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2024-06-12 Item 08Q FY25 Operating and Capital Budget AdoptionAGENDA REPORT City Council MEETING DATE: June 12, 2024 PREPARED BY: Kelly Sanderson, Finance Manager DEPARTMENT DIRECTOR: Teresa S. McBroome DEPARTMENT: Finance CITY MANAGER: Pamela Antil SUBJECT: Approval of FY 2024-25 Operating Budget and FY 2024-25 to FY 2028-29 Capital Improvement Program (CIP) and Financial Plan; Adoption of Resolution 2024-65, Approving Operating and CIP Appropriations for FY 2024-25; Adoption of Resolution 2024-66, Determining the Appropriations Limit for FY 2024-25; and Adoption of Resolution 2024-67, Approving Position Titles and Pay Ranges for FY 2024-25 RECOMMENDATION: Staff recommends City Council take the following actions: 1.Adopt Resolution No. 2024-65 titled, “A Resolution of the City Council of the City of Encinitas, California, Adopting the Fiscal Year 2024-25 Operating Budget and Capital Improvement Program Appropriations” (Attachment 1). 2.Adopt Resolution No. 2024-66 titled, “A Resolution of the City Council of the City of Encinitas, California, Determining and Adopting the Appropriations Limit for Fiscal Year 2024-25 in Accordance with Article XIII-B of the Constitution of the State of California” (Attachment 2). 3.Adopt Resolution No. 2024-67 titled, “A Resolution of the City Council of the City of Encinitas, California, Approving Titles and Pay Ranges for the City of Encinitas for Fiscal Year 2024-25” (Attachment 3). ENVIRONMENTAL CONSIDERATIONS: The action being considered by the City Council is exempt from the California Environmental Quality Act (CEQA) because it is not a “project” under Section 15378(b)(5) of CEQA Guidelines. The action involves an organizational or administrative activity of government that will not result in the direct or indirect physical change in the environment. 2024-06-12 Item #08Q Page 1 of 87 This item is not related to the Climate Action Plan. STRATEGIC PLAN: This item falls within the Effective City Services & Reliable Infrastructure focus area of the Strategic Plan by providing services consistently, timely, and predictably and planning and executing infrastructure investments in a fiscally responsible manner. FISCAL CONSIDERATIONS: The proposed FY 2024-25 Operating Budget is balanced, and all policy-directed reserves are fully funded. All Funds The proposed operating budget reflects a total City budget of $135.1 million in revenue that funds $131.9 million in expenses. FY 2024-25 capital and work project appropriations total $13.6 million. The CIP plan through FY 2028-29 programs $58.0 million in capital improvement and work projects over the next five years. Of this, the General Fund is planned to contribute $11.4 million, or 20 percent of total funding. General Fund The General Fund operating budget is $107.5 million in revenue that funds $100.1 million in expenditures. Debt service transfers total $5.5 million, and General Fund transfers to capital improvement and work projects total $4.1 million. The City has an established financial policy regarding maintaining adequate financial reserves. The General Fund contingency reserve is fully funded at 20 percent of operating expenditures ($20.0 million). The budget stabilization reserve is fully funded at two percent of revenue ($2.2 million). With approval of the Proposed Budget, the FY 2024-25 General Fund unassigned ending fund balance is projected to be $0.6 million on June 30, 2025. Changes Made After Budget Introduction At the Budget Introduction on May 15, 2024, City Council directed two changes to the proposed budget. Operating Budget 1. Allocate $50,000 for the Fire Station #6 assistance to identify a permanent location and to determine appropriate equipment including a type 1 Fire Engine. The proposed operating budget includes a one-time $0.05 million increase in Fire Operations contracts and services. Capital Improvement Program (CIP) / Work Projects 2. Allocate $150,000 towards the development of a simplified Native Plant Ordinance (Revised Project Scope) with the use of a consultant. The proposed capital budget includes a one-time $0.15 million increase for a new Native Plant Ordinance - Revised Scope (WC25C) work project. 2024-06-12 Item #08Q Page 2 of 87 Transfers The operating budget also includes a $0.15 million increase General Fund capital transfers-out and the related transfer-in to the Capital/Work Project fund (402) to fund the new Native Plant Ordinance - Revised Scope (WC25C) work project. Fund Balance At the Budget Introduction on May 15, 2024, the unassigned General Fund balance was projected to be $0.8 million at the end of the current FY 2023-24 and proposed FY 2024-25. City Council’s direction to increase expenditures $0.2 million reduces the projected General Fund unassigned ending fund balance to $0.6 million. BACKGROUND: The City of Encinitas fiscal year starts July 1 and ends June 30. Fiscal Year 2025 is displayed as FY 2024-25 because it crosses calendar years. Legal Authorization A public agency may not spend public funds without legal authorization from the governing body. The budget is a financial plan that estimates revenues and appropriates expenditures in specified amounts for various purposes. Because current fiscal year appropriations lapse on June 30, City Council must approve the operating budget to authorize spending authority prior to the beginning of the new fiscal year on July 1, 2024. This report proposes the final FY 2024-25 operating and capital budgets for adoption on June 12, 2024. Appropriations Limit (Gann Limit) The City must annually establish its appropriations limit pertaining to the proceeds from taxes in compliance with Article XIIIB of the California Constitution and Cal. Government Code Sec 7910. This report proposes the FY 2024-25 appropriations limit for adoption on June 12, 2024. Position Titles and Pay Ranges The City is required by CalPERS to maintain an approved, publicly available pay schedule that identifies all positions and salary ranges. This is accomplished by adopting a resolution approving position titles and pay ranges annually. This report proposes FY 2024-25 position titles and pay ranges for adoption on June 12, 2024, to be effective July 1, 2024. Long-Range Financial Planning The operating budget includes the proposed revenue and expenditure plan for each department over the next fiscal year. The five-year financial plan and Capital Improvement Program (CIP) is a long-term plan developed to demonstrate fiscal sustainability and to plan for the construction and replacement of infrastructure and other capital assets. Strategic Planning Framework Each year, the City Council reviews its priorities for the year at its annual City Council Retreat. A City Council priority is defined as a topic that will receive significant attention and budget consideration during the year. Typically, priorities have a one to three-year time limit, although some may continue beyond that time. On Tuesday, February 6, 2024, the City Council selected the following focus areas to include as the categories for its highest priorities:  Effective City Services & Reliable Infrastructure  Housing & Affordability  Engagement & Education 2024-06-12 Item #08Q Page 3 of 87  Ensuring & Preserving Community Character  Environmental Health & Leadership  Mobility & Alternate Modes. City Council Goals:  100% affordable housing (choose site, define project, explore funding options)  Prioritize remaining streetscape elements (complete C, Stormwater, B, A South)  Safe, legal railroad crossings and establish citywide quiet zones  Expand habitat stewardship and explore open space preservation (identify resources to fund and better manage our natural resources)  Consider Infrastructure Task Force prioritization and funding recommendations  Build on the bike safety emergency declaration goals and implement Vision Zero Focus area descriptions, accomplishments, and retreat materials are available on the City website: https://www.encinitasca.gov/government/annual-reports/2024-25-strategic-planning-framework Public Involvement On November 16, 2022, City Council directed staff to proceed with the formation of a one-year community task force to evaluate the City’s infrastructure (roads, bridges, facilities, etc.) backlog, prioritization, and anticipated financial needs and opportunities for funding for future infrastructure. The Infrastructure Task Force (ITF) was comprised of seven members of the community, by appointment of the City Council, from a variety of backgrounds, with interest and experience in Capital Infrastructure Projects. This group advised City Council and worked with the City Engineer and City staff to meet the goals and objectives of the Task Force. The work of the ITF has concluded, and the Final Report was presented to City Council on February 28, 2024. At that meeting, City Council approved outreach and possible ballot writing services for a potential one-cent local transactions and use (sales) tax measure. No additional revenues were projected in the FY 2024-25 budget introduction, given the unknowns of whether voters will decide to implement the tax. During a special City Council meeting on March 20, 2024, Q3 Consulting presented their Leucadia Area Watershed Drainage Feasibility Study which was completed in December 2022. The study modeled existing flooding in three subareas and provided the recommendations to address a 100- year storm. Budget Workshops, offering opportunities for the public to provide input on budget priorities, were held at special City Council meetings on March 27 and April 17, 2024. During the workshops, staff presented the five-year financial forecast for the General Fund, and City Council provided direction on the City's Capital Improvement Program including prioritization and project funding. On May 15, 2024, staff introduced the proposed FY 2024-25 operating budget and CIP for review, public input, and City Council direction. Staff has incorporated two changes directed by City Council into the operating and capital budgets proposed for adoption. On May 22, 2024, City Council approved Resolution 2024-60 ordering the submission to the qualified electors of the City of a ballot measure relating to a one-cent per dollar transactions and use (sales) tax, requesting that the San Diego Board of Supervisors authorize the County of San 2024-06-12 Item #08Q Page 4 of 87 Diego Registrar of Voters to render specified services to the City of Encinitas relating to the conduct of the election, and directing the City Attorney to prepare an impartial analysis. No additional revenues are projected in the FY 2024-25 budget proposed for adoption, given the unknowns of whether voters will decide to implement the tax. On June 12, 2024, this report recommends adoption of the proposed operating and capital budgets via resolution. ANALYSIS: The FY 2024-25 Budget reflects City Council’s priorities to provide critical services to the community and to fund needed capital improvement projects. Budget Adoption Proposed Resolution 2024-65 (Attachment 1) establishes the FY 2024-25 Operating and Capital Improvement Program budget appropriations and authorizes the related expenditures in accordance with the ordinances and policies of the City of Encinitas. Operating Budget The operating and capital improvement program budgets proposed for adoption reflect direction City Council provided at the Special budget workshop meetings and the Budget Introduction. Related presentations and agenda items are available on the City website: https://www.encinitasca.gov/government/departments/finance/city-budgets The Fund Balance Analysis (Attachment 1 Exhibit A) for all funds projects beginning fund balance, revenues, operating expenditures, and transfers for operations, debt service, and capital projects. This schedule is used to ensure policy directed reserves can be met; identify timing issues related to grant reimbursements; and determine interfund transfers. The General Fund Projected Budgetary Fund Balance (Attachment 1 Exhibit B) includes the audited General Fund balance for the prior fiscal year ended June 30, 2023. Appropriations approved by the City Council during FY 2023-24 are deducted from the unassigned fund balance to project the budgetary fund balance available for appropriation. If City Council approves the FY 2024-25 operating and capital budget as proposed, the unassigned General Fund balance is projected at $0.6 million on June 30, 2025. The General Fund Summary of Revenue, Expenditures, and Transfers (Attachment 1 Exhibit C) shows prior year actuals, current year budget, and the proposed budget. Interfund operating and debt service transfers are also detailed here. Internal Service Funds – Vehicle Replacement Program (Attachment 1 Exhibit D) authorizes Public Works to purchase the specified replacement vehicles, without further action of the City Council, per the Vehicle Usage and Replacement Program Administrative Policy (F017) approved January 2001 by the City Council. Any purchases that are not included in the original budget listed here (additions, early replacements, transfers, etc.), require the approval of City Council. Although fire apparatus replacement expenses totaling $3.5 million are included in the proposed budget, potential lease revenue is not budgeted until financing is requested and approved by City Council. No increases to the number of vehicles in the City fleet are proposed. 2024-06-12 Item #08Q Page 5 of 87 Capital Budget The Five-Year Capital Improvement Program - FY 2024-25 through FY 2028-29 Plan has been updated based on direction City Council provided at the Special budget workshop meetings and the Budget Introduction. Proposed capital and work project funding is presented by project type (Attachment 1 Exhibit E) and funding source (Attachment 1 Exhibit F). The proposed capital budget appropriates funds for FY 2024-25 only. Projects shown in future years are programmed into the CIP plan and are not funded until each subsequent budget adoption. These schedules reflect the list of projects presented to City Council during the Budget Introduction, along with the one-time $0.15 million increase in for Native Plant Ordinance - Revised Scope (WC25C) work project added on May 15, 2024. For specific project funding directed by City Council in FY 2024-25 budget meetings, see the following pages: Title Project Attach 1E By Type Attach 1F By Fund Amount ADA Curb Ramp CS16C Page 1 Page 1 $ 50,000 ECR/Santa Fe Protected Intersection *new project CS25B Page 1 Page 1 800,000 Encinitas Habitat Stewardship Program WC11A Page 2 Page 1 100,000 General Mobility Improvements CS18E Page 1 Page 1 300,000 N101 Drainage Improvements *extend design to Grandview CD23A Page 1 Page 1 1,800,000 Native Plant Demo Garden & Education *new project WC25B Page 2 Page 1 150,000 Native Plant Ordinance *new project WC25C Page 2 Page 1 150,000 Orpheus/Paul Ecke Central Bike Project *new project CS25C Page 1 Page 1 60,000 Safe Routes to School CS01E Page 1 Page 1 200,000 Schedule of Annual Appropriations Limit (Gann Limit) Proposed Resolution No. 2024-66 (Attachment 2 Exhibit A) calculates the FY 2024-25 appropriations limit at $152,864,456 and demonstrates that the City’s appropriations subject to limitation are well below the approved appropriations limit. Prior to each fiscal year, City Council is required to adopt by resolution the Appropriations Limit (otherwise known as the Gann Limit) for the upcoming fiscal year. The appropriation limitation imposed by Proposition 4 and modified by Proposition 111 creates a restriction on the amount of revenue which can be appropriated in any fiscal year. The revenues which are subject to the limitation are those considered “proceeds of taxes.” The basis for calculating the limit began in fiscal year 1978-79 and is adjusted annually based on population and inflation growth factors. During any fiscal year, the city may not appropriate any proceeds of taxes it receives in excess of its established limit. 2024-06-12 Item #08Q Page 6 of 87 Commencing with the state’s 2021-22 fiscal year, Government Code section 7903 requires local governments to include specified state subventions — unrestricted money received by a local agency from the state — within local appropriations limits when capacity exists. If including the full value of subventions would cause a local government to exceed local appropriations limits, the State will count those amounts at the state level instead. The California Department of Finance allocated $0.7 million of subventions to the City of Encinitas for FY 2024-25. The full value has been included in Proceeds of Taxes used to determine the City’s appropriations subject to limitation. Position Titles and Pay Ranges The City is required by CalPERS to maintain an approved, publicly available pay schedule that identifies all positions and salary ranges. Proposed Resolution No. 2024-67 (Attachment 3) identifies all position titles and pay ranges for the City of Encinitas for FY 2024-25. Scheduled advancements and reclassifications needed to support enhanced services and continuity of operations are included in the FY 2024-25 personnel budget. The City’s employee count totaled 248.40 FTE on July 1, 2023. A new Homeless Services Coordinator position was approved midyear on February 28, 2022, bringing the FY 2023-24 total to 249.40 FTE (excluding San Dieguito Water District personnel). No increases to the number of City employees are proposed. Other Engineering CIP Projects by Status (Attachment 4) provides additional information regarding completed phases and funding needs for priority projects managed by the Engineering Department. Excerpts from the draft online budget book (Attachment 5) provide additional information on the proposed operating and capital budgets. ATTACHMENTS: 1. Resolution No. 2024-65 titled, “A Resolution of the City Council of the City of Encinitas, California, Adopting the Fiscal Year 2024-25 Operating Budget and Capital Improvement Program Appropriations” A. All Funds - Fund Balance Analysis B. General Fund - Projected Budgetary Fund Balance C. General Fund - Summary of Revenue, Expenditures, and Transfers D. Internal Service Funds - Vehicle Replacement Program E. CIP Plan FY 2024-25 through FY 2028-29 – by Type F. CIP Plan FY 2024-25 through FY 2028-29 – by Fund 2. Resolution No. 2024-66 titled, “A Resolution of the City Council of the City of Encinitas, California, Determining and Adopting the Appropriations Limit for Fiscal Year 2024-25 in Accordance with Article XIII-B of the Constitution of the State of California” 2024-06-12 Item #08Q Page 7 of 87 3. Resolution No. 2024-67 titled, “A Resolution of the City Council of the City of Encinitas, California, Approving Titles and Pay Ranges for the City of Encinitas for Fiscal Year 2024- 25” 4. Engineering Capital Projects by Status (updated May 31, 2024) 5. Draft Online Budget Book – Financial Summaries, Capital and Debt A. Budget in Brief B. Consolidated Financial Schedule C. Revenues D. Expenditures E. Transfers F. Long-Range Operating Financial Plans G. Capital Program H. Debt 2024-06-12 Item #08Q Page 8 of 87 ATTACHMENT 1 RESOLUTION NO. 2024-65 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ENCINITAS, CALIFORNIA, ADOPTING THE FISCAL YEAR 2024-25 OPERATING BUDGET AND CAPITAL IMPROVEMENT PROGRAM APPROPRIATIONS WHEREAS, each year the City Council of the City of Encinitas adopts an Operating Budget for revenues and expenditures for the City of Encinitas for the upcoming year; and WHEREAS, each year the City Council adopts a Capital Improvement Program with project appropriations for the upcoming year; and WHEREAS, the City Council desires to make provision for a level of service commensurate with the needs of the City; and WHEREAS, the City Council has reviewed the proposed Fiscal Year 2024-25 Operating Budget. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Encinitas that the annual operating budget and Capital Improvement Program budget appropriations for Fiscal Year 2024-25 as contained in Exhibits A through F to this resolution are hereby adopted. NOW, THEREFORE, BE IT FURTHER RESOLVED that this action is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15378(b)(5) of the CEQA Guidelines, as an organizational or administrative activity of government that will not result in a direct or indirect physical change in the environment. PASSED, APPROVED AND ADOPTED this 12th day of June 2024 by the City Council of the City of Encinitas, State of California. ____________________________ Tony Kranz, Mayor ATTEST: ______________________________ Kathy Hollywood, City Clerk APPROVED AS TO FORM: _____________________________ Tarquin Preziosi, City Attorney 2024-06-12 Item #08Q Page 9 of 87 ATTACHMENT 1 CERTIFICATION: I, Kathy Hollywood, City Clerk of the City of Encinitas, California, do hereby certify under penalty of perjury that the foregoing Resolution was duly adopted at a regular meeting of the City Council on the 12th day of June 2024 by the following vote: AYES: NOES: ABSENT: ABSTAIN: _____________________________ Kathy Hollywood, City Clerk 2024-06-12 Item #08Q Page 10 of 87 All FundsFund Balance AnalysisSchedule A #F5, updated 6/1/2024In $ thousandsFiscal Year 2024-25+=+-+++=Budgetary Restate Projected Estimated ProposedNetNetNet ProjectedFund Balance Reserves Fund Balance Operating Operating Operating Capital 1x Adj or Fund Balance6/30/20247/1/2024 Revenue Expense Transfers Transfers (Capital Exp) 6/30/2025 $ Change% ChangeGovernmental Funds - Fund BalanceGENERAL 101 - GENERAL FUND Unassigned5,168 (2,119) 3,049 107,516 100,053 (7,411) (2,519) - 581 Budget Stabilization Reserve (2% revenue)2,008 142 2,150 - 2,150 Contingency Reserve (20% op expenditures)18,034 1,977 20,011 - 20,011 Restricted199 199 - 199 Nonspendable311 311 - 311 TOTAL GENERAL FUND25,719 - 25,719 107,516 100,053 (7,411) (2,519) - 23,252 (2,467) -10%DSPECIAL REVENUEINFRASTRUCTURE201 - STATE GASOLINE TAXES44 44 3,213 - (1,141) (2,072) 44 - 0%203 - STATE CAPITAL GRANTS(10,399) (10,399) - - - - (10,399) - 0%211 - TRANSNET PROGRAM(1,403) (1,403) 2,377 - - (2,370) (1,396) 7 -1%212 - COASTAL ZONE MANAGEMENT1,703 1,703 1,285 490 - (298) 2,200 497 23%I223 - FEDERAL CAPITAL GRANT(3,677) (3,677) - - - -(3,677) - 0%TOTAL INFRASTRUCTURE(13,732) - (13,732) 6,875 490 (1,141) (4,740) - (13,228) GRANTS & HOUSING202 - STATE LAW ENF GRANT(0) (0) 100 100 - - (0) - 0%213 - GOVERNMENT EDUCATION ACCESS376 376 298 244 - - 429 53 12%214 - SOLID WASTE RECYCLING & HHW994 994 1,133 1,116 - - 1,011 16 2%221 - SENIOR NUTRITION GRANT(135) (135) - - - - (135) - 0%222 - CDBG GRANT(458) (458) 298 129 (169) - (458) - 0%228 - FEDERAL LAW ENF GRANT- - - - - -- -#DIV/0!229 - RESTRICTED DONATIONS & CONTRIB84 84 50 35 (10) - 89 5 6%230 - CSA-17 BENEFIT FEES359 359 265 333 - - 291 (68) -23%DTOTAL GRANTS & HOUSING1,220 - 1,220 2,143 1,957 (179) - - 1,227 DEVELOPMENT IMPACT231 - PARK DEVELOPMENT FEES901 901 254 - - - 1,154 254 22%I232 - PARKLAND ACQUISITION FEES1,282 1,282 436 - - - 1,718 436 25%I233 - TRAFFIC MITIGATION FEES(416) (416) 119 - - - (297) 119 -40%D234 - REGIONAL TRAFFIC MITIG FEE(204) (204) 165 - - - (39) 165 -426%D235 - OPEN SPACE ACQUISITION FEES254 254 31 - - - 286 31 11%236 - RECREATIONAL TRAILS FEES23 23 11 - - - 34 11 32%237 - COMMUNITY FACILITIES FEES- - 34 - (34) - - - #DIV/0!238 - FIRE MITIGATION FEES- - 72 - (72) - - - #DIV/0!239 - FLOOD CONTROL MITIGATION FEES24 24 81 - -- 105 81 77%251 - IN LIEU FEES CURB GUTTER SIDEW21 21 0 - -- 21 0 0%252 - IN LIEU FEES UNDERGROUND UTIL1,049 1,049 1 - -- 1,050 1 0%253 - IN LIEU FEES AFFORDABLE HOUSIN234 234 70 - -- 304 70 23%TOTAL DEVELOPMENT IMPACT3,169 - 3,169 1,274 - (106) - - 4,336 Exhibit A Resolution 2024-652024-06-12Item #08QPage 11 of 87 All FundsFund Balance AnalysisSchedule A #F5, updated 6/1/2024In $ thousandsFiscal Year 2024-25+=+-+++=Budgetary Restate Projected Estimated ProposedNetNetNet ProjectedFund Balance Reserves Fund Balance Operating Operating Operating Capital 1x Adj or Fund Balance6/30/20247/1/2024 Revenue Expense Transfers Transfers (Capital Exp) 6/30/2025 $ Change% ChangeLIGHTING & LANDSCAPING291 - VILLANITAS ROAD MID 222 222 24 33 - - 212 (9) -4%292 - CERRO STREET MID626 626 83 42 - - 667 41 6%293 - VILLAGE PARK MID15 15 34 74 32 - 7 (9) -125%D294 - WIRO PARK MID13 13 11 32 19 - 12 (1) -7%295 - ENCINITAS LLD1,626 1,626 1,655 1,892 - (40) 1,349 (277) -21%D297 - ENC RANCH LLD1,633 1,633 635 701 - (5) 1,562 (71) -5%TOTAL LIGHTING & LANDSCAPING4,135 - 4,135 2,441 2,774 51 (45) - 3,809 DEBT SERVICE 301 - DEBT SERVICE FUND0 0 - 1,717 1,717 - 0 - 0%302 - ENC PUBLIC FINANCE AUTHORITY271 271 - 3,806 3,806 - 271 - 0%TOTAL DEBT SERVICE 271 - 271 - 5,523 5,523 - - 271 CAPITAL PROJECTS401 - CAPITAL IMPROVEMENTS-MULTIYEAR(0) (0) - - - - (0) - 0%402 - CAPITAL IMPROVEMENTS-ANNUAL(0) (0) - - - - (0) - 0%403 - FACILITIES CAPITAL MAINTENANCE1,404 1,404 - - (554) - (425) 425 (979) -230%DTOTAL CAPITAL PROJECTS1,404 - 1,404 - - (554) - (425) 425 TOTAL GOVERNMENTAL FUNDS22,186 - 22,186 120,248 110,797 (3,816) (7,304) (425) 20,092 Notes IIncrease is due to planned increase in fund balance to save for future projects.DDecrease is due to a planned use of fund balance for projects related to the nature of this fund.Definition of Fund BalanceAll governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included. The difference between current assets and current liabilities is fund balance.Exhibit A Resolution 2024-652024-06-12Item #08QPage 12 of 87 All FundsFund Balance AnalysisSchedule A #F5, updated 6/1/2024In $ thousandsFiscal Year 2024-25+=+-+++=Budgetary Restate Projected Estimated ProposedNetNetNet ProjectedFund Balance Reserves Fund Balance Operating Operating Operating Capital 1x Adj or Fund Balance6/30/20247/1/2024 Revenue Expense Transfers Transfers (Capital Exp) 6/30/2025 $ Change% ChangeProprietary Funds - Net AssetsENTERPRISE511 - CSD OPERATIONS(2,034) (2,034) 5,905 4,853 - (1,280) (2,261) (227) 10%P512 - CSD CAPITAL REPLACEMENT(3,571) (3,571) - - - 1,280 (1,625) (3,916) (345) 9%513 - CSD CAPITAL EXPANSION1,785 1,785 50 - - - 1,835 50 3%TOTAL CARDIFF SANITARY DIVISION(3,820) - (3,820) 5,955 4,853 - - (1,625) (4,342) 521 - ESD OPERATIONS(2,319) (2,319) 3,056 2,078 - (2,931) (4,272) (1,953) 46%P522 - ESD CAPITAL REPLACEMENT(2,162) (2,162) - - - 2,931 (2,600) (1,831) 331 -18%523 - ESD CAPITAL EXPANSION3,192 3,192 25 - - - 3,217 25 1%TOTAL ENCINITAS SANITARY DIVISION(1,289) - (1,289) 3,081 2,078 - - (2,600) (2,886) 551 - SECTION 8 HOUSING ADMIN117 117 413 94 (198) - 237 121 51%F552 - SECTION 8 HOUSING HAP1 1 2,082 - (2,082) - 1 - 0%561 - PAC PINES AFFORDABLE HOUSING1,202 1,202 253 280 29 (65) 1,138 (64) -6%TOTAL AFFORDABLE HOUSING1,320 - 1,320 2,747 374 (2,251) (65) - 1,377 INTERNAL SERVICE 601 - SELF INSURANCE2,188 2,188 1,414 5,975 3,532 - 1,159 (1,029) -89%D611 - WASTEWATER SUPPORT(279) (279) 1,019 1,285 (685) - (1,230) (952) 77%P621 - FLEET MAINTENANCE(185) (185) 684 786 - -(287) (102) 36%P622 - VEHICLE REPLACEMENT993 993 - 555 86 - 524 (469) -89%D623 - MACH EQUIPMENT REPLACEMENT639 639 - 936 599 - 302 (337) -112%D624 - FIRE APPARATUS REPLACEMENT568 568 - 3,945 (500) - (3,877) (4,445) 115%D631 - TECHNOLOGY OPERATIONS(20) (20) - -- - (20) -0%632 - TECHNOLOGY REPLACEMENT(0) (0) - 314 314 - (0) - 0%TOTAL INTERNAL SERVICE3,905 - 3,905 3,117 13,796 3,345 - - (3,428) TOTAL PROPRIETARY FUNDS115 - 115 14,901 21,100 1,094 (65) (4,225) (9,280) TOTAL ALL FUNDS22,301 - 22,301 135,149 131,897 (2,722) (7,369) (4,650) 10,812 Notes IIncrease is due to planned increase in fund balance to save for future projects.DDecrease is due to a planned use of fund balance for projects related to the nature of this fund.FFederal Housing awards are announced annually in May. Staff projects expenditure increases, but assumes existing funding levels. Budget is adjusted when Federal amount is known.PFund deficit is due to Pension and Retiree Health Care liabilities from GASB 68 and 78. The City continues to use this fund as in prior years, and removes these liabilities to determine financial health and develop rates.Definition of Net AssetsThese funds are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.Exhibit A Resolution 2024-652024-06-12Item #08QPage 13 of 87 Projected Budgetary Fund Balance Fiscal Year 2023-24 Updated 5/28/2024 Available Fund Balance General Fund ACFR Actual Beginning Fund Balance, 7/1/2023 34,844,329$ Less Committed Budget Stabilization Reserve (2% Revenue) 2,007,833 Committed Contingency Reserve (20% Operating Expenditures) 18,033,753 Does not include $6.3M land purchase approved 9/20/23 Restricted 199,164 Nonspendable 310,620 Total Unassigned Fund Balance, 7/1/2023 14,292,959 City Council Action Date Title Resolution General Fund 2023-06-21 FY24 Operating and Capital Budget Adoption 2023-047 (2,372,120) 2023-06-28 CS23A Construction and Inspection Contract Award 2023-085 2023-08-09 Replace VM318 Combination Sewer/Storm Drain Cleaning Truck 2023-091 2023-08-16 WF24A 2022 State Homeland Security Program Grant 2023-097 2023-08-23 CS19E State DOT Funding for Santa Fe Drive Improvements 2023-101 2023-09-13 CD23A HUD Grant Funding N 101 Drainage 2023-106 2023-09-20 Purchase 1.43 acres Hwy 101 / La Costa Ave ($6.3M Reserves) 2023-102 - 2023-09-27 Continuing Appropriations from FY23 2023-111 (376,753) CX23A Lake Drive Emergency Repairs and NOC 2023-089 (306,000) 2023-10-25 Firefighter SCBA and Rapid Intervention Team Paks 2023-123 (513,692) 2023-12-13 CD05E Moonlight Beach Barrels and Storm Water Repairs 2023-136 (300,000) Housing Choice Voucher CY23 Set-Aside Funding: Lower Than Avg Leas2023-137 2023-12-20 CF22A City Hall Phase 2 NOC and EV Rebate 2023-143 42,411 2024-01-24 Cannabis HdL Contract Amendment 2 2024-011 (7,470) CF20D Pacific View Building Occupancy 2024-017 (161,682) Discretionary Payment - Unfunded Pension Liability 2024-010 (500,000) Replenish Fund 403 Facilities Capital Maintenance 2024-010 (1,000,000) Replenish Fund 601 Risk Mgmt (Self Insurance) 2024-010 (1,500,000) Replenish Fund 622 Vehicle Replacement 2024-010 (1,000,000) Replenish Fund 623 Machinery & Equip Replacement 2024-010 (500,000) Replenish Fund 624 Fire Apparatus Replacement 2024-010 (2,000,000) WC23D HAP Implementation - Buena Creek Navigation Center Ops FY242024-007 (535,511) 2024-02-21 Connected Coastlines State Coastal Conservancy Grant 2024-015 2024-02-28 Midyear Budget Amendments - Adjust As Adopted 2024-022 56,135 Midyear Budget Amendments - As Proposed 2024-022 (230,850) WC23B Traffic Study Infrastructure Improvements 2024-021 (27,965) 2024-03-20 CS23E Wales Drive/Crest Drive Emergency Access Gate Construction 2024-026 (23,051) 2024-03-27 CF20D Pacific View Building Security 2024-029 EPFA 2024 Lease Revenue Bonds - 1.43 acres Hwy 101 / La Costa Ave 2024-031 350,000 2024-04-24 CF23B Emergency Repairs to Fire Station 6 2024-045 CF23D Emergency Repairs to Fire Station 4 2024-044 CF24A Emergency: Swami's Beach Restrooms Sewer Line Failure 2024-043 2024-05-15 CF20D Pacific View Improvements SDG&E Issues 2024-049 (250,000) CS23D Leu Streetscape Seg C - Mit Fees 2024-051 CX24C Emergency Lake Dr Canyon Repair 2024-058 (810,000) Q3 Budget Amendments 2024-053 3,026,498 Exhibit B Resolution 2024-65 2024-06-12 Item #08Q Page 14 of 87 Projected Budgetary Fund Balance Fiscal Year 2023-24 Updated 5/28/2024 Available Fund Balance General Fund ACFR Actual Beginning Fund Balance, 7/1/2023 34,844,329$ Less Committed Budget Stabilization Reserve (2% Revenue) 2,007,833 Committed Contingency Reserve (20% Operating Expenditures) 18,033,753 Does not include $6.3M land purchase approved 9/20/23 Restricted 199,164 Nonspendable 310,620 Total Unassigned Fund Balance, 7/1/2023 14,292,959 City Council Action Date Title Resolution General Fund 2024-05-22 (Placeholder) CX24A Emergency Bicycle Safety Enhancements and CS2 2024-032 2024-06-12 (Placeholder) CF23C Emergency Repairs to Fire Station 5 2024-TBD (Placeholder) CS23D Leu Streetscape Seg C - Mit Fees (CS18B Leu Blvd2024-TBD (Placeholder) CX24B Emergency Sediment Cleanup Manch Culvert to SE2024-TBD (185,000) Total Fiscal Impact (9,125,050) Projected Unassigned Fund Balance, 6/30/2024 5,167,909 Fiscal Year 2024-25 2024-06-12 (Proposed) FY25 Operating and Capital Budget Adoption 2024-065 (2,467,084) 2024-07-01 (Proposed) FY25 Operating Restate FY24 Reserves ACFR 20,041,586 (Proposed) FY25 Operating Restate FY25 Reserves ACFR (22,160,911) Total Fiscal Impact (4,586,409) Projected Unassigned Fund Balance, 6/30/2025 581,500 Exhibit 1B Resolution 2024-65 2024-06-12 Item #08Q Page 15 of 87 General Fund Summary of Revenue, Expenditures, and Transfers For Fiscal Year 2024-25 Last Year Current Year Next Year Original Projected Increase Actual Budget Budget Budget (Decrease) FY 2022-23 FY 2023-24 FY 2023-24 FY 2024-25 $ Change % Change REVENUES BY SOURCE Taxes 1 Property 60,802,331 63,082,500 63,082,500 67,050,000 3,967,500 6.3% 2 Real property transfer 676,729 650,000 650,000 650,000 - 0.0% 3 Sales 17,138,284 17,490,000 16,490,000 17,298,000 808,000 4.9% 4 Transient occupancy 4,779,881 4,300,000 4,750,000 5,100,000 350,000 7.4% 5 Franchise fees 2,581,663 2,335,500 2,335,500 2,304,500 (31,000) -1.3% 6 Excise - 250,000 250,000 750,000 500,000 200.0% 7 Penalties interest - delinquent taxes 56,857 - - - - #DIV/0! 8 Total taxes 86,035,746 88,108,000 87,558,000 93,152,500 5,594,500 6.4% Other 9 Licenses and permits 379,267 291,000 291,000 371,100 80,100 27.5% 10 Intergovernmental 1,026,194 808,515 808,515 945,530 137,015 16.9% 11 Charges for services 9,510,412 9,278,316 10,162,516 10,828,594 666,078 6.6% 12 Fines, forteitures and penalities 485,215 355,000 355,000 365,000 10,000 2.8% 13 Use of money and property 1,192,302 1,076,800 1,076,800 1,088,080 11,280 1.0% 14 Other revenue 1,542,803 474,000 904,971 764,845 (140,126) -15.5% 15 Other financing sources/uses 1,728,250 - - - - 16 Total other revenue 15,864,443 12,283,631 13,598,802 14,363,149 764,347 5.6% 17 Total revenues 101,900,189 100,391,631 101,156,802 107,515,649 6,358,847 6.3% EXPENDITURES BY FUNCTION Gereral Government 18 300 City Council - Administration 450,492 588,732 543,723 538,237 (5,486) -1.0% 19 302 City Attorney 729,056 935,000 935,000 965,000 30,000 3.2% 20 310 City Manager - Administration 1,001,332 1,398,431 1,796,715 2,415,538 618,823 34.4% 21 312 CM Economic Development 105,000 163,500 163,500 250,500 87,000 53.2% 22 314 CM Environmental (re-org DS) 205,393 - - - - #DIV/0! 23 320 Human Resources 1,031,479 1,250,445 1,285,977 1,476,974 190,997 14.9% 24 330 Information Technology 3,370,940 4,130,294 4,208,894 4,918,924 710,030 16.9% 25 350 City Clerk - Administration 483,337 544,543 564,172 618,370 54,198 9.6% 26 351 City Clerk - Elections 62,399 3,500 3,500 205,500 202,000 5771.4% 27 360 Finance - Administration 2,424,973 2,722,218 2,810,420 3,105,471 295,051 10.5% 28 Total General Government 9,864,401 11,736,663 12,311,900 14,494,514 2,182,614 17.7% Development Services 29 314 Environmental (re-org from CM)- 385,376 392,948 455,132 62,184 #REF! 30 400 Director (to Eng 700)368,836 - - - - 0.0% 31 405 Administration 498,616 559,319 557,802 680,544 122,742 22.0% 32 410 Land Development (to Eng 730) 3,446,163 4,388,105 4,519,770 3,501,593 (1,018,177) -22.5% 33 415 Regulatory Permits 684,240 210,111 139,440 188,461 49,021 35.2% 34 420 Applicant Deposits - - - - - #DIV/0! 35 430 Advanced Planning & Housing 1,080,172 1,806,456 1,765,872 1,988,808 222,936 12.6% 36 440 Building & Code Enforce 3,422,340 3,049,398 3,848,355 3,522,407 (325,948) -8.5% 37 450 Parking Citations 183,035 229,841 229,841 229,841 - 0.0% 38 730 Eng Inspections (re-org Eng 730)- 1,629,015 1,406,226 - (1,406,226)-100.0% 39 Total Development Services 9,683,401 12,257,621 12,860,252 10,566,786 (2,293,466) -17.8% Engineering 40 700 CIP Eng (from DS 400)1,259,191 2,226,484 2,654,923 2,400,411 (254,512) -9.6% 41 710 Traffic Engineering 806,745 967,092 1,049,261 1,077,071 27,810 2.7% 42 730 Land Dev Eng (re-org DS 730) 1,259,767 - - 3,323,224 3,323,224 #DIV/0! 43 Total Engineering 3,325,703 3,193,576 3,704,184 6,800,706 3,096,522 83.6% Exhibit C Resolution 2024-65 2024-06-12 Item #08Q Page 16 of 87 General Fund Summary of Revenue, Expenditures, and Transfers For Fiscal Year 2024-25 Last Year Current Year Next Year Original Projected Increase Actual Budget Budget Budget (Decrease) FY 2022-23 FY 2023-24 FY 2023-24 FY 2024-25 $ Change % Change Public Safety 44 500 Law Enforcement 13,489,544 17,865,449 17,865,449 19,423,389 1,557,940 8.7% 45 510 Fire Administration 601,802 717,545 714,984 769,992 55,008 7.7% 46 511 Fire Operations 16,148,123 16,744,391 17,969,393 19,180,209 1,210,816 6.7% 47 512 Loss Prevention 649,417 726,415 767,916 925,709 157,793 20.5% 48 513 Disaster Prep 187,856 230,353 262,311 336,725 74,414 28.4% 49 514 Marine Safety 1,586,223 1,858,733 1,887,562 2,206,311 318,749 16.9% 50 515 Junior Lifeguards 289,009 330,366 336,131 354,434 18,303 5.4% 51 Total Public Safety 32,951,973 38,473,252 39,803,745 43,196,769 3,393,024 8.5% Public Works 52 600 Administration 506,968 562,742 584,229 656,581 72,352 12.4% 53 620 Environmental 747 - - - - #DIV/0! 54 630 Street Maintenance 3,122,211 3,685,373 4,054,494 4,022,874 (31,620) -0.8% 55 640 Facility Maint Civic Center 487,872 586,508 590,166 649,281 59,115 10.0% 56 641 Facility Maint Fire Stations 284,817 396,865 398,973 410,765 11,792 3.0% 57 642 Facility Maint Yard 209,020 259,596 261,139 270,980 9,841 3.8% 58 643 Facility Maint Library 332,785 473,623 475,166 456,922 (18,244) -3.8% 59 644 Facility Maint PRCA 350,751 480,037 484,422 715,317 230,895 47.7% 60 650 Stormwater Maintenance 676,516 816,489 932,371 752,790 (179,581) -19.3% 61 651 Stormwater Flood 70,930 96,405 98,582 103,450 4,868 4.9% 62 652 Stormwater Program 764,099 842,298 867,517 971,149 103,632 11.9% 63 Total Public Works 6,806,717 8,199,936 8,747,060 9,010,109 263,049 3.0% Parks, Recreation, and Cultural Arts 64 800 Administration 1,255,153 1,651,001 1,456,403 1,609,231 152,828 10.5% 65 810 Park Maintenance 2,812,540 3,316,229 3,332,241 3,489,007 156,766 4.7% 66 820 Beach Maintenance 701,150 796,303 801,271 807,859 6,588 0.8% 67 821 Surf Permits 27,134 33,500 33,500 33,500 - 0.0% 68 830 Trail Maintenance 336,732 412,791 414,841 419,790 4,949 1.2% 69 840 Recreation Programs 468,736 731,099 752,706 649,756 (102,950) -13.7% 70 850 Community Center 911,240 933,760 948,882 888,981 (59,901) -6.3% 71 856 Comm Ctr Programs 181,136 234,956 236,566 220,901 (15,665) -6.6% 72 857 Comm Ctr Facility Rentals 123,563 208,586 212,329 224,150 11,821 5.6% 73 861 Senior Ctr Programs 111,777 173,419 174,646 426,770 252,124 144.4% 74 876 Facility Programs & Events 652,908 629,156 706,079 752,833 46,754 6.6% 75 877 Facility Rentals 68,760 91,372 93,180 98,152 4,972 5.3% 76 879 Concession & Vending - - - - - #DIV/0! 77 880 Pacific View Arts Center - - - 78,000 78,000 78 881 Cultural Arts 366,543 728,969 742,356 1,376,901 634,545 85.5% 79 Total Parks Rec and Cultural Arts 8,017,372 9,941,141 9,905,000 11,075,831 1,170,831 11.8% Non-Departmental 80 900 Central Purchases 78,337 80,798 5,762,603 72,628 (5,689,975) -98.7% 81 901 Shared Expenses 4,804,865 6,285,778 5,351,215 4,835,649 (515,566) -9.6% 82 Total Non-Departmental 4,883,202 6,366,576 11,113,818 4,908,277 (6,205,541) -55.8% 83 Total expenditures 75,532,770 90,168,765 98,445,960 100,052,992 1,607,032 1.6% 84 Excess revenue over expenditures 26,367,418 10,222,866 2,710,842 7,462,657 4,751,815 175.3% Exhibit C Resolution 2024-65 2024-06-12 Item #08Q Page 17 of 87 General Fund Summary of Revenue, Expenditures, and Transfers For Fiscal Year 2024-25 Last Year Current Year Next Year Original Projected Increase Actual Budget Budget Budget (Decrease) FY 2022-23 FY 2023-24 FY 2023-24 FY 2024-25 $ Change % Change TRANSFERS * Transfers In / Sources 85 Transfers in - operating 1,118,078 1,191,877 1,191,877 2,300,842 1,108,965 93.0% 86 Transfers in - capital 1,480,148 1,770,838 5,199,822 1,579,396 (3,620,426) -69.6% 87 Transfers in - other - - - - - #DIV/0! 88 Transfers in - debt service - - - - - #DIV/0! 89 Total transfers in 2,598,226 2,962,715 6,391,699 3,880,238 (2,511,461) -39.3% Transfers Out / Uses 90 Transfers out - operating 5,768,390 6,562,987 12,562,987 4,188,779 (8,374,208) -66.7% 91 Transfers out - capital 11,831,332 3,811,744 5,268,439 4,098,000 (1,170,439) -22.2% 92 Transfers out - other - - - - - #DIV/0! 93 Transfers out - debt service 4,105,504 5,182,970 5,451,165 5,523,200 72,035 1.3% 94 Total transfers out 21,705,226 15,557,701 23,282,591 13,809,979 (9,472,612) -40.7% 95 Net transfers (19,107,000) (12,594,986) (16,890,892) (9,929,741) 6,961,151 -41.2% 96 Net increase (decr) to Fund Balance 7,260,418 (2,372,120) (14,180,050) (2,467,084) Adj 1x Land Purchase from Reserves Reso 2023-102 6,300,000 Adj known CIP items - Council approval TBD (1,245,000) 97 Adjusted incr (decr) to Fund Balance 7,260,418 (2,372,120) (9,125,050) (2,467,084) * See Summary of Operating and Debt Services Transfers for fund details Alternate Analysis Last Year Current Year Next Year Original Projected Proposed Increase Actual Budget Budget Budget (Decrease) EXPENDITURES BY TYPE FY 2022-23 FY 2023-24 FY 2023-24 FY 2024-25 $ Change % Change 98 Personnel 40,805,147 47,111,867 47,102,438 52,646,413 5,543,975 11.8% 99 Contracts and services 32,120,756 40,204,500 42,148,103 44,912,975 2,764,872 6.6% 100 Materials and supplies 1,716,639 2,107,000 2,233,880 2,205,747 (28,133) -1.3% 101 Internal cost allocation 365,950 538,672 538,672 - (538,672)-100.0% 102 Capital outlay 17,283 9,000 6,225,141 92,000 (6,133,141) -98.5% 103 Debt / finance 506,996 197,726 197,726 195,857 (1,869) -0.9% 104 Total expenditures 75,532,770 90,168,765 98,445,960 100,052,992 1,607,032 1.6% Adj for 1x $6.3M Land Purchase 6,300,000 Adjusted total expenditures 92,145,960 100,052,992 7,907,032 8.6% Note: Column totals may not sum due to rounding. Exhibit C Resolution 2024-65 2024-06-12 Item #08Q Page 18 of 87 General Fund Summary of Operating and Debt Service Transfers For Fiscal Year 2024-25 Last Year Current Year Next Year Original Projected Increase Actual Budget Budget Budget (Decrease) FY 2022-23 FY 2023-24 FY 2023-24 FY 2024-25 $ Change % Change Transfers In / Sources Transers In - Operating 201 Gas Tax 1,068,428 1,091,317 1,091,317 1,140,577 49,260 4.6% 237 Community Facilities Fund 37,037 28,550 28,550 34,260 5,710 15.4% 238 Fire Mitigation Fund 12,613 72,010 72,010 72,100 90 0.7% 403 Facilities Fund 553,905 553,905 624 Fire Apparatus 500,000 500,000 #DIV/0! Total transfers in - operating 1,118,078 1,191,877 1,191,877 2,300,842 1,108,965 99.2% Transfers Out / Uses Transers Out - Operating 214 Solid Waste 500,000 ---- 221 Senior Nutrition 133,792 118,273 118,273 -(118,273) -88.4% 222 CDBG 6,271 59,296 59,296 69,260 9,964 158.9% 229 Community Grant 140,000 140,000 140,000 140,000 - 0.0% 293 Village Park MID 30,450 30,450 31,973 1,523 #DIV/0! 294 Wiro Park 17,000 18,190 18,190 19,463 1,273 7.5% 403 Facility Maintenance 1,100,000 1,100,000 2,100,000 -(2,100,000) -190.9% 551 Section 8 52,993 52,993 54,053 1,060 #DIV/0! 561 Pacific Pines 28,593 28,593 28,593 - #DIV/0! 601 Self Insurance 2,812,541 3,462,683 4,962,683 3,531,937 (1,430,746) -50.9% 622 Vehicle Replacement 423,786 386,300 1,386,300 -(1,386,300) -327.1% 623 Mach Equip Replacement 185,000 135,000 635,000 -(635,000) -343.2% 624 Fire Apparatus Replacement 450,000 500,000 2,500,000 -(2,500,000) -555.6% 631 Technology Operations 107,250 107,250 -(107,250) #DIV/0! 632 Technology Replacement 423,959 423,959 313,500 (110,459) #DIV/0! Total transfers out - operating 5,768,390 6,562,987 12,562,987 4,188,779 (8,374,208) -145.2% Transfers Out - Debt Service 301 Debt Service 387,596 ---- 0.0% 301 I-Bank Loan Repayment 291,375 1,720,610 1,720,610 1,717,000 (3,610) -1.2% 302 Debt Service EPFA 3,426,533 3,462,360 3,462,360 3,806,200 343,840 10.0% Total transfers out - debt 4,105,504 5,182,970 5,182,970 5,523,200 340,230 8.3% Exhibit C Resolution 2024-65 2024-06-12 Item #08Q Page 19 of 87 Exhibit D Reso 2024-65 Internal Service Funds Vehicle Replacement Program Administrative Policy F017 Public Works - Fleet Maintenance Division, May 2024 Next Year Budget Fund Vehicle Make Model Assigned to FY 2024-25 170 Ford F-350 Public Works - Fleet 200,000$ 250 Ford Ranger 4X4 Development Services 70,000 277 Ford Escape Hybrid Vehicle Pool 70,000 319 Ford Escape SE 4 WD Parks Rec Cultural Arts 70,000 320 Ford F-150 Parks Rec Cultural Arts 70,000 As-Needed n/a Outfitting & Contingency n/a 75,000 Capital Outlay 555,000 208 INT Water Truck 2500 Gallon Public Works 300,000 321 Ford F-350 Public Works 200,000 333 Curb Machine MIL MC650 Public Works 12,000 334 Solar Tech Silent Messenger ll LED Public Works 20,000 393 Polaris ATV Fire & Marine Safety 45,000 395 Yamaha Jet Ski Fire & Marine Safety 22,000 396 Yamaha Jet Ski Fire & Marine Safety 22,000 232 Case 521D Wheeled Loader Public Works 300,000 206 Miller Trailer Tilt Public Works 15,000 Capital Outlay 936,000 201 INT Master Body Brush Truck Fire - Operations 800,000 278 Pierce Tiller Truck Fire - Operations 2,700,000 Capital Outlay 3,500,000 4,991,000$ No new additions to the fleet are proposed for FY 2024-25. Amounts reflect the expected replacement cost, without expected trade-in, residual value, or financing. 622 - VEHICLE REPLACEMENT 623 - MACHINERY / EQUIPMENT REPLACEMENT 624 - FIRE APPARATUS REPLACEMENT Approval of the operating budget and expected replacement schedule constitute the authority of the Public Works Director to purchase the specified replacement vehicles, without further action of the City Council. Any proposed purchases that were not approved as part of the original budget (additions, early replacements, transfers, etc.) shall require the approval of the City Council. It is intended that vehicles will be replaced according to the annual schedule presented to the Council, based on their expected useful life. Early replacement may be approved based on vehicle condition. Total Fire Apparatus Replacement Total Machinery / Equipment Replacement Total Vehicle Replacement TOTAL VEHICLE REPLACEMENT PROGRAM 2024-06-12 Item #08Q Page 20 of 87 Five‐Year Capital Improvement ProgramFY 2025 to FY 2029 Plan ‐ By TypeFY 2024‐25 Budget AdoptionIncludes changes to CIP Plan Adopted June 21, 2023:June 12, 2024*Directed by Council at Budget Workshop 2 on April 17, 2024 and Budget Introduction on May 15, 2024In $ thousandsProposed Projected Projected Projected Projected 5 Year TotalTypeTitleProject Funding Source FY 2024‐25 FY 2025‐26 FY 2026‐27 FY 2027‐28 FY 2028‐29FY2025 ‐ FY2029DrainageN101 Drainage Improvements *extend design to GrandviewCD23A 101 ‐ General Fund1,800 ‐ ‐ ‐ ‐ 1,800 Storm Drain Repair *not funding FY25CD05E 101 ‐ General Fund250 250 250 250 1,000 Drainage Total1,800 250 250 250 250 2,800 FacilitiesCivic Center Improvements CF16A 403 ‐ Facilities100 500 100 100 100 900 Community Center Improvements CF18B 403 ‐ Facilities100 75 75 75 75 400 Fire Stations Improvements CF16B 403 ‐ Facilities25 50 50 25 50 200 Library ImprovementsCF16F 403 ‐ Facilities50 50 50 50 50 250 Lifeguard Facility Improvements CF20A 403 ‐ Facilities25 40 40 40 40 185 Pacific Pines Maintenance Schedule WC18D 561 ‐ Pacific Pines65 75 26 17 11 194 Pacific View Arts Center ImprovementsCF26A 403 ‐ Facilities‐ 25 25 25 25 100 Park Facilities Improvements CF23A 403 ‐ Facilities75 75 75 75 75 375 PW Facility Improvements CF16D 403 ‐ Facilities50 50 50 50 50 250 Facilities Total490 940 491 457 476 2,854 Mobility Improvements ADA Curb Ramp Project (Transition Plan Compliance)CS16C 101 ‐ General Fund50 50 50 50 50 250 ECR/Santa Fe Protected Intersection *add new projectCS25B 101 ‐ General Fund800 ‐ ‐ ‐ ‐ 800 General Mobility Improvements CS18E 101 ‐ General Fund300 300 300 300 300 1,500 Innovative Bike Lanes *not funding FY25CS18D 101 ‐ General Fund‐ 25 25 25 25 100 Orpheus/Paul Ecke Central Bike Project *add new projectCS25C 101 ‐ General Fund60 ‐ ‐ ‐ ‐ 60 Safe Routes to SchoolCS01E 101 ‐ General Fund200 200 200 200 200 1,000 Traffic Safety and Calming *not funding FY25CS02F 101 ‐ General Fund‐ 75 75 75 75 300 Mobility Improvements Total1,410 650 650 650 650 4,010 1 of 3Exhibit E Resolution 2024-652024-06-12Item #08QPage 21 of 87 Five‐Year Capital Improvement ProgramFY 2025 to FY 2029 Plan ‐ By TypeFY 2024‐25 Budget AdoptionIncludes changes to CIP Plan Adopted June 21, 2023:June 12, 2024*Directed by Council at Budget Workshop 2 on April 17, 2024 and Budget Introduction on May 15, 2024In $ thousandsProposed Projected Projected Projected Projected 5 Year TotalTypeTitleProject Funding Source FY 2024‐25 FY 2025‐26 FY 2026‐27 FY 2027‐28 FY 2028‐29FY2025 ‐ FY2029Parks and Beaches Beach Habitat StudyWB16A 212 ‐ Coastal Zone Mgmt40 40 40 40 40 200 Beach Staircase Access Refurbishment ‐ Swami's *not funding FY25CP2‐A 101 ‐ General Fund‐ 550 ‐ ‐ ‐ 550 Beacon's Coastal Bluff Restoration ProjectCP22C 212 ‐ Coastal Zone Mgmt8 8 8 8 8 41 Coastal Storm Damage Reduction ProjectWB16C 212 ‐ Coastal Zone Mgmt150 150 150 150 150 750 Dune Restoration ProjectCP16A 212 ‐ Coastal Zone Mgmt‐ ‐ ‐ ‐ 50 50 Park Improvement Projects CP04G 101 ‐ General Fund238 245 252 260 268 1,264 SCOUP‐Sand Compatiblity Opportunistic Use ProgramWB08C 212 ‐ Coastal Zone Mgmt100 100 100 100 100 500 Parks and Beaches Total536 1,093 551 558 616 3,354 Streets and Rail CorridorAnnual Street OverlayCS25A 211 ‐ TransNet2,370 2,398 2,428 2,496 2,560 12,250 Annual Street Overlay ‐ HUTACS25A201 ‐ Gas Tax (HUTA)534 523 513 502 492 2,565 Annual Street Overlay ‐ RMRA SB1CS25A201 ‐ Gas Tax (SB1)1,539 1,508 1,478 1,448 1,419 7,391 Street Light & Traffic Signal ReplacementsCS17G 295 ‐ Encinitas LLD40 40 40 40 40 200 297 ‐ Encinitas Ranch LLD5 5 5 5 5 25 Streets and Rail Corridor Total4,487 4,474 4,463 4,491 4,516 22,431 StudiesEncinitas Habitat Stewardship ProgramWC11A 101 ‐ General Fund100 100 100 100 100 500 Housing Element UpdateWC14B 101 ‐ General Fund‐ ‐ ‐ 750 750 1,500 Native Plant Demo Garden & Education *add new projectWC25B 101 ‐ General Fund150 ‐ ‐ ‐ ‐ 150 Native Plant Ordinance *add new projectWC25C101 ‐ General Fund150 ‐ ‐ ‐ ‐ 150 Resource Management Element UpdateWC25A 101 ‐ General Fund250 250 ‐ ‐ ‐ 500 Studies Total650 350 100 850 850 2,800 2 of 3Exhibit E Resolution 2024-652024-06-12Item #08QPage 22 of 87 Five‐Year Capital Improvement ProgramFY 2025 to FY 2029 Plan ‐ By TypeFY 2024‐25 Budget AdoptionIncludes changes to CIP Plan Adopted June 21, 2023:June 12, 2024*Directed by Council at Budget Workshop 2 on April 17, 2024 and Budget Introduction on May 15, 2024In $ thousandsProposed Projected Projected Projected Projected 5 Year TotalTypeTitleProject Funding Source FY 2024‐25 FY 2025‐26 FY 2026‐27 FY 2027‐28 FY 2028‐29FY2025 ‐ FY2029WastewaterBatiquitos 2004 Pump Station ImprovementCE04A 522 ‐ Encinitas Sanitary Div311 471 471 125 125 1,504 Collection System Rehabilitation CE04H 522 ‐ Encinitas Sanitary Div1,080 750 300 500 750 3,380 CSD Collection System Rehab CC04E 512 ‐ Cardiff Sanitary Div500 500 500 1,000 1,000 3,500 Encina Plant Improvements CE25B 522 ‐ Encinitas Sanitary Div1,265 1,586 1,712 1,682 1,553 7,797 Moonlight Beach Pump Station RehabilitationCE22D522 ‐ Encinitas Sanitary Div200 ‐ ‐ ‐ ‐ 200 Olivenhain Inlet Gate Replacement CC24B 512 ‐ Cardiff Sanitary Div100 ‐ ‐ ‐ ‐ 100 SEJPA Plant Improvements CC25A 512 ‐ Cardiff Sanitary Div605 625 625 650 650 3,155 Sewer Main Condition Assessment CC24C 512 ‐ Cardiff Sanitary Div75 ‐ ‐ ‐ ‐ 75 CE24C 522 ‐ Encinitas Sanitary Div75 ‐ ‐ ‐ ‐ 75 Wastewater Total4,211 3,932 3,609 3,957 4,078 19,786 Grand Total13,584 11,689 10,113 11,212 11,437 58,035 3 of 3Exhibit E Resolution 2024-652024-06-12Item #08QPage 23 of 87 Five‐Year Capital Improvement ProgramFY 2025 to FY 2029 Plan ‐ By FundFY 2024‐25 Budget AdoptionIncludes changes to CIP Plan Adopted June 21, 2023:June 12, 2024*Directed by Council at Budget Workshop 2 on April 17, 2024 and Budget Introduction on May 15, 2024In $ thousandsProposed Projected Projected Projected Projected 5 Year TotalFunding SourceTitleProject Type FY 2024‐25 FY 2025‐26 FY 2026‐27 FY 2027‐28 FY 2028‐29FY2025 ‐ FY2029101 ‐ General Fund ADA Curb Ramp Project (Transition Plan Compliance)CS16C Mobility Improvements50 50 50 50 50 250 Beach Staircase Access Refurbishment ‐ Swami's *not funding FY25CP2‐A Parks and Beaches‐ 550 ‐ ‐ ‐ 550 ECR/Santa Fe Protected Intersection *add new projectCS25B Mobility Improvements800 ‐ ‐ ‐ ‐ 800 Encinitas Habitat Stewardship ProgramWC11AStudies100 100 100 100 100 500 General Mobility Improvements CS18E Mobility Improvements300 300 300 300 300 1,500 Housing Element UpdateWC14B Studies‐ ‐ ‐ 750 750 1,500 Innovative Bike Lanes *not funding FY25CS18D Mobility Improvements‐ 25 25 25 25 100 N101 Drainage Improvements *extend design to GrandviewCD23A Drainage1,800 ‐ ‐ ‐ ‐ 1,800 Native Plant Demo Garden & Education *add new projectWC25BStudies150 ‐ ‐ ‐ ‐ 150 Native Plant Ordinance *add new projectWC25C Studies150 ‐ ‐ ‐ ‐ 150 Orpheus/Paul Ecke Central Bike Project *add new projectCS25C Mobility Improvements60 ‐ ‐ ‐ ‐ 60 Park Improvement Projects CP04G Parks and Beaches238 245 252 260 268 1,264 Resource Management Element UpdateWC25A Studies250 250 ‐ ‐ ‐ 500 Safe Routes to SchoolCS01EMobility Improvements200 200 200 200 200 1,000 Storm Drain Repair *not funding FY25CD05E Drainage250 250 250 250 1,000 Traffic Safety and Calming *not funding FY25CS02F Mobility Improvements‐ 75 75 75 75 300 101 ‐ General Fund Total4,098 2,045 1,252 2,010 2,018 11,424 1 of 3Exhibit F Resolution 2024-652024-06-12Item #08QPage 24 of 87 Five‐Year Capital Improvement ProgramFY 2025 to FY 2029 Plan ‐ By FundFY 2024‐25 Budget AdoptionIncludes changes to CIP Plan Adopted June 21, 2023:June 12, 2024*Directed by Council at Budget Workshop 2 on April 17, 2024 and Budget Introduction on May 15, 2024In $ thousandsProposed Projected Projected Projected Projected 5 Year TotalFunding SourceTitleProject Type FY 2024‐25 FY 2025‐26 FY 2026‐27 FY 2027‐28 FY 2028‐29FY2025 ‐ FY2029201 ‐ Gas Tax (HUTA) Annual Street Overlay ‐ HUTA CS25A Streets and Rail Corridor534 523 513 502 492 2,565 201 ‐ Gas Tax (HUTA) Total534 523 513 502 492 2,565 201 ‐ Gas Tax (SB1) Annual Street Overlay ‐ RMRA SB1 CS25A Streets and Rail Corridor1,539 1,508 1,478 1,448 1,419 7,391 201 ‐ Gas Tax (SB1) Total1,539 1,508 1,478 1,448 1,419 7,391 211 ‐ TransNetAnnual Street OverlayCS25A Streets and Rail Corridor2,370 2,398 2,428 2,496 2,560 12,250 211 ‐ TransNet Total2,370 2,398 2,428 2,496 2,560 12,250 212 ‐ Coastal Zone Mgmt Beach Habitat StudyWB16A Parks and Beaches40 40 40 40 40 200 Beacon's Coastal Bluff Restoration ProjectCP22C Parks and Beaches8 8 8 8 8 41 Coastal Storm Damage Reduction ProjectWB16CParks and Beaches150 150 150 150 150 750 Dune Restoration ProjectCP16A Parks and Beaches‐ ‐ ‐ ‐ 50 50 SCOUP‐Sand Compatiblity Opportunistic Use ProgramWB08C Parks and Beaches100 100 100 100 100 500 212 ‐ Coastal Zone Mgmt Total298 298 298 298 348 1,541 295 ‐ Encinitas LLD Street Light & Traffic Signal ReplacementsCS17G Streets and Rail Corridor40 40 40 40 40 200 295 ‐ Encinitas LLD Total40 40 40 40 40 200 297 ‐ Encinitas Ranch LLD Street Light & Traffic Signal ReplacementsCS17G Streets and Rail Corridor5 5 5 5 5 25 297 ‐ Encinitas Ranch LLD Total5 5 5 5 5 25 403 ‐ FacilitiesCivic Center Improvements CF16A Facilities100 500 100 100 100 900 Community Center Improvements CF18B Facilities100 75 75 75 75 400 Fire Stations Improvements CF16B Facilities25 50 50 25 50 200 Library ImprovementsCF16F Facilities50 50 50 50 50 250 Lifeguard Facility Improvements CF20A Facilities25 40 40 40 40 185 Pacific View Arts Center ImprovementsCF26A Facilities‐ 25 25 25 25 100 Park Facilities Improvements CF23A Facilities75 75 75 75 75 375 PW Facility Improvements CF16D Facilities50 50 50 50 50 250 403 ‐ Facilities Total425 865 465 440 465 2,660 2 of 3Exhibit F Resolution 2024-652024-06-12Item #08QPage 25 of 87 Five‐Year Capital Improvement ProgramFY 2025 to FY 2029 Plan ‐ By FundFY 2024‐25 Budget AdoptionIncludes changes to CIP Plan Adopted June 21, 2023:June 12, 2024*Directed by Council at Budget Workshop 2 on April 17, 2024 and Budget Introduction on May 15, 2024In $ thousandsProposed Projected Projected Projected Projected 5 Year TotalFunding SourceTitleProject Type FY 2024‐25 FY 2025‐26 FY 2026‐27 FY 2027‐28 FY 2028‐29FY2025 ‐ FY2029512 ‐ Cardiff Sanitary Div CSD Collection System Rehab CC04E Wastewater500 500 500 1,000 1,000 3,500 Olivenhain Inlet Gate Replacement CC24B Wastewater100 ‐ ‐ ‐ ‐ 100 SEJPA Plant Improvements CC25A Wastewater605 625 625 650 650 3,155 Sewer Main Condition Assessment CC24C Wastewater75 ‐ ‐ ‐ ‐ 75 512 ‐ Cardiff Sanitary Div Total1,280 1,125 1,125 1,650 1,650 6,830 522 ‐ Encinitas Sanitary Div Batiquitos 2004 Pump Station ImprovementCE04AWastewater311 471 471 125 125 1,504 Collection System Rehabilitation CE04H Wastewater1,080 750 300 500 750 3,380 Encina Plant Improvements CE25B Wastewater1,265 1,586 1,712 1,682 1,553 7,797 Moonlight Beach Pump Station RehabilitationCE22D Wastewater200 ‐ ‐ ‐ ‐ 200 Sewer Main Condition Assessment CE24C Wastewater75 ‐ ‐ ‐ ‐ 75 522 ‐ Encinitas Sanitary Div Total2,931 2,807 2,484 2,307 2,428 12,957 561 ‐ Pacific Pines Pacific Pines Maintenance Schedule WC18D Facilities65 75 26 17 11 194 561 ‐ Pacific Pines Total65 75 26 17 11 194 Grand Total13,584 11,689 10,113 11,212 11,437 58,035 3 of 3Exhibit F Resolution 2024-652024-06-12Item #08QPage 26 of 87 ATTACHMENT 2 RESOLUTION NO. 2024-66 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ENCINITAS, CALIFORNIA, DETERMINING AND ADOPTING THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2024-25 IN ACCORDANCE WITH ARTICLE XIII-B OF THE CONSTITUTION OF THE STATE OF CALIFORNIA WHEREAS, each year the City Council of the City of Encinitas is required under Section 7910 of Chapter 1205 of the California State Statutes of 1980 to establish an appropriations limit by resolution; and WHEREAS, the City Council desires to make provision for a level of service commensurate with the needs of the City. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Encinitas does hereby adopt the appropriations limit for Fiscal Year 2024-25 at $152,864,456 as contained in Exhibit A to this resolution. NOW, THEREFORE, BE IT FURTHER RESOLVED that this action is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15378(b)(5) of the CEQA Guidelines, as an organizational or administrative activity of government that will not result in a direct or indirect physical change in the environment. PASSED, APPROVED AND ADOPTED this 12th day of June 2024 by the City Council of the City of Encinitas, State of California. ____________________________ Tony Kranz, Mayor ATTEST: ______________________________ Kathy Hollywood, City Clerk APPROVED AS TO FORM: _____________________________ Tarquin Preziosi, City Attorney 2024-06-12 Item #08Q Page 27 of 87 CERTIFICATION: I, Kathy Hollywood, City Clerk of the City of Encinitas, California, do hereby certify under penalty of perjury that the foregoing Resolution was duly adopted at a regular meeting of the City Council on the 12th day of June 2024 by the following vote: AYES: NOES: ABSENT: ABSTAIN: _____________________________ Kathy Hollywood, City Clerk 2024-06-12 Item #08Q Page 28 of 87 Exhibit A Resolution 2024-66 City of Encinitas Schedule of Annual Appropriations Limit For Fiscal Year 2024-25 Prior Year Appropriations Limit FY 2023-24 Resolution 2023-48, adopted June 21, 2023 147,420,890$ A. Per Capita Cost of Living adjustment CPI 1.0362 B. Population adjustment County 1.0007 Change Factor (A x B)1.0369 Prior Year x Change Factor = Increase over prior year 5,443,566 Appropriations Limit for FY 2024-25 152,864,456$ Appropriations Subject to Limitation 81,354,080$ Proceeds of Taxes 95,285,700$ Exclusions (13,931,620) Under (Over) Limit 71,510,376$ Percent Under Limit 46.8% Article XIIIB of the California Constitution, more commonly known as the Annual Appropriations Limitation or “Gann Limit”, specifies the amount of allowable revenue the City of Encinitas can appropriate from the proceeds of taxes. In accordance with Proposition 111 and SB 88 (Chapter 60-90) the Appropriations Limitation is calculated utilizing a format based on the percentage of growth in California Per Capita Income and County population. The City’s Appropriations Subject to the Limit are well below the approved Appropriations Limit. As part of the City’s annual audit, an independent accounting firm reviews the calculations for compliance. 2024-06-12 Item #08Q Page 29 of 87 ATTACHMENT 3 RESOLUTION 2024-67 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ENCINITAS, CALIFORNIA, APPROVING TITLES AND PAY RANGES FOR THE CITY OF ENCINITAS FOR FISCAL YEAR 2024-25 WHEREAS, the City Council establishes and approves the classifications, titles and pay ranges for all positions; and WHEREAS, the City Council of the City of Encinitas is adopting the Position Titles and Pay Ranges for Fiscal Year 2024-25 (Exhibit A). NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Encinitas that the Position Titles and Pay Ranges as contained in Exhibit A are adopted. NOW, THEREFORE, BE IT FURTHER RESOLVED that this action is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15378(b)(5) of the CEQA Guidelines, as an organizational or administrative activity of government that will not result in a direct or indirect physical change in the environment. PASSED, APPROVED AND ADOPTED this 12th day of June 2024 by the City Council of the City of Encinitas, State of California. ______________________________ Tony Kranz, Mayor ATTEST: ______________________________ Kathy Hollywood, City Clerk APPROVED AS TO FORM: _____________________________ Tarquin Preziosi, City Attorney 2024-06-12 Item #08Q Page 30 of 87 ATTACHMENT 3 CERTIFICATION: I, Kathy Hollywood, City Clerk of the City of Encinitas, California, do hereby certify under penalty of perjury that the foregoing Resolution was duly adopted at a regular meeting of the City Council on the 12th day of June 2024 by the following vote: AYES: NOES: ABSENT: ABSTAIN: ____________________________ Kathy Hollywood, City Clerk 2024-06-12 Item #08Q Page 31 of 87 Exhibit A Classification Title MIN. MAX. MIN. MAX. Accountant I 30.9801 43.5921 5,370 7,556 Accountant II 33.7743 47.5239 5,854 8,237 Accountant III 37.1252 52.2389 6,435 9,055 Administrative Services Director 73.0205 118.9422 12,657 20,617 Administrative Services Manager 49.0294 72.4389 8,498 12,556 Arts Assistant 21.9920 28.4090 3,675 4,924 Arts Program Manager 51.3391 79.6441 8,899 13,805 Assistant Center Manager 38.7356 57.2301 6,714 9,920 Assistant City Manager 75.7492 123.3874 13,130 21,387 Assistant Director of Development Services 62.0343 101.0477 10,753 17,515 Assistant Director of Engineering 62.0343 101.0477 10,753 17,515 Assistant Finance Director 62.0343 101.0477 10,753 17,515 Assistant Public Works Director/Assistant General Manager 62.0343 101.0477 10,753 17,515 Center Manager 43.0664 63.6286 7,465 11,029 City Clerk & Legislative Services Director 73.0205 118.9422 12,657 20,617 City Traffic Engineer 55.9837 86.8492 9,704 15,054 Code Enforcement Officer I 30.9801 43.5921 5,370 7,556 Code Enforcement Officer II 33.7743 47.5239 5,854 8,237 Code Enforcement Officer III 37.1252 52.2389 6,435 9,055 Code Enforcement Supervisor 38.0182 56.1704 6,590 9,736 Department Administrative Support Coordinator 28.7489 40.4525 4,983 7,012 Department Manager I 55.9837 86.8492 9,704 15,054 Department Manager I - Assistant to the City Manager 55.9837 86.8492 9,704 15,054 Department Manager II 62.0343 101.0477 10,753 17,515 Deputy City Clerk 43.0664 63.6286 7,465 11,029 Deputy City Manager 75.6176 123.1732 13,107 21,350 Deputy Fire Chief 69.7500 108.2054 12,090 18,756 Deputy Fire Marshal I 33.7743 47.5239 5,854 8,237 Deputy Fire Marshal II 37.1252 52.2389 6,435 9,055 Development Services Director 73.0205 118.9422 12,657 20,617 Director of Engineering / City Engineer 73.0205 118.9422 12,657 20,617 Engineer I 44.9300 66.3823 7,788 11,506 Engineer II 48.1214 71.0974 8,341 12,324 Engineering Specialist I 30.9801 43.5921 5,370 7,556 Engineering Specialist II 33.7743 47.5239 5,854 8,237 Engineering Specialist III 37.1252 52.2389 6,435 9,055 Environmental Project Manager 51.3391 79.6441 8,899 13,805 Executive Assistant 34.4115 48.4208 5,965 8,393 Facilities Specialist 28.7489 40.4525 4,983 7,012 Facilities Supervisor 37.1252 52.2389 6,435 9,055 Finance & City Treasurer Director 73.0205 118.9422 12,657 20,617 Finance Analyst I 34.4115 48.4208 5,965 8,393 Finance Analyst II 37.8256 53.2245 6,556 9,226 Finance Analyst III 40.9010 60.4295 7,090 10,474 Finance Manager I 43.0664 63.6286 7,465 11,029 Finance Manager II 49.2771 76.4455 8,541 13,251 Finance Manager III 53.4007 82.8424 9,256 14,359 Salary Schedule for Fiscal Year 2024-25 City of Encinitas HOURLY MONTHLY 5% Effective 7/1/2024 Effective July 1, 2024 Page 1 of 32024-06-12 Item #08Q Page 32 of 87 Exhibit A Salary Schedule for Fiscal Year 2024-25 City of Encinitas 5% Effective 7/1/2024 Effective July 1, 2024 Classification Title MIN. MAX. MIN. MAX. Finance Technician I 25.4933 34.1633 4,419 5,922 Finance Technician I - Confidential 25.9743 34.8078 4,502 6,033 Finance Technician II 26.5171 37.3122 4,596 6,467 Finance Technician II - Confidential 27.0174 38.0161 4,683 6,589 Finance Technician III 28.7489 40.4525 4,983 7,012 Finance Technician III - Confidential 29.2913 41.2158 5,077 7,144 Fire Administrative Manager 49.0294 72.4389 8,498 12,556 Fire Chief 75.6176 123.1732 13,107 21,350 Fire Marshal 53.1843 82.5061 9,219 14,301 Fleet Maintenance Supervisor 37.1252 52.2389 6,435 9,055 Geographic Information Systems Analyst I 33.7743 47.5239 5,854 8,237 Geographic Information Systems Analyst II 38.0182 56.1704 6,590 9,736 Geographic Information Systems Analyst III 40.1436 59.3104 6,958 10,280 Geographic Information Systems Technician I 25.4933 34.1633 4,419 5,922 Geographic Information Systems Technician II 28.7489 40.4525 4,983 7,012 Heavy Equipment Mechanic I 25.4933 34.1633 4,419 5,922 Heavy Equipment Mechanic II 28.7489 40.4525 4,983 7,012 Heavy Equipment Mechanic III 30.9801 43.5921 5,370 7,556 Homeless Solutions Manager 51.3391 79.6441 8,899 13,805 Housing Services Manager 51.3391 79.6441 8,899 13,805 Human Resources Director 73.0205 118.9422 12,657 20,617 Human Resources Analyst I 34.4115 48.4208 5,965 8,393 Human Resources Analyst II 37.8256 53.2245 6,556 9,226 Human Resources Analyst III 40.9010 60.4295 7,090 10,474 Human Resources Manager 49.0294 72.4389 8,498 12,556 Human Resources Specialist 31.5647 44.4146 5,471 7,699 Human Resources Technician I 25.9743 34.8078 4,502 6,033 Human Resources Technician II 27.0174 38.0161 4,683 6,589 Information & Technology Director 73.0205 118.9422 12,657 20,617 Information Technology Analyst I 33.7743 47.5239 5,854 8,237 Information Technology Analyst II 38.0182 56.1704 6,590 9,736 Information Technology Analyst III 40.1436 59.3104 6,958 10,280 Information Technology Project Manager 43.0664 63.6286 7,465 11,029 Information Technology Supervisor 45.7778 67.6347 7,935 11,723 Information Technology Technician I 25.4933 34.1633 4,419 5,922 Information Technology Technician II 28.7489 40.4525 4,983 7,012 Lead Inspector 40.1436 59.3104 6,958 10,280 Management Analyst I 34.4115 48.4208 5,965 8,393 Management Analyst II 37.8256 53.2245 6,556 9,226 Management Analyst III 40.9010 60.4295 7,090 10,474 Marine Safety Captain 48.4449 71.5756 8,397 12,406 Marine Safety Lieutenant 35.7420 50.2927 6,195 8,717 Marine Safety Sergeant 32.7848 46.1312 5,683 7,996 Mobility Manager 40.9010 60.4295 7,090 10,474 Park Operations Manager 51.3391 79.6441 8,899 13,805 Parks & Beach Supervisor I 33.7743 47.5239 5,854 8,237 Parks & Beach Supervisor II 37.1252 52.2389 6,435 9,055 Parks, Recreation & Cultural Arts Director 73.0205 118.9422 12,657 20,617 HOURLY MONTHLY Page 2 of 32024-06-12 Item #08Q Page 33 of 87 Exhibit A Salary Schedule for Fiscal Year 2024-25 City of Encinitas 5% Effective 7/1/2024 Effective July 1, 2024 Classification Title MIN. MAX. MIN. MAX. Payroll Specialist 31.5647 44.4146 5,471 7,699 Planner I 28.7489 40.4525 4,983 7,012 Planner II 30.9801 43.5921 5,370 7,556 Planner III 33.7743 47.5239 5,854 8,237 Planner IV 38.0182 56.1704 6,590 9,736 Planning Manager 55.9837 86.8492 9,704 15,054 Principal Engineer 55.9837 86.8492 9,704 15,054 Principal Planner 53.4007 82.8424 9,256 14,359 Program Administrator 43.0664 63.6286 7,465 11,029 Program Assistant I 20.8067 27.8829 3,607 4,833 Program Assistant I - Confidential 21.9920 28.4090 3,675 4,924 Program Assistant II 25.4933 34.1633 4,419 5,922 Program Assistant II - Confidential 25.9743 34.8078 4,502 6,033 Program Assistant III 26.5171 37.3122 4,596 6,467 Program Assistant III - Confidential 27.0174 38.0161 4,683 6,589 Program Coordinator 28.7489 40.4525 4,983 7,012 Public Works Director 73.0205 118.9422 12,657 20,617 Recreation Services Manager 51.3391 79.6441 8,899 13,805 Recreation Supervisor I 30.9801 43.5921 5,370 7,556 Recreation Supervisor II 33.7743 47.5239 5,854 8,237 Risk/Safety Analyst I- Confidential 34.4115 48.4208 5,965 8,393 Risk/Safety Analyst II-Confidential 37.8256 53.2245 6,556 9,226 Risk/Safety Analyst III- Confidential 40.9010 60.4295 7,090 10,474 Senior Deputy Fire Marshal 40.1436 59.3104 6,958 10,280 Senior Engineer 53.4007 82.8424 9,256 14,359 Senior Finance Analyst 43.0664 63.6286 7,465 11,029 Senior Human Resources Analyst 43.0664 63.6286 7,465 11,029 Senior Ocean Lifeguard 25.9972 36.5806 4,506 6,341 Senior Management Analyst 43.0664 63.6286 7,465 11,029 Senior Payroll Specialist 34.4115 48.4208 5,965 8,393 Senior Planner I 45.7778 67.6347 7,935 11,723 Senior Planner I - Mobility Coordinator 45.7778 67.6347 7,935 11,723 Senior Planner II 49.0294 72.4389 8,498 12,556 Senior Risk Analyst 43.0664 63.6286 7,465 11,029 Special Events & Projects Supervisor 37.8256 53.2245 6,556 9,226 Stormwater Environmental Specialist I 30.9801 43.5921 5,370 7,556 Stormwater Environmental Specialist II 33.7743 47.5239 5,854 8,237 Stormwater Environmental Specialist III 37.1252 52.2389 6,435 9,055 Superintendent 51.3391 79.6441 8,899 13,805 Sustainability Manager 51.3391 79.6441 8,899 13,805 Utility & Maintenance Field Supervisor 37.1252 52.2389 6,435 9,055 Utility & Maintenance Supervisor I 38.7356 57.2301 6,714 9,920 Utility & Maintenance Supervisor II 40.9010 60.4295 7,090 10,474 Utility & Maintenance Technician I 25.4933 34.1633 4,419 5,922 Utility & Maintenance Technician II 26.5171 37.3122 4,596 6,467 Utility & Maintenance Technician III 28.7489 40.4525 4,983 7,012 Utility & Maintenance Technician IV 30.9801 43.5921 5,370 7,556 HOURLY MONTHLY Page 3 of 32024-06-12 Item #08Q Page 34 of 87 EXHIBIT A Classification Title MIN. MAX. MIN. MAX. Fire Battalion Chief 39.4872 61.2578 9,582 14,865 Administrative Fire Battalion Chief (40 hour per week)60.8087 94.3344 10,541 16,352 4% Effective July 1, 2024 HOURLY MONTHLY Encinitas Fire Battalion Chief Association IAFF Local 5376 Salary Schedule for Fiscal Year 2024-25 2024-06-12 Item #08Q Page 35 of 87 EXHIBIT A Classification Title MIN. MAX. MIN. MAX. Probationary FF/Paramedic 32.4165 32.4165 7,866 7,866 Firefighter/Pramedic III 38.0892 38.0892 9,243 9,243 Firefighter/Pramedic II 38.8994 38.8994 9,439 9,439 Firefighter/Paramedic I 40.1154 40.1154 9,734 9,734 Fire Engineer 40.9117 40.9117 9,928 9,928 Fire Captain 48.0052 48.0052 11,649 11,649 Administrative Fire Captain (40 hour per week)73.9258 73.9258 12,814 12,814 3% Effective January 1, 2025 HOURLY MONTHLY Encinitas Firefighters Association (EFFA) Salary Schedule for Fiscal Year 2024-25 2024-06-12 Item #08Q Page 36 of 87 EXHIBIT A Grade Classification Title MIN.MAX. L1 Ocean Lifeguard I 18.3276 23.3912 L2 Ocean Lifeguard II 20.6636 26.3726 L3 Ocean Lifeguard III 23.3577 31.3016 Grade Classification Title MIN.MAX. C3 Recreation Leader I 16.5000 17.5000 C3 Recreation Leader II 17.1429 19.0000 Grade Classification Title MIN.MAX. C4 Recreation Coordinator 18.3276 23.3913 C5 Senior Recreation Coordinator 22.4559 28.6599 Grade Classification Title MIN.MAX. C6 Facilities Technician 19.0000 25.4618 I3 Intern 16.5375 19.1442 General - City Parks, Recreation & Cultural Arts Continued Parks, Recreation & Cultural Arts HOURLY City of Encinitas Salary Schedule for Fiscal Year 2024-25 Effective July 1, 2024 Marine Safety Approved by City Council Effective 7/1/2024 Contract Employees:Part-Time, Reserve, Seasonal, Temporary 2024-06-12 Item #08Q Page 37 of 87 LIST NO. STRATEGIC PLAN PRIORITY PROJECT NAME PROJECT NUMBER GRANT / OTHER FUNDING STUDY/ INITIAL EVAL.DESIGN CONST.NOTES / UNFUNDED ESTIMATE A Pacific View Improvements CF20D No Complete in FY 24 B Traffic Signal Modifications (Left Turn Permissive Traffic Signal Improvements)CS02G GRANT In Construction C Wales Drive / Crest Drive Gate CS23E No In Construction D Streetlight Conversion Project CS17H GRANT In Construction E Leucadia Streetscape Segment C West (Jupiter St - La Costa Ave)CS23D OTHER In Construction F Santa Fe Drive Corridor Improvements (Western Phase)CS19E GRANT In Construction G Saxony Rd & Quail Gardens Dr Mobility Enhancements Project CS24E No Start CON in FY 24/25 H Emergency Bicycle Safety Enhancements Project CX24A No Start CON in FY 24/25 I Olivenhain Trail Enhancements Project (Rancho Santa Fe Road Fencing)CP23E GRANT Start CON in FY 24/25 J Cardiff Sports Park LED Retrofit Project CP23C GRANT Start CON in FY 24/25 K Santa Fe Drive Corridor Improvements (Eastern Phase)CS19E GRANT Start CON in FY 24/25 L Beacon's Beach Parking Lot CP22A No Start CON in FY 24/25 M Highway 101 Walkway to Solana Beach CS22D GRANT Start CON in FY 24/25 N Scott Valley Park Playground Replacement Project CP24A GRANT Start CON in FY 24/25 O Wiro & Orpheus Park Playground Replacement Project CP23D GRANT Start CON in FY 24/25 P Glen Park Playground Replacement Project CP24B No Start CON in FY 24/25 Q Citywide Leading Pedestrian Intervals (LPI) Project CS22B GRANT Start CON in FY 24/25 R Protected Intersection at S El Camino Real & Santa Fe Dr CS25B No N/A Start CON in FY 24/25 S Citywide Pedestrian Crossing Upgrades CS23G GRANT TBD T Beach Staircase Access Refurbishment (Grandview)CP23A No TBD U ADA Parking Lot Upgrades (Glen Park)CF18A No TBD V North Coast Highway 101 Drainage Improvements CD23A GRANT -$15,400,000 W Leucadia Blvd Roundabout at Hygeia (Roundabout Only) CS18B OTHER -$1,550,000 X Leucadia Blvd Roundabout at Hygeia (Pedestrian Improvements Only)CS18B OTHER -$800,000 Y Leucadia Streetscape Segment A South & Drainage (A St - Marcheta St)TBD TBD -$4,033,000 Z Leucadia Streetscape Segment B & Drainage (Basil St - Jupiter St)TBD TBD -$27,250,000 AA Birmingham Drive Complete Streets CS17B No -$27,000,000 BB Verdi Pedestrian Undercrossing CS16E No -$17,440,000 CC Lake Drive Storm Drain Replacement TBD No -$6,540,000 DD Citywide Rail Corridor Quiet Zone CS23B No -$12,535,000 EE Leucadia At-Grade Rail Crossings CS24B No -$6,000,000 FF Recreational Trails Development (Trail 82 - Rancho Santa Fe Road)CP00F OTHER -$4,905,000 GG La Costa Avenue Pedestrian Path CS24C No N/A -$1,000,000 HH Safety & Mobility Improvements in the Vicinity of Housing Element Sites WC23B No --TBD II La Costa Avenue Improvements CS11C OTHER --TBD JJ Vulcan Pedestrian Path CS24D No --TBD KK Leucadia Watershed Master Plan (Implementation - Vulcan)WD19E No --$32,700,000 LL Leucadia Blvd / I-5 Bridge Rail Repair TBD No --TBD MM Beach Staircase Access Refurbishment (Swami's)CP26A No --$550,000 NN Orpheus Park / Paul Ecke Central Bike Project CS25C No --TBD OO S Coast Highway 101 Pedestrian Crossing at Solana Beach TBD No --TBD PP San Elijo Bridge Rehabilitation (Highway Bridge Program)CS23F GRANT ---TBD General Mobility Improvements CS18E No Safe Routes to School Sidewalk Program CS01E No ADA Curb Ramp Project (Transition Plan Compliance)CS16C No Street Light & Traffic Signal Replacements CS17G OTHER Annual Street Overlay CS25A OTHER * Bolded projects are NEW capital projects that have been created since the FY 23-24 CIP budget adoption on June 21, 2023 $200,000 $45,000 $4,450,000 Complete Funded / Not Complete Partially Unfunded Unfunded $50,000 ENGINEERING CAPITAL PROJECTS BY STATUS FY 2024-2025 Date Updated: 05/31/2024 ANNUAL PROJECTS ANNUAL BUDGET $300,000 Attachment 4 2024-06-12 Item #08Q Page 38 of 87 Interactive Story - Click on graphics to explore the data $135,149,153.00 Revenues in 2025 General Fund Other ESD Operatio... Internal Ser... CSD Operatio... Infrastructu... $131,897,443.00 Expenses in 2025 General Fund Other Lighting and... CSD Operatio... Debt Service... Internal Ser... The Fiscal Year 2024-25 budget supports Council's mission to lead the preservation and evolution of our City and provide innovative services that enhance the quality of life for residents, visitors, businesses, and our communities. All Funds The FY 2024-25 Operating Budget is balanced, and all policy-directed reserves are fully funded. The Operating Budget reflects a total City budget of $135.1 million in revenue that funds $131.9 million in expenses. FY 2024-25 capital and work project appropriations total $13.6 million. The CIP plan through FY 2028-29 programs $58.0 million in capital improvement and work projects over the next five years. Of this, the General Fund is planned to contribute $11.4 million, or 20 percent of total funding. General Fund The General Fund operating budget is $107.5 million in revenue that funds $100.1 million in expenditures. Debt service transfers total $5.5 million, and General Fund transfers to capital improvement and work projects total $4.1 million. The City has an established financial policy regarding maintaining adequate financial reserves. The General Fund contingency reserve is fully funded at 20 percent of operating expenditures ($20.0 million). The budget stabilization reserve is fully funded at two percent of revenue ($2.2 million). Budget in Brief Introduction to Fiscal Year 2024-25 Operating and Capital Budgets Estimated Revenues by Fund All Funds - excludes transfers Proposed Expenditures by Fund All Funds - excludes transfers Attachment 5A 2024-06-12 Item #08Q Page 39 of 87 With approval of the Proposed Budget, the FY 2024-25 General Fund unassigned ending fund balance is projected to be $0.6 million on June 30, 2025. Budget Priorities The FY 2024-25 Budget reflects City Council’s priorities to provide critical services to the community and to fund needed capital improvement projects. Operating The operating budget maintains current levels of service while meeting debt, pension, and contractual obligations. It also includes funding for the following enhancements discussed during the current Fiscal Year 2023-24: $777K second HOPE team ($335K start up with $442K ongoing) $200K Homeless Solutions Coordinator, new 1.0 full-time equivalent (FTE) position added at midyear $650K Pacific View Arts Center operations, part-time personnel, maintenance, equipment, supplies for new facility and programs, and $347K debt service for new 2024 Bond (Land Purchase). At the second budget workshop on April 17, 2024, City Council added $98,500 for: $50K On-call drainage consulting (Q3) in Engineering capital projects division $40K Additional funding for visitor center and local business promotion (Chamber of Commerce) in economic development $8.5K Heritage Tree Lighting (Encinitas Historical Society) in recreation programs, holiday parade. At the budget introduction on May 15, 2024, City Council directed staff to allocate $50,000 for the Fire Station #6 assistance to identify a permanent location and to determine appropriate equipment including a type 1 Fire Engine. The operating budget includes a one-time $0.05 million increase in Fire Operations contracts and services. Capital and Work Projects Prior to budget workshops, staff programmed $0.54 million for the following mandated or restricted items in the capital budget: $0.25M Open Space Plan Update (WC25A), new item with State mandate $0.24M Park Improvement Projects (CP04G), annual transfer of cell tower lease revenue $0.05M ADA Curb Ramp Project (CS16C), Transition Plan compliance. At the second budget workshop on April 17, 2024, Council programmed $3.41 million in funding for the following projects: $1.80M Extend N101 Drainage to Grandview (CD23A), existing project with new Scope $0.80M Protected Intersection (CS25B), new project - Design & Construction Estimate $0.30M General Mobility (CS18E), annual funding in approved CIP Plan $0.20M Safe Routes to School (CS01E), annual funding in approved CIP Plan $0.15M Native Plant Ordinance Related Activities (WC25B), demonstration garden, education, etc. $0.10M Encinitas Habitat Stewardship Program (WC11A) $0.06M Orpheus/Paul Ecke Central Bike Project, new project (CS25C). Attachment 5A 2024-06-12 Item #08Q Page 40 of 87 At the budget introduction on May 15, 2024, City Council directed staff to allocate $150,000 towards the development of a simplified Native Plant Ordinance (Revised Project Scope) with the use of a consultant. The proposed capital budget includes a one-time $0.15 million increase for a new Native Plant Ordinance - Revised Scope (WC25C) work project. While workshop discussions focus on General Fund appropriations for the new fiscal year, it is important to note that the City's Capital Improvement Program budget is not limited to the above projects. The CIP budget includes multiple restricted funding sources, like gas tax and impact fees, that contribute to capital and multi-year work projects. The FY 2024-25 budget only shows new amounts to be added to projects. Many projects have unspent available budget carried forward from prior years, representing funding that is still committed to the project. Available project budget totals are reported in mid-year budget status and year-end reports. Community Profile Elected Officials The City is governed by a City Council consisting of a mayor and four council members under the Council- Manager form of government. The City Council acts as the Board of Directors for the San Dieguito Water District, the Encinitas Housing Authority, and the Encinitas Public Financing Authority. Attachment 5A 2024-06-12 Item #08Q Page 41 of 87 About Encinitas The City of Encinitas was incorporated in October 1986 as a general law city, bringing together the communities of New and Old Encinitas, Cardiff-by- the-Sea, Leucadia, and Olivenhain. Encinitas is located in northern San Diego County approximately 25 miles north of downtown San Diego on the Southern California coast. The City with an estimated population of 61,000 covers approximately 21 square miles and is predominately residential with two major commercial corridors. Demographics From January 1, 2023 to January 1, 2024 the population decreased 0.37 percent in Encinitas and increased 0.07 percent in San Diego County. The population has remained relatively stable over the last ten years, with a dip occurring in 2009 during the Great Recession. Source: State Department of Finance Population Estimates (E-1) California's per capita personal income increased 3.62 percent over the prior FY 2022-23. Source: State Department of Finance The median household income in Encinitas has grown steady over the last 20 years. The 2020 dip was due to the COVID pandemic as many businesses were temporarily closed. Source: 2020 Census.gov via Datacommons.org The median age has increased slightly over the last ten years. Source: 2020 Census.gov via Datacommons.org 61,028 Demographics in 2024 0 20K 40K 60K 80K 2000 2012 2024 142,506 Demographics in 2024 0 50K 100K 150K 2000 2017 2024 42.7 Demographics in 2023 0 10 20 30 40 50 2002 2013 2023 City Population Median Income Median Age Attachment 5A 2024-06-12 Item #08Q Page 42 of 87 Operating Budget 2024-25 Strategic Planning Framework An effective budget process establishes broad goals to guide government decision making. Each year, the City Council reviews its priorities for the year at its annual City Council Retreat. A City Council priority is defined as a topic that will receive significant attention and budget consideration during the year. Typically, priorities have a one to three-year time limit, although some may continue beyond that time. On Tuesday, February 6, 2024, the City Council selected the following focus areas to include as the categories for its highest priorities: Effective City Services & Reliable Infrastructure Housing & Affordability Engagement & Education Ensuring & Preserving Community Character Environmental Health & Leadership Mobility & Alternate Modes City Council Goals 100% affordable housing (choose site, define project, explore funding options) Prioritize remaining streetscape elements (complete C, Stormwater, B, A South) Safe, legal railroad crossings and establish citywide quiet zones Expand habitat stewardship and explore open space preservation (identify resources to fund and better manage our natural resources) Consider Infrastructure Task Force prioritization and funding recommendations Build on the bike safety emergency declaration goals and implement Vision Zero Public Involvement The budget process also should incorporate a long-term perspective and promote effective communication with stakeholders. On November 16, 2022, City Council directed staff to proceed with the formation of a one-year community task force to evaluate the City’s infrastructure (roads, bridges, facilities, etc.) backlog, prioritization, and anticipated financial needs and opportunities for funding for future infrastructure. The Infrastructure Task Force (ITF) was comprised of seven members of the community, by appointment of the City Council, from a variety of backgrounds, with interest and expertise in Capital Infrastructure Projects. This group advised City Council and worked with the City Engineer and City staff to meet the goals and objectives of the Task Force. The work of the ITF has concluded, and the Final Report was presented to City Council on February 28, 2024. At that meeting, Council approved outreach and ballot writing services for a potential one-cent local transactions and use (sales) tax measure. No additional revenues are projected in the FY 2024-25 budget, given the unknowns Attachment 5A 2024-06-12 Item #08Q Page 43 of 87 of whether City Council would place the measure on the November 2024 ballot and whether voters would decide to implement the tax. During a special City Council meeting on March 20, 2024, Q3 Consulting presented their Leucadia Area Watershed Drainage Feasibility Study which was completed in December 2022. The study modeled existing flooding in three subareas and provided the recommendations to address a 100-year storm. Budget Workshops, offering opportunities for the public to provide input on budget priorities, were held at a special City Council meetings on March 27 and April 17, 2024. During the workshops, staff presented the five- year financial forecast for the General Fund, and Council provided direction on the City's Capital Improvement Program including prioritization, timelines and project funding. On May 15, 2024, staff introduced the proposed FY 2024-25 operating budget and CIP for review, public input, and City Council direction. Staff has incorporated two changes directed by City Council into the operating and capital budgets proposed for adoption. On May 22, 2024, City Council approved Resolution 2024-60 ordering the submission to the qualified electors of the City of a ballot measure relating to a one-cent per dollar transactions and use (sales) tax, requesting that the San Diego Board of Supervisors authorize the County of San Diego Registrar of Voters to render specified services to the City of Encinitas relating to the conduct of the election, and directing the City Attorney to prepare an impartial analysis. This measure would be included on the November 5, 2024, General Municipal Election Ballot. On June 12, 2024, staff recommended adoption of the proposed operating and capital budgets via resolution. All Funds The following interactive graph summarizes revenue and expense trends by showing actuals for two prior fiscal years, the current year original budget, and the proposed budget. Interfund transfers are not included. Use the filter to drill into different funds. Click on the column to see revenues by source or expenditures by type. Use the Back or Reset buttons to return to the original graph. Clicking pie graphs opens a new browser tab that can be closed after exploring the data. Attachment 5A 2024-06-12 Item #08Q Page 44 of 87 Updated On 5 Jun, 2024 Reset Broken down by Types History Funds  Visualization FY22 Actual FY23 Actual FY24 Original Budget FY24 Revised Budget FY25 Budget Fiscal Year 0.0 50.0M 100.0M DollarsBack Revenues Expenses Sort By Chart of Accounts   Category 2025 Taxes $97,638,000.00 Charges for services $20,866,576.00 Intergovernmental $9,982,544.00 Other revenue $4,248,615.00 Use of money and property $1,677,318.00 Other $736,100.00 Category 2025 Fire and Marine Safety $24,106,849.00 Law Enforcement (contract)$19,523,389.00 Public Works $16,962,563.00 Parks Recreation & Cultural Arts $12,182,343.00 Development Services $11,459,351.00 Other $47,662,948.00 Services Provided by Each Department Administrative Services - Manages safety programs, insurance, claims, attorney contracts and ongoing litigation. Coordinates budget for City Attorney. Major Revenues by Source All Funds - excludes transfers Major Expenditures by Department All Funds - excludes transfers Attachment 5A 2024-06-12 Item #08Q Page 45 of 87 City Attorney - Represents the City of Encinitas and the San Dieguito Water District. The City Attorney advises the City Council, City Departments and City Commissions regarding legal matters of concern to the City and its operations. City Council - The governing body of the City. The role of the Mayor and City Council is to determine policy for the City. City Manager's Office - Responsible for the administration and oversight of the City organization, including the hiring of the City's workforce, supervising City departments, and ensuring that the City Council's priorities are met. City Clerk - Responsible for coordinating the legislative process including agenda management, administering city elections, and records management. Development Services - Contributes to City Council's vision for community planning to maintain safe and livable communities through well-maintained infrastructure and facilities, strong public safety, and significant environmental standards while achieving diverse and affordable housing for present and future generations. Engineering - Responsible for the comprehensive oversight of major City infrastructure projects, transportation network and other initiatives. Finance - Manages the City's fiscal resources to protect and enhance the City's financial position. Fire & Marine Safety - Provides a wide array of public safety services including fire protection, emergency response, medical aid, fire prevention, disaster preparedness, search and rescue, beach lifeguard services and community education programs. Human Resources - Responsible for recruitment and onboarding new employees, benefits administration, employee development, labor relations, organization and workforce planning, and policy development. Information Technology - Provides innovative and secure technical solutions and support that promote efficient delivery of public service. Law Enforcement - Services are provided through the City's contract with the San Diego County Sheriff. The Station Captain serves as th City's Chief of Police. Non-Departmental and Debt Service - Created to appropriate funds for those activities beneficial on a citywide basis and not directly chargeable to any one department or division. Parks, Recreation, and Cultural Arts - Responsible for recreation and arts programs, maintenance of recreational areas, public art streetscapes, animal services, Commission support, and oversight of the Encinitas Ranch Golf Authority. Public Works - Provides street, public right of way, and above ground stormwater system maintenance and manages the City's facilities, vehicle fleet, and heavy equipment. Utilities - The Encinitas Wastewater Collection Division provides sewer maintenance and operation services and is incuded in the City budget. The San Dieguito Water District provides potable (drinking) water services and is budgeted separately. General Fund The General Fund is the City’s primary operating fund. It accounts for basic services such as public safety, public works, planning and development, park and street maintenance, and code enforcement, along with the administrative services required to support these programs. The FY 2024-25 Proposed Budget for the General Fund includes: Estimated revenues of $107.5 million Attachment 5A 2024-06-12 Item #08Q Page 46 of 87 Operating expenditures of $100.1 million Capital and work project funding of $4.1 million (transfers out to CIP budget) Debt service payments of $5.5 million, including new debt issuance for land purchase (transfers out to debt funds) Policy-directed budget stabilization reserves (two percent of revenue, $2.2 million) and contingency reserves (20 percent of expenditures, $20.0 million), and Projected General Fund unassigned ending fund balance of $0.6 million for June 30, 2025. Updated On 5 Jun, 2024 Reset Broken down by Types General Fund History  Visualization FY22 Actual FY23 Actual FY24 Original Budget FY24 Revised Budget FY25 Budget Fiscal Year 0.0 100.0M 50.0M DollarsBack Revenues Expenses Sort By Chart of Accounts   Where does the money come from?How is the money is spent? General Fund revenue primarily composed of property tax, sales tax, and transient occupancy tax. Nearly 87 percent of General Fund revenue is generated from taxes. Municipalities group similar expenses by type or category to facilitate budget presentation, monitoring, and reporting. The top three categories represent over 99 percent of the total General Fund expenditures. Category 2025 Taxes $93,152,500.00 Charges for services $10,828,594.00 Use of money and property $1,088,080.00 Intergovernmental $945,530.00 Other revenue $764,845.00 Other $736,100.00 Category 2025 Personnel $52,646,413.00 Contracts and services $44,912,975.00 Materials and supplies $2,205,747.00 Debt / finance $195,857.00 Capital outlay $92,000.00 Major Revenues by Source General Fund - excludes transfers Expenditures by Type General Fund - excludes transfers Attachment 5A 2024-06-12 Item #08Q Page 47 of 87 $107,515,649.00 Revenues in 2025 Non-Departme... Other Fire and Mar... Engineering Parks Recrea... Development ... $100,052,992.00 Expenses in 2025 Fire and Mar... Law Enforcem... Parks Recrea... Other Public Works Development ... Staffing No increases to the number of City employees are proposed. Scheduled advancements and reclassifications needed to support enhanced services and continuity of operations are included in the FY 2024-25 personnel budget. The number of employees is measured in full-time equivalent (FTE) units where one FTE works 2,080 hours per year. The City’s employee count totaled 248.40 FTE on July 1, 2023. A new Homeless Services Coordinator position was approved midyear on February 28, 2022, bringing the FY 2023-24 total to 249.40 FTE. The FY 2024-25 total remains at 249.40 FTE (excluding San Dieguito Water District personnel). Capital Outlay - Vehicle Replacement Program Separate internal service funds purchase and own all City vehicles. The operating budget includes an estimate of the amount expected for replacements scheduled in the next year. No increases to the number of vehicles in the City fleet are proposed. The Internal Service Funds – Vehicle Replacement Program (Resolution 2024-65 Exhibit D) authorizes Public Works to purchase the specified replacement vehicles, without further action of the City Council, per the Vehicle Usage and Replacement Program Administrative Policy (F017) approved January 2001 by the City Council. Any purchases that are not included in the original budget listed here (additions, early replacements, transfers, etc.), require the approval of City Council. Although fire apparatus replacement expenses totaling $3.5 million are included in the proposed budget, potential lease revenue is not budgeted until financing is requested and approved by City Council. Revenue by Department General Fund - excludes transfers Expenditures by Department General Fund - excludes transfers Attachment 5A 2024-06-12 Item #08Q Page 48 of 87 Capital Improvement Program (CIP) Encinitas monitors and improves City infrastructure including roads, sidewalks, drainage systems, trails, and parks. City Projects are prioritized in strategies laid out by Council's Strategic Planning Framework. While most capital projects are managed by the Engineering Department, the CIP plan also includes facilities, parks and beach projects, and multi-year studies (work projects) managed by other departments. Funding for projects is provided by existing fund balance, future projected cash flows, and loan proceeds. Projects shown in future years are programmed into the CIP plan and are not funded until each subsequent budget adoption. The proposed plan through FY 2028-29 contains $58.0 million in capital improvement/work projects over the next five years. Of the five-year total, $13.6 million is programmed for FY 2024-25. The proposed FY 2024-25 capital budget includes $4.1 million from the General Fund, with all other funds totaling $9.5 million. Each year the CIP and Traffic Engineering teams execute a Work Plan based on funded projects. For information about ongoing projects visit the City Projects & Initiatives page on the City website, which features current projects, includes a list of CIP Projects by Status, and Capital Projects Grant Funding Status. Attachment 5A 2024-06-12 Item #08Q Page 49 of 87 $13,584,120.00 Type in 2025 Streets and Rail Cor... Wastewater Other Studies Mobility Improvement... Drainage Category 2025 101 - General Fund $4,098,000.00 522 - Encinitas Sanitary Div $2,931,322.00 211 - TransNet $2,369,600.00 201 - State Gasoline Taxes $2,072,448.00 512 - Cardiff Sanitary Div $1,279,578.00 Other $833,172.00 Category 2025 Annual Street Overlay $2,369,600.00 N101 Drainage Improvements *…$1,800,000.00 Annual Street Overlay - RMRA …$1,538,591.00 Encina Plant Improvements $1,264,922.00 Collection System Rehabilitation $1,080,000.00 Other $5,381,007.00 Powered by OpenGov CIP by Type Totals show funding appropriated in FY 2024-25 only. Chart does not reflect budget carryforward for projects still in progress. Data Updated Jun 03, 2024, 4:41 PM CIP by Funding Source The General Fund will transfer $4.1 million to fund capital projects in FY 2024… CIP by Project Projects funded in prior years do not appear below. Attachment 5A 2024-06-12 Item #08Q Page 50 of 87 All Funds The FY 2024-25 operating budget reflects a total City budget of $135.1 million in revenue that funds $131.9 million in expenses. Capital and work project appropriations total $13.6 million. The General Fund operating budget is $107.5 million in revenue that funds $100.1 million in expenditures. Debt service transfers total $5.5 million, and General Fund transfers to capital improvement and work projects total $4.1 million. The following charts and tables summarize total resources budgeted by the City. Interfund transfers are excluded in order to ensure that entity-wide budget totals reflect real economic activity and that double- counting does not occur. For additional detail, please see: Fund Balance for total revenue, expense, and transfers by fund Revenues, Expenditures, and Transfers for General Fund budget discussions, and Capital Program for funding sources and project types included in the capital budget. Summary of Revenues and Expenses by Fund $135,149,153.00 Revenues in 2025 General Fund Other ESD Operatio... Internal Ser... CSD Operatio... Infrastructu... $131,897,443.00 Expenses in 2025 General Fund Other Lighting and... CSD Operatio... Debt Service... Internal Ser... Consolidated Financial Schedule Revenues by Fund All Funds - excludes transfers Expenses by Fund All Funds - excludes transfers Attachment 5B 2024-06-12 Item #08Q Page 51 of 87 Summary of Financing Sources and Uses $135,149,153.00 Revenues in 2025 Taxes Other Use of money... Other revenu... Intergovernm... Charges for ... $131,897,443.00 Expenses in 2025 Fire and Mar... Law Enforcem... Public Works Other Development ... Parks Recrea... Revenue by Source - All Funds - excludes transfers 2024-25 Budget Taxes Property Tax $68,228,750 Documentary Transfer Tax $650,000 Sales and Use Tax $17,298,000 Transient Occupancy Tax $6,375,000 Benefit Assessments $1,134,250 Franchise Tax $3,202,000 Excise Tax $750,000 TAXES TOTAL $97,638,000 License and permits $371,100 Intergovernmental $9,982,544 Charges for services $20,866,576 Fines, forfeitures and penalties $365,000 Use of money and property $1,677,318 Other revenue $4,248,615 TOTAL $135,149,153 Expenses by Department - All Funds - excludes transfers 2024-25 Budget City Council $538,237 City Attorney $965,000 City Manager Administration $2,415,538 Economic Development $250,500 CITY MANAGER TOTAL $2,666,038 Human Resources $1,476,974 Information Techology $5,476,868 Administrative Services $5,974,924 City Clerk Administration $618,370 Elections $205,500 CITY CLERK TOTAL $823,870 Revenue by Source All Funds - excludes transfers Expenses by Department All Funds - excludes transfers Attachment 5B 2024-06-12 Item #08Q Page 52 of 87 2024-25 Budget Finance $3,105,471 Development Services Environmental $945,231 Administration $680,544 Land Development $3,501,593 Regulatory Permits $188,461 Advanced Planning and Housing-Policy $1,988,808 Building and Code $3,522,407 Parking Citation $229,841 CDBG Programs $128,794 Housing Programs $273,672 DEVELOPMENT SERVICES TOTAL $11,459,351 Engineering CIP Engineering $2,400,411 Traffic Engineering $1,420,877 Engineering Inspections $3,323,224 LLD Administration $298,577 ENGINEERING TOTAL $7,443,089 Law Enforcement (contract)$19,523,389 Fire and Marine Safety Fire Administration $769,992 Fire Operations $19,513,678 Loss Prevention $925,709 Disaster Preparedness $336,725 Marine Safety $2,206,311 Jr Lifeguards $354,434 FIRE AND MARINE SAFETY TOTAL $24,106,849 Public Works Administration $656,581 Solid Waste Management $712,770 Used Oil HHW Grant Program $135,630 Recycling Programs $267,875 Street Maintenance $5,082,187 Fac Maint Civic Center $649,281 Fac Maint Fire Stations $410,765 Fac Maint Public Works Yard $270,980 Fac Maint Library $456,922 Fac Maint Community Center & Park $715,317 Stormwater Maintenance $752,790 Stormwater Flood Control $103,450 Stormwater Program $971,149 Fleet Maintenance $5,776,866 PUBLIC WORKS TOTAL $16,962,563 Utilities Wastewater Administration $288,454 Wastewater Operations $7,200,946 Wastewater Fleet $53,000 UTILITIES TOTAL $7,542,400 Parks Recreation & Cultural Arts Administration $1,609,231 Park Maintenance $4,423,115 Beach Maintenance $841,359 Attachment 5B 2024-06-12 Item #08Q Page 53 of 87 2024-25 Budget Trail Maintenance $419,790 Recreation Programs $654,756 Community Center $888,981 Community Center Programs $220,901 Community Center Facility Rentals $224,150 Senior Center $25,500 Senior Center Programs $426,770 Recreation Facilities Programs & Events $752,833 Recreation Facility Rentals $98,152 Pacific View Arts Center $219,904 Cultural Arts $1,376,901 PARKS RECREATION & CULTURAL ARTS TOTAL $12,182,343 Non-Departmental Central Purchases $72,628 Shared Expenses $4,835,649 NON-DEPARTMENTAL TOTAL $4,908,277 Non-Dept Debt Service $6,741,800 TOTAL $131,897,443 Powered by OpenGov Attachment 5B 2024-06-12 Item #08Q Page 54 of 87 All City Funds The FY 2024-25 budget across all City funds includes estimated revenues of $135.1 million, a decrease of $1.9 million, or 1.4 percent under the projected FY 2023-24 Revised Budget. With an increase of $6.4 million estimated for the General Fund, the overall decrease is primarily due to $7.1 million in one-time capital grant funding and $2.0 million fire apparatus lease revenue received in FY 2023-24. The top five revenue generating funds include: General Fund. The City's largest and most discretionary fund accounts for 80 percent of the City's total revenue and is primarily funded by property and sales tax. 1. Infrastructure Improvement Fund. This major fund receives revenue from intergovernmental sources like grants and gas taxes, along with the 20 percent share of the City's transient occupancy tax that is restricted to the Coastal Zone Management sub-fund. 2. Cardiff Sanitary Division. Receives revenue from charges for services paid by wastewater customers. Rate studies drive amounts and forecasts. 3. Internal Service Funds. These non-major funds account for goods and services provided by one department or agency to others on a cost reimbursement basis. The Self-Insurance sub- fund receives the majority of revenue, based on a cost-allocation plan. 4. Encinitas Sanitary Division. Receives revenue from charges for services paid by wastewater customers. Rate studies drive amounts and forecasts. 5. Category 2025 General Fund $107,515,649.00 Infrastructure Improvement F…$6,875,025.00 CSD Operations $5,904,990.00 Internal Service Funds $3,117,395.00 ESD Operations $3,056,243.00 Other $8,679,851.00 Revenues Top Five Funds by Estimated Revenue All Funds - excludes transfers Attachment 5C 2024-06-12 Item #08Q Page 55 of 87 General Fund Estimated General Fund revenues total $107.5 million—an increase of $6.4 million, or 6.3 percent, over the current FY 2023-24 Revised Budget. The City forecasts solid revenue growth in FY 2024-25 mostly due to high property values and a rebound in tourism. Updated On 5 Jun, 2024 Reset Broken down by Revenues*General Fund History  Visualization FY22 Actual FY23 Actual FY24 Original Budget FY24 Revised Budget FY25 Budget Fiscal Year 0.0 100.0M -25.0M 25.0M 50.0M 75.0M DollarsBack Taxes License and permits Intergovernmental Charges for services Fines, forfeitures and penalt… Use of money and property Other revenue Other financing sources/uses Sort By Chart of Accounts   Discussion of Revenue Sources Nearly 87 percent of General Fund revenue is generated from taxes. Property tax and sales tax are the major sources. Charges for services, transient occupancy tax, and franchise tax/fees make up the remainder of the top five categories. Excise tax for cannabis retail sales was added in FY 2023-24. For budgeting purposes, sources that contribute to more than ten percent of General Fund revenue are considered major sources. The City contracts with specialized consultants to assist with revenue management, analysis, and forecasting for the two major sources of property tax and Sales, Use and Transactions (SUT) tax. Sources falling below the ten percent threshold are analyzed and managed in-house. One exception is short-term rental transient occupancy tax, where the City contracts with a service that monitors permit and tax remittance compliance. Attachment 5C 2024-06-12 Item #08Q Page 56 of 87 Property Tax (Major) Property Tax is the City’s largest revenue source, representing 62 percent of total General Fund revenue. Proposed Budget For FY 2024-25, staff recommends an increase of $4.0 million, or 6.3 percent, based on projections provided by the City’s property tax consultant HdL Coren & Cone with further analysis by staff. The increase is mostly the result of the annual Proposition 13 inflation adjustment for estimated real property values set at the two percent maximum for FY 2024-25 by the County Assessor’s office (based on the California Consumer Price Index, or CCPI). Real estate trends for calendar year 2023 influence FY 2024-25 property taxes. In general, homes are still selling and for more than their current taxed value. Calendar year 2023 saw a continuation of the downturn in the real estate cycle that began in late spring 2022 when interest rate increases were implemented to slow the rate of inflation. As interest rates increased between 2022 and 2023, markets saw fewer single-family residential home sales, due in part to insufficient supply as homeowners with lower interest rates were reluctant to give up existing homes to search for others with higher prices and higher mortgage rates. (Source: HdL Property Tax Newsletter, Sept 2023.) Projections reflect continued growth, although at a more modest pace due to lower sales activity that will affect the assessed value increases from transfers of ownership. Lower sales volume also results in lower Documentary Transfer Tax. Description Property Taxes are an ad valorem tax imposed on real property (land and permanently attached improvements such as buildings) and tangible personal property (movable property) located within the state. California property tax is based on the value of the property rather than on a fixed amount or benefit to the property or persons. Proposition 13 (Article XIIIA of the California Constitution) limits the real property tax rate to one percent of the property's assessed value. The property tax is paid to the county tax collector and allocated to local taxing agencies—cities, counties, special districts, and school districts— pursuant to a statutory allocation formula. As shown in the chart to the right, the Encinitas General Fund receives 24 cents of each property tax dollar. Attachment 5C 2024-06-12 Item #08Q Page 57 of 87 Historical Data Residential real estate values drive over 87 percent of the City's current $21.9 billion net taxable assessed valuation. Net taxable value for Tax Year 2023-24 increased $1.3 billion, or 6.1 percent over the prior year. The Vehicle License Fee Adjustment Amount (VLFAA) revenue also increases annually in proportion to the growth in gross assessed valuation in a jurisdiction. Over the past 20 years, the City has experienced positive assessed valuation growth each year, resulting in steady property tax revenue growth. Ten years of Assessed Value-Based Revenue by Component is shown in the chart below: Relevant Economic Conditions Statewide, 2023 was a tough year as a shortage of homes for sale and high costs of borrowing continued to have a negative impact on housing inventory and demand. With mortgage rates expected to decline in the next 12 months, home sales should bounce back as buyers and sellers return to a more favorable housing market. Home prices should see a moderate increase in 2024 as well. The median sale price of Encinitas detached single- family homes from January through December 2023 was $1.9 million, a decrease of $27,500, or 1.4 percent from 2022's median sale price. Sales through March 31, 2024 show the median price increasing to $2.1 million, marking the first quarter that the median price has exceeded $2.0 million. In the graph below, 2024 reflects January sales only. (Source: HdL Coren & Cone 2023-2024 Property Tax Reports, March 2024) Attachment 5C 2024-06-12 Item #08Q Page 58 of 87 Sales Tax (Major) Sales Tax is the City’s second largest source, representing 16 percent of total General Fund revenue. Proposed Budget Staff recommends an increase of $0.8 million, or 4.9 percent, in sales and use tax, based on projections provided by the City’s sales tax consultant HdL with further analysis by staff. Because third quarter adjustments reduced estimated sales tax $1.0 million, the proposed budget is actually lower than the original FY 2023-24 budget. Estimates for FY 2024-25 are projected to be relatively flat based on mixed economic pressures. Volatile economic indicators such as the Federal Funds rate, unemployment levels, and discretionary spending continue to influence outcomes. For example, in the statewide auto and transportation sector, inventory levels improved for many dealers creating a downward pressure on prices. Although higher interest rates and tighter credit standards continue to make loan financing challenging, leasing activity has improved. In Encinitas, recent sales activity has shown consumers shifting their discretionary spending away from tangible goods towards leisure, travel, services, entertainment, and restaurant expenditures. Additionally, food and drug sales decreased in recent quarters as consumers redirected their spending from alcohol purchases for home consumption to dining out. While business and recreational travel is expected remain strong, it is unknown whether residents and visitors will continue to enjoy casual and quick-service dining, with higher menu prices likely to result from implementation of AB 1228, a new State law raising the hourly minimum wage rate to $20 for certain fast food workers effective April 1, 2024. Cities in San Diego County continue to see a reduction in the county use tax pool (where tax on internet sales is recorded and shared proportionally) as e-commerce allocations shift to distribution centers. Sales tax projections do not include additional taxes paid by cannabis businesses, which are considered excise tax. They also do not include a potential one-cent local sales tax measure discussed in the Infrastructure Tax Force final report presented to City Council on February 28, 2024. It is still unknown whether City Council will place the measure on the November 2024 ballot and whether voters will decide to implement the tax. Description Sales tax is calculated as a percentage of the purchase price of goods and is collected by the seller. The City receives one percent of the total 7.75 percent sales tax rate for sales that occur within the City’s jurisdiction. The City has a diversified retail sales tax base and is not heavily dependent on any one business or industry. Historical Data The following 13 year agency trend chart, compiled by HdL and adjusted for economic data, shows tax revenue for sales that occurred through December of each calendar year. While major industry groups and total annual revenue (green line) fluctuate over time, the general trend (grey line) is toward a steady increase in revenue. (Source: HdL Companies 2023 CY Trends, April 2024) Attachment 5C 2024-06-12 Item #08Q Page 59 of 87 Relevant Economic Conditions As 2024 unfolds, many of the same economic conditions remain in play statewide, with varying effects on the overall outlook. A primary focus is monitoring the Federal Reserve to gauge when interest rates will recede. Monthly unemployment trends and inflation results will determine how swiftly and significantly borrowing costs decrease. Results from the final quarter of 2023 (October - December sales) confirmed a shift in consumer behavior, with people opting for essential household items over more expensive purchases. With the exception of Business/Industry and Restaurants/Hotels, all other major industry groups saw negative comparisons to the fourth quarter of 2022. Consumer debt has soared while personal savings dwindle, suggesting only modest gains in the coming fiscal year. At the national level, US Real Gross Domestic Product (GDP) grew at an annual rate of 3.2 percent in 4Q 2023, driven by increases in consumer spending, exports, and local and state government expenditures. Despite a decline in confidence, consumer spending rose a solid 2.6 percent, inflation adjusted, over the past year. Top categories for spending growth include recreational vehicles and goods (12 percent), new cars (4 percent), restaurants and hotels (4 percent) and recreational services (4 percent). The US should experience a reasonable pace of GDP growth in 2024, led by solid growth in consumer demand. Labor markets will remain tight, industrial production will be steady, and long run interest rates will likely stay in the same range. In many ways 2024 will resemble 2023 with a steady, moderately expanding economy. Strong consumer demand suggests inflation will be running hotter than the 2 percent pace that the Federal Reserve hopes to achieve. (Source: HdL Companies Consensus Forecast April 2024.) Attachment 5C 2024-06-12 Item #08Q Page 60 of 87 Other Sources of Revenue Charges for Services Charges for Services is the third largest source, representing ten percent of General Fund revenue. Staff estimates an increase of $0.7 million, or 6.6 percent in Charges for Services. Projections assume $0.5 million in new arts program revenue at the Pacific View Arts Center scheduled to open in FY 2024-25. Estimates also reflect CPI adjustments to development (permitting) fees expected to be effective July 1, 2024. Charges for Services is a voluntary charge imposed on an individual for a service or facility provided directly to that individual. A fee may not exceed the estimated reasonable cost of providing the particular service or facility for which the fee is charged, plus overhead. Revenues include recreation program enrollment, along with planning, building, and engineering fees related to residential and commercial development. These revenues are forecasted on the basis of recent receipts and staff’s knowledge of current trends. Transient Occupancy Tax (TOT) TOT is the fourth largest source, representing five percent of total General Fund revenue. Staff estimates an increase of $0.4 million or 7.4 percent for General Fund TOT, based on analysis of activity since FY 2021-22. Revenues for both hotel and short-term vacation rentals are expected to increase as bookings continue to rebound following the COVID-19 pandemic. Proactive enforcement on unpermitted short term rental sites, which began in FY 2022-23, is projected to generate recurring TOT and rental permit revenue. Transient Occupancy Tax (TOT) is a tax imposed on persons staying 30 days or less in a lodging establishment. The tax is collected for both hotel and short-term vacation rentals at a rate of ten percent of the rent charged by the operator. Eight percent of the rent goes to the General Fund, and two percent is restricted to beach sand replenishment and stabilization projects in the Coastal Zone Management Fund (212). These revenues are forecasted on the basis of recent receipts and staff’s knowledge of current trends. Franchise Tax/Fees Franchise Fees are the fifth largest source, representing two percent of total General Fund revenue. Staff estimates a decrease of $0.03 million, or 1.3 percent, in Franchise Fees. Cable and video franchise revenue is expected to continue to remain relatively flat due to limited growth in new subscribers. Gas and electric franchise revenue is projected to decrease slightly due to decreased consumption related to recent rate increases and customers’ ongoing transition to solar energy. Franchise revenue is generated from public utility sources, trash collection franchises and telecommunication franchises conducting business within the City limits. These revenues are forecasted on the basis of recent receipts and staff’s knowledge of current trends. A solid waste franchise fee is collected from EDCO for the exclusive right to collect and process commercial and residential solid waste, recyclable, and green waste. These fees are used to help repair wear and tear on Attachment 5C 2024-06-12 Item #08Q Page 61 of 87 roads caused by trash trucks driving on City streets and to help fund street sweeping services. On May 12, 2021, Council approved a franchise fee increase—from the existing five percent to ten percent of gross revenues from Encinitas ratepayers—to be effective June 1, 2021. Revenues related to the 5 percent solid waste fee are budgeted and received directly in the Solid Waste Fund. Excise Tax Staff estimates an increase of $0.5 million, or 200 percent, in retail cannabis tax. The current FY 2023-24 is the first year that included new cannabis revenue, estimated at $0.25 million for one site, which opened in February 2024. Projections assume that all four retail locations will commence operations in 2024. Projected revenues are modest because it is unknown when retail sites will open and how much they will receive in sales. The City has not yet received applications for non-retail uses. This new revenue source is a result of the voter-initiated “Measure H” approved on November 3, 2020. City Council approved Ordinance No. 2020-18 adding Chapter 9.25 to the Encinitas Municipal Code allowing certain cannabis-related uses and activities in specified zones. Measure H also requires that the City allow four retail cannabis businesses to operate in the City. On November 8, 2022, the voters approved the City-sponsored ballot measure known as the City of Encinitas Cannabis Business Tax Measure (“Measure L”) allowing the City to adopt ordinances to impose a Cannabis Business Tax. On April 12, 2023, staff introduced Ordinance 2023-03 which imposes a gross receipts tax on all cannabis businesses operating within the City. Council approved the ordinance along with Resolution 2023- 21 setting Cannabis Business Tax rates at seven percent of gross receipts for retail cannabis businesses; four percent of gross receipts for non-retail cannabis businesses; and ten dollars per square footage of canopy area for commercial cultivation of cannabis and/or hemp. Licenses and Permits Staff estimates an increase of $0.08 million, or 27.5 percent, in Licenses and Permits. Proactive enforcement on unpermitted short term rental sites, which began in FY 2022-23, is projected to generate recurring TOT and rental permit revenue. Licenses and Permits are collected on business operation permits, business registration, short term rental permits, security alarm permits and other miscellaneous permits. These revenues are forecasted based on the basis of actual receipts in recent years. Intergovernmental Staff estimates a increase of $0.1 million, or 16.9 percent, in Intergovernmental Revenue. Intergovernmental revenue largely consists of the Cooperative Agreement for Fire Management Services with the Cities of Del Mar and Solana Beach. Intergovernmental includes revenue from other governmental agencies, principally the state and federal governments. These revenues include general or categorical support monies called subventions, as well as grants for specific projects and reimbursements for the costs of some state mandates. These revenues are projected on the basis of the City’s current cost sharing agreements as well as anticipated reimbursements of state mandated costs and excess vehicle license fees collected by the State. Attachment 5C 2024-06-12 Item #08Q Page 62 of 87 Fines and Penalties Staff estimates an increase of $0.01 million, or 2.8 percent, in Fines and Penalties. This assumes a slight increase in adminstrative citations resulting from increased code enforcement efforts. Fines and Penalties include collections for vehicle code and red‐light violations, parking citations and vehicle abatement. These revenues are forecasted on the basis of recent receipts and staff’s knowledge of current trends. In April 2022, City Council passed Ordinance 2022-05 allowing the City to utilize a private enforcement company in addition to the Sheriff and City staff. Use of Money and Property Staff estimates a increase of $0.01 million, or 1.0 percent, in Use of Money and Property primarily due to an anticipated increase in investment earnings. Use of Money and Property is generated by rental/insurance payments for use of city property, investment earnings, and revenue from the sale of city property. These revenues are forecasted on the basis of recent receipts and staff’s knowledge of current trends. Other Revenue Other Revenue includes interfund revenue, booking fees, cost recovery and other miscellaneous revenue. Revenue in this category remains constant except for the unanticipated one‐time reimbursements from the State for firefighter strike team deployments. Staff budgets conservatively, as fire conditions and deployments vary year-to-year, then adjusts cost recovery revenue and overtime at mid-year. This category also includes excess net revenue payment from the Encinitas Ranch Golf Authority. Other Financing Source/Uses This category is used to account for proceeds of long-term debt, subscriptions, and capital leases. Activity relates to financial statement presentation and typically is not budgeted. Examples include: the Governmental Accounting Standards Board (GASB) Statement No. 87, Leases issued in June 2017 and Statement No. 96, Subscription-Based Information Technology Arrangements issued in May 2020. Transactions and Use Tax (Local Sales Tax) On February 28, 2024, City Council approved outreach and possible ballot writing services for a potential one- cent local tax measure. On May 22, 2024, City Council approved Resolution 2024-60 ordering the submission to the qualified electors of the City of a ballot measure relating to a one-cent per dollar transactions and use (sales) tax, requesting that the San Diego Board of Supervisors authorize the County of San Diego Registrar of Voters to render specified services to the City of Encinitas relating to the conduct of the election, and directing the City Attorney to prepare an impartial analysis. No additional revenues are projected in the FY 2024-25 budget, given the unknowns of whether voters will decide to implement the tax. Attachment 5C 2024-06-12 Item #08Q Page 63 of 87 Assumptions for Estimates Forecasts utilizing assumptions based on financial policies and economic trends help determine if the City will have sufficient resources to meet the requirements of ongoing, planned, or mandated programs. Forecasting provides an estimate of the financial flexibility of the City, as well as insight into tax, revenues and service options the Council must address. The City's general approach to forecasting is to apply a conservative philosophy that does not overstate revenue nor understate expenditures. This approach: Underestimates revenues and builds in a layer of contingencies for expenditures. While this might make it harder to balance the budget, it reduces the risk of an actual shortfall. Assumes that revenues will be adjusted at midyear when more information about economic trends and actual receipts are available. As a result, the Revised budget tends to be more aligned with actual revenues than the Original budget. The methodology used for forecasting reflects a combination of internal analysis and locally generated consensus forecasts covering such factors as population growth, retail sales, and inflation. For proposed revenue estimates, the City evaluates prior year actual collections and projects current fiscal year ending fund balance based on prior year trend analysis along with current information provided by relevant sources. For the remaining years of the revenue forecast, consensus forecasts—such as the US Bureau of Economic Analysis, University of San Diego Burnham‐Moores Center for Real Estate, and property and sales tax consultants—are used to outline expected trends in key economic and demographic indicators. Typically, these forecasts cover the nation or the state, so adjustments to reflect unique local conditions are sometimes necessary. In general, sources are matched with the economic and demographic variables that most directly affect year‐ to‐year changes in those revenues. For example, sales tax revenue will reflect consensus forecasts related to taxable sales growth; whereas, building permits and plan review revenue will be tied to the expected trends in development. It is recognized that economic forecasting is not an exact science and at times relies upon professional judgment. To reduce the risks of miscalculation, as many factors as possible are used to identify what may contribute to changes. Budget monitoring and amendments also provide opportunities to adjust revenues and expenditures throughout the year. Placeholder for blank page Powered by OpenGov Attachment 5C 2024-06-12 Item #08Q Page 64 of 87 All City Funds The FY 2024-25 budget for all funds proposes operating expenditures of $131.9 million, an increase of $0.6 million, or 0.5 percent, over the current FY 2023-24 Revised Budget. The operating budget maintains current levels of service while meeting debt, pension, and contractual obligations. It also includes funding for the following enhancements discussed during the current Fiscal Year 2023-24: $777K second HOPE team ($335K start up with $442K ongoing) $200K Homeless Solutions Coordinator, new 1.0 full-time equivalent (FTE) position added at midyear $650K Pacific View Arts Center operations, part-time personnel, maintenance, equipment, supplies for new facility and programs, and $347K debt service for new 2024 Bond (Land Purchase). At the second budget workshop on April 17, 2024, City Council added $98,500 for: $50K On-call drainage consulting (Q3) in Engineering capital projects division $40K Additional funding for visitor center and local business promotion (Chamber of Commerce) in economic development $8.5K Heritage Tree Lighting (Encinitas Historical Society) in recreation programs, holiday parade. At the budget introduction on May 15, 2024, City Council directed staff to allocate $50,000 for the Fire Station #6 assistance to identify a permanent location and to determine appropriate equipment including a type 1 Fire Engine. The operating budget includes a one-time $0.05 million increase in Fire Operations contracts and services. Separate internal service funds purchase and own all City vehicles. Vehicle Replacement Program details are provided in the Public Works Departmental Summary. Expenditures Attachment 5D 2024-06-12 Item #08Q Page 65 of 87 General Fund The FY 2024-25 budget for the General Fund includes operating expenditures of $100.1 million, an increase of 1.6 million, or 1.6 percent over the current FY 2023-24 Revised Budget. When adjusted for the one-time $6.3 million land purchase in FY 2023-24, the increase is $7.9 million, or 8.6 percent. The General Fund is the City’s primary operating fund. It accounts for basic services—such as public safety, public works, development services, engineering, park and street maintenance, code enforcement—along with the administrative services required to support them. Updated On 5 Jun, 2024 Reset Broken down by Expenses*General Fund History  Visualization FY22 Actual FY23 Actual FY24 Original Budget FY24 Revised Budget FY25 Budget Fiscal Year 0.0 100.0M 25.0M 50.0M 75.0M DollarsBack Personnel Contracts and services Materials and supplies Internal cost allocation Capital outlay Debt / finance Sort By Chart of Accounts   Discussion of Expense Types Personnel Personnel represents 52.6 percent of the FY 2024-25 General Fund operating expenditure budget. Staff proposes an increase of $5.5 million, or 11.8 percent over the current FY 2023-24. The proposed budget honors negotiated labor contracts and meets CalPERS pension obligations for current Memoranda of Understanding (MOUs): Encinitas Firefighters Association (EFFA) expires December 31, 2025 Service Employees’ International Union (SEIU) expires June 30, 2027, and Encinitas Battalion Chiefs Association (IAFF) expires June 30, 2027. Attachment 5D 2024-06-12 Item #08Q Page 66 of 87 No increases to the number of City employees are proposed. Scheduled advancements and reclassifications needed to support enhanced services and continuity of operations are included in the FY 2024-25 personnel budget. The City’s FY 2023-24 full-time equivalent (FTE) employee count totaled 249.40 FTE, after addiing a new Homeless Services Coordinator position on February 28, 2024. Examples of personnel costs include salaries, benefits, uniforms, and training for permanent employees and temporary (contract) staff. Contracts and Services Contracts and Services represent 44.9 percent of the General Fund expenditure budget. Staff proposes an increase of $2.8 million, or 6.6 percent, over current FY 2023-24. The proposed Contracts and Services budget includes contracted increases and inflationary adjustments. The $19.2 million law enforcement agreement with the San Diego County Sheriff is the City’s largest contract, representing 43 percent of the Contracts and Services category and 19 percent of the General Fund operating expenditure budget. A contracted 3.5 percent increase is included in the proposed budget. A second HOPE team was added added in the proposed budget. Starting in FY 2024-25, $0.5 million in General Fund payments to the Fleet Maintenance Fund (621) are budgeted as Other Interfund Transactions, which are considered Contracts and Services, instead of Internal Cost Allocation. The change is intended to provide consistency with how other funds account for fleet maintenance services. The City contracts for services in many areas including law enforcement, building plan check, engineering inspections, miscellaneous planning review, animal services, emergency dispatch, recreation program instruction, and maintenance of parks, beaches, trails, trees, streets, and facilities. Expenditures also represent a wide array of charges, like audit services and travel, along with contracts with outside agencies. Materials and Supplies Materials and Supplies represent 2.2 percent of General Fund operating expenditures. For FY 2024-25, staff proposes an decrease of $0.03 million, or 1.3 percent, in Materials and Supplies. This includes inflationary increases along with a slight decrease in one-time Pacific View start up costs budgeted in the current FY 2023-24. This category includes consumable items costing less than $5,000 with an estimated life of less than two years. Items include office supplies, parts, sign materials, etc. Internal Cost Allocation Staff is proposing a $0.5 million, or 100%, decrease in Internal Cost Allocation, and a related $0.5 million increase in Contracts and Services. Starting in FY 2024-25, General Fund payments to the Fleet Maintenance Fund (621) are budgeted as Other Interfund Transactions, which are considered Contracts and Services, instead of Internal Cost Allocation. The change is intended to provide consistency with how other funds account for fleet maintenance services. Attachment 5D 2024-06-12 Item #08Q Page 67 of 87 Cost allocation plans are used to calculate the cost of support services provided by City administrative departments to other City funds and programs, including business-type activities such as water and wastewater operations. The General Fund, Fleet Maintenance Fund, Risk Management Fund, Fleet Replacement Fund, and Wastewater Support Fund provide support services to other funds or programs. The most recent cost allocation plan includes the General Fund (601) and Fleet Maintenance (621), while the other three funds are calculated in-house. While the City does not charge other General Fund departments during budget or year-end adjustment processes, calculated charges to Development Services, Engineering, and Fire Prevention are utilized in calculating the cost of providing services to the public and determining appropriate fee levels for various types of development applications. Capital Outlay For FY 2024-25, staff proposes a decrease of $6.1 million, or 98.5 percent, in Capital Outlay, primarily due to the one-time $6.3 million land purchase budgeted in the current FY 2023-24. This category includes all purchases in excess of $5,000 of a capital nature. Vehicles and heavy equipment are excellent examples of normal expenditures in this category. This category represents one-time General Fund expenditures and varies year-to-year based on the need for new machinery and equipment. Debt / Finance For FY 2024-25, staff proposes a decrease of $1,896, or 0.9 percent, in Debt/Finance. The Debt/Finance category typically remains flat year-to-year with amounts tied to an amortization schedule for the City's share of Regional Communications System infrastructure. Costs represent payments toward principal and interest. Powered by OpenGov Attachment 5D 2024-06-12 Item #08Q Page 68 of 87 Approach Accounting standards require items to be recorded in separate funds. For reporting purposes, interfund activity is eliminated from government-wide financial statements. However, there is little guidance on how to eliminate double-counting from entity-wide consolidated budget totals. Without careful consideration of the treatment of interfund activity within the budget, the casual user may misunderstand the size of the budget or scale of the interfund activity. Double-counting occurs for a variety of reasons: interfund transfers, internal service funds, and at times when enterprise funds provide services to the government unit as a part of their customer base. Accounting decisions to record revenue in one fund and then transfer it to another fund for spending should not show a total economic activity that doubles the correct number. (Source: GFOA Best Practices for Accurately Displaying Total Expenditures in Budget Presentations). To ensure that entity-wide budget totals reflect real economic activity and that material double-counting does not occur, the City of Encinitas does not include interfund transfers in revenue and expense discussions. Instead, transfers are discussed separately in aggregate. In general: Revenue, expenses, and transfers are included in the analysis of fund balance, in order to assess the impact of all economic activity on the ending fund balance. Transfers-out of one fund typically are offset by transfers-in to a different fund, resulting in a net $0 impact on the overall budget. In some instances, transfers are used to communicate assumptions and plan resources, resulting in a favorable or unfavorable impact to a specific fund. Internal cost allocation amounts are not budgeted or recorded as transfers. Instead, these amounts are entered as interfund revenue and internal cost allocation expenses. Discussion of Transfers and Contributions Transfers Operating transfers typically include transfers from the Gas Tax fund to the General Fund for street maintenance, along with transfers from Fire Mitigation and Community Facilities funds, which is then applied to debt service. Operating transfers from the General Fund include contributions to the Self-Insurance, Facility Maintenance, Senior Nutrition, and Vehicle, Equipment and Apparatus Replacement funds. Expenses are recorded in the appropriate governmental, enterprise, or internal service funds. Transfers Attachment 5E 2024-06-12 Item #08Q Page 69 of 87 Capital transfers out are used to track funding for specific capital and work projects. When the project is complete, available budget is transferred back to the funding source as a capital transfer-in. This category also tracks staff's assumption that three to four percent of the personnel budget typically is unspent due to vacancies, and can be used on capital projects. Transfers-in and project expenditures are recorded in the Capital Projects funds. Other transfers can be used in situations where transfers are required, which do not fit within operating, capital, or debt categories. Debt transfers record transfers between funds needed for debt service payments. Expenses are recorded in the Debt Service funds. Contributions Some contributions (pass-through payments) related to federal programs, residential rehabilitation, and housing programs have been grouped in the Transfers-Out category for budgeting purposes. This differs from the ACFR which includes them in expenses by function. Contributions are included Development Services budget, in the following funds: Grants and Housing (222-Community Development Block Grant), and Affordable Housing (551-Section 8 Administration and 552-Section 8 Housing Assistance Payments). All Funds Updated On 5 Jun, 2024 Reset Broken down by Types History Funds  Visualization FY22 Actual FY23 Actual FY24 Original Budget FY24 Revised Budget FY25 Budget Fiscal Year 0.0 10.0M 20.0M 30.0M 40.0M DollarsBack Transfers out / uses Transfers in/sources Sort By Chart of Accounts   Attachment 5E 2024-06-12 Item #08Q Page 70 of 87 Updated On 5 Jun, 2024 Reset Broken down by Types History Funds  Data ,, ,, ,, ,, ,, ,,,,,,,,,, ,,,,,,,,,, ,,,,,,,,,, ,,,,,,,,,, ,,,,,,,,,, ,,,,,,,,,, ,,,,, ,,,,,,,,,, ,,,, ,,,,, ,,,,,,,,,, ,,,,,,,,,, ,,,,,,,,,, -,, -,, -,, -,, -,, Back Revenues Transfers in/sources Transfers In - Operating Transfers In - Capital Transfers In - Debt Service Expenses Transfers out / uses Contributions - General Contributions - Federal Prog Contributions - Res Rehab Contributions - Housing Transfers Out - Operating Transfers Out - Capital Transfers Out - Debt Service Revenues Less Expenses FY22 Actual FY23 Actual FY24 Original Budget FY24 Revised Budget FY25 BudgetExpand All General Fund The Summary of Revenue, Expenditures, and Transfers (Budget Adoption Attachment 1 Exhibit 1C) shows operating, capital, and debt service transfers in and out of the General Fund. Details of interfund operating transfers are also provided. FY 2024-25 operating transfers include a $0.1 million decrease in transfers to the Senior Nutrition Fund (222) and a $0.08 million decrease in transfers to the Technology Operations Fund (631) because FY 2024-25 program expenditures have been budgeted directly in the General Fund. Significant decreases in capital transfers are primarily due to one-time $20 million in IBank loan proceeds for Leucadia Streetscape construction (CS23D) budgeted in the current FY 2023-24. Attachment 5E 2024-06-12 Item #08Q Page 71 of 87 Overview Government Finance Officers Association (GFOA) recommends that all governments prepare and maintain a long-term financial plan that projects revenues, expenses, financial position, and external factors for all key funds and government operations at least five years into the future. Governments that utilize debt financing and/or utility rate setting should consider a long-term financial plan greater than five years. The plan should be reviewed on an annual basis and updated as needed or as major assumptions change. The operating budget includes the proposed revenue and expenditure plan for each department over the next fiscal year. The five-year financial plan and Capital Improvement Program (CIP) is a long-term plan developed to demonstrate fiscal sustainability and to plan for the construction and replacement of infrastructure and other capital assets. The City’s long‐range financial plan is maintained for major funds to include assumptions for revenue sources and operating expenditures over a 15‐year period. The plan is maintained and updated throughout the year as amendments are made or as new revenue sources or programs are known. The Director of Finance updates the General Fund forecast before the budget is drafted. This is used as a guide as to ensure that revenues are sufficient to meet expenditure needs. Expenditures for future years include known contract increases and factor for inflation. The plan also ensures that the City’s important financial policies, such as reserves, and Council’s strategic goals are met. Budget Assumptions The City’s revenue and expenditure budgets are comprised of many unique elements that respond to a variety of external factors such as population growth, development, inflation, and interest rates. The following table reflects the assumptions applied for projecting key revenue sources and expenditure uses. Long-Range Operating Financial Plans Attachment 5F 2024-06-12 Item #08Q Page 72 of 87 Vehicle Replacement Program Separate internal service funds purchase and own all City vehicles. The operating budget includes an estimate of the amount expected for replacements scheduled in the next year. Holding periods are set by category of vehicle, typically three to five years. Replacements require disposal and do not increase the size of the fleet. Increases in vehicle count are approved by Council. Unscheduled purchases that are not included in the original budget (additions, early replacements, transfers, etc.), require the approval of City Council. While fire apparatus replacement expenses are included in the proposed budget, potential lease revenue is not budgeted until financing is requested and approved by City Council. FY 2024-25 Vehicle Replacement Program details are provided in the Public Works Departmental Summary. Capital Improvement Program Long-term financial planning should be the starting point for capital planning, developing operating budgets, estimating revenue, and other planning processes. The long‐range financial plan includes planned capital project appropriations over the next five years. It allows the City to ensure that future capital projects meet the City Council’s strategic goals. The plan identifies funding for future projects and the impact to the operating budget once a project is completed. Attachment 5F 2024-06-12 Item #08Q Page 73 of 87 As projects are identified, departments complete project sheets like the example below, which help Finance program the capital budget and project operating costs. Best Practices Beyond the annual budget cycle and multi-year capital plan, governments need to identify long-term financial trends. Long-term financial planning involves projecting revenues, expenses, and key factors that have a financial impact on the organization. Understanding long-term trends and potential risk factors that may impact overall financial sustainability allows the finance officer to proactively address these issues. Going through a long-term financial planning process allows decision makers to focus on long-term objectives, encourages strategic thinking, and promotes overall awareness for financial literacy in an organization. Long-term financial planning creates commitment and motivation to provide a guide for decision-making. Long-term financial planning relates to strategic planning, developing financial policies, capital improvement planning, and budgeting, but it is inherently different, as shown in the table below. Each process fulfills a different combination of planning purposes. As such, long-term financial planning is most valuable when Attachment 5F 2024-06-12 Item #08Q Page 74 of 87 accompanied by these other planning processes and often communicated together. (Source: GFOA Best Practices Long-Term Financial Planning) Powered by OpenGov Attachment 5F 2024-06-12 Item #08Q Page 75 of 87 Overview The City uses three Capital Projects Funds to monitor capital improvements projects for governmental activities, including roads, sidewalks, drainage systems, trails, and parks. Separate enterprise funds track sanitary district and housing authority projects. The Capital Improvement Program (CIP) is a comprehensive five-year financing, budgeting, and planning tool for large, non-recurring projects with a dollar threshold of $100,000 and a useful life of five years or more. The CIP is generally used to construct and maintain infrastructure or other assets. Projects typically include public facilities, acquisition of parkland and park improvements, infrastructure, and certain City “work projects” such as multi-year consultant studies. City Projects are prioritized in strategies laid out by Council's 2024-25 Strategic Planning Framework. While most capital projects are managed by the Engineering Department, the CIP plan also includes facilities, parks and beach projects, and multi-year studies (work projects) managed by other departments. Funding for projects is provided by existing fund balance, future projected cash flows, and loan proceeds. While staff forecasts capital expenditures out five years, City Council appropriates funding only one year at a time. Unlike the operating budget, capital projects have assigned budget amounts that are not tied to a single fiscal year. The completion of these projects can take multiple years, with budget remaining on the project until it is expended or closed and returned to the funding source. Budget development discussions and adoption include both operating and capital budget appropriations. The CIP plan and project details are published in a separate document. Each year the CIP and Traffic Engineering teams execute a Work Plan based on funded projects. For information about ongoing projects visit the City Projects & Initiatives page on the City website, which features current projects, includes a list of CIP Projects by Status, and Capital Projects Grant Funding Status. At fiscal year end, the City uses a dollar threshold of $100,000 and a useful life of five years or more in its evaluation for capitalizing expenditures. Eligible project costs are additions to construction in progress at fiscal year end. Costs for completed projects are recorded as additions to the appropriate capital asset category at year end. Repair and maintenance costs that do not improve the asset are expensed. Capital Program Attachment 5G 2024-06-12 Item #08Q Page 76 of 87 Five-Year CIP Plan The CIP plan through FY 2028-29 programs $58.0 million in capital improvement and work projects over the next five years. Of this, the General Fund is planned to contribute $11.4 million, or 20 percent of total funding. Of the five-year total, $13.6 million is programmed in the FY 2024-25 capital budget. This includes $4.1 million from the General Fund, with all other funds totaling $9.5 million. Resolution 2024-65 Exhibit 1E presents the CIP Plan by Project Type Resolution 2024-65 Exhibit 1F presents the CIP Plan by Funding Source. The capital budget appropriates funds for FY 2024- 25 only. Projects shown in future years are programmed into the Capital Improvement Program plan and are not funded until each subsequent budget adoption. Capital and Work Projects - Detail Prior to budget workshops, staff included $0.54 million for the following mandated or restricted items in the FY 2024-25 capital budget: $0.25M Open Space Plan Update (WC25A), new item with State mandate $0.24M Park Improvement Projects (CP04G), annual transfer of cell tower lease revenue $0.05M ADA Curb Ramp Project (CS16C), Transition Plan compliance. At the second budget workshop on April 17, 2024, Council programmed $3.41 million in funding for the following projects: $1.80M Extend N101 Drainage to Grandview (CD23A), existing project with new Scope $0.80M Protected Intersection (CS25B), new project - Design & Construction Estimate $0.30M General Mobility (CS18E), annual funding in approved CIP Plan $0.20M Safe Routes to School (CS01E), annual funding in approved CIP Plan $0.15M Native Plant Ordinance Related Activities (WC25B), demonstration garden, education, etc. $0.10M Encinitas Habitat Stewardship Program (WC11A) $0.06M Orpheus/Paul Ecke Central Bike Project, new project (CS25C). At the budget introduction on May 15, 2024, City Council directed staff to allocate $150,000 towards the development of a simplified Native Plant Ordinance (Revised Project Scope) with the use of a consultant. The Attachment 5G 2024-06-12 Item #08Q Page 77 of 87 proposed capital budget includes a one-time $0.15 million increase for a new Native Plant Ordinance - Revised Scope (WC25C) work project. While workshop discussions focus on General Fund appropriations for the new fiscal year, it is important to note that the City's Capital Improvement Program budget is not limited to the above projects. The CIP budget includes multiple restricted funding sources, like gas tax and impact fees, that contribute to capital and multi-year work projects. The FY 2024-25 budget only shows new appropriations to be added to existing or new projects. Many projects have unspent available budget carried forward from prior years, representing funding that is still committed to the project. Available project budget totals are reported in mid-year budget status and year-end audit reports. This chart displays FY 2024-25 capital appropriations by project type. Process The City recognizes the importance of capital improvement strategic planning and budgeting in order to maintain and improve the City’s infrastructure. The City updates and re-adopts annually a five-year Capital Improvement Program that includes the annual capital improvement budget for the current fiscal year and future projections of capital improvement needs. The plan presented six-years when the City was on a two-year budget cycle. In FY 2023-24, the CIP plan returned to a five-year view to coincide with the shift from two-year to annual operating budgets. CIP Development Development of the CIP budget begins earlier than that of the operating budget. After June 30 ending balances are determined in the fall, departments review project status, available carryforward budget, and community needs. The budget process considers project City Council priorities and funding availability. Potential appropriations for the new fiscal year are determined through a collaborative process with recommendations from staff and input from the City Council and community. For each proposed capital project, staff prepares project sheets that summarize identify costs, funding sources, and ongoing maintenance costs. Prioritization City Council Strategic Planning Framework Attachment 5G 2024-06-12 Item #08Q Page 78 of 87 Each year, the City Council reviews priorities for the year at its annual City Council Retreat. A City Council priority is defined as a topic that will receive significant attention and budget consideration during the year. Typically, priorities have a one to three-year time limit, although some may continue beyond that time. On February 6, 2024, City Council selected focus areas for the 2024-25 Strategic Planning Framework, along with the following City Council Goals: 100% Affordable Housing (choose site, define project, explore funding options) Prioritize remaining Streetscape elements (complete C, Stormwater, B, A South) Safe, Legal Railroad Crossings and Establish Citywide Quiet Zones Expand Habitat Stewardship and explore Open Space Preservation (identify resources to fund and better manage our natural resources) Consider Infrastructure Task Force prioritization and funding recommendations Build on the bike safety emergency declaration goals and implement Vision Zero Infrastructure Task Force (February 2023 - February 2024) On November 16, 2022, City Council approved the creation of a new seven-member Infrastructure Task Force (ITF) which met bi-monthly from February 2023 through February 2024, culminating in a final report with recommendations and presentation to the City Council on February 28, 2024 with the following draft mission and overarching goals: The work of the task force informed the preparation of the FY 2024-25 budget. Additional information is available on the City website: https://www.encinitasca.gov/government/boards-commissions/infrastructure- task-force Maintenance The City emphasizes preventive maintenance as a cost-effective approach to infrastructure maintenance. Exhausted capital goods will be replaced as necessary. Ongoing maintenance and operation costs are budgeted in the operating budget. Appropriations for capital projects are approved only after ongoing maintenance and operational funds have been identified and designated to the project. Funding Many funds, including the General Fund, contribute funding to the capital plan. Restricted funding sources are to be used before less-restrictive sources when appropriating and expending funds. Time-sensitive funding sources are appropriated before funding sources with no time restrictions. General Fund capacity is discussed in budget workshops because it is the most discretionary funding source. Staff also actively pursues opportunities for grant funding of projects. Applications are to be made only after a grant is evaluated for consistency with Council goals and compatibility with City programs. Grant funding Identify the City’s capital improvement backlog and future needs for the 2025 to 2035 timeframe.1. Define criteria and clarify processes for identifying and prioritizing future CIP needs, projects, and funding opportunities. 2. Ensure that the CIP program and prioritization is linked to the City’s policies, strategic plan, and planning priorities. 3. Ensure transparency in communications about infrastructure needs, challenges, and the work of the ITF.4. Make recommendations regarding funding the City’s infrastructure backlog at the conclusion of the task force work. 5. Attachment 5G 2024-06-12 Item #08Q Page 79 of 87 received after a project has been entirely funded will replace the least restrictive funding source. When possible, capital improvement and work projects will be financed with available revenues. However the most appropriate financing structure is determined for each on an individual basis after examining all relevant factors of the project. Capital projects financed through the issuance of bonds will be financed for a period not to exceed the expected useful life of the project. Data Visualizations Pie charts are used to show proportions of a whole. They are easiest to read when there are only a few "slices" of data. A treemap is used to show the composition of a whole when there are many components. The size of the rectangle also represents the relative quantity. Funding Source The following interactive treemap summarizes FY 2024-25 Capital Budget appropriations by funding source. Click on the table or search to explore the data. Updated On 3 Jun, 2024 Back Reset Broken down by Funding Source SearchSearch in tableShowing rows   = 2025  Visualization 101 - General Fund $4,098,000.00 30.17% 522 - Encinitas Sanitary Div $2,931,322.00 21.58% 211 - TransNet $2,369,600.00 17.44% 201 - State Gasoline Taxes $2,072,448.00 15.26% 512 - Cardiff Sanitary Div $1,279,578.00 9.42% 403 - Facilities $425,000.00 3.13% 212 - Coastal Zo… $298,100.00 …  Download Help Share  Attachment 5G 2024-06-12 Item #08Q Page 80 of 87 Project Name The following interactive treemap summarizes FY 2024-25 Capital Budget appropriations by project name. Click on the table or search to explore the data. Updated On 3 Jun, 2024 Back Reset Broken down by Description SearchSearch in tableShowing rows   = 2025  Visualization Annual Street Overlay $2,369,600.00 17.44% N101 Drainage Improvement... $1,800,000.00 13.25% Annual Street Overlay - R... $1,538,591.00 11.33% Encina Plant Improvements $1,264,922.00 9.31% Collection System Reha… $1,080,000.00 7.95% ECR/Santa Fe Protected In... $800,000.00 5.89% SEJPA Plant Improveme… $604,578.00 4.45% CSD Collection Sys… $500,000.00 3.6… General Mobility… $300,000.00 … Park Improv… $238,000.0… Moonlight … $200,000…Native … $150,0… Coastal… $150,0… Show More $893,172.00 6.58%  Download Help Share  Powered by OpenGov Attachment 5G 2024-06-12 Item #08Q Page 81 of 87 Bond Ratings The City has been evaluated and rated by internationally recognized third party reviewers. On April 15, 2024, Standard & Poor's (S&P) Rating Services affirmed its AAA issuer credit rating for the City of Encinitas. According to S&P, the AAA rating reflects the City's: Very strong economy, with access to a broad and diverse metropolitan statistical area; Very strong management, with strong financial policies and practices under S&P's Financial Management Assessment methodology; Strong budgetary performance; Very strong budgetary flexibility; Very strong liquidity; and Very stong debt and contingent liability profile. S&P issued a credit rating of AA+ on the City's 2024 Lease Revenue bonds, which is the highest rating available for these types of bonds. Ratings for lease revenue bond issues are typically one notch lower than the issuer credit rating due to the payment structure of the bond issue. Limit The City’s debt management policy states that the debt service on bonds and notes paid each year shall not exceed 15 percent of the General Fund budget. Business-type debt is excluded from this calculation. Fiscal Year 2024-25 Governmental debt service totals $5.5 million, or 5.5 percent, of the General Fund operating expenditure budget, which is well below the limit. Debt Limit Calculation Governmental-Type Debt $ 5,484,848 Divided by General Fund Operating Expenditures 100,052,992 = Debt Service as a Percent of Operations 5.5% Debt Legal limits and coverage requirements Attachment 5H 2024-06-12 Item #08Q Page 82 of 87 Budget The City had approximately $94 million of debt outstanding at June 30, 2024, including: $75.5 million of General Fund bonded debt (includes the $20 million IBank loan and $5.7 million 2024 land purchase) $2.4 million of General Fund financed purchases, and $16.1 million of business-type debt. For Fiscal Year 2024-25, budgeted transfers from the General Fund to Debt Service total $5.5 million. The 2017 Fire Apparatus Lease will be paid off in FY 2023-24, removing $0.01 million of annual debt service from future budgets. The FY 2024-25 Operating Budget adds $0.3 million in new principal and interest payments for the 2024 Land Purchase bonds related to the acquisition of 1.43 acres of property at the northeast corner of Highway 101 and La Costa Avenue for $6.0 million, approved on September 13, 2023 with City Council Resolution 2023-112. $93,924,970.00 Debt in 2024 $0 $20M $40M $60M $80M $100M 2012 2015 2018 2021 2024 Outstanding Debt by Fiscal Year Attachment 5H 2024-06-12 Item #08Q Page 83 of 87 Schedule The following table summarizes debt obligations for Fiscal Year 2024-25. Additional detail for Long-Term Obligations is provided in the Notes to the Basic Financial Statements in the City's Annual Comprehensive Financial Report. Attachment 5H 2024-06-12 Item #08Q Page 84 of 87 Purpose of Debt Obligations Debt service funds are used to account for the accumulation of resources for, and the repayment of general long-term debt, interest, and related costs. Internal service funds, like Fire Apparatus Replacement, receive annual operating transfers from the General Fund to accumulate resources for major replacement costs and repayment of capital leases. IBank Loan Fund 301 - Debt Service In August 2022, the City of Encinitas and the California Infrastructure and Economic Development (IBank) entered into a $20 million Financing Lease Obligation under the Infrastructure and State Revolving Fund Program to finance the Leucadia Streetscape, Segment C Westside Improvements Project. This is a major streetscape project which will improve mobility, accessibility and parking conditions in addition to installing traffic calming measures along the North Coast Highway 101. The loan has a repayment period of 15 years at an interest rate approved by the IBank’s Board of 3.3 percent (3.0 percent interest plus a 0.3 percent annual fee on the loan balance). Annual debt service payments range from $1.6 million to $1.7 million through 2037. Bonded Debt Fund 302 - Encinitas Public Financing Authority 2013 Lease Revenue Bonds, Series A (Public Park Construction Project). On March 20, 2013, the Encinitas Public Financing Authority issued bonds in the amount of $7,865,000 to provide funds for the construction of capital improvements to the Encinitas Community Park. The bonds consist of $7,865,000 of serial bonds, which mature annually through 2033 in installments ranging from $305,000 to $510,000. Interest is due and payable semi-annually at rates ranging from 2.00 percent to 3.00 percent. The bonds were issued at a premium, which is being amortized over the life of the bonds on a straight-line basis in the government- wide financial statements. The bonds are payable from lease payments to be made by the City of Encinitas for the right to use certain real property and related improvements pursuant to a lease agreement dated March 1, 2013 between the City as lessee and the Authority as lessor. The bonds are secured by pledged revenue consisting of all lease revenue paid by the City of Encinitas in addition to any assets held in trust for the purpose of paying the lease payments. The Authority has a leasehold on the property until all the terms of the lease agreement are fulfilled. The refunding bonds are payable from any source of legally available funds of the City. The bonds are subject to federal arbitrage requirements. 2014 Lease Revenue Bonds (Pacific View Property and Moonlight Beach Lifeguard Tower). On November 26, 2014, the Encinitas Public Financing Authority issued its Series A tax-exempt (Moonlight Beach Lifeguard Tower) and Series B taxable (Pacific View Property) bonds in the amounts of $3,095,000 and $10,365,000, respectively, to provide funds for the purpose of improving the Moonlight Beach Lifeguard Tower and financing the acquisition of a property known as the Pacific View Property. The bonds consist of $3,350,000 of serial bonds and $10,110,000 of term bonds. The serial bonds mature annually through 2030 in installments ranging from $65,000 to $245,000. The term bonds mature through 2045 and are subject to mandatory sinking requirements. Interest is due and payable semi-annually at rates ranging from 2.00 percent to 3.50 percent. The bonds were issued at a discount, which is being amortized over the life of the bonds on a Attachment 5H 2024-06-12 Item #08Q Page 85 of 87 straight-line basis in the government-wide financial statements. The bonds are payable from lease payments to be made by the City of Encinitas for the right to use certain real property and related improvements pursuant to a lease agreement dated November 1, 2014 between the City as lessee and the Authority as lessor. The bonds are secured by pledged revenue consisting of all lease revenue paid by the City of Encinitas in addition to any assets held in trust for the purpose of paying the lease payments. The Authority has a leasehold on the property until all the terms of the lease agreement are fulfilled. The refunding bonds are payable from any source of legally available funds of the City. The bonds are subject to federal arbitrage requirements. In 2022, a portion of the 2014 Lease Revenue Bond, Series B was refunded. 2015 Library Refunding Bonds. On September 1, 2015, the Encinitas Public Financing Authority issued $15,645,000 of 2015 Lease Revenue Refunding Bonds to defease and refund on a current basis, all of the outstanding 2006 Library Bonds which were originally used to finance capital projects that included the construction of the Encinitas Library and the Encinitas Community Park, in addition to rehabilitating three fire stations and the public works facility. The bonds consist of serial bonds maturing from 2016 through 2036 in annual installments of $480,000 to $1,025,000. Interest is due and payable semi-annually at rates ranging from 2.5 percent to 5.0 percent. Annual debt service is approximately $1,065,000 through 2036. The bonds are subject to federal arbitrage requirements. 2017 Park Refunding Bonds. On February 7, 2017, the Encinitas Public Financing Authority issued $11,955,000 of 2017 Lease Revenue Refunding Bonds to defease and refund on a current basis, all of the outstanding 2010 Park Bonds which were issued for the purpose of refinancing its 2001 Lease Revenue Bonds, Series A. The refunded 2001 Lease Revenue Bonds, Series A were used to finance the acquisition of real property (Hall Property) now known as the Encinitas Community Park. The bonds consist of serial bonds maturing from 2018 through 2031 in annual installments of $580,000 to $1,110,000 and term bonds maturing April 1, 2030 in the amount of $2,125,000. Interest is due and payable semi-annually at rates ranging from 3.0 percent to 5.0 percent. Annual debt service is approximately $1,140,000 through 2031. The bonds are subject to federal arbitrage requirements. 2021 Lease Revenue Refunding Bonds, Series A. On July 28, 2021 the Encinitas Public Financing Authority issued $9,505,000 of 2021 Federally Taxable Lease Revenue Bonds Series A (Pacific View Property) for the purpose of refunding and defeasing a portion of the $9,130,000 outstanding 2014 Lease Revenue Bonds which were used to acquire a property known as the Pacific View Property and to pay costs of issuance. The term bonds mature through 2045 and are subject to mandatory sinking requirements. Interest is due and payable semi-annually at rates ranging from 0.35 percent to 3.0 percent. Annual debt service is approximately $560,000 through 2045. The bonds are subject to federal arbitrage requirements. 2024 Lease Revenue Bonds (Land Purchase). On May 15, 2024, the Encinitas Public Financing Authority issued $5,690,000 of 2024 Lease Revenue Bonds for the purpose of financing the acquisition of certain real property known as Assessor’s Parcel Numbers 216-042-01-00 and 216-042-05-00 located at the northeast corner of Coast Highway 101 and La Costa Avenue. The 1.43-acre site was purchased by the City on September 28, 2023, for $6,000,000. Proceeds of the Bonds, together with a contribution from other capital funds of the City will be used to reimburse the City for the purchase of this property. The bonds consist of $2,350,000 of serial bonds and $3,340,000 of term bonds. The serial bonds mature annually through 2041 in installments ranging from $85,000 to $190,000. The term bonds mature through 2054 and are subject to mandatory sinking requirements. Interest is due and payable semi-annually at rates ranging from 4.0 percent to 5.0 percent. Annual debt service is approximately $330,000 through 2055. The bonds are subject to federal arbitrage requirements. Attachment 5H 2024-06-12 Item #08Q Page 86 of 87 Capital Leases Fund 624 - Fire Apparatus Replacement 2017 Fire Apparatus Lease. In FY 2016-17, the City entered into a long-term lease arrangement to finance the purchase of a 2017 Pierce Arrow XT Pumper Truck for $629,851. The lease has a term of seven years, and interest rate of 2.50 percent, and annual payments of $98,641. The final payment is due in FY 2023-24. 2020 Fire Apparatus Lease. In FY 2020-21, the City entered into a long-term lease arrangement to finance the purchase of a 2020 Pierce Arrow XT Pumper Truck for $737,623. The lease has a term of seven years, and interest rate of 2.45 percent, and annual payments of $115,311. The final payment is due in FY 2027-28. 2023 Fire Apparatus Lease. In FY 2022-23, the City entered into a long-term lease arrangement to finance the purchase of a 2023 Pierce Enforcer Pumper Engine Truck for $859,596. The lease has a term of seven years, and interest rate of 4.93 percent, and annual payments of $146,697. The final payment is due in FY 2029-30. 2023 Fire Apparatus Lease. In FY 2022-23, the City entered into a long-term lease arrangement to finance the purchase of a 2023 Pierce Enforcer Triple Combination Pumper Truck for $1,065,760. The lease has a term of seven years, and interest rate of 4.99 percent, and annual payments of $182,260. The final payment is due in FY 2029-30. Enterprise / Business Type Fund 511 - Cardiff Sanitary Division 2017 CSD Note Payable to San Elijo Joint Powers Authority (SEJPA). On July 6, 2017 SEJPA, on behalf of its members (the Cardiff Sanitary Division and the City of Solana Beach) issued 2017 Revenue Bonds (Clean Water Projects) for the purpose of funding facilities and improvements as part of SEJPA’s capital improvement plan and certain costs of issuance. The 2017 revenue bonds are not the obligation of the City of Encinitas nor its component unit, the CSD. The City of Encinitas entered into a Series 2017 Loan Agreement dated June 1, 2017 as a successor to the CSD to assist in the financing of the CSD’s respective share of the Series 2017 Revenue Bonds. CSD is responsible for the repayment of the loan in the amount of $11,057,500 of the total borrowing amount of $22,115,000 (50 percent). Annual debt service is approximately $670,000 from 2020 through 2047. The average rate on the borrowing is approximately 2.5 percent. The bonds were issued at a premium, which is being amortized over the life of the bonds on a straight-line basis. Fund 561 - Affordable Housing 2004 Encinitas Housing Authority (EHA) Note Payable. In 2004, the EHA secured a note payable with a financial institution of $1,905,338 to partially fund the acquisition of 16 affordable housing units. The note is secured only by the rental income generated by the housing units. Principal and interest are due and payable monthly. Annual principal installments range from $52,417 in 2014 to $98,938 in 2031. The note bears interest at 90 percent of the ten-year US Treasury note, adjustable every six years. The EHA is solely responsible for repayment of this note. Powered by OpenGov Attachment 5H 2024-06-12 Item #08Q Page 87 of 87