Proposed
Budget
Fiscal Year
2023/24
§ Presented By:
§Damien O’Bid, City Manager
§ Angela Courter, Director of Admin Services
City of Cotati
City Council Session May 23, 2023
1 2
Annual Budget Cycle
November-December
City Management
Budget Planning
Meetings
January
Mid-Year Financial
Performance Review
March
Budget Strategic
Planning Meetings
with Budget
Guidelines
Internal Budget
Review
April
Draft Budget Creation
and Review
Public Budget
Workshops
May/June
Budget Adoption
July-December
Financial Evaluations,
Budget Adjustments
as Approved by
Council
3 Strategic Planning Session
•Developed City Objectives/Goals
Budget Focus
•Strategic Projects
March 7, 2023
City Objectives Revisit
Budget Study Session
•General Fund
•Revenues
•Expenditures By Departments
April 4, 2023
Budget Study Session
•Special Revenues
•Internal Service Funds
•Enterprise Funds
•Capital Projects
•Transfers In and Outs
April 18, 2023
Budget Adoption
May 23, 2023
Long Term Vitality
•Balanced Budget
•Economic Development
•Affordable & Appropriate Development
•Infrastructure Preservation
•Pursue Grant Opportunities
Climate Change
•Implementing the local goals in the adopted
Climate Action 2020 and Beyond
•Community Outreach and Communication to
adapt to climate change
Community Engagement
•Promote programs or processes to improve
community awareness and participation
•Explore opportunities for neighborhood level
programs
Equitable, Compassionate & Healthy
Community
•Diversity is a Source of Strength
•Equity in Hiring/ Promoting/ Contracting
•Advance Equity & Health Partnerships
Best in Class Community Services
•Prioritize Community Safety
•Support High Quality Core Services
•Emergency Preparedness
•Update Regulations to advance priorities
•Responsive Development Services
•Participate Regionally to benefit City
•Continually Improve Service Delivery
4 Unemployment Rate*
§ The U.S. economic outlook is
still highly volatile
§ GDP for 2023 est. 2.1% vs. 5.9%
growth 2021
§ 3.3% increase in Real Personal Income
§ California economy same
instability
§ Unemployment Peak 24.5 % during Q2
2020
§ 3.6% increase in Real Personal Income
Summary
Unemployme
nt Rate April 2023 April 2022 Change
US 3.4% 3.6% -0.2%
California 4.4% 4.6% -0.2%
Sonoma* 3.6% 2.6% 1.0%
* March 2023 as April is still not Published.
5 § Economic Uncertainty
§ Federal Funds Rate Increases
§ Impacts on Investments in Development
§ Legislative Impacts from Federal, State & Regional
Government
§ Budgetary Assumptions
§ Revenues:
§ Slowing in Sales Tax and Cannabis Business Tax
§ Excludes Uncertain Development Revenues
§ Decreased Water Consumption Continuing
§ Expenditures
§ Project Cost based on Engineering Estimates
§ Increased Insurance, Unknown Final Increase
§ Utility Cost Increases of 18%
§ Full Employment
§ Continued Full Lump Sum CalPERS payment
6 • A general fund is the primary fund used by a government entity. • Used to record all resource inflows and outflows that are not associated with special-purpose funds.
• Activities being paid constitute the core administrative and operational tasks of the government entity.
7 Increase Operating Revenues of Approximately $227K for fiscal year 2023/24 Balanced Budget - Net Operating Surplus - $888 K
Total Operating Revenue - $10.3 M
Total Operating Expense - $9.4 M
General Fund is Funding $4.2M in Capital Projects
Leveraging an Additional $1.3M in Grants Matching ($5.5M total) Ending General Fund Balance of $3.7M
Budget reflects a total operating reserve of 40% exceeding the 25% requirement.
Includes initial $200k contribution to the 115 pension trust fund 8 Annual net operating surplus must be $1.5M or more to support basic maintenance/grant matching capital programs in future fiscal years. Surplus currently estimated at $0.888M in the FY 23/24 budget.
Planned mid-year discussion on CalPERS losses and associated UAL strategies that require prefunding to minimize interest costs
Park and Ride Replacement Project estimated $1.65M higher than available funding – bidding to confirm now.
9 Cotati Budget Revenues:
§ Based on best available information today
§ Estimates are always conservative
§ Sales tax and Measure G
§ Approximately 60% of General Fund Operating Revenues
§ Tax base is relatively secure – Subject to Consumer Spending Variability § Projecting Status Quo due to Weakening Spending offset by increased prices. § Primary Industry categories are Building/Construction, Fuel and Service Stations, Food and Drug, and the County Pool.
§ Property Tax
§ Approximately 20% of General Fund Operating Revenues
§ Increasing 3.2% over prior year
§ Assessor Applied CPI
§ Transfers
§ Cannabis Tax decreasing due to industry slow down post COVID 10 REVENUES 2022-2023 EST 2023-2024 PROP Incr /(Decr)
601- PROPERTY TAX $ 2,066,039 $ 2,131,758 $ 65,719 3.2% 603- SALES TAX 6,040,000 6,084,000 44,000 0.7%
604- OTHER TAX 626,450 652,300 25,850 4.1%
606- LICENSE & FRANCHISE 561,000 556,500 -4,500 -0.8%
607- RENTS 90,550 78,000 -12,550 -13.9%
608- REVENUE - OTHER AGENCIES 203,665 207,150 3,485 1.7% 609- OTHER REVENUE 91,284 50,058 -41,226 -45.2%
620- CHARGES FOR SVS 426,805 473,926 47,121 11.0%
650- INVESTMENT EARNINGS: 30,000 45,600 15,600 52.0%
660- CONTRIBUTIONS 12,000 12,000 0 0.0%
680- SPECIAL REVENUES 62,000 45,000 -17,000 -27.4%
Total Operating Revenues $ 10,209,793 $ 10,336,292 $ 126,499 1.2% 11 •2023-24 - FULL LUMP SUM PAYMENT OF THE PERS
UNFUNDED LIABILITY IN THE AMOUNT OF APPROXIMATELY
$1.2M TO REDUCE INTEREST COSTS
•INITIAL CONTRIBUTION TO 115 TRUST OF $200K
•ALLOCATED CONTRACT SERVICES
•SHARED INDIRECT COSTS SUCH AS AUDIT FEES,
JANITORIAL COSTS, UTILITIES, ETC.
•BASED ON FULL FTE
CALPERS
•USING ESTIMATES RECEIVED
•INSURANCE ESTIMATE INCREASE 18%
•MARKET UNCERTAINTY
CONTRACT
SERVICES
EVALUATION
•ESTIMATES ARE BASED ON EXISTING STAFFING
•INCLUDES ALL NEGOTIATED MOU CHANGES
•EVALUATING STAFFING LEVELS
INSURANCE
INCREASES
ALL DEPARTMENTS
ARE BUDGETED AT
FULL STAFFING
12 EXPENSES
2022-2023
Adopted
Budget
2022-2023
Estimated
Actual
2023-2024
Proposed
Budget Incr /(Decr)
CITY COUNCIL $ 152,689 $ 184,461 $ 170,457 $ (14,004) -7.6% CITY MANAGER 645,775 673,381 741,811 68,430 10.2%
ADMINISTRATIVE SERVICES 443,068 443,274 508,290 65,016 14.7% COMMUNITY DEVELOPMENT 1,064,569 858,539 1,115,760 257,221 30.0% PUB WORKS-COMBINED 1,399,279 1,379,923 1,400,181 20,258 1.5% POLICE 4,652,725 4,421,173 5,017,822 596,649 13.5%
RECREATION 388,489 429,957 449,530 19,573 4.6%
CODE COMPLIANCE 46,000 78,090 43,975 (34,115) -43.7%
Total Operating Expenses $ 8,792,594 $ 8,468,798 $ 9,447,826 $ 979,028 11.6% 13 Refresher - No significant change from Strategic Planning City Council – Increased Health Insurance and Training
- Decrease Contracts and Other Expenses
City Manager includes the following changes:
New Professional and Special Project Contracts $25K
Administrative Services includes the following changes:
Increase due to additional Staffing increasing FTE allocations Community Development change is primarily due to:
Increased Permit Expense by $50k
Special Project Contracts (Santero Way and Bike Ped.)
14 Public Works: includes the following changes:
Movement of annual landscape improvement to Annual Capital Project Increased Parks Contract Services
Police Services includes the following changes:
Additional costs for a new records/crime analyst position Additional Costs for training and related overtime.
Significant other expenses include allocated insurance
Recreation includes the following changes:
Allocated insurance and bank fees
15 Transfer In for:
COPS Grant = $100,000
Public Safety Prop 172 = $70,000
Community Facilities District
Refund = $32,000
Transfer Out for:
Capital Projects Funds = $1,254,000
Grants Fund 201 = $2,986,021 (Matching
for $2,219,914 in Grants)
Debt Services Payments = $810,875
K-9 Fund = $30,340 Measure S Funding
for Program
16 17
Grant Project Summary *
Redwood Drive - $2,996,253
Sunflower Park - $1,055,000
Sidewalk Gap Closure - $220,000
Highway 116/West Cotati Ave. - $544,000
Wastewater System Emergency Generator (grant only) - $256,200 Kotate Park Completion - $166,211
*Funded by grants and city matching funds
18 Other City Project Summary:
Parks
Putnam Park Design. - $185,000
Falletti Ranch Barn Design - $150,000
Cator Field Improvements - $100,000
Streets
2024 Street Improvement Project - $601,000
Gateway Signage & Marquee - $83,000
Bicycle & Pedestrian Improvements $50,000
Landscaping Improvements - $35,000
Building
Civic Center Parking Lot Improvements - $250,000
19 Special Revenue Funds are a group of accounts established by a government for restricted use to ensure that certain revenue sources are used or earmarked only for their specific purpose.
This Special Revenue Fund type may be used to account for the proceeds of specific revenue sources that are legally restricted or restricted by City Council policy for a specified purpose. 20 - Other revenues are primarily Development fees for as well as RMRA funds.
By Fund
21 - Other revenues are primarily Development fees for as well as RMRA funds.
By Type
22 By Type
- Primarily expenditures are transfers out for capital projects. 23 Vehicle Maintenance & Replacement
§ Provides an ongoing funding source for scheduled
replacement of City vehicles from billings to other funds who are utilizing the fleet.
§ Continued Investment of $337K includes
§ Replacement of Two Police Interceptor SUV’s
§ Evaluating fuel efficient/environmentally friendly vehicles § Pending Public Works Flatbed Dump Truck Replacement
§ New Equipment- Various as needed
§ Repairs & Maintenance of Existing Fleet
Compensated Absences Fund
§ Funds compensated absences with contributions made
based on a proportionate and rational allocation of the total government wide liability.
§ Balances are increased to address estimated changes in Salaries and Benefits Schedules
24 Enterprise Funds are used to account for operations that are financed and operated in a similar manner as a private business enterprises, where the intent is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges.
25 Maintains a
reserve of 33% of
operating
expenses
Rate change per
the rate study
for water &
sewer
Conservative
Revenue and
Expenditures
Estimates
Continued focus
on infrastructure
improvements
and preservation
26 § Operating Revenues –Rate
Increase – No significant
Connection Fees
§ Proposed Capital Project
Improvements:
§ SCADA Server Upgrade & Relocation
- $115,000
§ Water Hydrant ATM - $75,000
§ Well 1A Maintenance - $42,500
§ Changes in Operating
Expenditures:
§ Reduced expenses small tools and
equipment and capital fixed assets.
§ Approximately 11% reduced costs
for Aqueduct Water Usage
§ Increases utilities, specifically;
electricity, internet, phones as well
as contract services.
§ Continued conservation programs.
27 § Operating Revenues –Rate
Increase – No significant
Connection Fees
§ Proposed Capital Project
Improvements:
§ SCADA Server Upgrade &
Relocation - $115,000
§ Cypress Sewer $580,000
§ Changes in Operating
Expenditures:
§ Allocated Expenses
Increased
§ Wastewater treatment
Status Quo
§ Debt Service back to
General Fund
28 Conclusion
The Proposed FY 2023/24 Budget:
Prioritizes Community Engagement, Long Term
Vitality, Best in Class Community Service
Initiation of actions towards address Climate
Change and Equality
Balanced Operating Budget
Operating Expenditures Do Not Exceed
Conservatively Estimated Operating Revenues
Continued Significant Investments in Historically
Deferred Capital Project
Need to improve operating costs/expenses to
fund future FY on-gong capital program
Fiscally Prudent
The General Fund Reserves To 40%
City staff are committed to exercise prudence
and integrity in the management of public
funds and provide transparency and
accountability in its use.
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