ITEM 4. 15
CITY MANAGER' S REPORT
APRIL 10, 2023 CITY COUNCIL REGULAR MEETING
ITEM: RATIFY SAN OAQUIN COUNCIL OF GOVERNMENTS'
ANNUAL FINANCIAL PLAN
RECOMMENDATION: Adopt Resolution Ratifying the San 7oaquin Council of Governments ( S COG) Annual Financial Plan for
FY 2023- 24
BAC KG ROU N D:
Every year pursuant to Section 7( b) of the San Joaquin Council of Governments' SJCOG) Joint Powers Agreement, in anticipation of the new fiscal budget year, SJCOG requests that each member city ratify SJCOG' s Annual Financial Plan ( AFP) for the upcoming fiscal year.
Attached and referenced herein as Attachment B, is the Approved SJCOG Fiscal Year FY) Budget for 2023- 2024. Similar requests from SJCOG have been submitted to participating cities and ratified annually since the Joint Powers Agreement went into effect December 7, 2000.
The SJCOG AFP for FY 2023- 2024, was adopted by their Board on March 23, 2023, by Board Resolution No. R- 23- 104. The AFP provides a detail of expenditures by cost category and line item comparing the proposed FY 2023- 2024 budgets with the current FY 2022- 2023 adopted budget.
REASON FOR RECOMMENDATION:
The SJCOG Joint Powers Agreement requires that the Annual Financial Plan be delivered to its jurisdictional member agencies for ratification. Therefore, it is recommended that the City Council ratify the SJCOG' s Annual Financial Plan for FY 2023- 2024.
FISCAL IMPACT:
No fiscal impact to Lathrop. However, the SJCOG letter dated March 27, 2023, highlights the following significant changes for FY 23- 24 when compared to FY 22- 23:
S1COG Annua/ Financia/ P/an Summar
Revenue Funds FY 2022- 2023 FY 2023- 2024
Federal Grants 9, 646, 688 11, 175, 862
State Grants 12, 077, 932 22, 443, 157
Loca/ Funding 6, 847, 247 7, 988, 221
Interest & Other 80, 000 80, 000
Tota/ Revenues 28, 651, 867 41, 687, 240
CITY MANAGER' S REPORT
APRIL 10, 2023 CITY COUNCIL REGULAR MEETING
RATIFY SJCOG ANNUAL FINANCIAL PLAN FOR FY 2023- 24
S1COG Annua/ Financia/ P/an Summar
Expenditure Funds FY 2022- 2023 FY 2023- 2024
Salary & Benefits 5, 312, 473 6, 281, 809
Services & Supplies 1, 212, 800 1, 338, 500
Professional Services 21, 746, 094 33, 686, 431
Capital Outlay 380, 500 380, 500
Tota/ Expenditures 28, 651, 867 41, 687, 240
Highlights:
o General Fund Operating Revenues increased by $ 13, 035, 373 Federal Funding increased by 15. 85%
State Funding Sources increased by 85. 82%
Local Revenues increased by 16. 66%
o Budgeted Expenditures are $ 41, 687, 240
Salaries and Benefits increased 18. 25%
Services and Supplies increased by 10. 36%
Training & Travel increased by 25%
o Professional Services increased by 54. 91%
o No increase or decrease to Fixed Assets
ATTACHMENTS:
A. Resolution Ratifying the San ) oaquin Council of Governments Annual Financial Plan for FY 2023- 24
B. Letter from S] COG Dated March 27, 2023, including SJCOG Resolution R- 23- 104, and Board Report Adopting the FY 2023- 24 Annual Financial Plan
CITY MANAGER' S REPORT
APRIL 10, 2023 CITY COUNCIL REGULAR MEETING
RATIFY S] COG ANNUAL FINANCIAL PLAN FOR FY 2023- 24
APPROVALS:
G
eresa Vargas Date
Government Services Director
City Clerk
F a c 3, 1Z o- z- 5
Cari James Date
Finance Director
z--
Salvador Navarrete Date
City Attorney
f •Z
Step en J. Salvatore Date
City Manager
RESOLUTION NO. 23-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP RATIFYING THE SAN .70AQUIN COUNCIL OF GOVERNMENTS' ANNUAL FINANCIAL PLAN FOR FISCAL YEAR 2023- 2024
WHEREAS, every year pursuant to Section 7( b) of the San Joaquin Council of Governments' ( SJCOG) Joint Powers Agreement, in anticipation of the new fiscal budget year, SJCOG provides a letter, resolution, and report requesting that each City ratify SJCOG' s Annual Financial Plan for the upcoming fiscal year; and WHEREAS, the Annual Financial Plan provides a detail of expenditures by cost category and line item comparing the proposed 2023- 24 budgets with the current fiscal year' s ( FY 2022- 23) adopted budget; and
WHEREAS, the SJCOG Board approved the Annual Financial Plan for FY 2023- 2024 on March 23, 2023, by Board Resolution No. R- 23- 104; and WHEREAS, the SJCOG Joint Powers Agreement requires that the Financial Plan be delivered to its member agencies for ratification; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lathrop hereby ratify the FY 2023- 2024 Annual Financial Plan for the San Joaquin Council of Governments.
The foregoing resolution was passed and adopted this lOth day of April 2023, by the following vote of the City Council, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Sonny Dhaliwal, Mayor
ATTEST: APPROVED AS TO ORM:
Teresa Vargas, City Clerk Salvador Navarrete, City Attorney Resolution No. 23-
DocuSign Envelope ID: 9D626793-E7E8-4D22- 6662-7E4DF2D96322 555!;. 61-'eber; 9vei ue • Stocklon, CaliTo• ndcr 95202 • P 2O9. 235. 0G00 • F209. 235. Os138 • i vi+ia. sjcoK. orK March 27, 2023
Stephen Salvatore
City of Lathrop
390 Towne Center Drive
R, rx,•, a; k, u„
Lathrop, CA 95330 CHAIP,
m';`` r'"' Dear Mr. Salvatore:
VICE CHAIR
I>>a E, K=' On March 23, 2023 the SJCOG Board adopted the Annual Financial Plan for FY 2023- 24.
EXE T"' E°' RE TOR Attached is the board staff report as well as a copy of the adopting resolution. Pursuant to n„ 2h,: a e„, e.s SJCOG' s Joint Powers Agreement, following adoption of the budget by the SJCOG Board, it ar Es oF
ESCALON, is to be delivered to member agencies for ratification by each governing body. Approval by a ATHROP, majority of the governing bodies representing 55% or more of the county' s population is oo, considered ratification.
MANTECA,
RIPON,
sTocKroN, Therefore, SJCOG requests you place SJCOG' s Annual Financial Plan for Fiscal Year iRAc'", 2023/ 24 on a forthcoming agenda prior to June 30, 2023, for ratification.
AND
THE COUNTY OF SAN
JOAQUIN The Annual Financial Plan implements the FY 2023/ 24 Overall Work Program ( OWP) that was also adopted by the SJCOG Board on March 23, 2023.
The attached Annual Financial Plan ( AFP) provides detail of revenues and expenditures by cost category and line item comparing the proposed FY 2023- 2024 budgets with the current year( FY 2022- 2023) adopted budget, as most recently amended, along with FY 2021- 2022 actual expenditures. The total revenues and expenditures total $ 41, 687, 239. 71. The proposed AFP represents the general fund budget for SJCOG. The revenues and expenditures in the AFP are the same as the Overall Work Program ( OWP), however, presented in a traditional line- item format compared to the work element format of the OWP.
Readers should note several differences between SJCOG and its member agencies' budgets:
SJCOG revenue sources are quite different from our member agencies.
SJCOG employs staff on an at-will basis, vis- a- vis civil service and has its own employee handbook and policies.
SJCOG has its own Financial and Accounting Policy guiding our financial matters including procurement procedures.
SJCOG employees are exempted from Social Security except for Medicare.
As noted below, SJCOG offers a defined contribution retirement plan to its employees. SJCOG has no CaIPERS or post employments benefit obligations except limited sick leave conversion as noted.
DocuSign Envelope ID: 9D626793- E7E8- 4D22- 66B2- 7E4DF2D96322 The following assumptions are incorporated in the budget:
1. Work will not begin, and expenses will not be incurred unless anticipated revenue sources are secured.
2. The AFP anticipates SJCOG to be fully staffed. The budget includes a 5. 02% pool that can be drawn upon for merit-based increases and potential promotions. The full impact of that pool is incorporated into the salary- driven benefits ( retirement, Medicare, disability).
3. SJCOG has no significant liability exposure for post-employment benefits. a. The employee retirement program is a defined contribution program managed by the International City Managers Association Retirement Program ( Mission Square Retirement).
b. SJCOG employee vacation accruals are capped at two times the individual' s annual leave.
c. Upon separation with 50 years of age or 20 years of SJCOG employment, an employee can convert accrued sick leave hours to be deposited into a Retirement Health Savings Account to pay for health-related expenses. The conversion is based upon the employee' s salary at retirement.
SJCOG staff would be pleased to appear before your policymakers to answer any questions they might have regarding this matter. We request ratification prior to June 30, 2023. Please let me know when this will be on your agenda. If you have any questions regarding this matter, don' t hesitate to contact me at( 209) 235- 0584.
Thank you for your assistance.
Sincerely,
CDocuSigned
by:
77C9E4A491524D2...
STEVE DIAL
Deputy Executive Director/Chief Financial Officer
Attachments:
R- 23- 104
FY 2023- 24 Annual Financial Plan Staff Report
FY 2023- 24 Annual Financial Plan Board Summary
DocuSign Envelope ID: 9D626793-E7E8-4D22-66B2-7E4DF2D96322
RESOLUTION
SAN JOAQUIN COUNCIL OF GOVERNMENTS
R- 23- 104
RESOLUTION APPROVING THE ADOPTION OF THE 2023- 2024
ANNUAL FINANCIAL PLAN
FOR THE SAN JOAQUIN COUNCIL OF GOVERNMENTS
WHEREAS, the San Joaquin Council of Governments is required by the Joint Powers Agreement to adopt a budget ( Annual Financial Plan) annually, and WHEREAS, the adopted budget is to be sent to the member agencies for ratification.
NOW THEREFORE BE IT RESOLVED, that the San Joaquin Council of Governments adopts the FY 2023- 2024 Annual Financial Plan and directs the Executive Director to transmit it to the member agencies for ratification.
PASSED AND ADOPTED this 23rd day of March 2023 by the following vote ofthe San Joaquin Council ofGovernments, to wit:
AYES: Mayor Bellinger, Escalon; Supervisor Ding, SJC; Mayor Lincoln, Stockton; Supervisor Rickman, SJC; Mayor Singh, Manteca; Supervisor Villapudua, SJC; Councilmember Warmsley, Stockton; Councilmember Wright, Stockton; Mayor Young, Tracy; Vice Mayor Zuber, Ripon NOES:
ABSENT: Mayor Pro Temp, Craig, Lodi; Councilmember Lazard, Lathrop ROBERT RICKMAN, Chair
DocuSign Envelope ID: 9D626793-E7E8-4D22-B6B2- 7E4DF2D96322 March 2023
SJCOG Board
STAFF REPORT
SUBJECT: FY 2023- 2024 Proposed Annual Financial
Plan (AFP)
RECOMMENDED ACTION: That the Board Adopt Resolution 23- 104 Approving the FY 2023- 2024 Annual
Financial Plan
The attached proposed Annual Financial Plan (AFP) provides detail of revenues and expenditures by cost category and line item comparing the proposed FY 2023- 2024 budgets with the current year( FY 2022- 2023) adopted budget, as most recently amended, along with FY 2021- 2022 actual expenditures. The total revenues and expenditures total $ 41, 687, 240. 00. The proposed AFP represents the general fund budget for SJCOG. The revenues and expenditures in the AFP are the same as the Overall Work Program ( OWP), however, presented in a traditional line- item format compared to the work element format of the OWP.
Below is a summary of revenues and expenditures in the AFP. For the detail for each of those categories please refer to the attached.
Readers should note several differences between SJCOG and its member agencies' budgets:
SJCOG revenue sources are quite different from our member agencies.
SJCOG employs staff on an at-will basis, vis- a- vis civil service and has its own employee handbook and policies.
SJCOG has its own Financial and Accounting Policy guiding our financial matters including procurement procedures.
SJCOG employees are exempted from Social Security except for Medicare.
As noted below, SJCOG offers a defined contribution retirement plan to its employees.
SJCOG has no Ca1PERS or post employments benefit obligations except limited sick leave conversion as noted.
Upon adoption by the board, pursuant to the SJCOG Joint Powers Agreement, the AFP will be sent to the member agencies for ratification. Ratification is achieved when a majority of the member agencies representing 55% ofthe county population approve the AFP.
The following assumptions are incorporated in the budget:
1. Work will not begin, and expenses will not be incurred unless anticipated revenue sources are secured.
2. The AFP anticipates SJCOG creating two new positions and being fully staffed. The budget includes a 7% pool that can be drawn upon for merit- based increases and potential promotions. The full impact of that pool is incorporated into the salary- driven benefits retirement, Medicare, disability).
DocuSign Envelope ID: 9D626793- E7E8-4D22- 6662- 7E4DF2D9B322
3. SJCOG has no significant liability exposure for post-employment benefits. a. The employee retirement program is a defined contribution program managed by the International City Managers Association Retirement Program ( Mission Square Retirement).
b. SJCOG employee vacation accruals are capped at two times the individual' s annual leave.
c. Upon separation with 50 years of age or 20 years of SJCOG employment, an employee can convert accrued sick leave hours to be deposited into a Retirement Health Savings Account to pay for health- related expenses. The conversion is based upon the employee' s salary at retirement.
REVENUES
Compared to the current year amended AFP, SJCOG general fund operating revenues are proposed to increase from $28, 651, 867. 21 to $41, 687, 240. 00, an increase of$ 13, 035, 372. 79.
Overall, federal funding for
FY23 24 Reuenue Bud @t 2qp general fund activities is
1 1, 529, 173. 80 or 15. 85% higher
22 aa lr than FY 2022- 23 due primarily to
iooca0000 ii,i7s,,sr y, xi Increased funds for I- 205 Managed Lanes Widening and consumption
S0Q0° D0 of one year of Congestion
o Mitigation/ Air Quality funds
F e. a s++ . M.& CMAQ) for dibs, SJCOG' s
G""`' G""" ia'°`
Transportation Demand
un ng egory
FederalGraMs sute rsms toca Interest& Other Management program.
State funding sources are higher by $ 10, 365, 224. 58 or 85. 82% due to:
Regional Early Action Planning ( REAP) 2. 0 grant in the amount of$ 10,400,000. 801, 535. 98 drawdown on REAP 1. 0
Receipt of$ 1, 750, 000 Regional Climate Collaborative grant. 1, 063,328. 18 drawdown on prior year' s Freeway Service Patrol funding. 097, 293 is available for FY 23- 24 future years of Freeway Service Patrol funding. 330, 214. 72 drawdown has occurred on three years of Senate Bill l ( SB1) Sustainable Transportation Planning Grants offset by a FY 23- 24 allocation of$ 341, 671. 295, 837. 54 drawdown on prior year' s State Transportation Improvement Program STIP) for planning offset by FY 23- 24 allocation of$290, 000.
Expenditure of$ 1, 538, 053 from the state grant for Sustainable Transportation Equity Project ( STEP).
Clean Mobility Options grant in the amount of$500, 970
31, 777 drawdown on Affordable Housing& Sustainable Community grant.
State Transit Assistance increased by $46,037.
Local revenues are higher by $ 1, 140, 974. 41 or 16. 66% due to increased sales tax receipts on Local Transportation Fund by $ 104, 835 and Measure K by $ 1, 370, 030.
DocuSign Envelope ID: 9D626793-E7E8-4D22-B6B2-7E4DF2D9B322 Decrease in Regional Transportation Fund by $ 170, 500. Decrease in Roth Road funding by 148, 390. 59 and decrease in other miscellaneous funding by $ 15, 000.
EXPENDITURES
Salaries and Benefits are
FY23/ 24 Expenditures
roro rSai 6s tao proposed to increase by
33, au, a e
969, 336. 07 or 18. 25% from
N
2° 0°°" 0°
5, 312, 472. 93 to $ 6, 281, 809. 00
i' compared to the FY 22- 23
Q. 2°" 0°°'
e. zoo, s s
amended budget. The budget
x
includes creating two new s0000 o i.zas. soo 3so soa
planning positions and filling
s.
existing position vacancies. It also a s., w.. na worwrw. i awai e«, u s pr. s. w, o n.,, includes a$ 300, 294. 00 or 7. 0% of Expenditure Class total salaries pool for merit- based
salarks& eenet a Servkasand5uppiks Professionai5ervkes Ceptteioutwy raises. The salary- driven benefits adjust accordingly.
Services and Supplies are proposed to increase by$ 100, 700.
Computer software and licensing is increasing by $ 25, 000 to support both a return to the office, working remotely and heightened cybersecurity. Liability insurance is increasing by $ 58, 700.
Building maintenance is increasing by $ 17, 000 due to increased utilities, security upgrades, and vandalism repairs.
Transportation, Travel, and Training increase by $25,000.
With several new board members and new employees, more training expenses are expected.
This budget is increased by $ 25, 000 up to $ 125, 000. This will help to support such activities as the annual One Voice trip.
Professional Services— Increases $ 11, 940, 336. 77 from FY 22- 23 $ 21, 746, 094. 28 to 33, 686, 431. 05
There is consumption of various grants and funding sources. For example, the SB- 1 Sustainable Communities Grants consumed $ 179, 039.29 While the Regional Early Action Plan ( REAP 1. 0) has consumed $ 1, 1 16, 535. 98, we are budgeting $ 9, 300, 000 for REAP 2. 0. The Sustainable Transportation Equity Project( STEP) has consumed $ 1, 738, 053. 00. We are budgeting 223, 965. 04 for the CMO Voucher is program and $ 1, 650, 000 for San Joaquin Regional Climate Collaborative. Lastly, $3, 800, 000 is programmed for the I- 205 Managed Lanes Widening project.
Position Classi cation and Salary Schedule
Per board policy, the salary ranges at both the minimum and maximum levels are adjusted by the CPI change.
FISCAL IMPACT
All revenues in the AFP are secured and available. The Annual Financial Plan is required to be adopted by the Board of Directors prior to April 1 each year and disseminated to the member DocuSign Envelope ID: 9D626793- E7E8- 4D22- 6662- 7E4DF2D96322 agencies for ratification. The Annual Financial Plan is the traditional line- item budget identifying estimated revenues and expenditures for the fiscal year. The Annual Financial Plan is complementary to the Overall Work Program.
RECOMMENDATION
That the Board adopt Resolution 23- 104 approving the FY 2023- 24 Annual Financial Plan.
Prepared by: Steve Dial, Deputy F ecutive Director/ CFO, and Grace Oroscq Manager of Finance DocuSign Envelope ID: 9D626793- E7E8- 4D22- B662- 7E4DF2D9B322 San Joaquin Council of Governments
ANNUAL FINANCIAL PLAN
Fiscal Year 2023/ 24
Proposed Final March 23, 2023
CHAIR
Supervisor Robert Rickman, San Joaquin County
VICE- CHAIR
Mayor David Bellinger, City of Escalon
BOARD OF DIRECTORS
Mayor Pro Tem Lisa Craig City of Lodi
Councilmember Diane Lazard City of Lathrop
Mayor Gary Singh City of Manteca
Mayor Kevin J. Lincoln II City of Stockton
Councilmember Kimberly Warmsley City of Stockton
Councilmember Dan Wright City of Stockton
Supervisor Miguel Villapudua County of San loaquin
Supervisor Steven Ding County of San Joaquin
Mayor Nancy Young City of Tracy
Vice Mayor Leo Zuber City of Ripon
EX OFFICIO DIRECTORS
Dennis Agar, Director Caltrans District 10
Gary Giovanetti, Director San Joaquin Regional Transit District William R. Trezza, Commissioner Port of Stockton
SUBMITTED BY:
Diane Nguyen
Executive Director
Steve Dial
Deputy Executive Director/
Chief Financial Officer
DocuSign Envelope ID: 9D626793- E7E8- 4D22- 66B2- 7E4DF2D9B322 San Joaquin Council of Governments
ANNUAL FINANCIAL PLAN
Fiscal Year 2023/ 2024
Proposed Final March 23, 2023
FY 2021- 22 FY 2022- 23 " K' 2 2 4,`; +/-
REVENUES Actual Amendmenttf3 , IP.> Change Change
Federel Grents 5, 095,875.06 9, 646,68810 9?+` i
1, 529,173.80 15. 85%
StateGrants 3, 592,632. 34 12,077, 932.42 ,+„ 10, 365, 224. 58 85. 82% Local 5, 778,14134 6, 847, 246. 59 7;, 1,: 1, 140,974.41 16.66% Interest 30, 723.00 20, 000.00 0. 00%
Other 73, 824.96 60, 000. 00 , ,,` 0. 00%
14, 551,196J0 28,651,867. 21 r, 13, 035,372J9 45. 50%
EXPENDITURES s°'
Salaries& Benefits 4, 486, 781. 28 5, 312,472. 93
3 _
969, 336.07 18.25%
Services& Supplies 1, 077, 170.21 1, 212, 800. 00 t3' 125, 700. 00 10.36% t,
Office Expense 336,434. 13 313, 000. 00 t Q; 25, 000. 00 7. 99% Communications 60, 810.26 60,000. 00 t; 0.00%
Memberships 34, 890. 58 45,000.00 4S Q 0. 00%
x ;
Maintenance- Equipment 5, 199J4 10,000.00 ` ,,; 0. 00%
Rents& Leases- Equipment 51,493J4 131,000.00 +°, 0. 00% Transportation,Trevel& 7raining( In& Out of State) 83, 703. 41 100,000.00 : 25, 000.00 25. 00% Publications& Legal Notices 3, 919.22 7, 500.00 0. 00%
Insurence 174, 019.45 146, 300. 00 58, 700. 00 40. 12%
Building Operetions& Maintenance 217, 331.92 20Q000.00 1"li'k`' 17, 000. 00 8. 50% S1COG Building Debt Service Principal and Interest 109, 367J6 20Q000.00 s QI};; 0. 00% Professional5ervices 8, 059,048.90 21, 746,094.28 3, i,., r> 11, 940,336J7 54. 91% CapitalOutlay 120,336. 29 380,500.00 3 1Q, Q; 0. 00%
Unallocated/ Reserve
SJCOG OPERATING EXPENDITURES 13,743,336.68 28, 651,867. 21 „.; N , 13,035, 372.84 45. 50%