February 6, 2024
Nicole Gonzales, Director of Finance
General Fund
Long Range Financial Model Update
History and
Background
Engaged with Management
Partner (now Baker Tilly) to
develop a robust General
Fund Long Range Financial
Model (Model) and Fiscal
Sustainability Strategies
Jan. 2017
City’s first ever, fiscal
sustainability workshop,
offering strategies and
options for revenue
generation, cost shifting,
expenditure controls, and
changes to service provisions.
Oct. 2017
Update the Model by
reviewing both revenue and
expenditure assumptions to
ensure congruence with
current economic trends
2023
Today – Sustainability update
to the Model and Interactive
Model Exercise
2024
General Fund Long Range Financial Model
Update
• What is the Model?
• The Model is a dynamic and interactive tool that provides staff with the ability to forecast both revenue and expenditures based on historical, current, and expected economic trends.
• The Model also can run hypothetical scenarios in real time to forecast both short-term and long-term fiscal implications.
Overview of General Fund
Long Range Forecast
FY 2024 Adopted General Fund
Budget Overview
Revenue
Property Tax
34%
Sales Tax
23%
Utility Users Tax
9%
Transient
Occupancy Tax
1%
Other Taxes
3%
Property
Transfer Tax
9%
Franchises
6%
Permits & Fees
7%
Other Revenue
6%
Transfers In
2%
Expenditures
Personnel
78%
Maintenance &
Utilities
1%
Services &
Supplies
5%
Internal Service
Charges
10%
Transfers Out-
Debt
1%
Transfers Out-
CIP
1%
Transfers Out-
Liability/Other
4%
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Budget Reserves - Surplus/(Use) ($4.4) ($2.5) ($3.0) $0.3 ($3.3) ($6.2) $4.5 Actual Reserves - Surplus/(Use) ($0.4) $3.3 $5.2 ($5.2) $5.7 $2.3 $4.9 ($4.4)
($2.5)
($3.0)
$0.3
($3.3)
($6.2)
$4.5
($0.4)
$3.3
$5.2
($5.2)
$5.7
$2.3
$4.9
-$8.0
-$6.0
-$4.0
-$2.0
$0.0
$2.0
$4.0
$6.0
$8.0
Budget Reserves - Surplus/(Use) Actual Reserves - Surplus/(Use) General Fund Reserves: Budget vs. Actuals
General Fund 5-Year Forecast
GENERAL FUND FORECAST Adopted Forecast Forecast Forecast Forecast Forecast in thousands FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Revenues $199,883 $210,508 $215,772 $217,540 $221,096 $228,187 Expenditures $204,978 $214,216 $220,363 $226,720 $230,939 $239,093 Net Change in Reserve - Surplus / (Shortfall) ($5,095) ($3,708) ($4,590) ($9,180) ($9,843) ($10,906) Beginning Balance $42,723 $37,628 $33,920 $29,330 $20,150 $10,307 Net Change in Reserve - Surplus / (Shortfall) ($5,095) ($3,708) ($4,590) ($9,180) ($9,843) ($10,906) Ending Balance $37,628 $33,920 $29,330 $20,150 $10,307 ($599) Target to maintain 20% GF Reserves of Expenditures $40,996 $42,843 $44,073 $45,344 $46,188 $47,819 General Fund Reserve Level as % of Total Expenditures 18.4% 15.8% 13.3% 8.9% 4.5% (0.3%) Amount Above or (Below) Target 20% ($3,367) ($8,923) ($14,743) ($25,194) ($35,881) ($48,418) Percentage Above or (Below) Target 20% (8.2%) (20.8%) (33.5%) (55.6%) (77.7%) (101.3%) General Fund Model
Assumptions
Revenue Assumptions
General Property Tax Sales Tax Utility User Tax
(UUT)
Other Taxes Licenses/ Permits/
Fees
Cost Allocation
Transfer-In Intergovernmental
Interest Other Revenue
Expenditures Assumptions
General Staffing Salary Merit/Turnover
PERS Employee
Contribution
PERS Cost Share
Contribution From
Labor Groups
Medical Workers
Compensation
Retiree Medical Maintenance &
Utilities Services & Supplies Internal Service Fees
Run Scenarios: Better Understand Fiscal
Impacts
Interactive Budget Model
Revenue & Expenditure Scenarios
TOT Increase to
12%
Increase of
approximately $1.0M
annually
TOT Increase to
14%
Increase of
approximately $1.5M
annually
5% Reduction in
Variable
Expenditures
Decrease of $2.1M
annually
Cost Allocation
Plan Update
Increase of
approximately $1.0M
annually
1% COLA
Increase
Increase of
approximately $1.0M
annually
Questions & Discussion
?
!
Next Steps
Next Steps
March 2024
FY 2024 Mid-year Review
And General Fund Long
Range Financial Model
March/April 2024
Presentation By Economist
(pending availability)
May 2024
FY 2025 Saturday Budget
Work Session