City of Fort BraggMid-Year BudgetReportFiscal Year 2024/25 City of Fort BraggMid-Year BudgetReportFiscal Year 2024/25 City of Fort Bragg
Mid-Year Budget
Report
Fiscal Year 2024/25
City of Fort Bragg
Mid-Year Budget
Report
Fiscal Year 2024/25
TABLE OF CONTENTS
Introduction & Economic Outlook................................................................................... 3-4 General Fund Financial Summary ............................................................................... 4-8 Water Enterprise Fund ................................................................................................. 9-11 Wastewater Enterprise Fund ....................................................................................... 12 CV Starr Enterprise Fund ............................................................................................. 13 Internal Service Funds ................................................................................................. 16-17 Budget Adjustment Requests at Mid-Year ................................................................... 18 Fiscal Year 2024/25 Budget Preparation Schedule ……………………………….…...... 19 Prioritized List of Financial Goals ………………………………………………………...... 19
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 2024/25 (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).
ECONOMIC ANALYSIS
U.S. Economy Overview
As of early 2025, the U.S. economy continues to demonstrate modest but stable growth. Real GDP grew at an annualized rate of 2.1% in Q4 2024, reflecting continued consumer spending, a gradual recovery in manufacturing, and moderate gains in business investment. Inflation, which had been a key economic pressure in recent years, has cooled, with the Consumer Price Index (CPI) hovering around 2.6% year-over-year—a level more aligned with the Federal Reserve's long-term targets.
Labor markets remain strong, though job growth is beginning to normalize. The national unemployment rate stands at approximately 3.9%, up slightly from earlier lows but still indicative of a healthy employment environment. The Federal Reserve has taken a cautious approach to interest rates, holding the federal funds rate steady at 4.75% as it monitors inflation trends and seeks to avoid triggering a recession.
Consumer confidence has improved marginally, but household budgets remain tight due to lingering housing and energy costs. Housing affordability remains a top concern across the country, impacting both urban and rural regions alike.
California Economy
California’s economy continues to outperform the national average in several sectors, particularly in technology, entertainment, and green energy. However, the state also faces distinct challenges—most notably, high housing costs, a slowing real estate market, and outmigration from high-cost metro areas.
As of Q1 2025, California’s unemployment rate is approximately 4.6%, higher than the national average, but reflective of a diverse and transitioning labor market. Wage growth has remained relatively strong, especially in the health care, logistics, and professional services sectors.
The state’s budget faces moderate pressure due to reduced capital gains tax revenues and lingering effects of pandemic-era spending. However, investments in climate resilience, infrastructure, and housing development are expected to stimulate regional economies and improve long-term competitiveness.
Retail sales have rebounded slightly after a tepid holiday season, and tourism is recovering steadily, with strong domestic travel supporting coastal economies. Drought conditions have improved, but water infrastructure remains a long-term concern.
Local Economy – Fort Bragg & Mendocino County
Fort Bragg and the greater Mendocino County economy are gradually stabilizing after several years of uncertainty stemming from the COVID-19 pandemic, labor shortages, and broader inflationary pressures.
Key local indicators:
Tourism & Hospitality: Visitor activity remains a cornerstone of the local economy. Occupancy rates in lodging establishments were healthy through the 2024 summer and fall seasons, though recent seasonal declines are typical for winter months.
Housing & Real Estate: The local housing market has cooled slightly from peak pricing, reflecting broader statewide trends. Affordability remains a challenge, particularly for workforce and middle-income households. New interest in housing development, waiving minimum parking requirement policy reforms, and incentives—such as the City’s parking waiver program and ministerial review pathways—are aimed at supporting infill and multi-family development.
Small Business & Economic Development: Local business sentiment has improved modestly, thanks in part to City-led initiatives such as the Fort Bragg Business Boost Fund, facade improvement grants, and enhanced outreach to support startups and existing businesses. However, access to capital and workforce recruitment remain key challenges.
Labor Market: Fort Bragg continues to face workforce shortages in health care, construction, hospitality, and public services.
Cannabis Sector: The regulated cannabis industry in Mendocino County has seen significant contraction over the past 18 months due to declining wholesale prices and regulatory complexities. This has impacted ancillary sectors and overall tax revenue. The County and local jurisdictions continue to explore stabilization strategies.
Fisheries & Natural Resources: Fishing remains a cultural and economic contributor, but ongoing regulatory uncertainty and environmental changes pose threats to the sector’s long-term viability.
Outlook & Considerations for Budget Planning
While broader economic indicators point to cautious optimism, local governments—including Fort Bragg—must continue to plan conservatively. Revenue growth is expected to be moderate, and cost pressures (particularly around staffing, insurance, materials, and infrastructure) will require disciplined fiscal management.
Key fiscal considerations for the upcoming budget cycle include:
Continued investment in economic development and business support programs; Ongoing infrastructure upgrades, particularly related to streets and alleys, water, wastewater, and broadband; Monitoring property and transient occupancy tax trends as indicators of tourism recovery; Addressing structural challenges in housing, workforce development, and service delivery; Preparing for potential impacts of state budget tightening or legislative changes.
GENERAL FUND
The General Fund supports many of the City’s core, day-to-day operations, including police and fire protection, street and park maintenance, community development, and general administrative functions. It serves as the primary funding source for all City programs not covered by dedicated taxes, user fees, impact fees, or grant funding.
Unlike the Enterprise Funds, which receive revenue on a consistent monthly basis, General Fund revenues come from a broader variety of sources—many of which are cyclical in nature. This variability can impact the timing of revenue collection and requires careful planning to ensure consistent service delivery throughout the fiscal year.
The General Fund remains vital to sustaining essential municipal services and plays a central role in advancing the City’s strategic priorities.
GENERAL FUND REVENUES OVERVIEW
In the second quarter, General Fund revenue totaled $6.19 million, accounting for 51% of the amended budget. This amount is an increase compared to the $6.02 million reported at the same point in the previous fiscal year. Current projections indicate that General Fund revenue will reach approximately $12.6 million by the end of the fiscal year, exceeding the budgeted amount by about $369,000.
The table below provides a breakdown of actual FY 2024/25 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 2024/25 Budget was developed with the expectation of potential increases in General Fund revenues while adhering to conservative budgeting principles and maintaining cautious optimism as economic conditions change in 2025.
A thorough review of all General Fund revenue accounts has been conducted, reflecting activity from the first six months of the fiscal year. Based on the data available through December, General Fund tax revenues have demonstrated strong performance and are projected to align with budgeted levels, reaching approximately $7.7 million by year-end. This positive outlook is attributed to steady growth and the impact of Measures T and U, which are set to take effect in the fourth quarter of the fiscal year.
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.
Notable variances in Revenues are listed below.
Transient Occupancy Tax (TOT)
Tourism plays a vital role in Fort Bragg's economy, accounting for 26% of the General Fund revenue. In FY 2022/23, the Transient Occupancy Tax (TOT) experienced an impressive 18% growth compared to pre-pandemic levels. However, actual TOT revenues for FY 2023/24 showed a slight decline from FY 2022/23, primarily due to a significant drop during the winter months.
Starting April 1, 2025, the TOT rate will increase to 14%, following the approval of Measure U by Fort Bragg voters in November 2024. This increase—from 12% to 14%—applies to short-term lodging accommodations, including hotels, motels, and vacation rentals within city limits. The General Fund anticipates an additional $100,000 in revenue as a result of the new rate, contributing to a projected TOT revenue total of $3.3 million by the end of FY 2024/25. Sales Tax:
The Sales Tax category includes General Sales Taxes, Local Sales Taxes, and Proposition 172 Sales Taxes.
During the latter half of 2024, California experienced mixed sales tax trends due to economic uncertainty and fluctuating consumer confidence. For Fort Bragg's sales tax revenues, there's an overall upward trend in sales tax revenues for certain months (July, October, and December), with December showing the largest increase (55%). Revenues dropped in August, September, and November compared to FY24, with November experiencing the most significant decline (-18%). Quarter two results overall, were $1,222,019 (59% of the total budget) in line with Budget projections.
Starting April 1, 2025, the sale tax rate will increase to 9.25%, following the approval of Measure T by Fort Bragg voters in November 2024. This increase—from 8.875% to 9.25% is anticipated to provide a significant boost to Fort Bragg's revenues. This will help the city address financial challenges and invest in essential services. Reimbursements
Reimbursements for the City include the annual COPS grant for Community Service Officers (CSO) costs, amounting to $170,000, and cost allocation transfers totaling $1.3 million. Cost allocation transfers, are classified as expenses for Enterprise Funds but as revenue for the General Fund. By mid-year, actual reimbursements totaled $1.4 million, representing 39% of the budget. They are projected to fall $43,000 under budget by the end of the fiscal year, largely due to the timing of some reimbursements, the recently approved indirect cost reimbursements from eligible grants, and the adjustment of staff hours worked during the fiscal year in accordance with the City's Cost Allocation Plan. Operating Grant Revenues
Operating Grant revenues are currently at 39% of the budgeted amount at mid-year and are projected to end the year $51,025 above 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. Other taxes
Franchise Fees are collected from Cable Television, Solid Waste, and PG&E Electric services. As of December 2024, total Franchise Fee receipts amount to $459k, aligning with the mid-term budget and matching the prior year’s collection levels. Based on historical trends, it is expected that overall Franchise Fees will meet or surpass the budgeted projections by year-end. Additionally, Business License Tax collections through December 2024 have increased by $36k compared to the previous year. This growth is notable, given that the majority of Business License Taxes are typically collected during the renewal season in February and March.
STATUS OF GENERAL FUND EXPENDITURES
General Fund expenditures totaled $6.3 million during the first half of FY 2024/25, accounting for 51% of the amended annual budget. Initially, appropriations of $12.2 million were adopted; however, budgeted appropriations have been adjusted upward by $237k over the course of the year, resulting in an amended budget of $12.4 million. The chart below illustrates year-to-date expenditures in comparison with prior years.
Some of the notable variances in expenditures include:
The Administration Department, which includes the City Manager’s Office and the City Attorney, has expended 42% of its amended budget at mid-year. This variance is primarily due to the timing of several professional services contracts that are expected to be expended in the second half of the fiscal year. Personnel costs are tracking in line with mid-year projections. Legal expenditures have reached $230,926 at mid-year, representing 85% of the annual legal budget. Due to ongoing litigation and increased demand for general legal services, legal costs are projected to total approximately $373,132 by year-end. A budget amendment of $100,000 is being requested to address this anticipated overage.
Additionally, a budget amendment of $10,000 is requested to fund a pilot project for a new part-time Public Experience Liaison position in the City Hall lobby. This role is designed to improve customer service by assisting and directing visitors, answering general inquiries, and serving as a central administrative support for City Hall operations. Currently, staff in the Planning and Finance Departments are frequently diverted from core duties to respond to walk-in inquiries, impacting their productivity. The addition of this position aims to streamline customer interactions and allow department staff to focus on their primary responsibilities.
As part of broader efforts to enhance public service, the City is also installing new flooring and updating the lobby to create a more welcoming and professional environment. The Public Experience Liaison will complement these improvements by further elevating the overall visitor experience. In the future, this role may be supplemented by volunteers through the City’s forthcoming Volunteer Central program or supported by administrative staff from other departments.
The Non-Departmental category which 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 74% of the annual budget and are projected to be over budget at end the fiscal year. The costs of liability and property insurance premiums paid in the first quarter were significantly higher than anticipated resulting in increased costs.
The Police Department continues to proactively address staffing challenges. In the second quarter, the department successfully filled a vacant sergeant position and enrolled a new police recruit in the academy. Additionally, the Community Service Officer position was eliminated for the current fiscal year as part of departmental restructuring. The School Resource Officer (SRO) program, in partnership with the Mendocino Unified School District, has been temporarily paused and is expected to resume in the fourth quarter.
As a result of these staffing vacancies, the department is projected to close the fiscal year under budget by approximately $116,843. However, these savings are partially offset by increased costs in overtime and compensatory time. A budget amendment is being requested to reallocate salary savings to cover these additional personnel-related expenditures.
The Care Response Unit—operating under the Public Safety Department— fully grant-funded. The program received funding through 2025 as part of an expansion of the California Department of Health Care Services (DHCS) grant originally secured in 2022. The Care Response Unit has demonstrated strong outcomes, effectively delivering services and resources to address homelessness and mental health needs within the community. In 2023 alone, the unit directly assisted over 300 community members. The department supports two full-time Social Services Liaison Officers. In the current fiscal year, the program expanded to include an additional personnel position and a part-time Officer Assistant funded by Measure B funds. A budget amendment is requested to align the budget with these staffing changes.
The Community Development Department, which includes Code Enforcement, has utilized 56% of its amended budget to date. Recruitment is underway for either a Community Development Director or a Senior Planner, with hiring anticipated in the fourth quarter of the fiscal year. The department budget also includes funding for outsourced support to enhance service delivery—$55,000 for consultant services from Marie Jones to assist with complex or large-scale planning projects, and $30,000 for a contract with 4Leaf as an alternative to the County of Mendocino for building plan review services. These efforts aim to improve permit processing times and ensure timely project review.
The Public Works Department implemented an operational adjustment in FY 2024 by replacing the Project Analyst position with an Administrative role. This change generated annual savings, which enabled the addition of a full-time Engineering Technician—bringing the department’s total full-time equivalents (FTEs) to eight. The department is projecting a budget surplus of $6,595. Despite this surplus, the department continues to manage a substantial workload, driven by approximately $61 million in capital improvement and street projects scheduled over the next three years.
The Corporation Yard Division is comprised of nine employees and operates with a budget of $874,469 for FY 2025. A recently added position is expected to play a key role in addressing the City’s backlog of maintenance tasks, including park maintenance, street signage repairs, curb painting (expanding from 10 feet to 20 feet), improvements at the Guest House Museum, and various storm drain maintenance activities.
The projected year-end budget variance is primarily due to the allocation of maintenance labor hours that should be charged to the Enterprise Funds. This accounting adjustment will be addressed during the fourth quarter to ensure accurate cost allocation and budget alignment.
GENERAL FUND NET RESULT AND FUND BALANCE
With projected revenues totaling $12.6 million and total expenditures estimated at $12.4 million, the General Fund is expected to conclude FY 2025 with a surplus of approximately $201,105. This surplus will increase the General Fund balance to $3.8 million—reflecting a 3% increase over the prior year. While the projected surplus is modest, it is important to note that expenditures, particularly personnel costs, have returned to pre-COVID levels. In addition, staffing levels have expanded across all departments, with most director-level positions filled—except for Community Development and Finance, which are anticipated to be filled soon.
As previously noted, voter-approved Measures T and U (November 2024) will generate approximately $1.2 million annually in new tax revenues for the General Fund to support general government services and City Council priorities outlined in the City’s 2024–2028 Strategic Plan. These taxes will take effect in April 2025 and are expected to generate $337,500 in additional revenue during the current fiscal year.
In the prior fiscal year, the City made a strategic investment of $1.6 million into the Section 115 Trust with PARS to mitigate future volatility in CalPERS investment returns. An additional $150,000 is appropriated annually for ongoing contributions. Per the City’s Pension Policy, 50% of any General Fund surplus is allocated to offset pension-related liabilities. With a projected FY 2023–24 surplus of $2 million, this policy will further strengthen the City’s pension mitigation strategy.
The City continues to follow the Government Finance Officers Association (GFOA) best practices by maintaining committed reserves for economic stabilization. Currently, the City holds committed reserves totaling $3.8 million—equivalent to 31% of General Fund expenditures—across recession, operating, and litigation reserve categories. In addition, the City maintains $1.6 million in unassigned reserves, providing further financial flexibility.
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 2024, there was an annual net position decrease to $16.6 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 the Fiscal Year ended. 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 $3.6 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 well-equipped to advance numerous projects outlined in the FY 25 budget CIP section.
REVENUES
Water Enterprise Fund revenues are entirely supported by user fees. As of the end of the second quarter, revenues exceeded expectations by $242,000, reaching 58% of the annual budget. While revenue collection had previously been impacted by water use restrictions, the recent pattern of ample statewide rainfall has eased such concerns. No restrictions are anticipated for the upcoming summer months. Year-end revenue is projected to total $3.1 million, representing a 2% increase over the prior fiscal year. This growth is primarily attributed to higher consumption levels, which are now trending closer to pre-COVID levels.
In the fourth quarter, the City will initiate the process of selecting a consultant to conduct a comprehensive review of water and wastewater rates. The Request for Proposal is due at the end of April.
EXPENDITURES
Water Enterprise expenses for the first half of FY 2025 totaled $1.3 million, representing 55% of the amended annual budget. The projected year-end total is $2.6 million—an increase of $379,000 over the current budget. As a result, a mid-year budget adjustment is being requested for the Water Enterprise. Importantly, the Water Enterprise currently does not carry any debt. With the requested budget amendment, a year-end surplus of approximately $440,000 is still anticipated.
No other significant variances are expected within other enterprise expense categories by fiscal year-end.
Between 2019 and 2022, the City experienced recurring water shortages during the summer months. In response, City staff proactively implemented several long-term solutions. These included the installation of the Desalination Unit in 2021 and the exploration of additional water sources and storage capacity—most notably, the acquisition of the Highway 20 property. Additionally, new water meters funded through the Community Development Block Grant (CDBG) are being installed. These meters will significantly improve the City’s ability to detect leaks and monitor water consumption in real time, supporting both conservation efforts and operational efficiency.
WASTEWATER ENTERPRISE FUND
The Wastewater Enterprise rate structure is operating as intended—successfully funding all core operations, maintaining the required operating reserve, supporting debt obligations, and building reserves for future infrastructure upgrades, replacements, and maintenance.
Fiscal Year 2024 ended with a net position of $22.8 million, reflecting a modest annual decrease of $36,000. In accordance with City policy, the operating reserve is set at 25% of the prior year’s operating expenses. For FY 2025, this reserve amount was established at $625,000.
REVENUES
The Wastewater Enterprise rate structure continues to perform as designed—funding all core operations, maintaining the required operating reserve, supporting debt obligations, and accumulating funds for future infrastructure upgrades, replacements, and maintenance. Fiscal Year 2024 ended with a net position of $22.8 million, reflecting a modest annual decrease of $36,000. In accordance with City policy, the operating reserve is set at 25% of the prior year’s operating expenses. For FY 2025, this reserve was established at $625,000.
Like the Water Enterprise Fund, the projected year-end revenue for the current fiscal year is estimated at $3.6 million—approximately $374 above the originally adopted budget. This projection aligns with revenue trends observed in the previous fiscal year. Additionally, the Fund saw a $7,000 increase in operating revenues from the septic dumping station.
EXPENDITURES
Wastewater Enterprise expenses totaled $1.3 million through the first half of FY 2025, representing 44% of the amended annual budget. The projected year-end total is approximately $3.1 million—about $131,000 over the originally adopted budget.
Personnel services are projected to be approximately $145,000 under budget by year-end. This variance is primarily due to the allocation of personnel costs between the Enterprise Funds and the General Fund, which can fluctuate annually based on staff time distribution.
The Non-Routine Maintenance division is expected to close the fiscal year under budget by approximately $29,000 for materials and supplies.
Conversely, CIRA insurance costs are anticipated to reach $112,000, exceeding the budget by $30,000. This increase reflects actual costs associated with the wastewater treatment plant, which was completed in 2021.
With projected revenues of $3.6 million and expenses of $3.1 million, staff anticipates the Wastewater Enterprise Fund will end FY 2025 with a net position of approximately $26.1 million and reserves totaling $2.1 million.
During the budget development process, staff also identified a Capital Improvement Program (CIP) totaling $1.4 million, aimed at addressing critical infrastructure needs and supporting the long-term sustainability of the Fund.
CV STARR ENTERPRISE FUND
The C.V. Starr Community Center and Sigrid & Harry Spath Aquatic Facility (C.V. Starr Center) is a 43,000-square-foot, multi-use facility that serves as a vital recreational and wellness hub for the community. The Center offers an array of amenities, including an indoor water park, fitness and exercise rooms, weight rooms, and community meeting spaces. The surrounding grounds further enhance the facility’s offerings with a dog park, skateboard park, and pètanque courts.
The City of Fort Bragg owns the C.V. Starr Center. Operational, maintenance, and capital improvement costs are partially offset by restricted sales and property tax revenues, which are specifically allocated to the C.V. Starr Enterprise Fund. This dedicated funding structure supports the long-term sustainability of the facility.
Historically, the City contracted with the Mendocino Coast Recreation and Parks District (MCRPD) for day-to-day operations and maintenance. However, in August 2023, the MCRPD Board issued formal notice to terminate the operating agreement, initiating a six-month transition period to allow for an orderly change in operations.
In response, the C.V. Starr Ad-Hoc Committee, in close coordination with City staff, developed a comprehensive transition plan to ensure continuity of services. As of February 2024, the C.V. Starr Center has officially transitioned to City operation. This strategic move ensures the uninterrupted delivery of high-quality recreational services and facilities, reinforcing the City’s commitment to promoting community well-being and quality of life.
The City Manager and C.V. Starr Center staff have made a concerted effort to increase memberships through enhanced marketing initiatives and community outreach. As a result, both membership revenues and general admissions have shown a strong recovery, reaching 61% of budgeted revenue by the end of the second quarter. In addition, rate adjustments approved by the City Council in the second quarter—effective January 2024—are projected to generate approximately $90,000 in additional revenue for the remainder of the fiscal year.
It is also encouraging to note that sales tax revenues dedicated to the C.V. Starr Center are tracking in line with quarterly budget projections, indicating that the Center remains on course to meet its overall budget goal of $1.2 million for FY 2025.
Property tax allocations, which typically arrive in the third quarter, are expected to further support the financial health of the Center, aligning with the City’s overall budget planning efforts and ensuring long-term operational stability. 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.
EXPENDITURES
The City has implemented a series of strategic initiatives to enhance operational efficiency and drive membership growth at the C.V. Starr Center. A key step was the consolidation of fitness class offerings from 70 to 27 classes and the temporary closure of the Center on Sundays—efforts aimed at creating a more financially sustainable programming model. Additionally, fitness instructors (excluding those certified in the Silver Sneakers program) have transitioned from employee status to independent contractors. This change is designed to maintain instructional quality while improving cost-effectiveness. The City plans to expand class offerings under this revised model in the coming months.
Staffing levels across all departments were thoroughly evaluated, resulting in select roles within Guest Services and Administration being reduced to part-time or left vacant. Due to staffing shortages, Sunday operations were temporarily suspended, leading to significant personnel cost savings—equivalent to 43% of the personnel budget at mid-year. Despite these efforts, the Center continues to face challenges in recruiting qualified lifeguards, with at least four part-time and two full-time positions remaining vacant. These roles are critical to ensuring the Center can operate seven days a week, including holidays, while maintaining essential safety standards.
In July 2024, eleven full-time C.V. Starr Center employees will begin receiving City benefits—including medical, dental, vision, and CalPERS retirement—representing an important investment in workforce stability. These benefit costs have been incorporated into the FY 2025 budget.
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 $1.6 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.
INTERNAL SERVICE: FACILITIES REPAIR & MAINTENANCE
Internal Service Funds-Facilities fund accounts for the maintenance of all City-owned buildings.
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.
Two budget amendments totaling $82,821 are being requested for the IT Department. The first amendment is for software costs related to the Accela Permitting upgrades used by Planning, Engineering, and Building. The second amendment of $8,750 is for transitioning from Microsoft Commercial Cloud to Microsoft Government Cloud, which is required to meet government security and compliance standards.
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.
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.
The FISCAL YEAR 2025/26 BUDGET PREPARATION
A. BUDGET PREPARATION FY 2025/26 SCHEDULE
Initial activities related to preparing the Fiscal Year 2025/26 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 FOR FY 2025/26 BUDGET DEVELOPMENT Staff used the prioritized list as guidance in preparing the FY2024 budget and will again use the list in preparing the FY 2026 budget unless the Council directs otherwise:
Adopt a balanced budget (ongoing revenues should support expenditures. Accordingly, one-time revenues/grants should not be used for ongoing expenditures continuously) Provide additional contributions to the Section 115 Trust to help pay the unfunded liability Maintain operating reserve (20% of operating Exp) and litigation reserve ($200k) Provide additional funding for emergency reserves (10% of Operating Expenditures) Maintain current level of service (no staff layoffs, no program cuts) Provide cost of living adjustments for Staff in years to come Infrastructure Improvements: Streets & Alleys
Code Enforcement Policy
Department Staffing Needs
City of Fort Bragg
Mid-Year Budget FY 2024/25
City of Fort Bragg
Mid-Year Budget FY 2024/25
CITY OF FORT BRAGG
FY 2021/22 MID-YEAR REPORT
As of December 31, 2021