Agenda packet, first session — Menifee City Council, February 5, 2025

City Council Chambers
29844 Haun Road
Menifee, CA 92586
Ricky Estrada, Mayor
Bob Karwin, District 1
Ben Diederich, District 2
Dan Temple, District 3
Dean Deines, District 4
SPECIAL AGENDA
Menifee City Council
Special Meeting Agenda
Wednesday, February 5, 2025
4:00 PM Special Meeting
Armando G. Villa, City Manager
Jeffrey T. Melching, City Attorney
Stephanie Roseen, City Clerk
SPECIAL MEETING (4:00 PM)

1. CALL TO ORDER

2. ROLL CALL

3. PLEDGE OF ALLEGIANCE

4. DISCUSSION ITEMS

4.1 Appointment of Ben Diederich as the District 2 Councilmember of the Menifee City Council
RECOMMENDED ACTION

1. Adopt a resolution appointing Ben Diederich as the District 2 Councilmember of the City of Menifee City Council.

4.2 Fiscal Year 2024/25 MidYear Budget Adjustments and Review, Including a Capital Improvement Program Status Update
RECOMMENDED ACTION

1. Accept the Fiscal Year 2024/25 MidYear Budget review and approve the additional budget revenue and appropriations as presented; and

2. Adopt a resolution updating the City’s Authorized Position Listing approving additional staffing changes; and

3. Adopt a budget amendment resolution for Fiscal Year 2024/25 MidYear Budget adjustments; and

4. Receive an update on the Fiscal Year 2024/25 Capital Improvement Program.

5. ADJOURN
Decorum Policy Notes
The Council anticipates and encourages public participation at its Council meeting on agenda items. Please turn your cell phones off, refrain from talking in the audience or outbursts that may be disruptive. We encourage participation and ask for a mutual respect for the proceedings.

Staff Reports
Materials related to an item on this agenda, including those submitted to the City Council after distribution of the agenda packet, are available for public inspection by contacting the City Clerk Department at City Hall located at 29844 Haun Road or by calling (951) 6726777 during normal business hours.

Compliance with the Americans with Disabilities Act
If you need special assistance to participate in this meeting, you should contact the City Clerk Department at (951) 6726777. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.

Menifee Mayor and City Council

February 5, 2025
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1. CALL TO ORDER

2. ROLL CALL

3. PLEDGE OF ALLEGIANCE

4. DISCUSSION ITEMS

4.1 Appointment of Ben Diederich as the District 2 Councilmember of the Menifee City Council
RECOMMENDED ACTION

1. Adopt a resolution appointing Ben Diederich as the District 2 Councilmember of the City of Menifee City Council.

4.2 Fiscal Year 2024/25 MidYear Budget Adjustments and Review, Including a Capital Improvement Program Status Update
RECOMMENDED ACTION

1. Accept the Fiscal Year 2024/25 MidYear Budget review and approve the additional budget revenue and appropriations as presented; and

2. Adopt a resolution updating the City’s Authorized Position Listing approving additional staffing changes; and

3. Adopt a budget amendment resolution for Fiscal Year 2024/25 MidYear Budget adjustments; and

4. Receive an update on the Fiscal Year 2024/25 Capital Improvement Program.

Menifee Mayor and City Council

February 5, 2025
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CITY OF MENIFEE
SUBJECT: Appointment of Ben Diederich as the District 2 Councilmember of the Menifee City Council
MEETING DATE: February 5, 2025
TO: Mayor and City Council
PREPARED BY: Stephanie Roseen, City Clerk
REVIEWED BY: Stephanie Roseen, City Clerk
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Adopt a resolution appointing Ben Diederich as the District 2 Councilmember of the City of Menifee City Council.

DISCUSSION
On December 17, 2024, staff brought forward a staff report outlining the options for the City Council to fill the vacancy for District 2 created by the election of Ricky Estrada as Mayor. Those options included holding a special election on November 4, 2025, appointing an eligible resident from District 2, or adopt an ordinance for a temporary appointment of a District 2 resident to the City Council and a special election. The City Council voted to move forward with an appointment process to fill the vacancy.

The City advertised the vacancy of District 2 on December 23, 2024 and requested interested District 2 residents to submit a Statement of Interest to the City. Statement of Interests were to be submitted to the City Clerk by January 7, 2025 by 5:00 PM. Statements of Interest were received by the following applicants: Altie Holcomb, Barbara Brohl, Ben Diederich, George Mills, Jeffrie White, Joe Long, Laz Peterson, Richard Sierra, and Thomas Fuhrman. Those nine individuals were invited to a special City Council meeting held on January 15, 2025 to provide a statement to the City Council. During the special City Council meeting seven of the applicants provided their statements for the City Council’s consideration.

During the regular meeting of the City Council on January 15, 2025, the City Council voted to appoint Ben Diederich as the District 2 Councilmember. The item before the City Council is to officially adopt a resolution declaring the appointment of Ben Diederich effective immediately. Ben Diederich would be sworn in and assume his place at the dais following approval of the resolution.

Item Title: 4.1
Appointment of Ben Diederich as the District 2 Councilmember of the Menifee City Council Item Page Number: 1
Menifee Mayor and City Council
February 5, 2025
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City of Menifee Staff Report
Appointment of Ben Diederich
February 5, 2025

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STRATEGIC PLAN OBJECTIVE
Regular City Business

FISCAL IMPACT
There is no fiscal impact associated with the recommended action.

ATTACHMENTS

1. Resolution of Appointment
Item Title: 4.1
Appointment of Ben Diederich as the District 2 Councilmember of the Menifee City Council Item Page Number: 2
Menifee Mayor and City Council
February 5, 2025
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1 RESOLUTION NO. 25-____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA, APPOINTING BEN DIEDERICH TO THE OFFICE OF DISTRICT 2 COUNCILMEMBER PURSUANT TO GOVERNMENT CODE SECTION 34902, WHICH APPOINTMENT

SHALL BE EFFECTIVE IMMEDIATELY AND SHALL CONTINUE THROUGH THE CERTIFICATION OF THE NOVEMBER 2026 REGULAR MUNICIPAL ELECTION WHEREAS, in December 2022, Ricky Estrada was sworn in as the elected District 2 Councilmember of the City of Menifee, with a term scheduled to conclude with the certification of the November 2026 regular municipal election; and
WHEREAS, in December 2024, Ricky Estrada, was elected to the Office of the Mayor in the regular municipal election, creating a vacancy for District 2 on the City Council; and WHEREAS, Government Code section 34902, though written for the Office of the Mayor, applies to all vacancies, states "In the case of a vacancy in the office of the mayor for any reason, the council shall fill the vacancy by appointment. ... A person appointed or elected to fill a vacancy shall hold office for the unexpired term of the former incumbent”; and
WHEREAS, the City Council has resolved to discharge its obligation under Government Code section 34902 by appointing Ben Diederich to serve as District 2 Councilmember of the City of Menifee through the expiration of Ricky Estrada’s term in December 2026; and WHEREAS, Ben Diederich has expressed a willingness and desire to assume the District 2 Councilmember seat.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Menifee, California hereby to determine and order as follows:

Section 1.As authorized by Government Code section 34902, the City Council of the City of Menifee hereby selects Ben Diederich to fill the District 2 City Council vacancy.

Section 2.Ben Diederich has indicated his willingness and desire to assume the District 2 City Council seat commencing immediately and continuing through December 2026.

Section 3.The City Clerk is directed to administer the oath of office to Ben Diederich.

Section 4.Ben Diederich shall serve as District 2 Councilmember of the City of Menifee until the successful candidate for District 2 in the November 2026 election assumes office.

Item Title: 4.1
Appointment of Ben Diederich as the District 2 Councilmember of the Menifee City Council Item Page Number: 1
Menifee Mayor and City Council
February 5, 2025
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Appointment of Ben Diederich for City Council District 2 2 PASSED, APPROVED AND ADOPTED this 5th day of February 2025. ___________________________
Ricky Estrada, Mayor
Attest:
___________________________
Stephanie Roseen, City Clerk
Approved as to form:
___________________________
Jeffrey T. Melching, City Attorney
Item Title: 4.1
Appointment of Ben Diederich as the District 2 Councilmember of the Menifee City Council Item Page Number: 2
Menifee Mayor and City Council
February 5, 2025
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City of Menifee Staff Report
Fiscal Year 2024/25 Mid-year Budget Adjustments and Review, Including a CIP Status Update February 5, 2025

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Description Anticipated Timeline
Mid-Cycle Review (FY 2024/25): Comprehensive review of ending year 1 (FY 2023/24), and adjustments for Year 2 (FY 2024/25).

June 2024
Year 2 Mid-Year Review (FY 2024/25): Comprehensive review of year-to-date actuals for expenditures & revenues, and projected rest of the fiscal year.

February 2025
FY 2024/25 represents the second year of the current FY 2023/24 & 2024/25 biennial budget cycle. A Mid-Cycle budget review was completed in the spring of 2024 and adjustments adopted in June in preparation for the beginning of FY 2024/25.

The FY 2024/25 Mid-Year budget review is presented to the City Council as an opportunity for the City Manager and the Finance Department to:

1. Provide an overall update of the City’s budget year underway.

2. Present any additional necessary budget adjustments identified during the Mid-year review process for City Council’s consideration and approval.

3. Update City Council on the Capital Improvement Program (CIP).

Executive Summary of 2024/25 Mid-Year Review:

In closing out FY 2023/24, the City completed the year in a fiscally strong position, with the addition of some key one-time revenues and operational savings supporting long-term financial management efforts. The City looks to strategically balance the needs and service demands of the community in the present, and financially situate the agency for future needs, including but not limited to service increases, new programs, and investment in capital infrastructure. As reviewed during the FY 2023/24 Mid-year process and through the end of the fiscal year, like other agencies, Menifee has experienced some leveling in growth of some of its principal revenue sources, including development revenue and sales tax. Continuing through the first half of the current year, and examining adjustments for the balance of the year, the City’s approach maintains a conservative method, with recommendations focused on required or priority-based items.

Operating Budget:
(Current Adjusted Budget FY 2024/25 $129,206,762/ Proposed Mid-Year Adjustments $2,390,904)
Overall performance through the first half of the fiscal year is generally meeting budgeted expectations, but there are some operational matters that will be presented for Council’s consideration and there are some variances in several City funds that should be addressed to keep the budget in alignment through the end of the fiscal year, and to place the City in the best possible position for the upcoming budget cycle. Corresponding budget appropriations to the General Fund and other funds are summarized on the following page (Table 2) and detailed in other sections of the report.

Capital Budget:
(Current Adjusted Budget FY 2024/25 $90,883,634/Proposed Mid-Year Adjustments:
$1,600,000)
Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 1
Menifee Mayor and City Council
February 5, 2025
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City of Menifee Staff Report
Fiscal Year 2024/25 Mid-year Budget Adjustments and Review, Including a CIP Status Update February 5, 2025

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The City’s Capital Budget (CIP) continues to concentrate on moving the City’s infrastructure needs to fruition. In the first half of FY 2024/25, the City officially opened two (2) of its highest priority infrastructure projects, with the Holland Overpass officially opening October 2024 and the new Quail Valley Fire Station #5 opened in December 2024. Together these two projects represent an approximate $49 million investment towards improving accessibility, mobility and safety of the Menifee community. Proposed FY 2024/25 Mid-year adjustment requests of $1.6 million are for two (2) construction ready projects (Paloma Wash Pedestrian Bridge and the Menifee Road/Fire Station #76 Entrance Traffic Signal project) needing additional funding based on overall increased project costs. Details of the current CIP and requests are included within the CIP Review & Update of this report.

TABLE 2: FY 2024/25 CITYWIDE EXPENDITURE BUDGET
Category
FY2024/25
Adjusted
Budget ($)
% of
Citywide
Budget
FY2024/25 Mid-
Year Adjustment
Recommendations
Total
Proposed
FY2024/25
Adjusted
Budget
% of
Citywide
Budget
$100,680,527 Operating Budget:
(General Fund & Quality of Life)
$100,317,600 45.58% $362,928

44.93%
30,917,138Operating Budget:
(ISFs, Special Revenue & Other)
28,889,162 13.13% 2,027,976

13.80%
Total Operating Budget: $129,206,762 58.71% $2,390,904 $131,597,665 58.73% 27,126,463 12.33% $1,600,000 $28,726,463 12.82%CIP Program (General Fund & Quality of Life)
63,757,171 28.97% 0 63,757,171 28.45%CIP Program
(ISFs, Special Revenue & Other)
Total CIP Budget: $90,883,634 41.29% $1,600,000 $92,483,634 41.27% TOTAL $220,090,396 100.00% $3,990,904 $224,081,299 100.00% In summary, for the Citywide Budget (represented by the Operating and Capital budgets combined) the City’s Executive Office’s (CEO) Mid-year recommendations include a recommended increase in total revenue appropriations of $7,360,222 across all funds and an increase in total expenditure appropriations of $3,990,904. The Citywide Budget, as adopted, does not include Bonded Community Facilities Districts (CFDs) for Infrastructure or the corresponding Fiduciary funds, as these funds are managed and used exclusively for the purpose of the CFD bond issuance, administration, reimbursements, and debt service payments. Mid-year budget adjustments for these funds are discussed in a separate section of the staff report.

The CEO’s request includes an increase in revenue of $3,857,537 for General Fund, $50,000 for Quality of Life, $1,665,300 related to the Internal Service Funds (ISF) (representing a matching revenue transfer from General Fund to ISF for building and copier/printer leasing costs), and $1,787,385 for Special Revenue & Other Funds for a total increase of $7,360,222.

On the personnel/staffing side, FY 2024/25 Mid-year includes requests for two full-time positions, defunding of one vacant position, and four position reclassifications. Staffing requests include:

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 2
Menifee Mayor and City Council
February 5, 2025
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City of Menifee Staff Report
Fiscal Year 2024/25 Mid-year Budget Adjustments and Review, Including a CIP Status Update February 5, 2025

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- 2 new personnel requests: Community Services Director and Management Analyst I (Engineering Division)
- Defunding of one (1) full-time vacant position, Assistant to the City Manager - 4 reclassification requests (Public Works/Engineering, Information Technology (IT), and Code Enforcement)
Specific to the General Fund and Quality of Life Fund, expenditure appropriations for the proposed FY 2024/25 Mid-year recommendations includes requests to be funded from available excess fund balance for Quality of Life recommendations in the amount of $1,600,000. For operational requests, funding would be from ongoing revenue in the amount of $359,395 for the General Fund and expenditure appropriations in the amount of $3,532 for the Quality of Life Fund.

Other operational adjustments, such as additional support services, were reviewed and analyzed and will be absorbed within the current year budget through operational savings.

The recommended use of Quality of Life funds was presented at the Quality of Life Committee meeting on January 23, 2025. The Committee reviewed the presented use of available funds and made a motion to recommend the use of funds as presented.

Internal Service Funds that serve to assist all City departments, including Facilities and IT, incorporate recommended expenditure appropriations in the amount of $1,665,199. This amount is primarily composed of the transfer of printer/copier leases and building lease expenditures within the respective ISF, instead of the General Fund, for management purposes. While the transfers technically result in increased appropriations to the ISF funds, overall costs for these leases will not increase. Budget and expenses previously budgeted under the General Fund will now be transferred into the respective ISF fund. There are also some IT and/or Facilities related capital outlays and/or operating appropriations estimated at $92k.

Other revenue sources and Special Revenue sources, such as Development Impact Fees (DIF), have also been reviewed for year-to-date actuals. Additionally, actual tax roll assessments/enrollments were reviewed for County Service Areas (CSAs), Lighting & Landscape Maintenance Districts (LLMDs), and Community Facilities Districts (CFDs) charges. The CEO’s Mid-year recommendations for Special Revenue Funds include expenditure appropriations requests of $362,777 to cover some additional citywide road striping, park sod replacement, additional landscape maintenance area costs, and adjustments in projected utility costs in various special districts (LLMDs, CFDs).

The following table summarizes the recommended adjustments by fund type:

TABLE 3: SUMMARY OF MID-YEAR RECOMMENDED APPROPRIATIONS BY FUNDING SOURCE
Summary of Mid-year Appropriation Adjustments by Fund (Revenues) Fund Type Adopted
Budget
FY 2024/25
Adjusted
Budget
FY 2024/25(1)
Mid-year
Adjustments
Recommended
Adjusted Budget with
Mid-year Requests
FY 2024/25
General Fund $73,083,894 $75,984,806 $3,857,537 $79,842,343 Quality of Life 21,584,750 20,851,000 50,000 20,901,000 General Fund TOTAL: $94,668,644 $96,835,806 $3,907,537 $100,743,343 Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 3
Menifee Mayor and City Council
February 5, 2025
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City of Menifee Staff Report
Fiscal Year 2024/25 Mid-year Budget Adjustments and Review, Including a CIP Status Update February 5, 2025

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Internal Service Funds
(ISFs)
9,308,685 9,187,087 1,665,300 $10,852,387
All Other Special
Revenue Funds
28,539,986 48,813,750 1,787,385 50,601,134
All Funds Total: $132,517,315 $154,836,642 $7,360,222 $162,196,864 Summary of Mid-year Appropriation Adjustments by Fund (Expenditures) Fund Type Adopted
Budget
FY 2024/25
Adjusted
Budget
FY 2024/25(1)
Mid-year
Adjustments
Recommended
Adjusted Budget with
Mid-year Requests
FY 2024/25
General Fund $73,083,894 $90,939,280 $359,395 $91,298,675 Quality of Life 21,584,750 36,504,783 1,603,532 38,108,315 General Fund TOTAL: $94,668,644 $127,444,063 $1,962,928 $129,406,990 Internal Service Funds
(ISFs)
9,308,684 10,329,801 $1,665,199 $11,995,000
All Other Special
Revenue Funds
26,805,153 82,316,532 362,777 82,679,309
All Funds Total: $130,782,481 $220,090,396 $3,990,904 $224,081,299 (1)See Attachment 1: Listing of FY 2024/25 Budget Amendment Resolutions (BARs) Items through February 1, 2025, to see detail of budget adjustments (carryovers and new appropriations).

The Adjusted Citywide Budget includes the one-time use of available fund balance, primarily for CIP projects carried over from the prior year(s). Use of available fund balance does not use any City Reserve Funds.

In addition to the Citywide Budget represented above, the following adjustments for the City’s bonded Community Facilities Districts (CFD) (Infrastructure) and Fiduciary Funds are requested; revenue appropriations in the amount of $28,487,120 and expenditure appropriations in the amount of $21,463,689 to reflect recent CFD bond issuances.

Adopted Citywide Budget vs. Adjusted Citywide Budget (Summary of Adjustments) as of February 1, 2025
The adopted Citywide Fiscal Year 2024/25 budget totaled $132,517,315 in revenue and $130,782,481 in expenditures for all funds, excluding Fiduciary Funds, and supported 330.4 (302 full-time and 28.4 part-time) positions. The City’s General Fund total adopted budget, inclusive of Quality of Life Measure, totaled projected revenues of $94,668,644 and total projected expenditures of $94,668,644, resulting in a balanced operating budget.

The Adopted Budget is adjusted throughout the biennial period by including appropriations that are carried forward from the prior fiscal year for projects that were planned for and authorized by the City Council, however, not fully completed. In addition, throughout the year and at Mid-Cycle the City Council approves adjustments to the Adopted Budget in separate City Council action agenda items. The summary of total revenue adjustments through February 1, 2025, totals $22,319,327, and the expenditure adjustments through February 1, 2025, totals $89,307,915, which is comprised of the following:

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 4
Menifee Mayor and City Council
February 5, 2025
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City of Menifee Staff Report
Fiscal Year 2024/25 Mid-year Budget Adjustments and Review, Including a CIP Status Update February 5, 2025

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TABLE 4: FY 2024/25 CITYWIDE BUDGET ADJUSTMENTS THRU FEBRUARY 1, 2025 Description Revenue Expenditures
FY 2023/24 Carryover Appropriations $18,305,035 $46,291,135 FY 2023/24 Carryovers Purchase Orders 0 35,769,440
FY 2024/25 Mid-Cycle Budget Resolution 2,360,523 5,271,555 FY 2024/25 Additional Budget Resolutions 1,653,769 1,975,784 TOTAL $22,319,327 $89,307,915
Since June 5, 2024, staff presented 14 staff reports (Attachment 1), including Mid-Cycle, requesting to increase revenues and expenditure appropriations in the General Fund, Quality of Life, and/or other Special Revenues. Additionally, pursuant to the adopted budget policy, eligible existing encumbrances, CIP budgets, grants and capital outlays/projects have been carried forward under City Manager approval.

Current Economic Outlook (National, State, Regional & Local) & Revenue Analysis The FY 2024/25 budget as adopted in June 2023, incorporated a 2-year budget with anticipated steady growth across its principal revenues. As the City continues to grow, development related revenue, property tax, and sales tax revenue have steadily increased year-over-year. However, against a national financial background of higher interest rates influenced by the Federal Reserve’s efforts to rein in inflation, the City’s principal revenues, from development to sales activity, have overall experienced a flattening in growth. In the first half of the current year, the City’s primary revenues (sales tax, property tax, and development related fees) have all experienced modest to little growth overall. As the overall economy appears to move more into the “soft landing” scenario of slow growth, there are some positive economic signs, as well as many economic uncertainties. On the inflation side, the peak rates of 9.1% (nationally) and 8.3% (California) experienced in June 2022, were at 2.6% and 2.5% respectively by October 2024.

Residential permits activity experienced a decline as construction loans are now more expensive.

Nationally, the overall economy experienced an average growth of 3.1% in real Gross Domestic Product (GDP) during the first three quarters of 2024 but is anticipated to slow to approximately 2% during the first half of 2025. Continued elevated interest rates have also slowed spending.

With new national policy goals on the immediate horizon, including those related to trade, there is uncertainty of how these will impact inflation and the economy at large.

State-wide, California’s GDP and labor market have grown in the past year, but this growth is not expected to last. In development of its upcoming state budget, there is consensus that the state economy will experience a continued economic slow-down through the balance of 2025. Overall projections indicate a generally weaker economy through 2025 and into the foreseeable future.

As the City moves through the second half of the current fiscal year, overall recommendations for adjustments are fiscally conservative. Within the City of Menifee, development activity during the first half of the fiscal year has been in line with projections. It is important to note that overall activity reflects a modest growth pattern, similar to the overall national and state economies.

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 5
Menifee Mayor and City Council
February 5, 2025
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City of Menifee Staff Report
Fiscal Year 2024/25 Mid-year Budget Adjustments and Review, Including a CIP Status Update February 5, 2025

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The City’s top six budgeted revenue sources for the General Fund, inclusive of Quality of Life (Measure DD) are listed in the table below. Together, these six (6) revenues sources represent

90.8% of the budgeted General Fund revenues, including Quality of Life, as adopted in June 2023.

TABLE 5: TOP 6 CITY REVENUES
Revenue Description Mid-year Review/Analysis & Recommendations

1. Sales Tax In the first half of FY 2024/25 sales tax revenue maintained slow growth, similar to the prior year,
excluding 1x revenue receipts associated with the Nova
Park Battery Storage Project collected in FY 2023/24.

The adopted budget for FY 2024/25 was revised
downward at Mid-cycle to reflect this slower growth. Year- to-date actuals reflect revenues in alignment with the Mid- cycle adjusted budget. Recommendation for balance of
the year includes No Mid-year adjustments.

2. Quality of Life (Measure DD) In the first half of FY 2024/25 sales tax revenue maintained slow growth, similar to the prior year,
excluding 1x revenue receipts associated with the Nova
Park Battery Storage Project collected in FY 2023/24.

3. Property Tax HdL projections received in January 2025 indicate property tax revenue is expected to meet adopted budget numbers. Compared to FY 2023/24, the taxable
assessed value has increased by 8.5%. During the Mid-
cycle budget process, property tax was projected to
remain in line with the adopted budget. Current
projections for the balance of the year are expected to meet the adjusted budget. Recommendation for balance
of the year includes No Mid-year adjustments.

4. Building/Planning/Engineering/Fire
Fees (Development Fees)
In line with FY 2023/24, in the first half of FY 2024/25 activity has overall experienced consistent growth as
budgeted (Building & Safety, Planning, Engineering and
Fire). Recommendation for balance of the year includes
No Mid-year adjustments.

5. Vehicle License Fee (VLF) Revised HdL projections reflect VLF revenue expected to meet adopted budget projections. Recommendation for
balance of the year includes No Mid-year adjustments.

6. Franchise Fees Solid Waste Franchise Fees received for the first 1st quarter of FY 2024/25 are trending higher than originally forecast. Other franchise revenues (gas and electricity) are collected later in the year. Cable TV franchise
revenues are trending slightly lower than the projected monthly average. Recommendation for balance of the
year includes No Mid-year adjustments.

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 6
Menifee Mayor and City Council
February 5, 2025
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City of Menifee Staff Report
Fiscal Year 2024/25 Mid-year Budget Adjustments and Review, Including a CIP Status Update February 5, 2025

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Economic conditions will continue to be closely monitored and factored in during the development of the next biennial budget scheduled to be presented for adoption in June 2025. The following table provides an overall summary of some of the Key Economic Indicators incorporated as part of the Mid-year review process.

TABLE 6: SUMMARY OF KEY ECONOMIC INDICATORS (NATIONAL, STATE, LOCAL) Indicator
(Positive or Negative)
National State Regional/Local
GDP ( ) 3.1% (Nov. 2024)

2.1% Forecast for 2025

3.1% (Nov. 2024) ---
Unemployment (+) 4.2% (Nov. 2024) 5.4% (Nov. 2024) 5.4% (Nov. 2024) Inflation ( )

3.1% (Oct. 2023)/

2.6% (Oct. 2024)

3.2% (Oct. 2023)/

2.5% (Oct. 2024)

4.3% (Nov. 2023)/

1.1% (Nov. 2024)
Residential Permits
( )

0.2% decrease from
Nov. 2023 to Nov. 2024

13.5% decrease from Nov.
2023 to Nov. 2024
(SFR increase of 5.4% over
prior year, and MFR 23.9%
decrease over prior year)
---
Note: Sources include, UCLA Economic Forecast (December 2024), State of CA Budget 2024 (January 2025), U.S.

Census Bureau and U.S. Department of Housing and Urban Development Monthly New Residential Construction (December 2024)., California Department of Finance Economic Update (December 2024), HdL January 2025 Property Tax and Sales Tax projections.

General Fund & Quality of Life Funds (Mid-year Budget Adjustment Recommendations) The following tables (Table 7 and Table 8) depict the recommended revenue and expenditure adjustments by category within the General Fund and Quality of Life.

TABLE 7: FY 2024/25 MID-YEAR ADJUSTMENT RECOMMENDATIONS (GENERAL FUND) General Operating & Capital Budget Year-to-Date (YTD) & Fund Balance Fund Type
Adopted
Budget
FY 2024/25
Adjusted
Budget
FY 2024/25
Mid-year
Adjustments
Recommended
Adjusted FY
2024/25
Budget with
Mid-year
Adjustments
YTD Actuals
FY 2024/25
as of
1/20/2025
Percentage
(%) YTD to
Current
Adjusted
Budget

Revenue:

Sales Tax $13,469,380 $12,592,390 $- $12,592,390 $3,975,921 31.57% Property Tax 22,801,919 22,801,919 - 22,801,919 8,646,627 37.92% Development Fees 13,070,624 13,838,320 - 13,838,320 6,137,682 44.35% Vehicle License Fee 11,141,656 11,210,112 - 11,210,112 - 0.00% Franchise Fees 5,055,000 5,487,753 - 5,487,753 729,498 13.29% Other 7,535,315 10,044,312 3,857,537 13,911,849 6,955,585 69.25% Total Revenue $73,073,894 $75,974,806 $3,857,537 $79,842,343 $26,445,313 34.81%

Expenditures:

Personnel $33,360,062 $33,696,617 $175,331 $33,871,948 $16,446,108 48.55% Operating Expenses 30,798,573 36,923,060 129,064 37,052,124 9,506,848 25.66% Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 7
Menifee Mayor and City Council
February 5, 2025
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Capital Outlays - 176,000 - 176,000 - 0.00%
Transfers &
Allocations
8,875,259 8,711,259 55,000 8,766,259 - 0.00%
Capital Projects (CIP) 50,000 11,432,344 - 11,432,344 1,377,986 12.05% Debt - - - - - 0.00% Total
Expenditures $73,083,894 $90,939,280 $359,395 $91,298,675 $27,330,942 30.05% The Quality of Life recommended Mid-year revenue increase is $50,000, for a total revised revenue budget of $20,901,000, and a recommended $1,603,532 increase in expenditure appropriations for a revised expenditure budget of $38,108,315 from the FY 2024/25 Adjusted Budget (Current).

TABLE 8: FY 2024/25 MID-YEAR ADJUSTMENT RECOMMENDATIONS (QUALITY OF LIFE) Quality of Life Operating & Capital Budget Year-to-Date (YTD) & Fund Balance Fund Type
Adopted
Budget
FY 2024/25
Adjusted
Budget
FY 2024/25
Mid-year
Adjustments
Recommended
Adjusted
Budget with
FY 2024/25
Mid-year
Adjustments
YTD
Actuals
FY 2024/25
as of
1/20/2025
Percentage
(%) YTD to
Current
Adjusted
Budget

Revenue:

Sales Tax(1) $21,449,750 $20,451,000 $- $20,451,000 $6,395,343 31.27% Interest 135,000 400,000 50,000 450,000 158,887 33.16% Total Revenue $21,584,750 $20,851,000 $50,000 $20,901,000 $6,544,231 31.31%

Expenditures:

Personnel $7,138,783 $7,138,783 $3,532 $7,142,315 $3,386,156 48.81% Operating Expenses 14,049,927 13,671,881 - 13,671,881 1,034,003 25.75% Capital Outlays - - - - - 0.00%
Transfers & Allocations - - - - - 0.00%
Capital Projects (CIP) 396,040 15,694,119 1,600,000 17,294,119 7,346,437 12.05% Debt - - - - - 0.00%
Total
Expenditures
$21,584,750 $36,504,783 $1,603,532 $38,108,315 $11,766,597 29.94% (1) Reflects revenues collected through October 2024.

Revenue Adjustments
Based on the revenue analysis discussed in the preceding section relative to the City’s top six (6) revenue sources, no budget adjustments are recommended. However, staff is recommending the following adjustments to revenue for the General Fund and Quality of Life Funds, reflected in the table on the following page (Table 9), related to increased interest earnings from investments.

The General Fund recommended Mid-year budget for FY 2024/25 includes a revenue adjustment increase of $600,000 in interest revenue due higher than projected interest earnings and an increase of $3,257,537 in fiscal impact fees collected for the Rockport Ranch development. These Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 8
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February 5, 2025
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fees will be restricted in use to a CIP project due to the source from CFD financed one-time money. Quality of Life revenue adjustments include $50,000 for higher interest earnings.

TABLE 9: FY 2024/25 MID-YEAR GENERAL FUND & QUALITY OF LIFE REVENUE

PROPOSED REVENUE ADJUSTMENTS
No. Fund Description FY 2024/25 Mid-
year Revenue
Adjustment
Amount ($)
Justification
1 General Fund Interest Income $600,000 Higher interest revenue receipts based on YTD actuals.
2 General Fund Fiscal Impact
Fees
3,257,537 One time fiscal impact fee collected
for Rockport Ranch development
which is CFD financed and must be
used for capital project(s).
3 Quality of Life Interest Income 50,000 Higher interest revenue receipts based on YTD actuals.

TOTAL: $3,907,537
Expenditure Analysis & Adjustments:

General Fund expenditure appropriation requests total $359,395 and are all related to operating budget requests. Quality of Life includes a small operating appropriation request of $3,532 related to the personnel request described in the following section.

Overall, budgetary expenditures within the General Fund, including Quality of Life, are in line with their original budget projections. Mid-year appropriation requests are primarily reflective of critical positions needed for ongoing operations and increases in insurance premiums.

Personnel Mid-year Requests:

Personnel expenditures year-to-date actuals are 48.6% of the Adjusted Budget for General Fund and Quality of Life.

The FY 2024/25 Adjusted Budget currently includes a total of 332.5 full-time equivalent (FTE) personnel as compared to the originally adopted workforce of 330.4 FTEs. As part of the Mid-year process, departments reviewed organizational structure and operations to identify critical staffing needs. Staff is requesting approval of the following: addition of two (2) new positions, defunding of one (1) vacant position, reclassification of four (4) positions, and an increase to the part-time budget to account for the state-wide increase of minimum wage and to update hourly wage rates for part-time classification to address pay compaction. If the FY 2024/25 Mid-year personnel requests are approved, the updated personnel total will be 333.5, 303 full-time and 30.5 part-time FTEs.

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 9
Menifee Mayor and City Council
February 5, 2025
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TABLE 10: FY 2024/25 MID-YEAR PERSONNEL REQUESTS (ALL FUNDS) No. Department Position Title
FY 2024/25
Mid-year
Appropriation
Request (1)
Funding
Source Justification
1 City Executive
Office
Assistant to the City
Manager (Vacant)
($75,025) General Fund Operational Need – Based
on current needs, to help
offset the costs of the
Community Services
Director position and the
high priority need for that
position, this vacant position
will be defunded.

Full year cost FY 2025/26:
$225,074.
2 Community
Services
Department
Community Services
Director
$113,052 General Fund Operational Need –
Community Services
Department existing and
future operations require
dedicated executive
position.

Full year cost FY 2025/26:
$341,745.
3 Public Works &
Engineering –
Engineering
Division
Management
Analyst I

$61,502
General Fund Operational Need – To
reduce the time in
processing developer
applications and
reimbursements (revenue),
in addition to assisting the
Financial Analyst with staff
reports and all other
Engineering administrative
analysis.

Full year cost FY 2025/26:
$158,529.
4 Community
Services
Part-time staff 65,100 General Fund The minimum wage
increase as of 1/1/25 will
increase PT wages and
funds will also be needed to
address pay compactions.
5 Public Works &
Engineering –
CIP Division
Management
Analyst II
(Reclassification from
Management Analyst I)
3,899 General Fund Operational Need - Align
position with current
function/assignments and
overall department
organization.

Full year cost FY 2025/26:
$11,696.
6 Menifee Police
Department –
Code Enforcement
Division
Code Enforcement
Technician
(Reclassification from
Office Specialist II)
6,390 General Fund Operational Need – Align
position with current
function/assignments and
overall department
organization.

Full year cost FY 2025/26:
$19,170.

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 10
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February 5, 2025
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No. Department Position Title
FY 2024/25
Mid-year
Appropriation
Request (1)
Funding
Source Justification
7 Menifee Police
Department –
Code Enforcement
Division
Code Enforcement
Manager
(Reclassification from
Code Enforcement
Supervisor)
3,533 Quality of Life
Fund
Operational Need – Align
position with current
function/assignments and
overall department
organization.

Full year cost FY 2025/26:
$10,597.
8 Information
Technology
IT Analyst (GIS)
(Reclassification from GIS
Technician)
5,699 Information
Technology
ISF
Operational Need – Align
position with current
function/assignments and
overall department.

Full year cost FY 2025/26:
$17,097.

TOTAL $184,564
(1) Prorated to begin 3/1/2025, 4 months.

Other Personnel Adjustments:

Other personnel adjustments were reviewed and analyzed and will be absorbed within the current year’s budget through salary savings. Of note, all pay updates resulting from changes to the updated Memorandums of Understanding (MOUs) will be covered through salary savings for the remainder of the fiscal year.

Operations & Maintenance Mid-year Requests:

Expenditures year-to-date are trending within budget. Operations and maintenance expenditures year-to-date are 25.7% of the adjusted budget for General Fund and Quality of Life. Larger expenses, such as Dispatch Services and Fire Services are expected to be received later in the fiscal year and are therefore not yet realized. The following requests from the General Fund will be funded as ongoing expenses offset through the overall increases in interest revenue. There are no appropriation requests for operations and maintenance expenditures from the Quality of Life fund.

TABLE 11: FY 2024/25 MID-YEAR OPERATIONS & MAINTENANCE REQUESTS No. Department Description
Increase/
(Decrease) Justification
1 Human Resources –
Risk Management
Division
Insurance Premium –
Worker’s Compensation
$56,277 Increase from insurance
premium beyond latest CIRA
estimate.
2 Community
Development –
CDBG Division
Neighborly software 20,100 Software to streamline CDBG
program management.
3 Menifee Police
Department
4 Flock Condor Solar
Cameras and software
agreement
23,000 Cameras to monitor locations
in public places that cannot be
hardwired.
4 Information
Technology
Monsido / Acquia
Optimize software
platform
9,400 Site scanning software to
assist in maintaining ADA
compliance.

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 11
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February 5, 2025
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No. Department Description
Increase/
(Decrease) Justification
5 Information
Technology
Accela & Bluebeam
license upgrade
14,000 Upgrade the license of
development software as part
of a future integration project.
6 Information
Technology
ArchiveSocial software 6,287 Archive all City's social media posts.
7 Community Services Special District (LLMD 89-
1) Water-ROW increase
55,000 General Fund transfer to
LLMD Fund 2370 and 2374
which do not have enough
funds to cover overages in
water utility bills.

TOTAL $184,064
Other Operational Adjustments:

Other operational adjustments were reviewed and analyzed and will be absorbed within the current year’s budget through savings.

Capital Outlay Mid-year Requests:

Capital Outlay year-to-date expenditure actuals are 0.0% of the Adjusted Budget for General Fund and Quality of Life. Larger capital outlays, such as vehicle purchases, continue to see delayed realization of expenditures due to supply shortages. There are no appropriation requests from the General Fund or Quality of Life Fund as part of the FY 2024/25 Mid-year review.

ISFs, Special Revenue & Other Funds (Mid-year Budget Recommendations) Other recommended ISF, Special Revenue, and Other Funds adjustments for the FY 2024/25 Mid-year budget include increases of $3,452,652 in revenues and $2,027,976 in additional expenditure appropriations. The expenditure appropriation requests include the following:

1.ISFs - $1,665,199: Additional appropriations of $35,000 for ADA Compliance Study Phase II, E-waste storage containers ($13,000), transfer of building and copier leases from General Fund to the respective ISF fund for budget management purposes ($1.5 million), and reclassification of one existing personnel, GIS Analyst ($5,699). Other appropriations include furniture replacement costs for Code Enforcement ($20,000), purchase and installation of an AC unit for the server room in the PD Headquarters ($8,500), and ADA compliant swing door at the PD headquarters.

2.CFD/LLMDs/CSAs - $256,637: Various increases in operational costs, including sod replacement, additional landscape/park maintenance responsibilities, road striping and markings, increased utility costs and updated administrative costs.

3.Other Special Revenues - $106,140: $35,000 in CDBG Minor Home Repair Program to reflect final and increased HUD FY 2024/25 allocations, and $71,000 in Gas Tax to be used for citywide road striping efforts.

With respect to recommended revenue adjustment increases, the largest increases are represented by the following:

1. Corresponding increase of TUMF related reimbursements totaling $1,158,298 that are due to the City, and will be collected for previous CIP project expenditures; and

2. Increased interest revenue based on year-to-date actuals and trends.

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 12
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February 5, 2025
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The following table details the various recommended adjustments (revenues and expenditure appropriations) for the Special Revenue and Other Funds:

TABLE 12: FY 2024/25 MID-YEAR ADJUSTMENT RECOMMENDATIONS (SPECIAL REVENUE & OTHER FUNDS)
Fund Category Type
Revenue
Adjustment ($)
Expenditure
Adjustment ($) Justification/Explanation
Internal Service
Funds (ISF)
$1,665,300 $1,665,199 -Higher interest revenue receipts based on YTD actuals.
- Appropriation for ADA Compliance Study
Phase II to pay consultant to lead and address
ADA website compliance issues for City-
owned websites.
- Additional appropriation to purchase new
furniture for Code Enforcement division.
- Transfer to Facility and IT ISFs of printers
and building leases.

Gas Tax & Other
Special Revenue
Funds
1,349,233 106,140 Corresponding carryovers of TUMF related revenues to align with previously carried over
expenditures (budget and encumbrances).

Higher interest revenue receipts based on YTD
actuals.

LLMD Funds 124,000 92,035 Higher interest revenue receipts based on YTD actuals.

Additional appropriations in several special
districts for higher YTD actuals on utilities.

CFD Funds
(Maintenance)
135,152 142,340 Higher interest revenue receipts based on YTD actuals.

Additional appropriations in several special
districts for higher YTD actual operating
expenses.

CSA Funds 14,000 22,262 Higher interest revenue receipts based on YTD actuals. Additional road striping/marking.

DIF/Quimby/RBBD
Funds
141,000 - Overall YTD actuals revenues are trending
higher than budgeted.

Debt Service 24,000 - Higher interest revenue receipts based on YTD actuals.

TOTAL: $3,452,685 $2,027,976
Capital Improvement Program (CIP) Review & Update:

At budget adoption in June 2023, the FY 2024/25 CIP included new funding totaling $12,352,212 for twenty-one (21) existing and new projects. As part of the Mid-Cycle adoption an additional eight (8) projects were added, including two (2) unfunded projects. At Mid-Cycle the FY 2024/25 CIP was updated to include 27 funded projects with a budget of $15,577,212. As many of the CIP projects are complex multi-year projects spanning across fiscal years, each year remaining funding of previously approved CIP projects is carried forward into subsequent years until project completion. Carried over project budgets are added to the current year’s adopted budget, along with any additional appropriation/changes that transpire during the year to produce the current Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 13
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February 5, 2025
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and Adjusted CIP budget. The FY2024/25 Adjusted CIP budget as of 2/1/2025 represents approximately 84 active and funded projects.

In summary, the following updates occurred from July 2024 through February 2025 (prior to the FY 2024/25 Mid-year requests):
- Budget carryovers of $78,438,922 (encumbrances and appropriated budget) for previously approved CIP projects underway.
- Mid-Cycle appropriations of $500,000 for two (2) CIP projects, $250,000 for the ADA Transition Plan and $250,000 for the PMP Plan Update
- Additional budget appropriation totaling $92,500, for the Menifee Road Resurfacing - Aldergate Drive to McCall Boulevard Project (CIP 24-21) FY 2024/25 Mid-year CIP Requests:

There is an appropriation request for $1,600,000 from Quality of Life funds to cover two CIP projects, $1,500,000 for the Paloma Wash Pedestrian Bridge (CIP 20-13) and $100,000 for the Menifee Rd./Fire Station No. 76 Traffic Signal (CIP 23-09). A summary of the adopted and adjusted CIP budget, including Mid-year requests, can be found below:

TABLE 13: FY 2024/25 ADOPTED vs. FY 2024/25 ADJUSTED BUDGET (CIP) UPDATE (Including FY 2024/25 Mid-year Requests)
No. Project Category
FY 2024/25 Adopted
Budget: Project Costs
FY 2024/25
Adjusted Budget:

Project Costs
1 Transportation(1) $2,859,237 $51,671,655
2 Traffic Signals(2) 1,378,094 3,092,264
3 Street Improvements 1,692,000 5,165,160
4 Pavement Management 4,132,000 9,333,654
5 Drainage 749,000 749,000
6 Streetlights - 51,067
7 Public Facilities 108,548 12,125,171
8 Parks, Trails and Recreation 1,200,000 9,539,313
9 Information Technology 233,333 756,612
Total $12,352,212 $92,483,634
(1) Includes the FY 2024/25 Mid-year request of $1,500,000 for CIP 20-13: Paloma Wash Pedestrian Bridge (2) Includes the FY 2024/25 Mid-year request of $100,000 for CIP 23-09: Menifee Rd./Fire Station No. 76 Traffic Signal.

In total, the FY 2024/25 CIP Budget, inclusive of: (1) the current year adopted budget funding, (2) additional appropriations requests since July 1, 2024, (3) Fiscal Year 2024/25 Mid-year requests discussed above, and prior year budget and encumbrance carryovers for ongoing projects will be $92,483,634.

Fund Balance Reserves and Assigned Fund Balances
As part of the FY 2024/25 Mid-Cycle budget review and adoption process the City reviewed its existing Fund Balance Policy. As part of this effort, the City revised its policy to incorporate the following updates, listed in order of funding priority:

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 14
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February 5, 2025
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1. Effective July 1, 2024, establish the General Fund reserve requirement at 40% of the adopted operating costs (Cash Flow/Emergency Reserves);

2. Incorporate dedicated Assigned Balances (Operating Costs Stabilization Fund Balances) to address larger capital outlay purchases and/or stabilize year over year operating costs increases in categories such as:
a. Fleet Replacement
b. Self-Insured Retention/Insurance Premiums Costs
c. Unfunded Pension Liability costs

3. Incorporate dedicated Assigned or City Council approved Committed Fund Balances for larger future capital projects (public facilities) (Capital Projects Committed/Assigned Fund Balance)
As previously indicated, from a financial standpoint in FY 2023/24 the City ended the year in a stable and positive position. From the revenue side, revenues within the General Fund and Quality of Life funds resulted in revenues exceeding the adjusted budget by just over $11 million. $8 million of the $11 million is represented by Sales Tax and Quality of Life revenue received from the construction of the Nova Park Battery Storage Project. On the expenditure side, one-time operational savings, principally derived from fire contract savings, dispatch contract savings, and other one-time operational savings resulted in approximately $8 million in savings from the adjusted budget.

With a robust CIP underway, excess Quality of Life funds are recommended to be immediately directed to active CIP projects. $1.6 million is recommended as part of the FY 2024/25 Mid-year recommendations, and the balance will be included as part of the upcoming biennial budget process as the CIP, including the 5 Year CIP Plan, is updated. Based on active project activity forecast for the upcoming fiscal year, staff anticipates recommendation of the full remaining balance to be included as part of the new budget cycle.

In accordance with the City Council approved Fund Balance Policy and, recognizing the one-time nature of the revenue and operational savings sources, the excess General Fund balance (beyond the established 40% Reserve Requirement) has been distributed amongst the following Assigned Fund Balance categories as follows:
-Fleet Replacement, $1 million. With several vehicles (Main City Hall and PD) requiring replacement in the near future, the City has established this assigned fund balance to help cover upcoming purchases.
-Self-Insured Retention/Insurance Premium Costs, $500,000. As the City’s services expand, the quantity/size of claims is anticipated to continue to grow. Insurance premiums have also experienced significant year-over-year increases and are forecast to continue to do so.
-Unfunded Pension Liability, $424,678. Realized budget savings from FY 2023/24 will be set aside to offset significant increases in future years, as the City continues to prioritize maintaining no outstanding Unfunded Pension Liability balance. -Public Facilities, $11.5 million. The City has identified several large public facilities projects including, but not limited to, a future City Hall, Police Headquarters/Public Works Yard, and Community Center which will require identifying a multi-year and various funding sources approach.

Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 15
Menifee Mayor and City Council
February 5, 2025
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Bonded CFDs: (Infrastructure) Funds and Fiduciary Funds Through its established CFD policy, the City works with developers on the formation and bond issuance of infrastructure CFDs used to finance eligible public improvements and/or fees. During the first half of FY 2024/25 the City completed several bond issuances for respective CFDs.

Specifically, CFD bond issuances completed after July 1, 2024, include CFD 2022-1, Series 2024 (Quartz Ranch) second bond issuance, and CFD 2023-1 (Rockport Ranch). These represent the bond proceeds which will be applied against eligible CFD reimbursements. It is important to note that the related debt is not an obligation of the City, but of the CFD and respective properties. The following adjustments for the bonded CFDs are requested:

TABLE 14: Bonded CFDs FY 2024/25 Mid-year Appropriation Requests Fund Category Type
Revenue
Adjustment ($)
Expenditure
Adjustment ($) Justification/Explanation
CFD Funds (Infrastructure) $25,909,503 $20,665,030 The majority of these adjustments are based on YTD
Actuals including higher interest
earnings as well as 2 bond
issuances (CFD proceeds) and
related costs.

CFD Funds (Fiduciary) 2,577,617 798,659 The majority of these adjustments are based on YTD
Actuals Including higher interest
earnings as well as 2 bond
issuances (CFD proceeds used
to establish Reserve
Requirement within the
Fiduciary Fund for term of CFD).

TOTAL $28,487,120 $21,463,689

STRATEGIC PLAN OBJECTIVE
Regular City Business
Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 16
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February 5, 2025
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FISCAL IMPACT
Summary of Revenue & Expenditures by Fund Type
Table 15 below provides an overall summary of all revenue and expenditure Mid-year adjustment requests by fund type and amount.

TABLE 15: FY 2024/25 MID-YEAR ADJUSTMENT RECOMMENDATIONS Fund Category
Proposed FY 2024/25
Revenue Adjustments
Proposed FY 2024/25
Expenditure Adjustments
General Fund $3,857,537 $359,395
Quality of Life Fund 50,000 1,603,532
Internal Service Funds (ISF) 1,665,300 1,665,199
Gas Tax & Other Special Revenue
Funds
1,349,233 106,140
LLMD Funds 124,000 92,035
CFD Funds (Maintenance) 135,152 142,340
CSA Funds 14,000 22,262
DIF/Quimby/RBBD Funds 141,000 -
Debt Service 24,000 -
Sub-Total Citywide Budget $7,360,222 $3,990,904
CFD Funds (Infrastructure) &
Fiduciary Funds
$28,662,120 $21,463,689
TOTAL ALL FUNDS $36,022,342 $25,454,593

ATTACHMENTS

1. FY 24/25 BARs & Carryover Item Summary

2. Resolution approving the Authorized Position Listing

3. Exhibit – Authorized Position Listing

4. Resolution - FY 2024/25 Mid-Year Adjustments
Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 17
Menifee Mayor and City Council
February 5, 2025
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Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 1
Menifee Mayor and City Council
February 5, 2025
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Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 3
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Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 7
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Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 8
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RESOLUTION NO. 25-____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE,

CALIFORNIA, ADOPTING THE CLASSIFICATION AND COMPENSATION PLAN FOR THE CITY OF MENIFEE FOR FISCAL YEAR 2024/25
WHEREAS, it is necessary to amend the City's Classification and Compensation plan from time to time to maintain a current plan which reflects the organizational structure, workload, or otherwise; and
WHEREAS, the Classification and Compensation Plan has been updated to reflect changes in the Fiscal Year 2024/25 Mid-Year Budget adjustments; and WHEREAS, the Classification and Compensation Plan, including the schedule of authorized positions, attached hereto, is hereby adopted pursuant to Section 45001 of the California Government Code; such list is attached to this Resolution as "Exhibit A" and incorporated herein by this reference; and
WHEREAS, the changes to the Classification and Compensation Plan as related to the budget require Council approval; and
WHEREAS, the Classification and Compensation Plan shall become effective February 5, 2025, and may be, thereafter, amended; and
WHEREAS, the City Manager shall implement the attached Classification and Compensation Plan and has the authority to select and appoint employees in accordance with the City's Personnel Rules and Regulations; and
WHEREAS, the City Manager In accordance with the City of Menifee Municipal Code Section 2.08.060(8), shall administer the City personnel system; this resolution specifically authorizes the City Manager to establish, fix and alter job classifications including titles, descriptions, compensation and number of positions in the Classification and Compensation Plan as needed, subject to the total personnel expenditure budget limitations approved by the City Council, and in accordance with the provisions of Gov. Code 3500 et. seq., if applicable; and WHEREAS, all prior resolutions and parts of this resolution in conflict with this resolution are hereby rescinded.

NOW, THEREFORE, BE IT RESOLVED that the City of Menifee, California, does hereby DETERMINE and ORDER as follows:

SECTION 1: The City Council hereby does adopt the Classification and Compensation Plan effective February 5, 2025 as presented herewith.

PASSED, APPROVED AND ADOPTED this 5th day of February, 2025.

Ricky Estrada, Mayor
Attest:

Stephanie Roseen, City Clerk
Approved as to form:

Jeffrey T. Melching, City Attorney
Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 2
Menifee Mayor and City Council
February 5, 2025
Page
35 of 42

RESOLUTION NO. 25-____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENIFEE, CALIFORNIA, AMENDING THE FISCAL YEAR 2024/25 OPERATING BUDGET
WHEREAS, the City of Menifee, California, adopted a budget for Fiscal Year 2023/24 and Fiscal Year 2024/25 with Resolution 23-1341 on June 21 st, 2023 and adopted the Fiscal Year 2024/25 Mid-Cycle Amended Budget with Resolution 24-1436 on June 5th, 2024 and WHEREAS, from time to time the City of Menifee receives unanticipated revenues, experiences unanticipated expenditures, and/or identifies alternative funding sources; and WHEREAS, it is in the best interest of the citizens of the City of Menifee to allocate budget resources to continue the operations of the City of Menifee; and WHEREAS, the City Council of the City of Menifee needs to amend the FY2024/25 budget as follows:

AMENDMENTS TO ADOPTED BUDGET:

1. Record Appropriation(s):

Increase FY 2024/25 Revenue Budget: $36,022,342

2. Record Appropriation(s):

Increase FY 2024/25 Expenditure Budget: $25,454,593

3. Record Transfer of Funds:

FROM ACCOUNT # TO ACCOUNT # AMOUNT
TOTAL: $0

CITY COUNCIL
MEETING DESCRIPTION ACCOUNT # AMOUNT
February 5, 2025
FY2024/25 Mid-year Budget
Adjustments Various $36,022,342
TOTAL: $36,022,342
CITY

COUNCIL

MEETING
DESCRIPTION ACCOUNT # AMOUNT
February 5, 2025
FY2024/25 Mid-year Budget
Adjustments Various $25,454,593
TOTAL: $25,454,593
Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 1
Menifee Mayor and City Council
February 5, 2025
Page
41 of 42

Amending the Fiscal Year 2024/25 Budget
FY 2024/25 Mid-year Budget Adjustments
2 4
7 6
3 1

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MENIFEE DOES HEREBY RESOLVE AS FOLLOWS:

The annual budget for the City of Menifee for FY 2024/25 is hereby increased and amended to reflect unanticipated revenues and expenditures as follows:

Fund Category FY 2024/25 Revenue
Adjustments
FY 2024/25 Expenditure
Adjustments
General Fund $ 3,857,537 $ 359,395 Quality of Life Fund 50,000 1,603,532 Internal Service Funds (ISF) 1,665,300 1,665,199 Gas Tax & Other Special Revenue Funds 1,349,233 106,140 LLMD Funds 124,000 92,035 CFD Funds (Maintenance) 135,152 142,340 CSA Funds 14,000 22,262 DIF/Quimby/RBBD Funds 141,000 - Debt Service 24,000 - Sub-Total Citywide Budget $7,360,222 $3,990,904

CFD Funds (Infrastructure) & Fiduciary Funds $28,662,120 $21,463,689 TOTAL ALL FUNDS $36,022,342 $25,454,593
Increase FY 2024/25 Revenue Budget $36,022,342 Increase FY 2024/25 Expenditure Budget $25,454,593 PASSED, APPROVED AND ADOPTED this 5th day of February, 2025. _____________________________
Ricky Estrada, Mayor
ATTEST: APPROVED AS TO FORM:
____________________________ ____________________________ Stephanie Roseen, City Clerk Jeffrey T. Melching, City Attorney Item Title: 4.2
Fiscal Year 2024/25 Mid-Year Budget Adjustments and Review, Including a Capital Improvement Program Status Update Item Page Number: 2
Menifee Mayor and City Council
February 5, 2025
Page
42 of 42

Menifee City CouncilFebruary 5, 2025

Menifee City Council
February 5, 2025