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Report regarding resolution approving the Fiscal Years 2017-19 Biennial Operating Budget for the City of South San Francisco, approving the Gann Appropriations limit, and making changes to the City’s salary schedules (Richard Lee, Director of Finance)
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RECOMMENDATION
Recommendation
It is recommended that the City Council adopt a resolution that approves the Fiscal Year (FY) 2017-19 Proposed Biennial Operating Budget, the Gann Appropriations Limit, and changes to the City’s Salary Schedules. The proposed Capital Improvement Program (CIP) budget will be transmitted by the Engineering Division separately.
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BACKGROUND/DISCUSSION
The FY 2017-19 Proposed Biennial Operating Budget was presented to the Budget Subcommittee (Vice Mayor Pradeep Gupta and Councilmember Liza Normandy) on May 3, 2017. The budget was then reviewed by the full City Council at the Study Session on May 31, 2017.
The attached FY 2017-19 Proposed Biennial Operating Budget book incorporates direction from the City Council, as well as the following notable changes that occurred subsequent to the Study Session:
• Program to assist low income residents with the sewer service rate increase;
• BIO 2018 Conference budget increased from $75,000 to $125,000;
• Addition of Sewer Fund CIP appropriations; and
• Purchase of land from the Successor Agency in the amount of $7.18 million.
The following new job classifications and related salary schedules listed in the accompanying resolution are created upon approval by the City Council as of June 28, 2017:
• Landscape Architect;
• Building Plan Reviewer; and
• Senior Permit Technician.
FUNDING
The Proposed Biennial Operating Budget for FY 2017-19 estimates Total Revenues for all funds at $196,443,602, while Total Expenditures for all funds are estimated at $208,247,202 in FY 2017-18. In FY 2018-19, Total Revenues for all funds is projected to be $216,815,142, while Total Expenditures for all funds is projected to be $220,212,301.
In FY 2017-18, General Fund Total Resources (Total Revenues and Committed Reserves) are estimated to be $114,047,829, while General Fund Total Expenditures are estimated to be $110,490,252, which will generate a Net Surplus of $3,557,577. In FY 2018-19, General Fund Revenues are projected to be $117,282,497 while General Fund Expenditures are projected to be $112,100,123, which will generate a Net Surplus of $5,182,374. General Fund Reserves are estimated to end FY 2017-18 at $22.5 million, and $23.1 million in FY 2018-19.
Gann Appropriations Limit
The associated resolution includes a provision for the City Council to approve the Gann Appropriations Limit, as required by the State. Proposition 4 (the Gann Appropriations Limit) was a constitutional amendment approved by California voters in 1979 that:
• Limits the growth in appropriations made by the State and individual local governments from the proceeds of taxes. The limit in the rate of growth is the percentage increase in the cost of living and the percentage increase in the State or local government's population.
• Requires the State of California and local governments to calculate their annual appropriations limit and return any excess funds from the proceeds of taxes to taxpayers for a given Fiscal Year.
The City of South San Francisco, like the bulk of California cities, is significantly under its Gann Appropriations limit, meaning the tax revenues it receives is less than the maximum. For FY 2017-18, the allowable limit is $133.2 million, and the actual proceeds of taxes (excluding user fees or permits or fines) are estimated at $82.9 million, meaning the City is under its Appropriations Limit by $50.3 million.
CONCLUSION
The attached budget is balanced, financially prudent, and sustainable.
Attachments:
1. FY 2017-19 Proposed Biennial Operating Budget & CIP Book
2. FY 2017-19 Proposed Biennial Operating Budget PowerPoint Presentation