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Resolution No. 2021-004RESOLUTION NO. 2021-04 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING MID-YEAR BUDGET APPROPRIATIONS AND AMENDING THE FISCAL YEAR 2020-2021 BUDGET SECTION 1. Recitals. A. On June 2, 2020, the City Council adopted Resolution No. 2020-13 approving the budget for Fiscal Year 2020-2021. B. Changes in anticipated expenditures of the City of Vernon require a revision of the appropriations for Fiscal Year 2020-2021. C. There are sufficient funds in anticipated revenues and fund balance to cover the proposed budget adjustments. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 2. The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct. SECTION 3. The City Council hereby approves the budget adjustments as set forth in Exhibit A, attached hereto and incorporated by reference. SECTION 4. The Budget for Fiscal Year 2020-2021 adopted by Resolution No. 2020-13 is hereby amended to include the mid-year budget appropriations. / / / / / / / / / / / / / / / Resolution No. 2021-04 Page 2 of 3 _______________________ SECTION 5. The City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions. APPROVED AND ADOPTED this 16th day of March, 2021. _____________________________ LETICIA LOPEZ, Mayor ATTEST: LISA POPE, City Clerk (seal) APPROVED AS TO FORM: _________________________________ ARNOLD M. ALVAREZ-GLASMAN, Interim City Attorney I CERTIFY THAT THE FOREGOING RESOLUTION NO. 2021-04 was passed and adopted by the City Council of the City of Vernon at the regular meeting on March 16, 2021 by the following vote: AYES: 5 Council Members: Davis, Gonzales, Menke, Ybarra, Lopez NOES: 0 ABSENT: 0 ABSTAIN: 0 ________________________________ LISA POPE, City Clerk (seal) ĞƉĂƌƚŵĞŶƚ ĐĐŽƵŶƚ ĞƐĐƌŝƉƚŝŽŶ ĚũƵƐƚŵĞŶƚ ŵŽƵŶƚ 'ĞŶĞƌĂů&ƵŶĚǆƉĞŶĚŝƚƵƌĞĚũƵƐƚŵĞŶƚƐ ,ƵŵĂŶZĞƐŽƵƌĐĞƐ Ϭϭϭ͘ϭϬϮϲ͘ϱϵϲϮϬϬ W^ƚĞƐƚŝŶŐƐĞƌǀŝĐĞŽĨĨƐŝƚĞĚƵĞƚŽƉĂŶĚĞŵŝĐ ϱϬ͕ϬϬϬ͘ϬϬΨ /ŶĨŽƌŵĂƚŝŽŶdĞĐŚŶŽůŽŐǇ Ϭϭϭ͘ϵϬϭϵ͘ϱϮϬϬϭϬ ƋƵŝƉŵĞŶƚŶĞĞĚĞĚƚŽǁŽƌŬŽĨĨͲƐŝƚĞĚƵĞƚŽƉĂŶĚĞŵŝĐ ϱϬ͕ϬϬϬ͘ϬϬΨ /ŶĨŽƌŵĂƚŝŽŶdĞĐŚŶŽůŽŐǇ Ϭϭϭ͘ϵϬϭϵ͘ϱϵϱϮϭϬ ^ŽĨƚǁĂƌĞŶĞĞĚĞĚƚŽǁŽƌŬŽĨĨͲƐŝƚĞĚƵĞƚŽƉĂŶĚĞŵŝĐ ϰϳ͕ϬϬϬ͘ϬϬΨ &ŝƌĞ Ϭϭϭ͘ϭϬϯϯ͘ϴϱϬϬϬϬ ŶŐŝŶĞůĞĂƐĞƉĂǇŽĨĨ ϯϮϯ͕ϮϬϱ͘ϰϰΨ WŽůŝĐĞ Ϭϭϭ͘ϭϬϯϭ͘ϱϵϲϮϬϬ ZĂĚŝŽĞƋƵŝƉŵĞŶƚŵĂŝŶƚĞŶĂŶĐĞĂŐƌĞĞŵĞŶƚ͕ƉƌĞǀŝŽƵƐůǇ ďƵĚŐĞƚĞĚŝŶ&ŝƌĞĞƉĂƌƚŵĞŶƚ ϲ͕ϯϬϬ͘ϬϬΨ WŽůŝĐĞ Ϭϭϭ͘ϭϬϯϭ͘ϱϵϲϮϬϬ //ƐǇƐƚĞŵĂĐĐĞƐƐĂŐƌĞĞŵĞŶƚ͕ƉƌĞǀŝŽƵƐůǇďƵĚŐĞƚĞĚŝŶ&ŝƌĞ ĞƉĂƌƚŵĞŶƚ ϯϬ͕ϬϬϬ͘ϬϬΨ WŽůŝĐĞ Ϭϭϭ͘ϭϬϯϭ͘ϴϱϬϬϬϬ ŝͲŝƌĞĐƚŝŽŶĂůĂŵƉůŝĨŝĞƌƚŽŝŵƉƌŽǀĞƌĞĐĞƉƚŝŽŶŝŶƐŝĚĞWŽůŝĐĞ ^ƚĂƚŝŽŶĂŶĚŝƚǇ,Ăůů ϯϮ͕ϬϬϬ͘ϬϬΨ WŽůŝĐĞ Ϭϭϭ͘ϭϬϯϭ͘ϴϰϬϬϬϬ ϮϬϮϬWŽůŝĐĞ/ŶƚĞƌĐĞƉƚŽƌďƵĚŐĞƚĞĚŝŶ&zϮϬϮϬďƵƚǀĞŚŝĐůĞ ƉƵƌĐŚĂƐĞĐŽŵƉůĞƚĞĚŝŶ&zϮϬϮϭĚƵĞƚŽƉĂŶĚĞŵŝĐ ϱϮ͕ϯϬϬ͘ϬϬΨ WƵďůŝĐtŽƌŬƐ Ϭϭϭ͘ϭϬϰϯ͘ϴϰϬϬϬϬ WƌĞƉĂƌĞWůĂŶƐĂŶĚ^ƉĞĐŝĨŝĐĂƚŝŽŶƐĨŽƌ&ƵĞů^ǇƐƚĞŵhƉĚŐƌĂĚĞ нE'ͬs ϳϱ͕ϬϬϬ͘ϬϬΨ WƵďůŝĐtŽƌŬƐ Ϭϭϭ͘ϭϬϰϯ͘ϵϬϬϬϬϬͬ Ϭϭϭ͘ϮϬϰϯ͘ϵϬϬϬϬϬ ZĞŵŽĚĞůŝŶŐŽĨϮĂĚĚŝƚŝŽŶĂůŚŽŵĞƐƚŚĂƚďĞĐĂŵĞǀĂĐĂŶƚŝŶ &zϮϬϮϭ ϮϬϬ͕ϬϬϬ͘ϬϬΨ WƵďůŝĐtŽƌŬƐ Ϭϭϭ͘ϭϬϰϴ͘ϵϬϬϬϬϬ &ĞĚĞƌĂůĨƵŶĚĞĚƚůĂŶƚĐƌŝĚŐĞƌŝŐŚƚŽĨǁĂǇďĂƐĞĚŽŶůĂƚĞƐƚ ĂƉƉƌĂŝƐĂů ϰϱϬ͕ϬϬϬ͘ϬϬΨ WƵďůŝĐtŽƌŬƐ Ϭϭϭ͘ϭϬϰϵ͘ϱϵϲϮϬϬ WŝĐŬƵƉ͕ŐƌĂĨĨŝƚŝƚƌƵĐŬĂŶĚĚƵŵƉƚƌƵĐŬďƵĚŐĞƚĞĚŝŶ&zϮϬϮϬ ďƵƚǀĞŚŝĐůĞƉƵƌĐŚĂƐĞĐŽŵƉůĞƚĞĚŝŶ&zϮϬϮϭĚƵĞƚŽ ƉĂŶĚĞŵŝĐ ϮϱϬ͕ϬϬϬ͘ϬϬΨ KƚŚĞƌ&ƵŶĚƐǆƉĞŶĚŝƚƵƌĞĚũƵƐƚŵĞŶƚƐ tĂƚĞƌ ϬϮϬ͘ϭϬϴϰ͘ϳϲϬϬϭϬ ϮϬϮϬ^ĞƌŝĞƐŽŶĚ/ŶƚĞƌĞƐƚWĂǇŵĞŶƚ ϰϯϳ͕Ϯϯϭ͘ϲϬΨ ůĞĐƚƌŝĐ Ϭϱϱ͘ϴϭϬϬ͘ϱϵϲϮϬϬͬ Ϭϱϱ͘ϵϬϬϬ͘ϱϵϲϮϬϬ ^ĞĐƵƌŝƚǇƐĞƌǀŝĐĞƐĨŽƌĐŽŶƚŝŶƵĞĚKs/ͲϭϵŵŽŶŝƚŽƌŝŶŐ͕ƐŽĐŝĂů ĂŶĚƉŽůŝƚŝĐĂůƵŶƌĞƐƚĂŶĚĂƌŝƐĞŝŶĐƌŝŵĞĂŶĚǀĂŶĚůŝƐŵƚŽ ϱϬϳ͕ϱϬϬ͘ϬϬΨ /dzK&sZEKE DŝĚͲzĞĂƌƵĚŐĞƚĚũƵƐƚŵĞŶƚƐ &zϮϬϮϬͲϮϭ Resolution No. 2021-04 Page 3 of 3 __________________ City Council Agenda Item Report Agenda Item No. COV-522-2021 Submitted by: Scott Williams Submitting Department: Finance/Treasury Meeting Date: March 16, 2021 SUBJECT Fiscal Year 2020-2021 Mid-Year Financial Update Recommendation: Adopt Resolution No. 2021-04 approving Mid-Year Budget Appropriations and amending the Fiscal Year 2020-2021 Budget. Background: Following best practices and given the extraordinary economic circumstances surrounding the current pandemic, the Finance Department will provide a briefing to the City Council to report budget to actuals for the City and Vernon Public Utilities on the first six months of Fiscal Year 2020-2021. General Fund Revenue Trends and Highlights Revenues are expected to meet or exceed projections in most categories. Some revenue categories, such as property and parcel taxes, are primarily collected in the second half of the fiscal year per the disbursement schedule of the County and do not reflect 50% of the fiscal year at December 31. Sales Tax is exceeding budgeted estimates, and the City’s sales tax analytics firm has indicated that this trend is expected to continue. Other categories have generated year-to-date revenues as expected, and the City has not assessed late payment fees since March 2020 following the Los Angeles County protocols of the state of emergency. With General Fund revenues at 49.6% as of December 31, 2020 and given the timing of revenues to be collected in the second half of the fiscal year, revenue trends year-to-date are following the budgeted expectations of meeting current year operations. Expenditure trends With 50% of the fiscal year elapsed, the General Fund expenditures across all City Departments are at 47.7% of budgeted expenditures. Department Directors continue exercising fiscal discipline and are working to control expenditures in their annual budgets, and salaries and benefits for all departments are under 50% mid-year. Maintenance and operations expenses are at 35.9% and capital projects and equipment expenses are at 49.3% for all departments as of December 31, 2020. Enterprise Funds Revenue and Expenditure Trends As of December 31, 2020, Electric revenues are at 53.8%, Gas is at 62.2%, and charges for services in the Water Fund are at 58.2%. Fiber Optic revenues are at 36.9% of budgeted revenue due to the timing of billing. VPU continues to look for opportunities to operate its systems efficiently while at the same time addressing infrastructure needs and maintaining operational expenditures as budgeted. As of mid-year, VPU is below 50% of budgeted expenditures for all funds combined. Proactive steps have been taken to manage personnel costs as reflected in salaries and benefits expenditures for all utilities are below 50%. Cash Position Approximately 78% of the City’s cash funds are unrestricted, with the electric utility reserves exceeding 180 days of operating expenditures. The General Fund reserve balance has increased over the last two fiscal years. Cash on hand approximately 28% of total funds for day to day operations and activity. The remainder of the funds are invested in money market accounts and mutual funds. Economic Outlook Given the extraordinary circumstances with the state of emergency, the City’s economic outlook has proven very resilient. However, the outlook is still one of caution, as the economic impacts of the COVID-19 pandemic are expected to continue for some segments of business for several quarters, depending on State and County responses to infection rates. These impacts have resulted in reduced revenues for some businesses and may continue to do so over the next year. However, activity within the City’s operations will have a positive impact, such as the long-term savings from the transition of City Fire operations to Los Angeles County, and the available resources to the General Fund that are generated from the voter approved Transactions and Use Tax. The City is also continuing its efforts to recover extraordinary expenditures related to the State of Emergency in the form of grants and FEMA relief. Proposed Budget Adjustments Due to factors related to the state of emergency, as well as expenditures that were not known or expected at the adoption of the FY 2020/2021 Budget, staff recommends adopting a resolution for budget adjustments from City departments and enterprise funds. The schedule of recommended adjustments are attached as Exhibit A to the proposed resolution. Fiscal Impact: Approved budget adjustments will result in an appropriation for each fund incorporated in the current year budget. Attachments: 1. Resolution No. 2021-04