Hesperia City Council
November 21, 2023

FISCAL YEAR 2023-24

FIRST QUARTER BUDGET REVIEW

November 21, 2023

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2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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T A B L E O F C O N T E N T S

Page
Executive Summary ............................................................................................................................ 4 Status of FY 2023-24 Budget, Budget Amendments and Reserves:

General Fund .......................................................................................................................... 6 Water District .......................................................................................................................... 7 Streets Maintenance ............................................................................................................... 8 FY 2023-24 September 30, 2023 Year-To-Date Revenue Review:

Major Funds Revenue Summary ............................................................................................ 9 General Fund Revenues ......................................................................................................... 10 Community Development Block Grant Revenue ..................................................................... 12 Hesperia Housing Authority Revenue ..................................................................................... 12 Street Related Funds Revenue ............................................................................................... 13 Other City Funds Revenue ..................................................................................................... 14 Water District Revenue ........................................................................................................... 16 Department FY 2023-24 Budget Expenditure Status Summary ........................................................... 18 FY 2023-24 Total Expenditures By Department and Program ............................................................. 18 Proposed Budget Amendments – Summary ........................................................................................ 26 Proposed Budget Amendments – Narrative ......................................................................................... 26 2023-24 First Quarter Budget Salaries and Positions .......................................................................... 28 California Public Employees Retirement System (CalPERS) Update .................................................. 32

2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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EXECUTIVE SUMMARY

The following chart compares the FY 2023-24 Budget and September 2023 year-to-date (YTD) revenue and expenditure totals. The percentage comparisons for revenues and expenditures are based on comparing the September 202 3 YTD to the FY 202 3-24 Amended Budget. The Amended Budget is used to accurately reflect any changes to the adopted budget that occur from City Council approving budget amendments during the first three months of the fiscal year.

Status of Overall City Fiscal Year 2023-24 Budget
• Revenue: Based on the analysis of first quarter performance to date, revenue totals collected is $ 19.5 million, which is $ 6.8 million or 26 % less than was received through first quarter FY 2022-23. Overall, revenue is 14% collected of the budget, which is due to the timing of payments related to larger revenue sources such as Measure I, Franchise Tax, and Vehicle License Fees. Additional details are provided further within the report. • Expenditures: At 18% utilized, the FY 20 23-24 Budget is proceeding as planned. Overall , the September 202 3 YTD expenditures of $ 24,680,758 are $2.3 million or 11% more than the September 2022 YTD of $22,330,256. It should be noted that there are five (5) budget amendments totaling $477,273 included in this report. • Reserves: The cash reserve policy for the General Fund and Water District (operating and capital) exceed the City Council’s minimum policy of two (2) months of the annual expenditures be held in cash. The following estimated reserve calculations are based on the June 30, 20 22 ending cash balances included in the June 30, 20 22 audited Annual Comprehensive Financial Report ( ACFR). Using the ACFR audited data assures that the estimated reserves are based on a ctual information. The ending cash balance will be revised in the Mid -Year report with the June 30, 202 3 ACFR figures. In addition, the five (5) First Quarter Budget Amendments, totaling $4 77,273, are reflected below where appropriate:

2023-24 2023-24 September Revised %
Budget Revised 2023 YTD Received/Expended
Revenue 137,967,681$ 137,967,681$ 19,456,434$ 14% Use of Reserves 11,356,960 12,190,036
Total Resources 149,324,641 150,157,717
Expenditures 136,996,564 137,550,954 24,680,758 18% Difference 12,328,077$ 12,606,763$
10% Cash Reserves (Council/Board Policy) 4,766,548$ 10% 3,826,165$ 10% Cash Reserves Above 10% Reserve 16,985,151 36% 21,210,062 54% Total Estimated Cash Reserves 21,751,699$ 46% 25,036,227$ 64% Months of Cash 5.5 7.9
Water DistrictGeneral Fund
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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EXECUTIVE SUMMARY (Continued)

Proposed Budget Amendments – Five (5) Budget Amendments are proposed for $477,273 The FY 2023-24 First Quarter Budget Review includes five (5) items as proposed budget amendments totaling $477,273. A complete discussion of the budget amendments is included on page 26 . The proposed budget amendments are included in the fund balance analyses where appropriate:

Revenues and Expenditures through September 30, 2023 for the City’s main funds are summarized as follows:

General Other
FY 2023-24 1st Quarter Budget Requests Fund Funds Totals

1. Software licensing and support renewal 109,500$ 0$ 109,500$

2. Camera upgrades (Animal Services facility) 17,786 0 17,786

3. Fair Housing Activities 21,400 0 21,400

4. Vacant Land Purchase (Cataba Rd CO 7901) 0 198,587 198,587

5. Skip Loader Purchase 0 130,000 130,000 Total 1st Quarter Budget Amendments Requests 148,686$ 328,587$ 477,273$ General Fund
Amended
Budget September
% of Amend.

Received
Amended
Budget September
%
Expended
City Council 819,204$ 205,494$ 25%
City Manager 1,680,770 568,701 34% Management Services 9,929,488 3,906,340 39% Economic Development 401,311 135,773 34% D.S.-Community Development 2,502,575 696,995 28% D.S.-Code Compliance 5,239,933 1,302,679 25% D.S.-Public Works (G.F.) 2,585,545 578,122 22% Police 21,972,838 5,411,316 25%
Total General Fund 47,466,791$ 4,791,796$ 10% 45,131,664$ 12,805,419$ 28% Community Development Block Grant 997,511 51,312 5% 100,932 18,767 19% Hesperia Housing Authority 173,590 215,248 124% 75,781 6,396 8% D.S.-Public Works 14,890 13,021 87% 4,245,558 988,753 23% Streets CIP Funds 48,973,924 4,931,073 10% 42,477,112 4,108,690 10% Other City Related Funds 3,835,355 2,575,456 67% 6,431,097 1,153 0% D.S.-Water Operating and Capital 28,287,028 5,478,733 19% 25,214,337 4,792,119 19% D.S.-Sewer Operating and Capital 8,162,264 1,390,599 17% 12,936,815 1,052,145 8% Fire District 56,328 9,195 -84% 937,658 907,316 97% Total 137,967,681$ 19,456,434$ 14% 137,550,954$ 24,680,758$ 18% 2023-24 Revenue 2023-24 Expenditures
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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STATUS OF CITY GENERAL FUND 2023-24 BUDGET, BUDGET AMENDMENTS, AND RESERVES

2023-24 2023-24
Budget Revised Dollars Percent

RESOURCES
General Fund Operating Revenue 47,466,791$ 47,466,791$ 0$ 0% Transfers In

1. Fund 255 - AB 3229 COPS Grant 200,000 200,000 Total Transfers In 200,000 200,000
Budgeted Reserves 0 0
First Quarter Budget Amendment Reserves 0 148,686 Total Budgeted Reserves 0$ 148,686$
Total General Fund Resources 47,666,791$ 47,815,477$ 148,686$ 0%

EXPENDITURES
Total General Fund Operating Expenses 45,131,664$ 45,131,664$ Transfers Out

1. Fund 210 - HFPD CalPERS 937,658 937,658
1,447,475 1,447,475
Total Transfers Out 2,385,133 2,385,133
Total General Fund Expenditures & Transfers Out 47,516,797$ 47,516,797$ 0$ 0% First Quarter Budget Amendments Requested

1. Software licensing and support renewal 0$ 109,500$

2. Camera upgrades (Animal Services facility) 0 17,786

3. Fair Housing Activities 0 21,400 Total First Quarter Budget Amendments 0 148,686 Total Expenditures and Amendments 47,516,797$ 47,665,483$ 148,686$ 0% DIFFERENCE TOTAL RESOURCES/TOTAL EXPENDITURES 149,994$ 149,994$ 0$ 0% Fund Balance
July 1 Beginning Balance 33,783,024$ 33,783,024$
Total Budgeted Reserves 0 (148,686) Difference Total Resources/Total Expenditures 149,994 149,994 Estimated June 30 Ending Fund Balance 33,933,018$ 33,784,332$ (148,686)$ 0% Months of Cash to Pay Expenditures and Transfers Out
Beginning Cash July 01, 21,899,077$ 21,899,077$
Estimated Resources Less Budgeted Reserves 47,666,791 47,518,105 Estimated Expenditures (47,516,797) (47,665,483)
22,049,071$ 21,751,699$
Months of Cash to Pay Expenditures and Transfers Out 5.6 5.5 Estimated Cash Reserves Percentage 46% 46%
Estimated Ending Cash June 30,
Change

2. Fund 402 - 2012 Water Rights Acquisition Debt Service 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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STATUS OF WATER DISTRICT 2023-24 BUDGET, BUDGET AMENDMENTS, AND RESERVES

2023-24 2023-24
Resources Budget Revised Dollars Percent
Revenue
Water Operating and Capital 27,947,839$ 27,947,839$ Sewer Operating and Capital 8,162,264 8,162,264 Reclaimed Water Operations 339,189 339,189
Total Revenue 36,449,292 36,449,292 0 0% Budgeted Reserves 4,785,619 5,450,509
Total Water District Resources 41,234,911$ 41,899,801$ 664,890$ 2% Expenditures by Program
Water Operating and Capital and Transfer Out 24,370,831$ 24,925,221$ 554,390$ 2% Sewer Operating and Capital 12,936,815 12,936,815 Reclaimed Water Operations 289,116 289,116
Total Water District Expenditures & Transfers Out 37,596,762$ 38,151,152$ 554,390$ 1% First Quarter Budget Amendment - Requested
0 110,500
0 110,500
Total Expenditures and Amendments 37,596,762$ 38,261,652$ 664,890$ 2% Establishment of Reserve Balances
Permanent Water Rights $ 1,146,888 1,146,888$
1998A Retirement 0 0
Total Reserve Balances 1,146,888 1,146,888
Total Water Expenditures & Reserve Balance Funding $ 38,743,650 $ 39,408,540 Difference Total Resources/Total Expenditures 2,491,261$ 2,491,261$ July 1 Beginning Balance 116,800,903$ 116,800,903$
Budgeted Reserves (4,785,619) (5,450,509)
Difference Resources/Expenditures 2,491,261 2,491,261 Reserve Balances 1,146,888 1,146,888
Estimated June 30 Ending Fund Balance 115,653,433$ 114,988,543$ Months of Cash to Pay Expenditures
Beginning Cash July 01, 26,848,587$ 26,848,587$
Estimated Resources Less Budgeted Reserves 36,449,292 36,449,292 Estimated Expenditures (37,596,762) (38,261,652)
25,701,117$ 25,036,227$
Months of Cash to Pay Expenditures and Transfers Out 8.2 7.9 Total Estimated Cash Reserves Percentage 68% 66%
Estimated Ending Cash June 30,
Change

1. Skip Loader Purchase
Total First Quarter Budget Amendment - Requested
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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STATUS OF STREET MAINTENANCE FUND 2023-24 BUDGET, FUND BALANCE, AND RESERVES

2023-24 2023-24
RESOURCES Budget Revised Dollars Percent
Street Maintenance Operating Revenue 14,890$ 14,890$ 0$ 0% Transfers In
Fund 100 - General Fund 0$ 0$
Fund 204 - Measure I - Renewal 1,750,000 1,750,000
Fund 205 - Gas Tax Fund 1,400,000 1,400,000
Fund 206 - Gas Tax Swap 600,000 600,000
Fund 207 - Local Transportation Fund 226,883 226,883 Total Transfers In 3,976,883 3,976,883
Total Revenues 3,991,773 3,991,773
Budgeted Reserves 253,785 273,285
Total Street Maintenance Resources 4,245,558$ 4,265,058$ EXPENDITURES 4,245,558$ 4,245,558$ 0$ 0% First Quarter Budget Amendment Request

1. Skip Loader Purchase 0 19,500
Total First Quarter Budget Amendments 0 19,500 Total Expenditures and Amendments 4,245,558$ 4,265,058$ 19,500$ 0% DIFFERENCE RESOURCES/EXPENDITURES 0$ 0$ 0$ n/a Fund Balance
July 1 Beginning Balance 295,183$ 295,183$
Total Budgeted Reserves (253,785) (273,285)
Difference Resources/Expenditures 0 0 Estimated June 30 Ending Balance 41,398$ 21,898$
Change
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW

Overall – First quarter analysis reveals that $19.5 million or 1 4% percent of the total budgeted revenue has been collected. It should be noted that c hanges in the local state and national economic environments can impact each of these revenue sources and trends going forward; however, in this section, discussions will pertain to the revenue activity during the first quarter of Fiscal Year (FY) 2023-24.

General Fund revenues received through the first quarter of FY 2023 -24 totaled $4,791,796 or 10% of the total annual projected revenues of $47,466,791. This is $211,488 or 4% less than September 2022 YTD revenue of $5,003,284 due to a decrease in revenue sources such as Transient Occupancy Tax, Property Transfer Tax and Development related revenue. This decrease is also offset by the increase in revenue due to a one -time reimbursement from the State of California and an increase in Code Enforcement citation revenue compared to September 2022.

The Water District revenues received through the first quarter totaled $6.9 million or 19% of the total annual projected revenues of $ 36.5 million. Even though the Water District is trending as expected, t his revenue source is being monitored as delinquent accounts are being applied to the tax roll to recapture the missing revenue.

Staff will continue to monitor the FY 202 3-24 revenue and make any necessary reco mmendations for revisions during the Mid-Year Budget Review in February 202 4. The following pages will detail the current revenue collections for each fund.

September Change From
2023-24 2023-24 Percent 2023-24 Budget To
Budget Actual Received Revised Revised
General Fund 47,466,791$ 4,791,796$ 10% 47,466,791$ 0$ Community Development Block Grant 997,511 51,312 5% 997,511 0 Hesperia Housing Authority 173,590 215,248 124% 173,590 0 Street Related Funds 48,988,814 4,944,094 10% 48,988,814 0 Other City Related Funds 3,891,683 2,584,651 66% 3,891,683 0 Water Operating 26,662,353 5,056,980 19% 26,662,353 0 Water Capital 1,221,486 292,068 24% 1,221,486 0 Water Reserves 403,189 129,685 32% 403,189 0 Total Water Operating, Capital, & Reserves 28,287,028 5,478,733 19% 28,287,028 0 Sewer Operating 6,135,096 1,247,921 20% 6,135,096 0 Sewer Capital 2,021,200 131,875 7% 2,021,200 0 Sewer Reserves 5,968 10,802 181% 5,968 0 Total Sewer Operating, Capital, & Reserves 8,162,264 1,390,599 17% 8,162,264 0 Water District 36,449,292 6,869,332 19% 36,449,292 0 Total All Funds 137,967,681$ 19,456,434$ 14% 137,967,681$ 0$

MAJOR FUNDS REVENUE SUMMARY
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW (Continued)

General Fund Revenue Comments:

In total, General Fund is trending as expected for First Quarter. As demonstrated in the discussions to follow, there tends to be a lag of revenue collection at the beginning of the fiscal year. This is normal and much of the revenue, especially tax based, typically is received during October and November.

Sales and Use Tax – For the first quarter of FY 2023 -24, the City received $1,026,496 for (1) month (July 2023) of activity, which is 4% or $40,439 less than the $1,066,935 for the July 2022 activity collected September 2022. This decrease is not necessarily alarming but sta ff will continue to monitor Sales Tax in the coming months as data is received. There is typically a two month delay from the month close to when the State reports to the City. As an example, the second installment of $1,048,913 for the month of August 2023 was received in October 2023 and it is 2% or $16,826 less than second installment of $1,065,739 for the month of August 2022.

Vehicle License Fee (VLF) – This revenue is based on the City’s assessed valuation of the properties within the City .

As the assessed valuation changes from the prior year, this revenue changes by the same percentage. There is no revenue reported through September 2023, as the first installment of the VLF is expected to be received during January 2024.

Franchise Fees – The City receives f ranchise fees for Cable TV, Advance Disposal, Southwest Gas, Southern California Edison, and Water service providers within the City as “rent” for the use of streets and public right -of-way within our municipality . Revenue through September 2023 YTD total $78,818 , which $16,318 or 26% more than September 2022 YTD of $62,500. Please note that the majority of franchise fees are received in the second half of the fiscal year.

September Change From
2023-24 2023-24 Percent 2023-24 Budget To
Budget Actual Received Revised Revised
Sales and Use Tax 14,439,963$ 1,026,496$ 7% 14,439,963$ 0$ Vehicle License Fees 11,565,002 0 0% 11,565,002 0 Franchise Fees 4,308,213 78,818 2% 4,308,213 0 Total Top Three Revenues 30,313,178 1,105,314 4% 30,313,178 0 General & Administrative Recovery 3,750,935 937,734 25% 3,750,935 0 Transient Occupancy Tax 1,700,000 186,108 11% 1,700,000 0 Property Transfer Tax 300,000 31,074 10% 300,000 0 Secured Property Tax 1,118,712 0 0% 1,118,712 0 Business License 824,243 223,325 27% 824,243 0 Commercial Cannabis Tax 350,000 33,311 10% 350,000 0 Community Facilities District 2005-1 379,185 96,991 26% 379,185 0 Leased Water Rights 2,152,605 0 0% 2,152,605 0 Development Related Revenues
Planning 563,260 180,482 32% 563,260 0 Building & Safety 1,666,784 563,774 34% 1,666,784 0 Engineering 955,830 167,462 18% 955,830 0 Sub-Total Development Related Revenues 3,185,874 911,718 29% 3,185,874 0 Sub-Total Top 12 Revenue Sources 44,074,732 3,525,575 8% 44,074,732 0 All Other General Fund Revenues 3,392,059 1,266,221 37% 3,392,059 0 Total General Fund Revenues 47,466,791$ 4,791,796$ 10% 47,466,791$ 0$

GENERAL FUND REVENUES
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW (Continued)

General Fund Revenue Comments (Continued):

Transient Occupancy Tax (TOT) – TOT is a tax of 10% applied to the cost of hotel and other lodging stays of less than 30 days. Through September 2023, the City collected $186,108, which is a decrease of $96,653 or 34% less than the September 202 2 YTD of $ 282,761. This decrease is primarily due to the timing of monthly receipts from the hotel operators. T welve (12) receipts have been received through September 2023 YTD compared to the fourt een (1 4) received September 2022 YTD. When comparing the twelve receipts received to the FY 2023-24 Budget of $1.7 million, this revenue source is trending as expected.

Property Transfer Tax – This revenue is based upon the chang e in property valuation upon the change in ownership within the City. This revenue source is volatile and changes with the assessed values of local properties and changes in the housing market. The decrease in revenue is largely due to the timing of receipts as the $ 31,074 received through September 2023 is $39,699 less than the $70,081 received in the prior fiscal year for two receipts. When factoring in the second receipt of $25,382 received in October 2023, the total revenue collections of $56,456 is 19% collected and is trending slightly above the FY 2023-24 Budget of $300,000.

Secured Property Tax – The first remittance from the County will be received in November 2023; therefore, there is no revenue to report through September 2023.

Business License – The City taxes businesses for conducting business within the City. The FY 2023 -24 Budget of $824,243 projects a slight increase in the total number of business licenses. The FY 2023 -24 First Quarter revenue collections is performing as anticipated with total revenue collection of 27% of the FY 2023-24 Budget.

Commercial Cannabis Tax – All commercial cannabis businesses operating within the City pay a variable tax, currently 4%, on gross receipts from business operation s. T he September 2023 YTD receipts of $33, 311 is being received as budgeted. The City currently has five (5) businesses operating licenses within the City.

Community Facilities District 2005-1 – This special assessment district (generally west of Maple Avenue and south of Main Street), was formed to refinance the bonds of CFD 91-3 and assesses the properties within the district to repay the bonds. Part of the annual assessment includes a public safety portion to offset some of the costs that residential development places on the City’s public safety providers. The September 202 3 YTD of $ 96,991 is being received as budgeted.

Leased Water Rights – The permanent water rights owned by the General Fund can be leased annually and the lease revenue is used to pay for the 2012 Bonds, which financed the purchase of the water rights. The leasing of water rights will occur later during the fiscal year.

Development Related Revenue – This revenue source accounts primarily for development related fees such as Planning, Building and Safety, and Engineering. As of September 30, 2023, total revenue collected is $911,718 or 28% of the total budgeted revenue of $3,158,874. This revenue source is pe rforming as anticipated. Compared to the September 2022 YTD of $1,571,908 collected, this revenue is showing a 42% or $660,190 decrease; however, this was anticipated when developing the FY 2023 -24 Budget, as the City received permits for over one million square foot of industrial related revenue in FY 2022-23.

All Other General Fund Revenue – Other General Fund Revenue accounts are $1,266,221 or 37% collected through September 30, 2023. Compared to the 1st Quarter September 2022 YTD of $724,778 collected, this revenue is showing a $541,443 or 74% increase, which is largely due to a one -time reimbursement from the State of California and an increase in Code Enforcement citation revenue.

2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW (Continued)

Community Development Block Grant Revenue Comments:

These revenues are grant reimbursements that promote economic and housing development and rehabilitation projects, with an emphasis on activities that create jobs, build or enhance infrastructure, and provide affordable housing to Hesperia residents. This grant must be spent prior to submitting for reimbursements. The FY 20 23-24 Budget revenue estimates represent anticipated reimbursements to be claimed during the fiscal year. It is anticipated that the majority of the reimbursements will be received after December 2023.

All Other CDBG Revenues – This revenue includes CDBG Program income and interest revenue for the HOME Grant fund and the CDBG Revolving Loan fund. These revenues are more one -time in nature and are not received on a time schedule as other revenue. First Quarter revenue of $51,312 has been received, which is for loan repayments related to Housing Rehabilitation Loan Program and gains from changes in the market value on investment.

Hesperia Housing Authority (HHA) Revenue Comments:

This program was developed to promote projects that improve the City’s housing stock and provide affordable housing opportunities. The revenue received as of September 2023 YTD of $215,248 is primarily proceeds from a vacant land sale and interest income from investments.

September Change From
2023-24 2023-24 Percent 2023-24 Budget To
Budget Actual Received Revised Revised
CDBG Administration Reimbursement 899,363$ 0$ 0% 899,363$ 0$ All Other CDBG Revenues 98,148 51,312 52% 98,148 0 Total CDBG Revenues 997,511$ 51,312$ 5% 997,511$ 0$

COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) REVENUE
September Change From
2023-24 2023-24 Percent 2023-24 Budget To
Budget Actual Received Revised Revised
Interest Income 50,244$ 60,763$ 121% 50,244$ 0$ Loan Repayments 91,846 0 0% 91,846 0 Miscellaneous Income 1,500 127,431 8495% 1,500 0 Sub-Total HHA Revenue 143,590 188,194 131% 143,590 0 VVEDA Housing Authority Revenue 30,000 27,054 90% 30,000 0 Total HHA Revenue 173,590$ 215,248$ 124% 173,590$ 0$

HESPERIA HOUSING AUTHORITY (HHA) REVENUE
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW (Continued)

Street Related Funds Revenue Comments:

Measure I - Renewal – This fund is used to account for the renewed Measure I sales tax based on revenue generated from the ½ cent added t ax on sales tax in San Bernardino County. For Hesperia , there are no distinctions for Arterial, Local, or Transit, and the revenue is remitted by San Bernardino County Transportation Authority (SBCTA) to the City.

Due to a lag in receiving the revenue, there are no remittances to report as of September 2023.

Gas Tax – As of September 30, 2023 YTD, Gas Tax revenue primarily consists of one installment totaling $ 162,522, which is $7,471 more than the first installment received September 2022 of $155,051.

Gas Tax S wap – As of September 30, 2023 YTD, Gas Tax Swap revenue largely consists of one installment totaling $116,408, which is $17,100 higher than the first installment in FY 2022-23 of $99,308.

Local Transportation – This revenue source is mainly funded by the county ¼ cent sales tax and the primary use of this revenue is transportation related, including supporting the operations of Victor Valley Transit Authority . The revenue received through September 2023 of $40,218 consists of interest income.

Gas Tax RMRA – This revenue source is State -funded and took effect November 2017 during FY 2017 -18. This revenue is used to repair and maintain roads, freeways, and bridges. SB 1, the Road Repair and Accountability Act of 2017, increased the gas tax by 12 cents and 20 cents for diesel , which is adjusted for inflation each July starting in July 2020. The vehicle registration fee also increased depending on the value of the vehicle. As of September 30, 2023 YTD, Gas Tax RMRA revenue largely consists of one installment totaling $210,352.

Public Works-Street Maintenance – The estimated revenues are primarily interest earnings. In addition, this fund will occasionally receive miscellaneous reimbursements on an inconsistent basis, making compar isons to prior years irrelevant. The revenue received through September 2023 of $13,021 primarily consists of interest income.

Development Impact Fees for Streets and Storm Drain/Drainage – Through September 202 3 YTD, the combined revenue received is $4,186,121, which is $2,798,027 or 202% more than September 2022 YTD revenue of $1,388,094.

The primary reason for the increase between the two periods is due to the fees collected related to the 1,003,483 industrial square foot Hesperia Commerce 1-Building 3 and the payments received for 51 of 96 multi -family residential (MFR) projected to be received during FY 2023 -24. This revenue source varies each fiscal year depending on the completion of individual projects.

September Change From
2023-24 2023-24 Percent 2023-24 Budget To
Budget Actual Received Revised Revised
204 Measure I - Renewal 4,091,797$ 135,730$ 3% 4,091,797$ 0$ 205 Gas Tax Fund 1,805,700 162,522 9% 1,805,700 0 206 Gas Tax Swap Fund 953,626 132,563 14% 953,626 0 207 Local Transportation Fund 70,374 40,218 57% 70,374 0 209 Gas Tax - RMRA 2,504,413 273,580 11% 2,504,413 0 254 AQMD Fund 540 339 63% 540 0 263 Public Works Street Maintenance Fund 14,890 13,021 87% 14,890 0 300 Development Impact Fee-Streets 26,682 55,173 207% 26,682 0 301 Development Impact Fee-Storm Drain 70,112 44,051 63% 70,112 0 306 Development Impact Fee 2018 - Streets 13,548,158 3,126,499 23% 13,548,158 0 307 Development Impact Fee 2018 - Drainage 1,059,206 749,266 71% 1,059,206 0 313 Development Impact Fee 2018 - A-04 Drainage 370,497 211,132 57% 370,497 0 Sub-Total DIF Streets & Storm Drain 15,074,655 4,186,121 28% 15,074,655 0 504 City Streets CIP 24,472,819 0 0% 24,472,819 0 Total Street Related Funds 48,988,814$ 4,944,094$ 10% 48,988,814$ 0$

STREET RELATED FUNDS REVENUE
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW (Continued)

Street Related Funds Revenue Comments (Continued):

City Streets CIP – This fund tracks grant/reimbursement funded projects such as the Ranchero Road Improvements (7th Avenue to Mariposa Road), Walnut Street H -01 Retention Basin, the T raffic Signal at Main Street, Sultana Street/Timberlane Ave nue and the Ranchero Aqueduct crossing. The bulk of the budgeted revenue is for the reimbursement of Ranchero Road with the expectation of a reimbursement to be received later in the fiscal year.

Other City Funds Revenue Comments: Revenue for Other City funds are comprised of various grants, assessments, charges for services, intergovernmental, and other sources. Many of these funds only receive interest income during the fiscal year.

Pension Obligation Trust and OPEB Trust are funds established to manage and mitigate the unfunded pension liability and the post-employment benefits liabilities. The negative revenue in these funds consist of investment losses.

The market did experience a rating i ncrease i n late October and November wh ich, if continues , will offset these 1 st quarter losses.

Public Art – This fund is funded through donations. As of September 30, 2023 YTD, the Public Art Fund revenue largely consists of one payment totaling $250,000 designated for the Ranchero’s Interchange art project.

AB3229 Supplemental Law Fund – The passage of Senate Bill (SB) 89 allowed for the continued funding of the Supplemental Law Enforcement Funding (SLE SF). The City expects to receive $255,697 of SLESF funding , which is typically received later in the fiscal year. Through the first quarter 1% or $3,084 has been received which consist of gains from changes in the market value on investments. The first installment received in October is $133,589, which is $121,661 more than the first installment of FY 2022-23 of $11,928.

September Change From
2023-24 2023-24 Percent 2023-24 Budget To
Budget Actual Received Revised Revised
105 Pension Obligation Trust 0$ (42,768)$ n/a 0$ 0$ 106 OPEB Trust 0 (14,310) n/a 0 0 210 HFPD (PERS) Interest Income 56,328 9,195 16% 56,328 0 230 Public Art 0 250,000 n/a 0 0 255 AB3229 Supplemental Law Fund 255,697 3,084 1% 255,697 0 256 Environmental Programs Grant 78,555 3,563 5% 78,555 0 260 Disaster Preparedness Grant 998 627 63% 998 0 261 American Rescue Plan Act Grant 527,706 331,546 63% 527,706 0 262 SB 1383 Local Assistance Grant 28,713 1,479 5% 28,713 0 # /0 302 Development Impact Fee-Fire 33,079 20,784 63% 33,079 0 303 Development Impact Fee-Police 146 92 63% 146 0 304 Development Impact Fee-Public Services 373 0 0% 373 0 308 Development Impact Fee 2018 - Fire 1,439,784 991,198 69% 1,439,784 0 309 Development Impact Fee 2018 - City Hall 1,298,664 889,998 69% 1,298,664 0 310 Development Impact Fee 2018 - Animal Control 36,932 17,231 47% 36,932 0 311 Development Impact Fee 2018 - Records Storage 64,555 44,514 69% 64,555 0 312 Development Impact Fee 2018 - Police Facilities 24,753 17,155 69% 24,753 0 Sub-Total 302, 303, 304, 308, 309, 310, 311, and 312 2,898,286 1,980,971 68% 2,898,286 0 402 2012 Water Rights Acquisition 12,141 36,178 298% 12,141 0 403 2013 Refunding Lease Rev Bonds 33,259 24,993 75% 33,259 0 404 2023 Refunding Lease Revenue Bon 0 92 n/a 0 0 Sub-Total 402, 403, and 404 45,400 61,263 135% 45,400 0 Total Other City Funds 3,891,683$ 2,584,651$ 66% 3,891,683$ 0$

OTHER CITY FUNDS REVENUE
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW (Continued)

Other City Funds Revenue Comments (Continued):

Environmental Programs Grant – This fund tracks various grant reimbursements for various environmental events.

American Rescue Plan Act (ARPA) Grant – Coronavirus State and Local Fiscal Recovery Funds – This revenue is the Coronavirus State and Local Fiscal Recovery Funds in which the City receiv ed a total amount of $23.4 million in two installments of $11.7 million. The first allocation was received in September 2021, and the second allocation in September 2022. This ARPA funding must be spent on eligible costs incurred during the period that b egan on March 3, 2021 and ending on December 31, 2024. T he revenue received through September 2023 of $331,546 primarily consists of interest income.

SB 1383 Local Assistance Grant – This revenue source is state funded to assist local jurisdictions with the implementation of SB 1383, which is to reduce organic waste disposal and increase food waste diversion. The City expects to receive $28,713 for FY 2023-24 and as of September 30, 2023, $1,479 has been collected.

Development Impact Fees-Fire, Police, Public Services, City Hall, Animal Control, and Records Storage – The combined total of $ 1,980,971 for September 20 23 YTD is $1,804,574 more than September 20 22 YTD of $ 176,397.

This increase is due to the revenue received from the 1,003,483 industrial square foot Hesperia Commerce 1 -Building 3 and the 51 of 96 multi-family residential (MFR) projected to be received FY 2023-24.

2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW (Continued)

Water District Revenue Comments:

On December 2020, Congress funded a program to help low -income households pay down their outstanding residential water or wastewater bills. This new federal Low Income Household Water Assistance Program (LIHWAP) provides financial assistance to low income Californians to help manage their residential water and wastewater utility costs to a maximum amount of $15,000 per qualifying low -income household. The City started collecting these payments at the beginning of FY 2022-23 and as of September 30, 2023, collected $89,723.

The Hesperia Water District began applying liens to properties with outstanding water bills. Failure to pay within 60 days from the original bill due date, results in the Water District mailing the tenant and property owner a notice of lien. If the bill remains outstanding after an additional 10 days, the Water District will apply a lien on the property. During May of each year, all outstanding property liens will be converted to property tax liens. By doing so, the County will collec t outstanding balances as part of property tax collections during the following year. The Water District is utilizing such liens in lieu of water disconnections and traditional collection services as the primary mechanism for collections.

Water Sales – For the first quarter of FY 2023 -24, the Hesperia Water District collected $4,539,912 of sales revenue or 18% of the budgeted amount, which is comparable to the percentage collected through the first quarter in the prior year (FY 2022 -23). Overall, water sales revenue through September 2023 of $4,539,912 is lower than the FY 2022- 23 revenue for the same period ($4,756,931) by $217,019, or 5%. This is due to a decrease in Water Sales Construction and was anticipated in the FY 2023 -24 Budget. Through Septe mber 2023, Water Sales Construction of $186,458 was $214,904 less than the $401,362 collected through September 2022. The higher Water Sales Construction in FY 2022-23 was due to construction related to a large development project.

September Change From
2023-24 2023-24 Percent 2023-24 Budget To
Budget Actual Received Revised Revised
Water Operating Revenue
Water Sales 24,759,387$ 4,539,912$ 18% 24,759,387$ 0$ Interest Income 308,000 238,486 77% 308,000 0 Property Taxes 550,633 0 0% 550,633 0 Sub-Total 25,618,020 4,778,398 19% 25,618,020 0 All Other Water Operating Revenues 1,044,333 278,582 27% 1,044,333 0 Total Water Operating Revenues 26,662,353 5,056,980 19% 26,662,353 0 Capital Facilities Charges 1,146,486 292,067 25% 1,146,486 0 Grant Reimbursement 75,000 0 0% 75,000 0 Total Water Capital Revenue 1,221,486 292,067 24% 1,221,486 0 Reclaimed Water 339,189 62,721 18% 339,189 0 All Other Water Related Revenues 64,000 66,964 105% 64,000 0 Total Water Operating, Capital, & Related Revenues 28,287,028$ 5,478,733$ 19% 28,287,028$ 0$ Sewer Operating Revenue
Sewer Billing 5,670,896$ 1,015,301$ 18% 5,670,896$ 0$ All Other Sewer Operating Revenues 464,200 232,620 50% 464,200 0 Total Sewer Operating Revenue 6,135,096 1,247,921 20% 6,135,096 0 Sewer Connections 450,000 88,203 20% 450,000 0 All Other Sewer Capital Revenues 1,571,200 43,672 3% 1,571,200 0 Total Sewer Capital Revenue 2,021,200 131,875 7% 2,021,200 0 All Other Sewer Related Revenues 5,968 10,802 181% 5,968 0 Total Sewer Operating, Capital, & Related Revenues 8,162,264$ 1,390,599$ 17% 8,162,264$ 0$ Total Hesperia Water District Revenue 36,449,292$ 6,869,332$ 19% 36,449,292$ 0$

WATER DISTRICT REVENUE
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2023-24 SEPTEMBER 30, 2023 YEAR-TO-DATE REVENUE REVIEW (Continued)

Water District Revenue Comments (Continued):

Property Taxes – Property tax revenue is normally received from November 2023 through July 2024.

Other Water Operating Revenue – Through September 2023, $278,582 has been received, which is $119,354 or 30% less than September 2022 YTD of $ 397,936. This decrease is mainly due to the decrease of Water Inspection fees received this quarter.

Capital Facilities Surcharge – This revenue source consist of fees for new water meter installations based on new developments. Revenue through September 2023 YTD is $292,067, is $346,933 or 87% less than September 2022 YTD of $639,000. This decrease can largely be attributed to the meter fees paid on 96 units for the new apartment complex development “The Villas at Hesperia” in the first quarter of FY 2022 -23. This revenue source is currently at 25% collected compared to the FY 2023-24 Budget and trending as expected as a decline in residential and commercial activity was expected.

Reclaimed Water – In FY 2022-23, the District began budgeting for the use of reclaimed (recycled) water to be used at the Hesperia Golf Course and the Township area. Current Reclaimed Water customers are the Golf Course, Hesperia Township (NW corner of 5
th & Smoke Tree), and Hesperia Community Park. As of September 30, 2023, the Water District has collected $62,721, which is 18% of the budgeted amount.

Sewer Billing – Revenue through September 2023 is $1,015,301, which is $33,702 or 3% more than the revenue received in First Quarter of 2022 -23. This increase is primarily attributed to the addition of new sewer residential and commercial customers over the last year. Revenue received through September 2023 is at 18% of the budgeted amount.

Sewer Connections revenue through September 2023 YTD is $88,203, which is $65,519 or 43% less than the $153,722 received through September 2022 YTD. The decrease between the two periods is a result of fewer customers connecting to sewer during FY 2023-24 than FY 2022-23. This revenue, which is driven by the completion of development projects in areas served by Sewer , is trending as expected when compared to the FY 20 23-24 Budget as a decline in residential and commercial is expected. This revenue source will continue to be monitored by staff and will report any updates in the FY 2023-24 Mid-Year report.

2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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DEPARTMENT FY 2023-24 BUDGET EXPENDITURE STATUS SUMMARY

Total City Expenditures – With the exception of the five (5) first quarter budget amendments totaling $477,273 and the proposed staffing changes referenced on pages 28 -31, the overall assessment of the City’s expenditures through the first quarter of the fiscal year is that expenditures are expected to stay within the FY 2023-24 Amended Budget. Refer to page 26 for the detail pertaining to the requested budget amendments.

FY 2023-24 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS

The overall City Council Departmental expenditures are at 25% expended through September 2023. The City Council Division is 19% expended , which with a quarter of the year completed, is proceeding as planned . The City Attorney Division is 30% expended, which is primarily due to higher than anticipated July 2023 billing of $0.1 million.

The City Manager Department is 34% expended due to the annual City Manager Department portion of CalPERS unfunded liability payment, which for the City was paid in July 2023.

September Amended
2023-24 2023-24 2023 YTD Percent
Department Expenditure Summary Budget Amended Expenditures Expended City Council 819,204$ 819,204$ 205,494$ 25% City Manager 1,680,770 1,680,770 568,701 34% Management Services 9,929,488 9,929,488 3,906,340 39% Economic Development 578,024 578,024 160,936 28% Development Services - Community Development 2,502,575 2,502,575 696,995 28% Development Services - Code Compliance 5,239,933 5,239,933 1,302,679 25% Development Services - Public Works 6,831,103 6,831,103 1,566,875 23% Streets Capital Improvement Project (CIP) Funds 42,477,112 42,477,112 4,108,690 10% Other City Related Funds 6,431,097 6,431,097 1,153 0% Development Services - Water 24,659,947 25,214,337 4,792,119 19% Development Services - Sewer 12,936,815 12,936,815 1,052,145 8% Police 21,972,838 21,972,838 5,411,316 25% Fire District 937,658 937,658 907,316 97% TOTAL CITY EXPENDITURES 136,996,564$ 137,550,954$ 24,680,758$ 18% September Amended
2023-24 2023-24 2023 YTD Percent
City Council Budget Amended Expenditures Expended
100 100 City Council 369,204$ 369,204$ 71,982$ 19% 100 102 City Attorney 450,000 450,000 133,512 30% Total City Council 819,204$ 819,204$ 205,494$ 25% September Amended
2023-24 2023-24 2023 YTD Percent
Budget Amended Expenditures Expended
City Manager 1,680,770$ 1,680,770$ 568,701$ 34% 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2023-24 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)

The Management Services Department is currently at 39 % expended through the First Quarter, with Finance 31% expended and Information Technology 32% expended, while Human Resources is at 62%. Similar to years in the past, the higher percentage expended is due to the lump sum payment to CalPERS for the unfunded accrued liability and annual insurance premiums that are due at the beginning of the fiscal year. Non -Departmental expenditures are 12% expended and will increase as the year progresses. There are two budget amendments totaling a combined $1 27,286 (Cyber and system security, data protection renewal agreement $109,500, and upgrade of security cameras at Animal Services facility $17,786).

The Economic Development Department is 28% expended through the First Quarter. This department is made up of three (3) Divisions: Economic Development, Community Development Block Grant (CDBG), and Hesperia Housing Authority (HHA) funds.

The Economic Development Division performs the economic development functions for the City . General Fund funded, Economic Development is 34 % expended which, as with other area s, is due to the Division’s lump sum portion of the annual unfunded accrued liability assessed by CalPERS. One budget amendment for fair housing activity compliance in the amount of $21,400 has been requested.

Community Development Block Grant Administra tion is 19 % expended of the adopted budget . This fund administers the City’s CDBG program and related activities, with expenditures proceeding as planned.

The Hesperia Housing Authority (HHA) funds oversee the affordable housing within the City. Through the end of September, the HHA funds are 8% expended, with the majority of the budgeted expenditures for affordable housing monitoring and annual financial audit reporting occurring later in the fiscal year.

The Community Devel opment Division is currently 28% expended through the First Quarter, with Planning 24% expended and Building & Safe ty 31% expended. This Division’s portion of the CalPERS unfunded liability payment is the reason for increased First Quarter expenditures.

September Amended
2023-24 2023-24 2023 YTD Percent
Management Services Budget Amended Expenditures Expended 100 220 Finance 2,633,471$ 2,633,471$ 813,420$ 31% 100 225 Human Resources/ Risk Mgmt. 3,509,227 3,509,227 2,186,843 62% 100 228 Information Technology 2,246,150 2,246,150 719,847 32% 100 229 Non-Departmental 1,540,640 1,540,640 186,230 12% Total Management Services 9,929,488$ 9,929,488$ 3,906,340$ 39% September Amended
2023-24 2023-24 2023 YTD Percent
Economic Development Budget Amended Expenditures Expended 100 Economic Development 401,311$ 401,311$ 135,773$ 34% 251 CDBG Administration 100,932 100,932 18,767 19% 370 Hesperia Housing Authority 75,781 75,781 6,396 8% Total Economic Development 578,024$ 578,024$ 160,936$ 28% September Amended
2023-24 2023-24 2023 YTD Percent
D. S. - Community Development Budget Amended Expenditures Expended 100 3000 Planning 1,156,825$ 1,156,825$ 278,560$ 24% 100 3020 Building & Safety 1,345,750 1,345,750 418,435 31% Total D. S. - Community Development 2,502,575$ 2,502,575$ 696,995$ 28% 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2023-24 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)

The Code Compliance Division, which is comprised of Code Enforcemen t and Animal Control , is 25% expended. As shown by the table, Code Enforcement is 26% expended, while Animal Control is 24%.

Through the end of September, the Public Works Division is 23 % expended , which is as expec ted. While Building Maintenance, Street Maintenance, and Traffic are trending as expected , Engineering at 17% expended, is lower than expected due to pend ing contractual engineering services and pending payments for the National Pollutant Discharge Elimination System (NPDES) program . In addition, one budget amendment for the purchase of a Skip Loader is included in the amount of $19,500 (split-funded with Water Operating, for a total of $130,000).

Streets Capital Improvement expenditures will increase as progress continues on projects such as traffic signal construction, drainage improvements , FY 2021-22 Street Improvement Project , Ranchero Road Improvements and Aqueduct Crossing, and other streets related projects. As these projects move forward, the percentage of actual expenses to budget will increase accordingly. Please note that at the December 20, 2022 Council Meeting, approval was provided to proceed with eminent domain for the purchase of vacant land (APN 3064-461-03) to be used for the Cataba Road Basin and a budget amendment of $198,587 is requested (more information is provided on page 26).

The classication of Other City Related Funds is largely comprised of the principal and interest payments for the 2012 Water Rights Acquisition, 2013 Refunding Lease Revenue Bonds , and 2018 San Bernardino County Transportation Authority (SBCTA) Loan, which payments are made in the second quarter . In June 2023, the City Council approved refinancing the 2013 Civic Plaza Lease Revenue Bonds (2023 Refunding Lease Revenue Bonds), for overall debt service savings. Further, in May 2023, the City Council approved the early retirement of the SBCTA Loan, which was fully repaid in June 2023. As such, funds included in the FY 2023 -24 Budget for the SBCTA debt service will not be spent.

September Amended
2023-24 2023-24 2023 YTD Percent
D. S. - Code Compliance Budget Amended Expenditures Expended 100 3010 Code Enforcement 2,643,565$ 2,643,565$ 677,398$ 26% 100 5000 Animal Control 2,596,368 2,596,368 625,281 24% Total D. S. - Code Compliance 5,239,933$ 5,239,933$ 1,302,679$ 25% September Amended
2023-24 2023-24 2023 YTD Percent
D. S. - Public Works Budget Amended Expenditures Expended 100 3100 Engineering 963,548$ 963,548$ 159,660$ 17% 100 3110 Building Maintenance 1,621,997 1,621,997 418,462 26% 263 3150 Street Maintenance 2,164,396 2,164,396 551,098 25% 263 3170 Traffic 2,081,162 2,081,162 437,655 21% Total D. S. - Public Works 6,831,103$ 6,831,103$ 1,566,875$ 23% September Amended
2023-24 2023-24 2023 YTD Percent
Budget Amended Expenditures Expended
Streets Capital Improvement Project (CIP) Funds 42,477,112$ 42,477,112$ 4,108,690$ 10% September Amended
2023-24 2023-24 2023 YTD Percent
Budget Amended Expenditures Expended
Other City Related Funds 6,431,097$ 6,431,097$ 1,153$ 0% 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2023-24 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)

Overall, the Water Operating and Capital funds are 1 5% expended through September 30, 20 23. The following narrative details th e progression of each program. In addition, one budget amendment for the purchase of a Skip Loader is included in the amount of $110,500 (split-funded with Streets Maintenance, for a total of $130,000). • Source of Supply’s primary responsibility is to secure make-up water lease rights to remedy overproduction. During First Quarter, the District has not purchased permanent water rights. • At the end of the First Quarter, Production has expended 18% of the budget. The primary reason expenditures are lower than expected is the timing of receiving electricity invoices. During the First Quarter, only two months of summertime activity has been expended, as the average summer month bill is approximately $0. 3 million. At the August 1, 2023 City Council Meeting, an amendment of $64,000 was approved for the purchase of two (2) 2023 Ford Ranger 4 x 4 trucks. Also, an amendment for $490,390 was approved at the September 5, 2023 City Council Meeting to repair and chemically treat Well 22, which failed and became inoperable. • Both Distribution, at 2 8% expended, and Pipeline Maintenance, at 27% expended, are proceeding as expected during First Quarter.
• Engineering is currently 14% expended, which is due to pending expenditures for the National Pollutant Discharge Elimination System (NPDES) program and contractual services. • Customer Service is 17% expended and as progress is made with Advanced Metering Infrastructure (AMI) program, expenditures will increase.
• Utility Billing is 57 % expended, which is due to the $0.5 million write-offs of water service and the document recording costs related to placing delinquent accounts onto the County Property Tax Roll for collection. It should be noted that the subsequent collection of the tax liens will be reflected as revenue. • Administration is at 25% of the budget, which is proceeding as expected. • Property Management is 21 % expended for the First Quarter and anticipated to increase as facility maintenance projects are completed throughout the fiscal year.
• Reclaimed Water Operations expenditures will increase later in the second half of the fiscal year when Debt Service payments are due.
• Water and Sewer Capital have $7.0 m illion allocated in capital funds and are 1% expended, as typical with CIP projects, expenditures are expected towards the end of the fiscal year.

September Amended
2023-24 2023-24 2023 YTD Percent
D.S. Water Operating & Capital Budget Amended Expenditures Expended 4010 Source of Supply 4,477,415$ 4,477,415$ 2,439$ 0% 4020 Production 5,466,358 6,020,748 1,099,171 18% 4030 Distribution 1,759,116 1,759,116 492,591 28% 4035 Pipeline Maintenance 1,262,485 1,262,485 337,691 27% 4040 Engineering 1,167,742 1,167,742 167,307 14% 4050 Customer Service 2,256,629 2,256,629 382,404 17% 4060 Utility Billing 1,648,761 1,648,761 941,843 57% 4070 Administration 4,819,585 4,819,585 1,219,860 25% 4080 Property Management 483,740 483,740 100,615 21% 720 Reclaimed Water Operations 289,116 289,116 3,357 1% Total Water Operatiions 23,630,947 24,185,337 4,747,277 20% 701 Water Capital 1,029,000 1,029,000 44,842 4% 711 Sewer Capital 5,984,200 5,984,200 234 0% Total D.S. Water Operating & Capital 30,644,147$ 31,198,537$ 4,792,352$ 15% 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2023-24 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)

Sewer Operating Funds overall are 15% expended. More detailed information within each program is detailed below.

• Sewer Operations expenditures are 13% expended and proceeding as planned. It should be noted that onl y one month of treatment fees ( 77.27 MG) for July 202 3 has been expended for Victor Valley Wastewater Reclamation Authority (VVWRA); however August 2023 treatment fees (80.95 MG) was received and paid in October. • Sewer Engineering is currently 14% expended and proceeding as planned. • Sewer Utility Billing is 24% expended, which is expected for the first three months of the fiscal year. • Sewer Administration is proceeding as planned with 26 % expended and mainly due to the monthly general and administrative re-payment for annual indirect cost allocation.

The Police Department budget is 25% expended, which is expected for the first three months of the fiscal year for the monthly law enforcement services . First Quarter year -to-date does not include the quarterly invoice, which is for overtime, grant expenses, etc. as the County of San Bernardino has not provided to the City.

During FY 2018 -19, the City transferred all Hesperia Fire Protection District (Fire District) assets and liabilities to San Bernardino County Fire, with the exception of the former personnel obligations, for which the Fire District will continue to function with dedicated funding. The Fire District is 97% expended, which is due to paying the annual contractual retirement obligations related to the former Fi re District employees at the beginning of the fis cal year versus paying monthly. The $3 0,342 in savings will be used to retain the funds in a trust for the payment of former Fire District personnel obligation.

September Amended
2023-24 2023-24 2023 YTD Percent
D. S. - Sewer Operating Budget Amended Expenditures Expended 4200 Operations 5,537,541$ 5,537,541$ 723,239$ 13% 4240 Engineering 266,872 266,872 38,058 14% 4260 Utility Billing 274,255 274,255 66,507 24% 4270 Administration 873,947 873,947 224,107 26% Total D. S. - Sewer Operating 6,952,615$ 6,952,615$ 1,051,911$ 15% September Amended
2023-24 2023-24 2023 YTD Percent
Budget Amended Expenditures Expended
Police 21,972,838$ 21,972,838$ 5,411,316$ 25% September Amended
2023-24 2023-24 2023 YTD Percent
Budget Amended Expenditures Expended
Fire District 937,658$ 937,658$ 907,316$ 97% 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2023-24 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS

September
DEPARTMENT AND PROGRAM 2023-24 2023-24 2023 YTD Percent EXPENDITURES SUMMARY Budget Amended Expenditures Expended City Council
100 100 City Council 369,204$ 369,204$ 71,982$ 19% 100 102 City Attorney 450,000 450,000 133,512 30% Total City Council 819,204$ 819,204$ 205,494$ 25% City Manager 1,680,770$ 1,680,770$ 568,701$ 34% Management Services
100 220 Finance 2,633,471$ 2,633,471$ 813,420$ 31% 100 225 Human Resources/Risk Mgmt. 3,509,227 3,509,227 2,186,843 62% 100 228 Information Technology 2,246,150 2,246,150 719,847 32% 100 229 Non-Departmental 1,540,640 1,540,640 186,230 12% Total Management Services 9,929,488$ 9,929,488$ 3,906,340$ 39% Economic Development
100 Economic Development 401,311$ 401,311$ 135,773$ 34% 251 CDBG Administration 100,932 100,932 18,767 19% 370 Hesperia Housing Authority 75,781 75,781 6,396 8% Total Economic Development 578,024$ 578,024$ 160,936$ 28% Development Services - Community Development
100 3000 Planning 1,156,825$ 1,156,825$ 278,560$ 24% 100 3020 Building & Safety 1,345,750 1,345,750 418,435 31% Total D. S. Community Development 2,502,575$ 2,502,575$ 696,995$ 28% Development Services - Code Compliance
100 3010 Code Enforcement 2,643,565$ 2,643,565$ 677,398$ 26% 100 5000 Animal Control 2,596,368 2,596,368 625,281 24% Total D. S. Code Compliance 5,239,933$ 5,239,933$ 1,302,679$ 25% Development Services - Public Works
100 3100 Engineering 963,548$ 963,548$ 159,660$ 17% 100 3110 Building Maintenance 1,621,997 1,621,997 418,462 26% 263 3150 Street Maintenance 2,164,396 2,164,396 551,098 25% 263 3170 Traffic 2,081,162 2,081,162 437,655 21% Total D.S. - Public Works 6,831,103$ 6,831,103$ 1,566,875$ 23% 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2023-24 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)

September
DEPARTMENT AND PROGRAM 2023-24 2023-24 2023 YTD Percent EXPENDITURES SUMMARY Budget Amended Expenditures Expended Streets Capital Improvement Project (CIP)
204 Measure I -2010 Renewal 1,911,691$ 1,911,691$ 396,732$ 21% 207 Local Transportation Fund 373,868 373,868 215,637 58% 209 Gas Tax - RMRA 1,997,385 1,997,385 0 0% 251 CDBG Streets 4,365,547 4,365,547 260 0% 254 AB 2766 24,306 24,306 0 0% 300 Streets Development Impact Fee 454,468 454,468 0 0% 301 Storm Drain Development Impact Fee 237,500 237,500 0 0% 306 DIF 2018-Streets 7,812,362 7,812,362 711,058 9% 313 A-04 Drainage Development Impact Fee 925,937 925,937 317,748 34% 504 City Streets CIP 24,374,048 24,374,048 2,467,255 10% Total Streets CIP Funds 42,477,112$ 42,477,112$ 4,108,690$ 10% Other City Related Funds
256 Beverage Recycling Grant 90,928$ 90,928$ 1,153$ 1% 261 American Rescue Plan Act 1,491,200 1,491,200 0 0% 262 SB 1383 Local Assistance Grant 88,556 88,556 0 0% 306 DIF 2018-Streets 2,251,488 2,251,488 0 0% 309 City Hall Facilities 2018 Development Impact Fee 160,000 160,000 0 0% 402 Water Rights Acquisition 1,447,475 1,447,475 0 0% 403 2013 Refunding Lease Rev Bonds 901,450 901,450 0 0% Total Other City Related Funds 6,431,097$ 6,431,097$ 1,153$ 0% Development Services - Water
Water Operating
4010 Source of Supply 4,477,415$ 4,477,415$ 2,439$ 0% 4020 Production 5,466,358 6,020,748 1,099,171 18% 4030 Distribution 1,759,116 1,759,116 492,591 28% 4035 Pipeline Maintenance 1,262,485 1,262,485 337,691 27% 4040 Engineering 1,167,742 1,167,742 167,307 14% 4050 Customer Service 2,256,629 2,256,629 382,404 17% 4060 Utility Billing 1,648,761 1,648,761 941,843 57% 4070 Administration 4,819,585 4,819,585 1,219,860 25% 4080 Property Management 483,740 483,740 100,615 21% Total Water Operating 23,341,831 23,896,221 4,743,920 20% 701 Water Capital Project 1,029,000 1,029,000 44,842 4% 720 Reclaimed Water Operations 289,116 289,116 3,357 1% Total D.S. Water Operating & Capital 24,659,947$ 25,214,337$ 4,792,119$ 19% 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2023-24 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)

September
DEPARTMENT AND PROGRAM 2023-24 2023-24 2023 YTD Percent EXPENDITURES SUMMARY Budget Amended Expenditures Expended Development Services - Sewer
Sewer Operating
4200 Operations 5,537,541$ 5,537,541$ 723,239$ 13% 4240 Engineering 266,872 266,872 38,058 14% 4260 Utility Billing 274,255 274,255 66,507 24% 4270 Administration 873,947 873,947 224,107 26% Total Sewer Operating 6,952,615 6,952,615 1,051,911 15% Sewer Capital 711 5,984,200 5,984,200 234 0% Total D.S. Sewer Operating & Capital 12,936,815$ 12,936,815$ 1,052,145$ 8% Police 21,972,838$ 21,972,838$ 5,411,316$ 25% Fire District 937,658$ 937,658$ 907,316$ 97%

Total City Expenditures 136,996,564$ 137,550,954$ 24,680,758$ 18% 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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PROPOSED BUDGET AMENDMENTS – SUMMARY

The FY 2023-24 First Quarter Budget Review includes five (5) budget amendments totaling $ 477,273. The following listing categorizes the proposed budget amendments, with the following pages providing detail for each request:

PROPOSED BUDGET AMENDMENTS – NARRATIVE
Management Services
 Information Technology – Software licensing and support renewal $109,500 (100-19-228) – Unanticipated A renewal agreement for software licensing and support for cyber and system security and data protection was obtained in 2020, but was not identified as a multi -year agreement, as all costs were paid up -front per agreement terms. This software is required for the daily operation of equipment that hosts critical City business information systems, infrastructure services, and other platforms such as New World, TRAKiT, and Chameleon. D uring the FY 2023-24 Budget process these services were not included and procuring these services in this manner provide long-term savings to the City, as opposed to c ostlier single -year agreements; thus an amendment is being requested to renew the agreement.

 Information Technology – Camera upgrades (Animal Services facility) $17,786 (100-19-228) – New The cameras at the Animal Services facility need to be updated to enhance video coverage. Staff is requesting an amendment in the amount of $17,786 to upgrade the existing cameras.

Economic Development
 Economic Development – Fair Housing Activities (100-25-251) $21,400 – New The budget amendment will support training that is compliant with the Department of Justice (DOJ) on fair housing.

This is the first year of annual training.

Development Services
 Citywide Projects – Cataba Road Basin Drainage Property Purchase (504-29-700) $198,587 – Previous Staff Report
On December 20, 2022 , City Council provided approval to proceed with eminent domain on vacant land ( located North of Yucca Terrace Drive abutting the California Aqueduct APN 3064 -461-03) related to Cataba Road Basin (CO 7901). The purchase of the property is necessary to construct a water retention basin between the end of Cataba Road and before the California Aqueduct to regulate the flow of stormwater and allow the sediment to settle into the basin rather than overflowing into the overchute. Due to the lengthy acquisition of the property , it was uncertain when the proceedings would conclude ; therefore the purchase was not included in the FY 2023 -24 Budget and a budget amendment is requested.

 Water Operating and Streets Maintenance – Skip Loader Purchase (263-29 and 700-29) $130,000 – New The City is in the process of reviewing its organizational structure and if approved, a new paving crew would be established and the need for new equipment purchased. This Skip Loader will primarily be utilized to fix and repair streets impacted from service line replacements.

General Other
FY 2023-24 1st Quarter Budget Requests Fund Funds Totals

1. Software licensing and support renewal 109,500$ 0$ 109,500$

2. Camera upgrades (Animal Services facility) 17,786 0 17,786

3. Fair Housing Activities 21,400 0 21,400

4. Vacant Land Purchase (Cataba Rd CO 7901) 0 198,587 198,587

5. Skip Loader Purchase 0 130,000 130,000 Total 1st Quarter Budget Amendments Requests 148,686$ 328,587$ 477,273$ 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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PROPOSED BUDGET AMENDMENTS – NARRATIVE (Continued)

General Other
REQUESTED: Fund Funds Totals
General Fund
109,500$ 0$ 109,500$
Camera upgrades (Animal Services facility) (Management Services-IT) 17,786 0 17,786 Fair Housing Activities (Economic Development-EDD) 21,400 0 21,400 Total General Fund 148,686$ 0$ 148,686$ Development Services
Vacant Land Purchase (Cataba Rd CO 7901) 0$ 198,587$ 198,587$ Skip Loader Purchase (Water Operating and Streets Maintenance) 0 130,000 130,000 Total Development Services 0$ 328,587$ 328,587$ Total City Expenditures 148,686$ 328,587$ 477,273$ Source of Funds:

General Fund - 100 148,686$
Streets Maintenance - 263 19,500
Citywide Projects - 504 198,587
Water Operating - 700 110,500
Total Source of Funds 477,273$
Software licensing and support renewal (Management Services-IT) 2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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2023-24 First Quarter Budget Salaries and Positions

Summary of Position Changes:

The Fiscal Year (FY) 2023-24 Budget primarily included a rollover of staffing due to the transition of City Managers. As detailed during the Budget Workshop on June 20, 2023, staffing changes would be recommended during FY 2023-24. The adopted FY 2023 -24 Budget included 195.20 full -time equivalents (FTE). It should be noted that all full - time and part-time positions are expressed as FTE to reflect the hours budgeted. A full-time position (1.00 FTE) reflects 2,080 hours of paid time for one year, while a part -time position is either budgeted for 960 hours equating to 0.46 FTE (not CalPERS eligible) or 1,500 hours equating to 0.73 FTE (retirement eligible).

By including both the approved positions on September 19, 2023 (3.00 FTE) and the proposed First Q uarter positions (5.78 FTE), total positions would increase to 203.98 FTE.

Position Changes Approved During the September 19, 2023, City Council Meeting – 3.00 FTE Increases and Proposed First Quarter position changes:

Management Services – 1.00 FTE Addition
• Add one new Administrative Secretary (Non -Represented) position (Range 30), which is in the General classification.
• Convert one vacant Finance Manager position, which is in the Management classification (Range 40) into a Senior Accountant position (Range 38), which is in the Professional/Supervisory classification. • Convert one Financial Analyst position, which is in Professional/Supervisory classification (Range 35) into a Senior Accountant position (Range 38) in the Professional/Supervisory classification. • Convert one Human Resources (HR) Analyst position (Range 37) into an HR Specialist position (Range 35), which will continue to be in the Professional/Supervisory classification. • Convert one Personnel Technician position (Range 32), from the General classification into one HR Specialist position (Range 35) in the Professional/Supervisory classification.

Development Services – 2.54 FTE Addition
• Add one new Deputy City Engineer position, which will be an Unclassified/At -Will position, with a Salary Range of 48.
• Convert an Administrative Analyst position (Range 34), which is a Professional/Supervisory classification to an Associate Engineer position (Range 40), which is in the Professional/Supervisory classification. • Replace one Principal Planner – Part-Time Retired Annuitant position (0.46 FTE) with a full -time equivalent position. The full-time position will be in the Management classification and be placed at a Range 44. • Convert the Deputy Community Development Director position, which is a Senior Management classification at a Range 45 to a Building Official position, which will be Management classification position at a Range 43. • Add one Building Inspector position, which is a Represented classification, at a Range 18.

Code Compliance Division – 2.00 FTE Reduction
• Eliminate two vacant Code Enforcement Officer positions, which are at a Range 17. • Convert one Code Enforcement Supervisor position (Range 39), which is in the Professional/Supervisory classification to a Code Compliance Manager, which is in the Management classification at a Range 44. This position will be competitively recruited during the latter part of the fiscal year.

Public Works Division – 1.46 FTE Addition
• Add one part-time Director of Public Works – Part-Time Retired Annuitant position (0.46 FTE) at a Range 52.

This position (FTE) will be temporarily added to the FY 2023 -24 Amended Budget, while the City commences recruitment of the full -time Director of Public Works, which is currently vacant. Upon successful recruitment, this part-time position will be removed from the budget. • Add one new Water Operations Manager position, which is a Management classification at a Range 44.

2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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2023-24 First Quarter Budget Salaries and Positions (Continued)

Summary of Position Changes (Continued)
Position Changes Approved During the September 19, 2023, City Council Meeting (Continued):

The annualized costing of approved positions changes is $602,461. The funding breakdown is as follows: General Fund - $62,614, Streets Maintenance Fund - $88,705, and Water/Sewer Operating Funds $451,143. With the addition of staffing, the City will be able to reduce contract services, which saw a large increase in the FY 2023 -24 Budget. For example, the City’s budget for engineering services grew from FY 2022 -23 Actual of $178,883 to a FY 2023 -24 Budget of $515,000. Furthermore, the City spent $166,400 on contract building inspection services during FY 2022 -23 and through September 30, 2023, an additional $41,040 has been spent. It is important to not e that such professional services will still be needed going forward, but at a reduced amount. If approved, the fiscal impact for FY 2023- 24 will be included with the Mid-Year Budget review.

Position Recommendations for First Quarter:

As indicated, the City is in the process of reviewing its organizational structure. The goal with this review is to ensure that each area is appropriately staffed for the policies and goals set forth by the City Council. Careful consideration is given when proposing to add or change staffing. For this First Quarter review, approximately 5.78 FTE is recommended to be added for an a nnualized cost of $526,000. This annualized cost is broken down by $200,000 from the General Fund, $69,000 from the Streets M aintenance Fund, and $257,000 from the Water & Sewer Fund. The following details the changes by each functional area.

Public Works – 5.46 FTE Addition
It is recommended that the City Council approve the creation of a new paving crew. This paving crew will primarily be utilized to fix and repair streets impacted by service line replacements. The following table details the anticipated annualized cost for the new paving crew:

Should the City Council approve the addition of a new paving crew, the opera ting cost of $200,000 and equipment costs of $ 273,000 will be included in the FY 2024 -25 Budget. The City will begin the recruitment of the new positions after January 2024. The following is a listing of new positions to support the new paving crew. • Add one Senior Maintenance Worker position, which is a Represented classification at a Range 13. • Add one Equipment Operator position, which is a Represented classification at a Range 12.5. • Add two (2.0 FTE) Maintenance Worker positions, which is a Represented classification at a Range 10. • Add two Maintenance Worker Part -time positions at a Range 10 (on a part -time scale) that will be CalPERS eligible. Each position will have a FTE of 0.73 for a total of 1.46 FTE. • Convert the Public Works Supervisor position, which is a Range 40 in the Management classification to a Streets Operations Manager, which will be at a Range 44. With the addition of a new paving crew, this position will have oversight over a robust streets maintenance program.

New Paving Crew Costs
Streets
Maintenance
15%
Water
Operating
85%
Total
100%
Personnel Costs 69,000$ 392,000$ 461,000$
Operating Costs (Material and Fuel) 30,000 170,000 200,000 Total Annualized Cost 99,000$ 562,000$ 661,000$ One-time Equipment Cost (Use of Reserves)
Swap Loader 273,000$
Skip Loader 130,000
Total One-time Equipment Costs 403,000$
2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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2023-24 First Quarter Budget Salaries and Positions (Continued)

Summary of Position Changes (Continued)
Position Recommendations for First Quarter (Continued):

Management Services/Utility Billing – 1.65 FTE Reduction Prior to calendar year 2020 the Water District enhanced the payment options for customers via website payments, pay-by-phone, and kiosks. These options have shifted the workload of Utility Billing from counter transactions to increased phone and email interactions. To provide the highest level of ser vice to utility customers, it is recommended to reorganize Utility Billing. For reference, the current makeup of Utility Billing includes 12.84 FTE and is as follows:
• One Customer Service Supervisor (1.00 FTE) position at a Range 37 (Professional/Supervis ory) – Provides oversight to Utility Billing.
• One Administrative Analyst (1.00 FTE) position at a Range 34 (Professional/Supervisory) – Oversee customer transactions and provides detailed account analyses as needed. • Two Senior Account Clerk (2.00 FTE) posi tions at a Range 12 (Represented) – Prepare all bi -monthly utility bills for the District’s 28,000 water service and 6,000 sewer accounts. • Three Customer Service Representative (3.00 FTE) positions at a Range 10 (Represented) – Process all counter transactions. Note, one position is vacant.
• Three Part -time Customer Service Representative (2.19 FTE) positions at a Part -time Range 10 (Non - Represented) – Assist with processing all counter transactions. • Five Part-time Office Assistant (3.65 FTE) positions at a Part-time Range 26 (Non-Represented) – Answer incoming customer calls.

The following details the proposed staffing changes to Utility Billing, which equates to a reduction of 1.65 FTE:
• Add one Senior Customer Service Representative (1.00 FTE) position at a Range 12 – New position to serve as lead and oversee complex counter transactions, as well as phone calls. • Two Customer Service Representative (2.00 FTE) positions – Reduction of one vacant position. • One Part -time Customer Service Representative positions (0.73 FTE) – Reduction of two part -time positions or a reduction of 1.46 FTE.
• Convert three of the five Part-time Office Assistant positions (2.19 FTE) into two new position of Customer Service Assistant (2.00 FTE), which will be a Represented classification at a Range 8 and will primarily assist with customer calls. Overall, a reduction of 0.19 FTE. • Convert the remaining two Part -time Office Assistant positions (1.46 FTE) into two part-time Customer Service Assistant (1.46 FTE) positions , which will be a Non -Represented classification at a Range 8 and CalPERS eligible. These positions will assist with answering customer phone calls.

The proposed staffing changes increases the nu mber of full -time personnel, while decreasing part -time positions. By doing so, Utility Billing can ensure adequate coverage to serve the customers of the Water District. Furthermore, the proposed changes will save the District approximately $135,000 annually.

Code Compliance/Animal Control – 1.97 FTE Addition
As indicated in previous staff reports to the City Council, the City is proposing changes to Animal Control. As shown in the FY 2023-24 Budget, Animal Control has 19.22 FTE. • One Field Services Supervisor (1.00 FTE) at a Range 3 6, which is in the General classification – Provides oversight to field operations.
• Four Animal Control Officers (4.00 FTE) at a Range 13, which are in the Represented classification – Field operations.
• One Animal Services Supervisor (1.00 FTE) at a Range 37, which is in the Professional/Supervisory classification – Provides oversight to kennel operations.

2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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2023-24 First Quarter Budget Salaries and Positions (Continued)

Summary of Position Changes (Continued)

Position Recommendations for First Quarter (Continued):

Code Compliance/Animal Control (Continued)
• One Animal Services Specialist (1.00 FTE) at a Range 34, which is in the Professional/Supervisory classification – Oversees front counter and coordinates adoption events. • Three Office Assistant (3.00 FTE) positions at a Range 26, which are in the General Classification – Responds to Animal Control customers.
• Two Office Assistants-Part-Time (0.92 FTE) at a Part-time Range 26 – Provides assistance to customers. • Six Animal Care Technicians (6.00 FTE) at a Range 8 and are in the Represented classification – Provide care for animals in the kennel.
• Three Part -Time Animal Care Technicians (1.38 FTE) at a Part -time Range 8 – Assist with the care of animals.
• Two Part-Time Receptionists (0.92 FTE) at a Part-time Range 6 – Assist with calls from the citizens.

The following details the proposed staffing changes to Animal Control, which equates to an increase of 1.97 FTE:
• Convert the Animal Services Specialist to a new position of Volunteer/Outreach Coordinator, which will be a Represented classification at a Range 12. This position will coordinate the Animal Control volunteers, as well as adoption events.
• Convert three Office Assistant positions (3.00 FTE) to the following:
o One Senior Animal Services Representative (1.00 FTE), which will be a Represented classification at a Range 12. This position will serve as a lead for customer interactions. o Two Animal Services Representative (2.00 FTE) positions, which will be a R epresented classification at a Range 10 and will assist customers of Animal Control. • Convert one Part-time Office Assistant (0.46 FTE) to a Part -time Animal Services Representative position (0.73 FTE) with a Part -time Range 10 and CalPERS eligible. This part-time position will a ssist the customers of Animal Control. This conversion will have a net increase of 0.27 FTE • Eliminate one Part-time Office Assistant position (0.46 FTE). • Convert two Part-time Receptionist positions (0.92 FTE) to one full-time Animal Services Assistant position (1.00 FTE). This represented position will be placed at a Range 8 and assist with customer calls. • Reduce the number of Part-time Animal Care Technician positions from three which had an FTE allocation of 0.46 FTE for a total of 1.38 FTE to two positions at an FTE allocation of 0.73 FTE for a total of 1.46 FTE.

The net impact is an increase of 0.08 FTE, which allows for more workable hours. • Add one Senior Animal Care Technician (1.00 FTE) position, which is a Represented classification at a Range 12 – Serve as a lead for kennel operations.
• Add one Registered Veterinary Technician position (1.00 FTE), which will be a Represented classification at a Range 14. This position will provide enhanced animal care. • Change the range of the Animal Care Technicians from a Range 8 to a Range 10.

The proposed staffing changes increase the number of full -time personnel, while decreasing part -time positions. Having additional full -time positions will allow Animal Control to better serve the animals and community. The proposed changes will cost the General Fund approximately $200,000 annually.

Community Development – No change to FTE
• Convert one Senior Office Specialist position, which is a General classification at a Range 28 to a Planning Specialist at a Range 32 and in the same classification.

2023-24 FIRST QUARTER BUDGET REVIEW REPORT
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California Public Employees Retirement System (CalPERS):

During July 2023, the City received year ending June 30, 2022 actuarial valuation report (report) information. This report details the unfunded liability costs for FY 2024 -25 Budget. Based on the report, CalPERS experienced a June 30, 2022 rate of return of negative 6.1%, which is a change of negative 12.9% from the actuarial assumed rate of return of 6.8% ( -6.1% preliminary rate of return minus 6.8% assumed rate of return). The following table details the increased unfunded liability payment that will be included in the FY 2024-25 Budget.

It should be noted that the impact to the General Fund for FY 2024 -25 Budget will be appr oximately $1.0 million.

Furthermore, based on the preliminary reporting from CalPERS, the June 30, 2023 rate of return is 5.8 %, which is 1% less than the actuarial rate of return of 6.8%. This means that the unfunded liability payment due in FY 2025- 26 will continue to increase, although the FY 2025-26 impact has not been determined at this time.

FY 2023-24 FY 2024-25 Difference
City of Hesperia Plans 1,657,465$ 1,962,986$ 305,521$ Water District Plans 548,089 666,182 118,093 Fire District Plans 937,658 1,814,535 876,877 Total 3,143,212$ 4,443,703$ 1,300,491$