TITLE
Recommendation to receive and file the Fiscal Year 2013 First Quarter Budget Performance Report. (Citywide)
DISCUSSION
This report includes information on the City's Fiscal Year 2013 (FY 13) budget performance through December 31, 2012 for all funds, with particular emphasis on the General Fund.
Summary
As of the end of the first quarter, expenditures in all City funds are expected to end the year within budget. This report includes some reporting format changes to facilitate comparisons with the prior year budget.
FY 13 Expenditures - All Funds
There are no significant spending concerns to report at this time. Please see Attachment A for a complete summary of expenditures by fund.
FY 13 General Fund Expenditures
As of December 31, 2012, General Fund departments have estimated to end the year under budget by $2.2 million in aggregate, which can be attributed to the International Association of Machinists and Aerospace Workers (IAM) CalPERS pickup savings described on the second page of this report. See Attachment B for a summary of expenditure by department and attachment footnotes for an explanation of any relevant changes.
After the first quarter of FY 13, 23 percent of Adjusted General Fund Appropriations have been expended. This is roughly on pace with the spending pattern of the last fiscal year. Increased demands for City services during the summer months traditionally result in accelerated expenditures in the second and third quarters. City departments anticipate and incorporate the seasonality of expenditures into the estimates-to-close. Since these estimates represent only first quarter results, they should be considered early estimates only. Staff will continue to closely monitor expenses and report any significant changes.
FY 13 General Fund Revenue
General Fund revenues in the first quarter of FY 13 are being realized as expected in the Adopted Budget. New property tax revenues associated with the RDA dissolution were not reflected in the Adopted Budget as described below. These new revenues account for nearly all of the projected increase to the General Fund revenue of $424.7 million. Revenues from other property and sales taxes continue to experience a modest rebound from recession lows. Inter-fund transfers to the General Fund, which have experienced decline in recent years, are projected to end the fiscal year at budget with the exception of an additional transfer from the SERRF Fund. As a result of the delay in the closure of the Puente Hills landfill until October 2013 and the continued tip fee Long Beach receives, an additional $1.8 million will be available to transfer to the General Fund.
A list of top 40 General Fund revenues is included in Attachment C.
Recent IAM Negotiations
On January 15, 2013, the City Council approved an amendment to the current Memorandum of Understanding with the IAM. As part of this amendment, the IAM agreed to pay an additional 6 percent of their employee contribution rate to CalPERS, for a total of 8 percent, which represents 100 percent of the employee's share to CalPERS. This additional CalPERS payment was effective January 26, 2013, and is estimated to save the City's General Fund approximately $2.5 million ($7.8 million in All Funds) in FY 13. The amendment also included a 5 percent raise, retroactive to the beginning of the fiscal year. That raise was included in the FY 13 Adopted Budget and was anticipated. City Manager Departments worked to reflect these negotiated changes into their estimates-to-close, but these savings estimates are difficult to calculate at a department level or below. Hence, current estimates-to-close may not fully reflect the $2.5 million savings. The Department of Financial Management will continue to work with Departments to monitor and adjust estimates-to-close to capture the savings as the year progresses.
Property Tax Revenue
Due to the dissolution of the Redevelopment Agency, the City's General Fund is expected to receive one-time revenue from the County into the General Fund in FY 13: Pass-Through Payment of $3.5 million (previously distributed by the RDA), City's Share of the Property Tax Distribution of $9.8 million, and one-time distribution from the State sweep of the Housing Fund and Successor Agency Fund of $15.8 million. Of the Pass-Through Payment, $2.8 million is included in the FY 13 Adopted Budget. The remaining property tax revenue of $25.6 million was not anticipated nor included in the FY 13 Adopted Budget and will be budgeted as part of the FY 14 Proposed Budget.
TIMING CONSIDERATIONS
City Council action on this matter is requested on April 2, 2013.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER