HomeMy WebLinkAboutItem 13 - Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation Adjustments Finance and Management Services
www.santa-ana.org/finance
Item # 13
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 15, 2022
TOPIC: Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation
Adjustments
AGENDA TITLE:
Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation
Adjustments
RECOMMENDED ACTION
1. Approve appropriation adjustments (requires five affirmative votes) to increase
General Fund expenditures as follows:
a. $40,000 for a full-time Librarian to staff the second Knowledge Mobile for
the remainder of FY 2022-23;
b. $35,000 for a full-time Receptionist to greet and direct visitors;
c. $36,600 to print and mail election information cards for the City’s
November 2022 ballot measures;
d. $514,764 for the purchase of bus benches, trash containers, and
advertising kiosks; and
e. $1,000,000 to plan for development of new public facilities in the Civic
Center complex;
f. $1,657,000 to move construction inspection costs from the Public Works
Engineering & Project Management internal service fund to the General
Fund, along with the associated fee/charge revenue of $1,420,000 for a
net impact of $237,000.
2. Increase authorized full-time staff headcount from 1,342 to 1,359 to capture 11
limited-term positions funded by the Revive Santa Ana Program as approved by
City Council on August 2, 2022, five additional Library positions to staff the
second Knowledge Mobile and new Teen Time program, and one additional City
Hall Reception position.
EXECUTIVE SUMMARY
This FY 2022-23 first quarter budget report focuses on the General Fund, as it is the
primary operating fund of the City. There is also a discussion of notable items for other
funds. This report does not include a discussion of programs and funds with no
significant budget variance expected.
Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 15, 2022
Page 2
3
0
7
1
The General Fund balance at June 30, 2022 is $16 million more than estimated during
the FY 2022-23 budget process primarily due to FY 2021-22 revenue performance.
Staff proposes spending adjustments totaling $3.3 million, offset by $1.4 million of
revenue, for a net fiscal impact of $1.9 million. If the City Council approves the
recommendations, the General Fund balance available for spending may be $19.9
million. Considering the effects of pending recession and the Cannabis tax rate
reductions, staff does not recommend any further appropriations from the available
$19.9 million. In addition, staff recommends preserving a spendable balance sufficient
to fund the City’s $13 million contribution to the forthcoming Third & Broadway project if
the developer meets the December 31, 2022 deadline for closing escrow.
General Fund Summary with Proposed Adjustments
Original
FY 2022-23
Budget
Proposed First
Quarter
Adjustments
Updated
Estimate
Beginning Balance at July 1,
2022
$97,462,861 $16,046,683 $113,509,544
Revenue Estimate $390,132,940 $1,420,000 $391,552,940
Appropriated Spending $(403,596,760)$(3,283,364)$(406,880,124)
Pension Trust Set-Aside $(7,748,811)$(7,748,811)
Estimated Ending Balance at
June 30, 2023
$76,250,230 $14,183,319 $90,433,549
Less: 18% Reserve $70,223,929 $255,600 $70,479,529
Estimated Spendable
Balance
$6,026,301 $13,927,719 $19,954,020
The First Quarter budget and actual revenues and expenditures are included in Exhibits
1 and 2. The First Quarter vacancy report is included in Exhibit 3.
DISCUSSION
During the FY 2022-23 budget process, staff estimated the June 30, 2022 General Fund
balance to be $97.5 million, which enabled the City to add $23.2 million of one-time
spending to the FY 2022-23 budget. The resulting estimated June 30, 2023 General
Fund balance was $76.2 million, including the 18% Reserve of $70.2 million and $6.0
million available to spend.
The FY 2021-22 audit is not complete, but staff estimates that the General Fund
balance at June 30, 2022 will be approximately $113.5 million after accounting for
budget carryovers. This is $16 million more than originally estimated. The additional
Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 15, 2022
Page 3
3
0
7
1
fund balance is primarily attributable to the following FY 2021-22 positive budget
variances.
•Additional sales tax of $3.1 million ($1.3 million of Measure X and $1.8 million of
Bradley-Burns). Taxable sales defied expectations and grew 14% during FY
2021-22 with unprecedented economic activity likely boosted by federal
spending. However, the most recent data shows signs that taxable sales growth
is slowing down and may only grow by approximately 2.8% in FY 2022-23.
•Additional residual property tax of $1.3 million allocated to the City from the
Redevelopment Property Tax Trust Fund.
•Additional utility user tax of $1.2 million, primarily related to increased electricity
usage.
•Additional business license tax of $1.7 million. When the FY 2022-23 estimates
were prepared, the City had not yet received the bulk of FY 2021-22 revenue.
•Additional supply-side Cannabis tax of $0.9 million and adult-use retail tax of
$2.6 million as reported on October 4 with City Council adoption of the Cannabis
tax reduction.
•Additional parking fine revenue of $0.8 million and jail revenue of $1.4 million due
to diligent management of resources.
•Expenditure savings of $1.7 million from Recreation & Community Services and
$1.5 million from Fire & Ambulance Services.
FY 2022-23 Revenue
For the most part, the FY 2022-23 budget already reflects the higher revenue amounts
received during FY 2021-22. Only the notable exceptions follow:
•The FY 2022-23 budget for Cannabis tax is $1.6 million less than actually
received during FY 2021-22. However, with the recent reduction to the Cannabis
tax rates, staff does not propose an adjustment at this time. With the Midyear
budget report, staff will have more information and may be in a better position to
adjust the revenue estimate.
•The FY 2022-23 budget for Business License tax is $0.7 million less than actually
received during FY 2021-22. However, with the ballot measure to change the tax
rates, staff does not propose an adjustment at this time. The City receives most
of its business license tax revenue in the spring. Therefore, the 3rd quarter
budget report is most likely to include a potential adjustment to the revenue
estimate.
•The FY 2022-23 budget for planning & building permit revenue is $5.3 million
less than FY 2021-22 actuals. However, planning & building activity is very
difficult to predict, and this is cost recovery revenue offset by expenditures.
Therefore, staff proposes no adjustment at this time. With the Midyear budget
report, staff will have more information and may be in a better position to adjust
both the revenue estimate and expenditure budget related to planning & building
activity.
Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 15, 2022
Page 4
3
0
7
1
At this time, there are no recommended increases to General Fund revenue estimates.
Library Staffing Additions
On May 17 of this year, staff reported sufficient FY 2021-22 budget availability to
purchase a second Knowledge Mobile for the Library. On September 20, the City
Council approved a General Fund budget carryover of $400,000 for purchase of the
vehicle. At this time, staff requests an appropriation of $40,000 and the addition of one
full-time Librarian to provide staffing for the second Knowledge Mobile beginning March
1, 2023.
The June 7, 2022 budget presentation included a $350,000 allocation for a new Teen
Time program in response to City Council direction. Although the City added funding to
the FY 2022-23 budget in time for adoption, the employee headcount was missing.
Therefore, at this time, staff requests the addition of two full-time Librarians and two full-
time Library Technicians to manage, implement, and lead activities for the Teen Time
program beginning January 2023 at the El Salvador and Garfield community centers.
The existing $350,000 budget appropriation is sufficient to pay for the four new
positions.
Full-Time Receptionist at City Hall
The City currently staffs the information desk at the south entrance of the main City Hall
building on a part-time basis. To improve customer service, staff requests an
appropriation of $35,000 and the addition of one full-time Receptionist to greet and
direct visitors, and answer questions beginning January 1, 2023.
Full-Time Staff Headcount
The FY 2022-23 included 1,342 full-time positions. On August 2 of this year, the City
Council approved 11 additional limited term employees to support the Revive Santa Ana
program. The request outlined above would add five full-time Library positions and 1
full-time City Hall Reception position. If the City Council approves the staff
recommendation, the new full-time position count for FY 2022-23 will be 1,359. Exhibit 3
includes the full-time position vacancy report at September 30, 2022.
Informational Post Card for November 8 Ballot Measures
The City took the additional unplanned step of mailing an election information postcard
to all households in the City with a registered voter. The information covered Measure X
(Charter Amendments) and Measure W (Business Tax Equity and Flexible Tax
Holiday). Staff recommends a budget appropriation of $36,600 to cover the cost of
printing and mailing.
Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 15, 2022
Page 5
3
0
7
1
Public Works Bus Stop Fixtures
On June 21 of this year, City Council approved a purchase order for bus benches, trash
containers and advertising kiosks for a total amount of $514,764. The FY 2021-22
funding was not included in the budget carryovers to FY 2022-23. Therefore, staff
requests an appropriation of $514,764 so the purchase can proceed.
Civic Center Development
The City has begun the long-term planning process for renewal of the Civic Center,
including a land swap with the county and a state allocation to expand the City’s
footprint within the Civic Center. At this time, staff recommends an appropriation of $1
million for professional services to plan for development of new public facilities.
Construction Inspection
The City has historically accounted for the design engineering and construction
inspection components in an internal service fund. The fund is not solvent, as full cost
recovery is not available for the staffing charged to that fund. Since spending and
associated cost recovery of these components is not considered restricted, a multi-year
process to discontinue use of the separate fund and transition to the General Fund is
underway. Therefore, staff proposes to transfer $1.7 million of staffing costs and $1.4
million of charge revenue related to the inspection activity to the General Fund budget
with a net fiscal impact of $237,000. The next phase is to transition design engineering
costs to the General Fund. Process improvements and cost-benefit analysis will be
necessary prior to any further changes that result in a significant General Fund impact.
Other Funds
Parking Enterprise
On September 12, 2022, the Orange County Transportation Authority approved an
allocation of up to $679,748 to backfill lost revenue while offering free parking at City-
owned parking garages in Downtown Santa Ana during the OC Streetcar construction.
Once City staff provides supporting documentation for actual revenue losses, the
parking enterprise will receive the revenue backfill.
Opioid Settlement
The City recently received a $348,507 allocation from the National Opioid settlement.
The settlement agreement restricts use of the money, and staff has created a new
special revenue Fund 111 to account for it. The Police Department is in the process of
developing a comprehensive spending plan that is compliant with allowable uses. A
separate staff report with an appropriation request is forthcoming.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 15, 2022
Page 6
3
0
7
1
FISCAL IMPACT
If City Council approves the recommended budget amendments, the updated estimate
of the General Fund balance at June 30, 2023 is as follows:
General Fund FY 2022-23 Updated
Beginning Balance at July 1, 2022 $113,509,544
Revenue Estimate $391,552,940
Appropriated Spending $(406,880,124)
Pension Trust Set-Aside $(7,748,811)
Estimated Ending Balance at June 30, 2023 $90,433,549
Less: 18% Reserve $70,479,529
Estimated Spendable Balance $19,954,020
Staff recommends the following appropriation adjustments:
Fiscal Year Accounting Unit
– Account #
Fund
Description
Accounting Unit,
Account
Description
Amount
FY 2022-23 01111017-61000 General Fund Library – Service
Enhancement $40,000
FY 2022-23 01103010-61000 General Fund City Manager,
Salaries Regular $35,000
FY 2022-23 01105015-62300 General Fund
General Non-
Departmental,
Contract Services-
Professional
$36,600
FY 2022-23 01117621-62300 General Fund
Bus Shelter
Program-Service
Enhancement,
Contract Services-
Professional
$514,764
FY 2022-23 01105015-62300 General Fund
General Non-
Departmental,
Contract Services-
Professional
$1,000,000
FY 2022-23 01117611-Various General Fund
Construction
Engineering,
Various Accounts
$1,657,000
Fiscal Year 2022-23 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 15, 2022
Page 7
3
0
7
1
EXHIBIT(S)
1. FY 2022-23 General Fund Revenue Summary
2. FY20 22-23 General Fund Expenditure & Transfer Summary
3. September 30, 2022 Full-Time Position Vacancy Report
4. Personnel Resolution
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Kristine Ridge, City Manager
Sales Tax (Bradley Burns) $ 64,550,000 $ 5,054,465 7.8%
Sales Tax (Measure X) 88,102,000 6,889,063 7.8%
Property Tax / Property Tax In-Lieu
of VLF 84,105,000 656,472 0.8%
Hotel Visitor's Tax 8,500,000 1,744,829 20.5%
Business License 15,000,000 1,318,337 8.8%
Utility User's Tax 24,400,000 4,956,698 20.3%
Cannabis Tax* 22,200,000 2,360,327 10.6%
Jail Facility Revenue 16,521,360 1,477,047 8.9%
Subtotal Top GF Revenues $ 323,378,360 $ 24,457,238 7.6%
Other General Fund Revenues 66,754,580 13,309,588 19.9%
Total General Fund Revenues $ 390,132,940 $ 37,766,826 9.7%
*Includes Medical, Adult-Use Retail, Cultivation, Distribution, Manufacturing and Testing
% ReceivedFY 22-23
Adopted BudgetRevenue Source FY 22-23
1st Quarter Actuals
EXHIBIT 1
City Manager 2,904,040 594,215 20.5%
City Council 1,029,860 147,323 14.3%
Non-Departmental1 47,103,560 16,304,085 34.6%
Transfers to Projects and Debt Service 35,890,490 6,763,058 18.8%
Clerk of the Council 1,935,720 379,675 19.6%
City Attorney's Office 3,584,860 608,344 17.0%
Human Resources 3,884,170 1,018,825 26.2%
Finance & Management Services 11,713,490 2,562,699 21.9%
Library 6,680,310 1,386,317 20.8%
City-Owned Museum Building2 2,542,320 1,406,275 55.3%
Parks, Recreation & Community Services 13,574,280 2,496,521 18.4%
Police Department 142,772,990 31,890,894 22.3%
Fire & Emergency Medical Services3 53,956,950 16,514,179 30.6%
Planning & Building 19,545,470 2,913,948 14.9%
Public Works 48,533,650 5,912,531 12.2%
Community Development 7,944,600 1,958,197 24.6%
Total General Fund Expenditures $ 403,596,760 $ 92,857,087 23.0%
1 Includes $24.3 million pension liability payment made in July
2 Includes one-time $1,025,000 reimbursement of City-owned building repairs made in July
3 Includes one month advanced payment made in July
Department
FY 22-23
1st Quarter
Actuals
% ExpendedFY 22-23
Adopted Budget
EXHIBIT 2
As of September 30, 2022
Department
FY 22-23
Funded
Positons
GF
Vacancies
Non-GF
Vacancies
Total
Vacancies
Hiring
Freeze
Vacancies
Total
Funded
Vacancies
Vacancy
Rate
City Manager's Office 15 3 3 6 0 6 40%
City Attorney's Office 17 4 0 4 0 4 24%
Clerk of the Council 7 3 0 3 0 3 43%
Community Development 62 0 11 11 0 11 18%
Finance & Management Services 68 6 2 8 0 8 12%
Information Technology 23 0 8 8 0 8 35%
Human Resources 31 1 3 4 0 4 13%
Planning & Building 94 19 5 24 0 24 26%
Police Department 640 63 2 65 7 58 10%
Parks, Recreation & Community Services 53 7 5 12 0 12 23%
Library 32 3 0 3 0 3 9%
Public Works 311 12 68 80 2 78 26%
Total 1353 121 107 228 9 219 17%
EXHIBIT 3
Resolution 2022-XXX
Page 1 of 3
RESOLUTION NO. 2022-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA TO AMEND THE CURRENT FISCAL YEAR 2022-
2023 ANNUAL BUDGET TO ADD FULL-TIME POSITIONS IN
THE LIBRARY DEPARTMENT.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1: The City Council hereby finds, determines, and declares as follows:
A.On June 21, 2022, the City Council passed and adopted Ordinance No. NS-
3021, establishing the City’s Budget for Fiscal Year 2022-2023 and authorizing
position allocations for Fiscal Year 2022-2023. The Ordinance also sets forth
the requirement that alterations in the allocation of authorized positions be
reviewed and approved by the City Council.
B.On September 20, 2022, the City Council approved an appropriation
adjustment to carryover unspent amounts from Fiscal Year 2021-22 to Fiscal
Year 2022-23.
C.The Executive Director of the Library Department requests to amend the Fiscal
Year 2022-2023 budget to add the following positions: three (3) full-time
Librarians and two (2) full-time Library Technicians.
D.The Executive Director of Finance & Management Services Agency requests
to amend the Fiscal Year 2022-23 budget to add the following position: one (1)
full-time Receptionist.
E.It is now desired to amend the Fiscal Year 2022-2023 budget, as amended in
order to effect this change, as shown below.
Section 2: The City’s Annual budget for Fiscal Year 2022-2023, as amended, is hereby
further amended to add the following positions in the Library Department, at the monthly
seven-step range as indicated:
7-Step Salary Rate Range Effective 11/15/2022
Classification Title
Number of
Positions Added SSR
Monthly Salary
Minimum-Maximum
Librarian 3 670 $5,488 - $7,355
Library Technician 2 603 $3,954 - $5,304
EXHIBIT 4
Resolution 2022-XXX
Page 2 of 3
Section 3: The City’s Annual budget for Fiscal Year 2022-2023, as amended, is hereby
further amended to add the following position in the Finance & Management Services
Agency, at the monthly seven-step range as indicated:
7-Step Salary Rate Range Effective 11/15/2022
Classification Title
Number of
Positions Added SSR
Monthly Salary
Minimum-Maximum
Receptionist 1 588 $3,676 - $4,930
Section 4: All classification salary rate ranges are set forth in the City's "Salary Schedule"
as periodically updated.
Section 5: That except as amended by this resolution, all other provisions of the Annual
Budget for the Fiscal Year 2022-2023, as amended, shall remain in full force and effect.
Section 6: This Resolution is operative from and after the date upon which it is adopted.
ADOPTED this 15th day of November 2022.
___________________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
By: __________________
Laura A. Rossini
Chief Assistant City Attorney
Resolution 2022-XXX
Page 3 of 3
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Clerk of the Council, do hereby attest to and certify the attached Resolution No.
2022-___ to be the original Resolution adopted by the City Council of the City of Santa
Ana on November 15, 2022
Date: ___________________ ____________________________
Clerk of the Council
City of Santa Ana