Joint Special Council/BFPD
03/7/22 07:00 PM
Finance
Marc Puckett
Budget
Doc ID: 4957
AGENDA ITEM
AGENDA MATTER:
FISCAL YEAR 2021-22 MID-YEAR BUDGET STATUS REPORT & PROPOSED BUDGET
ADJUSTMENTS
EXECUTIVE SUMMARY:
Finance staff met with departmental managers to review actual revenues and expenditures through February 2022 to compare budgetary performance with fiscal year 2021/22 budgeted appropriations.
Fiscal Year 2021-22 is the second year of the two-year budget approved by City Council on June 15, 2020. Based upon this analysis, the fiscal year 2021/22 mid-year budget review has been prepared together with the attached proposed budget adjustments which are presented for City Council’s consideration and approval.
In conjunction with the mid-year budget review, staff has examined all Capital Improvement Projects (CIP), capital equipment requests and Special Revenue funds to determine if any appropriation adjustments were necessary either through budget carryforwards or new appropriation requests.
Staff continually monitors and reviews budgetary performance and will continue to do so through the end of the current fiscal year and in conjunction with year-end close. Staff brings forward budget adjustments from time-to-time as necessary to ensure the City's spending plan remains current.
DISCUSSION:
BUDGET OVERVIEW
General Fund:
Overall, the General Fund budgetary performance during this fiscal year has occurred better than anticipated when reductions were made in June, 2020 as a result of the COVID-19 pandemic. The favorable surplus of revenues over expenditures for last fiscal year was a foreshadowing of where staff expects the current fiscal year to end. While the surplus may not be as large as the prior year, staff does expect a surplus at year end of approximately $1.2 million. The City's proactive measures to make the necessary reductions to revenue estimates and budgeted appropriations to manage the impacts of COVID-19 is providing beneficial financial performance this fiscal year. The reductions to various revenue sources, including sales, property, and transient occupancy taxes, as well as decreased revenue for park programs, in addition to the adoption of a biennial budget for fiscal years 2021 and 2022 were part of the proactive measures taken to anticipate COVID-19 impacts. As the pandemic eases, staff will be reviewing each of the programmatic changes made and make a considered decision as to what service adjustments may be necessary. After this extended length of the COVID-19 pandemic which has now surpassed the two-year mark, staff is cautiously optimistic that effects of the pandemic have been effectively mitigated.
As part of staff's mid-year analysis, finance staff met with department and division managers to review Joint Special Council/BFPD
03/7/22 07:00 PM
Finance
Marc Puckett
Budget
Doc ID: 4957
AGENDA ITEM
their budgetary performance for each area of responsibility. Based upon that review, the requested budget adjustments and carryforwards, which are included as part of the budget status overview, the General Fund is estimated to end the fiscal year with a budget surplus of $1,231,000 on a combined basis (Attachment 1).
General Fund Revenues - Fund 100
The General Fund’s revenue estimates for fiscal year 2021/22, which includes adjustments, if any, approved by City Council from July, 2021 through February, 2022, were estimated at $18,090,146. Based upon the staff's analysis of the revenue estimates, including updated economic information, staff is projecting that estimated revenues should be increased by $3,832,061 in total. Further, since the Fiscal Year 2021-22 revenue estimates were originally adopted on June 15, 2020, the proposed revisions to revenue estimates are slightly higher due to changes in economic activity occurring over the past twenty months. Sales Tax revenue estimates are proposed to increase by $1,247,000. This increase is directly resultant from the strong rebound in consumer spending in all market sectors after the shelter in place order was lifted. Additionally, Transient Occupancy Tax (TOT) revenues are estimated to exceed current revenue projections by $560,000. This projection is an indication of the increased number of transient travelers that are passing through the community and choosing to stop in Barstow for their overnight accommodations. All hotels with direct freeway access are reporting high levels of occupancy for short-term stays. Additionally, proposed revenue adjustments for all other revenue line items total $163,061 on a combined basis (Attachment 2).
Revenue projections remain conservative. Some one-time revenues, such as Cannabis application fees, are expected to augment total General Fund revenue projections. These additional revenues will be discussed in greater detail as part of Council’s consideration of the proposed Fiscal Year 2022-23 Operating Budget and as part of the year-end budget clean-up resolution which will be brought back to Council for consideration in June, 2022.
General Fund Expenditures - Fund 100
The adopted fiscal year 2021/22 General Fund operating budget, plus Council approved budget adjustments from July 2021 to February 2022, amounts total appropriations in the amount of $17,891,899. Based upon the budget review conducted by finance staff in coordination with department and division managers from all departments, actual expenditures are tracking fairly well to projected spending levels. Year-to-date expenditures total $12,075,527 which amounts to approximately 70% of the adopted budget as amended. However, additional appropriations are proposed within the General Fund totaling $1,149,961 as part of the mid-year budget adjustment.
These proposed adjustments are necessary primarily due to payment of deferred wage increases that had been deferred since June, 2020, the addition of new programs such as the Cannabis program (cost center created to track Cannabis activities), retirement payouts and some Parks and Recreation staffing added back to help restart some recreational activities put on hold during the pandemic.
Joint Special Council/BFPD
03/7/22 07:00 PM
Finance
Marc Puckett
Budget
Doc ID: 4957
AGENDA ITEM
General Fund-Measure Q - Fund 102 & 103 (Fire)
Fiscal Year 2021-22 Measure Q sales tax revenues estimates are proposed to increase by $1,862,000. As with other City revenues, this estimated increase is directly resultant from the strong rebound in consumer spending in all market sectors after the shelter in place order was lifted. In addition, since the budgeted revenue estimates were adopted twenty months ago in June, 2020, the proposed revenue adjustment is higher as a result. Although estimated revenues have exhibited favorable budgetary variances, expenditures are outpacing budgeted appropriations necessitating proposed appropriation adjustments totaling $838,304. Overtime costs due to staff attrition and covering the resultant vacancies accounts for the majority of the appropriation requests. For the Police ($225k) and Fire ($450) departments combined, the requested increase in overtime appropriations amounts to $675,000. These cost increases are offset by attrition savings in the Salaries, Regular line items.
Barstow Fire Protection District (BFPD) - Fund 225
Barstow Fire Protection District Revenues - Fund 225
The BFPD’s current fiscal year budget projects revenues of $4,988,400, with actual revenues received of $3,790,394 through February 2022. Property tax revenues collections appear to be in line with the original revenue estimates. Other revenues received not anticipated in the original adopted budget include workers compensation insurance reimbursements in the amount of $131,329, and miscellaneous other revenues in the amount of $9,500 for impact fees, incident reports and cell tower lease revenues. In addition, $86,000 in strike team reimbursements have been received year-to-date.
FISCAL IMPACT:
The net budgetary adjustments in estimated revenues and appropriations in the General Fund results in an estimated excess of revenues over expenditures of $1,231,000 at year end on a combined basis.
RECOMMENDED ACTION:
1. Staff recommends that the City Council / Fire Board approve the budget adjustments and related transfers within the Budget Adjustments contained within the "Attachment 2” as discussed herein.
2. Staff recommends that the City Council / Fire Board approve the Capital Improvement Plan (CIP), Capital Equipment, and Special Revenue carryforwards, and related transfers in conjunction with the aforementioned carryforward budgets, contained in "Attachment 2" of this staff report.