SR-10-28-2014-8D - CC, HA & RSA SeriesCity Council (Meeting: October 28, 2014
Agenda Item: 8 -D
To: Mayor and City Council
Chairperson and Housing Authority Members
Chairperson and Redevelopment Successor Agency Members
From: Gigi Decavalles- Hughes, Director of Finance
Martin Pastucha, Director of Public Works
Donna Peter, Director of Human Resources
Subject: FY 2013 -14 Year -End Budget Changes; FY 2014 -15 Budget, Position and
Compensation Changes; and Rate Changes for the Rental of the Santa
Monica Pier Carousel
Recommended Action
Staff recommends that the City Council, Housing Authority and Successor Agency to
the Santa Monica Redevelopment Agency:
1. Approve changes to the Fiscal Year 2013 -14 Revised Budget as detailed in
Attachment Al; and
2. Approve changes to the Fiscal Year 2014 -15 Adopted Budget as detailed in
Attachment A2.
Staff also recommends that the City Council:
1. Review the City's year -end financial status;
2. Adopt a Resolution establishing classification and salary rates for various
positions detailed in Attachment B;
3. Approve the position and classification changes detailed in Attachment C; and
4. Adopt a resolution of the City of Santa Monica revising the rate schedule for the
rental of the Santa Monica Pier Carousel detailed in Attachment D.
Executive Summary
Staff recommends various changes to the FY 2013 -14 Revised Budget to reflect
significant events, to adjust Capital Improvement Program budgets, and to revise rental
rates for the Santa Monica Pier Carousel to reflect comparable venues. Finally, staff
1
recommends changes to the FY 2014 -15 Adopted Budget for General Fund expenditure
control savings allocations and for position and classification changes based on
changes in operations.
Including the changes recommended in this report, the General Fund ended
FY 2013 -14 with revenues $17.3 million greater than estimated actuals, and operating
expenditures $5 million below budget, for a net $22.3 million positive impact compared
to projections. These reflect unaudited year -end results. These surplus funds, the
majority of which are one -time, will be used for expenditure control budgeting, the new
Enterprise Resource Planning (ERP) system to be purchased in FY 2014 -15, increased
contributions to the Workers' Compensation Self Insurance Fund in order to maintain an
appropriate funding level to cover liabilities, and to prefund and paydown the City's
retirement benefit liabilities.
Including the changes recommended in this report, Non - General funds ended the year
with operating expenditures $3.5 million below budget, and revenues $2.6 million
greater than estimated actuals, for a $6.1 million positive impact compared to budget.
These funds will be used to build reserves, fund ongoing operations, and support future
capital projects.
In this report, staff recommends $0.03 million in total expenditure adjustments for
FY 2013 -14: $0.02 million in the General Fund and $0.01 million in other funds. The
changes are related to the Summer Go with the Flow program.
The staff report also recommends $6.8 million in expenditure adjustments in
FY 2014 -15, $4.1 million in the General Fund, and $2.7 million in other funds. These
changes make staffing and classification - related adjustments and allocate expenditure
control budget amounts.
Background
On June 25, 2013, Council adopted the FY 2013 -14 Budget as the first year of the
FY 2013 -15 Biennial Budget; and adopted the second year of the FY 2012 -14 Capital
Improvement Program Budget. On October 22, 2013 and February 11, 2014, Council
approved certain revisions to the FY 2013 -14 Revised Budget that adjusted revenues,
expenditures and staffing. Changes included in this staff report represent the final
modifications to FY 2013 -14.
On June 24, 2014, Council adopted the FY 2014 -15 Budget as the second year of the
FY 2013 -15 Biennial Budget; and adopted the first year and approved the second year
4
of the FY 2014 -16 Biennial Capital Improvement Program Budget. Staffing changes,
Water Conservation Unit funding, and expenditure control savings allocations are the
first modifications to this budget.
Discussion
The year -end report provides Council with an overview of the City's financial
performance as compared to budget, and aligns budgets with significant operational
shifts whose impacts were not known until the last half of FY 2013 -14. The information
gathered during staff's review of year -end budget performance will inform the upcoming
financial status update, to be presented to Council in January 2015, as well as the
FY 2015 -17 biennial budget process that will be completed in June 2015.
Fiscal Year 2013 -14 Budget Year -End Status
The City ended the year with greater revenues and lower expenditures than budgeted.
General Fund revenues were $17.3 million, or 5.1 %, greater than the FY 2013 -14
estimated actual amount. Approximately $6.9 million of the increase is anticipated to
be on- going, including $1.9 million in fees and charges; $1.4 million from local taxes,
$1.1 million from parking revenues, $1 million from parking citations, and $1.5 million
from various other sources. The remaining $10.4 million of the increase is from
one -time sources that will be used to support one -time costs. These include greater
than anticipated residual property tax and Successor Agency reimbursements of City
costs related to RDA dissolution ($4.6 million); year -end financial reporting adjustments
to investment income ($2.6 million); and $3.2 million in various other one -time revenues.
Including the adjustments in this report, General Fund expenditures were $5 million, or
1.8 %, below budget. This amount includes $8.3 million from Department savings, offset
primarily by the appropriation of one -third of the savings back to the departments as
part of the expenditure control budgeting program. Over 69% of Department savings
was due to 116 vacant positions. Remaining supplies and expenses savings indicate
3
more efficient energy use, decreased reliance on consultants, lower than projected
training needs, and conservative spending on ongoing operations.
Including adjustments recommended in this staff report, other funds ended the fiscal
year with revenues $2.6 million, or 1.0 %, above estimated actual receipts, and
expenditures $3.5 million or 1.7 %, below budget, for a net positive impact of
$6.1 million. As projected, the Housing Authority Fund required a General Fund
operating subsidy, included in the FY 2013 -14 Revised Budget. Funds historically
requiring General Fund support, including the Pier, Airport, and Beach Funds, ended
the year with a positive balance.
Non - General Fund one -time operating savings of $6.1 million will contribute towards
enterprise and internal service reserves (Water, Wastewater, Resource Recovery and
Recycling, Big Blue Bus, Vehicle Management and Self- Insurance funds); and support
future capital projects (Airport, Beach, Pier funds). These savings are offset by revenue
gaps in grant funds (Community Development Block grants and Miscellaneous Grants
funds) related to project expenditure and reimbursement timing.
On May 27, 2014, staff presented Council with the General Fund Financial Status
Update that showed the five year forecast holding relatively steady, with a slightly
improved outlook that anticipates a manageable structural deficit that is less than 1 % of
the General Fund budget at its worst. FY 2013 -14 year -end results are better than
projected, but are not sufficient to indicate a change in forecasting at this time. Staff
anticipates that the entire $22.3 million FY 2013 -14 savings will be set aside for
expenditure control budgeting, the new ERP system to be purchased in FY 2014 -15,
increased contributions to the Workers' Compensation Self Insurance Fund in order to
maintain an appropriate funding level to cover liabilities, and to prefund and paydown
the City's retirement benefit liabilities.
0
Fiscal Year 2013 -14 Operating Budget Changes
Recommended changes include a net $0.03 million in adjustments: a net $0.02 million
increase in the General Fund and a $0.01 million increase in other funds. These
operating budget adjustments reflect appropriations for the Summer Go with the Flow
program and one of four equal $14 million payments to the Los Angeles County Auditor
Controller per the stipulated judgment with the State Department of Finance and the
State Controller's Office on October 28, 2013 ( "Stipulated Judgment ") regarding the
dissolution of the City's Redevelopment Agency. The funds to cover this payment were
previously Redevelopment funds and had been set -aside for this purpose.
Pier Carousel
The City makes the Santa Monica Pier Carousel (the "Carousel ") available for private
and semi - private uses, including special event rental and filming with revenues used to
support the operation and maintenance of the Carousel. The attached resolution
proposes private and semi - private uses as well as rental rates for the Carousel. The
Santa Monica Pier Corporation, under a Services Agreement with the City last renewed
by Council on July 23, 2013, is responsible for the management of Carousel rentals and
receives compensation of fifty percent of the rental rate. Rental rates were last updated
in 2002. The proposed rental rates have been adjusted from their 2002 amounts to
reflect comparable venue rental rates. The resolution also proposes that the Carousel
be rented out for private events held during regular business hours. These events
would be limited to six (6) per year and require prior consent of the City. The proposed
rate schedule preserves discounts for non - profit groups and midweek and off - season
event rentals. Depending on the type of rental and number of guests, the proposed
rates would increase between 9% and 25% from the rates set in 2002. Revenue to the
City under the proposed rate schedule is estimated to increase by $10,000.
Fiscal Year 2014 -15 Operating Budget Changes
Recommended changes include a $4.1 million increase to the General Fund. The
budget adjustments reflect personnel changes, appropriations to fund the Water
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Conservation Unit, and expenditure control budgets. These changes are detailed in
Attachment A2
Personnel Changes
This report includes staffing adjustments to reflect ongoing operational changes, and
the results of classification and compensation studies. The primary reason for each
change is listed in Attachment C. These changes result in a 4.5 Full Time Equivalent
(FTE) employee increase. Together, position changes result in an estimated $485,372
General Fund increase in FY 2014 -15, of which $392,850 will be reimbursed by the
Water Fund.
Water Conservation Unit
California is in an unprecedented drought; the City has made a commitment to
achieving water self - sufficiency by 2020. Reducing water use now is both a drought -
management strategy and a means towards long -term water self- sufficiency and water
reliability. On August 12, 2014, Council adopted a resolution declaring a Stage 2 Water
Supply Shortage and directed staff to return with a detailed Stage 2 Water Supply
Shortage implementation plan. The City's strategy for citywide water conservation
policies, conservation programs, enforcement, and plans for community outreach and
education is included in Item 8 -B on the Council's October 28, 2014 agenda. The scale
of effort needed requires the creation of a new six - person Water Conservation Unit in
the Office of Sustainability and the Environment (OSE) and a citywide education and
outreach campaign. Four new limited -term positions are included in the salary and
position changes detailed in Attachment C. One add - delete is recommended to create
a unit lead. One existing permanent OSE staff member who is currently responsible for
such projects would also be part of the unit. In addition to limited term staff and the
outreach campaign ($605,000), staff is requesting $257,000 to house and support new
positions, and to implement water conservation programs. This unit would work
collaboratively throughout the implementation of the Stage 2 Water Shortage to ensure
that it is effectively and efficiently administered. Once the drought is over, the unit
would be scaled back or disbanded.
A
Consolidated Public Safety Communications Center
The FY 2014 -15 Adopted Budget includes the transfer of funds from the Police and Fire
departments to the Office of Emergency Management for the collocated Public Safety
Communications Center. Due to a delay in hiring a Communications Center
Administrator, the Police and Fire communications centers have hot yet migrated to joint
police and fire dispatching. At this time, staff recommends a transfer of six months of
funding from the Office of Emergency Management to the Police and Fire departments
for staffing the Police and Fire communication centers. Staff anticipates the transition
process to begin at midyear.
Expenditure Control Budgeting
On February 8, 2011, Council authorized staff to implement expenditure control
budgeting, a cost - saving strategy that provides an incentive for departments to save
budget appropriations. This process continues to yield benefits as General Fund
departments saved a total of $8.3 million in FY 2013 -14 operating expenses. One -third
of the savings, or $2.8 million, will go back to departments to spend on activities
furthering each department's mission. This $2.8 million appropriation makes up close to
70% of the report's recommended FY 2014 -15 General Fund appropriations.
Fiscal Year 2014 -15 Capital Improvement Program (CIP) Budget Changes
Requested changes to the CIP budget include a $2.6 million increase in other funds.
The changes reflect:
• Correcting a capital project for affordable housing activities.
• Establishing a capital budget for the Pier Safety Barrier project.
• Establishing a capital budget for a Fleet Tenant Improvement project.
The entire list of changes and adjustments to the CIP budget is shown in
Attachment A2.
VA
Next Steps
As the final step in the close of FY 2013 -14, Council will receive the Comprehensive
Annual Financial Report later this fiscal year. Staff will consider impacts of year -end
results and any other significant budget adjustments with its regular six month financial
status update to Council in January 2015.
Financial Impacts & Budget Actions
The budget changes recommended for FY 2013 -14 result in a $0.03 million, or 0.01
net increase over the FY 2013 -14 General Fund Revised Budget. Detail for these
changes is in Attachment Al. Recommended FY 2014 -15 expenditure changes result
in a $6.8 million or 1.2% increase over the expenditure budget. Detail for FY 2014 -15
changes is in Attachment A2.
Prepared by: Susan Lai, Budget Manager
Approved:
Donna Peter
Director of Human Resources
x
Ma in Pastucha
Director of Public Works
Forwarded to Council:
Rod Gould
City Manager
Attachments:
Al: FY 2013 -14 Budget Adjustments
A2: FY 2014 -15 Budget Adjustments
B: Resolution for Position Changes
C: Position and Classification Changes FY 2014 -15 Quarter 1
D: Rate Resolution
E.
ATTACHMENT Al
REVENUE AND EXPENDITURE BUDGET APPROPRIATIONS REVISIONS: FY 2013 -14
Expenditure Budget Adjustments (5 in thousands)
GENERAL FUND (01)
Community and Cultural Services
Reflects appropriation from funds set aside for Civic Auditorium interim use and
program development.
Public Works
Reflects appropriation from reserve to fund Federal Aviation Administration legal
costs.
Reflects appropriation for summer Go With the Flow program expenditures.
80.0
80.0
555.3
22.9
578.2
Non Departmental
Transfers Reflects Redevelopment Agency related settlement payment issued in FY 2013 -14 14,196.1
TOTAL GENERAL FUND OPERATING EXPENDITURE ADJUSTMENTS $ 14,854.3
,FUND BALANCE RELEASE
General Fund Reserve - RDA
General Fund Reserve - Airport
Litigation
General Fund Reserve - Civic
Auditorium
Reflects Redevelopment Agency related settlement payment issued in FY 2013 -14
Reflects appropriation from reserve to fund Federal Aviation Administration legal
costs.
Reflects appropriation from funds set aside for Civic Auditorium interim use and
(14,196.1)
(555.3)
program development. (80.0)
$.. (14,831.4)
TOTAL GENERAL FUND FUND BALANCE ADJUSTMENTS
NON - GENERAL FUNDS
PIER FUND (30)
Capital Improvement Program Reflects appropriation to correct FY 2013 -14 expenditure overage. 0.01
TOTAL 30 FUND EXPENDITURE ADJUSTMENTS $ 0.01
FLEET MANAGEMENT (54)
Public Works Reflects appropriation for summer Go With the Flow program expenditures. 10.9
TOTAL 54 FUND EXPENDITURE ADJUSTMENTS $ 10.9
TOTAL NON - GENERAL FUND OPERATING EXPENDITURE ADJUSTMENTS $ 10.9
> ® 1 1 0 0
Page 1 of 1
ATTACHMENTA2
REVENUE AND EXPENDITURE BUDGET APPROPRIATIONS REVISIONS: FY 2014 -15
Expenditure Budget Adjustments ($ in thousands)
GENERAL FUND (01)
City Manager
Community and Government
Relations Reflects correction to fully fund 1.0 FTE Community Relations Coordinator. 70.1
Office of Sustainability and the
Environment Reflects staffing additions for the Water Conservation Unit. 405.0
Reflects additional expenses to support the Water Conservation Unit. Further
detail is in Council Agenda Item 8 -13, Stage 2 Water Supply Shortage
Implementation. 457.0
Office of Emergency Reflects reallocation of OEM staffing budget to Police and Fire pending joint
Management operations center launch. (1,764.4)
Reflects reappropriation of one -time training and equipment supplies unpent in
FY 2013 -14. 400.0
_. (432.3)
Finance
Reflects personnel classification changes, to align positions with responsibilities. (30.4)
City Attorney
Reflects staffing changes to convert a Legal Administrative Staff Assistant to
Executive Assistant to the City Attorney, and to add a 0.5 FTE Community Liaision
for the Tenant Harassment Program. 66.9
$ 66.9
Human Resources
Reflects staffing changes. 0.1
$ 0.1
Police
Reflects reallocation of OEM staffing budget to Police pendingjoint operations
center launch. 1,171.0
Reflects staffing adjustments. (14.1)
Fire
Reflects reallocation of OEM staffing budget to Fire pending joint operations
center launch. 593.4
$ 593.4
TOTAL GENERAL FUND OPERATING EXPENDITURE ADJUSTMENTS
Expenditure Control Savings
Represents one -third of General Fund Department savings, for one -time projects
Expenditure Control associated with each Department's mission. 2,772.6
_. _.._ _.. _....
$
Page 1 of 2
ATTACHMENT A2
REVENUE AND EXPENDITURE BUDGET APPROPRIATIONS REVISIONS: FY 2014 -15
Capital Improvement Program
Bergamot Transit Village
To reallocate funds reflecting changes in project name and scope.
(116.0)
Memorial Park Plan
To reallocate funds reflecting changes in project name and scope.
116.0
Open Data Capital Project
Reflects increase to fund City's Open Data project
55.0
Reflects Department expenditure control contributions to the City's Open Data
Expenditure Control
project. -
(55.0)
TOTAL GENERAL FUND CAPITAL EXPENDITURE ADJUSTMENTS
NON-GENERAL FUNDS
Capital Improvement Program
SPECIAL REVENUE SOURCE (04) FUND
Low / Moderate Income
Housing Reflects correction to FY 2014 -15 Capital Improvement Program budget. - 2,296.7
TOTAL 04 FUND EXPENDITURE ADJUSTMENTS $ 2,296.7
PIER (30)
Pier Safety Barrier Funds to construct a barrier to address safety needs. 115.0
Pier West End Emergency Funds released to reflect revised project timing and requirements. Adjustment
Escape offsets Pier Safety Barrier expenditures (35.0)
TOTAL 30 FUND EXPENDITURE ADJUSTMENTS $ 80.0
FLEET MANAGEMENT (54)
Fleet Tenant Improvement Funds Fleet Tenant Improvements from available fund balance. 292.0
TOTAL 54 FUND EXPENDITURE ADJUSTMENTS $ 292.0
TOTAL NON - GENERAL FUND OPERATING EXPENDITURE ADJUSTMENTS
Page 2 of 2
ATTACHMENTC
POSITION AND CLASSIFICATION CHANGES
FOND
Dept
DELETE
Division Delete POSRION TRLE
pFTE
FOND
Al D
Dept Division ANN
pFTE
POSRION TITLE
REASON SUBTOTA
PRIMARY REASON NET FEE NET SAL
CHNNGE CHNNGE
01
CAD
2310- City Attorney
10
Legal Administrative Staff Assistant
01
CAD
2310- QLyAttorney
10
Executive Assistant m the Qty Attorney
Titlechange -salary increase - 4,6]2
01
CAD
2310- QLyAttorney
OS
Community Liaison
New position OS 62,195
01
CCS
2621 - Administration (CCS Human Services)
10
Human Services Administrator
01
CCS
2621 - Administration (CCS Human Services)
10
Human Services Administrator
Titlechange -no salary change - -
01
CMO
2260 - Office of SLSLinability &the Environment
10
SLSLinability, Analyst
01
CMO
2260- Office ofSustainability & the Environment
10
Senior Sustainability Analyst
Titlechange -salary increase - 3,056
01
CMO
2260 - Office of SLSLinability &the Environment
10
Sustainable Outreach Coordinator
01
CMO
2260- Office ofSustainability & the Environment
10
SLSLinability Outreach Coordinator
Titlechange -no salary change - -
01
CMO
2260- Office ofSustainability & the Environment
10
Sustainability Analyst (LIMITED TERM)
New position
106102
01
CMO
2260- Office ofSustainability & the Environment
20
Water Resources Specialist (LIMITED TERM)
New position
198,990
01
CMO
2260- Office ofSustainability & the Environment
10
Project Support Assistant (LIMITED TERM)
New position
84,]02
01
Finance
2080 Budget
10
Assistant Administrative Analyst
01
Finance
2080 Budget
10
Administrative Analyst
Operational change
4,725
01
Finance
2210 - Administration (Finance)
10
Principal Budget Analyst
01
Finance
2210 - Administration (Finance)
10
Principal Treasury Analyst
Titlechange -no salary change
-
01
Finance
2220 - Financial Operations
10
Financial Operations Manager
01
Finance
2220 - Financial Operations
10
Accounting Manager
Operational change
(18,026)
01
Finance
2220 - Financial Operations
10
Financial Systems Analyst
01
Finance
2220 - Financial Operations
10
Payroll Systems Analyst
Titlechange -no salary change
-
01
Finance
2240- Business & Revenue Operations
10
Staff Assistant 111
01
Finance
2240 - Business & Revenue Operations
10
Staff Assistant l
Operational change
(1],05])
01
HE
2520 - Employee Relations and Benefits
10
HE Systems EmploNerEmployee Relations Analyst
01
HE
2520 - Employee Relations and Benefits
10
Human Resources Information Systems Analyst
Titlechange -no salary change
-
01
HE
2520 - Employee Relations and Benefits
10
Human Resources Assistant
01
HE
2520 - Employee Relations and Benefits
10
Human Resources Assistant
Equity Adjustment
73
01
PCD
2670 Strategic and Transportation Planning
10
Deputy Director Special Projects
01
PCD
2670- Strategic and Transportation Planning
10
Senior Transportation Planner- Bicycle and Pedestrian
Reclassification
-
01
Police
3040 - Administrative Services (Police)
10
Police Chief
01
Police
3040 - Administrative Services (Police)
10
Police Chief
Equity Adjustment -
9,963
01
Police
30]0 - Criminal Investigation
10
Youth Services Counselor
01
Police
30]0 - Criminal Investigation
10
Youth and Family Services Support Coordinator
Titlechange -salary decrease - (24,079)
TOTAL 4.5 FTE 415,316
Reference:
Resolution No. 10844
(CCS)
0
Resolution No. 10845
(CCS)