Agenda Item Wording:
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Mid-Year Report - Review Fiscal Year 2024/25 mid-year financial report with recommended budget appropriations.
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Deadline for Action: 4/7/2025
Submitting Department: Finance and Technology Services
Contact Name and Phone Number: Renee Nagel, Finance & Technology Director 713-4375 Amee Swearingen, Budget Analyst 713-4170
Department Recommendation:
Review Fiscal Year 2024/25 mid-year financial report with recommended budget appropriations.
Recommended appropriations by Fund:
General Fund:
1. Appropriate funds for capital projects in the amount of $613,300 for FY 24/25
2. Appropriate funds for capital projects in the amount of $35,000 for FY 25/26
3. Appropriate funds for a new position in Planning
Internal Service Funds:
Vehicle Replacement Fund
1. Appropriate funds for capital projects in the amount of $308,000
Enterprise Funds:
Convention Center Fund
1. Appropriate funds for capital projects in the amount of $546,000
Background Discussion:
The annual Mid-Year Budget Review is a crucial component in ensuring financial transparency and stability. It allows the City Council to assess major operating funds like the General Fund Budget, make adjustments if needed, and gain a clear understanding of the City's current financial health. The City Council adopted a balanced budget for FY 24/25 & 25/26 in June 2024. The budget is based on the prior years spending history and is adjusted based on estimated cost increases and any new or changed programs. The Mid-Year Budget review looks at revenue and expenditures for the six months ending December 31, 2024 and forecasts them for the remaining six months. This report only includes the General Fund, Measure T Fund, Measure N Fund, and the Enterprise Funds. The report does not include all fund types, however, they are reviewed by the Finance Department to ensure revenues and operating expenditures are in-line with the budget.
As shown in this report, the majority of the City’s funds are healthy and well-managed. General Fund revenues are up in the major revenue categories, and departments are controlling their expenditures where practical, and working to enhance revenue collection where possible. Overall, the City continues to be in good financial shape. However, like all government agencies throughout California, the City is faced with higher contributions to fund pension obligations, technology cost increases, higher costs due to continued inflation, minimum rate increases, and the possibility of a recession.
Economic Outlook
Visalia’s economy continues to outperform the national economy and majority of Cities in California in terms of economic growth and employment, despite the continued high inflation. Inflation today is lower than it has been over the last three years but is still a concern that impacts all Nationally.
In addition to inflation, the economy continues to deal with high interest rates over the last couple of years. Interest rates were raised several times in 2022 and 2023 to slow down inflation and to realign inflation to the ideal rate of 2%. Raising interest rates slows inflation by slowing down spending. The Federal Reserve believes that the 2% rate promotes a healthy, sustainable economy. The current United States inflation rate is 2.8%. The Federal Reserve reduced interest rates once in 2024 and is projected to make additional rate cuts in 2025.
The housing market continues to have sales but has steadily declined since its peak in FY 20/21. Houses are still selling; they are just on the market a little longer. Limited inventory has helped the market stay strong despite the rising interest rates and has kept prices from dropping. This is also helping the economy by keeping consumers from having negative equity in their homes. This can affect credit and financial positions negatively.
The State of California has a balanced budget but is projecting a deficit starting next fiscal year. The State was able to balance its budget this fiscal year by shifting money and reducing programs. As the Federal government continues to make policy changes and budget cuts, California will most likely be affected and will need to reduce more. This will affect Counties and Cities that receive funds for programs, grants, and reimbursements for mandated costs
Even though the economy is stable today, these contributing factors bring uncertainty with the near future economy. We must recognize that other foreign and domestic factors (i.e. inflation, housing prices, supply chain disruptions, etc.) could negatively impact the growth and expansion of our local economy. Any of these factors could also cause another economic downturn. Staff is optimistic, but acknowledges the City must also be fiscally responsible by having sufficient reserves, balanced budgets, and prudent spending policies. The City should continue to hold a conservative and watchful course to be ready if and when a recession begins. This approach will help the City continue to maintain its good financial position.
General Fund
The General Fund is the largest individual fund in the City and is comprised of 9 operating departments. The total adopted budget for the General Fund is $96.6 million for FY 2024/25 and $97.6 for FY 2025/26. The adopted budget surplus for this fiscal year was $4.5 million and is now projected to be $6.6 million as shown in Table 1 FY 24/25 General Fund Projection. This surplus is mainly due to revenues being up from budget by $6.4 million.
Table 1
FY 24/25 General Fund Projection
General Fund Revenues are projected to be higher than budgeted by $6.4 million. The majority of the increase is due to Property Tax, Vehicle License Fee Swap, and All Other Revenue categories. The revenues for the adopted budget were conservative for anticipation of a possible recession.
Sales Tax is the largest revenue source for the General Fund and is projected to increase from budget by $0.3 million (0.6%). Compared to last year’s revenues, sales tax is projected to have no growth. Chart 1, Actual and Projected Sales Tax, shows the projected sales tax revenue has been above the 15-year average growth of 5.5% since 2011. FY 20/21 and FY 21/22 had the highest growth total of 29% due to the Covid Stimulus Funds. Without these extra funds, sales tax has to realign to the 15-year trend line shown in the chart. In addition, sales tax continues to compete with the high cost of living such as rent, utilities, health care, and entertainment. These items decrease the amount available to spend on tangible items which results in less sales tax. Even though the City’s sales tax is not seeing a high growth percentage, it is still maintaining sales above the 15-year average of 5.5%. This is mainly due to how the City is structured with a variety of businesses that includes business to business transactions located in the industrial park.
Chart 1
Actual and Projected Sales Tax
Property Tax is the second largest revenue source for the General Fund and is projected to increase from budget by $2.7 million (13%). Compared to last year’s revenues, property tax is projected to increase by $2 million (9.9%). This is due to an increase of assessed property values from the County and the continued real estate transactions with higher prices. Visalia’s property values continue to increase, which creates higher property taxes when the property is sold. This projection is provided to the City by the County which is based on the property assessments calculated for the year in September.
Property Tax - VLF Swap revenues are projected to increase from budget by $1.0 million (5.8%) and from last fiscal year by $1.4 million (8.1%). The Property Tax VLF swap was put in place in 2004 to fund the Vehicle License fees (VLF) that was taken from Cities when the VLF rate was reduced in 1998 from 2% to 0.65%. This revenue has increased significantly over the last three years due to the rise in vehicle prices and demand for new vehicles. This number is provided by the County.
Franchise Fees are projected to be slightly down than budget by $88,000 (-2.2%). Compared to last year’s fees received, the revenues are projected to be slightly down by $17,300 (-0.4%). Over the last three years the Franchise Fee has increased due to increased utilities and customers. Electricity is still increasing; however, it is offset by a decrease in natural gas prices and a continued decrease due to technological advances.
Transient Occupancy Tax (TOT) is projected to have an increase from the budget of $292,100 (5.9%). Compared to last year, TOT is projected to be up from last year by $150,010 (3%). The projected increase is due to the continued enforcement of short-term rental compliance and VRBO has started collecting and remitting TOT on the behalf of short-term rentals. Airbnb already does this.
Business License is projected to slightly increase from budget by $34,700 (1%). Compared to last year, Business License is projected to increase by $32,600 (1%). The increase is due to new businesses and increased business gross receipts from the prior year.
All Other Revenues are projected to increase from budget by $2.2 million (19.5%). Compared to last year’s, all other revenues have decreased by $0.8 million (-7.3%). Majority of the increase from the budget is from interest earnings of $0.4 million, Fire strike team reimbursements of $0.7 million, capital grants of $0.5 million, Planning and Engineering fees of $0.2 million, and State mandated costs reimbursements of $150,000. State mandated reimbursements typically take 1-2 years to receive, so they are never for the current year’s expenses and may include more than one year. The capital grants are budgeted in the year the project is appropriated. Grant reimbursements cross years as the projects are completed. These grants are also why the projected is down from last fiscal year as well.
General Fund Expenditures
Operating Expenditures - are projected to be higher than the budget by $1.8 million mainly due to wage and benefit increases that were negotiated with the bargaining units after the budget was prepared. Several departments are under budget due to vacancies. The total number of vacancies has become less overall, and staff believes that this will continue as the negotiated wage increases occur. This fiscal year is year one of a three-year contract.
Overall, total operating expenditures is up from last fiscal year by $11.1 million. The increase from last fiscal year consists of $9.0 million in salary and benefits and $1.7 million in operating expenditures. The largest operating expenditure increases over last fiscal year are utilities (electricity & gas), technology service agreements, and maintenance contracts due to inflation costs.
Allocations Net Reimbursements - Annually the City prepares a cost allocation plan that is based on prior two-year actuals. This plan is prepared according to Federal OMB A-87 guidelines. The allocation plan charges out the central service division costs (Finance, Human Resource, Risk, IT, etc) to other divisions to get the true cost of performing the services required. Allocations allow for General Fund expenditures to be reimbursed from other funds (Enterprise & Special Revenue Funds) and grants. The amounts budgeted are not based on the calculated plan due to timing. The plan uses expenditures from two years prior.
Transfers Out to Other Funds is projected to be up from budget by $1.2 million and slightly down from last year actuals. The transfer is projected to be higher due to the improvements being made at Rawhide to bring the stadium to Major League standards with a budget of $6.8 million. In addition, last fiscal year had a higher-than-normal set-aside for potential litigation. The “Transfer Out” category is for transferring General Fund money to other funds for Council authorized items such as debt payments, fund subsidies, and fund set-asides for future obligations. This category does not include fund advances.
Capital - Capital expenditures were budgeted with the two-year budget that was presented in June 2024 and are revised throughout the year at any regular Council meeting.
General Fund Additional Appropriations
Full time Employee Requests:
The Planning Division is requesting to add one full-time Principal Planner. The proposed Principal Planner position will be tasked with project managing several of the divisions complex and high-profile projects that the Planning Division is currently undertaking, including being tasked with several Housing Element implementation policies that will result in zoning ordinance updates, project managing the Reserve land use update, and providing technical assistance with the future General Plan update process which is anticipated to begin in Fiscal Year 2026/2027.
Capital Project Requests:
Staff is recommending funding 15 capital projects for fiscal year 24/25 totaling $613,300. Several of these are replacing wrecked vehicles that are due to another party. Any reimbursements received from the vehicle owner or insurance company will be deposited into these funds to offset the cost. All projects being requested are listed below:
1) Replace Wrecked Park Maintenance Truck - $27,000. A 2019 Ford ½ ton pickup was involved in a traffic accident last fiscal year and was totaled. The vehicle was parked on the shoulder of the road at Pinkham Park while park staff were performing maintenance in the park and was hit by another vehicle. The estimated replacement cost of the truck is $54,000. Staff is requesting to appropriate $27,000 from the General fund and the remaining $27,000 will be appropriated in the Vehicle Replacement Fund.
2) Replace Wrecked Patrol Vehicle - $50,800. A 2017 Dodge Charger (212599) was involved in a side-impact collision resulting in a total loss in December 2024. The estimated replacement cost of the patrol vehicle is $90,000. Staff is requesting to appropriate $50,800 from the General Fund and the remaining $39,200 will be appropriated in the Vehicle Replacement Fund.
3) Replace Wrecked Patrol Vehicle - $50,800. A 2017 Dodge Charger (212594) was involved in a major front-end collision resulting in a total loss in November 2024. The estimated replacement cost of the patrol vehicle is $90,000. Staff is requesting to appropriate $50,800 from the General Fund and the remaining $39,200 will be appropriated in the Vehicle Replacement Fund.
4) Replace Wrecked Police Bronco - $40,000. A 2022 Ford Bronco (215252) was involved in a roll over collision resulting in a total loss in May 2023. The estimated replacement cost of the truck is $45,000. Staff is requesting to appropriate $40,000 from the General Fund and the remaining $5,000 will be appropriated in the Vehicle Replacement Fund
5) Replace Wrecked Police Investigations Vehicle - $27,400. A 2016 Ford Fusion (215942) was parked and rammed by a suspect resulting in a total loss in May 2024. The estimated replacement cost of the truck is $45,000. Staff is requesting to appropriate $27,400 from the General Fund and the remaining $17,600 will be appropriated in the Vehicle Replacement Fund.
6) Construction Management Software - $35,000: The Engineering and Building Department has over 180 projects, totaling approximately $350M. Currently, the engineers utilize standard Microsoft applications and other standard electronic tools and programs to track and manage construction projects. A comprehensive Construction Management Software (CMS) System will provide a uniform method for staff managing and processing construction projects, while integrating with various systems currently in place. The CMS system will help improve productivity, enhance communication, and increase project success rates by helping the department plan and execute construction projects more efficiently. The estimated yearly cost for the Software System is $35,000 for the software and maintenance. Staff is requesting an appropriation for $35,000 for the software implementation in FY 24/25 and $35,000 for maintenance in FY 25/26.
7) SRFODS Ordinance Survey (CP0596) - $10,000: On December 16, 2024, staff presented to the City Council the draft Single-Family Residential Object Design Standards (SFRODS) Ordinance which was crafted largely in response to current growth trends where developers have been utilizing smaller lot sizes and new design techniques. A State Housing and Community Development grant was used to fund the development of the SFRODS Ordinance. At this meeting, City Council directed staff to continue the discussion to a future date to allow the development community to review and provide additional comments on the City’s draft SFRODS Ordinance. Based on Council’s direction, and at the request of staff, our consultant Mintier Harnish, prepared a revised scope of work and budget to meet with the developers to explore potential changes to the draft SFRODS. The cost for the additional work added to the scope is $9,870 and the project has no remaining funds. Staff is requesting an additional appropriation of $10,000 for the ordinance survey.
8) Purchase 10 Police MDT’s - $30,000: The Police department is approaching full staffing for the first time in over a decade. Currently, all spare MDT’s are deployed to staff. Like all equipment, MDTs are prone to failures and require time for MIS staff to resolve the issue or send it off to the vendor for repair. In this case, it is essential for MIS to issue a spare for use in the field. With the implementation of Spillman several years ago, all report writing and records management became digitized which requires the officer to use the MDT to write reports. Additionally, the body worn cameras and the in-car camera system require the MDT to categorize and operate software. Staff is requesting an appropriation of $30,000 to purchase 10 MDTs.
9) Security Cameras for Police Buildings - $97,000: Staff has identified police buildings that need replacement of the security systems. District substations have been in need for a replacement system since 2020. Headquarters sees the highest amount of traffic with the public and city staff. There are various access points leaving headquarters vulnerable, especially when it is unoccupied, to members of the community. The VECC currently has 11 exterior cameras (8 operational) and 7 interior cameras that are reaching their end-of-life period. Having functioning and clear security cameras is essential for the safety of employees and the EOC. Safe House is the current vendor that MIS is using for all security cameras as they are being replaced. Safe House uses a cloud-based storage option so there is no MIS servers needed for storage. All cameras are under a 10-year warranty and require an annual licensing fee. Staff is requesting an appropriation of $97,000 for the replacement of security cameras at the districts, headquarters and the VECC.
10) Replace 20 soccer goals at Riverway Sports Park - $70,000: The soccer fields at Riverway Sports Park were open for public use in 2007. The current soccer goals in use now are the original regulation size soccer goals. Many of the soccer goals have been repaired numerous times through the years to keep them safe and functional. These soccer goals are now eighteen (18) years old and need to be replaced. Several of the soccer goals have had the supports or crossbars welded so many times there is no longer enough material to repair them properly. This project will replace the twenty (20) soccer goals at Riverway Sports Park with new regulation size soccer goals, installing two per soccer fields. Staff is requesting an appropriation of $70,000 for this project.
11) Update the Adobe Building - $35,000: The Adobe Building at the Corporation Yard is currently vacant and there is limited office space to house all the employees that report to the Corporation Yard. With the additional staffing that was recently approved for park and trail maintenance, additional office space is needed. Staff is requesting funding to update the Adobe Building to house additional staff. The building is structurally sound and will only need cosmetic improvements such as interior paint, flooring, restroom fixtures, and front door replacement. The updated Adobe Building will house Parks and Recreation Department’s maintenance divisions management and new trail staff while the Corporation Yard Master Plan is being designed and implemented. Staff is requesting an appropriation of $35,000 to update the Adobe Building.
12) Replace ACC Volleyball Court Equipment - $15,300: The Anthony Community Center has two volleyball courts used by numerous programs and facility rental groups. Groups require different net heights depending on age, gender, and skill levels. The current volleyball equipment is over 11 years old and height adjustments are no longer dependable. The mechanism to change height requires staff to use a hammer to loosen and then tighten the collar bolt. Due to age and frequent height adjustments, the system is worn and no longer remains in place resulting in nets slipping and slumping during play. This project would replace equipment needed for volleyball courts that include telescoping uprights, padding, winch and nets. Staff is requesting an appropriation of $15,300 for the equipment.
13) Replace Senior Center Oven - $30,000: The Senior Center operates a lunch program for senior citizens. It is used by the caterer to prepare meals for the lunch program. The existing 40-year-old oven stopped working and contractors have determined that due to the age of the oven, replacement parts are no longer available. The existing model is a high-end commercial grade oven and needs replacement. Staff is requesting an appropriation of $30,000 to replace and install a new oven.
14) Purchase Bingo Equipment for the Senior Center - $10,000: The City provides a bingo program at the senior center as a part of regular monthly programming and seasonal special events. They currently do not have any up-to-date equipment. The equipment to best fit the program includes a bingo air blower, bingo balls, television for visual aid for senior clientele, laptop to run online bingo program, miscellaneous IT cables, storage cabinet for bingo items, and reusable bingo cards for game play. Staff is requesting an appropriation of $10,000 for the bingo equipment purchase.
15) Purchase Locking Lids for Streetlights - $85,000: The City owned streetlight pull boxes have had recent wire theft, causing costly repairs. Installing locking lids will help prevent future theft and ensure public safety. Staff have recently installed 60 locking lids to prevent wire theft. The standard for new installations requires locking lids at all streetlight pull boxes. Purchasing 335 locking lids will replace the remaining City owned non-standard streetlight pull box lids. This does not include Mooney Blvd as the City is currently not experiencing issues and requires a different type of lid. Staff have been working with PD on theft issues and have temporarily installed cameras at various locations to deter theft. Staff is requesting an appropriation of $85,000 to purchase 335 locking lids for the remaining city owned streetlights.
General Fund Emergency Reserves
The General Fund Emergency Reserve Fund is a designated fund where unspent resources are saved to ensure financial stability and flexibility during tough times. These funds act as a safeguard, allowing the city to address unforeseen expenses or economic downturns without disrupting essential services or increasing fees. By establishing an emergency reserve, the City is proactively planning for long-term sustainability.
The current surplus/reserve policy was adopted in March 2024. The policy states that any revenues in excess of actual expenditures would continue to be deposited in the emergency reserve to maintain the reserve at a maximum of 30% of operating expenditures and then all remaining surplus is to be deposited into the Civic Center Reserve Fund. This change increased the reserve from 25% to 30% of operating expenditures. Building the reserves up to 25% had been a priority since the recession and had been met since FY 16/17. The reserve balance at June 30, 2024, was $22.7 million (30% of operating expenditures).
The projected surplus for FY 2025 is $5.4 million ($6.6 million estimated surplus minus recommended capital appropriations of $613,300 listed above and the additional transfer to Convention Center of $546,000 for capital). Based on the Mid-Year Budget projections, $2.1 million of the surplus will be transferred at year end to bring the reserve balance to $25.8 million keeping the reserves at 30% of operating expenditures as shown in Table 2 General Fund Emergency Reserve Balance. The remaining surplus will be deposited into the Civic Center/Public Safety Facility Reserve Fund per Council’s policy, bringing the reserve to $77.6 million.
Preliminary Forecast for FY 25/26 - 28/29
The projection for FY 25/26 builds upon this year’s budget forecast and continues growth in revenues and expenditures. The revenue projection is conservative and assumes the following:
*Sales Tax and Property Tax represents 78% of the General Fund total revenues.
The expenditure forecast assumes the following:
1) Wages and Benefits - The City entered into a three-year (FY 24/25, 25/26, 26/27) MOU with the Bargaining groups which increases wages in FY 25/26 - 4% and FY 26/27 - 2% + 2% if sales tax is equal or greater than $46.6 million. FY 25/26 projection is based on budget plus MOU changes. The remaining years include the following:
• The projected increase is for additional allocated positions and wage adjustments due to merits and reclassifications. FY 26/27 assumes 4% increase per MOU meeting Sales Tax requirement plus 1% for new positions. Future wage increases will be negotiated with bargaining groups and approved by Council.
• PERS is projected to grow at 4%. However, PERS does not typically grow at a flat percentage because it consists of two rates that change annually: (1) Employer Contribution rate (based on payroll); and (2) Unfunded Liability Payment (based on schedule provided by PERS).
• Health insurance is projected to grow 4% annually. The total health insurance increase is projected to be 8% each year. Per the City’s MOU’s the employees pay half of the increase. This number could be higher due to the number of health claims and size of claim.
• Assumes zero vacancies for full-time employees and hourlies. In the past the City has realized savings from vacancies and it is believed that we are safe to assume there will be a savings of $1.5 to $2 million. This savings has not been included in the projection. Staff is working diligently to reduce number of vacancy and recruitment time.
2) Operating Expenditures - 4% due to additional parks and more technology which results in higher annually maintenance costs.
3) Service Provided - 3% annual increase. This is a charge from other funds for Services such as fleet maintenance, fuel, and parts.
4) Allocations/Reimbursements - 2% annual increase.
5) Transfers Out/Debt - 3% annual increase. Transfers are for funds that are subsidized by the General Fund.
6) Capital - $3.0 million annually. This can be reduced as in the past by deferring maintenance. This is not recommended due to the specific maintenance needs of the City’s facilities and assets.
Table 3
General Fund Forecast
The forecast shows the City having a surplus in all five years. However, the surplus decreases each year due to expenditures increasing more than revenues. Most of this increase is due to employee costs rising along with operational costs such as utilities, technology service agreements, and costs of goods (chemicals, fuel, parts, etc). This is a conservative and optimistic forecast that does not include a recession or decrease in revenue growth.
SPECIAL REVENUE AND INTERNAL SERVICE FUNDS
The mid-year report focuses on operating funds. As a result, the only special revenue funds that have operating costs are Measure T and Measure N, which are included. Staff is also including the Vehicle Replacement Fund to appropriate funds for an additional capital project. All fund projections shown below do not assume a recession.
Vehicle/Equipment Replacement Fund
The Vehicle/Equipment Replacement Fund is used to replace all General Fund vehicles and large equipment. The initial purchase of a General Fund vehicle is funded by the General Fund and put into the Vehicle/Equipment Replacement Fund as an asset. The amount that the assets depreciate annually plus CPI is charged to the General Fund to be set-aside for future replacements in this fund. When a vehicle is fully depreciated and meets the City replacement policy (age and mileage), the vehicle is replaced from the money that has been set-aside. Interest earned in this fund helps offset price increases. The balance of this fund is shown in Table 4, Vehicle Replacement Fund Projection. All projects being requested are listed below:
Table 4
Vehicle Replacement Fund Projection
Staff is recommending to appropriate funds for the 7 projects totaling $308,000. Any wrecked vehicle reimbursements received from the vehicle owner or insurance company will be deposited into this fund to offset the cost.
1) Replace Fire Command Vehicle - $120,000. Staff is requesting early replacement on the City Service Center’s recommendation due to on-going and maintenance and repair issues and extended downtime. The fire command vehicle (222127) is scheduled for replacement in FY 2026/27. Unit 222127 is a 2009 Chevrolet Suburban with 107,762 miles. This vehicle is assigned to one of the Fire Department’s battalion chief’s and serves as the initial command response vehicle on duty. A battalion chief is dispatched on any structure fire, grass fire, gas leak, vehicle accident with a rollover, or any other incident that is considered significant or that requires a dedicated incident commander. The estimated replacement cost includes the vehicle and upfit costs.
2) Replace Engineering Construction Management Truck - $60,000. In 2023, the Fleet department determined it was no longer feasible to continue repairs to the 1997 Ford F-250 truck (416911). The vehicle was disposed of and auctioned off. As the Construction Manager position was vacant at that time, the vehicle was not replaced. The Engineering Division will be filling the construction management position soon. A vehicle for the Construction Manager is essential for their daily tasks to monitor and document construction activities for multiple project sites. A full evaluation will be done by Fleet to determine the specifications of the truck needed for this position. Staff is requesting to appropriate $60,000 from the vehicle replacement fund.
3) Replace Wrecked Park Maintenance Truck - $27,000. The parks maintenance truck was involved in a traffic accident and was totaled. The vehicle was parked on the shoulder of the road at Pinkham Park while park staff were performing maintenance in the park and was hit by another vehicle whose driver had fallen asleep while driving. The Fleet Division had the 2019 Ford ½ ton pickup assessed and determined that the vehicle was totaled and could not be repaired. There is currently $16,700 set aside with depreciation and the City received $10,000 from the insurance company. Staff is requesting to appropriate $27,000 from the vehicle replacement fund. The estimated replacement cost of the truck is $54,000, the remaining $27,000 will be appropriated in the General Fund.
4) Replace Wrecked Patrol Vehicle - $39,200. On December 13, 2024, a 2017 Dodge Charger (212599) was involved in a major side-impact collision resulting in a total loss. Staff is requesting to appropriate $39,200 from the vehicle replacement fund. The estimated replacement cost of the truck is $90,000, the remaining $50,800 will be appropriated in the General Fund.
5) Replace Wrecked Patrol Vehicle - $39,200. On November 29, 2024, a 2017 Dodge Charger (212594) was involved in a major front-end collision resulting in a total loss. Staff is requesting to appropriate $39,200 from the vehicle replacement fund. The estimated replacement cost of the truck is $90,000, the remaining $50,800 will be appropriated in the General Fund.
6) Replace Wrecked Police Bronco - $5,000. On May 12, 2023, a 2022 Ford Bronco (215252) was involved in a roll over collision resulting in a total loss. Staff is requesting to appropriate $5,000 from the vehicle replacement fund. The estimated replacement cost of the truck is $45,000, the remaining $40,000 will be appropriated in the General Fund.
7) Replace Wrecked Police Investigations Vehicle - $17,600. On July 15,2024 a 2016 Ford Fusion (215942) was parked and rammed by a suspect attempting to flee during a search warrant, resulting in a total loss. Staff is requesting to appropriate $17,600 from the vehicle replacement fund. The estimated replacement cost of the truck is $45,000, the remaining $27,400 will be appropriated in the General Fund.
Measure T
In 2004, City of Visalia voters approved a measure to increase sales tax by ¼ cent. This is known as Measure T and the sales tax revenues are earmarked for public safety. The measure uses a detailed, 20-year plan which includes hiring of personnel, construction of capital projects and equipment purchases. Plan elements implemented to date are as follows:
• Two Police substations built
• 23 Police Officers hired and vehicles purchased (reduced from 28 due to revenue shortfalls and as directed by the City Council at their June 20, 2011 meeting)
• 13 Firefighters hired
• Added 1 Administrative Fire Captain and 1 Battalion Chief
• Built Fire Station 55 and Training Facility
• Built Fire Station 53
• Purchased 2 New Fire Trucks
• Built Visalia Emergency Communication Center
The Measure T plan elements are on track due to being on an amended expenditure plan. Chart 2 - Measure T Revenues & Expenditures, compares the revenues originally projected in the plan versus the revenues collected and projected through FY 2024/25. The amended plan expenditures shown on the chart are the actual and projected expenditures.
Last fiscal year, Measure T decreased by -6%. This decrease is due to sales tax realigning after the COVID stimulus funds and less disposable income to use on purchases. Measure T sales tax growth and declines are not the same as the General Fund sales tax due to not receiving any of the general 1% sales tax. It only receives the additional ¼ cent tax. The difference is due to how district sales taxes are applied compared to general sales taxes in two main areas: car sales and business to business sales. District sales tax is applied to the City where the car is registered in, not the City it is sold in. Therefore, for Visalia to receive the district sales tax for a purchase of a vehicle, that vehicle would have to be registered in Visalia. If a resident from Dinuba purchases a vehicle in Visalia, Visalia would receive their local 1% share of the State sales tax but would not receive any of the district taxes (Measure T & N). Likewise, Business to Business sales tax works the same way. One of the areas that Visalia has seen a large sales tax growth is in Business to Business sales. These transactions do not help Measure T as they do our General Sales Tax.
Chart 2
Measure T Revenues & Expenditures
In FY 08/09 the revenues fell below the plan estimates. To keep the Measure T funds from going negative, the City took several remedial actions over the years, namely:
• Reduced Police Officers allocation by 5 (2 through attrition & 3 transferred to the General Fund). The current number of officers is 23 reduced from 28.
• Fire original plan was for 14 positions and was amended to add 4 bringing the total to 18. During the economic down turn this was amended to 15 and then again in June 2019 which moved the Battalion Chief and Administrative Captain to Measure N bringing the total Fire position allocation to 13 which is 1 less than the original plan.
• Declared a fiscal emergency for fiscal years 09/10, 10/11, 11/12, and 12/13
• Maximum of 1 vacancy is allowed in each Measure T fund
These changes helped reduce operating expenses which allowed the funds to no longer be in a deficit. According to the ballot measure, Measure T sales tax is to be shared 60% for police and 40% for fire. Thus, the City maintains two funds: Measure T - Fire and a Measure T - Police.
Measure T - Fire
As shown in Table 5 Fire Measure T Projection, the five-year projection is conservative and has the sales tax growing annually at 1.5%. The fund is projected to have an operating surplus of $0.5 million which brings the fund balance to $6.8 million at the end of this fiscal year. The end of year surplus is projected to decrease annually, mainly due to the increase in salary and benefit costs. The fund balance is needed to contribute towards the Public Safety Building that is currently out to bid for construction. This contribution is outlined in the original 20-year plan.
Table 5
Fire Measure T Projections
Recommendation: Staff will continue with the plan as amended. Staff will continue to monitor expenses to assure that the fund remains in balance and can contribute to the Public Safety Building. Staff will return with funding options for the Public Safety Building once the bids have closed.
Measure T - Police
As shown in Table 6 Police Measure T Projections, the five-year projection is conservative and has the sales tax growing annually at 1.5%. The fund is projected to have a surplus of $1.0 million which brings the fund balance to $9.3 million at the end of this fiscal year. The Police Measure T Fund contributes $151,200 (9.6% of total debt payment) towards the annual VECC debt payment which started in fiscal year 15/16 and will end in December 2029. Per the original Measure T plan, this fund would be paying 25% ($284,500 annually) of the debt payment. Since revenues could not cover the full debt payment, staff reduced the Measure T portion of the annual debt payment to $151,000. In addition, the General Fund is carrying three Measure T officers. Each officer costs about $151,000. The end of year surplus is projected to decrease annually, mainly due to the increase in salary and benefit costs. The fund balance is needed to contribute towards the Public Safety Building that is currently out to bid for construction. This contribution is outlined in the original 20-year plan.
Table 6
Police Measure T Projections
Recommendation: Staff will continue with the plan as amended. Staff will continue to monitor expenses to assure that the fund remains in balance and can contribute to the Public Safety Building. Staff will return with funding options for the Public Safety Building once the bids have closed.
Measure N
In November of 2016, the voters of Visalia passed a ½ cent Sales Tax Override. This is known as Measure N and it is to be used for essential city services such as police, fire, and recreation, as well as maintenance of parks, trails, and roads. The measure uses a detailed, 10-year plan which includes hiring of personnel, construction of capital projects and equipment purchases.
As part of the measure, Council adopted an Accountability Ordinance (Ordinance 16-21) to establish accountability measures as outlined below:
Revenues:
• 10% of budgeted revenues must be deposited in an Uncertainty Fund. Money can only be accessed during a fiscal emergency;
• 10% of budgeted revenues must be deposited into the following categories:
o 2% Youth Programs
o 8% Maintenance and Emerging Needs
Expenditures:
• Money cannot be used for debt service payments;
In June of 2024, Council adopted the change for the Uncertainty Fund to match the General Fund’s policy of 30% of expenditures. This change takes effect this fiscal year and will bring the fund to a projected $3.1 million. Revenues for FY 24/25 are projected to be higher than budget by $1.2 million as shown in Table 7, Measure N Projection. Operating expenditures are projected to be slightly below budget by $0.2 million due to not being fully staffed throughout the year.
Table 7 - Measure N Projection
(Expenditures based on amended plan)
The projection for FY 24/25 and going forward include a 1.5% growth in sales tax each year. Like Measure T, Measure N sales tax doesn’t grow at the same rate as the General Fund. Currently, the fund has a large cash balance due to the time it took to get programs up and running. For example, the squad program took a while to get fully up and running due to recruitments and purchasing equipment.
The expenditures for future years are per the current amended plan which will need to be adjusted as costs increase with equipment, vehicles, and technology. In addition, this forecast does not include an additional appropriation of approximately $18 million for Station 51 construction. The budget currently has the station budgeted for $4 million. This station houses two fire units plus one squad unit. The additional funding request will return to Council and the Measure N Committee once the project has been bid out.
Every 8 years, the measure requires an effectiveness review. Staff went to Council on March 17, 2025, for the review. The measure was approved to continue by Council and the Measure N Committee. The current 10-year plan is completed in FY 26/27 and another spending plan will need to be established. Staff will return to Council with the next 10-year plan and a policy establishing how the emerging needs funds will be used along with surplus money.
Recommendation: Staff will continue with FY 24/25 budget as approved. Staff will return to Council and the Measure N Committee to request additional funding and with a proposed policy for surplus money and emerging needs.
ENTERPRISE FUND EVALUATIONS
Enterprise Funds have different accounting requirements than the Governmental Funds. Accounting for the General Fund focuses on paying current year’s operating expenditures, with separate accounting for capital assets and debt service.
However, the accounting for enterprises must:
1. Cover current operating costs;
2. Pay debt service;
3. Replace capital assets; and,
4. Maintain reasonable fund balance.
The evaluation of enterprise funds must determine if all of these financial measurements are occurring or if there are financial circumstances that allow the enterprise to overcome these financial necessities. If the first two items are covered, then an evaluation of the individual fund’s cash balance is needed to determine if the fund has adequate resources to replace capital assets.
Enterprise Fund accounting requires specific costs to be included in the Financial Statements in order to meet Government Accounting Standards. Several of these costs do not affect cash; however they increase expenditures. To determine if the fund is meeting the financial measurements list, these items have been removed from the expenditures shown in the report. An example of this is depreciation. Depreciation is a non- cash expense intended to represent the proportional usage of an entity’s capital plan.
BUILDING SAFETY
Building Safety is currently projected to meet their objective of covering operating and capital cost as shown in Table 8, Building Safety. The Building Safety revenues are projected to be $3.9 million and operating expenditures are projected to be $3.5 million. Revenues are projected to be down from FY 23/24 by $105,000 and up from budget by $257,700. Expenses are projected to be down from budget by $1.1 million due to vacancies, outside service contract for express plan, and allocation charges from City departments. Expenditures are up from FY 23/24 by $674,100 mainly due to capital expenditures.
Table 8
The Building Safety Fund revenues come from residential and commercial building permits. The historic low for the number of permits issued was in FY 10/11 (2,841 permits issued) and the high was in FY 21/22 (6,634 permit issued). This fiscal year we are projecting be higher than last fiscal year with permits issued by 704 bringing the total to 3,801 as shown in Table 9, Total Permits Issued & Valuations. The permit total valuation for this fiscal year is projected to be the lowest in the last 10 years.
Table 9
Total Permits Issued & Valuations
New single-family residential permits make up most of this decrease over the last couple of years and is most likely attributed to higher material costs and increased interest rates which started in FY 22/23 and continued through FY 23/24. This fiscal year, residential building permits is projected to continue to be down as shown in Table 10, New Single family Dwelling Permits. Although, the last couple of months has shown a slight increase and this could potentially be reflecting stabilization of the construction market. The Growth Tier ll boundary is open and we have seen numerous projects processed through Planning and Engineering, potentially gearing up for a market uptick. Staff anticipate new single-family residential permit issuance to remain low with a slight increase through the next fiscal year.
Table 10
Overall, construction activity drives the revenue collection in several categories and is an indicator of future activity for several other categories, such as property taxes, impact fees, and storm and sanitary sewer system fees. Based on this, staff will continue to monitor the building activity.
The Building fund has been able to be more efficient and enhance customer service over the past few years with additional staff. There is an electronic drop box for contractors to submit their plans for review. Staff is currently working towards additional features that will be deployment with the Accela upgrade which will include online permit services and payment options. This will bring the development community a higher level of self service. In addition, staff is continuing to look at ways to reduce permit review turn-around time, maintain zero rollover inspections, and increase customer satisfaction.
Recommended Action: Staff will continue to monitor permit activity.
CONVENTION CENTER
The Convention Center operation is treated as an enterprise even though its revenues do not cover operating costs, debt service, or capital purchases as shown in Table 11, Convention Center. While it can be argued the operation should not be accounted for
in this manner, the fund is accounted for as an enterprise because it supplies a service that is based upon user fees and the City’s intent is for the operation to be as self-sufficient as possible.
Revenues for FY 24/25 are projected to be up $451,100 (20%) from budget and $117,300 (5.3%) from last year. Expenditures for FY 24/25 are projected to be up from budget by $339,000 (9%) and up from last year by $1.5 million (26.1%).
Table 11
Occupancy revenues can be affected by multiple factors such as type of event, length of event, room rental charged, hotel rooms occupied, and discount to rooms booked in the Charter Oak Ballroom given to the Marriott (given policy). As shown in Table 12 Convention Center Operating Revenues and Expenditures, revenues are increasing but expenditures are increasing at a higher rate.
Staff is recommending to appropriate $545,000 to fund additional capital projects:
1) Wi-Fi System Repair - $20,000: The existing convention center Wi-Fi system has been experiencing significant performance issues, including connectivity failures, limited bandwidth and outdated infrastructure, at times impacting user experience and event satisfaction. The Wi-Fi system repair will replace an outdated router and cabling as well as allow the Convention Center to increase its overall bandwidth which will result in increasing internet capacity to accommodate high-density events.
2) Fire Alarm Replacement - $65,000: During the installation of the new fire alarm system at the Convention Center, it was discovered that the submitted plans by the contractor did not include a couple rooms. These additional rooms will require 50 smoke detectors, 50 control relay modules, and programming of these devices. To ensure the fire alarm system remains fully functional and compliant with fire code regulations, these additional components and programming must be incorporated into the project.
3) Fire Riser Inspection and Certification - $10,000: During the installation of the fire suppression system the vendor discovered two pages were omitted from the original scope of work which required another 123 sprinklers that were needed for installation to complete the work. Without the completion of this installation, the Convention Center risks being non-compliance with fire safety regulations, which could impact the center’s operations and public safety. The requested budget appropriation will allow for the necessary upgrades to ensure that the Convention Centers fire suppression system meets all required standards and remains in full compliance with fire code regulations. The completed work will result in the 5-year inspection and certification of the system.
4) Replace 2 Forklifts - $40,000: Staff is requesting to replace the two (2) forklifts that are non-operational that are used to support events at the Convention Center. The current propane forklift is from approximately 1941 and the reading for the number of hours in operation is no longer functioning. The current electric forklift is over thirty (30) years old and has 6,717 hours of use. Both forklifts cannot be repaired, and staff are currently renting forklifts for events. Staff recommends purchasing two (2) used propane forklifts.
5) Replace Ride On Floor Scrubber - $15,000: Staff is requesting to replace a non-operational ride-on floor scrubber that is over twenty (20) years old. The scrubber cannot be repaired, and staff are currently using mops and buckets to clean the floors. This is not ideal for a large facility due to the staff time required to clean the floors manually.
6) Repair Roll Up Doors- $10,000: Staff is requesting to repair up to six (6) roll-up doors within the Convention Center. Four (4) doors are located at concession stands and unable to safely stay open, one (1) door is for a storage area and is currently red tagged for non-operation, and one (1) door is the main loading dock door and is beginning to experience problems. An inspection of the six (6) roll-up doors will provide more details on whether any can be repaired or will need to be replaced.
7) Replace 2 Industrial Coffee Machines- $11,000: Staff is requesting to replace two (2) industrial coffee machine units (FETCO) at the Convention Center. This equipment has been serviced and repaired multiple times by staff and outside vendors and continues to have issues. The City has a contract with three (3) restaurants that provide catering services, and the City is required to provide a functioning kitchen for their use. Without functioning coffee machines, two (2) of the restaurants are unable to provide coffee at events. There is a second brewing system (CURTIS) that is also non-operational, but replacing only the FETCO units at this time will resolve this service issue. Additional replacements will be requested in the next budget cycle.
8) Elevator Replacement Project - $375,000: Staff is requesting an additional appropriation of $375,000 to replace the Convention Center elevator. This project has a current budget of $500,000 and the additional appropriation would bring the project total to $875,000. The current elevator was installed in 1970 and is over fifty (50) years old. Due to its age and being outdated, the ability to secure parts for repair and continued operation is very difficult. There has been several occasions when the elevator was down for months due to parts availability. The elevator’s continued operation is essential to meet ADA and catering requirements for the second floor. In addition, the replacement of the elevator will bring it to current California Building Code which includes electrical, fire alarm, and fire sprinklers ($120,000 estimate). Costs are broken out as the following: improvements - $595,740; architectural/engineering services - $38,000; project management - $39,000; and a ten percent (10%) contingency of $71,000; total project costs are estimated at $863,740.
This fund is subsidized by the General Fund and the additional capital appropriation will be transferred from the General Fund.
Recommended Action: Staff will continue to work on measures that increase revenues and decrease expenditures and appropriate $546,000 for capital projects.
AIRPORT
The Airport’s revenues cover operations and is used to fund the 5% match on its capital which is typically funded by federal aviation grants. Majority of the Airport’s operating revenues are from aviation fuel sales. Fuel sales for this fiscal year are projected to be up from the previous year as shown in Table 13 Airport Fuel Sales in Gallons. Aviation Fuels sales for this fiscal year is projected to be $1.3 million.
The Airport’s second largest revenue source is hanger rentals. Over the last couple of years, Airport has been able to add 14 new hangers with grant funding they received in lieu of not subsidizing air service. There are 4 large corporate hangers and 10 smaller T hangers. All Airport hangers are currently in a lease agreement which is projected to be $0.5 million in rentals this fiscal year. Airport’s total revenues are projected to be up from budget by 4% ($124,600) and operating expenses are up by 1% ($27,200) as shown in Table 14 Airport. This surplus will be used to fund capital or as a grant match in the future.
Table 14
Recommended Action: Staff will continue to monitor Airports expenses and revenues to ensure revenues cover expenditures.
TRANSIT
The City’s Transit operation remains financially sound as a result of the significant federal and state funding it receives. Without these funds, Transit would be unable to operate or replace its capital assets. Further, operating grants pay approximately 80% of its operating costs. With continued operating and capital funding from federal and state grants, the fund will remain healthy.
As shown in Table 15 Transit, operating expenditures are projected to exceed revenues by $1.1 million for FY 24/25. The operating expenditures are higher than budget by $2.3 million due to the increase in the new bus service contract.
Table 15
The V-LINE service to Fresno is in the ninth year of operations as shown in Table 16, VLINE Ridership. The V- LINE operates from Visalia to Fresno with stops at the Transit Center, Visalia Airport, Fresno Airport, Fresno State, and the Fresno Courthouse Park. Ridership was down in FY 19/20 & 20/21 due to COVID-19 restrictions but is currently almost completely back up to pre-COVID numbers as shown in the chart below.
Table 16
VLINE Ridership
The City is required under the Transportation Development Act to maintain a fare revenue- to- operating expense ratio (farebox recovery) of 20%. During the COVID-19 pandemic, this requirement was waived, and since then has not been reinstated. Instead, agencies are working on developing Key Performance Indicators (KPI’s) to be monitored at the local level by our COG the Tulare County Association of Governments (TCAG). Those KPI’s will likely include metrics such as passengers per hour, passengers per mile and other revenue driven efficiencies.
On a Nationwide level, Transit has been experiencing decreased ridership within Transit Agencies of similar size and geographical uniqueness as Visalia Transit. Staff is currently looking at ways to reduce costs and ways to increase ridership and is getting ready to launch a micro transit pilot project that will overlay the fixed route system. The intention is to collect ridership data and use the data to recreate the entire fixed route system in a more efficient way. A consultant will perform the data analysis and advise staff on the best way to reimagine the entire Visalia Transit system.
While highly dependent upon grant funding, Transit is financially sound today. The Federal Government is currently reviewing all expenditures and is looking for ways to close its annual deficit, which could result in a decrease in Transit grant funding. Staff will continue to monitor the Federal and State reductions to determine if they will affect Visalia Transit.
Recommended Action: Continue to monitor funding of Transit, work towards the data analysis goal within the micro transit pilot project and continue to identify ways to reduce operating costs and create efficiencies within the fixed route system.
Animal Services
Animal Services collects revenues from animal licensing, permit fees, shelter fees, kennel fees, and other various fees. The revenue collected is insufficient to cover operating costs. As a result, the fund has an operating loss which is anticipated and approved by City Council because Animal Control is a state mandated function that communities must provide. Much like the Convention Center, the operation requires an operating subsidy from the General Fund.
The revenues for the Animal Control Service Fund are projected to be up from budget by $183,800 and up from last year by $325,900. This is mainly due to contract increases for Dinuba, Exeter and Farmersville animal services. Expenditures are projected to be slightly down from budget by $46,300 and up from last year by $135,100. Most of this increase is due to supplies costing more and the utility increases. The Animal Service Fund is projected to have an operating deficit of $1.3 million for FY 24/25, as shown in Table 18, Animal Services. The deficit combined with the annual debt payment for the Animal Control Facility will require a $1.9 million subsidy from the General Fund.
Table 18
Animal Services revenues have increased substantially with the new contracts for other cities as shown in Table 19 Animal Services Operating Revenues/Expenditure Comparison. Staff will be continuing to work on a plan to increase revenues and decrease expenditures as costs continue to rise.
Table 19
Animal Services Operating Revenues/Expenditure Comparison
Recommended Action: Staff will continue to look for ways to increase revenues and decrease operating costs to lower the General Fund subsidy.
Enterprise Utilities Funds
The City has three utility operations: sewer, storm water and solid waste. These three utilities operate very efficiently and tend to be among the lowest costs for similar services in the South San Joaquin Valley. The City is currently doing a rate study for these rates and will return at a later date with the results.
Wastewater
The Water Reclamation Facility upgrade was completed in 2018 which brings wastewater discharge to tertiary standards: clean enough for all uses except drinking water. The project cost over $114 million and received $18 million in grants to help offset the cost. The project received a State loan of $96.4 million that will be paid back over 30 years at 2.1% interest. The loan payment is $4.4 million annually and will be completed in FY 2047/48.
In anticipation of the project and additional maintenance cost, the Wastewater rates were increased over a three year period, with the last rate increase in 2012. A rate study is budgeted and in the process of being completed. The projected revenues for FY 24/25 are up from budget by $1.2 million as shown in Table 20, Wastewater. This increase is mainly due to growth in sewer accounts. The operating expenditures are projected to be up from budget by $292,000 due to increases in electricity and up from last year by $1.2 million due to vacant positions being filled and legal costs.
Table 20
Recommended Action: Staff will continue to monitor the revenues and expenditures.
Solid Waste
Solid Waste is currently projected to meet the objective of covering operating costs as shown on Table 21, Solid Waste. The projected ending capital cash balance for June 30, 2025, is $24.7 million. The main reason why the Solid Waste operation has been able to accumulate cash in the past is that the State had given the City grants to purchase clean air vehicles. The City is not projecting to receive as many and large of grants in the future due to the grants becoming more competitive with the mandated zero emissions regulation. The zero emissions requirement will affect the Solid Waste Division the most due to the number of vehicles, additional cost per vehicle, and potentially needing to add vehicles to service the existing routes due to not being able to go the same distance as a diesel fueled or CNG truck.
The expenses are projected to be up by $0.5 million from budget. This is mainly due to CNG fuel usage and overtime. The fund has several large projects that need to be completed that will use close to half of its cash. These projects include replacing 10 trucks and constructing and refurbishing several buildings. These projects will improve operations and will allow the department to operate more efficiently. In anticipation of additional vehicle costs, a rate study was approved in the current budget. The last rate change was in 2011.
Table 21
Recommended Action: Staff will continue to monitor the revenues and expenditures as improvements are completed and vehicles replaced in the department.
Storm Sewer
Storm Sewer is projected to have a small operating deficit as shown in Table 22, Storm Sewer. The Storm Sewer fund has been operating with a shortfall and to mitigate this, Council authorized a ballot measure to use a portion the Kaweah Dam/Storm Water Facility Maintenance Fee for storm sewer maintenance.
The ballot measure was passed on March 18, 2013, with 58.47% of the property owners voting yes to continue the fee and expand the use of it. The Storm Sewer fund receives an additional $300,000 annually for local storm water costs, ensuring that the current system operates at full capacity.
Table 22
Staff is currently working with a consultant to update the City’s Storm Master Plan which will eventually outline the storm capital needs and funding. Once completed, staff will return to Council for a potential rate increase.
Recommended Action: Staff will continue to work with the consultant and return to Council with a recommendation to increase fees.
Summary
The City’s operating and capital funds revenues are performing within expected levels. Most of the operating fund’s expenditures are up due to an increase in wages and benefits which were negotiated with the bargaining groups after the budget was prepared along with increased utility, service contracts, and technology increases due to the continuing inflation and increase in minimum wages.
Overall, Visalia’s economy continues to have growth. Building permits are slightly down and the housing market is still holding as interest rates remain higher than past years. Visalia continues to have growth from people relocating here from areas that have a higher cost of living due to retiring or permanently working from home. The City has also benefited from strong growth in the industrial park. While the majority of the revenue forecasts are showing growth, we must recognize that other foreign and domestic factors (i.e. inflation, housing prices, supply chain disruptions, etc.) could negatively impact the growth and expansion of our local economy. Any of these factors could also cause another economic downturn. Staff is optimistic, but acknowledges the City must also be fiscally responsible by having sufficient reserves, balanced budgets, and prudent spending policies.
Fiscal Impact:
None
Prior Council Action: N/A
Other: N/A
Alternatives: N/A
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to appropriate additional funds to the Mid-Year budget as follows:
General Fund:
1. Appropriate funds for capital projects in the amount of $613,300 for FY 24/25
2. Appropriate funds for capital projects in the amount of $35,000 for FY 25/26
3. Appropriate funds for a new position in Planning
Internal Service Funds:
Vehicle Replacement Fund
1. Appropriate funds for capital projects in the amount of $308,000
Enterprise Funds:
Convention Center Fund
1. Appropriate funds for capital projects in the amount of $546,000
end
Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: None