Item 20 - Proposed Fiscal Year 2025-26 Mid-Year Budget Update

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Proposed Fiscal Year 25-26 Mid -Year Budget Update, Appropriation Requests, Workforce Changes, and Capital Improvement Program Amendment March 3, 2026 Page 9 Compensation Claims Process and Procedures training. This training will be incorporated into onboarding for all new timekeepers, managers, supervisors, and staff. In addition, the Safety Manager and the Organizational Development and Training team are developing online training resources to promote safer workplaces. HR has also engaged with peer agencies to identify best practices for working with contracted physicians to improve treatment processes and facilitate earlier return -to -work outcomes for injured employees. Section 457 Admin Fund The City offers a Section 457 retirement savings plan that allows employees to set aside a portion of their pay on a pre-tax basis for retirement. In the past, the plan used a revenue -sharing structure, where a portion of investment fees was used to help cover administrative costs. This required maintaining a balance in Fund 100. The plan has since moved to a flat, or "level," fee structure, which is more cost-effective and transparent for employees. Under this structure, revenue sharing is no longer used, and the remaining balance associated with the prior structure was distributed to plan participants. During the year-end review, staff identified that while these funds were paid out, the related balance was not cleared from the City's accounting system. Staff is now requesting approval to clear the remaining balance of $46,407 so the fund accurately reflects that no balance remains. Fire Facilities Fund The Fire Facilities Fund receives revenue from permit fees on large new construction projects that are more than two stories tall. These fees are collected during the permitting process and may be used only for fire -related purposes, such as maintaining facilities where firefighting equipment is housed or purchasing firefighting equipment. This fiscal year, there are up to four eligible projects in the pipeline. So far, the Fund has generated $43,060 with additional revenue expected before year-end. Staff recommends a conservative approach, recognizing $50,000 in revenue and appropriating the same amount to cover updated Orange County Fire Authority (OCFA) facilities maintenance costs for the current fiscal year. If the additional expected revenue is not received, actual spending will be limited to the fund's cash on hand. Workforce Innovation and Opportunity Act Fund The Workforce Innovation and Opportunity Act (WIOA) program provides workforce development services for adults, youth, and individuals with disabilities and supports coordination with education and training partners. The City received a WIOA award totaling more than $2.9 million, available for use over two years. Of this amount, $730,905 was expended in the first year, leaving approximately $1.57 million available in the current fiscal year. Due to timing differences between expenditure report submissions and carryforward requests, the City Council previously approved a $1.068 million carryforward, which is less than the total available allocation. The requested