Belmont City Council
February 27, 2024

FY 2023-24 Midyear Budget Review - Staff Report

STAFF REPORT
Meeting Date: February 27, 2024
Agency: City of Belmont
Staff Contact: Grace Castaneda, Finance Director, [email protected] Danny Nguyen, Budget Manager, [email protected]
Agenda Title: Report on Mid-Year Financial Results as of December 31, 2023 Agenda Action: Resolution
Recommendation
Adopt resolutions amending the City of Belmont and Belmont Fire Protection District (BFPD) Fiscal Year (FY) 2023-24 Budgets.

Strategic Focus Area
Fiscal and Organizational Sustainability
Background
 The budget continues to reflect the ongoing takeaway of key revenue sources as a result of actions taken by the State of California.
 The City’s secured property taxes for the current FY 2023-24 are lower than the previous year based on actuals and County estimates, primarily due to the State’s funding shortfall in Property Tax in-lieu of Vehicle License Fee (VLF).
 VLF continues to be underfunded by the State, and the State is taking increasing actions to take away this key revenue source. Due to the State’s late decision last fiscal year to meet its payment obligation and reimburse the County and cities on the VLF shortfall from FY 2021-22, the current estimates of VLF payments are higher than budget. This one-time increase does not make the City whole on VLF funding for FY 2022-23 through FY 2023-24. The FY 2022-23 shortfall that the State has continued to refuse payment totals approximately $70 million county-wide, of which $1.1 million is Belmont’s share. This equates to the entirety of Belmont’s business license tax revenue, a major revenue source in the General Fund. The VLF shortfall grows to an estimated $114 million county-wide in the current FY 2023-24, of which $1.7 million is Belmont’s share.  The Local 1% Sales Tax revenues are slightly lower than the adopted FY 2023-24 budget as the auto industry has shown signs of cool off, and consumers sensitive to elevated interest rates pulled back on spending over the summer. The estimates are consistent with long-term projections of reduced economic growth during the next few years.
 Project planning fees are higher than the adopted FY 2023-24 budget based on actual revenues received from large projects; however, revenues received will need to be utilized over the next several years to facilitate planning reviews.
 Local development generated revenues such as impact fees and in-lieu fees are lower than budget due to the timeline of developments and permit issuance. As these revenues are collected, they can 436

FY 2023-24 Midyear Budget Review - Staff Report
provide critical funding for infrastructure, but other locally-controlled funding is needed to support City services.
 General Fund balance is trending higher than the adopted FY 2023-24 budget target, mainly attributable to continued prudence in containing operating expenditures and staff vacancy savings in the first half of the current fiscal year. Staff vacancies are not sustainable long-term.  The City has been working to prepare a Storm Water Master Plan to identify critical storm drain infrastructure needs, with recent flooding and storms the City must explore new revenue sources to address aging sewer and storm drain infrastructure maintenance to prepare for future storms and reduce flooding.
 The City must take action to ensure long-term financial sustainability and local control over revenue sources to prevent further cuts to City services including cuts to public safety, parks and public works, and other services.

Analysis
The City prepares a Mid-Year Review annually, analyzing the current budget at the six-month midpoint.

The Mid-Year Review serves to discuss the financial results of the organization from July through December, and suggests corrective actions in the event expectations differ from results. This year’s MidYear Review provides important details on the City’s financial status and includes the following components:

Mid-Year Budget Presentation
The attached presentation summarizes year-to-date financial results, trends on major revenue sources, fund balance forecasts, and an overview of financial challenges facing the City.

As is the Belmont tradition, the City has continuously engaged with residents through Your Voice, Your Belmont. In 2022, approximately 1,000 residents participated in this community survey and identified the following City service priorities:
 Maintaining storm drains, reducing flooding, debris and pollution in City streets,  Fixing potholes and repairing streets and sidewalks,
 Maintaining 911 emergency response times,
 Keeping public areas healthy safe and clean, and
 Maintaining senior services including health, nutrition and transportation programs.

The City is committed to reflecting the community’s priorities and is looking forward to continuing to engage residents around the City’s budget process and reporting back to the public and City Council on needs and priorities. Working together, we will ensure our budget and financial policies reflect spending consistent with the community’s priorities.

Results Summary Overview
 General Fund balance is up. The General Fund ended December 31, 2023 with an unaudited fund balance of $29.4 million, excluding budgeted fund transfers of $4.6 million, which will be 437

FY 2023-24 Midyear Budget Review - Staff Report
accounted for at the end of the fiscal year. By comparison, the General Fund balance was $26.5 million on December 31, 2022, excluding fund transfers. The fund balance increase is a result of slightly higher revenues and lower expenditures in the current fiscal year, as discussed in more detail below.
 Revenues are relatively flat. General Fund revenues were $15.0 million at the six-month midpoint, representing 50.9% of the total current fiscal year budget. The slight increase is primarily due to the one-time reimbursement of FY 2021-22 Property Tax in-lieu of Vehicle License Fee (VLF) funds.
 Expenditures are contained but are not sustainable. General Fund expenditures were $12.2 million at the mid-year mark, representing 47.4% of the total current fiscal year budget, excluding transfers. This is mainly due to the City’s continued fiscal prudence and staffing vacancy savings primarily in the first half of the fiscal year which are not sustainable in the long-term. While the City continues to be a transparent and fiscally prudent steward of these funds, it should also be noted that the cost of providing the City services and quality of life residents rely on are also rising.

Major Revenue Source Trends
 Property Tax revenue is relatively flat to budget estimates. The City’s property tax revenue is estimated to be $0.3 million higher than budget, and the Belmont Fire Protection District’s property tax revenues is estimated to be $0.1 million lower than budget.  Property Tax in-lieu of VLF continues to be underfunded by the State. In the current FY 2023- 24, the City received a $0.5 million one-time reimbursement for the VLF shortfall from FY 2021- 22, resulting in increased revenues for the current fiscal year. This one-time increase does not make the City whole on VLF funding for FY 2022-23 through FY 2023-24. Further, due to a net reduction in the number of non-basic aid school districts in the County from six to five, the current VLF shortfall for FY 2023-24 is $0.3 million larger than estimated. The combination of the onetime reimbursement and a larger shortfall results in a slight increase in VLF revenues for the current fiscal year by approximately $0.2 million. Thus far, the State has continued to refuse payment for VLF shortfalls from FY 2022-23 through current FY 2023-24. For FY 2022-23, the shortfall totals approximately $1.1 million for Belmont, which equates to the entire business license tax revenue, a major revenue source in the General Fund. The VLF shortfall grows to an estimated $1.7 million for FY 2023-24. The increasing uncertainty of VLF shortfall reimbursements from the State makes this major revenue source more vulnerable to long-term State takeaways, which has potential impacts to basic services such as public safety, streets and storm drains maintenance.
 Hotel Room Tax revenue is recovering. By December 31, 2023, Hotel Room Tax (i.e., Transient Occupancy Tax, or TOT) revenue was on par with pre-pandemic levels, with FY 2023-24 revenues projected to be at budget estimates. This was primarily due to the voter-approved increase in the TOT rate from 12% to 14%, effective January 1, 2023. While this revenue source is recovering back to what the City had collected prior to the pandemic, it is important to note that there is lost growth from the pre-pandemic years to the current year.  Total Sales Tax revenue is relatively flat. The Local 1% Sales Tax revenue is estimated to be approximately $101K lower than budget, primarily due to the auto sector cooling off. This gets 438

FY 2023-24 Midyear Budget Review - Staff Report
offset by higher estimates in Measures I/A/W and Public Safety sales tax, resulting in total sales tax revenue that is relatively flat to the current FY 2023-24 budget. Long-term projections indicate reduced economic growth during the next several years.

Financial Reports and Budget Adjustments
The Mid-Year Review analyzes actual results compared to the prior fiscal year while addressing any significant past or anticipated variances this fiscal year. To assist in this analysis, staff generates a detailed Statement of Revenues and Expenditures Budget Variance Report (Attachment B). This report compares budget amounts vs. actual results by major revenue source and expenditure division.  Routine adjustments to budget revenues include variances associated with the timing of the receipt of certain General Fund revenues and variances associated with the timing of the receipt for fees related to large development projects expected to be completed by the end of the fiscal year.  Routine adjustments to budget expenditures reflect operational and staffing needs for departments and timing of capital improvement project expenditures.

The following are notable FY 2023-24 budget adjustments:
 The FY 2023-24 mid-year budget review includes a request to increase budget appropriation by $75K in the Solid Waste Fund 530 to provide support for a per diem SB 1383 Compliance Coordinator and related supplies, funded by a CalRecycle State grant.  The FY 2023-24 mid-year budget review includes a request to increase budget appropriation by $220K in the Fleet and Equipment Management Fund 573 to purchase and replace equipment in support of City services.
 The FY 2023-24 mid-year budget review includes adjustments to existing capital improvement project budgets in the Capital Improvement Project Fund 399, as summarized below:

CIP Project
No.

CIP Project Description Request
3231 Traffic Signal Improvement
at Cipriani & Belmont
Canyon
Increase of $35,500 to fund contract
approved by Council in March 2023, via
a fund transfer from the Street
Improvement Fund 234
3101 Street Improvements Increase of $26,850 to fund Task Order for development of the 5-Year
Pavement Master Expenditure Plan, via
a fund transfer from the Measure I Fund
102
Proposed Resolutions
Staff recommends that Council adopt resolutions amending the City of Belmont and Belmont Fire Protection District (BFPD) FY 2023-24 Budgets as proposed. These mid-year resolutions are considered annually as part of the budget management process.
439

FY 2023-24 Midyear Budget Review - Staff Report
Next Steps
Once the Mid-Year Budget Review is complete, City staff will continue to provide monthly financial reports to City Council. Feedback from Council on the results of the Mid-Year Financial Reports and Presentation will help guide the budget development process for FY 2024-25. The City will also continue to engage residents on their City service needs and priorities and incorporate those into the annual budget development process.

Alternatives

1. Take no action.

Attachments
A. Resolutions with Exhibit A Summarizing Proposed Budget Amendments by Fund B. Mid-Year Financial Reports
C. Mid-Year Budget Presentation
Fiscal Impact
☐ No Fiscal Impact
☒ Funding Source Confirmed: The resolutions attached to this report itemize the fiscal impacts by fund.

Source: Purpose: Public Outreach:

Staff Discretionary Action Posting of Agenda
*Insert additional information, or delete if not used
440

RESOLUTION NO. 2024 –

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BELMONT AMENDING THE FISCAL YEAR 2023-24 BUDGET BY APPROVING REVISIONS TO

REVENUE AND AUTHORIZING SUPPLEMENTAL APPROPRIATIONS
WHEREAS, the City of Belmont Fiscal Year (FY) 2023-24 Budget includes adopted Revenue, Appropriations, and Capital Improvement Program Budgets; and, WHEREAS, the City continues to address the risk of a key revenue source taken away by the State of California; and,
WHEREAS, the City continues to engage residents around the City’s budget process and engaged over residents in previous years that identified City service priorities including maintaining storm drains, reducing flooding, debris and pollution in City streets, fixing potholes and repairing streets and sidewalks, maintaining 911 emergency response times, keeping public areas healthy safe and clean, and maintaining senior services including health, nutrition and transportation programs; and,
WHEREAS, Property Tax In-lieu of Vehicle License Fee (“VLF”) continues to be underfunded by the State, which has continued to refuse payment for VLF shortfalls from FY 2022-23 through the current FY 2023-24 and makes this major revenue source increasingly uncertain; and,
WHEREAS, Transient Occupancy Tax (i.e., Hotel Room Tax, or TOT) revenues are projected to be close to budget primarily due to a Belmont voter approved two-percent increase from 12% to 14% to the hotel tax that went into effect in January 2023; and, WHEREAS, several key General Fund revenues are trending relatively flat, but economic indicators suggest slow economic growth over the next several fiscal years; and, WHEREAS, revenues from impact fees and in-lieu fees are reduced in the current FY 2023-24 to reflect updated timelines of development projects, but are anticipated to be collected in future years when permits are issued; and,
WHEREAS, revenues in Development Services Fund 210 and General Plan Maintenance Fund 212 are increased to reflect revenues received from large development projectsfor planning related fees; and,
WHEREAS, the City Council finds that it is necessary to amend the FY 2023-24 Revenue Budget, and amend the estimated fund balances, as identified in Exhibit A; and, WHEREAS, the City has determined that additional funding is required for certain operational expenditures identified in Exhibit A; and,
WHEREAS, the City Council finds that it is necessary to augment the FY 2023-24 budget for those expenditures; and,
441

WHEREAS, the City Council wishes to amend the FY 2023-24 Capital Improvement Plan to adjust several existing capital project budgets.

NOW, THEREFORE, the City Council of the City of Belmont resolves as follows:

SECTION 1. The FY 2023-24 Budget is hereby amended as reflected in Exhibit A to the resolution.

SECTION 2. The summary effect on funds is shown in the table below.

Summary Combined Effect on Funds
Fund Description
Revenues
Increase
(Decrease)
Expenditures
Increase
(Decrease)
Net Change on
Fund Balance
Increase
(Decrease)
101 General Fund 389,704 15,000 374,704
102 Measure I 92,354 26,850 65,504
205 Co-Sponsored Recreation - 9,000 (9,000)
210 Development Services 1,564,201 - 1,564,201
212 General Plan Maintenance 68,350 - 68,350
225 Public Safety Grants 4,596 - 4,596
231 Street Maintenance (38,635) - (38,635)
232 RMRA Account Street Project (21,898) - (21,898)
233 Measure W 87,218 - 87,218
234 Street Improvement (200,000) 35,500 (235,500)
237 Traffic Impact Fees (1,615,352) - (1,615,352)
239 Public Art Fees (300,000) - (300,000)
275 Affordable Housing Fund (72,632) - (72,632)
342 Park Impact Fees (2,541,853) - (2,541,853)
399 Capital Improvement Projects 162,350 62,350 100,000 501 Sewer Collections (411,354) - (411,354)
503 Sewer Operations-Capital (2,601,720) - (2,601,720)
505 Sewer Collections (572,000) - (572,000)
507 Sewer Treatment - 270,000 (270,000)
530 Solid Waste 75,000 75,000 -
570 Worker's Compensation 93,421 - 93,421
572 Self-Funded Vision - 4,288 (4,288)
573 Fleet & Equipment Management 14,013 220,871 (206,858) 442

SECTION 3. The City’s Capital Improvement Plan is amended to include the following project adjustments:

Fund No. CIP Project Description FY 2023-24 Budget
Adjustment
399 3231 Traffic Signal Improvement at Cipriani &
Belmont Canyon
Expense $35,500
399 3101 Street Improvements Expense $26,850
SECTION 4. The City Council authorizes a transfer of $35,500 from the Street Improvement Fund 234 to CIP Fund 399 to provide funding for Traffic Signal Improvement, CIP Project No. 3231.

SECTION 5. The City Council authorizes a transfer of $26,850 Measure I Fund102 to CIP Fund 399 to provide for development of the 5-Year Pavement Master Plan, CIP Project No. 3101.
443

* * *
ADOPTED February 27, 2024 by the City of Belmont City Council by the following vote:

Ayes:

Noes:

Absent:

Abstain:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM:

City Attorney
444

EXHIBIT A
City of Belmont
Mid‐Year Budget Augmentations
Ref # Fund Account # Description
Amount Increase
(Decrease)
210 5‐905‐6523 Increase projection based on year to date actual revenues received from large projects for Planning Complex Project Fees $239,405
210 5‐905‐6524 Increase projection based on year to date actual revenues received from large projects for Environmental Consulting Service Fees $238,335 210 5‐905‐6518 Increase projection based on year to date actual revenues received from large projects for State Energy Requirement Plan fees $72,919 210 5‐905‐6519 Increase projection based on year to date actual revenues received from large projects for Accessibility Plan Check fees $76,874
210 5‐905‐6513 Increase projection based on year to date actual revenues received from large projects for Planning Plan Check fees $259,543
210 5‐905‐6511 Increase projection based on year to date actual revenues received from large projects for Plan Check fees $176,342
210 5‐905‐6221 Increase projection based on year to date actual revenues received from large projects for Building Permit fees $163,538
212 5‐906‐6530 Increase projection based on year to date actual revenues received from large projects for General Plan Maintenance fees $68,350
101 0‐000‐6111
Increase Property Tax In Lieu of VLF revenues to reflect $495k reimbursement of the FY 2020‐21 shortfall, offset by a $312k greater than anticipated VLF shortfall for FY 2023‐24 based on County's latest estimates
$183,093
101 0‐000‐6105 Decrease supplemental property tax based on County estimates ($49,306) 101 0‐000‐6110 Increase Excess ERAF based on actual revenues and based on County estimates $120,005 101 0‐000‐6121 Decrease Sales and Use Tax based on current trends and updated projections ($100,779) 101 0‐000‐6129 Decrease property transfer tax based on current property sales trends ($60,000) 101 0‐000‐6133 Decrease Cable TV Franchise Taxes based on year to date revenues ($56,721) 101 0‐000‐7111 Increase to reflect year to date interest revenues $300,000 101 1‐504‐7622
Increase transfer‐in from Fund No. 572 Self Funded Vision; Per BPOA MOU side letter, transfer remaining funds from Vision Reimbursements to the General Fund
$4,288
570 0‐000‐7252 Increase to reflect year to date premium reimbursements $93,421 275 5‐902‐6380 Decrease in Contributions from Other Local Agencies to reallocate budget in the correct account for Miscellaneous State Grants ($309,312) 275 5‐902‐6359
Increase Miscellaneous State Grants for reallocated funds from Other Local Agencies by $309k; offset with a reduction from the SB2 Planning Grant by $73k $236,680 City Manager
FY 2023‐24
Revenues
Community Development
Finance
1 445

EXHIBIT A
City of Belmont
Mid‐Year Budget Augmentations
Ref # Fund Account # Description
Amount Increase
(Decrease)
FY 2023‐24
Revenues
399 2‐604‐6359 Increase Miscellaneous State Grants for CalOES Grant to upgrade the 9‐1‐1 dispatch equipment in the Communication Center $100,000 101 2‐601‐6331 Increase State Mandated Cost Reimbursement SB90 to reflect funds received year to date $49,124
225 2‐600‐7270 Increase Contributions & Donations from the Safe School grant $4,596 573 1‐302‐9040 Increase reimbursements for PW corp yard equipment insurance claims $14,013 102 3‐730‐6122 Increase in Measure I Sales Tax based on current trends $92,354 399 1‐504‐7608 Transfer from Street Improvement Fund No. 234 for CIP Project No. 3231 Traffic Signal Improvement at Cipriani & Belmont Canyon Road $35,500 399 1‐504‐7619 Transfer from Measure I Fund No. 102 for CIP Project No. 3101 Street Improvements to support the 5‐Year Pavement Master Expenditure Plan $26,850 530 3‐770‐6359 Increase Miscellaneous State Grants for a CalRecycle grant to support a Per Diem SB 1383 Compliance Coordinator position and supplies $75,000 210 3‐780‐6232 Increase projection based on year to date actual revenues received from large projects for Encroachment Permit fees $265,876
210 3‐780‐6231 Increase projection based on year to date actual revenues received from large projects for Grading Permit fees $71,369
231 3‐750‐6321 Decrease projection of highway user taxes (HUT) based on latest State Department of Finance revenue projections ($13,345)
231 3‐750‐6322 Decrease projection of highway user taxes (HUT) based on latest State Department of Finance revenue projections   ($6,365)
231 3‐750‐6323 Increase projection of highway user taxes (HUT) based on latest State Department of Finance revenue projections   $12,175
231 3‐750‐6325 Decrease projection of highway user taxes (HUT) based on latest State Department of Finance revenue projections   ($31,100)
232 3‐750‐6326 Decrease projection of RMRA revenues based on latest State Department of Finance revenue projections   ($21,898)
233 3‐730‐6126 Increase in Measure W Sales Tax based on current trends $53,422 233 3‐730‐6364 Increase Measure M reimbursement for Traffic Congestion Management from FY 2022‐23 $33,796
234 3‐730‐7270 Decrease Contributions and Donations to reflect timing of development projects ($200,000) 237 0‐000‐6998 Decrease Traffic Impact fees to reflect timing of development project permit issuance ($1,615,352)
501 3‐710‐6805 Decrease Sewer Use Fees based on the latest Levy report for Sewer Service and Facility Charges ($581,398)
501 3‐710‐7111 Increase to reflect year to date interest revenues $170,044 Police
Public Works
Information Technology
2 446

EXHIBIT A
City of Belmont
Mid‐Year Budget Augmentations
Ref # Fund Account # Description
Amount Increase
(Decrease)
FY 2023‐24
Revenues
503 3‐730‐6820 Decrease Sewer Connection fees to reflect timing of development project permit issuance ($2,601,720)
505 3‐730‐6820 Reallocate Sewer Connection Fees from Fund No. 505 to Fund No. 503 ($572,000) 239 4‐810‐6999 Decrease Public Park In Lieu fees to reflect timing of development project building permit issuance ($300,000)
342 4‐810‐6997 Decrease Park Impact fees to reflect timing of development project building permit issuance ($2,541,853)
TOTAL REVENUE ADJUSTMENT ($5,824,237)
Parks and Recreation
Revenues
3 447

EXHIBIT A
City of Belmont
FY 2023‐24
Mid‐Year Budget Augmentations
Ref # Fund Account # Description
Amount Increase
(Decrease)
572 1‐504‐9601
Increase transfer‐out from Fund No. 572 Self Funded Vision; Per BPOA MOU side letter, transfer remaining funds from Vision Reimbursements to the General Fund $4,288 234 1‐504‐9623
Transfer to CIP Fund No. 399 from Street Improvement Fund No. 234 for CIP Project No. 3231 Traffic Signal Improvement  at Cipriani & Belmont Canyon Road $35,500 399 3‐730‐9030
Increase for CIP Project No. 3231 Traffic Signal Improvement at Cipriani & Belmont Canyon Road to cover project costs consistent with contract approved by Council in March 2023
$35,500
102 1‐504‐9623
Transfer to CIP Fund No. 399 from Measure I Fund No. 102 for CIP Project No. 3101 Street Improvements to support the 5‐Year Pavement Master Expenditure Plan
$26,850
399 3‐730‐9030 Increase for CIP Project No. 3101 Street Improvements to support Task Order #5 for PEI to develop the 5‐Year Pavement Master Expenditure Plan $26,850 530 3‐770‐8103 Increase the Per Diem budget for support from a SB 1383 Compliance Coordinator funded by CalRecycle State grant $38,663
530 3‐770‐8610 Increase General Supplies for material purchases funded by CalRecycle State grant $36,337 507 3‐730‐9030 Increase for Belmont's share of SVCW’s SRF debt coverage covenant $270,000 101 4‐811‐8358 Increase Tree Trimming costs for removal of a tree located on the Emmett House property $15,000
205 4‐825‐8285 Increase Worker's Compensation budget for Per Diem staff $9,000 573 1‐302‐9040
Increase to purchase/replace equipment such as PW Corp Yard security system, pipeline video equipment, gate (~$135k); welder, P&R furniture, HVAC condenser coil, wash rack, Permit Center laser fiche (~$86k)
$220,871
TOTAL EXPENDITURE ADJUSTMENT $718,859
Expenditures
Parks and Recreation
Information Technology
Public Works
Expenditures
Finance
1 448

RESOLUTION NO. 2024 –

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BELMONT FIRE PROTECTION DISTRICT AMENDING THE FISCAL YEAR 2023-24 BUDGET BY

APPROVING REVISIONS TO REVENUE AND AUTHORIZING SUPPLEMENTAL

APPROPRIATIONS
WHEREAS, the Belmont Fire Protection District (BFPD) Fiscal Year (FY) 2023-24 Budget includes adopted Revenue and Appropriations Budgets; and, WHEREAS, investment interest revenues are trending above estimates; and, WHEREAS, the Board of Directors finds that it is necessary to amend the FY 2023-24 Revenue Budget, as identified in Exhibit A, and increase the estimated Fund balance; and, NOW, THEREFORE, the Board of Directors of the Belmont Fire Protection District resolves as follows:

SECTION 1. The FY 2023-24 Budget is hereby amended as reflected in Exhibit A.

SECTION 2. The summary effect on funds is shown in the table below.

Summary Combined Effect on Funds
Fund Description
Revenues
Increase
(Decrease)
Expenditures
Increase
(Decrease)
Net Change on
Fund Balance
Increase (Decrease)
223
Belmont Fire
Protection
District
84,542 84,542
449

* * *
ADOPTED February 27, 2024 by the Board of Directors of the Belmont Fire Protection District by the following vote:

Ayes:

Noes:

Absent:

Abstain:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM:

City Attorney
450

EXHIBIT A
Revenues
Ref # Fund Account # Description
Amount Increase
(Decrease)
Fire
223 0‐000‐6101 Decrease property tax based on County estimates ($49,412) 223 0‐000‐6103 Increase unsecured property tax based on County estimates $54,491 223 0‐000‐6105 Decrease supplemental property tax based on County estimates ($105,969) 223 0‐000‐7111 Increase to reflect year to date interest revenues $185,432 TOTAL REVENUE ADJUSTMENT $84,542
Belmont Fire Protection District
FY 2023‐24
Mid‐Year Budget Augmentations
1 451

EXHIBIT A
Ref # Fund Account # Description
Amount Increase
(Decrease)
NONE
TOTAL EXPENDITURE ADJUSTMENT $0
Belmont Fire Protection District
FY 2023‐24
Mid‐Year Budget Augmentations
Expenditures
Fire
1 452
FISCAL YEAR 2023-24 BUDGET

MID-YEAR REVIEW
City Council Meeting
February 27, 2024
453
2 EXECUTIVE SUMMARY

FINANCIAL RESULTS

FISCAL SUSTAINABILITY

FINANCIAL OUTLOOK

RECOMMENDATION
454

EXECUTIVE SUMMARY
2/27/2024 FY 2023-24 Mid-Year Budget Review 3
General Fund tracking to budget expectations
State actions to take away property tax in-lieu of VLF
Need to maintain City services and infrastructure
Resolutions requested from Council
455

FINANCIAL RESULTS
456 4

FINANCIAL RESULTS
2/27/2024 FY 2023-24 Mid-Year Budget Review 5

GENERAL FUND
12/31 Fund Balance
Up $2.9M over
last fiscal year end
Revenues
Year end estimates are

0.9% over budget
Expenditures
Year end estimates are

2.2% under budget
Local Economy
Leading indicators
mixed but overall
tracking to budget
expectations in FY
2023-24
457

FINANCIAL RESULTS
2/27/2024 FY 2023-24 Mid-Year Budget Review 6

YEAR-TO-DATE RESULTS AS OF
DEC. 31, 2023 (IN MILLIONS)
Revenues Expenditures Fund Balance
(12/31/23)
General Fund (Excluding Measure I) $15.0 $14.4* $27.1*
Belmont Fire Protection District 223 9.9 9.4 20.7
Development Services 210 3.9 2.7 2.6
Recreation 205 0.9 1.8 (0.3)
Street Maintenance 231 0.6 1.2 (0.6)
Storm Drain 525 0.6 1.0 1.7
*Includes 50% of budgeted operating transfers anticipated at year-end 458
$-
$2
$4
$6
$8
$10
$12
$14
$16
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Actuals
Budget
Estimate

FINANCIAL RESULTS
2/27/2024 FY 2023-24 Mid-Year Budget Review 7

PROPERTY TAX
(IN MILLIONS)
Final Dissolution of Successor
Agency; one-time bump from VLF
reimbursement
459
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Actuals
Budget
Estimate

FINANCIAL RESULTS
2/27/2024 FY 2023-24 Mid-Year Budget Review 8
SALES TAX: 1% BRADLEY BURNS*
(IN MILLIONS)
*Excludes Measure I ½-Cent Tax
460
$-
$0.5
$1.0
$1.5
$2.0
$2.5
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Actuals
Budget
Estimate

FINANCIAL RESULTS
2/27/2024 FY 2023-24 Mid-Year Budget Review 9
SALES TAX: MEASURE I
(IN MILLIONS)
Measure I
Started
April 2017
461
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Actuals
Budget
Estimate

FINANCIAL RESULTS
2/27/2024 FY 2023-24 Mid-Year Budget Review 10

HOTEL ROOM TAX
(IN MILLIONS)
Revenue
Trending Toward
Pre-Pandemic Levels
462

FINANCIAL RESULTS
2/27/2024 FY 2023-24 Mid-Year Budget Review 11

GENERAL FUND EXPENDITURES
(IN MILLIONS)
FY 2023-24
Adjusted
Budget
12/31/23 % of
Total
Personnel $18.0 $8.7 48%
Services &
Supplies $3.5 $1.3 37%
Admin &
Other $4.2 $2.1 50%
Major General FundSupported Transfers
• Recreation Fund
$1.1M
• Development Services Fund
$1.0M
• Street Maintenance Fund
$2.5M
463

FINANCIAL RESULTS
2/27/2024 FY 2023-24 Mid-Year Budget Review 12

CAPITAL IMPROVEMENT PLAN
Completed CIP Projects (FY 2023-24)
• Ralston Avenue Pavement Rehabilitation
Project
• San Juan Pump Station Slope Repair
Project
Sewer Treatment
• Ongoing contributions
to SVCW for RESCU program
58%
33%
1%
5% 3%
Sewer Streets
Technology Facilities
Parks & Open Space
464
FISCAL

SUSTAINABILITY
13465
Future
impact to
General Fund
$4-$6 million
annually

FISCAL SUSTAINABILITY
2/27/2024 FY 2023-24 Mid-Year Budget Review 14

PROPERY TAX IN-LIEU OF VLF
• VLF continues to be underfunded
• State refuses to meet its VLF payment
obligation
• $1.1M shortfall in FY 2022-23
Entire Business Tax License Revenue
• ~$1.7M shortfall in FY 2023-24
• City Manager’s group continues to work
in conjunction with the County
466

FINANCIAL OUTLOOK
15467

FINANCIAL OUTLOOK

FUND BALANCE IMPACT WITH VLF FUNDING
(IN MILLIONS)
2/27/2024 FY 2023-24 Mid-Year Budget Review 16
$(7.0)
$(2.0)
$3.0
$8.0
$13.0
$18.0
$23.0
$28.0
Actuals/Estimates
33% Target
468

FINANCIAL OUTLOOK

FUND BALANCE IMPACT WITHOUT VLF
(IN MILLIONS)
2/27/2024 FY 2023-24 Mid-Year Budget Review 17
$(8)
$(4)
$-
$4
$8
$12
$16
$20
$24
$28
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 Actuals/Estimates
33% Target
2031-32 2032-33
469

FINANCIAL OUTLOOK

REVENUE & EXPENDITURE ESTIMATES
(IN MILLIONS)
2/27/2024 FY 2023-24 Mid-Year Budget Review 18
$29
$31
$33
$35
$37
$39
2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 Revenues
Expenditures
470

GENERAL FUND
2/27/2024 FY 2023-24 Mid-Year Budget Review 19

COMPARISON OF GENERAL FUND
BALANCE AS OF JUNE 30, 2023
(IN MILLIONS)
$27
$55
$111
$63
$95
$54
$35
$-
$20
$40
$60
$80
$100
$120
Burlingame San Mateo* Foster City Belmont Redwood
City*
San Carlos Menlo Park
Measure I
General Fund
*General Fund balance as of June 30, 2023 not currently available; amounts shown are as of June 30, 2022.

Belmont’s General Fund balance as of June 30, 2023 was $27 million; Measure I Fund balance was $4 million. 471

AVAILABLE REVENUES
2/27/2024 FY 2023-24 Mid-Year Budget Review 20

COMPARISON OF GENERAL FUND

REVENUES PER HOUSEHOLD
$6,567
$3,767
$4,578
$2,943
$5,573
$4,872
$6,080
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Burlingame San Mateo Foster City Belmont Redwood
City
San Carlos Menlo Park
Local Transaction Tax / Measure I
for Belmont
Miscellaneous
Service Charges
Transient Occupancy Tax
Sales & Use Taxes
Property Tax
Denotes the 7-city average revenue of $4,881 per household “Miscellaneous" includes Licensing Fees, Real Estate Transfer Tax, Licenses and Permits, Intergovernmental Sources, Fines and Forfeitures, Interest and Rent Income, and other.
472

RECOMMENDATION
21473

RECOMMENDATION

NEXT STEPS
2/27/2024 FY 2023-24 Mid-Year Budget Review 22
Continue community
engagement to identify
community service priorities;
explore targeted, locallycontrolled revenue sources
FY 2024-25 Budget directive will
reflect ongoing efforts to
address financial sustainability &
Council’s Strategic Focus Areas
474

RECOMMENDATIONS
FY 2023-24 MID-YEAR

BUDGET RESOLUTIONS
2/27/2024 FY 2023-24 Mid-Year Budget Review 23
• Revisions to capital improvement project budgets
• Based on updated project estimates and timelines
• Transfer revenues to CIP Project expenditure funds
• Address actions previously approved by Council,
variances based on YTD estimates
• Adopt resolutions amending FY 2023-24 Budgets for:
• The City of Belmont
• Belmont Fire Protection District
475