SUPPLEMENTAL REPORTS & COMMUNICATIONS
Office of the City Clerk
City Council of the City of Napa Regular Meeting
January 21, 2025
FOR THE CITY COUNCIL OF THE CITY OF NAPA
AFTERNOON SESSION:
SUBMITTED PRIOR TO THE CITY COUNCIL MEETING
3. GENERAL PUBLIC COMMENT:
• Email from Jarvis Peay received on January 20, 2025.
5. ADMINISTRATIVE REPORTS:
5.C 2025 Long-Term Financial Forecast Update
• Presentation from Staff
From: King Jarvis
To: Clerk; Lee Reynolds; Scott Sedgley
Subject: Public Comment Send To All Council Members
Date: Monday, January 20, 2025 7:54:24 PM
[EXTERNAL]
The Napa City Council is being left in the dark. They are not even allowed to see what I have been able to see regarding BWC, body worn camera footage of a Napa police officer entering my home without announcing or knocking. They, and the residents of Napa and the world, are being denied the opportunity to review audio/video evidence of one of it's fire captains invading my privacy by revealing to several people on tape and in front of my door, my personal specific and private diagnosis.
The incidents regarding all of that, from 12/22/2024,
and from a previous occasion in September of 2024, were reported to the mayor and Steve Potter.
I had a meeting with the mayor regarding the September incident, and a meeting with Potter on 12/26/24 regarding the 12/22/2024 incident. I have filed complaints, and the Clerk of the City of Napa is for the first time in thirty years not responding to my emails. We demand answers, and to be treated fairly. The policeman is , and the fire captain is
.
Long-Term
Financial
Forecast
January 21, 2025
5C
Roadmap
• Introduction
• Big Picture
• Historical
Comparison
• Preliminary Long-
Term Findings
– Key Assumptions
– Results
• Measure G
The Big Picture
• Revenue growth rates beginning to
plateau
• Expenditures have continued to increase
and are projected to be higher than
revenues in future years
– Inflation (Services & Supplies)
– Labor & Pension Costs
– Self-Funded Insurances
General Fund Financial Status
Operating Revenue only shown; does not include one-time revenues used to balance the General Fund in FY20 through FY25
FY25 Projected Revenue: $126.5 M
50 60
70 80
90 100
110
120
130
140
FY20 Actual FY21 Actual FY22 Actual FY23 Actual FY24 *Actual FY25 Budget Millions
Operating Revenue Expenditures
Financial Status Update
FY 2023/24
• Property and Sales Tax continues to grow
at a more moderate rate
• Transient Occupancy Tax slight decline
• Inflation still a factor & labor costs
continue to rise
• One-Time dollars have been used since
FY20 to balance the General Fund
budget
• General Fund Reserves are still fully
funded
Long-Term Financial Forecast
• Components
– Financial Trend Analysis – 5 Year (4 history +
current)
• Rapid growth out of last recession can skew
analysis of current trends
– Financial Forecast – 5 Years Forward
• Economic Assumptions
• Collaborative efforts with staff, professionals &
consultants
• Anticipated Development
Historical Revenue
• Property Tax: average annual increase of 6.5% from FY15 – FY24 • Sales Tax: average annual increase of 3.8% from FY15 – FY24 • TOT: average annual increase of 7.1% from FY15 – FY24 • Timeframe includes 4 new hotels and 1 hotel expansion
45.9 22.7
29.5 0
5 10
15 20
25 30
35 40
45 50
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Millions
Primary Revenue Sources
Property Tax Sales Tax Transient Occupancy Tax
The Forecast….
The Forecast….
• Is a model that shows us what MIGHT
happen in the future
• Revenue estimates based on our current
best guess of economic outlook
• Expenditure estimates based on historical
growth rates what happens if we keep
doing what we’ve been doing
– Actuarial data – UAL
The Forecast….
• A set of reasonable, most likely assumptions
about future revenues and expenditures based
on current budget/trends
• Changes to assumptions Changes in the
forecast
• GFOA best practice for fiscal management
• Planning Tool
– Allows us to model future impacts of current budget
decisions
– Allows us to see surplus/deficit trends over time
– Assists us with making changes needed to avoid future deficits
The Forecast….
• Is not a budget – Council has final authority to
establish the budget and amend it as needed
• Is not a labor relations plan – Collective
bargaining is a separate process from
forecasting; assumptions in the forecast are for
modeling purposes only
• Is not a set of promises – COLA increase
assumptions, operating budget growth
assumptions, etc. are for modeling purposes only
• Is not set in stone – Assumptions are changed
over time in response to a variety of factors and
trends
Forecast….
• What’s Included
– Economic Assumptions
– Major Development Currently Underway plus
Anticipated Growth
– Transfers Based on Current Fiscal Policy
• What’s Not Included
– ARPA Funding
– New Positions
– Funding for Current Unfunded Needs
– New or Enhanced Programs/Services
Forecast Assumptions
Annual Revenue Growth Rates
• Property Tax: 4.0% throughout forecast
• Sales Tax: 3.5% average annual growth
• Transient Occupancy Tax
– From 2.5% average annual growth for existing
inventory to 1% in FY26 & 2% beyond
– FY24 Actual less than FY23
– Estimated projected new development
Property, Sales & TOT Revenue
56.4 27.3
32.2 0
10 20
30 40
50 60
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Property Tax Sales Tax Transient Occupancy Tax
Revenue Forecast
87.0 101.9
117.6
125.4 126.5 130.1 134.0 138.1 142.6 147.3
0 20
40 60
80 100
120
140
160
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Property Tax Transient Occupancy Tax (TOT) Sales Tax Other Revenues Transfers In Forecast Assumptions
Annual Expenditure Growth Rates
• Based on historical trends, core City services
• Staffing: No new positions beyond FY25 budget
• Salaries & Wages: 3.7% combined rate for
COLA and step increases beyond MOUs
• 4.5% annual increase in healthcare/dental costs
• -2.1% average annual increase in CalPERS
normal costs (payroll)
• CalPERS UAL schedule increasing 6.7%
– Reflects rising annual costs, peaking in FY31 at $21M (GF)
Projected CalPERS Costs
General Fund Only
14.1 17.2 16.3
19.1 20.7
22.8 24.0 24.9
26.6 27.1
0 5
10 15
20 25
30 FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Normal Cost UAL
Projected CalPERS UAL
Prepayments - GF
5.4 6.2 7.0 7.4 7.8 8.4 8.6 8.8
8.0 8.5
9.5 10.2 10.7
11.7 11.9 12.2
0 5
10 15
20 25
FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
Millions
GF Misc Prepayment Safety Prepayment
Projected CalPERS UAL
All Funds
-
5 10
15 20
25 30
2023-24
2024-25
2025-26
2026-27
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
2033-34
2034-35
2035-36
2036-37
2037-38
2038-39
2039-40
2040-41
2041-42
2042-43
2043-44
2044-45
2045-46
2046-47
264 - Miscellaneous Plan 265 - Safety Plan
Forecast Assumptions
Annual Expenditure Growth Rates
• Semi-Discretionary
– Services & Supplies: 9.7% - Capping at 5%
• Utilities, Property Tax Administration Fees, Software Licenses, Payments to Other Agencies, etc.
– Internal Services: Fleet 3.21%, Risk 15.3%
• Discretionary
– Services & Supplies: 4.3% - Capping at 3%
• Professional Services, General Supplies,
Travel/Training, etc.
– Transfer to Sidewalks Program: $0.9
million/year
Forecast Assumptions
Annual Expenditure Growth Rates
• Transfers Out per Fiscal Policy
– CIP Facilities Reserve: 2% of Operating
Budget
– CIP General Fund Reserve: 1% of Operating
Budget, plus $0.10 million for the General Plan
– Equipment Replacement Reserve: $0.15
million/year
– General Fund Reserves: bring balances up to
equal 14% (Emergency), 5% (Operating), or
1% (Contingency) of Operating Budget
Expenditure Forecast
57.4 61.5 66.5 72.8 77.5 81.1 84.3 87.4 90.7 94.1
-
20 40
60 80
100
120
140
160
180
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Salaries & Benefits
Expenditure Forecast
10.2 11.7 11.9
13.4 14.7 16.5 17.6 18.4 20.1 20.6
-
20 40
60 80
100
120
140
160
180
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Salaries & Benefits PERS UAL
Expenditure Forecast
6.9 8.2 7.9
8.8 8.9 9.4 9.8 10.3 10.8 11.4
-
20 40
60 80
100
120
140
160
180
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Salaries & Benefits PERS UAL Semi-Discretionary Exp
Expenditure Forecast
5.8 6.9 9.7
10.1 12.8 13.2 13.5 13.9 14.3 14.7
-
20 40
60 80
100
120
140
160
180
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Salaries & Benefits PERS UAL Semi-Discretionary Exp Discretionary Exp Expenditure Forecast
6.8 7.5
8.6 10.2
11.2 12.3 13.7 15.2 16.9 18.9
-
20 40
60 80
100
120
140
160
180
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Salaries & Benefits PERS UAL Semi-Discretionary Exp
Discretionary Exp Internal Services
Expenditure Forecast
5.6 4.8
4.6 11.1
6.0 6.5 6.4 6.6
7.1 7.2
-
20 40
60 80
100
120
140
160
180
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Salaries & Benefits PERS UAL Semi-Discretionary Exp
Discretionary Exp Internal Services Transfers Out
Expenditure Forecast
95.4 92.6
100.6
109.2
126.5
131.1
139.0
145.3 151.9
160.0 166.9
-
20 40
60 80
100
120
140
160
180
FY20
Actual
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Salaries & Benefits PERS UAL Semi-Discretionary Exp
Discretionary Exp Internal Services Transfers Out
Revenues & Expenditures
92.5 105.4
119.9
127.6 131.5 133.1 137.0 141.1 145.6 150.3
-
20 40
60 80
100
120
140
160
180
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actuals
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Revenues & Expenditures
Includes continued use of one-time revenues through FY30 93 105
120
128 132 133 137 141 146
150
93 101
109
126
131
139
145
152
160
167
0 20
40 60
80 100
120
140
160
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Usage of General Fund Reserves
(10)
(5)
-
5 10
15 20
25 30
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Projected General Fund Reserve Balances
New Revenue –
Measure G
Measure G -
Projected Revenue
$5.4
$22.5 $23.2 $23.9 $24.7 $25.5
-
5 10
15 20
25 30
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Revenues, Measure G &
Expenditures
Includes continued use of one-time revenues through FY30 0 20
40 60
80 100
120
140
160
180
-
20 40
60 80
100
120
140
160
180
FY20
Actual
FY21
Actual
FY22
Actual
FY23
Actual
FY24
*Actual
FY25
Proj
FY26
Proj
FY27
Proj
FY28
Proj
FY29
Proj
FY30
Proj
Millions
Millions
Revenues Measure G Expenditures
• Revenues growth is stabilizing
• Economic Uncertainty – VLF, ERAF & UAL
• As Measure G decision are made, continue to
analyze impacts
• Ensure long-term fiscal stability
Summary
What’s Next?
• January 30: Council Workshop
• February/March:
– End of Year Report/ACFR (FY 23/24)
– Mid-Year Report – revenue adjustments as needed
• May/June: Budget Workshop & Adoption
• Going forward will continue to use the Forecast
and Mid-Year Report to evaluate revenue and
adjust budgets as needed if growth differs from
expectations.
Comments / Questions?
End of Presentation