To: Honorable Mayor and Members of City Council
From: Rajneil Prasad, Finance Director
Prepared By: Seth Anderson, Budget Officer
TITLE:
Title
Fiscal Year 2024/25 Mid-Year Report
LABEL
RECOMMENDED ACTION:
Recommendation
Adopt a resolution amending the City Staffing Plan; amending the City Capital improvement Project Plan, and approving revenue and expenditure budget updates to the FY 2024/25 Adopted Budget, as documented in Council Budget Amendment 130P9 as part of the FY 2024/25 Mid-Year Report.
Body
DISCUSSION:
The attached document is the City’s Mid-Year Report for Fiscal Year 2024/25, which provides an overview of the first portion of the fiscal year (July 2024 through January 2025). The report includes a financial section which provides preliminary information on General Fund and proprietary fund revenue and expenditures through January 31, 2025. The report compares revenue sources and department expenditures to the budgeted amounts for each category. An analysis of each of the three major revenues categories (property tax, sales tax, and transient occupancy tax) and information related to the commencement of Measure G Sales and Use tax revenue is provided. Information about national, state and local economic indicators and concerns is also provided.
At this time staff is projecting that General Fund revenue will be higher than budgeted, and budget adjustments are recommended to increase both revenue and expenditure budgets. There are also adjustments recommended for other City funds, primarily to align expenditure budgets with existing activity.
Staffing Plan Changes:
• Police: Delete 1 Secretary (-1 FTE). Deletion is for a vacant position that was not included with adoption of Mid-Cycle Budget as intended.
• Utilities: Delete 1 Water Distribution Operator Lead, Add 1 Water Distribution Supervisor (0 FTE)
• Public Works: Delete 1 Electrician I/II, Add 1 Engineering Assistant (Traffic), Reallocate 1 Engineering Aide Flex from Development Engineering to Construction (0 FTE)
• City Clerk: Delete 1 Imaging Clerk, Add 1 Office Assistant I/II (0 FTE)
The report also includes recommended CIP project changes for Parks and Public Works:
• Playground Equipment Replacement (33PK18PR07) - This funding allocation will ensure project delivery for the Fuller Park Playable Art Project. The preliminary project budget was developed to cover limited site preparation, the playable art structures, and any minor small-scale equipment. However, as per the Administrative Staff Report (ASR) on February 18, 2025, the full project costs will exceed the preliminary budget given several factors including site preparations necessary to conform to the Geotechnical Report, and to incorporate several project enhancements including multiple shade covers, additional play features, and inclusive/universal play opportunities requested by the community during project outreach.
• Park Shade Structures Project (33PK25PR01) - This project will install overhead shade canopies and improve associated improvements in various community gathering spaces. This will address a major community request from the 2024 Community Survey while addressing poor or failing amenities identified in the 2023 Parks Conditions Assessment such as picnic areas.
• Playground & Amenity Project (33PK25PR02) - This project will renovate multiple park sites that were categorized in poor or failing condition during the 2023 park conditions assessment including Esther Deaver Park, Solomon Park, and Monarch Park. The scope will include demolition, and clearing of existing playground equipment and park features, and the design, layout and installation of new playground equipment and park features, safety surfacing and associated concrete work related to ADA improvements.
• Westwood Rehab Interior (33ST22PW05) - This project includes the design and construction of curb, gutter, and full street reconstruction in the Westwood Neighborhood. It will also include new sidewalks on one side of each street. The design for this project is nearing completion and will be ready to put out to bid to hire a contractor to begin construction this year. This is a very large project, and additional funding will be necessary to be able to complete as a single construction contract. This is the first recommended funding to close part of the funding gap. If additional funding is not available, this project will be phased to complete the work as funding does becomes available.
The Mid-Year Report is a public document that will be made available on the City’s website, in the City Clerk’s Office and at the Finance Department.
FINANCIAL IMPACTS:
The Council Budget Amendment will increase Citywide revenue budgets by $20.1 million and Citywide expenditure budgets by $19.4 million - including transfers in and out. In the General Fund, revenue budgets will increase by $2.0 million due to increased revenue expectations, and expenditures budgets will increase by $7.2 million, including transfers out to other funds and required contributions to reserves per fiscal policy. $5.3 million of FY 2023/24’s fund balance will be utilized for expenditures in excess of the FY 2024/25’s recommended revenue budget increases.
The recommended General Fund Revenue increases were developed through a careful analysis of actual data up to January 31, 2025, along with historical and economic trends, and in close collaboration with departments and experts.
The recommended increases in General Fund expenditure budget are primarily to address a lower-than expected vacancy rate, an additional contribution to the Section 115 Trust made possible by a projected operating surplus, required reserve contributions in accordance with fiscal policy, and the impacts of newly adopted labor MOUs and updated labor costing census data.
Additionally, usage of FY 2023/24’s ending fund balance ($5.3 million) was presented to City Council in February 2025. The related increases to FY 2024/25’s expenditure budget are recommended to reverse the Section 115 Trust contribution used to balance the budget, city-wide utility increases, homeless services and vehicle code updates, playground equipment replacement, and labor MOUs implementation.
CEQA:
The Public Works Director has determined that the Recommended Action described in this Agenda Report is not in-and-of-itself a “project” (pursuant to CEQA Guidelines Section 15378) since it does not result in a physical change in the environment.
However, the Recommended Action is a part of a larger “project” that will be subject to environmental review in accordance with CEQA at the “earliest feasible time” prior to “approval” consistent with CEQA Guidelines Sections 15004 and 15352. The larger “project” is future Capital Improvement Projects, and staff plans to bring back a CEQA analysis of each project to Council prior to approval of each project.
DOCUMENTS ATTACHED:
ATCH 1 - Resolution
EX A - Council Budget Amendment No 130P9
ATCH 2 - Mid-Year Report, Fiscal Year 2024/25
NOTIFICATION:
None.