1. CALL TO ORDER
2. CERTIFICATION OF AGENDA POSTING BY CITY CLERK
3. ROLL CALL OF COUNCIL MEMBERS
4. PLEDGE OF ALLEGIANCE
5. INVOCATION
This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200.
Procedures for Addressing the Council
IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO
ADDRESS THE COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO
[email protected] OR FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A
FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL.
AGENDA
City Council Special Meeting
TO BE HELD ON
May 30, 2023
COUNCIL CHAMBERS - 11350 BULLIS ROAD. LYNWOOD, CA 90262 OR WEB CONFERENCE VIA ZOOM - TO PARTICIPATE VIA ZOOM OR BY TELEPHONE: 1-669- 900-9128 OR 1-253-215-8782 MEETING ID: 835 2029 8238
Duly Posted on 5/26/23
5:30 PM
Oscar Flores, Mayor
Rita Soto, Mayor Pro Tem
Gabriela Camacho, Council Member
Juan Munoz-Guevara, Council Member
Jose Luis Solache, Council Member
PUBLIC ORAL COMMUNICATIONS
(Regarding Agenda Items Only)
City Council Special Meeting 1
6. NEW/OLD BUSINESS
6.1 PROPOSED 2023-2025 BIANNUAL CITYWIDE BUDGET STUDY SESSION
7. CITY COUNCIL ORAL AND WRITTEN COMMUNICATION
8. STAFF ORAL COMMENTS
NON-AGENDA PUBLIC ORAL COMMUNICATIONS
THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE
COUNCIL ON ITEMS WITHIN THE JURISDICTION OF THE COUNCIL AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO
SUBSTANTIAL DISCUSSION OF THE ISSUE BY THE COUNCIL, BUT COUNCIL MAY
REFER THE MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).)
Comments:
In preparation for the 2023-2025 Biennual Citywide Budget Hearing, the purpose of this Budget Study Session is to review the proposed revenue and expenditure budget for the upcoming two fiscal years. The focus at the budget study session is on the General Fund.
Staff looks forward to Council’s comments on the draft budget and proposed modifications for incorporation into the full Proposed 2023-2025 Biennual Citywide Budget (City, Successor Agency, Lynwood Utility Authority, Appropriations Limit, and Master Fee Schedule), which will be presented at the scheduled budget hearing for Council approval.
Recommendation:
Staff recommends that the City Council conduct a budget study session to receive information and presentations on the proposed 2023-2025 Biennual Citywide Budget and provide input.
ADJOURNMENT
THE NEXT REGULAR MEETING WILL BE HELD ON JUNE 6, 2023 AT 6:00 P.M. IN THE COUNCIL CHAMBERS OF THE CITY HALL ANNEX, 11350 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA.
City Council Special Meeting 2
AGENDA STAFF REPORT
DATE:
May 30, 2023
TO:
Honorable Mayor and Members of the City Council
APPROVED BY:
Ernie Hernandez, City Manager
PREPARED BY:
Harry Wong, Director of Finance & Administration
SUBJECT:
PROPOSED 2023-2025 BIANNUAL CITYWIDE BUDGET STUDY
SESSION
Agenda Item # 6.1.
Recommendation:
Staff recommends that the City Council conduct a budget study session to receive information and presentations on the proposed 2023-2025 Biennual Citywide Budget and provide input.
Background:
In preparation for the FY 2023-25 Biennual Budget Hearing, the purpose of this Budget Workshop is to review the FY 2023-25 City Manager Proposed Budget. The focus at the Budget Workshop is on the General Fund. Staff looks forward to Council’s comments on the draft budget and proposed modifications for incorporation into the full Proposed FY 2023-25 Biannual Citywide Budget (City, Successor Agency, Lynwood Utility Authority, Appropriations Limit, and Master Fee Schedule), which will be presented at the scheduled budget hearing for Council approval.
Discussion and Analysis:
FY 2022-23 General Fund Year-End Performance
On July 20, 2021, the City Council adopted the FY 2021-22 budget and approved the FY 2022-23 budget. On June 21, 2022, the City Council adopted the updated second year operating budget (the FY2022-23 revised adopted budget). The revised adopted FY 2022-23 General Fund Budget included $41.35 million in expenditures, $42.14 million in revenues, with an operating surplus of $789k. The City is projecting to end the year with $42.23 million in expenditures, offset by $44.68 million in revenue and surplus of $2.45 million. Please note the projected (unaudited) fund balance for FY 2022-23 year-end (i.e., beginning fund balance of the FY2023-2025 biennial budget) indicates a $17.85 million of spendable monies.
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FY 2022-23 GENERAL FUND BUDGET
FY 2022-23
Revised
Adopted
Budget
FY 2022-23
Projected
Year-End
(Unaudited)
Beginning Fund Balance
$3,898,348
$15,391,252
Revenues
$42,139,935
$44,684,205
Expenditures
($41,350,674)
($42,230,394)
Operating Surplus (Deficit)
$789,261
$2,453,811
Ending Fund Balance
$4,687,609
$17,845,063
FY 2022-23 Year-End Financial Report (Unaudited):
The table below details the City’s FY 2022-23 Revised Adopted Budget and FY 2022-23 Year- End Estimates (Unaudited) for revenue and expenditures. Overall, revenues for the City are projected to be up by 6.04% (or $2.54 million) compared to the FY 2022-23 Revised Adopted Budget. Numerous sources of revenue are projected to exceed the revised adopted FY2022- 23 budget figures. The City’s expenditures are projected to be up by 2.13% (or $880,000) compared to the FY 2022-23 Revised Adopted Budget.
MAJOR GENERAL FUND REVENUES
FY 2022-23
Revised
Adopted
Budget
FY 2022-23
Projected Year-
End Estimate
(Unaudited)
Increase
(Decrease)
Amount
Increase
(Decrease)
%
Revenues
Property Tax
$13,094,249
$13,630,301
$536,052
4.1%
Sales Tax (including Measure
PS)
14,681,883
13,902,695
(779,189)
-5.3%
Utility Users Tax
5,270,000
6,326,984
1,056,984
20.1%
Franchise Fees
1,690,991
1,169,704
(521,287)
-30.8%
Business License & Other Tax
605,100
635,495
30,395
5.0%
Charges for Current Services
1,534,800
1,279,496
(255,304)
-16.6%
Fines, Forfeits, & Penalties
906,000
775,041
(130,959)
-14.5%
Other Revenues
2,138,238
4,693,816
2,555,578
119.5%
Transfers In
2,218,674
2,270,674
$52,000
2.3%
Total Revenues
$42,139,935
$44,684,205
$2,544,270
6.0%
Expenditures
Operational Expenditures
$38,790,040
$34,917,117
($3,872,923)
-10.0%
Transfers Out
2,560,634
7,313,277
4,752,643
185.6%
Total Expenditures
$41,350,674
$42,230,394
$879,720
2.1%
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FY 2023-25 Proposed Budget Overview
The City Manager and Finance staff met with all Departments and Offices to review and discuss FY 2023-25 proposed budgets. The table below highlights the FY 2023-24 and FY 2024-25 General Fund Proposed Budgets.
FY 2023-25 GENERAL FUND
PROPOSED BUDGET INCLUDING CIP EXPENDITURES
FY 2023-24 Proposed
FY 2024-25 Proposed
Revenue
$42,318,951
$44,035,576
Expenditures
$56,109,640
$47,945,507
Projected Deficit
($13,790,689)
($3,909,932)
Beginning Balance
$17,845,063
$4,054,374
Ending Balance
$4,054,374
$144,443
Fund Balance Needed
to Meet Reserve Policy
$5,610,964
$4,794,551
The General Fund is the primary source and operating fund for most of the services, such as public safety (Los Angeles County Sheriff & Fire), street and park maintenance, and community services, that the City provides to the community.
The FY 2023-24 and FY 2024-25 Proposed Budgets were developed in the context of the City gradually recovering from the impact of the Covid-19 pandemic, but still facing a lot of economic uncertainties due to the ongoing Russo-Ukrainian war, increasing trade conflict with China and supply chain disorder, as well as the continue inflationary pressures and the increasing recessionary risk. For FY 2023-24, the proposed revenue for property, sales, and use taxes is comprised of 65.18%, or $27.58 million of the total $42.32 million in resources provided to the General Fund. Utility user’s tax, licenses, permits, franchise fees, fines, interest, rent and other miscellaneous sources represent 30.54% of revenues ($12.93 million).
Interfund transfers from other funds make up another 4.28%, or $1.81 million of the total.
For FY 2024-25, the proposed revenue for property, sales, and use taxes is comprised of
64.12%, or $28.24 million of the total $44.04 million in resources provided to the General Fund. Utility user’s tax, licenses, permits, franchise fees, fines, interest, rent and other City Council City Council Special Meeting 5
miscellaneous sources represent 30.86% of revenues ($13.59 million). Interfund transfers from other funds make up another 5.02%, or $2.21 million of the total.
FY 2023-24 AND FY 2024-25 PROPOSED GENERAL FUND BUDGET
FY2022-23
Revised
Adopted
Budget
FY 2022-23
Projected
Year- End
Estimate
(Unaudited)
FY 2023-24
Proposed
Budget
FY 2024-25
Proposed
Budget
Revenues
Property Tax
$13,094,249
$13,630,301
$13,682,000
$13,952,000
Sales Tax (including
Measure PS)
14,681,883
13,902,695
13,902,717
14,285,148
Utility Users Tax
5,270,000
6,326,984
5,295,000
5,347,950
Franchise Fees
1,690,991
1,169,704
2,128,000
2,735,000
Business License & Other
Tax
605,100
635,495
731,600
731,600
Charges for Current Services
1,534,800
1,279,496
1,616,450
1,618,250
Fines, Forfeits, & Penalties
906,000
775,041
897,000
897,000
Other Revenues
2,138,238
4,693,816
2,257,994
2,260,438
Transfers In
2,218,674
2,270,674
1,808,190
2,208,190
Total Revenues
$42,139,935
$44,684,205
$42,318,951
$44,035,576
Expenditures
Operational Expenditures
$38,790,040
$34,917,117
$42,156,342
$43,488,972
Transfers Out
2,560,634
7,313,277
13,953,298
4,456,535
Total Expenditures
$41,350,674
$42,230,394
$56,109,639
$47,945,507
The FY 2023-24 proposed budget includes $56.11 million in recommended expenditures.
Personnel costs, which include salaries and benefits, represent $8.89 million of the total expenditures. Operational costs, which include materials, services and supplies, account for $33.27 million of the budget. Debt service and transfers to other funds costs total $13.95 million. The proposed expenditures have increased by 35.69% or $14,758,965 over FY 2022- 23 revised adopted budget. Such substantial increase is primarily due to that $9.82 million of the total $13.85 million budgeted transfers are related to CIP projects, which are considered as non-recurring expenditures.
The FY 2024-25 proposed budget includes $47.95 million in recommended expenditures.
Personnel costs, which include salaries and benefits, represent $9.15 million of the total expenditures. Operational costs, which include materials, services and supplies, account for City Council City Council Special Meeting 6
$34.34 million of the budget. Debt service and transfers to other funds costs total $4.46 million. The projected expenditures have increased by 15.95% or $6.59 million over the FY 2022-23 revised adopted budget (of which $1.74 million increase is attributable to the increase in contract cost of police and fire safety services), but decreased 14.55% or $8.16 million proposed FY 2023-24 budget.
Other Proposed Budget Recommendations
In order to properly set aside and maintain the reserve funds, the City Manager is recommending the following transfers:
Contingency Set-Aside Fund $1,366,737 (Beginning FB - $366,737) Rainy Day Fund $1,485,559 (10% of Measure PS)
Also, as part of the upcoming budget adoption, staff is recommending the establishment of the following internal service funds:
Self-Insurance Fund
Information Technology Fund
Equipment/Machinery/Vehicle Replacement Fund
Equipment/Machinery/Vehicle Maintenance Fund
The following internal service fund shall be established in the second year updated budget in FY2024-25 or the next biennial budget of FY2025-27:
Facilities Maintenance Fund
In order for the City to properly budget for the above services, staff believes it is important to budget for the internal service fund charges with adequate allocation bases and to keep up with the service level.
Additionally, in an effort to maintain adequate service levels, staff recommends that the City Council consider the following included in the proposed budget:
Additions
- Full-Time - (1) Senior Management Analyst, (1) Communications Specialist, (1) Public Works Operation Manager, (1) PW-Water Compliance Specialist, (1) PW-Senior Accounting Technician, (1) PW-Assistant Administrative Analyst;
City Council City Council Special Meeting 7
- Part-Time - (5.48) FTE PW-Maintenance workers, and ten (10) Recreation staff Deletions
- Full-Time - (1) ARPA Coordinator, (1) Public Works Operations Supervisor, (1) PW-Water Service / Wastewater Maintenance Worker II, (1) PW-Permit Technician, (1) PW-Accounting Technician;
Part-Time - three point sixty (3.60) PW-Water/Sewer Service workers Relocations
Full-Time - (1) Administrative Analyst III from Community Development to City Manager Office; (1) Senior Management Analyst from Community Development to Public Works/Human Resources; (1) Media Specialist from City Manager’s Office to Recreation & Community Services; and (1) Administrative Assistant from Community Development to Public Works..
Fiscal Impact:
It is estimated that the General Fund balance will complete the FY 2022-23 fiscal year at $17.85 million. This is an estimated increase of $2.45 million in revenues over expenditures.
However, revenue estimates for FY 2023-24 and FY 2024-25 only have small increases, where the proposed budgeted expenditures have significant increases due primarily to police/fire services and capital improvement expenditures.
Based on the FY 2023-24 Proposed Budget and FY 2024-25 Proposed Budget, the projected General Fund balance would be $4.05 million at the end of FY 2023-24 and $144,000 at the end of FY 2024-25.
Coordinated With:
City Manager’s Office
City Attorney
All Departments
City Council City Council Special Meeting 8