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Yucaipa City Finance Director Philip White presented an update on the 2023-2024 interim budget at the February 26 City Council meeting. This time last year, city staff began preparing a fiscal year budget that included improvements to city finances and the use of new software (Financial Enterprise Resource Planning) that collects, consolidates and reviews data. A clearer and simpler budget document. The budget figures for 2023-2024 will need to be revised as it has been determined that outflows exceeded inflows, which will require adjustments to the budget. The general fund deficit is projected to be $7.5 million and the fire fund deficit is projected to be $2.5 million.
White said the budget was adopted by Congress in June 2023. “The purpose tonight is to review the status report based on the spending plan adopted at that time and then make some adjustments.”
White told the council that the city has a lot of money, and the general fund and fire fund are two of the most important funds, and also funds that the City Council needs to look at for adjustments.
From the end of June 2023 to the end of June 2024 (projected), there is a $2 million budget deficit at the time of adoption to the General Fund. During the same period, when the budget was adopted, the fire fund also decreased by $2.5 million.
Mayor White said that as of December 31st (midway through the fiscal year), the adopted budget would have put the city in a deficit of up to $7 million, primarily due to $8 million in non-departmental spending and a reduction from the general fund. He said that it was a provision for part of the expenditure. “This includes an adjustment of approximately $5 million for storm damage from Tropical Storm Hillary (August 2023), which was estimated at the time to be approximately $5 million. It’s a budget amendment, and tonight’s budget includes a $7 million deficit in the current general fund.” Because of the timing of how the funds are received, revenue is “on target,” White said.
Expenses occur at different times of the year. White said the city’s balance sheet is slightly in the red, with two exceptions despite being a month behind on bills, and that the city is “doing a good job of providing police services.” . Repairs to damage caused by Hillary’s storm have cost less than the estimated $5 million. “We expect to be able to finish the repair work for significantly less than expected, with savings that will stay within budget. At this point, it looks like we will get $500,000. From my perspective, at the end of the year, “The best guess then is that we end the year with a deficit of about $4 million instead of a $7 million deficit.”
Mr. White then explained the fire fund: “With the fire fund, the timing of the revenue is a little more stable. We’ll receive just over 50% from property taxes by Dec. 31…We’re actually on track to do so,” he said. “The city receives a bill quarterly, and those bills are always late, so even though it looks like the funds are on budget, they actually aren’t… From a fire fund perspective, the spending plan What we were tracking when we set it up is trending accurately.” was adopted…We will end the year with a deficit of $2.4 million. ”
Mr. White then considered a request submitted to the General Fund that included an additional spending appropriation of $1.5 million. “Some of these costs will result in $1.2 million in matching revenues (STARS afterschool program and tractor procurement). The net adjustment amount will be the That’s a $388,000 increase…and that $7 million deficit is up to $7.5 million.”
The fire fund is requesting three items for a total of $109,000: $55,000 for a battalion chief vehicle, $40,000 for fuel, and $14,000 for emergency roof repairs for Fire Station No. 3. “After these adjustments, his $2.4 million highlighted in the fire fund is now down to $2.5 million. The original estimate was pretty good, so I think that’s where we’ll end the year.” said White.
The fire fund has a cumulative balance, and after this year, the expected ending amount after these adjustments is $7.9 million in the fire fund, White told the council.
White said there are three additional requests for the Capital Improvement Plan budget, including renovations on 7th Avenue, storm drains on 10th Avenue and roof and floor repairs at the Scherer Senior Center. The Seventh Street renovation project was included in the CIP (Capital Improvement Program) for several years, but it appears to have disappeared from the CIP several years ago, and staff are asking to be added back to the CIP. The 10th Street storm drain will be funded in last year’s Chapman Heights CFD (he generated $485,000 for improvements within Chapman Heights). Repairs to the Scherer Senior Center roof and floor will be funded through a Community Development Block Grant.
Mayor Pro Tem Chris Venable asked what the cost of the skip loader was when it was new ($140,000). Mr. White replied that the price was $130,000, which was a really good deal. Venable said he was in the field, but it really wasn’t that good of a deal. White explained that the skip loader the city owned is 40 years old, so the city has been renting it for a while. White said the idea was to procure new equipment instead of continuing to rent it because it is equipment that the city uses on a daily basis. “Again, this is not unrestricted funding, but consistent with restricted funding available,” White said.
Mayor Justin Bieber clarified, “In relation to the hurricane under the state of emergency declaration, this is natural for reimbursement. We have to pay for the repairs first and then apply for reimbursement. Is that correct?” I wanted to make it. White replied, “As for Hillary’s restoration work, yes, of course.”
Beaver asked how long it would be before the city would receive compensation from the state of emergency. Mr. White responded that there are several ways to receive compensation if damage occurs. The first one was through FEMA and the match rate was 5%. The city and county of San Bernardino failed to obtain that funding. The second is a 25% local match with CDAA (California Disaster Assistance Act) with a 75% refund coming soon. Assistant City Engineer Landon Kahn said, “You will receive your award notification in the next few months. Once you receive that, you will be able to apply for a refund. Hopefully you will be able to apply here soon.” Ta.
White said the reimbursements are not reflected in the budget because they are not received until the next fiscal year.
City staff has already begun preparing the 2024-25 fiscal year budget with additional improvements, with the goal of “achieving superior budget presentations that are more transparent, easier to understand, and more accessible. “Create a final budget that meets the standards defined by the City Finance Association.” ” stated in the agenda document.
A live stream/recording of this presentation is available at https://yucaipa.gov/live.
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