The Town Council discussed the proposed budget for the fiscal year 2022/2023 on May 5 – discussed is putting it lightly as the meeting hit a four-hour mark. At least there was a lot of positive news for this budget cycle to keep one alert and attentive. This is why I watch the meetings for you; here are the main details in a four-minute read; you’re welcome.
Current General Fund financial status as of May 5, 2022:
$7,115,804 collected in TOT revenue through March 2022
Sales Tax is estimated to exceed budget target of $1,270,000
Property tax estimated to reach budget target of $2,100,000
Expecting $354,765 in American Rescue Plan revenue (2nd tranche)
$2,866,075 Fund Balance earmarked for possible Yountville Elementary School purchase
$2,397,713 balance in Emergency Reserve Fund
$2,297,713 in Revenue Stabilization Reserve Fund
$244,702 still available in Budget Contingency
Estimating $2.7M in Unassigned Fund Balance at the end of the fiscal year 2021/2022
Let me do some math for you (I’m already watching the meeting for you, so you just sit back and relax). This fiscal year will be the largest on record for TOT collection, leaving the Town with an excess of $2,700,000 in Unassigned Fund balance. That’s quite a bit of dollars that the Council will discuss how to distribute come July. There was already some discussion and guidance from the Council to the Town staff on their thoughts on using those excess funds. Plenty of Council direction for Town IT support as well as a Compliance Officer for Planning Department with overlap into other departments.
Also, all those reserve funds and contingency funds mean that our town of Yountville has over $7.8M in reserves for a rainy day (or fire)(or earthquake)(or pandemic). There is even a Legal Contingencies fund of $200,000 (this is CA, need to be prepared for litigation.) Currently, Revenue Stabilization is at 25% of TOT collections, and Emergency Reserve is 20% of General Fund operating expenditures. The Council will use some of that Unassigned Fund balance to increase those reserves and most likely create a new policy on increasing those percentages.
Now, the proposed expenditures for the Town for the fiscal year 2022/2023 are budgeted at $10,242,410. With that, there will be over $8M in reserves. Not many municipalities in CA, let alone the US, can make that claim (thanks to the Town and Council for that!). So with this revenue and expense, that would leave an ending fund balance of $6,678,899 for the fiscal year 2022/2023.
2022/2023 Revenue Predictions: Current trends point to a return to pre-pandemic tourism levels. $7,500,000 TOT revenue is budgeted
$1,570,000 Sales Tax revenue budgeted
$2,142,000 Property Tax revenue budgeted reflects the maximum increase allowed by the state of 2%.
Let’s end this week’s budget overview with the expenses that municipalities are always talking about in CA: PERS (California Public Employees Retirement System/CalPers) and OPEB (Other Post Employment Benefits/health benefits). All the municipalities are talking about these two items because they are straining their budgets, but that is not the case in Yountville. Yes, costs are increasing; we are dealing with the state of CA here, and the Town is staying ahead and anticipating those increases. Anticipated 12% increase in PERS and 7% increase for OPEB.
The total budget for OPEB is $364,500, of which $182,000 is for existing retiree medical premiums, and $182,500 will be invested into the OPEB Trust. The total budget for PERS is $556,357, of which $373,857 is the annual payment made to CalPERS, and $182,500 will be invested into the Pension Rate Stabilization (PRSP) Trust.
All Town employees and the Town pay into these accounts through the payroll. Yountville has taken this to the next level to ensure that these accounts are adequately funded because the Town has created trust accounts for each of these two categories. The OPEB Trust has a balance of $5,782,175, and the PERS Trust (Pension Stabilization Rate Fund (PRSP)) has a balance of $2,836,113. Both balances are as of March 2022. So, internally, the Town continues to pay 5% of the projected full-time salaries into each trust fund.
I am going to attach the full budget presentation and links at the end of this article, and below are some highlights from the budget:
Information Technology & Telecommunications General Fund Department – 1011– Increase costs due to budgeting for a brand-new website, phone system, and software. Community Promotion and Programs General Fund Department – 1015 – $50,000 has been budgeted for the free ride transit subsidy for the new electric vehicle (The Bee) that will replace the Yountville Trolley. Finance General Fund Department – 1102 – $75,000 for the Impact Fee Study. Town Clerk General Fund Department – 1110 – Increase of $2,500 to $70,000 in Elections due to being an election year & Increase in Contract Services to $133,500 due to increases in costs of services and support the Planning & Building Department scanning project of permanent records and large documents. Planning and Building General Fund Department – 2115 – Combined building inspection and plan check permit revenue are anticipated to increase by 25% from $120,000 in FY 2021/22 to $150,000 in FY 2022/23.
Did you know Public Safety – Law Enforcement contract is $1,232,373 and Public Safety-Fire & Emergency Medical Services contract is $984,022? The safety we all enjoy is expensive.
Public Works – Street – Streets Maintenance – 4305 – Additional $10,000 in Contract Services for the increased cost of street sweeping. I make sure there are no cars in front of my house on Friday mornings; I want to get the Town’s money’s worth from that sweeper.
Several increases in Public works due to fuel costs.
Parks and Recreation General Fund Department 5405 – 5415 Revenues – are expected to increase 35% with all the activities back in play (haha, making sure you are still with me).
Measure S Affordable and Workforce Housing Fund Special Revenue Fund 71-1600 – has a balance of $1,323,817.
Now you are fully prepared for the next budget workshop on Thursday, May 19, 2022, from 1:00 pm to 4:00 pm. Zoom only.
Watch the meeting and really get a deep understanding of how our Town operates. The meeting actually started 12 minutes late, technical difficulties of course, so I am pushing for a new IT support position.