MEETING DATE:
FEBRUARY 13, 2024
SUBJECT:
Title
RESOLUTION NO. 2024-9263 - APPROVING THE MID-YEAR ADJUSTMENTS TO AMEND THE FISCAL YEAR 2023-24 BUDGET
Body
Recommendation
Recommendation
ADOPT a resolution approving the recommended Mid-Year adjustments to amend the Fiscal Year 2023-24 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 2023-24 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 2023-24. Therefore, staff is submitting a mid-year budget amendment for City Council review and approval.
Discussion
After the June 13, 2023 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 2023-24 budget included an adopted deficit of $3,824,001, which staff has been working diligently to reduce via expenditure reductions or revenue increases. At this time, Staff has identified additional expenditure and revenue adjustments that are needed prior to the end of Fiscal Year 2023-24 that have an impact of reducing the adopted deficit by $1,396,696, which will require an adjustment to the original budget appropriation approved by the City Council.
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 $25,164 or approximately .03% of the approved FY 2023-24 General Fund budget (not including carryovers and amendments). Significant expense reductions were recognized in part-time and overtime costs, as well as a one-time reduction in the CalPERS Unfunded Accrued Liability (UAL) payment for the Fiscal Year 2023-2024 period. However, expenditure appropriation increases were needed to maintain levels of safety and cleanliness in public parks, as well as due to rising utility costs leading to an overall small net increase.
The unanticipated General Fund revenue requests increases revenue projections by $1,421,860. A majority of the revenue adjustments are service-related revenue increases and franchise fee increases, while a projected decrease is anticipated for sales tax revenue.
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), 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 an increase of $362,054 in expenditures, due mostly to expenditure increase for lighting and landscaping maintenance. The net impact is an expense increase for Infrastructure Funds (Fund 602, Fund 603, and Fund 604) is $266,000. This includes funding to complete work for the reconfiguration of the Development Services area of the City Hall first floor, permitting software which is partially offset by revenue, and a decrease to Public Works white fleet costs. The net expense increase for Real Property Management Enterprise Fund (Fund 605) is $45,000, which will be used to fund parking lot repairs at the Safety Center.
In summary, the proposed budget modifications to the approved General Fund budgeted expenditures will increase the expense budget by $25,164 and increase the revenue budget by $1,421,860, resulting in a net deficit reduction of $1,396,696 to the FY 2023-24 General Fund budget. The proposed budget modifications will result in a net budget increase of $673,054 for all non-General Funds. Finally, the Capital Improvement Program Budget will not be modified.
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 2023-24 requested mid-year budget amendments will result in a deficit reduction by $1,396,696 to the General Fund, and a net increase in expenditures of $673,054 to non-General Funds.
Attachment(s)
Attachment 1 - Amended Budget Resolution
Attachment 2 - Exhibit A: Fiscal Year 2023-24 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