TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, ICMA-CM, City Manager
FROM: Jeffery Yates, Assistant City Manager
Kimberly Leonard, CLGBO, CLGFO, CPA, MPA, Budget & Evaluation Director
Jody Picarella, CPA, Chief Financial Officer
DATE: May 6, 2024
RE:
Title
FY 2024 Financial Update
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal V : Financially Sound City Providing Exemplary City Services.
Executive Summary:
The presentation and discussion focus on the City’s financial performance through March 31, 2024. Included is a review of vacancies as of April 29, 2024, and a projection to the end of FY 2024
Background:
During the City Council’s April work session, a financial update was provided that included data through the end of December 2023. At that time, the report referred to this work session. Staff has updated and provided additional information for the work session.
Issues/Analysis:
Several key takeaways emerge when the various reports are analyzed as a landscape. No single piece of information provides a complete picture, but when taken together, we can get a high-level picture of the City’s financial condition and health.
The reports are attached for a detailed review, and we welcome any follow-up questions for clarity or explanation. The included reports offer three key takeaways:
1. The City’s financial health is strong. As of June 30, 2023, the fund balance analysis indicates that the City maintains a fund balance above its policy goal. The policy goal is an unassigned fund balance of $25.2 million, and the unaudited unassigned fund balance is $28.2 million. We anticipate completing the projected FY 2024 results in time to provide an update when the presentation is provided.
2. The General Fund is performing as anticipated. The revenues and expenditures are in alignment with historical trends. Revenues, particularly Ad Valorem and Intergovernmental (sales taxes), are behaving as anticipated. The three expenditure types that most reflect operations-personnel services, operating expenditures, and contract services-are aligned with historical trends.
3. Vacancies continue to be both a positive and a risk. The positive trend is that, given our experience through March (19 pay periods), we estimate a savings of at least $10.6 million (excluding health insurance). With the remaining seven pay periods, we estimate additional savings of about $1.5 million from vacancies. This is about 61.1 percent of the $19.8 million total efficiency goal.
The risk related to vacancies comes from the lack of staffing. As of April 29, there were 213 (12.8 percent) vacant positions in the City. This includes 70 (17.9 percent) sworn Police Officers and 28 (8.2 percent) Firefighters. In addition, the City’s 911 Communications group included 16 (23.3 percent) vacant positions. These three groups comprise 53.5 percent of the City’s vacant positions.
The challenge with filling both Police and Fire positions is the recruitment cycle. While the City consistently recruits for positions, academies are only held two to three times a year. Because of this, we can anticipate seeing higher vacancies until a recruiting class begins and then a precipitous drop in vacancies. The risk comes when the academy's capacity is insufficient to keep pace with natural attrition. For Fire, we believe largely that the vacancies will be resolved through the academies; with the Police and the competitive environment for officers, the City will have to consider alternative strategies for service delivery and benefits. Both will be discussed in more detail during the upcoming budget process.
These three components represent significant takeaways from the information provided.
Budget Impact:
N/A
Options:
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Recommended Action:
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Attachments:
Cover Memo
Budget Report
Staffing Report