For City Council Meeting [August 11, 2020]
TO: Honorable City Council
APPROVAL: Rod Foster, City Manager
FROM: Stephen Erlandson, Deputy City Manager
Title
Request City Council to:
1. Conduct a Public Hearing on the City’s 2020-21 Proposed Budget.
2. Adopt a Resolution to approve and adopt including:
a. Resolution No. 7663, RHA Resolution No. 002-20, and RUA Resolution No. 09-20 for the City’s 2020-21 Proposed Budget;
b. Resolution No. 7664 Establishing the City’s 2020-21 Appropriations Limit (Gann Limit);
3. Adopt Resolution No. 7665 Updating the Citywide Classification and Compensation Table;
4. Approve a Professional Services Agreement with Bureau Veritas on an as needed basis in the amount of $150,000.00; or
5. If the Council Continues the FY 2020-21 Proposed Budget, Adopt Resolution No. 7666, RHA Resolution No. 003-20, and RUA Resolution No. 10-20 to Continue the Budget and Contracts from Fiscal Year 2019-2020 through September 30, 2020.
(ACTION)
Body
BACKGROUND:
In accordance with Section 2.04.140 of the Rialto Municipal Code, the City Manager must present the fiscal budget to the City Council for approval annually. Under the direction of the Deputy City Manager, staff conducted the analysis and made the projections required to complete the budget document after receiving input from all of the City departments. Due to the COVID-19 pandemic, the completion of the budget process was delayed, and on June 23, 2020, the City Council adopted Resolution No. 7635, RHA Resolution No. 001-20 and RUA Resolution No. 07-20 continuing the Budget and Contracts from Fiscal Year 2019-20 through August 31, 2020.
ANALYSIS/DISCUSSION:
The 2020-21 Proposed Budget includes appropriations of $225.5 million which represents a decrease of $1.0 million (net of prior year budget carryovers on capital projects). The Proposed Budget, as presented, is “balanced in, balanced better” reflecting a surplus of approximately $3.8 million. The surplus is intended to absorb any unforeseen financial impacts resulting from the continuing COVID-19 pandemic.
Total requirements of $225.5 million for the 2020-21 Proposed Budget, shows a net decrease of $80.2 million as compared to the 2019-20 Revised Budget. This is primarily due to the treatment of prior year budget carryovers on capital projects. In the prior fiscal year, carryovers of approximately $95.0 million were included as part of the projected budget. However, in fiscal year 2020-21 they are reported separately, so current year revenues are matched against current year appropriations.
The 2020-21 Projected Budget either maintains or enhances all current programs and service levels and provides for a significant annual investment in the maintenance of the City’s streets and sidewalks.
General Fund
The General Fund is the general operating fund of the City and the 2020-21 Proposed General Fund budget of $100.3 million funds 395 full-time equivalent positions in 11 departments.
The Proposed Budget for 2020-21 reflects a decrease of $1.5 million as compared to the 2019-20 Revised Budget. General Fund expenditures include operations traditionally associated with activities that are not required to be accounted for or paid by another fund.
The 2020-21 Proposed General Fund Budget includes $105.0 million in revenue which reflects a $0.3 million decrease from the 2019-20 Revised Budget. All general tax receipts and fee revenue not allocated by law, Council policy, or contractual agreement to other funds, are accounted for in the General Fund.
Special Revenue Funds
The City’s various Special Revenue Funds include grant program funds and other funds that by law are required to be segregated from other funds. The 2020-21 Proposed
Special Revenue Fund Budget includes budgets for 31 different funds in the aggregate amount of $34.7 million which reflects a decrease of $68.5 million as compared to the 2019-20 Revised Budget. This net decrease is primarily due to a decrease in several fund project expenditures, including Measure I, Gas Tax, Drainage Development, Major Grant, Waste Management, Fire Development and Park Development which are offset by an increase in project expenditures in the Traffic Development and Community Services Grant funds.
Enterprise Funds
The City has four Enterprise funds including Cemetery, Cemetery-Endowment, Airport, and Utility Billing funds. The total enterprise fund 2020-21 Proposed Budgets of $2.5 million reflect an increase of $1.0 million. This increase is primarily due to an increase in Utility Services as a result of anticipated development agreement reimbursement payments.
Internal Service Funds
The City has five internal service funds including Fleet Maintenance, Workers’ Compensation, General Liability, Information Technology, and Building Maintenance. The purpose of internal service funds is to centralize certain services that benefit all functions of the City. The expenditures of the internal service funds are allocated to all of the City’s departments commensurate to the services provided. The total internal service fund 2020-21 Proposed Budgets of $14.5 million reflect an increase of $2.5 million primarily due to increases in Information Technology to rebuild the City’s Information Technology infrastructure and Building Maintenance.
Rialto Utility Authority
The Rialto Utility Authority (RUA) accounts for Water and Wastewater Services provided by Rialto Water Services. The 2020-21 Proposed RUA Budget is $46.4 million.
The Rialto Housing Authority
The Rialto Housing Authority (RHA) assumed the housing functions of the former Redevelopment Agency. The 2020-21 Proposed RHA Budget of $137,000 reflects a decrease of $23,000.
Capital Projects Funds
The Capital Projects Funds exist to enhance transparency by reporting one-time capital expenditures in a separate fund. The 2020-21 Proposed Capital Project Budget of $14.0 million in new funding, in addition to $24 million in previous appropriations provides for a significant investment in the City’s street and sidewalk system as well as other capital items.
Personnel
The 2020-21 Projected Budget (All Funds) includes total personnel expense of $76 million and funds a total of 396 full-time equivalent positions, which is an increase of 19 positions as compared to the 2019-20 Revised Budget. This increase in the General Fund is primarily due to an increase of 11 positions in the Police Department to meet the public safety needs of the City; 1 position in the Fire Department (Battalion Chief); 3 positions in the Community Development Department; and 4 positions in the Public Works Department.
The increase in the requested positions also results in offsetting contract costs and revenues that have been included in the 2020-21 Projected Budget of approximately $2.2 million.
In addition, a recent vacancy in the Building Division necessitates the need to contract for a Certified Building Official. The Community Development Department requested proposals from four (4) qualified firms. Four proposals were received, and it was determined that the firm Bureau Veritas best fits the needs of the City. Bureau Veritas can provide Certified Building Official staff that are also licensed engineers. The Bureau Veritas staff interviewed also had demonstrated local experience in the Inland Empire. The Certified Building Official will assist with guiding staff to more efficient methods of operation, assist with improving the processes and procedures, attend meetings, conduct inspections, and perform plan check.
The proposed agreement is for a one-year term. City staff and Bureau Veritas will ensure that the individual filling the position of contract Chief Building Official is rotated no later than six-months into the agreement.
ENVIRONMENTAL IMPACT:
The action is exempt from California Environmental Quality Act (CEQA) pursuant to Section 15378(b) (5) of the CEQA Guidelines because the preparation of a budget plan is a governmental administrative activity that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY:
Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
Goal 3-6: Require that all developed areas within Rialto are adequately served with essential public services and infrastructure.
Policy 3-6.1: Coordinate all development proposals with other affected public entities to ensure the provision of adequate public facilities and infrastructure services.
Policy 3-6.1: Coordinate all development proposals with other affected public entities to ensure the provision of adequate public facilities and infrastructure services
Policy 3-6.3: Require an increasing level of public safety infrastructure and service capability tied to population increase and increasing service demand.
Policy 3-6.4: Complete infrastructure master plans for sewer, water, and drainage.
Policy 5-3.7: Add service level capability and infrastructure to meet increasing demand of new development.
LEGAL REVIEW:
The City Attorney has reviewed and approved this staff report.
FINANCIAL IMPACT:
Operating Budget Impact
The 2020-21 Budget, as presented in the Proposed Budget Book, includes appropriations for the City’s General Fund, special revenue funds, capital project funds, internal service funds, and enterprise funds, which total approximately $225.5 million and fund 395 full-time budgeted staff.
Furthermore, funding in the amount of $150,000 is available in the Community Development Contract Services Account No. 010-500-4261-2011 for a Professional Service Agreement with Bureau Veritas.
Capital Improvement Budget Impact
Appropriations for 2020-21 for the City’s capital improvement budget total approximately $14.0 million in new funding and includes various funding for capital items.
RECOMMENDATION:
1. Conduct a public hearing on the City’s 2020-21 Proposed Budget.
2. Adopt a Resolution to approve and adopt including:
a. Resolution No. 7663, Rialto Housing Authority Resolution No. 002-20, and Rialto Utilities Authority Resolution No. 09-20 for the City’s 2019-20 Proposed Budget and authorization for adjustments for final fund balance;
b. Resolution No. 7664 establishing the City’s 2019-20 appropriations limit;
3. Adopt Resolution No. 7665 updating the Citywide Classification and Compensation Table;
4. Approve a Professional Services Agreement with Bureau Veritas on an as needed basis in the amount of $150,000.00; or
5. If the Council tables the FY 2020-21 Proposed Budget, adopt Resolution No. 7666, RHA Resolution No. 003-20, and RUA Resolution No.10-20 to continue the budget and contracts from Fiscal Year 2019-2020 through September 30, 2020.