Overview & Economic Outlook
Presentation Outline:
1. Economic Outlook
2. City Council Budget Goals FY 2022/23
3. All Funds Reserves
4. Financial Challenges & Five Year Forecast - GF
5.Opportunities & Options
National Outlook
• US GDP: Falls 1.4% in Q1, 2022.
Est a 3% Growth in Q2. 2022
• US Unemployment Rate: 3.5%
• California Unemployment Rate:
4.2%
• Fed’s Interest Rate Increase: 0.50%
Unemployment Rate:
Consumer Price Index
• CPI: 8.3% (1.2% increase from
March)
FEDERAL FUNDS TARGET RATE
Local Outlook
Inflation & Supply Chain Disruptions
Rising Fuel Prices (County average: $5.77/gallon)
Increase in Tourism & Sales Tax
Housing Inventory Low and Increase in Housing Prices
Home Value – 95437 Fort Bragg
COUNCIL BUDGET GOALS FY 2022/23
PRIORITY GOAL STATUS
1 Adopt a balanced budget
2 Maintain current level of service (no staff layoffs, no program cuts)
3 Maintain Operating Reserves and Litigation Reserves
4 Provide funding for Emergency Reserves
5 Provide Cost of Living Adjustment to Staff
6 Provide additional contributions to CALPERS to pay
down UAL
RESERVES – All Funds
General Fund
Operating Reserve: $2.2M
Recession Reserve: $541k
Litigation Reserve: $200k
Wastewater Enterprise
Operating Reserve: $702k
Recession Reserve: $108k
Capital Reserve: $1.5M
Water Enterprise
Operating Reserve: $750k
Recession Reserve: $139k
Capital Reserve: $2.8M
CV Starr Enterprise
Operating Reserve: $745k
Capital Reserve: $745k
Internal Service Funds
Reserves: $173k
GENERAL FUND EXPENDITURES
0 10
20 30
40 50
60 70
80 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Adopted Adopted Adopted Adopted Adopted Adopted Adopted Adopted Adopted Proposed Proposed
TOTAL AUTHORIZED POSITIONS
TEN YEAR AUTHORIZED STAFFING COMPARISON
ON THE HORIZON- FINANCIAL CHALLENGES
Current National Economic Outlook - Recession FY 23/24 Increase in General Liability and Insurance Costs
Rising Labor Costs
Annual Pension Costs (Normal Costs & Unfunded Liability)
GENERAL FUND FIVE YEAR FORECAST
$3,141,630
$2,691,242
$4,184,215
$3,449,677
$3,647,487
$3,371,053
$3,024,918
$3,451,485
$3,847,954
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Audited Audited Audited Projected Forecast Forecast Forecast Forecast Forecast FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
GENERAL FUND FIVE YEAR FORECAST
Total Revenue Total Expenses Ending Fund Balance Linear (Total Revenue) General Fund Options & Opportunities
$3.5M Pension Obligated Bonds Proceeds
ARP- American Rescue Plan Act $1.7M
(Reserved for Broadband)
Sales Tax Measure 3/8 cent – Nov 2022 Ballot
(Workforce Housing)
Infrastructure Bill $550 billion.