BRIEFING OVERVIEW OF THE 2017/18 OPERATING BUDGET & CAPITAL - PowerPoint PPT Presentation

BUDGET BRIEFING OVERVIEW OF THE 2017/18 OPERATING BUDGET & CAPITAL IMPROVEMENT PROGRAM JUNE 2017

PURPOSE OF THE OPERATING BUDGET & CIP • Establish/review highest priorities for municipal service delivery to meet unique community needs • Identify, plan for and fund one-time capital needs

DANVILLE’S MISSION Deliver municipal services that make people’s live better. We: • Keep residents, businesses and property safe • Provide well ‐ maintained public facilities • Protect our environment, preserve our history and retain the special character • Provide opportunities that support residents’ growth and enrichment • Promote and support economic vitality and growth • Represent and promote Danville’s best interests • Celebrate community through family oriented special events • Engage and communicate with residents and businesses effectively

SERVICE DELIVERY STRUCTURE

DANVILLE’S APPROACH = FISCAL SUSTAINABILITY 1. Focus on Vision, Mission & Priorities 2. Combine approaches to deliver service 3. Invest in partnerships & technology 4. Minimize borrowing; maintain healthy reserves 5. Look out 10 years - estimate conservatively

OPERATING BUDGET & CIP INCLUDES REVENUES – BY TYPE AND SOURCE ONGOING SERVICES/EXPENDITURES (OPERATING = ONGOING) COMPARISONS TO PRIOR YEAR FUND TRANSFERS (TO CIP) 10-YEAR FORECASTS/FISCAL SUSTAINABILITY CAPITAL PROJECTS – PRIORITIES AND FUNDING (CAPITAL = ONE-TIME)

REVENUES

FACTORS AFFECTING CITY REVENUES • Economy • Growth • Trends • Local Policy • State Actions May change from year to year

TYPES OF REVENUE • Taxes : “General” (T.O.T., U.U.T., B.L.T.) versus “Special” (Transportation, education…) – different voter requirements • Fees : charge for a service (Development impact, franchise, building permit) • Assessments : levied based upon direct benefit received (LLAD, Clean Water, Mello Roos…) – require property owner approval • Intergovernmental : received for specific purpose from other gov’t agencies, primarily state and federal (SLEFS, gas tax, grants…) • Other : locally-raised (utilities, facility rentals, recreation classes, etc.)

PURPOSE OF REVENUE • General Purpose (General Fund) – 74% The main operating fund of the Town May be used for any purpose • Special/Restricted Purpose (Special Revenue) – 26% May be used only for purpose for which it was collected Examples: LLAD, permit fees, gas tax, Measure J

TOP REVENUE SOURCES Source Budgeted General Fund Property Tax $13,041,067 Sales Tax $5,314,000 Parks & Recreation $2,581,657 Franchise Fees $2,378,874 Other G.F. $1,933,623 Special Revenue Lighting & Landscape (LLAD) $3,120,682 Planning & Building $2,752,600 Gas Tax $1,211,992 Measure J $742,857 Other S.R. $938,716 TOTAL $34,016,068

2017/18 REVENUES Town General Fund $25,249,221 (+4.8%) Special Revenue $ 8,766,847 (+5.2%) Total Town $34,016,068 (+4.9%) Successor Agency $ 2,181,597 (-2.6%) GRAND TOTAL $36,197,665 (+4.4%)

TOP REVENUE SOURCES

PROPERTY TAX DISTRIBUTION DANVILLE TYPICAL CITY Schools Schools 45% 52% Cities/ Towns Special 21% Districts 23% Counties 27% County Other 15% Town 3% 7% Special Districts 7%

SALES TAX DISTRIBUTION P AID ON RETAIL SALES , VARIES BY CITY IN C ALIFORNIA B ASE R ATE IN C ONTRA C OSTA C OUNTY @ 8.5% Breakdown of State’s Portion of Sales Tax from Contra Costa County (6.0%) Local (City or State: General County), 1.0% Fund State 5.0% 6.5% County Health and Welfare, 0.5% Countywide Transportation State: Local State: Local – Measure J, Revenue Fund, Public Safety 0.5% 0.5% Fund (Prop 172), 0.5%

REVENUE TRENDS • General Fund • Growth has averaged 4% annually last 15 years. • Largely driven by property Tax/ Property Values • Sales tax eroding • Future forecast estimated @ 1.7% annually • Special Revenue • Growth has averaged 2.5% annually last 15 years. • Future forecast estimated @ about 1.25% annually • Total Revenue • Growth has averaged 3.6% annually last 15 years. • Future forecast estimated @ about 1.6% annually

PROPERTY & SALES TAX COMPARISON – 2016/17 BUDGETS $1,200 Sales Tax Property Tax $1,000 $800 $755 $600 $513 $308 $264 $400 $214 $265 $200 $324 $318 $319 $321 $129 $85 $- Danville San Ramon Walnut Livermore Dublin Pleasanton Creek Population 42,865 78,363 70,018 88,368 57,349 74,982 Sales & $17.0 M $26.9M $40.8M $55.4M $48.0M $80.7M Property Tax

EXPENDITURES

REVENUE TRENDS 2016/17 2017/18 +/- G ENERAL G OV ’ T . $ 1,792,873 $ 1,933,215 $ 140,342 P OLICE $ 9,251,269 $ 9,644,494 $ 393,225 A DMINISTRATIVE S ERVICES $ 3,601,723 $ 3,888,736 $ 287,013 D EVELOPMENT S ERVICES $ 4,284,881 $ 4,453,198 $ 168,317 M AINTENANCE S ERVICES $ 7,289,945 $ 7,554,321 $ 264,376 R ECREATION , A RTS & C OMMUNITY S ERVICES $ 3,973,279 $ 4,237,893 $ 264,614 TOTAL $30,193,970 $31,711,857 $ 1,517,887

TOWN EXPENDITURES Successor Agency 3% General Recreation Government Services 6% 13% Police 29% Maintenance Services 23% Administrative Services Development 12% Services 14%

2017/18 Changes in Operating Expenditures – By Department $ Change Program/Function Purpose from 16/17 Increased software maintenance costs; increased General Government +$140,342 personnel costs Increase in contract cost for sworn personnel; Police Services + $393,225 increase in contract cost for animal services Increased liability insurance premiums; increased vehicle replacement costs; increased personnel Administrative Services +$287,013 costs Increased software maintenance costs for Energov; increased consultant costs; increased Development Services + 168,317 personnel costs Increased contract and utility costs in Roadside Maintenance Services + $264,376 and Park Maintenance; increased personnel costs Increased instructor/ contract services costs in Recreation, Arts, & Cultural Arts and Youth Services; increased Community Services +264,614 personnel costs

2017/18 Changes in Operating Expenditures – By Purpose $ Change Category Purpose from 16/17 Employee Expenses +$449,325 Pay for Performance and Benefit costs Increased hourly cost for temporary staff – all Temporary Salaries + $32,362 departments Administration +$61,723 Increased pass through and training costs Materials and Supplies + 56,581 Increased software maintenance costs Police Services; Building Plan Check; Landscape Maintenance and Recreation, Arts and Community Contract Services + $585,895 Services Equipment +$31,331 Increased vehicle replacement costs Increased liability insurance costs; increased utility Program Activities +363,782 costs

EXPENDITURES TRENDS • Total operating expenditures have increased by an average of 4.5% annually over past 15 years Future forecast estimated at 2.25% annually • Personnel costs have increased by an average of 5.2% annually over past 15 years Future forecast estimated at 2.0% annually • Police costs have increased by an average of 6.25% annually over past 15 years Future forecast estimated at 3.5% annually

PER CAPITA OPERATING EXPENDITURES – 2016/17 BUDGETS $3,000 $2,748 $2,500 $2,000 $1,500 $1,235 $1,214 $1,017 $905 $1,000 $733 $500 $- Danville San Ramon Livermore Walnut Creek Dublin Pleasanton Total Budget $31.4M $70.9 $89.6 $85.0 $70.8 $206.1 Population 42,865 78,363 88,138 70,018 57,349 74,982 (2016)

STAFFING & EMPLOYEE COSTS • Staffing levels: • 94.75 FTE permanent • 30.0 FTE contract (sworn police officers) • 36.0 FTE part-time temporary • Total employee expenses: $11,598,838 (  4.0) • Merit-based salary adjustment • No unfunded pension liabilities

PERSONNEL FUNDING SOURCES Gas Tax $692,723 Building & 6% Measure J Planning $218,520 $1,901,459 LLAD 2% 16% $1,430,709 12% CIP $80,748 1% Engineering General Fund $209,369 $6,917,983 2% 60% Clean Water $147,327 1% Last 20 years – Personnel Costs = 34-37% of Operating Budget

2011-2017 • BAY AREA CPI +17% • EMPLOYEE MEDICAL COVERAGE +50-59% • EMPLOYEE SALARY RANGES +13% • PAY FOR PERFORMANCE +20-37%

CAPITAL IMPROVEMENT PROGRAM • Identifies current and future capital needs, and sources of funding for projects categorized as: • General Improvements • Parks and Facilities • Transportation • 47 separate projects recommended for 2017/18 with appropriations totaling $12,722,191

LOOKING AHEAD

UPCOMING CHALLENGES • Increased expectations/demands in digital age • Erosion of revenues- expenses outpacing revenue growth • Increased Public Safety costs • Over $200 million in infrastructure to maintain • Need to balance Capital and Operating expenses • Increasing medical and benefit costs

TEN-YEAR PICTURE • Operating costs carry over; capital costs don’t • At current levels, expenditures outpace revenues by 1.5% annually • Will need to continue to carefully balance • Ten-year forecasts updated annually

QUESTIONS?