City of Folsom Q2 financial report; unemployment down, home prices up 19%

Folsom unemployment and home sales are down, while the median Folsom home price went up last year, according to city officials. During the regular meeting Tuesday, the Folsom City council heard the Quarterly Financial Report Tuesday for the second quarter of Fiscal Year 2021-22. The report is an analysis of the unaudited financial status of the City's major funds, covering the six-month period from July through December. The pandemic over the past year largely affected financial fluctuations throughout the budget. While unemployment was 5.0 and 4.8% in California and Sacramento County, Folsom's unemployment rate was 2.8%, officials said. As a comparison, the state unemployment rates were 9.1% in Dec. 2020, 83% in Sacramento County and 4.9% in Folsom, according to the report. A comparison of home sales during the second quarter of FY 2021-22 and FY 2020-21 shows the number of homes sold decreased by 139, or 23.76%. The average median sales price through the second quarter of FY 2021-22 was $730,000, an increase of 19.45% over 2020-21. Fiscal Year 2021-22 is currently projected to end the year with a Folsom General Fund unassigned fund balance of $20.75 million, the report stated. As a comparison, the unassigned fund balance in FY 2020-21 was $19.20 million (audited). The unassigned fund balance as a percentage of expenditures is projected at 2l.02% for FY 2021-22. The number was 21.38% in 2020-21. Although the total unassigned fund balance is increasing, as a percentage of expenditures it is expected to decrease. The FY 202I-22 total projected revenues of $100.22 million is an increase of $4.64 million, or 4.85% over the prior year, and a projected increase of $5.24 million, or 5.485/5 over FY 202I-22 budgeted revenues of $94.98 million. "The increase is seen mostly in charges for services and sales tax and is due to continued recovery from the COVID-I9 related impacts." the report said. Property tax received in the first half of the fiscal year was $13.40 million. Compared to the prior fiscal year is an increase of $ 1.08 million or 8.81 %. The current projection is for property tax to end the fiscal year with a slight increase of $500,000 over the budgeted amount of $32.49 million, which would be an increase of $1.74 million from FY 2020-21 or 5.56%. Sales tax is projected to end the fiscal year at $26.50 million, an increase of $ 1.95 million over the budgeted amount of $24.55 million, or 7.93%. Officials said this is due to a better-than-expected recovery from COVID-19 impacts.However, when compared to the results for FY 2020-21 sales tax revenues of $25.85 million, it is only a 2.52% increase year over year. Through the second quarter, charges for services were $6.83 million, with the current projection for the end of FY 2021-22 is $13.30 million. The projection of $13.30 million is an increase from the $9.90 million budgeted and a decrease from the $14.17 million received in the prior year. The increase over the budgeted amount is mostly related to better than expected Parks and Recreation revenues, up $1.60 million, due to increased program activity after recovering from the impacts of COVID-19. Also, development charges are projected to be up $280,000 over the budgeted amount and charges inPolice and Fire are up $631,000. Charges inthe Public Safety Departments are estimated reimbursements from the California Office of Emergency Services (CalOES) for wildfire strike teams. The decrease in charges for services when compared to the prior fiscal year is in development charges of approximately $1.13 million, related to a slowing of engineering fee revenue related to the Plan Area development compared to the prior year. Officials said there is also a decrease in Fire Department charges related to prior year reimbursements from CaI OES of $700,000, which should also be reflected in a reduction in overtime expenses when compared to the prior fiscal year. Fiscal Year 202I-22 total projected General Fund expenditures are $98.73 million, $3.74 million (3.94%) more than the appropriated amount of $94.98 million. The projected expenditure total includes increases in salaries and benefits of $1.39 million, an increase in contractsof$l.22millionandanincreaseincapitaloutlayof$533,000. The projected increase in salaries is primarily in the Police Department ($128,000) and the Fire Department ($1.95 million) and imostly due to overtime. This will be partially offset by reimbursements from CaI OES for overtime due to wildfires (Police $300,000, Fire $750,000). Salary increases in Parks and Recreation, $39,000, is mainly due to increased temporary salaries, as programs reopened from closures due to the pandemic. The increase to capital outlay is a cost carry over for renovations at the Aquatic Center. Utility Enterprise Funds All three Utility Operating Funds are projected to end the fiscal year with operating revenues exceeding operating expenses. Net assets in all three funds are projected to decrease once capital expenses are included. In the case of Water and Wastewater, the capital outlay is for capital projects and in Solid Waste, it is the purchase of replacement vehicles, officials said. A year over year comparison of the fiscal year-end projection of expenses and revenues in the combined operating and capital funds shows charges for service revenues in Water are currently projected to decrease by $379,000 (2.08%) and operating expenses are projected to increase by $1.5 million (1094%).The increase is mostly seen in maintenance and operations costs, officials said.. Wastewater Operating charges for services revenues are projected to increase by $ 150,000 (1.77%) and operating expenses are projected to increase. The increase in operating expenses is by $441,000 (8.71%). The increase in expense in Wastewater is seen mostly in supplies, according to the report. Solid Waste Operating charges for services revenues are projected to increase by $2.48 million (16.34%) and operating expenses are projected to increase by $1.73 million (12.46%). Increases in expenses are mainly due to employee and contract costs, and the increase in the projected revenues is due to the recent increase in service rates. The increase in expenses and revenues in Solid Waste are both directly attributable to the regulations regarding food waste and the change in recyclables. Expenses for capital improvements are currently projected to increase across all three enterprise funds when compared to the prior year. The increase is due to budgeted project and vehicle replacement costs.