MEETING DATE:
FEBRUARY 11, 2025
SUBJECT:
Title
RESOLUTION NO. 2025-9406 - APPROVING THE MID-YEAR ADJUSTMENTS TO AMEND THE FISCAL YEAR 2024-25 BUDGET
Body
Recommendation
Recommendation
ADOPT a resolution approving the recommended Mid-Year adjustments to amend the Fiscal Year 2024-25 Budget.
Body
Board or Commission Action
Not Applicable
Relevant Council Strategic Theme
Good Governance
Relevant Department Goal
Not Applicable
Executive Summary
The purpose of the Fiscal Year 2024-25 Mid-Year Budget Amendment is to adjust the adopted budget for unanticipated revenue and expense items that may occur within the current fiscal year. At this time, staff has identified expenditure and revenue adjustments that are needed prior to the end of Fiscal Year 2024-25. Therefore, staff is submitting a mid-year budget amendment for City Council review and approval.
Discussion
After the June 11, 2024 City Council adoption of the budget, each department has the operational flexibility to reallocate appropriations within specified budgeted line-items, but cannot exceed the overall appropriation level as approved by the City Council without approval. The adopted Fiscal Year 2024-25 budget was balanced and at this time, Staff has identified additional expenditure and revenue adjustments that are needed prior to the end of Fiscal Year 2024-25 that have a net positive impact. While the anticipated ending budget is balanced, adjustments will be needed to the adopted revenue and expenditure budgets adjustments to ensure departments have sufficient appropriation approved by the City Council, per City fiscal policy.
Staff worked to carefully identify potential areas where expenditures could be reduced by either changing how staff performed their business or by reorganizing budgeted activities while maintaining necessary services and activities. Therefore, the unanticipated General Fund expenditure requests increase the overall expenditure budget by only $460,606 or approximately .5% of the approved FY 2024-25 General Fund budget (not including carryovers and amendments). The unanticipated General Fund revenue requests increase revenue projections by $471,959, or about .5% of the approved FY2024-25 General Fund Revenue Budget. A majority of the revenue adjustments are service-related revenue increases related to fire deployments to incidents in the region, as well County Redevelopment Property Tax Trust Fund residual revenue and an increase in Transient Occupancy Tax revenue due to the opening of a hotel within the City. While the City saw an increase in these categories, the City also anticipates a $1.3M reduction in general Bradley-Burns sales tax revenue mainly due to a decrease in gasoline sales as well as reduced demand for home improvement projects and furnishings.
In addition to the proposed budget amendments to the General Fund, expense and revenue adjustments are also being proposed to Special Revenue Funds (Fund 2XX), Capital Improvement Project Funds (Fund 4XX), Fiduciary Fund (Fund 560), Creekside Enterprise Fund (Fund 601), Real Property Management Enterprise Fund (Fund 605), and Internal Service Funds (Fund 602, Fund 603, and Fund 604). The net budgetary impact of the proposed adjustments for Special Revenue Funds (Fund 2XX) is a decrease of $7,877,649 in expenditures, due mostly to expenditure decrease in Fund 205 as a result from an anticipated low-income housing development funding need that the developer has funded through other sources. Other non-General Fund adjustments include the Public Facility Fee Fund (Fund 402), Transnet Revenue Fund (Fund 404), RTCIP fund (Fund 408) and the Redevelopment Property Tax Trust Fund (Fund 560) with a total net increase of $2,840,194 resulting from lower anticipated revenue mainly due to adjustments in project timelines or state projections.
The net expense increase for Internal Service Funds (Fund 602, Fund 603, and Fund 604) is $1,592,759. This increase is primarily due to the purchase of two type 2 fire engines, which are currently 1 year behind the target purchase date, as well as other ongoing projects funded by Infrastructure Funds. The net expense increase for Creekside Enterprise Fund (Fund 601) is $1,558,816, which will be used to fund final Pad M construction expenses as well as parking lot repairs. The net expense increase for Real Property Management Enterprise Fund (Fund 605) is $946,293, which will be used to fund EV Charger installation at City Hall and water intrusion repairs at the Safety Center lot. The net expense decrease for the Capital Improvement Program budget is $788,677 mostly related to the Rancho Santa Fe Pavement Restoration project (ST014) coming in under the originally appropriated budget.
Some services identified as eligible for Measure Q anticipated FY 2024-25 funds are requested to be appropriated in the new Measure Q fund (Fund 606). These services align with the categories noted on the ballot initiative approved by voters, which include repairing and maintaining aging infrastructure, providing fire and paramedic protection, cleaning and maintaining City parks and facilities, fixing potholes and maintaining city streets, improving roads, intersections, and bike lanes, and keeping trash and pollution out of local waterways. Eligible maintenance services, deferred infrastructure projects, and police and fire protection services totaling $2,647,724 are requested to be appropriated into Fund 606, with the remaining $2,334,276 Measure Q revenue anticipated to be transferred to replacement/rehabilitation funds 602, 603, and 604.
In summary, the proposed budget modifications to the approved General Fund budgeted expenditures will increase the expense budget by $460,606 and increase the revenue budget by $471,9959, resulting in an anticipated FY 2024-25 General Fund net budgetary surplus of $11,353. The proposed budget modifications will result in a net budget decrease of $939,587 for non-general funds, and a balanced budget for Measure Q fund 606. Finally, the Capital Improvement Program Budget will decrease by $788,677.
A detailed list of all of the requested budget adjustments, classified by fund, is attached in Exhibit A.
Environmental Review
There is no environmental impact due to this recommendation.
Fiscal Impact
Approval of the Fiscal Year 2024-25 requested mid-year budget amendments will result in a projected budgetary surplus of $11,353 to the General Fund, a net decrease in budget of $939,587 to non-General Funds, and a balanced budget for Measure Q fund 606. This action will also result in a net decrease in expenditures of $788,677 to the Capital Improvement Program Budget
Attachment(s)
Attachment 1 - Amended Budget Resolution
Attachment 2 - Exhibit A: Fiscal Year 2024-25 Mid-Year Budget Amendments
Prepared by: Janet Brotherton, Sr. Management Analyst
Submitted by: Janet Brotherton, Sr. Management Analyst
Reviewed by: Donna Apar, Finance Director
Approved by: Michelle Bender, City Manager