Agenda Item: 2
CITY OF SANTA CLARITA
AGENDA REPORT
NEW BUSINESS
CITY MANAGER APPROVAL:
DATE: December 12, 2023
SUBJECT: FISCAL YEAR 2023-2024 MID-YEAR BUDGET ADJUSTMENTS DEPARTMENT: Administrative Services
PRESENTER: Brittany Houston
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 2022-2023 and Fiscal Year 2023- 2024.
2. Adopt a resolution amending the classification plan and salary schedules and providing changes to benefit contributions for employees and retirees of the City of Santa Clarita.
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 $10,225,032. By fund, the revenue amendments are as follows:
General Fund $ 1,452,585
Various Grant Funds $ 3,273,851
Special Districts Funds $ 5,060,000
Pension Liability Fund $ 396,338
Recreational Facility Fund (The Cube) $ 344,046
Other Revenue Funds $ 94,614
Transit and Transportation Funds $ 53,000
Gas Tax & SB1 Funds $ (449,402)
Total Proposed Revenue Amendments $ 10,225,032
In the General Fund, the recommended revenue adjustment is an increase of $1,452,585.
Included in this figure are increases of $1.8 million in development revenues attributed to continued residential activities and large projects, $400,000 in property tax revenue, $844,000 in franchise fees, transient occupancy tax for $200,000 due to steady occupancy/room rates and the addition of the new Hampton Inn hotel, facility rentals for $86,659, and $10,386 transfer in from the developer fee fund for fire admin fees. It also includes decreases of $1.6 million in sales tax revenue due to slower than anticipated growth, $278,300 in film permits and fees as a result of the writers’ and actors’ strikes, and $125,000 in animal licenses.
The recommended revenue increase of $3,273,851 in Various Grant Funds includes state grants for the specialized mobile command unit from Assembly Bill 102 for $1.5 million and $764,000 for the Orchard Village Road Protected Class IV pedestrian and bicycle project. It also includes a $1 million adjustment for the Community Development Block Grant (CDBG) from the Department of Housing and Urban Development (HUD) for the Valencia Glen Park Play Area Design-Build project.
Recommended revenue increases in Special Districts Funds for $5,060,000 includes $5 million for bridge and thoroughfare fee obligations from the Tesoro Highlands development, and $50,000 in tourism marketing district (TMD) estimated revenues brought by steady occupancy/room rates and the addition of the new Hampton Inn hotel.
The increase in Pension Liability Fund for $396,338 represents an adjustment to the current fiscal year’s annual payment towards unfunded accrued pension liability (UAL).
Recommended revenue increases in the Recreational Facility Fund (The Cube) for $344,046 represents a $202,335 increase in on-ice revenue, and $141,711 in rental income, food concession, filming, room rentals, and miscellaneous revenues.
Recommended revenue adjustments in Other Revenue Funds for $94,614 represents $56,567 final reimbursement for homeless services coordinator and construction of the Family Promise interim housing facility per agreement with Los Angeles County (County), $20,802 to increase Measure A Safe Park revenue based on updated County estimates, and $17,245 to increase public library grants.
Recommended revenue increases for $53,000 in Transit and Transportation Funds represents County contributions for services related to the local service expansion into the unincorporated area of the FivePoint development.
The recommended revenue decreases for $449,403 in the Gas Tax and SB1 Funds account for updated state revenue estimates.
Expenditures
Recommended mid-year expenditure budget additions total $4,877,374. By fund, the expenditure amendments are as follows:
General Fund $ 493,477
Various Grant Funds $ 2,036,166
Other Revenue Funds $ 852,050
Special Districts Fund $ 625,480
Pension Liability Funds $ 396,338
Recreational Facility Fund (The Cube) $ 274,821 Self-Insurance Fund $ 120,165
Transit and Transportation Funds $ 48,556
Gas Tax $ 19,935
Developer Fee Fund $ 10,386
Total Proposed Expenditure Amendments $ 4,877,374
In the General Fund, the recommended expenditure budget amendments for $493,477 includes increases of $500,000 for building plan review and inspections consulting contracts, $396,338 to adjust the annual payment towards unfunded accrued pension liability, $205,000 for the increase in vehicle fuel cost, $144,000 for Hurricane Hilary storm damages, $130,000 for night-time and weekend overtime work mainly attributed to large utility projects with a corresponding encroachment permit revenue offset, $100,224 for business license processing fees with a corresponding revenue offset, $90,000 for vehicle and equipment maintenance costs, $89,701 for credit card processing fees attributed to increased number and value of credit card transactions, $67,491 for increase in service costs for animal care and control, and a decrease of $1.3 million for the specialized mobile command unit now funded by State Assembly Grant 102.
The recommended expenditure increase of $2,036,166 in Various Grant Funds includes appropriation of $1.5 million State Assembly Grant 102 funds for the purchase of a specialized mobile command unit, $764,000 for the Orchard Village Road protected Class IV pedestrian and bicycle project, a reduction of $211,540 drug forfeiture funds for the specialized mobile command unit, and a $23,432 Prop C grant reduction for completed Intelligent Traffic Systems (ITS) Phase VI and ITS Phase VII Design projects.
Expenditure increases of $853,625 in Other Funds includes funding for improvements, furniture, fixtures, and equipment at the Valencia Community Center for $758,000, and $95,625 to establish base budget for the operations of the recently acquired Citrus building.
The recommended expenditure increase of $625,480 in Special Districts Funds includes $243,000 for a tourism advertising campaign, tourism economic impact study, and tradeshow marketing for the Tourism Marketing District. It also includes $243,811 for property taxes owed on City properties that are located outside of the City’s boundaries and within the Open Space Preservation District, $65,000 for Bridgeport trail fence replacement, $14,125 to establish operating budget for the Skyline drainage benefit assessment area (DBAA) operations, and $59,544 transfer adjustments to pension liability fund for UAL payments from the Areawide and DBAA funds.
The recommended expenditure increases in Pension Liability Fund for $396,338 represents adjustment to fiscal year 2023-2024 for the annual required pension UAL payment.
The recommended expenditure increases in Recreational Facility Fund for $274,821 includes $244,821 for The Cube’s operator contract in the areas of payroll, cost of sales, and service maintenance contracts, and $30,000 revenue share as a result of increased operator revenue. This request has a corresponding revenue offset of $344,046.
The recommended expenditure increases for $120,165 in the Self-Insurance Fund represents adjustments to the general liability and property coverage insurance premiums.
The net $48,556 expenditure increase in Transit and Transportation Funds includes a $53,000 increase for local service expansion along the unincorporated areas of the FivePoint development, fully reimbursed by Los Angeles County. It also includes a decrease of $4,444 Prop C local return funding match for the completed ITS Phase VI project.
The recommended expenditure increases in the Gas Tax Fund for $19,935 represents transfer adjustments for the annual required pension UAL payment.
The recommended expenditure increase of $10,386 in the Developer Fees Fund represents a transfer to the General Fund for the City’s five percent share of fire district administrative fees.
Amendment to the FY 2022-2023 Budget
Upon review of the revenues and expenditures for the year ending June 30, 2023, and in anticipation of future facilities funding needs, it is staff’s recommendation to amend the FY 2022-2023 budget and transfer funds from the General Fund to the Facilities Fund in the amount of $15.3 million. In addition, a budget amendment for the Vista Canyon Water Factory maintenance due to the developer for $254,000 and an $515,561 adjustment for the prior year’s actual pension UAL payment is included.
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 2024.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
Approval of the Fiscal Year 2023-2024 mid-year budget amendments will increase estimated revenues for all funds by $10,225,032 and budgeted expenditures by $4,877,374. Additionally, the Fiscal Year 2022-2023 budget will be amended by net of $769,561.
ATTACHMENTS
Resolution Amending the Budgets for FY 2022-23 and FY 2023-24 Resolution Approving Classification Salary Schedules and Benefit Allowance Change