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ACCEPT THE FISCAL YEAR 2022-23 FOURTH QUARTER BUDGET STATUS UPDATE, AUTHORIZE BUDGET AMENDMENTS, AND MAKE ALLOCATIONS TO GENERAL FUND RESERVES
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Accept this budget status report on the unaudited results of the fourth quarter of Fiscal Year (FY) 2022-23.
2. Allocate the General Fund Vacancy Savings budget reduction for FY 2022-23 from Other Administration (Non-Departmental) category to the following departments:
Reduce Expenditure Budget:
Department Amount
a. City Clerk $ 37,000
b. City Manager $125,000
c. Office of Violence Prevention $ 67,000
d. City Attorney $ 93,000
e. Economic Development $107,000
$429,000
Increase Expenditure Budget:
Other Administration $429,000
3. Authorize a reserve for future appropriation of $925,000 from FY 2022-23 ending balance in the General Fund to reimburse the United States Department of Housing and Urban Development for costs deemed ineligible associated with Oak Park Ice Arena improvements.
4. Authorize a reserve for future appropriation of $1,469,000 from FY 2022-23 available funds for the estimated increase in the Assured Guaranty Settlement contingent payments for a total reserve of $3,600,000.
5. Authorize a FY 2022-23 General Fund appropriation of $21,450,000 for Council priority projects including restoration of Fire Station 7, parks maintenance, and the Victory Park Pool.
6. Allocate available fund balance to reserve categories consistent with the Council Reserve and Fund Balance Policy - General Fund Policy. The net increase in fund balance will be added to the current reserve levels, as displayed in Table 6, to achieve the total reserve amounts as follows:
Priority 1 Reserves
Working Capital $48,300,000
Known Contingency $68,000,000
Priority 2 Reserves
Risk-Based Reserves $10,800,000
7. Authorize a FY 2022-23 budget amendment increasing expenditure and revenue appropriations in the Downtown Marina Fund by $8,500.
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of the resolution.
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Summary
City staff analyzes the City’s expenditures and revenues quarterly and provides reports to the City Council and the public to increase transparency, make financial recommendations in response to financial activities, and perform routine financial operations that require Council’s authority to complete.
The City has experienced higher than anticipated revenues and lower than anticipated expenditures. Projected revenues of $321.8 million are $36.2 million more than the adopted budget and $12.0 million more than the projection in the Third Quarter Budget Update. Projected expenditures of $328.8 million are $21.9 million less than the adopted budget and $2.2 million more than the projection in the Third Quarter Budget Update. The fiscal year-end projected numbers reflect actuals as they currently stand but are unaudited and subject to changes before the Annual Comprehensive Financial Report (ACFR) is published.
The City has prudently adopted the Reserve and Fund Balance Policy - this policy attempts to set aside reserves using the Long-Range Financial Plan (L-RFP), a tool designed to help the City’s consultants and analysts understand how the City will respond to likely future economic factors. The L-RFP and the Reserve and Fund Balance Policy are designed to set aside fund balance during financially prosperous years so that City services can continue during financially lean years.
DISCUSSION
Background
One of the strategic initiatives developed to support the City’s long-term fiscal sustainability was to provide regular analysis and reporting of the City’s financial status. As a result, the Council and the public should anticipate quarterly reports.
A fund is a set of accounts designed to track a specific kind of financial activity. Each fund is its own business entity and consists of its own “set of books” and specific rules. This allows the City to provide and account for different kinds of activities and departments separately. The General Fund is the City’s largest and most important fund. It is the fund which provides for most of the City’s fundamentally necessary or “general” activities such as public safety. The City’s General Fund balance is also considered unassigned, which means that it is not tied to a specific service or type of expenditure, although most of the General Fund has been assigned to restricted balances. The remainder of the General Fund might be used to support or enhance any service that the City might require.
The City accrues or “moves back” transactions that occur up until 90 days after the fiscal year closes on June 30 that represent activity that occurred during the fiscal year. This practice is used to accurately reflect best accounting practice or Generally Accepted Accounting Principles (GAAP) to present the financial activity in the same accounting period in which it occurred.
To achieve long-term fiscal sustainability, the City Council adopted the Reserve and Fund Balance Policy - General Fund on March 29, 2016, that establishes reserves for known contingencies, unforeseen revenue changes, infrastructure failures, and catastrophic events in addition to the operating reserve. Accordingly, Staff recommends increasing reserves from the available General Fund dollars.
Present Situation
General Fund
Staff analyzed General Fund unaudited expenditure and revenue results for the full 12 months of FY 2022-23, as shown in Attachments A and B. The City’s financial statements have not yet undergone the full annual audit process and are subject to change. Staff will provide audited financial statements for all funds through the publication of the ACFR. Attachment A summarizes the City's General Fund revenues, expenditures, and available balance by Approved Budget, Third Quarter Projection, Year-End Projection, and variance amounts.
Council adopted the FY 2022-23 Annual Budget of $898.7 million in appropriations, including $282.9 million in General Fund appropriations, on June 21, 2022. Throughout the fiscal year, Administrative and Council-approved amendments to the adopted budget increased the total General Fund expenditure appropriations to $350.6 million, mainly resulting from one-time appropriations for City-wide projects and operating budget adjustments based on approved employee labor agreements.
Summary Tables
Staff reviewed the City’s unaudited Fourth Quarter (Q4) FY 2022-23 financial activity in the General Fund (Attachment A). The following tables summarize the results of the Fourth Quarter / Year-End review of General Fund compared to the Approved Budget and the Year-End (YE) Projection as of the Third Quarter Budget Update (Q3):
Summary Revenues and Expenditures
The General Fund ended FY 2022-23 with revenues that were 3.9% above the Third Quarter estimates and 12.7% above the Approved Budget of $285.6 million. In the Third Quarter Budget Update, Staff estimated that the City’s General Fund would end the fiscal year with revenues of $309.8 million. At year-end, City staff are reporting a total of $321.8 million in revenue. Sales tax and business license tax revenues accounted for most of the variance between what was budgeted and actual receipts.
The General Fund Ended FY 2022-23 with expenditures that were less than one percent above the Third Quarter estimates and 6.2% below the approved budget. The General Fund had an approved expenditure budget of $350.6 million. In the Third Quarter Budget Update, Staff estimated that the City would end with $326.6 million in General Fund expenditures. At year-end, City staff are reporting a total of $328.8 million in expenditures on a budgetary basis. Vacancy savings accounted for most of the variance between what was budgeted and what was spent.
Net Position
The net position is the difference between revenues and expenditures and represents how much of the fiscal year’s activity will be made available to fund future efforts, or, if negative, how much fund balance was used or committed to cover current or future activity.
The approved budget originally expended or committed $65.1 million more than anticipated revenues. At the third quarter reporting, Staff anticipated spending or committing $16.8 million in excess of anticipated revenues, and at year-end, the City’s books are showing that the City only expended or committed $7.0 million in excess of anticipated revenues.
A combination of global economic factors pertaining mostly due to Covid-19 and salary savings have led to the net position being $58.0 million more than initially anticipated. It is recommended that a portion of these savings be programmed towards Council priority items and that the remainder be put towards reserves, saving for future commitments and potential economic downturns.
General Fund Revenues
As generally described in the previous section, overall revenues came in higher than anticipated compared to both the Approved Budget and the Third Quarter Budget Update year-end projection. Below is a discussion of selected categories of General Fund revenues (also displayed in Attachment B). Chart 1 shows the various revenue categories as a percent of total General Fund revenues.
Sales Tax Collections, the General Fund’s largest revenue source, are expected to be $14.6 million greater than the budgeted level of $112.0 million, which is an increase of approximately $827,000 from the Third Quarter Budget Report projection. Measure A is projected to be $7.6 million more (18%) than the budgeted amount of $42.1 million. At $126.7 million, Sales Tax receipts make up approximately 39.4% of all General Fund revenues.
Current year-end sales tax receipts for FY 2022-23 are projected to be 13% more than budgeted and 4.1% more than FY 2021-22 receipts. Revenues have been difficult to predict in recent years but have been higher than usual due to national factors caused by a rapidly changing economy. Sales tax revenue is directly related to retail sales. On a national scale, at the start of January 2020, the Legislative Analyst’s Office (using U.S. Census Bureau data) reported national U.S. Retail Sales at $525 million. At the end of October 2023, the number had risen to $706 million, or approximately 34%.
Chart 2, “U.S. Retail Sales” Illustrates the unpredictability of the Retail Sales sector, showing a national response to the 2008 Financial Crisis followed by slow and steady growth until the COVID-19 Pandemic in 2020, and then erratic and mercurial growth up until the present day. It is anticipated that sales will soon normalize and return to their previous “slow and steady” growth pattern. Starting towards the end of FY 2022-23, the chart has already begun to reflect a more stable trajectory and retail sales are beginning to cool.
As demonstrated in Table 2 below, on an unadjusted cash basis, sales tax receipts declined in FY 2022-23. Since the below numbers are shown on a slightly different accounting basis than the City’s books, City revenues will not directly reflect these numbers and some of the market cooling that occurred in the FY 2022-23 months will not post to the City’s financial statements until early FY 2023-24. Likewise, some of the peak FY 2021-22 revenues have spilled over into the City’s FY 2022-23 financial statements.
Timing variances aside, almost all markets have slowed. This is due to a natural normalization period after upward swings during and following COVID. The rates of decline below were anticipated in City revenue projections but materialized later than originally thought.
Autos and Transportation have naturally slowed as supply chains around obtaining vehicles have cleared and interest rates have driven up the cost of personal vehicle purchases. Likewise, Building and Construction revenues have also decreased from peak levels as lumber prices normalize and interest rates slow home purchases and improvements. The Business and Industry category also reflects this market cooling. Food and Drugs cooling has slowed, approaching normalcy sooner than other categories, given peak levels during and just after COVID.
The City’s Sales Tax consultants are projecting a return to normalcy over the next couple of years as supply chains, spending habits, and employment stop fluctuating due to recent unanticipated world events. During the next few years, this will likely result in moderate decreases followed by mild and consistent increases, at least until the next economic downturn. Due to adjustments for payment misallocations, the City’s General Ledger will not reflect the full effects of this slow-down until early in FY 2023-24.
Property Tax revenue estimates (including Motor Vehicle In-Lieu Fees) are up $1.3 million or 2% compared to the Approved Budget. Property Tax receipts make up approximately 22.4% of the City’s General Fund revenues. They are remitted to the City each year by the County of San Joaquin in January and April. Property Tax growth is attributable to increasing home values, commercial and industrial construction, and new home construction.
Utility Users Tax (UUT) is a 6% tax imposed on the users of various utilities and represents 13.2% of General Fund revenues. The FY 2022-23 UUT receipts are projected to be $42.4 million, which is 10.0% higher than the Approved Budget of $38.7 million. UUT is subject to a certain degree of volatility as consumers’ use of utilities can be dependent on weather conditions, conservation efforts, and the availability of substitutes. Most of the additional revenue has come from Electric & Gas - this is attributable to a PG&E rate increase at the start of 2023, as well as the FY 2022-23 winter season being notably longer and colder than anticipated.
While electricity and gas revenues were higher than anticipated, cable, water and telecommunications revenues declined compared to prior year receipts. As wireless technologies continue to expand, telecommunications will decline in usage as an ongoing trend. The decline in water billing is also attributable to a longer and wetter winter compared to recent years, causing a decrease in required irrigation and billable water usage.
Franchise Tax revenues are collected from companies that provide municipal services in three categories--PG&E, Cable/Video, and Waste Haulers--and make up approximately 5.9% of revenues. These businesses are charged based on a percentage of income generated. Revenues from Electric & Gas came in 17% higher than budget, and Waste Haulers came in 11% higher than budget. The PG&E variance is attributable to the same reasons discussed in the UUT section above. The waste haulers’ variance is attributable to a City audit of businesses resulting in identifying entities that did not have required services and requiring them to sign up for the mandatory service. This audit resulted in more commercial waste hauler activity than in prior years.
Business License Tax revenues make up 6.8% of revenues. Business License Taxes are expected to end the year at $22.0 million or 56.8% increase over the prior year. Approximately 50% of business license tax collections occur in the last three months of the fiscal year, and this timing contributes to the volatility of year-end revenue projections. In addition, new efficiencies and cleanup related to the implementation of the City’s new financial system have resulted in more accurate and timely billing and bringing old accounts current. The increased revenues also include new types of Cannabis businesses permitted in previous years but only recently generating business license revenues based on sales. A portion of the revenues received in FY 2022-23 were catch-up payments or penalties related to business license cleanup and will not be reoccurring revenues.
While Hotel/Motel Tax revenues were $221,438 greater than the budget of $3.2 million, they came in 5.2% less than the prior year revenues of $3.6 million.
Document Transfer Tax revenues came in below budget by $171,519 and below the prior year by $597,072. A cooling in property sales after previous years’ surge has resulted in the Document Transfer Tax revenues starting to return to their pre-pandemic levels following a 33.9% increase in FY 2021-22. Home sale values reached peak levels in FY 2021-22 with early signs of market cooling towards the end of that year that continued into the present fiscal year.
Motor Vehicle License revenue receipts of $331,550 are 66% more than the budgeted amount of $200,000 but almost $40,000 less than FY 2021-22. Constrained supply led to much higher-than-expected sale values; however, recent data shows cooling consistent with the sales tax revenues discussed above and is expected to return to normal levels in FY 2023-24.
Interest Proceeds are highly dependent on unpredictable market performance. These amounts include proceeds from investments and the benefit of paying the full amount of the CalPERS Unfunded Accrued Liability payment in July rather than over the course of a year. Interest income is estimated to be an unprecedented $6.4 million, coming in $4.0 million more than the budget. Additional investment earnings are due primarily to more cash on hand from one-time federal grant dollars and improved revenues as well as favorable performance of the City’s investment portfolio. This return on investments is not expected to be maintained as one-time funding sources are expended and the investment environment normalizes.
Program Revenues are above budget by $2.2 million (13%). The categories with the most significant variances are discussed below:
• Fines & Forfeitures revenues have fluctuated, falling short of budget expectations by $147,908, or (27%). Traffic and parking enforcement activities that result in fine and forfeiture revenues often decline when the Police Department is experiencing higher vacancies as employee resources are deployed differently.
• Revenues from other Agencies ended the year up by 39% or $1.6 million, mainly due to $1.4 million above budget in the City’s share of Redevelopment Property Tax Trust Fund monies. The City also received State Mandated Cost reimbursements of $119,435 more than anticipated.
• Miscellaneous Other Revenues are heavily influenced by the allowance for doubtful accounts adjustment as well as the year-end bank reconciliation. As such, it is very difficult to anticipate and varies widely depending on the timing of the entry. It ended the year at $247,413 after being budgeted at ($172,271) for an increase of $419,684.
Refund & Reimbursement revenues came in 28% higher than budgeted or $267,960, largely due to cash reimbursement for police academy costs, as well as escheated checks, which are difficult to anticipate and budget for as the City’s assumption is that no checks will remain unclaimed.
General Fund Expenditures
Staff reviewed year-end General Fund expenditures as detailed in Attachment A. General Fund expenditures are projected to end the year at $328.8 million, which is $21.8 million, or 6.2% less than the Approved Budget. Except for Other Administration, all General Fund departmental activities ended the fiscal year below their appropriation levels.
The chart below summarizes all departments and programs' spending levels as a percent of their total budget compared with the Third Quarter projections.
The FY 2022-23 Budget included approximately $10.4 million in anticipated salary savings, which is 5.2% of the total salary and benefits budget of $201.2 million (includes full-time and part-time expenses). The labor market has become much more competitive since the pandemic, making retention and recruitment more difficult. In FY 2021-22, the vacancy rate was 11.5%, and this trend continued in FY 2022-23 with a total General Fund vacancy rate of 15.4%. The unanticipated additional savings of $20.5 million is the most significant cause of expenditure savings in the General Fund.
Most departments experienced greater-than-anticipated vacancy savings with salary expenses coming in under budget by about 15%. Below is a summary of those savings by department before factoring in budgeted vacancy savings.
The Police Department spent $13.8 million (8.8%) less than its authorized budget primarily due to vacancy savings. The department expanded recruitment efforts during FY 2022-23 via attendance at local events and media advertisements, implementing a wellness unit, and partnering with local educational institutions to pipeline students into a police field. As a result of these efforts, 33 officers were hired. Despite this, the department experienced 68 departures. In response to this result, in December of 2023, the City reprogrammed the staffing costs committed to 60 vacant and continuously unfilled positions towards expanded recruitment and retention benefits for all existing officer positions, effective April 1, 2024. It is expected that these expanded benefits will increase the City’s competitiveness in the law enforcement recruitment field.
The Fire Department ended the fiscal year with approximately $3.0 million in savings or 5.2% of the budget primarily due to vacancies. Fire Academy 22-2 and Fire Academy 23-1 successfully graduated Firefighter trainees that filled 31 vacant positions. Personnel attrition continued throughout the fiscal year and created additional vacancies of 11 sworn positions at the end of FY 2022-23. Vacancy savings more than offset the additional overtime costs incurred by the department to maintain required emergency service levels.
In the Program Support for Other Funds category, the only notable budget variance is in the grant match category. There were no grants requiring matching funds from the General Fund in FY 2022-23, leaving an unspent balance of $100,000. Grant match needs vary from year-to-year based on grant award requirements.
The various departments under Administration (City Manager, City Attorney, City Clerk, City Auditor, Administrative Services, and Human Resources) cumulatively, came in 10.2% under budget primarily due to vacancy savings. Some items of note: Election expenses were less than budgeted because only one of three districts required a runoff in the November 2022 election. The Other Administration category shows an overage because it includes budgeted vacancy savings for smaller departments in the General Fund. A recommended budget amendment to spread this negative budget to the City Clerk’s Office, City Manager’s Office, the Office of Violence Prevention, City Attorney, and Economic Development will result in a positive balance.
Fund Balance and Reserves
With the above General Fund revenue and expenditure results, the variance from the FY 2022-23 budget is approximately $58.0 million. Expenditure savings are one-time dollars that should be spent on one-time costs. The revenues received over the budgeted amount are also one-time funds but can be indicative of an ongoing source of funds. Of the $36.2 million revenue variance, $20 million was known and incorporated into long-term planning during the most recent budget cycle for the FY 2023-24 Budget. At that time, it was programmed toward a variety of new expenditures. The City Council also approved successor labor agreements with four employee units in September 2023 that added ongoing expenses which draw on these revenue sources. The table below shows the previous commitments against the $58.0 million budget variance including labor agreements and new expenses in the FY 2023-24 Budget.
Table 4: Previous Commitments on Budget Variance
It is recommended that two commitments be funded out of the year-end balance before reserves or special projects are considered.
1. $1,469,000 in additional set-aside for future payments to Assured Guaranty under the City’s bankruptcy settlement. The increased revenue receipts in FY 2022-23 will increase future payments by $1,469,000. This amount will be added to funds set aside in prior years for a total restriction of $3.6 million.
2. $925,000 for the repayment of Community Development Block Grant (CDBG) funding to U.S. Department of Housing and Urban Development (HUD) for the Oak Park Ice Rink (OPIR) improvement project. This is based on the results from the Federal Fiscal Year (FFY) 2021 Remote Monitoring Review where HUD identified this activity as unable to meet HUD’s expectations to document that the activity met the Low/Mod Area Benefit CDBG national objective criteria. At the time of allocation in 2019, City staff determined that the OPIR met the CDBG national objective under the Low/Mod Income Area Benefit. This determination was made due to the high number of Stockton youth that utilize OPIR for birthday parties, ice skating, and ice hockey. Furthermore, Oak Park is in a census tract with economic indicators that meet the Low/Mod Area benefit criteria. After several attempts at clearing up this finding, City staff were unsuccessful at demonstrating that the project met a national objective and therefore needs to move forward with a repayment to HUD. The funds will go back to the CDBG program line of credit, for future allocation/use.
After the above commitments, there is expected to be $35.3 million in fund balance that is not assigned to any kind of reserve, made up of non-spendable assets (such as inventory), nor encumbered or carried forward for future years expenditures by prior Council action. This resolution recommends that $21.45 million be set aside for the Council projects and $13.8 million be assigned to the various reserves.
Per the City Council General Fund Reserve Policy, the target reserve levels are as follows. These target funding levels are based on calculations that are adopted each year as part of the annual budget process. The target under the reserve policy totals $203.1 million. With recommended increases to the Working Capital Reserve ($1.1 million) and to the Known Contingency Reserve ($12.7 million), the total funded reserves would be $127.1 million, or 39% of annual expenditures.
Target Level Recommended Funding
Priority 1:
1. Working Capital $48.3 million $48.3 million
2. Known Contingencies $74.0 million $68.0 million
Priority 2:
3. Risk-Based Reserves $80.8 million $10.8 million
While there is sufficient funding to fully fund the Priority 1 reserves, the recommendation is to use a portion of these funds to improve services and facilities for the community. This approach will balance the City’s priorities, follow the reserve policy, fund vital Council priority projects while safeguarding against the immediate economic slowdown, and significantly improve the City’s ability to weather the next economic downturn, while still providing a small amount of short-term “breathing room” for small discretionary costs in FY 2023-24.
Funding for Projects
City departments proposed over $60.0 million in potential uses for $21.5 million in year-end funds. Table 5 below is a summary of the recommended projects from that list. In addition to the listed projects, Staff is recommending that $5.0 million be reserved for one-time Council priority projects to be allocated as directed by the Council. Some proposed uses of the $5.0 million are shown in Attachment C.
Table 5: Funding for Projects (dollars in thousands)
Long-Range Financial Plan
The City’s updated Long-Range Financial Plan (L-RFP) incorporates the revised year-end financial projections. The projected increase in the General Fund available fund balance will fund reserves essential to keeping the fund balance above the 5% warning level over the next 20 years.
The graph below illustrates the short and long-term impact on the General Fund available balance forecast compared to the 16.7% Working Capital reserve and the 5% warning level. The bars depict the General Fund ending available fund balance at each fiscal year-end beginning with actual balances for FY 2018-19 through FY 2022-23 and continuing forward based on forecasts. The light blue bars represent the Working Capital reserve. The dark blue portion of the bars includes both Known Contingency and Risk-Based reserves. The yellow bars represent the projected Pension Trust balance.
As shown in the graph, the available balance is above the 16.7% goal for all projected years due to updated revenue projections. The combined balance from Pension Trust dollars and current year balances enables the General Fund to weather more than ten years of deficit spending starting in FY 2025-26 and totaling more than $140 million. Expenditures are greater than revenues for 13 of the next 20 years starting in FY 2025-26, which draws down the fund balance. Funds in the Pension Trust are depleted by FY 2034-35.
Chart 5 reflects the recommended actions to allocate $21.45 million to priority projects and to increase reserves by $12.7 million. It does not include the ongoing cost to reopen Fire Truck No. 7 once grant funding is exhausted. In the current L-RFP, the annual General Fund cost of $3.5 million for Truck No. 7 is slightly out of reach. Chart 6 shows the General Fund balance at almost $0 in FY 2039-40 when these additional costs are incorporated. It is anticipated that the long-term fund balance will improve in the L-RFP model as more assumptions are updated in preparation for the upcoming FY 2024-25 budget development process, resulting in the reopening of Truck No. 7 becoming feasible.
Chart 5: Long-Range Financial Plan
Chart 6: Long-Range Financial Plan with the reopening of Fire Truck No. 7
Other Funds
Attachment D summarizes the FY 2022-23 unaudited fiscal year-end results for all other significant City funds. All funds are coming in under budget except Economic Development’s Downtown Marina Fund. Staff slightly underestimated the activity that the Marina would experience and, as a result, revenues and expenditures are both over budget by about 3%. The additional revenues received will cover the overage in expenses, so an $8,500 budget amendment increasing both revenues and expenditures is recommended.
In most cases, the other funds all experienced revenue at or greater than expected and expenditures below budget - this is largely attributable to salary savings. No other action is required to balance these funds.
FINANCIAL SUMMARY
This report provides an analysis of FY 2022-23 fourth-quarter budget status results. The unaudited 12-month period review indicates General Fund revenue increases and expenditure savings are estimated to result in a year-end balance that can fully fund the Working Capital Reserve and mostly fund the Known Contingency Reserve. No additional funding is being contributed toward Priority II - Risk-Based Reserves.
Following are the budget amendments and transactions needed to complete the recommended actions:
1. Accept this budget status report on the unaudited results of the fourth quarter of FY 2022-23.
2. Allocate Vacancy Savings budget reduction for FY 2022-23 from Other Administration (Non-Departmental) category to the following departments:
Reduce Expenditure Budget:
Department Division/Fund Amount
a. City Clerk 1110-100-000 $ 37,000
b. City Manager 1230-100-000 $125,000
c. Office of Violence Prevention 1220-100-000 $ 67,000
d. City Attorney 1410-100-000 $ 93,000
e. Economic Development 6000-100-000 $107,000
$429,000
Increase Expenditure Budget:
Other Administration $429,000
3. Authorize a $925,000 budget appropriation from the FY 2022-23 ending balance to the General Fund to reimburse the Community Development Block Grant (CDBG) fund for costs associated with the Oak Park Ice Arena improvements in FY 2023-24. Staff originally expended CDBG funding on these improvements, but the United States Department of Housing and Urban Development (HUD) later deemed the project ineligible for that funding, resulting in $925,000 in ineligible costs that will need to be reimbursed by the General Fund over the next two years. However, the $925,000 will return to the City’s account with HUD to be drawn down for future eligible projects.
4. Authorize a reserve for future appropriation of $1,469,000 from FY 2022-23 available funds for the estimated increase in the Assured Guaranty Settlement contingent payments for a total reserve of $3,600,000.
5. Authorize a FY 2022-23 appropriation of $21,450,000 from the General Fund balance for Council priority projects identified in the resolution including restoration of Fire Station 7, parks maintenance, and the Victory Park Pool.
6. Allocate available fund balance to reserve categories consistent with the Council Reserve and Fund Balance Policy - General Fund Policy. The net increase in fund balance will be added to the current reserve levels, as displayed in Table 6, to achieve the total reserve amounts as follows:
Priority 1 Reserves
Working Capital $48,300,000
Known Contingency $68,000,000
Priority 2 Reserves
Risk-Based Reserves $10,800,000
7. Authorize a FY 2022-23 budget amendment increasing expenditure and revenue appropriations in the Downtown Marina Fund.
Division/Fund Amount
Increase Revenue Budget
Downtown Marina 6050-640-000 $ 8,500
Increase Expenditure Budget
Downtown Marina 6050-640-000 $ 8,500
Attachment A - FY 2022-23 General Fund Year-End Budget Update
Attachment B - FY 2022-23 General Fund Year-End Revenue Summary
Attachment C - FY 2022-23 Recommended Projects for Funding Consideration
Attachment D - FY 2022-23 Year-End Report for Other Major Funds