Fiscal Year 2024/25 Propose d
B
udget Update
Presented by Javier Carcamo, Director of Finance,
Jennifer Terry, Finance Manager
Tanner Benson, Acting Financial Analyst
August 20, 2024, City Council Meeting, Agenda Item No. 33 R e c e i v e d A f t e r A g e n d a P r i n t e d 8 / 2 0 / 2 0 2 4 - R e g u l a r M e e t i n g D I S C U S S I O N - I t e m N o . 3 3
P r e s e n t a t i o n
Overview
• 2nd Year of the Biennial (two-year) Budget
• Economic Update and Budget Adjustment Drivers
• Discuss Changes to the General Fund, Measure T, and other significant changes
• Personnel Changes
• Approve the Updated Schedule of Authorized Positions List • Approval of Proposed Budget Adjustments
• Future Financial Updates
Fiscal Year 2024/25
Proposed Budget Update
Economic Update and Budget
Adjustment Drivers
Inflation
Inflation eased notably last year and
has shown modest further progress so
far this year, but it remains above the
Federal Bank objective of 2 percent.
Federal Reserve Bank
• Monetary Policy
• Interest Rate
• Balance Sheet
Economic Update and Budget
Adjustment Drivers
Federal Reserve Bank
• Interest Rate Policy
• Increase Federal Funds Rate
• 5.25% - 5.50%
• Rate increases = 11 times
• No rate cut for 13 months
• Reverse Inflation (Appr 2%)
Economic Impact
• Restrictive Monetary Policy
• Cost of borrowing is higher
• Lower disposable income
• Housing market
• High-value purchases
• Home, car, boat, furniture
Economic Update and Budget
Adjustment Drivers
Federal Reserve Bank
Economic Data
• Inflation Rate
• Unemployment Rate – 4.3%
• Labor Market
• Companies are hiring less
• Sign of economic slowdown
Federal Open Market Committee
• The rate cut in September is “on the table.”
Economic Update and
Budget Adjustment 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 Labor Agreements – All Groups
• Pension Payments
Operating Costs
• Rising Risk Insurance Costs
• Services/Contracts – Cost increases
• Equipment – New and replacements
Current Capital Projects
• Design Services
• Construction
• Land Value
Sales Tax
Revenue - Sales Tax
Fiscal Year 2024/25 Proposed Budget Update
Revenue (Sales Tax)
Fiscal Year 2024/25 Proposed Budget Update
Riverside County
Revenue - Sales Tax
Fiscal Year 2024/25 Proposed Budget Update
• Softening of the Economy Causes
• Extended Period of High-Interest Rates
• Less Disposable Income
• Fewer Auto Sales (New & Used)
• Delayed Grand Openings for Big Box Retailers and Hospitality Locations • Bradley Burns coming in 4% lower than FY 2022/23 & Measure T is 2% lower Revenue - Sales Tax
Fiscal Year 2024/25 Proposed Budget Update
Four Years of Year-Over-Year Continued
Biennial Budget Revenue Projections (New Retail, Hospitality, & Year-Over-Year Growth)
Adjusted Fiscal Year 2024/25 Projections
Bradley Burns & Measure T, 3% higher than FY24
$2.18 million
reduction
$2.37 million
reduction
General Fund &
Measure T
Fiscal Year 2024/25 Proposed Budget Update
FY 2024/25 Adopted
Budget
Proposed
Adjustments % Change
FY 2024/25 Proposed
Amended Budget
Revenues
Taxes-Sales Tax 28,770,000$ (2,179,926)$ -8% 26,590,074$ Taxes-VLF/Property Tax Comp 10,027,400 200,548 2% 10,227,948 Taxes-Property 9,914,100 199,534 2% 10,113,634 Other Misc Revenue 4,726,903 2,751,919 58% 7,478,822 Taxes-Franchises 4,652,000 - 0% 4,652,000 Charges for Services 4,867,960 (507,300) -10% 4,360,660 License/Permit Fees 2,000,075 (176,000) -9% 1,824,075 Taxes-Transient Occupancy Tax 5,546,000 (2,966,000) -53% 2,580,000 Taxes-Business Licenses 1,065,400 - 0% 1,065,400 Taxes-Property Transfer 800,000 (250,000) -31% 550,000 Loan/Bond/Lease Proceeds - - 0% - Transfer In - - 0% - Total Revenue 72,369,838$ (2,927,225)$ -4% 69,442,613$ Expenditures
Personnel Costs 48,999,585$ 5,554,645$ 11% 54,554,230$ Operations & Maintenance 13,007,435 (513,878) -4% 12,493,557 Capital Outlay 1,231,626 (135,000) -11% 1,096,626 Allocations 7,594,685 - 0% 7,594,685 Transfer Out 1,150,523 - 0% 1,150,523 Total Expenditures 71,983,855$ 4,905,767$ 7% 76,889,622$ Contribution to/(Use of) Fund Balance 385,983$ (7,832,992)$ (7,447,009)$
GENERA L FUND
Fiscal Year 2024/25 Proposed Budget Update
FY 2024/25
Adopted
Budget
Proposed
Adjustments % Change
FY 2024/25
Proposed Amended
Budget
Revenue
Taxes-Sales Tax 31,449,800$ ( 2,371,807)$ -8% 29,077,993$ Total Revenue 31,449,800$ (2,371,807)$ -8% 29,077,993$
Expenditures
Personnel Costs 13,132,286$ 330,288$ 3% 13,462,574$ Operations & Maintenance 2,599,796 (425,014) -16% 2,174,782 Capital Outlay 925,365 (285,000) -31% 640,365 Allocations 928,500 - 0% 928,500
Transfer Out 11,004,936 - 0% 11,004,936
Total Expenditures 28,590,883$ (379,726)$ -1% 28,211,157$
Contribution to/(Use of) Fund Balance 2,858,917$ (1,992,082)$ 866,836$
MEASURE T
City Wide
Remaining Citywide- Proposed Changes
Fiscal Year 2024/25 Proposed Budget Update
Revenues
Increases
• Interest Income $567K
Decreases
• $383K in Gas Tax Revenue
• Federal & State
Reimbursement of $961K
• Charges for Services and
License/Permit Fees of $107K
Expenditures
• Increases of $3 mil for
Personnel related Expenditures.
• Decrease in O&M in the
amount of $2 mil due to City
wide departmental reductions
Personnel Changes
Fiscal Year 2024/25 Proposed Budget Update
Dept. Title
FY 25
Changes Dept. Title
FY 25
Changes
Public Works / Maintenance
RECORDS CLERK - LIMITED TERM -1 EQUIPMENT OPERATOR -1
Fire Administration
HUMAN RESOURCE ANALYST -1 OFFICE SPECIALIST- TEMPORARY -1 P/T TEMPORARY OFFICE SPECIALIST -1
Fire Operations
PT INTERN - LIMITED TERM -0.5 DIVISION CHIEF -1
MANAGEMENT ANALYST 1
Library Police Operations
P/T LIBRARIAN 1 POLICE CORPORAL -2
P/T LIBRARY SPECIALIST 1 POLICE OFFICER* +2 / -2
PRINCIPAL LIBRARIAN -1
DSD / Building & Safety Police Support
BUILDING INSPECTOR I/II/III -1 POLICE CORPORAL -1
OFFICE ASSISTANT I/II -1 POLICE SERGEANT 1
DEVELOPMENT SERVICES TECH -1 POLICE SERGEANT - DETECTIVE -1 P/T INTERN -0.5
DSD / Code Enforcement DSD / Planning
CODE ENFORCEMENT OFFICER I/II -1 ASSOCIATE PLANNER - LIMITED TERM -1 RECORDS CLERK - LIMITED TERM 1
ASD / HR & Risk
City Clerk
Economic Development
Proposed FY 2024/25 Updates
FY 2024/25
Adopted
Budget
Proposed
Adjustments % Change
FY 2024/25
Proposed
Amended Budget
Revenues
Taxes-Sales Tax 60,219,800$ (4,551,733)$ -8% 55,668,067$ Taxes-Property 29,616,316 1,066,267 4% 30,682,583 Charges for Services 24,759,803 (614,650) -2% 24,145,153 Other Misc Revenue 15,863,101 3,242,798 20% 19,105,899 Special Assessments 11,786,341 75,913 1% 11,862,254 Taxes-VLF/Property Tax Comp 10,027,400 200,548 2% 10,227,948 Tax-Special Tax 9,387,543 - 0% 9,387,543 Taxes-Franchises 4,710,000 - 0% 4,710,000 Taxes-Other 3,386,600 (383,220) -11% 3,003,380 Taxes-Transient Occupancy Tax 5,546,000 (2,966,000) -53% 2,580,000 License/Permit Fees 2,010,575 (176,000) -9% 1,834,575 Taxes-Business Licenses 1,065,400 - 0% 1,065,400 Taxes-Property Transfer 800,000 (250,000) -31% 550,000 Loan/Bond/Lease Proceeds - - 0% - Total Revenue 179,178,879$ (4,356,077)$ -2% 174,822,802$ Expenditures
Personnel Costs 92,809,414$ 8,900,957$ 10% 101,710,371$ Operations & Maintenance 60,841,372 (2,926,176) -5% 57,915,196 Capital Outlay 2,224,391 (437,400) -20% 1,786,991 Allocations 11,522,578 - 0% 11,522,578 Total Expenditures 167,397,756$ 5,537,381$ 3% 172,935,137$ Contribution to/(Use of) Fund Balance 11,781,124$ (9,893,458)$ 1,887,665$
CITYWIDE
Citywide Overview- Revenue & Expenditures
Fiscal Year 2024/25 Proposed Budget Update
Operating
Reserves
Fund
Est. Beg.
Unassigned Fund
Bal., 7/1/24
Proposed
Amended
Revenues
Proposed
Amended
Expenditures
Capital
Outlay
Use of
Reserves
Transfer to
Reserves
Est. End.
Unassigned Fund
Bal., 6/30/25
General Fund 15,528,110 69,442,613 (76,889,622) (2,044,966) - (833,670) 5,202,465 Measure T 1,610,006 29,077,993 (28,211,157) 217,249 - (626,487) 2,067,604 Fire District Fund (164,434) 25,566,996 (26,431,729) 2,291 - - (1,026,876) CSD Fund 150,484 5,468,394 (5,804,436) - - - (185,557) Library Fund 125,407 3,496,480 (3,577,693) - - - 44,195 Total 17,249,573 133,052,477 (140,914,636) (1,825,426) - (1,460,157) 6,101,830 Fiscal Year 2024/25
Estimated Fund Balance
Fiscal Year 2024/25 Proposed Budget Update
Operating & Sustainability Reserves
Estimated
Beginning Fund
Balance
Contribution to
Res erves
General Fund
Contribution to
Res erves
Meas ure T
F
und
Estimated
Ending Fund
Balance
General Fund Operating Reserves - 28% 20,416,330$ 833, 670$ -$ 21,250,000$ Measure T Operating Reserves - 31% 4,932,808$ - 342,976 5,275,784$ Fire District Operating Reserves - (FD) 3,787,453$ - - 3,787,453$ Fire District Operating Reserves - (MT) 3,427,136$ - 210,435 3,637,571$ CSD Operating Reserves - (CSD) 1,039,015$ - - 1,039,015$ CSD Operating Reserves - (MT) 541,751$ - 50,273 592,024$ Library District Operating Reserves - (LF) 747,833$ - - 747,833$ Library District Operating Reserves - (MT) 246,152$ - 22,803 268,955$ Total Operating Reserves 35,138,477 833,670 626,487 36,598,634 Sustainability Reserves Fiscal Year 2024/25
Operating & Sustainability Reserves
Estimated
Beginning Fund
Balance
Contribution to
Res erves
General Fund
Contribution to
Res erves
Meas ure T
Fund
Estimated
Ending Fund
Balance
Economic Contingency (110) 4,555,716 - - 4,555,716 Economic Contingency (111) 3,827,168 - - 3,827,168 Fleet Replacement (111) 1,453,000 - - 1,453,000 Fleet Replacement (110) 2,000,000 - - 2,000,000 Fire Fleet Replacement (111) 3,815,443 - - 3,815,443 Fleet Replacement (715) 1,015,909 - - 1,015,909 Total Fleet Replacement 8,284,352 - - 8,284,352 Sustainability Reserves Fiscal Year 2024/25
Operating & Sustainability Reserves
Estimated
Beginning Fund
Balance
Contribution to
Res erves
General Fund
Contribution to
Res erves
Meas ure T
Fund
Estimated
Ending Fund
Balance
Information Services (726) 282,000 - - 282,000 Total Information Services 282,000 - - 282,000 Facility Repair (111) 1,367,000 - - 1,367,000 CSD Facility Repair (111) 5,605,850 - - 5,605,850 CSD Facility Repair (110) 2,000,000 - - 2,000,000 Fire Facility Repair (111) 935,000 - - 935,000 Fire Facility Repair (110) 1,000,000 - - 1,000,000 Information Technology (110) 1,000,000 - - 1,000,000 Pension 115 Trust (PARS) (111) 5,000,000 - - 5,000,000 Pension 115 Trust (PARS) (110) 2,000,000 - - 2,000,000 OPEB 115 Trust (CERBT) [111] 1,000,000 - - 1,000,000 OPEB 115 Trust (CERBT) [110+111] 1,000,000 - - 1,000,000 Continuing Operations (110) 2,000,000 - - 2,000,000 Continuing Operations (111) 4,025,000 - - 4,025,000 Totals 79,020,563$ 833,670$ 626,487$ 80,480,720$ Sustainability Reserves Fiscal Year 2024/25
Future Finance Updates
• 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)
• Primary Objectives
• Refinement of major revenue sources
• Implement salary savings rate
• Update the Schedule of Authorized Positions
Fiscal Year 2024/25 Proposed Budget Update
Recommended Actions
• Accept and File the report;
• Amend the Fiscal Year 2024/25 Operating Budget as defined in the Fiscal Year 2024/
25 Proposed Budget Amendments;
• Approve the Updated Schedule of Authorized Positions List.
Fiscal Year 2024/25 Proposed Budget Update