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HomeMy WebLinkAbout _ 9.1(c)--2024-2025 Budget Discussion � � �' � � � � � � ' � �' � � ' � ` CITY OF REDDING REPORT TO THE CITY COUNCIL MEETING DATE: May 21,2024 FROM: Barry Tippin, City Manager ITEIVI NO. 9.1(c) ***APPROVED BY*** btippin@cityofredding.org "S' �p�an,�`i K i�r� � �,'[fi,'�Q2� btippin@cityofredding.org SUBJECT: 9.1(c)--Consider City of Redding budget reductions for Fiscal Year 2024-25. Recommendation Accept report and provide direction to staff relative to reducing the City of Redding's Fiscal Year 2024-25 Budget, in preparation for further adjustments in the development of the next biennial budget. Fiscal Impact There is no fiscal impact in accepting the report, however, any direction provided by the City Council (Council) could result in a decrease or cost reductions to the General Fund. Alte�native Action The Council could choose to not accept the report. Backg�ound/Analysis In fiscal year ending in 2022, tax revenues for the City of Redding (City) were very favorable. Between 2019 and 2022 there was an 1$.5 percent increase in sales tax, with steady growth occurring since 2012. Based on this information, revenue forecasts would indicate that additional public services could be offered to the community in the 2025-2027 timeframe. In May of 2021 and again in May of 2022, the City received distributions of American Rescue P1an Act (ARPA) funds totaling just over $18 million. Additionally, in Fiscal Year 2022-23, the City received $5 million in funding from the Federal Emergency Management Agency for adding 12 new firefighter positions, for a limited period. The Council had accepted this grant with the anticipation of completing Fire Station 9 and the additional staff would operate from that station. Report to Redding City Council May 16,Z024 Re: 9.1(c)--2024-2025 Budget Discussion Page 2 With the above noted funding, and the projected revenue growth, staff recommended and Council approved advanced filling of positions in the Police and Fire Departments as well as funding other important activities as noted in the attached staff report from February of 2022. Subsequent to these decisions, sales tax began declining and due to the compounding effects inherent in the 10-year plan, the costs associated with the added expenditures can no longer be absorbed. Some of the expenses were reduced with the adoption of the current budget, however, more reductions are needed to balance the 10-year plan. Fortunately, the City has a healthy reserve and that will allow some opportunity to more slowly introduce the cost reductions so as to avoid drastic and immediate service reductions and staff disruption. But, without question, service and staffing levels must be reduced to maintain a strong fiscal position for the City. Attached are a number of cost reduction proposals for the Council's consideration. Once direction is provided by the Council, staff wi11 perform the detailed administrative work necessary to effectuate the changes and return to the Council for final approval. Environmental Review This action is not a project as defined under the California Environmental Quality Act, and no further action is required. Council Prior�ity/City Manage� Goals • Budget and Financial Management — "Achieve balanced and stable 10-year Financial Plans for all funds." • Government of the 21st Century — `Be relevant and proactive to the opportunities and challenges of today's residents and workforce. Anticipate the future to make better decisions today." Attachments ^Previous Staff Report- Consider New GF Expenditures - RFD RPD ^Potential Budget Reductions &Potential ARPA � � �' � � � � � � ' � �' � � ' � ` CITY OF REDDING REPORT TO THE CITY COUNCIL MEETING DATE: February 17, 2022 FROM: Barry Tippin, City Manager ITEIVi NO. 3B ***APPROVED BY*** btippin@cityofredding.org "S' �p�an,�`i K i�r� � �>t[�1�����. btippin@cityofredding.org SUBJECT: 3B--Consider approval of new expenditures for the City of Redding General Fund. Recommendation Approve increase of City of Redding General Fund expenditures; and direct staff to prepare a budget resolution for future consideration as part of the mid-year budget update to appropriate the necessary funds. Fiscal Impact Should all of the items listed in the attached Recommendation for Increased Budget Expenditures report be approved, the impact to the General Fund will be approximately $500,000 for Fiscal Year ending 2022 and $6 million for Fiscal Year ending 2023. The balance of the items wi11 be incorporated as part of future budgets. Backg�ound/Analysis With the economic uncertainty created by the COVID 19 pandemic, the current adopted budget assumed modest growth in General Fund revenues. The reality is that revenues have outpaced the budgeted amounts significantly and there is expectation that moderate growth will continue after budget adjustments are made. These positive results have provided an opportunity to make some significant budget adjustments to improve the City of Redding's (City) service delivery. The attached recommendations contain numerous items to be funded over the next six years with brief descriptions for each funding request. The information below provides a more detailed description of each request. POLICE DEPARTMENT ($1.5 MILLION/YEAR; $9 MILLION 6-YEAR TOTAL) For the Police Department, the budget change, in combination with the recommendations for the American Rescue Plan Act of 2021 funding, would allow for the hiring of nine new Officers. Report to Redding City Council February 14,2022 Re: 3B--Consider approval of new General Fund expenditures Page 2 Four of the Officers would be dedicated to the City Parks, Trails, and Open spaces and five would be used to re-create an eighth patrol beat. This change will increase opportunities for proactive policing, re-prioritize patrol time for Officers assigned to the Neighborhood Police Unit, work to reduce response times to calls for service, and allow for more initiatives as sought by the community. This change wi11 increase the number of sworn Officers on staff to 119, returning the department to 1evels the City had in 2008. In addition, the department intends to hire an Executive Assistant for Command Staff, who wi11 also assist with coordinating �raining with the Shield Training Center and support additional staff to research and respond to Public Records Act requests as required by State Law— SB 1421 & SB 16. The budget changes would allow for the process to begin the implementation of a Body Worn Camera Program; this would bring RPD into uniformity with comparable cities of similar size to Redding. Other funding would be used to replace and upgrade the various firearms used by RPD as we11 as increase funding for vehicle purchases and replacements, all of which serve to improve safety for Redding Police Officers and the community. FIRE DEPARTMENT ($2.2 MILLION/YEAR; $13.2 MILLION 6-YEAR TOTAL) For the Fire Department, the budget recommendations will continue the commitment of the City Council (Council} to improve the capabilities of the Redding Fire Department. If approved, and the SAFER Grant is received, these changes will support increased staffing for a new Station 9, which will significantly help reduce call volume to other stations and improve response times for fire suppression and medical emergencies. Other key funding recommendations will support equipment replacement, better align rolling stock budgets with apparatus needs, and assist with processing new developments and public outreach. DEBT SERVICE ($0.6 MILLION/YEAR; $3.6 MILLION 6-YEAR TOTAL) A key colnponent of the public safety recommendation is for the Council to decide that a bond issuance is required in order to build, rebuild, or reconstruct the City's fire stations. As the Council is aware, there is significant deferred maintenance with the existing fire stations. Addressing this need, combined with a new Station 9 will likely cost at least $25 million. The only feasible way to address the high capital cost is through a bond which also ensures future residents, who will benefit from the stations, will assist with funding the construction. Lacking the bond, staff recommends that the Council direct staff to return at a later date with a different expenditure plan for the current budget surplus. An effective way to offset the cost of this bond debt is to forgive the loan from the Redding Electric Utility (REU) to the General Fund which was used to pay for a portion of the replacement of soccer fields. The community benefits more from the loan forgiveness than repayment. With repayment, REU would receive approximately $350,000 per year which represents about 0.23 percent of its revenue. Repayment would not reduce rates, affect bond ratings or any other financial metric. In fact, an annual payment of$350,000 is the appro�mate cost of a single day of operation for REU. Contrarily, $350,000 in the General Fund will fully fund two police officers along with a11 of their equipment for an entire year. The material impact of funding Station 9, and making improvements to other existing stations, is the added protection this offers businesses and residents which could also result in a better Insurance Services Office fire rating, perhaps better options for insurance coverage, and possibly lower insurance rates, as well. Report to Redding City Council February 14,2022 Re: 3B--Consider approval of new General Fund expenditures Page 3 CITY 1VIANAGER($96,0001YEAR; $575,000 6-YEAR TOTAL) The downtown redevelopment is occurring at lightning speed. With the redevelopment, two additional discussions are taking place; one regarding parking and one regarding the creation of a property/business improvement district(PBID). A City contribution of an initial $200,000 would help maintain the public assets while the PBID is in the formation stage. The Economic Development Corporation (EDC) is focused on growing, diversifying and maintaining a balanced economy, thereby leading to more economic stability and sustainability for our region. The EDC is responsible for retaining and expanding the primary industry base in Shasta County with a focus on economic development and competitive vitality. The City currently provides $86,000 per year to the EDC, and an additional $75,000 per year would allow for the EDC to hire additional staff which would provide more benefit to our community. COMMUNITY SERVICES ($390,OOO/YEAR; $2.3 MILLION 6-YEAR TOTAL) The Community Services Department has a broad role and responsibility for the City. Most of the department is funded by the General Fund and augmented by grants and donations. Key responsibilities include maintaining the City's building facilities and its parks and trails. The department, like many in the General Fund, has been understaffed for years. This budget surplus provides the opportunity to add staff resources and funding to continue to maintain the facilities. This request is for one Building & Facilities Mechanic II and one Gardener. Additionally, $300,000 is requested to repair the Council Chamber roof and $250,000 per year is requested to begin proactive repair work on City facilities. Lastly, the Nur Pon open space needs security enhancements. In partnership with Dignity Health, $60,000 will be used toward funding the installation of perimeter fencing. DEVELOPMENT SERVICES (5100,000/YEAR; $640,000 6-YEAR TOTAL) The Development Services Department is responsible for facilitating development in our community. This includes new construction as well as remodeling, upgrades, and replacement of private infrastructure. During the Great Recession, staffing in Development Services was reduced as the demand for services dwindled. As development activity has increased, adding staff has been slow and deliberate. Even this request is less than what is needed to handle the current workload, but it will certainly help. The department makes use of consultant help and improved technology to increase production and efficiency, but additional staffing is needed to improve turn-around time for projects. PUBLIC WORKS ($112,000/YEAR; $670,000 6-YEAR TOTAL) The Public Works Department is a large and diverse entity. Most of the divisions within the Publie Works Department are Enterprise Funds and/or have funding sources other than the General Fund. Two needs, however, have been identified that require General Fund contributions. First, is a Mechanic II. As the City's fleet of vehicles grows, so does the need to properly staff the Fleet Division. One additional mechanic will assist in reducing the vehicle maintenance baeklog, im�prove the timeliness of required inspections, and reduce downtime of key equipment. Report to Redding City Council February 14,2022 Re: 3B--Consider approval of new General Fund expenditures Page 4 The Airport continues to grow and gain momentum in the acquisition of new air service. To keep up with service level expectations and to position the Airport for future grant opportunities, it is recommended that the General Fund assist the Airport by providing $1.23 million as noted on the attached document; $650,000 of which should be reimbursed by future Federal Aviation Administration Grants. Staff is recommending that the General Fund Reserve remain above 14 percent for this budget adjustment. The required reserve by Council Policy, is 10 percent and this additional capacity in the General Fund will a11ow for future adjustments during normal budget processes. Additionally, the recommended changes represent a significant workload for staff and there is not much room to accomplish more prior to the next budget adoption. Though the items included in this request are substantive, these requests do not provide for all the services the community needs and deserves. This is simply due to funding. The City is large and sparsely populated when compared to other similarly sized communities, which increases the cost per capita to serve residents. Chico for example, has a population of 95,000 people across 34.5 square miles compared to the City of Redding at 95,000 people over 62 square miles. Below is a brief summary of what additional needs could be funded with additional revenue: POLICE DEPARTMENT ($4.5 million) • Five Officers for Beat No. 9 $850,000 annually • Seven Detectives (2 nighttime and others to resolve backlog) $L5 million annually • Other Nlisc. Administrative Staff and Equipment $'750,000 annually • County Assistance for Mental Health and Criminal Detention $1.5 million annually FIRE DEPARTMENT ($4.9 million annually) • Fire Station No. 10 Staffing $2 million annually • Additional Rolling Stock $1 million annually • Dedicated Fire Dispatcher $900,000 annually • Paramedics at Key Fire Stations $2 million annually • Fire Resiliency Programs $1 million annually PUBLIC WORKS ($4 million annually) • Airport Division-non-aeronautic ilnprovements $500,000 annually • Storm Drain Utility-enhanced maintenance $1 million annually • Streets Division-road maintenance $4 million annually COMMUNITY SERVICES ($3 miliion annually) • Enhanced Building Maintenance $1.5 million annually • Enhanced Park Maintenance $1.5 million annually GENERAL IMPROVEMENTS/ENHANCEMENTS ($3 million annually) COMMUNITY ENHANCEMENTS-Over Time • Airport Terminal Acceleration $10 million • Fire Station No. 10 $7.5 million • New Amphitheater $1 million • Additional Trails and Parks $5 million • Park Marina and Civic Improvements $50 million Report to Redding City Council February 14,2022 Re: 3B--Consider approval of new General Fund expenditures Page 5 • Additional Overcrossing of I-5 $10 million Council P�^iority/City ManageN Goals • Budget and Financial Management — "Achieve balanced and stable 10-year Financial Plans for al] funds." • Public Safety — "Work to improve a11 aspects of public safety to help people feel secure and safe where they live, work, and play in the City of Redding." • Communication and Transparency — "Improve the quality of communication with the public and City employees to enhance knowledge and increase transparency to improve public trust." • Government of the 21St Century — "Be relevant and proactive to the opportunities and challenges of today's residents and workforce. Anticipate the future to make better decisions today." • Economic Development — "Facilitate and become a catalyst for economic development in Redding to create jobs, retain current businesses and attract new ones, and encourage investment in the community Attachments Recommendation for Increased General Fund Expenditures Proposed Savin�s Item Total Cost GF% Total Savin�s Fiscal Year Assistant City Clerk-City Clerk Office (Net of PERS UAL& PARS Savings} $ 150,000.00 62% $ 93,000.00 2024-25 Assistant City Attorney/or Stop Payment for Misdemeanor Prosecution $ 190,000.00 40% $ 76,000.00 2024-25 Finance $ 90,000.00 50% $ 45,000.00 2024-25 Building Inspector $ 120,000.00 100% $ 120,000.00 2024-25 Principal Planner $ 170,000.00 100% $ 170,000.00 2024-25 Retirement do not backfil) - Reprographics Tech II $ 83,000.00 36% $ 29,880.00 2024-25 General Fund 0&M Reduction including SHASCOM $ 550,000.00 100% $ 550,000.00 2024-25 Internal Service Fund O&M $ 652,310.00 35% $ 228,308.50 2024-25 9 Police Officer Position Attrition $ 1,629,873.00 100% $ 1,629,873.00 2025-26 12 Firefighter Position Attrition $ 1,506,689.00 100% $ 1,506,689.00 2025-26 Total $ 4,448,750.50 Unfunded Bud�et Items for Potential ARPA Reallocation Item Bud�et Required Microsoft Office 365-General Fund Cost $ 200,000 Sidewalk Repair and Maintenance $ 500,000 Tiger Field Scoreboard $ 100,000 Total Currently Identified $ 800,000