Attachment 3
CITY OF POMONA City Manager’s FY 2022-23 Proposed Budget
TONIGHT’SPRESENTATIONOperating Budget•General Fund•Other Funds CIP Budget
BUDGET AT-A-GLANCE ALL FUNDS
Revenue estimates are based on:•City’s sales and property tax consultant•Reports from various State and Federal agencies (i.e. League of California Cities, HUD, Department of Finance, State Controller’s Office, etc.)Includes $6.8M in ARP public sector lost revenueCannabis Tax revenues increase by $1.8M; Cannabis Community Benefit Fund of $250kAll bargaining unit agreements have a 2.5% salary increase in October 2022 FY 2022-23 KEY BUDGET ASSUMPTIONS
LA County Fire District Contract increased by $355kPOB principal payments begin, increase in debt service of $7.4M$6.4M (General Fund)Reduction of $600k to Humane Society contract$197k loan payment to SoCal Renewable Energy Network (SoCalREN) for energy efficiency upgrades to the Library and Palomares Park Includes $1.3M Youth Commitment, for a total of $10M over 5 years FY 2022-23 KEY BUDGET ASSUMPTIONS
Supplemental request for non-personnel capital items of $1.4M in General Fund and $1.7M in Other FundsIncludes a total of 13 Full Time Equivalent (FTE) position changes and 7 position reclassifications. As a result, General Fund appropriations will increase by $520k and $955k in Non-General FundsPer Section IX, Items 5 and 12 (Capital Improvement Program and Asset Replacement) of the Fiscal Sustainability Policy require a dedication of General Fund revenue to the Capital Improvement Program and the appropriation for Equipment Replacement •Proposed Budget includes $360k General Fund contribution to CIP , not at 1% •$200k for Building and Equipment Replacement Fund FY 2022-23 KEY BUDGET ASSUMPTIONS
GENERAL FUND
TOTAL FY 2022-23 GENERAL FUNDRevenues$ 141,545,287 Appropriations $ 141,487,751Surplus $ 57,536 FY 2022-23 PROPOSED GENERAL FUND REVENUES
Compared to FY 2021-22 Revenue Estimates•Property Tax projected increase of 10% or $4M, of the $4M, $1.2M is for increase in RPTTF•Sales Tax is to experience overall growth of 9% or $3.3M•UUT estimated to increase by 3%•Other Revenues overall increase of $4.7M (TOT, Business License)Cannabis Tax revenues increase by $1.8M$6.8M in ARP public sector lost revenue FY 2022-23 PROPOSED GENERAL FUND REVENUES
FY 2022-23 PROPOSED GENERAL FUND EXPENDITURES BY DEPARTMENT
FY 2022-23 PROPOSED GENERAL FUND EXPENDITURES BY SPENDING CATEGORYCompared to FY 2021-22
CHANGES SINCE MARCH 30 & APRIL 6 COMMUNITY BUDGET MEETINGSGeneral Fund preliminary deficit of $6.5M•Additional revenues of $10.2MSales Tax +$1.3MProperty Tax +$200kARP +$6.8MTOT +$100kCannabis +$100kBusiness License+$200kProperty Transfer Tx +$75kWater Transfer +$85k/Paramedic Pass-Through +$600k/PD POST Training +$61k•Additional appropriations of $3.6MPersonnel changes -$357kControllable expenses +$2.3M (includes $1.3M Youth Commitment)Required Expenses -$52kSupplemental requests +$756kTransfers to Other Funds +$348k FY 2022-23 PRELIMINARY VS. PROPOSED GENERAL FUND
FY 2022-23 PROPOSED GENERAL FUND FY 2022-23 Preliminary Budget Deficit (Mar 30 & Apr 6) ($6.5M)Revised Revenue Estimates $10.2MNew Appropriations ($3.6M)FY 2022-23 Proposed Budget Surplus $ 58k FY 2022-23 GENERAL FUND BALANCE / RESERVES
FY 2022-23PROPOSED STAFFING CHANGES
STAFFING STATISTICS•610.80 full time equivalent (FTE) positions proposed in FY 2022-23•High Point of 666 FTE in FY 2009-10
•July 2020, the City implemented POBs to address the City’s Unfunded Accrued Liability(UAL) for miscellaneous and safety employee pensions provided through the CaliforniaPublic Employees’ Retirement System (“CalPERS”)•The amount authorized at that time was the City’s current liability of $220M.•A strategy was developed to exclude principal payments to FY 2020-21 and FY 2021-22 topreserve General Fund reserves during the pandemic.•If the City had not issued POBs, it would have resulted in fiscal challenges to the GeneralFund.•Issuance of POBs have significantly restructured the City’s ongoing long-term pensionobligations. The total savings realized is estimated at $95M over the next 27 fiscal years.
UAL vs. POB
UAL vs. POB
AMERICAN RESCUE PLAN (ARP)The City was allocated $45.37M in ARP . First tranche of $22.6M wasreceived May 2021 and the second tranche is scheduled for May 2022. OnDecember 20, 2021, an ARP Sub-Committee consisting of the Mayor andtwo (2) council members was established. To date the following has beenappropriated:•$6.8M Revenue Loss•$2.07M Onetime MOUs•$6.9M CIP Projects (Park Restroom Construction, Mission Blvd Rehab –White Ave to Towne Ave, Garey Ave Rehab – Aliso St to Monterey Ave)•$545k City support related to the pandemic•$370k Buena Vista Ave Rehab•$500k Repave Philadelphia Included in FY 2022-23 are appropriations for the following:•$3.3M Holt Avenue (West) Reconstruction project•$4.8M additional for Garey Ave Rehabilitation – Aliso Street toMonterey Ave•$125k Westmont Community Center Entryway Trellis•$550k National CORE affordable housing project•$5M Mayor and City Council allocation for various projects andprograms within their DistrictsCity staff are working with BBK to create policies/proceduresalong with non-profit subrecipient agreements AMERICAN RESCUE PLAN (ARP), continued
OTHER FUNDS
•Special Revenue Funds $20.6M of ARP appropriationsCannabis Community Benefit Fund $250kPhillips Ranch Maintenance Assessment District forecasted to be insolvent by end of FY 2022-23, with fund balance of ($343k)oIncrease assessmentsoReduce services FY 2022-23 PROPOSED OTHER FUNDS
FY 2022-23 PROPOSED OTHER FUNDS•Enterprise Funds – decrease of $45.7M$20.7M FY 2021-22 transfer from Water Fund to Water Capital Improvement Fund$20.7M FY 2021-22 appropriation for Water Resources Building$6.9M FY 2021-22 Pomona Choice Energy loan from Water FundRefuse Fund projected to operate at a deficit of $1.4M due to rising costs related to implementation of SB1383 and aging fleetoEstimated fund balance at 06/30/22 $4.6M•Internal Service Fund Projected increase in insurance premium and claims expense, which will result in an additional $927k in cost recovery from all funds within the City which have employees FY 2022-23 PROPOSED OTHER FUNDSHOUSINGAUTHORITYBUDGET•The Housing Authority budget as recommended for FY 2022-23totals $20.7M offset by $20.1M in estimated revenues•The difference will be covered by available fund balance•This budget is adopted under separate resolution FY 2022-23 PROPOSED CIP BUDGET
CAPITAL IMPROVEMENT PROGRAM
TOTAL CIPExpenses To Date $ 74,589,151Carry Forward 113,608,746Proposed FY 2022-23 26,213,033Pending for FY 2022-23 4,768,000Following Four Years 239,976,150Total $459,155,080145 Projects in CIP $214.4M Funded / $244.7M Unfunded
FY 2022-23 PROPOSED CIP BY CATEGORIES
EQUITY IN BUDGETING •City staff is exploring the implementation of a Budget Equity Statement andtaking the first steps in applying an equity lens in our annual budgeting process.•We believe incorporating the principles of this statement into budgeting andfunding considerations will aid in achieving Pomona’s equity goals long-term.•The initial definition states that Pomona defines Equity as: fair treatment,access, opportunity, and advancement for all people while striving to identifyand eliminate barriers that have prevented the full participation of communitieshistorically oppressed. Improving equity involves increasing justice and fairnesswith the procedures and processes of institutions or systems and a fair,intentional distribution of resources.
EQUITY IN BUDGETING •Staff will be taking this first step in imbedding this statement into the organizationwhen evaluating budgets and plan to include this practice in the FY 2023-24process.Guiding questions to consider:•1. Have you considered the impacts on equity, diversity, andinclusion (EDI) in the programs and initiatives included in your baselinebudget?•2. In thinking about this, consider external stakeholders andcommunities that may be positively or negatively affected by yourprograms as well as internal equity considerations.•More details will be covered in the annual report brought forward to the City Councilfor the (Annual) FY 2023-24 Budget Kickoff, traditionally presented in January(2023).
FY 2022-23 PROPOSED GENERAL FUND The FY 2022-23 General Fund Budget reflects a budget surplus of $58koIncludes $1.3M towards the Commitment to New Youth ProgrammingoUtilizes $6.8M of ARP RevenueThe FY 2021-22 General Fund will now end with an estimated surplus of$6.6M (revised since March Mid-Year review)oShould net an estimated fund balance of $42.9M by the end of FY 2021-22oThis is 17.2% above the 17% minimum fund balance requirementoEncouraging to see these increases to the fund balance FY 2022-23 PROPOSED GENERAL FUND It is fiscally prudent to plan for the years when revenues may not be promising; FutureConcerns includeoThe use of ARP fundsoThe sunset of the Transactions Use Tax (TUT) - April 2029 (FY 2028-29)oEconomic Uncertainties– Including threat of a recessionCity staff along with the City’s Financial Advisor Urban Futures, Inc. (UFI) met with theLabor Sub-Committee to bring forward an updated 10-year forecastAccompanying that forecast was a briefing on what eventually will come before the entireCity Council, which includes Polices that will propose an updated Fund Balance PolicyAlso exploring a Policy which may include a Pension 115 Trust to fund future CalPERS UALpayments and OPEB liabilities FY 2022-23 PROPOSED GENERAL FUND •Staff will Continue to:•Monitor all Revenue Sources•Explore new ongoing revenues sources•Evaluate fiscal impacts in a responsive and fiscally soundmanner•Keep the Mayor and City Council apprised •Per charter, Budget adoption is required before July 1, 2022•Ongoing economic issues will require additional attention as we progressthrough this fiscal year and staff will remain vigilant in monitoring thebudget and will evaluate fiscal impacts in a responsive and fiscally soundmanner•If the budget is not adopted prior to July 1st, the amounts appropriated forcurrent operations for FY 2021-22 will be deemed adopted for FY 2022-23on a month-to-month basis until a new budget is adopted• FY 2022-23 PROPOSED BUDGET FOR ADOPTION
FY 2022-23 PROPOSED BUDGET FOR ADOPTIONWhat's Next?Adopt Proposed Operating Budget, CIP Budget, Housing Authority Budget and Staffing Changes on June 6, 2022
FISCAL YEAR 2022-23PROPOSED UPDATE TO THEMASTER FEE SCHEDULE
MASTER FEE SCHEDULEFY 2022-23 ANNUAL UPDATE•During the FY 2021-22 budget process, a Citywide Master Fee Schedule was established.•As part of the annual budget process each department conducted a review of their departments fees to ensure the fees were set at full cost recovery.•The proposed fee increases are being calculated using the 2021 calendar year change in CPI or the fees are being increased to equal full cost recovery if the CPI calculation did not equal full cost.•The year over year change in CPI for the Los Angeles-Long Beach –Anaheim, CA area for 2021 was 6.6%.
MASTER FEE SCHEDULEFY 2022-23 ANNUAL UPDATE•Based on the annual review, the estimated increase in citywide revenues for Fiscal Year 2022-23 is $398,000.•Public Noticing took place on April 22, 2022 and April 29, 2022 in the Daily Bulletin.•If the increase to the fees is approved tonight, following the Public Hearing, the proposed fees will go into affect in 60 days.•The Master Fee Schedule will be reviewed again as part of the FY 2023-24 budget process and is scheduled to be brought back to council in May of 2023.