HomeMy WebLinkAboutITEM 12 - MID-YEAR BUDGET REVIEW 21/22 CITY OF TUSTIN
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Mid -Year Budget Review
Fiscal Year 2021/ 2022
Overview
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2021/22 Mid-Year Budget Update
General Fund Reserves projected at $27.3 million
(35% of General Fund Operating Expenditures)
Capital Projects and Strategic Plan Initiatives
� Pension Funding Policy
� Tustin CARES Program Update
� Budget Calendar for Fiscal Year 2022/23
General Fund Revenues
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General Fund Revenues are projected to be $5.9 million higher than the
adopted budget and is largely related to the following:
Sales & Use Tax Revenue is projected to be $4.5 million higher
compared to what was budgeted and is largely due to strong sales
� generated from autos & transportation, general consumer goods,
� restaurants & hotels, and business & industry.
� Departmental Revenue is projected to be $0.6 million higher largely due
� to an increase in cost recovery related to building permit activity.
� Property Tax Revenue is projected to be $0.3 million higher largely due
to changes in ownership and development at the Tustin Legacy.
Sales & Use Tax Revenue
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Major Industry Groups
$10 $9.3M
I $8 $71 $7.5M
. M
I - --- $6.7M
N
° $6
I $4
$2.71VI $3.11VI $2.91VI
$2 $2.3M
$0 Autos & General Consumer Restaurants & Business &
Transportation Goods Hotels Industry
Budget Projected Budget Projected Budget Projected Budget Projected
General Fund Expenditures
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General Fund expenditures are projected to be approximately
$ 1. 1 million higher than the amended budget primarily due to:
Public Works is projected to be $183,827 higher largely due
to increases in fuel prices, tree watering costs and Veterans
� Sports Park lighting costs, which is partially offset with
� vacancy savings.
� Police Services is projected to be $924,325 higher largely
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� due to an increase in overtime, which is higher due to the
need to maintain operations 24/7 while the department has
been impacted by officers on leave due to impacts
associated with COVID-19 and work-related injuries.
FundReserves
General
A��
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35%
$27.3M
20%
17% Targeted
(15%-20%)
Minimum
(15%)
GFOA National Benchmark City Policy Projected Reserves at
6/30/22
Capital Projects & Strategic Plan Initiatives
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$3.9 million for Main Street Improvements
Center median, travel lane reduction, lighted crosswalks,
widening sidewalks, angled on-street parking, Class II bike lanes
and driveway enhancements/realignment
x New gateway monument sign spanning Main Street, electrical,
landscaping and signage
� $1 million for Strategic Plan Initiatives associated with the Red Hill
� Avenue and the Downtown Commercial Core Specific Plans, and
design efforts for various capital improvements in Old Town, such as:
Potential outdoor music and bollards for special events
Electrical and signage improvements
Parkettes to increase outdoor dining opportunities
Intersection and sidewalk enhancements
Pension Funding Policy
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� 2018 Funding Policy
In 2018, the City Council established a goal to pay off all pension
debt by 2033, which requires additional contributions of $2
� million per year to CaIPERS.
The budget for Fiscal Year 2021-2022 includes an appropriation
� for an additional contribution of $2 million to CaIPERS.
� CaIPERS Investment Risk
� 60 cents on every dollar paid to retirees comes from CaIPERS
� investment returns.
When CaIPERS investment returns fall short of the expected rate
of return, the City is required to make up the difference.
Pension Funding Policy ( continuWMA
ed )
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PARS Pension Trust — In 2018, the City established a Pension Trust
with Public Agency Retirement Services ( PARS) where funds are
managed in a customized investment strategy that provides for
� diversification .
� The Pension Trust also serves as a Rate Stabilization Fund since
� Pension Trust assets can be used to offset unanticipated
� increases in CaIPERS pension costs.
� Proposed Pension Funding Policy — It is recommended that the City
� commit to making annual contributions of $2 million to the PARS
� Pension Trust while also continuing to make additional payments of
$2 million to CaIPERS each year, which would allow the City to
payoff all pension debt in 2030. ilm
Tustin CARES Program Update
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Fiscal Year 2021/22:
� Tustin Small Business Recovery Grant Program ($2.48M)
2021 Non-Profit Recovery Grant Program ($528,250)
� Meal Gap Assistance ($271,198)
� Main Street Digital Training and Grant Program ($8,500)
� Fiscal Year 2022/23: The City plans to provide $2 million in funding to small
businesses in need of financial assistance in overcoming the loss of revenue
due to the pandemic. The City also plans to provide $1 million in funding to
� non-profits to support COVID-19 response efforts and to address the
economic impacts of the loss of revenue due to the pandemic.
Budget for Fiscal Year 2022/23
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Revenue and Expense Projections
Personnel Budget Development
Departmental Budget Preparation 4M
Departmental CIP Preparation 4MM
City Manager Review
Preliminary Budget Preparation MM
Public Input & Engagement
City Council Review
Budget Adoption
Recommendations
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i It is recommended that the City Council approve the
i recommendations outlined in the agenda report.
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