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Item 12.b. - Page 1
CITY COUNCIL
CONSIDERATION OF FY 2016-17 BUDGET
JUNE 14, 2016
PAGE 2
and/or investment that will require attention in the short and long-term. The data
gathered and analyzed during this Biennial Budget will provide for the Council to make
well-informed decisions in the next Biennial Budget. The list of unmet needs far exceeds
the City’s current ability to fund. Therefore, the following items are recommended as
priorities, listed in order of importance: addressing salary inequities necessary to attract
and retain a quality workforce, support and implementation of information technology
needs, parks and facility infrastructure maintenance and improvements, and stormwater
program implementation.
ANALYSIS OF ISSUES:
Budget summaries for all funds are incorporated into the document. The FY 2016-17
proposed budget will continue to fund high quality services provided to the community,
and will invest in the future through capital improvements and maintenance activities.
General Fund
The General Fund balance is projected to be approximately $5.2 million by the end of
the biennial budget period. This amount will exceed the City’s policy goal of 20% of
General Fund expenditures. Staff has requested additional appropriations of $339,600
to provide for a compensation study, economic development assistance, matching
funds for a grant to assist with transportation funding, evaluation and repair of the
Swinging Bridge, and part-time staff to assist with tournaments at the Soto Sports Fields
(offset by user fees). In addition, the FY 2016-17 budget addresses changes in
minimum wage laws for part-time employees, increased costs for fire services, and
decreased costs for workers compensation insurance.
Enterprise Funds
Both the Water and Sewer Fund revenues assume that a rate increase will take effect in
August 2016 to mitigate loss of revenue due to drought conditions. The Water Fund
has a projected available fund balance at the end of FY 2016-17 of $3.9 million, which
remains above the minimum policy goal. The ending fund balance for the Sewer Fund
is projected to be $1.4 million, which also meets the minimum fund balance policy goal.
Additional appropriation requests include $15,000 in the Water Fund and $12,100 in the
Sewer Fund as detailed in the attached report.
Capital Improvement Program
The recommended Capital Improvement Program (CIP) includes the addition of
$57,000 for stormwater and/or drainage improvement projects, a reduction of $100,000
for the Le Point Street Parking Lot and the appropriation of $200,000 from the General
Fund reserve for the Swinging Bridge. Additional information is provided in the attached
report.
Local Sales Tax Fund
Along with recommended changes to the FY 2016-17 Capital Improvement Program
mentioned above, an appropriation of $17,500 is requested for annual stormwater
Item 12.b. - Page 2
CITY COUNCIL
CONSIDERATION OF FY 2016-17 BUDGET
JUNE 14, 2016
PAGE 3
stream monitoring and $96,700 is recommended to augment Gas Tax revenue losses in
FY 2016-17.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Adopt the Resolution approving the FY 2016-17 Budget;
2. Modify and approve FY 2016-17 Budget;
3. Do not approve the FY 2016-17 Budget;
4. Provide direction to staff.
ADVANTAGES:
The recommendations in the Budget reflect revenue and expenditure strategies that will
accomplish the following:
Maintain key service levels;
Maintain a substantial investment in improvements to the City’s infrastructure and
facilities;
Maintain reserves at or above the City’s policy levels; and
Limit reliance on one-time revenues.
DISADVANTAGES:
The budget does not address all unmet needs and a number of uncertainties exist that
could negatively impact revenue projections and status of the proposed budget. These
uncertainties include the following:
Transportation funding from the State
Transportation funding provided through a local sales tax measure;
Costs for County animal control facility; and
Overall economic development activity.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, June 9, 2016 and on the
City’s website on Friday, June 10, 2016. No comments were received.
Attachment:
1. City of Arroyo Grande Budget Update Report (distributed to Council under separate
cover; document available for viewing on the City’s website)
Item 12.b. - Page 3
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE ADOPTING FISCAL YEAR 2016-17 OF
THE FISCAL YEAR 2015-16 & 2016-17 BIENNIAL BUDGET
AND MAKING APPROPRIATIONS FOR THE AMOUNT
BUDGETED
WHEREAS, a proposed Biennial Budget for the City of Arroyo Grande for the Fiscal Years
commencing July 1, 2015 and ending June 30, 2016 and commencing July 1, 2016 and
ending June 30, 2017 was submitted to the City Council and is on file with the Director of
Administrative Services; and
WHEREAS, the City Council also serves as the Board of Directors of the Successor
Agency to the Dissolved Arroyo Grande Redevelopment Agency; and
WHEREAS, proceedings for adoption of said Budget have been duly taken; and
WHEREAS, the total Budget for FY 2016-17 is $42,481,082.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES
RESOLVE AS FOLLOWS:
SECTION 1. The Budget is adopted as the Biennial Budget for the City of Arroyo Grande
for the Fiscal Year commencing July 1, 2016 and ending June 30, 2017.
SECTION 2. At the close of each Fiscal Year, unexpended appropriations in the Operating
Budget will be carried forward to the next fiscal year as necessary to underwrite the
expense of outstanding purchase commitments. Unexpended appropriations for authorized,
but uncompleted projects as approved by the City Council may be carried forward to the
next succeeding Budget upon recommendation by the Administrative Services Director and
approval of the City Manager.
On motion of Council Member , seconded by Council Member , and on
the following roll call vote, to wit:
AYES: Council Members
NOES: Council Members
ABSENT: Council Members
the foregoing Resolution was passed and adopted this day of , 2016.
Item 12.b. - Page 4
RESOLUTION NO.
PAGE 2
JIM HILL, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
DIANNE THOMPSON, CITY MANAGER
APPROVED AS TO FORM:
HEATHER WHITHAM, CITY ATTORNEY
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