DATE:
March 7, 2023
TO:
Paul Buddenhagen, City Manager
FROM:
Lawrence Chiu, Finance Director
SUBJECT:
Fiscal Year 2022-23 Mid-Year Budget Review and Resolution Amending Fiscal Year 2022-23 Budget Recommendation
Staff recommends that the City Council review the Fiscal Year 2022-23 Mid-Year Budget and approve Resolution amending Fiscal Year 2022-23 Budget.
Background
The City’s budget for Fiscal Year 2022-23 was adopted by the City Council on June 7, 2022. The Fiscal Year 2022-23 adopted budget for all City funds anticipated revenue of $134.0 million and expenditures of $190.8 million, with the difference of $56.8 million budgeted from the accumulated fund balance in 41 of the City’s 66 various funds. At mid-year, all departments performed a detailed review and analysis of all revenues and expenditures to determine if subsequent budget adjustments were need for the remaining year.
Based upon a review of revenues received and expenditures incurred during the first half of the fiscal year as well as additional information currently available, it is recommended that the budget be amended to reflect updated fiscal activities through the end of the current fiscal year.
Discussion
General Fund Proposed Budget Adjustments
The General Fund is the main operating fund for the City. The General Fund supports the City’s vital services and programs including police, fire, public works, community development, community services and general administrative services.
The Fiscal Year 2022-23 General Fund budget included revenue appropriations of $45.6 million and expenditure appropriations of $48.1 million with the difference of $2.5 million funded from General Fund reserves. As of December 31, 2022, General Fund revenues totaled $21.5 million or 47 percent of the budgeted amount. General Fund expenditures totaled $23.9 million, or 50 percent of the annual budget.
General Fund Revenues
The following are major changes to the revenue projections based on comparison with prior fiscal year and year-to-date actual collections as of January 2023. It is recommended that General Fund revenue appropriations be increased by $4.4 million.
Non-Departmental Revenues increased $1.1 million mainly due to improvement in Sales Tax and Transient Occupancy Tax. Below are the changes to non-departmental revenues.
Sales Tax – Increased $0.4 million due to gradual improvement in economy.
Card Room Business License Tax – Decreased $0.3 million due to lower-than-expected revenues.
Transient Occupancy Tax – Increased $1.0 million as travel gradually rebounds.
Vehicle-In-Lieu Fee – Increased slightly $0.1 million based upon actual collections.
Cannabis Business License Tax – Reduced $0.1 million based upon actual collections.
Department Revenues increased $3.3 million mainly due to increased community development activities in the city. Below are the changes to department revenues.
Police - Increased $0.3 million due to unanticipated overtime reimbursement.
Fire - Increased $0.2 million due to increase in fire plan check fees.
Public Works – Increased $0.2 million due to project reimbursement.
Community Development – Increased $2.4 million due to more development activities related to building, plumbing, electrical and mechanical permits.
Community Services – Increased $0.2 million due to higher program revenues and new grant from Expanded Learning Opportunities program.
General Fund Expenditures
The following are major changes to the expenditure projections based on comparison with prior fiscal year and year-to-date actual expenditures as of January 2023. It is recommended that General Fund expenditure appropriations be increased by $0.8 million.
Non-Departmental Expenditures increased $0.3 million mainly due to insurance and legal service expenses.
Insurance - Increased $0.2 million due to industry-wide changes in the insurance market.
Legal – $0.1 million due to one-time outside legal services.
Department Expenditures increased $0.5 million mainly due to changes below.
City Clerk – Increased $0.2 million due to receipt of invoice from County Election Office related to Special Election in November 2021.
Human Resources – Increased $0.1 million due to temporary services.
Police – Increased $0.1 million due to investigation testing and equipment maintenance.
Public Works – Decreased $0.1 million due to moving of traffic and street light expenses to Gas Tax Fund.
Community Services – Increased $0.2 million due to more program activities.
General Fund Transfer Out
Transfer $1.0 million to Economic Uncertainty Reserve to comply with the City’s Reserve Policy of 50% of the General Fund Operating Expenditures.
Transfer $22,000 to cover grant shortfall related to Paid Parking Program and Transit Public Parking Program.
Other Funds
Adjustments to budgeted revenues and expenditures in several other City funds are requested to more accurately reflect projected Fiscal Year 2022-23 activity. The proposed adjustments are detailed below.
Fund 219 Opioid Settlements Fund – New revenue of $25,000 will be used for Police Department.
Fund 252 Supplemental Law Enforcement Fund – Increased revenue of $0.1 million from Citizen’s Option for Public Safety (COPS) Program will be used for police personnel cost.
Fund 254 Grant Fund – Increased revenue of $28,000 from Officer Wellness and Mental Health Grant will be used for Police Department.
Fund 650 Major Maintenance Fund - Increased revenue of $0.2 million will be used for landscape maintenance.
Fund 220 Gas Tax – Increased expenditures of $0.1 million due to moving of traffic and street light expenses from General Fund.
Fund 265 Source Reduction/Recycling Fund – Increased expenditure of $5,000 for recycling program.
Fund 495 Marina Improvement Fund – Appropriation of $50,000 for landscape maintenance.
Fund 650 Major Maintenance Fund – No fiscal impact, reduced $0.2 million from Facility Replacement Project, and increased $0.15 million for facility operating charges and $0.05 million for Civic Center Carpet Replacement Project.
Fund 230 Child Care Program – Increased expenditures of $40,000 related to operating supplies and temporary personnel services.
Fund 299 Affordable Housing Fund – No fiscal impact, reallocated $0.1 million from 5890, 5900 and 6150 Christine Housing Projects to 4300 San Pablo Avenue Housing Project.
Fund 790 Bay-Shellmound Special Assessment District – Appropriation of $10,000 for legal services.
Transfer In
Transfer $1.0 million from General Fund to Economic Uncertainty Reserve to comply with the City’s Reserve Policy of 50% of the General Fund Operating Expenditures.
Transfer $22,000 from General Fund to cover grant shortfall related to Paid Parking Program and Transit Public Parking Program.
Staffing
The Community Services Department is requesting the following two staffing adjustments:
Reclassification of Recreation Supervisor to Recreation Manager This position will manage the Adult and Senior Services programs as well as the Child Development Center. The estimated annual General Fund cost of this reclassification is approximately $25,000. No additional funding is requested for the current fiscal year.
Restore Youth Services Program Coordinator
Two Program Coordinator positions were frozen and unfunded during the COVID-19 pandemic (one in Youth Services and one in Senior Services). The department has requested that the Youth Services Program Coordinator position be restored to support the increased demand for youth services. This position will allow for increased youth participation and increased youth participation fees of approximately $40,000 which will help offset the $110,000 cost of the position. The annual General Fund cost of this position is approximately $110,000. If approved, recruitment to fill the position will take several months. Funding for the position will be included in the Fiscal Year 2023-24 budget. No additional funding is requested this fiscal year.
ADVISORY BODY REVIEW
The Budget and Governance Committee and Budget Advisory Committee reviewed the Fiscal Year 2022-23 Mid-Year Budget and Adjustments on February 7th and 9th respectively. Both committees considered all changes and accepted staff’s recommendation.
Fiscal Impact
See Exhibit A for mid-year budget adjustment detail.
PREPARED BY: Lawrence Chiu, Finance Director
Approved and Forwarded to the
City Council of the City of Emeryville:
Paul Buddenhagen, City Manager
Attachments
Draft Resolution
Exhibit A - Fiscal Year 2022-23 Mid-Year Budget Adjustments Mid-Year Budget Review and Resolution Amending Fiscal Year 2022-23 Budget City Council Meeting | March 7, 2023
City of Emeryville
CALIFORNIA
MEMORANDUM