City Council
MEETING DATE: 10/26/2016
TITLE:
Title
General Fund Year End Review 2015/2016
End
FROM:
Tami Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
This item is presented for information, discussion and direction only.
Body
BACKGROUND:
The full presentation is attached for your review. At the conclusion of this presentation you will note the City's General Fund Balance or "Savings Account" has grown. We are doing better and stabilizing; however, since a disproportionate amount of our core General Fund Revenue comes from auto related sales and services, which is considered an extremely volatile industry, it is essential we continue to grow our "Savings Account" to maintain the target amount of 50% of budgeted expenditures.
For Example- "Sales Tax", "Transactions and Use Taxes" & "In Lieu Vehicle License Fees" provide a combined total $19.2 million dollars or 52% of our General Fund Revenue. Of this, $11.5 million or 60% is generated from auto related sales and service.
DISCUSSION:
The auto industry is one of the first industries to be impacted during an economic downturn and would have a considerable impact on the City's "Savings Account" making it important to grow our General Fund Balance. For this reason, the City Council established a General Fund Balance Policy ("Savings Account") target of 50% of budgeted expenditures to achieve by 2020 to be better able to plan for such volatility.
Again, this past year we were fortunate to receive some one time monies that have moved us towards achieving this target sooner than expected. Although we have stabilized, we must manage our staff growth carefully and thoughtfully. Over the next several years we will have increased costs to CalPERS for our pension obligations as their investment rate of return has been reduced and their planned smoothing techniques for agencies to pay their unfunded liabilities to 100% will cause our PERS obligations to more than double unt...
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