65C - MID YEAR BUDGET UPDATE - Laserfiche WebLink

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Fiscal Year 2018-19 Mid -Year Budget Update February 5, 2019 Page 2 The City began the fiscal year 2018-19 with an approved budget, which included a one-time use of the General Fund balance in the amount of $10.2 million to balance the budget. With the updated revenue estimates, and appropriation amendments at Midyear, the estimated use of General Fund balance has decreased to $0.6 million. A summary of the estimated ending General Fund balance compared to the City Council reserve policy follows. The City Council's General Fund reserve policy requires an Operating Reserve of 16.67% to 20% of operating revenues or expenditures. The minimum calculated Operating Reserve is $43.4 million (16.67% of $262.6 million revenue, less one-time sale of land). The reserve policy also requires an Economic Uncertainty Reserve of 1% to 10% of recurring revenues. The minimum calculated Economic Uncertainty Reserve is $2.6 million (1% of General Fund revenues). The estimated ending fund balance at June 30, 2019 of $55.8 million is compliant with the General Fund reserve policy when combining both the operating reserve, economic uncertainty and unallocated accounts. Revised Revenue Projections General Fund revenues for FY 2018-19 are projected to total $262.6 million, an increase of $8.5 million from the adopted budget in the amount of $254.1 (total resources, less transfers -in and one-time use of the General fund balance). This includes a $15 million estimate of new Measure X revenue for April through June 2019. Staff has updated revenue estimates based on the Midyear analysis, and recommends budget adjustments for the significant variances (see Exhibit 1). Some updated estimates are insignificant and no budget adjustment is recommended at this time. The City's major revenue sources (Sales Tax -including Measure X, Property Tax, Property Tax - VLF Utility Users Tax, Business License and Hotel Visitors Tax) represent 68% of the total General Fund revenues. Other "Key revenues" for the City, include Cannabis, Jail, Parking Fines, Plan Check and Permitting, which amount to another 14% of the forecasted budget. Revised projections were made for the following revenues sources and are listed: 65C-2 Original Revised in millions Budget at Midyear Beginning Fund Balance 7/1/18 $ 56.4 $ 56.4 Net Activity (10.2) (0.6) Estimated Ending Fund Balance 6/30/19 $ 46.2 1 $ 55.81 Operating Reserve (16.67% operating revenue) $ 42.0 $ 43.4 Economic Uncertainty Reserve (1% revenue) 2.5 2.6 Total Reserve Requirement $ 44.6 $ 46.1 Estimated Ending Fund Balance 46.2 56.1 Excess/(Shortfall) $ 1.6 The City Council's General Fund reserve policy requires an Operating Reserve of 16.67% to 20% of operating revenues or expenditures. The minimum calculated Operating Reserve is $43.4 million (16.67% of $262.6 million revenue, less one-time sale of land). The reserve policy also requires an Economic Uncertainty Reserve of 1% to 10% of recurring revenues. The minimum calculated Economic Uncertainty Reserve is $2.6 million (1% of General Fund revenues). The estimated ending fund balance at June 30, 2019 of $55.8 million is compliant with the General Fund reserve policy when combining both the operating reserve, economic uncertainty and unallocated accounts. Revised Revenue Projections General Fund revenues for FY 2018-19 are projected to total $262.6 million, an increase of $8.5 million from the adopted budget in the amount of $254.1 (total resources, less transfers -in and one-time use of the General fund balance). This includes a $15 million estimate of new Measure X revenue for April through June 2019. Staff has updated revenue estimates based on the Midyear analysis, and recommends budget adjustments for the significant variances (see Exhibit 1). Some updated estimates are insignificant and no budget adjustment is recommended at this time. The City's major revenue sources (Sales Tax -including Measure X, Property Tax, Property Tax - VLF Utility Users Tax, Business License and Hotel Visitors Tax) represent 68% of the total General Fund revenues. Other "Key revenues" for the City, include Cannabis, Jail, Parking Fines, Plan Check and Permitting, which amount to another 14% of the forecasted budget. Revised projections were made for the following revenues sources and are listed: 65C-2