June 21, 2022
Finance Department
DATE: June 21, 2022
TO: Mayor Butt and Members of the City Council
FROM: Shasa Curl, City Manager
Anil Comelo, Interim Deputy City Manager
Delmy Cuellar, Director of Finance
LaShonda White, Interim Director of Library and
Community Services
Mubeen Qader, Budget Administrator
Antonio Banuelos, Accounting Manager
Subject: Adopt Fiscal Year (FY) 2022-2023 Proposed Operating Budget and FY 2022-2023 through 2026-2027 Capital
Improvement Plan.
FINANCIAL IMPACT: There is no financial impact associated with adopting the FY 2022-2023 Annual Operating Budget and FY 2022-
2023 through FY 2026-2027 Five-Year Capital
Improvement Program. At this point, the General Fund
budget is structurally balanced with revenue and
expenditures equal to $206,632,248.
PREVIOUS COUNCIL
ACTION:
April 19, 2022, April 26, 2022. May 3, 2022, May 17,
2022, May 24, 2022, and June 7, 2022
STATEMENT OF THE
ISSUE:
City staff is submitting the Fiscal Year (FY) 2022-2023 Annual Operating Budget and the FY 2022-2023 to
FY 2026-2027 Five-Year Capital Improvement Program
Budget to City Council for adoption prior to the June 30, 2022, deadline.
AGENDA
REPORT
June 21, 2022
RECOMMENDED ACTION:
ADOPT resolutions approving: (1) Fiscal Year (FY) 2022- 2023 Annual Operating Budget, and (2) FYs 2022-2023
to 2026-2027 Five-Year Capital Improvement Program
Budget – City Manager’s Office/Finance Department
(Shasa Curl/Delmy Cuellar 510-620-6740).
DISCUSSION:
On April 20, 2021, the Richmond City Council adopted fiscal guidelines to enhance transparency, fiscal responsibility, and sustainability, and provided a set of budgeting principles to navigate through economic challenges. The guidelines were developed to help City staff, City Council, and the community at large address community needs and services throughout the budget process. The guidelines were developed to maximize public participation and requires City staff to engage with the City Council and the public to reflect community aspirations in the budget.
During the budget development process, City staff facilitated four community budget meetings and a meeting with the labor unions to receive input from various stakeholders. City departments presented their budgets at the City Council meetings from April 19, 2022, through June 7, 2022, and discussed their accomplishments and goals for the next year, along with their staffing plans and proposed budgets. City staff also met with several City councilmembers to address specific questions regarding various aspects of the budget development process. City Council also received presentations from NBS Consulting regarding the Cost Allocation Plan (CAP) and Human Resources/Risk Management regarding internal service charges such as Worker’s Compensation and General Liability charges.
In accordance with Richmond Municipal Code Section 2.61.010, on May 3, 2022, the City Manager submitted the first draft of the FY 2022-2023 operating budget, and FYs 2022-2023 through 2026-2027 Five-Year Capital Improvement Plan. Initially, the operating budget gap was approximately $1.9 million, however, City staff provided several pending adjustments that increased revenues, reduced expenditures, and resulted in a budget surplus of $27,854.
On June 7, 2022, the City staff presented a second draft of the FY 2022-2023 budget with a surplus balance of approximately $4.5 million. City staff also presented potential adjustments reflecting the City Council and community’s requests that could be incorporated into the budget before final adoption per the City Council’s direction. This agenda item presents a balanced General Fund budget for the FY 2022-2023, and requests that City Council adopts resolutions approving: (1) FY 2022-2023 Annual Operating Budget, and (2) FYs 2022-2023 to 2026-2027 Five-Year Capital Improvement Program Budget (Attachment 1 and Attachment 6, respectively).
June 21, 2022
Economy
Global, national, and local economies continue to face challenges due to rising inflation, increasing oil prices, the ongoing Russian invasion of Ukraine, continued supply chain issues, and 2022 workforce shortages. Despite these challenges, the University of California, Los Angeles - Anderson School of Management’s economic forecast published, with considerable uncertainty, continued economic strength at the national level in 2022, 2023, and 2024; the economic forecast projects Gross Domestic Product growth as following: 4.3 percent in 2022, 2.8 percent in 2023, and 2.3 percent in 20241.
In the California economy, the unemployment rate is expected to drop to 4.3 percent through 2024. Despite an expected increase in interest rates, the state expects rapid growth in homebuilding.
Richmond’s proposed FY 2022-2023 budget uses continued moderate economic growth, as the backdrop to estimate revenue and expenditure. The FY 2022-2023 city- wide expenditure budget amounts to $438,338,897 million, of which $206,632,248 is from the General Fund, and $231,706,650 million is from non-General Fund accounts.
These numbers show an increase when compared to FY 2021-2022.
GENERAL FUND
The proposed FY 2022-2023 General Fund budget is structurally balanced with both revenues and expenditures at $206,632,248.
Table 1: Proposed General Fund Budget FY 2022-2023 Revenue and Expenditures GENERAL FUND FY 2022-2023
DRAFT BUDGET
TOTAL REVENUE $206,632,248
TOTAL EXPENSE $206,632,248
Net (-Gap)/+Surplus $0.00
Revenues
The total proposed General Fund revenue for the FY 2022-2023 budget is $206.6 million. City staff is projecting an additional $14.3 million in General Fund revenue from the current FY 2021-2022 revised General Fund budget. Detailed information regarding revenue changes can be found in Attachment 2 – General Fund Revenue and Expenditure Summary. The information below highlights major revenue changes by revenue type.
1 https://www.anderson.ucla.edu/news-and-events/press-releases/ucla-anderson-forecast-russia-ukraine- war-adds-new-risks-us-and-california-economies
June 21, 2022
Property Tax – Increase of $823,000: In preparing the FY 2022-2023 budget, City staff forecasted Assessed Valuation (AV) growth of three percent. This was based on the change in value of properties sold during the last year, the Chevron Refinery AV remaining flat, and all other properties increasing by two percent. Actual change in AV will not be known until the Equalized Roll is published by Contra Costa County the first week of July 2022. This roll will list every property in Richmond, including their updated valuation.
Sales Tax – Increase of $3.3 million: This increase is based on updated estimates provided by the City’s sales tax consultants, Avenu Consulting. This increase is bolstered by the big-box stores including Costco, Target, The Home Depot, and Wal- Mart. Additionally, the increase corresponds to an overall increase of 6.3 percent for the sales tax category. In particular, the Bradley Burns 1 percent sales tax is projected to increase by five percent, while the voter-approved half cent measures are expected to increase by 10 percent in the coming year compared to the current FY 2021-2022 revised budgeted amounts.
Utility Users Tax (UUT) – Increase of $3.4 million: UUT is an “excise” or usage tax imposed on a person or entity using utility services (i.e., electricity, gas, or communications). For the most part, the various UUT streams such as cable television, gas and electricity, and telecommunications are expected to stay flat with zero percent grow this coming year. An increase of $3.4 million is budgeted stemming from a forecasted increase to the UUT Cap Provision. The cap amount, paid by Chevron, is tied the Consumer Price Index (CPI) for energy services in the San Francisco metropolitan area. This CPI through the April postings by the United States Bureau of Labor Statistics corresponds to an increase of over 13 percent. The actual amount will not be known until the end of June 2022.
Other Taxes – Increase of $685,000: This revenue category includes the Documentary Transfer Tax, whose budgeted amount corresponds to the average Transfer Tax collected since the voter-approved tiered structure went into effect in 2019, as per instructions within the Guiding Fiscal Policies. This yields an estimate of $13.6 million, which is the same as the budgeted amount in the revised FY 2021-2022 budget.
Licenses, Permits & Fees – Net Increase of $775,000: $425,000 of this increase stems from increased Code Enforcement collections. $158,000 stems from a two percent increase in the Business Tax category (see below for details regarding Measure U). Finally, City staff is projecting an increase of $332,000 in Recreation fees, as Recreation programs approach pre-pandemic levels. All other revenue streams that feed into this category will see a net decrease of $140,000. This decrease is primarily tied to one-time revenues (and corresponding expenses) tied to both Point Molate and Campus Bay projects.
Measure U -- City staff is budgeting $7.9 million, plus an escalator of two percent, which corresponds to an additional $158,000, for a total of $8,058,000.
The budgeted amounts include the reduction to the tax due to a Council-
June 21, 2022
approved credit for small residential property owners. In December 21, 2021, City Council approved a resolution allowing landlords with four or less residential units to credit their paid Rent Board fees against their gross receipts tax obligation.
City staff will continue analyzing this new revenue stream and update projections as additional data is gathered.
Other Revenues (Includes Fines & Forfeitures, Charges for Services, Other Revenues, Rental Income, Intergovernmental State Taxes & Grants, and Loan & Bond Proceeds, and Operating Transfers In) – Net decrease of $920,000: Most of these adjustments generate from revenue received year-to-date that were either not expected or are exceeding projections. In some cases, these are one-time revenue increases and decreases that cannot be anticipated, or the amount received is deviating significantly from previous years.
Increase to Fines & Forfeitures of $6,378 or 1.4 percent stemming from projected increases in Municipal Court Fines.
Increase to Charges for Services of $146,833 primarily from increased Police Special Services.
Decrease to Other Revenue of $1,286,427 stemming from one-time revenue that occurred in FY 2021-2022, that will not occur again in FY 2022-2023. This includes pass-through payments related to Point Molate and Campus Bay projects.
Increase of $127,239 in Rental Income primarily tied to the rental of Recreation facilities as Recreation programs approach pre-pandemic levels. Increase of $35,000 in Intergovernmental State Taxes stemming from State Mandated Claims reimbursements trending higher in FY 2021-2022 and that trend is expected to continue in FY 2022-2023.
Decrease of $12,878 in Intergovernmental State Grants, which is directly tied to an Office of Neighborhood Safety State Grant that was budgeted in FY 2021- 2022 and is not expected in FY 2022-2023.
Increase of $100,000 in Intergovernmental Other Grants based on staff’s expectation of additional revenue in Supplemental Law Enforcement Revenue Contra Costa County.
Decrease of $36,400 in Loan and Bond Proceeds, as no loan and bond proceeds are expected in FY 2022-2023. If that changes, the corresponding budget will be adjusted at mid-year.
Operating Transfers In – Increase of $6,210,346: The revenue that flows into the Pension Tax Override Fund is expected to increase at the same rate as Property Taxes.
What is unique in FY 2022-2023 is that the Bond Intercept amount, which was $12.7 million in FY 2021-2022, is currently projected to decrease to $6.6 million in FY 2022- 2023. However, the Bond Intercept will go back up to $13.0 million in FY 2023-2024.
June 21, 2022
Proposed General Fund revenue adjustments in the FY 2022-2023 budget for July 1, 2022, are as follows and listed in Attachment 2.
Table 2: Proposed General Fund Revenue FY 2022-2023 Budget
Expenditures
FY 2022-2023 total proposed expenditures are $206,632,248. Overall, total expenditures are increasing by 5.8 percent from the FY 2021-2022 revised budget.
Major increases are highlighted in Table 3 below and included in Attachment 2 - General Fund Revenue and Expenditure Summary. The assumptions behind the expenditures are provided in the Attachment 3 – General Fund Revenue and Expenditure Assumptions.
Table 3: Proposed General Fund Expenditures FY 2022-2023 Budget
EXPENDITURES
FY 2021-2022 REVISED
BUDGET
FY 2022-2023
PROPOSED BUDGET CHANGE
SALARIES AND
WAGES
75,822,428 78,761,868 3.9%
PYRLL/FRINGE
BENEFIT
62,143,352 66,929,804 7.7%
PROF & ADMIN 16,248,412 16,977,138 4.5%
OTHER
OPERATING
7,225,103 8,720,902 20.7%
REVENUES
FY 2022-2023
REVISED BUDGET
FY 2022-2023
PROPOSED BUDGET CHANGE
PROPERTY TAXES 45,233,561 46,056,962 1.80%
SALES & USE TAX 51,993,736 55,282,200 6.30%
UTILITY USERS TAX 46,522,663 49,963,589 7.40%
OTHER TAXES 20,953,343 21,638,449 3.30%
LICENSES, PRMITS&FEES 10,354,335 11,129,402 7.50%
FINES & FORFEITURES 468,897 475,275 1.40%
USE OF MONEY&PROPRTY 236,079 236,079 0.00%
CHARGES FOR SERVICES 3,424,459 3,571,292 4.30%
OTHER REVENUE 1,473,927 187,500 -87.30%
RENTAL INCOME 747,268 874,506 17.00%
INTERGOV STATE TAXES 90,000 125,000 38.90%
INTERGOV STATE GRANT 187,878 175,000 -6.90%
INTERGOV OTHER GRANT 153,569 253,569 65.10%
PROC FR SLE PROP 100,000 100,000 0.00%
LOAN/BOND PROCEEDS 36,400 - -100.00%
OPER XFERS IN 10,204,224 16,563,424 62.30%
TOTAL REVENUE 192,180,338 206,632,248 7.50%
June 21, 2022
UTILITIES 5,010,518 5,399,957 7.8%
EQPT &
CONTRACT SVCS
2,555,148 2,731,448 6.9%
PROVISN FOR INS
LOSS
27,673 25,725 -7.0%
COST POOL 14,455,436 15,277,766 5.7%
ASSET/CAPITAL
OUTLAY
1,416,551 2,422,136 71.0%
DEBT SVC
EXPENDITURE
1,065,359 1,037,009 -2.7%
A87 COST PLAN
REIMBS
-3,516,104 -3,531,610 0.4%
GRANT
EXPENDITURES
82,500 2,500 -97.0%
OPERATING
TRANSFERS OUT
12,801,419 11,877,605 -7.2%
TOTAL EXPENSE 195,337,796 206,632,248 5.8%
Salaries and Fringe Benefits: The total budget for salaries and benefits is approximately $78.8 million and $66.9 million respectively. The proposed budget includes salaries and wages of 710.9 Full-Time Equivalent (FTE) positions, which represents a net increase of 4.8 additional FTEs when compared to the mid-year FY 2021-2022 approved total. The increase in FTEs reflects the positions that the City Council has approved since the mid-year, plus one additional position, a Management Analyst I/II in the Economic Development department, proposed for FY 2022-2023. The proposed budget also includes the elimination of a vacant Accounting Assistant II position in the Finance department. Other assumptions include cost of living adjustments (COLA) per the approved Memorandum of Understandings with Local 21 (executives and mid-managers), and SEIU Local 1021 bargaining units. Respective fringe benefits are projected based on several factors such as health care provider rates, CalPERS rates, Other Post-Employment Benefits rates, and Workers Compensation rates.
As a result of the City’s historically high vacancy rate, the proposed FY 2022-2023 budget incorporates a salary and benefits savings rate totaling $8.3 million or approximately six percent. The vacancy savings rate is increased from the current year budget which was at $5.8 million and about four percent of the salary and benefits budget for the current fiscal year.
Workers Compensation and General Liability: Rates are generally derived from actuarial reports that factor in several drivers around claims cost, assumed risk factor, and a targeted confidence level of the Risk Reserve. The initial rates, in the proposed draft budget presented on May 3, 2022, were to achieve a 65 percent confidence risk reserve level, resulting in significant increases in charges from the current year budget level. To avoid drastic budget increases to City departments, City staff proposes that the increase in the confidence level should be implemented gradually over several years.
June 21, 2022
Until the City develops a formal plan for the confidence level increment, the proposed draft budget for FY 2022-2023 is set to increase the General Liability charges by five percent city-wide from the FY 2021-2022 budget level. Workers Compensation charges are only increasing by one percent in each category listed in Table 4 below.
Table 4: Workers Compensation Proposed Rates for FY 2022-2023 FY 2021-22 Rates FY 2022-23 Rates
Worker’s Compensation Clerical 7.83% 8.83% Worker’s Comp Fire 18.65% 19.65% Worker’s Comp Professional 5.8% 6.8%
Worker’s Comp Police 22.08% 23.08% Worker’s Comp Maintenance 12.71% 13.71%
Professional and Administrative Services: The total proposed budget is $16.9 million, an increase of 4.5 percent from FY 2021-2022. The proposed budget is baseline with a 5 % inflation contingency to mitigate the negative impacts of inflation on the services.
Other Operating: The proposed total budget is increasing by 20.7 percent and includes a five percent inflation contingency and expected Point Molate operating expenditures of $1 million.
Equipment and Contract Services: This category includes various equipment rental and maintenance contracts. The proposed budget is increasing by 6.9 percent, with a major increase stemming from a five percent inflation contingency.
Utilities: The total proposed budget is increasing by 7.8 percent compared to the FY 2021-2022 budget. The category includes a baseline budget with a 5 percent inflation contingency.
Cost Pool: The total proposed cost pool budget is $15.3 million, and includes line items where internal costs are allocated to other areas within the City. Major line items within this category are: General Liability (discussed above), Vehicle Replacement, Civic Center Debt Allocation, and Cost Allocation Plan (Administrative Charges). The line items in cost pool were discussed in the June 7th, 2022, budget staff report.
Capital Asset Outlay: The category includes large equipment and major improvement expenditures. The proposed budget is increasing by $1 million due to the additional investment in the city’s pavement and sidewalk system.
Operating Transfers Out: These are General Fund Subsidies and mandated contributions to Non-General Fund programs. A mandated contribution is generally due to a specific agreement, a voter approved measure, maintenance of effort required by the State, or a required grant match. Table 5 below lists of major transfers out. Major change in the category is the allocation to the Department of Children and Youth which
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is increasing from one to two percent of the General Fund revenue. In addition, a transfer to Non-General Fund departments to implement Reimagining Public Safety Intervention Programs is also included (transfer to Planning for the Unhoused Intervention and a transfer to Employment and Training for Youthworks).
Table 5: General Fund Operating Transfers Out Draft Budget FY 2022-2023 Operating Transfers Out
Proposed
Budget FY 2022-23
Debt Service 1,744,390
Hilltop Lighting and Landscaping District 229,115
Marina Bay Lighting and Landscaping District 462,436
Employment and Training 743,201
Information Technology Equipment Replacement 100,000
Department of Children and Youth 3,936,896
Richmond Housing Authority 1,261,082
Pension Fund 100,485
Reimagining Public Safety - Unhoused Intervention 1,320,000 Reimagining Public Safety -Youthworks 1,980,000
Total 11,877,605
Key inclusions in the Proposed FY 2022-2023 Budget
On June 7, 2022, the City staff proposed several appropriations to be included in next year’s budget based on estimated available funding sources. Table 6 below, slightly updated from the table included in the June 7, 2022, staff report, lists funding sources and items that City Council could consider for inclusion in the FY 2022-2023 budget.
Table 6: Adjustments incorporated since June 7, 2022, Presentation Funding Sources Key Inclusions in the Proposed Budget
June 7, 2022, Estimated Surplus 4,513,570 COLA/Class & Comp 7,385,608 Vacancy Saving Factor 6% of the
Salary & Benefits 8,339,184 Inflation Factor (5%) 1,410,215 Transfer In From PTOR* 148,800 City Attorney Legal Services 1,500,000 Savings from Employment and
Training Subsidy 418,000 Point Molate Expenses 1,000,000 Savings from RHA Subsidy 278,242
Additional Paving Index
Investment & Sidewalk
Repairs/Safety
Enhancements
1,000,000
Other Savings 128,027 Housing First 425,000
Public Bank 750,000
June 21, 2022
Reparations, Equity, and
Inclusion Implementation -
Year One**
250,000
Literacy Fair 5,000
Short-term Emergency
Housing Interventions 100,000
New City-wide Appropriation
Requests Not included
City-wide Position Requests Not included
Total Available 13,825,823 Total 13,825,823
*Pension Tax Override Reimbursement (PTOR)
The list below provides more information about each proposed recommendation. Cost of Living Adjustments (COLA) and Class and Compensation Study Implementation costs - $7,385,608: The implementation costs of the Classification and Compensation study, the 5 percent COLA for Local 1021 and Local 21, Executives, and a placeholder for possible COLAs for public safety (pending negotiations), are included in the budget with an estimated total of $7,385,608.
Five Percent Inflation Contingency - $1,410,215: The US economy is experiencing significantly higher inflation than prior years. To mitigate the potential negative impacts of the hyperinflation on the City’s services, an inflation contingency of five percent was added to the baseline non-payroll expenditures in the proposed budget.
City Attorney Legal Services - $1,500,000: This amount serves as a place holder budget to cover the estimated legal services costs for the City in FY 2022-2023. Paving Condition Index (PCI) Investment - $1,000,000: According to the recent Pavement Distress Survey, the baseline funding level of $4 million per year is not sufficient to sustain the City’s current average paving index at 60 points. Without additional funding, the City’s PCI is projected to decline by 9 points to 51 in five years.
Point Molate Operating Expenditures - $1,000,000: The City will have to cover the cost of security and maintenance costs for the site for FY 2022-2023. Housing First - $425,000: This allocation serves as an initial appropriation to develop a Housing First Framework to support the housing needs of some of Richmond’s most vulnerable populations.
Public Bank - $750,000: On April 5, 2022, the City Council approved the City of Richmond as a founding member of the Public Bank East Bay (PBEB). Reparations, Equity, and Inclusion Implementation - $250,000: On January 18, 2022, City Council approved a proposal from then-Vice Mayor Demnlus Johnson to support the research, development and implementation of various reparations, race, equity and inclusion-related items. This funding is an initial allocation to begin work, and work will be done in collaboration with Richmond’s race equity team.
June 21, 2022
Literacy Fair - $5,000: The City Council requested the addition of a literacy fair to the FY 2022-2023 budget.
Short-Term Emergency Housing Interventions - $100,000: This funding will provide housing support to a family under extreme distress.
General Fund Reserve Level
The General Fund mid-year 2021-2022 budget update included expenditure projections exceeding revenues by $3.1 million. Based on current information, City staff estimate the FY 2021-2022 year-end unassigned fund balance (reserve level) will exceed the policy target of 15 percent. As such, the proposed budget for FY 2022-2023 does not include any additional contribution to the reserve at this time. City staff will continue to monitor the budget through the current year fiscal close process and return to the City Council with estimated pre-audited amounts and to seek guidance. Given the current economic volatility and the need to refinance the SWAPs/POBs, City staff recommend refraining from trying to allocate and creating set asides such as those included last fiscal year.
NON-GENERAL FUND/OTHER FUNDS
The total Non-General Fund budget is estimated at $231,706,650 and includes funds dedicated to several programs and services that require tracking of expenditures in specific funds. Table 7 below shows total proposed budget by fund type. The fund level detailed proposed budget is listed in the Attachment 4 - Fiscal Year 2022-2023 Comprehensive Budget by Fund.
Table 7: Non-General Fund Proposed Budget FY 2022-2023
Fund Type Proposed FY 2022-2023
Other Operations 27,075,053
Special Revenue 39,674,849
Capital Improvement 37,256,854
Debt Service 21,612,086
Enterprise 70,579,794
Internal Service 25,169,925
Housing 5,458,047
Richmond Housing Authority 4,880,044 Total 231,706,650
MAJOR CAPITAL PROJECTS
The proposed FY 2022-2023 Capital Improvement Projects budget is $37,256,854.
Attachment 7 lists the Five-Year Capital Plan from FY 2022-2023 through 2026-2027, with individual project detail, timeline, and funding source. Many projects expand over
June 21, 2022
multiple years; however, the projects are appropriated on annual basis. Table 8 below lists Capital Improvement budget by fund.
Table 8: Total Capital Projects by Fund Proposed Budget FY 2022-2023 Fund Number Fund Name Proposed FY 2022-2023
Budget
1002 Gas Tax 2,815,755
1019 RMRA-SB1 2,395,337
1054 Engineering Grants 14,509,778
2001 General Capital 3,061,487
2002 Measure J 3,786,947
1004 Asset Seizure 20,000
1006 Outside Grants 8,662,839
2113 Fire Impact Fee 89,383
2110 Park Impact Fee 15,000
2111 Traffic Impact Fee 263,639
2116 Open Space Impact Fee 373,264
2117 Library Impact Fee 469,295
2120 Wastewater Impact Fee 794,130
Total Capital Project Funds $37,256,854
CONCLUSION
The City’s FY 2022-2023 Operating and CIP budget is balanced; however, it is important to note that there are several fiscal headwinds on the horizon. Classification and Compensation Study Implementation: The City’s compensation plan is below market and it is increasingly difficult to recruit and retain key staff positions. Due to high turnover, the City is experiencing a historically high vacancy rate. To acknowledge the unfilled positions, the City Council has authorized the use of a six percent salary and benefits saving rate in the proposed budget which will help offset the Classification and Compensation Study implementation costs. Throughout FY 2022-2023, City staff must monitor the number of vacant positions to ensure the City meets the targeted vacancy savings rate and corresponding budgeted savings.
Unfunded Retirement and Other Post-Employment Benefits (OPEB) Liabilities:
According to the CalPERS Actuarial Valuation report dated June 30, 2020, the funded ratios have slightly improved for both Public Safety and Miscellaneous plans; however, the total unfunded liability is still increased from $351 million to $367 million. Richmond’s total OPEB Unfunded Actuarial Accrued Liability is estimated at $102 million.
Paving Condition Index (PCI)/Sidewalk Repair Program: Pavement Engineering Incorporation (PEI), a third-party consultant, inspected arterial and collector road segments in the City of Richmond. The study concluded that to maintain the paving system at its current overall PCI of 60, the City will need to spend an
June 21, 2022
average of $22.9 million annually over the next 5 years. Maintaining the current funding level of approximately $4 Million annually will result in a PCI loss of 9 points in 5 years to a PCI of 51. The investments in the City’s infrastructure need a dramatic increase to improve and sustain its pavement infrastructure. Risk Reserve Claim Costs: Proposed FY 2022-2023 budget has underbudgeted claim costs (Workers Comp at $3,047,073, and General Liability at $4,668,140) diverging from the recent actuarial studies’ prescriptions. The underfunding of the Risk Reserve will decline the confidence level of the reserve and is not a fiscally prudent practice and can impact the City’s capacity to pay its claim liabilities. The City staff must monitor the Risk Reserve and the claim costs and may need to revise the contributions to the reserve during the mid-year FY 2022-2023 update.
Table 9: Actuarial Review of the Self-Insured Worker's Compensation Program
Table 10: Actuarial Review of the Self-Insured Liability Program
June 21, 2022
NEXT STEPS
City staff will continue to monitor the City’s financials closely and bring back the FY 2022-2023 first quarter update in October 2022. City staff will also plan to bring forth a long-term financial forecast around December 2022 to support the development of the FY 2023-2024 budget process. Please visit the City’s website at https://www.ci.richmond.ca.us/1427/Presentations for the most up-to-date budget information and presentations.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution Adopting the Fiscal Year 2022-2023 Operating Budget Attachment 2 – General Fund Revenue and Expenditures Summary Attachment 3 – General Fund Revenue and Expenditure Assumptions Attachment 4 – Fiscal Year 2022-2023 Comprehensive Budget by Fund Attachment 5 – Fiscal Year 2022-2023 Operating Budget
Attachment 6 – Resolution Approving Capital Improvement Plan for Fiscal Years 2022-2023 through 2026-2027
Attachment 7 – Five-Year Capital Improvement Plan for Fiscal Year 2022-2023 through 2026-2027
Attachment 8 – Attachment 8 – Presentation