Fairview Nature Park
Vernal Pools
White-Faced Ibises
American Kestrel
Restoration Event – Saturday, April 8th
9:00 – 11:00am
Fairview Nature Park
Costa Mesa’s Home to Biodiversity
Incredible Opportunities for local schools
and for the whole community to enjoy!
Sweat Bee photo by Bettina Eastman
New fence
installed
Reduces area
available to
residents for
recreation by
more than 90%
June 6, 2023
City Council Public Hearing
Proposed Operating and
Capital Improvement Budget
FY 2023-24
“The Art of
Collaboration”
3 FY 2023-24 PROPOSED BUDGET OVERVIEW
FY 2023-24 All Funds Highlights
General Fund Reserves Estimates
FY 2023-24 GANN Appropriations Limit
4 GUIDING PRINCIPLES
FY 2023-24 Proposed Budget was inspired by
the five 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
6 The Art Of Collaboration
The theme of the Fiscal Year 2023-24 Proposed Budget is “The Art of Collaboration” through the following:
• Structurally balanced General Fund budget;
• Strengthening the City’s commitment to public safety by dedicating 52% of General Fund resources;
• Investing in the City’s parks, streets, active transportation network, facilities, and other infrastructure;
• Implementing seed money for the acquisition of park space in the Park Land Acquisition Fund; and
• Setting aside $1.0 million for anticipated debt service for the rehabilitation for the aging public safety infrastructure.
8 FISCAL YEAR 2023-24 ALL FUNDS
$234 MILLION
General Fund,
$180.3 M, 77%
Special Revenue
Fund,
$25.2 M,
11%
Capital Projects
Fund,
$14.6 M,
6%
Internal
ServiceFund,
$13.9M, 6%
9 FISCAL YEAR 2023-24 ALL FUNDS
$234 MILLION
Category
FY 2022-23
Adopted
Initial
FY 2023-24
Proposed
FY 2023-24
Proposed
Recommended
Changes
Revised
FY 2023-24
Proposed
Proposed Vs Adopted
Increase/(Decrease)
Amount Percent
Operating
Budget $170,215,673 $187,491,589 $857,476 $188,349,065 $18,133,392 11% Transfers Out 10,627,990 14,198,326 384,576 14,582,902 3,954,912 37% Capital Budget 25,312,023 31,081,719 31,081,719 5,769,696 23% Total $206,155,686 $232,771,634 $1,242,052 $234,013,686 $27,858,000 14% 10 FISCAL YEAR 2023-24 PROPOSED BUDGET
ALL FUNDS RECAP
Highlights:
• Structurally balanced General Fund budget without the use of reserves or ARPA Funds;
• Designates $94M, or 52%, in General Fund resources to public safety; • Invests $31.1M into the City’s parks, streets, active transportation network, facilities, and other infrastructure; and
• Annualizes recently negotiated employee contracts that bring compensation to market (i.e. average) levels in order to retain and recruit high quality staff. 11 ALL FUNDS
A total of $857,476 as follows:
• Includes $40,000 in ARPA for Meals on Wheels, Families Forward, and Labor of Love programs; and
• Commits $300,000 in Rental Assistance from ARPA funds for undocumented and other high risk populations; and
• Transfers $384,576 from the Capital Improvement Fund to the Park Land Acquisition Fund to begin setting aside funding for park acquisition, design, and construction on the Westside and other park poor areas; and • Fully funds Year 3 of the Arts and Culture Master Plan with an additional $132,900 for a total of $353,996 to fund Year 3 of the Plan.
FY 2023-24 ALL FUNDS
ADJUSTED RECOMMENDATIONS
12 SPECIAL
REVENUE FUND
• Allocates ½ percent of the seven percent Cannabis Retail and Delivery Tax (Measure Q) funding for year three of the Arts and Culture Master Plan, and • Due to insufficient revenues received, City staff will be requesting a one year bridge to use current year (FY 2022-23) savings to cover the shortfall. • Requesting to implement a new policy to fund the differential amount from available General Fund Cannabis revenues into the Arts and Culture Master Plan Fund when a shortfall exists from the insufficient Cannabis Measure Q revenues in the outyears.
Arts and Culture Master Plan
13 INTERNAL
SERVICE FUNDS
Includes ongoing revenue of $2.8 million to support the replacement and maintenance of City fleet for $5.8 million. Below are the highlights, purchase, and replacement of:
• Two replacement Fire Pumper apparatus with the use of CDBG funding and the City’s Master Lease;
• Replace aging Public Works fleet of a water truck, stake bed, sign truck, street stencil truck, and asphalt rollers to maintain our City streets via the City Master Lease equipment; and
• Includes $1.0 million for 16 Police vehicles.
Equipment Replacement Fund
INTERNAL SERVICE
FUNDS
• Information TechnologyReplacement Fund
• Investment for Year 4 of the Information TechnologyStrategic Plan (ITSP) for $3.1M, including:
• Adds one full-time Cyber SecurityAnalyst (NetworkAdministrator); • $300K budgeted for the Finance ERP Purchasing Module; • $1.5M for year one of the CAD RMS Public Safety System replacement; and, • $250K for Document Imaging Database System to house the City’s contracts, plans and other documents electronically;
• Self Insurance Internal Service Fund
• $250k in additional funding for ongoing administration costs.
Information TechnologyReplacement &
Self Insurance Funds
14 15
CAPITAL IMPROVEMENT AREAS
Facilities
$3,832,800
Parks
$15,290,000
Parkways& Medians
$375,000
Streets
$5,980,829
Transportation
$5,603,090
17 ALL FUNDS
Parks and Community Services
Proposed CIP ($31.1M):
• Ketchum-Libolt Park expansion;
• Shalimar Park expansion;
• Lion’s Park Cafe;
• Skate Park expansion;
• Fairview Park Restoration and Improvement;
• Fairview Road at Belfast Avenue New Traffic Signal; and, • Costa Mesa Country Club Modernization and Grounds Improvements Capital Improvement Fund includes a Transfer Out of $384,576 to the Park Land Acquisition Fund for the Westside part of the City.
Public Works
Street Sweeping Contract Increase of $720,000 funded by the Gas Tax Fund.
IMPROVE THE QUALITY OF LIFE
18 Energy and Sustainability:
Funds one new Planning and Sustainable Development Manager (mid-year); Funds one new Management Analyst (Solid Waste Coordinator) from revenue generated by SB1383.
Active Transportation $4.1M in the CIP
• Safe Routes to School ($0.6M)
TeWinkle Park lakes repairs ($2M);
Invests an additional $150K for tree planting and maintenance; Initiates Climate Action Adaptation Plan study;
Upgrades Jack Hammett Sports Complex lighting upgrade (LED); Upgrades TeWinkle sports fields lighting upgrades (LED).
ALL FUNDS
ADVANCE ENVIRONMENTAL
SUSTAINABILITY AND CLIMATE RESILIENCY
19 • Effective January 1, 2022, AB 481 mandates all California law enforcement agencies must:
• Write an AB 481 equipment policy
• Compile an inventory list
• Ensure both are available to public on local webpage
• Notify local governing body 30-days prior to approval • Obtain formal approval by governing body through ordinance of both the policy and equipment list
• Review/approve annually by local governing body (approval more often if changes are made)
• City of Costa Mesa Annual AB481 Report posted on the Costa Mesa Police Department website on May 5, 2023.
POLICE
AB 481 OVERVIEW
20 • Costa Mesa offers community celebrations, festivals, and parades that provide opportunities for social activity, cultural experience, and engagement in public life.
• These events need the assistance of City personnel.
• Every year, City Council approves updated special event rates. • Staff is requesting the approval of the Revised Special Event Rates.
ALL FUNDS
FY 2023-24 SPECIAL EVENT RATES
22 • Structurally balanced General Fund Budget without the use of ARPA or General Fund Reserves;
• Maximized City’s economic recovery through strategic investments in Citywide infrastructure;
• Restructured to support organizational effectiveness and interdepartmental coordination, including added staff to expedite permitting and increasing staffing in key areas to enhance public safety and customer service;
• Provided full funding for Capital Fund (CAN) and IT Strategic Plan; • Corrected previous deficit in the Equipment Replacement Fund to ensure more timely replacement of the City’s aging Fleet;
• Included an additional $1.0M in debt payment for the reconstruction of Fire Stations #2 and #4, and Police Westside Substation.
GENERAL
FUND
GENERAL FUND OVERVIEW
23 General Fund Overview
(FY 2022-23 Adopted vs. FY 2023-24 Proposed)
23*This is an estimate – final audited numbers will not be available until December 2023 Category
Adopted vs. Proposed
Adopted Amended* Proposed Increase/(Decrease)
FY 22/23 FY 22/23 FY 23/24 Amount Percent
Estimated Revenues $163.6 $175.0 $179.4 $15.8 9.66%
Transfers In - - 0.9 0.9 100%
Use of Fund Balance - - - - 0%
Total Sources of Funds $163.6 $175.0 $180.3 $16.7 10.21% Operating Budget $153.0 $158.9 $167.2 $14.2 9.28%
Transfers Out 10.6 12.1 13.1 2.5 23.58%
TotalExpenditures $163.6 $171.0 $180.3 $16.7 10.21%
TotalEstimated
Surplus/(Deficit)*
- $4.0 -
24 General Fund Overview
(FY 2022-23 Amended vs. FY 2023-24 Proposed)
24 *This is an estimate – final audited numbers will not be available until December 2023 Category
Amended vs.
Proposed
Adopted Amended* Proposed Increase/(Decrease)
FY 22/23 FY 22/23 FY 23/24 Amount Percent
Estimated Revenues $163.6 $175.0 $179.4 $4.4 2.69%
Transfers In - - 0.9 0.9 100%
Use of Fund Balance - - - -
Total Sources of Funds $163.6 $175.0 $180.3 $5.3 3.24%
Operating Budget $153.0 $158.9 $167.2 $8.3 5.42%
Transfers Out 10.6 12.1 13.1 1.0 9.43%
TotalExpenditures $163.6 $171.0 $180.3 $9.3 5.68%
TotalSurplus/(Deficit)* - $4.0 -
25 FY 2023-24 PROPOSED
GENERAL FUND REVENUE
Property Tax
$54.4 M (30%)
Sales Tax
$82.5 M (46%)
Hotel Tax
$9.6 M
(5%)
Other Taxes
$9.7 M (5%)
Licenses&Permits
$ 4.7 M (3%)
Fines&
Forfeitures
$1.1 M (1%)
Use of Money
&Property
$4.6 M (3%)
Other Gov't
Agencies
$0.9 M (0.5%)
Fees&Charges
$9.7 M (5%)
Operating Transfer In
$0.9 M (0.5%)
Other Revenues
$2.3 M (1%)
$180.3M
26 City Council
0.42% City Manager
4.81%
City Attorney
0.58% Finance
3.10%
Parks and Comm
Svcs 4.75%
Information
Technology
3.28%
Police
32.50%
Fire and Rescue
19.85%
Development Svcs
5.14%
Public Works
12.45%
Non Departmental
13.12%
STRENGTHEN THE PUBLIC’S SAFETY
Public Safety Represents 52% of General Fund
Dept FTE Classification Justification
Information
Technology 1.00
Cybersecurity Analyst (funded by
the IT Replacement Fund)
Updates and secures the City's technological infrastructure to protect and prevent from potential data compromise.
Finance 1.00 Business License Inspector
Ensures compliance for businesses within city limits. With the new land management system program, additional businesses will be discovered and will require outreach.
Public Works
1.00 Associate Engineer Expedites the preparation and processing of permits to ensure timely issuance.
1.00 Management Analyst (Solid
Waste Coordinator)
Addresses upcoming State regulations and requirements, full revenue is generated from SB1383. Manages Citywide waste collection and recycle programs.
Police 1.00 Animal Services Supervisor* To oversee the new Animal Services Program as result of the consolidation of the Animal Care Services and Animal Control Program.
Total 5.00
GENERAL
FUND
RECRUIT AND RETAINHIGH-QUALITY STAFF
Requested New Positions
27 * This position is a new request since the May 9, 2023 Proposed Budget Study Session Dept FTE Classification Justification
Parks &
Community
Services 1.12 Recreation Specialists: Convert four part-time positions Assists with the retention of hard to fill positions, responsible for assisting the day-to-day supervision of Recreation programs.
Police
0.25 Property and Evidence Specialist: Convert part-time (0.75)
Addresses additional enforcement due to expected increase in non- compliant dispensaries.
0.25 Convert a Community Services Specialist (0.75) to full time Crime Analyst
Provides support for crime mitigation analytics to respond more efficiently and appropriatelyto emergent public safety issues.
0.50 Animal Control Officer: Covert part-time (0.50)
Allows for additional animal control enforcement due to increased call volume and community expectations for proactive enforcement of issues.
City Manager’s
Office 0.25 Video Production Specialist: Convert part time (0.75) Enhances the City’s communication and public engagement strategies for City initiatives and special events.
Public Works 0.25
Maintenance Worker (0.75) to full time Equipment
Mechanic (funded by the Equipment Replacement Fund)
Assists with retention of hard to fill positions and address increase demands of workload due to aging fleet.
City Manager’s
Office/Housing
Authority 0.25 Management Aide: Convert part time (0.75) * Supports increasing homeless outreach services.
Total 2.87
GENERAL
FUND
RECRUIT AND RETAINHIGH-QUALITY STAFF
Part Time Conversions to Full Time
28 * This position is a new request since the May 9, 2023 Proposed Budget Study Session “THE ART OF
COLLABORATION”
FY 2023-24 APPROPRIATIONS LIMIT
30 FY 2023-24 Appropriations Limit Calculation
Article XIIIB of the Constitution of the State of California provides a formula that places annual limits (or ceilings) on the appropriation of tax proceeds that can be made by the state, school districts, and local governments in California.
Article XIIIB requires state and local governments to return any funds to taxpayers in excess of the amount (appropriation limit) for a given fiscal year.
• Multiplies the following data points:
• California Per Capital Income Percentage Change of 4.44%; • City of Costa Mesa Population Growth of -0.42%
• Orange County Population Growth of -0.46%;
• Fiscal Year 2022-23 Appropriations Limit of $286,881,520; and • Fiscal Year 2023-24 Appropriations Limit of $298,356,781. 31 FY 2023-24 Appropriations Limit
Established FY 2023-24 Appropriations Limit is: $298.4 million. Estimated FY 2023-24 general tax proceeds revenues is $156.4 million:
• Property Tax: $54.5 million
• Sales Tax: $82.5 million
• Transient Occupancy Tax (TOT): $9.6 million
• Other Taxes (Franchise Fees): $6.6 million
• Cannabis Tax (Measure Q): $3.1 million
• Motor Vehicle In-Lieu Tax: $0.1 million
The above estimate is $142 million or 47.6% below the Appropriations Limit. “THE ART OF
COLLABORATION”
Achieve Long-Term Fiscal Sustainability
33 FUND BALANCE IN THE GENERAL FUND
(IN THOUSANDS)
Fund Balance Category
FY 20/21
Audited
FY 21/22
Audited
FY 22/23
Projected Difference
Committed
Declared Disaster $14,125 $14,125 $14,125 -
Self Insurance 2,000 2,000 2,000 -
Economic Reserves 9,000 9,000 9,000 -
Assigned
Compensated Absences 5,920 5,584 5,584 -
Police Retirement 1% Supplemental
Plan
2,275 1,885 1,885 -
Workers’ Compensation - 1,000 2,000 1,000
Facilities Reserve - 2,000 2,000 -
Strategic Plan Projects - 2,000 2,000 -
Restricted
Pension and OPEB 1,778 3,061 4,561 1,500
Non-Spendable 965 604 604 -
Unassigned 17,429 16,517 18,017 1,500
TOTAL $53,492 $57,776 $61,776 $4,000
34 • FY 2022-23 General Fund estimates $4.0 million in year end savings; • Allocates $1.5 million in year end savings towards the Section 115 Trust pension liability;
• Staff recommends depositing an additional $1.0 million into the Workers’ Compensation designated Fund Balance category to fully fund one Self Insurance Retention (SIR) claim;
• Request forthcoming to transfer $700k to $3.0 million to the Housing Authority Fund for the visioning and rezoning work for the Sixth Cycle General Plan Housing Element Program Implementation from available year-end savings, if any; and
• Request to cover the prior years’ shortfall of an estimated $282,000 in the Arts and Culture Master Plan.
FY 2022-23 YEAR-END OUTLOOK
35 FY 2023-24 Budget Calendar
FY 2023-24 Proposed CIP Budget Study Session City Council April 11, 2023 FY 2023-24 Proposed CIP Budget Study Session
Finance and Pension Advisory
Committee April 12, 2023
FY 2023-24 Proposed Budget Study Session City Council May 9, 2023 FY 2023-24 Proposed Budget and CIP Review
Finance and Pension Advisory
Committee May 10, 2023
FY 2023-24 Proposed CIP Budget Review
Parks and Community Services
Commission May 11, 2023
FY 2023-24 Proposed CIP Budget Review Planning Commission May 22, 2023 FY 2023-24 Proposed Operating & CIP Budget
Public Hearing City Council June 6, 2023
FY 2023-24 Proposed Operating & CIP Budget
Study Session #2, if needed City Council June 13, 2023
FY 2023-24 Proposed Budget Adoption, if needed City Council June 20, 2023 “THE ART OF
COLLABORATION”
QUESTIONS
City of
COSTA MESA
User and Regulatory Fee Schedule
City Council | June 6, 2023
• Background
• Recommendations
• Fiscal Impact
• Procedures for Adoption
MEETING AGENDA
2 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
Background
• Cities collect fees and charges for government
services performed at the request of, or specifically
for, a particular individual, business, or group… as
opposed to services performed for the community as
a whole
• Many cities maintain a listing of fees in a consolidated schedule, often referred to as a Master Fee Schedule
BACKGROUND
4 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
• In 2008, the City adopted a consolidated schedule of
user and regulatory fees.
• However, over time the City has made periodic
updates to fees, but the City’s various fee schedules
are no longer maintained in a consolidated format.
• Staff recommends resuming use of a Master Fee
Schedule for improved transparency and ease of
reference.
BACKGROUND
5 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
• A Master Fee Schedule provides:
• More Effective Communication With the Public
• More Consistent Ongoing Review of Fees (some fees have not been adjusted in more than a decade)
• Transparency with a Single Repository for Current Fees • The primary action outlined in the resolution is
simply consolidating the City’s various existing
fees into one consolidated document
RECOMMENDATION – CONSOLIDATED FEE SCHEDULE
6 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
• In 2018, the City Council authorized the annual
adjustment of building fees to align to the change in a regional consumer price index (CPI).
• Existing adjustment is based on “May to May” annual CPI change.
• Staff recommends using “Prior Calendar Year Annual
Change” instead of “May to May” change. This will allow staff additional time to process updates and provide
enhanced information for developing budgetary forecasts.
ANNUAL ADJUSTMENT OF FEES
7 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
• Additionally, City Council may recommend to adjust
other fees by the change in regional CPI.
• Potential fees eligible for Annual Adjustment are marked as “Y” (Yes) in the fee schedule. This list was reviewed by FiPAC.
• Typically, development related fees such as entitlement review, land development engineering, and construction review and permitting. • Fees NOT proposed for adjustment are marked as “N” (No) in the fee schedule.
• Primarily Recreation and Facility Rental Fees
• Fees limited by State Law
ANNUAL ADJUSTMENT OF FEES
8 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
• It is best practice to perform a full cost of service study approximately every three to five years,
therefore, staff anticipates to resume this practice
starting in the upcoming fiscal year
COMPREHENSIVE FEE STUDY
9 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
• Fiscal Impact will be determined based on City Council direction
• Consolidation of Fee Schedule: $0 (No fiscal impact)
• Adjustment of Certain Fees by CPI but no greater than 5%:
$200,000
• The revenue is not intended to be used to fund new
services, rather to offset the costs of providing
existing services that are legally recoverable from
fees.
FISCAL IMPACT
10 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
• Approve consolidated schedule of fees
• Determine whether to modify timing of inflationary
adjustments to previous calendar years (i.e.
December to December)
• Determine whether to apply inflationary adjustments
to eligible fees considered by FiPAC
RECOMMENDED ACTION
11 CLEARSOURCE PRESENTATION TO THE CITY OF COSTA MESA
Questions or Feedback
Business Improvement Area Reauthorization
and Levy Annual Assessment
June 6, 2023
Background
• State law mandates (Streets and Highways
Code § 36533) specific procedures to be
followed in the establishment of a business
improvement area and the levying of a
voluntary annual assessment.
• May 5, 2023: City Council adopted Resolution
No. 2023-19, declaring the intention to levy an
annual assessment for FY 2023-2024 and set a
Public Hearing on June 6, 2023, City Council
meeting.
• City levies a three percent (3%) special
assessment on the eleven (11) participating
hotels.
BIA Reauthorization and Levy of Annual
Assessment
• Participation in the BIA is voluntary.
• FY 2023-24, the proposed levy amount is three percent (3%)
• TCM receives 99%
• City receives 1%
• Since 2014, TCM has provided funding to the City to
support community-wide marketing efforts and
community events that attract many visitors to Costa
Mesa.
• Reinstatement of TCM funding for City signature
community events and marketing efforts for an annual
total of $164,000 for FY 2023-24.
Recommendations
Staff recommends the City Council:
1. Conduct a public hearing regarding the Business
Improvement Area (BIA) reauthorization and levy
of the annual assessment for Fiscal Year 2023-
2024.
2. Adopt Resolution 2023-xx, confirming the annual
report filed by Travel Costa Mesa and levying an
annual assessment for Fiscal Year 2023-24 for
the Business Improvement Area covering certain
Costa Mesa hotels and motels.