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Current Council Agenda and Past Meeting Information

 

CITY COUNCIL AGENDA ITEM NO. 13

Meeting Date: January 11, 2005

Subject/Title: Approve a resolution amending the 2004/05 Operating Budget and approving the recommended mid-year 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 2004/05 Operating Budget and approving the recommended mid-year budget adjustments.

PREVIOUS ACTION
On June 10, 2003 the City Council approved Resolution No. 2893 adopting the 2003/04-2004/05 Final Budget for the City of Brentwood.

On January 13, 2004, the City Council approved Resolution No. 2001-12 amending the 2003/04 Budget for the City of Brentwood.

On June 8, 2004, the City Council approved Resolution No. 2004-132 amending the 2004/05 Budget and recommended budget adjustments.

BACKGROUND
Throughout the year, additional expenditures not previously budgeted are incurred by required professional services, purchasing facilities, new programs or commissions, or simply were not anticipated during the budget process. These additional funding requests have been made for costs that were not originally anticipated for fiscal year 2004/05.

Mid-year budget adjustments are essential, specifically for this purpose. It should be noted, however, that after reviewing the past ten years of funding requests, the number of requests in the 2004/05 mid-year budget review are far fewer than in previous years. A streamlined budgeting process and clear vision of staff can be credited for this reduction.

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 (reserves) are maintained at minimum policy levels (30% of operating expenditures). Two funds, Arts Commission and Water Enterprise, are recommended for funding through reserves (retained earnings).

One of the State Legislator’s budget-balancing actions was to require California Cities to contribute a state-wide amount of $350,000,000 to be paid to the State in two installments annually. This shift, ERAF III (Educational Revenue Augmentation Fund), will be administered in fiscal years 2004/05 and 2005/06 only. Unlike ERAF I and II, each city’s share is a fixed amount for both fiscal years. The impact to the City of Brentwood is $318,732 each fiscal year and the amount for fiscal year 2004/05 has been included as a part of the mid-year budget adjustments.

Included in these adjustments are retiree medical and unused leave costs. On June 22, 2004, the City Council adopted a resolution establishing a health benefit vesting requirement for future retirees. This action will help control future retiree medical costs and is projected to save a total of $31,000,000 over the next 46 years, and exceed $100,000,000 over the next 96 years.

GENERAL FUND

A total of $550,396 in adjustments is requested for the General Fund, which will result in an increase of $34,975 to the fund balance (reserves). It is projected the fund balance of the General Fund will be $15,385,289 million on June 30, 2005.

General Fund revenue projections are based on a conservative evolution in our local economy and assume no further State budget cuts.

Revenues
$904,103 - Additional revenues are due to projected increases in Property Tax, Taxes and Fines, and Building and Planning Fees.

($318,732) - A reduction in revenues for State contribution for ERAF III.

Expenditures
$201,556 - Transfer to Parks (City Wide Park, Arts and Village Drive Personnel).
$ 30,880 - Retiree Medical and unused leave costs.

City Manager - $46,250 – Costs associated with the City Manager recruitment and agreement.

Human Resources - $40,400 – Consultant services and service awards luncheon.

Non-Departmental - $20,000 – LAFCO apportionment costs, investment advisory and property tax services.

Streets - $31,310 - Additional fuel costs and increased street signage and striping.

Building - $68,000 - Increase current Code Enforcement position from 60% to full time and consultant inspector costs.

Engineering - $12,000 – Consultant costs for fee study.

Transportation - $100,000 – Traffic engineering consultants

CAPITAL IMPROVEMENT PROGRAM
Adjustments are being requested in the amount of $105,260 for utilities, temporary help, the water conservation program and master plan costs. However, there will be an offsetting increase in the transfer from development services, which will therefore result in no change to the projected Fund Balance.

HOUSING ENTERPRISE
Retained Earnings for June 30, 2005 is projected to be $850,801 for the Housing Enterprise. Requests include consultant costs for work on the Housing Ordinance amendment as well as the reallocation of a portion of staff from the Redevelopment Agency to the Housing Enterprise. For FY 2004/05, total revenues are projected to be $1,013,581 and total appropriations will not exceed $697,287.

ARTS COMMISSION

The Arts Commission is requesting additional appropriations totaling $118,431 for a hanging system for art, services for programs and Arts Manager costs. A transfer in the amount of $77,156 is being requested from the General Fund to offset revenue not received from public arts administration. For FY 2004/05, total revenues are projected to be $256,756 and total appropriations will not exceed $372,865. Retained earnings will be zero when $116,109 of the additional appropriations is funded through the reserves.

PARKS & RECREATION ENTERPRISE

The 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 $21.6 million for June 30, 2005. Included in the adjustment of $143,400 are Village Resource personnel, part-time staff for Sunset Park, software and equipment. Additional property tax and program revenues as well as a transfer from the General Fund in the amount of $109,400 will offset the additional costs. For FY 2004/05, total revenues are projected to be $3,978,899 and total appropriations will not exceed $3,954,073.

SOLID WASTE ENTERPRISE

The Solid Waste Enterprise is projected to have a fund balance of $1.6 million by June 30, 2005. Additional appropriations are being requested for costs associated with new utility billing software. User fee revenues are expected to be $75,000 higher than projected. For FY 2004/05, total revenues are projected to be $5,930,744 and total appropriations will not exceed $5,771,220.

WATER ENTERPRISE

The Water Enterprise fund balance is projected to be $55.3 million for June 30, 2005. The main adjustments for this Enterprise is for purchased water, meter reading/testing equipment and costs associated with new utility billing software. User fee revenues are expected to be higher than projected by $246,595. For FY 2004/05, total revenues are projected to be $10,268,303 and total appropriations will not exceed $10,483,880. Sufficient funds are available to use fund reserves in the amount of $215,577.

WASTEWATER ENTERPRISE

Fund balance for June 30, 2005 is projected to be $53.2 million. The budget adjustment includes costs for electricity, fee study and the new utility billing software. For FY 2004/05, total revenues are projected to be $5,018,064 and total appropriations will not exceed $4,988,566.

INTERNAL SERVICES (REPLACEMENT PROGRAMS)

Collectively, the Internal Service Funds are projected to have a fund balance of $12.3 million as of June 30, 2005. All Internal Service Funds have been 100% funded which ensures that scheduled replacement needs can be met. The Replacement programs assure that we have sufficient funds on hand for the replacement of such things as police cars, trash trucks, computers, and other miscellaneous equipment on a regular schedule.

The additional appropriation requests for the Internal Service Funds total $676,866. Of this amount, $599,771 is increased appropriations for depreciation expense across two internal service funds due to a reallocation of assets. Depreciation expense is a non-cash appropriation which will be offset by the use of fund balance within each Internal Service Fund.

Information Services – The new police station will include a new city data center, computer room, emergency operations center, security room, future dispatch and public access cable TV station. A technician must be present for video streaming of Council and Planning Commission meetings. Although City-wide staffing levels have increased by 20% there has been no additional Information Services staffing added since February 2003. Therefore, a request is being made for an Information Systems Technician.

Vehicle/Equipment Replacement – A request is being made to replace a vehicle that was not replaced in FY 2003/04.

Information System Replacement – The budget adjustment includes funding for new phone system software which will route calls for faster customer service response.

Parks Replacement – The budget adjustments include additional revenues from the Lighting and Landscape Districts and an increase in appropriations for replacement of items such as trees and plants.

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’s strong fund balance levels, growing revenues, reserves and prudent fiscal management position us for future challenges. The budget appears to be
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 TO APPROVE AMENDING THE 2004/05 OPERATING BUDGET AND APPROVING THE RECOMMENDED MID-YEAR BUDGET ADJUSTMENTS

WHEREAS, on June 10, 2003 the City Council approved Resolution No. 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 No. 2001-12 amending the 2003/04 Budget for the City of Brentwood; and

WHEREAS, on June 8, 2004, the City Council approved Resolution No. 2004-132 amending the 2004/05 Budget and recommended budget adjustments; and

WHEREAS, a total of $550,396 in adjustments is requested for the General Fund, which will result in an increase of $34,975 to the fund balance. It is projected the fund balance of the General Fund will be $15,385,289 million on June 30, 2005; and

WHEREAS, adjustments are being requested for the Capital Improvement Program in the amount of $105,260 for utilities, temporary help, the water conservation program and master plan costs. However, there will be an offsetting increase in the transfer from development services, which will therefore result in no change to the projected Fund Balance; and

WHEREAS, retained earnings for June 30, 2005 is projected to be $850,801 for the Housing Enterprise. Requests include consultant costs for work on the Housing Ordinance amendment as well as the reallocation of a portion of staff from the Redevelopment Agency to the Housing Enterprise. For FY 2004/05, total revenues are projected to be $1,013,581 and total appropriations will not exceed $697,287; and

WHEREAS, the Arts Commission is requesting additional appropriations totaling $118,431 for a hanging system for art, services for programs and Arts Manager costs. A transfer in the amount of $77,156 is being requested from the General Fund to offset revenue not received from public arts administration. For FY 2004/05, total revenues are projected to be $256,756 and total appropriations will not exceed $372,865. Retained earnings will be zero when $116,109 of the additional appropriations is funded through the reserves; and

WHEREAS, the 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 $21.6 million for June 30, 2005. Included in the adjustment of $143,400 are Village Resource personnel, part-time staff for Sunset Park, software and equipment. Additional property tax and program revenues as well as a transfer from the General Fund in the amount of $109,400 will offset the additional costs. For FY 2004/05, total revenues are projected to be $3,978,899 and total appropriations will not exceed $3,954,073; and

WHEREAS, the Solid Waste Enterprise is projected to have a fund balance of $1.6 million by June 30, 2005. Additional appropriations are being requested for costs associated with new utility billing software. User fee revenues are expected to be $75,000 higher than projected. For FY 2004/05, total revenues are projected to be $5,930,744 and total appropriations will not exceed $5,771,220; and

WHEREAS, the Water Enterprise fund balance is projected to be $55.3 million for June 30, 2005. The main adjustments for this Enterprise is for purchased water, meter reading/testing equipment and costs associated with new utility billing software. User fee revenues are expected to be higher than projected by $246,595. For FY 2004/05, total revenues are projected to be $10,268,303 and total appropriations will not exceed $10,483,880. Sufficient funds are available to use fund reserves in the amount of $215,577; and

WHEREAS, fund balance for the Wastewater Enterprise for June 30, 2005 is projected to be $53.2 million. The budget adjustment includes costs for electricity, fee study and the new utility billing software. For FY 2004/05, total revenues are projected to be $5,018,064 and total appropriations will not exceed $4,988,566; and

WHEREAS, the additional appropriation requests for the Internal Service Funds total $676,866. Of this amount, $599,771 is increased appropriations for depreciation expense across two internal service funds due to a recalculation adjustment. Depreciation expense is a non-cash appropriation which will be offset by the use of fund balance within each Internal Service Fund.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood approves amending the 2004/05 Operating Budget and approved the recommended mid-year budget adjustments.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 11th day of January 2005 by the following vote:

City Administration
City of Brentwood City Council
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Brentwood, CA 94513
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E-mail allcouncil@brentwoodca.gov