Agenda Item: 4
CITY OF SANTA CLARITA
AGENDA REPORT
UNFINISHED BUSINESS
CITY MANAGER APPROVAL:
DATE: June 27, 2023
SUBJECT: FISCAL YEAR 2023-2024 ANNUAL OPERATING BUDGET AND
CAPITAL IMPROVEMENT PROGRAM
DEPARTMENT: City Manager's Office
PRESENTER: Carmen Magana
RECOMMENDED ACTION
City Council and City Council acting as Successor Agency to the former Redevelopment Agency of the City of Santa Clarita:
1. Adopt resolution adopting the Annual Budget for Fiscal Year 2023-24, making appropriations for the amounts budgeted and establishing policies for the administration of the adopted Annual Budget.
2. Adopt resolution adopting the 2023-24 Capital Improvement Program.
3. Adopt resolution approving and adopting the annual appropriations limit for the Fiscal Year 2023-24.
4. Adopt resolution electing to receive all or a portion of the tax revenues pursuant to the Health and Safety code (Community Development Law).
5. Adopt resolution amending the City's Classification Plan and Salary Schedule, providing for compensation of the employees of the City, and amending the City's Benefit Program.
6. Adopt resolution adopting an amendment to the Conflict of Interest code.
BACKGROUND
The Fiscal Year 2023-24 budget process is a six-month effort that began in January. In addition to staff preparation, the City Council Budget Committee, which is comprised of Mayor Gibbs and Mayor Pro Tem Smyth, reviews the proposed budget with the City Manager so that the City Manager can make a final recommendation to the entire City Council.
During the budget process, information about the City Budget is provided during multiple, noticed, public meetings, allowing for public comment. The meetings held during this year’s process are listed below:
1. City Council Budget Subcommittee Meeting: January 30, 2023
2. Joint Budget Study Session: February 7, 2023
3. City Council Budget Subcommittee Meeting: April 26, 2023
4. Joint Budget Study Session: May 2, 2023
5. Planning Commission Meeting: June 6, 2023
6. City Council Meeting - Public Hearing: June 13, 2023
The proposed draft budget was distributed on May 26, 2023, to the City Council. On June 6, 2023, during the Planning Commission meeting, the Planning Commission made a finding by minute action that the Draft Fiscal Year 2023-24 Capital Improvement Program is consistent with the City’s General Plan. Further, at the June 13, 2023, City Council meeting, a public hearing was conducted, and the draft budget was presented.
Total Appropriations
The Fiscal Year 2023-24 budget totals $322 million. This includes funding for the Capital Improvement Program, the Redevelopment Successor Agency, operations and maintenance, personnel, and debt services. When compared to the current year’s adopted budget, the proposed Fiscal Year 2023-24 budget represents a 7.5 percent increase, equivalent to $23 million.
Projected Revenues
A significant part of the budget process is estimating revenues for the upcoming fiscal year. This process is critical, as appropriations are based on these projections. Several factors are considered to ensure accuracy in our projections, including the state of the economy, historical trends, population projections/growth, and inflation. With this information, the City can best determine the revenue available for allocation.
For Fiscal Year 2023-24, total revenue meets total expenditure appropriations. Additionally, for certain one-time capital projects, the fund balance is appropriated.
General Fund Revenues
The City’s largest fund is the General Fund, representing $141.3 million in total revenue. Sales tax is typically the City’s leading General Fund revenue source and is projected to increase 5 percent, from the current adopted budget, to $48.3 million.
General Fund Expenditures
Fiscal Year 2023-24 General Fund expenditures total $141 million. General Fund expenditures for Fiscal Year 2023-24 include funding for operating departments, debt services, contingency, and transfers to other funds.
General Fund Operating Reserve
Reserves are a critical component of the budget because this is a funding source that can be counted on in case of an emergency or unforeseen opportunity. The operating reserve will remain at 20 percent of operating expenditures. For Fiscal Year 2023-24, the City’s operating reserve will total $21.3 million.
Capital Improvement Program
The Capital Improvement Program (CIP) is a key component of the budget and is of vital importance to the community as a whole as it includes prioritized projects such as parks, buildings, paseos, trails, and street enhancements that improve the quality of life for residents in our community. Comprised of a variety of multi-year and multi-funded capital projects, the CIP for Fiscal Year 2023-24 totals $90 million.
Resolutions
The City Council is being asked to adopt six separate resolutions. Each of the resolutions authorizes the City’s budget plan for general operations, CIP, and all personnel matters.
Summaries of the resolutions are listed below:
The first resolution adopts the Annual Budget for Fiscal Year 2023-24, makes appropriations for the amount budgeted and establishes policies for the administration of the budget. The first resolution includes the annual contracts list for Fiscal Year 2023-24, along with year-end adjustments to the budget for Fiscal Year 2022-23.
The second resolution adopts the Capital Improvement Program.
The third resolution adopts the Annual Appropriations Limit for Fiscal Year 2023-24.
The fourth resolution allows the City to elect to receive all, or a portion of, the tax revenues pursuant to Health and Safety Code Sections 33676 and 33607.5 (Community Redevelopment Law) and is required in order for the Redevelopment Successor Agency to receive property taxes in amounts equal to that which would have been received under the former Redevelopment Agency.
The fifth resolution provides for the compensation of City employees and amends the Position Classification Plan. Included within this resolution is a 4 percent Cost of Living Adjustment for all unrepresented regular, SEIU-represented regular, and part-time, temporary, and seasonal employees.
The sixth resolution adopts an amendment to the Conflict of Interest Code.
ALTERNATIVE ACTION
Other action as determined by the City Council and the Successor Agency to the former
Redevelopment Agency.
FISCAL IMPACT
The Fiscal Year 2023-2024 Budget totals $322 million, including $90 million for the Capital Improvement Program. The proposed budget is balanced.
ATTACHMENTS
1. Resolution - Annual Budget and Contract Worksheet
2. Resolution - CIP
3. Resolution - Appropriations Limit
4. Resolution - Tax Revenues
5. Resolution - Classification Plan and Salary Schedule
6. Resolution - Conflict of Interest