General Fund Overview /
Multi-Year Financial Forecast
City of Sutter Creek
City Council Meeting
March 4, 2024
General Fund Overview / Multi-Year Financial Forecast
Discussion Outline
Purpose of Baseline Financial Forecast
Development of General Fund Baseline Financial Forecast – FY 2023-24 Financial Forecast Results – Base Case – FY 2021-22 to FY 2029-30 Capital Needs / UAAL Future Requirements
Sales Tax Implications on Forecast
Next Steps
General Fund Overview / Multi-Year Financial Forecast
Purpose of Baseline Financial Forecast
Develop better understanding of “baseline” General Fund funding requirements to provide a defined level of ongoing services by recognizing impacts of:
Annual revenue and expenditure changes over a multi-year horizon based upon a given set of assumptions
Significant cost drivers demanding an increasing share of discretionary revenues:
Employment Costs (Wages / CalPERS / Benefits); Capital and Outlay Needs; etc. Impacts of known one-time revenues / expenditures on given set of assumptions General Fund Overview / Multi-Year Financial Forecast
Development of Baseline Financial Forecast
Development of Baseline Financial Forecast based on:
FY 2023-24 updated budget / fiscal activity adjusted for:
True-up of FY 2023-24 budget for certain revenues and expenditures (Pre-MidYear) Removal of one-time revenues and expenditures where necessary in future years Assumption factors applied to revenues and expenditures based on economic activity
Full staffing as authorized in FY 2023-24 Adopted Budget Impacts to future fiscal activity based on array of known or conservative assumptions for all years in model
General Fund Overview / Multi-Year Financial Forecast
Development of Baseline Financial Forecast
Key Assumptions:
Annual growth in property tax @ 2% - 3%
Growth in Transient Occupancy Tax in FY 2024-25 – 1.5% Annual growth in sales tax @ 1%
Negotiated salary increase for SEUI – FY 2024-25
Salary growth (not negotiated) for each year in forecast @ 2% Annual health insurance cost growth @ 4%
Most other costs increase 2% annually
CalPERS costs increase according to recent actuarial cost estimates General Fund Overview / Multi-Year Financial Forecast
Baseline Financial Forecast – Results
• Systemically decreasing surplus due to expenditure growth outpacing revenue growth • Expenditures do not include any future need to use reserves for one-time needs (i.e. capital or other funding requirements)
General Fund Overview / Multi-Year Financial Forecast
Baseline Financial Forecast – Results
Represents ALL reserves in consolidated General Fund
These reserves could ultimately fund future one-time needs (i.e. Capital requirements) General Fund Overview / Multi-Year Financial Forecast
Baseline Financial Forecast – Results
CalPERS General Fund costs rise over time due to UAAL Amortization General Fund Overview / Multi-Year Financial Forecast
Baseline Financial Forecast – Results
CalPERS Discount Rate now 6.8% - Have
achieved this amount in only 1 of last 5
years and 3 of last 9 years
Large 21+% return in FY 2020-21 mostly
used to lower discount rate consistent with
CalPERS policy (mitigates impact of lowering
employer costs short-term)
General Fund Overview / Multi-Year Financial Forecast
Capital Needs / Future UAAL Requirements
Forecast / Future Needs Analysis:
FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Base Forecast
Surplus / (Deficit): $ 180,671 $ 156,911 $ 123,947 $ 95,653 $ 71,250 $ 52,479 CalPERS Section 115 Funding: $ (20,000) $ (20,000) $ (20,000) $ (20,000) $ (20,000) $ (20,000) Capital Needs:
- Police Apparatus / Eqpt: $ (185,400) $ (190,962) $ (98,345) $ - $ (104,335) $ (107,465) - PW Apparatus / Eqpt: (200,000) (212,180) (231,855) (260,955) (302,518) (361,222) - Roads (20-yr Plan): (650,000) (689,585) (753,528) (848,103) (983,183) (1,173,972) - Sidewalk Impvmt (6-yr Plan): (333,333) (353,633) (386,424) (434,924) (504,196) (602,036) - Stormwater Impvmt (26-yr Plan): (172,800) (183,324) (200,323) (225,465) (261,376) (312,096) - City Facilities (15-yr Plan): (866,667) (919,447) (1,004,705) (1,130,804) (1,310,912) (1,565,297) Total Capital Needs: $ (2,408,200) $ (2,549,131) $ (2,675,180) $ (2,900,250) $ (3,466,519) $ (4,122,089) Total Deficit - Added costs: $ (2,227,529) $ (2,392,220) $ (2,551,233) $ (2,804,597) $ (3,395,269) $ (4,069,610) Funding availability not sufficient to fund identified needs General Fund Overview / Multi-Year Financial Forecast
Sales Tax Implications on Forecast
Forecast / Future Needs / Potential Funding Analysis:
FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Total Deficit - Added costs: $ (2,227,529) $ (2,392,220) $ (2,551,233) $ (2,804,597) $ (3,395,269) $ (4,069,610) Transactions Tax Revenue @:
0.50% $ 43,750 $ 175,000 $ 176,750 $ 178,518 $ 180,303 $ 182,106
1.00% 87,500 350,000 353,500 357,035 360,605 364,211
1.50% 131,250 525,000 530,250 535,553 540,908 546,317
General Fund Overview / Multi-Year Financial Forecast
Next Steps
➢ Update Mid-Year Budget – Affirm FY 2022-23 fund balances ➢ Undertake more detailed scenario planning
➢ Prepare FY 2024-25 Budget
➢ Capital expenditures / appropriation needs
➢ Consider revenue enhancement (Transactions / Use Tax)