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SR 02-13-2018 8B City Council Housing Authority Parking Authority Report City Council Meeting: February 13, 2018 Agenda Item: 8.B 1 of 16 To: Housing Authority, Parking Authority, Mayor and City Council From: Gigi Decavalles-Hughes, Director, Finance Department, Budget Susan Cline, Director, Public Works Department, Donna Peter, Director, Human Resources Department Subject: Financial Status Update and FY 2017-18 Midyear Budget Recommended Action Staff recommends that the City Council, Housing Authority, and Parking Authority: 1. Appropriate FY 2017-18 midyear revenue and expenditure budget adjustments and approve corresponding adjustments to the FY 2018-19 budget plan (Attachment A). Staff also recommends that the City Council: 1. Receive the FY 2017-18 through FY 2021-22 Financial Status Update; 2. Adopt a Resolution establishing new classifications and adopting salary rates for various positions (Attachment B) and approve the position and classification changes (Attachment C); 3. Adopt a Resolution authorizing the City Manager to accept a grant awarded in the amount of $450,000 with a required local match of $60,000 from Caltrans Sustainable Communities Planning Grant Program for a Wilshire Boulevard Safety Enhancement Study, and to accept all grant renewals (Attachment D); 4. Authorize the City Manager to accept an additional grant awarded in the amount of $200,852 with a required local 12% match from Caltrans for the Safe Routes to School program; 5. Authorize the City Manager to accept a grant awarded in the amount of $28,595 from the State of California for software and hardware improvements to maximize patron benefits from library internet connections, and to accept all grant renewals; and 6. Receive public comment on federal Community Development Block Grant (CDBG) and Home Investment Partnership Act (HOME) Program funds. Executive Summary The midyear budget update (The Update) provides an opportunity to apprise Council and the community on the City’s five-year financial forecast and new information on longer-term trends for the City, as well as present proposed midyear budget changes. 2 of 16 The Update informs the City Council and community of the City’s current and projected fiscal status as the City begins the budget process that will result in the adoption of the FY 2018-19 budget as well as the Capital Improvement Plan Biennial Budget. Overall, the forecast has improved since the last update, and restraint shown in midyear expenditure changes contributes to this. However, signs of changes in certain areas of the local economy are becoming more pronounced, and uncertainties related to high- value expenditures and revenues persist. Moreover, the recent stock market volatility reminds us that the current national economic expansion will not go on forever and is already one of the longest on record. This upcoming budget is the second year of the operating biennial budget and the first year of the capital improvement program (CIP) biennial budget. In the second year of the biennial budget process, staff reviews and adjusts the plan for the next year to account for changes in revenue and operating expenses necessary to complete the two-year workplan. The Update shows three years of positive General Fund structural balances before an anticipated shortfall in FY 2020-21 and in FY 2021-22. The projected funding gaps are due primarily to anticipated increases in pension costs in spite of the City’s significant prepayments to the retirement system. It is important to highlight that the gaps would be significantly greater if the prepayment had not been made. This represents a change from the last forecast as indicated in the following table: FY 2019-20 FY 2020-21 FY 2021-22 May 2017 Projected Shortfall $3.8 million $10.3 million $18.8 million (3.7% of the GF budget) February 2018 Projected Shortfall Positive fund balance $0.3 million $10.6 million (2.4% of the GF budget) These improved estimates are due primarily to projected lower costs for retirement and healthcare. These lower than previously projected costs are a result of the City’s $45 million pay down of unfunded pension liability and a negotiated one-year rate maintenance with the City’s primary health insurance provider. On the revenue side, 3 of 16 staff has converted some revenue sources from one-time to ongoing streams based on recent years’ actuals (e.g., partial Transient Occupancy Taxes from short-term home rentals, Building and Safety fees). The financial status of other funds remains relatively stable. As previously reported, the Housing Authority Fund is projected to require subsidies through the end of the forecast period. The Cemetery Fund is projecting operating structural deficits, and staff are assessing operations to provide a long term plan for the fund. The Pier Fund is also projected to require subsidies as the combination of operating and large capital expenditures are outpacing the growth of revenues during the forecast period. Proposed FY 2017-18 midyear revenue adjustments result in a $11.8 million, or 1.7%, increase over the citywide revenue budget, and expenditure adjustments result in a net $4.9 million or a 0.8% decrease over the citywide expenditure budget. This strong performance allows the City to fully fund the future $8 million construction cost of the Civic Center Multi-Use Sports Field with $1 million in additional funding. The report also includes a staff recommendation to accept grants for the Safe Routes to School program, Wilshire Boulevard Safety Enhancement Study, and software and hardware improvements at the Santa Monica Public Library. Finally, the City must hold two public hearings prior to the adoption of a One-Year Action Plan allocating federal CDBG and HOME Program funds. This public hearing will satisfy one of the two meeting requirements to receive public input and recommendations for the Proposed FY 2018-19 Action Plan. The City will hold another public hearing prior to the adoption of the Proposed FY 2018-19 Action Plan. Background On June 27, 2017 (Attachment E), Council adopted the first year and approved the second year of the FY 2017-19 Biennial Budget; and adopted the second year of the FY 2016-18 Capital Improvement Program Budget. On October 24, 2017 (Attachment F), based on year-end financial results, Council approved certain revisions to the FY 4 of 16 2017-18 Adopted Budget that adjusted expenditures and staffing. Since October, staff completed a midyear review of all revenues and expenditures and is proposing budget adjustments for programs, activities, and revenues that have changed significantly. These adjustments will align the FY 2017-18 Revised Budget with current operations. Discussion Economic Update While the City’s General Fund forecast continues to show revenue growth, the City, along with cities across the country, has entered a period where changes in the economy at large, such as on-line sales, and regional factors such as alternative transportation choices, are beginning to impact our traditional revenue streams. The U.S. economy continues to grow at a consistent pace. Economic growth as measured by GDP was positive in 2017 for the eighth consecutive year with the recent quarter averaging growth of nearly 3%. Most economists are projecting continued growth (2.5-3% range annually) over the next two years. Unemployment is at its lowest level since 2000. The housing market remains strong, and inflation, while showing some signs of increase, continues to be low. The Federal Reserve has begun to increase interest rates and is expected to continue these increases over the next one to two years in an effort to “normalize” rates. However, the economy is not without risks. The current economic recovery period is one of the longest in the post WW II period, and history would indicate that the economy is likely to head into a recession sometime within the next five years. The State economy recovered strongly from the “Great Recession.” While the State budget has also expanded in recent years to attempt to correct long term issues, and the Governor’s FY 2018-19 Budget predicts a healthy surplus, the State budget is not without risks. A recession could reduce State revenues by an estimated $20 billion annually over several years. Also, the effect of Federal tax law changes cannot yet be measured. 5 of 16 Santa Monica’s economy remains relatively strong due in large part to its geographic location and its diversified tax revenue base. However, there are signs of moderation in the local economy’s growth rate. General Fund revenue growth has begun to slow after several years of strong increases. Average annual growth the last three years has been less than 4% following growth rates of over 8% in the three years of recovery following the recession. Also, as with the State and national economies, the threat of a recession could significantly alter revenue projections. More information on some of the City’s key revenue sources is provided below. Property values in the City remain the third highest in Los Angeles County for a City with the 19th largest population. The FY 2017-18 assessed value increase was 5.8%, the third consecutive year in the 6% range. Moderate increases of 3-4% are projected over the next five years. Sales tax, which includes both sales and use and transaction and use tax, growth rates are expected to be modest, reflecting the loss of several large tax generators and the global shift of retail activity from brick and mortar businesses to on-line businesses. City taxable sales are projected to grow by less than 2% in FY 2018-19 and with future annual growth rates of less than 3%. Tourism, which provides a major stimulus to the local economy by creating jobs and producing revenues, continues to show strength. Transient Occupancy Taxes have increased at an average annual rate of over 9% over the last seven years, and revenues are expected to continue having healthy increases over the forecast period, reflecting the recent opening of two new hotels and another one that is under construction and anticipated to open within the next three years. One area of uncertainty over the forecast period is the impact that new registration requirements for home share hosting platforms will have on current revenue projections. Business License Taxes are expected to show some weakness over the forecast period, reflecting the anticipated loss of at least one major taxpayer as well as a moderating of the local economy. Utility Users Tax revenues are expected to remain 6 of 16 relatively flat over the forecast period as revenues from telecommunication services continue to drop. Parking Facility Taxes are expected to grow by approximately 1.7% per year over the forecast period as declines from City downtown parking facilities are offset by increases from private parking facilities and beach parking. Interest rates have risen sharply over the last year after the historically low levels over the prior seven years resulting in greater investment income. While a gradual increase is expected over the forecast period, rates are still expected to remain at relatively low levels. Staff is closely monitoring parking revenues, a consistently strong revenue source for the City that is projected to decrease by 7% in FY 2017-18, reflecting a significant shift in how people travel into and around the City, primarily as a result of EXPO light rail and ridesharing services providing alternative modes of transportation for visitors and community members. General Fund Financial Status Update The General Fund Financial Status Update reflects revised revenue projections as well as staff’s proposed operating and capital budget changes included in this staff report. Increased revenues, primarily Transient Occupancy Taxes and Building and Safety fees, the City’s pre-payment of pension contributions (paying down the City’s unfunded liability) and lower than anticipated increases in medical benefit costs significantly reduce the timing and size of projected future shortfalls. Staff has completed three forecast scenarios that contemplate Best, Probable, and Worst Case impacts on the General Fund. The chart below shows the three forecast scenarios. 7 of 16 The Probable scenario, which serves as the baseline for the forecast, shows the General Fund experiencing a potential shortfall of approximately $0.3 million in FY 2020-21 that increases to $10.6 million (2.4% of the General Fund budget) in FY 2021-22. The major challenges to the City’s budget continue to be pension, health insurance and workers’ compensation costs, which are projected to grow at average rates of 6.3%, 8.5%, and 10% per year, respectively, over the remaining four full years of the forecast. Overall, operating expenditures are anticipated to grow an average of 3.6% per year during this period, while ongoing revenues are anticipated to grow an average of 2.8% per year. 8 of 16 In the Best Case scenario, bolstered by higher increases in revenues, the General Fund would be positive throughout the forecast period, with a positive balance of $3.9 million in FY 2021-22. In the Worst Case scenario, which shows the effects of a possible recession as well as intensification of some potentially negative trends in the areas of parking and sales, transient occupancy and business license tax, the General Fund would experience a shortfall of $0.6 million in FY 2018-19 that would increase significantly to $29 million in FY 2021-22. Other Funds Other major funds that are included in the Financial Status Update fall into two categories: 1) funds that operate with sufficient revenues to sustain necessary operating and capital needs, and 2) funds that have a structural deficit where ongoing revenues are not sufficient to cover ongoing expenditures. Self-Sustaining Enterprise Funds The Water and Wastewater Funds have sufficient revenues to cover current operations. Based on existing analysis, rate increases in the Water Fund allow the implementation of the Sustainable Water Master Plan while also maintaining reserve levels. As noted at the recent public hearing to adopt the current rates, additional studies are underway to further assess the financial needs to achieve Water Self-Sufficiency and those reports are scheduled to be presented to the Council this summer. The Wastewater Fund continues to have adequate revenues and reserves to meet current operational and capital expenditures. The Resource Recovery and Recycling (RRR) Fund will maintain a positive fund over the next five years. There are several upcoming proposals that may potentially have a substantial impact on the financial stability of the fund, including various solid waste and recycling initiatives and pilot programs, the Fund’s share of costs to complete the Corporate Yards modernization project, and the displacement of the recycling contractor at the Corporate Yards that will result in additional costs for transporting the City- collected recycling materials to an offsite location. Staff will continue to monitor fund performance and consider the need for a rate increase in the future. 9 of 16 The BBB Fund will also maintain a positive fund balance over the next five years. BBB, like most transit agencies in the country, continues to be confronted with reduced ridership, and BBB staff is focused on strategies to improve ridership and ensuring that services are cost effective and relevant. The fund will receive additional revenues from the voter-approved Measure M, which allocates an additional ½ cent sales tax to agencies in order to improve traffic congestion, keep transit fares affordable and improve bus systems. The Airport, Beach, and Community Broadband Funds will generate adequate revenues to sustain their operations throughout the next five years. Funds Requiring Subsidies The Housing Authority Fund has a projected operating structural deficit of approximately $0.7 million to $1 million annually throughout the forecast period. The Housing Authority will require an annual operating subsidy from the Special Revenue Source Fund. This assumes that U.S. Department of Housing and Urban Development (HUD) funding to housing authorities will not be reduced. The Cemetery Fund is projecting an operating structural deficit of approximately $0.2 million to $0.6 million annually during the forecast period. The implementation of the green burial program has not realized the anticipated growth in the fund. The fund required a General Fund loan at the end of FY 2016-17 and is projected to require General Fund loans throughout the forecast period. Staff is assessing operations to provide a long term plan for the Cemetery Fund. The Pier Fund is not able to sustain an adequate balance to cover both its operating costs and large capital expenditures. Capital needs that are unable to be funded by the Pier Fund during the forecast period must compete with General Fund-supported capital needs. FY 2017-18 Midyear Budget Adjustments 10 of 16 At midyear, staff recommends revenue budget changes based on actual performance and new information, and proposes adjustments to the expenditure budget as necessary to most effectively maintain operations. Revenue Adjustments – General Fund Recommended revenue adjustments to the FY 2017-18 budget result in a net increase of $9.4 million. However, only $1.4 million of the net increase is expected to be ongoing. Significant increases include:  $3.1 million in Transient Occupancy Taxes  $1.3 million in Documentary Transfer Taxes  $1.5 million from Building & Safety/Planning fees  $1.0 million in Business License Taxes  $0.9 million in Interest Earnings  $8.0 million pay down from Gillette settlement (one-time) Significant decreases include:  -$3.9 million in parking related revenues  -$1.1 million in Sales Taxes  -$0.9 million in Transaction and Use taxes  -$0.5 million in Other Fees/Charges Revenue Adjustments – Other Funds Significant revenue adjustments in other funds include:  Housing Authority Fund (12) – decrease of $1.9 million in Section 8 Housing Assistance Program revenues. An explanation is shown in the expenditure section below.  Community Development Block Grant (19) – increase of $1.2 million primarily reflects changes in timeline for certain projects.  Pier Fund (30) – increase of $0.8 million reflecting actual Pier tenant rentals and vendor rents.  Local Return (45) – increase of $1.1 million to reflect the first annual allotment of Measure M Local Return funds. 11 of 16  Parking Authority (77) – increase of $0.7 million to reflect interest on promissory note repayments from the Successor Agency. A full listing of revenue adjustments is included in Attachment A. Operating Expenditure Adjustments – General Fund FY 2017-18 proposed General Fund operating expenditure appropriations result in a decrease of $2.6 million. Significant appropriations include:  $3 million decrease to reflect PERS pay down savings.  $2.4 million addition to reflect first year debt service payment for the City Services Building. Future year debt service payments will be paid from the CIP allocation. Due to timing, first year payment would adversely impact projects already underway.  $1.7 million decrease to reflect health insurance savings due to negotiated one- year maintenance of premium rates.  $0.7 million decrease to reflect lower than anticipated Measure Y and GSH Transaction and Use Tax funds to the Santa Monica-Malibu Unified School District and Measure GSH funds for the affordable housing program. This is a direct result of the flattening of sales and use and transaction and use tax revenue.  $0.5 million decrease to adjust the portion of Parking Structure 7 and 8 revenues paid to Macerich as a result of lower than anticipated parking revenues.  $1.5 million increase to appropriate prior year savings previously set aside in reserves to pay for the defeasement of the 2009 Public Safety Facility lease revenue bond. In addition, funds of $1 million are recommended to be set aside to fully-fund the construction of the Civic Center Field, increasing the funding set aside for design and construction to $8 million (anticipated total project budget). Operating Expenditure Adjustments – Other Funds 12 of 16 FY 2017-18 proposed midyear appropriations include a net $2.2 million decrease in other funds. Significant changes reflected in the request include the following:  Other funds will decrease by $2.1 million to reflect health insurance savings ($1.1 million) and PERS paydown savings ($1 million).  In the Housing Authority Fund, a $1.9 million decrease to reflect reduction in Section 8 program expenditures. Voucher issuance and voucher utilization rates are lower than anticipated due to highly competitive market rental rates available to voucher-holders;  In the Wastewater Fund, a $2 million decrease to correct the budgeted amount for amalgamated system sewerage charge, based on updated information.  In the Special Revenue Source Fund, a net $0.6 million increase to the budget resulting from a decrease in an interfund transfer in (shown as a budget credit) to reflect lower than anticipated GSH funds set aside for the affordable housing program ($0.2 million) and to reflect transfer of Lantana development agreement funds to the Santa Monica-Malibu Unified School District for costs associated with construction of playground facilities at the Edison Language Academy ($0.4 million).  In the Airport Fund, a $0.8 million increase for additional lease brokerage and property management services, reflecting the substantial number of properties now under the management of the Airport Division due to the elimination of master leasehold agreements. Personnel Changes This report includes staffing adjustments to reflect ongoing operational changes and the results of classification and compensation studies. A Salary Resolution detailing new classifications and salary rates is reflected in Attachment B. Staffing adjustments are detailed in Attachment C. These changes result in no net increase of Full-Time Equivalent (FTE) employees. Together, position changes result in a net decrease of $0.01 million – an increase of $0.02 million in the General Fund and a decrease of $0.03 million in the other funds. Changes reflecting reorganizations to accommodate changing needs include the replacement of the vacant Transit Community and 13 of 16 Government Engagement Manager position with a Strategic Transit Planner in the Big Blue Bus Department (a net budget decrease of $30,000), and the replacement of a vacant Human Resources Assistant position with a Senior Human Resources Analyst in Human Resources (a net increase of $22,000). Capital Improvement Program Budget Adjustments The midyear changes to the FY 2017-18 Capital Improvement Program (CIP) budget are largely grant funded appropriations and budget adjustments to enterprise fund projects that result in a total net increase to the CIP budget of approximately $0.9 million. The changes include three key projects that can advance as a result of available grant resources. Budget changes are detailed in Attachment A, and the most significant changes are summarized below. Metro Grant Funds On September 26, 2013, the Los Angeles County Metropolitan Authority (MTA) notified the City of its successful grant application for the Citywide Signal Detection project. Funding for this project was projected to be available in FY 2018-19; however, MTA has notified the City of the availability of funding for FY 2017-18. Staff recommends expediting the timeline for this project and allocating the $540,480 of Metro grant funds and $135,120 of TDA Article III local match funds, which are also available now, in FY 2017-18. Caltrans Safe Routes to School Grant The City was awarded funding for an Edison Safe Routes to School project in 2012 to design and construct curb extensions, dual curb ramps and pavement striping in the vicinity of Edison Language Academy. In September 2017, City staff was awarded additional funding in the amount of $200,852 from Caltrans and recommends appropriation of those funds to the Edison Language Academy Safe Routes to School project at this time. The required local match of $48,135 is funded by the Pedestrian Action Plan Implementation CIP project and is budgeted in the FY 2017-18 CIP Budget. Caltrans Sustainable Communities Planning Grant Program 14 of 16 The Caltrans Sustainable Communities Planning Grant Program is a competitive grant program that provides funding for transportation and land use planning projects to reduce transportation-related GHG emissions. On October 20, 2017, staff submitted an application for a Wilshire Boulevard Safety Enhancement Study to evaluate collisions and identify targeted safety enhancements along the Wilshire Boulevard Corridor. The application was prepared based on priorities of the City Council, adopted plans and programs. On December 15, 2017, the City was awarded $450,000 in grant funds. Staff is requesting authorization to accept the grant funds and budget the required local match of $60,000 from Transportation Impact Fees (TIF) revenues, for a total project cost of $510,000. Other CIP budget increases include augmenting the budget for several existing projects which include the following projects:  Irrigation Control Replacement project funded by water demand mitigation fee revenues for water conservation measures;  Auto Meter Reading Pilot project to fund software costs of expanding the program, funded by the Water fund;  Computer Equipment Replacement Program to purchase replacement network switches and security enhancement solutions, funded by the Computer Equipment Replacement Fund;  Pier Carousel ADA Upgrades project that will implement required improvements, funded by the Pier Fund; and the 4th Court Bike Connection project to implement the construction phase, funded by the Special Revenue Fund. Included is a budget reduction to the Hyperion Capital Payment project which funds payment to the City of Los Angeles Bureau of Los Sanitation due to savings as a result of recalculated charges based on actual sewer flows and a reconciliation credit back to the City. Acceptance of Grants Caltrans Safe Routes to School Grant 15 of 16 As mentioned above, in September 2017, City staff was awarded additional funding in the amount of $200,852 from Caltrans. Staff is requesting authorization to accept the additional grant funds from Caltrans. Caltrans Sustainable Communities Planning Grant Program As mentioned above, on December 15, 2017, the City was awarded $450,000 in grant funds. Staff is requesting that Council adopt a resolution authorizing the City Manager to accept the grant funds from Caltrans. State of California Library Grant Santa Monica Public Library was awarded a Libraries Illuminated grant of $28,595 to support the purchase of cutting-edge technology that helps libraries provide innovative services and programming that fulfills the potential of their broadband connections. The goal is to use these technologies to design unique learner-centered experiences – 3D design workshops that support personal application of iterative design processes, virtual reality experiences that stimulate creative self-reflection, and family technology challenges to develop critical thinking and promote family-togetherness. The grant is supported by the California Library Services Board and funds are managed through the Southern California Library Cooperative. Staff is requesting authorization to accept the grant funds from the State of California. Community Development Block Grant (CDBG) and Home Investment Partnership Act (HOME) Program To receive federal Community Development Block Grant (CDBG) and Home Investment Partnership Act (HOME) Program grant funds, the City must prepare and submit a Council-approved One-Year Action Plan to HUD by May 15, 2018. The Action Plan outlines how the funds will be expended and confirms that the funded activities are consistent with the City’s Five-Year Consolidated Plan adopted by Council on May 12, 2015. The City must hold two public hearings prior to the adoption of a One-Year Action Plan allocating federal CDBG and HOME Program funds. This public hearing will satisfy one of the two meeting requirements to receive public input and 16 of 16 recommendations for the Proposed FY 2018-19 Action Plan. The City will hold another public hearing prior to the adoption of the Proposed FY 2018-19 Action Plan. Financial Impacts and Budget Actions Recommended FY 2017-18 midyear budget adjustments result in a $11.8 million, or a 1.7% increase over the citywide revenue budget, and expenditure adjustments result in a net $4.9 million or a 0.8% decrease over the citywide expenditure budget. Details for FY 2017-19 midyear adjustments are in Attachment A. Prepared By: Susan Lai, Budget Manager Approved Forwarded to Council Attachments: A. Revenue and Expenditure Budget Adjustments B. Salary Resolution C. Position and Classification Changes D. Grants Resolution E. June 27, 2017 Staff Report (web link) F. October 24, 2017 Staff Report (web link) G. Powerpoint Presentation ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) CITY ATTORNEY Reflects decrease in Interfund Services for the hearing examiner (50.0)$ ‐$ TOTAL CITY ATTORNEY REVENUE ADJUSTMENTS (50.0)$ ‐$ Reflects increase in revenues from Building and Safety fees 2,109.3$ 1,500.0$ Reflects increase in revenues from Seismic Retrofit fees 400.0$ 1,007.4$ Reflects decrease in Taxi Franchise fees due to reduction of annual vehicle franchise fees and permit fees (153.7)$ ‐$ Reflects decrease in zoning approvals and variance fees due to changes in the Downtown Community Plan (DCP)(500.0)$ (400.0)$ Reflects decrease in parking revenues in City parking lots and structures, offset by increase in interfund services revenues (3,925.3)$ (4,340.5)$ TOTAL PLANNING & COMMUNITY DEVELOPMENT REVENUE ADJUSTMENTS (2,069.7)$ (2,233.2)$ POLICE Reflects increase in parking citations fines and movie jobs reimbursements 300.8$ 200.0$ TOTAL POLICE REVENUE ADJUSTMENTS 300.8$ 200.0$ COMMUNITY AND CULTURAL SERVICES Reflects decrease in revenues from enrichment programs, swim programs, and Tennis Tournaments, partially offset by increases in skate park and Memorial Park gym user fees (162.0)$ ‐$ TOTAL COMMUNITY & CULTURAL SERVICES REVENUE ADJUSTMENTS (162.0)$ ‐$ LIBRARY Reflects decrease in library fees, fines, meeting room rentals, and copy/printer fees (20.5)$ ‐$ TOTAL LIBRARY REVENUE ADJUSTMENTS (20.5)$ ‐$ PUBLIC WORKS Reflects timing change in receipt of On Bill Financing and Rebate program revenues related to Energy Efficiency Projects and less water conservation penalties, partially offset by increased Utility Excavation fees, Blanket Utility permits, Urban Runoff Mitigation fees (1,290.8)$ 1,262.4$ TOTAL PUBLIC WORKS REVENUE ADJUSTMENTS (1,290.8)$ 1,262.4$ HOUSING & ECONOMIC DEVELOPMENT Reflects increase in revenues from the sale of Mountain View Mobile Home Park and outdoor dining, offset by decrease in lease revenue 4.9$ ‐$ TOTAL HOUSING & ECONOMIC DEVELOPMENT REVENUE ADJUSTMENTS 4.9$ ‐$ NON‐DEPARTMENTAL Gillette Settlement ‐ Reflects increase due to advance payment from Gillette in FY 2017‐18 to pay off outstanding balance 7,981.8$ (2,433.2)$ Transient Occupancy Tax ‐ Reflects higher than anticipated growth in room rental rates and from home share hosting platforms 3,070.0$ 1,264.0$ Documentary Transfer Tax ‐ Primarily reflects transfer of several large properties 1,300.0$ 27.0$ Business License ‐ Based on year‐to‐date results 981.0$ 64.0$ REVENUE BUDGET ADJUSTMENTS ($ IN THOUSANDS) GENERAL FUND (01) PLANNING & COMMUNITY DEVELOPMENT FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN February 13, 2018 1 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN Investment Income ‐ Reflects higher than expected growth in interest rates 873.0$ 865.0$ LA Marathon ‐ Reflects anticipated revenues from LA Marathon 310.0$ 310.0$ Property Taxes ‐ Primarily reflects increased assessed valuations 187.2$ 445.9$ Utility Users Tax ‐ Increased taxes from electricity, partially offset by decrease in telecommunication taxes 124.0$ 124.0$ Parking Facility Tax ‐ Reflects greater revenues from private facilities at the beach, partially offset by less revenues from City facilities 71.0$ 71.0$ Local Public Safety Funds ‐ Slight increase reflects revised estimate ‐$ 16.1$ Discount on Pers Prepayment ‐ Prepayment discount was less than anticipated (165.5)$ ‐$ Sales and Use Tax/Transaction and Use Tax ‐ Primarily reflects lower than anticipated receipts from general consumer goods, auto sales, and restaurants (2,036.0)$ (2,974.0)$ TOTAL NON‐DEPARTMENTAL REVENUE ADJUSTMENTS 12,696.5$ (2,220.1)$ TOTAL GENERAL FUND REVENUE ADJUSTMENTS 9,409.2$ (2,990.9)$ SPECIAL REVENUE SOURCE FUND (04) COMMUNITY & CULTURAL SERVICES Reflects increase to Parks & Rec Impact Fee due to payments received from 1112 Pico and 3008 Santa Monica Blvd projects 280.0$ ‐$ NON‐DEPARTMENTAL Reflects increase to Investment Income 115.0$ ‐$ HOUSING & ECONOMIC DEVELOPMENT Reflects increase due to the 5% AHPP fee increase passed by City Council on August 8, 2017 50.0$ ‐$ PUBLIC WORKS Reflects decrease in Energy Efficiency Rebates (20.0)$ ‐$ 425.0$ ‐$ BEACH RECREATION FUND (11) COMMUNITY & CULTURAL SERVICES Reflects decrease in Film Permits (73.7)$ (79.8)$ (73.7)$ (79.8)$ HOUSING AUTHORITY FUND (12) HOUSING & ECONOMIC DEVELOPMENT Primarily reflects decrease in Section 8 Housing Assistance Program vouchers (1,920.9)$ (1,051.1)$ (1,920.9)$ (1,051.1)$ TORCA FUND (14) HOUSING & ECONOMIC DEVELOPMENT Reflects increase to proceeds from Shared Appreciation Mortgages due to timing of payments 135.7$ ‐$ TOTAL TORCA FUND REVENUE ADJUSTMENTS 135.7$ ‐$ NON‐GENERAL FUNDS TOTAL SPECIAL REVENUE SOURCE FUND REVENUE ADJUSTMENTS TOTAL BEACH RECREATION FUND REVENUE ADJUSTMENTS TOTAL HOUSING AUTHORITY FUND REVENUE ADJUSTMENTS February 13, 2018 2 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN LOW/MOD INCOME HOUSING ASSET FUND (15) HOUSING & ECONOMIC DEVELOPMENT Reflects increase in Investment Income 40.0$ ‐$ TOTAL LOW/MOD INCOME HSG ASSET FUND REVENUE ADJUSTMENTS 40.0$ ‐$ CDBG FUND (19) COMMUNITY & CULTURAL SERVICES Reflects increase due to timing changes in completion of Street Lighting and Residential Rehabilitation CIP projects 1,190.0$ ‐$ TOTAL CDBG FUND REVENUE ADJUSTMENTS 1,190.0$ ‐$ MISCELLANEOUS GRANTS FUND (20) PLANNING & COMMUNITY DEVELOPMENT Primarily reflects timing changes in receipt of reimbursements for Wilshire Blvd Safety Study, Edison Language Academy, and Citywide Signal Detection project 766.0$ ‐$ LIBRARY Reflects the receipt of the new Libraries Illuminated grant 28.6$ ‐$ NON‐DEPARTMENTAL Reflects decrease in Investment Income (20.0)$ ‐$ PUBLIC WORKS Primarily reflects timing changes in receipt of reimbursements for CA Incline, Pier Bridge design, MWD Grant, and Pier Beach Bike Path projects (864.5)$ ‐$ (89.9)$ ‐$ COPS FUND (22) POLICE Reflects an adjustment to COPS funding 60.0$ ‐$ TOTAL COPS FUND REVENUE ADJUSTMENTS 60.0$ ‐$ WATER FUND (25) PUBLIC WORKS FY 2017‐18 reflects decrease due to the replacement of Water Demand Mitigation Fee by the Water Neutrality ordinance and decrease in Investment Income. FY 2018‐19 increase due to the 5% water rate increase (137.0)$ 582.6$ TOTAL WATER FUND REVENUE ADJUSTMENTS (137.0)$ 582.6$ RESOURCE RECOVERY & RECYCLING FUND (27) PUBLIC WORKS FY 2017‐18 primarily reflects decrease in Enclosure Plan Check fees. FY 2018‐ 19 reflects increase in Garbage/Refuse Collection fees and Alternative Fuel Tax Credit (29.2)$ 18.3$ TOTAL RRR FUND REVENUE ADJUSTMENTS (29.2)$ 18.3$ COMMUNITY BROADBAND FUND (28) INFORMATION SERVICES Reflects decrease in Fiber Optic Services ‐$ (100.0)$ ‐$ (100.0)$ PIER FUND (30) HOUSING & ECONOMIC DEVELOPMENT Primarily reflects increase in Pier Rental and Vendor Rent 755.1$ 1,556.2$ 755.1$ 1,556.2$ TOTAL MISCELLANEOUS GRANTS FUND REVENUE ADJUSTMENTS TOTAL COMMUNITY BROADBAND FUND REVENUE ADJUSTMENTS TOTAL PIER FUND REVENUE ADJUSTMENTS February 13, 2018 3 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN WASTEWATER FUND (31) PUBLIC WORKS FY 2017‐18 reflects decrease in City of LA Sewer Repair due to Moss Avenue Pump Station maintenance being lower than expected. FY 2018‐19 reflects increase in City of LA Sewer Repair due to completion of Variable Frequency Drivers (VFDs) for Moss Avenue Pump Station (93.0)$ 600.0$ (93.0)$ 600.0$ AIRPORT FUND (33) PUBLIC WORKS Primarily reflects increase in Noise Abatement fines and Investment Income 93.0$ ‐$ 93.0$ ‐$ STORMWATER MANAGEMENT FUND (34) PUBLIC WORKS FY 2017‐18 primarily reflects increase in Stormwater In‐Lieu Fees for Colorado Esplanade and investment income. FY 2018‐19 reflects slight decrease in Stormwater In‐Lieu fees 344.5$ (13.4)$ 344.5$ (13.4)$ CEMETERY FUND (37) PUBLIC WORKS FY 2017‐18 and FY 2018‐19 decreases due to lower demand for green burial services (223.9)$ (231.8)$ TOTAL CEMETERY FUND REVENUE ADJUSTMENTS (223.9)$ (231.8)$ BIG BLUE BUS FUND (41) BIG BLUE BUS FY 2017‐18 decrease primarily reflects final funding marks from LA Metro, offset by decrease associated with capital project changes. FY 2018‐19 primarily reflects preliminary funding marks from LA Metro (151.1)$ 5,496.0$ (151.1)$ 5,496.0$ GAS TAX FUND (43) PUBLIC WORKS Reflects increase due to revised estimate of State Gas Tax apportionments 65.2$ ‐$ TOTAL GAS TAX FUND REVENUE ADJUSTMENTS 65.2$ ‐$ LOCAL RETURN FUND (45) PUBLIC WORKS Primarily reflects increase due to addition of Measure M Local Return funds 1,203.5$ ‐$ NON‐DEPARTMENTAL Reflects decrease in Investment Income (66.0)$ ‐$ TOTAL LOCAL RETURN FUND REVENUE ADJUSTMENTS 1,137.5$ ‐$ PARKS & RECREATION FUND (53) COMMUNITY & CULTURAL SERVICES Reflects increase in Unit Dwelling Tax revenue 12.4$ ‐$ 12.4$ ‐$ TOTAL BIG BLUE BUS FUND REVENUE ADJUSTMENTS TOTAL PARKS & RECREATION FUND REVENUE ADJUSTMENTS TOTAL WASTEWATER FUND REVENUE ADJUSTMENTS TOTAL AIRPORT FUND REVENUE ADJUSTMENTS TOTAL STORMWATER MANAGEMENT FUND REVENUE ADJUSTMENTS February 13, 2018 4 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN VEHICLE MANAGEMENT FUND (54) PUBLIC WORKS Primarily reflects contribution adjustment to Fleet Vehicle Replacement Program and Natural Gas Vehicle Incentive Project 214.5$ 48.3$ 214.5$ 48.3$ INFORMATION TECH REPLACEMENT & SERVICES FUND (55) INFORMATION SYSTEMS Reflects contribution adjustment to the Computer Equipment Replacement Program ‐$ 95.7$ ‐$ 95.7$ PARKING AUTHORITY FUND (77) FINANCE Reflects interest on promissory note with the Successor Agency 678.4$ 280.1$ 678.4$ 280.1$ TOTAL NON‐GENERAL FUND REVENUE ADJUSTMENTS 2,432.6$ 7,201.2$ GRAND TOTAL ‐ ALL FUND REVENUE ADJUSTMENTS 11,841.8$ 4,210.3$ CITY COUNCIL Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (14.1)$ (20.5)$ TOTAL CITY COUNCIL EXPENDITURE ADJUSTMENTS (14.1)$ (20.5)$ CITY MANAGER Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (68.5)$ (45.9)$ TOTAL CITY MANAGER EXPENDITURE ADJUSTMENTS (68.5)$ (45.9)$ RECORDS & ELECTION SERVICES Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (17.8)$ (16.5)$ TOTAL RECORDS & ELECTION SERVICES EXPENDITURE ADJUSTMENTS (17.8)$ (16.5)$ FINANCE Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (71.9)$ (52.3)$ TOTAL FINANCE EXPENDITURE ADJUSTMENTS (71.9)$ (52.3)$ CITY ATTORNEY Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (93.8)$ (37.6)$ TOTAL CITY ATTORNEY EXPENDITURE ADJUSTMENTS (93.8)$ (37.6)$ HUMAN RESOURCES Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates, healthcare savings and staffing changes (14.8)$ 25.9$ TOTAL HUMAN RESOURCES EXPENDITURE ADJUSTMENTS (14.8)$ 25.9$ TOTAL VEHICLE MANAGEMENT FUND REVENUE ADJUSTMENTS TOTAL INFORMATION TECH REPLACEMENT & SVCS FUND REVENUE ADJUSTMENTS TOTAL PARKING AUTHORITY FUND REVENUE ADJUSTMENTS EXPENDITURE BUDGET ADJUSTMENTS ($ IN THOUSANDS) GENERAL FUND (01) February 13, 2018 5 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN INFORMATION SERVICES Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates, healthcare savings and staffing changes (48.2)$ (24.2)$ TOTAL INFORMATION SERVICES EXPENDITURE ADJUSTMENTS (48.2)$ (24.2)$ PLANNING & COMMUNITY DEVELOPMENT Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates, healthcare savings, staffing changes, peer review services for the Seismic Retrofit Program, and adjustment to Macerich contract based on reduction in parking revenues (410.9)$ (141.7)$ TOTAL PLANNING & COMMUNITY DEVELOPMENT EXPENDITURE ADJUSTMENTS (410.9)$ (141.7)$ POLICE Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates, healthcare savings and staffing changes (267.2)$ 752.3$ TOTAL POLICE EXPENDITURE ADJUSTMENTS (267.2)$ 752.3$ FIRE Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings 284.6$ 684.8$ TOTAL FIRE EXPENDITURE ADJUSTMENTS 284.6$ 684.8$ COMMUNITY & CULTURAL SERVICES Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (124.1)$ (97.4)$ TOTAL COMMUNITY & CULTURAL SERVICES EXPENDITURE ADJUSTMENTS (124.1)$ (97.4)$ LIBRARY Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit and Coalition agreements and new retirement contribution rates (80.3)$ (60.8)$ TOTAL LIBRARY EXPENDITURE ADJUSTMENTS (80.3)$ (60.8)$ PUBLIC WORKS Reflects cost of living adjustment associated with FY 2017‐18 bargaining unit and Coalition agreements, new retirement contribution rates, and staffing changes (353.0)$ (334.4)$ TOTAL PUBLIC WORKS EXPENDITURE ADJUSTMENTS (353.0)$ (334.4)$ HOUSING & ECONOMIC DEVELOPMENT Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (27.1)$ (22.2)$ TOTAL HOUSING & ECONOMIC DEVELOPMENT EXPENDITURE (27.1)$ (22.2)$ NON‐DEPARTMENTAL All Other Transactions Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, adjustment to reflect lower than anticipated Measure Y and GSH funds to SM‐MUSD, costs associated with bond defeasance for the Public Safety Facility Bonds, debt service payment for the City Services Building, offset by MOU contingency set aside 922.4$ (4,403.4)$ February 13, 2018 6 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN Interfund Transfers Reflects a transfer correction to the Special Revenue Source (04) Fund for the Cultural Services Strategic Sustainability Grant Program, a transfer to the Wastewater (31) Fund to subsidize sewer charges for low‐income households, and a reduction in the transfer to the Special Revenue Source (04) Fund for affordable housing due to lower than anticipated GSH funds (245.0)$ (317.8)$ TOTAL NON‐DEPARTMENTAL EXPENDITURE ADJUSTMENTS 677.4$ (4,721.1)$ (629.5)$ (4,111.9)$ GENERAL FUND ‐ EXPENDITURE OFFSETS Use of reserves for costs associated with the Public Safety Facility Bond Defeasance 1,548.8 ‐ Use of proceeds for the City Services Building bond cost of issuance 464.7 ‐ 2,013.5$ ‐$ (2,643.0)$ (4,111.9)$ SPECIAL REVENUE SOURCE (04) FUND Non‐Departmental Reflects a transfer correction from the General (01) Fund for the Cultural Services Strategic Sustainability Grant Program, the appropriation of Development Agreement funds for Edison improvements, and a reduction in the transfer from the General (01) Fund for the affordable housing program due to lower than anticipated GSH funds 634.2$ 350.8$ Capital Improvement Program Reflects adjustments to the Fourth Court Bike Connection project and Wilshire Blvd Safety Study 270.0$ ‐$ 904.2$ 350.8$ BEACH (11) FUND Community & Cultural Services Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (11.9)$ (9.2)$ Public Works Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (42.9)$ (43.3)$ (54.8)$ (52.5)$ HOUSING AUTHORITY (12) FUND Housing & Economic Development Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates, healthcare savings, reduction in Section 8 Program expenditures due to highly competitive market rental rates (1,805.7)$ (7.8)$ (1,805.7)$ (7.8)$ TOTAL GENERAL FUND ‐ EXPENDITURE OFFSETS TOTAL SPECIAL REVENUE SOURCE FUND EXPENDITURE ADJUSTMENTS TOTAL BEACH FUND EXPENDITURE ADJUSTMENTS NON‐GENERAL FUNDS NET GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL HOUSING AUTHORITY FUND EXPENDITURE ADJUSTMENTS February 13, 2018 7 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN MISCELLANEOUS GRANTS (20) FUND Library Reflects a new Libraries Illuminated grant 28.6$ ‐$ Public Works Reflects adjustments for two reimbursement programs ‐ Used Oil Payment Program and Prop A O+M Maintenance for Palisades Park tree planting 148.2$ ‐$ Capital Improvement Program Reflects additional grant funding for the Edison Language AC Safe Routes proj 200.9$ ‐$ Reflects grant and local match funding for the Traffic Management System 675.6$ ‐$ Reflects the allocation of Caltrans Sustainable Communities Planning Grant award 450.0$ ‐$ 1,503.3$ ‐$ WATER (25) FUND Public Works Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (45.1)$ (40.8)$ Capital Improvement Program Reflects additional costs associated with the expansion of the City's smart water meter pilot program and the instillation of upgraded irrigation control systems 324.1$ ‐$ 279.0$ (40.8)$ RESOURCE RECOVERY AND RECYCLING (27) FUND Public Works Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, new retirement contribution rates, healthcare savings and staffing changes (123.0)$ (128.6)$ (123.0)$ (128.6)$ COMMUNITY BROADBAND (28) FUND Information Systems Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (3.5)$ (1.7)$ TOTAL COMMUNITY BROADBAND FUND EXPENDITURE ADJUSTMENTS (3.5)$ (1.7)$ PIER (30) FUND Police Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (8.6)$ (3.5)$ Public Works Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (9.2)$ (9.1)$ Housing & Economic Development Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (1.3)$ 0.2$ Capital Improvement Program Reflects costs associated with ADA compliant improvements at the Santa Monica Pier carousel 275.0$ ‐$ 255.9$ (12.4)$ TOTAL MISCELLANEOUS GRANTS FUND EXPENDITURE ADJUSTMENTS TOTAL RRR FUND EXPENDITURE ADJUSTMENTS TOTAL WATER FUND EXPENDITURE ADJUSTMENTS TOTAL PIER FUND EXPENDITURE ADJUSTMENTS February 13, 2018 8 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN WASTEWATER (31) FUND Public Works Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates, healthcare savings, and the reduction of the Amalgamated System Sewerage System Charge from Los Angeles Sanitation (2,052.9)$ (14.4)$ Non‐Departmental Reflects the reduction in the payment from the Stormwater Fund (34) to the Wastewater fund (31) and transfer from the General (01) Fund (01) to subsidize sewer charges for low‐income households 367.0$ 367.0$ Capital Improvement Program Reflects the reduction in the Hyperion Capital Payment due to a recalculation based on actual sewer flows (1,581.2)$ ‐$ (3,267.1)$ 352.6$ AIRPORT (33) FUND Public Works Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates, healthcare savings, additional lease brokerage and property management services costs 743.4$ (88.6)$ 743.4$ (88.6)$ STORMWATER MANAGEMENT (34) FUND Non‐Departmental Reduction in the transfer from the Stormwater Fund (34) to the Wastewater Fund (31)(400.0)$ (400.0)$ (400.0)$ (400.0)$ CEMETERY (37) FUND Public Works Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (12.8)$ (9.6)$ (12.8)$ (9.6)$ BIG BLUE BUS (41) FUND Big Blue Bus Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates, healthcare savings and staffing changes (487.2)$ (335.9)$ (487.2)$ (335.9)$ VEHICLE MANAGEMENT (54) FUND Public Works Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (35.8)$ (34.6)$ (35.8)$ (34.6)$ INFORMATION TECHNOLOGY REPLACEMENT & SERVICES FUND (55) FUND Capital Improvement Program Reflects the cost of replacement network switches and security enhancements solutions 300.0$ ‐$ 300.0$ ‐$ TOTAL WASTEWATER FUND EXPENDITURE ADJUSTMENTS TOTAL AIRPORT FUND EXPENDITURE ADJUSTMENTS TOTAL CEMETERY FUND EXPENDITURE ADJUSTMENTS TOTAL BIG BLUE BUS FUND EXPENDITURE ADJUSTMENTS TOTAL VEHICLE MANAGEMENT FUND EXPENDITURE ADJUSTMENTS TOTAL STORMWATER MANAGEMENT FUND EXPENDITURE ADJUSTMENTS TOTAL INFORMATION TECHNOLOGY REPLACEMENT & SERVICES FUND ADJUSTMENTS February 13, 2018 9 of 10 ATTACHMENT A Fund / Department Description FY 2017‐18 Increase / (Decrease) FY 2018‐19 Increase / (Decrease) FY 2017‐18 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS / FY 2018‐19 BUDGET PLAN RISK MANAGEMENT ‐ ADMIN (58) FUND Finance Reflects cost of living adjustment associated with FY 2017‐19 bargaining unit agreements, revised retirement contribution rates and healthcare savings (10.4)$ (4.2)$ (10.4)$ (4.2)$ (2,214.4)$ (413.3)$ TOTAL GENERAL FUND REVENUE ADJUSTMENTS 9,409.2$ (2,990.9)$ TOTAL NON‐GENERAL FUND REVENUE ADJUSTMENTS 2,432.6$ 7,201.2$ GRAND TOTAL FY 2017‐19 ALL FUNDS REVENUE ADJUSTMENTS 11,841.8$ 4,210.3$ TOTAL GENERAL FUND EXPENDITURE ADJUSTMENTS (629.5)$ (4,111.9)$ TOTAL NON‐GENERAL FUND EXPENDITURE ADJUSTMENTS (2,214.4)$ (413.3)$ GRAND TOTAL FY 2017‐19 ALL FUNDS EXPENDITURE ADJUSTMENTS (2,843.9)$ (4,525.2)$ TOTAL GENERAL FUND ‐ EXPENDITURE OFFSETS 2,013.5$ ‐$ ‐$ ‐$ 2,013.5$ ‐$ NET GENERAL FUND EXPENDITURE ADJUSTMENTS (2,643.0)$ (4,111.9)$ (2,214.4)$ (413.3)$ (4,857.4)$ (4,525.2)$ NET NON‐GENERAL FUND EXPENDITURE ADJUSTMENTS GRAND TOTAL FY 2017‐19 NET ALL FUNDS EXPENDITURE ADJUSTMENTS GRAND TOTAL FY 2017‐19 ALL FUNDS ‐ EXPENDITURE OFFSETS TOTAL NON‐GENERAL FUND ‐ EXPENDITURE OFFSETS TOTAL NON‐GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL RISK MANAGEMENT ‐ ADMIN FUND EXPENDITURE ADJUSTMENTS February 13, 2018 10 of 10 ATTACHMENT C RE A S O N Fu n d D e p t F T E P o s i t i o n T i t l e F u n d D e p t F T E P o s i t i o n T i t l e P r i m a r y R e a s o n Net FTE ChangeNet $ Change 41 B B B 1 . 0 P r o c u r e m e n t S u p e r v i s o r 4 1 B B B 1 . 0 W a r e h o u s e / P r o c u r e m e n t S u p e r v i s o r T i t l e c h a n g e - n o s a l a r y chan g e - - 41 B B B 1 . 0 T r a n s i t C o m m u n i t y & G o v e r n m e n t E n g a g em e n t M a n a g er 4 1 B B B 1 . 0 S t r a t e g ic T r a n s i t P l a n n e r R e o r g an i z a t i o n - (30,409 ) 01 C A O 1 . 0 A ss i s t a n t C i t y A t t o r n e y 01 C A O 1 . 0 S p e c i a l C o u n s e l / C h i e f o f S t a f f Ti t l e c h a n g e - n o s a l a r y chan g e - - 01 C i t y C o u n c i l 1 . 0 C o u n c i l O f f i c e C o o r d i n a t o r 0 1 C i t y C o u n c i l 1 . 0 C o u n c i l O f f i c e a n d L e g is l a t i v e A f f a i r s L i a i s o n R e c l a s s i f i c a t i o n 2 - - 01 C M O 5 . 0 P u b l i c S a f e t y S u p e r v i s o r 0 1 C M O 5 . 0 P u b l i c S a f e t y D i s p a t c h S u p e r v i s o r T i t l e c h a n g e - n o s a l a r y chan g e - - 01 C M O 1 . 0 P u b l i c S a f e t y A d m i n i s t r a t o r 0 1 C M O 1 . 0 P u b l i c S a f e t y D i s p a t c h A d m i n i s t r a t o r T i t l e c h a n g e - n o s a l a r y chan g e - - 01 C M O 0 . 5 V o l u n t e e r P r o g ra m C o o r d i n a t o r 0 1 C M O 0 . 5 C o m m u n i t y E n g a g em e n t C o o r d i n a t o r T i t l e c h a n g e - n o s a l a r y chan g e - - 01 F i n a n c e 1 . 0 A cc o u n t a n t - C o l l e c t i o n s 0 1 F i n a n c e 1 . 0 F i s c a l S t a f f A s s i s t a n t I I I O p e r a t i o n a l c h a n g e 3 - - 01 H R 1 . 0 E x e c u t i v e A d m i n i s t r a t i v e A s s i s t a n t 0 1 H R 1 . 0 E x e c u t i v e A d m i n i s t r a t i v e A s s i s t a n t - H R T i t l e c h a n g e - n o s a l a r y chan g e - - 01 H R 1 . 0 H u m a n R e s o u r c e s A s s i s t a n t 0 1 H R 1 . 0 S e n i o r H u m a n R e s o u r c e s A n a l y st O p e r a t i o n a l c h a n g e - 2 2 , 0 5 2 01 H R 1 . 0 S e n i o r H u m a n R e s o u r c e s A n a l y st 0 1 H R 1 . 0 S e n i o r H u m a n R e s o u r c e s A n a l y st E q u i t y A d j us t m e n t 4 - 80 01 H R 3 . 0 S e n i o r H u m a n R e s o u r c e s A n a l y st 0 1 H R 3 . 0 S e n i o r H u m a n R e s o u r c e s A n a l y st E q u i t y A d j us t m e n t 4 - 240 01 H R 1 . 0 S e n i o r H u m a n R e s o u r c e s A n a l y st 0 1 H R 1 . 0 S e n i o r H u m a n R e s o u r c e s A n a l y st E q u i t y A d j us t m e n t 4 - 80 01 H R 1 . 0 O r g an i z a t i o n a l D e v e l o p m e n t a n d T r a i n i n g A d m i n i s t r a t o r 0 1 H R 1 . 0 O r g an i z a t i o n a l D e v e l o p m e n t a n d T r a i n i n g A d m i n i s t r a t o r E q u i t y A d j us t m e n t 4 - 80 01 H R 1 . 0 H u m a n R e s o u r c e s I n f o S y st e m s A n a l y st (Li m i t e d T e r m ) 01 H R 1 . 0 H u m a n R e s o u r c e s I n f o S y st e m s A n a l y st (Li m i t e d T e r m ) Eq u i t y A d j us t m e n t 4 - 80 01 I S D 1 . 0 C o m m u n i c a t i o n s S y st e m T e c h n i c i a n 0 1 I S D 1 . 0 C o m m u n i c a t i o n s S y st e m T e c h n i c i a n D i v i s i o n c h a n g e - - 01 I S D 1 . 0 C h i e f I n f o r m a t i o n O f f i c e r 0 1 I S D 1 . 0 C h i e f I n f o r m a t i o n O f f i c e r D i v i s i o n T i t l e C h a n g e - - 01 I S D 1 . 0 I n f o r m a t i o n S e c u r i t y O f f i c e r 0 1 I S D 1 . 0 I n f o r m a t i o n S e c u r i t y O f f i c e r D i v i s i o n T i t l e C h a n g e - - 01 I S D 1 . 0 A dm i n i s t r a t i v e S e r v i c e s O f f i c e r 0 1 I S D 1 . 0 A dm i n i s t r a t i v e S e r v i c e s O f f i c e r D i v i s i o n T i t l e C h a n g e - - 01 I S D 1 . 0 I n f o r m a t i o n S e c u r i t y A n a l y st 0 1 I S D 1 . 0 I n f o r m a t i o n S e c u r i t y A n a l y st D i v i s i o n T i t l e C h a n g e - - 01 I S D 1 . 0 P r o j ec t P o r t f o l i o M a n a g er 0 1 I S D 1 . 0 P r o j ec t P o r t f o l i o M a n a g er D i v i s i o n c h a n g e - E q u i t y ad j ustment 5 - 5,922 01 I S D 1 . 0 T e c h n o l o gy T r a i n i n g C o o r d i n a t o r 0 1 I S D 1 . 0 T e c h n o l o gy T r a i n i n g C o o r d i n a t o r D i v i s i o n T i t l e C h a n g e - - 01 I S D 1 . 0 E x e c u t i v e A d m i n i s t r a t i v e A s s i s t a n t 0 1 I S D 1 . 0 E x e c u t i v e A d m i n i s t r a t i v e A s s i s t a n t D i v i s i o n T i t l e C h a n g e - - 01 I S D 1 . 0 A dm i n i s t r a t i v e S t a f f A s s i s t a n t 0 1 I S D 1 . 0 A dm i n i s t r a t i v e S t a f f A s s i s t a n t D i v i s i o n T i t l e C h a n g e - - 01 I S D 1 . 0 W e b D e v e l o p m e n t M a n a g er 0 1 I S D 1 . 0 D i g it a l T r a n s f o r m a t i o n a n d D e v e l o p m e n t M a n a g er T i t l e c h a n g e - n o s a l a r y chan g e - - 01 I S D 1 . 0 D a t a O f f i c e r 0 1 I S D 1 . 0 D a t a O f f i c e r D i v i s i o n T i t l e C h a n g e - - 01 I S D 2 . 0 G I S A n a l y st 0 1 I S D 2 . 0 G I S A n a l y st D i v i s i o n T i t l e C h a n g e - - 01 I S D 3 . 0 W e b D e v e l o p e r 0 1 I S D 3 . 0 W e b D e v e l o p e r D i v i s i o n T i t l e C h a n g e - - 01 I S D 1 . 0 I n t e r n e t S y st e m s A n a l y st 0 1 I S D 1 . 0 P r o j ec t P o r t f o l i o C o o r d i n a t o r D i v i s i o n c h a n g e - T i t l e c h a n g e - - 01 P C D 2 . 0 T r a f f i c S i g na l T e c h n i c i a n 0 1 P C D 2 . 0 T r a f f i c S i g na l T e c h n i c i a n E q u i t y A d j us t m e n t 6 - 862 01 P o l i c e 1 . 0 C r i m i n a l I n v e s t i g at i v e S u p p o r t S p e c i a l i s t 0 1 P o l i c e 1 . 0 I n v e s t i g at i v e I n t e l l i g en c e A n a l y st O p e r a t i o n a l c h a n g e - 1 , 4 8 5 01 P W 1 . 0 A dm i n i s t r a t i v e A n a l y st - E n g in e e r i n g 01 P W 1 . 0 S e n i o r A d m i n i s t r a t i v e A n a l y st O p e r a t i o n a l c h a n g e - 4 , 3 0 6 01 P W 1 . 0 C i v i l E n g in e e r 0 1 P W 1 . 0 S u p e r v i s i n g C i v i l E n g in e e r O p e r a t i o n a l c h a n g e - 7 , 1 1 4 01 P W 1 . 0 C i v i l E n g in e e r 0 1 P W 1 . 0 C i v i l E n g in e e r i n g A s s i s t a n t O p e r a t i o n a l c h a n g e - (23,850 ) 27 P W 1 . 0 M a i n t e n a n c e W o r k e r 2 7 P W 1 . 0 W a r e h o u s e W o r k e r O p e r a t i o n a l c h a n g e - 5 1 8 0.0 FTE (11,440) GR A N D T O T A L 0 . 0 F T E ( 1 1 , 4 4 0 ) PO S I T I O N A N D C L A S S I F I C A T I O N C H A N G E S DE L E T E A D D SUBTOTALS 1 1. S a l a r y t o t a l s i n c l u d e f r i n g e c o s t s a n d a r e p r o - r a t e d f o r t h e r e m a i n i n g 5 m o n t h s o f F Y 2 0 1 7 - 1 8 . PE R M A N E N T E M P L O Y E E S T O T A L 3. N e t s a v i n g s w i l l b e u s e d f o r E x c e p t i o n B a s e d B u d g e t c h a n g e s . 2. C l e a n - u p f r o m C o m p e n s a t i o n / C l a s s i f i c a t i o n S t u d y . 6. C l e a n - u p e q u i t y b a s e d o n M E A n e g o t i a t i o n s . 4. C l e a n - u p f r o m r e v i e w o f C o n f i d e n t i a l U n r e p r e s e n t e d E m p l o y e e s U n i t . 5. E q u i t y b a s e d o n a d d i t i o n a l s u p e r v i s o r y d u t i e s . February 13, 2018 February 13, 2018 Financial Status Update & FY 2017-18 Midyear Budget Economic Update •Recession ahead? •Some risks to State economy/ budget •Global and regional behavior shifts affecting Santa Monica •Leveling and decreases in some Santa Monica revenues 2 REVENUES $9.4M •$8.0M settlement early payment (one-time) •$1.4M ongoing •Tax revenues •Fees & parking ONGOING OPERATING -$2.6M •-$3.0M PERS savings •-$1.7M Healthcare savings •-$1.2M due to lower revenues •$3.9M bond payments Midyear Adjustments-General Fund 3 ü $1.0M set-aside for Civic Center Field fully funds construction 4 General Fund Five Year Forecast: Revenues and Expenditures $3.9M Best -$10.6M Probable -$29.0M Worst($30) ($25) ($20) ($15) ($10) ($5) $0 $5 $10 $15 $20 $25 $30 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 Other Funds Status •Self-Sustaining •Wastewater, Water, RRR, BBB, Airport, Beach, Community Broadband •Requiring Subsidy/Loan •Pier, Housing, Cemetery 5 REVENUES $2.4M •+ Local Return •+CDBG •-Housing Authority CAPITAL PROJECTS $0.9M •Grants •Water •Wastewater ONGOING OPERATING -$3.1M •Healthcare savings •PERS paydown savings •Section 8 Program •Wastewater budget correction Midyear Adjustments-Other Funds 6 Council Study Session Confirm FY 2018-19 Budget / Develop FY 2018-20 CIP Budget Midyear Report / Financial Status Update Budget Adoption Biennial Budget Process February 2018 February-April 2018 May 22, 2018 June 12, 2018 8 •Receive the financial status update •Approve midyear adjustments, position and classification changes •Adopt a resolution establishing classification and salary rates •Authorize City Manager to accept grant awards •Receive public comments for CDBG/ HOME funding plans Recommended Actions REFERENCE: Resolution No. 11097 (CCS) & Resolution No. 11098 (CCS)