1. City of Rialto Midyear Changes Budget-Fiscal Year 2013/2014
The mid-year review process is intended to address significant variances that are found and to make budget adjustment recommendations to Council. These recommendations are based on the results of staff analysis of revenues and expenditures for the first six months of the year, as well as, based on new information which was not available during the budget process.
Key elements in the budget process that keep the budget document useful include: 1) the initial development of estimated revenues and appropriations; 2) interim monitoring; 3) one-time adjustments (i.e. grants, projects); 4) mid-year review; and 5) necessary modifications of budget appropriations and estimated revenues.
Council Presentation – February 25, 2014

2. FY 13/14 General Fund Revenues

3. FY 13/14 General Fund Expenses

4. General Fund FY 13/14
Working Capital Revenue – Investment Earnings

5. Reserve Summary General Reserve Analysis Reserve Balance at 6/30/2013
Less - Non-spendable ($5M Receivable from Water Fund, $3.958M receivable from the Airport Advance, $111K Prepaid Expenses, 86K Inventory)
(9.1M)
Spendable Balance
$39.0M
Projected FY General Fund Deficit
(3.1M)
Projected FY Working Capital Fund Surplus
.1M
Projected 6/30/2014 Contingency Balance
$36.0M
50% Contingency Reserve Requirement
33.3M
Projected Available Fund Balance at 6/30/14
$2.7M

6. Midyear Adjustments – Special Revenue Funds
Special Revenue funds show a increase of $3.2M mostly due to Development Impact Fees being received.
Special Revenue funds project an increase in expenditures of $37K primarily due to a reduction in Housing Authority related expenses, offset by increases in Capital Budgets in the Waste Management and Measure I and Funds.
Fund balances from Special Revenue funds are restricted and can be spent only for the specific purposes stipulated by external resource providers such as grants and development impact fees funds. Restrictions for using these types of funds may be changed or lifted only with the consent of the resource providers.
Revenues:
Development Impact Fees – $2.9M from projects such as DCT, Panattoni and Prologis
Expenses:
Measure I - $130K – To align with 5 year CIP plan
Gas Tax – ($85K) – defer equipment purchase due to lack of staff to operate it
Waste Management - $265K – $25K community Garden - $250K Bud Bender Park rehab
Asset Forfeiture - $155K
Housing Authority – ($613K) – CIP budget correction
Net Increase - $37K

7. Midyear Adjustments – Enterprise Funds
RUA performance will be presented in a separate report by RWS, however this Mid-Year report includes proposed reimbursements towards the Water Fund’s outstanding Perchlorate Litigation Loans as follows:
$300K to the Waste Water Fund
$100K to the General Fund

8. Proposed Staffing Changes
Public Works
Replace 2 Vacant Part Time positions with an Engineering Technician – ($12,872) Savings
Development Services
Add 3 months budget for Administrative Assistant to replace retiring Executive Assistant - $14,219
Finance
Replace vacant Executive Assistant with Administrative Assistant – ($15,447) Savings
Fire Department
Replace vacant Office Specialist position with a Senior Office Specialist – ($1,230) Savings
Mandatory OT Calculation Correction - $110,357
Police Department
Add 2 Narcotics Officers - $53,840
Replace a Records Assistant II with a Lead Records Assistant – No Budget Impact
Replace 2 Emergency Dispatchers with 2 Lead Emergency Dispatchers – No Budget Impact

9. Additional Vacancies that will result in Savings this FY
Battalion Chief
Fire Prevention Specialist
Fire Captain
4 Firefighter Paramedic (2 Safer Grant)
5 Police Officers
2 Dispatcher Vacancies
Crime Analysis Assistant
Associate Civil Engineer
Recreation Supervisor
Total additions savings projected at $150-$200K

10. Future Budget Challenges
CalPERS recently implemented a rate increase and plan on a $1M increase in FY14/15 and an additional increase of $500K in FY 15/16
Capital Project neglect
Unfunded Liabilities
CalPERS recently changed their actuarial assumptions resulting in rate increases that took effect as of July They also announced additional increases in the future years. These increases were delayed in the last two fiscal years to provide time to agencies to prepare for the impact. It is estimated that the increase will be significant in Fiscal Year 2012/13.
Overtime costs in the Fire Department estimated overtime for the Fire Department is nearly $2.5 million.  With the current staffing levels and the continued use of the constant staffing model, the amount needed for overtime is expected to increase. However, if the City is awarded the SAFER grant that would help fund the positions of 8-9 Fire Fighter/Paramedic then overtime costs should reduce.
Over the past few years, the City has continued to cut the Capital Projects budget in order to support operations. Eventually resources will need to be expended to replace aging facilities and equipment, or even greater costs will be incurred with maintenance and repairs.
In addition to the General Fund losing $1.6M in annual Support from the General Fund as a result of the demise of the Redevelopment Agency on February 1, 2012, the City is also losing its ability to finance large capital and economic development projects.
Utility Tax Sunset in June 30,2013 – In 2008, the voters of Rialto extended the Utility Users Tax (UUT) until June This revenue represents $11.2M or 21% of the general fund total revenues. Staff recommends that Council elect to place the renewal of the Utility Users Tax on the March 2013 special election ballot. If the UUT is not extended before the June 2013 deadline the General Fund deficit will grow to nearly $20M or 1/3 of the General Fund expenditures and immediate corrective action will need to take place. The immediate action will include the reduction of staff and programs citywide

11. Recommendation
Consider Resolutions approving the 2013/14 Budget Adjustment for the City, Rialto Utility Authority and the Successor Agency formerly known as the Rialto Redevelopment Agency
Consider the Resolution approving new Job Descriptions