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Home My WebLink About24-25 Budget Workshopa-llh Prono-qpt •l9[�Ql2to] 0 1 Remembering what connects us. Agenda General Fund Budget Summary and Options All Funds Summary and CIP Overview 5-Year Forecast Pension Plan Status Update General Fund - Fund Balance Option 1: Status Quo Beginning Fund Balance Option 2: Operating Revenue Land Sale Proceeds Fund Operating/Capital Expenditures repays General Fund $3.6M Budget Options: (emergency generator and Land Sale Proceeds to GF: Emerg. Generator Annex) Land Sale Proceeds to GF: Annex Land Sale Proceeds Fund Transfer to Liability Fund funds transfers to Liability Fund ($2.9M) and Shelter Transfer for Temporary Homeless Shelter ($1 M) Net Operating Changes Total impact to General Add: ARPA Fund Fund: Reserves higher by (Water Loan)/Repayment $7.5M. Housing Authority Repayment Total impact to Land Sale Hangar Fire Navy Reimbursement Proceeds Fund: Reserves General Fund Surplus/(Deficit) Lower by $7.5M. Land Sale Proceeds Subtotal GENERAL FUND OPTION 1 OPTION 2 Proposed Proposed 24-25 24-25 $ 25,120, 581 1 1 $ 25,120, 581 LAND SALE PROCEEDS FUND OPTION 1 OPTION 2 Proposed Proposed 24-25 24-25 Is 84,366,446 F$_84,366,446 89, 856, 844 89, 856, 844 1,000,000 1,000,000 (96,213,473) (96,213,473) (70,564,082) (70,564,082) - 3,000,000 - (3,000,000) - 600,000 - (600,000) (4,900,000) (2,000,000) - (2,900,000) 1, 045, 264 (45,264) - (1,000,000 (12,301,893) (4,801,893) (69,564,082) (77,064,082) 3,215,567 3,215,567 - - 134,075 134,075 - - 466,651 466,651 - - (8,485,600) (985,600) GF Reserves as % of GF operating expenditures 16% 25% (69,564,082)1 1 (77,064,082) General Fund Revenue Summary Option 1 Status Quo Total $ 9 3 M . Net increase $2.75M or 3% Assuming zero impact from Hangar Fire and Navy reimbursement (see later slide for Hangar Fire financial) General Fund Revenues (in millions) Fines & Forfeitures, $0.9, Use of Money & Prop, 1% $3.6, 4% Dept Rev, $3.9, 4% Other Tax Rev, $1.4, 1% TOT, $2.5, 3%- Franchise Fees, $1.9, 2% ARPA Funds, $3.2, 3% Sales Tax, $36.1, 39% ex, $27.0, X General Fund Expenditures by Department Option 1 Status Quo General Fund Expenditures (in millions) Parks and Recreation, Total $10 2 M . $6.0, 6%-, n 1 -4. & A -7K A — - r n/_ Fire Services, $11.0, 11___ City Council Citw Clerk. A1.1. 1% Navy Hanaar Fire Financial Ur)date in z �y 100 90 80 70 60 50 40 30 20 10 Navy Hangar Fire k mancia1 Summary Pending LSign Led City C on tra c ted Navy C e- 0 p Agreement All Funds Summary Projected balance 6/30/25 $109M Unrestricted 15% General Fund (Option 1, reserves $17M) Designated for specific purposes 25% Land Sale Proceeds/GF CIP/Park Program Internal Services/Emergency Fund Restricted for specific purposes 60% FederaVState/County sources Water Enterprise Legacy Backbone, Fees, and Special Assessment Prog Projected Fund Balance All Funds 6/30/2025 (in millions) Special Assessment Prog, $5.1, 5% Fee Programs, $2.6, 2% Fed/State Prog, $1.2, 1% Internal Services, $6.2, 6% CIP (Designated), $20.5, 19% Trust/Fiduciary, $35.0, 32% General Fund (Unrestricted), $16.6, 15% Water Enterprise, $14.3, 13% Emergency Fund $1.0 C1% Capital Improvement Program by Type FY 24-25 total $102M 42 projects water, 1.7, 2 IP Project by Type (in millions) Tustin Legacy, $33.5, 33 Street Maintenance, 11.6, 11 Traffic Control, Public Facilities, 16.4, 16 Parks, $31.8, 31 Capital Improvement Program by Funding Source Restricted funding 27% Legacy backbone ➢ Generator grant ➢ Park grants ➢ Gas Tax/RMRA/M2 1VATAR- i Designated funding 71% ➢ Park program fees ➢ Land sale proceeds CIP Project by Funding Source (in millions) Land Sale Proceeds, 61.8, 61% GF CIR $9.0, 9% Water, $1.7, 2% Unfunded, $2..5, 2 - Gas Tax/RMRA/OCTA 12, 8.0, 8% Park Grants, Park Prog Fees, $1.2, Ca j acc 1 1 0 Personnel Costs 5-year historyand 5-year forecast 5-YearSa[ary & Benefit History (2020-2024) and 5-Year Comparison by MOU % Increases (2025-2029) Purpose: 5-year personnel cost trend and 5-year projection under MOU increases from 0% to 5% annually. 2020 full-time EE headcount 302 2025 full-time EE headcount 330 Assumptions in the model: TPSSA/TPSSMA 3% per year 25-26 and 26-27 (approved MOUs) TMEA annual increase 0% to 5% annually 24-25 to 28-29. All other bargaining units increase 0% to 5% annually N $85.0 0 $80.0 $70.0 $65.0 $60.0 $50.0 $45.0 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 -0%MOU -1% -2% -3% -4% -5% FT Headcounts and Costs 5-year historyand 5-year forecast FTE, Salary & Benefits by FiscaL Year (5-Year History 2020-2924and 5-Year Forecast 1% Mou Increase 2025-2029) Purpose: employee headcounts 1 . 1 rl% 1 5-Year Reserves % Forecast — General Fund FY 24-25 Option 1— GF reserves status MOU increases 0% to 5% annually 45.0% 40.0% 35.0% m 72 30.0% m CL W . 25.0% Q O 20.0% 0 H 15.0% m m N 10.0% a 5.0% 0.0% -5.0% General Fund Reserve -5-Year Historyand 5-Year Forecast by MOU % Increases FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 0%MOLI 1% 2% 3% 4% 5% Minimum Reserve FY 2029 5-Year Reserves % Forecast — General Fund FY 24-25 Option 2 — GF reserves better by $7.5 million. MOU increase 0% to 5% annually 45.0% 40.0% 35.0% L n 30.0% x W UO a 25.0°/0 n O m 20.0% 5.0% 0.0% Genera! Fund Reserve - 5-Year History and 5-Year Forecast by MOU % Increases FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 0%MOU 1% 2% 3% 4% 5% Minimum Reserve Pension Funding % and UAL Payment History Past Six Years CaIPERS UAL History - Funded Ratio, CaIPERS Return Rates, and UAL/ADP/PARS Trust Payments 11-r1,$12.0 80.0% $10.2 $10.0 60.0% $8,0 $ 7.6 H d $ 6.8 =_ o m eo 40.0% $6.0 'aa) c c L 3 LL Ja LL $4.7 c 20.0% c $4.0 a -6.10% -20.0% June 2018 June 2019 June 2020 June 2021 June 2022 June 2023 Classic Funded % 75.5% 76.8% 76.3% 86.5% 75.9% 78.1% Cal PERS Return Rate 8.601/. 6.700/8 4.70% 21.30% -6.10% 6.10% -UAL/ADP/115 Trust (in Millions) $8.3 $6.8 $7.6 $4.7 $9.3 $10,2 Pension UAL Update Required UAL Payments: 24-25 required UAL payment $7M will grow to $9.7M annually by 2029-2030 Pay from the General Fund Current funding status 78% If only makes the required UAL payments, estimate to pay off UAL by 2037-2038(payoff year subject to assumption changes) Discretionary UAL Payments: 2018 established a 15-year pay-off goal Discretionary contributions to CaIPERS and pre - funding to PARS Trust 2021 pension funding plan update: 5-year payment plan; $2M per year to PERS and $2M per year to PARS ($4M annual total); pay off UAL by 2036 Pay from the Land Sale Proceeds Fund 2018 to 2023: paid $10.5M to CaIPERS and $9.6M to PARS Pension UAL Paydown Mechanism. 5-year payment plan and pay off UAL (unfunded accrued liability) by 2035- 2036: How it works: discretionary payment to a PARS pension trust account; trust assets grow to a balance that is sufficient to pay annual required UAL payment starting 2035-2036; projected trust balance at $31 million 2035-2036. Results: GF makes required UAL payments from now to 2035; pension trust makes required UAL payments from 2036 and forward. Interest savings: $6 million approximately or $1.5 million at present value. Projection assumes annual interest earnings of 6% from the trust account and 6.8% from PERS investment performance. Deviations from these assumptions may change the payoff year. Budget Development Steps:0 May 21, 2024, Budget Workshop to discuss budget options, receive community input and Council directions. June 18, 2024, budget adoption /�N Remembering what connects us. Questions? 1W, A T'