Financial Outlook
July 31, 2024
Received After Agenda Printed
7/31/2024 - Special Workshop
WORKSHOP - AGENDA ITEM WS3
Staff Presentation
• FY 2024/25 Budget Update (August 2024)
• FY 2024/25 First Quarter Budget Update (November 2024) • FY 2023/24 Year-End (4th Quarter) Budget Update (November 2024) • FY 2024/25 Mid-Year Budget Update (February 2025)
Future Budget Updates
Financial Outlook - January 24, 2024,Workshop
Debt Affordability Analysis
• City engaged Fieldman Rolapp & Associates, City’s
Financial Advisor
• Source of Information
• Debt Policy
• General Fund and Measure T funds Long-Term
Financial Forecast
• Development Impact Fees annual revenues
and fund balance
Available Revenue Sources
• Measure T Fund
• Development Impact Fee (DIF) Funds
• Fire DIF
• Law Enforcement DIF
• General Facility DIF
• Park DIF
Conclusion
• Limited debt capacity ≈ $30m
• $2m Debt Service payment capacity
• 30-year obligations
Financial Outlook – January 24, 2024,Workshop
Potential Impact
• Expenditures > Revenues
• No bond Debt Service capacity
• Planned Use of Fund Balance
• Balance Budget
• Operating Reserves ≈ 20%
General Fund Long-Term Financial Forecast
Financial Outlook – January 24, 2024,Workshop
Potential Impact
• Revenue > Expenditures $2m
• Planned contribution to Fund Balance
• Maintain Operating Reserves at 30%
Measure T Fund Long-Term Financial Forecast
Key Budget Drivers
Revenue • Economic Conditions/Inflation • Lower than anticipated • Sales Tax • Transient Occupancy Tax • Charges for Services • Property Transfers • Higher than anticipated • Investment Earnings Expenditures • Salaries and Benefits • MOU changes – All Groups • Pension Payments • New Positions Operating Costs • Rising Risk Insurance Costs • Services/Contracts – Cost increases • Equipment – New and replacements Current Capital Projects • Design Services • Construction • Land Value Financial Outlook – July 31, 2024
FY 2024/25 – General Fund and Measure T Fund
FY 2024/25
Adopted
Budget
Proposed
Adjustments
FY 2024/25
Proposed
Amended
Budget
Total Revenue $ 72,369,838 $ (2,927,225) $ 69,442,613
Total Expenditures $ 71,983,855 $ 4,905,767 $ 76,889,622 Contribution to/(Use of) Fund Balance $ 385,983 $ (7,832,992) $ (7,447,009)
GENERAL FUND
FY 2024/25
Adopted
Budget
Proposed
Adjustments
FY 2024/25
Proposed
Amended
Budget
Total Revenue $ 31,449,800 $ (2,371,807) $ 29,077,993
Total Expenditures $ 28,590,883 $ (379,726) $ 28,211,157 Contribution to/(Use of) Fund Balance $ 2,858,917 $ (1,992,082) $ 866,836
MEASURE T
Financial Outlook – July 31, 2024
FY 2024/25 – General Fund and Measure T Fund
General Fund
• Structural Deficit
• Expenditures > Revenues $7.4m
• CIP Commitment $2.0m
• No bond Debt Service capacity
• Enhance Revenue
• Implement cost-cutting measures
• Planned Use of Fund Balance as last option
Measure T Fund
• No Structural Deficit
• Revenues > Expenditures $866k
• CIP Commitment $6.4m
• Limited Debt Service capacity
• Enhance Debt Service capacity
• Economic Development
• Reallocate commitment
Estimated Unassigned Fund Balance
Unassigned Fund Balance:
• The residual of the prior year’s
resources (revenue > expenditures)
that has not been assigned to other
funds and that has not been
restricted, committed, or assigned
for specific purposes within the
general fund.
Projected Unassigned Fund Balance:
• Unaudited Figures
• Year-end closing procedures
• Does not include carryover
budget
FY 2024/25 Closing the Gap
The City Manager has implemented current year spending restrictions and has instructed the departments to produce FY2024/25 Budget reduction options that:
Revenue
Revenue Enhancements
• Maintain annual revenue adjustments for
User Fees and Development Impact fees
• Public Safety CFD
• Zone and Landscape Lighting Districts,
Fire Assessment
• Explore new revenue sources
Expenditures
• Reducing the Operating Budget for all
Departments by 10%
• Reducing the Budget for Overtime across
all Departments by 10%
• Deferring FY25 New Positions
• Freeze Hiring for positions that become
vacant throughout the fiscal year unless
the position is determined essential and
is approved by the City Manager
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