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HomeMy WebLinkAboutCC 05-17-2022 Item No. 41. FY 2022-23 Proposed Budget_Staff PresentationMay 17, 2022 Fiscal Year 2022-23 Proposed Budget CC 05-17-2022 Item No. 41 2 Study Session Objectives Receive comments and questions from Council and Public Gather requests and return with updates for Final Budget Hearing 3 FY 2022-23 Themes The new normal Building on a strong fiscal foundation Balancing multiple priorities Annual Budget Cycle Base Budget Updates (December) New Budget Proposals (March) City Manager Approves Budget Proposals (April) Proposed Budget (May) Final Budget Adoption (June) 4 •City Work Program •Capital Improvement Program •Community Funding •City Website cupertino.org/budget •Interactive Financial Transparency Portal cupertino.org/opengov •Resident Tax Calculator and Budget Forecast Tool cupertino.org/interactive- budget-tools Accessing the Budget 5 Fiscal Year 2022-23 Proposed Budget Overview General Fund Overview General Fund Forecast All Funds Summary Proposed Budget Requests Issues and Challenges Next Steps Agenda 6 Fiscal Year 2022-23 Proposed Budget Overview 8 Financial Overview by Fund* Fund Revenues Expenditures Change in Fund Balance/ Net Position General Fund 93,661,388 92,962,965 698,423 Special Revenue Funds 15,941,654 11,219,109 4,722,545 Debt Service Funds 2,675,800 2,675,800 - Capital Projects Funds 2,500,000 175,000 2,325,000 Enterprise Funds 6,158,792 8,979,731 (2,820,939) Internal Service Funds 7,826,996 9,449,252 (1,622,256) Total All Funds $128,764,630 $125,461,857 $3,302,773 *Excludes Capital Improvement Program, Community Funding, and City Work Program 9 Requests by Fund Fund One-Time Special Projects Ongoing Special Projects Ongoing Other New Staffing Total Proposals General Fund 1,769,528 570,850 211,500 1,795,213 4,347,091 Special Revenue Funds 29,400 3,687,868 15,080 379,530 4,111,878 Enterprise Funds 117,553 -1,590 -119,143 Internal Service Funds 392,600 669,046 --1,061,646 Total All Funds $2,309,081 $4,927,764 $228,170 $2,174,743 $9,639,758 Fiscal Year 2022-23 General Fund Overview Sales Tax 31,944,089 (34.1%) Property Tax 30,039,574 (32.1%) Transient Occupancy 5,000,000 (5.3%) Utility Tax 2,955,404 (3.2%) Franchise Fees 3,230,101 (3.4%) Other Taxes 1,787,691 (1.9%) Licenses & Permits 3,541,012 (3.8%) Use of Money & Property 1,277,013 (1.4%) Intergovernmental 434,491 (0.5%) Charges for Services 11,528,436 (12.3%) Fines & Forfeitures 427,000 (0.5%) Miscellaneous 1,496,577 (1.6%) General Fund Revenues By Category ($ in millions) $93.7M 11 General Fund Revenues Category FY 2021-22 Adopted FY 2022-23 Proposed $ Change % Change Sales Tax 27,855,559 31,944,089 4,088,530 15% Property Tax 27,840,341 30,039,574 2,199,233 8% Transient Occupancy Tax 3,000,000 5,000,000 2,000,000 67% Utility Tax 3,245,447 2,955,404 (290,043)-9% Franchise Fees 3,380,986 3,230,101 (150,885)-4% Other Taxes 1,248,720 1,787,691 538,971 43% Licenses & Permits 3,140,195 3,541,012 400,817 13% Use of Money & Property 1,249,220 1,277,013 27,793 2% Intergovernmental 5,093,946 434,491 (4,659,455)-91% Charges for Services 12,047,922 11,528,436 (519,486)-4% Fines & Forfeitures 225,000 427,000 202,000 90% Miscellaneous/Transfers/ Other Financing Sources 1,320,555 1,496,577 176,022 13% Total Revenues $89,647,891 $93,661,388 $4,013,497 4%12 Employee Compensation 23,901,059 (25.7%) Employee Benefits 11,264,884 (12.1%) Materials 7,217,573 (7.8%) Contract Services 24,949,571 (26.8%) Cost Allocation 10,385,961 (11.2%) Capital Outlays & Special Projects 2,208,378 (2.4%) Contingencies 451,739 (0.5%) Other Uses 695,000 (0.7%) Transfers 11,888,800 (12.8%) General Fund Expenditures by Category($ in millions) $93.0M General Fund Expenditures Category FY 2021-22 Adopted FY 2022-23 Proposed $ Change % Change Employee Compensation 21,806,721 23,901,059 2,094,338 10% Employee Benefits 10,154,044 11,264,884 1,110,840 11% Total Personnel Costs 31,960,765 35,165,943 3,205,178 10% Materials 6,639,523 7,217,573 578,050 9% Contract Services 23,773,121 24,949,571 1,176,450 5% Cost Allocation 11,948,062 10,385,961 (1,562,101)-13% Capital Outlays & Special Projects 3,221,800 2,208,378 (1,013,422)-31% Contingencies 426,779 451,739 24,960 6% Transfers Out 11,251,984 11,888,800 636,816 6% Other Financing Uses 545,000 695,000 150,000 28% Total Expenditures $89,767,034 $92,962,965 $3,195,931 4% 14 Fiscal Year 2022-23 General Fund Forecast Account Assumption Description Sales Tax Conservative (1.8% AAGR) HdL’s forecast until FY24 Conservative forecast after Property Tax Moderate (2.5% AAGR) HdL’s forecast until FY24 Moderate trendline after Transient Occupancy Tax Moderate (7.4% AAGR) Recovery to 75% of historical highs ($7.5M) in FY24 Moderate trendline after Revenue Assumptions 16 Account Assumption Description Salaries 2.75%5 FTE vacancy savings due to attrition Materials 2.5% AAGR Baseline + CPI Contract Services 4.0% AAGR Baseline + CPI Law enforcement contract CPI + 2% Special Projects 2.5% AAGR $2M base + CPI annually Transfers Out Baseline + CPI $2.7M annually to Debt Service until FY30 $3M annually to Transportation $2.5M annually to Capital Reserve $2M annually to Innovation & Technology $1M annually to Enterprise Funds Expenditure Assumptions 17 Forecast Assumptions 18 Forecast A Forecast B*Forecast C Sales Tax Loss due to CDTFA Audit Smaller loss Medium loss Larger loss Transfer to Capital Reserve $3M annually $2.5M annually $1.5M annually *Forecast B is presented in the FY 2022-23 Proposed Budget document 19 $44.2M $71.5M $49.9M $32.2M $36.2M $28.0M General Fund Unassigned Fund Balance* Forecast A Forecast B Forecast C *Will be updated in the Final Budget to include approved Third Quarter adjustments 20 $0.1M $2.6M $7.8M $5.3M $5.8M $5.8M $6.6M $3.8M $3.5M $5.8M $5.9M Forecast A Annual Operating Surplus/(Deficit) Debt fully repaidTOT recovery 21 $0.1M $0.7M $5.8M $3.2M $3.7M $3.6M $4.4M $1.6M $1.2M $3.5M $3.6M Forecast B Annual Operating Surplus/(Deficit) 22 $0.1M -$1.2M $3.7M $1.2M $1.6M $1.4M $2.1M -$0.7M -$1.1M $1.1M $1.1M Forecast C Annual Operating Surplus/(Deficit) Fiscal Year 2022-23 All Funds Summary 24 All Other Funds Financial Overview Fund Revenues Expenditures Change in Fund Balance/ Net Position Special Revenue Funds 15,941,654 11,219,109 4,722,545 Debt Service Funds 2,675,800 2,675,800 - Capital Projects Funds 2,500,000 175,000 2,325,000 Enterprise Funds 6,158,792 8,979,731 (2,820,939) Internal Service Funds 7,826,996 9,449,252 (1,622,256) Total All Other Funds $35,103,242 $32,498,892 $2,604,350 All Other Funds Expenditures 25 Category FY 2021-22 Adopted FY 2022-23 Proposed $ Change % Change Employee Compensation 5,380,086 5,640,309 260,223 5% Employee Benefits 3,567,819 3,833,322 265,503 7% Materials 2,470,445 2,920,174 449,729 18% Contract Services 8,530,836 7,930,243 (600,593)-7% Cost Allocation 2,420,869 2,043,548 (377,321)-16% Capital Outlays 15,193,000 1,038,000 (14,155,000)-93% Special Projects 5,547,300 5,028,467 (518,833)-9% Contingencies 244,170 242,632 (1,538)-1% Debt Services 2,676,000 2,675,800 (200)0% Transfers Out 11,803,048 -(11,803,048)-100% Other Financing Uses 1,244,628 1,146,397 (98,231)-8% Total $59,078,201 $32,498,892 $(26,579,309)-45% Fiscal Year 2022-23 Proposed Budget Requests 27 Requests by Department Department One-Time Special Projects Ongoing Special Projects Ongoing Other New Staffing Total Proposals Administration 40,000 180,000 141,500 321,420 682,920 Innovation & Technology 858,528 -40,000 -898,528 Administrative Services 165,000 100,000 -527,992 792,992 Parks and Recreation --16,590 147,868 164,458 Community Development ---847,965 847,965 Public Works 1,245,553 4,647,764 30,080 329,498 6,252,895 Total All Departments $2,309,081 $4,927,764 $228,170 $2,174,743 $9,639,758 •Decrease because Community Funding is not included Council and Commissions Expenditures 28 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $1,334,303 $1,236,915 $(97,388) -7% •To be discussed at future meeting •The Parks and Recreation Commission carried a unanimous motion to recommend to City Council $96,460.46* in funding. Community Funding Requests 29*Will be rounded up because ERP requires budgets to be to the nearest dollar •Requests for Limited-Term Communications Analyst and Administrative Assistant Administration Expenditures 30 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $7,629,629 $8,009,066 $379,437 5% Administration Special Projects Project One-Time/ Ongoing Amount Economic Development Fuse Fellow Ongoing 180,000 Economic Development Strategy Outreach One-Time 20,000 Climate Action Plan Vision Summary Doc One-Time 10,000 Field Lighting Package One-Time 10,000 Total $220,000 31 •Annual increase in costs per the contract with Santa Clara County Sheriff’s Office Law Enforcement Expenditures 32 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $15,756,350 $16,814,519 $1,058,169 7% •Transfer of 1.5 positions from City Manager’s Office •Requests for infrastructure and applications enhancements IT Expenditures 33 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $6,266,270 $7,917,479 $1,651,209 26% IT Special Projects Project One-Time/ Ongoing Amount City Hall Enterprise Server & Storage Tech Refresh One-Time 150,000 ERP (Phase II)One-Time 106,928 Aclima and Envirosuite Pilot Extension One-Time 66,000 City Facilities Camera Capture Expansion One-Time 60,000 Business Process Automation Platform One-Time 42,000 Zendesk for Parks and Recreation One-Time 40,000 Code Enforcement Consolidated Application One-Time 40,000 Other*353,600 Total $858,528 34*Refer to pages 36-37 of the FY 2022-23 Proposed Budget for the full list of special projects •Requests for Purchasing Manager and Budget Manager •Increases in general liability and property insurance premiums Administrative Services Expenditures 35 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $7,771,115 $9,971,464 $2,200,349 28% Administrative Services Special Projects Project One-Time/ Ongoing Amount Federal Grants Program Ongoing 100,000 Fee Study One-Time 75,000 Online Marketing and Branding One-Time 50,000 Hybrid Recruitment Strategy One-Time 40,000 Total $265,000 36 •Reduction in cost allocation expenses due to lower IT costs and fewer financial transactions •Request for Community Outreach Specialist Parks and Recreation Expenditures 37 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $13,917,668 $13,309,940 $(607,728)-4% 38 Festival Costs Waived Fees City Paid Expenses Total Costs Festival Date Festival Producer Recreation Facility/Park/ Road Permits Public Works Sheriff Materials Total Kids 'N Fun Festival August 13, 2022 Taiwanese Cultural and Sports Association $2,376 $5,510 $3,219 $4,852 $15,957 Dilli Haat September 10, 2022 WomenNow $2,376 $3,000 $2,812 $4,003 $12,191 Day N Night Fun Fest September 24, 2022 Cupertino Rotary $2,561 $4,304 $4,111 $5,822 $16,798 Diwali Festival October 8, 2022 Cupertino Chamber of Commerce $2,207 $3,530 $3,176 $4,852 $13,764 Veterans Day November 11, 2022 Veteren's Memorial $675 $1,000 $0 $0 $1,500 $3,175 Ikebana Flower Show February (postponed from Oct 22')WAFU Ikebana Society $2,944 $18,507 $543 $0 $21,994 Egg Hunt April 1,2023 The Home of Christ Church in Cupertino $681 $2,000 $23 $0 $2,704 Holi April 1, 2023 Cupertino Chamber of Commerce $1,354 $1,720 $300 $2,183 $5,557 Cherry Blossom April 29-30, 2023 Toyokawa Sister City $4,537 $16,878 $6,628 $9,461 $37,504 India Heritage Fair March 18, 2023 Cupertino Bhubaneswar Sister City $2,037 $5,010 $3,136 $2,911 $13,094 Relay for Life June 17, 2023 American Cancer Society $309 $2,576 $14 $0 $2,899 Total $22,059 $64,034 $23,962 $34,082 $1,500 $145,637 TOTAL Waived Fees $110,054 TOTAL City Paid $35,582 TOTAL Festival Costs •Requests for Housing Senior Planner, Planning Senior Planner, Office Assistant, Associate Planner, and Code Enforcement Officer •Offset by decrease in one-time special projects Community Development Expenditures 39 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $14,689,938 $12,901,224 $(1,788,714)-12% •Requests for a Management Analyst and a Maintenance Worker Lead Public Works Expenditures 40 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $40,745,321 $40,541,041 $(204,280)-1% Public Works Special Projects Project One-Time/ Ongoing Amount Annual Asphalt Project Ongoing 2,179,800 Annual Sidewalk Curb & Gutter Ongoing 1,453,200 Vehicle and Equipment Replacement Ongoing 669,046 Street Light Pole Replacement Ongoing 213,000 Mound Removals One-Time 141,900 Energy Management System Upgrades One-Time 90,000 Other*1,146,371 Total $5,893,317 *Refer to pages 36-37 of the FY 2022-23 Proposed Budget for the full list of special projects 41 •Decrease because Capital Improvement Program is not included Non-Departmental Expenditures 42 FY 2021-22 Adopted FY 2022-23 Proposed Change % Change $25,382,535 $14,582,103 $(10,800,432)-43% Request Amount Economic Development Fuse Fellow -180,000 Management Analyst (2-Year Limited-Term)183,365 Total $3,365 Items for Final Budget Hearing 43 To be added in Final Budget: •City Work Program •Capital Improvement Program •Community Funding •Updates to fund balance due to approved Third Quarter adjustments Project Costs 1. Blackberry Farms Pools Splash Pad 500,000 2. City Hall Renovation/ Replacement and Library Parking Garage: Design and Construction 4,000,000 3. City Lighting LED improvements 1,300,000 4. De Anza Blvd Buffered Bike Lanes 525,000 5. Jollyman All-Inclusive Play Area: Adult-Assistive Bathroom Facility 850,000 6. Major Recreation Facilities: Use and Market Analysis 350,000 7. Stocklmeir, Bryne and Blesch: Inspection Reports and Analysis 50,000 Total All Recommended Projects $7,575,000 Items for Final Budget Hearing –CIP 44 Issues and Challenges Staffing and Conclusion •CDTFA Sales Tax Audit •COVID-19 •Revenue Volatility •Capital Project Funding •Personnel Costs •Retirement Costs Issues and Challenges 46 FY 2022-23 Staffing Requests 47 Position Purpose FTE Salaries and Benefits Administration Administrative Assistant Address increase workload in the City Clerk's Office 1 138,055 Communications Analyst (3-Year Limited-Term) Council support for projects and ad hoc items, as well as support for consistent engagement across the organization, involvement in individual project communications, and support for a higher ‘touch’ involvement with residents 1 183,365 Management Analyst* (2-Year Limited-Term) Expand Economic Development staff’s bandwidth, thereby allowing for a broader portfolio of Council priority items to be implemented during the next fiscal year. 1 183,365 Total Administration 3 $504,785 *Not included in FY 2022-23 Proposed Budget FY 2022-23 Staffing Requests 48 Position Purpose FTE Salaries and Benefits Administrative Services Budget Manager Dedicated resource to manage the City's budget process and additional research and analysis workload 1 263,996 Purchasing Manager Provide a centralized position for purchasing compliance, administration, and policy development 1 263,996 Total Administrative Services 2 $527,992 FY 2022-23 Staffing Requests 49 Position Purpose FTE Salaries and Benefits Parks and Recreation Community Outreach Specialist Support marketing and outreach such as surveys, mailings, pop-up events, and community meetings for recreation programs, events, City Work Program items, park-related Capital Improvement Projects, and recreation facilities. 1 147,868 Total Parks and Recreation 1 $147,868 FY 2022-23 Staffing Requests 50 Position Purpose FTE Salaries and Benefits Community Development Senior Planner (Housing) Alleviate the increased demand and volume of work, and continue to provide efficient project management and coordination. 1 195,607 Senior Planner (Planning)Help with project management and the increased demand and volume of applications/permits.1 195,607 Associate Planner Help with project management and the increased demand and volume of applications/permits.1 183,923 Code Enforcement Officer Provide better weekend coverage and alleviate the high volume of cases and inquiries. Provide better interdepartmental and interagency coordination and support. 1 158,125 Office Assistant Provide more efficient administrative support and coverage throughout the divisions and functions.1 114,703 Total Community Development 5 $847,965 FY 2022-23 Staffing Requests 51 Position Purpose FTE Salaries and Benefits Public Works Management Analyst Risk and workload -One person with responsibility for all budget, finance and contract actions in Department 1 183,365 Maintenance Worker Lead Workload -Pavement maintenance within program Reporting Structure -one lead for 8+ Maintenance Workers Critical Work -keeping the streets safe a priority Accountability -Lead MW will ensure continued productivity 1 146,133 Total Public Works 2 $329,498 Total All Positions 13 $2,358,108 Next Steps •FY 2021-22 •Third Quarter Report May 19th •FY 2022-23 •CIP Presentation June 7th •Hearing and Adoption June 7th •First Quarter Report Nov 2022 Next Steps 53 Questions?