BOARD OF APPEALS Budget Presentation FY20 & FY21 OVERVIEW - PowerPoint PPT Presentation

BOARD OF APPEALS Budget Presentation FY20 & FY21

OVERVIEW City departments must submit two-year budget proposals by February 21.  Required by San Francisco Administrative Code Chapter 3.3(a) Before the submittal deadline, the Board must adopt budgets for Fiscal Years (FYs) 2019-20 & 2020-21. This presentation provides:  An overview of the Board’s budget structure  An update on the current year’s budget (FY19)  Recommendations for FY20 & FY21 budgets  Budget detail for FY20 & FY21 2

OVERVIEW – REVENUE BUDGET Surcharges = 96% of budget  Collected on new and renewed permits  Rates based on percentage of cases originating from each underlying department and anticipated permit application volume  Rates analyzed annually and adjusted if needed Filing Fees = 4% of budget Filing Fees 4% Surcharges 95%  Collected by Board when appeals are filed  Amount collected fluctuates based on appeal volume and types filed each year Surcharges Filing Fees Surcharges 96% 3

OVERVIEW – EXPENDITURE BUDGET Over two- thirds (69%) of the Board’s expenditure budget covers salary & fringe benefit expenses. Services provided by other departments and rent comprise the next largest portion of the budget (23%). Current FY Budget 1% 7% The remainder of the budget consists of:  Specialized Services (7%) 23%  Neighborhood notification, interpreters, delivery services and office machine rental  Materials & Supplies (1%) 69%  Paper & other office supplies Salaries & Fringe Benefits Services of Other Departments* Specialized Services Materials & Supplies 4

CURRENT FY UPDATE YEAR-END PROJECTION – APPEALS Projected appeal volume for FY19 (148 appeals) is 16% below the 10 year average of 176 appeals per year. Appeal Volume 250 200 150 100 50 0 09 10 11 12 13 14 15 16 17 18 19 (proj) Number of Appeals Average 5

CURRENT FY UPDATE YEAR-END PROJECTION – REVENUE Based on six month actuals, filing fee revenue and surcharge revenue are lower than projected.  Filing fee revenue deficit ~ 21%  Surcharge revenue deficit ~ 22%  Reduced collection anticipated: surcharge rates were significantly lowered for FY18 and continued in FY19 to prevent over collection (see slide 17)  Any year- end shortage can be covered by Board’s reserve fund Current FY Six Month Year End Projected REVENUE Budget Actuals Projection Variance Filing Fees 46,037 18,253 36,506 (9,531) Surcharges 1,026,263 399,333 798,666 (227,597) Total 1,072,300 417,586 835,172 (237,128) 6

CURRENT FY UPDATE YEAR-END PROJECTION – EXPENDITURES Year-end expenditure savings of $59,512 are projected, based on mid-year spending. Current FY Six Month Year End Projected EXPENDITURES Budget Actuals Projection Variance Salaries & Fringe Benefits 738,076 366,328 749,074 10,998 Services of Other 250,634 77,654 *220,634 (30,000) Departments Specialized Services 74,192 19,032 38,064 (36,128) Materials & Supplies 9,398 2,508 5,016 (4,382) Total 1,072,300 465,522 1,012,788 (59,512) * The BOA was not billed for all interdepartmental services in the first half of the fiscal year. The projection above is based on the assumption that the Board will spend the amount budgeted with the exception of anticipated savings of $30,000 on the amount budgeted for the City Attorney’s services ($130,000 budgeted). 7

CURRENT FY UPDATE YEAR-END PROJECTION – VARIANCE Based on six month revenue and expenditure information, the Board is expected to end the current fiscal year with a deficit of approximately $177,616. Current FY Year End Projected VARIANCE Budget Projection Variance Revenue 1,072,300 851,172 (237,128) Expenditures 1,072,300 1,012,788 (59,512) Variance (177,616) [Revenue Deficit plus Expenditure savings] 8

FY20 & FY21 BUDGETS PROPOSED REVENUE Surcharge rates are designed to generate the revenue needed to cover operating expenses in both FYs. Rates may be adjusted if deemed insufficient to cover expenses.  Controller may adjust by CPI  Legislation is required if an increase beyond CPI is needed  Legislation may also be warranted to change the permit types upon which surcharges are levied  Controller performs rate analysis after other departments submit permit data in April  Board’s reserve fund is available to offset increased expenditures  Fund currently at $955,773  $208,000 for the new appeal management system (FY19 )  $160,000 for the move to 49 SVN (FY20)  $130,000 for Rent after moving to the new building (FY21) Surcharge rates will be analyzed for FY20 during this year’s budget process.  The Board Office will be moving to 49 SVN in Spring 2020. Given the significant increase in rent, surcharge rates will likely be raised. No change is projected in filing fee revenue. 9

FY20 & FY21 BUDGETS PROPOSED EXPENDITURES Increased expenditures in both budget years  FY20 = 19.4% ($207,896)  FY21 = Although spending is down 4.6% from FY20, compared to FY19, spending is up 14%  Increases cover:  Mandatory increases in salaries & fringe benefits  Move costs and increased rent  Computer licensing costs Variance CURRENT Variance from EXPENDITURES FY20 FY 21 From FY19 FY19 FY20 Salary & Fringe 738,076 770,487 32,411 798,565 28,078 Non-Personnel Svcs 74,192 80,792 6,600 80,792 0 Materials & Supplies 9,398 9,398 0 9,398 0 Work Orders & Infrastructure (includes rent and move 250,634 419,519 168,885 332,667 (86,852) costs) TOTAL 1,072,300 1,280,196 207,896 1,221,422 (58,774) *SEE APPENDIX A.2 FOR EXPENDITURE DETAIL 10

FY20 & FY21 BUDGETS RECOMMENDATIONS Work with Controller’s Office and Mayor’s Office to assess:  Surcharge rate changes that are warranted for FY20 taking into consideration the increased cost of rent at 49 SVN.  Legislation is needed to adjust the permit types upon which surcharges are levied Use allocation from Board’s reserve fund to:  Offset any revenue shortfall in current year  Cover the cost of a needed database conversion  Cover move costs  Cover increased rent Continue to closely manage operating expenses 11

APPENDIX Note: some of the figures in the attached budget detail may change as fringe benefit rates and other variables are finalized. The FY21 budget will be reconsidered during next year’s budget process. 12

APPENDIX A.1 BUDGET DETAIL - REVENUE Current FY FY20 Variance FY21 Variance REVENUE Budget Proposed From FY19 Proposed From FY20 FILING FEES 46,037 0 46,037 0 46,037 SURCHARGES 207,896 (58,774) 1,026,263 1,234,159 1,175,385 TOTAL REVENUE 1,280,196 207,896 1,221,422 (58,774) 1,072,300 13

APPENDIX A.2 BUDGET DETAIL – EXPENDITURES: PERSONNEL FY20 Variance from FY21 Variance from PERSONNEL FY19 Proposed FY19 Proposed FY20 Permanent Salaries 469,224 485,809 16,585 498,498 12,689 Premium Pay 2,704 2,704 0 2,704 0 Overtime 8,323 8,323 0 8,323 0 Retirement 86,278 98,939 12,661 104,403 5,464 Social Security 34,694 36,008 1,314 37,093 1,085 Health Service 122,624 125,418 2,794 133,902 8,484 Dental Coverage 6,489 6,189 (300) 6,189 0 Unemployment 1,295 1,341 46 1,375 34 Insurance Other Fringe Benefits 6,445 5,756 (689) 6,078 322 TOTAL 738,076 770,487 32,411 798,565 28,078 14

APPENDIX A.2 BUDGET DETAIL – EXPENDITURES: SERVICES OF OTHER DEPARTMENTS, INFRASTRUCTURE, RENT & MOVE COSTS FY19 FY20 Variance FY21 Variance from SERVICES Proposed from FY19 Proposed FY20 Dept. of Technology 1,587 1,587 0 1,587 0 IT 10,557 10,965 408 10,965 0 Infrastructure Cost City Attorney 130,000 130,000 0 130,000 0 58,805 58,805 0 58,805 0 SFGOV TV Enterprise Tech Agreement 755 777 22 777 0 Telephone 567 482 (85) 482 0 Reproduction 51 51 0 51 0 Move Cost 160,000 160,000 0 (160,000) Rent Paid To Real Estate 48,312 56,852 8,540 130,000 73,148 TOTAL 250,634 419,519 168,885 332,667 (86,852) 15

APPENDIX A.2 BUDGET DETAIL – EXPENDITURES (NON-PERSONNEL): SPECIALIZED SERVICES AND MATERIALS AND SUPPLIES NON-PERSONNEL FY19 FY20 Variance from Proposed Variance from SPECIALIZED SERVICES Proposed FY19 FY21 FY20 Training 2,000 2,000 0 2,000 0 Employee Expenses 500 500 0 500 0 Professional& 57,992 64,592 6,600 64,592 0 Specialized Services Rents & Leases- 5,700 5,700 0 5,700 0 Equipment Other Current Expenses 8,000 8,000 0 8,000 0 TOTAL 74,192 80,792 6,600 80,792 0 Proposed Variance from Proposed Variance from MATERIALS & SUPPLIES FY19 FY20 FY19 FY21 FY20 Other Material & Supplies 9,398 9,398 0 9,398 0 TOTAL 9,398 9,398 0 9,398 0 16