Meeting Date:                  April 7, 2021Agenda No.                      Item 4.1Agenda Item Title:           Fiscal Year 2021-22 Preliminary Proposed Budget 

Meeting Date: April 7, 2021
Agenda No.: Item 4.1
Agenda Item Title:

Fiscal Year 2021-22 Preliminary Proposed Budget

Environmental Determination: Not a project under CEQA
Staff Contacts: Mark Bramfitt and Cynthia Olson

Analysis

Background

Staff is seeking the Commission’s comments regarding the proposed Fiscal Year 2021-22 Budget prior to conducting communications with our funding agencies. Staff will then seek final approval of the budget by the Commission on June 2, 2021.

The Budget Committee has reviewed the proposed budget and provided guidance to staff in terms of a recommended strategy.

The proposed budget features:

  • A three percent increase in apportionments from our funding agencies.
  • Budgeting of 3.7 Full Time Equivalent (FTE) staffing levels across four allocated positions. Presently, these positions are filled at 2.7 FTEs, and staff does not foresee increasing the FTEs due to current workloads.
  • Use of $ 181,954 from the Fund Balance.  A Fund Balance of $ 527,317 is projected at the end of this fiscal year; the Fund Balance would decrease to approximately $ 345,363 at the end of FY 2021-22.
  • Maintenance of funding allocations for contracted services of $ 35,000 for the 2021-22 budget.

Budget Components

Commission expenditures consist of Salaries and Benefits and Services and Supplies, with the former category representing the largest portion of the budget.

Revenues consist primarily of apportionments from funding agencies: the County, cities, and independent special districts. Other revenues include interest from invested funds, and application fees, which are tracked during the year but not forecasted in the budget.

The Commission also maintains a Fund Balance, to be used at the Commission’s discretion.

Staff has been able to provide what we consider an accurate estimate of FY 2020-21 actuals through year end.

Staffing

The Commission has been operating with three employees and a staffing allocation of 2.7 Full Time Equivalents (FTEs). Prior to the recent retirement of the Deputy Executive Officer, the Commission was operating with four employees at a staffing allocation of 3.2 FTEs. Although the current staffing levels have been adequate to address current workflow, staff believes that the work flow may increase during FY 2021-22 and an increase in existing staff FTEs or additional staffing may be necessary.

The Organizational and Staffing Assessment Study conducted last year concluded that 3.7 FTEs spread over four positions would properly address workloads. The study relied on a workload analysis as well as on comparisons of other LAFCOs and similar agencies.

The proposed budget for Salaries and Benefits maintains the allocation for the position previously held by the Assistant Executive Officer (Administrative Analyst III) but at 0.7 FTE and adjusts the existing staffing FTE allocations to 3.0 FTE as recommended by the Assessment Study. 

The change from 3.2 FTE to 3.7 FTE increases the budget significantly; however, there are adequate funds in the fund balance that could be used to offset the increase on a short-term basis.

While the Commission currently has a healthy fund balance, using these funds to offset a portion of the budget is not a long term solution. If the vacant position is not filled during the FY 2021-22, the actual cost of the Salaries and Benefits would be approximately $150,000 less than budgeted and the use of the fund balance would be decreased accordingly. Should the Executive Officer determine that an additional analyst is necessary to perform the work of the Commission, there needs to be an increase to revenues over time of at least twenty percent to balance the budget.

Contracted Services

During FY 2020-21, the Commission authorized three reports using contracted consultant services: Municipal Service Reviews for the Timber Cove Water District and the Town of Windsor, and an Organizational and Staffing Assessment Study.

Staff is seeking Requests for Proposals from qualified consultants to conduct a Municipal Service Review of the City of Sonoma, but has no other plans for conducting studies using outside consultants.

Staff does believe that our use of legal counsel will increase somewhat in the next fiscal year, potentially augmented with the services of a California Environmental Quality Act consultant. Therefore, our proposed budget reflects an increase in funding allocations for those services.

Fund Balance

While we do not yet have firm amounts for end of FY 2020-21 actuals, staff believes that actual spending will come in somewhat below the budget, largely due to the effects of staffing allocations. (The reduction in costs associated with keeping the Deputy EO position vacant will be partially offset by an increase in the Commission Clerk staffing allocation and a payout for accrued vacation, sick leave and other compensated time for the retired Deputy EO).

Staff continues to advise that the Commission has a “healthy” fund balance, which can be allocated in any number of ways.

For example, the Commission has authorized the use of the Fund Balance to ameliorate an apportionment increase necessitated by an increase in office rent expense. The Commission has also considered the Fund Balance as a source of funding for contracted consultant support services.

Fiscal Year 2021-22 Preliminary Proposed Budget

The Budget Committee considered proposed FY 2021-22 budget scenarios with no increase in apportionments, a 3% increase, and a 5% increase. For all three scenarios a significant use of fund balance would be required, assuming that staffing is allocated at authorized levels.

The Committee recommended that the Commission consider the 3% apportionment increase scenario.  Under that scenario, $181,954 of the fund balance would be allocated to FY 2021-22 expenses.

Recommendation

Staff recommends that the Commission review the preliminary Fiscal Year 2021-22 budget as prepared by staff, direct any questions to staff, and make any desired changes. 

Attachments

1.               Fiscal Year 2021-22 Preliminary Proposed Budget Spreadsheet

 

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