CITY MANAGER' S REPORT ITEM 5. 7
OCTOBER 9, 2023 CITY COUNCIL REGULAR MEETING
ITEM: FISCAL YEAR ( FY) 2022/ 23 YEAR- END BUDGET
REPORT AND RELATED AMENDMENTS AND
AMENDMENTS TO THE FISCAL YEAR 2023/ 24
BUDGET
RECOMMENDATION: Adopt Resolution Approving the FY 2022/ 23 YearEnd Report and Related Budget Amendments and Amending the FY 2023/ 24 Budget
SUMMARY:
In June 2021, City Council adopted their Biennial Budget for fiscal years 2021/ 22 and 2022/ 23 by Resolution No. 21- 4885. Staff has continued to present Council budget updates through the formal Mid- Year and Year- End reviews and budget amendments.
At the end of Year 2 of the biennial budget, the General Fund unallocated fund balance at June 30, 2023 was estimated at $ 8. 7 million. Higher than projected property and sales tax collections combined with lower than budgeted expenditures due to operational efficiencies and salary savings from vacant positions have resulted in a General Fund surplus at the end of fiscal year ( FY) 2022/ 23.
StafF recommends applying approximately $ 11. 0 million in FY 22/ 23 surplus funds to the following unfunded liabilities:
Transfer $ 7. 0 million to the Street Repair Reserves to maintain deteriorating City roads.
Transfer $ 3. 0 million to the Landscape Reserves to fund City wide landscape projects.
Transfer $ 1. 0 million to the Retirement Stabilization Reserves to set aside funds for future retirement unfunded liability.
With the proposed uses of the fund balance unassigned reserves, the estimated General Fund Balance at June 30, 2023 is $ 8. 9 million or 28% of actual operating expenditures. The estimated fund balance remains above the 25% recommended target.
In addition, staff is proposing amendments to the City Clerk' s budget. The proposed adjustments in the amount of $ 11, 500 is due to increases in closed captioning costs.
In mid FY 2022/ 23, all City commission meetings were moved to council chambers to provide closed captioning services in order to comply with ADA requirements.
BACKGROU N D:
In June 2021, City Council adopted their Biennial Budget for fiscal years 2021/ 22 and 2022/ 23 by Resolution No. 21- 4885. Staff has presented to Council updates on the budget during the Mid- Year and Year- End Budget reviews. At the end of Year 2 the projected ( unaudited) General Fund Balance at ) une 30, 2023 was estimated at $ 8. 7 million. At year- end, revenues and expenditures are again reviewed and amendments are proposed as needed. After conducting a thorough review, the City CITY MANAGER' S REPORT PAGE 2
OCTOBER 9, 2023 CITY COUNCIL REGULAR MEETING
FISCAL YEAR ( FY) 2022/ 23 YEAR- END BUDGET REPORT AND RELATED AMENDMENTS AND AMENDMENTS TO FISCAL YEAR 2023/ 2024 BUDGET received higher than expected property and sales tax collections combined with lower than projected expenditures due to operational efficiencies and salary savings from vacant positions resulted in a General Fund surplus at fiscal year- end.
Staff recommends applying approximately $ 11 million in FY 22/ 23 surplus funds to designated unfunded liability accounts as identified in the General Fund Reserves/ Fund Balance Section below.
GF Reserves/ Fund Balance:
Staff recommends applying approximately $ 11. 0 million in FY 22/ 23 surplus funds to the following unfunded liabilities:
Transfer $ 7 million to the Street Repair Reserves to maintain deteriorating City roads.
Transfer $ 1 million to the Landscape Reserves to fund city wide landscape projects.
Transfer $ 1 million to the Retirement Stabilization Reserves to set aside funds for future retirement unfunded liability.
With the proposed uses of the Fund Balance Unassigned reserves above, the estimated General Fund Balance at June 30, 2023 is $ 8. 9 million or 28% of actual expenditures. The estimated fund balance remains above the 25% recommended target.
In addition, staff is proposing amendments to the City Clerk' s budget. The proposed adjustments in the amount of $ 11, 500 is due to increases in closed captioning costs.
In mid FY 2022/ 23, all City commission meetings were moved to council chambers to provide closed captioning services in order to comply with ADA requirements.
Year- End Transfer Reauests
As part of the Biennial Budget process approved by Council in June 2021, a mid- cycle review is conducted on the second year' s programmed allocations ( Year 2 or FY 2023). The Year- End Budget Report includes budget transfers reflecting transfers between funds to accommodate changes to Capital Improvement Projects ( CIP' s) revenues, expenses and staffing in the fiscal plan.
REASON FOR RECOMMENDATION:
The recommended FY 2022/ 23 budget amendments result from changes in estimates and activity through June 30, 2023, and are necessary in order for the City to meet auditing and budgetary requirements.
In addition, setting aside funds for Street Repair, Landscaping, and Retirement Stabilization Reserves will allow the City to be proactive in its approach to these areas without affecting its structure and core services.
CITY MANAGER' S REPORT PAGE 3
OCTOBER 9, 2023 CITY COUNCIL REGULAR MEETING
FISCAL YEAR ( FY) 2022/ 23 YEAR- END BUDGET REPORT AND RELATED AMENDMENTS AND AMENDMENTS TO FISCAL YEAR 2023/ 2024 BUDGET FISCAL IMPACTS:
The FY 2022/ 23 and FY 2023/ 24 budget amendments are as follows:
FISCAL YEAI 2t122f23
RE ENUE - Bllt')GET MENL MENT '
Increase , I?ecrease
Sour G Acc' u Am ` r t
Measure C - Cit Services 1060- 19- 10- 313- 03- 00 4, 024, 137 Federal Grants 2150- 80- 00- 333- 05- 00 376, 484
CFD 2013- 1 - RI Services 2640- 50- 68- 355- 01- 25 497, 610 CIP GG2201 - Develo ers 2710- 80- 00- 372- 01- 00 68, 425 CIP PS1404 - Develo ers 2710- 80- 00- 372- 01- 00 1, 432, 567 Revenue Total: 5 646 255
EXPENDTTURE;- BUQGET AMENI MENTS
IncreaseJ' Decrease
S urce ' L Account Amc un#
General Fund - Cit Clerk 1010- 12- 10- 410- 11- 00 11, 500 General Fund - Public Works 1010- 50- 01- 420- 01- 00 214, 508 General Fund - Maintenance Srvcs 1010- 30- OS- 420- 01- 00 29, 500 General Fund - Maintenance Srvcs 1010- 30- 05- 420- 25- 00 51, 000 General Fund - Maintenance Srvcs 1010- 30- 20- 420- 01- 00 90, 000 General Fund - Maintenance Srvcs 1010- 30- 20- 420- 25- 00 44, 008 Street Fund - CIP P52112 2080- 30- 10- 420- 30- 00 154, 090 Measure C - LMFD 2010- 19- 20- 425- 16- 00 1, 768, 010
Culture & Leisure CFF Fund - Reimb 2260- 80- 00- 440- 50- 00 7, 819, 057 W/ C Lathro CFF Fund - Reimb. 2320- 80- 00- 440- 50- 00 457, 122 RTIF CFF Fund - Reimbursement 2360- 80- 00- 440- 50- 00 883, 826 CIP GG2201 - Develo er 3010- 80- 00- 420- 12- 00 68, 425 CIP PS2112 - Streets 3310- 80- 00- 420- 12- 00 154, 090 CIP PS2112 - Federal Grants 3310- 80- 00- 420- 01- 00 376, 484 CIP P51404 - Develo ers 3310- 80- 00- 420- 12- 00 1, 432, 567 Ex enditure Total: 12 064 023
TRANSFER IN - BUL?GET AMEN[? MENTS'
Increase e rease
Source GL Accoun# ' Arnount
General Fund - CFD 2023- 1 1010- 99- 00- 393- 00- 00 95, 000 Measure C - LMFD 2010- 99- 00- 393- 00- 00 1, 768, 010
CIP PS2112 - Streets 3310- 99- 00- 393- 00- 00 154, 090 CIP PS1404 - Develo ers 3310- 99- 00- 393- 00- 00 1, 432, 567 Transfer In Total: 3, 354, 667
CITY MANAGER' S REPORT PAGE 4
OCTOBER 9, 2023 CITY COUNCIL REGULAR MEETING
FISCAL YEAR ( FY) 2022/ 23 YEAR- END BUDGET REPORT AND RELATED AMENDMENTS AND AMENDMENTS TO FISCAL YEAR 2023/ 2024 BUDGET
TRAN FER OUT - BUDGET AMENDMENTS
In rease/ Decrease
Soucce GL Acco n Am n
Measure C - Cit Services 1060- 99- 00- 990- 90- 10 1, 768, 010 CIP PS2112 - Streets 2080- 99- 00- 990- 90- 10 154, 090 CFD 2023- 1 - RI Services 2640- 99- 00- 990- 90- 10 95, 000 CIP PS1404 - Develo ers 2710- 99- 00- 990- 90- 10 1, 432, 567 Transfer Out Total: 3, 354, 667
FUND BALANCE RESERYES= H UDGET AMENDMENTS
IncreaseJ Decrease
S r ' G A n Am n
General Fund - Street Re air 1010- 251- 03- 00 7, 000, 000 General Fund - Retirement 1010- 251- 06- 00 1, 000, 000 General Fund - Landsca e 1010- 251- 07- 00 3, 000, 000
Fund Balance Reserves Total: 11, 000, 000
FISCAL YEI kR 2023 24
REVENUE - BUl.1GET AMENDMENTS (YEAR 1) ;
Inc rease Dec ease
Saur G Acc Amou
State Grant - GF 2160- 80- 00- 331- 05- 00 32, 792
State Grant - CIP PK2002 2160- 80- 00- 331- 05- 00 14, 668 Federal Grant - CIP PK2002 2150- 80- 00- 331- 05- 00 163, 273 State Grant - CIP PK2002 2160- 80- 00- 331- 05- 00 163, 273 State Grant - CIP PW2236 2160- 80- 00- 331- 05- 00 1, 500, 000 DWR Grant - CIP PW2236 2900- 80- 00- 331- 05- 00 1, 500, 000 Ex enditure Total: 47, 460
EXPENDITURE - BUDGET' AMENDMENTS ' tYEAR 1)
In reaseJ Decrease
S+ urce GL A caun Amc u t
Communit Develo ment 1010- 20- 10- 420- 01- 00 32, 792
CIP GG2022 - GF 3010- 80- 00- 420- 12- 00 57, 139
CIP GG2019 - GF 3010- 80- 00- 420- 12- 00 57, 139
CIP PK2002 - State Grant 3010- 80- 00- 420- 12- 00 14, 668 CIP PS2218 - Measure K - Pedes 3310- 80- 00- 420- 12- 00 39, 709 CIP PS2218 - Measure K - Pedes 3310- 80- 00- 420- 12- 00 39, 709 CIP RW1916 - Develo er 6091- 80- 00- 420- 01- 00 83, 342 CIP RW2416 - Develo er 6091- 80- 00- 420- 86- 00 83, 342 Ex enditure Total: 47, 460
TRANSFER IN - BU GET AMENDMENTS
Incr ease/ Decrease
Sour GCA un# Amoun#
General Fund - State Grant 1010- 99- 00- 393- 00- 00 32, 792 CIP PK2002 - State Grant 3010- 99- 00- 393- 00- 00 14, 668 CIP PS2218 - Measure K - Pedes 3310- 99- 00- 393- 00- 00 28, 683 Transfer In Total: 76, 143
CITY MANAGER' S REPORT PAGE 5
OCTOBER 9, 2023 CITY COUNCIL REGULAR MEETING
FISCAL YEAR ( FY) 2022/ 23 YEAR- END BUDGET REPORT AND RELATED AMENDMENTS AND AMENDMENTS TO FISCAL YEAR 2023/ 2024 BUDGET TRANSFER QUT - BUDGET AMENaMENTS:
Increase/ Decrease
S ur GLAc nt Am nt
CIP 2218 - Measure K - Pedestrian 2110- 99- 00- 990- 90- 10 28, 683 State Grant - GF 2160- 99- 00- 990- 90- 10 32, 792
CIP PK2002 - State Grant 2160- 99- 00- 990- 90- 10 14, 668 CIP PK2002 - Federal Grant 2150- 99- 00- 990- 90- 10 163, 273 CIP PK2002 - State Grant 2160- 99- 00- 990- 90- 10 163, 273 CIP PW2236 - State Grant 2160- 99- 00- 990- 90- 10 1, 500, 000 CIP PW2236 - DWR Grant 2900- 99- 00- 990- 90- 10 1, 500, 000 Transfer Out Total: 76, 143
All proposed FY 2022/ 23 expenditure adjustments have an offsetting revenue stream; therefore, there is no impact to the projected ending fund balance.
ATTACHMENTS:
A. Resolution Approving the Fiscal Year 2022/ 23 Year- End Budget Report and Related Amendments and Amending the FY 2023/ 24 Budget.
CITY MANAGER' S REPORT PAGE 6
OCTOBER 9, 2023 CITY COUNCIL REGULAR MEETING
FISCAL YEAR ( FY) 2022/ 23 YEAR- END BUDGET REPORT AND RELATED AMENDMENTS AND ADMENDMENTS TO FISCAL YEAR 2023/ 24 BUDGET APPROVALS:
l 22 23
Sandra Frias Date
Senior Management Analyst
a a
Cari ) ame Date
Director o ' nance
I g/ Z eJZo2
Thomas Hedegard Date
Deputy City Manager
LZ - ZO' L
Salvador Navarrete Date
City Attorney
2 3•Z3
phen Salvatore Date
City Manager
RESOLUTION NO. 23-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP APPROVING THE FISCAL YEAR 2022/ 23 YEAR- END BUDGET REPORT AND RELATED AMENDMENTS AND AMENDING TO THE FISCAL YEAR 2023/ 24 BUDGET
WHEREAS, the City Council of the City of Lathrop adopted the 2021/ 22 and 2022/ 23 Expenditure Budget on June 3, 2021 by Resolution No. 21- 4885; and WHEREAS, the City Council of the City of Lathrop has amended the 2022/ 23 Fiscal Year Expenditure Budget in subsequent actions during the fiscal year; and WHEREAS, City Staff have proposed amendments to revenues and expenditures to more accurately project estimates for activity in the General Fund and certain other funds; and
WHEREAS, at the end of Year 2 of the biennial budget, the General Fund unallocated fund balance at June 30, 2023 was estimated to be $ 8. 7 million; and WHEREAS, higher than projected property and sales tax collections combined with lower than budgeted expenditures due to operational efficiencies and salary savings from vacant positions have resulted in a General Fund surplus at the end of fiscal year 2022/ 23.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Lathrop does hereby approve the year- end budget/ position control amendments to the Fiscal Year 2022/ 23 and 2023/ 24 Operating Budget as shown below and provided in the City Manager' s Report;
FISC1#L YEAR 2 22 23
FkEY NUE - BU!' G'ET AMENL? MENTS '
Ir crrease Decrea e
urc GL' Acc `u t ' Amcrunt
Measure C - Cit Services 1060- 19- 10- 313- 03- 00 4, 024, 137 Federal Grants 2150- 80- 00- 333- 05- 00 376, 484
CFD 2013- 1 - RI Services 2640- 50- 68- 355- 01- 25 497, 610 CIP GG2201 - Develo ers 2710- 80- 00- 372- 01- 00 68, 425 CIP PS1404 - Develo ers 2710- 80- 00- 372- 01- 00 1 432 567 Revenue Total: 5 646 255
Resolution No. 23- Page 1 of 4
EXPEN[ 3iTURE - BUt')GET AMENDME' NTS
Increase/ Decrease
Sour e GC A oun Am un
General Fund - Cit Clerk 1010- 12- 10- 410- 11- 00 11, 500 General Fund - Public Works 1010- 50- 01- 420- 01- 00 214, 508 General Fund - Maintenance Srvcs 1010- 30- 05- 420- 01- 00 29, 500 General Fund - Maintenance Srvcs 1010- 30- 05- 420- 25- 00 51, 000 General Fund - Maintenance Srvcs 1010- 30- 20- 420- 01- 00 90, 000 General Fund - Maintenance Srvcs 1010- 30- 20- 420- 25- 00 44, 008 Street Fund - CIP PS2112 2080- 30- 10- 420- 30- 00 154, 090 Measure C - LMFD 2010- 19- 20- 425- 16- 00 1, 768, 010
Culture & Leisure CFF Fund - Reimb 2260- 80- 00- 440- 50- 00 7, 819, 057 W/ C Lathro CFF Fund - Reimb. 2320- 80- 00- 440- 50- 00 457, 122 RTIF CFF Fund - Reimbursement 2360- 80- 00- 440- 50- 00 883, 826 CIP GG2201 - Develo er 3010- 80- 00- 420- 12- 00 68, 425 CIP PS2112 - Streets 3310- 80- 00- 420- 12- 00 154, 090 CIP PS2112 - Federal Grants 3310- 80- 00- 420- 01- 00 376, 484 CIP PS1404 - Develo ers 3310- 80- 00- 420- 12- 00 1, 432, 567 Ex enditure Total: 12, 064,023
TRANSFER IN - BUDGET AMENDMENTS
increase Decrease
ucce GL. A oun A aunt
General Fund - CFD 2023- 1 1010- 99- 00- 393- 00- 00 95, 000 Measure C - LMFD 2010- 99- 00- 393- 00- 00 1, 768, 010
CIP P52112 - Streets 3310- 99- 00- 393- 00- 00 154, 090 CIP PS1404 - Develo ers 3310- 99- 00- 393- 00- 00 1, 432, 567 Transfer In Total: 3, 354, 667
TRANSFER 0UT - BU'DGET AMENDMENTS
Increase Decrease '
ourc GL Accoun AmQunt
Measure C - Cit Services 1060- 99- 00- 990- 90- 10 1, 768, 010 CIP PS2112 - Streets 2080- 99- 00- 990- 90- 10 154, 090 CFD 2023- 1 - RI Services 2640- 99- 00- 990- 90- 10 95, 000 CIP PS1404 - Develo ers 2710- 99- 00- 990- 90- 10 1, 432, 567 Transfer Out Total: 3, 354, 667
FUND BALANCE RESERYES - BUDGET AMENDMENTS
increasej Decrease
5our GL Acco n Amo n
General Fund - Street Re air 1010- 251- 03- 00 7, 000, 000 General Fund - Retirement 1010- 251- 06- 00 1, 000, 000 General Fund - Landsca e 1010- 251- 07- 00 3, 000, 000
Fund Balance Reserves Total: 11, 000, 000
Resolution No. 23- Page 2 of 4
FIS AL YEAR 2Q23j24
REYENUE BUDGET AMENDMENTS ( YEAR 1)
Increase De rease
r a A n
State Grant - GF 2160- 80- 00- 331- 05- 00 32, 792
State Grant - CIP PK2002 2160- 80- 00- 331- 05- 00 14, 668 Federal Grant - CIP PK2002 2150- 80- 00- 331- 05- 00 163, 273 State Grant - CIP PK2002 2160- 80- 00- 331- 05- 00 163, 273 State Grant - CIP PW2236 2160- 80- 00- 331- 05- 00 1, 500, 000 DWR Grant - CIP PW2236 2900- 80- 00- 331- 05- 00 1, 500, 000 Ex enditure Total: 47, 460
EXPE' NDTTURE - BU[ GET AMENDMENTS ( YEAR 1}
Tnc ease Decrease
urc GL Ac n Amo n
Communit Develo ment 1010- 20- 10- 420- 01- 00 32, 792
CIP GG2022 - GF 3010- 80- 00- 420- 12- 00 57, 139
CIP GG2019 - GF 3010- 80- 00- 420- 12- 00 57, 139
CIP PK2002 - State Grant 3010- 80- 00- 420- 12- 00 14, 668 CIP PS2218 - Measure K - Pedes 3310- 80- 00- 420- 12- 00 39, 709 CIP PS2218 - Measure K - Pedes 3310- 80- 00- 420- 12- 00 39, 709 CIP RW1916 - Develo er 6091- 80- 00- 420- 01- 00 83, 342 CIP RW2416 - Develo er 6091- 80- 00- 420- 86- 00 83, 342 Ex enditure Total: 47, 460
TRANSFER IN -- BUI GET AMENDMENTS
xncrease/ aecrease
r. GL A
General Fund - State Grant 1010- 99- 00- 393- 00- 00 32, 792 CIP PK2002 - State Grant 3010- 99- 00- 393- 00- 00 14, 668 CIP PS2218 - Measure K - Pedes 3310- 99- 00- 393- 00- 00 28, 683 Transfer In Total: 76, 143
TRANSFER flUT`= BUDGET AMENDMENTS'
Increase/ Decrease
Sour A A
CIP 2218 - Measure K - Pedestrian 2110- 99- 00- 990- 90- 10 28, 683 State Grant - GF 2160- 99- 00- 990- 90- 10 32, 792
CIP PK2002 - State Grant 2160- 99- 00- 990- 90- 10 14, 668 CIP PK2002 - Federal Grant 2150- 99- 00- 990- 90- 10 163, 273 CIP PK2002 - State Grant 2160- 99- 00- 990- 90- 10 163, 273 CIP PW2236 - State Grant 2160- 99- 00- 990- 90- 10 1, 500, 000 CIP PW2236 - DWR Grant 2900- 99- 00- 990- 90- 10 1, 500, 000 Transfer Out Total: 76, 143
Resolution No. 23- Page 3 of 4
The foregoing resolution was passed and adopted this 9t'' day of October 2023, by the following vote of the City Council, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Sonny Dhaliwal, Mayor
ATTEST: APPROVED AS TO FORM:
Teresa Vargas, City Clerk Salvador Navarrete, City Attorney Resolution No. 23- Page 4 of 4