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SR 11-12-2019 8D City Council Housing Authority Parking Authority Report City Council Meeting: November 12, 2019 Agenda Item: 8.D 1 of 10 To: Housing Authority, Parking Authority, Mayor and City Council From: Gigi Decavalles-Hughes, Director, Finance Department, Budget Susan Cline, Director, Public Works Department, Lori Gentles, Chief People Officer, Human Resources Department Subject: FY 2018-19 Year-End Budget Changes; and FY 2019-20 Budget, Position and Compensation Changes Recommended Action Staff recommends that the City Council, Housing Authority and Parking Authority: 1. Approve changes to the FY 2018-19 Revised Budget as detailed in Attachment A; 2. Approve changes to the FY 2019-20 Adopted Budget and FY 2020-21 Budget Plan as detailed in Attachment B. Staff also recommends that the City Council: 1. Review the City’s year-end financial status; 2. Approve proposed measures to mitigate new financial challenges, including a one-year suspension of the Expenditure Control Program and a new capital program strategy; 3. Adopt a Resolution of the City of Santa Monica establishing new classifications and adopting salary rates for various listed position s (Attachment C) and approve the position and classification changes (Attachment D); and 4. Adopt a Resolution of the City of Santa Monica supporting the Santa Monica Police Department to provide transit security and law enforcement services to the Big Blue Bus for a 19-month pilot program (Attachment E). Summary The year-end budget report is an opportunity to pause and take note of how the City’s budgeted targets compare to actual revenues and spending. While City department staff carefully manage their spending throughout the year, external forces that require intensified service delivery or changes in the economy can negatively impact our fiscal performance. 2 of 10 For several years, we have anticipated and prepared for flattening revenue growth in the General Fund. FY 2018-19 marks the point at which our actual General Fund spending and income is tracking very closely along budgeted numbers; we are no longer realizing significant revenue overages as a result of that anticipated flattening. Similarly, this year marks a turning point where spending tracked closely to the budget without leaving major expenditure savings. This report summarizes the performance of the City’s past fiscal year and highlights areas that we will need to further analyze and address, potentially through adjustments, as we enter our exception-based budget process for the FY 2020-21 Budget. The General Fund ended FY 2018-19 with revenues $1.4 million greater than estimated actuals and operating expenditures $0.2 million under budget, for a net $1.6 million positive impact as compared to budget. As a comparison, in the past 5 years, the City has realized an average positive impact of $12.9 million as compared to budget (annual surplus amounts have been decreasing steadily since FY 2013 -14, due to reallocations to new programs, increased pension, healthcare and workers’ compensation costs, and moderation of revenue growth). Ultimately in FY 2018-19, total General Fund revenues exceeded expenditures by $6.4 million, as had been forecast. $4.5 million of this amount was previously tagged to offset the first two payments of the City’s accelerated unfunded pension liability paydown. These reflect unaudited year-end results. As in past years, staff recommends that surplus funds, the majority of which are one- time, be appropriated or set-aside as assignments in the fund balance for one-time capital and operating project contingencies. Non-General funds ended the year with revenues $2.6 million more than estimated actuals, and operating expenditures $25.3 million below budget, for a $27.9 million positive impact compared to budget. These funds will build reserves, fund ongoing operations, and support future capital projects. Staff recommends a net total of $14.4 million in citywide expenditure adjustments to the FY 2018-19 Revised Budget to align the budget with accounting actions taken during 3 of 10 the year. Approximately $10 million of these adjustments are appropriating funds previously set aside in General Fund reserves pending actual spending, for a total net impact on the City’s finances of $4.4 million. Staff also recommends $2.1 million in expenditure adjustments in FY 2019-20. These changes include re-appropriation of one-time funds and staffing and classification-related adjustments. Discussion The year-end report provides Council with an overview of the City’s financial performance as compared to budget, and aligns budget with operational shifts and accounting actions whose impacts were not known until recent months. 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 2020, as well as the exception-based budget process that will be completed in June 2020. FY 2018-19 Budget Year-End Status General Fund The City ended the year with slightly greater than anticipated revenues than budgeted. Excluding year-end Governmental Accounting Standards Board (GASB) Statement No. 31 adjustments for unrealized gains/losses from investments and restricted interest on bond proceeds, General Fund revenues were $1.4 million, or 0.3%, greater than the FY 2018-19 most recent budget target (the “estimated actual”). Notably, a large portion of the over-realized revenue was one-time in nature and was offset by an under- realization of $600,000 in key ongoing revenue streams including transient occupancy taxes and utility user taxes. Including the adjustments requested in this report, General Fund actual operating expenditures were under budget by approximately $0.2 million. A number of departments achieved expenditure savings; however, these were offset by overages in Police and Fire Department overtime. Police Department overtime reflects the Department’s deliberate changes to respond to a three-year rise in crime. These include the continuing impact of Proposition 47, a 14% increase in arrests requiring officers to appear in court outside of their patrol duty, time required to transition a 4 of 10 number of newly-hired officers in training to the Police force, and coverage for personnel who are recovering from injuries. The Fire Department exceeded its budget due to mutual aid strike team deployments for which the City was fully reimbursed , and unbudgeted expenses for a recruitment academy and a pilot program focusing on the City’s homeless population. Total General Fund revenues exceeded expenditures by $6.4 million, as had been forecast (the City follows the fiscally-prudent practice of not appropriating the entire anticipated revenue amount to expenditures). While year-end savings, by default, revert to fund balances, re-appropriating a portion of the funds to the next year’s budget, or assigning fund balance for future uses, provides an opportunity to address unfunded critical or emerging needs. Staff recommends that $4.5 million of the $6.4 million in FY 2018-19 General Fund savings be appropriated to cover portions of the FY 2019-20 and FY 2020-21 payments for the accelerated paydown of the City’s unfunded pension liability, and the remainder be set aside as an assignment in the fund balance to provide a contingency for unanticipated one-time costs. Other Funds Significant revenue variances in other funds in FY 2018 -19 include: • Airport Fund – FY 2018-19 revenues were $5 million less than the estimated actual, primarily due to the City not assuming control of the Fixed Based Operator at the Airport. These were accompanied by $5 million in expenditure savings. • Big Blue Bus Fund – The Big Blue Bus’s capital revenue budget is based on projected reimbursable expenditures associated with capital projects. FY 2018-19 revenues were $7.6 million less than the estimated actual primarily due to timing changes associated with capital improvement projects. • Housing Authority Fund – FY 2018-19 revenues were $1 million greater than the estimated actual primarily due to the receipt of new program revenues and prior year revenues for the Section 8 Housing Assistance program. 5 of 10 • Miscellaneous Grants Fund – FY 2018-19 revenues were $2.1 million greater than the estimated actual, reflecting the timing of the receipt of funds for certain grants. • Pier Fund – FY 2018-19 revenues were $1.1 million greater than the estimated actual primarily due to higher than expected percentage of sales rent revenue. • Special Revenue Source Fund – FY 2018-19 revenues were $5.1 million greater than the estimated actual primarily due to timing of receipt of certain developer fees. • Wastewater Fund – FY 2018-19 actuals were $1.9 million greater than estimated actuals primarily due to greater than anticipated sewer service charges, capital facility fees, and investment income. • Water Fund – FY 2018-19 actuals were $2.5 million greater than estimated actuals primarily due to greater than anticipated development related fees and more investment income. Other funds ended the fiscal year with expenditures $25.3 million, or 13%, below budget. Savings in other funds were primarily due to approximately 55 vacant positions throughout the year; savings from the Fixed Based Operator in the Airport Fund ($5 million); savings due to lower than anticipated water purchases from Metropolitan Water District and water conservation rebates in the Water Fund ($4.8 million); less use of Liquid Natural Gas (LNG) fuel and savings from outside repairs in the BBB Fund ($4.4 million); and timing of grant expenditures ($1.7 million). These savings were offset by higher than anticipated liability claim payments in the City’s self-insurance funds and higher than anticipated expenses in the Pier Fund. The Housing Authority Fund required a subsidy of $0.3 million from the affordable housing set-aside funds, which is less than the projected subsidy of $0.7 million. FY 2018-19 Operating and Capital Budget Changes Operating Budget Recommended changes detailed in Attachment A include $14.4 million in adjustments: a $63.9 million increase in the General Fund and a $49.5 million decrease in the other 6 of 10 funds. Significant General Fund changes include an adjustment of $53.4 million to reflect the Council’s November 27, 2018 decision to transfer Gillette/Boeing settlement funds from the General Fund to the Water Fund to restore the Olympic Sub-basin, which would allow additional water production from that sub-basin to support achievement of water self-sufficiency; appropriation of $5.5 million in fund balance previously set aside for various legal expenses to departments based on actual spending; and appropriation of $1.8 million in fund balance previously set aside to reinforce the fund balance of the Workers’ Compensation Self Insurance Fund. In other funds, significant budget adjustments include the transfer of the same $53.4 million in Gillette/Boeing settlement funds noted above to the Water Fund, and an appropriation of $2.8 million for payment of liability claims from the City’s self-insurance funds. Capital Budget Recommended changes to the FY 2018-19 capital budget detailed in Attachment A include a net budget increase of approximately $0.6 million, $0.52 million of which is in the Miscellaneous Grants Fund. FY 2019-20 Operating and Capital Budget Changes Operating Budget Recommended changes detailed in Attachment B include $2.1 million in adjustments: a $1.8 million increase in the General Fund and a $0.3 million increase in other funds. General Fund budget changes reflect personnel changes, MOU changes, computer equipment replacement program contributions, and re-appropriation of FY 2018-19 operating unspent funds to address homelessness and payment of utility bills. Other fund budget changes reflect personnel changes and an operating transfer from the Big Blue Bus Fund to reimburse the General Fund for costs of two police officers who will provide security services on BBB buses and bus stops as part of a 19-month pilot program. 7 of 10 Staff recommends that the City Council adopt a resolution supporting and setting the reimbursement rate for the Santa Monica Police Department’s provision of transit security and law enforcement services to the BBB (Attachment E). Personnel Changes This report includes staffing adjustments to reflect ongoing operational changes and results of classification and compensation studies. To control compensation costs, staff repurposed existing or vacant positions to areas needing additional attention. Attachment C is a Salary Resolution detailing new classifications and salary rates, and Attachment D details the staffing adjustments. Recommended General Fund position changes include the addition of 2.0 Full Time Equivalent (FTE) police officers to provide transit security and law enforcement services to the BBB, 1.0 FTE Community Justice Legal Fellow to assist with victim advocacy, prevention, education and prosecution (offset by the deletion of another position in the City Attorney’s Office and reallocation of other funds), a 0.5 FTE Community Services Program Coordinator to provide specific oversight to the programming of contractors for the CREST Enrichment program (offset by the deletion of another position in Community and Cultural Services, and a 1.0 FTE Chief Operations Officer – Airport Director (offset by the deletion of two other positions in Public Works, one in the Airport Fund, as well as Airport and Vehicle Management Fund reimbursements of the position’s proportional share of work supporting those funds). In other funds, staff recommends the addition of 2.0 FTE Resource Recovery and Recycling (RRR) Crew Leaders to begin a succession plan for interested line staff (offset by the deletion of 2.8 FTE RRR positions). These changes result in a net increase of 0.1 FTE employees – a 1.9 FTE net increase in the General Fund and a 1.8 FTE decrease in other funds. Together, position changes result in a net decrease of approximately $105,000 in FY 2019-20 in the General Fund 8 of 10 and a net increase of approximately $180,000 in other funds primarily due to an ongoing reimbursement from the Big Blue Bus Fund to the General Fund . Update on City’s Fiscal Health and Fiscal Sustainability Measures As part of the FY 2019-21 Biennial Budget process, staff prepared a 10-year forecast that showed looming budget shortfalls due to flatten ing revenue growth, significant pension cost increases, and a probable recession. Council proactively approved the elimination of 28 full time equivalent positions and $17.3 million in efficiencies, a commitment by staff to identify and implement $2 million in additional efficiencies by FY 2022-23, and a plan for a Budget Task Force of community and City staff members to review and make recommendations on another $4 million in efficiencies that would take place over a period of 6 years. These steps allowe d the City to maintain a positive General Fund balance through FY 2021-22 but additional measures will be needed to erase shortfalls after this point, including consideration of new revenue sources. In addition, Council approved an accelerated, 13-year paydown of the City’s unfunded pension liability that would save over $100 million in interest costs over 30 years; the first payment, for $9.3 million, was made on October 31, 2019. Year-end numbers are showing an accelerated downward trend in key revenue sources—namely transient occupancy taxes and utility user taxes. We are seeing the early indications of a trend that, if it continues, may negatively impact the General Fund by as much as $5-6 million in FY 2019-20. This will change previous projections and require additional near-term adjustments to ensure that the General Fund balance remains positive in FY 2019-20 and beyond. Staff will continue to report on these measures to Council through the next 7 months as part of the Midyear and Adopted Budget reporting. In the meantime, staff is recommending that Council approve the following measures to mitigate shortfalls. • The City’s Fiscal Policy allows General Fund departments to retain one-third of their year-end non-salary savings (the Expenditure Control Program). Staff recommends a suspension of this program for one year. • Staff is recommending a new strategic approach for the FY 2020-22 Biennial CIP Budget and Ten-Year Plan (through FY 2029-30). The approach will seek to 9 of 10 address financial challenges and staff capacity by assessing current efforts and focusing on priorities. New project applications will need to consider what is currently-funded in the existing CIP Budget and continue to prioritize project completion. Identifying highest priorities will result in a more focused CIP that allocates resources to the key City, Council and Community priorities. Staff will provide the Council with more details on this process, and potential impacts on the long-term capital plan, as part of the January 2020 Midyear Budget report. Past Council Actions Meeting Date Description 06/12/18 (Attachment F) Adoption of FY 2018-19 Budget and Adoption of FY 2018-19 CIP Budget and Approval of FY 2019-20 CIP Budget Plan 06/25/19 (Attachment G) Adoption of FY 2019-20 Budget and Approval of FY 2020-21 Budget Plan and Adoption of FY 2019-20 CIP Budget Financial Impacts and Budget Actions The budget changes recommended for FY 2018 -19 result in a $14.4 million, or 1.9%, net increase over the FY 2018-19 Revised Budget. Detail for these changes is in Attachment A. Recommended FY 2019-20 expenditure changes result in a $2.1 million, or 0.3%, increase over the FY 2019-20 Adopted Budget. Recommended FY 2020-21 changes result in a $0.8 million expenditure increase from the FY 2020-21 Budget Plan. Detail for FY 2019-20 and FY 2020-21 changes is in Attachment B. 10 of 10 Prepared By: Susan Lai, Budget Manager Approved Forwarded to Council Attachments: A. FY 2018-19 Budget Adjustments B. FY 2019-21 Budget Adjustments C. Finance - Resolution - Salary Schedule - 11.12.2019 D. Position Change Summary E. Finance - Resolution - SMPD BBB - 11.12.2019 F. June 12, 2018 Staff Report (web link) G. June 25, 2019 Staff Report (web link) H. PowerPoint Presentation ATTACHMENT A Fund/Department Description FY 2018-19 Increase / (Decrease) CITY MANAGER Reflects adjustments related to computer equipment replacement program contributions, bargaining unit agreements, and use of funds previously set aside for mobility safety-related expenses 207.7$ TOTAL CITY MANAGER EXPENDITURE ADJUSTMENTS 207.7$ RECORDS & ELECTION SERVICES Reflects adjustments related to computer equipment replacement program contributions, bargaining unit agreements, and election expenses 355.5$ TOTAL RECORDS & ELECTION SERVICES EXPENDITURE ADJUSTMENTS 355.5$ FINANCE Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 189.1$ TOTAL FINANCE EXPENDITURE ADJUSTMENTS 189.1$ CITY ATTORNEY Reflects adjustments related to computer equipment replacement program contributions, bargaining unit agreements, Consumer Protection Unit, and legal expenses 5,664.7$ TOTAL CITY ATTORNEY EXPENDITURE ADJUSTMENTS 5,664.7$ HUMAN RESOURCES Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 56.5$ TOTAL HUMAN RESOURCES EXPENDITURE ADJUSTMENTS 56.5$ INFORMATION SERVICES Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 240.1$ TOTAL INFORMATION SERVICES EXPENDITURE ADJUSTMENTS 240.1$ PLANNING & COMMUNITY DEVELOPMENT Reflects adjustments related to computer equipment replacement program contributions, bargaining unit agreements, and the Macerich Parking Agreement 181.1$ TOTAL PLANNING & COMMUNITY DEVELOPMENT EXPENDITURE ADJUSTMENTS 181.1$ POLICE Reflects adjustments related to computer equipment replacement program contributions, bargaining unit agreements, and use of funds previously set aside for mobility safety-related expenses 1,000.4$ TOTAL POLICE EXPENDITURE ADJUSTMENTS 1,000.4$ FIRE Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 173.5$ TOTAL FIRE EXPENDITURE ADJUSTMENTS 173.5$ COMMUNITY & CULTURAL SERVICES Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 150.1$ TOTAL COMMUNITY & CULTURAL SERVICES EXPENDITURE ADJUSTMENTS 150.1$ REVISIONS TO FY 2018-19 EXPENDITURE BUDGET APPROPRIATIONS EXPENDITURE BUDGET ADJUSTMENTS ($ IN THOUSANDS) GENERAL FUND (01) November 12, 2019 1 of 5 ATTACHMENT A Fund/Department Description FY 2018-19 Increase / (Decrease) REVISIONS TO FY 2018-19 EXPENDITURE BUDGET APPROPRIATIONS LIBRARY Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 83.2$ TOTAL LIBRARY EXPENDITURE ADJUSTMENTS 83.2$ PUBLIC WORKS Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 471.8$ TOTAL PUBLIC WORKS EXPENDITURE ADJUSTMENTS 471.8$ HOUSING & ECONOMIC DEVELOPMENT Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 36.3$ TOTAL HOUSING & ECONOMIC DEVELOPMENT EXPENDITURE ADJUSTMENTS 36.3$ NON-DEPARTMENTAL Interfund Transfers Reflects the Council's November 27, 2018 decision to transfer Gillette/Boeing settlement funds from the General Fund to the Water Fund to restore the Olympic Sub-basin 53,486.3$ All Other Transactions Reflects allocation of funds previously set aside to individual departments to adjustments related to bargaining unit agreements (226.8)$ Reflects last of a 4-year infusion of reserve funds to the Workers' Compensation Self Insurance Fund 1,800.0 TOTAL NON-DEPARTMENTAL EXPENDITURE ADJUSTMENTS 55,059.5$ CAPITAL IMPROVEMENT PROGRAM (CIP) Reflects adjustments to computer equipment replacement program contributions 53.5$ Reflects adjustment for increased costs to Parking Revenue Equipment project as result of parking meter repairs. This increase is offset by General Fund project savings, for a net zero impact 68.0$ TOTAL CAPITAL IMPROVEMENT PROGRAM EXPENDITURE ADJUSTMENTS 121.5$ 63,990.7$ GENERAL FUND - EXPENDITURE OFFSETS Use of Reserves Use of reserves for adjustments associated with bargaining unit agreements 2,395.3$ Reflects use of funds previously set aside for mobility safety-related expenses 207.1$ Reflects use of General Fund project savings for the Parking Revenue Equipment project for parking meter repairs 68.0$ Reflects use of funds previously set aside for the Workers' Compensation Self Insurance Fund 1,800.0$ Use of reserves for legal expenses 5,483.4$ Release of Funds Release of restricted funds for operating costs of the Consumer Protection Unit 3.6$ 9,957.4$ 54,033.3$ NET GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL GENERAL FUND - EXPENDITURE OFFSETS November 12, 2019 2 of 5 ATTACHMENT A Fund/Department Description FY 2018-19 Increase / (Decrease) REVISIONS TO FY 2018-19 EXPENDITURE BUDGET APPROPRIATIONS CLEAN BEACHES & OCEAN PARCEL TAX (16) FUND Non-Departmental Adjustments reflecting actual receipt of funds from the State Clean Water Revolving Loan Fund and reduced Measure V funding subsidy to the Stormwater Management Fund to support the operation and maintenance of the Santa Monica Urban Runoff Recycling Facility based on actual costs incurred 9,334.1$ 9,334.1$ BEACH (11) FUND Community & Cultural Services Reflects adjustments related to computer equipment replacement program contributions (0.1)$ Capital Improvement Project Reflects adjustments related to computer equipment replacement program contributions 0.1$ -$ TORCA (14) FUND Non-Departmental Reflects adjustment for TORCA reimbursement to General Fund and recording of forgivable loan balances 181.4$ 181.4$ LOW/MOD INCOME HOUSING ASSET (41) FUND Non-Departmental Reflects adjustments for recording forgivable loan balances 187.6$ 187.6$ MISCELLANEOUS GRANTS (20) FUND Reflects allocation of 2016 Urban Areas Security Initiative (UASI) grant funding for a video storage system 516.7$ 516.7$ ASSET SEIZURE (21) FUND Police Reflects adjustment for various expenses 135.1$ 135.1$ COPS (22) FUND Police Reflects adjustment for various expenses 33.1$ 33.1$ WATER (50) FUND Public Works Reflects adjustments related to computer equipment replacement program contributions (0.4)$ Non-Departmental Reflects the Council's November 27, 2018 decision to transfer Gillette/Boeing settlement funds from the General Fund to the Water Fund to restore the Olympic Sub-basin (53,499.6)$ Capital Improvement Project Reflects adjustments related to computer equipment replacement program contributions 0.4$ (53,499.6)$ TOTAL TORCA FUND EXPENDITURE ADJUSTMENTS TOTAL CLEAN BEACHES & OCEAN PARCEL TAX FUND EXPENDITURE ADJUSTMENTS TOTAL ASSET SEIZURE FUND EXPENDITURE ADJUSTMENTS TOTAL COPS FUND EXPENDITURE ADJUSTMENTS TOTAL LOW/MOD INCOME HOUSING ASSET FUND EXPENDITURE ADJUSTMENTS TOTAL WATER FUND EXPENDITURE ADJUSTMENTS TOTAL BEACH FUND EXPENDITURE ADJUSTMENTS TOTAL MISCELLANEOUS GRANTS FUND EXPENDITURE ADJUSTMENTS November 12, 2019 3 of 5 ATTACHMENT A Fund/Department Description FY 2018-19 Increase / (Decrease) REVISIONS TO FY 2018-19 EXPENDITURE BUDGET APPROPRIATIONS RESOURCE RECOVERY AND RECYCLING (54) FUND Public Works Reflects adjustments related to computer equipment replacement program contributions (1.5)$ Capital Improvement Project Reflects adjustments related to computer equipment replacement program contributions 1.5$ -$ COMMUNITY BROADBAND (55) FUND Information Systems Reflects adjustment in contractual services from increased demand in lit fiber services 53.5$ Non-Departmental Reflects adjustment for bargaining unit agreements 31.5$ TOTAL COMMUNITY BROADBAND FUND EXPENDITURE ADJUSTMENTS 85.0$ WASTEWATER (51) FUND Public Works Reflects adjustments related to computer equipment replacement program contributions (2.9)$ Non-Departmental Reflects adjustments for delayed funding from the State Clean Water Revolving Loan Fund (9,840.0)$ Capital Improvement Project Reflects adjustments related to computer equipment replacement program contributions 2.9$ (9,840.0)$ AIRPORT (57) FUND Public Works Reflects adjustments related to computer equipment replacement program contributions (0.9)$ Capital Improvement Project Reflects adjustments related to computer equipment replacement program contributions 0.9$ -$ STORMWATER MANAGEMENT (52) FUND Non-Departmental Reflects adjustments for reduced Measure V funding subsidy to the Stormwater Management Fund to support the operation and maintenance of the Santa Monica Urban Runoff Recycling Facility based on actual costs incurred 505.9$ 505.9$ SCAQMD AB 2766 (18) FUND Non-Departmental Reflects adjustment for audit fees 7.0$ 7.0$ VEHICLE MANAGEMENT (70) Public Works Reflects adjustments related to computer equipment replacement program contributions (0.5)$ Capital Improvement Project Reflects adjustments related to computer equipment replacement program contributions 0.5$ -$ TOTAL VEHICLE MANAGEMENT FUND EXPENDITURE ADJUSTMENTS TOTAL STORMWATER MANAGEMENT FUND EXPENDITURE ADJUSTMENTS TOTAL WASTEWATER FUND EXPENDITURE ADJUSTMENTS TOTAL AIRPORT FUND EXPENDITURE ADJUSTMENTS TOTAL RRR FUND EXPENDITURE ADJUSTMENTS TOTAL SCAQMD AB 2766 FUND EXPENDITURE ADJUSTMENTS November 12, 2019 4 of 5 ATTACHMENT A Fund/Department Description FY 2018-19 Increase / (Decrease) REVISIONS TO FY 2018-19 EXPENDITURE BUDGET APPROPRIATIONS SELF-INSURANCE, COMPREHENSIVE (72) FUND Non-Departmental Reflects adjustments related to payment of claims 1,466.6$ 1,466.6$ SELF-INSURANCE, WORKER'S COMP (74) FUND Finance Reflects adjustment for office supplies charged to incorrect account 4.5$ Non-Departmental Reflects adjustments for pilot programs related to occupational medical, industrial hygiene, and safety training services 1,323.2$ 1,327.7$ (49,559.4)$ TOTAL GENERAL FUND EXPENDITURE ADJUSTMENTS 63,990.7$ TOTAL NON-GENERAL FUND EXPENDITURE ADJUSTMENTS (49,559.2)$ GRAND TOTAL FY 2018-19 ALL FUNDS EXPENDITURE ADJUSTMENTS 14,431.5$ TOTAL GENERAL FUND - EXPENDITURE OFFSETS (9,957.4)$ -$ (9,957.4)$ NET GENERAL FUND EXPENDITURE ADJUSTMENTS 54,033.3$ (49,559.2)$ 4,474.1$ NET NON-GENERAL FUND EXPENDITURE ADJUSTMENTS GRAND TOTAL FY 2018-19 NET ALL FUNDS EXPENDITURE ADJUSTMENTS TOTAL NON-GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL SELF-INSURANCE,COMPREHENSIVE FUND EXPENDITURE ADJUSTMENTS GRAND TOTAL FY 2018-19 ALL FUNDS - EXPENDITURE OFFSETS TOTAL NON-GENERAL FUND - EXPENDITURE OFFSETS TOTAL SELF-INSURANCE, WORKER'S COMP FUND EXPENDITURE ADJUSTMENTS November 12, 2019 5 of 5 ATTACHMENT B Fund/Department Description FY 2019-20 Increase / (Decrease) FY 2020-21 Increase / (Decrease) INFORMATION TECH REPLACEMENT & SERVICES FUND (71) INFORMATION SERVICES Reflects adjustments related to computer equipment replacement program contributions (61.4)$ (61.4)$ (61.4)$ (61.4)$ TOTAL NON-GENERAL FUND REVENUE ADJUSTMENTS (61.4)$ (61.4)$ GRAND TOTAL - ALL FUND REVENUE ADJUSTMENTS (61.4)$ (61.4)$ CITY MANAGER Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 27.3$ 18.3$ TOTAL CITY MANAGER EXPENDITURE ADJUSTMENTS 27.3$ 18.3$ RECORDS & ELECTION SERVICES Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 4.1$ 2.8$ TOTAL RECORDS & ELECTION SERVICES EXPENDITURE ADJUSTMENTS 4.1$ 2.8$ FINANCE Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 4.0$ 2.5$ TOTAL FINANCE EXPENDITURE ADJUSTMENTS 4.0$ 2.5$ CITY ATTORNEY Reflects adjustments related to computer equipment replacement program contributions, bargaining unit agreements, and use of salary savings to fund staffing changes (169.1)$ (170.8)$ TOTAL CITY ATTORNEY EXPENDITURE ADJUSTMENTS (169.1)$ (170.8)$ HUMAN RESOURCES Reflects adjustments related to computer equipment replacement program contributions, re-appropriation of funds for the management fellow program, and bargaining unit agreements 69.1$ 1.4$ TOTAL HUMAN RESOURCES EXPENDITURE ADJUSTMENTS 69.1$ 1.4$ INFORMATION SERVICES Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 1.8$ 0.4$ TOTAL INFORMATION SERVICES EXPENDITURE ADJUSTMENTS 1.8$ 0.4$ PLANNING & COMMUNITY DEVELOPMENT Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements (1.1)$ (2.6)$ TOTAL PLANNING & COMMUNITY DEVELOPMENT EXPENDITURE ADJUSTMENTS (1.1)$ (2.6)$ POLICE Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 1,114.3$ 1,153.8$ TOTAL POLICE EXPENDITURE ADJUSTMENTS 1,114.3$ 1,153.8$ NON-GENERAL FUNDS TOTAL INFORMATION TECH REPLACEMENT & SVCS FUND REVENUE ADJUSTMENTS REVISIONS TO FY 2019-21 REVENUE AND EXPENDITURE BUDGET APPROPRIATIONS EXPENDITURE BUDGET ADJUSTMENTS ($ IN THOUSANDS) GENERAL FUND (01) REVENUE BUDGET ADJUSTMENTS ($ IN THOUSANDS) November 12, 2019 1 of 4 ATTACHMENT B Fund/Department Description FY 2019-20 Increase / (Decrease) FY 2020-21 Increase / (Decrease) REVISIONS TO FY 2019-21 REVENUE AND EXPENDITURE BUDGET APPROPRIATIONS FIRE Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 6.4$ 4.2$ TOTAL FIRE EXPENDITURE ADJUSTMENTS 6.4$ 4.2$ COMMUNITY & CULTURAL SERVICES Reflects adjustments related to computer equipment replacement program contributions, bargaining unit agreements, and the re-appropriation of one-time funding to address homelessness 704.7$ (8.2)$ TOTAL COMMUNITY & CULTURAL SERVICES EXPENDITURE ADJUSTMENTS 704.7$ (8.2)$ LIBRARY Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 2.9$ 1.7$ TOTAL LIBRARY EXPENDITURE ADJUSTMENTS 2.9$ 1.7$ PUBLIC WORKS Reflects adjustment for staffing changes, re-appropriation of utility budget, bargaining unit agreements, and adjustments related to computer equipment replacement program contributions 184.9$ 61.7$ TOTAL PUBLIC WORKS EXPENDITURE ADJUSTMENTS 184.9$ 61.7$ HOUSING & ECONOMIC DEVELOPMENT Reflects adjustments related to computer equipment replacement program contributions and bargaining unit agreements 4.2$ 2.9$ TOTAL HOUSING & ECONOMIC DEVELOPMENT EXPENDITURE ADJUSTMENTS 4.2$ 2.9$ NON-DEPARTMENTAL Interfund Transfers Reflects transfers from Airport Fund and Vehicle Management Fund to reimburse costs related to position budgeted in the General Fund (91.4)$ (158.8) Reflects transfer from the Big Blue Bus Fund to reimburse costs related to positions budgeted in the General Fund to provide transit security services to Big Blue Bus (388.9)$ (666.6) TOTAL NON-DEPARTMENTAL EXPENDITURE ADJUSTMENTS (480.3)$ (825.4)$ CAPITAL IMPROVEMENT PROGRAM (CIP) Reflects adjustments related to computer equipment replacement program contributions 53.5$ 53.5$ Reflects adjustment related to the Airport Runway Repurposing project, in which the General Fund portion will pay for the construction in the Runway Safety Areas that are not eligible to be funded by airport revenues 305.9$ -$ TOTAL CAPITAL IMPROVEMENT PROGRAM EXPENDITURE ADJUSTMENTS 359.4$ 53.5$ 1,832.6$ 296.2$ GENERAL FUND - EXPENDITURE OFFSETS Use of Savings Reflects a reappropriation of FY 2018-19 CIP funds to FY 2019-20 for the Airport Runway Repurposing project 305.9$ - Reflects a reappropriation of FY 2018-19 funds to FY 2019-20 for the management fellow program, utility budget, and to address homelessness 927.7$ - 1,233.6$ -$ 599.0$ 296.1$ TOTAL GENERAL FUND - EXPENDITURE OFFSETS NET GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL GENERAL FUND EXPENDITURE ADJUSTMENTS November 12, 2019 2 of 4 ATTACHMENT B Fund/Department Description FY 2019-20 Increase / (Decrease) FY 2020-21 Increase / (Decrease) REVISIONS TO FY 2019-21 REVENUE AND EXPENDITURE BUDGET APPROPRIATIONS BEACH (11) FUND Community & Cultural Services Reflects adjustments related to computer equipment replacement program contributions (0.1)$ (0.1)$ Capital Improvement Program Reflects adjustments related to computer equipment replacement program contributions 0.1$ 0.1$ -$ -$ WATER (50) FUND Public Works Reflects adjustments related to computer equipment replacement program contributions (0.4)$ (0.4)$ Capital Improvement Program Reflects adjustments related to computer equipment replacement program contributions 0.4$ 0.4$ -$ -$ RESOURCE RECOVERY AND RECYCLING (54) FUND Public Works Reflects adjustments related to computer equipment replacement program contributions and staffing changes (25.7)$ (43.3)$ Capital Improvement Program Reflects adjustments related to computer equipment replacement program contributions 1.5$ 1.5$ (24.2)$ (41.8)$ WASTEWATER (51) FUND Public Works Reflects adjustments related to computer equipment replacement program (2.9)$ (2.9)$ Capital Improvement Program Reflects adjustments related to computer equipment replacement program 2.9$ 2.9$ -$ -$ AIRPORT (57) FUND Public Works Reflects adjustments related to computer equipment replacement program contributions and staffing changes (146.8)$ (254.3)$ Non-Departmental Reflects transfers to reimburse costs related to position budgeted in the General Fund 60.9$ 105.8$ Capital Improvement Program Reflects adjustments related to computer equipment replacement program contributions 0.9$ 0.9$ (85.0)$ (147.6)$ BIG BLUE BUS (60) Big Blue Bus Reflects adjustments for bargaining unit agreements 4.9$ 3.3$ Non-Departmental Reflects transfer to reimburse costs related to positions budgeted in the General Fund to provide transit security services to Big Blue Bus 388.9$ 666.6 393.8$ 669.9$ TOTAL BIG BLUE BUS FUND EXPENDITURE ADJUSTMENTS TOTAL WATER FUND EXPENDITURE ADJUSTMENTS TOTAL BEACH FUND EXPENDITURE ADJUSTMENTS TOTAL WASTEWATER FUND EXPENDITURE ADJUSTMENTS TOTAL AIRPORT FUND EXPENDITURE ADJUSTMENTS TOTAL RRR FUND EXPENDITURE ADJUSTMENTS NON-GENERAL FUNDS November 12, 2019 3 of 4 ATTACHMENT B Fund/Department Description FY 2019-20 Increase / (Decrease) FY 2020-21 Increase / (Decrease) REVISIONS TO FY 2019-21 REVENUE AND EXPENDITURE BUDGET APPROPRIATIONS VEHICLE MANAGEMENT (70) Public Works Reflects adjustments related to computer equipment replacement program contributions (0.5)$ (0.5)$ Non-Departmental Reflects transfers to reimburse costs related to position budgeted in the General Fund 30.5$ 52.9$ Capital Improvement Program Reflects adjustments related to computer equipment replacement program contributions 0.5$ 0.5$ 30.5$ 52.9$ 315.1$ 533.4$ TOTAL GENERAL FUND REVENUE ADJUSTMENTS -$ -$ TOTAL NON-GENERAL FUND REVENUE ADJUSTMENTS (61.4)$ (61.4)$ GRAND TOTAL FY 2019-21 ALL FUNDS REVENUE ADJUSTMENTS (61.4)$ (61.4)$ TOTAL GENERAL FUND EXPENDITURE ADJUSTMENTS 1,832.6$ 296.1$ TOTAL NON-GENERAL FUND EXPENDITURE ADJUSTMENTS 315.1$ 533.5$ GRAND TOTAL FY 2019-21 ALL FUNDS EXPENDITURE ADJUSTMENTS 2,147.7$ 829.6$ TOTAL GENERAL FUND - EXPENDITURE OFFSETS 1,233.6$ -$ -$ -$ 1,233.6$ -$ NET GENERAL FUND EXPENDITURE ADJUSTMENTS 598.9$ 296.1$ 315.0$ 533.5$ 913.9$ 829.6$ GRAND TOTAL FY 2019-21 ALL FUNDS - EXPENDITURE OFFSETS TOTAL NON-GENERAL FUND - EXPENDITURE OFFSETS NET NON-GENERAL FUND EXPENDITURE ADJUSTMENTS GRAND TOTAL FY 2019-21 NET ALL FUNDS EXPENDITURE ADJUSTMENTS TOTAL NON-GENERAL FUND EXPENDITURE ADJUSTMENTS TOTAL VEHICLE MANAGEMENT FUND EXPENDITURE ADJUSTMENTS November 12, 2019 4 of 4 ATTACHMENT C 1 City Council Meeting: November 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 ASSISTANT DIRECTOR OF HUMAN RESOURCES, CITY ENGINEER, CHIEF OPERATIONS OFFICER-AIRPORT DIRECTOR, COMMUNITY JUSTICE LEGAL FELLOW, HISTORIC PRESERVATION OFFICER, LATENT FINGERPRINT EXAMINER, AND LEGAL OPERATIONS COORDINATOR. 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 November 24, 2019, for the indicated permanent classifications: CITY ENGINEER $16,083/month, Step 5 ASSISTANT DIRECTOR OF HUMAN RESOURCES $15,526/month, Step 5 HISTORIC PRESERVATION OFFICER $11,948/month, Step 5 LEGAL OPERATIONS COORDINATOR $9,398/month, Step 5 CHIEF OPERATIONS OFFICER-AIRPORT DIRECTOR $15,641/month, Step 5 COMMUNITY JUSTICE LEGAL FELLOW $7,151/month, Step 5 SECTION 2. The following salary levels are hereby established, effective November 24, 2019, for the indicated as-needed classifications: LATENT FINGERPRINT EXAMINER $32.00/hour ATTACHMENT C 2 SECTION 3. 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 POSITION AND CLASSIFICATION CHANGES ATTACHMENT D REASON FUND DEPT FTE POSITION TITLE FUND DEPT FTE POSITION TITLE PRIMARY REASON NET FTE CHANGE NET SAL CHANGE 01 CAO 1.0 Family Victim Advocate - CAO 01 CAO 1.0 Community Justice Legal Fellow 2 Add/Delete - 12,412 01 CAO 1.0 Legal Admin Staff Assistant 01 CAO 1.0 Legal Operations Coordinator Title Change - - 01 CCS 1.0 Staff Assistant III 01 CCS 1.0 Marketing/Communication Assistant Re-Organization - - 01 CCS 0.6 Community Svs Program Specialist 01 CCS 0.5 Community Svs Program Coordinator Re-Organization (0.1) (1,544) 01 Police 01 Police 2.0 Police Officer 3 New position 2.0 203,695 01 PW 1.0 City Engineer 01 PW 1.0 City Engineer Equity Adjustment - 2,238 57 PW 1.0 Airport & Real Estate Director 01 PW 1.0 Chief Operations Officer - Airport Director 4 Re-Organization - 6,443 01 PW 1.0 Facilities Maintenance Manager 01 PW Delete position (1.0) (113,789) 54 PW 1.0 Motor Sweeper Operator 54 PW 2.0 RRR Crew Leader Re-Organization 1.0 67,426 54 PW 1.0 RRR Equipment Operator 54 PW Re-Organization (1.0) (51,762) 54 PW 0.8 Bin Truck Operator 54 PW Re-Organization (0.8) (39,852) 0.1 FTE 85,267 01 CCS 0.04 Community & Cultural Services Leader 0.04 1,544 0.0 FTE 1,544 0.1 FTE 86,811 TEMPORARY EMPLOYEES TOTAL DELETE ADD GRAND TOTAL PERMANENT EMPLOYEES TOTAL SUBTOTALS1 1. Salary totals include fringe costs and are prorated to 7 months. 3. Police Officers funded from Big Blue Bus Fund. 4. Position funded with 40% General Fund, 40% Airport Fund and 20% Vehicle Management Fund funds. 2. Position funded with General Fund salary savings. November 12, 2019 ATTACHMENT E 1 City Council Meeting: November 12, 2019 Santa Monica, California RESOLUTION NO. (CCS) (CITY COUNCIL SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA SUPPORTING THE SANTA MONICA POLICE DEPARTMENT TO PROVIDE TRANSIT SECURITY AND LAW ENFORCEMENT SERVICES TO THE BIG BLUE BUS FOR A 19-MONTH PILOT PROGRAM WHEREAS, the City Council has identified Safety as one of the seven values which underpin all of our efforts to achieve a Sustainable City of Wellbeing; and WHEREAS, the Big Blue Bus (“BBB”) has examined opportunities to enhance transit security on its fleet and at its bus stops along its routes to address concerns from customers and motor coach operators; and WHEREAS, BBB has expressed interest in engaging with the Santa Monica Police Department (“SMPD”) to provide transit security and law enforcement services on its public buses and at its bus stops along its routes for a 19-month pilot program; and WHEREAS, governmental finance practices separate various government funds, including enterprise funds, from the City’s General Fund; and WHEREAS, the BBB operates using an enterprise fund that accounts for revenues and expenses related to operation of the City’s municipal bus lines; and WHEREAS, the SMPD operates using the City’s General Fund to pay for expenses incurred in providing services; and ATTACHMENT E 2 WHEREAS, the Full Cost Allocation Plan (“CAP”) is intended to ensure that the General Fund recovers both direct and indirect costs for services from enterprise funds, special revenue funds and other funds; and WHEREAS, the City of Santa Monica prepares a CAP update, in the form of a comprehensive analysis of City costs and fees, at least every five years, and during the years between updates, fees and hourly billing rates are increased annually by a factor based on the annual increase in total compensation costs, unless otherwise stated for specific fees; and WHEREAS, the City of Santa Monica uses the direct and indirect cost information obtained through the CAP update to establish user fees, permits and application fees, hourly billing rates, and costs of special services; and WHEREAS, the City’s Master Fee Schedule includes hourly billing rates by classification for various police services; and WHEREAS, it is the policy of the City of Santa Monica to charge for the full costs of police services provided by City Staff when such police services benefit individual users, including individual enterprise funds, and do not provide significant benefits to the Santa Monica community as a whole; and WHEREAS, it is anticipated that SMPD officers providing security on BBB buses and at bus stops along BBB routes, which include routes running through downtown Santa Monica and along several of Santa Monica’s main thoroughfares, will also be responding to safety concerns outside the buses along the bus routes and therefore will be providing law enforcement services affording significant benefits to the Santa Monica ATTACHMENT E 3 community as a whole. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA RESOLVES AS FOLLOWS: SECTION 1. A Memorandum of Understanding (MOU) will be executed between BBB and SMPD to provide transit security and law enforcement services on BBB’s public buses and at bus stops along BBB bus routes for a 19-month pilot program. SECTION 2. The City has calculated the total annual direct and indirect costs of SMPD providing transit security and law enforcement services on BBB’s public buses and at bus stops along BBB bus routes. SECTION 3. The City has determined that the amount the City’s General Fund charges the BBB enterprise fund for the SMPD providing transit security and law enforcement services on BBB’s public buses and at bus stops along BBB bus routes should be discounted to 70% of the full direct and indirect costs of providing those services because such services, in addition to benefiting BBB and its staff and riders, also significantly benefit the Santa Monica community as a whole. SECTION 4. Upon the conclusion of the 19-month pilot program ending June 30, 2021, BBB and SMPD will evaluate the effectiveness of the program and the discounting of the costs charged to BBB for the program. ATTACHMENT E 4 SECTION 5. 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 November 12, 2019 FY 2018-19 Ye ar-End Budget Review FY 2018-19 General Fund YE Results $1.6M to Reserves •$1.4M greater one- time revenues •$0.2M net operating expenditure savings $22.3 $15.2 $12.8 $10.9 $3.1 $1.6 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Programming General Fund Reser ves Settlement Funds allocated to Water,City Yards Savings to Civic Field Project Equity 21stC Workplace Strategic Goals Workers’ Compensation Pension paydown Contingency for unanticipated one-time costs FY 2018-19 Non-General Fund YE Re sults $2.6M More Revenues •-$5.0M Airport FBO •+$2.5M Water development fees/investment income •+$5.1M Developer fe es $25.3M Expenditure Savings •$5.0M Airport FBO •$4.0M Vacancies •$14.6M Savings •$1.7M Project timing Citywide Budget Changes FY 2018-19: $14.4M Af ter Assigned Reser ves Used: $4.5M Impact Gillette/Boeing settlement Legal expenses Wo rkers compensation FY 2019-20: $2.1M Af ter Use of Savings: $0.9M Re appropriation St affing changes Equipment replacement Po sition Changes Funded by Another Fund •2.0 FTE Police Officers for Tra nsit Security (BBB) Repurposing Positions •Community Justice Legal Fellow •0.5 Community Services Program Coordinator (-0.1) •COO –Airport Director (-1.0) •2.0 RRR Crew Leaders (-0.8) Net Increase = 0.1 FTE •1.9 FTE General Fund •-1.8 FTE other funds •$75,000 Net Cost (non-GF) Fiscal Sustainability Measures Expenditure Control Program •One-third of year-end non-salary savings •Suspend for one year Capital Improvement Program (CIP) Budget •New strategic approach •Assess current efforts •Focus on priorities Re view: •Ye ar-end financial status Approve: •Measures to mitigate new financial challenges •Changes to FY 2018-19 Revised Budget •Changes to FY 2019-20 Adopted Budget and FY 2020-21 Budget Plan •Po sition and classification changes Adopt Resolutions: •Set new classifications & salar y rates •Suppor t SMPD to provide ser vices to BBB for a pilot program Re commended Actions