The URL can be used to link to this page

Home My WebLink AboutRes 2016-85 - FY 15-16 Final YE Budget AdjustmentsRESOLUTION NO. 2016-85 CITY OF PALM DESERT STAFF REPORT REQUEST: ADOPT RESOLUTION NO. 2016- 85 AUTHORIZING FISCAL YEAR 2015-2016 FINAL BUDGET ADJUSTMENTS TO REVENUE AND EXPENDITURES AND AUTHORIZE CERTAIN RELATED EXPENDITURES FOR FISCAL YEAR 2016-2017 SUBMITTED BY: Janet M. Moore, Director of Finance DATE: November 10, 2016 CONTENTS: Resolution No. 2016 - 85 Recommendation By Minute Motion, that the City Council, 1. Waive further reading and adopt Resolution No. 2016- 85 authorizing the Fiscal Year 2015-2016 final year end budget adjustments to revenue and expenditures; and 2. Authorize and appropriate the expenditure of a true -up payment for the CalPERS employer minimum payment covering the previous actuarial report (2014-2016) of $487,255 and authorize and appropriate an additional estimated payment for the Fiscal Year 2016-2017 of $593,745 (Total $1,081,000). Executive Summary As part of the year end closing of the financial records, staff is recommending budget adjustments to both revenue and expenditures, plus a true -up payment to match the employer minimum payment for the previous Annual Valuation Report from CaIPERS which covers Fiscal Years 2014-2015 and 2015-2016, as well as an estimated payment for the Fiscal Year 2016-2017. With the exception of the true -up payment request, the increase in expenditures is based on actual expenditures and both requests are offset by an increase in revenues. Strateqic Plan Obiective While not specific to a single Strategic Plan Objective, it is a primary goal of the City Council to strive for accountability, financial stability, economic consistency and success through budgeting and planning. Background Staff is completing the analysis of the actual Fiscal Year 2015-2016 revenue and expenditures (unaudited) to the approved budget. Adjustments are necessary to both Staff Report Approve Resolution Authorizing FY 2015-2016 Budget Amendment for Appropriations November 10, 2016 Page 2 of 4 revenue and approved expenditures, based on actual amounts posted. In some cases this includes transferring monies to or from the General Fund as noted. The most notable change in revenue is primarily due to increased incremental Property Taxes received as part of the dissolution of redevelopment. The City as a taxing entity receives monies from residual receipts from the Redevelopment Property Tax Trust Fund. This amount is calculated on the amount available after all debts of the former agency are paid as well as real property sales. The former agency sold several properties during the fiscal year, providing one-time receipts that will not increase future revenue estimates. Other notable increases in revenue include sales tax, interest income and transient occupancy taxes. The City received the final payment for the triple flip this year. It was more than anticipated, resulting in approximately $495,000 increase to sales taxes. Interest rates also rose during the year resulting in additional interest income. Transient Occupancy taxes increased due increased hotel room rates and an increase in short-term rentals. During 2015-2016 there were approximately 170 new short term rental permits issued. The increases to expenditures are due to actual approved department/fund expenditures including reallocation of employee medical/dental/vision insurances into separate accounts, severance payments, increased legal advertising, unemployment costs, utilities, compensated accrual balances adjustments, and retiree health stipend transfer. Some of the expenditures are one-time adjustments that are made at the end of the year such as unemployment costs, compensated accrual balance adjustments and the retiree health stipends transfer. The increased expenditures in these departments are more than offset by the increase in revenues and are itemized in Exhibit A attached to the resolution. In addition to the above adjustments, staff is recommending utilizing the increase in revenue to make a true -up payment for the CaIPERS employer minimum payment covering the previous actuarial report (2014-2016) and the current estimated minimum payment. Currently CalPERS calculates the minimum payment for the pension liability, then applies that as a percentage of the overall payroll from the previous year. However, Palm Desert's payroll has decreased so the actual amount paid was the correct percentage, but it netted less than the minimum payment. The amount calculated by CalPERS for the annual minimum pension liability payment is amortized over 30 years and is approximately $2,722,000 annually. If the minimum is not paid each year, the unfunded portion of the pension liability increases. (As an aside, CalPERS has changed their methodology of calculating the annual minimum payment for pension liability so that it will no longer be expressed as a percentage of annual payroll. This will eliminate the potential for under (or over) payment in future years.) Staff presented an informational report to the City Council at a Study Session on June 30, 2016 regarding the minimum employer payment for the unfunded portion of the pension liability that is due each year. Staff is therefore requesting that we make a payment to true - up the amounts paid for the previous actuarial report (2014-2016), as well as make the estimated payment for the current year from the additional revenue received. The aggregate total requested for the three year true -up payment is approximately $1,081,000. Staff Report Approve Resolution Authorizing FY 2015-2016 Budget Amendment for Appropriations November 10, 2016 Page 3 of 4 The requested adjustments as noted are only for the actual adjustments needed and the true -up payment. Allocations to reserve accounts such as equipment replacement, deferred maintenance, and capital have not been included in this year's request, as staff is looking at a more comprehensive study to analyze the City's assets so that we have a current assessment of what may be needed as a realistic reserve dedicated for these purposes. The following table summarizes the budget adjustments that are included in the resolution for which staff recommends approval. Exhibit A and B provide detail for each of the proposed adjustments. Department Revenue Adjustments: Property Taxes Sales Tax Interest Eamings Transient Occupancy Tax Trans Occ Tax - Short Term Transfer In from GF (576) Traffic Safety (210) Public Safety Police Grants (229) Transfer In from GF (577) Appropriations: City Clerk City Manager Special Programs U nemploy ment General Services Traffic Safety Public Works -Park Maint Capital Outlay Interfund Transfers Out Traffic Safety (210) Public Safety Police Grants (229) Art in Public Places (436) I S F-Compensated Absences (577) City of Palm Desert Year -End Budget Adjustments Fiscal Year 2015.2016 Proposed Budget Category Adjustment (Decrease) General Fund $ 786,000 General Fund $ 495,000 General Fund $ 367,500 General Fund S 366,000 General Fund $ 309,000 Retiree Health Fund $ 480,000 Traffic Safety Fund $ 33,000 Public Safety Grant Fund $ 200.300 Intemal Service Comp Absences Fund $ 282,000 $ 3,318,800 General Fund $ 12,900 General Fund S 129,200 General Fund S 500 General Fund $ 7,020 General Fund S 487.255 General Fund $ 6,900 General Fund $ 12,400 General Fund $ 110,500 General Fund $ 762,000 Traffic Safety Fund $ 30,300 Public Safety Grant Fund S 200,300 Art in Public Places Fund S 10,100 Internal Service Comp Absences Fund S 292,900 S 2,062 275 Tottals by Fund 2,323 500 480 000 33,000 200.300 282 000 3,318 800 1,528,675 30,300 200,300 10.100 292,900 2,062,275 Staff Report Approve Resolution Authorizing FY 2015-2016 Budget Amendment for Appropriations November 10, 2016 Page 4 of 4 Fiscal Impact The attached resolutions will amend the Fiscal Year 2015-2016 budget to account for the noted adjustments. The increase in revenue to the General Fund is $2,323,500. The increase to the appropriations to the General Fund for Fiscal Year 2015-2016 is $1,528,675 which includes transfers out to other funds for the annual adjustments noted above. An additional appropriation of $593,745 will be made to the Fiscal Year 2016-2017 budget for the current year estimated minimum payment to CalPERS as described in this report. Submitted by: ,`J et M. Moore, Director of Finance Approval: Lauri Aylaian, City Manager RESOLUTION NO. 2016- 85 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING THE FISCAL YEAR 2015-2016 BUDGET AS A RESULT OF YEAR-END ADJUSTMENTS WHEREAS, as a result of a mid -year review of the budget, it is desirable to revise the Fiscal Year 2015-2016 Budget to reflect actual revenues and expenses; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, that the Fiscal Year 2015-2016 Budget is hereby revised as follows: 1. The amounts shown in the column entitled "Revised Appropriations" in the table entitled "City of Palm Desert, Year End 2015-2016 Budget Review, Revised Appropriations Operating Budget", attached hereto as Exhibit "A", are hereby appropriated to the departments, activities and projects identified therein as the Operating Budget for Fiscal Year 2015-2016. 2. The amounts shown in the column entitled "Revised Estimated Revenue" in the table entitled "City of Palm Desert, Year End 2015-2016 Budget Review, Revised Estimated Revenues", attached hereto as Exhibit "B", are hereby accepted as the Estimated Revenues for the Fiscal Year 2015-2016 for each fund and revenue source. PASSED, APPROVED AND ADOPTED at the regular meeting of the Palm Desert City Council held on this 10th day of November, 2016, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAI N: ROBERT A. SPIEGEL, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA RESOLUTION NO. 2016-85 Department City Clerk 1104111-4112200 1104111-4321000 City Manager 1104130-4100100 Special Programs 1104132-4112200 Unemployment 1104191-4112600 General Services 1104159-4111500 Traffic Safety 1104250-4351400 Public Works -Park Maint 1104611-4332001 Capital Outlay 110XXXX-4XXX00 Interfund Transfers Out 1104199-4501000 1104199-4501000 City of Palm Desert Year -End Budget Adjustments Exhibit A Fiscal Year 2015-2016 Proposed Budget Category Adjustment (Decrease) Ins Prem - Dental/Vision $ 8,000 Medical charge separation Req Legal Advertising $ 4,900 Additional legal advertising Total City Clerk $ 12,900 Salaries $ 129,200 Severance Total City Manager $ 129,200 Ins Prem - Dental/Vision $ 500 Medical charge separation Total Special Programs $ 500 Unemployment Ins. State (No Budget) $ 7,020 Year-end adjustment on case by case basis Total Unemployment $ 7,020 Retiremt Contrib (incl Unf Liab Pymts) $ Total Energy $ Utilities - Electric $ Total Public Wk Building Maint. $ Landscaping Services $ Total Landscaping $ Y/E Adjustment various depts $ Total Capital $ Interfund Transfers $ Transfer fm GF to Retiree Health $ Total Interfund Transfers $ Total General Fund Appropriations I $ ADDED - ALL OTHER FUNDS Traffic Safety (210) 2104199-4501000 Interfund Transfers $ Interfund Transfers $ Public Safety Police Grants (229) 2294210-4391400 COPSAB3229 $ 2294210-4392000 PACT Position $ Total Public Safety Police Grants (229) $ Art in Public Places (436) 4364650-4400100 Capital Outlay $ Total AIPP S ISF-Compensated Absences (577) 5774195-4102000 Comp Payable Changes $ Total ISF-Compensated Absences $ YE Adl and true up Unf Uab paymet for Valuation 487,255 per 14-15, 15-16 and est 16-17 487,255 6,900 Electric services 6,900 12,400 Additional landscaping maintenance 12,400 110,500 Financial Stmt Adj done at YE 110,500 282,000 Cover compensated absences 480,000 762,000 1,528,675 30,300 Transfer to GF for Street Resurfacing 30,300 22,000 Additional program funds 178,300 To budget for approved program expenditures 200,300 10,100 To budget for Capital project 10,100 292,900 YE adjustment for compensated absences 292,900 Exhibit A -approve Res amending year-end budget 2015-2016 Page 1 RESOLUTION NO. 2016-85 City of Palm Desert Year -End Budget Adjustments Fiscal Year 2015-2016 Revenue Adjustments: 1100000-3111030 Property Taxes 1100000-3133000 Sales Tax 1100000-3611000 Interest Earnings 1100000-3188300 Transient Occupancy Tax 1100000-3188330 Transient Occupancy Tax - Short Term Total General Fund Revenue Adjustments OTHER FUNDS: Exhibit B Proposed Revenue Adjustment $ 786,000 Residual Pymt Inc former RDA property sales $ 495,000 $ 367,500 Interest Rates up $ 366,000 Non -Convention Hotels Increase $ 309,000 Short-term Rental Increase $ 2,323,500 1 Retiree Health Fund (576) 5760000-3910000 Transfers In (From General Fund) $ 480,000 Total Retiree Health Revenue $ 480,000 Traffic Safety (210) 2100000-3511100 Interfund Transfers $ 33,000 Additional funds collected Interfund Transfers $ 33,000 Public Safety Police Grants (229) 2290000-3423001 COPS AB3229 $ 22,000 Additional program funds 2290000-3347204 PACT Position $ 178,300 To budget for approved program expenditures Total Public Safety Police Grants (229) $ 200,300 ISF-Compensated Absences (577) 5770000-3910000 Comp Payable Changes $ 282,000 Transfer In to cover Comp Payable liability Total ISF-Compensated Absences $ 282,000 1 Exhibit A -approve Res amending year-end budget 2015-2016 Page 2