AGENDA TITLE:
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Adopt a Resolution Approving Final Budget Adjustments for Fiscal Year 2024 and Appropriating Funds ($1,866,140.13) (BUDGET)
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MEETING DATE:
February 19, 2025
PREPARED BY:
Jennelle Baker, Budget Manager
recommendation
RECOMMENDED ACTION:
Adopt a Resolution Approving Final Budget Adjustments for Fiscal Year 2024 (FY 24) and Appropriating Funds in the amount of $1,866,140.13.
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BACKGROUND INFORMATION:
The year-end closing process for each fiscal year typically takes several months to finalize all expenditures and journal postings. During the closing process for FY 24, it was discovered that additional budgeted appropriations were needed for Measure K, Streets, Property Insurance, and Electric Utility Capital Funds.
Public Works required an additional $385,396.90 in Measure K appropriations to close the Turner/99 Interchange project. The Turner/99 project utilized three grant funding sources: Senate Bill 1, Federal, and Measure K. On August 17, 2022 (Resolution 2022-204) Council approved the cooperative agreement between San Joaquin Council of Governments (SJCOG) and California Department of Transportation (Caltrans) in the project amount of $9,000,000 and then amended the cooperative agreement on August 17, 2022 (Item C-10) with the project breakdown and totals below:
On October 19, 2022 the project bids were brought to the Council and the construction project was awarded to O.C. Jones & Sons, Inc. with a total project cost of $7,500,000, including change orders. This initial bid represented a figure that was $2,000,000 under the estimated cost. When the contract was awarded the funds were appropriated as Senate Bill 1 at 60%, Federal at 24%, and Measure K at 16% as shown:
On March 20, 2023 Council approved the Public Works recommendation to adjust the distribution between the grant funding sources because the Senate Bill 1 grant funding was budgeted at 60%, and the maximum allowable was a 50% project match. The appropriation adjustment split the grant funding distribution Senate Bill 1 at 50%, Federal at 30% and Measure K at 20% and re-appropriating grant funds as follows:
At project completion, the actual allowable grant split was Federal 23%, Measure K 27%, and Senate Bill 1 at 50%. This final split left Measure K to cover a higher balance of the project total. The actual project breakdown is as follows:
The overall project came under budget by $408,376.76, however the split between Federal funding and Measure K changed due to grant allowable amounts. Due to the final grant percentage split, Public Works requested a Measure K appropriation at the end of the year of $385,396.90 to pay the remainder of the construction project and close the project. The Measure K funds are reimbursable under the grant.
Public Works required an interfund transfer of $275,000 from the General Fund to the Streets Fund. The new USA Waste of California, dba, Central Valley Waste Services (WM) contract adopted on August 16, 2023, included an increase to the Streets Maintenance Fee totaling $330,000 annually. The contract went into effect on September 1, 2023 resulting in a pro-rated amount for FY 2023-24 of $275,000 that the City received from WM. The budget adjustment increases the transfer of expenses for FY 2023-24 in the General Fund (100) by $275,000 and the transfers in revenue account in the Streets Fund (301) by an equal amount.
The Property Insurance Fund was established in Fiscal Year 2023-24 at budget adoption to differentiate revenue and expense for property insurance claims from general liability claims. As part of the original FY 2023-24 budget $750,000 was transferred from the General Liability Fund reserve to establish the Property Insurance Self-Insured Retention rate (SIR) reserve. Although the transfer into the Property Insurance fund was approved and completed as part of the original budget, an offsetting expense appropriation was required as an accounting function to transfer the funds from the operating fund into an SIR holding account (661-25551). It should be noted that the SIR for property insurance is $250,000 per claim. When the Budget and Fiscal Policy was updated and approved on June 20, 2024, funding the Property Insurance Fund was set at three times the SIR rate. This adjustment completes this policy requirement using FY 2023-24 approved funds.
The Electric Utility (EU) capital program includes several projects that are needs-based driven and annual budgets are created based on expected expenditure needs. The projects that require additional appropriations are difficult to predict in terms of final expenditures and EU cannot stop operations that involve maintaining or fixing infrastructure toward the end of the year. Based on the timelines to get to the Council, the end-of-year clean-up is the timeliest way to present these Capital needs to the Council. EU adjusts capital budget at mid-year based on best estimates, but end-of-year overages are often expected as a possibility to occur due to unknown contingency costs. For FY 2023-24, three projects were overspent due to an increase in service level demands, and increased system improvement / maintenance efforts that are associated with safety and reliability. These costs totaled $455,743.23 and were mostly offset by payments made by customers for the installation of electrical infrastructure, development impact fees, and reduced operating expenses. The projects in need of appropriations:
• Work for Others - $119,285.51 in appropriations for customer-requested electrical infrastructure improvements
• 1267/1247 Feeder Extension - $222,517.77 in appropriations for added conduit installation to accommodate forecasted load growth
• Henning Getaway Project - $113,939.95 in appropriations for the replacement of two undersized vaults
STRATEGIC VISION:
3A. Fiscal Health: Promote City's transparency & fiscal fluency.
FISCAL IMPACT:
FUNDING AVAILABLE:
Revenue and expenditure budget adjustments per Exhibit A.
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Bobby Magee
Interim Assistant City Manager
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Scott R. Carney
City Manager