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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx cycle. The Airport is committing a portion of its special events budget to community outreach efforts by partnering with local schools, community non-profits and emergency services groups.
Five-Year Capital Improvement Plan
The Five-Year Capital Plan helps the City prioritize its funding and planning for longer term structural needs. This year, all departments submitted a comprehensive list of all capital needs and projects. Departments were encouraged to submit all their known capital needs knowing that the City may not be able to fund all projects. The list will inform the City of its capital needs.
Several departments have recently been through Master Planning processes which formed their requests. Furthermore, the Public Works and Utility department has recently completed a comprehensive facility study. The study identified most of the City’s buildings and their maintenance and repairs needs.
The prioritization and decision process differed depending on funding source. For the General Fund, this year’s guiding principles were:
1) To fund projects that aligned with City Council’s strategic priorities as much as possible to create efficiencies by collaborating across the City. 2) To match or sync up with grant or other funding activities occurring at the same time; and 3) Projects required by changes in law or operational necessity. 4) Maximize the use of fund balance from other available funds to preserve General Fund for projects with no other funding options.
Based on the above criteria, the General Fund has a high priority on streets, including pothole repairs and striping. New funding in the General Fund is $4,209,820 in FY 2024-25, this number also includes an additional $1,297,000 for the Ramsay Renaissance Project. The General fund’s capital expenditure is about $10MM. Most of the funding is for Parks projects this year, particularly Ramsay Park. The majority is the re-appropriation of funds for prior commitments to this project. Also included in the reappropriation are the costs for the City’s General Plan. This capital plan invests over $12.8 million into Ramsay Park (including ARPA funds). The work on the Ramsay project is slated to start in August 2024. We have already broke ground on this project. The project will include a full-sized turf soccer field, proposed trail, picnic areas, and an all-inclusive playground amongst many other improvements.
Most capital projects are not General Fund and will be managed by the Public Works and Utilities Department. Both the Wastewater and Water enterprises have previously completed comprehensive master plans last year which informed their proposals.
Wastewater Fund
In Fiscal year 2024/25, the two larger recommended projects are the Main Switchgear and Energy Recovery Electrical System Improvements $10MM in FY 2024-25. The main electrical switchgear and backup generation system that provides power and emergency backup power to all equipment in the wastewater treatment plant is nearing the end of its useful life. This critical equipment was identified in the Wastewater Treatment Plant (WWTF) Hazard Assessment as vulnerable to flood and seismic hazards. This project will replace this critical equipment and mitigate future flood or seismic hazards so the WWTF will continue to provide safe and effective wastewater treatment for the communities it serves. We are also planning to spend about $1.65MM on the Levy Embankment Stabilization Project. This project will install sheet piles in
6/6/2024 7:37:15 PM
C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx the Pajaro River Levee section that borders the Wastewater Treatment Plant to help stabilize the levee embankment and reduce seepage to protect one of the City's most valuable assets in the case of Pajaro River flooding. This project also includes estimated costs for relocating the WWTP electrical service which is currently located on the levee.
Water Fund
In Fiscal Year 2024/25 the Water Fund is proposing a $1.5MM project to Construct a new Water Well #4. The City needs to invest in new wells to improve water system reliability by providing additional water sources that will supplement the existing wells, some of which are nearing the end of their useful life. Additionally, in Fiscal Year 2024-25 they are proposing to spend $2MM on the Chromium-6 project. The State is in the process of updating the regulation limits for Chromium-6. Depending on the final regulation limit issued by the State, several of the City's existing well sites may require additional treatment to meet these new regulatory limits. This project will provide Chromium-6 treatment technology at wells 2,3,7,14,17 &18 to meet regulatory compliance.
They are also proposing other projects that will repair or improve reservoirs, water meter main replacements and various other projects.
Solid Waste.
The Solid Waste capital program is largely driven by the costs of opening landfill cells. This is a carryforward project to open a new landfill cell in 2024. Also being planned are the purchase of two new collection vehicles at about $1.1MM.
Transportation
To make the best use of limited road repair and maintenance funding, staff hired a consultant to prepare a five-year Pavement Management Plan (PMP) and to provide a Pavement Program Manager (PPM) services for the PMP. The PMP will assess the condition of all city roads, review financial resources, and propose a five-year roadway repair and maintenance schedule that current funding levels will allow. Along with road conditions and finances, the plan will consider utility replacement projects, equity, community input, and grouping similar projects to reduce construction costs.
The PPM will be an extension of city staff and manage the projects proposed by the PMP.
This includes coordinating design, managing construction, and ensuring proper inspection and testing of each project. Transportation projects include the major arterial roads with more traffic and tend to deteriorate quicker than lesser-traveled roads. Sidewalks and pedestrian or bike trails also show wear due to age. Streetlights, traffic lights, striping, and signage must be maintained and updated to use new and more effective technology following industry best management practices. Other factors, such as increased population or new state or federal mandates, may require upgrading or expanding facilities. The firm will be developing a five-year Pavement Management Program, the scope of work shall include:
1. Project Management.
2. PMP Audit & Update: Create database for new and existing street information.
3. Pavement Condition Survey: Collect field data of road conditions.
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C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx
4. Budget Analysis: Identify funding and consider budget scenarios.
5. GIS Segmentation/Maps Generation: Integrate existing and new street data.
6. Prepare draft & final report.
7. Community Engagement: Participate in public meetings to present and discuss PMP.
8. Training for City staff: Train staff on road analysis and StreetSaver program.
9. ADA Curb Ramp Analysis: Assess the condition of curb ramps that may require repair as part of pavement projects.
Funding comes from many sources, and each has its own requirements. Four of the sources, Gas Tax, Measure D, SB1 and Measure R and have similar requirements and can be used on design and construction of transportation projects that include road repair and rehabilitation, traffic signals, safety improvements and bicycle and pedestrian improvements. The City also secures grant funding through local, State and Federal sources that is awarded on a competitive basis. These grants often focus on an area, such as safety, pedestrian facilities, bicycle facilities or reducing pollution. Another source of funding is developer fees, which are collected for specific improvements in an area and use restricted to that purpose.
The number and size of projects identified in the PMP will be determined by available funding.
Currently, Watsonville receives approximately $3.5 million annually from Gas Tax, SB1 and Measure D to fund all transportation work and projects. Approximately $1 million of this is used for staffing, operations, and maintenance costs. Grants also provide one-time funding for specific projects.
Unfunded Capital Needs
Despite a plan which expects to fund over $35.7 million of Capital new projects next budget year, we still have over $50 million of unfunded capital projects. The majority of these are not for “wish list” items but for basic maintenance and updates to our facilities and equipment, as identified in our facility’s plan. Capital investment was neglected after the 2008 recession and has left the City with a backlog of needs to our police and fire stations, our parks, our community buildings, and our sports facilities. We will continue to seek grants and other funds to invest in our capital assets, and potentially look to Federal infrastructure funding that we hope will come our way.
6/6/2024 7:37:15 PM
C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx STRATEGIC PLAN: the case of Pajaro River flooding. This project also includes estimated costs for relocating the WWTP electrical service which is currently located on the levee 4-Fiscal Health
Budget Legislation
Each year the passage of the budget requires the passage of a few legislative items.
Below is a listing of each of those items along with a brief description. Today’s action:
The following shall be requested to be adopted at the June 25, 2024, council meeting.
That the Joint City Council, the City Council in its capacity as the Housing Successor Agency shall:
6/6/2024 7:37:15 PM
C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx 1) Budget and CIP: approve a resolution adopting the FY 2024-25 Budget, providing certain transfers of funds and approve the Five-Year Capital Improvement Program, as highlighted and summarized above.
That the City Council shall adopt the following resolutions or ordinances:
2) Hydrant Meter Deposit: Approve a resolution adopting a Hydrant Meter Deposit in the amount of $4,783.
Commercial Container Contamination Fee (1 yard-40 yards): Approve a resolution adopting a new contamination fee as required by SB 1383, which states that jurisdictions to ensure compliance with the guidelines established by allowing jurisdictions to enforce policies by imposing penalties on customers. The purpose of these penalties is to ensure proper disposal by customers and a cleaner waste stream which will help avoid higher disposal costs. The processors will assess higher fees if our loads contain high volumes of prohibited materials, the following are the proposed fees:
a)1st offense – 25% of monthly container fee
b) 2nd offense - 50% of monthly container fee
c) 3rd offense - 100% of monthly container fee
3) Gann Limit: Resolution establishing the “Total Annual Appropriations” pursuant to State Constitution Article XIII-B for Fiscal Year FY 2024-25 (Proposition 4 GANN spending limit) as shown in Attachment 4; and
4) Property Tax levy: That the City Council adopt an ordinance to instruct Santa Cruz County to levy and collect property tax on taxable property within the City of Watsonville for fiscal year beginning July 1, 2024, to June 30, 2025, at the levy rate of 0.077% and allocating to the Retirement Fund; and
That City Council in its capacity as the Housing Successor Agency 5) Expenditures of housing funds: That the Housing Successor Agency shall adopt a resolution to authorize the expenditure of low and moderate-income housing funds for planning and general administrative costs for the purpose of producing, improving, and preserving the community's supply of low and moderate-income housing; and
6) Redevelopment Project: Find that the use of taxes allocated from the Watsonville 2000 Redevelopment Project for producing, improving, and preserving the supply of low and moderate-income housing outside the project area will be of benefit to the project area.
STRATEGIC PLAN:
The current balance budget meets Strategic Plan goal Number 2 of fiscal health by presenting a balanced budget, preserving the General Fund Reserve, and looking ahead to ensure the long-term financial health of the City.
6/6/2024 7:37:15 PM
C:\Program Files\eSCRIBE\TEMP\1937928831\1937928831,,,Report - Budget Plan FY2024-25 and Related Actions.docx FINANCIAL IMPACT:
Appropriate Fiscal Year 2024-25 spending of $267,655,732.
ALTERNATIVES:
The City Council may direct staff to present different alternatives for the budget or make changes to the current recommendation.
ATTACHMENTS:
1) Proposed FY 2024-25 Budget
(https://www.watsonville.gov/DocumentCenter/View/23447/Budget-FY-24-25- Draft-)
City of Watsonville
Finance Department
June 11, 2024
• Proposed Budget
FY 2024-25
Today’s Topics
• Budget overview and study session
• General Fund
• Capital Improvement Plan
• Enterprise and Other Funds
• Set the budget adoption date for two weeks from
now. No action is required tonight.
June 2023 – Biannual Budget
February 2024 - Mid-Year
June 2024 – Budget Revise for
FY 24/25
Budget Schedule
Budget Overview
General Fund
Total
Special
Total
Debt
Total
Enterprise
Total
Internal
Total
Private Trust
Total
Total All
Funds
Projected Resources 2024-25
Revenues 60,516,653 30,214,953 - 89,340,581 23,711,133 1,168,105 204,951,425 Transfers In 4,497,355 93,195 466,994 - - - 5,057,544
Total Gross Resources 65,014,008 30,308,148 466,994 89,340,581 23,711,133 1,168,105 210,008,969 Projected Expenditures
Operations 59,852,229 15,047,873 - 58,420,554 23,739,266 77,562 157,137,484 Capital 18,754,853 22,954,253 - 59,871,123 1,082,382 - 102,662,611 Transfers Out 135,139 4,622,381 - 285,056 - 14,968 5,057,544 Debt Service - - 466,994 1,255,524 - 1,075,575 2,798,093 Total Gross Uses 78,742,221 42,624,507 466,994 119,832,257 24,821,648 1,168,105 267,655,732 Surplus / (Shortfall) (13,728,213) (12,316,359) - (30,491,676) (1,110,515) - (57,646,763) Projected Fund / Cash Balance 6/30/2024 24,740,428 39,494,303 325,000 56,792,666 4,458,165 125,810,562 Projected Fund / Cash Balance 6/30/2025 11,012,216 27,177,944 325,000 26,300,990 3,347,650 - 68,163,800 Less Restricted Fund / Cash Balances 8,140,392 - 85,000 (6,587,524) 302,819 - 1,940,687 Total Available Funds 6/30/2025 2,871,824 27,177,944 240,000 32,888,514 3,044,831 - 66,223,113
FUND ANALYSIS SUMMARY
Budget By Fund
Budget by Expenditure Type
General Fund
General Fund Revenues
Historical Increases GF Revenues
General Fund Revenues
Department
Actuals
FY 2023
FY 2024
Bugdet
FY 24
Projection FY 25 Budget
Revenues:
Property Tax 13,530,558 14,188,665 14,255,398 14,797,577 Sales Tax-General 14,817,434 14,020,907 14,023,852 14,974,566 Hotel Room Tax 1,536,839 1,500,000 1,804,252 1,600,000
Utility User Tax 4,358,302 4,268,320 4,268,320 4,400,000 Transfers In 4,122,071 4,423,954 3,993,020 4,264,868
Measure R 344,323 5,205,309 5,205,309 5,518,000
Total Revenues 38,709,527 43,607,155 43,550,151 45,555,011 CDD 1,740,264 2,116,800 2,116,800 2,355,600
Police 1,271,080 1,597,100 1,437,921 1,707,297
Fire 793,626 509,592 450,157 509,592
PW 64,075 287,000 46,347 522,742
PCS 617,301 957,066 696,454 960,363
Other 14,497,683 9,246,926 9,238,478 8,981,717
Total GF Revenue 57,693,557 58,321,639 57,536,309 60,592,322
General Fund by
Department
General Fund Expenditures
Expenditutres
Actuals
FY 2023
FY 2024
Bugdet
FY 24
Projection FY 25 Budget
City Council 82,884 121,513 102,417 296,825
City Manager 1,862,370 1,975,335 1,884,045 1,861,960
City Clerk 883,076 797,948 703,087 1,800,667
Community Develop 3,119,652 3,096,837 3,096,837 3,229,808 Finance 1,518,037 1,822,539 1,556,073 1,898,810
Human Resources 818,498 877,447 868,563 935,927
Social Services 237,398 279,415 267,334 279,415
Parks & Community 5,402,103 6,035,860 5,405,208 6,009,647 Fire 8,784,112 8,720,387 9,279,412 9,239,593
Library 541,684 578,164 578,164 624,584
Non-Department 8,470,645 3,831,117 3,129,474 2,904,728
Police 20,597,580 22,551,283 22,768,455 24,001,089
Public Works 1,665,179 2,325,954 1,805,039 2,204,423
Measure R - 5,467,200 902,150 3,177,041
Total Depts 53,983,219 58,481,000 52,346,259 58,464,517 Page 463 of 486 Measure R Budget
Legal Challenge by California Business
Roundtable
If successful, this would Impact
Measure R, because the
measure is looking back to
January 1, 2022, and the
measure passed by the voters
achieving a simple majority as is
the current requirement.
If passed, then the measure
would need to be re-voted on
and instead of needing a
majority of the vote, voters would
require 2/3 of the votes or 66%
We believe that the voters would
reapprove the new tax measure.
The Legislature has also placed
its own Measure to counteract
this measure, which would
require the measure itself to get
two-thirds voter approval rather
than current simple majority.
The threat of losing this revenue
kept us from issuing bonds for
Ramsay construction project,
City Plaza and the Rolling Hills
use agreement.
It has also given us pause in our
next year budget –we have not
budgeted any new personnel in
this Measure as it may lead to a
layoff if we lose the funding
source.
Budget Savings for a Balanced
Budget
Budget Whole to Solve For
Increased Costs 2,343,673
Minus: Increased Revenue (812,355)
Over budget amount 1,531,318
Key Items to Balance Operational Budget
*Keep Several Vacant Positions Unfilled Until Mid
Year
*Continue funding 4 positions with ARPA Funds for
entire fiscal year
*Elimination of 2 positions that were created at mid
year that remained unfilled
Council Request for Information
Summary of Costs
Parks - Clean restrooms often 108,000.00 Clean more two times per day Parks - Clean restrooms often 54,000.00 Clean more one time per day CDD - Code Enforcement Officers 219,594.00 Add 2 code enforcement officers 273,594.00
Capital
Improvement
Program
FUND NAME 2024/25 2025/26 2026/27 2027/28 2028/29
GENERAL FUND 1,857,220 9,228,000 7,905,000 4,327,400 4,835,000 MEASURE R 2,352,600 3,300,000 900,000 1,000,000 1,100,000 TOTAL GENERAL FUND 4,209,820 12,528,000 8,805,000 5,327,400 5,935,000
SPECIAL REVENUE FUNDS
CDBG 560,000 - - - -
CIVIC CENTER 289,000 75,000 75,000 75,000 75,000
LIBRARY 280,000
GRANTS 642,000 10,541,000 6,863,000
CANNABIS 35,000 - - - -
GAS TAX 555,000 555,000 555,000 555,000 555,000
SB1 1,325,000 1,325,000 1,325,000 1,325,000 1,325,000
MEASURE Y 875,000 1,868,000 895,000 725,000 1,085,000
MEASURE D 1,290,870 1,214,000 1,214,000 1,214,000 1,214,000 UNDERGROUND UTILITY 250,000 - - 350,000 -
STORM DRAIN 400,000 70,000 2,000,000 - -
CITY-WIDE TRAFFIC 900,000 - - -
MANABE OW IMPACT FEE 190,000
TOTAL SPECIAL REVENUE FUNDS 6,501,870 16,738,000 12,927,000 4,244,000 4,254,000
ENTERPRISE FUNDS
AIRPORT 239,000 878,000 345,000 1,437,000 2,470,500
WASTEWATER 12,934,243 26,360,408 14,725,900 1,989,454 450,000 WATER 10,263,374 21,939,070 19,035,743 30,906,045 21,873,996 SOLID WASTE 1,251,000 745,808 931,738 1,319,502 928,949 INFORMATION TECHNOLOGY 330,000 - - - -
TOTAL ENTERPRISE FUNDS 25,017,617 49,923,286 35,038,381 35,652,001 25,723,445 TOTAL 35,729,307 79,189,286 56,770,381 45,223,401 35,912,445 FY 24/25 through FY 28/29
Top 6 Funding CIP New
Projects
Main Switchgear
and Energy
Recovery Electrical
System
Provides backup power and emergency
backup power to call equipment at
Wastewater Treatment Plant.
Street Improvements Green Valley Road
and Bridge Street
City Crews replace 1.75 miles of Existing
Water Mains
Ramsay Park Renaissance kick off
Nature Center
Other Funds
Other Funds
Enterprise Funds
Solid Waste Commercial
Contamination Fee
Hydrant Meter
Deposit & Refund
Upon Return of
Hydrant Meter
The Water Division is requesting an adjustment to the
hydrant meter deposit and refund upon return of hydrant meter in satisfactory condition, both in the amount of
$4,782.77. The new rates will reflect the actual costs (See Figure 1) to build and replace a hydrant meter (assembly) if it is lost, stolen, or added to awaiting inventory. This request should not be affected by Proposition 218 as it does not exceed the cost of the government to provide the service and is a deposit fee that is returned to a
customer/account holder upon the return of a hydrant
meter in satisfactory condition.
Current Risks/Considerations
*Potentially Volatile General Fund
Revenues
*UAL Payments projected to increase
*Currently working on Class and
Compensation Study for all bargaining
groups
*Overtime Costs for Fire and Police
Pers Unfunded Liability (UAL)
Public Safety Overtime
Opportunities
Opportunities
Questions
• Marissa Duran, Finance Director
• 831-768-3471
• [email protected]
• watsonville.gov/DocumentCenter/View/23447/Budget-FY-24-25- DraftPage 486 of 486