The purpose of this agenda item is for Council to consider adopting the Fiscal Year 2021-2022 (“FY 21-22”) Annual Operating and Capital Budget. Carmel Municipal Code Section 3.060.010 states “prior to the beginning of each fiscal year, the City Council shall adopt a budget for expenditures and anticipated revenues.'' The new fiscal year begins on July 1, 2021.
The FY 21-22 Recommended Budget totals $25.5 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 Budget authorizes 94.14 full-time equivalent (FTE) positions, of which 81.21 are proposed to be funded. The FY 21-22 Recommended Budget is balanced, meaning that anticipated revenues and transfers in are equal to, or slightly exceed, planned expenditures and transfers out, among the various funds.
The FY 21-22 Recommended Budget proposed for Council adoption reflects minor changes since the budget was first presented to Council on May 4 and 18, 2021 respectively. The revisions include: (1) the addition of 1.0 FTE associate planner within the Community Planning and Building Department; (2) an increase of $20,000 to $30,000 in total for landscaping and other beautification efforts housed within the Public Works Department; (3) an increase of $3,000 within the City Administration budget to support the United Way 211 and (4) re-allocating $30,000 in General Fund revenue from street paving project to sidewalk repairs to fund the anticipated cost of using pavers (no net increase to expenditures).
The increased cost of approximately $134,000 to the General Fund is offset by using approximately $80,000 from the Other Post Employment Benefit (OPEB) Reserve Fund to pay for the FY 21-22 cost of retiree healthcare (rather than using General Fund revenues) and by reducing the transfer to the Vehicle and Equipment Fund by approximately $50,000. Recognizing the City’s need to replace vehicles, such as the street sweeper and fire engine in the next five years, the FY 21-22 Recommended Budget originally proposed to allocate $358,000 to the Vehicle and Equipment Fund to address anticipated short falls within the Fund in FY 20-21 as well as set aside funding to build the balance for future needs. This amount is now proposed to be approximately $308,000 instead, which would bring the fund balance to approximately $262,000 on June 30, 2022.
In addition, based upon Council direction provided on May 18, 2021, the amount set aside as part of the General Fund Reserve in FY 21-22 represents 15% of the General Fund Operating Budget, an increase over the 10% threshold stipulated within the Carmel Municipal Code.