FINANCIAL
PRESENTATION
CITY COUNCIL
ANNUAL PLANNING
SESSION
APRIL 20, 2024
STRENGTHENING OUR FINANCIAL FOUNDATION
¡ Reserve Policy: 20% of budgeted expenditures held in reserve ¡ Pensions / OPEB
¡ Policy to build up trust funds to reduce future liability payments
¡ Future drawdown will reduce General Fund expenditures ¡ 10-Year Forecast: map out possible revenues and expenditures to plan out needs
¡ Internal Controls
¡ RFP for Auditor
¡ Internal Quarterly Budget Reviews
¡ Performance Measures
2 BUDGET TASK FORCE
Recommendation Implementation
Status
Create Navigation Center In Progress
Look Into Mental Health Crisis Response Team In Progress Redirect Activities Handled by Sworn Officers to Other Staff In Progress Prioritize and Increase Funding for City Buildings and Roads In Progress Study Potential Revenue Options for Capital Projects In Progress Create Civilian Police Review Board Completed
Hire Grant Writer to Expand Grant Program Completed
Establish Performance Measures for Each Department Completed Create Community Engagement in the Budget Process Completed Pilot Safety Liaison/Ambassador Program Completed
Increase Funding for Community Resiliency Completed 3
FINANCIAL CHALLENGES – UNFUNDED LIABILITIES
Capital Improvement Plan (CIP)
• $385.6 M backlog
Facilities Condition Assessment
• $16.6 M current funding need
Stormwater Funding Needs
• $81.6 M capital and operating & maintenance costs
Retiree Health and Pensions
• $245.4 M unfunded liability
4 RETIREE HEALTH & PENSION LIABILITY
¡ Other Post-Employment Benefits (OPEB) – 6/30/22 Measurement Date ¡ Health benefits
¡ Total Liability: $24.5 M
¡ Unfunded Liability: $4.5 M
¡ 82% funded
¡ Trust Fund Balance: $21.1 M
¡ Pension – 6/30/22 Measurement Date
¡ Retirement pension through CalPERS
¡ Total Liability: $696.6 M
¡ Unfunded Liability: $240.9 M
¡ 65% funded
¡ Trust Fund Balance: $26.1 M
5 PROJECTION OF AMORTIZATION PAYMENTS
6 CAPITAL IMPROVEMENT PLAN NEEDS
Funding Category Funding Need
Failed Assets $ 7 M
End of Life Assets $ 156 M
Overdue Assets $ 42 M
Streets Backlog $ 180 M
TOTAL $ 386 M
7 STREETS NEED
Funding Category Funding Need
Failed Streets $ 108 M
End of Life Streets $ 28 M
Overdue Streets $ 4 M
TOTAL $ 180 M
8 FACILITIES
CONDITION
ASSESSMENT ¡ 34 buildings totaling 556,127 ft
2 ¡ Current Replacement Value:
$163,285,997
¡ Total Needs ¡ 2023: $16,649,639 ¡ 2028: $18,939,312 ¡ Best practice for annual maintenance: 3% of CRV ¡ = $4.9 M ¡ Current budget is $3.8 M ¡ $1.1 M underfunded 9 HUMAN CAPITAL
¡ Budgeted
¡ 479.79 FTEs (Full and Part Time)
¡ Approximately 413 F/T + 269 P/T = 682 Employees
¡ Current Vacancies: 81.96 FTEs
¡ Number of Employees Hired in 2023: 149
¡ Number of Employees Separated in 2023: 86
¡ Filled
¡ Prior to 2008: 388 F/T + 315 P/T = 703 Employees
¡ Today: 343 F/T + 177 P/T = 520 Employees
¡ Last Year: 313 F/T + 167 P/T = 480 Employees
¡ People First Strategy
10 FORECAST ASSUMPTIONS
¡ Realistic onboarding of existing vacancies
¡ No capital funding (no new or backlogged projects)
¡ PERS cost increases per actuarial reports
¡ Economic growth occurs until 2026
¡ Annual salary growth aligned with MOUs
¡ Market inflation for all other costs
¡ Forecast = slight fluctuations will occur
11 GENERAL FUND FORECAST
12 CONTINUE TO SOLIDIFY OUR FINANCIAL FOUNDATION
¡ ERP Replacement
¡ Fee Study Adoption
¡ General and Development
¡ Equipment Maintenance Fund Study
¡ Possible Bonding With Future Revenues
¡ Creating a Capital Funding Policy
¡ Streets and Roads
¡ Facilities Maintenance
¡ FYs 2025-26 and 2026-27 Biennial Budget
13 QUESTIONS?