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9 DATE: June 17, 2024
TO: Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
FROM: Stefan Chatwin, City/District Manager
Waqas Hassan, Assistant Finance Director
DEPARTMENT: City Manager, Finance
SUBJECT: ADOPTION OF FY 2024-25 CITY/DISTRICT BUDGET
RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors (City Council) approve the attached resolutions approving the Fiscal Year 2024-25 City/EMID Budget.
EXECUTIVE SUMMARY
As part of the City/EMID’s annual budget process, the City Council held a budget study session on February 26 to review the mid-year projections for FY 2023-24 and to provide policy direction on the preparation of the FY 2024-25 budget and 5-year financial plan. Budget study sessions were then held on March 25 and May 20, followed by a public hearing of the FY 2024-25 Preliminary Budget on June 3. At the June 17 Council meeting, staff recommends City Council’s approval of the FY 2024-25 City/EMID Budget.
BACKGROUND AND ANALYSIS
On May 20, City staff presented the FY 2024-25 Preliminary Budget and 5-year financial plan for all Funds, including the General Fund (Funds 001 to 003). The budget indicated a $5.44 million General Fund structural deficit for FY 2024-25 as well as structural deficits for the entirety of the 5-year financial plan. Budget revisions were presented to the City Council on June 3, including a $142,028 expenditure increase for the General Fund, due to the cost-of-living adjustment (COLA) to the salaries of the
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9 Police Officers Association (POA) and Management Employees groups effective July 1, 2024. Based on the above-mentioned increase to the FY 2024-25 General Fund budget (Funds 001 to 003), the revised deficit is now $5.58 million as well as larger deficits for the remainder of the 5-year financial plan. A summary of the budget revisions since the May 20 Preliminary Budget and a revised General Fund 5-year financial plan can be found in Attachments 4 and 5 respectively.
The FY 2024-25 Final City/EMID Budget for all funds totaling $142.86 million includes direction received from the City Council at various budget study sessions and a public hearing. The City Council also provided direction to use the General Fund reserves to address the FY 2024-25 General Fund budget shortfall and for staff to develop strategies to address subsequent years’ deficits. Such strategies may include additional or updated revenue opportunities, cost recovery measures, and operational efficiencies.
During the meeting, staff also presented funding sources for the approximately $9.55 million budget shortfall for the Recreation Center Rebuild Project that was incorporated into the Preliminary Budget. The Council then directed staff to proceed with incorporating the terms from the Preliminary Budget into the Final Budget for FY 2024- 2025 to be considered for adoption by the City Council/Board of Directors on June 17, 2024.
Having reviewed the Preliminary Budget and having held a public hearing on the Preliminary Budget, it is recommended that the City Council/EMID Board adopt the attached resolutions approving the proposed FY 2024-25 City/EMID Budget. The financial and personnel summary pages of the FY 2024-25 Budget are attached to this report (Attachment 3). The entire proposed FY 2024-25 Budget is available on the City’s website at https://www.fostercity.org/finance/page/annual-budget.
CEQA
Not Applicable
FISCAL IMPACT
Adoption of the annual budget authorizes expenditures identified in the budget for FY 24-25.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 - City Resolution
Attachment 2 - EMID Resolution
Attachment 3 - Exhibit to City/EMID Resolutions: Financial and Personnel Summaries 6 4
9 Attachment 4 - Revisions to the FY 2024-25 Preliminary Budget Presented on May 20, 2024
Attachment 5 - Revised General Fund (Funds 001 to 003) 5-Year Financial Plan