FY 2024-25
Budget Study Session
Presentation to Budget Sub-committee
Karen Chang, Director of Finance
April 9, 2024
AGENDA
1 FY 2024-25 Budget Summary
2 Budget Discussions
3 Reserve & Other Considerations
4 Q&A
22 Revenue Assumptions
1. Property Tax revenue – same level as 2024
‒ Due to uncertainty of VLF shortfall
2. Sales Tax revenue – same level as 2024
- Due to uncertainty of economy
3. TOT, Franchise Tax & Permit Fee
– Modest increase (2-3%)
4. Department input updated
5. No ARPA funds
3 FY 2024-25 Budget Overview 1
Expenditure Assumptions
1. Personnel Costs
‒ Include 3% COLA (~$3M)
‒ Increase in health care costs (Kaiser 17%, Blue Shield 10%) (GF~$1.3M) ‒ Pension cost increase (GF ~$2.1M)
2. Supplies & Services
- Use Base Line budget (FY 2023 + mid-year – one-time expenditures)
3. Interdepartmental Charges
– Stay flat
4. New Request
– Not approve unless it has no negative impact to GF
4 FY 2024-25 Budget Overview 1
FY 2024-25 General Fund –
Revenues ($ Millions) FY 2024-25 Budgeted Revenue –($131.M) Revenue Type FY 2023 Actual
FY 2024
Adjusted
Budget
FY 2024
Actual as of
2-29-24
FY 2025
Based
Budget
% of Total
Projected
Revenue
Property Taxes $ 54.00 $ 49.30 $ 31.90 $ 49.20 38%
Sales Taxes 21.70 22.00 12.80 22.00 17%
Transient Occupancy Tax 16.70 14.00 9.50 14.50 11%
Other Taxes 8.10 6.70 5.40 6.70 5%
Franchise Fees 5.20 4.60 2.30 4.80 4%
License & Permits 20.50 12.50 10.00 13.20 10%
Fines & Forfeitures 0.80 0.70 0.30 0.70 1%
Intergovernmental (Grants) 3.60 6.00 3.80 3.30 3%
Charges for Services 11.70 11.60 7.20 10.10 8%
Use of Money & Property (0.30) 4.50 2.00 4.50 3%
Other Revenues 0.40 0.30 0.30 0.30 0%
Transfers In 5.30 3.70 1.00 1.90 1%
PO/CIP Rollover - 12.40 12.40 - 0%
ARPA - 5.00 - - 0%
Total $ 147.70 $ 153.30 $ 99.10 $ 131.10 100%
FY 2024-25 General Fund –
Expenditures by Category
($Millions) FY 2024-25 Budgeted Expenditure $150.2M)
Expenditures
FY 2023
Actual
FY 2024
Adjusted
Budget
FY 2024
Actual as
of 2-29-24
FY 2024 %
spent
FY 2025 Based
Budget
PAYROLL $ 103.50 $ 106.80 $ 70.50 66.0% $ 116.80
SUPPLIES & SERVICES 27.00 33.20 13.80 41.5% 22.50
CAPITAL OUTAY 0.20 0.90 0.20 20.1% -
INTERDEPARTMENTAL CHARGES 8.10 9.50 6.20 65.0% 9.50
TRANSFERS 1.40 4.90 0.30 6.8% 1.40
TOTAL 140.20 155.30 91.00 58.6% 150.20
Salary and Benefits Trends ($ millions)
7 FY 2024-25 Budget Overview 2
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Total Adjusted
Budget $106.7 $116.9 $120.4 $139.2 $123.8 $138.6 $143.9 $155.3 Salary and Benefits $71.5 $74.7 $79.7 $85.2 $87.4 $95.4 $103.5 $106.8 % of Total Adj
Budget 67.0% 63.9% 66.2% 61.2% 70.6% 68.9% 71.9% 68.8%
FY 2024-25 General Fund –
Expenditures by Dept ($
millions)
FY 2024-25 Budgeted
Expenditure –
excluding transfers
($150.2M)
DEPARTMENT
FY 2023
Actual
FY 2024
Adjusted
Budget
FY 2024
Actual
2-29-24
% spent FY
2024
FY 2025 Based
Budget
City Council $ 0.20 $ 0.30 $ 0.20 63.6% $ 0.30
City Clerk 1.00 1.30 0.60 48.8% 1.10
City Treasurer - 0.10 0.10 62.1% 0.10
City Attorney 1.20 1.10 0.70 64.8% 1.10
City Manager’s Office 3.80 5.20 2.20 41.2% 4.30
Finance Department 3.10 4.50 2.00 45.0% 3.80
Non-Departmental* 9.40 1.90 1.20 61.9% 1.90
Human Resources Dept. 2.20 3.00 1.60 52.8% 2.70
Economic & Community Develop. 11.80 12.50 7.20 57.4% 9.50 Fire Department 35.50 34.30 24.90 72.5% 37.00
Police Department 36.30 37.00 25.00 67.8% 38.90
Public Works Department 7.90 13.80 6.60 48.0% 13.10
Library Department 6.50 8.50 5.00 59.3% 8.30
Parks and Recreation Dept. 20.50 27.40 14.60 53.2% 27.20 CIP 0.70 4.40 0.40 8.9% 0.90
TOTAL 140.10 155.30 92.30 59.4% 150.20
Information Technology $ 3.80 $ 5.00 $ 2.80 56.5% $ 4.40 Note : Most of expenditures and revenues might not be spent or earned evenly throughout the year.
Staff continues to monitor the revenue and expenditures.
City Reserves (As of February 29, 2024) ($ Millions)
Reserve & Other Considerations 3
9 General Reserves (20%) $29.30
Pension Stabilization Reserves 5.60
Infrastructure Reserves 3.60
Total Reserve Levels $38.50
Available Unassigned GF Fund Balance 23.34
Reserves & Surplus Fund Balance $61.84
General Fund Summary- FY 2024-25 ($ millions)
10 Description Amount
PROJECTED REVENUES $131.10
PROJECTED EXPENDITURES <150.20>
Deficit <$ 19.10>
Budget Balancing Strategies ($ Millions)
11 Description Target Amount
FY 24-25 Deficit $< 19.0>
+ Employee payroll cost allocation 3.0
+ Business License Tax Ballot
Measure 3.0
+ Dept. Discretionary Savings 3.0
+ Salary Attrition 3.0
+ Use of Reserve/Other Resources 7.0
RESULT BALANCED
One-Time Resources
• Additional Income -Billboard agreement ($1.4M)
• Loan from Community Benefits Payments to build
firehouse ($9M)
• Review if any discretionary programs from Infrastructure Reserve to re-purpose
• CalPERS Stabilization Reserve
• Will not help with the structurally deficit
• But could provide additional time for City’s major revenues to recover QUESTIONS?
Q&A 4
13