CC SR 20200602 02 - Draft 2021 Five Year Financial Model
CITY COUNCIL MEETING DATE: 06/02/2020
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE:
Consideration and possible action to review the Draft 2021 Five-Year Financial Model.
RECOMMENDED ACTION:
(1) Receive and file the Draft 2021 Five-Year Financial Model (2021 Model).
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Christopher Browning, Senior Administrative Analyst
REVIEWED BY: Trang Nguyen, Director of Finance
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. One Page Fund Summary (page A-1)
B. Budget Assumptions (page B-1)
C. Two Major Funds, General Fund and Capital (page C-1)
D. Five Year Fund Balance (page D-1)
BACKGROUND:
Overview
The 2021 Draft Five-Year Financial Model (2021 Model) is a financial schedule
prepared by the Finance Department (Attachments A through D) as required by City
Council Policy No.18. The City’s long-term financial outlook is documented in the Five-
Year Model, which forecasts economic conditions including scenarios of future sources
of revenues and spending. The Five-Year Model is an additional tool that the City
utilizes annually to engage discussions and provide guidance with decision making
related to the City’s future financial health. This tool also helps determine the direction
staff needs to take to maintain a structurally balance budget. The 2021 Model includes
all funds and the Rancho Palos Verdes Improvement Authorities.
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Format of the 2021 Model
The information contained in the draft 2021 Model is based in part on the preliminary
budget presented to the City Council on May 19, 2020. The draft 2021 Model reports
the following financial information:
► Historical revenue and expenditure actuals and ending fund balances for all
funds
► FY 19-20 year-end estimated revenues, expenditures, encumbrances, and
ending fund balances for all funds as of March 31, 2020 (third quarter)
► FY 20-21 preliminary budget (Economic Assumptions described below)
► FY 21-22 through FY 24-25 projected revenues, expenditures and fund balances
for all funds
Process of the 2021 Model
The Five-Year Model is updated at the start of the budget season every fiscal year. Staff
updates projections and assumptions based on actual performance as reviewed at mid-
year. The Model is then updated to reflect performance at the end of the third quarter
and incorporate any direction provided by the City Council during the budget
workshops. The Draft 2021 Model includes the segregation of funds as follows:
► General Fund – The General Fund balance is separated by the 50% reserve
policy and the unrestricted balance.
► Funds restricted by action of the City Council – The balances of these funds
(Beautification Fund, Capital Infrastructure Projects Fund, and Equipment
Replacement Fund) are restricted by City Council action for a specific purpose.
The funds were initiated with transfers from the General Fund. These funds may
be transferred back to General Fund or used for other purposes upon the action
of the City Council.
► Funds restricted by law or external agencies – The balances of these funds are
restricted by law or external agencies, such as the federal government, State of
California or Los Angeles County. These monies can only be used for the
purpose outlined by the terms and conditions set by legislation and voter ballot
measures.
The 2021 Model includes several schedules organized and attached as follows:
Attachment A - Fund Summary
Attachment B - Assumptions Applied Into the Model
Attachment C - Summary of the City’s two major funds – General and Capital
Attachment D - Five-Year Fund Balance projection by Fund
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DISCUSSION:
The draft 2021 Model incorporates assumptions for revenues and expenditures for all
City funds based on current data and information, industry experts, and historical data.
The following discusses the various City Funds that shapes the Five-Year Model.
General Fund
The Model is used for planning and developing the FY 2020-21 Operating Budget and it
includes the FY 2020-21 proposed expenditure reductions. As shown below in Chart 1
and Table 1, the General Fund continues to have a structurally balanced operating
budget, with operating revenues exceeding operating expenditures through FY 2024-25
excluding transfers, resulting in a positive operating fund balance. This is based on the
assumptions to be outlined in detail later in this report.
Chart 1: General Fund Operating Revenues and Expenditures, Excluding Transfers
Table 1: General Fund Operating Revenues and Expenditures, Excluding Transfers
The City’s operating fund balance is further reduced by transfers out to various other
funds. The largest of such transfers is the transfer of TOT revenue from Terranea
Resort, minus the increase in the public safety contract since the start of FY 2017-18, to
FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Revenues 28,969,900$ 31,044,686$ 32,166,481$ 33,000,783$ 33,614,341$
Expenditures 26,836,900 29,206,015 30,453,354 31,714,923 33,032,085
Surplus/(Deficit) 2,133,000$ 1,838,671$ 1,713,127$ 1,285,860$ 582,256$
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the Capital Improvement Program (CIP). Table 2 details the General Fund transfers out
which consist of other funds that receive a transfer of General Fund monies.
Table 2: General Fund Transfers Out
The General Fund receives an annual transfer from two separate funds, Public Safety
Grant and Measure A Maintenance, that are projected to be a combined $230,000 on
average. However, as shown in Table 3 below, once all transfers in and out are
included in the model, the General Fund will show a deficit when comparing revenues to
expenditures beginning in FY 2021-22 if transfers out are continued based on current
City Council policy. It is important to note that when the 2020 Model was presented last
year it was projected that FY 2020-21 would experience a deficit, however, the
continuous efforts to implement City-Wide cost saving measures, in many cases one-
time cost savings, the City has been able to continue to adopt a balanced budget
including for FY 2020-21 with the development of a revised 2021 Model.
Table 3: Annualized Surplus/(Deficit)
The decrease in the annual fund balance starting FY 2021-22 is caused by several
factors. Revenues which were depressed during FY 2020-21 due to the COVID-19
pandemic are expected to experience a gradual recovery over the subsequent fiscal
years. The Stay-at-Home order is expected to be gradually lifted over time, however,
consumer behavior combined with increased unemployment will cause revenue sectors
such as Transient Occupancy Tax and Sales Tax to experience a slow return to levels
seen prior to the pandemic. In contrast to the measured recovery of revenues,
expenditures are projected to return to pre-pandemic levels immediately during FY
2021-22 as all vacancies may be considered to be budgeted and filled.
FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Transfer to CIP 1,934,000$ 2,824,926$ 2,750,340$ 2,526,343$ 2,046,230$
Sub-region 1 10,000 10,000 10,000 10,000 10,000
Abalone Cove Sewer District - - - - -
IA Portuguese Bend 20,000 20,000 20,000 20,000 20,000
IA Abalone Cove - - - - -
Total Transfers to Other Funds 30,000 30,000 30,000 30,000 30,000
Total Transfers Out 1,964,000$ 2,854,926$ 2,780,340$ 2,556,343$ 2,076,230$
FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Operating Fund Balance 2,133,000$ 1,838,671$ 1,713,127$ 1,285,860$ 582,256$
Plus: Transfers In 230,000 230,000 230,000 230,000 230,000
Less: Transfers to CIP (1,934,000) (2,824,926) (2,750,340) (2,526,343) (2,046,230)
Less: Transfers to Other Funds (30,000) (30,000) (30,000) (30,000) (30,000)
Annual Excess Reserve/(Deficit)399,000$ (786,255)$ (837,213)$ (1,040,483)$ (1,263,974)$
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These factors, combined with the higher rate of annual growth that expenditures
experienced compared to revenues, only further widen the gap in the later years of the
2021 model. However, as a balancing measure every year, staff will be seeking
direction from the City Council during budget season as to whether or not vacancies will
be funded in the subsequent year to identify cost savings.
Below on Table 4 the impact to the General Fund balance through FY 2024-25 is
displayed. As shown, the General Fund ends the year with an excess Unrestricted
Fund Balance through FY 2024-25. The unrestricted fund balance does decrease with
each fiscal year, ending FY 2024-25 slightly over $1 million. This is due in part to the
fact that expenditures increase annually at a higher rate than revenues. Another
contributing factor is the transfer out from the General Fund of a large portion of
Transient Occupancy Tax revenue to the CIP Fund. Between FY 2020-21 and FY
2024-25 these transfers account for $12.2 million in General Fund revenue.
Table 4: General Fund Balance
1972 Act Fund
During budget adoption for FY 2017-18, the City Council decided to suspend the annual
supplemental property tax levy and assessments of the Citywide Landscaping and
Lighting Maintenance District (LLMD). All operating expenses that were paid by the
1972 Act Fund were transferred to General Fund and Measure M. The General Fund
and Measure M will continue to support these operating expenses.
Table 5: General Fund Subsidy of 1972 Act
FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Beginning Fund Balance 20,788,547$ 21,073,135$ 21,472,135$ 20,685,880$ 19,848,667$ 18,808,184$
Revenues 29,038,400 28,969,900 31,044,686 32,166,481 33,000,783 33,614,341
Expenditures (26,271,512) (26,836,900) (29,206,015) (30,453,354) (31,714,923) (33,032,085)
Transfers In 275,000 230,000 230,000 230,000 230,000 230,000
Transfers Out (2,757,300) (1,964,000) (2,854,926) (2,780,340) (2,556,343) (2,076,230)
Surplus / (Deficit)284,588 399,000 (786,255) (837,213) (1,040,483) (1,263,974)
Ending Fund Balance 21,073,135 21,472,135 20,685,880 19,848,667 18,808,184 17,544,210
50% Reserve Policy (13,135,756) (13,418,450) (14,603,008) (15,226,677) (15,857,462) (16,516,043)
Unrestricted Fund Balance 7,937,379$ 8,053,685$ 6,082,873$ 4,621,990$ 2,950,723$ 1,028,168$
FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
General Fund 1972 Act Subsidy 364,200 373,700 383,000 392,600 402,400
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Water Quality/Flood Protection Fund
The Water Quality/Flood Protection Fund was closed on October 1, 2019 when the City
Council accepted the final project and reimbursement received from Caltrans. All future
projects will be funded by the Capital Infrastructure Projects Fund. The City Council
approved the following projects for FY 2020-21:
Storm Drain Improvement at 6415 Corsini – Engineering $20,000
Altamira Canyon Drainage and Erosion Control Project – Engineering $350,000
Additional information is available in the Five-Year Capital Improvement Program.
Special Revenue Funds
Special Revenues are used to account for taxes and other revenues set aside for
specific or restricted purposes. The City’s major special revenue funds are Gas Tax,
Proposition A, Proposition C, Measure R, Measure M, and Quimby. Most of the funding
for special revenues are designated for street maintenance, public rights-of-way
maintenance, park upgrades, park maintenance, and transit-related expenses. Staff
ensures that the special revenue funds are utilized for any eligible projects before CIP
Fund reserves are appropriated.
Table 6: Revenue for Special Funds
2021 2022 2023 2024 2025
202 GAS TAX 1,462,000$ 1,462,097$ 1,462,180$ 1,462,263$ 1,462,348$
209 EL PRADO LIGHTING DIST 2,500 2,573 2,647 2,723 2,802
211 1911 ACT STREET LIGHTING 628,200 646,789 665,866 685,510 705,739
213 WASTE REDUCTION 131,000 131,083 131,153 131,224 131,297
214 AIR QUALITY MANAGEMENT 55,000 55,000 55,000 55,000 55,000
215 PROPOSITION C 702,400 702,512 702,606 702,702 702,800
216 PROPOSITION A 849,400 849,580 849,733 849,888 850,045
217 PUBLIC SAFETY GRANTS 157,700 157,700 157,700 157,700 157,700
220 MEASURE R 545,400 545,818 546,172 546,531 546,896
221 MEASURE M 530,000 530,000 530,000 530,000 530,000
222 HABITAT RESTORATION 12,400 12,623 12,813 13,005 13,200
223 SUBREGION ONE MAINTENANCE 14,000 14,252 14,466 14,683 14,903
224 MEASURE A MAINTENANCE 91,000 91,018 91,033 91,049 91,065
225 ABALONE COVE SEWER DIST 52,000 53,560 55,167 56,822 58,526
228 DONOR RESTRICTED CONTRIB 25,000 25,450 25,832 26,219 26,613
310 CDBG 217,700 228,585 182,868 173,725 173,725
334 QUIMBY PARK DEVELOPMENT 25,000 25,450 25,832 26,219 26,613
336 LOW 46,200 46,200 46,200 46,200 46,200
337 AFFORDABLE HOUSING PROJ 15,000 15,270 15,499 15,732 15,968
338 DEVELOP IMPACT MIT (EET) 10,000 10,180 10,333 10,488 10,645
Total Special Revenue Funds 5,571,900$ 5,605,739$ 5,583,098$ 5,597,683$ 5,622,083$
FUND
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Capital Infrastructure Projects Fund
The Capital Infrastructure Projects Fund, also known as CIP Fund, is the name of the
fund that funds a component of the Capital Improvement Program (CIP). The term
“infrastructure” is used instead of “improvement” because it describes the type of
projects that are to be funded by TOT revenue. As illustrated in Chart 2 below, the draft
2021 Model shows a CIP fund balance of $24.2 million in FY 2020-21 decreasing to
$15.9 million at the end of FY 2024-25. This reduction in fund balance is the result of
the continually decreasing transfer in of TOT revenue from the General Fund. Outside
of the roughly $480,000 in average annual projected interest earnings received, the
transfer in of a significant portion of TOT revenue from the General fund is the primary
revenue source for the CIP fund which is gradually being reduced as public safety costs
increase year-to-year.
Chart 2: CIP 5-Year Projection
The transfer from the General Fund to the CIP fund is calculated by taking the total TOT
revenue received from Terranea Resort minus the cumulative increase in the annual LA
County Sheriff’s contract since FY 2017-18.
The Impact of the COVID-19 Pandemic
Terranea contributes to over 96% of the City’s total TOT revenue. On March 19, 2020,
Terranea announced the temporary closure of their resort and all amenities which is
anticipated to extend over two months. At the time of the preparation of this staff report,
June 12, 2020 is the current scheduled date for the resumption of operations. However,
once Terranea reopens to the public it is not expected to return to capacity levels seen
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during similar periods in previous years.
Staff has made significant reductions to TOT revenue estimates for FY 2020-21, cutting
revenue projections by 70% during the first quarter and 50% during the second quarter.
TOT revenue, as projected by the City, is not projected to return to normal levels until
the start of the third quarter, January 2021. The City’s TOT revenue estimate for
Terranea was reduced from just under $5.5 million to $3.6 million, a decrease of over
$1.9 million.
This decrease in projected TOT revenue, combined with the continued increase in the
cost of the LA County Sheriff’s contract, has a significant impact on the General Fund
transfer to CIP. The Sheriff’s contract is projected to reach $7.1 million in FY 2020-21
and increase annually by 6%. In contrast, TOT revenue from Terranea is projected to
reach $3.6 million during FY 2020-21 and then increase by 30%, 8%, and 5% in
subsequent fiscal years, reaching $5.5 million in FY 2023-24. At this point Terranea’s
TOT revenue will have reached revenue levels near those seen during FY 2018-19 and
annual revenue growth is projected to slow to 0.5%. This steadily decreasing year over
year TOT revenue growth compared to the consistent increase in public safety costs
results in a decrease in the transfer to CIP that accelerates with each passing year.
Chart 3: Annual Increase in Terranea TOT Revenue & Sheriff Contract
Q1 Q2 Q3 Q4
% of Original FY 19-20 Estimated Revenue 30% 50% 100% 100%
FY 2020-21
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Table 7: Annual General Fund Transfer to CIP
Staff presented the draft five-year Capital Improvement Plan (CIP) as part of the FY
2020-21 CIP Budget Workshop on April 27, 2020. At this meeting, there was
approximately $29.7 million in CIP projects identified over the next five years with
almost $21 million in CIP projects to be determined in the future years. The City Council
accepted 16 projects to proceed for funding consideration for FY 2020-21 and the Five-
Year CIP as presented at the Preliminary Budget meeting on May 19, 2020.
The City will continue the practice of re-budgeting capital projects that have not been
encumbered, meaning that they will not automatically be appropriated year-over-year.
This enables the City Council to review and assess projects annually and determine if
priorities or funding has changed without relying on reserves.
Model Assumptions
The 2021 Model is a forecasting tool that provides an estimate of the City’s financial
health five years out. As a result, it requires estimates of revenues and expenditures
based on data extracted from industry experts, historical trends, economic indicators
and forecasts. Staff takes into account all the data gathered and filters that data
through a very conservative lens to create the forecast. Staff prepares detailed analysis
by account number during the budget process to create year-end estimates for FY
2019-20 and projections for FY 2020-21. The assumptions discussed below are used
to create forecasts for the outer years of our model beginning in FY 2021-22.
In addition to the process described above, the COVID-19 pandemic provided an added
layer of complexity to the assumptions used in the 2021 model. The global pandemic
and the State of California’s Stay-at-Home order that followed, had a dramatic impact
on the economy, affecting nearly all sectors. The assumptions that you will see below
have been modified to reflect a gradual recovery from the economic slowdown that is
expected to be experienced during FY 2019-20 and FY 2020-21.
FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
GF Transfer 1,934,000$ 2,824,926$ 2,750,340$ 2,526,343$ 2,046,230$
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Table 8: 5 Year Model Revenue and Expenditure Assumptions
The following is a summary of the economic assumptions beginning with revenues
followed by expenditures.
Revenues
Property Tax
Property tax is the City’s largest and most stable revenue source. Its share of all
General Fund revenue has increased from 44% to roughly 49% with the decrease in
TOT revenue due to the COVID-19 pandemic. Property Tax receipts typically lag
events by 12 to 18 months which means that the effects of the pandemic will not be
seen until FY 2021-22. It appears that the value for homes that have sold this year are
holding, however, more data is still needed. Over the next 6 to 12 months more data
should be available to help staff revise property tax assumptions if necessary. For the
time being, assumptions will remain at 3% for the Model, just under the historical rate of
growth.
ECONOMIC MODEL INPUT FACTORS 2021-22 2022-23 2023-24 2024-25
REVENUES
PROPERTY TAX-NET GF ESTIMATE 3.0% 3.0% 3.0% 3.0%
PROPERTY TAX-IN LIEU OF VLF (VLFAA) 3.0% 3.0% 3.0% 3.0%
TRANSIENT OCCUPANCY TAXES 30.0% 8.0% 5.0% 0.5%
SALES TAX 8.0% 5.0% 2.1% 2.1%
FRANCHISE TAX 0.5% 0.5% 0.5% 0.5%
UTILITY USERS TAX 0.5% 0.5% 0.5% 0.5%
GAS TAX 0.0% 0.0% 0.0% 0.0%
PERMIT REVENUES 15.0% 5.0% 0.0% 0.0%
INVESTMENT INTEREST 1.8% 1.5% 1.5% 1.5%
EXPENDITURES
CONSUMER PRICE INDEX 2.0% 2.0% 2.0% 2.0%
PERSONNEL EXPENDITURES 4.25% 4.25% 4.25% 4.25%
HEALTH INSURANCE 1.0% 1.0% 1.0% 1.0%
PERS NORMAL COSTS 0.5% 0.5% 0.5% 0.5%
PERS UNFUNDED LIABILITY 13.3% 19.7% 13.6% 12.3%
SHERIFF CONTRACT 6.0% 6.0% 6.0% 6.0%
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Transient Occupancy Tax
Beginning March 19, 2020, Terranea announced the temporary closure of their resort
and all amenities. As previously reported, the temporary closure of Terranea combined
with the expected gradual recovery of business has caused TOT to decrease from 18%
to 13% of the City’s total General Fund operating revenue. Staff made significant
reductions to TOT revenue for FY 2020-21, with revenue not expected to return to
normal levels until the start of the third quarter, January 2021. As the Stay-at-Home
order eases, TOT revenue is expected to increase closer to previous levels over time.
A 30% increase in FY 2021-22 will bring TOT revenue to just under $4.9 million. This is
projected to be followed by an 8% and 5% increase in the subsequent fiscal years,
increasing revenue to $5.28 million and $5.5 million in FY 2022-23 and FY 2023-24
respectively. As TOT revenue returns to levels seen prior to the pandemic, year over
year growth is expected to slow back to historical rates.
Sales Tax
Sales tax revenue experienced a 10% decrease due to COVID-19 during FY 2019-20
and is projected to see only minor growth in FY 2020-21. The COVID-19 health crisis
caused the temporary closure of Terranea Resort, as mentioned above. Terranea and
local restaurants, which have been significantly impacted as well, comprise nearly half
of all sales tax revenue. A gradual recovery of sales tax revenue is expected as the
Stay-at-Home order is relaxed and as revenue continues to increase from the County
Pool due to increased online retail activity and the impact of the South Dakota v.
Wayfair case provides distribution of online sales tax revenue to local agencies.
Permit Revenues
Permit fees are based on staff’s fully burdened hourly rate multiplied by the estimated
time to provide the service, as the law requires that permit fees cannot exceed the City’s
cost. The COVID-19 related Stay-at-Home order and social distancing measures
resulted in a significant decrease in the number of permits and revenue generated. FY
2020-21 revenue estimates decreased by nearly 14%. Revenue is projected to return
to pre pandemic levels over the fiscal years that follow and then flatten.
Utility Users Tax
Utility user tax (UUT) is sensitive to many factors, such as weather conditions, utility
consumption and rate increases, which can be difficult to predicted over the long term
with accuracy. Staff has projected that UUT will increase by 0.5% annually. Municipal
Code Section 3.30.190 requires that the City Manager submit to the City Council an
analysis of the revenues derived from the UUT annually for City Council to decide if the
fee is necessary. Based upon the operating and capital needs of the City, Staff is
recommending, under a separate agenda item this evening that the current UUT rate of
3% continue in FY 2020-21 be adopted. The City Council accepted continuing this rate
at its May 19, 2020 for adoption during the budget process.
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Franchise Tax
Franchise tax revenue is generated from franchisees for the use of municipal rights-of-
way. This revenue source is primarily received from Southern California Edison and
Southern California Gas Company. The main drivers for this revenue are consumption
and the price of natural gas. Staff uses historical data and industry projections for this
revenue estimate. Staff is projecting franchise tax to grow slightly by 0.5% annually over
the next five years.
Chart 4: General Fund FY 20-21 Revenue Distribution
Expenditures
Los Angeles County Sheriff’s Contract
The Los Angeles Sheriff Department (LASD) contract continues to increase year-over-
year. Staff has elected to use a conservative 6% annual rate of growth in contract costs
over the next five years, based on historical actuals. Transfers of TOT revenue from
Terranea to the CIP Fund will continue to be reduced by the amount of the annual
increase in the public safety contract. It should also be noted that in FY 2019-20, the
City began transitioning from contracting the LASD to patrol the Nature Preserves to
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hiring four Park Rangers to assume the patrol duty. The contract portion of LASD for the
patrol of the Nature Preserves is approximately $600,000 a year. By transitioning to a
Park Ranger program, the City saved about $300,000 annually.
Personnel Expenditures
Salaries and benefits for City Staff, including vacancies, make up approximately 40% of
General Fund operating expenditures. Based on the terms of the current agreement,
employees will receive an annual cost-of-living adjustment (COLA) that ranges from 1%
to a maximum of 2.5% based on the CPI-U at the end of March each fiscal year. A
COLA of 2.0% has been factored into the model. Additionally, employees receive
annual merit increases based on performance evaluations. Staff has included a 2.25%
increase for merit adjustments based on historical averages. The combined total annual
increase of 4.25% is used to forecast salary and benefits costs through FY 24-25. Any
changes to employee compensation are subject to negotiation between the Rancho
Palos Verdes Employees Association and the City.
Pension
The City’s employee pension plan includes three tiers of benefits based upon local
pension reform and state pension reform. Pension costs are broken into two distinct
categories, Normal Cost and Unfunded Actuarial Liability, as discussed below.
Normal Cost
CalPERS sets the employer normal cost contribution rates for all participating
employers. This category is calculated based on current staff, salaries, and tier
placement. The City’s normal cost is actually projected to decrease slightly each
year due to the turnover of Tier 1 employees who are replaced with Tier 2 or Tier 3
employees. The estimated normal cost over the next five years is listed below:
Table 9: CalPERS Normal Cost % Projection
Table 10: CalPERS Normal Cost Projection
Tier 1 Tier 2 Tier 3
FY 20-21 12.361% 8.794% 7.732%
FY 20-22 12.4% 8.8% 7.7%
FY 20-23 12.4% 8.8% 7.7%
FY 20-24 12.4% 8.8% 7.7%
FY 20-25 12.4% 8.8% 7.7%
2020-21 2021-22 2022-23 2023-24 2024-25
Normal Cost 673,733 666,146 661,836 657,493 653,643
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Unfunded Actuarial Liability
In addition to the normal cost contributions, the City is required to make an annual
payment toward the Unfunded Actuarial Liability (UAL) for each of the three
CalPERS tiers. The UAL is a factor of both current and past staff, salaries, CalPERS
target discount rate, and investment performance. The City’s total UAL is calculated
by subtracting the market value of its pension assets from its plans accrued liability.
Based on the most recent CalPERS Actuarial Valuation Report received in July of
2019, the City’s total unfunded liability is $12.3 million. The actual FY 2020-21
payment amount has been set, however all future payment amounts are projections
of future costs.
Table 11: CalPERS Unfunded Actuarial Liability
As previously mentioned, one of the factors that affects the UAL is investment
performance. The COVID-19 pandemic caused global economic disruption and is
projected to have a significant impact on the CalPERS portfolio. CalPERS utilizes a
7% discount rate, however, staff is estimating a 0% market return for the City’s
CalPERS portfolio for FY 2019-20. According to CalPERS, the impact of this
decreased return is not expected to be reflected until FY 2022-23. The full effect will
then be spread over 20 years with a five years ramp up starting in FY 2022-23.
The impact of the decreased projected investment return is illustrated in Table 12
below.
FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18
Accrued Liability 33.0$ 35.2$ 37.0$ 40.9$ 45.3$
Market Value of Assets 26.3$ 27.0$ 26.3$ 30.3$ 33.0$
Unfunded Accrued Liability 6.7$ 8.2$ 10.7$ 10.6$ 12.3$
Funded Ratio 79.7% 76.7% 71.2% 74.1% 72.9%
($ expressed in millions)
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Table 12: FY 19-20 Investment Performance Impact on UAL
Other assumptions specific to the 2021 Model
The General Fund provides subsidies to a number of funds, as the restricted funding
sources for those activities are insufficient to provide for the current level of
maintenance.
Improvement Authority’s Portuguese Bend Fund
The Improvement Authority’s Portuguese Bend Fund will require an average annual
General Fund subsidy of $20,000 if all assumptions and estimates remain unchanged.
Interest earnings are the only revenue source, which is not sufficient to cover the
ongoing maintenance demands in the Portuguese Bend portion of the landslide area.
Subregion 1
As part of its development agreement with the City, the developer of the Subregion 1
tract (now Oceanfront Estates) was required to dedicate open space to the City and
provide a $750,000 endowment for future maintenance of that open space. The
estimated fund balance and interest earnings from the non-spendable endowment is not
expected to cover the current level of maintenance and maintain the $750,000
endowment amount. As a result, an average annual General Fund subsidy of $10,000
will be needed if all assumptions and estimates remain unchanged.
ADDITIONAL INFORMATION:
Compliance with Legislative Review Requirements
Review of Utility Users Tax
Municipal Code Section 3.30.190 requires that the City Manager submit to the City
Council an analysis of the revenues derived from the Utility User Tax (UUT) annually.
Based on the needs of the City, the City Council shall determine if any modification to
the tax rate is appropriate, or if the UUT is necessary. The tax rate cannot be increased
without a majority vote of the residents of the City during a municipal election.
2022-23 2023-24 2024-25
Pre COVID-19 UAL Payment 1,077,000 1,135,000 1,198,000
Post COVID-19 UAL Payment 1,172,100 1,331,000 1,494,900
Change in UAL Payment 95,100 196,000 296,900
15
The current estimate of FY 2020-21 UUT revenue is approximately $2.1 million or
approximately 7% of total General Fund revenue. Based upon the operating needs of
the City, Staff is recommending, under a separate agenda item this evening, that the
current UUT rate of 3% continue in FY 2020-21 be adopted.
Review of Golf Tax
Municipal Code Section 3.40.140 requires a legislative review of golf tax every four
years, to be completed prior to the adoption of the budget prepared for the
corresponding next fiscal year. The golf tax ordinance directs the City Council to
determine, based on the needs of the City, if any modification to the tax rate is
necessary or if the tax should be repealed. The City Council reviewed and approved
the current golf tax rate of 10% during FY 2019-20 budget adoption. The current
estimate of FY 2020-21 golf tax revenue is $0.3 million.
The City Council Reserve Policy
The COVID-19 pandemic has shown the importance of the prudent financial actions the
City has taken over the past several years, as well as the vulnerability of general tax
revenues. As a result of COVID-19, the City is projecting a combined loss of
approximately $6 million in general tax revenue from March 2020 through June 2021.
Roughly $3.4 million, or 57%, of the loss is attributed to decreased TOT revenue. The
remaining $2.5 million, or 43%, in lost revenue is from the combined impact to Sales
Tax, Permits, Golf Tax, and Facility Rentals. Only the 43% of revenue lost is used to
support the City’s daily operations.
As the City navigates through the unprecedented $6 million drop in revenue over the
coming months, we can see our vulnerability with general tax revenue. Staff is exploring
what measures could be taken that would help the City through a future financial crisis
and to ensure fiscal stability for the City in the years to come. To that point, Staff intends
to bring forward to the City Council at a later date proposed amendments to City Council
Policies for consideration and initiation. This would include reviewing the City Council
Reserve Policy to update any items that may be considered outdated. If desired by the
City Council at that time, Staff will then take these items to the Finance Advisory
Committee for their review and recommendations to the City Council. Staff anticipates
this to occur in Fall 2020.
CONCLUSION:
In conclusion, the 2021 Model is a decision making tool for the City. It provides a long-
term financial outlook to be utilized by the City Council and staff to make informed
decisions for both the short-term and long-term. The 2021 Model shows that the City’s
General Fund continues to have a structurally balanced budget. Operating Revenues
exceed Operating Expenditures through FY 2024-25. However, if the City continues to
transfer TOT revenue to the CIP Fund to support capital projects and no changes to the
projections and assumptions, the General Fund will experience a deficit beginning FY
2021-22. It is important to note that with the conscious efforts to implement City-Wide
16
cost saving measures, the City has always been able to adopt a balanced budget. All of
the Council Restricted Funds continues to have a strong fund balance over the next five
fiscal years. Most of the Restricted Funds will continue to support the annual operating
expenses over the next five fiscal years with the exception of Waste Reduction,
Proposition C, Measure M, Abalone Cove Sewer District, and Environmental Excise
Tax. Future operating expenses for these funds will need to be revised annually for
prudent spending and minimize the require subsidy from the General Fund.
ALTERNATIVES:
In addition to the staff recommendation, the following alternative action is available for
the City Council’s consideration:
1. Discuss and take other action related to this item.
17
Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance
Fund 6/30/2019 Revenues Transfers In Expenditures Transfers Out 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 6/30/2025
General Fund Balance 20,788,547 29,038,400 275,000 26,271,512 2,757,300 21,073,135 21,472,135 20,685,881 19,848,667 18,808,185 17,544,210
EXPENDITURES (EXCLUDING T/O)24,854,607 26,271,512 26,836,900 29,206,015 30,453,354 31,714,923 33,032,085
Restricted Amount (Policy Reserve)(12,427,303) (13,135,756) (13,418,450) (14,603,007) (15,226,677) (15,857,461) (16,516,043)
GENERAL FUND Unrestricted Balance 8,361,244 29,038,400 275,000 26,271,512 2,757,300 7,937,380 8,053,685 6,082,873 4,621,990 2,950,723 1,028,167
Restricted by Council Action
BEAUTIFICATION FUND - - - - - - - - - - -
CIP 27,017,191 506,200 2,715,600 5,896,000 - 24,342,991 24,216,191 20,014,601 18,966,652 18,334,038 15,899,352
EQUIPMENT REPLACEMENT 3,071,262 136,950 - 529,170 - 2,679,042 2,167,342 1,656,452 1,146,249 636,744 127,946
Subtotal 30,088,453 643,150 2,715,600 6,425,170 - 27,022,033 26,383,533 21,671,053 20,112,901 18,970,782 16,027,298
Restricted by Law or External Agencies
GAS TAX 884,734 1,461,920 - 2,251,840 - 94,814 394,814 769,832 1,123,191 1,454,457 1,763,188
1972 ACT 28,384 - - - - 28,384 28,384 28,384 28,384 28,384 28,384
EL PRADO LIGHTING 32,775 2,500 - 800 - 34,475 36,175 37,932 39,746 41,620 43,556
CDBG 11,458 139,300 - 281,861 - (131,103) (64,003) (3,484) 7,956 6,825 2,196
1911 ACT 1,459,612 628,000 - 916,804 - 1,170,808 1,109,908 1,402,655 1,707,398 2,024,564 2,354,590
WASTE REDUCTION 454,075 120,000 - 239,578 - 334,497 177,997 3,462 (179,433) (370,657) (570,458)
AIR QUALITY MANAGEMENT 97,012 55,000 - 50,000 - 102,012 100,012 92,073 82,875 72,394 60,602
PROPOSITION C 577,100 702,400 - 649,081 - 630,419 387,819 (59,669) (57,063) (54,361) 648,439
PROPOSITION A 2,379,324 849,400 - 1,228,952 - 1,999,772 2,072,572 2,130,020 2,171,778 2,197,532 2,206,960
PUBLIC SAFETY GRANTS 93,341 157,700 - - 175,000 76,041 103,741 121,441 139,141 156,841 174,541
MEASURE R 803,149 545,400 - 363,705 - 984,844 1,080,244 976,061 872,233 768,765 1,315,661
MEASURE M 43,707 530,000 - 536,000 - 37,707 31,707 14,987 (12,667) (51,475) (101,659)
HABITAT RESTORATION 949,518 15,000 - 179,500 - 785,018 612,518 420,716 225,016 25,337 (178,401)
SUBREGION 1 MAINTENANCE 765,320 15,000 35,000 41,400 - 773,920 756,320 728,140 699,325 669,862 639,735
MEASURE A 66,818 91,100 - - 100,000 57,918 48,918 49,936 50,969 52,018 53,083
ABALONE COVE SEWER DISTRICT 336,954 63,100 - 221,570 - 178,484 84,484 (12,572) (111,321) (211,791) (314,013)
GINSBURG CULTURAL ARTS BUILDING 1,045 - - 1,045 - (0) (0) (0) (0) (0) (0)
DONOR RESTRICTED CONTRIBUTIONS 775,163 25,000 - 32,331 - 767,832 767,832 767,782 767,604 767,293 766,844
FEDERAL GRANTS 98,315 - - - 98,315 - - - - - -
STATE GRANTS - - - 200,428 - (200,428) (0) (0) (0) (0) (0)
QUIMBY 1,701,092 52,000 - 475,259 - 1,277,833 1,302,833 1,328,283 1,354,115 1,380,334 1,406,947
LOW-MOD INCOME HOUSING 190,360 44,700 - - - 235,060 281,260 327,460 373,660 419,860 466,060
AFFORDABLE HOUSING IN LIEU 838,837 15,000 - - - 853,837 868,837 884,107 899,606 915,338 931,305
ENVIRONMENTAL EXCISE TAX 511,563 25,000 - 300,000 - 236,563 36,563 (167,457) (375,608) (587,974) (804,640)
BIKEWAYS - - - - - - - - - - -
WATER QUALITY/FLOOD PROTECTION - - - - - - - - - - -
IMPROV AUTH - PORTUGUESE BEND 80,975 2,000 55,000 70,000 - 67,975 575 (63,233) (128,931) (196,556) (266,147)
IMPROV AUTH - ABALONE COVE 1,072,611 25,000 50,000 44,250 - 1,103,361 1,049,961 992,944 934,774 875,427 814,880
GRAND TOTAL 65,130,242 35,246,070 3,130,600 40,781,085 3,130,615 59,595,212 59,125,140 53,126,733 50,574,317 48,163,002 45,013,163
Attachment A
CITY OF RANCHO PALOS VERDES
2021 FIVE-YEAR FINANCIAL MODEL
FY19-20 Estimated Resources FY19-20 Estimated Appropriations
A-1
ECONOMIC MODEL INPUT FACTORS 2021-22 2022-23 2023-24 2024-25
REVENUES
PROPERTY TAX-NET GF ESTIMATE 3.0%3.0%3.0%3.0%
PROPERTY TAX-IN LIEU OF VLF (VLFAA)3.0%3.0%3.0%3.0%
TRANSIENT OCCUPANCY TAXES 30.0%8.0%5.0%0.5%
SALES TAX 8.0%5.0%2.1%2.1%
FRANCHISE TAX 0.5%0.5%0.5%0.5%
UTILITY USERS TAX 0.5%0.5%0.5%0.5%
GAS TAX 0.0%0.0%0.0%0.0%
PERMIT REVENUES 15.0%5.0%0.0%0.0%
INVESTMENT INTEREST 1.8%1.5%1.5%1.5%
EXPENDITURES
CONSUMER PRICE INDEX 2.0%2.0%2.0%2.0%
PERSONNEL EXPENDITURES 4.25%4.25%4.25%4.25%
HEALTH INSURANCE 1.0%1.0%1.0%1.0%
PERS NORMAL COSTS 0.5%0.5%0.5%0.5%
PERS UNFUNDED LIABILITY 13.3%19.7%13.6%12.3%
SHERIFF CONTRACT 6.0%6.0%6.0%6.0%
CITY OF RANCHO PALOS VERDES
2021 FIVE-YEAR FINANCIAL MODEL
Attachement B
B-1
INDEXCITY OF RANCHO PALOS VERDES, CA - WORK-IN-PROGRESS
FORECAST SUMMARY
Attachment C
< SELECT FUND
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
REVENUES (BY ACCOUNT TYPE)
01-PROPERTY TAX-SECURED & OTHER 7,873,967 8,287,244 8,393,900 8,578,800 8,836,164 9,101,249 9,374,286 9,655,515
02-PROPERTY TAX-TRANSFER TAX 490,796 359,706 330,600 275,000 283,250 291,748 300,500 309,515
03-PROPERTY TAX-IN LIEU OF VLF 4,663,495 4,920,186 5,117,200 5,275,900 5,434,177 5,597,202 5,765,118 5,938,072
04-SALES TAX 2,520,067 2,661,180 2,260,300 2,312,300 2,497,284 2,622,148 2,677,213 2,733,435
05-TRANSIENT OCCUPANCY TAX 5,615,045 5,645,497 4,181,700 3,762,500 4,891,250 5,282,550 5,546,678 5,574,411
06-UTILITY USERS TAX 1,837,689 1,917,107 2,099,700 2,099,700 2,110,199 2,120,749 2,131,353 2,142,010
07-BUSINESS LICENSE TAX 893,059 958,293 818,600 883,200 901,747 920,684 940,018 959,759
08-FRANCHISE TAX 2,128,727 2,149,743 2,150,000 2,167,500 2,178,338 2,189,229 2,200,175 2,211,176
09-OTHER TAXES 402,732 429,049 323,300 300,300 306,606 313,045 319,619 326,331
SUBTOTAL-LOCAL TAXES 26,425,579 27,328,006 25,675,300 25,655,200 27,439,015 28,438,605 29,254,961 29,850,223
11-INTERGOVT-FEDERAL 64,483 - - - - - - -
12-GAS TAX - - - - - - - -
12-INTERGOVT-STATE 17,121 1,359 - - - - - -
13-INTERGOVT-LOCAL - - - - - - - -
SUBTOTAL-INTERGOVT REVENUE 81,604 1,359 - - - - - -
10-LICENSES & PERMITS 2,201,923 2,204,606 1,819,200 1,819,200 2,092,080 2,196,684 2,196,684 2,196,684
14-CHARGES FOR SERVICES-PW 348 - - - - - - -
15-CHARGES FOR SERVICES-RECREATION 298,163 306,353 210,200 186,800 190,723 194,728 198,817 202,992
16-FINES & FORFEITURES 143,753 128,558 87,500 87,400 89,235 91,109 93,023 94,976
17-INTEREST EARNINGS 206,893 366,409 323,200 280,000 285,040 289,316 293,655 298,060
18-LEASE & RENTAL INCOME 504,593 478,729 341,700 321,300 328,047 334,936 341,970 349,151
19-DONATIONS & DEVL FEES 67,440 14,354 13,300 26,000 26,546 27,103 27,673 28,254
20-CHARGES FOR SERVICES 89,700 169,356 139,700 150,000 150,000 150,000 150,000 150,000
21-MISCELLANEOUS REVENUES 432,608 693,332 428,300 444,000 444,000 444,000 444,000 444,000
23-OTHER SOURCES - - - - - - - -
TOTAL REVENUES 30,452,603 31,691,061 29,038,400 28,969,900 31,044,686 32,166,481 33,000,783 33,614,341
% ANNUAL CHANGE 4.1%4.1%-8.4%-0.2%7.2%3.6%2.6%1.9%
EXPENDITURES (BY ACCOUNT TYPE)
01-SALARY & WAGES 6,862,198 7,229,052 6,717,119 7,695,200 9,058,146 9,443,117 9,844,450 10,262,839
02-HEALTH INSURANCE 838,038 762,995 725,254 937,700 947,077 956,548 966,113 975,774
03-FICA/MEDICARE 115,321 115,021 120,137 136,300 142,093 148,132 154,427 160,990
04-PERS 546,456 600,473 646,308 754,400 680,137 683,538 686,955 690,390
05-DEFERRED COMP CITY MATCH 162,436 193,615 165,807 205,700 214,442 223,556 233,057 242,962
06-H.S.A.207,888 205,858 261,056 200,800 204,816 208,912 213,091 217,352
07-CALPERS UNFUNDED LIABILITIES 470,774 578,857 697,746 847,700 972,233 1,163,999 1,321,800 1,484,567
08-WORKERS' COMP - - - - - - - -
09-OTHER BENEFITS 162,014 171,754 175,102 183,000 190,778 198,886 207,338 216,150
SUBTOTAL-PERSONNEL COSTS 9,365,126 9,857,626 9,508,529 10,960,800 12,409,722 13,026,687 13,627,232 14,251,025
C-1
10-SHERIFF 6,108,698 6,335,382 6,690,000 7,091,900 7,517,414 7,968,459 8,446,566 8,953,360
11-PROF/TECH SERVICES-OTHER 4,366,963 4,103,849 4,543,734 3,654,400 4,091,357 4,173,184 4,256,648 4,341,781
12-UTILITY SERVICES 596,987 567,005 782,200 630,600 643,212 656,076 669,198 682,582
13-MAINTENANCE SERVICES 1,783,956 1,912,990 2,274,043 2,025,700 2,066,214 2,107,538 2,149,689 2,192,683
14-OTHER SERVICES 434,065 417,892 545,875 640,900 653,718 666,792 680,128 693,731
15-INSURANCE 635,613 734,135 771,110 686,600 700,332 714,339 728,625 743,198
16-OPERATING SUPPLIES / MINOR EQUIPMENT 558,755 311,336 604,221 453,400 462,468 471,717 481,152 490,775
17-CAPITAL PROJECTS 100 400 25,000 25,000 - - - -
18-CAPITAL-EQUIPMENT/VEHICLES 109,977 3,000 3,000 3,000 3,000 3,000 3,000 3,000
24-GRANTS TO OTHER ENTITIES - - - - - - - -
25-INTERFUND CHARGES 300,900 300,900 241,800 355,200 362,304 369,550 376,941 384,480
31-OTHER USES 354,421 310,092 282,000 309,400 309,400 309,400 309,400 309,400
TOTAL EXPENDITURES, BY ACCOUNT GROUP 24,615,561 24,854,607 26,271,512 26,836,900 29,219,141 30,466,743 31,728,579 33,046,014
% ANNUAL CHANGE 5.6%1.0%5.7%2.2%8.9%4.3%4.1%4.2%
EXPENDITURES (BY DEPARTMENT)
01-CITY ADMINISTRATION 4,778,949 4,174,288 4,482,653 4,858,400 5,367,061 5,524,134 5,684,182 5,849,467
02-PUBLIC SAFETY 7,137,167 7,118,805 7,367,128 7,391,200 7,849,826 8,309,313 8,796,093 9,311,816
03-FINANCE 1,587,487 1,669,799 1,956,610 2,289,800 2,576,296 2,782,080 2,965,162 3,154,575
04-PUBLIC WORKS 4,954,052 5,191,135 5,472,496 4,665,400 4,948,313 5,078,357 5,209,943 5,345,487
05-COMMUNITY DEVELOPMENT 2,735,949 3,046,978 3,189,391 3,507,100 3,945,903 4,082,790 4,222,428 4,367,251
06-RECREATION & PARKS 2,493,316 2,687,330 2,835,553 3,009,600 3,382,016 3,513,714 3,647,058 3,785,594
07-NON-DEPARTMENTAL 928,640 966,272 967,681 1,115,400 1,149,726 1,176,355 1,203,714 1,231,826
TOTAL EXPENDITURES, BY DEPARTMENT 24,615,561 24,854,607 26,271,512 26,836,900 29,219,141 30,466,743 31,728,579 33,046,014
- -
CURRENT SURPLUS/(DEFICIT) - BEFORE TRANSFERS 5,837,042 6,836,454 2,766,888 2,133,000 1,825,545 1,699,739 1,272,204 568,327
% ANNUAL REVENUES & SOURCES 19.2%21.6%9.5%7.4%5.9%5.3%3.9%1.7%
TRANSFERS-IN
15-TRANSFERS-IN 230,000 220,000 275,000 230,000 230,000 230,000 230,000 230,000
TRANSFERS-OUT
08-TRANSFERS-OUT 4,813,500 4,346,852 2,757,300 1,964,000 2,854,926 2,780,340 2,556,343 2,076,230
TOTAL REVENUE & TRANSFERS-IN 30,682,603 31,911,061 29,313,400 29,199,900 31,274,686 32,396,481 33,230,783 33,844,341
TOTAL EXPENDITURES & TRANSFERS-OUT 29,429,061 29,201,459 29,028,812 28,800,900 32,074,067 33,247,083 34,284,922 35,122,245
TOTAL SURPLUS/(DEFICIT)1,253,542 2,709,602 284,588 399,000 (799,381) (850,602) (1,054,139) (1,277,904)
FUND BALANCE-BEGINNING 16,825,402 18,078,945 20,788,547 21,073,135 21,472,135 20,672,755 19,822,153 18,768,014
FUND BALANCE PER TAB 12-FUND BALANCES
FUND BALANCE-END 18,078,945 20,788,547 21,073,135 21,472,135 20,672,755 19,822,153 18,768,014 17,490,111
VARIANCE TO TAB 12-FUND BALANCES
C-2
INDEXCITY OF RANCHO PALOS VERDES, CA - WORK-IN-PROGRESS
FORECAST SUMMARY
Attachment C
< SELECT FUND
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
REVENUES (BY ACCOUNT TYPE)
11-INTERGOVT-FEDERAL - 5,007 - - - - - -
12-INTERGOVT-STATE - - - - - - - -
13-INTERGOVT-LOCAL - - - - - - - -
SUBTOTAL-INTERGOVT REVENUE - 5,007 - - - - - -
17-INTEREST EARNINGS 303,781 508,963 506,200 460,200 468,484 475,511 482,644 489,883
TOTAL REVENUES 303,781 513,970 506,200 460,200 468,484 475,511 482,644 489,883
% ANNUAL CHANGE -9.3%69.2%-1.5%-9.1%1.8%1.5%1.5%1.5%
EXPENDITURES (BY ACCOUNT TYPE)
11-PROF/TECH SERVICES-OTHER - - - - - - - -
14-OTHER SERVICES - - - - - - - -
16-OPERATING SUPPLIES / MINOR EQUIPMENT - - - - - - - -
17-CAPITAL PROJECTS 7,503,608 3,291,424 5,896,000 2,521,000 7,495,000 4,273,800 3,641,600 4,970,800
TOTAL EXPENDITURES, BY ACCOUNT GROUP 7,503,608 3,291,424 5,896,000 2,521,000 7,495,000 4,273,800 3,641,600 4,970,800
% ANNUAL CHANGE 5.6%-56.1%79.1%-57.2%197.3%-43.0%-14.8%36.5%
EXPENDITURES (BY DEPARTMENT)
04-PUBLIC WORKS 7,503,608 3,291,424 5,896,000 2,521,000 7,495,000 4,273,800 3,641,600 4,970,800
TOTAL EXPENDITURES, BY DEPARTMENT 7,503,608 3,291,424 5,896,000 2,521,000 7,495,000 4,273,800 3,641,600 4,970,800
CURRENT SURPLUS/(DEFICIT) - BEFORE TRANSFERS (7,199,827) (2,777,454) (5,389,800) (2,060,800) (7,026,516) (3,798,289) (3,158,956) (4,480,917)
% ANNUAL REVENUES & SOURCES -2370.1%-540.4%-1064.8%-447.8%-1499.8%-798.8%-654.5%-914.7%
TRANSFERS-IN
15-TRANSFERS-IN 4,526,000 5,389,170 2,715,600 1,934,000 2,824,926 2,750,340 2,526,343 2,046,230
TRANSFERS-OUT
08-TRANSFERS-OUT - - - - - - - -
TOTAL REVENUE & TRANSFERS-IN 4,829,781 5,903,140 3,221,800 2,394,200 3,293,410 3,225,851 3,008,986 2,536,114
TOTAL EXPENDITURES & TRANSFERS-OUT 7,503,608 3,291,424 5,896,000 2,521,000 7,495,000 4,273,800 3,641,600 4,970,800
TOTAL SURPLUS/(DEFICIT)(2,673,827) 2,611,716 (2,674,200) (126,800) (4,201,590) (1,047,949) (632,614) (2,434,686)
FUND BALANCE-BEGINNING 27,079,302 24,405,474 27,017,191 24,342,991 24,216,191 20,014,600 18,966,652 18,334,038
FUND BALANCE PER TAB 12-FUND BALANCES
FUND BALANCE-END 24,405,474 27,017,191 24,342,991 24,216,191 20,014,600 18,966,652 18,334,038 15,899,351
VARIANCE TO TAB 12-FUND BALANCES
C-3
CITY OF RANCHO PALOS VERDES, CA ‐ WORK‐IN‐PROGRESSINDEXFUND SUMMARY - Attachment DFUNDTYPE101‐GENERAL FUND1‐REVENUES2‐EXPENDITURES 2020-21 2021-22 2022-23 2023-24 2024-25 28,969,900 31,044,686 32,166,481 33,000,783 33,614,341 26,836,900 29,206,015 30,453,354 31,714,923 33,032,085OPERATING SURPLUS/(DEFICIT) 2,133,000 1,838,671 1,713,127 1,285,860 582,256 3‐TRANSFERS‐IN230,000 230,000 230,000 230,000 230,000 4‐TRANSFERS‐OUT1,964,000 2,854,926 2,780,340 2,556,343 2,076,230 TRANSFERS NET(1,734,000) (2,624,926) (2,550,340) (2,326,343) (1,846,230) TOTAL OVER/(UNDER)399,000 (786,255) (837,213) (1,040,483) (1,263,975) BALANCE21,472,135 20,685,881 19,848,667 18,808,185 17,544,210 POLICY RESERVE (50% EXPS.) 13,418,450 14,603,007 15,226,677 15,857,461 16,516,043 EXCESS/(DEFICIENCY)8,053,685 6,082,873 4,621,990 2,950,723 1,028,167 202‐GAS TAX1‐REVENUES1,462,000 1,462,097 1,462,180 1,462,263 1,462,348 2‐EXPENDITURES1,162,000 1,087,079 1,108,821 1,130,997 1,153,617 OPERATING SURPLUS/(DEFICIT) 300,000 375,018 353,359 331,266 308,731 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)300,000 375,018 353,359 331,266 308,731 BALANCE394,814 769,832 1,123,191 1,454,457 1,763,188 203‐1972 ACT LANDSCAPE/LIGHT 1‐REVENUES‐ ‐ ‐ ‐ ‐ 2‐EXPENDITURES‐ ‐ ‐ ‐ ‐ OPERATING SURPLUS/(DEFICIT)‐ ‐ ‐ ‐ ‐ 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)‐ ‐ ‐ ‐ ‐ BALANCE28,384 28,384 28,384 28,384 28,384209‐EL PRADO LIGHTING DIST 1‐REVENUES2,500 2,573 2,647 2,723 2,802 2‐EXPENDITURES800 816 832 849 866 OPERATING SURPLUS/(DEFICIT)1,700 1,757 1,814 1,874 1,936 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ D-1
INDEXCITY OF RANCHO PALOS VERDES, CA ‐ WORK‐IN‐PROGRESS FUND SUMMARY - Attachment DFUNDTYPE2020-212021-222022-232023-242024-254‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)1,700 1,757 1,814 1,874 1,936 BALANCE36,175 37,932 39,746 41,620 43,556211‐1911 ACT STREET LIGHTING 1‐REVENUES628,200 646,789 665,866 685,510 705,739 2‐EXPENDITURES689,100 354,042 361,123 368,345 375,712 OPERATING SURPLUS/(DEFICIT)(60,900) 292,747 304,743 317,165 330,027 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)(60,900) 292,747 304,743 317,165 330,027 BALANCE1,109,908 1,402,655 1,707,398 2,024,564 2,354,590 213‐WASTE REDUCTION1‐REVENUES131,000 131,083 131,153 131,224 131,297 2‐EXPENDITURES287,500 305,618 314,048 322,448 331,098 OPERATING SURPLUS/(DEFICIT)(156,500) (174,535) (182,895) (191,224) (199,801) 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)(156,500) (174,535) (182,895) (191,224) (199,801) BALANCE177,997 3,462 (179,433) (370,657) (570,458) 214‐AIR QUALITY MANAGEMENT 1‐REVENUES55,000 55,000 55,000 55,000 55,0002‐EXPENDITURES57,000 62,939 64,198 65,482 66,791OPERATING SURPLUS/(DEFICIT)(2,000) (7,939) (9,198) (10,482) (11,791) 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)(2,000) (7,939) (9,198) (10,482) (11,791) BALANCE100,012 92,073 82,875 72,394 60,602215‐PROPOSITION C1‐REVENUES702,400 702,512 702,606 702,702 702,800 D-2
INDEXCITY OF RANCHO PALOS VERDES, CA ‐ WORK‐IN‐PROGRESS FUND SUMMARY - Attachment DFUNDTYPE2020-212021-222022-232023-242024-252‐EXPENDITURES945,000 1,150,000 700,000 700,000 ‐ OPERATING SURPLUS/(DEFICIT)(242,600) (447,488) 2,606 2,702 702,800 3‐TRANSFERS‐IN ‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)(242,600) (447,488) 2,606 2,702 702,800 BALANCE387,819 (59,669) (57,063) (54,361) 648,439 1 YR. PAVEMENT MGMT EXP.526,000 526,000 526,000 526,000 526,000 EXCESS/(DEFICIENCY)(138,181) (585,669) (583,063) (580,361) 122,439 216‐PROPOSITION A1‐REVENUES849,400 849,580 849,733 849,888 850,045 2‐EXPENDITURES776,600 792,132 807,975 824,134 840,617 OPERATING SURPLUS/(DEFICIT) 72,800 57,448 41,758 25,754 9,428 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)72,800 57,448 41,758 25,754 9,428 BALANCE2,072,572 2,130,020 2,171,778 2,197,532 2,206,960 217‐PUBLIC SAFETY GRANTS 1‐REVENUES157,700 157,700 157,700 157,700 157,700 2‐EXPENDITURES‐ ‐ ‐ ‐ ‐ OPERATING SURPLUS/(DEFICIT) 157,700 157,700 157,700 157,700 157,700 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT130,000 140,000 140,000 140,000 140,000 TRANSFERS NET(130,000) (140,000) (140,000) (140,000) (140,000) TOTAL OVER/(UNDER)27,700 17,700 17,700 17,700 17,700BALANCE103,741 121,441 139,141 156,841 174,541 220‐MEASURE R1‐REVENUES545,400 545,818 546,172 546,531 546,896 2‐EXPENDITURES450,000 650,000 650,000 650,000 ‐ OPERATING SURPLUS/(DEFICIT) 95,400(104,182) (103,828) (103,469) 546,896 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ D-3
INDEXCITY OF RANCHO PALOS VERDES, CA ‐ WORK‐IN‐PROGRESS FUND SUMMARY - Attachment DFUNDTYPE2020-212021-222022-232023-242024-25TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)95,400(104,182) (103,828) (103,469) 546,896 BALANCE1,080,244 976,061 872,233 768,765 1,315,661 221‐MEASURE M1‐REVENUES530,000 530,000 530,000 530,000 530,000 2‐EXPENDITURES536,000 546,720 557,654 568,807 580,184 OPERATING SURPLUS/(DEFICIT)(6,000) (16,720) (27,654) (38,807) (50,184) 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)(6,000) (16,720) (27,654) (38,807) (50,184) BALANCE31,707 14,987(12,667) (51,475) (101,659) 222‐HABITAT RESTORATION 1‐REVENUES12,400 12,623 12,813 13,005 13,2002‐EXPENDITURES184,900 204,425 208,513 212,684 216,937 OPERATING SURPLUS/(DEFICIT)(172,500) (191,802) (195,701) (199,679) (203,737) 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)(172,500) (191,802) (195,701) (199,679) (203,737) BALANCE612,518 420,716 225,016 25,337(178,401) EMERGENCY PROJECTS RESERVE 50,000 50,000 50,000 50,000 50,000EXCESS/(DEFICIENCY)562,518 370,716 175,016 (24,663) (228,401) 223‐SUBREGION ONE MAINTENANCE 1‐REVENUES14,000 14,252 14,466 14,683 14,9032‐EXPENDITURES41,600 42,432 43,281 44,146 45,029OPERATING SURPLUS/(DEFICIT)(27,600) (28,180) (28,815) (29,463) (30,126) 3‐TRANSFERS‐IN10,000 ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET10,000 ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)(17,600) (28,180) (28,815) (29,463) (30,126) BALANCE756,320 728,140 699,325 669,862 639,735 NON‐SPENDABLE ENDOWMENT 750,000 750,000 750,000 750,000 750,000 D-4
INDEXCITY OF RANCHO PALOS VERDES, CA ‐ WORK‐IN‐PROGRESS FUND SUMMARY - Attachment DFUNDTYPE2020-212021-222022-232023-242024-25EXCESS/(DEFICIENCY)6,320 (21,860) (50,675) (80,138) (110,265) 224‐MEASURE A MAINTENANCE 1‐REVENUES91,000 91,018 91,033 91,049 91,0652‐EXPENDITURES‐ ‐ ‐ ‐ ‐ OPERATING SURPLUS/(DEFICIT) 91,000 91,018 91,033 91,049 91,0653‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT100,000 90,000 90,000 90,000 90,000TRANSFERS NET(100,000) (90,000) (90,000) (90,000) (90,000) TOTAL OVER/(UNDER)(9,000) 1,018 1,033 1,049 1,065 BALANCE48,918 49,936 50,969 52,018 53,083225‐ABALONE COVE SEWER DIST 1‐REVENUES52,000 53,560 55,167 56,822 58,5262‐EXPENDITURES146,000 150,617 153,915 157,292 160,748 OPERATING SURPLUS/(DEFICIT)(94,000) (97,057) (98,748) (100,470) (102,222) 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)(94,000) (97,057) (98,748) (100,470) (102,222) BALANCE84,484(12,572) (111,321) (211,791) (314,013) 228‐DONOR RESTRICTED CONTRIB 1‐REVENUES25,000 25,450 25,832 26,219 26,6132‐EXPENDITURES25,000 25,500 26,010 26,530 27,061OPERATING SURPLUS/(DEFICIT)‐ (50) (178) (311) (448) 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)‐ (50) (178) (311) (448) BALANCE767,832 767,782 767,604 767,293 766,844 285‐IA PORTUGUESE BEND MAINT 1‐REVENUES2,600 2,647 2,687 2,727 2,768 2‐EXPENDITURES90,000 96,455 98,384 100,352 102,359 OPERATING SURPLUS/(DEFICIT)(87,400) (93,808) (95,698) (97,625) (99,591) 3‐TRANSFERS‐IN20,000 30,000 30,000 30,000 30,000D-5
INDEXCITY OF RANCHO PALOS VERDES, CA ‐ WORK‐IN‐PROGRESS FUND SUMMARY - Attachment DFUNDTYPE2020-212021-222022-232023-242024-254‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET20,000 30,000 30,000 30,000 30,000TOTAL OVER/(UNDER)(67,400) (63,808) (65,698) (67,625) (69,591) BALANCE575 (63,233) (128,931) (196,556) (266,147) 310‐CDBG1‐REVENUES217,700 228,585 182,868 173,725 173,725 2‐EXPENDITURES150,600 168,066 171,428 174,856 178,353 OPERATING SURPLUS/(DEFICIT) 67,100 60,519 11,440(1,132) (4,629) 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)67,100 60,519 11,440(1,132) (4,629) BALANCE(64,003) (3,484) 7,956 6,825 2,196 330‐INFRASTRUCTURE IMPRVMNTS 1‐REVENUES460,200 468,484 475,511 482,644 489,883 2‐EXPENDITURES2,521,000 7,495,000 4,273,800 3,641,600 4,970,800 OPERATING SURPLUS/(DEFICIT)(2,060,800) (7,026,516) (3,798,289) (3,158,956) (4,480,917) 3‐TRANSFERS‐IN1,934,000 2,824,926 2,750,340 2,526,343 2,046,230 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET1,934,000 2,824,926 2,750,340 2,526,343 2,046,230 TOTAL OVER/(UNDER)(126,800) (4,201,590) (1,047,949) (632,614) (2,434,686) BALANCE24,216,191 20,014,601 18,966,652 18,334,038 15,899,352 EMERGENCY PROJECTS RESERVE 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 EXCESS/(DEFICIENCY)21,216,191 17,014,601 15,966,652 15,334,038 12,899,352 332‐STATE GRANTS1‐REVENUES‐ ‐ ‐ ‐ ‐ 2‐EXPENDITURES(200,428) ‐ ‐ ‐ ‐ OPERATING SURPLUS/(DEFICIT) 200,428 ‐ ‐ ‐ ‐ 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)200,428 ‐ ‐ ‐ ‐ BALANCE(0)(0)(0)(0)(0)D-6
INDEXCITY OF RANCHO PALOS VERDES, CA ‐ WORK‐IN‐PROGRESS FUND SUMMARY - Attachment DFUNDTYPE2020-212021-222022-232023-242024-25334‐QUIMBY PARK DEVELOPMENT 1‐REVENUES25,000 25,450 25,832 26,219 26,6132‐EXPENDITURES‐ ‐ ‐ ‐ ‐ OPERATING SURPLUS/(DEFICIT) 25,000 25,450 25,832 26,219 26,6133‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)25,000 25,450 25,832 26,219 26,613BALANCE1,302,833 1,328,283 1,354,115 1,380,334 1,406,947 336‐LOW‐MODERATE INCOME HOUSI 1‐REVENUES46,200 46,200 46,200 46,200 46,2002‐EXPENDITURES‐ ‐ ‐ ‐ ‐ OPERATING SURPLUS/(DEFICIT) 46,200 46,200 46,200 46,200 46,2003‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)46,200 46,200 46,200 46,200 46,200BALANCE281,260 327,460 373,660 419,860 466,060 337‐AFFORDABLE HOUSING PROJ 1‐REVENUES15,000 15,270 15,499 15,732 15,9682‐EXPENDITURES‐ ‐ ‐ ‐ ‐ OPERATING SURPLUS/(DEFICIT) 15,000 15,270 15,499 15,732 15,9683‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ TRANSFERS NET‐ ‐ ‐ ‐ ‐ TOTAL OVER/(UNDER)15,000 15,270 15,499 15,732 15,968BALANCE868,837 884,107 899,606 915,338 931,305 338‐DEVELOP IMPACT MIT (EET) 1‐REVENUES10,000 10,180 10,333 10,488 10,6452‐EXPENDITURES210,000 214,200 218,484 222,854 227,311 OPERATING SURPLUS/(DEFICIT)(200,000) (204,020) (208,151) (212,366) (216,666) 3‐TRANSFERS‐IN‐ ‐ ‐ ‐ ‐ 4‐TRANSFERS‐OUT‐ ‐ ‐ ‐ ‐ D-7
INDEXCITY OF RANCHO PALOS VERDES, CA - WORK-IN-PROGRESS
FUND SUMMARY - Attachment D
FUND TYPE 2021E 2022F 2023F 2024F 2025F
TRANSFERS NET - - - - -
TOTAL OVER/(UNDER)(200,000) (204,020) (208,151) (212,366) (216,666)
BALANCE 36,563 (167,457) (375,608) (587,974) (804,640)
681-EQUIPMENT REPLACEMENT 1-REVENUES 138,300 139,110 139,797 140,495 141,203
2-EXPENDITURES 650,000 650,000 650,000 650,000 650,000
OPERATING SURPLUS/(DEFICIT)(511,700) (510,890) (510,203) (509,505) (508,797)
3-TRANSFERS-IN - - - - -
4-TRANSFERS-OUT - - - - -
TRANSFERS NET - - - - -
TOTAL OVER/(UNDER)(511,700) (510,890) (510,203) (509,505) (508,797)
BALANCE 2,167,342 1,656,452 1,146,249 636,744 127,946
795-IA ABALONE COVE MAINT 1-REVENUES 2,600 2,647 2,687 2,727 2,768
2-EXPENDITURES 56,000 59,663 60,857 62,074 63,315
OPERATING SURPLUS/(DEFICIT)(53,400) (57,017) (58,170) (59,347) (60,548)
3-TRANSFERS-IN - - - - -
4-TRANSFERS-OUT - - - - -
TRANSFERS NET - - - - -
TOTAL OVER/(UNDER)(53,400) (57,017) (58,170) (59,347) (60,548)
BALANCE 1,049,961 992,944 934,774 875,427 814,880
NON-SPENDABLE ENDOWMENT 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
EXCESS/(DEFICIENCY)49,961 (7,056) (65,226) (124,573) (185,120)
TOTAL 1-REVENUES 35,145,500 37,263,312 38,370,260 39,227,058 39,873,045
2-EXPENDITURES 35,615,572 43,261,719 40,922,676 41,638,373 43,022,884
OPERATING SURPLUS/(DEFICIT)(470,072) (5,998,407) (2,552,416) (2,411,315) (3,149,839)
3-TRANSFERS-IN 2,194,000 3,084,926 3,010,340 2,786,343 2,306,230
4-TRANSFERS-OUT 2,194,000 3,084,926 3,010,340 2,786,343 2,306,230
TRANSFERS NET - - - - -
TOTAL OVER/(UNDER)(470,072) (5,998,407) (2,552,416) (2,411,315) (3,149,839)
BALANCE 59,125,140 53,126,733 50,574,317 48,163,002 45,013,163
D-8