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DISCUSSION
City of San Bernardino
Request for Council Action
Date: March 20, 2024
To: Honorable Mayor and City Council Members
From: Charles A. Montoya, City Manager
Barbara Whitehorn, Director of Finance and Management
Services
Department: Finance
Subject: Fiscal Year 2023/24 Mid-Year Budget Report
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Receive and file the Fiscal Year 2023/24 Mid-Year Budget Report; and
2. Adopt Resolution No. 2024-054 Authorizing the Director of Finance and Management Services to amend the Fiscal Year 2023/24 Operating Budget by $9,362,446 as outlined in the Fiscal Year 2023/24 Mid-Year Budget Report.
Executive Summary
The Mid-Year report presented to the Mayor and City Council provides an economic update, the City of San Bernardino’s budget performance for the first half of Fiscal Year 2023/24, and the City Manager’s recommended budget amendments for critical needs and enhanced service to the community.
Background
On October 4, 2023, the Mayor and City Council approved and adopted the Strategic Initiatives totaling $6,636,293: $1,610,693 in General Fund appropriations, $3,325,600 in General Fund Strategic Reserve Appropriations, and $1,700,000 in General Fund Capital Contingency Reserve Appropriations.
The Mid-Year Report for Fiscal Year 2023/24 continues the budget monitoring and performance for the year. This report includes a review of the City’s revenue trends and projections and a review of the General Fund expenditures and projections for the 1 8
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remainder of the fiscal year. The Mid-Year Budget Report is an important opportunity to review projected revenues and expenditures for the remainder of the fiscal year and consider critical needs that require additional funding.
Discussion
The City’s Finance team worked closely with departments to put together a mid-year review of the operating budgets, both revenues and expenditure. Each department prepared revenue estimates and projected its expenses for the remainder of the year.
In reviewing the budget performance with departments, the City Finance Department and Budget Division identified areas with potential savings to utilize for department needs and areas in which additional budget is needed for the remainder of the fiscal year. Further in this report is a detailed outline of the General Fund expenditures and operating budgets.
As the City continues to grow and align with the goals and priorities set forth by the Mayor and City Council, investments within the City are identified to position the City to continue to adequately provide the expected service levels to the community. The requests before the Mayor and City Council for review require additional funding and have been thoroughly reviewed by the City’s Budget and Finance team in partnership with the City Manager’s Office. As departments work to execute the programs and initiatives set forth with the Strategic Initiatives, the requests address only the most essential needs identified by the City Manager’s Office and departments. These requests supplement the ongoing work within the departments and expand their ability to meet the community's needs. The requests are detailed below with the fiscal impact for this fiscal year and any ongoing fiscal impact.
Overall, the projected revenues in the General Fund through the end of the Fiscal Year are estimated to be $218,558,821, and projected expenditures are estimated to be $206,707,152, inclusive of the City Manager’s recommendations included in this report.
The difference in the projected revenues and expenditures for the operating budget allows the City to maintain healthy reserves and remain fiscally sound; however, it is important to note that given the current additions to the budget from the time of adoption through Mid-Year, any additional significant investments outside of those presented in this report will result in the use of fund balance.
National Economic Trends
The U.S. Commerce Department’s Bureau of Economic Analysis (BEA) reported fourth-quarter real gross domestic product (GDP) increased at an annual rate of 3.3% in the fourth quarter of 2023, which far exceeded expectations, as compared to the real GDP increase of 4.9% in the third quarter. This growth was largely due to Americans making more and spending more. The leading contributors were services and goods.
Within the services category were food services, accommodations, and health care.
The goods category is comprised of nondurable goods (led by pharmaceutical products) and recreational goods and vehicles (led by computer software). The BEA further reported:
•The current-dollar personal income increased by $224.8 billion in the fourth quarter compared to $196.2 billion in the third quarter. 1 8
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•Disposable personal income increased $211.7 billion, or 4.2%, in the fourth quarter, compared to an increase of $143.5 billion, or 2.9%, in the third quarter. •Real disposable personal income increased 2.5%, compared to an increase of
0.3%.
•Personal savings were $818.9 billion in the fourth quarter, compared to $851.2 billion in the third quarter.
There was a reported decrease in residential fixed investments, which mainly reflected a decrease in overall new single-family construction and brokers’ commissions, and decreases in private inventory investment reflected a decrease in wholesale trade industries.
Overall, the national economy appears to show strong growth. While the fourth quarter grew at a slower rate than the third quarter (3.3% versus 4.9%), the economy is still performing above economist expectations, and recession appears nowhere in sight from a national outlook.
Local Economic Trends
The U.S. Bureau of Labor Statistics reports that the United States unemployment rate continues to stand at a record low of 3.5%. San Bernardino County reports 5.0% as of November 2023 as compared to 4.0% in November 2022. A 5.0% unemployment rate is very low overall; unemployment rates below 4% can indicate a market in which available jobs are not aligned with the labor available. Should the local and regional rates continue to rise, the potential lack of available employment opportunities could impact residents’ ability to find work and their economic well-being.
The CPI in the Riverside, San Bernardino, and Ontario MSA remained unchanged from October to November 2023. This is due to higher prices for shelter that are offset by lower prices for gas and other fuel. Over the last 12 months, the CPI advanced 4.3%, with food prices rising 3.8% and energy prices rising 0.5%.
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Prices of food such as meat, poultry, fish, and eggs decreased by 2.3%, and fruits and vegetables decreased by 2.1%; however, food prepared away from home increased only slightly (1.4%) during this period. The energy index decreased 6.0% during this period largely due to lower prices for gasoline while prices for electricity increased by
7.2% and prices for natural gas also increased by 1.2%. The index for all other items rose 0.6% during this period, driven by increases in recreation (1.4%) and shelter (1.3%).
Overall, the increase in the CPI indicates a rise in the overall cost of living in the region, which, in turn, affects residents’ purchasing power and impacts their budgets for everyday expenses. Changes in food prices, especially the decreases in certain items, influences household spending patterns. While the decrease in gasoline prices might provide some relief for consumers, the increase in electricity costs is likely to offset those savings.
General Fund Revenue Trends
The City of San Bernardino has operated in a period of growth and is now starting to see stability in the revenue streams it is highly dependent on. Positive revenue trends year to date through December 31, 2023, show that almost all revenue streams are trending on budget for the year. The primary drivers of the City’s revenue continue to be Sales and Use Tax and Measure S Transaction and Use Tax; however, Franchise Tax, Licenses and Permits, and Utility Users Tax are trending slightly higher than the amended budgets for the fiscal year. The review below covers some primary areas where revenue projections vary from the amended budget.
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Charges for Services
This revenue stream comprises fees the City collects from services provided to the community. Most notable in this category are plan check fees, code single-family inspection fees (SFIF), miscellaneous police receipts, program and facility use fees, and a number of other fees within this category. A revenue trend analysis was recently completed, and the results suggest that these revenues will trend slightly lower than the budget due to fluctuations in the construction and building sector. As departments continue recruiting and filling vacant positions directly impacting service levels to the community where these revenue streams are realized, some revenue categories may grow. Staff continues to monitor economic indicators that influence this revenue category, and the proposed FY 2024/25 & FY 2025/26 revenue budget will reflect any changes.
Franchise Tax
This revenue stream comprises the franchise fee agreements the City has with So Cal Edison, So Cal Gas, Charter Cable TV, Verizon, and Burrtec Disposal. The City anticipates seeing higher-than-anticipated franchise receipts, and this revenue estimate has been updated to reflect that increase. It’s important to note that most franchise fees received are distributed quarterly or twice annually, and only two quarters of the year have been received thus far.
Intergovernmental
The primary driving force behind this category is the service agreement between the San Bernardino International Airport Authority (SBIAA) and the City for two SBPD police officers to be assigned to SBIAA with the beginning of commercial flights in August 2022. Reimbursements for Police presence at special events are included within this category as well. As more events continue to be held in the City that request Police presence, the overtime that the Police department incurs is reimbursed and Account Classification Adopted Budget Amended Budget Year-to-Date December 31, 2023Estimated Year-EndFY 2023/24 Charges for services 9,133,250$ 9,133,250$ 3,241,934$ 9,087,250$ Fines and forfeitures 1,416,000$ 1,416,000$ 313,168$ 1,397,000$ Franchise Tax 12,791,000$ 12,791,000$ 3,387,931$ 13,280,000$ Intergovernmental 2,372,000$ 2,372,000$ 2,073,571$ 5,348,374$ Investment income 540,000$ 540,000$ 475,948$ 900,000$ Licenses & permits 12,768,000$ 12,768,000$ 8,835,429$ 14,378,500$ Measure S Sales Tax 51,000,000$ 51,000,000$ 13,180,638$ 50,528,000$ Miscellaneous 3,709,697$ 3,729,697$ 251,057$ 3,844,697$ Other Taxes 9,016,000$ 9,016,000$ 3,694,647$ 9,550,000$ Cannabis Tax 3,000,000$ 3,000,000$ 1,078,805$ 2,800,000$ Property Taxes in Lieu of VLF 23,000,000$ 23,000,000$ 195,283$ 23,000,000$ Sales and Use Tax 58,000,000$ 58,000,000$ 13,791,274$ 57,088,000$ Use of Money and Property 604,000$ 604,000$ (265,467)$ 2,357,000$ Utility Users Tax 21,000,000$ 21,000,000$ 12,534,750$ 25,000,000$ Total Revenues 208,349,947$ 208,369,947$ 62,788,966$ 218,558,821$ City of San Bernardino FY 2023/24 General Fund Revenues 1 8
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receipted within this category. This category’s year-end totals have been adjusted upward with input and projections from the Police department.
Licenses & Permits
The main driver in this category is the revenue that Business Registration collects for Business Licenses and Permits. An influx of revenue was seen in FY 2022/23 and in FY 2023/24 for the first half of the fiscal year due to the City’s Business Registration Inspectors working diligently to update outdated licenses and permits within the City for businesses that were out of compliance. While this revenue stream is expected to see more revenue this year, it will return to normal levels beginning FY 2024/25.
Sales & Use Tax and Measure S Transaction & Use Tax (TUT) The City is primarily a sales-tax dependent City, with Sales and Use Tax, and the Measure S Transaction and Use Tax representing over 50% of the FY 2023/24 General Fund revenues in the adopted budget. Sales tax receipts are reported and remitted to the State every month, and the City receives its remittance two months after the taxes are collected. The mid-year update reflects two months’ worth of sales tax receipts, and collections are trending on par with the amended budgeted amounts.
Staff continuously monitors economic indicators because sales tax is a volatile revenue stream. Staff evaluates local, state, and national trends to predict the potential impact of shifts in interest rates, inflation, and consumer confidence on the City’s revenue.
Consumer spending did not significantly drop in 2023, as some economists predicted.
Inflation has cooled, although it has not yet hit the desired Federal Reserve targets.
Interest rate hikes kept borrowing costs for homes, transportation, and equipment above 2022. Financing costs are expected to gradually decrease in the back half of 2024, and households will most likely stay on a path of placing spending priorities on essential items while choosing to defer non-essential purchases whenever possible.
As a City largely dependent on volatile revenue streams that are largely influenced by consumer confidence, the City should exercise prudence in budgeting as households continue to limit discretionary spending.
Sales & Use Tax
Staff remains conservative with revenue projections. Based on year-to-date collections, economic indicators, and trend analyses, the Sales and Use Tax is projected to end the year slightly under the amended budget amount of $58 million by -1.6%, with a total estimated collection of $57 million for the fiscal year.
Measure S
Like the sales and use tax, this transaction and use tax represents a considerable portion of the City’s General Fund revenue. The actual collections to date are slightly lower than originally projected. Based on collections year-to-date, economic indicators, and trend analyses, staff estimates that the revenue stream will end the year -0.9% under the budgeted amount of $51 million, with estimated collections of $50.5 million. 1 8
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Cannabis Revenue
Cannabis revenue comprises approximately two percent of the total revenue for the City.
The revenue comes to the City through permit applications, regulatory fees, special events, and the cannabis tax, which comprises the largest component. Revenues for mid- year are high due to remittance of late payment of taxes to the City. Staff anticipates that overall collections will nevertheless end the year under the adopted budget amount.
Economic Development and Business Registration staff are working with the companies that are late paying to expedite payment.
Utility User Tax
Given that the CPI for electricity has increased locally in the last quarter, the Utility User Tax revenue category is seeing the direct result. Staff is anticipating this revenue stream to end the year 19.0% over the adopted budget amount, with estimated collections of $25 million.
Below is a bar chart of anticipated revenue performance for FY 2023/24. The Amended Budget is $208.4 million and total revenue is forecast to be nearly $218.6 million.
General Fund Expenditures
Departments continue to recruit positions to ensure a high level of service and to staff programs and initiatives that positively impact the community. Various recruitments are ongoing to fill positions granted during the Strategic Initiatives. During the mid-year review process, the Finance team reviews the actual expenditures year-to-date with each department and projects areas that may need additional funding through the end of the
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fiscal year due to unexpected expenses.
The chart below provides a snapshot of the General Fund current year-to-date transactions through December 2023 and the anticipated projections through the end of the fiscal year. Most of the departments remain on track for the fiscal year with a few exceptions that will require additional funding, as outlined below.
Budget Performance
For the most part, departments are performing at or below budget as of December 31.
The Police Department shows expenditures of 56% of budget; however, the CalPERS actuarially required annual contribution for the City’s unfunded pension liability is paid up front each July. The Safety, or Police, portion of the liability is entirely paid from within the Police Department personnel budget, making it appear as if the department has overspent their budget early in the fiscal year. If this payment, which for FY 2023/24 was $23.2 million is normalized over 12 months, the department is at 46% of budget as of December
31. The Miscellaneous employee portion of the liability, which was $9.6 million for FY 2023/24, is paid through each department with non-safety employees.
Departments significantly under budget are struggling to hire qualified employees. While economic indicators suggest that labor challenges should be easing, the market remains competitive, and turnover is problematic. When departments are able to hire qualified employees, they are too often poached by higher paying cities, counties, special districts and even the private sector within a few months of hire.
Budget Amendments – Maintaining Current Service Levels
In reviewing the operating budget expenditures at mid-year a few critical items were identified that will require additional budget amendments. Critical items that require additional budget exist in both the General Fund and the Liability Fund. Staff is requesting that the Mayor and City Council approve the following budget amendments due to Department Adopted Budget Amended Budget
Year-to-Date December 31, 2023
Percent of Budget(50% of FY)
Estimated Year-EndFY 2023/24Mayor 305,812$ 305,812$ 145,431$ 48% 305,812$ City Council 1,084,346 1,092,321 593,995 54% 1,092,321City Clerk 1,836,829 1,908,667 645,723 34% 1,748,820City Attorney 4,309,583 4,309,583 1,497,525 35% 5,304,826General Government 17,647,856 17,901,045 4,850,545 27% 17,504,376City Manager 3,019,056 3,440,261 1,365,118 40% 3,440,261Human Resource 2,741,874 2,981,453 1,147,140 38% 2,975,837Finance 5,587,998 5,671,902 2,540,732 45% 5,580,156Special Assessment District 150,000 150,000 114,321 76% 114,321Capital Improvement Projects 2,000,000 2,950,618 105,377 4% 2,000,000Community & Economic Development 11,721,180 14,045,411 4,732,391 34% 12,092,145Police 115,050,227 118,707,864 66,114,665 56% 116,734,761Parks Recreation & Community Services 5,054,805 5,286,060 2,300,260 44% 5,224,619Public Works 29,879,002 34,884,813 12,358,940 35% 31,164,575Library 2,869,459 2,869,459 1,320,000 46% 2,924,322Budgeted Expenditure Savings (2,500,000) (2,500,000) (875,000) 35% (1,500,000)Total General Fund Expenditures 200,758,027$ 214,005,269$ 98,957,163$ 46% 206,707,152$ General Fund FY 2023/24 Expenditures
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unforeseen expenses:
General Fund Departments
Legal Services
The City has seen increased tort litigation since exiting the Chapter 11 Bankruptcy. The City no longer enjoys the benefits of bankruptcy protection, and plaintiffs' attorneys once again see the City as a viable target for litigation. Most of the budget and costs associated with the Legal Services Office are driven by specialized legal counsel retained for specific projects and large cases, not the municipal legal services retainer with BB&K for day-to- day legal work and review. Like many fields, professional services are subject to the same inflationary pressures affecting other sectors of the economy. As the City continues to address several complex and high-profile cases that have proven difficult to resolve, staff recommends an increase of $1,000,000 to allow for outside specialized legal counsel to continue serving the City. Staff anticipates that this increase will be ongoing until all complex and high-profile cases have been settled, however, staff has sat with the Human Resources department and the Legal Services team to budget appropriately in the upcoming fiscal years. It should be noted that, despite inflationary pressures, the overall cost of legal services remains significantly lower with contracted legal services than the City paid when it had an in-house City Attorney's Office. Additionally, attorneys’ fees and costs represent a smaller portion of the City’s governmental expenses today than they did prior to the transition.
Police Department
The City continues to be a prime spot for hosting special events in which Police presence is requested. In order to keep up with the demand, staff recommends a budget increase of $875,000 to the Police department. This expense is directly correlated with the increase in the Intergovernmental category of revenues, meaning that the City will be directly reimbursed for this cost, making this a net zero budget impact item.
Internal Service Fund Departments
Liability Fund
The Liability Fund maintains a balance from which claims liabilities are paid. The General Fund pays into this fund annually to ensure adequate funding to pay estimated claims. As of December 31, 2023, the Human Resources Department has expensed approximately $7.7 million, using 84% of the amended budget of $9.2 million. Due to higher-than- anticipated settlement agreements, staff is recommending an addition of $7 million in FY Fund Adopted Budget Amended Budget
Year-to-Date December 31, 2023
Percent of Budget(50% of FY)
Estimated Year-EndFY 2023/24 Animal Services 4,621,705$ 5,019,449$ 2,170,821$ 43% 4,909,746$ Fleet Services 5,509,724 6,536,362 2,173,821 33% 6,536,362Information Technology 7,849,370 12,597,892 3,187,982 25% 12,597,892Liability Insurance 9,178,259 9,179,220 7,731,635 84% 16,179,220Workers Compensation 5,727,232 5,566,631 3,035,925 55% 5,766,631Total, Internal Service and Other Funds 32,886,290$ 38,899,553$ 18,300,183$ 47% 45,989,850$ Internal Service and Other Fund Expenditures
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2023/24 to cover these and upcoming additional expenses. It is important to note that the Outside Legal Services budget directly correlates with the increased costs of the Liability Claims. The representation of outside legal firms is needed to settle the claims paid from this fund.
Budget Amendments – City Manager’s Recommendations
During the mid-year review with departments the following requests were identified to meet the demand for services in the community. These requests are recommended by the City Manager to enhance the current service level and improve the ability of staff to serve the community. The City Manager recommends the approval of the following amendments to the Fiscal Year 2023/24 operating budget.
Community Development & Housing Department
The City currently contracts with Willdan Engineering to provide support to the City in the capacity of two (2) contract Building Inspectors. The Community Development & Housing Department has three (3) budgeted full-time employees, two of which are filled, and one is vacant. The City Manager recommends the addition of one (1) full-time Building Inspector to alleviate their dependence on contracted staff for the Building Division. On a national level, there is a high demand and a shortage in the labor market for Building Inspectors. This is due to cities competing to build up their infrastructure and not enough experts in the field to fill the positions. To recruit, cities offer extremely competitive pay, with which San Bernardino currently cannot compete. The cost and impact to the General Fund for the addition of this position is estimated to be $33,788 for FY 2023/24 and $104,520 for FY 2024/25.
Library
In 2008, the Library had an annual budget of approximately $3 million, 31 full-time staff, five management-level staff, the equivalent of a senior management analyst, and two administrative support staff. The Library was open 54 hours a week. By 2014, due to budget cuts, the annual budget for the department was reduced to $1.3 million, a 57% decrease, 11 full-time staff, a 65% decrease, and the Library Director was the only remaining management staff member. Feldheym Library was open 37 hours weekly, and the branches were only able to be open for 20 hours weekly.
Over the last three years, the Library has received more funds to expand public service hours and now has 17 staff and three literacy-grant funded staff, for a total of 20.
Nevertheless, the Library Director remains the only management staff member with an increased and more complex workload. The department receives $200,000 annually in grants in which the Library Director must oversee, including programs in partnership with the Literacy Program Coordinator, a position that was just recently filled. The City Manager recommends the addition of a Management Analyst to assist the Library Director with budgeting, grant reporting, managing grants, and ensuring compliance with grant requirements alongside the Literacy Coordinator position. Having a Management Analyst who could coordinate with the Literacy Program Coordinator on the budget and grant compliance would alleviate some of the Literacy Program Coordinator's duties and allow this position to focus more on overseeing programs and classes for the public. The cost 1 8
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and impact to the General Fund for the addition of this position is estimated to be $32,372 for FY 2023/24 and $108,217 for FY 2024/25.
The City Manager recommends the addition of a Library Technician so that all Library branches have equal staff support. Two of the three branches have two full-time Library Technicians. With only one full-time person at the third branch, keeping this branch staffed has proven to be challenging. While the department has part-time staff to backfill during absences, part-time staffing has proven to be a challenge in training and retention.
Additionally, the branch library hours doubled in the Fall of 2021 to 40 hours weekly, making it essential to have an additional full-time Library Technician. Funding a full-time employee would also allow for a decrease in the part-time budget needed within the department. The impact to the General Fund for the addition of this position is estimated to be $31,197 for FY 2023/24 and $76,340 for FY 2024/25.
Parks, Recreation & Community Services
For the past three years, the Parks, Recreation & Community Services Department has hosted Sizzling Summer Nights, which is a concert series hosted at the Roosevelt Bowl.
Attendance continues to grow as the department markets the events to the community.
The community has voiced that events such as the Sizzling Summer Nights foster a welcoming and inclusive environment. However, the Roosevelt Bowl will be undergoing major renovations for the next 16 months, which has pushed the department to request the purchase of a stage trailer. The stage trailer would allow for the concert series to continue during the renovation period. The stage will continue to be useful even after the reopening of the Roosevelt Bowl. Should Parks & Recreation, or any other department, host an event requiring a stage, they can use the stage and save the City rental costs ranging from $70,000 to $80,000 per use. Additionally, the City could potentially rent the trailer to other organizations when there is a city-wide event, generating rental revenue.
The impact to the General Fund for the purchase of the stage trailer is estimated to be $125,000 for FY 2023/24, which is a one-time cost.
The City Manager also recommends adding one (1) Community Recreation Program Supervisor within the Senior Nutrition Division. The Senior Nutrition Program provides lunch meals to the Senior Citizens of San Bernardino five days a week at 6 locations throughout the City. In FY 22/23, 68,000+ meals were served at these locations, proving the importance of this program to our senior citizens. Meals are served at Fifth Street Senior Center, Perris Hill Senior Center, Lytle Creek Community Center, Hernandez Community Center, the Highland Senior Center, and New Hope. The City has administered this program for over 40 years, mostly supported by part-time staff. Having a full-time Program Supervisor overseeing the program will allow the department to run this program seamlessly and oversee meal preparation, transportation of meals to the various locations, serving meals, and ensuring that all health and safety procedures are followed. The impact to the General Fund for the addition of this position is estimated to be $37,818 for FY 2023/24 and $82,899 for FY 2024/25.
Police
Over the last few years, SBPD has been awarded millions of dollars in grant funding. 1 8
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These grants have reporting requirements necessitating extensive timekeeping and payroll requirements. Currently, SBPD has one Accounting Technician whose primary responsibility is maintaining these payroll requirements. As the department and grant reporting has expanded, this task has far outpaced one technician’s workload. In the past two years, SBPD has lost three Accounting Technicians due to the payroll workload.
Additionally, ancillary tasks have not been attended to and have fallen by the wayside.
Failing to maintain grant reporting requirements puts current and future funding in jeopardy. To ensure compliance, the Management Analyst and Senior Management Analyst have had to allocate time to process payroll weekly. This is inefficient and has caused a lapse in other key areas of Finance within the department. The City Manager recommends adding one (1) full-time Accounting Technician to the department to assist with the Payroll functions. The cost and impact to the General Fund for the addition of this position is estimated to be $28,833 for FY 2023/24 and $81,863 for FY 2024/25.
In 2019, the Police Department recognized gaps in their professional staff workforce that were negatively impacting their ability to meet community expectations. Changes in legislation and community engagement have required law enforcement agencies to lean heavily on social media for community engagement, recruitment, and information sharing and to respond promptly to critical incidents before false narratives jeopardize the community's safety. The department consistently cites its successful social media capacity in grant proposals, and numerous grants totaling more than $5.5 million have social media components requiring extensive advertising campaigns. Building a robust professional staff investigations team allows the organization to meet its core objective of policing. Using professional staff does this at a reduced rate without substantially contributing to the unfunded pension liabilities. This has proven to be a successful strategy and has been emulated by other agencies throughout the state. Staff found an alternative funding source for these positions in a three-year state grant. Staff applied for and was awarded the grant of $1.1 million. These, in conjunction with several other positions, were funded and filled. This grant expired in December of 2023. Though all the funded positions are important, the Marketing and Public Relations Specialist and Criminal Investigation Officer are crucial to the department's continued success. The Marketing and Public Relations Specialist has played an integral role in developing the department's community engagement program. Over the past several years, the department has developed an extensive social media following (increasing from 69,000 to over 200,000 followers). Currently, the department has a larger number of Twitter, Instagram, and Facebook followers than any other police department in the County. The Criminal Investigation Officer has assisted with criminal investigations, resulting in a substantial decrease in Part 1 violent crime, a homicide solvability rate double that of the national average, and the incarceration of recurring criminal offenders. All of this was done in addition to the grant-required assignments. The City Manager recommends fully funding the Marketing and Public Relations Specialist and Criminal Investigation Officer through the General Fund. The impact to the General Fund for the addition of this position is estimated to be $72,568 combined for FY 2023/24 and $222,482 for FY 2024/25.
The Uniform Crime Reporting (UCR) program was established by the Federal Bureau of Investigation (FBI) in 1930 to collect and publish crime statistics based on data compiled 1 8
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and provided by law enforcement agencies throughout the country. UCR is a summary reporting system (SRS) covering ten offense types reported in aggregate form. The San Bernardino Police Department submits UCR data monthly. In 2016, the FBI approved a plan to move away from UCR summary reporting in favor of more detailed incident-based reporting (IBR) under the National Incident-Based Reporting System (NIBRS). The primary purpose of this change was to improve the quality of crime data collected by law enforcement and reported to the FBI. The NIBRS system captures up to 58 detailed elements on 34 reportable offense types, including data on victims, offenders, offenses, property, and their relationships. Additional contextual data on crime location, time, and clearance are also captured. The amount of information collected and reported under NIBRS surpasses that collected and reported under UCR. The Police Department currently assigns one full-time Police Records Technician to handle all UCR-related responsibilities. With the significantly increased requirements of NIBRS/CIBRS, the Police Department has undertaken an assessment of its current systems and staffing needs to comply with the new state and federal reporting laws. To comply with state and federal crime reporting laws, the City Manager recommends adding three (3) full-time Police Records Technicians, one (1) full-time Police Records supervisor, and the necessary training costs associated with onboarding these personnel and bringing them up to speed with the mandate and reporting requirements. The impact to the General Fund for adding these positions is estimated to be $125,870 for FY 2023/24 and $339,205 for FY 2024/25.
A summary of the City Manager’s recommended budget amendments is below.
Budget Impact, Revenues and Expenditures
While some revenues are anticipated to fall below initial budget estimates, others are filling the gap, and the City is expected to end FY 2023/24 with revenues over $218 million.
The City Manager recommendations and the critical needs will add $2,362,446 to the General Fund Operating Budget and $7,000,000 to the Liability Fund Budget.
Department Item Description Request Type FY 2023/24 FY 2024/25Legal Services Outside Legal Services Increase Ongoing 1,000,000$ 1,000,000$ Police Overtime Budget for Special Events One-Time 875,000$ -$ Human Resources (Liability Fund) Liability Claim Budget Increase One-Time 7,000,000$ -$ Community Development & Housing (1) Building Inspector Ongoing 33,788$ 104,520$ Library (1) Management Analyst Ongoing 32,372$ 108,217$ Library (1) Library Technician Ongoing 31,197$ 76,340$ Parks & Recreation Stage Trailer One-Time 125,000$ -$ Parks & Recreation (1) Community Recreation Program Supervisor Ongoing 37,818$ 82,899$ Police (1) Accounting Technician Ongoing 28,833$ 81,863$ Police (1) Marketing Specialist Ongoing 33,947$ 104,040$ Police (1) Criminal Investigation Officer Ongoing 38,621$ 118,442$ Police (3) Records Technicians, (1) Records Supervisor, and Training Costs Ongoing 125,870$ 339,205$ 9,362,446$ 2,015,526$ 2,362,446$ 2,015,526$ 7,000,000$ -$
FY 2023/24 Budget Amendments
Total Budget Amendments
Total General Fund AmendmentsTotal Liability Fund Amendments 1 8
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Total General Fund expenditures, inclusive of the proposed amendments, are forecast to be approximately $206.7 million, well below expected revenue of $218.5 million.
While the New Amended Budget assumes a use of Fund Balance of nearly $8 million, the forecast for FY 2023/24 is to end the year with a surplus of over $11.8 million. This is due to spending trends, salary and operational savings, and revenue expectations. 2021-2025 Strategic Targets and Goals
Receiving and Filing the FY 2022/23 Mid-Year Budget Update Report aligns with Key Target No. 1: Improved Operational & Financial Capacity. Updated revenue and expenditure projections provide the Mayor and City Council with important information and analysis needed to make financial decisions impacting the City.
Fiscal Impact
The total FY 2023/24 Budget Amendment is $9,362,446: $7,000,000 into the Liability Fund and $2,362,446 into the General Fund. $875,000 in revenues will also be amended for the reimbursable overtime within the Police Department.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Receive and file the Fiscal Year 2023/24 Mid-Year Budget Report; and
2. Adopt Resolution No. 2024-054 Authorizing the Director of Finance and Management Services to amend the Fiscal Year 2023/24 Operating Budget by $9,362,446 as outlined in the Fiscal Year 2023/24 Mid-Year Budget Report.
Attachments
1. Attachment 1 - Resolution No. 2024-054 Fiscal Year 2023-24 Budget Amendments
2. Attachments 2 – Fiscal Year 2023-2024 Mid-Year Report Presentation Ward:
All Wards
Synopsis of Previous Council Actions:
June 21, 2023 The Mayor and City Council adopted Resolution No. 2023- 080 approving the City of San Bernardino’s Operating Budget Adopted Budget Amended Budget Mid-Year Additions NEW Amended Budget ForecastTotal Revenue 208,349,947$ 208,369,947$ -$ 208,369,947$ 218,558,821$Total Expenditures 200,758,027 214,005,269 2,362,446 216,367,715 206,707,151Increase in (Use of) Fund Balance 7,591,920$ (5,635,322)$ (2,362,446)$ (7,997,768)$ 11,851,670$ General Fund Operating Budget
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and Capital Improvement Program (CIP) for Fiscal Year 2023- 2024.