Revenue Management The City is committed to maintaining a diversified and stable revenue base that can withstand economic fluctuations and support the long-term delivery of public services. In a dynamic and evolving economic environment, it is critical that future development is approached strategically—with a focus not only on growth, but on sustainable revenue generation that aligns with the City’s operational and infrastructure needs. To ensure accuracy and accountability in forecasting, the annual revenue budget is developed using a multi-faceted analysis process, drawing on a wide range of data sources and analytical tools. These include: • Historical revenue trends to identify long-term patterns and seasonality. • Current-year actuals compared against prior-year baselines for real-time insights. • Economic indicators, such as inflation, interest rates, labor market data, and consumer spending, which influence key revenues like sales and transient occupancy taxes. • Development forecasts, including building permits, housing pipeline data, and anticipated commercial growth. • Input from departments on program-specific revenues such as user fees, licenses, and charges for service. • Third-party data platforms (e.g., HdL for sales and property tax analysis) to provide detailed breakdowns, trends, and comparative benchmarking against peer cities. • Real-time dashboards and financial reporting tools to continuously monitor revenues and flag variances early. This data-driven approach ensures that revenue projections are not only grounded in historical evidence, but also responsive to real-time conditions and future trends. It allows City leadership to make informed decisions that balance caution with opportunity—preserving fiscal health while positioning the City for growth. Expenditure Management The City of Tustin is committed to maintaining a responsible level of expenditures that ensures the ongoing well-being and safety of the community. Expenditure decisions are derived from a framework of Council priorities, fiscal discipline, and data- informed analysis, with an emphasis on aligning operational spending with long-term sustainability. To manage expenses effectively, the City leverages a variety of tools and internal controls: Budget Allocation & Staffing Controls • Expenditures are budgeted based on the Council-approved Position Control List, ensuring that labor costs—including salaries, benefits, and any contractually obligated increases—are accurately assigned to the appropriate fund, department, and division. • Personnel budgeting software supports precision in forecasting full-time equivalent (FTE) costs and analyzing vacancy savings. • Overtime usage is closely managed. It must be pre-authorized by a department head or designee, unless inherently pre-approved due to operational requirements. Departments are expected to explore alternative staffing strategies before relying on overtime. Year-End Spending & Appropriations • Unspent budgeted expenditures are not automatically carried over into the next fiscal year. If an expenditure has not been incurred by year-end but the purpose remains valid, it may be reauthorized through the continuing appropriations process, subject to Council approval. • This same process applies to multi-year CIP projects that are in progress. These projects are carried forward using the prior year’s funding authority, ensuring financial continuity for construction and infrastructure investments.
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