Agenda Packet_2024-03-19 - Laserfiche WebLink

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Early Direction for the Fiscal Year 2024-25 Budget March 19, 2024 Page 2 Budget Process The City will conduct its internal budget meetings with departments from March 25 to April 5 to receive supplemental budget requests and staff priorities. After comparing the requests to City Council priorities received during Early Direction and community priorities received during budget outreach, Finance will work with the City Manager's Office to build a proposed budget for City Council consideration in May. Citv Council Priorities Identified to Date City Council Members have identified some of their top priorities to address during the budget process. Exhibit 1 includes a list of those priorities, along with additional information and recommendations for each. GENERALFUND The recurring portion of the FY 2023-24 (current year) General Fund budget is summarized below. Revenue $400,824,370 Spending ($400,811,075) Net Recurring Activity $13,295 With costs increasing faster than revenue sources, we expect the FY 2024-25 budget will be difficult to balance. Receiving Early Direction from City Council will help staff develop a balanced proposed budget that meets the needs of the community. General Fund Ten -Year Outlook The General Fund Ten -Year Outlook has been updated with the latest information available. The following assumptions were used: • Only recurring revenues and spending were included; • Property Tax estimates from consultant for FY 2024-25 through FY28-29, 3% increase thereafter; • Sales Tax estimates from consultant for FY 2024-25 through FY 2029-30, 3% increase thereafter; • Inflation Factor for all other revenues: increase of Consumer Price Index as forecasted by CA Department of Finance for FY 2024-25 through FY 2026-27 (2.4%, 2.6%, 2.7%) and 3% thereafter; • Labor at the top of the range: negotiated increases of 3% for FY 2024-25, Inflation Factor thereafter; • For labor below the top of the range, use the same 3% as above + 5% merit step increases; • Orange County Fire Authority contract increase of 4.5% annually; • Contribution to OC Street Car operations beginning November 2025, increasing by Inflation Factor; • Debt retirements (Police Building, City Hall Annex, 800Mhz communication system, Streetlights); City Council 26 — 2 3/19/2024