Burbank City Council
May 3, 2022

FINANCIAL

SERVICES
Fiscal Year 2022-23
Proposed Budget
May 3, 2022
1 Follow Up from April 26 Budget
Presentations
2 Included in Capital Improvement Program (CIP) presentation:
 Olive/Sparks/Verdugo redesign
 Downtown Burbank scramble crosswalks
 San Fernando Blvd reconfiguration
 Glenoaks Blvd traffic calming measures
Returning to Council at a later date:
 Biannual budget for Utility Funds
 Assistance for low income BWP customers
FY 2022-23 Capital Improvement
Program Presentation
Discussion Papers
 Fund 532 Fuel Cost Impacts
 Consideration of General Fund Reserve
Policies
4 Fund 532 Fuel Cost Impacts
5  Current FY Budget is $13,645,187; proposed FY 2022-23 is $16,910,031.
 Vehicle replacements, capital improvement projects and fuel  Within Fund 532 is fuel for all City (non-BWP) vehicles o Fuel account has been at $1,580,000 since FY 2013-14
o Staff recommending a 10% increase, to $1,738,000
 Burbank purchases fuel at a discounted rate, but is still subject to price volatility
 Fund 532 has sufficient balance to cover temporary fluctuations in fuel prices
 More permanent price increase would result in increased vehicle rental rates beginning in FY 2023-24
Fuel Prices vs. Inflation
6 General Fund Reserve Strategies
General Fund spendable balance estimated
at nearly 30 million at the end of FY 2022-23
 Prior City Council COVID savings measures
 Revenues recovering at a faster pace than
anticipated
 Federal Government assistance via the
American Rescue Plan Act (ARPA)
7 Option 1: Increase the City’s Formal
Reserves
 Current Policy: 20% of recurring General Fund Budget
(2.4 months operating expenses)
 Proposed Policy: 25% of recurring General Fund Budget (3 months operating expenses)
 GFOA reserve calculation recommends between 17%-25%
based on estimated risk
 Would protect Burbank’s bond rating should a disaster or other event occur that necessitates use of reserves
 Survey of local cities’ reserve policies averages 21% o Glendale at 25%, Pasadena at 20%
 Fiscal Impact: $10 million
8 Option 2: Increase Compensated
Absences Reserve
 Leave balances for which employees will be paid at a
future date in time
 General Fund total liability is $14.3 million as of June 30, 2021  Must be reported on the City’s Annual Comprehensive Financial Report (ACFR)
 Current Policy: 20% of outstanding liability
 Proposed Policy: 25% of outstanding liability
 Annual use ranges from $0 to $458,000 (average $225,000)  Forecasted leave balances likely to grow
 Fiscal Impact: $700,000
9 Option 3: Make Additional Discretionary
Payments (ADP) to CalPERS
 $41 million in additional discretionary payments (ADP) paid to CalPERS to date
 Results in future year recurring budget savings
 Investments earn more than the City’s cash pool, but with more risk
 Funds are not liquid and cannot be returned
 $12 million already planned for FY 2022-23 Budget
 Additional payment requires proportional match from utilities  Staff will bring back options to continue pension funding plan in FY 2023-24
10 Option 4: Contribute to the Section 115
Trust
 Established in June 2020 to help support future pension related economic volatility
 Investments typically perform better than the City’s
cash pool, but less aggressive than CalPERS
 Funds are liquid - can be utilized at any time for pension payments
 City Council Financial Policy: “Any year-end General
Fund balance in excess of 6% of the General Fund’s
budgeted recurring appropriations be used to fund
employee pensions”
11 Recommendations
A. Establish Budget Stabilization Reserve of 5% of General Fund recurring budget
 Revise Financial Policies to include formal reserve requirement of 20-25%
B. Increase compensated absences reserve from 20%
outstanding liability to 25%
C. Subsequent to A and B, contribute funds to the City’s Section 115 Trust in accordance with the City Council’s Financial Policy
 $12.1 million in projected FY 2022 -23 FYE General Fund Balance after recommendations are implemented
12 QUESTIONS?
13 Budget Presentation Schedule
14  April 26: Citywide Overview, General Fund, Burbank Water & Power, Water Reclamation & Sewer, Refuse
Collection & Disposal, Internal Service Funds,
Special Revenue Funds, Housing Authority,
Parking Authority, Successor Agency,
 May 3: FY 2022-23 Capital Improvement Program (CIP),
Discussion Papers
 May 17: Public Hearing and Adoption of Utility Rates
 May 24: Public Hearing and Adoption of Citywide
Budget and Fee Schedule