Item 08 - Fiscal Year 2024-25 First Quarter Budget Update and Proposed Appropriation Adjustments

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Fiscal Year 2024-25 First Quarter Budget Update and Proposed Appropriation Adjustments November 19, 2024 Page 5 4 6 8 0 services for the City’s unhoused population, which will be managed by the City Manager’s Office and located outside City boundaries. The anticipated start date for these services is February 1, 2025. Additionally, the Police Department plans to allocate a portion of these funds for the purchase of naloxone, to be deployed by officers in the field. Some of the funds will be reserved for legal expenses as required by the settlement agreements. Therefore, staff is requesting the recognition of $2,216,854 in revenue and the appropriation of the same amount in expenditures. Workforce Innovation and Opportunity (WIOA) Fund (Fund 123) California’s Employment Development Department released final notification of the WIOA funds allocation in the latter part of the budget process, leaving minimal time to make necessary adjustments. Therefore, staff originally budgeted for this fund using the prior year’s allocations to estimate projected award amounts which may lead to discrepancies between budgeted amounts and actual awards. The lower-than-expected grant amount results from revisions to the funding formula. Now that FY24-25 actual award amounts have been released, staff recommends reducing expenditures by $319,940 to align the budget with the actual award allocations. Due to this 12% reduction, WORK Center staff has delayed some technology and equipment purchases and pared back some job training services and case management. Community Planning and Development Program Allocations (Funds 130 and 135) Housing and Urban Development (HUD) also did not release FY24-25 award amounts until very late in the budget process. As with the WIOA grant, staff used the prior year's allocations to estimate projected award amounts. Due to an adjustment to HUD’s formula methodology, there was a decrease in award amounts for FY24-25. Staff recommends the following reduction in revenues and expenditures: •Home Program Federal Grant (Fund 130) - Decrease revenues by $421,595 and decrease expenditures by $414,595. •CDBG (Fund 135) - Decrease revenues by $408,910 and decrease expenditures by $160,890. The City’s award amount decreased by an overall average of 14% due to this new methodology. In response to this decrease and to avoid a reduction in service levels and/or programming, staff reprioritized projects and continues to seek alternate funding sources for the lower-priority projects. Details for all of the recommended appropriation adjustments listed above are located in the Fiscal Impact section of this staff report. CIP Projects Update Staff has compiled an updated FY24-25 Capital Improvement Program (CIP) in Exhibit 1, including Carryforward Projects and new FY24-25 projects. The exhibit includes the following fields: