BACKGROUND:
After five months of reviews and discussions, we are pleased to present the adopted Biennial Budget for Fiscal Years (FY) 2023/2024 and 2024/2025 for the City of Cathedral City; the Cathedral City Public Financing Authority; the Housing Successor Agency (“Successor Agency”); Successor Agency to the Redevelopment Agency; and the Five-Year Capital Improvement Project (CIP) and the Park Improvement Project (PIP) Plans.
This biennial budget was developed with a primary focus to accomplish City Council strategic plans and corresponding goals established in January 2023. Departments reviewed past accomplishments and developed objectives focusing on achieving these overarching Council strategies and goals:
•Serving the Community with Pride and Dedication
•Community Investment
•Fiscal Stability and Sustainability
•Innovation
•Safety
•Embracing, Inclusive City
Within each department budget, there are work plans and performance measures focused on creating the desired future for Cathedral City. In January 2023, Community Survey conducted by Fairbank, Maslin, Maullin, Metz & Associates (FM3) Research conducted a Community Survey resulting in these top three issues identified by Cathedral City residents:
•homelessness,
•crime and safety, and
•roads and infrastructure.
During the past ten years, FY 2012/2013 through FY 2021/2022, the City has been able to stabilize and achieve not only balanced budgets, but has also been able to grow Fund Balance, our “the savings account”. With these financial resources, this biennial budget focuses not only the top three issues but many other items identified, which have been incorporated into the City’s newly published Five-Year Strategic Plan.
DISCUSSION:
To achieve time and cost efficiencies over a traditional annual budget, the City of Cathedral City prepares and adopts two one-year budgets. Using this cycle, the second year does not require formal adoption by City Council. Each year is separate and distinct. Unencumbered operating funds from the first year do not carry over into the second year.
The City’s six-month budget preparation cycle began in December as Financial Services collaborated with various City departments over the next six months with a primary focus on the General Fund, Special Revenue Funds with operating budgets and the Five-Year Plans for the Capital Improvement Project (CIP) and the Parks Improvement Project (PIP) Plans. In total, this budget forecasts the financial plan over the next two years for the City’s 50+ funds.
Once City Council adopts this budget, staff will publish the biennial budget and will integrate the budgetary data into the City’s accounting system at both the general ledger (summary) and project ledger (subsidiary) levels. Financial Services will submit the adopted biennial budget to the Government Financial Officers Association (GFOA) budget awards program. Cathedral City has received the GFOA budget award for the last eight budget cycles.
FISCAL IMPACT:
In summary, the attached Biennial Budget for FY 2023/2024 and FY 2024/2025 to be adopted shows:
•For FY 2023/2024, the City’s General Fund forecasted budgeted revenues are $67,007,499 and budgeted expenditures are $69,679,551. The net deficit is $2,672,052, which includes $6,742,656 in discretionary expenditures, resulting in a structurally balanced budget.
•For FY 2024/2025, the City’s General Fund forecasted budgeted revenues are $64,600,726 and budgeted expenditures are $70,425,395. The net deficit is $5,824,669, which includes $5,849,030 in discretionary expenditures, resulting in a structurally balanced budget.
Through this biennial budget to be adopted, the City has prioritized essential services and continues to invest in our City’s infrastructure. This budget ensures the City continues to proactively pay long-term liabilities and continue capital investments in our most critical infrastructure.