Agenda Item Wording:
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Public Hearing and adoption of the City of Visalia 2024/25 and 2025/26 multi-year budget. Resolution 2024-26.
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Deadline for Action: 6/30/2024
Submitting Department: Finance and Technology Services
Contact Name and Phone Number: Renee Nagel - Finance & Technology Director (559) 713-4375, Amee Swearingen - Budget Analyst (559) 713-4170
Department Recommendation:
That the City Council take the following actions:
• Continue review and discussion of the proposed budget;
• Conduct a required public hearing to receive citizen input; and
• Approve the City Fiscal Year 2024/25 and 2025/26 Budget. Specific items may be requested for separate approval.
Background Discussion:
The City Council has spent the last several months reviewing the Capital Budget and Measure N. Last meeting the operating budget and the budget, as a whole, was presented to Council. Questions not addressed at the June 3rd meeting are addressed at the end of this report.
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 desires further discussion of the budget, the June 17th public hearing could be continued to a special meeting which would need to be held before June 30th.
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 2024/25 is $295.4 million and FY 2025/26 is $329.9 million as shown in Table 1- Proposed Appropriation.
Table 1
Proposed Appropriations
The proposed budget includes a total of 708 full-time employees and 225 part-time employees. This count includes the addition of 16 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. The recommended new positions will increase operating costs by a total $1.4 million annually, and also will add an estimated one-time cost of $0.5 million to equip the new employees. The proposed positions are listed in Table 2, FY 2024/25 & 2025/26 Recommended Positions.
Table 2
FY 2024/25 & 2025/26 Recommended Positions
General Fund
The General Fund is the largest individual fund in the City and is comprised of 9 operating departments. The proposed budget for the General Fund is $95.1 million in FY 2024/25 and $98.8 in FY 2025/26. The General Fund is expected to have a surplus in both budget years which is projected to be $6.0 million in FY 2024/25 and $3.6 million in FY 2025/26, as shown in Table 3, General Fund Recommended Budget.
Table 3
General Fund Recommended Budget
Special Revenue, Enterprise, and All Other Funds
The Measure T Plan will be brought to Council for the annual recertification and amendments on June 17th.
Measure N had its first public hearing May 20th and the second public hearing on June 3rd. Final budget adopted is requested with the Citywide Budget.
There are no other notable changes in the Special Revenue or Enterprise Funds. For more detail on the Special Revenue, Enterprise, and Other 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 2024/25 is $60.2 million and $87.1 million for FY 2025/26 as shown in Table 4, 2024/25 to 2029/30 CIP Summary.
Table 4
2024/25 to 2029/30 CIP Summary
Budget Conclusion
The recommended budget includes continued revenue growth in majority of the funds as economic activity in the City continues to increase and new businesses open. While revenues continue to have small 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 we must also be fiscally responsible by having sufficient reserves, balanced budgets, and prudent spending policies. The proposed budget meets all of these objectives.
Response to Council Questions from June 3 meeting:
Can the Riverway Sports Park fence be completed sooner?
The Riverway Sports Park fence project is budgeted for $1.5 million in FY 25/26 and is listed as a project that would be deferred if a recession occurred. If Council choses, they can direct staff to design in FY 24/25 and prepare bid documents. This would allow the bid to be issued and awarded in July 2025 (FY 25/26). If this option is chosen, staff will ask to appropriate funds for the design when the contract is brought to Council for award.
Fiscal Impact:
None
Prior Council Action: Council conducted work sessions on Feb 20th, and March 4th, 18th, and April 1st , 15th and May 6th to review Capital Project’s. Conducted Public Hearings on May 20th and June 3rd for Measure N. Reviewed and discussed proposed budget for all funds on June 3rd.
Other: N/A
Alternatives: N/A
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to adopt the 2024/25 & 2025/26 Budget and Resolution 2024-26.
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: Resolution 2024-26