DATE: February 22, 2022
TO: Mayor and City Council
FROM: Director of Finance
SUBJECT
FY 2022 Mid-Year Budget: Adopt a Resolution Approving the FY 2022 Mid-Year Budget Update and Receiving the General Fund Long Range Financial Model Update
RECOMMENDATION
That the Council 1) reviews the FY 2022 Mid-Year budget and updated General Fund Long Range Financial Model Update; 2) adopts a resolution providing amendments to the previously adopted City of Hayward FY 2022 Operating Budget (Attachment II); and 3) adopts a resolution providing amendments to the previously adopted City of Hayward FY 2022 Capital Improvement Program Budget (Attachment III).
SUMMARY
This report presents the mid-year review of the FY 2022 Adopted Budget, and an update to the General Fund Long Range Financial Model (Model), presenting proposed changes and projected year-end results based on current trends and data. While staff considers the entire City budget in its mid-year review, this report focuses primarily on the General Fund.
Proposed FY 2022 mid-year expenditures net a total increase of $2.8 million in General Fund expenses. Of this amount, $1.5 million is related to previously authorized and approved appropriations, and proposed FY 2022 mid-year expenditure adjustments totaling a net increase of $1.3 million. The proposed FY 2022 mid-year expenditures are all one-time in nature. Table 1 and Table 2 below detail the key changes in General Fund expenditures related to previous Council authorized and approved appropriations, and proposed new FY 2022 mid-year requests:
Table 1: Previous Council Authorized and Approved Appropriations
|
Previous Council Approved Appropriation |
FY 2022 Impact ($) |
|
Employee Contract Terms - HAME, Local 21, SEIU |
$1,008,998 |
|
STEP Grant Appropriations |
$405,000 |
|
Transfer-Out to General Fund CIP Fund for General Plan Update |
$125,561 |
|
Hayward Literacy Council Reimbursement |
$14,285 |
|
Previous Council Approved Appropriations Subtotal |
$1,553,844 |
Table 2: Proposed New FY 2022 Mid-Year Requests
|
Mid-Year Request (NEW) |
FY 2022 Impact ($) |
|
No Mid-Year Personnel Requests |
$0 |
|
Personnel Expenses |
$0 |
|
Navigation Center appropriation reduction due to ARPA funding |
($1,000,000) |
|
Temp Staff needs due to HR Vacancies and Citywide Recruitment needs |
$82,000 |
|
Adjustment to reflect actual cost of executive and hard-to-fill recruitments |
$80,000 |
|
Implementation of HR Department Organizational Study |
$75,000 |
|
Contract Services for unanticipated Job Audits and Compensation Studies |
$45,000 |
|
Contract Legal Services for Employee Relations |
$30,000 |
|
Contract Consulting Services for Employee Relations |
$20,000 |
|
Miscellaneous Services for Employee Relations |
$10,000 |
|
Contract Legal Services for ADA and complex issue guidance |
$10,000 |
|
Matt Jimenez Center operational expenses no longer covered by HARD |
$50,000 |
|
Transfer-Out: Facilities Capital Fund - Parking Structure/HPD Repairs/Fire Admin Office |
$696,762 |
|
Transfer-Out: Fleet Management - Replace Damaged Fire Truck Ladder |
$650,000 |
|
Transfer-Out: Facilities Management - Additional Sanitation and Security Hours |
$424,863 |
|
Transfer-Out: IT Capital Fund - Technology Fees for EnerGov Implementation |
$91,598 |
|
Non-Personnel Expenses |
$1,265,223 |
|
Mid-Year Requests (NEW) Subtotal |
$1,265,223 |
|
|
|
|
TOTAL GENERAL FUND EXPENSES |
$2,819,067 |
General Fund revenues are expected to exceed the originally projected FY 2022 amount by $4.6 million. Changes in revenue projections are detailed in Table 3 of the report. Key changes in the General Fund revenues are as follows:
Table 3: General Fund Revenues
|
GENERAL FUND REVENUE ADJUSTMENTS |
FY 2022 IMPACT ($) |
|
Projected increase in Sales Tax above budgeted amount |
$1,000,000 |
|
Projected increase in Property Tax above budgeted amount |
$836,580 |
|
Projected increase in Real Property Transfer Tax above budgeted amount |
$2,500,000 |
|
Projected increase in Cannabis Tax above budgeted amount |
$267,746 |
|
Projected increase in In-House Parking Collection above budgeted amount |
$30,000 |
|
TOTAL GENERAL FUND REVENUES |
$4,634,326 |
If mid-year requests are approved as proposed, the FY 2022 Revised Budget would result in a projected shortfall, requiring the use of $4.3 million in General Fund Reserves for FY 2022. While FY 2022 is projected to end of the year using $4.3 million in General Fund Reserves, this is an improvement over what was projected at the time of adoption, which forecasted a use of $6.2 million in General Fund Reserves.
This report also provides an overall update to the City’s General Fund long-term outlooks. The Council Budget and Finance Committee reviewed this report on February 16, 2022 and recommended City Council approval.
ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution FY 2022 Operating Budget
Attachment IIA Exhibits A & B
Attachment III Resolution FY 2022 Capital Improvement Program Budget
Attachment IIIA Exhibits A & B
Attachment IV FY 2022 Mid-Year Operating Budget Adjustments Summary by Department
Attachment V General Fund Long Range Financial Model FY 2022 Mid-Year Update
Attachment VI Measure C 20-Year Financial Forecast Update