Mi
d-Year Financial Report
As of F
ebruary 28, 2023
Int
roduction
This M
id-Year Financial Report provides an analysis of the City’s General Fund and Proprietary Fund revenues and expenditures for the first eight months of the 2022/23 fiscal year.
Management’s Overview
The
City’s budget for fiscal year 2022/23 was adopted by the City Council on June 21, 2022. The purpose of the mid-year financial report is to provide regular updates to the Council regarding revenue and expenditure trends to ensure the City Council has a strong understanding of the City’s current financial condition. The numbers in this report are based on the FY 2022/23 revenues and expenditures through February 28, 2023 . Due to the recent implementation of a new Enterprise Resource Planning System, the Finance Department is working through both regular journal entries and corrections, not all of which have been posted at the time of this report. A discussion of the significant budget items is presented below.
This Mid-Year Report includes revenue adjustments to reflect current economic conditions, Staffing Plan updates, and Capital Improvement Plan updates. It additionally includes $1.9 million of expenditure budget increases across all funds due to the labor agreements adopted during the fiscal year. Budget neutral Staffing Plan updates are the replacement of a Records Analyst position in the City Clerk’s Office with a Management Analyst I/II position, and the replacement of the Assistant Housing Manager with a Management Analyst I/II position. Two Limited- Term positions are being requested currently, with the hope to hire prior to June 30; City Manager’s Office has requested a Limited-Term Management Fellow, and Police has requested a Limited -Term Homeless Intervention Coordinator (grant - funded). Given the ever -increasing demands on the City’s Housing Team, two additional Senior Housing Specialist positions are being requested to handle the workload.
FY 2022/23 General Fund Budget
The
FY 2022/23 budget as originally adopted in June 2022 estimated revenues of $111.6 million to fund expenditures of $110.8 million. Budget adjustments and carryforwards in the first half of the fiscal year have updated operating revenues
ATTACHMENT 2
to
$112.0 million, and expenditures to $ 113.6 million (includes $ 2.7 million of budget carried forward from FY 2021/22).
The City’s Sales Tax consultants, HdL Companies, recommends a $0.9 million budget increase for state sales tax. Transient Occupancy Tax grew strongly over calendar year 2022, and the original budget for FY 2022/23 appears to be too low.
A budget increase of $3.0 million is recommended. Revenue budget increases are also recommended for Other Taxes ($ 0.2 million), Licenses and Permits ($0.2 million), and Charges for Services ($0.6 million). With the se strong revenue expectations, the $3.0 million of Excess ERAF revenues that were posted to the General Fund are no longer needed to balance the budget. It is recommended to remove these revenues from the General Fund and instead post them to the Non- Recurring General Fund, where Excess ERAF revenues are typically used for one- time projects.
The expenditure budget increases are primarily for the labor MOU’s which had higher increases than were assumed in the original budget. The City Manager’s Office adjustment includes $21,930 for estimated current year cost of the Limited- Term Management Fellow position. The Finance Department requests an additional $ 300,000 for the HdL contract and ongoing t emporary staffing. The General Government adjustment is to increase the budget for employee leave payouts and for additional transfers to reserves per fiscal policy. Public Works requested an additional $83,000 for the current year due to the labor rate change for the City’s street sweeping contract.
ATTACHMENT 2
M
ajor Revenues
F
Y 2022/23
Budget
(
as of 2/28/2023)
F
Y 2022/23
YTD Actual
(a
s of 2/28/2023)
%
to date
(Budget to
Actual)
F
Y 2021/22
YTD Actual
(a
s of
12/31/2021)
F
Y 21/22
Annual
Totals %
to date
Pr
oposed
Mid-Year
Adjustments
O
perating Revenues
P
roperty Tax 43.99 23.40 53% 20.65 41.33 50% - Sales Tax 21.30 11.52 54% 7.18 21.75 33% 0.92 Transient Occupancy Tax 28.03 17.31 62% 12.28 28.73 43% 3.00 Business License Tax 3.73 2.54 68% 1.59 4.04 39% - Other Taxes 2.46 1.07 43% 0.54 2.80 19% 0.24 Licenses and Permits 2.29 1.68 73% 1.32 3.02 44% 0.20 Charges for Services 5.69 2.02 35% 1.68 6.16 27% 0.51 Intergovernmental 0.95 0.73 77% 1.38 1.62 85% - Investment Earnings 0.22 0.07 32% (0.10) (9.67) 1% - Miscellaneous / Other Revenues 0.26 0.21 81% 0.17 0.26 64% - Transfers In 3.12 1.56 50% 1.51 3.01 50% - To
tal Operating Revenues 112.03 62.11 55% 48.19 103.06 47% 4.86 Non-Operating Revenues
E
xcess ERAF Above Baseline 3.00 3.00 100% 2.30 2.30 100% (3.00) To
tal Non-Operating Revenues 3.00 3.00 100% 2.30 2.30 100% (3.00) Total Revenues 115.03 65.11 57% 50.49 105.36 48% 1.86 Operating Expenditures
Ci
ty Council / City Clerk 1.60 0.92 57% 0.69 1.41 49% 0.02 City Manager 1.80 1.04 58% 0.68 1.54 44% 0.06 Finance 8.54 5.53 65% 3.37 7.30 46% 0.47 City Attorney 1.52 0.97 64% 0.57 1.27 45% 0.04 Human Resources 2.31 1.39 60% 0.77 1.59 49% 0.07 Community Development 5.41 2.89 54% 1.99 5.21 38% 0.12 G
eneral Government 10.61 3.25 31% 1.72 12.14 14% 0.28 I
ncluded in General Government:
Tr
ansfer to CIP Facilities Reserve 2.12 - 0% - 1.91 0% 0.04 Transfer to CIP General Reserve 1.06 - 0% - 0.96 0% 0.02 Transfer to General Fund Reserves 0.39 - 0% - - 0.12 P
olice Department 34.62 21.47 62% 16.65 33.00 50% 0.61 Fire Department 24.15 15.08 62% 11.75 23.15 51% 0.21 Public Works 13.91 6.24 45% 4.97 10.88 46% 0.30 Parks & Recreation 9.18 5.33 58% 3.51 7.85 45% 0.11 To
tal Operating Expenditures 113.63 64.13 56% 46.68 105.34 44% 2.30 Budgeted Net Position 1.40 (0.44)
G
eneral Fund Summary (in millions)
-
5.00 10.00
15.00 20.00
25.00 30.00
35.00 40.00
45.00 Propert
y Tax Sales Tax Transient
Occupancy Tax
Other Revenues
Op
erating Revenues: Budget to Actual
(in
millions)
FY 2022/23 Bud
get
(as of 2/28/2023)
FY 2022/23 YTD Actual
(as o
f 2/28/2023)
Exp
ected Actual based on 5-year
Trend
ATTACHMENT 2
Property T
ax
FY 20
22/23 Property Tax revenues are currently budgeted at $41.0 million. The City’s major source of property tax revenue to the General Fund is residential property (80.5%), followed by commercial property (14.7%) and industrial property (3.2%). Year-to-date property tax revenue appears low on the report, but review of revenues show that overall this revenue source is on track with the five- year historical trend, and we currently project that FY 2022/23 property tax revenue will match or exceed the budgeted amount. The real estate market has thrived during the pandemic, with both sale prices and sale volume climbing. The market is expected to slow due to current high mortgage rates.
Sales Tax
Sales
Tax revenues for FY 2022/23 are currently budgeted at $21.3 million. Sales tax is received in monthly advances from the California Department of Tax and Fee Administration (CDTFA) based on prior year actual revenues received, and lag two (2) months behind. Currently, our sales tax consultants, HdL Companies, anticipate that the City’s original budget is about $0.92 million lower than anticipated revenues, and a budget increase is recommended.
For July-September 2022 sales tax revenues were 4.2% higher than the same quarter in 2021. The three largest categories, making up 54.4% of total revenue, were Restaurants and Hotels, General Consumer Goods, and State and County Pools. The largest increases were in Fuel and Service Stations with a 16.5% increase, Buildings and Construction with a 7.9% increase, and State and County Pools with a 6.5% increase. Decreases were observed in Autos and Transportation (0.1% decrease) and Business and Industry (8.4%).
Transient Occupancy Tax
Tr
ansient Occupancy Tax (TOT) revenue was the hardest hit by the COVID -19 pandemic but rebounded last fiscal year to higher than pre -pandemic levels. The adopted budget for FY 2022/23 is $28.0 million. Collections for TOT lag in a similar fashion to Sales Tax, and the $ 17.31 million received as of February 28 roughly corresponds to July -December receipts. Current projections estimate that actual TOT revenue for the current fiscal year will be approximately $31.0 million, and a revenue budget increase of $3.0 million is recommended.
There were 2 8 hotels, 23 bed and breakfast establishments, 49 non-hosted and 45 hosted vacation rentals generating transient occupancy tax revenue within the City as of December 31.
Other Revenues
Business
License Tax is in line with the City’s 5-year trends.
Other Taxes appear low, but this is due to the timing of payment receipt.
ATTACHMENT 2
Licenses
and Permits revenues are trending higher than the 5-year average trend.
Charges for Services are trending low; the City has not yet booked the Dispatch revenue that is a major component of this category.
Intergovernmental revenues are high compared to the 5-year trend; the timing of these revenues can vary from year-to-year based on when the other governments disburse funds to the City, and the amount of CalOES reimbursement revenue the Fire Department receives.
Investment Earnings have only been booked for the first two months of FY 2022/23; this is something the Finance Department is currently working on as part of the transition to the new ERP System. A large negative mark -to-market adjustment was booked in the last fiscal year due to rapidly rising i nterest rates; this unrealized loss will likely be reversed at the end of the current fiscal year if the City’s investment firm is able to maximize returns.
Miscellaneous Revenues include Rents and Royalties, as well as Contributions/Donations from Private Sources. This category is currently trending higher than the 5-year average.
Non-Operating Revenues for the current year are the $3.0 million of additional Excess ERAF budgeted to the General Fund to balance the budget. Given the strong growth of TOT, a budget amendment to move $1.0 million back to the Non- Recurring General Fund is recommended.
Expenditures
As
of February 28 , 20 23, all departments were operating within 66% of their approved budgets.
The following table provides the expenditure budget and actual spent to date for each department through February 28, 2023:
E
xpenditures by Department
Bu
dget
2 /28/2023
$ in millions
Ac
tual
2 /28/2023
$ in millions %
City
Council / City Clerk 1.60 0.92 57% City Manager 1.80 1.04 58% Finance 8.54 5.53 65%
City Attorney 1.52 0.97 64% Human Resources 2.31 1.39 60% Community Development 5.41 2.89 54% General Government 10.61 3.25 31% Police Department 34.62 21.47 62% Fire Department 24.15 15.08 62% Public Works 13.91 8.43 61%
Parks & Recreation 9.18 5.33 58% T
otal Expenditures 113.63 66.32 58%
ATTACHMENT 2
Depart
ments request additional funding for this fiscal year to meet needs.
Requests included in this report for the General Fund total $2,302,280:
$1,618,970 for Labor MOUs
$300,000 for Finance Department contract with HdL Companies $21,930 for a Limited-Term Management Fellow for the City Manager’s Office (2-year term from time of hire)
$100,000 for Employee Leave Payouts
$83,000 for Street Sweeping Contract (Public Works)
$178,380 for increased contributions to the City’s reserves per fiscal policy
Non-Recurring General Fund
Excess ERAF w
as budgeted in the General Fund to balance the FY 2022/23 budget; at this ti
me $1.0 million of the original $3.0 million can be returned to the Non-Recurr
ing General Fund for future appropriation. The City has received a $125,000 gr
ant for a Limited-Term Housing Intervention Coordinator, which will incr
ease both revenues and expenditures by this amount. The Fire Department’s HM
P Grant is now closed, and $8,959.51 of revenue budget needs to be eliminated. Ad
ditionally, one of the two Senior Housing Specialist positions reque
sted by Housing will be 40% funded by dollars in the Non-Recurring Gene
ral Fund.
General Fund Reserves
In
accordance with the City’s Fiscal Policy, the City maintains an Operating Reserve of 5%, an Emergency Reserve of 14% and a Contingency Reserve of 1% FY
2022/23
Budget
(
as of 12/31/2022)
FY
2022/23
YTD Actual
(a
s of
12/31/2022)
%
to date
(Budget to
Actual)
F
Y 2021/22
YTD Actual
(a
s of
12/31/2021)
F
Y 21/22
Annual
Totals %
to date
Propose
d
Mid-Year
Adjustments
Beginning Fund Balance 6.48 6.48
N
on-Recurring Revenues
Property T
ax (Excess ERAF) 1.50 2.09 140% 0.40 0.77 52% 1.00 Sales Tax - 0.02 0% 0.03 0.03 0% Licenses and Permits 0.40 0.05 11% 0.12 0.16 73% Charges for Services 0.81 0.33 40% 1.00 1.21 82% Intergovernmental 4.46 0.83 19% 0.29 0.91 32% 0.12 Investment Earnings 0.11 0.01 0% 0.06 0.01 465% Miscellaneous / Other Revenues 0.28 0.28 0% 0.02 0.17 0% Transfers In 0.02 - n/a - 1.29 0% T
otal Non-Recurring Revenues 7.57 3.60 48% 1.92 4.55 42% 1.12 Non-Recurring Expenditures
Sal
aries, Wages & Benefits 0.28 0.22 79% 0.36 0.70 52% 0.14 Services 7.02 1.48 21% 0.55 1.98 28% Materials and Supplies 0.75 0.06 8% 0.05 0.09 50% Capital Outlay 1.80 - 0% 0.23 - n/a Internal Services 0.01 0.01 58% - 0.01 0% Transfers Out 0.55 0.22 40% 1.31 1.37 96% T
otal Non-Recurring Expenditures 10.41 1.98 19% 2.50 4.15 60% 0.14 Ne
t Impact of Non Recurring (2.83) 1.62
Projected Ending Fund Balance 3.64
N
on-Recurring General Fund Summary (in millions)
ATTACHMENT 2
of
the annual General Fund Operating Budget. The CIP Facilities Reserve receives an annual transfer equal to 2% of the General Fund Operating Budget, and the CIP General Fund Reserve a n annual transfer of 1% of the General Fund Operating Budget. The increases to the General Fund Operating Budget requested in this report will increase the required contributions for the year.
Proprietary
Funds
In
addition to the General Fund, the Mid-Year Financial Report also provides a snapshot of the City’s Proprietary Funds. Proprietary funds are those funds in which the City charges a fee to customers to recover the cost of providing the service. These funds are made up of Enterprise Funds and Internal Service Funds.
Both types of funds are presented separately below, along with summary information for each of the individual funds within each category.
Enterprise Funds
Ente
rprise Funds are those funds that provide goods or services to the public for a fee that makes the entity self-supporting. Napa’s Enterprise Funds include Solid Waste & Recycling and Water. A listing of these funds and summary of the activity from July through February follows below:
Solid Waste & Recycling Fund
The
Solid Waste & Recycling (SWR) Fund is responsible for the collection, processing, public education and long -term planning related to solid waste materials generated in the City of Napa. Beyond the safe and cost -effective handling of solid waste materials, the fund’s primary mission is to maximize the diversion of solid waste materials from landfill disposal in order to meet or exceed State mandates. A summary of the SWR Fund activity through February 28, 2023 is provided below:
FY
2022/23
Beginning
Balance
Planned
Usage
Budgeted
Transfers In
Mid-Year
Additional
Transfers In
FY 2022/23
Ending
Balance
Emergency Reserve 15.40 - - - 15.40 Operating Reserve 4.94 - 0.33 0.10 5.37 Contingency Reserve 0.99 - 0.07 0.02 1.07 CIP Facilities Reserve 12.49 (4.53) 2.12 0.04 10.11 CIP General Fund Projects Reserve 9.68 (9.92) 1.06 0.02 0.84 Total Reserves 43.49 (14.45) 3.57 0.18 32.79 Reserves
(in millions)
ATTACHMENT 2
FY
2022/23
Amended
Budget
(a
s of 2/28/2023)
F
Y 2022/23
Y
TD Actual
(a
s of
2/28/2023)
%
to date
(Budget to
Actual)
Prop
osed
Mid-Year
Adjustments
R
evenues
Refuse Collection Charges 29.15 17.64 61% - MDF Gate Fees 4.42 2.89 65% - Material Sales 9.98 5.59 56% - Other Revenues 0.23 0.08 34% - Total Revenues 43.79 26.20 60% - Expenditures
Salaries and Benefits 1.58 0.96 60% 0.03 Contractor Service 30.33 20.96 69% - Transfer Station Disposal Fees 3.74 2.00 53% - MDF Facility Materials 3.80 1.22 32% - Debt Service 0.87 0.86 99% - Other Materials, Supplies & Services 4.01 1.55 39% - Administrative Support 0.66 0.33 50% - Transfer Out to Street Resurfacing 1.15 - 0% - Transfer Out to SWR CIP Fund 0.73 - 0% - Transfer Out to SWR Non-Recurring Fund 0.60 - 0% - Total Expenditures 47.48 27.87 59% 0.03 Fund Balance for Carryforwards 3.80
Surplus / (Deficit) 0.10 (1.67)
So
lid Waste & Recycling Operating Fund
FY
2022/23
Amended
Budget
(a
s of 2/28/2023)
F
Y 2022/23
Y
TD Actual
(a
s of
2/28/2023)
%
to date
(Budget to
Actual)
Prop
osed
Mid-Year
Adjustments
R
evenues
Transfer In from SWR Operating Fund 0.73 - 0% - Total Revenues 0.73 - 0% - Expenditures
Capital Projects 0.87 - 0% - Total Expenditures 0.87 - 0% - Fund Balance for Carryforwards 0.39
Surplus / (Deficit) 0.25 -
So
lid Waste & Recycling CIP Fund
ATTACHMENT 2
Overall
operating revenues are better than expected. Refuse collection charges are ahead of the adopted budget given that they are at 61% of adopted FY 2022/23 budget. Revenue from Gate Fees is tracking with projected budget amounts.
Materials sales revenue is slightly less than adopted budget for the first half of FY 2022/23, but this is expected to resolve itself in the last half of FY 2022/23 when some past due CRV payments come in from the buyer of MDF shipped glass.
Operating expenditures are at 59% of the adopted budget, but also included $3.5 million in carryover expenses from previous fiscal years associated with the 2022 Contract Amendment with Napa Recycling & Waste Services (NRWS) which were paid in October of 2022. The remainder of FY 2022/23 will see higher contractual expenses associated with contractual inflation escalators as well as SB 1383 program implementation costs and pending SB 1383 contract amendment with NRWS. The S alaries and Benefits increase will accou nt for the City’ s MOU changes this fiscal year.
FY
2022/23
Amended
Budget
(a
s of 2/28/2023)
F
Y 2022/23
Y
TD Actual
(a
s of
2/28/2023)
%
to date
(Budget to
Actual)
Prop
osed
Mid-Year
Adjustments
R
evenues
Organics Grant 1.50 - 0% - Transfer In from SWR Operating Fund 0.60 - 0% - Total Revenues 2.11 - 0% - Expenditures
Organics Grant 1.50 - 0% - Other Expenditures 0.65 0.43 66% - Total Expenditures 2.16 0.43 20% - Surplus / (Deficit) (0.05) (0.43)
So
lid Waste & Recycling Non-Recurring Fund
ATTACHMENT 2
Wa
ter Fund
The
Water Fund is re sponsible for the operation, maintenance and improvement of the municipal water system serving the City and adjacent areas. The Fund’s mission is to provide an uninterrupted supply of high quality and low-cost water to the community for consumption, sanitary needs, irrigation, and fire protection. The Water Fund’s Administration, Engineering, Treatment, and Distribution sections accomplish this mission by delivering over 13,200 acre-feet (4.3 billion gallons) of water meeting State and Federal drinking water regulations, investing in capital improvements, planning for long -term water supply needs, responding to emergency repairs, and maintaining a proactive water conservation program. A summary of the Water Fund activity through February 28, 2023 is provided below:
F
Y 2022/23
Amended
Budget
(
as of 2/28/2023)
FY
2022/23
YTD Actual
(a
s of 2/28/2023)
%
to date
(Budget to
Actual)
Pr
oposed
Mid-Year
Adjustments
R
evenues
Charges for Services 35.07 20.74 59% - Other Revenues 0.73 0.19 26% - Total Revenues 35.80 20.93 58% - Expenditures
Salaries and Benefits 11.82 6.33 54% 0.21 Services, Materials and Supplies 9.06 4.18 46% - NBA Water Supply 8.28 3.10 37% 2.31 Administrative Support 1.91 0.95 50% - Water Bond Debt Service 3.33 0.58 18% - Transfer Out to Water CIP Fund 5.09 4.60 90% - Transfer Out to Water Non-Recurring Fund - - n/a - Transfer Out to Fleet 0.06 0.04 71% - Total Expenditures 39.53 19.78 50% 2.52 Surplus / (Deficit) (3.74) 1.15
W
ater Operating Fund
ATTACHMENT 2
Operatin
g revenue is tracking similar to last year at 59% of budget. Operating expenditures are tracking 50% of budget. As is typical for Mid-Year, Services, Materials and Supplies are tracking similar to last year since expenditure patterns do not follow the calendar year. The Salaries and Benefits increase will account for the City’s MOU changes this fiscal year. A budget increase of $2.3 million is recommended for NBA Water Supply expenses; there is sufficient fund balance to support the additional expenditure budget. In the Non-Recurring Fund a FY
2022/23
Amended
Budget
(a
s of 2/28/2023)
F
Y 2022/23
YTD Actual
(
as of 2/28/2023)
%
to date
(Budget to
Actual)
Pr
oposed
Mid-Year
Adjustments
R
evenues
Capital Projects Distribution - - n/a - Capital Projects Supply 0.10 - 0% - Capital Projects Transmission 0.18 - 0% - Capital Projects Treatment - - n/a - Capacity Fees 1.40 0.82 59% - Transfer In from Water Operating Fund 5.09 4.60 90% - Other Revenues - - n/a - Total Revenues 6.77 5.42 80% - Expenditures
Capital Projects Administration 0.14 0.02 13% - Capital Projects Distribution 9.33 0.49 5% - Capital Projects Supply 2.18 0.03 1% - Capital Projects Transmission 5.18 0.42 8% - Capital Projects Treatment 12.84 0.00 0% - Total Expenditures 29.68 0.96 3% - Fund Balance for Carryforwards 19.37
Surplus / (Deficit) (3.54) 4.46
W
ater CIP Fund
FY
2022/23
Amended
Budget
(a
s of 2/28/2023)
F
Y 2022/23
YTD Actual
(
as of 2/28/2023)
%
to date
(Budget to
Actual)
Pr
oposed
Mid-Year
Adjustments
R
evenues
SWP Refund - Reach3B Allocn 0.72 0.05 6% - Other Revenues - - n/a - 2014 Earthquake Revenues (FEMA/CalOES) 1.17 - 0% - 2017 Fire Revenues (FEMA/CalOES) 5.75 - 0% - Total Revenues 7.64 0.05 1% - Expenditures
2014 Earthquake Projects 1.63 - 0% - 2017 Fire Projects 8.07 0.06 1% - Administrative Support 0.01 0.00 50% - Other Expenditures 2.41 0.20 8% 0.06 Total Expenditures 12.12 0.26 2% 0.06 Fund Balance for Carryforwards 8.78
Surplus / (Deficit) 4.30 (0.21)
W
ater Non-Recurring Fund
ATTACHMENT 2
budget incr
ease of $62,500 is requested for Dry Year Water; again there is sufficient fund balance to support the increased expenditures.
Most capital improvement projects (CIP) are in the planning and design phase therefore actual expenditures are just 2% of budgeted costs for design and construction. Detracting from planned capital projects, staff have focused on disaster recovery projects through FEMA/OES from the 2014 South Napa Earthquake and the 2017 Napa Sonoma Fire complex. Expenditures of $1.64 million for the final Freeway Crossing under Highway 29 damaged by the Earthquake are impeded by easements and permitting clearances. The remaining $2.23 million associated with the 2017 Fires will complete the rebuild of two pump stations burned in the Silverado Area. Construction will be complete in Q4. Disaster recovery projects are expected to be reimbursed 93.75% of actual costs incurred at a rate of 75% from FEMA and 18.75% from the California Governor’s Office of Emergency Services (OES).
ATTACHMENT 2
Int
ernal Service Funds
Inte
rnal Service Funds are used to account for the financing of goods and services provided by one department to other departments of the city.
Inte
rnal Service Funds
FY 2022/23
Budget
(a
s of
2/28/2023)
FY
2022/23
YTD Actual
(a
s of
2/28/2023)
%
to date
(a
s of
2/28/2023)
FY
2021/22
Actual
(a
s of
12/31/2021)
% t
o date
(a
s of
12/31/2021)
Pr
oposed
Mid-Year
Adjustments
Fleet Management Fund
Available Capital [1] 6.66 6.66 4.09 Revenues 5.10 3.23 63% 2.53 58% Expenditures 10.10 1.69 17% 1.15 24% 0.02 Fund Balance Addition/(Reduction) (5.00) 1.55 1.38 Projected Ending Available Balance 1.66
Fleet - Fire Apparatus Replacement Fund
Available Capital [1] 3.97 3.97 2.02 Revenues 0.64 0.36 56% 0.23 54% Expenditures 0.50 0.00 0% 2.43 97% Fund Balance Addition/(Reduction) 0.15 0.36 (2.20) Projected Ending Available Balance 4.11
IT Replacement
Available Capital [1] 0.32 0.32 0.12 Revenues 0.30 0.12 41% 0.15 51% Expenditures 0.29 0.06 19% 0.05 17% Fund Balance Addition/(Reduction) 0.01 0.07 0.10 Projected Ending Available Balance 0.32
Risk Management - General Liability
Available Capital [1] (0.11) (0.11) 1.59 Revenues 23.66 20.58 87% 4.74 50% Expenditures 25.88 21.96 85% 4.59 49% 0.00 Fund Balance Addition/(Reduction) (2.23) (1.38) 0.15 Projected Ending Available Balance (2.34)
Workers Compensation
Available Capital [1] 3.93 3.93 1.59 Revenues 4.75 2.88 61% 4.74 50% Expenditures 4.86 2.31 48% 4.59 49% 0.01 Fund Balance Addition/(Reduction) (0.11) 0.57 0.15 Projected Ending Available Balance 3.82
Unemployment Insurance
Available Capital [1] 0.29 0.29 1.59 Revenues 0.13 0.09 65% 4.74 50% Expenditures 0.10 0.03 29% 4.59 49% Fund Balance Addition/(Reduction) 0.03 0.06 0.15 Projected Ending Available Balance 0.32
Post Employment Benefits (PEB)
Available Capital [1] 7.54 7.54 2.38 Revenues 1.24 0.60 48% 0.52 44% Expenditures 2.00 1.35 67% 0.56 45% Fund Balance Addition/(Reduction) (0.76) (0.75) (0.04) Projected Ending Available Balance 6.79
Equipment Replacement
Available Capital [1] 0.75 0.75 0.49 Revenues 0.16 0.00 1% 0.08 50% Expenditures 0.05 0.00 0% 0.00 66% Fund Balance Addition/(Reduction) 0.11 0.00 0.08 Projected Ending Available Balance 0.86
[
1] Available Capital = Fund Balance available for Appropriation
ATTACHMENT 2
W
hat We Are Watching
Nationally:
The
Federal Reserve Board is continuing to attempt to mitigate high inflation rates with further interest rate increase s. On March 22 the Fed announced another 25 basis point interest rate hike, bringing the benchmark rate to the highest it’s been since 2007. The current federal funds rate is no w 4.75 %-5%, as compared to
0.25%-0.5% in March 2022.
Nationwide, unemployment was at 3.6% for February 2023. Unemployment rates continue to be higher for Black (5.7 %) and Hispanic or Latino (5.3%) people, as well as teenagers ( 11.1%) and people without a high school diploma (5.8%) per the U.S. Bureau of Labor Statistics.
Negative GDP in the first two quarter s of calendar year 2022 recovred in the second half to show positive growth. The second estimate for the fourth quarter of 2022 shows an increase of 2.7%, coming on the heels of the third quarter increase of 3.2%. The lower increase in the fourth quarter is largely attribu table to decelerated spending by consumers and state and local governments, as well as a downturn in exports and nonresidential fixed investments.
In February, the 12 -month CPI change was 6% ,with consumer food prices increasing by 9.5% from February 2022 to February 2023. Shelter prices rose
8.1% year over year.
State:
Cali
fornia prices have grown by 16 % overall since 2020, with inflation shifting to food and other serv ices, which inclu des shelter. The unemployment rate as of January was 4.2% and has remained largely stable since June 2022.
The Legislative Analyst’s Office ’s currently anticipates that the big three tax revenues for California (personal income, corporation, and sales) will end the fiscal year about $5 billion under budget. Inflation-adjusted retail sales have remained flat over the last 12 months.
Bay Area home prices continue to sell for record prices, however, the market is leveling out. California homes sales decrease by 47.7% from November 2021 to November 2022. Bay Area sales decreased by 43% within the same period. In December 2022, Bay Area m edian prices were $1.359 million at the median, up just 0.3% from December 2021. As of the third quarter of 2022, only 18% of California households could afford to buy a median-priced home, down from 24% in Q3 2021.
Gas prices were extremely volatile over the last 12 months, but the average price in February 2023 was just 1.4% lower than February 2022. Average gas price in
ATTACHMENT 2
February
2023 was $4.591/gallon, and prices have been over $4.00/gallon since April 2021.
Local Economic Condition:
The
City relies on the TOT and sales tax revenue generated by visitors to the area.
TOT revenue has continued to show strong recovery in 2022 and will continue to be closely monitored. Napa County hotels have regained pre -pandemic level of prices for hotel rooms, and occupancy rates were close to pre-pandemic levels in 2022. 2023 is likely to be a year of slower grow th of hotel revenues, but of continued strength for the city economy.
In Nap
a County, the median single-family home sold price in February 2023 was $830,000 – lower than February 2022 ’s median hom e price of $1,005,000 but substantially higher than the pre -pandemic price of $659,500 in February 2020 .
Housing affordability in Napa County remains low, with just 16% of households that can afford to buy a median-priced single family home, versus 24% in Q4 2022.
Napa Co
unty’s unemployment rate continues to be lower than California’s overall rate and was 3.1% for February 2023 after seasonal adjustments. This is a marked improvement from the 4.8% unemployment rate experienced in February 2022 and reflects a continued strong labor market in Napa County and the City of Napa.
Mid-Year Appropriation Adjustments
In accorda
nce with Fiscal Policy 5.b.iii, adopted by City Council on June 21, 2022, the City Manager is authorized to increase appropriations for specific purposes, as long as the expenditure appropriations do not exceed the amount of the donation, and the adjustment is reported to the City Council as part of the next regular financial report.
B
udget Adjustment Summary (Fund / Department /
P
urpose) R
evenues E
xpenditures
Fu
nd 100 / Fire / Partner Reimbursement
17 3,909.67
17 3,909.67
Fu
nd 100 / Fire / CalOES Reimbursement
23 4,179.38
23 4,179.38
Fu
nd 100 / Parks and Recreation / Higher Revenue
than Expected
25 ,000.00
25 ,000.00
Fu
nd 100 / Parks and Recreation / Donations
5,00
0.00 5,00
0.00 T
otal Operating General Fund
43 8,089.05
43 8,089.05
ATTACHMENT 2
B
udget Adjustment Summary (Fund / Department /
P
urpose) R
evenues E
xpenditures
Fu
nd 101 / Fire / Grants and Donations
10 5,184.00
10 5,184.00
Fu
nd 101 / Parks and Recreation / Grants and
Donations
20 0,000.00
20 0,000.00
Fu
nd 101 / General Government / Grants and
Donations
20 0,000.00
20 0,000.00
T
otal Non-R
ecurring General Fund
50 5,184.00
50 5,184.00
B
udget Adjustment Summary (Fund / Department /
P
urpose) R
evenues E
xpenditures
Fu
nd 519 / Utilities / Solid Waste & Recycling Grant
1,50
4,988.00
1,50
4,988.00
Fu
nd 640 / City Manager / Reimbursements
17 2,195.93
17 2,195.93
T
otal Other Funds
1,67
7,183.93
1,67
7,183.93
Recommend
ation
Receive
and file the Mid-Year Financial Report and approve a resolution to update the City’s Staffing Plan, CIP P rojects, and approve Council Budget Amendment No. 6P10. This budget amendment will increase revenues based on current projections and increase expenditures based on both labor MOU’s and department requests.
Staffing Plan Changes:
City Clerk: Delete 1 Records Analyst position; Add 1 Management Analyst I/II position.
City Manager: Add 1 Limited-Term Management Fellow position. Housing: Delete 1 Assistant Housing Manager position; Add 1 Management Analyst I/II position. Add 2 Senior Housing Specialist positions. Police: Add 1 Limited -Term Homeless Intervention Coordinator (grant- funded, in conjunction with Housing)
CIP Project Updates:
Swap funding sources for two projects. Currently the Napa Central Dispatch Alternative Project (33FC23PD01) is funded with $1.5 million of ARPA dollars and the Hwy 29 Class 1 Bikeway Project (33BP12PW01) is funded with $1.5 million of dollars from the CIP General Reserve. This action will fund the Bikeway Project with ARPA dollars and the Dispatch Alternative Project with CIP General Reserve dollars. This switch will allow the City to
ATTACHMENT 2
spend
the ARPA dollars within the timing deadlines set by the Federal Government.
Create new project Yajome Sidewalk Repair (33SW23PW01) with a budget of $85,000 of Sidewalk Program dollars.
Add $300,000 to the Coombs Street Project (33ST20PW09) from the Measure T Fund. When the 5 -year CIP Plan is adopted with the next budget, it will reflect a reduction of $300,000 from the project in FY 2024/25 as compared to the current CIP plan. Shifting this budget forward two years allows the City to continue forward motion on the project. Create new project Street Preventative Maintenance (33ST23PW06) with a budget of $1,000,000 of Measure T dollars.
Create new project City Facility Planning (33FC23CM01) with an initial budget of $300,000 of CIP Facilities Reserve dollars.
Budget Amendments:
Fu
nd Fu
nd Name
R
evenue
B
udget
Increa
se /
(De
crease)
E
xpenditure
B
udget
Increa
se /
(De
crease)
10 0 Gene
ral
3,86
2,000.00
2,30
2,280.00
E
xcess ERAF to Non-R
ecurring
(1,000
,000.00)
R
evenue Adjustments for Current Trends
4,86
2,000.00
La
bor MOU's
1,61
8,970.00
LT
Management Fellow
21 ,930.00
Le
ave Payouts
10 0,000.00
Fi
nance Contracts
30 0,000.00
S
treet Sweeping
83 ,000.00
Increase
s to Reserves
17 8,380.00
10 1 Gene
ral Non-Recurring
1,11
6,040.49
13 7,220.00
E
xcess ERAF from General Fund
1,00
0,000.00
LT
Homeless Intervention Coordinator
12 5,000.00
12 5,000.00
H
MP Grant Closeout
(8,959
.51)
S
enior Housing Specialist
12 ,220.00
11 0 Gene
ral ARPA
-
-
ATTACHMENT 2
Fu
nd Fu
nd Name
R
evenue
B
udget
Increa
se /
(De
crease)
E
xpenditure
B
udget
Increa
se /
(De
crease)
33 BP12PW01 Hwy 29 Bikeway
1,50
0,000.00
33 FC23PD01 Alternate Dispatch
(1,500
,000.00)
20 5 Meas
ure T Road Maint
-
1,30
0,000.00
33 ST20PW09 Coombs St
30 0,000.00
33 ST23PW06 Street Prev Maint
1,00
0,000.00
21 2 D
IF Affordable Housing
-
6,93
0.00 La
bor MOU's
3,87
0.00 S
enior Housing Specialist
3,06
0.00 23
6 P
arking
-
4,94
0.00 La
bor MOU's
4,94
0.00 25
5 Meas
ure F 1% TOT Aff Hsg
35 8,000.00
93 0.00
R
evenue Adjustments for Current Trends
35 8,000.00
La
bor MOU's
93 0.00
26 0 C
DBG
-
11 ,600.00
La
bor MOU's
5,47
0.00 S
enior Housing Specialist
6,13
0.00 27
0 H
OME Program
-
1,08
0.00 La
bor MOU's
1,08
0.00 27
5 C
alHome Program
-
1,06
0.00 La
bor MOU's
1,06
0.00 28
5 P
erm Local Housing Allocation
-
4,03
0.00 La
bor MOU's
97 0.00
S
enior Housing Specialist
3,06
0.00
ATTACHMENT 2
Fu
nd Fu
nd Name
R
evenue
B
udget
Increa
se /
(De
crease)
E
xpenditure
B
udget
Increa
se /
(De
crease)
30 0 C
ity Capital Projects
1,65
9,460.00
2,52
7,570.00
La
bor MOU's
42 ,570.00
33 BP12PW01 Hwy 29 Bikeway
(1,500
,000.00)
33 FC23PD01 Alternate Dispatch
1,50
0,000.00
33 SW23PW01 Yajome Sidewalk
85 ,000.00
33 ST20PW09 Coombs St
30 0,000.00
30 0,000.00
33 ST23PW06 St Prev Maint
1,00
0,000.00
1,00
0,000.00
33 FC23CM01 City Facility Plan
30 0,000.00
60 0,000.00
A
dditional Transfers Into CIP Reserves
51 ,960.00
40 8 A
D Lake Park
-
25 0,000.00
C
orrect Funding Source for
33 MS23PW01
25 0,000.00
41 9 A
D Tierra Grove
-
(250
,000.00)
C
orrect Funding Source for
33 MS23PW01
(250
,000.00)
51 0 Mate
rials Diverson-Operating
-
32 ,840.00
La
bor MOU's
32 ,840.00
53 0 Wate
r Utility-Operating
-
2,51
8,080.00
La
bor MOU's
20 7,960.00
S
tate Water Project
2,31
0,120.00
53 9 Wate
r Utility-NR
-
62 ,500.00
D
ry Year Water
62 ,500.00
61 0 Fl
eet
-
18 ,670.00
La
bor MOU's
18 ,670.00
64 0 Gene
ral Liability
-
2,76
0.00
ATTACHMENT 2
Fu
nd Fu
nd Name
R
evenue
B
udget
Increa
se /
(De
crease)
E
xpenditure
B
udget
Increa
se /
(De
crease)
La
bor MOU's
2,76
0.00 64
1 Worke
rs Compensation
-
9,00
0.00 La
bor MOU's
9,00
0.00 84
1 La
urel Manor
-
2,81
0.00 La
bor MOU's
2,81
0.00 84
2 S
eminary Street
-
58 0.00
La
bor MOU's
58 0.00
84 3 S
ection 8
-
50 ,000.00
La
bor MOU's
19 ,450.00
S
enior Housing Specialist
30 ,550.00
84 4 20
% Low/Mod Income
-
28 0.00
La
bor MOU's
28 0.00
84 6 Lo
cal Housing
-
16 ,810.00
La
bor MOU's
10 ,680.00
S
enior Housing Specialist
6,13
0.00 84
7 C
ontinuum of Care Program
-
25 0.00
La
bor MOU's
25 0.00
T
otal
6,99
5,500.49
9,01
2,220.00
ATTACHMENT 2