Dinuba accounts for revenue decrease in ’24-25 budget

The Dinuba City Council discusses a consent calendar item at the regular meeting in Dinuba Feb. 13, 2024.(Serena Bettis)

Dinuba City Council kicks off budgeting process with workshop focused on the general fund, tax revenue

DINUBA – The city of Dinuba is getting a head start on its budgeting process this year with workshops that take on bite-sized portions of the proposed budget, making it easier to understand how all of the pieces of a multi-million dollar city budget fit together.

The first workshop, held by the Dinuba City Council on April 23, focused solely on the city’s general fund, which is the main bank account used to collect money earned from regular taxes and fees and pay for most city services. Dinuba’s general fund supports the city’s core departments, including parks and community services, planning and development, police, fire and administration.

Additional budget workshops will take place throughout May; the council must approve the budget for fiscal year 2024-25 — which begins on July 1 — by the end of June. The budget process often takes up a lot of time, and Mayor Maribel Reynosa thanked Administrative Services Director Karina Solis for bringing the item forward earlier than last year.

“Last year, I felt like we were under the gun, so I really appreciate the effort that you and your staff have taken to make it happen,” Reynosa said.

Reduced revenue

Solis began the workshop with an overview of what the city’s general fund balance is expected to be at the end of the current fiscal year. Due to unexpected expenses over the last year and a drop in sales tax revenue, the remaining fund balance will be less than what was originally budgeted.

When the 2023-24 budget was adopted, the city had anticipated it would generate just under $21.9 million in revenue, and it planned for $17.4 million in expenses, leaving a general fund balance of approximately $4.4 million. Now, the city estimates it will have generated $19.2 million in revenue and spent $18.1 million, leaving a remaining balance of nearly $1.1 million.

One of the biggest things that caused the drop in revenue was the California Department of Tax and Fee Administration’s (CDTFA) decision that it would change the allocation of online sales tax that Dinuba receives from fulfillment centers in its city limits, which has brought in millions of dollars for the city in the past.

The city prepared itself for this last year when budgeting its expenses, so current services provided by the city will not be impacted, but it did not know when the CDTFA would make its decision, so the revenue estimates made during the budgeting process last year were not reduced.

“The ‘23-24 budget was adopted with a reduction in expenses primarily attributed to not backfilling vacancies and reductions across the board to prepare for the CDTFA determination,” Solis said. “As you’ll remember last year when I presented the budget, we wanted to be very conservative and make sure that we weren’t overspending; however, projected year-end is anticipating (expense) increases.”

Proposed budget remains steady

Looking ahead to 2024-25, the city is expecting to bring in about $18.4 million in general fund revenues and spend about $18.1 million, leaving just $273,634 remaining in the general fund. Solis said that the decrease between this year’s estimated year-end revenue of $19.2 million and next year’s estimate of $18.4 million is due to anticipated decreases in collected fees as a result of decreased residential and commercial development around Dinuba, as well as a decrease in anticipated investment earnings.

Budgeted expenses over the last few years have remained steady at around $18 million, and Solis said that a majority of the city’s funds are going to public safety. Forty percent of the general fund — $7.2 million — will go toward the police department and 13% — $2.3 million — will go toward the fire department.

The parks and community services department will receive just under $3 million, planning and development will receive about $1.8 million, administrative services will receive $1.1 million and administration, which includes the city council, city attorney and city manager, will receive just under $637,500.

$2.1 million is also allocated to general services, which Solis said is a catch-all category for services that support the city government across all departments, such as contract services, city vehicle maintenance and office supplies.

The estimated general fund budget is still preliminary at this point in the process, and city council members did not provide much comment on the information provided. More discussion will take place later on in the budget process as it is put together.

Budget workshops are open to members of the public to comment, and once the final draft of the proposed budget is presented to the city council, there will be a public comment period for residents to weigh in on the budget and the city’s priorities for the upcoming fiscal year

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