DATE: June 27, 2024
TO: Mayor and Members of the City Council
FROM: John R. Gillison, City Manager
INITIATED BY: Noah Daniels, Finance Director
Jason C. Welday, Director of Engineering Services/City Engineer Justine Garcia, Deputy Director of Engineering Services Rick Flinchum, Finance Manager
SUBJECT: Consideration to Adopt Resolutions to Approve the Fiscal Year 2024/25 Budget, the Article XIIIB Appropriations Limit for the Fiscal Year 2024/25, and the Capital Improvement Program for the Fiscal Year 2024/25. (RESOLUTION NO. 2024-059 AND RESOLUTION NO. 2024-060)
(CITY)
RECOMMENDATION:
Staff recommends the City Council adopt resolutions approving the Fiscal Year 2024/25 Budget, the Article XIIIB Appropriations Limit for the Fiscal Year 2024/25, and the Capital Improvement Program for the Fiscal Year 2024/25.
BACKGROUND:
Budget and Appropriations Limit. Each year, the City of Rancho Cucamonga prepares a one- year program of service through the adoption of the annual budget. The budget process typically begins in January, with the City Manager outlining the goals and directives of the coming year’s budget. Multiple departments coordinate the citywide process to submit budget requests, and the City Management Team and Finance Department held budget meetings in April to review these requests. From these events, the recommendations for the Fiscal Year 2024/25 budget were formulated.
In conjunction with the adoption of the annual budget, the State of California Constitution, Article XIIIB, requires that an appropriations limit be established annually by the City Council. The GANN Limit is intended to keep inflation adjusted, per-person government spending under 1978/79 levels. There are established guidelines for setting the appropriations limit, including the use of four variable factors in developing the annual limit:
1. Consumer Price Index (CPI) change for the subject year (CPI Factor);
2. Assessed Valuation due to new non-residential construction per the San Bernardino County Assessor (Price Factor);
3. Change in the City’s population per the State of California Department of Finance (City Population Factor); and,
4. Change in the County’s population per the State of California Department of Finance (County Population Factor).
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Capital Improvement Program. Per Government Code 65401, the City Council must adopt a Capital Improvement Program (CIP), internally referred to as the Major Projects Program (MPP), each fiscal year. The MPP consists of a multi-year plan for the planning, design, and construction of citywide infrastructure improvements. A copy of Government Code 65401 has been included as Attachment 3.
The MPP is a vital piece of the City’s Annual Operating Budget as it dictates major capital expenditures obligated in any given year. The MPP consists of a multi-year plan for citywide infrastructure improvements. Each year, the City budgets for funded projects that will occur during said fiscal year. The list of projects contained in the MPP addresses both the City’s long—and short-term capital goals and reflects the desires of the community, as well as projects that serve operational and maintenance needs.
ANALYSIS:
Budget and Appropriations Limit. On June 20, 2024, the City Council held a workshop to review the appropriation requests for the Fiscal Year 2024/25. The attached resolution adopts the one- year budget following the City Council’s deliberations at the publicly held budget study session.
The budget is summarized as follows:
FISCAL YEAR 2024/25 BUDGET
General Fund $115,368,260
Library Services $6,041,200
Special Funds $141,919,560
Total $263,329,020
Based on the factors of the GANN Limit (an assessed valuation change of 4.34% and a city population increase of 0.56%), the City’s Fiscal Year 2024/25 appropriations limit is $142,508,871. The City’s Fiscal Year 2024/25 appropriations subject to this limit total $87,929,920. It is anticipated that the City will be at 61.70% of its GANN Limit on June 30, 2025.
The additional resolution adopts the annual appropriations limit as required by Article XIIIB of the State Constitution.
Capital Improvement Program. This year the MPP has been categorized by corresponding Project Type and are listed in alphabetical order in each section based on Project Name.
Individual Project Sheets include a short summary, cost estimates, year the project is expected to be started, and future estimated impact on future operations. The MPP document can be viewed in its entirety on the City’s website at the following link: https://www.cityofrc.us/your- government/budget. A copy is also available in the Office of the City Clerk.
FISCAL IMPACT:
Budget and Appropriations Limit. The proposed resolutions establish the City of Rancho Cucamonga’s spending plan for Fiscal Year 2024/25 and ensure the City’s compliance with Article XIIIB of the Constitution of the State of California.
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Capital Improvement Program. Projects are funded from a variety of sources, including Development Impact Fees, Measure I, Gas Tax, and miscellaneous grants. The MPP for Fiscal Year 2024/25 proposes 60 projects, totaling just over $80,824,210, to be executed in the upcoming fiscal year. In addition, there are 23 projects totaling just over $62,577,980 identified in future years.
COUNCIL MISSION / VISION / VALUE(S) ADDRESSED:
Budget and Appropriations Limit. The adoption of the Fiscal Year 2024/25 Budget supports the City Council’s core value of providing and nurturing a high quality of life for all by demonstrating the active, prudent fiscal management of the City’s financial resources in order to support the various services the City provides to all Rancho Cucamonga stakeholders.
Capital Improvement Program. The City’s Engineering staff works with all Departments within the City to develop and implement an economically feasible Major Projects Program that embodies the City’s public infrastructure needs. This item addresses the City Council’s vision for the City by ensuring the construction of high-quality public improvements that promote a world class community and supports the City Council’s core value of promoting and enhancing a safe and healthy community for all.
ATTACHMENTS:
Attachment 1 – Resolution (Budget Adoption)
Attachment 2 – Resolution (Appropriations Limit)
Attachment 3 – Government Code 65401