City of Richmond
Fiscal Year 2022-23
Draft Operating Budget
Shasa Curl, City Manager
Delmy Cuellar, Director of Finance
June 7, 2022
1 DRAFT
DRAFT
Overview
▪ Background
▪ General Fund Revenue Assumptions
▪ General Fund Revenue Estimates
▪ General Fund Expenditure Assumptions
▪ General Fund Expenditure Estimates
▪ Cost Pool/Risk Management/General Liability
▪ Proposed FY 22-23 Operating Transfers Out
▪ Draft FY 2022-23 General Fund Balanced Budget
▪ Proposed Budget Adjustments
▪ Capital Improvement Projects Budget
▪ ARPA & Reimagining Public Safety
▪ Next Steps & Questions 2
Background - First Draft – May 3, 2022
3 GENERAL FUND FY2022-23
DRAFT BUDGET
PENDING
ADJUSTMENTS
FY2022-23 DRAFT BUDGET
AFTER ADJUSTMENT
TOTAL REVENUE 204,878,270 1,482,100 206,360,370
TOTAL EXPENSE 206,767,616 (435,100) 206,332,516
Net (-Gap)/+Surplus (1,889,346) 1,047,000 27,854
General Fund Revenue Assumptions to Date
Revenue Category Assumptions
PROPERTY TAXES Assessed Value (AV) Growth based on (1) most properties increasing by State posted CPI (usually 2% max), (2) plus, for the properties that sold in 2021, the new value minus the previous value, and (3) the value of the Chevron Refinery. Staff usually assumes the Chevron refinery will stay the same - 0% AV growth for that component.
SALES & USE TAX 4% growth per the consultant; Vehicle License Fee Backfill Swap tied to AV growth, same as Secured Property Taxes.
UTILITY USERS TAX (UUT) Analysis in part provided by consultant. Growth rates applied to individual revenue streams with the UUT category - cable and Telecom historically have been going down due to industry changes. Settlement amount is set and due to go away after FY24-25. Cap amount paid by Chevron is based on Energy Services CPI for the Bay Area which through the posted rates through February is extremely high.
OTHER TAXES Each revenue stream within Other Taxes changes year-to-year based on independent influences; both garbage fees are up by 4% based on historical changes; Hotel Tax up 5% based on rebounding industry; Transfer Tax budgeted amount based on formula in Guiding Fiscal Policy that mandates we use the mean since implementation of the voter approved tiered structure; gas and electricity franchise changes stem from using same growth factor as UUT .
LICENSES, PERMITS & FEES Main item is Business Tax and are using growth factor of 2% as a conservative CPI. Still new revenue stream so we still do not know what the full year amount will be.
FINES & FORFEITURES Parking citations flat and Muni Court Fines with 1.4% growth USE OF MONEY & PROPERTY Flat - zero growth
CHARGES FOR SERVICES Most items entered by corresponding departments based on their estimated level of service and total corresponds to 4.3% growth OTHER REVENUE Very unpredictable. Usually very little budgeted here, but items get added as received.
RENTAL INCOME Rental Income is determined based on the Council approved agreements and/or fees established through the Master Fee Schedule INTERGOV STATE TAXES Motor Vehicle Fees increase based on YTD actuals in FY21-22 INTERGOV OTHER GRANT Only grants with award letters are budgeted PROCEED FROM SALE PROPERTY Pending budget, based on historic trend OPERATING TRANSFERS IN Based on Analysis of the Pension Tax Override fund, estimated AV growth, minus scheduled uses. Left over funds are transferred to the General Fund 4 General Fund Revenue Estimates
FY 2021-22 FY 2022-23 PCT
GENERAL FUND REVENUES CY* REVISED BUDGET DRAFT BUDGET CHANGE PROPERTY TAXES 45,233,561 46,056,962 1.8%
SALES & USE TAX 51,993,736 55,282,200 63%
UTILITY USERS TAX 46,522,663 49,963,589 7.4%
OTHER TAXES 20,953,343 21,638,449 3.3%
LICENSES,PERMITS & FEES 10,354,335 11,129,402 7.5%
FINES & FORFEITURES 468,897 475,275 1.4%
USE OF MONEY & PROPERTY 236,079 236,079 0.0%
CHARGES FOR SERVICES 3,424,459 3,571,292 4.3%
OTHER REVENUE 1,471,927 187,500 (87.3%)
RENTAL INCOME 747,268 874,506 17.0%
INTERGOV STATE TAXES 90,000 125,000 38.9%
INTERGOV STATE GRANT 187,878 175,000 (6.9%)
INTERGOV OTHER GRANT 153,569 253,569 65.1%
PROCEEDS FROM SALE OF PROPERTY 100,000 100,000 0.0%
LOAN/BOND PROCEEDS 36,400 - (100%)
OPERATING TRANSFERS IN 10,204,224 16,414,570 60.9%
TOTAL REVENUE 192,180,338 206,483,393 7.4%
5*Current Year (CY)
General Fund Expenditure Assumptions to Date
Expenditures Category Assumptions/Descriptions
SALARIES AND WAGES IAFF, RFMA, RPMA, RPOA COLA pending, Executive, Local 21 and Local 1021 5 percent COLA as of 1/1/2023, other pays based on existing MOUs and current enrollments.
PAYRLL/FRINGE BENEFIT Healthcare cost at current rates as of FY2022, OPEB per current Actuarial report, Retirement rates per current CalPERS rates. Worker's Comp rate 1 % increase in each category PROFESSIONAL & ADMIN Baseline budget, with one-time appropriations removed, Campus Bay Litigation Costs of $900K, City Attorney Legal Services Contract
OTHER OPERATING Baseline budget with one-time appropriations removed.
UTILITIES Baseline budget
EQPT & CONTRACT SVCS Baseline Budget based on historical actuals PROVISN FOR INS LOSS Insurance Premiums
COST POOL (Vehicle Replacement) Fleet Services provided list with Priority 1 items COST POOL (General Liability) 5% increase from current year budget COST POOL (Cost Allocation Plan - Admin Charges) 5% increase from current year budget COST POOL (Civic Center Debt Allocation) Charge derived from the debt service, cash balance, and square footage used by divisions ASSET/CAPITAL OUTLAY As needed
DEBT SVC EXPENDITURE Debt Service Schedule, maintained by Treasury A87 COST PLAN REIMBS Based on COST POOL (Cost Allocation Plan - Admin Charges) GRANT EXPENDITURES Based on the awarded grants
OPER XFERS OUT Recurring and onetime subsidies to non-GF programs. 6*International Association of Fire Firefighters (IAFF), Richmond Fire Management Association (RFMA), Richmond Police Manageme nt Association (RPMA), Richmond Police Officers Association (RPOA) General Fund Expenditures
GENERAL FUND EXPENDITURES FY2021-22 REVISED
BUDGET
FY2022-23 PROPOSED
BUDGET PCT CHANGE
PAYROLL AND FRINGE BENEFITS $137,965,780 $146,930,765 6.5% PROF & ADMIN $16,480,924 $14,593,327 (11.0%)
OTHER OPERATING $7,222,113 $5,896,395 (18.0%)
UTILITIES $5,002,018 $5,143,076 3.0%
EQPT & CONTRACT SVCS $2,555,148 $2,601,511 1.8%
PROVISN FOR INS LOSS $27,673 $25,725 (.90%)
COST POOL $14,455,436 $15,277,766 5.7%
ASSET/CAPITAL OUTLAY $1,430,004 $1,422,136 (0.6%)
DEBT SVC EXPENDITURE $1,065,359 $1,037,009 (2.7%)
A87 COST PLAN REIMBS ($3,516,104) ($3,534,233) 0.5%
GRANT EXPENDITURES $82,500 $2,500 (97.0%)
OPER XFERS OUT $12,801,419 $12,733,774 (1.8%)
TOTAL EXPENDITURES $195,575,271 $201,969,824 3.3%
7 What is Cost Pool?
Cost
Pool
New Vehicles
Risk Mgmt-General Liability City’s Overhead (Admin)
Civic Center Rent
8 Cost Pool - New Vehicles Charge
• Department
Requests a Vehicle
Cost Pool-
New Vehicles
• Funds are
collected in
Equipment
Replacement Fund
Fleet Services • Vehicles are
purchased
Manufacturer
9 Cost Pool- Risk Management Reserve Fund
General
Liability
Charges from
Departments
Workers
Comp, a
Payroll
Deduction
10 Administrative Costs (Risk
Management staff salaries, benefits
and operating expenses)
These costs are then allocated to City
Departments using a formula that
includes number and costs of claims,
number of employees, and payroll costs
to determine the percentage of their
contribution.
Cost Pool-Cost Allocation Plan – (Overhead)
Facility and Equipment
Maintenance, Depreciation
Finance, Human Resources,
Information Technology
City Manager, City Clerk, City
Attorney
Core Program
11 Cost Pool - Civic Center Rent
Risk Management - $19K
Rent Program - $48K
Encroachments - $65K
Waster Resource Recovery - $195K
Planning & Building - $842K
General Fund - $5.6M
12 FY2022-23 Civic
Center Mortgage
Payment - $7.8 M
Risk Management Reserve
• The Risk Management Budget is comprised of:
• Claims Costs
• Insurance Premiums
• Legal Costs
• Administrative Costs (Risk Management staff salaries, benefits and operating expenses)
• These costs are then allocated to City Departments using a formula that includes number and costs of claims, number of employees, and payroll costs to determine the percentage of their contribution. 13 Risk Management Budget Comparison
14 FY 22/23 Risk Management Budget
• The original, proposed Risk Management budget increased by 14.5% due to increased claims costs, self-insured retention threshold increase, and higher insurance premiums.
• Through the budget development process, the budget was refined and adjusted.
• To reduce the fiscal impact on City departments, a reduced budget has been submitted to Council with the plan to revisit the budget at mid - year.
15 The Risk Management Insurance Reserves
• The Insurance Reserves is the mechanism through which the allocations flow and Risk Management program is funded.
• Funding at the 80% confidence level, which is mandated by Council resolution, provides an 80% chance of being able to pay for the self- insured portion of the City’s Worker's Compensation and General Liability claims. This is a benchmark for self-insurance program funding throughout the industry for public entities.
• The City is currently at the 61% confidence level and is projected to be at the 59% confidence level at the close of this fiscal year. 16 Subsidies Provided Through lowered Overhead
CENTRAL SERVICES FY22-23 OVERHEAD PROGRAMS PAYING FY2021-22 FY2022-23 FY2022-23 FY2022-23 CHARGING OVERHEAD DRAFT BUD. RECOVERY OVERHEAD BUDGET C.A.P.* DRAFT BUD. SUBSIDY CITY MANAGER 835,732 180,581 TRANSPORTATION 209,716 744,016 220,202 523,814 CITY CLERK 1,106,494 70,514 HILLTOP DISTRICT 58,375 228,193 61,294 166,899 CITY ATTORNEY 2,911,735 319,232 MARINA BAY DISTRICT 34,312 193,954 36,028 157,926 FINANCE 6,217,453 1,152,685 RENT CONTROL 52,481 377,170 52,481 324,689 HUMAN RESOURCES 2,339,686 184,557 CR-PLANNING & BLD. 840,806 1,095,984 882,846 213,138 PUBLIC WORKS 31,276,930 647,916 CR-ENGINEERING - 54,291 - 54,291 INFORMATION TECH. 4,650,267 411,503 ENCROACHMENT SVCS 3,192 148,971 3,352 145,619 NON. DEPARTMENTAL 24,110,190 567,245 HOUSING ADMIN. 190,087 91,189 105,019 - CDBG 25,641 10,841 26,923 -
EMPLOYMENT & TRN. - 829,110 411,201 417,909
PORT OF RICHMOND 428,033 235,792 449,435
WASTEWATER 330,310 728,090 346,826 381,264
STORMWATER 86,219 106,905 90,530 16,375
KCRT - CABLE T.V . 167,612 201,235 175,993 25,242
RHA – NEVIN PLAZA - 78,878 78,878 -
RHA – NYSTROM VILLAGE 41,183 41,183
RHA – CENTRAL OFFICE 20,374 20,374
RISK MANAGEMENT 490,618 627,322 515,149 112,173
SA-ADMINISTRATION 50,000 1,829 13,896 -
Total 74,015,734 3,534,234 Total 2,967,402 5,815,327 3,531,610 2,539,339 17 *C.A.P . – Cost Allocation Plan –Admin Charges A.K.A. OVERHEAD ** Rent Control CAP is recommended to stay unchanged, the attachments will be updated for June 21, 2022, Council Meeting What are Operating Transfers Out?
18 Based on Policy Guidance Subsidy
• General Fund provides subsidy to a program when it is not fiscally self sustaining and City Council approves Operating Transfer Out to support the specific program.
Required SubsidyMandate
• A mandated subsidy is generally due to a certain agreement, a voter approved measure, maintenance of effort, or a required grant match etc. There may be other reasons for a required subsidy.
Proposed FY 22-23 General Fund Operating Transfers Out
OPERATING TRANSFERS OUT AMOUNT
Equipment Services 326,018
Debt Service-2007 Lease Revenue 1,418,372
Hilltop Landscaping and Maintenance District 229,115
Marina Bay Landscaping and Maintenance District 462,436 Employment & Training: Internal Service Allocation Subsidy 411,201 Employment & Training: Grant Writing and Matches 75,000 Employment & Training: Contract Compliance 350,000
Summer Youth Program 325,000
IT Equipment Replacement 100,000
Department of Children and Youth 3,936,896
Richmond Housing Authority 1,539,324
General Pension 88,077
Reimaging Public Safety Unhoused Intervention Plan 1,320,000 Reimaging Public Safety Youthworks 1,980,000
Garfield Pension 12,408
TOTAL $12,573,847
19 Draft FY 2022-23 General Fund Balanced Budget
GENERAL FUND FY2022-23 DRAFT BUDGET
TOTAL REVENUE 206,383,394
TOTAL EXPENSE 201,869,824
Net (-Gap)/+Gap 4,513,570
20 June 7, 2022
Proposed Adjustments Before Final Adoption of the Balanced Budget 21 Proposed Budget Savings/Revenue Adjustments Proposed Appropriations Current Estimated Surplus 4,513,570 COLA/Class & Comp 7,300,000 Vacancy Saving Factor-6% 8,339,184 Inflation Factor - 5% 1,410,215 Increase Transfer In from PTOR* 149,000 City Attorney Legal Services 1,500,000 Other Savings 738,462 Point Molate Expenses 1,000,000
Additional Paving Index Investment 1,000,000
Housing First 425,000
Public Bank 750,000
Reparations, Equity, and Inclusion
Implementation – Year One
250,000
Literacy Fair 5,000
Short-term Emergency Housing Interventions 100,000
New City-Wide Appropriations Request Not Included
City-Wide Positions Request Not Included
Total Available 13,740,216 Total Appropriations 13,740,215 CIP -Total Budget $76,767,879 (Major Projects)
Boorman Park Revitalization - $3,490,204
CCTV Truck - $515,000
Harbour 8 Park Extension - $6,194,260
Marina Bay Force Main Extension - $350,000
22 FY 21-22 American Rescue Plan Act Budget
23*Additional $7,487.59 received in interest through December 2021 Update through April 15, 2022
ARPA BUDGET ACTUAL ENCUMBRANCES REMAINING DEPARTMENT
ARPA REVENUE -TOTAL (27,740,723)$ (13,870,362)$ -$ (13,870,362)$ Project Code ARPA EXPENDITURES
AR231 MAIN LIBRARY - HVAC IMPROVEMENTS 500,000$ -$ 48,000$ 452,000$ Public Works AR232 NEVIN COMMUNITY CENTER - HVAC IMPROVEMENTS 500,000$ 10,250$ 39,750$ 450,000$ Public Works AR233 RECREATION CENTER ADMINISTRATION - HVAC IMPROVEMENTS 500,000$ 25,025$ 23,975$ 451,000$ Public Works AR234 RICHMOND MUSEUM - HVAC IMPROVEMENTS 500,000$ -$ 32,600$ 467,400$ Public Works AR235 COMMUNITY BEAUTIFACTION 1,000,000$ -$ -$ 1,000,000$ Public Works -$
AR236 COMMUNITY NEEDS ASSESSMENT 250,000$ -$ 245,485$ 4,515$ Community Services AR237 ENVIRONMENTAL PLANNING CONSULTANT 300,000$ -$ -$ 300,000$ Economic Development AR238 HOUSING & DEVELOPMENT INITIATIVES/RICHMOND RAPID RESPONSE FUND 1,000,000$ 15,889$ 184,111$ 800,000$ Community Development AR239 RECOVERY OF LOST REVENUE 4,000,000$ -$ -$ 4,000,000$ Finance AR240 NORTH RICHMOND PUMP STATION 1,800,000$ -$ -$ 1,800,000$ Public Works AR241 MARTIN LUTHER KING, JR. PARK TURF FIELD 150,000$ -$ -$ 150,000$ Public Works Total - ARPA FY2021-22 10,500,000$ 51,164$ 573,921$ 9,874,915$ REMAINING ARPA ALLOCATION (17,240,723)$
AMERICAN RESCUE PLAN ACT FY 21-22 BUDGET
YOUTHWORKS
$1.98 Million
Community Crisis Response
$1 Million
Office of Neighborhood Safety
$2.3 Million
Unhoused Intervention
$1.8 Million
24 Proposed FY 2022 – 23 Reimagining Public Safety Budget FY 2022-23 Budget Development Timeline
25 ACTION / ACTIVITY DATE
Budget kick off meeting December 9, 2021
Budget Input Window December 9, 2021, to January 10, 2022 Budget Hearings: City Manager, Finance Director, and Budget Division meet with Departments February 14 - February 28, 2022 Community Budget Meetings March 16 through April 11, 2022 Department Budget Presentations April 19 - June 7, 2022 First Draft Budget May 3, 2022
Second Draft Budget June 7, 2022
Adopt Budget By June 30, 2022
THANK YOU
&
QUESTIONS?
26 “Juneteenth Freedom Underpass”
South 37th Street Underpass
Desi Mundo (2022)