PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.D
SUBJECT/TITLE:
FISCAL YEAR 2023 FOURTH 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 City’s financial status for the fiscal year ending on June 30, 2023, based on preliminary actual revenues and expenditures during Fiscal Year (FY) 2023.
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 $12.43 million, representing an increase of $5.95 million from the previous fiscal year. This increase is primarily due to the projected net operating surplus of $7.73 million in FY 2023, and offset by setting aside $1.41 million of transient occupancy tax (TOT) revenues for the future Public Safety Facility project, 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 2024 Adopted Budget beginning fund balances. 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
In summary, based on preliminary and projected actual revenues and expenditures during FY 2023, the General Fund is expected to end FY 2023 with a $12.43 million unassigned fund balance. This represents an increase of $2.89 million compared to the FY 2023 Revised Budget. The increase is due to projected expenditure savings of $3.58 million, projected operating revenues of $888 thousand, and projected one-time revenues of $68 thousand, compared to the Revised Budget. This is offset by setting aside 1% of the total 11% TOT revenues received, or $1.41 million, for the future Public Safety Facility, and the contribution of $248 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 Adopted Budgets, and the 10-year Capital Improvement Plan. Additionally, a portion of the unassigned fund balance will be allocated to pay for a portion of the Public Safety Facility, which would reduce ongoing borrowing costs.
Council Agenda 9-5-2023 9.D-1
Furthermore, the General Fund includes a Budget Stabilization Reserve set-aside of $2.00 million.
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 31,369 32,257 888
c Operating Expenditures 23,411 28,111 24,527 (3,584) d = b - c Net Operating Surplus/(Deficit) 9,092 3,258 7,730 4,473 e One-time Revenues 1,250 301 368 68
f One-time/Capital Expenditures 3,054 17,747 8,090 (9,657) g =
a+d+e-f Ending Fund Balance 25,488$ 11,539$ 25,736$ 14,198$ Unassigned Fund Balance 6,474$ 9,539$ 12,425$ 4,292$ Committed Fund Balance 17,259 - 9,657 9,657
Contribution to Reserves (245) - 248 248
Budget Stabilitation Set-Aside 2,000 2,000 2,000 -
TOT 1% Set-Aside for PSF 1,406
Council Agenda 9-5-2023 9.D-2
Table 2: FY 2023 General Fund, Beginning Fund Balance
III.General Fund Reserve
The City maintains various General Fund reserves totaling $7.92 million for emergency operations, building depreciation, and risk management. These reserves are crucial in order to avoid disrupting the City’s operations following unanticipated events. The reserves are shown in the table below, followed by a summary of each reserve.
Table 3: General Fund Reserves
Reserve Amount ($ thousands)
General Fund 25% Reserve $7,170
City Building Reserve 500
Risk Management Reserve 250
Total $7,920
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 $7.03 million, which is 25% of the total FY 2023 budgeted annual operating expenditures of $28.11 million. Currently, the General Fund Reserve is $7.17 million, of which $7.15 million is invested in various securities and $16 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 $248 thousand to meet the 25% operating expenditure budget in FY 2024.
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 the 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 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
Council Agenda 9-5-2023 9.D-3
IV. General Fund Revenues
The FY 2023 Revised Budget revenues total $32.69 million. FY 2023 projected actual revenues are $32.28 million, or $416 thousand less than budget. Compared to the previous year, FY 2023 projected actual revenues are $1.48 million, or 4.4%, less than FY 2022. This decrease over the prior year is largely due to a projected reduction of $1.53 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 $1.51 million less than budget and are projected to be $1.53 million, or 9.0%, less than the previous year’s TOT revenues. TOT revenues are generated by charging 11% of the rent for all lodging businesses that provide occupancy for a period of 30 consecutive days or less. This decrease in TOT revenues reflects a significant drop in revenues received during FY 2023.
The decrease in TOT revenues can be attributed to double-digit percentage declines in TOT revenues from December 2022 through March 2023 compared to the same months in the previous fiscal year. This was largely due to the atmospheric river that caused flooding in California, resulting in fewer visitors to the beach. Additionally, the abundance of snow in the mountains served as an attractive alternative to visiting the beach. The following chart further illustrates FY 2023 TOT revenues collected in comparison to FY 2022.
A B C D = C - B E = C - A F = C/A-1
($ 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$ 15,480$ (1,510)$ (1,531)$ -9.0% 47.4% Property Related Taxes 6,480 6,588 6,933 345 453 7.0% 21.3% Sales and Use Tax 4,089 3,650 3,947 297 (142) -3.5% 12.1% Other revenues 1,465 1,853 2,109 256 643 43.9% 6.5% Permits 1,356 1,256 1,327 71 (29) -2.2% 4.1% Departmental Revenues 625 760 856 95 230 36.9% 2.6% Franchise Taxes 688 631 800 169 112 16.3% 2.5% Business Tax 241 211 290 79 49 20.3% 0.9% Transfers In 140 140 140 - - 0.0% 0.4% Grants 44 93 51 (42) 6 0.0% 0.2% Other Finan Sources 47 92 114 22 66 139.2% 0.3% Other Taxes 218 78 158 80 (60) -27.5% 0.5% Intergovernmental Revenue 97 48 52 4 (44) -45.8% 0.2% Total Operating Revenues 32,502$ 32,390$ 32,256$ (134)$ (246)$ -0.8% 98.9% One-time Revenues 1,250 301 368 68 (882) -70.5% 1.1% Total Revenues 33,752$ 32,691$ 32,625$ (66)$ (1,127)$ -3.3% 100.0% Council Agenda 9-5-2023 9.D-4
Chart 1. TOT Revenues FY 2023 compared to FY 2022
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 5.0% during FY 2023, compared to the same period in the previous fiscal year. Additionally, the average daily rate decreased by 5.8% during FY 2023, compared to the same period in the previous fiscal year.
Based on these trends, staff projects that TOT revenues will reach $15.48 million, representing a $1.51 million shortfall from the budgeted amount, and a 9.0% decrease from the previous year's TOT revenues.
Property-related tax revenues are projected to be $245 thousand greater than budget and $453 thousand, or 7.0%, greater than previous year’s property-related tax 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. -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
TO
T
A
m
o
u
n
t
FY 2022
FY 2023
Council Agenda 9-5-2023 9.D-5
Sales and Use Tax revenues are projected to be $297 thousand greater than budget and $142 thousand, or 3.5%, 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.
Based on actual sales tax received to date, the Bradley-Burns uniform sales and use tax is expected to be $284 thousand greater than budget, but $136 thousand less than the prior year. Based on actual revenues received to date and projections from the City’s sales tax consultant, City staff estimates that Bradley Burns sales and use tax revenues will be $3.83 million. 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 3.4% compared to the previous year.
Chart 2. Bradley Burns Sales Tax Revenues FY 2023 compared to FY 2022
The public safety sales tax revenues are budgeted at $106 thousand in FY 2023 and are anticipated to be $119 thousand, or $12 thousand greater than budget. This FY 2023 projected amount is $6 thousand less than the FY 2022 public safety sales tax revenues.
In summary, sales and use tax revenues are projected to be $297 thousand greater than budget and $142 thousand, or 3.5%, less than the prior year.
V. General Fund Expenditures
The FY 2022 Revised Budget expenditures total $45.86 million and projected actual expenditures total $32.62 million. Operating expenditures are projected to be $3.58 million less than the Revised Budget. About $258 thousand of these expenditure savings will be carried forward to next year, leaving $3.33 million of savings that contribute to the ending unassigned fund balance. One-time capital costs are projected to be $9.66 million $-
$100,000
$200,000
$300,000
$400,000
$500,000
Sa
l
e
s
T
a
x
A
m
o
u
n
t
FY 2022
FY 2023
Council Agenda 9-5-2023 9.D-6
less than budget based on the timing of cash flow for these one-time projects. These savings will be carried forward to the next year and do not contribute to an increase in fund balance.
Table 5. FY 2023 General Fund Expenditure Budget and Projected Actuals 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 $33 thousand remaining. Details of the allocation are provided in the following table.
AB CD = B - C
($ thousands)
Expenditure Category
FY 2022
Actuals
FY 2023
Revised
Budget
FY 2023
Projected
Actuals
Variance
(Revised
Bdgt -
Projected
Actuals)
Proj
Actual
% of
Total
Salaries & Wages 7,685$ 9,454$ 8,317$ 1,137$ 25.5% Benefits 5,726 5,880 5,302 578 16.3%
Professional Services 3,566 5,149 4,298 852 13.2% Contract Services 2,533 3,110 2,719 391 8.3%
Operations & Maintenance 1,583 1,515 1,341 175 4.1% Other Expenses 788 1,112 856 256 2.6%
Transfers Out 503 718 676 41 2.1%
Retiree Medical Insurance 450 475 443 33 1.4%
Debt Service 434 432 432 0 1.3%
Other Financing Uses 125 169 143 27 0.4%
Capital Projects 17 95 2 94 0.0%
Total Operating Expenditures 23,411$ 28,111$ 24,527$ 3,584$ 75.2% One-time Capital Costs 3,054 17,747 8,090 9,657 24.8% Total Expenditures 26,465$ 45,858$ 32,617$ 13,241$ 100.0% Council Agenda 9-5-2023 9.D-7
Table 6: 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 $4 thousand remaining. Details of the allocation are provided in the following table.
Table 7: FY 2023 Next-Level Budget
Beginning Balance July 1, 2022 1,000,000$
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 June 30, 2023 33,245$
Beginning Balance July 1, 2022 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 June 30, 2023 4,000$
Council Agenda 9-5-2023 9.D-8
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 2024 Adopted Budget beginning fund balances.
Table 8. 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 32,625,451 32,616,786 8,665 25,736,164 9,657,222 14,424,630 1002 Half‐Cent Sales Tax Fund 4,735,902 2,063,691 3,664,615 (1,600,924) 3,134,978 1,941,888 1,193,090 Special Revenue Funds
2001 Gas Tax Fund 92,009 364,102 205,231 158,871 250,880 ‐ 250,880 2002 Local Transportation 317,181 278,688 173,388 105,300 422,481 299,935 122,546 2003 PEG Fund 166,492 31,410 133,991 (102,581) 63,911 27,987 35,924 2004 Grants‐NonCapital 343,801 102,202 366,984 (264,782) 79,019 79,017 2 2005 Housing In Lieu Fee 3,404,394 39,066 1,142,708 (1,103,642) 2,300,752 1,636,115 664,637 2006 LBID Operations 864,743 1,415,483 1,548,273 (132,790) 731,953 16,000 715,953 2006 LBID Improvements (568,864) 1,415,483 339,580 1,075,903 507,039 ‐ 507,039 2007 Chapman Estate 34,433 184,340 138,176 46,164 80,596 ‐ 80,596 Capital Project Funds
3001 Capital Projects (463,088) 15,618,216 15,093,217 524,999 61,910 61,910 ‐ 3002 Public Facilities Fund 849 7 ‐ 7 856 ‐ 856 3003 Park Development Fund 291,042 151,090 100,926 50,164 341,206 145,029 196,177 3101 Circulation Fees 603,543 70,352 387,835 (317,483) 286,060 89,960 196,101 3102 Impact Fees 637,875 159,309 1,418 157,891 795,766 (0) 795,766 3103 Developer Impact Fee 57,259 1,318 ‐ 1,318 58,577 ‐ 58,577 3201 Underground Utility Fnd 15,979 130 ‐ 130 16,110 ‐ 16,110 Debt Service Funds
4001 PFA Debt Service ‐ 392,863 392,863 ‐ ‐ ‐ ‐ 4002 PF Agency Debt 57 708,386 707,554 832 889 ‐ 889 4101 Reass 92‐1 Fwy Fthlls 739 6 ‐ 6 745 ‐ 745 4102 Spyglass 92‐4 12,308 100 ‐ 100 12,409 ‐ 12,409 Enterprise Funds
6101 Water Enterprise 5,107,388 7,162,512 5,545,666 1,616,846 6,724,234 6,724,234 ‐ 6102 Water Tax (Lopez/State) 139,495 1,951,176 1,881,265 69,911 209,406 209,406 ‐ 6103 Water Construction Fund 1,062,040 243,779 228,420 15,360 1,077,400 1,077,400 ‐ 6104 Water Expansion Fund 1,177,239 109,218 474,577 (365,359) 811,880 811,880 ‐ Water Enterprise Funds 7,486,162 9,466,685 8,129,927 1,336,758 8,822,920 8,822,920 ‐ 6201 Wastewater Treatment 7,743,324 8,747,077 6,903,394 1,843,683 9,587,007 9,587,007 ‐ 6202 Wastewater Capital Proj 1,158,972 245,105 165,635 79,470 1,238,442 1,238,442 ‐ 6203 Wastewater Expansion 1,927,321 192,888 220,185 (27,296) 1,900,024 1,900,024 ‐ Wastewater Enterprise Fund 10,829,616 9,185,071 7,289,214 1,895,857 12,725,473 12,725,473 ‐ 6301 Local Trans Transit 28,113 226 900 (674) 27,439 27,439 ‐ 6401 Pier Enterprise 85,844 77,509 84,950 (7,441) 78,404 78,404 ‐ 6501 Parking Enterprise 5,565,297 2,484,354 938,486 1,545,868 7,111,165 4,011,048 3,100,117 Internal Service Funds
7101 Technology Service Fund 479,061 1,022,228 1,054,707 (32,480) 446,581 ‐ 446,581 7201 Motor Vehicle Fund 3,613,438 1,212,008 1,224,859 (12,852) 3,600,587 1,491,656 2,108,930 Council Agenda 9-5-2023 9.D-9
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 $2.06 million. Projected actual expenditures are $3.66 million. After accounting for a $1.94 million carryforward of project budgets, there is a projected $1.19 million projected ending fund balance in this fund. The following table lists the budgeted projects in this fund for FY 2023.
Table 9: Half-Cent Sales Tax Fund FY 2023 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 $92 thousand beginning fund balance (after including carryforward fund balances). Projected actual revenues are $364 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 $251 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 $279 thousand and $173 thousand of expenditures are budgeted for the Paving Project. Based on the projected revenues and expenditures for the current year, and after carrying forward $300 thousand to next fiscal year, there is $123 thousand projected ending fund balance for this fund.
Projects FY 2023 Budget
FY 2023 Projected
Actuals
Paving Project $ 4,885,098 $ 3,357,209 Signalize Bello/Price Canyon Rd 389,000 - Tennis Court relocation 99,737 99,737 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 $ 5,606,504 $ 3,664,615
Council Agenda 9-5-2023 9.D-10
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 $31 thousand and projected expenditures of $134 thousand, the PEG Fund is expected to end the year with a $36 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 $665 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 $1.42 million. Operating expenditures are projected at $1.55 million. The fund is expected to end the year with a $716 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 $1.42 million. Expenditures include $300 thousand for the Spyglass Sidewalk under the US 101 as part of the Paving Project, $29 thousand for the beach swing replacements at Main and Addie Streets, 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 $507 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 $184 thousand of revenues, including $82 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 Council Agenda 9-5-2023 9.D-11
revenues are not anticipated at this time until the accessible restrooms are built. Projected actual expenditures are $138 thousand, including $82 thousand for the Chapman Estate improvements project and $56 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 $81 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 $151 thousand in impact fee and permit revenues. Projected actual expenditures total $101 thousand and include the following projects. The following table lists the budgeted projects and projected actuals in this fund for FY 2023.
Table 10: Park Development Fund FY 2023 Budgeted Projects The fund is expected to end the year with an $196 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 $7.16 million, including $2.96 million in one-time revenues for the Central Coast Blue project and expenditures are projected to be $5.55 million.
The projected ending fund balance for the Water Enterprise Fund is $6.72 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 $8.82 million.
Projects
FY 2023
Budget
FY 2023 Projected
Actuals
Price Historic Park/ Meherin House 94,087$ $9,058 Palisades and Chumash Park Improvements 86,925 86,925 South Palisades Outdoor fitness equipment/trail 60,000 - Overhead costs 4,943 4,943
Total 245,955$ 100,926$
Council Agenda 9-5-2023 9.D-12
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 $9.59 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 $12.73 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 $78 thousand, from revenues from the Pier Airstreams. Projected expenditures include $85 thousand for Pier and Pier Plaza operating costs. The Pier Enterprise Fund is expected to end the year with a $78 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 $2.48 million to fund operating expenditures of $623 thousand.
In addition to operating expenditures, the budget includes $4.33 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 City’s parking lots, $500 thousand for the Police and Parking Substation, $326 thousand for additional parking meters, $101 thousand for the Secure Communication Radio project, $100 thousand for Addie Street Parking and Access Improvements, $35 thousand for the Parking Management Study, $4 thousand for a radio system upgrade and reliability project, and $231 for other projects. Of these projects, staff projects $315 thousand will be spent while the other projects are delayed.
The FY 2023 projected ending fund balance is $7.11 million. Of this amount $4.01 million is allocated for the above projects plus some operating expenses that are encumbered, but not yet spent. This leaves a projected $3.10 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 Council Agenda 9-5-2023 9.D-13
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 $2.11 million, which are accumulated funds necessary to fund future replacements.
Conclusion and Recommendation
Staff recommends that Council receive this report as information only.
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
Meeting Date: September 5, 2023 Prepared by:
Nadia Feeser, Administrative Services Director
Interim City Manager Approval:
Council Agenda 9-5-2023 9.D-14