HomeMy WebLinkAbout03 - Fiscal Picture Update - PowerPointCouncil Planning Session
Financial Update
January 14, 2017
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About FY 2015-16 Year End
GOOD REVENUE NEWS IN FY 2015-16
Sales Tax • Increased $3.9 million, or 12%, in FY 15-16 due to one-time
receipts (triple flip)
• Restaurants, Hotels and Business and Industry sales tax
categories were strong drivers for growth over the prior
year
TOT • Sustained climb in travel and tourism
• Increased 3.5% in FY 15-16
FY 2015-16 General Fund Results
Non -Spendable
$15.8
$15.2
-$0.6
Restricted
$5.4
$3.1
-$2.3
Committed
$5.5
$2.7
-$2.8
Assigned
$7.8
$4.2
-$3.6
Contingency
$41.3
$45.8
$4.4
"Surplus"
$14.2
-$3.3
_$10.9_
TOTAL
$90.0
$81.8
-$8.1
Looking Ahead...
Revenue
Expenditures
Estimates
Submitted
I
December
January
City Manager
Fin Committee
Recommended
& Budget
ConferencesBudget
City Council Adoption
February Budget
Review June
March
April -May
Budget
Administration
July -June
(5J
Budget Challenges
✓ Base Operating Costs
✓ $5 Million General Fund CIPs — "Nuts & Bolts"
✓ Facilities Financial Plan (FFP) — (though stay tuned...)
TBD Getting on sound footing re: pensions
TBD Banking enough $$ for seawalls & Harbor Master Plan
TBD General Plan Update (per conv with Mayor Muldoon)
TBD Labor Negotiations — Safety
TBD Support for Wastewater Master Plan
TBD Funded status of important strategic savings (Vehicle ISF,
IT ISF, General Liability, more)
If we add something, how shall we pay for it?
Impact of CaIPERS Discount Rate Change
$0
7.5D% 7.375% 7.25% 7.0096
Change In Discount Rate $51 M
■ 2016 Investment Loss
■ 2015 Unfunded Liability
$450,000,000
$400,0002000
$350,000,000
Y
$300,000,000
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''S r y r y-1 �'S �'1/'y�
$250,000,000
C
$200,000,000
$150,000,000
$100,000,000
$5 G, 000, OOO
$0
7.5D% 7.375% 7.25% 7.0096
Change In Discount Rate $51 M
■ 2016 Investment Loss
■ 2015 Unfunded Liability
Impact of CaIPERS Discount Rate Change
$450,000,000
$350,00G,000
$300,000,000
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J
$250,00[},000
$200,000,000
0
$150,000,000
$100, 000, 000
$50, 0[70,000
$0
7.50% 7.375% 7.25% 7.00% 6.50%
What if discount rate was 6.5%
=$61 Million
■ Funding Recommendation - Lower
Miscount rate to 6.5%
Change In Discount Rate $51
■ 2016 Investment Lass
■ 2015 Unfunded Liability
Payment on Unfunded
Range of Alternatives
see I
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4. off I�
see I�
1 off
off
G
Liability
Default Minimum .Alternative 1 Alternative 2 Alternative 3
Getting the Harbor where it nes
Along -term Master Plan to...
• Maintain and replace facilities on a perp
• Identify replacement priorities & relatec
• Be updated regularly w/new information
How could it be funded?
• Harbor Capital Fund Revenues +
• Annual General Fund Contributions +
Key Needs
• Enough $$ for seawalls
• Enough $$ for regular, routine dredging
• Other
A Possible Allocation (in $M)
Beg Bal $10.0
$8.0 $45.8
$63.8
MOUS
(2.5)
(2.5)
Pension
(5.0)
(2.5) (5.0)
(12.5)
Operations
Ha rbo r Ca pita l Pla n
(5.0)
(2.5)
(7.5)
General Plan Update?
General Liability
(0.5)
(0.5)
End Ball $0.0
$0.0 $40.8
$40.8
Our Takeaways for Today. . a
January 2017 shows the City in good shape.
• Revenues are strong with a strong reserve position
• Council has made good progress on pension issues
• Our facilities are in good shape (generally), and new
ones (Marina Park, OASIS, Newport Coast) are working
well
• We should be able to maintain our $5M in General Fund
CIP —the "nuts and bolts"
• Base operations funded
But challenges are ahead.
Some Recommendations...
It might be wise to....
• Think outside the box on pensions
• Rate of return may be lower than 7%
• Potential for significant State changes over the next 3-5 years
• Review planned capital projects for essential v. non-essential (per
Mayor Muldoon)
• Take a hard look at projects in the FFP
• But keep investing in the nuts and bolts
• Allocate FY 15-16 Surplus:
• 50% towards pension obligations
• 50% towards seawall "down payment"
• Theme of this approach might be...
• Protect the quality of life (and programs and facilities); and
• Make strong progress on our obligations; but...
• Preserve as much budget flexibility as possible
Council Planning Session
Financial Update
January 14, 2017
Questions ?