This administrative report and three items before the City Council are related to the adoption of the Fiscal Year 2020-21 City of Bakersfield operating and capital improvement budgets.
The first item is a resolution adopting the FY 2020-21 budget, totaling $630,298,000. The budget is comprised of the operating budget, including transfers, totaling $543,163,996 and the capital improvement budget totaling $87,134,004. The proposed budget reflect the funding of the City’s operating cost, including $69,620,000 in Bakersfield Public Safety and Vital Services (PSVS) Measure appropriations and the funding of various capital improvements, including street and road resurfacing, park and recreation facilities, and improvements to other City-owned facilities for the 2020-21 fiscal year.
Due to the nature and timing of the COVID-19 pandemic, City staff worked to readjust the budget based on the new fiscal reality within a very short time period. This budget reflects significant adjustments to major revenue sources in anticipation of reduced economic activity in the next fiscal year. This budget anticipates reductions in sales and use taxes, transient occupancy taxes, gas tax and development related activity.
The City released its Proposed Budget for FY 2020-21 on May 27, 2020. On May 27th and June 8th, staff presented department and division proposed budgets to the City Council. A noticed public hearing for the FY 2020-21 budget was held on June 10, 2020. There were three public speakers that made comments during the hearing.
As proposed, the budget includes the addition of 97 full time positions throughout the operations, including the addition of 29 sworn police positions and 13 sworn fire positions in direct response to the City Council priorities of enhancing public safety services. Additional positions included in the budget provide for the expansion of the successful rapid response teams in the Code Enforcement Division and the Recreation and Parks Department. The budget also includes four positions to establish a new Economic and Community Development Department. No new positions are proposed within the general fund. All new positions are either funded in response to addressing community priorities via PSVS or through enterprise or special funding sources. Also included within this budget is the establishment of three new departments: Economic and Community Development, Human Resources and Technology Services.
The budget also includes over $16.7 million in budget contingencies, with $9.5 million of PSVS funding directed to reserves and contingencies, along with $7.2 million in contingent PSVS capital projects. These projects will only move forward if revenues are meeting projections during the mid-year budget review.
Due to the fiscal uncertainties over the next several months, staff will provide budget updates to the City Council on a more frequent basis than in past years. Additional changes and updates to the budget will likely be necessary as the fiscal year progresses.
Appropriations Limit
The appropriations limitation imposed by Propositions 4 (1979) and later amended by Proposition 111 (1990) creates a restriction on the amount of government revenue which may be appropriated in any fiscal year. The appropriations limit applies only to those revenues defined as “proceeds of taxes,” such as property tax, sales tax and transient occupancy tax. The appropriations limit is based on actual appropriations during the base year (1986-87), and increases each year using specified growth factors. According to the Revenue and Taxation Code, Section 7910, local governments must establish its appropriations limit by resolution each year at a regularly scheduled meeting or a noticed special meeting. During any fiscal year, a government entity may not appropriate any proceeds of taxes received in excess of the appropriations limit.
The appropriations limit is different for each agency and the limit changes each year. For calculations purposes, the appropriations limit from the previous fiscal year is increased based on population growth and inflation factors as provided by the State Department of Finance.
A resolution adopting the Fiscal Year 2020-21 appropriations limit of $453,175,722 is included as part of the budget adoption process for Council consideration. The City’s appropriations which are subject to the limit total are $238,387,000. Therefore, the proposed appropriations are significantly below the maximum limit allowed by State law.
Publicly Available Pay Schedule
Recently, CalPERS provided notice to all member agencies of the requirement to have a publicly available pay schedule. The City has historically made this information available within its adopted budget document and on the City's web site. However, CalPERS now requires the governing body of public agencies to approve and adopt this schedule at a regularly scheduled public meeting. Therefore, the approval of this item is necessary to comply with CalPERS regulations. The attached schedule reflects the most current pay schedule for all positions, inclusive of any rate adjustments as a result of previously approved labor agreements.