Introduc tion to Ba se line F Y 2018- 2020 T wo- Ye a r Budg e t a nd F Y 2018- 2023 F ive - Ye a r Pla n F ina nc e De pa rtme nt Co mmunity Budg e t Wo rksho p F e b rua ry, 2018 1 Rive rside CA.g ov Rive rside CA.g ov
BACKGROUND • De c e mb e r 2015: City Co unc il a ppro ve d the mo ve to a two -ye a r b udg e t in the c o nte xt o f a five -ye a r pla n • Se pte mb e r 2017: Sta ff b e g a n pla nning fo r the F Y 2018-20 T wo -Ye a r Budg e t a nd F Y 2018-23 F ive -Ye a r Pla n • June 2018: Ado ptio n o f the City-wide F Y 2018-20 T wo -Ye a r Budg e t a nd Ge ne ra l F und F Y 2018-23 F ive -Ye a r Pla n a re a ntic ipa te d 2 Rive rside CA.g ov
PL ANNING PROCE SS F Y 2018- 2023 F IVE - YE AR F INANCIAL PL AN F ina nc ia l de c isio ns with ke y c halle ng e s and so lutio ns ide ntifie d and linke d to Rive rside a re ma de in the 2.1 Strate g ic Plan and F ive -Ye ar Capital I mpro ve me nt Plan c o nte xt o f the F ive -Ye a r F Y 2018- 2020 F ina nc ia l Pla n. T wo- Ye a r Budg e t Co mpre he nsive YE AR 1 YE AR 2 YE AR 3 YE AR 4 YE AR 5 ve tting b y Budg e t F Y 18- 19 F Y 19- 20 F Y 20- 21 F Y 21- 22 F Y 22- 23 E ng a g e me nt T wo- Ye a r T wo- Ye a r T wo- Ye a r T wo- Ye a r T wo- Ye a r Budg e t Budg e t Budg e t Budg e t Budg e t Co mmissio n, a pplic a b le c itywide Bo a rd a nd Co mmissio ns, City Co unc il a nd the Rive rside Co mmunity. F o c us o n de ta ile d Mid-Cyc le Upda te d Annua lly b udg e t re vie w to Qua rte rly re ve nue , de ve lo pme nt fo r inc o rpo ra te two -ye a rs with five - upda te s to e xpe nditure , de b t a nd ye a r fina nc ia l Rive rside 2.1 a nd fo re c a sts. re fine me nts to inve stme nt re vie ws a re I nc o rpo ra te F ive -Ye a r c o nduc te d. Rive rside 2.1. F ina nc ia l Pla n. 3 Rive rside CA.g ov
F Y 18- 20 BUDGE T T HE ME S F Y 2018- 2020 KE Y BUDGE T ARY T HE ME S Promise s Ma de , F ina nc ia l F ina nc ia l Ac c ura c y Ma inta ining T ra nspa re nt & Promise s Ke pt Re sponsibility & E sse ntia l Se rvic e s Pa rtic ipa tory Disc ipline a nd Infra struc ture Proc e ss E xe c utive F inanc ial re spo nsib ility I n c o nc e rt with the T hro ug h c re atio n o f the With the ado ptio n o f the F ive -Ye ar manag e me nt se e s a re q uire s Re spo nsib le Spe nding Budg e t E ng ag e me nt Me asure Z Spe nding Plan in May c o mpre he nsive data ac kno wle dg ing and Visio n Ple dg e (Oc t. Co mmissio n (BE C), the 2016, the City made financ ial and c o lle c tio n and fully disc lo sing the 2016), the City will find City c o mmitte d to a o pe ratio nal pro mise s to the analyzatio n e ffo rt to City’ s c ritic al funding ways to addre ss the pub lic ve tting o f its ac hie ve ac c urate re q uire me nts, inc luding c halle ng e s in funding financ e s. T he two -ye ar Rive rside c o mmunity. Staff is financ ial targ e ts and unfunde d ne e ds. its e xisting pro g rams b udg e t pro c e ss c o mmitte d to b uilding o n the pro je c tio ns as a c o re F isc al disc ipline and se rvic e s, and inc lude s many financ ial suc c e sse s o f F Y 2016-2018 te ne t, e sse ntial fo r the de mands City ide ntifying re ve nue s fo r o ppo rtunitie s fo r the b y pre se rving se rvic e s and finding City’ s future fisc al De partme nts o pe rate the c ritic al ne e ds that Rive rside c o mmunity to fo undatio n. within the ir b udg e t. have b e e n unfunde d c o ntrib ute , inc luding additio nal e ffic ie nc ie s to e nsure Manag e me nt ac tio n fo r ye ars, inc luding City Co unc il, BE C, and the City’ s c o ntinue d financ ial c alls fo r time ly re pair, mainte nanc e ward-spe c ific suc c e ss and ac hie ve me nt o f its re c o mme ndatio n to and re plac e me nt o f me e ting s. Additio nally, Rive rside 2.1 strate g ic initiative s. City Co unc il to addre ss o ur b uilding s, ro ads re ade r-frie ndly b udg e t any financ ial issue s and side walks, pub lic atio ns will b e c o nfro nting the City. stre e tlig hts, and fle e t made availab le . inc luding first re spo nde r ve hic le s. 4 Rive rside CA.g ov
ST RONG F OUNDAT ION Ge ne ra l o b lig a tio n ST RONG F INANCIAL b o nd ra ting inc re a se d F OUNDAT ION fro m A+ to AA– b y S&P • Me a sure Z F YE 2017-18 pro je c te d • F Y 2016-18 b udg e t re duc tio ns Ge ne ra l F und re se rve • Budg e t E ng a g e me nt Co mmissio n o f mo re tha n 20% • T wo -ye a r b udg e t a nd five -ye a r pla n 5 Rive rside CA.g ov
BOT T OM L INE • F la tte ning o f re ve nue s o Annua lize d g ro wth ra te in c o re re ve nue so urc e s c o ntinuing to slo w ; 1.5% - 2% a s c o mpa re d to 7% in fisc a l ye a rs 2013-15 • Me a sure Z Co ntrib utio n o I n F Y 2017-18, $20.5M to Ge ne ra l F und. Sta ff a ntic ipa te s c o ntrib utio ns o f $13.2M in F Y 2018-19 a nd $18.3M in F Y 2019-20 • Pe rso nne l Co sts o Mo re tha n 80% o f to ta l e xpe nditure s, c o nsiste nt with o the r full-se rvic e c itie s o I nc re a sing Ca lPE RS c o sts – Sta te wide issue • Ma na g e d Sa ving s o I nste a d o f va g ue a nd te mpo ra ry b udg e t me a sure s, pe rma ne nt b a la nc ing me a sure s will no w b e re q uire d • Co ntra c ts a nd Sub sidie s o I n-de pth re vie w to unde rsta nd a nd minimize impa c t o n dire c t se rvic e s • Pro je c te d Sho rtfa lls o Pre limina ry b a se line b udg e t pro je c ts sho rtfa lls o f $3 millio n in F Y 2018-19; $6 millio n in F Y 2019-20 6 Rive rside CA.g ov
BASE L INE ASSUMPT IONS - RE VE NUE S • Sa le s T a x o Slo wing ; 2% F Y 2018-19, 1.5% F Y 2019-20 • Pro pe rty T a x o Gro wing ; 3.7% pe r ye a r pro je c te d fo r F Y 2018-20 • Utility Use r T a x o F la t sinc e F Y 2012-13 • Ge ne ra l F und T ra nsfe r o Me a sure Z o E le c tric & Wa te r • Othe r Re ve nue s The above chart represents the year-over-year increase or decrease in General Fund revenues. The drop in FY 2018-19 revenues is o Mo stly fla t primarily due to a 35% decrease in the Measure Z fund transfer, from $20.5 million in 2017-18 to $13.2 million in FY 2018-19. 7 Rive rside CA.g ov
GE NE RAL F UND T RANSF E R Wha t It Pa ys F or • Cha rte r pro visio n whe re b y up to 11.5% o f the prio r fisc a l ye a r’ s E le c tric a nd Wa te r o pe ra ting re ve nue s a re tra nsfe rre d to the Ge ne ra l F und. • T his mo ne y g o e s into the Ge ne ra l F und, a nd pa ys fo r e sse ntia l City se rvic e s suc h a s pub lic sa fe ty, pub lic wo rks, lib ra rie s a nd re c re a tio n pro g ra ms, a nd b usine ss a ssista nc e . • Appro xima te ly $47 millio n thro ug h the Ge ne ra l F und T ra nsfe r in F Y 2018-19. 8 Rive rside CA.g ov
HOW DOE S RIVE RSIDE COMPARE ? • Rive rside re ve nue re c o ve ry is a t just 97.3% o f pre -re c e ssio n le ve ls, in line with o the r c itie s • Co ntinue d e c o no mic 97.3 Riverside unc e rta inty • Slo wing re ve nue s in po st- re c e ssio n pe rio d “T he drastic e c o no mic and te c hno lo g ic al c hang e s o c c urring in the mo st re c e nt re c o ve ry pe rio d, as we ll o ve r the past 30 ye ars, po int to the impe rative to re -e xamine the fie ld’ s c o nve ntio nal thinking ab o ut the ability of city finance s to buffe r against e conomic downtur ns and to captur e r e ve nue gr owth during pe rio ds o f e c o no mic e xpansio n.” - Natio nal L e ag ue o f Citie s 2017 “City F isc al Co nditio ns” - Natio nal L e ag ue o f Citie s 2017 “City F isc al Co nditio ns” 9 Rive rside CA.g ov
BASE L INE ASSUMPT IONS - E XPE NDIT URE S • • Pe rso nne l Cha rg e s a nd T ra nsfe rs o Pa rtne rship Co mpe nsa tio n Mo de l o Ne w Co st Allo c a tio n Pla n o Ca lPE RS • Sub sidie s • No n-Pe rso nne l o I nc re a se s b a se d o n histo ric a l CPI 10 Rive rside CA.g ov
PE RSONNE L COST S - OVE RVIE W • Re pre se nt mo re tha n 80% o f the to ta l Ge ne ra l F und Budg e t • Pa rtne rship Co mpe nsa tio n Mo de l tie s pa y ra ise s fo r mo st re pre se nte d e mplo ye e s to c o re re ve nue so urc e s • Ca lPE RS is the la rg e st c o st drive r, o utpa c ing sa la rie s – Ge ne ra l F und Ca lPE RS c o sts a re e xpe c te d to inc re a se mo re tha n The ratio of CalPERS costs to Salaries will continue to narrow as $22 millio n o r 46%. salary increases tied to revenues level off. Some continued salary increases are projected in the form of merit pay, within the position salary range. 11 Rive rside CA.g ov
PE RSONNE L COST S - CAL PE RS RAT E S Pa y ra te inc re a se s a re b a se d o n e stima te d pe rfo rma nc e o f the Ba la nc e d Re ve nue I nde x (BRI ). T he PE RS Give b a c k re pre se nts the shift o f City c o sts to the e mplo ye e . T he re a re no pa y ra te inc re a se s o r PE RS Give b a c ks a ssume d fo r F Y 2021-22 o r F Y 2022-23. 12 Rive rside CA.g ov
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