Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council/Successor Agency to the Former Cotati Community Redevelopment Agency
Subject: Adoption of Resolutions Approving the Fiscal Year 2022/23 Budget and Updated Multi-Year Capital Improvement Plans
Date: June 28, 2022
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council Adopt Resolutions Approving the City of Cotati Fiscal Budget for Fiscal Year 2022/23 and the corresponding Updated Multi-Year Capital Improvement Plans.
Background
The City Council held a Strategic Planning Study Sessions on February 15, 2022, where the City Council, the public, and staff reviewed and updated the goals and objectives, as well as the project priorities for Fiscal Year 2022/2023.
Subsequently, the City Council held two Budget Study Sessions, on April 19 and May 17, 2022, to review the draft proposed Fiscal Year 2022/23 budget, take public comment, and provide direction to staff.
City Staff have been continuing work to improve the City’s second online budget book that is available to the public at:
https://city-cotati-ca-budget-book.cleargov.com/4249/introduction/transmittal-letter Analysis/Discussion
Budget Summary
Following the review of the Draft Budget presented to the City Council, there were only minor corrections and updates made to the projections.
Highlights of the overall FY Budget are;
• Conservative 2022/23 budget outlook as the economy continues to improve but with significant uncertainty due to local impacts due to national and global events including continued effects of Covid-19 and the related Federal Fiscal Stimulus as well as the Russian/Ukraine War. Across the state and locally we are currently impacted by increased inflation, supply chain disruptions, housing stock shortage with continued price increases, and lower unemployment rates causing increased competition for staffing and increased turnover. However, indications are that the economy is cooling with the Federal Reserve aggressively raising rates to counter inflation. City staff are dedicated to continuing close monitoring of key revenue sources and expenditure management. • Balanced budget maintaining prudent fund balances.
• Continue to prioritize economic development, infrastructure, and community.
General Fund Highlights:
• Balanced Operating Budget for the 14th straight year. • The General Fund Operating Revenue exceeds Operating Expenditures by approximately $1.3M.
• Some key operating expenditures include (1) funding of $225,000 in vehicle repairs and replacements, (2) funding $809,000 in debt service for the unfunded pension liability and Streets Lease Bond Funds, (3) $640,000 in insurance, (4) over $63,000 in administrative fees to other districts (State, County, etc.). • The General Fund maintained reserve of 25% of operating expenses, per Resolution No. 2009-50.
• General Fund has additional reserve of $2.4M for a total reserve of 53% of the proposed operating expenditures.
• General Fund Ending Fund Balance of $4.6M
Capital Projects Highlights:
The proposed City budget includes General Fund funding of $3.7M, for a total of $14.0M in capital projects (All funds) to improve the community, including:
• Mosaic Wall Bench Installation
• Bike/Ped Safety Projects
• ORH Traffic Flow Improvements
• Gateway Signage
• 2020 Street (Quick Strike)
• Marsh to McGinnis Pathway
• 2023 Pavement Preservation
• 2023 Pavement Rehabilitation
• Hwy 116/W. Cotati Ave Design
• Redwood Dr. & Cypress Design
• Kotate Park Improvements
• Pocket Park Improvements
• Putnam Park Design
• Civic Center Windows & Repairs
Other highlights include a new proposed annual allocation for landscape refurbishment ($35,000 parks and $35,000 streetscapes), intended to replace landscaping at existing locations. Every plant/tree has a natural life cycle and historically the City has only removed dead plants without a program to replace them. This is similar to the on-going annual safety programs for general sidewalk repairs ($16,500) and general pedestrian/bicycle/vehicle safety projects ($50,000).
Additionally, the City is also budgeting for $25,000 in landscape refurbishment in the Altman Acres LLAD, as well as continued work on gateway signage monument design and construction of gateway pole signage at minor entries into the City for $100,000. The budget also continues to include $125,000 to support licensee activities for public programming at the Veronda Falletti Ranch.
Internal Service Funds Highlights:
Vehicle Maintenance and Replacement
• $361,000 in funding across City Funds based on fleet usage. • Purchase of replacement police vehicle and various public works equipment and vehicles as needed.
• Evaluation of all-electric vehicles for replacements going forward, as applicable.
Compensated Absences Fund
• $120,000 funding provided by City wide allocation costing.
Enterprise Fund Highlights:
• The Enterprise Funds budget includes a combined $2.0 Million in various water and sewer capital projects including:
• P-1: Portal Street, Mercantile, Aaron Main Replacement • SCADA Water/Sewer
• West Sierra Avenue Sewer Main Replacement
The Budget document attached to the resolution contains narrative summaries for each department, the City Managers message, and some of the graphics from the budget presentations.
Financial Considerations
Despite the economic uncertainty, the City has continued strategic projects and not significantly reduce the reserve funds. The recommended budget includes a General Fund that is balanced with the estimated annual operating revenues exceeding the budget operating expenditures.
Infrastructure in the general fund is supported with reserves from FY 21/22. However, staff are continuing to search for matching grants.
Overall fund total reserve is estimated to be approximately $4.6M, or 53% of operating expenditures. This is an improvement over prior years adopted budget which was estimated at $3.9M or 47% of operating expenses.
Environmental Issues
Not applicable.
Attachments:
Presentation for Fiscal Year 2022/23 Proposed Budget (PPTX) Budget in Brief FY 2022-2023 (PDF)