EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: October 4, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Tomohito Oku, Finance Director
Bo-Kyoung Kim, Financial Services Manager
SUBJECT: FY22 Limited Budget Amendment
Recommendation
Adopt a resolution approving the Fiscal Year(FY) 2021-22 limited budget amendments effective June 30, 2022.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 3: Increase Organizational Effectiveness and Efficiency Priority No. 5: Improve Communication and Enhance Community Engagement Background
In accordance with the City’s Municipal Code Chapter 3.08 Budget Planning and Fiscal Procedures and in keeping with common budget appropriation procedures, the Finance Department periodically presents the City Council with recommended budget amendments and changes in order to properly manage fiscal activity across funds established by the City Council.
Generally, the Council engages in this process through adoption of the operating and capital budgets, formal mid-year review of the General Fund, formal carry-forward of previously approved appropriations (typically related to encumbered contracts and capital projects), and through Council appropriation of specific subject matter submitted for approval during the year.
From time to time the Finance Department will recommend limited budget adjustments. This report provides information and final FY 2021-22 amended budgets related to the following limited budget activity for the General Fund and related sub-funds, collectively reported as the General Fund:
· General Fund (F010): Increase revenues for property tax, Sales tax, and Transient Occupancy Tax ($1,560,000) and decrease expenditures due to salary savings from personnel vacancy ($2,650,776).
· Self-Insurance (F013): Increase expenditures for Police department advance disability payment ($4,000).
· Pandemic Outreach (F090): Increase revenues in the County Covid program ($125,000) and also increase expenditures related to the programs due to the overtime wages by $84,000.
· Emergency(F099): Increase FEMA eligible expenditures ($6,000).
Analysis
Table 1 below reflects the current FY 2021-22 Amended General Fund Budget:
Table 1
Revenues Expenditures In Out
10 General Fund $ 26,955,000 $ (22,693,000) $ - $ (4,279,510) $ (17,510) 11 IT Replacement Fund $ - $ (962,705) $ 927,800 $ - $ (34,905) 12 Equipment & Vehicles $ 59,040 $ (339,750) $ 280,710 $ - $ - 13 Self Insurance $ - $ (720,000) $ 690,000 $ (30,000)
17 Com Dev Pass Thru $ 1,695,000 $ (1,908,308) $ - $ - $ (213,308) 90 Pandemic Outreach $ 40,000 $ (40,000) $ - $ - $ -
99 Emergency Fund $ - $ - $ - $ - $ -
$ - $ - $ (1,898,510) $ 1,898,510 $ -
General Fund $ 28,749,040 $ (26,663,763) $ - $ (2,381,000) $ (295,723) FY 2021-22 Amended General Fund Budget
Operating Operating Transfers Net Change
Fund Balance
ELIMINATING ENTRY
Fund Description
Proposed total General Fund budgeted revenues increase $1.7M from $28.7M to $30.4M. Revenue amendments are primarily related to Property taxes, Sales taxes, and TOT revenues ($1,560,000) and County Covid grant ($125,000).
Proposed General Fund budgeted operating expenditures decrease $2.6M from $26.7M to $24.1M primarily due to personnel vacancy and other expenditure savings.
The Proposed Amendment General Fund Budget is reflected in Table 2 below:
Table 2
Revenues Expenditures In Out
10 General Fund $ 28,515,000 $ (20,042,224) $ - $ (4,279,510) $ 4,193,266 11 IT Replacement Fund $ - $ (962,705) $ 927,800 $ - $ (34,905) 12 Equipment & Vehicles $ 59,040 $ (339,750) $ 280,710 $ - $ - 13 Self Insurance $ - $ (724,000) $ 690,000 $ (34,000)
17 Com Dev Pass Thru $ 1,695,000 $ (1,908,308) $ - $ - $ (213,308) 90 Pandemic Outreach $ 165,000 $ (124,000) $ - $ - $ 41,000 99 Emergency Fund $ - $ (6,000) $ - $ - $ -
$ - $ - $ (1,898,510) $ 1,898,510 $ -
General Fund $ 30,434,040 $ (24,106,987) $ - $ (2,381,000) $ 3,946,053
ELIMINATING ENTRY
FY 2021-22 Amended General Fund Budget
Fund Description
Operating Operating Transfers Net Change
Fund Balance
Fiscal Impact
Before the proposed limited General Fund budget amendments, the budgeted use of General Fund reserves is $0.3M. However, after the proposed amendments, the General Fund will recognize a surplus of $4.0M which will be added to the General Fund reserves. Actual General Fund operating results and unreserved General Fund balance will be determined when audit fieldwork is complete in approximately December 2022.
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo Co. Library located at 2415 University Avenue in East Palo Alto, CA.
Environmental
The action being considered by the City Council is exempt from the California Environmental Quality Act (CEQA) because it is not a “project” pursuant to 15378(b)(4) because it is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant impact on the environment.
Attachments
A. Resolution - FY22 Limited Budget Amendment