23. Mid-Year budget adjustmentADMINISTRATIVE SEIRVICES DEPARTMENT
CITY HALL
10300 TORRE AVENUE • CUPER71N0, CA 95014-3255
(408) 777-3220 • EAX (408) 777-3109
SUMMARY
Agenda Item No. ~ Meeting Date: January 19, 2010
SUBJECT AND ISSUE
Review and approve the 2009/10 mid-year budget adjustment.
BACKGROUND AND FISCAL IMPACT
General Fund Revenues
The recession has hit the City more severely in sales taxes, hotel taxes, construction taxes,
interest, entitlement fees, and recreation fees th<<n anticipated when the revenue budget was
forecasted back in May 2009. Anticipated commercial developments such as Main Street,
One Results Way, and the DeAnza Boulev,~rd hotel, have been deferred and hotel
occupancy and room rates have been down ;since November 2008 but have started to
improve this fall. Sales taxes will be down 20~/o instead of the anticipated 17% from last
year. Low interest rates and the need to ket~ a conservative investment strategy has
continued longer than expected, forcing a drop of interest expectations. Senior Center
travel program and Blackberry Farm revenues reflect lower discretionary spending. On the
positive side, assessed value growth and properi:y taxes are better than forecasted offsetting
some of these declines.
General Fund Revenues
ecrease /
Increase
Property Tax 649,000
Sales Tax (400,000)
Transient Occupancy Tax (400,000)
Other Taxes (300,400)
Interest (500,000)
Charges for Services (400 000)
Net General Fund Revenue Decrease 1 351 0 0
General Fund Expenditut-e~s
Staff proposes balancing the current year projected shortfall by postponing the filling of
certain vacancies, using utility user tax reserves, taking capital project savings, and
capturing insurance, electric, and travel program savings. Staff has also added funding for
the Blackberry Farm bridge ADA upgrade, the electric vehicle charging station, the
23-1
Mid-Year Budget Adjustment
January 19, 2010
Page 2 of 3
emergency generator and communications trailer {funded by a new grant), and the new
green building ordinance.
General Fund Expenditures Decrease /
Increase
Liability insurance claims (75,000)
Health insurance premium savings (80,000)
Recreation travel program costs (100,000)
Election cost savings {50,000}
PG&E refund on electricity overcharges (28,000)
Human Resource Director vacancy -1 year (173,000)
City Attorney Executive Assistant vacancy - 4 months (36,000)
Building Inspector vacancy -1 year (138,000)
Building Permit Technician vacancy - 1 year (86,000}
Senior Planner vacancy -1 year (102,000}
Building Official vacancy-1.5 months (22,000}
Grounds Maintenance Worker UII vacancy - 1 year (98,000)
Facilities Maintenance Worker III vacancy - 9 months (74,000)
Gen. Services Public Works Supervisor part time -1 year {31,000)
Street Public Works Supervisor vacancy - 3 months (34,000)
Public Works Director at current 90% time (18,000)
Blackberry Farm bridge ADA upgrade (additional funds
would have to come from reserves} 125,000
Completed capital project savings (238,000)
Electric vehicle charging station installation {possible grant) 10,000
Emergency generator and communications trailer 300,000
Paid by federal grant (300,000)
Green building ordinance development (addition .to existing
$46,000; depends on decision on other agenda item} 19,000
iJIJT reserves (122,000}
Net General Fund expenditure decrease (1.351.0001
No service impacts will result as these budget reductions maintain current staffing levels
and projected expenses. However, the revenue picture leaves no funding for new capital
projects, other than from existing capital reserves which is at 14% of policy levels. Capital
projects will be discussed in the upcoming 2010/11 budget process.
Redevelopment Agency
The 2007 sale of Rose Bowl and Cupertino Square parcels to new owners will bring in
$606,000 more in Agency tax revenues for 2009/14. As required by law, $234,000 of that
increase will have to be given to schools, special districts, and the County, $63,000 will be
taken by the State pending a court challenge, and $152,000 is set-aside for future low and
moderate income housing. That leaves $157,000 for future project area economic
development.
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Mid-Year Budget Adjustment
January 19, 2010
Page 3 of 3
Redevelopment A~encv Revenues
Property taxes
Redevelopment Agency Expenditure:;
Required pass-through to county, schools, and other districts
State takeaway
Housing set-aside
Set-aside for project area economic development
Total RDA expenditure incre~~se
RECOMMENDATION
Review and approve 2009/10 mid-year budget adjustments.
Prepared by:
~~~~._
David Woo
Finance Director
Increase
60~
234,000
63,000
1 s2,oao
157,000
60b.000
Submitted by: Ap oved for submission:
Cl~._ ~
Carol A. Atwood David W. Knapp
Director of Administrative Services City Manager
Attachments:
A. General Fund Budget Report and Charts
23-3
City of Cupertino
General Fund Budget Report
November 30, 2009
Bud et Actual
2008/09 2009/10 11/30/2008 11/30/2009 Anal sis of Trends
Taxes:
Sales Tax 13,390,000 11,649,000 4,649,987 3,405,681 Down 20% by yeaz-end
Prope Tax 11,080,000 11,190,000 1,176,099 1,095,639 State borrowing begins in December
Transient Occu arc 2,660,000 2,394,000 1,038,976 862,289 Down 17%
Utility Tax 3,300,000 3,366,000 1,002,721 1,026,004 On track
Franchise Fees 2,630,000 2,630,000 447,582 445,871 On track
Other Taxes 1,500,000 1,500,000 370,442 388,486 Transfer tax u ;construction tax down
Licenses and Pernwits 2,980,000 3,210,000 1,330,028 1,364,755 On track
Use of Mone &Prope 1,267,000 1,391,000 424,143 276,673 Investment earnings reflective of market
Inter overnmental 493,892 415,000 145,548 181,420 On track
Chaz es for Services 1,468,000 1,834,000 632,191 673,712 Zonin , Tannin and tri revenue down
Fines & Forfeitures 820,000 902,000 217,974 267,131 Parking fines u
Other Revenue 100,000 100,000 68,b33 44,505
Total Revenue 4
erating Ex enditures:
Administrative 1,483,395 1,553,423 512,593 521,837 On track
Law Enforcement 8,480,671 8,536,636 3,448,098 3,517,604 On track
Public & Environ. Affairs 1,512,796 1,504,522 600,612 538,299 On track
Administrative Service 4,254,006 4,277,165 1,509,716 1,629,300 Reflects election costs
Recreation Service 4,397,466 4,386,560 1,472,105 1,627,472 Refects BBF icnic operations
Community Develo went 4,207,724 3,816,219 1,253,248 1,173,528 Plan Check down. Consistent with revenues
Public Works 11,652,062 11 911 291 4,506,952 4,411,105 On track
Total Ex enditures
Transfers In 623,925 0 29,150 0 On track
Transfers Out -7,110,000 -7,573,000 -2 958,300 -3,155,415 On track
Net Gain/ ss - - -
a
rt
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Saie:~ Tax Projections vs. Actual
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-~- ActuaE
10/09
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Transient Occupancy Tax Projected vs. Actual
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-tom Actual
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23-5
Licenses & Permits Projected vs, Actual
,~ 2,000
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-tom Actual
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Charges for Services Projected vs. Actual
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---1F-Actual
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Month
23-6
General Fund I.xpenditures Projected vs. Actual
a 20,000
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~ 5,000
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23-7