Proposed
2024-25 Budget and
2024-29 Capital
Improvement Plan
June 3, 2024
1 Agenda
2 • Budget Process & Highlights
• Proposed 2024-25 Citywide Budget
• Proposed 2024-25 General Fund Budget & Long-Term Plan • Proposed 2024-25 Capital Budget and Five-Year Plan
• Challenges and Financial Sustainability
Budget Process
January 2024 February 2024 April 2024 June 2024
Budget
Kickoff
February 20
2023-24 Mid-Year
Updates
April 15
Budget Preview
June 3
Proposed Budget
1st Public Hearing
June 17
Budget Adoption
2nd Public Hearing
3 2024-25 Budget Highlights
4 • Primary focus on operating budget
2024-25: First year of the two-year budget cycle
• General Fund: $168.8 million
• Enterprise Funds: $58.6 million
• Other Funds: $28.7 million
Citywide operating budget: $256.1 million
• Five-Year CIP Totals: $240.0 million
CIP: $65.2 million for FY 2024-25
Total budget: $321.3 million for FY 2024-25
Citywide Budget (in millions)
5 SALARIES, WAGES
& BENEFITS *
$155.3
48%
MATERIALS,
SUPPLIES, SERVICES
$60.8
19%
DEBT SERVICE
$29.1
9%
OTHER
$10.9
4%
CAPITAL IMPROVEMENT
PROJECTS
$65.2
20%
Operating Budget $256.1 million
Capital Budget $65.2 million
*including the City's share of San Mateo Consolidated Fire Dept (SMC Fire)'s personnel and legacy costs Proposed FY 2024-25
Citywide Budget - $321.3 million
General Fund Summary
(shown in millions)
6 GENERAL FUND
2024-25
Proposed
Budget
Total Revenues 169.8$
Total Expenditures, including transfers 180.4
Net Change (10.6)
General Fund Revenues (in millions)
7 General Fund FY 2024-25
Revenues Projections
$169.8 millionProperty Tax
$84.0
49%
Sales Tax
$30.1
18%
Real Property
Transfer Tax
$8.0
5%
TOT
$4.0
2%
Business Tax
$7.8
5%
Other Revenues
$35.9
21%
Major Tax Revenues
8 Property Tax: 3.5 - 4%
Sales Tax: Stay flat with 1-2% moderate growth
Real Property Transfer Tax (RPTT): baseline $8 million Transient Occupancy Tax (TOT): baseline $4 million
VLF Shortfalls
9 Property Tax In-Lieu of Vehicle License Fee (VLF):
2024-25 VLF
$16.2 million 2024-25 VLF available
$10.2 million
2022-23 VLF shortfall
$4.2 million
FY 2024-25 VLF
Revenue
Projection
$14.4 million
General Fund Expenditures (in millions)
General Fund FY 2024-25
Proposed Budget
$180.4 million
10 City Administration
$17.8
10%
Community
Development
$2.3
1%
Library
$9.8
5%
Parks and
Recreation
$22.6
13%
Police
$63.5
35%
Public Works
$11.7
7%
Non-Departmental
$5.0
3%
Transfers Out
$11.6
6%
San Mateo
Consolidated Fire
Department
Constribution and
Fire Legacy Costs
$36.1
20%
General Fund Long-Term Plan
Assumptions:
• State will continue to fund VLF, but at reduced levels • Property Tax: 4% Annual Growth
11 0
50 100
150
200
250
2024-25
Proposed
2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 General Fund Revenues vs. Expenses
(in millions)
Operating Expenses Transfers Out - Debt Service & Other Total Revenues $99.2
$86.9
$75.3
$63.6
$51.1
$39.6
$29.3
$21.4
$15.6 $13.3 $13.7
0 20
40 60
80 100
120
2024-25
Proposed
2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 General Fund Balance Forecast
(in millions)
General Fund - Ending Fund Balance 25% Operating Reserve Capital Improvement Plan (CIP)
The following is a breakdown of CIP expenses by program areas (in millions):
12 2024-25
Proposed
2025-26
Plan
2026-27
Plan
2027-28
Plan
2028-29
Plan
Five-Year CIP
Totals
Bikeway/Pedestrian 3.1$ 2.4$ 5.6$ 1.2$ 0.5$ 12.7$ Bridges 8.9 0.1 0.0 0.8 - 9.8 Buildings 8.9 9.6 8.3 4.4 2.6 33.8 Parks 3.0 14.2 2.9 2.2 1.3 23.5 Sanitary Sewer (Clean Water Progra 27.8 7.8 27.7 20.7 19.3 103.3 Stormwater 0.6 0.2 0.2 0.2 0.2 1.2 Streets 9.9 8.3 8.3 8.3 8.1 42.7 Traffic - 2.2 1.0 0.3 0.3 3.9 Other City Capital Projects 3.1 1.3 1.5 2.0 1.2 9.2 Total $ 65.2 $ 46.0 $ 55.4 $ 40.0 $ 33.4 $ 240.0 CIP Budget Highlights
General Fund & Measure S
13 Fund & Measure S
Annual
Baseline
Contribution
2024-25
Proposed
General Fund Contribution 4.25$ 4.40$
Measure S 3.00 3.70
Funding from closed-out projects - 2.00 Total $ 7.25 $ 10.10
CIP Budget Highlights
Special Revenue Funds
14 Annual
Baseline
Contribution
2024-25
Proposed
Gas Tax 1.25 2.30
Measure A 3.00 3.46
M easure M 0.35 0.95
Measure W 1.00 1.05
RMRA 2.70 3.20
Total $ 8.30 $ 11.0
CIP Budget Highlights
• Clean Water Program - Close to completion
• Smooth Streets Program – Continue to commit $8 million annually • Storm and Flood Controls – Approved Community Flood and Storm Protection Fee brings in reliable revenues. The next step is to complete the Citywide Stormwater Master Plan, and use the new funding for immediate storm preparedness and mitigation improvements.
• Bikeway and Pedestrian Improvements – Five-year CIP allocates $12.7 million.
In the upcoming fiscal year, $3.0 million was included in the proposed budget:
$1.6 million for safe route to schools and $0.5 million for Quick-Build Program. 15 Unfunded Projects
16 Approximately $360 million
Challenges
17 • Revenues remain flat with moderate growth
• VLF shortfall remains an uncertainty
• TOT revenue loss due to Marriott hotel closure
• Rising costs of providing essential city services
• Pension costs
• Aged City facilities & infrastructure
Financial Sustainability
• Increase Revenues
• Optimize cost recovery
• Use special and restricted funding first
• Look for grant funding opportunities
• Seek new revenues
• Consider potential future revenue measure
• Reduce Spending
• Reduce discretionary spending
• Reduce staffing levels, e.g. hiring freeze
• Review General Fund reserve policy
18 Q&A
Karen Huang
Finance Director
[email protected]
650-522-7110
19 Labor Cost Allocation
FTE Est. Costs
General Fund
(GF) Cost Offseting
Net Fiscal
Impact to
General Fund
Special
Revenue
Funds
Facility
Fund
Stormwater
Fund
Sewer
Fund
Senior Management Analyst 1 190,000$ 190,000$ (148,000)$ 42,000$ -$ -$ -$ -$ Senior Planner 1 200,000 - - - 200,000 - - Housing Specialist 1 164,000 82,000 - 82,000 82,000 - - Financial Specialist I/II 1 112,000 - - - 56,000 - - 56,000 Community Services Coordinator 1 117,000 117,000 (117,000) - - - - Library Assistant I/II 1 89,000 89,000 (89,000) - - - - Facility Maintenance Worker 1 125,000 - - - - 125,000 - Maintenance Worker I/II 2 234,000 - - - - - 234,000 Public Work Supervisor 1 193,760 - - - 29,064 - 9,688 155,008 Public Work Supervisor 1 193,760 - - - 29,064 - 67,816 96,880 Laboratory III 1 152,000 - - - - - - 152,000 WWTP Electrical Technician 1 165,000 - - - - - - 165,000 Total 13 1,935,520 478,000 (354,000) 124,000 396,128 125,000 311,504 624,888 Reallocate Building Official to Deputy CDD Director/Building Offici - 50,000 - - - 50,000 - - - Reallocate 1.0 FTE HR Technician to HR Analyst I/II - 25,500 25,500 - 25,500 - - - - Reallocate 1.0 FTE Program Assistant to Sr. Program Assistant - 12,000 12,000 - 12,000 - - - - Reallocate 1.0 FTE Community Service Section Manager to Community Service Manager - 48,000 48,000 - 48,000 - - - - Reallocate 1.0 FTE Project Manager to Sr. Project Assistant - 12,000 12,000 - 12,000 - - - - Reallocate Database Specialist to Maintenance Planner - 30,800 - - - - - - 30,800 Total - 178,300 97,500 - 97,500 50,000 - - 30,800 Grand Totals 13 2,113,820$ 575,500$ (354,000)$ 221,500$ 446,128$ 125,000$ 311,504$ 655,688$ Supplemental Information
20 Summary of FTE changes
Supplemental Information
21 General Fund
Budget Preview vs. Proposed Budget
GENERAL FUND
2024-25
Budget
Preview
Estimates
2024-25
Proposed
Budget
VARIANCE
Total Revenues 166.8 169.8$ 3.0
Total Expenditures, including transfers 177.3 180.4 3.1 Net Change (10.5) (10.6) (0.1) Supplemental Information
22 General Fund Revenues
Budget Preview vs. Proposed Budget
General Fund Revenues
2024-25
Budget
Preview
2024-25
Proposed
Budget
Change in $ Change in %
Property Tax 83.5$ 84.0$ 0.5$ 0.6% Sales Tax 30.1 30.1 (0.0) -0.1% Real Property Transfer Tax 8.0 8.0 - 0.0% TOT 4.0 4.0 - 0.0% Business Tax 7.0 7.8 0.8 11.4% Interest and Misc. 3.4 4.9 1.5 44.1% Other Revenues 30.8 31.0 0.3 0.8% General Fund Revenues 166.8$ 169.8$ 3.0$ 1.8% Supplemental Information
23 General Fund Expenditures
Budget Preview vs. Proposed Budget
2024-25
Budget
Preview
2024-25
Proposed
Budget
Change in $ Change in %
Personnel 88.2$ 92.6$ 4.4$ 4.9% Non-Personnel Operating 40.0 40.1 0.15 0.4% SMC Fire and Legacy Costs 36.1 36.1 - 0.0% Transfers Out 13.0 11.6 (1.44) -11.1% Total 177.3$ 180.3$ 3.1$ 1.7% Supplemental Information
24 General Fund
Pension Costs
Supplemental Information
25 Citywide
Pension Costs