The Government Finance Officers Association of the United States and Canada (GFOA)presented an award of Distinguished Presentation to the City of Ontario for its annual budget for the fiscal year beginning July 1, 2001
In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device.
The award is valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award.
City Manager's Transmittal Letter
June 25, 2002
TO THE HONORABLE MAYOR AND CITY COUNCIL
It is my pleasure to present to you the Adopted Operating Budget for the City of Ontario, the Ontario Redevelopment Agency, and the Ontario Housing Authority for Fiscal Year 2002-03. The Operating Budget document is comprised of three volumes: Operating Budget Summary, Operating Budget Detail, and Capital Improvement Program.The Operating Budget Summary highlights the activities and programs budgets for the upcoming year. The Operating Budget Detail provides detailed information at the budget "expense" level to assist the City Council in making well-informed decisions regarding the allocation of City resources.The Capital Improvement Program is the City's comprehensive capital spending plan for the forthcoming years.
The State budget deficit looms as a formidable backdrop against which the City's budget was prepared, and will set the tone for City budgets for the foreseeable future. The proposed City budget for Fiscal Year 2002-03 is fiscally balanced, does not commit to spending more than a conservative estimate of total revenues, and takes into account the impact of the Governor's proposed reductions to local governments.City services are maintained at existing levels with modest service expansions. Sound fiscal management and prudent business practices have contributed to the City's ability to fair well during the national and State economic downturns that began in March 2001.As the national and the State economies continue their slow recoveries, the City of Ontario is moving forward with a number of community projects made possible by the Mayor and Council's prior investments in the City's economy.These projects include the renovation of the City's Main Library; expansion of the De Anza Teen Center; the development of a 45 acre Soccer Sports Field Complex; the design, construction and occupation of the new Police Headquarters facility (Phase I); and the dedication and opening of an expanded Senior Center in the downtown area.During these uncertain economic times, significant caution is recommended. While the City presently has a strong financial position with revenues projected to grow slightly over the next year, it is possible that the State may propose additional shifts in revenues and costs to balance the State budget, altering City projections very quickly. For this reason, it is essential to understand the key assumptions in the budget as well as those issues which are beyond the control of the City which could fundamentally alter both the City's short- and long-term financial position.
The recent economic downturn has had a significant impact upon the State of California's finances and, in turn, on the City of Ontario. While California's long-term prospects look strong, the State's short-term fiscal problems are very serious. The Governor's Office has proposed to the Legislature an operating budget shortfall of over $24 billion gap representing more than one-fourth of the entire State budget. According to the Governor's Office, much of the shortfall is attributed to a combination of a national economic recession, the sluggish stock market and resulting fall-off in capital gains, the economic aftershocks of the September 11 terrorist attacks, and the collapse of the dot.com's economy in California. The Governor's proposed State budget is balance through a variety of spending reductions, tax increases, fund transfers, and additional borrowing. If adopted, these components will have a significant impact on local government finances.The State's expenditure reductions taken during Fiscal Year 2001-02 have already resulted in the City of Ontario losing over $1.2 million in State grant funding that was directed at community facility projects. Other potential State impacts to Ontario include the loss of police booking fee reimbursements ($430,000); public library foundation funds ($100,000); reimbursements related to State-mandated programs under SB90 ($75,000); and a potential ERAF shift estimated to exceed $1 million. The City's Proposed 2002-03 Operating Budget includes commensurate reductions in revenue and cautious expenditure estimates for these potential actions.
In the First Quarter 2001-02 Budget Report, the City took action to defer $4.2 million in expenditures and established a $1.0 million budget deferral reserve in response to preliminary State budget projections and the effects of the September 11 attacks. The proposed Fiscal Year 2002-03 Operating Budget reinstates only a small portion of these budget deferrals. Reinstated items include five previously "frozen" positions, the funding of historic rock curb replacement, and the rehabilitation of dormitory quarters at Fire Station No. 3.
Foundation for the Budget
The City of Ontario's Mission Statement and the City Council's goals and objectives are implemented through the Proposed Operating Budget for Fiscal Year 2002-03. The Operating Budget reflects an emphasis on continuing to build a strong community and improving the quality of life for Ontario residents, businesses, and visitors.
City Council's Mission Statement
Founded as a model colony, based on innovation,planned development, community services and family values, the City of Ontario has become the economic heart of the region. The City Council is committed to maintaining Ontario's leadership role in the Inland Empire, by continuing to invest in the growth and evolution of the area's economy while providing a balance of jobs, housing, and educational and recreational opportunities for our residents in a safe, well-maintained community.
Adopted January 20, 1998
The mission statement is the foundation for the City's strategic plan, which guides the City's use of resources.The City's strategic plan for budget allocations is based upon the City Council's goals:
· Invest in the Growth and Evolution of the City's Economy
· Operate in a Businesslike Manner
· Increase Involvement in Inter-Governmental Affairs
· Focus Resources in Ontario's Commercial and Residential Neighborhoods
· Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
· Maintain the Current High Level of Public Safety
· Provide Enhanced Recreational, Educational and Cultural Activities
The Adopted Operating Budget for Fiscal Year 2002-03 is $261,507,531 for the City of Ontario (this amount includes $101,782,652 in the General Fund and $159,724,879 in the other fund types such as Special Revenue, Capital Project, Enterprise Operations, and Internal Service). The Adopted Operating Budget for Fiscal Year 2002-03 is $55,645,969 for the Ontario Redevelopment Agency and $7,748,444 for the Ontario Housing Authority. The total overall budget is $324,901,944.
The Adopted Operating Budget includes 1,008 full-time employees, which represents a net decrease of 10 positions when compared to the current authorized staffing level, while maintaining current service levels.Many of the changes in positions are non-General Fund, supported by enterprise revenues, or are funded through General Fund revenues derived from development-related fees. Major staffing changes include the addition of three positions in the Development Agency to provide services related to the anticipated development of the New Model Colony; one Housing Manager position to oversee a new Section 8 Housing Program; and the reclassification of three Utilities Department positions to support water and sewer activities. To address the operational needs of the Fire, Economic Development, Human Resources, and Public Works Departments, the proposed budget includes the restructuring and/or elimination of some vacant position classifications. The annual cost of the proposed staffing changes is $252,000, of which $217,000 is attributed to the General Fund. The changes to personnel positions are designed to enhance the level of service provided to Ontario's residents and businesses. In addition to these changes, the Operating Budget allocates $31,000 for training and staff development to promote responsive customer friendly service.
The General Fund Expenditure Budget of $101,782,652 is approximately $4,327,935 higher than the Adopted Budget for Fiscal Year 2001-02. This increase is primarily attributed to a rise in labor contracts ($2,000,000) and the debt service payments ($2,000,000) associated with the lease revenue bonds issued as part of the financing plan for the renovation of the City's Main Library, expansion of the De Anza Teen Center, development of a 45 acre Soccer Sports Field Complex, and the design, construction and occupation of the new Police Headquarters facility (Phase I).Also included in the General Fund is the funding of reserves (approximately $2.1 million) for retiree medical expenses (reducing the City's deficit in this program from an initial amount of $32 million to approximately $24 million) and a second annual contribution to reserves for replacement of public safety equipment ($1.0 million).
The Adopted Operating Budget includes a total of $36,451,173 in Operating Transfers-in, Transfers-out and changes in fund designations (across all funds) in the City. The net impact of these transfers to the General Fund is $4,878,323. With these transfers, the General Fund remains fiscally balanced.
The total budget of $65,494,281 is $11,951,229 higher than Adopted Budget for Fiscal Year 2001-02. The Enterprise Funds include operating and capital funds for water, sewer, and solid waste. The overall increase in the Enterprise Funds is primarily attributed to acquisition and construction of additional water reservoir and well sites, the construction of facility improvements such as a recycling and hazardous waste collection center and projects such as sewer replacements on Spruce Street from Cypress Avenue to Euclid Avenue.
Internal Service Funds
The total budget of $22,486,695 is $6,205,029 greater than the Adopted Budget for Fiscal Year 2001-02. The Internal Service Funds include the Equipment Services Fund, Information Technology Fund, and Self-Insurance Fund. The increase in the Internal Service Funds is primarily attributed to the planned replacement of two fire engines and higher material costs in the Equipment Services Fund, and Informational Technology projects that include the development and implementation of a new Fire Records Management System, a Work Order Management System for the public services departments, public safety Computer Aided Dispatch/Records Management System, and an upgrade of the City's human resources/payroll and time and labor systems.
Special Revenue Funds
The total budget of $32,797,916 is $3,107,805 higher than the Adopted Budget for Fiscal Year 2001-02. Special Revenue Funds include restricted funds such as Part 150, CDBG, Gas Tax, Measure I, Park Development, State Grants, Facility Maintenance, Asset Seizure, and Storm Drain Maintenance. This increase is primarily attributed to higher expenditure budgets in the Gas Tax Fund, Measure I Fund, Park Development Fund, and Storm Drain Maintenance Fund. These expenditure budgets are funded from either increased revenues and/or use of residual fund balances. The Gas Tax and Measure I Funds have residual fund balances due to budget savings from prior years, and combined with current year proposed revenues will be used to fund street improvement projects throughout the City. These projects are needed to achieve the City's minimum annual target in the street pavement management program.
Capital Project Funds
The Capital Project Funds account for capital expenditures that are primarily funded from the General Fund and/or other one-time monies. Due to restricted revenue sources, other capital expenditures are accounted for in the Special Revenue Funds, Enterprise Funds or Internal Service Funds. The total budget of $38,945,987 is $11,222,308 higher than the Adopted Budget for Fiscal Year 2001-02. The increase in the Capital Project Funds is mostly attributed to the City Council's aggressive campaign of investing in community facilities such as the Senior Center, De Anza Teen Center, the Soccer Sports Field Complex, and expansion of the City's Main Library. Additional capital projects include the adaptive reuse of the former Fedco building for the new Police Headquarters, continued progress on the Grove Avenue Grade Separation project (Phase 8).