Proposed Annual Operating Budget & CIP
Fiscal Year 2024-25
June 4, 2024
Economic Challenges
•Sales tax revenue 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
•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 800 M Hz 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
Proposed use of $495,811 in general reserves
Proposed utilization of Measure U reserve contribution of $888,600 for operating 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 4
Long -Term Fiscal Sustainability Options
*Not Current Staff Recommendations
• Additional Sales Tax Measure (Transactions & Use Tax) Maximum sales tax rate in California is 10.25%
City's current tax rate is 8.75%
6% -State
0.75% County
1.0% City of Placentia Sales Tax (Bradley Burns)
1.0% Measure U (Transaction Tax)
City, County, and some Special Districts can put sales tax measure on ballot Majority Voter approval required
Unlike Sales tax, Transaction taxes capture online sales and are not shared by County pool
Additional Tax Rate
Projected Revenue
0.5%
$4,448,000
$8,896,000
$13,344,000
Long -Term Fiscal Sustainability Options
*Not Current Staff Recommendations
Orange County cities that have passed a Transactions & Use Tax Measure are:
ma
Date Passed
Los Alamitos
Santa Ana
Westminster
Fountain Valley
Garden Grove
La Palma
Seal Beach
Stanton
La Habra
9.25%
9.25%
9.25%
8.75%
8.75%
8.75%
8.75%
8.75%
8.25%
November 2020
November 2018
March 2024 (0.5%)
November 2022 (1.0%)
November 2016
November 2018
November 2016
November 2018
November 2014
November 2008
Long -Term Fiscal Sustainability Options
• Increase Transient Occupancy Tax (TOT) rate
City's current tax rate is 10%
Majority voter approval required
Tax paid by visitors, not residents
Additional Tax Rate
Projected Revenue
1.0%
$184,000
2.0%
$368,000
*Not Current Staff Recommendations
Long -Term Fiscal Sustainability Options
Current Orange County TOT Rates:
TOT Tax Rate
Anaheim 15.0%
Buena Park 15.0%
Seal Beach 15.0%
Garden Grove 14.5%
Tustin 13.0%
La Palma 12.0%
Laguna Beach 12.0%
Stanton 12.0%
Santa Ana 11.0%
Brea 10.0%
Cypress 10.0%
Dana Point 10.0%
Fullerton 10.0%
Huntington Beach 10.0%
Laguna Hills 10.0%
Laguna Woods 10.0%
*Not Current Staff Recommendations
TOT Tax Rate
Lake Forest
Newport Beach
Orange
PIar pntia
San Clemente
San Juan Capistrano
Yorba Linda
Irvine
Fountain Valley
Costa Mesa
Laguna Niguel
Los Alamitos
Mission Viejo
Westminster
Aliso Viejo
La Habra
Rancho Santa Margarita
Villa Park
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
9.0%
8.0%
8.0%
8.0%
8.0%
8.0%
0.0%
0.0%
0.0%
0.0%
Long -Term Fiscal Sustainability Options
*Not Current Staff Recommendations
• Implement Cannabis tax
Majority voter approval required
If approved, City Council has discretion to set policy on operations including limiting the number of retail
establishments and allowable locations in the City
For cannabis sales, City would get 1% sales tax, 1% Measure U in addition to the additional cannabis tax
Maximum tax rate is 10% per State law
Santa Ana 10%
Some neighboring agencies dedicate all funds raised by Laguna Woods 10% cannabis tax to community and youth services, code
enforcement and/or public safety Stanton 5%
Costa Mesa
7%
Long-Term Fiscal Sustainability Options
• Ongoing activities
Consistently seek grant funding opportunities for capital improvements and infrastructure enhancements
Aggressively pursue new retail and/ or hotel opportunities to increase sales tax and TOT base (Economic Development)
Analyze possible new revenue sources including ways to monetize service delivery wherever possible
Utilize Section 115 trust to mitigate against future CaIPERS losses Review fees annually to ensure cost recovery
Monitor all expenses including vacant positions to ensure agency is right sized and efficient in its spending
Continue to evaluate CFDs to support eligible operations expenses Analyze potential parcel tax, however these are typically unsuccessful at the ballot
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
4%
General Fund Operating Revenues
Property Taxes
Sales & Use Taxes
f
Other Taxes
Permits
Fines & Forfeitures
Intergovernmental
Charges for Services
Miscellaneous
Total Operating Revenues
Transfers In
Measure U Transfers In
Employee Retention
OPEB
Measure U Reserve
Total Transfers In
Total Resources
FY 2023/24
Amended Bud et
$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
FY 2023/24 Year
End Estimates
$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
FY 2024/25
Pro • osed Bud et
$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
Variance to
FY23/24
Amended Bud et
6.8%
(2.8%)
5.2%
6.5%
4.3%
(91.6%)
2.0%
(13.2%)
(4.2%)
(56.8%)
3,337,946 3,225,000 2,665,800 (20.1%)
1,112,649 1,075,000 888,600 (20.1%)
920,000 860,000 888,600 (3.4%) a"d<"
6,423,345 6,207,800 4,898,100 (23.7%)
$53,931,475 $53,209,136 $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%
Ems
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.
Citywide FTE by Department- 200.0 FTE
29 M1=1
30 11
32 FY24/25 Proposed
• Admin. Svcs
• Comm Svcs
Finance
• Fire
• Dev Svcs
1 Police
• PW
• City Administrator
Excludes Over -hires
Capital Improvement Program (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
/
1 Total New CIP Funding:
$19,601,425
‘ r
General Fund
$180,000
Dev. Impact Fees
$987,750
Measure M
$1,203,000
1,203,000
60,000
28,000
50,000
25,000
10,000,000
100,000
FY 2024/25 CIP Projects by Restricted Funds
Streets & Streetscapes
Streets & Streetscapes
Traffic and Transportation
ro'ect Descri • tion
■
FY 23-24 Roadway Rehab Construction
FY 23-24 Roadway Rehab Construction
Yorba Linda TSSP
City Buildings & Facilities 117 N. Main Street Building Demolition Parks
Parks
Parks
Restroom Renovations (Citywide)
McFadden Park Playground Renovation
Kraemer Park Memorial Fountain Design
City Buildings & Facilities Fire Station 1 Generator Replacement Streets & Streetscapes
FY 23-24 Roadway Rehab Construction
Traffic and Transportation Traffic Signal Back -Up Batteries Streets & Streetscapes
Vehicles and Equipment
Major Studies
Major Studies
Major Studies
Old Town Streetscape Improvements
Fire Station 2 Body Armor Replacement
Chapman Corridor Revitalization Plan
DIF Update and Creation of Successor Public Safety
CFD Study
SP5 Update
undin Source
Measure M (0018)
TOD Streetscape Impact Fee (0072)
AB 2766 (0019)
Citywide Affordable Housing Impact Fee (0068)
Citywide Parks & Rec Impact Fee (0063)
Citywide Parks & Rec Impact Fee (0063)
Citywide Parks & Rec Impact Fee (0063)
Citywide Public Safety Impact Fee (0067)
Citywide Storm Drain Impact Fee (0066)
Citywide Traffic Impact Fee (0065)
EIFD (0086)
Fire Impact Fee (0089)
General Plan Update Fee (0074)
General Plan Update Fee (0074)
General Plan Update Fee (0074)
185,300
75,000
90,000
40,000
10,000
6,000
127,000
98,000;tr�TES
1 FY 2024/25 CIP Projects by Restricted Funds
Pro'ect Descri • tion
Fundin : Sourc
Streets & Streetscapes
Traffic and Transportation
Traffic and Transportation
Vehicles and Equipment
Technology
City Buildings & Facilities
Vehicles and Equipment
Parks
Traffic and Transportation
Streets & Streetscapes
Traffic and Transportation
FY 23-24 Roadway Rehab Construction
Misc. Grants (0050)
Atwood Trail Project - Final Eng Design Misc. Grants (0050) Yorba Linda TSSP
HLO Truck Liftgate
Council Chambers / Media Room
Upgrade
Misc. Grants (0050)
Misc. Grants (0050)
PEG Fund (0058)
Fire Station 1 Generator Replacement Public Safety CFD (0055) Fire Station 2 Radio Communication
Equipment
Dog Park Design
Atwood Trail Project - Final Eng Design
Public Safety CFD (0055)
Quimby In -Lieu (0069)
Quimby In -Lieu (0069)
FY 23-24 Roadway Rehab Construction SB 1/ Gas Tax-RMRA (0060) Residential Street Curb Ramps
SB 1/ Gas Tax-RMRA (0060)
Total Restricted Funds
1 557,000
272,800
105,001
7,000
69,000
110,000
32,875
56,250
37,200
1,497,000
100,000
FY 2024/25 CIP Projects by Unrestricted Funds
City Buildings & Facilities
ro'ect Descri • tion
Powell Building Improvement Project - Window
Replacements
City Hall/Police Station Modernization Project Windows
City Buildings & Facilities Design
City Buildings & Facilities
UST Removal and Replacement at Corporate Yard
City Buildings & Facilities Tynes Gym Roof Replacement
Parks
McFadden Park Playground Renovation
Parks Tuffree Park Sports Fields Lights
Streets & Streetscapes
FY 24-25 Concrete Repair Program
Streets & Streetscapes FY 24-25 Annual Tree Planting
Streets & Streetscapes
FY 24-25 Roadway Rehab Design
Streets & Streetscapes FY 23-24 Roadway Rehab Construction Technology
Technology
Develop Cybersecurity Plan
Council Chambers / Media Room Upgrade
Fundin : Source
Measure U (0079)
Measure U (0079)
Measure U (0079)
175,000
31,000
100,000
Measure U (0079) 416,000
Measure U (0079)
460,000
Measure U (0079) 185,000
Measure U (0079)
Measure U (0079)
Measure U (0079)
Measure U (0079)
Measure U (0079)
Measure U (0079)
L3
155,000
10,000
150,000
1,423,000
60,000
40,000
FY 2024/25 CIP Projects by Unrestricted Funds
Technology
Technology
Technology
Technology
Technology
Traffic and Transportation
Vehicles and Equipment
Vehicles and Equipment
Vehicles and Equipment
Vehicles and Equipment
Vehicles and Equipment
Vehicles and Equipment
Pro'ect Descri • tion
Desktop Computer Replacement Program
City Facilities Server/Network Upgrades
Financials ERP Software System
Financials ERP Software System
Network Security Vulnerability and Penetration Testing
Wayfinding Signs - Residential Street Name Sign
Replacements
Public Works Superintendent Truck Replacement
Public Works Superintendent Truck Replacement
Reserve Fire Truck
Loader Replacement
Public Works Ford Ranger Replacement (1)
Chipper Truck Replacement
Fundin Source
Measure U (0079)
Measure U (0079)
Measure U (0079)
Technology Impact Fees (0075)
Measure U (0079)
Measure U (0079)
Equipment Replacement (0041)
Measure U (0079)
General Fund (0010)
Measure U (0079)
Measure U (0079)
Measure U (0079)
Total Unrestricted Funds
75,000
50,000
240,000
60,000
60,000
250,000
20,000
60,000
180,000
290,000
90,000
80,000
$4,660,000
Fullerton
f
Citywide Paving Schedule
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M
F
PAVEMENT
REHABILITATION
i.
MAINTENANCE
SCHEDULE
"No Street Left Behind"
Public il'irks Deportment
Updated on May 39y 2024
Pavement Project Schedule
6""ign Y.r Cumrlr llrn Yrrrr
completed Completed
]'1x1.23 2023.24
3A23-24 2624.25
7M13S-7F
261:1-20 7U26-27
2626i}7 3027-219
2627.28 2029.29
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Miles •,nW+k.t1,:1n..,rxrerr..W.,1u1+„na,4.,,s, ' .
Recommendations
1. Conduct the Public Hearing concerning the City of Placentia Budget for Fiscal Year 2024-25 and Capital Improvement Program (CIP) for Fiscal Year 2024-25; and
2. Adopt Resolution No. R -2024 -XX, a Resolution of the City Council of the City of Placentia, California, taking actions necessary to adopt the Fiscal Year 2024-25 Annual Budget; and taking actions necessary to adopt the Fiscal Year 2024-25 Capital Improvement Program (CIP) Budget with an appropriation of $19,601,425; and authorizing the Position Allocation Plan and Compensation Plan for Fiscal Year 2024-25; and
3. Authorize the City Administrator to release appropriation controls for the General Government Department and Risk Management fund outside of the normal quarterly process, as necessary; and
4. Approve the use of the County's population growth and California per capita income growth as determined by the State Department of Finance for the calculation of the Fiscal Year 2024-25 Annual Appropriation Limit; and
5. Adopt Resolution R -2024 -XX, a Resolution of the City Council of the City of Placentia, California, approving and adopting the Annual Appropriations Limit for the Fiscal Year 2024-25 in the amount of $117,320,406; and
6. Provide direction to staff to research long-term fiscal sustainability options potentially with assistance from the Citizens' Oversight Committee.
Recommendations
It is recommended that the Placentia Public Financing Authority take the following actions:
1. Conduct the Public Hearing concerning the Placentia Public Financing Authority Budget for Fiscal Year 2024-25; and
2. Adopt Resolution No. PPFA-2024-XX, a Resolution of the Placentia Public Financing Authority (PPFA) Board of Directors of the City of Placentia, California, taking actions necessary to adopt the PPFA's Fiscal Year 2024-25 Annual Budget.
Questions?
PLACENTIA
Rich Heritage, Bright Future