BACKGROUND
Staff recommends City Council authorize the City Manager to transfer up to $4 million from the General Fund Stabilization Reserve Fund to the General Fund to address a potential year-end budget deficit due to revenues shortfalls resulting from the COVID-19 pandemic. Despite attempts to control expenditures, the City projects a potential year-end budget deficit between $2 million and $9 million. Staff will return to Council for additional authority if the year-end budget deficit is greater than $4 million.
In addition, staff is recommending the following administrative and year-end budget adjustments to the FY2019-20 Budget:
1) Civic Center Boilers – This budget adjustment is recommended to increase the Civic Center Boiler Replacement (500089) project budget from $59,000 to $94,000 due to higher than anticipated costs of the project. The additional $35,000 will come from available fund balance in the Facilities Rehabilitation Fund.
2) Blue Oaks Boulevard Fee Fund – This budget adjustment is recommended to reduce operating revenues, operating expenditures and project expenditures to align the budget with anticipated FY2019-20 actual activity. This adjustment will result in an increase in available resources in the Blue Oaks Boulevard Fee Fund of approximately $2.6 million.
3) Electric New Services – Electric's New Services project accounts for the install of electric services to new customers and development. These costs are reimbursed through the Contribution in Aid of Construction (CIAC) revenues, where the developer is charged for the electric services provided. New development has been stronger than anticipated in the FY2019-20 budget and the New Services project budget is expected to be exceeded. City Council recently approved a budget adjustment to increase expenses and revenues in this project but the initial estimate was understated. Increased CIAC revenues will offset these increased expenses.
4) Citizens Benefit Trust Fund – This budget adjustment is recommended to increase the budget for small business loans, family meal plan and homeless prevention & rapid rehousing grants approved by City Council to help the community during the COVID-19 pandemic, totaling $1,464,840. There are adequate resources available in the Citizens Benefit Trust Fund for this adjustment.
5) Annexation Payments – This adjustment is recommended to increase the budget for the tax sharing agreements with Placer County by $420,000 from $6,680,000 to $7,100,000. Annexation payments are determined based on the taxes collected from the tax rate areas that have tax sharing agreements in place. Property taxes from tax rate areas were higher than expected which resulted in larger annexation payments to the County. The increase is proposed to be funded by higher than anticipated secured property tax revenues.
6) Police Evidence Fund – A budget adjustment is recommended to increase the expenditure budget in this fund by $25,000 for higher than anticipated expenditures. There are adequate funds available in the Police Evidence Fund for these expenditures.
7) Advantage Roseville – This budget adjustment is recommended to increase the Advantage Roseville budget by $27,000 due to higher than anticipated expenditures. This increase is offset by a corresponding increase in revenue.
8) Pleasant Grove Drainage Basin Project (400097) – This budget adjustment corrects project budget carried over from prior years and transfers $1,427,324 in funding from the Highway Users Tax Fund (2305) to the Pleasant Grove Drainage Basin Fund (3385) to correct for expenditures posted to the incorrect fund.
9) Johnson Ranch Zones A and C – This budget adjustment is recommended to correct transfers between Jonson Ranch zones A and C and Open Space for contract maintenance posted under ordinance No. 6166.
10) Project Carryover – This budget adjustment is recommended to reallocate funding sources and adjust budgets in various projects carried over from FY2018-19 to FY2019-20 to implement the conversion to the City's new financial system. This reallocation is the result of converting projects to a multi-funded project model in the new ERP system, from a single-funded project model that required transfers from other funds.
11) Workers’ Compensation Fund – During FY2019-20, the City has incurred a higher than anticipated amount of claims expense in the Workers Compensation Fund. A budget adjustment of $160,000 is recommended to reflect this increase in spending. There are adequate resources available in the Workers' Compensation Fund for this increase.
12) Sierra Vista Specific Plan Fund – This Budget Adjustment is recommended to increase revenues by $710,000 and expenditures by $760,000 to align the budget with anticipated FY2019-20 actual activity. There are adequate resources available in the SVSP Fee Program - Park Land Fund for the $50,000 difference between expenditures and revenues.
13) Roseville Automall Fund – This budget adjustment is recommended to correct a transfer posted to the Roseville Automall CFD 1 (3011). Original budget adjustment approved by ordinance No. 6120. This adjustment will result in an increase in available resources in the Roseville Automall CFD 1 (3011) of $76,328.
14) General Liability Fund – This budget adjustment is recommended to increase the expenditure budget in the General Liability Fund by $200,000 due to higher than anticipated insurance premium costs. There are adequate resources in the General Liability Fund (4231) to cover this expenditure increase.
15) Environmental Utilities Technical Services – The Environmental Utilities Technical Services Fund was closed at the end of FY2018-19. This transfer of $1.2 million from the Wastewater and Solid Waste Operations funds to the Water Operations Fund is necessary to reconcile the fund for closure.
16) Community Facilities Districts – This adjustment is recommended to increase expenditure budgets in the Westpark CFD 1 (3012), Fiddyment Ranch CFD 5 (3014), and Villages at Sierra Vista CFD 1 (3015) for development reimbursements. The increases in expenditure budgets include approximately $23.7 million in Westpark CFD 1, $12.5 million in Fiddyment Ranch CFD 5, and $12.4 million in Villages at Sierra Vista CFD 1. In addition, this adjustment will increase revenue budgets associated with bond proceeds in Fiddyment Ranch CFD 5 (3014) by $17 million and Sierra Vista CFD 1 (3015) by $12 million. The $23.7 million increase in Westpark CFD 1 is funded by bond proceeds that were received in a prior year and now reside in fund balance.