Proposed Annual Operating Budget & CIP
Fiscal Year 2024-25
May 21, 2024
Presentation Overview
• Economic Challenges
• FY 2024/25 Proposed Budget Overview (All Funds)
• FY 2024/25 Proposed General Fund Budget
• Position Allocation (staffing)
• Measure U
• Fund Balance Projections
• Capital Improvement Program (CIP)
• Next Steps
Economic Challenges
•Sales tax trending downward Statewide
State down 2.5%, Placentia down 4.9% after 4th
Quarter 2023 (most recent data available)
Persistently high interest rates negatively impacting
purchase of new and used vehicles
Consumer spending patterns have changed. Priority
for travel or experiences, shift towards lower cost
restaurants or eating at home, and less purchases
of consumer goods.
Gas prices down compared to last year.
6 of the City's top 25 sales tax producers are gas stations
LOCAL NEWS
99 Cents Only to close down
all stores
by: Vivian Chow
Posted: Apr 4, 2024/ 07:07 PM PDT
Updated: Apr 4, 2024/07:07 PM PDT
CVS to close around 900 stores, nearly 10% of
its locations
Affected employees will be offered jobs at nearby locations.
By Jordan Valinsky, CNN Business. CNNWire
Friday, November 19, 2021
o x o n e p
Fed's Powell says high interest rates
may 'take longer than expected' to
lower inflation
Paul Davidson
'USA TODAY
PJdl 511e1 11.54 a in. ET Vay 14. 2024 1 Updated 1:07 p.m. ET May 14, 2024 Federal student loan interest rate will rise to
highest level in 12 years
c)
Facing Budget Woes,
Santa Ana Officials Form
Spending Priorities for
Next Year
Apr 8, 2024
City of orange Faces 519
Million Budget Shortfall,
Major Service Cuts Loom
May 14, 2024
■
Economic Challenges
•Expense increases outside the City's control:
Unfunded Actuarial Liability (UAL) payment of $447,000 to CaIPERS required due to their recent rate of returns
Increase of approx. $1.3 million in personnel expenses due to Memoranda of Understandings and merit increases
Increased insurance costs- $400,000
Increased 800MHz costs- $140,000
Higher costs of goods and services citywide
Unfunded capital needs identified in recently completed facility and IT assessments
City's Response to Challenges
•Initial deficit of $3.8 million identified at beginning of budget preparation process
Departments were asked to make reductions up to 5%
Hiring "frost" implemented for non-public safety or non -revenue generating positions
Proposed use of funds from the Section 115 trust to make UAL payment and 75% of retiree medical payments
Deeper analysis of revenues conducted
Proposed use of $495,811 in general reserves
Proposed utilization of Measure U reserve contribution of $888,600 for operating
City's Response to Challenges
• 87% of budget deficit managed through department reductions and other measures
• Proposed budget projected to keep City at 27.4% reserve level • This equates to a 2.4% or $1,072,520 cushion above reserve target goal of 25% set by Policy 460
Initial Deficit
Department Reductions & Other Measures
3,287,240 ME -87%
Proposed use of GF Reserves
495,811
13%
Proposed FY 2024/25 Budget All Funds - in millions
Total Proposed Revenues- $95,329,478
Total Proposed Expenditures- $99,225,368
Operating
80%
Internal
Service
5%
Fiduciary
5%
Debt
Service
FY 2024/25 Proposed Budget Overview (All Funds)
Fund T • e
General Fund
Special Revenue
Debt Service
Ca • ital Pro'ects Fund
Enterprise
Internal Service
Revenues &
Tra n sf - s In
$50,430,128
27,579,237
407,750
6,169, 640
4,593,969
4,657,704
1,491,050
$95,329,478
Expenditures &
Out
$50,925,940
31, 021,820
407,750
456,000
5,646,040
4,613,969
4,662,800
1,491,050
$99,225,368
Net Incl./ (Decr) to
F • d Balance
($495,812)
(3,442,583)
(456,000)
523,600
(20,000)
(5,096)
INNER
Proposed FY 2024/25 Budget
General Fund Revenues - $50,430,128
Intergovernmental
1%
Charges for Services
3%
Misc. Revenue
4%
-
Fines & Forfeitures..
1%
TOT
23,000,000
21,000,000
19,000,000
17,000,000
15,000,000
General Fund Revenue - Top Sources
Property Tax
FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 FY24/25 Projected Proposed
tPro perty Tax
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
Sales Tax
FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 FY24/25 Projected Proposed
—e—Sales Tax
General Fund Operating Revenues
FY 2023/24 Amended
Bud et
FY 2023/24 Year End
Estimates
FY 2024/25 Proposed
Bud:et
Variance to FY23/24
Amended Bud et
Property Taxes
Sales & Use Taxes
Other Taxes
Permits
Fines & Forfeitures
Intergovernmental
1 1
w
4 Charges for Services
Miscellaneous
Total Operating Revenues
Transfers In
Measure U Transfers In
Employee Retention
OPEB
Measure U Reserve
Total Transfers In
Total Resources
$20,414,944
8,650,000
7,509,236
2,618,000
465,000
3,712,950
1,684,000
2,454,000
47,508,130
1,052,750
3,337,946
1,112,649
920,000
6,423,345
$53,931,475
$20,269,659
8,130,000
7,707,500
2,573,350
464,953
3,714,350
1,584,122
2,557,402
47,001,335
1,047,800
3,225,000
1,075,000
860,000
6,207,800
$53,209,136
$21,796,023
8,408,000
7,896,040
2,788,900
485,000
312,000
1,716,990
2,129,075
45,532,028
455,100
6.8%
(2.8%)
5.2%
6.5%
4.3%
(91.6%)
2.0%
(13.2%)
(4.2%)
(56.8%)
2,665,800 (20.1%)
888,600 (20.1%)
888,600 (3.4%)
4,898,100 (23.7%)
$50,430,128 (6.5%)
Proposed FY 2024/25 Budget
General Fund Expenditures - $50,925,940
Operating
$44,143,318
87%
Debt Service
$6,458,866
13%
Transfers Out
$143,756
0%
Capital
Projects
$180,000
0%
FY 2024/25 General Fund Expenditures by
Department
De • artment
FY 2023/24
Amended Bud:e
FY 2023/24 Year
End Estimates
FY 2024/25
Pro • osed Bud e
Variance to
FY23/24 Amended
Bud • et
Legislative
City Administrator
Administrative Services
Community Services
Development Services
Fire & Life Safety
Police
Public Works
General Government
Total Expenditures
1,139,000
1,054,134
6,338,088
3,377,417
1,819,556
1,346,368
4,768,558
13,913,476
4,939,091
5,498,200
44,193,888
937,640
1,064,696
6,297,332
3,048,361
1,904,671
718,243
4,835,881
14,256,982
4,575,085
5,362,568
43,001,459
1,075,316
1,055,675
6,662,469
3,513,350
1,782,450
1,370,550
5,233,350
14,738,672
3,999,786
4,711,700
44,143, 318
(5.6%)
0.1%
5.1%
4.0%
(2.0%)
1.8%
9.7%
5.9%
(19.0%)
(14.3%)
(0.1%)
Position Allocation
• Proposed budget includes funding for 200.0 FTE
employees, and authorization for 4.0 FTE overhires in
Police and Public Safety Communication Departments
• There are no proposed staffing changes proposed for
FY 2024/25
• Hiring "Frost" currently in place. Public Safety and revenue generating positions will be filled, all others will remain vacant as long as possible.
LAM
MM
180
140
100
60 20
Citywide FTE by Department
200.0 FTE
12 30
9 11
32 FY23/24 Amended
200.0 FTE
12 30
9 11
32 FY24/25 Proposed
• Admin. Svcs • Comm Svcs • Finance • Fire • Dev Svcs • Police • PW • City Administrator Excludes Over -hires
General Fund Reserve Policy
General Fund Reserve Policy 460 was designed as a result of approval of Measure U by voters and establishes:
• Guidelines for reserves
• Minimum contingency reserve of 25% of operating
expenditures
• Allocation formulas for new, unrestricted on-going and one-time revenues for specific purposes
• Purposes and uses of reserves
FY 2023/24 - Measure U
Contributions to Reserves
• The Proposed FY 2024-25 Budget
includes the use of the 10%
contribution to the Measure U -
Contingency Reserve ($888,600),
to support operations.
• Staff met with and discussed this
proposal with the Citizens'
Oversight Committee on May 13,
2024, and they support this
recommendation.
2024-25 Proposed Measure U Budget - $8,886,000
Current Allocations
Infrastructure, Vehicles, and Equipment
Post -Employment Benefits Sustainability*
After GF
Reserve Target Amount
Met*
50%
$4,443,000
10%
$888,600
Employee Recruitment and Retention (including
additional staff)
Measure U Contingency Reserve
30%
$2,665,800
10%
$888,600
Reserve target of 25% has been met
10,000,000
7,000,000
4,000,000
1,000,000
Measure U Historical Performance
FY18/19
FY19/20 FY20/21
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
FY21/22 FY22/23 FY23/24 Proj. FY24/25 Prop.
Sales Tax
1 FY 2024/25 Proposed General Fund
Fund Balance
Estimated Be: innin: Fund Balance 7 1 2024
Projected Change in Fund Balance
Projected Ending Fund Balance at 6/30/25
Fund Balance Designations
Non -Spendable
Restricted
General Fund Reserve
Contingency Reserve
Unassigned Fund Balance
1/11 w
$14 370 851
(495,811)
$13,875,040
1,766,691
5,285,547
5,750,282
1,072,520
Estimated Endin: Fund Balance 6 30 25
$13 875 040
Projected Operating Expenditures
25% FB Target
Reserve total (FB less Non -Spendable)
General Fund Operating Reserve %
44,143, 318
11,035,829
12,108,349
27.43%
Contingency
Reserve/Unassigned
Fund Balance
*� Projected- 27.4%
4— Goal- 25%
Capital Improvement Program (CIP)
What is the CIP?
The City's Capital Improvement Program
(CIP) identifies major public improvements
to the City's infrastructure for the next year
and includes new projects and carryover
projects from previous years encompassing
upgrades to existing facilities as well as
rehabilitation of streets and roadways.
Capital Improvement
Program (CIP) by Project Types
Total
Of Total Projects
New Project New CIP with
Project Type Count Funding Carryover
Streets & Streetscapes
Traffic and Transportation
Sewer
Storm Drain
City Buildings & Facilities
Technology
Parks
Vehicles
Major Studies
Total
5 0
0 6
6 5
8 4
39 $15,205,300 77.6% 13
835,000 4.3% 11
0 0% 0
0 0% 0
947,000 4.8% 22
654,000 3.3% 10
869,250 4.4% 17
765,875 3.9% 10
325,000 1.7% 9
$19,601,425 100.0% 92
CIP Projects by Funding Source
Misc. Other
Sources $1,233,675
Total New CIP Funding:
$19,601,425
General Fund
$180,000
Dev. Impact Fees
$987,750
Measure M
$1,203,000
CIP Projects: Parks
Tuffree Park Sports Fields Lights 185,000
Dog Park Design (65% Completion) 106,250
Restroom Renovations (Citywide) 28,000
McFadden Park Playground Renovation 500,000
Kraemer Park Memorial Fountain Design 50,000
Total Parks $869,250
CIP Projects: Streets
Amount
Old Town Streetscape Improvements
FY 24-25 Concrete Repair Program
10,000,000
155,000
FY 24-25 Annual Tree Planting
10,000
FY 23-24 Roadway Rehab Construction 4,890,300
FY 24-25 Roadway Rehab Design
150,000
Total Streets $15,205,300
CIP Projects: City Buildings
City Hall/Police Station Modernization Project
Windows Design
31,000
Fire Station 1 Generator Replacement
150,000
117 N. Main Street Building Demolition
75,000
UST Removal and Replacement at Corporate
Yard
100,000
Powell Building Improvement Project - Window
Replacements
175,000
Tynes Gym Roof Replacement
416,000
Total City Buildings $ 947,000
CIP Projects: Traffic & Transportation
Type of Project
Traffic &
Transportation
Traffic &
Transportation
Traffic &
Transportation
Traffic &
Transportation
Traffic &
Transportation
Traffic Signal Back -Up Batteries
Atwood Trail Project - Final
Engineering Design
Residential Streets Curb Ramps
Yorba Linda TSSP
Wayfinding Signs - Residential Street
Name Sign Replacements
Total Traffic
10,000
310,000
100,000
165,000
250,000
$835,000
Type of Project
Technology
Technology
Technology
Technology
Technology
Technology
CIP Projects: Technology
Desktop Computer Replacement Program
City Facilities Server/Network Upgrades
Financials ERP Software System
Network Security Vulnerability and Penetration
Testing
Develop Cybersecurity Plan
Council Chambers/Media Room Nec. Tech Upgrades
Total Technology
75,000
50,000
300,000
60,000
60,000
109,000
$654,000
CIP Projects: Vehicles & Equipment
Vehicles & Equipment Reserve Fire Truck
Vehicles & Equipment Fire Station 2 Radio Communication Equipment
Vehicles & Equipment Fire Station 2 Body Armor Replacement Vehicles & Equipment Public Works Loader Replacement
Vehicles & Equipment Public Works Ford Ranger Replacements (2) Vehicles & Equipment HLO Truck Liftgate
Vehicles & Equipment Chipper Truck Replacement
Vehicles & Equipment Public Works Superintendent Truck
Replacement
Total Vehicles
180,000
32,875
6,000
290,000
90,000
7,000
80,000
80,000
$765,875
Type of
Project
CIP Projects: Major Studies
Project
Major Chapman Corridor Revitalization Plan
Studies Sewer Study
Major Chapman Corridor Revitalization Plan
Studies Streetscape Master Plan
Major DIF Update and Creation of Successor
Studies Public Safety CFD Study
50,000
50,000
127,000
Major
Studies Specific Plan 5 (SP -5) Update 98,000
Total Major Studies $325,000
Recommendations
It is recommended that the City Council take the following actions:
1. Review and discuss the Proposed FY 2024-25 Annual
Operating Budget and CIP and provide input and direction for final budget adoption; and
2. Set the date of the public hearing for budget adoption as June 4, 2024, at 7:00 p.m.
Questions?
PLACENTIA
Rich Heritage, Bright Future