SR-202-001 (23)
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Councll Mtg: Jun~9, 1984
~nta Manlca, Callfarnla
:z
J!Hi 1 9 1984
2?J2-tJo/
TO: Mayor and Clty Counell
FROM: Cltj Staff
SUBJECT: Adoptlan af 1984-35 Budget
nnt{ODUC1'lON
rhe purposes of thlS report are:
1) ro present reV1Slons to the Clty Manager's proposed budget
for 1984-85;
2) LO clarlfy the extent of dlscret10n provlded to Clty staff
for budyet transfers durlng the year;
3) to clarlfy the extent of d1scret1on provlded to Clty staff
for personnal changes durlog the year
4) to pruvlde addltlonal lnformatlon regardlog the CommuolLY
Development Program;
5) to request an approprlatlon to reserves to fully utlllze tne
Clty'S 1983-84 Gano spendlng duthorlty;
b) to re~uest reapproprlatlon of funds for capltal projects con-
tlDulng loto 1984-85; and
7) to reco~mend adopt1on of the 1984-85 budget resolutlOn of tile
Clty CouDell, the Redevelopment Agency and toe Parklng
i\uthorltj'.
KLVI~ION3 707hZ PROPOSBD BUDGET
~Xhlblts A and B out1lne a set of reVlS10ns to revenues and ex-
pend~curesl respectlvely, dS presented 1n the Proposed Budget for
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Prepared by: John Jalili, City Manager
Lynne Barrette, Assistant City Manager
Mike Dennis, Director of Finance
craig Perkins, Budget Coordinator
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cdpLtal budget.
Th2S represents a departure from recent years'
budget resolutlons whlCh deflued apprapr2ations to the maJor ac-
count catego~y levels of salar~es and wage5, supplles and expen-
ses and ca~ltal outlay 1n the operat1ng budget. TnlS change
would prov1de tne Clty t1anager w1th d1scretlon to make budget
transfers between maJor account categorles wlthln a departmental
operatlng budget.
Conversely, It lS recommended that less dlS-
cret10n be provlded to C1ty Staff 1n transferrlng funds 1n the
capltal budget. Instead of approprlat1n9 the entlre cap1tal bud-
get, 1t lS reco~aended that the aUthOr1zat1on be set at the pro-
gram category level.
The pr1nclpal benef1ts of autnor2z1ng adm1n1strat1ve dlscretlon
to ma;.ce transfers wlthll1 tile bottom 12ne of each department's
operatlng budget would be:
1) Fewer C1ty Councll agenda ltems;
2) Less staff tlffie 1nvested ln tne preparat1on, reVlew,
reV1Slon and product1on of staff reports;
3) More tlffiely procesS1ng of budget transfers to facllltate
budget monltor2ng; and
4) More efflclent lmplementatlon of departmental programs as
approved by City Counell.
Tne key d~C1S10n factor 1n maklng thlS change 1S the trade-off
between control over tne detalled spend1ng plan of department
verSUd o~erall efflclency and productlvlty for the Counell and
C2ty staff. ResponSLbl12ty for po12ey control over the use of
funds clearly rests wl~h Clty Counelli thlS fact lS underscored
bJ the Clty Charter as well as standards of profess1onallsm In
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publ~c adm~n~strat:lon. It ~s .lmportanl:. to recogn~ze that effec-
t~ve pol~cy control can be exerc~sed by C~ty Counc~l only through
the respons~ble, pruiesslonal cooperatlon of the C~ty staff.
Wn~le the C~ty's budget~ng system ~s lntended to establ~sh cost-
centers wnich fac~lltate policy-mak~ng as well as flndnc~al needs
analysls, l:.he account strUCl:.ure alone can not dlscrlm~nate budg~t
allocatlons wh~ch hdve pol~cy lmport.
For example, under past
budget resolut~ons staff would not have author~ty to transfer
fundci truw an off~ce suppl~es account to an offlce equlpment ac-
Count ~n order to purchase a typewr~tar.
However, staff would
have authorlty to transfer funds froffi an off~ce supplles account
to a professlonal serVlces account. 3~mllarlYI staff would not
have author~ty to transfer funds to make rental payments on a
typewrlter under a lease/purchase plan ~f the eXpend~ture had
been approved as a purchase from cap~tal outlay. It lS ObVl0US
that there are many transfers WhlCh must now be presented to C~~y
Caunell for perfunctory rev~ew and dpproval. It ~s also obv~ous
ttlat prev~ou;:; budget resolutlons do not guarantee that C~ty Coun-
ell approval be obtd~ned before substant~ve budget adJustments
are Lnade.
7ne C~ty Manager and staff have exerc~sed and w~ll
cont~nue to exerClse prudent Judgement to ensure that the Clty
Counc~l POllCY gu~dance ~s obtd~ned for admln~stratlon of the
bu.lget.
Improvement in the C~ty's budsetary and management capac~ty over
tne past twu years support thlS respon~lble step towards more
contemporary budget~ng practlces. rhe management-by-obJect~ves
system ~n the annual budget~ng process and the comprehens~ve m~d-
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year performance and f~nanc~al reports slgnlflcantly enhance
Counc~l's ab~llty to establlsh and monltor POllCY dlrectlon for
the Clty.
The reflnement of finance system admlnlstratlon, use
of management lnformdtlon reports and development of an Ad-
mlnlstratlve Instructlon manual have slgulflcantly enhanced tne
City Manager's ablllty to lmplement establlsned POllCY obJec-
tlves. At thlS pOlnt the Clty of Santa Monlca has successfully
lnstltuted budget and management systems WhlCh compare qUlte
favorably to other cltles.
~here has been a clear trend 1n Cltles nat10nWlde towards
delegatlon of "house"eeplng" dutles to staff In order to free
leglslatlon fo~ pollcy-maklng responS10l11tles. A survey of the
cltles wlth WhiCh Santa MODlca routlnely compares for personnel
purposes was cQnduc~~d to learn the typ2cal prdctlces for
co@parably slzed cltles lD thlS raglon. The cltles of Burbank,
Culver C2ty, Long Beaco, Downey and Torrance each provlde
adm1n1stratLve author1ty wrtlch 15 equal to or br~ader than 15
proposed for Santa Manlea. Pasadena and Glendale are resLrlcted
by their C1CY Charters to toe maJor account group level of
apprOprl.atlon. Inglewood allows the Clty Manager LJ make "mluor"
transfers between account groups; however there lS reportedly no
clear operatlonal deflnltlon of th1S standard.
PERSOdNEL CdA&GES
"rhe authorl1..y of tile Counel.l to control pOSl tl.on allocatlons,
clasSlflcatlons dud compensatl.on rates lS not affected by the
proposed changes 1.n the budget resolutlon. Therefore, there lS
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no posslbll.lty that tne level or composlt1.0n of permanent stdff-
1.ng levels ~n departments would be changed w1.thout axpress ap-
proval of the Clty Councll.
As part of the budget process, a set of class1.f1.cat1.on and com-
pensdt1.0n change requests were reV1.eWe~ 1.0 accordance w1.th the
Ad~1.n1.stratlve Instruc~1.on.
These have been l.ncorporated lnto
the proposed budget sdlary and wages dccounLS. An acCompdnY1.ng
staff report from tnc PGrsonnel Dlrector prov1.des detalled back-
ground on these changes.
C0MHUNlry D~V~LOPMBNT PROGRAM
On June 12, the Clty Councll approved the "a4-'8~ Co~~un1.ty
Development Plan. At that tlffie the .lntent expressed on the part
of COUDc1.l was to posslbIy lncredse the number of programs and
tne am0un~ of fundlng allocated to the Communlty Development Pro-
gram.
In the event that the Counell chooses to do th1S, the fo1-
low1ng 1nfonnat10n may be helpful 1n mak1.ng the necessary fund1.ng
declSlons.
1. Wllshlre-Mo~tdna Nelghbors' ~S~Oc~dt~~n
A 5lX month grant l.n the amount of $16,000 could be awar-
ded to IdY tne groundwork fur a ne1.ghborhood aSSOC1.atlon
In the W1.lshlre-Montana area. An add1.t1.onal 5lX month
fund1.ng l.ntne amount of $34,450 would be cont1.ngent upon
certa1.n requlrements havlng been met pr1.or to that t1.me.
The follow1.ng outl1.nes a proposed general workplan for
these actlvltles.
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a} F~rst QUdrter (July_- ~ep~ember)
A consultant w~th a h1gh level of expertlse 1n the
development and management of a non-prof~t orgdn~za-
t10n would be h~red.
ResponS1b~1~t~es would ~nclude
the plannlllg and adm~lllstratlve tasks that are essen-
tlal to the establlshment of a vlable, non-proflt,
cOl~~unlty-based organlza~lon.
(l)
Board development (how many, composltlon, terms
of offlce, respons1bl11tles, legal llabllltles);
planning (lncludlng followlng through on
lncorporatlon and tax-exempt status; ldent~fy
lng lssues the Board of Dlrectors wlll have to
address such as personnel pol1cles, cormulttee
structure, staff hlrlng procedures, membershlp
fees and flscal management procedures);
{111) Job descrlptlons for staff members
(Ex D1rector, com~unlty organlzers, clerlcal
(11)
(lV)
(v)
staff);
stdff Board of D1rect0r meetlngs; and
asslst Board 10 the hlr1ng of an Ex D~rector
b} 3econd Quarter (October - December)
An Executlve D~rector w1ll be h~red. The consultant,
~xecutlve D1rector and Board w~ll begln an extenslve
membershlp dr~ve. By the end of the SlX months, addl-
t~onal fundlng for the rema1nder of the yedr would be
cont1ngent upon:
(1) the legal paperwork hav~ng been completed;
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ell)
an operat1onal and stable Board of D1rectors
willeh 18 representatlve of the nelghborhood
(age, ethnlc, geographlc and lnstltutlonal)
havlng been developed:
(lll) 25~ of membershlp havlng been recrulted (.1.e.,
75 pdld members); and
two lssues for futher work havlng been
ldentlfled.
A budget reflectlng thlS level of actlV.1ty and phaslng
of personnel would require ~5J,450 .1n Clty support.
(lV)
2. Los A~geles Chlldblrt~ Center (LACC)
The Clty'S Project Manager for renovatlon of the Alterna-
tlve Blrthlng Center estlmates that renovatlon under the
C1LY Contract wlll be completed no later thdn July 15th.
LACC estlmates that the remalnln~ portlon of toe renova-
tlon that they are fundlng wlll be completed and the Cen-
ter op~ned by September 30.
51nee LACC cash flow prO]ectlons lndlcate that they need
Clty support unt.ll flve morn:.hs after the openlng of the
Center, Clty support would be needed for elght months of
FY 84-a5. Based on annual fundlng level 1n 1983-34 of
$31,200, this would be ~20,8uO.
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approximately s~x months for the Court to ircrease ba~l
fees to match the city's new f~ne schedule and to re-prlnt
parking tlckets and other assoclated documents.
Of approximately 32,900 citations issued durlng ~Iarch 1986,
26,600 or about 80% were In the following maJor categories.
A comparison of current flne schedules In these ~aJor
citation categorles for nearby citles is as folIous:
Haior citation category
HC3326 HC3372 HC3373 HC3394A HC3237A
Dlsobedlence Red Zonel Street Pref.
Clty to Signs DrlVe\vav Cleanlng Heter parklng
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Santa
Ifonlca 28.00 28.00 13.00 13.00 28.00
Harnat-;:an
Eeacj 13.00 13.00 13.00 8.00 *
Red8r.do
Beac~ 13.00 18.00 13.00 13.00 13.00(1)
Cl..:~ ver
Clty 26.00 28.00 13.00 13.00 13.00
;:er~osa
Ee~c2 13.CO 2G.OCJ 18.00 18.00 18.00(2)
T -_,............ :2e~::::-t l5.CJ 23.00 IS.CO 15.00 ><
_........La":;: I::g 1 a-deed 23.00 28.00 23.00 13.00 28.00(3)
E-e"{.j"e~ly
!-:l.lls 23.CO 13.00 28.00 13.00 13.00
Torra::-:ce * 18.00 13.00 * *
Los Ar:geles * 23.00 23.00 13.00 28.00
* Citles denlt lssue these types of cltatlons.
(1) Th1.S C1.t.y sells permits to park ~n des~gna::ed "I'c,:-a\BY Zones".
(2) T~lS c,-., sells pe~its to park 1:1 Ce~~aln ~etereQ a~e~s.
(3) T~is c.: t.y sells pe:::-nn ts for "?eslcentlal ?arkln;" are3.5.
C. Increase the Co~do~lnlu~ CGr.versicn Tax - 7he curren~ tax
15 $1,008 per unlt when sold (~eN develc9~e~ts ard
conve~slor.s). I~ the tax were lncreased to 52,000 ?er U~lt
~;~~~ 5~:~1 ~~ a~~~tl~~a: $:S3,CCC ~C~:~ ~~ g~n~ra~~~ ~~=l~g
EY 1536-37, at minlmal ad7L~n~s~ratlve cost.
D. Increase the Transien~ Occ~~ancv Tax - Curre~t rate 1.s 8%;
a 1% pOlnt l~crease wc~ld Yleld a~out $300,OCO/yr. at
current h~mber of hotel rooms (not lnclud~ng t~cse under 30
day exempclen) at mlnlmal ad~lnlstratlve costs. C~rren~
rates for CC~?a=lson cities a~e:
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Estlmated Actual Spendln~ .~~~ults for FY 1983-84
Ongolng Overrlde
Component + Component = Total
Gaun Llffilt (Kev~sed) $23,4do,995 $3,395,954 $26,882,949
Estlffiated Actual Spendlng
Subject to L1mltatLon 21,106,746 2,353,992 23,460,738
D1fference $ 2,380,249 ~1,041,962 $ 3,422,211
[under/(over)j
It 1S lrnportant to note that $1,041,962 of the $3,422,211 would
have to be earmarked for pollee and protecclve serVlces.
It ap-
pedrs thdt none of the $3,422,211 would come from FY 1983-34
revenue flows because est1mated actual spendlng exceeds estlffiated
actual FY 19d3-34 revenue In the General Fund and Parks and
Recreatlon Fund by $1,4J5,33d.
when trie Clty'S FY 1983-84 Comprehenslve Annual Flnanc1d1 Report
15 submltted to the Counell dur1ng November 19d4, the Flnance
Dlrector wlll report to the Counell the actual amount WhlCh the
Councl1 approprlated to the "Ganned" reserve account.
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categorles, each program category of the capltal lmprovements
budget, and the revenue deta~l, and does authorlze the City
Manager to allot by maJor expendlture category as approprlated.
SECTION 2. That in adopt~ng said budget, the C~ty
Councll does hereby reapproprlate the unencumbered balances and
unexpended encumbrances of the 1985-1986 Capltal Improvements
Budget conslstlng of not to exceed $7,439,730 from the General
Fund "Ganned" reserve account and not to exceed $59,231 from the
Recreat~on and Parks Fund "Ganned" reserve accounti and not to
exceed the amounts from the
unencumbered
balances
respectlve funds:
Fund
Beach
Mlscel1aneous Grants
CDBG
Water
Refuse
Redevelopment
Pler
Sewer
C1V1C Audltorlum
Cemetery
Alrport
and
1985-86 Capltal Improvements Budget
unexpended encumbrances for the
Reappropriation Amount
Not to Exceed
$ 334,092
644,200
1,020,841
3,569,375
395,304
6,186,712
1,464,289
2,715,474
110,235
130,949
5,078,045
2
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