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Home My WebLink AboutPH 2 1982/83 BUDGET 08-02-82DATE: July 28, 1982 PUBLIC HEARINGS Inter-Corn TO: FROM: SUBJECT: HONORABLE MAYOR AND CITY COUNCIL BILL HUSTON, CITY MANAGER PUBLIC HEARING - 1982/83 BUDGET RECOMMENDATION: That the City Council adopt the 1982-83 budget which includes appropriations for all funds of $17,262,429. BACKGROUND: The City Council has held two budget review sessions and received updated revenue projections following adoption of the State budget. DISCUSSION: Attached are a revised statement of fund balances and a memorandum dated July 1, 1982 which summarized the status of the budget based upon the effect of the reduction in State bail-out funds. The revised statement of fund balances is based upon the following changes since the Council's last budget review session: 1. The revised General Fund June 30, 1983 balance of $1,620,277 is $150,015 more than the fund balance indicated in the July 1, 1982 memorandum due to: a) Receiving $49,790 more in property tax revenue in 1981-82 than originally projected. b) Receiving $39,795 more in motor vehicle in-lieu fee revenue in 1981-82 than originally projected. c) Increasing projected 1982-83 property tax revenue by $67,590 based upon the latest information from the County Controller's office. 0 The revised Redevelopment Agency June 30, 1983 fund balance is $94,319 less than the july 1, 1982 estimate due to appropriating an additional: a) $14,100 for the Irvine Blvd. project. b) $2,000 for the Museum sign. c) $78,219 for the E1 Camino Real project. e The revised Gas Tax June 30, 1983 fund balance is $50,000 more than the July 1, 1982 estimate due to reducing the appropriation for the Irvine Blvd; project (due to the bid being less than the budgeted amount and allocating additional Redevelopment Agency funds for the project). The revised Water System June 30, 1983 balance is based upon the water consumption rate increase authorized by the City Council and revised energy costs. The attached memorandum includes a recommendation that an additional $318,000 be appropriated for three capital improvement projects which were not included in the preliminary budget. Staff's recommendation continues to be that the projects be authorized and that the monies be appropriated from the $572,000 Columbus-Tustin Park reserve. The Col ujm~us-Tustin Park reserve is included within the projected $1,620,277 Gene~Fund balance. If the City Council authorizes the additional capital improvement projects (and appropriates Columbus-Tustin Park reserve funds), the June 30, 1983 General Fund balance would consist of: Unrestricted Columbus-Tustin Reserve $1,048,277 254,000 $1,302,277 As pointed out in the attached memorandum, the Council would allocate the $318,000 from the $572,000 reserve and make a decision about whether it should be repaid when it considers the Redevelopment Agency financial plan. The $1,302,277 General Fund balance does not include the original $1,125,000 loan made to the Redevelopment Agency. The possibility of repaying the loan to the General Fund will be addressed in the Agency's financial plan. The recommended appropriations for all funds of $17,262,429 is based upon the amount included in the preliminary budget as modified by the following: a) Including authorized salary adjustments. b) Reducing proposed expenditures in energy accounts based upon the latest information from the Edison Company. c) Additional appropriations for the E1 Camino Real project. d) Reducing the appropriation for the Irvine Blvd. project. e) Appropriating an additional $318,000 for the Red Hill Storm drain ($237,000), Red Hill-Walnut signal ($29,000) and Newport-Sycamore signal ($52,000). The recommended appropriations amount does not include any additional revenue sharing expenses which the Council might authorize following its public hearing regarding requests for revenue sharing funds. DATE: F~OI, q: SUSJ ECT: July 1, 1982 Inter -Com. Honorable Mayoe and City Council Bill Huston, City Manager 1982-83 Budget Updated figures were presented on charts at the June 28 budget workshop. This memorandum includes the same information. As pointed out at the workshop, now that the state budget has been adopted, the Council can complete its review of the budget with reliable revenue estimates. The State Legislative Analyst's office has projected the City's 1982-83 bail-out loss to be $369,141 based upon the adopted state budget. This compares to the assumed loss $377,000 in the City's draft budget. Since the loss is less than expected and when combined with the City's re-certified population of 38,223, state subvention revenue will be approximately $25,000 more than estimated in the draft budget. Although state bail-out is a property tax revenue, the actual loss of the $369,141 will be reflected in a corresponding reduction in the motor vehicle in-lieu subvention. 1982-83 G£N£RAL FUND BALANCE Based upon the footnotes below, the revised general fund balance is: Beginning Balance 7/1/82 Revenue (1) Expenditures (2) Ending Balance 6-30-82 (3) $1,609,821 8,520,377 (8,661,936) $1,468,262 Revenue is based upon loss of $369,141 in state bail-out (draft budget was prepared assuming a loss of $377,000). The net motor vehicle in-lieu subvention has been increased to reflect the revised per-capita amount and the City's certified population of 38,223. Sales tax has been revised to include a 10% increase. 2. Expenditures include approved salary' increases and a reduction in projected energy cost of $37,751. 3. Includes Columbus-Tustin reserve of $572,000. 1982-83 Budget Page 2 The projected June 30, 1983 General Fund balance of $1,468,262 consists of the Columbus-Tustin reserve of $572,000 and an unrestricted balance of $896,262. Assuming tax allocation bonds are issued by the Redevelopment Agency in 1982-83 and the bond issue provides for repayment of the General Fund loan, the General Fund balance would consist of: Unrestricted Col umbus-Tustin Reserve RDA loan repayment $ 896,262 572,000 1,125,000 $ 2,593,262 The projected unrestricted fund balance of $896,262 is 10.3% of proposed General Fund expenditures. GENERAL COMMENTS Per City Council policy direction (maximize efficiency and productivity) four positions have been eliminated from the proposed 1982-83 budget. The number of City employees per 1,000 population is at the lowest level since 1978-79. (see attachment). The proposed General Fund budget, less the increase in the fire contract, is 7.1% more than the 1981-82 authorized budget. The self-insured funds (health, workers compensation and general liability) are adequately funded from an actuarial standpoint. Capital Improvements Additional capital improvement projects can be scheduled for 1982-83 through the issuance of tax allocation bonds by the Redevelopment Agency. The report regarding the feasibility of issuing bonds is currently being prepared. With the adoption of the state budget and based upon the revised revenue estimate and General Fund balance, the following additional capital improve- ment projects are recoa~ended for 1982-83: Redhill storm drain Redhill-Walnut signal Newport-Sycamore signal $ 237,000 29,000 52,000 $ 318,000 Source of funding for the above additional projects could be one of the following: General Fund Jnrestricted reserve $ 896,262 · Columbus-Tustin reserve 572,000 RDA loan repayment 1,125,000 1982-83 Budget Page 3 It is recormaended that $318,000 of the Col umbus-Tustin reserve be allocated for the additional projects. That amount coulo be "borroweo" and future General Fund revenue allocated tx3 "repay" the $318,000. Another alternative would be funding %he Columbus-Tustin Co.unity Center through Redevelopment Agency issued tax allocation bonds, thereby freeing up the $572,000 reserve for other capital improvement projects. This would eliminate the nee~ to allocate future General Fund revenue for repayment of the amount borrowed from the Columbus-Tusilm reserve. The Council could allocate the $318,000 from the $572,000 reserve and make a decision about whether or not it should be repaid when it considers the Redevelopment Agency financial plan. The third option of funding the additional projects through the $1,125,000 Redevelopment Agency loan is dependent upon the agency issuing tax allocation bonds in an amount sufficient to actually repay the loan from the General Fund. The three additional projects would not proceed until the bonos were actually issued and the loaned amount transferred to the General Fund. The first option of utilizing the unrestricted reserve of $896,262 would reduce it to $578,262 which is an extremely marginal reserve considering the uncertain economy. o o o ,~ 0 .,~ 0 4.1