Agenda #: 7.1
Meeting Date: February 20, 2024
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: FISCAL YEAR 2023-24 MID-YEAR BUDGET REVIEW.
STRATEGIC
GOAL: Responsible Stewardship of Public Resources
RECOMMENDATION:
A. Adopt Resolution No. 2024-05 amending the Fiscal Year 2023/24 Municipal Budget revenue estimates and appropriations; and,
B. Adopt Resolution No. 2024-06 amending the City’s Fiscal Year 2023/24 Compensation Plan.
FINANCIAL IMPACT:
The Fiscal Year (FY) 2023/24 Mid-Year budget review proposes a total increase in estimated resources of $795,340 and a total increase in appropriations of $592,230 for all funds (see table below). The impact for the General Fund is an estimated addition of $431,610 to the General Fund’s fund balance.
Proposed revisions to resources and appropriations, including estimated fund balances at the end of the current FY 2023/24 are included in the attached Exhibit A (Attachment 2), and are discussed throughout the report as summarized below:
FY 2023/24 Recommended Mid-Year Adjustments
Fund Resources Appropriations
Addition/(Use)
of Fund
Balance
General Fund $ 759,340 $ 327,730 $ 431,610
Other Governmental Funds
General Plan Revision Fund (103) - 7,500 (7,500)
Technology Reserve Fund (104) - 36,000 (36,000)
Measure W Fund (201) - 101,000 (101,000)
Prop. A Fund (206) - 8,000 (8,000)
TDA Fund (209) - 40,000 (40,000)
Measure M Fund (203) - (40,000) 40,000
Internal Service Funds
Vehicle Maint./Repl Fund (502) - 11,000 (11,000)
Equipment Repl./Maint. Fund (503) 36,000 36,000 -
Bldg. & Facility Maint. Fund (504) - 65,000 (65,000)
Total $ 795,340 $ 592,230 $ 203,110
BACKGROUND:
The City Council adopted Resolution No. 2023-16 on June 6, 2023 approving the FY 2023/24 Adopted Budget. The City Council has since approved additional appropriations as they have occurred throughout the year, as well as carry-over requests from FY 2022/23. It is City policy for staff and the City Council to periodically review the annual budget and make any additional adjustments as deemed necessary.
Staff has conducted the mid-year review of the FY 2023/24 Adopted Budget, evaluated current revenue and expenditure trends, and confirmed the status of capital improvement projects. Based on this review, a Resolution amending the FY 2023/24 Adopted Budget is proposed for City Council consideration.
ANALYSIS:
The City’s current Revised General Fund Budget for FY 2023/24 estimates anticipated resources to be $30,614,475. It is recommended that these resource estimates be increased by $759,340 to $31,373,815. The current Revised General Fund Budget for FY 2023/24 includes appropriations totaling $36,775,318 (Adopted Budget plus City Council amendments and carryovers). It is recommended that this budget be increased by $327,730 to $37,103,048. As a result of these actions, the General Fund’s fund balance reserves will increase by $431,610. If approved, these recommended changes in estimated resources and uses are expected to leave the General Fund with an unassigned fund balance of $18,643,982 and a 25% contingency reserve balance of $7,981,243 at the end of the fiscal year, which reflects a decrease of $5.73 million in unassigned fund balance from the prior year ending June 30, 2023. As mentioned in previous reports to the City Council, the utilization of unassigned fund balance in the amount of $5.73 million will fund the transfer-out of 80% of the prior year’s surplus to reserve accounts dedicated to facilities and parks, as well as appropriations for new FY 2023/24 one-time capital projects and carryover appropriations for ongoing capital projects.
FY 2023/24
Changes to the General Fund Budget
FY 2023/24 Council Budget Recommended Total
Adopted Approved Carryovers Mid-Year Revised
Budget Amendments (from prior year) Adjustment Budget
Resources
Revenues & Transfers-In $ 30,614,475 $ - $ - $ 759,340 $ 31,373,815 Uses
Exenditures & Transfers-Out 31,924,971 3,374,506 (b) 1,475,841 (c) 327,730 $ 37,103,048 Fund Balance Impact
Increase/(Decrease) (1,310,496) (a) $ (3,374,506) $ (1,475,841) $ 431,610 $ (5,729,233) Ending Unassigned Fund Balance June 30, 2024 $ 23,062,719 $ 18,643,982 25% Emergency/Contingency Reserve Balance 7,981,243 7,981,243 Total Fund Balance June 30, 2024 $ 31,043,962 $ 26,625,225 (a) Adopted Budget includes use of $1.3mm fund balance for one-time projects and CIPs (b) Includes $2.4mm in reserve funding for Park Dev. Fund (262) and Bldg. Maint Fund (504) (c) Includes $1.3mm in carryover funding for CIPs
General Fund Revenues:
In preparation for the mid-year budget review, staff examined the City’s revenue sources to ensure valid revenue estimates based on current trends and activities. The below table includes a summary of proposed changes to the General Fund revenue estimates. Included within the revised estimates is an increase in sales tax revenues consistent with current trends, an increase in Diamond Bar Center rental revenues due to increased rental activity, and an increase in cost reimbursement revenue for the cost to prepare the City’s Housing Element. All other revenue sources are currently trending as anticipated in the Adopted Budget.
FY 2023/24 Mid-Year Adjustments
General Fund Revenues
REVENUE SOURCE AMOUNT DESCRIPTION
Sales Tax $ 500,000 Additional revenue from County Pool and Business/Industry Category Diamond Bar Center Rentals 100,000 Rental activity consistent with prior year Cost Reimbursements 159,340
In March 2020, the California Department of Housing and Community Development (HCD) awarded the City a $160,000 Planning Grant from the Building Homes and Jobs Trust Fund (SB 2) to offset the City’s costs to prepare the Sixth Cycle Housing Element. In September 2023, the City submitted an invoice to HCD for reimbursement of the actual costs incurred, and on December 21, 2023, the City received a check in the amount of $159,341.
GENERAL FUND TOTAL REVENUE $ 759,340
General Fund Expenditures:
The recommended adjustments to General Fund appropriations are listed in the table below.
FY 2023/24 Mid-Year Adjustments
General Fund Expenditures
DEPARTMENT AMOUNT DESCRIPTION
City Manager's Office - City Attorney $ 37,000 Unanticipated special litigation fees for City Prosecutor services City Manager's Office - Economic
Development 15,600 Adjustment needed to reflect expanded program activity for publications, meetings and training Public Safety - Animal Control 25,000 Additional funds for contracted IVHS services based on current licensing trends
Human Resources 8,000 Health care and insurance premium cost increases Planning 1,500 On-call environmental services for Environmental Impact Report/Traffic Impact Study
Building & Safety 3,130 Rental of additional storage unit and misc. supplies Parks & Recreation (8,000) Program savings from Winter Snowfest, Halloween Party, Concerts in the Park
Public Works 23,500 Replace stolen tools & equipment needed for Diamond Bar Center, Civic Center, Parks & Facilities, and Grounds/Buildings Maint.
Public Works 5,000 Janitorial/cleaning supplies for Diamond Bar Center due to increased usage
Public Works 20,000 Replacement of the swing gate for Diamond Bar Center Grand Avenue entrance due to vehicle collision
Public Works 10,000 Additional funding for on-call geotechnical services needed for Diamond Bar Blvd. slope distress evaluation
Public Works 44,500
Increases in Civic Center utility costs:
Electric Utility: $43,000 due to higher rates and consumption;
Water Utility: $1,500 due to consumption
Public Works 7,500 Increases in Parks & Facilities electric utility costs Public Works 85,000
Maintenance of Grounds/Buildings:
$25,000 for new wood chips at City Parks
(Pantera & Diamond Canyon),
$60,000 for playground equip. repairs and new wood chips at Sycamore Cyn Park
Public Works 50,000 Contracted traffic signal maintenance due to increased number of traffic accidents
GENERAL FUND TOTAL EXPENSE $ 327,730
Departmental Reorganizations – The City Council Strategic Plan prioritizes the development of a high-performing organization with a positive, value-based culture that attracts and retains talent. The Employer of Choice and Human Capital Investment Programs were developed to meet these City Council goals, leading to extensive organizational analysis of long-term departmental structural needs, employee development opportunities, and necessary succession planning efforts, all in an effort to provide the most positive and effective local government customer service experience possible.
To develop the most appropriate departmental succession planning structures, recognize increased responsibilities, and to invest in retaining high-performing employees, it is recommended that following positions be reclassified as indicated below.
Dept./Division Current
Classification
Proposed Reclassification Number
of Staff
Salary
Range
Finance Accounting
Technician
Senior Accounting Technician
(new)
2 21NE
Parks & Recreation Recreation Specialist Recreation Coordinator 4 17NE Public Works Maintenance Worker Senior Maintenance Worker 2 10NE Public Works Public Works
Inspector
Senior Public Works Inspector
(new)
1 23NE
The total FY 2023/24 cost to implement these nine (9) reclassifications is approximately $15,000 for the General Fund and $3,000 for various special funds. Due to current salary savings, the FY 2023/24 Budget is adequate to fund the cost of implementing these reclassifications. It is anticipated that the General Fund cost for next FY 2024/25 for all nine reclassifications will be less than $38,000, with the remaining balance of $9,000 paid for out special funds. The proposed changes to the FY 2023/24 Compensation Plan are included in the attached Exhibit A (Attachment 4).
Other Governmental Funds and Internal Service Funds:
The following table summarizes the proposed changes in revenue and expenditures for various other Governmental Funds and Internal Service Funds. In addition to the below requests, staff anticipates the imminent need to replace essential IT equipment that is now at end-of-life, including the security access control system for Diamond Bar Center and City Hall, security cameras at City Hall, and (2) multi-function printers. The aforementioned procurement requests, along with any necessary appropriations, will be brought separately to the City Council upon conclusion of their respective bidding processes.
FY 2023/24 Mid-Year Adjustments
Special Funds, Special Revenue Funds and Internal Service Funds
FUND REVENUE EXPENSE DESCRIPTION
SPECIAL FUNDS:
General Plan Revision Fund (103) $ 7,500 Town Center Specific Plan Traffic Impact Analysis Technology Reserve Fund (104) 36,000 Transfer-Out to Equipment Maint. Fund (503) for replacement SPECIAL REVENUE FUNDS:
Measure W Fund (201) 86,000
Late invoice received for FY 22-23 Lower San Gabriel River Watershed Management Program
Measure W Fund (201) 15,000 Diamond Cyn Park catch basin cleanup & maintenance Prop. A Fund (206) 8,000 Additional shuttle service for City Birthday Party TDA Fund (209) 40,000 Repl. Measure M. Funds with TDA Funds for Grand/Golden Springs Dr. Intersection Enhancement (CIP# PW18400)
Measure M Fund (203) (40,000) Repl. Measure M. Funds with TDA Funds for Grand/Golden Springs Dr. Intersection Enhancement (CIP# PW18400)
INTERNAL SERVICE FUNDS:
Vehicle Maint./Repl Fund (502) 11,000 Increased cost of vehicle maint.
Equipment Repl./Maint. Fund (503) 36,000 Transfer-In from Technology Reserve Fund (104) Equipment Repl./Maint. Fund (503) 6,000
Replace end-of-life security camera sys. (purchased 2016) at Sycamore Cyn Park
Equipment Repl./Maint. Fund (503) 30,000
Replace end-of-life wifi network equip. (purchased 2017) at Diamond Bar Center
Bldg. & Facility Maint. Fund (504) 65,000 City Hall rooftop boiler replacement (equipment is original to bldg) OTHER FUNDS TOTAL $ 36,000 $ 264,500
PREPARED BY:
REVIEWED BY:
Attachments:
1. 7.1.a Resolution No. 2024-05 FY 2023/24 Mid-Year Budget
2. 7.1.b Exhibit A - FY 2023/24 Mid Year Adjustments & Fund Balances
3. 7.1.c Resolution No. 2024-06 FY 2023/24 Compensation Plan
4. 7.1.d Exhibit A - Revisions to FY 23-24 Compensation Plan Feburary 24 2024