FISCAL YEAR 2021-22
MID-YEAR
PRESENTATION
March 8, 2022
Finance Department
OVERVIEW
Fiscal Year 2020-21 Year-End Highlights
Fiscal Year 2021-22 General Fund Mid-Year Overview
Requested Mid-Year Adjustments
General Fund Balance Overview
Budget Calendar
2 FISCAL YEAR ENDING
6/30/21 HIGHLIGHTS
FY 2020-21 HIGHLIGHTS
City achieved strong financial performance last fiscal year, ending with a slight positive balance of $29k for the $154.7 million General Fund Budget; City prioritized the use of American Rescue Plan Act (ARPA) funds for revenue losses, small business grant assistance, and emergency expenses incurred due to COVID;
No use of Declared Disaster Reserves or other Emergency Reserves; Represents City’s 23rd consecutive year of award winning Annual Comprehensive Financial Report (ACFR) with an “unqualified (clean) opinion” issued by the Independent Auditors.
4 FISCAL YEAR 2021-22
GENERAL FUND
OVERVIEW
FY 2021-22 HIGHLIGHTS
City Council approved the All Funds FY2021-22 budget of $197.9 million on June 15, 2021, with a General Fund Budget of $154.4 million; Public Safety Spending for Police and Fire Services comprises 53% of the total General Fund Budget;
The Adopted Budget supports 530 Full-Time Employees and 121.9 (FTEs) Part-Time positions in eight Departments Citywide;
The Adopted Budget reinstated several reductions taken during the pandemic.
6 ECONOMIC INDICATORS
1ST QUARTER 2022
Housing starts (number of new residential housing projects) are up 1.4%; Housing builds (home building permits) are up 9.1%;
National unemployment rate down to 4% as a result of growth in professional and business services, retail trade, tourism, and transportation;
Retail Sales across the United States increased 13% from prior year; Real Gross Domestic Product (GDP) increased at an annual rate of 6.9% in the fourth quarter of 2021;
However, inflation is up at approximately 7.5%.
7 FY 2021-22
GENERAL FUND EXPENDITURES
(IN MILLIONS)
Category Adopted
FY 21-22
Projected
FY 21-22*
Over/
(Under)
Salaries & Benefits $105.2M $104.2M ($1.0M)
Operating 40.2M 40.0M ($0.2M)
Subtotal $145.4M $144.2M ($1.2M)
Transfers Out:
- Capital Improvement $6.9M $6.9M 0.0
- IT Replacement 2.1M 2.1M 0.0
Total Expenditures $154.4M $153.2M ($1.2M)
8 *Estimates only, subject to change
FY 2021-22
GENERAL FUND REVENUES AND EXPENDITURES
(IN MILLIONS)
Category Adopted
FY 21-22
Projected
FY 21-22*
Difference
Property Taxes $49.6 $49.7 $0.1
Sales Tax 61.0 66.1 5.1
TOT (hotel tax) 5.6 6.7 1.1
Cannabis (fees and permits) 3.3 2.5 (0.8)
Other Revenues 25.1 28.0 2.9
Subtotal $144.6 $153.0 $8.4
Use of Reserves 3.2 0.0 (3.2)
Transfer In – Use of ARPA 6.6 3.0 (3.6)
Total Funding Sources $154.4 $156.0 $1.6
Expenditures ($154.4) ($153.2) $1.2
Net Gain / (Loss) $0.0 $2.8 $2.8
9 *Estimates only, subject to change
THREE YEAR COUNCIL
GOALS AND PRIORITIES
THREE YEAR STRATEGIC PLAN GOALS
Strengthen the Public’s Safety and Improve the Quality of Life Achieve Long-Term Fiscal Sustainability
Recruit and Retain High Quality Staff
Diversify, Stabilize and Increase Housing to Reflect Community Needs Advance Environmental Sustainability and Climate Resiliency 11 RECRUIT AND RETAIN HIGH QUALITY STAFF
• At the September 2021 Strategic Plan Retreat, City Council requested staff expand personnel capacity for recruitment and retention; • Also, continues to slowly improve the City’s current efforts in recruiting and retaining talent
• To that end we brought an item in December to adjust compensation in certain classifications to the market;
• We are pleased to report that the Federal Government understands the need for governments to retain and attract staff, especially during the pandemic. 12 AMERICAN RESCUE PLAN ACT
• New guidelines released by the Department of Treasury state that ARPA funds can be utilized for:
Premium pay for essential workers,
To restore positions;
To restore employment;
Funding for employees that experienced pay reductions or work furloughs;
Maintain compensation levels to prevent payoffs; and
Provide worker retention incentives, including reasonable increases in compensation.
13 AMERICAN RESCUE PLAN ACT
• ARPA’s eligibility requirements and guidelines include the ability to:
Realign positions;
Leverage existing positions;
Revamp the recruitment process; and
Provide reasonable increases in compensation to market levels. • By March 2021, of the $26.2 million approved ARPA funding for the City, $13.2 million was received; next month, by April 2022, the City will receive the remaining $13.2 million.
• City staff recommends the use of ARPA funding to recruit and retain high quality staff as approved by City Council as one of the Strategic Planning goals identified in September 2021.
14 STRENGTHEN THE
PUBLIC’S SAFETY AND
IMPROVE THE
QUALITY OF LIFE
Coming March 15th…
PUBLIC SAFETY OVERVIEW
• Costa Mesa is a full service City comprised of:
• Police Department and Regional Counter Intelligence Services • Fire and Rescue Department
• Emergency Operations Center
• Ambulance and Paramedic Transportation Program
• PSAP – Public Safety Access Points (9-1-1 Communications Center – both Police and Fire)
• Both Departments provided 24/7 operations throughout the entire pandemic 16 POLICE DEPARTMENT
Challenge Solution Net FTE Current Year
$ Impact
Annual $
Amount
Need to better address crime and enhance
presence at prime retail locations
Add a new Police Sergeant
(sworn) 1.0 $40,975 $163,900
Need to strengthen the emergency
management team and functions
Upgrade Emergency Svcs
Admin to Emergency Svcs Mgr 0.0 4,900 19,600
To relieve sworn Police Lieutenant from
Records/Evidence Management to align to
sworn duties
Upgrade Records
Administrator to Records,
Property & Evidence Mgr 0.0 3,525 14,100
Reduce crime scene investigations
performed by sworn Police Officers to better
provide patrol services
Convert P/T Crime Scene
Specialist to F/T 0.5 12,625 50,500
To alleviate the heavy workload in the Crime
Scene Unit associated with discovery
requests
Convert 2 P/T Records Tech to
1 F/T Community Svcs
Specialists 0.0 6,700 26,800
Subtotal 1.5 $68,725 $274,900
17 FIRE AND RESCUE DEPARTMENT
Challenge Solution Net
FTE
Current Year
$ Impact
Annual $
Amount
Need more substantive management
and oversight of the Emergency
Medical Services (EMS) section and
program EMS Fire Captain 1.0 $43,625 $174,500
Currently, no direct Fire and Rescue
governance within the chain of
command
Telecommunications
Manager* 1.0 39,250 157,000
Hard-to-Fill and retain classifications
Fire Marshal and
Inspectors 0.0 24,625 98,500
Subtotal 2.0 $107,500 $430,000
18 *Position will be reporting to a unified command structure from both Police Department and Fire and Rescue Department FY 2021-22
BUDGET RESOLUTION UPDATE
Public Safety:
• Provide appropriation authority for year-to-date expenses incurred for public safety mutual aide assistance, for both Police and Fire, if necessary, and is reimbursable by the State or other jurisdiction. • Expected reimbursements of $1.2M
• Adjustment is net neutral.
19 RECRUIT AND RETAIN
HIGH QUALITY STAFF
Coming March 15th…
RECRUIT AND RETAIN HIGH QUALITY STAFF
• To that end, the City is recommending an expanded Recruitment Division in Human Resources;
• This entails the creation of a Human Resources Administrator position and a Human Resources Analyst position to enhance these efforts. • Further adjustments are also recommended in other departments. • The last two years have seen an unprecedented number of retirements citywide.
• In order to achieve the City Council’s goals, Costa Mesa needs to strengthen its competitiveness.
• Past recessions have led to many positions being significantly under market creating recruitment and retention challenges.
21 MID-YEAR STAFFING REQUESTS
Classification FTE Current Year $
Impact
Annualized
$ Amount
Human Resources Analyst 1.0 $28,600 $114,400
Human Resources Administrator 1.0 33,600 134,400
Senior Accountant (Confidential) 1.0 27,900 111,600
Subtotal 3.0 $90,100 $360,400
One P/T Management Analyst to F/T 0.5 15,150 60,600
Three P/T Community Services Leaders to
One F/T Recreation Coordinator (0.5) 3,100 12,400
One P/T Management Aide and One P/T
Community Outreach Worker to One F/T
Community Services Supervisor 0.0 10,825 43,300
Upgrade Two F/T Budget Analyst positions to
Senior Budget Analysts 0.0 5,130 20,520
TOTAL REQUEST 3.0 $124,305 $497,220
22 *Estimates only, subject to change
HARD TO FILL AND/OR RETAIN
• PHASE I: Approved by City Council in December 2021;
• PHASE II will include the following, among others:
• Fire and Rescue
• Development Services
• Finance
• Information Technology
• Current goal is to achieve market compensation (i.e. average compensation); • Estimated fiscal impact of $175,000 and $700,000 annually for Phase II. 23 HISTORICAL STAFFING LEVELS (FY09 – FY21) FTE
24 611
498 497
465 466 477 478 479 477 480 492 502
530
0 100
200
300
400
500
600
700
FY 09-10
Adopted
FY 10-11
Adopted
FY 11-12
Adopted
FY 12-13
Adopted
FY 13-14
Adopted
FY 14-15
Adopted
FY 15-16
Adopted
FY 16-17
Adopted
FY 17-18
Adopted
FY 18-19
Adopted
FY 19-20
Adopted
FY 20-21
Adopted
FY 21-22
Adopted
13%
81 FTEs
GENERAL FUND
OVERVIEW
FUND BALANCE IN THE GENERAL FUND
(IN THOUSANDS)
Fund Balance Category FY 18-19
Audited
FY 19-20
Audited
FY 20-21
Audited
FY 21-22
Projected
Committed
Declared Disaster $ 14,125 $ 14,125 $ 14,125 $ 14,125 Economic Reserves 7,500 9,000 9,000 9,000 Self Insurance 2,000 2,000 2,000 2,000 Assigned
Compensated Absences 4,893 5,036 5,920 5,920 Police Retirement 1% Supp. Plan 2,297 2,365 2,275 2,275 Section 115 Trust - 1,750 - - Restricted
Pension and OPEB - - 1,778 1,778 Non-Spendable 280 362 965 965 Unassigned 20,451 18,825 17,429 17,429 TOTAL $ 51,546 $ 53,463 $ 53,492 $ 53,492
BUDGET CALENDAR
BUDGET CALENDAR
DATE TOPIC
March 8 FY 21-22 Mid-Year Study Session
March 15 FY 21-22 Mid-Year Adjustment Request
April 26 FY 22-23 Proposed Budget Study Session
May 10 FY 22-23 Proposed Budget Study Session
June 7 FY 22-23 Budget Adoption (Operating and CIP) Public Hearing June 21 FY 22-23 Budget Adoption Public Hearing (Alternative Date) 28 QUESTIONS