HomeMy WebLinkAboutItem 12 - Fiscal Year 2023-24 First Quarter Budget Report and Proposed AAs Finance and Management Services
www.santa-ana.org/finance
Item # 12
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 7, 2023
TOPIC: Fiscal Year 2023-24 First Quarter Budget Report and Proposed Appropriation
Adjustments
AGENDA TITLE:
Fiscal Year 2023-24 First Quarter Budget Report and Proposed Appropriation
Adjustments
RECOMMENDED ACTION
1. Approve the appropriation adjustments to General Fund expenditures (requires
five affirmative votes) as detailed in the body of this report, with a net reduction of
$408,196 and a net reduction to the General Fund revenue estimates of
$530,000.
2. Receive and file the 1st Quarter Budget Update.
GOVERNMENT CODE §84308 APPLIES
No
EXECUTIVE SUMMARY
This FY2023-24 first quarter budget report focuses on the General Fund, since it is the
primary operating fund of the City. This report does not include a discussion of
programs and other funds, as we do not expect any significant budget variances at this
time.
For FY22-23, the City received revenue in excess of estimates and had expenditure
savings. The FY22-23 audit is currently in process, and the final carryover amounts
based on remaining FY22-23 budget availability have not been fully vetted. In
December, staff will be able to identify the increase of the General Fund balance
available for one-time spending, based on the positive FY22-23 variances.
In the meantime, based on actual revenue performance in FY22-23 and updated
estimates from the City’s sales tax consultant, staff is able to adjust FY23-24 revenue
Fiscal Year 2023-24 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 7, 2023
Page 2
3
8
5
5
estimates. In addition, we are proposing expenditure reduction totaling $408,196. The
net fiscal impact of all proposed adjustments is an overall reduction of $121,804.
FY23-24 General Fund Summary with Proposed Adjustments
FY23-24 Original
Budget
Proposed 1st
Quarter
Adjustments
Updated Estimate
Beginning Balance at
July 1, 2023 109,372,864 -109,372,864
Revenue Estimate 400,938,670 (530,000)400,408,670
Appropriated Spending (414,022,680)408,196 (413,614,484)
Pension Trust Set Aside (24,034,731)-(24,034,731)
Estimated Ending
Balance at June 30,
2024
72,254,123 (121,804)72,132,319
Less: 18% Reserve 72,168,961 (95,400)72,073,561
Estimated Spendable
Balance 85,162 (26,404)58,758
The First Quarter budget and actual revenues and expenditures are included in Exhibits
1 & 2. The First Quarter vacancy report is included in Exhibit 3.
DISCUSSION
FY2023-24 Revenue
•The current budget for the Bradley Burns sales tax allocation is $64,715,000.
Actual revenue received in FY22-23 was only $61,068,452. Therefore, staff has
adjusted the FY23-24 revenue estimate to $62,515,000 (a budget reduction of
$2,200,000, but a 2.4% increase from FY22-23).
•The budget for Measure X sales tax is $88,616,000. Actual revenue received in
FY22-23 was only $86,849,806. The City’s sales tax consultant has noted we
are experiencing a decrease in new vehicle sales and taxable construction
materials, which are having a greater impact on Measure X revenue. Therefore,
staff has adjusted the FY23-24 revenue estimate to $85,916,000 (a reduction of
$2,700,000 and a 1% further decrease from FY22-23).
•Increase Hotel Visitor’s Tax by $1 million, from $8.5 million to $9.5 million, based
on normal collections received in FY22-23.
•Increase Electric Utility Users Tax by $1.7 million, from $15.1 million to $16.8
million, based on normal collections received in FY22-23.
•Increase Business License Tax by $1 million, from $15 million to $16 million, to
align current year estimates with prior year actuals.
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)
Fiscal Year 2023-24 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 7, 2023
Page 4
3
8
5
5
Maintenance of Effort (MOE). Staff requests a year-end housekeeping adjustment to
increase the Public Works budget in the General Fund by decreasing the budget for
other departments with a net fiscal impact of zero dollars. This adjustment improves the
City’s ability to meet its FY22-23 OCTA MOE requirement.
Fiscal Year 2023-24 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 7, 2023
Page 5
3
8
5
5
FISCAL IMPACT
If the City Council approves the recommended budget amendments, the updated
estimate of the General Fund balance at June 30, 2024 is as follows:
Staff recommends the following appropriation adjustments:
Ge ne ral Fund FY2023-24 Update d
Beginning Balance at July 1, 2023 109,372,864
Revenue Es tim ate 400,408,670
Appropriated Spending (413,614,484)
Pension Trus t Set-As ide (24,034,731)
Estimate d Ending Balance at June 30, 2024 72,132,319
Less : 18% Res erve 72,073,561
Estimate d Spe ndable Balance 58,758
Fiscal
Year
Accounting Unit
– Account #
Fund
Description
Accounting Unit,
Account
Description
Amount
FY2022-23 Appropriation Adjustments
FY22-23 01110130-62300 General Fund
Finance- Treasury/
Customer
Services, Contract
Services
($500,000)
FY22-23 01115330-62300 General Fund
Fire Suppression/
EMS, Contract
Services
($500,000)
FY22-23 01117017-66220 General Fund
PWA-Service
Enhancement,
Improvements
Other Than
Building
$1,000,000
FY2023-24 Appropriation Adjustments
FY23-24 01110130-62300 General Fund
Finance- Treasury/
Customer
Services, Contract
Services
$280,500
FY23-24 01111017-66220 General Fund
Library- Service
Enhancement,
Improvements
Other Than
Building
$400,000
Fiscal Year 2023-24 First Quarter Budget Report and Proposed Appropriation
Adjustments
November 7, 2023
Page 6
3
8
5
5
EXHIBIT(S)
1. FY23-24 General Fund Revenue Summary
2. FY23-24 General Fund Expenditure & Transfer Summary
3. Full-Time Position Vacancy Report
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Steven A. Mendoza, Acting City Manager
FY23-24 01117622-62300 General Fund
PWA-Right of
Way, Contract
Services
($1,180,000)
FY23-24 01106019-68000-
059 General Fund
General Fund-
Interfund
Transfers,
Transfer Out
($91,304)
FY23-24 05917661-66220 Select Street
Construction
OCTA-Bristol St
Corridor
Improvements,
Improvements
Other Than
Building
$91,304
EXHIBIT 1
Revenue Source FY23-24
Adopted Budget
FY23-24
1st Quarter Actuals % Received
Sales Tax (Bradley Burns) 64,715,400 4,917,586 7.6%
Sales Tax (Measure X) 88,616,400 6,708,336 7.6%
Property Tax/ Property Tax In-Lieu of VLF 88,387,690 610,614 0.7%
Business License Tax 15,000,000 1,183,956 7.9%
Cannabis Revenue¹16,060,130 1,824,380 11.4%
Charges for Service 24,823,980 8,336,827 33.6%
Franchise Fees 10,950,000 663,508 6.1%
Hotel Visitor's Tax 8,500,000 1,871,404 22.0%
Jail Facility Revenue 17,502,500 1,476,940 8.4%
Utility Users Tax 25,800,000 5,069,840 19.7%
Subtotal Top General Fund Revenues 360,356,100 32,663,390 9.1%
Other General Fund Revenues 40,582,570 6,369,876 15.7%
Total General Fund Revenues 400,938,670 39,033,266 9.7%
¹Includes Medical, Adult-Use Retail, Cultivation, Distribution, Manufacturing & Testing
EXHIBIT 2
Department FY23-24 Adopted
Budget
FY23-24 1st
Quarter Actuals % Expended
City Attorney 4,365,880 893,489 20.5%
City Clerk's Office 2,411,150 279,237 11.6%
City Council 1,021,070 179,627 17.6%
City Manager 3,144,680 722,990 23.0%
City Owned Museum Building 1,674,210 414,065 24.7%
Community Development ¹6,186,710 1,920,908 31.0%
Finance 11,973,870 2,774,768 23.2%
Fire & Emergency Medical Services²56,483,060 17,175,384 30.4%
General Non-Departmental 21,182,270 129,205 0.6%
Human Resources 4,283,540 1,088,807 25.4%
Library 7,392,510 1,675,818 22.7%
Parks, Recreation & Community Services 15,206,990 3,252,623 21.4%
Planning & Building 20,146,220 3,738,648 18.6%
Police Department 146,805,550 36,148,804 24.6%
Public Works 50,075,950 9,099,603 18.2%
Transfers to Projects & Debt Service 31,003,550 6,348,973 20.5%
Unfunded Pension Liability Payment³30,665,470 11,444,377 37.3%
Total General Fund Expenditures 414,022,680 97,287,325 23.5%
¹CIP/Grant Carry Forwards weren't uploaded to Budget prior to September 30 closing
²Includes one month advanced payment made in July
³Includes $11.4 million pension liability payment made in July
As of September 30, 2023
Department
FY 23-24
Funded
Positons
GF
Vacancies
Non-GF
Vacancies
Total
Vacancies
Hiring
Freeze
Vacancies
Total
Funded
Vacancies
Vacancy
Rate
City Manager's Office 16 2 1 3 0 3 19%
City Attorney's Office 20 3 5 8 0 8 40%
City Clerk 7 2 0 2 0 2 29%
Community Development 72 0 14 14 0 14 19%
Finance & Management Services 69 3 2 5 0 5 7%
Information Technology 24 0 12 12 0 12 50%
Human Resources 32 0 3 3 0 3 9%
Planning & Building 102 8 5 13 0 13 13%
Police Department 640 67 2 69 6 63 11%
Parks, Recreation & Community Services 63 7 4 11 0 11 17%
Library 37 0 0 0 0 0 0%
Public Works 313 13 41 54 0 54 17%
Total 1395 105 89 194 6 188 14%