New Model Looks to Future of Rocklin Finances
Fiscal sustainability is a key element of every decision made by the City of Rocklin.
As part of detailed planning, staff from Rocklin’s finance department shared a budget analysis at the Oct. 8 City Council meeting that provides valuable insight into how the City should be managed to stay fiscally sound over the next five years.
“The new model shines a light on where course adjustments to current plans are needed, ” said Rocklin Assistant City Manager/CFO Kim Sarkovich. “The forecast take a closer look at City-wide funding sources and expenditures and, for the first time, pulls in costs associated with plans for five-year investments in items like large vehicle purchases or roadway improvement projects.”
Challenges identified by the model include: increasing costs of pensions due to changes in how CalPERS calculates liabilities; fleet maintenance capital expenditures; and growth of park expenditures on the General Fund.
Positive trends show the continued growth of the local economy, with property taxes, sales taxes, and development revenues increasing, year-over-year, although at reducing rates. Essential City services and programs are also financially strong.
The City of Rocklin already employs a number of Key Management Practices that contribute to financial stability, which, along with new strategies, are part of recommendations to address identified challenges.
- The city has applied surplus budget funds in past years to payments towards CalPERS pension liability, which has already controlled cost increases and softened the blow of changing state policies.
- Rocklin maintains an operating reserve equal to 25% of budgeted expenditures in the General Fund. This reserve policy has created a financial cushion, which will continue to grow.
- Rebuilding reserves in the fleet fund for the purchase of new vehicles and other capital assets is recommended, as is adjusting the schedule of major capital projects, as necessary, to support cash flow.
- New sources of funding for maintenance of the city parks currently backed by the General Fund should be explored.
- Economic development efforts to increase business growth and consumer spending in Rocklin should be continued.
The five-year financial model also shows the need to further control employee compensation and the growth of City staff, which is already operating at lean levels.
Public entities across the state are facing challenges in a fiscal environment where costs of goods, services and employees are increasing, while funding sources become more limited. Staff is committed to providing the first class services, infrastructure, and amenities residents expect and deserve through prudent planning and by maximizing the efficiency of public funds.