Fiscal Year 2021-23
Mid-Cycle Budget
Review
City of San Leandro
Finance Committee Meeting
June 7, 2022
Agenda
01. Overview 02. Review of
Unfunded Liabilities
and Unfunded
Capital Projects
03. Mid-Cycle
Highlights
04. Proposed Budget
Adjustments
05. Long-Term
Forecast
2 Overview
• Positive economic growth over the past 12 months
• Steady economic growth in the near term
• Economic uncertainties
o Inflation
o Supply chain shortages
o Russia-Ukraine war
o Stock market
3 Review of Unfunded Liabilities and
Unfunded Capital Projects
• Unfunded Pension and Retiree Healthcare liabilities
o Established trust accounts and contributed additional payments to buy down liabilities
o Formulating funding policies to pay off liabilities over time • Unfunded Capital Projects
o Significant one-time General Fund contributions to fund projects o Grant funds for projects
o Studies underway to identify overall cost
o Capital Improvement Plan to address funding strategies • Estimated costs on the next slide do not include new staffing positions 4 Unfunded Liabilities and
Unfunded Capital Projects
5 $204M in Net
Pension Liability
$2.8M in Net
Retiree
Healthcare
Liability
$200M for Road
Pavement
$14M for Citywide
Median
Rehabilitation
$2M for Tree
Replacement
$25M for Fire
Station
Renovation
$3.5M for Facility
Maintenance
$9M for Park
Maintenance
$13M for Traffic
Equipment
Replacement
Total Estimated
Cost: $473.3M
General Fund – Key Highlights
• Increase revenues for Sales Tax, Utility Users Tax, Cannabis Tax, and Charges for Services
• Adjust expenditure budget based on departmental requests for changes in service levels
• Increase allocations to Internal Service Funds
• Re-encumber 2021-22 Purchase Order balances to 2022-23 6 General Fund – Key Highlights (Cont.)
• Re-appropriate 2021-22 limited expenditure budget to 2022-23 • Add positions to expand services and programs or bridge service gap • Set aside funds for Mulford Library grant match
• One-time investments/use of reserves to advance community priorities and projects
7 Other Funds – Key Highlights
• Increase internal service charges
• Replace expired Measure B revenue with Measure BB revenue • Budget contribution from General Fund for Mulford Library grant match • Adjust expenditure budget to reflect program/operational needs • Re-encumber 2021-22 Purchase Order balances to 2022-23 • Re-appropriate 2021-22 limited expenditure budget to 2022-23 8 FY 22-23 General Fund Revenue Sources
9 Property Tax
21%
Sales Tax
42%
Utility Users Tax
9%
Property
Transfer Tax
7%
Other Revenue
21%
GF Revenue
$134M
FY 22-23 General Fund Spending -
$151M
10 Community Development
$8.3 Million
6% of Spending
Police
$45.6 Million
30% of Spending
Fire
$27.7 Million
18% of Spending
Recreation & Human Services
$9.0 Million
6% of Spending
Library
$7.6 Million
5% of Spending
Public Works
$8.3 Million
6% of Spending
Engineering & Transportation
$5.0 Million
3% of Spending
General Government
$12.3 Million
8% of Spending
Non-Departmental
$26.7 Million
18% of Spending
$133M ongoing expenditures
$18M one-time expenditures
General Fund – Proposed Adjustments
11 • $1.7M increase in revenue in FY 21-22 and $6.2M in FY 22-23 • $5.2M decrease in expenditure in FY 21-22 and $11M increase in expenditure in FY 22-23 Amended
Budget
Proposed
Adjustment
Adjusted
Budget
Amended
Budget
Proposed
Adjustment
Adjusted
Budget
Revenues $127.6M $1.7M $129.3M $127.3M $6.2M $133.5M
Expenditures $131.2M $(5.2M) $126.0M $139.7M $11.0M $150.7M Revenue (Expenditure) $(3.6M) $6.9M $3.3M $(12.4M) $(4.8M) $(17.2M) Use of Reserves $3.6M - $12.4M $17.2M*
Net Revenue (Expenditure) - $3.3M - -
FY 21-22 FY 22-23
* Includes one-time investments to advance community priorities and projects (e.g., $9.4M for capital projects and $3.6M for pension trust/plan; no operational deficit).
General Fund – Major Adjustments
12 Justification
FY 21-22
Proposed
Adjustment
FY 22-23
Proposed
Adjustment
Revenue
• Increase Sales Tax due to expected growth $1.7M $4.7M • Increase Utility User Tax based on current revenue trend $0.8M Expenditure
• Increase Fire service contract budget based on the May 2022 projection provided by the ACFD – mainly due to increase in labor cost
$0.7M
• Re-appropriate Navigation Center and Recreation Park Assessment expenditures from 2021-22 to 2022-23
$0.7M
• Re-appropriate expenditure budget for CalPERS/Pension Trust from 2021-22 to 2022-23 – Strategy to preserve capital due to market volatility -$3.6M $3.6M
• Transfer to the Capital Project Fund for the Mulford Library grant match $2M Other Funds – Major Adjustments
13 Revenue/
Expenditure Justification
FY 21-22
Proposed
Adjustment
FY 22-23
Proposed
Adjustment
Shoreline Enterprise Fund
Expenditure • Adjust Golf Course operations and repair costs $0.6M Information Technology Fund
Revenue • Contributions from the General Fund and other funds for internal services
$0.7M
Expenditure • Adjust expenditures related to telephone and computer services • Re-encumber 2021-22 Purchase Order balances to 2022-23 – mainly related to implementation and installation services -$0.9M
$0.7M
$0.9M
Other Funds – Major Adjustments (Cont.)
14 Revenue/
Expenditure Justification
FY 21-22
Proposed
Adjustment
FY 22-23
Proposed
Adjustment
Insurance Services Fund
Expenditure • Adjust expenditure due to projected increase in general liability insurance premiums and claim expenses
$1.1M
Measure BB Fund 141 – Streets & Roads
Revenue
Expenditure
• Increase Measure BB revenue - replace expired Measure B revenue • Reclassify Measure B funded projects into the Measure BB Fund $2.3M
$1.3M
Capital Improvement Fund
Revenue • Contribution from the General Fund for the Mulford Library grant match
$2M
Staffing Change Highlights
15 Description
Financial
Impact
• Community Development:
- Add a Project Specialist II position and a Housing Manager position to support the housing program – budgeted eight months for the manager position - Delete the Senior Engineer position and use the budget to fund the Housing Manager position - Convert a temporary Associate Planner position to a permanent position $0.1M
• Library:
- Add a new Librarian position to support services
- Convert two part-time Senior Library Assistant positions to full- time positions $0.3M
• Police: Add five Police Service Technician II positions to bridge service gap (pilot program). Costs will be offset by savings from vacant police officer positions.
No cost
impact
• Expand services or bridge service gap to better serve the community • Improve operational efficiency
Long-Term Forecast
16 A fiscal management tool to evaluate current and future fiscal conditions Identify future revenue and expenditure trends
Guide policy and programmatic decisions
An integral part of the budget process
Long-Term Forecast (Cont.)
17 • Pension Obligation Bond is expected to
be paid off in 2023-24
• Recession factor is included in 2026-
27 • The projected annual deficit averages
about $3M between 2023-24 and
2030-31
• Funding for unfunded capital
projects/deferred maintenance is not
included
o Staff is in the process of developing a
comprehensive Capital Improvement
Plan to address funding needs
Analysis of General Fund Balance
• Projected General Fund reserves on June
30, 2023 (dollars in thousands)
• Proposed budget adjustments are
reflected in the overall fund balance
• Discussion about Undesignated fund
balance will occur as part of the overall
study outcomes of CIP, Trees, Parks and
facilities studies
18 Category
Projected
Fund
Balance at
6/30/23
Beginning Fund Balance - Projected 87,009
FY 22-23 Net Activity - Projected (17,167)
Ending Fund Balance at June 30,
2023 - Projected 69,842
Reserve Breakdowns
Nonspendable 7,627
Assigned/Restricted 11,680
Unassigned Fund Balances:
Compensated Absences 913
Major Emergencies 5,000
Economic Uncertainty 26,491
Undesignated 18,131
Total 50,535
Total - All 69,842
Planning Ahead
19 July 2022
- ARPA Project and Budget Task Force
Recommendation Implementation
Update
August-October 2022
- Planning for FY 23-25
Biennial Budget
- Development and
Launching of the Public
Budget Process
November 2022-
June 2023
- Budget Development
and Engagement
Thank You!