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Home My WebLink AboutRes 2017-71 - FY 16-17 Final Budget Adjsmnt RESOLUTION NO. 2017-71 STAFF REPORT CITY OF PALM DESERT FINANCE PARTMENT MEETING DATE: October 12, 2017 REQUEST: Adopt Resolution No. 2017- 71 authorizing Fiscal Year 2016- 2017 final budget adjustments to revenue and expenditures and authorize certain related expenditures for Fiscal Year 2017-2018 Recommendation By Minute Motion, that the City Council: 1. Waive further reading and adopt Resolution No. 2017- 71 authorizing the Fiscal Year 2016-2017 final year-end budget adjustments to revenue and expenditures; and 2. Authorize and appropriate an additional payment to CaIPERS in an amount up to $1,700,000 for Fiscal Year 2017-2018 to reduce the City's unfunded liability. Strategic Plan While not specific to a specific Strategic Plan Objective, it is a primary goal of the City Council to strive for accountability, financial stability, and economic consistency. Background Analysis As part of the closing of the financial records for the fiscal year ending June 30, 2017, adjustments will be necessary to both revenue and expenditures based on the actual amounts. In some cases this includes transferring monies to or from the General Fund as noted. The most notable change in revenue is due to an increase in Transient Occupancy Tax (TOT) collected of slightly over $2 million. The increase includes TOT received for hotel stays for the festival in October, the online platform AirBnb, the increase in the TOT rate, as well as from an overall increase in rental rates during the year (including the spring festivals). Other changes in revenue include increases to property taxes, interest income, and vehicle impact fees totaling $943,000 and a decrease in sales tax of ($290,000). October 12, 2017 - Staff Report Adopt Resolution authorizing FY 2016-2017 budget amendment for appropriations Page 2 of 3 The additional property tax received is from the dissolution of redevelopment from the amount available after all debts of the former agency are paid as well as sales of the former agency's real property. Sales of former agency real properties provide a one- time increase in revenue that will not be included in future revenue estimates. The increase in vehicle impact fee revenue is based on the amended franchise agreement with Burrtec Waste and Recycling Services. The fee, approved in July of 2016, will offset the City's road maintenance costs for the impact of Burrtec's waste hauling vehicles on the City's streets. The adjustments to the General Fund appropriations include reallocations as well as increases for year-end adjustments and are itemized in Exhibit A attached to the resolution. The reallocations include decreases to public safety, marketing, economic development and public works and increases to departments for legal advertising, contract increases due to minimum wage, utility/water costs, and park expenses. The adjustments to other funds include transfers for bond-related expenditures (debt payments and capital projects funded by bonds), the annual payment for Other Post- Employment Benefits (OPEB), compensated accrual balance adjustments and the retiree health stipends transfer. The reallocations are based on actual and approved expenditures in the departments. The other significant transfers requested are to replenish the equipment replacement fund and the building maintenance fund for approved projects. These include the 5- year IT Master Plan and building maintenance reserves for projects including improvements at City Hall (main lobby) and the Civic Center (signage). Lastly, during the last fiscal year (2016-17), CaIPERS reduced the discount rate on their investments from 7.5% to 7.375%. This has resulted in a decrease to the percent the City's pension liability is funded from 68.9% to 66.2%. CaIPERS has indicated that over the next two years, the rate will be lowered even further from 7.375% to 7%. In anticipation of the increase in annual contributions for the next two years, staff is recommending that an additional payment be made during the fiscal year 2017-18 in an amount up to $1,700,000. Fiscal Analysis The adjustments detailed in the attachment to the resolution result in an overall increase in revenue to the General Fund of $2,701,000. The net effect of the reallocation of General Fund appropriations is an overall increase of $1,350,574 which includes transfers out to other funds for the annual adjustments noted above. The adjustments to other funds are covered by those respective fund balances. Staff is requesting an October 12, 2017 - Staff Report Adopt Resolution authorizing FY 2016-2017 budget amendment for appropriations Page 3 of 3 additional appropriation of up to $1,700,000 in the current fiscal year (2017-18) for an additional payment to CaIPERS once the financial records are finalized. Pr4g4p6d by: Janet M. Moore, Director of Finance LEGAL REVIEW , DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER N/A r Robert W. Hargreaves net M. Moore M. Moore Lauri Aylaian C City Attorney Director of Finance Director of Finance City Manager APPLICANT: N/A ATTACHMENTS: Resolution No. 2017- 71 RESOLUTION NO. 2017- 71 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING THE FISCAL YEAR 2016-17 BUDGET AS A RESULT OF YEAR-END ADJUSTMENTS WHEREAS, as a result of the closing of the books and year-end review of the revenue, expenditures, and appropriations, it is desirable to revise the fiscal year 2016- 17 budget; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, that the fiscal year 2016-17 budget is hereby revised as follows: 1. The amounts on Exhibit A, attached hereto, in the section entitled "Revenue", are hereby amended for the fiscal year 2016-17 for each fund and revenue source noted; and 2. The amounts on Exhibit A, attached hereto, in the sections entitled "Appropriations Adjustments and Transfers" and "Reallocations and Transfers" are hereby amended, reallocated, transferred and/or appropriated to the departments, activities and projects identified for the fiscal year 2016- 17; and 3. The amounts on Exhibit A, attached hereto, in the section entitled "Other Funds" are hereby amended, transferred and/or appropriated for each fund noted. PASSED, APPROVED AND ADOPTED at the regular meeting of the Palm Desert City Council held on this 12th day of October, 2017, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN C. HARNIK, MAYOR ATTEST: RACHELLE KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA RESOLUTION NO. 2017-71 City of Palm Desert Year-End Adjustments For Fiscal Year Ending June 30,2017 Exhibit A Fund Account Number Description/Reason Amount Revenue Gen Fund 1100000 3188300 TOT $ 1,170,000 1100000-3188330 Short-term Rental TOT $ 878,000 1100000-3111030 Property tax from RDA prop sales and residual TI $ 400,000 1100000 3611000 Interest Income $ 60,000 1100000-3412300 Burrtec Vehicle Impact Fee $ 483,000 1100000-3133000 Sales Tax $ (290,000) Total Revenue Adjustment $ 2,701,000 Fund Department/Acct# Department Name Description Amount Appropriations Adjustments and Transfers Gen Fund 1104210 Public Safety Open positions $ (1,310,000) 1104300 Public Works Admin Open positions $ (400,000) 1104310 Public Works Maintenance Open positions $ (400,000) 1104331 Public Works Auto-Fleet Vehicle purchase delayed $ (170,000) 1104417 Marketing Less than expected $ (218,000) 1104420 Building and Safety Less than expected $ (100,000) 1104430 Economic Development Less than expected $ (275,000) 1104800 Contributions Less than expected 5 (50,000) 1104192 Insurance Insurance Premium paid by Housing $ (75,000) 1104159 General Services Less than expected $ (75,000) Total Appropriations to Reallocate $ (3,073,000) Reallocations and Transfers Gen Fund 1104111-4321000 City Clerk Legal Advertising 16,700 1104114-4309000 Elections Prof-Others 1,100 1104419-4100100 Visitors Services Salaries 2,200 1 1046 10-4 3 3 2 001 Civic Center Park Repairs and Maintenance 58,000 1104614-4337001 Landscaping Services Repairs and Maintenance 128,700 1104614-4351000 Landscaping Services Utilities-Water 49,300 1104618-4400100 City Wide Park Improvements Repairs and Maintenance 15,200 1104199-4501000 Transfer Out OPEB-Reduction of Liability 684,660 1104199-4501000 Transfer Out Monthly Retiree Health Stipend 529,866 1104199-4501000 Transfer Out I T Master Plan 2,867,700 1104950-4400100 Capital Purchase of Capital Items 70,000 Total Reallocated and Increased Appropriations 4,423,426 Net Increase to Appropriations $ 1,350,574 Other Funds Fund Department/Acct# Department Name Description Amount 229 2294210-4391400 Police Grants COPS AB 3229 Funds 5,200 237 2374511-4364600 Energy Program Called Principal 80,000 308 3084677-4309000 Debt Service Prof-Others 540 309 3094199-4501000 Debt Service Inter-fund Transfers 4,900 311 3114676-4364600 Debt Service Prof-Others 5,000 315 3154350-4309000 Debt Service Prof-Others 2,900 391 3914790-4364600 Debt Service Called Principal 5,000 451 4514341-4400100 Capital Bond Fund Alessandro Improvements 62,600 451 4514365-4400100 Capital Bond Fund Portola/Dinah Shore 431,900 451 4514430-5000101 Capital Bond Fund San Pablo Street 42,600 451 4514679-4400100 Capital Bond Fund El Paseo Renovation 3,500 520 5204195-4802100 Desert Willow Course&Ground 96,000 S77 5774195-4102000 Internal Service Funds Compensation Absences 194,000 450 4500000-3910000 Building Maintenance Fund Future Building Maintenance 350,000 577 5770000-3910000 Internal Service Funds Compensation Absences 243,840 530 5300000-3910000 Equipment Replacement I T Master Plan 2,867,700 576 5760000-3910000 Transfer In OPEB-Reduction of Liability 684,660 576 5760000-3910000 Transfer In Monthly Retiree Health Stipend 529,866 5,610,206 REPLACEMENT EXHIBIT Fund Revenue Gen Fund Account Number 1100000-3188300 1100000-3188330 1100000-3111030 1100000-3611000 1100000-3412300 1100000-3133000 City of Palm Desert Year -End Adjustments For Fiscal Year Ending lune 30, 2017 Fund Department/Acct 4 Department Name Appropriations Adjustments and Transfers Gen Fund 1104210 Public Safety 1104300 Public Works Admin 1104310 Public Works Maintenance 1104331 Public Works Auto - Fleet 1104417 Marketing 1104420 Building and Safety 1104430 Economic Development 1104800 Contributions 1104192 Insurance 1104159 General Services Reallocations and Transfers Gen Fund 1104111-4321000 1104114-4309000 1104419-4100100 1104610-4332001 1104614-4337001 1104614-4351000 1104618-4400100 1104199-4501000 1104199-4501000 1104199-4501000 1104950-4400100 City Clerk Elections Visitors Services Civic Center Park Landscaping Services Landscaping Services Description/Reason TOT Short-term Rental TOT Property tax from RDA prop sales and residual TI Interest Income Burrtec Vehicle Impact Fee Sales Tax Total Revenue Adjustment Description Open positions Open positions Open positions Vehicle purchase delayed Less than expected Less than expected Less than expected Less than expected Insurance Premium paid by Housing Less than expected Total Decreased Appropriations Legal Advertising Prof -Others Salaries Repairs and Maintenance Repairs and Maintenance utilities -Water City Wide Park Improvement: Repairs and Maintenance Transfer Out Transfer Out Transfer Out Capital OPEB - Reduction of Liability Monthly Retiree Health Stipend T Master Plan Purchase of Capital Items Total Increased Appropriations * Changes to Appropriations (Total Decreased + Total Increased Allocations} Resolution 2017- 71 5 5 5 5 5 5 5 5 5 5 5 $ $ Net Increase to General Fund Reserves (Revenue+ net Appropriations and Transfers $ Other Funds Fund Department/Acct N 229 2294210-4391400 237 2374511-4364600 • 238 2384515-4400100 308 3084677-4309000 309 3094199-4501000 311 3114676.4364600 315 3154350-4309000 391 3914790.4364600 451 4514341-4400100 451 4514365-4400100 451 4514430-5000101 451 4514679-4400100 520 5204195-4802100 577 5774195-4102000 450 4500000-3910000 577 5770000-3910000 530 5300000-3910000 576 5760000-3910000 576 5760000-3910000 Department Name Police Grants Energy Program Air Quality Management Debt Service Debt Service Debt Service Debt Service Debt Service Capital Bond Fund Capital Bond Fund Capital Bond Fund Capital Bond Fund Desert Willow Internal Service Funds Building Maintenance Fund Internal Service Funds Equipment Replacement Transfer In Transfer In Description COPS AB 3229 Funds Called Principal Charging Station Prof -Others Inter -fund Transfers Prof -Others Prof -Others Called Principal Alessandro Improvements Portola/Dinah Shore San Pablo Street El Paseo Renovation Course & Ground Compensation Absences Future Building Maintenance Compensation Absences IT Master Plan OPEB - Reduction of Liability Monthly Retiree Health Stipend Exhibit A Amount 1,170, 000 878,000 400,000 60,000 483,000 (290,000) 2,701,000 Amount (1,310,000) (400,900) (400,000) (170,000) (218,000) (100,000) (275,000) (50,000) (75,000) (75,000) (3,073,000) 16, 700 1,100 2,200 58,000 128,700 49,300 15, 200 684,660 529,866 2,867,700 70,000 4,423,426 1,350,426 1,350,574 Amount 5,200 S0,000 58,000 540 4,900 5,000 2,900 5,000 62,600 431,900 42,600 3,500 96,000 194,000 350,000 243,840 2,867,700 684,660 529,866 5,668,206 • Added October 10, 2017