FY 2024/25 Mid-Year Budget Workshop
Special Meeting
March 20, 2025
1. Strengthening City Reserves to 30% (Policy Change)
2. Additional Funding to Section: 115 Trust
$2.3 million Invested ($200k annually)
3. Investments in our Community – CIP $29.8 million
4. New Department: Economic Development
5. Personnel Funding for all City Departments: $6.8 million
6. Conservative Forecasting- Revenues
**MEASURE T & U Approval in November 2024.
HIGHLIGHTS OF FY2024/25 BUDGET
Current Economic Conditions
2024: Consumer Spending
Weak Spots:
-Businesses spent less on Restocking,
reducing inventory.
- Business Investment
2025 so Far
- Companies are importing more
goods to get ahead of tariffs.
- Spending has slowed, inflation
increasing, Stock Market falling.
- Uncertainties,
INFLATION
Fed Holds Interest Rate
Steady, Dims Economic
Outlook for 2025
FEDERAL RESERVE
Current Listing: 204 Homes for Sale
HOUSING
Source: Realtor.com
State: 5.2%
Mendocino County: 6.5%
Local Economy: Unemployment Rates
Labor EmployArea Name Force ment Number Rate
Mendocino County 36,530 34,170 2,360 6.5%
Covelo CDP 400 350 50 13.0%
Fort Bragg city 2,330 2,210 120 5.1%
Laytonville CDP 370 310 50 14.7%
Mendocino CDP 430 420 10 2.1%
Point Arena city 180 170 10 7.8%
Ukiah city 6,970 6,510 460 6.6%
Willits city 1,660 1,490 170 10.0%
Unemployment
Source: EDD
New Business in Fort Bragg:
-
2023: 136 new businesses, with 70 closures.
- 2024: 98 new businesses, 45 closures.
- Wet Winter weather- Visitor Numbers: 1% increase in Occupancy Rate/Visitor Numbers in Q2
- Consumer Spending (Strong Q1-2) 10% Increase Slowed down in Jan & Feb 2025 - Fuel price in Jan/Feb Average $4.89/gallon
Local Economy
o Consumer spending is declining across all income levels due to concerns about tariffs, inflation, and a potential recession. Consumer confidence has plummeted owing to concern about the economy. o Businesses are feeling the pinch, with small businesses reporting declining sales and uncertainty about the future.
o Retailers are reporting weak demand since the start of the year as consumers become more cautious about their spending.
o The sour economic sentiment can become a self-fulfilling prophecy, as nervous consumers and businesses reduce spending -Recession.
Key Takeaways- Economy Outlook
Economic Uncertainties
1. Tariffs – Supply ChainsInflation
2. Federal Cuts (Grants & CIP
Grants)
3. Interest Rates & Housing
Market
4. Tourism & Business Climate:
ECONOMY OUTLOOK - UNCERTAINITIES
Strategic Considerations for the City
1. Planning for Potential Cost Increases.
2. Diversify local revenue sources.
3. Support workforce and business retention efforts
to sustain local employment.
4. Increase Funding for our Reserves to weather
Economic Conditions while providing Services our
Residents Rely on.
Capital Improvement Program (CIP)
“Investments in our Community”
City.FortBragg.com
Mid-Term Budget
Adjustments Requests
Account
Number Account Description Department
Current
Budget
Budget
Amendment
Request
Adjusted
Budget Justification
Funding
Source
REVENUES
110-0000-3131 Sales Tax General Fund $ 2,036,000 $ 237,500 $ 2,273,500 Measure T (Effective 4/1/25) GF Taxes 110-0000-3137 Transient Occupancy Tax General Fund 3,140,239 100,000 $ 3,240,239 Measure U (Effective 4/1/25) GF Taxes 110-4202-3318 Grant Reimb CRU 302,476 58,705 $ 361,181
Total General Fund Revenues $ 302,476 $ 396,205 $ 5,874,920
EXPENDITURES
110-4130-0311 Legal Costs/City Attorney Administration $ 273,123 $ 100,000 $ 373,123 Legal costs GF 110-4150-0101 Salaries & Wages, Benefits Finance $ 329,503 $ 22,321 $ 351,824 Finance Tech 1 (3rd and 4th quarter) **New FT Position Water/Broadband/WW 110-4320-0101 Salaries & Wages, Benefits CDD $ 179,705 $ 42,250 $ 221,955 CDD Director/Senior Planner (4th quarter) **New FT Position GF 110-4130-0101 Salaries & Wages, Benefits Admin $ 493,518 $ 9,000 $ 502,518 Public Experience Liason (4th quarter) **New PT Position (Pilot Project) GF 110-4200-0101 Salaries & Wages PD $ 1,980,002 $ (64,500) $ 1,915,502 Budget Savings from Unfilled Positions GF 110-4200-0102 Overtime PD 101,000 64,500 $ 165,500 Increase in Overtime Costs GF 110-4202-0101 Salaries & Wages, Benefits CRU 145,022 58,705 $ 203,727 Add Staff, Office Ast(Dec\) & Social Service Liason hired in July 2024 Grant
110-4190-0358 Liability Insurance Non-Dept 320,923 49,009 $ 369,932 Increase in Liability Premiums GF $ -
Total General Fund Expenditures $ 3,822,796 $ 281,286 $ 4,104,081 GF Net: $ 114,919
FY 2024/25 Requested Mid-Year Budget Adjustments
GENERAL FUND
Account
Number Account Description Department
Current
Budget
Budget
Amendment
Request
Adjusted
Budget Justification
Funding
Source
610-4612-0751 Infrastructure Water Enterpri
$ 60,000
$ 35,000 $ 95,000 Raw Water Line piping from pond to wetwell.
Operating
Appropriation
610-4612-0752 Infrastructure Water Enterpri
$ 60,000
$ 30,000 $ 90,000 Rust Repair for Filter Treatment unit #2 Operating
Appropriation
651-6006-0731 Water Treatment Plant Water- CIP
$ 5,290,344
$ 200,000 $ 5,490,344 Replacing the damaged asphalt around the water plant and co Capital
Improvement
610-4612-0381 Equipment Water Enterpri
7,000
175,000 182,000 Sodium hypochlrorite generator that has close to 37,000 hours Operating
Appropriation
$ 5,417,344 $ 440,000 $ 5,857,344
521-4394-0319 Professional Services IT
$ 10,000
$ 8,750 $ 18,750 Consulting needs moving from Microsoft Commercial Cloud to Operating
Appropriation
521-4394-0384 Licensing, Software & Maint IT $ 335,061 $ 73,531 $ 408,592 Acella - Planning, Engineering and Building Software upgrades $ 345,061 $ 82,281 $ 427,342
FY 2024/25 Requested Mid-Year Budget Adjustments
WATER ENTERPRISE
INFORMATION TECHNOLOGY - ISF (521)
General Fund
REVENUE SOURCE
FY 2022/23
Actuals
FY 2023/24
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2024
YTD Actual
12/31/2024
Mid-Year
Variance %
Variance
Budget vs.
Actual
Estimated Year
End
Forecast
Surplus/
(Shortfall)
Transient Occupancy Tax $ 3,192,486 $ 3,092,214 $ 3,146,240 $ - $ 3,146,240 $ 1,573,120 $ 1,770,181 56% $ 197,061 3,252,240 $ 106,000 Sales and Use Tax 2,146,974 2,152,834 2,059,200 - 2,059,200 1,029,600 1,222,019 59% 192,419 2,259,200 200,000 Property Tax 1,141,020 1,217,444 1,213,790 - 1,213,790 606,895 258,426 21% (348,469) 1,250,935 37,145 Other Taxes 953,026 974,148 953,454 - 953,454 476,727 458,679 48% (18,048) 947,954 (5,500) Sub Total Tax Revenue 7,433,505 7,436,638 7,372,683 - 7,372,683 3,686,342 3,709,305 50% 22,963 7,710,328 337,645 Licenses & Permits 94,598 85,223 85,200 - 85,200 42,600 39,772 47% (2,828) 88,140 2,940 Fines and Forfeitures 56,742 21,809 18,000 - 18,000 9,000 7,158 40% (1,842) 13,310 (4,690) Intergovernmental 15,538 41,204 25,000 - 25,000 12,500 6,797 0% (5,703) 13,594 (11,406) Use of Money/Property (377,584) 574,291 123,000 - 123,000 61,500 554,868 451% 493,368 124,560 1,560 Charges for Services 88,658 87,920 91,250 - 91,250 45,625 51,088 56% 5,463 101,102 9,852 Operating Grant Revenue 571,569 842,675 824,476 - 824,476 412,238 325,530 39% (86,708) 875,501 51,025 Reimbursements/CAP 3,764,941 4,383,346 3,672,943 - 3,672,943 1,836,471 1,450,243 39% (386,228) 3,630,420 (42,523) Other Revenue 143,257 67,256 26,000 - 26,000 13,000 46,687 180% 33,687 50,779 24,779 TOTAL REVENUES $11,791,224 $13,540,361 $12,238,552 $ - $ 12,238,552 $ 6,119,276 $ 6,191,448 51% $ 72,171 $ 12,607,733 $ 369,181 General Fund Revenues
General Fund Expenditures by Department
DEPARTMENT
FY 2022/23
Actuals
FY 2023/24
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2024
YTD Actual
12/31/2024
Mid-Year
Variance %
Estimated FY
Year End
Forecast
Surplus/
(Shortfall)
GENERAL GOVERNMENT
City Council $ 224,220 $ 217,203 $ 199,579 $ 7,971 $ 207,550 $ 103,775 $ 118,806 57% $ 206,616 934 Administrative Services 1,065,912 1,061,174 1,058,361 112,556 1,170,917 585,459 489,305 42% 1,280,331 (109,414) Economic Development - - 265,818 - 265,818 132,909 145,727 55% 265,480 338 Marketing & Promotions 210,230 237,476 260,150 10,000 270,150 135,075 113,189 42% 266,431 3,719 Finance 551,250 558,257 606,597 7,237 613,833 306,917 328,579 54% 614,534 (701) Non-Departmental 967,992 1,077,930 1,279,139 4,538 1,283,677 641,838 943,844 74% 1,310,969 (27,292) Community Organizations 70,425 204,598 182,166 - 182,166 91,083 44,807 25% 182,212 (46) DEBT SERVICE 3,793,587 579,418 572,840 - 572,840 286,420 120,921 21% 572,840 - COMMUNITY DEVELOPMENT 420,928 430,664 351,756 47,656 399,412 199,706 221,742 56% 410,142 (10,730)
PUBLIC SAFETY
Police Department 3,485,290 3,950,427 4,283,212 574 4,283,786 2,141,893 2,243,186 52% 4,166,943 116,843 Social Services/CRU 134,556 338,077 302,476 302,476 151,238 200,083 66% 380,729 (78,253) Fire Department 430,755 560,414 448,569 - 448,569 224,285 239,615 53% 445,818 2,751
PUBLIC WORKS
Administration & Engineering 684,218 796,155 881,064 - 881,064 440,532 504,868 57% 874,469 6,595 Parks and Facilities 50,505 51,945 42,200 4,588 46,788 23,394 27,000 58% 47,686 (899) Street Maintenance 119,863 172,808 162,000 15,000 177,000 88,500 59,566 34% 177,000 - Storm Drains 13,415 14,063 48,000 26,120 74,120 37,060 39,885 54% 69,820 4,300 Corporation Yard 481,227 434,324 812,899 - 812,899 406,449 308,682 38% 698,789 114,110 Traffic and Safety 84,488 33,804 33,500 426 33,926 16,963 19,339 57% 33,926 - COST ALLOCATION 1,222,680 766,923 401,891 - 401,891 200,946 200,946 50% 401,891 - TOTAL GENERAL FUND EXPENDITU $ 14,011,539 $ 11,485,660 $ 12,192,217 $ 236,665 $ 12,428,882 $ 6,214,441 $ 6,370,088 51% $ 12,406,628 $ 22,254
GENERAL FUND EXPENDITURES
GENERAL FUND RESERVES
FY 24/25
Budget
FY 24/25
Projected
Beginning Reserves $ 5,975,337 $ 5,975,337
Revenues 12,238,552 12,607,733
Expenditures (12,192,217) (12,406,628)
Net Transfers
Surplus/Deficit 46,335 201,105
Ending Committed Reser $ 3,789,101 $ 3,789,101
Committed Reserves as
a % of Operating Budget 31% 31%
COMMITTED RESERVES
Operating Reserve $ 2,435,022
Recession Reserve 1,154,079
Litigation Reserve 200,000
Restricted Reserves: Section: 115 3,015,238
UNASSIGNED RESERVES 1,640,132
PROJECTED FUND BALANCE 8,444,471
PROJECTED FUND BALANCE FY24/25
Long-Term Financial Plan
Uncertainty Actions to Manage/Mitigate this Uncertainty Inflation Seek other revenue sources or adjust services to offset increases in costs
Economic Downturn/Recession Maintain a General Fund Emergency & Operating Reserves at 30%
Pension Unfunded Liability Maintain a positive operating position to absorb larger cost increases in the future and contributions to Section 115 trust Future Labor Contract Costs 2025 /
Salary Schedule Jan PD
Maintain a positive operating position to absorb larger cost increases in the future or Seek other revenue sources
Future SEIU Contract Costs 2025 Maintain a positive operating position to absorb larger cost increases in the future or Seek other revenue sources
Service Changes/Council Priorities:
-Housing
-Infrastructure
-Broadband/Jobs Industry
-Economic Development
Seek other revenue sources including Grants or adjust
service or levels to offset increases
Uncertainties
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 -
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 FY 27-28
GF FIVE YEAR FORECAST
Revenue: Total Revenue Total Expenses
CALPERS UNFUNDED LIABILITY
CALPERS UAL Debt
$5.47 million
Lease Revenue
Bonds (Debt)
$8 million
FY 2025/26
Budget Development
Budget Goals FY 2024/25 Development
Adopt a Balance Budget
Maintain current level of service (no program cuts, no staff layoffs) Maintain Operating and Litigation Reserves
Provide funding for Emergency Reserves Increase from 5% to 10% of O/Expenditures Provide Cost of Living Adjustment to Staff
Budget additional contributions to CALPERSSection 115 Trust 5 4
3 2
1 6
PRIORITY 1: Fiscal Sustainability and Reserves Management Adopt a balanced budget: Ensure ongoing revenues support ongoing expenditures. One-time revenues or grants should not be relied upon for continuous operational costs.
Maintain current levels of service: Avoid staff layoffs and program reductions.
Maintain General Fund reserves at or above GFOA-recommended levels (30%). Fund emergency reserves at 10% of operating expenditures to enhance the City’s preparedness and financial resilience and Maintain a dedicated litigation reserve of $200,000.
Provide additional contributions to the Section 115 Trust to address unfunded pension liabilities.
Explore diversified revenue streams or expand the tax base to strengthen long-term fiscal sustainability and keep up with rising cost of providing government services.
Direction on Budget Priorities FY 25/26
PRIORITY 2: PUBLIC SAFETY AND EMERGENCY
PREPAREDNESS
Ensure continued funding for police, fire, and emergency response services to ensure a safe and secure community.
Invest in staffing, equipment upgrades, and public safety infrastructure.
Explore community-based programs for crime prevention and strengthen emergency preparedness.
Continued support for the CRU program as a key initiative in addressing homelessness. (100% Grant Funded)
Direction on Budget Priorities FY 25/26
PRIORITY 3: INFRASTRUCTURE MAINTENANCE &
MORDENIZATION
Elevate the priority of infrastructure improvement funding, including streets, alleys, sidewalks, and storm drain systems, with consideration for General Fund support.
Maintain and improve water and wastewater infrastructure.
Implement Broadband Infrastructure network and launch enterprise fund.
Enhance and update the 5–10-year Capital Improvement Plan (CIP) to guide long- term infrastructure planning and investment.
Implement energy efficiency upgrades and sustainable infrastructure initiatives.
Direction on Budget Priorities FY 25/26
PRIORITY 4: Housing, Housing, Housing
Allocate funds to support housing development incentives and pursue pro-housing policies. 2026 Housing Goal: 200
Launch the Community Land Trust to secure long-term affordability.
Explore public/private partnerships to develop vacant lots in the city and increase housing stock.
Actively pursue state and federal housing grants to leverage external funding.
Effectively communicate to the community housing incentives currently offered by the City.
Direction on Budget Priorities FY 25/26
PRIORITY 5: ECONOMIC DEVELOPMENT, BUSINESS SUPPORT AND
DOWNTOWN REVITALIZATION
Support local business growth through revolving loans, grant programs, and resources.
Invest in downtown revitalization, tourism promotion, and workforce development.
Expand and promote community-building and tourism-driven events to strengthen local engagement and economic activity. (Night Markets, Music festivals, Entertainment zones) Explore new economic development incentives to attract investments, spark innovation, and create new jobs.
Strategic efforts to diversify the local economy, fostering economic resilience, attracting new industries, and reduce reliance on any single sector.
Continue refining permitting, licensing, and startup processes to reduce barriers to starting a business.
Direction on Budget Priorities FY 25/26
PRIORITY 6: PARKS, RECREATION & CV STARR
Ensure long-term, sustainable operations of the C.V. Starr Center.
Invest in youth programs, parks, trails, and recreational facilities.
Partner with the Fort Bragg Unified School District (FBUSD) to improve local soccer fields.
Enhance the maintenance of parks and trails.
Prioritize equitable access to community services and amenities for all residents.
Direction on Budget Priorities FY 25/26
PRIORITY 7: STAFFING & ORGANIZATION CAPACITY
Prioritize recruitment and retention of high-caliber staff across departments.
Ensure adequate staffing levels are in place to effectively implement the City’s Strategic Plan and achieve City Council goals.
Continue to offer competitive compensation, including COLA adjustments, employee wellness, and comprehensive benefits.
Invest in workforce development through succession planning, cross-training, and teambuilding efforts to build high-performing teams.
Direction on Budget Priorities FY 25/26
PRIORITY 8: TECHNOLOGY AND DIGITAL SERVICE
ENHACEMENTS
Modernize systems to improve customer service, permitting, and internal workflows.
Invest in cybersecurity, IT infrastructure, and digital tools.
Expand digital access for residents, businesses, and City staff by upgrading the City’s website and enhancing online services that benefit the public.
Direction on Budget Priorities FY 25/26
PRIORITY 9: COMMUNITY ENGAGEMENT & TRANPARENCY
Expand outreach efforts to increase public participation throughout the fiscal year.
Ensure clear, consistent, and accessible communication on City finances and operations across the departments.
Encourage public involvement through participatory workshops, and community surveys gather input.
Utilize social media platforms and the City’s e-newsletter to share information with the public
Launch internship programs with the Schools to invest in the next generation of leadership.
Direction on Budget Priorities FY 25/26
PRIORITY 10: CODE ENFORCEMENT POLICY
DIRECTION
Provide policy direction on code enforcement priorities.
Evaluate staffing and resource needs to support proactive enforcement if desired.
Align enforcement efforts with community priorities such as housing preservation, neighborhood livability, and business vitality.
Direction on Budget Priorities FY 25/26
PRIORITY 10: CODE ENFORCEMENT POLICY
DIRECTION
Vacant and Abandoned Buildings (registration and levy escalating fines) Commercial Property Blight and Mixed-Use Potential
Non-compliant Short-term Rentals
Blight on Residential Properties (Focus on properties with chronic violations) Illegal Conversions or Unpermitted Units (Prioritize bringing units into compliance instead of removal. Launch Amnesty programs, and offer fee waivers to bring units up to code)
Direction on Budget Priorities FY 25/26
PRIORITY 11: PLANNING & BUILDING
Create a One-Stop Shop for permitting to improve customer service and streamline processes.
Improve permit processing times.
Expand outsourcing of plan checks to 4Leaf to streamline service delivery.
Strengthen collaboration between Planning, Engineering, Building, and Economic Development to ensure timely project review and permit issuance.
B
Direction on Budget Priorities FY 25/26
PRIORITY 11: MILL SITE REZONING, DEVELOPMENT AND PUBLIC
PARTICIPATION
Engage the community through inclusive and transparent public participation processes to shape the vision for the site.
Pursue a Local Coastal Program (LCP) Amendment to rezone the Mill Site in alignment with the City's development goals.
Prioritize planning and infrastructure readiness for the redevelopment of the Mill Site property.
Pursue funding opportunities and strategic partnerships to support infrastructure, remediation, and phased smart development.
Align Mill Site redevelopment with the City's economic, environmental, housing, and recreational goals.
Direction on Budget Priorities FY 25/26