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SR 02-12-2019 8A City Council Housing Authority Parking Authority Report City Council Meeting: February 12, 2019 Agenda Item: 8.A 1 of 4 To: Housing Authority, Parking Authority, Mayor and City Council From: Gigi Decavalles-Hughes, Director, Finance Department, Budget Lori Gentles, Chief People Officer, Human Resources Department Subject: Approval of Fiscal Year 2018-19 Midyear Budget Recommended Action Staff recommends that the City Council, Housing Authority and Parking Authority approve changes to the FY 2018-19 Revised Budget as detailed in Attachment A. Staff also recommends that the City Council adopt a Resolution establishing new classifications and adopting salary rates for various positions as detailed in Attachment B. Summary This report presents proposed midyear budget changes for FY 2018 -19. Proposed revenue adjustments result in a $10.1 million, or 1.4% increase over the citywide revenue budget. Approximately 58% ($5.8 million) of the increase is in the Big Blue Bus Fund reflecting final funding from Metro. The remaining revisions are in the General Fund reflecting a $4.3 million increase over budget (approximately 1%). E ven with the changes, the increase in General Fund revenues over the prior year (exclusive of certain one-time items) is a modest 2.6%. Expenditure adjustments result in a net $0.8 million or a 0.1% increase over the citywide expenditure budget. These proposed operating budget adjustments align with the revenue and expenditure projections reflected in the Ten-Year Financial Forecast presented to Council on January 22, 2019. Discussion The midyear budget review analyzes the budget status at the mid -point of the fiscal year and provides an opportunity to adjust revenue projections and make expenditure appropriation changes. At midyear, staff recommends revenue budget changes based 2 of 4 on actual performance and new information, and proposes adjustments to the expenditure budgets that are directly related to the proposed revenue changes. Revenue Adjustments – General Fund Recommended revenue adjustments to the FY 2018-19 budget result in a net increase of $4.3 million. Significant increases include:  $1.3 million from transient occupancy taxes reflecting a continuing increase in average room rates. However, the projected increase over the prior year of 2.1% is lower than increases over the prior few years.  $1.2 million from mobility public right of way fees/administrative citations.  $1.1 million from sales taxes (including Measure GSH) primarily reflecting payments that were originally due in FY 2017-18 but delayed due to State reorganization of the sales tax administration function.  $0.9 million from documentary transfer taxes reflecting the sale of several very large properties.  $0.9 million from investment income as interest rates have risen faster than anticipated.  $0.8 million from parking revenues reflecting the full year impact of rate increases in City-owned lots and structures partially offset by decreased on -street meter revenues. Significant decreases include:  -$0.8 million from parking citation fines reflecting decreased issuance.  -$0.4 million from property taxes (former RDA residual taxes).  -$0.4 million from business license taxes reflecting less taxes paid by some large taxpayers due to the volatile nature of their businesses.  -$0.5 million from bike share fees due to competition from dockless mobility options. Revenue Adjustments – Other Funds Revenue adjustments in other funds include: 3 of 4  Big Blue Bus Fund (60) – increase of $5.8 million to reflect higher than projected funding marks from LA Metro. A full listing of revenue adjustments is included in Attachment A. Operating Expenditure Adjustments – General Fund FY 2018-19 proposed General Fund operating expenditure appropriations result in an increase of $0.8 million:  $0.4 million increase to reflect higher 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.  $0.4 million increase to adjust the portion of Parking Structure 7 and 8 revenues paid to Macerich as a result of higher than anticipated parking revenues. This adjustment is consistent with the contractual agreement with Macerich. Personnel Changes This report includes position changes to reflect ongoing operations. A Salary Resolution detailing new classifications and salary rates is reflected in Attachment B. Past Council Actions Meeting Date Description 6/12/18 (Attachment C) Adoption of the Second Year of the Fiscal Year (FY) 2017-19 Biennial Budget, Adoption of the First Year and Approval of the Second Year of the FY 2018-20 Biennial Capital Improvement Program Budget 11/27/18 (Attachment D) FY 2017-18 Year-End Budget Changes; and FY 2018-19 Budget, Position and Compensation Changes Financial Impacts and Budget Actions Recommended FY 2018-19 midyear budget adjustments result in a $10.1 million, or a 1.4% increase over the citywide revenue budget, and expenditure adjustments result in a net $0.8 million or a 0.1% increase over the citywide expenditure budget. Detail for FY 2018-19 midyear adjustments is in Attachment A. 4 of 4 Prepared By: Susan Lai, Budget Manager Approved Forwarded to Council Attachments: A. FY 2018-19 Mid-Year Budget Adjustments B. Finance - Reso - Mid-Year Budget Salary - 02.12.2019 C. June 12, 2018 Staff Report (web link) D. November 27, 2018 Staff Report (web link) ATTACHMENT A Fund / Department Description  FY 2018‐19  Increase /  (Decrease)  PLANNING & COMMUNITY  DEVELOPMENT Reflects revenues from Shared Mobility Public Right Of Way Fees from the  Shared Mobility Pilot Program that began September 2018 and Mobility  Administrative Citations 1,201.0$         Reflects increase in parking revenues in City parking lots and structures due  to increased parking rates, offset by decrease in On Street Meter revenues 839.7$             Reflects decrease in revenues from Bikeshare Program Fees due to  competition from dockless mobility options (507.3)$           TOTAL PLANNING & COMMUNITY DEVELOPMENT REVENUE ADJUSTMENTS 1,533.4$        POLICE Reflects decrease in issuance of parking citations due to various street  meters being unenforceable because of battery issues that have since been  resolved, unanticipated use of TSOs for traffic enforcement rather than  parking enforcement during special events, the suspension of enforcement  during Woolsey Fire, and staffing shortages due to injuries (800.0)$           TOTAL POLICE  REVENUE ADJUSTMENTS (800.0)$          NON‐DEPARTMENTAL Transient Occupancy Tax ‐ Primarily due to higher than anticipated room  rental rates as tourism remains strong 1,300.0$         Sales and Use Tax/Transaction and Use Tax ‐ Increase primarily reflects  timing change of payments from State.  Payment of a portion of FY 2017‐18  taxes due the City were not paid to the City until FY 2018‐19 due to the State  shifting the collection and payment function from the Board of Equalization  to the new Department of Tax and Fee Administration 1,054.0$         Investment Income ‐ Reflects faster than expected growth in interest rates 900.0$            Documentary Transfer Tax ‐ Primarily reflects one‐time transfer of several  large properties 863.0$             Statutory Pass‐Throughs ‐ Primarily reflects higher than anticipated  payments from former Redevelopment Agency project areas.  Total  percentage of tax increment revenues allocated to statutory pass‐through  agencies increased from prior years 498.1$             Parking Facility Tax ‐ Reflects greater revenues from City‐owned facilities  primarily reflecting increased parking rates 100.0$             Utility Users Tax ‐ Based on year‐to‐date results, taxes from electricity  greater than expected, partially offset by greater than expected decrease in   telecommunication taxes 94.0$               VLF (Vehicle License Fee) Swap ‐ Final funding levels from Los Angeles  County reconciling the end of a 2004 swap of city and county vehicle license  fee revenues for additional property tax share as a part of a state‐local  budget agreement.59.6$               FY 2018‐19 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS REVENUE BUDGET ADJUSTMENTS ($ IN THOUSANDS) GENERAL FUND (01) 1 of 2 ATTACHMENT A Fund / Department Description  FY 2018‐19  Increase /  (Decrease)  FY 2018‐19 MIDYEAR REVENUE AND EXPENDITURE BUDGET ADJUSTMENTS Discount on PERS Prepayment ‐ Revision reflects actual prepayment amount,  which had not been finalized at the time of budget adoption (16.1)$             Business License ‐ Taxes paid by certain large taxpayers, whose gross receipts  can vary significantly year due to the nature of their business, were slightly  less than anticipated (356.0)$           RPTTF Residuals ‐ Primarily due to less than anticipated residual property tax  increment from former RDA areas reflecting an adjustment in the payment  schedule of loans between the City and the Successor Agency (971.7)$           TOTAL NON‐DEPARTMENTAL REVENUE ADJUSTMENTS 3,524.9$        TOTAL GENERAL FUND REVENUE ADJUSTMENTS 4,258.3$         BIG BLUE BUS FUND (60) BIG BLUE BUS Primarily reflects final funding marks from LA Metro 5,835.0$         5,835.0$         TOTAL NON‐GENERAL FUND REVENUE ADJUSTMENTS 5,835.0$         GRAND TOTAL ‐ ALL FUND REVENUE ADJUSTMENTS 10,093.3$       PLANNING & COMMUNITY  DEVELOPMENT Reflects adjustment to Macerich contract based on increased parking  revenues due to increased parking rates 352.5$             352.5$             NON‐DEPARTMENTAL All Other Transactions Reflects adjustment to reflect higher than anticipated Measure Y and GSH  funds to SMMUSD 440.3$             TOTAL NON‐DEPARTMENTAL EXPENDITURE ADJUSTMENTS 440.3$            792.7$           TOTAL GENERAL FUND REVENUE ADJUSTMENTS 4,258.3$         TOTAL NON‐GENERAL FUND REVENUE ADJUSTMENTS 5,835.0$         GRAND TOTAL FY 2018‐19 ALL FUNDS REVENUE ADJUSTMENTS 10,093.3$       TOTAL GENERAL FUND EXPENDITURE ADJUSTMENTS 792.7$             TOTAL NON‐GENERAL FUND EXPENDITURE ADJUSTMENTS ‐$                 GRAND TOTAL FY 2018‐19 ALL FUNDS EXPENDITURE ADJUSTMENTS 792.7$            EXPENDITURE BUDGET ADJUSTMENTS ($ IN THOUSANDS) GENERAL FUND (01) TOTAL GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL BIG BLUE BUS FUND REVENUE ADJUSTMENTS TOTAL PLANNING & COMMUNITY DEVELOPMENT EXPENDITURE ADJUSTMENTS NON‐GENERAL FUNDS 2 of 2 ATTACHMENT B 1 City Council Meeting: February 12, 2019 Santa Monica, California RESOLUTION NUMBER _________ (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ESTABLISHING NEW CLASSIFICATIONS AND ADOPTING SALARY RATES FOR ADMINISTRATIVE INTERN I, ADMINISTRATIVE INTERN II, ASSISTANT DIRECTOR – PUBLIC WORKS, ASSISTANT POLICE CHIEF AS-NEEDED, CITY HEARING OFFICER I, CITY HEARING OFFICER II, DEPUTY FIRE CHIEF AS-NEEDED, PRINCIPAL PAYROLL AND FINANCIAL SYSTEMS ANALYST, SPECIAL PROJECTS ADMINISTRATOR – PCD. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: SECTION 1. The following salary levels are hereby established, effective February 12, 2019, for the indicated permanent classifications: ASSISTANT DIRECTOR – PUBLIC WORKS $16,142/month, Step 5 CITY HEARING OFFICER I $10,538/month, Step 5 CITY HEARING OFFICER II $14,401/month, Step 5 PRINCIPAL PAYROLL AND FINANCIAL SYSTEMS ANALYST $10,559/month, Step 5 SPECIAL PROJECTS ADMINISTRATOR – PCD $11,576/month, Step 5 SECTION 2. The following salary levels are hereby established, effective December 9, 2018, for the indicated as-needed classification: ASSISTANT POLICE CHIEF AS-NEEDED $112.29/hour ATTACHMENT B 2 SECTION 3. The following salary levels are hereby established, effective February 12, 2019, for the indicated as-needed classifications: ADMINISTRATIVE INTERN I $16.10/hour ADMINISTRATIVE INTERN II $17.31/hour DEPUTY FIRE CHIEF AS-NEEDED $122.76/hour SECTION 4. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: Lane Dilg City Attorney REFERENCE: Resolution No. 11162 (CCS)