Recommendation to receive and file the Fiscal Year 2017 Second Budget Performance Report.  (Citywide)
Motion carries. Thank you. 21 Please report from Financial Management Recommendation Receive and file the fiscal year 2017 second Budget Performance Report Citywide. Thank you, Mr. City Manager. Can we have a brief staff report, please? Leah Erickson. Good evening, Vice Mayor, Members of City Council. This is the second performance report for fiscal year 17, which covers the first eight months of the year. And this information that is in this report is consistent with the projections used for the fiscal year 17 in the manager's proposed 18 budget. So general fund revenues are expected to end the year lower than expected due to a one time drop in revenue. This is due to a $5.4 million decline from successful property tax appeals by companies in the harbor area. This results in a one time large revenue impact as well as smaller ongoing revenue reductions in future years. Partially offsetting the shortfall are higher than estimated property tax revenues and oil revenues, which are coming in at $45 a barrel instead of 35 a barrel. On the expenditure side, we're projected to end the year with the savings rate under budget. This includes factoring in unbudgeted medical marijuana expenses. It is expected that general fund departments will save the point 5% of their budgeted appropriations per the city manager's request. And given the revenue shortfall, departments have been asked to save additional funds above those 0.5% targets to mitigate the revenue shortfall and end the year in a balance. So it's expected that with this approach, the city could ultimately end the year with a small surplus. However, at this time, the General Fund is not projected to have significant zero funds available and may not have any additional funds left over four 5% for unfunded liabilities or any funds for FY 18 one time uses. Also, measure a ballot initiative was passed for this year and we have 35.6 million of anticipated revenues this year. And so to date, as of as of June 30th, 15.2 million in revenue has been received and the 11.2 million has been expended and 8.5 encumbered are obligated for ongoing and one time public safety and infrastructure purposes. While these revenues are in line with estimates during this ramp up period, it is a new revenue source and so it's being closely watched from other funds. There are no revenue concerns and no significant issues identified for expenditures. While all revenue is coming in higher than projected, as mentioned, the revenue is being used to offset previously mentioned shortfall in the general fund revenues. So therefore only a small surplus is possible for uplands and in the Talents Fund. The overall status of the fund makes it unlikely that any additional capital funding will be available at the end of 17. But we will know more at year end close as it continues to closely monitor revenues and expenditures for the remainder of the year and report any significant changes. This concludes the staff report and I'm available for any questions. Thank you. And then I go to Councilman Andrews, just your good Councilwoman Price. Thank you very much, Mr. Vice Mayor. So, Miss Erickson, that was a really fast recitation. And I understand, given the hour, the night, that this seems kind of like an important topic to me. So I know that you reached out to all the departments to ask for us to reduce our budgets, and that was including city council . Can you tell me, did did all the council officers participate in that? It is my understanding that they are. Okay. And and I know we did that last year as well. Right. Okay. So that's I think that's great. In terms of the surplus, you said that we're it's possible we'll have a small surplus at the end of the year. Is that correct? That is correct. If departments are able to meet their savings targets and save additional funds, we should have you know, we should end the year in balance or have a small surplus. You know, there is a risk, though, that it could could be a small shortfall. And that's why we're watching it very closely and asking departments to save more. And so what is that amount? The small surplus. Right now, we're actually officially estimating zero. So no, no funds available. No extra funds available and no shortfall. Okay. And so when will you know whether there will be a surplus, if at all? So really, we it takes a while to close our books. So we come back to city council in February, but we'll have a better feel of probably in November if there's going to be a major problem. If there was a major problem, that's why we do have an operating reserve and the operating reserve is used for these . And it's unanticipated one time or mid-year shortfalls that we did that we had with revenue. We're hopeful, though, that between other revenues coming in higher and department savings that will that will end the year in balance. Okay. And I just want to note one thing, and that is, you know, we talk a lot about the Tidelands funds. And sometimes people say, well, we don't have a Tidelands Fund in our district. There are different enterprise funds in various districts that you can benefit from those funding sources and some where you can. We talked about it earlier tonight in terms of grant moneys and things available. But I just want to just so that we're clear the bathrooms and all the things and the parks and the things that we normally maintain through the Tidelands Fund in in 17, we don't expect to have any capital improvement, but we will still have operating. So a small amount of operating moneys coming in. Councilwoman Price We have 1.5 million of capital investment planned in the 18 proposed budget using funds available in Tidelands. But there is no anticipated any additional surpluses at this time. But that also could change when we do year end. Okay. Thank you. I appreciate that. I will not ask any more questions. Thanks. Thank you. Next, we have Councilor Mungo. You mentioned a reduction in property tax revenue from a port port from port related locations that did a property tax appeal. What year was their appeal? Was it a multi-year refund that impacted an end to future fiscal years? Include the new adjusted rate. Councilwoman Mingo. So it was over several fiscal years, I believe at least three might have been four when you count the current fiscal year. And so that's why it is considered a one time hit. But we do believe that that appeal alone, those appeals alone could result in about $1,000,000 of ongoing revenue shortfalls. And that is hopeful that that it would be offset by other properties going up higher than anticipated. So right now, that's something that we are concerned about and we're watching for FY 18. And then also, there could be additional appeals filed. And so we're we're looking at that as well. And the. Volatility of those properties also can be. Restored at the same rate in which they were decreased. So let's make. Sure to keep track of both sides of it. Correct. Okay. Wonderful. Thank you. Thank you. Any public comment on this item saying please cast your vote.