City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Ken Irwn, City Manager
BY: Jennifer Riedeman, Finance Director
MEETING DATE: July 23, 2024
ITEM NO: 5.1
SUBJECT: Receive a presentation from staff and conduct a review and discussion of the proposed Fiscal Year 2024/25 General Fund and All Other Funds budget for the City of Patterson. Provide direction to staff regarding the proposed budget
RECOMMENDATION
Review the Proposed Budget for Fiscal Year 2024/25, and provide direction to staff for any amendments to the budget prior to adoption.
BACKGROUND
The City provides its services through three separate legal entities: the City of Patterson, the Patterson Public Financing Authority, and the West Patterson Financing Authority. The fiscal year for all three entities runs from July 1 through June 30. Staff prepares operating and capital improvement budgets for the City and the Authorities, which are then reviewed, discussed, amended and eventually approved by the City Council and the City Council sitting in its capacity as the Governing Board of the Authorities.
The City has 56 Other Funds in addition to the General Fund and its various departments. Other Funds consist of Enterprise Funds (Water, Sewer, Garbage) and Special Revenue Funds - including Assessments (Landscape Maintenance Districts, Benefit Assessment Districts, Community Facilities Districts, etc.), Housing, Streets, Local Transportation Funds, Gas Tax, and Impact Fees for Community Facilities, Water, Sewer, Street, Public Safety and others.
Due to the City's strong General Fund reserve position of 42% of General Fund operating costs, Council has elected to use fund balance over the past budget cycles as a way to minimize the impacts on service levels while maintaining a general fund reserve budget well above state standards. Staff has worked diligently to provide accurate and detailed projections and estimates to Council. Barring major concerns from the City Council with the budget proposed this evening, we are anticipating final adoption of the budgets for the City and the Authorities at a Council meeting on August 20,2024.
ANALYSIS
Tonight's workshop will focus on the City's General Fund, from which most of our basic services such as law enforcement, fire prevention and suppression, planning, engineering, building and capital projects, parks and recreation, and general administration are paid.
The General Fund net change in the current year is projected to have approximately $1.5 million of available fund balance at the end of Fiscal Year 2024/25. Fiscal Year 2024/25 Sales Tax revenues are expected to decrease by 15.3% over the amended Fiscal Year 2023/24 budget, but property tax is anticipated to increase by 7.7%. In addition, several funds required support from the General Fund by way of Transfers to cover costs not funded by other revenues from rates and fees.
The workshop will also cover the Enterprise Funds. The Garbage Fund is projected to end Fiscal Year 2024/25 with a negative fund balance of ($1,005,840), pending an updated garbage rate study. The Sewer Fund is projected to end Fiscal Year 2024/25 with a negative fund balance of ($3,619,133), pending an updated sewer rate study. The Water Fund is projected to end Fiscal Year 2024/25 with an available fund balance of $4,981,721.
Projected ending balances are estimates using the ending balance form the audited financial statements for Fiscal Year ended June 30, 2023, adjusted budget totals for revenue and expenses for Fiscal Year 2023/24, and projections for Fiscal Year 2024/25. However, the adjusted budget totals will vary from the actual results for Fiscal Year 2023/24 and staff will bring updated information to Council as part of the Mid-Year Budget for Fiscal Year 2024/25.