TO:Andrew P. Powers, City Manager
FROM:Jaime Boscarino, Finance Director
DATE:May 9, 2023
SUBJECT: Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session
RECOMMENDATION:
1. Receive information on the Proposed FY 2023-24 and FY 2024-25 Operating Budget.
2. Schedule a public hearing for City Council review and adoption of the FY 2023- 24 and FY 2024-25 Operating and Capital Improvement Program Budget on June 6, 2023.
3. Find that this action is not a project as defined under the California Environmental Quality Act (CEQA).
FINANCIAL IMPACT:
Financial Impact to be Determined. Financial impact of the Proposed FY 2023- 24 and FY 2024-25 Operating Budget is $196,345,240 and $201,219,554, for a Total Proposed Budget of $266,124,530 and $268,085,329, respectively. This is a study session only. City Council will be requested to adopt the FY 2023-24 and FY 2024-25 Operating Budget at its June 6, 2023, public hearing.
BACKGROUND:
The purpose of this study session is to provide City Council with an overview of the Proposed FY 2023-24 and FY 2024-25 Operating Budget (Proposed Budget) for all funds. The Proposed Budget is provided under separate cover and available for review at www.toaks.org/operating-budget or by emailing the Finance Department at [email protected].
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Operating Budget Process
The operating budget preparation process began in December 2022. Staff has been diligently working since then on balancing appropriation requests with revenue estimates. The Proposed General Fund Budget is structurally balanced for both fiscal years and represents a fiscally sound plan that fully complies with City Council’s formal Financial and Budget Policies while making strategic investments in the community and thoughtfully addressing staffing levels citywide.
The City prepares a biennial operating budget, which provides the financial framework of City operations for two fiscal years. The budget preparation also includes the review, update, and presentation of the City’s Capital Improvement Program (CIP) Budget and User Fees. The Proposed CIP Budget study session was held at the April 4 th, 2023, City Council meeting and the User Fees were adopted by City Council on April 25 th, 2023. All departments are involved in the development of the Operating Budget.
City Council Finance/Audit Committee
The City Council Finance/Audit Committee (Committee) was established in 2008 to comply with Statement on Auditing Standards (SAS) 114 and promote additional financial transparency. The Committee provides a forum for open communication between the City’s external auditors and City Council. Staff meets periodically with the Committee to provide updates and receive input on the City’s budget and finances. Staff met with the Committee on May 8, 2023, and provided an update and overview of the Proposed Budget.
City Council Goals and Top Priorities
On May 23, 2023, City Council will discuss and determine their Citywide Goals and Priorities for FY 2023-24, with final approval on schedule for the June 6, 2023 City Council meeting. The Proposed Budget was developed with a focus on strategic investment towards the City Council’s current Goals and Priorities, many of which span multiple years. If new Priorities are established for FY 2023-24, staff will evaluate if the Proposed Budget should be adjusted accordingly for the Public Hearing.
Budget Theme – “Rooted in Community”
The City continues to be a leader in fiscal sustainability efforts and forward-thinking strategic planning. Key focus areas of the Proposed Budget include investments in homelessness and affordable housing, supporting the comprehensive General Plan update, commitment to environmental sustainability, continued investments in technology, and a strategic approach towards workplace transformation.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Homelessness and Affordable Housing
The Proposed Budget includes $900,000 in annual operational funding for a Navigation Center at 1205 Lawrence Drive to provide interim supportive housing for individuals experiencing homelessness. The onsite support will assist individuals to become housing ready and transition to a permanent housing environment. The City has selected an operator to provide full-time on-site services and management and it is anticipated the Navigation Center will open within the next year. The County of Ventura (County) has agreed to fund 50 percent of the operating costs on an ongoing annual basis. The City and County have jointly applied for a State Encampment Resolution Grant that would potentially fund operational costs for two years. In addition, Ventura County Behavioral Health has applied for funding to help offset operating costs.
Comprehensive General Plan Update
The City is currently in the process of a comprehensive, multi-year General Plan update with an estimated adoption at the end of the calendar year. The adoption of the General Plan will require updates to the City’s Municipal Code and Specific Plans. Funding is included in the proposed Community Development Department (CDD) operating budget each year in order to implement the required updates.
More information on the City’s General Plan process can be found at https://www.toaks2045.org/.
Environmental Sustainability
The City is currently in the process of developing a Climate and Environmental Action Plan (CEAP) in parallel with the City’s General Plan Update. The CEAP details the strategies and actions the City will pursue to protect the environment and address the challenges of climate change. Planned actions will be aimed at improving public health, sustaining a healthy environment, reducing air pollution, protecting our energy supply, mitigating climate change and its impacts, reducing the threat of catastrophic wildfires and extreme weather, and supporting a healthy economy. The Proposed Budget includes funding for implementation of the CEAP. More information on the City’s CEAP can be found at https://www.toaks.org/departments/public-works/sustainability/climate-action- planning.
Technology Investment and Innovation
Technology innovations continue to provide new opportunities to improve City operations, customer service, and the overall public experience. It is also critical the City’s technology infrastructure be protected against cybersecurity attacks. The Proposed Budget includes citywide investment in technology to provide quality services to the public more effectively and efficiently, most notably a new Utility Billing System. Staff is currently in the process of a comprehensive refresh to the City’s public website that will be more inclusive of all persons and compliant with Americans with Disabilities Act (ADA).
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Workplace Transformation
Part of the Workplace Transformation initiative is to emphasize the organizational focus on collaboration, communication, process improvements, and efficiencies.
Training resources have been included in the Proposed Budget to broaden employees’ knowledge and skills to provide more effective services to the public and preparation for future advancement.
Staffing is a key component to the success of City operations and service to the public. Departments work together to creatively utilize existing staffing resources to meet the changing needs of the City. Although this strategy has allowed the City to maintain citywide staffing levels at 381 positions since FY 2013-14, the Proposed Budget includes the strategic addition of 16 positions as discussed in further detail below.
Staffing Overview
In FY 2007-08, prior to the Great Recession, the City’s position count was 482.
From FY 2008-09 through FY 2013-14, 101 positions were eliminated due to the Great Recession and the City’s transition from a growth community to a built-out and maintenance community. Since then, for 10 consecutive years, the City has maintained the same position count at 381 (Figure 1). After careful evaluation and discussion, the Proposed Budget includes nine new positions in FY 2023-24 and seven new positions in FY 2024-25, bringing the total City position count to 397.
Management took a measured approach when planning for proposed positions, spreading the implementation over two fiscal years. This allows the City to be agile, provides the time necessary to initiate strategic recruitments, and provides flexibility in case of possible future economic downturn impacts. Based on the City’s long-term financial strategic plan, the Proposed Budget provides a fiscally sustainable level of organizational staffing while investing in needed resources for effective and efficient service. The proposed additions returns the City to FY 2012- 13 staffing levels.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Figure 1
The position additions included in the Proposed Budget span over multiple departments and program areas with a focus on supporting City Council’s goals and priorities. Funding sources vary by position and are summarized below.
Public Works Department
The Public Works Department (PWD) is the City’s largest department, responsible for implementing the largest share of the City’s budget. PWD has developed a strategic plan to effectively implement City Council Goals and Priorities, prepare for an increase in future operational needs, and provide quality service to the public. Management has prioritized position requests based on current operational needs. Areas evaluated included current overtime costs incurred by staff, reliance on outside consultants to assist with projects, the number of capital improvement projects planned, level of deferred infrastructure maintenance, and additional responsibilities due to legal mandates. Based on this comprehensive evaluation, the proposed position additions for PWD are listed below.
482 470 457 447
407 397 381 381 381 381 381 381 381 381 381 381 390 397 0 50
100
150
200
250
300
350
400
450
500
FY 2007-08FY 2008-09FY 2009-10FY 2010-11FY 2011-12FY 2012-13FY 2013-14FY 2014-15FY 2015-16FY 2016-17FY 2017-18FY 2018-19FY 2019-20FY 2020-21FY 2021-22FY 2022-23FY 2023-24FY 2024-25 History of Funded Positions
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 FY 2023-24
Position Title Funding Source
1. Wastewater Treatment Plant Operator II 100% Wastewater Fund
2. Engineering Assistant 50% General Fund
25% Wastewater Fund
25% Water Fund
3. Public Works Construction Inspector II 30% General Fund 35% Wastewater Fund
35% Water Fund
FY 2024-25
Position Title Funding Source
4. Water Systems Operator 100% Water Fund
5. Sr Instrumentation & Elec Tech 100% Water Fund
6. Utilities SCADA Analyst II 50% Wastewater Fund
50% Water Fund
7. Street Maintenance Worker II 100% General Fund
Community Development Department
The Community Development Department (CDD) directly serves the public on a daily basis. CDD has experienced an increase in activity levels over the past two years, as evidenced by various CDD updates provided at several City Council meetings. Not only have activity levels greatly increased, but the State has implemented a significant amount of legislation that increases burdens on staff by mandating short turnarounds for items such as solar permits and Accessory Dwelling Unit (ADU) applications. CDD has managed by utilizing consultants to process applications, but after careful evaluation, management proposed strategic position additions. The positions outlined in the table below will enable CDD to focus on enhancing the customer experience by more quickly and efficiently processing applications and also enable the City to rely less on outside consultants.
FY 2023-24
Position Title Funding Source
1. Plan Check Assistant 100% General Fund
2. Community Development Tech II 100% General Fund
3. Community Development Tech II 100% General Fund
FY 2024-25
Position Title Funding Source
4. Combination Building Inspector 100% General Fund
Human Resources Department
The Human Resources Department’s (HRD) workload has significantly increased over the past few years due to a variety of reasons, including a greater emphasis citywide on workforce development and training, including Diversity, Equity, and Inclusion (DEI) training, a greater number of recruitments, and added California Occupational Safety and Health Administration (Cal/OSHA) compliance. HRD has also been without a general administrative position since it was eliminated during Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
6 5
5 the Great Recession. The proposed position additions in HRD are presented below. The Office Supervisor position will be shared with both the Cultural Affairs Department and City Clerk Department as each of those departments lack a general administrative position.
FY 2023-24
Position Title Funding Source
1. Assistant HR Analyst 100% General Fund
2. Office Supervisor 100% General Fund
FY 2024-25
Position Title Funding Source
3. Assistant HR Analyst 100% General Fund
Finance Department
The Finance Department provides a wide variety of services both internally and externally. Management evaluated the overall operations in considering potential position additions. In an effort to consolidate services and provide more efficient maintenance of City buildings, the Facilities Division has taken on the responsibility of maintenance and improvement of all City facilities. In addition, several new capital projects focused on sustainability have been included in the Proposed CIP Budget. The addition of a position that oversees construction projects will enable the City to more effectively manage an increasing number of projects. The City has also consolidated many purchasing responsibilities within the Finance Department and the addition of an analyst will enable the City to more efficiently provide purchasing services to all City departments
FY 2023-24
Position Title Funding Source
1. Construction Project Coordinator 100% General Fund
FY 2024-25
Position Title Funding Source
2. Assistant Analyst 100% General Fund
Community Engagement and Community Feedback Form
As a part of the Budget development process, the “Your City, Your Priorities” budget outreach and community engagement campaign was implemented. Staff attended in-person events such as the Goebel Wellness festival and presented to the Council on Aging and Youth Commission. Community engagement efforts focused on informing the public about the budget process, how to participate, and how to submit feedback on their budget priorities. Overall, 223 feedback forms were submitted from various community members. The areas of focus that were ranked as the highest priority were supporting the development of affordable housing, focusing on water conservation efforts, supporting homelessness services, and maintaining public safety services.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Budget information was provided through a dedicated website www.tobudget.org.
The website contained a resident feedback form and new graphical representations of the budget process, how tax dollars are spent, and how much General Fund services cost residents per day. In addition, a frequently asked questions (FAQ) page and links to the City’s financial transparency tool were included for those interested in exploring the City’s budget and financial information in more detail.
To promote interest and resident participation, social media outlets Facebook, Instagram, Twitter, and Nextdoor were utilized. Brief videos featured staff providing informative statistics on specific City service areas. Video content featured the City’s transit system and five key places to visit through public transportation, community services and events, the cost of running the Library per day and five new items available for checkout at the Library (not just books), and an overview of the Hill Canyon Treatment Plant.
DISCUSSION/ANALYSIS:
Overview of Proposed FY 2023-24 and FY 2024-25 Operating Budget The Proposed Budget is organized into various sections as follows and is included under separate cover:
•Citywide Budget Summary: This section includes information on all funds both by revenue and by appropriation.
•General Fund Budget Summary: This section includes information on the General Fund’s revenues and appropriations.
•Summaries by Fund: This section includes summaries by individual fund and by division within each department. Proposed goals and objectives and performance measures by function for each department are also included. Staff is in the process of completing goals and objectives, and performance measures to be included in the final budget document. •Position Summaries: This section includes a ten-year history of positions by department and a detailed position summary by fund.
Overall Budget Summary
The total proposed appropriations for the City for all funds for FY 2023-24 is $266.1 million, and for FY 2024-25 is $268.1 million, as shown in the table on the following page. The General Fund is the largest portion of the citywide Budget at 41.5 percent and 42.3 percent of appropriations in FY 2023-24 and FY 2024-25, respectively.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Funds
Proposed
Budget
FY 2023-24
% of
Total
Budget
Proposed
Budget
FY 2024-25
% of
Total
Budget
General Fund 110,425,493$ 41.5% 113,476,305$ 42.3%
Water Fund 46,860,438 17.6% 47,182,197 17.6%
Wastewater Fund 38,516,825 14.5% 30,988,132 11.6%
Transportation Fund 17,041,909 6.4% 14,863,054 5.5%
Library Fund 10,244,900 3.9% 11,205,546 4.2%
Street Improvement Funds 7,952,980 3.0% 11,140,219 4.2% Los Robles Golf Course Fund 7,803,131 2.9% 8,291,506 3.1% Landscaping Assessment District Fund 7,132,692 2.7% 8,946,404 3.3% Theatres Fund 5,124,183 1.9% 5,204,607 1.9%
Lighting Assessment District Fund 3,678,805 1.4% 3,170,354 1.2% Solid Waste Fund 3,006,138 1.1% 2,349,984 0.9%
Stormwater/Flood Control Assessment Funds 2,201,577 0.8% 3,745,347 1.4% Grants Fund 1,896,250 0.7% 1,008,570 0.4%
ECTA - East County Transit Alliance 1,162,000 0.4% 1,162,049 0.4% Public Financing Authority Fund 1,000,400 0.4% 1,006,200 0.4% Capital Projects Funds 993,930 0.4% 3,336,011 1.2%
Community Development Block Grant (CDBG) 575,000 0.2% 575,000 0.2% Housing Trust Fund 215,879 0.1% 221,844 0.1%
Cable Television (PEG) Fund 188,000 0.1% 108,000 0.0%
Law Enforcement Agency Seizure Fund 104,000 0.0% 104,000 0.0% Total Citywide Appropriations 266,124,530$ 100.0% 268,085,329$ 100.0% Citywide Appropriations By Fund
The following is a summary of the City’s Major Funds:
General Fund
The General Fund is the chief operating fund for City operations and services, including the following:
•Community development/building/housing/planning/zoning •Community services (senior/teen/recreation/cultural arts) •General governance and administrative oversight
•Public works/highways/streets/engineering/sustainability •Public safety (Police)
The General Fund is the City’s discretionary fund where revenue can be utilized for any purpose and is not restricted to a specific service or program. Staff ensures the General Fund is structurally balanced by verifying that ongoing revenues are greater than or equal to ongoing expenditures. Capital improvements are funded with General Fund reserves, and not ongoing revenues.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Revenue: Thousand Oaks is a low-tax city which incorporated without a general municipal property tax. Although the City now receives a small portion of property tax revenue, this represents approximately 16.0 percent of the Proposed General Fund Revenue Budget. The primary revenue source is sales tax, which comprises approximately 36.6 percent of the Proposed General Fund Revenue Budget. The City is limited in its ability to increase revenue and thus is largely reliant upon the overall health of the economy.
Staff has taken a conservative approach to budgeting for adjustments in major General Fund revenue estimates over the projected FY 2022-23 actuals in light of a potential recession. As illustrated in the chart below, estimated revenue and transfers in for FY 2023-24 are $109.6 million and for FY 2024-25 are $111.8 million.
General Fund Revenue
Revenue and Transfers
Actuals
FY 2021-22
Projected
Actuals
FY 2022-23
Proposed
Budget
FY 2023-24
Proposed
Budget
FY 2024-25
Taxes and Fees
Sales and Use Tax 38,071,482$ 38,596,157$ 39,621,786$ 40,888,157$ Property Tax 15,885,998 16,279,447 17,296,111 17,694,312 Property Tax In-Lieu of VLF 13,952,024 14,748,603 15,418,190 15,883,819 Franchise Fee 7,235,925 7,387,928 7,515,268 7,761,616
Transient Occupancy Tax 4,503,872 4,900,000 5,000,000 5,150,000 Business Tax 2,221,656 2,250,000 2,250,000 2,250,000
Other Taxes 114,355 570,000 564,000 564,000
Total Taxes and Fees 81,985,312$ 84,732,135$ 87,665,355$ 90,191,904$ Charges for Current Services 7,200,339 6,730,471 8,059,410 8,298,780 Licenses and Permits 5,204,532 6,013,109 4,757,504 4,661,504 Fines and Penalties 961,574 854,810 962,440 937,440
Revenue from Other Agencies 8,133,843 785,799 1,465,300 1,465,300 Revenue From Use of Money 2,294,222 3,100,000 3,750,171 3,417,012 Other Revenue 1,441,321 1,508,872 1,576,450 1,428,450
Total Revenue 107,221,143$ 103,725,196$ 108,236,630$ 110,400,390$ Transfers From Other Funds 1,154,803 1,209,506 1,322,180 1,352,419 Total Revenue and Transfers 108,375,946$ 104,934,702$ 109,558,810$ 111,752,809$ Discussion of the General Fund’s major revenue budget is included below:
•Sales Tax represents the largest category of revenue for the General Fund.
Sales Tax is budgeted to increase to $39.6 million (2.7 percent) in FY 2023- 24 and $40.9 million (3.2 percent) in FY 2024-25. The autos and transportation sector continues to lead the City’s sales tax revenue. Car sales have consistently remained strong while fuel and service stations have experienced increases due to rising gas prices. With the potential of an economic slowdown, sales tax revenue projections reflect positive yet conservative increases.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 •Property Tax revenue is budgeted to increase to $17.3 million (6.2 percent) in FY 2023-24 and $17.7 million (2.3 percent) in FY 2024-25. Residential property accounts for 3/4ths of the assessed value in the City. In calendar year 2022, while residential sale prices continued to rise, concerns over rising interest rates and inflation began to decrease the volume of home sales. While assessed valuation increases have been reflected in the proposed FY 2023-24 budget, the proposed FY 2024-25 budget was set at a more conservative level in recognition of the cooling housing market. •Property Tax in-lieu of Motor Vehicle License Fee (VLF) revenue is budgeted to increase to $15.4 million (4.5 percent) in FY 2023-24 and $15.9 million (3.0 percent) in FY 2024-25. For both Property Tax revenue and VLF revenue, the City works closely with its Property Tax consultant in developing budget estimates.
•Franchise Fee revenue is budgeted to increase to $7.5 million (1.7 percent) in FY 2023-24 and $7.8 million (3.3 percent) in FY 2024-25. The City receives Franchise Fee revenue from its waste hauler, cable companies, and utility providers (water, electric, and natural gas). Water, electric, and natural gas providers have all experienced increases in rates and this is expected to continue in the future.
•Transient Occupancy Tax (TOT) revenue is budgeted to increase to $5.0 million (2.0 percent) in FY 2023-24 and to $5.2 million (3.0 percent) in FY 2024-25. The FY 2023-24 budget is based on the recovery in TOT from the COVID-19 lows combined with increased occupancy and room rates with a modest increase in FY 2024-25.
•Business Tax revenue was formally budgeted as part of Licenses and Permits. To more accurately reflect the tax portion of the Business License program, the tax portion will be budgeted in the Taxes and Fees category of revenue and the smaller fee portion will still be budgeted in the Licenses and Permits category. For FY 2023-24 and FY 2024-25, Business Tax revenue is budgeted to remain flat at $2.3 million for both fiscal years to conservatively reflect a potential economic recession.
•Licenses and Permits revenue is budgeted at (after removing Business Tax revenue to its new category) $4.8 million in FY 2023-24 and $4.7 million in FY 2024-25. The reduction in FY 2023-24 is due to moving Business Tax from Licenses and Permits to Taxes and Fees. Budget is conservative due to rising interest rates and a slowdown in large construction projects.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Appropriations: The largest appropriation requirements of the General Fund are staffing costs and Police costs. For FY 2023-24 and FY 2024-25, Salaries and Benefits comprise approximately 43.3 percent and 43.9 percent, and Police costs comprise approximately 34.6 percent and 35.2 percent of operating requirements, respectively. As illustrated in the table below, the Proposed Budget for General Fund appropriations for FY 2023-24 is $110.4 million and for FY 2024-25 is $113.5 million.
General Fund Appropriations
Appropriations
Prior Year ActualFY 2021-22
Projected ActualsFY 2022-23
Proposed Budget FY 2023-24
Proposed Budget FY 2024-25 Salaries and Benefits 34,647,639$ 37,057,265$ 42,334,459$ 44,459,910$ Police Services 29,211,811 31,444,983 33,799,215 35,579,515 Maintenance and Operations 13,779,237 15,273,263 21,550,471 21,138,093 Total Operating Requirements 77,638,687$ 83,775,511$ 97,684,145$ 101,177,518$ Capital Improvements/Outlay 1,281,041 1,686,842 5,594,771 4,001,682 Maintenance Improvements 68,266 67,796 3,237,500 1,572,500 Transfers to Other Funds 3,695,491 7,350,383 3,909,077 6,724,605 Total Requirements 82,683,485$ 92,880,532$ 110,425,493$ 113,476,305$ •Salaries and Benefits represent the largest appropriation category of the General Fund’s Operating Budget. Salaries and Benefits are budgeted at $42.3 million in FY 2023-24 and $44.5 million in FY 2024-25. The increase is due to estimated salary and benefit increases and additional positions as discussed in the Background Section. The City budgets for 100 percent staffing levels during the fiscal year but invariably realizes savings due to vacancies.
One of the biggest challenges facing all cities is rising pension costs. In FY 2019-20, City Council took a proactive approach to address its CalPERS unfunded liability by approving a fresh start program which reduced the amortization period from 30 years to 15 years. This action was projected to save the City approximately $30.0 million. The City also began making one- time additional payments of approximately $1.5 million annually based on salaries and benefits savings each year. In addition, the City established a pension rate stabilization trust fund (PRSTF) with a $22.5 million contribution in FY 2018-19 which has grown to $27.5 million as of March 31, 2023. The PRSTF acts as a rainy-day fund in case of future economic downturns that result in pension costs that greatly exceed budgeted projections.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 •Police Costs are budgeted at $33.8 million in FY 2023-24 and $35.6 million in FY 2024-25. The increase in FY 2023-24 is based on projected actuals in FY 2022-23 as opposed to Adopted Budget. Actual costs generally come in under budget primarily due to savings from vacancies throughout the year. City staff maintains regular dialogue with Ventura County Sheriff’s Department leadership on current law enforcement needs and strategically plans for the future.
•Maintenance & Operations (M&O) costs including chargebacks are budgeted at $21.6 million in FY 2023-24 and $21.1 million in FY 2024-25.
The Proposed Budget includes $0.9 million each fiscal year for the Navigation Center’s contracted operating services. As part of the City’s comprehensive General Plan update implementation, the Proposed Budget includes $1.4 million in FY 2023-24 and $1.3 million in FY 2024-25 for consulting support to update the City’s Municipal Code and Specific Plans.
FY 2023-24 also includes a $1.3 million increase in fuel costs to adjust for the inflation-driven natural gas price increases experienced at the beginning of 2023.
•Transfers to Other Funds include General Fund support to the Library Fund in the amount of $0.5 million for FY 2023-24 and $1.6 million for FY 2024- 25; the Stormwater Fund in the amount of $1.5 million and $3.0 million, respectively for implementation of mandated regulations; the Transportation Fund of $0.9 million and $1.0 million, respectively to cover the required fare box match in case the State legislature does not continue the pause on this requirement; the Public Financing Authority in the amount of $1.0 million annually for debt service; and $0.1 million transfer annually to the Community Recreation and Open Space Fund.
Library Fund
The Library Fund accounts for operations at the Grant R. Brimhall Library and Newbury Park Branch Library. The total Proposed Library Budget for FY 2023-24 and FY 2024-25 is $10.2 million and $11.2 million respectively, which includes salaries and benefits, M&O, and capital improvements.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Prior Year
Actual
FY 2021-22
Projected
Actual
FY 2022-23
Proposed
Budget
FY 2023-24
Proposed
Budget
FY 2024-25
Revenue
Property Tax 8,213,965$ 8,965,893$ 8,719,950$ 9,018,587$ Other Revenue 272,064 467,307 302,000 1,096,000
Transfers From Other Funds - - 500,000 1,640,958
Total Revenue 8,486,029$ 9,433,200$ 9,521,950$ 11,755,545$ Appropriations
Salaries and Benefits 5,643,117$ 5,559,825$ 6,632,181$ 6,864,539$ Maintenance and Operations 2,557,600 2,426,614 3,362,719 3,353,507 Total Operating Requirements 8,200,717$ 7,986,439$ 9,994,900$ 10,218,046$ Capital Improvements 150,243 122,686 250,000 987,500
Maintenance Improvements 61,244 35,863 - -
Total Estimated Requirements 8,412,204$ 8,144,988$ 10,244,900$ 11,205,546$ Reserve/(Use of Fund Balance) 73,825$ 1,288,212$ (722,950)$ 549,999$ Library Fund
Revenue: Library revenues are restricted for library operations and capital improvements. The Library Fund’s primary revenue source is property tax. The Library Fund receives a transfer from the General Fund to support capital improvements and operations as necessary. The General Fund transfer is budgeted at $0.5 million in FY 2023-24 and $1.6 million in FY 2024-25 for capital projects including sustainability improvements such as the solar project.
Appropriations: The majority of the Library Fund’s operating requirements are for salaries and benefits. The materials budget (primarily for the purchase of books) is included in Supplies/Equipment within M&O appropriations and is approximately $0.8 million annually.
Other Governmental Funds
Lighting Fund – The Lighting Fund provides for maintenance and improvements of the City’s traffic signal safety lighting and streetlights in the City’s Lighting Assessment District. Although the Lighting Fund has an overall deficit due to capital projects, operationally the fund is balanced. There is adequate fund balance available to fund the proposed capital projects.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Prior Year Actual FY 2021-22
Projected Actual FY 2022-23
Proposed Budget FY 2023-24
Proposed Budget FY 2024-25RevenueProperty Tax 2,027,544$ 2,080,615 2,102,700$ 2,162,700$ Special Assessments 472,700 496,052$ 525,000 540,000Other Revenue 75,603 38,721 48,194 48,511Transfers From Other Funds 99,178 100,000 92,000 27,200Total Revenues 2,675,025$ 2,715,388$ 2,767,894$ 2,778,411$ AppropriationsSalaries and Benefits 266,634$ 266,111$ 329,578$ 339,933$ Maintenance and Operations 1,800,605 2,009,572 2,278,227 2,177,921Total Operating Requirements 2,067,239$ 2,275,683$ 2,607,805$ 2,517,854$ Capital Improvements 26,816 62,382 671,000 352,500Maintenance Improvements 195,007 465,034 400,000 300,000Total Estimated Requirements 2,289,062$ 2,803,099$ 3,678,805$ 3,170,354$ Reserve/(Use of Fund Balance) 385,963$ (87,711)$ (910,911)$ (391,943)$ Lighting Fund
Revenue: The Lighting Fund receives revenue primarily from special assessments and ad valorem property tax. FY 2023-24 and FY 2024-25 revenues are budgeted at $2.8 million for each fiscal year.
Appropriations: The Proposed FY 2023-24 and FY 2024-25 Lighting Fund appropriations are $3.7 million and $3.2 million, respectively. The M&O budget is primarily for electricity costs to operate the traffic signals and streetlights. Also included are capital improvement and maintenance projects of $1.1 million and maintenance improvement projects of $0.7 million each year respectively.
Landscaping Fund – The Landscaping Fund provides for landscape maintenance and improvements within the City’s Landscape Assessment Districts. The Landscaping Fund has sufficient revenues to cover operating expenditures annually and sufficient fund balance to pay for proposed capital improvement projects.
Prior Year
Actual
FY 2021-22
Projected
Actual
FY 2022-23
Proposed
Budget
FY 2023-24
Proposed
Budget
FY 2024-25
Revenue
Special Assessments 4,819,337$ 5,100,000$ 5,400,000$ 5,600,000$ Property Tax 1,657,764 1,695,999 1,729,200 1,754,200
Other Revenue 269,263 153,699 196,375 196,375
Total Revenue 6,746,364$ 6,949,698$ 7,325,575$ 7,550,575$ Appropriations
Salaries and Benefits 847,445$ 899,195$ 1,191,768$ 1,246,616$ Maintenance and Operations 3,835,170 3,944,051 5,025,274 5,107,288 Total Operating Requirements 4,682,615$ 4,843,246$ 6,217,042$ 6,353,904$ Capital Improvements 28,360 427 915,650 2,592,500
Total Estimated Requirements 4,710,975$ 4,843,673$ 7,132,692$ 8,946,404$ Reserve/(Use of Fund Balance) 2,035,389$ 2,106,025$ 192,883$ (1,395,829)$ Landscaping Fund
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Revenue: The Landscaping Fund receives revenue primarily from special assessments and ad valorem property tax. FY 2023-24 and FY 2024-25 revenues are budgeted at $7.3 million and $7.6 million, respectively.
Appropriations: The Proposed FY 2023-24 and FY 2024-25 Landscaping Fund appropriations are $7.1 million and $8.9 million, respectively. The M&O budget is primarily for contracted landscape services and water costs. Also included are capital improvement projects of $0.9 million in FY 2023-24 and $2.6 million in FY 2024-25.
Stormwater Fund – The Stormwater Fund ensures the City implements the requirements of the National Pollutant Discharge Elimination System (NPDES) permit. The NPDES permit provides for regulations in the areas of illicit discharge/dumping response and abatement, public education and outreach, public infrastructure maintenance, construction site pollution controls, ongoing monitoring, and new development discharge controls.
Prior Year Actual FY 2021-22
Projected Actual FY 2022-23
Proposed Budget FY 2023-24
Proposed Budget FY 2024-25RevenueSpecial Assessment 136,280$ 138,265$ 139,000$ 139,000$ Other Revenue 444,543 445,000 353,900 353,900Transfers From Other Funds 194,906 264,583 1,708,677 3,252,447Total Revenue 775,729$ 847,848$ 2,201,577$ 3,745,347$ AppropriationsSalaries and Benefits 283,446$ 396,848$ 375,338$ 388,744$ Maintenance and Operations 428,355 401,000 526,239 556,603Total Operating Requirements 711,801 797,848 901,577 945,347Capital Improvements - - 300,000 1,700,000Maintenance Improvements 63,928 50,000 1,000,000 1,100,000Total Requirements 775,729$ 847,848$ 2,201,577$ 3,745,347$ Reserve/(Use of Fund Balance) -$ -$ -$ -$ Stormwater Fund
The primary revenue source for Stormwater is from special assessment fee revenue and sale of reclaimed water. The special assessment fee revenue comes from a countywide special assessment and can only be increased by a County- wide ballot measure. With NPDES permit costs continuing to rise, General Fund support of the Stormwater Fund is projected to continue to increase. The estimated transfer from the General Fund is $1.5 million for FY 2023-24 and $3.0 million for FY 2024-25, with an additional $0.3 million transfer from the Solid Waste Fund each year. While this is a challenge that all cities are facing, staff continues to work on identifying strategies to reduce the General Fund support for this program.
Street Improvement Fund – The Street Improvement Fund is for the improvement and maintenance of street infrastructure and sidewalks. Revenue comes primarily Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 from gasoline taxes, grants, and Transportation Development Act funds. The Proposed FY 2023-24 and FY 2024-25 revenue budget is $8.3 million for both fiscal years. Appropriations are included in the Proposed CIP Budget.
Grants Fund – The Grants Fund is where the City accounts for federal and state grant revenue for capital projects. The Proposed FY 2023-24 and FY 2024-25 revenue budget is $1.9 million and $1.0 million respectively. Appropriations are included in the Proposed CIP Budget.
Enterprise Funds
Water Fund – The City’s water system distributes up to 15 million gallons of water each day to serve more than 16,000 customers. With the exception of a few small areas outside City limits, the City distributes water to 37 percent of the geographical area within its incorporated boundaries. The Proposed FY 2023-24 and FY 2024-25 Water Operating and Capital Budget is $46.9 million and $47.2 million, respectively.
Prior Year Actual FY 2021-22
Projected Actual FY 2022-23
Proposed Budget FY 2023-24
Proposed Budget FY 2024-25
RevenueMetered Water Sales 23,248,121$ 16,020,000$ 25,800,000$ 27,700,000$ Base Charges 5,804,346 7,020,000 6,834,900 7,124,700Lift Charges 927,472 922,000 1,030,000 1,085,000Plant Investment Fees 553,320 85,500 250,000 250,000Interest Income (2,238,238) 308,600 809,000 809,000Miscellaneous Revenue 1,033,810 539,000 503,500 503,500Total Revenue 29,328,831$ 24,895,100$ 35,227,400$ 37,472,200$ AppropriationsSalaries and Benefits 3,573,778$ 4,960,000$ 5,541,101$ 5,773,897$ Maintenance and Operations 20,627,860 15,500,000 25,354,937 26,238,300Total Operating Requirements 24,201,638$ 20,460,000$ 30,896,038$ 32,012,197$ Capital/Depreciation 7,094,858 2,190,000 14,489,400 15,170,000Maintenance Improvements 840,343 2,260,000 1,475,000 -Transfers to Other Funds 86,461 - - -Total Requirements 32,223,300$ 24,910,000$ 46,860,438$ 47,182,197$ Reserve/(Use of Net Position) (2,894,469)$ (14,900)$ (11,633,038)$ (9,709,997)$ Water Fund (Operations/Capital)
Revenue: The Water Fund receives revenue primarily from metered water sales and base charges. Water Fund revenues are budgeted at $35.2 million FY 2023- 24 and $37.5 million for FY 2024-25.
Appropriations: Proposed FY 2023-24 and FY 2024-25 Water Fund Operating appropriations are budgeted at $30.9 million and $32.0 million, respectively.
Estimated capital and maintenance improvement requirements are $16.0 million Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 for FY 2023-24 and $15.2 million for FY 2024-25. The major M&O expense is for purchase of water from Calleguas Municipal Water District.
Wastewater Fund – Hill Canyon Treatment Plant (HCTP) serves more than 37,000 wastewater accounts and provides service to approximately 90 percent of the City. HCTP treats an average of 10.5 million gallons of wastewater per day. Proposed FY 2023-24 and FY 2024-25 Wastewater Operating and Capital Budget is $38.5 million and $31.0 million, respectively.
Prior Year Actual FY 2021-22
Projected Actual FY 2022-23
Proposed Budget FY 2023-24
Proposed Budget FY 2024-25RevenueService Charges 21,209,945$ 20,160,000$ 20,502,350$ 20,927,350$ Connection Fees 1,309,114 384,000 450,000 450,000Interest Income (2,815,585) 384,500 1,010,000 1,010,000Miscellaneous Revenue 831,984 935,500 1,351,900 1,356,900Total Revenue 20,535,458$ 21,864,000$ 23,314,250$ 23,744,250$ AppropriationsSalaries and Benefits 4,718,935$ 7,500,000$ 8,552,793$ 8,917,686$ Maintenance and Operations 8,649,729 10,450,000 12,629,632 12,120,446Total Operating Expenses 13,368,664$ 17,950,000$ 21,182,425$ 21,038,132$ Capital/Depreciation 1,150,498 14,870,500 14,454,400 5,300,000Maintenance Improvements 2,447,151 - 2,880,000 4,650,000Debt Service 2,035,130 2,035,200 - -Total Requirements 19,001,443$ 34,855,700$ 38,516,825$ 30,988,132$ Reserve Account 1,534,015$ (12,991,700)$ (15,202,575)$ (7,243,882) Wastewater Fund (Operations/Capital)
Revenue: The Wastewater Fund receives revenue primarily from residential and commercial service charges and capital revenue. FY 2023-24 and FY 2024-25 revenues are budgeted at $23.3 million and $23.7 million, respectively.
Appropriations: The Proposed FY 2023-24 and FY 2024-25 Wastewater Operating Budget is $21.2 million and $21.0 million, respectively. Capital and maintenance improvement appropriations are $17.3 million for FY 2023-24 and $10.0 million for FY 2024-25.
Solid Waste Fund – The Solid Waste Fund is responsible for the following programs: Recycling Program, Sustainability, Household Hazardous Waste Program, Community Enhancement Program, Caltrans Adopt-A-Highway Program, and the Community Enhancement Grant Program. In 2020, the City conducted a Request for Proposal (RFP) for waste hauler service providers.
Effective January 2022, the selected vendor, Athens Services, began providing consolidated waste service to residents and businesses in Thousand Oaks.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Prior Year
Actual
FY 2021-22
Projected
Actual
FY 2022-23
Proposed
Budget
FY 2023-24
Proposed
Budget
FY 2024-25
Revenue
Residential Recycling 678,111$ 796,500$ 1,200,000$ 1,248,000$ Commercial Recycling 862,908 759,000 870,000 904,800
Landfill Facility Fee 229,265 226,000 181,200 181,200
Temporary Drop Box & Bin 152,423 163,500 140,000 145,600 Interest Income (216,210) 35,000 76,000 76,000
Grants - Recycling and Hazardous Waste 76,802 62,000 48,000 48,000 Other Revenue 162,313 226,000 220,000 220,000
Total Revenue 1,945,612$ 2,268,000$ 2,735,200$ 2,823,600$ Appropriations
Salaries and Benefits 486,785$ 660,000$ 738,802$ 764,438$ Maintenance and Operations 872,507 891,000 1,237,336 1,310,546 Total Operating Requirements 1,359,292 1,551,000 1,976,138 2,074,984 Capital/Depreciation 31,127 424 780,000 -
Transfers to Other Funds 100,000 200,000 250,000 275,000 Total Requirements 1,490,419$ 1,751,424$ 3,006,138$ 2,349,984$ Reserve/(Use of Net Position) 455,193$ 516,576$ (270,938)$ 473,616$ Solid Waste Fund
Revenue: The Solid Waste Fund receives revenues from various sources including commercial recycling fees, landfill facility fees, residential recycling fees, temporary drop box and bin fees, and state grants for recycling and hazardous waste. Proposed revenues are budgeted at $2.7 million in FY 2023-24 and $2.8 million in FY 2024-25.
Appropriations: Proposed appropriations are budgeted at $3.0 million for FY 2023- 24 and $2.3 million for FY 2024-25 and include transfers of $250,000 and $275,000 to the Stormwater Fund for each fiscal year, respectively.
Transportation Fund – The Transportation Fund provides transportation services in the form of the Thousand Oaks Transit (TOT) bus system and Dial-A-Ride to the residents of the Conejo Valley to help reduce traffic, air pollution, and conserve energy resources. The Transportation Fund is also responsible for providing various transportation services to the City of Westlake Village (Los Angeles County), City of Agoura Hills (Los Angeles County), Oak Park (unincorporated Ventura County), and City of Moorpark. The bus and Dial-A-Ride services are provided by MV Transportation.
Based on the unprecedented impacts of the COVID-19 pandemic, state legislation was passed that provided relief for the farebox collection ratios required to obtain TDA funding. The Proposed Budget does not include the continuation of the farebox collection relief. However, Staff is monitoring potential legislation that could extend the relief into future years.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Prior Year Actual FY 2021-22
Projected Actual FY 2022-23
Proposed Budget FY 2023-24
Proposed Budget FY 2024-25RevenueSales Tax on Gasoline, SB325 2,091,612$ 6,280,000$ 5,260,500$ 5,260,500$ Federal and State Grants 3,696,899 1,725,000 2,250,000 3,250,000Non-City Bus Services 1,439,406 1,500,000 1,774,000 1,937,000Bus & Dial-A-Ride Fares 788 130,000 130,000 130,000Other Revenue 122,078 286,000 153,450 166,050Interest Income (297,050) 41,000 113,000 113,000Transfers From Other Funds - 350,000 850,000 1,000,000Total Revenue 7,053,733$ 10,312,000$ 10,530,950$ 11,856,550$ AppropriationsSalaries and Benefits 528,148$ 670,000$ 746,798$ 773,151$ Maintenance and Operations 5,844,417 7,405,000 7,823,611 8,439,903Capital Outlay 39,128 488,000 - -Total Operating Requirements 6,411,693 8,563,000 8,570,409 9,213,054Capital/Depreciation 1,010,433 530,500 8,471,500 5,650,000Total Requirements 7,422,126$ 9,093,500$ 17,041,909$ 14,863,054$ Reserve/(Use of Net Position) (368,393)$ 1,218,500$ (6,510,959)$ (3,006,504)$ Transportation Fund
Revenue: The Transportation Fund receives revenues from various sources, but primarily sales tax on gasoline, SB325, and state and federal grants. FY 2023-24 and FY 2024-25 revenues are budgeted at $9.7 million and $10.9 million, respectively. General Fund support is anticipated to be $0.9 million in FY 2023-24 and $1.0 million in FY 2024-25.
Appropriations: The City contracts with MV Transportation for the operation of the transit system. Proposed FY 2023-24 and FY 2024-25 appropriations are budgeted at $17.0 million and $14.9 million, which includes capital improvements of $8.5 million and $5.7 million, respectively. Although the Transportation Fund shows a deficit due to capital projects, the City anticipates receiving grant funding for the projects to offset costs. If the grant funding is not yet awarded, the grant is not included in the budget.
Theatres Fund – The Theatres Fund maintains and operates the Civic Arts Plaza’s two theatres:
•Fred Kavli Theatre – 1,800-seat performing arts theatre, hosts performances from the contemporary to the classic, including nationally renowned shows.
•Janet and Ray Scherr Forum Theatre – 400-seat community theatre and meeting site, caters primarily to performances by the local community, the bi-monthly City Council meetings, and other City functions.
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Prior Year Actual FY 2021-22
Projected Actual FY 2022-23
Proposed Budget FY 2023-24
Proposed Budget FY 2024-25RevenueTheatre Rentals and Fees 1,560,419$ 3,280,000$ 3,704,600$ 3,765,100$ Alliance for the Arts 510,000 520,200 530,604 541,216Other Revenue 2,878,287 517,500 786,981 807,793Total Revenue 4,948,706$ 4,317,700$ 5,022,185$ 5,114,109$ AppropriationsSalaries and Benefits 2,731,232$ 2,300,000$ 2,417,348$ 2,505,142$ Maintenance and Operations 2,246,281 2,155,000 2,706,835 2,699,465Total Operating Requirements 4,977,513 4,455,000 5,124,183 5,204,607Total Requirements 4,977,513$ 4,455,000$ 5,124,183$ 5,204,607$ Reserve/(Use of Net Position) (28,807)$ (137,300)$ (101,998)$ (90,498)$ Theatres Fund
Revenue: The Theatres Fund receives revenue primarily from rentals and fees associated with performers’ use of the theatres. FY 2023-24 and FY 2024-25 revenues are budgeted at $5.0 million and $5.1 million respectively. Prior year actual revenue for FY 2021-22 included $2.9 million in federal grant revenue due to COVID-19.
Appropriations: Proposed appropriations are budgeted at $5.1 million and $5.2 million respectively. The City budgeted conservatively coming out of COVID-19 and it is hoped that revenue will come in higher than budgeted, eliminating the proposed deficit.
Golf Course Fund – Los Robles Greens Golf Course (LRGGC) is operated through a management agreement with Arcis Golf. The Golf Course Fund revenue budget is $8.7 million in FY 2023-24 and $9.0 million in FY 2024-25, with appropriations of $7.8 million and $8.3 million, respectively. An annual $100,000 transfer to open space is budgeted in both fiscal years.
Biennial Budget Preparation Timeline
•March 9, 2023 User Fees to Finance/Audit Committee
•March 14, 2023 User Fees Study Session
•March 30, 2023 Financial and Budget Update to Finance/Audit Committee •April 3, 2023 CIP Budget to Planning Commission
•April 4, 2023 CIP Study Session
•April 25, 2023 User Fees Public Hearing
•May 8, 2023 Operating Budget to Finance/Audit Committee •May 9, 2023 Operating Budget Study Session
•May 23, 2023 City Council Goal Setting Meeting
•June 6, 2023 Operating & CIP Budget Public Hearing •June 20, 2023 GANN Appropriation Limit
Proposed FY 2023-24 and FY 2024-25 Operating Budget Study Session May 9, 2023
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5 Summary
The Proposed Budget represents a substantial yet strategic spending plan that is fiscally responsible, invests in maintaining the City’s aging infrastructure, prioritizes sustainability, and includes new positions based on key ongoing, customer-focused initiatives, with a structurally balanced General Fund.
The City has emerged from the COVID-19 pandemic in a financially stable and healthy position. Continued research, education, and progress will be made toward the future vision of the City as determined through the comprehensive General Plan Update. Strategic, long-term financial planning is a cornerstone of these efforts as the City maintains its aging infrastructure, increases efficiencies, modernizes technology, and continuously evaluates expenditures while providing quality services to the public.
There continues to be a significant amount of uncertainty with the state of the global economy amid historic inflation. While this Proposed Budget provides strategic investments toward the future, projections have been made conservatively in order to remain agile and resilient should a recession occur over the next two fiscal years.
Staff will continue to monitor the City’s revenues and expenditures to ensure that any material changes are communicated to City Council. Staff will also continue to take proactive steps to ensure strong financial health for the City in the future.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
B. Provide municipal government leadership which is open and responsive to residents, and is characterized by ethical behavior, stability, promoting public trust, transparency, confidence in the future, and cooperative interaction among civic leaders, residents, business representatives, and staff, while recognizing and respecting legitimate differences of opinion on critical issues facing the City.
PREPARED BY: Carrie Matson, Deputy Finance Director
Ryan Roman, Sr. Financial Analyst
Document Provided Under Separate Cover:
#1 – Proposed FY 2023-24 and FY 2024-25 Operating Budget FIN:330-20\cm\H:\COMMON\ADLFR\Budget\Budget 2023-2025\05092023 Operating Budget Study Session.docx