CC - Item 4K - Receive and File 1st Quarter Budget Report and Adopt Resolution No. 2024-62 AMending FY 24-25 Operating and CIP Program BudgetsROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: BEN KIM, CITY MANAGERV%--01—
DATE: NOVEMBER 12, 2024
SUBJECT: RECEIVE AND FILE THE 1sT QUARTER BUDGET REPORT;
ADOPTION OF RESOLUTION NO. 2024-62, AMENDING THE FY 2024-25
OPERATING AND CAPITAL IMPROVEMENT PROGRAM BUDGETS
SUMMARY
The financial position of the City for the General Fund for FY 2023-24 (unaudited) and
FY 2024-25 through September 30, 2024 (1st Quarter) is summarized in this report. Additionally,
carryover appropriations for the Capital Improvement Program and suggested budget amendments
are included. The actions proposed in this report include the adoption of Resolution No. 2024-62,
which amends the FY 2024-25 Operating and Capital Improvement Program budgets. In summary,
the data presented has shown that the actual revenue for the General Fund in FY 2024 exceeded
the estimated budget by $1.2 million, while expenditures were $1.6 million lower than the
budgeted appropriations. The General Fund's fund balance underwent a net increase of $2.0
million in Fiscal Year 2024, increasing from $32.4 million to $34.5 million. In addition, a total of
$42.5 million in prior year appropriations across 14 funds will be carried forward to FY 2024-25
for 33 Capital Improvement Program (CIP) projects. Additionally, the first quarter receipts for FY
2024-25 comprise 6.2% of the total revenue, which accounts for 25% of the year. Expenditures for
the same period total 22%.
A) — 2023-24 YEAR END DATA
The fiscal year 2023-24 concluded on June 30, 2024, with the final revenue accruals and expenses
being paid for by the conclusion of the first quarter of the subsequent fiscal year. Although the
subsequent information has not been audited, the staff is confident that the audit will yield minimal,
if any, modifications to the data. Rosemead's audit was initiated by an independent audit firm on
October 8, with the expectation of submitting a final report to City staff for review in mid-
December and subsequently to the City Council in January.
AGENDA ITEM 4.K
City Council Meeting — V Quarter Budget Report and Related Actions
November 12, 2024
Page 2 of 9
The amended FY 2023-24 budget projected a deficit of $792,715. Based on year-end (unaudited)
figures shown in Table 1, the deficit became a surplus which grew to nearly $2.0 million, which
has been added to fund balance.
Table 1
Total Revenue $ 31,920,000 $ 33,116,754 $ 1,196,754 104%
Total Expense 32,712,715 31,081282 (1,631,433) 95%
Net $ (792,715) $ 2,035,473 $ 2,828,188
2023-24 General Fund Revenue
Revenue actuals less transfers (unaudited) for the FY are $31.32 million which is $1.20 million
greater than the budgeted estimate. The primary contributors of the increased revenue amount
were in the Use of Property categories where the City realized increases over the budget estimate
($533,000). In addition, increases were also realized within the sales tax ($211,000), property tax
($186,000), and building permits ($126,000).
Table 2 provides summary data by category with comparisons to actuals from two prior fiscal
years.
Table 2
Taxes
$21,348,831
$23,039,365
$21,049,300
$21,383,764
$ 334,464
68%
Intergovernmental
682,567
580,020
254,100
343,116
89,016
1%
Permits, Licenses, Fees
3,332,016
4,514,893
5,276,500
5,429,185
152,685
17%
Fines & Forfeitures
577,616
594,978
574,300
585,349
11,049
2%
Use of Property
360,557
1,432,238
1,524,100
2,057,296
533,196
7%
Charges for Services
743,971
1,102,835
1,393,900
1,478,601
84,701
5%
Miscellaneous
77,838
262,186
47,800
39,444
(8,356)
0%
Total
$27,123,396
$31,526,515
$30,120,000
$31,316,754
$1,196,754
100%
City Council Meeting — I" Quarter Budget Report and Related Actions
November 12, 2024
Page 3 of 9
2023-24 General Fund Expenditures
The final approved 2023-24 General Fund expenditure budget less transfers was $29.66 million.
Final actual expenditures (unaudited) less transfers for the General Fund were $28.03 million,
$1.63 million below the budgeted amount. As shown in Table 3, the most significant savings were
in the Community Development (nearly $0.4 million) due to savings in supplemental items relating
to updating the zoning code and Garvey Avenue Specific Plan. Table 4, which includes transfers
to other funds, departments underspent budgeted appropriations by 5%, with salary and benefit
costs 3%, or $0.25 million below budget, and operating costs 7% or $1.38 million below budget.
Legislative
669,885
814,100
738,799
(75,301)
-9%
City Clerk
1,128,252
1,299,700
1,138,785
(160,915)
-12%
Administration
1,121,129
1,335,900
1,258,792
(77,108)
-6%
Finance
865,419
1,002,200
1,015,430
13,230
1%
General Services
957,348
1,145,200
1,080,380
(64,820)
-6%
Public Safety
10,789,045
12,897,900
12,582,052
(315,848)
-21/o
Public Works
3,840,269
4,385,500
4,086,651
(298,849)
-7%
Parks & Recreation
3,285,085 4,030,500
3,967,039
(63,461)
-2%
Community Development
1,491,285 2,476,800
2,103,354
(373,446)
-15%
Capital Proi
- 274,915
60,000
(214,915)
n/a
General Fund Exp by Dept
24,147,719 29,662,715
28,031,282
(1,631,433)
-5%
Salaries and Benefits 8,120,117 9,612,500 9,359,259 (253,241) -3%
Operations & Maint 18,430,527 20,050,215 18,672,023 (1,378,192) -7%
Transfers to Other Funds 8,500,000 3,050,000 3,050,000 00/0
General Fund Exp by Category 35,050,644 32,712,715 31,081282 (1,631,433) -5%
Fund Balance
Based on unaudited figures, the Fund Balance of the General Fund will increase from $32.4 million
reported in the City's FY 2024 audit report to $34.5 million. Of this amount, $12.4 million is
committed per City Council Fund Balance Policy.
B) — CIP CARRYOVER NUMBERS
In accordance with the Comprehensive Financial Policies approved along with the adoption of the
annual budget, budgeted amounts for Capital Improvement Program (CIP) budgets carry forward
into the next fiscal year unless the project is complete or otherwise removed from the CIP. These
carryovers represent previously approved, but unspent, appropriations and may carry forward
multiple years until the project is either complete or the appropriation is released. The Policy
further stipulates that the carry forward budgeted amounts were to be reported to the City Council
City Council Meeting — 1" Quarter Budget Report and Related Actions
November 12, 2024
Page 4 of 9
as part of the 151 Quarter Budget Report. With the annual audit nearly complete, the amounts
remaining for current projects have been identified and presented herein. The appropriations to be
carried forward are for 33 CIP projects, accounted for within 14 funds, for a total continuing
obligation of $42.5 million. The following charts show both the continuing obligation by project
name and funding source of the continuing projects.
Table 5 — CLP Projects
PROJECT # CATEGORY
DESCRIPTION
CARRYOVER
21030 Streets
Walnut Grove Ave Resurfacing (Phase 11)
2,343,500.00
21031 Streets
Valley Blvd Resurfacing Project (Phase I & II)
3,005,900.00
24013 Streets
Mission Drive Pedestrian Hybrid Beacon System
345,925.00
31020 Facilities
Public Safety Center Upgrades (Desgin only)
14,915.00
31023 Facilities
Garvey Park Main Office Renovation
250,000.00
31026 Facilities
City Hall Elevator and ADA Improvements
113,100.00
31027 Facilities
City Hall Interior Renovations
875,000.00
31028 Facilities
Public Safety Center Upgrades (Construction)
2,806,740.00
31029 Facilities
Acoustic Panels (RCRC & Garvey Gym)
75,000.00
31030 Facilities
Council Chamber/Conference Room Audiovisual Upgrade
50,000.00
31031 Facilities
Roof Replacement at Public Works Office and Warehouse Building
464,078.50
31032 Facilities
Renovation of Garvey Avenue Community Center
645,333.00
39002 Park System
Picnic Shelter Roof Replacement
75,000.00
39004 Park System
Lighting Upgrade at Jess Gonzalez Sports Complex
99,007.00
41023 Park System
Playground Equipment Repl (Garvey & Rosemead Parks)
300,000.00
41026 Park System
Rosemead Park Restroom Renovation Adjacent to Aquatic Center
400,000.00
42000 Park System
Garvey Park Parking Lot Reconstruction
360,000.00
42001 Park System
Rosemead Park Parking Lots (2) Resurfacing
275,000.00
43009 Streets
Walnut Grove Street Light Installation
371,068.48
43010 Streets
Street Light Master Plan and Improvements
63,875.00
49014 Streets
Walnut Grove Ave/1-10 Freeway Ramp Improvements
5,986,485.00
49015 Transportation
Adaptive Traffic Responsive Control System
8,948,594.75
49016 Transportation
Traffic Signal Arterial Improvements
5,976,843.50
49017 Streets
Rosemead BI%WI-10 Freewy Ramp Improvements
5,697,378.26
49018 Streets
Storm Water Catch Basin Upgrade Phase II
202,385.00
49019 Park System
Rosemead Park Walking Trail
487,132.00
49020 Park System
Zapopan Park Walking Trail
353,496.50
49021 Park System
Garvey Park Splash Zone Imrpovements
200,000.00
TDB Other
Parks & Facilities Master Plan
250,000.00
TDB Other
Irrigation System Master Plan
460,000.00
TDB Other
Wireless Broadband/Parks & City Facilities
250,000.00
TDB Other
Record Database Management Plan GIS
300,000.00
TDB Other
Permitting System (Planning, Bldg and Safety, Public Works
500,000.00
Totals - Carryover Appropriations
42,545,756.99
City Council Meeting — I" Quarter Budget Report and Related Actions
November 12, 2024
Page 5 of 9
Table 6 — Funding Obligations by Funding Source
Fund No. Fund Name
Carryover Amount
101 General Fund
214,915.00
201 Gas Tax
1,316,500.00
202 RMRA
886,800.00
220 Prop C
1,575,000.00
225 Measure R
671,068.48
226 Measure M
1,271,100.00
228 SLFRF Categorical
4,000,000.00
229 Measure R Capital
26,559,301.51
231 Safe Clean Water
202,385.00
232 Grants
345,925.00
245 Street Light District
2,288,510.50
25x Development Impact Fees
206,740.00
505 Information Technology
800,000.00
510 Public Facilities
2,207,511.50
Total Fund Obligations
42,545,756.99
Q— FY2024-25 FIRST OUARTER REVIEW
As adopted on June 27, 2024, as shown in Table 7, General Fund budgeted revenue was estimated
at $31.1 million funding, appropriations of $31.1 million. As of September 30, 2024, only 6.2%
of anticipated revenue has been received while 22.0% of appropriation have been expended.
Table 7
Total Revenue $ 31,123,100 $ 1,919,738 6.2%
Total Expense 31,093,700 6,853,818 22.0%
Net $ 29,400 $ (4,934,079)
First Quarter Revenue
With only 25% of the year completed, 6.2% of estimated revenues have been collected which is
slightly higher than a year ago but lower than 1" quarter of FY 2023. Based on final FY 2024
numbers, staff anticipates General Fund revenue will meet or exceed budgeted estimates. Table 8
presents revenue by category with comparisons of receipts as of September 30 of years 2024, and
2023. As shown, receipts are higher than FY 2024.
City Council Meeting — 1" Quarter Budget Report and Related Actions
November 12,2024
Page 6 of 9
Table 8
Taxes
21,049,300
544,033
2.6%
22,226,500
595,942
2.7%
Intergovernmental
254,100
28,736
11.3%
359,700
70,833
19.7%
Permits, Licenses, Fees
5,276,500
745,950
14.1%
5,129,200
1,062,617
20.7%
Fines & Forfeitures
574,300
180,936
31.50%
624,800
125,425
20.1%
Use of Property
1,524,100
(215,560)
-14.1%
1,385,800
(254,981)
-18.40/.
Charges for Services
1,393,900
304,422
21.80%
1,355,200
293,823
21.7%
Miscellaneous
47,800
233,200
487.9%
41,900
26,080
62.2%
Transfer In
1,800,0000.0%
0.0%
Total
31,920,000
1,821,717
5.7%
31,123,100
1,919.738
6.2%
The City receives 86% of total General Fund revenue from just six funding sources as shown in
Table 9. The largest source is property tax and property tax in lieu of VLF. Property Tax and
Property Tax in Lieu of VLF provide 40% of General Fund but very little revenue in the first
quarter.
Property Tax — Under Proposition 13, the assessed valuation of properties held by the same owner
from year-to-year is adjusted each year by the lesser of 2.0% or the percent change in the California
Consumer Price Index. When a property is sold, the property is reassessed to market value which,
in turn, increases property tax revenue to the City. As reflected in Table 9, Property tax revenue
does not flow in 12 equal installments; instead about 40% is received in mid-December and another
large portion is received in May with smaller portions provided in the months January through
June. As shown in the table, property taxes are above last year during the same period which is
mostly attributable to an increase in unsecured property tax revenue. Taxable property that is not
adequately secured by a lien to guarantee tax payment is referred to as unsecured property.
The items that are evaluated and gathered in the unsecured roll encompass various assets such as
boats and jet skis, airplanes, enhancements made to properties owned by others, and business
assets, among others.
Property Tax in Lieu of VLF — Prior to 2004, cities received a portion of vehicle license fees paid
by vehicle owners to the State of California. In 2004, the Legislature reduced the VLF rate and
`swapped' the City portion, dollar for dollar with property tax. Unlike the VLF, this In -Lieu
revenue grows based on assessed property value rather than vehicle value. This source now
provides nearly double the amount the City receives for secured and unsecured property tax.
However, payments of the In -Lieu revenue are made in two equal payments in January and June.
Sales Tax — Sales tax is another significant source of revenue for the City and provides over 24%
of total General Fund revenue. As of September 30, the City has received one payment credited
to the fiscal year. Payments received in July and August are accrued to the prior fiscal year each
year. As shown in the table, receipts for the first quarter are slightly below first quarter FY 2024.
Despite a minor decline in comparison to the previous year, it is noteworthy that the total revenue
generated from sales tax in the last fiscal year surpassed the budgeted amount by a notable margin.
Consequently, we anticipate that the sales tax collections for FY 2024 will either meet or surpass
the projected estimate by the conclusion of the fiscal year.
City Council Meeting — 1" Quarter Budget Report and Related Actions
November 12, 2024
Page 7 of 9
Transient Occupancy Tax — TOT revenue was budgeted approximately $120,000 higher than
actual receipts for FY 2023 in anticipation of a continually improving economy. The first quarter
TOT revenues are not collected until October; therefore, the zero -revenue reflected below is
expected.
Franchise Fees — Franchise Fees are another top revenue estimated at $1.73 million for the year.
The majority of the revenue within this category is paid annually during the third quarter of the
fiscal year. Based on final FY 2024 numbers, the budgeted estimate is achievable.
Building / Plan Check Fees — In response to the pandemic, building and plan check fees were
budgeted at reduced amounts; however, activity in this area continue to grow with current receipts
at 32% of the budgeted estimate at 25% of the year.
Use of Property — The financial statement for "Use of Property" indicates a deficit. The reason for
this occurrence can be attributed to the adjustment made to reverse the accounting accruals of
interest earnings from the previous year, as well as the timing of the accounting entries for interest
earnings in the current year.
Table 9
Property Tax
3,758,000
Property Taxin lieu of VLF
8,202,000
Sales Tax
6,789,300
TOT
2,300,000
Franchise Fees
1,861,700
Bldg/Plan Check
2,750,000
First Quarter Expenditures
20,000
0.5%
4,025,400
113,976
2.8%
-
0.00/0
8,506,900
-
0.00/0
524,034
7.7%
7,333,200
475,571
6.5%
-
0.00/0
2,361,000
6,395
0.3%
-
0.00/0
1,733,300
-
0.0°/"
584,026
21.2%
2,700,000
886,879
32.8%
At 22% expended at 25% of the fiscal year, General Fund expenditures are well within budget
parameters. As shown in Table 10, all departments are around the 25% mark with the exception
of the City Clerk's Office which is 82% expended at this time. This anomaly within the City
Clerk's Office is caused by the payment of large insurance premiums to CJPIA due in July. On
the category basis, personnel related costs are 25% expended on September 30, and operational
costs are 20% expended.
City Council Meeting - 1'' Quarter Budget Report and Related Actions
November 12, 2024
Page 8 of 9
Table 10
Legislative
814,100
161,293
20%
City Clerk
1,299,700
982,824
76%
Administration
1,385,900
241,135
17%
Finance
1,002,200
229,261
23%
General Services
1,145,200
298,507
26%
Public Safety
12,897,900
2,090,202
16%
Public Works
4,385,500
735,371
17%
Parks and Recreation
4,030,500
934,365
23%
Community Development
2,476,800
320,208
13%
Capital Projects
274,915
51,000
n/a
Non -Departmental
3.000.000
-
n/a
D) - FISCAL YEAR 2024-25 BUDGETAMENDMENTS
909,500
165,750
18%
1,243,600
1,014,842
82%
1,692,400
327,186
19%
1,066,600
289,866
27%
1,120,300
245,819
22%
13,097,700
2,223,494
17%
4,442,800
936,436
21%
4,553,500
1,205,245
26%
2,617,300
445,178
17%
-
-
n/a
8 22%
American Rescue Plan Act ("ARPA") - Fund 228
The ARPA Fund's appropriations for the following projects have been reduced as a result of either
reduced cost or an inability of the projects to progress:
$141,200.00 Rosemead Park Aquatics Center Bathroom Renovation
$412,000.00 Public Safety Center Upgrades
$130,000.00 C3ai Law Enforcement
$50,000.00 Permitting System
$733,200.00 Total ARPA Appropriation Reductions
State and Local Fiscal Recovery Funds ("SLFRF") Revenue Loss - Fund 233
The ARPA Fund's appropriations for C3ai Generative Al have been reduced by $410,000 as a
result of its inability to move forward.
It is recommended that the SLFRF Revenue Loss Fund balance of $480,414.30 be transferred to
the General Fund in order to provide support for government services.
General Fund - Fund 101
Increase transfer in revenue to account for the $480,414.30 received from SLFRF Revenue Loss
Fund 233. On the expenditure side, increase the appropriation for a $500,000 transfer to Public
Facilities to help fund future capital projects and deferred public building maintenance needs.
Public Facilities - Fund 510
In order to accommodate the potential requirement for contingency funds associated with the
Public Safety Center Upgrades project, the Public Facilities fund is recommended to be increased
by $238,800. On the revenue side, increase Transfer In by $500,000 from the General Fund to
help fund future capital projects and deferred maintenance needs.
City Council Meeting — 1" Quarter Budget Report and Related Actions
November 12, 2024
Page 9 of 9
STAFF RECOMMENDATION
Staff recommends that the City Council take the following actions:
1. Receive and file the I" Quarter Budget Report;
2. Adopt Resolution No. 2024-62, amending the FY 2024-25 Operating and Capital
Improvement Program budgets.
FISCAL IMPACT
Budgets for existing Capital Improvement Program (CIP) being carried forward to FY 2024-25
have been authorized in prior years and cavy an obligation of fund balance within the Annual
Comprehensive Financial Report. The available fund balance within the SURF Revenue Loss
(Fund 233) will be able to support the transfer out in the amount of $480,414.30. All other
adjustments result in either a net neutral impact, reduction to budget, or a minimal impact.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Prepared by:
Bryan Chua, Finance Director
Attachment A: Resolution No. 2024-62 Amending the FY 2024-25 Operating and CIP Budgets
Attachment A
Resolution No. 2024-62
RESOLUTION NO. 2024-62
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ROSEMEAD, CALIFORNIA, AMENDING THE FY 2024-25 OPERATING
BUDGET AND CAPITAL IMPROVEMENT PROGRAM BUDGETS
WHEREAS, a fiscal review is a prudent method to ensure that the City maintains a healthy
financial structure; and
WHEREAS, the City routinely adjusts fiscal year revenue estimates and appropriations
throughout the fiscal year; and
WHEREAS, the City Council adopted the FY 2024-25 Operating Budget and CIP budgets
on June 27, 2024; and
WHEREAS, the revised appropriation constitutes an update to the Fiscal Year 2024-25
budget approved pursuant to Resolution No. 2024-29, and Resolution No. 2024-30.
WHEREAS, the City Council has reviewed the ls` Quarter Budget Report including
unaudited data for FY 2023-24.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of Rosemead,
California, as follows:
SECTION 1. That the City Council authorizes the carry forward of appropriations for
projects approved in prior fiscal years but have remaining project funds as follows:
Fund No. Fund Name
Carryover Amount
101 General Fund
214,915.00
201 Gas Tax
1,316,500.00
202 RMRA
886,800.00
220 Prop C
1,575,000.00
225 Measure R
671,068.48
226 Measure M
1,271,100.00
228 SLFRF Categorical
4,000,000.00
229 Measure R Capital
26,559,301.51
231 Safe Clean Water
202,385.00
232 Grants
345,925.00
245 Street Light District
2,288,510.50
25x De%elopmentImpact Fees
206,740.00
505 Information Technology
800,000.00
510 Public Facilities
2,207,511.50
Total Fund Obligations
42,545,756.99
SECTION 2. That the City Council hereby approves the following appropriation of funds:
American Rescue Plan Act ("ARPA") -Fund 228
Appropriation
ARPA Adopted Fiscal Year 2024-25 Budget
940,400.00
Capital Project Carry-over
4,000,000.00
BudgetAmendment -Rosemead Park Aquatics Bathroom
(141,200.00)
BudgetAmendment -Public Safety Center Upgrades
(412,000.00)
Budget Amendment -C3ai Law Enforcement
(130,000.00)
Budget Amendment -Permitting System
(50,000.00)
ARPARevised Budget (excluding including carry-over)
4,207,200.00
State and Local Fiscal Recovery Funds ("SLFRF") -Fund 233 Appropriation
PFISFAdopted Fiscal Year 2024-25 Budget 410,000.00
Budget Amendment - C3 Generative Al (410,000.00)
Budget Amendment -Transfer to General Fund 480,414.30
SLFRF Revised Budget 480,414.30
General Fund - Fund 101 Revenue
Gas Tax Fund Adopted Fiscal Year 2024-25 Budget 31,123,100.00
Budget Amendment -Transfer In from SLFRF 480,414.30
General Fund Revised Budget 31,603,514.30
General Fund - Fund 101 Appropriation
Gas Tax Fund Adopted Fiscal Year 2024-25 Budget 31,093,700.00
BudgetAmendment-TransferCutto Information Technology 500,000.00
General Fund Revised Budget 31,593,700.00
Public Faciti l ities l nterna l Service Fund ("PFISF") -Fund 510
Appropriation
PFISF Adopted Fiscal Year 2024-25 Budget
1,328,867.00
Capital Project Carry-over
2,207,511.50
BudgetAmendment -Public Safety Center Upgrades
238,800.00
PFISF Revised Budget
3,775,178.50
Public FacitilitiesInternal Service Fund (°PFISF")-Fund 510 Revenue
PFISF Adopted Fiscal Year 2024-25 Budget 225,000.00
Budget Amend ment - Transfer In General Fund 500,000.00
PFISF Revised Budget 725,000.00
SECTION 3. The City Clerk shall certify to the passage and adoption of this resolution,
and it shall thereupon be in full force and effect.
PASSED, APPROVED, AND ADOPTED this 12th day of November, 2024.
Steven Ly, Mayor
APPROVED AS TO FORM: ATTEST:
Rachel Richman, City Attorney Ericka Hernandez, City Clerk
COUNTY OF LOS ANGELES
CITY OF ROSEMEAD
I, Ericka Hernandez, City Clerk of the City Council of the City of Rosemead, California, do hereby
certify that the foregoing City Council Resolution, No. 2024-62, was duly adopted by the City
Council of the City of Rosemead, California, at a regular meeting thereof held on the 14th day of
November, 2024, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Ericka Hernandez, City Clerk