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Home My WebLink About2023/06/15 - Special Meeting - Preliminary Budget Study Session CITY COUNCIL VISION STATEMENT “Our Vision is to create an equitable, sustainable, and vibrant city, rich in opportunity for all to thrive by building on our foundation and success as a world class community.” Page 1 CITY OF RANCHO CUCAMONGA SPECIAL MEETING WORKSHOP CITY COUNCIL/FIRE PROTECTION DISTRICT June 15, 2023 – 3:00 PM Council Chambers 10500 Civic Center Drive Rancho Cucamonga, CA 91730 CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL: Mayor Michael Mayor Pro Tem Kennedy Council Members Hutchison, Scott and Stickler A. PUBLIC COMMUNICATIONS This is the time and place for the general public to address the City Council on any item listed on the agenda. State law prohibits the City Council from addressing any issue not previously included on the Agenda. The City Council may receive testimony and set the matter for a subsequent meeting. Comments are to be limited to five minutes per individual or less, as deemed necessary by the Mayor, depending upon the number of individuals desiring to speak. B. ITEMS OF DISCUSSION B1. Discussion and Consideration of Proposed Budgets for Fiscal Year 2023/24. (Verbal Report) (Document is available for review at City Hall and https://www.cityofrc.us/your-government/budget) (CITY/FIRE) C. ADJOURNMENT CERTIFICATION I, Linda A. Troyan, MMC, City Clerk Services Director of the City of Rancho Cucamonga, or my designee, hereby certify under penalty of perjury that a true, accurate copy of the foregoing agenda was posted on at least Twenty-four (24) hours prior to the meeting per Government Code 54954.2 at 10500 Civic Center Drive, Rancho Cucamonga, California and on the City's website. LINDA A. TROYAN, MMC CITY CLERK SERVICES DIRECTOR If you need special assistance or accommodations to participate in this meeting, please contact the City Clerk's office at (909) 477-2700. Notification of 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility. Listening devices are available for the hearing impaired. Fiscal Year 2023/24 Proposed Budget Study Session June 15, 2022 •City Council SMART Goals •FY 2022/23 Budget Recap •FY 2023/24 Budget Challenges •Local Economy, Personnel Costs and Staffing, CalPERS •Department Overviews and Capital Projects •Operating Budget Overview •Special Districts Budget Presentation Overview By the end of November 2023, present a partnership for a design-and-build of affordable for-sale homes. By September 2023, provide recommendations for the top economic development initiatives to pursue in 2024 and 2025. By December 2023, present funding options for costs to build the bridge, widen the roadway, reduce vehicle miles traveled, and reduce emissions on Etiwanda Avenue. By the end of March 2024, present findings from a review of current and proposed police facilities to improve police infrastructure. City Council SMART Goals The City navigated the impacts and recovery from the COVID-19 pandemic in Fiscal Year 2022/23. FY 2022/23 Budget Recap NOW Looking Back Going Forward The City prioritizes economic development, restructuring, and preparing for potential economic challenges. Challenges included remote work, employee vacancies/ retirements/ hiring, and mixed- signals with consumer confidence. FY 2022/23 Budget Recap Economic Indicators Finance, just working Finance, just confused FY 2022/23 Budget Recap How to land a $24 Trillion airplane State of California Budget Deficit *May 2023 Revision •Revised estimated deficit is $31.5 Billion. •LAO predicts a 1-in-6 chance that revenues meet the Governor’s May revision. •CA only making modest cuts, relying on one-time revenues and reserves, and shifting funds arounds. FY 2023/24 Budget Challenges The final 2% to get back to the normal 2-3% growth will be difficult. FY 2023/24 Budget Challenges 5.0% change; fastest rate of change since 1970’s. 413 days or about 13 months. To curb inflation, people need to stop spending… FY 2023/24 Budget Challenges How its supposed to work… Home Mortgages as an example: •$500,000 Home Price, 20% down ($100,000) •30-year mortgage •Remove property tax, insurance, HOA @ 2.50% Interest Rate, monthly mortgage = $1,580 @ 6.92% Interest Rate, monthly mortgage = $2,640 Difference = $1,060 Affordability issues reduce demand, which should reduce prices. FY 2023/24 Budget Challenges Although in today’s economy, the supply- demand intersection of mortgage rates, home prices, buyer competition, housing supply, sales activity, and affordability are complicated. Just like the rest of the economy. Local Economy Rates should decline in the long-term.Unemployment will rise, temper inflation. Local Economy Unemployment in Rancho Cucamonga is extremely low, just a tick over 2.5%, equaling pre- COVID lows. Local Economy City has a well-diversified economy 51% of the City’s employment is •Administrative support, •Restaurant/hotel, •Government, •Retail trade, and •Manufacturing Local Economy Employment payroll in the City is lower-paying and lower-skill professions. Contrary to City’s residents, which are highly educated and higher-paid. Local Economy Employment is expected to rise over the next four years in Rancho Cucamonga. Local Economy Housing prices had accelerated relative growth during 2000-2006 and 2020-2022; Average for 22 years, overall, is about 10.5% per year. Local Economy Except, housing prices and sales are marching to different tunes. One is rising and the other declining. Local Economy The combination of increasing home prices, increased borrowing rates for new loans, and lack of inventory (i.e.,home loan “prison”) will continue to impacts sales. Local Economy The City approved over 1,400 units in 2022. Local Economy Multi-family housing is the priority product for home developers. The City presently has some 1,200+ apartment units under construction, with another 500+ units entitled.Increase of $1,000, or 57.1% Local Economy Examples of apartment rents by square footage at Homecoming at The Resort: Local Economy Homecoming at the Resort La Mirage Westbury Alta CuveeHaven and Arrow 33 North Harvest at Terra Vista Local Economy Warehouse/distribution space has been rising steadily the last seven years but accelerated rapidly during COVID-19. Fueled by demand with on-line retailers and consumer-delivery models. Local Economy Compared to other business models, there are fewer workers per sq/ft. Local Economy Furthermore, the local demographic is well- positioned, with the right skill and education sets. Employment payrolls for employees with skills in transportation/warehouse sector are lower-paid, but still slightly above the median salary. Local Economy Furthermore, there are low vacancy rates, which reflect overall demand for the business model…. but reasonable caution: over-reliance on one sector of the business economy usually is not a good strategy Local Economy Warehouse and Distribution Projects: Under Construction: 1. 2.2 million sq. ft. 2. 104,270 sq. ft. Plan review: 3. 651,000 sq. ft. 4. 143,015 sq. ft. Entitlement review: 5. 1,037,470 sq. ft. 6. 91,370 sq. ft. 7. 86,000 sq. ft. 8. 74,390 sq ft. Local Economy As shown earlier, the residents of the City have high skill and high education rates. Presents a mismatch of residents and jobs Local Economy Results in a traveling economy, working in higher-pay areas, and living elsewhere. Local Economy Presents an opportunity and dilemma: 1.City of Rancho Cucamonga is well positioned to take advantage of growth industries given higher level of education 2.Earnings gap are beginning to equalize or swap 3.Yet, warehouse and distribution centers (which have large footprints –even if vertical) could take up space for higher- paying businesses and firms Local Economy Other Notes: Public Safety – •Nationwide challenges in staffing police and sheriff departments •Rising costs; 44% of the General Fund’s budget Employee Staffing – •Competition is high for the same talent between public and private. •Growing disinterest with government jobs •Overall shortage of technical or blue-collar jobs Local Economy Hospitality: •Hospitality is strong and highest in region. o Occupancy and Average Daily Rate is up 7% for the year; 83.4% and $162.39 in March 2023 o Revenue per Average Room up 15% for the year; $135.37 in March 2023 •New luxury and full-service hotel, Hilton Tapestry, expected to open by Q1 of 2024. •Overall, forecasting positive impacts for TOT revenues. Hilton Tapestry at Base Line and Day Creek Local Economy Brightline West •Private provider of modern, eco-friendly intercity passenger rail service. •Brightline West will cover 218 miles, operating at speeds of 186+ miles per hour. •Brightline Florida is operational in South Florida, while Brightline West is being developed to connect Las Vegas and Southern California with a high-speed rail system. •The project is a joint public-private partnership between California, Nevada, and Brightline West, creating jobs, economic impact, and reducing carbon emissions and road congestion. Local Economy Property Tax •Net taxable value increased by 8.6% for the 2022/23 tax roll, slightly below the countywide increase of 9.4%. •Residential properties, comprising 70% of the property tax value, experienced a $1.6 billion growth in assessed valuation. •Home sales have been declining significantly, even below 2020 levels, due to rising interest rates. •The forecast for the upcoming FY 2023/24 tax year is continued slow growth in Rancho Cucamonga. Local Economy Local Economy Sales Tax •Sales tax experienced an 8-10% drop due to the shift to online retailers and weakened brick and mortar locations. •Changes in sales tax allocation have negatively impacted many cities in California. •Cities like Rancho Cucamonga are losing over $1,000,000 in sales tax revenue, with the lion's share going to locations with fulfillment centers. •Forecasts indicate that brick and mortar growth is slowing down, while online sales continue to grow. Local Economy Personnel Costs and Staffing Levels Full-Time Personnel •City employees are crucial for the delivery of programs and services. •Personnel costs constitute 24% of the budget and 74% with police and fire included. •The City is dedicated to hiring and retaining employees with specific qualities and fostering a modern work culture. Personnel Costs and Staffing Levels Part-time Personnel •Hiring part-time employees is challenging due to competition, abundant job openings, and higher wages offered by other employers. •Post-pandemic, over 2 million workers, including GenX and Millennial workers, have not returned to the labor force. CalPERS •Employee compensation includes retirement benefits provided by CalPERS, a defined benefit plan. •The City has limited control over employer contributions to CalPERS, leading to potential cost increases. •The California Public Employees' Pension Reform Act (PEPRA) established retirement compensation limits to address pension liabilities. •As more employees fall under PEPRA rates, the City's contribution to CalPERS is expected to stabilize or decrease over time. CalPERS PEPRA rates are increasing between 0.75% and 1% for Fiscal Year 2023/24. CalPERS •Pension benefits are funded through CalPERS investments and employer contributions. •CalPERS aims for a 6.8% rate of return annually. •CalPERS experienced a net rate of return of -6.1% for the period ending June 30, 2022, due to global financial market volatility and other factors. •As a result, the funded status of the overall system decreased as of June 30, 2021, to June 30, 2022 CalPERS Unfunded Accrued Liability (UAL) •The Fire District’s classic safety employees have a UAL contribution rate of 40%, exceeding the normal required employer contribution of 28%. •An increasing UAL results in higher total pension payments and can strain organizational budgets, potentially impacting service delivery. •The City and Fire District proactively address UAL by making supplemental payments and utilizing surplus funding to reduce long- term pension costs and stabilize budgets. Public Safety Police Department and Community programs •City contracts with San Bernardino County Sheriff's Department. •Programs include School Resource Officers, Crime Prevention Unit, SOP, HOPE, ABC compliance, Human Trafficking Task Force, and MET. o SOP team addresses homelessness-related quality-of-life issues. Public Safety Police Department ALPR and Real-Time Information Center (RTIC) •Adding 20 ALPR cameras ($358,000) at intersections and equipping trucks ($61,700) for traffic and parking enforcement. •Investing in completing the RTIC ($250,000) project for real-time information and camera integration. o Improves incident management and operational awareness. Police Department Facilities •Main Police Station, satellite offices at Victoria Gardens Mall and West Side PSF. •PSF enhances customer service and has centralized evidence repository. •Victoria Gardens Station is the main location for MET. •Assessing facilities for incremental improvements. Public Safety Fire District Construction of Fire Station 178 •New station on Town Center Drive and Terra Vista Parkway. •Addresses service delivery issues and supports modern facilities. •Includes 9/11 First Responder Memorial Park and EV fire engine. •Station 178 will run off the grid for 24 hours with solar panels and battery storage. •Completion expected in 4th Quarter of FY 2023/24. Public Safety Fire District ADA Improvements and Fleet Upgrades: •ADA improvements at Fire Stations 173, 174, and 175. •Deployment of electric fire engine at Station 178. •Replacement of Tiller Truck, Type 1 engine, and Fire Shop Truck. Fire District Partnerships with the City: •Collaboration on crossing guard services, IT projects, and fleet maintenance. Public Safety Animal Services Department: •Handles thousands of homeless pets annually. •Operations including sheltering, field services, veterinary, and volunteer opportunities. •Puff's Pantry: o Community resource for pet items (collars, leashes, food) o Expansion of community safety net programs Public Safety Community Improvement Department: •Added a new Community Improvement Officer position, responsible for addressing complaints and conducting inspections. •Extending the officer's role to encompass illegal massage establishments and annual inspections to ensure compliance. •Working closely with the City's Critical Case Team, consisting of Animal Control, Police, Fire, Building and Safety, and Planning departments, to find long-term solutions for community safety. Public Safety Capital Projects Public Safety Capital Projects Over $1,000,000 1. Fire Station 178: $25,742,420 •Addresses systemwide draw-down issues •Includes specialized equipment access •Features an electric fire engine, 9/11 First Responder Memorial Park, and a 24/7 Library kiosk 2. Fire Station 173, 174, and 175: $1,808,060 •ADA accessibility and workforce diversity improvements •Aligns with ADA Self-Evaluation and Transition Plan 3. Heritage Park Bridge Replacements: $2,190,000 •Replacement of vehicular/pedestrian bridge and pedestrian-only bridge •Mitigates wildfire threats and facilitates apparatus staging Economic and Community Development Building and Safety Department: •Community Development Team (CD Techs) to serve as front-facing representatives for immediate needs. •Increasing virtual inspections to streamline project approvals. •Launching SolarAPP for instant processing and issuance of residential solar permits. •Commitment to inclusion and equity through accessibility measures and supporting CASp certifications. Economic and Community Development Engineering Services Department: •Creation of new Transportation Section to manage transportation projects. •Working on ATMS Phase 2 to improve traffic flow along city corridors. •Capital Management Team working on Etiwanda Grade Separation Project for enhanced transportation infrastructure. •Collaborating on bicycle and pedestrian projects, including Day Creek Trail, Cucamonga Creek Trail, and 6th Street Cycle Track. Economic and Community Development Public Works Department: •Transitioning fleet to EVs to reduce greenhouse gas emissions. •Development of the Urban Forest Management Plan. •LED sports lighting upgrades will be implemented to reduce energy consumption and maintenance costs. •Drought-tolerant landscape projects and water conservation efforts are planned. •Capital projects include Red Hill Lake redesign, The Bark at Central Park, Family Resource Center remodel, and Civic Center Waterproofing. Economic Development and Community Development Capital Projects Economic Development and Community Development Capital Projects Over $1,000,000 1. Drought Tolerant Landscape Renovations •Landscape Maintenance District 2: $7,850,000 •Landscape Maintenance District 4R: $4,490,000 •Conceptual design for Landscape Maintenance District 1 and 6R: $100,000 per district 2. LoanMart Field Improvements: $1,254,000 •Upgrade field lighting to LED •Laser grade and reseed the field with drought- tolerant turf 3. Sports Field LED Lighting Upgrades: •Soccer field: $600,000 •Tennis courts at Beryl Park: $70,000 •Two baseball fields at Day Creek Park: $384,000 •North soccer/football fields at Etiwanda Creek Park: $150,000 Economic Development and Community Development Capital Projects 4. PD-85 LED Sports Lighting Upgrade: $2,000,000 •Upgrade sports lighting fixtures at Heritage Park baseball fields to LED technology 5. Civic Center HVAC Plant Replacement: $2,300,000 •Replace three 150-ton chillers and related pumps at City Hall and Public Safety building •Increase energy efficiency and reduce operational costs 6. City Hall Waterproofing: $1,800,000 •Repair exterior joints and weatherproof the brick façade of City Hall •Enhance maintenance and extend the building's lifespan 7. Citywide Concrete Repair/Sidewalk Replacement: $1,500,000 •Replace sections of concrete sidewalks, curb/gutters, and drive approaches •Focus on Beryl Street to Hellman Avenue between 210 and Banyan Street Economic Development and Community Development Capital Projects 8. Red Hill Lake Improvement Project: $1,800,000 •Reduce the footprint and depth of the lake •Add water filtration and treatment processes •Improve maintenance, environmental concerns, and community enjoyment 9. 6th Street Cycle Track: $1,400,000 •Construct a buffered bike lane (cycle track) along 6th Street •Improve bike infrastructure, pedestrian circulation, and urban environment 10. Advanced Traffic Management System (ATMS) -Phase 2: $7,400,000 •Construct fiber optic interconnections for traffic signal coordination •Improve traffic operations on Milliken Avenue, 19th Street, Arrow Route, Rochester Avenue, and Day Creek Boulevard 11. Local Street Overlay: $4,300,000 •Restore road surface in various locations across the city Economic Development and Community Development Capital Projects 12. Pavement Rehabilitation Projects: $5,200,000 •Rehabilitation of city pavements 13. West Foothill Boulevard Street Improvements: $2,700,000 •Construct sidewalks, curb and gutters, streetlights, and new asphalt •Realignment of Red Hill Country Club Drive and Foothill Boulevard •Improve safety, mobility, and restore roadway pavement condition 14. Etiwanda Grade Separation: $100+ million •Completing the right-of-way and design to create a shovel-ready project that can compete for construction funding •Provides improved transportation infrastructure which promotes safety for users, encourages economic development, and reduces GHG emissions Civic and Cultural Services Community Services Department: •Redesigned programs and services based on survey data. o Discontinued some services, increased funding for special events, and improved marketing and communication. •Central Park now includes Lions East and West services, Family Resource Center temporarily transitions to Central Park for renovations. o Family Resource Center to be remodeled using American Rescue Plan Act grant funds. Civic and Cultural Services Community Services Department: •Theater performances and rentals resumed at Lewis Family Playhouse; Victoria Gardens Cultural Center fully funded for future service delivery. •Capital Improvement Projects: Beryl Park Inclusive Playground, Family Resource Center Remodel, Victoria Gardens Cultural Center Courtyard. Civic and Cultural Services Library Services Department: •In-person programs resumed at Biane Library and Archibald Library. •New services: Book a Librarian, Career Online High School (COHS), Second Story and Beyond®. •Facility improvements and renovation of Lions Center buildings for Archibald Library replacement. •Materials kiosk to be installed at Fire Station 178. Civic and Cultural Services City Clerk Services Department: •Records Management Division creating a centralized Records Storage Center. •Centralized records repository to house City and Fire records. •Procurement of records management software for accurate record retrieval and inventory. Civic and Cultural Services Capital Projects Civic and Cultural Center Capital Projects Over $1,000,000 1. Second Story and Beyond®Capital Project: $4,500,000 •Children's interactive learning space with museum-quality exhibits •Supported by grants from San Bernardino County and NASA 2. Archibald Library Replacement Project: $13,000,000 •Remodel of Lions Center East and West facilities •Additional community meeting spaces, collection space, and outdoor programming space •$6.5 million Infrastructure Grant funding from the California State Library 3. Biane Library Infrastructure Project: $1,200,000 •Facility refresh including HVAC system replacement, new flooring, lighting upgrades, and ADA compliance improvements •$595,000 Infrastructure Grant funding from the California State Library Adm inistrative Services Finance Department: •Implementation of the City's new ERP system, Workday, to enhance financial management and decision-making. •Exploring technologies like remote deposit and lockboxes to improve banking processes. Procurement Division: •Integration of Procurement into the Finance Department. •Revising purchase order limits. Adm inistrative Services Department of Innovation and Technology (DoIT): •Focus on cybersecurity improvements, infrastructure replacements, and modernization of legacy applications. •Implementation of a Real Time Information Center (RTIC) for public safety. •Advancements in GIS and data sciences for better decision making. Adm inistrative Services Human Resources Department: •Implementation of Workday to improve HR service delivery and workforce analytics. •Participation in the DRIVE initiative for race, equity, and inclusion. •Workplace safety initiatives and employee wellness programs. •Transformation to a full-service business partner model. Adm inistrative Services Capital Projects Administrative Services Capital Projects Over $1,000,000 1. Workday Enterprise Resource Planning (ERP) Implementation: $5,100,000 •Implements financials, payroll, and human capital management •Streamlining processes, digitizing transactions, and improving efficiency •Modern software application meeting technology standards City Manager’s Office Capital Improvement Projects: •Victoria Gardens Cultural Center Courtyard renovation •Wildfire Early Detection System project •Cucamonga Canyon Trailhead project •Arbor Court redesign at the Cultural Center Community Engagement: •Ambassadors of Community Engagement (ACE) program •Bi-monthly trainings and office hours for ACE members •Support for citywide engagement efforts, including surveys and plans City Manager’s Office Quality-of-Life Survey: •Conducting the 2023 Quality-of-Life Survey •Developing strategies based on survey results Community Initiatives: •Expansion of Community Schools initiative •Participation in the National League of Cities' Cities of Opportunities program Opioid Litigation Settlements: •Participating in nationwide settlements for opioid abatement •Allocating funds for targeted outreach and engagement City Manager’s Office Climate Action and Electric Vehicles: •Promoting sustainable practices through community engagement •Leading Electric Vehicle Infrastructure Task Force and seeking funding Affordable Housing: •Exploring innovative construction methods for affordable homes •Using Surplus Land Act process to develop affordable housing Race, Equity, and Inclusion: •Implementing the RC DRIVE program for equity and inclusion •Utilizing Government Alliance on Race and Equity for support and training City Manager’s Office Public Art: •Implementing RC Public Art Plan •Beautification projects, murals, and temporary art exhibits Government Relations and Advocacy: •Building relationships with neighboring cities and representatives •Monitoring legislation and advocating for key issues •Applying for federal funding for various projects City Manager’s Office Capital Projects City Manager’s Office Capital Projects Over $1,000,000 1. Victoria Gardens Cultural Center Courtyard Redesign: $3,600,000 •Enhance outdoor space with shade, seating areas, lighting, and a permanent outdoor stage •Repainting of the Cultural Center and Biane Library 2. Wildfire Early Detection System: $1,900,000 •Installation of a 30-camera system along the City’s northern boundary •Rapid detection, reporting, and response to wildfires •Grant from the State of California 3. Cucamonga Canyon Trailhead Improvement: $1,600,000 •Improve a 5-acre trailhead for hikers •Monument, seating areas, shade structure, water fountain, and storage facilities •Enhancing access and services for recreational users Operating Budget Operating Budget Overview: •Operating Budget increased by $6,753,090 (4.02%). •Fire District's share increased by $3,079,400 (5.77%) due to new personnel associated with Fire Station 178. •Police Department budget increased by $3,000,490 (6.13%) due to higher contract cost. •Library Fund's share decreased by $1,064,030 (15.3%) due to separating the Second Story and Beyond®project into a separate fund. Operating Budget General Fund Sales Tax and Revenue: •Sales Tax is the City's primary revenue source. •Estimated to be $39.43 million, a 3.85% increase. •Victoria Gardens contributes approximately 18% of sales tax. •Rancho Cucamonga ranks modestly in sales tax generation compared to neighboring cities. General Fund VLF and Property Tax In-Lieu of VLF: •Estimated to be $25.5 million, a 6.58% increase. •Property tax valuation growth results in increased revenue overall. •Expected to remain a reliable and growing revenue source for Rancho Cucamonga. General Fund Property Tax Impact: •A significant portion of property tax is allocated to the State, School Districts, and County, limiting the amount received by the City for local services and initiatives. •The City relies on other revenue sources, such as sales tax and VLF, to support its operations and community development. General Fund Property Tax and Revenue: •Property tax are estimated to be $12.0 million, a 4.31% increase. •Overall net taxable value of property in Rancho Cucamonga increased by 8.63%, with significant growth in industrial (18.82%) and residential (7.60%) property values. *includes property tax transfer tax General Fund Diversified Revenue Approach: •City Staff recognizes the need for a nuanced approach to revenue generation as it implements its new General Plan and matures as a City. •The City relies on a combination of property taxes, sales taxes, and other revenue sources to fund essential services. •The focus is on maximizing revenue value and job creation per acre, emphasizing long-term growth and stability in the General Fund while considering selective and value-driven development opportunities. General Fund Franchise Fee Revenue: •Estimated to be $9.36 million, a 16.04% increase. •Franchise fees are affected by changes in consumer trends, changes in rates, conservation efforts, and commodity prices. •Despite fluctuations, franchise fees remain an important revenue source for the City. General Fund Transient Occupancy Tax Revenue: •Estimated to be $5.36 million, a 4.26% increase, including projected revenue from the Tapestry Hotel under construction. •With the growth in hotels, room availability, and increasing rates, TOT has become a significant revenue source for the City. General Fund Transient Occupancy Tax (TOT) Overview: •TOT is a tax applied per night on hotel rooms and short-term rentals, including platforms like Airbnb, for stays of 30 days or fewer. •TOT is a general-purpose revenue that cities can utilize for various purposes, such as homelessness prevention, property crime reduction, road repairs, park enhancements, senior services, and youth programs in partnership with schools. •TOT in Rancho Cucamonga is currently set at 10%, lower than other neighbors including Ontario. General Fund Business License Revenue: •Estimated to increase by $475,650 or 15.54%. •This growth is attributed to the ongoing enhancement of the business climate in Rancho Cucamonga. General Fund Development Fees: •Estimated to increase by $354,020, or 6.88%. •Driven by anticipated growth in mixed-use projects, large distribution centers, and development surrounding the Cucamonga Station project. •Expected to surpass pre-Great Recession levels, highlighting the positive impact of the new General Plan. General Fund Reserves and Fiscal Discipline: •The City utilized $908,130 of reserves during the Great Recession in FY 2010/11, but since then, the City has focused on building reserves and contributing $8.9 million over nine years. •In FY 2020/21, strong expenditure savings allowed for a balanced budget without utilizing reserves as anticipated. •FY 2023/24, a budgeted contribution of $1,644,340 is forecasted.Challenge going forward is continuing to increase this amount consistent with CPI. •This fiscal discipline ensures funding for capital equipment replacement, building repairs, and infrastructure maintenance. Fire District •Operating budget is estimated to be $56,410,060, a 5.7% increase. •Funding includes staffing for Fire Station 178 and ADA improvements. •Partnership initiatives with the City: shared Mechanic position, funding crossing guard services, and joint technology projects. Fire District Property Tax Impact: •Fire District's mission: Respond to and reduce threats to life and property through emergency and non-emergency services. •Main funding source: Property tax revenue, with a larger share of each property tax dollar (about 12.5 cents). More than City, but growth is capped. •Additional revenue sources: Statutory passthroughs from former Redevelopment Agency and residual receipts from the County's RPTTF. Fire District Community Facilities Districts No. 85-1 and 88-1: •Operating budget includes two Community Facilities Districts (CFDs) for designated station operations. o Property tax revenues account for about 85% of Fire District's operating revenues. •FY 2023/24 budget incorporates a proposed 7% increase to offset rising costs due to inflation. o Reduced CFD 85-1 (-5%) and CFD88-1 (-67%) rates were reduced 8 and 4 years ago. o Future rate adjustments based on updated information and analysis to align with cost increases exceeding property tax growth. *presented as a blended residential rate; each has formula based on total dwelling unites or size of property Library Fund •Operating budget is $5,889,580, a 15.3% decrease. •Property tax is the primary funding source, accounting for approximately 92.7% of revenues. •Property tax revenues expected to increase by 7.5%, including the passthrough from the prior Redevelopment Agency. Library Fund Library Services Department's Mission and Focus: •The mission of the Library Services Department is to Ignite Curiosity, Transform Lives, Create Community. •In FY 2023/24, will expand programming and launch new services, including Book a Librarian, Career Online High School (COHS), and Second Story and Beyond®(SSAB) discovery space. •Capital expenditures include the replacement of Archibald Library, installation of an additional mobile kiosk at Fire Station 178, and museum-quality exhibits at SSAB. Library Foundation and Endowment: •The Library Foundation has dissolved, but the Friends of the Library continue to fundraise. •The City Council is working on establishing an active endowment for Second Story. Library Fund Budget Discussion –Adult Literacy: Background and Analysis •Library's Literacy Services Division established in 1995 for one-on-one literacy tutoring for adults. •Receives annual grant funding ($20,000-$26,000) with specific guidelines, staffing requirements, and serving 9-10 learner pairs. •Adult literacy program to reassess and take hiatus due to low participation during the pandemic. •Library's Strategic Services Plan focuses on student success initiatives to address learning gap, create lifelong learners, and strengthen ties with schools. Fiscal Impacts: •Grant income would be reduced from $25,730 to $0. •Personnel expenses totaling $104,580 would be shifted to the Archibald Library. Library Fund Budget Discussion –Adult Literacy: Seeking City Council decision: How to reduce expenditures in Literacy Services by $25,730? Staff recommendation:Library Fund/Literacy Services 1290603-5100 Travel and Meetings $725 1290603-5160 Membership Dues $150 1290603-5200 Operations & Maintenance $1,000 $1,875 Library Fund/Administration 1290601-5200 Digital Magazines Collection $10,000 1290601-5010 Part-Time Salaries $10,700 1290601-5030 Fringe Benefits $3,170 $23,870 TOTAL SAVINGS FUND 290 $25,745 Special Districts Special Districts Overview •The City has 34 special assessment districts, many of which were established before Proposition 13 and lack regular adjustments for rising costs. •The General Fund provides minimal funding to ensure fiscal equity among the districts. •Service and maintenance levels are adjusted to address funding shortfalls, particularly on the west side of town. •The lack of interest in approving new voter measures has led to a growing list of deferred and unfunded maintenance items. Special Districts Recommended Rate Increases: •As a fiscal steward, adjustments are recommended where residents have given the City Council the authority, doing so only when necessary to balance budgets and accommodate rising costs. •Rate increases are recommended based on various factors, and over the last year is largely attributed to rate and contract labor cost increases, increasing in line with minimum wage hikes. •Rate increases are recommended for LMD 2 (5%), LMD 4-R (5%), LMD 6-R (3%), LMD 10 (5%), and CFD No. 2018-01 (5%). Special Districts New Street Lighting Community Facilities District (CFD): •Established to replace existing Street Lighting Districts (SLDs). •Addressing long-term financial problems and allowing annual rate adjustments. •Rates account for new land uses like mixed-use and accessory dwelling units. •Prevents worsening of fiscal challenges in the future. New Industrial Community Facilities District (CFD): •Formed due to significant surge in industrial development. •Fiscal impact analysis showed a revenue shortfall of nearly $3.5 million. •Reduced rate of $5,852 per acre to not constrain industrial development. •Generates revenue for maintaining services, storm drains, police safety, landscaping, and creating a capital reserve. •Helps offset impacts of new industrial development, despite being lower than projected revenue shortfall. Special Districts The City administers debt service payments for existing CFD Bonds to cover current and future debt until the bonds mature. •CFD No. 2000-01 (South Etiwanda): Maturity in September 2025. •CFD No. 2000-02 (Rancho Cucamonga Corporate Park): Maturity in September 2025. •CFD No. 2000-03 (Rancho Summit): Maturity in September 2035. •CFD No. 2001-01 (Day Creek and Victoria Gardens): Maturity in September 2031. •CFD No. 2003-01 (Day Creek and Victoria Gardens): Maturity in September 2033. •CFD No. 2004-01 (Rancho Etiwanda Estates): Maturity in September 2036. •CFD No. 2006-01 (Vintner's Grove): Maturity in September 2037. •CFD No. 2006-02 (Amador on Route 66): Maturity in September 2037. CFD 2003-01 increase by 2%, while others have no changes from the prior year. Questions ?