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Based on the Council's input and any needed refinements, staff will present the proposed capital budget and the CIP at the May 16 meeting. This report also includes a recommendation for the City's Work Plan for FY 2023/24 based upon the existing list of City Council priorities. The list is attached to the report (Attachment 4 - Recommended Work Plan for FY 2023/24). Please note that the $455,000 additional funding that is needed for the Utility Rate Study, Alternative Pesticide Management Treatment, ADA Transition Plan, Plan for Homelessness Reduction, and the Eastern Alameda County 2011 Human Services Needs Assessment will be included in the proposed budget. Of the $455,000, $325,000 is included in the preliminary General Fund budget, and the remaining $130,000 for a utility rate study will be included in the Water Fund budget. RECOMMENDATION • Review the Preliminary General Fund Budget projections for the upcoming budget cycle and provide feedback. • Review the Reserve Policy and provide feedback. • Provide input on the Four-Year Preliminary Capital Improvement Program. • Provide feedback regarding the City's Work Plan for FY 2023/24. FINANCIAL STATEMENT General Fund expenditures are projected at $150.9 million and $155.2 million for FY 2023/24 and FY 2024/25 respectively. Expenditures for the Capital Budget are projected at $32.3 million and $17.6 million for FY 2023/24 and FY 2024/25. The estimated costs for the four-year CIP are projected at $82.7 million. BACKGROUND For the 2023-25 budget development, the City expanded its community engagement efforts to create more opportunities for public input to provide the City Council with additional community input in advance of budget adoption. In addition to scheduled City Council meetings and workshops, the public is being provided with multiple opportunities to offer input, including surveys, community meetings, and in-person events. A budget landing page (pleasantonbudget.com) was developed to share information to help the public understand the City's budget process. Feedback from the community is being used for budget development and future budget planning. As preface to the budget development, it is important to note a few key changes that are defining this year's discussion regarding City finances. Among these are the elimination of American Rescue Plan Act (ARPA) funds that stabilized the previous two-year budget, while managing revenues that have not fully returned to pre-pandemic levels. Adding to this, when the investment markets declined last year, the City's unfunded accrued liability increased, and additional funding is needed to continue to meet previous commitments to CalPERS and to Other Post Employment Benefits. Also, the City is now developing a deeper understanding of the funding necessary to maintain existing infrastructure in a state of good repair. Based on these factors, City staff is diligently developing a budget that balances the community's interest in completing projects while meeting ongoing operating and maintenance needs. Page 2 of 9