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Home My WebLink About2017-03-02 LTFP Council Workshop - Presentation DRAFT LONG-TERM FINANCIAL PLAN FY2018 TO FY2027 Description Forecast Forecast Forecast Forecast Forecast FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Projected Revenues 149,696,287$ 153,410,553$ 157,302,967$ 162,519,635$ 166,244,352$ Projected Expenditures 157,303,687$ 165,354,882$ 175,911,877$ 187,962,423$ 199,498,902$ TOTAL GENERAL FUND SURPLUS/(DEFICIT)(7,607,400)$ (11,944,329)$ (18,608,911)$ (25,442,787)$ (33,254,550)$ Administrative Actions (Energy Effiicency Projects)875,000$ 1,700,000$ 2,525,000$ 2,525,000$ 2,525,000$ SURPLUS/(DEFICIT) WITH ADMINISTRATIVE ACTIONS (6,732,400)$ (10,244,329)$ (16,083,911)$ (22,917,787)$ (30,729,550)$ Fiscal Projections Summary (FY2018 – FY2022) ADJUSTMENTS TO FY2018 FORECAST Draft LTFP Forecast Deficit $6,732,400 Reduced Public Liability expenditures ($2,000,000) Other adjustments including no new positions and various expenditure category and revenue changes $(387,424) Fiscal Year 2018 Baseline Deficit $ 4,344,976 Description Forecast Forecast Forecast Forecast Forecast FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Projected Revenues 170,462,766$ 174,761,463$ 179,116,133$ 183,528,466$ 188,690,153$ Projected Expenditures 205,308,696$ 216,324,575$ 224,282,842$ 232,078,722$ 240,551,854$ TOTAL GENERAL FUND SURPLUS/(DEFICIT)(34,845,931)$ (41,563,112)$ (45,166,709)$ (48,550,256)$ (51,861,701)$ Administrative Actions 2,525,000$ 2,525,000$ 2,525,000$ 2,525,000$ 2,525,000$ SURPLUS/(DEFICIT) WITH ADMINISTRATIVE ACTIONS (32,320,931)$ (39,038,112)$ (42,641,709)$ (46,025,256)$ (49,336,701)$ Fiscal Projections Summary (FY2023 – FY2027) Description Forecast Forecast Forecast Forecast Forecast FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Revenues: Property Taxes 33.26$ 34.17$ 35.10$ 36.06$ 37.05$ Sales Tax 32.71$ 33.53$ 34.37$ 35.23$ 36.11$ Franchise Fees 11.99$ 12.19$ 12.39$ 12.59$ 12.80$ Utility Users Taxes 6.44$ 6.51$ 6.57$ 6.64$ 6.71$ Transient Occupancy Taxes 3.73$ 3.77$ 3.82$ 3.90$ 3.98$ Motor Vehicle License Fees 20.61$ 21.23$ 21.86$ 22.51$ 23.18$ SUBTOTAL MAJOR DISCRETIONARY REVENUES 108.75$ 111.38$ 114.11$ 116.93$ 119.82$ Development Revenue 1.04$ 1.05$ 1.05$ 1.06$ 1.06$ Licenses and Permits 1.18$ 1.21$ 1.23$ 1.26$ 1.28$ Fines, Forfeitures & Penalties 1.04$ 1.06$ 1.08$ 1.10$ 1.13$ Use of Money and Property 2.76$ 2.79$ 2.81$ 2.84$ 2.87$ Other Local Taxes 2.47$ 2.50$ 2.52$ 2.55$ 2.57$ Police Grants 0.66$ 0.66$ 0.66$ 0.66$ 0.66$ Other Agency Revenue 2.06$ 2.08$ 2.10$ 2.12$ 2.14$ Charges for Services 6.23$ 6.27$ 6.30$ 6.33$ 6.36$ Interfund Reimbursements 9.84$ 9.94$ 10.03$ 10.13$ 9.78$ Other Revenues - Miscellaneous 0.91$ 0.91$ 0.92$ 0.92$ 0.93$ Transfers From Other Funds 10.80$ 10.80$ 10.80$ 10.80$ 10.80$ SUBTOTAL OTHER REVENUES 39.00$ 39.25$ 39.51$ 39.77$ 39.58$ Revenue Projections (FY2018 – FY2022) In Millions Description Forecast Forecast Forecast Forecast Forecast FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 NEW DEVELOPMENT REVENUES Property Taxes 0.45$ 0.72$ 1.02$ 1.41$ 1.76$ Sales Tax 0.15$ 0.32$ 0.45$ 0.59$ 0.74$ Franchise Fees 0.13$ 0.21$ 0.29$ 0.38$ 0.48$ Utility Users Taxes 0.05$ 0.09$ 0.12$ 0.16$ 0.20$ Transient Occupancy Taxes 0.53$ 0.53$ 0.53$ 1.55$ 1.55$ Motor Vehicle License Fees 0.31$ 0.50$ 0.71$ 0.99$ 1.24$ Other Revenues - Miscellaneous 0.17$ 0.27$ 0.38$ 0.50$ 0.62$ Other Local Taxes 0.15$ 0.15$ 0.18$ 0.26$ 0.26$ SUBTOTAL NEW DEVELOPMENT REVENUES 1.95$ 2.77$ 3.68$ 5.82$ 6.84$ TOTAL REVENUES 149.70$ 153.41$ 157.30$ 162.52$ 166.24$ Year-over-Year Change 2%3%3%2% Revenue Projections (cont.) (FY2018 – FY2022) In Millions Description Forecast Forecast Forecast Forecast Forecast FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Revenues: Property Taxes 38.07$ 39.12$ 40.20$ 41.31$ 42.46$ Sales Tax 37.01$ 37.94$ 38.88$ 39.86$ 40.85$ Franchise Fees 13.01$ 13.22$ 13.44$ 13.67$ 13.89$ Utility Users Taxes 6.77$ 6.84$ 6.91$ 6.98$ 7.05$ Transient Occupancy Taxes 4.06$ 4.14$ 4.22$ 4.30$ 4.39$ Motor Vehicle License Fees 23.88$ 24.59$ 25.32$ 26.08$ 26.86$ SUBTOTAL MAJOR DISCRETIONARY REVENUES 122.80$ 125.85$ 128.98$ 132.20$ 135.50$ Development Revenue 1.07$ 1.07$ 1.08$ 1.08$ 1.09$ Licenses and Permits 1.31$ 1.33$ 1.36$ 1.39$ 1.41$ Fines, Forfeitures & Penalties 1.15$ 1.17$ 1.20$ 1.22$ 1.24$ Use of Money and Property 2.90$ 2.93$ 2.96$ 2.99$ 3.02$ Other Local Taxes 2.60$ 2.62$ 2.65$ 2.68$ 2.70$ Police Grants 0.66$ 0.66$ 0.66$ 0.66$ 0.66$ Other Agency Revenue 2.16$ 2.18$ 2.20$ 2.23$ 2.25$ Charges for Services 6.39$ 6.42$ 6.46$ 6.49$ 6.52$ Interfund Reimbursements 9.88$ 9.98$ 10.08$ 10.18$ 10.28$ Other Revenues - Miscellaneous 0.93$ 0.94$ 0.94$ 0.95$ 0.95$ Transfers From Other Funds 10.80$ 10.80$ 10.80$ 10.80$ 10.80$ SUBTOTAL OTHER REVENUES 39.85$ 40.11$ 40.38$ 40.66$ 40.93$ Revenue Projections (FY2023 – FY2027) In Millions Description Forecast Forecast Forecast Forecast Forecast FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 NEW DEVELOPMENT REVENUES Property Taxes 2.11$ 2.46$ 2.81$ 3.17$ 3.35$ Sales Tax 0.85$ 0.96$ 1.06$ 1.16$ 1.26$ Franchise Fees 0.57$ 0.67$ 0.76$ 0.84$ 0.93$ Utility Users Taxes 0.24$ 0.27$ 0.31$ 0.35$ 0.83$ Transient Occupancy Taxes 1.55$ 1.55$ 1.55$ 1.55$ 1.55$ Motor Vehicle License Fees 1.48$ 1.73$ 1.97$ 2.20$ 2.35$ Other Revenues - Miscellaneous 0.74$ 0.86$ 0.98$ 1.06$ 1.69$ Other Local Taxes 0.28$ 0.31$ 0.33$ 0.35$ 0.30$ SUBTOTAL NEW DEVELOPMENT REVENUES 7.82$ 8.80$ 9.75$ 10.67$ 12.26$ TOTAL REVENUES 170.46$ 174.76$ 179.12$ 183.53$ 188.69$ Year-over-Year Change 3%3%2%2%3% Revenue Projections (cont.) (FY2023 – FY2027) In Millions LTFP Revenue Assumptions •Major Discretionary increases assumed: –Property Tax and MVLF base 3% AV growth per year –Sales Tax 2.5% per year –Franchise Fees approximately 2% per year –UUT 1% per year –TOT average of 2% per year LTFP Revenue Assumptions (cont.) •Development revenues are included based on Pro Forma Advisors LLC revenue forecast •Property Tax revenues include projected RPTTF payments for SERAF loan of approx. $1.0 million per year beginning in FY2019 •The use of Economic Contingency funds is not assumed. The forecast does not assume a recession. Description Forecast Forecast Forecast Forecast Forecast FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Expenditures: Personnel Services 87.98$ 88.82$ 90.52$ 92.23$ 94.01$ Flex/Insurance 13.63$ 14.63$ 15.71$ 16.87$ 18.14$ PERS 25.84$ 29.23$ 32.50$ 35.45$ 38.84$ PERS Discount Rate Change -$ 1.43$ 3.37$ 7.02$ 7.23$ Salary Savings (On Going)(0.96)$ (1.04)$ (1.09)$ (1.14)$ (1.22)$ PERS Prepayment Savings (0.82)$ (0.95)$ (1.07)$ (1.17)$ (1.31)$ SUBTOTAL PERSONNEL SERVICES EXPENDITURES 125.66$ 132.12$ 139.94$ 149.26$ 155.68$ Supplies and Services 15.24$ 16.62$ 17.95$ 19.38$ 20.74$ Utilities 5.79$ 6.08$ 6.38$ 6.70$ 7.03$ Other Expenses 0.57$ 0.58$ 0.59$ 0.61$ 0.62$ Equipment (Capital not CIP)0.16$ 0.16$ 0.16$ 0.16$ 0.17$ Transfers/Debt Service 9.08$ 6.27$ 6.37$ 6.27$ 6.22$ Capital Improvement Projects -$ -$ -$ -$ -$ Non-CIP Project Expenditures 0.02$ 0.02$ 0.02$ 0.02$ 0.02$ SUBTOTAL OTHER EXPENDITURES 30.86$ 29.72$ 31.47$ 33.14$ 34.79$ NEW DEVELOPMENT EXPENDITURES 4.0 Truck Staffing for Millenia and Bayfront -$ 1.80$ 1.92$ 2.02$ 4.27$ Peace Officer Funding 0.70$ 1.48$ 2.35$ 3.30$ 4.36$ Millenia Parks Maintenance 0.08$ 0.08$ 0.08$ 0.08$ 0.08$ Fire Station Supplies and Services -$ 0.16$ 0.16$ 0.16$ 0.32$ SUBTOTAL NEW DEVELOPMENT EXPENDITURES 0.78$ 3.51$ 4.50$ 5.56$ 9.03$ TOTAL EXPENDITURES 157.30$ 165.35$ 175.91$ 187.96$ 199.50$ Year-over-Year Change 5%6%7%6% Expenditure Projections (FY2018 – FY2022) In Millions Description Forecast Forecast Forecast Forecast Forecast FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Expenditures: Personnel Services 95.80$ 97.63$ 99.50$ 101.40$ 103.35$ Flex/Insurance 19.51$ 20.99$ 22.60$ 24.35$ 26.24$ PERS 41.97$ 44.63$ 46.99$ 48.52$ 50.71$ PERS Discount Rate Change 4.69$ 7.67$ 7.62$ 7.87$ 8.11$ Salary Savings (On Going)(1.28)$ (1.33)$ (1.38)$ (1.43)$ (1.48)$ PERS Prepayment Savings (1.43)$ (1.53)$ (1.62)$ (1.68)$ (1.77)$ SUBTOTAL PERSONNEL SERVICES EXPENDITURES 159.27$ 168.06$ 173.70$ 179.04$ 185.16$ Supplies and Services 21.15$ 21.58$ 22.01$ 22.45$ 22.90$ Utilities 7.39$ 7.76$ 8.14$ 8.55$ 8.98$ Other Expenses 0.63$ 0.64$ 0.66$ 0.67$ 0.68$ Equipment (Capital not CIP)0.17$ 0.17$ 0.17$ 0.17$ 0.18$ Transfers/Debt Service 6.29$ 6.28$ 6.25$ 6.24$ 5.99$ Capital Improvement Projects -$ -$ -$ -$ -$ Non-CIP Project Expenditures 0.02$ 0.02$ 0.02$ 0.02$ 0.02$ SUBTOTAL OTHER EXPENDITURES 35.64$ 36.44$ 37.25$ 38.09$ 38.74$ NEW DEVELOPMENT EXPENDITURES 4.0 Truck Staffing for Millenia and Bayfront 4.50$ 4.71$ 4.92$ 5.14$ 5.36$ Peace Officer Funding 5.51$ 6.72$ 8.02$ 9.41$ 10.90$ Millenia Parks Maintenance 0.08$ 0.08$ 0.08$ 0.08$ 0.08$ Fire Station Supplies and Services 0.32$ 0.32$ 0.32$ 0.32$ 0.32$ SUBTOTAL NEW DEVELOPMENT EXPENDITURES 10.40$ 11.83$ 13.34$ 14.95$ 16.65$ TOTAL EXPENDITURES 205.31$ 216.32$ 224.28$ 232.08$ 240.55$ Year-over-Year Change 3%5%4%3%4% Expenditure Projections (FY2023 – FY2027) In Millions FY2018 Baseline FY2018 Baseline Draft Long-Term Financial Plan Forecast Deficit ($6,732,400) Adjustment to Public Liability expenditures $2,000,000 Other Adjustments (Revenue and Expenditures) $387,424 FISCAL YEAR 2018 BASELINE DEFICIT ($4,344,976) Expenditure LTFP Assumptions (FY2019 – FY2027) •Personnel Services –Includes a 2% wage inflation per year –PERS costs reflect estimated contribution rates provided by Bartel and Associates (06/30/14 valuation) –Salary savings is calculated at 1% per year (Salaries/PERS/Medicare) –Assumes 4.0 fire staffing for Millenia and Bayfront in FY2019 and FY2022 respectively –Projects the funding of 5.0 Peace Officer positions –Includes Flex/Insurance increases of 5% for Misc and 10% for Safety per year –An increase in Workers Compensation contributions Expenditure LTFP Assumptions (cont.) •Supplies and Services –Assumes Millenia and Bayfront fire station in FY2019 and FY2022 •Other expenditure categories: –Utilities at 5% per year –Other Expenses at 2% per year –Equipment at 1% per year –Transfers Out includes expenditures related to debt service payments and anticipated transfers to other funds PERS $ Contribution Projection $- $10 $20 $30 $40 $50 $60 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027Millions Total Projected City PERS Contribution Notes: 1.Based on estimated contribution rates as provided by Bartel and Associates as of June 30, 2014 Valuation Report and assumes 75th Percentile on a 7.5% ROI. 2.City contribution amount includes assumption of 2% wage inflation. Health Insurance Premium History $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Employee + Family Healthcare Premiums 2007 to 2017 Kaiser PPO Full Value Pending Legislation •Pension Reform •Healthcare Modifications (ACA) •Sales Tax Restructuring Potential Solutions •Technology •Efficiency •Use of One-Time Funds •Public Private Partnerships •Internship/Volunteer Programs •Contract Services •Service Levels •Changing Service Delivery Model Potential Solutions (cont.) •Fees/Cost Recovery •Priority Based Budgeting •Competitive Purchasing •Municipal Code/Charter Updates Bartel and Associates City of Chula Vista Miscellaneous and Safety Plans CalPERS Actuarial Issues – 06/30/2015 Valuation Presented by: Doug Pryor, Vice President Bartel and Associates, LLC CalPERS Changes CalPERS Changes (cont.) Investment Returns Averages (geometric): 7.8% for all years, 7.0% last 20 years, 6.0% last 10 years (excludes estimated 16/17 return) Summary of Demographic Information - Miscellaneous Funded Status - Miscellaneous Funded Ratio - Miscellaneous Contribution Projections- Miscellaneous Contribution Projections- Miscellaneous (cont.) Contribution Projections- Miscellaneous (cont.) Summary of Demographic Information - Safety Funded Status - Safety Funded Ratio - Safety Contribution Projections- Safety Contribution Projections- Safety (cont.) Contribution Projections- Safety (cont.) Next Steps •Staff will continue refining the LTFP •Development of the Fiscal Year 2017-18 Proposed Budget •LTFP will be included in the Proposed (May) and Adopted (September) budget document QUESTIONS?