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Home My WebLink AboutItem 19 - Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments Finance and Management Services https://www.santa-ana.org/finance Item # 19 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report February 16, 2021 TOPIC: Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments AGENDA TITLE: Receive and File Fiscal Year 2020-2021 Mid-Year Budget Update and Approve Mid- Year Appropriation Adjustments (General Fund and Non-General Fund) RECOMMENDED ACTION 1. Receive and file Fiscal Year 2020-2021 (FY20-21) Mid-Year Budget Update, including revised revenue estimates. 2. Approve the recommended Mid-Year Appropriation Adjustments. (Exhibit 2) EXECUTIVE SUMMARY The Mid-Year budget update includes new information for General Fund activity, a vacancy report, and highlights of other funds with notable expected variances from the budget as of December 31, 2020. The report focuses on the General Fund, as it is the primary operating fund of the City. When the FY20-21 budget was prepared, there was very little information available to understand the effect of the pandemic on the City’s revenue stream and the City entered uncharted territory. With more data to analyze, staff recommends adjustments with a net favorable General Fund impact of $13.1 million. Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments February 16, 2021 Page 2 4 3 9 FY20-21 FY20-21 FY20-21 FY20-21 Original Updates Prior Midyear Updated Budget to Midyear**Updates Budget Beginning Balance 70,822,050$ 11,046,654$ -$ 81,868,704$ Revenue 307,392,970 500,000 15,695,173 323,588,143 Expenditures (307,026,470)(8,334,040)2,129,737 (313,230,773) Net Transfers (18,921,560)2,351,900 (4,720,600)(21,290,260) Net Activity (18,555,060)$ (10,932,890)$ Estimated Ending Balance 52,266,990$ 70,935,814$ Operating Reserve (16.67% of annual revenue)(51,242,408)(53,858,793) Economic Uncertainty Reserve (minimum 1%)(1,000,000)(3,230,881) Estimated Available at June 30, 2021 24,582$ 13,846,139$ **Updates prior to Midyear include City Council approved items such as carryover of unspent FY19-20 appropriations, sale of the YMCA Building, funding for Clean & Safe, and COVID-19 Testing. DISCUSSION General Fund Revenue The following table summarizes adjustments to General Fund revenue, and discussion follows. Description FY 19-20 Actuals FY 20-21 Budget FY 20-21 Update Mid-Year Adjustment Increase/ (Decrease) Property Tax 73,510,275 75,914,000 76,624,612 710,612 Sales Tax 107,504,119 98,103,900 110,631,000 12,527,100 Half-Cent Sales Tax (Safety)2,110,558 2,420,900 2,232,800 (188,100) Hotel Visitor's Tax 7,739,780 5,730,000 4,250,000 (1,480,000) Utility User Tax 21,710,236 24,300,000 22,650,000 (1,650,000) Business Tax 13,031,757 9,210,000 9,300,000 90,000 Medical Marijuana Taxes 701,367 525,000 1,150,000 625,000 Commercial Cannabis 754,718 500,000 1,200,000 700,000 Adult-Use Retail Business Cannabis 10,947,403 9,650,000 16,900,000 7,250,000 Paramedic Services Charge 7,188,651 8,300,000 5,500,000 (2,800,000) Parks, Recreation and Community Service Fees 1,584,037 1,887,100 380,863 (1,506,237) Planning and Building Fees 9,405,804 6,940,860 7,320,062 379,202 Parking Fines 5,111,477 4,000,000 4,900,000 900,000 Jail Revenue Facility 15,332,808 16,443,000 16,100,596 (342,404) AB 109 Revenues 472,159 -480,000 480,000 Other Revenue - No Adjustments Needed 48,597,351 43,968,210 43,968,210 - Total General Fund Revenue 325,702,500 307,892,970 323,588,143 15,695,173 General Fund Revenue Summary Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments February 16, 2021 Page 3 4 3 9 Property Tax and Property Tax in lieu of VLF: The Orange County Assessor’s Office releases assessed values after the City adopts its budget each year. Therefore, a Property Tax revenue adjustment at Midyear is normal. Staff assumed a 3.77% increase to assessed values when preparing the current year budget. The actual increase was 4.26%. Based on information provided by the City’s Property Tax consultant, including the rate of property tax collections, staff has increased the revenue estimate by a net $710,612. This includes an increase of $159,125 to correct the accounting for consulting costs previously netted against the revenue (discussed further below). Sales Tax (Bradley Burns & Measure X combined): Actual FY19-20 Sales Tax revenue was $107.5 million. With very little information available during budget preparation about the economic effect of the pandemic, staff anticipated a greater reduction of Sales Tax and reduced the original budget estimate to $98.1 million. Fortunately, taxable sales have not decreased as much as previously expected. In fact, the City has benefited from an increase in online sales. Based on detailed analysis from the City’s Sales Tax consultant, the latest conservative estimate is $110.6 million, and staff has increased the budget estimate by $12.5 million, accordingly. Half-Cent Sales Tax for Public Safety: The latest projections from the City’s Sales Tax consultant is $2.23 million and staff has decreased the budget estimate by $188,100, accordingly. Hotel Visitors’ Tax (HVT): Based upon the expected effect of the pandemic, staff had already decreased the HVT estimate by $2 million from the prior year actual of $7.7 million when the FY20-21 budget was prepared. Based on activity through December 2020, staff has decreased the HVT estimate by another $1.5 million. Utility Users’ Tax (UUT): At the time the UUT estimate was prepared for the current year budget, staff assumed the revenue would increase due to pandemic stay-at-home orders and expected audit activity. The City has recently hired a UUT consultant to conduct the audits and the City may collect additional revenue by the end of the calendar year. In the meantime, staff is reducing the UUT revenue estimate back down to the actual FY18-19 level of $22.65 million. Business License Tax: Based upon the expected impact of the pandemic, staff decreased the revenue estimate from the FY19-20 actual figure of $13 million to a conservative estimate of $9.2 million for the current year. For the first six months of the year, business license tax is doing a little better than expected, and staff is increasing the revenue estimate by $90,000. However, 79% of annual business license tax is collected in the second half of the fiscal year. The $90,000 increase reflects a conservative first step towards adjusting the revenue upwards. Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments February 16, 2021 Page 4 4 3 9 Cannabis Tax Revenues: Adult-Use Retail Cannabis tax for FY19-20 was $10.9 million. Staff expected a modest decrease of the revenue related to the pandemic. The tax revenue is performing well and it is expected to reach $16.9 million for the current fiscal year. The resulting increase to the revenue estimate is $7,250,000. Similarly, the City has increased the Commercial Cannabis tax estimate by $700,000. Both of these revenue sources are subject to City Council Ordinance NS-2959 requiring a two-thirds set-aside. As a result, the net increase to the General Fund is only $2,650,000, as $5,300,000 will transfer to the Cannabis Public Benefit Fund. Medical Cannabis tax is not subject to the Ordinance, and staff has increased the revenue estimate by $625,000. Paramedic Services Charges: Actual FY19-20 revenue was $7.2 million, with an expected an increase of $1.1 million due to the pandemic. Once more, it has been found that the pandemic has had an opposite effect than expected. There are less 9-1- 1 calls for ambulance transport, as residents want to avoid COVID-19 at the hospitals. In addition, hospitals are overwhelmed, and first responders are not recommending ambulance transport in many cases. Finally, due to financial hardships, the rate of collecting payment has decreased. Therefore, staff has reduced the revenue estimate to $5.5 million, which is $2.8 million less than the original budget estimate. Parks, Recreation and Community Service Fees: Staff reduced the revenue estimates from $2.6 million in the prior year to $1.9 million for the current year. The pandemic has significantly delayed the operation of recreation programs and facility usage, and allowed for only intermittent zoo operations. As the pandemic has effected PRCSA operations for much longer than originally anticipated, staff has decreased the revenue estimated by another $1.5 million. This report also includes a corresponding reduction of expenditures of $1.35 million. Planning and Building Charges and Fees: The City received $11.2 million of Planning and Building revenue in FY19-20. The current budget includes a revenue estimate of $8.8 million. Permitting activity is a little better than expected, and staff has increased the revenue estimate by $0.4 million. Jail Revenue: Actual FY19-20 revenue was $15.3 million. The FY20-21 budget was prepared with an assumption that the third Jail module would be open and the revenue estimate was set at $16.4 million. The City has not been able to hire enough Correctional Officers to open the third module. Effective November 1, 2020, the rates paid by the U.S. Marshals increased, which has generated additional revenue. Therefore, the net decrease to our revenue estimate is only $342,404. At this time, it was expected that the third Jail module would open toward the end of the calendar year. Parking Fines: Actual FY19-20 Parking Fine revenue was $5.1 million, and staff reduced the FY20-21 estimate to $4 million due to enforcement reductions during the Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments February 16, 2021 Page 5 4 3 9 pandemic. Based on the first six months of activity, this revenue has done a little better than expected and staff has increased the revenue estimate by $0.9 million. General Fund Expenditures As of December 2020, General Fund expenditures are nearly 3% less than budget. This is a result of reduced spending in PRCSA and support from the CARES Act for supplies, outreach programs, and staffing. Exhibit 2 includes a table of recommended adjustments. Discussion follows for notable items. Non- Departmental: The City has experienced an increase in litigation activity requiring the use of outside attorneys. On December 1, 2020, the City approved an agreement with King and Spalding and noted the expected increase to litigation expenditures. Staff proposes to increase contract services by $1.0 million. As noted above, Cannabis revenue increases have resulted in an increase to the Cannabis Public Benefit to comply with the ordinance. Therefore, staff proposes to increase the transfer by $5.3 million for the remainder of the fiscal year. The Civic Center JPA reduced its budget due to a reduction in Civic Center parking revenue and the City’s current year contribution decreased by $579,400. In addition, there are two adjustments necessary to decrease the Civic Center fund budget by $1.5 million in alignment with the JPA adopted budget. Parks, Recreation and Community Services: The FY19-20 budget included an allocation to complete the Center Street Project at Jerome Park. Staff inadvertently missed a carryover of the unspent budget from FY19-20 to FY20-21 and staff proposes restoring the unspent budget of $119,600 to complete the project. As noted above, the pandemic effected PRCSA operations and staff recommends reducing the PRCSA budget by $1.35 million to reflect the temporary program savings. The proposed FY21-22 budget will likely include amounts reflecting a return to normal activity. Police Department: On September 15, 2020, the City Council approved the COPS grant to fund 10 new Police Officers. The grant necessitated a General Fund matching contribution of $127,721 for FY20-21. Staff did not request the General Fund appropriation at the same time the City Council approved the grant. Staff recommends an adjustment to appropriate the General Fund match. The County provides annual funding for the supervision of subjects who are on the Post Release Community Supervision program (AB109). The program activity has increased for FY20-21 and both the revenue estimate and corresponding appropriation should increase by $480,000, with no net impact to the General Fund. Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments February 16, 2021 Page 6 4 3 9 The City was able to use a portion of its federal CARES allocation to pay for Police COVID-19 response. Additional overtime costs related to public protests and the absorption of four Police Officers previously funded by the Parking Enterprise offset the savings. As discussed further below, Parking Garage revenue is insufficient to fund all Parking Enterprise commitments to the downtown business community. Fire Services: The City was able to use a portion of its federal CARES allocation to pay for Orange County Fire Authority’s COVID-19 response to Santa Ana residents. As such, staff recommends a reduction to General Fund appropriations of $2,736,183 to reflect the savings. Finance & Management Services: On January 19, 2021, the City Council approved proposed agreements for property tax and utility users’ tax consultants to provide auditing and projection of related revenues. Previously, staff recorded the cost of these agreements as an offset in the revenue accounts. To improve the transparency of accounting practices, staff will begin recording the cost of the agreements in a expenditure account, and record the gross revenue instead of net revenue. As such, both the revenue estimate and corresponding appropriation will increase by $159,125 with no net fiscal impact to the General Fund. To market CARES and Advanced Meter Infrastructure (AMI) programs, the City has increased its usage of printing services, and staff proposes an appropriation increase of $50,000. In support of the City Council goal to modernize operations, staff proposes to update its credit card payment system from card-swipe to Chip & PIN to comply with Payment Card Industry (PCI) standards. The cost of this update is $20,000. Community Development Agency: CDA is primarily a grant-funded agency. The administrative allowances for grant funds such as the Workforce Innovations and Opportunities Act (WIOA) and Housing Programs have decreased over the years, yet the administrative burden to ensure compliance with grant requirements has increased. The result is a need for ongoing General Fund subsidy to support the continued administration of these programs. Due to the receipt of additional federal funding this year related to the pandemic, there is no requested adjustment at this time. However, staff expects a General Fund subsidy may be necessary for future periods. OTHER FUNDS Cannabis Public Benefit Fund: The City Council established the Cannabis Public Benefit Fund for Youth and Enforcement Programs utilizing two-thirds of the Adult-Use Retail and Commercial Cannabis tax revenue collected in the General Fund. With an increase in these revenues, the corresponding transfer to this fund must increase by $5.3 million. The additional funding will be available to appropriate as part of the FY21- Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments February 16, 2021 Page 7 4 3 9 22 Budget. Community Development Agency: Prior to the pandemic, downtown parking revenue was already insufficient to fund all of the Parking Enterprise commitments such as dedicated police patrols, funding for the Clean & Safe program, contributions to the downtown business groups, holiday lights, and operational costs of the City parking garages. The pandemic has exacerbated the situation. At this time, it is expected that the Parking Enterprise Fund may end the fiscal year with a negative $1.2 million fund balance, and a request for a one-time General Fund subsidy is likely forthcoming. Staff is working through options to reduce costs, and may be able to mitigate some of the challenges. Therefore, staff will not request an adjustment until potential strategies are identified. Staff recommends $0.6 million of net adjustments to various grant fund revenues and expenditures to align the budget with actual funding available. This includes the adjustment of a revenue estimate for investment income in one of the grant funds, included in the budget document in error. CARES Act Adjustments: The City is required to record investment income in the three CARES Act special revenue funds, and appropriate the income for CARES related expenses. The total amount of these adjustments is $95,500 for both revenue and expenditures, with no net fiscal impact. Planning & Building: Activity to board up vacant and/or abandoned property has increased. The cost for this service is reimbursable and billed to the property owner. The recommended increase to both revenue and expense is $15,000, with no net fiscal impact. Police Department: On June 16, 2020, the City Council approved an agreement with Human Options as part of a Department of Justice Grant for the Violence Against Women program. The program provides funding to investigate domestic violence cases, update cases in the Police Department’s Report Management System, and assist with the mobile domestic violence response team comprised of a Human Options domestic violence advocate and a Santa Ana Special Crimes detective or police officer. Grant funding of $194,720 is available for the FY20-21, and staff recommends adjustments to revenue and expense, with no net fiscal impact. Fire Facilities Fund: A $150,800 revenue adjustment is included to capture actual receipts. The fund is restricted to improving City-owned fire facilities. Public Works: The League of California Cities Fiscal Policy Advisor has updated estimates for current-year Gas Tax revenue, resulting in a net revenue increase of $52,245. Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments February 16, 2021 Page 8 4 3 9 Staff missed the opportunity to carry over $7 million of unspent water project budgets from FY19-20 to FY20-21. Recommended adjustments with this report will appropriate the unspent budget from the prior period. The Water Enterprise fund transfers the unspent funding to a Water Capital Project fund for expenditure. The FY20-21 budget included a $1.1 million General Fund subsidy for the Santa Ana Regional Transportation Center (SARTC), as revenue is insufficient to maintain operations. Even with the subsidy, it appears the SARTC fund balance may be negative $2.2 million by the end of the current fiscal year. Staff does not request an adjustment at this time, pending final numbers for the current year; but a long-term solution is necessary and the proposed FY21-22 budget will likely contain another request for a subsidy. Internal Charges and Indirect Costs: The City annually updates internal charges and indirect cost allocations. Internal charges to departments pay for centralized programs such as Building Maintenance, Fleet, Information Technology, and Benefits Administration. Due to increased costs of service, staff expects to propose an increase to the internal charges with the proposed FY21-22 budget. VACANCY REPORT Exhibit 1 includes the staff vacancy report is as of December 31, 2020. It reflects all staffing changes authorized to date, such as the transfer of animal services staff from the Police Department to the Planning and Building Agency. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT The summary of General Fund fiscal impact appears at the beginning of this report, and staff has listed all recommended adjustments in Exhibit 2. EXHIBIT(S) 1. PowerPoint Summary of Fiscal Year 2020-2021 Mid-Year Report 2. List of Recommended Adjustments Submitted By: Kathryn Downs, CPA, Executive Director – Finance and Management Services Agency Approved By: Kristine Ridge, City Manager City Council Meeting ‐February 16, 2021EXHIBIT 1 Net General Fund Impact2FY20‐21 FY20‐21 FY20‐21 FY20‐21Original Updates Prior Midyear UpdatedBudget to Midyear** Updates BudgetBeginning Balance 70,822,050$ 11,046,654$ ‐$ 81,868,704$ Revenue 307,392,970 500,000 15,695,173 323,588,143 Expenditures (307,026,470) (8,334,040) 2,129,737 (313,230,773) Net Transfers (18,921,560) 2,351,900 (4,720,600) (21,290,260) Net Activity (18,555,060)$ (10,932,890)$ Estimated Ending Balance 52,266,990$ 70,935,814$ Operating Reserve (16.67% of annual revenue) (51,242,408) (53,858,793) Economic Uncertainty Reserve (minimum 1%) (1,000,000) (3,230,881) Estimated Available at June 30, 2021 24,582$ 13,846,139$ **Updates prior to Midyear include City Council approved items such as carryover of unspent FY19‐20appropriations, sale of the YMCA Building, funding for Clean & Safe, and COVID‐19 Testing. Mid‐Year General Fund Revenues2DescriptionFY 19‐20 ActualsFY 20‐21 BudgetFY 20‐21 UpdateMid‐Year AdjustmentIncrease/(Decrease)Property Tax 73,510,275 75,914,000 76,624,612 710,612 Sales Tax 107,504,119 98,103,900 110,631,000 12,527,100 Half‐Cent Sales Tax (Safety) 2,110,558 2,420,900 2,232,800 (188,100) Hotel Visitor's Tax 7,739,780 5,730,000 4,250,000 (1,480,000) Utility User Tax 21,710,236 24,300,000 22,650,000 (1,650,000) Business Tax 13,031,757 9,210,000 9,300,000 90,000 Medical Marijuana Taxes 701,367 525,000 1,150,000 625,000 Commercial Cannabis 754,718 500,000 1,200,000 700,000 Adult‐Use Retail Business Cannabis 10,947,403 9,650,000 16,900,000 7,250,000 Paramedic Services Charge 7,188,651 8,300,000 5,500,000 (2,800,000) Parks, Recreation and Community Service Fees 1,584,037 1,887,100 380,863 (1,506,237) Planning and Building Fees 9,405,804 6,940,860 7,320,062 379,202 Parking Fines 5,111,477 4,000,000 4,900,000 900,000 Jail Revenue Facility 15,332,808 16,443,000 16,100,596 (342,404) AB 109 Revenues 472,159 ‐ 480,000 480,000 Other Revenue ‐ No Adjustments Needed 48,597,351 43,968,210 43,968,210 ‐ Total General Fund Revenue325,702,500 307,892,970 323,588,143 15,695,173 Mid‐Year General Fund Expenditures4DepartmentsFY 19‐20 ActualFY 20‐21 Revised BudgetFY 20‐21 RecommendationMid‐Year AdjustmentIncrease/(Decrease)City Manager1,824,320 1,727,880 1,727,880 0City Council486,568 489,780 489,780 0Non‐Departmental38,739,471 42,997,316 43,997,316 1,000,000Transfers to Projects and Debt Service20,842,656 18,782,560 23,503,160 4,720,600Clerk of the Council1,720,280 1,457,539 1,457,539 0City Attorney's Office2,789,266 3,034,052 3,034,052 0Human Resources1,920,922 2,980,806 2,980,806 0Finance & Management Services8,562,960 9,397,131 9,626,256 229,125Library4,441,286 5,528,789 5,528,789 0Bowers Museum1,472,977 1,473,430 1,473,430 0Parks and Recreation Services Agency19,152,017 24,528,322 23,297,922 (1,230,400)Police Department132,321,041 134,568,391 135,176,112 607,721Fire Department*46,841,773 49,470,160 46,733,977 (2,736,183)Planning & Building Agency11,432,580 17,109,032 17,109,032 0Public Works Agency15,696,326 16,644,258 16,644,258 0Community Development2,611,990 4,232,874 4,232,874 0Total General Fund Expenditures: 310,856,434 334,422,320 337,013,183 2,590,863 Vacancy Report as of Dec. 315DepartmentFY 20‐21 Adopted PositonsGF VacanciesNon‐GF VacanciesTotal Hiring Freeze VacanciesTotal Funded VacanciesCity Manager's Office10 1 0 10City Attorney's Office15 2 0 20Clerk of the Council63030Community Development48 1 4 05Finance & Management Services62 7 0 52Information Technology24 0 9 09Human Resources27 2 1 12Planning Building75 17 2 109Police Department6293461030Parks & Rec Services Agency79 17 5 616Library26 5 0 32Public Works Agency234 9 53 458Total 1235 98 80 45 133 General Fund Revenue AdjustmentsDescriptionFY 19‐20 ActualFY 20‐21 BudgetFY 20‐21 UpdateMid‐Year AdjustmentIncr/(Decr)Property Tax38,846,49139,600,00040,551,352951,352Prop Tax‐In Lieu VLF34,663,78436,314,00036,073,260(240,740)Sales Tax45,707,16242,975,60049,198,3006,222,700Sales Tax Measure X61,796,95755,128,30061,432,7006,304,400Half‐Cent Sales Tax (Safety)2,110,5582,420,9002,232,800(188,100)Hotel Visitor's Tax7,739,7805,730,0004,250,000(1,480,000)Utility User Tax‐Electric11,001,74512,750,00011,775,000(975,000)Utility User Tax‐Gas2,434,2832,150,0002,325,000175,000Utility User Tax‐Telephone5,399,2715,900,0005,000,000(900,000)Utility User Tax‐Water2,874,9373,500,0003,550,00050,000Business Tax13,031,7579,210,0009,300,00090,000Medical Marijuana Taxes701,367525,0001,150,000625,000Commercial Cannabis‐Cultivation87,72720,000200,000180,000Commercial Cannabis ‐ Distribution444,825250,000800,000550,000Commercial Cannabis‐Manufacturing102,32960,000100,00040,000Commercial Cannabis ‐ Testing 119,837170,000100,000(70,000)Adult‐Use Retail Business Cannabis10,947,4039,650,00016,900,0007,250,000Paramedic Services Charge7,188,6518,300,0005,500,000(2,800,000)Center Programs68,84260,1000(60,100)Youth Sports32,93620,5000(20,500)Youth Field Usage Fee56,42553,6000(53,600)Park Reservation160,384133,8000(133,800)Zoo Education73,81577,5000(77,500)Zoo Admissions718,6911,046,900300,000(746,900)EXHIBIT 2 General Fund Revenue AdjustmentsDescriptionFY 19‐20 ActualFY 20‐21 BudgetFY 20‐21 UpdateMid‐Year AdjustmentIncr/(Decr)Food Sale Concession 15,657 25,200 0 (25,200)Leisure Classes 152,247 172,100 0 (172,100)City Events 35,573 44,000 7,500 (36,500)Recreation Facility Rental 20,971 25,900 927 (24,973)Rental Of Stadium 128,728 93,700 12,436 (81,264)Friend Of Zoo Vet Contribution 60,000 45,000 30,000 (15,000)Friend of Zoo Contribution 19,768 58,800 10,000 (48,800)Friend of Zoo Education Contribution 40,000 30,000 20,000 (10,000)Building Permits 1,634,989 1,517,100 1,547,500 30,400Plumbing Permits 313,850 336,900 343,700 6,800Electrical Permits 761,526 678,900 760,400 81,500Heating Permits 481,851 448,400 457,400 9,000Adult‐Use Cannabis Retail Safety Permit 223,591 0 100,236 100,236Commercial Cannabis Distrib Safety Permit 21,688 120,860 215,279 94,419Building Plan Check 2,957,026 1,850,900 1,888,000 37,100Electrical Plan Check 382,672 230,200 280,900 50,700Plumbing Plan Check 191,675 135,700 138,500 2,800Mechanical Plan Check 347,718 182,900 186,600 3,700Land Use Certificate Processing 512,146 650,000 552,500 (97,500)Site Plan Review Charge 813,695 585,000 245,047 (339,953)PREP Fees 763,377 204,000 604,000 400,000AB 109 Revenues 472,159 0 480,000 480,000Parking Fines 5,111,477 4,000,000 4,900,000 900,000Jail Revenue Facility ‐ US Marshalls 11,189,220 12,209,400 12,154,219 (55,181)Jail Revenue Facility ‐ Bureau of Prisons 622,623 869,400 1,267,451 398,051Jail Revenue Facility ‐ US Marshalls 3,520,965 3,364,200 2,678,926 (685,274)Other Revenues ‐ No Adjustments Needed 48,597,351 43,968,210 43,968,210 0Total General Fund Revenue Adjustments325,702,500 307,892,970 323,588,143 15,695,173 General Fund Expenditure & Transfer AdjustmentsDepartment Accounting Unit Account Description of AdjustmentRevenue Increase/(Decrease)Expenditure Increase/(Decrease)Non‐Departmental 01105015 62300 Increased Litigation Costs 1,000,000General Revenue 01102002 50011Revenue increase to correct accounting for tax consultants. Expenditure was previously netted against revenue. This amount is included in the General Fund Revenue Schedule.159,125Finance & Management Services 01110130 62300Expenditure increase to correct accounting for tax consultants. Expenditure was previously netted against revenue.159,125Finance & Management Services 01110130 62300 Increased usage of Infosend related to AMI and CARES. 50,000Finance & Management Services 01110130 62300Update payment method from card swipe (projected to be obsolete) to Chip & PIN for PCI compliance.20,000Parks & Recreation Services Programs 01113250 66220Re‐budget unspent project balance from FY19‐20 for UGG Center Street Project at Jerome Park.119,600Police Department 01114420 61000General Fund match for COPS grant approved by City Council on September 15, 2020.127,721Police Department 01114420 50506AB109 revenue increase from County. This amount is included in the General Fund Revenue Schedule.480,000Police Department 01114420 61040Expenditure of additional AB109 revenue from the County for the Post Release Community Supervision Program.480,000Fire Department 01115330 62300 CARES reimbursement for OCFA COVID‐19 response. (2,736,183)Parks & Recreation Community Services 01113200 61000 Recreation Program reductions due to COVID‐19 (275,000)Parks & Recreation Community Services 01113220 61000 Recreation Program reductions due to COVID‐19 (130,000)Parks & Recreation Community Services 01113230 61000 Recreation Program reductions due to COVID‐19 (610,000)Parks & Recreation Community Services 01113250 61000 Recreation Program reductions due to COVID‐19 (335,000)Transfers Out 01106019 68000‐012TRANSFER to Cannabis Public Benefit Fund for increased Adult‐Use Retail and Commercial Cannabis tax revenue5,300,000Transfers Out 01106019 68000‐074 TRANSFER to Civic Center Authority Fund for City's contribution (579,400)Net General Fund Expenditures & Transfers639,125 2,590,863Revenue shown here illustrates the direct offset to costs, and has already been included in General Fund Revenue Schedule Other Fund Adjustments (1 of 2)Department Accounting Unit Account Description of AdjustmentRevenue Increase/(Decrease)Expenditure Increase/(Decrease)Cannabis Public Benefit Fund 01202002 59000‐11Transfer from General Fund for increased Adult‐Use Retail and Commercial Cannabis tax revenue5,300,000Public Works ‐ Gas Tax 02917002 52300 Updated revenue estimate from League of California Cities 11,313Public Works ‐ Gas Tax 02917002 52301 Updated revenue estimate from League of California Cities (64,818)Public Works ‐ Gas Tax 02917002 52302 Updated revenue estimate from League of California Cities 123,032Public Works ‐ Gas Tax 02917002 52320 Updated revenue estimate from League of California Cities (239,945)Public Works ‐ Gas Tax 02917002 52321 Updated revenue estimate from League of California Cities 222,663Public Works ‐Water Fund 06017002 50001Use of unspent Water Enterprise Fund balance for capital projects6,994,971Public Works ‐Water Fund 06017019 68000‐66 Transfer to the Water Capital construction fund 6,994,971Public Works ‐Water Fund 06617002 59000‐60 Transfer from the Water Enterprise Fund 6,994,971Public Works ‐Water Fund 06617002 66400 Water Capital Project Appropriations 6,994,971Civic Center Authority 07413002 59000‐11Transfer from General Fund for decreased contribution to Civic Center Authority(579,400)Civic Center Authority ‐ Maintenance 07413250 6XXXX Adjustment to reflect Civic Center Authority Adopted Budget (397,994)Civic Center Authority ‐ Capital Projects 07413260 66220 Adjustment to reflect Civic Center Authority Adopted Budget (1,086,788)Fire Facilities Fund 12015002 53700 Updated revenue estimate 150,800 Other Fund Adjustments (2 of 2)Department Accounting Unit Account Description of AdjustmentRevenue Increase/(Decrease)Expenditure Increase/(Decrease)PD ‐ Dept. of Justice Grant 12714002 52001Human Options grant approved by City Council on June 16, 2020 needs to be recognized in FY20‐21 budget.194,720PD ‐ Dept. of Justice Grant 12714406 61040Appropriation of Human Options grant approved by City Council on June 16, 2020.190,000PD ‐ Dept. of Justice Grant 12714406 62120Appropriation of Human Options grant approved by City Council on June 16, 2020.4,720CARES Act Fund ‐ CDA 17318002 58000 Recognize investment earnings 5,500CARES Act Fund ‐ CDA 17318810 62330 Appropriate investment earnings 5,500CARES Act Fund ‐ County 17410002 58000 Recognize investment earnings 15,000CARES Act Fund ‐ County 17410100 63001 Appropriate investment earnings 15,000CARES Act Fund ‐ State 17602002 58000 Recognize investment earnings 75,000CARES Act Fund ‐ State 17603010 62325 Appropriate investment earnings 75,000PBA ‐ Special Repair/Demolition Fund 12116002 53507 Projected increase of cost recovery for boarding fees ‐ Revenue 15,000 PBA ‐ Special Repair/Demolition Fund 1211654 62300 Projected increase of cost recovery for boarding fees ‐ Expense 15,000CDA ‐ WIOA Grant 12318XXX VariousGrant adjustment based on actual award. Original budget included estimate.(310,000)CDA ‐ Neighborhood Stabilization Program 14218002 58000 Investment earnings was overstated in error. (1,352,180)CDA ‐ Neighborhood Stabilization Program 14218761 68000‐135Reduce appropriations to fit actual fund balance available at June 30, 2020.(161,180)CDA ‐ Prison to Employment Program 14418760 52001 Recognize estimated reimbursement available for this program. 1,215,000 Other Fund Adjustments (1 of 2) Department Accounting Unit Account Description of Adjustment Revenue Increase/ (Decrease) Expenditure Increase/ (Decrease) Original Public Works -Water Fund 06617002 66400 Water Capital Project Appropriations 6,994,971 Revised Public Works -Water Fund 06617002 50001 Water Capital Project Appropriations (6,994,971) Other Fund Adjustments (2 of 2) Department Accounting Unit Account Description of Adjustment Revenue Increase/ (Decrease) Expenditure Increase/ (Decrease) Original PBA - Special Repair/Demolition Fund 1211654 62300 Projected increase of cost recovery for boarding fees - Expense 15,000 Revised PBA - Special Repair/Demolition Fund 12116540 62300 Projected increase of cost recovery for boarding fees - Expense 15,000 City Council Meeting ‐ February 16, 2021 Net General Fund Impact2FY20‐21 FY20‐21 FY20‐21 FY20‐21Original Updates Prior Midyear UpdatedBudget to Midyear** Updates BudgetBeginning Balance 70,822,050$ 11,046,654$ ‐$ 81,868,704$ Revenue 307,392,970 500,000 15,695,173 323,588,143 Expenditures (307,026,470) (8,334,040) 2,129,737 (313,230,773) Net Transfers (18,921,560) 2,351,900 (4,720,600) (21,290,260) Net Activity (18,555,060)$ (10,932,890)$ Estimated Ending Balance 52,266,990$ 70,935,814$ Operating Reserve (16.67% of annual revenue) (51,242,408) (53,858,793) Economic Uncertainty Reserve (minimum 1%) (1,000,000) (3,230,881) Estimated Available at June 30, 2021 24,582$ 13,846,139$ **Updates prior to Midyear include City Council approved items such as carryover of unspent FY19‐20appropriations, sale of the YMCA Building, funding for Clean & Safe, and COVID‐19 Testing. Mid‐Year General Fund Revenues2DescriptionFY 19‐20 ActualsFY 20‐21 BudgetFY 20‐21 UpdateMid‐Year AdjustmentIncrease/(Decrease)Property Tax 73,510,275 75,914,000 76,624,612 710,612 Sales Tax 107,504,119 98,103,900 110,631,000 12,527,100 Half‐Cent Sales Tax (Safety) 2,110,558 2,420,900 2,232,800 (188,100) Hotel Visitor's Tax 7,739,780 5,730,000 4,250,000 (1,480,000) Utility User Tax 21,710,236 24,300,000 22,650,000 (1,650,000) Business Tax 13,031,757 9,210,000 9,300,000 90,000 Medical Marijuana Taxes 701,367 525,000 1,150,000 625,000 Commercial Cannabis 754,718 500,000 1,200,000 700,000 Adult‐Use Retail Business Cannabis 10,947,403 9,650,000 16,900,000 7,250,000 Paramedic Services Charge 7,188,651 8,300,000 5,500,000 (2,800,000) Parks, Recreation and Community Service Fees 1,584,037 1,887,100 380,863 (1,506,237) Planning and Building Fees 9,405,804 6,940,860 7,320,062 379,202 Parking Fines 5,111,477 4,000,000 4,900,000 900,000 Jail Revenue Facility 15,332,808 16,443,000 16,100,596 (342,404) AB 109 Revenues 472,159 ‐ 480,000 480,000 Other Revenue ‐ No Adjustments Needed 48,597,351 43,968,210 43,968,210 ‐ Total General Fund Revenue325,702,500 307,892,970 323,588,143 15,695,173 Mid‐Year General Fund Expenditures4DepartmentsFY 19‐20 ActualFY 20‐21 Revised BudgetFY 20‐21 RecommendationMid‐Year AdjustmentIncrease/(Decrease)City Manager1,824,320 1,727,880 1,727,880 0City Council486,568 489,780 489,780 0Non‐Departmental38,739,471 42,997,316 43,997,316 1,000,000Transfers to Projects and Debt Service20,842,656 18,782,560 23,503,160 4,720,600Clerk of the Council1,720,280 1,457,539 1,457,539 0City Attorney's Office2,789,266 3,034,052 3,034,052 0Human Resources1,920,922 2,980,806 2,980,806 0Finance & Management Services8,562,960 9,397,131 9,626,256 229,125Library4,441,286 5,528,789 5,528,789 0Bowers Museum1,472,977 1,473,430 1,473,430 0Parks and Recreation Services Agency19,152,017 24,528,322 23,297,922 (1,230,400)Police Department132,321,041 134,568,391 135,176,112 607,721Fire Department*46,841,773 49,470,160 46,733,977 (2,736,183)Planning & Building Agency11,432,580 17,109,032 17,109,032 0Public Works Agency15,696,326 16,644,258 16,644,258 0Community Development2,611,990 4,232,874 4,232,874 0Total General Fund Expenditures: 310,856,434 334,422,320 337,013,183 2,590,863 Vacancy Report as of Dec. 315DepartmentFY 20‐21 Adopted PositonsGF VacanciesNon‐GF VacanciesTotal Hiring Freeze VacanciesTotal Funded VacanciesCity Manager's Office10 1 0 10City Attorney's Office15 2 0 20Clerk of the Council63030Community Development48 1 4 05Finance & Management Services62 7 0 52Information Technology24 0 9 09Human Resources27 2 1 12Planning Building75 17 2 109Police Department6293461030Parks & Rec Services Agency79 17 5 616Library26 5 0 32Public Works Agency234 9 53 458Total 1235 98 80 45 133