Camarillo City Council
Camarillo Sanitary District
AGENDA REPORT
Date: June 26, 2024
To: Honorable Mayor and City Councilmembers
Chairman and Directors of the Camarillo Sanitary District From: Greg Ramirez, City Manager
Submitted by: Mark Uribe, Finance Director
Subject: Amend the Fiscal Year 2023/24 Budget and Adopt the Fiscal Year 2024/25 Budget and Related Resolutions
BACKGROUND
This action will make certain year-end amendments to the Fiscal Year 2023/24 Budget for the City of Camarillo, and adopt the Budget for Fiscal Year 2024/25, the Annual Gann Appropriations Limit, and the GASB 54 Commitment of Fund Balance for the City of Camarillo and the Camarillo Sanitary District (CSD). The Council and District are also asked to consider resolutions setting forth the Compensation, Classification and Benefits Program and a Statement of Understanding for the terms and conditions of employment for City and Camarillo Sanitary District (CSD) employees.
DISCUSSION
ANNUAL BUDGET
The proposed Resolutions address the following:
1. Adopts the FY 2024/25 Budget.
2. Establishes the level of authority for budget amendments.
3. Provides a mechanism to carryover balances related to outstanding purchase orders, capital projects, and grant revenues and expenditures.
4. Adopts the compensation, classification and benefits program and approves a statement of understanding pertaining to terms and conditions of employment for City and CSD employees effective July 1, 2024.
Overview
The City’s financial position remains in excellent fiscal condition. The City complies with the City Council Reserve Policy 3.05 as most of the projected Fund Balances are
Adopt Fiscal Year 2024/25 Budget
June 26, 2024
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expected to meet or exceed their established reserve levels at the fiscal year ending on June 30, 2025. The Proposed FY 2024/25 Budget is operationally balanced, as operating revenues are projected to meet or exceed ongoing operating expenditures, thereby maintaining or increasing fund balances. For individual funds that are expected to have a decrease in fund balance, the primary reasons are one-time costs such as capital projects, facility maintenance upgrades, or uses of accumulated fund balance.
The FY 2024/25 Proposed Budget for all City of Camarillo (herein referred to as the City) and Camarillo Sanitary District (CSD) funds includes Revenues of $136.7 million and Expenditures of $161.6 million, for a projected use of accumulated fund balance of $24.9 for one-time costs or capital project expenditures.
The General Fund is the chief operating fund for the majority of the City’s general municipal operations and services (administration, public safety, public works, community services, and community development). The FY 2024/25 General Fund Proposed Budget includes Revenues and Transfers In of $62.8 million and Expenditures and Transfers Out of $62.5 million, for a net increase in Fund Balance of $0.3 million.
Additional detailed information for all funds can be found in the attached Proposed Fiscal Year 2024/25 Budget Document. The document outlines the changes for all City & CSD funds, provides revenue, expenditure, and fund balance details by type of fund, and a Reserve Analysis to show projected fund balance and working capital balances in relation to levels established in City Council Policy 3.05, Reserve Level.
Adoption of the FY 2024/25 Budget
On May 18, 2024, the Camarillo City Council and the Camarillo Sanitary District jointly convened to review the FY 2024/25 proposed Budget. The Camarillo Library Board also participated to review the portion of the budget related to Library operations. At that time, the City Council and Camarillo Sanitary District thoroughly reviewed the proposed budget.
Level of Authority for Budget Amendments
The Resolution sets forth the levels of budget authority for the City Council and the City Manager. Since there are budget adjustments throughout the year as conditions change, it is appropriate to establish the level of authority for those changes with the adoption of the budget and to include that provision in the budget resolution. Please note that while the City Manager has the authority to make budget transfers between line items, there must be funding source compatibility between the source account and the use account.
A need for any additional appropriation from fund balance must be approved by the City Council.
Mechanism to Carryover Balances Related to Outstanding Orders, Capital Projects, and Grant Revenues and Expenditures
Staff is recommending that authority be granted to the City Manager to carryover from the FY 2023/24 into FY 2024/25 budget balances related to purchase orders Adopt Fiscal Year 2024/25 Budget
June 26, 2024
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(encumbrances), capital projects, and grant revenues and expenditures. By authorizing the City Manager to approve those carryovers as soon as the FY 2023/24 is closed, the carryovers can be completed in a timely manner.
ANNUAL GANN APPROPRIATIONS LIMIT
California voters approved an initiative on November 6, 1979, that added Article XIIIB to the State Constitution. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. Each government entity is required to set its Gann Appropriations Limit each fiscal year with 1978/79 as the base year; then adjust each subsequent year by using a combination of increase in population, plus increase in CPI or per capita personal income.
Proposition 4 and its implementing legislation Chapter 1205/80 were modified by Proposition 111 and SB 88 (Chapter 60/90). Beginning with the Fiscal Year 1990/91 Gann Appropriations Limit, the annual adjustment factors changed. Annually, the government entity can select the greater of growth in the California Per Capita Income, or growth in assessed valuation due to non-residential construction within the City. For the population factor, the entity can select the greater of population growth within the City or the County.
In compliance with Proposition 111, revised annual adjustment factors were applied to the base year 1986/87 limit and each year in between in order to calculate limits for Fiscal Year 1998/99. In addition, the limit can be adjusted for assumed responsibility from one government entity to another. County charges for administration fees for property tax collection were added to the Fiscal Year 1991/92 Gann Appropriation Limit.
The California Department of Finance and the Ventura County Assessor supply the information for determining the factors.
Calculation of the FY 2024/25 Gann Appropriations Limit The application of the annual growth factors to the prior year’s Limit result in a Fiscal Year 2024/25 Limit of $139,841,666, calculated as:
2023/24 Appropriation Limit $135,426,754
2024/25 Population -0.3494
2024/25 Inflation Factor 1.0362
(Per Capita Cost of Living Change)
Ratio of Change (1.0362 x 0.9965) x 1.0326
2024/25 Appropriation Limit $139,841,666
Adopt Fiscal Year 2024/25 Budget
June 26, 2024
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The population factor is the annual change in population for the City. The inflation factor is the percent change in Non-Residential Valuation.
GASB 54 COMMITMENT OF FUND BALANCE
State law requires all general-purpose local governments to publish a complete set of financial statements within seven months of the close of each fiscal year. These statements are referred to as the Annual Comprehensive Financial Report (ACFR).
According to the Governmental Accounting Standards Board (GASB), fund balance is defined as the difference between assets and deferred outflows of resources, and liabilities and deferred inflows of resources in Governmental Funds.
In 2011, the City implemented GASB Statement No. 54 which requires the City to report governmental fund balances in distinct classifications. City Council, as the governing body of the City, may commit fund balance for specific purposes pursuant to constraints imposed by formally adopting a resolution. The Council’s resolution to commit fund balance must occur within the fiscal reporting period in order to be reported in the ACFR for that fiscal year.
During the May 18, 2024 Budget Workshop, the City Council was presented with changes in Fund Balances at the presentation of the City’s Budget for Fiscal Year 2024/25. In total, the City’s General Fund Balance is projected to be $92.3 million on June 30, 2024. One new General Fund Commitment was introduced this year, a General Fund loan to the Water Utility operation. Through this process, Finance Staff is recommending a total Commitment of $88.0 million of the projected fund balance for the following purposes:
$31,231,791 for Council Reserve Goal per Policy 3.05
14,405,000 Facility Improvement Projects
10,000,000 Natural Disaster Recovery
8,000,000 Pleasant Valley Rec & Park District – Community and Senior Center 5,400,000 Economic Development
3,800,000 Continuum of Care
200,000 Camarillo Springs Debris Remediation
15,000,000 Loan to Water Utility
$88,036,791 Total Committed Fund Balance
Commitments are established at the discretion of the City Council and may be changed at any time by Council resolution.
COMPENSATION, CLASSIFICATION AND BENEFITS PROGRAM
The proposed Resolutions set forth the Compensation, Classification and Benefits Program for all City and CSD employees and certain related terms and conditions of employment by a Statement of Understanding, effective July 1, 2024.
Adopt Fiscal Year 2024/25 Budget
June 26, 2024
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An analysis of the Consumer Price Index impacts on salaries and wages and a salary survey of comparable market cities is evaluated annually for recommended salary adjustments to the salary structure. Further, total compensation costs, including employee benefits, are evaluated as part of the budget development process.
The proposed Classification and Compensation Schedule (Attachment 8, Exhibit 4) includes a 4% Cost of Living Adjustment (COLA) to all salary ranges effective July 1, 2024, and all employees will receive the COLA with the first pay period of July.
The Compensation and Classification plan was reviewed with the following City Council goals in mind: a) Employee Relations – maintain an effective workforce through competitive salaries, benefits and training; and b) Fiscal Management, objective 2 – continue to identify and implement means and methods for streamlining internal and public-facing City operations and processes in order to achieve greater effectiveness and time efficiencies. In order to fulfill these goals and objectives, the proposed Resolutions amend the Compensation and Classification Plan for City and CSD employees as follows:
●Addition of the following classification titles:
▪Code Compliance Technician
▪Director of Human Resources
▪Economic and Business Development Manager
The additions to the Classification Plan provide flexibility for future division and department organizational changes or restructuring responsive to the changing demands of the organization, work plans, and level of responsibility and accountability. Planning early by identifying classifications in the Classification Plan provides the flexibility required to effectively and efficiently implement organizational changes.
The proposed Benefit Structure proposes the maintenance of current benefits. It also includes an increase to Cell Phone Allowance and Management Leave for eligible employees.
FISCAL IMPACT
The FY 2024/25 Proposed Budget for all City and CSD funds includes Revenues of $136.7 million and Expenditures of $161.6 million. The Expenditures in excess of Revenues is due to the use of accumulated fund balances for capital projects.
The FY 2024/25 Proposed Budget for the General Fund includes Revenues and Transfers In of $62.8 million, and Expenditures and Transfers Out of $62.5 million, for a net increase in Fund Balance of $0.3 million.
The proposed Compensation, Classification and Benefits Program changes are included in the Fiscal Year 2024/25 budget.
Adopt Fiscal Year 2024/25 Budget
June 26, 2024
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RECOMMENDATION
City Council Recommended Actions:
1. Adopt a Resolution approving the FY 2024/25 Trolley Budget.
2. Adopt a Resolution approving the FY 2024/25 Budget and authorizing appropriations for FY 2024/25, excluding the Trolley operation.
3. Adopt a Resolution that selects the factors used to calculate the limit and establishes the Fiscal Year 2024/25 Gann Appropriations Limit for the City of Camarillo at $139,841,666, as calculated.
4. Adopt a resolution to commit $88,036,791 of the Projected General Fund’s Fund Balance for the fiscal year ending June 30, 2024.
5. Adopt a Resolution setting the Compensation, Classification and Benefits Program and approving a Statement of Understanding for the terms and conditions of employment for City employees, effective July 1, 2024.
Camarillo Sanitary District Recommended Actions:
1. Adopt a Resolution approving the FY 2024/25 Budget and authorizing appropriations for FY 2024/25.
2. Adopt a Resolution setting the Compensation, Classification and Benefits Program and approving a Statement of Understanding for the terms and conditions of employment for Camarillo Sanitary District employees, effective July 1, 2024.
ATTACHMENTS
1. Attachment 1 - Proposed Fiscal Year 2024/25 Budget Document
2. Attachment 3 - Resolution (Trolley Budget)
3. Attachment 2 - Resolution (City Budget)
4. Attachment 4 - Resolution (Gann Appropriations Limit)
5. Attachment 5 - Resolution (GASB 54 Commitment)
6. Attachment 6 - Resolution (City Comp, Class and Benefits Program)
7. Attachment 7 - Resolution (CSD Budget)
8. Attachment 8 - Resolution (CSD Comp, Class and Benefits Program) REFERENCE MATERIALS – AVAILABLE FOR REVIEW AT CITY HALL None