PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #9.D
SUBJECT/TITLE:
FISCAL YEAR 2022 THIRD 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 $3.36 million, which is $12.31 million less than the FY 2021 ending unassigned fund balance. The one-time and capital project expenditures, including the 2022 Paving Project, 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 nine months of the fiscal year, the General Fund is projected to end FY 2022 with a $3.36 million unassigned fund balance. The FY 2022 projected $3.36 million unassigned fund balance is $1.14 million greater than the FY 2022 Revised Budget. This projected increase is largely attributable to $182 thousand greater operating revenues, $1.34 million fewer operating expenditures, and $389 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. In addition to the General Fund unassigned fund balance, the General Fund includes the Budget Stabilization Reserve set-aside of $2.00 million.
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.
9.D-1Council Agenda 5-3-2022
Table 1: FY 2022 General Fund Budget Summary
The FY 2022 projected ending unassigned fund balance of $3.63 million does not yet include anticipated Council project expenditures that may be appropriated partially in FY 2022, but more likely in FY 2023 with potential additional operating surplus. These additional anticipated costs total $4.0 million, which is $636 thousand greater than the current estimated unassigned fund balance. The following table illustrates these anticipated costs and the impact on the ending unassigned fund balance. This is for illustrative purposes only to demonstrate that the unassigned ending fund balance can only partially support these costs in FY 2022, but will likely be able to support these costs in FY 2023 with additional net operating surpluses.
AB CD = C - B
($ 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 31,679 182 c Operating Expenditures 19,764 25,263 23,920 (1,342) d = b - c Net Operating Surplus/(Deficit) 9,087 6,235 7,759 1,524 e One-time Revenues 1,247 489 101 (389) f One-time/Capital Expenditures 2,800 20,695 4,331 (16,364) g =
a+d+e-f Ending Fund Balance 21,745$ 4,230$ 21,730$ 17,500$ Unassigned Fund Balance 15,669$ 2,227$ 3,363$ 1,136$ Committed Fund Balance 3,976 - 16,364 16,364 Contribution to Reserves 100 3 3 - Budget Stabilitation Set-Aside 2,000 2,000 2,000 - FY 2022 Projected Ending Unassigned Fund
Balance 3,363,097$
Anticipated Projects in FY 2023
Public Safety Facility - PAYG/Cash portion only 1,000,000 James Way Beautification 1,166,608
Chumash Park improvements 279,339
Palisades Park 353,339
Tennis Court Relocation 1,200,000
Total Anticipated Projects 3,999,286
Ending Unassigned Fund Balance (636,189)$
9.D-2Council Agenda 5-3-2022
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.
Table 2: FY 2022 General Fund, Beginning Fund Balance
III. General Fund Reserve
The City maintains various General Fund reserves totaling $7.06 million for emergency operations, building depreciation, and risk management. These reserves are crucial to avoid disrupting the City’s operations following unanticipated events. The reserves are shown in the table below, followed by a summary of each reserve.
Table 3: General Fund Reserves
Reserve Amount ($ thousands)
General Fund 25% Reserve $6,315
City Building Reserve 500
Risk Management Reserve 250
Total $7,065
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 $6.32 million, which is 25% of the total FY 2022 budgeted annual operating expenditures of $25.26 million. Currently, the General Fund Reserve is $6.31 ($ 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 5-3-2022
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.
IV. General Fund Revenues
The FY 2022 Revised Budget revenues total $31.99 million. FY 2022 projected actual revenues are $31.78 million, or $206 thousand less than budget. Compared to the previous year, FY 2022 projected actual revenues are $1.68 million, or 5.6% 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.
9.D-4Council Agenda 5-3-2022
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 $3.16 million, or 22.2%, greater than the previous year’s TOT revenues. TOT revenues are equal to 11% of the rent charged by all lodging businesses for a person exercising occupancy for 30 consecutive calendar days or less. This increase in TOT revenues compared to the prior year is largely due to reflecting a full year of the additional 1.0% TOT revenue (Measure B-20 that was approved by the voters on November 3, 2020 increasing TOT from 10% to 11% of gross lodging revenues and effective January 2021), compared to only half a year of the additional 1% TOT in FY 2021. In addition, FY 2022 projected TOT revenues reflect fewer closures and travel restrictions from COVID-19 compared to FY 2021 and higher room rates. The following table illustrates the actual TOT revenues received by month in FY 2022 and FY 2021, showing an increase of 33.9% compared to the previous year.
A B C D = C - B E = C - A F = C/A-1
($ 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% 54.7% Property Related Taxes 6,221 6,250 6,250 - 30 0.5% 19.7% Sales and Use Tax 3,661 3,445 3,750 305 89 2.4% 11.8% Other revenues 1,902 1,868 1,781 (87) (121) -6.4% 5.6% Permits 1,137 912 978 65 (159) -14.0% 3.1% Franchise Taxes 657 631 631 - (26) -4.0% 2.0% Departmental Revenues 354 425 366 (59) 11 3.1% 1.2% Business Tax 218 211 227 16 8 3.8% 0.7% Transfers In 140 140 140 - - 0.0% 0.4% Other Finan Sources - 96 - (96) - 0.0% 0.0% Other Taxes 244 78 142 64 (102) -41.8% 0.4% Intergovernmental Revenue 55 43 46 2 (9) -16.8% 0.1% Grants 52 28 - (28) (52) -100.0% 0.0% Total Operating Revenues 28,851$ 31,497$ 31,679$ 182$ 2,828$ 9.8% 99.7% One-time Revenues 1,247 489 101 (389) (1,146) -91.9% 0.3% Total Revenues 30,099$ 31,987$ 31,780$ (206)$ 1,682$ 5.6% 100.0%
9.D-5Council Agenda 5-3-2022
Table 5: TOT Revenues for the First Eight 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 23.0% on average during the first eight 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 10.7% 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%
December 470 970 500 106.3%
January 674 822 148 22.0%
February 895 1,033 138 15.4%
8,261$ 11,065$ 2,804$ 33.9%
9.D-6Council Agenda 5-3-2022
Sales and Use Tax revenues are projected to be $305 thousand greater than budget and $89 thousand, or 2.4%, 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 $305 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 $305 thousand greater than budget and $89 thousand, or 2.4%, greater than the prior year.
V. General Fund Expenditures
The FY 2022 Revised Budget expenditures total $45.96 million. Operating expenditures are projected to be $1.34 million less than the Revised Budget based on expenditures in the first three quarters of the fiscal year. One-time capital costs are projected to be $16.36 million less than budget based on the timing of the capital projects, including the 2022 Paving project that is projected to be spent over the next two fiscal years and the General Fund supported portion of the Public Safety Facility project that is projected to be spent in the next fiscal year.
Total operating expenditures through the third quarter should be about 75% of the budget, assuming the timing of expenditures is consistent throughout the year. This year, about 62% of the operating budget has been spent through the third quarter, while only 7% of the one-time capital expenditure budget has been spent through the third 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 75% mark.
9.D-7Council Agenda 5-3-2022
Table 6: FY 2022 General Fund Expenditure Budget and Projected Actuals
Some operating costs that do not reflect consistent monthly spending include:
Professional Services, which reflects that 49% was spent through the third quarter.
These costs are based on the timing of work performed and are not set amounts per month.
Contract Services, which reflects that 62% was spent through the third quarter. These costs include the $400 thousand Next Level contract services, of which only $104 thousand has been allocated to date. Details of those allocations are provided in Section VII. Next Level Budget of this report. Based on expenditures in the first nine months of the year, staff estimates that there will be $514 thousand of various contracted services, advertising and promotion costs, electricity, travel, training, and risk management cost savings in FY 2022.
Operations & Maintenance, which reflects that 58% was spent through the third quarter. Projected actuals reflect $170 thousand of savings based on savings in the first nine months, primarily in operating supplies and maintenance and minor equipment costs.
Other Expenses, which reflects that 62% was spent through the third quarter.
Projected actuals reflect $167 thousand of savings based on savings in the first nine months, primarily in technology cost savings.
Other Financing Uses, which includes a $1.00 million general contingency budget and reflects that only 18% of the budget has been spent through the third quarter. This budget is allocated over time based on unanticipated costs that come up throughout the year and are not a consistent allocation of expenditures. Retiree Medical Insurance costs, which reflects that 38% of budget was spent through the third quarter. The monthly costs are payments to Retirees, but most of these A B C D = C/B E F = B - E
($ thousands)
Expenditure Category
FY 2021
Actuals
FY 2022
Revised
Budget
FY 2022
Third
Quarter
Actuals
Third
Quarter
Actuals
% of
Budget
FY 2022
Projected
Actuals
Variance
(Revised
Bdgt -
Projected
Actuals)
Proj
Actual %
of Total
Salaries & Wages 6,995$ 8,055$ 5,364$ 67% 7,725$ 330$ 27.3% Benefits 4,390 5,131 3,760 73% 5,214 (84) 18.5% Professional Services 3,389 4,054 1,970 49% 3,802 253 13.5% Contract Services 2,048 3,146 1,947 62% 2,632 514 9.3% Operations & Maintenance 930 1,790 1,047 58% 1,620 170 5.7% Other Expenses 722 953 589 62% 786 167 2.8% Other Financing Uses 135 649 115 18% 649 - 2.3% Transfers Out 465 576 343 60% 576 - 2.0% Retiree Medical Insurance 207 458 175 38% 466 (8) 1.7% Debt Service 435 434 301 69% 434 - 1.5% Capital Projects 49 16 2 10% 16 - 0.1% Total Operating Expenditures 19,764$ 25,263$ 15,611$ 62% 23,920$ 1,342$ 84.7% One-time Capital Costs 2,800 20,695 1,538 7% 4,331 16,364 15.3% Total Expenditures 22,564$ 45,957$ 17,149$ 37% 28,251$ 17,706$ 100.0%
9.D-8Council Agenda 5-3-2022
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 $4.33 million of the $20.70 million budget will be spent this fiscal year.
These projects include the 2022 Paving project, the Public Safety Facility 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 for FY 2022 are $16.36 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, $471 thousand of this appropriation was allocated, leaving $529 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.
Of this amount, $3 thousand of this appropriation was allocated, leaving $2 thousand remaining. Details of the allocation is provided in the following table.
Table 8: FY 2022 City Council Contingency Budget
Beginning Balance July 1, 2021 1,000,000$
Appropriations
Janitorial Services (42,721)
General Plan LCP Amendment (207,922)
Public Art for Bello Bridge (56,694)
Public Safety Radio Communications Project (160,597)
St. Jude's Tunnel painted mural support (3,000)
Total Appropriations (470,934)
Ending Balance as of June 30, 2022 529,066$
Beginning Balance July 1, 2021 5,000$
Appropriations
2022 Advisory Body Recruitment Mailer Postage (949)
2022 Advisory Body Recruitment Mailer Printing (1,822)
Total Appropriations (2,771)
Ending Balance as of June 30, 2022 2,229$
9.D-9Council Agenda 5-3-2022
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, $140 thousand of this appropriation is proposed to be allocated, leaving $260 thousand remaining. Details of the allocation is provided in the following table.
Table 9: FY 2022 Next Level Budget
Beginning Balance July 1, 2021 400,000$
Appropriations
Public Records Request Clerk (26,085)
Public Interactive Digital Budget Book and Budget
In Brief (16,170)
Price House additonal landscaping (18,000)
Pothole repairs (40,000)
Community Development public records scanning (10,000)
St. Jude's tunnel fence work (30,000)
Total Appropriations (140,255)
Ending Balance as of June 30, 2022 259,745$
9.D-10Council Agenda 5-3-2022
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 10: Other Funds
AB CD = B ‐ CE = A + DFG = 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 31,780,441 28,251,115 3,529,326 21,729,598 16,363,868 5,365,730 1002 Half‐Cent Sales Tax Fund 4,935,391 2,051,600 803,753 1,247,847 6,183,238 5,803,370 379,869 Special Revenue Funds
2001 Gas Tax Fund 98,552 366,902 399,769 (32,867) 65,685 65,231 454 2002 Local Transportation 403,644 312,369 438,259 (125,890) 277,754 136,882 140,873 2003 PEG Fund 138,494 13,207 10,000 3,207 141,700 24,732 116,968 2004 Grants‐NonCapital 193,111 180,000 44,407 135,593 328,704 265,726 62,977 2005 Housing In Lieu Fee 4,209,633 18,669 1,130,192 (1,111,523) 3,098,110 2,246,574 851,536 2006 LBID Operations 718,387 1,501,550 1,414,519 87,031 805,418 ‐ 805,418 2006 LBID Improvements (2,067,697) 1,501,550 358,888 1,142,662 (925,035) ‐ (925,035) 2007 Chapman Estate 42,921 449,964 489,651 (39,687) 3,234 ‐ 3,234 Capital Project Funds
3001 Capital Projects 613,814 9,669,679 9,669,679 ‐ 613,814 613,814 ‐ 3002 Public Facilities Fund 875 ‐ ‐ ‐ 875 ‐ 875 3003 Park Development Fund 594,249 184,138 427,540 (243,402) 350,847 262,571 88,276 3101 Circulation Fees 580,090 149,341 115,270 34,071 614,161 90,000 524,161 3102 Impact Fees 1,026,661 252,796 630,567 (377,770) 648,891 59,747 589,144 3103 Developer Impact Fee 62,182 ‐ ‐ ‐ 62,182 ‐ 62,182 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 5,217,517 6,444,983 (1,227,465) 5,655,314 5,655,314 ‐ 6102 Water Tax (Lopez/State) 210,888 2,125,155 2,319,526 (194,371) 16,517 16,517 ‐ 6103 Water Construction Fund 1,064,892 1,444,818 1,470,009 (25,191) 1,039,701 1,039,701 ‐ 6104 Water Expansion Fund 994,609 282,169 ‐ 282,169 1,276,778 1,276,778 ‐ Water Enterprise Funds 9,153,168 9,069,660 10,234,518 (1,164,858) 7,988,310 7,988,310 ‐ 6201 Wastewater Treatment 7,576,680 5,524,900 5,210,260 314,640 7,891,320 7,891,320 ‐ 6202 Wastewater Capital Proj 861,761 339,211 343,747 (4,536) 857,225 857,225 ‐ 6203 Wastewater Expansion 1,594,513 502,682 473 502,209 2,096,722 2,096,722 ‐ Wastewater Enterprise Fund 10,032,954 6,366,793 5,554,480 812,313 10,845,267 10,845,267 ‐ 6301 Local Trans Transit 29,902 ‐ 644 (644) 29,258 29,258 ‐ 6401 Pier Enterprise 93,600 89,886 63,674 26,212 119,812 119,812 ‐ 6501 Parking Enterprise 3,409,461 2,673,221 656,388 2,016,833 5,426,295 3,514,425 1,911,869 Internal Service Funds
7101 Technology Service Fund 129,023 857,804 787,977 69,827 198,850 ‐ 198,850 7201 Motor Vehicle Fund 2,154,880 1,145,002 1,182,624 (37,622) 2,117,258 196,873 1,920,385
9.D-11Council Agenda 5-3-2022
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 $2.05 million. Projected actual expenditures are $804 thousand. Based on the projected revenues and expenditures for the current year, there is a $379 thousand projected ending fund balance in this fund. This amount will be used to support the 2022 Paving Project in FY 2023. The following table lists the budgeted projects in this fund for FY 2022.
Table 11: 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 $400 thousand for the 2022 Paving Project. Based on the projected revenues and expenditures for the current year, there is a $454 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 $312 thousand and $438 thousand of expenditures are budgeted for the 2022 Paving project. Based on the projected revenues and expenditures for the current year, there is $141 thousand projected ending fund balance for this fund.
Projects
FY 2022
Budget
FY 2022
Projected
Actuals
Ocean Blvd Improvement Project $1,516,810 $ 76,347 City Hall Parking Lot 25,000 -
Storm Drains Project 720,214 720,214
2022 Paving Project 4,010,098 -
Tennis Bball Court relocation 335,000 7,192 Total $6,607,122 $ 803,753
9.D-12Council Agenda 5-3-2022
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 $13 thousand and projected expenditures of $10 thousand, the PEG Fund is expected to end the year with a $117 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 $852 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 $1.41 million. The fund is expected to end the year with an $805 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 $450 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 $490 thousand, including $363 thousand that is transferred out of the Chapman Estate Fund
9.D-13Council Agenda 5-3-2022
into the Capital Projects Fund to support a portion of the Chapman Estate roofing project, $64 thousand for the Chapman Estate improvement project (window replacement and accessible restrooms), and $64 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 $3,234.
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 $184 thousand in revenues. Projected actual expenditures total $428 thousand and include the following projects.
Table 12: Park Development Fund FY 2022 Budgeted Projects
The fund is expected to end the year with a $88 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 $5.22 million and expenditures are projected to be $6.45 million.
The projected ending fund balance for the Water Enterprise Fund is $5.66 million, which is allocated for future water system capital costs, including the Central Coast Blue project.
Note that the Water Enterprise Fund also includes the Water Tax, Water Construction, Projects
FY 2022
Budget
FY 2022
Projected
Actuals
Dinosaur Caves Restroom 384,038$ 384,427$
Price Historic Park/ Meherin House 141,366 38,067
Palisades Park improvements 100,000 339
South Palisades Outdoor fitness equipment/trail 60,000 - Overhead costs 4,707 4,707
Total 690,111$ 427,540$
9.D-14Council Agenda 5-3-2022
and Water Expansion Funds and the ending fund balance across all these funds is $7.99 million.
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 $7.89 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 $10.85 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 $90 thousand, primarily from revenues from the Pier Airstreams. Projected expenditures are $64 thousand, including $58 thousand primarily for pier and pier plaza operating costs. The Pier Enterprise Fund is expected to end the year with a $120 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 $2.67 million to fund operating expenditures of $651 thousand.
In addition to operating expenditures, the budget includes $3.74 million for one-time projects, including $2.51 million 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, $101 thousand for the Secure Communication Radio project, $100 thousand for the Addie Street Parking and Access Improvements project, $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 $1.91 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
9.D-15Council Agenda 5-3-2022
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 $1.92 million, which are accumulated funds necessary to fund future replacements.
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
Submitted by: Meeting Date: May 3, 2022
Nadia Feeser, Administrative Services Director
City Manager Approval:
9.D-16Council Agenda 5-3-2022