FROM:
Finance
SUBJECT:
Title
Fiscal Year 2024-25 Third Quarter Budget Status Report
End
RECOMMENDATION:
Recommendation
Approve the recommended Fiscal Year 2024-25 Third Quarter 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 Third Quarter of Fiscal Year 2024-25, covering the period through March 31, 2025.
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 $666.3 million and total sources (revenues and transfers in) of $578.5 million. The Recommended Budget includes a decrease in total sources of $6.8 million for a total of $571.7 million and an increase in total uses of $21.8 million for a total of $688.1 million.
2024-25 Budget
All City Fund
GENERAL FUND
The current Fiscal Year 2024-25 General Fund Operating Budget includes total uses of $184.1 million and total sources of $169.9 million. The Recommended Budget includes an increase in total sources of $830,121 for a total of $170.7 million and an increase in total uses of $232,415 for a total of $183.8 million.
2024-25 Budget
General Fund (Fund 101)
Notable Changes
• Revenue Adjustments - a net increase in revenues of $770,312 primarily due to an increase of $1.0 million of investment income to reflect receipts to date offset by the transfer of $400,000 to properly record County grant funding in the Grants Fund (Fund 301).
• One-time Requests - a net decrease in appropriations of $381,565 primarily due to:
o Net decrease in Other Professional Services of $401,565 due to the transfer of budget in the amount of $500,000 to properly record expenditures in the Grant Fund (Fund 301) for the County’s contribution to the Homelessness Prevention, Resources, and Care Center, offset by an increase $40,685 for dta CFD analysis services, and $57,750 for PE Trail lighting replacement.
o Offset by an increase in Lease Expense of $20,000 for Metrolink Transit Center surveillance systems.
Fund Balance Analysis
The recommended 2024-25 ending fund balance of $51.6 million reflects an increase of $1.1 million. Included in the fund balance are total operating reserves of $35.9 million (which reflects 25% of recurring annual expenditures).
The recommended ending fund balance reserves and designations reflect an increase in Reserved amounts and the PERS Rate Stability reserves.
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 $47.0 million and total sources of $42.9 million. The Recommended Budget includes an increase in total sources of $124,294 for a total of $43.1 million and a decrease in total uses of $1.5 million for a total of $45.5 million.
2024-25 Budget
Other General Funds
Notable Changes
• Self-Insurance - Decrease appropriations of $2.4 million based upon anticipated needs for 2024-25 and increasing the fund balance reserves.
• Supplemental Retirement - Increase appropriations of $805,620 for UAL pre-funding per fund balance policy.
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 an Internal Service Fund.
The current 2024-25 Other City Funds Operating Budget includes total uses of $435.2 million and total sources of $365.2 million. The Recommended Budget includes an decrease in total sources of $7.8 million for a total of $357.9 million and an increase in total uses of $23.5 million for a total of $458.7 million.
2024-25 Budget
Other City Funds
Notable Changes
• Special Revenue Funds - Increase in uses of $2.0 million, an decrease in sources of $9.8 million, resulting in an increase in fund balance of $11.9 million primarily due to:
o Measure I (Local) - decrease in appropriations of $438,815 for various capital improvement project close outs and defunding.
o ARPA - decrease in revenues of $12.4 million to update report with accurate project carryover amount.
o State COPS Grant - increase revenues for update grant amount.
o Community Facilities DistrictS (CFD) - increase in appropriations of $178,122 for various operational expenses, maintenance, and capital projects. Adjustments requested on behalf of 3 CFD’s.
• Capital Project Funds - increase in uses of $20.4 million and sources of $931,450 primarily due to:
o Capital Reinvestment (Fund 601) - increase in sources of $306,959 and increase appropriations of $559,438 due to numerous requests for various projects most notably:
• ERP System Replacement completion (-$360,102)
• Loan to Stage Red Fund #720 ($1.0 million)
• Septic to Sewer Conversion ($108,000)
• Spring St. Improvement completion (-$493,419)
o Capital Improvement (Fund 602) - increase in sources of $624,491 and an increase in uses of $ 624,590 due to the following:
• Vacant land sale and purchase ($620k)
• Transfer to Fund #602 for 11109 Jasmin St. purchase ($306,959)
o Parks Development (Fund 635) - decrease in appropriations of $253,250 for South Fontana Sports Park completion.
o CFD Capital Funds -increase of uses of $19.6 million for construction reimbursement and cost of issuance charges.
• Enterprise Funds - increase in uses of $1.1 million and sources of $1.1 million primarily due to $1.0 million Stage Red loan from Fund #601 and the $100,000 SB County Stage Red Local Arts Events Contribution.
FISCAL IMPACT:
The fiscal impact associated with this item is summarized below and details are provided in Third Quarter Budget Status Report.
The General Fund projected ending fund balance reflects an increase of $1.1 million to a total of $51.6 million due to the net impact of the recommended budget adjustments.
MOTION:
Approve staff recommendation.