Item 15 - Early Direction for the Fiscal Year 2025-26 Budget

Home Browse Search

Early Direction for the Fiscal Year 2025-26 Budget March 18, 2025 Page 12 Based on this information, an increase of up to 4.76% is justified, ensuring the City remains in compliance with state law. Staff seeks City Council concurrence on a recommended a 4.76% increase in miscellaneous fees for FY 2025-26 budget. Tariff Impact on Sales Tax Staff contacted our Sales Tax Consultant regarding an analysis of the Federal tariff impact on the City's sales tax revenue. However, due to significant uncertainty surrounding the tariffs themselves, there is not enough solid information to accurately assess potential impacts. Additionally, in UCLA's Economic Forecast released on March 5, 2025, emphasized that conditions remain too uncertain to make definitive projections. As a result, they have opted to hold their forecast the same until more data becomes available. Staff will continue to monitor the situation and provide updates as new information emerges. New Requirement: Assembly Bill 2561 - Job Vacancies and Recruitment Efforts As part of the new requirements outlined in Assembly Bill 2561 (AB 2561), effective January 1, 2025, local public agencies in California must address job vacancies and enhance recruitment and retention efforts. This bill mandates that local governments conduct an annual public hearing to present the current status of job vacancies, strategies for recruitment and retention, and any obstacles in the hiring process, along with potential solutions. The public hearing must occur before the final adoption of the budget if an annual or multiyear budget is adopted during the fiscal year. Additional details on these requirements are provided in Exhibit 2. Staff plans to incorporate this new requirement as part of the upcoming budget public hearing in June. During this session, staff will present the necessary information to comply with AB 2561, including the status of job vacancies, recruitment strategies, and any identified barriers to hiring. Staff will also provide additional reporting if any bargaining units have a vacancy rate that exceeds 20% of their authorized positions, as required by the bill. Additionally, recognized employee organizations representing a bargaining unit will have the opportunity to present during the public hearing regarding vacancies and recruitment efforts for positions within their unit. Evaluation of vacancies and hiring decisions continue to ensure program capacity is maintained while avoiding any additional financial strain, particularly in light of projected revenue shortfalls in the coming years. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action.