Fremont City Council Meeting: 05/16/23 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Budget
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 4899) DOC ID: 4899
Updated: 5/15/2023 11:42 AM by Alberto Quintanilla Page 1 FY 2023/24 PROPOSED OPERATING BUDGET - Presentation of Fiscal Year 2023/24 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 2023/24 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 6, 2023, and June 13, 2023, with adoption anticipated at the conclusion of the second public hearing.
BACKGROUND: This proposed budget takes advantage of our growing local revenues 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 an d invest in the City’s future will depend on continued revenue growth and sustained fiscal discipline by the City’s collective leadership.
DISCUSSION/ANALYSIS: Staff anticipates that growth in the national economy will slow during FY 2023/24. Because some of the City’s largest revenues - property tax and business tax - are based on prior-year activity, the impact of a slowdown might not be fully felt until FY 2024/25. Following the City’s sustainable budgeting principles, we have limited any proposed service enhancements or staffing increases to levels that can be supported on an ongoing basis.
Fiscal Year 2023/24 Proposed Operating Budget
General Fund budgeted resources in the coming year are estimated to be more than adequate to support total budgeted expenditures of $278.1 million. Although growth in the national economy is likely to slow during FY 2023/24, the improved revenue performance we’ve seen over the last year is giving us some additional ongoing service capacity.
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 2023/24 by 21 full-time positions. In the General Fund, those include additional police officers, a firefighter recruit academy to prepare for activation of the new fire truck company, a community service officer for the mobile evaluation team, staff to support urban landscape and forestry activities, a new street maintenance crew, and staff and funding to expand Citywide marketing efforts to promote downtown and neighborhood business district vitality. Outside the General Fund, several human services positions will provide mental health services and homeless support, and the addition of a plans examiner will increase capacity to serve new development. The FY 2023/24 proposed budget also Council Staff Report (ID # 4899) Meeting of May 16, 2023 Updated: 5/15/2023 11:42 AM by Alberto Quintanilla Page 2 includes increasing the ongoing General Fund allocations for street, park, and building maintenance activities.
These proposed additions to the operating budget respond to City Council and community priorities by funding fiscally-sustainable initiatives designed to enhance public safety, address homelessness, and increase the vitality of our business districts, while also improving service delivery across the organization.
General Fund Reserves
The FY 2023/24 Proposed Operating Budget maintains the General Fund Contingency Reserve at 16.7% of budgeted expenditures and transfers out, or $46.4 million, a level consistent with City Council policy and the recommended practice of the Government Finance Officers Association of the United States and Canada.
Rapid growth in sales tax revenue over the last several years is increasing the General Fund’s exposure to fluctuations in the economy. Reflecting both the increasing contribution of sales tax revenue to General Fund resources and the heightened possibility of an economic slowdown or recession during FY 2023/24, the proposed budget includes a $7.5 million increase to the current $12.5 million Budget Uncertainty Reserve.
FISCAL IMPACT: The City Council is not being asked to take action tonight on the FY 2023/24 Proposed Operating Budget other than to provide comments to staff. An initial public hearing will be held on June 6, 2023, with a second public hearing and adoption of the budget scheduled for June 13, 2023.
ENVIRONMENTAL REVIEW: This agenda item is not subject to the requirements of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15378 as it is not defined as a “project.”
LINK: The FY 2023/24 Proposed Operating Budget is posted on the City’s website at https://www.fremont.gov/home/showpublisheddocument/13185.
RECOMMENDATION: Accept staff’s budget presentation and provide comments.