sr-011012-8aity of City Council Report
Santa Monica
City Council Meeting: January 10, 2012
Agenda Item: 7-A
To: Mayor and City Council
From: Gigi Decavalles- Hughes; Acting Director of Finance
Subject: Financial Status Update and Midyear FY2011 -13 Budget
Recommended Action
Staff recommends that City Council:
1) Receive the FY2011 -12 through FY2015 -16 Financial Status Update;
2) Appropriate Fiscal Year 2011 -12 budget changes and adjust revenue budgets as
detailed in Attachments Al and A2;
3) Adopt a Resolution establishing classification and salary rates for various
positions detailed in Attachment B1;
4) Approve the position and classification changes detailed in Attachment B2;
5) Adopt a Resolution establishing the Fire Safety Officer Assignment fee in the Fire
Department in Attachment C; and
6) Receive General Fund fund balance classification changes as required under the
new Governmental Accounting Standards Board reporting requirements in
Attachment D.
Executive Summary
In June 2011, Council approved the City's first two -year budget against a backdrop of a
national economy that appeared to be on the verge of entering a double -dip recession,
rising healthcare and pension costs, and stagnant revenue growth. These factors
threatened to put the City's General Fund into a structural deficit as early as Fiscal Year
2012 -13. The subsequent cost- saving actions by Council, including a large paydown of
the City's PERS liability and significant changes to employee benefits, combined with a
slight recovery in several key revenue sources, have positively affected the City's
financial position. During the recent "Can We Talk" meetings, the City Manager
presented information that showed that these changes had eliminated the potential
General Fund structural deficit through FY 2015 -16.
E
As staff reviewed the current fiscal year revenue and expenditure trends and the latest
economic data in preparation of the mid -year Financial Status Report and Mid -Year
budget changes, several areas were identified where revenues and expenditures
needed to be adjusted. Business license, property, and transient occupancy taxes are
showing improvements earlier than previously predicted, while parking citation revenue
is lower than expected. Recommended expenditure budget changes to reflect proposed
reorganizations that position departments to deliver services more efficiently and
effectively, and the various compensation - related cost saving actions noted above, will
result in an overall decrease in FY 2011 -12 General Fund expenditures; however,
based on current assumptions, the reorganizations and dip in parking citation revenue
are anticipated to result in a slight structural deficit in FY 2015 -16. This change from the
recent reports that showed the structural deficit eliminated during the five -year period
demonstrates the fragile balance that currently exists between revenues and
expenditures, and cautions the City to continue to diligently monitor its finances and
take appropriate actions to ensure that any structural deficit be addressed so that the
current level of service to the community can be maintained.
Changes in other funds, whether based on new grant revenues or reorganizations, are
not impacting the FY 2011 -12 General Fund budget beyond what was adopted in June,
and are anticipated to have a minimal impact on the General Fund over the five years,
yet changes related to the elimination of redevelopment present a real challenge to the
City's future ability to renovate critical infrastructure and produce affordable housing.
Background
On June 21 2011, Council adopted the first year and approved the second year of the
FY 2011 -13 biennial budget. As part of the biennial budget, staff committed to return to
Council at six -month intervals to make adjustments to the City's budget based on
updated economic indicators and actual performance.
As of June 21, 2011, taking into consideration the budget as adopted and assumptions
that reflected a struggling national economy, slight or no growth from several of the
City's major tax sources (Property Taxes, Utility Users Taxes, and Business License
Taxes), a continuing State budget crisis, deep losses in pension fund investment
holdings resulting in increased rates, increasing health insurance rates, and a
continuation of the current compensation structure, the five year forecast indicated that
the General Fund would experience a structural deficit in FY 2012 -13 and risked having
to access its economic uncertainty funds. It was clear that, to prevent a future deficit,
measures needed to be taken to change the course of the City's finances.
I•a
During the summer and fall, staff implemented a number of cost saving measures, and
several key areas of the local economy have grown faster than anticipated, resulting in
an improved financial outlook for the City. However, many budget challenges still
remain, including a slow economic recovery, expenditure growth that exceeds revenue
growth, and the loss of future redevelopment funding
Discussion
Economic Update
As the FY 2011 -13 City budget was being prepared, the national economy appeared on
the brink of falling into a "double dip" recession. Economic growth was slowing after
several quarters of improvement, unemployment remained stubbornly high, and the
housing market continued to suffer. Although the national economy remains in a fragile
state, recent economic data shows signs of improvement, and few economists expect a
double dip recession at this time. Third quarter 2011 economic growth of 1.8 percent,
as measured by the change in Gross Domestic Product (GDP), exceeded the growth of
each of the previous two quarters, and most economists are now projecting mild
economic growth for the next two years. The national unemployment rate has also
shown some signs of improvement, falling to 8.6 percent in November, the lowest rate
since March 2009. The housing market is also showing mixed results. While the latest
home sales data shows a year- over -year increase in the number of units sold, prices
are down compared to the prior year. The European debt crisis also has the potential to
damage the world -wide economy, which could also affect the pace of the U.S. recovery.
The slow pace of economic recovery has also affected California, but there are some
indications of improvement. The November 2011 State unemployment rate dropped to
11.3 percent, its lowest level in two and a half years, and the State has now added jobs
for three consecutive months. There have been some improvements in exports and
technology - related services, but the weak housing market continues to negatively
impact the key construction and financial services industry. Despite the signs of
improvement, the UCLA Anderson Forecast projects that the State unemployment rate
will remain in double digits until 2014. Additionally, the State budget remains in crisis.
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The Governor recently announced that current projections for State revenue are $2.2
billion less than budget, triggering automatic budget reductions of nearly $1 billion. The
State Legislative Analyst's Office (LAO) recently projected a State budget deficit of $3
billion this fiscal year, growing by another $10 billion by the end of FY 2012 -13
Santa Monica's strong economy and diversified tax base have traditionally allowed the
City to recover relatively quickly from economic downturns as compared to the national
and State economies, and this tradition has continued with the latest recession. Recent
data has shown that revenue increases in some areas were greater than assumed in
the budget. Business license revenues are projected to be 4.7 percent more than
expected in FY 2011 -12, primarily due to the strength of the service and retail
categories. Assessed property valuation also showed an unexpected 2.9 percent
increase in FY2011 -12, and tourism continues its strong rebound from two down years
as year- over -year revenue gains continue to exceed 10 percent per year. The re-
opening of Santa Monica Place has also significantly added to the local economy. The
City now projects that General Fund revenues will exceed budget by $2.2 million in FY
2011 -12 and $1.8 million in FY 2012 -13.
Many cities are still struggling to rebound from the effects of the recession and have
been forced to cut services, infrastructure maintenance, staffing, and reserves. Santa
Monica has been proactive in facing the challenges presented by the recession over the
last two years, employing deficit reduction strategies to balance budgets without
jeopardizing core services. The City closed the FY 2010 -11 books with a net increase
in its fund balance and projects to do so again in FY 2011 -12.
Financial Status Update
A key indicator in determining the financial health of a city is its ability to cover annual
operating expenditures with annual revenues, so that the fund balance is not tapped for
ongoing expenditures. The City's financial status updates include updated current year
revenue projections based on receipts through November and the most recent
information related to growth rates for both revenues and expenditures.
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Overall, the City's fund balances have benefitted from a number of cost saving
measures approved by Council and implemented throughout the summer and fall of
2011. The most noteworthy changes, which have been incorporated in the financial
update, relate to compensation structure changes approved by employees during the
collective bargaining process, and to decreased pension costs due to a $10.0 million,
one -time paydown of the City's unfunded liability.
General Fund
Updated Revenue and Expenditure Projections
The General Fund is showing the most significant change to its financial status since
the last forecast, completed in June 2011, which showed a deficit in FY 2012 -13. The
update includes the changes being proposed within this report as part of the midyear
budget adjustment process, the cost - saving measures that the City took in the past
eight months, and the growth of local tax revenues. These changes have reduced the
deficit gap and, with the proposed mid -year changes contained in this report, result in a
predicted $100,000 structural deficit in FY 2015 -16.
340.0 _... __. _.... _........
Revenues over Expenditures
(includes Capital and Operating Costs in millions)
330.0
325.65
325.55
320.0
315.0
310.0 - - -__ _._. - -- - - - -_. _ -__ �® ®314.5
300.0 - -.. ___ _.. __ - -_
294.9 ®®
® 298.8
290.0 288.5 ®®®
I
I
280.0 ® ®® _ 284.3
276.5
270.0 ' i i
FY 2011.12 FY 2012 -13 FY 2013.14 FY 2014.15 FY 2015 -16
Expenditures - May 2011 Forecast -- Revenues - May 2011 Forecast
® ®® Expenditures - Current Forecast Revenues - Current Forecast
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Current Forecast
FY 2011 -12
Operating Revenues
$ 288.48
Funds from Other One -Time Sources'
$ 2.40
Budgeted Expenditures (Operating and Capital)
$ (276.55)
Excess Revenues over Expenditures $ 14.33
' From Assigned and Unassigned Fund Balance.
FY 2012 -13 FY 2013 -14 FY 2014 -15 FY 2015 -16
$ 294.85 $ 304.94 $ 315.03 $ 325.55
$ (284.33) $ (298.75) $ (314.50) 5 (325.65)
$ 10.52 $ 6.19 $ 0.53 $ (0.10)
The key impacts to the General Fund five -year projection due to economic changes and
cost - saving measures are shown below:
Transient Occupancy Tax
Business License Tax
Property Tax
Parking Citation Fines
Savings from CalPERS paydown using
one -time savings
Safety employee pension contributions (1
percent in FY2011 -12 to 3 percent in FY
2013 -14)
Police Officer health benefit contributions
Reduced cost of living adjustment for
Police Officers (one -time in FY 2011 -12)
Total Five -Year Revenue Changes
(FY 2011 -12 to FY 2015 -16)
$6.7 million
$6.6 million
$5.5 million
-$2.6 million
Total Five -Year Expenditures Savings
(FY 2011 -12 to FY 2015 -16)
$4.0 million
$4.9 million
$0.8 million
$1.1 million
Staff is continually assessing ways to sustain the City's financial health and eliminate
the potential for a structural deficit. Among the measures that are not yet included in
the forecast but will increase future year savings are the two -tier retirement system
negotiated with miscellaneous employees as part of the recently- executed
Memorandum of Understanding (MOU), potential use of additional one -time savings to
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further decrease the City's unfunded pension liability and thereby achieve further annual
savings, and the possibility that changes to the structure and operations of various
facilities, such as the Pier, could decrease the annual General Fund subsidy to several
funds. At the same time, however, the elimination of redevelopment continues to be a
threat to the General Fund as major tax increment - funded infrastructure and housing
production projects, and the staff managing the implementation of these projects, will
likely be required to compete for its limited resources in the coming years.
Fund Balance Definition
The General Fund's June 30, 2011 fund balance presented in the City's FY 2010 -11
Comprehensive Annual Financial Report (CAFR) reflects new categories, or
classifications, to describe the various limitations that are placed on the City's funds, as
prescribed by the Governmental Accounting Standards Board (GASB) and outlined in
Attachment D. Anticipating this change in format, the City Council formally adopted a
fund balance policy as part of the recent budget process (also included in Attachment
D) that explained the new classifications and formally delegated to the City Manager the
authority to establish, modify or rescind assignments (the assigned classification is for
funds that are neither restricted nor committed). When converting the fund balance to
the new structure, the City Manager eliminated legacy or obsolete assignments
(previously known as designations) for activities that were completed, and aligned
assignments with the essential needs of the City. These needs include increasing the
operating contingency from 10 percent to 15 percent (as recommended by the
Government Finance Officers Association) to bring the City closer to a goal of a 20
percent contingency reserve. This goal is viewed by rating agencies as very strong and
also puts the City in a stronger position as it addresses the elimination of
redevelopment. Other essential needs include one -time funds that may be used to
invest in real estate acquisitions related to critical infrastructure or for an additional
paydown of the PERS unfunded liability; and providing an advance to the Cemetery
Fund, while also maintaining the increased economic uncertainty reserve of $9.7 million
that will give the City the added flexibility to address the loss of ongoing redevelopment
funding. A detailed list is included in Attachment D.
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Redevelopment Funds
Staff continues to exercise maximum levels of caution during this time of extreme
upheaval for redevelopment in Santa Monica and in California. On December 29, 2011,
the California Supreme Court issued its decision in the case of California
Redevelopment Association et al v. Matosantos et al. The lawsuit challenged the
constitutionality of the State's plan to eliminate redevelopment agencies unless cities
agree to make one -time and on -going payments to the State. The Court upheld the part
of the legislation that dissolves redevelopment agencies while striking down the
legislation that allowed for survival of redevelopment agencies that give money to the
State. The net effect of the decision is that redevelopment agencies are to be
disbanded and replaced with successor agencies responsible for administering the
payment and performance of obligations listed in required Enforceable Obligation
Payment Schedules (EOPS). On August 23, 2011, Council, under protest and subject
to reservation, adopted a resolution, approving an EOPS, for the purpose of preserving
all rights to make payments and perform enforceable obligations associated with the
Agency's Redevelopment Plans and Five -Year Implementation Plan. In light of the
Court's recent decision, staff will return to Council with recommendations and actions
necessary to comply with AB 1x 26. Staff intends to continue moving forward on
projects for which there are contracts that are unimpeded by the Court's decision.
The Supreme Court's decision is expected to have devastating impacts on communities
throughout the State by stripping California of its primary tool to produce affordable
housing, generate jobs, refurbish critical infrastructure, remediate brownfields, and
support smart growth and transit - oriented development. As a result, a coalition of cities
and redevelopment agencies is approaching State leaders to discuss clean -up
legislation that would allow affordable housing and economic development initiatives in
California to continue. Staff will closely monitor these efforts and their potential benefits
and impacts to Santa Monica.
go
Other Funds
Other major funds that are included in the Financial Status Update fall into two
categories: enterprise funds that operate with sufficient revenues to sustain necessary
operation and capital needs, and those funds that have a structural deficit where
ongoing revenues are not sufficient to cover ongoing expenditures.
Self- Sustaining Enterprise Funds
Enterprise funds that operate with sufficient revenues to sustain necessary operations
include:
• Resource Recovery Recycling
• Wastewater
• Water
These funds are not included in the update since they are in the process of undergoing
a rate analysis as part of current operational studies that will be completed in the next
year. Due to changes in the Resource Recovery Center construction project, the
Resource Recovery Recycling rate structure will now be considered as part of the Zero
Waste Strategic Plan currently being developed with projected completion in 2012. The
information presented in the Plan, including the results of the cost and rate analysis, will
be used as the basis for future operational enhancements and rate structure
adjustments. The drafting of a Sustainable Water Plan to assist the City in achieving its
adopted goal of being 100 percent water self- sufficient by the year 2020 will begin this
fiscal year and will be completed in the fall of 2012. The Plan includes an analysis of
water and wastewater rates and associated capital facility fees. These funds currently
have sufficient revenue to cover current operations but will be assessing their rate
structure based on implementation of the Zero Waste and Sustainable Water plans. A
financial status update will be included when the draft plans are presented to Council in
2012.
Funds Requiring Use of One -time Funds or General Fund Subsidies
In addition to the operations of the departments it directly funds, the General Fund is
responsible for a number of non - General funds that are intended to be self - supporting
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but which, due to policy decisions limiting revenue generation or a decrease in funding
from other sources, require General Fund subsidies in order to meet their operating and
capital needs. These funds, their financial health, and their adjusted impact on the
General Fund since the June 2011 forecast, are discussed below:
•
Airport: The Airport Fund, already forecast to receive $7.2 million in General
Fund loans through FY 2014 -15, is anticipated to require an additional $851,000
from the General Fund through FY 2012 -13. However, staff anticipates that
changes in the property lease rates at the Airport in 2015 will facilitate the
beginning of the repayment of the General Fund loan.
• Beach and Beach House: The Beach House Fund fared better than anticipated
in FY 2010 -11, due to increased event rentals, filming receipts, and parking
revenue. The additional fund balance of almost $1.0 million is anticipated to
result in a lower subsidy from the Beach Recreation Fund in FY 2011 -12 ($1.5
million versus budgeted $2.5 million). The Beach Recreation Fund, in addition to
benefiting from the decreased expenditures associated with the Beach House
subsidy, also finished FY 2010 -11 with a greater than anticipated fund balance
due to strong revenues from the use of the Beach parking lot and slower than
anticipated expenditures of capital improvement project funds. Ultimately, these
changes will positively impact the General Fund, whose subsidy to the Beach
Fund is expected to be approximately $1.4 million less than had been forecast
through FY 2015 -16.
• Big Blue Bus (BBB): The BBB Fund has a projected operating structural deficit
beginning in FY 2012 -13 as revenues are not sufficient to cover current
operations. The operating deficit is projected to be $1.8 million in FY 2012 -13,
growing to $6.6 million in FY 2015 -16. The BBB has been able to close its
operating structural deficits each year by using one -time funds; however, longer
term strategies to close the structural deficit are required.
• Cemetery: The Cemetery Fund will require a General Fund subsidy of
approximately $1.1 million through FY 2015 -16. In addition, the Cemetery still
owes the General Fund $4.5 million in operating subsidies loaned in previous
years. Revenue projections are conservative for the forecast period due to
unknown levels of business that will be generated by a full year's operation of the
mortuary. Projected Capital Improvement Program expenditures include only the
basic fleet, computer, and telecommunication annual expenditures and do not
take into consideration infrastructure improvements. Additionally, the fund
maintains no operating or capital reserves for unknown needs, suggesting that
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the General Fund subsidy will likely increase as needs arise. The City has
retained the services of Management Partners to review Cemetery operations
and present options for the long -term management of the property in late winter.
• Civic Auditorium: Due to ongoing negotiations for a public - private partnership, the
closure of the Civic Auditorium has been postponed six months to December
2012. The delay will provide the Civic Auditorium fund with an additional $0.5
million in net revenues, which will have the benefit of decreasing the General
Fund subsidy to the fund by the same amount over the five -year period. Staff will
continue to work with the Nederlander Company to determine the future
operations of the Civic Auditorium and will include any new assumptions and
impacts to the General Fund in future financial status updates.
• Pier: As a result of a one -time premium payment related to the transfer of the
Pacific Park lease to a new entity in FY 2010 -11, as well as the pacing of large
infrastructure capital improvements, the Pier Fund has decreased its fiscal
reliance on the General Fund by $0.4 million through FY 2015 -16. The Pier
Fund's master planning process, slated to begin in FY 2012 -13, will address the
future fiscal sustainability of the Pier and inform future financial status updates.
Midyear Budget Adjustments
At the budget midyear, staff reviews revenue receipts to date, recommends revenue
budget changes, and proposes adjustments in the budget expenditure projections as
necessary to most efficiently implement Council's priorities. This is also the opportunity
to make position changes related to reorganizations, new service requirements, or more
efficient service delivery. Proposed mid -year changes are balanced' against their impact
on the long -term financial projections to ensure that they do not exacerbate predicted
future structural deficits to unmanageable levels. The charts below summarize the
midyear revenue and expenditure adjustments.
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FY2011 -12 MIDYEAR BUDGET CHANGES - REVENUES (in millions)
FY2011 -12 MIDYEAR BUDGET CHANGES - OPERATING AND CAPITAL EXPENDITURES (in millions)
REVISED BUDGET
MIDYEAR
REVISED BUDGET
FUND
(As of October 31)
CHANGES
WITH MID YEAR
GENERAL (01)
$ 286.3
$ 2.2
$ 288.5
MISC GRANTS (20)
10.2
0.1
10.3
CITIZEN OPTION PUBLIC SAFETY (22)
0.0
0.1
0.1
RESOURCE RECOVERY & RECYCLING (27)
22.6
(0.1)
22.5
CEMETERY (37)
1.6
(0.4)
1.2
BIG BLUE BUS (41)
76.0
7.0
83.0
OTHER FUNDS
193.2
-
193.2
TOTAL ALL FUNDS
$ 589.8
$ 9,0
$ 598.8
FY2011 -12 MIDYEAR BUDGET CHANGES - OPERATING AND CAPITAL EXPENDITURES (in millions)
*Difference of $50 million between revenues and expenditures is sustainable as capital improvement project costs are
expended over a longer period of time and may use one -time funds.
Revenue Adjustments - General Fund
Revenues are expected to exceed annual budget projections by approximately $2.2
million, due in large part to increases in Transient Occupancy Tax, Business License
Tax, and Property Tax, offset by decreases related to State triggers and reduced
parking citation revenue due to the elimination of time- limited parking at Parking
Structures 7 & 8 and continued staffing shortages. Revenue sources recommended for
adjustment are identified in Attachment Al.
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REVISED BUDGET
MIDYEAR
REVISED BUDGET
FUND
(As of October 31)
CHANGES
WITH MIDYEAR
GENERAL (01) $
276.8
$ (0.2)
$ 276.6
EARTHQUAKE REDEVELOPMENT (17)
99.2
2.3
101.5
MISC GRANTS (20)
10.8
0.2
11.0
CITIZEN OPTION FOR PUBLIC SAFETY (22)
0.1
0.1
0.2
WATER (25)
20.5
0.4
20.9
RESOURCE RECOVERY & RECYCLING (27)
23.9
0.6
24.5
PIER (30)
4.4
0.4
4.8
CEMETERY (37)
1.8
(0.2)
1.6
BIG BLUE BUS (41)
84.5
5.7
90.2
INFO TECH REPLACEMENT AND SERVICES (55)
2.1
(0.2)
1.9
OTHER FUNDS
115.1
(0.1)
115,0
TOTAL ALL FUNDS $
639.2
$ 9,0
$ 648.2
*Difference of $50 million between revenues and expenditures is sustainable as capital improvement project costs are
expended over a longer period of time and may use one -time funds.
Revenue Adjustments - General Fund
Revenues are expected to exceed annual budget projections by approximately $2.2
million, due in large part to increases in Transient Occupancy Tax, Business License
Tax, and Property Tax, offset by decreases related to State triggers and reduced
parking citation revenue due to the elimination of time- limited parking at Parking
Structures 7 & 8 and continued staffing shortages. Revenue sources recommended for
adjustment are identified in Attachment Al.
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Revenue Adjustments — Other Funds
Major revenue adjustments in other funds include:
• The Miscellaneous Grants revenue will increase by $140,882 to reflect new
grants, changes to existing grants, and timing changes in the receipt of grant
revenues.
• The Citizen Option for Public Safety revenue will increase by $120,543 to reflect
approved grant funding for law enforcement expenses.
• The Cemetery Fund revenues will decrease by $0.4 million due to less than
anticipated lot sales, mausoleum sales, miscellaneous sales, and mortuary
services.
• The Big Blue Bus revenues will increase by $6.6 million to reflect additional
capital revenues for bus replacement, bus amenities, and bus components.
All revenue sources recommended for adjustment are identified in Attachment Al.
Expenditure and Balance Sheet Adjustments — General Fund
Net appropriations for the General Fund decrease by $0.2 million at Midyear. The
major adjustments include $2.6 million in savings generated from the CalPERS
paydown, COLA adjustments, and public safety employee retirement contributions,
primarily offset by equity adjustments and appropriation of $1.8 million for various
capital projects funded by the release of a fund balance assignment, and
reappropriation of prior year funds. All expenditure changes recommended for
adjustment are identified in Attachment A2.
Expenditure Adjustments — Other Funds
Proposed appropriations at Midyear in Other Funds total $3.7 million. Included in the
request are the following:
An increase of $2.3 million for debt financing completed in late June 2011 in the
Earthquake Redevelopment Fund.
• An increase of $0.6 million in the Resource Recovery Recycling Fund, primarily
for additional waste processing and disposal costs.
• All expenditure changes recommended for adjustment are identified in
Attachment A2.
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Human Resource Changes
The City is continuously reviewing its operations to ensure efficient and effective
delivery of City services to the community. The human resource changes detailed in
Attachment B2 reflect reorganizations in numerous departments, such as a significant
reorganization of the Big Blue Bus and moving Pier Management to the City Manager's
Office. Other human resource changes in Community and Cultural Services, Finance,
Fire, Police, and Public Works will also better align department staff with the delivery of
services. The changes result in no net impact to the number of full time equivalent
positions citywide. The departments proposed to have an increase or decrease in total
positions are:
• A reduction of 4 Full Time equivalent (FTE) positions at the Cemetery;
• 1 additional FTE in the City Manager's Office to support Pier Management;
1 additional FTE in Planning and Community Development to staff a centralized
cashier; and
• 2 additional FTEs in Police for Airport Service Officers
Fire Safety Officer Assignment Fee
Santa Monica Municipal Code Chapter 2.72 provides for establishing fees for services
via adoption of a resolution by City Council. The City has consistently maintained a
policy to charge the full cost of services provided by City staff when those services
benefit individual users, rather than the community as a whole, except at times when
Council determines that it is in the best interest of the community to charge lower fees.
At times and places that people gather, whether it be for entertainment, festivals,
contests, or other purposes, the Fire Marshall may require the organizer of such event
to retain a Fire Services Officer in order to ensure that the activity will occur in a safe
manner, free from hazards, and with accessible ingress and egress. The attached
resolution would set the rate for these services at $125 per hour, for a minimum of four
hours, plus a $50 vehicle fee, which achieves cost recovery and is consistent with
neighboring jurisdictions.
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While staff is recommending that Council adopt the attached resolution to establish this
fee, it is important to note that this fee is not new to the community. Per the City's past
MOUs with the Santa Monica Firefighters Local 1109 IAFF (Section 3.07), Fire Safety
Officers have been paid directly for these services by event planners and promoters at a
rate of approximately $72 per hour for an eight -hour minimum. The City's current MOU
with Santa Monica Firefighters Local 1109 IAFF provides for this fee to be incorporated
and managed consistent with similar fees for services. The fee resolution is included as
Attachment C.
Financial Impacts & Budget Actions
The budget impact related to the adoption of the midyear changes is detailed in
Attachments Al and A2 of this report.
Prepared by: Budget Staff
Acting Director of Finance
Forwarded to Council:
Rod Gould
City Manager
Attachments:
Al: Proposed FY2011 -12 Mid -Year Revenue Changes
A2: Proposed FY2011 -12 Mid -Year Expenditure and Balance Sheet Changes
B1: Resolution Establishing New Classification and Adopting Salary Rates for Certain
Positions
132: Position and Classification Changes
C: Resolution establishing the Fire Safety Officer Assignments Fee in the Fire
Department
D: Fund Balance Classification
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Council Meeting 1/10/12
ATTACHM ENT Al
INCREASE/
DEPT/ DIVISION (DECREASE)
DESCRIPTION
Community and Cultural Services/ Community
158,269
Adjustments reflect new soccer league ($130,435) and Santa
Recreation
Monica High School field ($27,834) fees.
Information Systems/ Administration
(200,000)
Adjustment rectifies incorrect adopted budget for Dark Fiber
Lease.
Police / Administrative Services
(1,325,000)
Reduction results primarily from the issuance of fewer parking
citations due to changes in parking operations for Parking
'
Structures 7 & 8 and staffing shortages.
Public Works / Engineering
(405,004)
Adjustment reflects updated enterprise fund reimbursements to
the General Fund.
Library/ Administration and Facilities
(175,000)
Revenue decrease due to State budget cuts.
Finance / Business and Revenue Operations /
566,156
While the budget had assumed no change in assessed property
Property Taxes - Secured
values of secured properties in FY 2011 -12, the unanticipated
2.9% increase suggests that the real estate market in the City is
recovering sooner than expected. These increases are partially
offset by decreased assumptions for unsecured taxes and
statutory pass - throughs from the Redevelopment Agency.
Finance / Business and Revenue Operations /
(354,622)
Adjustment based on year to date tracking of revenues primarily
Utility Users Tax
reflects lower than anticipated revenues for electricity service.
Finance / Business and Revenue Operations /
1,200,000
The increase in business license tax revenue reflects the improving
Business License Tax
economy as businesses reported a net increase in gross receipts.
In addition, several large new businesses began operations in the
City during the year. Finally, taxes from businesses operating in
the re- opened Santa Monica Place were more than anticipated.
Finance / Business and Revenue Operations /
1,388,000
Tourism has extended its significant rebound over the last one and
Transient Occupancy Tax
a half years after two years of declining revenues. The net year -to-
date increase in occupancy and room rates is approximately 10 %,
nearly twice the budgeted assumption.
Finance / Business and Revenue Operations /
(192,500)
The reduction is due to the suspension of Vehicle License Fee
Vehicle License Fees
payments to local governments.
Finance / Business and Revenue Operations /
200,000
The increase reflects a higher investable fund balance, partially
Interest Deposit & Investment
_._. _..........
offset by lower than anticipated interest rates.
Finance / Business and Revenue Operations /
1,342,141
Discount from prepaying the City's CalPERS obligation.
Discount on PERS Prepayment
TOTAL GENERAL FUND CHANGES
$ 2,202,440
Page 1 of 2
Council Meeting 1/10/12
ATTACHM E NT Al
City Manager/ Office of Sustainability and the
26,257
Adjustment to reflect Used Oil Payment Program grant receipt.
Environment
due to a delay in the soil remediation project.
Public Works / Resource Recovery and Recycling
36,450
Adjustment to reflect Tire Derived Product Grant receipt.
Public Works / Engineering
460490
Adjustments due to changes in the timing of the funding for the
Bus Replacement
California Incline project (- $1,007,450) and the additional funds
Big Blue Bus / Capital Improvement Projects /
478,920
for the Bike Transit Center ($1,053,940).
Library/ Administration and Facilities
.9,185
Adjustment reflects adjustments to grant funding.
Fire / Administration
22,500
Adjustment to reflect Fire Heritage Grant receipt.
TOTAL MISCELLANEOUS GRANT CHANGES
$ 140,882
Public safety /CapitallmprovementProject/
120, 543Adjustment reflects approved grant funding for law enforcement ..
COPS Grant
- expenses.
TOTAL PUBLIC SAFETY FUND
$ 120,543
Public Works / Resource Recovery and Recycling
` (67,641)
Adjustments due to decreased revenue resulting from the City
Transfer Station closure (- $404,041) and increased revenue from
facility use ($336,400).
TOTAL. RES. RECOV. & REC. FUND CHANGES
$ ;(67,641)
Ar NEW
'000 mm
N a+.
..
City Manager/ Airport
(3,971,471)
Adjustment reflects division move from the City Manager's Office
(Division 203) to Public Works (Division 431).
Public Works / Airport
3,971,471
Adjustment reflects division move from the City Manager's Office
(Division 203) to Public Works (Division 431).
TOTAL AIRPORT FUND CHANGES
$
� a
Pubhc Works / Cemetery
(387,100)
Adjustments reflect reduced revenue for mortuary services
(- $267,500) and casket, vault, and flower sales (- $119,600).
Big Blue Bus/ Transit Programs
(100,000)
Adjustment due to loss of revenue from 402 Colorado lot parking
due to a delay in the soil remediation project.
Big Blue Bus /Transit Maintenance
(650,000)
Adjustment due to lower than projected bus advertising revenue.
Big Blue Bus/ Capital Improvement Projects /
6,345,053
Adjustment for reimbursement received for additional buses
Bus Replacement
purchased and delivered.
Big Blue Bus / Capital Improvement Projects /
478,920
Adjustment for reimbursement received for additional bus
Bus Components
components purchased and delivered.
Big Blue Bus / Capital Improvement Projects /
912,720
Adjustment for reimbursement received for additional bus stop
Bus Stop Amenities
amenities purchased and delivered.
Page 2 of 2
Council Meeting 1/10/12
ATTACHMENT A2
FY.2Q1 1 I�IIDI'EAR.EXPENQITUR
HAN6t
FUND DEPT DIVISION
MY INCREASE/
DESCRIPTION
(DECREASE)
,GfJ4ERAU1 FUND
(01)
01 City Council
30,088
Expenditure adjustment to appropriate to Council contingency
funds to the correct year and set aside amount for early
childhood development programs.
01 City Manager
52,276
Expenditure increase reflects position - related changes.
01 City Manager/ Office of Emergency
(42 1)
Expenditure decrease reflects 6 months of 5 percent Police
Management
Officer health benefit contributions.
01 Planning and Community Development/
31,305
Expenditure increase for Q -Matic queuing system cashier
jBuilding and Safety
($1,200), centralized cashier ($30,105).
01 Community and Cultural Services /
95,501
Expenditure increase for increased league fees ($59,907) and
,Community Recreation
adjustments to Staff Assistant positions ($35,594).
01 Community and Cultural Services /
40,000
Expenditure increase for Homeless Management Information
" Human Services
System (HM IS).
01 ,Community and Cultural Services /
48,501
Expenditure increase for position changes.
Admin and Planning Services
01 Community and Cultural Services /
15,730
Expenditure increase for position changes.
Cultural Affairs
01 Finance / Business and Revenue Ops
28,990
Expenditure increase for position changes. -
01 Finance /Administration
(63,721)
Expenditure decrease for position changes.
01 Finance / Budget-
84,337
Expenditure increase for position changes.
01 Public Works /Street Maintenance
114,310
Expenditure increase due to increased transfer station fees.
01 Public Works /Administration
113,780
Expenditure increase for position changes.
01 Public Works / Architectural Services
(108,825)
Expenditure decrease for position changes.
01 Public Works / Custodial Services
103,424
Expenditure increase for position changes.
01 General Government/ Capital
11846,718
Expenditure increase to appropriate assignment for office
Improvement Project /Tenant
improvements to Tenant Improvement Capital Improvement
';.Improvements
Project.
01 General Government / Capital
(200,000)
Expenditure decrease to transfer unneeded PCH signage funds to
Improvement Project / Coastal
Beach Bike Path Signage Project in the Beach Fund.
Circulation and Parking Imp
01 Records and Election Services / Support
38,238
Expenditure increase to appropriate funds fora Data
Services
Management System.
Page 1 of 5
Council Meeting 1/10/12
FUND DEPT/ DIVISION MY INCREASE/ DESCRIPTION
(DECREASE)
ATTACHMENT A2
01 '.. Housing and Economic Development / 298,325 Expenditure increase for residential repair program unspent
,Housing funds ($300,000) and position related changes (- $1,675). '....
01 Housing and Economic Development / 181,900 Expenditure increase for FY 2010 -11 insurance costs that were
Admin and Redevelopment not charged in that fiscal year.
01 Fire / Administration 25,941 Expenditure increase reflects costs to replace TeleStaff server in
CERP ($13,750) and position changes ($12,191).
01 Police/ Animal Control 37,674 Expenditure increase for position changes.
01 Police/ Special Enforcement
01 Police /Various Divisions
01 Non Departmental/ All Other
01 Non Departmental/ Interfund
'.Transactions
01 All Departments
05. Public Works/ Water Resources
TOTAL
11 Beach Recreation / Capital Improvement
Project/ Beach Signage and Wayfinding
Non Departmental/ Interfund
11 All Divisions
12 '.. All Divisions
TOTAL HOUSING FUNI
increase for position changes.
(70,208) Expenditure decrease to reflect 6 months of 5 percent Police
Officer health benefit contributions.
122,987 Expenditure increase to add debt funding for 2011 Parking
Structure 6 Bonds and adjust previously budgeted debt service
funding for 2002 Public Safety Facility Bonds. -
(598,893) Expenditure decrease to adjust for previously budgeted Pier and
Civic Auditorium Interfund Transfers and transfer to the Beach
Fund.
(2,564,670) Expenditure decrease reflecting savings from PERS rate
reduction, COLA adjustment, and safety retirement
contributions.
, (225,595) _.
20,915
increase for position changes.
Expenditure increase to transfer funding for Beach Signage
Wayfinding Project.
(200,000) Interfund transfer in from the General Fund for the Beach Bike
Path Signage Project.
(3,365) Expenditure decrease reflecting savings due to PERS rate
reduction.
(3,365)
(2,924) Expenditure decrease reflecting savings due to PERS rate
reduction.
(2,924)
Page 2 of 5
Council Meeting 1/10/12
ATTACHMENT A2
FUND DEPT /DIVISION:. MY INCREASE 'DESCRIPTION
(DECREASE)
-� ' '' EARTHQUAKE= FEEREUEhOPNLENT =FUND_(17):;?..
17 Non Departmental/ All Other 2,262,413 Expenditure increae to adjust for previously unbudgeted debt
'.Transactions funding.
`TOTAL EARTHQUAKE FUND CHANGESI
2,262,413
. MISGELLAfS>
C±US Gi#ANTS;FUND
(2Q)
20 ,City Manager's Office / Office of
26,257
Expenditure increase reflects CalRecycle FY 2011 -12 Used Oil
Sustainability and the Environment
Payment Program Grant receipt.
20 Library/ Administration and Facilities
9,185
Expenditure increase reflects adjustment for grant funding.
20 Fire / Administration
106,206
Expenditure increase reflects State Homeland Security ($83,706)
and Fire Heritage ($22,500) grants receipt.
20 Miscellenous Grants Fund /Streets,
36,450
Expenditure ad! stment reflects new grant.
Traffc Control, Parking / Calrecycle Tire
'.. Derived Grant
TOTAL MISC GRANTS FUNDCHANGES
178,098
CITIZENSOPTION,FO}2
PUBLIC
SAFETY;FUND
22 Police / Administrative Services
124,304
Expenditure increase for approved 2010 COPS front -line law
enforcement expenses.
TOTAL PUBLICSAFETY FUNDCHANGES
- 124,304
BEACH HOUSE
e_T ., .. ...
(2Q� "
24 All Divisions
(3,808)
Expenditure decrease due to savings from PERS rate reduction.
TOTAL BEACH HOUSE FUND CHANGES
(3,808)
WAlEH!FUIYD.(25)
25 Public Works / Water
376,786
Expenditure revisions due to imported water charges
($1,241,080) and deferred City of Los Angeles payment
25 All Divisions
(18,933)
Expenditure decrease due to savings from PERS rate reduction.
" TOTAL WATER FUND CHANGES
':.357,853
}2ESOURGE,RECOVERY
ANO
RECYCI
27 Public Works / Resource Recovery and
650,643
Expenditure increae due to additional SCD waste processing
Recycling
($288,000), disposal costs ($235,871), and staff changes
',.
($126,772).
27 All Divisions
(26,258)
Expenditure decrease due to savings from PERS rate reduction.
TOTALRRR
.'624,3851
Page 3 of 5
Council Meeting 1/10/12 ATTACHMENTA2
FUND DEPT/ DIVISION
MY INCREASE/
_: :.DESCRIPTION
(DECREASE)
"
iNASTEWAT R
FUND:(31j �..
31
30 Housing and Economic Development/
(1,545,529)
Supplies and Expenses budget moving from Housing and
Pier Division
TOTAL WASTEWATER FUND CHANGES
Economic Development to Office of Pier Management.
30 City Manager / Office of Pier
1,973,067
Supplies and Expenses budget moving from Housing and
',Management
FUNS
Economic Development to City Manager's Office of Pier
'All Divisions
(8,315)
Management ($1,545,529), a correction to reflect
TOTAL CIVIC FUND CHANGES
reimbursement for Police Pier Patrol ($304,292) and position
related changes ($123,246).
30 All Divisions
(4,551)
Expenditure decrease due to savings from PERS rate reduction.
Page 4 of 5
TOTAL PIER FUND CHANGES1
422,987
"
iNASTEWAT R
FUND:(31j �..
31
All Divisions
(7,220)
Expenditure decrease due to savings from PERS rate reduction.
TOTAL WASTEWATER FUND CHANGES
(7,220)
CI3/ICAUDITQRI;UM
FUNS
31
'All Divisions
(8,315)
Expenditure decrease due to savings from PERS rate reduction.
TOTAL CIVIC FUND CHANGES
,. (8,315)
AIFpORT,FUND..t33)
.
33
City Manager /Airport
(4,181,647)
Expenditure adjustment reflects Airport move from City
Manager's Office to Public Works ($4,124,838) and position
related changes (- $56,810).
33
Public Works / Airport
4,144,837
Expenditure adjustment reflects increased overtime for Airport
patrol ($20,000) and Airport move from City Manager's Office to
',.
Public Works ($4,124,838).
33
All Divisions
(4,890)
Expenditure decrease due to savings from PERS rate reduction.
Page 4 of 5
Council Meeting 1/10/12 - ATTACHMENTA2
FY 2011 =12^ MIDYEAR BAUIIYCE SHEET CHANGES „'" "
mH
01 : Balance Sheet Transfer in 1,846,718 Reflects release of assignment for City Hall Renovation.
Page 5 of 5
Council Meeting 1/10/12
Department
City Manager
City Manager
City Manager
City Manager
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
POSITION AND CLASSIFICATION CHANGES FY 2011 -12
Division Delete (FTE)
Community & 1.0 Permanent Assistant to ( *(I
Governmental Governmental the City Manager
Relations
1
Airport 1.O� Permanent Airport
Administrator
!Office of Pier
}Management
`Office of Pier
;Management
Administration and
!Budget
4
[Administration and
j Budget
Administration and
I Budget
!Administration and
;Budget
!Administration and
(Budget
!Administration and
!Budget
!Administration and
Budget
Budget
Finance 11 lAdministration
and
and
and
1.01 Permanent Director of
Finance /City Treasurer
_1
1.O�Permanent Assistant
Director of Finance
1.01 Permanent Budget
,Administrator
2.01 Permanent Principal
1.01 Permanent Contracts
!Coordinator
___
1.0; Permanent Executive
;Administrative Assistant
1.0jPermanent Purchasing
!Services Manager
2.O1Permanent Senior Buyer
1.O1Permanent Buyer .
1.01 Permanent Staff
ATTACHMENT B2
id (FTEI
footnote below)
1.01Permanent Pier
!Manager
1.0, Permanent Staff
!Assistant III
1.01 Permanent Director of
Finance /City Treasurer
1.0: Permanent Assistant
Director of Finance
1.0, Permanent Contracts
Coordinator
1.0`Permanent Executive
Administrative Assistant
1.0 Permanent Purchasing
Services Manager
Financial Status Update and Midyear FY2011 -13 Budget Page 1 of 7
Council Meeting 1/10/12
ATTACHMENT B2
POSITION AND CLASSIFICATION
CHANGES FY 2011 -12
Department
Division j
Delete (FIE)
Add (FTE) }
Finance
Administration
200ermanent Senior Buyer!
Finance
!Administration j
1.01 Permanent Buyer
'Finance
;Budget
1.O Permanent Budget I
Manager
Finance
Budget
2.0 Permanent Principal
j
(
Budget Analyst
iFinance
!Budget
2.0 Permanent Senior
_
)
} Budget Analyst
Finance
;Budget
1.0 Permanent Staff
Assistant III
Information
Web Development
1.0 Permanent Internet j
1.0 Permanent Internet
Systems
Developer - GIS j
IDeveloper
Planning and
Building and Safety (
i
_
1.01 Permanent Revenue
Community
!
Operations Assistant II
Development
Police
(Operations (
8.01 Permanent Community i
8.0I Permanent Community
Services Officer II
Services Officer
;Police
!Special Enforcement I
1.0 Permanent Lead Airport
Services Officer
!Police
Special Enforcement)
1.O� Permanent Airport
Services Officer
Police
Special Enforcement j
1.0 Permanent Lead Traffic '
1.0 Permanent Traffic
(Services Officer
Services Supervisor
Fire
Administration
1.01 Permanent Fire Captain
((Vehicle Maintenance I
i
;Coordinator)
i
=Fire
!Administration
i
1.OjPermanent Fire Captain
j
!(Paramedic Coordinator)1
Fire
!Administration (
t
�
1.01 Permanent EMS
;Coordinator
Fire
Fire
Administration 1.0;Permanent
Communications Center
Supervisor - Fire
I (
Administration i 8.0 Permanent
!Operator - Fire
Administration 1.011 Permanent Staff
!Assistant III
Financial Status Update and Midyear FY2011 -13 Budget Page 2 of 7
Council.Meeting 1/10/12
ATTACHMENT B2
Financial Status Update and Midyear FY2011 -13 Budget Page 3 of 7
POSITION AND CLASSIFICATION CHANGES FY 2011 -12
Department
Division
Delete (FTE)
Add (FTE)
Fire
;Support Services
I 1.0(Permanent Fire Captain
,
!(Vehicle Maintenance
Coordinator)
E
;Fire
I
ISupport Services
�
; 1.01Permanent Fire Captain
(Paramedic Coordinator)
Fire
!Support Services
1.0 Permanent EMS
Coordinator
.Fire
ISupport Services
1.0 Permanent
f
j
(Communications Center
(Supervisor - Fire
i '
j
E
,Fire
Support Services
8.03Permanent
;Communications
'Operator - Fire
Fire
Support Services
1.0' Permanent Staff
Assistant III
;Community &
Public Landscape
1.0 Permanent Public
1.0 Permanent Parks
;Cultural Services
`Landscape Supervisor i E
Maintenance Supervisor
Community &
;Public Landscape
4.0` Permanent Parks
4.0 Permanent Parks
Cultural Services
'Operations Supervisor
Maintenance Supervisor
;Community and
!Public Landscape
4.01 Permanent Parks i
4.01 Permanent
Cultural Services
!Operations Crew Leader!
!Maintenance Crew
-
Leader
Library
I Information
1.0 Permanent Circulation
':Management
Supervisor
[
Library
;Information
1.01 Permanent Library
Management
lAssistant
Library
;Information
8.0' Permanent Staff
!Management
j 'Assistant II
Library
Information
1.O10ermanent Staff
!Management
!
(Assistant II
Library
;Reference Services
R
1.0{ Permanent Circulation
!Supervisor
Library
Reference Services
j
1.O1Permanent Library
C i
:Assistant
Library
Reference Services
_
8.0: Permanent Staff
'Assistant II
Library
!Reference Services
1.0i Permanent Staff !
!
jAssistant II
Public Works
lAdministrative
1.011 Permanent Principal
1.01 Permanent Principal
Services
( Public Works Analyst
Administrative Analyst
Public Works
Civil Engineering
1.0 Permanent Public I
Works Insoector
Financial Status Update and Midyear FY2011 -13 Budget Page 3 of 7
Council Meeting 1/10/12 ATTACHMENT B2
POSITION AND CLASSIFICATION CHANGES FY 2011 -12
Department
Division
Delete (FTE) I
Add (FTE)
Public Works
iStreet Maintenance
-.
1.0;t anent Public
j
?Works Inspector j
Public Works
jResource Recovery
2.O Permanent Transfer (
2.0i Permanent Equipment
& Recycling
Station Assistant
;Operator I
Public Works
lWater Resources
3.O Permanent Water j
3.01' Permanent Water Crew
Leader E
'Leader i
;Public Works
;Cemetery
1.0'Permanent Irrigation
Technician
j
Public Works
!Cemetery
3.0 Permanent Cemetery
Maintenance Worker
Big Blue Bus
;Transit Executive
1.0 Permanent Assistant to
the Director of Transit
,Services
'
Big Blue Bus
iTransit Programs
1.O Permanent Transit
E
Programs and Business
Services Manager I
F
F
Big Blue Bus
;Transit Programs
1.0 Permanent Senior
�
Administrative Analyst -
Transit Grants '
Big Blue Bus
Transit Programs
2.0' Permanent Senior
Administrative Analyst
Big Blue Bus
Transit Programs
2.O Permanent Senior
Transit Programs
Analyst
Big Blue Bus
'Transit Programs
1.0; Permanent Fiscal Staff
i
i
IAssistant III
3
Big Blue Bus
Transit Programs
2.O Permanent Fiscal Staff
EAssistant II
__
Big Blue Bus
`Transit Pro rams
g
1.OiPermanent Transit
Systems Technician
Big Blue Bus
iTransit Programs
1.01 Permanent Staff
j (
jAssistant III
{
Big Blue Bus
iTransit Finance and
1.01 Permanent Transit
Grants
;Finance and Grants
j!Manager
Big Blue Bus
Transit Finance and
1.O1Permanent Senior
Grants
`Administrative Analyst
{
Transit Grants
Big Blue Bus
'Transit Finance and
2.0 Permanent Senior
(Grants
Administrative Analyst j
Big Blue Bus
!Transit Finance and
1.01 Permanent Fiscal Staff
;Grants
Assistant III
Big Blue Bus
Transit Finance and
i �
Staff
2.O � Permanent Fiscal Sta
;Grants
;Assistant II
Big Blue Bus
;Transit Finance and 1
j
1.0 Permanent Staff
`Grants
i
Assistant III
Financial Status Update and Midyear FY2011 -13 Budget Page 4 of 7
Council Meeting 1/10/12 ATTACHMENT B2
POSITION AND CLASSIFICATION CHANGES FY 2011 -12
Big Blue Bus
Big Blue Bus
Big Blue Bus
Big Blue Bus
Big Blue Bus
Q�
Big Blue Bus
Big Blue Bus
Big Blue Bus
Transit Customer
Relations
Transit Customer
Relations
Transit Customer
Relations
Transit Customer
Relations
Transit Customer
Relations
Transit Customer
Relations
Transit Customer
Relations
Transit Customer
Relations
Transit Government
and Community
Relations
Transit Government
and Community
Relations
Transit Government
and Community
Relations
Transit Government
and Community
Relations
Transit Government
and Community
Relations
isit Government
Community
1.0 Permanent Transit
Customer Relations
Administrator
1.0 1Permanent Customer
!Services Supervisor
1.O Permanent Marketing
land Public Information
Coordinator
1.01 Permanent Advertising
!Coordinator
1.011-imited -Term
;Administrative Analyst-
1.01 Permanent
(Administrative Staff
5.31 Permanent Customer
Service Assistant
1.0' Permanent Staff
!Assistant III
1.0 Permanent Transit
Government and
Community Relations
:Manager
1.01 Permanent Transit
Government Relations
Officer
1.0i Permanent Transit
[Community Relations
:Officer
1.01 Permanent Customer
jService Supervisor
5.31 Permanent Customer
,Service Assistant
Community Relations
Coordinator
Financial Status Update and Midyear FY2011 -13 Budget Page 5 of 7
Council Meeting 1/10/12 ATTACHMENT B2
POSITION AND CLASSIFICATION CHANGES FY 2011 -12
Department j Division Delete (FTE)
Add (FTE
Big Blue Bus !Transit Government. 1.0! Permanent Transit
and Community
'Relations
Big Blue Bus !Transit Government
!and Community
Relations
Big Blue Bus ITransit Government j
and Community
Relations
i
Big Blue Bus Transit Maintenance
Blue Bus
Big Blue Bus
i Blue Bus
Transit Services
Transit Services
Services
Services
Services
Services
Operations
Operations
Transit Operations
1.0i Permanent Motor Coach
;Services and Facilities
Maintenance Supervisor
i
1.Oi Permanent Transit
Services Manager
1.0 Permanent Transit
Services Officer
1.6 1Permanent Senior
!Transit Programs
1,Analyst
1.0 Permanent Senior
AAdminstrative Analyst -
JTransit Services
3.01 Permanent Motor Coach
(Operator Training
!Coordinator
3.0I Permanent Transit
,Operations Assistant
3.O1 Permanent Staff
!Assistant III
6.01 Permanent Motor Coach
Operator Supervisor
5.4 Permanent Motor Coach
Coordinator
1.0! Permanent
;Administrative Staff
1.01 Permanent Staff
£Assistant III
Facilities
e Supervisor
1.01 Permanent Transit
!Operations Manager
1.O Permanent Senior
Administrative Analyst -
Transit Operations
3.0 Permanent Senior
ITransit Programs
Analyst
1.O Per Transit
;Systems Technician
Financial Status Update and Midyear FY2011 -13 Budget Page 6 of 7
Council Meeting 1/10/12 ATTACHMENT B2
POSITION AND CLASSIFICATION CHANGES FY 2011 -12
Big Blue Bus
!Transit Operations j
1 3.0 Permanent Motor Coach
[
Operator Training
Coordinator
Big Blue Bus
jTransit Operations
3.0 Permanent Transit
Operations Assistant
Big Blue Bus
'Transit Operations
3.0 Permanent Staff
(Assistant III
Big Blue Bus
;Transit Operations (
17.0 Permanent Motor
!Coach Operator
!Supervisor
Big Blue Bus
!Transit Operations
a
275.4 Permanent Motor Coach
I Operator
Big Blue Bus
jTransit Safety and
1.0 Permanent Transit
;Security
Safety and Security
3Officer
Big Blue Bus
,Transit Safety and
1.0 Permanent Transit
�Security
Safety and Security
jCoordinator
j
Big Blue Bus
;Transit Safety and
2.0 Permanent Staff
;Security
Assistant II
Big Blue Bus
;Transit Safety and
1.03 Permanent Transit
Training
,Safety and Training
'Administrator
Big lue Bus
g
; < Transit Safety and
1.01Transit Safety and
;Training
Security Coordinator
Big Blue Bus
Transit Safety and
2.01Staff Assistant II
Training
j
Housing and
iHousing Services
1.0 Permanent Housing
1.01 Permanent Technical
Economic
Application Assistant
;Staff Assistant
Development
Housing and
!Housing Services
1.01Permanent Senior
i 1.01 Permanent Housing
Economic
Housing Specialist
Specialist
Development
Total] 405.7[ Total; 404.7]
" Addition of 1
permanent Deputy City
Manager — Special
Projects adopted on
10/25/11
Adjusted Total! 405.71 j 40537;
Financial Status Update and Midyear FY2011 -13 Budget Page 7 of 7
ATTACHMENT D
Fund Balance Classification
Policy and Definitions
The June 30, 2011 General Fund fund balance structure and terminology reflects new reporting requirements,
as prescribed by the Governmental Accounting Standard Board (GASB). Anticipating this change in standard,
the City formally adopted a fund balance policy as part of the Fiscal Policies adopted with the FY 2011 -13
Biennial Budget, as shown below:
Fiscal Policies — Fund Balance Classifications
The City's fund balance is made of the following components:
• Non - spendable fund balance typically includes inventories, prepaid items and other items, that by
definition cannot be appropriated
• The restricted fund balance category includes amounts that can be used only for the
specific purposes stipulated by constitution, external resource providers, or through enabling
legislations
• The committed fund balance classification includes amounts that can be used only for the specific
purposes determined by a formal action of the City Council. The City Council has authority to
establish, modify, or rescind a fund balance commitment.
• Amounts in the assigned fund balance classification are intended to be used by the City for specific
purposes but do not meet the criteria to be classified as restricted or committed. The City Manager
or designee has the authority to establish, modify or rescind a fund balance assignment.
• Unassigned fund balance is the residual classification for the City's funds and includes all
spendable amounts not contained in the other classifications.
Definition of the New Classifications
The presentation of fund balance into five classifications, from the previous three classifications, is designed to
reflect the extent to which the City is bound by limitations placed on the use of resources. The prior
classifications were based on whether or not funds were available for appropriation.
New Classifications
Classification Definition
Nonspendable Funds inherently nonspendable because of Endowment; inventory; prepaid items; long -term
form portions of loans receivable; non - financial assets held
for resale.
Restricted Externally- imposed constraints apply to use of Unspent bond or grant proceeds restricted to specific
funds. uses; tax increments; funds authorized by voters or
non -local legislation for specific ouroose.
Committed Internally - imposed constraints apply to use of Contractual commitments; funds that issuer's
funds. Constrained by highest government government authority authorized to use for specific
decision - making authority, as defined by purpose.
government entity.
Assigned Intended use expressed, but neither restricted Budget carryover for specific item; appropriation of
nor committed. existing fund balance for specific use.
Unassigned Not constrained in any way. Rainy -day and stabilization funds.
Old Classifications
Classification Definition
Reserved Not available for appropriation. Cannot be spent due to form, time constraint, or external limitations.
Unreserved Available for appropriation. Can be optionally categorized as designated or undesignated.
Designated Available for appropriation. Internally- imposed limitations.
Undesiqnated Available for appropriation. No limitations.
Implementation
As of June 30, 2011, $195.3 million of the City's General Fund Balance of $223 million falls into the assigned
or unassigned classification, while the remaining $27.8 million is classified as nonspendable, restricted, or
committed.
The nonspendable, restricted or committed components of fund balance represent advances from the General
Fund to other funds of $26.6 million, a commitment to the SMMUSD Education Foundation of $250,000, and
another $460,000 commitment for affordable overnight accommodations.
The $223.0 million is allocated as follows:
Total Nonspendable 26,555,150
26, 555,150
Restricted Funds restricted for specific
use by external constraints
Civic Center Bonds $273,446 $273,446 Bond proceeds and interest;
restricted for Civic Center area
Consumer Protection Funds
Mall Assessment 36,762
Total Restricted
503,645
funds restricted for consumer
36,762 Mall Assessment revenues
restricted for future debt
service
503,645
Fiscal Year
Adjustments Fiscal Year
As of 6129111
As of 6130/11
Nonspendable
Funds inherently
nonspendable because of
form
Advances to Airport
$9,016,740
$9,016,740
General Fund loans to Airport
Advances to DT RDA
4,920,287
4,920,287
General Fund loans to
Downtown Redevelopment
.__.. _.. - -— - - - - - -- - -- - -- -
Project Fund
- --
Advances to Cemetery
4,481,160
4,481,160
General Fund loans to
Cemetery
Advances to Beach
3,842,973
3,842,973
General Fund loans to Beach
Fund
Advances to Civic
62,081
62,081
General Fund-loans—to Civic
Auditorium Fund
Notes Receivable
2,490,653
2,490,653
General Fund loans to
unrelated parties
Prepaids and Inventory
1,7411256
1,741,256
Prepaid items and inventory
Total Nonspendable 26,555,150
26, 555,150
Restricted Funds restricted for specific
use by external constraints
Civic Center Bonds $273,446 $273,446 Bond proceeds and interest;
restricted for Civic Center area
Consumer Protection Funds
Mall Assessment 36,762
Total Restricted
503,645
funds restricted for consumer
36,762 Mall Assessment revenues
restricted for future debt
service
503,645
Committed Funds committed for
specific use by formal City
Council action
Overnight Accommodations 460,000 460,000 Proceeds from American
Youth Hostel loan repayment
committed to affordable
overnight accommodations
Education Foundation 250,000 250,000 Commitment to the SMMUSD
Education Foundation
Total Committed 710,000 710,000
Assigned
No Proposed Adjustments
Funds intended for
expressed use, but neither
restricted nor committed
Capital Projects
$48,925,642
- $48,925,642
Remaining budget balances of
adjusted as part of operating
-- - - --
capital projects approved in
Land Use Plan 1011845 (101,845)
Funds set aside for the Land
prior years
Compensated Absences
10,840,574
- 10,840,574
Liability for accrued vacation
Avenue Park, Project
balances at June 30
Encumbrances
3,605,159
- 3,605,159
Purchases made prior to June
30 and charged against budget
appropriations in prior years
PERS
488,239
- 488,239
Savings associated with
retirement benefit costs
Solar Financing Program
1,000,000
Subtotal 66, 706,332
1,000,000 Start-up monies for solar
financing program
66, 706,332
Projects Completed or Included in Current Budget
Parking Meters 2,272,500 2,272,500 Capital Project approved by
Council in October 2011
Environmental Mitigation 1,569,131 (1,569,131) Funds designated for
environmental mitigation, now
included as part of project
Civic Courthouse Mitigation 160,000 (160,000) Funds for Civic Courthouse
mitigation. Project complete.
Fuel Set aside 200,000 (200,000)
Funds for fuel purchase to help
offset price fluctuation, now
adjusted as part of operating
-- - - --
budgets.
Land Use Plan 1011845 (101,845)
Funds set aside for the Land
Use and Circulation Element
fLUCE). Project complete.
Virginia Avenue Start Up 100,000 (100,000)
Funds set aside for Virginia
Avenue Park, Project
Future Improvements 83,000 (83,000) Council designated funds for
borderline neighborhood
improvements, now budgeted
Assigned (continued)
Employee Training
90,000
(90,000)
-
Funds for employee training
programs. Will be included in
future fiscal year operating
_- -
budgets.
Other Purposes
236,716
(236,716)
-
Funds set aside for various
studies that have been
completed.
Subtotal
2,540,692
(20,192)
2,272,500
New Assignments
Tax Litigation
800,000
800,000
Funds for ongoing Utility Users
Tax (UUT) litigation
R/E Acquisition and PERS
10,954,279
10,954,279
Funds for Fire Station and City
Yard property acquisition and
_
PERS liability_ Payment
Advance to Measure V
4,0001000
4,000,000
Advance to Measure V for
storm water treatment facility.
-
Advance to Cemetery
- - -
- 2-,- 450,647
2- - -
,450,647
-- - ._ -
Additional advance to
Cemetery to offset lower than
— __
_
projected revenue
Subtotal
18, 204, 926
18, 204, 926
Legacy Projects
Parks Enhancement
370,845
(370,845)
-
-_ -
For City park enhancement
Low /Mod Housing
255,544
(255,544)
Residual receipts for low and
moderate income housing
funds. Funds budgeted as
needed.
Homelessness
2,282
(2,282)
Balance of previously
appropriated Council approved
funds for homeless services_
Revenue Not Available
150,000
(150,000)
Funds __ _ are included in -
Restricted Civic Center Bond
- -
- —
category above.
Police Badges
50, 000
(50,000)
Funds to replace current
Police badges with old style.
Print Shop
35,000
(35,000)
-
Funds for potential print shop
work order system. Project to
- - - - --
- --
be budgeted. ..
Civic Area Development
758,708
(758,708)
Funds for civic area
development. Now considered
as part of annual CIP budget
process.
Subtotal
$1,622,379
($1,622,379)
Total Assigned
70,869,403
16,314,355
87,183,758
Unassigned
Use is not constrained in
anyway
Operating and Capital
$27,557,022
$13,921,857
$41,478,879
Represents 15 percent of _
Contingency
annual operating and capital
expenditures.
-
Unrealized Gain
238,301
238,301
Unrealized gain on
investments at June 30. 2011
rd
Future Expenditures
56,658,980
56,658,980
Funds from INTBE
contamination Settlement
Economic Uncertainty
8,200,000
1,500,000
9,700,000
Established by Council
Cash Liquidity
3,546,996
(3,546,996)
-
Funds set aside to cover City
operating expenses on a cash
basis
Undesignated
28,189,216
(28,189,216)
Unassigned and undesignated
fund balance as of June 30,
2011
Total Unassigned
124,390,515
(16,314,355)
108,076,160
Total General Fund
223,028,713
223,028,713
Balance
Financial Status Update
FY 2011 -12
January ,
• Receive the FY 2011 -12 through FY 2015 -16 Financial
Status Update
• Appropriate FY 2011 -12 midyear budget changes and
adjust revenue budgets
• Adopt a resolution establishing classification and salary
rates for various positions
• Approve position and classification changes
• Adopt a resolution establishing the Fire Safety Officer
Assignment Fee
• Receive General Fund fund balance classification
changes
• Biennial Budget
- Efficient
— More time for strategic project focus, long range
planning
• Financial Status Update /Midyear
Adjustment
— Reflects policy and economic changes
— Shows budget decision impact on future years
— Identifies emerging concerns
3
• Debt deal triggers 10.0
• European debt 8.0
6.0
crisis challenges 4.0
economic stability 2.0
0.0
2008 2009 2010 2011(Q4)
1/ Source: Bureau of Economic Analysis 4
2/ Source: Bureau of Labor Statistics
• Unemployment 11.3 percent November 2011
• Trigger cuts implemented
— Library
— Education / Early childhood
• Elimination of Redevelopment
— Affects infrastructure, affordable housing production
funding and staffing
— Staff developing recommendations and actions to
comply with legislation
5
Key Indicators
Transient Occupancy Tax ($ in billions) 35.0 31.3 29.8 32.7 36.3'(f) 38.4
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Unemployment Rate'
6.7 6.8 6.2
5.5 5.7
5.3
12.4
11.3
11.3
5
7.2 ,. °' 9.5 9.5
5.3
5.4 6.1
4.1
4.4 3.9
340.0
330.0
320.0
310.0
300.0
290.0
0
270.0
June 2011: Revenues over Expenditures'
$ in millions
FY 2011 -12 FY 2012 -13 FY 2013 -14 FY 2014 -15 FY 2015 -16
--- Expenditures -June 2011 Revenues -June 2011
1/ Includes capital and operating costs 7
DO
Council- enacted cost saving measures and revenue
recovery improved fiscal position
Item
Five -year change vs.
prior forecast
(FY 2011 -12 to FY 2015 -16)
EXPENDITURE
$10M CalPERS prepayment
-$4.0 million
MOU Changes
-$6.8 million
.REVENUE
Transient Occupancy Tax
$6.7 million
Business License Tax
$6.6 million
Property Tax
$5.5 million
8
Changes reflect actual revenue receipts, and
resource realignment to most effectively serve City
REVENUE: $9.0 million
EXPENDITURE: $9.0 million
OPERATING AND CAPITAL EXPENDITURE
REVBUDGETf,
FUND
REVBUDGET
MIDYEARCHANGES
MIDYEAR i
GENERALFUND
276.8
-0.2
276.6
OTHER FUNDS
362.4
9.2
371.6
TOTAL
639.2
9.0
648.2
HUMAN RESOURCES: No Net Change
HUMAN
Cemetery -4
City Manager/ Pier 1
Planning and Comm Development 1
Police / Airport Services 2
* Difference of $50 million between revenues and expenditures is sustainable as capital improvement project costs are 5
expended over a longer period of time and may use one -time funds.
• Required under GASB
• Increase Operating Contingency Reserve from
10% to 15% of expenditures = $41.5 million
• Maintain Economic Uncertainty Reserve =
$9.7 million
• Funds for real estate acquisition or PERS
paydown = $11 million
10
CE
330.0
320.0
310.0
300.0
290.0
270.0
December 2011: Revenues over Expenditures'
$ in millions
FY 2011 -12 FY 2012 -13 FY 2013 -14 FY 2014 -15 FY 2015 -16
® ® — Expenditures - Current Forecast Revenues - Current Forecast
1/ Includes capital and operating costs 11
330.0
320.0
310.0
300.0
i3:Iixll
280.0
MIMI
FY 2011 -12 FY 2012 -13 FY 2013 -14 FY 201415 FY 2015 -16
® --Expenditures -Current Forecast Revenues - Current Forecast
12
340.0
330.0
C a s:
310.0
300.0
290.0
280.0
270.0
FY 2011 -12 FY 2012 -13 FY 2013 -14 FY 2014 -15 FY 2015 -16
® --Expenditures -Current Forecast Revenues -Current Forecast
13
• Slow economic recovery
• Ongoing state budget crisis
• Redevelopment changes
• Must be proactive: increase reserves
14
15
Reference Resolution Nos.
10649 (CCS) and 10650
(CCS).