PREFACE

The budget document is the City of Hesperia’s annual financial plan prepared by the City Manager and approved by the City Council. The financial plan serves as a policy document, operations guide for City Departments, and as a communication device. The audience of the budget document are the citizens, local businesses, debt holders and debt rating agencies, other governmental agencies, and the City’s independent auditor.

BUDGET DOCUMENT SECTIONS

The budget document sections and a brief summary of the section’s contents are as follows:

Financial Policies:

The Budget In Brief section includes summaries of the Total City Revenue and Expenditures, Capital Improvement Program (CIP), Debt Service, and Positions, Salaries, and Benefits.

B. Resource and Expenditure Summaries

This section indicates how resources and expenditures are reconciled to balance the City’s annual financial plan or budget for the City’s major operating funds. This section also presents summary level information on fund balances and reserves.

C. Revenue Summaries

This section contains Information about the City’s sources of income and is presented with summaries, graphics, and detailed revenue information by individual revenue accounts with $10,000 or greater revenue.

D. Expenditure Summaries

This section provides a variety of City-wide expenditure summaries and charts.

E. City Position Summaries

This section includes information and charts about City positions or staff, both full and part-time positions, as well as detailed discussion of the CalPERS pension plans.

F. Department and Program Expenditures

The City is organized into the following seven departments. This section provides information for each department and their programs regarding their expenditures and staffing to include Fiscal Year (FY) 2022-23 accomplishments and FY 2023-24 goals and objectives.

G. Capital Improvement Program (CIP)

This section presents in one section the capital improvement projects, which is adopted separately from the Fiscal Year (FY) 2023-24 Operating Budget.

H. Debt Service

This section summarizes information about the City’s external, and in some situations internal, debt obligations.

I. Fund Balance Summary

This section presents financial information about each City fund that is planned to have expenditures in FY 2023-24.

J. Supplemental Information:

BUDGET DOCUMENT FINANCIAL INFORMATION

As mandated by California State Law, the City's fiscal year, or budget time period, is July 1st through June 30th. For example, FY 2023-24 means July 1, 2023 through June 30, 2024. In most sections of the budget document, four years of information is provided, with two columns, or versions of information, reflected for the current year (FY 2022-23).

The columns typically presented are as follows:

2020-21 2021-22 2022-23 2022-23 2023-24

The financial information included in these columns is as follows:

Actual financial information for FY 2020-21 as reported in the City’s Annual Comprehensive Financial Report, with on occasion, budgetary basis adjustments.

Actual financial information for FY 2021-22 as reported in the City’s Annual Comprehensive Financial Report, with on occasion, budgetary basis adjustments.

The FY 2022-23 Budget as adopted by the City Council on June 7, 2022 for Operating expenditures and June 21, 2022 for Capital Improvement Program expenditures.

The 2022-23 Revised column reflects the 2022-23 Budget plus budget amendments approved by the City Council during the fiscal year. The 2022-23 Revised column is also adjusted to reflect estimates of what revenues and expenditures are estimated to be at the end of Fiscal Year 2022-23.

This column initially reflects the FY 2023-24 Adopted Budget submitted by the City Manager.

Major Expenditure Accounts

Major expenditure account categories are presented in the budget document, which summarizes various detailed expenditure accounts under the following seven major expenditure account categories:

SUMMARY BUDGET PROCESS DESCRIPTION AND SCHEDULE

On March 7, 2023, the FY 2022-23 Mid-Year Budget Review was presented with current expenditures, revenue trends, updated reserves, as well as amendments to the 2022-23 Budget which were approved by the City Council. This served as the planning phase for year-end estimates, as well as identifying the goals for FY 2023-24.

The FY 2023-24 Budget process then commenced as follows:

VI. OPERATING BUDGET CALENDAR

FY 2022-23 Revised Revenue and 2023-24 Proposed Budget Revenue Estimates to Departments for Review (07/01/2022 thru 02/29/2023) - March 22, 2023

FY 2022-23 Revised Expenditure Estimates, 2023-24 Current Level Proposed Budget Expenditures - March 29, 2023

*Note: Budget Review(s), Workshops, Adoption, and Public Hearings presented to the Council during the City Council Meetings.

On June 20, 2023, the City Council/Board Members/Commission Members adopted the FY 2023-24 Operating Budget for the City of Hesperia, Hesperia Housing Authority, Hesperia Fire Protection District, and Hesperia Water District. Included with the budget are the GANN Appropriations Limit for the City of Hesperia and Hesperia Fire Protection District. In addition, the City Council and Hesperia Water District adopted the FY 2023-24 Capital Improvement Program (CIP) Budget.

The City’s website provides a few accessible ways for public access to the budget and historical trends. One can utilize the web-based financial transparency portal tool, which provides a more inclusive and transparent budget that can be accessed by residents and staff around-the clock, providing a better understanding of the City’s revenues and expenses, from historical trends to current line item level details. This web-based platform can be accessed from the City’s webpage ; also the City’s current adopted Budget and Annual Comprehensive Financial Reports are readily accessible on the City of Hesperia’s website in the Financial Documents page .

LEVEL OF BUDGETARY CONTROL

Since the Budget is an estimate, from time to time it is necessary to make adjustments to fine-tune the line items within it. Various levels of budgetary control have been established to maintain the Budget’s integrity.

The levels of budgetary control are as follows: The City Manager and/or designee, has the authority to make budget transfers within a fund, within capital projects, and within a department’s operating budget. Such authority does not include any increase to an operating fund or to the overall adopted budget.

Budget transfers from one City fund to another are submitted to the City Council for formal approval. In addition, budget adjustments, which will increase an operating fund or the overall adopted budget, are submitted to City Council for approval. Additionally, a first quarter, mid-year, and final year-end budget review are submitted to the City Council, which contain any necessary budget amendment request, for review and approval. These controls are further identified in the Financial Policies, which are adopted by Resolution annually by the City Council.

BASIS OF ACCOUNTING

Expenditures are controlled at the fund level for all budgeted departments within the City. In addition, all funds reported in the Annual Comprehensive Financial Report (ACFR) are included and appropriated in the FY 2023-24 Budget. At the fund level, expenditures cannot legally exceed appropriations. The budgets are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP) as adapted by the Governmental Accounting Standards Board (GASB) and in accordance with standards established by the California Society of Municipal Finance Officers (CSMFO) and Government Finance Officers Association (GFOA), with adjustments made for depreciation, principal debt service payments, and capital outlay expenses for proprietary funds (i.e. the Hesperia Water District). These budgetary basis adjustments are always reconciled to the Annual Comprehensive Financial Report (ACFR) and notes are made in I. Fund Balance Summary section of the budget document where they occur.

The accounting policies of the City conform to generally accepted accounting principles. The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. Fund accounting segregates funds according to their purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions.

All governmental funds (i.e. General, Special Revenue, Capital Projects and Debt Service Funds) are accounted for on the modified accrual basis of accounting. Under this method, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when due. Expenditures are recorded in the accounting period when the liability is incurred.

Proprietary funds (i.e. the Hesperia Water District) are accounted for using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized when the liability is incurred.

MISSION STATEMENT

Hesperia is dedicated to enhancing our safe, friendly community, while blending a rural lifestyle with progress and responsible growth.

CITY COUNCIL PRIORITIES (GOALS)

To adhere to the City’s Mission Statement, the City Council has adopted the following goals.

Public Safety – Ensure adequate public safety resources are available for our citizens, families, children, businesses, and visitors.

Refer to the Police Department budget, as well as the Code Enforcement Program and the Animal Control Program budget for discussion of the Public Safety goal.

Financial Health – Hesperia will assure its financial health by continuing to provide structurally balanced budgets for its operating funds.

The City Manager Department and Management Services Department , particularly the Finance Division , budget discusses the Financial Health goal.

Future Development – Actively manage growth to ensure cohesive development including Industrial, Commercial, Residential, Freeway, Main Street and Ranchero Corridors.

The Economic Development Department focuses on business attraction component of this goal, while the Development Service Department, particularly the Community Development Division , focus on the development component of the goal.

Future Vision – Agree on a ‘vision’ of what Hesperia should be in 5, 15, and 25 years (revisit the ‘vision’ no sooner than once every 5 years).

Organizational Health – Establish and maintain a healthy and efficient organization to provide City services.

Capital Improvement – Create Capital Improvement Funding after Redevelopment’s elimination.

The Development Services Department as a whole, oversee capital improvement. Furthermore, refer to the Capital Improvement Program (CIP) section for a complete discussion of the planned projects.

Distinguished Budget Presentation Award

The Government Finance Officers Association (GFOA) of the United States and Canada presented a Distinguished Budget Presentation Award to the City of Hesperia, California for its Annual Budget for the Fiscal Year beginning July 1, 2022. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, operations guide, financial plan, and communications device. This award is valid for a period of one year only. We believe our current budget continues to conform to program requirements and will be submitted to GFOA to determine its eligibility for another award.