Correspondence - #52 - Laserfiche WebLink

Home Browse Search

Orozco, Norma From: Tim Johnson <tjohnson@jlkrllp.com> Sent: Tuesday, June 06, 2023 12:15 PM To: eComment; Amezcua, Valerie; Phan, Thai; Bacerra, Phil; Penaloza, David; Hernandez, Johnathan; Lopez, Jessie; Vazquez, Benjamin Cc: Downs, Kathryn; Mendoza, Steven; Ridge, Kristine Subject: City Budget- Agenda Item #52 (6/6/23) Happy Tuesday everyone... tonight I believe you will be considering the FY 23/24 budget. Our city finance team and others have obviously put a lot of work into preparing a budget based on your guidance. I urge each of you to review the below email from the May 11t" discussion regarding the same. I also urge you each to consider when something is saved to not immediately re -allocate those funds for another project but instead to save it in preparation of a future Measure X revenue drop which is highlighted in the Ten Year Outlook on page 4 of the Staff Report. If past history, including this year, is any indication, we will continue to spend based on our revenue and the surplus (Revenue > Spending) in the Ten Year Outlook will erode to next to zero each future year (i.e. FY 24/25, 25/26, 26/27, & 27/28)... the surplus will not be there in the future unless we change spending habits now. We need to prepare for the future Measure X Revenue drop now instead of saddling a future council and our residents' future pocketbooks. We cannot lose site of the planned $24M deficit ... small changes in habits now will pay dividends in the future. If we continue to spend all of our revenue each year without putting substantial amounts away to plan for the drop in Measure X revenue in the future, we are putting this all onto our future selves which is not correct. Fast forward to this time next year, and I bet you the planned FY24/25 $8M surplus will be spent. Just as the surplus is no longer there this year ... in fact, per the chart on page 3 of the Staff Report, the net activity is actually NEGATIVE $29.285M. We are taking the 22/23 surplus and spending it in FY 23/24. This is easily highlighted by comparing the estimated ending general fund balance in the chart on page 2 of the Staff Report. FY 22/23 Revised Budget has an estimated ending general fund balance of $101.4M wheres the estimated gen fund balance at the end of FY 23/24 is $72.1M... just above the 18% reserve requirement. We need to stop this cycle of spending each dollar we get into when we know that there is a planned huge revenue drop in the future. In essence, we are taking the gains we have made in the past and spending it ... we did that in FY22/23 and are planning on doing it again in FY 23/24. To recap our general fund balances, as shown in the General Fund table on page 2 of the Staff Report has been decreasing as follows: $121.4M Beg 22/23 Balance 4 $101.4M Est End FY22/23 Balance 4 $72.1M Est FY23/24 Proposed Balance. That is right, our General Fund Balance will have decreased in a two year period (7/1/22 to 6/30/24) by approx $49.3M ($121.4M at 7/1/22 to $72.14M at 6/30/24). Let that sink in ... when you are making decisions on spending. Also, I cannot tell what is being planned/budgeted for the school crossing guard program but I urge you to not budget for 100% coverage for the school crossing guard program. This should be at a minimum a shared responsibility between the city and the school district. Ask yourself ... why are charter elementary and private schools able to get their students safely to school without the city funding a program for these residents of our city? Are charter and private schools not residents of the city? Yet, the city chooses to only fund a program for the public school district. If this is for the community, all students should benefit ... I am not advocating to expand the program to private schools and charter school but instead pointing out the fact that these schools have been able to find ways to get their students to school safely without a city funded program and at a MINIMUM the school district should bear at LEAST 50% of the cost of this program. We should be moving in the direction of the schools figuring it out instead of the city spending taxpayer dollars on something that other schools have shown that they are able to do it. Our public schools have some great minds and we should tap into them just as our charters and private schools have done. In fact, I would say that the