Agenda Item Wording:
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Public Hearing on, and adoption of, the City of Visalia 2022/23 and 2023/24 multi-year budget. Resolution 2022-43.
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Deadline for Action: 6/30/2022
Submitting Department: Finance and Technology Services
Contact Name and Phone Number: Renee Nagel, Finance & Technology Director, 713-4375; Amee Swearingen, Financial Analyst, 713-4170
Department Recommendation: That the City Council on June 20, 2022 take the following actions:
• Conduct a required public hearing to receive citizen input; and
• Adopt the City Fiscal Year 2022/23 and 2023/24 Budgets;
Background Discussion:
The City’s budget document is comprised of a 2-year operating plan, a 6-year capital improvement program, and an appropriation for debt service and other uses. Moreover, it is a reflection of Council’s leadership in shaping the service priorities and goals of the Visalia community while maintaining fiscal prudence and oversight. The budget is a dynamic document that demonstrates to the public our commitment to service and our focus on meaningful work and significant projects.
The proposed budget has been presented to Council in sections at many Council meetings since February. The Capital Improvement Program was presented to Council by Fund from February to March. The Operating and remaining sections were presented during both meetings in May. Below is the link to the FY 2022/23 & 2023/24 proposed budget on the City’s website:
<https://www.visalia.city/depts/finance/budget_n_financial_reports/default.asp>
Staff recommends that the Council adopt a budget by June 30 to comply with the Charter requirements. The charter requires a budget appropriation for all expenditures. However, if Council is concerned or desires further discussion of the budget, further hearings could be scheduled. This would result in the City having expenditures with no appropriation, which is not a desirable or recommended approach if it can be avoided.
Finally, the Visalia Charter states that at any regularly scheduled meeting the City Council may make changes to the adopted budget. That being the case, Council has the ability to reshape the budget as it sees fit throughout the year. As staff often mentions, the budget is a living, breathing document, because fiscal circumstances change constantly and circumstances can dictate that changes to the budget must be made along the way.
The total budget for FY 2022/23 is $261.3 million and FY 2022/24 is $270.9 million as shown in Table 1- Proposed Appropriation.
Please note that the proposed budget appropriation for both fiscal years is higher than what was presented to Council on May 6th and listed in the budget document that was provided. Both years did not include the Measure N Emerging Needs Fund and the Youth Services Fund which increased the total appropriations for FY 22/23 by $1.72 million and FY 23/24 by $1.77 million. All Measure N budget presentations to Council and the Measure N Oversight Committee have included the correct amounts.
General Fund
The General Fund is the largest individual fund in the City and is comprised of 8 operating departments. The proposed operating budget for the General Fund is $77.6 million in FY 2022/23 and $80.2 in FY 2023/24. The General Fund is expected to have a surplus in both budget years which is projected to be $6.9 million in FY 2022/23 and $6.2 million in FY 2023/24, as shown in Table 2, General Fund Recommended Budget.
Table 2 - General Fund Recommended Budget
Special Revenue, Enterprise Funds, and Other Funds
Revenues and expenditures are increasing in all funds in these categories. Revenues are exceeding expenditures in all funds except for the Animal Services, Baseball, and Convention Center. These funds require a subsidy as outlined in the budget document on page 2-45 (Financial Summary Section).
For more detail on the Special revenue and Enterprise Funds, please refer to the Budget Message located in the first section of the biennial budget document.
Capital Improvement Projects (All Funds)
The City’s Capital Improvement Program (CIP) consists of a six year plan with the first two years being appropriated with the recommended biennial budget. The projects recommended have been reviewed by City Council and are listed in detail in the Capital Improvement Section of the budget document. The total CIP recommended for FY 2022/23 is $53.1 million and $56.2 million for FY 2023/24 as shown in Table 3- 2022/23 to 2027/28 CIP Summary.
Table 3 - 2022/23 to 2027/28 CIP Program Summary
Recommended Budget Positions
The proposed budget includes a total of 679 full-time employees and 174 part-time employees. This count includes the addition of 18 new full-time positions across the organization. The proposed positions are critical for the implementation of the City Council’s priorities and goals to enhance services and maintain the quality of life for our Citizens. In total, 8 full-time positions are proposed within the General Fund, and 10 full-time positions in the Internal Service, Special Revenue, and Enterprise funds. The recommended new positions will increase operating costs by a total $1.0 million annually, and also will add an estimated one-time cost of $0.3 million to equip the new employees. The proposed positions are listed in Table 4 - FY 2022/23 & 2023/24 Recommended Positions.
Table 4 - FY 2022/23 & 2023/24 Recommended Positions
Budget Conclusion
The City is entering this upcoming two-year budget in a good financial position due to seeing higher than normal growth over the last couple of years and continuing to adhere to the fiscally sound policies that are in place. While revenue forecasts are showing growth in all categories, 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. The City should continue to be conservative with the significant rise in costs for goods and services. We will continue to monitor the City finances closely and will return to Council with amendments as needs and resources are identified.
Fiscal Impact:
None
Prior Council Action: Council conducted work sessions at all meetings in February and March 2022 to review Capital Project’s. May 2 and 15th the proposed budget was presented for FY 2022/23 & 2023/24.
Other: None
Alternatives: None
Recommended Motion (and Alternative Motions if expected):
recommendation
I move that the City Council on June 20, 2022:
• Conduct a required budget public hearing;
• Adopt the City Fiscal Year 2022/23 and 2023/24 Budgets
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: Budget Resolution 2022-43