HomeMy WebLinkAboutItem 08a - Operating Budget and CIP and Equipment PlansAdopt the Operating Budget and CIP and Equipment Plans
June 4, 2024
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DATE: June 4, 2024
TO: Honorable Mayor and City Council
FROM: Dominic Lazzaretto, City Manager
Henry Chen, Interim Administrative Services Director
SUBJECT: RESOLUTIONS RELATING TO THE ADOPTION OF THE FISCAL YEAR
2024-25 OPERATING BUDGET AND THE FISCAL YEARS 2024-25
THROUGH 2028-29 CAPITAL IMPROVEMENT AND EQUIPMENT PLAN
RESOLUTION NO. 7573 ADOPTING A BUDGET FOR FISCAL YEAR
2024-25 AND APPROPRIATING THE AMOUNTS SPECIFIED THEREIN
AS EXPENDITURES FROM THE VARIOUS FUNDS
CEQA: Not a Project
Recommendation: Adopt
RESOLUTION NO. 7574 ADOPTING A CAPITAL IMPROVEMENT AND
EQUIPMENT PLAN FOR FISCAL YEARS 2024-25 THROUGH 2028-29
CEQA: Not a Project
Recommendation: Adopt
SUMMARY
Sections 1204 and 1205 of the Arcadia City Charter require a Public Notice and a Public
Hearing for consideration of the proposed Operating Budget and Five-Year Capital
Program for the ensuing fiscal year, which is required to be adopted by July 1. The
recommended actions are necessary to implement the budget for Fiscal Year 2024-25.
This year’s budget process included two Budget Study Sessions with the City Council on
May 7 and 21, 2024. Copies of the proposed Operating Budget were provided for the City
Council’s review. After the initial budget study session, two modifications were made to
the proposed budget. One was the addition of a budget for the City’s Health Committee
of $22,000 and the other change was minor adjustments to the budget in Development
Services and the Library, which reduced the budget by $2,500. Inclusive in the draft
Budget were all operating funds, including General, Special Revenues, Enterprise, and
the Successor Agency. Additionally, the City Council received the Capital Improvement
and Equipment Replacement Fund budgets in a separate document. All funds total
$173.3 million in expenditures, of which the General Fund’s budget is $96.7 million
(including Transfers Out as noted below).
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June 4, 2024
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As Special Revenues, Enterprise, and Debt Service funds are restricted to specific
purposes and are generally self-sustaining, this report will primarily focus on the General
Fund’s Operating Budget.
The Fiscal Year 2024-25 Operating Budget considers the uncertain economic
environment. In today's economic landscape, cities are navigating a dichotomy of factors.
Some indicators, such as the low unemployment rate show signs of growth; conversely,
other factors like inflation and rising interest rates could lead to economic slowdowns.
Arcadia will remain vigilant, proactive, and adaptable in its financial planning to mitigate
risks as they arise. While the City is not anticipating a recession, some of Arcadia’s
revenue sources have slightly softened and may experience modest or little growth in the
next fiscal year.
The proposed FY 2024-25 General Fund Operating Budget outlines Total Operating
Revenues of $98.8 million and Expenditures of $96.7 million, resulting in a projected
surplus of $2.1 million. After accounting for Fund Transfers In and Out, the projected
ending Fund Balance of the Operating General Fund is $27.2 million.
In accordance with the City's financial policies, which recommend maintaining a 20%
balance in the Emergency Reserve Fund relative to annual operating expenditures,
transfers of $0.5 million and $3.5 million are proposed to be made to the Emergency
Reserve Fund at the conclusion of FY 2023-24 and FY 2024-25, respectively. As a result,
the General Fund Operating Fund Balance is projected to reach $23.2 million by the end
of FY 2024-25, providing the necessary reserve to sustain operations throughout the
Fiscal Year.
Considering these factors, the FY 2024-25 Budget takes a cautious approach, factoring
in modest growth while maintaining the flexibility to pivot if the economic landscape differs
materially from expectations. The City aims to navigate the economic landscape
responsibly, ensuring the provision of high-quality services to residents while considering
all possible economic outcomes.
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June 4, 2024
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The General Fund Operating budget is summarized in the table below:
GENERAL FUND SUMMARY
FY24-25 Budget
Beginning Fund Balance 25,026,600$
Estimated Revenues 88,428,800
Transfers In 10,445,600
Expenses & Uses (87,457,100)
New Programs (1,433,600)
Revenue over Expenses 9,983,700$
Transfer to Equipment Replacement (3,400,000)
Transfer to Capital Improvement Fund (3,400,000)
Transfer to Local Law Enforcement Prgm (165,000)
Transfer to Lighting Assessment District (859,200)
Total Transfer Out (7,824,200)
Subtotal Operating Balance 2,159,500
Ending Fund Balance 27,186,100$
This year, $6.4 million has been budgeted for transfer into the Capital Improvement and
Equipment Replacement Funds, with each fund receiving $3.4 million. This amount
equates to approximately the 10-year average spend in each account. Last year, the City
increased the transfer amount in response to sharp price increases caused by inflation,
higher material and production costs, and increased replacement needs for aging
infrastructure and equipment. In this proposed budget, it is recommended to maintain the
annual transfer amounts of $3.4 million for each fund.
The Capital Improvement Fund plays a vital role in funding crucial maintenance projects,
including pavement rehabilitation, building repairs, and parks maintenance. In the
upcoming Fiscal Year, several key projects are budgeted within the Capital Improvement
Fund, such as Citywide access and security, facility improvements at Fire Station 105,
and a new cooling tower at the Library. Due to increasing water quality standards, the
City is spending significantly more to build new treatment capacity at the Peck Well as
well as undertaking a joint project with the City of Sierra Madre for a new well at the Public
Works Services Yard. The proposed projects budgeted in the Capital Improvement Fund
total $7.7 million. The combined capital projects across all funds have been budgeted at
$37.8 million.
The Equipment Replacement Fund helps replace equipment that has reached the end of
its useful life like computers, vehicles, and major office equipment. The proposed total
cost of asset replacement through the Equipment Replacement Fund is $7.7 million.
Notably, significant purchases for FY 2024-25 are planned, including $3.1 million for a
new Ladder Truck in the Fire Department, $1.5 million for replacement vehicles in the
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June 4, 2024
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Street Division, $504,500 for Police vehicle replacements, and $293,200 for vehicles in
the Water Division.
New programs proposed for the City’s overall Operating Budget demonstrate Arcadia’s
commitment to being responsive to community needs. All new programs proposed for the
City’s General Fund Operating Budget this year total $1,433,600 and represent vital
investments in all areas of the community, specifically focusing on improved service
delivery to meet increasing demands and modernization of operations.
In alignment with the City's pension strategy, the proposed FY 2024-25 Budget allocates
funds for addressing long-term liabilities, specifically the Unfunded Accrued Liabilities
(“UAL”) of CalPERS. To this end, $2.0 million has been designated to transfer to the City’s
Section 115 Pension Trust account, which serves as a financial tool to help address future
pension-related costs, especially in times of economic constriction.
DISCUSSION
The FY 2024-25 Budget takes a conservative approach, while maintaining a slightly
optimistic outlook. Revenue streams such as Sales Tax, Property Tax, and Business
License Fees are expected to grow at a slower rate than previous years; however,
Transient Occupancy Taxes are projected to show healthy growth. One crucial factor in
the revenue trajectory is the performance of Measure A, a 0.75% Transaction and Use
Tax (Sales Tax), approved by Arcadia voters in June 2019. This revenue stream has
played a critical role in supporting the City's budget over the last few fiscal years. Measure
A contributed approximately $11.4 million to Arcadia’s General Fund revenues in FY
2023-24 alone. Without this voter-approved measure, the City would have faced the
challenge of implementing service cuts or exploring alternative methods to achieve an
annual balanced budget.
Summarized in the table below is the General Fund Operating Budget for FY 2023-24
Year-End Estimates; FY 2024-25 Proposed Budget for Adoption; and the FY 2025-26
Preliminary Budget Outlook. The table below shows the General Fund Operating Ending
Fund Balance is projected to reach $27.2 million by the end of FY 2024-25. This increase
is due to a projected surplus of $2.2 million.
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June 4, 2024
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GENERAL FUND
FY 23-24 FY 24-25 FY 25-26
Estimated Budget Budget
Beginning Fund Balance 17,176,500$ 25,026,600$ 27,186,100$
Estimated Revenues 86,724,000$ 88,428,800$ 91,023,100$
Transfers In 6,557,100 10,445,600 6,809,900
Expenses & Uses (78,631,000) (89,914,900) (90,497,400)
Revenue over Expenses 14,650,100$ 8,959,500$ 7,335,600$
Transfer to Equipment Replacement Fund (3,400,000) (3,400,000) (3,400,000)
Transfer to Capital Improvement Fund (3,400,000) (3,400,000) (3,400,000)
Total Transfer Out (6,800,000) (6,800,000) (6,800,000)
Subtotal Operating Balance 7,850,100 2,159,500 535,600
Ending Fund Balance 25,026,600$ 27,186,100$ 27,721,700$
FY 2024-25 Expected Revenues
For FY 2024-25, total General Fund revenues are expected to increase 1.97% when
compared to FY 2023-24 Year-End Estimates. The largest revenue source to the City’s
General Fund is Taxes and Fees. The key revenues under these two groups are: Sales
& Use Tax, Property Tax, Utility Users’ Tax, Transient Occupancy Tax, and Motor Vehicle
License Fees. The projected receipts for each tax are shown in the tables below:
GENERAL FUND REVENUES
FY 23-24 FY 24-25
Estimates Budget $ %
Taxes 60,783,400$ 61,589,100$ 805,700$ 1.33%
License & Permits 5,943,300 5,969,900 26,600 0.45%
Fines & Penalties 510,900 500,900 (10,000)-1.96%
Use Money & Property 2,050,000 2,380,000 330,000 16.10%
Revenue from Other Agencies 9,130,500 9,307,800 177,300 1.94%
Charge Current Services 4,333,800 4,721,300 387,500 8.94%
Library 112,000 112,000 0 0.00%
Recreation 1,558,300 1,468,900 (89,400)-5.74%
Other Revenue 2,301,800 2,378,900 77,100 3.35%
Total Revenue 86,724,000$ 88,428,800$ 1,704,800$ 1.97%
Changes
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June 4, 2024
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GENERAL FUND TAX REVENUE SUMMARY
Description FY 2023-24 YE
Estimates
FY 2024-25
Proposed Budget Difference % Change
Sales and Use Tax $ 24,173,000 $ 24,228,700 $ 55,700 0.23%
Property Tax 19,280,700 19,851,100 570,400 2.96%
Utility Users’ Tax 9,298,200 9,190,300 (107,900) -1.16%
Transient Occupancy Tax 5,587,400 5,894,400 307,000 5.49%
Motor Vehicle License Fees 9,052,000 9,232,800 180,800 2.00%
Sales and Transaction Use Tax: For Sales and Transaction Use Tax, the total estimates
for the upcoming Fiscal Year are $24.2 million, reflecting a 0.23% increase compared to
the previous year’s revenues. Recent data indicates that sales tax growth has slowed
significantly in the current economic environment, so it is projected to remain flat in FY
2024-25.
Property Tax: Arcadia's status as a desirable community coupled with its highly regarded
public school district, contributes to the expected growth in home valuation over the next
year. However, due to the continuation of high interest rates, home sales in California
have slowed significantly, especially at the upper end of the marketplace. Even though
sales rates have decreased overall, strong demand has helped to maintain price levels in
Arcadia. These factors will help the City maintain some growth in Property Tax revenue
albeit lower than what the City has experienced in recent years. Conservative revenue
projections are planned for FY 2024-25, with growth in Property Tax receipts estimated
at approximately 3.0% for FY 2024-25.
Utility Users’ Tax: The projected revenue from the Utility Users' Tax (“UUT”) is $9.2
million, representing a 1.2% decrease compared to the Year-Ending Estimate for FY
2023-24. This revenue stream experienced strong growth in the prior fiscal year due to
increased energy prices overall; however, this trend is not expected to continue. The
Utility Users’ Tax is expected to remain flat next fiscal year with some minor growth in
electricity costs, offset by decreases in natural gas pricing.
Transient Occupancy Tax (“TOT”): The TOT revenue projection for FY 2024-25
represents a 5.5% increase compared to the previous year, resulting in expected revenue
of $5.9 million. This is an area that has shown very strong growth for Arcadia and the
demand for travel is expected to continue to increase in the next fiscal year. It should be
noted, however, that a proposed ballot measure for November 2024 – known as the
Taxpayer Protection and Government Accountability Act – could retroactively invalidate
the 2% increase in TOT approved by Arcadia voters in 2022. If approved, this revenue
area could decrease significantly until an updated measure meeting the updated criteria
could be submitted to the voters for consideration and approval.
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June 4, 2024
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Motor Vehicle License Fees (“VLF”): The Motor Vehicle License Fees ("VLF") tax is
projected to increase by 2%, generating $9.2 million in revenue next Fiscal Year. Since
the State made a formulaic change to directly tie the City’s VLF to the annual property
assessment, the growth rate has proven to be healthy in Arcadia. This growth trend is
expected to continue into the next fiscal year.
FY 2024-25 Proposed Expenses
GENERAL FUND EXPENDITURES BY DEPARTMENT
The proposed FY 2024-25 Operating Budget sets total operating expenditure at $87.5
million, representing an 8% increase compared to the previous year's Revised Budget of
$80.4 million. Much of this increase can be attributed to greater investment in the City’s
capital infrastructure and the continued modernization of City equipment. It is important
to highlight that the FY 2024-25 Operating Budget remains largely unchanged apart from
contractual increases from multi-year service agreements, and the expected increases in
salary and benefits.
CITY MANAGER
$2,320,200
3%
ADMIN SVRCS
$3,671,200
4%
HUMAN RESOURCES
$1,024,200
1%
POLICE
$27,461,000
31%
FIRE
$25,620,500
29%
PUBLIC WORKS
$7,168,200
8%
DEV. SVCS
$5,902,400
7%
RECREATION
$4,053,800
5%
LIBRARY & MUSEUM
$4,898,000
6%
GENERAL CITY
$5,340,100
6%
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June 4, 2024
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Furthermore, the budget allocates increased "prefunding" of long-term benefit accounts,
including the City's Retiree Medical Benefit (Other Post Employee Benefit liabilities) and
the contribution to the City’s Pension Trust Account. These two-line items amount to $4.1
million, representing an increase of approximately $0.2 million compared to the previous
year.
Proposed New Programs
New programs and expenditures are presented from various departments to respond to
emerging operational needs as well as to respond to direction received from the City
Council. New programs proposed for the FY 2024-25 Budget total $1,433,600 and are
described in the following sections.
City Manager Office: Website Redesign ($60,000): The City’s website was last
redesigned in 2019 and lacks some key features of a modern website. A redesign will
provide the City with a customer-centric website that will modernize, reorganize, and
improve the website by upgrading the content management system, website accessibility,
and translation services. Additionally, it will implement an intuitive community events
calendar, general customer service enhancements, and an optimized search function.
Administrative Services Department: Accounting Supervisor ($176,500): The
Accounting Supervisor position is being reinstated to oversee the general accounting
functions of the City. This position will help direct Arcadia’s finance and accounting
functions and provide a necessary layer of review and supervision. With the expected
implementation of the new Enterprise Resource Planning (“ERP”) system, there will be
opportunities to modify and update City operating procedures. This position will assist in
evaluating current processes and making suggestions for improvement. This new position
will also allow for increased opportunities for staff rotation, responsibilities, and upward
mobility within the organization.
Human Resources Department: Human Resources Manager ($173,700): The Human
Resources Manager would oversee employee recruitment and selection to provide much-
needed support in the overall operation of this program area. This position would assist
with overall Human Resources staff oversight, day-to-day workflow, legal compliance,
review and approval of insurance requirements to ensure efficient processing of all
contracts, and backfilling for the Human Resources Director in their absence. The
proposed Human Resources Manager will be critical in executing the Department's vision
to be proactive rather than reactive, establish true partnerships with each City
Department, and implement effective long-range project planning in the areas of
succession, retention, recruitment, culture, and modernization.
Human Resources Department: Fair Labors Standards Act (“FLSA”) Audit
($125,000): The City last completed an FLSA audit approximately 13 years ago. The new
FLSA audit would review practices through the lens of updated laws by examining all
previous recommendations. The new audit would also focus on an in-depth review of
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June 4, 2024
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individual and/or classification-wide FLSA work cycles, exempt and non-exempt
designations for all classifications across the City, leave bank deductions for exempt and
non-exempt employees, and other areas as-needed.
Police Department: Mobile Surveillance Units ($91,800): Mobile surveillance
technology enhances safety on property and the surrounding area by utilizing cloud-
based software to provide real-time insights from any web-enabled device. Mobile
surveillance units act as a force multiplier and will aid personnel in monitoring and
gathering information across different locations efficiently. By strategically deploying
these units, organizations can enhance their surveillance capabilities and improve their
situational awareness. This proactive approach not only helps maintain security but also
allows for timely responses to any potential threats or incidents. The mobile surveillance
units serve as valuable tools in keeping a watchful eye on critical areas, ensuring a safer
environment for all.
Police Department: Cellphone and Digital Evidence ($85,000): This program will
equip sworn personnel with iPhones and evidence.com, a digital evidence management
system. Cellphones will provide a more secure chain of custody for digital evidence,
mitigate risk of personal device use by officers, and offer seamless integration with the
LA County District Attorney for evidence submission.
Police Department: Scheduling Software ($20,500): The department is looking to
implement new scheduling software to meet daily personnel scheduling needs and
incorporate crucial functionalities such as mandatory staffing and overtime scheduling.
Fire Department: Special Weapons and Tactics (“SWAT”) Paramedic ($15,000):
Tactical medicine is a practice where emergency medical services are provided during
critical or high-risk law enforcement incidents. Historical accounts and after-action
reviews have shown that the application of tactical medicine or injury management is most
beneficial at the time of the incident versus a later period, which could delay on-scene,
life-saving efforts. The Arcadia Fire Department (“AFD”) and the Arcadia Police
Department (“APD”) have both agreed to support and implement tactical medicine
services through the implementation of the SWAT Paramedics Program. The Program
will be staffed by AFD, and then managed by APD when assigned during an incident.
After AFD members meet all the required training requirements, they will be fully
integrated into the SWAT Team and could be deployed for medical response by either
APD or AFD Command Staff. AFD’s goal is to train and equip six (6) SWAT Paramedics
over the next two fiscal years.
Fire Department: New Management Analyst ($152,400): Due to increasing regulatory
compliance standards on fire grants and reimbursement programs, current staffing levels
are insufficient. The department needs additional staffing to ensure that potential funding
opportunities are being pursued, secured, and reported properly. This new position is
expected to be at least partially offset by increased funding success and will also assist
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June 4, 2024
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with other administrative support functions and public outreach in support of the Fire
Department.
Development Services: EnerGov Business License Module ($101,000): In FY 2023-
24, the City instituted an eReview plan-check process and Business License Module with
EnerGov as part of an overall transition to online permitting. The Business License system
is the last module to be upgraded into EnerGov. EnerGov has made adequate advances
that match or exceed the City’s current HdL software. This transition will help streamline
the review process department-wide by having all the systems on the same platform.
Development Services: Graphical Information System (“GIS”) Analyst ($126,000):
With the growing reliance on GIS and its integration with the EnerGov permit tracking
system, there is a need for dedicated support and oversight. To address this, a new
contracted GIS Analyst position is being proposed as part of the City’s IT contract. The
GIS Analyst would be responsible for providing comprehensive support for both the
existing Citywide GIS and EnerGov permit tracking systems. Key responsibilities would
include regular updates and maintenance of the GIS and EnerGov systems to ensure
data accuracy, integrity, and reliability. Additionally, this role would assist various
departments with their GIS and EnerGov needs, providing technical support and
troubleshooting when the GIS or EnerGov systems encounter issues, promptly resolving
any disruptions to operations. This contracted position would collaborate with L.A. County
and Tyler Technologies on maintenance and advancement of each product and the
increased costs would be funded through the City’s Technology Fee.
Development Services: Graphical Information System (“GIS”) Upgrade and
Migration of Data ($85,000): The City's GIS needs to be upgraded from its current
version, Geocortex Essentials, to VertiGIS Studio web, since the existing version will be
decommissioned on June 30, 2024. Without technical support, the City will experience
regular disruptions to an important mapping system that is used daily by staff and the
public. The most affordable option for continued GIS datasets is to use L.A. County's
portal and run the new VertiGIS Studio Web from a new on-premise server. The proposed
cost would cover the migration, configuration, and development of the upgrade, including
the custom reports, templates, workflows, and new servers. The new costs would be
funded through the City’s Technology Fee.
Recreation & Community Services: New Recreation Supervisor (Homelessness
and Health Services) ($112,800): The Recreation & Community Services Department
is the lead Department tasked with addressing homelessness in the City. This position
would serve as the lead for managing all homelessness duties in Arcadia, including
reports, grants, stakeholder meetings, homeless plan updates, reports, symposiums,
case management, and other needs as they arise. In addition, this position would help
with the City’s Health Committee, organizing monthly health seminars and the Community
Health Fair, as well as overseeing the City’s general health and wellness referral
programs and classes.
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Recreation & Community Services: Coed Summer Youth Basketball League
($9,700): Youth basketball is a very popular program in Arcadia and there is an unmet
need for these offerings. This program will add non-competitive learning experiences for
youth in grades 3-6 during the summer. The revenue generated by this program will offset
any new costs.
Recreation & Community Services: Health Committee ($22,000): Add a budget for
the City’s Health Committee to provide refreshments and translation services at their
meetings.
Library & Museum Services: Veteran’s Banner Program ($37,200): In response to a
City Council request, this would create and display banners for those living veterans in
Arcadia along Huntington Dr. and Baldwin Ave. The cost of the banners, including design,
creation, brackets, and installation are between $250 and $400 per banner. There are
approximately 124 known living veterans in Arcadia.
Library & Museum Services: New Library Materials ($40,000): Print and electronic
collections continue to increase in cost and demand. In FY 2022-23, digital collection
usage totaled 33,799, and through March in the current fiscal year, digital check-outs
have grown to 47,942, an increase of 42%. The Library has been meeting the growing
demand for electronic collection by using portions of the print budget to supplement;
however, this request would enable the Library to better meet demand for both print and
electronic collections. The breakdown of requested funding is as follows: $11,300 to
support the electronic collection; $10,000 to refresh the Gale eBook Encyclopedias;
$9,500 for children’s materials; and $13,700 for special print collections such as Test
Prep, Career, and Computer collections.
The table below summarizes the New Programs included in this proposed budget.
NEW PROGRAMS
FY 2024-25 Ongoing Annual
Proposed New Programs Start Up Costs Costs
City Manager
Website Redesign 60,000$ 7,400$
Administrative Services
Reinstate Accounting Supervisor 176,500 181,400
Human Resources
New HR Manager 173,700 181,700
FLSA Audit 125,000 -
Police
Mobile Surveillance Units 91,800 91,800
Cellphone and Digital Evidence 85,000 55,000
Scheduling Software 20,500 13,700
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FY 2024-25 Ongoing Annual
Proposed New Programs Start Up Costs Costs
Fire
SWAT Paramedic Program 15,000 93,500
New Management Analyst 152,400 142,000
Development Services
EnerGov Business License Module 101,000 13,000
Geographic Information System (GIS) Analyst 126,000 126,000
GIS Upgrade and Data Migration 85,000 7,000
Parks and Recreation
Recreation Supervisor (Homelessness and Health Services)112,800 124,000
Coed Summer Youth Basketball 9,700 9,700
Health Committee 22,000 22,000
Library and Museum
Veteran's Banner Program 37,200 10,000
New Materials 40,000 40,000
Total New Programs 1,433,600$ 1,118,200$
Capital Improvement and Equipment Replacement Funds
In recent years, the City has successfully accumulated funds in the Capital Improvement
and Equipment Replacement Funds to save for significant purchases that occur
intermittently. The balance of each fund has grown through financial prudency and by
transferring any excess funds from the General Fund at the end of each fiscal year. In
general, the goal is to transfer at least the 10-year average expenditure from each account
from the General Fund. This proactive approach to funding is crucial in preventing failure
of the City's infrastructure system and ensuring staff have the necessary tools and
equipment to carry out their essential duties. To establish a sustainable fund balance for
future purchases and projects, the FY 2024-25 Budget will transfer $6.8 million from the
General Fund, with $3.4 million allocated to the Capital Improvement Fund and $3.4
million to the Equipment Replacement Fund.
The FY 2024-25 Capital Improvement Plan entails 40 projects, with a total expenditure of
$37.8 million. Of this amount, $7.7 million will be funded from the Capital Improvement
Fund. The Capital Improvement Fund primarily supports crucial maintenance initiatives
such as pavement rehabilitation, building repairs, and parks maintenance. The following
table provides a summary of some major proposed projects scheduled for the year.
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June 4, 2024
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FY 2024-25 MAJOR CAPITAL IMPROVEMENT PROJECTS
Project Description Project Budget Funding Source
Peck Well Treatment $8,700,000 Water Fund/
Dow Settlement Fund
Goldring Well and Treatment $7,000,000 Water Fund/
City of Sierra Madre
Colorado Complete Streets
$3,850,000 Federal Grant/
Measure R
Pavement Rehabilitation Program $2,800,000
Capital Improvement
$1.6M & RMRA (SB1) -
$1.2M
Sewer Capacity Upgrade $2,000,000 Sewer Fund
Annual Slurry Seal Program
$1,350,000 Capital Improvement
Fund
Centennial Way Traffic Project $1,200,000
Measure R/Measure
M/Transportation Impact
Fee
The Equipment Replacement Fund plays a critical role in funding essential equipment
such as computers, vehicles, and major office equipment. To ensure the sustainability of
the Equipment Replacement Fund, an increased annual transfer of $3.4 million is now
necessary to accommodate rising costs from inflation and demand for new equipment.
In the proposed budget, there are several vehicle replacements planned – specifically,
heavy-duty vehicles used by the Public Works Services, Fire, and Police Departments.
This year, the Fire Department is replacing their 2010 Pierce Ladder Truck. This
specialized vehicle will take an estimated 40 months before the Fire Department receives
the new ladder truck. This is just one example of the delays that the City experiences in
its ability to acquire new vehicles.
The Equipment Replacement Fund encompasses a comprehensive list of 41 equipment
purchases, totaling $7.7 million. Ninety-two percent (92%) of the $7.7 million (or $7.1
million) will be funded by the Equipment Replacement Fund. The table below summarizes
some significant equipment purchases for the upcoming period.
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June 4, 2024
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FY 2024-25 MAJOR EQUIPMENT REPLACEMENT PURCHASES
Equipment Replacement
Description
Replacement
Budget Funding Source
Street Vehicle Replacements:
New Loader
¾ Ton Pickup Truck (2)
CNG Street Sweeper
½ Ton Pickup Truck
Installation of Equipment and
Accessories
$1,520,800 Equipment Replacement
Water Vehicle Replacements:
¾ Ton Stakebed Truck
¾ Ton Pickup Truck
½ Ton Pickup Truck
Installation of Equipment and
Accessories
$293,200 Water Fund
Fire Department:
• New Ladder Truck
• ½ Ton Pickup Trucks
$3,120,100 Equipment Replacement
Installation of Equipment and
Accessories
Police Department:
• 3 New Patrol Vehicles
• 1 New Admin SUV
• 2 New Detective SUVs
• Installation of
communications equipment
$504,500
Equipment Replacement
ECONOMIC OUTLOOK
The General Fund FY 2024-25 operating budget reflects a cautious outlook following the
high inflationary and interest rate environment of the last few years. While the inflationary
and interest rate pressure has eased slightly, the economic outlook remains uncertain.
The Federal Reserve has indicated that the high interest environment may linger beyond
what economists have been projecting. These macro events will have an impact on
economic activity and the revenue picture for the City into the next fiscal year.
Adopt the Operating Budget and CIP and Equipment Plans
June 4, 2024
Page 15 of 16
High interest rates are having an impact on property taxes as real estate transactions
slow in response to sustained highs. Sales tax activity in the City is also showing signs of
reaching a plateau after two years of tremendous growth. Despite the softening of certain
revenue streams, the City has managed its finances responsibly and will be able to
maintain the high level of service the community expects. These prudent financial
practices will enable the City to have a projected surplus for FY 2024-25, despite a
moderate slowdown that could impact revenues.
Even though concerns about a potential recession persist due to inflation, interest rates,
consumer spending, and business investments, the potential impact on the economy
remains uncertain. It is notoriously difficult to project with any certainty the timing of any
economic downturn; however, the City is well prepared to overcome these obstacles by
relying on conservative estimates and being responsive to changes in its financial outlook.
By being vigilant and flexible, the City will be able to address any challenges and continue
to deliver a high level of service to the community.
CONCLUSION
The proposed FY 2024-25 General Fund Operating Budget demonstrates a balanced
financial position, with a projected surplus of $2.1 million. This surplus is a result of Total
Operating Revenues and Transfers In amounting to $98.9 million, net of Operating
Expenditures and Transfers Out totaling $96.7 million.
Arcadia’s commitment to fiscal conservatism has allowed for the accumulation of savings,
providing a cushion to navigate economic uncertainties in the short term. This prudent
approach enables the City to plan and execute smart strategies for the future. Arcadia
has consistently demonstrated its adaptability and ingenuity in maintaining critical
services during challenging economic conditions, effectively delivering what residents
and businesses value most. In the coming years, the management team and I will build
on these strengths to deliver on our commitment to providing effective and fiscally
responsible municipal service.
To move forward with the proposed budget and ensure effective financial planning, it is
recommended that the City Council adopt the proposed Resolutions, which include
enacting the FY 2024-25 Operating Budget as well as the Five-Year Capital and
Equipment Replacement Plans.
Attached to this staff report are the following:
• Exhibit “A”: a summary of Sources and Uses for All Funds reflecting the proposed
Operating Budget presented to Council for Adoption
• Exhibit “B”: a summary of the proposed Five-Year Capital Improvement and
Equipment Replacement Plan
Adopt the Operating Budget and CIP and Equipment Plans
June 4, 2024
Page 16 of 16
ENVIRONMENTAL ANLYSIS
The proposed actions do not constitute a project under the California Environmental
Quality Act (“CEQA”), based on Section 15061(b)(3) of the CEQA Guidelines, as it can
be seen with certainty that they will have no impact on the environment. Many individual
budgeted items in the attached documents may require their own environmental reviews,
which will be conducted when each project is brought forward for consideration.
RECOMMENDATION
It is recommended that the City Council determine these actions do not constitute a
project under the California Environmental Quality Act (“CEQA”); and:
1)Adopt Resolution No. 7573 adopting a Budget for Fiscal Year 2024-25 and
appropriating the amounts specified therein as expenditures from various funds;
and
2)Adopt Resolution No. 7574 adopting a Capital Improvement and Equipment Plan
for the Fiscal Years 2024-25 through 2027-28.
Attachments: Exhibit “A” – All Funds Operating Budget Summary
Exhibit “B” – Five-Year Summary of Capital and Equipment Plan
Resolution No. 7573
Resolution No. 7574
Exhibit "A"
Ending Fund
Fund Beginning Outside Transfer Total Appropriation Transfer Total Balance
Fund FY24-25 Sources In Out FY24-25
General Fund 25,026,600 88,428,800 10,445,600 123,901,000 88,890,700 7,824,200 96,714,900 27,186,100
Narcotic Seizure Federal 245,400 46,400 0 291,800 0 0 0 291,800
COPS 94,100 192,300 0 286,400 189,500 0 189,500 96,900
Medical/Dental 472,900 0 7,231,600 7,704,500 3,500,000 3,731,600 7,231,600 472,900
Local Law Enforcement 1,600 130,000 165,000 296,600 265,900 0 265,900 30,700
IRS Task Force 479,400 14,400 0 493,800 0 0 0 493,800
Worker Compensation/Liability 5,875,100 176,300 3,535,000 9,586,400 3,535,000 0 3,535,000 6,051,400
Homeland Security 00 00 000 0
Library State Grant 600 0 0 600 0 0 0 600
Homelessness Plan 0 373,500 0 373,500 373,500 0 373,500 0
Office of Traffic Safety Grant 0 99,300 0 99,300 99,300 0 99,300 0
California OES HSGP 0 46,000 0 46,000 46,000 0 46,000 0
Autotheft Prevention Taskforce 0 0 0 0 0 0 0 0
Misc. P.E.R.S. Employee Retirement Fund 0 0 0 0 0 0 0 0
Emergency Reserve 15,323,600 0 0 15,323,600 0 0 0 15,323,600
Emergency Response 2,790,900 0 0 2,790,900 0 0 0 2,790,900
America Rescue Plan Act 2,693,200 0 0 2,693,200 1,653,600 0 1,653,600 1,039,600
Public, Educational/Governmental Access 1,198,100 105,900 0 1,304,000 0 0 0 1,304,000
Parks & Recreation 2,858,200 960,700 0 3,818,900 0 0 0 3,818,900
Fire Facilities Fund 183,000 180,500 0 363,500 61,000 0 61,000 302,500
Used Oil Grant 4,400 8,000 0 12,400 16,000 0 16,000 (3,600)
DOC Beverage Grant 72,900 16,400 0 89,300 14,500 0 14,500 74,800
Traffic Safety 0 143,000 0 143,000 0 143,000 143,000 0
Solid Waste 2,119,600 778,600 0 2,898,200 525,700 300,000 825,700 2,072,500
Measure W ‐ Safe Clean Water Program 2,670,100 1,095,100 0 3,765,200 630,200 0 630,200 3,135,000
Dow Settlement Fund 5,869,900 176,100 0 6,046,000 0 0 0 6,046,000
State Gas Tax (327,300) 1,552,200 0 1,224,900 4,200 1,400,000 1,404,200 (179,300)
Road Maintenance/Rehabilitation Act 1,811,500 1,510,400 0 3,321,900 1,200,000 0 1,200,000 2,121,900
Air Quality Management District 186,300 79,400 0 265,700 22,600 0 22,600 243,100
Community Development Block Grant 0 398,900 0 398,900 370,100 0 370,100 28,800
Santa Anita Grade Separation 745,800 22,400 0 768,200 0 0 0 768,200
Transit 127,600 3,124,700 696,000 3,948,300 3,578,600 0 3,578,600 369,700
Proposition A 3,879,500 1,677,500 0 5,557,000 316,600 1,141,300 1,457,900 4,099,100
Transportation Impact Fund 426,600 312,800 0 739,400 550,000 0 550,000 189,400
Proposition C 4,205,300 1,421,100 0 5,626,400 1,012,300 0 1,012,300 4,614,100
TDA Article 3 Bikeway 65,900 59,000 0 124,900 0 0 0 124,900
STPL & ITS Special Fund 0 0 0 0 0 0 0 0
Measure R 2,168,100 1,036,200 0 3,204,300 378,400 760,900 1,139,300 2,065,000
Measure M 1,386,900 2,642,300 0 4,029,200 1,227,000 0 1,227,000 2,802,200
Capital Improvement 13,886,500 706,600 3,400,000 17,993,100 7,829,400 0 7,829,400 10,163,700
City Hall Reserve 100 0 0 100 0 0 0 100
Lighting Maintenance 317,600 1,345,000 765,000 2,427,600 1,432,000 0 1,432,000 995,600
Water Fund (7,262,200) 14,793,000 0 7,530,800 17,364,900 0 17,364,900 (9,834,100)
Sewer Fund 6,436,200 2,736,100 0 9,172,300 5,001,100 0 5,001,100 4,171,200
Par 3 Golf Course Fund 2,623,600 2,077,100 0 4,700,700 1,348,500 0 1,348,500 3,352,200
Equipment Replacement 17,337,500 520,100 3,400,000 21,257,600 7,072,400 35,500 7,107,900 14,149,700
Redevelopment Successor Agency (5,263,500) 2,668,300 0 (2,595,200) 2,668,300 0 2,668,300 (5,263,500)
General Obligation Bond 2012 469,900 424,100 0 894,000 411,800 0 411,800 482,200
General Obligation Bond 2011 350,400 520,700 0 871,100 530,100 0 530,100 341,000
Pension Obligation Bonds 2020 2,800 5,874,700 0 5,877,500 5,874,700 0 5,874,700 2,800
Total 111,554,700 138,473,900 29,638,200 279,666,800 157,993,900 15,336,500 173,330,400 106,336,400
USES OF FUNDSSOURCES OF FUNDS
CITY OF ARCADIA
SUMMARY BY FUND
FISCAL YEAR 2024-2025 PROPOSED BUDGET
ESTIMATED ESTIMATED PROPOSED ESTIMATED
FUNDS FIVE-YEAR FIVE-YEAR FUNDS
7/01/2024 REVENUE EXPENDITURE 6/30/2029
CAPITAL OUTLAY FUND 13,870,400 19,036,500 (32,092,900)814,000
AMERICAN RESCUE PLAN FUND 3,582,200 - (2,654,200)928,000
PARK AND RECREATION FUND 2,731,600 6,785,900 (2,103,300)7,414,200
FIRE FACILITIES FUND 123,400 947,900 (52,000)1,019,300
MEASURE W CLEAN, SAFE WATER PROGRAM 2,648,500 5,592,300 (3,986,400)4,254,400
GAS TAX (HUTA) FUND (327,300) 7,772,500 (7,021,000)424,200
ROAD MAINTENANCE AND REHABILITATION
PROGRAM 1,813,400 7,462,000 (7,200,000)2,075,400
AQMD 183,200 413,900 (113,400)483,700
PROP C LOCAL RETURN 4,191,200 6,706,300 (9,793,300)1,104,200
TRANSPORTATION IMPACT FUND 458,500 1,020,000 (1,508,800) (30,300)
MEASURE R LOCAL RETURN 2,161,000 5,017,600 (6,209,800)968,800
MEASURE M LOCAL RETURN 1,368,100 7,126,700 (7,006,000)1,488,800
WATER FACILITY RESERVE 12,474,800 738,300 (15,828,600) (2,615,500)
WATER EQUIPMENT RESERVE (649,100)- (3,631,500) (4,280,600)
SEWER FUND 6,119,700 13,413,900 (18,477,200)1,056,400
EQUIPMENT FUND 17,363,000 18,723,400 (28,131,600)7,954,800
SUMMARY OF PROPOSED FIVE YEAR CAPITAL PROGRAMS
FISCAL YEAR 2024-25 THROUGH 2028-29
CITY OF ARCADIA
Exhibit "B"
RESOLUTION NO. 7573
A RESO LUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, ADOPTING A BUDGET FOR FISCAL YEAR 2024-2025
AND APPROPRIATING THE AMOUNTS SPECIFIED THEREIN AS
EXPENDITURES FROM THE VARIOUS FUNDS
WHEREAS, on June 4, 2024, the City Manager submitted to the City Council a
proposed Budget for Fiscal Year 2024-2025, a copy of which is on file in the Office of the
City Clerk; and
WHEREAS, Section 1204 of the Arcadia City Charter requires notice and hearing
for consideration of a proposed operating budget and its adoption by resolution; and
WHEREAS, the aforementioned proposed Budget includes the budget for the
ensuing Fiscal Year 2024-2025; and
WHEREAS, notice of the public hearing on the proposed Budget and a summary
of the proposed Budget were published on May 23, 2024; and
WHEREAS, the duly noticed public hearing was conducted by the City Council on
June 4, 2024.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. That certain "City of Arcadia Budget, Fiscal Year 2024-2025", as on
file in the office of the City Clerk, together with any approved amendments thereto, is
hereby adopted, in pertinent part, as the official budget of the City of Arcadia for the Fiscal
Year 2024-2025 and the amounts specified therein as expenditures from the funds
indicated are hereby appropriated for the purposes specified therein.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
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