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 5 a one-time spike in activity related to large construction projects for residential and mix- use development on 3rd & Broadway, Rafferty, Warner & Red Hill, 2727 Main Place, and Lacy Crossing. Staff has increased the revenue estimate by $774,200 accordingly. Jail Revenue: The jail revenue is based on a fee of $115 per inmate, multiplied by the average daily population (ADP). The current level of ADP for the US Marshals indicates that revenue is on track to meet the current year’s budget estimates. However, the revenue for the Federal Bureau of Prisons (BOP) is showing a decline based on a lower ADP count used for the budget projections. Staff will continue to monitor jail revenue and does not recommend an adjustment at this time, as we expect jail revenue in aggregate to approximate the budget. General Fund Expenditures As of December 2021, General Fund expenditures are at 53.5 percent of budget. The City has spent more than half of the General Fund budget due to the pension debt payment in the first half of the fiscal year and the one-month advance for contracted fire services. As part of the Mid-Year Report adjustments, staff recommends an increase in the General Fund Operating Budget by a net adjustment of $53,690, which includes the pension debt expense savings discussed in more detail below. Exhibit 2 and 3 includes a table of recommended adjustments. Discussion follows for notable items. Pension Obligation Bonds Adjustment Summary As part of the debt refinancing, housekeeping adjustments are necessary to realign the overall current year budget between departments and funds. There is no impact to the overall budget. However, the net impact to the General Fund is an expenditure reduction of $690,577. A summary of these proposed appropriation adjustments is identified in Exhibit 3. At the February 15, 2021 meeting, staff provided the City Council with a Pension Debt Update and proposed that the FY 2022-23 budget reflect the same budget level as the current year of $54.3 million, with a plan to deposit the $9.5 million of cost-savings across all funds into the City’s Section 115 Trust for future cost stabilization. Workforce Changes In preparation for the Mid-Year Report, City departments review budgets and propose budget updates and workforce changes to reflect organizational changes. A summary of key updates is below with a more detailed report in Exhibits 2, 4, 5 and 6. Human Resources: The Human Resources Department is requesting the creation of four full-time classifications and one part-time classification as detailed in Exhibit 5. The classifications will enhance program operations and efficiency in the areas of organizational development and training and risk management in the future. The creation of the classifications and applicable salary ranges will not result in an increase in