City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Fernando Ulloa, City Manager
BY: Kevin Williams,
MEETING DATE: March 18, 2025
ITEM NO: 6.1
SUBJECT: Adopt Resolution No. 2025-14 Approving the City of Patterson Mid-Year Adjustments to the Budget for the Fiscal Year 2024/25 and Authorize the Finance Department to make the necessary budget adjustments.
RECOMMENDATION
Motion to Adopt Resolution No. 2025-14 Approving the City of Patterson Mid-Year Adjustments to the Budget for the Fiscal Year 2024/25 and Authorize the Finance Department to make the necessary budget adjustments.
BACKGROUND
Staff is submitting the Mid-Year Budget Review Report and proposed budget adjustments based on the information reviewed as of approximately mid-year. The adjustments include expenditure appropriations as well as increases in revenue estimates. In addition to the new requests from departments, staff identified other items that were omitted from the original FY 2024/25 budget.
ANALYSIS
A presentation will be made to the City Council outlining the mid-year budget review for FY 2024/25.
General Fund
Total revenues (including transfers in) are estimated for the fiscal year at $41.09 million, approximately $26 thousand less than the recommended adjusted budget of $41.1 million. Revenue estimates are coming in slightly lower due to a decrease in the estimated Sales Tax Revenue in the year and a decrease in the amounts of Transfers in from the Utility Funds per the Cost Allocation Plan. It should be noted that the originally adopted budget includes grant revenues that are contingent on the activity related to the grant funding and may carryover into future fiscal years until the grant is completed.
Total estimated expenditures end the year at $53.9 million, approximately $56 thousand higher than the adjusted budget of $53.8 million. Expenditures are likely to be spent at a lower rate than originally budgeted primarily due to the vacancies of budgeted positions during the fiscal year and the normal under spending of expenditures such as Capital Outlay. During the adoption of the FY2024/25 budget, staff was directed by City Council to freeze some vacant positions. The estimated savings for the General Fund during the first half of the year was estimated to be $394 thousand and is included in its own column in the Mid-year Budget Review Report (Exhibit A).
In 2024, the City finalized a Cost Allocation Plan which serves as a basis to charge indirect overhead charges to other funds for the work provided to those funds by various administrative departments housed in the General Fund. In order to fully implement the Cost Allocation Plan, the City is required to change how it accounts for these overhead costs. It is estimated that the implementation of the Cost Allocation Plan will cost the General Fund $674 thousand in reduction of transfers in from Enterprise Funds as well as an increase in expenditures of $753 thousand by reallocating certain staff salaries from the Enterprise Funds.
In total the net adjustment to the General Fund is a decrease of $82,599.40 and is outlined in the attachments to the Mid-year Budget Review Report (Exhibit A). The General Fund is expected to have an available Fund Balance of $2.3 million at June 30, 2025.
Enterprise Funds
The City of Patterson provides residents with Solid Waste, Water and Wastewater services. The charges for these services (user fees), along with the costs for providing the services, are accounted for in individual Enterprise Funds. These funds are self-supporting and do not receive any General Fund support. User fees are set in accordance with Proposition 218, which requires that customers be given the opportunity to challenge proposed rates. Rate studies are conducted periodically to ensure the enterprise rates are sufficient to cover: operating expenses, capital improvements, upgrades and costs associated with meeting both State and Federal guidelines and regulations. FY2024/25 user fee budgets for the Enterprise Utility Funds have been adopted in line with rate study projections.
The net adjustments to the Enterprise Funds and each Fund’s available Working Capital are outlined in the attachments to the Mid-year Budget Review Report (Exhibit A).
Other Funds
Staff recommended Mid-year adjustments are included in the Adjusted Budget, where applicable, and adjustments to all funds are detailed in the attachments to the Mid-Year Budget Review Report (Exhibit A), and are summarized below:
• Fund 190 - CFD 2003-1 Fire Station #2 - Due to an increase in the projected Fund Balance at 6/30/2024, the projected transfer needed from the General Fund to cure the Fund’s deficit was reduced by $575 thousand. Projected Available Balance after MidYear: $0.00 • Fund 325 - Gas Tax requires an increase in transfers out in the amount of $475,000 to partially fund the increase in project costs in Fund 327. Projected Available Balance after Mid-Year: $1.2 Million
• Fund 327 - Street Projects requires an increase in expenditure budget in the amount of $750,000 for five separate projects. Projected Available Balance after Mid-Year: $772 thousand
• Fund 329 - Measure L requires an increase in transfers out in the amount of $275,000 to partially fund the increase in project costs in Fund 327. Projected Available Balance after Mid-Year: $3.5 million
• Funds 120, 138, 176, 178, 179, 312, and 326 require additional adjustments to transfers from/to the General Fund to either cover fund deficits or to reimburse the General Fund for Salaries and Benefits of Assigned Staff. Projected Available Balance after Mid-Year for all funds: $0.00
• Transfers related to the implementation of the Cost Allocation Plan affected 31 of the City’s Funds.
The net adjustments to the General Fund and the Enterprise Funds are outlined in the attachments to the Mid-year Budget Review Report (Exhibit A).
FISCAL IMPACT
The total net budget adjustments for FY 2024-25 City-wide fiscal impacts are as follows:
Net Budget Adjustments by Fund
General Fund 82,599.40
Country Hollow - LMD (6,560.00)
Heartland Ranch - LMD 4,215.15
Heartland Ranch - Overlay 4,215.15
Kinshire Estates - LMD 4,215.15
Patterson Estates I/III/IV-LMD 4,215.15
Walnut Square - LMD
(16,805.00)
Miraggio - LMD 4,215.15
Walker Ranch LMD 4,215.15
Patterson Gardens LMD 4,215.15
Keystone Annex 1 McShane - LMD 4,215.15
BAD Districts 8,099.67
CFD 2013-1 16,247.20
CFD 2018-02 VOP MAINTENANCE 178,983.33
CFD 2018-01 VOP INFRASTRUCTURE 955.00
CFD 2015-2 1.00
Patt Gardens Fire Assmt Dist 334.00
Public Safety CFD 2003-1 444,277.00
West Patt Bus. Park CFD 2005-1 505.00
HR Reass Dist Loc Oblig Bonds 1,565.00
WPFA CFD 2001-1 199.00
HUD Federal Grant/Consortium (22,652.00)
HUD Home 156.00
Gas Tax 475,000.00
Local Transportation Fund (90,620.00)
Street Projects 5,372.00
Measure L 275,626.00
General Government Impact Fee 1,152.00
Parkland In-Lieu Fee 63.00
Storm Drain Fees 63.00
Garbage (578,900.12)
Sewer (269,733.46)
Water (761,041.17)
Grand Total of all Net Adjustments
(221,392.92)
Staff will keep the Council informed of any significant economic impacts to the budget as needed throughout the remainder of this fiscal year, and a financial update will be included as a part of the FY 2025/26 Budget workshop in May 2025.