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HomeMy Public PortalAbout2023-05-30-Lynwood_Agenda_Special1.CALL TO ORDER 2.CERTIFICATION OF AGENDA POSTING BY CITY CLERK 3.ROLL CALL OF COUNCIL MEMBERS 4.PLEDGE OF ALLEGIANCE 5.INVOCATION This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200. Procedures for Addressing the Council IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO CITYCLERK@LYNWOODCA.GOV OR FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL. AGENDA City Council Special Meeting TO BE HELD ON May 30, 2023 COUNCIL CHAMBERS - 11350 BULLIS ROAD. LYNWOOD, CA 90262 OR WEB CONFERENCE VIA ZOOM - TO PARTICIPATE VIA ZOOM OR BY TELEPHONE: 1-669- 900-9128 OR 1-253-215-8782 MEETING ID: 835 2029 8238 Duly Posted on 5/26/23 5:30 PM Oscar Flores, Mayor Rita Soto, Mayor Pro Tem Gabriela Camacho, Council Member Juan Munoz-Guevara, Council Member Jose Luis Solache, Council Member PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) City Council Special Meeting 1 6.NEW/OLD BUSINESS 6.1 PROPOSED 2023-2025 BIANNUAL CITYWIDE BUDGET STUDY SESSION 7.CITY COUNCIL ORAL AND WRITTEN COMMUNICATION 8.STAFF ORAL COMMENTS NON-AGENDA PUBLIC ORAL COMMUNICATIONS THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE COUNCIL ON ITEMS WITHIN THE JURISDICTION OF THE COUNCIL AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY THE COUNCIL, BUT COUNCIL MAY REFER THE MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).) Comments: In preparation for the 2023-2025 Biennual Citywide Budget Hearing, the purpose of this Budget Study Session is to review the proposed revenue and expenditure budget for the upcoming two fiscal years. The focus at the budget study session is on the General Fund. Staff looks forward to Council’s comments on the draft budget and proposed modifications for incorporation into the full Proposed 2023-2025 Biennual Citywide Budget (City, Successor Agency, Lynwood Utility Authority, Appropriations Limit, and Master Fee Schedule), which will be presented at the scheduled budget hearing for Council approval. Recommendation: Staff recommends that the City Council conduct a budget study session to receive information and presentations on the proposed 2023-2025 Biennual Citywide Budget and provide input. ADJOURNMENT THE NEXT REGULAR MEETING WILL BE HELD ON JUNE 6, 2023 AT 6:00 P.M. IN THE COUNCIL CHAMBERS OF THE CITY HALL ANNEX, 11350 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA. City Council Special Meeting 2 AGENDA STAFF REPORT DATE:May 30, 2023 TO:Honorable Mayor and Members of the City Council APPROVED BY:Ernie Hernandez, City Manager PREPARED BY:Harry Wong, Director of Finance & Administration SUBJECT:PROPOSED 2023-2025 BIANNUAL CITYWIDE BUDGET STUDY SESSION Agenda Item # 6.1. Recommendation: Staff recommends that the City Council conduct a budget study session to receive information and presentations on the proposed 2023-2025 Biennual Citywide Budget and provide input. Background: In preparation for the FY 2023-25 Biennual Budget Hearing, the purpose of this Budget Workshop is to review the FY 2023-25 City Manager Proposed Budget. The focus at the Budget Workshop is on the General Fund. Staff looks forward to Council’s comments on the draft budget and proposed modifications for incorporation into the full Proposed FY 2023-25 Biannual Citywide Budget (City, Successor Agency, Lynwood Utility Authority, Appropriations Limit, and Master Fee Schedule), which will be presented at the scheduled budget hearing for Council approval. Discussion and Analysis: FY 2022-23 General Fund Year-End Performance On July 20, 2021, the City Council adopted the FY 2021-22 budget and approved the FY 2022-23 budget. On June 21, 2022, the City Council adopted the updated second year operating budget (the FY2022-23 revised adopted budget). The revised adopted FY 2022-23 General Fund Budget included $41.35 million in expenditures, $42.14 million in revenues, with an operating surplus of $789k. The City is projecting to end the year with $42.23 million in expenditures, offset by $44.68 million in revenue and surplus of $2.45 million. Please note the projected (unaudited) fund balance for FY 2022-23 year-end (i.e., beginning fund balance of the FY2023-2025 biennial budget) indicates a $17.85 million of spendable monies. City Council City Council Special Meeting 3 FY 2022-23 GENERAL FUND BUDGET FY 2022-23 Revised Adopted Budget FY 2022-23 Projected Year-End (Unaudited) Beginning Fund Balance $3,898,348 $15,391,252 Revenues $42,139,935 $44,684,205 Expenditures ($41,350,674)($42,230,394) Operating Surplus (Deficit)$789,261 $2,453,811 Ending Fund Balance $4,687,609 $17,845,063 FY 2022-23 Year-End Financial Report (Unaudited): The table below details the City’s FY 2022-23 Revised Adopted Budget and FY 2022-23 Year- End Estimates (Unaudited) for revenue and expenditures. Overall, revenues for the City are projected to be up by 6.04% (or $2.54 million) compared to the FY 2022-23 Revised Adopted Budget. Numerous sources of revenue are projected to exceed the revised adopted FY2022- 23 budget figures. The City’s expenditures are projected to be up by 2.13% (or $880,000) compared to the FY 2022-23 Revised Adopted Budget. MAJOR GENERAL FUND REVENUES FY 2022-23 Revised Adopted Budget FY 2022-23 Projected Year- End Estimate (Unaudited) Increase (Decrease) Amount Increase (Decrease) % Revenues Property Tax $13,094,249 $13,630,301 $536,052 4.1% Sales Tax (including Measure PS)14,681,883 13,902,695 (779,189)-5.3% Utility Users Tax 5,270,000 6,326,984 1,056,984 20.1% Franchise Fees 1,690,991 1,169,704 (521,287)-30.8% Business License & Other Tax 605,100 635,495 30,395 5.0% Charges for Current Services 1,534,800 1,279,496 (255,304)-16.6% Fines, Forfeits, & Penalties 906,000 775,041 (130,959)-14.5% Other Revenues 2,138,238 4,693,816 2,555,578 119.5% Transfers In 2,218,674 2,270,674 $52,000 2.3% Total Revenues $42,139,935 $44,684,205 $2,544,270 6.0% Expenditures Operational Expenditures $38,790,040 $34,917,117 ($3,872,923)-10.0% Transfers Out 2,560,634 7,313,277 4,752,643 185.6% Total Expenditures $41,350,674 $42,230,394 $879,720 2.1% City Council City Council Special Meeting 4 FY 2023-25 Proposed Budget Overview The City Manager and Finance staff met with all Departments and Offices to review and discuss FY 2023-25 proposed budgets. The table below highlights the FY 2023-24 and FY 2024-25 General Fund Proposed Budgets. FY 2023-25 GENERAL FUND PROPOSED BUDGET INCLUDING CIP EXPENDITURES FY 2023-24 Proposed FY 2024-25 Proposed Revenue $42,318,951 $44,035,576 Expenditures $56,109,640 $47,945,507 Projected Deficit ($13,790,689)($3,909,932) Beginning Balance $17,845,063 $4,054,374 Ending Balance $4,054,374 $144,443 Fund Balance Needed to Meet Reserve Policy $5,610,964 $4,794,551 The General Fund is the primary source and operating fund for most of the services, such as public safety (Los Angeles County Sheriff & Fire), street and park maintenance, and community services, that the City provides to the community. The FY 2023-24 and FY 2024-25 Proposed Budgets were developed in the context of the City gradually recovering from the impact of the Covid-19 pandemic, but still facing a lot of economic uncertainties due to the ongoing Russo-Ukrainian war, increasing trade conflict with China and supply chain disorder, as well as the continue inflationary pressures and the increasing recessionary risk. For FY 2023-24, the proposed revenue for property, sales, and use taxes is comprised of 65.18%, or $27.58 million of the total $42.32 million in resources provided to the General Fund. Utility user’s tax, licenses, permits, franchise fees, fines, interest, rent and other miscellaneous sources represent 30.54% of revenues ($12.93 million). Interfund transfers from other funds make up another 4.28%, or $1.81 million of the total. For FY 2024-25, the proposed revenue for property, sales, and use taxes is comprised of 64.12%, or $28.24 million of the total $44.04 million in resources provided to the General Fund. Utility user’s tax, licenses, permits, franchise fees, fines, interest, rent and other City Council City Council Special Meeting 5 miscellaneous sources represent 30.86% of revenues ($13.59 million). Interfund transfers from other funds make up another 5.02%, or $2.21 million of the total. FY 2023-24 AND FY 2024-25 PROPOSED GENERAL FUND BUDGET FY2022-23 Revised Adopted Budget FY 2022-23 Projected Year- End Estimate (Unaudited) FY 2023-24 Proposed Budget FY 2024-25 Proposed Budget Revenues Property Tax $13,094,249 $13,630,301 $13,682,000 $13,952,000 Sales Tax (including Measure PS) 14,681,883 13,902,695 13,902,717 14,285,148 Utility Users Tax 5,270,000 6,326,984 5,295,000 5,347,950 Franchise Fees 1,690,991 1,169,704 2,128,000 2,735,000 Business License & Other Tax 605,100 635,495 731,600 731,600 Charges for Current Services 1,534,800 1,279,496 1,616,450 1,618,250 Fines, Forfeits, & Penalties 906,000 775,041 897,000 897,000 Other Revenues 2,138,238 4,693,816 2,257,994 2,260,438 Transfers In 2,218,674 2,270,674 1,808,190 2,208,190 Total Revenues $42,139,935 $44,684,205 $42,318,951 $44,035,576 Expenditures Operational Expenditures $38,790,040 $34,917,117 $42,156,342 $43,488,972 Transfers Out 2,560,634 7,313,277 13,953,298 4,456,535 Total Expenditures $41,350,674 $42,230,394 $56,109,639 $47,945,507 The FY 2023-24 proposed budget includes $56.11 million in recommended expenditures. Personnel costs, which include salaries and benefits, represent $8.89 million of the total expenditures. Operational costs, which include materials, services and supplies, account for $33.27 million of the budget. Debt service and transfers to other funds costs total $13.95 million. The proposed expenditures have increased by 35.69% or $14,758,965 over FY 2022- 23 revised adopted budget. Such substantial increase is primarily due to that $9.82 million of the total $13.85 million budgeted transfers are related to CIP projects, which are considered as non-recurring expenditures. The FY 2024-25 proposed budget includes $47.95 million in recommended expenditures. Personnel costs, which include salaries and benefits, represent $9.15 million of the total expenditures. Operational costs, which include materials, services and supplies, account for City Council City Council Special Meeting 6 $34.34 million of the budget. Debt service and transfers to other funds costs total $4.46 million. The projected expenditures have increased by 15.95% or $6.59 million over the FY 2022-23 revised adopted budget (of which $1.74 million increase is attributable to the increase in contract cost of police and fire safety services), but decreased 14.55% or $8.16 million proposed FY 2023-24 budget. Other Proposed Budget Recommendations In order to properly set aside and maintain the reserve funds, the City Manager is recommending the following transfers: Contingency Set-Aside Fund $1,366,737 (Beginning FB - $366,737) Rainy Day Fund $1,485,559 (10% of Measure PS) Also, as part of the upcoming budget adoption, staff is recommending the establishment of the following internal service funds: Self-Insurance Fund Information Technology Fund Equipment/Machinery/Vehicle Replacement Fund Equipment/Machinery/Vehicle Maintenance Fund The following internal service fund shall be established in the second year updated budget in FY2024-25 or the next biennial budget of FY2025-27: Facilities Maintenance Fund In order for the City to properly budget for the above services, staff believes it is important to budget for the internal service fund charges with adequate allocation bases and to keep up with the service level. Additionally, in an effort to maintain adequate service levels, staff recommends that the City Council consider the following included in the proposed budget: Additions - Full-Time - (1) Senior Management Analyst, (1) Communications Specialist, (1) Public Works Operation Manager, (1) PW-Water Compliance Specialist, (1) PW-Senior Accounting Technician, (1) PW-Assistant Administrative Analyst; City Council City Council Special Meeting 7 - Part-Time - (5.48) FTE PW-Maintenance workers, and ten (10) Recreation staff Deletions - Full-Time - (1) ARPA Coordinator, (1) Public Works Operations Supervisor, (1) PW-Water Service / Wastewater Maintenance Worker II, (1) PW-Permit Technician, (1) PW-Accounting Technician; Part-Time - three point sixty (3.60) PW-Water/Sewer Service workers Relocations Full-Time - (1) Administrative Analyst III from Community Development to City Manager Office; (1) Senior Management Analyst from Community Development to Public Works/Human Resources; (1) Media Specialist from City Manager’s Office to Recreation & Community Services; and (1) Administrative Assistant from Community Development to Public Works.. Fiscal Impact: It is estimated that the General Fund balance will complete the FY 2022-23 fiscal year at $17.85 million. This is an estimated increase of $2.45 million in revenues over expenditures. However, revenue estimates for FY 2023-24 and FY 2024-25 only have small increases, where the proposed budgeted expenditures have significant increases due primarily to police/fire services and capital improvement expenditures. Based on the FY 2023-24 Proposed Budget and FY 2024-25 Proposed Budget, the projected General Fund balance would be $4.05 million at the end of FY 2023-24 and $144,000 at the end of FY 2024-25. Coordinated With: City Manager’s Office City Attorney All Departments City Council City Council Special Meeting 8