|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. 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.
The COVID-19 Pandemic has affected many areas of the economy including travel and tourism. With travel restrictions put in place for tourism, as well business travel, Brea has seen these effects in its Transient Occupancy Tax (TOT) receipts. As a result, it is estimated that receipts will come in $189,088 less than originally budgeted. In addition, Traffic ($30,000) and Fine ($100,000) Revenues are anticipated to be $130,000 less than budgeted. Due to the pandemic, the courts have been closed and fines have been reduced. Furthermore, the Police Department has limited their enforcement of overnight parking violations.
On May 6, 2019, the City received a claim from Shenkman & Hughes, P.C. ("Shenkman Firm") alleging that the City's at-large election system violates the California Voting Rights Act (CVRA). On June 20, 2019, Brea City Council approved Resolution 2019-049, declaring its intent to transition from at-large elections to district-based elections after the results of the 2020 Census are received. Therefore, a budget adjustment of $125,000 is being requested in order to transition from at-large elections to district elections. This cost includes a professional services agreement with a consultant that will be required for Electoral Districting Services. These services must follow the mandated legal requirements outlined by the CVRA and the Federal Voting Rights Act. Such services include establishing public outreach and communications; mapping electoral districts; analyzing statistical and Census data and demographics; and assisting the City in preparing its draft, recommended, and final districting plans for establishing electoral districts.
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 Blue Ridge Fire in Orange County, the Silverado Fire in Orange County, the North Complex Fire in Plumas National Forest, and the Bond Fire in Orange County.
The Narcotic Asset Seizure Fund (231) accounts for assets seized by the Police Department. Distributions from these seizures are primarily at the federal level. These distributions are hard to predict because they are often dependent on case closures. Fortunately, Brea has received $124,550 this year, more than what was budgeted, and staff is requesting a budget adjustment for this. A portion of this money will aid in the purchase of a comprehensive in-car and body-worn camera system. The balance will fund other Police Department decision packages.
The Street Sweeping Division within Public Works is in need of a street sweeping vehicle. This current vehicle has been in operation for ten years, which is well beyond the average 7-year replacement time frame. Staff is proposing to use Air Quality Improvement Fees ($383,000) to purchase the replacement vehicle. As a Compressed Natural Gas (CNG) vehicle, this qualifies as an eligible item for funding.
The Urban Runoff Fund (410) contains two budget adjustment related to The Tracks at Brea. At Segment 2, concrete gutters ($60,000) will be installed to aid in water runoff into the storms drains. These will replace dirt vee ditches which have eroded over the years and will eliminate dirt from running downstream into the storm drain. At Segment 3, $130,600 is being requested for CIP#7952 to install additional storm drains, inlets, minor grading and back filling the existing drainage.
The Water Utility Fund (420) also contains two budget adjustments . The first adjustment is $154,230, which relates to a settlement agreed with Imperial Golf LLC with regard to water billings at Birch Hill Golf Course. The second adjustment is to reduce funding for various water improvement projects (CIP #7442). These project have been completed and funding is no longer needed.
Lastly, a transfer is being requested from the Disaster Recover Fund (911) to CIP#7955. This adjustment of $100,206 is to pay for glass shields that were installed at workstations to provide further protection and social distancing for employees.
The total impact to the General Fund for these budget adjustments is anticipated to be covered from the use of excess reserves. In Fiscal Year 2018-19, the General Fund realized a surplus of $6,034,578. This number was in excess of the required reserves of 25% of operating expenditures Under City Council direction, in FY 2019-20, staff used $2,379,527 to pay off early the energy efficiency loan. It was initially anticipated $1,560,050 of this excess reserve would be used to balance the FY 2020-21 budget. These budget adjustments combined with the 1st and 2nd quarter adjustments, bring the revised number to $3,280,537. The remaining excess reserve balance at June 30, 2021 is projected to be $374,514. This number includes the needed adjustments to maintain a General Fund reserve of 25% of operating expenditures. These numbers do not include any potential revenues received from the American Rescue Act.
The Capital Improvement Program Budget Adjustments in CIP - Exhibit A consists of a decrease in expenditures and a corresponding adjustment to revenues and transfers-in as follows:
|Fixed Asset Replacement Program Fund (182)
|Gas Tax Fund (220)
|Urban Runoff Fund (410)
|Water Utility Fund (420)
|Golf Course Fund (465)
|Disaster Recovery Fund (911)
|State Grants - Other
|The City Operating Budget adjustments for the General Fund (110) in Exhibit A resulted in a decrease in revenues of $74,788 and an increase in expenditures of $412,013, for a net General Fund increase in expenditures of $486,801. The City Operating Budget adjustments, for all funds including the General Fund, resulted in increased revenues of $73,905 and an increase in expenditures of $851,343 for a net increase in expenditures of $777,438.