenges. They are intended to provide a high-level overview of the City’s financial situation utilizing various assumptions. Three scenarios are being presented; each scenario is described as follows:
1. Scenario 1 - Baseline Flat Growth- This scenario accounts for extrapolated trend fiscal growth using the actuals for the last five fiscal years and projecting the expected revenues for the future years. Flat fiscal growth is including the following assumptions:
Revenues:
• Sales Tax. The average increase is based on consultant projections for industry expectations for the first two years then on the historical average of change in Sales Tax receipts. • Property Tax, for the first increase based on consultant projections based on known property valuation changes, anticipated transfers of ownership and Prop 8 recaptures for the first three years and then increased using the historical average of change for each account. • Other Tax. This is primarily cannabis business tax. These revenues show a declining trend during fiscal years 2022/23 and 2023/24 as it normalized from the significant growth during covid. Overall, the revenues were forecast to increase gradually each year based on historical average revenue receipts.
• All other revenues are projected using conservative positive trend growth by each account from the adopted budget for 2023/24 forward. This does include some imbedded one-time revenues from private development fees (primarily building permit fees) as well as off-setting revenues that could partially fund staff costs (primarily Community Development and Engineering). • Transfers in and Other Sources. This includes contributions and are budgeted flat as they are based on (1) Transfers in for reimbursements to the General Fund from Prop 72 for police services, and (2) donations made to City operations primarily for Special Events and Recreation Scholarships.
Expenses: The baseline model includes a utilizes the 2023/24 adopted operating budget and applies the following assumptions for the Baseline Scenario:
• Salaries & Benefits (Including Health Insurance)– Changes were projected using projected trend amounts for each account and include expenses for wages, overtime, fringe benefits, insurance, and taxes, and CalPERS payments. The average increase per year for wages and salaries, insurance, and CalPERS is approximately 4.9%, 5.1% and 3.1% respectively. This estimate assumes no significant increases in Full Time Equivalent positions or changes in MOU’s. See more detail about the calculation for the pension expense for the unfunded liability below. • PERS Unfunded Liabilities. Based on the latest amortization schedules using PERS final report in September 2023. A presentation for the Pension Liability Review will be scheduled to further discuss policy compliance and estimates for CalPERS for strategic planning. • Debt Service. Includes new debt service for Streets and Pension Lease Debt. • Other Operating Expenses. to conservatively project expenditures, we have used trendline assumptions based on the last 5 years of actuals and the current budget year. On average the expenses increase at a rate of 4.5% per year.
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6 2. Scenario 2 – Baseline with Hotel Development - This scenario uses the base Scenario 1 and then adds the possible impact of the Hotel Development being completed in 2024-25 and opening in FY 2025-26.
The hotel revenue model is based on consultant projections based on like hotels in the region. This scenario adds the following:
• Property Tax. Additional $44,000 in Property Tax revenues beginning in FY 2025-26 then increasing consistent with the base model thereafter.
• Sales Tax. Incremental increase of 1% beginning in FY 2024-25 then increasing consistent with the base model thereafter.
• Transient Occupancy Tax (TOT). Receipts initiating based on 50% occupancy rate in the first year, 60% occupancy in the second year, and then overall revenue (a function of price and occupancy) increasing by 5% per year for each subsequent year. It is important to note the following regarding Transient Occupancy Tax (TOT) assumptions:
o The approved TOT is set at 10% per City Code 3.12.030. o The proposed hotel is designed with 153 rooms.
• No assumptions around increases in expenses. Though it is reasonable to assume a new contract service for TOT audits would be initiated, the City does not have a cost estimate for these services, but it is not expected to be significantly material to this evaluation.
3. Scenario 3a – Recession in 2026/27 & Scenario 3b Recession – This scenario starts from the base assumptions in scenario one then estimates what an impact of a recession like that of the great recession of 2008 would be on the City’s General Fund. Assumptions for recession include the following:
Revenues:
• Sales Tax and Rents are considered initial revenue streams that are directly impacted by recession due to the pull back of consumers non-essential spending. Decrease of 35% in Fiscal Year 2026-27 followed by a 5% decrease in the year following Fiscal Year 2027-28, zero growth for the two fiscal years Fiscal Years 2028-29, and then back to regular growth of 2.0% thereafter. • Property Tax is a lagging recession point, so it still shows growth for fiscal year 2026/27, however in fiscal Year 2027/28 there is applied a 25% decrease followed by the 15% decrease in the subsequent, no growth for two more years and then average growth of 3.2% thereafter. • Other Tax, Licenses and Franchises, Investment Earnings, and Other Revenue could show immediate declines due to Cannabis Industry shrinkage and closures of business thus reducing of business licenses tax. This was estimated at a 15% decline in Fiscal Year 2026-27 followed by a 25% decrease in the year following Fiscal Year 2027-28, zero growth for the two fiscal years Fiscal Years 2028-29, and then back to regular growth of 1.0% thereafter.
Expenses: The model shows the maintenance of most expenses used in the baseline as if we were going to try and continue operations, but with the decline in revenues. Some immediate changes that were assumed include:
• Capital Outlay, which is primarily used to fund the vehicle replacement fund would cut in half the contributions for fiscal year 2026-27 and then completely discontinue providing contributions in Fiscal Years 2028 through 2034.
• Other Expenses are cut in half with immediate cuts to travel and training and other additional expenditures for fiscal year 2026-27 and then reduced further in 2027-28 after which activities will continue to increase based on cost and need to reinstitute training.
Risks to the Forecast
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7 Every projection is a combination of assumptions based on analysis of historical data, use of actual data when available (e.g., labor contracts, CalPERS rates), and educated assumptions based on an analysis of available information. In addition to the built-in uncertainty of projections, the City continues to experience uncertainty in the future of revenue and major expenses that would impact the City’s budget due partly to the structure of State municipal finance laws. The major risks to these projections include:
1. Volatile Economy - The City’s revenues are impacted by regional and statewide economic conditions. The City’s three largest General Fund revenue sources are sales, property, and other taxes, with sales taxes representing approximately 50% of all revenue. These revenue streams, and sales tax are sensitive to the broader economic trends and more specifically, consumer spending and development/construction.
2. State Takeaways and Borrowing - During times of economic downturn, the State of California has previously shifted, borrowed, or took money from cities to cover its own budget shortfalls. To protect local governments, Proposition 1A was passed in 2004 to protect local revenues from being transferred away from the state. However, Proposition 1A can be suspended if the Governor declares a fiscal necessity and two-thirds of the Legislature concur. The first emergency suspension of Proposition 1A was passed by the Legislature as part of the 2009-10 budget package. Under this provision the State borrowed 8% of the amount of property tax revenue and was required to repay the obligations plus interest by 2013. After this initial repayment, the legislature may consider only one additional borrowing within a ten-year period. While it cannot be predicted if the State will once again borrow money from local governments, it is a possibility.
3. Insurance Premiums - The City is a participant in the California Intergovernmental Risk Authority (CIRA) which is a self-insured joint powers authority established in 1976 to manage insurance claims, benefit programs, and risk management needs of fifty-two cities or special districts. Continued costs related to both health insurance premiums as well as general liability and workers compensation liability are expected to continue to increase, many in double digits. Just as local governments revenues are subject to impacts from the regional and national economic conditions, the city’s insurance premiums are additionally impacted.
4. Unfunded Liability Pension Costs - Rather than provide retirement benefits through Social Security, the City instead provides pension benefits to its employees and retirees through six pension plans with CalPERS. As of 06/30/2022 (the most recent official information available), the plans had a total accrued liability (the amount necessary, as of the valuation date, to fund all earned pension benefits for current employees, retirees, and beneficiaries now and into the future) of approximately $43.2 million, held approximately $36.4 million in assets, and its plans were underfunded by approximately $6.8 million.
In January 2021, the City issued a pension obligation refunding loan and a street improvements financing loan (UAL Refunding Loans) that allowed it to pay down the UAL by $6,000,000. After the UAL refunding, the City programmed smaller UAL payments to CalPERS, as well as payments on the two loans. Since the loan interest rates are significantly lower than the interest rate charged by CalPERS, the refunding allowed the City to generate approximately $2.25 million in cash flow savings.
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8 After the refunding, in July of 2022 CalPERS reported a significant loss of 7.5% leading to a funding shortfall of 14.3% (sum of the 7.5% investment loss and 6.8% discount rate). This shortfall translated to approximately $4.7 million in new UAL for the City. The projections in this forecast are based on the draft 2023 Pension Liability Review generated by Ridgeline Municipal Strategies which did consider the amortization of these losses. However, it does not assume application of no negative amortization schedules or future losses/gains for the current fiscal year forward. Staff are working to prepare a new report for the City Council with the Pension Liability Update.
5. City Operational Changes and Related Staffing Adjustments – The City is continuing to focus on providing the best of class service to our community. This service is provided by three separate bargaining units; the CEA, the Cotati Police Officers Association (CPOA), and the Cotati Police Management Association (CPMA), as well as the Non-Represented group and a single employment agreement with the City manager. Each of these groups negotiate their contracts for a set period that is approved by the City Council. Changes in labor were estimated based on cost trends and did not specifically include projections for staffing FTE increases or new significant contract changes.
6. No Major New One-Time Expenses - The expenditure forecast does not include any provisions for unexpected one-time expenses, such as changes in legislation, unexpected events, acts of nature, or other such factors that could require the City to expend a significant amount of General Fund resources. Also, as mentioned previously, the LRFF does not account for transfers or capital projects, due to the variability of these, but focuses on on-going operational costs/revenues.
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9 GENERAL FUND FORECAST
Below are the financial summaries of the three scenarios outlined. The following tables and charts show the General Fund operating fund balance for each of the scenarios over a 10-year period. Full-size detailed tables with the revenues and expenses by classification are included in Appendices A-C Scenario 1 - Appendix A: Baseline – Flat Growth
Scenario 2 – Appendix B: Baseline with Hotel
Fiscal Year
2023/24
Fiscal Year
2024/25
Fiscal Year
2025/26
Fiscal Year
2026/27
Fiscal Year
2027/28
Fiscal Year
2028/29
Fiscal Year
2029/30
Fiscal Year
2030/31
Fiscal Year
2031/32
Fiscal Year
2032/33
Fiscal Year
2033/34
Base Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 1 BEGINNING FUND BALANCE 10,276,387 6,571,652 7,781,777 9,412,355 11,437,910 11,577,242 11,304,333 10,700,715 9,726,439 8,421,553 6,734,411 2 3 TOTAL REVENUES 10,274,952 11,169,503 11,583,559 11,973,368 12,356,507 12,772,188 13,207,831 13,626,842 14,050,023 14,447,296 14,869,063 4 TOTAL EXPENSES (9,266,451) (9,680,509) (9,680,509) (9,680,509) (11,954,425) (12,786,662) (13,556,962) (14,350,298) (15,107,479) (15,890,149) (16,670,639) 5 ANNUAL SURPLUS OR (DEFICIT) 1,008,501 1,488,994 1,903,050 2,292,859 402,082 (14,474) (349,131) (723,455) (1,057,456) (1,442,853) (1,801,576) 6 7 ENDING OPERATING FUND BAL. 11,284,888 8,060,646 9,684,826 11,705,214 11,839,992 11,562,768 10,955,202 9,977,259 8,668,983 6,978,700 4,932,835 8 9 REQUIRED RESERVE (2,316,613) (2,420,127) (2,420,127) (2,420,127) (2,988,606) (3,196,666) (3,389,241) (3,587,574) (3,776,870) (3,972,537) (4,167,660) 10 11
ENDING OPERATING FUND BAL. AFTER RESERVES BEFORE NON- OPERATING EXPENSES 8,968,275 5,640,519 7,264,699 9,285,086 8,851,385 8,366,102 7,565,962 6,389,685 4,892,113 3,006,163 765,175 12 13
NET NON-OPERATING REVENUES &
EXPENSE
(4,713,236) (278,870) (272,471) (267,303) (262,750) (258,435) (254,487) (250,820) (247,430) (244,289) (234,426) 14 15
ENDING FUND BAL. AFTER
RESERVES & NON-OPERATING
REVENUES AND EXPENSES
4,255,039 5,361,649 6,992,228 9,017,783 8,588,635 8,107,667 7,311,474 6,138,865 4,644,684 2,761,874 530,749 16 Excess Reserve as a % of Operating Exp. 46% 55% 72% 93% 72% 63% 54% 43% 31% 17% 3% SCENARIO 1 - GENERAL FUND FINANCIAL FORECAST SUMMARY - BASELINE - FLAT GROWTH GENERAL FUND TEN YEAR FORECAST 2023/24-2033/34
Fiscal Year
2023/24
Fiscal Year
2024/25
Fiscal Year
2025/26
Fiscal Year
2026/27
Fiscal Year
2027/28
Fiscal Year
2028/29
Fiscal Year
2029/30
Fiscal Year
2030/31
Fiscal Year
2031/32
Fiscal Year
2032/33
Fiscal Year
2033/34
Base Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 1 BEGINNING FUND BALANCE 10,276,387 6,616,652 6,932,225 8,615,272 10,021,715 11,059,762 11,723,373 12,108,225 12,175,194 12,981,265 12,770,138 2 3 TOTAL REVENUES 10,274,952 10,274,952 12,334,503 12,811,351 13,255,222 13,708,708 14,196,301 14,668,087 10,274,952 15,140,641 15,140,641 4 TOTAL EXPENSES (9,221,451) (9,680,509) (10,378,986) (11,137,604) (11,954,425) (12,786,662) (13,556,962) (14,350,298) (9,221,451) (15,107,479) (15,890,149) 5 ANNUAL SURPLUS OR (DEFICIT) 1,053,501 594,443 1,955,518 1,673,747 1,300,797 922,046 639,339 317,789 1,053,501 33,162 (749,508) 6 7
ENDING OPERATING FUND
BALANCE
11,329,888 7,211,095 8,887,743 10,289,018 11,322,512 11,981,807 12,362,712 12,426,014 13,228,695 13,014,427 12,020,629 8 9 REQUIRED RESERVE (2,305,363) (2,420,127) (2,594,746) (2,784,401) (2,988,606) (3,196,666) (3,389,241) (3,587,574) (2,305,363) (3,776,870) (3,972,537) 10 11
ENDING OPERATING FUND
BALANCE AFTER RESERVES BEFORE
CAPITAL
9,024,525 4,790,968 6,292,997 7,504,617 8,333,905 8,785,142 8,973,471 8,838,439 10,923,332 9,237,557 8,048,092 12 13
NET NON-OPERATING REVENUES &
EXPENSE
(4,713,236) (278,870) (272,471) (267,303) (262,750) (258,435) (254,487) (250,820) (247,430) (244,289) (234,426) 14 15
ENDING FUND BAL. AFTER
RESERVES & NON-OPERATING
REVENUES AND EXPENSES
4,311,289 4,512,098 6,020,526 7,237,314 8,071,155 8,526,707 8,718,984 8,587,619 10,675,902 8,993,268 7,813,666 16 Excess Reserve as a % of Operating Exp. 47% 47% 58% 65% 68% 67% 64% 60% 116% 60% 49% SCENARIO 2 - GENERAL FUND FINANCIAL FORECAST SUMMARY - BASELINE -WITH HOTEL GENERAL FUND TEN YEAR FORECAST 2022/23-2032/33 Packet Page 380 of 390
10 Scenario 3 – Appendix C: Recession in 2026/27
Fiscal Year
2023/24
Fiscal Year
2024/25
Fiscal Year
2025/26
Fiscal Year
2026/27
Fiscal Year
2027/28
Fiscal Year
2028/29
Fiscal Year
2029/30
Fiscal Year
2030/31
Fiscal Year
2031/32
Fiscal Year
2032/33
Fiscal Year
2033/34
Base Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 1 BEGINNING FUND BALANCE 10,276,387 6,616,652 8,450,506 9,744,994 8,064,195 4,725,266 532,556 (4,179,306) (9,333,169) (14,839,997) (20,724,018) 2 3 TOTAL REVENUES 10,274,952 11,793,232 11,945,945 9,284,174 8,059,079 7,795,405 7,806,186 7,920,691 8,086,419 8,255,980 8,429,470 4 TOTAL EXPENSES (9,221,451) (9,680,509) (10,378,986) (10,697,669) (11,135,257) (11,729,681) (12,263,561) (12,823,733) (13,345,817) (13,895,712) (14,451,807) 5 ANNUAL SURPLUS OR (DEFICIT) 1,053,501 2,112,723 1,566,959 (1,413,496) (3,076,178) (3,934,275) (4,457,375) (4,903,043) (5,259,399) (5,639,732) (6,022,337) 6 7 ENDING OPERATING FUND BAL. 11,329,888 8,729,375 10,017,465 8,331,498 4,988,017 790,991 (3,924,819) (9,082,349) (14,592,567) (20,479,729) (26,746,356) 8 9 REQUIRED RESERVE (2,305,363) (2,420,127) (2,594,746) (2,674,417) (2,783,814) (2,932,420) (3,065,890) (3,205,933) (3,336,454) (3,473,928) (3,612,952) 10 11
ENDING OPERATING FUND BAL. AFTER RESERVES BEFORE NON- OPERATING EXPENSES 9,024,525 6,309,248 7,422,719 5,657,081 2,204,202 (2,141,429) (6,990,709) (12,288,282) (17,929,022) (23,953,657) (30,359,307) 12 13
NET NON-OPERATING REVENUES &
EXPENSE
(4,713,236) (278,870) (272,471) (267,303) (262,750) (258,435) (254,487) (250,820) (247,430) (244,289) (234,426) 14 15
ENDING FUND BAL. AFTER
RESERVES & NON-OPERATING
REVENUES AND EXPENSES
4,311,289 6,030,378 7,150,248 5,389,777 1,941,452 (2,399,864) (7,245,196) (12,539,102) (18,176,451) (24,197,946) (30,593,733) 16 Excess Reserve as a % of Operating Exp. 47% 62% 69% 50% 17% -20% -59% -98% -136% -174% -212% SCENARIO 3 - GENERAL FUND FINANCIAL FORECAST SUMMARY - Recession 2026/27 GENERAL FUND TEN YEAR FORECAST 2023/24-2033/34 Packet Page 381 of 390
11 REVENUES HISTORICAL TRENDS
Chart 1 provides a summary of the total General Fund Actual Revenues from 2000 to 2022 and budget revenues for fiscal year 2022-23.
CHART 1 – General Fund Revenue FY 2000-2001 to FY 2022-23 Chart 2 provides a summary of the top two General Fund revenue source types from 2000 to 2022.
CHART 2 – Revenue Trends FY 2000-2024
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$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
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$8.0
$9.0
2000
2001
2002
2003200420052006
2007200820092010
20112012
201320142015
2016
2017
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20202021
20222023
2024
Property Tax Sales Tax Bradley Burns Sales Tax Measure A/G/S Top Revenue Historical Trends
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APPENDIX - DEAIL SCENARIO REPORTS
Included within this appendix are the details for the Revenues and Expenses by Function for the General Fund, as summarized within the scenario summaries under General Fund Forecast. This provides in-depth information on the exact change by fiscal year based on each function as outlined in the assumptions.
Appendix Table A. Baseline – Flat Growth
Budget
Row Labels Sum of 2019 Sum of 2020 Sum of 2021 Sum of 2022 Sum of 2023 Sum of 2024 Sum of 2025 Sum of 2026 Sum of 2027 Sum of 2028 Sum of 2029 Sum of 2030 Sum of 2031 Sum of 2032 Sum of 2033 Sum of 2034 Revenue
601 PROPERTY TAX 1,734,281 1,813,280 1,773,535 1,873,508 1,967,056 2,131,758 2,175,119 2,259,073 2,349,354 2,430,844 2,517,242 2,602,251 2,688,269 2,774,166 2,860,709 2,946,715 603 SALES TAX 5,109,212 5,001,563 5,837,741 6,230,425 6,024,055 6,084,000 6,531,894 6,764,564 6,992,990 7,220,184 7,472,364 7,712,543 7,954,127 8,197,007 8,415,500 8,653,271 604 OTHER TAX 416,685 509,572 668,954 723,670 678,562 652,300 711,818 756,096 796,123 835,846 874,907 913,848 955,142 996,533 1,034,837 1,075,156 606 LICENSE & FRANCHISE 515,546 546,010 623,563 686,807 718,840 556,500 662,359 685,073 701,177 719,081 736,260 753,438 771,171 789,268 807,403 825,569 607 RENTS 96,344 101,474 71,712 80,114 102,463 78,000 94,271 97,590 102,528 105,558 109,706 113,838 117,959 122,074 126,187 130,297 608 REVENUE - OTHER AGENCIES 303,488 189,454 200,751 107,218 151,897 207,150 176,096 164,804 156,077 147,995 140,609 133,215 125,948 118,758 111,617 104,507 609 OTHER REVENUE 89,461 86,628 237,173 316,772 2,303,881 45,058 195,398 207,559 215,194 222,391 228,881 263,839 278,042 292,830 307,717 324,452 620 CHARGES FOR SVS 396,277 434,938 1,035,074 573,294 602,780 463,186 526,013 547,336 549,994 556,685 566,341 581,382 596,282 612,810 629,561 648,151 660 CONTRIBUTIONS 17,813 16,986 10,643 19,184 22,928 12,000 18,345 19,061 22,032 24,058 26,111 27,872 30,168 31,482 33,320 35,154 680 SPECIAL REVENUES 58,823 42,149 32,237 80,885 86,388 45,000 78,191 82,403 87,901 93,864 99,766 105,606 109,734 115,094 120,446 125,791 Revenue Total 8,737,930 8,742,054 10,491,382 10,691,875 12,658,849 10,274,952 11,169,503 11,583,559 11,973,368 12,356,507 12,772,188 13,207,831 13,626,842 14,050,023 14,447,296 14,869,063 Operating Expense
700 WAGES & SALARIES (2,101,593) (2,401,745) (2,676,683) (2,616,594) (2,827,383) (3,538,015) (3,552,687) (3,800,631) (4,050,135) (4,300,260) (4,552,074) (4,804,798) (5,058,128) (5,311,229) (5,565,653) (5,820,630) 701 INCENTIVES (151,047) (59,885) (69,258) (95,476) (124,019) (126,550) (148,171) (164,982) (182,348) (200,200) (217,928) (235,907) (252,551) (270,008) (287,458) (304,971) 702 FRINGE BENEFITS (26,395) (23,215) (23,741) (22,435) (24,477) (26,620) (28,080) (28,894) (29,980) (31,118) (32,283) (33,464) (34,582) (35,742) (36,953) (38,133) 703 LEAVE (387,901) (393,354) (379,118) (456,352) (520,498) (457,450) (512,514) (543,996) (579,224) (616,000) (654,243) (694,068) (735,649) (779,216) (822,436) (866,008) 704 DEDUCTIONS (1,057,320) (901,273) (1,028,266) (6,086,622) (803,913) (853,700) (929,302) (998,638) (1,068,344) (1,138,267) (1,266,074) (1,316,724) (1,361,327) (1,405,787) (1,450,384) (1,495,094) 705 INSURANCE (382,442) (418,427) (446,918) (475,754) (463,828) (512,250) (523,116) (546,221) (569,201) (592,872) (617,101) (640,518) (664,837) (689,659) (714,957) (740,205) 706 TAX (37,826) (42,144) (46,748) (47,897) (52,955) (61,120) (62,981) (67,057) (70,926) (75,268) (79,395) (83,524) (87,723) (91,880) (96,039) (100,200) 707 PAYOUTS (419,961) (47,380) (95,899) (127,743) (147,303) (107,770) (102,987) (71,809) (59,814) (59,496) (59,271) (59,105) (58,967) (58,846) (58,729) (58,634) 720 MISCELLANEOUS PAYROLL - (411) (335) (896) - - (102) (81) (24) (39) (15) (3) - - - - 800 MATERIAL & SUPPLY (64,362) (109,997) (77,248) (81,625) (101,585) (76,762) (82,816) (82,380) (81,078) (79,803) (80,542) (82,037) (83,564) (85,106) (87,033) (88,863) 801 CONTRACT SERVICES (901,987) (843,450) (972,430) (1,210,533) (1,358,546) (1,745,397) (1,885,865) (2,066,713) (2,276,630) (2,479,973) (2,685,427) (2,887,650) (3,088,083) (3,298,597) (3,508,639) (3,716,077) 802 LEGAL (83,806) (88,869) (155,975) (81,420) (84,837) (111,064) (112,525) (123,764) (133,785) (144,748) (155,832) (166,900) (177,981) (189,106) (200,233) (211,361) 803 UTILITIES (238,791) (261,389) (297,152) (245,669) (335,068) (350,597) (356,161) (386,305) (420,318) (455,642) (491,148) (526,571) (562,081) (597,466) (633,031) (668,684) 805 REPAIR & MAINTENANCE (96,745) (236,618) (233,947) (115,371) (113,920) (53,400) (84,752) (74,212) (64,983) (96,170) (81,086) (76,690) (101,585) (75,116) (72,748) (70,429) 806 OTHER EXPENSES (588,600) (599,062) (765,725) (698,540) (912,728) (1,103,096) (1,191,200) (1,316,143) (1,446,017) (1,578,796) (1,709,009) (1,843,541) (1,976,990) (2,110,984) (2,245,738) (2,379,851) 807 FISCAL FEES (57,064) (45,603) (41,854) (56,960) (51,251) (58,480) (59,908) (61,233) (62,733) (64,236) (66,312) (68,308) (70,276) (72,253) (74,200) (76,135) 808 DEBT SERVICE (3,878) (6,736) (11,855) (9,194) (908) (8,180) (5,288) (5,191) (5,030) (5,137) (5,470) (5,804) (6,136) (6,465) (6,795) (7,124) 809 CAPITAL OUTLAY - (14,160) (16,646) (55,456) (31,550) - (15,776) (14,124) (11,517) (12,432) (10,963) (10,271) (10,106) (10,157) (10,213) (10,274) 811 MISCELLANEOUS EXPENSE (17,818) (27,033) (27,927) (78,176) (4,790) (31,000) (26,279) (26,612) (25,517) (23,967) (22,488) (21,079) (19,732) (19,862) (18,909) (17,965) Operating Expense Total (6,617,536) (6,520,750) (7,367,724) (12,562,712) (7,959,558) (9,221,451) (9,680,509) (10,378,986) (11,137,604) (11,954,425) (12,786,662) (13,556,962) (14,350,298) (15,107,479) (15,890,149) (16,670,639) Non-Operating Revenues & Expenses
650 INVESTMENT EARNINGS 126,272 103,797 56,654 19,717 187,176 166,000 196,018 202,281 207,200 211,729 215,899 219,739 223,277 226,541 229,556 239,296 670 TRANSFR IN & OTHR SOURCES 250,000 339,236 219,431 5,934,212 391,922 202,000 180,112 180,248 180,497 180,521 180,667 180,774 180,903 181,029 181,154 181,278 808 DEBT SERVICE - - - (62,062) 50,440 (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) 810 TRANS OUT & OTHER USES (984,431) (2,630,461) (1,567,550) (4,144,478) (4,052,652) (4,426,236) - - - - - - - - - - Non-Operating Revenues & Expenses Total (608,160) (2,187,428) (1,291,465) 1,747,389 (3,423,115) (4,713,236) (278,870) (272,471) (267,303) (262,750) (258,435) (254,487) (250,820) (247,430) (244,289) (234,426) Grand Total 1,512,235 33,876 1,832,193 (123,448) 1,276,176 (3,659,735) 1,210,125 932,102 568,460 139,332 (272,909) (603,618) (974,275) (1,304,886) (1,687,143) (2,036,002) Audited Actual Strategic Forecast Long-Range Forecast
Packet Page 383 of 390
Appendix Table B – Baseline with Hotel
Budget
Row Labels Sum of 2019 Sum of 2020 Sum of 2021 Sum of 2022 Sum of 2023 Sum of 2024 Sum of 2025 Sum of 2026 Sum of 2027 Sum of 2028 Sum of 2029 Sum of 2030 Sum of 2031 Sum of 2032 Sum of 2033 Sum of 2034 Revenue
601 PROPERTY TAX 1,734,281 1,813,280 1,773,535 1,873,508 1,967,056 2,131,758 2,175,119 2,303,073 2,373,450 2,459,096 2,549,613 2,638,715 2,728,811 2,818,777 2,909,381 2,999,443 603 SALES TAX 5,109,212 5,001,563 5,837,741 6,230,425 6,024,055 6,084,000 6,597,173 6,857,213 7,069,723 7,316,635 7,563,802 7,811,201 8,058,813 8,302,198 8,548,335 8,794,447 604 OTHER TAX 416,685 509,572 668,954 723,670 678,562 652,300 711,818 1,370,391 1,533,277 1,609,858 1,687,620 1,767,196 1,851,157 1,937,349 2,022,694 2,112,406 606 LICENSE & FRANCHISE 515,546 546,010 623,563 686,807 718,840 556,500 662,359 685,073 701,177 719,081 736,260 753,438 771,171 789,268 807,403 825,569 607 RENTS 96,344 101,474 71,712 80,114 102,463 78,000 94,271 97,590 102,528 105,558 109,706 113,838 117,959 122,074 126,187 130,297 608 REVENUE - OTHER AGENCIES 303,488 189,454 200,751 107,218 151,897 207,150 176,096 164,804 156,077 147,995 140,609 133,215 125,948 118,758 111,617 104,507 609 OTHER REVENUE 89,461 86,628 237,173 316,772 2,303,881 45,058 195,398 207,559 215,194 222,391 228,881 263,839 278,042 292,830 307,717 324,452 620 CHARGES FOR SVS 396,277 434,938 1,035,074 573,294 602,780 463,186 883,857 547,336 549,994 556,685 566,341 581,382 596,282 612,810 629,561 648,151 660 CONTRIBUTIONS 17,813 16,986 10,643 19,184 22,928 12,000 18,345 19,061 22,032 24,058 26,111 27,872 30,168 31,482 33,320 35,154 680 SPECIAL REVENUES 58,823 42,149 32,237 80,885 86,388 45,000 78,191 82,403 87,901 93,864 99,766 105,606 109,734 115,094 120,446 125,791 Revenue Total 8,737,930 8,742,054 10,491,382 10,691,875 12,658,849 10,274,952 11,592,626 12,334,503 12,811,351 13,255,222 13,708,708 14,196,301 14,668,087 15,140,641 15,616,659 16,100,218 Operating Expense
700 WAGES & SALARIES (2,101,593) (2,401,745) (2,676,683) (2,616,594) (2,827,383) (3,538,015) (3,552,687) (3,800,631) (4,050,135) (4,300,260) (4,552,074) (4,804,798) (5,058,128) (5,311,229) (5,565,653) (5,820,630) 701 INCENTIVES (151,047) (59,885) (69,258) (95,476) (124,019) (126,550) (148,171) (164,982) (182,348) (200,200) (217,928) (235,907) (252,551) (270,008) (287,458) (304,971) 702 FRINGE BENEFITS (26,395) (23,215) (23,741) (22,435) (24,477) (26,620) (28,080) (28,894) (29,980) (31,118) (32,283) (33,464) (34,582) (35,742) (36,953) (38,133) 703 LEAVE (387,901) (393,354) (379,118) (456,352) (520,498) (457,450) (512,514) (543,996) (579,224) (616,000) (654,243) (694,068) (735,649) (779,216) (822,436) (866,008) 704 DEDUCTIONS (1,057,320) (901,273) (1,028,266) (6,086,622) (803,913) (853,700) (929,302) (998,638) (1,068,344) (1,138,267) (1,266,074) (1,316,724) (1,361,327) (1,405,787) (1,450,384) (1,495,094) 705 INSURANCE (382,442) (418,427) (446,918) (475,754) (463,828) (512,250) (523,116) (546,221) (569,201) (592,872) (617,101) (640,518) (664,837) (689,659) (714,957) (740,205) 706 TAX (37,826) (42,144) (46,748) (47,897) (52,955) (61,120) (62,981) (67,057) (70,926) (75,268) (79,395) (83,524) (87,723) (91,880) (96,039) (100,200) 707 PAYOUTS (419,961) (47,380) (95,899) (127,743) (147,303) (107,770) (102,987) (71,809) (59,814) (59,496) (59,271) (59,105) (58,967) (58,846) (58,729) (58,634) 720 MISCELLANEOUS PAYROLL - (411) (335) (896) - - (102) (81) (24) (39) (15) (3) - - - - 800 MATERIAL & SUPPLY (64,362) (109,997) (77,248) (81,625) (101,585) (76,762) (82,816) (82,380) (81,078) (79,803) (80,542) (82,037) (83,564) (85,106) (87,033) (88,863) 801 CONTRACT SERVICES (901,987) (843,450) (972,430) (1,210,533) (1,358,546) (1,745,397) (1,885,865) (2,066,713) (2,276,630) (2,479,973) (2,685,427) (2,887,650) (3,088,083) (3,298,597) (3,508,639) (3,716,077) 802 LEGAL (83,806) (88,869) (155,975) (81,420) (84,837) (111,064) (112,525) (123,764) (133,785) (144,748) (155,832) (166,900) (177,981) (189,106) (200,233) (211,361) 803 UTILITIES (238,791) (261,389) (297,152) (245,669) (335,068) (350,597) (356,161) (386,305) (420,318) (455,642) (491,148) (526,571) (562,081) (597,466) (633,031) (668,684) 805 REPAIR & MAINTENANCE (96,745) (236,618) (233,947) (115,371) (113,920) (53,400) (84,752) (74,212) (64,983) (96,170) (81,086) (76,690) (101,585) (75,116) (72,748) (70,429) 806 OTHER EXPENSES (588,600) (599,062) (765,725) (698,540) (912,728) (1,103,096) (1,191,200) (1,316,143) (1,446,017) (1,578,796) (1,709,009) (1,843,541) (1,976,990) (2,110,984) (2,245,738) (2,379,851) 807 FISCAL FEES (57,064) (45,603) (41,854) (56,960) (51,251) (58,480) (59,908) (61,233) (62,733) (64,236) (66,312) (68,308) (70,276) (72,253) (74,200) (76,135) 808 DEBT SERVICE (3,878) (6,736) (11,855) (9,194) (908) (8,180) (5,288) (5,191) (5,030) (5,137) (5,470) (5,804) (6,136) (6,465) (6,795) (7,124) 809 CAPITAL OUTLAY - (14,160) (16,646) (55,456) (31,550) - (15,776) (14,124) (11,517) (12,432) (10,963) (10,271) (10,106) (10,157) (10,213) (10,274) 811 MISCELLANEOUS EXPENSE (17,818) (27,033) (27,927) (78,176) (4,790) (31,000) (26,279) (26,612) (25,517) (23,967) (22,488) (21,079) (19,732) (19,862) (18,909) (17,965) Operating Expense Total (6,617,536) (6,520,750) (7,367,724) (12,562,712) (7,959,558) (9,221,451) (9,680,509) (10,378,986) (11,137,604) (11,954,425) (12,786,662) (13,556,962) (14,350,298) (15,107,479) (15,890,149) (16,670,639) Non-Operating Revenues & Expenses
650 INVESTMENT EARNINGS 126,272 103,797 56,654 19,717 187,176 600,000 246,018 252,281 257,200 261,729 265,899 269,739 273,277 276,541 279,556 289,296 670 TRANSFR IN & OTHR SOURCES 250,000 339,236 219,431 5,934,212 391,922 202,000 215,112 215,248 215,497 215,521 215,667 215,774 215,903 216,029 216,154 216,278 808 DEBT SERVICE - - - (62,062) 50,440 (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) 810 TRANS OUT & OTHER USES (984,431) (2,630,461) (1,567,550) (4,144,478) (4,052,652) (4,426,236) - - - - - - - - - - Non-Operating Revenues & Expenses Total (608,160) (2,187,428) (1,291,465) 1,747,389 (3,423,115) (4,279,236) (193,870) (187,471) (182,303) (177,750) (173,435) (169,487) (165,820) (162,430) (159,289) (149,426) Grand Total 1,512,235 33,876 1,832,193 (123,448) 1,276,176 (3,225,735) 1,718,247 1,768,047 1,491,443 1,123,047 748,611 469,852 151,969 (129,268) (432,779) (719,847) Audited Actual Strategic Forecast Long-Range Forecast 15 Packet Page 384 of 390
C – Recession in 2026/27
Budget
Row Labels Sum of 2019 Sum of 2020 Sum of 2021 Sum of 2022 Sum of 2023 Sum of 2024 Sum of 2025 Sum of 2026 Sum of 2027 Sum of 2028 Sum of 2029 Sum of 2030 Sum of 2031 Sum of 2032 Sum of 2033 Sum of 2034 Revenue
601 PROPERTY TAX 1,734,281 1,813,280 1,773,535 1,873,508 1,967,056 2,131,758 2,175,119 2,303,073 2,402,105 1,801,579 1,531,342 1,531,342 1,531,342 1,580,345 1,630,916 1,683,105 603 SALES TAX 5,109,212 5,001,563 5,837,741 6,230,425 6,024,055 6,084,000 6,597,173 6,847,890 4,451,128 4,228,572 4,228,572 4,228,572 4,313,143 4,399,406 4,487,394 4,577,142 604 OTHER TAX 416,685 509,572 668,954 723,670 678,562 652,300 1,270,268 991,156 842,482 631,862 631,862 631,862 638,180 644,562 651,008 657,518 606 LICENSE & FRANCHISE 515,546 546,010 623,563 686,807 718,840 556,500 662,359 685,073 582,312 436,734 436,734 436,734 441,101 445,512 449,967 454,467 607 RENTS 96,344 101,474 71,712 80,114 102,463 78,000 94,271 97,590 63,434 60,262 60,262 60,262 61,467 62,697 63,951 65,230 608 REVENUE - OTHER AGENCIES 303,488 189,454 200,751 107,218 151,897 207,150 176,096 164,804 168,100 171,462 174,891 178,389 181,957 185,596 189,308 193,094 609 OTHER REVENUE 89,461 86,628 237,173 316,772 2,303,881 45,058 195,398 207,559 176,425 132,319 132,319 136,357 137,721 139,098 140,489 141,894 620 CHARGES FOR SVS 396,277 434,938 1,035,074 573,294 602,780 463,186 526,013 547,336 492,603 487,676 487,676 487,676 497,430 507,379 517,526 527,877 660 CONTRIBUTIONS 17,813 16,986 10,643 19,184 22,928 12,000 18,345 19,061 19,061 19,061 19,061 19,061 19,061 19,061 19,061 19,061 680 SPECIAL REVENUES 58,823 42,149 32,237 80,885 86,388 45,000 78,191 82,403 86,523 89,551 92,686 95,930 99,287 102,762 106,359 110,082 Revenue Total 8,737,930 8,742,054 10,491,382 10,691,875 12,658,849 10,274,952 11,793,232 11,945,945 9,284,174 8,059,079 7,795,405 7,806,186 7,920,691 8,086,419 8,255,980 8,429,470 Operating Expense 700 WAGES & SALARIES (2,101,593) (2,401,745) (2,676,683) (2,616,594) (2,827,383) (3,538,015) (3,552,687) (3,800,631) (4,044,123) (4,288,400) (4,534,593) (4,781,996) (5,030,331) (5,278,787) (5,528,941) (5,780,046) 701 INCENTIVES (151,047) (59,885) (69,258) (95,476) (124,019) (126,550) (148,171) (164,982) (165,893) (166,803) (167,714) (168,625) (169,536) (170,448) (171,359) (172,270) 702 FRINGE BENEFITS (26,395) (23,215) (23,741) (22,435) (24,477) (26,620) (28,080) (28,894) (30,339) (31,856) (33,448) (35,121) (36,877) (38,721) (40,657) (42,689) 703 LEAVE (387,901) (393,354) (379,118) (456,352) (520,498) (457,450) (512,514) (543,996) (588,499) (611,780) (636,093) (661,136) (686,777) (713,258) (740,512) (768,501) 704 DEDUCTIONS (1,057,320) (901,273) (1,028,266) (6,086,622) (803,913) (853,700) (929,302) (998,638) (1,026,935) (1,055,252) (1,140,992) (1,149,739) (1,151,891) (1,154,044) (1,156,198) (1,158,356) 705 INSURANCE (382,442) (418,427) (446,918) (475,754) (463,828) (512,250) (523,116) (546,221) (584,066) (613,549) (644,381) (676,758) (710,675) (746,241) (783,538) (822,653) 706 TAX (37,826) (42,144) (46,748) (47,897) (52,955) (61,120) (62,981) (67,057) (67,265) (67,485) (67,705) (67,925) (68,144) (68,363) (68,583) (68,802) 707 PAYOUTS (419,961) (47,380) (95,899) (127,743) (147,303) (107,770) (102,987) (71,809) (74,875) (78,004) (81,200) (83,419) (85,656) (87,910) (90,185) (92,482) 720 MISCELLANEOUS PAYROLL - (411) (335) (896) - - (102) (81) (81) (81) (81) (81) (81) (81) (81) (81) 800 MATERIAL & SUPPLY (64,362) (109,997) (77,248) (81,625) (101,585) (76,762) (82,816) (82,380) (86,490) (89,576) (92,765) (96,055) (99,450) (102,954) (106,570) (110,303) 801 CONTRACT SERVICES (901,987) (843,450) (972,430) (1,210,533) (1,358,546) (1,745,397) (1,885,865) (2,066,713) (2,179,255) (2,268,095) (2,360,744) (2,453,772) (2,548,674) (2,652,061) (2,754,378) (2,859,331) 802 LEGAL (83,806) (88,869) (155,975) (81,420) (84,837) (111,064) (112,525) (123,764) (131,836) (139,920) (148,109) (156,354) (164,711) (173,138) (181,640) (190,217) 803 UTILITIES (238,791) (261,389) (297,152) (245,669) (335,068) (350,597) (356,161) (386,305) (416,011) (442,870) (469,972) (497,362) (525,053) (553,038) (581,333) (609,948) 805 REPAIR & MAINTENANCE (96,745) (236,618) (233,947) (115,371) (113,920) (53,400) (84,752) (74,212) (66,009) (97,429) (82,703) (78,694) (103,399) (77,236) (75,225) (73,316) 806 OTHER EXPENSES (588,600) (599,062) (765,725) (698,540) (912,728) (1,103,096) (1,191,200) (1,316,143) (1,133,548) (1,084,562) (1,166,326) (1,250,298) (1,332,763) (1,416,207) (1,499,443) (1,581,877) 807 FISCAL FEES (57,064) (45,603) (41,854) (56,960) (51,251) (58,480) (59,908) (61,233) (63,543) (65,495) (67,757) (70,096) (72,513) (75,010) (77,588) (80,251) 808 DEBT SERVICE (3,878) (6,736) (11,855) (9,194) (908) (8,180) (5,288) (5,191) (5,200) (5,179) (5,162) (5,148) (5,138) (5,133) (5,131) (5,134) 809 CAPITAL OUTLAY - (14,160) (16,646) (55,456) (31,550) - (15,776) (14,124) (5,758) - - - - - - - 811 MISCELLANEOUS EXPENSE (17,818) (27,033) (27,927) (78,176) (4,790) (31,000) (26,279) (26,612) (27,942) (28,920) (29,932) (30,980) (32,064) (33,187) (34,348) (35,550) Operating Expense Total (6,617,536) (6,520,750) (7,367,724) (12,562,712) (7,959,558) (9,221,451) (9,680,509) (10,378,986) (10,697,669) (11,135,257) (11,729,681) (12,263,561) (12,823,733) (13,345,817) (13,895,712) (14,451,807) Non-Operating Revenues & Expenses
650 INVESTMENT EARNINGS 126,272 103,797 56,654 19,717 187,176 600,000 246,018 252,281 126,140 113,526 102,174 91,956 92,876 93,805 94,743 95,690 670 TRANSFR IN & OTHR SOURCES 250,000 339,236 219,431 5,934,212 391,922 202,000 215,112 215,248 215,248 215,248 215,248 215,248 215,248 215,248 215,248 215,248 808 DEBT SERVICE - - - (62,062) 50,440 (655,000) (655,000) (655,000) (687,750) (711,821) (736,735) (762,521) (789,209) (816,831) (845,420) (875,010) 810 TRANS OUT & OTHER USES (984,431) (2,630,461) (1,567,550) (4,144,478) (4,052,652) (4,426,236) - - - - - - - - - - Non-Operating Revenues & Expenses Total (608,160) (2,187,428) (1,291,465) 1,747,389 (3,423,115) (4,279,236) (193,870) (187,471) (346,361) (383,047) (419,313) (455,316) (481,085) (507,778) (535,429) (564,072) Grand Total 1,512,235 33,876 1,832,193 (123,448) 1,276,176 (3,225,735) 1,918,854 1,379,488 (1,759,857) (3,459,225) (4,353,588) (4,912,691) (5,384,127) (5,767,177) (6,175,162) (6,586,409) Actual Strategic Forecast Long-Range Forecast
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16 Packet Page 386 of 390
Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: DISCUSSION ON CITY'S PUBLIC MEETING AUDIO-VISUAL SYSTEM
Date: January 23, 2024
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council receive a staff report on the public meeting audio visual systems and provide direction to staff, if any.
Background
Before 2015, the City recorded meetings through a combination of audio recordings and meeting minutes. Public meeting agendas were created by each department individually creating meeting items, routing the Word and associated files for review and ultimately to the City Clerk to assemble the meeting packet, which was printed and posted on the City website. Live meeting participation required physical presence in the City Council chambers, except for the occasional telephonic attendance by a City Council member who was out of town.
In 2015, the City initially began web streaming public meetings from the City Council Chambers. This happened concurrently with the City beginning to use an electronic legislative management system, which allowed for greater standardization, electronic routing and approval, and a largely automated meeting packet and publishing process for the City Clerk. The electronic legislative management system included a “Boardroom“ module, allowing for basic meeting management, such as speaker timers, upcoming agenda view and pushed the live meeting video out to the meeting portal through an ”encoder”. The encoder reduced the resolution of the video and converted it into the proper format for the portal. The initial system installed in 2015 is the foundation of the system we use today, including the in-chamber cameras, some audio components and some of the AV equipment housed in the server room.
The initial system required the City Clerk to start and operate the system in the Council Chambers and a camera operator in the server room to switch the camera angles as needed and superimpose a lower third banner on the screen indicating the agenda item. This initial system Packet Page 387 of 390
was installed by PCD, located in Santa Rosa, while Petaluma Community Access (PCA) operated the camera operations.
Aside from periodically replacing failed equipment, this system did not significantly change until COVID. Initially during COVID, public meetings were simply run on Zoom, with no physical meetings. In preparation for the return to live meetings, there was a general desire to retain the good parts of Zoom and allow for remote participation once the meetings were back in the Council Chambers. The City was concurrently working with Comcast to bring public access TV feeds into City Hall to broadcast public meetings on Channel 28.
To make the needed upgrades to accomplish three simultaneous video feeds (webstream, Zoom and Channel 28), the City retained CodaTech to install and maintain the needed (extensive) upgrades to the video and sound systems, as well as other more visible changes, such as removing the projector and replacing it with a large format TV in the City Council Chambers.
Given the large number of moving pieces to run a meeting with these changes, the system now takes the City Clerk and Administrative Assistant, as well as the camera operator to run a meeting.
This new system architecture is essentially an AV system sitting on top of the City’s network.
The output is primarily produced from equipment in the City Hall server room. Remote to this is the audio equipment, a device controller computer, a Zoom computer and related switches, located behind the dias. Conceptually, it‘s three nodes: the production equipment in the server room, audio/zoom/controllers behind the dias, and the equipment in the City Council Chamber.
All three nodes communicate to each other in both directions, partially on point-to-point ethernet and partially on the City‘s network operated by KLH.
Around 2021, the City transitioned the business internet connection to a direct fiber optic connection. This increased video bandwidth and reliability during power outages. Prior to this, the City also set up tertiary internet connections to address some of the lessons learned from the fires. Today, the City has a primary fiber internet connection, a secondary terrestrial microwave connection, and a tertiary satellite internet connection to allow for multiple failovers while keeping communications intact.
In 2023, the City was notified that the legislative management system was being phased out by the vendor and no longer supported in the next two years. Additionally, the encoder continually had issues affecting the web stream component. Therefore, the City transitioned to a new legislative management software system with a new type of encoder.
Analysis/Discussion
Prior to every meeting, staff test all equipment to confirm that it is operating properly.
Generally, these tests are successful, and any issues are resolved prior to the meeting. Before the AV system updates, the web streaming system's primary failure mode was a failure of the encoder. The previous encoder was simply a web connected PC, which periodically received Packet Page 388 of 390
automatic software updates that would knock it out of service until staff could get it up and running again. This was resolved when the City moved to a new legislative management system which used a firmware encoder, which is much less complicated and prone to unrelated software issues than a PC. During COVID, while meetings were conducted over Zoom exclusively, the primary mode of failure was restrictions in bandwidth by Comcast at 6 pm when many other people were turning on their video streaming services. This was resolved by the addition of a dedicated fiber optic internet connection to City Hall. However, since the build out of the system during COVID, there has not been any single mode of failure. In most cases, the failures are with the web stream or Channel 28, not with Zoom. The only Zoom failure was a failure of the internet connection to City Hall. The project to eliminate the single point of failure that occurred in that case was already well underway prior to the temporary failure that impacted a portion of the January 9, 2024 City Council meeting. The failures of the webstream and Channel 28 have nearly always been new and unique. In staff‘s opinion, this can be attributed to a system built on top of an earlier system that is overly complex and tried to leverage portions of the pre-existing system to meet the needs of a new hybrid system. This new system is prone to numerous single points of failure that cannot be predicted.
Financial Considerations
It is recommended that the City move forward with a ”clean sheet” design of a new system that achieves the goal of a hybrid system allowing remote participation, web streaming and public access TV broadcasts. This would allow for simplification of the system, creating redundancies, and removing equipment that is not needed. Ideally, the system would also be simple enough for the City Clerk to operate it without assistance in the Council Chamber. If the staff moved forward with a new system design soon, the goal would be to install the equipment during the summer during the normal meeting cancellation. When investigating options for a portable AV system in 2023, the City received a quote from CodaTech or approximately $90,000. While the system would function differently in the Chamber, much of the equipment needed would be similar. It is expected that a new system would likely cost around $100,000.
Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
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Cotati City Council
Agenda Staff Report
Item type: INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED To: City Council
Subject: INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED Date: January 23, 2024
Written by: Kevin Patterson, Deputy City Clerk
Recommendation
Information or written comments pertaining to this meeting, and which was received after the agenda was posted, is attached below.
Pursuant to City Council Policy 2023-01: City Council Rules section IV A., written Communications, interested persons or their authorized representative may address the Council by written communication on any matters concerning the City’s business, or any matters over which the Council has control.
1. To be considered for inclusion in the agenda packet, such written communication shall be delivered to the Deputy City Clerk no later than 11:00 a.m. of the Wednesday the week preceding the regular Council meeting for which such written communication is intended.
2. If received after the above date and time, but no later than noon the day before the meeting, written communications received by the Deputy City Clerk shall be posted on the website by the end of that day and notification provided to the electronic Agenda mailing list by the end of the day. All written communications received by the Deputy City Clerk by 5 pm on the City Council meeting day shall be made available to the City Council and public at the City Council meeting.
City Council Policy 2023-01 is available at the online meeting portal at www.cotaticity.org or by request from the Deputy City Clerk at 707-665-3622 or [email protected].
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