City of Rialto
FISCAL YEAR 2022 ‐2023
DRAFT GENERAL FUND BUDGET
APRIL 26, 2022
2 Current FY 21‐22 Budget
City of Rialto
FY 22-23 Draft General Fund Budget
• City Council adopted balanced budget on July 27, 2021 • General Fund Revenues of $104.2 million
• General Fund Expenditures of $104.2 million
3 Current FY 21‐22 Budget
City of Rialto
FY 22-23 Draft General Fund Budget
• On Feb. 22, 2022 the City Council received FY 21‐22 Mid Year Budget Update, and increased sale tax revenues $21.6 million to $47.9 million to reflect estimated revenues at that time • Latest sales tax estimates for FY 21‐22 are $55.6 million reflecting a further increase of $7.7 million for FY 21‐22
4 Current FY 21‐22 Budget
City of Rialto
FY 22-23 Draft General Fund Budget
5 Sales Tax Revenue
City of Rialto
FY 22-23 Draft General Fund Budget
• Why the increased sales tax revenues?
• A certain fulfillment center changed its corporate ownership structure establishing it as a “point‐of‐sale” for sales tax revenues pursuant to California Dept. of Tax and Finance regulations
• Prior method of ownership required sales tax revenues to be distributed into the San Bernardino County “Pool”
6 Sales Tax Revenue
City of Rialto
FY 22-23 Draft General Fund Budget
• CAUTION!!!
• Increased sales tax revenues due to online sales may not be permanent!
• State may determine to revise sales tax distribution laws; or • Fulfillment centers may change corporate ownership requiring sales distributed through County “Pool”; or
• Fulfillment centers may change what goods are distributed in the centers to an “end of line” distribution with no sales tax generated.
7 Sales Tax Revenue
City of Rialto
FY 22-23 Draft General Fund Budget
• That being said – Rialto is now the #3 highest sales tax revenue generator in San Bernardino County based on Calendar Year 2021 data
8 Current FY 21‐22 Budget
City of Rialto
FY 22-23 Draft General Fund Budget
• Current FY 21‐22 Budget was originally adopted as balanced budget
• Throughout FY 21‐22 City Council amended FY 21‐22 Budget to allocated excess revenues from FY 20‐21 for new expenditures • Current amended FY 21‐22 Budget includes estimated General Fund revenue of $134.9 million and General Fund expenditures of $138.5 million with net deficit of $3.6 million
• Anticipate +$7.7 million in sales tax revenue and other revenue that will offset any deficit by end of FY 21‐22
9 Current FY 21‐22 Budget
City of Rialto
FY 22-23 Draft General Fund Budget
• In preparing revenue estimates, Staff is setting budgeted revenues closer to projected revenues (95%)
• Tax consultant, HdL, anticipates $56.5 million in sales tax revenue in FY 22‐23, budget includes 95% or $53.7 million, to provide some contingency for changes in the economy through FY 22‐23 • FY 22‐23 General Fund revenue budgeted at $134.8 million 10 Proposed FY 22‐23 Budget – General Fund Revenue
City of Rialto
FY 22-23 Draft General Fund Budget
11 Proposed FY 22‐23 Budget – General Fund Revenue
City of Rialto
FY 22-23 Draft General Fund Budget
12 Proposed FY 22‐23 Budget – General Fund Revenue
City of Rialto
FY 22-23 Draft General Fund Budget
• FY 22‐23 General Fund revenue budgeted at $134.8 million • Largest revenue sources are now:
1. Sales Tax = $53.7 million or 40%
2. Property Tax = $32.8 million or 24%
3. Utilities User Tax = $15 million or 11%
• All Taxes represent $107.8 million or 80%
13 Proposed FY 22‐23 Budget – General Fund Revenue
City of Rialto
FY 22-23 Draft General Fund Budget
14 Proposed FY 22‐23 Budget – General Fund Expenditures City of Rialto
FY 22-23 Draft General Fund Budget
• In preparing expenditure estimates, Staff is accounting for 100% of the full cost of the Allocated Positions Plan
• In past years the budget included salary savings as negative expenditures to reduce overall budget and did not allocate all part‐time positions
• City may experience 10‐20% vacancy rate depending on # of retirements and separations
• Budget should anticipate 100% employment of all part‐time and full time positions
15 Proposed FY 22‐23 Budget – General Fund Expenditures City of Rialto
FY 22-23 Draft General Fund Budget
• In preparing expenditure estimates, Staff is also accounting for more accurate General Liability (GL) and Worker’s Compensation (WC) claims experience
• The Budget includes an Internal Service Fund for GL and WC that allocates those costs back to each General Fund Department • In past years the budget carried lower than required
expenditures for the GL and WC Funds
• FY 22‐23 Budget increases GL expense by +$2.7 million and WC expense by +$4 million
16 Proposed FY 22‐23 Budget – General Fund Expenditures City of Rialto
FY 22-23 Draft General Fund Budget
• FY 22‐23 General Fund expenditures budgeted at $126.9 million • +$22.7 million over original FY 21‐22 General Fund budget • Reflects more accurate budgeting that includes the following:
1. +$5 million for full allocation of 155 part‐time positions
2. +$2.4 million for eliminating salary savings
3. +$2.6 million for 26 new positions
4. +$6.7 million for GL and WC expenses
17 Proposed FY 22‐23 Budget – General Fund Expenditures City of Rialto
FY 22-23 Draft General Fund Budget
18 Proposed FY 22‐23 Budget – General Fund Expenditures City of Rialto
FY 22-23 Draft General Fund Budget
• FY 22‐23 General Fund expenditures budgeted at $126.9 million • Largest expenditure sources are:
1. Police Department = $47.4 million or 38%
2. Fire Department = $27.3 million or 24%
3. Maint. & Facilities (Pub. Works) = $10 million or 8%* *Increase is due to collapsing the Building Maintenance and Fleet Maintenance Internal Service Funds into the General Fund in the Maint. & Facilities Department
19 Proposed FY 22‐23 Budget – General Fund Expenditures City of Rialto
FY 22-23 Draft General Fund Budget
20 Proposed FY 22‐23 Budget – Special Events
City of Rialto
FY 22-23 Draft General Fund Budget
• FY 22‐23 General Fund budget incorporates the various special and holiday events
• Two new events recommended:
1. Hispanic Heritage Month – September 2022
2. International Food Festival –M a y 2023
• Total special events budget estimated at $561,410
21 Proposed FY 22‐23 Budget –C i t y Council Conferences City of Rialto
FY 22-23 Draft General Fund Budget
• FY 22‐23 General Fund budget incorporates the various City Council conferences and approved travel list per Resolution No. 6789 • Five new conferences added in FY21‐22 are carried over:
1. California Economic Summit
2. CivicWell – Yosemite Policy Makers Conference
3. Independent Cities Association (ICA)
4. NALEO Conference
5. Water Education for Latino Leaders
• Total City Council conferences budget estimated at $332,300 22 Proposed FY 22‐23 Budget – Summary
City of Rialto
FY 22-23 Draft General Fund Budget
• FY 22‐23 General Fund revenue budgeted at $134.8 million • FY 22‐23 General Fund expenditures budgeted at $126.9 million • Net surplus of +$7.9 million
• Online sales tax revenue should be considered one‐time revenue setting aside 50% due to unknown future changes in sales tax allocations ($10 ‐ $12 million)
• Salary savings will occur through FY 22‐23 with 10% vacancies to be expected = $8.8 million +/‐
• End of FY 22‐23 surplus may increase to provide for set‐aside of online sales tax revenues
23 Proposed FY 22‐23 Budget – General Fund Reserve
City of Rialto
FY 22-23 Draft General Fund Budget
• City’s financial reserve and revenue growth is strong, BUT • Pension UAL was $130.9 million as of June 30, 2020
• Pension Obligation Bond will NOT reduce debt, just refinance interest rate, any savings will be budgeted in accordance with City Council pension investment policy
• OPEB liability was $48.4 million as of June 30, 2020 (recently reduced by Council’s transfers of $10 million with one‐time revenue) • City has existing debts and liabilities to consider with one‐time revenues
24 Proposed FY 22‐23 Budget – Personnel Changes
City of Rialto
FY 22-23 Draft General Fund Budget
• Community Development: (1) Development Services Specialist, (1) Office Specialist, (1) Permit Technician, (1) Senior Plans Examiner • Community Services: (3) Facility Maintenance Assistants • Fire Department: (1) Emergency Medical Service Specialist, (1) Senior Admin Analyst, (1) Admin Assistant, (1) Accounting Technician • IT Department: (1) IT Supervisor
• Maint. & Facilities: (1) Fleet Mechanic, (2) Facility Maint. Technicians, (6) Field Service Workers ‐ Streets
25 Proposed FY 22‐23 Budget – Personnel Changes
City of Rialto
FY 22-23 Draft General Fund Budget
• Police Department: (1) Property & Evidence Tech., (1) Crime Analyst Assistant, (1) Police Corporal, (1) Police Sergeant
26 Proposed FY 22‐23 Budget – Capital Investment
City of Rialto
FY 22-23 Draft General Fund Budget
• $4.4 million for the following major capital items:
1. $1.8 million for various IT hardware / software costs to improve cybersecurity and improve operations
2. $1 million to renovate / repurpose the Fitness Center
3. $750,000 for 1st year lease‐purchase payment of 87 new vehicles approved Oct. 2021
4. $500,000 for new public parking lot at Downtown Park (Riverside Ave. at Rialto Ave.)
27 Proposed FY 22‐23 Budget – Capital Investment
City of Rialto
FY 22-23 Draft General Fund Budget
5. $338,000 for 1st year least‐purchase payment of 2 new fire engines approved March 2021
6. $250,000 to rehabilitate City’s modular trailer at Preston Elementary for Tiny Tots Program
7. $220,000 for Holiday Tree and Light Towers
28 City of Rialto
FY 22-23 Draft General Fund Budget
Next Steps
April 26 Preliminary General Fund Budget
May 10 All Funds Comprehensive Draft Budget
May 24 Public Hearing ‐ Budget Adoption
June 14 Continued Public Hearing – Budget Adoption (if needed) QUESTIONS?