1. INITIAL BASELINE BUDGET
June 5, 2017

2. INTRODUCTION
The Finance Department has completed its Initial Baseline Budget review for and fiscal years and respectfully submits this report for the City Council’s review.
This report provides a brief overview of all city funds with primary focus on the General Fund

3. General Fund Revenues CITY OF PORT HUENEME FY 2017-19 Two Year BUDGET
Projected
Source of Funding
FY 16/17
17-18
18-19
Property
4,056,164
4,039,060
4,077,869
Costs Allocation
2,081,711
2,139,904
2,134,104
Sales Tax
1,640,000
1,672,800
External Revenue -OHD
1,541,246
1,596,500
1,604,483
UUT
1,041,427
1,046,666
1,051,899
Interest Revenue
1,048,465
969,436
958,502
Other Revenue
3,498,734
2,646,523
2,656,338
Business License
418,360
414,700
416,774
Cannabis Revenue -
375,000
750,000
Beach Parking Revenue
401,860
335,700
337,379
 Total General Fund Revenue
15,727,967
15,203,489
15,660,147

4. Revenue Sources

5. REVENUE HIGHLIGHTS
New funding source-Cannabis Revenue Projected $375k for and 750K for which equates to 2.47% of total general fund revenue and 4.79% respectively.

6. General Fund expenditures General Fund Expenditures
CITY OF PORT HUENEME
FY Two Year BUDGET
General Fund Expenditures
16/17
17/18
18/19
Projected
Administration
4,627,600
3,192,419
3,248,682
Finance
824,209
1,062,313
1,074,574
Community Development
968,496
1,439,678
1,462,664
Police
6,953,704
7,389,210
7,544,347
Public Works G/F
2,301,757
2,536,048
2,593,720
Recreation
293,981
314,972
316,819
Total General Fund Expenditures
15,969,746
15,934,640
16,240,806

8. EXPENDITURES BY DEPARTMENT

9. EXPENDITURE HIGHLIGHTS
Projections modeled with 2% inflationary rate
Finance projections include two filled positions as recommended by the Management Partners Reorganization Study
Community Development projections include 3 new positions and an increase to Animal Services Contract
Police projections include one filled position

10. FISCAL GUIDELINES Defining a balanced budget
Recurring Revenues to meet recurring expenditures
Use of One time Revenues for one-time expenditures
Establishing adequate reserve levels

11. TYPES OF DEFCITS
CYCLICAL DEFICIT– usually occurs in an economic downturn
STRUCTURAL DEFICIT – occurs over a period of time regardless of the state of the economy.

12. COMPONENTS OF FUND BALANCE
NONSPENDABLE FUND BALANCE – Items not expected to be converted to cash.
RESTRICTED FUND BALANCE – Restricted for specific purposes by external resources providers.
COMMITTED FUND BALANCE – Restricted for specific purposes by a formal action of the government’s highest level of decision- making authority.
ASSIGNED FUND BALANCE – Intended to be used for specific purposes and intent is expressed by a City Council or Management.
UNASSIGNED FUND BALANCE – Includes all amounts not contained in the above classifications.

13. HISTORICAL GENERAL FUND
SURPLUS (DEFECIT)

16. BUDGET SUMMARY General Fund Budget Deficit CIP Included
mil mil
Other Funds-Relatively Good Fiscal Shape

17. FUTURE FORECASTS ISSUES TO CONSIDER

18. Voter Approval Not Required
REVENUE OPTIONS
Voter Approval Not Required
Revenue Source:
Projected Amount
Lease City Hall Annex
24,000
Lease Public Works Industrial Building
180,000
Rental Unit Increases
30,000
Other City Properties
250, ,000
New Business-Cannabis
500,000-1,000,000

19. Voter Approval Required
REVENUE OPTIONS
Voter Approval Required
Revenue Source:
Projected Amount
One Half Cent Sales Tax Increase
600, ,000
UUT Increase (1% increase =250,000)
500,000
Parcel Property Tax
750,000-1,000,000
Business License Tax
300, ,000
Property Transfer
245,000

20. EXPENDITURES Reallocation of Resources/Cost Avoidance-250k
Labor Negotiations-hold the line on employee related salary and benefit costs
Continue to Evaluate very department and every program

21. Enterprise funds subject to proposition 218
Substantive Requirements of Prop. 218
According to Prop. 218, a property-related fee must meet the following substantive requirements:
Revenues derived from the fee must meet not exceed the funds required to provide the service;
Revenues derived from the fee must not be used for any purpose other than that for which the fee is imposed;
The amount of a fee imposed must not exceed the proportional cost of the service attributable to the parcel;
The fee may not be imposed for a service unless the service is actually used by, or immediately available to the owner of the property subject to the fee; and
No fee or charge may be imposed for general governmental services, such as police, fire, ambulance, or libraries, where the service is available to everyone in the community.

22. CITY OF PORT HUENEME
Water FUND and
Proposed
Beginning Unrestricted Reserves
6,593,292
7,633,138
Total Water Fund Revenues
8,863,227
8,072,308
Expenses (no CIP)
6,874,181
7,005,603
CIP
949,200
9,004,896
Total Water Fund Expenses
7,823,381
16,010,499
Water Fund surplus/(deficit)
1,039,846
(7,938,191)
Ending Unrestricted Reserves
(305,053)

23. CITY OF PORT HUENEME
Wastewater FUND and
Proposed
Beginning Unrestricted Reserves
6,861,022
7,071,099
Total Wastewater Fund Revenues
3,668,672
3,741,165
Expenses (no CIP)
3,066,395
3,112,444
CIP
392,200
74,664
Total Watewater Fund Expenses
3,458,595
3,187,108
General Fund Surplus/(deficit)
210,077
554,057
Ending Unrestricted Reserves
7,625,156

24. CITY OF PORT HUENEME
Solid Waste FUND and
Proposed
Beginning Unrestricted Reserves
4,341,052
4,735,979
Total Solid Waste Fund Revenues
4,274,660
4,360,153
Expenses (no CIP)
3,860,533
3,931,044
CIP
19,200 -
Total Solid Waste Fund Expenses
3,879,733
Solid Waste Fund Surplus/(deficit)
394,927
429,109
Ending Unrestricted Reserves
5,165,088

25. Spa expenses
Principal and Interest payment to the General Fund - Loan from SPA to the General Fund (PN#15-01)
- Outstanding loan balance as of June 30, 2016 = $4,454,511
Duration of the loan is from July 1, 2014 through June 30, 2027
Interest - rate is 6% per annum
Approximately $265,000/yr for Interest
Approximately $300,000/yr for Principal

26. QUESTIONS