Sonora City Council
March 4, 2024

CITY COUNCIL REGULAR MEETING - MARCH 04, 2024 PAGE 1 OF 2

CITY COUNCIL REGULAR MEETING
Monday, March 04, 2024 at 4:00 PM
94 N. Washington Street, Sonora, CA 95370
(209) 532-4541
AGENDA
NOTICE IS HEREBY GIVEN that the Sonora City Council will have their regular meeting on Tuesday, March 4, 2024, at 5:00 PM in the City of Sonora Council Chambers located at 94 N. Washington Street Sonora, CA 95370.

This meeting is physically open to the Public and citizens who wish to provide public comment during the meeting will be invited to do so by the Mayor.

Written comments can be submitted to be included as part of the administrative record; they will not be read during the meeting. All comments must be received by 3:00 pm on the day of the noticed meeting and can be submitted to the City Clerk at 94 N. Washington Street Sonora, CA 95370, or via email to [email protected].

Public Access Audio and Video Live Streaming
The Public will not have access to give public comments via public access audio and video live streaming; they are available for audio and visual only; and can be accessed via our website at www.sonoraca.com.

Remote viewing of the meeting via live streaming is provided to members of the public as a courtesy. If the livestreaming connection malfunctions for any reason and no Council Members are attending via teleconference, the City Council will continue the public meeting in Chambers without remote access.

CLOSED SESSION - 4:00 PM

CALL TO ORDER

ROLL CALL

PUBLIC COMMENTS

ADJOURN INTO CLOSED SESSION

1. Conference with Real Property Negotiators (Gov. Code, § 54956.8) Property Location: Parking lot, located at the intersection of Church Street and Stewart Street; Agency Negotiator: Melissa Eads, City Administrator; Christopher Gorsky, Administrative Services Director.

RECONVENE INTO OPEN SESSION
OPEN SESSION - 5:00 PM
1 CITY COUNCIL REGULAR MEETING - MARCH 04, 2024 PAGE 2 OF 2

PLEDGE OF ALLEGIANCE

ROLL CALL
CITY CLERK’S REPORT ON AGENDA POSTING

APPROVAL OF THE AGENDA

PUBLIC COMMENT (NON-AGENDA ITEMS)
The public may address the Council on any item of public interest not otherwise on the agenda that is within the jurisdiction of the City. No action may be taken. Matters to be addressed may be referred to City Staff or placed on a subsequent meeting Agenda. Speakers are limited to a three (3) minute presentation.

PRESENTATIONS

2. Receive an update from Tuolumne County District 1 Supervisor David Goldemberg.

CONSENT CALENDAR
Items on the Consent Calendar are considered routine and will be voted on in one motion unless a Council member or member of the public has a question or wishes to discuss an item. In that case, the item will be removed from the Consent Calendar and considered separately.

3. Consider approval of disbursements in the amount of $207,792.84 for payroll, including employee salaries, employer and employee taxes, retirement contributions, miscellaneous voluntary employee deductions, holiday pay, and other adjustments, including retro-pay; Tracy Skelly, Administrative Services Officer.

4. Consider waiving the second reading and adopt Ordinance No. 895 to amend the City's Zoning Map; Tyler Summerset, Community Development Director.

NEW BUSINESS

5. Consider acceptance of the Fiscal Year 23/24 Mid-Year Budget Update with recommended adjustments; Chris Gorsky, Administrative Services Director.

COUNCIL MEMBER REPORTS

ADJOURNMENT
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Administrator at City Hall (209) 532-4541, [email protected]. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting (28 CFR 35.102-35.104 ADA Title II).

Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for public inspection in the City Administrator’s Office at 94 N. Washington Street, Sonora, CA 95370 during normal business hours (8:00 am - 4:00 pm, Monday through Friday, excluding holidays). The agenda and supporting public documents are also available on our City website www.sonoraca.com listed under the agenda/minutes link on the Government page. 2 CITY COUNCIL AGENDA REPORT
MEETING DATE: March 4, 2024
TO: Honorable Mayor and Members of the City Council
FROM: Melissa Eads, City Administrator
SUBJECT: Supervisor David Goldemberg County Update

RECOMMENDATION
Receive an update from Tuolumne County District 1 Supervisor David Goldemberg.

DISCUSSION
District 1 Supervisor Goldemberg will present an update on County-wide issues to the City Council at the first meeting of each month.

FISCAL IMPACT
No fiscal impact to the General Fund.
3 Item 2.

CITY COUNCIL AGENDA REPORT
MEETING DATE: March 4, 2023
TO: Honorable Mayor and Members of the City Council
FROM: Tracy Skelly, Administrative Services Officer
SUBJECT: Disbursements in the amount of $207,792.84 for payroll

RECOMMENDATION
Consider approval of disbursements in the amount of $207,792.84 for payroll, including employee salaries, employer and employee taxes, retirement contributions, miscellaneous voluntary employee deductions, holiday pay, and other adjustments, including retro-pay.

DISCUSSION
This payroll was the second (2nd) payroll of the month, which was an expected amount.

This is the 17
th payroll of 26 for FY23-24, we would have expected to expend 65.38% of the budgeted amount. In total, we have expended 57.74% of the Salaries and Wages for the FY 23-24 budget.

FISCAL IMPACT
Disbursements are part of the approved FY23-24 Budget.
4 Item 3.

CITY COUNCIL AGENDA REPORT
MEETING DATE: March 4, 2024
TO: City Council Members
FROM: Tyler Summersett, Community Development Director
SUBJECT: Ordinance No. 895

RECOMMENDATION
Waive the second reading and adopt Ordinance No. 895.

DISCUSSION
This is the second reading of Ordinance No. 895, an ordinance which amends the Sonora Municipal Code as follows:

Section 17.10.010 of the Sonora Municipal Code, providing for the zoning map of the City of Sonora, is hereby amended through the rezoning of Assessor’s Parcel Number 001-216-011-000, Multi-Family Residential (R-3)/Commercial (C) to Multi-Family Residential (R-3).

FISCAL IMPACT
None
5 Item 4.

ORDINANCE NO. 895

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONORA

AMENDING THE ZONING MAP OF THE CITY OF SONORA
The City Council of the City of Sonora does hereby ordain as follows:

Section One: Section 17.10.010 of the Sonora Municipal Code, providing for the zoning map of the City of Sonora, is hereby amended through the rezoning of Assessor’s Parcel Number 001- 216-011-000, Multi-Family Residential (R-3)/Commercial (C) to Multi-Family Residential (R3).

This Ordinance shall take effect thirty (30) days after its passage and shall be published within (15) days after its final passage as required by law.

Said Ordinance was introduced at a regular meeting of the City Council of the City of Sonora held on February 20, 2024 and passed and adopted as an Ordinance of said City at a regular meeting of said Council held on March 4, 2024 by the following vote:

AYES:

NOES:

ABSENT OR ABSTAIN:
____________________________________
Mark Plummer, Mayor
ATTEST:

Tracy Skelly, City Clerk
Approved as to Form:
__________________________________
Douglas L. White, City Attorney
Publish: The Union Democrat, Sonora
____________________, 2024
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Exhibits:

Exhibit A – Previous Zoning Designation
Exhibit B – Zoning Amendment
7 Item 4.

Exhibit A – Previous Zoning Designation
8 Item 4.

Exhibit B – Zoning Amendment
9 Item 4.

CITY COUNCIL AGENDA REPORT
MEETING DATE: March 4, 2024
TO: City Council Members
FROM: Chris Gorsky, Administrative Services Director
SUBJECT: Accept the Mid-Year Budget Update for FY23/24; Consider approving the staff recommended budget adjustments as presented.

RECOMMENDATION

1. Accept the Fiscal Year 23/24 Mid-Year Budget Update with recommended adjustments.

DISCUSSION
The City Council adopted the FY23/24 Budget on June 5, 2023. Revenue trends are in line or higher than anticipated, Sales and Use Tax revenues are up by 2.7% from our conservative budget estimates, while Measure Y, the 1% sales and use tax passed by voters in November 2022, is up by 10% of our earlier estimates. Transient Occupancy Tax (TOT) and the Public Benefit Fee for Cannabis dispensaries are up by 4% and 11%, respectively, for the General Fund. Each of these revenues have been resilient during the uncertain economic times with elevated inflation and a period of higher interest rates. The adjusted revenues for all four sources are a net projected increase of $430,000 to the General Fund over what was originally budgeted.

When developed, the FY23/24 budget was a status-quo budget with no capital improvements or plans to address the City’s deferred maintenance. This demonstrates how important it was for the City to have passed Measure Y to help address this funding shortfall going forward. Measure Y became effective April 1, 2023 and the current fiscal year is the first full year of this new revenue for the City.

Staff have identified a set of mid-year budget adjustments for Council’s consideration. The proposed budget changes reflect the revised estimates to revenues and expenditures detailed on page 14 of the FY23/24 Mid-year report.

FISCAL IMPACT
The General Fund started the fiscal year, July 1, 2023, with a fund balance available of approximately $5 million and at the mid-year update, December 31, 2023, at approximately $7.1 million. The FY23/24 General Fund budget changes are a net total positive of $200,300 (p.14).

ATTACHMENTS
 Mid-Year Budget Update
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Mid Year Budget Report
FY 2023-2024
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Table of Contents
INTRODUCTION 1
Timeframe and Limitations 1
Executive Summary 2
GENERAL FUND – KEY REVENUE ANALYSIS 3
Measure Y 3
Bradley Burns Sales Tax 4
Property Tax 5
Franchise Fees 6
Business License Tax 7
Transient Occupancy Tax 8
Charges for Services 9
Licenses and Permits 10
Cannabis Dispensary Revenues 11
GENERAL FUND – KEY EXPENDITURE ANALYSIS 12
Salaries and Benefits 12
Operating Expenditures 13
FY23/24 RECOMMENDED FIRST HALF BUDGET ADJUSTMENTS 14
Summary of Recommended Budget Adjustments 14
FINANCIAL SUMMARIES, PROJECTIONS AND RECOMMENDATIONS 15 General Fund 15
Special Revenue Fund: Measure I 16
Measure I: Police Department 17
Measure I: Fire Department 18
Measure I: Public Works 19
DEPARTMENT UPDATES 20
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COMMUNITY DEVELOPMENT 20
Mid-Year Goals and Accomplishments 20
POLICE DEPARTMENT 21
Mid-Year Goals and Accomplishments 21
FIRE DEPARTMENT 22
Mid-Year Goals and Accomplishments 22
PUBLIC WORKS DEPARTMENT 23
Mid-Year Goals and Accomplishments 23
CONCLUSION 24
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Introduction
The City Council adopted the FY23/24 budget at its June 5th, 2023 meeting. The mid-year financial report provides an analysis of the City’s General and Special Revenue Funds revenues and expenditures for the first half of FY23/24, for the six months ending December 31st, 2023.

Recommended adjustments are made to ensure the budget reflects the City’s current revenue outlook and is responsive to changing financial landscape and city priorities.

These budget updates have two purposes. First, to provide regular updates to the City Council regarding revenue and expenditure trends ensuring the City Council has a strong understanding of the current financial condition, this is necessary to proactively respond to unanticipated changes or emerging trends. Second, and equally important, these reports increase the transparency of City finances. The City is ultimately accountable to its residents to use City revenues efficiently and effectively, providing the highest quality services. Ongoing public reporting provides taxpayers with the information they need to hold the City to this standard.

With respect to revenues: The City regularly monitors and adjusts its year-end revenue projections based on actual revenue performance and forecasting models to develop a more accurate picture of the City’s anticipated year-end financial position.

With respect to expenditures: The expenditure information in this report is extracted directly from the City’s financial management system, and adjustments are made to account for certain known payments, reimbursements, or transfers between City departments and funds that have not yet been processed in the system at the time of publication. It represents a snapshot of City expenditures at a certain point in time and does not reflect final FY23/24 adjustments.

Timeframe and Limitations
The information in this report is the most accurate and up-to-date information available at the time of publication. However, this report is not an audited financial statement and the numbers provided herein are preliminary and subject to change as the year progresses. No data on revenues and expenditures is final until the City has completed its annual financial audit, which is released each year for the prior year.
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Executive Summary
The total budget for FY23/24 is $17.9 million. Salaries and Benefits account for 43% of this total and 69% of the General Fund expenditures or Discretionary City Funds. General Fund expenditures for the first half are trending slightly lower than our expected range, with salaries and benefits trending around 44%, as the City has had difficulty filling open positions and retaining employees. Staff expect higher costs in the second half of the year with the new hiring incentives and more competitive salaries in the Police Department, requiring more City resources, but improving recruitment. City staff continue to do a great job controlling operational expenditures with first half expenditures at about 53% of budget.

In total, revenue trends are in line with or higher than expectations, Sales and Use Tax revenues are up by 2.7% from our conservative budget estimates, while Measure Y, the City’s new 1% sales and use tax are higher than budgeted by 10%. Transient Occupancy Tax (TOT) and the Public Benefit Fee for Cannabis dispensaries are up by 4% and 11%, respectively, for the General Fund. Each of these revenues have been resilient during the uncertain economic times with elevated inflation and a period of higher interest rates. The adjusted revenues for all four sources are a net projected increase of $430,000 to the General Fund over what was originally budgeted. See the recommended budget adjustments on page 14.

With the noted budget adjustments and six months of data available, the City is on budget for the second half of the year, with only the revenue adjustments and the expenditure adjustments, as noted. While projections remain strong the City has several obligations that it has not fully accounted for, such as: infrastructure maintenance, facility maintenance, and pension obligations. It is recommended that the City allow all unallocated funding to flow to unreserved fund balances to begin the process of addressing the items above.

FY23/24 Recommended Budget Adjustments
The recommended budget adjustments for the mid-year update appear on page 14.

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GENERAL FUND – KEY REVENUE ANALYSIS
The following discussion provides a status of significant General Fund revenue sources as of the first half of FY23/24, ending December 31, 2023. Staff monitors each revenue source closely and may recommend certain revenue adjustments based on revenue actuals or State and Federal budget actions.

Measure Y
FY23/24 is the first full year of Measure Y revenues for the City. Measure Y has become the largest individual revenue source for the City’s General Fund, accounting for 29% of budgeted General Fund revenues for FY23/24, a projected $4,100,000, after the mid-year adjustment. From Measure Y, the City’s General Fund receives 1%, or 1 penny for every 8.75 cents of sales tax paid per dollar on retail sales and taxable services transacted within Sonora.

Analysis – First half Measure Y sales tax receipts are trending 10% higher than the FY23/24 budget. Staff will continue to monitor sales tax receipts and meet with the City’s sales tax consultant to analyze trends. For the second half of FY23/24 sales tax estimates have increased for Measure Y requiring a budget adjustment in the amount of $300,000, or 8%.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ - $ - $ - $ - $ 2,273,214
Fiscal Year Total Actual Revenues $ - $ - $ - $ 600,163 Fiscal Year Budgeted Revenues $ 3,800,000
% of Total 0.0% 0.0% 0.0% 0.0% 59.8%
MEASURE Y - 1% Sales Tax
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Measure Y Sales Tax Revenues
5 Years
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Bradley Burns Sales Tax
Bradley Burns Local Sales and Use tax is the second largest revenue source for the City’s General Fund, accounting for 25% of budgeted General Fund revenues for FY23/24, a projected $3,355,600.

From the local 1% tax the City’s General Fund receives .87 cents for every 8.75 cents of sales tax paid per dollar on retail sales and taxable services transacted within Sonora, while the County receives 13% or .13 cents.

Analysis – First half sales tax receipts are trending 6% higher than those in the same period last fiscal year and 2% higher than the FY23/24 budget. The uncertain economic times and historically high Consumer Price Index (CPI) along with the associated increases in interest rates are starting to affect the economy. Staff will continue to monitor sales tax receipts and meet with the City’s sales tax consultant to analyze trends. For the second half of FY23/24 sales tax estimates are unchanged.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ 1,389,665 $ 1,338,639 $ 1,752,041 $ 1,662,290 $ 1,769,196 Fiscal Year Total Actual Revenues $ 2,532,000 $ 3,280,856 $ 3,496,261 $ 3,450,446 Fiscal Year Budgeted Revenues $ 3,355,600
% of Total 54.9% 40.8% 50.1% 48.2% 52.7%

SALES TAX
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Sales Tax Revenues
5 Years
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Property Tax
Property tax is the third largest revenue source for the City’s General Fund, accounting for 7% of budgeted General Fund revenues in FY23/24. Property tax is levied by the Tuolumne County Assessor’s Office at 1% of a property’s assessed value, of which the City receives approximately

12.6 cents per dollar paid on property located within the municipal limits of Sonora.

Analysis – Property Tax distributions are largely received in the second and fourth quarters, however the chart below depicts the first half receipts for the past four years as compared to the current fiscal year. Mid-year receipts are trending consistent with prior years. Property tax revenue for FY23/24 was budgeted for 4% growth over the previous year’s actuals projecting increasing property values on real estate transactions.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ 390,512 $ 383,081 $ 386,390 $ 396,616 $ 438,163 Fiscal Year Total Actual Revenues $ 855,411 $ 912,549 $ 913,849 $ 971,890 Fiscal Year Budgeted Revenues $ 980,600
% of Total 45.7% 42.0% 42.3% 40.8% 44.7%

PROPERTY TAX
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Property Tax Revenues
Five Year Comparison
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Franchise Fees
Franchise fees are collected by the City for the privilege of operating a utility service within Sonora, and as a fee in lieu of a business license tax. Franchise fees are currently received from Comcast for cable television, PG&E for electric services, and Waste Management for solid waste collection services. Franchise fees represent 1.1% of budgeted General Fund revenues in FY23/24.

Analysis – Historically, franchise payments are not remitted equally throughout the fiscal year; therefore, second quarter receipts are not necessarily predictive. Total franchise fee revenues to date are 31% of budgeted total receipts, and similar to past years.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ 48,925 $ 40,333 $ 44,303 $ 48,393 $ 48,126 Fiscal Year Total Actual Revenues $ 148,600 $ 145,698 $ 149,478 $ 145,854 Fiscal Year Budgeted Revenues $ 155,000
% of Total 32.9% 27.7% 29.6% 33.2% 31.0%

FRANCHISE FEES
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Franchise Fees Revenues
Five Year Comparison
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Business License Tax
The city requires all businesses located within Sonora, or those that operate within Sonora, to obtain a business license. The amount of business license tax paid by each business is based on the type of business and designated zone the business is in, or operating in, and the number of business employees. These activities account for approximately 1% of annual General Fund operating revenues. Approximately 1,100 annual renewals and associated payments are processed each year and are due in January.

Analysis – Business license tax revenue has rebounded from the pandemic affected levels. Staff will continue to monitor businesses license revenues.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ 55,849 $ 36,235 $ 48,078 $ 49,146 $ 52,594 Fiscal Year Total Actual Revenues $ 121,482 $ 119,581 $ 120,719 $ 130,638 Fiscal Year Budgeted Revenues $ 126,900
% of Total 46.0% 30.3% 39.8% 37.6% 41.4%
Business License Revenues
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Business License Revenues
Five Year Comparison
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Transient Occupancy Tax
The City levies a 12% Transient Occupancy Tax (TOT) on all hotel and motel rooms and other transient rentals within the municipal limits of Sonora. This tax helps to fund City services provided to transitory visitors to Sonora and is shared with Visit Tuolumne County, the official Tuolumne County tourism bureau. Of these funds the Visitors Bureau will receive approximately $150,000 annually.

TOT revenues for FY23/24 are approximately 4.4% of General Fund revenues.

Analysis – Total TOT revenues had been resilient during COVID-19 and as the pandemic resolved a continued rebound has been seen. FY23/24 is the first time TOT revenues have exceeded prepandemic levels and the first half revenues are higher than the prior year, and higher than originally budgeted. For the second half of FY23/24 TOT estimates have increased requiring a budget adjustment in the amount of $25,000, or 4%.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ 238,563 $ 193,495 $ 277,274 $ 294,437 $ 319,314 Fiscal Year Total Actual Revenues $ 446,865 $ 518,126 $ 559,545 $ 598,065 Fiscal Year Budgeted Revenues $ 600,000
% of Total 53.4% 37.3% 49.6% 49.2% 53.2%
Transient Occupancy Tax
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Transient Occupancy Tax Revenues
Five Year Comparison
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Charges for Services
City Service revenue consists primarily of Zoning and Subdivision fees, police and fire department services, street cleaning, debris removal and banner installation fees. Many of these fees and charges are assessed based on outdated recovery formulas, which should reflect approximate costs of providing these regulatory services. A fee update is needed to realign these user fees to the costs of providing the services. Charges for Services were budgeted to be less than 1% of General Fund revenues for FY23/24.

Analysis – First half receipts are trending similar to last year and within range of expectations. No budget changes are needed at this time.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ 37,356 $ 34,342 $ 39,381 $ 50,969 $ 44,296 Fiscal Year Total Actual Revenues $ 79,427 $ 66,631 $ 87,195 $ 105,166 Fiscal Year Budgeted Revenues $ 105,450
% of Total 47.0% 51.5% 45.2% 48.5% 42.0%
Charges for Services
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Charges for Services Revenues
Five Year Comparison
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Licenses and Permits
Licenses and permits consist mainly of Building permits and encroachment permits which are collected by the City to offset administrative costs associated with overseeing the proper permitting aspects of development and City activities. These revenues were budgeted to be approximately

1.2% of General Fund revenues.

Analysis – First half licenses and permit revenue are lower than the previous year as changes to the solar industry in California increased building permit activity in FY22/23. The changes made by the California Public Utilities Commission on solar electricity decreased new installation activity and have made an impact to permit revenues in FY23/24. Staff recommends a decrease in budgeted revenues by $30,000 to reflect the lower first half result.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ 49,743 $ 55,263 $ 58,744 $ 101,101 $ 64,190 Fiscal Year Total Actual Revenues $ 98,242 $ 123,343 $ 133,963 $ 120,850 Fiscal Year Budgeted Revenues $ 160,300
% of Total 50.6% 44.8% 43.9% 83.7% 40.0%
License and Permits
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year License and Permits Revenues
Five Year Comparison
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Cannabis Dispensary Revenues
This program was created after voters approved Proposition 64, entitled the ‘Control, Regulate and Tax Adult Use Marijuana Act’ (AUMA), legalizing the adult use and possession of cannabis by persons 21 years of age and older. On January 16, 2018, the Sonora City Council adopted Ordinance No. 18-848 to regulate the operation of commercial cannabis business’ within the City of Sonora.

Currently the city has two operating dispensaries, with the current ordinance allowing up to three dispensaries. This revenue source was budgeted to be approximately 4.5% of General Fund revenues and is now the fourth largest revenue source for the City, with only Measure Y, Bradley Burns Local Sales Tax and Property Tax contributing more.

Analysis – First half revenues have exceeded expectations. Revenues for the first half of FY23/24 are 11% above the original budget. The city also receives sales tax on recreational cannabis sales.

There is a staff recommended budget increase of $105,000 to reflect higher public benefit revenues than anticipated for the six months ending December 31, 2023.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Revenues $ 53,079 $ 79,438 $ 241,064 $ 294,437 $ 371,583 Fiscal Year Total Actual Revenues $ 137,687 $ 216,719 $ 499,977 $ 585,000 Fiscal Year Budgeted Revenues $ 605,000
% of Total 38.6% 36.7% 48.2% 50.3% 61.4%
Cannabis Revenues
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Cannabis Revenues
Five Year Comparison
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GENERAL FUND – KEY EXPENDITURE ANALYSIS
The following discussion provides a status of significant General Fund expenditures for the first half of FY23/24, for the date ending December 31, 2023. Staff monitors each expenditure source closely and may recommend certain expenditure adjustments based on actual expenditures or state budget actions.

Salaries and Benefits
Salaries and Benefits are 69% of the General Fund budget. Salaries and Benefits include fulltime employee salaries, elected official and volunteer stipends, temporary/relief employees, overtime, all tax related expenses and benefits, including health and CalPERS retirement.

Under typical circumstances, it would be expected that Salaries and Benefits would be just under 50% of total budget at the end of the second quarter as costs slowly increase over the course of a fiscal year.

Analysis – First half results for salaries and benefits are trending lower with those in similar periods in prior years, at approximately 44% of budgeted totals. Further analysis of these expenditure details indicates that benefits are trending at approximately 43% of budgeted totals in line with total personnel costs. The Council approved increased pay rates, recruitment bonuses and retention pay for its Police Department. These have been budgeted, but will lead to higher expenditures in the second half of the year.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Expenditures $ 2,805,573 $ 2,953,587 $ 3,223,593 $ 3,359,836 $ 3,314,105 Fiscal Year Total Actual Expenditures $ 6,120,010 $ 5,956,343 $ 6,635,823 $ 6,704,725 Fiscal Year Budgeted Expenditures $ 7,526,600
% of Total 45.8% 49.6% 48.6% 50.1% 44.0%
Salaries and Benefits
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Salaries and Benefits Expenditures
Five Year Comparison
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Operating Expenditures
Operating expenditure’s consist of all General Fund costs to provide services, including supplies, materials, utilities, contracted services and are budgeted at $2.7 million for the fiscal year. The categories of supplies, materials and non-capital equipment, the most controllable expenditure category, is 53% expended as many annual contracts renewed in the first half of the year. The balance of the operating expenditure is on budget at 50% expended.

Analysis – First half results are trending similar to the same period in prior years, at approximately 53% of budgeted totals. Utilities are trending within range at 51%. There are a few miscellaneous adjustments needed for the balance of the year, as detailed on page 14.

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
First Half Actual Expenditures $ 620,191 $ 772,072 $ 1,156,839 $ 1,155,468 $ 1,706,904 Fiscal Year Total Actual Expenditures $ 1,363,273 $ 1,695,688 $ 2,455,448 $ 2,455,448 Fiscal Year Budgeted Expenditures $ 3,227,425
% of Total 45.5% 45.5% 47.1% 47.1% 52.9%
Operating Expenditures
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
Mid Year Operating Expenditures
Five Year Comparison
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FY23/24 RECOMMENDED FIRST HALF BUDGET ADJUSTMENTS
Summary of Recommended Budget Adjustments
 Revenues:
 FY23/24 is the first full year the City is collecting the 1% Measure Y Sales Tax (+$300,000).  Increase in TOT revenues. First year revenues will exceed pre-covid revenues (+$25,000).  Increase in Public Benefit Fees for Cannabis, two dispensaries are operating for the full year (+$105,000).
 Building permit revenues are lower than anticipated. The changes made by the California Public Utilities Commission on solar electricity decreased demand for new installations (-$30,000).  Interest yields up 400% since start of Fiscal Year as interest rates increased and the change in banks have increased the yield on City funds (+152,000).
 Expenditures:
 A general increase in travel and training as more opportunities for training ($8,500).  A need for an additional unemployment allocation associated with the closure of our fleet department ($22,000).
 An increase in Outside Services Account to start the transition to online services ($35,000 one-time setup + $32,200 annual cost):
o Includes a Pavement Assessment
o Community Development Package
o Public Works Package
 Additional Contracted coverage for Community Development ($75,000).  An increase for the Round-Up Parade Encroachment Permit ($1,800).  Additional Funding for Emergency Tree Removals ($5,200).  An increase in Building Maintenance:
o Switch Replacement for the Generator at the Police Station ($6,500). o Unexpected repairs on City dump truck ($8,500).
o Unexpected HVAC repairs at the Education Center ($5,000).  An increase to Facility Enhancement for Cemetery Headstone repairs ($2,000).  Continued investment in the CalPERS pension prefunding trust ($150,000).

FUND - DEPARTMENT - ACCOUNT DESCRIPTION BUDGET CHANGE
Revenues:
001 - 4000 - 40215 - Sales Tax Measure Y $ 300,000
001 - 4000 - 40220 - Transient Occupancy Tax $ 25,000
001 - 4000 - 41040 - Public Benefit Fee Cannabis $ 105,000 001 - 2000 - 41250 - Building Permits $ (30,000)
001 - 4900 - 47010 - Interest $ 152,000
TOTAL NET CHANGE TO REVENUES $ 552,000
Expenditures:
001 - 1100 - 50510 - Travel and Training $ 1,500
001 - 3000 - 50510 - Travel and Training $ 2,500
001 - 7000 - 50510 - Travel and Training $ 4,500
001 - 4600 - 50360 - Unemployment Insurance $ 22,000
001 - 2000 - 53010 - Outside Services $ 67,200
001 - 2000 - 53010 - Outside Services $ 75,000
001 - 4900 - 53010 - Outside Svs - Encroachment Permit Round Up $ 1,800 001 - 7000 - 53010 - Outside Services $ 5,200
001 - 5000 - 55010 - Buidling Equipment Maint and Repair $ 6,500 001 - 7100 - 55010 - Buidling Equipment Maint and Repair $ 5,000 001 - 7000 - 55030 - Equipment Maintenance $ 8,500
001 - 7600 - 55060 - Facility Enhancement $ 2,000
001 - 4900 - 59999 - Transfer Out CEPPT $ 150,000
TOTAL NET CHANGE TO EXPENDITURES $ 351,700
NET CHANGE TO FY23/24 General Fund Budget $ 200,300
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FINANCIAL SUMMARIES, PROJECTIONS AND

RECOMMENDATIONS
General Fund
The following table is the Schedule of General Fund Operating Revenues. Vs. Operating Expenditures for the first half of FY23/24, which includes comparison information from the prior year’s first half.

FY22/23
Actual
FY22/23
Mid-Year
FY22/23
% YTD
FY23/24
Adopted
Budget
FY23/24
Mid-Year
FY23/24
% YTD
Revenues
Measure Y 600,163 - 0.0% 3,800,000 2,273,214 59.8%
Sales and Use Tax 1% Local 3,450,446 1,662,290 48.2% 3,355,600 1,769,196 52.7% Property Tax 971,890 396,616 40.8% 980,600 438,163 44.7% VLF Backfill Property Tax 473,292 236,646 50.0% 478,000 246,714 51.6% Franchise Fees 145,854 48,393 33.2% 155,000 48,126 31.0% Business Licenses 130,638 49,146 37.6% 126,900 52,594 41.4% Transient Occupancy Tax 598,065 294,437 49.2% 600,000 319,314 53.2% Licenses and Permits 120,850 101,101 83.7% 160,300 64,190 40.0% Cannabis Public Benefit Fees 585,000 294,437 50.3% 605,000 371,583 61.4% Intergovernmental 162,940 112,063 68.8% 16,000 7,506 0.0% American Rescue Plan (SLEFRP) 581,786 581,786 100.0% - - 0.0% Charges for Services 105,166 50,969 48.5% 105,450 44,296 42.0% Fines and Forfeitures 52,489 26,577 50.6% 54,500 27,700 50.8% Rental Income 67,959 34,825 51.2% 68,500 32,880 48.0%
Interest 65,949 38,913 59.0% 50,000 88,486 177.0%
Other Sources 350,920 117,948 33.6% 99,200 43,841 44.2% Total Revenues 8,463,407 4,046,147 47.8% 10,655,050 5,827,803 54.7% Transfers In
Tranfers In 2,488,450 1,189,300 47.8% 2,914,400 1,379,500 47.3% Total Transfers 2,488,450 1,189,300 47.8% 2,914,400 1,379,500 47.3% Total Revenues 10,951,857 5,235,447 47.8% 13,569,450 7,207,303 53.1% Expenditures
Salaries and Benefits 6,704,725 3,359,836 50.1% 7,526,600 3,314,105 44.0% Supplies and Materials 2,142,482 1,007,016 47.0% 2,886,625 1,532,470 53.1% Utilities 312,966 148,452 47.4% 340,800 174,434 51.2%
Total Expenditures 9,160,173 4,515,304 49.3% 10,754,025 5,021,009 46.7% Transfers Out
Transfers Out 449,987 282,362 62.7% 185,000 163,944 88.6% Total Transfers 449,987 282,362 62.7% 185,000 163,944 88.6% Total Expenditures 9,610,160 4,797,666 49.9% 10,939,025 5,184,953 47.4% 28 Item 5.
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The groups of financial summaries on the following pages present data by governmental fund type: For purposes of this first half report, we have focused on the Measure I Special Revenue Fund. The fund information starts with a beginning fund balance, adds current year revenues, and subtracts current year expenditures, resulting in an ending fund balance. Adopted budget amounts are provided as a basis for comparison of actuals to date.

Special Revenue Fund: Measure I
Special Revenue Funds account for the proceeds derived from specific revenue sources that are legally restricted or assigned to special purposes. The City’s Special Revenue Funds include the Measure I fund which is the focus of the information provided in this first half report. The Measure I fund was established as a result of a 2004 voter approved ½% increase to sales tax within the City limits. With approval of the ballot measure, the sales tax increase took effect January 1, 2005. The purpose of the initiative was to improve city services for residents, businesses, and visitors to the City of Sonora. Measure I revenues for the first half are trending at approximately 50% of total budgeted revenues and across the three Departments expenditures are programmed to be at 50% of budget. Nearly all Measure I funds collected are now fully expended on ongoing fixed costs.

Police % Fire % Public Works %
Beginning Fund Balance @ July 1, 2023 1,130,862 393,195 574,649 Budgeted Revenues 1,402,980 584,325 356,000
Actual Revenues - First Half 695,257 49.6% 288,385 49.4% 179,126 50.3% Budgeted Expenditures 1,500,000 600,000 515,400
Actual Expenditures - First Half 750,000 50.0% 300,000 50.0% 180,000 34.9% Ending Fund Balance @ December 31, 2023 1,076,119 381,580 573,775 Measure I
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Measure I: Police Department
The Police Department receives 60% of Measure I revenue for the support of the Sonora Police Department for personnel, updating safety equipment and supplies, providing educational funding, replacing expired vehicles, and expanding facilities. FY23/24 first half results are trending consistent with the same period in prior years as illustrated in the chart below.

FY19/20 FY20/21 FY21/22 FY22/23 FY23/24
First Half Actual Revenues 497,037 487,825 681,859 704,141 695,257 Fiscal Year Total Actual Revenues 1,164,639 1,295,455 1,411,325 1,410,102 Fiscal Year Total Budgeted Revenues 1,402,980
First Half - Percent of Total 42.7% 37.7% 48.3% 49.9% 49.6% First Half Actual Expenditures 515,516 550,000 650,000 650,000 750,000 Fiscal Year Total Actual Expenditures 1,041,437 1,100,000 1,300,000 1,300,000 Fiscal Year Total Budgeted Expenditures 1,500,000
First Half - Percent of Total 49.5% 50.0% 50.0% 50.0% 50.0% Police Measure I
Revenues
Expenditures
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Measure I: Fire Department
The Fire Department receives 25% of the Measure I revenue for the support of the Sonora Fire Department for personnel, updating equipment and supplies, and providing educational funding.

FY23/24 first half revenues are trending consistent with the same period in prior years as illustrated in the chart below. There are no budget recommendations at this time.

FY19/20 FY20/21 FY21/22 FY22/23 FY23/24
First Half Actual Revenues 199,604 202,561 284,007 292,890 288,385 Fiscal Year Total Actual Revenues 469,959 538,841 587,825 586,244 Fiscal Year Total Budgeted Revenues 584,325
First Half - Percent of Total 42.5% 37.6% 48.3% 50.0% 49.4% First Half Actual Expenditures 270,547 175,000 250,000 275,000 300,000 Fiscal Year Total Actual Expenditures 512,469 350,000 500,000 550,000 Fiscal Year Total Budgeted Expenditures 600,000
First Half - Percent of Total 52.8% 50.0% 50.0% 50.0% 50.0% Fire Measure I
Expenditures
Revenues
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Measure I: Public Works
The Public Works Department receives 15% of the Measure I generated revenue for the purpose of personnel, equipment and facility enhancements and infrastructure improvements.

FY23/24 first half revenues are trending consistent with the same period in prior years as illustrated in the chart below. The City Council approved the purchase of a replacement street sweeper in FY23/24 and the City expects delivery in the third quarter.

FY19/20 FY20/21 FY21/22 FY22/23 FY23/24
First Half Actual Revenues 124,390 123,105 170,742 178,081 179,126 Fiscal Year Total Actual Revenues 290,275 325,516 353,654 358,320 Fiscal Year Total Budgeted Revenues 356,000
First Half - Percent of Total 42.9% 37.8% 48.3% 49.7% 50.3% First Half Actual Expenditures 130,299 162,500 157,500 162,500 180,000 Fiscal Year Total Actual Expenditures 239,023 325,000 315,000 325,000 Fiscal Year Total Budgeted Expenditures 515,400
First Half - Percent of Total 54.5% 50.0% 50.0% 50.0% 34.9% Public Works Measure I
Expenditures
Revenues
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DEPARTMENT UPDATES

COMMUNITY DEVELOPMENT
Mid-Year Goals and Accomplishments
 Woods Creek Park Per Capita Grant Project
o Community Development Director will begin in March.
 The Stockton-Washington Transit Project
o Project completed in first half of fiscal year.
 State Department of Housing and Community Development (HCD) o Purchased 2 fire apparatus’ and associated equipment.  Sign Ordinance
o Ordinance was adopted.
 General Plan Update
o Staff is currently reviewing for mandated state updates related to the Housing Element and is working on various amendments to the Zoning Ordinance.  Community Development Director Transition.
o Long time Director, Rachelle Kellogg, retired in December of 2023 and Tyler Summersett was hired as the new director.

Community Development Department
Revenues
Current Year
Actual Total Budget
% Budget
Remaining
License and Permits $60,157 $150,000 40.1%
Miscellaneous $1,177 $2,150 54.7%
Total Revenues $61,334 $152,150 40.3%
Expenditures
Salaries and Benefits $149,782 $356,400 42.0%
Supplies and Materials $221,031 $315,200 70.1%
Utilities $4,843 $9,900 48.9%
Total Expenditures $375,656 $681,500 55.1%
Net Gain (Cost) to General Fund ($314,322) ($529,350)
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POLICE DEPARTMENT
Mid-Year Goals and Accomplishments
 Continue to Collaborate with City Administration to Enhance Recruitment and Retention o The City Administration and the Police Department have implemented significant measures to be more competitive. This includes best-in-region wages and hiring bonuses. A contract for recruiting and marketing to help define branding and target ideal applicant pools.
 Complete Public Safety Surveillance System
o One of the two live cameras has been placed and system monitors installed. IT has completed training for a full rollout once the second/final live camera is installed.  Fill Vacant Dispatcher Positions
o Two applicants are in the pre-employment screening phase for the respective full time Dispatcher vacancies and one candidate for the part-time vacancy.  Building Improvements and Security
o We are contracting with Vanir Project and Construction Management Firm to identify facility needs and long-term solutions.
 Technology Improvements
o The Mobile Data Computer (MDC) upgrade is nearly complete. Getac Mobile Audio Video (MAV) units are being installed with new vehicle builds. This provides officers and evidence staff with higher quality car video, more manageable platforms, and cloudbased storage. Auto-Tagging has been added to body-worn cameras and new MAV units. Both projects reduce staff time spent on categorizing, downloading, and filing video data.
 Improve Radio Communications
o We have completed our radio repeater upgrade by adding a secondary repeater for our primary channel, extending communication to previously challenging locations around the east portion of our operational area.
 Homeless Outreach Support Team
o The Homeless Outreach Coordinator position has been filled and the Homeless Outreach Support Team has been formalized through MOU with various local service providers.

Police Department
Revenues
Current Year
Actual Total Budget
% Budget
Remaining
Prop. 172 Public Safety $16,082 $34,500 46.6%
Fees and Fines $13,190 $21,200 62.2%
Department Services $13,454 $34,000 39.6%
Grant Revenues $0 $145,000 0.0%
Miscellaneous $7,506 $16,000 46.9%
Transfer In $838,500 $1,677,000 50.0%
Total Revenues $888,732 $1,927,700 46.1%
Expenditures
Salaries and Benefits $1,696,569 $3,950,450 42.9%
Supplies and Materials $283,141 $612,100 46.3%
Utilities $47,199 $90,600 52.1%
Total Expenditures $2,026,909 $4,653,150 43.6%
Net Gain (Cost) to General Fund ($1,138,177) ($2,725,450) 34 Item 5.
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FIRE DEPARTMENT
Mid-Year Goals and Accomplishments
 Collaborate with local agencies to support growth and increase efficiencies in fire services. - Discussions with County Fire Chiefs.  Tuolumne County Fire Advisory Committee member. - Advised on committee.  Collaborate with PD on Homeless task force project. - Participating member  Recruit and hire third engineer position. - Hired Full Time Engineer.  Procure CDBG funding. – Ordered and placed in service Type 6 engine, new SCBA’s and exhaust removal system (in process).
 Dialog with Chicken Ranch Rancheria. – Cooperative fire protection agreement.  Host 163rd Annual Firefighter Ball. – Completed on November 4th, 2023.

Fire Department
Revenues
Current Year
Actual Total Budget
% Budget
Remaining
Department Services $16,573 $31,000 53.5%
Miscellaneous $55 $1,200 4.6%
Transfer In $300,000 $600,000 50.0%
Total Revenues $316,628 $632,200 50.1%
Expenditures
Salaries and Benefits $768,710 $1,519,700 50.6%
Supplies and Materials $126,261 $178,600 70.7%
Utilities $18,999 $39,500 48.1%
Total Expenditures $913,970 $1,737,800 52.6%
Net Gain (Cost) to General Fund ($597,342) ($1,105,600) 35 Item 5.
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PUBLIC WORKS DEPARTMENT
Mid-Year Goals and Accomplishments
 Roadside vegetation removal
o Completed a major roadside vegetation removal project on Lyons Street.  Continuing with Citywide sign replacement project.
o Staff continued with replacing street signs in various locations. Additional locations will be completed as the year progresses.
 Continue with curb/sidewalk trip hazards.
o Continued ADA trip hazard evaluation and repairs are ongoing.  Fleet Replacement
o A replacement street sweeper has been ordered with an anticipated delivery date in the fourth quarter of the fiscal year.
 Street Repairs:
o Pave patched numerous sections of Streets and Roadsides.  Pressure Wash Sidewalks.
o Completed the first round of pressure washing sidewalks, and trash cans downtown.

Public Works Development Department
Revenues
Current Year
Actual Total Budget
% Budget
Remaining
Department Services $7,238 $13,000 55.7%
Transfer In $235,000 $625,400 37.6%
Total Revenues $242,238 $638,400 37.9%
Expenditures
Salaries and Benefits $364,837 $741,400 49.2%
Supplies and Materials $150,911 $531,150 28.4%
Utilities $72,284 $130,000 55.6%
Total Expenditures $588,032 $1,402,550 41.9%
Net Gain (Cost) to General Fund ($345,794) ($764,150)
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CONCLUSION
The financial results for the first half of Fiscal Year 23/24 are based on the most current financial information and economic assumptions available. As this report shows, revenues have been better than anticipated, as the original budget was developed as the spike in the consumer price index (CPI) was just beginning to affect the economy.

This is the first full year the City has received Measure Y revenues, the local 1% sales tax the voters passed in 2022. It provides the City with approximately $4.1 million in new revenues.

This budget was a status-quo budget with no capital improvements, or resources allocated to address deferred maintenance.

The City Council allocated additional resources to help the recruitment efforts of the Sonora Police Department. Without Measure Y this would not have been possible, and it demonstrates the importance of Measure Y.

The bulk of the Measure Y revenues have not been allocated in the first half of the year as the City prepares to deploy these new resources going forward.

On page 14 are the budget adjustments that are recommended by city staff to complete the fiscal year and to continue to navigate the economic uncertainty ahead.

As the fiscal year progresses, staff will continue to closely monitor revenue and expenditure activity and work to identify opportunities for enhancing revenues to support current and future operating capital needs. This information will be used to develop the upcoming Fiscal Year 2024/25 budget.
37 Item 5.