Report Prepared by: Stephanie R. Dietz, City Manager
Title
SUBJECT: Continued Public Hearing to Allow Interested Persons to be Heard Regarding the City Council, Public Financing and Economic Development Authority, and Parking Authority Fiscal Year 2021-22 Budget, Adoption of the Budget with Revision(s), if any, and Appropriation of the Revenue and Approval of the Capital Projects for Each Respective Budget
REPORT IN BRIEF
Continued Public Hearing and adoption of the Fiscal Year 2021-22 City Council, Public Financing and Economic Development Authority, and Parking Authority Budget.
RECOMMENDATION
City Council - Adopt a motion:
A. Adopting Resolution 2021-54, Resolution of the City Council of the City of Merced, California, Adopting the Budget and Appropriating Revenue for Fiscal Year 2021-2022; and,
B. Approving capital projects based upon the Planning Commission’s June 9, 2021 finding of consistency of Capital Improvement Program with the General Plan and as modified by recalculation of carryover projects to reflect actual balances as of June 30, 2021; and,
C. Approving a transfer in Fiscal Year 2020-21 not to exceed $159,000 from Fund 085-Measure Y Parks and Recreation 20% unreserved, unencumbered fund balance to Fund 024-Parks and Community Services to mitigate estimated year-end cash short fall.
Public Financing and Economic Development Authority - Adopt a motion:
A. Adopting Resolution PFA 2021-01, Resolution of the City of Merced Public Financing and Economic Development Authority, Adopting the Budget and Appropriating Revenue for Fiscal Year 2021-2022; and,
B. Approving capital projects based upon the Planning Commission’s June 9, 2021 finding of consistency of Capital Improvement Program with the General Plan and as modified by recalculation of carryover projects to reflect actual balances as of June 30, 2021.
Parking Authority - Adopt a motion:
A. Adopting Resolution PA 2021-01, Resolution of the City of Merced Parking Authority, Adopting the Budget and Appropriating Revenue for Fiscal Year 2021-2022; and,
B. Approving capital projects based upon the Planning Commission’s June 9, 2021 finding of consistency of Capital Improvement Program with the General Plan and as modified by recalculation of carryover projects to reflect actual balances as of June 30, 2021.
Body
ALTERNATIVES
1. Approve, as recommended by City Manager; or
2. Approve, subject to other than recommended by City Manager (identify specific findings and/or conditions amended to be addressed in the motion); or
3. Deny; or,
4. Refer to City Manager for reconsideration of specific items (specific items to be addressed in the motion); or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Sections 1104 and 1105.
DISCUSSION
Although long-term impacts of COVID-19 are uncertain, the City of Merced’s economic outlook looks strong. Sales Tax and Property Tax receipts are outperforming current year projections, and total General Fund revenues are budgeted to include a projected 6% increase based on mid-year revised estimates. Single-family and multi-family construction continues to outpace prior years, with development occurring citywide.
The proposed budget adheres to the prudent principals established by the City Council including the following: 1) maintaining existing services and programs; 2) planning for one-time investments in parks and public spaces throughout the City; and 3) increasing funding to reserves and contingencies to protect against uncertainty.
On May 17, 2021, staff presented the City Council with the City Manager recommended budget for Fiscal Year 2021-2022. The total City proposed budget for FY 2021-22 is $320.5 million including the Errata items. It includes the deletion of 4 positions, adds 11 positions, and restores 5.5 positions which were unfunded in the prior budget, totaling 507 full-time positions. Four of the new positions are in anticipation of the Rental Inspection Program, which is proposed to begin on January 1, 2022. The four positions have only been funded for six months of the fiscal year, aligning with the programs proposed start date.
As proposed, the General Fund estimated revenue is $46.9 million and estimated total operating expenditures is $46.6 million, which leaves an operational surplus of $380,431. The General Fund FY 2021-22 budget also includes non-operating expenditure recommendations for a ballot measure election, dispatch radio console replacements, purchase of a hydro-excavator and three new vehicles for the Rental Inspection Program, painting of city hall, phase 2 of the City Hall HVAC replacement, purchasing of mechanics tools in Fleet, community funding for programs and continued set-aside funding for the Enterprise Resource Planning system, Economic Development Opportunity Fund, Trust 115-Pension, and the General Fund Reserve.
In November 2020, the City Council adopted the General Fund Reserve Policy and Reserve. The adopted policy sets the reserve at 35% of annual operating expenses. For Fiscal Year 2021-22, 35% of annual operating expenses equals $16,606,097, of which 30% is $13,974,083 to be set-aside in a separate fund. Fund 004-General Fund Reserve currently has $13,171,623. In order to meet the required level of reserve an additional transfer of $802,460 has been included in the proposed budget. The remaining General Fund Reserve of 5%, equaling $2,329,014 will remain in the General Fund for contingency purposes but not available for spending.
Based on the method of allocation per adopted City Council policies, the amount proposed to be allocated for future planning in next year’s budget are as follows:
|
Future Planning Resources |
Amount |
|
General Fund Reserve |
$ 802,460 |
|
Economic Development Opportunity Fund |
$ 945,000 |
|
Trust 115-Pension |
$1,755,000 |
During the May 17, 2021 Council Meeting, the Council requested additional funding be allocated for the following items from Measure Y:
• Youth Council $13,000
• Block Party Trailer acquisition $20,000
• Wheelchair Swings $30,000
• McNamara Skate Park Lighting $15,000
• Youth Program Vouchers $8,000
• Dog Park Improvements $ 75,000
Community Funding was also recommended by the City Manager as follows:
• Measure Y- Youth Programs
o Boys and Girls Club $55,000 (funding included in proposed budget)
o Kids Discover Station $15,000
o Students with Aspiring Goals (SWAG) $10,940
• General Fund - Non-Youth or partial Youth Programs
o Community Foundation of Merced $10,000
o Lifeline CDC $10,000
o Rotary CC Merced County $10,000
o United Way $10,000
The following Errata items are changes to the budget and if adopted will be included (see attachment for details):
• As final Maintenance District budgets were completed there were some minor changes in the city share of cost amounts for a few of the districts. There was no net change in appropriations.
• Revised the CDBG and HOME allocations and offsetting appropriations due to receiving the final award letters for FY 21-22.
• Revised Gas Tax revenues and offsetting appropriations due to receiving revised estimates from the State.
• Adjustments between Measure Y Tax revenue amounts due to correcting the percentage allocations. Total Measure Y revenue did not change.
• Added a one-time cost of $100,000 to transfer to Fleet to purchase mechanic tools.
• Added an additional $13,000 for Materials and Supplies for the Youth Council from Measure Y-Parks and Recreation-20% per City Council direction.
• Added $20,000 for Acquisition of the Block Party Trailer from Measure Y Parks and Recreation-20% per City Council direction.
• Added $8,000 for Youth Program vouchers from Measure Y Parks and Recreation-20% per City Council direction.
• Added Community Funding totaling, $65,940, $40,000 from the General Fund and $25,940 from Measure Y Parks and Recreation-20% per City Council direction. (The boys and girls funding of $55,000 was already included in the City Manager recommended budget.)
• Added additional funding from Measure Y Discretionary-40% totaling $120,000 for McNamara Skate Park lights, Wheelchair swings, and Dog Park Improvements.
Staff presented the City Manager recommended FY 2021-22 budget to the Measure C committee for approval. The Measure C proposed budget includes restoring a Senior Police Officer and a Police Officer. A total of 12.3 fire and 20.49 police authorized positions did not change. There is also $1 million in one-time funding ear-marked for street projects.
The five-year Capital Improvement Program (CIP) was reviewed by the Planning Commission at the June 9, 2021 meeting and was found to be consistent with the General Plan as required by State Law. The General Plan has many policies which are supported through the implementation of the proposed CIP projects. Examples include:
• T 1.2 - coordinate circulation and transportation planning with pertinent regional, state and federal agencies
• T 1.4 - promote traffic safety for all modes of transportation
• T 2.6 - maintain and expand the community’s existing bicycle circulation system
• T 2.7 - maintain a pedestrian friendly environment
• T 3.4 - reduce rail system impacts on circulation in the urban area
• P 1.1 - provide adequate public infrastructure and municipal services to meet the needs of future development
• P 1.2 - utilize existing infrastructure and public service capacities to the maximum extent possible and provide for the logical, timely, and economically efficient extension of infrastructure and services
• P 2.1 - maintain and enhance public protection facilities, equipment, and personnel to the maximum extent feasible within the resource constraints of the City to serve the City’s needs
• P-3 Water - ensure that adequate water supply can be provided within the City’s service area, concurrent with service expansion and population growth
• P-4 Wastewater - provide adequate wastewater collection, treatment, and disposal capacity for existing and projected future needs
• P-5 - provide effective storm drainage facilities for future development
• P-6 - establish programs to recover recyclable materials and energy from solid waste generated within the city
• OS 1.5 a - preserve and enhance water quality
• OS 3.1 - provide high quality park and open space facilities to serve the needs of a growing population
• OS 3.2 - maintain and expand the City’s bikeway and trail system
• OS 3.3 - maintain the City’s existing high-quality open space facilities
• S 3.2a - maintain essential services in the event of flooding or dam failure
• S 4.2 - maintain a reasonable level of accessibility and infrastructure support for fire suppression, disaster, and other emergency services
ATTACHMENTS
1. City Council Resolution
2. Public Finance and Economic Development Authority Resolution
3. Parking Authority Resolution
4. Errata List
5. Fund Summary