FY 2019-2020 RECOMMENDED BUDGET RELEASED
The City continues to provide innovative programs and high quality service to the community while maintaining the long-term fiscal health of the City, and advancing the City Council’s major priorities and strategic initiatives. The City Council’s top three priority areas for FY 2019-20 are housing, transportation, and children and youth; these priorities represent a significant component of the City’s discretionary budgetary and policy focus in FY 2019-20. Section 1 of the Budget Message outlines recommended initiatives for FY 2019-20 to advance these priority areas.
The FY 2019‐20 Recommended Budget for all funds totals $301.6 million in revenues and $290.0
million in expenditures. The General Fund revenue portion of the budget is $157.4 million. In
prioritizing the long‐term fiscal sustainability of the City, the Recommended Budget is structurally
balanced, while maintaining a General Fund reserve of 15 percent.
The recommended FY 2019‐20 General Fund expenditure budget is $136.6 million, which is $11.7 million, or 9.4 percent more than the FY 2018‐19 adopted General Fund expenditure budget of $124.9 million. Salaries, wages, and benefits are $95.8 million, or 70.2 percent of the Recommended General Fund expenditure budget. This is a decrease from 72.2 percent for FY 2018‐19. Police and Fire Department salaries and benefits, as in most California cities, are a significant portion of the budget, amounting to approximately $63.9 million, or 66.7 percent of all salaries, wages, and benefits in the General Fund.
The total Fiscal Year Capital Improvement Program (CIP) budget is $27.8 million. This budget includes 54 projects with an estimated cost of $24.8 million plus dedicated staffing resources equal to 28 full-time equivalent (FTE) positions at a cost of approximately $3.0 million. Funding for capital projects typically derives from many sources, with the Utility Users’ Tax the primary revenue source utilized for capital improvement projects.
Recommended Budget Helpful Links
For the full FY 2019-2020 Recommended Budget, go here.
FEBRUARY 2019 MID-YEAR BUDGET DIRECTION
At the February 25 City Council meeting, the City Council heard a mid-year budget update and discussed the development of the FY 2019-20 budget.
The City has a history of adopting best practices and approving proactive financial management approaches to provide great services to the community. Some of these steps include:
- Maintained 15% General Fund reserve levels
- Approved local pension reform two years before State action
- Dedicated funding for infrastructure and capital needs
- Strengthened the City’s fiscal position through the Financial Sustainability Plan
- Prioritized paying down long term liabilities
- Continued to contain costs through efficiencies, shared services, and innovation
These approaches have resulted in the City being recognized by outside agencies. In 2018, Moody’s upgraded the City’s credit rating to Aa1, which is the second highest rating a municipality can receive and the City received the Distinguished Budget Award from the Government Finance Officers Association. In addition, the City continues to receive clean audits from independent, outside auditors.
Building on these strengths, the City is working on several additional steps to improve the City’s budgeting and financial management:
- Developing a Ten-Year Forecast to provide a longer-term road map to financial sustainability
- Organizing a community engagement event regarding the City’s finances
- Considering new revenue sources
- Recommending a 2 year budget cycle in order to create efficiencies in the budget development process
- Assessing the City’s fiscal health using a League of California Cities diagnostic tool
- Exploring the option of an accelerated payoff time frame for pension obligations
- Implementing OpenGov, an online platform that will provide much more detailed and transparent budget information, performance metrics, and trends to community members
- Engaging the Government Finance Officers Association to review the City’s financial processes and procedures
Although the City is on solid financial footing in the near-term, the 10-Year Preliminary Forecast shows that the City will have a projected structural budget deficit of $4 million in FY 2022-23, and grow to a structural deficit of almost $18 million by FY 2028-29. For that reason, the City will continue to explore all the strategies identified in the Financial Sustainability Plan. At the City Council meeting, the City Council approved the following items:
- Use 80% of projected one-time FY 2018-19 General Fund year-end operating balance towards paying down pension liabilities and 20% towards the City Council priorities of housing, transportation, and children and youth
- Development of the final 10-Year Forecast to include additional annual contributions to pay down pension liabilities
- Confirmation of the FY 2019-20 budget principles including using ongoing revenue to fund ongoing expenses, using one-time revenues for one-time expenses and paying down long-term liabilities, and ensuring adequate reserves
February 25 City Council Mid-Year Update Materials
NOVEMBER 6 BALLOT MEASURE RR VOTE UPDATE
On November 6, 2018 voters approved Measure RR by 67.7% supporting a sales tax increase to help fund City services. For more information about Ballot Measure RR, go here.
- Email the City: email@example.com
- Attend the June Budget Study Session: Attend the Study Session on June 10 at 7 p.m. at City Hall, Council Chambers
- Attend the June Budget Public Hearing and Adoption: Attend the Budget Public Hearing on June 24 at 7 p.m. at City Hall, Council Chambers
For more details about the Community Budget Workshop, go here.
CAPITAL IMPROVEMENT PROGRAM
In addition to developing an annual FY 2019-20 Operating Budget, the City also develops an annual Capital Improvement Program (CIP) and a five-year Capital Improvement Program. On May 6, 2019, City staff presented their recommended FY 2019-2022 CIP and Five-Year CIP. The proposed CIP budget for FY 2019-20 includes $27.8M in new funding for 53 projects.The proposed five-year CIP identifies a list of 102 projects with an estimated total cost of $293.7M. These projects provide a blueprint for anticipated future project needs and assists staff with strategic planning discussions.
Funding for capital projects is derived from many sources, with the Utility Users Tax (UUT) being a general
revenue source that can be utilized for all capital improvement projects. Other dedicated revenue sources,
which are restricted to specific purposes, include park impact fees, water and sewer enterprise capital
funds and various transportation funds such as Measure A and Gas Tax revenues.
Follow the links below to learn more about the proposed FY 2019-20 CIP and the Five-Year CIP:
For the FY 2018-19 CIP, go here.