1 EXECUTIVE SUMMARY
The Fiscal Year 2024-25 Proposed Operating Budget includes $22.26 million in ongoing and non-recurring revenues and $23.59 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, a complex structure, is divided into six categories of governmental funds. The General Fund, the backbone of our operations, funds departments that 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). It also supports vital support functions including overall city administration, legal, finance, information technology, and human resources. These essential services are primarily funded by significant revenue sources, including property tax, sales tax, Measure C sales tax, and Measure F cannabis business tax.
General Fund – Fund Balance and Reserves
As of June 30, 2024, the City’s General Fund projected ending fund balance is $7.38 million. The proposed FY 2024-25 budget projects General Fund ongoing revenues and expenditures totaling approximately $14.51 million and $14.15 million, respectively. Staff expect roughly $0.99 million in non-recurring revenues and propose $3.30 million in non-recurring expenditures. This would bring the overall FY 2024- 25 revenues to $15.50 million and expenditures to $17.45 million, yielding a projected fund balance of $5.43 million or 38.35% as of June 30, 2025.
General Fund - Revenues
The General Fund's financial health is largely influenced by its four largest revenue sources - property tax, sales tax, Measure C, and Measure F. These sources account for approximately $10.62 million or
73.17% of the total General Fund ongoing revenues. However, these four major revenue streams have decreased by $0.26 million compared to the Fiscal Year 2023-24 Adopted Budget. The City will closely monitor these revenues over the year to gauge the impact of the current state of the economy on these revenue streams. To present a more accurate perspective on revenue, the City will no longer budget potential grant revenues until the grant is awarded to the City and reimbursement is collected. 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 2024-25 Proposed Budget projects General Fund ongoing expenditures totaling $14.51 million and $3.30 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. Budget, expenditure, and potential cost savings were comprehensively evaluated by conducting a three-year comparison and analysis of each department. 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.
Positions/FTE’s
The Fiscal Year 2024-25 Proposed City Budget includes seventy (70) budgeted full-time (FTE) positions, an increase of one FTE count from Fiscal Year 2023-24. There has been a decrease of one FTE due to not funding the Assistant Community Developer Director position. Staff are proposing two new FTEs 2 partially supported by grants. An additional Maintenance Worker in the Parks Division is to be partially offset by the Beverage Container Recycling Grant up to $36,242 and the Prop 64 Cohort 3 Grant partially funding an Accounting/Grant Administrator. This funding will be through April 30, 2028, and will provide up to $56,313 per fiscal year. Along with these changes, the proposed budget reflects an overall increase of $335,500 in budgeted salaries and wages due to increased health insurance rates and budgeted step increases per each bargaining unit's negotiated Memorandum of Understanding.
Budget Changes by Department
The specific department budget changes (e.g., increases and decreases) for Fiscal Year 2024-25 are listed below and in alphabetical order.
City Attorney’s Office
The City Attorney’s budget is decreasing by $434,000 from the Fiscal Year 2023-24 budget due to the legal assistance in the current litigation with the California Department of Transportation concluding. If additional services are needed, the request will be brought back to the Council for additional financial authority. A separate budget line item is continued to capture such services provided from outside legal services for $10,000.
City Manager’s Office
For Fiscal Year 2024-25, the proposed budget is set to increase by $31,000 from the prior year. This reflects an overall increase in Salaries & Benefits for previously negotiated increases and an increase in the Services & Supplies budget of $20,000 for the November 2024 election and the associated costs to 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 continuing to contract a building inspector service. Staff continues to recommend that, given the uncertainty in the economy, the use of a contracted service remains the status quo.
This budget also reflects the final year of a $134,000 grant through SACOG (Sacramento Area Council of Governments) to complete the Zoning/Housing/Safety Element Ordinances. This grant has a required $17,000 City match with an expected completion date of October 2024. To continue momentum of economic development, a third round of Marketing/Façade grants for small businesses of $110,000 will be funded by the City and managed by the Economic Development Corporation (EDC).
Finance Department
The Finance Department budget decreased overall by $5,000. This includes reclassing the ongoing budgeting cloud-based software to the Information Technology department. The remaining budget remains consistent and stable compared to the prior fiscal year.
Fire Department
This year’s Fire Department budget is expected to decrease by $215,000. The majority of this decrease is due to the completion of the apparatus storage building to adequately house the newly upgraded engines to be completed at the beginning of Fiscal Year 2024-25. Most of the Services & Supplies and Salaries & Benefits budgets are consistent with the previous year's budgets. There are two additional one-time expenditures totaling $70,000 for gym equipment and a Polaris UTV with a mounted pump to be offset by funds received by Hallwood/D10.
3 The Fire Department has successfully committed to past grant writing efforts. For FY 2024-25, 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, it 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 to repair and provide ongoing maintenance to the Fire Department’s apparatus and Public Works equipment. There is a $16,000 increase due to overall increases in everyday expenses such as tools and parts and negotiated salary increases. The remaining budget is the status quo from the last fiscal year.
General Services
General Services refers to expenditures not directly tied to a single department budget and fulfill multiple departments' equipment, project, program, and service needs and the entire City organization.
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 $795,700. This represents an increase of 31% from the prior year as rates across the US continue to increase along with the increasing severity of claims within both the pool and City levels.
The proposed budget also includes $1.90 million in one-time interfund transfers to capital accounts for the General Plan, deferred maintenance of City facilities, and improvements to the Fire Department radio coverage.
Homeless Services
In prior years, funds to address homeless activities were not earmarked and budgeted for, but 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. The division’s budget funds 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 assigned to the Human Resources (HR) Department. These expenditures include unemployment, workers' compensation, CalPERS unfunded pension liability, and employee recruitment costs (e.g., background checks, fingerprinting, credit checks, medical exams, and psychological exams).
The total HR budget for Fiscal Year 2024-25 is $1.72 million, with the largest allocation being our pension obligation bond payment (POB), which totals $1.16 million. There is also an increase of $168,000 in our current CalPERS unfunded pension liability as CalPERS investment goals were unmet, and an 8% increase in workers' compensation insurance through salary increases and claims.
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 $307,000 for both departments. The main reasons for the increase are salaries and benefits resulting from negotiated step increases. No additional one-time expenditures are requested as the License Plate Readers (LPR) cameras are 4 strategically placed at entrances to the City to capture vehicle information for investigative purposes.
Body/in-car cameras are in use, and both are now budgeted for as ongoing expenditures.
The Animal Care Services Division has a minimal overall increase of only $8,500. The Services & Supplies section of this division remains steady, which is attributed to the success of the Trap, Neuter, and Release (TNR) Program. This program allows for trapping, “fixing,” and releasing local cats along with foster care and Fieldhaven’s local assistance. This has allowed the City to reduce and maintain its cat sheltering expenditures over the past six 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 $182,500 will support various Police activities, including salaries, tasers, vehicle leases, an automated license plate reader program, and other frontline equipment. Note that these expenditures are fully funded by grant revenue.
The Police Department’s grant-writing efforts are expected to continue this fiscal year, assisting with the City’s ongoing commitment to increased and improved public safety. Once approved by the Council, funded by the grantor, and received by the City, these grants will be added to the budget through supplemental appropriations.
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 an increase of $59,500 as a one-time expenditure has been requested to complete a preliminary analysis of a train horn quiet zone. The remaining budget is relatively unchanged from the prior fiscal years.
The Facilities and Parks budget has an overall decrease of $138,500 from FY 2023-24, includes the following notable changes:
▪ Additional Maintenance Worker partially funded through the Beverage Container Recycling Grant ($69,500 increase with an up to $36,000 offset).
▪ Specialized contracted services to continue the development of a comprehensive cost and feasibility analysis for circulating clean water through Ellis Lake ($152,500 total, with $25,000 being funded by the General Fund and $122,500 from a grant with Yuba Water Agency). ▪ Continued playground equipment replacement ($25,000 increase).
The Gas Tax Fund (Streets) budget is status quo with very little change from prior years except for two accounts.
▪ Completion of the Feather River Air Quality Management District (FRAQMD) grant to replace two storm drain engines with a City match of up to $130,500. ▪ A Green Means Go grant through SACOG for a sewer and storm drain analysis. Up to $283,00 will be grant-funded, while the $100,000 City match will be funded through the Enterprise Fund.
Enterprise/Wastewater Funds are derived from revenues generated directly from sewage ratepayers' user charges and fees. These funds are not subsidized by the General Fund, and activities and projects associated with them are intended to be fully self-supported by user charges and fees. 5 The Enterprise/Wastewater Fund in the City of Marysville supports the City’s primary connection to the Linda County Water District (LCWD) and manages and maintains the City’s wastewater treatment services and collection system within the City limits.
The Enterprise/Wastewater Fund's working expenditure budget for this fiscal year is $3.78 million, representing a net increase of $225,000 from the prior year’s adopted budget. This rise in expenditure is due primarily to the contractual agreement with LCWD to fund reasonable and appropriate operations and maintenance costs, including capital improvements and a reclass of a General Fund FTE to a Wastewater FTE, bringing the total FTE count to three.
Included in the Enterprise/Wastewater budget are debt service payments for the 2021 Series A Revenue Bonds ($724,300) that refinanced the 2012 Revenue Bonds and the 2021 Series B Revenue Bonds ($263,100) 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 $987,400.
Bonded Debt & Long-Term Obligations
The Debt Service Fund includes $966,000 to fund vehicle leases through Enterprise Fleet Services, debt payments (principal and interest), and bond payments. This year includes $512,500 for the 2019 COP (Certificate of Participation) bond that refunded the 2011 COP for the B Street Property in September of 2019 and a $87,000 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, consistent tracking and transparency. The total for all vehicle leases is $235,000, and it includes one utility truck for Fire, four trucks for Public Works, one boom truck for Public Works, and twelve vehicles for Police.
Also included in the Debt Service Fund are payments of $104,200 for the 2017 Clean Renewable Energy Bonds. As part of the overall project financing, an annual energy subsidy revenue of $28,000 is budgeted and will offset a portion of the debt service cost for the solar project.
Long-Range Planning & Capital Projects
Capital Project Funds are used to acquire, develop, design, construct, and refurbish capital assets and infrastructure. The following projects are budgeted in the Fiscal Year 2024-25 Capital Projects Funds (including the Enterprise/Wastewater Fund):
▪ General Plan (comprehensive policy document) update scheduled to be completed in October 2024 ($180,000 transferred from the General Fund).
▪ Proposition 68 Per Capita Grant Program ($106,932 in Capital Fund). The final year to complete the design, construction, and play equipment for Gavin Park. This grant period has covered 2021- 22, 2022-23, 2023-24, and 2024-25 Fiscal Years. The total project will be $327,952 (including a $100,000 grant from SACOG) and an additional $50,000 from the General Fund for upgraded playground material.
▪ CalRecycle Beverage Container Recycling Grant ($271,000 total project cost) will be completed over the 2024-25 Fiscal Year with no City match. The project will purchase and install water refill stations and beverage container recycling receptacles in the historic downtown area and provide partial funding for a full-time Maintenance Worker to manage the receptacles. 6 ▪ Caltrans Clean California Local Grant project up to $300,000 for Fiscal Year 2024-25 ($2,906,000 total project cost through June 30, 2026) with no City match. This project will enhance the east side of Ellis Lake to include play-pocket stations, fishing areas, a 6’ wide multi-use trail, and upgraded lighting.
▪ DOT/SACOG Community Design Grant ($282,391 total project cost) that will be completed in Fiscal Year 2024-25. The total project cost includes a $32,391 City match that will be funded through the General Fund. This project will provide safety and walkability enhancements on Historic D Street between 3rd and 4th Street.
▪ DOT/SACOG 14th Street Traffic Calming Multi-Modal Pilot Program Grant to be completed in Fiscal Year 2024-25 with a total project cost of $168,000 and no City match. This project is a pilot study to divert traffic off residential streets to the industrial commercial-zoned roadway. ▪ Down payment on Fire Department radio coverage improvement project for public safety ($384,587 General/ARPA Funds).
▪ Deferred maintenance of City facilities, including roof repairs, HVAC units, painting, and windows ($1,300,000 General/APRA Funds).