City of Fullerton, CAApril 23, 2024
Budget Study SessionFY 2024-25 Proposed Budget
Budget Study Session Agenda
Budget Timeline
FY 2024-25 Budget Highlights
FY 2024-25 Proposed General Fund Budget
Capital Improvement Plan (CIP) / Infrastructure
2 Budget Timeline
Community Priorities Survey conducted in 2023
Collaborative Budget Process with all Departments
Budget Community Meeting held on April 17, 2024
Budget Priorities Community Survey
Budget Study Session on FY 2024-25 Proposed Budget
3 Budget Priorities Community Survey
To seek community input on budget priorities
Based on the results as of 4/18/2024
Top 3 Priorities: Improving Streets & Roads, Public Safety, Addressing Homelessness 75% of respondents said Improving Street & Road Conditions is Very Important Survey can be found online on the City’s website, paper copies are also available Residents, Business Owners, and Frequent Visitors are encouraged to take the survey 4 Budget Highlights
City’s Top Priorities: Public Safety, Infrastructure and Fiscal & Organizational Stability General Fund Budget Highlights
Public Safety ~ Enhanced Service levels and Investment in Safety Equipment Investment in the Labor Workforce
Return of Key Community Events ~ Fourth of July, First Night & Hunt Library 17% Contingency Reserve levels anticipated for FY 2024-25 Streets Infrastructure ~ $8 million for Streets in FY 2024-25 Compared to an average of $4.2 to $6.5 million prior to ARPA funds $6 million Federal earmark submitted for Harbor Blvd.
5 City Priorities & Community Programs
6 Pictured Above: Hunt Library located at 201 S. Basque Ave
City Priorities & Community Programs
7 FY 2024-25 General Fund Revenues of $127.6 Million
8 $127.6 M
FY 2024-25 General Fund Revenues
General Fund Revenues $127.6 Million – $6.9 million (or 5.8%) increase Property Tax – $58.0 million; $3.4 million increase
Diverse & stable property tax base
Strong assessed valuations & RDA property tax receipts
Sales Tax – $30.5 million
Flat growth due to stabilization of the economy
Diverse economic sales tax base & continued stable growth TOT – $3.4 million
TOT rate at 10% compared to 10%-15% in surrounding Cities.
Charges for Services – $14.3 million; $2.4 million increase Cost Recovery for Fire User Fees
Ambulance billing revenue
9 FY 2024-25 General Fund Expenditures of $132.7 Million 10 FY 2024-25 General Fund Expenditures
General Fund Expenditures $132.7 Million – Increase of $11.8 million (9.8%) from FY 2023-24.
Salaries & Benefits – $7.3 million increase
Approved Labor Agreements with all Labor Groups
CalPERS Pension UAL – Rising UAL amortization
Maintenance & Operations – $1.2 million increase
Current inflationary environment & cost of doing business Internal Service Fund (ISF) Allocations – $3.3 million increase Labor driven ISF funds, agreement and software increases General Fund Transfers Out (Non-Operating)
Streets Infrastructure ~ $3 million (General & Infrastructure Funds) to Residential Streets IT Fund ~ $1.6 million for critical IT replacement and upgrade projects 11 FY 2024-25 Proposed General Fund Budget
12 Fiscal Challenges
Expenditures are Outpacing Revenue
Budget impacts from maintaining competitive salaries in region with approved labor agreements Even with Pension reform, Unfunded Actuarial Liability (UAL) remains high due to external factors (i.e., legislation, lowering the discount rate, investment strategies, etc.) Historically high inflationary environment & higher cost of doing business Employee Retention & Service Level Demand
Reduction in labor would result in reduced services
Nearly 73% of General Fund expenditures are for Public Safety (Police and Fire) Aging City Infrastructure
City Manager to bring back options over the next year to the City Council to Stabilize the Budget 13 FY 2024-25 Proposed Budget Recommendations (included in Proposed Budget) 14 FY 2024-25 Proposed Budget Recommendations(included in Proposed Budget) 15 FY 2024-25 Alternative Budget Options(Not included in Proposed Budget) 16 Street Financing Evaluation
Pursue Street Financing ~ Issue Debt
$35 million Issue ~ $14 million over 4 Years for Streets Will not meet Measure M2 MOE in FY 28-29
Potential loss of Measure M2 Funds (est. $3.4 - $3.6 million) Without Street Financing ~ No Debt
Same level of investment in Streets ~ Approx. $5.5-$6 million annually Will not meet Measure M2 MOE in FY 25-26
Potential loss of Measure M2 Funds (est. $3.4 - $3.6 million) 17 Street Financing Evaluation – Issue Debt
18 Street Financing Evaluation – No Debt
19 Recommendation
Receive and file.
Provide direction on the FY 2024-25 Proposed General Fund Budget and FY 2024-25 Proposed Capital Improvements Projects Plan.
Provide direction on Street Financing Option.
20 CIP / Infrastructure Projects
21 FY 2024-25 Proposed CIP Budget
22 CIP Project Category
FY 24-25
Proposed
Street Rehabilitation
8,000,000
Utility – Water System
20,225,000
Utility - Sewer and Storm Drain Systems
1,500,000
Traffic Systems
1,195,440
Airport
1,173,000
City Facilities (Buildings, Accessibility, etc.)
1,800,000
Parks
4,200,000
Misc. Projects (Sidewalk, PMP, etc.)
1,038,610
Total Proposed CIP Budget
$39,132,050
CIP / Infrastructure Projects
Street Rehabilitation Planned Projects:
Arterial Projects: Placentia Ave & 1 other major arterial street Residential: Maplewood Area, Hermosa Area & other identified streets.
Slurry Seal/Pavement Project: Various Streets.
Water Infrastructure Planned Projects:
Water Main replacements with PFAS issues
Reservoir rehabilitation
Sewer & Storm Drain Planned Projects:
Storm Drain Repair and Rehabilitation
Curb, Gutter and Sidewalk Reconstruction
23 CIP / Infrastructure Projects
Traffic Systems Planned Projects:
Traffic Signal upgrades and repairs
Street Light conversion analysis
City Facilities Projects:
Airport Hangars rehabilitation with $1.1 million FAA grant Various City facilities and ADA improvements (Infrastructure funds) Independence Park and Lions Field
24 Recommendation
Receive and file.
Provide direction on the FY 2024-25 Proposed General Fund Budget and FY 2024-25 Proposed Capital Improvements Projects Plan.
Provide direction on Street Financing Option.
25