The City continues its history of self-reliance. We do not rely heavily on any Federal, State, or other non-local revenue sources in the provision of services to the community. Historically, we have not faced budget deficits forcing the consideration of tax increases or reductions in services. We consistently budget revenues and expenditures conservatively.
In FY 2009-10, we will receive General Fund revenues totaling more than $4.64 million. General Fund expenditures are projected at $4.5 million leaving a projected year-end positive balance of $3.56 million (before transfers to other funds).
In terms of total revenue projected for all Funds, we estimate $7.18 million. Total expenditures for all funds are projected at $8.43 million. Expenditures are projected over revenues in FY 2009-10 in several areas. FY 2009-10 includes several large capital projects that will use “saved” revenues of Road Impact Fees and Capital Improvement Funds. In addition, revenues in the Fire Fund total only 59% of the projected expenditures. The balance is made up through a subsidy from the General Fund.
At this time, the budget does not include the impact of the potential borrowing by the State under Proposition 1A. It is estimated that this could impact revenues negatively by $250,000 – $300,000. The impact of the State take-away would show in revenues to the City at mid-year. It is my recommendation that the City evaluate its revenues at mid-year and make budget adjustments as necessary at that time. The FY 2009-2010 Budget includes a $460,200 transfer to the Capital Improvement Fund for current and future projects. The balance of the Capital Improvement Project at June 30, 2010 is projected at $699,202. The amount transferred to the Capital Improvement Fund could be reduced with the associated impact being that out-year projects are pushed further out.
Following is a fund-by-fund revenue and expenditure summary of the proposed budget.
GENERAL FUND
REVENUES – It is anticipated that the General Fund will generate an estimated $4.64 million in current year revenues. This amount is $179,768 less than the estimated actual revenues that will be received by the end of FY 2008-09 and $162,989 more than the FY 2008-09 approved budget.
The decrease in General Fund revenue projections against actual revenues is directly related to the conservative estimating of revenues due to the City including property taxes, construction related licenses and permits, planning and building penalties, and service charges. These reductions are offset by the inclusion of traditionally “unanticipated revenues” related to the Educational Reimbursement Augmentation Fund (ERAF) shifts at the State level. Staff does not traditionally budget for unpredictable ERAF revenues. In the past, these have been an unpredictable revenue source that could be dependent on State budget action. However, in the case of ERAF funds, the City received $270,000 in 2004-05, $240,000 in 2005-06, $265,000 in 2006-07, $429,370 in 2007-08, and $315,805 in 2008-09. It is anticipated that the City will continue to receive this allocation and therefore we have budgeted conservatively at $200,000 in 2009-2010.
EXPENDITURES – Expenditures for the operating departments in the General Fund will decrease $554 over the 2008-09 Budget. Overall, each budget has minor increases and decreases on numerous line items. There are no notable increases within any departmental budget.
FIRE FUND
REVENUES – In March 2008, Measure C was passed by the residents authorizing the adjustment of the City’s appropriations limit for the next four fiscal years in order to allow taxes already approved to be spent on fire protection and emergency medical services. For FY 2009-10, revenue from Measure C will generate $654,106, up 2.7% over the estimated revenues for the prior fiscal year. Without this revenue, the City would be required to expend this amount in addition to the current subsidy from the General Fund Reserve depleting the Reserve fund’s current balance in its entirety within 4 years.
EXPENDITURES – Even with this increase, the revenues continue to fall significantly short of what is required to fully fund the cost of services provided by the Tiburon Fire Protection District. The total required budget is $1,104,654. A General Fund transfer of $475,548 is included in the budget to augment the fund for the year.
CAPITAL IMPROVEMENT FUND
REVENUES –The Capital Improvement Fund will generate new revenue of $1,844,423 in FY 2009-10. This includes a conservative estimate of Road Impact Fee revenue – $125,000 and $1,625,000 for Utility Undergrounding Districts. Funding for the Districts come through assessment district bond sales.
EXPENDITURES – Capital Improvement expenditures in FY 2009-10 total $2.77 million. As mentioned above, $1,625,000 will be spent on undergrounding districts. Approximately $674,400 will be spent on various street and road projects to include spot repairs, slurry projects, and other projects as recommended by the Traffic Safety Committee. The majority of the funding and expenditures here comes from Proposition 1B and is allocated to the Peninsula Road Overlay & Drainage Improvement Project. Drainage projects for the coming year total $109,000 and include storm drain repairs at Bella Vista, Belvedere Ave @ Belvedere Way, and Beach Road. Park and Open Space projects total $153,700 and include improvements to the San Rafael Avenue Pathway, Beach Road Circle Landscaping, and miscellaneous other improvements. Lane improvements include work at the Harry B. Allen Stairs and Upper Woodland stairs at $52,000. Community Building improvements, $33,500, include repairs/replacement of portions of the City Hall patio and waterproofing. Lastly, 2009-10 expenditures include miscellaneous projects totaling $112,000, such as concrete/retaining wall repairs, study and surveys, sidewalk repairs and a disaster preparedness and recovery project allocation to be used on an as needed basis ($50,000).
OTHER RESTRICTED FUNDS
LEGAL DAMAGES AND SETTLEMENTS – Expenditures for legal expenses from the legal damages and settlements fund in FY 2009-10 are projected at $25,000. Anticipated expenditures in 2008-2009 were $1,000. At year-end, the anticipated balance of the Legal Damages and Settlements Fund will be $420,000.
EQUIPMENT REPLACEMENT FUND – The FY 2009-10 Equipment Replacement Fund includes the purchase/replacement of miscellaneous furniture and computer equipment. All purchases and replacement of major equipment and vehicles has postponed to mid-year after a mid-year budget review. The FY 2009-10 budget includes a fund of $25,000 for any necessary replacement of computer equipment and/or furniture.
CONCLUSION
In summary, recommended expenditures total $8.43 million and combined available revenue and fund carryovers total $13.25 million. As the budget is currently proposed, it is anticipated that the General Fund balance at the end of FY 2009-10 will total $2.58 million. The Finance Committee met on May 21, 2009 to review the proposed budget for FY 2009-10 along with the five-year projections.
Stated Reserve Policy: As adopted in 2007, the City’s General Fund Operational Reserve Policy requires that the City maintain 6-months General Fund operating expenses within the General Fund Reserve. General Fund operational expenses for 2009-10 are $4.98 million, inclusive of a transfer to the Fire Fund. The projected General Fund balance at year-end, exclusive of reserve fund transfers, is $3.08 million well maintaining a General Fund Operational Reserve of $2.49 million, consistent with the proposed policy. The remainder can be allocated to the City’s various outside funds for designation as infrastructure, equipment, or legal reserves as needed.
At the conclusion of FY 2009-10, the Capital Improvement Fund balance will be stable at $2.58 million and the Road Impact Fee balance will be $916,210, with allocations within the 5-Year Capital Improvement Plan.
I would like to commend staff’s hard work developing this document. Each year, City staff develops a budget that balances community priorities, identified revenue sources, and fiscal conservativeness to ensure that the City’s fiscal independence continues. This budget year is particularly challenging given the economic downturn of the economy. Key staff members consistently provide the input necessary to develop a successful budget. These staff members include: ACM/Building Official Lee Braun, Planning Manager Pierce Macdonald, Public Works Manager Scott Derdenger, Former Police Chief Mark Campbell, New Police Chief Steve Fracolli, and Deputy City Clerk Leslie Carpentiers. Special recognition is always due to Finance Office Becky Eastman who coordinates a very successful budget process. Belvedere is fortunate to have such professional and dedicated staff all of whom recognize the uniqueness of the community and feel as strong about preserving Belvedere as someone who has lived here all their life.
