Item No.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: OFFICE OF THE CITY MANAGER
BY: STEPHEN W. HANNAH, DIRECTOR OF FINANCE
D ATE: JUNE 27, 2023
SUBJECT: ADOPTION OF THE PROPOSED BUDGET FOR THE 2023-2024 FISCAL YEAR
EXECUTIVE SUMMARY
The City Council will hold a public hearing and, after concluding the hearing, consider adopting the Fiscal Year (FY) 2023-2024 Annual Budget, GANN Limit, and personnel additions and changes as specified in the attached Resolution No. 23-8174 and Exhibit A of the Resolution.
RECOMMENDATION
That the City Council:
1.Conduct a Public Hearing considering the adoption of the City’s Fiscal Year 2023-2024 Budget and Annual Appropriations Limit (GANN Limit), and
2. Adopt Resolution No. 23-8174 Adopting the Fiscal Year 2023-2024 Budget and the annual Appropriations Limit (GANN Limit).
BACKGROUND
The City conducted a Fiscal Year 2023-234 budget workshop on June 8, 2023 that was open to the public. During the workshop, the overall budget, General Fund budget, and the addition of ten fulltime and two part time positions were discussed. Additionally, each department presented details about their budget, their accomplishments, and their upcoming fiscal year’s goals.
The Charter of the City of Downey requires adoption of the annual budget on or before June 30 of each fiscal year. In accordance with the annual budget cycle, the City’s budget process began in the Spring with the annual City Council budget goals-setting workshop.
In keeping with the City Council five-overarching priorities and fiscal year budget goals, the process was continued with the development of the budget through budget meetings between department heads and executive leadership, City Council Budget Subcommittee, City Council Budget Workshop, and publishing of public notice of a hearing to adopt the budget for the upcoming fiscal year.
APPROVED BY
CITY MANAGER
RESOLUTION ADOPTING 2023-2024 ANNUAL BUDGET
JUNE 27, 2023
PAGE 2
ANALYSIS
The total proposed annual operating budget is $249,572,492 and includes the cost of personnel, operations, materials, supplies, capital equipment, capital improvement projects, and transfers to other funds. The proposed General Fund portion of the budget is $115,108,237 in operating expenditures and based upon estimated General Fund revenues of $116,208,434. The City’s basic services, including police, fire, public works, parks and recreation, library services, community development, and administrative services (such as executive leadership, human resources, and financial services), are all funded from the General Fund.
The City Council’s five strategic priorities were integral in the development of the annual budget goals and objectives. These goals and objectives became the foundation for the budgetary proposals. The attached budget transmittal letter provides a more detailed overview of the proposed FY 2023-2024 budget.
Consistent with the priorities of the City Council and/or operating needs of the City, new positions and position changes have been included within the proposed budget. The specifics of those personnel changes are listed within the attached resolution. The attached resolution also contains the GANN limit information required to adopt the City’s annual budget.
Economic factors that influenced the preparation of this year’s budget
Rising interest rates to address historic inflation levels have impacted consumer confidence and buying behavior. The impact of this rapid rise in interest rates has been particularly heavy on the housing market where year-over-year sales have fallen by 30.2 percent.
With a growing pessimism for economic growth during the upcoming fiscal year, the likelihood that consumer spending will slow is enhanced. This could have negative impact on both the local business community, Downey’s sales tax revenues, and other transaction-based revenue sources.
Additionally, the City has seen a rise in the costs of goods and services for all City operations. Whether it is for construction materials for a public works project, labor costs for a subcontractor, or contract related costs for professional services, all are pressured towards increases in pricing as a result of the rate increases. In simplest terms, inflation diminishes the buying power of each tax dollar the City receives.
As a result of this factors, the proposed budget represents an increase in investment in economic development to not only recruit and expand the economic base of the community, but to increase business retention activities to help current businesses thrive within Downey.
RESOLUTION ADOPTING 2023-2024 ANNUAL BUDGET
JUNE 27, 2023
PAGE 3
The proposed budget
The City of Downey proposed FY 2023-2024 budget is structurally balanced for operations. The revenues and expenditures for all other services for which the City receives restricted use funding, as well as for the City’s utility operations, are also included in the proposed budget document.
The summary of estimated Revenues, Transfers and Appropriations for all City fund is:
The significant decrease in Special Revenue Funds reflects the use of special funding sources for multiple-year capital and capital-like projects. The decrease in enterprise fund balance reflects the expected use of grant resources during the upcoming fiscal year.
The General Fund Reserve is projected to be $33,748,000 at the conclusion of FY 2023- 2024, which is in line with the City’s General Fund Reserve Policy.
The attached Resolution adopts the City’s proposed annual budget and sets the City’s annual appropriations limit as required by the City Charter and by State law.
CITY COUNCIL PRIORITIES
Fiscal Responsibility
Public Engagement
FISCAL IMPACT
Approval of the recommended action will satisfy Article 12, Section 1204 of the City Charter of the City of Downey which requires that on or before June 30th, the City Council shall adopt the budget by majority vote.
Estimated Revenues, Appropriations ProjectedBeginningTransfers In and EndingFundand Other Transfers FundFund Type Balance Resources Out Balance General Fund 49.4$ 118.2$ 115.1$ 52.5$ Reserve Funds - 5.2 5.7 (0.5) Special Revenue Funds 37.2 64.5 81.4 20.3 Capital Projects Funds 8.2 1.1 5.4 3.9 Enterprise Funds 16.5 25.2 34.1 7.6 Internal Service Funds 7.9 6.3 7.0 7.2 Successor Agency Fund 3.7 1.3 0.9 4.1 Total 122.9$ 221.8$ 249.6$ 95.1$
RESOLUTION ADOPTING 2023-2024 ANNUAL BUDGET
JUNE 27, 2023
PAGE 4
ATTACHMENT
Attachment A – Budget Transmittal Letter
Attachment B – Resolution No. 23-8174
Exhibit A to Resolution No. 23-8174 – FY 2023-2024 Proposed Operating Budget
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 1 June 8, 2023
Dear Mayor Frometa and Members of the City Council:
In accordance with the City Charter, I’m pleased to present a structurally balanced budget of $272 million for Fiscal Year (FY) 2023-2024 for the City Council’s consideration. Staff has worked diligently to construct a budget that provides high quality services to the City of Downey, and which contributes to the quality of life of our residents, businesses, and visitors to our community. I would be remiss if I didn’t thank our staff for their hard work in putting the budget together. We have a great team! The budget is comprised of an operating plan, a five-year capital improvement program, and appropriations for debt service and other uses. This document continues the City’s strong record of prudent fiscal stewardship, and ability to adapt to fiscal pressures amidst some uncertainty in the economic outlook. It also demonstrates the City’s commitment to high quality customer service, while experiencing a period of organizational change and transition. The budget conservatively estimates the City’s revenues, maximizes available resources, maintains fiscal reserves, and prudently recommends expenditures to work toward achieving the priorities and objectives of the City Council.
Further, the budget establishes a frame work to meet the needs of the community, while also seeking ways to fund and enhance programs and services under the guidance of the City Council’s five strategic priorities of:
•Fiscal Responsibility;
•Efficiency & Adaptability;
•Economic Vibrancy;
•Quality of Life, Safety & Infrastructure; and
•Public Engagement;
Several objectives have been identified for each of the above strategic priorities, which were discussed with the City Council at its Priorities Setting Workshop this spring. These objectives are discussed in the immediate section below. The remainder of this budget message will provide a greater overview of the City’s financial program for the next year and, the major priorities and challenges that shaped the budget.
Roger Bradley
City Manager
ATTACHMENT A
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 2 City Council Priorities, Goals, and Performance Indicators The City Council’s five strategic priorities drive the development of the annual budget goals and objectives, which are the basis for the budgetary proposals. The individual department goals described in each department narrative was confirmed during the City Council’s annual goal-setting workshop as supporting the City Council’s five priority areas.
CITY OF DOWNEY
FY 2022-2023 BUDGET GOAL SUCCESSES
Notable successes from last year’s budget goals include:
Filled key vacancies and returned organizational stability to the City 14.6% average increase in social media followers across all platforms Received 10th consecutive budget award from
GFOA and CSMFO
Record attendance at the City of STEM event
held at the LA Historic State Park
Continued design of the CMSC 2nd building
expansion
Completed and Received State Approval of
Housing Element Update
Continued to encourage the use of Downtown
Downey to further attract patrons and
businesses
Joined the Gateway Cities COG Housing Trust
272 Households Assisted - COVID-19 Rental
Assistance Program
17 Small Businesses Assisted - COVID-19
Small Business program
Facilitated opening of the Marriott Springhill
Suites
Further improved City’s Cyber security posture
Implemented digital radio system for Downey
Fire Communications
Reinstated the Fire Auxiliary and Fire Explorer
programs
CERT program has grown to 60 residents
Opening of the Rancho South Campus Sports
Center
Completed the installation of new playgrounds
and surfacing at Temple & Crawford Parks
Installation of automated parking units at Wilderness Park Addition of Pickleball Courts at Independence Park
Held 1st annual Special Needs Resources Fair
Held 2nd annual Beyond the Book Fair
Opening Day of Rancho South
Campus Sports Center
PD Drone Education at CMSC Event
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 3 •Implemented new Customer Service Software in PD
•Implemented a Drone Program to allow for safer
and more efficient response to critical incidents
•Continued homeless assistance efforts,
conducting outreach and clean-ups on
alternating weeks.
•Held 2nd annual Touch-a-Truck Event
•Complete construction of solar energy
improvements at various City buildings and
facilities.
•Rehabilitate 158,000 linear feet or 31 miles of
residential streets in the City.
•Complete design and initiate construction of PFAS
treatment facilities at two groundwater wells.
CITY OF DOWNEY
FY 2023-2024 KEY BUDGET GOALS
The following are the key budget goals for Fiscal Year 2023-2024. A more comprehensive list is shown within each department budget section.
Performance Indicators
In alignment with the City Council’s five overarching priorities; the City has devised a variety of Performance Indicators to track Department efficiencies and effectiveness. These indicators are noted in each of the Department sections and compare annual targets to actual data and projections. A complete list can be located on page _.
Touch-A-Truck Event
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 4 Economic Outlook
Housing
Rising interest rates to address historic inflation
levels have impacted the housing market, in terms
of sales volume and median sales prices. A
cooling of the housing market started in late 2021
when the real estate market had reached a
significant peak. As of March 2023, the median
home price in Los Angeles County dropped 8.0
percent from the previous year and 1.2 percent
from the previous month. Additionally, the number
of closed sales dropped by 30.2 percent. In
Downey, median sale price increased by 8.7
percent, while home sales dropped by 18.3
percent.
The financial impact to the City of a cooling off of the overall housing market is that it reduces the rate of ownership changeover, which occurs through the sale of homes, and may dampen the growth in property tax revenue that the City receives. Due to California State Proposition 13, properties cannot be reassessed at their market values until a change in ownership occurs. However, assessment values, whether at market or below, do still increase by an annual inflationary factor, which is determined by the County Assessor. The inflationary factor is capped at not more than two percent annually. While a slowing of the home sales is expected to continue in the upcoming year, the market is still expected to continue with moderate growth in property tax for the City.
Unemployment and Consumer Confidence
As of March 2023, California's unemployment rate remained at 4.4 percent as the State's employers added 8,700 nonfarm payroll jobs to the economy, according to data released by the California Employment Development Department. In Los Angeles County, the rate was at 5 percent. In Downey, the unemployment rate was listed at 4.0 percent as of April 2023.
Downey Neighborhood
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 5 While the unemployment rate has returned to pre-COVID-19 levels, consumer confidence continues to decline as a result of persistent high inflation, increasing the cost of everyday items. This is compounded by growing concerns of a potential recession occurring in the next year or two as the job market slows. With a pessimistic view of the economy growing, and particularly among those on a fixed income, consumer spending is anticipated to slow. This could have negative impacts on Downey’s sales tax revenues and the overall economic growth of the business community. As a result, this budget represents an increase in investment in economic development to not only recruit and expand the economic base of the community, but to increase business retention activities to help current businesses thrive within Downey.
Budget Process
The City’s budget is developed by the following framework and timeline:
1. Focusing on the long-term fiscal health of the City.
2. Building a prudent reserve;
3. Developing long-term strategies to reduce unfunded liabilities;
4. Controlling labor costs while minimizing impacts to staff;
5. Allocating one-time revenue for one-time expenses;
6. Requiring enterprise and grant funds to balance revenues with expenses and new programs to pay for themselves; and
7. Any new expenditure requiring either additional revenue or expenditure reductions.
Basis of Budgeting
The budgeting (accounting and reporting) policies of the City conform to Generally Accepted Accounting Principles (GAAP) applicable to state and local governments. These principles include standards prescribed by the Governmental Accounting Standards Board (GASB) which includes the statements and interpretations of the National Council on Governmental Accounting and the principles prescribed by the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governments. The budget
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 6 differs from the annual financial reports issued by the City in two ways: The budget does not show depreciation expense, and it does not show the value of employee leave balances, in keeping with traditional municipal budgetary conventions. These expenses are, however, reported in the Annual Comprehensive Financial Report (ACFR).
Budget Controls
Supplemental appropriations can be approved through minute action or a resolution approved by a simple majority vote of the Council. With the exception of transfers between personnel costs and operations/services costs, the City Manager is authorized to transfer amounts between or within departments or programs within any fund. The Council must approve any transfer which alters the total appropriations on any fund.
Departments monitor reports that are issued on the 15th working day of each month for the preceding month to ensure expenditures are properly charged and to ensure there are appropriate funds for future expenditures. At any time during the fiscal year, Departments report to the City Manager and Finance Director of any significant budget variance that cannot be reconciled with the division/department responsible for incurring the variance.
Additionally, upon review by the department Directors, purchase orders are transmitted to the Finance Department for verification of budget compliance.
Budget Highlights
The proposed overall City-wide Fiscal Year 2023-2024 Budget for all funds is $272,288,000.
Overall, this budget is an increase of roughly $9,835,585 or 3.75 percent compared to Fiscal Year 2022-2023.
The Fiscal Year 2023-2024 General Fund expenditure budget of $118,188,000 is funded with Fiscal Year 2023-2024 estimated revenues of $115,079,000. There is a surplus of $3,109,000, of which $2,879,000 is derived from Measure S sales and use tax revenues, and dedicated solely for Measure S related programs and projects.
Revenues and Projections
Overall, Fiscal Year 2023-2024 General Fund Revenue is projected to be $118,188,000, which is 14.38 percent higher than Fiscal Year 2022-2023. This year’s budget includes a previous year’s dedicated funding for two special elections, a change in Measure S accounting policy, and an estimated growth of 6.1 percent of non- Measure S funds.
The City’s Fiscal Year 2023-2024 mid-term revenue projections, which extend five years into the future, are outlined in Appendix B, “Forecasting of General Fund Revenues and Expenditures,” and are done on an annual basis to responsibly inform operations and planning.
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 7 Property taxes provide 30 percent of
the City’s General Fund revenue,
while Sales Tax revenues account
for 23 percent of the City’s revenue
stream. Property Tax is projected to
have moderate growth, while sales
tax is projected to be flat following
unprecedented sales in online
shopping in the last few years as a
result of the pandemic. The City’s
Utility Users Tax, which the City’s
voters adjusted in 2014, will continue
its stable growth.
Revenue from fees is expected to
increase nominally, as the City will be
applying a Consumer Price Index
increase on user fees that are not set
by State statute as well as City facility
rental/reservations fees to current
market rates. This gradual increase in fees is to ensure that general fund revenues are not used to subsidize specialized services received by businesses and developers, among others. It also prevents the need to enact large increases, resulting from a need to “catch up” fee charges due to skipping annual fee analyses for a few years.
Overall, economic indicators are suggesting a slowing, yet resilient job market with reduction in unemployment levels. However, growing pessimistic views continue to impact consumer confidence, and overall consumer spending resulting in impacts to City Sales and Use Tax revenue estimates.
Expenditures and Projections
Proposed General Fund expenditures are $115,079,000, which is 2.7 percent increase over last year’s General Fund budget.
In addition to the Goals mentioned earlier under “City Council Priorities, Goals, and Performance Indicators”, the budget proposes continued funding for ongoing services, and annual public events, new Theatre programing, increased revitalization of commercial corridors, an electronic permitting system, an agenda management system, installation of a fiber optic network system Citywide, and the West Santa Corridor Branch Station light rail City match.
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 8 Capital Projects
Capital improvements are required to maintain the City’s physical infrastructure. The City’s FY 2023-2024 CIP
appropriates $98,317,000 for street, sewer, light, storm water, water, traffic and public facility improvements. A percentage breakdown can be seen below. Capital
improvement projects are funded by Measure S,
Proposition C, Measure R, Measure M, 2017 Road
Maintenance Rehabilitation Act (SB 1), and other
revenues sources.
Employee Service Costs
The primary source of service to the public is through employees, and as such, the Employee Service Costs (consisting of salaries, wages and employee benefits) make up the largest component of the General Fund expenditures. There are seven represented employee groups in the City: Downey City Employee’s Association-Maintenance, Downey City Employee’s Association-Miscellaneous, Downey Fire Management Association, Downey Firemen’s Association, Downey Police Management Association, Downey Police Officer’s Association, and Downey Public Safety Auxiliary Association. Executive and Management positions remain unrepresented.
The City strives to provide sufficient staffing levels within its limited resources, with a focus of providing services, public safety, and an overall quality of life that surpasses surrounding cities. The City is fortunate to have a dedicated workforce, which includes an average of
11.93 full-time years of service to the Downey community.
Although there have been increases in personnel in recent years, the City’s full-time budgeted staffing continues to be less than what it was over a decade ago. From FY 2008- 2009 to FY 2023-2024, full-time budgeted staffing has reduced from 481 to 441, an 8.3 percent decrease to address budget challenges and improve organizational alignment.
Water System Improvements
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 9 For the FY 2023-2024 budget, a total of 10 positions were added to the budget to improve service levels and department efficiencies. Two Building Inspectors, a Building Plan Checker, and a Senior Code Enforcement Officer will be added to the Community Development Department. These positions will assist in streamlining services and increasing response times to the public. Funding for these positions will be offset by reductions in contract services and anticipated increases in City revenues. A Homelessness Solutions Manager and an Economic Development Director will be added to the City Manager’s office.
The Homelessness Solutions Manager will help implement homeless prevention and intervention strategies and the Economic Development Director will help the City better position itself in attracting and retaining businesses, and grow the City’s economic base.
Lastly, the following positions were added for succession planning and management of increased department needs: a Citywide Systems Engineer, Associate Engineer, Crime Analyst, and a Fire Inspector.
While the City’s revenues have increased marginally as the result of intensive business development and retention efforts, these revenues are only enough to meet the ever- increasing costs of CalPERS pensions, and so while staff’s continued outstanding performance and dedication are what has made this organization so successful, there have been modest increases to compensation in the past.
In FY 2022-2023 the City completed labor negotiations with the seven labor groups with the City providing a four percent salary increase for the next three years with employees contributing an additional one percent towards their CalPERS reportable compensation for each of the next three years.
Budget Challenges
While the City is making progress to meet its financial obligations, there continues to be major challenges that need to be made that impact City finances. The City is continuing to review strategies to address these challenges to ensure they become manageable.
Retirement Costs
The City contracts with the California Public Employees retirement System (CalPERS), to provide retirement benefits to full-time employees. On January 1, 2013, the State adopted California Public Employee’s Pension Reform Act (PEPRA) in an effort to control rising pension costs. Members who became CalPERS members on or after January 1, 2013 or have been separated from service for longer than six months, are considered “new” members”, and are required to pay half of the normal cost towards their pension contribution.
In recent years, CalPERS has made changes that will continue to increase employer retirement costs. These changes include: 1) new CalPERS amortization periods and smoothing methods for employer contributions, 2) changes to actuarial assumptions
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 10 including projecting longer life expectancies and demographic assumptions, and 3) reducing the discount rate of return on investments from 7.5 percent to 7.0 percent. These changes continue to significantly increase the City’s retirement costs over the next several years.
In order to control rising retirement costs, the City implemented a new tier on January 11, 2012 where each new staff member in the City enters under either a second-tier or pension reform (PEPRA) retirement formula, which will continue the slow reduction of the City’s unfunded pension liability in the next twenty to thirty years.
However, despite these efforts, like many cities, the City’s contribution rates to CalPERS continued to increase as PERS adjusts its discount rate (the rate of return that CalPERS predicts it will achieve on its investments of public pension funds). Fortunately, the City had the foresight to take a proactive measure of refinancing its CalPERS Unfunded Actuarial Liability (UAL) in early 2021 resulting in a projected gross savings of $65 million to the City and increasing the City’s Pension Funding Level from 67.1 percent to 85 percent as of 2022.
Health Care Premiums
Healthcare costs for CalPERS-negotiated healthcare plans are expected to increase over the prior year. While the City has not received data from CalPERS regarding upcoming year costs, the City anticipates an increase similar to prior years, approximately 4-5 percent.
Anticipating future years’ healthcare cost increases and to help offset rising healthcare premiums, in Fiscal Year 2017-2018 the City negotiated with labor groups to require staff, for the first time ever, to begin contributing toward their employer-provided healthcare costs.
Minimum Wage Increases
In April 2016, Governor Brown signed SB 3 (Leno), which established a state minimum wage phase in requirement
that increases the minimum wage to $15 per hour by 2022.
Additionality, after the state minimum wage reaches $15 an hour for all employees, the rate is adjusted annually for inflation based on the national CPI for urban earners and clerical workers at a cap of 3.5 percent. The current state minimum wage rate is at $15.50. These rate increases
have impacted City Department recruitments, particularly for part-time employees. The City is exploring creative strategies to attract applicants to City job openings.
Inflation
Inflation is of signification concern for the City. As the cost of materials rises, the City has experienced unexpected increases in contractor bids for capital projects, delays in receiving necessary components for equipment projects, increases in fuel lobar costs due to tight and very competitive labor market. While inflation has not caused the cancellation of capital
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 11 projects, the continual high cost may cause the City to re-evaluate the resources it has available for certain projects in the future.
Looking Beyond Fiscal Year 2023-2024
To ensure long-term fiscal viability, the City has made substantial changes to compensation, retirement, and healthcare structure; sought federal, state, local and private funding for projects to support our parks, Library, police, fire, water, and community development needs; and supported
state and federal legislation to increase funding for
infrastructure projects.
Longstanding infrastructure and maintenance projects
will update City facilities and ensure viability for the next 20-30 years, thanks to funds from Downey’s Measure
S, the County’s Measure M, and the State’s SB 1.
Specifically, the 2017 transportation funds and local
sales tax dollars have helped to stabilize infrastructure resources over the next twenty to thirty years.
Additionally, the City’s bond issuance using Measure M
and Measure R funds helped accelerate projects and limit future increased construction costs. Over $30,000,000 in street repairs were completed this past year. Additionally, the City maximized one-time federal revenue dollars such as ARPA funds, to advance City infrastructure creating generational impacts.
The City’s cautious savings of revenues are what ensure that the City can provide high quality services, in times of economic expansion and in economic uncertainty. The City prepares a five-year capital improvement plan to track projects, costs, funding sources, and potential impacts to the General Fund due to ongoing maintenance of these projects. By forecasting for the next five years, it allows City staff to properly budget and allocate resources to future projects, while also anticipating and minimizing, when possible, effects to the General Fund.
Further, Downey is on a sustainable long-term path in
terms of state-of-the art infrastructure repair and
regional economic development opportunities that will
have tremendous impacts for decades. These include
the redevelopment of the Rancho Los Amigos South
Campus, expansion of the Columbia Memorial Space
Center, and the development of the West Santa Ana
Branch Corridor light rail line and station in Downey.
Incorporating these various projects and future legacy
projects, the City completes long-range revenue and
expenditure projections (Appendix ___) to assist with this effort of financial stewardship.
Residential Streets Pavement
Rehabilitation
West Santa Ana Branch Presentation
City of Downey | FY 2023-2024 Proposed Annual Operating Budget | 12 As the City’s remains focused on long-term infrastructure and economic development efforts, the City is also proactively exploring methods of expanding its revenue base to support and enhance services.
Hotel Users Tax
The City will consider the feasibility of placing a hotel users’ tax (also known as the Transient Occupancy Tax) on the November 2024 ballot to update the rate along with modernizing the City’s municipal code. A hotel users’ tax is not likely to impact development and is not a revenue measure that affects residents. A potential hotel users’ tax update could generate an additional $950,000 to maintain City services.
Cost Allocation Plan and User Fee Study
The City engaged the services of a third-party consultant to review the City’s current Cost Allocation Plan and User Fee Schedule. To ensure that the cost of City services are properly recovered, it is recommended fees are reviewed every five years. The City’s last Cost Allocation and User Fee Study was conducted in 2016. The possible implementation of these new and updated fees could help the City fully recover the cost for its services to the public.
Conclusion
The Fiscal Year 2023-2024 Budget provides the funding needed to meet the City Council’s fiscal year goals driven by the Council’s five strategic priorities. The City will continue to monitor many factors impacting revenues and expenditures, and look at strategic ways to continue achieving balanced budgets.
I would like to thank the City Council for its policy guidance and support, and our dedicated workforce for its efforts in developing this budget. With the continued collaborative efforts of the City Council, staff, and the Downey community, the City is well positioned to continue providing high quality services to Downey residents and businesses.
Respectfully Submitted,
CITY OF DOWNEY
Roger Bradley
City Manager
GENERAL FUND FISCAL YEAR 2023-24 EXECUTIVE SUMMARY
Revenues and Other Sources
Estimated Revenues $116,208,000
Use of Prior Year Resources* 1,980,000
Total Revenue and Other Sources $118,188,000
Expenditures and Other Uses
Proposed Expenditures (115,108,000)
Total Expenditures and Other Uses (115,108,000)
Projected Budget Surplus 3,080,000
Projected Fund Balance, July 1, 2023 49,357,000
Projected Fund Balance, June 30, 2024 $52,437,000
**2 Special Elections**
ColumbiaCommunityMemorialDevelopmentSpace Center
& Downey
City Library
Finance &
Information
Technology
Fire Human
Resources
Parks &
Recreation
Police Public
Works
Assistant City Manager
ORGANIZATION CHART
Benjamin
Dickow
Executive
Director and
President
Library
Director
Gregory Pfost
Interim Director
Building/ Safety
Code
Enforcement
Economic
Development
Housing
Planning
Maria Alicia Duarte, CMC
Community Services Commission
Planning Commission
Youth Commission
Library Advisory Board
Personnel Advisory Board
Roger Bradley
Five Members
Mayor Rotated Annually
Jason
Chacon
Director
Recreation
Parks
Civic Theatre
Social
Services Golf
Course
Transit
Cemetery
Leslie R.
Murray
Chief of Police
Administration
Field Operations
Detectives
Crossing Guard
Interm
Lauren Langer
Vaniah De Rojas
Disability Appeals Board
Keep Downey Beautiful
Public Works Committee
Public Facilities Financing Corporation
Water Facilities Corporation
Matt
Baumgardner
Director/
City Engineer
Administration
Engineering
Utilities
GIS Maintenance
Streets
City Clerk
Charter Boards
& Commissions City Council
City Manager
Citizens of Downey
Committees
City Attorney
CommnityDevlopment
StephenHannah
Director
AdministrationPurchasingAccountingInformationTechnologyRiskManagementRevenue Dan Hurlock
Fire Chief
AdministrationSuppressionParamedicsPreventionJointCommunications JamesMcQueen
Director
EmployeeBenefitsEmployee andLabor RelationsRecruitment &Selection
RESOLUTION NO. 23-XXXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY
ADOPTING THE FISCAL YEAR 2023-2024 BUDGET AND THE ANNUAL
APPROPRIATIONS LIMIT
WHEREAS, the City Council has considered the proposed budget recommended by the City Manager for the Fiscal Year 2023-2024; and
WHEREAS, the addition of one Economic Development Director and one Homeless Solutions Manager were included to the City Manager Department; and WHEREAS, the addition of one Associate Traffic Engineer was included to the Public Works Department; and
WHEREAS, the addition of one Citywide Systems Engineer was included to the Finance and Information Technology Department; and
WHEREAS, the addition of two Building Inspectors, one Plan Checker, one Senior Code Enforcement Officer, and two part-time Code Enforcement Officers were included to the Community Development Department; and
WHEREAS, the addition of one Fire Building Inspector was included to the Fire Department; and
WHEREAS, the addition of one Crime Analyst was included to the Police Department; and
WHEREAS, the reclassification of Junior Accountants to Accountants to be more reflective of the scope of duties and responsibilities was included; and WHEREAS, the reclassification of one Secretary to Public Works Technician to be more reflective of the scope of duties and responsibilities was included; and WHEREAS, the adjustment of the Executive Director Columbia Memorial Space Center Salary Range to be more reflective of the scope of duties and responsibilities was included; and WHEREAS, the position title change from Social Media Coordinator to Public Information Coordinator was included; and
WHEREAS, the position title change from Economic and Housing Manager to Housing Manager was included.
WHEREAS, the newly established classifications of Associate Traffic Engineer, Building Plan Checker, Homelessness Solutions Manager and Public Works Technician are non-exempt classifications and determined to be appropriately represented by the Downey City Employees’ Association – Miscellaneous Unit,
WHEREAS, the newly established classification of Economic Development Director, Crime Analyst and Citywide Systems Engineer are non-exempt unrepresented at-will classifications,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES HEREBY RESOLVE AS FOLLOWS:
ATTACHMENT B
RESOLUTION NO. 23-8174
PAGE 2
SECTION 1. That the budget for the City of Downey for fiscal year 2023-2024, is hereby adopted as set forth in the statement of Summary of Resources and Requirements by Fund. The City Manager is hereby authorized to expend, in accordance with the laws of the State of California, the Charter of the City of Downey and its ordinances, on behalf of the City Council, an amount of $249,572,492 for City operations as per Exhibit “A”.
SECTION 2. That staff is directed to prepare and publish a final budget document incorporating those changes approved by Council.
SECTION 3. In accordance with Article XIII-B of the State Constitution, and using data furnished by the State Department of Finance and the Los Angeles County Assessor, the appropriations limit for Fiscal Year 2023-2024 has been calculated.
The calculations indicated below, are computed by adjusting the appropriations limit for Fiscal Year 2022-2023 for the percentage change in either California’s per capita personal income (4.44%) or the City’s total assessed valuation due to new non-residential construction (1.58%); and the percentage change in population of either the County of Los Angeles (-0.75%) or the City (-0.73%). Since the percentage change in the per capita personal income and the percentage change in the County’s population will provide greater benefit to the City, these factors have been selected to compute the fiscal year 2023-2024 appropriations limit. Using these factors, the appropriations limit for 2023-2024 is $285,431,687, which basically means that certain aspects of the budget cannot exceed this amount. The proposed budget, currently under consideration, has appropriations subject to this limit of $79,722,084.
SECTION 4. The appropriations specified herein shall constitute the maximum amounts authorized for each department in each fund. The City Manager is hereby authorized to make budgetary transfers between departments in a fund if, in his opinion, such transfers are necessary and proper to the effective operation of the City; provided, however, that:
(a)Appropriations for personnel costs cannot be transferred to supply and service accounts. (b)Any non-budgeted equipment, new or replacement, which costs more than $10,000, requires prior City Council approval.
(c)The City Manager will inform the City Council of the purchase of non-budgeted equipment, new or replacement that costs less than $10,000.
(d)Authorized manpower levels as specified in the Budget document are neither increased nor transferred without prior approval of the City Council. However, the City Manager may exceed authorized manpower levels on a temporary basis to provide for the effective training and orientation of new employees.
SECTION 5. That for the fiscal year ending June 30, 2023, the amount of unassigned Fund Balance shall be deposited into Assigned General Fund balance accounts to (1) ensure the Emergency Reserve and the Stability Reserve are appropriately funded and (2) provide future resources for other significant City projects or needs.
SECTION 6. The number and classification of employees as specified in the Budget and any amendments or revisions authorized by the City Council are hereby authorized for the fiscal year.
RESOLUTION NO. 23-8174
PAGE 3
SECTION 7. The following pay ranges shall take effect to coincide with the pay period that includes July 1, 2023 as follows:
Classification Title Grade Pay Range
Associate Traffic Engineer 01-283 $7,111.41 to $8,809.81 per month Crime Analyst 04-004 $6,400.88 to $7,929.55 per month
Economic Development Director 04-095 $15,284.06 to $18,646.65 per month Homelessness Solutions Manager 01-255 $5,909.06 to $7,320.38 per month Citywide Systems Engineer TBD $9,441.45 to $11,518.62 per month Plan Checker TBD $6,171.91 to $7,645.99 per month
Fire Inspector TBD $5,254.34 to $6,509.30 per month
Executive Director of the 04-090 $12,167.11 to $14,843.87 per month Columbia Memorial Space Center
SECTION 8. The classification of Executive Director of the Columbia Memorial Space Center is hereby transferred to the Executive Management category (Section 1A) of Resolution No. 23-8155.
SECTION 9. Authorize the City Manager, or designee, to make all classification specification revisions in accordance with the FY 2023-2024 Budget.
SECTION 10. The City Clerk shall certify to the adoption of this Resolution.
APPROVED AND ADOPTED this 27th day of June, 2023.
_________________________________
CLAUDIA FROMETA, Mayor
ATTEST:
______________________________
MARIA ALICIA DUARTE, CMC
City Clerk
I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of the City of Downey at a Special meeting held on the 27th day of June, 2023, by the following vote, to wit:
AYES: Council Members:
NOES: Council Members:
ABSENT: Council Members:
ABSTAIN: Council Members:
MARIA ALICIA DUARTE, CMC
City Clerk
RESOLUTION NO. 23-8174
PAGE 4
EXHIBIT A
SUMMARY OF RESOURCES AND REQUIREMENTS BY FUNDS JUNE 30, 2024 Fund No.Fund
Estimated
Beginning
Balance
July 1, 2023
Estimated
Revenues
Transfers
from Other Funds
Use of Prior Year
Resources
Total
Resources
Available
Operating
Expenditures Equipment Capital
Projects
Transfers to
Other Funds
Total
Requirements
Projected Ending
Fund Balance
June 30, 2024
Fund
General and Reserve Funds General and Reserve Funds
10 General Fund 44,437,000 100,056,434 3,526,000 1,980,000 149,999,434 104,461,193 - 900,000 105,361,193 44,638,241 General Fund 17 General Fund 4,920,000 12,626,000 - - 17,546,000 4,527,675 - 5,219,369 9,747,044 7,798,956 General Fund Sub Total 49,357,000$ 112,682,434$ 3,526,000$ 1,980,000$ 167,545,434$ 108,988,868$ -$ -$ 6,119,369$ 115,108,237$ 52,437,197$ SUB TOTAL 65 Civic Center - 1,320,802 - 1,320,802 1,834,025 1,834,025 (513,223) Civic Center 73 Special Deposit Fund - 400 - 400 - - 400 Special Deposit Fund 76 Liability Insurance - 3,868,169 - - 3,868,169 3,834,065 3,834,065 34,104 Liability Insurance Sub Total -$ 5,189,371$ -$ -$ 5,189,371$ 5,668,090$ -$ -$ -$ 5,668,090$ (478,719)$ SUB TOTAL Special Revenue Special Revenue and Capital Funds
11 Federal Police Grant - 310,000 - - 310,000 - - 310,000 Police Grants 13 Fire Dept. Haz Material - 175,000 - - 175,000 241,582 - - - 241,582 (66,582) 14 Federal Fire Grant - 131,000 - - 131,000 - - 131,000 Federal Fire Grant 19 Federal Emergency Grants - - - - - - - Federal Emergency Grant 20 Waste Management 24,938 420,000 - - 444,938 563,932 563,932 (118,994) Waste Management*22 Air Quality 541,787 147,500 - 689,287 159,096 170,930 330,026 359,261 Air Quality 23 Street Lighting (330,470) 2,549,500 - 2,219,030 2,648,992 398,810 3,047,802 (828,772) Street Lighting 24 Learning Center 253 140,800 900,000 - 1,041,053 1,911,551 - 1,911,551 (870,498) Learning Center*25 TDA Article III 57,273 - - 57,273 170 7,990 8,160 49,113 TDA Article III 26 Grants - 30,681,496 - 30,681,496 21,275 30,681,496 30,702,771 (21,275) Grants 27 PLHA Grant - 140,000 - 140,000 140,916 140,916 (916) PLHA Grant 28 CDBG 903,433 972,424 - 1,875,857 1,113,369 1,113,369 762,488 CDBG 29 Federal Home Program 673,313 481,259 - 1,154,572 633,286 633,286 521,286 Federal Home Program*30 Gas Tax (107,476) 3,213,856 - - 3,106,380 148,929 - 2,626,000 2,774,929 331,451 Gas Tax 31 LSTA Fund 389 - - 389 - - - - 389 LSTA GRANT *32 State - SB1 4,174,543 2,802,896 - 6,977,439 - 4,300,000 4,300,000 2,677,439 SB1 35 Measure S - Sales Tax 4,139,879 15,000 4,162,890 - 8,317,769 4,162,890 - - - 4,162,890 4,154,879 Measure S - Sales Tax*38 Vehicle Impact 3,884,428 1,750,000 - 5,634,428 2,267 4,530,000 - 4,532,267 1,102,161 Vehicle Impact 47 Art In Public Places 351,393 75,000 - - 426,393 550 - 550 425,843 Art in Public Places 50 Storm Drain Fund (160,514) 3,697,924 - - 3,537,410 517,355 - 4,101,320 4,618,675 (1,081,265) Storm Drain Fund *54 Transit - "PROP. C"2,999,293 2,889,941 - 5,889,234 39,513 2,775,000 1,000,000 3,814,513 2,074,721 Transit - "PROP. C" 55 Transit - "PROP. A"3,083,593 3,247,299 1,000,000 - 7,330,892 3,534,616 3,534,616 3,796,276 Transit - "PROP. A"*56 Transit - "MEAS. R"3,534,676 2,015,205 - 5,549,881 853,806 2,153,945 3,007,751 2,542,130 Transit - "MEAS. R"*57 Transit - "MEAS. M"4,565,751 2,279,099 - 6,844,850 1,022,481 2,983,541 4,006,022 2,838,828 Transit - "MEAS. M"*58 Transit - "MEAS. M" BOND 3,637,218 100 - 3,637,318 - 3,775,001 3,775,001 (137,683) Transit - "MEAS. M " Bond*59 Transit - "MEAS. R" BOND 3,866,853 - - 3,866,853 - 3,970,235 3,970,235 (103,382) Transit - "MEAS. R"Bond 74 State Asset Forfeiture - 150,000 - 150,000 - - - 150,000 State Asset Forfeiture 77 Public Access 1,217,509 140,000 - 1,357,509 - - - 1,357,509 Public Access 78 Asset Forfeiture 181,407 10,500 - - 191,907 235,231 235,231 (43,324) Asset Forfeiture Sub Total 37,239,469$ 58,435,799$ 6,062,890$ -$ 101,738,158$ 17,951,807$ -$ 59,848,268$ 3,626,000$ 81,426,075$ 20,312,083$ SUB TOTAL Capital Funds Grant Funds
33 Sales Tax - "MEAS. S"68,020 - 1,056,479 - 1,124,499 1,056,479 420,823 - 1,477,302 (352,803) Measure S 34 NASA Infrastructure 246,635 - - 246,635 - - 246,635 NASA Infrastructure 36 Capital Project Firestone 787,583 - - - 787,583 357 590,657 - 591,014 196,569 Capital Project 40 Capital Projects 7,140,133 3,500 - - 7,143,633 1,075 3,341,757 3,342,832 3,800,801 Capital Projects Sub Total 8,242,371$ 3,500$ 1,056,479$ -$ 9,302,350$ 1,057,911$ -$ 4,353,237$ -$ 5,411,148$ 3,891,202$ SUB TOTAL Enterprise Funds Enterprise Funds
51 Water Fund 13,216,924 18,987,000 - - 32,203,924 16,227,182 10,000,000 900,000 27,127,182 5,076,742 Water Fund 52 Golf Course Fund 2,329,268 4,620,100 - - 6,949,368 4,034,625 - - 4,034,625 2,914,743 Golf Course Fund 72 Sewer Fund 984,018 1,550,500 - - 2,534,518 1,537,534 1,400,000$ 2,937,534 (403,016) Sewer & Storm Drain Sub Total 16,530,210$ 25,157,600$ -$ -$ 41,687,810$ 21,799,341$ -$ 11,400,000$ 900,000$ 34,099,341$ 7,588,469$ SUB TOTAL Successor Agencies Successor Agencies
84 Housing 3,651,416 84,000 - - 3,735,416 12,166 12,166 3,723,250 Housing 91 Red. Oblig. Retirement - 1,265,373 - - 1,265,373 257,000 - 257,000 1,008,373 Red. Oblig. Retirement 93 CRA Debt Service - 20,000 - - 20,000 627,581 628,878 (608,878) CRA Debt Service Sub Total 3,651,416 1,369,373 - - 5,020,789 896,747 - - - 898,044 4,122,745 SUB TOTAL TOTAL CITY BUDGET 115,020,466$ 202,838,077$ 10,645,369$ 1,980,000$ 330,483,912$ 156,362,764$ -$ 75,601,505$ 10,645,369$ 242,610,935$ 87,872,977$ TOTAL CITY BUDGET Internal Service Funds Internal Service Funds
61 Employee Benefit Fund 7,537,202 2,950,000 - - 10,487,202 3,488,836 3,488,836 6,998,366 Employee Benefit Fund 62 Equipment Fund 357,467 3,333,016 - - 3,690,483 - 3,472,735 - 3,472,735 217,748 Equipment Fund Total Internal Service Funds 7,894,669 6,283,016 - - 14,177,685 3,488,836 3,472,735 - - 6,961,571 7,216,114 Total Internal Services GRAND TOTAL 122,915,135$ 209,121,093$ 10,645,369$ 1,980,000$ 344,661,597$ 159,851,600$ 3,472,735$ 75,601,505$ 10,645,369$ 249,572,506$ 95,089,091$ GRAND TOTAL RESOLUTION NO. 23-__
EXHIBIT A 6/15/20232:50 PM