Item 25 - Fiscal Year 2021-2022 Mid-Year Budget Update

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Receive and file the FY 2021-2022 Mid-Year Budget Update March 1, 2022 Page 11 Central Services Fund Central Services is responsible for mail, printing, and delivery services and charges City departments for these services. With the usage of email and multifunctioning printers, service levels have decreased and revenue has declined. Staff estimates the fund will have a deficit balance of approximately $426,000 at June 30, 2022 resulting from multiple years of an unbalanced budget. Staff proposes a one-time General Fund subsidy of $426,000 to address the estimated deficit balance at year-end. The proposed FY 2022- 23 budget will include a recommendation to fold this fund’s activity into the General Fund and rebalance the budget. PWA Engineering and Project Management Fund This fund charges capital projects for engineering services provided by City staff. Funds are received from the capital funds to recover the City’s cost for labor and overhead costs. PWA is currently updating its cost recovery plan, which will be used as a basis for covering these costs. When submitted and approved by the appropriate grant agency, the City may recover additional costs not currently being received, which will improve the current projected deficit. During the upcoming budget year, Public Works and Finance staff will review its current practice for project charges, which may require some General Fund support. Other Grant Funds As part of the Mid-Year review, staff is taking a proactive stance in working with departments to address grant funds projected to end the fiscal year with a deficit balance, such as the Police Athletic and Activities League, Department of Justice Grant, Office of Safety Grant, and Planning Grants Program. As such, departments are expecting to bill or receive reimbursements this year to correct the estimated deficit balance, which will help bring some balances back in the positive. Capital Projects Funds Similarly, staff is working to address capital projects with projected deficit balances at year-end resulting from timing of billing and pending prior year grant reimbursements. PWA also expects to bill or receive reimbursements to address the estimated deficit balance. Full-Time Employee Position Vacancy Report Exhibit 1 includes the staff vacancy report is as of December 31, 2021. It reflects all staffing changes authorized to date, including the 21 positions across various departments approved by the City Council on October 5, 2021 for the Revive Santa Ana program. As of December 31, there is a total of 168 total vacancies (Exhibit 1), of which 138 are funded vacant positions and 30 are subject to the hiring freeze. Positions subject to the