PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #3.B
SUBJECT/TITLE:
DIRECTION REGARDING PROPOSED BUDGETS FOR FISCAL YEAR 2024 AND FISCAL YEAR 2025: JULY 1, 2023 THROUGH JUNE 30, 2025
RECOMMENDATION:
Provide direction regarding the proposed budget, including proposed work plan budget requests for the budgets for Fiscal Years FY 2024 and FY 2025, effective July 1, 2023 through June 30, 2025 for the City of Pismo Beach.
BACKGROUND:
On April 25, 2023, the Pismo Beach City Council conducted a public workshop on the proposed budgets for Fiscal Year (FY) 2024 and FY 2025, including a review of the City’s fiscal policies, an overview of the proposed budget, Council goals, other initiatives, position changes, the updated cost allocation plan, and proposed vehicle purchases. At that meeting, the City Council affirmed the City’s fiscal policies, staff’s proposed appropriations for Council goals, position changes, the updated cost allocation plan, and provided initial feedback on proposed other initiatives and vehicle purchases. The City Manager, Administrative Services Director, and staff have prepared the FY 2024 and FY 2025 Proposed Budgets for Council’s review and final direction on the proposed budget, including City goals and other initiatives, and any other items to be included in the Adopted Budgets for FY 2024 and FY 2025. After Council provides direction, staff will return on June 6, 2023 with a resolution to adopt the FY 2024 and FY 2025 budgets.
Finally, staff will continue to work on the final Adopted Budget document until it is complete and provide it to Council for its reference in early fall of 2023.
Budget Overview
The FY 2024 and FY 2025 proposed budgets present a balanced budget, with excess revenues and fund balance sufficient to cover recommended work plan and capital project budget expenditures. The base budget is a continuance of all current services and contracts without any changes to staffing levels, contract costs beyond normal cost increases, program enhancements, or capital projects. The proposed City goals and other initiatives are all expenditures over the base budget. These include several capital projects, technology master plan projects, and position changes.
Proposed Budget Summary
The FY 2024 proposed budget includes a total of $71.91 million in revenues and $72.73 million in operating and capital budget for a net $812 thousand more expenditures than revenues. The operating budget is balanced with a $11.38 million net operating surplus.
The expenditures that exceed revenues are for one-time capital projects that the City has been anticipating and saving for over time. Fund balances accumulated over time offset the additional expenditures.
3.B-1Council Agenda 5-11-2023
The FY 2025 proposed budget includes a total of $66.58 million in revenues and $62.27 million in operating and capital budget for a net $4.31 million more revenues than expenditures. The operating budget is balanced with a $10.05 million net operating surplus.
The following tables reflect the FY 2024 and FY 2025 proposed budgets, including the total budget, the operating budget, and the one-time revenues and expenditures budgets, including transfers between funds.
Table 1: FY 2024 and FY 2025 All Funds Total Proposed Budgets Table 2: FY 2024 and FY 2025 All Funds Proposed Operating Budgets Table 3: FY 2024 and FY 2025 All Funds Proposed One-time Revenue & Expenditure Budgets, Net Supported by Fund Balance Total Budget
FY 2024 Proposed
Budget
FY 2025 Proposed
Budget
Beginning Fund Balance 38,821,569$ 38,009,173$ Revenues 71,913,083$ 66,579,399$
Expenditures 72,725,479 62,271,898
Net (Revs - Exps)(812,396)$ 4,307,501$
Ending Fund Balance 38,009,173$ 42,316,674$
Operating Budget
FY 2024 Proposed
Budget
FY 2025 Proposed
Budget
Revenues 60,213,983$ 60,643,499$
Expenditures 48,830,029 50,591,258
Net (Revs - Exps)11,383,954$ 10,052,241$
One-time
FY 2024 Proposed
Budget
FY 2025 Proposed
Budget
Revenues 11,699,100$ 5,935,900$
Expenditures 23,895,450 11,680,640
Net (Revs - Exps)(12,196,350)$ (5,744,740)$
3.B-2Council Agenda 5-11-2023
Proposed Work Plan Budget Requests
The FY 2024 and FY 2025 proposed budgets include three categories of items for Council review and approval. These include contributions to reserves, City goals and other initiatives, and non-profit agency funding.
Contributions to Reserves
The General Fund Reserve is maintained at 25% of General Fund budgeted operating expenditures. As such, the proposed budget includes an additional $227 thousand in FY 2024 and an additional $180 thousand in FY 2025 from the General Fund unassigned fund balance to contribute to the General Fund Reserve. The City’s Fiscal Policy to maintain a contingency reserve of 1% of budgeted General Fund operating expenditures to support unanticipated items that may occur during the budget years is fully funded. Due to several large capital projects that could experience cost overruns, the contingency budget in the proposed budget is increased to approximately 2.5% of budgeted General Fund operating expenditures in FY 2024 and 3.0% in FY 2025, reflecting a total of $1.00 million each year. The Risk Management Reserve for unanticipated risk management costs is fully funded and maintained at $250 thousand.
The proposed budgets maintain the $500 thousand City Facility Reserve. The proposed budget includes setting aside $2.00 million in FY 2024 and FY 2025 of the General Fund unassigned fund balance for a Budget Stabilization Set-Aside. This set-aside allows the City to manage a potential economic downturn by drawing down from the set-aside.
The proposed budget includes setting aside $1.00 million in FY 2024 and FY 2025 of the General Fund unassigned fund balance for a prepayment to CalPERS to reduce the City’s unfunded pension liability. This set-aside allows the City to manage and reduce the City’s costly unfunded accrued liability by reducing the 7.0% interest costs.
The $1.0 million represents prior years’ personnel cost savings. The proposed budget adds a TOT 1% set-aside for the Public Safety Facility project, representing the cumulative TOT 1% from FY 2023 through FY 2025, reflecting a $4.35 million set-aside. This set-aside could be used to support the pay-as-you-go portion of the proposed Public Safety Facility project.
City Goals and Other Initiatives
Staff has prepared a list of recommended items for Council’s review and approval, including the five City Goals and Other Initiatives (Attachment 1). The amounts of recommended items that are ongoing in nature and include enhancing service levels and address Council priorities, net of transfers, are $754,525 in FY 2024 and $894,905 in FY 2025. The amounts of recommended items that are one-time investments and include Capital Improvement Projects that address the City’s goals and critical infrastructure needs, net of transfers, total $12,345,290 in FY 2024 and $5,560,300 in FY 2025.
3.B-3Council Agenda 5-11-2023
FY 2024 Non-profit Agencies Funding
The proposed budgets do not assume any contributions to outside non-profit agencies, requests for which are heard by the Council each year, and the FY 2024 requests for which will be heard as a component of this special meeting agenda.
Should the Council approve any funding for these agencies, the fund balances in the respective funds would decrease. A separate staff report, provided as Item 3.C, will address the non-profit agency requests for City funding.
Conclusion and Recommendation
Staff recommends that the Council provide direction regarding the proposed budget, including proposed City goals and other initiatives for the budgets for Fiscal Years FY 2024 and FY 2025, effective July 1, 2023 through June 30, 2025 for the City of Pismo Beach.
After the Council provides direction, staff will return to Council on June 6, 2023 with a Resolution to adopt the FY 2024 and FY 2025 budgets.
FISCAL IMPACT:
The fiscal impact of providing direction on the proposed budget would result in the following all funds total budget amounts by fiscal year, including transfers between funds.
Table 4: FY 2024 and FY 2025 All Funds Total Proposed Budgets
Net of transfers, total revenue budget across all funds as proposed is $57.75 million in FY 2024 and $57.76 million in FY 2025. Also net of transfers, total expenditure budget across all funds as proposed is $58.56 million in FY 2024 and $53.45 million in FY 2025.
The following table illustrates the fiscal impact across all funds of the total budget by fiscal year, net of transfers between funds.
Total Budget
FY 2024 Proposed
Budget
FY 2025 Proposed
Budget
Beginning Fund Balance 38,821,569$ 38,009,173$ Revenues 71,913,083$ 66,579,399$
Expenditures 72,725,479 62,271,898
Net (Revs - Exps) (812,396)$ 4,307,501$
Ending Fund Balance 38,009,173$ 42,316,674$
3.B-4Council Agenda 5-11-2023
Table 5: FY 2024 and FY 2025 All Fund Proposed Budgets, Net of Transfers between Funds
ALTERNATIVES:
1. Propose changes to the proposed budget.
2. Request additional information from staff.
ATTACHMENTS:
1. FY 2024 & FY 2025 Proposed Budget City Goals & Other Initiatives Submitted by: Meeting Date: May 11, 2023
Nadia Feeser, Administrative Services Director
City Manager Approval:
Total Budget
FY 2024 Proposed
Budget
FY 2025 Proposed
Budget
Beginning Fund Balance 38,821,569$ 38,009,173$ Revenues 57,750,155$ 57,760,183$
Expenditures 58,562,551 53,452,682
Net (Revs - Exps)(812,396)$4,307,501$
Ending Fund Balance 38,009,173$ 42,316,674$
3.B-5Council Agenda 5-11-2023
City Goals
Community Character, Beautification, and Quality of Life for Residents Goal statement: Build on the strength of our local community to preserve the City’s “Classic California” charm and ensure an exceptional quality of life for residents.
Priorities:
Invest in neighborhoods including road, sidewalk, and park improvements Continue investments in sports courts and other amenities, including facilitating evening use Complete updates to the Local Coastal Plan, General Plan, and Zoning Code Implement community beautification strategies
Deliver exceptional services to the public
Invest in coastal access and bluff repair
Description FY 2024 Proposed
Budget
FY 2025 Proposed
Budget
James Way Beautification Project, 9-12 months construction 2,500,000 Relocate current sports courts on Bello Street to Ventana Drive due to Safety Center
2,101,000
Chumash and Palisades Park Improvements; replace play
structures
1,800,000
Install larger and more aesthetically pleasing restroom in the Addie Street Parking Lot
1,200,000
Shell Beach Parking Lot (Palisades Sports Courts
Restroom/Parking)
1,000,000
Paving Project - year 2 of the PMP 300,000 2,000,000 Construct a dog park within the current Spyglass Park grassy area
75,000
Contribution of 1% for General Fund Municipal Code Section
15.049.025 Public Art Program
55,100
Plaza maintenance: cleaning, repainting the play structure 30,000 30,000 Bello Vets’ Hall Window Replacement in kitchen area. 30,000 Replace the 5 outdated beach wheelchairs (originally
purchased in 2014)
15,000
Hinds Avenue/Ocean View Avenue Pedestrian Path 100,000
Purchase and install workout equipment at South Palisades Park
130,000
James Way Beautification maintenance 45,000
Downtown Boardwalk Extension Feasibility Study between
Main Street and Wadsworth
125,000
Ongoing maintenance of Ventana Sports Courts 10,000
Total $9,106,100 $2,440,000
Attachment 1
3.B-6Council Agenda 5-11-2023
Maintain a Focus on Public Safety
Goal statement: Focus on providing resources toward ensuring the safety of the community.
Priorities:
Build a state-of-the-art Public Safety Facility and enhance the Police presence in the downtown area
Prioritize the recruitment and retention of Police personnel Support technology investments that enhance public safety Description FY 2024
Proposed
Budget
FY 2025
Proposed
Budget
Police Parking Annex 1,050,000
Crossroads E-Citation System 49,280 2,500
Body Camera Replacement 42,710
Advanced Rope Rescue Equipment, Equipment for cliff/confined space rescue
10,000
Annual Hose Testing 6,500 6,500
Mobile Data Computer (MDC) for E63 6,000
-
MCV Satellite Internet 5,120 1,620
Reg. SWAT Team Budget Share Annual Contribution 5,000 5,000 WatchTower program, Statistics tracking program for Lifeguard Dept 2,250 2,250 Increase in Annual MDC Service Agreement 2,000 2,000 New Weed Abatement Inspection Program, better tracking and automation.
1,500 1,500
Body Camera Replacement, License & Support Fee 4,875
Total $1,180,360 $26,245
Water Supply, Conservation and Central Coast Blue
Goal statement: Sustain the City's water supply by completing Central Coast Blue and pursuing access to new, high-quality and reliable water sources; promoting conservation; and conducting public outreach and education.
Priorities:
Implement Central Coast Blue, working with partner agencies Promote water conservation
Pursue additional water supplies and options for storage Conduct public outreach and education
Attachment 1
3.B-7Council Agenda 5-11-2023
Description FY 2024
Proposed
Budget
FY 2025
Proposed
Budget
Charles Street Reservoir and Bello Reservoir Roof Replacement 1,210,000 Construct new drinking water production well to replace Well 23 2,000,000 Total $1,210,000 $2,000,000
Traffic, Circulation and Parking
Goal statement: Improve traffic flow and parking assets to meet the needs of current and future residents and visitors.
Priorities:
Continue to work on downtown parking solutions, including acquiring additional parking assets, and adopt strategies outlined in the Parking Management Plan Complete and implement the Bicycle and Pedestrian Master Plan, and maintain existing infrastructure
Complete the acquisition of Dolliver Street from the state and make circulation improvements in accordance with the General Plan Circulation Element Description FY 2025
Proposed
Budget
Signalize the Bello Street/Price Canyon Road intersection to allow for easier crossing of Price Canyon Road
400,000
Dolliver Street/Pomeroy Avenue Pedestrian Scramble 50,000 Total $450,000
Attachment 1
3.B-8Council Agenda 5-11-2023
Other Initiatives
Technology Projects
Category
Description FY 2024
Proposed
Budget
FY 2025
Proposed
Budget
Communication One-time Replace PD's phone system with Teams Phone System 17,600$ Ongoing Replace PD's phone system with Teams Phone System 14,400 14,400 One-time Wireless Access Points for Shell Beach Vets Hall 5,000 Ongoing Internet Services for Shell Beach Vets Hall 1,920 1,920 Communication Total 38,920$ 16,320$
Department One-time Parks & Recreation System Improvements and Training 25,000 Software One-time Police scheduling and shift tracking software 15,000 15,000 Application Ongoing Police scheduling and shift tracking software 10,000 10,000 Ongoing Time and Attendance System, Online employee time tracking system with payroll integration
6,500 6,500
One-time Online employee time tracking system with payroll integration 5,500 One-time Electronic travel forms and reimbursement process 25,000 Ongoing Track AD changes and consolidate logs for simplified review 25,000 One-time Citywide document management and records retention 57,600 Ongoing Citywide document management and records retention 10,800 Department Software Application Total 62,000$ 149,900$ Disaster Ongoing Managed detection and response solution 65,000 65,000 Recovery One-time Disaster Recovery Planning, Simplified process based on cloud restore capabilities
15,600
One-time Cybersecurity incident response planing 9,000
Disaster Recovery Total 89,600$ 65,000$
Infrastructure/Ongoing Tablet Replacements 5,000 5,000 Equipment Ongoing IT Operations Enhancements, Patch management system 4,500 4,500 Ongoing IT Operations Enhancements, IT inventory management system 3,500 3,500 Infrastructure/Equipment Total 13,000$ 13,000$ Public Safety Ongoing Increased coverage for the Public Safety Camera System, includes new/replacement cameras, storage of the video
75,000 75,000
Public Safety Total 75,000$ 75,000$
Security One-time City Hall IT Room improvements 40,000 One-time SCADA security 35,400
Ongoing 24 hours support for City Security Cameras, includes spare parts to ensure up-time
20,000 20,000
One-time WW Plant PLC and associated modules security update 20,000 One-time Multi-factor authentication 17,100 15,200 Ongoing Password Manager for all City Staff 15,360 15,360 Ongoing Multi-factor authentication 15,120 15,120 One-time IT security assessment 35,000
One-time PCI compliance review 10,000
Security Total 162,980$ 110,680$
Training Ongoing User Training and Support, Office and Departmental training 10,000 10,000 One-time User Training and Support, SharePoint/OneDrive training 5,000 Training Total 15,000$ 10,000$
Total 456,500 439,900
Attachment 1
3.B-9Council Agenda 5-11-2023
Other Initiatives
Description FY 2024
Proposed
Budget
FY 2024
Proposed
Budget
One-time Cypress Avenue and Dolliver Street Bridge and Pier Inspection & Structural Review
275,000
One-time Contribution event funding requests 150,000
One-time Paint the exterior of City Hall, including repair of any damaged wood, replace screens, etc.
125,000
One-time Update the 2005 Master Drainage Plan for Heights and Downtown, create a Shell Beach Drainage Master Plan, study existing drainage on Price Canyon
75,000
One-time Finance Records Retention Compliance for General Ledger and Payroll
30,000
One-Time Determine resident awareness 25,000
One-time City Hall Window Treatment 20,000
Ongoing HVAC Maintenance 15,000 15,000
One-Time Education Campaign: Supplies, postage, printing, informational collateral
5,000 20,000
One-time Install a valve in the 16" force main at Addie St 200,000 One-time Slurry seal paved areas at the Corp Yard to preserve the pavement 250,000 One-time El Portal Outfall 60,000
Total $720,000 $545,000
Positions
Description FY 2024
Proposed
Budget
FY 2024
Proposed
Budget
Ongoing New Accountant position 129,792 133,475
Ongoing Engineering Tech to Assistant Engineer 26,223 27,010 Ongoing Management Analyst to Human Resources Officer 14,878 15,324 Ongoing Senior Engineer to Engineering Manager 13,109 13,504 Ongoing Management Analyst to Senior Management Analyst 8,887 9,153 Ongoing Engineer to Senior Engineer 7,401 7,622
Ongoing Administrative Secretary to Executive Assistant 6,944 7,153 Ongoing Records Coordinator to Lead Records Coordinator 6,621 6,819 Total $213,855 $220,060
Attachment 1
3.B-10Council Agenda 5-11-2023