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Staff Report
City Council
Item No. 2.A
Meeting Date: April 12, 2023
From: Kevin Biersack, Deputy Finance Director
Title: Fiscal Year (FY) 2023/2024 and 2024/2025 Biennial Budget General Fund Overview Discussion
City Council
RECOMMENDATION:
This item is presented for information and discussion only.
BACKGROUND:
The City of Cathedral City is proud to participate in the Government Finance Officer Association’s (GFOA’s) Distinguished Budget Presentation Award program for the City’s Biennial Budget. Since FY 2008/2009, we have received this prestigious award for the past eight (8) budget documents submitted, covering the past 15 years. The FY 2023/2024 and FY2024/2025 Biennial Budget will be the City’s 9th submission to GFOA for this award.
For purposes of the April 12, 2023 Study Session discussion regarding the General Fund, the Biennial Budget workbook under review currently reflects a deficit in the General Fund for each year, reflected as follows:
FY 2023/2024 FY 2024/2025
Revenues $66,957,499 $64,550,726
Expenses $69,165,872 $69,906,706
Surplus/(Deficit) ($ 2,208,373) ($ 5,355,980)
As presented, the proposed budget is structurally balanced for each of the next two fiscal years. Staff has included one-time, extraordinary items/investments in the City and for the community to be funded by the extraordinary reserves in our General Fund (100) savings account (Fund Balance). Discretionary expenditures comprise 11% of the General Fund budget totaling $7,033,654 (FY 2023/2024) and $5,849,030 (FY 2024/2025), consisting of:
•Administrative & PERS Contingencies
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•CalPERS & OPEB Annual Allocations
•One-time Maintenance Repairs
•Infrastructure (above $900K MOE)
DISCUSSION:
During the month of April, there are two Study Session discussions to review the budget workbooks and associated Council questions. The April 12th session will be dedicated to the General Fund and the April 26th session will be devoted to the Special Revenue Funds, Proprietary Funds, the Capital Improvement Project (CIP) Plan and the Parks Improvement Project (PIP) Plan.
The proposed budget will then be included on the May 10th Study Session Council Meeting. This version will include updates and changes from the two budget reviews/discussions in April. With Council’s concurrence at this meeting, the proposed FY 2023/2024 and FY 2024/2025 Biennial Budget will then be submitted to Council for final approval at the May 24th meeting.
Some of the noteworthy topics influencing this biennial budget include:
•Other Post Employment Benefits (OPEB) Annual Allocation •CA Public Employees Retirement System (PERS) Annual Allocation •Maintenance of Effort (MOE) General Fund match for RMRA (SB 1) Funds – Increased investment in FY 2023/2024
•Fleet Replacement Annual Allocation Fully Funded
•Employee Cashouts by Department/Division with a General Fund Contingency for those not budgeted
•Increased Risk Management Contribution for Increased Insurance Costs The Budget Workbook is comprised of these sections and tabs:
•General Fund Revenue and Expense Summary
•Detailed Revenue Summary
•Detailed Expense Summary
•Staffing Summary with Budget Changes
Department Summaries
•Department Detailed Expense Summaries
•Department Narratives, including their respective goals, objectives (in meeting both department and Council goals) and accomplishments and strategies, and •Budget Worksheets for the Operating (Non-Salary/Benefit) Expenses Departments include:
•Elected Officials & Community Organizations
•Legal Services
•City Management:
oCity Manager
oHuman Resources
oCommunications and Events
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oCity Clerk
oEconomic Development
oInformation Technology
•Financial Services:
oRisk Management
oAdministration
oFinance
oFacilities
•Development Services:
oPlanning
oBuilding
oCode
•Engineering and Public Works
oEngineering
oPublic Maintenance
oParks (Recreation)
oStreet Maintenance, funded through Gas Tax and Measure A oEnvironmental Conservation, funded through Environment/Recycling Fund •Police
oAdministration
oField Services
oInvestigative Services
oEmergency Communication
oAnimal Control
•Fire
oAdministration
oEmergency Services
oPrevention/Public Education
oAmbulance Services
oEmergency Management
•General Government
FISCAL IMPACT:
As of June 30, 2022, the City’s available cash for the City’s General Fund (100) is $35,628,660. The City’s Fund Balance policy is the City will strive to assign a minimum of 33% of budgeted expenditures and transfers out for cash flow reserves (50%), economic uncertainties (40%) and budget-related reserves (10%). For the currently forecasted FY 2024/2025 expenditures forecasted to be $69,906,706, the 33% minimum Fund Balance would be $23,302,236.
As presented, the proposed budget is structurally balanced for each of the next two fiscal years. Staff has included one-time, extraordinary items to be funded by the extraordinary reserves in our General Fund (100) savings account (Fund Balance).