To: Honorable Mayor and Members of City Council
From: Bill Zenoni, Interim Finance Director
Prepared By: Jessie Gooch, Budget Officer
TITLE:
Title
City of Napa Operating Budget Workshop for FY 2023/24 and FY 2024/25
LABEL
RECOMMENDED ACTION:
Recommendation
1. Provide input to staff regarding any amendments to the Proposed Budget; and
2. Provide direction to staff to schedule public hearings on June 6, 2023 and June 20, 2023 to receive public comment on the Fiscal Year 2023/24 and 2024/25 Proposed Budget.
Body
DISCUSSION:
In preparation of the adoption of the City of Napa Budget for Fiscal Year 2023/24 and 2024/25, the City holds a series of workshops with the Council and the community to discuss the City’s financial position and the City Manager’s budget recommendations. The annual City Council workshop was held on January 31, and the Capital Improvement Program (CIP) budget workshop was held on April 4. This workshop will discuss the current baseline operating budget for the General Fund and the Enterprise Funds, as well as the proposed Budget Packages for the upcoming budget cycle. On June 6th, the City will hold the first of two public hearings to discuss and adopt the final budget, which will incorporate the new CIP budgets and approved Budget Packages.
The City Council priorities discussed in the January 31st public workshop were a key consideration during development of these two one-year budgets. The Proposed Budget reflects the following City Council Priority Areas:
• General Plan Implementation
• Climate Action & Sustainability
• Housing & Homelessness
• Traffic Safety
• Public Infrastructure
The proposed General Fund baseline operating budget totals $119.17 million in Fiscal Year 2023/24 and represents a 2.8% increase in spending compared to the current Fiscal Year 2022/23 budget. The General Fund operating budget for FY 2023/24 has been balanced using $2.25 million of Excess ERAF revenue. For FY 2024/25, the General Fund baseline operating budget totals $122.66 million, an increase of 2.9%. In FY 2024/25, the budget has been balanced using $2.50 million of Excess ERAF revenue. For both fiscal years, larger increases in salaries, wages, benefits, and internal services have been offset by limiting increases to external services and materials/supplies budgets.
Budget Packages for new or changed programs and position requests for the General Fund total $1,530,270 (plus an additional reserve requirement of $351,960) for FY 2023/24, and would add $181,500 of revenue to the budget. For FY 2024/25, General Fund Budget Packages total $2,146,500, with an additional reserve requirement of $493,700 and additional revenue of $234,000. There are also budget packages for the Non-Recurring General Fund ($2,666,000 in FY 2023/24 and $500,000 net in FY 2024/25), General Liability Internal Service Fund (net $0), Equipment Replacement Reserve Fund ($320,000 in FY 2023/24), and the Water Enterprise Fund ($426,980 in FY 2023/24 and $420,180 in FY 2024/25). The baseline budgets have sufficient surplus or fund balance to accommodate the requests. The recommended budget packages will be discussed during this budget workshop.
The budget packages include the addition of 9 FTE to the Staffing Plan: 5 for the General Fund, 3 for the Enterprise Funds, and 1 Limited-Term for the General Liability Internal Service Fund. There is also 1 FTE addition/deletion for the Staffing Plan (net impact of 0 FTE), as well as 3 additional Fleet vehicles.
FINANCIAL IMPACTS:
None by this action. The purpose of the Budget Workshop is to provide the City Council with an overview of the General Fund and Enterprise Fund Baseline Budgets, a discussion of proposed budget package items, and an opportunity to request changes prior to the upcoming public hearings in June.
CEQA:
The Finance Director has determined that the Recommended Action described in this Agenda Report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060(c).
DOCUMENTS ATTACHED:
ATCH 1 - Baseline Budget for FY 2023/24 and FY 2024/25 General Fund and Enterprise Funds only
ATCH 2 - Recommended Budget Packages for FY 2023/24 and FY 2024/25
NOTIFICATION:
Legal ad published in the Napa Valley Register on Friday, April 7, 2023.