HomeMy WebLinkAboutPRESENTATION-FiscalSustainabilityReport2011
City ®f Petaluma
11 English Street • Petaluma, CA 94952
Honorable Mayor and Councilmembers:
I am pleased to present the Fiscal Year(s) 2011-15 Fiscal Sustainability Report. This effort is the
first step towards development of budget strategies for Fiscal Year 2011-12 and the development
of sound financial strategies to ensure the City's fiscal health into the future.
This report is intended to be a long-range planning tool to allow the City Council to make
strategic decisions on the City's financial sustainability. This report will require annual updates
to assure accuracy of the forecasts and to adjust to existing conditions. The foundation of the
report is built upon financial trend analysis and financial forecasting which describes the City's
current and projected financial condition. Specific recommendations to address the budgetary
forecast and conditions presented within this report will be presented separately as we move into
the budget development and planning process.
The report provides an overview of the City's financial position utilizing elements of the ICMA
Financial Trend Analysis model to examine five-year trend data. Several critical financial
indicators have shifted into unfavorable and warning rating categories including our sales,
property tax and building revenues. These continue to fall off due to the ongoing economic
climate.
The results of the review indicate a continuing decline in both the City's projected operating
position and General Fund fund balance. Based upon the City's weakening financial position,
this report is focused on identifying those factors contributing to the decline as well as outlining
some measures to address the issues during the upcoming budget process.
The City's General Fund reserves continue to be at weak levels with the General Fund
unreserved undesignated fund balance currently estimated to be $245,177 at the 2011 fiscal year
end. Overall, on a combined basis across all funds, the City's reserves have continued to decline
over the past few years.
Introduced within the report are some available Gap Closing Strategies. As mentioned earlier,
specific recommendations for closing identified funding gaps will be forthcoming as part of the
budget development and planning process for Fiscal Year 2011-2012.
Although the 2011-15 Fiscal Sustainability Report provides a look ahead to plan for the financial
issues and challenges facing the City over the next five years, the immediate concern is
producing a balanced and fiscally responsible budget for Fiscal Year 2011-12 and 2012-13. This
will require focusing on reducing expenditures through cost-cutting measures in the short-term as
revenue enhancements are precluded for the most part until the next general election. Long-term
budget balancing actions are needed to gap -fill the both the short and long-term.
The budget development process will require a review of all core and non-core programs in order
to prioritize service delivery functions. This review will need to include all cost elements of
service delivery such as level of staffing, salaries, and benefits. This prioritization is critical as
Gap -Closing Strategies are discussed so that direction may be provided to Staff in developing a
balanced budget for fiscal year 2011-12.
The prospects of increasing revenues in the near term is limited since a ballot measure would be
required to increase any of the City's major sources of revenue and such a measure may only be
placed on the ballot at a general election at which Council members stand election. The next
opportunity to place such a measure on the ballot is in November, 2012.
This report, in addition to efforts undertaken during recent budget cycles. again underscores
staff s commitment to being proactive in developing and putting into action plans to address
budgetary shortfalls the City has faced. It further underscores our service commitment to the
community as we determine a solid course of action as we attempt to balance the needs of our
citizenry with realistic fiscal projections.
Respectfully submit
Marc Puckett
Director of Finance
Fiscal Sustainability Report
Overview
The Fiscal Sustainability Report provides an objective look at the current financial
issues facing the City. The Report is intended to serve as a tool, providing Council and
the public with the insight required to address issues impacting the City's financial
condition. The Report consists of a financial plan that provides supporting information
necessary to developing an action plan after a thorough analysis of all issues that
impact the City's financial condition.
Utilizing the financial tools already in place, the Report looks at the Financial Trends,
Financial Forecast, and Gap Closing Strategies to provide insight into the "fiscal health"
of the City in order to determine a sound financial course of action in future years.
Report Planning Process
The financial planning process is a year round process consisting of short-term and
long-term elements. The City's one-year financial plan or annual operating and capital
budget outlines short-term spending priorities for the ensuing fiscal year.
Annually, City Council identifies which programs, services and projects are of the
highest priority for the coming year. Since many of the programs, services and projects
are considered part of the City's basic program and service delivery or include multi-
year projects, development of a multi-year financial plan is also needed. Once the
City's current priorities have been updated, staff identifies the elements of the adopted
budget that have, or are expected to have, an impact on the financial condition of the
City over the next five years. These elements become the basis for development of
long-term plans to maintain the fiscal stability of the organization for future years.
The process that went into developing the City's Fiscal Sustainability Report included
the involvement of several staff members in preparing various elements of the report.
The process included identification and confirmation of critical issues, analysis of critical
issues identified, analysis of financial trends for revenues and expenditures, and,
development of forecasts for revenues and expenditures.
The 2011-15 Fiscal Sustainability Report consists of the following
sections:
Financial Trend Analysis
A number of financial indicators are analyzed utilizing the International City
Management Association's (ICMA) guidelines contained in "Evaluating Financial
Condition". The analysis of these indicators is designed to present information on the
fiscal health of the City of Petaluma as part of the Fiscal Sustainability Report. This
financial trend analysis primarily focuses on the City's General Fund.
Financial Forecast
The summary of the five-year fiscal sustainability forecast is primarily intended for the
General Fund, incorporating adopted City fiscal policies and practices, assumptions for
revenue trends, expenditure patterns, fund balances and other known financial impacts.
Gap Closing Strategies
Introduced within the report are some available Gap Closing Strategies and an analysis
of the City's major funding gaps or requirements. Specific recommendations for closing
identified funding gaps will be forthcoming as we move into the budget development
and planning process for Fiscal Year 2011-2012.
These strategies are important to address the cash flow and funding gaps within the
City's operations and priority capital projects and to develop a plan of action that will
meet the future operating and infrastructure needs of the community, while ensuring
that future resources can sustain on-going operation and maintenance costs.
Financial Trend Analysis
A comprehensive analysis of the City's financial trends and reserves has been
conducted as part of the Fiscal Sustainability Report. The financial trends and reserve
analysis document the progress that has been made in implementing long-term
solutions to improve the financial condition of the City. This trend analysis also acts as
an early warning system to alert Council and the Administration of trend changes that
will have an impact on the financial condition.
Current Financial Condition — Overview
The Report focuses on the financial condition of the General Fund, the City's key
operating fund. The City's General Fund ended the 2010 fiscal year with a total fund
balance of $1.8 million. These funds are available for appropriation to meet the budget
gap of $1.3 million for fiscal year 2011. The estimated ending General Fund fund
balance for fiscal year 2011 is projected to be $245,177 or less than 1.0% of the
operating budget.
I
However, the City's General Fund reserve policy currently reads, "a minimum fund
balance reserve in the General Fund will be maintained at all times. The City's goal is
to reach an optimal level for this reserve of 15% of the General Fund operating budget"
or $4,908,000 based upon the adopted 2011 operating budget. The policy further
states that, "the unappropriated fund balance in the General Fund will be maintained at
a level sufficient to provide adequate working capital..."
As a general rule, on average an operating reserve equivalent to 25% of the operating
budget or $8,180,000 is considered optimal based upon surveys conducted of public
sector agencies' reserve policies. As a matter of practice, the reserve policies should
be reviewed annually and revised as appropriate. Further, a practice of funding the
reserves should be considered together with funding all service priorities during the
budget development process to ensure that the City's long term fiscal health is
protected. Operating the City without adequate reserve balances for significant periods
of time is not prudent and may create emergency cash flow shortfalls. Further, the lack
of adequate reserve balances negatively impacts the City's credit rating therefore
increasing future borrowing costs.
Financial Trend Analysis
The City's financial condition is also quantitatively measured using a financial trend
monitoring system. Because of the City's commitment to long-term financial planning
and funding of necessary reserves, efforts to implement cost reduction strategies
including measures to streamline service delivery have already been undertaken by City
departments over the past three budget cycles. These cost-cutting actions already
taken demonstrate the City's commitment to improving the organization's long-term
fiscal health.
Financial trends are analyzed each year together with many other factors in order to
better understand the financial condition of the City. Some of these factors considered
include:
The economic condition of the City and the surrounding region;
v Types and amounts of revenues and whether they are sufficient and the right mix
to support the current and projected population levels;
Expenditure levels and whether these expenditures are sufficient to provide the
desired level of services currently and in the future;
r Fund balances and their impact upon current City financial resources.
These issues and others are examined in determining the current financial condition of
the City. The City's fiscal policies have also been considered in connection with this
analysis. Data used in performing the financial trend analysis was primarily drawn from
the City's Comprehensive Annual Financial Reports for fiscal years Fiscal Year 2006
through and including the draft financial statements for Fiscal Year 2010.
Consequently, all trends are based on the best available financial data available as of
June 30, 2010, and include only limited changes that have occurred since that time.
A summary of some of the key trends measured and changes in those trends from the
last fiscal year follows.
Revenue Trend Analysis
Sales Taxes, Transient Occupancy Taxes, and Licenses and Permit revenues are three
examples of forms of elastic revenues that the City receives. Elastic revenues are
responsive to market demand are vary directly in proportion to economic business
cycles that affect market demand.
Sales Tax Revenues: For the second quarter in a row every region in California
experienced increases in sales tax cash receipts from the same quarter a year ago.
Northern California increased by 3.9% and Southern California increased by 3.6%
resulting in a statewide increase of 3.7%.
MuniServices,LLC provides sales tax analysis to the City of Petaluma and many cities
statewide. A copy of Muniservices' most recent cash receipts analysis report for the
City of Petaluma is attached (Exhibit A). The cash receipts analysis report presents
performance information for City, other jurisdictions in Sonoma county, geographical
regions, and statewide comparisons by quarter, fiscal year to date and benchmark year.
Per the report, the City's sales tax revenues on a cash basis have increased by 3.1%
for the year to date reporting period (July thru December) as compared to the same
period in the prior fiscal year. As a whole, jurisdictions within Sonoma County saw an
average increase in their sales tax collections of 7.9% or 4.8% more than in Petaluma
for the same two quarters as compared to the prior year. Statewide, sales tax
collections increased 5.5% for the same time period.
For the most recent four quarters (January thru December) the City's sales tax receipts
increased by 1.3% which slightly exceeded the statewide average increase of 1.1%.
County -wide, sales tax receipts increased by an average of 3.1 % over the same period.
The following table (Table 1) shows the five year history and five year forecast for sales
tax collections in the City. The fiscal year 2011 adopted sales tax revenue estimate of
$8,165,000 is $3,484,972 or 30% less than fiscal year 2008 levels when sales tax
collections peaked at $11,649,972. It is anticipated that sales tax revenue estimates will
increase by 3% in fiscal years 2012 and 2013. During fiscal year 2012, a major retail
center is projected to open. Assumptions for sales tax receipts from similar businesses
based on existing market data provided by our sales tax consultant have been included
in the revenue estimates displayed in the charts below. Then, in fiscal year 2014 and
2015, sales tax collections are projected to increase by 4% and 5% respectively.
Table 1
$12,000,000
$10,000,000 - !- -
$8,000,000
$6,000,000 ....
$4,000,000 -.
$2,000,000 - -
$0 . -
Property tax revenue: Property tax revenue collections have declined by 9.5% from
$7,393,338 collected during fiscal year 2008 to a total revenue estimate for fiscal year
2011 of $6,686,800 as revised during the first quarter General Fund budget review.
This is due to a decline in secured property values during the prior fiscal year. This
downward adjustment was believed to be an indication that property tax revenues will
continue to grow at a gradual pace over the forecast period.
There are three major factors that contribute to year to year valuation changes. First,
Proposition 13 allows the County Assessor to increase or decrease the taxable value of
real property by the net change in CPI growth, with a cap of 2% growth per year.
Second, property valuation is increased or decreased annually by transfer of ownership
transactions that occur in the prior calendar year. Upon sale of real property, the base
taxable value of the property should equal its sale price. Third, valuation can be
decreased by the County Assessor through individual appeals or mass appeals if
warranted by market conditions.
Based upon the most recent property tax revenue estimates provided by the Sonoma
County Treasurer -Tax Collector's Office, the City will receive $6,807,900 in property tax
revenues during fiscal year 2011. This amount is an increase of $121,100 or 1.8%
more than the fiscal year 2011 first quarter revised revenue estimate for property tax
collections.
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Property tax revenue: Property tax revenue collections have declined by 9.5% from
$7,393,338 collected during fiscal year 2008 to a total revenue estimate for fiscal year
2011 of $6,686,800 as revised during the first quarter General Fund budget review.
This is due to a decline in secured property values during the prior fiscal year. This
downward adjustment was believed to be an indication that property tax revenues will
continue to grow at a gradual pace over the forecast period.
There are three major factors that contribute to year to year valuation changes. First,
Proposition 13 allows the County Assessor to increase or decrease the taxable value of
real property by the net change in CPI growth, with a cap of 2% growth per year.
Second, property valuation is increased or decreased annually by transfer of ownership
transactions that occur in the prior calendar year. Upon sale of real property, the base
taxable value of the property should equal its sale price. Third, valuation can be
decreased by the County Assessor through individual appeals or mass appeals if
warranted by market conditions.
Based upon the most recent property tax revenue estimates provided by the Sonoma
County Treasurer -Tax Collector's Office, the City will receive $6,807,900 in property tax
revenues during fiscal year 2011. This amount is an increase of $121,100 or 1.8%
more than the fiscal year 2011 first quarter revised revenue estimate for property tax
collections.
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Property tax revenue: Property tax revenue collections have declined by 9.5% from
$7,393,338 collected during fiscal year 2008 to a total revenue estimate for fiscal year
2011 of $6,686,800 as revised during the first quarter General Fund budget review.
This is due to a decline in secured property values during the prior fiscal year. This
downward adjustment was believed to be an indication that property tax revenues will
continue to grow at a gradual pace over the forecast period.
There are three major factors that contribute to year to year valuation changes. First,
Proposition 13 allows the County Assessor to increase or decrease the taxable value of
real property by the net change in CPI growth, with a cap of 2% growth per year.
Second, property valuation is increased or decreased annually by transfer of ownership
transactions that occur in the prior calendar year. Upon sale of real property, the base
taxable value of the property should equal its sale price. Third, valuation can be
decreased by the County Assessor through individual appeals or mass appeals if
warranted by market conditions.
Based upon the most recent property tax revenue estimates provided by the Sonoma
County Treasurer -Tax Collector's Office, the City will receive $6,807,900 in property tax
revenues during fiscal year 2011. This amount is an increase of $121,100 or 1.8%
more than the fiscal year 2011 first quarter revised revenue estimate for property tax
collections.
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Property tax revenue: Property tax revenue collections have declined by 9.5% from
$7,393,338 collected during fiscal year 2008 to a total revenue estimate for fiscal year
2011 of $6,686,800 as revised during the first quarter General Fund budget review.
This is due to a decline in secured property values during the prior fiscal year. This
downward adjustment was believed to be an indication that property tax revenues will
continue to grow at a gradual pace over the forecast period.
There are three major factors that contribute to year to year valuation changes. First,
Proposition 13 allows the County Assessor to increase or decrease the taxable value of
real property by the net change in CPI growth, with a cap of 2% growth per year.
Second, property valuation is increased or decreased annually by transfer of ownership
transactions that occur in the prior calendar year. Upon sale of real property, the base
taxable value of the property should equal its sale price. Third, valuation can be
decreased by the County Assessor through individual appeals or mass appeals if
warranted by market conditions.
Based upon the most recent property tax revenue estimates provided by the Sonoma
County Treasurer -Tax Collector's Office, the City will receive $6,807,900 in property tax
revenues during fiscal year 2011. This amount is an increase of $121,100 or 1.8%
more than the fiscal year 2011 first quarter revised revenue estimate for property tax
collections.
The following table (Table 2) shows a five year history of property tax collections and a
five year forecast of future property tax collections. Property tax revenue collections are
projected to increase by 2.5% in fiscal year 2012 then increase at a rate of 3% per year
in fiscal years, 2013, 2014 and 2015.
Table 2
$8,000,000
$7,000,000 1!
$0'000'000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
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Transient Occupancy Taxes: Transient Occupancy Tax (TOT) is levied for the privilege
of occupying a room or rooms or other living space in a hotel, inn, tourist home or
house, motel or other lodging (defined below) for a period of 30 days or less.
Other lodging includes, but not limited to:
• Camping sites
• Space at a campground or recreational vehicle park
The authority to levy TOT is granted to the legislative bodies of both cities and counties
by Revenue and Taxation Code 7280. The authority to collect TOT is generally granted
to the County or City Tax Collector by the legislative bodies by means of an ordinance.
Pursuant to existing Council Policy, $1,000,000 of the TOT is retained and used a
general revenue source to support General Fund funded operations. A total of
$1,513,000 in Transient Occupancy Taxes was received in Fiscal Year 2009, however.
This change in policy was made to off -set declining revenues. This source of revenue
was projected to be maintained at $1,000,000 and adopted at that level for Fiscal Year
2010. Revenue estimates adopted for Fiscal Year 2010 and projections for Fiscal
Years 2011 thru 2015 also anticipate no increase in TOT revenues due to a projected
continuation of current Council Policy to use TOT revenues collected over $1,000,000 to
fund the Visitor Center operations and the Petaluma Visitors Program, An agreement
with the Petaluma Downtown Association was entered into during June, 2010, to
oversee the Visitor Center operations and administer the Visitors Program. It may be
desirous to revisit existing Council Policy regarding the use of only $1,000,000 of the
TOT revenues as a general revenue source. As TOT revenues increase and in
consideration of other programs and service delivery cuts that may be necessary to
balance the budget, it may be desirous to use a larger portion of TOT revenues for
general purposes in order to maintain service delivery in other areas. The following
table (Table 3) summarizes the TOT receipts for the past five years and forecast for the
next five years.
Table 3
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
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Licenses and Permit revenues: Licenses and Permit revenues were anticipated to
decrease in construction permits and inspection fees due to the recession and lack of
construction activity. Construction activity is expected to rebound slowly based upon
consensus economic data suggesting a slow growth recovery in the local economy. As
a result, License and Permit revenue projections reflect these slaw growth economic
assumptions.
The following table (Table 4) provides a five year historical view and five year forecast
of the City's License and Permit revenues. The prior year reduction in these revenues
from Fiscal Year 2006 to Fiscal Year 2007 is due to development related revenue that
was previously accounted for within the General Fund being transferred into and
accounted for separately in the newly created Development Services enterprise fund.
Looking forward, this revenue source is expected to increase during Fiscal Year 2012
by approximately $250,000 or 33% partly as a result of the anticipated opening of a
major retail center. However, revenue projections for 2013 are anticipating that revenue
collections from this source will return to Fiscal Year 2011 levels of $741,550 then
increase minimally by 2% in Fiscal Years 2014 and 2015. These revenue projections
anticipate very modest growth in development activity for the next 3-4 years.
Table 4
$3,500,000 ,
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000 -
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Intergovernmental Revenues: General Fund Intergovernmental revenues are projected
to have decreased by 7.8 % or $392,494 in Fiscal Year 2010 as compared to Fiscal
2009 from $5,056,662 to $4,664,168. However, as a percentage of operating revenues,
the intergovernmental revenues decreased from 14.4% to 14% when comparing the two
fiscal years.
By analyzing intergovernmental revenues as a percentage of operating revenues, the
City can determine the extent of its dependence upon resources from other
governments. Excessive dependence on this type of revenue can be detrimental to the
financial health of the City as the factors controlling their distribution are beyond the
City's control.
Per the first quarter budget review for Fiscal Year 2011, Intergovernmental revenues
were projected to decrease slightly by $72,000 or 1.5% from $4,673,300 to $4,601,250
during the current fiscal year. This revenue source is projected to remain flat in Fiscal
Year 2012 then increase by 2% for Fiscal Years 2013 thru 2015 based upon historical
trends.
The following table (Table 5) shows a five-year history and five-year forecast for all
major revenue categories within the General Fund.
Table 5
$14,000,000
$12,000,000
$10,000,000
$6,000,000
— Property Taxes
Sales and Use Taxes
--Business Lic & Prop
Trf Taxes
^.".."'- ._......,. franchise Fees
$4,000,000
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$2,000,000
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Fines & Forfeitures &
Penalties
Investment Earnings
and Rent
Charges for Services
Other Transfers and
Sources
Expenditures Trend Analysis: Comparison of Expenditures by Category
Salaries and Wages: Salaries and Wages are projected to have decreased by 6.4%
overall or $1,349,658 as of Fiscal Year 2010 as compared to Fiscal Year 2009. The
adopted Fiscal Year 2011 budget reflects an additional reduction of 3.6% or $723,799
as projected. Salaries and Wages for FY 11-12 thru 14-15 are adjusted to reflect the
elimination of furlough hours and no COLA increases. However, even though no COLA
increases are anticipated, employees that are not at the top step of their pay grade will
continue to receive step increases if their performance meets standards. Any increase
in Salaries and Wages over the forecast period in excess of current projections will
increase the projected budgetary imbalance proportionally. Beginning in Fiscal Year
2013, six Firefighter/Paramedics that were previously funded by Grant money have
been included in the General Fund salary and wage projections. The following table
(Table 6) provides a five-year historical comparison and five-year forecast for total wage
and salaries paid to employees from the City's General Fund.
Table 6
$25,000,000
$20,000,000 -
$15,000,000
$10,000,000 „i
$5,000,000
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Fringe Benefits: Fringe benefit expenditures as a percentage of General Fund salaries
and wages, increased by a total of 2.2% from 33.6% to 35.8% when comparing Fiscal
Year 2010 to Fiscal Year 2009 spending levels. This increase in fringe benefits as a
percent of salaries and wages is attributable to the salaries and wages ($1.3 million
reduction in total) paid decreasing at a greater rate of decline than fringe benefit costs
over the referenced period. Fringe benefit expenditures as a percentage of salaries and
wages are projected to increase slightly during Fiscal Year 2011 from 35.8% to 36.1%
as a result of the projected additional $724,000 reduction in salary and wage payments.
The largest percentage component of the total benefit costs is the contribution to the
City's defined benefit retirement program. The retirement contribution percentage is
projected to increase by approximately 1.9% for the general employee group and
approximately 5% for the public safety group (policemen and firefighters) for Fiscal Year
2012. These contributions are projected to increase over 2013-2015 due to changes in
actuarial assumptions as a result of a plan experience study conducted by the plan's
actuary. As a result of the study, the actuary has enacted differing assumptions for
amortization of investment gains and losses, mortality rates for retired lives (retirees are
living longer) and a 0.25% decrease in the assumed investment rate of return. The City
has taken steps to reduce increases in the contribution rate and is currently working
with the plan actuary to limit growth in the contribution rate where possible. The second
largest component of benefit costs is health care. During the current fiscal year, health
care costs are increasing by 9%. For the forecast period, health care costs are
projected to increase at an annual rate of 9%. A five-year historical comparison and
five-year forecast of total fringe benefits costs is displayed in the table following (Table
7).
Financial Forecast
General Fund Revenue and Expenditure Growth
In each revenue and expenditure category an initial summary is provided with the
following:
r Historic Growth Rate — The average annual rate of growth for the past five years
from FY 2006 to FY 2010.
�. 2011 Projected Growth Rate — Average annual rate of growth projected for the
current five-year forecast.
Operating Position: An operating surplus is when revenues exceed expenditures as of
the end of a fiscal year point -in -time comparison. Conversely, when expenditures
exceed revenues there is said to be an operating deficit. The City is projected to have a
operating deficit for Fiscal Year 2010 of $231,088. The City has ended the Fiscal Year
with an operating deficit in four of the past five fiscal years having spent $6,867,950
more than it received in revenue over this same period. Based upon forecasts included
in the attached exhibit (Exhibit 1) and absent any changes in projected spending
patterns, the City is projected to spend more than it receives in revenue over the next
five years. Based upon these historical trends and forecasts, structural changes are
needed to reduce the cost of the City's current service delivery model, or, new revenue
must be identified in order to maintain the existing level of service delivery. Absent any
change, the City will have a projected deficit within its General Fund of approximately
$17.5 million at the end of Fiscal Year 2015.
Fund Balance Analysis: Unreserved fund balance refers to those dollars available for
use in the event of a financial emergency, short-term revenue fluctuations or an
economic downturn. The City's fiscal policy goal is to attempt to operate each year at a
surplus to ensure the maintenance of adequate reserve levels. Unreserved,
undesignated fund balance in the City's General Fund is currently projected to equal
$124,077 as of the end of Fiscal Year 2011.
The City's General Fund reserve policy currently reads, "a minimum fund balance
reserve in the General Fund will be maintained at all times. The City's goal is to reach
an optimal level for this reserve of 15% of the General Fund operating budget" or
$4,908,000 based upon the adopted 2011 operating budget. The policy further states
that, "the unappropriated fund balance in the General Fund will be maintained at a level
sufficient to provide adequate working capital..." As a general rule, on average an
operating reserve equivalent to 25% of the operating budget or $8,180,000 is
considered optimal based upon surveys conducted of public sector agencies' reserve
policies. As a matter of practice, the reserve policies should be reviewed annually and
revised as appropriate. Further, a practice of funding the reserves should be
considered together with funding all service priorities during the budget development
process to ensure that the City's long term fiscal health is protected. Operating the City
without adequate reserve balances for significant periods of time is not prudent and may
create emergency cash flow shortfalls. Further, the lack of adequate reserve balances
negatively impacts the City's credit rating therefore increasing future borrowing costs.
Financial Forecast
The five-year financial forecast identifies the City's current and projected financial
condition to determine if funding levels are adequate and if projected expenditures can
be sustained. The forecast provides a basis for decision making and shows the
potential impact of current decisions on the future.
In response to a 39.4% decline in revenues over the past five budget cycles, operating
expenditures were reduced by 37%. But, despite the cost containment measures, the
budget forecast still shows potential budget deficits over remaining four years of the
forecast.
The lingering effect of the downturn in the economy continues to have an impact on City
revenues. Sales taxes and development related service revenue estimates have been
reduced in the Fiscal Year 2011 adopted budget from the prior fiscal year.
Forecast expenditures are increased by inflation, forecast assumptions or known
contractual increases. As a result of revised forecast projections, City revenues are
anticipated to grow by only 7.0% in total through Fiscal Year 2015. Expenditures,
however, are anticipated to grow by over 17% over the same time period. The Fiscal
Year 2011 forecast shows projected operating deficits in each year of the five years of
the forecast and negative fund balances beginning in 2011. Clearly, the City will have
to address the projected deficits in order to improve its operating position and fund
balances as the City will not adopt an unbalanced budget.
Forecast Assumptions
Beyond the economic and growth/trend assumptions used in the forecast, information
specific to the City of Petaluma is included in the forecast:
• New positions — No new city positions have been added within the forecast
period.
• Fiscal Year 2011-12 thru 2014-15 Salaries and Wages are adjusted without
furlough hours and no COLA.
• Beginning in Fiscal Year 2012-13, 6 Firefighters are added to the General Fund
salaries and wages.
• Step increases for employees that are not at the top of the current wage scale for
their position have been included in the forecast.
• The retirement contribution percentage is projected to increase by approximately
1.9% for the general employee group and approximately 5% for the public safety
group (policemen and firefighters) for Fiscal Year 2012. These contributions are
projected to increase over 2013-2015 due to changes in actuarial assumptions
as a result of a plan experience study conducted by the plan's actuary
• Health benefit costs are projected to increase at an annual rate of 9%.
• Revenues are generally anticipated to grow by an inflation factor of 2% unless
otherwise indicated.
• Fiscal Year 2010-11 Revised Est. Benefits reflect fully charging Worker's Comp
rates.
• Fiscal Year 2011-12, thru 2014-15 Benefits increase is substantially due to PERS
anticipated increases, fully charged Worker's Comp rates and 9% health care
increases.
• Fiscal Year 2011-12 thru 2014-15 Services & Supplies assumes a 2% per year
increase.
• Fiscal Year 2011-12 thru 2014-15 Intragovernmental remains flat.
• Fiscal Year 2011-12 thru 2014-15 Fixed Assets/Capital Outlay remains flat.
Factors Not Included in the Forecast
• This forecast is based on the General Fund only.
• No new or enhanced programs are included in the forecast.
Gap Closing Strategies
To analyze the cash flows and funding gaps of the City's General Operating Fund and
develop a gap -closing strategy that will meet the future operating needs of the
community, while ensuring that future resources can sustain ongoing operating, capital
and maintenance costs, funding strategies must be identified as part of the Fiscal Year
2011-2012 budget development process.
Due to the lingering organizational effects of five consecutive years of budgetary
spending cuts, recommendations for additional cost cutting measures should be
considered together with a prioritization of all service delivery functions, Revenue
enhancement options must also be part of the budget balancing discussion if the
existing level of service delivery is to be maintained. Unfortunately, the City is limited in
its revenue raising efforts due to referendums passed at the State level that limit the
City's taxing authority. Service level priorities need be established each year as part of
the budget development process. Once created, these priorities need to be utilized in
creating a balance between the level of services that can be provided within the
available resources to fund those services.
etaluma Fiscal Sustainability Report
Summary of General Fund 5 -Year Projection
Est. Actual
Revenue Categories
Actual 2006 Actual 2007 Actual 2008 Actual 2009
2010
Property Taxes
$6,030,426
$7,135,526
$7,392,338
$7,172,636
$6,923,955
Sales and Use Taxes
10,726,182
11,483,300
11,649,972
9,445,467
8,631,248
Business Lic & Prop Trf Taxes
2,622,246
2,119,475
1,709,377
1,491,536
1,627,936
Franchise Fees
2,147,517
2,277,687
2,549,184
2,672,684
2,584,376
Licenses and Permits
3,108,562
1,788,069
1,439,710
608,355
786,533
Fines & Forfeitures & Penalties
500,722
689,030
661,025
614,854
603,326
Investment Earnings and Rent
1,256,908
859,278
709,223
547,044
411,693
Intergovernmental Revenues
4,679,067
5,052,139
4,923,245
5,056,662
4,664,168
Charges for Services
6,961,780
7,576,966
5,293,029
4,340,028
5,685,093
Other Revenues
1,975,234
11,884,033
5,857,198
966,911
0
Transient Occupancy Tax Trf
1,000,000
1,000,000
1,000,000
1,513,000
1,000,000
Other Transfers and Sources
378,000
140,000
327,805
781,000
394,474
Total Revenues
$41,386,644
$52,005,503
$43,512,106
$35,210,177
$33,312,802
Est. Actual
Expenditure Categories
Actual 2006 Actual 2007 Actual 2008 Actual 2009
2010
Salaries and Wages
$20,038,153
$21,687,797
$23,433,363
$21,196,857
$19,847,199
Benefits
9,715,837
8,455,663
9,079,612
7,130,661
7,110,884
Services & Supplies
6,969,740
6,629,034
7,220,115
4,956,667
4,745,751
Intragovernmental
2,741,500
2,559,950
2,949,450
983,050
1,734,100
Fixed Assets & Cap Outlay
1,695,248
11,092,189
5,752,379
826,952
57,677
Transfers Out
319,500
1,188,000
438,000
1,691,575
48,279
Total Expenditures
$41,479,978
$51,612,633
$48,872,919
$36,785,762
$33,543,890
Rev. Over/Under Exp.
($93,334)
$392,870
($5,360,813)
($1,575,585)
($231,088)
Fund Bal. Beg. of Year
$8,663,650
$8,570,320
$8,963,184
$3,614,846
$2,039,265
Fund Bal. End of Year
$8,570,320
$8,963,184
$3,614,846
$2,039,265
$1,808,177
etaluma Fiscal Sustainability Report
Summary of General Fund 5 -Year Projection
Adopted
Revised Est.
Forecast
Forecast
Forecast
Forecast
2011
2011 1st Qtr
2012
2013
2014
2015
$6,740,700
$6,807,900
$6,978,098
$7,187,440
$7,403,064
$7,625,156
8,165,000
8,578,600
8,835,958
9,101,037
9,465,078
9,938,332
1,537,500
1,632,750
1,665,405
1,698,713
1,732,687
1,767,341
2,576,800
2,500,100
2,500,100
2,550,102
2,601,104
2,653,126
735,850
741,550
991,550
756,381
771,509
786,939
540,700
581,400
581,400
593,028
604,889
616,986
389,500
374,150
374,150
381,633
389,266
397,051
4,673,300
4,601,250
4,601,250
4,693,275
4,787,141
4,882,883
4,884,800
4,482,900
4,482,900
4,572,558
4,664,009
4,757,289
117,300
64,800
64,800
66,096
67,418
68,766
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
132,900
132,900
132,900
132,900
132,900
132,900
$31,494,350
$31,498,300
$32,208,511
$32,733,163
$33,619,064
$34,626,770
Adopted
Revised Est.
Forecast
Forecast
Forecast
Forecast
2011
2011 1st Qtr
2012
2013
2014
2015
$19,123,400
$19,123,400
$19,756,950
$20,404,650
$20,363,550
$20,558,000
6,905,100
7,449,100
8,380,050
9,523,000
10,400,100
11,254,350
5,064,350
5,064,350
5,157,600
5,248,950
5,347,050
5,448,400
1,416,250
1,416,250
1,416,250
1,416,250
1,416,250
1,416,250
8,200
8,200
8,200
8,200
8,200
8,200
0
0
0
0
0
0
$32,517,300
$33,061,300
$34,719,050
$36,601,050
$37,535,150
$38,685,200
($1,022,950)
($1,563,000)
($2,510,540)
($3,867,887)
($3,916,086)
($4,058,430)
$1,808,177
$1,808,177
$245,177
($2,265,363)
($6,133,249)
($10,049,336)
$785,227
$245,177
($2,265,363)
($6,133,249)
($10,049,336)
($14,107,766)
2010-11 PROPERTY TAX ALLOCATION
ESTIMATE
CITY OF
PETALUMA
AB8/ PROP 13 FACTOR CALCULATION
3,896,644 02
2009-10 AB8 TAX ALLOCATION BY TRA
11,815,342 06
2010-11 ABS GROWTH BY TRA
(214,576.79)
2010-11 ABS TAX ALLOCATION BY TRA
11,600,765.27
2010-11 ADJ GROWTH FACTOR FOR PER CAPITA AND FINANCE SHE'
(0.013171)
(ADJUSTED FOR RDA GROWTH)
(2,263,192.51)
2009-10 ERAF 93-94 PER CAPITA SHIFT
(117,947.38)
2009-10 ERAF 92-93&93-94 DEPT FINANCE SHIFT
(2,459,108.11)
TOTAL 2009-10 ERAF SHIFT
(2,577,055 49)
MULTIPLY BY ADJUSTED GROWTH %
(0.013171)
2010-11 ERAF SHIFT
(2,543,113.09)
2010-11 ADJUSTED ABS ALLOCATION
9,057,652.18
2010-11 ABS I PROP 13 FACTOR 666,047,427.19
0.01359911
PROPERTY TAX REVENUE SUMMARY
3,896,644 02
SECURED BEFORE RDA
8,642,395.71
AB454 UNITARY AND RAILROAD UNITARY
66,319.48
UNSECURED BEFORE RDA
318,821 26
HOPTR BEFORE RDA
83,550.17
LESS: RDA ANNUAL TAX INCREMENT (ADJ FOR AGREEMENTS)
(2,263,192.51)
LESSGEOTHERMAL & BUSINESS IMPOUNDS
(39,993.67)
SUBTOTAL
6,807,900.44
VLF SWAP
3,896,644 02
TRIPLE FLIP
2.135,651 71
LESS' ESTIMATED SB2557 ADMINISTRATION FEE (EFFECTIVE 2006-
(191,504 66)
07, VLF SWAP & TRIPLE FLIP INCLUDED IN CALCULATION)
LESS: ESTIMATED COST REIMBURSEMENT FOR UNSECURED
(8,074,13)
COLLECTIONS
ESTIMATED NET PROPERTY TAX REVENUE FROM CERTIFIED VALUE
12,640,617.38
Note:
(1) The above estimate is based on Certified Values and does not reflect mid -year
adjustments to the Tax Roll. Property tax revenues generally decrease throughout
the Tax Year due to Tax Roll adjustments (e g - assessment appeals, valuation
reductions, other corrections). While these adjustments are typically small in nature,
large assessment appeals could have a material affect on the Tax Roll and the
revenue apportioned to taxing agencies
NON iNFIDENTIAL CITY OF. _TALUMA* NON -CON `NTIAL
Sales Tax Net Cash Receipts: Three Advances Plus Clean -Up Payment
`� MuniServices, LLC
Last Year Cash Received >
Sep -08
Dec -08
Mar -09
Jun -09
Sep -09
Dec -09
Jul -09 thru
Jul -10 thru
Jan -09 thru
Jan -10 thru
This Year Cash Received >
Sep -09
Dec -09
Mar -10
Jun -10
Sep -10
Dec -10
Dec -09
Dec -10
$ Chg
% Chg
Dec -09
Dec -10
$ Chg
% Chg
Calendar Sales Quarter>
09Q2
0903
09Q4
10Q1
1002
1003
2 Quarters
2 Quarters
1
SANTA ROSA
-17.7
-16.8
-12.7
-1.7
5.9
3.7
12,195,932
12,781,224
585,292
4.8
25,883,075
25,375,542
-507,533
-2.0
2
SONOMA COUNTY
-23.6
-21.6
-5.2
23
4.1
11.6
5,858,599
6,320,865
462,266
7.9
11,311,972
11,664,706
352,734
3.1
3
CITY OF PETALUMA*
38.6
-7.8
-3.6
3.2
26.6
-11.9
4,383,485
4,521,431
137,946
3.1
8,669,945
8,785,390
115,445
1.3
4
ROHNERT PARK
-15.1
-15.6
-5.6
-0.5
3.3
11.1
2,934,811
3,145,063
210,252
7.2
6,025,493
6,132,448
106,955
1.8
5
HEALDSBURG
-167
-32.7
-3.1
-1.2
60
37.4
1,374,026
1,654,804
280,778
204
2,800,768
3,049,065
248,297
8.9
6
WINDSOR
-13.9
-14.0
-14.4
-15.7
-6.5
-1.3
1,552,266
1,492,776
-59,490
-38
3,178,297
2,874,965
-303,332
-9.5
7
SONOMA
-209
-13.2
-23.6
0.5
-0.7
7.4
1,038,273
1,073,238
34,965
34
2,053,795
1,953,979
-99,816
49
8
COTATI
-25.4
.17.6
25.6
8.7
7.8
1.8
729,171
763,518
34,347
4.7
1,405,519
1,561,923
156,404
11.1
9
SEBASTOPOL
-16.3
-9.9
-5.9
3.7
1.1
-3.8
685,778
676,293
-9,485
-1.4
1371,246
1,350,330
-20,916
-1.5
10
CLOVERDALE
-15.7
-16.9
3.9
10.0
-4.2
17.0
280,326
298,544
18,218
6.5
509,570
543,233
33,663
6.6
ALAMEDA CO.
-20.7
-14.6
-6.2
25
10.2
3.8
96,270,401
102,853,379
6,582,978
6.8
197,614,265
201,888,934
4,274,669
22
CONTRA COSTA CO.
-37.0
-8.4
-4.7
-2.9
66
-2.7
57,736,270
58,715,823
979,553
1.7
118,089,910
116,721,495
-1,368,415
-12
MARIN CO.
-18.7
-10.7
-1.4
3.2
72
3.2
18,417,177
19,358,590
941,413
5.1
37,051,745
38,114,490
1,062,745
2.9
NAPA CO.
-17.9
-11.4
-87
2.0
7.8
0.6
11,506,778
11,971,697
464,919
40
22,887,810
22,891,975
4,165
00
SAN FRANCISCO CO.
-17.5
-17.7
-6.1
-2.1
8.6
7.1
62,763,776
67,662,690
4,898,914
78
129,489,745
131,537,259
2,047,514
1.6
SAN MATEO CO
-23.7
-10.2
-2.9
5.0
13.8
0.2
53,634,456
57,138,664
3,504,208
65
108,745,093
112,584,723
3,839,630
3.5
SANTA CLARA CO.
-23.5
-11.9
4.7
7.6
18.0
8.0
136,311,148
153,569,682
17,258,534
12.7
280,097,233
298,323,466
18,226,233
6.5
SOLANO CO
-125
-12.5
-17.5
-4.8
-0.8
-2.3
26,834,622
26,420,582
-414,040
-1.5
55,925,114
52,020,646
-3,904,468
-70
SONOMA CO. *
-21.8
-16.7
-8.5
-0.5
6.7
4.4
31,032,667
32,727,756
1,695,089
5.5
63,209,680
63,291,581
81,901
0.1
S.F. BAY AREA*
.23.2
-12.9
-5.9
2.4
11.1
3.8
494,507,295
530,418,863
35,911,568
7.3
1,013,110,595
1,037,374,569
24,263,974
2.4
CENTRAL COAST
-19.2
-12.3
-5.9
3.1
94
3.5
55,794,471
59,289,949
3,495,478
6.3
109,687,687
112,142,996
2,455,309
2.2
CENTRAL VALLEY
-22.2
-15.8
-10.5
-2.5
55
6.0
207,225,141
219,062.868
11,837,727
5.7
423,922,577
420,887,466
3,035,111
-0.7
NORTH COAST
-21.5
-15.9
-24
140
5.8
1.9
19,505,416
20,242,827
737,411
3.8
38,716,493
40,374,460
1,657,967
4.3
OTHER NORTHERN
-19.2
-15.2
-5.0
6.9
6.7
5.0
24,365,410
25,769,916
1,404,506
5.8
47,323,086
48,801,407
1,478,321
3.1
SACRAMENTO VALLEY
-19.4
-15.3
-4.7
-14
5.2
1.5
163,078,912
168,411,002
5,332,090
3.3
328,954,661
328,972,891
18,230
0.0
NORTHERN CALIF
.22.0
.14.0
-6.6
1.0
8.5
3.9
964,476,645
1,023,195,425
58,718,780
6.1
1,961,715,099
1,988,553,789
26,838,690
1.4
INLAND EMPIRE
-21.7
.15.5
-34
-0.4
6.1
3.6
226,458,781
237,378,101
10,919,320
4.8
465,801,083
471,999,047
6,197,964
13
OTHER SOUTHERN
-19.0
40.9
-02
-16.4
9.0
10.8
10,144,397
11,141,962
997,565
9.8
21,769,032
21,873,492
104,460
05
SOUTH COAST
-19.5
-15.4
-6.1
0.4
6.6
3.5
1,055,982,526
1,109,010,985
53,028,459
5.0
2,164,854,964
2,182,947,579
18,092,615
0.8
SOUTHERN CALIF
-19.9
-15.5
-5.6
0.1
6.5
3.6
1,292,585,704
1,357,531,048
64,945,344
5.0
2,652,425,079
2,676,820,118
24,395,039
0.9
STATE TOTAL
-20.8
-14.8
-6.0
0.5
7.3
3.7
2,257,062,349
2,380,726,473
123,664,124
5.5
4,614,140,178
4,665,373,907
51,233,729
1.1
`� MuniServices, LLC
Ml>f1MSMO WIVA s i
City of Petaluma
Sales ax Digest Sunimary
Collectimis through September 2050
Sales throtigh Jatate 2010 (2QZ2050)
For the second quarter in a row, California experienced sales tax growth. This quarter also marked the
first quarter in years with all regions in California showing positive growth. Statewide sales tax receipts
during July -September 2010 grew by 7.1% from the same three months in 2009. Northern California
grew by 8.5% and Southern California grew by 6.4%. As for City of Petaluma, its sales tax receipts
changed by 26.6% from July -September 2009 to July -September 2010.
CALIFORNIA'S FUTURE
Expect General Retail sales to be flat in FY 2011 with growth between 3.5% and 4.5% through FY 2015.
Sales tax from Services Stations will continue to be volatile. Construction will continue its drop during FY
2011 by close to 15% before growing by 2.5% per year through FY 2014. Food Products, which includes
Restaurants, will grow with core CPI of 2.4% per year with price pressures upward of 3.5% in FY 2015.
Auto sales will remain flat during FY 2011 until pent up demand will cause buyers, who will be seeking
lower-priced vehicles, to increase purchases during FY 2012 and 2013 by 3%. County Pool receipts will
follow the auto sales trends as third -party vehicle sales resume along with overall car sales volume.
In order to establish an economic rebound, California needs job growth both locally and regionally to
increase spending business travel. Housing prices must stabilize and register 5% growth to restore some
levels of the wealth effect and to strengthen consumer confidence. A broader taxable base and a lower
rate would provide better growth as well as a more stable source of sales tax revenues over time.
Local Collections
Share of County Pool (13.80%)
Share of State Pool (.19%)
SBE Net Collections
Less: Amount Due County 2.50%
Less: Cost of Administration
Net 2Q2010 Receipts
Net 2Q2009 Receipts
Actual Percentage Change
2,057,451
195,742
2,254,280
(56,357)
(24,147)
2,173,776
1,717,638
26.6%
www. MuniServices.coin (800) 800-8181 page I
Citgo of Petaluma
Local Collections $2,057,451
Less: Payments for Prior Periods (49,008)
Preliminary 2Q2010 Collections 2,008,443
Projected 2Q2010 Late Payments 11,535
Projected 2Q2010 Final Results 2,019,978
Actual 2Q2009 Results 1,936,158
Projected Percentage Change 4.3%
HISTORICAL CASH COLLECTIONS ANALYSIS BY QUARTER
$3,500
S3,000
$2.500
$ 2,11011
2
S 1,500
L'
$ 1 ,0 it
Z
5500
lin th all sa n d, of $)
$Sn
S70
u
$60
$50
S40
$30 i
c
E
$20 9
SIO
$0
IQ2008 2Q2008 3Q2008 4Q2008 IQ2009 2Q2009 3Q2009 4Q2009 IQ2010 2Q2010
FMMNet Rece,pts =State County Pool R eceipts �S ROE %d. in Feee DConn ly Sh at to, Due
TOP 25 SALES/USE TAM CONTRIBUTORS
The following list identifies Petaluma's Top 25 Sales/Use Tax contributors. The list is in alphabetical
order and represents sales from July 2009 through June 2010. The Top 25 Sales/Use Tax contributors
generate 43.8% of Petaluma's total sales and use tax revenue.
AUTOWORLD
PETALUMA HYUNDAI
CHEVRON SERVICE STATIONS
SAFEWAY STORES
CVS/PHARMACY
SAVE MART SUPERMARKETS
EXXON SERVICE STATIONS
SCOTT LABORATORIES
FISHMAN SUPPLY COMPANY
SHAMROCK MATERIALS
GC MICRO CORPORATION
SHELL SERVICE STATIONS
HANSEL HONDA/KIA
SOLAR DEPOT
HANSEL TOYOTA & RV
STAPLES OFFICE SUPERSTORE
HENRY CURTIS FORD/MERCURY
TURIN NETWORKS
K MART STORES
USA SERVICE STATIONS
KOHL'S DEPARTMENT STORES
VICTORY CHEV/CADILLAC/OLDS/GEO
NORTHBAY NISSAN
WHOLE FOODS MARKET
ORCHARD SUPPLY HARDWARE
www.MuniS'ervices.coni
(800) 800-8181 Page 2
City of PeWuma
Hi aTORWAL SALES TAX AMOUNTS
The following chart shows the sales tax level from sales through June 2010, the highs, and the lows for
each segment over the last two years.
lin th on sands of$1 ®2 Q 201 0
ox�ru
®i 9w
$1,800
51,600 - - - - ---
$1,400 - -- - - - - - - - - -- --
S1,200.. - - - - - -
S1.000
,
Q.
$Suu '
5600 w<'°�
'I $400 �A'%,,,$b�", Pz4''� <�,is. wia� s,�";Y %„.,g': •"L�w. .. '..y. �
5
Is
x:
,
ti ti J¢Q O
ANNUAL SALES TAX BY BUSINESS CATEGORY
www. MuniServices. coin (800) 800-8181 Page 3
N
n. to ..:n.d..f Sl
2Q 2010
I- 1.985-
1 1.s Is
1 2.)85 {
1,36.
IQ 2 a I o
11920
,9 1,523 T
1 2.•.8 I (
1,288
4Q 2009
1,939-
- 1,524
1 2,6811
3Q 2009
11( 1,9 A4
1 1 s
1 2,618 I I
�vas
1,318 to
'
2Q 2009
- -2104.4-
1.550
1 2,726 1
1 1,508 jj
IQ 2000
I
2,091 -
r
1 1.56$
1 2.994 1
1 1 .8 16
1 '
4Q 2008
2441
I 1,590
1 3.419 1
1 3,123
30 :11118?
- 0.188T
{ 1,488
1 3.310
1 1
2,230
2Q 2008
2,196
- 1 1.578
1 3,440
1 1
2.331 41
IQ 2008
_ 2462
1 1.545
1 3 .5 41
1 1
2,272 '
so
52,000
$4,000 $6,000
$8,000
510,000 $12.01111
'OG en
e nI Retx,l =1F
d P, od
fr ,, urt. tine pC on, I , u , t
On mess in
Ous,x esv ®41 neeilnn e0 na
www. MuniServices. coin (800) 800-8181 Page 3
N
FIVE-VEAR ECONOMIC TREND: BusinessTo Business
$860
$700
$600
$500
S400
5300
$200
$1110
$0
(in th oa sa nds of S)
PER CAPITA BY BUSINESS SEGMENT
This chart shows sales tax per capita from business segments from July 2009 through June 2010.
Ver Cap ito by Hasan ess Segm s
Aoto S Is s,ew
tier. ice Sa tons
R est as ran[
a
\l i s c e l Ian a oaS He to it
A ppa rel So res
f
SI is e. 4'ehis ie Sales
L,
f
D ep artm e n t Stores
0 Hire E g a i, m e n t
H Idg.-4 i,15 -W hsie
A tofarts/Repair
. i.iy.
a:s,
Hldg.\I atis-Retail
..
A 1A.OTH ERS
$0
S5 $10
$15 $20
-
0
8
S
o
c
a
o0
oc
—
o
c
e
c
c
M
PER CAPITA BY BUSINESS SEGMENT
This chart shows sales tax per capita from business segments from July 2009 through June 2010.
Ver Cap ito by Hasan ess Segm s
Aoto S Is s,ew
tier. ice Sa tons
R est as ran[
a
\l i s c e l Ian a oaS He to it
A ppa rel So res
f
SI is e. 4'ehis ie Sales
L,
f
D ep artm e n t Stores
0 Hire E g a i, m e n t
H Idg.-4 i,15 -W hsie
A tofarts/Repair
-
Hldg.\I atis-Retail
A 1A.OTH ERS
$0
S5 $10
$15 $20
a
o0
oc
—
o
c
e
c
c
M
PER CAPITA BY BUSINESS SEGMENT
This chart shows sales tax per capita from business segments from July 2009 through June 2010.
www.MuniServices.com
(800) 800-8181
S25
Pane -t
H
Ver Cap ito by Hasan ess Segm s
Aoto S Is s,ew
tier. ice Sa tons
R est as ran[
food 01 arkets
\l i s c e l Ian a oaS He to it
A ppa rel So res
f
SI is e. 4'ehis ie Sales
Light and a5try
D ep artm e n t Stores
0 Hire E g a i, m e n t
H Idg.-4 i,15 -W hsie
A tofarts/Repair
-
Hldg.\I atis-Retail
A 1A.OTH ERS
$0
S5 $10
$15 $20
www.MuniServices.com
(800) 800-8181
S25
Pane -t
H
Cfty of Petaluma
FINAL RESULTS: January -March 2010 Sales
Local Net Cash Collections
Less: Pool Amounts
Less: Prior Quarter Payments
Add: Late Payments
Local Net Economic Collections after Adjustments
Percent Change from January -March 2009 Sales
MUNISER VICES` ON-GOING AUDIT RESULTS
This Quarter $74,932
Totalto Date $4,607,863
www. MuniServices. corn
(800) 800-8181
$2,009,616
($121,865)
($72,190)
$25,815
$1,841,376
DOWN BY.3%
Poge 5
Jul '00- 1u1'01- Jul '02- Jul'03- Jul '04- Ju1'05- Jul '06- Jul'07- Jul '08- Jul '09-
Jun'01 Jun '02 Jun '03 Jun '04 Jun '05 Jun '06 Jun '07 Jun'08 Jun '09 Jun'10
$176 $171 $165 $174 $178 $188 $193 $183 $148 $138
■ General Retail Food Products ■ Transportation N Construction 0 Business To Business ® Miscellaneous
162% 253% 194% 248%
162%
115% 90/ 122% 94% 143% 103% 0 102%
48% 39% � 47% 65% 72/
35%
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Qo �y -
30.0%
20.0%
10.0%
0.0%
-10.0%
-20.0%
-30.0%
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Recession —City of Petaluma
Sonoma Countywide ---California
Federal Reserve is considering second
wave of monetary easing to combat
potential deflation from too -low
inflation and sluggish recovery.
• California's budget, employment, water
and transportation problems coupled
with an unfriendly business
environment continue to hold back
economic recovery.
• Potential expansion of sales tax base to
include services would stabilize the tax
base.
1 oral
General Retail
Food Products
Transportation
Construction
Business To Business
Auto Sales - New
Service Stations
Restaurants
Food Markets
Miscellaneous Retail
Apparel Stores
Misc. Vehicle Sales
Light Industry
Department Stores
Office Equipment
BIdg.Matls-Whsle
Auto Parts/Repair
BIdg.Matls-Retail
Electronic Equipment
July 2009 - June
•
I
• Homebuilders confidence in the
housing market continues at the lowest
level in 18 months amid worries traffic
of potential buyers is failing. Expect no
change over next six months.
+ Weakest sectors are construction,
government, wholesale trade and
manufacturing.
• Tight credit and nervous investors
perpetuate flat economy.
S.F. Bay Area
4.576 -
5.U76
-7.6%
2.2%
-2.2%
0.8%
12.4%
15.9%
-12.051. _
-1.0%
26.4% -
6.7%
14.5%
20.3%
18.3%
18.9%
-2.2%
1.1%
-2.9%
0.1%
-8.5%
-1.9%
-14.2%
3.0%
0.4%
11.4%
24.0%
-i'4%
-15.0%
2.1%
21.4%
24.3%
-14.0%
0.8%
5.4%
-4.354.
-9.9%
-2.4%
98.2%
-1.8%
3.5%
0.9%
0.0%
13.0%
-2.1%
4.5%
16.6%
16.0%
-0.1%
0.3%
-2.8%
3.8%
0.8%
-3.0':i
0.8%
12.5%
-2.15,,
-0.9%
-2.1%,
2.0%
-Expect decent but not robust holiday
sales, moderate growth in restaurants,
strong growth in service stations and
flat growth In business -to -business
sector.
•Car sales will remain flat during 2010
with a slight increase of 3% in 2011.
-According to an LA Times article (9/27),
the State is owed $1.48 from
businesses who have collected sales
and use tax but have not remitted to
the SBE. This represents $190M in local
taxes or 4% of annual local taxes.
City of
Petaluma
-5.4%
7.9%
-2.2%
2.2%
-26.8%
-9.8%
6.0%
8.9%
-4.5%
1.1%
-2.0%
-11.9%
-15.6%
-9.8%
-14.0%
5.1%
-24.2%
0.8%
-29.7%
19.5%
S.F. Bay Area
-4.0%
3.0`%
-2.1%
3.3%
-11.3%
5.8%
2.9%
-2.9%
0.5%
-5.9°!,
-0.3%
-0.5%
16.0!0
-0.8%
0.2%
-13.9%
-3.n2%
.0%
-11.9%
-4.8%
-3.0°o M
-2.8%
-0.2%
-12.2°%
-10 996
1.1%
1.0%
-3.5%
-0.316
-6.5%
1.5%
-14.1%
-14.0%
-1.2'%
-4.3%
-17.7°%
-4.6%
7.0`%
-11.2%