Item #08
Date: February 21, 2023
To: Mayor and City Council
From: Jennifer Styczynski, Finance Director
Jim Schaad, City Manager
Subject: Budget Amendments to FY 2022-23 Adopted General Fund Budget Recommendation:
Pass a Motion to amend the FY 2022-23 adopted General Fund budget with the proposed adjustments to revenue and expenses as stated below.
Rationale for Recommendation:
Annually, staff commences a midyear review of revenues and expenditures to ensure the continued validity of the adopted budget. It also provides the City Council an opportunity to make adjustments to achieve a more accurate budget for the current fiscal year, resulting in a greater budget transparency, and to help shape the development of next year’s budget.
Background:
City Council adopted the FY 2022-23 budget on June 13, 2022 and is required to maintain a balanced budget.
City staff continually works to ensure that the City is not deficit spending. Therefore, sales tax (projected with the help of HdL), permits, and cannabis business tax forecasts were used to provide conservative financial projections given the continuing on-going COVID-19 pandemic. At midyear review, staff has found that sales tax and permits have continued to increase over original projections and cannabis business taxes have declined in line with most other municipalities within the State. It is therefore recommended that City Council authorize amending the Adopted Budget for FY 2022-23 to incorporate the additional $305,825 projected revenues.
Along with revenue increases, there have also been some increased expenses. Council has already approved $543,364 in supplemental appropriations ($356,736 in ongoing costs and $186,628 in one-time costs), of which the majority were related to wage increases for bargaining unit and non-bargaining unit employees.
Additional appropriations of $44,135 are being recommended, primarily to finish the wall at Bryant Field and the purchase of a Bobcat that is being semi offset by a Yuba Water Agency grant.
Discussion & Analysis:
City staff is recommending adding a revenue budget adjustments of $305,925 to increase general fund revenues and supplemental appropriations of $44,135 to increase general fund expenditures. The below summary gives an overview of the changes, and the attachment presents further detail on amounts and a brief description of why the budget amendments are being requested as follows below.
Item #08
Revenue
Adopted Budget (less one-time revenues) $ 13,493,790
One-time ARPA Revenue 1,539,240
One-time Grant Revenue 1,329,943
Total Adopted Budget - Revenue $ 16,362,973
Approved Supplemental Appropriations (Grants and Ins.) 108,642 Projected Increase 305,825
Revised Revenue as of 12-31-22 $ 16,777,440
Expense
Adopted Budget (less one-time expenses) $ 12,495,943
One-time ARPA Expenses 1,950,000
One-time Expenses and Grants 1,967,907
Total Adopted Budget - Expenses $ 16,413,850
Approved Supplemental Appropriations (first half) $ 543,364 Recruitment of Fire Chief (passed in prior year) (one-time cost) 18,000 Additional music entertainment at Peach Festival (one-time cost) 16,000 Labor negotiations for PD and Teamsters (ongoing cost) 247,958 Labor negotiations for PD and Teamsters (one-time cost) 66,725 Labor negotiations for Fire (ongoing cost) 108,778
Labor negotiations for Fire (one-time cost) 39,566
Labor negotiations for PD, Teamsters, and Mgmt. (one-time cost) 63,499 Replace radios through VFG grant (one-time cost) 19,163 Administer the Business Façade/Marketing Grant (one-time cost) 10,000 Sponsor a bronze statue of Cotton Rosser (one-time cost) 5,000 Continued legal retainer - Shute, Mihaly &Weinberger (one-time cost) 60,000 Agreement with Linda Fire (one-time cost) (111,325)
Proposed Expense (Appropriation) Adjustments by Dept. $ 44,135 Economic Development 25,000
Human Resources (10,000)
Finance 17,750
Information Technology 15,300
Grants (319,578)
Police 24,252
Fire 39,000
Building 16,911
Public Works and Engineering (20,000)
Facilities and Parks 230,500
Fleet 25,000
Proposed Revised Expense as of 12-31-22 $ 17,001,349
Revised Deficit (Revenue Less Expense) as of 12-31-22 $ (223,909) Adopted Budget Deficit (for reference) as of 7-1-22 $ (50,877) Item #08
Alignment with City Council Goal(s):
This Agenda Item aligns with current Council Goals as it updates the City’s fiscal projections to be more accurate and represent current fiscal expectations for FY 2022-23.
Fiscal Analysis:
The recommended adjustments to both General Fund revenue and expenditure budgets for FY 2022-23 allow for a continued balanced budget with a revised deficit of $223,909. This is not due to a structural deficit but due to approved one-time expenses.
Attachments:
1. Detailed Recommended Budget Adjustments
2. FY 2023-23 Financial Report