Agenda Item: 2
CITY OF SANTA CLARITA
AGENDA REPORT
NEW BUSINESS
CITY MANAGER APPROVAL:
DATE: December 13, 2022
SUBJECT: FISCAL YEAR 2022-2023 MID-YEAR BUDGET AMENDMENTS DEPARTMENT: Administrative Services
PRESENTER: Carmen Magana
RECOMMENDED ACTION
City Council and the City Council acting as Successor Agency to the Former Redevelopment Agency of the City of Santa Clarita:
1. Adopt a resolution amending the budgets for Fiscal Year 2021-2022 and Fiscal Year 2022- 2023.
2. Adopt a resolution amending the classification plan and salary schedules and providing changes to benefit contributions for employees and retirees of the City.
BACKGROUND
As the organization approaches the middle of the fiscal year (FY), City of Santa Clarita (City) staff evaluates the adopted budget, revenue projections, and economic conditions for the remainder of the fiscal year. It is standard procedure to perform a mid-year review of the City’s budgetary and financial position to ensure any deviations from the initial budget projections are proactively addressed. Staff also reviews requests for appropriations to address new priorities that are unfunded or under-funded.
Revenues
Recommended mid-year revenue budget amendments total $14,137,432. By fund, the revenue amendments are as follows:
General Fund $ 2,033,859
Various Grant Funds $ 8,465,797
Transit and Transportation Funds $ 1,038,339
Special Districts Funds $ 926,525
Other Revenue Funds $ 918,832
Internal Service Fund $ 843,045
Recreational Facility Fund $ 249,433
Gas Tax Fund $ (338,398)
Total Proposed Revenue Amendments $ 14,137,432
In the General Fund, the recommended revenue increase of $2,033,859 includes increases in revenue estimates for sales tax and transient occupancy tax for $800,000 each, $600,000 in contract classes attributed to the growing demand for classes, $300,000 in other revenue attributed to waste hauler reimbursement of the City’s request for proposal process cost, $215,000 in youth sports registration due to increased participation, $140,000 in film permit road use for increased studio parking, $62,207 for SB90 claims reimbursement from the State of California, and $1.0 million reduction in real property transfer tax resulting from reduced home sales.
The recommended revenue increase of $8,465,797 in Various Grant Funds includes revenue allocations that were deferred in the amount of $10.7 million in American Rescue Plan Act (ARPA) from the U.S. Treasury Coronavirus State and Local Fiscal Recovery Fund, and $291,508 from a CalRecycle grant for the implementation of programs related to SB1383 (Organics). It also includes a $1.9 million reduction in grant revenues that were budgeted in fiscal year 2022-23, but funds were received in fiscal year 2021-22 for the reimbursement of expenditures related to the Vista Canyon Metrolink Station, and $366,117 in Proposition C grants for Intelligent Transportation System Phase VI and VII, and $175,594 in Surface Transportation Program related to 2019-20 federal overlay project savings.
Recommended revenue increases of $1,038,339 for Transit and Transportation Funds includes $589,156 in federal grants of which $300,000 is for a transportation development plan update grant, $558,138 in Access Services (ASI) reimbursements, $200,000 in Los Angeles County contributions for services related to unincorporated areas of the City, $56,113 in Transit Access Pass (TAP) card sales, and a decrease of $365,068 to adjust Transportation Development Act (TDA) Article 8 funding for the Dockweiler Drive Alignment.
Recommended revenue increases in Special Districts Funds for $926,525 includes a $521,525 transfer for areawide parks maintenance, $195,000 landscape maintenance fund transfer from Los Angeles County for the Tesoro Adobe Park annexation, $150,000 in tourism marketing district (TMD) estimated revenues brought by higher occupancy, and $60,000 in traffic lights infrastructure damage insurance recovery.
Recommended revenue adjustments in Other Revenue Funds for $918,832 includes a $984,436 increase in transfers to the debt service fund for Energy Efficiency debt service payment, $78,537 increase in public library grants, and a $144,141 reduction in SB1 revenues per updated estimates released subsequent to the annual budget.
The increase in Internal Service Funds for $843,045 includes surplus workers compensation reserves for $782,553, and $60,492 for vehicle damages insurance recovery.
Recommended revenue increase in the Recreational Facility Fund for $249,433 represents $432,469 increase in on-ice revenue and $4,529 in miscellaneous revenue, and reductions include $50,000 for sponsorships, $77,965 for on-site filming, $51,600 in food concessions and off-ice revenue, and, $8,000 in City merchandise.
The recommended revenue decreases for $338,398 in Gas Tax Fund accounts for updated state revenue estimates.
Expenditures
Recommended mid-year expenditure budget additions total $9,061,862. By fund, the expenditure amendments are as follows:
General Fund $ 3,121,856
Pension Liaibility Fund $ 2,000,000
Special Districts Fund $ 1,130,134
Internal Service Fund $ 921,149
Other Revenue Funds $ 865,102
Recreational Facility Fund $ 640,531
Transit and Transportation Funds $ 216,010
Various Grant Funds $ 118,904
Developer Fee Fund $ 48,176
Total Proposed Expenditure Amendments $ 9,061,862
In the General Fund, the recommended expenditure budget amendments for $3,121,856 includes $689,105 transfer to Debt Service Fund for Energy Efficiency bond debt service, $521,525 transfer to Areawide Fund for parks operations and maintenance, and $400,000 transfer for general fund capital projects. It also includes a $356,200 increase to support higher contract classes demand, $255,536 adjustments to personnel budget, $245,000 for fuel for City vehicles and equipment operations, $90,000 for credit card processing fees as a result of increased number and value of credit card transactions, $50,000 compressed natural gas (CNG) fueling station motor units replacement at the Corporate Yard, $95,000 for electric and gas utilities at City Hall and Corporate Yard as a result of increased utility rates, $40,000 for City Hall heating, ventilation, and air conditioning (HVAC) repairs, $27,822 to establish a base budget for the operations at Tesoro Adobe House, which includes Part-Time salaries for $22,512, $17,783 for Creekview Park property taxes per lease agreement, and $7,900 for the replacement of ultraviolet (UV) lights at City Hall and Corporate Yard. Expenditure increases also include two capital projects: $350,000 for City Hall Space Planning to reconfigure several suites to ensure appropriate work space availability and $50,000 to convert the second tennis court at Bouquet Canyon Park to a pickleball court. It also includes a $74,015 one-time salary reduction for inspections and enforcement activities related to SB1383 (Organics) that will be funded by the CalRecycle grant.
The recommended expenditure increase in the Pension Liability Fund for $2,000,000 represents an additional contribution toward the City’s Unfunded Accrued Pension Liability.
The recommended expenditure increase of $1,130,134 in Special Districts Funds includes tree trimming contracts for $106,579 and $83,741 for Urban Forestry and 47 LMD local zones, respectively, attributed to CPI increase in August, $204,668 for landscape maintenance at Tesoro Adobe Park, $195,946 in gas and electric utilities for parks and at Santa Clarita Sports Complex, $139,000 for parks ground maintenance and landscape supplies resulting from increased cost, $170,000 in traffic signal electric utility, $100,000 in property damage to traffic lights infrastructure not recovered through insurance, $50,000 safety enhancements on Market Street between Newhall Avenue and Cross Street that would include flashing beacons for pedestrians and bicyclists safety, and $80,000 roof replacement at the Newhall Park aquatics building in conjunction with the Energy Efficiency HVAC replacement project.
The recommended expenditure increases in Internal Service Fund for $921,149 includes $782,553 in the Self-Insurance Fund to maintain sufficient general liability reserves per the most recent actuarial report, and $138,596 for the replacement of three City vehicles.
Expenditure increases of $865,102 in Other Funds includes $984,436 in the Debt Service Fund for principal and interest payments related to the Energy Efficiency project, $123,537 in public library funds to appropriate the Stronger Together and Lunch at the Library grants as well as gas and electric utilities at the libraries. It also includes a reduction of $248,971 for personnel budget adjustments.
The recommended expenditure increases in Recreational Facility Fund for $640,531 includes $295,331 transfer to debt service fund for principal and interest payments related to the Energy Efficiency project, $234,746 for the Cube’s operator contract to support the figure skating and hockey programs, $31,954 revenue share as a result of increased operator revenue, $88,500 for electric utility, and a $10,000 reduction related to the City store merchandise program.
The net $216,010 expenditure increase in Transit and Transportation Funds includes expenditure increases of $432,300 of which $300,00 is for a transportation development plan update to ensure continued safe and efficient transit services across the next five to ten years, $114,000 is to replace two computer room air conditioning units at the transit maintenance facility (TMF) due to failures and obsolescence, $15,000 is for electric and gas utility at the TMF, and $3,300 to replace the UV light bulbs at transit facilities. Transit and transportation expenditure decreases of $216,290 reflect the return of 2019-20 Federal Overly project savings.
The recommended net expenditure increase of $118,904 in Various Grant Funds includes appropriation of a $291,508 CalRecycle grant to assist with SB1383 customer service related functions and activities, $9,000 for audit fees related to ARPA and Emergency Assistance expenditures, a reduction of $175,594 in Surface Transportation Program grant revenues related to FY 2019-20 federal overlay project savings, and $6,010 in Community Development Block Grant (CDBG) grants to match Housing and Urban Development (HUD) allocations.
The recommended expenditure increase of $48,176 in the Developer Fees Fund includes $90,000 for the McBean Parkway Realignment and a transfer reduction of $41,824 to the general fund for the City’s 5 percent share of fire district administrative fees due to lower actual revenues received in the prior year.
Amendment to the FY 2021-2022 Budget
Upon review of the General Fund revenues and expenditures for the year ending June 30, 2022, and in anticipation of future facilities funding needs, it is staff’s recommendation to amend the FY 2021-2022 budget and transfer funds from the General Fund to the Facilities Fund in the amount of $12.5 million.
Amend the Classification Plan and Salary Schedules and Provide Changes to Benefit Contributions for Employees and Retirees of the City
This resolution amends the City’s classification plan and salary schedule and provides changes to City-paid benefit contributions for active and retired employees effective January 2023.
ALTERNATIVE ACTION
Other actions as determined by the City Council.
FISCAL IMPACT
Approval of the Fiscal Year 2022-2023 mid-year budget amendments will increase estimated revenues for all funds by $14,137,432 and budgeted expenditures by $9,061,862. Additionally, the Fiscal Year 2021-2022 budget will be amended by $12.5 million.
ATTACHMENTS
Resolution Amending the Budgets for FY 2021-22 and FY 2022-23 Resolution Approving Classification Salary Schedules and Benefit Allowance Change