The URL can be used to link to this page

Home My WebLink AboutFin Preliminary Citywide Proposed Budget for Fiscal Year 2024-25 PPTPROPOSED BUDGET FISCAL YEAR 2024-2025 CITY COUNCIL MEETING JUNE 3, 2024 PRESENTATION OUTLINE •FY2024-25 Budget Development Goals •FY2023-24 Q3 Budget Update •ALL FUNDS •General Fund •FY2024-25 Proposed Budget Summary •All Funds •General Fund •Other Funds •FY2024-25 Funding Recommendations •General Fund •Other Funds •General Fund Reserves / Fund Balance •Emergency Reserves •Allocation of Assigned Fund Balance •Five-Year General Fund Forecast •FY 2024-25 Capital Improvement Program Budget •Ranking Criteria •Projects / Funding Plan •FY2024-25 Personnel / Staffing •Authorized Positions •Recommended FY2024-25 Staffing Changes •Next Steps FY 2024-2025 BUDGET PROCESSGOALS AND OBJECTIVES •Allocate City resources in support of ongoing programs, services and operations consistent with current service levels and community needs and expectations. •Manage available budget flexibility so as to address priority City Council goals and initiatives. •Adhere to principal of funding recurring operational costs with recurring revenues and limit use of one-time funds to one-time expenditures. •Promote long-term sustainability of city programs and services by maintaining a balanced budget through the multi-year planning horizon. •Maintain prudent reserves to buffer the adverse impacts of revenue volatility and unforeseen emergencies. •Promote trust and fiscal stewardship over public funds through sound fiscal policies, management practices and transparency. POLICY FOCUS AREAS ECONOMIC RECOVERY RACIAL EQUITY HOUSING & HOMELESSNESS SUSTAINABILITY, CLIMATE CHANGE & DISASTERS Building back our economy stronger and more resilient than before Working to achieve racial equity and advance opportunities for all Reducing greenhouse gas emissions while mitigating and adapting to climate change Creating new housing, keeping people in their homes, and use a “Housing First” model FY 2023-24 Q3 BUDGET UPDATE FY2023/24 Q3 BUDGET UPDATE All Funds Adopted Budget FY 2023-24 Amended Budget FY 2023-24 Actual Results Through 3/31/24 % of Amended FY2023-24 Budget Revenues 167,575,656 170,857,209 116,616,641 68.3% Transfers in 1,827,461 1,827,461 1,030,439 56.4% Total Resources 169,403,117 172,684,670 117,647,080 68.1% Expenditures 193,400,751 205,306,716 124,232,326 60.5% Transfers out 2,207,000 6,644,483 6,094,483 91.7% Total Appropriations 195,607,751 211,951,199 130,326,809 61.5% Net Results (26,204,634) (39,266,529) FY2023/24 Q3 BUDGET UPDATE FY2023/24 Q3 BUDGET UPDATE OVERVIEW FY 2024-25 PROPOSED BUDGET FY 2024-25 PROPOSED BUDGET SUMMARY Fund Sources (Revenues and Transfers In) Uses (Expenditures and Transfers Out) General Fund $103,790,510 $112,291,757 General Plan 647,275 1,151,725 Special Revenue/Grant/Trust 46,891,800 55,171,932 Enterprise (Parking)4,807,330 4,795,360 Internal Service/ Capital Replacement 26,723,421 28,087,298 Capital Project Funds 7,668,509 9,315,000 Citywide Total – ALL FUNDS $190,528,845 $210,813,072 Less Internal Service Fund Charges/ Transfers $(31,277,535)$(31,277,535) Citywide Total – Excluding Dual Appropriations $159,251,309 $179,535,537 FY 2024-2025 PROPOSED BUDGETALL FUNDS APPROPRIATIONS Fund ADOPTED FY2023-24 PROPOSED FY 2024-25 General Fund $100,041,140 $112,291,757 General Plan 2,344,820 1,151,725 Special Revenue/Grant/Trust 58,524,613 55,171,932 Enterprise (Parking)4,973,454 4,795,360 Internal Service/ Capital Replacement 25,305,787 28,087,298 Capital Project Funds 2,550,000 9,315,000 Citywide Total – ALL FUNDS $195,549,914 $210,813,072 Less Internal Service Fund Charges/ Transfers $(23,850,879)$(31,277,535) Citywide Total – Excluding Dual Appropriations $171,699,035 $179,535,537 FY2024-25 GENERAL FUND REVENUES •General Fund Revenues projected at $103.8M – 3.4% over FY 2023-24 •Projected property tax increase of 4.5% •Sales and use tax projected to remain flat over FY2023-24 •Most other revenues such as permits, licensing, development fees and plan review projected to increase by 3-5% Property Tax 26% Sales and Use Tax 44% Franchise Tax 5% Business License Tax 3% Transient Occumpancy Tax 4% Other Agencies 11% Other Revenues 7% General Fund Revenues by Category FY 2024-25GENERAL FUND EXPENSES •Year over year increase in of $12.25M over FY 23-24 budget. •Exclusive of transfers, expenditure appropriations increase $4.2M (4.3%) over FY 23-24 budget. •General Fund Personnel Costs projected to increase by $4.0M per anticipated labor agreements •Includes transfers totaling $10.26 million to Special Revenue, Internal Services and Capital Funds Finance 2% Non-Departmental 12% City Manager/City Council 4%City Clerk 1% Digital Service 2% Human Resources 1% City Attorney 1% Community Development 6% Police 28% Fire 24% Public Works 15%Library 3% Economic Development 1% General Fund Expenditures by Department SUMMARY FY 2024-25 PROPOSED BUDGET FUNDING RECOMMENDATIONS FY 2024-2025 GENERAL FUND BUDGET RECOMMENDATIONS FY 2024-2025 GENERAL FUND BUDGET RECOMMENDATIONS FY 2024-2025 GENERAL FUNDS BUDGET RECOMMENDATIONS FY 2024-2025 BUDGET RECOMMENDATIONS SPECIAL REVENUE FUNDS Recurring One-Time Paramedic Fund $106,500 General Plan / Long-Range $200,000 Measure D - Library 670,000 Measure C – Wildfire Prevention 1,743,205 Measure A – Open Space 937,500 Affordable Housing In-Lieu 200,00 Grants - Homelessness 1,083,820 FY 2024-2025 BUDGET RECOMMENDATIONS INTERNAL SERVICE FUNDS Recurring One-Time Vehicle Replacement Fund $ 221,439 Technology Fund $ 401,152 1,388,016 Building Maintenance Fund 200,000 Liability Insurance Fund 450,000 1,895,000 Police Equipment Replacement 277,000 GENERAL FUND RESERVES AND FUND BALANCE FY 2024-2025 PROPOSED BUDGET GENERAL FUND RESERVE POLICY •Current General Fund Reserve Policy = 10% of Operating Expenses (FY2023-24 = $9.87M) •Staff recommends Council consider INCREASING General Fund Reserve Level to 15% of Operating Expenses •Recommendation Based Upon: •Analysis of Historical Results – Budget vs Actual •Comparison to “Best Practices” Recommendations •Survey of comparable jurisdictions FY 2024-2025 PROPOSED BUDGET GENERAL FUND RESERVE POLICY •Components of Proposed 15% Reserve Level •Economic Uncertainty – 5% •Emergency Reserve (Unplanned) – 10% •Reserves require City Council action prior to use •Policy to address how reserve funding is RESTORED •Provides guidance on use of year-end fund balance in excess of reserve policy •Unfunded Liabilities •Capital FY 2024-2025 PROPOSED BUDGET GENERAL FUND RESERVE LEVELS FY24-25 year-end General Fund Reserve projected at $22.8M Reserve Policy Level (15%) = $15.3M Assigned Fund Balance = $7.2M Unassigned Fund Balance = $0.3M FY 2024-2025 PROPOSED BUDGET ALLOCATION OF FUND BALANCE Transfers $7,485,000 Liability Fund 2,000,000 Capital Fund 2,000,000 Streets /Roads (Capital) 1,000,000 Vehicle Replacement 1,000,000 Public Safety Equip Repl. 500,000 Stormwater Fund 985,000 Appropriations Enterprise Resource Planning (ERP) $1,000,000 Racial Equity Initiatives 500,000 Assigned Fund Balance FY24-25 Capital Projects $4,182,276 Grant Match $2,000,000 Capital Reserve $1,000,000 Unassigned Fund Balance $ 332,468 FY 2024-25 PROPOSED BUDGET MULTI-YEAR OUTLOOK FY 2024-2025 PROPOSED BUDGET GENERAL FUND OUTLOOK FY20245-25 Proposed Budget : •Balanced Operating Budget •Draw-down of $8.50 million in Fund Balance Reserve Policy level (15%) = $15.3M •Assigned Fund Balance = $7.2M •Unassigned Fund Balance = $0.3M Forecast reflects balanced budget through FY26-27 •Modest budget gap $1.0M - $1.2M (approx. 1.0%) projected 4-5 years out •City has ability to mitigate without adverse impact of service levels / staffing. •Forecast highly sensitive to revenue and expenditure assumptions Reserve levels maintained at or above recommended Reserve Policy levels through FY2030-31 •Positive outlook thereafter •Fully-amortized unfunded pension liability. FY 2024-25 PROPOSED CAPITAL IMPROVEMENT PROGRAM BUDGET CAPITAL IMPROVEMENT PROGRAM FY 2024-25 CIP BUDGET SUMMARY •* Annual Programs Capital budget EXCLUDES appropriations supporting • operations and maintenance FY 2024-25 PROPOSED BUDGET AUTHORIZED POSITIONS AND STAFFING CHANGES FY 2024-25 BUDGETAUTHORIZED POSITIONS SUMMARY •Total proposed staffing level = 416.34 FTE •Reduction of 9.72 FTE from FY 2023-24 Budget •Reflecting changes approved since 7/1/23 FY 2024-25 BUDGET PROPOSED POSITION CLASSIFICATION CHANGES Public Works Deputy Public Works Administrative Director Operations and Maintenance Superintendent Digital Services and Open Government •Civic Engagement Manager (formerly Civic Design Manager) •Staffing levels remain well below FY 2007-08 levels (445.08) PERSONNEL NEXT STEPS •Receive City Council Feedback on FY2024-25 Proposed Budget •Minor revisions and fine-tuning •Return to Council at meeting of June 17th for Budget Adoption Actions: •Budget Resolution •Capital Improvement Plan •GANN Limit •Position Classification Revisions •Reserve Policy Update •Investment Policy Update •Approval of Tax Rates (collected via Property Tax bill) •Paramedic Tax •Library Tax •Special Assessment Districts NEXT STEPS •Remain committed to advancing City’s Goals and Objectives while measuring and reporting on progress •Master Fee Schedule •Review Fees and Charges and assess adjustments required to maintain target cost-recovery levels •Maintain/update financial forecasts •Monitor economic trends and signs of possible recession •Impacts of addressing significant infrastructure and deferred maintenance needs •Assess the City’s financial ability maintain current service levels and staffing based on updated forecast and upcoming voter-approved tax measure renewal dates: •Measure D – Library – Expires 2026 •Paramedic / EMS – Capped at current level (2024) •Measure R – Sales Tax – Expires 2032 Thank You… END OF PRESENTATION Capital Improvement Budget Overview City Council Questions and Feedback APPENDIX General Fund Forecast FY 2024-2025 PROPOSED BUDGET GENERAL FUND FORECAST