SS - Budget PresentationBuilding the Town’s Budget:
Budget Principles and Financial Update
February 21, 2017
1
Budget Principles
Operating and Capital Budgets
Town Operating Budget Principles:
1. Operating Revenues Equal Operating Expenditures
2
3. Capital Budgets are Funded by Accumulated FY Savings
2. Balanced Budget (no deficit)
Budget Process
Operating and Capital Budgets
Operating Budget are Developed with Updated Town Five Year
Forecasts
3
Capital Budgets are Developed by Systematic Allocation of Available
General Fund Reserve Dollars (Savings) Over Five Years
4
General Fund Results Last 11 Yrs.
Land Purchase
University Sports Park $3.1M
Capital Transfers
$33.6M
5
General Fund Balances Last 11 Yrs.
PERS Reserve
$300,000
What are the Town’s funds?
•General Fund - “All Government Services”
•Special Revenue Fund - “Special Use”
•Debt Service Fund - “Debt Service”
•Capital Project Fund - “Infrastructure”
•Trust and Agency Funds - “Held in custody or
trust”
•Internal Service Funds - “Services to Support
Government Services”
6
INTERNAL SERVICE FUND
7
General Liability
Workers Compensation
Information Technology
Facilities Maintenance
Equipment Replacement
Vehicle Maintenance
GENERAL FUND PAYS FOR INTERNAL SERVICES
8
•In General:
–Revenue for Internal Services
=
–Expenditures for General Fund
Statement of Net Position
9
$112.5M Net Position or “Net Worth” June 30, 2016
<$93.4M of this balance is Capital Assets>
10
Net Pension
Liability
Net Position
OPEB
CITIES UNFUNDED PENSION LIABILITY
$-
$10,000,000.00
$20,000,000.00
$30,000,000.00
$40,000,000.00
$50,000,000.00
$60,000,000.00
$70,000,000.00
Gilroy Campbell Los Gatos Morgan Hill Los Altos
$25.5M $21.3M $24.5M $20.7M $14.9M
$40.5M
$22.7M $16.3M
$14.3M
$11.7M
Total Safety
Total Misc
$58,480,495
11
$46,057,051 $41,279,836
$35,709,341
$23,235,515
CITIES FUNDED PENSION RATIO
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66.0%68.0%70.0%72.0%74.0%76.0%78.0%80.0%
Los Altos
Campbell
Morgan
Hill
Los Gatos
Gilroy
76.1%
76.9%
75.5%
73.0%
72.9%
77.2%
71.5%
72.9%
78.2%
70.6%
Safety Funded Ratio
Misc Funded Ratio
Na
t
i
o
n
a
l
A
v
e
r
a
g
e
– 72
%
TOWN’S TOTAL UNFUNDED LIABILITY
Pension Liability – $41,279,836
Other Post Employment
Benefits Liability (OPEB) - $12,610,000
Total Unfunded Liability - $53,889,836
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LOS GATOS LEADS IN ADDRESSING OPEB
14
Bartel Associates Database
Los Gatos=48%
Questions & Answers
15
INTERNAL SERVICE FUNDS
$3,133,400 $3,260,531 $3,429,643 $3,675,029
$2,148,005
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016
Equipment Replacement – Fund Balance
$2,473,345 $2,495,697
$2,661,264 $2,747,342 $2,904,373
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016
Management Information Systems – Fund Balance
CAFR NP
$2.1M
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INTERNAL SERVICE FUNDS – CONT.
$1,595,140
$1,352,035
$1,056,559
$1,535,300 $1,409,360
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016
ABAG Self-Insurance – Fund Balance
CAFR NP
$1.1M
$2,300,638 $2,246,915
$1,576,698 $1,492,508
$1,217,470
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016
Worker’s Compensation – Fund Balance
CAFR NP
$1.0M
17
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INTERNAL SERVICE FUNDS – CONT.
$521,709
$601,794
$740,861
$283,740 $417,131
$(200,000)
$(100,000)
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016
Vehicle Maintenance – Fund Balance
CAFR NP
$.08M
$1,020,685
$1,255,709 $1,319,864
$418,929 $425,808
$(400,000)
$(200,000)
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016
Facilities Maintenance – Fund Balance
CAFR NP
-$.1M