Administrative
Report
L.2., File # 24-1010 Meeting Date: 6/11/2024
To: MAYOR AND CITY COUNCIL
From: WENDY COLLAZO, FINANCE DIRECTOR
TITLE
CONTINUE THE PUBLIC HEARING TO CONSIDER THE FISCAL YEAR 2024-2025 CITY MANAGER’S PROPOSED BUDGET AND FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM AND
ASSOCIATED BUDGET RESPONSE REPORTS
PROCEDURES:
a. Reconvene the Public Hearing, take testimony;
b. Continue Public Hearing to June 18, 2024; and
c. Receive and file Budget Response Reports.
EXECUTIVE SUMMARY
On May 16, 2024, the City Council received the Proposed Budget for Fiscal Year 2024-25 and the Five-Year Capital Improvement Program (CIP). On May 21, 2024, the City Council was given an introductory presentation on the Budget and provided an opportunity to request additional Budget Response Reports. As part of the item, the City Council set June 4, 2024 as the date for the first Budget Hearing (focused on Department operations) and scheduled additional hearings for June 11 (focused on the Capital Improvement Program) and June 18, 2024, where Council will review proposed fee modifications and adopt the Budget. On June 18, 2024, the City Council will also consider a consent item to adopt the FY 2024-25 Appropriations Limit (GANN Limit).
BACKGROUND
The Proposed Budget (found on the City’s website at www.redondo.org/budget describes the work program the City will follow to achieve the goals and objectives for the coming year. The Budget is designed to be consistent with the City Council’s Strategic Plan, as well as the City’s adopted Financial Principles. The Budget emphasizes core services that are essential to the City’s mission.
The City Manager’s Budget Message describes the Budget development process, the projected financial outlook for the coming fiscal year, and summarizes the Budget’s proposed revenues and expenditures. It also presents recommended Decision Packages - additions or reductions to the base budget that are not contractually obligated or the result of annual personnel allocation updates - and their financial impact.
The Budget includes a Fund Summaries Section, which highlights the status of key fund balances and presents more detailed summaries (mini-financials) to describe important fund activities and business unit proformas.
L.2., File # 24-1010 Meeting Date: 6/11/2024
The Department Sections of the Budget identify each Department’s mission, level of personnel, annual maintenance and operations expenses, core services, key projects and assignments, and customer service work measures.
As previously presented, the proposed General Fund Budget for the upcoming Fiscal Year is summarized in the table below:
Consistent with past practice, the second budget hearing focuses on the City’s Capital Improvement Program budget. The CIP identifies the capital investment recommended to meet the City’s policy goals and to ensure good stewardship of the community’s existing infrastructure. The CIP identifies the projects, their estimated costs, and the financing methods proposed to implement the City’s capital investment goals, in addition to the maintenance of new and existing infrastructure.
Given the number of demands on City finances, it is essential that available grant and restricted funds be coordinated and leveraged to maximize the City’s capital resources to complete as many projects as possible. The proposed Capital Improvement Budget for FY 2024-25 accomplishes this goal and focuses on completing existing projects while addressing health and safety issues, legislated mandates, and priorities arising out of the Mayor and City Council’s strategic planning efforts. As a continuing trend, the City has experienced a significant increase in construction costs due to inflationary drivers. These
rising costs further the need to complete projects as quickly as possible and to devote available funding to existing projects to ensure individual project resources are sufficient to complete construction.
The proposed FY 2024-25 CIP contains $65.4 million in carryover funding for 112 previously approved projects, and $17.3 million in net new appropriations for 27 previously approved, and 13 new, projects. In total the FY 2024-25 proposed Capital Improvement Program Budget includes $82.7 million in funding for 125 projects.
L.2., File # 24-1010 Meeting Date: 6/11/2024
The project breakout for FY 2024-25 is as follows:
Project Type Carryover Funding
New Appropriations
FY 2024-25 Total
Sewer 3,305,592 1,033,520 4,339,112
Drainage 3,779,831 3,035,500 6,815,331
Street 30,707,810 10,693,107 41,400,917
Waterfront 17,289,278 1,094,641 18,383,919
Park 2,457,629 259,152 2,716,782
Public Facility 7,442,181 1,183,670 8,625,851
General Improvement 449,274 - 449,274
TOTAL 65,431,595 17,299,590 82,731,185
Throughout the Budget process, staff prepares and delivers Budget Response Reports (BRRs) to the City Council that respond to a variety of questions and cover a number of topics. These reports provide detailed information above and beyond what can be described in the Budget document, and offer supplemental information on the significant budget issues that are of interest to the City Council and may be addressed in the coming fiscal year and beyond. The Budget Response Reports are available on the City’s main budget webpage and are also included as an attachment with this report.
The BRRs completed to date, and the list of BRRs to be completed by the final Budget Hearing, are attached to this agenda item.
Staff will return to City Council on June 18, 2024 for the final scheduled public hearing, where Council will consider fee increases and final budget adoption. At the June 18, 2024 meeting, Council will also consider a consent item to adopt the FY 2024-25 Appropriations Limit (GANN Limit) for adoption.
COORDINATION
All City Departments participated in the preparation of the Fiscal Year 2024-25 City Manager’s Proposed Budget and Five-Year CIP. The Planning Commission reviewed the Five-Year Capital Improvement Program for General Plan conformity on May 23, 2024. The Public Works and Sustainability Commission reviewed the Budget on May 29, 2024; the Budget and Finance Commission on May 30, 2024; and the Harbor Commission is scheduled to review the Budget on June 10, 2024. Any Commission feedback provided on the Budget will be submitted to the City Council as part of Budget Response Report #36.
FISCAL IMPACT
The adopted version of the Fiscal Year 2024-25 Budget will create the financial guideline for all City operations. The Five-Year CIP is a planning document only. Only funding for capital projects identified in the first year of the Plan will be appropriated as part of the Fiscal Year 2024-25 Budget.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· FY 2024-25 Budget Response Reports-June 11, 2024
L.2., File # 24-1010 Meeting Date: 6/11/2024