CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
Item No. Item No.
Item No.
Item No.
TO: Honorable City Council
FROM: City Manager
SUBJECT: Mid-Year Budget Review – A Resolution Amending the Annual Operating and Capital Budgets for Fiscal Year 2021-2022 Meeting Date: March 8, 2022
RECOMMENDATION:
The City Council will consider for adoption a Resolution amending the annual operating and capital budgets for fiscal year 2021-2022, and assign the number next in order.
BACKGROUND/ANALYSIS:
This year’s Mid-Year budget process involved working with each department to review their existing budgetary appropriations to determine whether any changes need to be made because of unanticipated costs. Additionally, staff focused on the desire to restore services to the community that were reduced or eliminated during the Pandemic. The reopening process has been and will continue to be a balancing act between the needs of the community, funding availability and the changing dynamics of the Pandemic. Maintaining fiscal discipline as we reopen is vital in staff’s view. The City used approximately $15 million or 38% of its cash reserves to navigate the economic crisis caused by the Pandemic. The restoration of these reserves is essential as a healthy reserve balance will be needed to help navigate future challenges.
At the June 8th 2021 special council meeting the City Council reiterated their desire to restore programing at a measured and pragmatic pace while continuing a wait and see approach regarding fiscal year 2021-2022 revenues. Several scenarios were presented to the City Council regarding the revenue expected in the upcoming fiscal year.
The City Council selected scenario A as presented by staff to develop the fiscal year 2021-2022 budget. Using scenario A the City Council selected various enhancements and restoration to the budget leaving $500,000 of the projected surplus for potential use at Mid-Year while also preserving $193,064 for the surplus available during the development process.
At the December 7th regular City Council Meeting Finance staff presented a budget update for the City Council. The update provided information on the severity of the economic downturn. The presentation highlighted the key revenue sources that were most impacted by the downturn as well as showing the pace that revenues have been recovering.
After reviewing projections based on the City’s most recent revenues and expenditures, Finance staff is comfortable recommending that council approve moving to Scenario B as presented at budget adoption. The table below lays out the impact of moving to Scenario B as it relates to the Mid-Year surplus as well as summarizing the various actions taken by the Council that have come from the surplus:
Below is a summary list of the General Fund Mid-Year budget requests made by function.
Additionally, the following table summarizes Mid-Year requests that are being requested for other funds:
Staff will provide a presentation that will include the line item detail and programmatic impact of the proposed budget adjustments. During the presentation each department will have staff available to provide further detail for the City Council if requested.
ALTERNATIVES:
Approve staff recommendation
Provide staff with further direction
FISCAL IMPACT:
As presented the proposed FY 2021-22 mid-year budget general fund adjustments total $785,925. This leaves $31,079 of the projected general fund surplus under scenario B. The City Council can utilize the remaining surplus for unforeseen items during the fiscal year or allow the surplus to return to the City’s reserves. Additionally, the proposed adjustments would provide funding of $2,500 from the Community Benefits Fund and $166,089 from the Measure AA Fund.
RELATIONSHIP TO STRATEGIC GOALS:
This report before the Council is not applicable to any specific 2016 Strategic Plan goal; however, it is related to the following: Fiscal Sustainability – The City of Commerce will implement innovative and responsible policies and business practices to effectively manage its fiscal and human resources. The City will maintain a stable financial environment that is transparent and supports an outstanding quality of life for our community. City business practices will be efficient, business friendly and ensure exceptional customer service.
Recommended by: Josh Brooks, Director of Finance
Reviewed by: Vilko Domic, Assistant City Manager
Approved as to form: Noel Tapia, City Attorney
Respectfully submitted: Edgar Cisneros, City Manager
ATTACHMENT:
Resolution