HomeMy WebLinkAboutPOWERPOINT - 65ARequest of Preliminary Direction for FY 202 0- 0 1
Agri l 21,2020
Recommended Actions
1. Accept current year revenue updates.
2. Affirm the hiring freeze.
3. Approve $6.6 million transfer of General Fund
money from Solid Waste Enterprise to General
Fund.
4. Direct staff to prepare FY20-21 budget using
Reserve for Economic Uncertainty.
5. Direct staff to return with Pension Obligation
Bond feasibility analysis.
Expected Total Revenue Decreases:
• $12.35 million this year
• $15.1 million next year
Expected Gradual Recovery
COVID-19 affects nearly half of all General Fund Revenue
Permit &Plan Check Fees Parking Fines Zoo, Recreation & Library Fees
Hotel Visitors' Tax
Business License Tax
Other
Paramedic service Cha
Residual Tax Increment
Jail Revenues
Cannabis
Utility Users'Tax
J
Sales Tax
r-
V
Property Tax affected in
FY21-22, by $15+ million?
Other Potential
Revenue Impacts
• Gas Tax — Unknown decrease, but accumulated fund
balance is equal to one year of revenue.
• Measure M2 —Potential decrease of $1.3 million.
• Federal Stimulus —limited to costs directly related to COVID-
19,and not originally budgeted.
• $500 million to Orange County —City share unknown
• FEMA reimbursements
• $3.4 million CDBG
• $1.7 million ESG for homeless
• State Funding of $1.4 million for homeless
Hirin
Freeze & Part Time Reduction
0 General Fund pays for 835 full-time
employees
82 are vacant
Annual cost of $8.6 million
Current year savings of $7.0
million
Over 300 part-time employees are
not working.
i Mrs I V9 @7 Lq re
$60.0
$50.0
$40.0
$1.6 million savings $30.0
when paying the full
amount in July $20.0
$10.0
Already established,
prior to COVID-19
Annual Payment
(in millions)
$12.5
$37.;
P1 FY20-21
■ General
F, 14
$14.2
L
Issue $315 million of
Pension Obligation Bonds
(POB) to reduce "interest"
cost of 7%?
FY21-22
Fund ■ Other Funds Estimated — to be based
upon June 30, 2019 actuals,
prior to COVID-19 related
investment losses.
POB Feasibility?
• Recommend partial POB
• Only $315 million of the $681 million
unfunded liability
• Use proceeds to make targeted
payments
• Bond proceeds sent to CaIPERS
• If CaIPERS has investment losses in
the future, some of the bond
proceeds will be lost
• Every year CaIPERS assumptions
are not met, unfunded liability
continues to grow
• POB does not "pay-off" the liability
Questions or
Comments
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