FROM:
Finance
SUBJECT:
Title
Fiscal Year 2024-25 Midyear Budget Status Report
End
RECOMMENDATION:
Recommendation
Approve the recommended Fiscal Year 2024-25 Midyear Budget adjustments and organizational changes.
End
COUNCIL GOALS:
• Operate in a businesslike manner by ensuring that the public debate is based on accurate information.
• Practice sound fiscal management by producing timely and accurate financial information.
• Practice sound fiscal management by living within our means while investing in the future.
• Practice sound fiscal management by fully funding liabilities and reserves.
• Practice sound fiscal management by developing long-term funding and debt management plans.
• Invest in the City’s infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.
• Invest in the City’s infrastructure (streets, sewers, parks, etc.) by providing for the development of new infrastructure.
• Invest in the City’s infrastructure (streets, sewers, parks, etc.) by utilizing Measure-I Funds wisely.
DISCUSSION:
The City’s budget is an important policy document, serving as the annual financial plan that identifies the spending priorities for the organization. Quarterly budget status reports are developed and presented to the City Council to provide the most current information on the financial activities of the City upon which to base decisions. Additionally, quarterly reports assist City departments in communicating their financial operations throughout the fiscal year including any program changes and significant impacts to their annual budgets, as well as gauging the City’s budget plan as compared to actual revenue and expenditures. This report includes requested departmental budget adjustments and preliminary year-to-date actuals through Midyear of Fiscal Year 2024-25, covering the period through December 31, 2024.
The current citywide Fiscal Year 2024-25 budget is comprised of a total of 200 funds including the General Fund, Other General Funds (10 funds), Special Revenue Funds (135 funds), Enterprise Funds (5 funds), Capital Project Funds (36 funds), a Debt Service Fund, an Internal Service Fund, and Other Agency Funds (11 funds). The current total citywide Fiscal Year 2024-25 budget (excluding other agency funds) includes total uses (expenditures and transfers out) for all City funds of $591.7 million and total sources (revenues and transfers in) of $455.5 million. The Recommended Budget includes an increase in total sources of $123.0 million for a total of $578.5 million and an increase in total uses of $74.7 million for a total of $664.3 million.
2024-25 Budget
All City Fund
GENERAL FUND
The current Fiscal Year 2024-25 General Fund Operating Budget includes total uses of $173.9 million and total sources of $169.4 million. The Recommended Budget includes an increase in total sources of $461,009 for a total of $169.9 million and an increase in total uses of $10.1 million for a total of $184.1 million.
2024-25 Budget
General Fund (Fund 101)
Notable Changes
• Revenue Adjustments - a increase in revenues of $461,009 primarily due to an increase in revenue from the County of San Bernardino to support PATH operations.
• Personnel Requests (one-time) - an increase in appropriations of $597,845 due to one-time bonuses as a result of labor negotiations.
• Personnel Requests (recurring) - a increase in appropriations of $1.5 million primarily due to the costs associated with:
o The addition of new positions ($175,179) as detailed below for the remainder of the fiscal year.
o Labor negotiations ($1.3 million) including market adjustments and cost of living increases.
• One-time Requests - Increase appropriations in various operating accounts of $6.8 million to fund one-time expenditures and operating transfers out. Notable requests include:
o Increase in Transfers Out of $6.8 million to fund anticipated litigation settlements ($4.0 million) and various capital projects ($1.2 million), and operating expenses ($582,550) for Village of Heritage.
o Increase in Other Professional Services of $380,000 due to the costs associated with the 2024 election.
o These increases are offset by an increase in Intrafund Transfers of $2.0 million to leveraged ARPA projects.
• Recurring Requests - Increase appropriations in various operating accounts of $1.3 million to fund various operating expenses. Notable requests include an increase in Other Professional Services of $1.2 million primarily to fund the operations of The PATH ($685,600) for the remainder of the fiscal year, a pool maintenance contract ($191,000), and emergency guardrail replacements ($100,000).
Fund Balance Analysis
The recommended 2024-25 ending fund balance of $50.6 million reflects an decrease of $8.1 million. Included in the fund balance of are total operating reserves of $35.9 million (which reflects 25% of recurring annual expenditures).
The recommended ending fund balance reserves and designations reflect a decrease in Future Projects and Reserves to fund various requests.
2024-25 Budget
General Fund Balance
OTHER GENERAL FUNDS
Other General Funds includes a total of 10 funds which are funded by the General Fund for services that support the City’s general operations. The most notable funds include City Technology, Facility Maintenance, Self-Insurance, Retiree Medical Benefits, and General Fund Operating Projects.
The current 2024-25 Other General Funds Operating Budget includes total uses of $37.0 million and total sources of $38.2 million. The Recommended Budget includes an increase in total sources of $4.7 million for a total of $42.97 million and an increase in total uses of $10.0 million for a total of $47.0 million.
2024-25 Budget
Other General Funds
Notable Changes
• Self-Insurance - Increase appropriations and transfers in of $4.0 million primarily to fund the cost of litigation costs and settlements.
• Lease-Fire - Increase in transfers out of $5.7 million primarily to fund various capital expenditures and an increase in revenues of $647,943 due to increases in annual lease revenue from the Fontana Fire Protection District.
OTHER CITY FUNDS
Other City Funds includes a total of 178 funds which Special Revenue Funds, Debt Service Funds, Capital Project Funds, Enterprise Funds, and Internal Service Funds.
The current 2024-25 Other City Funds Operating Budget includes total uses of $380.7 million and total sources of $247.8 million. The Recommended Budget includes an increase in total sources of $117.9 million for a total of $365.7 million and an increase in total uses of $54.5 million for a total of $435.2 million.
2024-25 Budget
Other City Funds
Notable Changes
• Special Revenue Funds - Increase in uses of $7.7 million, an increase in sources of $21.8 million, resulting in an increase in fund balance of $14.1 million primarily due to:
o Opioid Settlement - increase in appropriations of $898,088 and revenues of $630,337 to recognize actual revenue received and to fund a contract with Symba Center for Mobile Opioid Outreach Services.
o Measure I (Local) - increase in appropriations of $1.8 million for various capital improvement projects.
o Grants - increase in uses of $4.7 million and an increase in revenues of $6.5 million to account for actual receipts in various grant programs.
o ARPA - decrease in appropriations of $1.7 million and an increase in revenue of $12.4 million to finalize budgets for various ARPA projects.
o Community Facilities District (CFD) - increase in appropriations of $1.6 million and an increase in transfers in of $592,550 for various operational expenses, maintenance, and capital projects. Adjustments requested on behalf of 47 CFD’s.
• Capital Project Funds - increase in uses of $46.1 million and sources of $95.9 million primarily due to:
o Capital Reinvestment (Fund 601) - increase in sources of $7.2 million and increase appropriations of $17.2 million due to numerous requests for various projects most notably:
• Citywide storm drain repairs ($1.2 million)
• Park improvements ($1.1 million)
• City Hall renovations ($1.1 million)
• Courtplace project ($2.5 million)
• Downtown West Parking Structure ($8.5 million)
• Restaurant improvements ($3.3 million)
• EOC and Police Evidence Storage ($1.0 million)
• Sierra Riverside Traffic Signal project ($2.0 million)
• Defunding of Co-op Building (-$7.0 million)
o Capital Improvement (Fund 602) - increase in sources of $3.0 million and an increase in uses of $31.8 million due to the following:
• Navigation Center purchase ($12.0 million)
• Building demolitions ($600,000)
• Land acquisitions ($1.2 million)
• Aldea Adjacent Land ($4.0 million)
o CFD Capital Funds - increase in sources of $71.7 million, an increase of uses of $11.3 million including transfers out ($8.9 million) of community benefit fees to capital fund 601 for various projects.
• Enterprise Funds - Decrease in fund balance of $112,018 primarily due to an increase in appropriations for IEUA rate increases offset by a net decrease in personnel costs ($11,382) and project costs ($86,600).
• Internal Service Funds (Fleet) - Decrease in fund balance of $520,149 primarily due to an increase in personnel expense due to labor negotiations ($241,149) and an increase in vehicle and equipment costs ($385,600).
ORGANIZATIONAL CHANGES
Included in the 2024-25 Midyear Budget Status Report are organizational changes that are summarized at the departmental level below. The net impact of all requests is an increase of $231,500 ($224,780 General Fund increase and $6,720 Other Funds decrease) for the remainder of the fiscal year with a total estimated annual cost of $1.5 million.
• Innovation & Tech - General Fund increase of $47,590
o Add one (1) IT Systems Analyst
o Add one (1) IT Systems Technician
• Development Services Admin - General Fund increase of $53,730
o Add one (1) Administrative Analyst I
o Add one (1) Management Analyst II
• Public Works & Engineering - General Fund increase of $47,500; Other Funds decrease of $6,720
o Reclass one (1) Aquatics Maint. Worker to Senior Aquatics Maint. Worker
o Add one (2) Sr. PW Maintenance Worker
o Add four (4) Part-time Maintenance Assistant
o Eliminate one (1) Part-time Intern II
o Eliminate one (1) Part-time GIS Intern II
o Add one (1) Engineering Technician II
o Add one (1) Associate Engineer
o Reclass one (1) Assistant Engineer to Associate Engineer
• Police - General Fund increase of $75,960
o Add two (2) Police Dispatcher II
o Add two (2) Police Record Specialist II
FISCAL IMPACT:
The fiscal impact associated with this item is summarized below and details are provided in Midyear Budget Status Report.
The General Fund projected ending fund balance reflects a net decrease of $9.7 million to a total of $50.3 million due to the net impact of the recommended budget adjustments.
MOTION:
Approve staff recommendation.