Long Range Financial Plan5-Year Outlook
Long Range Financial Plan
The Current FY 12-13 Budget has maintained high service levels at significantly reduced costs.
53 full-time employees, down from high of 67
10 ¾-time employees, down from high of 18
The number of part-time positions has been reduced by 60%
Crossing Guard services are contracted out
Recent Successes – The Organizational Changes
Old facilities with high maintenance and energy costs have been replaced/improved.
Aquatic Centers
Athletic Field Lights
Rosemead Community Recreation Center
Streets & Sidewalks
Park Amenities & Equipment
Civic Center Parking Lot & Lighting
Recent Successes – Facilities & Infrastructure
Solid Waste Services Franchise Fee
Comprehensive Fee Resolution
Cost reimbursement for individualized services
Economic Development
Qiao Garden Hotel and Doubletree Expansion
New Restaurants
Recent Successes – New General Fund Revenue
Develop a Comprehensive 10 year Financial Plan for an overall outlook on the financial health of the City.
Develop a 3 year plan to balance the budget for core services through reliable revenue sources as stated in the Strategic Plan
Ensure any new event or program is supported by corresponding new revenue sources of funding
Strategic Plan
CDBG and HOME Funding was significantly cut in 2012-13 by more than $600k.
Gas Tax funds are shrinking
Many revenue sources are reliant upon general economic growth.
Fixed costs for utilities and fuel outpace CPI
External Factors
1978-79 Prop. 13 Passed and AB 8 set property tax rates.
1984 – Portion of AB 8 was repealed and Rosemead received minimum property tax.
1992 – ERAF shifted property tax from cities to schools.
1996 – Prop. 218 passed, constraining ability to raise revenues from taxes, assessments or fees.
2004 – Prop. 1A was first step in protecting local revenue from the Legislature.
2009 – State borrowed local property tax.
2010 – Prop. 22 further protected local revenues from State.
2011 – ABx1 26 eliminated Redevelopment
Today’s Reality
Today’s Reality
Today’s Reality
Today’s Reality
Sales Tax revenues will realize slow growth from economy and new businesses (2-3% annually)
Property Tax growth will be slow without new development. Potential Federal Law changes could have dramatic affect on home prices. (2-3% annually)
TOT growth could be substantial if new hotels are developed.
The Next Five Years
Franchise Fees – Trash franchise should remain steady with slow growth. Utilities have been declining. (1-2% annually)
Fees for Services – Participation in programs and services are based upon usage.
Intergovernmental – The Federal and State will likely continue to squeeze cities and our funding sources.
The Next Five Years
Maintenance of Effort Organization
The Next Five Years
G.F. Revenue Outlook
Salary and Benefit costs will continue to rise.
Fuel for vehicles and other utilities will continue at rates of 5-7% annually.
Insurance costs projected to rise (5%) with requirements to expedite repayment of Retrospective Deposit
Public Safety Contract is expected to rise due to facility improvements and technology improvements that will be passed along to contract cities (3-4%)
The Next Five Years
G.F Expenditure Outlook
G.F. Overview
Inflation and cost increases will likely outpace revenue increases in the long-term.
Without increases to fees, new revenue sources, or a decrease in programs, the long-term variance would likely grow.
NPDES and Stormwater Mandates
Streets and Sidewalks
Infrastructure Improvements – Sewer
Expiring contracts
The Future
CIP Funding Shortfall
Street resurfacing and repairs - $1.0 million in annual projects plus $200k in grant matching
NPDES/Storm Water - $160k in 2014 and $220k by 2017 w/annual increases
Median Improvements - $100k annually
Park Improvements - $100k annually
Most Optimistic Situation
But How do We Get There?
We Need More Revenue
New Development and Lots of It!
Possible Solutions
The TOT from a new hotel could generate between $20,000 and $500,000 annually.
Possible Solutions
New restaurants and retail can bring in $10,000 to $1 million annually in sales tax.
Possible Solutions
Impact Fees to new developments can provide funding for future capital improvements necessary to support the development
New or Increased Fees
TOT Collections and Rate
Business Improvement Districts?
AB 741 (Brown)?
Business License Fee Adjustments?
Possible Solutions