DATE:June 27, 2024
TO:President and Members of the Board of Directors
FROM:John R. Gillison, City Manager
INITIATED BY: Mike McCliman, Fire Chief
Noah Daniels, Finance Director
Michelle Cowles, Management Analyst II
Rick Flinchum, Finance Manager
SUBJECT: Consideration to Adopt the Fire Protection District General Fund Preliminary Budget; Adopt a Resolution Approving the Fire Protection District General Fund Appropriations Limit for the Fiscal Year 2024/25; and Set a Public Hearing for the Approval of a Fire Protection District General Fund Final Budget for the Fire Board Meeting on July 17, 2024. (RESOLUTION NO. FD 2024-015) (FIRE)
RECOMMENDATION:
Staff recommends the Fire Board take the following actions:
1. Adopt the Rancho Cucamonga Fire Protection District General Fund (Fire District) preliminary budget in the amount of $55,824,110, which includes the Fire District’s General Fund budget of $50,967,920 and Fire District Capital Fund budget of $4,856,190.
2. Adopt a Resolution to approve the Fire District’s Appropriations Limit per Article XIIIB in the amount of $65,185,023 for the Fiscal Year 2024/25; and
3. Set a public hearing for the approval of a Fire District’s final budget for the regularly scheduled Fire Board meeting on July 17, 2024.
BACKGROUND:
The Fire Protection District Law of 1987 (Health & Safety Code Section 13800, et seq.), Chapter 7, requires the Fire Board to adopt a preliminary budget on or before June 30 of each year. That preliminary budget, with the exception of obligations for fixed assets and new permanent employee positions, is deemed appropriated on July 1 until the Board adopts the final budget.
The Fire Board must adopt the preliminary budget after making any changes on or before October 1 of each year. The final budget shall establish its appropriation limit pursuant to the State of California Constitution, Article XIIIB (Gann Limit). Additionally, a copy of the final budget must be forwarded to the auditor of each county in which the District is located.
As noted above, the Government Code requires that the Fire Board establish an appropriations limit annually based on the final budget, which was the amount of revnues, primarily property taxes, to provide for the expenditures of the Fire District. Historically, the District's final budget has mirrored the preliminary budget. As such, the Fire District's appropriations limit is calculated in conjunction with the adoption of the preliminary budget.
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The factors available in setting the appriations limit include:
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).
ANALYSIS:
On June 20, 2024, the Fire Board held a budget study session to review the Fire District’s budget for the Fiscal Year 2024/25, which included a specific discussion regarding the preliminary budget. The proposed budget continues to meet the City Council and Fire Board's direction of operating independently. The Fire District achieved a proposed, balanced operational budget through a combination of moderate revenue growth and prudent management of expenditures for operations and planned capital improvements.
The Fire Board has set an appropriations limit for Fiscal Year 2023/24 in the amount of $62,128,310. In terms of the adjustment to the appropriations limit, based on the factors for the appropriation limit (a Price Factor based on the change in non-residential valuation due to new development of 4.34% and Population Factor for the population change in the City of 0.56%), the Fire District's Fiscal Year 2024/25 appropriations limit is $65,185,023. For the Fiscal Year 2024/25, the Fire District's appropriations subject to this limit is $54,609,100, meaning that the Fire District appropriations are expected to be at 84% of the appropriation limit for the Fiscal Year 2024/25. The attached Resolution adopts the annual appropriations limit as required by Article XIIIB of the State Constitution.
Please refer to the City Manager's Executive Summary for specific details regarding the Fire District's preliminary budget. An advertised public hearing for the Fire District’s final budget adoption will be made and set for for July 17, 2024 at the regularly scheduled meeting of the Fire Board.
FISCAL IMPACT:
The actions taken by the Fire Board will establish the Fire District’s preliminary budget for the Fiscal Year 2024/25 and ensure the Fire District's compliance with Article XIIIB of the State Constitution.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
This item addresses the City Council’s core value of providing and nurturing a high quality of life for all by ensuring the Fire District can provide fire operation services and emergency response programs to the City.
ATTACHMENTS:
Attachment 1 – Fiscal Year 2024/25 Appropriation Limit Resolution