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Home My WebLink AboutFin Preliminary Citywide Proposed Budget for FY25-26 PPTPROPOSED BUDGET FISCAL YEAR 2025-2026 CITY COUNCIL MEETING MAY 19, 2025 PRESENTATION OUTLINE •FY2025-26 Budget Development Goals •FY2024-25 Q3 Budget Update •All Funds •General Fund •FY2025-26 Proposed Budget Summary •All Funds •General Fund •FY2025-26 Funding Recommendations •General Fund •Other Funds •General Fund Reserves / Fund Balance •Emergency Reserves •Allocation of Assigned Fund Balance •General Fund Fiscal Outlook •FY2025-26 Personnel / Staffing •Authorized Positions •Recommended FY2025-26 Staffing Changes •FY 2025-26 Capital Improvement Program •Next Steps FY 2025-2026 BUDGET PROCESS •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 to address priority City Council goals and objectives. •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. •General economic outlook •Impacts of Federal actions (Grants, Tariffs, etc.) •Promote trust and fiscal stewardship over public funds through sound fiscal policies, management practices and transparency. FY 2024-25 Q3 BUDGET UPDATE FY2024/25 Q3 BUDGET UPDATE Item 6.a. pg. 3 FY2024/25 Q3 BUDGET UPDATE General Fund Adopted Budget FY 2024-25 Amended Budget FY 2024-25 Actual Results Through 3/31/25 % of Amended FY2024-25 Budget Projected Year- End Results Revenues 101,282,204$ 101,282,204$ 60,955,921$ 60.2%102,382,517$ 1,100,313$ 1.1% Transfers in 2,508,306 2,508,306 1,356,229 54.1%1,908,306 (600,000) -23.9% Total Resources 103,790,510$ 103,790,510$ 62,312,150$ 60.0%104,290,823$ 500,313$ 0.5% Expenditures 102,033,257$ 102,606,344$ 74,735,598$ 72.8%101,542,034$ (1,064,310)$ -1.0% Operating Transfer out 10,258,500 10,258,500 9,252,625 90.2%10,258,500 - 0.0% Total Appropriations 112,291,757$ 112,864,844$ 83,988,223$ 74.4%111,800,534$ (1,064,310)$ -0.9% Net Result (8,501,247)$ (9,074,334)$ (7,509,711)$ 1,564,623$ Variance Item 6.a. pg. 4 OVERVIEW FY 2025-26 PROPOSED BUDGET FY 2025-26 PROPOSED BUDGET SUMMARY Fund Sources (Revenues and Transfers In) Uses (Expenditures and Transfers Out) General Fund $106,493,855 $113,356,822 General Plan 659,391 783,450 Special Revenue/Grant/Trust 43,326,332 42,791,356 Enterprise (Parking)4,786,159 4,786,159 Internal Service/ Capital Replacement 25,837,020 26,867,596 Capital Project Funds 8,532,601 3,030,000 Citywide Total – ALL FUNDS $189,664,382 $191,760,385 Less Internal Service Fund Charges/ Transfers $(28,504,549)$(28,504,536) Citywide Total – Excluding Dual Appropriations $161,1589,833 $163,255,849 Item 6.a. Ex. I FY 2025-2026 PROPOSED BUDGETALL FUNDS APPROPRIATIONS Fund ADOPTED FY2024-25 PROPOSED FY 2025-26 General Fund $112,291,757 $113,356,822 General Plan 1,151,725 783,450 Special Revenue/Grant/Trust 55,096,130 42,791,356 Enterprise (Parking)4,795,360 4,786,159 Internal Service/ Capital Replacement 28,087,298 26,867,596 Capital Project Funds 9,315,000 3,030,000 Citywide Total – ALL FUNDS $210,813,072 $191,760,385 Less Internal Service Fund Charges/ Transfers $(23,850,879)$(28,504,536) Citywide Total – Excluding Dual Appropriations $179,535,537 $163,255,849 FY2025-26 GENERAL FUND REVENUES •General Fund Revenues projected at $106.5M – 2.6% over FY 2023-24 •Projected property tax increase of 4.2% •Sales and use tax projected to remain flat over FY2024-25 •Most other revenues (Business License, TOT, permits, licensing, and plan review projected to increase by 3-7% Item 6.a. Ex. II Property Tax 27% Sales and Use Tax 43% Franchise Tax 5% Business License Tax 3% Transient Occumpancy Tax 4% Other Agencies 11% Other Revenues 7% General Fund Revenues FY 2025-26 GENERAL FUND EXPENSES •Year-over-year decrease of $1.1M over FY 24-25 budget. •Exclusive of transfers, expenditure appropriations increase $2.6M (2.6%) over FY 24-25 budget. •General Fund Personnel Costs projected to increase by $4.5M per negotiated labor agreements. •Includes transfers totaling $5.7 million to Special Revenue, Internal Services and Capital Funds Finance 3% Non-Departmental 8% City Manager/City Council 5% City Clerk 1% Digital Service 2% Human Resources 1%City Attorney 1% Community and Economic Development 6% Police 30% Fire 25% Public Works 15%Library 3% General Fund Expenditures by Department SUMMARY FY 2025-26 PROPOSED BUDGET FUNDING RECOMMENDATIONS FY 2025-2026 GENERAL FUND BUDGET RECOMMENDATIONS Adopted Proposed FY 2024-25 FY 2025-26 $% Revenues $ 101,282,204 $104,133,362 $ 2,851,158 2.8% Transfers-In 2,508,306 2,360,493 (147,813) Total Resources $ 103,790,510 $106,493,855 $ 2,703,345 2.6% Expenditures $ 102,033,257 $104,646,405 $ 2,613,148 2.6% Transfers-Out 10,258,500 8,710,417 (1,548,083) Total Uses $ 112,291,757 $113,356,822 $ 1,065,065 0.9% Net Results $ (8,501,247) $ (6,862,967) Use of Prior Period Funds Liability Fund - Premiums/Claims 2,000,000 2,500,000 Capital Fund - Future CIP Projects 2,000,000 1,500,000 Capital Fund - Paving Streets/Roads 1,000,000 1,000,000 Vehicle Replacement - Replenish Fund 1,000,000 1,000,000 Public Safety Equipment Replacement 500,000 Stromwater Fund - SQPS/Master Plan 985,000 Enterprise Resource Planning Project 1,000,000 Racial Equity Initiatives 500,000 $ 8,985,000 $ 6,000,000 Net of Use of Prior Period Funds $ 483,753 $ (862,967) Change from Previous YearGeneral Fund Item 6.a. pg. 6 FY 2025-2026 GENERAL FUND FUNDING RECOMMENDATIONS Item 6.a. pg. 7 FY 2025-2026 BUDGET RECOMMENDATIONS OTHER FUNDS HIGHLIGHTS Recurring One-Time Paramedic Fund $124,260 Recreation Revolving Fund $45,000 Measure D – Library $490,000 Measure C – Wildfire Prevention San Rafael Funding - Local Programs / Defensible Space CORE MWPA Programs – Administered by City $2,177,552 $1,769,365 Measure A – Open Space *$400,000 Parkland Dedication Fund $375,000 Measure P – Library and Community Center (Fund 430)$125,000 $1,500,000 Capital Fund $125,000 $290,000 * Subject to Update in FINAL Budget Item 6.a. pp. 9-11 FY 2025-2026 BUDGET RECOMMENDATIONS INTERNAL SERVICE FUNDS Recurring One-Time Vehicle Replacement Fund 430,000 Technology Fund 1,075,000 Building Maintenance Fund 163,000 Liability Insurance Fund 613,000 Fire Equipment Replacement 375,000 Item 6.a. pp. 11-12 GENERAL FUND RESERVES AND FUND BALANCE FY 2025-2026 PROPOSED BUDGET GENERAL FUND RESERVE LEVELS •General Fund Reserve Policy Level - 15% (Adopted 6/3/24) •Emergency Reserve – 10% = $10.65 million •Economic Uncertainty – 5% = $ 5.32 million •Capital Reserve = $ 1.00 million •Provides guidance on use of year-end fund balance in EXCESS of levels required by reserve policy •Unfunded Liabilities /Deferred Maintenance / Asset Replacement •Transfer to Other Funds to offset year-end deficits •Capital Projects – City Council priority projects / CIP funding gaps •Re-appropriation in subsequent fiscal year for one-time needs FY 2025-2026 PROPOSED BUDGET ALLOCATION OF FUND BALANCE Transfers $8,710,417 Operating Programs / Projects $ 2,710.417 Transfers to Other Funds: Liability Fund $ 2,500,000 Capital Fund 1,500,000 Streets /Roads (Pavement Maint.) 1,000,000 Vehicle Replacement Fund 1,000,000 $ 6,000,000 Assigned Fund Balance FY 2025-26 Capital Projects / Grant Match $2,500,000 Unassigned Fund Balance (6/30/26) $ 511,698 FY 2025-2026 PROPOSED BUDGET GENERAL FUND RESERVE LEVELS FY2025-26 year-end Reserve projected at $19.98M Reserve Policy (15%) = $16.97M Assigned = $ 2.50M Unassigned = $ 0.51M Adopted Budget FY 2024-25 Adjusted Budget FY2024-25 Projected Results FY 2024-25 Proposed Budget FY 2025-26 Beginning Fund Balance 34,356,376$ 34,356,376$ 34,356,376$ 26,846,665$ Total Revenues 103,790,510$ 103,790,510$ 104,290,823$ 106,493,855$ Operating Expenditures 102,033,257 102,606,344 101,542,034 104,646,405 Transfers 10,258,500 10,258,500 10,258,500 8,710,417 Total Appropriations 112,291,757$ 112,864,844$ 111,800,534$ 113,356,822$ Change in Net Position (8,501,247) (9,074,334) (7,509,711) (6,862,967) Ending Fund Balance 25,855,129$ 25,282,042$ 26,846,665$ 19,983,699$ Reserves (Policy Level)17,843,500$ 17,929,000$ 17,770,000$ 16,972,000$ Excess Reserve Balance Assigned Fund Balance 6,500,000 6,500,000 6,500,000 2,500,000 Unassigned Fund Balance 1,511,657 853,042 2,576,665 511,698 8,011,657$ 7,353,042$ 9,076,665$ 3,011,698$ FY 2025-26 PROPOSED BUDGET MULTI-YEAR OUTLOOK FY 2025-2026 PROPOSED BUDGET GENERAL FUND OUTLOOK FY2025-26 Proposed Budget : •Balanced Operating Budget •Draw-down of $6.86 million in Fund Balance (Supporting Transfers and One-Time items) FY 2025-26Reserve Policy level (15% + Capital) $16.97M •Assigned Fund Balance $ 2.50M •Unassigned Fund Balance $ 0.51M Forecast reflects operating deficits starting in FY 2026-27 •Modest budget gap $1.5 million forecast for FY2026-27 •Operating expenses (personnel costs) outpacing projected revenue growth •City has limited ability to mitigate without impact of service levels / staffing. Forecast highly sensitive to revenue and expenditure assumptions •General economic trends •Voter-approved tax measures (ex. Renewal of Measure D – Library Tax) •Expiring labor agreements (FY 2027-28) Fully-amortized unfunded pension liability provides budgetary relief in FY 2031-32 FY 2025-26 PROPOSED BUDGET AUTHORIZED POSITIONS AND STAFFING CHANGES FY 2025-26 BUDGETAUTHORIZED POSITIONS SUMMARY •Total Proposed FY 2025-26 staffing level •Permanent FTE = 396.44 •Fixed-Term FTE = 19.71 Total Staffing 416.15 •Overall reduction of 0.19 FTE from FY 2024-25 Adopted Budget •Permanent FTE = + 6.81 •Fixed-Term FTE = - 7.00 Item 6.a. Ex. IV FY 2025-26 BUDGET PROPOSED STAFFING CHANGES Community & Economic Development Reduction of vacant Permit Technician City Clerk Department Addition of staff position - Public Records Management Public Works Department •Converts existing Project Manager to Sr. Management Analyst •New Sr. Project Manager – supporting CIP and Measure P projects Sustainability Division (City Manager’s Office) •Creates Climate Adaptation and Resilience Planner classification •Elimination of vacant Volunteer Coordinator position (0.56 FTE) Digital Services and Open Government •Converts one Advanced Professional Temp position to Data Analyst III •Staffing levels remain well below FY 2007-08 levels (FTE = 445.08) PERSONNEL STAFFING TREND FY 2025-26 PROPOSED CAPITAL IMPROVEMENT PROGRAM BUDGET CAPITAL IMPROVEMENT PROGRAM FY 2025-26 CIP BUDGET SUMMARY Item 6.a. pp. 15-16 NEXT STEPS •Receive City Council Feedback on FY2025-26 Proposed Budget •Anticipate additional revisions and fine-tuning •Return to Council at meeting of June 2nd for Budget Adoption Actions: •Budget Resolution •GANN Limit •Position Classification Revisions •Capital Improvement Plan •Master Fee Schedule Update •Fee adjustments requiring City Council approval •Approval of Tax Rates (collected via Property Tax bill) •Paramedic Tax •Library Tax •Measure P – Library and Community Center (New) •Special Assessment Districts NEXT STEPS •Remain committed to advancing City’s Goals and Objectives while measuring and reporting on progress •Maintain/update financial forecasts •Monitor economic trends and signs of possible recession •Assess risks associated with uncertainty over Federal funding / grants •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 (since 2023-24) •Measure R – Sales Tax – Expires 2032 Thank You… END OF PRESENTATION Capital Improvement Budget Overview City Council Questions and Feedback