Page 45 - FY 2021-22 Supporting Information

2021-22 BUDGET
FOUR-YEAR GENERAL FUND BUDGET OUTLOOK (OUTLOOK) FOOTNOTES

(5) Electricity Users tax are based on the 2020 load forecast updated with actuals through February 2021 and
adjusted to reflect delinquent payments as provided by the Department of Water and Power (DWP). 2021-22 and
outgoing years assume recovery to pre-pandemic average growth.

Gas users tax revenue for 2021-22 accounts for the second year of a three-year rate reduction stemming from a
class-action lawsuit settlement. Consumption and prices are assumed to remain stable in 2021-22 and
subsequent years.

The decline in communication users tax (CUT) revenue has accelerated with strategic wireless plan pricing and
decreased landline use. 2021-22 and outgoing years assume an ongoing drop in CUT receipts.

(6) The projected revenue growth in departmental receipts inclusive of License, Permits, Fees, and Fines are
dependent on policy decisions to increase departmental fees, collect full overhead cost reimbursements on
Special Funds with sufficient capacity to do so, and increase reimbursements for those funds that have historically
received a General Fund subsidy. Growth in departmental receipts for 2021-22 reflects the easing of pandemic-
related restrictions on Transportation, Police, Fire, Building and Safety, Animal Services and other department
services, restoring license, permit, fees and fine receipts. Additionally, updates to the cost allocation plan will
typically increase reimbursements for related costs and other expenditures from proprietary and special funded
departments. However, decreased balances in the solid waste, gas tax, stormwater, and other special funds will
reduce reimbursements below cost recovery. 2022-23 assumes receipts to have returned to the pre-pandemic
trend in receipts with growth slowing 2.7 percent in outgoing years.

(7) Transient occupancy tax revenue in 2021-22 assumes a 75 percent increase from the revised 2020-21
estimate, inclusive of hotel and short-term rental revenue. The 2021-22 revenue amount remains below pre-
pandemic levels, after two years of decline. Estimates are based on assumptions for room demand and room
rates, with greater downside risk to international tourism assumptions. A gradual recovery to pre-pandemic hotel
room demand is anticipated by 2023-24 with outgoing years reflecting historical growth.

Parking Occupancy tax assumes the same 75 percent growth as transient occupancy tax, although from a
relatively smaller decline in 2020-21. There is potential liability for the credit against taxes owed for pre-paid
parking occupancy taxes collected from prior year season-ticket holders. 2021-22 through 2023-24 receipts are
assumed to recover at a faster pace than TOT. 2024-25 and 2025-26 assume historical growth.

The Power Revenue Transfer estimate for 2021-22 is provided by the Department of Water and Power based on
assumptions for estimated 2020-21 Power System revenue. The final transfer amount may be adjusted to conform
to actual 2020-21 power system revenue in accordance with audited financial statements. Outgoing years assume
an average amounts transferred since a transfer limit was established.
(8) The American Rescue Plan (ARP) provides fiscal recovery funds for metropolitan cities, distributed using a
modified Community Development Block Grant (CDBG) formula. The 2021-22 amount includes $677 million which
represents the City’s second tranche allocation out of a total City allotment of $1.354 billion. An initial tranche of
$677 million is anticipated to be received in 2020-21. ARP funds are one-time revenues and subsequent years
do not include the continuation of these funds. ARP revenue are based on the estimate from the House Committee
on Oversight, not final allocations.
(9) Revenue from the Special Parking Revenue Fund (SPRF) represents the projected surplus that may be
available to transfer to the General Fund after accounting for debt service and other expenditures associated with
the maintenance, upgrades, and repairs of parking structures, meters, and related assets. The annual base-level
surplus is $23.5 million. Any amounts above this are considered one-time receipts and deducted from the
estimated revenue growth for the following fiscal year. The transfer in 2020-21 was originally budgeted at $27.7
million but due to the pandemic’s impact on parking revenues, the 2020-21 transfer was eliminated. The 2021-22
estimate assumes an $8.5 million surplus available for transfer. Subsequent years assume the base transfer
amount of $23.5 million.

(10) The Outlook does not include any transfers from the Budget Stabilization Fund (BSF).

(11) The Outlook does not include any transfers from the Reserve Fund.

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