City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-00355 2/27/2024 Discussion Item 24.
Title:
Fiscal Year (FY) 2023/24 Budget Update and FY2024/25 Budget Preview File ID: 2024-00355
Location: Citywide
Recommendation:
Adopt a Resolution: 1) accepting the FY2023/24 budgetary adjustments; 2) committing $7.4 million in FY2022/23 year-end resources for future budget development; 3) committing non-mandated General/Measure U (G/MU) Fund revenues and positive net year-end results under Sections 17 and 18 of the Approved Budget Resolution (Resolution 2023-0205) for future budget development reserves; and 4) committing projected FY2023/24 salary savings in the G/MU Fund for future budget development.
Contact: Peter Coletto, Finance Director, (916) 808-5416, [email protected], Mirthala Santizo, Budget Manager, (916) 808-5078, [email protected], Department of Finance Presenter: Peter Coletto, Finance Director, (916) 808-5416, [email protected], Mirthala Santizo, Budget Manager, (916) 808-5078, Department of Finance Attachments:
1-Description/Analysis
2-Resolution
3-Revenue Adjustment Details
Description/Analysis
Issue Detail: As the City prepares for the upcoming budget cycle, the latest forecast shows substantial budget deficits in FY2024/25 and future fiscal years. The proposed budget commitment and authority discussed below will allow the City Manager to implement strategies to balance the budget as required by the Charter.
G/MU Updated Forecast
File ID: 2024-00355 2/27/2024 Discussion Item 24.
The updated FY2023/24 forecast shown below includes the approval of labor contracts by Council as of January 16, 2024. While FY2023/24 is balanced, FY2024/25 and future fiscal years are projected to have budget deficits ranging from $66.0 million growing to $122.1 million as costs for labor and supplies associated with program and service delivery continue to increase over the term of the forecast. It is important to note that the increased deficits versus the forecast provided in the FY2023/24 Approved Budget are the result of increased spending, not a reduction of revenues, and that those revenues are not growing as fast as forecast in May of 2023. The updated forecast does not project a recession; if a recession were to occur the projected deficits would become much larger. 5-Year Forecast
General (G) and Measure U (MU) Funds ($ in 000s)
FY2023/24
Approved
FY2024/25
Projection
FY2025/26
Projection
FY2026/27
Projection
FY2027/28
Projection
BEGINNING AVAILABLE FUND BALANCE 731 62 - - - Projected Resources 776,771 789,358 805,767 825,438 844,603 Use of One-time Budget Reserves 25,400 5,100 - - - Projected Expenses (819,431) (865,987) (895,069) (918,998) (945,329) Gross Funding Gap (17,259) (71,530) (89,302) (93,560) (100,726) Projected Salary Savings 16,590 16,922 17,260 17,605 17,957 Net Funding Gap (669) (54,608) (72,042) (75,955) (82,769) Homelessness Services Resources 42,373 34,783 11,460 11,507 11,555 Homelessness Services Expenses (42,373) (46,220) (50,269) (50,451) (50,955) Funding Gap - Homelessness Services - (11,437) (38,809) (38,944) (39,400) Incident Management Team Resources (from Operations) 5,000 - - - - Incident Management Team Expenses (5,000) - - - - Total City Funding Gap (669) (66,045) (110,851) (114,899) (122,169) ENDING AVAILABLE FUND BALANCE WITH HOMELESS SERVICES62 (65,983) (110,851) (114,899) (122,169) Citywide and Department Revenue/Expenditure Adjustments Based on revenue performance through the first half of FY2023/24, staff is recommending several revenue adjustments resulting in a reduction of $6.6 million, are reflected below:
Revenue Type (dollars in 000s)
FY2023/24
Approved
FY2023/24
Amended $ Change % Change
Interest on Investments 1,500 4,000 2,500 166.7%
Property Tax In-Lieu of Vehicle License Fee 61,775 63,260 1,485 2.4% Cannabis Business Operations Tax 21,966 23,103 1,137 5.2% Transient Occupancy Tax 6,792 6,644 (147) -2.2%
Measure U Transactions & Use Tax 135,124 133,081 (2,043) -1.5% Utility User Tax 68,165 65,092 (3,073) -4.5%
General Sales & Use Tax 110,227 103,761 (6,465) -5.9%
Recommended Midyear Revisions 405,549$ 398,942$ (6,607)$ -1.6% Due to the $1.1 million increase in estimated Cannabis Business Operations Tax, there will be a $455K increase to the Sacramento Children’s Fund. As established by the passage of Measure L in November 2022, 40% of total revenues generated would be appropriated in the Sacramento Children’s Fund (Measure L Youth Funding multi-year operating project (MYOP) - I80000100).
File ID: 2024-00355 2/27/2024 Discussion Item 24.
Based on revenue performance through the first half of FY2022/23, eleven City departments are recommending associated revenue and expenditure adjustments which total $3.7 million, as reflected in the following table:
Expenditure
Change
Department (dollars in 000s) FY2023/24
Approved
FY2023/24
Amended $ Change $ Change $ Net
Change
City Manager 3,770 3,790 20 0 20
City Attorney 52 52 0 0 0
City Clerk 42 42 0 0 0
City Treasurer 4,780 5,500 720 0 720
Finance 952 1,083 131 0 131
Information Technology 400 646 246 246 0
Human Resources 0 80 80 80 0
Police 10,615 13,237 2,623 800 1,823
Fire 46,914 48,159 1,245 0 1,245
Public Works 20,948 25,388 4,440 3,562 878
Convention and Cultural Services 728 1,065 338 234 103
Youth, Parks, and Community Enrichment 3,967 4,931 964 964 0 Community Development 31,447 28,447 (3,000) (1,800) (1,200) Recommended Midyear Revisions $124,615 $132,420 $7,805 $4,086 $3,719 General Fund Revenues
The five-year forecast has been updated to reflect the revenue adjustments listed above and, where applicable, associated expenditure budget adjustments as prescribed in Resolution No. 2023-0205.
Detailed information on the citywide revenue and department revenue/expenditure adjustments is included in Attachment 3.
G/MU Fund Balance and Commitment for Future Budget Development As presented in the FY2022/23 Annual Comprehensive Financial Report (ACFR), year-end net results (revenues less expenditures) resulted in one-time G/MU Fund budgetary resources of $7.4 million. The updated FY2023/24 G/MU five-year forecast projects an operating deficit starting in FY2024/25. Staff recommends committing the $7.4 million for FY2024/25 budget development.
Budget Balancing Authority
Sections 17 and 18 of the Approved Budget Resolution (Resolution 2023-0205) authorize general and year-end budgetary adjustments to various budgets, funds, capital projects and MYOPs. Given the projected budget gaps in future fiscal years, staff recommends the authority to commit non- mandated G/MU fund revenues and positive net year-end results under Sections 17 and 18 to future budget development reserves.
Staff also recommends the authority to commit projected FY2023/24 salary savings in the G/MU Fund for future budget development. These recommendations proactively identify and commit
File ID: 2024-00355 2/27/2024 Discussion Item 24.
resources to address deficits.
Policy Considerations: This report is consistent with Council’s direction to keep the Council informed on the fiscal condition of the City.
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): This report concerns administrative activities and government fiscal activities that do not constitute a “project” as defined by the CEQA Guidelines sections 15378 and California Public Resources Code section 21080 and are not subject to the provisions of CEQA (CEQA Guidelines section 15060(c)(3)). CEQA review for any project, which utilizes funds allocated in this report, has been or will be performed in conjunction with planning, design, and approval of each specific project as appropriate.
Sustainability: Not applicable.
Commission/Committee Action: The Budget and Audit Committee will review the report on February 27, 2024.
Rationale for Recommendation: The actions recommended in this report address the budget commitment and authority necessary to help close the budget gaps in future fiscal years.
Financial Considerations: The proposed budgetary commitment and authority requests will provide tools and resources towards efforts to balance the FY2024/25 Proposed Budget.
Following is the five-year forecast in expanded detail:
5-Year Forecast
General (G) and Measure U (MU) Funds ($ in 000s)
FY2023/24
Approved
FY2024/25
Projection
FY2025/26
Projection
FY2026/27
Projection
FY2027/28
Projection
BEGINNING AVAILABLE FUND BALANCE 731 62 - - -
Revenues
Revenues 770,820 783,934 806,751 827,946 849,059
Other Sources 4,753 3,689 3,404 3,429 2,900
Total Revenues/Resources 775,573 787,622 810,154 831,374 851,959 Expenditures
Department Operating, Debt, and MYOPs 748,985 781,911 809,369 832,185 857,926 Capital Projects 14,217 14,635 14,444 14,469 13,941
EUR Contribution 3,860 4,027 4,163 4,277 4,403
Total Expenditures/Uses 767,061 800,573 827,976 850,932 876,270 Surplus/(Deficit) 8,512 (12,951) (17,821) (19,557) (24,311) Other Sources/(Uses)
Reserve for Future Budget Development (FY2020/21) - 10,000 - - - Reserve for Future Budget Development (FY2021/22) - 20,500 - - - Shift Reserves to Address Deficits 25,400 (25,400) - - - FY2023/24 Revenue Adjustments 1,198 1,735 (4,387) (5,936) (7,355) FY2023/24 Department Expenditure Adjustments (4,086) - - - - Vacancy Factor 16,590 16,922 17,260 17,605 17,957
Labor Agreements (28,689) (44,805) (46,307) (47,099) (47,907) Other Spending Increases (10,353) (11,823) (12,000) (12,181) (12,366) Total Other Sources/(Uses) 60 (32,871) (45,434) (47,611) (49,671) Voter-Approved Spending
Measure L (8,787) (8,787) (8,787) (8,787) (8,787)
FY2023/24 Amended Set-Aside (455) - - - -
Total Voter-Approved Spending (9,241) (8,787) (8,787) (8,787) (8,787) Surplus/(Deficit) with Other Sources (669) (54,608) (72,042) (75,955) (82,769) Homeless Services
Schedule 9 MYOP Funding 12,456 11,414 11,460 11,507 11,555 Homeless Services Resources (HHAP) 19,833 21,643 - - -
Whole Person Care Savings 7,162 - - - -
Current Year Savings/ARPA Scrub 2,922 1,727 - - -
FY2023/24 Year-End Resources 5,000 - - - -
Incident Management Team (5,000) - - - -
Homeless Services Programming (42,373) (46,220) (50,269) (50,451) (50,955) Total Homeless Services - (11,437) (38,809) (38,944) (39,400) Surplus/(Deficit) with Homeless Services (669) (66,045) (110,851) (114,899) (122,169) ENDING AVAILABLE FUND BALANCE WITH HOMELESS SERVICES 62 (65,983) (110,851) (114,899) (122,169)
File ID: 2024-00355 2/27/2024 Discussion Item 24.
5-Year Forecast
General (G) and Measure U (MU) Funds ($ in 000s)
FY2023/24
Approved
FY2024/25
Projection
FY2025/26
Projection
FY2026/27
Projection
FY2027/28
Projection
BEGINNING AVAILABLE FUND BALANCE 731 62 - - - Revenues
Revenues 770,820 783,934 806,751 827,946 849,059 Other Sources 4,753 3,689 3,404 3,429 2,900 Total Revenues/Resources 775,573 787,622 810,154 831,374 851,959 Expenditures
Department Operating, Debt, and MYOPs 748,985 781,911 809,369 832,185 857,926 Capital Projects 14,217 14,635 14,444 14,469 13,941 EUR Contribution 3,860 4,027 4,163 4,277 4,403 Total Expenditures/Uses 767,061 800,573 827,976 850,932 876,270 Surplus/(Deficit) 8,512 (12,951) (17,821) (19,557) (24,311) Other Sources/(Uses)
Reserve for Future Budget Development (FY2020/21) - 10,000 - - - Reserve for Future Budget Development (FY2021/22) - 20,500 - - - Shift Reserves to Address Deficits 25,400 (25,400) - - - FY2023/24 Revenue Adjustments 1,198 1,735 (4,387) (5,936) (7,355) FY2023/24 Department Expenditure Adjustments (4,086) - - - - Vacancy Factor 16,590 16,922 17,260 17,605 17,957 Labor Agreements (28,689) (44,805) (46,307) (47,099) (47,907) Other Spending Increases (10,353) (11,823) (12,000) (12,181) (12,366) Total Other Sources/(Uses) 60 (32,871) (45,434) (47,611) (49,671) Voter-Approved Spending
Measure L (8,787) (8,787) (8,787) (8,787) (8,787) FY2023/24 Amended Set-Aside (455) - - - -
Total Voter-Approved Spending (9,241) (8,787) (8,787) (8,787) (8,787) Surplus/(Deficit) with Other Sources (669) (54,608) (72,042) (75,955) (82,769) Homeless Services
Schedule 9 MYOP Funding 12,456 11,414 11,460 11,507 11,555 Homeless Services Resources (HHAP) 19,833 21,643 - - - Whole Person Care Savings 7,162 - - - - Current Year Savings/ARPA Scrub 2,922 1,727 - - - FY2023/24 Year-End Resources 5,000 - - - - Incident Management Team (5,000) - - - - Homeless Services Programming (42,373) (46,220) (50,269) (50,451) (50,955) Total Homeless Services - (11,437) (38,809) (38,944) (39,400) Surplus/(Deficit) with Homeless Services (669) (66,045) (110,851) (114,899) (122,169) ENDING AVAILABLE FUND BALANCE WITH HOMELESS SERVICES 62 (65,983) (110,851) (114,899) (122,169) The forecast shown above does not include $7.4 million in FY2022/23 year-end resources in the G/MU Funds. Staff recommends committing the $7.4 million for FY2024/25 budget development. If this recommendation is approved, the projected deficit in FY2024/25 would be reduced to approximately $58.6 million.
Ongoing reduction strategies adopted by Council during the FY2024/25 budget process will reduce
File ID: 2024-00355 2/27/2024 Discussion Item 24.
the projected budget deficits in the future fiscal years of the forecasts.
Local Business Enterprise (LBE): No goods or services are being purchased under this report.
Attachment 2
RESOLUTION NO. 2024-XXXX
Adopted by the Sacramento City Council
February XX, 2024
Fiscal Year (FY) 2023/24 Recommended Budgetary Commitment and Authority Adjustment
BACKGROUND
A. Revenue adjustments are recommended based on revenue performance through the first half of FY2023/24. These revenue adjustments include various General Fund citywide revenues, General Fund department revenues, and Measure U revenues.
B. The IT Critical Infrastructure Program (A07000700) is used to support future citywide technology initiatives.
C. The Americans with Disabilities Act (ADA) Education and Training multi -year operating project (I08000100) is used for the purpose of increasing disability access and compliance with construction-related accessibility.
D. The Shared-Rideable Implementation Project (K15195100) is used to provide parking and other infrastructure needs for shared rideables such as bicycles, electric bicycles, scooters, and motorized scooters.
E. The Sacramento Valley Station Operations and Management Program (I15001000) is used for the ongoing operations and management of the Sacramento Valley Station’s leasable tenant spaces.
F. The Old Sacramento Garbage Service Courts Program (M17700000) is used to support infrastructure related to solid waste and recycling services in Old Sacramento.
G. The Old Sacramento District Improvements Program (M17700100) is used to support ongoing infrastructure needs in Old Sacramento.
H. The Joe's Crab Shack and Rio City Café Repairs and Maintenance Program (B18119000) is used to support repairs and maintenance of the City-owned facilities leased to Joe's Crab Shack and Rio City Café.
I. The Measure L Youth Funding Program (I80000100) is the Sac ramento Children’s Fund, and i t i s used to support positive youth development and youth violence prevention programs for children and youth less than 25 years old.
J. The updated FY2023/24 G/MU five -year forecast projects an operating deficit beginning in FY2024/25. A commitment from FY2022/23 year-end resources is necessary to help balance the FY2024/25 budget.
K. Sections 17 and 18 of the FY2022/23 Approved Budget Resolution (Resolution 2022- 0198) and FY2023/24 Approved Budget Resolution (Resolution 2023-0205) authorize the City Manager to make general and year-end budgetary adjustments to various budgets, funds, capital projects and multi-year operating projects (MYOPs).
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Manager or the City Manager’s designee is authorized to decrease the General Fund (Fund 1001) revenue budget in the Fiscal Year (FY) 2023/24 Citywide and Community Support Operating Budget by $5,563,556.
Section 2. The City Manager or the City Manager’s designee is authorized to decrease the Measure U Fund (Fund 2401) revenue budget in the FY2023/24 Citywide and Community Support Operating Budget by $1,043,305.
Section 3. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue and expense budgets in the FY2023/24 City Manager’s Office Operating Budget by $19,638.
Section 4. The City Manager or the City Manager’s designee is authorized to decrease the Measure U (Fund 2401) expense budget in the FY2023/24 City Manager’s Office Operating Budget by $19,638.
Section 5. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue budget in the FY2023/24 City Treasurer’s Office Operating Budget by $720,000.
Section 6. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue budget in the FY2023/24 Finance Department Operating Budget by $131,115.
Section 7. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue budget in the FY2023/24 Information Technology (IT) Department Operating Budget by $246,000 and to increase the expenditure budget of the IT Critical Infrastructure Program (A07000700) by $246,000 (General Fund, Fund 1001).
Section 8. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue budget in the FY2023/24 Human Resources Department Operating Budget by $80,000 and to increase the expenditure budget of the Americans with Disabilities Act (ADA) Education and Training Program (I08000100) by $80,000 (General Fund, Fund 1001).
Section 9. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue budget in the FY2023/24 Police Department Operating Budget by $2,622,589 and to increase the General Fund (Fund 1001) expenditure budget in the FY2023/24 Police Department Operating Budget by $800,000.
Section 10. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue budget in the FY2023/24 Fire Department Operating Budget by $1,244,872.
Section 11. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue budget in the FY2023/24 Public Works Department Operating Budget by $4,264,338, to increase the General Fund (Fund 1001) expenditure budget in the FY2023/24 Public Works Department Operating Budget by $3,076,085, to increase the expenditure budget in the Shared-Rideable Implementation Program (K15195100) by $148,600 (General Fund, Fund 1001), and to increase the expenditure budget in the Sacramento Valley Station Operations and Management Program (I15001000) budget by $162,000 (General Fund, Fund 1001).
Section 12. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue and expense budgets in the FY2023/24 Convention and Cultural Services Department Operating Budget by $337,579.
Section 13. The City Manager or the City Manager’s designee is authorized to decrease the Measure U (Fund 2401) expense budget in the FY2023/24 Convention and Cultural Services Department Operating Budget by $109,579, to increase the expenditure budget in the Old Sacramento Garbage Service Courts Program (M17700000) by $2,063, to increase the expenditure budget in the Old Sacramento District Improvements Program (M17700100) by $2,062, and to increase the expenditure budget in the Joe's Crab Shack and Rio City Café Repairs and Maintenance Program (B18119000) by $2,062.
Section 14. The City Manager or the City Manager’s designee is authorized to increase the General Fund (Fund 1001) revenue and expense budgets in the FY2023/24 Youth, Parks, and Community Enrichment (YPCE) Department Operating Budget by $963,883.
Section 15. The City Manager or the City Manager’s designee is authorized to decrease the General Fund (Fund 1001) revenue budget in the FY2023/24 Community Development Department Operating Budget by $3,000,000 and to decrease the expenditure budget in the FY2023/24 Community Development Department Operating Budget by $1,800,000 (General Fund, Fund 1001).
Section 16. The City Manager or the City Manager’s designee is authorized to increase the expenditure budget in the Measure L Youth Funding Program (I80000100) by $454,900 (General Fund, Fund 1001) to align the program with 40% of projected cannabis business operations tax revenues for FY2023/24.
Section 17. The City Manager or the City Manager’s designee is authorized to decrease the General Fund (Fund 1001) available fund balance by $2,422,227.
Section 18. The City Manager or the City Manager’s designee is authorized to decrease the Measure U (Fund 2401) available fund balance by $920,275.
Section 19. The commitment of $7,400,647 in FY2022/23 General/Measure U Fund year-end resources for FY2024/25 budget development is authorized.
Section 20. The commitment of non-mandated G/MU fund revenues and positive net year-end results under Sections 17 and 18 of the FY2022/23 Approved Budget Resolution (Resolution 2022-0198) and FY2023/24 Approved Budget Resolution (Resolution 2023-0205) for future budget development reserves is authorized.
Section 21. The commitment of projected FY2023/24 salary savings in the G/MU Fund for future budget development is authorized.
Adopted by the City of Sacramento City Council on February XX, 2024, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
Attest:
Attachment 3
Citywide Revenue Adjustments Details
A. Interest on Investments, $2.5 million: Over the past 18 months, the City’s Pool A investment yield has increased from 1.15% in June 2022 to 2.60% in December of 2023. The City Treasurer’s Office is updating their annualized yield for FY2023/24 to 2.24% excluding investment fees. This will result in an additional $2.5M of G/MU one-time revenue. Interest income for all funds will be reevaluated as part of the FY2024/25 budget development process and adjustments will be made to the five-year forecast.
B. Property Tax In-Lieu of Vehicle License Fees (VLF), $1.5 million: The State’s 2004 property tax for VLF swap permanently reduced the VLF rate from 2% to
0.65%, shifted the VLF revenue to the state General Fund to make up for reduced property taxes to schools and shifted property taxes from the school share to property tax in-lieu of VLF to cities/counties. The projected increase is based on recent information provided by the County of Sacramento Audit-Controller Division indicating the City will receive an additional $1.5 million, or 2.4%, over the approved budget.
C. Cannabis Business Operations Tax (CBOT) Revenues, $1.1 million:
Cannabis tax revenue is gen erated from cultivation, manufacturing, testing, delivery, microbusiness, dispensary, and distribution. CBOT revenue increased by $0.2 million or 2.2% during the first six months of FY2023/24 compared to the same period in FY2023/34. Distribution, Cultiva tion and Dispensaries, which comprise the three largest components of CBOT increased by 10.3%, while the smaller components of CBOT decreased by 34%. Based on the year -to-date collections, staff are anticipating an increase of $1.1 million, or 5.2%, in CBO T revenues.
D. Transient Occupancy Tax (TOT), -$147,000: TOT is a general tax imposed on occupants of hotels, motels, inns, etc. The City’s TOT is 12%, of which the General Fund receives two percent of the 12% (or 1/6th). The remaining 10% (or 5/6th) is deposited in the Community Center Fund. Based on collections through the first five months of FY2023/24, TOT revenue has increased by 8.3% compared to the same period in FY2022/23. However, this increase is lower than the CBRE forecasted projection. Staff is recommending a 2.2% reduction to the General Fund portion of TOT and the Community Center Fund will make a corresponding reduction to their portion of TOT revenue (discussed in the Enterprise Fund section).
E. Measure U Transaction & Use Tax, -$2.0 million: The estimates for FY2023/24 have been updated to reflect recent trends in revenue collections and are based on sales tax projections from Avenu Insights & Analytics, the City’s sales tax consultant. The City receives three forecasting scenarios from Avenu Insights & Analytics and uses the most -likely scenario for the current budget year. The average of the conservative and most-likely forecasts are used for future years in the five-year forecast. Measure U Transactions and Use Tax is expected to decline by 6.9% in the construction sector and inflationary pressures continue to decrease disposal income for consumers across all sectors.
F. Utility User Tax (UUT), -$3.1 million: UUT is a usage tax on telecommunication, cable, gas, and electric services. Based on collections through the first five months of FY2023/24 UUT revenue has decreased by 6.2% compared to the same period in FY2022/23. PG&E usage has declined by 22% due to a mild fall season, telecom landline usage declined by 17% and customers continued to cut the cable cord resulting in a 12% reduction compared FY2022/23. Electricity accounts for 64% of UUT revenue compared to 47% six years ago and stayed flat compared to the prior year. In addition, SMUD is r aising its rates by 8.3% and PG&E will increase rates by 14.6% over the next twelve months. These increases will offset the loss of revenue from the telecommunication and cable components of UUT.
Based on the year -to-date collections, staff are anticipatin g a decrease of $3.1 million, or 4.5%, in UUT revenues.
G. General Fund Sales and Use Tax (Bradley Burns), -$6.5 million: The estimates for FY2023/24 are updated to reflect recent trends in revenue collections and are based on sales tax projections from Aven u Insights & Analytics, the City’s sales tax consultant. The City receives three forecasting scenarios from Avenu Insights & Analytics and uses the most -likely scenario for the current budget year. The average of the conservative and most-likely forecasts are used for future years in the five-year forecast. General sales tax is expected to decline by $6.5 million or
5.9% compared to the FY2023/24 approved budget. Sales in the construction sector are projected to decline by 11.9%, transportation will declin e by 5.9% and the City’s pro-rata share of the county sales tax pool will decline by 3.7%.
Department Revenue/Expenditure Adjustments Details
A. City Manager’s Office, $20,000:
The City Manager’s Office is projecting revenues above budget of approximately $20,000 related to the property management services agreement for Greyhound Terminal between the City and the Downtown Sacramento Revitalization Corp.
B. City Treasurer’s Office, $720,000:
The City Treasurer’s Office is projecting revenues above budget due to a higher interest rate environment compared to previous fiscal years. Staff will continue to monitor trends in interest rates over the coming months and will adjust revenue budgets accordingly.
C. Finance Department, $131,000:
The Finance Department is projecting revenues above budget of approximately $131,000 mostly due to truing up charges and fees in the Revenue Division to actual amounts received based on historical data.
D. Information Technology Department, $246,000:
The IT Dep artment is projecting revenues above budget of approximately $246,000. These revenues will be used to support the IT Critical Infrastructure Program (A07000700) for future citywide technology initiatives.
E. Human Resources Department, $80,000:
The Human Re sources Department is projecting revenues of approximately $80,000 for fees related to Certified Access Specialist (CASp) programs. State law requires these fees to be allocated for CASp activities. These revenues will be budgeted in the Americans with Disabilities Act (ADA) Education and Training multi-year operating project (I08000100).
F. Police Department, $2.6 million:
The Police Department is projecting approximately $1.8 million above budget in state-mandated reimbursements for FY2023/24 and approx imately $800,000 above budget in reimbursable services as outlined in the City’s Secondary Employment Program. The Police Department expenditure budget will increase by $800,000 to cover the expenses being reimbursed.
G. Fire Department, $1.2 million:
The Fire Department is projecting $1.2 million in revenues above budget due mostly to special district revenues.
H. Public Works Department, $4.4 million:
The three main drivers of the additional revenues projected in the Public Works Department are parking enf orcement revenues of approximately $938,000, concrete maintenance and sidewalk repairs provided to private entities of approximately $1.5 million, and franchise fees collected from commercial waste haulers of approximately $1.6 million. The Department’s ex penditures will be increased by a like amount for the concrete maintenance and sidewalk repairs and for the franchise fees from commercial waste haulers. Other expenditures include the Shared -Rideable Implementation Project (K15195100) and the Sacramento Valley Station Operations and Management Program (I15001000).
I. Convention and Cultural Services Department, $338,000:
The Convention and Cultural Services Department is projecting revenues above budget of approximately $338,000 in the History Division. The majority of these revenues will be used for required payments to the State of California, maintenance costs in the Old Sacramento Historic District, and various Old Sacramento capital improvement projects.
J. Youth, Parks, and Community Enrichment, $964,000:
The Youth, Parks, and Community Enrichment Department is projecting approximately $964,000 in revenues above budget . These revenues will be used to support departmental operations in the current fiscal year.
K. Community Development, -$3 million:
The Community Development Department is projecting revenues below budget due to slower than anticipated growth in construction and special use permits ($1.2 million). The Department is also projecting $1.8 million in revenues below budget due to lower tha n anticipated usage of on -call contracting for plan checks, which will be offset by decreasing the Department’s expenditure budget for on -call contracting by a like amount.