SR-CC/HA/PA/RA-1
(C/HA/P~A-'
JAN 1 3 1998
CM SM ckl f \cmanager\budget~an1398 wpd Santa Monica, California
CouncIl meeting January 13, 1998
TO Mayor and City Council
Chairperson and Housing Authonty Members
Chairperson and ParkIng Authonty Members
Chairperson and Redevelopment Agency Members
FROM City Staff
SUBJECT Recommendation to Receive PubliC Comment and Hold DIScussion on
Budget Pnontles for FY 1998/99 Including Community Development Block
Grant (CDBG) & Home Investment Partnership Act (HOME) Programs
INTRODUCTION
ThiS report presents the context In whIch the Clty"S Fiscal Year (FY) 1998/99 operating and
capital budget Will be formulated and recommends that the City CouncIl. Housing Authonty.
Parking Authonty and Redevelopment Agency receive public comment and hold diSCUSSion
on budget pnontles Including Community Development Block Grant (CDBG) and Home
Investment Partnership Act (HOME) programs For readers who are unfamiliar With the
structure of the City'S budget. background InformatlOn on the current (FY 1997/98) budget
IS Included as an attachment to thiS report
BACKGROUND
From February to May of 1998. City staff Will formulate proposed operating and capital
budgets for the fiscal year begInning July 1, 1998 The proposed budgets Will be
presented to the Councli and community In a senes of study seSSions, culminating In a
public hearing and budget adoption at the end of June.
1
C. Yt4A/PA/p-A -I
JAN , 3 1998
-
In order to encourage public Involvement In the budget process and to reflect the Interests
and concerns of the communIty In the proposed budget. a budget suggestion form has
been placed on the City's webslte and notice has been given In advertisements.
newspaper articles and on CltyTV that a public heanng on budget pnontles will be held on
January 13, 1997
FISCAL CONTEXT
Santa MOnica's economiC growth has outpaced the region, state and nation In recent
years and the CIty's fiscal policIes have been prudent As a result. the CIty enters the frve-
year projectIOn penod commencmg with FY 1998/99 In strong financial condition Ongoing
revenues and expenditures are projected to be generally In balance over the penod The
projected expenditures Include annual debt service for the public safety facIlity and
substantial capital Investment In maintaining and enhancing the City's assets Because
condItions and actions at the Federal. State and regional levels can affect the City's
financial position there are, however, some cautionary notes to sound
. The Federal balanced budget agreement back-loads substantial cuts In federal spending
In FY 01/02 which Will adversely affect federally funded City programs
. The proposed federal "Internet Tax Freedom Act", If enacted, would preempt local
taxation of Internet economic transactions for a five year period and the City could lose
traditional sources of revenue as bUSiness shifts to thiS growing medIum
. The State's budget structural Imbalance has not been corrected Funding for schools
and cnmlnal Justice/corrections Will continue to squeeze other Initiatives
. The City's utility users tax base Will be reduced by deregulation of the electncallndustry
which kIcks off thiS month with a 10% rate reduction Further reductions are scheduled In
2001
. The effects of Proposition 218 on the ability to raise revenues and the looming potential
of ballot Initiatives to further reduce local governmenfs fleXibility make long range fiscal
planning more difficult
2
. The magnitude of County welfare rolls and the resulting effects of welfare reform are
likely to place additional stress on social serVices, Including homeless services
. A slowing of economic growth IS anticipated nationwide dUring the five-year projection
penod. with potential for a recession In the final years
In summary. the City's economic base and anticipated revenues will support some
Increase In ongoing expenditures as well as one-time Investments In keeping with
longstanding Council policy It would be Wise. however, to ensure that ongoing service
Increases are sustainable In a less exuberant economy
MAJOR INITIATIVES
With Input and support from the Council and community, Interdepartmental. multi-year
work efforts are underway In broadly themed areas In addition to ongoing proJects,
potential new projects IdentIfIed over the past year through Input from the community are
noted They may be among those proposed for consideration as Council weighs priorities
for use of FY 1998/99 resources
Youth and Families
ReopenIng of Miles Playhouse. construction of the new municipal pool. Installation of new
play equipment at five parks and design of new plaYing field space are among the capital
projects benefiting youth already scheduled to be underway In 1998/99 Planning With the
school dlstnct and school parent groups for school parks as envIsioned In the Recreation
and Parks Master Plan Will commence Aspects of the LIbrary's recently completed
strategic plan for Youth Services Will be underway The Wide range of after school and
weekend youth activities offered by the City WIll continue to be refined
Community Interest has been expressed In revIsiting the 1 Q-Year Youth Action Plan
adopted In 1989 and the Child Care Master Plan adopted In 1991 to assess progress and
set new agendas SignIficant community Interest has been expressed In Increasing youth
.,
j
access to technology and homework assIstance City em ployees have expressed Interest
In having a staff work/family needs assessment conducted
Environment
The probable Initiation of sustainable bUilding gUidelines Will Involve staff of the
Environmental and Public Works Management and Planning and Community Development
departments It IS possible that MTBE remediation to restore City water wells Will be
underway The water mfrastructure reliability study funded by the Army Corps of
engineers should be underway
In addition. phased ImplementatIon of an energy management plan for the City may be
timely given deregulation of the electncallndustry and expressed goals of the Sustainable
City program Full Integration of Sustainable City goals mto City operations remains to be
accom pllshed Neighborhood watch and other organized groups may be offered training
In sound household environmental practices to extend Sustainable City pnnclples to the
Wider community
Neighborhood Safety and Housing RevitalizatIon
FollOWing Council approval of the pilot area, an mterdepartmental neighborhood safety
program Will address concerns Identified by reSidents. among which may be the need for
home security Improvements, street and alley lighting, repair of rundown hOUSing stock and
lead-based paint remediation The Fire Department Will continue to offer disaster
preparedness training to neighborhood watch groups
In addition. given extensive community Input gathered through the recent HOUSing Element
and Intenm Incluslonary HOUSIng Ordinance processes. new and Innovative Initiatives for
preserving and expanding affordable hOUSing CitYWide Will be presented for CounCil
consideration
4
Communlty LIvability
Intenm MaIn Library renovations and major renovatIons of Palisades Park. Douglas Park
and the beachfront south of the Pier will be underway In 1998/99 ConstructIon will have
begun on the PICO Boulevard Streetscape Improvements Preparations will be underway
for enforcement of the Citywide sign ordinance Funding mechanisms for realization of the
full range of Downtown Improvements must be Identified Staff continues to work on
developing. and Will be Installing, a variety of measures to better manage traffic In
residential areas and to make crossing streets easier and safer
The communlty has expressed Interest In pedestrian pathway Improvements while "way
finding" slgnage Improvements. the selection and Installation of unlfled Streets cape design
elements and greater emphasIs on asset maintenance have been Identified by
Councllmembers as desirable Improvements to the "user-friendliness" of the city
Communlty Service Improvements
BIg Blue Bus service expansIons Will be evaluated for four bus routes dUring FY 1998/99
and a new Library circulation system Will proVide users with expanded capabilities
Throughout City operations customer satisfaction tracking, public mput opportunities and
community prlonty surveYing are contemplated
In addition. Councllmembers have. In the past. expressed Interest In expanding hours at
the Main Library A master planmng process Indicates that there IS community Interest
In a major expansion of that faCility Recommendations of the Telecommunications
Master Plan working group are anticipated to Include proposals for expanded electronic
delivery of CIty servIces RecreatIon program strategIes IdentIfIed In the RecreatIon and
Parks Master Plan remain to be Implemented
5
OTHER NEEDS
In addition to the ongoing and potential work efforts noted above. other City operational
and capital needs must be considered In assessing budget priorities
Internal System Improvements
Improvements to the City's Internal management procedures. systems and faCilities are
essential to our ability to deliver the level and quality of service expected by the
commumty Critical city software programs With Year 2000 problems must be replaced
Evaluation of the use of technology to Improve work flow In City processes should be
undertaken Reconflguratlon of the City and Transportation Yards must be evaluated and
funding sources Identified prior to proceeding to the next stage of deSign Planning for
space renovation and allocation In the Police wing of City Hall must begin as work on the
new public safety faCility commences Update of the CIVil service code. extension of the
records management program to Increase efflcrency rn handling publiC documents, and
adoption of a two year budget planning cycle are contemplated
Capital Improvements
An unprecedented level of capital Investment In the City's assets IS underway. Including
park Improvements, earthquake recovery and lnfrastru ctu re enhancement and
maintenance projects The current level of activity exceeds eXisting project management
capacity and as a result. Implementation of previously funded projects has been slow
Still. there IS a daunting catalogue of unmet capital needs totaling close to $150 million
These Include the estimated $49 3M In projects contemplated In the Parks and Recreation
Master Plan. $10M In parking structure upgrades, $12 2M for realization of the CIVIC
Center speCIfIC plan. $26 5M In alley and Sidewalk repairs. $10M In streetlight Installation,
$20M In Palisades bluff stabilization, $7M for reuse of 415 PCH. $3 2M for the City share
of breakwater construction. and $23 2M for Downtown and Main Street Streetscape
Improvements
6
COMMUNITY GRANTS/CDBG & HOME PROGRAMS
In conjunction wIth 1997/98 budget development. the CIty conducted open proposal
processes for social service and arts grants Funding for the successful agencies was
recommended over a penod of three years, commencing With the current year and
dependent on appropnatlons In each of the two subsequent fIscal years Second year
funding will be recommended In FY 1998/99 for agencies which are meeting the
performance measures and work plans set out In their contracts Public Input on year two
of the grant programs. Including use of the City's CDBG and HOME funds. will assIst In
preparation ofthe action plan for thiS year as reqUired by the Department of Housing and
Urban Development
RECOMMENDATION
It IS recommended that CouncIl. Housing Authonty, Parking AuthOrity and Redevelopment
Agency hear public comment and hold a diSCUSSion on budget priOritIes for 1998/99.
Including CDBG and HOME programs
Attachment Background on City Budget Structure
Prepared by John Jail!!. CIty Manager
Susan McCarthy, Assistant CIty Manager
Mike Dennis, Finance Director
7
Background on City Budget Structure
To further assIst the CouncIl and the public In assessIng next fIscal year's budget priOrities, the
following IS a bnef descnptlon of the City's budget structure Included are pie charts showing the
largest funds In the Adopted FY 1997~98 Budget, as well as the major revenue and expenditure
components of the General Fund
For budget purposes, the financial operations of the City are organized mto thirty-two separate
funds
For ease of dIScussIon, these funds can be grouped mto three major categorres
. Enterpnse and Internal Service Funds operate much like pnvate bUsinesses where the
services proVided are financed prlmanly from user fees Examples are the Water Fund,
Solid Waste Management Fund, and the City's self-msurance funds
. Special Revenue Funds are used to keep track of expenditures that can legally only be
made for speCifIC purposes and where the revenues come from specIalized sources Examples
are the Community Development Block Grant Fund and the Beach Fund
. The General Fund Involves revenues and expenditures associated With proViding baSIC City
services, such as Police, Fire and Library About two-thirds of the General Fund IS financed
from tax revenues such as the Sales Tax, Property Taxes, the Utility User's Tax, the
BUSiness License Tax, the TranSient Occupancy (or Bed) Tax from hotels and motels, and
the Parking FaCIlItIes Tax Remammg revenues come primarily from other governmental
agencies. vanous fines and cost-offsetting fees and charges
finance\admm\other\bckgr wpd
f.. <F-
e 0;-0 ~
~~ ~-: ~ ;l- ~
;:: ~ - !ri?: : ~
i'ii ~ ~!: ~ ~ E
~ ~ ~ ~ ~ ~ LL ~~ ~ ~ ~ ~
l&-~lI" E-- C- C ~ .!I '" -v
;r~E 8'E ~ ~ ~ Tl ~ ~ -a
tj:~; ~ E ~ ~ ; 1.':1 II:
#- t ~ ;.i ~ ~ (}
o fft: i ~~ ~ [
.....;&: ::!:
~ ~ e&.
E
~ -
~ ~ w
I- w E ~0
W ~ ~~ ~
~ ~ B~ .
C CI 1ft Z0
Z~ VI Ww ~
:::> ~Ill . c ~U ~
m ~ilj I '" Z W:i 1l
'" :::> IIlJ ' 0
C ::l~ I g LL~:i I ~ ~
Z 00<( , 0_ "'0 >- ..
_ OJ ..I ::;: ...J >1'" l ::}
- >< ~r- ... ...J we ' '"
u.. wID ~, . Z;I!: I
zo ~, - <C 0< , ~
-oJ i~ ~ li'::Ow ::: -
~ 0 ~I j .... I- w~ II ~
...... lIIZ """, I l %z - ~
a::: ~< "'\ :'! w ~w '5 €
w w .. \. " ~ II: ec to', ... Ul
z ffi ~ \. / . C w~ w :\ .g.
~ . ,. , -
W ." - - ~ 5
..0: V I ...J ~ ~
C) \. m ~ ~
I ~ ~
CO CO ~ l ~
<>> "'.' 0)" '..... ~."
I ; lIIlI I "'.... -<'t :.
..... ".a* ..-... ! & .... ~
en E:!IiI"" en t; "C oil
0) ~ ~~ ~." ~ ~~ ~ !
.... ~ ~j i ~ ~ ;; E ~
........ ~ ~ ~ ~ '- :) ~~ ~ ~
,- c: Sill Z,,- r;:o ~- I:.l all .;j
LL c3 8 LL ~.i ~ i
C c i~ ~~
w w ~
I- l-
n.. Q. ~ _
o ~ "* ~ 0 #~ ~ ~
C ~ ~ ~ ~ 0 :::~., ~ "#- ~
<( L(I ~ ~ ~ <C ~";j~ 1: :: ~
.. 'ill 11.1 :ii-..ll :::: ii'O .., -c;
W ; ~ ~ 'S ~ W ~ ~~ ~ 5 ~ ~
::J: ~~~ ~ ~ :J: [~~! ~
I- -: ~! ~ ~ t- i ~ ;; ~ ~
LL ~ ! : 0 ! 6 u. ! 0 u..
O 1nl5~ I 0 ~: ~
,.. ':ii -/, ,. . ,
'I: 1:11 ...- L - . I"-
m i:ir-/\! UJ ~
~ \ ~~ - c:
U) 1- ~ . \ \, .1 VI en .8
> 121 ~-'\\;'~ jl > lu ~
...J :!:J: 0; " ,','. j -oJ ::EW ~
<( ~w ::0. \\~~! <( Om . ~
z u. ~ ~. \ \ '\L 1 1_ Z IE w .
I/) Z ,-- '. Ii 'Pf I/) U
<( W 0<( , '- " __ 'l r I <( W Z
::iE ..J _ --......., ", \,~;. j" ,.:- ID :: ~ L ~
R:i ,~\"I'I' '" 0<( i ~
~ ....... \,~."'/ ": I.) ID . ~
iii ~ '......". I.D >::E 5
zO ' (!; Wo. ~
!ift: ... ZiEr:! ~ ~
_ IL 0 r---
e , .. ~ "'- .
wZ II Wz :.::C;: ~
:z::c. ii ~c ~. "':::I ,..,'t
t-U) Q t-cn I ~ Gl
lIIW I- lIIw J.i -i:" p) ii
ffi~ o:::~;!~ ~ -: &-
~w Wz '1 € '€
s> . ~IU ." <i '5.n
III ~ > '_ 1 ..... iii
a: "# ., ~::~ I f
..... .=..... :6
~ ~ ~ ~ ~
i \~ ~ j j i ~
-' "e 0 ~~ > :
(L !: ~& ~
~ j~ ~~ !
~ ~e .
= ~
] !
~ ~ x
CD K. ~
>< ~ ID
N 00
ca x ~#.
I- ro UO
~ eN
~ ro N
- ID w
ca W ID
U ~ ro
o ~ w
...J :5
I
"'C
c::
:::::SCO ~
LLc:n CO
-........ ......
CUt-- cD
'-en CO
CD en 0
s:::~ rtt:f
CD>- m
C)u.. ~
"'C a#._
CD - ~ N m
..... 0 ~ LO +'
C. ..... 0 or- 0
or- 00 t-
O 00 ID
ID X
..... X ro
~ ro ~
<C ~ ~
~ ~
..... ~ ~
0-0
o ~
- ~
~ <C X X
~- ro ro
ca ~ ~
U Q..
E j
a.. U:::R
G;:R Ui:O
E 8N g~
~ o or-
~ ~~ ~
~ e ~
#ft ID _
VI 00 00
e j
ro m
~
~