Item 19 - Early Direction for the Fiscal Year 2024-25 Budget (continued from the meeting on 3-19-2024)

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Early Direction for the Fiscal Year 2024-25 Budget April 2, 2024 Page 4 4 1 5 8 The FY 2023-24 Measure X spending plan is attached to this report as Exhibit 2. The detailed spending plan identifies expenditures that may be considered if and when it becomes necessary to reduce costs to rebalance the budget. Recommendations from Measure X Oversight Committee The Measure X Citizens Oversight Committee met on February 21 and March 13 to formulate recommendations for the FY 2024-25 budget process. Staff expects to include those recommendations in the April 2 presentation to City Council. Use of One-Time General Fund Money As part of the Midyear Budget Report on February 20, staff provided an estimate of $14,650,726 of General Fund balance available for one-time spending. Staff seeks direction from City Council regarding one-time spending to include in the proposed FY 2420-25 budget. Options follow. •Establish a Measure X sunset stabilization fund, as recommended by the Measure X Citizens Oversight Committee. •Make an additional contribution to the employee pension cost stabilization fund to mitigate future cost increases due to CalPERS investment losses. •As discussed throughout this report, staff has multiple recommendations for one- time spending to be included in the proposed FY 2024-25 budget. Miscellaneous Fees The City charges fees for services to individuals that do not benefit the public at large (e.g. building permit). Per state law, the City cannot charge more than its cost to provide the service. Each year, staff recommends increasing miscellaneous fees to keep up with the City’s costs of doing business. Last year, the budget included an increase of 4.1%, based upon the increase of compensation for employees providing the services (both salary and benefits). The increase of the Consumer Price Index for Los Angeles-Long-Beach Anaheim for the year ended December 2023 was 4.66%. The employee bargaining groups negotiated wage increases of 3% for the current fiscal year. In addition, many of the City’s employees received merit step increases of 5%. Contributions for employee health insurance increased 8.1% and the City’s normal cost contribution for the employee pension plan increased by 9.5% for public safety and 11.75% for all other employees. Based on this information, an increase of up to 4.66% is substantiated and the City would maintain compliance with state law. Shall staff include a miscellaneous fee increase of 4.66% in the proposed FY 2024-25 budget? Ambulance Transport Reimbursements As previously reported on May 16, 2023 and with the Midyear Budget report on February 20, 2024, the City has benefited from a new federal program that provides