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HomeMy WebLinkAbout02- City Manager i i o j CITY OF SAN BERNARDINO CITY MANAGER'S OFFICE INTEROFFICE MEMORANDUM TO: Mayor and Common Council FROM: Charles E. McNeely, City Manager SUBJECT: Budget Balancing Strategy Options DATE: April 19, 2010 COPIES: Department Directors Over the last two and a half years, the historic downturn of the national economy has had a significant negative impact on the City's financial condition. To address these circumstances, the City has implemented numerous actions designed to constrain General Fund spending, including imposing a freeze on most hiring, asking vendors to take a voluntary 5% reduction in contract costs, placing restrictions on non-mandated travel and training, and reducing supply and material purchases to the extent practical. Additionally, significant reductions in budget allocations for facilities and public infrastructure maintenance were imposed, new revenue sources were identified, and personnel costs were reduced through employee granted wage concessions. Further, one-time revenue mechanisms, such as transferring funds from the City's reserves to operating accounts, were implemented. This is just a summary of the actions taken by the Mayor and Common Council to address a net General Fund shortfall of more than $59 million during the summer of 2008 through the current mid-year budget hearing. The budget reduction actions have had significant impacts on the City's ability to deliver services to its residential and business communities, as well as on the employees who continue to provide those services. Despite this series of actions, the Finance Director projects a deficit of over $24 million for the next fiscal year with an estimated five-year cumulative deficit of$188 million. (See Exhibit 1, the financial projections from the Budget Workshop of March 11, 2010) In large part, this deficit is due to an anticipated continued decline in sales tax, utility user tax and property tax revenues, as well as increases in costs related to personnel compensation, retirement and other benefits. The combination of declining revenues and growing personnel and other costs has created a structural deficit; the City will continue to experience budget problems until its fiscal structure is corrected. Addressing this structural deficit will require a strategic, long-term approach that involves mechanisms designed to impact both major elements of the budget: increasing the revenues and decreasing the expenditures. To that end, the six key aspects of the strategy are: creating efficiencies; enhancing revenues; implementing entrepreneurial enterprises and consolidations, partnerships, or joint powers relationships with other governmental entities; conducting negotiations with labor groups; identifying program reductions; and performing economic development efforts. The long-term outlook for the City's financial future can be a positive one, if the City addresses its fiscal challenges in a strategic manner. There are significant development opportunities, along with major transportation and transit improvements, on the horizon. Also, important progress has been made toward reducing the City's crime rate. Further, the federal stimulus plans continue to provide new investments in infrastructure. However, difficult decisions need to be made in the near future in order to position the City to recover financially in the coming years and to take advantage of these positive long-term opportunities. Overview of Budret Balancing Strategy Options At the direction of the City Manager, a team of representatives from a variety of departments was established to work with the Finance staff, other department heads, mid-managers and their staffs to develop a series of budget options. Employees throughout the organization were encouraged to submit ideas for review and consideration by the committee. The following is an overview of these budget balancing options. Each of the major aspects of the strategy has an attachment that provides details of its elements. Creating Efficiencies Strategies The attached matrix (Exhibit 2) details a number of efficiency measures that were identified in the organizational overview conducted by Management Partners in their 2007 report. These include a number of recommendations to consolidate internal City functions such as financial services, debt collection, human resources•services and fleet operations. The anticipated `ter outcome of these recommendations from Management Partners was two-fold: to become an efficient, well-aligned organization and to create cost savings through those efficiencies. As stated in that report, "The City of San Bernardino is at optimum size and complexity to take advantage of economies of scale in its overhead and management operations. Unfortunately, San Bernardino operates much differently from most other California cities, and this organizational structure frustrates potential efficiencies enjoyed by other organizations. The most troublesome and by far largest contributor to this reality is the apparent creation of what are, in effect, several agencies with duplicated overhead. This structure works against the economy of scale advantage, and leads to inconsistency and frustration on many levels. Several City departments and agencies take on some of the functions that would otherwise be provided through central city support services." 2 Enhancing Revenues Strategies Revenue Measures Requiring Voter Approval The passage of Proposition 13 in 1978 and Proposition 218 in 1996 created important distinctions between types of taxes and the voter approval needed to enact such taxes, and imposed additional procedural requirements. The first major change created the distinction between general and special taxes. Since 1978, all local taxes fall into either one of these categories. A general tax refers to any tax imposed for general governmental purposes, while a special tax is imposed for specific purposes, such as benefit assessments or parcel taxes for public safety or parks. There are a wide variety of general and special tax measures that could be levied subject to voter approval. Listed below are some of the larger and more common of these measures for the Mayor and Common Council to consider. The details of these options are provided in Exhibit 3. Property Transfer Tax/Documentary Transfer Tax The property transfer tax/documentary transfer tax is paid when real property is sold. Currently, San Bernardino has a documentary transfer tax rate of.55 cents per $1,000 sales value, which is the minimum dollar amount that cities collect. Only charter cities are allowed to establish a property transfer tax rate and a number of charter cities have imposed rates from $1.10 to $15.00 per $1,000 of assessed valuation. If the City establishes a property transfer tax, the documentary transfer tax will revert to the County. It is estimated that if the City, through voter approval, established a $5 per $1,000 property transfer tax, the increased revenue to the General Fund would generate an estimated $3 million annually. Utility User Tax The Utility User Tax(UUT)rate for San Bernardino is currently 7.75%and is charged on all gas, electric, and telecommunications services. Many cities also charge a UUT on other utilities such as refuse, water and sewer services. One option to consider is lowering the City's rate and expanding the base by applying the tax on refuse, sewer, and water services; this broadening of the applicable base would require voter approval. Increasing Direct Charges to Enterprise Revenues Currently the City's charter allows 10% of water revenues to be transferred to the General Fund. With voter approval, a percentage of the revenues of both the refuse and sewer enterprises could be transferred to the General Fund. A study would have to be conducted to ensure that there is adequate documentation and justification to allow this type of transfer under the provisions of Proposition 218. As this option is being reviewed, increasing the transfer amount to a maximum 3 of 15% should also be considered. The analysis of this strategy option should also identify its impact on the current utility rates. Transient Lodging Tax, Warehouse Tax, Quarry Extraction Tax The Transient Lodging Tax (TLT), Warehouse Tax and Quarry Extraction Tax are business- related taxes that are applied to the persons or entities for a specific activity or land use that impacts city services. Of these three taxes, the City currently collects only one, the TLT. Although the City's current TLT rate is 10%, which is the average for San Bernardino County, there are some cities that have slightly higher TLT rates such as Riverside (11%), Ontario (11.75%), and Barstow(12.5%). On November 6, 2007 the voters of Redlands, approved a Warehouse License Tax by a margin of 71 to 29 percent. Through this vote, the citizens imposed a business license tax on distribution centers of$0.035 per square foot with an annual adjustment based on the Consumer Price Index (CPI). An exception was established for warehouses or distribution centers with a wholesale business within the City. A similar rate in the City of San Bernardino would generate approximately$300,000 per year. Both the Lytle Creek Mine, which is operated by Robertson's Ready Mix Inc, and the Cajon Creek Mine, which is operated by Vulcan Industrial and Mining Corporation, are located within the City limits. The cities of Upland and Highland both have quarry taxes with an annual CPI `., adjustment. The City of Upland has a current rate of$0.1225 per ton. Highland has a current rate of$0.1719 per ton. The City of Irwindale has fixed quarry tax rates for general and special excavation and processing of materials. A quarry tax in San Bernardino may generate $200,000 annually. Downtown and/or Airport Parking Tax Several years ago, the City allowed the downtown-parking district to elapse. A parking district may take several forms, from installing meters on all public parking spaces to imposing a tax on the occupancy of off-street parking spaces. In the latter case, when the operator of a parking lot collects the fee from the parking patron for the space rental, the City's parking tax rate is incorporated into the amount collected. In addition to establishing a downtown parking district, the City has an option to initiate a parking district around the airport. Exploring this option would involve working with the Airport Authority to add a tax onto the proposed airport parking rate. If the initial tax rate is very low, for example $1 per day, the impact on airport operations should be minimal. A study by staff indicated that all major airports have some type of parking tax imposed on the airport parking fee. 4 911 Tax With voter approval a small charge could be added to cellular and landline phones to generate revenue that would be appropriated to support the 911 operations in the City. If this tax were to be pursued, one recommendation would be to simultaneously reduce or modify the current paramedic user fee. Parcel Tax for Library,Parks, or Other Services A parcel tax is a non-ad valorem tax. In other words, it is levied as a flat fee on each parcel and is not based on the assessed value of the property. A parcel tax is a special tax that is usually designated for a specific purpose, such as libraries, parks, or public safety. In prior years the City has provided the voters with several opportunities to vote on the implementation of a parcel tax. The most recent example was in 2005 when the voters considered a parcel tax for libraries a majority, 55 percent, were in favor of this measure; however, it did not meet the 2/3 approval rate necessary to pass a special tax. Benefit Assessment Districts Benefit Assessment Districts are special tax districts formed by a vote of the property owners to assess properties for the improvements or services that specifically benefit the properties within �. the district. The City of San Bernardino used to have a citywide assessment district that generated revenue to cover the costs for street lighting, traffic signals, and street sweeping. In fiscal year 1997-98, the term of the district expired. The elimination of this district created a burden of several millions of dollars of costs on the General Fund. As the district generated $4.2 in the 1996-97 fiscal year, if its life had been extended and an annual CPI adjustment had been applied, the revenue from the district would have been approximately $6.0 million in the current fiscal year. Consideration needs to be given to re-establishing a citywide district that could generate additional revenues for current maintenance as well as the expansion of services such as street lighting, traffic signal maintenance, graffiti removal, parks maintenance, street maintenance, and tree trimming. Unlike other options that require voter approval, this type of district requires property owner approval. A ballot mailed to each property owner would be required with approval for the district requiring a simple majority of those returning the ballots. The ballots are weighted in direct proportion to the assessment amount. Revenue Measures Not Requiring Voter Approval Fee Increases The City currently has an approved Master Fee schedule. Staff is in the process of reviewing all fees for possible updates. Some options under consideration are increased Business Fire Inspection Fee and various technology fees for Departments. 5 Other Miscellaneous Ideas In this section of the matrix are a number of miscellaneous ideas that have been raised by the departments; these include generating a one time revenue of $2.4 million by selling the convention center to the Economic Development Agency, instituting a business inspection program, and researching developing new fee-based programs or permits. A number of these suggestions would require additional research and analysis to determine the costs and benefits of the programs. Joint Powers Authorities/Consolidations/Enterprise Strategies The matrix on Joint Powers Authority, Consolidations and Enterprise options identifies areas of opportunities for partnerships with other public agencies or the private sector. (See Exhibit 4) The exploration of the strategy to develop a regional animal shelter is one that is currently underway. If the Mayor and Common Council provide direction to pursue one or more of the remaining strategies contained in this matrix, additional research and analysis of the costs and benefits of these options will need to be conducted. Labor/MOU Negotiations Strategies In conformance with the Brown Act, options for potential bargaining unit concessions will be explored in closed session. All employees are currently participating in concessions equivalent to a 10%salary reduction. ( See Exhibit 5) These concessions expire on June 30, 2010. Program Reductions Strategies As the City of San Bernardino, and all municipalities, is a service organization, and its personnel provide those services, effectuating significant additional reductions in expenditures would require eliminating programs and positions. For example, a ten percent reduction in General Fund personnel costs would produce a savings of$10.7 million. Using an average annual salary and benefit rate of$83,200, this would equate to a staff reduction of approximately 129 full-time positions. Economic Development Strategies The final strategic area of additional business attraction and retention opportunities and efforts will be discussed as a component of the economic development strategy through the Economic Development Agency. 6 RECOMMENDATION AND NEXT STEPS This report is provided for information and discussion purposes. Exhibit 6 provides a summary of the revenues or savings that would be generated if all of the budget balancing strategies were adopted and implemented. It is recommended that the Mayor and Common Council review the budget balancing strategy options, identify any questions of the City Manager and staff, hear input from the public, and provide general direction to staff on the options that will require additional information or merit further consideration. Staff will present the selected options for further discussion and possible approval at the next budget meeting, which will be scheduled for May, 2010. It is important to note that the schedule for placing revenue measures on the 2010 November ballot requires the Mayor and Common Council to adopt a resolution calling for a special election and submit it to the County by August 6a'. I look forward to a productive discussion at the workshop and over the coming weeks to position the City for a secure financial future. 7 Exhibit 1 City of San Bernardino C General Fund Financial Projections Fiscal Years 2010 to 2015 General Overview: Effective businesses must continually analyze operations and develop financial plans that address the short term, mid-range, and long-tern time frames. This type of analysis is critical for an organization to maintain its financial strength and stability. A financial analysis that reinforces a long-range focus allows an organization to systematically identify, plan and achieve goals within its available financial resources. A long range financial focus becomes even more critical in the face of the devastating economic decline that our country has faced since the fall of 2008. Our city has had to respond to changing financial conditions in a manner and speed that is unprecedented. The stock market incurred record losses, housing values experienced steep declines, the foreclosure rate skyrocketed and unemployment rates dramatically escalated. The State of California continues to wrestle with multi-billion dollar deficits and the national, state and regional economy is still volatile and unstable. In response to this economic tailspin, the City has depleted most of its financial reserves and has been forced to balance its budget on a year to year basis using one time resources, employee 10% concessions, and loans. In order to gain financial stability, a long range financial projection is being presented for the City's General Fund. The P ro j ections cover six fiscal years be gmning•with the current Fiscal Year 2009-2010 and goes out to Fiscal Year 2014-2015. Detailed below are the main financial assumptions and analysis that were used to prepare a best, most likely and worse case scenario for the City's General Fund. Fiscal Year 2009-2010: On August 17, 2009 the City adopted its final budget for FY 2009-2010 that included 10%employee concessions,a loan from EDA, and one time property sales to help balance the budget. As the economic conditions continued to decline,the City had an additional$4.9 million budget short fall to address at the first quarter budget review. In the Mid-Year report an additional budget short fall had to be addressed in the amount of approximately$3.4 million. In order to address these continued economy driven budget short falls, the FY 2009-2010 budget includes approximately $13 million of one time,non-recurring items. Listed below is a summary those major non-recurring budget balancing measures; none of these measures have been included in the 5 year financial projections starting with FY 2010- 2011. 1. $2 million of revenue from sale from property to EDA and the County. 2. $2.6 million of one time revenue identified through various audits and analysis of City funds C 3. $2.9 million from one time loans from EDA and City Regional Development Impact Fee Fund 4. $.5million of available fund balance from various Internal Service Funds 5. $5 million from employee MOU concessions that end 6/30/10 i Page 1 of 7 Exhibit 1 Revenue Assumptions: After deducting the various one-time revenue items from the FY 2009-2010 budget, the 5 year projection model employs a range of assumptions as to how revenues will perform. These assumptions were placed into three categories of projections which included best case, most likely and worst case. The following provides the percent change in revenues that was assumed in each of the scenarios. Best Case Most Likely Worst Case FYI 0-11 -.5% -1% -2.5% FYI 1-12 .5% -1% -1.5% FY12-13 1% 1% 1% FY13-14 2% 1.5% 1% FY14-15 3% 2% 1.5% Expenditure Assumptions: © Unlike revenues that had different assumptions for each of the three financial scenarios, the expenditure assumptions are the same for each scenario. The expenditure assumptions used in all the financial projections assume that everything authorized in the FY 2009-2010 adopted budget will continue into the future. For example,the same number of authorized positions, using the current pay scale, was assumed. Also assumed in the financial projections were the same operating Departments doing the same amount and type of work. Items that have not yet been included in the 5 year financial projection at this point is a plan to replenish the General Fund Reserve, funds for the replacement of old and out dated equipment/facility items, costs to implement the IT Strategic Plan, and set aside funds to cover such expenses as pay off costs of vacation, sick, and holiday time when employees terminate. It is assumed these costs will continue to be funded from savings generated by keeping positions vacant. Once the economy and City budget begin to stabilize, these items need to be added into the financial projections. In order to be as accurate as possible on future year's projections,the expenditures were broken down into various budget expenditure categories. The following provides a brief explanation of the content and assumptions for each of the categories. Salaries: 1. 10% MOU concessions were not assumed to continue beyond FY 2009-2010. © These concessions saved the City approximately $5 million annually. 2. Charter 186 salary increases for Safety were calculated at about 3% each year with a small additional amount assumed each year for step increases. 3. Sixteen additional Police positions from the COPS Rehiring Grant were added into the projections starting in FY 2009-2010. Grant credits were also included to Exhibit 1 reflect grant funds paying for the additional 16 positions through the first six C months of FY 2012-2013. It has been assumed that all 16 positions will be retained by the City after the grant credits end, as a result in FY 2012-2013 there is an additional $1 million for these positions and $2.2 million in FY 2013-2014 and beyond. 4. For FY 2010-2011 and all future years it has been assumed that SB621 Indian Gaming Grant Funds will not be received. This assumption increased Police Safety salaries for the General Fund by $961,200. 5. For all other non-safety positions, a small increase has been included each year for step increases. No additional salary increases resulting from MOU negotiations were assumed. 6. Special Pays are all assumed to stay constant with no major changes. The major items included in this category are auto allowances.uniform allowances for Safety, and education incentive pay for Safety. 7. Part-Time salaries were assumed to have a slight increase each year due to step increases and possible minimum wage adjustments. 8. Overtime costs were assumed to increase each year due to Safety Charter 186 pay increases. Approximately$6.7 million of the$6.9 million overtime budget is spent in the Police and Fire Departments and all but a very small part is paid to the Safety employees in those Departments. Retirement: 1. Since the City has two separate PERS plans, one for Safety employees and one for all other employees (Miscellaneous employees), the costs have been broken down into these two categories. . 2. PERS provided the City with their best estimate as to what the PERS rates would be in future years for both plans. 3. After FY 2010-2011 the PERS rates for both plans start to increase by large amounts until FY 2014-2015. The Safety rate increases about 4%per year and the Miscellaneous rate increases about 3% per year. These large rate increases are needed to off set the major investment losses that PERS had during the economic downturn. 4. Included in the Safety retirement numbers is the $3 million payment for the Safety Pension Obligation Bonds that the City sold in order to fund some of the Safety PERS unfunded liability costs. Other Personnel Costs: 1. City Paid Health Costs include health costs the City currently pays for all employees and retirees. 2. The City currently budgets about $450,000 per year for retiree health costs. For most employees the City follows the PERS policy and currently contributes the minimum amount of about$105/month to retiree health costs. Each year this amount increases by a CPI-Medical Component and for FY 2010-2011 it will increase to $108/month according to PERS. 3. City Health cost for current employees are assumed to increase each year for those bargaining units that have their city contribution tied to the Kaiser rate. For those groups that have a flat monthly contribution from the City, no increase has been assumed. 4. Currently, Safety employees can also receive a higher City contribution to their retiree health costs if they have received enough service years with the City as — _ n _11 Exhibit 1 negotiated in the current Memorandum of Understanding. These added costs would also be covered by the annual projected increases in this category. 5. Other taxes the City is required to pay are the Unemployment Tax and Medicare Tax. The City only pays its share of these costs and the employee is responsible for his or her share. Other Operational Costs: For Maintenance & Operations costs, Contractual, Internal Service Charges, and Capital Outlay a 2% increase has been factored into each year. This increase is to cover any price increases or replacement costs for current items. Debt Service Charges are assumed to stay about the same. The Safety Pension Obligation Bond costs are not included here as they are included with the Safety Retirement costs discussed above. The remaining major debt charges currently budgeted and paid by the City are: 1. City Hall Building$1 million per year. 2. Fire Equipment Leases and Fire Station Lease about $900,000 per year 3. HUB project debt payment$150,000 per year Budgeted Expenditure Savings: The estimated budgeted expenditure savings each year after FY 2009-2010 is$1 million. FY 2009-2010 is anticipated to have a much higher expenditure savings than $1 million due to some positions being kept vacant to help balance the budget and some positions simply being filled slower than originally anticipated; however these savings can not be © assumed for future years. Transfers: Transfers Out is estimated to stay about the same with about a 2% increase. It is also assumed that the General Fund will resume appropriating approximately $300,000 per year into Fleet for vehicle replacement. Also assumed is that the Cultural Development Fund will no longer continue to fund $250,000 a year for some of the cultural activities at the Library;the assumption is that the General Fund will pay for all these costs. Summary: Based on all the assumptions discussed above,for FY 2010-2011 the City is projected to have revenues short of expenditures by about $23.7 million under the best scenario, $24.3 million under the most likely scenario and$26.2 million under the worst case scenario. All of these scenarios assume the current budget reserve of just under$1.8 million remains untouched. Without additional revenues over the current projections, the City will have to either reduce its total expenditures by about 15-17% or reduce its labor costs by 20-22%in order to bring the FY 2010-2011 budget into balance. O Page 4 of 7 Exhibit 7 City of San Bernardino General Fund Financial Projection Best Case Updated Projected Projected Projected Projected Projected 2009-2010 2010-2011 2011-2012 2012.2013 2013-2014 2014-2015 Beginning Fund Balance $ 2,667,900 $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 Estimated Revenue: Property Taxes 29,517,000 29,367,000 29,517,000 29,812,100 30,408,300 31,320,500 Sales Taxes 21,499,000 21,389,000 21,499,000 21,714,000 22,148,300 22,812,700 Utility Users Taxes 22,565,900 1 22,453,000 22,565,900 22,792,000 1 23,247,800 23,945,200 Measure Z District Tax 5,250,000 5,225,000 5,250,000 5,302,500 5,408,600 5,570,800 Other Taxes 5,532,000 5,500,000 5,532,000 5,587,300 5,699,000 5,870,000 Total Taxes 84,363,900 83,934,000 84,363,900 85,207,900 86,912,000 89,519,200 Licenses and Permits 8,072,500 8,032,000 8,072,500 8,153,200 8,316,300 8,565,800 Fines and Penalties 3,521,900 3,500,000 3,521,900 3,557,100 3,628,200 3,737,000 Use of Money 8 Property 2,713,700 730,000 770,600 778,300 793,800 817,700 Intergovernmental 7,088,800 7,050,000 7,088,800 7,160,000 7,303,200 7,522,300 Charges for Services 6,068,300 6,038,000 6,068,300 6,129,0001 6,251,600 6,439,100 Miscellaneous 7,469,400 4,845,100 4,869,300 4,918,0001 5,016,300 5,166,800 Transfers Infl-oan Proceeds 15,534,900 12,000,000 12,114,200 12,235,300 1 12,480,000 12,854,400 Total Other Revenues 50,469,500 42,195,100 42,605,600 42,930,900 43,789,400 46,103,100 Total Estimated Revenues 134,833,400 126,129,100 128,869,600 128,138,800 130,701,400 134,622,300 Expenditures: Salaries: Full Time 67,222,400 75,482,000 77,987,000 81,305,200 84,826,400 84,887,000 Part-Time 1,856,200 1,875,600 1,900,000 1,925,000 1,950,000 1,975,000 Special Pays 1,463,800 1,500,600 1,500,000 1,500,000 1,500,000 1,500,000 Overtime 6,935,500 7,500,000 8,000,000 8,400,000 8,800,000 9,200,000 Subtotal Salaries 77,477,900 86,357,000 89,387,000 93,130,200 97,076,400 97,662,000 Retirement: Safety Retirement 14,278,000 15,000,000 16,775,000 19,600,000 22,700,000 23,700,000 Miscellaneous Retirement 5,139,800 5,500,000 6,000,000 6,700,000 7,500,000 7,600,000 Subtotal Retirement Costs 19,417,900 20,600,000 22,775,000 26,300,000 30,200,000 31,300,000 Other Personnel Costs: City Paid Health Costs 8,912,000 9,200,000 -9,400.000 9,800,000 10,200,000 10,600,000 Misc.Other Taxes 1,257,900 1,281,800 1,324,800 1,364,400 1,404,1100 1,443,500 Subtotal Other Personnel 10,169,900 10,481,800 10,724,800 11,164,400 11,604,000 12,043,500 Maintenance 8 Operation 5,457,100 5,566.200 5,677,500 5,791,000 5,906,800 6,025,000 Contractual Services k2,259,600 039,600 7,160,400 7,324,000 7,470,500 7,620,000 7,772,400 Internal Service Charges 539,100 13,810,000 14,086,200 14,367,900 14,655,300 14,948,400 Capital Outlay 758,200 773,400 788,900 804,700 820,800 837,200 Debt Service Charges 2,259,600 2,259,600 2.259,600 2,259,600 2,259,600 Loan Repayments 1,308,700 1,629,400 -Est.Expenditure Savings Factor 680,400 1,000,000 (1,000,000 (1,000,000 (1,000,000) (1,000,000 Transfers Out 182,100 2,600,000 2,652,000 2,705,000 2,759,100 2,814,300 Total Estimate Expenditures ,620,900 $ 149,837,100 $ 156,304,400 $ 162,993,300 $ 171,902,000 $ 174,562,400 Revenue Over(Under)Expenses (787,600) (23,708,000) (29,434,900) (34,854,500) (41,200,600) (39,940,100) Reserve Fund Balance $ 1,770,400 $ (21,937,600) $ 27,664,600) $ (33,084,100) $ (39,430,200) $ (38,169,700) FB as a%of Expenditures 1 31% 1464% -17.70% -2030% 22.94% -21.67 Debt Sery as%of Expenditures 1167%1 1.51% 1.45% 1,39% 1.31% 1.29 City of San Bernardino Exhibit 1 General Fund Financial Projection Most Likely Case Updated Projected Projected Projected Projected Projected 2009-2010 2010-2011 2011-2012 2012.2013 2013.2014 2014-2015 Beginning Fund Balance $ 2,557,900 $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 Estimated Revenue: Property Taxes 29,517,000 29,221,800 28,930,000 29,219,300 29,658,600 30,251,800 Sales Taxes 21,499,000 21,284,000 21,071,100 21,281,200 21,600,400 22,032,400 Utility Users Taxes 22,565,900 22,340,200 22,116,800 22,338,000 1 22,673,000 23,126,500 Measure Z District Tax 5,250,000 5,197,500 5,145,500 5,197,0001 5,274,900 5,380,400 Other Taxes 5,532,000 5,476,700 5,421,900 6,476,100 5,558,200 5,669,400 Total Taxes 84,363,900 83,620,200 82,685,300 83,511,600 84,765,100 86,460,500 Licenses and Permits 8,072,500 7,991,800 7,911,900 7,991,000 8,110,900 8,273,100 Fines and Penalties 3,521,900 3,486,700 3,451,800 3,486,100 3,538,900 3,610,000 Use of Money&Property 2,713,700 725,000 717,600 725,000 735,900 750,600 Intergovernmental 7,088,8001 7,018,000 6,947,800 7,017,300 7,122,600 7,265,100 Charges for Services 6,068,300 6,007,600 5,947,500 6,007,000 6,097,100 6,219,000 Miscellaneous 7,469,400 4,820,700 4,772,500 4,820,200 4,892,500 4,990,400 Transfers InfLoan Proceeds 15,534,900 11,933,500 11,814,500 11,932,608 12,111,600 12,353,80D Total Other Revenues 50,469,500 41,983,300 41,663,800 41,979,200 42,609,600 43,462,000 Total Estimated Revenues 134,833,400 126,603,500 124,249,100 125,490,&00 127,374,600 129,922,500 Expenditures: Salaries: Full Time 67,222,400 75,482,000 77,987,000 81,305,200 84,826,400 84,887,000 Part-Time 1,856,200 1,875,000 1,900,000 1,925,000 1,950,000 1,975,000 Special Pays 1,463,800 1,500,600 1,500,000 1,500,000 1,500,000 1,500,000 Overtime 6,935,500 7,500,000 8,000,000 8,400,000 8,800,000 9,200,000 Subtotal Salaries 77,477,900 86,367,000 89,387,000 93,130,200 97,076,400 97,662,000 Retirement: Safety Retirement 14,278,000 1 15,000,000 16,775,000 19,600,OD0 1 22,700,000 23,700,000 Miscellaneous Retirement 5,139,800 5,500,000 6,000,000 6,700,000 7,500,000 7,600,000 Subtotal Retirement Costs 19,417,800 20,500,000 22,775,000 26,300,000 30,200,000 31,300,000 Other Personnel Costs: City Paid Health Costs 8,912,000 9,200,000 9,400,000 9,800,000 10,200,000 10,600,000 Misc.Other Taxes 1,257,900 1,281,800 1,324,800 1,364,400 1,404,000 1,443,500 Subtotal Other Personnel 10,169,900 10,481,800 10,724,800 11,164,400 11,604,000 12,043,500 Maintenance&Operation 5,457,1001 5,566,200 5,677,500 5,791,000 1 5.906,890 6,025,000 Contractual Services P1366820,9001$ 7,180,400 7,324,000 7,470,500 7,620,000 7,772,400 Internal Service Charges 13,810,000 14,086,200 14,367,900 14,655,300 14,948,40D Capital Outlay 773,400 788,900 804,700 820,800 837,200 Debt Service Charges 2,259,600 2,259,600 2,259,600 2,259,600 2,259,600 Loan Repayments - 1,308,700 1,629,400 - - Est. Expenditure Savings Factor 0 1,000,000) (1,000,000 1,000,000) (1,000,000 (1,000,000) Transfers Out 0 2,600,000 2,652,000 2,705,000 2,759,100 2,814,300 Total Estimate Expenditures 0 $ 149,837,100 $ 156,304,400 $ 162,993,300 $ 171,902,000 $ 174,562,400 Revenue Over(Under)Expenses (787,500) (24,333,600) (32,066,300) (37,602,600) (44,627,400) (44,639,900) Reserve Fund Balance $ 1,770,400 1 $ (22,563,200) $ (30,284,900)1$ (35,732,100) $ (42,757,000) $ (42,869,500) F13 as a%of Expenditures 1.31% -15.06% -19.38% -21.92% -24.87% -2456% Debt Sery as%of Expenditures 1.67%1 t51% 1.45% 1.39% 1.34%1 1.29% li D-.... R .S7 Exhibit 1 City of San Bernardino General Fund Financial Projection Worst Case Updated Projected Projected Projected Projected Projected 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014.2015 Beginning Fund Balance $ 2,557,990 $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 Estimated Revenue: Property Taxes 29,517,000 28,779,100 28,347,400 28,630,900 28,917,200 29,350,900 Sales Taxes 21,499,000 20,961,500 20,647,100 20,853,600 21,062,100 21,378,000 Utility Users Taxes 22,565,900 1 22,001,800 21,671,800 21,888,500 22,107,400 22,439,000 Measure 2 District Tax 5,250,000 5,118,800 5,042,000 5,092,4001 5,143,300 5,220,500 Other Taxes 5,532,000 5,393,700 5,312,800 5,365,900 5,419,600 5,500,900 Total Taxes 64,363,900 82,254,900 81,021,100 81,831,300 82,649,600 83,889,300 Licenses and Permits 8,072,500 7,870,700 7;752,600 7,830,100 7,908,400 8,027,100 Fines and Penalties 3,521,900 3,433,900 3,382,400 3,416,200 3,450,400 3,502,100 Use of Money&Property 2,713,700 695,900 685,500 692,400 699,300 709,800 Intergovernmental 7,088,800 6,911,600 6,807,900 6,876,000 6,944,700 7,048,900 Charges for Services 6,068,300 5,916,600 5,827,900 5,886,200 5,945,000 6,034,200 Miscellaneous 7,469,400 4,747,700 4,676,500 4,723,300 4,770,500 4,842,000 Transfers In/Loan Proceeds 15,534,900 11,794,400 11,617,500 11,733,700 11,851,000 12,028,800 Total Other Revenues 50,469,600 41,370,800 40,750,300 41,167,900 41,569,300 42,192,900 Total Estimated Revenues 134,833,400 123,626,700 121,771,400 122,989,200 124,218,900 126,082,200 Expenditures: Salaries: Full Time 67,222,400 75,482,000 77,987,000 81,305,200 84,826,400 84,887,000 Part-Time 1,856,200 1,875,000 1,900,000 1,925,000 1,950,000 1,975,000 Special Pays 1,463,800 11500,000 1,500,000 1,500,000 1,500,000 1,500,000 Overtime 6,935,500 7,500,000 8,000,000 8,400,000 8,800,000 9,200,000 Subtotal Salaries 77,477,900 86,357,000 89,387,000 93,130,200 97,076,400 97,662,000 Retirement: Safety Retirement 14,278,000 15,000,000 16,775,000 19,600,000 22,700,000 23,700,000 Miscellaneous Retirement 5,139,800 51500,000 6,000,000 6,700,000 7,500,000 7,600,000 Subtotal Retirement Costs 19,417,800 20,600,000 22,775,000 26,300,000 30,200,000 31,300,000 j Other Personnel Costs: III City Paid Health Costs 8,912,000 9,200,000 9,400,000 9,800,000 10,200,000 10,600,000 Misc.Other Taxes 1,257,900 1,281,800 1,324,800 1,364,400 1,404,000 1,443,500 Subtotal Other Personnel 10,169,900 1 10,481,800 10,724,800 11,164,400 11,604,000 12,043,500 Maintenance&Operation 5,457,100 5,566,200 5,677,500 5,791,000 5,906,800 6,025,000 Contractual Services 7,039,600 7,180,400 7,324,000 7,470,500 7,620,000 7,772,400 Internal Service Charges 13,539,100 13,810,000 14,086,200 14,367,900 14,655,300 14,948,400 Capital Outlay 758,200 773,400 788,900 804,700 820,800 837,200 Debt Service Charges 2,259,600 2,259,600 2,259,600 2.259,600 2,259,600 2,259,600 Loan Repayments 1,308,700 1,629,400 Est.Expenditure Savings Factor (2,680,400) (1,000,000 (1,000,000 (1,000,000) 1,000,000 (1,000,000) Transfers Out 2,182,100 2,600,000 2,652,000 2,705,000 2,759,100 2,814,300 Total Estimate Expenditures $ 135,620,900 $ 149,837,100 $ 156,304,400 $ 162,993,300 $ 171,902,000 $ 174,562,400 tevenue OverjUnder)Expenses (787,500) (26,211,400) (34,533,000) (40,004,100) (47,683,10D) (48,480,200) Reserve Fund Balance $ 1,770,400 $ (24,441,000) $ (32,762,600) $ (38,233,700) $ (45,912,700 $ 46,709,600 FB as a%of Expenditures 1.31% -16.31% -20.96%1 -2346%1. -26.71% -26.76% Debt Sew as%of Expenditures 1.67% 1.51% 1.45% 1.39% 1.31% 1.29 E 2 W_ U ..: q c v 3 � � � Y E � v q '� � u i•v E .5 W I� O W 0 0 o c o °• �F o v W V Y C Y y .V 'J A C Y C Y EE W A. 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