FISCAL YEAR 2024-25
FIRST QUARTER BUDGET REVIEW
November 19, 2024
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2024-25 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 2024-25 Budget, Budget Amendments and Reserves:
General Fund…………………………………………………………………………………………. 5
Water District…………………………………………………………………………………………. 6
Streets Maintenance…………………………………………………………………………………. 7
FY 2024-25 September 30, 2024 Year-To-Date Revenue Review:
Major Funds Revenue Summary…………………………………………………………………… 8 General Fund Revenues…………………………………………………………………………….. 9
Community Development Block Grant Revenue…………………………………………………. 10 Hesperia Housing Authority Revenue……………………………………………………………… 10 Street Related Funds Revenue…………………………………………………………………….. 11 Other City Funds Revenue………………………………………………………………………….. 12 Water District Revenue……………………………………………………………………………… 14 Department FY 2024-25 Budget Expenditure Status Summary……………………………………..…….. 16 FY 2024-25 Total Expenditures By Department and Program……………………………………….……. 16 2024-25 First Quarter Budget Salaries and Positions……………………………………………………..... 24 California Public Employees Retirement System (CalPERS) Update……………………………….……. 25
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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EXECUTIVE SUMMARY
The following chart compares the FY 2024-25 Budget and September 2024 year-to-date (YTD) revenue and expenditure totals. The percentage comparisons for revenues and expenditures are based on comparing the September 202 4 YTD to the FY 202 4-25 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 2024-25 Budget
• Revenue: Based on the analysis of first quarter performance to date, revenue totals collected is $17.1 million, and is 14% collected, which is similar to the revenue collected through first quarter FY 2023-24. The collection of 14% of the budget 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 19% utilized, the FY 2024-25 Budget is proceeding as planned. Overall, the September 2024 YTD expenditures of $23,703,900 are $976,858 or 4% less than the September 2023 YTD of $24,680,758. • Reserves: The cash reserve policy for the General Fund and Water District (operating and capital) exceed the City Council’s minimum policy of two (2) months of the annual expenditures be held in cash. The following estimated reserve calculations are based on the June 30, 20 23 ending cash balances included in the June 30, 20 23 audited Annual Comprehensive Financial Report (ACFR). Using the ACFR audited data assures that the estimated reserves are based on actual information. The ending cash balance will be revised in the Mid- Year report with the June 30, 2024 ACFR figures.
Revenues and Expenditures through September 30, 2024 for the City’s main funds are summarized as follows:
2024-25 2024-25 September Revised %
Budget Revised 2024 YTD Received/Expended
Revenue 122,450,412$ 122,450,412$ 17,120,931$ 14% Use of Reserves 10,782,164 11,610,882
Total Resources 133,232,576 134,061,294
Expenditures 122,991,324 123,820,042 23,703,900 19%,, Difference 10,241,252$ 10,241,252$
10% Cash Reserves (Council/Board Policy) 5,207,804$ 10% 3,526,395$ 10% Cash Reserves Above 10% Reserve 17,851,425 34% 29,675,381 82% Total Estimated Cash Reserves 23,059,229 $ 44% 33,201,776$ 91% Months of Cash 5.3 11.3
Water DistrictGeneral Fund
General Fund
Amended
Budget September
% of Amend.
Received
Amended
Budget September
%
Expended
City Council 1,056,754$ 56,856$ 5%
City Manager 1,796,947 586,025 33% Management Services 10,916,848 4,708,849 43% Economic Development 476,492 145,704 31% D.S.-Community Development 3,162,562 717,792 23% D.S.-Code Compliance 5,567,894 1,497,616 27% D.S.-Public Works (G.F.) 3,144,502 594,387 19% Police 22,682,805 5,600,563 25%
Total General Fund 51,019,157$ 4,796,752$ 9% 48,804,804$ 13,907,794$ 28% Community Development Block Grant 1,878,240 1,710 0% 150,896 5,810 4% Hesperia Housing Authority 222,269 4,075 2% 78,976 6,807 9% D.S.-Public Works 21,345 2,137 10% 4,171,648 885,764 21% Streets CIP Funds 29,905,232 4,806,616 16% 30,553,873 246,771 1% Other City Related Funds 2,896,555 410,821 14% 2,981,361 25,527 1% D.S.-Water Operating and Capital 29,491,462 5,689,069 19% 25,472,144 5,326,030 21% D.S.-Sewer Operating and Capital 6,947,713 1,334,974 19% 9,791,805 1,543,578 16% Fire District 68,439 74,776 9% 1,814,535 1,755,819 97% Total 122,450,412$ 17,120,931$ 14% 123,820,042$ 23,703,900$ 19% 2024-25 Revenue 2024-25 Expenditures
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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STATUS OF CITY GENERAL FUND 2024-25 BUDGET, BUDGET AMENDMENTS, AND RESERVES
2024-25 2024-25
Budget Revised Dollars Percent
RESOURCES
General Fund Operating Revenue 51,019,157$ 51,019,157$ 0$ 0% Transfers In
1. Fund 255 - AB 3229 COPS Grant 200,000 200,000 Total Transfers In 200,000 200,000
Budgeted Reserves 900,000 900,000
First Quarter Budget Amendment Reserves 0 0 Total Budgeted Reserves 900,000$ 900,000$
Total General Fund Resources 52,119,157$ 52,119,157$ 0$ 0%
EXPENDITURES
Total General Fund Operating Expenses 48,804,804$ 48,804,804$ Transfers Out
1. Fund 210 - HFPD CalPERS 1,814,535 1,814,535
2. Fund 241 - CFD 2021-1 Residential Maint. & Service 5,150 5,150
3. Fund 242 - CFD 2022-1 Non-Residential Maint. & Service 5,150 5,150
4. Fund 243 - CFD 2023-1 Silverwood Maintenance 5,700 5,700 1,442,703 1,442,703
Total Transfers Out 3,273,238 3,273,238
Total General Fund Expenditures & Transfers Out 52,078,042$ 52,078,042$ 0$ 0% DIFFERENCE TOTAL RESOURCES/TOTAL EXPENDITURES 41,115$ 41,115$ 0$ 0% Fund Balance
July 1 Beginning Balance 36,850,298$ 36,850,298$
Total Budgeted Reserves (900,000) (900,000) Difference Total Resources/Total Expenditures 41,115 41,115 Estimated June 30 Ending Fund Balance 35,991,413$ 35,991,413$ 0$ 0% Months of Cash to Pay Expenditures and Transfers Out
Beginning Cash July 01, 23,918,114$ 23,918,114$
Estimated Resources Less Budgeted Reserves 51,219,157 51,219,157 Estimated Expenditures (52,078,042) (52,078,042)
23,059,229$ 23,059,229$
Months of Cash to Pay Expenditures and Transfers Out 5.3 5.3 Estimated Cash Reserves Percentage 44% 44%
Estimated Ending Cash June 30,
Change
5. Fund 402 - 2012 Water Rights Acquisition Debt Service 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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STATUS OF WATER DISTRICT 2024-25 BUDGET, BUDGET AMENDMENTS, AND RESERVES
2024-25 2024-25
Resources Budget R evised Dollars Percent
Revenue
Water Operating and Capital 29,151,462$ 29,151,462$ Sewer Operating and Capital 6,947,713 6,947,713 Reclaimed Water Operations 340,000 340,000
Total Revenue 36,439,175 36,439,175 0 0% Budgeted Reserves 2,855,092 2,855,092
Total Water District Resources 39,294,267$ 39,294,267$ 0$ 0% Expenditures by Program
Water Operating and Capital and Transfer Out 25,169,718$ 25,169,718$ 0$ 0% Sewer Operating and Capital 9,791,805 9,791,805 Reclaimed Water Operations 302,426 302,426
Total Water District Expenditures & Transfers Out 35,263,949$ 35,263,949$ 0$ 0% 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 $ 36,410,837 $ 36,410,837 Difference Total Resources/Total Expenditures 2,883,430$ 2,883,430$ July 1 Beginning Balance 123,286,172$ 123,286,172$
Budgeted Reserves (2,855,092) (2,855,092)
Difference Resources/Expenditures 2,883,430 2,883,430 Reserve Balances 1,146,888 1,146,888
Estimated June 30 Ending Fund Balance 124,461,398$ 124,461,398$ Months of Cash to Pay Expenditures
Beginning Cash July 01, 35,426,550$ 35,426,550$
Estimated Resources Less Budgeted Reserves 36,439,175 36,439,175 Estimated Expenditures (35,263,949) (35,263,949)
VVWRA Cash Retention - Zone V (3,400,000) (3,400,000) 33,201,776$ 3 3,201,776$
Months of Cash to Pay Expenditures and Transfers Out 11.3 11.3 Total Estimated Cash Reserves Percentage 94% 9 4%
Estimated Ending Cash June 30,
Change
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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STATUS OF STREET MAINTENANCE FUND 2024-25 BUDGET, FUND BALANCE, AND RESERVES
2024-25 2024-25
RESOURCES Budget R evised Dollars Percent
Street Maintenance Operating Revenue 21,345$ 21,345$ 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 669,000 669,000
Fund 207 - Local Transportation Fund 226,883 226,883 Total Transfers In 4,045,883 4,045,883
Total Revenues 4,067,228 4,067,228
Budgeted Reserves 104,420 104,420
Total Street Maintenance Resources 4,171,648$ 4, 171,648 $ EXPENDITURES 4,171,648$ 4, 171,648 $ 0$ 0% DIFFERENCE RESOURCES/EXPENDITURES 0$ 0$ 0$ n/a Fund Balance
July 1 Beginning Balance 204,357$ 204,357$
Total Budgeted Reserves (104,420) ( 104,420)
Difference Resources/Expenditures 0 0 Estimated June 30 Ending Balance 99,937$ 99,937$
Change
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2024-25 SEPTEMBER 30, 2024 YEAR-TO-DATE REVENUE REVIEW
Overall – First quarter analysis reveals that $17.1 million or 14% percent of the total budgeted revenue has been collected.
It should be noted that changes 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) 2024-25.
General Fund revenues received through the first quarter of FY 2024 -25 totaled $4,796,752 or 9% of the total annual projected revenues of $51,019,157. The revenue received is similar from the first quarter of FY 2023-24 of 10%. This is due to the timing of receiving revenue from sources such as Vehicle License Fees, Property Taxes and Development related revenue.
The Water District revenues received through the first quarter totaled $7.0 million or 19% of the total annual projected revenues of $36.4 million. Even though the Water District is trending as expected, this revenue source is being monitored as delinquent accounts are being applied to the tax roll to recapture the missing revenue.
Staff will continue to monitor the FY 2024-25 revenue and make any necessary recommendations for revisions during the Mid-Year Budget Review in February 2025. The following pages will detail the current revenue collections for each fund.
September Change From
2024-25 2024-25 Percent 2024-25 B udget To
Budget Actual Received Revised Revised
General Fund 51,019,157$ 4,796,752$ 9% 51,019,157$ 0$ Community Development Block Grant 1,878,240 1,710 0% 1,878,240 0 Hesperia Housing Authority 222,269 4,075 2% 222,269 0 Street Related Funds 29,926,577 4,808,754 16% 29,926,577 0 Other City Related Funds 2,964,994 485,598 16% 2,964,994 0 Water Operating 27,807,565 5,260,432 19% 27,807,565 0 Water Capital 1,139,897 367,665 32% 1,139,897 0 Water Reserves 544,000 60,972 11% 544,000 0 Total Water Operating, Capital, & Reserves 29,491,462 5,689,069 19% 29, 491,462 0 Sewer Operating 6,341,713 1,235,992 20% 6,341,713 0 Sewer Capital 596,000 98,982 17% 596,000 0 Sewer Reserves 10,000 0 0% 10,000 0 Total Sewer Operating, Capital, & Reserves 6,947,713 1,334,974 19% 6, 947,713 0 Water District 36,439,175 7,024,043 19% 36,439,175 0 Total All Funds 122,450,412$ 17,120,931$ 14% 122,450,412$ 0$
MAJOR FUNDS REVENUE SUMMARY
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2024-25 SEPTEMBER 30, 2024 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 2024-25, the City received $948,280 for (1) month (July 2024) of activity.
There is typically a two-month delay from the month close to when the State reports to the City. The second installment of $956,899 for the month of August 2024 was received in October 2024 and is trending as expected.
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 2024, as the first installment of the VLF is expected to be received during January 2025.
Franchise Fees – The City receives franchise 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 2024 YTD total is $86,359, which is 10% more than September 2023 YTD of $78,818. Please note that the majority of franchise fees are received in the second half of the fiscal year.
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 2024, the City collected $145,554, which is a decrease of $40,554 or 22% less than the September 2023 YTD of $186,108. This decrease is primarily due to the timing of monthly receipts from the hotel operators and a delinquency of TOT from two hotels, which the City is currently pursuing collections.
Secured Property Tax – The first remittance from the County will be received in November 2024; therefore, there is no revenue to report through September 2024.
Business License – The City taxes businesses for conducting business within the City. The FY 2024- 25 Budget of $843,000 projects a slight increase in the total number of business licenses. The FY 2024 -25 First Quarter revenue collections is performing as anticipated with total revenue collection of 23% of the FY 2024-25 Budget.
September Change From
2024-25 2024-25 Percent 2024-25 Budget To
Budget Actual Received Revised Revised
Sales and Use Tax 14,349,979$ 948,280$ 7% 14,349,979$ 0$ Vehicle License Fees 12,718,621 0 0% 12,718,621 0 Franchise Fees 4,577,756 86,359 2% 4,577,756 0 Total Top Three Revenues 31,646,356 1,034,639 3% 31,646,356 0 General & Administrative Recovery 4,596,356 1,149,089 25% 4,596,356 0 Transient Occupancy Tax 1,700,000 145,554 9% 1,700,000 0 Secured Property Tax 1,195,253 0 0% 1,195,253 0 Business License 843,000 197,513 23% 843,000 0 Commercial Cannabis Tax 20,340 6,896 34% 20,340 0 Leased Water Rights 1,931,594 0 0% 1,931,594 0 Development Related Revenues
Planning 477,513 87,215 18% 477,513 0 Building & Safety 2,009,482 418,505 21% 2,009,482 0 Engineering 1,538,390 312,165 20% 1,538,390 0 Sub-Total Development Related Revenues 4,025,385 817,885 20% 4,025,385 0 Sub-Total Top 12 Revenue Sources 45,958,284 3,351,576 7% 45,958,284 0 All Other General Fund Revenues 5,060,873 1,445,176 29% 5,060,873 0 Total General Fund Revenues 51,019,157$ 4,796,752$ 9% 51,019,157$ 0$
GENERAL FUND REVENUES
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2024-25 SEPTEMBER 30, 2024 YEAR-TO-DATE REVENUE REVIEW (Continued)
General Fund Revenue Comments (Continued):
Commercial Cannabis Tax – All commercial cannabis businesses operating within the City pay a variable tax, currently 4%, on gross receipts from business operations. The September 2024 YTD receipts of $6,896 is being received as budgeted. The City currently has three (3) businesses operating licenses within the City.
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, 2024, total revenue collected is $817,885 or 20% of the total budgeted revenue of $4,025,385. This revenue source is performing as anticipated.
All Other General Fund Revenue – Other General Fund Revenue accounts are $1,445,176 or 29% collected through September 30, 2024. Compared to the First Quarter September 2023 YTD of $1,266,221 collected, this revenue is showing a $178 ,955 or 14% increase, which is trending as expected. This source of revenue is primarily made up of Administrative Fines and Interest Income.
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 2024-25 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 2024.
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 $1,710 has been received, which is for loan repayments related to Housing Rehabilitation Loan Program.
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 2024 YTD of $4,075 is primarily from interest income from investments.
September Change From
2024-25 2024-25 Percent 2024-25 Budget To
Budget Actual Received Revised Revised
CDBG Administration Reimbursement 1,779,362$ 0$ 0% 1,779,362$ 0$ All Other CDBG Revenues 98,878 1,710 2% 98,878 0 Total CDBG Revenues 1,878,240$ 1,710$ 0% 1,878,240$ 0$
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) REVENUE
September Change From
2024-25 2024- 25 Percent 2024-25 Budget To
Budget Actual Received Revised Revised
Interest Income 98,000$ 4,075$ 4% 98,000$ 0$ Loan Repayments 92,769 0 0% 92,769 0 Miscellaneous Income 1,500 0 0% 1,500 0 Sub-Total HHA Revenue 192,269 4,075 2% 192,269 0 VVEDA Housing Authority Revenue 30,000 0 0% 30,000 0 Total HHA Revenue 222,269$ 4,075$ 2% 222,269$ 0$
HESPERIA HOUSING AUTHORITY (HHA) REVENUE
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2024-25 SEPTEMBER 30, 2024 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 tax 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 2024.
Gas Tax – As of September 30, 2024 YTD, Gas Tax revenue primarily consists of one installment totaling $147,467 .
There is typically a two -month delay from the month close to when the revenue is received. The second installment of $176,650 for the month of August 2024 was received in October 2024 and is trending as expected.
Gas Tax Swap – As of September 30, 2024 YTD, Gas Tax Swap revenue largely consists of one installment totaling $111,943, which is $4,465 lower than the first installment in FY 2023-24 of $116,408. This decrease was anticipated and is reflected in the FY 2024-25 Budget.
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 (VVTA). This revenue source is no longer expected to be received due to the allocation being fully utilized by VVTA for transit purposes from a decision made by VVTA in April 2022. The FY 2024-25 revenue estimated to be received of $72,951 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, 2024 YTD, Gas Tax RMRA revenue largely consists of one installment totaling $226,038.
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 comparisons to prior years irrelevant. The revenue received through September 2024 of $2,137 primarily consists of miscellaneous revenue.
September Change From
2024-25 2024-25 Percent 2024-25 Budget To
Budget Actual Received Revised Revised
204 Measure I - Renewal 4,102,238$ 0$ 0% 4,102,238$ 0$ 205 Gas Tax Fund 1,895,858 147,467 8% 1,895,858 0 206 Gas Tax Swap Fund 916,673 111,943 12% 916,673 0 207 Local Transportation Fund 72,951 0 0% 72,951 0 209 Gas Tax - RMRA 2,656,958 226,038 9% 2,656,958 0 254 AQMD Fund 590 0 0% 590 0 263 Public Works Street Maintenance Fund 21,345 2,137 10% 21,345 0 300 Development Impact Fee-Streets 102,141 0 0% 102,141 0 301 Development Impact Fee-Storm Drain 76,590 0 0% 76,590 0 306 Development Impact Fee 2018 - Streets 8,831,835 1,568,635 18% 8,831,835 0 307 Development Impact Fee 2018 - Drainage 614,165 84,314 14% 614,165 0 313 Development Impact Fee 2018 - A-04 Drainage 112,333 137,501 122% 112,333 0 Sub-Total DIF Streets & Storm Drain 9,737,064 1,790,449 18% 9,737,064 0 504 City Streets CIP 10,522,900 2,530,719 24% 10,522,900 0 Total Street Related Funds 29,926,577$ 4,808,754$ 16% 29,926,577$ 0$
STREET RELATED FUNDS REVENUE
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2024-25 SEPTEMBER 30, 2024 YEAR-TO-DATE REVENUE REVIEW (Continued)
Street Related Funds Revenue Comments (Continued):
Development Impact Fees for Streets and Storm Drain/Drainage – Through September 2024 YTD, the combined revenue received is $1,790,449, which is $2,395,672 or 57% less than September 2023 YTD revenue of $4,186,121. The primary reason for the decrease between the two periods is due to the timing of fees paid related to Single Family Residential and Multi -Family Residential properties. This revenue source varies each fiscal year depending on the completion of individual projects and is trending as expected.
City Streets CIP – This fund tracks grant/reimbursement funded projects such as the Ranchero Road Improvements (7 th
Avenue to Mariposa Road), the Traffic Signal on Main Street at Sultana Street/Timberlane Avenue 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: This fund was established to manage and mitigate the unfunded pension liability and the post -employment benefits liabilities. The revenue in these funds consist of investment interest income and gain/losses from the market.
Public Art – This fund is funded through donations to be utilized towards public art displays throughout the City. The FY 2024-25 Budget of $9,056 consists of interest income received during the year.
AB3229 Supplemental Law Fund – The passage of Senate Bill (SB) 89 allowed for the continued funding of the Supplemental Law Enforcement Funding (SLESF). The City expects to receive $294,203 of SLESF funding, which is typically received later in the fiscal year. The first installment received in October is $159,465 and is trending as expected.
September Change From
2024-25 2024- 25 Percent 2024-25 Budget To
Budget Actual Received Revised Revised
105 Pension Obligation Trust 50,000$ 230,636$ 461% 50,000$ 0$ 106 OPEB Trust 0 42,326 n/a 0 0 110 Silverwood 495,400 24,371 5% 495,400 0 210 HFPD (PERS) Interest Income 68,439 74,776 109% 68,439 0 230 Public Art 9,056 0 0% 9,056 0 255 AB3229 Supplemental Law Fund 294,203 0 0% 294,203 0 256 Environmental Programs Grant 61,021 0 0% 61,021 0 260 Disaster Preparedness Grant 1,090 0 0% 1,090 0 261 American Rescue Plan Act Grant 576,457 0 0% 576,457 0 262 SB 1383 Local Assistance Grant 36,675 0 0% 36,675 0 # /0 302 Development Impact Fee-Fire 36,136 0 0% 36,136 0 303 Development Impact Fee-Police 160 0 0% 160 0 308 Development Impact Fee 2018 - Fire 622,131 45,215 7% 622,131 0 309 Development Impact Fee 2018 - City Hall 534,681 39,319 7% 534,681 0 310 Development Impact Fee 2018 - Animal Control 60,263 12,922 21% 60,263 0 311 Development Impact Fee 2018 - Records Storage 27,313 1,873 7% 27,313 0 312 Development Impact Fee 2018 - Police Facilities 10,037 738 7% 10,037 0 Sub-Total 302, 303, 308, 309, 310, 311, and 312 1,290,721 100,067 8% 1,290,721 0 402 2012 Water Rights Acquisition 33,932 13, 418 40% 33,932 0 404 2023 Refunding Lease Revenue Bonds 48,000 4 0% 48,000 0 Sub-Total 402 and 404 81,932 13,422 16% 81,932 0 Total Other City Funds 2,964,994$ 485,598$ 16% 2,964,994$ 0$
OTHER CITY FUNDS REVENUE
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2024-25 SEPTEMBER 30, 2024 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 received 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 obligated on eligible costs incurred during the period that began on March 3, 2021 and ending on December 31, 2024. Once obligated, the funds must be spent by December 31, 2026. The revenue anticipated to be received in FY 2024-25 of $576,457 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 $36,675 for FY 2024-25.
Development Impact Fees -Fire, Police, Public Services, City Hall, Animal Control, and Records Storage – The combined total of $100,067 for September 2024 YTD is $1,880,904 less than September 2023 YTD of $1,980,971. The primary reason for the decrease between the two periods is due to the fees paid related to Single Family Residential and Multi-Family Residential properties. This revenue source varies each fiscal year depending on the completion of individual projects.
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2024-25 SEPTEMBER 30, 2024 YEAR-TO-DATE REVENUE REVIEW (Continued)
Water District Revenue Comments:
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 collect 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 2024- 25, the Hesperia Water District collected $4,813,076 of sales revenue or 19% of the budgeted amount, which is comparable to the percentage collected through the first quarter in the prior year (FY 2023-24). Overall, water sales revenue through September 2024 of $4,813,076 is more than the FY 2023-24 revenue for the same period ($4,539,912) by $273,164, or 6%. This is largely due to an increase in Water Sales Residential as consumption increased from the same period in FY 2023- 24. Through September 2024, Water Sales Residential of $2,023,888 is $227,390 more than the $1,796,498 collected through September 2023.
Property Taxes – Property tax revenue is normally received from November 2024 through July 2025.
Other Water Operating Revenue – Through September 2024, $447,025 has been received, which is $168,443 or 60% more than September 2023 YTD of $278,582. This increase is mainly due to the increase of Water Inspection fees received this quarter related to the Silverwood Development.
September Change From
2024-25 2024-25 Percent 2024-25 Budget To
Budget Actual Received Revised Revised
Water Operating Revenue
Water Sales 24,756,381$ 4,813,046$ 19% 24,756,381$ 0$ Interest Income 576,000 0 0% 576,000 0 Property Taxes 612,152 0 0% 612,152 0 Sub-Total 25,944,533 4,813,046 19% 25,944,533 0 All Other Water Operating Revenues 1,863,032 447,385 24% 1,863,032 0 Total Water Operating Revenues 27,807,565 5,260,432 19% 27,807,565 0 Capital Facilities Charges 1,139,897 367,665 32% 1,139,897 0 Grant Reimbursement 0 0 n/a 0 0 Total Water Capital Revenue 1,139,897 367,665 32% 1,139,897 0 Reclaimed Water 340,000 63,046 19% 340,000 0 All Other Water Related Revenues 204,000 (2,074) -1% 204,000 0 Total Water Operating, Capital, & Related Revenues 29,491,462$ 5,689,069$ 19% 29,491,462$ 0$ Sewer Operating Revenue
Sewer Billing 5,737,158$ 1,027,224$ 18% 5,737,158$ 0$ All Other Sewer Operating Revenues 604,555 208,767 35% 604,555 0 Total Sewer Operating Revenue 6,341,713 1,235,992 19% 6,341,713 0 Sewer Connections 520,000 98,982 19% 520,000 0 All Other Sewer Capital Revenues 76,000 0 0% 76,000 0 Total Sewer Capital Revenue 596,000 98,982 17% 596,000 0 All Other Sewer Related Revenues 10,000 0 0% 10,000 0 Total Sewer Operating, Capital, & Related Revenues 6,947,713$ 1,334,974$ 19% 6,947,713$ 0$ Total Hesperia Water District Revenue 36,439,175$ 7,024,043$ 19% 36,439,175$ 0$
WATER DISTRICT REVENUE
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FISCAL YEAR 2024-25 SEPTEMBER 30, 2024 YEAR-TO-DATE REVENUE REVIEW (Continued)
Water District Revenue Comments (Continued):
Capital Facilities Surcharge – This revenue source consists of fees for new water meter installations based on new developments. Revenue through September 2024 YTD is $367,665, which is $75,598 or 26% more than September 2023 YTD of $292,067. This increase can largely be attributed to the meter fees paid for the development Pathways to College Charter School and an industrial development. This revenue source is currently at 32% collected compared to the FY 2023-24 Budget, which is due to the timing of projects in process. Based on the timing of projects, the revenue is trending as expected.
Reclaimed Water – 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, 2024, the Water District has collected $63,046, which is 19% of the budgeted amount.
Sewer Billing – Revenue through September 2024 is $1,027,224, which is $11,923 or 1% more than the revenue received in First Quarter of FY 2023-24. This increase is primarily attributed to the addition of new sewer residential and commercial customers over the last year. Revenue received through September 2024 is at 18% of the budgeted amount.
Sewer Connections - Revenue through September 2024 YTD is $98,982, which is $10,779 or 12% more than the $88,203 received through September 2023 YTD. The increase between the two periods is a result of more customers connecting to sewer during FY 2024-25 than FY 2023-24. 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 2023 -24 Budget due to the timing of projects in process. This revenue source will continue to be monitored by staff and will report any updates in the FY 2024-25 Mid-Year report.
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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DEPARTMENT FY 2024-25 BUDGET EXPENDITURE STATUS SUMMARY
Total City Expenditures – With the exception of the proposed staffing changes referenced on page 25, 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 2024-25 Amended Budget.
FY 2024-25 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS
The overall City Council Departmental expenditures are at 5% expended through September 2024. Contributing to the lower than anticipated City Council Division’s expended percentage, budgeted items that are typically expended later during the fiscal year, such as $50,000 for the Community Assistance Program and community outreach programs and events. The City Attorney Division is 1% expended due to one invoice was received and paid through the end of the first quarter.
The City Manager Department is 33% expended due to the annual City Manager Department portion of CalPERS unfunded liability payment, which for the City was paid in July 2024.
September Amended
2024-25 2024-25 2024 Y TD Percent
Department Expenditure Summary Budget Amended Expenditures Expended City Council 1,056,754$ 1,056,754$ 56,856$ 5% City Manager 1,796,947 1,796,947 586,025 33% Management Services 10,916,848 10,916,848 4,708,849 43% Economic Development 706,364 706,364 158,321 22% Development Services - Community Development 3,162,562 3,162,562 717,792 23% Development Services - Code Compliance 5,567,894 5,567,894 1,497,616 27% Development Services - Public Works 7,316,150 7,316,150 1,480,151 20% Streets Capital Improvement Project (CIP) Funds 29,725,155 30,553,873 246,771 1% Other City Related Funds 2,981,361 2,981,361 25,527 1% Development Services - Water 25,472,144 25,472,144 5,326,030 21% Development Services - Sewer 9,791,805 9, 791,805 1,543,578 16% Police 22,682,805 22,682,805 5,600,563 25% Fire District 1,814,535 1,814,535 1,755,819 97% TOTAL CITY EXPENDITURES 122,991,324$ 123, 820,042$ 23,703,900$ 19% September Amended
2024-25 2024-25 2024 Y TD Percent
City Council Budget Amended Expenditures Expended
100 100 City Council 406,754$ 406,754$ 49,621$ 12% 100 102 City Attorney 650,000 650,000 7,235 1% Total City Council 1,056,754$ 1,056,754$ 56,856$ 5% September Amended
2024-25 2024-25 2024 YTD Percent
Budget Amended Expenditures Expended
City Manager 1,796,947$ 1,796,947$ 586,025$ 33% 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2024-25 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)
The Management Services Department is currently at 43 % expended through the First Quarter, with Finance 29% expended and Information Technology 34% expended, while Human Resources is at 64%. 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 17% expended and will increase as the year progresses.
The Economic Development Department is 22% 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. Funded by the General Fund, Economic Development is 31% expended which, as with other areas, is due to the Division’s lump sum portion of the annual unfunded accrued liability assessed by CalPERS.
Community Development Block Grant Administration is 4% expended of the adopted budget. This fund administers the City’s CDBG program, and related activities and expenditures will increase as progress is made on program projects.
The Hesperia Housing Authority (HHA) funds oversee the affordable housing within the City. Through the end of September, the HHA funds are 9% 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 Development Division is currently 23% expended through the First Quarter, with Planning 18% expended and Building & Safety 28% expended.
September Amended
2024-25 2024-25 2024 Y TD Percent
Management Services Budget Amended Expenditures Expended 100 220 Finance 2,736,923$ 2,736,923$ 795,707$ 29% 100 225 Human Resources/ Risk Mgmt. 4,589,339 4,589,339 2,914,723 64% 100 228 Information Technology 2,301,545 2,301,545 780,481 34% 100 229 Non-Departmental 1,289,041 1,289,041 217,938 17% Total Management Services 10,916,848$ 10,916,848$ 4,708,849$ 43% September Amended
2024-25 2024-25 2024 Y TD Percent
Economic Development Budget Amended Expenditures Expended 100 Economic Development 476,492$ 476,492$ 145,704$ 31% 251 CDBG Administration 150,896 150,896 5,810 4% 370 Hesperia Housing Authority 78,976 78,976 6,807 9% Total Economic Development 706,364$ 706,364$ 158,321$ 22% September Amended
2024-25 2024-25 2024 Y TD Percent
D. S. - Community Development Budget Amended Expenditures Expended 100 3000 Planning 1,667,612$ 1,667,612$ 300,741$ 18% 100 3020 Building & Safety 1,494,950 1,494,950 417,051 28% Total D. S. - Community Development 3,162,562$ 3,162,562$ 717,792$ 23% 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2024-25 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)
The Code Compliance Division, which is comprised of Code Enforcement and Animal Control , is 27% expended. As shown by the table, Code Enforcement is 31% expended, while Animal Control is 24%. As with other areas, Code Enforcement is 31% expended due to the annual payment of the CalPERS unfunded liability.
Through the end of September, the Public Works Division is 20% expended , which is as expec ted. While Engineering, Building Maintenance, and Street Maintenance are trending as expected , General Fund Capital Improvement Program (CIP), Street Repair, and Traffic are contributing factors for the Public Works Division’s low expenditures. Traffic at 17% expended, is lower than e xpected due to pending items such as the purchase of maintenance materials and traffic delineators, as well as contractual items for traffic engineer, street sweeping, street striping, and signal maintenance , which occur as the year progresses . General Fund CIP will increase as the Golf Course Trails and Hesperia Animal Shelter Play Yard projects proceed.
Streets Capital Improvement expenditures will increase as progress continues on projects such as the Ranchero Aqueduct Crossing, Maple Avenue Street Improvement, FY 2021 -22 CDBG Street Improvement Project, 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 August 6, 2024 City Council meeting, the budget was amended to appropriate $828,718 in Measure I Renewal Funds to the Traffic Signal – Main Street & Sultana Street/Timberlane Avenue Project C.O. 7159.
The classification of Other City Related Funds is largely comprised of the principal and interest payments for the 2012 Water Rights Acquisition and 2023 Refunding Lease Revenue Bonds, which payments are made in the second quarter.
September Amended
2024-25 2024-25 2024 Y TD Percent
D. S. - Code Compliance Budget Amended Expenditures Expended 100 3010 Code Enforcement 2,352,917$ 2,352,917$ 727,744$ 31% 100 5000 Animal Control 3,214,977 3, 214,977 769,871 24% Total D. S. - Code Compliance 5,567,894$ 5,567,894$ 1,497,616$ 27% September Amended
2024-25 2024-25 2024 YTD Percent
D. S. - Public Works Budget Amended Expenditures Expended 100 3100 Engineering 1,024,101$ 1,024,101$ 231,467$ 23% 100 3110 Building Maintenance 1,670,401 1,670,401 362,920 22% 100 Capital Improvement Program 450,000 450,000 0 0% 263 3150 Street Maintenance 2,157,301 2,146,301 531,158 25% 263 3160 Street Repair 160,428 161,428 28,834 18% 263 3170 Traffic 1,853,919 1,863,919 325,772 17% Total D. S. - Public Works 7,316,150$ 7,316,150$ 1,480,151$ 20% September Amended
2024-25 2024-25 2024 YTD Percent
Budget Amended Expenditures Expended
Streets Capital Improvement Project (CIP) Funds 29,725,155$ 30,553,873$ 246,771$ 1% September Amended
2024-25 2024-25 2024 YTD Percent
Budget Amended Expenditures Expended
Other City Related Funds 2,981,361$ 2,981,361$ 25,527$ 1% 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2024-25 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)
Overall, the Water Operating and Capital funds are 21% expended through September 30, 2024. The following narrative details the progression of each program.
• 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 20% of the budget. The primary reason expenditures are lower than expected is due to the timing of 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. A s progress continues with the upgrade of the supervisory control and data acquisition (SCADA) program’s hardware, software, and radio system the percentage of actual expenses to budget will increase. • Distribution has utilized 29% of its budget, which is primarily due to an increase in repairs for service line leaks. • Pipeline Maintenance is 24% expended and will increase as material (pipe) is purchased for service line replacement, as identified in the Fiscal Year (FY) 2024-25 Budget.
• Engineering is currently 17% expended , which is due to pending expenditures for the National Pollutant Discharge Elimination System (NPDES) program and contractual services. • Customer Service is 16% expended and as progress is made with Advanced Metering Infrastructure (AMI) program, expenditures will increase.
• Utility Billing is 78% expended, which is due to the $0.7 million write-offs of water service and the document recording costs related to placing delinquent accounts onto the County Property Tax Roll for collection. When the $0.7 million in write-offs is not included to determine the operating costs, Utility Billing is 26% expended. It should be noted that the subsequent collection of the tax liens will be reflected as revenue. • Administration is at 26% of the budget, which is primarily due to the Water District’s monthly general and administrative payment to the City for the annual indirect cost allocation. • Property Management is 22% e xpended for the First Quarter and is anticipated to increase as facility maintenance projects are completed throughout the fiscal year.
• Street Repair at 18% expended, is lower than expected due to pending purchases for street and pavement repair material and the purchase of a new chassis and hook-lift system. • Reclaimed Water Operations expenditures will increase later in the second half of the fiscal year when the Debt Service payment is due.
September Amended
2024-25 2024-25 2024 Y TD Percent
D.S. Water Operating & Capital Budget Amended Expenditures Expended 4010 Source of Supply 3,802,457$ 3,802,457$ 0$ 0% 4020 Production 5,621,196 5, 617,196 1,105,768 20% 4030 Distribution 1,826,985 1, 826,985 523,844 29% 4035 Pipeline Maintenance 1,117,190 1,119,190 273,495 24% 4040 Engineering 967,632 967,632 165,694 17% 4050 Customer Service 2,278,930 2,278,930 356,882 16% 4060 Utility Billing 1,400,116 1, 400,116 1,096,472 78% 4070 Administration 5,660,456 5, 660,456 1,443,774 26% 4080 Property Management 524,250 521,750 114,670 22% 4160 Street Repair 1,245,506 1, 250,006 230,635 18% 720 Reclaimed Water Operations 302,426 302,426 14,797 5% Total Water Operatiions 24,747,144 24,747,144 5,326,030 22% 701 Water Capital 10,000 10,000 0 0% 703 Water Capital Rehab and Replace 715,000 715,000 0 0% Total D.S. Water Operating & Capital 25,472,144$ 25,472,144$ 5,326,030$ 21% 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2024-25 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)
Water Operating and Capital (Continued)
• Expenditures for Water Capital are 0% expended and will increase as projects such as the Plant 23 Recoat Exterior Water Tank, I-15 Corridor Water, and Plant 5 & 18 Roof Replacement and Repair projects progress.
Sewer Operating and Capital Funds overall are 16% expended. More detailed information within each program is detailed below.
• Sewer Operations expenditures are 22% expended and proceeding as planned. Through the end of the First Quarter, only two months of treatment fees has been expended for Victor Valley Wastewater Reclamation Authority (VVWRA).
It should be noted that both monthly invoices contained billing errors, resulting in the District receiving the correcting billing credit on the third invoice paid in October 2024. • Sewer Engineering is currently 14% expended and will increase as contract engineering invoices are received related to sewer projects.
• Sewer Utility Billing is 25% 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 payment for the annual indirect cost allocation. • Sewer Capital has $2.9 million allocated to two projects, including the Maple Avenue sewer line replacement, and I- 15 Corridor sewer. Capital expenditures will increase as progress is made on the projects.
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 invoice has not been 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 Fire District employees at the beginning of the fiscal year versus paying monthly. The $58,716 in savings will be used to retain the funds in a trust for the payment of former Fire District personnel obligation.
September Amended
2024-25 2024-25 2024 Y TD Percent
D. S. - Sewer Operating & Capital Budget Amended Expenditures Expended 4200 Operations 5,221,733$ 5,221,733$ 1,146,333$ 22% 4240 Engineering 285,424 285,424 40,979 14% 4260 Utility Billing 284,677 284,677 72,291 25% 4270 Administration 1,095,251 1,095,251 283,975 26% Total Sewer Operations 6,887,085 6,887,085 1,543,578 22% 711 Sewer Capital 2,904,720 2,904,720 0 0% Total D. S. - Sewer Operating & Capital 9,791,805$ 9,791,805$ 1,543,578$ 16% September Amended
2024-25 2024-25 2024 YTD Percent
Budget Amended Expenditures Expended
Police 22,682,805$ 22,682,805$ 5,600,563$ 25% September Amended
2024-25 2024-25 2024 YTD Percent
Budget Amended Expenditures Expended
Fire District 1,814,535$ 1,814,535$ 1,755,819$ 97% 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2024-25 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS
September
DEPARTMENT AND PROGRAM 2024-25 2024-25 2024 YTD Percent EXPENDITURES SUMMARY Budget Amended Expenditures Expended City Council
100 100 City Council 406,754$ 406,754$ 49,621$ 12% 100 102 City Attorney 650,000 650,000 7,235 1% Total City Council 1,056,754$ 1,056,754$ 56,856$ 5% City Manager 1,796,947$ 1,796,947$ 586,025$ 33% Management Services
100 220 Finance 2,736,923$ 2,736,923$ 795,707$ 29% 100 225 Human Resources/Risk Mgmt. 4,589,339 4,589,339 2,914,723 64% 100 228 Information Technology 2,301,545 2,301,545 780,481 34% 100 229 Non-Departmental 1,289,041 1,289,041 217,938 17% Total Management Services 10,916,848$ 10,916,848$ 4,708,849$ 43% Economic Development
100 Economic Development 476,492$ 476,492$ 145,704$ 31% 251 CDBG Administration 150,896 150,896 5,810 4% 370 Hesperia Housing Authority 78,976 78,976 6,807 9% Total Economic Development 706,364$ 706,364$ 158,321$ 22% Development Services - Community Development
100 3000 Planning 1,667,612$ 1,667,612$ 300,741$ 18% 100 3020 Building & Safety 1,494,950 1,494,950 417,051 28% Total D. S. Community Development 3,162,562$ 3,162,562$ 717,792$ 23% Development Services - Code Compliance
100 3010 Code Enforcement 2,352,917$ 2,352,917$ 727,744$ 31% 100 5000 Animal Control 3,214,977 3,214,977 769,871 24% Total D. S. Code Compliance 5,567,894$ 5,567,894$ 1,497,616$ 27% Development Services - Public Works
100 3100 Engineering 1,024,101$ 1,024,101$ 231,467$ 23% 100 3110 Building Maintenance 1,670,401 1,670,401 362,920 22% 100 Capital Improvement Program 450,000 450,000 0 0% 263 3150 Street Maintenance 2,157,301 2,146,301 531,158 25% 263 3160 Street Repair 160,428 161,428 28,834 18% 263 3170 Traffic 1,853,919 1,863,919 325,772 17% Total D.S. - Public Works 7,316,150$ 7,316,150$ 1,480,151$ 20% 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2024-25 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)
September
DEPARTMENT AND PROGRAM 2024- 25 2024-25 2024 YTD Percent EXPENDITURES SUMMARY Budget Amended Expenditures Expended Streets Capital Improvement Project (CIP)
204 Measure I -2010 Renewal 3, 377,163$ 4,205,881$ 0$ 0% 207 Local Transportation Fund 64,804 64,804 0 0% 209 Gas Tax - RMRA 3,998,505 3,998,505 0 0% 251 CDBG Streets 4,091,736 4,091,736 241,723 6% 300 Streets Development Impact Fee 153,432 153,432 0 0% 301 Storm Drain Development Impact Fee 1,202,049 1,202,049 0 0% 306 DIF 2018-Streets 5,745,777 5,745,777 3,010 0% 307 DIF-2018 Drainage Facilities 100,000 100,000 0 0% 313 A-04 Drainage Development Impact Fee 50,000 50,000 0 0% 504 City Streets CIP 10,941,689 10,941,689 2,039 0% Total Streets CIP Funds 29,725,155$ 30,553,873$ 246,771$ 1% Other City Related Funds
110 Silverwood 495,400$ 495,400$ 6,618$ 1% 241 CFD 2021-1 Residential Maint. & Service 5,150 5,150 0 0% 242 CFD 2022-1 Non-Residential Maint. & Service 5,150 5,150 0 0% 243 CFD 2023-1 Silverwood Maint. 5,700 5,700 0 0% 256 Beverage Recycling Grant 91,018 91,018 18,909 21% 262 SB 1383 Local Assistance Grant 34,090 34,090 0 0% 309 City Hall Facilities 2018 Development Impact Fee 167,000 167,000 0 0% 402 Water Rights Acquisition 1,442,703 1,442,703 0 0% 404 2023 Refunding Lease Revenue Bonds 735,150 735,150 0 0% Total Other City Related Funds 2,981,361$ 2,981,361$ 25,527$ 1% Development Services - Water
Water Operating
4010 Source of Supply 3,802,457$ 3,802,457$ 0$ 0% 4020 Production 5,621,196 5,617,196 1,105,768 20% 4030 Distribution 1,826,985 1,826,985 523,844 29% 4035 Pipeline Maintenance 1,117,190 1,119,190 273,495 24% 4040 Engineering 967,632 967,632 165,694 17% 4050 Customer Service 2,278,930 2,278,930 356,882 16% 4060 Utility Billing 1,400,116 1,400,116 1,096,472 78% 4070 Administration 5,660,456 5,660,456 1,443,774 26% 4080 Property Management 524,250 521,750 114,670 22% 4160 Street Repair 1,245,506 1,250,006 230,635 18% Total Water Operating 24,444,718 24,444,718 5,311,233 22% 701 Water Capital Project 10,000 10,000 0 0% 703 Water Capital Rehab and Replace 715,000 715,000 0 0% 720 Reclaimed Water Operations 302,426 302,426 14,797 5% Total D.S. Water Operating & Capital 25,472,144$ 25,472,144$ 5,326,030$ 21% 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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FY 2024-25 TOTAL EXPENDITURES BY DEPARTMENT AND PROGRAMS (Continued)
September
DEPARTMENT AND PROGRAM 2024-25 2024-25 2024 YTD Percent EXPENDITURES SUMMARY Budget Amended Expenditures Expended Development Services - Sewer
Sewer Operating
4200 Operations 5,221,733$ 5,221,733$ 1,146,333$ 22% 4240 Engineering 285,424 285,424 40,979 14% 4260 Utility Billing 284,677 284,677 72,291 25% 4270 Administration 1,095,251 1,095,251 283,975 26% Total Sewer Operating 6,887,085 6,887,085 1,543,578 22% 711 Sewer Capital 2,904,720 2,904,720 0 0% Total D.S. Sewer Operating & Capital 9,791,805$ 9,791,805$ 1,543,578$ 16% Police 22,682,805$ 22,682,805$ 5,600,563$ 25% Fire District 1,814,535$ 1,814,535$ 1,755,819$ 97%
Total City Expenditures 122,991,324$ 123,820,042$ 23,703,900$ 19% 2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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2024-25 First Quarter Budget Salaries and Positions
Summary of Position Changes:
The adopted FY 2024-25 Budget included 203.49 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).
Position Recommendations for the First Quarter:
The City continually reviews the organizational structure to improve workflow and customer service. When reviewing staffing, the goal of 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 1.92 FTE is recommended to be added for an annualized cost of $258,250. This annualized cost is broken down by $56,750 from the General Fund, $12,000 from the Economic Development related funds, and $189,500 from the Water Operating Fund. The following details the changes in each functional area.
Management Services Department – 1.92 FTE for a total cost of $370,250 During the FY 2023 -24, the City reorganized Public Works and Development Services. This reorganization was to accommodate the City’s development growth. Adding staff allowed the City to continue providing a high level of service to the community. With the addition of operation staff, a review of Management Services was conducted for the FY 202 4-25 First Quarter. Management Services provides all the support functions to the City’s operating departments. These functions include accounting, payroll, information technology, and human resources.
While the cost is anticipated to be $370,250 for FY 2024-25, it should be noted that the position of Senior Accountant – Part-Time Retired Annuitant will be temporary and will not be included in the FY 2025-26 Budget. CalPERS allows the City to rehire former employees temporarily. Should the City Council approve this position, with a cost of $52,000, this position will be used to train the new employees in the Finance Division. Further, the Management Services reorganization cost will be offset with savings in other departments.
The following is a discussion of all proposed Management Services positions:
• Add one Administrative Intern position (0.46 FTE). This position will be paid up to $4 above the State of California’s minimum wage.
• Add one Senior Accountant —Part-time R etired Annuitant (0.46 FTE) at a R ange of 38. As discussed, this position will not be included in the FY 2025-26 Budget. • Convert one vacant Accountant at a Range of 33 to a Financial Analyst at a Range of 35. • Convert one vacant Accountant at Range 33, which the General Fund fully funds, to a Senior Accountant at Range 38, who will be funded by the Water District. This position will oversee the accounting for the water and sewer operations.
• Retitle the Human Resources Supervisor to a Risk Management Supervisor. There will be no change in compensation.
• Add one Senior Information Systems Specialist at Range 41. This position will oversee information technology projects, such as high-level software implementations.
• Convert one Information Systems Manager at Range 44 to a Deputy Information Systems Director at Range 45, which will be an at -will classification. This position will provide enhanced expertise and oversight to the City’s growing computing network and infrastructure.
Economic Development Department – 0.00 FTE for a total reduction of $117,500 It is recommended that the Economic Development Manager at Range 44 be converted to an Economic Development Supervisor at Range 39.
Development Services Department – 0.00 FTE for a total cost of $7,000 Convert one Assistant Project Manager at a Range 38 to a Community Development Manager at a Range 40. This position will provide oversight to the Community Development program and serve as the liaison to the Silverwood Development project.
2024-25 FIRST QUARTER BUDGET REVIEW REPORT
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2024-25 First Quarter Budget Salaries and Positions
Summary of Position Changes (Continued):
Water Operating – 0.00 FTE for a total cost of $1,500
Convert two vacant Meter Reader positions at a Range of 10+2% to two Maintenance Worker/Water positions at a Range of 10.5. As the Water District continues to convert the residential water meters to digital reading, there is less of a need for positions to manually read meters; however, digital meters do require maintenance, which can be best handled by the maintenance worker position.
California Public Employees Retirement System (CalPERS):
During July 2024, the City received information on the year ending June 30, 2023 , from the actuarial valuation report (report). This report details the unfunded liability costs for the FY 2024 -25 Budget. Based on the report, CalPERS experienced a June 30, 2023 rate of return of 5.8%, a change of negative 1.0% from the actuarial assumed rate of return of 6.8% (5.8% preliminary rate of return minus 6.8% assumed rate of return). The following table details the increased unfunded liability payment in the FY 2025-26 Budget.
The FY 2024-25 General Fund Budget will increase approximately $179,000, including the City and Fire District Plans.
Furthermore, based on the preliminary reporting from CalPERS, on June 30, 2024, the rate of return was 9.3%, which is
2.50% more than the actuarial rate of return of 6.8%. This means the unfunded liability payment due in FY 2026-27 should decrease due to positive earnings on June 30, 2024.
FY 2024-25 FY 2025-26 Difference %
City of Hesperia Plans $1,962,986 $1,996,000 $33,014 2% Water District Plans 663,446 831,000 167,554 25% Fire District Plans (General Fund) 1,814,535 1,960,000 145,465 8% Total $4,440,967 $4,787,000 $346,033 8%