CITY OF POMONA
COUNCIL REPORT
January 8, 2024
To: Honorable Mayor and Members of the City Council
From: Anita D. Gutierrez, Acting City Manager
Submitted By: Andrew Mowbray, Finance Director/City Treasurer SUBJECT: FISCAL YEAR 2024-25 BUDGET KICKOFF
______________________________________________________________________________ RECOMMENDATION:
It is recommended that the City Council take the following actions:
Approve the attached Fiscal Year (FY) 2024-25 Budget Guiding Principles; and Review the FY 2024-25 Budget Preparation Calendar and Budget Process.
EXECUTIVE SUMMARY: The City’s Consolidated Fiscal Policies and Administrative Procedures were adopted on February 6, 2023, and require the City Manager to submit guiding principles for the upcoming budget year. The FY 2024-25 Budget Guiding Principles are attached (Attachment 1) for Council approval. The FY 2024-25 Budget Calendar and Budget Process are also presented for Council approval. The policies are intended to establish guidelines for the City’s overall fiscal planning and management. These policies are intended to foster and support the continued financial strength and stability of the City as reflected in its financial goals.
FISCAL IMPACT: None with this action
PUBLIC NOTICING REQUIREMENTS: None Required
PREVIOUS RELATED ACTION: On February 6, 2023, the City Council adopted Resolution 2023-06 approving the Consolidated Fiscal Policies and Administrative Procedures, which contains the following language, “The City Manager shall submit a list of Budget Guiding Principles to the City Council for consideration on an annual basis. These principles will be used to guide the development of the coming year’s budget.” DISCUSSION:
In accordance with the City Council adopted Consolidated Fiscal Policies and Administrative Procedures, as stated in Section III. Fiscal Operations; A. Budget and Fiscal Operations (Attachment No. 2), the FY 2024-25 Budget Guiding Principles are hereby submitted for consideration. The FY 2024-25 Principles closely follow those of FY 2023-24, however some items were deleted, added, and modified significantly in FY 2023-24 from previous fiscal year versions.
Budget Calendar— Fiscal Year 2024-2025
Description
Fiscal Year 2024 -25
Budget Kickoff for Staff - Distribution of Budget Guide and Forms to Departments December 12, 2023
City Council Meeting – Approval of Fiscal Year 2024-25 Guiding Principles January 8, 2024
City Council Meeting – Establishment of a Section 115 Trust January 22, 2024
City Council Meeting – FY 2022-23 General Fund Surplus Discussion February 5, 2024
Citizens Oversight Committee (COC) February Meeting – Preview of Mid-Year Figures February 15, 2024
City Council Meeting – FY 2023-24 General Fund Mid-Year Budget Review (Tentative Date) February 26, 2024
Budget Study Sessions – Community Budget Meeting
FY 2024-25 Preview and seek input from Community
Input from Community on the Annual Budget
COC Input on Measure PG
Introduction of Participatory Budget Process
March 25, 2024
Evening Session
7:00pm
April 3, 2024
Afternoon Session
3:00pm
Citizens Oversight Committee (COC) April Meeting – Preview of FY 2024-25 Budget April 28, 2024
Distribution of Proposed Budget Documents
May 2, 2024
Budget Study Session – Review of the Proposed Budget
May 13, 2024
City Council Meeting – Public Hearing for Budget Adoption June 3, 2024
Staff recommends utilizing the Budget adoption process used in prior years, with a budget study session held in May (the second Monday, May 13th) and one public hearing (or more if needed) held in June. Additionally, to continue to encourage public participation staff is proposing two City Council study session meetings to be held on March 25, 2024, in the evening and a second meeting to be held on April 3, 2024, in the afternoon. The meeting start times vary to give the public ample opportunity to attend and participate in the budget process. At these two meetings, a preview of the FY 2024-25 will be covered. Two meetings are proposed with the Citizens Oversight Committee (COC) in February and April. The COC has 4 scheduled meetings annually, the two meetings identified give the committee an opportunity to get a preview of upcoming budget related items. Pursuant to City ordinance, a member of the COC will provide input on the FY 2024-25 budget as it relates to the Measure PG Sales Tax Funds. This is being included annually in the process as it relates to the language stated in Ordinance 4253, Section. 50- 653. — COC Duties and responsibilities. It specifically states that the COC shall “Prepare written reports to the City Council that summarize the Committee's findings and recommendations.” Staff, along with the COC requested that this report be presented at one or both study sessions. The COC input over the last few years is a great addition to the annual process. Two new items added to this year’s budget process is the establishment of a Section 115 trust (January 22nd) and per the Consolidated Fiscal Polices (Section IV. FUND BALANCES, RESERVES & SURPLUS) a discussion on the possible uses of the previous Fiscal Year 2022-23 surplus will take place and include recommendations of the surplus.
FY 2024-25 Budget Guiding Principles
In accordance with the City Council adopted Consolidated Fiscal Policies and Administrative Procedures, the FY 2024-25 Budget Guiding Principles is hereby submitted for consideration. The FY 2024-25 Principles closely follow those of FY 2023-24 with some new items added as well as a few modifications. Departments have been given these updated principles to use when developing their proposed budgets.
Consolidated Fiscal Policies and Administrative Procedures On February 6, 2023, the City Council adopted Resolution Number 2023-06 approving the City’s Consolidated Fiscal Policies and Administrative Procedures. These Policies establish guidelines for the City's overall fiscal planning and management and are intended to foster and support the continued financial strength and stability of the City. The Policy is quite comprehensive and covers areas of Budget, Economic Development, Risk Management, Accounting-Auditing-Financial Reporting, Cash Management and Investments, and Debt Management. The Policy also sets forth guidelines for creating the annual budget within the Budget' section of the Policy. Also included within the policies is the City's Fund Balance Policy, which can be found in (Section IV. FUND BALANCES, RESERVES & SURPLUS). The objectives of the Policy are to comply with the Governmental Accounting Standards Board (GASB) Statement Number 54 -- Fund Balance Reporting and Governmental Fund Type Definitions; establish formal reserve policies; build adequate reserves; and guide the City toward meeting its short and long - term obligations. The Policy states that at the end of FY 2024-25, the City shall have a Committed Fund Balance equal to 24% of operating expenditures in the General Fund. The 24% is to be considered the minimum level and represents funding for two months of General Fund operations. The City has maintained 22% (FY 2022-23 amount) or above for the last several years. The City’s current Fund Balance for the year ending June 30, 2023 is $60.7M. As mentioned herein, a staff report discussion item will come forward in February 2024 to discuss moving portions of the recent surplus to address these defined long-term obligations.
Conclusion
Consolidated Fiscal Policies and Administrative Procedures incorporate principles that guide the financial administration of the City along with staff administrative procedures in the form of a centralized comprehensive financial document. The Policies are quite comprehensive and cover areas of Budget, Economic Development, Risk Management, Accounting-Auditing-Financial Reporting, Cash Management and Investments, and Debt Management. The Policy also sets forth guidelines for creating the annual budget within the Budget section and bringing forth the schedule annually to the Mayor and City Council. The Fiscal Policies and Administrative Procedures are relatively new and are an upgrade to the original City of Pomona Fiscal Sustainability Policy (established in 2011), which will guide all financial operations to help the City to address long-term City financial obligations. Over the next few months, two significant items will come forward to the City Council to establish the City’s inaugural Section 115 Pension Trust, and for the first year as stated by the Policies the City Council will be asked to consider placing portions of the FY 2022-23 General Fund balance surplus into the specific areas identified in the Fiscal Policies.
Prepared by:
___________________________
Andrew Mowbray
Finance Director/City Treasurer
ATTACHMENT(S):
Attachment No. 1 – Budget Guiding Principles for FY 2024-25 Attachment No. 2 – Consolidated Fiscal Policies and Administrative Procedures January 8, 2024
FY 2024-25 Budget Kickoff