Fremont City Council Meeting: 05/17/22 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Budget
SCHEDULED
Sponsors:
STAFF REPORT (ID # 4609) DOC ID: 4609
Updated: 5/12/2022 5:03 PM by Alberto Quintanilla Page 1 FY 2022/23 PROPOSED OPERATING BUDGET - Presentation of Fiscal Year 2022/23 Proposed Operating Budget for the City of Fremont Contact Persons:
Name: David Persselin
Title: Finance Director
Div/Dept: Finance Department
Phone: 510-494-4631
E-Mail: [email protected]
Executive Summary: The FY 2022/23 Proposed Operating Budget has been developed and is presented for the City Council’s review and comment. Public hearings on the proposed budget are scheduled for June 7, 2022 and June 14, 2022, with adoption anticipated at the conclusion of the second public hearing.
BACKGROUND: This proposed budget combines our recovering ongoing revenues with federal fiscal recovery funds to not only maintain essential services, but also make targeted improvements that focus on City Council and community priorities. Additionally, the service level enhancements included in the proposed budget are consistent with the City Council’s stated foundational principle of fiscal sustainability. Our ability to improve on the current level of services and invest in the City’s future will depend on continued revenue growth and sustained fiscal discipline by the City’s collective leadership.
DISCUSSION/ANALYSIS: The current fiscal year began with the lifting of many public health restrictions on businesses and consumers, saw a re-imposition of those restrictions as COVID-19 infections surged in the Summer and again in the Fall, and now appears to be ending with relatively few impediments to life as we knew it before the pandemic. We were able to restore services to pre-pandemic levels thanks to the first installment of ARPA fiscal recovery funds and most of our revenues are responding well to increased economic activity.
Looking ahead to FY 2022/23, staff anticipates that growth in the national economy will slow to a more moderate pace. Although the use of ARPA fiscal recovery funds to maintain pre-pandemic service levels is projected to continue, our improved revenue performance is giving us some additional ongoing service capacity. Following the City’s sustainable budgeting principles, we will be limiting any proposed service enhancements or staffing increases to levels that can be supported on an ongoing basis.
Fiscal Year 2022/23 Proposed Operating Budget
General Fund budgeted resources in the coming year, including $22.1 million of fiscal recovery funds that will be recognized as revenue in FY 2021/22, are estimated to be adequate to support total budgeted expenditures of $249.3 million. Reflecting improvement in the local economy, ongoing General Fund resources are estimated to increase by 4.1% in FY 2022/23.
Staff Report (ID # 4609) Meeting of May 17, 2022
Updated: 5/12/2022 5:03 PM by Alberto Quintanilla Page 2 Although the use of fiscal recovery funds to maintain pre-pandemic service levels is projected to continue, the improved revenue performance is giving us some additional ongoing service capacity. The FY 2022/23 budget responds to City Council and community priorities by funding initiatives designed to enhance public safety, address homelessness, and increase the vitality of our business districts, while also improving service delivery across the organization. However, following the City’s sustainable budgeting principles, service enhancements or staffing increases for FY 2022/23 are limited to levels that can be supported on an ongoing basis.
Since most of the City’s services are delivered by City employees, enhancing current services or implementing new initiatives requires additional staff. We are proposing to increase staffing in FY 2022/23 by 26 full-time positions. In the General Fund, those include full staffing for a new fire truck company, two police officers, new staff for emergency services, animal services, and park maintenance, as well as several support positions. In the Development Cost Center, we are adding positions in planning and engineering to support new development, in the Recreation Fund we are staffing the new Downtown Event Center, and in the Human Services Funds we are adding a homeless program case manager and a position to support the Medi-Cal program.
General Fund Reserves
The FY 2022/23 Proposed Operating Budget maintains the General Fund Contingency Reserve at 16.7% of budgeted expenditures and transfers out, or $41.6 million, a level consistent with City Council policy and the recommended practice of the Government Finance Officers Association of the United States and Canada.
The General Fund Budget Uncertainty Reserve, restored and increased in FY 2021/22, will remain at its current balance of $10.0 million.
FISCAL IMPACT: The City Council is not being asked to take action tonight on the FY 2022/23 Proposed Operating Budget other than to provide comments to staff. An initial public hearing will be held on June 7, 2022, with a second public hearing and adoption of the budget scheduled for June 14, 2022.
ENVIRONMENTAL REVIEW: N/A
LINK: The FY 2022/23 Proposed Operating Budget is posted on the City’s website at https://www.fremont.gov/1593/Financial-Reports.
RECOMMENDATION: Accept staff’s budget presentation and provide comments.