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Agenda Item 21.

City Council Meeting

Meeting Date:	02/15/2022
FROM:	Bill Gallardo

Subject:

Budget Adjustments to the City Operating Budget for Fiscal Year 2021-22

RECOMMENDATION

Adopt the attached resolution appropriating funds to adjust the Fiscal Year 2021-22 City Operating Budget.

BACKGROUND/DISCUSSION

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.

City-wide revenue projections have changed since budget adoption as well since the last quarterly adjustment in November 2021. Projections for Property Tax and Transient Occupancy Tax have increased by $346,000 and $254,722 respectively. These increases are a result of new building construction and property turnover and an increase in travel and tourism. This increase in property tax is also reflected in the increased projections of $60,000 for Paramedic Tax. However, the projection for Sales Tax receipts has declined by $167,375. One of the reasons for this decline is lower receipts collected from the County Pool during this past quarter.

At the last City Council meeting, two labor groups reached an agreement with the City. The following employee groups are included in the proposed adjustments: the Brea Police Association (BPA) and the Brea Fire Association (BFA). The total agreed upon cost that was not included in the FY 2021-22 budget for all funds is $262,414. Of this amount, approximately 95% or $250,396 will be paid by the General Fund. The remaining 5% will be paid by other funding sources as they provide the funding for those employees.

The Fire Department continues to respond to mutual aid throughout California. Fire Administration continues to be diligent in seeking reimbursement for costs incurred. Mutual aid responses included: the 2021 ONC IMT Staging Incident at the Northern California Geographic Area Center; the Dixie Fire in Butte County; the Windy Fire at the Tule River Indian Reservation; the Alisal Fire in the Los Padres National Forest; and the Monument Fire in the Shasta-Trinity National Forest.

For Community Services, there is a revenue reduction of $49,000 due to the cancellation of the Bridal Show and a Theatre Production. Likewise, there is a reduction in expenditures of $29,000 for those programs. With the Curtis Theatre being closed due to the cancellation, staff has arranged to have needed repairs in the dressing room performed ($25,000) such as flooring, and countertop and cabinet replacement . Lastly, there is a deobligation of $316,387 for an over budgeted position in the Summer Day Camp/Youth Excursion Program.

COMMISSION/COMMITTEE RECOMMENDATION

The attached FY 2021-22 budget adjustments were reviewed by the Finance Committee on February 8, 2022 and were recommended for City Council approval.

FISCAL IMPACT/SUMMARY

The City Operating Budget adjustments for the General Fund (110) in Exhibit A resulted in an increase in revenues of $424,740 and an increase in expenditures of $52,979, for a net General Fund increase in revenues over expenditures of $371,761. The City Operating Budget adjustments for all funds including the General Fund resulted in an increase in revenues of $484,740 and an increase in expenditures and transfers-out of $65,044, for a net increase in revenues of $419,696.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Faith Madrazo, Financial Services Manager
Concurrence: Chris Emeterio, Assistant City Manager/Acting Administrative Services Director

Attachments
Resolution - City
Exhibit A - City