HomeMy WebLinkAbout021825-09.1 ADMINISTRATIVE STAFF REPORT 9.1
TO: Mayor and Town Council February 18, 2025
SUBJECT: Resolution No. 12-2025, accepting the mid-year Financial Report, approving
mid-year adjustments to the Fiscal Year 2024/25 Operating Budget and Capital
Improvement Program
INTRODUCTION
The Operating Budget is the Town’s annual plan for service delivery. The budget focuses on
services, programs and activities that are prioritized by the Town Council to meet the Town’s
mission, which is “To provide superior municipal services that make people’s lives better.”
The Capital Improvement Program (CIP) is the Town’s capital budget. The CIP identifies high
priority current and future capital needs and identifies potential sources of funding.
On June 4, 2024, the Town Council adopted Resolution 30-2024, approving the 2024/25
Operating Budget and setting the 2024/25 Appropriation Limit; and Resolution 33-2024,
approving the 2024/25 through 2028/29 Capital Improvement Program. The purpose of the
mid-year update is to review actual mid-year revenues and expenditures in comparison to the
adopted budget and CIP and make any necessary mid-year adjustments.
BACKGROUND
Overall mid-year revenues are on track to exceed the budgeted forecast with expenditures on
track to finish the fiscal year less than the total budget appropriation of $39.7 million. In
addition, the Annual Comprehensive Financial Report for fiscal year 2023/24 reflected a
positive fund balance of $7.55 million for the prior year.
Economic recovery has been bolstered by strong property values that continue to increase
property tax revenue. The overall sales tax economy remains sluggish as revenues continue to
recede from the high point realized at the end of 2022. This is attributable to reduced consumer
demand, and the failure of economic tailwinds that were anticipated last summer and fall to
materialize and a potential recession.
The Town continues to monitor a variety of factors that affect and influence the economy. A
new federal administration, inflation, interest rates, ongoing geopolitical instability and
natural disasters such as floods and wildfires are examples of factors whose effects can be felt
worldwide, nationally and locally. For Danville, these trends and factors are expected to
impact availability and costs for utilities, materials and supplies, contracted services and
personnel, at levels that could outpace forecast revenue growth and budgeted costs moving
forward.
Ten-year forecasts cover 2024/25 through 2033/34. Increasing Town-wide Lighting and
Landscape (LLAD) assessments for the first time since 2003 will significantly affect revenue
Mid-year Financial Report & Adjustments
To FY 2024-25 2 February 18, 2025
forecasts for 2025/26 and beyond. Additionally, re-payment of the loan from the former CDA
to the Town will be retired in 2026/27, reducing general fund revenue by $1.1 million. Absent
an increase in LLAD assessments or some other form of revenue increase, a significant
additional burden would fall to the general fund in order to continue to meet current service
levels. This is not operationally sustainable beyond 2026/27.
DISCUSSION
At mid-year, total revenues are positive to the budget forecast and total expenditures are
within budget. Overall fiscal condition remains strong, with the fiscal year expected to end
positive to budget forecasts.
As of December 31, 2024, revenues are tracking ahead of the approved budget forecast, while
overall expenditures are on track to finish the fiscal year within budget. The Town’s overall
fiscal condition remains strong, and the Town expects to finish the fiscal year on a positive
note.
OPERATING BUDGET
Revenues
Total revenues of $42.1 million were forecast for 2024/25, a 4.7% increase from 2023/24.
General Fund
General Fund revenues are tracking positively compared to budget.
Property Tax – The budget forecast is $17,900,000. Property tax is projected to account for 56.9%
of general fund revenues. Actual prior year revenues totaled $18,421,168 for 2022/23 and
$20,132,054 for 2023/24. Mid-year receipts indicate that revenue is expected to exceed the
budget forecast.
Sales Tax – The budget forecast is $6,565,000. Sales tax is projected to account for 20.9% of
general fund revenues. Sales tax revenue has declined steadily since the fourth quarter of 2022.
Actual prior year revenues totaled $7,321,501 in 2022/23, and $6,672,729 in 2023/24. Revenues
are expected to decline further from 2023/24. Mid-year receipts indicate that revenue is
expected to meet the budget forecast.
Property Transfer Tax – The budget forecast for 2024/25 is $458,780. Although local property
values have held steady, higher interest rates have continued to slow sales over the past two
years. Actual transfer tax revenues have declined from a high of $1,013,688 in 2021/22 to
$566,617 in 2023/24. Mid-year receipts indicate that revenue is expected to meet the budget
forecast.
Business License Tax – The budget forecast for 2024/25 is $350,000. Business license payments
are due by August 1. Mid-year receipts indicate that revenue is expected to meet the budget
forecast.
Mid-year Financial Report & Adjustments
To FY 2024-25 3 February 18, 2025
Franchise Fees – The budget forecast for 2024/25 is $2,387,000. Franchise fees for Cable, Solid
Waste and Gas and Electric are received at various times throughout the year (from monthly to
annually). Mid-year receipts indicate that revenue is expected to meet the budget forecast.
Interest Income – The budget forecast for 2024/25 is $500,000. At mid-year, the Town has
realized $473,724, 94.7% of the forecast. This is attributable to higher yields realized with the
Town’s invested funds and significantly exceeds mid-year income for most recent prior years.
Mid-year receipts indicate that revenue is expected to exceed the budget forecast.
Recreation Fees and Charges - The budget forecast for 2024/25 is $2,572,688. Recreation fees and
charges have experienced a gradual recovery from the pandemic. 2024/25 revenues were
forecast to increase by 3.5% from the prior year. Actual prior year revenues totaled $2,186,780
for 2022/23 and $2,500,772 for 2023/24. Mid-year receipts indicate that revenue is expected to
meet the budget forecast.
Donations – No donation revenue was budgeted for 2024/25. In December, the Town received
a $10,000 donation to purchase equipment for the Police Department. A mid-year adjustment
of $10,000 is recommended to recognize the receipt of the $10,000 in donations.
Special Purpose Revenue
Special Purpose revenues exceed the budget forecast at mid-year.
Building and Planning – The budget forecast for 2024/25 is $2,753,200. Actual prior year
revenues totaled $3,461,312 for 2022/23 and $3,559,487 for 2023/24. At mid-year, revenues
collected represent 51.0% of the budget forecast. Mid-year receipts indicate that revenue is
expected to meet the budget forecast.
Gas Tax - The budget forecast for 2024/25 is $1,895,879. Actual prior year revenues totaled
$2,117,295 for 2022/23 and $2,413,988 for 2023/24. Mid-year revenue represents 63.3% of the
budget forecast. Mid-year receipts indicate that revenue is expected to exceed the budget
forecast.
Measure J Return to Source (RTS) – The budget forecast for 2024/25 is $857,050. RTS revenue
comes from the countywide half cent sales tax for transportation and is largely received at the
end of the fiscal year. Actual prior year revenues totaled $1,071,645 for 2022/23 and $1,024,094
for 2023/24. Mid-year receipts indicate that revenue is expected to meet the budget forecast.
Solid Waste Diversion Incentive Fees – The budget forecast for 2024/25 is $925,376. Solid
Waste DIF is collected from the Town’s solid waste and recycling haulers to offset impacts of
collection vehicles upon Town streets. Solid Waste DIF were increased as part of the 2025 rate
setting process, meaning that actual revenues for the year will exceed the forecast. Actual prior
year revenues totaled $877,238 for 2022/23 and $911,401 for 2023/24. Mid-year receipts
indicate that revenue is expected to exceed the budget forecast.
Mid-year Financial Report & Adjustments
To FY 2024-25 4 February 18, 2025
Lighting and Landscape Assessment District – The budget forecast for 2024/25 is $3,129,750.
LLAD revenues come from assessments levied on property to partially fund the cost to
maintain Town parks, roadside landscaping and street lighting. 100% of assessment revenue
is devoted to these maintenance activities. With current rates unchanged since 2003, revenues
have been stagnant, losing ground to increasing service delivery costs and eliminating LLAD
funding for capital maintenance or projects. LLAD expenditures for 2024/25 total $5,518,916,
which requires a growing, unsustainable annual general fund subsidy. Actual prior year
revenues totaled $3,241,676 for 2022/23 and 3,308,462 for 2023/24. An assessment rate
increase will be presented to property owners for consideration in spring 2025. Mid-year
receipts indicate that revenue is expected to meet the budget forecast.
Successor Agency
Real Property Tax Trust Fund (RPTTF) revenue is budgeted at $2,272,850, inclusive of Town
re-payment under the Re-stated Cooperation Loan Agreement with the former CDA. RPTTF
revenues fund debt service payments for the 2001 and 2005 Certificates of Participation, the
2001 Taxable Revenue Bonds, and reimbursement of allowed administrative costs. Mid-year
receipts indicate that revenue is expected to meet the budget forecast.
Revenue Summary
Through December 31, 2024, the Town Council has approved one budget adjustment:
• Resolution No. 72-2024, authorizing receipt of $25,000 from the State of California for
administration of the SD7ADU Accelerator Program.
At mid-year, two additional budget adjustments are recommended:
• Police Department – Management - Increase by $10,000 to allow the donation received
for the Police Department to be expended.
• Development Services – Transportation - Increase program revenues by $20,000 to
recognize funds received from the Tri-Valley Transportation Council JPA to cover
administrative costs associated with staffing the JPA.
At mid-year, there are significant positive variances to the budget forecast for Property Tax and
Interest Income. As a result, total 2024/25 revenues are projected to exceed the budget forecast.
Due to the anticipated positive variance, no further mid-year revenue adjustments are
recommended.
Table 1 summarizes the adopted budget forecast, prior amendments and recommended mid-
year adjustments.
Mid-year Financial Report & Adjustments
To FY 2024-25 5 February 18, 2025
Table 1
Mid-Year Revenue Summary
Adopted Prior Mid-Year
Budget Amendments Revised
TOTAL $ 44,388,969 $ 44,313,969 $ 44,443,969
General Fund $ 31,488,308 $ 31,488,308 $ 31,448,308
Special Revenue $ 10,667,811 $ 10,692,811 $ 10,722,811
Successor Agency $ 2,272,850 $ 2,272,850 $ 2,272850
Expenditures
The 2024/25 operating budget includes total operating expenditures of $39.76 million, a 5.7%
increase from the 2023/24.
General Government – The budget for 2024/25 is $3,460,508. Costs are tracking within budget
and no mid-year adjustments are recommended.
Police Services – The budget for 2024/25 is $12,257,068. One mid-year amendment is necessary
to appropriate funds received through a private donation to purchase specialized equipment.
One mid-year adjustment is recommended to increase the Police Services Management budget
by $10,000. All other contract and direct costs are tracking within budget.
Administrative Services – The budget for 2024/25 is $5,245,189. Costs are tracking within
budget and no mid-year adjustments are recommended.
Development Services – The budget for 2024/25 is $5,181,053. In Transportation, an additional
$20,000 should be appropriated to support administrative efforts related to the TVTC JPA.
These funds are reimbursed by the TVTC JPA. One mid-year adjustment is recommended to
increase the Transportation budget by $20,000. All other contract and direct costs are tracking
within budget.
Maintenance Services – The budget for 2024/25 is $9,481,440. Costs are tracking within budget
and no mid-year adjustments are recommended.
Recreation, Arts and Community Services – The budget for 2024/25 is $4,135,208. Costs are
tracking within budget and no mid-year adjustments are recommended.
Successor Agency
For 2023/24, Successor Agency operating expenditures total $1,172,850 for debt service and
administrative costs. Re-payment of the outstanding balance owed under the former
CDA/Town loan funds capital transfers of $1,100,000. This amount is reduced to $659,401 in
2025/26 then eliminated in 2026/27. Successor Agency expenditures remain unchanged. No
mid-year adjustments are recommended.
Mid-year Financial Report & Adjustments
To FY 2024-25 6 February 18, 2025
Expenditure Summary
Through December 31, 2024 the Town Council has approved three budget adjustments totaling
$151,000.
• Resolution No. 53-2024, appropriating $25,000 from the Low and Moderate Housing
Fund for expenses related to 510 La Gonda Way.
• Resolution No. 69-2024, awarding $126,000 from funds previously designated to
support mental health initiatives to Discovery Counseling Center, to support a three-
year Comprehensive Group Therapy Program.
• Resolution No. 76-2024, appropriating $99,000 from contingency funds to award a
contract for conducting the Proposition 218 process associated with updating the
Danville Street Lighting and Landscape Assessment District No. 1983-1 rates.
Recommended Mid-Year Adjustments
The following mid-year adjustments are recommended:
• Police Services - Increase Management budget by $10,000 (Donation Fund);
• Development Services – Transportation – Increase Contracted Services budget by
$20,000 (Gas Tax and Measure J Fund)
Table 2 illustrates 2024/25 expenditures, including the adopted budget forecast, prior
amendments and recommended mid-year adjustments.
Table 2
Mid-Year Expenditure Summary
Adopted Prior Mid-Year
Budget Amendments Revised
TOTAL $ 40,933,316 $ 41,183,316 $ 41,213,316
General Fund $ 28,614,857 $ 28,839,857 $ 28,839,857
Special Revenue $ 11,145,609 $ 11,170,609 $ 11,200,609
Successor Agency $ 1,172,850 $ 1,172,850 $ 1,172,850
Transfers and Designations
The 2024/25 budget includes General Fund transfers of $4,231,004, for the following purposes:
• $1,450,000 for LLAD operations
• $800,000 for CIP - Pavement Management
• $50,000 for Asset Replacement
• $1,384,004 for CIP – General Purpose
• $27,000 for CIP - Civic Facilities
• $520,000 for CIP - Park Facilities
Mid-year Financial Report & Adjustments
To FY 2024-25 7 February 18, 2025
On November 19, 2024, the Town Council adopted Resolution No. 75-2024, approving the
2023/24 ACFR and transferring a total of $4,997,432 from the General Fund into the Capital
Improvement General Purpose Fund. This increased the total 2024/25 transfers and
designations to $9,228,436.
Mid-Year Budget Summary
The Town’s overall financial condition remains positive with overall revenues exceeding the
budget forecast and expenditures tracking closely with the approved 2024/25 Operating
Budget. Mid-year adjustments are recommended to increase expenditures by .7%.
CAPITAL IMPROVEMENT PROGRAM
The 2024/25 CIP included appropriations of $6,697,319 to fund 41 separate projects. Following
adoption of the CIP, the Town Council approved 4 transfers of funding between projects:
• Resolution No. 48-2024, transferring funding of $1,200,000 from Pavement
Management, CIP No. C-610 to San Ramon Valley Boulevard Improvements, CIP No.
C-600.
• Resolution No. 56-2024, transferring funding of $552,459 from Front Street Creek Bank
Stabilization, CIP No. C-593 to Town-wide Storm Drain System Management, CIP No.
A-330.
• Resolution No. 64-2024, re-allocating Coronavirus Local Fiscal Recovery Funds
awarded to the Town of Danville under the American Rescue Plan Act of 2021 for
specified Capital Improvement Projects.
• Resolution No. 66-2024, transferring funding of $379,500 from Town Green and Art
District, CIP No. B-628 to Arts District Maker Space (Studio), CIP No. B-269.
Recommended Mid-Year Adjustments
One mid-year adjustment is required to swap funds between two major roadway projects.
• C-600 – San Ramon Valley Blvd Improvements: Transfer $696,000 in Pavement Management
funds to C-601 – Camino Ramon Improvements.
• C-601 – Camino Ramon Improvements: Transfer $696,000 in Measure J Major Streets 24c
funds to C-600 – San Ramon Valley Boulevard.
This adjustment is necessary to coincide with actions taken by Contra Costa Transportation
Authority. No new or additional funding appropriations are required.
PUBLIC CONTACT
Posting of the meeting agenda serves as notice to the general public.
RECOMMENDATION
Mid-year Financial Report & Adjustments
To FY 2024-25 8 February 18, 2025
Adopt Resolution No. 12-2025, accepting the mid-year Financial Report, approving mid-year
adjustments to the Fiscal Year 2024/25 Operating Budget and Capital Improvement Program
Prepared by:
Joseph Calabrigo
Town Manager
Lani Ha
Finance Director/Treasurer
Attachment: Resolution No. 12-2025
RESOLUTION NO. 12-2025
ACCEPTING THE MID-YEAR FINANCIAL REPORT, APPROVING MID-YEAR
ADJUSTMENTS TO THE FISCAL YEAR 2024/25 OPERATING BUDGET
AND CAPITAL IMPROVEMENT PROGRAM WHEREAS, all revenue and expenditure projections, which were made in preparing the
Fiscal Year 2024/25 Operating Budget, have been reviewed; and
WHEREAS, the following mid-year adjustments to the Fiscal Year 2024/25 Operating
Budget are recommended to reflect increased expenditure needs:
Special (Restricted) Revenue – Revenues
• Police Department – Management - Increase Donations by $10,000 to recognize private
donation received.
• Development Services – Transportation - Increase Revenues by $20,000 to recognize
funds received from the Tri-Valley Transportation Council JPA to cover
administrative costs associated with staffing the JPA.
Special (Restricted) Revenue - Expenditures
• Donations – increase Police Services - Management by $10,000
• Revenues – increase Development Services – Transportation by $20,000 to cover
administrative costs associated with staffing the Tri-Valley Transportation Council
JPA.
Total Special Revenue expenditures increased from $10,667,811 to $10,697,811.
WHEREAS, the following mid-year adjustments to the Fiscal Year 2024/25 Capital
Improvement program are required to coincide with actions taken by the Contra Costa
Transportation Authority:
• C-600 – San Ramon Valley Blvd Improvements: Transfer $696,000 in Pavement
Management funds to C-601 – Camino Ramon Improvements.
• C-601 – Camino Ramon Improvements: Transfer $696,000 in Measure J Major Streets
24c funds to C-600 – San Ramon Valley Boulevard.
WHEREAS, sufficient funding is available in the Town’s funds; now, therefore, be it
RESOLVED, that the Danville Town Council hereby approves the mid-year adjustments
to the Fiscal Year 2024/25 Operating Budget.
APPROVED, by the Danville Town Council at a regular meeting held on February 18,
2025, by the following vote:
Docusign Envelope ID: 05D8167A-2125-485D-ADFC-0A59130971D8
PAGE 2 OF RESOLUTION NO. 12-2025
AYES:
NOES:
ABSTAINED:
ABSENT: _________________________________
MAYOR
APPROVED AS TO FORM: ATTEST:
________________________________ _________________________________
CITY ATTORNEY CITY CLERK
Docusign Envelope ID: 05D8167A-2125-485D-ADFC-0A59130971D8