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Finance Committee
Meeting Date: 11/09/2021  
FROM: Bill Gallardo

Budget Adjustments to the City Operating and Capital Improvement Program Budgets for Fiscal Year 2021-22
Adopt the attached resolutions appropriating funds to adjust the Fiscal Year 2021-22 City Operating and Capital Improvement Program Budgets.
Budget adjustments are presented to the City Council periodically for review. These adjustments represent the appropriation of items previously approved by the City Council during the fiscal year, or staff recommended adjustments for City Council consideration as well as requested adjustments to revenue estimates. The recommended adjustments to the City Operating Budget are listed in City - Exhibit A. These adjustments are separated by funding source and the accounts are identified as either revenue or expenditure accounts.

Included in these adjustments is the recognition of the additional American Rescue Plan Act (ARPA) monies for this fiscal year.  While the FY 2021-22 budget document was being finalized, staff was notified that the City was allocated an additional $1,103,758 than anticipated for this fiscal year as well as last.   ARPA revenue is being recorded in the Disaster Recovery Fund (911) and being transferred to the General Fund (110) for the provision of government services to the extent of revenue loss to the City due to the COVID-19 public health emergency.    

Over the past couple of months, negotiations with a majority of the labor groups reached an agreement with the City.  The following employee groups are included in the proposed adjustments:  the Administrative and Professional Employees' Association (APEA), the Brea City Employee's Association (BCEA), the Brea Management Association (BMA), the Brea Police Management Association (BPMA), the Executive Group, and part-time employees.   The total agreed upon cost that was not included in the FY 2021-22 budget for all funds is $740,994.  Of this amount, approximately 71% or $523,930 will be paid by the General Fund.  The remaining 29% will be paid by other funding sources as they provide the funding for those employees.

During the Budget Public Hearing on June 15, 2021, staff was directed to move the funding for the Commercial Enforcement Officer from the Community Benefit & Economic Development Fund (140) to the General Fund (110).  This adjustment proposes the cost of the Officer of $316,097 be transferred accordingly.   City Council emphasized that the monies in Fund 140 be committed to legacy type projects.

With the lifting of some COVID and social distancing restrictions, the Community Services Department has been able to open the Community Center as well as offer more leisure activities to the community.   The department has seen an increase in facility reservations, aquatics, sports, and contract class registration and has offered a number of concert and theatrical performances.  They are anticipating an increase of $272,302 in revenues.  Conversely, there is a need to increase their expenditures to cover the cost of additional contract and professional services, program supplies, and part-time staff hours to provide these additional programs.   The department is asking for an expenditure adjustment of $187,087 for a net increase in revenues of $85,215.   

Included in these adjustments are a number of professional services agreements that have been previously approved by the City Council.   These adjustments include:  $100,000 from the Geneal Plan Maintenance Fund (120) for conducting General Plan amendments and zone changes approved on July 20, 2021; $23,502 from the Housing Successor Fund (280) for financial analysis approved on June 15, 2021; and $34,360 form the Community Development Block Grand Fund (290) to administer the City's Housing Rehabilitation approved on June 1, 2021.

For Capital Improvement Projects, $25,000 in funding from the Road Maintenance & Repair Fund (221) is being requested for additional project design for Street Improvements for Central Avenue and State College.  In addition, $21,100 is being requested from the Park Development Fund (250) for the Arovista Park modernization project.  Lastly, $80,000 is being requested from the Golf Course Fund (465) to cover the restroom improvements at the Birch Hills Golf Course (#7968) and Brea Creek Golf Course (#7969).  There are sufficient revenues over expenditures in both of these funds to cover these increased one-time costs.  The Capital Improvement Program Budget adjustments in CIP - Exhibit A consist of an increase in expenditures of $127,100 and corresponding adjustments to revenues and transfers-in as follows:

Road Maintenance & Repair Fund (221) $    25,000
Park Development Fund (250) 22,100
Golf Course Fund (465) 80,000
TOTAL $  127,100
The City Operating Budget adjustments for the General Fund (110) in Exhibit A resulted in an increase in revenues and transfers-in of $1,462,874 and an increase in expenditures of $1,184,001, for a net General Fund increase in revenues over expenditures of $278,873. The City Operating Budget adjustments for all funds including the General Fund resulted in an increase in revenues and transfers-in of $2,644,801 and an increase in expenditures and transfers-out of $2,632,912 for a net increase in revenues of $11,889.  The Capital Improvement Program Budget adjustments resulted in an increase in expenditures of $127,100 and a corresponding adjustment to revenues and transfers-in.
William Gallardo, City Manager
Prepared by:  Faith Madrazo, Financial Services Manager
Concurrence:  Cindy Russell, Administrative Services Director
Resolution - City
Exhibit A - City
Resolution - CIP
Exhibit A - CIP

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