Item 12 - Fiscal Year 2023-24 First Quarter Budget Report and Proposed AAs

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Fiscal Year 2023-24 First Quarter Budget Report and Proposed Appropriation Adjustments November 7, 2023 Page 3 3 8 5 5 •Reduce Cannabis revenue by $3 million, from $15.1 million to $12.1 million, to reflect statewide decreases in demand in combination with a reduced tax rate that became effective January 1, 2023. •Increase Investment Income by $3.2 million, from $700,000 to $3.9 million, based on actual revenues received in FY22-23 and continued high interest rates. The projected revenue is lower than prior year actuals due to expected reduction in cash balances for the American Rescue Plan Act. •Increase Paramedic Service Charge revenue by $2 million, from $6.6 million to $8.6 million due to increased reimbursement rates. •Reduce Billboard revenue by $1.2 million, from $1.2 million to zero, due to a lack of currently approved billboards. •Reduce Jail revenue by $350,000, from $17.5 million to $17.2 million, to more closely align with prior years actuals. FY2023-24 Proposed Expenditure Adjustments •Staff proposes a housekeeping adjustment for the sales tax audit contract and software licenses expenditures, with a net zero impact. Historically, these services have been paid from the revenue account, which understates revenue, instead of paying from the expenditure account. The net result is the same, but the revenue and expenditure will be reported at gross amounts, instead of net amounts. •Staff proposes a $91,304 expenditure increase to reimburse the Select Street Construction Fund for the land transfer of two parcels to expand the City’s green space. •The Library is in the planning stages of the Jerome Park Outdoor Library. The project will include a 24-hour “satellite library” kiosk at the southwest end of the park. This satellite library will incorporate recreation-based play learning experiences. Based on the most recent cost estimates, the project is approximately $800,000 short. To help fund this project, Parks, Recreation & Community Services has offered to pay $100,000 from its cell-tower revenue budget, and Public Works has offered to pay $300,000 from its Water Enterprise budget due to the water conservation elements in the project. Staff requests a one-time General Fund adjustment of $400,000 to make up the difference in the shortfall. •As noted above, there are currently no approved billboards generating revenue for the City. The FY23-24 budget included a $1.2 million appropriation for right- of-way maintenance based on the billboard revenue. As no revenue is expected, staff proposes a corresponding expenditure adjustment to decrease the right-of- way maintenance. FY 2022-23 Proposed Expenditure Adjustments While closing the books for FY22-23, staff identified an opportunity to use $1,000,000 of unspent General Fund budget to fix streets, which is both a Measure X spending category and a contribution to the Orange County Transportation Authority (OCTA)