Item Coversheet
Item #1.

Staff Report: 062-22

TO:

Mayor and City Council




FROM:

Eric Holmes, City Manager




DATE:

5/9/2022








SUBJECT


2022 First Supplemental Budget
Key Points
  • Budget adjustments are made each year to reflect changes in revenues and expenditures that occur after the biennial budget is adopted.
  • This supplemental budget is mostly administrative in nature. It includes a total increase in the City’s 2021-22 appropriation of $138.4 million.

Strategic Plan Alignment
The action is reflective of all Strategic Plan Goals.
Present Situation

The recommended expenditure appropriation increases for the City’s Operating and Capital funds included in the 2022 First Supplemental Budget totals $138.4 million. An increase of $45.9 million relates to recommended changes in the Operating budget, with the remaining appropriation increase of $92.5 million representing changes in capital projects and supporting funding transfers. The Supplemental will result in utilizing $14.3 million in City resources; of that amount, the General Fund’s share is $3.0 million.

 

Changes in the operating budget could be distilled to administrative in nature, grant funded and very minimal new initiatives. A significant amount of the operating budget appropriation change relates to a variety of normal administrative changes across all funds. The administrative changes include an update of the salaries budget for the cost of living adjustment for all labor and non-union groups effective in 2022, annual true-up of the self-insurance charges for the liability, workers’ compensation and property insurance costs and claims, annual true up to the indirect cost service plan, budget adjustments for the changing cost of fuel and faster than anticipated vehicle replacements across all affected City departments, including General, Street and Fire funds.

 

Appropriation increases for the operating budget changes in the General, Street and Fire funds total $15.7 million. The majority of the increase relates to the administrative changes outlined above. The budget also includes grant funded appropriation increase due to a number of new grants in public safety, funding for City services related to the Interstate Bridge and appropriation of a small amount of ARPA grant funding, mostly for the outreach and initial design of the future projects. The single new largest item is budget to fund three Safe Stay villages, two have already opened, and two Safe Park locations, of which one is a new location to be determined later in the year. The Safe Stay villages are funded by a combination of the Affordable Housing property tax and the Affordable Housing sales tax dollars. Additional appropriation is being added to increase the Diversity and Inclusion efforts internally and externally.

 

The remaining appropriation increase relates to changes in other operating City funds. Major changes are summarized below:

  •  True up of the CDBG-CV 3 and CHIP grant awards for 2022 fiscal year of $1.0 million;
  • Affordable Housing Property Tax and the Affordable Housing Sales Tax appropriation increases to fund the new Safe Stay Villages, $2.9 million;
  • ARPA funding reimbursement for services provided out of the General Fund;
  • True up of the Tennis Center appropriation of $2.0 million to reflect the most recent operating expenses and revenues of the Center. The Center is currently managed by the US Tennis Association, but the financial information must be reported in City financials;
  • Risk Fund budget adjustment of $2.4 million to reflect the current cost of insurance and claims;
  • Updated appropriation of $1.8 million due to an updated vehicle replacement schedule to account for higher use vehicles than originally anticipated and longer lead times in vehicle delivery;
  • Updated appropriation by $7.1 million in the School Impact Fee fund to reflect the most current projection of fees collected in the fund to be transferred to the School Districts.

 

The total net Capital Budget appropriation of $92.5 million (including internal transfers) is included in the First Supplemental of 2022. Expenditures by project are outlined in Attachment C to the ordinance. Following are some of the changes to projects included in the Supplemental:

  • Parks capital projects totaling $3.0 million for:
    • Esther Short Park restroom re-build and new playground
    • Oakbrook Park
    • Vancouver Innovation Center (VIC) Park
    • Harpers Playground at Marshall Community Center
  • General Capital/Asset Management projects totaling $21.8 million for:
    • Operation Center redevelopment
    • Fourth Plain Commons construction
    • Heights Phase 1
  • Water, Wastewater and Streets/Transportation totaling $21.1 million for:
    • Main Street reconstruction
    • NW 32nd Commercial Corridor Right of Way (ROW)
    • Heights Roads, Right of Way (ROW) and infrastructure design
    • Devine Street pedestrian improvements

 

  • Capital Funding Transfers Supporting the City’s Capital projects Budget totaling $46.5M

 

Attachment B of the ordinance outlines changes to FTEs, with an overall new increase of 26.5 FTEs recommended in the 2022 First Supplemental. Major changes from the Attachment B are listed below:

  • Major position changes are outlined below:
    • Reclassification and reorganization of existing 7.0 FTE Police Service Technicians (PST) to:
      • One Police Officer, one Business Intelligence Analyst, one Records Specialist and one Strategic Communications Manager to remain in VPD.
      • Two positions in Information Technology and one in Human Resources to better support Police IT and HR needs.
    • Additional capacity in the newly created General Services Department:
      • Add 1.0 FTE Support Specialist II and 1.0 FTE Financial Analyst B;
      • Add 2.0 FTE Capital Project Managers to support capital building-related projects.
    • Additional capacity in the Economic Prosperity and Housing Department;
      • Reclassify two existing positions to better reflect the work needs of the department;
      • Add 0.5 FTE Support Specialist III and move 1.0 FTE added to help manage the Heights implementation from Facilities Department.
    • Public Works Construction Services increase in personnel in response to increasing capital programs;
      • Add 2.0 FTE Senior Construction Inspectors, 1.0 Survey Specialist and 1.0 Civil Engineer.
  • Positions to support grant and revenue-funded work:
    • Add 2.0 Limited-Term FTEs to conduct extensive outreach to residents and businesses in the Fourth Plain corridor and Businesses on Main Street. Positions are to be supported by American Rescue Plan Act (ARPA) funding;
  • Other FTE changes to support the organization:
    • Add 3.0 Limited-Term through end of 2022 Fire Support Staff in anticipation of Proposition 2;
    • Add 2.0 FTE Building Inspector III’s in Building Fund to support increased business activity;
    • Add 1.0 FTE Senior Park Developer for managing capital Parks and Trails;
    • Add 1.0 FTE Diversity, Equity, and Inclusion Program Coordinator and 1.0 FTE Homelessness Program Coordinator in City Manager’s Office;
    • Add 8.0 FTE Overhire, unfunded positions, to be utilized on a short term basis with authorization by the City Manager or their designee;
    • Add 1.0 FTE HR Assistant in Human Resources to support the HR Benefits team.

Advantage(s)
  1. The proposed budget adjustments will ensure that the City remains in compliance with state statutes that require all City expenditures to have an appropriation approved by ordinance.
  2. Appropriations are provided for important City programs, services, and capital projects.

Disadvantage(s)

Proposed supplemental recommends spending a net amount of $14.3 million of existing City resources across all funds.


Budget Impact
Approval of the attached ordinance will increase total City budget by $138.5 million across all funds.
Prior Council Review
Workshop presentation at the May 2, 2022 City Council meeting.  At this workshop, council asked for additional information on the conversion of vacant police service technician FTE's in police to support department priorities as well as an update on fleet changes and their relationship to climate action goals. This information will be provided under separate cover.
Action Requested

On Monday May 9, 2022, approve the ordinance on first reading, setting the date of second reading and public hearing for Monday May 16, 2022.

 

Natasha Ramras, Chief Financial Officer, 360-487-8484

 


ATTACHMENTS:
Description
Ordinance
Attachment A
Attachment B
Attachment C
Attachment D