DATE:
November 1, 2022
TO:
Mayor and Council Members
Chair and Board Members, Hesperia Housing Authority
Chair and Board Members, Hesperia Water District
FROM:
Nils Bentsen, City Manager
BY:
Casey Brooksher, Director of Administrative Services
Lorraine Carmona, Budget/Finance Specialist
SUBJECT:
Fiscal Year 2021-22 Final Budget Amendments
RECOMMENDED ACTION
It is recommended that the following resolutions be adopted, amending the respective Fiscal Year (FY) 2021-22 Budgets for the City of Hesperia, Hesperia Housing Authority, and the Hesperia Water District:
City of Hesperia No. 2022-73
Hesperia Housing Authority HHA 2022-08
Hesperia Water District Resolution HWD 2022-17
BACKGROUND
In compliance with the City Council’s policy direction, staff has reviewed expenditures through the end of FY 2021-22, and has determined that the City of Hesperia, Hesperia Housing Authority, and Hesperia Water District will require year-end budget adjustments.
ISSUES/ANALYSIS
The analysis of expenditures through the end of FY 2021-22 indicates that the following budget amendment requests should be considered:
General Fund (100)
Operating Transfer Out for Pension Obligation Trust – $4,000,000 As identified in the May 17, 2022 Budget Workshop, Fund 105 Pension Obligation Trust has been created to establish, manage, and mitigate the CalPERS unfunded pension liability. This transfer moved the funds to establish the trust to fund the CalPERS pension obligation.
Development Impact Fee–Public Services (304)
DIF Public Services 304 to DIF City Hall Facilities 309 Transition – $1,461 In May 2018, the City Council approved a Development Impact Fee (DIF) Study and rate structure for new development, which took effect in July 2018. As such DIF 2018 City Hall Facilities Fund 309 was created to account for the new development under the 2018 rates. Existing projects that were in various stages of construction were able to continue under the previous DIF 304. Therefore, the income from operations under DIF 304 needs to be transitioned to the new DIF 309.
Development Impact Fee 2018 – City Hall Facilities (309) DIF 2018 – City Hall Facilities Reduction in Advances from General Fund – $400,000 Annually, the General Fund has advanced funds to DIF Public Services/City Hall Facilities for the DIF share of debt service on the 2013 Civic Plaza Refunding Lease Revenue Bonds in advance of development. After the FY 2021-22 General Fund advance of $870,000, an analysis was performed of Fund 309 operations for FY 2021-22 and it was determined that based upon current and anticipated development, funding in the amount of $400,000 was available to be returned to the General Fund, reducing the overall FY 2021-22 advance from the General Fund to $470,000.
Hesperia Housing Authority (HHA) (370)
Reimbursement to NSP Program – $305,588
During Fiscal Year (FY) 2008-09 through FY 2021-22, the Neighborhood Stabilization Program (NSP) Grant provided emergency assistance to stabilize communities with high rates of abandoned and foreclosed homes, and assisted income restricted households consistent with Low and Moderate Income Housing purposes. With closing out NSP, the expenditures incurred during the administration of the grant were in excess of the NSP administrative cap allowance, therefore approval to reimburse NSP from HHA funds is requested.
Water Operating (700)
Utility Billing – Water Arrearages Grant Expenditures – $445,362 During FY 2021-22, the State Water Resources Control Board provided grant funds to the Hesperia Water District for use in applying to delinquent water accounts meeting the grant requirements. This request is to allocate funding for the grant expenditures which was offset by the grant revenue that was received.
Sewer Operating (710)
Wastewater – $210,030
The Water District’s actual million gallons of flow was 808.311 as compared to the projected budget of 758.712 million gallons. Approval to cover the actual million gallons of total flow is being requested.
Utility Billing – Wastewater Arrearages Grant Expenditures – $82,662 During FY 2021-22, the State Water Resources Control Board provided grant funds to the Hesperia Water District for use in applying to delinquent sewer accounts meeting the grant requirements. This request is to allocate funding for the grant expenditures which was offset by the grant revenue that was received.
City Engineering Services
Consistent with Joint Resolution 2018-06, budgeted funding for the City’s engineering services contract with TKE Engineering was identified in the FY 2021-22 Operating Budget in the amount of $460,000, and FY 2021-22 engineering expenditures for operating purposes were within the operating budget, at $396,049. While the overall FY 2021-22 Capital Improvement Program (CIP) Budget was sufficient to fund capital project expenditures, contract engineering costs were not specifically identified in the CIP Budget. As such, notification is provided that TKE Engineering services in the amount of $361,453 were incurred during FY 2021-22 related to CIP projects and for services provided through trust funding. As sufficient budget exists within the respective funding sources for the City’s CIP projects during FY 2021-22, a budget amendment related to engineering services is not needed.
FISCAL IMPACT
The proposed Final Fiscal Year 2021-22 Budget Amendments will be funded from a combination of revenues received, operating transfers, and the use of reserves.
ALTERNATIVES
Provide alternative direction to staff.
ATTACHMENTS
Resolution No. 2022-73
Resolution HHA 2022-08
Resolution HWD 2022-17
City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the Mayor and Boards of the Hesperia Housing Authority and Hesperia Water District Final Budget Amendments for Fiscal Year (FY) 2021-22
November 1, 2022