Recommended
Fiscal Year 2025 Operating Budget
June 3, 2024
City Council Meeting
Item 10
Department of Finance
State Budget
Governor’s Proposed Reductions
• Public Health - Cut $1,031,000 of “core” public health funding.
> Supports 8 FTEs
> Funds non-grant public health needs
Supports investigations (Dengue, oyster norovirus)
Supports PORT case management
Public information
Public health nurses
> Return to Pre-COVID funding.
> Joint Legislative Budget Plan rejects this cut.
> Local advocacy efforts ongoing.
2 State Budget – Governor’s 260 cuts
• Public Health - $60,000 reduction for Medi Cal
enrollment program.
• Eliminate funding for Library’s summer lunch
program - $30,000.
> PRCS/PUSD programs will remain.
• Housing – eliminate HHAP 6 funding.
> HHAP 1-5 funded street outreach, emergency
sheltering, and Rapid Rehousing program.
> City has sufficient funds to get through FY 2025.
> Joint Legislative Budget Plan rejects this cut.
> Local advocacy efforts ongoing.
3 State Budget – Governor’s 260 cuts
• Indirect or Application based funding:
> Public Health - $100 million reduction of workforce
development in the public health sector.
Public health nurses, health educators, support staff > Housing - Remove funding for Super NOFA (Notice of
Funding Availability). The grant/funding program
where affordable housing construction dollars are
allocated to projects.
4 Follow-up on Committee Requests
• Police Department
> Consider funding for 5 Police Officer positions.
PD is authorized for 240 sworn positions, but 235 are funded due to long term vacancies. PD has a focus on retention and recruitment but does not expect exceed 235 filled
positions in FY 2025.
Goal is to be able to reach 240 in FY 2026.
City utilizes vacancy factors to maintain a balanced budget. > Provide funding for emergency motel vouchers.
PD exploring model used by PORT (Fire and Public Health). PD can likely use same existing funds available to PORT. Will return in first half of FY 2025 to allocate additional funding, if necessary.
5 Follow-up on Committee Requests
• Parks, Recreation, and Community Services
> Can we open Kennedy and Villa Parke Pools for Sundays during the summer (3 months)?
Yes, can be done using existing summer filled positions. Estimated cost for FY 2025 is $25,000.
This would be for 14 Sundays, 8 hours per day.
> Can we open the Robinson Recreation Center and Villa
Parke Community Center on Sundays year-round?
Not with existing staff. Would require the hiring of additional part-time employees. Direct staffing estimated cost for FY 2025 is $125,000.
Have not estimated additional ancillary costs.
No programming would take place. Drop-in use only.
6 Follow-up on Committee Requests
• City Attorney
> Cost/benefit analysis of keeping more in-house vs. using outside counsel?
Proposed Amendment: Additional $510,000
appropriation from the General Fund.
> Increase Outside Legal from $2.2m to $2.5m.
> Add 1 FTE – Deputy City Attorney.
> Continue towards finding the balance of the appropriate Outside Legal and in-house staff.
> City Manager and City Attorney discussing management
of costs related to Legal claims/litigation and advice in relation to Enterprise Risk Management.
7 Follow-up on Committee Requests
• Rose Bowl Operating Company – Family Golf
> May 28th and June 6th Community Meetings
> June 12th – Urban Forestry Advisory Committee
> Additional meeting(s) in late June or July.
> June 10th – City Council Finance Committee
Removed Family Golf from the
Recommended Budget.
> Reduction of Revenue Estimate – $1.6m
> Reduction of Appropriations – $1.5m
> Removes Net Income of $72,000
8 Follow-up on Committee Requests
• Shoppers’ Lane and South Lake parking lots
and need for slurry or lot repairs.
> Staff will evaluate through CIP program funding.
9 Amendments to Proposed Budget
Public Health Department
• Additional $370,000 appropriation of General Fund.
> Housing previously funded $120,000 for motel vouchers • SAMHSA Grant.
> Increase revenue and appropriations by $66,000 for
mobile shower/laundry through October 2024.
• Home Instruction for Parents of Preschool Youngsters
(HIPPY).
> Increase revenue and appropriations by $457,362 and
fund 2.5 FTE through FY 2026.
> State General Fund Expansion Grant to expand HIPPY
program. 10
Amendments to Proposed Budget
Transportation Department
• Safe Streets and Roads for All Action Plan Grant.
> Increase revenue and appropriations by $253,000.
> Develop a comprehensive action plan for safe and
accessible walking, biking, and rolling in the City.
• Additional $2.8 million appropriations across
various parking funds.
> Replace outdated single-space meters with new pay-
by-plate parking pay stations throughout the City.
11 Amendments to Proposed Budget
Public Works Department
• Increase Refuse Fund (406) revenue by $5.9m
reflect approved rates.
• Increase Sewer Fund (205) revenue by $3.9m
reflect approved rates.
12 Future Discussion Topics
• Two much larger topics came up during
Committee meetings that will require a deeper
dive and Council priority setting discussions:
> Significant increase to the currently approved
amount of 240 sworn positions in the Police
Department.
> A 5-year plan to address/solve homelessness and
what it would cost.
• Addressing either would require significant shift
in spending and require the City to raise new
revenue or reduce spending in other areas.
13 General Fund
• Insufficient General Fund to fully fund the City’s needs (i.e., streets, fire stations, fire training, community centers, infrastructure).
14 Percentage of General Fund
FY 25 FY 19
City Attorney 3.62% 2.80%
City Clerk 1.04% 1.16%
City Council 1.02% 1.02%
City Manager 2.31% 2.17%
Debt Service 3.62% 5.52%
Finance 4.50% 4.38%
Fire 19.51% 19.52%
Housing 0.71% 0.53%
Human Resources 1.66% 1.82%
Parks, Recreation &
Community Svcs. 7.99% 4.49%
Libraries & Information
Services 3.70% 4.68%
15 FY 25 FY 19
Other Non-Departmental 2.70% 1.56%
PCAC Transfer 0.34% 0.37%
PCOC TOT Debt Transfer 3.74% 4.26%
Planning & Community
Development 2.80% 3.13%
Police 29.65% 31.38%
Public Health 0.58% 0.00%
Public Works 4.91% 8.76%
PUSD Transfer 3.24% 0.00%
RBOC Transfer 0.00% 0.00%
Transportation 2.36% 2.46%
100.0% 100.0%
Percentage Take Away
• 100% of the Estimated General Fund Revenue
is allocated each year.
• PRCS and PW should be combined due to
shift of Parks Maintenance from PW to PRCS.
• Other Non-Departmental increase is due to
increased General Liability costs.
• Public Health previously received no General
Fund direct funding.
16 Building the Budget
• Filled positions are budgeted at filled rate plus
merit and MOU growth.
• Vacant positions are budgeted based on
estimates of timing to fill.
• Services and supplies are based on estimated
contractual escalators and CPI adjustments.
• Internal Services are based on utilization rates,
causal factors, and inflationary adjustments.
• Capital Outlay is historically focused on unique
equipment or vehicle purchases.
17 General Fund Revenues
• Taxes – voter approval required.
• Fee or Charge – a charge imposed on an
individual for service that person chooses to
receive. May not exceed the estimated
reasonable cost to provide the service.
> Constitution Article XI, Sections 7 & 9, Prop. 218.
• Assessments – a charge levied to pay for a
public improvement or services within a
predefined district.
> Property-owner approval.
18 General Fund Revenues
• Other revenues that support operations:
> Franchise fees
> Rents
> Investment earnings
> Licensing or permits
> Fines or penalties
• Every type of revenue has legal limitations on what
may be charged and collected.
• The City Council considered many types of revenue
opportunities prior to placing Measure I on the
ballot. We can revisit those.
19 20
FY 2025 Budget Appropriations
21 Department of Finance
Total Budgeted Appropriations
(including Affiliated Agencies and CIP)
(in millions)
FY 2023
Actuals
FY 2024
Adopted
FY 2025
Recommended
General Fund $304.7 $323.7 $340.7
All Funds $1,000.9 $1,240.5 $1,147.5
Full-Time Equivalent Positions
(including Affiliated Agencies)
FY 2023
Adopted
FY 2024
Adopted
FY 2025
Recommended
General Fund 1,028.10 1,062.15 1,080.27
All Funds 2,321.36 2,356.23 2,403.38
22 Total Revenues
FY25 REVENUE BY CATEGORY – ALL FUNDS ($987.0 Million)
23 General Fund Revenue
FY25 REVENUE BY CATEGORY – GENERAL FUND ($340. Million)
24 Total Appropriations
FY25 APPROPRIATIONS BY CATEGORY – ALL FUNDS ($972.1 Million)
25 General Fund Revenues
FY25 OPERATING REVENUES BY CATEGORY – GENERAL FUND ($340.7 Million)
Economic Conditions
• Fee and Charge based funds.
> Ongoing and higher than normal inflation and the
reluctance to increase fees during the COVID-19
period has put increased pressure to increase fees
now.
> Increased regulations (Federal, State, and Local) has resulted in:
Delayed revenues (Development fees)
Inability to recover full cost of service
Increased costs in near term to achieve
compliance
> Departments will provide future fund outlooks for key funds.
26 Economic Conditions
• Grant or Special Revenue Funds
> State is delaying programs and grants due to
budget challenges.
> Federal government is not increasing funds for
operational programs.
> Federal Congressional Directed Spending is
shrinking.
> Some special revenue sources are flat or declining.
> Overhead to support programs is increasing faster
than funding source.
> Departments will provide future fund outlooks for
key funds.
27 General Fund Revenues
• Significant slow down in Property and Sales
Tax revenues for FY 2025
> Property Tax – 3.0%, Sales Tax – 2.4%
• Transient Occupancy Tax
> Occupancy and rates have been flat after a
period of strong recovery
> Business-related travel/weekday travel still lagging
• Utility Users Tax
> Increase in revenue related to inflation and higher
rates
28 General Fund Expenditures
• General Fund
> Pension costs are increasing as CalPERS
investments fell short of target the last two years.
> Inflation is impacting certain commodities in a
significant way.
> City is not immune to rising costs of utilities,
especially electricity and water.
> Cost of insurance and General Liability continues
to experience large increases annually.
> Increased pressure or need to fund services that
were previously funded 100% with outside sources.
29 Light & Power Fund Transfer to G.F.
• Adopted FY 2024 Budget anticipated
utilizing $5m in General Fund Operating
Reserves to offset reduced GFT in FY 2024.
> Light and Power Fund finished FY 2023 better
than expected.
> The GFT for FY 2024 can be the full $18.0 million.
> The transfer in FY 2025 is planned to be $18.0
million.
> This clean-up will be included as part of the
resolution adopted with the FY 2025 Operating
Budget.
30 General Fund Outlook
• The future forecast for both property and
sales tax growth is lower than normal.
> Property Tax – 4.5%, down from 7%
> Sales Tax – less than 3%, down from 8-9%
• Economic development will continue to
play a vital role in growing out major tax
bases.
• City has significant capital needs where no
or insufficient grant funds are available.
> The City does not have funding to do the library
repairs on its own.
31 General Fund Five-Year
32 FY 2023 FY 2024 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Final Rev. Budget Forecast Budget Forecast Forecast Forecast Forecast Beginning Amount Available for Appropriations 0 18,086,075 18,086,075 6,803,101 1,587,157 (382,051) (3,661,049) (5,831,290) Revenues
Tax Revenues 256,099,426 250,860,100 254,930,304 265,657,100 275,442,388 284,542,670 293,888,284 303,568,090 Other Revenues 46,153,066 58,823,605 58,823,605 54,732,734 56,053,217 57,407,231 58,795,643 60,219,345 Contributions/Svs. From Other Funds 54,527,524 15,190,438 20,190,438 20,140,438 20,140,438 20,140,438 20,140,438 20,140,438 Total Revenues 356,780,016 324,874,143 333,944,347 340,530,272 351,636,043 362,090,339 372,824,365 383,927,873 Expens es
Personnel 186,024,588 204,966,273 204,966,273 214,778,587 225,493,081 234,312,948 241,929,694 253,055,984 Debt Service 11,426,366 11,692,948 11,692,948 12,318,397 12,323,966 12,317,139 11,290,184 11,288,643 Contributions To Other Funds 18,195,625 25,609,821 25,609,821 14,180,877 14,464,495 14,753,784 15,048,860 15,349,837 Other Expenses 87,921,858 114,997,675 114,997,675 99,468,355 101,323,710 103,985,465 106,725,867 109,547,505 Total Expenses 303,568,437 357,266,717 357,266,717 340,746,216 353,605,251 365,369,337 374,994,605 389,241,969 Operating Income/(Loss) 53,211,579 (32,392,574) (23,322,370) (215,944) (1,969,208) (3,278,998) (2,170,240) (5,314,096) Ending Amount Available for Appropriations 53,211,579 (14,306,499) (5,236,295) 6,587,157 (382,050) (3,661,048) (5,831,289) (11,145,385) Contributions to Capital Projects (7,137,700) (7,137,700) Reserve for Capital & Other Funds (33,860,146) 23,247,300 23,247,300 (5,000,000) - - - - Reduction/(Contribution) to Policy Reserve (1,265,358) 5,000,000 - Net Income/(Loss) with Reserve Contribution 18,086,075 6,803,101 10,873,305 1,587,157 (382,050) (3,661,048) (5,831,289) (11,145,385) General Fund Five-Year Forecast
General Fund Reserves
FY 2024
15% Emergency Reserve $ 43,952,969
5% Operating Reserve 14,650,989
Section 115 Trust – Pension 13,099,495
Section 115 Trust – OPEB 2,481,744
Total $ 74,185,197
33 Proposed Enhancements
• Parking Enforcement
> Add 4.0 FTE – Parking Enforcement staff
> Offset cost by reducing contracted staff
> One-time purchase of vehicles – Electric
Vehicles
• Fire Engineer – 40-hour
> Dedicated 40-hour Engineer focused on training,
safety, and staff development
> Recruit Training Academy Cadre
34 Proposed Enhancements
• Enterprise Risk Management & Employee
Wellness
> 2.0 FTEs - One Senior Office Assistant, One
Management Analyst IV
> Funding for leased office space
> 1.0 FTE – Sr. HR Analyst to support Employee
Wellness and Benefits Division
• PRCS Boxing Program
> Increase by 0.53 FTE to create a full-time
Recreation Services Specialist for the Boxing
program
35 Proposed Enhancements
• Tree Infrastructure Maintenance
> Additional funding to ensure regular tree
maintenance.
> City tree inventory exceeds 60,000 trees.
• Public Health – General Fund Support
> Grant funds do not increase as fast our internal
costs/overhead to support programs
> Complaint investigations & enforcement duties
> Additional office space needed
36 Proposed Enhancements
• Housing Staffing
> 2.0 FTEs – Junior Housing Assistant and Office
Assistant
> Housing assistance and Rental assistance
programs
• City Service Center
> 1.0 FTE – Office assistant to support increased
needs of the CSC
• Transportation CIP
> 1.0 FTE – Planner funded through capital grants
37 Proposed Enhancements
• Water and Power
> 13.0 FTEs
Support achieving 2030 Carbon Free policy
goal.
Upgrade of Computerized Maintenance
Management System (System is part of the
CIP). Will facilitate monthly billing and time of
use rates.
Electric Vehicle Charger maintenance
Water treatment
Administrative Internships
38 Recommendation
Find that the proposed action is not a project
subject to the California Environmental Quality Act
(CEQA).
Open the public hearing on City Manager’s
FY 2025 Recommended Operating Budget.
Continue the public hearing to the regular meeting
of the City Council on June 3, 2024, until a formal
recommendation to adopt the FY 2025
Recommended Operating Budget is presented to
the City Council.
39 Department of Finance