HomeMy WebLinkAboutReso 47-2003RESOLUTION NO. 47-2003
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION APPROVING THE 2003-2004 OPERATING BUDGET
FOR THE CITY OF SOUTH SAN FRANCISCO AND APPROPRIATING
THE CORRESPONDING FUNDS, AUTHORIZING THE CITY
MANAGER TO MAKE SPECIFIED EXPENDITURES, APPROVING
THE GANN SPENDING LIMIT AND THE RESERVES POLICY
WHEREAS, a preliminary draft budget for fiscal year 2003-2004 was reviewed by the City
Council at a study session on May 13, 2003; and
WHEREAS, the proposed 2003-2004 City of South San Francisco Operating Budget is
attached hereto; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San
Francisco that the City Council hereby approves the fiscal year 2003-2004 Operating Budget for the
City of South San Francisco and hereby appropriates the funds set forth therein; and
BE IT FURTHER RESOLVED that consistent with the limitations set forth herein, any and
all expenditures for agreements relating to either the programs or materials contained in the 2003-
2004 Operating Budget or the Capital Budget for construction projects not to exceed $25,000 may
be expended or entered into under authority of or by the City Manager and are hereby authorized and
the payments therefore may be made by the Director of Finance; and
BE IT FURTHER RESOLVED that any monies received during fiscal year 2003-2004 as a
consequence of a grant application approved by the City Council are hereby appropriated for the
purposes for which the grant has been approved. Such appropriation includes authorization for the
City Manager to expend such monies and for the Finance Director to make payments therefore in
accordance with the terms and conditions and for the purpose of the grant; and
BE IT FURTHER RESOLVED that the Finance Director is hereby granted the authority to
increase budgeted revenues and budgeted expenses in departments specifically for development
related expenses such as expedited plan checks, legal reviews, traffic studies, geotechnical studies,
etc., where the developers pay up front for expenses that the City contracts out for. In those cases,
the Finance Director upon receiving those deposits or payments will increase the budget for revenues
in the General Fund and expenses in the appropriate departments where those expenses will take
place by a corresponding amount. Said transactions will have no net impact on General Fund
Reserves, as revenue will offset expenses; and
BE IT FURTHER RESOLVED that the Finance Director is hereby authorized to increase
budgeted revenues and expenses in departments so that departments may use donations made to
them. Said transactions will have no net impact on General Fund Reserves, as revenue will offset
expenses; and
BE IT FURTHER RESOLVED that the 2003-2004 budget attached hereto is hereby
officially adopted:
By department by fund for General Fund operating budget appropriations; and
By fund for other operating budget appropriations; and
By project for capital project appropriations.
BE IT FURTHER RESOLVED that the Gann Appropriations Limit attached hereto is
approved and the Reserves Policy attached hereto is approved.
BE IT FURTHER RESOLVED that the City Manager may authorize the Director of Finance
to transfer budgets during the year in accordance with generally accepted accounting principles
between the following budget categories provided the overall appropriation by funding source is not
increased without City Council approval:
Department within the same fund;
Capital projects with the same funding source;
Operating and capital budgets for the same department if funded by the same funding
source.
BE IT FURTHER RESOLVED that the Director of Finance is hereby authorized and
directed to rollover any outstanding encumbrances from Fiscal Year 2002-2003 into Fiscal Year
2003 -2004.
BE IT FURTHER RESOLVED that the Director of Finance is hereby authorized and
directed to rollover unencumbered appropriations from grants received in 2002-2003 or prior years
if so allowed under the terms of the grant.
BE IT FURTHER RESOLVED that the staffing levels for each department, as detailed in
the 2003-2004 Operating Budget are hereby approved as adopted by the City Council on June 11,
2003.
BE IT FURTHER RESOLVED that the Director of Finance is hereby authorized and
directed to carry forward unspent 2002-2003 unencumbered non-recurring project budgets such as
litigation project.
I hereby certify that the foregoing Resolution was regularly introduced and adopted by the
City Council of the City of South San Francisco at a regular meeting held on the 1 lth day of June
2003 by the following vote:
AYES: Councilmembers Joseph A. Femekes, Richard A. Garbarino and Raymond L.
Green, Mayor Pro Tem Karyl Matsumoto and Mayor Pedro Gonzalez
NOES: None.
ABSTAIN: None.
ABSENT: None.
ATTEST:
City Clerk
Revenues and Other
Financing Sources
Property Taxes
Sales Tax
Transient Occupancy Tax
Motor Vehicle In Lieu Fees
Revenue from Other Agencies
Franchise Fees
Business License
Building Permits
Charges for Services
Fines
Interest'
Rent '
Administrative Charges
Other
Transfers In
Total Revenues:
Plus Prior Year Carryovers
Total Revenues and Other
Financing Sources
Expenditures
Administration (3)
Economic & Comm. Dev. (1)
Fire (1)
Library
Police
Maintenance Services (2)
Parks, Rec & Maint. Svcs. (2)
Public Works
Recreation and Community Services
(2)
Projected depar[mental savings
Debt Service
Subtotal, Operating
Budget Expenditures
Net Operating Budget Impact
City of South San Francisco
General Fund Operating Budget
Adopted Midyear
Actual Actual Budget Estimate
2000-01 2001-02 2002-03 2002-03
$ 7,389,022 $ 9,243,158 $ 9,626,000 $ 9,444,000
13,793,074 $13,115,870 13,655,000 13,165,000
6,057,060 $ 3,977,627 $ 5,300,000 4,200,000
3,287,214 $ 3,400,536 3,536,000 3,536,000
1,863,995 $ 1,555,950 989,000 1,529,733
1,682,028 $ 1,880,341 1,965,000 2,t00,000
1,056,662 $ 1,326,404 1,464,000 1,833,000
2,362,459 $ 2,705,520 2,110,000 2,632,000
4,312,183 $ 4,537,498 3,359,500 4,025,300
932,545 $ 915,270 1,007,000 1,007,000
881,095 $ 909,447 788,000 788,000
1,002,188 $ 1,240,068 1,365,388 2,020,368
1,472,695 $ 1,602,195 1,652,600 1,652,600
1,963,871 $ 388,169 415,000 415,000
1,479,098 $ 1,297,538 1,091,500 1,206,883
$ 49,535,189 $ 48,093,591 $ 48,323,968 $ 49,554,884
847,794
$ 49,535,189 $ 48,093,591 $ 48,323,968 $ 50,402,678
Proposed
Budget %Change
2003-04 Midyear Est.
10,084,000 6.8%
13,275,949 0.8%
4,400,000 4.8%
3,748,200 6.0%
1,123,785 -26.5%
2,869,000 36.6%
1,479,700 -19.3%
3,181,900 20.9%
4,771,300 18.5%
1,048,500 4.1%
888,000 12.7%
2,064,100 2.2%
1,848,868 11'.9%
435,000 4.8%
1,095,400 -9.2%
52,313,702 ' 5.6%
52,313,702
5,312,986 6,080,430 6,313,118 6,495,369 - 5,258,510
1,976,026 1,808,866 1,405,1 75 2,748,336 2,689,613
11,845,565 12,426,011 12,895,984 11,740,439 13,762,296
3,480,492 3,849,648 3,664,669 4,127,239 4,101,498
11,842,894 12,132,348 12,115,988 12,327,813 14,264,946
5,942,148
10,388,107 10,691,657 11,118,270 11,134,947
t,133,467 1,123,054 1,113,966 1,145,951 990,784
(500,000)
210,359 150,000 150,000
45,981,537 $ 48,322,373 $ 48,777,170 $ 49,370,094
3,553,652 $ (228,782) $ (453,202) $ 1,032,584
5,102,893
130,000
$ 52,242,688
$ 71,014
% Change
Adopted
Budget
-16.7%
91.4%
6.7%
11.9%
17.7%
NA
NA
-11.1%
NA
NA
-13.3%
7.1%
(1) Econ and Corem Development took responsibility for Building Inspection Services from the Fire Dept. after the
Adopted Budget was set for 2002-03.
(2) Parks, Recreation and Maintenace Services is being split into two new departments for 2003-04: Maintenance Services and Recreation and Community Services.
(3) Information Technology was set up as an Internal Service Fund for 2003-04, reducing Administration, and increasing each
department's operating budge~.
Total General Fund Operating and Capital Budget,
& Changes to General Fund Reserves
Net Operating Budget Impact (from
Table I)
Less Transfers to Capital Projects:
Net Impact on General Fund Reserves
Year End Adopted Midyear Proposed
Actual Budget Budget Budget
2001-02 2002-03 2002-03 2003-04
$ (228,782) $ (453,202) $ 1,032,584 71,014
(1,250,048). (106,000) -$851,419 -87,000
(1,478,830) (559,202) 181,165 (15,986)
General Fund Reserves Projection
I. Discretionary Reserves/
Reserves Available
Emergencies 1,000,000 1,000,000 $1,000,000 1,000,000
Economic Contingencies
3,200,000 3,500,000 3,500,000 3,500,000
Undesignated Reserve
4,122,372 4,290,180 6,606,595 6,869,609
Ii. Non-Discretionary Reserves/
Reserves Already Committed
Encumbrances
Advances to Other Funds
Designaged for future Economic
Development Projects
Inventory
Closed Bond Funds
Appropriated Capital Projects
847,794
4,901,846
39,885
305,000
745,419
4,031,973 $597,000 318,000
$3,600,000 3,600,000
98,297 $39,885 39,885
Subtotal, Non Discretionary Reserves
$ 6,839,944 $ 4,130,270 $ 4,236,885 $ 3,957,885
Total General Fund Reserves
$ 15,162,315 $ 12,920,450 $ 15,343,480 $ 15,327,494
P. 2
GENERAL FUND OPERATING BUDGET REVENUE DETAIL
OPERATING REVENUES
Adopted Amended Midyear
2002-03 2002-03 2002-03
Yr. End
Estimate
2002-03
Proposed
Budget
2003-04
Secured Property Tax
Unsecured Property Tax
Supplemental-Secured
Penalties Property Tax
Pending Property Tax Appeal
County Administration Fee
TOTAL PROPERTY TAX
Sales & Use
Public Safety Sales Tax
Franchise Fees
Transient Occupancy
Real Property Transfer
TOTAL OTHER TAXES
Business Licenses
Commercial Parking Tax
Bicycle Licenses
Building Permits
Grading & Public Works Permits
TOTAL LICENSES AND PERMITS
Traffic & Court Fines
Library Fines
TOTAL FINES & FORFEITURES
State Grant
Federal Library Grant
Library Local Government Grants
Increase library grant charges
Library Foundation
Ca. Library Literacy Grant
Library County Grants
Ca. Library Service Act
Senior Citizens Grant
State Booking Fee Reimbursement
Other State Revenue (AB 1396)
Motor Vehicle License Fees
Clean Air Funds
Trailer Coach License Fee
POST Reimbursement
Homeowner Tax Relief
Mandate Cost Reimbursement
Traffic Signal Maintenance
Off Highway Vehicle Fees
Summer Youth Employment
Intergovt. Progr. Reim...bursement
Disaster Recovery
Other Agencies
TOTAL FROM OTHER AGENCIES
8,421,000 8,421,000 8,519,000 8,619,000 9,093,000
566,000 566,000 650,000 650,000 682,500
753,000 753,000 389,000 389,000 408,500
(114,000) (114,000) (114,000) (114,000) (100,000)
9,626,000 9,626,000 9,444,000 9,544,000 10,084,000
13,300,000- 13,300,000 12,810,000 12,679,000 12,913,849
355,000 355,000 355,000 355,000 362,100
1,965,000 1,965,000 2,100,000 2,100,000 2,869,000
5,300,000 5,300,000 4,200,000 4,200,000 4,400,000
400,000 400,000 400,000 400,000 420,000
21,320,000 21,320,000 19,865,000 19,734,000 20,964,949
650,000 650,000 650,000 625,000
814,000 814,000 1,183,000 1,183,000
625,000
854,700
2,060,000 2,060,000 2,582,000 2,582,000 3,131,900
50,000 50,000 50,000 50,000 50,000
3,574,000 3,574,000 4,465,000 4,440,000 4,661,600
947,000 947,000 947,000 947,000 981,000
60,000 60,000 60,000 60,000 67,500
1,007,000 1,007,000 1,007,000 1,007,000 1,048,500
437,833 437,833 437,833
56,400
47,000
65,100
420,000
118,000
178,700
3,536,000
53,200 53,200 56,400
36,000 36,000 47,000
65,100 65,100 65,100
420,000 420,000 420,000
118,000 118,000 118,000
0 178,700
3,536,000 3,536,000 3,536,000
50,000 50,000 50,000 50,000
130,000 130,000 130,000 130,000
90,000 90,000 0
20,000 20,000 20,000 20,000
1,000 1,000 1,000 1,000
700 700 700 700
0
5,000
5,065,733
5,000 5,000 5,000
4,525,000 4,962,833 5,065,733
P.3
35,285
53,200
36,000
65,100
420,000
136,500
171,000
3,748,2O0
50,000
130,000
20,000
1,000
70O
5,000
4,871,985
OPERATING REVENUES
Adopted
2OO2-03
Amended
2002-03
Midyear
2002-03
Yr. End
Estimate
2002-03
Proposed
Budget
2003-04
City Forces General
Police reimb. From County
Police Service Charges
Communications Svc.-Colma, Brisbane
Police Recovery Charges
Fire Service Fees
Paramedic Service Fees
Restitution Damages
Engineering Fees
Planning Fees
Code Enforcement Database Maintenance Fee
Microfilm-Building
Developer Reimbursement
Passport Processing Fee
Other Reimbursement
Building Rental Fees
Aquatic Programs
Sports/Athletics
Special Classes/Events
Child Care/Playground Programs
Senior Programs
Community Gardens
Sale of Printed Material
Miscellaneous Library Charges
S. Airport/United Parking
City Administrative Fees
TOTAL CHARGES - CURRENT SVCS
Rent
Interest Income Investment
Interest Income Loans & Advances
Interest Income Misc.
Unrealized Gains/Losses
TOTAL USE OF MONEY & PROPERTY
Claims Settlement
Sale of Property
Lease Proceeds
Misc. Revenue
TOTAL OTHER REVENUES
SUBTOTAL
20,000
300,000
80,000
90,000
30,000
653,00O
2,000
5,000
50,000
50,000
20 000
20 000
10 000
190 000
180000
150000
352000
907,000
234000
2,000
5,000
7,500
2,000
1,652,600
5,012,100
1,365,368
608,000
180,000
2,153,368
10,000
5,000
15,000
47,232,468
20,000
300,000
80,000
90,000
30,000
653,000
2,000
5,000
50,000
50,000
20,000
20,000
10,000
190,000
180,000
150,000
352,000
907,000
234,000
2,000
5,000
7,500
2,000
1,652,600
5,012,100
1,365,368
608,000
180,000
2,153,368
10,000
5,000
15,000
47,670,301
20,000
300,000
80,000
90,000
423,800
840,000
2,000
5,000
75,000
50,000
20,000
20,000
10,000
190,000
222,000
150,000
352,000
925,000
234,000
2,000
5,000
7,500
2,000
1,652,600
5,677,900
2,020,368
6O8,OOO
180,000
2,808,368
10,000
5,000
15,000
48,348,001
20,000
300,000
80,000
90,000
423,800
840,000
2,000
5,000
75,000
50,000
20,000
20,000
10,000
190,000
222,000
150,000
352,000
925,000
234,000
2,000
5,000
7,500
2,000
1,652,600
5,677,900
2,020,368
608,000
180,000
2,808,368
10,000
5,000
15,000
48,292,001
21,200
302,000
318,000
84,800
95,400
492,400
953,000
2,000
5,000
125,000
48,000
50,000
20,000
20,000
10,000
235,000
230,5OO
155,000
420,000
926,500
237,OOO
2,500
5,000
11,000
2,000
1,848,868
6,620,168
2,064,100
870,100
17,900
2,952,100
10,000
5,000
15,000
51,218,302
P.4
OPERATING REVENUES
INTERFUND TRANSFERS:
Gas Tax
Federal Grants Fund
CDBG Fund
Donation/Trust Accounts
Parking District Fund
Miscellaneous
Health and Benefits Fund
Self Insurance Fund
Special Revenue Funds (Day in the Park):
TOTAL FUND TRANSFERS
TOTAL GENERAL FUND
Adopted
2002-03
958,000
27,5O0
86,000
20,000
1,091,500
48,323,968
Amended
2002-03
958,000
136,283
86,000
20,000
6,600
1,206,883
48,877,184
Midyear
2002-03
958,000
136,283
86,000
20,000
6,600
1,206,883
49,554,884
Yr, End
Estimate
2O02-03
958,000
136,283
86,0OO
20,000
6,600
1,206,883
49,498,884
Proposed
Budget
2003-04
1,005,900
27,500
36,000
20,000
6,000
1,095,400
52,313,702
CITY OF SOUTH SAN FRANCISCO OPERATING BUDGET, 2003-04
GANN APPROPRIATIONS LIMIT
Article XIIIB of the California State Constitution, more commonly referred to as the Gann
Initiative or Gann Appropriations limit, was adopted by California voters in 1980 and
placed limits on the amount of proceeds from taxes that state and local governmental
agencies can appropriate and spend each year.
The limit is different for each agency and the limit changes each year. Each year's limit
is based on the amount of tax proceeds that were authorized to be spent in fiscal year
1978-79 in each agency, modified for changes in inflation and population in each
subsequent year. Inflationary adjustments are, by law, based on increases in the
California per capita income or the increase in non-residential assessed valuation due to
new construction. Population adjustments are based on city population growth or county
population growth,
For the Fiscal Year 2002-03, the City of South San Francisco's estimated tax proceeds
to be received, as well as the tax proceeds appropriat.ed by the City Council, will, as in
prior years, continue to be under the legal limit. The appropriations limit for Fiscal Year
2003-04 is $75,628,716. This is the maximum amount of tax proceeds the City will be
able to appropriate and spend in the coming fiscal year. The City's appropriations
subject to the Gann limit are $34,440,849.
Section 9710 of the State Government Code, added in 1980 by the State Legislature,
requires a governing body to annually adopt, by resolution, an appropriations limit for the
following year. The City's fiscal year 2003-04 appropriations limit was adopted June 11,
2003 by resolution.
?.6
CITY OF SOUTH SAN FRANCISCO OPERATING BUDGET, 2003-04
GANN Appropriations Limit - Cumulative Percent Growth
CPI / Personal Population Change Cumulative
Income % Change % Change Factor Change Factor
1978-79 ..... base year .....
1979-80 10.17 0.23 10.42 10.42
1980-81 12.11 1.33 13.60 25.44
1981-82 9.12 0.74 9.93 37.90
1982-83 6.79 0.59 7.42 48.13
1983-84 2.35 0.32 2.68 52.09
1984-85 4.74 1.72 6.54 62.05
1985-86 3.74 0.60 4.36 69.12
1986-87 2.30 0.48 2.79 73.84
1987-88 3.47 1.39 4.91 82.37
1988-89 4.66 0.51 5.19 91.84
1989-90 5.19 .1.21 6.46 104.24
1990-91 4.21 1.26 5.52 115.52
1991-92 4.14 1.56 5.76 127.95
1992-93 (0.64) 1.83 1.18 130.63
1993-94 2.72 1.62 4.38 140.74
1994-95 0.71 1.54 -' 2.26 146.19
1995-96 4.72 0.27 5.00 158.50
1996-97 4.67 0.79 5.50 172.71
1997-98 4.67 0.77 5.48 187.65
1998-99 4.15 2.23 6.47 206.26
1999-2000 4.53 2.75 7.40 228.94
2000-01 4.91 2.42 7.45 253.44
2001-02 7.82 0.85 '8.74 284.33
2002-03 (1.27) 0.11 -1.16 279.87
2003-04 2.31 0.17 2.48 289.29
Note:
1987-88 to 1990-91 based on County population growth
1991-92 based on City growth
1992-93 and 1993-94 based on County growth
1994-95 through 1996-97 based on City growth, California per capita income
1997-98 through 2003-04 based on state Department of Finance statistics
Appropriations Subject to Limit
2000 - 2001
2001 - 2002
2002-2003
34,959,000
34,959,000
73,798,513
38,839,513
Proceeds of Taxes
Appropriations Subject to Limit
Current Limit
Amount Under Limit
32,510,435 36,645,768
32,510,435 36,645,768
68,663,438 74,664,622
36,153,003 38,018,854
Appropriation
Limit
21,453,172
24,371,032
26,790,463
28,778,332
29,548,877
31,481,825
32,855,201
33,772,203
35,429,821
37,269,963
39,678,646
41,870,116
44,283,754
44,805,544
46,769,848
47,827,283
50,219,960
52,980,497
55,881,688
59,498,655
63,903,388
68,663,438
74,664,622
73,798,513
75,628,716
2003-2004
34,440,849
34,44O,849
75,628,716
39,357,664
General Fund Administrative Departments
Actual Actual
General Fund Administrative
Depts. 2000-01 2001-02
Adopted Midyear Proposed
Budget Estimate Budget
2002-03 2002-03 2003-04
City Attorney $759,248 $1,114,104 $405,609 $405,609 $440,331
City Clerk $321,999 $357,326 $348,926 $348,926 $406,497
City Council $140,662 '$139,452 $167,173 $167,173 $195,002
City Manager $634,441 $657,956 $709,680 $709,680 $748,707
City Treasurer $28,846 $31,353 $32,492 $32,492 $35,159
Finance $1,247,940 $1,481,370 $1,528,946 $1,596,540 $1,655,534
Human Resources $790,620 $778,251 $882,798 $912,978 $943,440
Information Technology (1) $724,184 $930,078 $1,229,709 $1,310,686
Non-Departmental (2) $665,046 $590,540 $1.,007,785 $1,011,285 $833,840
Total $5,312,986 $6,080,430 $6,313,118 $6,495,369 $5,258,510
(1) For the 2003-04 year, Information Technology is proposedto be an Internal Service Fund, similar
to Building Maitenance, Communications, and the Garage. It will charge out its costs
to operating departments.
(2) Non-Departmental includes stipends to the Housing Authority
Proposed 2003-04 General Fund Administrative
Allocation to Other Funds:
Fund Description
2002-03
Actual
ANIP
CDBG
W.Park 1 &2
W.Park 3
Stonegate
Willow Gardens
Point Grande
Solid Wa:ste
Oyster Point CIP
RDA Total
21 650
28.950
21.000
23.000
19.000
18.000
1 000
34.000
262,000
550,000
2003-04
Recommended:
8,666
32,844
57,337
54,788
53,661
54,337
1,000
15,323
275,100
505,498
Water Quality/Sewer
Parking District
Storm Water
Fund 44, bond redemption
Fund 45, Cap Impr. Fin. Authority
Fund 62, Gateway Asses. Dist
Fund 87, Non Obligated Bonds
Fund 26, East of 101Traffic Improvements
Conference Center
Total:
526,000
89,000
22,O0O
2,000
3,000
4,0OO
22,000
6,000
1,652,600
627,807
78,610
23,100
4,235
257
410
17,245
26,890
11,760
1,848,868.
NON-DEPARTMENTAL
Account #
4201
42i0
4220
4301
4307
4310
4365
4380
4410
4801/4810
21310
Adopted
VENDOR 2002-03
Professional & Specialized Services
· BBN - Airport Noise Consultant 25,000
Animal Control 372,260
Professional Tech. Services - Government
· Alliance (E 101 Shuttle) * 40,500
· Alliance * 25,000
· C/CAG 50,000
· C/CAG Congestion Relief Plan 150,000
Office Supplies · 3,000
· Newsletter 30,700
· Printing 12,000
· Business Cards 2,000
Postage 19,250
Dues, Meetings, Mileage
· Peninsula Conflict 13,300
· League of CA Cities 17,800
· ABAG 8,600
· Airport Community Round Table 1,240
· Summer Youth Jobs 7,730
· Chamber of Commerce 880
· SAMCEDA 10,300
· · Peninsula T.V 40,421
· SAMCAT (Cable TV oversight) 2,400
· Criminal Justice Council 6,700
· NOISE 5,150
· Peninsula Policy Partnership 13,075
· LAFCO 7,420
Maintenance/Operating Equipment
· Phones/Computers for Council Chambers 5,000
· Non-Departmental EQuipment 1,000
Promotional- TOT Allocation
· Chamber of Commerce 60,000
· South San Francisco Directory 20,000
Day in the Park 30,000
Plymire-Schwarz Museum and Fire Museum 6,000
Phone Service 5,000
City Hall Copier 10,132
Housing Authority 5,927
Total 1,007,785
· These costs are associated with East of 101 employers and have been
shifted to Redevelopment funding.
Recommended
2003-04
354,500
50,000
150,000
3,000
30,700
12,000
2,000
19,250
13,300
17,800
9,500
1,240
7,730
880
10,300
41,000
2,000
6,700
13,075
7,420
5,000
1,000
60,000
6,000
5,000
4,445
833,840
i°.lO
REDEVELOPMENT AGENCY
REDEVELOPMENT AGENCY SUMMARY
summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Net Tax Increment
20% Low Mod Housing
Interest
Misc. Revenue / Rent
HUD Loan Proceeds
Proceeds from Land Sale
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
13,498,446
3,374,611
1,729,170
108,951
250,000
4,550,819
23,511,997
12,937,528 12,910,878 13,949,360 14,698,400 15,284,800
3,234,382 3,227,719 3,487,340 3,674,600 3,821,200
1,165,250 1,270,250 1,297,200 1,313,200 1,345,700
258,300 258,300 322,200 322,200 322,200
17,595,460 17,667,147
19.056,100
20,008,400 20,773,900
EXPENDITURES
Program Expenditures
Transfers Out - Debt Service
Transfers Out - Capital Projects
Pass Through Agreements
Bond Retirement Account
Advance Repayment / Interest
Total Expenditures
1,888,860 4,179,569 4,129,569 5,609,532
2,781,749 2,972,082 2,972,082 3,322,731
926,202 175,000 7,004,577 9,401,000
717,657 902,146 743,683 869,940
3,100,859 3,269,395 3,269,395 3,392,815
158,225 1,170,000 1,170,000 900,000
5,749,205 5,914,747
3,348,111 3,384,184
1,000,000 1,000,000
887,339 905,085
2,902,817 2,958,892
1,250,000 1,250,000
9,573,552 12,668,192 19,289,306 23,496,018 15,137,472 15,412,888
Excess of Revenues
over (under) Expenditures
Fund Balance, Beginning of Year
Fund Balance, End of Year
13,938,445
31,509,973
45,448,418
4,927,268
(1,622,160) (4,439,918) 4,870,928 5,361,012
45,448,418 43,826,258 39,386,340 44,257,268
'43,826,258 39,386,340 44,257,268 49,618,280
P. 11
REDEVELOPMENT AGENCY
GATEWAY PROJECT AREA
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
Gross Tax Increment 5,674,448 5,928,801 5,928,801 6,364,000 6,494,000 6,627,000
Interest 540,527 600,000 600,000 600,000 601,000 602,000
Misc. Revenue 9,153 7,000 7,000 7,000 7,000 7,000
Total Revenues
6,224,128 6,535,801 6,535,801 6,971,000
7,102,000
7,236,000
EXPENDITURES
Program Expenditures
Transfers Out - Debt Service
Transfers Out - Low Mod Housing
Transfers Out- Capital Projects (1)
Bond Retirement Account
Total Expenditures
263,704 249,877 249,877 ' 679,892 693,490 707,360
1,724,675 1,830,769 1,830,769 2,180,993 2,206,893 2,244,348
1,134,890 1,185,760 1,185,760 1,272,800 1,298,800 1',325,400
75,000 3,905,000 4,361,000
3,100,859 3,269,395 3,269,395 3,392,815 2,902,817 2,958,892
6,224,128 6,610,801 10,440,801 11,887,500
7,102,000
7,236,000
Excess of Revenues
over (under) Expenditures (2)
Fund Balance, Beginning of Year
Fund Balance, End of Year
Bond Funds, End of Year
Bond Retirement Account
- (75,000) (3,905,000) (4,916,500)
18,765,777 21,866,636 21,231,031 19,707,348
21,866,636 21,231,031 19,707,346 22,610,164
10,607,741 6,702,741 1,839,828 1,895,023
11,258,895 14,528,290 17,867,518 20,715,141
22,610,164
25,569,056
1,951,874
23,617,182
Notes:
(1) Capital Projects: Day Care Facilities
Fire Station No 2 Upgrades
Train Station Study
Oyster Pt Flyover & Hook Ramps Project
(2) For the Gateway Project Area, the excess of expenditures over revenues reflects
a draw-down on the 1999 Gateway RDA Bond proceeds.
$3,000,000
$830,000
$75,000
$4,361,000
P. 12
REDEVELOPMENT AGENCY
SHEARWATER PROJECT AREA
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Gross Tax Increment
Interest
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
1,626,204 1,581,351 1,520,224 2,146,000 2,496,000 2,852,000
49,433 25,000 25,000 25,000 25,000
1,675,637 1,581,351 1,545,224 2,171,000 2,521,000
2,877,000
EXPENDITURES
program Expenditures
Transfers Out - Low Mod Housing
Advance Repayment / Interest (1)
Total Expenditures
179,029 245,148 245,148 261,426 269,269 277,347
325,241 316,270 304,045 429,200 499,200 570,400
158,225 500,000 500,000 800,000 1,000,000 1,000,000
662,495 1,061,418 1,049,193 1,490,626 1,768,469
1,847,747
Excess of Revenues
over (under) Expenditures
Fund Balance, Beginning of Year
Unreserved / Undesignated
End of Year
1,013,142 519,933 496,031 680,374 752,531
(3,351,737) (2,338,595) (1,842,564) (1,162,190)
(2,33_8,595) (1,842,564) ..(1,162,190) (409,658)
1,029,253
(409,658)
619,595
Note:
(1) Shearvvater RDA has begun to generate a net surplus and can begin to pay back the General Fund and Downtown RDA
for the advances made over the last several years. As of 211/03, Shearwater owed $3,846,000.
P. 13
REDEVELOPMENTAGENCY
DOWNTOWN / CENTRAL PROJECT AREA
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Gross Tax Increment
Interest
Misc. Revenue / Rent
HUD Loan Proceeds
Proceeds from Land Sale
Total Revenues
EXPENDITURES
Program Expenditures
Transfers Out - Debt Service
Transfers Out - Low Mod Housing
Transfers Out - Capital Projects (1)
Pass Through Agreements
Advance Repayment / Interest
Total Expenditures
Excess of Revenues
over (under) Expenditures
Fund Balance, Beginning of Year
Fund Balance, End of Year
Bond Funds, End of Year
Advances to Other Funds
Loans Receivable
All Other Reserved Funds
Unreserved / Undesignated
Fund Balance, End of Year
Note:
(t) Capital Projects:
New Central Fire Station
IT Bldg and Health Canter Bldg Rehab
Miscellaneous Land Acquisition
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
7,732,971 6,681,483 6,900,000 6,972,700 7,323,000 7,516,000
683,473 210,000 360,000 367,200 367,200 367,200
181,300 181,300 245,200 245,200 245,200
250,000
4,550,819
13,217,263 7,072,783 7,441,300
7,585,100 7,935,400
8,128,400
9,548,957
3,072,752
12,621,709
6,529,365
1,803,759
367,162
3,921,423
1,556,839
P. 14
(909,461) 809,869 2,502,264 2,566,869
12,621,709 11,712,248 12,522,117 15,024,380
11,712,248 12,522,117 15,024,380 17,591,250
3,679,788 3,790,182 3,903,887 4,021,004
3,600,000 3,300,000 2,050,000 800,000
1,803,759 1,803,759 1,803,759 1,803,759
350,000
2,278,701
$2,849,577
3,668,306 5,515,944 8,350,761
6,775,231 5,433,136 5,561,531
3,628,176 7,266,734 10,966,487
$500,000
$i,000,000
885,782 2,503,891 2,503,891 2,681,792 2,762,245 2,845,113
762,895 847,293 847,293 848,313 848,693 848,468
1,546,594 1,336,297 1,380,.000 1,394,540 1,464,600 1,503,200
175,423 2,849,577 1,500,000
297,612 408,463 350,000 350,586 357,598 364,750
420,000 420,000
REDEVELOPMENT AGENCY
EL CAMINO CORRIDOR PROJECT AREA
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Gross Tax Increment
Interest
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
1,839,434 1,980,275 1,789,571 1,954,000 2,060,000 2,111,000
18,881 5,250 5,250 5,000 5,000 5,000
1,858,315 1,985,525 . 1_,.794,82_1- . 1,959,000. 2,065_,000
2,11' 6,000
EXPENDITURES
Program Expenditures
Transfers Out - Low Mod Housing
Transfers Out - Capital Projects (1)
Pass Through Agreements
Advance Repayment / Interest (2)
Total Expenditures
151,083 271,966 221,966 380,325 369,921 381,018
367,887 396,055 357,914 390,800 412,000 422,200
750,779 100,000 250,000 540,000
420,045 493,683 393,683 519,353 529,740 540,335
250,000 250,000 100,000 250,000 250,000
1,689,794 1,511,704 1,473,563 1,930,478 1,561,661
1,593,553
Excess of Revenues
over (under) Expenditures
Fund Balance, Beginning of Year
Fund Balance, End of Year
Ail Reserved Funds
Unreserved / Undesignated
Fund Balance, End of Year
168,521 473,821 321,258 28,522 503,339 522,447
(962,855) (794,334) (473,076) (444,554) 58,785
(794,334) (473,076) (444,554) 58,785 581,232
130,113 35,000
(924~Z~47) . _.(508_,076) .(444,554) 58,785
581,232
Notes:
(1) Capital Projects:
Oak Avenue Extension $250,000 $540,000
(2) El Camino RDA has begun to generate a net surplus and can begin to pay back the General Fund and Downtown RDA
for the advances made over the last several years. As of 2/1/03, El Camino RDA owed $1,056,000.
P. 15
REDEVELOPMENT AGENCY
LOW & MODERATE HOUSING
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Transfers In - 20% Housing
Interest
Misc. Revenue / Rent
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
3,374,611 3,234,382 3,227,719 3,487,340 3,674,600 3,821,200
436,856 350,000 280,000 300,000 3i5,000 346,500
99,798 70,000 70,000 70,000 70,000 70,000
3,911,265 3,654,382 3,577,719 3,857,340
4,059,600
4,237,700
EXPENDITURES
Program Expenditures
Transfers Out - Debt Service
Transfers Out- Capital Projects (1)
Total Expenditures
409,262 908,687 908,687 1,606,098 1,654,281 1,703,909
294,179 294,020 294,020 293,425 292,525 291,348
3,000,000 1,000,000 1,000,000
703,441 1,202,707 1,202,707 4,899,523
2,946,806
2,995,257
Excess of Revenues
over (under) Expenditures
Fund Balance, Beginning of Year
Fund Balance, End of Year
Bond Funds, End of Year
Less:
, Loan Commitments to
Mid Pen and Other
Loans Receivable
All Other Reserved Funds
Unreserved / Undesignated
Fund Balance, End of Year
3,207,824 2,451,675 2,375,012 (!,042,183) 1,112,794 1,242,443
13,986,036 17,193,860 19,568,872 18,526,689 19,639,483
17,193,880 19,568,872 18,526,689 19,639,483 20,881,926
3,708,162 3,708,162 3,708,162 3,708,162 3,708,162
3,372,481 3,372,481 1,872,481 1,872,481 1,872,481
6,000,911 7,506,479 9,006,479 9,006,479
490,457 1,020,000
3,621,849 3,961,750 3,939,567 5,052,361
9,006,479
6,294,804
Notes:
(1) Capital Projects:
Miscellaneous Land Acquisition
San Mateo County Housing Project
$2.000,000
SI,C00,000
$1,000,000
$1,000,000
P. 16
ENTERPRISE FUNDS
Sewer Rental Fund
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
Operations:
Charges for Services 7,820,331 8,746,000 8,746,000 9,183,300 9,826,000 10,514,000
Other Cities 2,681,138 2,831,000 2,831,000 3,483,404 3,587,906 3,695,543
Connection Fees and Other 1,002,071 850,000 650,000 850,000 850,000 850,000
State Loan Proceeds 7,544,930 17,130,000 17,130,000
Developer Fees 189,357 250,000 314,000 150,000 150,000 150;000
Interest/Other income 193,138 84,360 84,360 84,360 95,800 62,000
Total Revenues
19,430,965 29,891,360 29,755,360 13,751,064 14,509,706 15,271,543
EXPENDITURES
Operating Expenses
Debt Service
Capital Expenditures
8,233,976 8,611,113 8,611,113 11,099,698 11,432,689 11,775,670
1,428,603 4,090,000 1,840,336 3,820,411 3,810,261 3,813,211
7,544,930 17,751,691 17,751,691 76,200 200,000 200,000
Total Expenditures
Net Income
Total Fund Balance
Encumbrances, End of Year
Emergency Capital Repairs Reserve
Undesignated Reserve,
End of Year 2,338,646
17,207,509 30,452,804 28,203,140 14,996,309 15,442,950 15,788,881
__.2_,223,456_ _ (561,~_4.~) .... 1,55_2~_220
3,417,610 4,969,830
1,078,964 670,000
(933,244) _ (5.!~,337)
3,724,585 2,791,341 2,274,004
500,000 750,000 1,000,000
4,299,830 3,224,585 2,041,341 1,274,004
The Sewer Rental Fund consists of: the Water Quality Control Plant Division, the Sewer Maintenance Division
in Maintenance Services, and planned Sewer capital project expenses.
The major priorities in capital are the proposed multi-year effort for inflow and infiltration work,
(the "Wet Wsather program") which will be funded by a new State Loan,
and capacity improvements in the East of 101 area, funded by developer impact fees.
P. 17
ENTERPRISEFUNDS
Parking District Fund
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Operations:
Parking Fees
Interest and Other
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
277,828 235,000 304,498 306,000 307,500 309,000
36,219 30,000 22,103 30,000 30,000 30,000
314,047 265,000 326,600 336,000
337,500
339,000
EXPENDITURES
Operating Expenses 215,241 220,117 220,117 188,647 194,306 200,136
Total Expenditures 215,241 220,117 220,117 188,647 194,306 200,136
Net Income 98,806 44,883 106,483 147,353 143,194 138,864
Undesignated Fund Equi~ * 988,300 1,094,783 1,242,136 i ,385,330 1,524,194
* (Net of Fixed Assets)
P. 18
ENTERPRISE FUNDS
Storm Water Fund
Summary of Revenues, Expenditures, and Changes in Fund Balance
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
REVENUES
Operations:
Service Charges
interest and Other
Total Revenues
395,534 398,410 398,410 398,410 398,410 398,410
18,928 20,000 20,000 20,000 20,000 20,000
414,462 418,410 418,410 418,410
418,410
418,410
EXPENDITURES
Operating Expenses
Budget Savings
Transfers Out to Capital
Improvement Fund
Total Expenditures
Net Income
Undesignated Fund Equity*
328,520 477,130 377,130 520,137
(100,000) (100,000)
75,000 75,000
328,520 452,130 452,130 420,137
85,942 (33,720) (33,720) (1,727)
253,489 219,769 218,042
535,741
(lOO,OOO)
435,741
(17,331)
200,711
551,813
(lO0,OOO)
451,813
(33,403)
1_67,30~
(Net of Fixed Assets)
1~.19
INTERNAL SERVICE FUNDS
Equipment Replacement Fund
REVENUES
Operating Budget Charges
Equipment
Operating Budget Charges
Vehicles
Lease Proceeds
Interest & Other Income
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
461,468 410,791 401,000 302,411
969,142 580,194 568,000 521,451
150,000
114,497 60,000 120,000 110,000
1,545,107 1,050,985 1,089,000 1,083,862
300,000
500,000
110,000
910,000
300,000
500,000
110,000
910,000
EXPENDITURES
Vehicle Replacement
Equipment Replacement
Lease Purchase (Vehicles)
Debt Service
Total Expenditures
Excess of Revenues
over Expenditures
Undesignated Reserve
Beginning of Year
Undesignated Reserve
End of Year
27¢,901 486,000 730,000
194,856 289,700 150,000
312,305 12,595 38,000
785,062 788,295 918,000
416,000
386,000
150,000
12,595
964,595
550,000
300,000
4,500
854,500
550,000
300,000
850,000
760,045 262,690 171,000 119,267 55,500 60,0~0
731,376 1,491,421 1,662,421 1,781,688 1,837,188
1,491,421 1,662,421 1,781,688 1,837,188
1,897,188
P. 20
INTERNAL SERVICE FUNDS
Equipment Replacement Fund
PROPOSED VEHICLE PURCHASES, 2003-04
Department / Division
Vehicle to be Purchased
Cost
Direct Purchases
Police
Police
Police
Police
Police
Police
Police
Police
Parks
Parks
Parks
Streets
Recreation
Supervisor's Vehicle
Supervisor's Vehicle
Patrol Sedan
Patrol Sedan
Patrol Sedan
Patrol Motorcycle
Parking Enforcement Vehicle
Investigations Vehicle
Mad Vac
Chipper Truck
Chipper
Truck
Bus
$ 31,000
31,000
28,000
28,000
28,000
15,000
21,000
24,OOO
30,000
60,000
25,000
35,000
60,000
Vehicle Replacement Total
$ 416,000
Lease Purchases
Fire
Ambulance
150,000
P. 21
INTERNAL SERVICE FUNDS
EQUIPMENT REPLACEMENT FUND
PROPOSED EQUIPMENT PURCHASES, 2003-04
Department / Division
Equipment to be Purchased
Cost
City Cterk
City Clerk
Finance
ECD -- Planning
ECD -- Building
ECD -- Building
Fire -- Administration
Fire -- Suppression
Police
Police
Police
PW -- Engineering
PW -- Engineering
PW -- Engineering
PW -- Engineering
Recreation
Recreation
Recreation
Recreation
Maintenance
Maintenance
Library
Library
Library
2 PCs
1 Laptop
Battery Backups
1 Laserjet Printer
3 PCs
1 Laserjet Printer
1 PC
5 Air Paks
10 PCs
8 Laptops
2 Midrange Unix Servers
8 PCs
1 Laserjet Printer
1 Plotter
Software
Play Equipment
15 PCs
1 Laserjet Printer
1 Workstation
7 PCs
1 Laserjet Printer
30 PCs
1 Laptop
1 Laserjet Printer
Equipment Replacement Total
2,500
2,800
1,000
1,950
6,000
1,950
2,000
16,000
20,000
22,400
130,000
16,000
1,950
4,800
7,900
30,000
30,000
1,950
6,100
14,000
1,950
60,000
2,8OO
1,950
$ 386,000
* Includes one server carried over from FY2002-03.
P. 22
INTERNAL SERVICE FUNDS
CITY SERVICE FUNDS
Vehicle Maintenance
REVENUES
Charges to Departments
Interest & Other Income
Total Revenues
EXPENDITURES
Salaries & Benefit
Materials & Services
Debt Service & Other
Total Expenditures
Excess of Revenues
over Expenditures
Undesignated Reserve
Beginning of Year
Undesignated Reserve
End of Year
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03' 2002-03 2003-04 2004-05 2005-08
961,783 1,090,500 1,000,000
6,176 5,000 3,000
967,959 . _1,095,5_00 1,003,000
464,262 552,359 432,000
580,678 530,158 526,900
639 3,883 4,600
1,045,579 1,086,400 963,500
(77,620) 9,100 39,500
53,227 (24,393)
(24,393) 15,107
1,059,287 1,091,421 1,132,028
1,059,287 1,091,421 1,132,028
560,244 593,859 629,490
492,636 497,562 502,538
1,052,880 1,091,421 1,1 32,028
6,407
15,107 21,514 21,514
21,514 21,514
21,514
P. 23
INTERNAL SERVICE FUNDS
CITY SERVICE FUNDS
Communications
Actual * Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
REVENUES
Charges to Departments 1,630,000 1,667,750 1,667,750 1,815,606 1,884,663
Interest & Other Income 10,467 7,000 3,869
Total Revenues 1,640,467 1,674,750 1,671,619 1,815,606 1,884,663
EXPENDITURES
Salaries & Benefit 1,160,940 1,244,087 1,153,200 1,296,221 1,373,994
Materials & Services 469,388 501,! 15 384,000 505,613 510,669
Transfers Out to
Other Funds 233,469 43,131
Total Expenditures 1,883,797 1,745,202 1,580,331 1,801,834 1,884,663
Excess of Revenues
over Expenditures (223,330) (70,452) 91,288 13,772
Undesignated Reserve
Beginning of Year 290,974 67,644 158,932 172,704
Undesignated Reserve
End of Year 67,644 158,932 172,704 172,704
* 2001-02 amounts include Telephone Maintenance program, shown separately beginning 2002-03.
1,972,210
1,972,210
1,456,434
515,776
1,972,210
172,704
172,704
P. 24
INTERNAL SERVICE FUNDS
CITY SERVICE FUNDS
Building Maintenance
REVENUES
Charges to Departments
Interest & Other Income
Total Revenues
EXPENDITURES
Salaries & Benefit
Materials & Services
Total Expenditures
Exoess of Revenues
over Expenditures
Undesignated Reserve
Beginning of Year
Unde¢ignated Reserve
End of Year
Actual 'Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
1,638,045 1,634,1 80 1,634,1 87
10,519 7,000 4,000
1,648,564 1,641,180 1,638,1 87
973,652 1,059,807 986,400
832,034 772,015 732,000
1,805,686 1,831,822 1,71 8,400
(157,122) (190,642) (80,213)
86,757 (70,365)
(70,36_5.)
(150,578)
1,902,391
1,902,391
1,1 02,323
794,027
1,896,350
6,041
(150,578)
__(1.44,537)
1,970,430 2,048,557
1,970,430 2,048,557
1,168,462 1,238,570
801,967 809,987
1,970,430 2,048,557
(144,537 (144,537)
(144,5_3_7 _ _(~1.44,537)
P. 25
INTERNAL SERVICE FUNDS
CITY SERVICE FUNDS
Information Technology
REVENUES
Charges to Departments
Interest & Other Income
Total Revenues
EXPENDITURES
Salaries & Benefit
Materials & Services ,
Capital Outlay
Total Expenditures
Excess of Revenues
over Expenditures
Undesignated Reserve
Beginning of Year
Undesignated Reserve
End of Year
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
1,406,889 1,466,772 1,530,002
1,406,889 1,466,772 1,530,002
542,092 636,882 690,000 916,274 971,250
416,255 592,827 450,000 490,615 495,521
34,393 -
992,741 1,229,709 1,140,000 1,406,889 1,466,772
NA NA NA
1,029,525
500,476
1,530,002
The Information Technology Department was converted to an Internal Service Fund beginning in 2003-04.
P. 26
INTERNAL SERVICE FUNDS
CITY SERVICE FUNDS
Telephone System Maintenance & Replacement
REVENUES
Charges to Departments
Interest & Other Income
Total Revenues
EXPENDITURES
Salaries & Benefit
Materials & Services
Debt Service & Other
Total Expenditures
Excess of Revenues
over Expenditures
Undesignated Reserve
Beginning of Year
Undesignated Reserve
End of Year
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
133,325 8,413 8,413 45,029
856 1,000 2O
134,181 9,413 8,433 45,029
39,715 44,641 42,000 44,024
5,279 88,685 88,685 -
44,994 133,326 130,685 44,024
89,188 (123,913) (122,252) 1,005
44,464
44,464
44,464
44,464
44,909
44,909
44,909
44,909
304,919 394,107 271,854 272,859 272,859
394,107 271,854 272,859
272,859
272,859
Note:
2001-02 amounts for Telephone Maintenance program were shown in Communications Division.
P. 27
SPECIAL REVENUE FUNDS
Gas Tax Fund
Summary of Revenues, Expenditures, and Changes in Fund Balance
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
REVENUES
Gas Tax 1,092,668 1,211,000 1,21 0,642 1,247,000 1,271,900 1,297,300
Traffic Congestion Relief 153,678 150,000 68,920
Interest / Other Income 63,874 45,000 44,000 40,000 30,000 29,000
Total Revenues 1,310,220 1,406,000 1,323,562 1,287,000 1,301,900 1,326,300
EXPENDITURES
Transfers Out to General Fund for
Street Maint/Gen. Engineering
Transfers Out to General Fund for
Congestion Relief
Transfers Out to CIP Fund
Total Expenditures
Net Income
Designated for Street
Improvement Capital Projects
538,616 808,000 808,000 855,900 850,000
119,600 150,000 150,000 150,000 150,000
562,992 879,000 1,973,376 399,000 300,000
1,221,208 1,837,000 2,931,376 1,404,900 1,300,000
89,012 (431,000) (1,607,814) (117,900) 1,900
850,000
150,000
300,000
1,300,000
26,300
1,782,192 174,378 56,478 58,378 84,678
P. 28
SPECIAL REVENUE FUNDS
Measure A Fund
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Measure A Sales Tax
Interest / Other Income
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
893,316 919,000 858,531 867,100 884,000
69,350 50,000 50,000 40,000 34,000
962,666 969,000 908,531 907,100 918,000
902,OO0
34,000
936,000
EXPENDITURES
Transfers Out to CIP Fund for
Street Improvement Projects
Total Expenditures
Net Income
Designated for Street
Improvement Capital Projects
928,634 1,065,000 2,400,284 937,000
928,634 1,065,000 2,400,284 937,000
34,032 (96,000) (1,491,753) (29,900)
950,000
950,000
(32,000)
1,654,457 162,704 132,804 100,804
950,000
950,000
(14,000)
86,804
P. 29
SPECIAL REVENUE FUNDS
Community Development Block Grant Fund
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
CDBG Entitlement
Program Income
HOME Investment Partnership
Interest / Other Income
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
666,379
20,287
686,666
748,000 748,000 747,000 747,000 747,000
173,439 173,439 92,854 95,000 95,000
22,620 22,620 22,500 22,500 22,500
12,000 12,000 12,000 10,000 10,000
956,059 956,059 874,354
874,500
874,500
EXPENDITURES
CDBG Program EXpenditures
Transfers Out to General Fund
Total Expenditures
Net Income
Designated for CDBG Programs
674,446
36,000
710,446
(23,780)
(243,237)
842,051 1,102,051 826,354
86,000 86,000 36,000
928,051 1,188,051 862,354
28,008 (231,992) 12,000
(4~5,229) (463,229)
826,354
36,000
862,354
12,146
(451 ,.0~)
826,354
36,000
862,354
12,146
(438,937
* Negative fund balances reflect lag in funding from CDBG reimbursement basis).
P. 30
SPECIAL REVENUE FUNDS
Common Greens Maintenance Districts
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Property Taxes
Other Income
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002~03 2002-03 2003-04 2004-05 2005-06
890,774 848,000 902,300 903,000 903,000 903,000
31,130 4,500 5,500 5,500 5,500
921,904 848,000 906,800 908,500
908,500
908,500
EXPENDITURES
Maintenance Expenditures
Transfers Out to Capital
Improvement Fund
Total Expenditures
Net Income
Designated for Common Green
Maintenance and Capital Impr
589,441 669,546 669,546 852,763 878,346
142,500 142,500 100,000 100,000
589,441 812,046 812,046 952,763 978,346
332,463 35,954 94,754 (44,263) (69,846)
2,401,843 .2,496,5_97 _ 2,452,334
2,382,488
904,696
100,000
1,004,696
(96,196)
2,286,292
P. 31
SPECIAL REVENUE FUNDS
Solid Waste Fund
Summary of Revenues, Expenditures, and Changes in Fund Balance
REVENUES
Franchise Fee Revenue
State Grant
Total Revenues
Actual Adopted Estimated Proposed Estimated Estimated
2001-02 2002-03 2002-03 2003-04 2004-05 2005-06
238,325 173,325 173,325 173,325
35,020
238,325 173,325 208,345 173,325
173,325
173,325
173,325
173,325
EXPENDITURES
Operating Expenditures
Transfers Out to Capital
Improvement Fund
Total Expenditures
Net Income
Designated for Solid Waste
Reduction Purposes
157,676 185,930 220,950 166,988 171,977 177,136
17,500 17,500 400,000
157,676 203,430 238,450 566,968 171,977 177,136
80,649 (30,105) (30,105) (393,643) 1,348 (3,8I 1)
679,008 648,903 255,260
256,608
252,797
P. 32
SPECIAL REVENUE FUNDS
Miscellaneous Other Special Revenue Funds
Summary of Revenues,.Expenditures, and Net Income
Proposed Budget, 2003-04
REVENUES
Donations
Raffle Ticket Sales
Company Payments
Other City Contributi°ns
Total Revenues
Day in Commute HR Air Truck
the Park Reduction Consortium JPA
Programs
85,000 6,500
25,000
370,000
110,000 376,500
29,000
29,000
9,000
9,000
Total
Proposed
2003-04
91,500
25,000
370,000
38,000
524,500
EXPENDITURES
Day in the Park
MTSM Shut[les
Downtown Dasher
Joint City Human Resources Expenses
Vehicle Maintenance
Transfer Out to General Fund
Total Expenditures
Net Income
104,000
6,000
110,000
370,000
6,500
376,500
29,000
29,000
8,000
8,000
1,000
104,000
370,000
6,500
29,000
8,000
517,500
7,000
P. 33
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P. 44
SUMMARY OF POSITION CHANGES 2002-03 2003-04 Change
Amended Proposed in FTE
The following positions have been frozen as part of the 2003-04 budget process:
Department Positions
City Clerk
City Manager
Human Resources
Information Tech
E&CD
Office Specialist (Part-time) 0.50 (0.50)
Director of Community Outreach 1.00 0.80 (0.20)
Personnel Technician (Contract) 1.00 (1.00)
Support Coordinator 1.00 - (1.00)
Fire
Police
Planning Associate Planner
Building Inspection Assistant Building Official
1.oo - (1.oo)
1.o0 - .(1.0o)
Fire Prevention Senior Code Enforcement Officer 1.00 -
Fire Inspector II 3.00 -
(1.00)
(3.OO)
Services Police Services Technician 5.00 4.00 (1.00)
Records Police Records Specialist 5.00 4.00 (1.00)
Communications Communications Dispatcher 10.80 9.80 (1.00)
Public Works
Engineering City Engineer 1.00 (1.00)
Associate Engineer 2.00 1.00 (1.00)
Maintenance Services
Building Maintenance Building Maintenance Custodian 9.00 8.00 (1.00)
Library Part-Time Hours (as FTEs) 21.89 18.69 (3.20)
Recreation Superintendent of Recreation 1.00 (1.00)
Part-Time Hours (as FTEs) 54.33 51.48 (2.85)
TOTAL FROZEN POSITIONS (21.75)
frozen
voluntary reduction
frozen, exchanged for houflies
vacant, never filled
vacant
vacant, never filled
vacant
vacant
vacant
retirement
vacant
vacant
vacant
vacant
reduced hours
vacancy from promotion
reduced hours
P. 45
City of South San Francisco
Proposed Reserves Policy
2003-04
The purpose of this report is to respond to a request from the City Council for information that
would allow the Council to review the status of the City' s financial reserves, and to establish a
reserves policy. A recommendation is given, followed by a summary table, and then a detailed
discussion.
RECOMMENDATION:
It is recommended that the City Council review staff' s proposal for a Reserves Policy, give
any feedback, and direct staff to return with any changes in order to adopt a Reserves Pohcy as
part of the 2003-04 Budget Adoption in June.
Staff recommends the following reserve levels:
Fund the following General Fund Reserves for a total of between 10-20% of the General
Fund budget with the following targets:
- Reserve for Emergencies in the General Fund at approximately $1.0 million, or about
2% of the General Fund operating budget;
Reserve for Economic Contingencies in the General Fund at approximately 7% of the
General Fund operating budget, or roughly $3.5 million;
- Maintain the General Fund Undesignated Reserve at no less than 4% of the General
Fund operating budget, or about $2.0 million.
Evaluate the Desig-nated for Future Economic Development Projects Reserve ($3.6
million) after the State budget for 2003-04 has been approved, and the full impacts from
the State on the City are known.
The General Fund is projected to have about 22% of the operating budget in reserves in 2003-
04, which is more than the 20% higher end of the recommended target range. However,
because PERS rates will be escalating dramatically over the next five years, staff expects that
reserves will be drawn down over that time period, and that General Fund reserves will then
be within the recommended target range.
Staff further recorm-nends for other City funds:
Sewer Fund Reserves of at least half the annual debt service requirement, or $2.0 million.
This is a realistic target as the City looks at rates over the next several years;
P. 46
City of South San Francisco
Proposed Reserves Pohcy
2003-04
Page 2
Self Insurance Reserve funding equivalent to approximately 50% of the est/mated self-
insurance liability. The City is within this target range;
A gradual draw down on the Benefits Reserve to help pay for enhanced reth'ement
benefits over the next five years at approximately $1.0 million per year.
SUMMARY:
A summary of Reserves covered in this memo is listed below.
Fund/Reserve
General Fund/
Reserve for
Emergencies
General
Fund/Economic
Contingencies
General
Fund/Undesignated
Reserve
General
Fund/Reserve for
Future Capital
Projects
General
Fund/Designated
for Future
Economic
Development
Project
Sewer
Fund/Emergency
Capital Repairs
Fund
Reserve Target Recommendation
$1.0 million/2% of General Fund
operating budget
$3.5 million/7% of General Fund
operating budget
$2.0 million/4% of General Fund
operating budget
No recommendation.
No target. Reserve is a result of the
Downtown Redevelopment Fund
paying back some advances to the
City. Recommended to be held
until State budget impact is known.
Could be used in future for Oalc
Ave. Extension construction, ff
Council approves, or for
aug-menting the capital program
over several years.
Up to $4.7 mill/on by 2015,
representing State requirement that
.5% of total State Water Resources
Control Board Loan Amount be set
aside each year for 10 years.
Stares as of 2003-04/Does Reserve
Fall within Target
Recommendation?
$1.0 million/MeeB Target
$3.5 mglion/Meets target
$6.9 million/Exceeds target in 2003-
.04, but will be drawn down over the
next 3-5 years as PERS reth-ement
costs increase
No reserve is funded, but see also the
next reserve below.
$3.6 million
$500,000/Meets target
P. 47
City of South San Francisco
Proposed Reserves Pohcy
2003-04
Page 3
Fund/Reserve
Sew~
Fund/Operating
Cash Flow Reserve
Parking Fund
Storm Water Fund
Self Insurance
Fund/Reserve for
Self Insurance
Benefits
Fund/Reserve for
Benefits
Reserve Target Recommendation
Half a year's annual debt service,
or $2.0 million for 2003-04. (The
$2.0 million target includes the
equipment reserve above).
No recommendation
No recommendation
Maintain a cash balance that funds
50% of the expected level of future
workers' compensation and general
liability costs.
No target recommended. Staff has
recommended that this reserve be
drawn down over the next 5 years
to help pay for increased PERS
retirement costs.
Status as of 2003-04/Does Reserve
Fall within Target
Recommendation?
$3.2 million/exceeds target but will
decrease over the next 2-3 years as
operating budget expenses and debt
service increase.
$1.2 million, may be used for future
downtown parking projects.
$218,000; will decline to $0 over the
next 3-5 years as capital projects are
undertaken, unless legislation is
passed which allows cities to raise
storm water fees more easily. Current
requirement is for a 2/3-voter
approval.
$ 2.9 million/approximately 56% of
the estimated liability of $5.2 million.
Slightly'higher than target, but as
worker's compensation costs continue
to rise, should be at target level in 1-2
years.
$4.4 million as of 6/30/03, should
reach $0 by 2007-08.
The remainder of this report discusses the reserves in more detail.
P. 48
City of South San Francisco
Proposed Reserves Policy
2003-04
Page 4
DISCUSSION:
General Fund Reserves:
Reserve for Emergencies:
A Reserve for Emergencies would be used to cover unanticipated costs not funded elsewhere.
For the most part, except for eazthquakes, the City's self insurance policy with ABAG would
cover equipment that is damaged, after the City pays a deductible. Except for catastrophic
losses due to earthquakes, therefore, the City is probably the most vulnerable not primarily
from costs associated with damages to physical assets, but rather from lawsuits. Lawsuits are
not covered in the City's ABAG policy. In the past five years, the City settled a large lawsuit
that ended up costing $2.3 million. That was an extraordinary occurrence, and staff believes a
prudent reserve for emergencies might therefore be $1.0 million, representing exposure to
general city lawsuits.
Summary: It is recommended that the City Council adopt a policy for funding Reserve for
Emergencies at $1.0 million, or 2% of the General Fund budget. Staff will also obtain quotes
from A_BAG to determine the cost impact of insuring key City facilities from damages due to
earthquakes. It may be cost prohibitive to do so.
Reserve for Economic Contin,_c, encies:
A reserves policy should address at least two potential situations in which the City's revenue
would be negatively impacted by economic downtums. They are local fluctuations in revenue
and revenue shifts by the State.
Revenue Fluctuations:
Given vulnerabil/ty to local economic conditions, as well as susceptib/lity to business
relocations, some cities set aside a reserve as a percentage of their revenue budget (or,
expenditure budget). The idea is to either cover the City's budget in times of economic
downmt-n for a period of year (or more), or to support the City in between major business
relocations. An example of the latter is if a major sales tax generator left town.
By setting aside reserves for revenue fluctuations, services don't have to be immediately cut
while a more comprehensive budget strategy can be put together, or until a new sales tax
generator comes to town. The larger the reserves, the longer General Fund services can be
preserved, or only slightly mod/fled, without having to cut the budget.
Several facts should be considered for South San Francisco in looking at how much to set
aside. Within the City's top 5 sales tax generators, one is a sales .office for Bay Area wide
P. 49
City of South San Francisco
Proposed Reserves Policy
2003 -04
Page 5
sales of its product. It would be easy for that office to relocate outside of South San Francisco
to somewhere else in the Bay Area, since its product is disbursed throu~out the Bay Area,
and because its sales office is small and easily movable. (Confidentiality requires that neither
firm's name nor its product be divulged here). That office generates approximately $800,000
annually in sales tax to South San Francisco. A reserves policy could therefore stipulate that
the City always preserve at least 1.5 years of this revenue in reserves, as it could easily take at
least this amount of time to fred a suitable replacement sales tax generator, or to downsize the
budget to accommodate the loss.
Another factor to consider is that business-to-business sales tax comprises roughly 1/3 of
South San Francisco's Sales Tax base. Business sales are also more volatile than
retail/consumer sales. In fact, the City has realized a $1.0 million decline, or 20%, in
business-to-business sales for the most recent four quarters for which data is available (the
year ending in the fourth quarter 2002 compared to year ending in the fourth quarter 2001). A
reserves policy could therefore stipulate that the City set aside $1.0 million for a 20% decline
in business-to-business sales tax as protection for economic downturns.
Revenue Shifts Arising from Other Governments' Actions:
The ERAF (Educational Revenue Au~m-nentation Fund) shift by the State beg~_nning in the
early 1990's has permanently shifled about $2.0 million annually (and growing) in property
tax dollars away from South San Francisco to the State. The State uses ERAF dollars to fund
its constitutionally mandated education obligations. This represents almost 20% of our
General Fund property tax revenues. The State could, ~ven the current economic downturn,
look again to local governments to make up for State budget shortfalls. Vehicle License Fee
baclcf'2l revenue is probably the most vulnerable to'State whim, and it represents $2.7 million
in next year's budget. Note tha~'~ revenue shift by the State is most likely to occur during
times of already economic hardships, meaning that the City would be hit twice under such an
event: once for the economic impacts of a recession and once again by the State. A reserve
policy would set aside a prudent amount to cover a new revenue shift for a period of one or
more years.
Summary: it is recommended that the Council adopt a reserves policy that desi~ates the
following:
18 months of funding for the potential loss of major sales office relocation, or $1.2
million;
~ $1.0 million, or 20% of business-to-business sales tax;
$1.3 million, representing an amount susceptible to a State revenue shift equal to about
half of the Vehicle License Fee backfill from the state. (Staff believes this level of revenue
P. 50
City of South San Francisco
Proposed Reserves Policy
2003434
Page 6
shift is highly possible, and that it is unlikely that the City would be vulnerable to a
revenue shift equal to a 100% reduction in the VLF).
Taken together, these items represent a total of a total of about $3.5 rn~]lion be held in a
Reserve for Economic Contingencies, coveting economic downtums and/or revenue shifts
from the State, or approximately 7% of the General Fund operating budget. Staff therefore
recommends that a reserve policy state that the City strive to maintain the Reserve for
Economic Contingencies, with a target of 7% of the General Fund revenues.
Reserve for Future Capital Projects:
Some cities set aside dollars on an annual basis to fund capital or infrastructure improvements.
One use of reserves is therefore a savings account for specific future needs (library, f~re
station, etc.), or as a savings account to fund ongoing public infrastructure improvements in
the annual capital improvement plan budget (parks, streets, building improvements, etc.) The
City has no such reserve at this time other than the funds designated for future economic
development projects (below). Given the budget situation, it is not recommended that the City
attempt to build up savings for capital improvements, because that would require additional
operating budget cuts. However, it may be appropriate to re-look at this area in the future,
after the recession has ended and the City has absorbed all future retirement cost increases.
The latter is expected to reach a plateau in approximately 4-5 years.
Related to caPital projects, the Council designated $3.6 million in funds in January 2003 that
had been paid back to the General Fund by the Redevelopment Agency for prior period
advances from the City, to be set aside for now and not used. Those funds will be designated
on the financial statements as of June 30, 2003 under the title "Designated for Future
Economic Development Projects," although the Council could use the funds for any purpose.
Staff recommends that the status of this Reserve should be evaluated after the State budget for
2003-04 has been passed and its impact on the City is known. No recommendation is made
regarding this reserve at this t/me. If the State budget does not result in a significant revenue
shift for the City in the summer and fall, the Council could use these funds to advance to the
E1 Camino RDA to pa3' for the construction of the potential Oak Avenue extension project, ff
that project moves forward. Altemat/vely, the funds could be used over time to augment the
capital program to improve city facilities and infrastructure (parks, streets, buildings).
Undesi~ated Reserve:
This is the General Fund reserve that would be funded or drawn from last during the fiscal
year end close process after the other reserves had been funded, with the source being any net
revenue produced that year in the General Fund.
TI'tis reserve would be the source of funding for any midyear budget amendments, and that is
the primary purpose t?ds reserve would serve. The largest midyear budget amendment in
P. 51
City of South San Francisco
Proposed Reserves Policy
2003 -04
Page 7
recent years in the General Fund was for $1.8 million in 1999-00 to fund the Hilton Hotel Site
Remediation costs. Given that that was three years ago, with inflation a prudent reserve level
would therefore by closer to $2.0 million.
Summary: It is recommended that the Undesignated Reserve be funded at a minimum of $2.0
million at all times, or 4% of the General Fund.
The following might be the starting place for a reserves policy discussion for South San
Francisco's General Fund:
A reserve for emergencies of $1.0 million seems prudent as a hedge against lawsuits or
other emergencies.
A reserve for economic contingencies of $3.5 million would allow the City to function
normally for 1-2 years during an economic downturn, including absorbing revenue raids
by the State equivalent to a 50% Vehicle License Fee reduction.
An undesignated reserve balance of at least $2.0 million, to cover midyear budget
amendments.
Taken together, this would suggest an overall' General Fund discretionary reserves level of at
least $6.5 million, or 13% of General Fund budget. A reserves policy mi~mht therefore call for
a range of reserves of between 10-20% of the General Fund budget.
The General Fund is estimated to have the following discretionary reserve balances for the
2003-04 budget:
Reserves for Emergencies:
$ 1.0 million
Reserve for Economic Contingencies:
$ 3.5 million
Undesignated Reserve:
$ 6.9 mill/on
Total
$11.4 million or 22% of General Fund
Staff believes these are appropriate reserve levels, and projections indicate that the
Undesig-nated Reserve will likely be drawn down in the next 3-4 years to minimum levels,
along with the Benefits Reserve, as PERS rates rise over that t/me period.
P. 52
City of South San Francisco
Proposed Reserves Policy
2003-04
Page 8
· Not Covered:
Besides setting aside dollars for future capital improvements, discussed above, the other major
area that is not addressed by this recommended reserves policy is setting aside funds for major
software replacements. Two examples include:
the City's financial system is about 18 years old, and no longer functions the way
more modem systems function. Funds had been budgeted for tkis replacement, but
due to the budget situation, this purchase will be deferred to preserve cash;
t/~e City's computer aided dispatching system no longer keeps up with the functional
requirements of dispatching, and does not interface well with an automated records
management system. As of tiffs writing, staff is still evaluating the availability of grant
funds for this purchase.
Given the current budget problems facing the city, it is not recommended that the City attempt
to fund a new software replacement program at this t/me. That would require additional
operating budget reductions. Instead, the city will maintain its current practice of attempting
to fund critical needs as part of the capital budget process, as funding is available.
Redevelopment Funds:
State redevelopment law requ/res Redevelopment Agencies to incur debt and undertake
capital improvements to remove blight. Therefore, as' tax increment rises in a particular City
Redevelopment project area (Downtown, Gateway, Shearwater, E1 Camino), at the point
where staff believes an ongoing surplus exists in that particular RDA Fund, staff will evaluate
the feasib/lity of selling additional tax increment bonds as a way of incurring more debt and
funding additional RDA capital projects. Therefore, staff believes that no financial reserves
target needs to be established for the RDA project areas. Staff projects that the undesi~ated
fund balances available in those project areas as of 2003-04 will be:
Downtown:
$3.6 million, with an additional $3.8 million in available
bond funds
Gateway:
$1.8 million in available bond funds
· Shearwater:
-$1.2 m/Il/on, representing the amount still due to other
City funds for pr/or year advances
· E1 Cam/no:
-$ .4 m/il/on, representing the amount still due to other
City funds for prior year advances
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Proposed Reserves Pohcy
2003 -04
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Low Moderate Housing:
$3.9 million, with an additional $3.7 million in available
bond funds.
Equipment Reserves:
As is a common city budgeting practice, South San Francisco plans for its replacement of
equipment and vehicles. For several years, it has funded the replacement of capital equipment
over $5,000 plus all computer equipment for General Fund departments through charging
departments an annual replacement charge. The accumulated replacement charges are then
used to fund the equipment replacement when that piece of equipment has reached the end of
its useful life. All vehicles are handled in this way with the exception of major vehicles;
large/expensive vehicles, such as fire trucks, are funded through tax-exempt lease purchase
arrangements, with payments typically occurring over 7-10 years. That is because these
vehicles are so expensive that is more practical to fund them with lease payments over a 7-10
year time frame.
Staff believes the equipment reserve is adequately funded. It has a projected fund balance of
$1.8 mi lli on as of 6/30/2004. Consistent with accounting standards, the equipment fund does
not cover Enterprise Funds, which are expected to fund their own vehicle and equipment costs
through charges to users. The City's Enterprise Funds are the Sewer, Parldng, and Storm
Water Funds.
Sewer Fund Reserves:
The Sewer Fund is an Enterprise Fund, that is, completely funded by charges to sewer users
via the property tax bill. Two areas of sewer fund reserves are identified below. They are for
emergency capital equipment repairs and for operating cash flow needs.
Emergency Capital Equipment Repairs Reserve - A Treatment Plant operation is by its very
nature capital intensive. It requires a series of expensive public works facilities including
pipelines, manholes, pump stations, and treatment structures and equipment. These facilities
cost many millions of dollars and are subject to constant use under potentially hazardous
conditions. In the event of a breakdown or equipment failure, the City is legally obligated to
instigate repairs under emergency conditions if necessm-3,. A source of emergency funding is
required, and therefore an emergency repair reserve is an efficient method of funding
emergency repairs.
As a condition of accepting low interest loans from the State to finance the Treatment Plant
up~ade, the State requires that the City set aside .5% of loan proceeds in a capital reserve
fund each year over 10 years. With the $50 million loan for the Treatment Plant and the
pending $44 mil/ion loan for the Wet Weather program, this reserve will equal approximately
$500,000 as of June 30, 2003, and will grow to approximately $4.7 million by 2015.
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City of South San Francisco
Proposed Reserves Policy
2003 -04
Page 10
Operatinz Cash Flow Reserve- The City receives most of its sewer revenues twice a year after
the County collects them on the property tax bill, while expenses occur throu~out the year.
The City's cash is pooled, meaning any source of available cash may be used to pay bills for
any fund within the City within a fiscal year. Therefore, for regular operating expenses, even
thou~ the Sewer Fund only receives its major revenue twice a year, it is not unreasonable for
it to draw on pooled cash from other funds. However, this is a problem if there are large (over
$1.0 million) expenses.
As long as the Sewer Fund's large capital expenses are funded through bonds and/or State
Revolving Fund loans, with funding either up kent or reimbursed on a re~lar basis, there is
no ongoing cash flow problem for the capital program. Therefore, the largest cash flow need
for the Sewer Fund is annual debt service. Staff recommends that enough reserves be on hand
to fund half a year's debt service. For 2003-04, half of annual debt service is $2.0 million.
In summary, staff believes that the Sewer Fund's reserves should total at least half a year's
debt service, and that any funds built up in the emergency capital equipment reserve required
by the State could be counted towards that internal reserve reqah'ement. That is, both Sewer
Fund reserves could be looked at together, with a minimum of $2.0 million targeted to be
maintained across both reserves in 2003-04. Staff projects that the Sewer Fund will have
approximately $3.2 million in both reserves as of 6/30/04, but that that balance will be drawn
down to cover higher operating and debt service costs in the upcoming 2-3 years.
Parkin~ Fund:
The Parking Fund covers the maintenance of downtown parking lots as well as the
maintenance and replacement of downtown parking meters. The Economic and Community
Development Department, which manages the Parking Fund, has begun a multi-year
equipment replacement plan to replace the downtown parking meters. The Parking Fund is
projected to have $1.2 million in reserves as of 6/30/04, which may go towards the future
purchase of land for additional parking lots or to help fund the construction of a parking
garage downtown. Staff beheves the Parking Fund is adequately funded for its ongoing
operations and maintenance.
Storm Water Fund:
The Storm Water fund, which pays for repairs to the City's storm drain system, is funded
though property tax assessments, wh/ch cannot be raised without a 2/3 vote of the electorate.
The Fund is projected to have $218,000 in reserves in this fund as of 6/30/04, with ongoing
maintenance costs about using up each year's total property tax revenue. This means that any
capital projects will gadually erode into the fund balance, eventually reaching zero.
Due to the vote constraints, this fund will continue to be constrained, and the General Fund
will continue to be vulnerable to make up for capital needs here. As part of the ongoing
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City of South San Francisco
Proposed Reserves Policy
2003-04
Page 11
budget discussions, the Council could consider some type of vote of the electorate to fund
long-term storm water capital improvements. It should be noted that the Le~slature is
considering lowering the voter-approval threshold for storm water votes, but it is not clear ff or
when this will be acted upon. It is possible that as National Pollution Discharge Elimination
System (NPDES) non-point source requirements become more stringent, there will be
additional pressure on the legislature to loosen the voter requirements to pay for those
mandates.
Reserves for Self Insurance and Benefits:
S eft Insurance:
South San Francisco is serf insured, with general 1/ability and property damage covered by the
Association of Bay Area Governments (ABAG) liability pool, with a deductible of $100,000,
and coverage up to $7.0 mill/on per incident, likely rising to $10 million in 2003-04. The
City's budget for claims is currently $450,000 per year, With another $200,000 budgeted for
the legal costs associated with those claims. What is not covered in the annual budget is any
impact from a large lawsuit. For that reason, the City has a Reserve for Emergencies set up in
the General Fund (see discussion under General Fund Reserves above).
South San Francisco is also serf-insured for worker's compensation coverage, with an excess
insurance policy with a deductible of $1,000,000 for worker's compensation cia/ms up to
$10,000,000 for each occurrence. This area, worker's compensation, is where staff believes
the City' s exposure is greatest in a typical year, that is, in a year where no extraordinary
lawsuits occur. The current budget contains $500,000 for injury pay and $600,000 for
worker's compensation claims, or $1.1 million. Last fiscal year, the actual expenditures for
worker's compensation included $397,000 on injury pay expenses and $728,000 on worker's
compensation claims, or total of $1.1 million.
For the last several years, the Finance Department has had an internal fmancial funding
practice of striving to fund the value of estimated future worker' s compensation and general
liability claims at 50% of the expected ultimate value of those claims.. A 100% funding level
seems very conservative, and is not recommended because the value of all of those claims
would not be paid out all at once, but more likely would occur over several years. In addition,
not all claims end up being paid out according to the total amount set aside by the claims
managers. Finally, the estimate of how many claims are outstanding is a changing estimate,
so a 50% funding seems appropriate to staff. Based on the recent actuarial analysis by
Milliman Associates, by year-end 2002-03, the City will have $ 3.0 million reserved, or
approximately 54% of the estimated liability of $5.6 million for worker's compensation and
general liability. Staff believes this is adequate.
Benefits:
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City of South San Francisco
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2003-04
Page 12
The City's practice for some time has been to pay for benefit expenses such as health,
retirement, dental, and vision out of a central fund, and then charge each department for the
cost of the benefit expenses for the employees in that department. In the early 1990's PERS
rates started to decline. South San Francisco, like many other cities, kept its practice of
charging department budgets at the historical PBRS rates, while paying PERS the lowered
rates required. Like many. other cities, South San Francisco then was able to accumulate
PERS savings in the central City Benefits fund. The propose of accumulating dollars in this
fund was to be able to absorb PERS rate increases or pay for benefit enhancements approved
by the City Council out of that fund, as well as to smooth budget fluctuations over time. The
balance in the benefits reserve is projected to be $4.4 million as of 6/30/03.
Due in part to the negative P'ERS investment earnings in 2001 and 2002, and also due to
enhanced retirement benefits granted to Public Safety employees as well as the potential for
2.7% at 55 for Misc. employees in the near future, PERS rates are expected to increase from
0% (last year) to:
36-38% by 2005-06 for Public Safety ($5.5 million in additional costs to the General
Fund prior to pending budget reductions to be considered by the Council); and
18% by 2005-06 for Misc. (non-Safety) employees ($3.1 million in increased costs to the
General Fund, again, prior to pending budget reductions to be considered by the Council).
As a result, staff recommended to Council in a study session in November 2002 that the
balance in the PERS reserve be drawn down gadually over the next five years at
approximately $1.0 m/l/ion per year, as a way to smooth the upcoming large PERS rate
increases. Taking this approach will draw down the PERS reserve to $0 by 2007 or 2008,
thereby cushioning the blow on the General Fund operating budget for the next several years.
At the end of that time, the City will be required to make additional budget reductions to make
up for the loss of the PERS reserve cushion.
P. 57