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Home My WebLink About02 - Financial Update - PowerPoint (Staff)Non - Spendable $16.3 Total Cash & Investments - Restricted $3.9 $212 million. Unrestricted reserves, Committed $12.8 including those reserves maintained outside of General Fund, that are Assigned $1.4 available in the event of an Contingency $41.3 emergency total approximately "Surplus" $9.7 $125 million. TOTAL GENERAL FUND $85.4 ALL FUNDS $125 Million Local Revenues Continue to Trend Upward! Sales Tax * Increased sales activity across all major industry groups Ja • Largest year over year increase in Autos and Transportation category TOT PE Building Fees 4 • Sustained climb in travel and tourism • Major hoteliers at or near full capacity and can command higher room rates Construction activity and associated permit and plan check revenue are strong 3 General Fund Revenues Property Taxes - 47% Sales Taxes - 19% Transient Occupancy Taxes - 11 All Other Sources - 23% General Fund Revenues - $180 Million (FY 14 -15 — Current Year) 4 FY 15 -16 FY 15 -16 ALL OTHER 1 $ 44,348,600 $ 1,652,351 $ 45,039,064 $ 690,464 1.6% TOTAL GEN FUND REVENUE 1 $180,700,609 $ 5,403,186 $190,879,512 $10,178,903 5.6% FY 14 -15 Projected FY 15 -16 Projected Projected Projected Variance Projected Change Percent TOP 3 (Prelim) from Budget (Prelim) (Prelim) Change Property Tax $ 83,975,876 $ 1,368,637 $ 87,874,505 $ 3,898,629 4.6% Sales Tax 32,836,623 1,154,455 37,349,093 4,512,470 13.7% Transient Occupancy Tax 19,539,510 1,227,743 20,616,850 1,077,340 5.5% Total Top 3 $ 136,352,009 $ 3,750,835 $ 145,840,448 $ 9,488,439 7.0% ALL OTHER 1 $ 44,348,600 $ 1,652,351 $ 45,039,064 $ 690,464 1.6% TOTAL GEN FUND REVENUE 1 $180,700,609 $ 5,403,186 $190,879,512 $10,178,903 5.6% Revenue Estimates November Budget Preparation Cycle Expenditures Submitted January Budget Conferences February Public & Budget City Council Adoption Review March I May Budget Administration July -June and Drainage Unfunded Pension Liability $800 $700 $00 H $500 °— $400 $300 — $200 O P E B $100 $ M I 2007 2008 2009 of Understanding (M.O.U.$); • Association of Newport Beach Ocean Lifeguards • City Employees Association 2012 -2015 • Firefighters Association 2012 -2014 o NBFA Side Letter and Settlement Agreement • Fire Management Association 2012 -2014 • League MOU 2012 -2015 • Lifeguard Management Association 2012 -2014 • Part Time Emcees Association MOU 2013 -15 o PTEANB Cafeteria Allowance Memorandum, • Police Association MOU 2014 -17 • Police Management Association 2012 -2014 Strong Reserve Position ✓ Pension Management Progress ✓ Base Operating Costs ✓ $5 Million General Fund CIPs — "Nuts & Bolts" ✓ Facilities Financial Plan (FFP) —As it is today ✓ Debt Service Obligations ? Upcoming Labor Negotiations ? Keeping up with our Facilities Maintenance Plan ? Supplemental Programs — Increases to base operating costs (i.e. more officers) ? CIPs not included in FFP or $5M General Fund If we add something, how shall we accommodate its cost? 8 Unfunded Pension Liability at Market Value N C 0 $800 $700 $600 $500 $400 $300 $200 $100 2007 2008 1 2009 2010 2011 1 2012 2013 Accrued Pension Liability $501 $553 $617 $652 $693 $727 $755 � Market Value of Assets $499 $472 $354 $395 $467 $452 $497 —w—Unfunded Liability at Market Value $2 $82 $263 $257 $226 $275 <ZD Funded Status 100% 85% 57% 61% 67% 62% 66% $50 - $45 - $40 - $35 $30 $25 $20 $15 $10 - $5 $0 ,- N O Q1 0) Funding Schedule Options In M.11. - -- -1 N N N N N N N N N N N N N N O O O O O O O O O O O O O O N N N N N N W W W W W A A A 00 O N A m 00 O N A a) 00 O N A — Current —19 Yr 15 Yr —10 Yr 10 Normal Cost FY 2015 14,627,830 Fresh Start FY 2015 Amended* 14,627,830 FY 2016 Estimated ** 15,260,367 Estimated Cumulative Increase 632,537 Amortized Cost of Unfunded Liability* 12,783,847 7,600,000 20,383,847 23,621,125 10,837,278 Total Annual PERS Cost Employee Contributions Net Employer Cost* Total Annual PERS Cost 27p41116771 7,429,842 19,981,835 27,411,677 7,600,000 7,600,000 7,600,000 35,011,677 7,429,842 27,581,835 35,011,677 38,881,492 8,858,122 30,023,370 38,881,492 *FY 2015 Amended includes Fresh Start amount of $6.6M plus $1M previously authorized. * *FY 2016 is a preliminary cost estimate, budget currently in development. 11,469,815 1,428,280 10,041,535 11,469,815 11 Employee /Employer Share of Normal Pension Cost $20.0 $15.0 c $10.0 $5.0 FY 15 Amended FY 16 Estimated Employee /Employer Share of Total Pension Cost $40.0 $35.0 $30.0 $25.0 c °2 $20.0 $15.0 $10.0 $5.0 79% 77% M21%I—M 23% FY 15 Amended FY 16 Estimated Employer Share ■ Employee Share t 12 • 2nd Lower Tier Pension Benefits — Transfer Hires • Lower PEPRA Tier Pension Benefits —New Hires • Eliminated Employer Paid Member Contributions • Employees pay more - $7.4M in FY 14 -15 $8.9M Projected for FY 15 -16 • Reduced the number of full time staff by nearly 100 employees _ • Accelerated Payment Election�` - $30 million next six years including FY 14 -15 — Savings to exceed PENSION $130 million over next 30 years m4ak -_d 13 What is the FFP ? • It's a long -term plan to replace facilities on a perpetual basis • It helps identify replacement priorities & related financial impact • Regularly updated with new information -"ft _ , ,M How is it Funded? • Annual General Fund Contributions + • Developer Contributions + • Investment Earnings + • Debt Financing when appropriate How is it governed? • Governance established by Council Policy F -28 • Debt funding limited by Council Policy F -8 • Finance Committee Review • Council Review Owl , I We're in good shape. • Revenues are strong • Progress on Pensions • Debt under control • FFP projects funded • $5M CIP funded • Base operations funded But our Flexibility is Very Limited — it's a new era • With the above funded, there isn't much room for anything else, like: • Projects not in the FFP • Significant additions to operational costs unless... There is offsetting revenue or offsetting expenditure reductions, project swap -outs, or surplus revenue. Focus on what we have underway and budgeted. • Then... • Prioritize those items not budgeted • Implement them when funds allow (end of year surplus, etc.) • And think about direction /ideas on expenditure reductions you'd like us to study.... 1 '117-11 17