1 EXECUTIVE SUMMARY
The Fiscal Year 2023-24 Proposed Operating Budget includes $22.01 million in ongoing and nonrecurring revenues and $27.45 million in ongoing and non-recurring expenditures. The budget format addresses revenues and expenditures for all budgeted fund types citywide, while providing an expanded, comprehensive budgetary analysis of the General Fund – the City’s main operating fund.
The City’s budget is comprised of six governmental fund type categories that include the General Fund, Special Revenue Funds, Debt Service, Capital Project Funds, Fiduciary Funds and Enterprise/Wastewater Funds. Departments funded by the General Fund provide core community services, such as public safety (e.g., police and fire protection), community development, (e.g., planning and building) and public works (e.g., engineering, park maintenance, and buildings/grounds) as well as vital support functions including overall city administration, legal, finance, information technology, and human resources. These core services are supported primarily by major revenue sources that include property tax, sales tax, Measure C sales tax, and Measure F cannabis business tax.
General Fund – Fund Balance and Reserves
As of June 30, 2023, the City’s General Fund projected ending fund balance is $10.95 million. Past years one-time, non-recurring revenues from the sale of the Plumas Lake Golf Course and American Rescue Plan Act (ARPA) funds have contributed approximately $3.88 million to this reserve. The proposed FY 2023-24 budget projects General Fund ongoing revenues and expenditures totaling approximately $14.15 million and $13.43 million, respectively. Staff expect approximately $1.69 million in nonrecurring revenues and propose $8.49 million in non-recurring expenditures. This would bring the overall FY 2023-24 revenues to $15.84 million and expenditures to $21.92 million yielding a projected fund balance of $4.86 million or 36.20% as of June 30, 2024.
General Fund - Revenues
The General Fund's four largest revenue sources - property tax, sales tax, Measure C, and Measure F account for approximately $10.88 million or 76.88% of the total General Fund ongoing revenues. In total, these four major revenue streams have increased by $0.80 million compared to the Fiscal Year 2022-23 Adopted Budget. The City will continue to monitor these revenues over the year to see if the lingering impacts of COVID-19 continue to influence the economy. In order to present a more realistic perspective on revenue, the City will no longer budget potential grant revenues until the grant is awarded to the City. A supplemental appropriation will be done at that time to adjust the revenue and corresponding expenditure account.
General Fund - Expenditures
The City's Fiscal Year 2023-24 Proposed Budget projects General Fund ongoing expenditures totaling $13.43 million and $8.49 million of non-recurring expenditures. Overall proposed budget changes include adjustments to department line items, including repairs and maintenance, salaries and benefits, and contract services. By conducting a three-year comparison and analysis of each department budget, expenditure and potential cost savings were comprehensively evaluated. The outcome of this analysis continues to capture a clearer picture of each department’s genuine cost and, as a result, allowed for underused budget expenditure line items to be adjusted appropriately. 2 Positions/FTE’s
The Fiscal Year 2023-24 Proposed City Budget includes sixty-nine (69) budgeted full-time (FTE) positions, with no net change in FTE count from Fiscal Year 2022-23. There was a decrease of one FTE in the Fire Chief position with the contracting of fire chief and administrative services through Linda Fire Protection District. Staff are proposing an offsetting increase of one FTE position in the Fire Department with the transition of a seasonal Fire Fighter program to one FTE Fire Fighter position working a floating schedule. The proposed budget reflects an overall increase of $141,000 in budgeted salaries and wages primarily due to increased health insurance rates and budgeted step increases for all bargaining units per each units Memorandum of Understanding offset by the reduction of salary and benefits for the Fire Chief position outsourced as stated above.
Budget Changes by Department
Listed below and in alphabetical order are the specific department budget changes for Fiscal Year 2023-24 (e.g., increases, decreases).
City Attorney’s Office
The City Attorney’s budget overall is decreasing $98,000 from the Fiscal Year 2022-23 budget because a retainer for legal assistance in the current litigation with the California Department of Transportation that is not budgeted similarly for Fiscal Year 2023-24. If additional services are needed, the request will come back to Council for additional financial authority. A separate budget line item is continued to be used to capture such services provided from outside legal services for $22,000.
City Manager’s Office
For Fiscal Year 2023-24, the overall proposed budget is set to increase by $30,000 from the prior year.
This reflects an overall increase in Salaries & Benefits for previously negotiated increases as well as a reduction in the Services & Supplies budget of $10,000 since there is no election in the fiscal year and associated costs will not be incurred.
Community Development Department
The Community Development Department contains Economic Stability, Planning & Zoning, and Building. The Professional Services budget for the Planning and Building Division includes the continuation of contracting a building inspector service. Staff recommends that with the uncertainty in the economy the use of a contracted service remain as the status quo.
This budget also reflects the continuation of a grant through SACOG (Sacramento Area Council of Governments) in the amount of $405,500 to finish completing the Zoning/Housing/Safety Element Ordinances. This grant has a required $17,000 City match. The expected completion date of this project is July of 2024.
Finance Department
The Finance Department budget was increased overall by $30,000. This includes a new proposed ongoing expenditure of $17,000 per year for ClearGov, a budgeting cloud-based software to replace the current budgeting method of using multiple linked excel sheets that is extremely time consuming and susceptible to error. This new software will allow department heads to have real-time access to the budget as it is developed and submit requests electronically. It will also provide an audit trail of 3 changes made in the budgeting process and allow the City to create an interactive budget book for transparency.
Fire Department
This year’s Fire Department budget is expected to increase by $358,000. The majority of this increase is due to a one-time expenditure of an additional $300,000 for the needed apparatus storage building to adequately house the newly upgraded engines which is expected to be offset by up to $200,000 through a one-time contribution by the D10/Hallwood District. The majority of the Services & Supplies budget is consistent with prior year budgets with the exception of inclusion of the ongoing contract with Linda Fire Protection Services to continue to provide Fire Chief and administrative services.
The Fire Department has been very successful and committed in past grant writing efforts. For FY 2023-24, grants will be added to the budget through supplemental appropriations once approved by the Council, funded by the grantor, and received by the City.
Fleet Department
Although the City has experienced tremendous success with leased vehicles in the Police and Public Works Departments, the City continues to experience significant challenges maintaining its Fire Department apparatus and other Public Works equipment. As a result, the Fleet Department is overseen by the Fire Chief in order to repair and provide ongoing maintenance to the Fire Department’s apparatus and Public Works equipment. There is a $55,000 decrease to the repairs of the buildings and grounds as last year included a one-time expenditure for large outdoor concrete pad that allows staff to lift larger equipment for repair on site. The remaining budget is the status quo from last fiscal year.
General Services
General Services refers to expenditures that are not directly tied to a single department budget and fulfill the equipment, project, program, and service needs of multiple departments and/or the entire City organization as a whole. With that in mind, all the City’s insurance needs (e.g., liability, property, vehicle, crime, flood, and fraud) are in the General Services budget totaling $590,500. The proposed budget reflects an increase of $69,000 from FY 2022-23 due to the continual increase in property and liability insurance premiums.
Homeless Services
While in prior years funds to address homeless activities were not earmarked and budgeted for, in FY 2019-20 the City established a “Homeless Services Division”. This year’s budget of $16,000 is status quo from the prior year. This Division allows the City to better serve and more transparently account for and track the City’s true costs and efforts to address homelessness. The Division’s budget is used for the City’s share of the Executive Director for the Homeless Consortium, outreach and enforcement, clean-up and equipment, and portable restrooms.
Human Resources
To continue greater governmental transparency and employ municipal finance best practices, all employee related costs that departments cannot control nor can be allocated to a specific employee have been allocated to the Human Resources (HR) Department. These expenditures include 4 unemployment, workers compensation, CalPERS unfunded pension liability, and employee recruitment costs (e.g., background check, fingerprinting, credit check, medical exam, and psychological exam).
The total HR budget for Fiscal Year 2023-24 is $1.61 million with the largest allocation being our Pension Obligation Bond payment totaling $1.13 million.
Police Department
In the Police Department, the overall budgets for Police and Dispatch have stayed comparatively the same as the prior year with only an overall budget increase of $142,000. The main reasons for the increase are salaries and benefits resulting from negotiated step increases and salaries and additional equipment needed for enforcement efforts. The proposed new equipment is an additional nine radars for patrol vehicles and License Plate Readers (LPR) cameras that would be strategically placed at entrances to the City to capture vehicle information to be used for investigative purposes.
In the Animal Care Services Division, there is an overall decrease of $15,000 reflected in Salaries & Benefits as the one FTE recently hired at the entry level, replacing a more tenured employee who left the organization. The Services & Supplies section of this division remains steady which is attributed to the success of the Trap, Neuter, and Release (TNR) Program, which allows for trapping, “fixing”, and releasing local cats along with foster care and Fieldhaven’s local assistance. This has allowed the City to be able to reduce and maintain its cat sheltering expenditures over the past five fiscal years.
The Supplemental Law Enforcement Services Funds (SLESF) and Citizens’ Option for Public Safety (COPS) are Special Revenue Funds that are derived from revenue sources that are State regulated and must be spent for specific purposes. This year’s SLESF/COPS Fund total expenditures of $204,000 will support a variety of Police activities, including salaries, tasers, vehicle leases, automated license plate reader program, and other frontline equipment. Note that these expenditures are fully funded by grant revenue.
This fiscal year the Police Department’s grant writing efforts are expected to continue and to assist with the City’s ongoing commitment to increased and improved public safety. These grants will be added to the budget through supplemental appropriations once approved by the Council, funded by the grantor, and received by the City.
Public Works
The Public Works Department includes the following Divisions: Facilities & Parks, Public Works & Engineering, Streets, and Wastewater Treatment. The Public Works & Engineering budget is looking at a relatively unchanged budget with less than a $2,000 difference between the fiscal years.
The Facilities and Parks budget has an overall decrease of $121,500 from FY 2022-23 that includes the following notable changes:
▪ Ongoing Cemetery headstone maintenance ($10,000 increase); ▪ Specialized contracted services to develop a comprehensive cost and feasibility analysis for circulating clean water through Ellis Lake ($219,500 increase); ▪ Playground equipment replacement ($25,000 increase);
▪ Removal of one time funds for the purchase of a Bobcat Loader ($168,500 decrease); ▪ Removal of materials for the Bryant Field fence replacement project ($177,000 decrease). 5 The Gas Tax Fund (Streets) budget is status quo with very little change from prior years with the exception of two accounts.
▪ There are no capital additions for vehicles or heavy equipment proposed for this fiscal year. ▪ There is an interfund transfer to the Street Capital Fund up to $110,000 for the remaining cost for engineering for the 22nd Street Rehabilitation Project.
Enterprise/Wastewater Funds are derived from revenues generated directly from the user charges and fees of sewage rate payers. These funds are not subsidized by the General Fund and activities and projects associated with these funds are intended to be fully self-supported by user charges and fees.
In the City of Marysville, the Enterprise/Wastewater Fund is used to support the City’s main connection to the Linda County Water District (LCWD), manage and maintain the City’s wastewater treatment services and collection system within the City limits.
The Enterprise/Wastewater Fund working expenditure budget for this fiscal year is $3.64 million, representing a net increase of $426,500 from the prior year’s adopted budget. This rise in expenditure is largely due to the contractual agreement with LCWD to fund reasonable and appropriate operations and maintenance costs, including capital improvements.
Included in the Enterprise/Wastewater budget are debt service payments for the 2021 Series A Revenue Bonds ($722,000) that refinanced the 2012 Revenue Bonds and the 2021 Series B Revenue Bonds ($268,500) that paid off the Linda County Water District Loan and provided $3.00 million in capital improvement funding. The Fund’s total debt service for this fiscal year is $990,500.
Bonded Debt & Long-Term Obligations
The Debt Service Fund includes $980,500 to fund vehicle leases, through Enterprise Fleet Services, debt payments (principal and interest), and bond payments. This year includes $514,100 for the 2019 COP (Certificate of Participation) bond that refunded the 2011 COP for the B Street Property in September of 2019 and a $92,000 first payment on a new five year lease payment with Ford for five new Police patrol vehicles which are part of the Departments vehicle replacement program.
In addition, new and existing lease payments continue to be budgeted in the Debt Service Fund for improved and consistent tracking and transparency. The total for all vehicle leases is $126,500 and it includes: one utility truck for Fire, four trucks for Public Works, one boom truck for Public Works, and eleven vehicles for Police.
Also included in the Debt Service Fund are payments in the amount of $90,900 for the 2017 Clean Renewable Energy Bonds. As part of the overall financing of the project, an annual energy subsidy revenue of $28,000 is budgeted and will offset a portion of the cost of the debt service for the solar project.
Long Range Planning & Capital Projects
Capital Project Funds are used for the acquisition, development, design, construction, and refurbishment of capital assets and infrastructure. The following projects are budgeted in the Fiscal Year 2023-24 Capital Projects Funds (including the Enterprise/Wastewater Fund):
6 ▪ General Plan (comprehensive policy document) update that is scheduled to be completed in July 2024 ($372,488 transferred from the General Fund); ▪ Proposition 68 Per Capita Grant Program ($177,952) and SACOG (Sacramento Area Council of Governments) Community Design Funding Program ($38,186). These two grants will fund the design, construction, and play equipment for Gavin Park over 2021-22, 2022-23, and 2023-24 Fiscal Years. The total project will be $327,952 to include an additional $50,000 from the General Fund as needed for upgraded playground material; ▪ 22nd Street Reconstruction Project ($750,000 total project cost) that will be completed over the 23-24 Fiscal Year. This project will be funded through excess reserves within the General Fund;
▪ Local Street Rehabilitation Projects ($2,160,000 total project cost) that will be completed over the 23-24 Fiscal Year. This project will be funded through excess reserves within the General Fund;
▪ Local Street Slurry Seal Projects ($790,000 total project cost) that will be completed over the 23-24 Fiscal Year. This project will be funded through excess reserves within the General Fund; and
▪ Completion of the decommission of the north and south sewer ponds to be finalized in FY 2023-
24. The cost of the project is not to exceed $6.20 million and will be funded in whole by a grant received by the State Water Resources Control Board (SWRCB).
Use of American Rescue Plan Act (APRA) Funds
The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provided governments across the county with resources needed to recover from the COVID-19 public health emergency through APRA funding. The City of Marysville has received $3.08 million in these funds between two equal payments received September 2021 and October 2022 to be obligated by December 31, 2024. The following list are projects using these funds proposed for Fiscal Year 2023-24 totaling $2.16 million:
▪ Second round of Economic Development/Marketing grants for small businesses, ($110,000); ▪ Down payment on Fire Department radio coverage improvement project for public safety ($500,000);
▪ Engineering and environmental cost for 22nd Street reconstruction project ($50,000); and ▪ Deferred maintenance of City facilities including roof repairs, HVAC units, painting, and windows ($1,500,000).