CC MIN 03012022 - Laserfiche WebLink

MOTION: It was m/s by Narum/Testa to approve the Consent Calendar as recommended and as noted. Motion passed by the following vote: Ayes: Councilmembers Arkin, Balch, Narum, Testa, Mayor Brown Noes: None Absent: None MEETING OPEN TO THE PUBLIC 12. Public Comment regarding items not listed on the agenda. Mayor Brown opened public comment. There being no speakers, public comment was closed. PUBLIC HEARINGS AND OTHER MATTERS 13. Adopt and waive full reading of Resolution No. 22-1279 accepting the midyear FY 2021/22 operating budget and amending the FY 2021/22 operating budget accordingly Finance Director Tina Olson presented the Mid-Year Operating Budget Report. She provided an overview of revised revenue estimates and recommended adjustments to expenditures and transfers with the goal to maintain a balanced budget and to ensure reserve levels are consistent with City policy. Director Olson reported a projected $5.3 million surplus and staff is recommending it be allocated to the Capital Improvement Program (CIP) reserve. The recommendation is based on expensive projects in the pipeline for which the City will need additional funding. She reported sales tax revenues are projected to be $2 million over budget and property tax looks to be as previously projected. Director Olson reported there has been a 51% increase in General Fund Revenues over the last 10 years and 9% since 2021 which shows the City is rebounding from the pandemic. She noted the 9% includes the $4.25 million American Rescue Plan Act (ARPA) funds. She reported property tax is trending upwards but starting to flatten out which is consistent with trends reported by the City's consultant. She reported sales tax has increased 25% since 2012 and 9% increase since 2021. She expressed concern regarding Transient Occupancy Tax (TOT) and Recreation revenue which have not rebounded to pre-pandemic levels. Director Olson provided an overview of General Fund Expenditures and reported the labor net was $1.3 million and the non-labor net was $0.9 million and provided expenditure details. She advised many contracts are increasing due to inflation. She noted the General Fund Contingency was reduced by $1.3 million which was moved into Salaries. She reported General Fund Reserves of $600,000 will be used to cover COVID expenses and allow $400,000 to remain for Covid expenses in the future. She advised the General Fund Reserves are 26% of the Operating Expenses so there is a healthy operating reserve. Director Olson provided an updated 10-Year General Fund Forecast. She advised CaIPERS provided the City with an updated annual contribution based on the large investment return they received last year and explained the assumption used to develop the forecast. The CaIPERS contributions will drop in FY 25/26 compared to what is projected and there will be a healthy General Fund Surplus by FY 30/31. Director Olson reported the Water Operations Fund is reporting a $3.2 million reduction in revenues due to drought conservation measures. She advised some of that will be offset by Zone 7's reduced City Council Minutes Page 3 of 12 March 1,2022