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Current Council Agenda and Past Meeting Information

 

CITY COUNCIL AGENDA ITEM NO. 16

Meeting Date: June 8, 2004

Subject/Title: Approve a resolution amending the adopted 2003/04-2004/05 Budget and approving the recommended budget adjustments

Submitted by: Denise Davies, Finance Operations Manager

Approved by: Pam Ehler, Director of Finance and Information Systems

RECOMMENDATION
Approve a resolution amending the adopted 2003/04-2004/05 Budget and approving the recommended budget adjustments.

PREVIOUS ACTION
On June 10, 2003, the City Council approved resolution number 2893 adopting the 2003/04-2004/05 Final Budget for the City of Brentwood.

On January 13, 2004, the City Council approved resolution number 2004-12 amending the 2003/04 Budget for the City of Brentwood.

BACKGROUND
Throughout the year, unanticipated expenditures are incurred by required professional services, purchasing facilities, creation of programs or commissions, or simply expenditures that were not anticipated during the budget process. These funding requests, while less than typical historical levels, have been made for costs that were not originally anticipated for fiscal year 2004/05.

We have a balanced budget. This means that adequate resources are available to fund the approved and requested appropriations while assuring that operating revenues fully cover operating expenditures, and that fund balances are maintained at minimum policy levels (30% of operating expenditures).

As the State of California continues to struggle with the adoption of a budget that shows an unprecedented shortfall, it is clear that local governments will be significantly impacted. The City keeps a watchful eye on Sacramento and is active in communicating with legislators regarding the City’s position on legislation affecting the City and its residents. When preparing the 2003/04 – 2004/05 Operating Budget, the City took into account projected State takeaways which included a reduction of $500,000 in revenues for fiscal year 2004/05. While we monitor State legislation, this reduction is still anticipated and therefore continues to be incorporated in the budget.

As we move forward during this next fiscal year, we will learn more about key revenue trends and how the State’s budget-balancing actions will affect us. The uncertainty regarding the State budget is going to be with us well beyond budget adoption. Effectively planning for these uncertainties has resulted in the financial strength and flexibility needed in effectively managing our long-term fiscal outlook. Six months after the beginning of each fiscal year, a formal review of the City’s fiscal condition is completed and appropriations are amended at that time, if necessary.

Included in these adjustments are personnel requests that will maintain Brentwood staffing levels at the current level of 6.5 employees per 1,000 residents.

GENERAL FUND

The General Fund fund balance will increase by $379,912. It is projected that the Fund Balance of the General Fund will be $ 14.5 million on June 30, 2005.

General Fund revenue projections are based on continued improvements in our local economy. We assume no further State budget cuts, since Brentwood already prepared for those cuts in the adopted 2004/05 budget process.

An increase of $1,488,465 to revenues is due mainly from increased property tax from commercial development, Engineering, and Building fees.

Brentwood continues to improve the City’s public safety services through the incentive programs for Public Safety and compliance to the authorized number of officers per capita, a contribution for a Fire Department/EMT service, and a transfer to the Parks and Recreation program that leads to the quality of living for which Brentwood is known. Educational support to the Library, cost of living adjustments, and rising insurance costs have been adjusted. Additional community support this year includes Delta Community Service.

General Fund major adjustments include:
 Police staffing levels in compliance with authorized number per capita
 Insurance increases
 Increase of $110,000 for Fire/EMT contribution
 Street utility trailer, vehicle, and concrete saw
 Increased utility rates
 Maintenance of the future Police Station site (US Print)
 Janitorial supplies and services for 120 Oak

For FY 2004/05, total appropriations will not exceed $39,164,875.

CAPITAL IMPROVEMENT PROGRAM
Although adjustments are being requested, there will be no change to the projected Fund Balance.

For FY 2004/05, total revenues are projected to be $3,933,405 and total appropriations will not exceed $3,933,405.

CITY RENTALS ENTERPRISE
Retained Earnings for June 30, 2005 is projected to be $2.8 million for the City Rental Enterprise – otherwise known as our Technology Center. This Enterprise holds a lot of promise as it paves the way for businesses to utilize an executive suite-type of offices that is essential for our growing City. Likewise, the presence of a collegiate educational resource lends to the drawing power of young and mature adults to the City, which can garner not only future residents but also a draw for the local businesses. This adjustment includes a one time $80,000 General Fund subsidy for capital improvements to the building. For FY 2004/05, total revenues are projected to be $850,800 and total appropriations will not exceed $848,565.

PARKS & RECREATION ENTERPRISE
The ever popular Parks and Recreation Enterprise continue to expand their capability to offer programs that are sought after by the community. Fund balance for this enterprise is projected to be $21.1 million for June 30, 2005. Included in these adjustments were the Snow Park Event and the newly adopted Art in Public Places Fee Program. For FY 2004/05, total revenues are projected to be $4,092,255 and total appropriations will not exceed $4,065,107.

SOLID WASTE ENTERPRISE

The Solid Waste Enterprise is projected to have a fund balance of $1.5 million by June 30, 2005. In order to serve the needs of this rapidly growing City more efficiently, funds are budgeted for improvements to the 10 year old Transfer Station. To the benefit of the residents, the current transfer station has kept pace with the increasing number of households without rate increases.

For FY 2004/05, total revenues are projected to be $5,855,744 and total appropriations will not exceed $5,712,019.

WATER ENTERPRISE

The Water Enterprise fund balance is projected to be $43.8 million for June 30, 2005. The main adjustments for this Enterprise are increased revenue projections. For FY 2004/05, total revenues are projected to be $10,021,708 and total appropriations will not exceed $9,136,939.

WASTEWATER ENTERPRISE

Fund balance for June 30, 2005 is projected to be $38.5 million. The budget adjustment includes rolling over of the $245,000 fine that is still in litigation. For FY 2004/05, total revenues are projected to be $4,898,509 and total appropriations will not exceed $4,883,814.

INTERNAL SERVICES (REPLACEMENT PROGRAMS)

Collectively, the Internal Service Funds are projected to have a fund balance of $12.7 million as of June 30, 2005. All Internal Service Funds have been 100% funded which ensures that scheduled replacement needs can be met. Included in these adjustments is $35,000 for a fuel station at the corporation yard. For FY 2004/05, total revenues are projected to be $4,878,781 and total appropriations will not exceed $4,496,485.

Expenditure rates reflected in this budget continue to be below average for California cities of similar size. The City’s strong fund balance levels, growing revenues, reserves and prudent fiscal management position us for future challenges.

This budget underscores the City Council’s commitment to continue to make cost containment a high priority. In accordance with the Budget Development Guidelines, the Operating Budget is free from reliance upon non-recurring revenue sources and does not commit to spending more than a conservatively prepared estimate of recurring revenues.

The Operating Budget will continue to be reviewed quarterly, or sooner if necessary, to allow the City Council to respond to changes in the economy or development community in a timely manner.

The City continues to benefit from prudent financial management. The budget appears to be fairly well positioned, as actual figures are expected to achieve or improve upon budgeted figures.

FISCAL IMPACT
As always, staff has intentionally overestimated expenditures and intentionally underestimated revenues to maintain a conservative budget and fiscal policy.

Attachments: Resolution

RESOLUTION NO. __________________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD AMENDING THE 2004/05 BUDGET AND RECOMMENDED BUDGET ADJUSTMENTS

WHEREAS, on June 10, 2003, the City Council approved resolution number 2893 adopting the 2003/04-2004/05 Final Budget for the City of Brentwood; and

WHEREAS, on January 13, 2004, the City Council approved resolution number 2004-12 amending the 2003/04 Budget for the City of Brentwood; and

WHEREAS, adequate resources are available to fund the approved and requested appropriations while assuring that operating revenues fully cover operating expenditures and that fund balances are maintained at minimum policy levels (30% of operating expenditures); and

WHEREAS, after adjustments the General Fund balance will increase by $379,912. It is projected that the General Fund will be at $14.5 million on June 30, 2005. For FY 2004/05, total appropriations will not exceed $39,164,875; and

WHEREAS, an increase of $1,488,465 to revenues is due mainly from increased property tax from commercial development, Engineering and Building Fees; and

WHEREAS, there will be no change to the projected fund balance for the Capital Improvement Program. For FY 2004/05, total revenues are projected to be $3,933,405 and total appropriations will not exceed $3,933,405; and

WHEREAS, retained earnings for June 30, 2005 is projected to be $2.8 million for the City Rental Enterprise. The only adjustment is a one time $80,000 General Fund subsidy for capital improvements to the Technology Center building. For FY 2004/05, total revenues are projected to be $850,800 and total appropriations will not exceed $848,565; and

WHEREAS, retained earnings for the Parks and Recreation Enterprise are projected to be $21.1 million. For FY 2004/05, total revenues are projected to be $4,092,255 and total appropriations will not exceed $4,065,107; and

WHEREAS, the Solid Waste Enterprise is projected to have a fund balance of $1.5 million by June 30, 2005. For FY 2004/05, total revenues are projected to be $5,855,744 and total appropriations will not exceed $5,712,019; and

WHEREAS, the Water Enterprise is projected to have a fund balance of $43.8 million for June 30, 2005. The main adjustments for this Enterprise are increased revenue projections. For FY 2004/05, total revenues are projected to be $10,021,708 and total appropriations will not exceed $9,136,939; and

WHEREAS, fund balance for Wastewater Enterprise is projected to be $38.5 million for June 30, 2005. The budget adjustment includes rolling over of the $245,000 fine that is still in litigation. For FY 2004/05, total revenues are projected to be $4,898,509 and total appropriations will not exceed $4,883,814; and

WHEREAS, collectively, the Internal Services funds are projected to have a fund balance of $12.7 million as of June 30, 2005. For FY 2004/05, total revenues are projected to be $4,878,781 and total appropriations will not exceed $4,496,485; and

WHEREAS, the City Council has reviewed these adjustments to the 2004/05 Budget.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood hereby adopts the appropriations and revenue adjustments to the 2004/05 Budget for the City of Brentwood.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the June 8, 2004 by the following vote:

AYES:
NOES:
ABSENT:

Brian Swisher
Mayor

ATTEST:


Karen Diaz, CMC
City Clerk

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