The Fiscal Year 2021-2022 (“FY 21-22”) Recommended Budget of $25.3 million is submitted for Council’s consideration. Proposed expenditures total $25.3 million, which includes the General Fund operating budget ($22.0 million), capital budget ($2.3 million) and funding for debt service ($883,000) and workers compensation ($116,000). The FY 21-22 Recommended Budget is balanced, meaning that revenues are equal to expenditures. There is no planned use of General Fund prior years' savings (fund balance) to meet new expenditures.

 

The General Fund Operating Budget funds City departments, services and functions.  With a budget of $22.0 million, the General Fund accounts for 87% of the total citywide budget.  The largest type of expenditure is related to staffing. Salary and benefits are approximately $11.0 million, or 50% of the $22.0 million operating budget.  Salary and benefit costs include funding for an additional 7.73 full-time equivalent (FTE) positions compared to FY 20-21 to support daily citywide operations, capital projects and a phased reopening of City facilities (80.21 FTE total). Pension-related expenses are budgeted at $2.8 million, or 13% of the General Fund, and include $1.8 million for the City’s annual unfunded accrued liability (“UAL”) payment to CalPERS and $1.0 million to implement pension mitigation strategies, such as funding a Section 115 Trust and/or making an additional payment to CalPERS.  Together, these costs total 63% of the Operating Budget.

 

Another way to look at General Fund expenses is by department and function. Public Safety expenditures (Police, Fire and Ambulance) total $8.6 million, or 39% of the Operating Budget, followed by Public Works with a budget of $2.9 million, or 13% of the General Fund. Citywide expenditures total $4.1 million, which includes $2.8 million for pension as previously indicated, and other required operational expenses such as utilities, water and sewer assessments and property and general liability insurance. This represents 18% of the General Fund. Administration ($2.1 million), Community Planning and Building ($1.6 million) and Library ($952,000) represent 10%, 7% and 4% of the General Fund budget respectively.

 

In addition, the FY 21-22 Recommended Budget includes $2.3 million for capital projects and vehicle and equipment purchases, which represents 9% of the citywide budget. Capital outlay includes the following projects: 

• Purchase of an ambulance and a police vehicle;
• Installation of a police radio antenna;
• The first year of a multi-year lease for police radios;
• Purchase of a generator for the Park Branch Library;  
• Upgrade to computer servers;
• Sunset Center materials testing and window replacement; 
• Annual paving project;
• Sidewalk repairs;
• Drainage repairs;
• Installation of wayfinding signs;
• Accessibility upgrades to City facilities;
• Library Master Plan;
• The first phase of digitization of property files for public access;
• North Dunes Habitat Restoration;
• Scenic Pathway Barrier Rails;
• Beach Sand Survey and Wall Inspections;
• Design of the Mission Trail Nature Preserve Stream Stability project; and
• Mission Trail Nature Preserve Well Decommissioning and Tank Removal.
  
  

The budget also includes $883,000 for debt service payments on the City’s three existing bonds and $116,000 for workers compensation claim administration, potential claims and costs associated with the implementation of preventive measures.

 

As part of the May 18, 2021 meeting, staff will provide a detailed presentation regarding the operating budget by department and function, the capital budget and other expenditures and responses to any questions that staff may receive in advance of the meeting.  The public is encouraged to submit questions pertaining to the budget to City staff by May 14, 2021.

 

The FY 21-22 Recommended Budget is balanced; however, additional operating and/or capital expenses will impact the budget.  In particular, there are three policy options for Council to consider as part of the May 18, 2021 budget meeting, including:

 

1.    Changes to service levels and staffing: In light of the pandemic, City staff have developed alternative methods to deliver services while adhering to COVID-19 related safety protocols.  As various City facilities re-open to the public, the manner in which some services are currently delivered would also change. As such, Council may provide direction regarding the delivery of services and proposed hours of operations at City facilities, which may impact proposed staffing levels.

 

2.    Changes to capital projects: Based upon the capital projects recommended for funding, City staff have developed the attached proposed FY 21-22 Capital Improvement Plan (CIP) Work Plan to help prioritize projects based upon current and proposed resources. While the FY 21-22 Recommended Budget includes funding for a capital projects manager, it will take time to recruit and hire for this position. This means that many of the proposed projects will be managed by existing City staff and other projects will be on hold until this position is filled. An increase in the total number of projects funded may result in some of the projects not being started in FY 21-22 and carried over to the next fiscal year based upon staff capacity as well as the potential complexity of the individual project.

 

3.    Changes to other operating expenses: Any additional changes to the operating budgets of the various City departments and functions would also impact the status of the budget.