PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #9.D
SUBJECT/TITLE:
FISCAL YEAR 2022 FIRST QUARTER FINANCIAL STATUS REPORT
RECOMMENDATION:
Receive as information only. No actions are requested or recommended.
EXECUTIVE SUMMARY:
This report updates the City Council on the status of Fiscal Year (FY) 2021-22 ending on June 30, 2022, or FY 2022, financial status based on actual revenues and expenditures during the first half of the fiscal year.
Overall, the City of Pismo Beach’s funds are projected to be financially stable, with sufficient fund balances. The FY 2022 ending General Fund unassigned fund balance is projected to be $9.97 million, which is $5.70 million less than the FY 2021 ending unassigned fund balance, as the one-time and capital project expenditures spend down the fund balance.
For most the City’s other funds, revenues and expenditures in the City’s other funds are projected to be balanced and the ending fund balances are in line with the FY 2022 Adopted Budget ending fund balances. In most of the funds, there are sufficient fund balances and projected revenues to cover projected expenditures.
The following sections provide details of the General Fund financial picture, followed by a summary and highlights of the City’s other funds.
I. General Fund Budget Summary
In summary, based on actual revenues and expenditures during the first six months of the fiscal year, the General Fund is projected to end FY 2022 with a $9.97 million unassigned fund balance. The FY 2022 projected $9.97 million unassigned fund balance is $1.05 million greater than the FY 2022 Revised Budget. This projected increase is largely attributable to $116 thousand greater operating revenues, $917 thousand fewer operating expenditures, and $11 thousand greater one-time revenues.
The unassigned fund balance is used to pay for future one-time investments included in the FY 2023 budget and in the 10-year Capital Improvement Plan. Also, a portion of the unassigned fund balance could be used in this fiscal year to help pay for a larger FY 2022 Paving project of $3.85 million, an additional $1.00 million for already budgeted capital projects, and an additional $1.00 million CalPERS pre-payment.
In addition to the General Fund unassigned fund balance, the General Fund includes two set-asides: Budget Stabilization Reserve set-aside of $2.00 million and a CalPERS Pre- Payment Set-Aside of $1.00 million. The $1.00 million CalPERS Pre-Payment Set-Aside is planned to be used to help offset the City’s unfunded pension liability and is funded by
9.D-1Council Agenda 2-1-2022
a portion of previous fiscal years personnel savings. Staff plans to come back to Council in the spring of 2022 to allocate these funds, and possibly another $1.00 million to help reduce this debt and save interest costs.
The following table is a summary of the FY 2021 actuals and the FY 2022 General Fund revised budget, projected actuals, and a variance comparing the budget to projected actuals.
Table 1: FY 2022 General Fund Budget Summary
II. General Fund Beginning Fund Balance
The General Fund beginning fund balance is comprised of two different components:
• the unassigned fund balance, which are funds that are not committed for any specific purpose and could be used for various one-time projects, and • the committed or carryforward fund balance, which are funds that are committed for a specific budgeted use.
As illustrated in the following table, the FY 2022 Adopted Budget General Fund beginning fund balance was projected to be $14.15 million. Based on changes during FY 2021 and carrying forward fund balance to cover previously budgeted but not-yet-spent expenditures, the beginning fund balance is revised to $18.20 million. This includes $14.23 million of unassigned fund balance and $3.98 million of carryforward fund balances.
A B C D = C - B
($ thousands)
FY 2021
Actuals
FY 2022
Revised
Budget
FY 2022
Year-End
Projected
Actuals
Variance
(Actuals-
Budget)
Unassigned Fund Balance 6,642$ 14,225$ 14,225$ -$ Committed Fund Balance 7,569 3,976 3,976 - a Beginning Fund Balance 14,210 18,200 18,200 - b Operating Revenues 28,851 31,497 31,613 116 c Operating Expenditures 19,764 25,514 24,597 (917) d = b - c Net Operating Surplus/(Deficit) 9,087 5,983 7,017 1,034 e One-time Revenues 1,247 471 482 11 f One-time/Capital Expenditures 2,800 12,667 11,292 (1,375) g = a+d+e-f Ending Fund Balance 21,745$ 11,987$ 14,406$ 2,420$ Unassigned Fund Balance 15,669$ 8,921$ 9,966$ 1,045$ Committed Fund Balance 3,976 - 1,375 1,375 Contribution to Reserves 100 65 65 - Budget Stabilitation Set-Aside 2,000 2,000 2,000 - CalPERS Pre-Payment Set-Aside 1,000 1,000 -
9.D-2Council Agenda 2-1-2022
Table 2: FY 2022 General Fund, Beginning Fund Balance
III. General Fund Reserve
The City maintains various General Fund reserves totaling $7.06 million for emergency operations, building depreciation, and risk management. These reserves are crucial in order to avoid disrupting the City’s operations following unanticipated events. The reserves are shown in the table below, followed by a summary of each reserve.
Table 3: General Fund Reserves
Reserve Amount ($ thousands)
General Fund 25% Reserve $6,313
City Building Reserve 500
Risk Management Reserve 250
Total $7,063
General Fund 25% Reserve
The City has adopted a fiscal policy to fund a General Fund Reserve of 25% of General Fund budgeted annual operating expenditures for FY 2022. The General Fund reserve should be equal to $6.38 million, which is 25% of the total FY 2022 budgeted annual operating expenditures of $25.51 million. Currently, the General Fund Reserve is $6.31 million, which is invested in various securities. This reserve allows the City to maintain its operations for a couple of months in the event that an emergency or disaster impacts the City’s finances.
City Building Reserve
The Council created a City Building Reserve of $500 thousand, for the maintenance and upkeep of City facilities and buildings, particularly if funds are not available. This amount is equal to five years of annual depreciation on City-owned buildings.
Risk Management Reserve
The City Council established a Risk Management Reserve, contributing $50 thousand each year to budget for unanticipated risk management costs. This reserve has a balance of $250 thousand, which is the maximum contribution level.
($ thousands)
Adopted
Budget
Budget
Revisions Actuals
Unassigned Fund Balance 14,149$ 76$ 14,225$
Capital Funds Carryforward 3,516 3,516
Purchase Orders Carryforward 414 414
Prepayment Carryforward 45 45
Total Fund Balance 14,149$ 4,051$ 18,200$
$3,976
Carryforward
9.D-3Council Agenda 2-1-2022
IV. General Fund Revenues
The FY 2022 Revised Budget revenues total $31.97 million. FY 2022 projected actual revenues are $32.10 million, or $127 thousand greater than budget. Compared to the previous year, FY 2022 projected actual revenues are $2.00 million, or 6.6% greater than FY 2021. This increase over the prior year is largely due to additional projected transient occupancy tax (TOT) revenues in FY 2022 in comparison to TOT revenues in FY 2021.
This projected TOT revenue increase is largely due to reflecting a full year of the additional 1.0% TOT revenue compared to only half a year of the additional 1% TOT in FY 2021. The table below summarizes the General Fund revenue budget and projected actual revenues for FY 2022, which is followed by a brief discussion of the top three FY 2022 projected actual sources of revenues.
Table 4: FY 2022 General Fund Revenue Budget and Projected Actuals
• Transient Occupancy Tax (TOT) revenues are projected to be equal to budget and are projected to be $3.16 million, or 22.2%, greater than the previous year’s TOT revenues. TOT revenues are equal to 11% of the rent charged by all lodging businesses for a person exercising occupancy for 30 consecutive calendar days or less. This increase in TOT revenues compared to the prior year is largely due to reflecting a full year of the additional 1.0% TOT revenue (Measure B-20 that was approved by the voters on November 3, 2020 increasing TOT from 10% to 11% of gross lodging revenues and effective January 2021), compared to only half a year of the additional 1% TOT in FY 2021. In addition, FY 2022 projected TOT revenues reflect fewer closures and travel restrictions from COVID-19 compared to FY 2021 and higher room rates. The following table illustrates the actual TOT revenues A B C D = C - B E = C - A F = C/A-1
($ thousands)
Revenue Category
FY 2021
Actuals
FY 2022
Revised
Budget
FY 2022
Projected
Actuals
Variance
(Projected
Actuals -
Revised
Bdgt)
Variance
(FY22 Proj
Act - FY21
Actuals)
% Variance
(FY22 Proj
Act v FY21
Actuals)
Proj
Actual
% of
Total
Transient Occupancy Tax 14,210$ 17,370$ 17,370$ -$ 3,160$ 22.2% 54.1% Property Related Taxes 6,221 6,250 6,250 - 30 0.5% 19.5% Sales and Use Tax 3,661 3,445 3,665 220 4 0.1% 11.4% Other revenues 1,902 1,868 1,868 - (34) -1.8% 5.8% Permits 1,137 912 878 (34) (259) -22.8% 2.7% Franchise Taxes 657 631 657 26 - 0.0% 2.0% Departmental Revenues 354 425 309 (116) (46) -12.8% 1.0% Business Tax 218 211 218 8 - 0.0% 0.7% Transfers In 140 140 140 - - 0.0% 0.4% Other Finan Sources - 96 96 - 96 0.0% 0.3% Other Taxes 244 78 91 13 (153) -62.8% 0.3% Intergovernmental Revenue 55 43 43 - (12) -21.1% 0.1% Grants 52 28 28 - (24) -46.1% 0.1% Total Operating Revenues 28,851$ 31,497$ 31,613$ 116$ 2,762$ 9.6% 98.5% One-time Revenues 1,247 471 482 11 (766) -61.4% 1.5% Total Revenues 30,099$ 31,968$ 32,095$ 127$ 1,997$ 6.6% 100.0%
9.D-4Council Agenda 2-1-2022
received by month in FY 2022 and FY 2021, showing an increase of 32.4% compared to the previous year.
Table 5: TOT Revenues for the First Five Months of FY 2022 and FY 2021
Based on data obtained from Smith Travel Research Inc., a provider of competitive benchmarking, information services, and research to the hotel industry, the increase in TOT revenues is largely due to an increase in room revenue. The average daily rate increased by 29.4% on average during the first six months of FY 2022 compared to the same period in the prior fiscal year. In addition, occupancy rates during the first six months of FY 2021 increased by 4.3% compared to the same period in the prior fiscal year.
Staff projects TOT revenues to reach $17.37 million, which is equal to budget and are projected to be $3.16 million, or 22.2%, greater than the previous year’s TOT revenues. The additional 1% of TOT revenues is programmed to be used to pay the debt service on construction of the proposed Public Safety Facility.
• Property related tax revenues are projected to be equal to budget and $30 thousand, or 0.5%, greater than previous year’s property tax related revenues. There are two sources of property related tax revenues:
o Property Tax Assessed Value revenues: equivalent to 1% of assessed values o Property Tax In Lieu of Vehicle License Fees: 1% tax on the market value of a registered vehicle.
Assessed value cannot increase by more than 2.0% per year per Section 2 of Article XIIIA of the California Constitution. However, the San Luis Obispo County Auditor- Controller’s office is projecting assessed values to increase by 3.3%. This reflects supplemental assessments (new construction and change in ownership) and the recovery of Proposition 8 reductions which can increase assessed values over the
2.0% per year rate. About half of the Proposition 8 reductions remain to be recovered, which means property tax revenues should continue to increase above the 2.0% per year rate if property values continue to rise at their current pace.
($ thousands)
Month FY 2021 FY 2022 Variance % Change
July 1,488 2,354 866$ 58.2%
August 1,479 1,886 406 27.5%
September 1,238 1,553 315 25.4%
October 1,198 1,298 101 8.4%
November 819 1,150 331 40.4%
Total 6,222$ 8,241$ 2,019$ 32.4%
9.D-5Council Agenda 2-1-2022
• Sales and Use Tax revenues are projected to be $220 thousand greater than budget and $30 thousand, or 0.5%, greater than the prior year. Sales and use tax revenues are made up of two sources:
o Bradley-Burns uniform sales and use tax, which is a 1.0% tax on taxable sales within the city.
o Public safety tax, which is a 0.5% tax on taxable sales for specified public safety purposes.
The Bradley-Burns uniform sales and use tax is expected to be $4 thousand greater than the prior year. The public safety sales tax revenues are budgeted at $105 thousand in FY 2022 and are anticipated to be on budget.
In summary, sales and use tax revenues are projected to be $220 thousand greater than budget and $4 thousand, or 0.1%, greater than the prior year.
V. General Fund Expenditures
The FY 2022 Revised Budget expenditures total $38.18 million. Operating expenditures are projected to be $917 thousand less than the Revised Budget based on first and second quarter expenditures. One-time capital costs are projected to be $1.38 million less than budget based on the timing of the capital projects.
Total operating expenditures through the second quarter should be about 50% of the budget, assuming the timing of expenditures is consistent throughout the year. This year, about 43% of the operating budget has been spent through the second quarter, while only 6% of the one-time capital expenditure budget has been spent through the second quarter. These one-time costs are dependent on the timing of construction of these projects. The table below provides details of actuals as a percentage of budget by expenditure category, followed by explanations of the large variances from the 50% mark.
9.D-6Council Agenda 2-1-2022
Table 6: FY 2022 General Fund Expenditure Budget and Projected Actuals
Some operating costs that do not reflect consistent monthly spending include:
• Benefits, which includes retirement, health, and other benefits for employees. In order to take advantage of a 3% savings in CalPERS pension costs, the City prepaid the full year of its projected normal CalPERS pension costs. As such, the Benefits expenditure category reflects that 58% of the budget spent through the second quarter.
• Professional Services, which reflects that 14% was spent through the second quarter.
These costs are based on the timing of work performed and are not set amounts per month.
• Other Financing Uses, which includes a $1.00 million general contingency budget and reflects that only 12% of the budget has been spent through the second quarter. This budget is allocated over time based on unanticipated costs that come up throughout the year and are not a consistent allocation of expenditures. • Retiree Medical Insurance costs, which reflects that 25% of budget was spent through the second quarter. The monthly costs are payments to Retirees, but the majority of these payments are contributions to CalPERS for the actuarially determined contribution and are paid toward the end of the fiscal year.
One-time capital costs reflect payments based on the timing of various capital projects.
Staff projects that $11.29 million of the $12.67 million budget will be spend this fiscal year.
These projects include the Public Safety Facility project, the FY 2022 Paving project, the City Hall Corporation Yard project, the Ocean Boulevard Improvements project, the Chapman Estate Improvements project, the Chumash Park Improvements, the James Way Beautification project, and various other projects. Total projected one-time savings A B C D = C/B E F = B - E
($ thousands)
Expenditure Category
FY 2021
Actuals
FY 2022
Revised
Budget
FY 2022
Second
Quarter
Actuals
Second
Quarter
Actuals %
of Budget
FY 2022
Projected
Actuals
Variance
(Revised
Bdgt -
Projected
Actuals)
Proj
Actual
% of
Total
Salaries & Wages 6,995$ 8,055$ 3,915$ 49% 7,540$ 515$ 21.0% Benefits 4,390 5,131 2,966 58% 4,859 272 13.5% Professional Services 3,389 4,019 581 14% 3,836 184 10.7% Contract Services 2,048 3,270 1,501 46% 3,354 (84) 9.3% Operations & Maintenance 930 1,732 762 44% 1,732 - 4.8% Other Expenses 722 953 398 42% 953 - 2.7% Other Financing Uses 135 869 106 12% 869 - 2.4% Transfers Out 465 576 229 40% 576 - 1.6% Retiree Medical Insurance 207 458 116 25% 458 - 1.3% Debt Service 435 434 301 0% 404 30 1.1% Capital Projects 49 16 2 0% 16 - 0.0% Total Operating Expenditure 19,764$ 25,514$ 10,877$ 43% 24,597$ 917$ 68.5% One-time Capital Costs 2,800 12,667 738 6% 11,292 1,375 31.5% Total Expenditures 22,564$ 38,181$ 11,615$ 30% 35,889$ 2,292$ 100.0%
9.D-7Council Agenda 2-1-2022
for FY 2022 are $1.38 million, which will be carried forward to FY 2023. These savings do not contribute to an increase in fund balance, as these are committed funds.
VI. General Fund Contingency Budgets
General Contingency
The FY 2022 Adopted Budget included $1.00 million in the General Fund general contingency account that may be used for various one-time items that come up during the year. Of this amount, $43 thousand of this appropriation was allocated, leaving $957 thousand remaining. Details of the allocation is provided in the following table.
Table 7: FY 2022 General Fund General Contingency Budget
Council Contingency
The FY 2022 Adopted Budget also includes a $5 thousand City Council contingency appropriation that may be used for various one-time items that come up during the year.
None of this contingency has been allocated in the first two quarters of FY 2022.
VII. Next Level Budget
The FY 2022 Adopted Budget included $400 thousand in the General Fund non- department contract services account that may be used for various “next-level” contract services. Of this amount, $26 thousand of this appropriation was allocated, leaving $374 thousand remaining. Details of the allocation is provided in the following table.
Table 8: FY 2022 Next Level Budget
Beginning Balance July 1, 2021 1,000,000$
Appropriations
Janitorial Services (42,721)
General Plan LCP Amendment (207,922)
Total Appropriations (250,643)
Ending Balance as of June 30, 2022 749,357$
Beginning Balance July 1, 2021 400,000$
Appropriations
Public Records Request Clerk (26,085)
Total Appropriations (26,085)
Ending Balance as of June 30, 2022 373,915$
9.D-8Council Agenda 2-1-2022
VIII. Other Funds
The following table reflects fund balance, projected revenue, and projected expenditure activity in the City’s other funds. For most funds, revenues and expenditures are projected to be on budget and the ending fund balances are in line with the FY 2023 Adopted Budget beginning fund balances.
Table 9: Other Funds
A B C D = B - C E = A + D F G = E - F
Fund
Type Fund Fund Title
Beginning
Fund Balance
Projected
Actual Revenue
Projected Actual
Expenditure Net Rev - Exp
Projected
Ending Fund
Balance Carryforward
Unrestricted
Fund Balance
General Operating Funds
1001 General Fund 18,200,272 32,095,134 35,954,474 (3,859,340) 14,340,933 1,374,971 12,965,962 1002 Half-Cent Sales Tax Fund 4,935,391 1,948,733 3,602,439 (1,653,706) 3,281,685 2,504,683 777,001 Special Revenue Funds
2001 Gas Tax Fund 98,552 367,031 465,000 (97,969) 583 - 583 2002 Local Transportation 403,644 205,043 575,141 (370,098) 33,547 - 33,547 2003 PEG Fund 138,494 37,000 34,732 2,268 140,762 - 140,762 2004 Grants-NonCapital 193,111 183,300 217,553 (34,253) 158,858 92,581 66,277 2005 Housing In Lieu Fee 4,209,633 80,000 1,537,107 (1,457,107) 2,752,526 1,839,659 912,867 2006 LBID Operations 718,387 1,501,550 1,482,982 18,568 736,955 - 736,955 2006 LBID Improvements (2,067,697) 1,501,550 358,888 1,142,662 (925,035) - (925,035) 2007 Chapman Estate 42,921 420,761 463,421 (42,660) 261 - 261 Capital Project Funds
3001 Capital Projects 613,814 23,029,001 23,477,604 (448,603) 165,210 165,210 - 3002 Public Facilities Fund 875 - - - 875 - 875 3003 Park Development Fund 594,249 128,436 398,249 (269,813) 324,437 291,863 32,574 3101 Circulation Fees 580,090 29,458 115,270 (85,812) 494,278 90,623 403,656 3102 Impact Fees 1,026,661 77,161 671,359 (594,199) 432,462 - 432,462 3103 Developer Impact Fee 62,182 1,000 - 1,000 63,182 - 63,182 3201 Underground Utility Fnd 16,466 - - - 16,466 - 16,466 Debt Service Funds
4001 PFA Debt Service - 390,988 390,988 - - - - 4002 PF Agency Debt 5 709,572 709,572 - 5 - 5 4101 Reass 92-1 Fwy Fthlls 762 - - - 762 - 762 4102 Spyglass 92-4 12,683 - - - 12,683 - 12,683 Enterprise Funds
6101 Water Enterprise 6,882,780 5,271,304 8,632,611 (3,361,307) 3,521,472 3,521,472 - 6102 Water Tax (Lopez/State)210,888 2,955,177 2,778,933 176,244 387,132 387,132 - 6103 Water Construction Fund 1,064,892 2,401,741 2,453,504 (51,763) 1,013,129 1,013,129 - 6104 Water Expansion Fund 994,609 138,036 - 138,036 1,132,645 1,132,645 - Water Enterprise Funds 9,153,168 10,766,258 13,865,048 (3,098,790) 6,054,378 6,054,378 - 6201 Wastewater Treatment 7,576,680 5,317,831 5,920,198 (602,367) 6,974,312 6,974,312 - 6202 Wastewater Capital Proj 861,761 186,000 181,000 5,000 866,761 866,761 - 6203 Wastewater Expansion 1,594,513 284,160 473 283,687 1,878,201 1,878,201 - Wastewater Funds 10,032,954 5,787,991 6,101,671 (313,680) 9,719,274 9,719,274 - 6301 Local Trans Transit 29,902 - 429 (429) 29,473 29,473 - 6401 Pier Enterprise 93,600 69,145 98,212 (29,067) 64,533 64,533 - 6501 Parking Enterprise 3,409,461 2,638,207 880,439 1,757,769 5,167,230 3,514,425 1,652,805 Internal Service Funds
7101 Technology Service Fund 129,023 1,317,839 1,388,477 (70,638) 58,385 - 58,385 7201 Motor Vehicle Fund 2,154,880 1,279,512 1,366,033 (86,521) 2,068,359 13,464 2,054,896
9.D-9Council Agenda 2-1-2022
Highlights of Other Funds
Half-Cent Sales Tax Fund (1002)
The Half-Cent Sales Tax Fund is part of the General Fund which includes a 0.50% transaction sales and use tax. This tax was approved by Pismo Beach voters in June 2008, effective October 1, 2008, and renewed in November 2014, which extends the tax to March 31, 2027. The tax proceeds are used exclusively for infrastructure projects. This fund started the year with a $4.94 million beginning fund balance (after including carryforward fund balances). Projected actual revenues are $1.95 million. Projected actual expenditures are $3.60 million. Based on the projected revenues and expenditures for the current year, there is a $777 thousand projected ending fund balance in this fund.
The following table lists the budgeted projects in this fund for FY 2022.
Table 10: Half-Cent Sales Tax Fund FY 2022 Budgeted Projects and Projected Actuals
Gas Tax Fund (2001)
The Gas Tax Fund is a Special Revenue Fund whose revenues include State gas tax funds based on the State’s apportionment formula. These funds are used for City street light costs, City traffic signal maintenance costs, and street repairs and/or capital improvements. This fund started the year with a $99 thousand beginning fund balance (after including carryforward fund balances). Projected actual revenues are $367 thousand and projected actual expenditures are $465 thousand for the FY 2022 Paving project. Based on the projected revenues and expenditures for the current year, there is a $583 projected ending fund balance in this fund.
Local Transportation Fund (2002)
The Local Transportation Fund is a Special Revenue Fund whose funds are used for construction and maintenance of streets, bluff protection, and beach access. Revenues for this fund consist of State Transportation Development Act funds, which remain after funds are allocated for regional transit, local transit, and Ride-on services. Projected actual revenues are $205 thousand and $575 thousand of expenditures are budgeted for the FY 2022 Paving project. Based on the projected revenues and expenditures for the current year, there is $34 thousand projected ending fund balance for this fund.
Projects
FY 2022
Budget
FY 2022
Projected
Actuals
Ocean Blvd Improvement Project $1,516,810 $1,011,207
FY20 Paving Project 30,800 -
City Hall Parking Lot 25,000 -
Storm Drains Project 870,214 870,214
Pavement Management Plan Update 2,855 - FY 2022 Paving Project 3,326,443 1,386,018
Tennis Bball Court relocation 335,000 335,000 Total $6,107,122 $3,602,439
9.D-10Council Agenda 2-1-2022
Public Education Government Fund (2003)
The Public, Educational, and Governmental (PEG) Access Fee Fund includes revenues from a PEG Access Fee collected from cable television providers (i.e. Spectrum) with franchise operations within city limits. Expenditures include capital costs related to governmental cable broadcasting and equipment. Based on projected revenues of $37 thousand and projected expenditures of $35 thousand, the PEG Fund is expected to end the year with a $141 thousand fund balance.
Housing In Lieu Fund (2005)
The Housing In Lieu Fund is a Special Revenue Fund with revenues from a development impact fee paid to the City as an alternative to the production of affordable housing (housing in-lieu fee). These funds are used for the acquisition, construction, or rehabilitation of affordable housing. The fund is projected to have $913 thousand of funds available by the end of the year for this purpose.
Lodging Business Improvement District Fund (2006) Operations The Pismo Beach Lodging Business Improvement District (LBID) Fund for operations reflects a 1% assessment on transient rents at transient lodging providers as revenues and budgeted expenditures to promote Pismo Beach lodging businesses. The LBID Fund started the year with a $718 thousand beginning fund balance. City staff projects that LBID assessment revenues and interest earnings will be $1.50 million. Operating expenditures are projected to be equal to budget. The fund is expected to end the year with an $737 thousand ending unrestricted fund balance.
LBID Fund (2006) Improvements
The LBID Fund for improvements includes a 1% assessment for physical improvements, in particular the Pier Plaza project. The LBID Fund started the year with a negative $2.07 million beginning fund balance after including a $2.32 million remaining balance on the interfund loan payable to the Motor Vehicle Replacement (MVR) Fund and pre-funding the Pier Plaza project in FY 2020 and FY 2021. City staff projects that LBID assessment revenues and interest earnings will be $1.50 million. The LBID Improvements expenditure budget includes $359 thousand for the Spyglass sidewalk under US-101, Beach Swing replacements at Addie and Main Streets, and interest costs to the MVR Fund. The second interfund loan payment is expected to be $1,245,321. The fund is expected to end the year with a negative $925 thousand ending unrestricted fund balance. The fund is expected to have a positive balance at the end of FY 2023 when the loan is paid in full.
Chapman Estate Fund (2007)
The Chapman Estate Fund reflects donations or other contributions for the Chapman Estate as revenues and ongoing maintenance and one-time infrastructure improvements to the Chapman Estate as expenditures. The fund started the year with $43 thousand and is expected to receive $420 thousand of revenues, largely due to the $382 thousand payment from the Chapman Estate trust and interest earnings. Proposed private event revenues are not anticipated at this time until the roofing project, window replacement project, and the accessible restrooms are built. Projected actual expenditures are $463 thousand, including $382 thousand that is transferred out of the Chapman Estate Fund
9.D-11Council Agenda 2-1-2022
into the Capital Projects Fund to support a portion of the Chapman Estate roofing project and $48 thousand for operating costs of the home and grounds and monthly maintenance costs for utilities and gardening. Although the projected revenues support the projected expenditures this fiscal year, the fund will either need General Fund support or a reduction of the transfer out of the trust funds at the end of the year to continue to operate as the operating costs were originally anticipated to be covered by a portion of the trust fund revenues and those are now supporting the Chapman roof project. The remaining projected ending balance of this fund is $798.
Park Development Fund (3003)
The Park Development Fund is a Capital Project Fund with Quimby Act (park development in-lieu) fees and Impact Fees as funding sources to support construction costs of new parks and park lands, and the enhancement of existing parks to serve new development. The fund started the year with $594 thousand and is projected to receive $128 thousand in revenues. Projected actual expenditures total $398 thousand and include the following projects.
Table 11: Park Development Fund FY 2022 Budgeted Projects
The fund is expected to end the year with a $33 thousand ending fund balance.
Water Enterprise Fund (6101)
The Water Enterprise Fund is an Enterprise Fund consisting of revenues from water billings and expenditures for: contract meter reading; direct water services and supplies; on-going inspection, repair, and maintenance of the City’s wells, tanks, booster stations, hydro-pneumatic system, and water distribution system components; water conservation efforts; and ensuring that a safe, drinkable supply of water is provided to Pismo Beach.
Water revenues are projected to be $5.27 million and expenditures are projected to be $8.63 million.
The projected ending fund balance for the Water Enterprise Fund is $3.52 million, which is allocated for future water system capital costs, including the Central Coast Blue project.
Note that the Water Enterprise Fund also includes the Water Tax, Water Construction, and Water Expansion Funds and the ending fund balance across all these funds is $6.05 million.
Projects
FY 2022
Budget
FY 2022
Projected
Actuals
Dinosaur Caves Restroom 384,038$ 384,038$
Price Historic Park/ Meherin House 141,366 9,504
Palisades Park improvements 100,000 -
South Palisades Outdoor fitness equipment/trail 60,000
Overhead costs 4,707 4,707
Total 690,111$ 398,249$
9.D-12Council Agenda 2-1-2022
Wastewater Treatment Fund (6201)
The Wastewater Treatment Fund is an Enterprise Fund consisting of revenues from wastewater billings and expenditures for direct services and supplies; operation and maintenance of the City’s wastewater treatment plant and the wastewater collection facilities including pumps and pipelines; and ensuring the City’s treatment and collection system operations meet City, federal, and state laws and requirements. The ending fund balance is $6.97 million which is already allocated for other wastewater capital projects.
Note that the Wastewater Treatment Funds also include the Wastewater Capital Fund and the Wastewater Expansion Fund. The total combined ending fund balance across all these funds is $9.72 million.
Pier Enterprise Fund (6401)
The Pier Enterprise Fund includes revenues from a concession lease on the Pier and expenditures for repair and maintenance of the Pier, Promenade, and nearby facilities.
The beginning fund balance is $94 thousand and projected revenues are $69 thousand, of which $64 thousand is from revenues from the Pier Airstreams and $5 thousand is from the General Fund. Projected expenditures are $98 thousand, including $88 thousand for pier and pier plaza operating costs and $10 thousand for the Airstreams security and maintenance. The Pier Enterprise Fund is expected to end the year with a $65 thousand ending fund balance.
Parking Enterprise Fund (6501)
The Parking Enterprise Fund is an Enterprise Fund consisting of revenues from parking kiosks, parking citations, and parking permits to support a Parking Supervisor and implement the goals of the Pismo Beach Parking Management Plan to administer existing parking more efficiently, provide more downtown parking, improve enforcement and parking management, and provide funds for future parking structures. Revenues are projected to reach $2.64 million to fund operating expenditures of $757 thousand.
In addition to operating expenditures, the budget includes $3.64 million for one-time projects, including $2.51 for the purchase of property to increase the City’s parking inventory, $750 thousand for paving the parking lots, $250 thousand for a Police Downtown Sub-station, $19 thousand for additional parking meters, $4 thousand for a radio system upgrade and reliability project, and $824 for other projects. The FY 2022 projected ending fund balance is $1.65 million.
Motor Vehicle Replacement Fund (7201)
The Motor Vehicle Replacement (MVR) Fund is an Internal Service Fund that funds the City’s motor vehicle operations and maintenance and motor vehicle replacements for various City departments. These costs are funded by accumulated fund balance, transfers from other funds, and motor vehicle rental charges to other funds. In FY 2020, the MVR Fund is provided a $3.28 million interfund loan from its cash balance to the LBID Fund for the Pier Plaza project. Consequently, the MVR Fund has a $2.15 million beginning fund balance. The interfund loan is anticipated to be paid overtime during FY 2021 through FY 2023. The FY 2022 projected ending fund balance is $2.05 million, which are accumulated funds necessary to fund future replacements.
9.D-13Council Agenda 2-1-2022
FISCAL IMPACT:
There is no fiscal impact from receiving this report as it is information only.
ALTERNATIVES:
1.Request additional information from staff.
ATTACHMENTS:
None
Prepared by: Meeting Date: February 1, 2022
Nadia Feeser, Administrative Services Director
City Manager Approval:
9.D-14Council Agenda 2-1-2022