CITY OF POMONA
COUNCIL REPORT
June 6, 2022
To: Honorable Mayor and Members of the City Council
From: James Makshanoff, City Manager
Submitted By: Andrew Mowbray, Finance Director/City Treasurer SUBJECT: PUBLIC HEARING: Adoption of Resolutions Approving the Fiscal Year (FY) 2022-23 City of Pomona Operating Budget, Housing Authority Budget, Five Year Capital Improvement Program Budget, Establishing the FY 2022-23 GANN Appropriations Limit, and Personnel Related Actions RECOMMENDATION:
It is recommended that the City Council and the City Council sitting as the Commission of the Housing Authority conduct the public hearing and after receiving comments and testimony, adopt respectively the following resolutions:
RESOLUTION NO. 2022-92 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA ADOPTING THE CITY’S OPERATING BUDGET FOR FY 2022-23 RESOLUTION NO. 2022-93 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA SITTING AS THE COMMISSION OF THE HOUSING AUTHORITY OF THE CITY OF POMONA, ADOPTING THE FY 2022-23 HOUSING AUTHORITY BUDGET RESOLUTION NO. 2022-94 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA APPROVING THE FY 2022-23 TO FY 2026-27 FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM AND ADOPTING A CAPITAL IMPROVEMENT PROGRAM BUDGET FOR FY 2022-23 RESOLUTION NO. 2022-95 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA ESTABLISHING THE GANN APPROPRIATIONS LIMIT OF THE CITY OF POMONA PURSUANT TO ARTICLE XIII OF THE STATE CONSTITUTION FOR FY 2022-23 RESOLUTION NO. 2022-96 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA ADOPTING THE CITY OF POMONA’S SALARY SCHEDULE FOR FY 2022-23 TO MEET THE CALIFORNIA CODE OF REGULATIONS TITLE 2, SECTIONS 570.5 AND 571 RESOLUTION NO. 2022-97 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, AMENDING APPENDIX B OF THE MEMORANDUM OF UNDERSTANDING WITH THE POMONA MID-MANAGEMENT / CONFIDENTIAL EMPLOYEES’ ASSOCIATION TO ADD EXECUTIVE ASSISTANT, HOUSING GRANTS COORDINATOR, WATER PRODUCTION SUPERVISOR AND WATER TREATMENT SUPERVISOR AND DELETE PRODUCTION AND TREATMENT SUPERVISOR RESOLUTION NO. 2022-98 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, AMENDING APPENDIX A OF THE COMPENSATION PLAN FOR EXECUTIVE MANAGEMENT GROUP A AND B EMPLOYEES BY ADDING ASSISTANT CITY CLERK, RECLASSIFYING DEPUTY CITY MANAGER AND DELETING EXECUTIVE ASSSISTANT AND SENIOR ADMINISTRATIVE ASSISTANT TO THE CITY COUNCIL RESOLUTION NO. 2022-99 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, AMENDING APPENDIX B OF THE MEMORANDUM OF UNDERSTANDING WITH THE POMONA CITY EMPLOYEES’ CHAPTER OF THE TEAMSTERS LOCAL 1932 BY ADDING THE CLASSIFICATIONS OF WATER CONSERVATION SPECIALIST EXECUTIVE SUMMARY: The Mayor and City Council were presented with the FY 2022-23 Proposed Budget at the May 9, 2022 Study Session. Since then, feedback from the Budget Study session as well as new information have been added for consideration to this revised report. Revisions include the following:
Appropriation of $500k from American Rescue Plan (ARP) Fund for the Library Department, specifically for youth services.
Capital Improvement Project (CIP) allocations for the Civic Center Plaza Rehab in the amount of $300k and for improvements at the Country Crossing Park in the amount of $20k which are also funded by the ARP Fund. In addition, reductions of $529k for the Pomona Multi-Neighborhood Pedestrian and Bicycle Improvements Project due to a reduction in Gas Tax Funds appropriations and a reduction of $425k for the Street Preservation – Local (FY 22-23) Project due to a reduction in SB-1/RMRA Funds appropriation.
Due to recent information provided by the State of California, there will be reductions to the State Gas Tax Fund revenue in the amount of $231k and the SB1 Transportation fund revenues will be reduced $98k. These two adjustments relate to the CIP projects adjustments mentioned above.
The Police Department will enter into a Sub-Recipient Agreement with Los Angeles County to accept the 2020 State Homeland Security Grant Program (SHSGP) funding in the amount of $472,629. This amount will be reflected in the FY 2022-23 Adopted Budget.
In addition, a current year (FY 2021-22) appropriation of $18.4k from the General Fund will be added to the CIP City Hall Complex Remodel and Flooring project (project # 74115) for improvements within the City Hall basement as it relates to the move from the Building Division staff in the Development Services Department to offices that previously housed the Police Department administrative staff. Finance Department will be upgrading this previously used space that also houses the Print and Mailing Services Division which provides these internal services to City Departments. The CIP project description will be updated to reflect these changes in the FY 2022-23 Adopted Budget document.
Public Noticing Requirements - Pursuant to section 1006 of the City Charter, this item must be noticed in a newspaper of local circulation not less than two (2) weeks prior to the meeting. A notice for this hearing was published on May 20, 2022 in the Inland Valley Daily Bulletin (Attachment No.9) FISCAL IMPACT - The adoption of the attached resolutions will establish the City’s (Attachment No.1) and Housing Authority’s (Attachment No.2) Fiscal Year 2022-23 Operating and Capital Improvement Program (Attachment No.3) budgets as follows:
PREVIOUS RELATED ACTION: City Council adopted the FY 2021-22 Operating Budget, Housing Authority Budget, and the Five-Year Capital Improvement Program on June 7, 2021. The City Council also approved the Budget Preparation Calendar, Guiding Principles and Process for FY 2022-23 on January 10, 2022. The FY 2021-22 Mid-Year Budget Review was presented on March 21, 2022. Community Budget Meetings were held on March 30 and April 6, 2022, to seek feedback on the FY 2022-23 Preliminary Budget. The FY 2022-23 Study Session was held on May 9, 2022.
DISCUSSION
The revised FY 2022-23 Budget for Citywide expenditures is proposed at $401M and is comprised of seven operating fund types: General Fund, Special Revenue Funds, Debt Service Funds, Capital Project Funds, Enterprise Funds, Internal Service Funds and Housing Authority Funds. Overall, the FY 2022-23 General Fund Proposed Budget anticipates a $58k surplus. Since the May 9, 2022, Budget Study session staff has included changes as listed herein:
Appropriation of $500k from American Rescue Plan (ARP) Fund for the Library Department, specifically for youth services.
Capital Improvement Project (CIP) allocations for the Civic Center Plaza Rehab in the amount of $300k and for improvements at the Country Crossing Park in the amount of $20k which are also funded by the ARP Fund. In addition, reductions of $529k for the Pomona Multi-Neighborhood Pedestrian and Bicycle Improvements Project due to a reduction in Gas Tax Funds appropriations and a reduction of $425k for the Street Preservation – Local (FY 22-23) Project due to a reduction in SB-1/RMRA Funds appropriation.
Due to recent information provided by the State of California, there will be reductions to the State Gas Tax Fund revenue in the amount of $231k and the SB1 Transportation fund revenue will be reduced $98k. These two adjustments relate to the CIP projects adjustments mentioned above.
The Police Department will enter into a Sub-Recipient Agreement with Los Angeles County to accept the 2020 State Homeland Security Grant Program (SHSGP) funding in the amount of $473k. This amount will be reflected in the FY 2022-23 Budget with an appropriation and corresponding revenue increase.
Operating Budget
All Funds – The Operating Budget is the City's financial plan and consists of revenues and expenditures to finance the current year operations of the various funds and programs for the fiscal year beginning July 1, 2022 and ending June 30, 2023. It is a flexible spending plan by which the City Council establishes legal authority for departments to commit financial resources for the provision of services within the City of Pomona. The recommended FY 2022-23 Operating and Capital Improvement Program Budgets total $401M as follows in Table 1.
Table 1
General Fund – There are no General Fund changes since the May 9th Study Session. The General Fund reflected a $58k surplus. Table 2 displays the FY 2022-23 General Fund Proposed budget.
Table 2
General Fund Appropriations – The General Fund is the largest fund of the City and represents approximately 35% of the City’s Combined Operating Budget. The General Fund accounts for services such as Police, Fire, Library, Parks, Recreational Programs, certain Public Works operations, Development Services, City Council, Administration, City Clerk, Finance, and Human Resources. The Proposed FY 2022-23 expenditure budget is $141.5M, which is a $13.5M increase over the prior fiscal year’s budget.
The Police Department budget for FY 2022-23 increased by $11M. The main contributors to this impact are increases for the POB allocation in the amount of $6.4M and other citywide allocations in the amount of $800k, which brings the total for this category to $7.2M. This $7.2M increase is uncontrollable and can be defined as a cost center as the Police Department makes up a significant part of the General Fund personnel which these citywide costs are associated with. The POB allocation in this year’s proposed budget includes a principal payment amount compared to the interest only amount budgeted the last two fiscal years as part of the POB strategy implemented in July 2020. This $6.4M increase is significant, however if the traditional UAL plan was in place the increase would have been as much as $13.3M. Also, to note is an increase in personnel costs totaling $3M for items related to MOUs (memorandum of understandings) negotiated amounts, as well as overtime, and termination payouts that all contribute to the $3M increase in personnel. Also, important to note is that during FY 2021-22, 12.00 vacant positions, including 4.00 Police Officers, were unfunded in the amount of $1.2M. This savings is now obsolete with all positions in the Police Department funded minus the 7.00 Police Officer positions that have been unfunded since FY 2018-19. Also included are increases for vehicle purchases totaling $600k, as well an increase of $200k in costs relating to the crossing guard contract. Also included is a supplemental request of $305k for watch guard body worn video cameras.
The cost of services as provided by L.A. County Fire District is much less than the sizable amount that we have been accustomed to. The increase of $355k is because the County is limited to the $669k excess rollover cap, in comparison to $1.9M rollover from the prior fiscal year.
The increase of $614k to the Public Works budget is attributed to an increase of $200k in the tree maintenance contract, $300k in supplemental requests that includes consultant services for Dig Alert the purchase of a Skip Loader with forklift, and a $186k increase in service contracts for security, custodial, and building automation. It should be noted that increases in personnel costs for items related to MOUs (Memorandum of Understandings) negotiated amounts are offset with the one-time payments that were included in the FY 2021-22 Budget. The Department is requesting $253k to fund portions of 5.00 positions that will also be funded with Transportation Funds and CIP projects.
Development Services Department budget reflects a decrease of $24k. The prior year budget reflected $250k consultant services for environmental impact reports paid for by developers. These payments are now deposited to a project escrow account and are reported a balance sheet account. The Department is requesting 1.00 Code Compliance Inspector and the reclassification of a Program Assistant to a Management Analyst totaling $111k.
The General Government increase of $640k is due to the $415k increase for election activities in the City Clerk’s office, and supplemental requests of $180k from Human Resources which consists of $150k for a classification and compensation study and $30k for employee recognition program. In addition, Human Resources is requesting the addition of 2.00 FTEs at a total cost of $97k of General Fund appropriations. The remaining funding will be charged to the Internal Services funded Risk Management division. The Administration division is requesting the reclassification/range change for 4.00 FTEs totaling $34k.
The General Services decrease of $644k is attributed to reduction in Humane Services contract and prior fiscal year transfers from the General Fund to the CIP Fund. In addition, a vacancy factor resulting in a reduction of $350k is budgeted to account for hiring gaps when vacancies are being recruited for.
Neighborhood Services increased a little more than $1M from the prior fiscal year due to the year one contribution of a five-year plan to budget $10M towards a commitment to fund new youth programming at the City of Pomona. Another $300k will be included in the Library Department Budget, bringing the total to $1.3M in year one.
The Library Department increased by $594k due to $144k increase for hourly positions, a $132k loan payment to SoCalREN for a related energy efficiency project at the Pomona Library, and as mentioned above a $300k increase towards a commitment to fund new youth programming at the City of Pomona.
Table 3 sets forth the Proposed General Fund Budget broken down by Departments and in comparison, to the previous year.
Table 3
General Fund Revenues – The FY 2021-22 General Fund Revenues was estimated at $141.5M at the May 9, 2022 Budget Study session and had no changes since then. Overall, the estimates have increased 10% from last fiscal year. Shown on Table 4 are the General Fund revenues with comparisons to the prior fiscal year.
Table 4
It is important to note $6.8M is included in the FY 2022-23 Proposed General Fund Revenue from the American Rescue Plan (ARP) fund. This is justified using the ARP category for General Fund revenue loss. These funds will be used towards various programs that are eligible in the City’s $141.5M Proposed FY 2022-23 General Fund Budget. These funds will contribute towards general government administration, staff and administrative facilities within Police, Fire, Library, Parks, Recreational Programs, certain Public Works operations, Development Services, City Council, Administration, City Clerk, Finance, and Human Resources.
Fund Balance History - The reserve policy goal of 17% is based on recommendations by the Government Accounting Standards Board and the Los Angeles County Civil Grand Jury. On June 20, 2011, the City Council approved Resolution #2011-63A Fund Balance Reserve Policy, which included a graduated benchmark plan that would allow the City to reach the 17% policy goal. The projected fund balance for FY 2021-22 will meet the goal of 17%. If the City does not meet its reserve requirement, the City’s bond rating could be impacted which could drive up interest rates. It will also reduce the amount of funds available for emergency situations, cash flow needs in the first six months of the fiscal year, and one-time capital replacement projects in the future. As the General Fund appropriations increase, the fund balance will also need to increase. With the Proposed Budget as it is presented at this writing, $6.6M would be contributed to fund balance on June 30, 2022, and $58k at June 30, 2023.
Table 5
Special Revenue Funds – Special Revenue Funds have increased by a net total of $19k since the FY 2022-23 proposed publication on May 9, 2022. This is due to recent information provided by the State of California, there will be reductions to the State Gas Tax Fund in the amount of $529k and the SB1 Transportation fund in the amount of $425k. These two adjustments relate to the CIP projects adjustments. Also, the Police Department will enter into a Sub-Recipient Agreement with Los Angeles County to accept the 2020 State Homeland Security Grant Program (SHSGP) funding in the amount of $473k. Finally, the ARP fund will increase $500k for youth funding in the Library.
Enterprise Funds - The Enterprise Fund have not changed since the FY 2022-23 proposed publication on May 9, 2022.
Capital Projects – The Capital Outlay fund net decrease of $634k is contributed from the $300k appropriation for the Civic Center Plaza Rehab project and $20k for the Country Crossing Park. Both projects are funded by the ARP fund. In addition, reductions of $529k for the Pomona Multi-Neighborhood Pedestrian and Bicycle Improvements Project due to a reduction in Gas Tax Funds appropriation and a reduction of $425k for the Street Preservation – Local (FY 22-23) Project due to a reduction in SB-1/RMRA Funds appropriation.
Debt Service, Internal Service Funds, and the Housing Authority Budgets - There are no changes proposed since the May 9, 2022 Study Session.
Citywide Proposed Staffing
Staffing cost for the FY 2022-23 Budget is calculated using currently approved labor contract provisions, increases in the City’s retirement contribution rates (PERS), step increases for staff, overtime, and hourly staff. Personnel history and funding allocations by Department are shown in the Authorized Staffing section of this document and include a proposed authorized staffing level of 610.80 full time equivalent (FTE) positions. In addition to these FTE positions, many Departments utilize part-time hourly employees to provide services to the community. As reflected in Table 6, there are increases to the number of FTE’s and reclassifications of positions. The requested changes reflected are for the FY 2022-23 Full Time Equivalent (FTE) position changes in the proposed budget. In total there are 13.00 FTEs requested for addition and 7.00 FTE requested for reclassification. The total requested personnel cost changes include $520k to the General Fund and $955k to various Non-General Funds. Table 7B provides a historical view of the FTE changes over the last 14 fiscal years. A historical look at FTEs from FY 2009-10 to FY 2022-23 is shown in Table 6A. Budget Resolutions related to these personnel changes are highlighted in Attachment Nos. 1,5,6,7, & 8.
Table 6
Table 6A
Housing Authority Budget
The Housing Authority budget as recommended for FY 2022-23 totals $20.1M in estimated revenues offset by $20.7M in appropriations. The difference between the estimated revenues and recommended appropriations is $653k which will be covered by available fund balance. This budget has not changed since the May 9, 2022 Study Session and the budget is adopted under a separate resolution (Attachment No. 2) Capital Improvement Budget
The Capital Improvement Program (CIP) projects include building, upgrading or replacing City infrastructure such as residential and arterial streets, bridges, traffic signals, storm drain systems, parks, public facilities, etc. The separate five-year CIP document addresses in greater detail specific projects to be undertaken both short and long term. The recommended Capital Improvement Program (CIP) budget for FY 2022-23 totals $25.6M (Attachment No.3). The capital plan includes a total of 147 projects, totaling approximately $460.5M, of which $214.8M is funded. The $214.8M will be funded from prior year appropriations totaling $189.2M of which approximately $114.6M remains unspent, and approximately $25.6M of new funding. As always, staff may recommend the CIP be amended throughout the year as funding is secured or otherwise identified. Table 7 displays the CIP Budget by Category and total funded amounts.
Table 7
Adopted CIP Budget and Document Update
For adoption there is a total net decrease in CIP appropriations of $634k from the proposed CIP budget. The changes from the proposed document are as follows:
Appropriation of $300k for the Civic Center Plaza Rehab Project which will be partially funded by ARP.
Appropriation of $20k for the Concrete Slab at Country Crossing Park funded by the ARP.
Reduction of Gas Tax appropriation of $529k for the Pomona Multi-Neighborhood Pedestrian and Bicycle Improvements Project due to a reduction in Gas Tax Funds revenues.
Reduction of SB-1/RMRA Funds appropriation of $425k for the Street Preservation – Local (FY 22-23) Project due to a reduction in SB-1/RMRA Funds revenues.
Supplemental Budget Requests
General Fund Supplemental Budget Items
Each year the budget includes supplemental budget recommendations for staffing, services, and equipment requests. Personnel requests total $520k for the addition of 3.00 FTE that are 100% General Funded, 4.00 FTE that are partially funded by the General Fund, and 6.00 FTE that are proposed for reclassification with General Funds involved. One hourly position is also included. The FY 2022-23 Proposed General Fund Requests for Operations and Vehicles totals $1.4M and the $1.3M request for additional youth funding is included in this Proposed Budget. In total, the FY 2022-23 Proposed General Fund Budget contains $3.2M in total supplemental appropriations.
Non- General Fund Supplemental Budget Items
Non-General Fund supplemental items included in FY 2022-23 staffing requests total an amount of $955k for the addition of 6.00 FTE that are 100% Non-General Funded, 4.00 FTE that are partially funded by Non-General Funds, and 1.00 FTE that is proposed for reclassification with Non-General Fund appropriations. The FY 2022-23 Proposed Non-General Fund Requests for Operations and Vehicles totals $1.7M. In total, the FY 2022-23 Proposed Non-General Fund Budget contains $2.6M in supplemental appropriations.
Unfunded Accrued liability (UAL) vs. Pension Obligation Bond (POB) In July 2020, the City implemented POBs to address the City’s Unfunded Accrued Liability (UAL) for miscellaneous and safety employee pensions provided through the California Public 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, to preserve General Fund reserves during the pandemic. If the City had not issued POBs, it would have resulted in fiscal challenges to the General Fund. Issuance of POBs have significantly restructured the City’s ongoing long-term pension obligations. The total savings realized is estimated at $95M over the next 27 fiscal years.
Table 8
Gann Appropriations Limit
In November 1979, California voters approved Proposition 4 commonly known as the Gann Initiative. The Proposition created Article XIIIB of the State Constitution placing limits on the amount of revenue which can be spent by all entities of government from the proceeds of taxes. Pursuant to California Government Code, the City is required annually to adopt the adjustment factors and the appropriations limit by resolution. The appropriations limit for any fiscal year is equal to the previous fiscal years limit adjusted for population growth in Los Angeles County or the City of Pomona and the State per capita income as supplied by the State of California Department of Finance and reflected in Schedule A (Exhibit A of Attachment No.4). The Calculation of Proceeds of Taxes is shown in Schedule B (Exhibit B of Attachment No.4). The FY 2022-23 appropriations limit, based on the proposed General Fund budget, is calculated at $293M. The City’s FY 2022-23 General Fund budget “Appropriations Subject to Limitation” is $112.6M which is $180.5M below the allowable limitation. As always, the numbers reflected herein and, in the attachments, will be changed to reflect any changes made to the operating budget prior to its adoption.
Equity In Budgeting Statement
City staff is exploring the implementation of a Budget Equity Statement and taking the first steps in applying an equity lens in our annual budgeting process. We believe incorporating the principles of this statement into budgeting and funding 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 identify and eliminate barriers that have prevented the full participation of communities historically oppressed. Improving equity involves increasing justice and fairness with the procedures and processes of institutions or systems and a fair, intentional distribution of resources. Staff will be taking this first step in imbedding this statement into the organization when evaluating budgets and plan to include this practice in the FY 2023-24 process. Guiding questions to consider:
1. Have you considered the impacts on equity, diversity, and inclusion (EDI) in the programs and initiatives included in your baseline budget?
2. In thinking about this, consider external stakeholders and communities that may be positively or negatively affected by your programs as well as internal equity considerations.
More details will be covered in the annual report brought forward to the City Council for the (Annual) FY 2023-24 Budget Kickoff, traditionally presented in January (2023).
Youth Funding Citywide
In FY 2020-21 a table was created displaying the amount of City of Pomona funding that covers various Departments, Funds, CIP projects and operational programs that relate to youth services. When last published two years ago the FY 2020-21 budget reflected a total amount of $17.7M dedicated towards youth services. The table listed in Attachment No.11 totals an amount of $30M that makes up youth services funding in the City of Pomona’s FY 2022-23 Budget.
ARP Expenditure Spending Plan Update
As part of the proposed FY 2022-23 Budget $500k is proposed to be used from ARP funds for Library youth services. To allow this appropriation, the ARP expenditure spending plan will need to be adjusted to allow this change. Staff is proposing a reduction of $250k from the Health and Wellness Activities category, as well as a reduction of $250k from the Participatory Budget category. These changes are reflected in Table 9.
Table 9
Conclusion
The FY 2022-23 Proposed Operating Budget document has been compiled with the cooperation of all City Departments and coordinated by the Finance Department. An enormous amount of data is assembled to accomplish the accurate layering of revenue estimates, anticipated expenses, cost allocations, transfers and accruals involved with accounting for a City with multiple operations like the City of Pomona. In the end, the FY 2022-23 Proposed Operating Budget is staff’s best estimate of a spending plan within available resources to meet the Council’s goals and public’s expectations for the upcoming year. The Proposed Operating Budget encompasses the revenues that are available and projected at this time, while realizing that serving the residents of Pomona is the organization’s priority.
Many factors such as high inflation passed along in the cost of goods and services, unstable fuel prices, supply chain and raw material interruptions, and COVID -19 continuing to be considered as a public health challenge have contributed to forecasting obstacles as well as a threat to economic changes that are predicted to occur. The threat of a recession is constantly looming and the need for sufficient reserves is more critical than ever. Opinions from various City Consultants all agree across the board that a recession is insight, but the magnitude and timeline is unknown. As with every budget year, this budget remains a work in progress to be monitored throughout the year and will be adjusted, as necessary.
The FY 2022-23 General Fund Budget reflects a budget surplus of $58k. In the FY 2021-22 General Fund Mid-Year Budget Review that was presented to the Mayor and City Council, an estimated budget surplus as much as $12M was projected by the end of FY 2021-22. It is important to note that $6.8M in American Rescue Funds (ARP) are accounted for in this amount. As part of a budget strategy, ARP will not be used in FY 2021-22. Therefore, it is projected that FY 2021-22 General Fund will now end with an estimated surplus of $6.6M (revised since March Mid-Year review), which will bring the total General Fund fund balance to $42.9M by the end of FY 2021-22. This is 17.2% above the 17% minimum fund balance requirement. Although it is encouraging to see these increases in the reserve and augment programs and/or services, it is fiscally prudent to plan for the years when revenues may not be promising, particularly when ARP funds are no longer available to fill the budget gap, and when the Transactions Use Tax (TUT) hits the sunset date as scheduled to end in in April 2029 (FY 2028-29). City staff along with the City’s Financial Advisor Urban Futures, Inc. (UFI) met with the Labor Sub-Committee to bring forward an updated 10-year forecast. Accompanying that forecast was a briefing on what eventually will come before the entire City Council, which includes Policies that will propose an update to the Fund Balance Policy to help create a foundation for strong fiscal management and fiscal sustainability by preparing and stabilizing city finances for various contingencies, mitigating the fiscal impact of unexpected or untimed events, ensuring payment of short and long-term liabilities, and financial planning for service improvements, capital, equipment and other long-term needs. Some of the items being evaluated and that will be included are the potential increase to the minimum fund balance requirement, establishing a Catastrophic Events Reserve, increasing the General Fund Transfer for Equipment Replacement, and exploring a Pension 115 Trust to fund upcoming CalPERS UAL payments and OPEB liabilities. UFI will again brief the Labor Sub-Committee in early July with additional policy information. This presentation along with the initial presentation will be combined and brought forward at a City Council meeting in August 2022 for the entire City Council to consider implementing updates to the current policies and consider creating some new financial policies.
Prepared by:
Andrew Mowbray
Finance Director/City Treasurer
ATTACHMENT(S):
Attachment No. 1 – Resolution No. 2022-92
Exhibit A – FY 2022-23 Operating Budget
Attachment No. 2 – Resolution No. 2022-93
Attachment No. 3 – Resolution No. 2022-94
Exhibit A – FY 2022-23 CIP Budget by Category
Attachment No. 4 – Resolution No. 2022-95
Exhibit A - GANN LIMIT Appropriations Limit
Exhibit B – Calculation of Proceeds of Taxes
Attachment No. 5 – Resolution No. 2022-96
Exhibit A – Salary Schedule
Attachment No. 6 – Resolution No. 2022-97
Attachment No. 7 – Resolution No. 2022-98
Attachment No. 8 – Resolution No. 2022-99
Attachment No. 9 - Public Hearing Notice
Attachment No. 10 - FY 2022-23 Proposed for Adoption Presentation Attachment No. 11 - FY 2022-23 Youth Funding Table
Adoption of Resolutions Approving the Fiscal Year 2022-23 Operating, Housing Authority Budget and Capital Improvement Budgets Program Budget, Establishing the Fiscal Year 2022-23 GANN Appropriations Limit and Personnel Related Actions