PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #9.D
SUBJECT/TITLE:
FISCAL YEAR 2023 THIRD QUARTER FINANCIAL STATUS REPORT
RECOMMENDATION:
Receive as information only. No actions are requested or recommended.
EXECUTIVE SUMMARY:
This report presents an update on the financial status of the City of Pismo Beach for Fiscal Year (FY) 2022-23, which ends on June 30, 2023. The report is based on actual revenues and expenditures for the first nine months of the fiscal year.
Overall, the City's financial position is stable, with sufficient fund balances. The projected unassigned fund balance for the General Fund at the end of FY 2023 is $10.39 million, representing an increase of $3.92 million from the previous fiscal year. This increase is primarily due to the projected net operating surplus of $4.77 million in FY 2023, which contributes to the ending unassigned fund balance.
For most of the City's other funds, revenues and expenditures are expected to remain on budget, and the projected ending fund balances are consistent with the FY 2023 Adopted Budget. All funds have sufficient balances and projected revenues to cover estimated expenditures.
The report includes a detailed analysis of the General Fund financial situation, followed by a summary and highlights of the City's other funds.
I. General Fund Budget Summary
To summarize, based on projections from the first nine months of the fiscal year, the General Fund is expected to end FY 2023 with a $10.39 million unassigned fund balance.
This represents an increase of $934 thousand compared to the FY 2023 Revised Budget.
The increase is due to projected expenditure savings of $2.43 million, and projected one- time revenues that are $47 thousand greater than the Revised Budget. This is offset by a decrease of $1.40 million in projected operating revenues compared to the Revised Budget, and a contribution of $140 thousand to Reserves.
The unassigned fund balance will be used to pay for future one-time investments outlined in the FY 2023 budget, the FY 2024 and FY 2025 Proposed Budgets, and the 10-year Capital Improvement Plan. Additionally, a portion of the unassigned fund balance may be allocated to pay for a portion of the Public Safety Facility, which would reduce ongoing borrowing costs.
Furthermore, the General Fund includes a Budget Stabilization Reserve set-aside of $2.00 million.
9.D-1Council Agenda 5-16-2023
The following table is a summary of the FY 2022 actuals and the FY 2023 General Fund revised budget, projected actuals, and a variance comparing the budget to projected actuals.
Table 1: FY 2023 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 2023 Adopted Budget General Fund beginning fund balance was projected to be $9.19 million. Based on changes during FY 2022 and carrying forward fund balance to cover previously budgeted but not-yet-spent expenditures, the fund balance is revised to $25.73 million. This includes $8.47 million of unassigned fund balance and $17.26 million of carryforward fund balances.
AB CD = C - B
($ thousands)
FY 2022
Actuals
FY 2023
Revised
Budget
FY 2023 Year-
End Projected
Actuals
Variance
(Actuals-
Budget)
Unassigned Fund Balance 14,225$ 8,469$ 8,469$ -$ Committed Fund Balance 3,976 17,259 17,259 -
a Beginning Fund Balance 18,200 25,727 25,727 -
b Operating Revenues 32,502 32,390 30,991 (1,399) c Operating Expenditures 23,411 28,645 26,219 (2,426) d = b - c Net Operating Surplus/(Deficit) 9,092 3,745 4,772 1,027 e One-time Revenues 1,250 301 347 47
f One-time/Capital Expenditures 3,054 18,315 3,138 (15,177) g =
a+d+e-f Ending Fund Balance 25,488$ 11,458$ 27,708$ 16,250$ Unassigned Fund Balance 6,474$ 9,458$ 10,392$ 934$ Committed Fund Balance 17,259 - 15,177 15,177
Contribution to Reserves (245) - 140 140
Budget Stabilitation Set-Aside 2,000 2,000 2,000 -
9.D-2Council Agenda 5-16-2023
Table 2: FY 2023 General Fund, Beginning Fund Balance
III.General Fund Reserve
The City maintains various General Fund reserves totaling $7.77 million for emergency operations, building depreciation, and risk management. These reserves are crucial in order to avoid disrupting the City’s operations following unanticipated events. The reserves are shown in the table below, followed by a summary of each reserve.
Table 3: General Fund Reserves
Reserve Amount ($ thousands)
General Fund 25% Reserve $7,022
City Building Reserve 500
Risk Management Reserve 250
Total $7,772
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 2023. The General Fund reserve should be equal to $7.16 million, which is 25% of the total FY 2023 budgeted annual operating expenditures of $28.65 million. Currently, the General Fund Reserve is $7.02 million, of which $7.01 million is invested in various securities and $7 thousand is pending investment. This reserve allows the City to maintain its operations for a few months in the event that an emergency or disaster impacts the City’s finances. The City Treasurer will be investing an additional $140 thousand to meet the 25% operating expenditure budget during FY 2023.
City Building Reserve
The Council created a City Building Reserve of $500 thousand, for the maintenance and upkeep of City facilities and buildings, particularly if funds are not available. This amount is equal to five years of annual depreciation on City-owned buildings. ($ thousands)
Adopted
Budget
Budget
Revisions Actuals
Unassigned Fund Balance 9,185$ (717)$ 8,469$
Capital Funds Carryforward 16,246 16,246
Purchase Orders Carryforward 963 963
Prepayment Carryforward 50 50
Total Fund Balance 9,185$ 16,542$ 25,727$
$17,259
Carryforward
9.D-3Council Agenda 5-16-2023
Risk Management Reserve
The City Council established a Risk Management Reserve, contributing $50 thousand each year to the 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 2023 Revised Budget revenues total $32.69 million. FY 2023 projected actual revenues are $31.34 million, or $1.35 million less than budget. Compared to the previous year, FY 2023 projected actual revenues are $2.41 million, or 7.2% less than FY 2022.
This decrease over the prior year is largely due to a projected reduction of $1.55 million in Transient Occupancy Tax revenues compared to the previous fiscal year, and the one- time revenue of the American Rescue Plan Act of 2021 that was received in FY 2022 in the amount of $976,980. The table below summarizes the General Fund revenue budget and projected actual revenues for FY 2023, which is followed by a brief discussion of the top three FY 2023 projected actual sources of revenues.
Table 4: FY 2023 General Fund Revenue Budget and Projected Actuals
Transient Occupancy Tax (TOT) revenues are projected to be $1.53 million less than budget and are projected to be $1.55 million, or 9.1%, less than the previous year’s TOT revenues. TOT revenues are generated by charging 11% of the rent for all lodging businesses that provide occupancy for a period of 30 consecutive days or less. This decrease in TOT revenues reflects a significant drop in revenues received through the third quarter of FY 2023.
A B C D = C - B E = C - A F = C/A-1
($ thousands)
Revenue Category
FY 2022
Actuals
FY 2023
Revised
Budget
FY 2023
Projected
Actuals
Variance
(Projected
Actuals -
Revised
Bdgt)
Variance
(FY23 Proj
Act - FY22
Actuals)
% Variance
(FY23 Proj
Act v FY22
Actuals)
Proj
Actual
% of
Total
Transient Occupancy Tax 17,011$ 16,990$ 15,465$ (1,525)$ (1,545)$ -9.1% 49.3% Property Related Taxes 6,480 6,588 6,727 139 247 3.8% 21.5% Sales and Use Tax 4,089 3,650 3,802 152 (286) -7.0% 12.1% Other revenues 1,465 1,853 1,858 6 393 26.8% 5.9% Permits 1,356 1,256 1,220 (36) (136) -10.0% 3.9% Departmental Revenues 625 760 616 (145) (10) -1.6% 2.0% Franchise Taxes 688 631 631 - (57) -8.3% 2.0% Business Tax 241 211 261 51 20 8.5% 0.8% Transfers In 140 140 140 - - 0.0% 0.4% Grants 44 93 26 (67) (18) 0.0% 0.1% Other Finan Sources 47 92 68 (24) 20 43.2% 0.2% Other Taxes 218 78 128 49 (91) -41.6% 0.4% Intergovernmental Revenue 97 48 48 - (49) -50.1% 0.2% Total Operating Revenues 32,502$ 32,390$ 30,991$ (1,399)$ (1,511)$ -4.6% 98.9% One-time Revenues 1,250 301 347 47 (903) -72.2% 1.1% Total Revenues 33,752$ 32,691$ 31,338$ (1,353)$ (2,414)$ -7.2% 100.0%
9.D-4Council Agenda 5-16-2023
The decrease in TOT revenues can be attributed to double-digit declines in revenue from December 2022 through March 2023 compared to the same months in the previous fiscal year. This was largely due to the atmospheric river that caused flooding in California, resulting in fewer visitors to the beach. Additionally, the abundance of snow in the mountains served as an attractive alternative to visiting the beach. Staff projections indicate that there will be a further decrease of 10% in April and May, and a 5% reduction in June compared to the previous April through June in 2022. The following table and chart illustrate the actual TOT revenues received by month from July to March in FY 2023 and FY 2022, showing a decrease of 9.3% compared to the previous year.
Table 5: TOT Revenues for the First Nine Months of FY 2023 and FY 2022 Month FY 2022 FY 2023 Variance % Change
July 2,354 2,289 (65)$ -2.7%
August 1,886 1,824 (61) -3.2%
September 1,553 1,496 (57) -3.7%
October 1,354 1,305 (49) -3.6%
November 1,153 1,067 (86) -7.5%
December 985 855 (130) -13.2%
January 822 614 (208) -25.3%
February 1,036 842 (194) -18.7%
March 1,176 883 (293) -24.9%
12,319$ 11,175$ (1,143)$ -9.3%
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
TO
T
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n
t
Chart 1: Transient Occupancy Tax (TOT), 11% of Gross Lodging Rents
FY 2022
FY 2023
9.D-5Council Agenda 5-16-2023
Data obtained from Smith Travel Research Inc., a provider of competitive benchmarking, information services, and research to the hotel industry, indicates that the decrease in TOT revenues is largely due to a decrease in occupancy rates and room revenue. On average, occupancy rates decreased by 5.6% during the first nine months of FY 2023, compared to the same period in the previous fiscal year.
Additionally, the average daily rate decreased by 6.0% during the first nine months of FY 2023, compared to the same period in the previous fiscal year.
Based on these trends, staff projects that TOT revenues will reach $15.47 million, representing a $1.53 million shortfall from the budgeted amount, and a 9.1% decrease from the previous year's TOT revenues.
Property related tax revenues are projected to be $139 thousand greater than budget and $247 thousand, or 3.8%, 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 4.0%. 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.
Sales and Use Tax revenues are projected to be $152 thousand greater than budget and $286 thousand, or 7.0%, less 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.
FY 2023 sales tax revenues collected through April 2023 amount to $2,524,359 which is less than the year-ago total of $2,619,153 by $(94,795), or (3.62)% for the same reporting period. Sales tax revenues are typically received by the City 3 months after the month for which it was collected. The following chart illustrates sales tax revenues received in FY 2022 and FY 2023 by the month in which the sales tax was collected, showing a decrease of 3.62% compared to the previous year.
9.D-6Council Agenda 5-16-2023
Based on actual sales tax received to date, the Bradley-Burns uniform sales and use tax is expected to be $130 thousand greater than budget, but $291 thousand less than the prior year.
The public safety sales tax revenues are budgeted at $106 thousand in FY 2023 and are anticipated to be $129 thousand, or $23 thousand greater than budget. This FY 2023 projected amount is $5 thousand greater than the FY 2022 public safety sales tax revenues.
In summary, sales and use tax revenues are projected to be $152 thousand greater than budget and $286 thousand, or 7.0%, less than the prior year.
V. General Fund Expenditures
The FY 2023 Revised Budget expenditures total $46.96 million. Operating expenditures are projected to be $2.43 million less than the Revised Budget based on third quarter expenditures, largely due to not spending $961 thousand for the anticipated Public Safety Facility debt service that was budgeted as part of the Adopted Budget. This project has not yet started and the debt service will be budgeted if the project moves forward. One- time capital costs are projected to be $15.18 million less than the Revised Budget largely due to the timing of the two-year construction period of the Paving Project and other one- time projects.
Assuming consistent expenditure timing throughout the year, total operating expenditures for the third quarter should be approximately 75% of the budget. However, this year, only 63% of the operating budget has been spent in the first three quarters, while only 14% of the one-time capital expenditure budget has been spent. These one-time costs are dependent on the timing of the construction of the 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.
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
Sa
l
e
s
T
a
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Chart 2: Sales Tax 1.0% of Taxable Sales
FY 2022
FY 2023
9.D-7Council Agenda 5-16-2023
Table 6: FY 2023 General Fund Expenditure Budget and Projected Actuals
Some operating costs that do not reflect consistent monthly spending include:
Salaries & Wages and Benefits, which reflects that 65% was spent through the third quarter. Due to several vacancies, staff anticipates that projected actuals will result in $658 thousand in expenditure savings.
Professional Services, which reflects that 60% was spent through the third quarter.
These costs are based on the timing of work performed and are not set amounts per month. Staff projects savings of $214 thousand in this category. Contract Services, which reflects that 64% was spent through the third quarter, reflects a delay in payments, primarily for the Cal Fire contract. The State typically invoices the City in four quarterly installments. However, the invoices are typically sent months after the quarter ends. Staff projects savings of $305 thousand in this category. Operations & Maintenance, which reflects that 63% was spent through the third quarter, indicating a delay in payments and allocations. These costs are typically more consistent throughout the year and are projected to be $208 thousand less than budget.
Debt Service, which reflects that 41% was spent through the third quarter. The primary reason for this spending level compared to budget is that the budget included $961 thousand of debt service for the anticipated Public Safety Facility. Staff projects that all but the $961 thousand will be spent in FY 2023.
Other Expenses and Transfers Out, which reflect that only 58% of the budget has been spent through the third quarter, indicating a delay in payments and allocations.
These costs are typically more consistent throughout the year, where Other Expenses are projected to be $80 thousand greater than budget and Transfers Out are projected to be on budget.
Retiree Medical Insurance costs, which reflects that 33% of budget was spent through the third quarter. The monthly costs are payments to Retirees, but the majority of these A B C D = C/B E F = B - E
($ thousands)
Expenditure Category
FY 2022
Actuals
FY 2023
Revised
Budget
FY 2023
Third
Quarter
Actuals
Third Quarter
Actuals % of
Budget
FY 2023
Projected
Actuals
Variance
(Revised
Bdgt -
Projected
Actuals)
Proj
Actual
% of
Total
Salaries & Wages 7,685$ 9,236$ 6,028$ 65%8,716$ 520$ 29.7% Benefits 5,726 5,798 4,174 72%5,660 138 19.3% Professional Services 3,566 5,118 3,080 60%4,904 214 16.7% Contract Services 2,533 3,106 1,992 64%2,801 305 9.5% Operations & Maintenance 1,583 1,498 947 63%1,290 208 4.4% Debt Service 434 1,393 577 41%432 961 1.5% Other Expenses 788 1,112 646 58%1,032 80 3.5% Transfers Out 503 718 413 58%718 - 2.4% Retiree Medical Insurance 450 475 159 33%475 - 1.6% Other Financing Uses 125 169 129 76%170 (1) 0.6% Capital Projects 17 21 15 73%21 - 0.1% Total Operating Expenditures 23,411$ 28,645$ 18,160$ 63% 26,219$ 2,426$ 89.3% One-time Capital Costs 3,054 18,315 2,561 14%3,138 15,177 10.7% Total Expenditures 26,465$ 46,960$ 20,721$ 44% 29,358$ 17,603$ 100.0%
9.D-8Council Agenda 5-16-2023
payments are contributions to CalPERS for the actuarially determined contribution and are paid toward the end of the fiscal year.
VI. General Fund Contingency Budgets
General Contingency
The FY 2023 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, $967 thousand of this appropriation was allocated, leaving $33 thousand remaining. Details of the allocation are provided in the following table.
Table 7: FY 2023 General Fund General Contingency Budget
Council Contingency
The FY 2023 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 through the third quarter of FY 2023.
VII. Next Level Budget
The FY 2023 Adopted Budget includes $400 thousand in the General Fund non- department contract services account that may be used for various “next-level” contract services. Of this amount, $396 thousand of this appropriation is allocated, leaving $4 thousand remaining. Details of the allocation are provided in the following table.
Beginning Balance July 1, 2022 1,000,000$
Appropriations
Janitorial Services (59,984)
Fireworks Waiver July 4, 2022 (5,449)
Street Sweeping agreement (60,488)
City Hall/Corp Yard Improvement (82,000)
Fingerprinting machine replacement (9,900)
North Shell Beach Drain Project (69,120)
Support projected actual costs over budget (679,814)
Total Appropriations (966,755)
Ending Balance as of March 31, 2023 33,245$
9.D-9Council Agenda 5-16-2023
Table 8: FY 2023 Next- Level Budget
Beginning Balance July 1, 2021 400,000$
Appropriations
Records scanning for Community Development (36,000)
Public Interactive Digital Budget Book and Budget In
Brief (10,000)
Price House Landscaping (35,000)
Pothole repairs (40,000)
Two Maintenance Workers and EV Utility Truck (225,000)
Community Drinking Fountains (50,000)
Total Appropriations (396,000)
Ending Balance as of December 31, 2022 4,000$
9.D-10Council Agenda 5-16-2023
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 projected ending fund balances.
Table 9: 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 25,727,499 31,338,240 29,357,518 1,980,721 27,708,220 15,176,723 12,391,789 1002 Half‐Cent Sales Tax Fund 4,735,902 1,978,994 5,191,455 (3,212,462) 1,523,441 618,202 905,239 Special Revenue Funds
2001 Gas Tax Fund 92,009 381,612 205,231 176,381 268,391 0 268,391 2002 Local Transportation 317,181 208,142 173,388 34,754 351,935 (65) 352,000 2003 PEG Fund 166,492 40,297 139,316 (99,019) 67,472 32,353 35,120 2004 Grants‐NonCapital 343,801 112,000 454,872 (342,872) 929 ‐ 929 2005 Housing In Lieu Fee 3,404,394 20,583 658,977 (638,394) 2,766,000 1,869,846 896,155 2006 LBID Operations 864,743 1,408,335 1,616,011 (207,676) 657,067 16,000 641,067 2006 LBID Improvements (568,864) 1,408,335 346,664 1,061,671 492,807 ‐ 492,807 2007 Chapman Estate 34,433 146,366 92,748 53,618 88,050 ‐ 88,050 Capital Project Funds
3001 Capital Projects (463,088) 16,989,189 11,989,189 5,000,000 4,536,912 4,536,912 ‐ 3002 Public Facilities Fund 849 ‐ ‐ ‐ 849 ‐ 849 3003 Park Development Fund 291,042 40,113 98,368 (58,254) 232,788 147,587 85,200 3101 Circulation Fees 603,543 32,743 477,795 (445,052) 158,491 ‐ 158,491 3102 Impact Fees 637,875 245,326 1,418 243,908 881,783 ‐ 881,783 3103 Developer Impact Fee 57,259 294 ‐ 294 57,553 ‐ 57,553 3201 Underground Utility Fnd 15,979 29 ‐ 29 16,008 ‐ 16,008 Debt Service Funds
4001 PFA Debt Service ‐ 392,863 392,863 ‐ ‐ ‐ ‐ 4002 PF Agency Debt 57 1,668,655 1,638,048 30,607 30,664 ‐ 30,664 4101 Reass 92‐1 Fwy Fthlls 739 ‐ ‐ ‐ 739 ‐ 739 4102 Spyglass 92‐4 12,308 ‐ ‐ ‐ 12,308 ‐ 12,308 Enterprise Funds
6101 Water Enterprise 5,107,388 6,881,129 6,177,952 703,177 5,810,565 5,810,565 ‐ 6102 Water Tax (Lopez/State) 139,495 2,257,518 2,257,518 ‐ 139,495 139,495 ‐ 6103 Water Construction Fund 1,062,040 6,324 6,324 ‐ 1,062,040 1,062,040 ‐ 6104 Water Expansion Fund 1,177,239 53,166 474,577 (421,411) 755,828 755,828 ‐ Water Enterprise Funds 7,486,162 9,198,137 8,916,371 281,766 7,767,928 7,767,928 ‐ 6201 Wastewater Treatment 7,743,324 7,991,828 9,739,581 (1,747,753) 5,995,571 5,995,571 ‐ 6202 Wastewater Capital Proj 1,158,972 124,362 124,362 ‐ 1,158,972 1,158,972 ‐ 6203 Wastewater Expansion 1,927,321 117,368 220,060 (102,692) 1,824,629 1,824,629 ‐ Wastewater Enterprise Fund 10,829,616 8,233,559 10,084,004 (1,850,445) 8,979,171 8,979,171 ‐ 6301 Local Trans Transit 28,113 51 675 (624) 27,489 27,489 ‐ 6401 Pier Enterprise 85,844 77,387 73,872 3,515 89,359 89,359 ‐ 6501 Parking Enterprise 5,565,297 2,218,160 606,966 1,611,195 7,176,492 4,069,990 3,106,502 Internal Service Funds
7101 Technology Service Fund 479,061 935,024 935,024 ‐ 479,061 ‐ 479,061 7201 Motor Vehicle Fund 3,613,438 898,118 898,118 ‐ 3,613,438 2,556,521 1,056,918
9.D-11Council Agenda 5-16-2023
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 $4.74 million beginning fund balance (after including carryforward fund balances). Projected actual revenues are $1.98 million. Projected actual expenditures are $5.19 million. Based on the projected revenues and expenditures for the current year, there is a $905 thousand projected ending fund balance in this fund.
The following table lists the budgeted projects and projected actuals in this fund for FY 2023.
Table 10: Half-Cent Sales Tax Fund FY 2023 Budgeted Projects
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 $92 thousand beginning fund balance (after including carryforward fund balances). Projected actual revenues are $382 thousand and projected actual expenditures are $205 thousand for the Paving project.
Based on the projected revenues and expenditures for the current year, there is a $268 thousand 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 $208 thousand and $173 thousand of expenditures are budgeted for the Paving Project. Based on the projected revenues and expenditures for the current year, there is $352 thousand projected ending fund balance for this fund.
Projects FY 2023 Budget
FY 2023 Projected
Actuals
Paving Project $ 4,885,098 $ 4,885,098 Signalize Bello/Price Canyon Rd 389,000 - Tennis Court relocation 302,891 109,557 North Shell Beach Storm Drain 196,800 196,800 City Hall Parking Lot 25,000 - Cliff Ave and Ocean Blvd Storm Drain 10,869 10,869 Total $ 5,798,789 $ 5,191,455
9.D-12Council Agenda 5-16-2023
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. Charter Communications) with franchise operations within city limits. Expenditures include capital costs related to governmental cable broadcasting and equipment. Based on projected revenues of $40 thousand and projected expenditures of $139 thousand, the PEG Fund is expected to end the year with a $35 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 $896 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 $865 thousand beginning fund balance. City staff projects that LBID assessment revenues and interest earnings will be $1.41 million. Operating expenditures are projected at $1.62 million. The fund is expected to end the year with a $641 thousand 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 $569 thousand 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 $1.41 million. Expenditures include $300 thousand for the Spyglass Sidewalk under the US 101 as part of the Paving Project, $36 thousand for the beach swing replacements at Main and Addie Streets, which is pending installation, and $11 thousand for interest costs on the interfund loan. The third and final interfund loan payment is expected to be $1,077,042. The fund is expected to end the year with a positive $493 thousand unrestricted fund balance. This amount, plus FY 2024 projected assessment revenues are anticipated to support replacement beach wheelchairs and Addie Street improvements and the new restroom project.
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 $34 thousand and is expected to receive $146 thousand of revenues, including $50 thousand from the General Fund for Chapman Estate improvements and the Chapman Inventory projects and $90 thousand from the General Fund to support operations. Proposed private event
9.D-13Council Agenda 5-16-2023
revenues are not anticipated at this time until the accessible restrooms are built. Projected actual expenditures are $93 thousand, including $50 thousand for the Chapman Estate improvements project and $43 thousand for operating costs of the home and grounds and monthly maintenance costs for utilities and gardening. The remaining projected ending balance of this fund is $88 thousand.
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 $291 thousand and is projected to receive $40 thousand in impact fee and permit revenues. Projected actual expenditures total $98 thousand and include the following projects. The following table lists the budgeted projects and projected actuals in this fund for FY 2023.
Table 11: Park Development Fund FY 2023 Budgeted Projects
The fund is expected to end the year with an $85 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 $6.88 million, including $1.36 million in one-time revenues for the Central Coast Blue project and expenditures are projected to be $6.18 million.
The projected ending fund balance for the Water Enterprise Fund is $5.81 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 $7.77 million.
Projects
FY 2023
Budget
FY 2023 Projected
Actuals
Price Historic Park/ Meherin House 94,087$ $ 6,500 Palisades and Chumash Park Improvements 86,925 86,925 South Palisades Outdoor fitness equipment/trail 60,000 - Overhead costs 4,943 4,943
Total 245,955$ 98,368$
9.D-14Council Agenda 5-16-2023
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 $6.00 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 $8.98 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 $86 thousand and projected revenues are $77 thousand, from revenues from the Pier Airstreams. Projected expenditures include $74 thousand for Pier and Pier Plaza operating costs. The Pier Enterprise Fund is expected to end the year with a $89 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 Parking Enforcement Officer, 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 $2.22 million to fund operating expenditures of $576 thousand.
In addition to operating expenditures, the budget includes $4.07 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 City’s parking lots, $500 thousand for the Police and Parking Substation, $101 thousand for the Secure Communication Radio project, $100 thousand for Addie Street Parking and Access Improvements, $70 thousand for additional parking meters, $35 thousand for the Parking Management Study, $4 thousand for a radio system upgrade and reliability project, and $824 for other projects. Of these projects, staff projects only $31 thousand will be spent while the other projects are delayed. The FY 2023 projected ending fund balance is $7.18 million. Of this amount $4.07 million is allocated for the above projects plus some operating expenses that are encumbered, but not yet spent. This leaves a projected $3.11 million ending fund balance.
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 provided a $3.28 million interfund loan from its cash balance to the LBID Fund for the Pier Plaza project. Consequently, the MVR Fund had a $3.61 million
9.D-15Council Agenda 5-16-2023
beginning fund balance. The final payment of the interfund loan is anticipated to be paid this fiscal year. The FY 2023 projected ending fund balance is $1.06 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 16, 2023
Nadia Feeser, Administrative Services Director
City Manager Approval:
9.D-16Council Agenda 5-16-2023