1 STAFF REPORT
DATE: June 4, 2024
TO: Justin Hess, City Manager
FROM: Jennifer Becker, Financial Services Director
By: Leana Mkrtchyan, Deputy Financial Services Director
SUBJECT: Adoption of Resolutions Adopting the Fiscal Year 2024-25 Annual Budget, Citywide Fee Schedule, and Appropriations Limit
RECOMMENDATION:
1. Provide further direction as necessary regarding the budget follow-up requests.
2. Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR THE FISCAL YEAR 20 24-2025 AND MAKING APPROPRIATIONS FOR AMOUNTS BUDGETED.
3. Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK DETERMINING AND ESTABLISHING THE CITY’S APPROPRIATIONS LIMIT FOR THE FISCAL YEAR 2024-2025.
4. Adopt A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR THE FISCAL YEAR 2024-2025.
5. Adopt A RESOLUTION OF THE PARKING AUTHORITY OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR THE FISCAL YEAR 2024-2025.
6. Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK ADOPTING THE FISCAL YEAR 2024-2025 CITYWIDE FEE SCHEDULE.
FINANCIAL
SERVICES
2 BACKGROUND:
The Fiscal Year 2024-25 Proposed Budget documents were distributed on May 2, 2024, for the City Council’s review and made available to the public at the City Clerk’s Office, the Financial Services Department, the Burbank Library branches, and on the City’s website. Budget Review Council Meetings were held on May 7, and May 21, 2024, during which staff presented a detailed overview of the Proposed Citywide FY 2024-25 Budget and Fee Schedule, along with the General Fund F ive-Year Financial Forecast and the Citywide Capital Improvement Program. The purpose of these budget presentations was to provide the City Council the opportunity to review each department and fund’s budget, ask questions, review new budget requests , and make modifications to the budget and fee schedule.
DISCUSSION:
FY 2024-25 Citywide Budget
The following chart provides a Citywide snapshot of the proposed resources and appropriations for FY 202 4-25. The total appropriations for the FY 202 4-25 Proposed Budget of $869.5 million are roughly $19 .5 million more than the Adopted FY 202 3-24 Budget, an increase of approximately 2.3%.
FUND/FUND GROUP
PROPOSED
RESOURCES
PROPOSED
APPROPRIATIONS *
General Fund $ 247,807,039 $ 258,253,929 Special Revenue Funds (incl. Cap Projects Fund) 67,888,933 67,833,756 Internal Services Funds 80,903,987 91,263,960 Water Reclamation & Sewer 21,652,731 25,640,344 Water and Electric (BWP) 324,817,772 382,092,545 Refuse Collection and Disposal 22,826,130 26,626,862 Successor Agency 2,391,021 2,507,087 Housing Authority 12,842,154 14,421,027 Parking Authority 684,061 831,834 TOTAL ALL FUNDS $ 781,813,828 $ 869,471,344 *Proposed Appropriations are funded by FY 2024-25 total citywide revenues as well as the use of available fund balances.
3 Council Follow-up Items
During the City Council Meeting on May 21, 2024, the City Council reviewed 15 discussion paper and follow-up items related to the budget . At that time, the following items were approved by the City Council for incorporation into the proposed budget:
1. Interpretation Services for City Council Meetings- $3,000 (Recurring)
2. Housing Enforcement Unit - $650,000 (Recurring), $100,000 (One-Time)
3. Addition of a Business Concierge Coordinator - $147,138 (Recurring)
4. Cultural Affairs Supervisor Position- $112,463 (Recurring)
5. Metro GO PASS program for BUSD students – $40,410 (AQMD Fund, Recurring)
6. Leadership Burbank Funding Request - $12,000 (One-Time)
7. Two-Year Community Event and Program Grant Pilot - $100,000 (One-Time)
8. Burbank Pride, inc. Family Pride in the Park Event – up to $15,000 (One-Time)
The City Council also requested additional information related to the following items to be reviewed at the Budget Public Hearing. These items are included in this report as Attachment 9.
1. Sustainable Burbank Commission Funding Request - $15,000 (Recurring)
2. Expedited Survey and Public Outreach for a Potential Local Rent Cap in the City of Burbank - $100,000 (One-Time)
General Fund Financial Status
Based on the forecasted FY 2024-25 revenue and proposed recurring appropriations, including the discussion papers approved by the City Council for incorporation into the budget on May 21, 202 4, staff is projecting a recurring balance of approximately $1. 3 million in FY 202 4-25 (see Attachment 6). Factoring in the anticipated ending balance from FY 2023-24, contributions to reserves, and proposed one-time appropriations, staff is expecting an available balance of $ 5,841,620 in the General Fund at the end of FY 2024-25.
Infrastructure Investment Plan
Adhering to the City Council’s adopted Infrastructure Maintenance, Repair, and Improvement Policy, the FY 2024-25 Proposed Budget continues to contribute half of the Measure P sales tax revenue to the Municipal Infrastructure Fund 534, in addition to the annual $4.7 million General Fund maintenance of effort.
The FY 2024- 25 Proposed Capital Improvement Program (CIP) continues the City’s efforts towards addressing infrastructure needs, with just over $33 million in proposed general city capital spending from 15 different funds and funding sources, alongside $6.2 million in annual Fund 534 maintenance dollars. The proposed CIP projects were presented to the Infrastructure Oversight Board (IOB ) for review at two public meetings 4 on February 22 and March 28, 2024, the second of which the IOB formally approved the capital plan for inclusion in the Proposed Budget. A summary of all new and continuing CIP projects for FY 2024-25 is included in Attachment 8.
Gann Initiative Appropriation Limit
The City is required by State law to establish an appropriation limit each fiscal year. Only those revenues received from proceeds of taxes are subject to this limit. This means that only certain revenues from funds such as the General Fund, the Gas Tax Fund, and various Transportation Funds are subject to the appropriation limit. All other funds that fall under the City Council’s control (i.e., Enterprise Fund rates and General Fund user fees) are exempt from this limitation.
Utilizing the most current price and population data provided by the State of California, the City’s FY 20 24-25 appropriation limit is estimated to be $2 67,350,291. The actual amount of the appropriations contained in the budget that is subject to the limit is $186,183,933. The difference between the City’s appropriation limit and the amount proposed to be appropriated that is subject to the limit is $81 ,166,358. As a result, the City, in accordance with State law, is well below its appropriations limit.
Environmental Review
This activity includes the FY 2024-25 Proposed Budget and has no potential for resulting in either a direct or a reasonably foreseeable indirect physical change in the environment.
As such, is not a “project” subject to the requirements of the California E nvironmental Quality Act (CEQA) 14 Cal. Code Regs § 15378.
CONCLUSION:
The adoption of the Budget sets forth the appropriations for the new fiscal year. For FY 2024-25, total General Fund appropriations of $ 258 million have been balanced against projected revenues and the use of f und balance. If adopted as is, the overall General Fund budget will be balanced as required by the City Charter. However, it should be noted that the $1.3 million projected recurring balance for FY 2024-25 is forecasted to turn into a deficit by year three of the five -year forecast as future projected expenses outpace projected revenues (see Attachment 7).
Burbank is heading into FY 2024- 25 with a proposed budget that reflects the City Council’s goals and priorities but still adheres to the City’s values of fiscal responsibility.
The City Council has consistently pursued sound fiscal policies and strategies like strengthening revenues, paying down pension liabilities, building up reserves, and utilizing one -time funds to make strategic investments to reduce future recurring expenses. In addition to the projected FY 2024- 25 year-end General Fund Balance of $5.8 million, Burbank’s formal reserves total approximately $54.4 million. These funds will 5 allow Burbank to weather any potential unexpected events or fluctuations in the economy over the next several years. Staff will continue to monitor any economic conditions or legislative actions that may impact the C ity’s financial position and provide regular updates to the City Council.
ATTACHMENTS:
Attachment 1: A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR THE FISCAL YEAR 202 4-2025, AND MAKING APPROPRIATIONS FOR AMOUNTS BUDGETED.
Attachment 2: A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK DETERMINING AND ESTABLISHING THE CITY’S APPROPRIATIONS
LIMIT FOR THE FISCAL YEAR 2024-2025.
Attachment 3: A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR THE FISCAL YEAR 2024-
2025.
Attachment 4: A RESOLUTION OF THE PARKING AUTHORITY OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR THE FISCAL YEAR 2024-
2025.
Attachment 5: A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK ADOPTING THE FY 2024-2025 CITYWIDE FEE SCHEDULE.
Attachment 6: General Fund Projected Spendable Fund Balance FY 2024-25 Attachment 7: General Fund Financial Forecast FY 2024-25 through FY 2028-29 Attachment 8: Summary of CIP Projects by Category FY 2024-25 Attachment 9: Discussion Paper Follow-up Items
Correspondences