Study Session
May 10, 2022
FY 2022-23 PROPOSED
BUDGET OVERVIEW
2 Paving A Brighter
Future Together
3 FY 2022-23 PROPOSED BUDGET OVERVIEW
• FY 2022-23 Proposed Budget Highlights
• FY 2022-23 Revenue Highlights
• FY 2022-23 Expenditures Overview
• Status of General Fund Reserves
• Budget Calendar
4 FY 2022-23 Proposed Budget was inspired by the
five Strategic Plan Goals:
• Recruit and retain high quality staff
• Achieve long-term fiscal sustainability
• Strengthen public safety and keep the community safe
• Advance environmental sustainability and climate
resiliency
• Diversify, stabilize, and increase housing to reflect community needs
GUIDING PRINCIPLES
FY 2022-23
Proposed Operating and
Capital Improvement
Budget Overview
ALL FUNDS
OVERVIEW
7 Paving a Brighter Future Together conveys
The theme of this Fiscal Year 2022-23 Proposed Budget is “Paving a Brighter Future Together” through the following:
• Fully balanced General Fund budget without the use of American Rescue Plan funds or Reserves;
• Strengthening the City’s commitment to public safety by dedicating 53% of the General Fund resources;
• Investing into the City’s parks, streets, active transportation network, facilities, and other infrastructure;
• Correcting the historical deficit in the City’s Equipment Replacement Fund ensuring our public safety, public services, and other teams’ have equipment to serve the community; • Investing $2.5 in our City’s technology to better serve our residents, businesses, and visitors.
8 FISCAL YEAR 2022/23 ALL FUNDS $206.0 MILLION
GENERAL FUND,
$163.5 Million, or 80%
SPECIAL REVENUE FUNDS,
$12.8 Million or 6%
CAPITAL PROJECTS FUNDS,
$17.0 Million or 8%
INTERNAL SERVICE FUNDS,
$12.7 Million, 6%
9 FISCAL YEAR 2022-23 ALL FUNDS $206.0 MILLION
Appropriations Adopted Proposed Increase/Decrease
All Funds FY 2021-22 FY 2022-23 Amount Percent
Operating Budget 163,522,932 170,095,673 6,572,741 4.0% Transfers Out 9,841,585 10,627,990 786,405 8.0%
Capital Budget 24,566,362 25,312,023 745,661 3.0%
Total $197,930,879 $206,035,686 $8,104,807 4.1%
FY 2022-23
Proposed Capital
Improvement Program
Budget Recap
CONTEXTUAL BACKGROUND
• The FY 2022/23 CIP Budget is both
comprehensive and robust.
• The Proposed FY 2022/23 CIP meets the 5% Capital
Asset Needs (CAN) ordinance requirement of $7M
• Projects were identified based on:
• City Council Priorities as identified in Goals and
Objectives
• Commissions, committee and community feedback
• Department requests
• Infrastructure and facility needs
12 FUNDING SOURCES
Primary funding sources for CIP include:
Capital Improvement Fund (GF) $11,332,000
Gas Tax (HUTA) $2,982,000
Gas Tax (RMRA) $2,570,782
Measure M2 Competitive and Fairshare $3,160,000
Traffic Impact Fees $1,200,000
Golf Course Improvement Fund $350,000
Drainage Fees $30,000
CDBG $600,000
AQMD $195,000
Grant Funds $2,892,241
TOTAL $25,312,023
13 IMPROVEMENT AREAS
• FY 2022/23 CIP
projects are Citywide
• The projects address
needs from all
departments and span a
variety of improvement
areas
Streets,
$9,842,782
Facilities,
$8,813,125
Transportation,
$3,156,116
Parks, Parkways & Medians,
and Energy & Sustainabiltiy,
$3,500,000
14 Adds ongoing funding of $2.8M to support the replacement and maintenance of the City’s fleet for a total of $5.5M. Below are highlights of proposed items:
Replaces a 1985 Armored Vehicle for a new BearCat G2 Armored Vehicle for Police Field Operations ($350,000) via the City's Master Lease; Replacement of ambulances and a Silverado Trail Boss for Fire and Rescue; The City is aggressively shifting its extensive fleet to hybrid and electric options as available;
$572K for nine new hybrid vehicles and $180K for four electric vehicles; Also installing two EV charging stations at the corporation yard.
EQUIPMENT REPLACEMENT FUND
A Brighter Future with a Greener Fleet
15 Fully funds Year 3 of the Information Technology Strategic Plan (ITSP) for $2.5 million, including:
Adds 1.0 Senior Programmer Analyst;
Adds 1.0 Programmer Analyst II;
Funds the Budget and Human Resources Modules for the
upcoming Enterprise Resources Planning (ERP);
Enterprise GIS Master Plan;
Print Management Services; and
Police Department telephone system upgrade to Voice Over Internet Protocols (VOIP).
INFORMATION TECHNOLOGY
REPLACEMENT FUND
16 Allocates ½ percent of the 7% Cannabis Retail and Delivery Tax (Measure Q) funding for Year Two of the goals and objective of the Arts and Culture Master Plan for $221,000:
Continues funding for new full-time Art Specialist position; Art Crawl;
Costa Mesa Free at Segerstrom Center Campus;
Summer Camp for the Arts;
Large scale temporary art;
Asserts “City of the Arts” brand.
ARTS AND CULTURE MASTER PLAN
(Special Revenue Fund)
17 Allocates ½ percent of the 7% Cannabis Retail and Delivery Tax (Measure Q) to fund first-time qualified lower income homebuyers for:
City residents, and
Newport Mesa Unified School District graduates.
FIRST-TIME HOMEBUYER PROGRAM
(Special Revenue Fund)
FY 2022-23
Proposed General Fund
Budget Overview
19 General Fund Overview
Adopted vs.Proposed
Actual Actual Actual Adopted Projected Proposed Increase/(Decrease) Category FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 21/22 FY 22/23 Amount Percent Estimated Revenues 144.9 136.5 141.1 144.6 156.3 163.5 18.9 13.1% Transfers In - 1.2 9.2 6.6 - - (6.6) -100%
Use of Fund Balance - - - 3.2 - - (3.2) -100%
Total Sources of Funds 144.9 137.7 150.3 154.4 156.3 163.5 9.1 5.9% Operating Budget 127.5 132 123.5 145.4 144.5 152.9 7.5 5.2% Transfers Out 20.0 5.4 26.7 9.0 9.0 10.6 1.6 17.8%
Total Expenditures 147.5 137.4 150.2 154.4 153.5 163.5 9.1 5.9% Total Surplus/(Deficit) (2.6) 0.3 0.1 - 2.8 -
20 FISCAL YEAR 2022-23 PROPOSED
GENERAL FUND REVENUE
Property Tax
31.8%
Sales Tax
44.4%
Hotel Tax
4.5%
Other Taxes
Licenses& 5.5%
Permits
3.0%
Fines&
Forfeitures
0.7%
Use of Money
&Property
2.9%
Other Gov't Agencies
0.4%
Fees&Charges
5.1%
Other Revenues
1.7%
$163.5M
21 General Fund revenue is $163.5 million, reflecting an increase of $9.1 million, or 5.9% from the FY 2021-22 Adopted Budget • Increase of Sales Tax from FY 2021-22 Adopted, estimated at $72.6 million, an increase of
4.9%;
• Property Taxes are estimated at $52.0 million, reflecting a 5% growth over the current fiscal year, due to a steady increase in assessed valuations and home sales; • Fees and Charges are showing signs of recovery at $8.4 million; • Increase of Transient Occupancy Tax, estimated at $7.4 million, a $1.8 million increase form the current year’s adopted budget of $5.6 million; and
• Projected Measure Q CannabisTax receipts of $2.5 million, an increase of $500K
GENERAL FUND REVENUE HIGHLIGHTS
FY 2022-23
Proposed General Fund
Revenue Overview
23 General Fund Sales Tax and Property Tax History
66.0 56.9
64.9 66.1
72.6 42.8
45.2 47.5
49.7 52.0
40.0 45.0
50.0 55.0
60.0 65.0
70.0 75.0
2018-19
Actuals
2019-20
Actuals
2020-21
Actuals
2021-22
Amended
2022-23
Proposed
Property Tax
Sales Tax
FY 2022-23
PROPOSED GENERAL FUND
EXPENDITURES
25 FY 2022-23 PROPOSED GENERAL FUND OVERVIEW
• Fully balanced budget with no use of General Fund Reserves; • No use of American Rescue Plan (ARPA) funds;
• Funds a net of 11.95 positions to achieve Strategic Plan goals, of which
6.5 were previously approved at mid-year in March of 2022; • To further address critical public safety, environmental, planning, and technology needs, an additional 5. 5 positions are proposed; only 0.65 FTE will be funded from the General Fund;
• Fixed costs increases, such as PERS and election costs; • A total of $5.4 million towards capital spending, and a $2.8 million debt service payment for the Lions Park bonds, for a total of $8.2 million to comply with the Capital Asset Needs (CAN) Ordinance;
• Continuation of the $4.0M vacancy factor (negative appropriation) adopted in FY 2019-20 General Fund Budget.
PAVING A BRIGHTER
FUTURE TOGETHER
BY
STRENGTHEN PUBLIC SAFETY
&
KEEP THE
COMMUNITY SAFE
27 Strengthen the Public’s Safety
Public Safety Represents 53% of General Fund
City Council
1% City Manager
5%
City Attorney
1% Finance
3%
Parks and Comm Svcs
5%
Information
Technology
3%
Police
33%
Fire and Rescue
20%
Development Svcs
5%
Public Works
12%
Non Departmental
12%
28 PUBLIC SAFETY
Police Department:
• Highest Level of Police sworn staffing since the Great Recession • Increases sworn staffing levels to 140 positions, including:
An additional Police Officer position funded by the County Auto Theft Task Force; Funds Police Sergeant added at mid-year.
• Other annualized staffing enhancements approved at mid-year:
Upgrade Emergency Services Administrator to Emergency Services Manager; Upgrade Records Administrator to Property & Evidence Manager; Reassign Police Lieutenant to Sworn activities;
Convert a part-time Crime Scene Specialist to full-time; and Convert two part-time Records Technician to one full-time Community Services Specialist.
29 PUBLIC SAFETY
Police Department:
• Increases budget by $134,500 for uniforms, janitorial, and contractual services
• Proposed CIP ($1.5 million):
Emergency Communications Facility remodel;
Parking lot reconfiguration;
Range remodel; and
PD headquarters structural foundation repair.
30 Fire and Rescue Department
• Annualizes funding for the new Emergency Medical Services (EMS) Fire Captain added at mid-year
• Includes funding for the new 9-1-1 Telecommunications Manager added at mid-year shared with the Police Department
• New and Improved CIP: Repairs, upgrades, reconstruction at multiple Fire Stations for $5.3 million:
• Fire Station 2 – Design and Construction
• Fire Station 4 – Training Tower and Grounds Reconstruction • Fire Station 6 – Roof Replacement
PUBLIC SAFETY
31 Advance
environmental
sustainability and
climate resiliency
PAVING A BRIGHTER
FUTURE TOGETHER
32 PROMOTING A VIBRANT COMMUNITY
Parks and Community Services
• Increased funding for the Recreation on Campus for Kids (R.O.C.K.S) program that focuses on educational activities, youth sports, recreation, and arts and crafts by $250K;
• Proposed CIP ($2.6 million):
Ketchum-Libolt Park expansion;
Shalimar Park expansion;
Two additional butterfly gardens;
Brentwood Park improvements;
Park repairs upgrades.
33 ADVANCE ENVIRONMENTAL SUSTAINABILITY
AND CLIMATE RESILIENCY
PUBLIC WORKS
Energy and Sustainability:
Adds new EV Charging Stations at the Corporate Yard for $195k; Funds one new Associate Engineer paid for from non General Fund to address storm water quality
Initiate a Climate Action and Adaptation Plan (CAAP) with community engagement;
Commits funds for replacement of aged vehicles with greener options
PAVING A BRIGHTER
FUTURE TOGETHER
Recruit and Retain
High Quality Staff
35 RECRUIT AND RETAIN HIGH QUALITY STAFF
• The proposed new positions include:
• Police Officer (1) funded by the County Auto Theft Task Force, • Associate Engineer (1) funded by Special Revenue Funds, • Programmer Analyst (1) funded by the IT Replacement Fund, • Senior Programmer Analyst (1) funded by the IT Replacement Fund,
• 0.5 FTE Office Specialist funded by the IT Replacement Fund; and
• Conversion of part-time positions to full-time (one Office Specialist and two Storekeepers in the General Fund for a total increase of 0.65 FTE).
36 STAFFING LEVELS FROM FY 2009/10 TO
FY 2022/23 PROPOSED
611
498 497
465 466 477 478 479
477 480 492 502
530
541 549
0 100
200
300
400
500
600
700
Table of Organization
(Full-time Employees)
-62 FTE, or -10%
PAVING A BRIGHTER FUTURE
TOGETHER
Achieve Long-term Fiscal Sustainability
38 • Maximize the City’s economic recovery through strategic investments in Citywide infrastructure, continually restoring staffing and service levels to pre pandemic levels;
• Restructuring to support organizational effectiveness and interdepartmental coordination;
• Development of digital service customer tools to enhance responsiveness and efficiencies;
• Provides full funding for Capital Fund and IT Replacement Fund; • Implements ongoing funding for the Equipment Replacement Fund to replace the City’s aging Fleet.
ACHIEVE LONG-TERM FISCAL SUSTAINABILITY
39 Non-Departmental Highlights
• Reduces General Fund year-over-year subsidy for the Homeless Outreach and Bridge Shelter Operations by $500K with no reduction in services • Includes annual debt service payments for Public Safety vehicles:
Fire Ladder Truck;
Fire Pumping Engine;
Mobile Command Unit; and
Proposed Police SWAT vehicle.
• Reduces Housing Authority subsidy by $500K
• Reorganization of the Homeless Outreach and Bridge Shelter Operations from the Parks and Community Services Department;
PAVING A BRIGHTER FUTURE TOGETHER
40 General Fund Reserves Overview
Fund Balance Category FY 2018/19
Audited
FY 2019/20
Audited
FY 2020/21
Audited
FY 2021/22
Estimate
Committed
Declared Disasters $14,125 $14,125 $14,125 $14,125
Self-Insurance 2,000 2,000 2,000 2,000
Economic Reserves 7,500 9,000 9,000 9,000
Assigned
Compensated Absences 4,892 5,036 5,920 5,920
Police Retirement 1% Supplemental 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 Fund Balance $51,545 $53,463 $53,492 $53,492
41 FY 2022-23 Proposed Operating and Capital
Improvement Budget Calendar
FY 2022-23 Proposed CIP Budget Study Session City Council April 26, 2022 FY 2022-23 Proposed CIP Budget Review Planning Commission May 9, 2022 FY 2022-23 Proposed Budget Study Session City Council May 10, 2022 FY 2022-23 Proposed Budget and CIP Review
Finance and Pension
Advisory Committee May 11, 2022
FY 2022-23 Proposed CIP Budget Review
Parks, Arts and Community
Services Commission May 26, 2022
FY 2022-23 Proposed Operating & CIP Budget
Public Hearing City Council June 7, 2022
FY 2022-23 Proposed Operating & CIP Budget
Special Meeting/Study Session #2, if necessary City Council June 14, 2022 FY 2022-23 Proposed Budget Adoption, if necessary City Council June 21, 2022 42