REVENUE
2021-2022
Adopted Budget
2022-2023
Projected
2023-2024
Projected
2024-2025
Projected
2025-2026
Projected
2026-2027
Projected
2027-2028
Projected
2028-2029
Projected
2029-2030
Projected
2030-2031
Projected
2031-2032
Projected
Property Tax $ 13,968,964 $ 14,527,723 $ 15,108,831 $ 15,713,185 $ 16,341,712 $ 16,995,381 $ 17,675,196 $ 18,382,204 $ 19,117,492 $ 19,882,191 $ 20,677,479 Sales Tax 2,559,413 2,610,601 2,688,919 2,769,587 2,852,674 2,938,255 3,026,402 3,117,194 3,210,710 3,307,032 3,406,243 Transient Occupancy Tax 1,750,423 1,767,927 1,812,125 1,857,429 1,903,864 1,951,461 2,000,247 2,050,254 2,101,510 2,154,048 2,207,899 Other Taxes 5,439,306 7,595,259 8,235,736 8,441,629 8,652,670 8,868,987 9,090,711 9,317,979 9,550,928 9,789,702 10,034,444 Department/Program Revenues 10,540,342 10,751,149 10,966,172 11,185,495 11,409,205 11,637,389 11,870,137 12,107,540 12,349,691 12,596,684 12,848,618 Transfer In-Other 2,150,898 2,151,000 2,151,000 2,151,000 2,151,000 2,151,000 2,151,000 2,151,000 2,151,000 2,151,000 2,151,000 Excess ERAF 88,000 88,000 88,000 88,000 88,000 88,000 88,000 88,000 88,000 88,000 88,000 Grants 133,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 ARPA 4,205,718 5,015,305
Total Annual Revenue $ 40,836,064 $ 44,606,964 $ 41,150,784 $ 42,306,324 $ 43,499,126 $ 44,730,472 $ 46,001,694 $ 47,314,170 $ 48,669,331 $ 50,068,657 $ 51,513,683
EXPENDITURES
2020-2021
Adopted Budget
2022-2023
Projected
2023-2024
Projected
2024-2025
Projected
2025-2026
Projected
2026-2027
Projected
2027-2028
Projected
2028-2029
Projected
2029-2030
Projected
2030-2031
Projected
2031-2032
Projected
Salaries And Benefits $ 27,055,654 $ 28,163,609 $ 29,097,230 $ 30,166,374 $ 31,292,731 $ 32,480,239 $ 33,733,140 $ 35,055,999 $ 36,453,732 $ 37,931,631 $ 39,495,399 Material/Supplies/Maintenance 4,388,613 4,445,165 4,499,230 4,555,470 4,612,414 4,670,069 4,728,445 4,787,550 4,847,395 4,907,987 4,969,337 Contract Services 5,992,909 6,147,052 6,289,228 6,446,459 6,607,620 6,772,811 6,942,131 7,115,684 7,293,576 7,475,916 7,662,814 Debt Service 1,959,943 1,986,495 2,030,598 2,043,411 2,085,239 2,089,121 2,146,907 2,172,307 2,016,734 997,798 988,373 Op. Transfers Out 139,727 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 Total Annual Operating Expenditures $ 39,536,846 $ 40,882,321 $ 42,056,286 $ 43,351,714 $ 44,738,003 $ 46,152,240 $ 47,690,623 $ 49,271,541 $ 50,751,437 $ 51,453,332 $ 53,255,922 Capital Transfers $ 3,000,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total General Fund Expenditures $ 42,536,846 $ 40,882,321 $ 42,056,286 $ 43,351,714 $ 44,738,003 $ 46,152,240 $ 47,690,623 $ 49,271,541 $ 50,751,437 $ 51,453,332 $ 53,255,922 GF Structural Surplus/Deficit (1,700,782) 3,724,643 (905,502) (1,045,390) (1,238,878) (1,421,768) (1,688,929) (1,957,370) (2,082,106) (1,384,675) (1,742,239) Projected Ending Fund Balance $ 14,800,591 $ 18,525,234 $ 17,619,731 $ 16,574,342 $ 15,335,464 $ 13,913,696 $ 12,224,767 $ 10,267,397 $ 8,185,291 $ 6,800,616 $ 5,058,377 Non-Spendable and Assigned $ 9,111,980 $ 9,081,832 $ 9,199,229 $ 9,328,771 $ 9,467,400 $ 9,608,824 $ 9,762,662 $ 9,920,754 $ 10,068,744 $ 10,138,933 $ 10,319,192 Unassigned Fund Balance $ 5,688,612 $ 9,443,402 $ 8,420,503 $ 7,245,570 $ 5,868,064 $ 4,304,873 $ 2,462,105 $ 346,643 $ (1,883,453) $ (3,338,317) $ (5,260,816) Unassigned balance as % of Op. Exp. 14.4% 23.1% 20.0% 16.7% 13.1% 9.3% 5.2% 0.7% -3.7% -6.5% -9.9% Total Available Reserves (Unassigned + 10% Policy Designation) 9,942,296 13,531,634 12,626,131 11,580,742 10,341,864 8,920,096 7,231,167 5,273,797 3,191,691 1,807,016 64,777 Available balance as % of Op. Exp 25.1% 33.1% 30.0% 26.7% 23.1% 19.3% 15.2% 10.7% 6.3% 3.5% 0.1% City of Pacifica
Long Term Financial Forecast Table and Assumptions
General Fund
Attachment A
LONG TERM FINANCIAL FORECAST ASSUMPTIONS
The long-term financial model features a set of assumptions for both revenues and expenditures based on conservative projections. The scenario presented represents conservative levels of revenue based on information available now. These projections are preliminary, and staff will further refine the figures presented in this report once new financial information becomes available and FY 2021-22 Mid-Year Budget Review work is done in the next couple of months.
Revenue Assumptions
1. Property Tax assumes a 4% annual increase, which is in line with the past years’ collections and consistent with the anticipated increases in the assessed market value of recently sold properties.
2. Sales Tax assumes a 2% increase for FY2022-23 based on recent projections by HdL projections (City’s Sales Tax advisor) and a 3% in the following years considering local economic recovery from the pandemic and continuing growth in online sales.
3. Transient Occupancy Tax assumes a modest 1% increase for the next fiscal year and a 2% increase after that, assuming a gradual return to pre-pandemic travel.
4. Other Taxes include Business License and Utility Users Taxes (UUT), cannabis operations tax, and Vehicle License Fees (VLF). Cannabis Tax includes additional revenues of $0.8M in the upcoming year, based on projected receipts from two additional marijuana businesses. Staff assumed a 2% increase in this category per year and also included the $2.1M in VLF reimbursement from the State expected in FY 2022-23 and another $2.6M in the following year.
5. Departmental or Program revenues include building, planning and other permits, recreation revenues, and rentals. This category is projected to increase by 2% based on the current service activity level that is anticipated to continue.
6. No changes were assumed for the General Fund portion of Excess ERAF, which will continue funding the Disaster Fund as per previously approved Council policy, leaving only $88K in General Fund to provide local non-profit grants, nor any new ongoing Grants are anticipated.
The Operating Transfer In/Out category also remains the same. However, this figure is likely to change once the new Cost Allocation Plan is complete.
Expenditures Assumptions
1. Salaries and Benefits (S&B) projections include the same full-time equivalent count citywide and assume an ongoing 2% annual increase in the employee compensation in the future years, consistent with the current Memoranda Of Understanding (MOU) terms and provisions. Other S&B assumptions include the following:
a. FY 2022-23 includes an additional increase ($185K above the Revised FY21-22 Budget level) due to implementing the new MOU agreements.
b. FY 2022-23 assumptions restores the amended FY 2021-22 Budget cuts (including $279K cost-savings resulting from the budgeted delay in filling vacancies) to make the FY2021- 22 impacts of new MOU provisions cost-neutral.
c. The Projections also include an anticipated increase in the City’s contribution towards the unfunded liabilities of $0.6M for FY2022-23 and $0.4M in FY2023-24 as per CALPERS Actuarial Reports.
d. The FY2023-24 projections remove all Limited-Term positions, including those funded by ARPA.
e. The FY2023-24 Projections eliminate the one-time 1% Bonus pay funded by ARPA that part of the new labor agreements that went into effect in FY2021-22.
2. Materials, Supplies, and Maintenance Category assumes a very modest 1.25% increase that partially accounts for inflation.
a. FY 2022-23 assumptions restore the amended FY 2021-22 Budget reductions, including $136K operational cost-savings measures implemented by departments this year to make the FY2021-22 impacts of new MOU provisions cost-neutral. b. FY 2022-23 Projections include reductions related to one-time COVID prevention and sanitation uses of $120K funded by ARPA
3. Contractual Services Category assumes a 2.5% annual increase applied to most City contracts to account for regular CPI increases and inflation.
a. FY 2022-23 assumptions restore the amended FY 2021-22 Budget reductions, including $173K in departments’ operational cost-savings measures to make the FY2021-22 impacts of new MOU provisions cost-neutral.
b. FY 2022-23 Projections are reduced by $460K related to Economic recovery, homelessness, and other one-time uses funded by ARPA
4. Debt Service Expense Category is projected in accordance with the City’s updated debt service schedule.
7. Operating Transfers Category remains the same for the future years. However, this figure is likely to change once the new Cost Allocation Plan is complete. In addition, this category will be further refined during the budget development process when some changes to the FY 2022-23 internal service cost become available (e.g., insurance premiums, etc.)
5. Capital Transfers Category. The Financial Outlook does not assume any ongoing General Fund contribution towards the Capital Improvement Program (CIP). However, some General Fund contribution for CIP is likely to be required every year based on the Council’s strategic priorities and discretion.