The City of Brentwood remained financially stable during the 2018-2019 fiscal year, according to a recently released, comprehensive, annual financial report.
The city’s general or primary operating fund exceeded expected revenues by over $2 million, garnering about $55 million.
“The general fund had a strong year,” said Brentwood Accounting Manager Sonia Agostini.
Actual general-fund operating revenues ($54.5 million) exceeded operating expenses ($51.4 million) by about $3.2 million, with $700,000 of that set aside to maintain a 30% general fund reserve; $1.1 million used to pay down the city’s unfunded pension obligations; another $1.1 million set aside in the city’s Pension/Retiree Medical Fund to fund future pension and retiree medical costs; $200,000 allocated for initial operating costs for the future HIVE Business Café; and $100,000 toward future general plan updates.
Development activity remained strong in the fiscal year, with the city issuing about 352 single-family residential building permits — well above the budgeted 250 — creating a $1.6 million surplus in permit revenue during the year.
Property and sales tax revenue was also higher than expected, coming in at about $500,000 above projections. In total, the city garnered $8,941,152 in sales tax, and $14,409,359 in property tax.
City expenses, meanwhile, were lower than anticipated in certain areas, with other operating costs ($16,578,587) coming in at $3.8 million under budget, and personnel expenses ($34,862,093) $3.4 million lower than expected, Agostini said.
“These variances are a result of savings from personnel vacancies, along with supplies and services savings realized across most of the departments, which reflects the continued fiscal responsibility that is practiced throughout the city,” she said.
The city’s enterprise funds, which include solid waste, water and wastewater, are posting results in line with an approved rate study, but operating revenues did increase over the prior year, due to approved annual rate increases and new user accounts derived from new development activity.
The city’s internal service and replacement accounts, which are used to replace city infrastructure and assets, are also on track to create a smooth future for the city, Agostini said.
Several councilmembers indicated they are pleased with the overall status of the city’s finances — a testament to employees from various departments.
“I really want to say ‘thank you’ to all the departments for providing financially sound advice for the city,” said Councilmember Karen Rarey.
Looking toward the 2019-2020 fiscal year, the report did note that development activity is expected to slow to 250 new residential building permits, down from the 352 issued last fiscal year, and low levels of investment income will likely be realized because of reduced interest rates.
On a positive note, assessed valuation — the dollar value assigned to a property to measure applicable taxes — is expected to see a 6.73% rise.
The report also concludes that personnel-related cost increases, continued escalation in pension and retiree medical costs, and increasing pressure on demands for city services will all factor into the city’s financial future, but “strong fiscal policy and leadership by the city council has put the city in a strong financial position to meet future cost challenges.”
To view the complete report, see packet page 377 at www.bit.ly/2T2bFRY.