Special City Council
March 20, 2024

City of Fort Bragg
Mid-Year Budget FY 2023/24

TABLE OF CONTENTS
Introduction………. ...................................................................................................... 2 General Fund Financial Summary ............................................................................... 3-8 Water Enterprise Fund ................................................................................................. 9-11 Wastewater Enterprise Fund ....................................................................................... 12-13 Internal Service Funds ................................................................................................. 14-17 Budget Adjustment Requests at Mid-Year ................................................................... 19 Long-Term Financial Planning- General Fund ............................................................ 19-21 Fiscal Year 2024/25 Budget Preparation Schedule …………………………..…… ...... 22 Prioritized List of Financial Goals ……………………………………………………… ..... 22 City of Fort Bragg
Mid- Year Budget FY 2023/24

INTRODUCTION
The City operates on an annual budget cycle. Through the budget, the City Council approves revenue estimates and authorizes City staff to expend the City's limited financial resources. The City Council adopts an original budget prior to the start of each fiscal year, then makes adjustments to the budget throughout the year to reflect changes in expected revenues and to increase or decrease expenditures to address changes in policy or operational priorities.

As one of the many activities that the City undertakes to help ensure its financial soundness, Staff provides quarterly financial reports on the City's budget condition. Following the conclusion of the second quarter of the fiscal year (October through December), Staff conducts a second-quarter/mid-year budget review.

The City of Fort Bragg's mid-year performance Report addresses the financial activity during the first two quarters of FY 2023/24 (July through December). It helps determine whether the City is on track to meet the budget for the fiscal year or if adjustments are warranted. It also includes a projection of the fiscal year-end results, which serve as the starting point for the development of next year's budget and the long-term financial forecast.

The report focuses on the General Fund, Internal Service Funds, C.V Starr, and Water and Wastewater Enterprise Funds. Special Revenue and Capital Project Funds are not included in the City's base operating budget and, therefore, are not detailed in the Mid-Year Performance Report.

In reviewing this report, the following information should be taken into consideration:
 Revenues and expenditures are recorded during the period received or paid. As of January 31, accrual entries were made to associate January receipts and expenditures to the second quarter as appropriate.

Year-end accruals use a 60-day window and therefore are more exhaustive.  The schedule of revenues received varies according to the source of funding. As an example, property tax payments are received as follows: 55% in December, 38% in April, and 7% in August of the following fiscal year. The August payment is presented in the fiscal year to which it relates.  Although most expenditures occur monthly, there are some quarterly, semi-annual, and even annual expenditures. Examples include debt service payments, liability insurance, and audit fees.  This report is not meant to be inclusive of all finance and accounting transactions. It is intended only to provide the Council and the public with an overview of the State of the City's general fiscal condition. The report has been prepared by the City's finance department without audit and does not include many of the year-end adjustments required to bring the City's financial records into compliance with generally accepted accounting principles (i.e. accruals of sales and use tax revenues, payroll and other expenditures).

GENERAL FUND
City of Fort Bragg
Mid-Year Budget FY 2023/24

The General Fund supports many of the City's day-to-day operations, including police and fire protection, street and park maintenance, community development, and general administrative functions. The General Fund receives the broadest variety of revenues, and many of its revenue sources are cyclical in nature. By contrast, the revenue sources for the Enterprise Funds are received monthly and, as a result, are more evenly distributed throughout the fiscal year. The General Fund includes all services that are funded through general taxes. It is the funding source for all City programs except those that are paid for through dedicated taxes, user fees, impact fees, or grants.

FISCAL YEAR 2022/23 RECAP
For the fiscal year concluding on June 30, 2023, the General Fund closed with a budget surplus of $528,783, contributing to an increase in the Fund balance. However, this surplus was partially offset by the return of $3.5 million in Lease Revenue Bonds, resulting in an overall decrease in the fund balance from $8,592,235 to $5,975,337. Expenditures for the year totaled $10.6 million, marking a 27 percent increase compared to the previous year, as expenditures, especially personnel costs, returned to pre-pandemic levels.

Despite these changes, the General Fund maintained reserves, including an operating reserve of $1.6 million, a litigation reserve of $200k, and a recession reserve of $489k.

GENERAL FUND REVENUES OVERVIEW
General Fund revenue for the second quarter amounted to $6.02 million, which represents 52% of the amended budget. This figure compares favorably to the $5.4 million reported at the mid-year point of the prior fiscal year.

Projections suggest that General Fund revenue will reach approximately $11.7 million by the end of the fiscal year, slightly below the budgeted amount by approximately $13k.

The table below provides a breakdown of actual FY 2023/24 General Fund revenue collections up to December, comparing them with budgeted revenue estimates and the actual figures from the last two fiscal years for historical context. Additionally, it outlines the recommended changes to each category as part of this report.

The Fiscal Year 2023/24 Budget was formulated with the anticipation of potential declines in General Fund and other economically sensitive City fund revenues. This cautious approach reflects an acknowledgment of prevailing economic conditions and aims to maintain conservative budgeting practices while harboring a sense of cautious optimism as economic conditions evolve in 2024.

Transient Occupancy Tax and Sales Tax were forecasted to decline by 6% from the "best year to date" achieved in FY 2021/22. A comprehensive review of all General Fund revenue accounts has been performed

REVENUE SOURCE
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Transient Occupancy Tax $ 3,444,990 $ 3,192,486 $ 3,242,118 $ - $ 3,242,118 $ 1,621,059 $ 1,765,102 54% $ 144,043 $ 3,242,118 $ - Sales and Use Tax 2,215,161 2,146,974 1,959,500 - 1,959,500 979,750 1,105,665 56% 125,915 1,959,500 - Property Tax 1,150,352 1,141,020 1,150,257 - 1,150,257 575,128 236,079 21% (339,049) 1,150,257 - Other Taxes 851,622 953,026 903,985 - 903,985 451,993 420,754 47% (31,238) 903,985 - Sub Total Tax Revenue 7,662,122 7,433,505 7,255,860 - 7,255,860 3,627,930 3,527,600 49% (100,330) 7,255,860 - Licenses & Permits 86,176 94,598 94,293 - 94,293 47,147 39,322 42% (7,825) 95,493 1,200 Fines and Forfeitures 51,396 53,799 25,100 - 25,100 12,550 4,650 19% (7,900) 20,050 (5,050) Intergovernmental 30,089 15,538 30,000 - 30,000 15,000 - 0% (15,000) 30,000 - Use of Money/Property (166,316) (377,584) 90,000 - 90,000 45,000 387,448 430% 342,448 105,000 15,000 Charges for Services 62,387 91,600 81,343 - 81,343 40,672 53,481 66% 12,809 92,530 11,187 Operating Grant Revenue 133,985 571,569 647,262 81,900 729,162 364,581 394,060 54% 29,479 648,851 (80,311) Reimbursements 3,333,187 3,764,941 3,380,722 - 3,380,722 1,690,361 1,602,363 47% (87,998) 3,452,339 71,617 Other Revenue 22,576 143,257 20,200 - 20,200 10,100 20,889 103% 10,789 20,300 100 TOTAL REVENUES $11,215,601 $11,791,224 $11,624,780 $ 81,900 $ 11,706,680 $ 5,853,340 $ 6,029,814 52% $ 176,474 $11,720,423 $ 13,743

GENERAL FUND REVENUES
City of Fort Bragg
Mid- Year Budget FY 2023/24

based on activity through the year's first six months. Based on the available data through December, General Fund Tax revenues have continued the strong performance and are anticipated to end the year approximately $7.3 million in line with budgeted levels due to solid growth in Transient Occupancy Tax (TOT), Franchise tax and Sales Tax categories.

Partially offsetting this tax revenue growth is lower than anticipated Operating Grant Revenues to reimburse staff time administering these grants and carrying out Grant activities. Much of the reimbursable time is for Community Development Block Grant (CDBG), which includes: the Code Enforcement Program, Business Loans, Fire Station Rehabilitation design work, water meter replacement program, and general administration.

Similar to the prior year, these unspent funds will be transferred to the next fiscal year. There are no revenue adjustments included in the Mid-Year Budget Review.

Notable variances in Revenues are listed below.

 Transient Occupancy Tax (TOT)
Fort Bragg relies heavily on tourism, which contributes significantly to its revenue, constituting 28% of the total General Fund revenue. In FY 22, Transient Occupancy Tax (TOT) experienced a rebound from COVID-19 impacts, achieving its highest performance to date with $3.4 million in revenue by the end of the fiscal year.

FY 22/23 saw another strong showing for TOT, with an 18% growth of $186k compared to pre-pandemic levels.

However, despite this positive trend, receipts witnessed a 10% decline compared to the exceptional quarter recorded in FY 21/22, as outlined in the historical revenue figures provided. The Adopted Budget for FY 23/24 took a conservative approach, projecting just 1% growth. While July, September, and November revenues surpassed the prior year's figures, the other months experienced a 10% decline. Despite being down 2% compared to the same period last year, revenues have surged by 46% or $575k compared to pre-pandemic levels.

Fort Bragg's economy heavily relies on tourism, which contributes significantly to its revenue, accounting for 28% of the total General Fund revenue. In FY 22, the Transient Occupancy Tax (TOT) experienced a rebound from the impacts of COVID-19, reaching its highest performance to date with $3.4 million in revenue by the end of the fiscal year.

Considering the 7% decline experienced in the first two quarters, the results of the third quarter will be crucial in determining whether revenue adjustments are needed, especially if TOT fails to meet budget expectations.  Sales Tax:

The Sales Tax category includes General Sales Taxes, Local Sales Taxes, and Proposition 172 Sales Taxes.

Inflation accelerated last year as the U.S. economy recovered from the COVID-19 Pandemic. Prices rose as strong consumer demand—stoked by lower interest rates and government stimulus—collided with constrained supply chains and pandemic-related shortages. Russia's invasion of Ukraine in 2022 further spurred inflation worldwide, hitting food, energy, and other commodity prices.

The ongoing impact of the Federal Reserve's interest rate hikes on the economy remains a topic of concern among many analysts. This rate increases primarily aim to mitigate inflationary pressures by rendering borrowing

REVENUE SOURCE
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Transient Occupancy Tax $ 3,444,990 $ 3,192,486 $ 3,242,118 $ - $ 3,242,118 $ 1,621,059 $ 1,765,102 54% $ 144,043 $ 3,242,118 $ -

REVENUE SOURCE
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Sales and Use Tax 2,215,161 2,146,974 1,959,500 - 1,959,500 979,750 1,105,665 56% 125,915 1,959,500 - City of Fort Bragg
Mid-Year Budget FY 2023/24

more costly. The intended consequence is reduced spending by households and businesses, potentially resulting in slower wage growth as employers exercise caution in hiring. The Consumer Price Index, increased by 3.7% in September 2023 from the same month a year ago, pulled down by a drop in gasoline prices that was partially offset by higher food costs. The reading was down from 8.3% in August to 9.1% in June, the highest inflation rate in four decades. The CPI measures what consumers pay for goods and services a closely watched inflation gauge, rose 6% in February from a year earlier, down from a 6.4% gain the prior month, according to the Labor Department. It was the smallest increase since September 2021. Inflation has certainly eased from the 9.1% highs in June last year and is expected to fall to 3.1% by the end of 2023 and end in 2024 at 2.4%, which will impact consumer spending habits, particularly when making large purchases.

Locally, Quarter two results were $1,105,665 (56% of the total budget) in line with Budget projections. Compared to the prior year, Sales Tax was only down 3% but still up 9% compared to Pre-Pandemic, which is optimistic news for the City as this revenue category continues to record gains. All sales tax categories have experienced year-overyear growth, the largest of which includes Food Products, Construction, and transportation. In addition, the County Pool, where most online transactions are captured, has continued to grow. This growth is attributable to the Pandemic's sustained impact of redirecting significant activity to online sales. The recent growth in County Pool receipts has been fueled by online purchases during the Pandemic and is facilitated by the South Dakota vs.

Wayfair, Inc. Supreme Court decision in 2018, which provided states with the authority to require online retailers to collect sales tax even without a local presence in that State. The County Pool revenue is distributed to all cities within Mendocino County based on a distribution formula administered by the CDTFA.  Reimbursements
Reimbursements include the annual COPS grant reimbursements for the City's Community Service officers (CSO) costs ($159k), developer deposit reimbursements ($35k), and cost allocations transfers ($993k), which are considered a cost to the Enterprise funds but revenue to the General Fund. At mid-year, actuals totaled $1.6 million or 47 percent of the budget and are expected to come in over budget by $72k at the end of the fiscal year due to the timing of some of the reimbursements, the newly approved indirect cost reimbursement from eligible grants and the true-up of hours worked by Staff during the fiscal year per the City's Cost Allocation Plan.
 Operating Grant Revenues

Operating Grant revenues are currently at 54% of the budgeted amount at mid-year and are projected to end the year $80,311 below budget. This revenue category primarily consists of staff time reimbursement for administering the City's various grant programs and conducting grant-related activities. A significant portion of the reimbursable time is attributed to the BHJIS Grant for Social Liaison Officers and Community Development Block Grant (CDBG), encompassing activities such as the Code Enforcement Program, Business Loans, Fire Station Rehabilitation design work, water meter replacement project, and general administration.

The variance in revenue can primarily be attributed to the timing of reimbursements for certain CDBG Grants and other grants. These unspent grant funds will be carried over and utilized in the next fiscal year. It is noteworthy that the code enforcement department was transferred to the Police Department in the previous

REVENUE SOURCE
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Reimbursements 3,333,187 3,764,941 3,380,722 - 3,380,722 1,690,361 1,602,363 47% (87,998) 3,452,339 71,617

REVENUE SOURCE
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Operating Grant Revenue 133,985 571,569 647,262 81,900 729,162 364,581 394,060 54% 29,479 648,851 (80,311) City of Fort Bragg
Mid- Year Budget FY 2023/24

year. Currently, the program employs two code enforcement officers, with the program scheduled to conclude in March 2024.
 Other taxes
Franchise Fees are collected in the Cable Television, Solid Waste, and PG&E Electric. Through December, Franchise Fee receipts of $420k, in line with the mid-term budget and consistent with the prior year's collection level. As further discussed below, Electric and Gas Franchise Fees collected through December are formuladriven advance amounts, with the true-up occurring in April 2023. Based on historical collection trends, it is currently anticipated that overall Franchise Fees will meet or exceed budgeted levels by year-end. Revenues from Cable television franchise fees have slowly declined as more customers move to satellite and internetbased services.

Additionally, the Business License Tax collected was also down by $18k, which is consistent with the prior year as most Tax is collected during business license renewal season in February and March of each year.

STATUS OF GENERAL FUND EXPENDITURES
General Fund expenditures totaled $6.7 million for the first half of FY 2023/24, representing 57 percent of the amended annual budget. Appropriations of $11.5 million were adopted. Throughout the year, budgeted appropriations have increased by $363k resulting in an amended budget of $11.9 million. The following chart displays the year-to-date expenditures compared to the prior years.

Some of the notable variances in expenditures include:

REVENUE SOURCE
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Other Taxes 851,622 953,026 903,985 - 903,985 451,993 420,754 47% (31,238) 903,985 -

DEPARTMENT
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)

GENERAL
City Council $ 214,276 $ 224,220 $ 185,314 $ - $ 185,314 $ 92,657 $ 125,222 68% $ 32,566 $ 183,987 1,327 Administrative Services 1,225,232 1,066,104 1,037,505 49,654 1,087,159 543,580 516,580 48% (27,000) 1,078,732 8,427 Marketing & Promotions 226,875 210,230 240,650 11,808 252,458 126,229 103,647 41% (22,581) 252,458 - Finance 536,978 551,250 635,770 2,000 637,770 318,885 335,076 53% 16,192 542,703 95,067 Non-Departmental 985,342 967,992 1,138,196 3,338 1,141,534 570,767 888,306 78% 317,539 1,136,513 5,020 Community Contributions 97,297 70,231 147,588 27,369 174,957 87,479 135,183 77% 47,704 174,957 - DEBT SERVICE 547,580 3,793,587 556,303 - 556,303 278,151 124,770 22% (153,382) 555,971 331 COMMUNITY DEVELOPMENT 365,418 420,928 443,898 6,897 450,795 225,397 291,873 65% 66,476 429,844 20,950

PUBLIC SAFETY
Police Department 3,891,473 3,485,290 4,169,509 3,377 4,172,886 2,086,443 1,964,812 47% (121,631) 4,040,908 131,978 Social Services - 134,556 313,862 78,000 391,862 195,931 195,818 50% (113) 387,755 4,107 Fire Department 434,423 430,755 453,708 - 453,708 226,854 339,658 75% 112,804 449,099 4,609

PUBLIC WORKS
Administration & Engineering 679,782 684,218 934,012 156,395 1,090,407 545,204 399,281 37% (145,922) 962,676 127,732 Parks and Facilities 36,479 50,505 40,000 - 40,000 20,000 21,154 53% 1,154 40,000 - Street Maintenance 124,497 119,863 142,000 23,878 165,878 82,939 51,113 31% (31,826) 165,878 - Storm Drains 12,681 13,415 25,500 - 25,500 12,750 7,539 30% (5,211) 24,067 1,433 Corporation Yard 494,217 481,227 380,483 - 380,483 190,241 248,407 65% 58,166 449,345 (68,862) Traffic and Safety 24,873 84,488 39,500 1,078 40,578 20,289 10,579 26% (9,710) 40,578 - COST ALLOCATION 789,396 1,222,680 656,999 - 656,999 328,499 985,498 150% 656,999 656,999 - TOTAL GENERAL FUND EXPENDITURES $10,686,818 $14,011,539 $11,540,795 $ 363,793 $ 11,904,589 $ 5,952,294 $ 6,744,518 57% $ 792,223 $11,572,470 $ 332,118

GENERAL FUND EXPENDITURES
City of Fort Bragg
Mid-Year Budget FY 2023/24

 The Finance department is projected to end the year at $95,067 under budget primarily due to salary savings from the vacant Finance Director position vacated in January 2024, and the Accountant position vacant from December 2023. As of mid-year, the department budget is $335k, or 53 percent of the amended budget.
 The Non-Departmental category records expenditures not associated with a specific department of the City. These include Retiree Medical costs, Insurance costs, Utilities, and OPEB funding, to name a few.

Year-to-date actuals are at 78% of the annual budget and are projected to end the fiscal year with a positive variance of $6,020. The costs of REMIF liability and property premium payments paid in the first quarter were much lower than anticipated. Conversely, utility costs increased by 10%, and retiree medical were up by 3% from the adopted budget.

Additionally, a budget of $150k has been set aside to be contributed to Section 115 to accumulate and invest funds to smooth the impacts of future pension cost increases. A total of $1.6 million has been invested into the trust.
 The second half of the fiscal year will see the payment of $442,513 for the 2021 Lease Revenue Bond and $113,790 for Caspar Landfill closure costs. It's worth noting that the return of the $3.5 million Debt2021 Lease revenue bonds in August 2022 significantly reduced the City's debt from $11.4 million to $7.9 million, thereby reducing future annual debt payments.
 The Police Department has been actively addressing vacancies in both sworn and community service officer positions. During Quarter Two, the department successfully filled a vacant sergeant position, two officer positions, and one community service officer position. Looking ahead, plans are in place to send another recruit to the academy in the fourth quarter of the fiscal year. Due to these vacancies, the Department is projected to finish the fiscal year under budget by $151,978, offset by increases in the department's overtime and comp time budget. A budget amendment is requested to use the salary savings to offset the increases in overtime/comp costs.

Included in the police department is Project Right Now of $345,000 grant from the Youth Opioid Resistance Fund, allocated for a full-time position and a success coach. This grant, received in the last quarter of the prior fiscal year, is set to expire in the upcoming quarter. Furthermore, the Care Response unit, which falls under the public safety department, is another grant-funded program. The program received funding through 2025 via an expansion of the California Department of Health Care Services (DHCS) grant acquired in 2022. Notably, the Care Response unit has proven successful in delivering services and resources to address homelessness and mental health issues in the community, directly assisting over 300 community members in 2023.

The Code Enforcement Program, bolstered by $418,457 in Community Development Block Grants (CDBG), sustains two code enforcement grant officer positions. However, this funding is slated to conclude in the third quarter. The City is currently assessing if there is an alternative funding option for the program's continuity and will present a recommendation to the City Council accordingly. General fund salary savings will fund the program through the end of the fiscal year.  At mid-year, the Community Development Department has utilized 65% of the amended budget due to professional services overages and anticipates ending the fiscal year under budget by $21k. This is attributed to personnel cost savings resulting from the vacancy in the Director position. Plans are underway to commence recruitment for a full-time Community Development Director or a Senior Planner in the fourth quarter of the fiscal year. In the interim, the department has extended the contract of Marie Jones Consulting to fulfill planning obligations.

City of Fort Bragg
Mid- Year Budget FY 2023/24

 The Public Works department made operational changes by replacing the Project Analyst position with an Administrative position. This adjustment resulted in annual savings of approximately $30,000, which were reallocated to support the addition of a full-time Engineering Technician, increasing the department's full-time equivalents (FTEs) to eight. Furthermore, the special projects manager position was transferred to the public works department in the previous fiscal year. The projected budget surplus is $117,732, primarily attributed to a budget amendment during the fiscal year of $78k to add the two new positionscharging out employee salaries allocation to the enterprise department for the engineering technician.

Despite this surplus, the department's workload has remained busy, particularly with the $70 million water projects scheduled for the next three years.
 The Corporation yard department is made up of eight employees. A mid-year budget request for $20,000 to accommodate the addition of a Full-time Equivalent (FTE) Maintenance Worker. With an annual cost of $74,000, this position will be instrumental in addressing the City’s many backlog maintenance tasks, including parks, street signs, curb painting (10ft to 20ft), guest house museum, and other storm drain activities. The estimated year-end variance is attributed to the allocation of Maintenance work time which should be charged to the enterprise. This will be addressed during the Q3.

GENERAL FUND NET RESULT AND FUND BALANCE
With projected revenues totaling $11.7 million and total expenditures at $11.5 million, the General Fund is expected to conclude FY 2024 with a surplus of $163,952. This surplus will bolster the General Fund's balance to $2.8 million, representing a 1% increase compared to the previous year. It's worth noting that although the projected surplus is modest, expenditures, particularly personnel costs, have reverted to pre-COVID levels.

Additionally, additional staff has been hired across all departments including filling Director positions except for the Community Development and Finance Department, which is slated to be filled soon.

Moving forward into the next fiscal year, there will be increased pressure on the top tax revenue categories, specifically Transient Occupancy Tax and Sales Tax, to accommodate General Fund costs, particularly personnel expenses.

In the prior fiscal year, an initial investment of $1.6 million was deposited into the Section 115 trust with PARS.

While this investment decreased the General Fund reserves, there is an additional budget allocated for the Section 115 Trust.

Committed Reserves
Operating Reserves 2,095,784
Recession Reserves 547,759
Litigation Reserves 200,000
$2,843,543
FY 2023-24
Budget
FY 2023-24
Projected
Beginning Reserves $ 2,695,591 $ 2,695,591
Revenues 11,624,780 11,720,423
Expenditures (11,540,795) (11,572,470)
Net Transfers - -
Surplus/(Deficit) $ 83,985 $ 147,952
Ending Committed Reserves $ 2,779,576 $ 2,843,543
Committed Reserves as a %
of Operating 24% 25%
City of Fort Bragg
Mid-Year Budget FY 2023/24

WATER ENTERPRISE FUND
The Water Enterprise rate structure is operating as intended, effectively supporting all operational needs, maintaining the operating reserve, servicing debt obligations, and accumulating funds for infrastructure upgrades, replacements, and maintenance. At the close of Fiscal Year 2023, there was an annual net position increase to $16.7 million.

According to fiscal policy guidelines, the operating reserve is established at 25% of the prior year's operating expense, resulting in a set reserve of $342k for Fiscal Year 2023. Additionally, the Enterprise fund has established a recession reserve of $100k, equivalent to 5% of the Fund's operating budget.

The capital reserve recorded an increase of $153k, reaching a total of $4.7 million. The Capital Improvement Plan (CIP) for the Water Enterprise outlines a total of $85.9 million for identified capital projects over the next five years, with funding sourced from Grants and Enterprise capital reserves. With these resources in place, the Fund is wellequipped to advance numerous projects outlined in the FY 24 budget, as detailed on page 203.

REVENUES
 User fees entirely support Water Enterprise Fund revenues. As of the end of the second quarter, revenues surpassed expectations by $232k, reaching 58% of the budget. Previous water restrictions impacted revenue collection; however, with ample rainfall in the state, no restrictions are anticipated for the upcoming summer months. Projections indicate a year-end total revenue of $3.1 million, reflecting a 2 percent increase from the prior fiscal year. This increase is attributed to higher consumption levels, aligning more closely with pre-COVID totals. In the fourth quarter, a Request for Proposal will be issued for water and wastewater rates.

Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Operating Revenue $ 3,005,288 $ 3,018,464 $ 3,050,060 $ - $ 3,050,060 $ 1,525,030 $ 1,758,027 58% $ 232,997 $ 3,050,060 $ - Capacity Fees 44,837 91,608 50,000 - 50,000 25,000 5,425 11% (19,575) 15,000 (35,000) Grants Received 640,664 - - - - - -
Miscellaneous 44,837 63,639 60,100 - 60,100 30,050 11,004 18% (19,046) 41,000 (19,100) Total Revenue 3,735,626 3,173,710 3,160,160 - 3,160,160 1,580,080 1,774,456 56% 194,376 3,106,060 (54,100) Personnel services 1,039,332 1,175,299 1,192,854 - 1,192,854 596,427 584,941 49% (11,486) 1,165,726 27,128 Administration 683,735 700,106 473,565 - 473,565 236,782 234,576 50% (2,206) 473,565 - Repairs & maintenance 52,440 36,575 44,500 1,378 45,878 22,939 27,326 60% 4,387 45,878 - Materials & supplies 169,901 368,037 291,448 - 291,448 145,724 103,721 36% (42,003) 262,948 28,500 Utilities 147,423 174,940 175,000 - 175,000 87,500 91,501 52% 4,001 175,000 - Contractual services 93,135 90,394 93,000 29,258 122,258 61,129 18,560 15% (42,569) 112,258 10,000 Insurance 31,351 50,151 62,689 - 62,689 31,344 53,392 85% 22,048 62,689 - Other operating 35,035 6,415 10,500 - 10,500 5,250 677 6% (4,573) 10,500 - Interest/Debt Service * 55,434 67,764 65,289 - 340,080 170,040 294,689 87% 124,649 340,080 - Depreciation ** 364,752 364,563 - - - - 0% - - -
Total Expenditures 2,672,538 3,034,244 2,408,844 30,636 2,714,272 1,357,136 1,409,384 52% 52,248 2,648,644 65,628 Net Revenue/(Expense) $ 1,063,088 $ 139,467 $ 751,316 $ 445,888 $ 222,944 $ 365,073 82% $ 142,128 $ 457,416 11,528 * Audited results do not include payment of principal which is not an expense in full accrual accounting ** Depreciation Expense is not budgeted and therefore not included in calculation of budget variance

WATER ENTERPRISE
City of Fort Bragg
Mid-Year Budget FY 2023/24

EXPENDITURES

Water Enterprise's expenses for the first half of FY 2024 totaled $1.4 million, 58% of the amended annual budget.

The projected year-end total is $2.3 million, $41k under budget.  At mid-year, Debt Service is 87% of the total annual budget. Principal payments are paid in October and a second smaller interest payment is in April. The adopted budget includes the final loan payment of $337k for the 2014 Revenue refunding bond which will be paid off this fiscal year.  Repairs and Maintenance are 60% of the adopted and are forecasted to end the fiscal year at budget levels.

Most of these repair costs were undertaken in the first half of the year.  No other significant variances are expected in other enterprise expense category at year-end.

During the summer months of 2019-2022, the City faced significant water shortage challenges. To address these issues, City Staff proactively pursued alternative plans, such as implementing the Desalination Unit in 2021 and exploring alternative water sources and storage options, including the acquisition of the Highway 20 property.

Furthermore, the installation of new water meters, funded by the Community Development Block Grant (CDBG), will enhance the City's ability to detect leaks and monitor water usage in real time.

Projected revenues of $3.1 million and expenses of $2.6 million are anticipated for the Water Enterprise in FY 2022/23. With staff projections factored in, the Enterprise is expected to conclude the fiscal year with a net position of $13.2 million and reserves totaling $5.2 million.

The Enterprise Capital Reserve allocates $3.3 million for various Capital Improvement Projects (CIPs), including $812k for the Pudding Creek water main, $850k for the Distribution system, $500k for the raw water reservoir, $300k for the extended water system north, and $750k for the reclamation design.

In the previous fiscal year, the Enterprise fund acquired over 582 acres of property from the Mendocino Coast Recreation Park District for $2,420,579. This purchase will contribute to a reduction of reserves by $5.2 million in total. Staff remains proactive in securing Grant funds to support identified CIP projects, utilizing capital reserves for matching funds as needed. For a comprehensive list of scheduled Capital Improvement Projects for the Water Enterprise, please refer to pages 205-213 of the Adopted Budget. -
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000

WATER ENTERPRISE
City of Fort Bragg
Mid-Year Budget FY 2023/24

WASTEWATER ENTERPRISE FUND
The Wastewater Enterprise rate structure is functioning as designed and continues to fund all operations, maintain the operating reserve, provide for debt, and accumulate funds for infrastructure upgrades, replacements, and maintenance. The fiscal Year 2023 ended with an annual net position decrease of $1.2 million to $22.8 million. Per policy, the operating reserve is set at 25% of the prior year's operating expense, and for the Fiscal year 2024 was set at $625k.

REVENUES
Like the Water Enterprise fund, the projected year-end revenue for the current fiscal year is estimated to be $3.5 million or approximately $4k more than the original adopted budget but down from the prior year by 2%.

The septic dumping station recorded a $7k increase in operating revenues for the Fund.

EXPENDITURES
Wastewater Enterprise expenses totaled $1.4 million, 46% percent of the amended annual budget. The projected year-end total is $3.2 million, which is approximately $13k less than the budget:
 At year-end personnel, services are expected to be approximately $21k under budget, mainly due to savings in personnel costs from benefits in a couple of positions.  At the close of the fiscal year, the Non-Routine Maintenance division anticipates being under budget by approximately $29k for materials and supplies. However, CIRA insurance costs are projected to reach $112k, exceeding the budget by $42k. This increase is attributed to the actual costs incurred for the wastewater treatment plant, which was completed in 2021.

With projected revenues of $3.5 million and expenses of $3.2 million, Staff projects the Wastewater Enterprise to end FY 2024 with a net position of $26.1 million and reserves of $2.1 million. The decline in reserves in fiscal year FY 17/18 is a result of the Wastewater treatment plant construction in addition to grant funds- seen below.

Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved
Net Budget
Amendments
Amended
Budget
Pro Rated
Budget as
of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance
%
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Operating Revenue 407 $ 3,477,367 $ 3,390,904 $3,391,756 $ - $ 3,391,756 $ 1,695,878 $ 2,019,411 60% $ 323,533 $ 3,395,756 $ 4,000 Capacity Fees 415 112,468 44,221 120,000 120,000 60,000 68,374 57% 8,374 127,000 7,000 Miscellaneous Revenues416 20,319 181,799 20,000 20,000 10,000 9,500 48% (500) 20,000 - Total Revenue 3,610,153 3,616,924 3,531,756 - 3,531,756 1,765,878 2,097,285 59% 323,533 3,542,756 4,000 Personnel services 693,885 971,400 759,353 - 759,353 379,676 412,158 54% 32,481 737,852 21,500 Administration 1,225,605 1,430,931 713,395 - 713,395 356,697 355,631 50% (1,067) 709,395 4,000 Repairs & maintenance 175,875 95,853 142,750 25,696 168,446 84,223 89,021 53% 4,798 139,446 29,000 Materials & supplies 292,245 509,283 298,894 119,821 418,715 209,358 146,629 35% (62,729) 417,815 900 Utilities 222,967 305,844 300,000 - 300,000 150,000 196,785 66% 46,785 300,000 - Contractual services 360,280 446,764 411,701 303,775 715,476 357,738 167,345 23% (190,393) 715,476 - Insurance 49,798 56,506 70,633 - 70,633 35,316 112,645 159% 77,329 112,645 (42,012) Interest/Debt Service * 506 95,650 93,850 92,010 - 92,010 46,005 - 0% (46,005) 92,010 - Depreciation ** 829,815 816,894 - - - - 0% - - -
Total Expenditures 3,946,121 4,727,326 2,788,736 449,293 3,238,028 1,619,014 1,480,213 46% (138,801) 3,224,640 13,388 Net Revenue/(Expense) $ (335,967) $(1,110,402) $ 743,021 $ (449,293) $ 293,728 $ 146,864 $ 617,072 $ 462,334 $ 318,116 24,388 * Audited results do not include payment of principal which is not an expense in full accrual accounting ** Depreciation Expense is not budgeted and therefore not included in calculation of budget variance

WASTEWATER ENTERPRISE
City of Fort Bragg
Mid-Year Budget FY 2023/24

During the budget development, Staff identified a list of Capital Improvements Program (CIP) of $16.6 million needed to improve the Fund's infrastructure. A collection system rehab of $12 million is planned for FY 2024/25, with $1.5 million of Capital improvements budgeted for this fiscal year. -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Projections

WASTEWATER ENTERPRISE
City of Fort Bragg
Mid-Year Budget FY 2023/24

CV STARR ENTERPRISE FUND
The C.V. Starr Community Center and Sigrid & Harry Spath Aquatic Facility (C.V. Starr Center) represent a comprehensive 43,000-square-foot establishment. This multifaceted facility features an indoor water park, fitness and exercise rooms, weight rooms, and meeting spaces available for community use. The surrounding grounds complement the Center's offerings with amenities such as a dog park, Skateboard Park, and petanque courts. Ownership of the C.V. Starr Center lies with the City, and its operational, maintenance, and capital improvement costs are partially mitigated through restricted sales tax and property tax revenues.

These dedicated funds are specifically allocated to the C.V. Starr Enterprise Fund, ensuring a financial framework to support the ongoing success of the facility.

The city has engaged in a contractual arrangement with the Mendocino Coast Recreation and Parks District (MCRPD) for the day-to-day operation and maintenance of the C.V. Starr Center. However, a significant development occurred in August 2023 when the MCRPD Board issued notice to terminate the operating agreement. The MCRPD allowed for a 6-month transition to facilitate a smooth transition. In response to this change, the CV Starr Ad-Hoc Committee, in collaboration with City Staff, has diligently formulated a comprehensive plan. The C.V. Starr Center has transitioned into City operations in February 2024. This strategic plan ensures the continued provision of services and facilities to the community, aligning with the City's commitment to its residents' well-being and recreational needs.

Revenue from general admissions includes fees collected from drop-in visits, membership sales, and other admissions. The Center faced closures during the COVID-19 pandemic, affecting membership sign-ups and drop-in visits. Safety measures such as
continued mask usage (except in the pool area),
closure of showers to minimize unmasked time,
and capacity restrictions during Open Swim and
Swim Slide Splash sessions contributed to this
revenue shortfall.

Despite these challenges, membership revenue
and general admissions have rebounded,
reaching 61% by the end of the second quarter
since reopening. Additionally, rate increases
approved by the City Council in the second
quarter, effective January 2024, are expected to
generate an estimated $90k in additional revenue. It is gratifying to note that our sales tax figures are in line Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2022
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.

Actual
Estimated Year
End
Forecast
Surplus/
(Shortfall)
Operating Revenue $ 599,048 $ 596,248 $ - $ 596,248 $ 298,124 $ 363,373 61% $ 65,249 $ 626,746 30,497 Sales Tax 1,211,340 1,175,441 1,199,769 1,199,769 599,885 616,476 51% 16,591 1,199,769 - Property Tax 268,596 305,258 283,127 283,127 141,563 167,899 59% 26,336 283,127 - Other Income 982,537 111,910 40,000 40,000 20,000 2,457 6% (17,543) 40,000 - Total Revenue 2,462,473 2,191,657 2,119,144 - 2,119,144 1,059,572 1,150,205 54% 90,633 2,149,642 30,497 Personnel Costs 826,436 1,168,544 1,439,777 - 1,439,777 719,888 646,116 45% (73,773) 1,312,850 126,927 Operations 267,253 358,038 172,411 - 172,411 86,206 60,616 35% (25,590) 155,231 17,180 Repairs & maintenance 5,451 46,441 60,000 7,247 67,247 33,624 25,514 38% (8,109) 55,000 12,247 Utilities 321,693 365,941 350,000 - 350,000 175,000 187,367 54% 12,367 350,000 - Professional Services 19,900 56,986 35,419 15,000 50,419 25,210 29,825 59% 4,616 67,500 (17,081) Insurance - 60,229 30,208 - 30,208 15,104 13,895 46% (1,209) 30,208 - Depreciation ** - 650,590 - - - - 0% - - -
Total Expenditures 1,440,733 2,706,769 2,087,814 22,247 2,110,061 1,055,031 963,333 46% (91,698) 1,970,788 139,273 Net Revenue/(Expense) $ 1,021,740 $ (515,112) $ 31,330 $ (22,247) $ 9,083 $ 4,542 $ 186,872 2057% $ 182,331 $ 178,854 169,770 Capital Improvements - 5,996 1,678,226 306,176 1,992,402 996,201 166,679 8% (829,522) 405,982 1,586,420

CV STARR ENTERPRISE
1500
1600
1700
1800
1900
Active CVSCC Memberships
Nov-23 Dec-23 Jan-24 Feb-24
City of Fort Bragg
Mid-Year Budget FY 2023/24

with quarterly budget projections, indicating that we are on track to meet our overall budget expectations of $1.2 million.

Property tax funds are typically received in the third quarter of the fiscal year, aligning with our budget planning and contributing to the overall financial well-being of the Center.

Cost cutting Measures
Since assuming management of the Center, the City of Fort Bragg has embarked on several cost-saving initiatives to enhance operational efficiency and drive membership growth. A significant step was the consolidation of fitness class offerings from 70 to 27, ensuring a more financially sustainable program.

Additionally, fitness instructors—excluding those certified in Silver Sneakers—have transitioned from employee status to independent contractors. This move aims to uphold instructional quality while enhancing cost-effectiveness. Plans are in progress to expand class offerings under this revised model.

To further streamline operations, staffing needs were meticulously evaluated across departments, resulting in certain positions transitioning to part-time roles or remaining vacant in Guest Services and Administration.

Moreover, due to staffing shortages, the Center temporarily suspended operations on Sundays, yielding personnel cost savings equivalent to 45% of the personnel budget at mid-year.

Efforts are underway to recruit lifeguards to fill at least five vacant part-time positions, ensuring seamless operations seven days a week, including holidays, and upholding safety standards. In July 2024, eleven fulltime employees will begin receiving City benefits (Dental, Medical, Vision, and CalPERS), with these costs factored into the Fiscal Year 2025 budget development.

A mid-year budget amendment of $24,851 is proposed for IT network upgrades, focusing on monitoring and security, as well as a new Wi-Fi system at the Center. These expenses will be offset by savings in other expense categories such as Operations and Repairs and Maintenance, which are anticipated to end the fiscal year under budget due to cost-saving measures. As we progress through the fiscal year, we remain committed to prudent financial management, ensuring that our budget allocations align with our operational needs and strategic goals.

The CV Starr reserves are expected to reach $2,856,538 by the end of the fiscal year, reflecting a notable increase of $405,982. However, the Center has allocated $2.6 million for Capital Improvement Program (CIP) projects over the next four years, which is anticipated to deplete the reserves. In response, the City is proactively pursuing grants to mitigate these expenses and alleviate the financial burden on the CV Starr reserves.
$645,608
$1,489,006
$2,274,705 $2,450,556
$2,856,538
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Projections

CV STARR RESERVES
City of Fort Bragg
Mid-Year Budget FY 2023/24

INTERNAL SERVICE: FACILITIES REPAIR & MAINTENANCE
Internal Service Funds-Facilities fund accounts for the maintenance of all City-owned buildings.  No significant revenue variances are expected.
 The repairs and maintenance
schedule are listed below, with a
$22,500 maintenance budget. Due to
staffing, only the park bathrooms,
fencing for Noyo Headlands Park,
and miscellaneous repairs and
maintenance will be undertaken this
year- most of the scheduled work will
be moved to the next fiscal year, with
the rest of the projects to be
evaluated during the FY 2025
Budget process and moved to the
next fiscal year.

FACILITY ISF 10-YEAR MAINTENANCE PROGRAM
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
FY 21/22
Adopted
Budget
Approved
Net Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance
%
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Operating Revenue $ 4,143 $ 16,216 $ 500 $ - $ 500 $ 250 $ 250 50% $ - $ 500 $ - Interdepartmental Charges 200,959 288,548 210,000 - 210,000 105,000 105,000 50% - 210,000 - TOTAL REVENUES 205,101 304,764 210,500 - 210,500 105,250 105,250 50% - 210,500 - Personnel Services 105,998 186,907 105,998 - 105,998 52,999 52,999 50% - 105,998 - Repairs & Maintenance 15,601 22,469 22,500 - 22,500 11,250 4,549 20% (6,701) 16,000 6,500 Depreciation - 6,800 - - - -
TOTAL EXPENDITURES 121,600 216,176 128,498 - 128,498 64,249 57,548 45% (6,701) 121,998 6,500 Net Revenue/(Expense) $ 83,501 $ 88,588 $ 82,002 $ - $ 82,002 $ 41,001 $ 47,702 58% $ 6,701 $ 88,502 6,500

ISF-FACILITIES
MAJOR PROJECTS/REPLACEMENTS FY: 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 Annual
Average
General
Fund
Water
Enterpris
e
Wastewat
er
Enterprise
City Hall 5,000 5,000 - - - - - - 1,250 625 313 313
City Hall East 4,000 3,500 - - - - - - 938 938 - -
Fort Building - - - - - - - - - - - -
Town Hall - - - 3,000 - - - - 429 214 107 107
Fire Station, Main St - - - - - - - - - - - -
Fire Station, Hwy 20 - - - - - - - - - - - -
Guest House - - - - - - 110,000 - 500 500 - -
Police Department - - - - - - - - 3,143 3,143 - -
Noyo Headlands Park 4,500 - 30,000 5,000 - - - - 8,214 8,214 - - Pomo Bluffs Park 9,000 - - - - 40,000 - - 1,125 1,125 - - Noyo Beach - - - - - - - - - - - -
Corp Yard - - - - - - - - - - - -
Harbor Lite Trail - - - - - - - - - - - -
TOTAL major projects 22,500 8,500 30,000 8,000 - 40,000 110,000 - 15,598 14,759 420 420 General Repairs Facilities $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL preventative maintenance $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL PROJECT FUNDING NEED: $22,500 $8,500 $30,000 $8,000 $0 $40,000 $110,000 $0 $15,598 $14,759 $420 $420 Note: CIP projects that are designated in the "Beyond CIP" category have all been placed in 6th year of the ISF, FY 2023/24 680,030
567,674
506,176
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
FY 21/22 FY 22/23 Projected FY 23/24

FACILITIES (ISF) RESERVES
City of Fort Bragg
Mid-Year Budget FY 2023/24

INTERNAL SERVICE: INFORMATION TECHNOLOGY
INTERNAL SERVICE: INFORMATION TECHNOLOGY (IT)
Information technology accounts for all activities of the City's computer networks, the costs of which are distributed among user departments using equitable formulas.  No significant variances are expected in the revenue category.  The Materials and Supplies account covers all expenses related to IT software and hardware essential for maintaining the City's computer networks. Projections indicate that expenditures for this category will surpass the budget by $35,576 by the end of the fiscal year. This increase reflects the doubling of the City's IT budget over the past two fiscal years, driven by the escalating number of cyber threats targeting organizations globally, irrespective of their size or type. As part of the mid-year Budget request, we are seeking approval to purchase hardware servers for $29,965, a Cisco XDR system for $4,462, and make the final payment of $14,272 for our phone systems.  Contractual services, are projected to end the year under budget, due to the postponing of work to the next fiscal year. These savings are recommended to offset some of the overages in materials and supplies.

Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
FY 21/22
Adopted
Budget
Approved
Net Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance
%
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Interdepartmental Charges 497,457 577,972 612,088 - 612,088 306,044 306,044 50% - 612,088 - TOTAL REVENUES 497,457 577,972 612,088 - 612,088 306,044 306,044 50% - 612,088 - Personnel Services 101,970 176,260 228,798 - 228,798 114,399 125,060 55% 10,661 228,692 106 Repairs & Maintenance 1,964 1,862 4,200 - 4,200 2,100 451 0% (1,649) 4,200 - Materials & Supplies 415,508 314,469 425,785 - 425,785 212,893 197,337 46% (15,556) 461,361 (35,576) Contractual Services 390 - 50,000 - 50,000 25,000 4,500 0% (20,500) 21,200 28,800 Depreciation 15,450 16,081 - - - - 0% - -
TOTAL EXPENDITURES 535,282 508,672 708,783 - 708,783 354,392 327,347 46% (27,044) 715,453 (6,670) Net Revenue/(Expense) $ (37,825) $ 69,299 $ (96,695) $ - $ (96,695) $ (48,348) $ (21,303) 22% $ 27,044 $ (103,365) (6,670) ISF-IT
78,506
(75,158)
(150,523)
(200,000)
(150,000)
(100,000)
(50,000)
-
50,000
100,000
FY 21/22 FY 22/23 Projected FY 23/24

IT (ISF) RESERVES
City of Fort Bragg
Mid-Year Budget FY 2023/24

INTERNAL SERVICE: FLEET
RNAL SERVICE: FLEET
Fleet and Equipment services account for all activities of the City's central garage operations, the costs of which are distributed among designated user departments using equitable formulas.  USDA Grant Reimburses the City for 50 percent of the vehicle cost. Staff will be applying for the reimbursement of PD vehicles purchased, amounting to $29,954, and asset forfeiture reimbursements for upfit costs. Total projections for reimbursements from the two funding sources will be $106,316.  Fuel prices have once again risen in
January and February 2024. With the
City's average fuel cost standing at
approximately $8,630 per month, fuel
expenses are expected to exceed the
budget by $10,000. A budget request
has been submitted to cover these
overages.
 Vehicle repairs and maintenance average monthly cost is about $5,150 annually. During the first two quarters, the mechanic repaired the Vactor Truck which incurred unanticipated costs for truck rental and repairs. This expense category is at 74% of the Budget. A budget amendment request of $35,000 is requested to ensure there are enough funds to cover ongoing repairs and maintenance.

RESERVES
Projected revenues for the Fleet Internal Service Fund are estimated at $586,000, with expenses totaling $585,000. This will result in the fund ending the fiscal year with a reserve balance of $177,313. During the budget development for the next fiscal year, staff will conduct a thorough review of the replacement plan schedule to ensure there are adequate operating revenues to fund the replacement of city vehicles. Additionally, aside from USDA reimbursements, Asset Forfeiture funds can be utilized as an eligible source to cover upfit costs for Police Department vehicles.

Audited
FY 2021/22
Actuals
Audited FY
2022/23 Actuals
FY 23/24
Adopted
Budget
Approved
Net Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance
%
Variance
Budget vs.

Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Interdepartmental Charges 342,308 962,994 479,513 - 479,513 239,757 239,757 50% - 479,513 - Reimbursements - 198 5,000 5,000 2,500 2,500 0% - 106,316 101,316 TOTAL REVENUES 342,308 963,192 479,513 - 484,513 242,257 242,257 50% - 585,829 (101,316) -
Personnel Services 150,409 139,004 132,280 - 132,280 66,140 78,605 59% 12,465 132,280 0 Repairs & Maintenance 51,986 72,845 52,000 - 52,000 26,000 38,630 74% 12,630 87,000 (35,000) Materials, Fuel & Supplies 99,586 83,155 92,300 - 92,300 46,150 55,328 60% 9,178 102,300 (10,000) Vehicles 221,526 - 195,000 68,086 263,086 131,543 134,931 51% 3,388 263,086 - Contractual Services 439 1,797 1,000 - 1,000 500 - 0% (500) 800 200 Depreciation 69,881 110,391 - - - 0% -
TOTAL EXPENDITURES 593,826 407,193 472,580 68,086 540,667 270,333 307,494 57% 37,161 585,467 (44,800) Net Revenue/(Expense) $ (251,518) $ 556,000 $ 6,933 $ (68,086) $ (56,154) $ (28,077) $ (65,238) 116% $ (37,161) $ 362 56,516

ISF-FLEET
City of Fort Bragg
Mid-Year Budget FY 2023/24

BUDGET ADJUSTMENT REQUESTS AT MID-YEAR
Staff is requesting the following budget adjustments at mid-year. Today, the Council will not be asked to take official action on these requests. However, if the Council agrees, Staff will bring the adjustments back at a future Council meeting, where they will be included on the consent calendar for approval.

Account
Number Account Description Department
Current
Budget
Budget
Amendment
Request
Adjusted
Budget Justification Funding Source

EXPENDITURES
110-4190-0356 Charge Point Non-Departmental $ 3,000 $ 4,300 7,300 ChargePoint Expenses - damaged equipment 110-4190-0360 Property Premiun Non-Departmental 87,331 (4,300) 83,031 Reduce Budget, Cost Savings based on actuals Net 90,331 - 90,331
Public Works
110-4330-0310 Engineering Public Works $ 27,041 $ 9,000 $ 36,041 Fire Station Contract for surveying, Amount exceeds CDBG funding available 110-4330-0211 Medical Premium Public Works 149,536 (9,000) 140,536 Reduce Budget- Salary/Cost savings 110-4570-0101 Salaries & Wages -Corp yard Public Works 207,325 20,000 227,325 Add a FTE-Maintenace Worker 1 position (Q4), Eliminate Seasonal Position 110-4330-0101 Salaries & Wages -EngineeringPublic Works $ 703,384 $ (20,000) 683,384 Reduce Budget- Salary savings Net 1,087,286 - 1,087,286
Police Department
110-4200-0101 Salaries & Wages Police Department $ 1,976,398 $ (122,680) 1,853,718 Salary Savings 110-4200-0102 Overtime Police Department 84,837 81,151 165,988 Increase to Overtime Budget, due to unfilled positions 110-4200-0103 Comp Time Police Department 34,043 41,529 75,572 Increase to Comp Time Budget, due to unfilled positions 110-4200-0366 Training/Travel Reimb Police Department 35,000 20,000 55,000 Increase to Training & Travel Budget 110-4200-0367 PD Recruit Training Police Department 40,000 (20,000) 20,000 Reduce Budget, Cost Savings, sending recruit to Academy in fourth quarter.

Net $ -
Community Development
110-4320-0101 Salaries & Wages CDD $ 310,933 $ (30,000) $ 280,933 Reduce Budget Salary Savings 110-4320-0319 Professional Services CDD 18,897 30,000 48,897 Planning Consultant - Increase contract 329,830 - 329,830
Finance/Administration
110-4130-0319 Professional Services Administration 60,462 40,000 $ 100,462 City of Fort Bragg Strategic Plan/Goal Setting 2024-2029 110-4150-0101 Salaries & Wages Finance 366,345 (40,000) $ 326,345 Reduce Budget- Salary/Cost savings unfilled position Net $ 329,830 $ - $ 329,830
710-4712-0360 Insurance Wastewater $ 70,632 $ 42,012 $ 112,644 Property Insurance * Pay with Budget savings 710-4712-0231 Workers compensation Wastewater 43,888 (19,375) 24,513 Cost savings in workers compensation (actuals) 710-4712-0376 Medical Safety Supplies Wastewater 7,000 (4,000) 3,000 Cost savings based on YTD and projections for the remaining quarter 710-4712-0366 Training and Travel Wastewater 6,000 (5,000) 1,000 Cost savings based on YTD and projections for the remaining quarter 710-4712-0220 Pers Wastewater $ 93,978 $ (25,592) $ 68,386 Cost savings in PERS (actuals) Net $ 70,632 $ (11,955) $ 112,644
810-4812-4111 IT Costs 25,496 24,581 50,077 IT Costs to improve Network and CV Starr 810-4812-0365 Printing & Copying 8,000 (4,000) 4,000 Reduce Budget amount, based on Actuals Q1 & Q2 810-4812-0343 Chemicals 25,000 5,000 30,000 Increase in chemical costs 810-4815-0377 Pool Side Supplies 9,300 (4,000) 5,300 Reduce Budget amount, based on Actuals Q1 & Q2 810-4815-0375 General Supplies 4,000 (3,000) 1,000 Reduce Budget amount, based on Actuals Q1 & Q2 810-4812-0311 Legal Costs 2,000 5,000 7,000 Reduce Budget amount, based on Actuals Q1 & Q2 810-4812-0366 Training and Travel 9,000 (6,000) 3,000 Reduce Budget amount, based on Actuals Q1 & Q2 810-4812-0351 Equipment Repair and Maint 5,000 (5,000) - Reduce Budget amount, based on Actuals Q1 & Q2 810-4815-0373 License and permits 8,000 (5,000) 3,000 Reduce Budget amount, based on Actuals Q1 & Q2 810-4815-0751 CV Starr CIP 1,992,402 (1,586,420) 405,982 HVAC System engineering only this fiscal year.

Net $ 2,088,198 $(1,578,839) $ 509,359
521-4394-0384 Licensing, Software & Maint IT $ 313,673 $ 18,734 $ 332,407 Cisco XDR $4,462.50, Phone $14,272 Operating Appropriation 521-4394-0319 Professional Services IT 50,000 (28,800) 21,200 Reduce Budget, postpone project to next fiscal year. 521-4394-0382 Hardware Expenses IT 55,392 29,965 85,357 Hardware Server $29,965.42 $ 419,065 $ 19,899 $ 438,964
522-4550-0352 Vehicle Repairs Fleet -ISF $ 40,000 $ 35,000 $ 75,000 Unanticipated Vac truck repairs and rental. Monthy parts and repair avg. $5,150.
522-4550-0382 Fuel & Lubricants Fleet -ISF $ 90,000 $ 10,000 $ 100,000 Increases in fuel costs $ 130,000 $ 45,000 $ 175,000
651-6007-0310 Raw Water Line Replacement Design 871,558 81,429 952,987

CAPITAL IMPROVEMENT PROGRAM (CIP)/SPECIAL REVENUES

WASTEWATER ENTERPRISE
FLEET- ISF (522)
FY 2023/24 Requested Mid-Term Budget Adjustments

GENERAL FUND
CV STARR ENTERPRISE (810)
INFORMATION TECHNOLOGY - ISF (521)
City of Fort Bragg
Mid-Year Budget FY 2023/24

LONG-TERM FINANCIAL PLANNING
Long-term financial planning is an important tool used to help maintain ongoing financial sustainability and helps governments provide a consistent level of services to their citizens. The General Fund Financial forecast is intended to be a tool that provides a rational forecast of where the City’s financial position will be in five years.

Staff annually updates a five-year General Fund financial forecast to evaluate the City’s financial condition and help develop the City’s Budget.

Economic Trends
It caps off a year in which the economy defied expectations that it would plunge into recession. The economic outlook for the United States through 2024 suggests that the actions of the Federal Reserve will play a crucial role in shaping the pace of economic growth. The substantial growth in real GDP during the last quarter of 2023, which increased by 4.9%, highlights a robust period of economic expansion, significantly outpacing the annual growth rate of 2.9%. This surge is attributed mainly to an uptick in consumer spending, asset investments, and government expenditures, indicating a strong demand-side boost to the economy.

Despite this optimistic growth, the economic landscape is clouded by persistent uncertainties around inflation, which, although reduced from 6.5% in the previous year to 3.3% year-over-year by the end of December 2023, remains a concern for policymakers and economists. The reduction in inflation suggests that previous measures might be starting to bear fruit, yet the current rate still exceeds the Federal Reserve's long-term target of 2%, keeping the debate around further monetary tightening or policy adjustments alive.

Interest rates, which are a primary tool for the Federal Reserve in managing economic stability and inflation, are said to be moderating. However, the lack of clarity regarding potential major revisions to these rates adds another layer of uncertainty. The Federal Reserve's future decisions will likely hinge on balancing the need to control inflation without stifling economic growth, especially in a context where consumer spending and investment are driving expansion.

On the employment front, the increase in the state unemployment rate to 5.1% in December 2023 from 4.1% in the previous year indicates a slight softening in the labor market. This change might reflect various factors, including adjustments in the economy post-pandemic, shifts in workforce participation, or sectors' differing paces of recovery. While higher than in 2022, the unemployment rate is notably lower than the 7.7% seen in December 2021, suggesting a significant recovery from the pandemic's peak impacts.

In summary, the U.S. economy is at a critical juncture as it enters 2024. The Federal Reserve's policy decisions will be instrumental in steering the economy toward sustained growth while managing inflationary pressures. The interplay between continued consumer spending, investment, government expenditures, and the evolving monetary policy landscape will define the economic trajectory in the coming months. The ultimate challenge for policymakers will be to navigate these dynamics effectively, ensuring that growth is not only preserved but also inclusive, laying a solid foundation for long-term economic stability.

Based on the latest sales tax forecast ending September 30, 2023, statewide taxable sales down by 3.2% overall compared with the previous year and the County-wide recording declines of 6.4%, with the City gaining 0.7%.

Revenue of Autos & Transportation sales tax revenue is up 2.7% year-over-year, and nearly 10% in the last quarter alone. Fuel & Service Stations are up 1.9% from prior year though overall fuel prices have been steadily coming down. Therefore, the conservative approach taken in this forecast has limited growth in the near term to 2% with steady incremental increases over the five-year forecast horizon.

City of Fort Bragg
Mid-Year Budget FY 2023/24

Long-term forecast
Sales tax revenues have decreased slightly in recent months, but this is inevitable in the face of declining inflation.

Ultimately, such declines are often mitigated by the increases in other revenue sources. For instance, property taxes are counter-cyclical to a high inflation environment, so when high inflation abates, interest rates will also fall creating higher value to homeowners and greater tax revenues to the City as well as relieving pressure on those unwilling to refinance in a high-rate environment. This means more revenue through property development and existing home sales.

Although the City still faces significant needs for services and capital improvements, it remains in a strong financial position with reserves over the Council’s 25% goal to meet unforeseen needs. Also, it is important to note that the pension cost calculated in this forecast uses the latest actuarial report issued in June 2023 and through June 30, 2022, which reflects -6.1% investment loss that was reported by CalPERS for the fiscal year ending June 20, 2022. Such losses are driving significant increases to the City’s unfunded accrued liability (UAL) determined by CalPERS. Pension costs have been projected to increase in 24/25 and thereafter as a result of new Unfunded liability (UAL) added by the -7.5% return recorded by CALPERS and almost 0% return projected for 2023.

This is an estimated 1% higher than prior CalPERS estimates to factor in the yet unknown impact of CalPERS not reaching the target earnings rate for the last two years. The target earnings rate is 6.8% but the investment return for FY 2018-19 was 6.7% FY 2019-20, just 4.7% and a very strong performance of 21.3% for FY 2020/21.

Over a 20-year period, the overall CalPERS fund performance has averaged just 5.5%. The unfunded pension liability for the fiscal year that ended June 30, 2023, is $6.4 million.

Like most cities in California, Fort Bragg will see increases in its unfunded liability in 2024/25 payments with little or no reduction in the overall unfunded liability helped by the City adopting a Pension Policy and issued $11.4 million in taxable Lease Revenue Bonds in 2021 to restructure the UAL Debt with CALPERS. Proceeds of $7.5 million were used to reduce the City's unfunded pension liability, with an additional $3.5 million set aside for City projects which were later returned to reduce the City's debt. The record positive CalPERS investment return mentioned above, the $7.5 million liability payment, and the setting up of a Section 115 Trust with PARS placed the City in a better position to manage pension obligations. However, recent negative returns by CALPERS in June 2022 have caused UAL to increase.

The table on the following page includes three years of audited results for context as well as projected results for six additional years into the future. Four "what-if" scenarios are provided, showing possible long-term results if certain revenue enhancements were enacted.

In Fiscal Year 2018-19, the citizens of Fort Bragg voted on a ballot initiative entitled Measure H. Measure H was a proposed general sales tax aimed at closing the budget gap caused by skyrocketing pension costs. With additional revenue, the City planned to enter into a shorter amortization schedule with CalPERS for payment of unfunded liabilities. Although this would have resulted in a higher annual payment, it would have saved the City nearly $4 million of interest cost over 15 years. Measure H was not successful.

With the defeat of Measure H, the City took steps to close the budget gap on the expenditure side. The Administrative Services department eliminated the position of Administrative Services Director and the Police Lieutenant. Additionally, in FY 2019-20, the Community Development Director terminated employment with the City, this position was replaced with a lower-cost Planner position.

The City's General Fund operated at a record surplus for FY 2020/21, and the fund balance improved by nearly $1.5 million. The Surplus was the result of deep budget cuts early in the Pandemic, which reduced Staff and services and the previously discussed increases in TOT and sales tax revenue as tourism rebounded. In May, 2020, the City laid off four full-time employees, froze two positions in the Police Department, and furloughed City of Fort Bragg
Mid-Year Budget FY 2023/24

another twelve employees, 50% to 75% of their regular hours. The furloughed Staff was returned to full-time status in August 2020, but several of the laid-off positions remain vacant. In addition, the City did not replace two positions (Finance Director and Assistant City Engineer) that became open in late June. As the reliance and demand for City services continue to grow, one of the challenges the City faces is the same as many other employers – recruiting and retaining qualified Staff.

The City adopted a balanced General Fund budget for FY 2022 and projected a small surplus of $47k and $175k in FY 22/23. While the Surplus was small, the budget included $150k to pay down pension obligations, a budget for the Police Chief position, and a new City Manager position with relatively modest revenue projections.

The long-term forecast indicates that in the next year or two, the City will likely be able to fill budgeted or realized deficits with appropriated fund balance. Revenue enhancements and/or additional cost-cutting measures will likely be necessary within two years. The long-term forecast includes four "what-if" scenarios showing the effect of a variety of different hypothetical revenue generators and cost reductions. Staff recommends that the City Council pursue a general sales tax measure again at the next opportunity or identify new sources of revenues.

In addition to pursuing a general sales tax measure, the City could leverage accumulated funds from the internal service funds, enterprise funds, debt borrowings, and other expense reductions or revenue-generating opportunities.

The General Fund’s main revenue source of transient occupancy taxes and sales tax are exceeding initial expectations, however recently there has been a slowdown in property sales and higher property valuations.

Sales taxes increase but at a lower level than in previous years. Uncertainties that may impact future operating positions are listed in the following table with actions to manage these uncertainties.

Uncertainty Actions to Manage/Mitigate this Uncertainty Inflation Seek other revenue sources or adjust service fees to offset increases in costs
Economic Downturn/Recession Maintain a General Fund Emergency & Operating Reserves at 25%
Future Police Association Contract
Costs 2024
Maintain a positive operating position to absorb larger cost increases in the future
Future SEIU Contract Costs 2025 Maintain a positive operating position to absorb larger cost increases in the future
Service Changes/Council Priorities:
-Housing
-Infrastructure
-Broadband
-Pension Unfunded Liability
Seek other revenue sources or adjust service fees or
levels to offset increases
These uncertainties could create annual impacts on the General Fund and its operating position. The Long Term Financial Plan is to be informational and act as a guide to Council, management, and citizens as decisions are made.

The Long Range Financial Forecast sets the stage for the upcoming budget process, facilitating the City Council to consider strategic priorities and allocate resources appropriately. This Long Range Financial Forecast is not intended as a budget nor as a proposed plan. The forecast is based on current service levels, doesn’t factor in future development, and uses general assumptions that may be different than actual amounts.

City of Fort Bragg
Mid-Year Budget FY 2023/24

The following charts depict the General Fund expenditure categories.

$0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 FY 21-22
FY 22-23
FY 23-24
FY 24-25
FY 25-26
FY 26-27
Salaries & Wages Benefits Materials & Services Allocations to Internal Service Funds Other Expenditures Debt Service City of Fort Bragg
Mid-Year Budget FY 2023/24

FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Audited Audited Forecast Forecast Forecast Forecast Forecast Revenue: Sales Tax $ 2,215,161 $ 2,146,975 1,959,500 1,979,095 2,048,363 2,120,056 2,194,258 Property Tax 1,150,352 1,136,219 1,150,257 1,150,257 1,161,760 1,173,377 1,185,111 Transient Occupancy Tax 3,444,990 3,192,486 3,242,118 3,258,329 3,421,245 3,455,457 3,490,012 Reimbursements 3,333,187 3,278,393 3,341,622 3,341,622 3,341,622 3,341,622 3,341,622 All Other Revenue Sources 1,071,911 2,037,151 2,550,689 2,550,689 2,576,196 2,601,958 2,627,977 Total Revenue 11,215,601 11,791,224 11,720,423 12,279,992 12,549,186 12,692,471 12,838,980 Expenditures: Salaries & Wages 3,831,953 4,114,364 4,550,423 4,777,944 4,921,282 5,068,921 5,170,299 Benefits 2,728,147 2,508,092 2,843,131 2,928,425 2,986,993 3,046,733 3,107,668 Materials & Services 2,762,347 2,903,529 2,832,433 2,889,082 2,946,863 3,005,801 3,065,917 Allocations to Internal Service Funds 789,396 649,295 656,999 676,709 697,010 717,921 739,458 Other Expenditures 216,637 230,533 230,971 242,520 249,795 257,289 265,008 Debt Service 358,337 364,131 442,513 433,348 465,555 521,910 561,409 Total Expenses 10,686,817 10,769,944 11,556,470 11,948,027 12,267,500 12,618,574 12,909,759 Net Transfers: - - - -
Net Increase (Decrease) to Fund Balance 528,784 1,021,280 163,953 331,964 281,686 73,896 (70,778) Other restricted funds 3,879,236 (3,638,178) - - - - -
Beginning Fund Balance 4,184,215 8,592,235 5,975,337 6,139,290 6,471,255 6,752,941 6,826,837 Ending Fund Balance $ 8,592,235 $ 5,975,337 $ 6,139,290 $ 6,471,255 $ 6,752,941 $ 6,826,837 $ 6,756,059 718,784 1,211,280 353,953 521,964 471,686 263,896 119,222 $ 4,902,999 $ 6,114,279 $ 6,468,232 $ 6,990,197 $ 7,461,883 $ 7,254,093 $ 7,581,105 958,784 1,451,280 593,953 761,964 711,686 503,896 359,222 $ 5,142,999 $ 6,594,279 $ 7,188,232 $ 7,950,197 $ 8,661,883 $ 8,454,093 $ 9,021,105 667,232 1,340,529 653,828 826,738 793,777 585,987 459,236 $ 4,851,447 $ 6,191,976 $ 6,845,804 $ 7,672,542 $ 8,466,319 $ 8,258,529 $ 8,925,554 736,455 1,826,396 898,766 1,074,125 1,049,822 868,917 752,068 $ 4,920,671 $ 6,747,066 $ 7,645,832 $ 8,719,957 $ 9,769,779 $ 10,638,696 $ 11,390,765 City of Fort Bragg General Fund Five Year Forecast
Storm Drain
Enterprise $190k
annually
Parcel Tax
$430k/yr.
1% TOT Tax
$310k/yr.
3/8 cent General
Sales Tax
$800k/yr.
$8,592,235
$4,375,337 $4,539,290
$4,871,255 $5,152,941 $5,226,837 $5,156,059
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Audited Audited Forecast Forecast Forecast Forecast Forecast FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28

GENERAL FUND FIVE YEAR FORECAST
Total Revenue Total Expenses Ending Fund Balance
City of Fort Bragg
Mid-Year Budget FY 2023/24

The FISCAL YEAR 2025 BUDGET PREPARATION
A. BUDGET PREPARATION SCHEDULE
Initial activities related to preparing the Fiscal Year 2024/25 budget are underway. The direction provided today by the Council will be incorporated into the budget draft. Staff will present a draft budget to the Council and the public at a budget workshop in May. The further direction provided at the workshop will be incorporated into a "Final" budget that will be presented to the Council for consideration of adoption in June.

The complete budget calendar is provided below:

B. PRIORITIZED LIST OF FINANCIAL GOALS
Staff used the prioritized list as guidance in preparing the FY2024 budget and will again use the list in preparing the FY 2024/25 budget unless the Council directs otherwise:
1) Adopt a balanced budget (ongoing expenditures should be supported by ongoing revenues.

Accordingly, one-time revenues/grants should not be used for ongoing expenditures continuously) 2) Provide additional contributions to the Section 115 Trust to help pay the unfunded liability 3) Maintain operating reserve (20% of operating Exp) and litigation reserve ($200k) 4) Provide additional funding for emergency reserves (10% of Operating Expenditures) 5) Maintain current level of service (no staff layoffs, no program cuts) 6) Provide cost of living adjustments for Staff in years to come C. CITY COUNCIL DISCUSSION

ACTIVITY DEADLINE
FINANCE PROVIDES BUDGET SPREADSHEETS TO DEPARTMENTS AS WELL AS INSTRUCTIONS RE: NARRATIVES & CAPITAL PROJECTS (INCLUDING INTERNAL SERVICE FUNDS, GRANTS, DDAs) 2/25/2024 MID-YEAR PERFORMANCE BUDGET REVIEW WITH COUNCIL ( 2PM-5pm)(COMMUNITY INPUT) 3/20/2024 FINANCE PROVIDES INITIAL REVENUE FORECASTS TO CM (ALL REVENUE SOURCES, AND FUNDS) 3/31/2024 DEPTS SUBMIT PROPOSED DEPARTMENTAL EXPENSE BUDGETS AND NARRATIVES TO FINANCE 4/12/2024 PW & CDD SUBMIT COMPLETED BUDGET SECTIONS FOR GRANTS AND CAPITAL PROJECTS 4/12/2024 HR PROVIDES PAYROLL PROJECTIONS INCLUDING BENEFITS 4/19/2024 CM & FINANCE MEET WITH All DEPTS; REVIEW APPROPRIATIONS REQUESTS 4/15/2024 thru 4/19/2024 CM & FINANCE FOLLOW UP MEETING CIP 4/21/2023
FINANCE POSTS REVISED BUDGET WORKSHEETS IN BUDGET FOLDER; 4/22/2024 DEPARTMENTS REVIEW REVISED EXP WORKSHEETS; REPORT ANY DISCREPANCIES TO FINANCE THIS INCLUDES PROJECTED YEAR END FOR FY23, GRANTS; CAPITAL PROJECTS, ETC 4/22/2023 FINANCE REVIEWS TOTAL REVENUES vs EXPENDITURES WITH CM - ADJUST AS NECESSARY; 4/26/2024 INTERNAL REVIEW/QUALITY CONTROL (FINANCE, CM, DEPTS) - DRAFT BUDGET DOCUMENT 4/15/2024 thru 5/10/2024 FINALIZE DRAFT BUDGET DOCUMENT 5/17/2024
CM COMPLETES BUDGET TRANSMITTAL LETTER 5/17/2024
FINANCE DISTRIBUTES PROPOSED FY 2023/24 Draft BUDGET 5/22/2024 CITY COUNCIL CONDUCTS FY 2024/25 BUDGET HEARING WORKSHOP (COMMUNITY INPUT) 5/29/2024 FINANCE DISTRIBUTES FY 2024/25 BUDGET INCLUDING COUCIL AND PUBLIC UPDATES (FOR COUNCIL ADOPTION) 6/6/2024 CITY COUNCIL ADOPTS FY 2024/25 BUDGET 6/10/2024
SCHEDULE FOR DEVELOPMENT OF FY 2024/25 BUDGET