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Home My WebLink About26 - PH-2 - Presentation - 6/15/2021FY 2021-22 PUBLIC HEARING AND ADOPTION June 15, 2021 City Council CHARTING THE PATH TO RECOVERY 2 FY 2021-22 PROPOSED BUDGET OVERVIEW •FY 2021-22 All Funds Overview •FY 2021-22 Proposed General Fund Budget •FY 2021-22 Proposed Capital Improvement Budget •Conclusion 3 GUIDING PRINCIPLES FY 2021-22 Proposed Budget was inspired by the five Strategic Plan Goals: •Recruit and retain high quality staff •Achieve long-term fiscal sustainability •Strengthen public safety and keep the community safe •Maintain and enhance the City’s infrastructure, facilities, equipment, and technology •Diversify, stabilize, and increase housing to reflect community needs 4 FY 2021-22 PROPOSED BUDGET 5 FY 2021-22 PROPOSED BUDGET OVERVIEW •Tonight is the public hearing for the adoption of the FY 2021-22 All Funds Budget •Culmination of efforts by City Council, FiPAC (Finance and Pension Advisory Committee), Planning Commission, PACS (Parks, Arts and Community Services Commission), and staff •Nine public meetings in total were held •First budget after COVID-19 restrictions easing •Budget is Charting the Path to Recovery 6 FY 2021-22 7 All Funds Overview FY 2021-22 PROPOSED BUDGET The Proposed All Funds Budget totals $197.9 million, a $34 million, or 20.8% increase from the FY 2020-21 Adopted Budget. The Proposed General Fund Budget totals $154.4 million, a $17.8 million, or 13.0% increase from the FY 2020-21 Adopted Budget. An alternative has also been presented to the City Council for the General Fund that totals $151.6 million. 8 FISCAL YEAR 2021-22 ALL FUNDS $197.9 MILLION GENERAL FUND, $154,402,680 , 78% SPECIAL REVENUE FUNDS, $12,947,883 , 7% CAPITAL PROJECTS FUNDS, $16,104,371 , 8% INTERNAL SERVICE FUNDS, $14,475,944 , 7% 9 SPECIAL REVENUE FUNDS •American Rescue Plan (ARP) Fund – allows for Federal funding to backfill the loss of revenues and reinstate service reductions taken due to the pandemic. Staff is requesting authorization for the City Manager and/or Finance Director to appropriate ARP Funds as needed to comply with U.S. Treasury Guidelines. •Grant Funds – Staff is recommending that authorization be given to the City Manager and/or Finance Director to appropriate, as received, donations and grant awards during the fiscal year up to $100,000 to implement efficiencies. 10 GRANT ADMINISTRATION •Grant Awards – Staff is recommending that authorization be given to the City Manager and/or Finance Director to provide, award, and administer grants and enter into agreements, as appropriate, with local non-profit organizations or foundations, so as to allow Costa Mesa families experiencing financial hardship be able to participate in the Parks and Community Services programs. •Staff will be utilizing funding included in the FY 2021-22 Proposed Budget (e.g. Save Our Youths (SOY), Wilson Learning Center) to cover any administrative costs and grant awards issued not to exceed the City Manager’s expenditure authority ($50k in aggregate from the City Manager’s Contingency Funds). 11 FY 2021-22 Proposed General Fund Budget 12 FY 2021-22 GENERAL FUND REVENUE The General Fund revenue and sources of funds contain: •Projected recurring General Fund revenues of $144.6 million. •The use of $6.6 million in Federal American Rescue Plan Funds, approved by Congress as “revenue replacement”. •Estimated $3.2 million in Declared Disasters Reserve, if needed. •An alternative has also been provided that eliminates the use of reserves but results in some capital projects impacts. 13 DECLARED DISASTERS RESERVE OVERVIEW •The City’s General Fund reserves total $53.5 million, the Declared Disasters Reserve is $14.1 million. •To date, the City has not used any of its reserves to balance the budget for last year. •The early and aggressive cost containment actions implemented in April 2020 have been very successful. •Request of $3.2 million will only be utilized, if needed. •The Municipal Code Sections 2-206 and 2-207 authorizes the use of the reserves for this purpose. The “use of this reserve is limited to: 1) provide required emergency funding as a result of a declared emergency, 2) provide required funding for an unanticipated but urgent event threatening the public health, safety and welfare of the City.” 14 FISCAL YEAR 2021-22 PROPOSED GENERAL FUND BUDGET 15 CREATING A PATH TO RECOVERY – PUBLIC SAFETY Public Safety Represents 53% of General Fund 16 FY 2021-22 PROPOSED GENERAL FUND EXPENDITURES •Incorporates 9.9 full-time positions mostly attributed to the reallocation of part-time positions to full-time; of which four are non- General Fund supported •Fixed costs increases such as PERS and insurance premiums •Additional $4.7 million in capital spending as required by the Capital Asset Needs (CAN) Ordinance •Reinstates the five percent compensation for employees of $3.0M •Funds 17.4 previously defunded positions totaling $1.7M •Fully supports the 1.5% required contribution to technology •Continuation of the $4.0M vacancy factor (negative appropriation) adopted in FY 2019-20 General Fund Budget 17 FY 2021-22 PROPOSED BUDGET (REVISED) The Proposed General Fund Budget totals $151.6 million, a $14.9 million, or 11.0% increase from the FY 2020-21 Adopted Budget. 18 FY 2021-22 PROPOSED GENERAL FUND BUDGET The Proposed General Fund Budget totals $154.4 million, a $17.7 million, or 13.0% increase from the FY 2020-21 Adopted Budget; or Use of Declared Disasters Reserve of $3.2 million The Revised Proposed General Fund Budget totals $151.6 million, a $14.9 million, or 11.0% increase from the FY 2020-21 Adopted Budget. Elimination of the Use of Declared Disasters Reserve 19 FY 2021-22 Proposed Capital Improvement Budget 20 FY 2021-22 PROPOSED CIP BUDGET The All Funds Capital Budget of $24.6 million reflects the City’s Annual Capital Improvement Program Budget that contains an increase of $10.7 million from the FY 2020-21 Adopted Budget. CAPITAL IMPROVEMENT PROJECTS (in millions) Adopted Proposed Increase/Decrease FY 2020-21 FY 2021-22 Amount Percent Energy & Sustainability $0.19 $0.30 $0.11 59.2% Facilities 3.84 4.49 0.65 17.0% Parks 0.35 2.01 1.66 473.3% Parkways & Medians 0.73 1.00 0.28 37.9% Streets 6.28 12.53 6.25 99.4% Transportation 2.47 4.24 1.77 71.7% Total CIP $13.86 $24.57 $10.71 77.3% 21 FY 2021-22 CAPITAL PROJECT HIGHLIGHTS •Design for Fire Station 2 Reconstruction •Westside Park Development •Ketchum-Libolt Park Expansion •Tanager Park Playground Replacement •Citywide Street Improvements - $12 million in total •Traffic Signal Synchronization Projects •Many Active Transportation Improvements •Randolph Ave Parking and Pedestrian Improvements •Open Space Master Plan Update •Jack Hammet Sports Park Expansion •Priority and Missing Link Sidewalk Repairs •Citywide Alley Repairs •Parkways and Median Improvements •Westside Storm Drain Improvements 22 23 24 CHARTING THE PATH TO RECOVERY Recruit and Retain High Quality Staff 25 NEW JOB CLASSIFICATIONS Staff is recommending to add the following job classifications: •Active Transportation Coordinator to assist and coordinate the implementation of the City's Active Transportation Projects; and •Arts Specialist to oversee activities and programs that support the Arts and Culture Master Plan 26 RECRUIT AND RETAIN HIGH QUALITY STAFF Revisions to the Annual Budget Resolution: •Staff is recommending that authorization be given to the City Manager to revise the Table of Organization, such as reclassifying an Office Specialist position to an Administrative Secretary position, up or down, as needed, to address workload demands and Departmental needs, provided that the total authorized number of personnel within the City is not exceeded. •This will assist in the expeditious realignment of staffing during the fiscal year and provide greater operational efficiencies. 27 FIPAC RECOMMENDATIONS 28 FY 2021-22 PROPOSED FIPAC RECOMMENDATIONS •Supports the Revised Proposed Budget of $151.6 million •Recommends to eliminate the use of Declared Disasters Reserve •Adjust the full-time staffing level to 529, deferring the Arts Specialist position until the mid-year review •Recommends a subcategory titled “Fairview Park” be added for Fairview Park projects and within Transportation adding a subcategory titled “Active Transportation” for Active Transportation projects. 29 CONCLUSION 30 CONCLUSION •The FY 2021-22 Proposed Budget is designed to align with the City Council’s Five Strategic Plan Goals •The theme for this year’s Proposed Budget, “Charting the Path to Recovery,” signals the careful restoration of core public services while promoting long term sustainability •Strategic use of American Rescue Plan Funds, along with a portion of the Declared Disaster Reserves, will restore services until revenues return to pre-pandemic levels •Key investments in public safety, capital projects, information technology, active transportation, arts and culture, parks and community services and infrastructure, will all help ensure that Costa Mesa remains a great place to live, work and play! 31 FY 2021-22 BUDGET CALENDAR 32 THANK YOU! 33 ELIMINATION OF THE USE OF DECLARED DISASTERS RESERVES •Staff recommends reducing the General Fund transfer to the Capital Fund by $2.8 M by: Remaining $1.5 M for Police Shooting Range Transfer of Citywide Street Improvements to the Gas Tax Fund of $0.7 M Transfer Wilson Street Improvements of $0.2 M to the Gas Tax Fund •Transferring in $0.4 M from the Capital Fund 401 to the General Fund for projects transferred to other funds •To achieve compliance with the CAN, the $2.8 M debt service payment will be attributed to capital spending as allowed by the municipal code ESTIMATED FUND BALANCE (in millions) Fund Balance Category FY 2018/19 Audited FY 2019/20 Audited FY 2020/21 Estimated Committed Declared Disasters $14,125 $14,125 $14,125 Self-Insurance 2,000 2,000 2,000 Economic Reserves 7,500 9,000 9,000 Assigned Compensated Absences 4,892 5,037 5,037 Police Retirement 1% Supplemental 2,297 2,365 2,365 Section 115 Trust 1,750 1,750 1,750 Non-Spendable 280 362 362 Unassigned 20,451 18,825 18,825 Total Fund Balance $53,295 $53,464 $53,464