FROM:
Finance
SUBJECT:
Title
Fiscal Year 2024-25 Fourth Quarter Budget Status Report
End
RECOMMENDATION:
Recommendation
Approve the recommended Fiscal Year 2024-25 Fourth 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 Fourth Quarter of Fiscal Year 2024-25, covering the period through June 30, 2025.
The current citywide Fiscal Year 2024-25 budget is comprised of a total of 202 funds including the General Fund, Other General Funds (10 funds), Special Revenue Funds (135 funds), Enterprise Funds (5 funds), Capital Project Funds (38 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 $688.1 million and total sources (revenues and transfers in) of $571.7 million. The Recommended Budget includes an increase in total sources of $36.4 million for a total of $608.1 million and an increase in total uses of $29.3 million for a total of $717.4 million.
2024-25 Budget
All City Fund
GENERAL FUND
The current Fiscal Year 2024-25 General Fund Operating Budget includes total uses of $183.8 million and total sources of $170.7 million. The Recommended Budget includes an increase in total sources of $10.3 million for a total of $181.0 million and an increase in total uses of $6.2 million for a total of $190.0 million.
2024-25 Budget
General Fund (Fund 101)
Notable Changes
• Revenue Adjustments - a net increase in revenues of $10.3 million primarily due to updated revenue TUT forecasts.
• One-time Requests - Increase appropriations in various operating accounts of $6.2 million to fund one-time expenditures. Notable requests include:
o Increase in Transfers Out of $5.2 million for forecasted Use Tax revenues to the infrastructure and equipment fund (Fund 604).
o Increase in one-time expenditures of $1.0 million to fund FY25-26 one-time departmental operating requests.
Fund Balance Analysis
The recommended 2024-25 ending fund balance of $55.8 million reflects an increase of $4.2 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 Unappropriated 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 $45.5 million and total sources of $43.1 million. The Recommended Budget includes an increase in total sources of $10.0 million for a total of $53.1 million.
2024-25 Budget
Other General Funds
Notable Changes
• Self-Insurance - Increase Transfers In by $10.0 million to fund reserves for workers compensation and risk liability.
OTHER CITY FUNDS
Other City Funds includes a total of 181 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 $458.7 million and total sources of $375.9 million. The Recommended Budget includes an increase in total sources of $16.1 million for a total of $374.0 million and an increase in total uses of $23.1 million for a total of $481.9 million.
2024-25 Budget
Other City Funds
Notable Changes
• Special Revenue Funds - decrease in uses of $542,901, an increase in sources of $2.2 million, resulting in an increase in fund balance of $2.8 million primarily due to:
o Measure I (Local) - decrease in appropriations of $379,681 for various capital improvement project close outs and defunding.
o Road Maintenance & Rehab - decrease in appropriations of $151,654 due to a project close out and an increase in revenues of $2.2 million due to receipts to date.
• Capital Project Funds - increase in uses of $23.5 million and sources of $14.7 million primarily due to:
o Capital Reinvestment (Fund 601) - increase in uses of $1.7 million due to numerous requests for various projects most notably:
• Reversing FY24-25 Q3 loan transfer to Stage Red Fund #720 ($1.0 million) to accurately record the transaction as an advance
• Jurupa Ave. Landscape Median completion (-$149,417)
• Randall Ave Improvements completion (-$346,578)
• Southridge Pavement Rehab (Grid 53) completion (-$126,422)
o Future Capital Projects (Fund 603) - increase in uses of $14.1 million due to the following:
• Transfer Out to Fund #106 for workers compensation and general liability reserves ($10.0 million)
• Transfer Out to Fund #630 to remove advance obligation ($4.1 million)
o Capital Project - Use Tax (Fund 604) - increase in sources of $5.2 million due to Transfer In from General Fund #101
o Circulation Mitigation (Fund 630) - increase in uses of $2.9 million and an increase in sources of $7.1 million primarily due to:
• Transfers In from Fund #630 to remove advance obligations ($4.1 million)
• Increase in Transfers In and appropriations from Funds #672, 676 for developer reimbursement charges.
o Parks Development (Fund 635) - increase in transfers in and appropriations of $1.4M from Funds #672, 676 for development reimbursement charges.
o CFD Capital Funds - increase of uses of $6.43 million primarily due to Transfers out/contributions for developer reimbursement charges, cost of issuance charges, and bond defeasance charges.
• Enterprise Funds - increase in uses of $160,611 and decrease in sources of $839,389 primarily due to a Transfer In/appropriation from Funds #672, 676 for developer reimbursement charges and reversing the $1.0 million Stage Red loan from Fund #601.
FISCAL IMPACT:
The fiscal impact associated with this item is summarized below and details are provided in Fourth Quarter Budget Status Report.
The General Fund projected ending fund balance reflects an increase of $4.2 million to a total of $55.3 million due to the net impact of the recommended budget adjustments.
MOTION:
Approve staff recommendation.