REVENUE
2021-2022
Revised
Budget
2022-2023
Prelim. Base
Budget
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 $ 14,273,769 $ 15,065,100 $ 15,667,700 $ 16,294,400 $ 16,946,200 $ 17,624,000 $ 18,329,000 $ 19,062,200 $ 19,824,700 $ 20,617,700 $ 21,442,400 Vehicle License Fees 3,688,130 5,097,400 5,301,300 5,513,400 5,733,900 5,963,300 6,201,800 6,449,900 6,707,900 6,976,200 7,255,200 Sales Tax 3,017,753 3,108,300 3,201,500 3,297,500 3,396,400 3,498,300 3,603,200 3,711,300 3,822,600 3,937,300 4,055,400 Transient Occupancy Tax 1,695,073 1,712,000 1,754,800 1,798,700 1,843,700 1,889,800 1,937,000 1,985,400 2,035,000 2,085,900 2,138,000 Utility Users Tax 1,868,218 1,905,600 1,953,200 2,002,000 2,052,100 2,103,400 2,156,000 2,209,900 2,265,100 2,321,700 2,379,700 Other Taxes 2,976,138 3,029,400 3,105,100 3,182,700 3,262,300 3,343,900 3,427,500 3,513,200 3,601,000 3,691,000 3,783,300 Department/Program Revenues 8,546,745 7,176,200 7,319,700 7,466,100 7,615,400 7,767,700 7,923,100 8,081,600 8,243,200 8,408,100 8,576,300 Transfer In-Other 2,150,898 2,150,900 2,150,900 2,150,900 2,150,900 2,150,900 2,150,900 2,150,900 2,150,900 2,150,900 2,150,900 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 178,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 ARPA 4,610,518 4,610,505 - - - - - - - - -
Total Annual Revenue $ 43,093,242 $ 44,043,405 $ 40,642,200 $ 41,893,700 $ 43,188,900 $ 44,529,300 $ 45,916,500 $ 47,352,400 $ 48,838,400 $ 50,376,800 $ 51,969,200
EXPENDITURES
2021-2022
Mid-Year
Revised
Budget
2022-2023
Preliminary
Base Budget
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 $ 26,825,795 $ 28,242,000 $ 29,177,189 $ 30,248,132 $ 31,376,328 $ 32,565,718 $ 33,820,542 $ 35,145,368 $ 36,545,111 $ 38,025,066 $ 39,590,936 Material/Supplies/Maintenance 3,248,698 3,418,100 3,459,326 3,502,568 3,546,350 3,590,679 3,635,563 3,681,007 3,727,020 3,773,608 3,820,778 Contract Services 7,828,046 7,617,500 7,796,438 7,991,348 8,191,132 8,395,910 8,605,808 8,820,953 9,041,477 9,267,514 9,499,202 Debt Service 1,959,943 2,072,081 2,158,906 2,195,487 2,260,592 2,471,425 2,529,025 2,554,121 2,398,126 1,379,640 1,370,527 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 $ 40,002,209 $ 41,489,681 $ 42,731,859 $ 44,077,536 $ 45,514,402 $ 47,163,732 $ 48,730,938 $ 50,341,450 $ 51,851,734 $ 52,585,828 $ 54,421,443 Capital Transfers $ 3,000,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total General Fund Expenditures $ 43,002,209 $ 41,489,681 $ 42,731,859 $ 44,077,536 $ 45,514,402 $ 47,163,732 $ 48,730,938 $ 50,341,450 $ 51,851,734 $ 52,585,828 $ 54,421,443 GF Structural Surplus/Deficit 91,033 2,553,724 (2,089,659) (2,183,836) (2,325,502) (2,634,432) (2,814,438) (2,989,050) (3,013,334) (2,209,028) (2,452,243) Pct. of GF Revenues 0.21% 5.80% -5.14% -5.21% -5.38% -5.92% -6.13% -6.31% -6.17% -4.39% -4.72% Projected Ending Fund Balance $ 16,592,406 $ 19,146,130 $ 17,056,471 $ 14,872,636 $ 12,547,133 $ 9,912,701 $ 7,098,263 $ 4,109,213 $ 1,095,879 $ (1,113,149) $ (3,565,392) Non-Spendable and Assigned $ 9,158,516 $ 9,142,568 $ 9,266,786 $ 9,401,354 $ 9,545,040 $ 9,709,973 $ 9,866,694 $ 10,027,745 $ 10,178,773 $ 10,252,183 $ 10,435,744 Unassigned Fund Balance $ 7,433,890 $ 10,003,562 $ 7,789,685 $ 5,471,282 $ 3,002,093 $ 202,728 $ (2,768,431) $ (5,918,532) $ (9,082,894) $(11,365,332) $(14,001,136) Unassigned balance as % of Op. Exp. 18.6% 24.1% 18.2% 12.4% 6.6% 0.4% -5.7% -11.8% -17.5% -21.6% -25.7% Total Available Reserves (Unassigned +
10% Policy Designation) 11,734,111 14,152,530 12,062,871 9,879,036 7,553,533 4,919,101 2,104,663 (884,387) (3,897,721) (6,106,749) (8,558,992) Available balance as % of Op. Exp 29.3% 34.1% 28.2% 22.4% 16.6% 10.4% 4.3% -1.8% -7.5% -11.6% -15.7% City of Pacifica
Long Term Financial Forecast Table and Assumptions
General Fund
Attachment 1
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, staff will further refine the figures included in this report as part of the FY 2022-23 Base Budget presentation on May 9, 2022.
Revenue Assumptions
1. Property Tax assumes a 6% annual increase, per assumptions used by HdL, the City's 3rd party tax consultant. This is in line with the past years’ collections and consistent with the anticipated increases in the assessed market value of recently sold properties.
2. Vehicle License Fees (VLF) is tied to property tax growth and so also assumes a conservative 4% annual increase. The FY2022-23 Base Budget includes a backfill of $1.2 million currently owed by the State. However, there are still legislative uncertainties around allocation of VLF and potential threat to Excess ERAF revenues.
3. Sales Tax assumes a 3% 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.
4. 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.
5. Utility Users Taxes (UUT) also assumes a modest 2% increase for the next fiscal year and thereafter, based in increase in utility rates and demand.
6. Other Taxes include Business License, cannabis operations tax. Cannabis Tax showed slight decline at mid-year due to slower than expected business activity. The preliminary forecast includes a moderate 3.5% or $30,000 increase over the midyear estimates.
7. 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.
8. No changes were assumed for the General Fund portion of 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. Also, nor new ongoing Grants were anticipated as part of the Base..
9. 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 base level 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 due to implementing the second year of the new MOU agreements.
b. FY 2022-23 assumptions restore the amended FY 2021-22 Budget cuts (including $279K cost-savings resulting from the budgeted delay in filling vacancies) that were done to make the FY2021-22 impacts of new MOU provisions cost-neutral after the original adoption of the budget. 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 and includes the new Civic Center debt financing.
5. Operating Transfers Category remains the same for the future years. However, staff will be changing the accounting allocation as part of the Base Budget development for the internal funds to accurately account for the insurance premiums in the General Liability and Worker Compensation funds. This will likely increase the General Fund transfers out to these funds.
6. 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.