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F:\FINANCE\BUDGET\YEBUDREV\0001\YE_Report\SRYREN01.WPD
Council Meeting: October 23, 2001 Santa Monica, California
TO: Mayor and City Council
Chairperson and Redevelopment Agency Members
Chairperson and Parking Authority Members
FROM: City Staff
SUBJECT: Recommendation to Adopt Fiscal Year 2000-01 and Fiscal Year 2001-02 Budget
Changes and Adopt a Resolution Establishing Various New Classifications and
Salary Rates
Introduction
This report recommends Council approval of year-end budget changes for FY 2000-01. Changes
necessary to further implement the FY 2001-02 budget, and a preliminary analysis of the impact on
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City revenues of the recent downturn in the economy and the tragic events of September 11, are
also presented for Council information and action. For information only are attached as separate
documents the FY 2000-01 Year-End Departmental Performance Review and the Capital
Improvements Program Status reports.
FY 2000-01
1. Previously Approved Revisions to the FY 2000-01 Revenue and Expenditure Budgets
Details of previously approved revenue and expenditure budget changes that occurred since
January 1, 2001 are listed at Exhibit A. Changes approved for the period of July 1, 2000 through
December 31, 2000 were reported to Council as part of the Mid-Year Budget Report.
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2. Proposed Budget Changes
The only significant proposed changes to the FY 2000-01 Revised Budget are in the General
Fund where four departmental budgets are increasing by a combined total of $1.3 million due to
greater than anticipated actual program costs. These costs are more than offset by other
general fund savings.
All other proposed changes are for relatively minor budget adjustments as described in Exhibit B.
Additional year-end budget changes, having no net impact on the budget, are necessary to
ensure that departmental budgets are balanced to the major account group (Salaries and
Wages, Supplies and Expenses, and Capital Outlay) appropriation level within a department by
fund, and are also indicated at Exhibit B.
The FY 2000-01 budget changes detailed at Exhibit B recognize actual expenditures incurred and
will not significantly change estimated fund balance projections for June 30, 2001 as presented in the
Adopted City Budget for FY 2001-02. Actual fund balances will be reported in conjunction with
submission of the City's Comprehensive Annual Financial Report (CAFR) for FY 2000-01 in
December 2001.
3. Estimated FY 2000-01 Savings
Staff currently estimates $3.4 million in General Fund year-end savings. A final amount will
be provided in conjunction with submission of the CAFR. Staff recommends that Council take
immediate action to commit savings to the following uses:
-- $3.0 m to construct the Civic Center parking garage which would otherwise be delayed
until lease-revenue bonds can be issued;
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-- $86,000 to the SMMUSD to conduct the strategic planning process recommended by
the District’s Financial Oversight Committee and endorsed by the new Superintendent
and Board;
-- $200,000 to a joint project of the Convention and Visitor’s Bureau, Bayside District
Corporation, and the business improvement districts to encourage visiting and
shopping in Santa Monica targeted to residents and the wider regional market to
stimulate economic recovery;
-- $82,800 to enhance traffic circulation by flexibly using civilian classifications for traffic
control and parking enforcement.
4. Year-End Departmental Performance Review
The FY 2000-01 Year-End Departmental Performance Review, which indicates progress towards
accomplishing objectives and performance indicators established at the outset of the fiscal year, is
hereby transmitted as a separate document for information.
5. Final FY 2000-01 Capital Improvements Program Status Report
Every six months, staff provides the City Council with a Capital Improvements Program Status
Report. This report explains the program and financial status of each active City capital project. The
status report for June 30, 2001 is submitted with this report as a separate document for information.
FY 2001-02
Following adoption of the FY 2001-02 budget, the economy declined more rapidly and severely than
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anticipated. This decline was exacerbated by the tragic events of Sept. 11. Based on very
preliminary data, it is estimated that FY 2001-02 General Fund revenues may be from $7.9 M to
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$17.0 M below budget. A similar revenue shortfall may be experienced in FY 2002-03. In addition,
Sales Tax-related Big Blue Bus revenues may also be adversely impacted. Prudent Council
financial policies and years of fiscal discipline have positioned the City to sustain services while
cutting costs during the possible two year revenue shortfalls. Pending the availability of more
detailed information over the next sixty days, a cost reduction program is underway. Staff will
provide Council with an update no later than the January 2002 Budget Priorities public hearing for FY
2002-03.
1. Proposed Budget Changes
Various FY 2001-02 budget changes, detailed at Exhibit C, are proposed. These changes are
necessary to reflect information not available when the City's budget was adopted in June 2001, and
to make technical changes and corrections necessary for further budget implementation.
The changes are consistent with the goals and objectives outlined in the FY 2001-02 Adopted
Budget.
The FY 2001-02 General Fund budget changes detailed at Exhibit C result in the projected General
Fund June 30, 2002 balance as shown on the next page:
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Adopted
FY 2001-02 Recommended Revised
Budget Changes FY 2001-02 Budget
6/30/01 Estimated
Actual Fund Balance $16,400,000 $ -0- $16,400,000
Plus Revenues 174,188,153 (76,097) 174,112,056
Less Expenditures 193,220,854 380,064 193,600,918
Balance Sheet Transfers 19,622,801 11,200 19,634,001
Use of FY00/01 Savings* -0- 368,839 368,839
06/30/02 Budgeted
Fund Balance $16,990,100 ($76,122) $16,913,978
*Excludes $3.0 million to provide cash flow for Civic Center parking structure project.
Budget changes associated with other funds detailed at Exhibit C do not significantly change the
projected June 30, 2002 fund balances for those funds as presented in the Adopted City Budget for
FY 2001-02.
2. Fee Resolutions
Included at Exhibit E are two fee resolutions relating to charges for the use of Beach property for
special community events and for cleaning deposits related to special events on Beach property. In
the past, these charges have been set and administered under City Administrative Instruction
guidelines. These resolutions are a technical action to formalize the charges and have no budgetary
impact.
3. Personnel Actions
Included at Exhibit D is a resolution revising salaries for various positions. These salary changes
result from an analysis of similar positions in comparable cities and internal equity factors. Also at
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Exhibit D is a listing of position and classification changes, which have been reviewed and approved
by the City Manager, Human Resources Director and Personnel Board. Costs associated with these
changes will be absorbed in the existing budget.
Recommendations
It is recommended that: a) the City Council, Redevelopment Agency and Parking Authority approve
the budget changes detailed in Exhibits B and C; b) the City Council adopt Exhibit D establishing
various new classifications and salary rates; and c) the City Council approve the fee resolutions at
Exhibit E.
Prepared by: Susan E. McCarthy, City Manager
Mike Dennis, Director of Finance
Karen Bancroft, Director of Personnel
Ralph Bursey, Revenue Manager/Treasurer
Joan Akins, Administrative Services Manager
David Carr, Assistant Treasurer
Kathy Chang, Principal Budget Analyst - Operating
Amy Tidus, Principal Budget Analyst - Capital
Annette Morales, Senior Administrative Analyst- Budget
Raymond Struebing, Senior Administrative Analyst- Budget
Attachments: Exhibit A1 - FY 2000-01 Previously Approved Revisions and Proposed Year-
End Changes to Revenue Budget for the Period 1/1/01 - 6/30/01
Exhibit A2 - Explanation of Previously Approved Revenue Budget Revisions for
the Period 1/1/01 - 6/30/01
Exhibit A3 - FY 2000-01 Previously Approved Revisions and Proposed Year-
End Changes to Expenditure Budget for the Period 1/1/01-6/30/01
Exhibit A4 - Explanation of Previously Approved Expenditure Budget Revisions
for the Period 1/1/01 - 6/30/01
Exhibit B1 - Summary of Proposed FY 2000-01 Revenue, Expenditure Budget
and Balance Sheet Changes
Exhibit B2 - Summary of Proposed (No Net Budget Impact) FY 2000-01 Budget
Changes Requiring City Council Approval for the Period 1/1/01 -
6/30/01
Exhibit C - Summary of Proposed FY 2001-02 Revenue, Expenditure Budget and
Balance Sheet Changes
Exhibit D1 - Resolution Revising Salaries for Various Positions
Exhibit D2 - Listing of Position and Classification Changes
Exhibit E1 - Resolution Establishing Cleaning/Damage Fees for Community Events
Exhibit E2 - Resolution Establishing License Rates for Community Events
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